United States v. Myers
| Decision Date | 14 September 2015 |
| Docket Number | No. 13–10580.,13–10580. |
| Citation | 804 F.3d 1246 |
| Parties | UNITED STATES of America, Plaintiff–Appellee, v. Lloyd MYERS, Defendant–Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Michael K. Hinckley (argued), Law Offices of Michael Hinckley, Berkeley, CA, for Defendant–Appellant.
Owen P. Martikan, Assistant United States Attorney (argued), Melinda Haag, United States Attorney, United States Attorney's Office, San Francisco, CA, for Plaintiff–Appellee.
Appeal from the United States District Court for the Northern District of California, Edward J. Davila, District Judge, Presiding. D.C. No. 5:09–cr–01195–EJD–2.
Before: M. MARGARET McKEOWN, MARY H. MURGUIA, and MICHELLE T. FRIEDLAND, Circuit Judges.
ORDER
The Opinion filed September 14, 2015 is amended as follows:
1. At slip op. page 20 , lines 11–14, change “Even though the magistrate judge's participation in the settlement conference amounts to Rule 11(c)(1) error, the “error” did not cause Myers to plead guilty; the settlement conference merely facilitated that result.” to “Even though the magistrate judge's participation in the settlement conference amounts to Rule 11(c)(1) error, there is no indication in the record that the magistrate judge's involvement caused Myers to plead guilty—to the contrary, that is the result Myers had long sought to achieve.”
2. At slip op. page 20 , lines 15–17, change “It resulted in Myers reaching a favorable plea agreement with the government, avoiding trial, and receiving a below-Guidelines sentence.” to “Moreover, Myers reached a favorable plea agreement with the government, avoided trial, and received a below-Guidelines sentence.”
With these amendments, the panel has voted to deny the petition for panel rehearing and the petition for rehearing en banc.
The full court has been advised of the petition for rehearing en banc and no judge has requested a vote on whether to rehear the matter en banc. Fed. R.App. P. 35.
The petition for panel rehearing and the petition for rehearing en banc are DENIED (Doc. 52).
No further petitions for rehearing or rehearing en banc will be entertained in this case.
Lloyd Myers was indicted on ten fraud-related charges stemming from his involvement in a Ponzi scheme he operated with his brother-in-law. After nearly three years of pretrial proceedings, Myers requested a judge-led criminal settlement conference in accordance with the Northern District of California's Criminal Local Rule 11–1. The prosecutor, initially opposed to the procedure due to the rapidly approaching trial date, ultimately acquiesced to Myers's request. The district court referred the matter to a magistrate judge to conduct a settlement conference. During the proceeding, Myers and the government reached a plea deal that was subsequently memorialized in a written plea agreement between the parties. Myers later pled guilty to one count of conspiracy to commit wire fraud in violation of 18 U.S.C. § 1349 and was sentenced to a below-Guidelines sentence of eighteen months' imprisonment.
Myers does not dispute that he voluntarily participated in the settlement conference. Rather, he argues the procedure violated Federal Rule of Criminal Procedure 11, which prohibits “[t]he court” from “participat[ing] in [plea] discussions.” Fed.R.Crim.P. 11(c)(1). Specifically, Myers argues that the Supreme Court's decision in United States v. Davila, ––– U.S. ––––, 133 S.Ct. 2139, 186 L.Ed.2d 139 (2013), sets forth a categorical rule prohibiting any judicial involvement in plea negotiation, even, as is at issue here, when the judicial participation is both requested by the defendant and sanctioned by the district court's local rules.
We agree that Davila makes clear that Rule 11(c)(1) imposes a categorical bar on judicial participation in plea negotiations. Because Myers failed to object at the time to judicial participation, however, we review his unpreserved Rule 11 claim for plain error, and we affirm. Myers has failed to establish the alleged error affected his substantial rights because the record is bereft of evidence indicating that he suffered any prejudice due to the magistrate judge's participation in the settlement conference. Rather, the settlement conference helped Myers reach a plea deal with the government—something Myers vigorously pursued during the nearly three years of pretrial proceedings—which resulted in Myers receiving a below-Guidelines sentence.
In 2003, Myers and his brother-in-law, Rodney Hatfield, created Landmark Trading Company, LLC, to solicit investments and conduct financial transactions in the foreign currency exchange markets (“Forex” transactions). Myers and Hatfield had very little, if any, training or experience with Forex trading. Between 2003 and 2006, Hatfield recruited approximately forty investors, many of whom were fellow congregation members from Myers's and Hatfield's place of worship. Once funded, Hatfield transferred the money to a Forex trading account, which Myers controlled and operated. Myers and Hatfield received over $3,000,000 from investors, but because Myers's Forex trades were wildly unsuccessful, Landmark never turned a profit. However, this was not the information Myers and Hatfield represented to investors. Rather, investors were told the company was flush with cash and its investments consistently achieved monthly profits of up to three percent. To disguise the company's losses, Myers and Hatfield used new investors' funds to pay off other investors. By early 2007, the scheme had reached a breaking point: Myers and Hatfield reported to investors the value of Landmark's investment account was approximately $2,154,415, when the account actually contained a meager $4,615.
In December 2009, Myers and Hatfield were indicted in the Northern District of California for one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and nine counts of wire fraud, in violation of 18 U.S.C. § 1343. Following numerous delays, trial was set for March 2013. Leading up to the trial date, Myers and Hatfield actively sought to reach a plea deal with the government. For example, in August 2012, the parties stipulated to a hearing continuance “to allow time for defendants' counsel to continue to work toward a resolution of the case with the government.” The district court granted the motion and set a status conference hearing for November 5, 2012.
During the November 5 status conference, 1 after a brief discussion about the progress of pretrial discovery, the district court asked whether the parties wished to advance the trial date. Myers's counsel responded:
Well, you know, I think the Court's intentions are to keep the ball rolling, and our idea is to have our feet to the fire ... rather than having them in the fire. I think what we have been discussing, Your Honor, is possibly setting a [Criminal Local Rule 11–1] settlement conference prior to the Thanksgiving holiday.
Under the Northern District of California's Criminal Local Rule 11–1, titled “Voluntary Settlement Conference,” the government and a criminal defendant “acting jointly” may request that the district court refer the case to another judge or magistrate judge to conduct a settlement conference. N.D. Cal.Crim. R. 11–1(a). The “role of the settlement Judge is to assist the parties in exploring a voluntary settlement in a criminal case.”2 N.D. Cal.Crim. R. 11–1(c). The rule expressly provides: “[a]ny party may unilaterally withdraw its request for a settlement conference at any time.” N.D. Cal.Crim. R. 11–1(d).
The government initially resisted Myers's request for a settlement conference. The prosecutor acknowledged that Myers had made “good efforts in trying to resolve the matter up until today,” but stated “the government's ability to resolve [the case without trial] would be rapidly diminishing” given the approaching trial date. However, the government ultimately agreed to Myers's request and the district court referred the matter to a magistrate judge to oversee the settlement conference.
On December 14, 2012, the parties took part in a five-hour settlement conference with the magistrate judge, where Myers agreed, among other things, to plead guilty to one count of conspiracy to commit wire fraud. A few weeks later, Myers and the government entered into a written plea agreement in which Myers agreed, among other things, to “give up [his] right to appeal [his] conviction, the judgment, and orders of the Court.”
The district court held a change of plea hearing in February 2013. There, Myers acknowledged that he had waived his right to appeal his conviction and sentence, and he affirmed that his guilty plea was knowing and voluntary. Myers expressed satisfaction with the quality of his representation and confirmed that he was pleading guilty because he was, in fact, guilty. The district court accepted Myers's guilty plea.
The district court sentenced Myers on October 15, 2013. The district court imposed a sentence of 18 months' imprisonment, below the 24–month sentence recommended by Probation.
Federal Rule of Criminal Procedure 11 prohibits “[t]he court” from participating in plea discussions.
Fed.R.Crim.P. 11(c)(1). The Federal Rules broadly define “[c]ourt” to “mean[ ] a federal judge performing functions authorized by law,” Fed.R.Crim.P. 1(b)(2), a definition which expressly includes “a magistrate judge” executing his or her legal duty, Fed.R.Crim.P. 1(b)(3)(B). While Rule 11(c)(1) appears to prohibit any form of judicial participation in the plea bargaining process, our “court previously approved the participation by a settlement judge in plea negotiations.” United States v. Scolari, 72 F.3d 751, 753 (9th Cir.1995) ; see United States v. Torres, 999 F.2d 376, 377–78 (9th Cir.1993) (per curiam) (...
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