Sentencing Organizations after Booker
Johnson, Timothy A., The Yale Law Journal
INTRODUCTION I. BOOKER BASICS II. THE ORGANIZATIONAL SENTENCING GUIDELINES A. Convicting Organizations of Crimes B. The Statutory Background of the Organizational Guidelines C. How Courts Use the Guidelines To Sentence Organizations D. Organizational Sentencing Statistics III. AN ORGANIZATION'S RIGHT TO A CRIMINAL JURY TRIAL A. Do Organizations Possess Constitutional Rights? B. Does the Sixth Amendment Entitle Organizations to a Criminal Jury Trial? 1. All Defendants Are Entitled to a Jury When Charged with a Serious Crime 2. When a Charge Against an Organization Is Serious C. Possible Solutions to the Dilemma of Organizational Jury Rights 1. The Case-by-Case Approach 2. The Bright-Line Approach IV. BOOKER AND THE FUTURE OF THE ORGANIZATIONAL GUIDELINES A. Can the Organizational Guidelines Be Mandatory After Booker? B. Should the Organizational Guidelines Be Mandatory After Booker? CONCLUSION
Roughly two hundred organizations are criminally sentenced in federal court each year. (1) Although the average sentence requires payment of several million dollars (roughly $4.5 million in 2005 (2)), judges may order organizations to pay hundreds of millions of dollars in fines and restitution. (3) Judges have typically crafted these multi-million dollar sentences based on provisions of the U.S. Sentencing Guidelines pertaining to organizations (the "organizational guidelines"), (4) but the Supreme Court's most important sentencing decision in recent years has cast doubt on this process. In United States v. Booker, the Supreme Court held unconstitutional the requirement that judges treat the U.S. Sentencing Guidelines as mandatory when sentencing individuals. (5) The Court did not explicitly address the sentencing of organizations; however, a careful reading of the opinion leads to two conclusions about organizational sentencing.
First, Booker's broad holding rendered the organizational guidelines, like the guidelines applicable to individuals (the "individual guidelines"), nonmandatory. The provision that made the guidelines mandatory, 18 U.S.C. [section] 3553, does not distinguish between the organizational guidelines and the individual guidelines, (6) and the Booker Court invalidated this provision, holding that the combination of judicial fact-finding and mandatory sentencing guidelines violated individual defendants' Sixth Amendment rights. (7) Booker's statutory remedy thereby rendered all of the guidelines nonmandatory.
Second, in addition to sweeping the organizational guidelines under its statutory remedy, Booker's constitutional reasoning applies to the organizational guidelines. This conclusion is not immediately obvious. After Booker, sentencing guidelines are unconstitutional if they direct a judge to find facts that increase the maximum guideline sentence that can be imposed on the defendant, thereby robbing him of his right to have those facts found by a jury. (8) Thus, if a defendant does not have the right to a jury trial, a judge can presumably sentence him based on mandatory guidelines without running afoul of the Sixth Amendment. Because of this wrinkle, one might expect that organizations can still be sentenced under mandatory guidelines-after all, it is not self-evident that organizations have jury rights.
Nevertheless, based on decisions from lower federal courts, organizations sentenced under the organizational guidelines-with the possible exception of large organizations facing relatively modest fines--are entitled to a jury trial. (9) Because Booker's Sixth Amendment reasoning therefore will apply to the organizational guidelines in most cases, Congress cannot restore the guidelines to mandatory status by a quick statutory fix. Moreover, even if Congress could constitutionally reinstate the guidelines' mandatory status for those organizations that are not entitled to a jury trial, it would be unwise to do so as a policy matter: mandatory guidelines are unable to account for the wide variety of circumstances surrounding organizational crime and have proven unnecessary to fulfill the goals for which the guidelines were created. (10)
This Note proceeds in four parts. Part I introduces Booker and explains that Booker rendered the organizational guidelines nonmandatory. Part II discusses the organizational guidelines, including their origin and their operation. Part III considers the various approaches that courts have taken to determine the jury rights of organizations and finds that under current law, organizations are entitled to criminal jury trials in some but not all instances. Part IV concludes that after Booker the organizational guidelines neither can nor should be mandatory.
I. BOOKER BASICS
Booker was the culmination of a series of Supreme Court cases on sentencing and jury rights, the most important of which were Apprendi v. New Jersey (11) and Blakely v. Washington. (12) In Apprendi, the criminal defendant challenged a hate crime statute that allowed a judge to increase the defendant's sentence above the statutory maximum based on the judge's own fact-finding. (13) The Supreme Court struck down the statute, holding that it violated the defendant's Sixth Amendment right to a jury trial and his Fourteenth Amendment right to due process. (14) The Sixth and Fourteenth Amendments, the Court reasoned, required that "[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt." (15) Because the hate crime statute violated this rule (later known as the "Apprendi rule"), it was unconstitutional.
Several years later, in Blakely, the Court used the Apprendi rule to strike down a system of state sentencing guidelines. Blakely had been sentenced under Washington's sentencing guidelines, which established a narrower range of sentences a judge could impose for each crime and also set forth aggravating factors that a judge, based on her own findings, could use to increase sentences. (16) The Court held that these judge-found aggravating factors violated the Apprendi rule and thus the Sixth Amendment. (17) In reaching this result, the Court ruled that "the 'statutory maximum' for Apprendi purposes is the maximum sentence a judge may impose solely on the basis of the facts reflected in the jury verdict or admitted by the defendant." (18) Because the U.S. Sentencing Guidelines, like the Washington guidelines, used judge-found facts to increase sentences above those that could be imposed based on jury-found facts alone, Blakely hinted that the U.S. Sentencing Guidelines might also violate the Sixth Amendment.
What Blakely hinted, Booker confirmed. In Booker, the Court concluded that judges' use of the mandatory U.S. Sentencing Guidelines violated defendants' Sixth Amendment rights. (19) After Apprendi and Blakely, the prosecution bore the burden of proving to a jury any fact (other than a prior conviction) that would increase the defendant's sentence beyond the statutory maximum. (20) Because the sentencing guidelines generally instructed judges to find facts themselves and to use those facts to impose higher sentences than could be imposed based on jury-found facts alone, (21) the Booker Court declared unconstitutional the combination of judicial fact-finding and mandatory sentencing guidelines. (22)
To remedy the guidelines' constitutional woes, the Court excised two statutory provisions: 18 U.S.C. [section] 3553(b)(1) and 18 U.S.C. [section] 3742(e). (23) The latter provision set forth standards for review of sentences on appeal; (24) the former required judges to follow the guidelines' sentencing recommendation absent a special justification for departure. (25) Thus, the excision of [section] 3553(b)(1) means that judges are no longer bound to implement the guidelines. (26)
Because Booker involved the sentencing of an individual defendant, the question remains whether the Court's remedy extends to the organizational guidelines. The answer is plainly yes. Although the organizational guidelines were created separately and operate differently than the individual guidelines, (27) 3553(b)(1) does not distinguish between the two. It refers only to "the sentencing guidelines." (28) Thus, when Booker declared [section] 3553(b)(1) invalid, all of the sentencing guidelines became nonmandatory. Furthermore, Justice Breyer emphasized that this result was not merely an accident of the statute, but also reflected the Court's refusal to leave in place a dual system of guidelines:
[W]e do not see how it is possible to leave the Guidelines as binding in other cases.... [W]e believe that Congress would not have authorized a mandatory system in some cases and a nonmandatory system in others, given the administrative complexities that such a system would create. Such a two-system proposal seems unlikely to further Congress' basic objective of promoting uniformity in sentencing. (29)
This language eliminates any remaining uncertainty about Booker's applicability to the organizational guidelines.
Since Booker, courts seem simply to have taken this result for granted, treating organizational sentencing no differently than individual sentencing. (30) To date, only one federal court has expressly considered how Booker affected the organizational guidelines. In United States v. Yang, the Sixth Circuit first considered whether the corporation had a right to a jury trial, and it concluded that the $2 million fine at issue indicated that the charged crime was sufficiently "serious" to entitle the corporation to a jury trial. (31) The court then applied Booker to hold that the corporation had been denied a constitutional right when it was sentenced based on judge-found facts in combination with mandatory organizational guidelines. (32)
Of course, the statutory remedy in Booker made Yang's analysis unnecessary; the guidelines were not mandatory regardless of whether the defendant was entitled to a jury trial. Nonetheless, the Yang analysis remains relevant to the larger assessment of post-Booker organizational sentencing. Although [section] 3553(b)(1) is excised for the time being, Congress could attempt to resurrect some version of it in the future, (33) in which case courts would be obliged to assess whether mandatory organizational guidelines violate defendant organizations' constitutional right to a jury trial. This Note aims to make that determination and to illustrate why the organizational guidelines should remain nonmandatory.
II. THE ORGANIZATIONAL SENTENCING GUIDELINES
Criminal prosecution and sentencing of organizations have changed greatly in the last century. One hundred years ago, it was unclear whether an organization could even be convicted of a crime. Until roughly twenty years ago, organizations were sentenced under the same standards as individuals. Then, fifteen years ago, the organizational guidelines became the benchmark for sentencing organizations. This Part traces these developments and describes how the U.S. Sentencing Guidelines have changed organizational sentencing.
A. Convicting Organizations of Crimes
Today, corporations and other organizations can be convicted of crimes based on their agents' conduct, but they have not always been so liable. Under the English common law, corporations could not be convicted of crimes, (34) and the same held true during the first hundred years of the United States' existence. (35) The primary rationale for exempting the corporation from criminal liability was its artificiality. As William Blackstone wrote, "[Its] existence being ideal, no man can apprehend or arrest it." (36) It was thought that a corporation had "no soul to be damned, and no body to be kicked." (37) As corporations began to grow in importance during the late nineteenth century, however, the law increasingly regarded them as real rather than artificial entities, and the government took a greater interest in regulating them.
The Supreme Court first upheld Congress's imposition of criminal penalties on corporations in New York Central & Hudson River Railroad v. United States (38) by extending the tort doctrine of respondeat superior--the theory that "the corporation may be held responsible for damages for the acts of its agent within the scope of his employment." (39) In the decades since, federal courts have refined New York Central's standard of corporate vicarious liability into its current form and expanded it to apply to all organizations. Today, an organization may be held liable for crimes that its agent commits within the scope of his authority (or apparent authority) and with the intent to benefit the organization. (40) The "benefit" threshold is quite low: an agent intends to "benefit" his organization as long as he is at least partially motivated by the interests of the organization, even if his conduct harms the organization or contravenes its policies or explicit instruction. (41) Accordingly, an organization is legally responsible for many of its agents' crimes, even if the government declines to press charges against it. (42)
B. The Statutory Background of the Organizational Guidelines
The history of the organizational guidelines begins in 1984 with the passage of the Sentencing Reform Act. (43) The Reform Act had two independent effects on organizational sentencing. First, it created the United States Sentencing Commission, (44) which promulgated guidelines to direct federal sentencing and produced the organizational guidelines seven years after its creation. (45) Second, it created a new statutory system of organizational fines, increasing all criminal fines for organizations and distinguishing between individual and organizational penalties to a degree uncommon in earlier law. (46)
This new regime of organizational fines …
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Publication information: Article title: Sentencing Organizations after Booker. Contributors: Johnson, Timothy A. - Author. Journal title: The Yale Law Journal. Volume: 116. Issue: 3 Publication date: December 2006. Page number: 632+. © 2009 Yale University, School of Law. COPYRIGHT 2006 Gale Group.
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