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United States v. Ebbers

United States District Court, S.D. New York

January 8, 2020

UNITED STATES OF AMERICA,
v.
BERNARD J. EBBERS, Defendant.

          OPINION

          VALERIE CAPRONI, UNITED STATES DISTRICT JUDGE.

         In 2005, Defendant Bernard (“Bernie”) Ebbers, the former CEO of WorldCom, Inc., was sentenced to 25 years of imprisonment after a jury convicted him of securities fraud. As a result of his crimes, investors and shareholders lost hundreds of millions, perhaps billions, of dollars, and thousands of WorldCom employees lost their jobs and savings. Ebbers has now been incarcerated for more than 13 years. He is 78 years old with significant health issues.

         On September 5, 2019, Ebbers moved for compassionate release under 18 U.S.C. § 3582(c)(1)(A), as amended by the First Step Act of 2018 (hereinafter “First Step Act”), Pub. L. No. 115-391, 132 Stat. 5194. See Dkt. 350. This provision empowers a court to reduce a defendant's term of imprisonment if it finds that “extraordinary and compelling reasons warrant such a reduction.” 18 U.S.C. § 3582(c)(1)(A)(i). Until passage of the First Step Act, only the Bureau of Prisons (“BOP”) could bring a motion for compassionate release. The First Step Act created an independent avenue for defendants to seek relief from the federal courts.

         Before ruling on Ebbers's motion, this Court ordered the Government to provide the victims of Ebbers's crime with notice of these proceedings so that they could be heard. See Dkt. 365. Then on December 18, 2019, the Court granted Ebbers's motion after oral argument from the parties. See Dkt. 379.[1] This Opinion sets out the Court's reasoning for each decision in turn.

         BACKGROUND

         In September 2004, a grand jury charged Ebbers with nine counts of securities fraud and conspiracy to deceive the investing public and the SEC concerning WorldCom's true operating performance and financial results. After a seven-week trial, in March 2005, a jury returned guilty verdicts on all counts. The jury found that Ebbers had directed WorldCom to manipulate and publicly report inflated financial results, hiding WorldCom's true financial condition in order to meet securities analysts' expectations.

         When Ebbers and his co-conspirators' fraud came to light in June 2002, WorldCom's stock price dropped more than 90%-a loss of more than $2 billion in market capitalization. Numerous shareholders and former employees lost their savings, medical benefits, retirement funds, and jobs. Today, many who suffered losses as a result of the WorldCom fraud continue to struggle from its effects. The Court has received numerous letters from victims reckoning with homelessness, debt, property loss, and unattended medical needs. Victims have undertaken substantial efforts to find new employment and to work long hours at multiple jobs with the hope of recovering a semblance of financial stability. Some victims urged this Court to keep Ebbers in prison until he dies; others pleaded for compassion for him and his family.

         At Ebbers's sentencing (which post-dated United States v. Booker, 543 U.S. 220 (2005)), the court determined the relevant Sentencing Guidelines range, considered it and the sentencing factors contained in 18 U.S.C. § 3553, heard from victims, and considered Ebbers's age and health. As to the Guidelines calculation, now-retired Judge Barbara Jones[2] found that the loss amount calculated by the Probation Department-over $2 billion-was “a reasonable estimate, ” and applied a 26-level enhancement because the loss exceeded $100 million. The court further applied an enhancement for Ebbers's leadership role in the fraud. All considered, Ebbers's felonies yielded a Guidelines range of 30 years to life imprisonment. Judge Jones considered Ebbers's age, heart condition, and charitable works, but denied his request for a medical condition downward departure. Judge Jones noted “that this sentence is likely to be a life sentence for Mr. Ebbers, [but] a sentence of anything less would not sufficiently reflect the seriousness of this crime.” She imposed a term of imprisonment of 25 years. Ebbers remained free on appeal, ultimately surrendering to the BOP to begin his sentence on September 26, 2006. His projected release date was July 4, 2028.

         In July 2016, Ebbers petitioned the BOP for compassionate release, citing his macular degeneration and cardiomyopathy. At that time, a doctor evaluating Ebbers's condition noted that Ebbers “has no difficulty navigating around his housing unit or throughout the institution. He holds a job as an orderly in the unit, and has no problems doing that job.” Although his macular degeneration was progressive and incurable, the doctor noted that blind inmates are able to function in prison, and the prison would be able to accommodate him as his eyesight worsened. The doctor also concluded that Ebbers's cardiomyopathy was stable and manageable.

         The BOP denied the petition in August 2019, determining that Ebbers did not qualify under BOP guidelines for compassionate release. The accompanying memorandum noted that Ebbers is “closely followed by cardiology and ophthalmology, and . . . his medical conditions are chronic but stable at this time.” The BOP recognized that Ebbers is “legally blind, ” but noted that Ebbers could bath, dress, groom, move around the prison, and go to the bathroom himself. At the time, he also worked as an “orderly and has acknowledged he is not having any difficulties performing his duties.”

         Having exhausted his remedies with the BOP, Ebbers filed the instant motion with the Court for a sentence reduction pursuant to 18 U.S.C. § 3582(c)(1)(A). Ebbers, then incarcerated at the Federal Medical Center in Fort Worth, Texas (“FMC Fort Worth”), listed five conditions warranting early release: (1) macular degeneration; (2) cardiomyopathy; (3) diabetes; (4) inguinal hernia; and (5) significant weight loss and physical and mental deterioration. Ebbers also relied on a letter from Judge Jones, who has since retired from the bench, supporting his petition: according to Judge Jones, “given [Ebbers's] serious health problems, [Ebbers] has been punished enough.”[3]

         DISCUSSION

         I. Victim Notification

         The Court first finds that the Crime Victims' Rights Act (“CVRA”), 18 U.S.C. § 3771, Title I of the Justice for All Act of 2004, Pub. L. No. 108-405, 118 Stat. 2260, does not require victim notification of compassionate release proceedings unless the proceedings will include a public hearing in open court. But in light of courts' discretion in sentencing and the broad rights based language of the CVRA, a court may order notice to victims regardless of whether there are plans to hold such a hearing.

         In determining whether notice was mandatory, the Court first considered the plain meaning of the statute. See United States v. Rowland, 826 F.3d 100, 108 (2d Cir. 2016) (instructing courts to consider “the specific context in which the language is used, and the broader context of the statute as a whole, ” not just “dictionary definitions” (quotations omitted)). Section 3771(a)(2) grants crime victims the “right to reasonable, accurate, and timely notice of any public court proceeding, or any parole proceeding, involving the crime or of any release or escape of the accused.” 18 U.S.C. § 3771(a)(2). The two prepositional phrases in the provision address different rights to notice. A victim has the “right to reasonable, accurate, and timely notice [1] of any public court proceeding . . . involving the crime or [2] of any release or escape of the accused.” Id. Thus, whether the CVRA requires notice depends upon whether a motion for compassionate release is a “public court proceeding . . . involving the crime.” Id.

         The text shows that the term “public court proceeding” refers to a hearing in open court. Section 3771(a)(3) grants a “right not to be excluded from any such public court proceeding.” Id. § 3771(a)(3) (emphasis added). The word “excluded” plainly implies exclusion from being physically present. See also Exclude, Oxford English Dictionary (3d ed.) (“To shut out (persons, living things), hinder from entering (a place, enclosure, society, etc.).”). That, in turn, suggests that Congress used the term “public court proceeding” to mean an event in court that a victim could attend in-person. This interpretation is consistent with the interpretation that has been given to the same phrase in 18 U.S.C. § 3771(a)(2)-it “ensures a victim can reasonably arrange her affairs to attend the proceeding for which notice is given.” United States v. Turner, 367 F.Supp.2d 319, 332 (E.D.N.Y. 2005) (emphasis added). And when a single term, like “public court proceeding, ” appears in different provisions of the same statute, the Court presumes it has the same meaning in both places. Envtl. Def. v. Duke Energy Corp., 549 U.S. 561, 574 (2007).

         The Court's analysis did not end there. The statute also gives victims a “right to be reasonably heard at any public proceeding in the district court involving release, plea, sentencing, or any parole proceeding.” 18 U.S.C. § 3771(a)(4). The prepositions “at” and “in” imply that the right applies to proceedings in open court at which a victim could attend and could be heard. In accord, the Ninth Circuit has construed “public proceeding” in section 3771(a)(4) to be synonymous with a live court proceeding. See United States v. Burkholder, 590 F.3d 1071, 1075 (9th Cir. 2010); Kenna v. U.S. Dist. Court for Cent. Dist. Cal., 435 F.3d 1011, 1014-15 (9th Cir. 2006). The Ninth Circuit noted that “[v]irtually all proceedings in district court are public in the sense that the papers and other materials may be viewed by anyone on request to the clerk's office. When Congress used the word ‘public' in this portion of the CVRA, however, it most likely meant to refer to proceedings in open court-much as the word is used in the common phrase ‘public hearing.'” Kenna, 435 F.3d at 1015. This interpretation is consistent with the legislative history of the CVRA, which indicates that “the very purpose of this section is to allow the victim to appear personally and directly address the court, ” noting that “[t]he right to make an oral statement is conditioned on the victim's presence in the courtroom.” Id. at 1015- 16 (quoting 150 Cong. Rec. S10911 (daily ed. Oct. 9, 2004) (statement of Sen. Kyl) and S. Rep. No. 108-191, at 38 (2003)). Congress thus gave victims the right to speak at a “public proceeding” in court, but Congress did not create any separate right to be heard when a decision on a motion for compassionate release is made based only on written presentations of the parties.[4]

         This Court, aware that Ebbers's motion might be decided on the motion papers, nonetheless ordered notification to victims before a decision was made whether to hold a public hearing. It did so for two reasons. First, “[s]entencing courts have long enjoyed discretion in the sort of information they may consider when setting an appropriate sentence.” Dean v. United States, 137 S.Ct. 1170, 1175 (2017); see United States v. Eberhard, 525 F.3d 175, 177 (2d Cir. 2008) (“[T]he sentencing court's discretion is largely unlimited either as to the kind of information it may consider, or the source from which it may come.” (quotations omitted)). Second, the broad rights-based language of the CVRA counsels in favor of giving victims notice and an opportunity to be heard, regardless of whether there will be a hearing in open court. “Most of the rights conferred by the Act are aimed at ensuring that victims have dignity and ‘voice' in criminal proceedings, and do not provide specific procedures for their implementation.” Fed. Ins. Co. v. United States, 882 F.3d 348, 358 (2d Cir. 2018). Congress enacted the CVRA in order “to protect victims and guarantee them some involvement in the criminal justice process.” United States v. Moussaoui, 483 F.3d 220, 234 (4th Cir. 2007). That involvement extends beyond pre-trial proceedings. See Brandt v. Gooding, 636 F.3d 124, 136- 37 (4th Cir. 2011) (determining that a habeas petition was sufficient to constitute a public proceeding within the Act and triggered a victim's right to be heard). And it extends beyond victims telling their stories in open court. Courts frequently consider written impact statements, as ...


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