Seventh Circuit Week in Review: Corporate Criminal Liability, Reconsideration of Suppression Rulings, and More

The Seventh Circuit had four new opinions in criminal cases this week.  The cases addressed the mens rea requirements for corporate criminal liability, procedural aspects of suppression hearings, child pornography sentencing, and conditional guilty pleas.  Taking the cases in that order:

In United States v. L.E. Myers Co. (No. 07-2464), the defendant corporation was convicted of criminal OSHA violations in connection with the electrocution death of one its employees.  The Seventh Circuit (per Judge Sykes) reversed and remanded for a new trial in light of erroneous jury instructions.  The errors related to mens rea issues.  Myers was convicted under a statute that bases liability on the knowing creation of a hazardous condition in knowing violation of an OSHA requirement. 

The problem is that a corporation, as a legal construct, cannot really know anything; the only way a corporation knows something is to the extent the law is willing to impute the knowledge of particular employees to the corporation.  Seventh Circuit precedent indicated that “corporations ‘know’ what their employees who are responsible for an aspect of the business know.”  More specifically, the corporation was said to know what an employee knows if the employee has a duty to report that knowledge to someone higher up in the corporation.

In light of this precedent, the Seventh Circuit determined that the knowledge instruction in Myers was too broad.  The instruction permitted the jury to convict based on any knowledge obtained by any employee within the scope of his or her employment, regardless of whether there was a duty to report the knowledge up the corporate ladder.

The trial court also erroenously gave an “ostrich” instruction.  Such an instruction permits conviction where a defendant has “affirmatively avoided” obtaining information that would otherwise provide a basis for liability.  The Seventh Circuit determined that the instruction should not have been given because there was no evidence that Myers affirmatively acted to avoid learning the truth: “there is evidence of deliberate indifference to the facts, but there is no evidence of deliberate avoidance, and the latter is required for the ostrich instruction.”

In United States v. Ozuna (No. 07-2480), the defendant was convicted of drug trafficking based on the discovery of cocaine in his truck by DEA agents.  Ozuna argued that the search of his truck violated the Fourth Amendment.  At a suppression hearing, the government relied on a written consent to the search that was allegedly signed by Ozuna.  The defendant, however, denied the signature was his, and the district court initially granted his motion to suppress.  Following this decision, the government requested reconsideration based on a new handwriting analysis of the signature.  At a second suppression hearing, handwriting experts testified for both the government and the defense, and the court ultimately reversed its earlier suppression ruling.  On appeal, Ozuna argued that the government should not have been given a second hearing and that the court should have performed a Daubert analysis regarding scientific reliability before admitting the testimony of the government’s handwriting expert.

The Seventh Circuit (per Judge Kanne) affirmed.  The court acknowledged that at least three other circuits impose special requirements for the government to justify a second hearing on suppression.  (Such a standard would have been hard for the government to satisfy in Ozuna, as there was no apparent reason why the government could not have performed a handwriting analysis before the first suppression hearing.)  The Seventh Circuit, however, joined two other circuits that leave the matter more squarely within the discretion of the trial court.

Turning to the Daubert question, the Seventh Circuit held that the court need not conduct a special analysis of the reliability of scientific evidence in the context of a suppression hearing.  Daubert was intended to keep junk science from being presented to juries, but there is no jury at a suppression hearing.  It makes little sense to require a judge to act as a gatekeeper with respect to evidence that will be presented only to that judge.

In United States v. Huffstatler (No. 08-2622), the defendant was convicted of producing child pornography and given a sentence above that called for by the federal sentencing guidelines.  He appealed the sentence, arguing that the child pornography guidelines should not be followed because they were not the product of empirical research by the Sentencing Commission.  Although the child pornography guidelines do indeed reflect politics more than research (a topic covered in the most recent issue of the Federal Sentencing Reporter), and although sentencing judges are authorized to take such considerations into account under Kimbrough v. United States, 128 S. Ct. 558 (2007), Huffstatler’s argument was an odd one.  After all, the judge in his case did not follow the guidelines.  Huffstatler thus seemed to be advancing the facially dubious claim the because the child pornography guidelines are poorly designed, child pornography defendants must always get a sentence below the guidelines level.  Not surprisingly, the Seventh Circuit rejected this argument in a short per curiam opinion.

With uncertainty still surrounding whether sentencing judges may issue Kimbrough variances in child pornography cases, I imagine that many Seventh Circuit defense lawyers were concerned about Huffstatler presenting a challenge to the child pornography guidelines in such an unfavorable procedural and factual context.  In rejecting the proposition that the sentencing judge must vary downward in child pornography cases, the Seventh Circuit might have (intentionally or unintentionally) said things that would discourage sentencing judges from using their Kimbrough discretion in such cases.  It appears, however, that the Seventh Circuit was careful not to send such signals: “Even assuming that district courts may exercise their discretion based solely on policy disagreements with the child-exploitation guidelines (an issue we need not decide here), Huffstatler’s argument is without merit” (emphasis added). 

Indeed, there is even some language in the opinion that is helpful to defendants:

Huffstatler correctly submits that the child-pornography sentencing guidelines, U.S.S.G. §§ 2G2.1-.2, like the drug guidelines at issue in Kimbrough v. United States, 128 S. Ct. 558 (2007), are atypical in that they were not based on the Sentencing Commission’s nationwide empirical study of criminal sentencing.

Finally, in United States v. Kingcade (No. 08-2447), the Seventh Circuit considered whether the defendant properly preserved his Fourth Amendment issue for appeal notwithstanding his guilty plea.  Federal Rule of Criminal Procedure 11 permits defendants to enter conditional guilty pleas that preserve the ability to appeal particular rulings by the trial court.  Such a conditional plea must include a written agreement between the defendant and the government stating which issues are preserved.  Kingcade’s problem was that he and his attorney made several pretrial suppression motions, and the conditional plea agreement referenced a different set of pretrial rulings than the ones Kingcade actually pursued on appeal.  The Seventh Circuit (per Judge Kanne) cut him no slack.  The court relied on principles of contract law to determine the scope of the conditional plea agreement.  Because the court found no ambiguity in the language of the agreement, the court was unwilling to consider extrinsic evidence of any different intent than that which was expressed in the agreement.

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