Date: 12-22-2014

Case Style: United States of America v. Davide Grose

Case Number: 14-6108

Judge: Harris L. Hartz

Court: United States Court of Appeals for the Tenth Circuit on appeal from the Western District of Oklahoma (Oklahoma County)

Plaintiff's Attorney:

Defendant's Attorney:

Description: Defendant David Grose seeks a certificate of appealability (COA) to appeal the
district court’s denial of challenges to his sentence under 28 U.S.C. § 2255. See
28 U.S.C. § 2253(c)(1)(B) (requiring COA to appeal denial of § 2255 motion). We deny
a COA and dismiss the appeal.
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I. BACKGROUND
Defendant, formerly the chief financial officer (CFO) of Quest, a publicly traded
company, was convicted by a jury on three counts of wire fraud for the unauthorized
transfer of $1 million from the company for personal use. In computing Defendant’s
offense level at sentencing, the district court determined that it should consider three
losses from relevant conduct: $849,670 in kickbacks from a company vendor; an
unauthorized transfer of $10 million to Jerry Cash, the chief executive officer (CEO) of
the company; and $73 million in decreased Quest shareholder value associated with the
public announcement of the CEO’s misconduct. The court calculated a guidelines
sentence of life imprisonment, but the statutory maximum sentence was 60 years (720
months) and the court varied downward to 192 months’ imprisonment. We affirmed the
sentence on appeal. See United States v. Grose, 461 F. App’x 786, 789 (10th Cir. 2012),
cert. denied, 133 S. Ct. 213 (2012).
Defendant filed a motion for relief under 28 U.S.C. § 2255 in the United States
District Court for the Western District of Oklahoma. He asserted seven claims: (1) His
sentence was far above that imposed on Cash, who was far more culpable, solely because
Defendant exercised his Sixth Amendment right to a jury trial; such punishment for
exercising his right to trial violated the Sixth Amendment. (2) and (3) His sentence was
increased by the district court’s consideration of alleged offenses (leading to the three
additional losses of almost $84 million) for which he had not been convicted by a jury
beyond a reasonable doubt, in violation of his Fifth Amendment right to due process and
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his Sixth Amendment right to a jury. (4) The government withheld exculpatory
impeachment evidence in violation of Giglio v. United States, 405 U.S. 150 (1972).
(5) He received ineffective assistance of counsel at trial. (6) He received ineffective
assistance of counsel at sentencing. And (7) he received ineffective assistance of counsel
on appeal. The district court denied relief on all claims and denied Defendant’s request
for a COA. He pursues the first four claims in this court.
II. DISCUSSION
A COA will issue “only if the applicant has made a substantial showing of the
denial of a constitutional right.” 28 U.S.C. § 2253(c)(2). This requires “a demonstration
that . . . includes showing that reasonable jurists could debate whether (or, for that matter,
agree that) the petition should have been resolved in a different manner or that the issues
presented were adequate to deserve encouragement to proceed further.” Slack v.
McDaniel, 529 U.S. 473, 484 (2000) (internal quotation marks omitted). If the district
court denied relief on procedural grounds, the applicant must also show “that jurists of
reason would find it debatable whether the district court was correct in its procedural
ruling.” Id.
Defendant’s first three claims are procedurally barred because he failed to raise
them on direct appeal. To overcome the bar he must show cause and prejudice or a
fundamental miscarriage of justice. See United States v. McGaughy, 670 F.3d 1149,
1159 (10th Cir. 2012).
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On Defendant’s first claim—that he was punished for exercising his right to a jury
trial—Defendant made no attempt below to challenge the procedural bar. No reasonable
jurist could disagree that the district court properly denied relief on that claim.
On Defendant’s second and third claims—that the Fifth and Sixth Amendments
barred the use at sentencing of conduct for which he was not convicted by a jury beyond
a reasonable doubt—he contended below that ineffective assistance of his appellate
counsel provides cause. But counsel was not ineffective for failing to raise the claims on
appeal, because the claims were meritless. See Cannon v. Mullin, 383 F.3d 1152, 1177
(10th Cir. 2004) (failure to raise meritless objections is not ineffective assistance). The
claims are contrary to circuit precedent. See United States v. Ray, 704 F.3d 1307, 1314
(10th Cir. 2013). Defendant argues that the specific use of uncharged misconduct in his
case is what conflicts with constitutional norms. But the only possibility we have left
open for a constitutional challenge to the use of uncharged misconduct under the advisory
sentencing guidelines is when the use of such evidence “increases a sentence by an
extraordinary or dramatic amount.” Id. (internal quotation marks omitted). There was
no such increase here. Contributing 24 levels to Defendant’s offense level of 43 was the
total loss of more than $50 million. See USSG § 2B1.1(b)(1)(M). That contribution
would be reduced to 14 levels for a loss of no more than $1 million (based on the offense
of conviction), reducing his offense level to 33. See id. § 2B1.1(b)(1)(H). Given
Defendant’s criminal-history level of I, his guidelines sentencing range would be 135 to
168 months, not dramatically less than his 192-month sentence.
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Defendant’s final claim is that the government may have withheld exculpatory
evidence that he could have used to impeach his codefendant, Jerry Cash, who testified at
their joint sentencing hearing. Almost three years after Defendant was sentenced, the
district court reduced Cash’s sentence to 39 months from 108 months following sealed
proceedings. Defendant argued below that if the sentence reduction was a reward for
cooperation with the government, he could have used evidence of that cooperation to
impeach Cash. He relied solely on press speculation that Cash was given a sentence
reduction in exchange for his assistance in other prosecutions, although the speculation
referred to the prosecution of someone other than Defendant in an unrelated case. The
government responded that because the district judge had “reduced [the CEO’s] sentence
and sealed the record,” he would be “aware of the reasons for the sentence reduction and
that those reasons occurred after [Defendant’s] sentencing hearing.” Aplt. App., Vol. 3 at
244. The judge agreed that “[t]he reasons for reduction of [the CEO’s] sentence occurred
after defendant’s sentencing” and denied relief. Id. at 387. Defendant has presented no
evidence to contradict the first-hand knowledge of the judge. His claim is frivolous, if
not offensive.

Outcome: We DENY Defendant’s application for a COA and dismiss the appeal.

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