UNITED STATES of America, Appellee, v. Steven Keith VANDEBRAKE, also known as Steve Keith VandeBrake, Appellant.
No. 11-1390.
United States Court of Appeals, Eighth Circuit.
Submitted: Nov. 17, 2011. Filed: April 27, 2012.
677 F.3d 1030
John Fonte, argued,
Before RILEY, Chief Judge, BEAM and BYE, Circuit Judges.
BYE, Circuit Judge.
Steven VandeBrake pleaded guilty to two counts of price fixing and one count of bid rigging in violation of
I
In 1994, VandeBrake took over his family’s concrete business in Orange City, Iowa. Fourteen years later VandeBrake sold the family business to Grupo Cementos de Chihuahua (GCC), a Mexico-based corporation which operates close to two dozen cement plants in Iowa. GCC formed GCC Alliance Concrete (Alliance), and VandeBrake thereafter worked as a sales manager for the new company. In March 2009, the
The
Shortly after VandeBrake entered guilty pleas to all three counts before a magistrate judge, the district court entered an order announcing it would not accept the binding plea agreement. The district court scheduled a hearing under
Ultimately, however, the district court did not reject the binding plea agreement, but gave VandeBrake thе option of going forward with the sentencing hearing, after which the district court would decide whether to accept or reject the binding plea agreement. See
Prior to sentencing, the district court ordered a PSR prepared. The PSR discussed, among other things, the length and scope of the concrete bid-rigging and price-fixing conspiracies. The first bid-rigging conspiracy took place between Alliance and one of its competitors from June 2008 through March 2009. The second bid-rigging conspiracy took place between Alliance and a second competitor from January 2008 through August 2009. The price-fixing conspiracy took place between Alliance and a third competitor from January 2006 through August 2009. The PSR calculated the volume of commerce affected by each conspiracy to be $591,000, $895,000, and $4,045,439.61, respectively, for a total of $5,531,439.61.3 Using the antitrust guideline set forth in
The district court conducted a three-day sentencing hearing for VandeBrake and one of his codefendants. Following the sentencing hearing, the district court issued a detailed memorandum indicating it was varying upward from the advisory guidelines range by imposing a sentence of forty-eight months. The two primary reasons given by the district court for the variance were a policy disagreement with the antitrust guidelines and VandeBrake’s lack of remorse for his crimes. The district court’s policy disagreement focused on the Sentencing Commission’s choice to increase the offense levels for antitrust violations less rapidly than the offense levels for fraud violations despite the comparable societal harm targeted by both the fraud and antitrust guidelines. The district court also indicated why it believed the Commission’s explanation for the disparity did not apply in VandeBrake’s situation.
The court further concludes that because of a flaw in
It is estimated that the average gain from price-fixing is 10 percent of the selling price. The loss from price-fixing exceeds the gain because, among other things, injury is inflicted upon consumers who are unable or for other reasons do not buy the product at the higher prices.
The district court also justified its variance when taking into account “the history and characteristics of the defendant” pursuant to
What the court finds most disquieting about VandeBrake’s history and characteristics is that VandeBrake was already wealthy when he embarked on and engaged in the charged conspiracies. VandeBrake can make no claim to be a latter-day Jean Valjean, the unemployed protagonist in Victor Hugo’s Les Miserables who was imprisoned for stealing a loaf of bread to feed his widowed sister’s seven children. As this court recently recognized, “[a] crime оf fraud by one who already has more than enough-and who cannot argue that he suffered a deprived or abusive childhood or the compulsion of an expensive addiction-is simply a crime of greed.” United States v. Miell, 744 F.Supp.2d 904, 955 (N.D.Iowa 2010). Nearly as disturbing is the fact that VandeBrake fails to believe that he was motivated by greed. Instead, VandeBrake continues to justify and rationalize his conduct. He excuses his criminal conduct by reasoning that he gave [Alliance’s] customers a “great product for a good price.” Sentencing Tr., Vol. 1 at 251. VandeB-
Finally, the district court gave a detailed explanation of the fine amount it chose, considering all the factors listed at
VandeBrake is an extremely wealthy individual, with a net worth over $10,000,000. VandeBrake’s wealth and assets are particularly pertinent to consider in determining the proper amount of his fine because a $829,715.85 fine, while in the abstract is a large sum of money, is quite modest when compared to VandeBrake’s overall wealth. Only by imposing a fine of such a large amount does the fine become sufficiently proportionate to VandeBrake’s wealth to properly reflect the gravity of his offenses. Given VandeBrake’s wealth, the court finds that a $829,715.85 fine is appropriate in order to ensure that it is “sufficient to ensure that the fine, taken together with other sanctions imposed, is punitive.”
U.S.S.G. § 5E1.2(d)(2) ; see United States v. Koestner, 628 F.3d
VandeBrake filed a timely appeal. On appeal, he contends the district court abused its discretion by not accеpting the binding plea agreement. He also contends the sentence of forty-eight months and fine of $829,715.85 are substantively unreasonable.
II
VandeBrake contends the district court abused its discretion by not accepting the
We first note the district court did not actually reject the binding plea agreement. The district court has three choices when presented with a binding plea agreement proposed by the parties. It may accept the binding plea agreement, reject it, or defer a decision until after reviewing the presentence report.
“[A] guilty plea represents a break in the chain of events which has preceded it in the criminal process.” Tollett v. Henderson, 411 U.S. 258, 267, 93 S.Ct. 1602, 36 L.Ed.2d 235 (1973). “It is established that an unconditional plea of guilty waives all prior infirmities which neither affect the court’s jurisdiction nor the substantive sufficiency of the indictment.” United States v. Barker, 594 F.2d 709, 710 (8th Cir.1979). The only
The district court gave two primary reasons for varying upward from the guidelines range: (1) a policy disagreement with the antitrust guidelines, and (2) VandeBrake’s lack of remorse. Both were permissible reasons for varying from the guidelines. See United States v. Battiest, 553 F.3d 1132, 1137 (8th Cir.2009) (noting a policy disagreement may provide a basis for a district court’s variance from the advisory guidelines range) (citing Kimbrough v. United States, 552 U.S. 85, 110-11, 128 S.Ct. 558, 169 L.Ed.2d 481 (2007)); United States v. Hildebrand, 152 F.3d 756, 766 (8th Cir.1998), abrogated on other grounds by Whitfield v. United States, 543 U.S. 209, 212, 125 S.Ct. 687, 160 L.Ed.2d 611 (2005) (recognizing a district court is entitled to consider a defendant’s lack of remorse, among other things, “[i]n selecting a point within the appropriate guideline range, or in deciding whether a departure is warranted”); see also United States v. Chase, 560 F.3d 828, 832 (8th Cir.2009) (explaining that factors which may justify a departure can also be used to justify a variance).
VandeBrake’s primary complaint regarding the substantive unreasonableness of his sentence is that its length equals the longest sentence ever imposed in an antitrust case. He argues the volume of commerce and duration of the conspiracies involved in his case pale in comparison to the only other forty-eight month sentence imposed in an antitrust case. The length of VandeBrake’s sentence, however, results in large part from the district court’s policy disagreement with the antitrust guidelines. The district court believed the antitrust guidelines are too lenient, and consequently gave VandeBrake a more severe sentence than the within-the-guidelines’ sentence VandeBrake cites for comparison purposes. Because the district court varied from the guidelines, VandeBrake’s sentence will necessarily differ when compared to a within-the-guidelines’ sentence. That mere fact does not ipso facto make the sentence substantively unreasonable. See, e.g., Kimbrough, 552 U.S. at 107-08 (rejecting the government’s argument that nonmandatory guidelines would result in defendants with similar conduct receiving “markedly different sentences, depending on nothing more than the particular judge drawn for sentenсing” by stating “our opinion in Booker recognized that some departures from uniformity were a necessary cost of the remedy we adopted”).
VandeBrake also claims the district court gave invalid reasons for its policy disagreement with the guidelines. We disagree. The district court gave cogent reasons for its policy disagreement by comparing the antitrust guidelines to the fraud guidelines which attack a similar societal harm. The district court also tied its policy disagreement to the specific facts involved in VandeBrake’s case, noting VandeBrake’s prices for concrete did
We respectfully disagree with the dissent’s view that the district court’s policy disagreement with antitrust guideline
The dissent’s approach conflicts not only with Kimbrough itself, but with other circuits that have addressed Kimbrough’s suggestion for “closer review” of some district court sentencing decisions. Those circuits have focused on whether the Commission developed a particular guideline “based on research and study rather than reacting to changes adopted or directed by Congress.” United States v. Grober, 624 F.3d 592, 601 (3d Cir.2010); see also United States v. Henderson, 649 F.3d 955, 960, 962 (9th Cir.2011) (concluding “district judges must enjoy the same liberty to depart from [the child pornography Guidelines] based on reasonable policy disagreement as they do from the crack-cocaine Guidelines discussed in Kimbrough” because “[m]ost of the revisions [to
Likewise, here the district court not only explained at great length why it was concerned about
We also respectfully disagree with the dissent’s view that Kimbrough’s “closer review” language necessarily equates to de novo review, as opposed to still falling somewhere within our well-accepted post-Booker review for substantive reasonableness. The facts and circumstances involved in this case well exemplify that point. Contrary to the dissent’s view, the district court committed no procedural error when it sentenced VandeBrake. The district court properly calculated the advisory guidelines sentencing range at step one of the sentencing process, and limited consideration of its policy disagreement with the antitrust guidelines to step three of the sentencing process. See, e.g., United States v. Shannon, 414 F.3d 921, 923-24 (8th Cir.2005) (discussing the three-step sentencing process followed by district courts in the post-Booker sentencing regime).7 Importantly, the
In such a situation, when reviewing one final, indivisible sentencing decision which reflects a mix of the comparative institutional abilities of both the trial court and the Commission, we would follow the lead of at least one member of the Supreme Court who would still categorize Kimbrough’s closer review as falling within the “framework for evaluating ‘reasonableness.’” Pepper v. United States, 562 U.S. 476, 516, 131 S.Ct. 1229, 1254, 179 L.Ed.2d 196 (2011) (Breyer, J., concurring). Under such a framework, while appellate courts would review those aspects of a sentencing decision “more closely when they rest upon disagreement with Guidelines policy,” and “with greater deference when they rest upon case-specific circumstances[,]” our overall review would still be under the rubric of “reasonableness.” Id. at 1255.
In this case, the district court’s policy disagreement was based in large part upon case-specific circumstancеs, and the end result was an antitrust sentence more comparable to a fraud sentence based upon a similar amount of loss. As such, the district court’s final sentence seems eminently consistent with the very rationale used by the dissent to attack it. See Post at 1046 (“Since [t]he Commission ha[d] long recognized the similarity of antitrust offenses to sophisticated frauds,’ the Commission amended
In sum, we find no basis for concluding the final sentence is substantively unreasonable. The district court considered appropriate factors in varying from the guidelines, and adequately explained its sentence. See, e.g., United States v. Hill, 552 F.3d 686, 690-92 (8th Cir.2009) (affirming a sentence of fifty-one months (thirty months above the advisory guidelines range) where the district court adequately explained its sentence, noting the sentencing judge is in a “superior position” to evaluate the facts of any given case and judge their significance against the
III
We affirm the judgment of the district court.
BYE
CIRCUIT JUDGE
RILEY, Chief Judge, concurring.
I conсur in the general reasoning and the conclusion of Judge Bye’s opinion. I write separately to disassociate myself from the district court’s comments about economic success and status, race, heritage, and religion. I consider those comments inappropriate and not a proper reason for supporting any sentence.
Early in its lengthy sentencing colloquy the district court, quoting Judge Learned Hand, states, “‘[A] judge . . . is charged to see that the law is properly administered and it is a duty which he cannot discharge by remaining inert.’” United States v. VandeBrake, 771 F.Supp.2d 961, 966 (N.D.Iowa 2011) (quoting United States v. Marzano, 149 F.2d 923, 925 (2d Cir.1945)). There is, though, something to be said for some measure of inertness in the course of a criminal sentencing procedure fueled at the outset by a judicial observation that the defendant suffered from “insatiable greed, which is all the more shocking because [the defendant was] already [a] wealthy, multi-millionaire businessm[a]n.” Id. at 965. Of course, even a multi-millionaire businessman has the right to be sentenced under the rule of law, especially rules recently put in place by the Supreme Court. Rich persons, poor persons and persons at all other economic strata should expect no less. Indeed, a United States Judge upon assuming office takes an oath that states, in part: “I will administer justice without respect to persons, and do equаl right to the poor and to the rich.”
As noted by the court majority, VandeBrake was charged with three price fixing and bid rigging offenses in violation of
Apparently in an attempt to avoid a claim of procedural error,8 the district court purported to calculate a guidelines sentencing range using
How could this guideline substitution have happened given Congress’s and the Sentencing Commission’s concerns about substantial uniformity in preliminary sentence calculations for identical criminal conduct-into which initial calculations judges would then insert variable, relevant circumstances and characteristics of individual offenders and, in this way, construct equitable and reasonable individualized penal judgments? It happened, apparently, because the sentencing court interpreted the Sentencing Commission’s antitrust guideline formulations as being inadequate for use in sentencing antitrust offenders in general,10 see VandeBrake, 771 F.Supp.2d at 1003, and in particular, at least whеn a defendant, as the court measures it, is a rich and greedy businessman, see id. at 965.
Where does a sentencing court find such unfettered authority, especially when failure to employ a Commission-designated guideline at the outset will surely result in widely varying sentences for substantially similar wrongdoers? To this inquiry, the sentencing court and court majority reply: Kimbrough v. United States, 552 U.S. 85, 128 S.Ct. 558, 169 L.Ed.2d 481 (2007), Spears v. United States, 555 U.S. 261, 129 S.Ct. 840, 172 L.Ed.2d 596 (2009), and United States v. Feemster, 572 F.3d 455 (8th Cir.2009) (en banc).
But, no such authority can be gleaned from these cases.
The basic holding of Kimbrough (which dealt exclusively with the guidelines’ 100:1 powder/crack ratio) is that a district court has deferential discretionary authority to substantially vary from a correctly calcu-
To support my contention, I briefly review the procedural requirements at work in this sentencing dispute. Even though, since United States v. Booker, 543 U.S. 220, 245, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), all sentencing guidelines are advisory in nature, they nonetheless continue to serve an important and mandatory function in the creation of a federal criminal sentеnce. Kimbrough, 552 U.S. at 108. Using the guideline or guidelines designated by the Sentencing Commission for use with the particular offense or offenses of conviction, the sentencing court is initially charged with calculating a guideline sentencing range for the defendant. In fact, it is a “significant procedural error” for the sentencing judge to fail to fulfill this “first” requirement. Gall v. United States, 552 U.S. 38, 51 (2007). And, we review a district court’s “interpretation and application of the guidelines de novo.” United States v. Bryant, 606 F.3d 912, 918 (8th Cir.2010).12
Accordingly, the district court’s interpretations of the intrinsic breadth or limitations of
Concluding, for purposes of further discussion only, that the sentence calculation in this case is procedurally sound and survives de novo review, the sentencing court’s bald assumption that it has deferential discretion to substantially vary from all guidelines on policy grounds is reversible error.
Under Kimbrough analysis, you must first determine whether the applicable guideline is the product of the Sentencing Commission’s inherent expertise. Kimbrough’s result only depicts judicial analysis of a guideline that was not the product of the Commission’s institutional strengths. The guideline at issue here, on the other hand, embodies the Commission’s expertise. Thus, Kimbrough does not support the notion that the sentencing court’s policy disagreement with
As a general mаtter, the Sentencing Commission employed an “empirical approach” to formulate its several guidelines. Kimbrough, 552 U.S. at 96. Under this approach, the Commission first conducted “an empirical examination of 10,000 presentence reports setting forth what judges had done in the past.” Rita v. United States, 551 U.S. 338, 349, 127 S.Ct. 2456, 168 L.Ed.2d 203 (2007). Then, the Commission “modifi[ed] and adjust[ed] past practice in the interests of greater rationality, avoiding inconsistency, complying with congressional instructions, and the like.” Id. Since the initial crafting of the guidelines, the Commission has been charged with “formulat[ing] and constantly refin[ing] national sentencing standards.” Kimbrough, 552 U.S. at 108. The Commission’s institutional strength, then, is its ability to “base its determinations on empirical data and national experience, guided by a professional staff with appropriate expertise.” Id. at 109 (quotation omitted).
As stated above, Kimbrough provides an example of a guideline that was not a product of the Commission’s expertise. There, the Court found that the guidelines’ 100:1 powder/crack ratio was not based on the Commission’s empirical research; rather, the ratio was simply borrowed from the ratio Congress used to set minimum and maximum sentences in the Anti-Drug Abuse Act of 1986.13 Id. at 95-96. And, in turn, the Act’s ratio was based on Congress’s mere assumptions regarding the relative dangerousness of crack. Id. at 95. After adopting the 100:1 ratio in the original guidelines, the Commission’s research revealed that many of the assumptions used to justify the 100:1 ratio were baseless. Id. at 97-98. The Commission therefore attempted to amend the guidelines to reduce the ratio to 1:1, but Congress blocked this attempt pursuant to
In contrast to the 100:1 ratio at issue in Kimbrough, the antitrust guideline at issue here,
the Commission might conclude that a category of major white collar criminals too frequently was sentenced to probation or too short a term of imprisonment because judges using the old rehabilitation theory of sentencing[] did not believe such offenders needed to be rehabilitated and, therefore, saw no need for incarceration. The Commission might conclude that such a category of offenders should serve a term of imprisonment, or a longer term than currently served, for purposes of punishment and deterrence.
S.Rep. No. 98-225, at 177 (1983), reprinted in 1984 U.S.C.C.A.N. 3182, 3360. Following Congress’s cue, the Commission’s first version of the guidelines increased the mean sentences of white-collar crimes above then-current averages to reduce the disparity between white-collar crimes and other property crimes, such as larceny.
As with other white-collar crimes, the Commission deliberately raised the sentences for antitrust violations above pre-guidelines averages. The background notes accompanying
While the Commission increased offense levels for fraud based on “loss” in
The offense levels [in
§ 2R1.1 ] are not based directly on the damage caused or profit made by the defendant because damages are difficult and time consuming to establish. The volume of commerce is an acceptable and more readily measurable substitute. The limited empirical dаta [as to pre-guidelines practice] show that fines increase with the volume of commerce and the term of imprisonment probably does as well.
The first significant14 amendment to
The base offense level for antitrust violations starts higher than the base offense level for fraud violations to reflect the serious nature of and the difficulty
of detecting such violations, but the offense levels for antitrust offenses based on volume of commerce increase less rapidly than the offense levels for fraud, in part, because, on the average, the level of mark-up from an antitrust violation may tend to decline with the volume of commerce involved.
Id.
In 2005, the Commission again amended
The history of and the amendments to
Cases and commentators have struggled a bit, as do I, with the reach of Kimbrough’s “closer review may be in order” language.16 For some help, I turn to the Kimbrough opinion’s reference to oral argument in Gall, a case argued before the Supreme Court on the same day as Kimbrough. Id. at 109 (citing Tr. of Oral Arg. at 38-39, Gall v. United States, 552 U.S. 38 (2007)). From this reference, it is clear that the Court differentiated between judicial discretion arising from case-specific individualized features within the better discernment of the sentencing court and “I don’t agree with the policy of the guideline” emanations from the same source. Tr. of Oral Arg. at 39, Gall v. United States, 552 U.S. 38 (2007).
Reading the Supreme Court’s “closer review may be in order” language in context, and mainly applying the first of the two primary meanings of the word “may,”17 it is clear that the Supreme Court presents this court with permission and discretion to impose “closer review” upon the district court’s idea that the policy espoused by the Sentencing Commission in
Today, the court majority does not apply “closer review” or explore its contours in any detail. Instead, the court applies only the deferential standard of review articulated in Feemster and finds that the district court’s “policy disagreement with the antitrust guidelines . . . [was a] permissible reason[] for varying from the guidelines.” Ante at 1037. As Judge Colloton’s concurring opinion in Feemster noted, however, the deferential standard of review articulated in Feemster did not address the “closer review” question left open in Kimbrough, which is at the heart of this case. Feemster, 572 F.3d at 468 n. 12 (Colloton, J., concurring). Accordingly, I would vacate this sentence and remand it for further consideration using only
Because of the sentencing court’s assault on the Sentencing Commission in this case, and by way of epilogue to this dissent, I have used the Commission’s annual sourсe books to gather some statistics and create some tables, two of which I append to this dissenting opinion as examples. Since VandeBrake had a criminal history category of I and should have been sentenced
My research reveals that there were only a few hundred offenders sentenced for committing antitrust violations between FYs 1996 and 2011. The statistics also demonstrate that, over a period of 15 years, VandeBrake was the only antitrust offender sentenced above the guidelines range.18 Indeed, out of some 230 offenders sentenced under
While we may no longer employ a “rigid mathematic formula that uses the percentage of a departure as the standard for determining the strength of the justifications required for a specific sentence,” Gall, 552 U.S. at 47, the Supreme Court “find[s] it uncontroversial that a major departure should be supported by a more significant justification than a minor one.” Id. at 50. Although district courts’ sentencing decisions are typically entitled to substantial deference, “[t]here is a difference between recognizing that another usually has the right of way and abandoning one’s post.” United States v. Kane, 639 F.3d 1121, 1136 (8th Cir.2011) (quotation omitted), cert. denied, 566 U.S. 936, 132 S.Ct. 1590, 182 L.Ed.2d 221 (2012).
Here, VandeBrake’s 48-month sentence reflects a significant variance above his 21-to 27-month guidelines range under
The district court also explained that, if it did not vary upward, it would still issue a 48-month sentence by issuing consecutive sentences. Id. at 1013. It appears that the district court took this action to “bulletproof” its sentence. After all, we have held that “the district court has broad statutory authority, pursuant to
As earlier noted, the district court committed procedural error and made guideline interpretations which the court majority has not subjected to de novo review.
APPENDIX
TABLE 1: PRISON SENTENCES FOR ANTITRUST OFFENDERS IN CRIMINAL HISTORY CATEGORY I BETWEEN FYS 2006 AND 2010
| Fiscal Year | Number of Offenders Sentenced to Imprisonment | Mean Months | Median Months |
|---|---|---|---|
| 2006 | 8 | 5.8 | 5 |
| 2007 | 11 | 19.2 | 9 |
| 2008 | 3 | 10.8 | 6 |
| 2009 | 12 | 18.2 | 14.5 |
| 2010 | 8 | 8.6 | 6.5 |
Source:
TABLE 2: ANTITRUST PRIMARY OFFENSE SENTENCING TRENDS (POST-BOOKER)
| Fiscal Year | Number of Offenders Sentenced | Sentences Within Guidelines Range | Upward Departure OR Variance | Downward Departure OR Variance |
|---|---|---|---|---|
| 2005 (Post-Booker) | 11 | 4 | 0 | 7 |
| 2006 | 12 | 0 | 0 | 12 |
| 2007 | 15 | 2 | 0 | 13 |
| 2008 | 24 | 4 | 0 | 20 |
| 2009 | 20 | 0 | 0 | 20 |
| 2010 | 16 | 3 | 0 | 13 |
| 2011 (preliminary data) | 10 | 1 | 121 | 8 |
| Total | 108 | 14 | 1 | 93 |
Source: