Take the Fifth

Designated for publication

• U.S. v. Kim, 18-51024, appeal from W.D. Tex.
  • Dennis, J. (Dennis, Southwick, Ho), criminal, sentencing, restitution
  • Vacating restitution order and remanding for redetermination, but dismissing appeal regarding application of sentencing enhancement as barred by the guilty-plea appeal waiver.
  • Defendant pled guilty to one count of criminal copyright infringement; the district court sentenced him to 46 months’ imprisonment and ordered him to pay $606,250 in restitution to the copyright owner, Scientific Games Corporation.
  • The defendant pled guilty to selling 24 counterfeit motherboards for gaming machines, the genuine versions of which would have had a retail value of $1250 apiece, for a total of $30,000. His presentence report, however, noted that defendant had sold 485 motherboards, for a total value of $606,250–extrapolating this number from the statement of a gaming parlor owner who stated that she owed the defendant $200,000 for prior purchases, and the probation officer divided that number by $434, an average price that defendant sold the counterfeit boards for. This led to a 14-level enhancement to his sentence level, as well as the $606,250 restitution amount.
  • The Court first held that the appeal waiver in the plea agreement barred the appeal of the application of the sentence enhancement based on the calculation.
  • The Court then held that the appeal waiver did not bar the appeal of the restitution amount. The Court answered affirmatively to the question of “whether a defendant may appeal a restitution order in excess of the statutory maximum where he has broadly waived his right to appeal and his appeal waiver contains no provision requiring his sentence to be within the statutory maximum.”
  • The Court held that the restitution amount exceeded the statutory maximum because the government failed to meet its burden of proving the number of infringing items placed into commerce by the defendant “in part because the PSR’s methodology was based on speculation regarding the number of counterfeit motherboards that $200,000 could have purchased.” The Court also held that, regardless of the calculation of number of infringing items, the district court also erred in using the retail value of the motherboards instead of the lost net profit. “Basing restitution on the retail value of the goods disregards the costs incurred in manufacturing and selling legitimate goods and could therefore result in the victim receiving a windfall amount that exceeds the actual loss caused by the infringement.”

• Campbell v. Wilkinson, 20-11002, appeal from N.D. Tex.
  • Ho, J. (Haynes, Willett, Ho), local counsel, 41(b) dismissal
  • Reversing dismissal of Title VII claims for failure to abide by local rule requiring retention of local counsel, and remanding for further proceedings.
  • The Court noted that Rule 41(b) of the FRCP only allows for the dismissal of a case for failure to abide by “these rules” or a court order. Here, the district court had dismissed plaintiff’s suit for a violation of a local rule requiring retention of local counsel and after the entry of an ECF notice by the clerk directing the compliance with the local rule. The “absence of any express reference to ‘local rules’ in Rule 41(b) thus raises the question whether it is ever appropriate to invoke Rule 41(b) based on nothing more than the violation of a local rule.”
  • The Court treated the dismissal as being one with prejudice, because a “without prejudice” dismissal that implicates a time-bar to re-assertion of the claim has the same effect, and held that the district court’s discretion to dismiss with prejudice a suit for failure to prosecute must be strictly bounded. Even treating the dismissal in this case as one for failure to prosecute, the Court held the district court’s dismissal failed the test “at ever turn,” as (1) the delay was not on the part of the plaintiff, but his counsel; (2) the 45 days between the ECF notice and the dismissal was not inordinately long to justify dismissal; and (3) the district court had made no findings that a less-severe sanction could have achieved compliance. “The delay here was caused entirely by counsel, not by Campbell. Defendants were not prejudiced because, as of the date of dismissal, no responsive pleadings were due and neither defendant had appeared in the case. And there is no evidence that counsel intended to delay proceedings. He may have wrongly concluded the local rule did not apply to him. But he was otherwise ready and prepared to litigate Campbell’s case himself.”

Unpublished

• Islam v. Wilkinson, 19-60721, petition for review of BIA order
  • per curiam (Haynes, Willett, Ho), immigration
  • Affirming in part and dismissing in part Bangladeshi citizen’s petition for review of BIA affirmance of IJ’s adverse credibility determination.

• U.S. v. Berdeja-Medina, 20-50720, appeal from W.D. Tex.
  • per curiam (Clement, Higginson, Engelhardt), criminal, sentencing
  • Granting summary affirmance of sentence of 78 months in prison, which the district court imposed following his guilty plea conviction for illegal reentry, and sentence for revocation of supervised release.

• Hoggatt v. Allstate Insurance Co., 20-60783, appeal from N.D. Miss.
  • per curiam (Wiener, Southwick, Duncan), insurance
  • Affirming dismissal for failure to state a claim of suit regarding insurance coverage for car accident involving insured’s son.