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April 23, 2009

Flawed HLR note on federal white-collar sentencing

The April 2009 issue of the Harvard Law Review includes this student Note focused on federal white-collar sentencing, titled "Go Directly to Jail: White Collar Sentencing After the Sarbanes-Oxley Act."  Here is how the note's conclusion starts:

If the purpose of the WCCPA was to deter white collar crime, the statute’s harsh penalties have not achieved their goal.  Moreover, by introducing the potential for enormously disparate sentences for precisely the same crime, the WCCPA detracts from just punishment.  This Note has proposed merely one way of reforming the sentencing process, in hopes that sentencing will become more consistent and predictable across judges and jurisdictions.

Though the note does a reasonable job of documenting some of the challenges and problems with modern white-collar federal sentencing, there is a telling lack of sophistication in much of the analysis.  This lack of sophistication is most clear from a fundamental flaw in the Note's call for reform: "Congress or the United States Sentencing Commission must take steps to stabilize and rationalize the white collar sentencing system [and this] Note proposes that the best way to achieve this goal would be to tie Guidelines sentencing levels to actual loss, rather than intended loss...." 

As all informed white-collar practitioners know, the federal guidelines have always tied "sentencing levels to actual loss" though USSG 2B1.1, and "intended loss" enters the picture only if and when the intended loss is greater than actual loss.  Moreover, most modern white-collar sentencing decisions that have garnered lots of attention (e.g., Olis and Adelson and Parris) involve cases in which the the actual loss calculation produced a sentencing range that seemed much too high in light of the defendant's true culpability.

Anyone eager for a much more accurate and more sophisticated examination of federal white-collar sentencing must get the Federal Sentencing Reporter's February 2008 issue on this topic (available here, described in detail here and here).  On the precise topic of loss, the FSR issue includes these terrific articles:

The fact that the Harvard Law Review could publish a note that incorporates such a fundamental flaw provides yet another sobering reminder of the extraordinarily poor instruction at at least one elite law school concerning the basics of federal sentencing law.

April 23, 2009 at 11:44 AM | Permalink


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Posted by: Chris | Apr 23, 2009 12:40:26 PM

That is pretty embarrassing. The author even quoted the portion of the Guideline that says the figure is the greater of actual or intended loss.

The Note also betrays a broad misunderstanding of the federal sentencing system and the role of 3553. At one point the note talks about how nobody knows why a judge might impose a particular sentence if the press isn't there to report it. I guess the author and his/her advisor weren't familiar with transcripts. And when you make a statement that most sentencings occur in the absence of any paper or opinion (especially in the white collar context) you might want to provide a citation to prove that bold assertion.

It would be pretty easy to pile on, but I think the advisor is the real shame here.

Posted by: Anon 423 | Apr 23, 2009 1:10:26 PM

Both the author and the editors are to blame. The author mis-stated the law and the editors allowed it even though a citation was given stating the correct law.

The note asserts that: "Currently, the loss calculation is based not on the actual loss but on the intended loss, which can dramatically overrepresent the amount of monetary loss and social harm caused by the crime." In an attempt to support this (mostly incorrect) statement, footnote 91 states the law correctly: "loss is the greater of actual loss or intended loss."

Someone should have noticed the disconnect between what the text asserted and what the citation in support showed.

In partial defense, when partial loss is used it usually does result in unduly high sentences. However, the same is true when actual loss is used, which is likely the majority of cases by far.

Posted by: ouch is right | Apr 23, 2009 1:29:18 PM

Nothing like bashing a law student. But, considering that this law student probably stepped on a few people and sucked up to a few people odds are he deserves to be publicly trashed. (If I am wrong, and he never sucked up to someone or ever did anything bad, I will take that back.)

Strangely enough nobody will ever take your greater criticism seriously: that law students are under no incentive to do a good job in law reviews. Once they are on, it’s mediocrity city.

Posted by: S.cotus | Apr 23, 2009 2:29:39 PM

S.cotus, I don't mean to bash the law student. I share Berman's concern that the institution hasn't provided much of an education on federal sentencing matters for the law student, and I add my concern that the faculty advisor must not have been very well versed in sentencing matters. Berman's last sentence states his "greater criticism," which I don't think has anything to do with student mediocrity after making law review.

Posted by: Anon 423 | Apr 23, 2009 3:22:16 PM

It seems that the fundamental error is that the Note author failed to realize that actual loss can (and often does) exceed intended loss. He (or she) says:

Intended loss is a double-edged sword — on the one hand, it encompasses the full extent of potential damages that could have arisen from the scheme; on the other, it “includes intended pecuniary harm that would have been impossible or unlikely to occur.”

If you think that actual loss can never exceed intended loss, then this observation would be consistent with the law. If that were the case, though, the language of the Guidelines -- "loss is the greater of actual loss or intended loss" -- would make little sense.

In other words, the problem seems to be a failure of reasoning rather than a failure to know what the legal standard is.

Posted by: Anon321 | Apr 23, 2009 3:50:39 PM

The editorial process is flawed at most law reviews. A few leaders at each law review earn jobs as editors or win elections to the positions-- most to get an honor that they can list on their resumes.

The notes editors are in a particularly odd position-- editing the manuscripts of their colleagues and friends. If I had to guess I'd bet that the note was blue-booked and grammatically edited, but that there was no real testing of the content.

As an aside, I find it very interesting that legal academia focuses on (and rewards) publication in law reviews. The manner in which articles are selected is arbitrary. "Name" authors get special consideration. Certain topics are the flavor of the month (when I was in law school I read approximately 500 manuscripts that used the phrase "gatekeeping function" in the abstract, which detailed some nuanced law and econ abstraction). If you're from a 3rd tier law school your article is tabled at best and tossed at worst.

It's a flawed system. One would think that peer-reviewed journals should be the gold standard.

Posted by: Dan | Apr 23, 2009 3:59:44 PM

The two unrelated problems have been covered before.

1) The idea of a professional journal covering the latest being run by a student is impossible anywhere but in the lawyer profession. The idea of a third year med student editing or even writing for a surgical journal, or a master's level student writing for a bridge engineering journal is extraordinary. They are both working 80 hours a week to learn their new language and methods. How could they also run a journal? All other professions have top researchers are reviewers. Law student editors tell the world, the scholarship of the lawyer is a joke. Any punk off the street can lead it.

That is a ridiculous mistake in a profession that does nothing right. It is not even negligence or wrongfulness. A journal run by students is insane. The law school owners of these journals are cuckoo.

2) Every penny of value in all history has been generated by the labor of a person. So the theft of an amount that exceeds some agreed upon value of a human life implies the assassination of an economic person by the destruction of its output. We can argue about the value of a human life. Let's presume the overly generous market value favored by economists is true, around $6 million. Anyone who intentionally destroys such an amount should be executed. The lawyer cannot see nor even pronounce the word, victim. In the case of money, the victim is constructive, but absolutely real, taking the form of labor of a lifetime.

Posted by: Supremacy Claus | Apr 23, 2009 5:39:45 PM

I don't understand how this Note reflects badly on HLS as an institution. The author might not have taken Advanced Criminal Procedure or another course that deals with sentencing matters. Even if she had, those courses would deal with more general principles rather than specific details about the meaning of particular guideline provisions. As well they should -- class time is most efficiently spent teaching students about the general structure of sentencing law, rather than going over specific guidelines. The fact that this author misinterpreted the provision seems to reflect badly on his or her legal reasoning abilities, and perhaps on the Harvard Law Review's editorial policies, but not on HLS itself. I think you need more support for your rather extreme claim that there is "extraordinarily poor instruction" on sentencing matters at HLS. I take exception to this claim on behalf of the professor who taught me about sentencing law in Advanced Criminal Procedure. I found the instruction excellent. We did not spend as much time on the subject as might have been ideal, but this is inevitably the case in a course that covers a huge amount of material.

Posted by: HLS grad | Apr 23, 2009 6:06:13 PM

"who taught me about sentencing law in Advanced Criminal Procedure."

Just curious, was a course solely on sentencing law offered or was that topic only taught in the general advanced procedure class?

Posted by: DEJ | Apr 23, 2009 6:17:09 PM

HLS grad -- Doug Berman went to Harvard Law, so his view is as first hand as yours, if not more so now that he is on the faculty at another school. I don't understand your claim that this doesn't reflect HLS as an institution when we have the following:

1. Your claim that this reflects the authors poor reasoning skills (a legitimate critique on your part).
2. Others who claim that it's a defect in the student editors' review or the law review system generally (an equally reasonable critique).
3. The claim that the author's faculty advisor failed to catch the rather large doctrinal mistakes in addition to Guideline-specific mistakes, and that the student obviously didn't learn the topic in his/her classes.

What is the institution (for the purposes of producing this article), outside of its students (1), its journals (2), and its faculty (3)? The author makes a call for reform based on a fundamental misunderstanding of sentencing law that is obvious to anyone who can read the Guideline language. That should have been caught by either 2 or 3. When you publish an article in the Harvard Law Review calling for change in sentencing law, you open yourself up to criticism whether you have or have not taken Advanced Criminal Procedure or some other sentencing law class.

Posted by: Anon 423 | Apr 23, 2009 6:48:45 PM

HLS grad: Off topic, but far more important. I am curious about the Harvard law education.

Were you ever told the technical meaning of the word, "reasonable?" Or, were you ever told anything about its definition or measurement, outside of that in the law dictionary? Do you understand why it is so ubiquitous and central in the law today?

Thanks in advance. Its technical meaning is covered in 10th Grade World History and in college Western Civ 101. I ask because I would like to know if the profs made you forget the technical meaning, if you took those courses.

Posted by: Supremacy Claus | Apr 23, 2009 7:26:19 PM

HLS, it reflects badly on HLS itself, because its best and brightest are not only incompetent, but seem to be proud of the fact that they can be so incompetent.

Now, granted, it was like that at my law school, too.

“I take exception to this claim on behalf of the professor who taught me about sentencing law in Advanced Criminal Procedure. I found the instruction excellent. We did not spend as much time on the subject as might have been ideal, but this is inevitably the case in a course that covers a huge amount of material.”

Considering that you don’t provide specifics, it is hard to see how you can argued that instruction at HLS is good. In fact, you seem to concede that it is deficient.

Posted by: S.cotus | Apr 23, 2009 11:14:06 PM

I don't necessarily think this note reflects poorly on HLS, and I'm not going to pile on a guy who is already buried in this string of comments.

I think it's more institutional than Harvard-- law reviews are fast and loose and student run. Yes, this one is run by Harvard students. But there's nothing unique that couldn't have just as easily happened at UVA, Northwestern, Ohio State, or Pepperdine. Yes, his faculty advisor should have caught it-- but that presumes a diligent faculty member who has an expertise in crim law AND who took the time to read and think about his student's note. It also presumes that the student had a faculty advisor.

The bottom line is that the students who control content do not know much about the law. And it's not their fault-- how could they?

If you want to lay blame on someone for this mistake, put it on the author. I don't care who you are or where you go to school, if you write an entire article about how to make changes to the way the guidelines/law treat an offense, you better be damn sure you know how it works now. Again, I don't think this student's mistake has anything to do with the fact that s/he goes to HLS. It's inexcusable, however, that the writer didn't take the time to learn the law surrounding his/her chosen subject. It's not even difficult in this case.

Posted by: Dan | Apr 24, 2009 12:11:26 AM

Let me pile some on.

1. The firm where the author summered at.

2. The undergraduate institution where the author went to school. By the time you get to law school you should be smarter than that. They are producing inferior graduates.

3. Every person that gave the author a reference for law school. He obviously sucked up to them, because he wasn't that smart. They are bad academics and have hurt America.

Posted by: S.cotus | Apr 24, 2009 1:52:47 AM

Oh, I forgot.

This proves that Harvard Law Students are not detail oriented.

Posted by: S.cotus | Apr 24, 2009 2:00:39 AM

Scotus is correct in his list. The disappointed readers of HLR may be owed money damages. Prof. Berman should consult an attorney to review his legal rights.

Posted by: Supremacy Claus | Apr 24, 2009 7:13:39 AM

"Just curious, was a course solely on sentencing law offered or was that topic only taught in the general advanced procedure class?"

I graduated a few years back, and at the time there was no dedicated sentencing class (except, perhaps, the death penalty class), but it was covered quite a bit in Federal Criminal Law and, as I recall, also touched on in Advanced Criminal Procedure (we also spent a class or two on sentencing in 1L Crim). My recollection is that the justifiably legendary Bill Stuntz spent a lot of time on the relationship between sentencing rules and prosecutorial decisionmaking, and that the most substantial portion of Fed Crim was the Guidelines portion.

Posted by: Prosecutorial Indiscretion | Apr 24, 2009 10:28:55 AM

Bill Stuntz is a vile, criminal lover, rent seeking, horrible person. I pray he meet his end in a carjacking by a parolee. He likely lives in a lawyer neighborhood. There the death penalty for all violent criminals is on the spot, as the police shows up blasting. This vile racist hypocrite has condemned law abiding minority crime victims to their fates, unprotected by government. They should form direct action groups, and bring street justice to his left wing cult indoctrination camp classes. Anyone who has undergone his indoctrination is totally unfit for any government position, being totally biased in favor the violent criminal.

Posted by: Supremacy Claus | Apr 24, 2009 11:16:12 PM

Why do I get the impression that a handful of readers have their own personal agendas, and are using this space to attack each other -- for reasons of little interest to the majority of readers?

Perhaps you can just email each other, or leave insulting voice mail messages, and save this space for intelligent discourse.

Posted by: Anon | Apr 27, 2009 12:59:17 AM

Anon: Anyone bringing up the subject of crime victims is bringing up a subject of little interest to you and engaging in non-intelligent discourse.

Posted by: Supremacy Claus | Apr 27, 2009 6:58:52 AM


Let me pile some on.

1. The firm where the author summered at.

2. The undergraduate institution where the author went to school. By the time you get to law school you should be smarter than that. They are producing inferior graduates.

3. Every person that gave the author a reference for law school. He obviously sucked up to them, because he wasn't that smart. They are bad academics and have hurt America.


Scotus, you forgot to blame the author's Mom.

Posted by: Dan | Apr 27, 2009 6:32:48 PM

Any lawyer who believes in the chain of causation should end up blaming The Big Bang, an act of God, and the original cause of all our problems. There is no chain of causation in our physical universe. It is unlawful, Medieval garbage concept, making torts, the same, unlawful, Medieval garbage.

Posted by: Supremacy Claus | Apr 28, 2009 2:57:02 AM

While you nerds are all a-twitter scoffing about law students and blathering on about "intended" vs. "actual" losses, a new standard for "potential" losses under 3553(a), totally untethered to the Guidelines, has been quietly developing in the 9th Circuit.

US v. Hilgers, 2009 WL 606220

Let the upward variances for "potential" loss commence!

Posted by: dweedle | Apr 28, 2009 9:48:39 AM

Of course, many AUSAs have equated "intended" with "potential" for years.

And many judges have allowed them to do so.

Posted by: Dan | Apr 28, 2009 1:14:52 PM

Sentencing based upon losses ignores the fundamentals of having laws with boundaries and extends boundaries beyond what law was intended to accomplish.

Posted by: Pat R., Boston, MA | Jul 15, 2009 11:19:04 AM

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