United States v. Livesay: Sentencing Courts Have Some Explaining to Do
Despite the substantial deference granted to sentencing courts pursuant to Gall v. United States, 552 U.S. ----, 128 S.Ct. 586 (2007), the Eleventh Circuit Court of Appeals will still expect unusual sentences to be supported by good reasons in the record. Kenneth K. Livesay was the Assistant Controller and Chief Information Officer of HealthSouth Corporation, who was involved in a conspiracy to inflate HealthSouth's revenues by making false statements on HealthSouth's books and in filings with the Securities and Exchange Commission, which resulted in losses of $1.4 billion to investors after the fraud was discovered and HealthSouth's stock plummeted. Livesay pled guilty to conspiracy to commit wire and securities fraud and falsification of financial information, and the government filed a motion for downward departure pursuant to U.S.S.G. § 5K1.1, based on Livesay's cooperation and substantial assistance.
Livesay's recommended sentencing level was 28 and the government recommended a three level departure in its 5K1.1 motion to level 25 and a sentence of 60 months imprisonment. The sentencing court, however, apparently harbored considerably more lenient views towards Livesay, and granted the government's motion and departed downward 18 levels to a level 10, and sentenced Livesay to 60 months probation with the first six months to be served on home detention.
The government appealed, and the Eleventh Circuit vacated and remanded for resentencing. See United States v. Livesay, 484 F.3d 1324, 1325-26 (11th Cir.2007). On resentencing, the government again filed a 5K1.1 motion, but in light of Livesay's continued substantial assistance since the first sentencing, recommended 20 months' imprisonment. The sentencing court again granted the government's motion and again imposed a sentence of 60 months probation with 6 months home detention, finding that Livesays assistance was extraordinary and warranted an extraordinary departure. The Court further stated that, even without the downward departure, it would have made the same variance under United States v. Booker, 543 U.S. 220 (2005) based upon the factors under 18 U.S.C. s 3553(a). Another appeal followed, and the United States Supremen Court eventually remanded to the Eleventh Circuit for reconsideration pursuant to Gall. See Livesay v. United States, --- U.S. ----, 128 S.Ct. 872, 872-73 (2008).
The Eleventh Circuit noted that a “‘sentencing judge should set forth enough to satisfy the appellate court that he has considered the parties' arguments and has a reasoned basis for exercising his own legal decisionmaking authority.’” United State v. Livesay, No. 06-11303, 2008 WL 1810195 (11th Cir., April 23, 2008) (quoting United States v. Agbai, 497 F.3d 1226, 1230 (11th Cir.2007); quoting Rita v. United States, --- U.S. ---, 127 S.Ct. 2456 (2007)). held that the sentencing court committed procedural error pursuant to Gall by considering Livesay's repudiation or withdrawal from the conspiracy in determining the extent of the departure pursuant to 5K1.1, since withdrawal is not one of the factors enumerated under 5K1.1. Id. at *9. The Court further held that the sentencing court also committed Gall procedural error by failing to adequately explain its variance from the advisory Sentencing Guidelines range in a way which would allow for meaningful appellate review, noting that the lower court had offered:
[N]o explanation or reasoning of how a sentence of 60 months’ probation (with 6 months' home detention) for an individual who pled guilty to knowingly playing an active and crucial supervisory role in a massive $1.4 billion fraud for at least five years reflected the seriousness of the offense or the nature and circumstances of the crime. The district court did not state or explain in any way why it rejected the government's argument that, notwithstanding Livesay's timely assistance, Livesay should receive “some sentence of significance” in this $1.4 billion fraud scheme because he was a “key player, a significant cog, in the operation of this fraud at HealthSouth for a number of years.”
Id. at *11.
