Split Second Circuit Panel Holds That Collateral Order Doctrine Allows Interlocutory Review of Order of Fugitive Disentitlement, Creating a Circuit Split

In United States v. Sindzingre, No.19-1698 (2d Cir. Aug. 5, 2021), a 2-1 panel decides both its appellate jurisdiction to review an interlocutory order under the fugitive disentitlement doctrine, disagreeing with the Sixth and Eleventh Circuits. The panel majority also holds that the district court erred in holding that the doctrine applied to “a foreign citizen who . . . remained at home abroad . . . without evasion, stealth, or concealment.”

“Muriel Bescond, a French banker, is charged with transmitting false, misleading, and knowingly inaccurate commodities reports, and with conspiracy to do the same, in violation of the Commodity Exchange Act (‘CEA’). A citizen and resident of France, she allegedly participated in the LIBOR benchmark interest rate calculation process from her office in Paris. It is alleged that, by causing an artificial reduction in LIBOR rates, she affected the pricing of futures contracts traded on the Chicago Mercantile Exchange. Bescond remains in France today and has not submitted to the district court’s jurisdiction.”

Bescond moved to dismiss the indictment on various grounds, including extraterritoriality and due process. But the district court held that “Bescond was a fugitive,” it “exercised discretion to apply the fugitive disentitlement doctrine, and declined to decide the merits of her motions. Under the doctrine of fugitive disentitlement, a court may decline to entertain the claims of a defendant who is a fugitive from justice.” Alternatively, the district court substantially denied the motion to dismiss on the merits. Bescond appealed both the fugitive entitlement finding and the denial of the motion to dismiss.

The Second Circuit grants the appeal in part, reversing the finding on fugitive disentitlement and remanding. It dismisses the appeal of the merits of the denial of the motion to dismiss, though, finding no pendent appellate jurisdiction over that order.

The panel majority holds that each of the three elements of the collateral order doctrine – (1) “conclusively determine[s] the disputed question”; (2) “resolve[s] an important issue completely separate from the merits of the action”; and (3) is “effectively unreviewable on appeal from a final judgment” – applies to the fugitive disentitlement decision. (There was no disagreement on (1).)

On (2), the panel majority holds that the issue was important. “As long as she is disentitled, she cannot mount a defense unless she travels to the United States, thereby risking pre-trial detention and trial in a foreign country and causing an extended absence that could jeopardize her career and would cut off her income (which, incidentally, is the sole support of her family). These burdens are especially weighty in view of France’s non-extradition policy; as far as her home country is concerned, Bescond has no obligation to appear in the United States.” And the determination is separate from the merits. “In Bescond’s case, disentitlement has nothing to do with her guilt or innocence: it bears not on whether she violated the CEA, but rather on her ability to defend herself.”

On (3), the panel majority finds that the decision is effectively unreviewable from a final judgment. “Bescond’s right to mount a defense can be vindicated now or never. If she remains in France—as France entitles her to do—she will never stand trial; naturally, she will have no opportunity to appeal and alleviate the damage to her life and reputation . . . Alternatively, if she succumbs to the pressure of disentitlement and appears in the United States, an appeal could not remedy ‘the very harm that [s]he seeks to avoid.’”

On the merits, the panel majority reverses the fugitive disentitlement determination. First,it holds that the defendant was not a fugitive at all. “The ordinary meaning of the term “fugitive” does not describe Bescond . . . . Fugitivity implies some action by Bescond to distance herself from the United States or frustrate arrest. Bescond took no such action . . . . [Moreover,] Bescond was not in the United States while allegedly committing the charged conduct. Nor is she refusing to return to the United States to avoid prosecution; she simply remains at home, as her home country permits her to do.”

Even if Bescond were a fugitive, though, the panel majority holds that the disentitlement holding was an abuse of discretion. “In Bescond’s case, given her innocent residence as a foreign citizen abroad, given the nature of the charged offense and her remoteness from the alleged harm that it caused, given her line of work, and given her nonfrivolous challenge to the extraterritoriality of the criminal statute, the exercise of discretion to disentitle her was an abuse.”

Finally, the panel declined pendent appellate jurisdiction over the merits of the motion to dismiss the indictment. “Bescond asserts that review of the merits of extraterritoriality and due process is necessary to ensure meaningful review of her disentitlement. But her argument at best is that the concepts of extraterritoriality and due process would be enlightening because they illustrate why she is justified in remaining abroad. This is not enough . . . . Not incidentally, jurisdiction under the collateral order doctrine to review the disentitlement ruling depends, in part, on its separateness from the merits of extraterritoriality and due process.” Nevertheless, because the district court did not consider other grounds for dismissal of the indictment, the matter was “remanded for further proceedings to consider or reconsider the merits of her motions to dismiss.”

In dissent, Judge Livingston would have sided with the Sixth and Eleventh Circuits and declined review under the collateral order doctrine. “To date, in the 70-plus years since Cohen [the principal case recognizing the collateral order doctrine] was decided, the Supreme Court has recognized only four types of orders in criminal cases that satisfy these demanding requirements: orders denying motions to dismiss on double jeopardy grounds; orders denying such motions brought under the Speech or Debate Clause; orders denying motions to reduce bail; and orders involving the forced administration of antipsychotic medication . . . . Nevertheless, the majority today adds one more exception to the list, holding that this Court has jurisdiction under the collateral order doctrine to review orders ‘disentitling a foreign citizen who has remained at home abroad.’ . . . . In doing so, it creates a split with our sister circuits who have held fugitive disentitlement orders—and specifically involving, as here, a foreign citizen located abroad—are not immediately appealable.”

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