Peugh v. United States

Marvin Peugh was convicted of fraud for actions taken in 1999 and 2000. The 1998 Sentencing Guidelines recommended a 37- to 46-month sentence, while the 2009 Sentencing Guidelines recommended a 70- to 87-month sentence for Peugh’s conviction. After receiving a 70-month sentence under the 2009 Guidelines, Peugh asserts that using the 2009 Guidelines retroactively increased his punishment in violation of the Constitution’s Ex Post Facto Clause. The United States counters that the Sentencing Guidelines are merely advisory and that sentencing ultimately rests with a judge’s discretion, deferring to their knowledge of the case and their own penal philosophy. The Seventh Circuit Court of Appeals affirmed Peugh’s sentence; however, eight other courts of appeals would have directed the trial court to consult the 1998 Guidelines. This case is important to ensure consistent sentencing principles, even if particular sentences may vary. The notion that everyone should receive the same sentence for the same crime is a good theory, but other factors often cause a disparity in punishment.

Questions as Framed for the Court by the Parties: 

The U.S. Sentencing Guidelines Manual directs a court to “use the Guidelines Manual in effect on the date that the defendant is sentenced” unless “the court determines that use of the Guidelines Manual in effect on the date that the defendant is sentenced would violate the Ex Post Facto Clause of the United States Constitution.” Eight courts of appeals have held that the Ex Post Facto Clause is violated where retroactive application of the Sentencing Guidelines creates a significant risk of a higher sentence. In the decision below, however, the Seventh Circuit has held that the Ex Post Facto Clause is never violated by retroactive application of the Sentencing Guidelines because the Guidelines are advisory, not mandatory. The question presented is:

Does a sentencing court violate the Ex Post Facto Clause by using the U.S. Sentencing Guidelines in effect at the time of sentencing rather than the Guidelines in effect at the time of the offense, if the newer Guidelines create a significant risk that the defendant will receive a longer sentence?

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Issue

Does using Sentencing Guidelines promulgated after the time of a convicted defendant’s crime in sentencing that defendant violate the Constitution’s ban on retroactive laws?

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Facts

Marvin Peugh and his cousin were co-owners of two farming businesses, Grainery, Inc. and Agri-Tech, Inc. See United States v. Peugh, 675 F.3d 736, 738 (7th Cir. 2012). Because Grainery, Inc. suffered cash flow problems beginning in 1999, Peugh secured a bank loan for $2.5 million. See id. at 738. Peugh and his cousin falsified the existence of future business from Agri-Tech to Grainery to secure the loans, and Grainery’s loan default ultimately caused over $2 million in losses. See id. at 738. Additionally, Peugh and his cousin sought to solve their cash flow problems by writing bad checks between their personal and business accounts to inflate the account balance. See id. at 738. This practice, known as “check kiting,” enabled Peugh to overdraw $471,000 from the account. See id. at 739.

In 2010, a jury convicted Peugh on one count of loan-fraud and four counts of check-kiting. See United States v. Peugh, 675 F.3d at739. Peugh received a 70-month sentence for these offenses, while Peugh’s cousin pled guilty and received a negotiated 12-month sentence. See id. at 740. The United States District Court for the Northern District of Illinois explicitly stated that Peugh’s sentence was determined under the 2009 Sentencing Guidelines rather than the 1998 Sentencing Guidelines. See id. at 741. Using the 1998 Sentencing Guidelines, the total offense level was 21 calculated from a base offense level of 6, a severity enhancement of 13 for causing more than $2.5 million in losses, and an obstructing justice enhancement of 2. See Brief for Petitioner at 10. The 1998 Guidelines recommended that a total offense level of 21 receive a sentence ranging from 37 to 46 months. See id. at 10. Using the 2009 Sentencing Guidelines, the total offense level was 27 calculated from a base offense level of 7, a severity enhancement of 18, and an obstructing justice enhancement of 2. See id. at 11. The 2009 Guidelines recommended that a total offense level of 27 receive a sentence ranging from 70 to 87 months. See id. at 11.

The District Court noted that other factors aside from the Guidelines influenced the sentencing. See Brief for Respondent at 6. Mitigating factors included Peugh’s age, “steady employment,” lack of criminal history, strong family and community support, and that the loss triggering the severity enhancement was barely above the threshold amount. See id. at 6-7. Despite these factors, the District Court stated that a 70-month sentence was appropriate because the fraud was driven by profit, the offense was serious, the need for deterrence was high, the fraud occurred over an extended period of time, a lower sentence would not provide restitution, and that a sentencing judge could have his own penal philosophy. See id. at 7-8.

The United States Court of Appeals for the Seventh Circuit affirmed Peugh’s conviction and 70-month sentence. See United States v. Peugh, 675 F.3d 736, 743 (7th Cir. 2012). The Court of Appeals noted that the District Court’s reliance on the 2009 Guidelines rather than the 1998 Guidelines did not create an ex post facto problem because the Guidelines are only advisory. See id. at 743.

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Discussion

The parties dispute whether the district court should have applied the 1998 or the 2009 Sentencing Guidelines.  Peugh argues that the district court should have applied the 1998 Sentencing Guidelines because applying the 2009 Sentencing Guidelines would retroactively increase the punishment, violating the Ex Post Facto Clause. See Brief for Petitioner at 14. In opposition, the United States asserts that the district court was free to apply the most current Guidelines because the Guidelines merely provide guidance in sentencing. See Brief for Respondent at 13.

The Ex Post Facto Clause

Peugh contends that applying the 2009 Sentencing Guidelines violates the Ex Post Facto Clause because it makes the punishment greater than when acts were committed. See Brief for Petitioner at 17. Peugh observes that generally sentencing guidelines serve as an anchor because district courts must begin the sentencing process by calculating the applicable Guidelines range. See id. at 20. The Illinois Association of Criminal Defense Lawyers (“IACDL”) notes that failure to calculate the applicable Guidelines range correctly is a reversible error. See Brief of Amicus Curiae the Illinois Association of Criminal Defense Lawyers in Support of Petitioner at 3. Furthermore, IACDL states that the Guidelines are especially persuasive in Illinois because that Circuit of the United States Courts of Appeals adopted the presumption that sentences within the Guidelines range are reasonable. See id. at 4-5.

The United States counters that applying the 2009 Sentencing Guidelines does not violate the Ex Post Facto Clause because the Guidelines are not binding. See Brief for Respondent at 13. The United States asserts that the Supreme Court, in United States v. Booker, changed the Guidelines from being mandatory to merely advisory. See id. at 23. Consequently, the United States contends that whether a judge applies the 1998 Sentencing Guidelines or the 2009 Sentences Guidelines does not matter because current law mandates that courts tailor  sentences to the defendant’s and the crimes circumstances and not let a formula bind the court. See id. at 23.

Effect on Punishment

Peugh expresses a pragmatic concern that, although advisory, the Guidelines create a significant risk of increased punishment if the Guidelines increase the applicable sentencing range. See Brief of Petitioner at 20. Peugh asserts that the Guidelines range is very influential because it estimates a defendant’s potential sentence, serves as an anchor from which to base plea bargains, and initiates the district court’s sentencing analysis. See id. at 23, 25, 31. The IACDL emphasizes further that although the Guidelines are not binding, they have a strong “gravitation pull” because it is the only sentencing factor with a numerical value, and that decisions are strongly biased towards a starting value. See Brief of Amicus Curiae the IACDL in Support of Petitioner at 6-7. Thus, Peugh asserts that the particular Sentencing Guidelines used uniformly influences punishment. See Brief of Petitioner at 31.

In response, the United States clarifies that the Guidelines are just one of many factors that courts must consider in determining a proper sentence. See Brief for Respondent at 29. The United States also notes that courts of appeals review all sentences under the same standard, regardless whether or not the sentence falls within the Guidelines range. See id. at 33. The United States contends that any data demonstrating sentences often falls within the Guidelines range could easily suggest the Guidelines promote better sentencing practices. See id. at 39-40. The United States asserts that modifications to the Guidelines represent an improved understanding in sentencing, and that courts find such changes helpful in staying on top of the best practices. See id. at 39-40. Thus, the United States contends that it would be bad policy to prevent a district court from using the best available information. See id. at 40.

Consistency in Punishment

Peugh asserts that the harsher 2009 Guidelines caused the district court to impose a more severe sentence. See Brief for Petitioner at 39. The IACDL notes that because most other courts would have applied the 1998 Guidelines, Peugh received a harsher sentence due in part to his geographical location. See Brief of Amicus Curiae the IACDL in Support of Petitioner at 13. Additionally, the IACDL contends that Peugh received a longer sentence because of the timing of his sentencing. See id. at 15. If the court had sentenced Peugh in 2008, the anchor range for the sentence would have been 37 to 46 months. See id. at 14-15. The IACDL notes that disparity in one’s sentence because of their geography or date of sentencing is bad policy and is at odds with the purpose of the Ex Post Facto Clause. See id. at 16.

The United States counters that the independent nature of criminal sentencing already causes one’s sentence to vary based upon the presiding judge or the dominant penal philosophy of one’s geographical area. See Brief for Respondent at 50. For example, within-Guidelines sentences occur 34.4% of the time in the South District of Ohio, while within-Guidelines sentences occur 80.2% of the time in the South District of Georgia. See id. at 50. Consequently, the United States asserts that the particular Guidelines used will not have a dispositive effect on one’s sentence. See id. at 50.

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Analysis

The dispute in this case centers on the Ex Post Facto Clause of the Constitution, which prohibits retroactive application of new laws. See U.S. Const. art. I, § 9, cl. 3. Specifically, the parties disagree as to whether the Ex Post Facto Clause prevents a court from using the U.S. Sentencing Guidelines Manual in effect at the time of a criminal defendant’s sentencing rather than those in effect at the time of the offense, if doing so might yield a harsher sentence. The Guidelines themselves state that a court should not apply the Guidelines in effect at the time of sentencing if, in its opinion, doing so would violate the Ex Post Facto Clause. See Brief for Petitioner, Marvin Peugh at 8–9; Brief for Respondent, United States at 4. The parties dispute the primary goals behind the Ex post Facto Clause and whether those goals support application of the Clause to the Guidelines. In addition, the parties dispute the effects that the Guidelines have on sentencing judges: Peugh argues that the Guidelines amount to law and so application of the Ex Post Facto Clause is proper, while the United States contends that the Guidelines are not binding on judges and therefore not subject to the ban on retroactivity.

Purpose of the Ex Post Facto Clause

Although there are multiple ways in which a law may violate the Ex Post Facto Clause, Peugh cites the prevention of imposing an increased punishment on a defendant as the “heart” of the Clause. See Brief for Petitioner at 18 (citing Johnson v. United States, 529 U.S. 694, 699 (2000)). Peugh notes that this stems from ideas of fairness, governmental restraint, and the principle that society should punish convicted defendants for conduct that was punishable at the time of the act and not because of changes in the law that came later. See id. at 18. Pointing to this goal, Peugh contends that the test for whether a law violates the Ex Post Facto Clause is whether the law creates a significant risk of an increased sentence for a defendant’s offense. See id. at 19. Peugh argues that applying the Guidelines as they exist at the time of sentencing rather than at the time of the offense does create a risk that a defendant will receive an increased sentence. See id. at 19. Peugh thus concludes that the Ex Post Facto Clause should apply. See id. at 19. Peugh notes that this is not merely a hypothetical, as the application of Guidelines in effect at the time of his sentencing rather than the time of his offense resulted in his receiving a longer sentence. See id. at 39–41.

The United States counters that the Ex Post Facto Clause primarily serves to ensure that individuals have fair notice and that Congress does not impose punishments on defendants that are harsher than those in place when defendants committed their offenses. See Brief for Respondent at 40–41 (citing Lynce v. Mathis, 519 U.S. 433, 441 (1997)). The United States contends that notice under the Ex Post Facto Clause is limited and does not include notice of a change in the Guidelines. See id. at 41. As to the government, the United States notes that Congress does not generally alter the Guidelines; rather, the Guidelines are the product of the United States Sentencing Commission, an independent agency. See id. at 42. The United States maintains that, since neither of those concerns is implicated by the Guidelines, the Ex Post Facto Clause should not apply. See id. at 41.

Effect of the Guidelines on Sentencing Judges

The United States argues that the Ex Post Facto Clause does not apply to the Guidelines because the Guidelines are not binding on sentencing judges. See Brief for Respondent at 14. The United States contends that the Guidelines intend to be advisory only and points out that the Supreme Court has never applied the Ex Post Facto Clause to advisory statements. See id. at 14, 17. Rather, the United States claims that the Supreme Court, in considering cases under the Ex Post Facto Clause, has generally looked at legislative enactments that change the punishments for offenses. See id. at 16. The United States thus distinguishes between advisory statements on the one hand and substantive provisions of law on the other. See id. at 18–19. According to the United States, the Guidelines do not mandate any particular punishment but instead simply provide a menu of some of the options available to the sentencing judge. See id. at 19. In the United States view, judges use the Guidelines but retain discretion over the final sentencing. See id.The United States concedes that the Ex Post Facto Clause could conceivably apply to some matters of discretion but suggests that some decisions simply must be left to a judge’s discretion. See id. at 19–20. Citing parole as another example, the United States argues that these inherently discretionary matters should not be subject to claims of ex post facto application. See id.

Peugh acknowledges that the Guidelines are not strictly binding on sentencing judges but that their practical effect is such that they are essentially law. See Brief for Petitioner at 20. Because of this effect, Peugh contends that the Ex Post Facto Clause should apply to the Guidelines. See id. Peugh notes that sentencing judges, though not required to follow the Guidelines, must nonetheless consider them in their sentencing decisions. See id. at 23. Moreover, Peugh claims that judges who wish to depart significantly from the guidelines must provide good reasons for doing so. See id.Peugh argues that this is only underscored by appellate courts affording more deference to sentencing decisions that conform to the Guidelines. See id. at 25. Peugh explains that this increased deference stems from a presumption that sentences in line with the Guidelines are reasonable, which is the substance of the review on appeal. See id. (citing Rita v. United States, 551 U.S. 338, 347 (2007)). Peugh also posits that sentencing judges are likely to follow the Guidelines believing that they are a well-reasoned and empirically researched authority. See id. at 24. Thus, Peugh concludes that, because the Guidelines are likely to influence judges in their sentencing decisions, they present a significant risk that a court will impose an increased punishment on a defendant. See id. at 26–27.

The United States counters that there is no such increased risk because, even with the Guidelines, judges have discretion in sentencing. See Brief for Respondent at 47. The United States maintains that the requirement that sentencing judges begin by calculating the sentence under the Guidelines merely serves to make sure that judges “have the correct advice.” See id. at 35. According to the United States, this does not mean that judges have any less discretion in sentencing; rather, judges are free to depart from the Guidelines for case-specific reasons as well as general policy reasons, and in no case are they bound to give any amount of deference to the Guidelines. See id. at 32–33, 35. Additionally, the United States disputes that the possibility of appellate review influences judges at all, stating that sentencing decisions, whether conforming to the Guidelines or not, are given the same level of deference on appeal. See id. at 33–34 (citing Gall v. United States, 552 U.S. 38, 41 (2007)). Thus the United States argues that Peugh is incorrect in arguing that sentencing judges must provide good reason for greatly departing from the Guidelines. See id. at 34.

Peugh notes that sentencing judges are not the only ones who may change their behavior in response to the Guidelines. See Brief for Petitioner at 31. According to Peugh, the fact that most sentences conform to the Guidelines might persuade a defendant to accept a plea bargain. See id.Also, knowing what sentences are possible in a court following the Guidelines, a prosecutor might take the Guidelines into account when offering a plea bargain. See id.Peugh argues that the application of different guidelines in his case could have changed his approach in the case, perhaps inducing him to accept a plea bargain rather than plead not guilty. See id.Peugh cites the potential influence of the Guidelines on the plea bargaining process as another way in which they run the risk of imposing an increased sentence on a defendant. See id.

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Conclusion

This case involves whether a sentencing court violates the Constitution’s ban on ex post facto laws by applying sentencing guidelines in effect at the time of the sentencing rather than those in place at the time of the commission of an offense. Peugh claims that the ban intends to protect criminal defendants from receiving punishments larger than those in place at the time of the offense, while the United States views the primary goal as protecting a defendant from an over-reaching legislature, which is not the case here. The United States also argues that the Guidelines do not bind sentencing courts, which retain full discretion over sentencing, and therefore the Guidelines are not subject to these constitutional claims. Peugh counters that, although nominally merely advisory, the Guidelines greatly influence sentencing courts and not applying the Ex Post Facto Clause to the Guidelines risks giving increased sentences to defendants. In deciding this case, the Supreme Court may address whether the Ex Post Facto Clause may apply to advisory statements that, although not binding law, nonetheless have the potential to influence outcomes in court.

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