Wednesday, November 30, 2022

Third Circuit: Loss means actual loss, not intended loss

This is a biggie from the Third Circuit.

In U.S. v. Banks, the court held loss, for sentencing guidelines purposes, means actual, and not intended, loss:

The Guideline does not mention “actual” versus “intended”
loss; that distinction appears only in the commentary. That
absence alone indicates that the Guideline does not include
intended loss.49
The government concedes that “the presumption is that
a word carries its ordinary meaning (and thus may resolve its
ambiguity).”50 We agree. The ordinary meaning of “loss” in
the context of § 2B1.1 is “actual loss.” This result is confirmed
by dictionary definitions of “loss.”51 


Our review of common dictionary definitions of “loss” point
to an ordinary meaning of “actual loss.” None of these
definitions suggest an ordinary understanding that “loss”

means “intended loss.” To be sure, in context, “loss” could
mean pecuniary or non-pecuniary loss and could mean actual
or intended loss.55 We need not decide, however, whether one
clear meaning of the word “loss” emerges broadly, covering
every application of the word. Rather, we must decide
whether, in the context of a sentence enhancement for basic
economic offenses, the ordinary meaning of the word “loss” is
the loss the victim actually suffered.56 We conclude it is.
Because the commentary expands the definition of
“loss” by explaining that generally “loss is the greater of actual
loss or intended loss,”57 we accord the commentary no weight.
Banks is thus entitled to be resentenced without the 12-point
intended-loss enhancement in § 2B1.1.58

Monday, November 28, 2022

Timing Is Everything

By Michael Caruso 

I rarely write about pending cases, but this case caught my attention as a former line cook and current lawyer.

Recently, Amanda Ramirez filed a $5 million class action lawsuit against Kraft Heinz Foods Company in Miami—the Hon. Beth Bloom is presiding. The lawsuit doesn't need any embellishment. Here are the allegations (slightly paraphrased but CAPS in original):

1. Kraft sells microwavable single-serve cups of mac and cheese represented as "READY IN 3½ MINUTES" under the Velveeta brand.

2. The statement "ready in 3½ minutes" is false and misleading because the mac and cheese takes longer than 3-and-a-half minutes to prepare for consumption. 

3. There are four steps in preparing the mac and cheese:

      a. Consumers must "REMOVE lid and Cheese Sauce Pouch;

      b. Next, they must "ADD water to fill the line in the cup. STIR."; 

      c. Third, "MICROWAVE, uncovered, on HIGH 3-1/2 min. DO NOT DRAIN."; 


      d. Finally, they should "STIR IN contents of cheese sauce pouch." 


Here's the crux of the suit: "Consumers seeing 'ready in 3½ minutes' will believe it represents the total amount of time it takes to prepare the [mac and cheese], meaning from the moment it is unopened to the moment it is ready for consumption. 

However, the directions outlined above show that 3-and-a-half minutes is just the length of time to complete one of several steps. The label does not state the mac and cheese takes '3½ minutes to cook in the microwave,' which would have been true."

Ms. Ramirez then states the obvious: "To provide consumers with mac and cheese that is actually 'ready in 3½ minutes,' it would need to be cooked in the microwave for less than 3-and-a-half minutes so that all the preparation steps could be completed in the 3-and-a-half minute timeframe. Consumers are misled to expect the mac and cheese will be ready for consumption in a shorter amount of time than it really takes to prepare."


I understand that Tarantino has acquired the film rights.


Ramirez v. Kraft Heinz, 22-cv-23782-BB

Sunday, November 27, 2022

"Whether the U.S. Court of Appeals for the 2nd Circuit’s “right to control” theory of fraud — which treats the deprivation of complete and accurate information bearing on a person’s economic decision as a species of property fraud — states a valid basis for liability under the federal wire fraud statute."

That's the question presented in Ciminelli v. United States, which SCOTUS will hear tomorrow morning. The government's use fraud statutes is out of control; it has criminalized basic breach of contract cases.  As an example, in a recent case in this district, a group of defendants were sentenced to 18 years (!!) under a right to control theory where the alleged fraud was based on a lie on how the defendants would use the product they purchased.  So Ciminelli is a big one, not just for the Second Circuit.

From SCOTUSblog:

This case has similarities with prior corruption disputes selected by the Supreme Court. It involves millions in New York state funds and thus raises federalism concerns: How much flexibility should states have in governance decisions without federal interference? The bidding process may have been unfair to Ciminelli’s competitors, but did the unfairness merit federal intervention? The harm calculation in this case is also unclear: Did Ciminelli intend to cause any loss to Fort Schuyler? There may have been a stronger case that Ciminelli wanted to cause business losses to his competitors by denying them a chance at the Buffalo Billion. Finally, because this is a criminal case, there is the specter of overcriminalization. Was Ciminelli on notice that he was committing a federal crime as opposed to utilizing sharp business practices to edge out competitors?

Deception in the government contracting process is a legitimate threat, and courts face a challenge in determining which forms of deception are serious enough to merit criminal sanctions. Some level of insincerity is expected — when a contractor makes its “best” offer, there is likely some puffery or gamesmanship involved in the negotiations. On the other hand, collusive price-fixing behavior among the contractors bidding for business is both improper and illegal. When are financial penalties sufficient to deter sketchy contractors, and when does federal prison become important in limiting bad behavior?

In Ciminelli’s case, the main wrongdoing appears to be his “sneaking to the front of the line” in the negotiation process. If the Supreme Court continues its trend of narrowing the scope of federal fraud criminalization, it can do so by eliminating the “right to control” theory of fraud. A decision that narrows or nixes that theory could reduce uncertainty among government contractors. Potential contractors would face a reduced risk of prison time when engaging in pre-negotiation talks with government insiders. Less clear is how much such a narrowing decision would benefit Ciminelli. Because the jury instructions and facts give room for having proven tangible economic harm, it is uncertain how much influence the “right to control” language had upon the jury’s decision to convict.

Hope everyone had a great Thanksgiving.

Monday, November 21, 2022

Sorry for the slow blogging

 Gonna take this week off.

I hope all of you have the best Thanksgiving.

I'm thankful for all of you and the great comments, tips, and readers.  And also thankful for the great posts by John Byrne and Michael Caruso.  Such wonderful stuff.

If you are looking for a good read during this Thanksgiving week, check out Rumpole's great posts on Elizabeth Holmes' sentencing here and here.  

Great stuff on why a first-time non-violent offender should not have gotten 11 years.  

Catch up soon.

Thursday, November 17, 2022

Crypto Lawsuit Names High Profile Defendants


By John R. Byrne

If you've been following the news, you know about the cryptocurrency collapse. Here comes the litigation. A plaintiff has sued Sam Bankman-Fried (the founder and former CEO of FTX, a crypto trading platform) and a host of celebrities, alleging they misled them about the functionality of the FTX platform and/or failed to disclose their compensation for promoting FTX. FTX has filed for bankruptcy. 

You'll recognize the names of some of the defendants: Tom Brady, Gisele Bundchen, Shaq, Larry David, Udonis Haslem, and the Golden State Warriors (yes, the team), among others. The complaint asserts a claim under the Florida Securities and Investor Protection Act, FDUTPA, and civil conspiracy.

The case was assigned to Judge Moore. You can read the complaint here

In the meantime, the arena where the Heat play--now FTX Arena--is getting a new name. With the way the Dolphins are playing, maybe Joe Robbie would be nice callback.

Wednesday, November 16, 2022

Mar-a-lago special master/search case set for oral argument in 11th Circuit on November 22

Monday, November 14, 2022

"DEA’s most corrupt agent: Parties, sex amid ‘unwinnable war’"

 That's the title of the AP's explosive report on DEA agents and federal prosecutors.  The article, by Jim Mustian and Joshua Goodman, is a must-read.

The story centers around testimony provided to federal prosecutors by former Miami and Colombia-based agent José Irizarry, who has been portrayed as the DEA’s most corrupt agent. Irizarry spent his final hours of freedom with the AP in his native Puerto Rico confessing his crimes before reporting to federal prison to begin a 12-year sentence for money laundering.

The article takes a wider look at other federal agents and prosecutors who he says turned a blind eye — and sometimes joined in — his flagrant abuses.

Among the AP investigation’s key findings:

  1. Irizarry has described to federal investigators — and the AP — how other federal agents, prosecutors, informants and in some cases cartel smugglers all joined on a three-continent joyride known as “Team America” that chose cities for bulk cash pick-ups mostly for partying or to coincide with Real Madrid soccer or Rafael Nadal tennis matches. That included stops along the way in VIP rooms of Caribbean strip joints, Amsterdam’s red-light district and aboard a yacht in Cartagena, Colombia, that launched with plenty of booze, booming music and more than a dozen prostitutes.
  2. An ongoing federal investigation has focused on one of Irizarry’s partners who was briefly detained on allegations of sexual assault during a trip to Madrid, Spain, in 2018. The agent’s brother, a Florida wedding photographer, has been jailed since March for civil contempt after he refused to provide testimony to a Grand Jury in Tampa even after being granted immunity.
  3. Three current and former federal prosecutors have faced questioning about Irizarry's raucous parties, including one still in a senior role in Miami, another who appeared on TV’s “The Bachelorette” and a former Ohio prosecutor who was confirmed to serve as the U.S. attorney in Cleveland this year before abruptly backing out for unspecified family reasons.
  4. Central to the Irizarry investigation are overly cozy relationships developed between agents and informants — strictly forbidden under federal guidelines — and loose controls on the DEA’s undercover drug money laundering operations that few Americans know exist but which generate a huge windfall every year for U.S. law enforcement. Spurred by Irizarry’s crimes, the new DEA Administrator Anne Milgram has ordered an outside review of the agency’s foreign operations.

Sunday, November 13, 2022

Chief Judge William Pryor addresses the Federalist Society

He starts at the 24 minute mark here.

Judge Pryor’s speech is getting a lot of press.  Here’s an example from Reuters:

A prominent federal judge on Thursday called the growth of the conservative Federalist Society an "example of the American dream" and mocked criticism by a U.S. senator and others who say the influential legal group has captured the judiciary.


Federalist Society leaders advised on the selection of former President Donald Trump's judicial nominees, and many of Trump's appointees were members of the group. But Pryor mocked the notion that the 60,000-member professional organization was working "in the shadows" to reshape the courts.

"Little did I know that millions of American voters, that the past president of the United States and the United States senators only provided camouflage for the real operation," Pryor said.

Pryor singled out claims by Democratic Senator Sheldon Whitehouse of Rhode Island, who sits on the Senate Judiciary Committee, that a network of conservative causes and "dark money" groups are working together to seat judges and justices. Whitehouse could not immediately be reached for comment.

He also took aim at liberal commentators who frequently criticize the Federalist Society. Pryor displayed images that referenced some of those remarks, including one showing the group's logo on the Death Star from "Star Wars."


Leonard Leo, a long-time conservative legal activist, while serving as a Federalist Society executive helped compile a list of potential U.S. Supreme Court nominees that Trump drew from during his tenure.

"Are there members of the Federalist Society who are involved in that process? Of course. But with that, so what? That's politics," said Pryor, who was on Trump's Supreme Court lists.

"The idea that this is some kind of monolithic organization is just a myth," he said.

Thursday, November 10, 2022

Sorry, Not Sorry, Sorry

By Michael Caruso

In the great Larry David movie “Clear History,” he plays a disgraced marketing executive who,  unsurprisingly, at various points in the story, creates drama for which he has to “apologize.” But, in Larry’s view, “Apologies don’t have to be sincere, it’s just the act of the apology itself. All that matters is if you’re acting sincere.”

As David’s readers know, a person’s “acceptance of responsibility” heavily influences the USSG guideline determination. The role of remorse at sentencing and a judge’s ability to accurately gauge a person’s remorse is an area of considerable debate. Professor Susan Blandes has written extensively on this subject. Her research demonstrates that there is currently no evidence that judges can accurately evaluate remorse in a courtroom. Conversely, she’s found evidence that race and other impermissible factors create hurdles to evaluating remorse. 

Moreover, her article notes there is little evidence that remorse is correlated with future law-abiding behavior or other legitimate penal purposes. There is evidence, however, that remorse is often conflated with shame, which correlates with increased future criminality. More research is needed. 

Recently, the phenomenal Havard history professor Jill Lepore wrote a review of a forthcoming book entitled Sorry, Sorry, Sorry: The Case for Good Apologies by Susan McCarthy and Marjorie Ingall. At and @SorryWatch, McCarthy and Ingall have been judging the adequacy of apologies and welcoming “suggestions for shaming” since 2012.

In her review, Lepore briefly traces the modern history of the apology. From 1665, she reproduces an apology for an unknown error: “I freely confesse, that I spake many words rashly, foolishly, & unadvisedly, of wch I am ashamed, & repent me of them, & desire all that tooke offence to forgive me.” She references Dave Chappelle, Alex Jones, and others for more recent events. And she offers an interesting contrast between a fictional character’s response to a prior forced apology: “I’m not some weak-kneed f****** crybaby that goes around f****** apologizing all the time,” he said, seething. “I’m done. I am done apologizing” with the actor’s real-life apology for an assault he committed: “You mess up. You own it. You learn from it.” 

Ultimately, Lepore comes to this conclusion about our current state of affairs: “some very angry people very loudly demanding apologies while other very angry people demand the denunciation of the people who are demanding apologies. The fracture widens and hardens—fanatic, schismatic, idiotic. But another way of thinking about what a culture of forced, performed remorse has wrought is not, or not only, that it has elevated wrath and loathing but that it has demeaned sorrow, grief, and consolation. No apology can cover that crime, nor mend that loss.”

Me? I’m sorry for stuff I haven’t even done yet.

Judges still handing out jail sentences in Varsity Blues case even though they may very well get reversed

Yesterday, a former Yale women's soccer coach got 5 months:

Prosecutors said Meredith from 2015 and 2018 accepted $860,000 from Singer in exchange for designating the children of wealthy parents as soccer recruits or attempting to facilitate their admission to New Haven, Connecticut-based Yale by other means.

Separately, Meredith also agreed to accept a $450,000 bribe directly from a California businessman without Singer's involvement to help his daughter gain admission.

But it's not clear that the government's theory of fraud will withstand scrutiny in the First Circuit:

A federal appeals court on Monday questioned whether two wealthy fathers convicted in the first "Varsity Blues" college admissions scandal trial were prejudiced by the introduction of evidence about misconduct by other parents they did not know.

During oral arguments, members of a three-judge panel of the 1st U.S. Circuit Court of Appeals probed what proof existed to establish former casino executive Gamal Aziz and private equity firm founder John Wilson agreed to participate in a sprawling, nationwide conspiracy.

"Maybe there's evidence of a nationwide conspiracy," U.S. Circuit Judge David Barron told a prosecutor. "You still have to prove evidence that these defendants agreed to be in it."

Fifty-three people have pleaded guilty. One parent was acquitted in June, while a coach who was convicted of accepting bribes recently won a new trial.

Prosecutors alleged that Aziz — a former Wynn Resorts Ltd executive also known as Gamal Abdelaziz — in 2018 paid $300,000 to secure his daughter's admission to the University of Southern California as a basketball recruit.

Prosecutors said Wilson paid $220,000 in 2014 to have his son falsely designated a USC water polo recruit and later in 2018 paid another $1 million to try to secure spots for his twin daughters at Stanford and Harvard universities.

Think about that -- 53 people pleaded guilty... that means defense lawyers, prosecutors, and judges went along with a questionable theory of crime simply because it was too risky to fight.  Our system is in trouble. 

Wednesday, November 09, 2022

Schools and courts closed Wednesday (UPDATED)

Nicole is coming. Mag court postponed till Thursday. Stay safe. 

UPDATED -- Federal courts back open in Miami on Thursday, but closed in Broward in Palm Beach.

Tuesday, November 08, 2022

Eleventh Circuit to Opine on Court's Use of 1789 law

By John R. Byrne

Ever seen a judge invoke the All Writs Act? Doesn't happen everyday. And now the Eleventh Circuit is going to weigh in on its use in the 3M MDL pending in the NDFLA. 

3M is fighting claims that it made defective earplugs that caused hearing loss. It’s been hit with some substantial jury verdicts in bellwether trials. Last summer, its subsidiary, Aearo Technologies, filed for bankruptcy, looking to stop other cases against 3M from going to trial. 3M has its own bankruptcy webpage and link to its pretty aggressive opening brief challenging the MDL proceedings here.

Judge Rodgers, presiding over the MDL, wasn’t having it. Citing the bankruptcy proceeding as an “undeniable” “threat to this court’s jurisdiction,” she enjoined 3M from attempting to freeze the MDL litigation and attacking her prior orders. And she did it using the ancient (and rarely invoked) All Writ’s Act, part of the Judicial Act of 1789. That Act allows federal courts to “issue all writs necessary or appropriate” to safeguard the integrity of ongoing proceedings and potential future proceedings before them, and to protect or effectuate their prior orders and judgments. There was good precedent allowing a District Judge to enjoin a litigant from challenging certain orders in bankruptcy court. This might be something civil and criminal litigants can use more often here in our district. 

But a few weeks back the Eleventh Circuit stayed Judge Rodgers’s order without comment. (SDFLA's own Judge Barbara Lagoa was on that Motion Panel.) It'll be interesting to see what the Eleventh Circuit does with this and if other judges in MDLs take advantage of the All Writs Act in connection with collateral proceedings. 

Judge Rodgers's order is below.

Monday, November 07, 2022

Dissents from denials from cert at SCOTUS

 There were some interesting dissents today at SCOTUS from denials of cert.  Professor Berman summarized the opinions here:

In Anthony v. Louisiana, Justice Sotomayor dissents from the denial of certiorari, joined by Justice Jackson, and her 15-page dissent concludes this way:

Our criminal justice system holds prosecutors to a high standard. The prosecutor is “the representative not of an ordinary party to a controversy, but of a sovereignty.” Berger, 295 U. S., at 88.  From that special role, “improper suggestions, insinuations, and, especially, assertions of personal knowledge are apt to carry much weight against the accused when they should properly carry none.” Ibid....

These principles demand careful scrutiny of the rare cases in which a prosecutor takes the stand as a sworn witness in a jury trial.  Because this case presents one of the most egregious instances of prosecutorial testimony amounting to prosecutorial misconduct, I respectfully dissent from the Court’s refusal to issue a summary reversal.

in In Khorrami v. Arizona, Justice Gorsuch dissents from the denial of certiorari (which was not joined by Justice Kavanaugh, though he did indicate he would grant the petition).  His 10-page dissent starts and concludes this way:

The State of Arizona convicted Ramin Khorrami of serious crimes before an 8-member jury.  On appeal, Mr. Khorrami sought a new trial, arguing that the Sixth and Fourteenth Amendments of the U.S. Constitution guarantee individuals like him a trial before 12 members of the community....

For almost all of this Nation’s history and centuries before that, the right to trial by jury for serious criminal offenses meant the right to a trial before 12 members of the community.  In 1970, this Court abandoned that ancient promise and enshrined in its place bad social science parading as law.  That mistake continues to undermine the integrity of the Nation’s judicial proceedings and deny the American people a liberty their predecessors long and justly considered inviolable.  Today’s case presented us with an opportunity to correct the error and admit what we know the law is and has always been.  Respectfully, we should have done just that.

In Chinn v. Shoop, Justice Jackson dissents from the denial of certiorari, joined by Justice Sotomayor, and her 2-page dissent starts and concludes this way:

This is a capital case involving a violation of Brady v. Maryland, 373 U.S. 83 (1963). There is no dispute that, during the capital trial of petitioner Davel Chinn, the State suppressed exculpatory evidence indicating that the State’s key witness, Marvin Washington, had an intellectual disability that may have affected Washington’s ability to remember, perceive fact from fiction, and testify accurately....

Because Chinn’s life is on the line, and given the substantial likelihood that the suppressed records would have changed the outcome at trial based on the Ohio courts’ own representations, see Harrington v. Richter, 562 U.S. 86, 112 (2011), I would summarily reverse to ensure that the Sixth Circuit conducts its materiality analysis under the proper standard.

Friday, November 04, 2022

Friday News & Notes

By John R. Byrne

Fun night at the Alfred I. DuPont building for the Federal Bar Association judicial reception and installation. Chief Judge Altonaga swore in Tal Lifshitz as FBA President. Nice speeches from him and outgoing FBA President Stephanie Casey.

For the football fans out there, the Washington Commanders may soon be up for sale. Maybe the reported Eastern District of Virginia USAO's criminal investigation of the team will drive down the price!

Thursday, November 03, 2022


Michael Caruso

As David's loyal readers know, this is a momentous year for the Supreme Court. The public's confidence in the Supreme Court is at a historic low, the Court's investigation of the Dobbs leak has not been resolved, and perhaps relatedly, there's been a significant push to force the Court to implement an ethics code. And the cases the Court will hear this year are noteworthy—affirmative action, voting rights, and the "independent state legislature doctrine," among others.

But because I'm not a very political person, I'm interested in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith. Warhol, of course, was a pioneer of American pop art. Lynn Goldsmith is a groundbreaking artist and photographer.

Both Warhol and Goldsmith have significant connections to music. Warhol worked with The Velvet Underground, Blondie, The Rolling Stones, and many more. Goldsmith was one of the first woman rock photographers. The Supreme Court's case is about their art colliding.

In 1981, Goldsmith took this photo of Prince.

In 1984, around the time Prince released “Purple Rain,” Vanity Fair hired Warhol to create an image to accompany an article titled “Purple Fame.” The magazine paid Ms. Goldsmith $400 to license the portrait. In a series of 16 images, Warhol altered the photograph in various ways, notably by cropping and coloring it to create what his foundation’s lawyers described as “a flat, impersonal, disembodied, masklike appearance. Vanity Fair ran this image.

Litigation followed, focused on whether Warhol had transformed Goldsmith’s photograph. The Supreme Court has said, in a case involving Miami's own Luther Luke Campbell, a work is transformative if it “adds something new, with a further purpose or different character, altering the first with new expression, meaning or message.”

The district court judge found that the Warhol series is "transformative" because it conveys a different message from the original and thus is "fair use" under the Copyright Act. But a three-judge panel of the Second Circuit Court of Appeals disagreed, declaring that judges "should not assume the role of art critic and seek to ascertain ... the meaning of the works at issue."

At the Supreme Court, there was a lively debate filled with pop culture references and marked by unusual laughter as justices invoked the Lord of the Rings books and movies, the Syracuse basketball team, and Cheerios cereal to illustrate their points. When Justice Thomas mentioned in passing that he had been a fan of Prince in the 1980s, Justice Kagan quipped: “No longer?” “Only on Thursday nights,” Thomas responded. (Party like it's 1789?).

Although this case may not impact our democracy, the outcome could shift the law to favor more control by the original artist, but doing that could also inhibit artists and other content creators who build on existing work. Stay tuned.

And if you're interested in Prince's music, here's a clip of an incendiary performance at the Rock and Roll Hall of Fame (he casually strolls out at 3:27 to light up the hall).

And as an update to a previous post, Brittney Griner has been held in a Russian jail for 259 days and counting.