Second Circuit
On Thursday, in United States v. Schulman, the Circuit affirmed defendant’s securities fraud
convictions. The Circuit rejected his claim that EDNY Judge Joan Azrack erroneously denied his
Rule 29 motion to vacate his convictions on the ground that the government had introduced
insufficient evidence to establish his criminal intent. The Circuit found that the jury was not
required to credit defendant’s claim that he’d intended only to brag when he tipped his friend
and financial advisor about an upcoming merger. The evidence also permitted the jury to find
beyond a reasonable doubt that defendant intended his communication to lead to trading in
securities of the company in question.
The jury decided that defendant engaged in a conspiracy to trade in the securities of King
Pharmaceuticals, using material, non‐public information that he obtained through his
representation of King while he was a partner at the law firm of Hunton & Williams. Defendant’s
sole claim on appeal was that the government adduced insufficient evidence at trial of his
criminal intent.
Defendant’s arguments focused on a comment he says that he made to his friend and financial
advisor Tibor Klein: “[I]t would be nice to be king for a day.” Defendant conceded that, in making
this comment, he “disclosed non‐public information to a friend who was also his financial
advisor.” But defendant contended that his comment was merely a joke, or “a boastful,
imprudent” remark. He contended that no reasonable jury could conclude beyond a reasonable
doubt—in light of his testimony that he communicated nothing more about King—that he
disclosed this information with the expectation that Klein would trade on it.
The Circuit disagreed. In its view, the jury was entitled to discredit defendant’s testimony in a
prior deposition that he intended only to brag and that he told Klein nothing about King’s
ongoing merger talks. Extensive circumstantial evidence supported an inference that defendant
communicated more to Klein than that “it would be nice to be king for a day” and that defendant
expected Klein to use the non‐public information he shared with him to trade in King securities.
Last Friday, in Shabazz v. United States, the Circuit reversed the Connecticut District
Court’s grant of defendant’s § 2255 petition. The Circuit found that Connecticut’s basic robbery
offense is a violent felony as that term is used in the ACCA, because it has as an essential
element the “use or threatened use of force” that is capable of causing pain or injury.
In 2004, Defendant was convicted of unlawful possession of a firearm by a felon. Leading up to
that conviction, Defendant had four prior Connecticut state-law robbery convictions, at least
three of which were violent felonies as that term had been defined by the Supreme Court for
purposes of the ACCA. This mandated a 15-year minimum sentence.
In sentencing Defendant, the district court found that the ACCA minimum applied, and
sentenced him to 235 months’ imprisonment.
Based on subsequent decisions of the Supreme Court and the Second Circuit, Defendant
argued in a habeas petition that the ACCA minimum no longer applied because a person can be
convicted of robbery in Connecticut without the use of force capable of causing pain or injury.
The district court agreed, granted the habeas, vacated the sentence and resentenced him to
120 months.
The Circuit reversed.
The basic definition of robbery in Connecticut is contained in § 53a-133, which states that a
person commits a robbery when, in the course of committing a larceny, “he uses or threatens
the immediate use of physical force upon another person for the purpose of (1) preventing or
overcoming resistance to the taking of the property or to the retention thereof immediately after
the taking or (2) compelling the owner of such property or another person to deliver up the
property or to engage in other conduct which aids in the commission of the larceny.”
In Taylor v. United States, 495 U.S. 575, 600 (1990), the Supreme Court held that courts must
apply a “categorical approach” looking not at the facts of the defendant’s prior crimes, but at the
statute under which he was convicted to determine whether the essential elements of that
statute bring the crime within the ACCA requirements. The ACCA contained three categories of
violent felonies, those falling under the “Force Clause,” those falling under the “Enumerated
Felonies Clause,” and those falling under the “Residual Clause.”
Here, the district court had not specified which clause it had found applied.
In Johnson v. United States, 153 S.Ct. 2551 (2015) the Supreme Court struck down the ACCA’s
residual clause finding that it was unconstitutionally vague.
After Johnson, defendant brought this petition, arguing that his sentence must be set aside
because, to the extent that the application of ACCA might have depended on the Residual
Clause, that clause has since been invalidated, and to the extent that it might have depended
on the Force Clause, that would have been improper because the crime of robbery as defined
by § 53a‐133 can be committed by use of force that is not sufficient to cause pain or injury.
The Circuit disagreed, finding that the crime of robbery qualified under the Force Clause. Even
the use or threat of minimal force in aid of the theft of that person’s property is inherently
capable of causing pain or injury. The Circuit found that “face‐to‐face circumstances inherently
carry an implicit threat of escalation, perhaps because of the victim’s predictable reaction,
capable of resulting in physical harm. Therefore, even such minimal force, when employed in a
taking of property from the person of another, inherently implicates a realistic threat of causing
pain or injury, so that the crime qualifies as an ACCA predicate.”
The Circuit reversed the grant of the petition and reinstated the original sentence.
On Monday, in United States v. Smith, in a summary order, the Circuit largely affirmed
defendant’s NDNY possession of child pornography convictions following his guilty plea, but
found the record insufficiently developed to determine whether the police unconstitutionally
delayed their application for a search warrant and remanded for further factfinding on that
issue.
Defendant was found by a state trooper passed out in the driver’s seat of a car on the side of an
upstate road. The car was running and still in gear. Through the window, the officer could see a
tablet computer in the passenger’s seat. During a search of the car to find the defendant’s
identification or car registration, the trooper saw an image on the tablet that he believed to be
child pornography. He seized the tablet, which was kept in police custody. More than a month
later, a state police investigator applied for a warrant, which he got, and which yielded videos
and images of child pornography. Based on that evidence, police obtained a further warrant to
search defendant’s house, which uncovered further child pornography.
Defendant moved to suppress the evidence found on the tablet on a number of grounds, most
of which the Circuit rejected. But the Circuit found that defendant’s challenge to the timeliness of
the application to search the tablet might have merit. The district court had summarily accepted
the officer’s explanation for the 31-day delay in seeking the warrant, finding that it was not
unreasonable. The officer had stated that he covered a large geographic area, and had 15 to 20
other ongoing investigations.
The Circuit noted that there was no evidence indicating whether that was an unusually large
caseload or if any of those other cases were of a significantly higher priority. Also, the Circuit did
not know whether the police had reason to believe that the seizure of the tablet would deprive
defendant of access to any important personal information. Under these circumstances, the
Circuit held that it was unable to make the necessary “fact-bound determination” as to its
timeliness on the record before it. It therefore remanded, pursuant to United States v. Jacobson,
15 F.3d 19, 22 (2d Cir. 1994), directing the district court to conduct the totality-of-thecircumstances
inquiry necessary to determine whether the state’s actions were reasonable.”
On Monday, in Gupta v. United States, the Circuit, in a summary order, affirmed SDNY Judge
Jed Rakoff’s denial of defendant’s § 2255 motion to vacate his insider trading convictions on the
ground that the court’s instructions of the “personal benefit” component of an insider trading
offense were legally invalid in light of the Circuit’s decision in United States v. Newman, 773 F.
3d 438 (2d Cir. 2014). The Circuit found that defendant’s claims were procedurally defaulted
because he had not raised them on direct appeal, and, in any event the instructions were not
inconsistent with Newman.
The Circuit found that defendant could not show cause to excuse the procedural default. The
Circuit cited its November 7, 2018 decision in Whitman v. United States, another insider trading
case in which the direct appeal was decided shortly before its decision in Newman—where the
defendant had objected at trial to the court’s personal benefit instruction but did not pursue that
objection on appeal. The Circuit had concluded in Whitman that defendant had not shown cause
for his failure to challenge the personal benefit instruction on appeal, because, if other counsel
were able to raise the argument, including Whitman’s own former attorney, the same argument
was available to his appellate counsel. That Whitman was decided by nonprecedential summary
order did not change the result because such an order did not mean that the court was free to
rule differently in a different case.
The Circuit also found that defendant had not shown prejudice. i.e., that the personal benefit
instructions he challenged were so flawed as to deny him due process. Among other things, the
Circuit found that the district court’s instruction that the benefit to defendant need not have been
financial or tangible, although contrary to the formulation given in Newman, could not have
constituted prejudice to defendant because it was correct: “[t]o the extent the Second Circuit
held that the tipper must also receive something of a “pecuniary or similarly valuable nature in
exchange for a gift to family or friends, Newman, 773 F.3d, at 452, . . . this requirement is
inconsistent with Dirks.” Salman v. United States, 137 S.Ct. 420 (2016).
On Thursday, in United States v. Galanis, in a summary order, the
Circuit remanded defendant’s securities fraud convictions before SDNY Judges Kevin P. Castel
and Ronnie Abrams, finding that further proceedings were necessary to assess defendant’s
claims that he’d received ineffective assistance of counsel in the proceedings leading up to his
guilty pleas.
In September 2015, defendant was indicted on nine counts in SDNY in the “Gerova Proceeding”
before Judge Castel. Defendant was represented by an attorney from a California law firm,
MPBF. In May 2016, while the Gerova Proceeding was pending, defendant was separately
indicted on four counts in the “Wakpamni Proceeding” before Judge Abrams. A few months later,
Judge Abrams held a status conference in the Wakpamni Proceeding, at which point defendant
was not represented by counsel in that case. MPBF deemed the Wakpamni Proceeding to be
beyond the scope of their representation. A NY attorney, LS appeared at the status conference,
pursuant to the Criminal Justice Act, on defendant’s behalf, but the court declined to appoint her
as counsel at that time, apparently because defendant had not shown that he qualified for CJA
counsel. Judge Abrams instead continued the Wakpamni Proceeding for one month to allow
defendant to retain counsel or make an application for court‐appointed counsel.
One week after that status conference in the Wakpamni Proceeding, the government extended
two plea offers to defendant through MPBF, his counsel in the Gerova Proceeding. The first
plea offer (the ʺGerova Offerʺ) required defendant to plead guilty to four counts of the Gerova
indictment, in exchange for the governmentʹs agreement to dismiss the remaining counts
against him in that proceeding. The second plea offer (the ʺGerova‐Wakpamni Offerʺ) required
defendant to plead guilty to a superseding information to be filed at the time of his guilty plea,
which would contain seven counts: the same four counts in the Gerova Offer, as well as three
counts of the Wakpamni indictment. In exchange, the government would dismiss the remaining
counts in both the Gerova and Wakpamni Proceedings. The government knew at the time that
defendant was unrepresented in the Wakpamni Proceeding.
Two days later, defendant pleaded guilty pursuant to the Gerova Offer. The Gerova-Wakpamni
Offer was not mentioned. A few weeks later, Judge Abrams appointed LS to be CJA counsel in
the Wakpamni matter. In December 2016, the government extended a plea offer in the
Wakpamni case—the ʺWakpamni Offerʺ—through attorney LS, which required defendant to
plead guilty to the same three Wakpamni counts contemplated in the Gerova‐Wakpamni Offer.
In exchange, the government agreed to dismiss the remaining count against him in the
Wakpamni indictment. On January 19, 2017, defendant pleaded guilty pursuant to the
Wakpamni Offer.
On February 15, 2017, defendant was sentenced in the Gerova Proceeding to 135 months of
incarceration. Although the Guidelines range stipulated to in the Gerova Offer was 121 to 151
months, the Guidelines range applicable at the time of sentencing was 135 to 168 months,
because defendantʹs intervening plea in the Wakpamni Proceeding raised his criminal history
category from II to III. On August 11, 2017, defendant was sentenced in the Wakpamni
Proceeding to 188 monthsʹ imprisonment, 60 months of which were to be served consecutively
to the 135‐month sentence in the Gerova Proceeding. The Guidelines range stipulated to in the
Wakpamni Offer was 188 to 235 months, reflecting a criminal history category of III, rather than
II, due to defendantʹs guilty plea in the Gerova Proceeding.
Although the district court in both proceedings sentenced defendant to the low end of the
respective Guidelines range, his effective combined sentence was 195 months. In contrast, the
joint Gerova‐Wakpamni Offer had a stipulated Guidelines range of 168 to 210 monthsʹ
imprisonment.
Defendant timely appealed both convictions, and filed a pro se motion to vacate his conviction in
the Gerova proceeding alleging ineffective assistance.
The Circuit was troubled by defendant’s claims. Although MPBF discussed the Gerova plea offer
with defendant, counsel did not address the merits of accepting the second, joint Gerova-
Wakpamni plea offer. The failure to accept both offers at that time led to a longer sentence.
The Circuit remanded for further factfinding to give defendant’s counsel an opportunity to be
heard on whether he’d properly counseled defendant.
Appellate Division, First Department
On Thursday, in People v. Watson, the First Department reversed defendant’s Bronx County
second-degree assault conviction, finding that the prosecution had not established, at a
previously-ordered Batson hearing, that it had exercised peremptory challenges against all
African American male prospective jurors in a non-discriminatory manner.
In a previous decision, 141 A.D.3d 23 (2016), the First Department found that the wholesale
exclusion of African American male prospective jurors gave rise to a mandatory inference of
discrimination at the first step of the Batsoninquiry, noting that the prosecutor chose not to strike
similarly-situated non-African American jurors who expressed skepticism about the credibility of
police officers. At step two of the inquiry, the First Department had found that the prosecutor’s
putatively race neutral explanations could not be assessed and resolved as a matter of law
given the ambiguities and lack of clarity in the record. Among other things, there was no record
evidence concerning any alleged negative encounters between two of the three jurors struck
and the police. A so-called “unnamed juror” expressed having had such encounters; however,
those comments could not be definitively attributed to any of the venire persons.
At the Batson reconstruction hearing, a different ADA than the one who conducted the jury
selection appeared for the People. The People did not turn over the notes of the ADA who did
conduct the jury selection. Nonetheless, the trial court proceeded to solicit and to rely on
statements from the new ADA with respect to why one prospective juror had been struck.
The First Department held that the reconstruction hearing failed to satisfy the requirements
of Batson. No testimony or notes were offered at this Batson reconstruction hearing. The ADA
who conducted the voir dire did not appear and his notes were never disclosed. The ADA at the
reconstruction hearing could only speculate as to the motives of his colleague. This procedure
was insufficient.
In People v. Allende the First Department reversed defendant’s New York County first-degree
robbery conviction, finding that the evidence was insufficient to establish that defendant
displayed what appeared to be a firearm.
The First Department found that, although an eyewitness saw the display of what appeared to
be a firearm, the complainant did not.
Appellate Division, Second Department
On Wednesday, in People v. Alexander, the Second Department reversed defendant’s Queens
County manslaughter conviction, finding that Justice Lasak should not have granted the
prosecutor’s peremptory challenge to a prospective black juror without first determining whether
the prosecutor had sufficient race-neutral explanations for the challenge.
During jury selection, the defendant alleged that the prosecutor was exercising a peremptory
challenge to a potential juror based solely on the potential juror’s race. After the Supreme Court
found that the defendant made a prima facie showing that the prosecutor was exercising her
peremptory challenges in a discriminatory manner, the prosecutor stated that she believed this
potential juror was too young and inexperienced to serve on a murder trial. Following additional
questioning of the prospective juror, the court determined that the potential juror seemed to
have difficulty understanding the questions posed to him, that he appeared to have “a glazedeye
look,” and that his “ability to communicate is somewhat impaired.” The court then allowed
the prosecutor to exercise a peremptory challenge against the potential juror, deeming the
peremptory challenge to be not “in any way based on any discrimination.” But the court never
provided a ruling on the defendant’s initial Batson challenge, relating to the prosecutor’s
contention that the juror was too young and inexperienced to serve.
The Second Department found that the trial court failed in its duty to determine whether the
prosecutor’s race-neutral explanations were credible. Because it did not satisfactorily determine
whether the prosecutor provided legitimate nonpretextual, race-neutral explanations for the
exercise of her peremptory challenges, it vacated the conviction ordered a new trial.
On Wednesday, in People v. Andre, the Second Department vacated, in the interest of justice,
the sentences imposed following defendant’s guilty pleas under three indictments to seconddegree
burglary, attempted second-degree burglary, and fourth degree grand larceny. AD2
found that the court should not have imposed enhanced sentences following defendant’s failure
to appear on the scheduled sentencing date, where it was not an express condition of the plea
that he return on the scheduled date.
The defendant entered three guilty pleas. He was promised that the sentences imposed would
run concurrently. The defendant did not appear in court on the scheduled sentencing date.
Subsequently, in rendering the judgments of conviction, the Supreme Court directed, inter alia,
the sentence imposed on the second judgment to run consecutively to the sentence imposed on
the first judgment.
The Second Department found that because the record did not establish that the sentencing
court imposed as a condition on the pleas and sentencing commitments that the defendant
return on the scheduled sentencing date, the court should not have imposed enhanced
sentences based on the defendant’s violation of this purported condition.
Regards,
Edward V. Sapone