United States v. Basurto ( 2016 )

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS July 12, 2016
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 15-2119
RACHEL BASURTO,
Defendant - Appellant.
_________________________________
Appeal from the United States District Court
for the District of New Mexico
(D.C. No. 1:13-CR-00969-JB-1)
_________________________________
John V. Butcher, Assistant Federal Public Defender, Office of the Federal
Public Defender, Albuquerque, New Mexico, for Defendant-Appellant.
James R.W. Braun, Assistant United States Attorney (Damon P. Martinez,
United States Attorney, Office of the United States Attorney, Albuquerque,
New Mexico, with him on the brief), for Plaintiff-Appellee.
_________________________________
Before MATHESON, SEYMOUR, and BACHARACH, Circuit Judges.
_________________________________
BACHARACH, Circuit Judge.
_________________________________
Ms. Rachel Basurto was convicted on federal drug charges. In light
of the conviction, the district court had to decide whether to impose a fine
and, if the court did so, to set the amount. Ms. Basurto’s only source of
income was her monthly disability payments, but she and her husband
owned a house unencumbered by a mortgage. Relying on Ms. Basurto’s co-
ownership of the house, the district court imposed a fine of $13,133.33,
reasoning that Ms. Basurto could pay this amount by selling the house or
obtaining a loan. 1 Ms. Basurto appeals the fine, arguing that it is
procedurally unreasonable. We affirm.
I. Ms. Basurto asserts four challenges to the fine.
On appeal, Ms. Basurto brings four challenges to the fine 2:
1. In finding that Ms. Basurto is able to pay the fine, the district
court erroneously relied on Ms. Basurto’s ability to sell or
mortgage her house.
2. In assessing Ms. Basurto’s ability to pay, the district court did
not account for the hardship to Ms. Basurto.
1
To calculate the fine, the district court
 valued the house at its tax-assessment value, $33,689,
 subtracted a 6% realtor fee,
 halved this figure to account for the husband’s interest in the
house, and
 subtracted Ms. Basurto’s existing liabilities ($2,500) and court-
imposed special assessments ($200).
Based on these calculations, the district court imposed a $13,133.33 fine.
2
On appeal, Ms. Basurto refers to the Eighth Amendment’s Excessive
Fines Clause. See Appellant’s Opening Br. at 43-45, 48, 50. We do not
interpret these references as a separate appeal point.
2
3. The district court clearly erred by relying on facts that (a) the
family members living with Ms. Basurto had known about and
could have prevented her crimes and (b) the house had been
used to facilitate the crimes.
4. The district court did not account for the increased risk of
recidivism posed by the fine.
We reject each challenge.
II. We consider whether the district court abused its discretion.
We review the reasonableness of the district court’s decision to
impose a fine under the abuse-of-discretion standard. United States v.
Lopez-Macias, 661 F.3d 485, 488-89 (10th Cir. 2011). “Reasonableness has
both procedural and substantive components.” United States v. Cage, 451
F.3d 585, 591 (10th Cir. 2006).
Ms. Basurto characterizes her challenges to the fine as procedural.
This characterization is correct because Ms. Basurto challenges the method
that the district court used in calculating the fine. See id.In assessing her procedural challenge, we can disturb the district
court’s factual findings only if they are clearly erroneous. United States v.
Trujillo, 136 F.3d 1388, 1398 (10th Cir. 1998). But the district court’s
legal conclusions are subject to de novo review. United States v. Ray, 704
F.3d 1307, 1315 (10th Cir. 2013).
3
III. The district court found that Ms. Basurto had not proven an
inability to pay the fine.
The U.S. Sentencing Guidelines authorize district courts to impose
fines except when defendants establish that they are unable to pay and
unlikely to obtain that ability. U.S.S.G. § 5E1.2(a) (2014). 3 Applying this
authority, the district court found that Ms. Basurto could raise the money
for the fine by selling her house or obtaining a loan with the house as
collateral.
According to Ms. Basurto, the district court’s findings are clearly
erroneous. According to Ms. Basurto, she cannot sell the house because
state law prohibits a sale unless Ms. Basurto’s husband consents. See N.M.
Stat. Ann. § 40-3-13(A) (voiding the sale of real property that spouses own
as community property without both spouses’ consent). Ms. Basurto
contends that (1) she does not know where her husband is and (2) even if
he could be located, he would probably not consent to a sale. 4
Ms. Basurto acknowledges that state law provides a statutory
procedure permitting a sale without spousal consent if a spouse has
3
Section 5E1.2(a) states that the district court “shall” impose a fine
unless the defendant establishes an inability to pay, but the U.S. Supreme
Court’s decision in United States v. Booker, 543 U.S. 220 (2005) rendered
the Guidelines advisory.
4
Ms. Basurto believes that Mr. Basurto currently resides in Mexico,
but she has not had any contact with him since 2003, when he went to
Mexico.
4
disappeared. See N.M. Stat. Ann. § 40-3-16. But Ms. Basurto contends that
she does not know how to carry out the statutory procedure on her own,
cannot afford to hire an attorney to assist in carrying out the statutory
procedure, and cannot meet all of the statutory requirements. Ms. Basurto
also argues that no one would loan her money because of legal uncertainty
over the ability to sell the house and Ms. Basurto’s lack of income. We
reject these contentions because the district court could have reasonably
concluded from the sparse evidence that Ms. Basurto could (1) satisfy the
statutory procedure for a sale without her husband’s participation or, in the
alternative, (2) obtain her husband’s consent to a sale.
First, New Mexico law provides a statutory procedure allowing the
sale of jointly owned property “[i]f a spouse disappears and his location is
unknown to the other spouse.” N.M. Stat. Ann. § 40-3-16(A). Though Ms.
Basurto argues that she lacks the legal knowledge required to comply with
the statutory procedure, the district court could reasonably conclude that
legal knowledge was unnecessary. The New Mexico law allows Ms.
Basurto to sell jointly owned property upon completion of five tasks:
1. File a petition stating why the transaction would be desirable
for Ms. Basurto.
2. Obtain court appointment of a guardian ad litem for the absent
husband and pay this guardian a “reasonable fee.”
3. Serve a notice of hearing on the guardian ad litem.
5
4. Publish four weekly notices of hearing in a newspaper of
general circulation in the county where the petition is pending.
5. Obtain a court order authorizing the transaction based on a
finding that the husband disappeared.
N.M. Stat. Ann. § 40-3-16.
The district court did not abuse its discretion by considering Ms.
Basurto capable of performing these five tasks. Though Ms. Basurto cannot
afford an attorney, the statutory procedure is relatively straightforward and
Ms. Basurto did not present any evidence of an inability to carry out the
statutory procedure.
Ms. Basurto also argues that she cannot comply with the statutory
procedure because she (1) would not be able to prove that her husband’s
location is “unknown to anyone” and (2) cannot afford the non-attorney
costs associated with the procedure, such as publishing notices in a local
newspaper. Appellant’s Opening Br. at 28. These arguments are
unconvincing. The statutory procedure requires only that a spouse’s
location is “unknown to the other spouse [Ms. Basurto]”; the statute does
not require Ms. Basurto to prove that her husband’s location is unknown to
anyone. N.M. Stat. Ann. § 40-3-16(A). And Ms. Basurto presented no
evidence showing that she cannot afford the costs associated with the
statutory procedure. Thus, the district court could reasonably infer that Ms.
Basurto would be able to use the statutory procedure to sell the house
without her husband’s consent.
6
Second, Ms. Basurto could sell the home if she obtained her
husband’s consent. Ms. Basurto contends that securing her husband’s
consent would be difficult given the husband’s unknown location. But the
record does not show that Ms. Basurto ever attempted to contact her
husband, much less that she was unable to locate him or to obtain his
consent. In fact, Ms. Basurto’s appeal briefs suggest the opposite: Ms.
Basurto states that one of her daughters has been in contact with Mr.
Basurto, that Mr. Basurto has a son who “could possibly provide his
father’s location,” and that Ms. Basurto “will probably not be able to prove
Mr. Basurto has disappeared and his location is unknown to anyone.”
Appellant’s Opening Br. at 7, 28-29. Accordingly, Ms. Basurto has not met
her burden to prove an inability to obtain her husband’s consent to a sale.
The district court also had discretion to rely on Ms. Basurto’s ability
to obtain a loan with the house as collateral. The district court could have
reasonably found that
1. Ms. Basurto could obtain a loan with the house as collateral
and
2. the house’s value was enough to secure the principal on a loan
for the amount of the fine.
Ms. Basurto contends that she would be considered a high credit risk.
But Ms. Basurto did not present any evidence suggesting that lenders
would hesitate to loan money with the house as collateral.
7
Ms. Basurto relies on two categories of cases: (1) cases holding that
courts cannot impose fines when the defendant’s assets are unproven or
when the defendant’s future ability to pay is based merely on chance 5 and
(2) cases considering the need to appoint counsel when a criminal
defendant is indigent. 6
The first line of cases is inapplicable because the district court did
not base the fine on an unproven asset or on speculation about possible
winnings. Rather, the district court based the fine on the house that Ms.
Basurto currently owns, which has a tax-assessment value of $33,689. And
Ms. Basurto did not present any evidence suggesting that she is unable to
sell her house or obtain a loan with the house as collateral.
The second line of cases indicates that the court should inquire into
the actual availability of a defendant’s uncertain assets. These cases do not
5
See, e.g., United States v. Wong, 40 F.3d 1347, 1383 (2d Cir. 1994)
(concluding that the district court erred by basing the defendant’s future
ability to pay on the possibility that the defendant might win the lottery);
United States v. Granados, 962 F.2d 767, 774 (8th Cir. 1992) (remanding
for reconsideration of the defendant’s ability to pay a fine based on the
value of his house because his equity in the house was unknown); United
States v. Washington-Williams, 945 F.2d 325, 327 (10th Cir. 1991)
(concluding that the district court erred because the defendant had shown
that she no longer had any equity in the rental property relied upon by the
district court).
6
See, e.g., United States v. Barcelon, 833 F.2d 894, 898 (10th Cir.
1987) (holding that in considering whether the defendant was entitled to
appointment of counsel, the court could rely on the potential repayment of
a $20,000 gambling debt, but only upon inquiry into the likelihood of
repayment).
8
apply because Ms. Basurto does not question the value of her equity
interest in the house and the district court specifically addressed Ms.
Basurto’s ability to pay the fine based on her equity in the house. Though
Ms. Basurto questioned her ability to sell the house or to obtain a loan, she
did not present any evidence to this effect.
Based on the evidence presented, the district court acted within its
discretion in imposing the $13,133.33 fine.
IV. The district court did not err when analyzing the hardship that
the fine imposed on Ms. Basurto.
The district court reasoned that the hardship to Ms. Basurto and her
ability to pay are separate inquiries:
Once the Court decided that–despite [Ms. Basurto’s] minimal
assets, the third parties living in [Ms. Basurto’s] home, and the
other factors–it should fine her, the burden shifted to [Ms.]
Basurto to prove she could not afford to pay that fine. . . .
While the difficulty a fine will cause is certainly relevant when
she is arguing that the Court should not impose a fine, it is not
relevant once the Court decides to impose a fine. At that stage,
difficulty to the defendant is not the issue; the sole issue is
whether [Ms. Basurto] can pay the fine.
R., vol. I at 254. Ms. Basurto challenges this reasoning, arguing that the
district court should have treated hardship as part of the ability-to-pay
analysis. 7 According to Ms. Basurto, hardship is a necessary component of
that analysis. We conclude that the district court did not err.
7
In her reply brief, Ms. Basurto offers a different interpretation of the
district court’s language; she argues that this language suggests that
hardship is immaterial regarding the amount of the fine. But Ms. Basurto
9
In deciding whether to impose a fine and how much the fine should
be, the district court must consider the sentencing factors in 18 U.S.C.
§ 3572(a). 8 Section 3572(a) requires the district court to consider factors
including the defendant’s income, earning capacity, financial resources,
and the burden of the fine on the defendant. 18 U.S.C. § 3572(a)(1)-(2).
Similarly, the guidelines require the district court to consider the
defendant’s ability to pay and the burden on the defendant. U.S.S.G.
§ 5E1.2(a), (d)(2)-(3) (2014).
Ms. Basurto contends that hardship could affect her ability to pay.
We disagree. The statutory provisions and the guidelines separately list the
defendant’s ability to pay and the hardship the fine would impose. Ms.
Basurto elsewhere recognizes this distinction, stating that “[t]he
[sentencing] factors that must be considered also include those specific to
fines: the defendant’s ability to pay, which is determined by the
defendant’s income, earning capacity, and financial resources, 18 U.S.C.
§ 3572(a)(1), U.S.S.G. § 5E1.2(d)(2); [and] the hardship the fine will
impose upon the defendant, her family and her financial resources,
did not raise this interpretation of the district court’s language until her
reply brief. As a result, we decline to consider this argument. See United
States v. Hunter, 739 F.3d 492, 495 (10th Cir. 2013) (declining to consider
an argument omitted in the appellant’s opening brief).
8
The district court was also required to consider the sentencing factors
in 18 U.S.C. § 3553(a). But the district court’s consideration of the factors
in § 3553(a) is not at issue in this appeal.
10
§ 3572(a)(2), § 5E1.2(d)(3) & (8) . . . .” Appellant’s Opening Br. at 44. As
Ms. Basurto implicitly admits in this passage, hardship and ability to pay
are distinct considerations.
The district court recognized this distinction by explaining that
hardship does not affect Ms. Basurto’s ability to pay, for she either can pay
the fine or she can’t. As a result, the district court did not err when
treating ability to pay and hardship as separate inquiries.
V. The district court did not rely on clearly erroneous facts in
finding that (1) Ms. Basurto’s family had known about her drug
activity and (2) Ms. Basurto’s house was connected to her drug
activity.
A district court errs procedurally when it imposes a fine based on
clearly erroneous facts. United States v. Lente, 647 F.3d 1021, 1030 (10th
Cir. 2011). Ms. Basurto argues that the district court clearly erred by
relying on two facts: (1) the family members living with Ms. Basurto had
known about the illegal drug activity and could have stopped it, and (2)
Ms. Basurto’s house had been connected to her illegal behavior. 9 In our
view, these factual findings were not clearly erroneous.
9
Ms. Basurto also argues that the district court clearly erred by
relying on the possibility that Ms. Basurto would be able to sell or
mortgage her home. These arguments are addressed above in Part III.
11
The record includes three facts supporting the district court’s finding
that several of Ms. Basurto’s family members were aware of Ms. Basurto’s
drug activity. 10
First, Ms. Basurto’s daughter knew the combination to a safe in the
house that contained methamphetamine, cash, a handgun, and a key to
another safe containing more cash. R., vol. II at 6-7. In fact, the daughter
 opened the safe for the police because Ms. Basurto had claimed
that she did not know the combination and
 claimed that some of the cash from the safe was hers.
Second, methamphetamine was found in the son-in-law’s car.
Third, Ms. Basurto kept items consistent with drug dealing—a scale,
small plastic baggies, and a razor blade—in plain view in her bedroom.
Based on these three facts, the district court could have reasonably
found that several of Ms. Basurto’s family members had known about the
drug activity and chose to continue residing with Ms. Basurto anyway.
In addition, the district court could have reasonably found that Ms.
Basurto had used her house to “further [her] drug dealing enterprise[].” R.,
vol. I at 251. As noted, Ms. Basurto kept cash, drugs, and a handgun in her
house. Even if Ms. Basurto conducted drug transactions elsewhere, the
10
Ms. Basurto’s one-year-old granddaughter also lived with Ms.
Basurto. Ms. Basurto argues that “of course . . . [the] granddaughter was
completely innocent.” Appellant’s Opening Br. at 47-48. The
granddaughter’s presence in the house does not affect our analysis.
12
district court did not clearly err by finding that Ms. Basurto’s house had
played a role in the illegal activity.
We conclude that the district court did not clearly err in finding that
(1) Ms. Basurto’s live-in family members had known of the drug crimes,
and (2) Ms. Basurto’s house had been connected to the drug crimes.
VI. The district court did not abuse its discretion by failing to
address the risk of recidivism caused by the fine.
Ms. Basurto also argues that the district court failed to consider that
imposing a fine would increase her risk of recidivism. This argument
relates to the district court’s general discretion to weigh the sentencing
factors and impose a fine. See 18 U.S.C. § 3553(a)(2)(B)-(C). The
$13,133.33 fine fell within the guideline range. As a result, the court
needed only to provide a general statement of reasons for the fine. United
States v. Ruiz-Terrazas, 477 F.3d 1196, 1199 (10th Cir. 2007).
The district court entertained Ms. Basurto’s sentencing arguments,
holding two sentencing hearings, ordering and reviewing supplemental
briefing, providing a general statement of reasons for imposing the fine,
and stating that the relevant sentencing factors had been considered. Thus,
the court showed that it had considered the sentencing factors. See id. at
1200 (stating that we must respect Congress’s decision not to require
specificity for sentencing decisions within the guidelines); United States v.
Jarrillo-Luna, 478 F.3d 1226, 1229 (10th Cir. 2007) (rejecting the
13
defendant’s argument that “a district court must address each and every
argument for leniency that it rejects in arriving at a reasonable sentence”),
overruled on other grounds by United States v. Lopez-Macias, 661 F.3d
485 (10th Cir. 2011). In considering the sentencing factors, the district
court expressly considered the recidivism risk posed by the fine and
accounted for the possibility that a large fine might “nudge [Ms. Basurto]
into further profit-bearing criminal activity that she might not otherwise
commit.” Supp. R. at 23.
The district court did not abuse its discretion by omitting discussion
of the risk of recidivism from imposition of the fine.
VII. Disposition
We affirm.
14