On August 1, 2019, the Second Circuit Court of Appeals jumped into the fray of what has been a growing debate about the right under the federal Bail Reform Act for individuals facing indictment to create conditions for release that only the wealthiest of defendants can even contemplate, including paying for their own home detention service. In a highly unusual opinion, in the case of United States v. Boustani, the Circuit held that the Bail Reform Act “does not permit a two-tiered bail system in which defendants of lesser means are detained pending trial while wealthy defendants are released to self-funded private jails.” Although the Second Circuit’s “all created equal” pronouncement may be laudable, it is inconsistent with the plain meaning of the Act and unnecessary given the facts of Boustani. As I explain in my prior blog post, “Too Rich to Bail?,” the Bail Reform Act requires that, in each case, courts conduct an individualized assessment of the charges against the defendant as well as the weight of the evidence and the defendant’s underlying history and circumstances, to determine whether any conditions exist that would assure the defendant’s appearance in court. Thus, the Act is inequitable by its very terms. This blog discusses the Circuit’s Boustani opinion and whether the Circuit, in reaching the issue of equitable treatment, misconstrued the Act’s text.
In “Too Rich To Bail?,” I discussed the original decision in Boustani, rendered by Eastern District of New York District Judge William F. Kuntz, II. In that opinion, Judge Kuntz rejected the bail package proposed by defendant Jean Boustani that, along with financial conditions and the surrender of travel documents, included home detention secured by privately funded guards. Judge Kuntz determined that Boustani’s circumstances demonstrated a risk of flight including his alleged deceptive conduct involving a $2 billion fraud, bribery, and money laundering scheme that “devastated” Mozambique’s economy and caused “staggering” losses to foreign and American investors; access to significant financial resources; frequent international travel; and extensive ties to non-extradition countries. The District Court found that no conditions would reasonably assure Boustani’s appearance noting, among other things, Boustani’s alleged involvement in procuring fraudulent visas and employment documents. The District Court also questioned whether disparate treatment is permissible under the Bail Reform Act and expressed its concern about the perceived inequity of permitting wealthy people to obtain pretrial release by paying for their own private jails.
After Judge Kuntz denied bail in February, Boustani appealed and the Second Circuit affirmed the detention order on March 7, 2019, but permitted Boustani to propose an amended bail package to the District Court. On March 19, 2019, Boustani renewed his request for bail, first, offering additional financial conditions; second, agreeing to advance a year’s worth of fees to a private security firm to assuage the District Court’s stated concern that the security firm might be dissuaded from doing its job properly if Boustani could threaten to withhold payment or terminate it; and third, to address the Court’s concern about inequity, proposing to revisit bail if a co-defendant who lacked funds to afford private security as a bail condition was extradited to the U.S. On March 28, 2019, the District Court denied Boustani’s renewed application for bail and Boustani filed an emergency motion seeking to vacate that order, which was denied by the Second Circuit on June 6, 2019. In a somewhat unusual move, two months later on August 1, 2019, the Second Circuit issued a written opinion explaining its decision and “clarify[ing] the circumstances under which the Bail Reform Act permits a District Court to release a defendant pending trial pursuant to a condition under which the defendant would pay for private armed security guards.”
The Second Circuit's written opinion expressly rejects a two-tiered bail system favoring wealthy defendants. The opinion discusses the Circuit’s prior opinions addressing private security solutions, including United States v. Sabhnani, which held that privately funded home confinement may be appropriate in limited circumstances, but which did not reach the issue of “whether it would be ‘contrary to principles of detention and release on bail’ to allow wealthy defendants to buy their way out by constructing a private jail.” The Boustani opinion also refers to non-precedential summary orders in which the Second Circuit expressed concern about releasing defendants on bail conditions only available to wealthy defendants.
Addressing Boustani’s circumstances, the Second Circuit noted that his wealth was one of many factors considered by the District Court and not the Court’s primary reason for concluding that he was a flight risk. And the Circuit concluded that because “a similarly situated defendant of lesser means surely would be detained pending trial,” Boustani should not be “permitted to avoid such a result by relying on his own financial resources to pay for a private jail.” Yet, in apparent recognition of the advisory nature of its opinion, the Court in its very next breath noted that an exception to this “all created equal doctrine” “may be appropriate when a defendant is deemed to be a flight risk primarily because of his wealth.” (Emphasis in original).
It is unclear what the Second Circuit accomplished in its Boustani decision other than to create a rule that seemingly is enveloped by its exception. The very premise of the opinion – that the Bail Reform Act does not permit the imposition of conditions for release that “‘foster inequality and unequal treatment’” – is contrary to the very spirit of the Act. The Bail Reform Act requires a defendant-specific analysis that is unavoidably inequitable. Moreover, in Boustani there was no need for the Second Circuit to reach the issue of equitable treatment since the District Court set forth many reasons why the bail conditions proposed by Boustani were not sufficient to secure Boustani’s appearance. Therefore, the Circuit’s decision to reach the issue of equitable treatment in this particular case is not only difficult to understand but also unnecessary.
The Bail Reform Act requires courts, upon a finding that a defendant poses a risk of flight or a danger to the community, to release the defendant subject to the least restrictive conditions, or combinations of conditions that reasonably will assure the defendant's appearance in court and the safety of any other person and the community. The Act requires courts to consider factors that are specific to the defendant seeking bail including the nature and circumstances of the offense; the weight of the evidence, the history and characteristics of the defendant; and danger to the community if the defendant is released. The "history and characteristics" of the defendant include among other factors, the defendant's financial resources. (18 U.S.C. § 3142(g)(3).) Nothing in the text of the Act precludes a wealthy defendant from using his or her financial resources to help get bail. In holding otherwise, the Second Circuit appears to have strayed – possibly inadvertently, but clearly inappropriately – beyond the text of the Act and into the policy arena, and very well may have undermined the Act’s mandate: to release federal defendants from pretrial detention upon the least restrictive conditions needed to assure their appearance.
From The Insider Blog: White Collar Defense & Securities Enforcement.