Wednesday, January 20, 2016

District Court Incorrectly Calculated Loss, But Harmless Error Because Court Would Have Imposed 30-month Sentence Regardless

U.S. v. Snowden, 806 F.3d 1030 (11/27/15) (Col.) (Published) - An appropriator of computer information, Mr. Snowden [no, not that Snowden] apparently wins the guideline battle, but definitely loses the sentencing war. Mr. Snowden quit his job with a physician-staffing service and took the company's proprietary data with him to help him compete with the company. Things didn't quite work out for Mr. Snowden. He didn't steal any customers. The only loss to the company was $25,000 in attorney fees. Nonetheless, the district court counted the actual loss under the guidelines as more than 1.5 million dollars because that's what it cost to develop the database Mr. Snowden stole. The court relied on an application note that says: "in calculating loss, a court may take into account, in the case of proprietary information, the cost of developing that information." The 10th strongly suggests the district court was wrong.

The 10th says, while the note allows for taking into account the development costs, it does not authorize substituting those costs for actual loss, which were only the attorney fees in this case. With the enhancement, the range was 41 to 51 months. Without the enhancement, the range was 8 to 14 months. The district court varied down to 30 months. But the district court added that, if it incorrectly calculated the guidelines, the sentence would still be 30 months based on the ยง 3553(a) factors. The 10th finds any error harmless, even though the 30-month sentence would be an upward variance from the apparently correct range. The 10th notes the district court spent a great deal of time [6 hour hearing, briefs, proposed findings] and reflection [the court said it devoted "many hours" to reviewing the submissions] on the sentence. Plus, the court detailed what factors justified the 30 months. In sum, the 10th finds, "the court made it utterly clear the specifics of Mr. Snowden's offense overrode the intricacies of the guideline calculations." It might have been better, the 10th observes, if the district court had specifically said it would have varied upward to impose the same sentence, even if the correct range was 8 to 14 months. But that conclusion was implicit in what the court did say. It was not a "boilerplate remark to avoid reversal."