May 25, 2019

Tenth Circuit: Sentence Upheld Because of District Court’s Detailed Findings About its Reasonableness

The Tenth Circuit Court of Appeals issued its opinion in United States v. Snowden on Friday, November 27, 2015.

Blake Snowden was a sales rep for Onyx, M.D., Inc. until his termination in August 2010. Onyx is a physician staffing agency that specializes in placing physicians in hospitals and clinics for short terms. Onyx uses a database program called Bullhorn, which it considers a competitive advantage. When Snowden was fired from Onyx, he decided to compete with Onyx in physician placement, and he obtained an Onyx executive’s password in March 2011 and used it to create his own Bullhorn account. Over the next few months, Snowden logged into Bullhorn dozens of times and copied gigabytes of data. He also intercepted emails of four Onyx executives. However, his efforts were unsuccessful; they neither benefited nor harmed Onyx’s business. When Onyx discovered the hack, the FBI traced it to a computer at Snowden’s address. Onyx’s only loss from the hack was about $25,ooo in legal fees and lost employee time related to the hack.

Snowden eventually pleaded guilty to unlawfully obtaining information from a protected computer and intercepting emails. The district court applied a 16-level enhancement based on its estimated loss of the cost of developing the database, $1.5 million, and calculated his Guidelines range as 41-51 months. However, the district court varied downward and sentenced him to 30 months. The court specifically found that it would apply a 30-month sentence no matter what, even if its Guidelines calculation was held to be incorrect on appeal.

The Tenth Circuit was skeptical about the district court’s assumption of $1.5 million in losses, although it understood the court’s reasoning. The Tenth Circuit found that had the district court limited its loss calculation to Onyx’s actual loss of approximately $25,000, the resulting Guidelines range would have been 8-14 months. However, it found any error harmless because of the district court’s detailed and unusual findings about what it considered to be a proper sentence for Snowden’s crime. The court specifically noted that it would vary upward to 30 months if the Guidelines range was too high and would vary downward to 30 months if the Guidelines range was too low. Because of these specific findings, the Tenth Circuit affirmed the district court’s sentence.

The Tenth Circuit affirmed the sentence but reversed and remanded for the correction of the restitution award to the parties’ undisputed proposed restitution amount.

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