Minutes from December 15, 1999

Minutes of the December 15, 1999,
United States Sentencing Commission
Business Meeting

The meeting was called to order by Chair Diana E. Murphy at 10:00 a.m. in the Commissioners' Conference room. The following commissioners and staff participated:

Diana E. Murphy, Chair
Ruben Castillo, Vice Chair
William Sessions, Vice Chair
John R. Steer, Vice Chair
Sterling Johnson, Jr., Commissioner
Joe Kendall, Commissioner
Michael O'Neill, Commissioner
Michael Gaines, Ex Officio Commissioner
Laird C. Kirkpatrick, Ex Officio Commissioner
Tim McGrath, Interim Staff Director
A. Donald Purdy, Acting General Counsel
Kenneth Cohen, Director, Office of Legislative and Governmental Affairs
Pamela Montgomery, Deputy General Counsel

Chair Murphy convened the first public meeting since the President signed the commissions of seven new members by introducing the new commissioners, as well as by making introductory remarks. Chair Murphy announced that the Commission had published on December 2 its priorities for the current amendment cycle and reiterated that because of the constrained timeframe, the Commission's agenda would be limited to responding to legislative directives and other high priority crime legislation, as well as resolving a limited number of circuit conflicts. Chair Murphy then outlined two action items for the meeting: voting to publish options for implementing the NET Act directive and voting to publish for comment repromulgation of telemarketing fraud amendments as permanent amendments.

Interim Staff Director McGrath outlined the agenda for today's meeting and mentioned that the public would be invited to participate at the appropriate time.

Chair Murphy mentioned that the Commission met with the Criminal Law Committee on December 14 to discuss the Commission's agenda and to reestablish a working relationship and open communication with the Committee. She stated that after today's staff briefing on proposed options to implement the NET Act, the Commission would begin consideration of such proposed amendment options. Chair Murphy also stated that the Commission would publish these proposed options in the Federal Register for comment even though the Commission is not required to do so because of the emergency amendment authority status.

Mr. Cohen briefed the Commission on the No Electronic Theft Act. He briefly discussed the history of the directive's origin as well as proposed guideline amendment options in response to this directive. Additionally, Mr. Cohen stated that the Commission was required to act by April 6, 2000.

Acting General Counsel Purdy briefed the Commission on the telemarketing fraud amendments adopted during the last amendment cycle and under emergency amendment authority. He stated that Mary Didier chaired the Commission's efforts on telemarketing fraud these past six years, with assistance from Kevin Blackwell, Paula Desio, and Krista Rubin during various times.

Amendment: §2B5.3 Criminal Infringement of Copyright or Trademark

This amendment proposes three options in response to the No Electronic Theft Act of 1997 (Pub. L. No. 105-147). Option One provides an enhancement that uses the retail value of infringed items in all intellectual property cases except for violations of 18 U.S.C. § 2319A. Option Two does the same, but includes a two-level reduction if the infringing items are "greatly discounted merchandise." For purposes of defining "greatly discounted merchandise," the Commission has presented a range of possibilities (from 10% to 50% of the retail value of the infringed items) for public comment. Option Three includes an enhancement that would use the retail value if (1) the infringing and the infringed items are substantially indistinguishable or identical, (2) the retail value of the infringing item is difficult or impossible to determine, (3) the offense involves illegal cable transmissions, and (4) the government shows that the retail value of infringed item is a more accurate assessment of the pecuniary harm. This option would use the retail value of the infringing item for all other cases.

Motion made by Commissioner Steer to publish in the Federal Register for a thirty-day comment period the revised proposed amendment options, the Issue for Comment on Option Three, and the addition in the discussion of Option Two on price differential and in its application note 1 of 50%; seconded by Commissioner O'Neill. At the request of the Department of Justice, Commissioner Steer amended his motion to delete in Option Two the language stating that the Department of Justice provided no rationale for using the 10% figure as the trigger mechanism for the offense level reduction. Commissioner O'Neill accepted this amendment and requested the Department to provide a written rationale for 10% during the comment period. Passed unanimously.

Amendment: §2F1.1 Fraud and Deceit; §3A1.1 Hate Crime Motivation or Vulnerable Victim

This amendment would repromulgate as a permanent amendment the emergency telemarketing fraud amendment adopted by the Commission on September 23, 1999. It implements in a broader form the directives to the Commission in section 6 of the Telemarketing Fraud Prevention Act of 1998 (Pub. L. No. 105-184). This amendment broadens the "sophisticated concealment" enhancement to cover "sophisticated means" of executing or concealing a fraud offense. In addition, it increases the enhancement under §3A1.1 for offenses that impact a large number of vulnerable victims.

Motion made by Commissioner Castillo to repromulgate as a permanent amendment the emergency telemarketing fraud amendment adopted by the Commission on September 23, 1999; seconded by Commissioner Sessions. Additionally, Commissioner Steer requested that the Commission continue to track the application of "large number of vulnerable victims" for possible future refinement. Passed unanimously.

Motion made by Commissioner Steer to publish in the Federal Register for comment in conjunction with the NET Act notice, with a deadline of March 10, 2000; seconded by Commissioner Kendall. Passed unanimously.

Deputy General Counsel Montgomery briefed the Commission on unresolved circuit conflicts relating to guideline amendments. The issues covered aberrant behavior departures, marijuana plants, drug sales in protected locations, fraudulent representations, bankruptcy frauds, post-conviction rehabilitation departures, dismissed/uncharged conduct, and possession/use of a firearm in another felony.

Interim Staff Director McGrath thanked staff for its efforts in providing preparation assistance during the time the Commission was without commissioners and stated that he thought Commission staff was well prepared. Chair Murphy concurred.

Chair Murphy adjourned the meeting at 11:17 a.m.