Posted On Thursday, November 21, 2024
This publication, serves as a comprehensive guide for legal professionals, business owners, and senior management. The following articles are a part of this publication: When Authorities Come Knocking: Preparing For, and Responding Appropriately to, The Execution of a Search Warrant; Supreme Court Leaves Open a Major Risk to Internal Corporate Communications; Preserving Privilege in Internal Investigations; and Collateral Consequences of Healthcare Prosecutions.
You can find the full publication here.
In our recent post, “As Chevron Goes, So Goes the Sentencing Guidelines”, we discussed the possible ramifications the U.S. Supreme Court decision in Loper Bright might have on the Sentencing Guidelines going forward. Namely, whether, with the end of Chevron deference, federal courts must continue to even consider the Guidelines at all. But what about defendants that have already been sentenced? What relief might be available to them? The Court in Loper Bright made it clear that its decision is not retroactive, so sentences based on a trial court’s past reliance on/deference to Guideline commentary or the Guidelines themselves cannot be challenged. However, another Supreme Court decision, Corner Post, Inc. v. Bd. of Governors of Fed. Rsrv. Sys., 144 S. Ct. 2440, 2443, 219 L. Ed. 2d 1139 (2024) handed down around the same time as Loper Bright may, in some instances, provide relief to defendants that have been previously sentenced under Guidelines that have failed to comply with the notice and comment provisions of the Administrative Procedures Act (“APA”).
Corner Post, Inc. v. Bd. of Governors of Fed. Rsrv. Sys.
In Corner Post, the Supreme Court considered a facial challenge to Regulation II, promulgated by the Federal Reserve Board (the Reserve Board) in 2011, which set the maximum fee that an issuing bank could charge merchants for debit card transactions. Corner Post, a North Dakota truck stop and convenience store that opened in 2018, joined a suit against the Reserve Board under the APA. The district court dismissed the case as barred by the statute of limitations under the general federal statute of limitations, 28 U.S.C. § 2401(a), and the Eighth Circuit affirmed. A majority of the Circuit Courts at the time had taken the position that the limitations period for APA challenges begins to run, upon publication of the regulation. Thus, the statute’s six-year statute of limitations period began upon the publication of Regulation II in 2011 and expired in 2017, before Corner Post had begun operations.
However, in a 6-3 decision, the Supreme Court disagreed with the majority of Circuits, holding that under the general federal statute of limitations, an APA claim does not accrue until the plaintiff is injured by final agency action.
APA and the Sentencing Guidelines
Admittedly, when it comes to the Sentencing Guidelines, relief under the APA is limited. Congress has decided that the Sentencing Commission would not be an ‘agency’ under the APA when it established the Commission as an independent entity in the judicial branch and that the Sentencing Guidelines would not be subject to the provisions of the APA except as specifically enumerated. See United States v. Berberena, 694 F.3d 514, 527 (3d Cir. 2012) (internal citations omitted). However, when issuing Guidelines, the Sentencing Commission must comply with the APA’s notice and comment provisions, 28 U.S.C. § 994(x), and must submit the proposed Guideline to Congress 180 days before it takes effect, along with a statement of the Commission’s reasons for issuing the Guideline, 28 U.S.C. § 994 § 994(p) providing Congress, the ability to override the Guidelines by statute. Guidelines that do not comply with the APA’s notice and comment provisions are invalid. See Burkey v. Lappin, No. CIV.A. 06-122, 2007 WL 4480188, at *7 (W.D. Pa. Dec. 14, 2007).
Therefore, pursuant to Corner Post, Defendants now have six years from the time of sentencing (when they have arguably been injured by final agency action) to challenge their guidelines under the APA, namely, whether the Commission provisioned prior notice and comment of the proposed Guideline through publication in the Federal Register.
In Practice
In conclusion, whether the applicable Guideline Manual is the one in effect at the time the offense was committed or the Manual in effect at the time of sentencing, depends on the applicability of the ex post facto clause of the United States Constitution. Going forward, as defense counsel is deciding on the appropriate Guideline Manual, attention should also be paid to the applicable Guidelines’ compliance with the APA and potential challenges to their validity.
