Friday, February 17, 2017

Aggravated Identity Theft, the Driver’s License and the “Real Person”

This post examines a recent opinion from the U.S. Court of Appeals for the 9th Circuit: U.S. v Doe, 842 F.3d 1117 (2016).  The court begins the opinion by explaining that
Appellant John Doe appeals from his convictions of aggravated identity theft under 18 U.S. Code § 1028A, for knowingly possessing and using the name, birth date, and social security number of another person when he applied to renew a Nevada driver's license and when he submitted a Form I-9 Employment Eligibility Verification form to his employer.

Doe contends that the Government failed to prove an element of the offense—specifically that he knew that the false identity he used belonged to a real person. He also challenges the reasonableness of his 78-month sentence.
U.S. v Doe, supra.
The court went on to explain how, and why, the prosecution arose:
The victim of Doe's identity theft, referred to herein as `V,’ was born in San Jose, California in 1963 and, in or about 1977, was assigned a social security number and card. No later than 1987, V's uncle sold V's birth certificate and provided his social security number to a man, not identified at trial. In 1987, someone, most likely Doe, used V's birth certificate, name, and social security number to obtain a `replacement’ social security card from the Social Security Administration. For some 27 years, until Doe's arrest in 2014, V's identification was used without his authorization, most likely by Doe. In this regard, V received notices from the Social Security Administration (approximately every three years) that his name and social security number were being used in connection with multiple jobs in different places, including Nevada, with which V had no connection.

The evidence establishes that Doe's use of V's identity began no later than 2002 when Doe obtained a driver's license upon an application to the Nevada Department of Motor Vehicles (`DMV’) that contained Doe's photograph but V's name and birth date. Doe renewed this license multiple times by resubmitting V's identifying information and had such a license in his possession when arrested in 2014.
U.S. v Doe, supra.
The opinion goes on to explain that
[o]n or around May 15, 2013, Doe submitted such a driver's license together with a social security card with V's number to Doe's employer with a Form I-9 Employment Eligibility Verification.

The unauthorized use of V's identity caused him problems for approximately three decades. In the 1990s, his driver's license was suspended twice—including once while he was employed as a truck driver—because of DUIs committed in a different state by another person using his social security number. Tax refund checks due to him from the IRS were sent to a person in Nevada using his social security number. His wages were garnished three times to pay child support for children that were not his. More likely than not, these problems were caused by Doe's misuse of V's identity. In any event, it is clear that in 2013 V's unemployment benefits were halted because of child support payments owed (and not made) by Doe. V contacted Doe's employer to notify it that an employee was unlawfully using his identity.
U.S. v Doe, supra.
The court’s description of the facts and developments below goes on to explain that on
or around June 4, 2014, Doe was arrested in connection with a fraud investigation conducted by the Nevada DMV and the Department of Homeland Security. At that time, he was found to be in possession of a Nevada driver's license bearing his photo and V's identification information.

In this case, Doe was charged with two counts of aggravated identity theft under 18 U.S. Code § 1028A, unlawful production of an identification document under 18 U.S. Code § 1028(a)(1), and false attestation in an immigration matter in violation of 18 U.S. Code § 1546(b)(3). At trial, he was convicted on all charges. The district court sentenced Doe to 78 months of incarceration.

Doe appeals, challenging (1) the sufficiency of the evidence upon which his aggravated identity theft convictions were based, and (2) the reasonableness of his sentence.
U.S. v Doe, supra.
The Court of Appeals began its analysis of the arguments Doe made on appeal with the first issue he raised, i.e., the sufficiency of the evidence to support his convictions for aggravated identity theft. U.S. v Doe, supra. It began the analysis by explaining the “standard of review” it applies to such arguments, explaining that
[t]his Court reviews the sufficiency of evidence supporting a defendant's conviction de novo. We must construe the evidence `in the light most favorable to the prosecution’ and must affirm the conviction if `any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.’ United States v. Nevils, 598 F.3d 1158, 1161 (U.S. Court of Appeals for the 9th Circuit 2010) (en banc) (quoting Jackson v. Virginia, 443 U.S. 307,319 (1979)).
U.S. v Doe, supra (emphasis in the original).
The court then began its analysis of Doe’s argument, explaining that
Title 18 U.S.C. § 1028(A) provides that a person who `knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person’ in connection with an enumerated felony shall be sentenced to two years imprisonment. 18 U.S.C. § 1028A (2012).

To prove a violation of § 1028A, the Government must prove beyond a reasonable doubt that:

1. The defendant knowingly transferred or used a means of identification of another person without legal authority;
2. The defendant knew the means of identification belonged to a real person; and
3. The defendant did so in relation to one of the crimes enumerated in 18 U.S. Code § 1028A(c). See Flores–Figueroa v. United States, 556 U.S. 646, 647, 655–56 (2009); United States v. Miranda–Lopez, 532 F.3d 1034, 1037, 1040 (9th Cir. 2008).
U.S. v Doe, supra.
The court then began its analysis of Doe’s argument about the sufficiency of the evidence presented by the prosecution at his trial, noting that
Doe does not debate the Government's proof of the first and third elements. Doe was proven to have used V's means of identification without legal authority. And the use was proven to be in relation to crimes enumerated in 18 U.S.C. § 1028A(c), i.e., the violations of 18 U.S. Code §§ 1028(a)(1) and 1546(b)(3) for which he was convicted in the instant case.

Doe acknowledges that the Government proved that V was a real person. Doe contends however, that, without direct proof of his knowledge (such as proof that he knew V or had any connection to the sale of V's birth certificate and identifying information), the evidence was insufficient to establish his knowledge that V was a real person. The Court does not agree.

While direct evidence of the knowledge element is often presented in § 1028A prosecutions, this Court has recognized that the element can be proven by circumstantial evidenceSee Miranda–Lopez, 532 F.3d at 1040 (citing United States v. Villanueva–Sotelo, 515 F.3d 1234, 1249 (D.C. Cir. 2008) (`[P]roving the defendant knew the stolen identification belonged to another person should present no major obstacle, as such knowledge will often be demonstrated by the circumstances of the case.’)). Thus, the issue here presented is whether the circumstantial evidence was sufficient to establish Doe's knowledge that the identity of V was that of a real person.

When `determining the sufficiency of circumstantial evidence, the question is not whether the evidence excludes every hypothesis except that of guilt but rather whether the trier of fact could reasonably arrive at its conclusion.’ Nevils, 598 F.3d at 1165 (quoting United States v. Eaglin, 571 F.2d 1069, 1076 (1977)).
U.S. v Doe, supra.
The court then began the process of outlining its analysis of Doe’s first issue and the resolution it would ultimately reach on that issue:
The Government presented ample circumstantial evidence to establish Doe's knowledge that V was a real person. Most persuasive was proof of Doe's repeated success in obtaining renewed Nevada driver's licenses bearing Doe's photograph and V's name, date of birth, and social security number. In this regard, the Government introduced copies of applications to the DMV for Nevada driver's licenses and state identity cards in V's name. The `image history’ associated with the applications dating back to 2002 showed photographs of Doe taken when he applied for reissuances of the driver's license and/or identity cards in V's name. Denise Riggleman, a DMV Compliance Enforcement Investigator, described the process involved in obtaining a new license or identity card through the Nevada DMV. Ms. Riggleman testified that new applicants must present proof of identity documents, such as a social security card or birth certificate, along with their applications to a DMV technician in person. This information is input into the DMV computer system, and the actual license is mailed to the applicant seven to ten days later.

In addition, the Government proved that Doe had submitted such a Nevada driver's license and a social security card in V's name as proof of identity in connection with an I-9 Employment Verification Form that he submitted to his employer.
U.S. v Doe, supra.
The opinion then goes on to explain that,
[i]n regard to the knowledge element of the § 1028A charge, the district court instructed the jury:

`Repeated and successful testing of the authenticity of a victim's identifying information by submitting it to a government agency, bank or other lender is circumstantial evidence that you may consider in deciding whether the defendant knew the identifying information belonged to a real person as opposed to a fictitious one. It is up to you to decide whether to consider any such evidence and how much weight to give it.’

The jury found Doe guilty on both § 1028A charges.
U.S. v Doe, supra.
The court went on to analyze, and rule on, this issue:
 [t]his Court holds that the evidence of Doe's repeated successful use of V's identity in applications subject to scrutiny was sufficient to permit the jury to find that he knew that V was a real person. The Court's holding is consistent with decisions issued by its sister Circuits. E.g., United States v. Valerio, 676 F.3d 237, 244–45 (1st Cir. 2012) (`”[W]illingness to subject [a] social security number repeatedly to government scrutiny” is evidence that allows a reasonable jury to find that a defendant knew that a stolen identity belonged to a real person.’); United States v. Doe, 661 F.3d 550, 562–63 (11th Cir. 2011) (`[A] defendant's repeated and successful testing of the authenticity of a victim's identifying information prior to the crime at issue is powerful circumstantial evidence that the defendant knew the identifying information belonged to a real person as opposed to a fictitious one.’); United States v. Gomez–Castro, 605 F.3d 1245, 1249 (11th Cir. 2010) (concluding that `repeatedly and successfully test[ing] the authenticity of the birth certificate and social security card’ to obtain a license, benefit card, and passport was sufficient to show that the identity belonged to a real person); United States v. Holmes, 595 F.3d 1255, 1258 (11th Cir. 2010) (`A reasonable jury also could have found that Holmes's willingness to subject the social security card repeatedly to government scrutiny established that she knew, all along, that the social security card belonged to a real person and was not a forgery.’); United States v. Foster, 740 F.3d 1202, 1207 (8th Cir. 2014) (`[R]epeated subjection of [a victim's] identity to a lender's scrutiny provides strong circumstantial evidence that the [defendant] knew the identity was real.’).
U.S. v Doe, supra.
The court then explained that
Doe, asserting that he is a Mexican national, contends that it was unreasonable for the jury to find that he knew how U.S. government agencies and their verification procedures worked. His not being a citizen, although a resident, of the United States is a fact that the jury could have considered relevant but does not render the jury's finding unreasonable. As stated in Gomez–Castro, 605 F.3d at 1249 (affirming the conviction of a citizen of the Dominican Republic), `[K]nowledge [of verification processes] can be inferred reasonably based on ordinary human experience for which no special proof is required; a trier of fact can rely on common sense.’ See also Holmes, 595 F.3d at 1258 (concluding that a reasonable jury could infer that a defendant (not a United States citizen) knew that the government `requested and sometimes retained for many weeks’ the submitted personal information to verify authenticity).

In sum, the Court holds that the circumstantial evidence presented, establishing Doe's repeated successful use of V's identification information, sufficed to permit the jury to find that he knew that V was a real person. Hence, he was properly convicted  on two counts charging aggravated identity theft in violation of 18 U.S. Code § 1028A.
U.S. v Doe, supra.
The Court of Appeals then took up the other argument Doe made on appeal, i.e., the reasonableness of the sentence imposed on him.  U.S. v Doe, supra. It divided its analysis of, and ruling on, this issue into two issues: the “standard of review” to be applied to this issue and the “reasonableness of the sentence.” U.S. v Doe, supra.
As to the standard of review, the court explained that a
district court's sentencing determination—whether inside or outside of the determined Sentencing Guidelines range—is reviewed for abuse of discretion. A sentence will be set aside only if it is substantively unreasonable or the result of a procedural error. See Gall v. United States, 552 U.S. 38, 51 (2007); United States v. Autery, 555 F.3d 864, 872–73 (9th Cir. 2009). In reviewing the substantive reasonableness of a sentence, we consider whether the district court identified the correct legal standard and whether its findings were illogical, implausible, or without support in the record. United States v. Hinkson, 585 F.3d 1247, 1251 (9th Cir. 2009). Our review is deferential, and relief is appropriate only in rare cases when the appellate court possesses `a definite and firm conviction that the district court committed a clear error of judgment.’ United States v. Ressam, 679 F.3d 1069, 1087–88 (9th Cir.2012) (en banc) (quoting United States v. Amezcua–Vasquez, 567 F.3d 1050, 1055 (9th Cir. 2009)).
U.S. v Doe, supra.
The Court of Appeals then began its analysis of Doe’s challenge to his sentence as being
“unreasonable”.  U.S. v Doe, supra. In the federal criminal justice system, the process of determining the appropriate sentence for a given defendant’s crime or crimes proceeds under the U.S. Sentencing Guidelines. If you are interested in what the Guidelines are and how they function, you can find out a great deal about both issues in Wikipedia’s entry on the guidelines, which you can find here. 
Getting back to the opinion, the court began its analysis of the sentence the district court imposed on Doe by explaining that the District Court Judge
determined that Doe's Offense Level was 14 and his Criminal History Category was II, yielding a Guideline range of 18 to 24 months. However, the district court varied upward and imposed a sentence of 78 months.

Doe contends that his 78-month sentence is substantively unreasonable in light of the factors set forth in 18 U.S. Code § 3553(a). Specifically, he claims the sentence is of greater duration than necessary to comply with the purposes of sentencing and is unsupported by credible evidence.
U.S. v Doe, supra.
The went on to describe what the District Court Judge said in sentencing Doe:
At sentencing, the district court stated:

`The Guideline sentence, I think, does not adequately reflect the seriousness of the defendant's conduct in terms of the length, the nature of his conduct, and the profound effect on the victim. The defendant did not just steal the victim's identity and use it for a few years, he stole and utilized the victim's identity for about 27 years, which is more than half of the victim's life. . . . ‘

`And, as I noted, defendant didn't just live a normal, law-abiding life. He committed offenses under the victim's identity and further perpetuated the harm to the victim, having these offenses reflect under the victim's identity. And, as noted, defendant's conduct caused terrible disruptions to the victim and his family.’

The Court finds that the district court properly considered, and stated the reasons for, the upward variance to the sentence imposed. In particular, the district court emphasized the substantial harm done to V over many years, as well as the criminal offenses committed by Doe in V's name, as revealed by Nevada public records. The district court's decision was within a range of reasonableness. We hold that the district court's imposition of a 78-month sentence was neither illogical, implausible, nor without support in the record. Hinkson, 585 F.3d at 1251.

            For the foregoing reasons, we affirm Doe's convictions and sentence.
U.S. v Doe, supra. 

Wednesday, February 15, 2017

The Law Office, Commercial Burglary and "Misdemeanor Shoplifting"

This post examines an opinion from the California Court ofAppeal – Second District: People v. Thomas, 2017 WL 527379 (2017). The court begins the opinion by explaining that in
November 2012, appellant was charged with seven counts of commercial burglary (§ 459), committed on separate occasions against separate businesses. There were additional charges of grand theft, attempted grand theft, and petty theft with priors, all stemming from the alleged burglaries. A number of prior felony convictions, including a prior strike conviction, also were alleged.

Appellant pled no contest to count 1, burglary of the Law Offices of Gennady Lebedev, admitted a prior strike conviction, and was sentenced to six years in prison. The court dismissed the remaining counts after appellant gave a Harvey waiver, allowing for victim restitution on the dismissed counts. In March 2013, the court ordered restitution in stipulated amounts: $1,500 to Justin Trugman, $4,133.35 to Wild Woods, Inc., and $3,104.98 to Matthew Hebard.

In November 2014, appellant petitioned for resentencing under Proposition 47. In considering whether appellant's conviction on count 1 satisfied the elements of section 459.5, the court reasoned that a law office offers services for sale. It assumed that the office had been open for business, based on the representation of appellant's Proposition 47 counsel, who had spoken to appellant's counsel in the underlying case. The court found that the value of the property taken from the law office exceeded $950, citing `the stipulation to the amount of damage to that one count.’ Because it believed itself bound by appellant's stipulation to the amount of loss on count 1, the court declined to consider his argument that there was conflicting evidence of the value of the lost property: the probation report listed the value of the computer taken from the law office at $1,500, but the victim signed a restitution request for $500.

            This appeal followed the denial of appellant's petition.
People v. Thomas, supra. The court appended a footnote after the reference to the $1,500 value of the computer in which it explained that
[i]n addition to the computer valued at $1,500, the probation report lists the law office property loss as including a camera valued at $200, a briefcase valued at $50, a USB drive valued at $30, and an iPod valued at $40. Appellant relied on records turned over to him by his attorney in the underlying case. Those records were not received by the court, and are not part of the record on appeal.
People v. Thomas, supra.

The Court of Appeals began its analysis of Thomas’ arguments on appeal by explaining that
[e]ntry into an uninhabited building with intent to commit larceny or another felony is second-degree burglary, a wobbler offense that may be punished as either a felony or a misdemeanor (§§ 459, 460, 461.) Section 459.5, added by Proposition 47, creates the misdemeanor crime of shoplifting, which it defines as `entering a commercial establishment with intent to commit larceny while that establishment is open during regular business hours, where the value of the property that is taken or intended to be taken does not exceed nine hundred fifty dollars ($950).’ (§ 459.5, subd. (a).) Proposition 47 also added section 1170.18, which allows persons previously convicted of felonies that would be misdemeanors under the voter initiative to petition for resentencing. (People v. Sherow (2015) 239 Cal.App.4th 875, 878–879.)

Respondent argues that burglarizing a law office is not shoplifting because a law office, unlike a bank, is not a commercial establishment. We do not agree.
People v. Thomas, supra.
The court went on to explain that
[i]n interpreting a voter initiative, `we apply the same principles that govern statutory construction.’ [Citation.] (People v. Rizo (2000) 22 Cal.4th 681, 685.) We construe the language in the context of the overall statutory scheme. (Ibid.) Words are given their ordinary meanings unless special definitions are provided. (People v. Love (2008) 166 Cal.App.4th 1292, 1297.) If the language is ambiguous, we may consult ballot materials to aid us in determining the voters' intent. (People v. Superior Court (Pearson) (2010) 48 Cal.4th 564, 571.)
People v. Thomas, supra.
The court goes on to explain that
[w]hile shoplifting is ordinarily understood to mean theft of merchandise from a store (In re J.L. (2015) 242 Cal.App.4th 1108, 1115), section 459.9 provides its own special definition of that term, using the words `commercial establishment’ and `property.’ The phrase `commercial establishment’ is undefined, but courts consistently have recognized that it ordinarily means an establishment `that is primarily engaged in commerce, that is, the buying and selling of goods or services.’ (In re J.L., at p. 1114 [school is not commercial establishment]; People v. Stylz (2016) 2 Cal.App.5th 530, 534 [locked storage unit is not commercial establishment]; compare People v. Franske (2016) 6 Cal.App.5th 1057, 1060 [motor home sales office is commercial establishment]; People v. Holm (2016) 3 Cal.App.5th 141, 147 [golf and country club is commercial establishment]; People v. Hudson (2016) 2 Cal.App.5th 575, 581–582, review granted October 26, 2016, S237340 [bank is commercial establishment];  People v. Abarca (2016) 2 Cal.App.5th 475, 481–482, review granted October 19, 2016, S237106 [same]; People v. Smith (2016) 1 Cal.App.5th 266, 273, review granted September 14, 2016, S236112 [check cashing business is commercial establishment].)
People v. Thomas, supra.
The Court of Appeal went on to explain that Thomas
argues that a law office is not primarily engaged in commerce, but in securing its clients' legal rights, and that the confidential fiduciary nature of the attorney-client relationship distinguishes a law office from a bank that offers financial services or a club that offers recreational services. But even the rules of professional conduct, on which respondent relies, recognize that lawyers generally provide legal services for a fee. (See e.g. Lee v. Hanley 2015) 61 Cal.4th 1225, 1240, citing Cal. Rules of Prof. Conduct, rule 3–700 [fee refund upon termination of employment]; Margolin v. Shemaria (2000) 85 Cal.App.4th 891, 894, citing rule 2-200 [fee sharing].) Exchanging legal services for a fee qualifies as selling those services. Nor is respondent correct in suggesting that financial transactions do not implicate the right to privacy and confidentiality. (Fortunato v. Superior Court (2003) 114 Cal.App.4th 475, 481 [right to privacy embraces `confidential financial information in whatever =form it takes, whether that form be tax returns, checks, statements, or other account information’].)

Respondent also argues that Proposition 47 does not apply to the theft of items not offered for sale, such as a lawyer's computer containing confidential information. As many courts have recognized, on its face, the definition of shoplifting in section 459.5 is not limited to taking merchandise offered for sale. (See e.g. People v. Franske,  supra, 6 Cal.App.5th at p. 1060; People v. Hallam (2016) 3 Cal.App.5th 905, 912; People v. Holmsupra, 3 Cal.App.5th at p. 147; People v. Hudsonsupra, 2 Cal.App.5th at p. 582; People v. Fusting (2016) 1 Cal.App.5th 404, 411; but see People v. Colbert (2016) 5 Cal.App.5th 385, 391.)
People v. Thomas, supra.
The court then explained that
[t]he problem with reclassifying theft offenses as misdemeanors where private information is stolen is not limited to cases implicating attorney-client confidentiality, contrary to what respondent appears to suggest. The issue is currently pending before the California Supreme Court in cases involving financial transactions. (See e.g. People v. Gonzales (2015) 242 Cal.App.4th 35, review granted Feb. 17, 2016, S231171 [whether entering bank to cash forged checks is shoplifting]; People v. Cuen (2015) 241 Cal.App.4th 1227, review granted Jan. 20, 2016, S231107 [whether conviction for possession of access card account information under § 484e, subd. (d) is eligible for section 1170.18 resentencing]; People v. Romanowski (2015) 242 Cal.App.4th 151, review granted Jan. 20, 2016, S231405 [same].) Thus, respondent's premise that the burglary of a law office raises fundamentally different confidentiality concerns than the burglary of a financial institution is flawed.

Even assuming that the definition of shoplifting in section 459.5 lends itself to the narrower construction advocated by respondent, that would only render it ambiguous. The ballot materials do not support such a construction as they direct that the act be construed `broadly . . . to accomplish its purposes.’ (Cal. Voter Information Pamp., Gen. Elec. (Nov. 4, 2014) text of Prop. 47, p. 74, § 15; see also id. at p. 74, § 18 [act shall be `liberally construed to effectuate its purposes’].) The voters intended `nonserious, nonviolent crimes like petty theft and drug possession’ to be `misdemeanors instead of felonies.’ (Id. at p. 70, § 3, subds. (3) & (4).)

We see no indication that the voters intended the theft of personal property that incidentally contained private confidential information to fall outside the scope of Proposition 47. For example, the initiative made check forgery a misdemeanor where the value of the check does not exceed $950, unless the defendant is convicted of forgery and identity theft, as defined in section 530.5. (§ 473.) If the potential for identity theft, without an actual conviction, is insufficient to preclude reclassifying check forgery as a misdemeanor, then stealing a lawyer's computer that happens to contain confidential client information should not preclude reclassification either.
People v. Thomas, supra.
The court concluded this section of its opinion by explaining that, “[w]e are not convinced that burglary of a law office that involves taking a computer which happens to contain confidential information is outside the scope of Proposition 47.” People v. Thomas, supra.
The Court of Appeals then took up the next, and final, issue in the case:
Section 459.5, subdivision (a) also requires that (1) the burglarized commercial establishment be `open during regular business hours,’ and (2) the value of the property taken or intended to be taken not exceed $950.

The trial court assumed appellant entered the law office during regular business hours based on the following statement by appellant's Proposition 47 counsel: `From speaking to [appellant's counsel in the underlying case], she indicated to me that the—Well, there was various offices in—that were involved in the case originally and in the original counts. I think all of them were open for business. I don't think they were involved in the sales of anything, but they were all open for business.’ Appellant argues that respondent forfeited the challenge that his counsel's representation was not evidence by failing to object. But the contention that a judgment or order is not supported by evidence generally does not require an objection in the trial court. (See People v. Butler (2003) 31 Cal.4th 1119, 1126.)

As to the second requirement, respondent concedes the trial court mistakenly believed that, in the underlying case, appellant had stipulated to the value of the property taken in count 1. The record on appeal does not show a stipulation as to that count. At the hearing on his Proposition 47 petition, appellant brought the court's attention to discrepancies in the valuations of that property in the probation report and in a victim's request for reimbursement. The court rejected appellant's argument on the mistaken belief that appellant had stipulated to the value of the loss in count 1 and did not consider the evidence on which appellant relied.
People v. Thomas, supra.
The court concluded the opinion with certain directions to the trial court judge:
The trial court must make factual findings about appellant's eligibility for resentencing in the first instance. (People v. Contreras (2015) 237 Cal.App.4th 868, 892.) The court's findings that appellant entered the law office during business hours and that he stipulated that the value of the property he took exceeded $950 are unsupported by the record on appeal. Representations made by appellant and his counsel at the hearing indicate that the factual record may be developed further. The trial court has `substantial flexibility to devise practical procedures to implement Proposition 47, so long as those procedures are consistent with the proposition and any applicable statutory or constitutional requirements. [Citation.]’ (People v. Fedalizo (2016) 246 Cal.App.4th 98, 108.) On remand, the court may exercise its discretion whether determining appellant's eligibility requires augmentation of the factual record either by allowing the parties to submit additional evidence or by holding a hearing.
People v. Thomas, supra.
The Court of Appeal appended a footnote to the last sentence above, in which it explained that
[w]e do not accept appellant's alternative argument that he is eligible for resentencing under section 490.2, which increased the value requirement for petty theft to $950. Appellant was convicted of burglary, not grand theft. Section 459.5, subdivision (a) specifically provides that an entry into a commercial establishment with intent to commit larceny that does not satisfy the definition of shoplifting is burglary. Reading section 490.2 as implicitly amending the definition of burglary in section 459 would render section 459.5 superfluous because it would reduce any burglary conviction based on theft not exceeding $950 to a misdemeanor, regardless of the type of building entered. We do not construe Proposition 47 in a manner that would render an entire statutory provision superfluous. (See People v. Hall (2016) 247 Cal.App.4th 1255, 1266.)
People v. Thomas, supra.

Monday, February 13, 2017

The Georgia Computer Systems Protection Act, the Civil Suit and Punitive Damages

This post examines an opinion from the Supreme Court of Georgia:  Lyman v. Cellchem International, Inc., 2017 WL 279514 (2017).  The opinion issued in a civil case, but one that was brought under a “criminal” statute: the Georgia Computer Systems Protection Act.
The court begins the opinion, as courts usually do, by explaining how and why the litigation arose and what had gone in the trial court:
After Dale Lyman and his wife, Helen, left Cellchem International, Inc. (`Cellchem’) to work for a competitor, Cellchem sued the Lymans and two companies with which they had affiliated (collectively the `Lymans’), asserting claims for computer theft (see OCGA § 16–9–93 (a)) and computer trespass (see OCGA § 16–9–93 (b)) under the Georgia Computer Systems Protection Act (GCSPA) (see OCGA § 16–9–90 et seq.), breach of fiduciary duty, and tortious interference with business relations. Cellchem claimed that the Lymans stole data from Cellchem and used it to their competitive advantage. At trial, the jury found the Lymans liable on all claims asserted by Cellchem and awarded Cellchem compensatory damages and attorney fees, as well as punitive damages of $5.1 million. 

On appeal, the Court of Appeals reversed the judgment against the Lymans on the tortious interference claim. Lyman et al. v. Cellchem Int'l, LLC, 335 Ga.App. 266 (1), 779 S.E.2d 474 (2015). The Court of Appeals also remanded the case to the trial court for a new trial as to punitive damages, reasoning that, despite the fact that the tortious interference claim no longer existed to support a potential award for punitive damages, the remaining claims for breach of fiduciary duty and violations of the GCSPA could still support such a claim. Id. at 277 (4), 779 S.E.2d 474, citing Automated Drawing Systems, Inc. v. Integrated Network Svcs., Inc, 214 Ga.App. 122, 447 S.E.2d 109 (1994) (holding, in one sentence and without further reasoning, that punitive damages are available for violations of GCSPA involving misappropriation of software and withholding of royalties).

In this regard, because the verdict form at trial did not designate to which claims the punitive damages were assigned, or in what proportion, a new determination had to be made with regard to punitive damages that eliminated any consideration of damages associated with alleged tortious interference and focused only on the remaining tort claims upon which the Lymans had been found liable at trial. Id. at 276–77 (4), 779 S.E.2d 474. This Court granted the Lymans' petition for a writ of certiorari to determine whether the Court of Appeals erred in holding that the GCSPA can authorize an award of punitive damages. See OCGA § 16–9–93 (g).

For the reasons set forth below, we conclude that the GCSPA does not authorize an award of punitive damages. Accordingly, we reverse the decision of the Court of Appeals with respect to the availability of punitive damages under the GCSPA, and remand this case to the Court of Appeals with the direction that the court clarify that any remand to the trial court for a new trial on the issue of punitive damages cannot involve any purported award for such damages based on alleged violations of the GCSPA.
Lyman v. Cellchem International, Inc., supra.
The court then explains that
[o]ur analysis turns on the proper interpretation of OCGA § 16–9–93 (g) (1), which authorizes a civil remedy for violations of the GCSPA, and states:

`Any person whose property or person is injured by reason of a violation of any provision of [the GCSPA] may sue therefor and recover for any damages sustained and the costs of suit. Without limiting the generality of the term, “damages” shall include loss of profits and victim expenditure.’
Lyman v. Cellchem International, Inc., supra.
The Supreme Court goes on to explain that
[i]n interpreting this provision, `we apply the fundamental rules of statutory construction that require us to construe [the] statute according to its own terms, to give words their plain and ordinary meaning, and to avoid a construction that makes some language mere surplusage.’ (Citations omitted). Slakman v. Continental Cas. Co., 277 Ga. 189, 191, 587 S.E.2d 24 (2003). We must also seek to effectuate the intent of the Georgia legislature. OCGA § 1–3–1 (a). In this regard, `in construing language in any one part of a statute, a court should consider the entire scheme of the statute and attempt to gather the legislative intent from the statute as a whole.’ Sikes v. State, 268 Ga. 19, 21 (2), 485 S.E.2d 206 (1997).

Bearing these principles in mind, while OCGA § 16–9–93 (g) (1) states that a plaintiff may recover `any damages sustained’ for injuries resulting from violations of the statute, the statute goes on to list `loss of profits and victim expenditure’ as examples of the types of sustained damages that are recoverable. These specifically listed damages are compensatory in nature. While the statute does not `limit [ ] the generality of the term [ ] “damages”’ to the specific forms of compensatory damages listed therein, there is no mention of `punitive damages’ being among the types of damages that may be recovered.

Thus, the question here becomes whether the Legislature intended for punitive damages to be recoverable in addition to the types of compensatory damages specifically listed in the statute despite failing to specifically state that punitive damages are recoverable under OCGA § 16–9–93 (g) (1). For reasons described more fully below, we conclude that the Legislature did not intend for `punitive damages’ to be among the types of damages that may be recovered under OCGA 16–9–93 § (g) (1).
Lyman v. Cellchem International, Inc., supra.
The opinion goes on to explain that
[a]s an initial matter, it is axiomatic that punitive damages are not the same as compensatory damages, as punitive damages are awarded `not as compensation to a plaintiff but solely to punish, penalize, or deter a defendant.’ OCGA § 51–12–5.1 (c). Indeed, in this sense, punitive damages generally are not `sustained’ by a plaintiff, but are imposed upon a defendant based on that defendant's wrongful conduct. Thus, the statement OCGA § 16–9–93 (g) (1) indicating that a plaintiff may recover `any damages sustained,’ without more, would not appear to indicate a Legislative intent to allow for punitive damages to be recoverable under the statute.

In this connection, where the Legislature has indicated that punitive damages are recoverable, it has generally done so through express language to include punitive damages among the types damages that a plaintiff may recover in addition to compensatory damages. See, e.g., OCGA § 43–17–14(a) (Georgia Charitable Solicitations Act allows a suit to recover `general damages sustained’ and `[e]xemplary damages . . .in cases of intentional violations’); OCGA § 16–14–6 (c) (Georgia RICO Act violation allows for `three times the actual damages sustained and, where appropriate, punitive damages’); see also OCGA §§ 16–9–129 (allowing for `actual damages sustained and, where appropriate, punitive damages” for identity fraud); 16-13-64 (d) (“actual damages sustained and, where appropriate, punitive damages’ recoverable for persons injured by another's failure to properly submit prescription drug information to the Georgia Drugs and Narcotics Agency); 16-15-7 (c) (Persons injured as a result of criminal gang activities `shall have a cause of action for three times the actual damages sustained and, where appropriate, punitive damages’).
Again, here, there is no express language authorizing the recovery of punitive damages in OCGA § 16–9–93 (g) (1), and, if the Legislature had intended for such damages to be recoverable under the statute, it could have expressly stated so. See Morton v. Bell, 264 Ga. 832, 833, 452 S.E.2d 103 (1995) (`[I]f some things (of many) are expressly mentioned [in a statute], the inference is stronger that those omitted are intended to be excluded than if none at all had been mentioned’) (citations and punctuation omitted).
Lyman v. Cellchem International, Inc., supra.
The Supreme Court then explained that
[f]urthermore, looking to the entire legislative scheme of OCGA § 16–9–93, as we must (see Sikes, supra), we find further support for the conclusion that the Legislature did not intend for OCGA § 16–9–93 (g) (1) to authorize an award of punitive damages.

Specifically, OCGA § 16–9–93 (h) (1) allows a criminal sanction of `not more than $50,000’ if certain violations of the GCSPA are proven beyond a reasonable doubt.’ See id. (`Any person convicted of the crime of computer theft, computer trespass, computer invasion of privacy, or computer forgery shall be fined not more than $50,000.00 or imprisoned not more than 15 years, or both’) (emphasis supplied). See also OCGA § 16–9–93 (h) (2) (allowing for $5,000 fine and one year of incarceration for criminal computer password disclosure).

Thus, the civil cause of action provided for in the GCSPA evinces a legislative intent to leave penal sanctions to the government and a desire to cap private penalties, as opposed to an allowance for punitive damages which could far exceed the statutory cap of $50,000. To authorize a civil award of punitive damages pursuant to OCGA § 16–9–93 (g) (1) under a clear and convincing evidence standard (see OCGA § 51–12–5.1 (b)), and which could go well beyond the $50,000 penalty cap of OCGA § 16–9–93 (h)(1) for violations of the GCSPA proven beyond a reasonable doubt would be incongruent. See Slakman, supra 277 Ga. at 191, 587 S.E.2d 24; Johnson v. State, 267 Ga. 77, 78, (475 S.E.2d 595) (1996) (citations omitted).

We therefore conclude the Court of Appeals erred in its determination that an award of punitive damages is authorized under OCGA § 16–9–93 (g) (1) and we remand this case with the direction that the Court of Appeals enter a new opinion that is consistent with our holding here. We also expressly overrule Automated Drawing Systems, supra, which the Court of Appeals relied upon to reach the erroneous conclusion that punitive damages are available for violations of the GCSPA.
Lyman v. Cellchem International, Inc., supra.
So the court reversed the Court of Appeals’ original decision and sent the case back to that court with directions to write and enter a new decision that comports with this opinion. Lyman v. Cellchem International, Inc., supra.