13‐4060‐cr United States v. Desnoyers UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1.

WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 12th day of November, two thousand fourteen.

PRESENT: PIERRE N. LEVAL, DENNY CHIN, SUSAN L. CARNEY, Circuit Judges. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ x UNITED STATES OF AMERICA, Appellant, v. 13‐4060‐cr MARK DESNOYERS, Defendant‐Appellee. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ x FOR APPELLANT: RAJIT S. DOSANJH, Assistant United States Attorney (Craig A. Benedict, Assistant United States Attorney, on the brief), for Richard S.

Hartunian, United States Attorney for the Northern District of New York, Syracuse, New York.

FOR DEFENDANT‐APPELLEE: JOHN B. CASEY, Dreyer Boyajian LLP, Albany, New York.

Appeal from the United States District Court for the Northern District of New York (Hurd, J.).

UPON DUE CONSIDERATION, IT IS ORDERED, ADJUDGED, AND DECREED that the case is REMANDED for resentencing.

The government appeals a September 9, 2013 amended judgment of the United States District Court for the Northern District of New York sentencing defendant‐appellee Mark Desnoyers to five yearsʹ probation, with six monthsʹ home confinement and twenty‐six consecutive weekends of intermittent confinement.

Desnoyers was convicted by a jury of five counts arising from his malfeasance as an air monitor for asbestos abatement projects. This is the governmentʹs third appeal in this case. We assume the partiesʹ familiarity with the underlying facts, the procedural history, and the issues on appeal, which we briefly summarize before addressing the merits.

Desnoyers was convicted of (1) conspiracy to violate the Clean Air Act and to commit mail fraud by engaging in certain ʺrip and runʺ asbestos abatement projects, (2) aiding and abetting a violation of the Clean Air Act in another, separate abatement project, (3) a substantive mail fraud offense arising from yet another abatement project, and (4) two counts of making false statements to agents of the Environmental Protection Agency (the ʺEPAʺ). After trial, the district court vacated the ‐2‐ conspiracy conviction and sentenced Desnoyers to five yearsʹ probation and restitution of $34,960, on a joint and several basis ʺwith related case Curt Collins.ʺ App. at 566‐67.

The government appealed, and we reinstated the conspiracy conviction and remanded for resentencing. See United States v. Desnoyers, 637 F.3d 105 (2d Cir. 2011).

On remand, the district court imposed the same probationary sentence, declining to apply the so‐called ʺorganizer enhancementʺ under United States Sentencing Guidelines (ʺU.S.S.G.ʺ) § 3B1.1. Although the district court had concluded in sentencing a co‐defendant that Desnoyers would be jointly and severally liable for $250,302.22 in connection with the conspiracy projects, Sp. App. at 34, at Desnoyersʹs resentencing the district court held that Desnoyers should be liable only for his ʺproportionate liabilityʺ with respect to the conspiracy count, App. at 585‐86. The district court imposed restitution in the total amount of $45,398, which included Desnoyersʹs liability for nine percent of the cleanup costs relating to the conspiracy count; the court did not explain, however, how it arrived at the nine percent figure. The government again appealed. We vacated the sentence, with instructions for the district court to reconsider the organizer enhancement in light of the reinstatement of the conspiracy count, and to calculate restitution with a full explanation of its reasoning.

See United States v. Desnoyers, 708 F.3d 378, 390‐91 (2d Cir. 2013).

On the second remand, the district court again declined to apply the organizer enhancement and declined to hold Desnoyers jointly and severally liable for

‐3‐ restitution based in part on the fact that he earned less money from the scheme than his co‐conspirators and that apportionment was ʺfar more equitable.ʺ Sp. App. at 34. The court apportioned to Desnoyers liability for fourteen percent of the cleanup costs relating to the conspiracy count: the court explained that the fourteen percent figure represented ʺan approximation of [Desnoyersʹs] share of the proceeds from the abatement/air monitoring contracts for the projects outlined in [the conspiracy count].ʺ Sp. App. at 33‐34. It imposed the same five‐year probationary term, but also imposed six monthsʹ home confinement and twenty‐six weekends of intermittent confinement.

This appeal by the government followed.

On appeal, the government argues that (1) the district court erred in not applying the organizer enhancement, (2) Desnoyersʹs sentence is substantively unreasonable, (3) the district courtʹs restitution order constituted an abuse of discretion, and (4) the district judge should be removed from the case on remand. We address each argument in turn.

1. Organizer Enhancement We review a district courtʹs interpretation of the Guidelines de novo and its findings of fact for clear error. United States v. Mejia, 461 F.3d 158, 162 (2d Cir. 2006).

Section 3B1.1(a) of the U.S.S.G. provides for a four‐level increase if the criminal activity involved five or more participants and the defendant was an ʺorganizer or leader.ʺ See also United States v. Beaulieau, 959 F.2d 375, 379‐80 (2d Cir. 1992) (ʺWhether a defendant

‐4‐ is considered a leader depends upon the degree of discretion exercised by him, the nature and degree of his participation in planning or organizing the offense, and the degree of control and authority exercised over the other members of the conspiracy.ʺ).

The government argues that the district courtʹs stated reasons for declining to apply the organizer enhancement are at odds with findings in the presentence report (ʺPSRʺ), which the district court explicitly adopted on a wholesale basis. We agree. First, the district court found that Desnoyers was ʺless culpableʺ than his co‐defendants, Sp. App. at 6, and yet the PSR noted that Desnoyers ʺdevised and directedʺ the criminal scheme with two co‐conspirators, offering no indication that Desnoyers was not at least an equal participant, PSR ¶ 15. Next, the district court found that Desnoyers was ʺsomewhat duped and misledʺ by his co‐defendants, Sp. App. at 6, and yet the PSR states that Desnoyers not only ʺorganized the illegal work,ʺ but also approached a co‐defendant about starting a company for which Desnoyers would perform the air monitoring, PSR ¶ 35. Finally, the district court found that Desnoyers ʺhad no direct supervisory or managerial control over the abatement workers,ʺ Sp. App. at 7, despite explicit recitations in the PSR that Desnoyers was the ʺGeneral Managerʺ of three projects in the conspiracy count, for which he ʺsolicitedʺ two co‐defendants to participate as abatement contractors, PSR ¶ 35. Additionally, according to the PSR, Desnoyers ʺcreated fraudulent records, and billed clients for workʺ he never completed,

‐5‐ PSR ¶ 19, and he testified that he disbursed unlawful proceeds from some of the abatement projects, App. at 191.

A court deciding whether to apply a four‐level organizer or leader enhancement under § 3B1.1(a) should consider factors including ʺthe exercise of decision making authority, the nature of participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature and scope of the illegal activity, and the degree of control and authority exercised over others.ʺ U.S.S.G. § 3B1.1 cmt. n.4; see United States v. Molina, 356 F.3d 269, 276 (2d Cir. 2004). ʺAs to disputed issues of fact, the district court must make findings with sufficient clarity to permit meaningful appellate review.ʺ United States v. Skys, 637 F.3d 146, 152 (2d Cir. 2011); see United States v. Huerta, 371 F.3d 88, 92‐93 (2d Cir. 2004) (remanding the case to the district court where the record ʺle[ft] open important factual questions regarding . . . three factors listed in application note 4ʺ).

Here, the district court adopted the PSR, but made additional factual findings that cannot be reconciled with the PSR. The district court thus committed clear error in failing to resolve the discrepancies between its factual findings at sentencing and the facts set forth in the adopted PSR. United States v. Reed, 49 F.3d 895, 901 (2d Cir. 1995) (ʺWhere the sentencing judge neither clearly resolves the disputed issue nor explicitly relies on factual assertions made in a PSR, we must remand for further

‐6‐ findings.ʺ). We therefore remand the sentence for the district court to resolve these discrepancies and, on the basis of its findings, to make any adjustment warranted by § 3B1.1.

2. Substantive Reasonableness We decline to rule on the issue of substantive reasonableness at this time because the sentence contains procedural error. See Gall v. United States, 552 U.S. 38, 51 (2007) (the appellate court ʺmust first ensure that the district court committed no significant procedural error,ʺ and ʺ[a]ssuming that the district courtʹs sentencing decision is procedurally sound, the appellate court should then consider the substantive reasonableness of the sentenceʺ).

3. Restitution We next turn to the district courtʹs restitution order. We review awards of restitution for abuse of discretion, United States v. Lucien, 347 F.3d 45, 52 (2d Cir. 2003), but a district court lacks discretion under the Mandatory Victims Restitution Act (ʺMVRAʺ) ʺto deny an award of restitution or to award restitution for anything less than the full amount of the victimʹs losses,ʺ United States v. Walker, 353 F.3d 130, 131 (2d Cir. 2003); see also United States v. Coriaty, 300 F.3d 244, 253 (2d Cir. 2002) (holding that ʺstatutory focusʺ of MVRA is ʺmaking victims wholeʺ). It is within the discretion of the district court to hold a defendant jointly and severally liable or to apportion liability.

See 18 U.S.C. § 3664(h) (ʺIf the court finds that more than 1 defendant has contributed to

‐7‐ the loss of a victim, the court may make each defendant liable for payment of the full amount of restitution or may apportion liability among the defendants to reflect the level of contribution to the victimʹs loss and economic circumstances of each defendant.ʺ).

In holding Desnoyers proportionately liable for the losses in Count One, the district court concluded that ʺ[t]his fourteen percent represents an approximation of the defendantʹs share of the proceeds from the abatement/air monitoring contracts for the projects outlined in Count 1.ʺ Sp. App. 33‐34. As discussed above, the facts in the PSR suggest a comparable level of knowledge and participation among Desnoyers and his co‐conspirators, and they suggest that the scheme would not have been possible without Desnoyers and that the victims were all harmed by Desnoyersʹs willingness to falsify air samples and perform fraudulent air monitoring. See United States v. Tzakis, 736 F.2d 867, 871 (2d Cir. 1984) (because defendant ʺwas convicted . . . for a conspiracy encompassing the entire fraudulent scheme,ʺ he could ʺbe required to make restitution for damage caused to all of the schemeʹs victimsʺ even if his role in scheme was ʺcomparatively minimalʺ (internal quotation marks omitted)). The district court found that Desnoyersʹs Count 1 co‐defendant had ʺpaid only $890.20 toward his $854,166.06 restitution obligation [on all counts]ʺ in the years since his sentencing. Sp. App. 29. In light of this observation, it was an abuse of discretion for the district court to then impose only a prorated share of the Count 1 restitution on Desnoyers. By doing so, the

‐8‐ district court elevated Desnoyersʹs interests over those of his victims, requiring the victims, rather than Desnoyers, to bear the cost of his co‐conspiratorʹs failure to bear his share.

4. Request for Reassignment Finally, we deny the governmentʹs request to order that the case be reassigned to a new judge on remand. ʺ[R]esentencing before a different judge is required only in the rare instance in which the judgeʹs fairness or the appearance of the judgeʹs fairness is seriously in doubt.ʺ United States v. Cossey, 632 F.3d 82, 89 (2d Cir. 2011) (per curiam) (internal quotation marks omitted). Reassignment is not ordinarily warranted merely because ʺa sentencing judge has been shown to have held erroneous views.ʺ United States v. Bradley, 812 F.2d 774, 782 n.9 (2d Cir. 1987). The errors set forth above do not reflect any bias on the part of the district judge, and matters of judicial efficiency counsel against reassignment. See United States v. Robin, 553 F.2d 8, 11 (2d Cir. 1977) (en banc) (per curiam) (ʺA judge who has presided over a lengthy trial often gains an intimate insight into the circumstances of the defendantʹs crime, which may prove uniquely useful in determining the sentence to be imposed, whereas no such reason would normally exist upon sentencing after a guilty plea.ʺ).

‐9‐ Accordingly, we REMAND the case with instructions to the district court to vacate the sentence and resentence the defendant in a manner not inconsistent with this order.

FOR THE COURT: Catherine OʹHagan Wolfe, Clerk

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