The Impending Demise of the Intended Loss Doctrine in Federal Sentencing

Verrill partner David G. Lazarus recently co-authored “The Impending Demise of the Intended Loss Doctrine in Federal Sentencing” for the New York Law Journal. In it they discuss doctrines of “intended loss” and what it means for sentencing. ‘Most white-collar crimes are governed by Section 2B1.1 of the U.S. Sentencing Guidelines, which covers, among other things, crimes of fraud and deceit. The largest driver of sentencing ranges under this provision is the loss table which provides for base-offense level enhancements tied to the amount of economic “loss.”’ In a recent decision by the U.S. Court of Appeals for the Third Circuit, United States v. Banks debates whether or not the ‘intended loss’ doctrine is still necessary. ‘There, the court held that the definition of intended loss in the guideline’s application notes improperly expands the meaning of loss in Section 2B1.1(b)(1). Instead of deferring to the Sentencing Commission’s interpretation of its own guideline as circuit courts have traditionally done, the Third Circuit pointed to the Supreme Court’s recent decision in Kisor v. Wilkie. Kisor, according to the Third Circuit, requires courts to “exhaust all the ‘traditional tools’ of construction,” including an examination of the “‘text, structure, history, and purpose of a regulation,’” and find real ambiguity before looking to the commission’s commentary for guidance.’

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