The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
Defendant Patrick Savin ("Savin") moves for a "cumulative effects"
downward departure under United States Sentencing Guidelines ("U.S.S.G."
or the "Guidelines") § 5K2.0 and 18 U.S.C. § 3553 (b)(1), and pursuant to
recent Second Circuit opinions. For the reasons set forth below, the
motion is granted, and the Court will downwardly depart four levels.
On March 13, 2002, Savin pleaded guilty to one count of wire fraud in
violation of 18 U.S.C. § 1343 and one count of perjury in violation of
18 U.S.C. § 1623. The details of the offense are laid out in United
States v. Savin, 00 Cr. 45, 2002 WL 31520472 (S.D.N.Y. Oct. 22, 2002),
familiarity with which is presumed.
On October 21, 2002, Savin was sentenced to thirty-three months'
imprisonment followed by three years supervised release. The sentence was
based on the finding by this Court that the four-level Sentencing
Guidelines enhancement under U.S.S.G. § 2 F1. 1(b)(6)(b) for an offense
that "affected a financial institution" and from which "the defendant
derived more than $1,000,000 in gross receipts" was not applicable to
Savin's sentence. See id. at *4. It was held that § 2 Fl.1(b)(6)(b) did not apply because Mezzonen, S.A. ("Mezzonen"), the institution which
Savin defrauded, was not a "financial institution" under the law of
Luxembourg, where Mezzonen is organized and has its principal place of
business. See id. The government appealed the decision, and the Second
Circuit reversed, holding that a "foreign investment company," as that
term is defined in Application Note 14 to U.S.S.G. § 2 F1.1,
includes a company located outside the United States
substantially engaged in the business of investing in
securities of other companies, whether or not it is an
entity that is an "investment company" under the law
of the jurisdiction where it is registered and where
it has its principal place of business.
United States v. Savin, 349 F.3d 27
, 39 (2d Cir. 2003). The case was
remanded to this Court "for resentencing in the course of which it will
be required to determine whether Mezzonen was a foreign investment
company' or `similar entity.'" Id.
Following the Second Circuit's decision, counsel for Savin "reluctantly
concluded that the breadth of that decision prevents us from arguing that
the four-level Sentencing Guidelines `financial institution' enhancement
does not apply at resentencing." Letter to Court from Edward J.M. Little,
dated April 22, 2004 ("4/22/04 Letter"), at 1. However, Savin argues that
he qualifies for the "cumulative effects" downward departure announced by the Second Circuit in a series of three decisions: United
States v. Lauersen, 348 F.3d 329 (2d Cir. 2003), United States v.
Jackson, 346 F.3d 22 (2d Cir. 2003), and on rehearing of both cases,
United States v. Lauersen and Jackson, 362 F.3d 160 (2d Cir. 2004),
cert. denied, 2004 WL 817165 (U.S. May 17, 2004) (hereinafter
"Lauersen/Jackson"). In these decisions, the Second Circuit explained
that a sentencing court in its discretion may downwardly depart, pursuant
to 18 U.S.C. § 3553(b)(1) and U.S.S.G. § 5K2.0, "when the addition of
substantially overlapping enhancements results in a significant increase
in the sentencing range minimum (as it does at the higher end of the
sentencing table)." Lauersen/Jackson, 362 F.3d at 164.
The Plea Agreement Does Not Preclude Savin from Making A Downward
The government argues that Savin is precluded from making a motion for
downward departure based on the plain terms of the plea agreement entered
into by Savin and the government on March 12, 2002 (the "Plea
Agreement"). The Plea Agreement states, in relevant part:
The Government contends that, pursuant to U.S.S.G. § 2
F1.1(b)(6)(b), the base offense is increased by 4
levels . . . because the offense affected a financial
institution and the defendant derived more than
$1,000,000 in gross receipts from the offense. The
defendant contends that U.S.S.G. § 2 F1.1(b)(6)(b) is
inapplicable. The parties agree that the parties may
litigate this issue at sentencing. Based upon the calculations set forth above, the
defendant's stipulated sentencing Guidelines ranges
are 33 to 41 months (level 20) if the Court determines
that U.S.S.G. § 2 F1.1(b)(6)(b) is inapplicable and 51
to 63 months (level 24) if the Court determines that
U.S.S.G. § 2 F1.1(b)(6) (b) is applicable . . .
The parties agree that neither a downward nor an
upward departure from the Stipulated Guidelines Ranges
set forth above is warranted. Accordingly, neither
party will seek such a departure or adjustment, or
suggest that the Court sua sponte consider such a
departure or adjustment.
. . . nothing in this agreement limits the right of
the parties . . . (ii) to make any arguments regarding
where within the Stipulated Guidelines Ranges set
forth above (or any other range as the Court may
determine) the defendant should be sentenced.
. . . In the event that the Probation Department or
the Court contemplates any Guidelines adjustments,
departures, or calculations different from those
stipulated to above, the parties reserve the right to
answer any inquiries and to make all appropriate
arguments concerning the same.
Plea Agreement at 3-5.
"Principles of contract law and special due process concerns for
fairness govern [the] interpretation of plea agreements." Spence v.
Superintendent, Great Meadow Correctional Facility. 219 F.3d 162, 167-68
(2dCir. 2000) (citing United States v. Rodgers, 101 F.3d 247, 253 (2d
Cir. 1996)). Further, the rules of contract law have to be applied to plea agreements with two things
in mind which may require their tempering in
particular cases. First, the defendant's underlying
"contract" right is constitutionally based and
therefore reflects concerns that differ fundamentally
from and run wider than those of commercial contract
law. Second, with respect to federal prosecutions, the
courts' concerns run even wider than protection of the
defendant's individual constitutional rights to
concerns for the honor of the government, public
confidence in the fair administration of justice, and
the effective administration of justice in a federal
scheme of government.
United States v. Ready, 82 F.3d 551, 558 (2d Cir. 1996) (quoting United
States v. Harvey, 791 F.2d 294, 300 (4th Cir. 1986)).
An agreement not to make a downward departure is enforceable if the
defendant knowingly and voluntarily entered into the plea agreement. See
United States v. Beimah, 3 F.3d 609, 611 (2d Cir. 1993) ("Given that
defendants can waive elemental constitutional and statutory rights, there
is no reason why defendants should not be able to waive their less
fundamental prerogative to request a downward departure.").
To determine whether a plea agreement has been
breached, we "look to the reasonable understanding
of the parties as to the terms of the agreement."
United States v. Colon, 220 F.3d 48, 51 (2d Cir.
2000). Because the government "`ordinarily has certain
awesome advantages in bargaining power,'" any
ambiguities in the agreement must be resolved in favor
of the defendant. United States v. Padilla, 186 F.3d 136,
140 (2d Cir. 1999) (quoting United States v. Ready,
82 F.3d 551, 558-59 (2d Cir. 1996)).
United States v. Riera, 298 F.3d 128
, 133 (2d Cir. 2002). ".Contract
language is unambiguous when it has a definite and precise meaning, unattended by danger of misconception in the purport of
the [contract] itself, and concerning which there is no reasonable basis
for a difference of opinion." Photopaint Technologies. LLC v. Smartlens
Corp., 335 F.3d 152
, 160 (2d Cir. 2003) (quoting Met. Life Ins. Co. v.
RJR Nabisco, Inc., 906 F.2d 884
, 889 (2d Cir. 1990)). Further, because of
"the Government's advantage in bargaining power and recognizing that the
Government usually drafts plea agreements," the Second Circuit
"construe[s] such agreements `strictly against the Government.'" United
States v. Cunningham, 292 F.3d 115
, 117 (2d Cir. 2002) (quoting Ready. 82
F.3d at 559).
The government argues that because Savin has acknowledged that
U.S.S.G. § 2 F1.1(b)(6)(b) is applicable, there is only one Stipulated
Guideline Range, namely 51 to 63 months, corresponding to adjusted
offense level 24. Even if there were two possible ranges before the
applicability of U.S.S.G. § 2 F1.1(b)(6)(b) had ...