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Cases test new flexibility of sentencing guidelines

The longest-ever sentence for securities fraud is among many old cases under review because of a high court ruling.

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After a jury convicted him last year, former Dynegy executive Jamie Olis was eligible for a relatively light sentence of six months in prison for his part in a natural-gas trading scheme. He wound up getting 24 years - the longest sentence in the history of securities fraud - because the judge was required to take into account the amount of shareholder losses, valued at $100 million.

Now the US Court of Appeals for the Fifth Circuit is considering whether the case should be sent back to Houston for resentencing in light of the recent Supreme Court decision to throw out the guidelines used to calculate Mr. Olis's sentence.

The case is being watched closely by many in the legal community who see it as one of the worst examples of the restrictions placed on federal judges by the now-defunct sentencing guidelines.

Whether the case will be remanded could portend the path of hundreds of other cases on appeal. But even if those cases do make it back to trial courts, how will judges determine appropriate sentences?

'The closest thing to chaos'

Since the high court's ruling in January, the federal court system has been reeling from uncertainty. As trial judges wrestle with how to sentence new cases without the help of guidelines, appellate judges are struggling with how to handle the crush of old cases sentenced with guidelines.

"Judges are still generally following the guidelines with new cases. But figuring out what to do with all the cases that have been sentenced under the old guidelines is the closest thing to chaos you can describe," says Douglas Berman, a law professor and expert on the federal sentencing guidelines at Ohio State University in Columbus. "It's going to take a while for the lower courts to sort through all the issues the Supreme Court has left them with."

Indeed, at least two circuit courts of appeal - in New York and San Francisco - have asked lawyers to hold off on filing appeals until judges can offer some guidance in the coming weeks.

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