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UNITED STATES v. RUCH

November 10, 1995

UNITED STATES OF AMERICA
v.
ROBERT C. RUCH, JR.



The opinion of the court was delivered by: ROBRENO

 AND NOW, this 10th day of November, 1995, upon consideration of the Government's Submission Regarding Rule 11(e)(1)(C) Plea (docket no. 34), the defendant's Memorandum in Support of Rule 11(e)(1)(C) Plea Agreement (docket no. 33), and after a hearing with counsel for the parties, it is hereby ORDERED that the parties' Rule 11(e)(1)(C) plea agreement is REJECTED for the following reasons:

 I. Factual Background

 1. On July 13, 1995, the defendant was charged in a five-count indictment with income tax evasion in violation of 26 U.S.C. §§ 7201 and 7206(1). On October 12, 1995, the defendant and the Government submitted a plea agreement to the Court in connection with a change-of-plea hearing that was scheduled for October 13, 1995.

 2. In the plea agreement, the Government agreed to dismiss counts 1, 2, 4, and 5 of the indictment, in exchange for the defendant pleading guilty to count 3 of the indictment. The Government and the defendant also agreed that "this plea is entered under Rule 11(e)(1)(C), Fed.R.Crim.P. . . . [and that] the applicable tax loss is more than $ 20,000, but less than $ 40,000, resulting in an offense level of 10." See Plea Agreement, P 6. *fn1" In addition, the parties stipulated that the defendant would receive a two-level reduction for acceptance of responsibility. Using the 1990 Guidelines Manual, the Government and the defendant calculated that the defendant's total offense level would be 8, the criminal history category would be I, and the guidelines range would be 2-8 months of incarceration. Under the terms of the 1990 Guidelines Manual, a total offense level of 8 falls within Zone B. Thus, according to the plea agreement, the defendant would be eligible for a sentence involving a combination of conditions requiring intermittent confinement, community confinement, or home detention. *fn2" The Court heard the arguments of counsel on October 13, 1995, and took the matter under advisement.

 II. The Court's Discretion

 3. The Government argues that Section 6B1.1(c) of the United States Sentencing Guidelines prescribes the procedure that the Court should follow in deciding whether to accept or reject the proffered plea agreement. Section 6B1.1(c) provides that,

 
The Court shall defer its decision to accept or reject any nonbinding recommendation pursuant to Rule 11(e)(1)(B), and the Court's decision to accept or reject any plea agreement pursuant to Rules 11(e)(1)(A) and 11(e)(1)(C) until there has been an opportunity to consider the presentence report, unless a report is not required under § 6A1.1.

 Section 6B1.1(c), United States Sentencing Guidelines (emphasis added). The Government contends that this language requires the Court to consider the presentence report before deciding whether to accept or reject the plea agreement, unlike when a plea agreement is proffered pursuant to Federal Rule of Criminal Procedure 11(e)(1)(B).

 4. The mandatory language of Section 6B1.1(c), however, contradicts the permissive language of Rule 11(e)(2) of the Federal Rules of Criminal Procedure. Rule 11(e)(2) provides that, "if the agreement is of the type specified in subdivision (e)(1)(A) or (C), the court may accept or reject the agreement, or may defer its decision as to the acceptance or rejection until there has been an opportunity to consider the presentence report." Fed. R. Crim. P. 11(e)(2) (emphasis added). In other words, while Section 6B1.1(c) mandates that a court consider a presentence report before accepting or rejecting a plea agreement, the plain language of Rule 11(e)(2) yields to the discretion of the court whether to follow such a procedure.

 5. "The Sentencing Commission promulgates [the sentencing] guidelines by virtue of an express congressional delegation of authority for rulemaking, see Mistretta v. United States, 488 U.S. 361, 109 S. Ct. 647, 654-58, 102 L. Ed. 2d 714 (1989), and through the informal rulemaking procedures in 5 U.S.C. § 553, see 28 U.S.C. § 994(x)." Stinson v. United States, 508 U.S. 36, 123 L. Ed. 2d 598, 113 S. Ct. 1913, 1919 (1993). Thus, the guidelines are the equivalent of legislative rules adopted by federal agencies, and the Commission's policy statements and commentary regarding the guidelines are akin to an agency's interpretation of its own legislative rules. Id. The guidelines as well as "the policy statements and commentary contained in the guidelines are binding on the federal courts." United States v. Holifield, 53 F.3d 11, 13 n. 2 (3rd Cir. 1995). When a particular guideline or the Commission's interpretation of that guideline violates the Constitution or a federal statute, however, the Constitution or statute obviously must be given "controlling weight." Stinson v. United States, 113 S. Ct. at 1918-19.

 6. Chapter 6, Part B of the guidelines, entitled "Plea Agreements," contains several policy statements that provide standards for courts to use in deciding whether to accept or reject plea agreements. The Sentencing Commission itself acknowledges that Rule 11 of the Federal Rules of Criminal Procedure takes precedence over Chapter 6 of the guidelines. "The Commission decided not to make major changes in plea agreement practices in the initial guidelines, but rather to provide guidance by issuing general policy statements concerning the acceptance of plea agreements in Chapter 6, Part B (Plea Agreements). The rules set forth in Fed. R. Crim. P. 11(e) govern the acceptance or rejection of such agreements." See United States Sentencing Guidelines, Chapter 1, Part A(4)(c). *fn3" Thus, the Court concludes that Rule 11(e)(2) trumps Section 6B1.1(c), and that under Rule 11(e)(2), it has the discretion to accept or reject a plea agreement either before or after it considers a presentence report. *fn4" In this case, for the reasons set forth below the Court will reject the plea agreement before ordering the presentence report. *fn5"

 III. The Amount of the Tax Loss

 7. The federal courts of appeal are divided regarding the issue whether a district court must expressly state its reasons for rejecting a plea agreement. Compare United States v. Miller, 722 F.2d 562, 566 (9th Cir. 1983) (court must expressly state reason for rejecting plea agreement) with U.S. v. Foy, 28 F.3d 464, 472 (5th Cir. 1994) (decision to reject a plea agreement is proper as long as the record as a whole renders the basis of the decision reasonably apparent to the reviewing court and a decision on that basis is within the district court's discretion). While the ...


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