In United States v. Smith, No. 20-12667 (Jan. 12, 2022) (William Pryor, Grant, Hull), the Court vacated the defendant’s conviction for theft of trade secrets and related sentencing enhancements for lack of venue, affirmed the extortion conviction and related sentencing enhancements, and remanded for resentencing.
The Court addressed whether an accused can be tried in a venue where he did not commit any of the conduct elements of the charged crime. Defendant was a software engineer in Mobile, Alabama who obtained the coordinates of artificial fishing reefs in the Gulf of Mexico from a website owned by StrikeLines, whose office is located in Pensacola, Florida, but whose servers are located in Orlando, Florida. He did so by bypassing StrikeLines’s security measures, and then posted them to his Facebook page. Defendant was convicted of one count of theft of trade secrets and one count of extortion, and received an enhanced sentence.
In the district court, the defendant moved to dismiss the indictment, and then renewed the motion to dismiss at trial, on the grounds that venue was improper. He argued that venue was improper in the Northern District of Florida because all prohibited conduct occurred in the Southern District of Alabama and the data that was accessed was stored in the Middle District of Florida. The government responded that the stolen data was produced in the Northern District of Florida and later transmitted to Orlando, and that the effects of the crime on the victims in the Northern District of Florida were relevant for venue purposes so the court should adopt the “substantial contacts” test for venue. The district court agreed with the government.
The Court on appeal found venue improper for the theft-of-trade-secrets count. Venue was improper in the Northern District of Florida because the defendant never committed any essential conduct in that location. The Court declined to adopt the government’s effects-of-the-crime argument. The Court also noted that the remedy for improper venue is vacatur of the conviction, not acquittal or dismissal with prejudice, and double jeopardy would not preclude a retrial in the proper venue.
As to the extortion conviction, the Court found venue to be proper and the evidence admitted at trial sufficient to support the conviction. The Court first rejected defendant’s argument that the lack of proper venue as to the theft-of-trade-secrets count amounted to structural error requiring that his extortion conviction be vacated. Next, the Court found the evidence admitted to be sufficient to support the jury’s verdict.
Finally, as to the sentencing enhancements, the Court vacated the loss enhancement, as well as the enhancements for use of sophisticated means and special skills, because all were based on the now-vacated theft-of-trade-secrets offense. The Court, however, affirmed the enhancement for obstruction of justice because defendant gave “false testimony” at trial. The Court also rejected defendant’s argument that he should have received a reduction for acceptance of responsibility.