United States v. Young C. Park

• Decision Date: 09 July 2014
• Docket Number: No. 13–4142–cr.,13–4142–cr.
• Court: U.S. Court of Appeals — Second Circuit
• Parties: UNITED STATES of America, Appellant, v. Young C. PARK, Defendant–Appellee.

758 F.3d 193

UNITED STATES of America, Appellant,

v.Young C. PARK, Defendant–Appellee.

No. 13–4142–cr.

United States Court of Appeals,Second Circuit.

Argued June 26, 2014.

Decided July 9, 2014.

Patricia A. Pileggi, Schiff Hardin LLP, New York, NY, for Defendant–Appellee Young C. Park.

Elissa Hart–Mahan (Kathryn Keneally, Assistant Attorney General, Frank P. Cihlar, Chief, Criminal Appeals & Tax Enforcement Policy Section, Gregory V. Davis, Attorney, Tax Division, on the brief), for Loretta E. Lynch, United States Attorney for the Eastern District of New York, Brooklyn, NY, for Appellant United States.

Before: CABRANES, CARNEY, and DRONEY, Circuit Judges.

PER CURIAM:

The United States appeals from the sentence imposed on defendant Young C. Park, pursuant to an October 24, 2013 judgment of the United States District Court for the Eastern District of New York (Frederic Block, Judge ), following Park's guilty plea to one count of filing a false corporate tax return in violation of 26 U.S.C. § 7206.

We consider on appeal whether the District Court erred in sentencing Park to a below-guidelines probationary sentence rather than a term of imprisonment based solely on its belief that the government could not afford the cost of incarceration during a so-called “government shut-down.” We hold that the District Court failed to conduct a meaningful review of the sentencing factors enumerated in 18 U.S.C. § 3553(a), and that the cost of incarceration, much less a political phenomenon styled a “government shut-down,” is not a permissible factor to consider in determining whether to impose a term of imprisonment. In light of the need for deterrence and just punishment and the District Court's own remarks suggesting that a term of imprisonment was warranted, we also hold that the probationary sentence imposed here was substantively unreasonable. Accordingly, we VACATE the sentence imposed by the District Court and REMAND for plenary resentencing in accordance with this opinion.

BACKGROUND

On July 10, 2012, Park waived indictment and pleaded guilty to an information charging him with filing a false corporate tax return, in violation of 26 U.S.C. § 7206(1). According to the Presentence Report (“PSR”) prepared by the United States Probation Office, in 2004 and 2005, Park diverted his business's cash receipts from the corporate bank account, filed false corporate tax returns that significantly understated the business's gross receipts, and underpaid payroll taxes that were due and owing. The PSR calculated an applicable Guidelines range of 15 to 21 months' imprisonment, based on Park's prior convictions for fraud offenses ¹ and a total tax loss of $133,601.

Park was sentenced on October 11, 2013, during a so-called “government shut-down.” ² At the sentencing hearing, the District Court initially revealed that it was inclined to impose a sentence of incarceration in light of Park's prior convictions and resulting prison sentence. The Court then noted, however, that the “economic problems” caused by the 2013 government shut-down warranted consideration, stating:

I'm going to say that I would probably give a period of incarceration if not for the financial pressures that the Court has, the court system and the government has. Especially low-level federal employees at the present time. And we really can't afford the luxury of paying another $28,000 to keep this person in jail under the circumstances and I encourage you to appeal.³

The Court then expressly reaffirmed that its decision not to impose a sentence of incarceration was based solely on the government shut-down, asserting, “I'm making the record that I am not going to put him in jail only because of the economic plight that we are facing today.” ⁴

The Court then proceeded to sentence Park to three years' probation, including six months' home confinement, the cost of which was to be paid by Park. It did not impose a fine or any restitution beyond that already paid as a condition of the guilty plea. Having secured the required approval of the Solicitor General of the United States,⁵ the government filed a timely notice of appeal, contending that the Court erred in considering the cost of incarceration as a relevant sentencing factor.

DISCUSSION

We review sentences on appeal only for “reasonableness.” ⁶ This type of scrutiny includes two components: “procedural” review and “substantive” review—although in sentencing, as in many areas of the law, the precise line between procedure and substance is often elusive.⁷Whether a sentence satisfies the objectives enumerated in the 18 U.S.C. § 3553(a)—a substantive inquiry—depends upon the explanation given by the District Court pursuant to 18 U.S.C. § 3553(c)—a procedural requirement.⁸ Where, as here, a district court relies on an improper factor to justify the sentence imposed, it can be difficult, if not impossible, for a reviewing court to evaluate separately the “procedural” and “substantive” reasonableness of a sentence.

A. “Procedural” Unreasonableness

The procedural review focuses on whether the sentencing court followed all the necessary steps in deciding upon a sentence. ⁹ A district court normally begins all sentencing proceedings by calculating the applicable Guidelines range, and will then consider the factors listed in 18 U.S.C. § 3553(a),¹⁰ as required by statute,¹¹ before imposing a final sentence.¹² Although “[a] judge need not utter ‘robotic incantations' repeating each factor that motivates a sentence [,] ... the judge must explain enough about the sentence for a reviewing court both to understand it and to assure itself that the judge considered the principles enunciated in federal statutes and the Guidelines.” ¹³ Further, when a district court imposes a sentence outside the recommended range, as the Court did here, it “must consider the extent of the deviation and ensure that the justification is sufficiently compelling to support the degree of the variance.” ¹⁴

After a review of the record, we conclude that the District Court committed procedural error in imposing a term of probation in lieu of imprisonment for two reasons. First, the only sentencing factor the District Court deemed relevant was the cost of incarceration to the government and the economic problems allegedly caused by the government shut-down. As the Court clearly announced, “I am not going to put him in jail only because of the economic plight that we are facing today.

” ¹⁵ After emphasizing that its sentencing decision was based solely upon this consideration, the Court then rebuffed defense counsel's suggestion to “supplement the record,” asserting, “[i]f we have to resentence him, we will later.” ¹⁶ The Court also stated that if the Court of Appeals were to reverse, it would “consider all of these factors” at resentencing,¹⁷ clearly indicating that it did not consider the relevant factors in the first instance. The Court therefore committed procedural error by refusing to consider the § 3553(a) factors in deciding what is an appropriate sentence.

Second, and equally problematic, is that the cost of incarceration to the government—the Court's sole justification for imposing a term of probation rather than incarceration—is not a relevant sentencing factor under the applicable statutes. We agree with the Eighth Circuit that, based on the plain language of § 3553(a), no sentencing factor can reasonably be read to encompass the cost of incarceration.¹⁸ Nor does the statute permit the sentencing court to balance the cost of incarceration against the sentencing goals enumerated in § 3553(a).¹⁹

Such an understanding is consistent with the broader legislative scheme. The imposition of a fine is governed by 18 U.S.C. § 3572, which, like § 3553(a), includes a list of factors for district judges to consider. Sections 3572(a) states that, “[i]n determining whether to impose a fine, ... the court shall consider, in addition to the factors set forth in section 3553(a) ... the expected costs to the government of any imprisonment.” ²⁰ This section makes clear that the cost of incarceration is not included in the § 3553(a) factors; if it were, cost of imprisonment would not have been necessary to list as an additional factor relevant to the imposition of a fine.²¹

Park argues alternatively that, although the statute may not require sentencing courts to consider the cost of imprisonment, nothing prohibits them from doing so. We are reluctant, however, to expand relevant sentencing considerations beyond those enumerated in § 3553(a), insofar as the purpose of the “statutory mandate of § 3553” was to “necessarily channel [ ] district court[s'] sentencing discretion.” ²² Permitting considerations of costs as an additional factor would be particularly inappropriate in view of “the express inclusion of cost of imprisonment as a consideration [with respect to fines] in § 3572(a),” which “demonstrates that when Congress intended to include cost as a consideration, it did so very clearly.” ²³ Moreover, as the Eighth Circuit has noted, “[t]he decision whether tax dollars should be used to pay for lengthy sentences is a congressional determination, not one to be made by federal courts.” ²⁴ We conclude, therefore, that the cost of imprisonment is not a sentencing factor enumerated in § 3553(a), nor is it an additional factor upon which district courts may rely in deciding whether to impose a term of incarceration under 18 U.S.C. § 3582(a).

The District Court accordingly committed procedural error in sentencing Park to a probationary sentence by affirmatively refusing to consider the § 3553(a) factors, and relying instead on an impermissible factor—namely, whether the government could afford Park's incarceration.²⁵

B. “Substantive” Unreasonableness

Turning to the question of substantive reasonableness,²⁶ an appellate court “will ... set aside a district court's substantive determination only in exceptional cases.” ²⁷ Appellate review of whether a sentence is...