July 26 (Reuters) - Can a criminal defendant reap the benefits of a change in the law that happens while his case is pending on appeal?

The New Orleans-based 5th U.S. Circuit Court of Appeals said yes on Wednesday in a splintered en banc decision. The court joined the majority of other circuits that consider the law as it existed at the time of appeal rather than at the time of trial.

In March 2011, Jose Escalante-Reyes pleaded guilty to re-entering the country illegally. On appeal, Escalante-Reyes argued that the district court should not have considered his need for anger management courses when it sentenced him to five years in prison. He asked the 5th Circuit instead to apply the Supreme Court's June 2011 ruling in Tapia v. United States, which came down after his sentencing. Under Tapia, courts cannot impose or lengthen a prison term to allow an offender to complete a treatment program.

Normally, a party must object to a trial court's mistake when it occurs in order to raise the issue on appeal. Where a defendant fails to object, the appeals court applies the tougher standard, analyzing whether the mistake was a so-called "plain error."

Judge Catharina Haynes, writing for a 10-judge majority, noted that the country's circuit courts are split on the issue of whether to apply the new law, as clarified at the time of appeal, in determining whether an error was "plain." The San Francisco-based 9th Circuit and the DC Circuit in Washington apply the time-of-trial standard, while the 1st, 2nd, 10th and 11th circuits consider the law at the time of appeal.

The majority concluded that the time-of-appeal test was more practical. "Instead of ... potentially applying law we now know to be incorrect, we can simply apply the law as it is and determine whether the error is plain," Haynes wrote, noting that the purpose of appellate review was to "do justice."

But six judges criticized the majority's approach in three separate dissents, arguing that only the most egregious forfeited errors should be corrected on appeal. Escalante-Reyes' sentence was below the guideline range, they noted.

"If left uncorrected, would this five-year sentence shock the public's conscience and cause fair-minded men and women to lose confidence in our judicial system? The answer to these questions is 'No,'" Judge Jerry Smith wrote in one dissent.

Until now, three-judge panels from the 5th Circuit have been inconsistent in choosing whether to apply old or new law. One panel in 2011 upheld another defendant's five-year sentence that was set above the guideline range to allow for what the judge called necessary drug treatment, applying the law that existed at the time of trial. The Supreme Course agreed to review that case, Henderson v. United States, in its next term.

"Obviously, we're very happy," said Escalante-Reyes' lawyer Timothy Crooks of the 5th Circuit's en banc ruling. "It's tempered by the fact that we know the Supreme Court will have the final say in Henderson," he added.

The U.S. Attorney's Office for the Southern District of Texas did not immediately respond to a request for comment.

The latest case from the 5th Circuit is USA v. Escalante-Reyes, No. 11-40632.

For the federal government: Eileen Wilson and Renata Gowie of the U.S. Attorney's Office for the Southern District of Texas.

For Escalante-Reyes: Timothy Crooks Office of the Federal Public Defender.

(Reporting By Terry Baynes)

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