Minutes from August 30, 2006

Minutes of the August 30, 2006
United States Sentencing Commission
Public Meeting

Chair Ricardo H. Hinojosa called the meeting to order at 10:06 a.m. in the Commissioners’ Conference Room.

The following Commissioners were present:

· Judge Ricardo H. Hinojosa, Chair
· Judge Ruben Castillo, Vice Chair
· John R. Steer, Vice Chair
· Michael E. Horowitz, Commissioner
· Beryl Howell, Commissioner
· Edward F. Reilly, Jr., Commissioner Ex Officio
· Michael Elston, Commissioner Ex Officio

The following staff participated in the meeting:

· Judith Sheon, Staff Director
· Paula Desio, Deputy General Counsel, Office of the General Counsel

Chair Hinojosa recognized Jon M. Sands, Chair, Federal Defender Sentencing Guidelines Committee, and thanked him and the Federal Public and Community Defenders for their presence at the meeting. The Chair stated that the Commission is always interested in working with the Federal Defenders and all others interested in the federal criminal justice system. The Chair announced that he had no report to make and called on the Staff Director, Ms. Sheon, for her report. The Staff Director reported that the Commission’s latest data on post-Booker sentencing practices will be posted to the Commission’s website later in the day. The data cover the first three quarters of fiscal year 2006. She thanked the staff for its work in this regard.

The Chair called for a motion to adopt the minutes of the public meetings of April 5, April 28, and May 15, 2006. Commissioner Howell made the motion to adopt the minutes of the three meetings, with Vice Chair Steer seconding the motion. Hearing no further discussion, the Chair called for a vote. The motion was adopted by a unanimous vote.

The Chair called on Ms. Desio to inform the Commission on a possible vote to promulgate the various technical and conforming amendments to execute properly the amendments submitted to Congress on May 1, 2006. Ms. Desio stated that the proposed amendments (see attached Exhibit A) conform guideline references in the commentary of three guidelines and add a heading to an application note.

Ms. Desio stated that a motion to promulgate said amendments was in order, with an effective date of November 1, 2006, and with the staff authorized to make technical and conforming changes, if needed.

The Chair asked if there was a motion to promulgate the proposed technical and conforming amendments. Vice Chair Castillo made such a motion, with Commissioner Horowitz seconding the motion. Hearing no further discussion, the Chair called for a vote. The motion was adopted by a unanimous vote.

The Chair called on Ms. Desio to inform the Commission on a possible vote to promulgate an emergency amendment on intellectual property. Ms. Desio stated that the proposed amendment (see attached Exhibit B) addresses the emergency, 180-day directive in section 1(c) of the Stop Counterfeiting in Manufactured Goods Act, Pub. L. 109–181. The deadline for promulgating an amendment under the directive is September 12, 2006. The directive provides in part that the Commission shall review, and if appropriate, amend the federal sentencing guidelines and policy statements applicable to persons convicted of any offense under section 2318 or 2320 of title 18, United States Code.

The proposed amendment adds subdivision (vii) to Application Note 2(A) of §2B5.3 (Criminal Infringement of Copyright or Trademark) to provide that the infringement amount is based on the retail value of the infringed item in a case under 18 U.S.C. § 2318 or § 2320 that involves a counterfeit label, patch, sticker, wrapper, badge, emblem, medallion, charm, box, container, can, case, hangtag, documentation, or packaging of any type or nature (I) that has not been affixed to, or does not enclose or accompany a good or service; and (II) which, had it been so used, would appear to a reasonably informed purchaser to be affixed to, enclosing or accompanying an identifiable, genuine good or service. In such a case, the “infringed item” is the identifiable, genuine good or service.

Ms. Desio stated that a motion to promulgate said amendment was in order, with an effective date of September 12, 2006, and with the staff authorized to make technical and conforming changes, if needed.

The Chair asked if there was a motion to promulgate the proposed amendment. Vice Chair Steer made such a motion, with Vice Chair Castillo seconding the motion. The Chair asked if there was any discussion on the amendment. Vice Chair Steer noted for the record that the Commission has decided to address the core part of the directive as an emergency amendment. The Vice Chair stated that there is language in the directive that refers to another issue relating to circumvention devices. This issue and other related issues also are not being addressed within the scope of this emergency amendment. Vice Chair Steer explained that the Commission takes a careful and conservative approach to its emergency amendment authority because of the limited opportunity for public input and the issue of circumvention devices may not have been adequately covered by the emergency directive. Inasmuch as the statute requires the Commission to re-promulgate the emergency amendment during the regular amendment cycle as a possible permanent amendment, Vice Chair Steer noted that the Commission can consider the issues raised by the DOJ and any other interested parties at that time.

Ex officio Commissioner Elston stated the DOJ’s view that the emergency amendment was a good first step in addressing the issues raised in the directive. He also expressed appreciation for the work of the staff on the emergency amendment. He emphasized the DOJ’s hope that the Commission will address during the regular amendment cycle the other issues it raised, commenting that, while there are a small number of cases prosecuted in this area, setting the appropriate penalties is important to the protection of intellectual property in this country and, by extension, to the protection of American jobs. He concluded by expressing the DOJ’s willingness to work with the Commission during the regular amendment cycle to improve upon the first step that the emergency amendment represents. Hearing no further discussion, the Chair called for a vote. The motion was adopted by a unanimous vote.

The Chair stated that the Commission will be voting on its list of priorities in September. He stated that the Commission may not be able to complete all the work needed on some of the issues in just one amendment cycle. The Chair added that the Commission is very interested in comments or suggestions from any interested party on any of the topics the Commission may address. He noted that there is a deadline of September 1, 2006, for any further comments on the Commission’s proposed priority list. The Chair concluded by stating that the Commission always appreciates the comments it receives as it conducts its work within the authority provided to it by the Sentencing Reform Act.

The Chair asked if there was any further business before the Commission and hearing none, called for a motion to adjourn the meeting. Commissioner Horowitz made such a motion, with Commissioner Howell seconding the motion. The Chair called for a vote and the motion was adopted unanimously. The meeting was adjourned at 10:16 a.m.

EXHIBIT A

PROPOSED AMENDMENT: TECHNICAL AND CONFORMING AMENDMENTS
("SUMMER COMMENTARY")

Synopsis of Proposed Amendment: This proposed amendment makes various technical and conforming amendments in order to execute properly amendments submitted to the Congress on May 1, 2006, and that will become effective on November 1, 2006. Specifically, the proposed amendment conforms guideline references in the commentary of §§2B1.1 (Theft, Property Destruction, and Fraud), 2K2.1 (Unlawful Receipt, Possession, or Transportation of Firearms or Ammunition), and 2K2.4 (Use of Firearm, Armor-Piercing Ammunition, or Explosive During or in Relation to Certain Crimes) to redesignated guideline provisions and adds a heading to Application Note 3 in §2K2.1.

Proposed Amendment:

§2B1.1. Larceny, Embezzlement, and Other Forms of Theft; Offenses Involving Stolen Property; Property Damage or Destruction; Fraud and Deceit; Forgery; Offenses Involving Altered or Counterfeit Instruments Other than Counterfeit Bearer Obligations of the United States

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Commentary

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Application Notes:

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7. Application of Subsection (b)(8).—

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(C) Fraud in Contravention of Prior Judicial Order.—Subsection (b)(8)(C) provides an enhancement if the defendant commits a fraud in contravention of a prior, official judicial or administrative warning, in the form of an order, injunction, decree, or process, to take or not to take a specified action. A defendant who does not comply with such a prior, official judicial or administrative warning demonstrates aggravated criminal intent and deserves additional punishment. If it is established that an entity the defendant controlled was a party to the prior proceeding that resulted in the official judicial or administrative action, and the defendant had knowledge of that prior decree or order, this enhancement applies even if the defendant was not a specifically named party in that prior case. For example, a defendant whose business previously was enjoined from selling a dangerous product, but who nonetheless engaged in fraudulent conduct to sell the product, is subject to this enhancement. This enhancement does not apply if the same conduct resulted in an enhancement pursuant to a provision found elsewhere in the guidelines (e.g., a violation of a condition of release addressed in §2J1.7 §3C1.3 (Commission of Offense While on Release) or a violation of probation addressed in §4A1.1 (Criminal History Category)).

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§2K2.1. Unlawful Receipt, Possession, or Transportation of Firearms or Ammunition; Prohibited Transactions Involving Firearms or Ammunition

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Commentary
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Application Notes:

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3. Definition of "Prohibited Person".—For purposes of subsections (a)(4)(B) and (a)(6), "prohibited person" means any person described in 18 U.S.C. § 922(g) or § 922(n).

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11. Upward Departure Provisions.—An upward departure may be warranted in any of the following circumstances: (1) the number of firearms substantially exceeded 200; (2) the offense involved multiple National Firearms Act weapons (e.g., machineguns, destructive devices), military type assault rifles, non-detectable ("plastic") firearms (defined at 18 U.S.C. § 922(p)); (3) the offense involved large quantities of armor-piercing ammunition (defined at 18 U.S.C. § 921(a)(17)(B)); or (4) the offense posed a substantial risk of death or bodily injury to multiple individuals (see Application Note 87).

§2K2.4. Use of Firearm, Armor-Piercing Ammunition, or Explosive During or in Relation to Certain Crimes

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Commentary
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Application Notes:

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4. Weapon Enhancement.—

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If the explosive or weapon that was possessed, brandished, used, or discharged in the course of the underlying offense also results in a conviction that would subject the defendant to an enhancement under §2K1.3(b)(3) (pertaining to possession of explosive material in connection with another felony offense) or §2K2.1(b)(5)(6) (pertaining to possession of any firearm or ammunition in connection with another felony offense), do not apply that enhancement. A sentence under this guideline accounts for the conduct covered by these enhancements because of the relatedness of that conduct to the conduct that forms the basis for the conviction under 18 U.S.C. § 844(h), § 924(c) or § 929(a). For example, if in addition to a conviction for an underlying offense of armed bank robbery, the defendant was convicted of being a felon in possession under 18 U.S.C. § 922(g), the enhancement under §2K2.1(b)(5)(6) would not apply.

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EXHIBIT B

Revised Proposed Amendment: Implementation of the Stop Counterfeiting in Manufactured Goods Act

Synopsis of Proposed Amendment: This proposed amendment addresses the emergency directive in Section 1(c) of the Stop Counterfeiting in Manufactured Goods Act, Pub. L. 109–181. The directive provides that the Commission, not later than 180 days after the date of enactment of the Act,—

shall review, and if appropriate, amend the Federal sentencing guidelines and policy statements applicable to persons convicted of any offense under section 2318 or 2320 of title 18, United States Code....

In carrying out this subsection, the United States Sentencing Commission shall determine whether the definition of "infringement amount" set forth in application note 2 of section 2B5.3 of the Federal sentencing guidelines is adequate to address situations in which the defendant has been convicted of one of the offenses listed in paragraph (1) and the item in which the defendant trafficked was not an infringing item but rather was intended to facilitate infringement, such as an anti-circumvention device, or the item in which the defendant trafficked was infringing and also was intended to facilitate infringement in another good or service, such as a counterfeit label, documentation, or packaging, taking into account cases such as U.S. v. Sung, 87 F.3d 194 (7th Cir. 1996).

The deadline for promulgating an amendment under the directive is September 12, 2006.

The proposed amendment adds subdivision (vii) to Application Note 2(A) of §2B5.3 (Criminal Infringement of Copyright or Trademark) to provide that the infringement amount is based on the retail value of the infringed item in a case under 18 U.S.C. § 2318 or § 2320 that involves a counterfeit label, patch, sticker, wrapper, badge, emblem, medallion, charm, box, container, can, case, hangtag, documentation, or packaging of any type or nature (I) that has not been affixed to, or does not enclose or accompany a good or service; and (II) which, had it been so used, would appear to a reasonably informed purchaser to be affixed to, enclosing or accompanying an identifiable, genuine good or service. In such a case, the "infringed item" is the identifiable, genuine good or service.


Proposed Amendment:

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

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Commentary
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Application Notes:

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2. Determination of Infringement Amount.—This note applies to the determination of the infringement amount for purposes of subsection (b)(1).

(A) Use of Retail Value of Infringed Item.—The infringement amount is the retail value of the infringed item, multiplied by the number of infringing items, in a case involving any of the following:

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(vii) A case under 18 U.S.C. § 2318 or § 2320 that involves a counterfeit label, patch, sticker, wrapper, badge, emblem, medallion, charm, box, container, can, case, hangtag, documentation, or packaging of any type or nature (I) that has not been affixed to, or does not enclose or accompany a good or service; and (II) which, had it been so used, would appear to a reasonably informed purchaser to be affixed to, enclosing or accompanying an identifiable, genuine good or service. In such a case, the "infringed item" is the identifiable, genuine good or service.