United States v. James Whitley ( 2013 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-4062
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
JAMES EDWARD WHITLEY,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Wilmington. Louise W. Flanagan,
District Judge. (7:10-cr-00105-FL-1)
Argued: February 1, 2013 Decided: September 9, 2013
Before GREGORY and KEENAN, Circuit Judges, and Robert E. PAYNE,
Senior United States District Judge for the Eastern District of
Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion. Senior Judge Payne
wrote a separate opinion concurring in part and concurring in
the judgment.
ARGUED: James Ryan Hawes, EDMISTEN & WEBB, Raleigh, North
Carolina, for Appellant. Jennifer P. May-Parker, OFFICE OF THE
UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee.
ON BRIEF: Thomas G. Walker, United States Attorney, Kristine L.
Fritz, Assistant United States Attorney, OFFICE OF THE UNITED
STATES ATTORNEY, Raleigh, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
James Edward Whitley pleaded guilty to charges of wire
fraud, in violation of 18 U.S.C. § 1343, and money laundering,
in violation of 18 U.S.C. § 1957, based on his activities in
conducting a fraudulent investment scheme. The district court
found that under the United States Sentencing Guidelines (the
guidelines), Whitley’s advisory range of imprisonment was 57 to
71 months on each count. Upon determining that sentences within
the guidelines range would be insufficient, the court imposed
concurrent sentences of 120 months’ imprisonment on the two
counts.
On appeal, Whitley argues that the district court committed
procedural error in its sentencing determination because the
court did not specify whether it was imposing departure-based
sentences under the guidelines, or instead was imposing variant
sentences based on the factors set forth in 18 U.S.C. § 3553(a).
Whitley further argues that the sentences are substantively
unreasonable because they are excessive. Upon our review, we
conclude that the district court did not commit procedural or
substantive error as alleged. Accordingly, we affirm the
district court’s judgment.
3
I.
In September 2010, a grand jury issued a twenty-count
indictment charging Whitley with six counts of wire fraud and
fourteen counts of money laundering. These charges resulted
from a government investigation revealing that Whitley engaged
in a three-year scheme of defrauding friends, family members,
and acquaintances (collectively, the victims), who had invested
their money with Whitley. Whitley solicited funds from the
victims by representing that he was in the business of brokering
purchase order factoring contracts. 1 Whitley told the victims
that he had contracts with certain companies, that the victims’
funds would be invested in those companies, and that the victims
would receive their return of capital after the expiration of
the companies’ factoring contracts. Whitley provided the
victims with promissory notes specifying both interest rates and
due dates.
Whitley did not use any of the funds he received from the
victims to invest in a factoring business. Instead, Whitley
used the funds to further his fraudulent scheme and for his
personal use. For instance, as is typical of a Ponzi scheme,
1
A “purchase order factoring contract” is needed when a
supplier requires that a buyer pay for goods by cash on
delivery, but the buyer wants to purchase the goods on 30 to 60
day terms. The purchase order contractor agrees to pay the
supplier upon delivery of the goods, which enables the buyer to
delay payment for a specified period of time.
4
Whitley used some of the funds he received from later investors
to pay initial investors interest on the money they had
provided, thereby creating the impression that the investment
was successful. Whitley also used some of the proceeds from his
scheme to pay off a construction loan for his secondary
residence, a beach house on Bald Head Island, North Carolina.
Additionally, Whitley used some funds provided by the victims to
take beach vacations to the Caribbean and ski trips to Colorado.
Whitley’s scheme affected at least 25 victims and resulted in a
collective loss of about $7 million.
Whitley and the government entered into a plea agreement,
under which Whitley agreed to plead guilty to one count of wire
fraud and one count of money laundering in exchange for the
government agreeing to dismiss the other 18 counts alleged in
the indictment. The parties also stipulated in the plea
agreement that the amount of loss was between $2.5 million and
$7 million for purposes of Whitley’s advisory guidelines
sentencing range. After the district court accepted Whitley’s
guilty plea, the United States Probation Office prepared
Whitley’s presentence investigation report (PSR), in which the
5
probation officer calculated an advisory guidelines range of 57
to 71 months’ imprisonment. 2
At Whitley’s sentencing hearing, the district court adopted
the probation officer’s calculations concerning Whitley’s
advisory guidelines range. The district court also heard
testimony from six victims concerning the impact of Whitley’s
fraudulent scheme on their lives. Additionally, counsel from
the government read statements from several other victims who
were unable to attend the hearing.
The evidence presented at the sentencing hearing showed
that Whitley’s conduct created significant emotional
consequences for some victims, contributed to the demise of a
marriage, and impaired some of the victims’ retirement and
education plans. The victims’ statements and testimony also
described Whitley’s tenacious and persistent pursuit of
investment funds, the manner in which Whitley lied to the
victims when they inquired about their investments, and
Whitley’s lack of remorse toward them and his failure to attempt
to repay the victims for their losses. The government asked
that the district court sentence Whitley to a term of
imprisonment “at the upper end” of his guidelines range, while
2
This range was calculated based in part on the parties’
agreement concerning the amount of loss, which resulted in a
total offense level of 25 under the guidelines.
6
Whitley’s counsel requested sentences “within the guideline[s]
range.”
After receiving this evidence and considering the parties’
arguments, the district court sentenced Whitley to a term of
imprisonment of 120 months on each count, to be served
concurrently. The court stated that it considered Whitley’s
advisory guidelines range and the sentencing factors set forth
in 18 U.S.C. § 3553(a), and explained that the court did not
think “that the advice of the guidelines reflects the [§
3553(a)] factors fully[,] [m]ost particularly, the need to
promote respect for the law and to discourage this type of
criminal conduct.” The court noted that Whitley “preyed on
people who had reason to trust [him],” that Whitley’s tactics
were aggressive and persistent, and that the impact of Whitley’s
conduct was “overwhelming.” The court also observed that
Whitley continued to conduct his fraudulent scheme even after
becoming aware that the government was investigating his
activities. Near the end of the hearing, the district court
provided further explanation why the court had “gone above the
guideline[s] range,” stating that:
[T]he guideline[s] sentence does not accomplish [sic]
in this case, given the pervasive nature of the scheme
and the persons upon whom [Whitley] preyed and the
impact upon those individuals, for all these reasons,
also including what appears to be a lack of penitence
on the part of [Whitley] where there’s been [an]
opportunity . . . given [to] him by the Court to begin
7
to collect funds. I’m compelled to conclude that he’s
a very dangerous person and that there’s a complete
lack of respect for the law.
In announcing the sentences from the bench, the district
court mentioned the § 3553(a) factors on several occasions but
did not use either the term “variance” or the term “departure”
in explaining the sentences. Notably, Whitley’s counsel did not
ask the court during the sentencing hearing to specify whether
the court was departing from the advisory guidelines range or
instead was imposing variant sentences. After the court issued
its judgment and written statement of reasons, Whitley timely
filed a notice of appeal.
II.
A.
We first address Whitley’s challenge to the procedural
reasonableness of his sentences. As a general matter, we review
a district court’s imposition of a sentence, whether within or
outside a defendant’s advisory guidelines range, under a
deferential abuse-of-discretion standard. Gall v. United
States, 552 U.S. 38, 41 (2007). The government, however,
asserts that Whitley’s procedural reasonableness challenge is
subject to review only for plain error, because Whitley did not
raise in the district court the argument he presents here. See
8
United States v. Olano, 507 U.S. 725, 732-34 (1993) (discussing
plain error standard of review).
We need not determine whether the more rigorous plain error
standard applies in this case, because we conclude that the
district court did not commit procedural error as alleged by
Whitley, plain or otherwise. Whitley’s sole contention
concerning procedural error is that the district court erred by
“fail[ing] to specify at the sentencing hearing whether [the
court] departed or varied in doubling the advisory guidelines
[range].” Br. of Appellant at i, 10. Whitley concedes that
under our precedent, a district court is not required to “first
look to whether a departure is appropriate before varying.” See
United States v. Diosdado-Star, 630 F.3d 359, 366 (4th Cir.
2011) (citation omitted). However, Whitley contends that a new
sentencing hearing is required because the district court
allegedly failed to state whether it varied or departed in
determining the 120-month sentences, and thus that the court
violated the general principle stated in Diosdado-Star that a
court must “adequately explain the chosen sentence to allow for
meaningful appellate review and to promote the perception of
fair sentencing.” Id. at 365 (citation omitted); see Gall, 552
U.S. at 51 (listing ways in which a district court may commit
procedural error, including by failing to adequately explain the
chosen sentence).
9
We reject Whitley’s argument because it is based on his
mistaken assertion that there is “no way to determine how the
[district] court arrived at the 120 month sentence[s].” Br. of
Appellant at 12. The record of the sentencing proceedings
refutes Whitley’s argument, and shows that the district court
imposed variant sentences, rather than departure-based
sentences.
The term “departure” has a unique meaning under the
guidelines, and “refers only to non-Guidelines sentences imposed
under the framework set out in the Guidelines.” Irizarry v.
United States, 553 U.S. 708, 714 (2008). Here, although the PSR
identified a possible basis for departure under U.S.S.G. §
2B1.1(b)(1), 3 the district court did not focus either on
Whitley’s offense level or on any fees or other similar costs
incurred. Thus, we conclude that the sentences were not imposed
on the basis of this guidelines provision. Nor did the district
court give the parties notice that the court was considering the
imposition of departure-based sentences for any other reason, as
3
Under Application Note 19(A)(iii) to U.S.S.G. §
2B1.1(b)(1), a district court may make an upward departure to a
defendant’s guidelines range in cases in which the offense level
“substantially understates the seriousness of the offense,” on
account of the offense involving a substantial amount of
interest, finance charges, late fees, penalties, or “other
similar costs, not included in the determination of loss.” The
PSR mentioned this provision, but the probation officer did not
make a recommendation concerning whether Whitley’s sentence
should be increased based on such a departure.
10
would be required under Rule 32(h) of the Federal Rules of
Criminal Procedure.
By contrast, “variant” sentences are drawn from
consideration of the sentencing factors set forth in § 3553(a).
See Irizarry, 553 U.S. at 714-15; see also United States v.
Rivera-Santana, 668 F.3d 95, 100 n.6 (4th Cir. 2012) (discussing
the difference between a departure, a sentence imposed by
reference to the defendant’s guidelines range, and a variance,
“a non-Guidelines sentence” that is justified on the basis of
the § 3553(a) factors) (citation omitted). During the
sentencing hearing, the district court referred frequently to
certain factors set forth in § 3553(a) in explaining Whitley’s
sentences. Moreover, the written statement of reasons issued by
the district court specified that the court imposed sentences
“outside the advisory sentencing guideline system,” 4 and that
“the court varied upwardly to a sentence of 120 months[’]
imprisonment.” (Emphasis added.) Based on these statements in
the record, we easily conclude that the district court imposed
variant sentences, not departure-based sentences. Accordingly,
4
The statement of reasons form includes a “check box” that
would allow a court to indicate departure-based sentences.
However, the district court did not mark that box denoting
departure-based sentences, and instead marked the box indicating
sentences based outside the guidelines system.
11
we hold that Whitley’s procedural reasonableness claim lacks any
merit.
In reaching this conclusion, we additionally observe that
Whitley has not challenged the validity of our holding in
Diosdado-Star that a district court is not required to consider
whether any departures under the guidelines are applicable
before imposing a variant sentence. See 630 F.3d at 365-66. At
oral argument in this case, however, this Court raised the
question whether the November 2010 amendments to U.S.S.G. §
1B1.1 5 have undermined the above holding in Diosdado-Star.
Nevertheless, we do not answer that question here, because
Whitley waived any such argument due to his failure to raise it
in his brief to this Court. See Equal Rights Ctr. v. Niles
Bolton Assocs., 602 F.3d 597, 604 n.4 (4th Cir. 2010) (holding
that the appellant waived an argument by not raising it in the
opening brief, even though that issue was discussed by the panel
and the parties during oral argument); see also United States v.
5
The current iteration of that commentary section, titled
“Application Instructions,” was enacted after appellate briefing
in Diosdado-Star but before oral argument and the issuance of
the opinion in that case. The Application Instructions provide
that district courts “shall determine the kinds of sentence and
the guideline range as set forth in the guidelines . . . by
applying the provisions of this manual in the following order,”
and lists the consideration of any departures from the
guidelines before listing the consideration of the § 3553(a)
factors. The parties in Diosdado-Star did not bring to this
Court’s attention this revision to U.S.S.G. § 1B1.1.
12
Hudson, 673 F.3d 263, 268 (4th Cir. 2012) (holding that issues
not raised in opening brief are waived). Moreover, Whitley
cites with approval in his brief the very proposition in
Diosdado-Star that this Court raised during oral argument in
Whitley’s appeal, namely, that “a district court is not required
to ‘first look to whether a departure is appropriate before
varying.’” Br. of Appellant at 10 (quoting Diosdado-Star, 640
F.3d at 365-66). Accordingly, we hold that Whitley’s reliance
on Diosdado-Star and his failure to challenge its vitality in
light of amended U.S.S.G. § 1B1.1 precludes consideration of
that issue here.
B.
Finally, we determine whether the district court abused its
discretion in sentencing Whitley to concurrent terms of 120
months’ imprisonment, sentences well above his advisory
guidelines range. In conducting a review of alleged substantive
sentencing error, we review the sentences imposed for
reasonableness, regardless whether they were based on the
guidelines or were variant sentences. United States v. Evans,
526 F.3d 155, 164 (4th Cir. 2008). When reviewing sentences
that are outside the defendant’s advisory guidelines range,
imposed either by departure or by variance, we consider whether
the district court “acted reasonably both with respect to its
decision to impose such a sentence and with respect to the
13
extent of the divergence from the sentencing range.” United
States v. Hernandez-Villanueva, 473 F.3d 118, 123 (4th Cir.
2007). In undertaking this analysis, we “must defer to the
trial court and can reverse a sentence only if it is
unreasonable, even if the sentence would not have been the
choice of the appellate court.” Evans, 526 F.3d at 160(emphasis omitted).
In sentencing Whitley on the basis of the § 3553(a)
factors, the district court observed the “pervasive nature” of
Whitley’s fraudulent scheme, the manner in which he had
perpetuated the fraud, and his lack of remorse. The court also
considered the testimony of Whitley’s victims, who discussed the
impact of Whitley’s fraudulent scheme on their lives. See,
e.g., id. at 163 (discussing with approval the district court’s
consideration of the victims’ statements in affirming a sentence
that was more than four times as much as the upper end of the
defendant’s advisory guidelines range). Most notably, the
district court discussed the need for sentences in excess of the
guidelines range to protect the public, because when Whitley was
“on notice of [the] investigation and notice of wrongdoing [he]
continued to prey on others.” The district court also noted
that substantial terms of imprisonment were justified by the
need to provide adequate deterrence regarding similar criminal
conduct and to promote respect for the law. After reviewing
14
these reasons provided by the district court, as well as the
entire sentencing record and the parties’ arguments, we conclude
that Whitley’s concurrent sentences of 120 months’ imprisonment
are not substantively unreasonable.
III.
For these reasons, we affirm the district court’s judgment.
AFFIRMED
15
PAYNE, Senior District Judge, concurring in part and concurring
in the judgment:
I agree with the majority that Whitley’s sentence is
substantively reasonable. However, for the reasons that follow,
I submit that Whitley’s asserted procedural error should be
reviewed under the plain error standard; that there was plain
error; but that the error did not affect Whitley’s substantial
rights.
I.
Whitley and the government disagree about the applicable
standard of review of the alleged procedural error. Whitley
contends that the abuse of discretion standard applies. The
government contends that the plain error standard of review
controls because the challenges raised by Whitley are presented
for the first time on appeal.
In United States v. Lynn, 592 F.3d 572, 576 (4th Cir.
2010), the Court held “that plain-error review applies when a
party lodges an objection to the sort of procedural sentencing
error at issue here [inadequate explanation of sentencing] for
the first time on appeal.” Id. at 577. See United States v.
Hargrove, 625 F.3d 170, 183-84 (2010) (pointing out that Lynn
called for plain error review when a procedural sentencing error
is raised for the first time on appeal). Also, in Lynn, the
Court explained how a party can preserve a claim of procedural
16
sentencing error. The Court stated that, “[b]y drawing
arguments from § 3553 for a sentence different than the one
ultimately imposed, an aggrieved party sufficiently alerts the
district court of its responsibility to render an individualized
explanation addressing those arguments, and thus preserves its
claim.” Id. at 578 (emphasis added). Later, in United States
v. Boulware, 604 F.3d 832, 838 (4th Cir. 2010), citing Lynn, the
Court held that “arguments made under § 3553(a) for a sentence
different than the one that is eventually imposed are sufficient
to preserve claims that the district court erred in not
adequately explaining its rejection of the sentencing
arguments.” (emphasis added).
II.
In Gall v. United States, 552 U.S. 38, 40 (2007), the
Supreme Court identified several kinds of procedural errors that
can occur at sentencing. Among them was “failing to adequately
explain the chosen sentence - including an explanation for any
deviation from the Guidelines range.” Gall, 552 U.S. at 51.
Whitley contends that:
[t]he district court procedurally erred when it failed
to specify at the sentencing hearing whether it
departed or varied in imposing a sentence that doubled
the guideline range. This error resulted in a failure
to adequately explain its decision to impose the 120
month sentence and, therefore, the sentence must be
vacated.
17
Appellant’s Brief, at 10. Thus, Whitley raises the kind of
procedural error that is identified in the last phrase of the
exemplary list of procedural errors provided in Gall.
To decide whether Whitley preserved that error, it is
necessary to determine whether, in the sentencing proceedings,
Whitley drew “̒arguments from § 3553 for a sentence different
than the one ultimately imposed . . . .’” United States v.
Powell, 650 F.3d 388, 395 (4th Cir. 2011) (citation omitted)
(emphasis in original); Boulware, 604 F.3d at 838; Lynn, 592
F.3d at 578. The arguments necessary to preserve an error of
this sort can be set forth in written sentencing positions filed
before the sentencing hearing or in arguments made at the
hearing. Neither Whitley nor the government filed a written
pre-sentencing submission. Therefore, the record at the
sentencing hearing must be examined to see whether there Whitley
drew any argument from § 3553(a) for a sentence that was
different than the one the court ultimately imposed. The record
demonstrates that he did not.
In his sentencing argument, Whitley’s counsel made four
points: (1) that Whitley had made a bad decision for which he
had “accepted responsibility” and “entered a plea agreement;”
(2) that Whitley had suffered in his personal life for that bad
decision and had been forced into bankruptcy; (3) that Whitley’s
18
wife had divorced him and his children had “alienated him;” and
(4) that “his property has been foreclosed on.” Having made
those points, counsel then said, “we ask that you sentence him
to a sentence within the guideline range.” 1
Quite clearly, Whitley’s arguments for a within-Guideline
sentence cannot be said to be drawn from the factors in §§
3553(a)(2)-(7). That leaves § 3553(a)(1), “the nature and
circumstances of the offense and the history and characteristics
of the defendant.” Whitley’s sentencing points do not refer to
“the nature and circumstances of the offense.” Nor can the four
points raised in Whitley’s sentencing argument be fairly related
to either his history or characteristics. Rather, in one way or
another, each point makes note of how the offense has affected
Whitley (points (2)-(4)) or recites a neutral fact, acceptance
of responsibility by pleading guilty, (point (1)).
The oblique references to the effects of Whitley’s crime on
him and to the fact of a guilty plea, like the oblique
references in United States v. Powell, do not “̒sufficiently
alert the district court of its responsibility to render an
individualized explanation addressing those arguments’ under §
3553” (quoting Lynn, 592 F.3d at 578). In sum, Whitley did not
1
Counsel also asked that Whitley be confined in a specific
nearby prison and that he be allowed to “self-report” to begin
service of the sentence.
19
“̒draw[] arguments from § 3553 for a sentence different than the
one ultimately imposed,’” and thus, even under the quite lenient
standard for preservation of such an error that the Court has
adopted, Whitley did not preserve the procedural error that he
now asserts
III.
To demonstrate plain error, Whitley is obligated to
establish that: (1) the trial court erred, (2) the error is
clear and obvious, and (3) the error affected his substantial
rights. United States v. Olano, 507 U.S. 725, 732-34 (1993);
Hargrove, 625 F.3d at 184. If Whitley discharges that
responsibility, the Court has discretion to recognize the error,
but need not do so unless it “seriously affect[s] the fairness,
integrity or public reputation of judicial proceedings.” Olano,
507 U.S. at 736 (quotations and alterations omitted); Hargrove,
625 F.3d at 184.
Whether an error is plain is judged “‘at the time of
appellate consideration.’” Henderson v. United States, ___ U.S.
___, 133 S. Ct. 1121, 1130 (2013) (citing Johnson v. United
States, 520 U.S. 461, 468 (1997)). That is so even if the issue
was previously unsettled. Id.20
A.
Whitley argues that the procedural error occurred here
because, in imposing the non-Guideline sentence, the district
court did not specify whether the sentence was one chosen by way
of departure or by way of variance. For that reason, says
Whitley, the sentence was not adequately explained and
meaningful appellate review has been foreclosed. To Whitley,
the failure to articulate the mode of deviation from the
Guidelines is of particular significance because the PSR
identified a possible predicate for departure under U.S.S.G. §
2B.1(b)(1) and then outlined the findings necessary to depart
thereunder, none of which did the district mention in imposing
the sentence. Whitley also posits other possible bases for
departure that the district court may have had in mind, but
about which it did not remark. In perspective of the
availability of these possible predicates for departure, it is
argued that the district court’s failure to express whether it
was departing or varying constituted procedural error.
In support of his argument, Whitley cites United States v.
Diosdado-Star, 630 F.3d 359, 365 (4th Cir. 2011). However,
Diosdado-Star actually is contrary to the substance of Whitley’s
position because it reasons from the premise that the terms
“departure” and “variance” are interchangeable terms, id. at
364-65, a concept that is the polar opposite of Whitley’s
21
position. And, Diosdado-Star holds that “the method by which
the district court deviates from the Guidelines range does not
alter (1) the review in which courts of appeals must engage, or
(2) the justification the district court must provide,” id. at
365, holdings that are antithetical to the core of Whitley’s
argument. Thus, although Whitley’s argument pays lip service to
Diosdado-Star, in substance, his argument proceeds from the
premise that a non-Guideline sentence cannot be meaningfully
explained or reviewed unless the district court actually
articulates whether the methodology of departure or the
methodology of variance is the means of deviating from the
Guideline range, disposes of any possible ground for departure,
and then keys its explanation of the imposed sentence to the
chosen means of deviation.
Whitley’s substantive position finds support in Irizarry v.
United States, 553 U.S. 708, 714 (2008) which clarifies that,
comments to the contrary in Gall notwithstanding, “variances”
and “departures” are quite different kinds of sentencing modes.
A variance is a sentence outside the advisory Guideline range,
the imposition of which depends on an analysis of the factors in
§ 3553(a). A departure is a sentence outside the advisory
Guideline range that depends on an analysis of the applicable
22
departure provisions in the Guidelines. Irizarry, 553 U.S. at
714-15. 2
Those differences are significant at the district court
level because whether to depart requires a different analysis
than that required in deciding whether to vary. And, the
differences are significant on appellate review, inter alia,
because the standard of review for a departure is de novo, see
Pepper v. United States, 131 S. Ct. 1229, 1244 (2011), whereas
variances are reviewed for abuse of discretion.
Whitley’s argument finds further support in the Guidelines,
specifically Chapter One, Part B General Application Principles,
§ 1B1.1 Application Instructions, which provides:
(a) The court shall determine the kinds of sentence and
the guideline range as set forth in the guidelines by
applying the provisions of this manual in the
following order, except as specifically directed:
[stating that the court shall determine the range as
set forth in §§ 1B1.1(a)(1)–(7) by applying Chapters
Two, Three, Four and Five, and then determine the
sentencing requirements and options (8).]
(b) The court shall then consider Parts H and K of Chapter
Five, Specific Offender Characteristics and
Departures, and any other policy statements or
commentary in the guidelines that might warrant
consideration in imposing sentence. See 18 U.S.C. §
3553(a)(5).
2
A recent opinion of this Court, United States v. Rivera-
Santana, 668 F.3d 95 (4th Cir. 2012), has taken the same view.
Relying on Irizarry, the Court there explained that “[t]he terms
‘variance’ and ‘departure’ describe two distinct sentencing
options available to a sentencing court,” and described the
differences between the two sentencing options. Id. at 100 n.6.
23
(c) The court shall then consider the applicable factors
in 18 U.S.C. § 3553(a) taken as a whole. See 18 U.S.C.
§ 3553(a).
U.S.S.G. § 1B1.1 (Nov. 1, 2012) (emphasis added) (hereafter
“§ 1B1.1”).
The Court, of course, is bound by the General Application
Principles and the Application Notes in interpreting the
Guidelines. United States v. Price, 711 F.3d 455, 458 (4th Cir.
2013) (citing United States v. Hudson, 272 F.3d 260, 263 (4th
Cir. 2001); United States v. Banks, 130 F.3d 621, 624 (4th Cir.
1997)). That is so because even after the Guidelines were held
to be advisory, 3 they “continue to play an important role in the
sentencing process.” United States v. Dean, 604 F.3d 169, 173
(4th Cir. 2010). 4
Further, it is settled that “[t]he Sentencing Commission
promulgates the guidelines by virtue of an express congressional
delegation of authority for rulemaking,” and thus, “the
guidelines are the equivalent of legislative rules adopted by
federal agencies.” Stinson v. United States, 508 U.S. 36, 44-45
3
United States v. Booker, 543 U.S. 220, 234 (2005).
4
In Kimbrough v. United States, 552 U.S. 85, 101 (2007)
(relying on Gall), the Supreme Court directed that a sentencing
court must “give respectful consideration to the Guidelines,” as
required by 18 U.S.C. § 3553. See also Pepper v. United States,
___ U.S. ___, 131 S. Ct. 1229, 1247 (2011) (“Accordingly, we
have instructed that district courts must still give ‘respectful
consideration’ to the now-advisory Guidelines (and their
accompanying policy statements).”).
24
(1993). And, as this Court has put it: “[t]he [Sentencing]
Commission’s interpretive commentary is ‘akin to an agency’s
interpretation of its own legislative rules,’” and “is therefore
entitled to substantial deference.” United States v. Mason, 284
F.3d 555, 559 (4th Cir. 2002) (citations omitted). “As a
result, Guidelines commentary that ‘interprets or explains a
guideline is authoritative unless it violates the Constitution
or a federal statute, or is inconsistent with, or a plainly
erroneous reading of, that guideline.’” Id. (quoting Stinson,
508 U.S. at 38, 113 S. Ct. at 1915). In United States v. Hood,
628 F.3d 669 (4th Cir. 2010), well after Booker made the
Guidelines advisory, the Court, in deciding the meaning of crime
of violence, recognized the continuing force of Stinson. 5
The amendment that is reflected in § 1B1.1 was implemented
to help secure consistency in the application of the Guidelines
after they were made advisory by Booker. As the majority
opinion explains, Diosdado-Star did not mention Irizarry or §
1B1.1 which took effect on November 1, 2010, almost three months
before Diosdado-Star was issued and slightly more than a month
before arguments were heard. Also, the briefs in Diosdado-Star
5
In Hood, the Court observed that “[t]he Supreme Court has
long held that ‘commentary in the Guidelines Manual that
interprets or explains a guideline is authoritative unless it
violates the Constitution or a federal statute, or is
inconsistent with, or a plainly erroneous reading of, that
guideline.’” Id. at 672.
25
were filed before the amendment took effect, and they do not
mention the amendment.
The Reason for Amendment section accompanying the amendment
to § 1B1.1 points out that, after Booker, most circuits,
including this one, used the three-step approach specified in
the amendment and, indeed, cites United States v. Moreland, 437
F.3d 424, 433 (4th Cir. 2006), as support for that approach. The
same section articulated that “[a] ‘variance’ - i.e., a sentence
outside the guideline range other than as provided for in the
Guidelines Manual [a departure] - is considered by the court
only after departures have been considered.” Amendment 741
(Effective Date: Nov. 1, 2010; 2011 WL 5984683, at *1113
(emphasis added).
Hence, the sentencing catechism in effect at the time of
appellate consideration recognizes that there are significant
differences between “departures” and “variances,” and requires
that, before varying, a court must first consider whether a
departure sentence is in order. And, that logically means that
an adequate explanation of a non-Guideline sentence should state
whether the deviation from the Guidelines is by way of departure
or by way of variance. And, where, as here, there is an
available ground of departure identified in the PSR, the
district court would have to address (and accept or reject) that
ground before imposing a variance sentence.
26
B.
Thus, on appeal, the Court is confronted with Guideline
provisions that are at squarely odds with a published opinion
issued by the panel of this Court in Diosdado-Star. At the same
time, Henderson necessitates application of the law in effect at
the time of appellate consideration. If, as I understand to be
the rule, deference is owed to § 1B1.1, a regulation that has
the force of law, it would appear that this panel could not
follow Diosdado-Star to apply the law in effect at the time of
appellate consideration.
However, under the principle of interpanel accord,
“customarily a panel considers itself bound by the prior
decision of another panel, absent an in banc overruling or a
superseding contrary decision of the Supreme Court.” Busby v.
Crown Supply, Inc., 896 F.2d 833, 840-41 (4th Cir. 1990); see
also Mentavlos v. Anderson, 249 F.3d 301, 312 n.4 (4th Cir.
2011) (“[A] panel of this court cannot overrule, explicitly or
implicitly, the precedent set by a prior panel of this court.
Only the Supreme Court or this court sitting en banc can do
that.”).
The principle of interpanel accord, however, is not
inflexible. For example, in Derflinger v. Ford Motor Co., 866
F.2d 107, 110 (4th Cir. 1989), the Court applied the principle
of interpanel accord, but noted that a previous panel decision
27
would not be followed where there was a subsequent statutory
amendment (there a subsequent change in an applicable state
statute in a diversity case) that makes the previous decision
wrong. In United States Dep’t of Health & Human Servs. v. Fed.
Labor Regulations Auth., 983 F.2d 578, 581-82 (4th Cir. 1992),
the Court explained that “[a] decision by a panel of this court,
or by the court sitting en banc does not bind subsequent panels
if the decision rests on authority that subsequently becomes
untenable.” Id. (citing Busby, 896 F.2d at 840-41, and Faust v.
South Carolina State Highway Dep’t, 721 F.2d 934, 940 (4th Cir.
1983)).
There are no decisions in this circuit that involve
application of the interpanel accord principle to facts quite
like those presented here in which the change in law occurred
before the prior panel decision, but was not mentioned in the
panel opinion apparently because of the temporal relationship
between the change, the briefing, and the panel opinion.
However, in Moody Nat’l Bank v. GE Life & Annuity Assurance Co.,
383 F.3d 249, 252 (5th Cir. 2004), the Fifth Circuit faced an
issue quite similar to the one presented here.
In Moody Nat’l Bank, the statutory amendment went into
effect approximately two months before the release of the prior
panel decision and after oral argument and briefing in that
case. After explaining the circuit’s settled adherence to the
28
rule of interpanel accord, the Fifth Circuit explained that the
rule that a panel is “bound to follow the prior panel rulings of
this court . . . is inapplicable, however, where Congress makes
a change in statutory law that directly affects a prior panel
opinion.” Id. Observing that “it is clear that [the prior
panel] did not consider the amendments . . . or the relevant
comments thereto in reaching its decision,” id. at 253 n.5, the
Fifth Circuit decided the case in perspective of the recent
amendment. That approach, of course, is consistent with the
comments in Derflinger and with the “subsequently becomes
untenable” rationale in Fed. Labor Regulations.
Of course, the decisions in Derflinger and Fed. Labor
Regulations must be viewed in perspective of the fact that the
Court, sitting en banc, has expressed a clear preference for
adherence to the rule of interpanel accord absent an intervening
opinion from this Court sitting en banc or the Supreme Court.
McMellon v. United States, 387 F.3d 329 (4th Cir. 2004).
However, McMellon did not present the rather unusual
circumstances that are present here, circumstances that involve
the kind of approach that district courts must take respecting
the every-day judicial task of sentencing. Nor, at the time of
McMellon, had Henderson been decided requiring that plain error
be judged at the time of appellate consideration.
29
Nonetheless, as explained in United States v. White, 670
F.3d 419, 516 (4th Cir. 2012), it is the duty of the subsequent
panel to find an appropriate way to harmonize resolution of a
conflicting issue with a prior panel decision on that issue if
it is possible to do so. Unfortunately, it is not really
possible to harmonize the decision in Diosdado-Star with §
1B1.1.
Considering that the Supreme Court and this Court’s
decisions, for example in Price and Hood, require substantial
deference to the Guidelines, and taking into account that there
is no Constitutional or other infirmity here that would
foreclose such deference, I would conclude that the sentencing
approach articulated in Diosdado-Star is no longer tenable and
that it was error not to proceed as § 1B1.1 requires.
The error was plain, if measured at the time of appellate
consideration, even considering the unsettled circumstance
created by the conflict between § 1B1.1 and Diosdado-Star
because § 1B1.1 must be given substantial deference. United
States v. Henderson, ___ U.S. ___, 113 S. Ct. 1130. District
judges, and most litigants, likely would prefer the less-
structured, and quite sensible, approach reflected in Diosdado-
Star. But, as long as the Guidelines continue to be a part of
the approach to federal sentencing, and as long as they have the
force of law to which substantial deference is owed, it seems to
30
me that § 1B1.1 must be applied as the law at the time of
appellate consideration. For the foregoing reasons, I would
conclude that the error, measured at the time of appellate
consideration, is plain.
However, Whitley does not satisfy the Olano test because
his substantial rights were not prejudiced by the approach taken
by the district court. That is so because talismanic
recitations of sentencing vernacular are never necessary and a
sentence is adequately explained if the Court can determine from
the record what occurred at sentencing. United States v.
Allmendinger, 706 F.3d 330, 343 (4th Cir. 2013); United States
v. Carter, 564 F.3d 325, 328-30 (4th Cir. 2009). As the
majority opinion makes clear, the record shows that the non-
Guideline sentence imposed here was a variance, not a departure;
and, as the majority concludes, the sentence imposed was
adequately explained and is readily amenable to appellate
review.
Relying on a finding of waiver, the majority finds it
unnecessary to address the conflict between Diosdado-Star and §
1B1.1 because Whitley did not raise § 1B1.1 in his brief or at
oral argument and, in fact, purported, in his brief, to rely on
Diosdado-Star. Both of those points are correct, but, I
respectfully suggest that they do not warrant by-passing the
issue. As I understand it, “[w]hen an issue or claim is
31
properly before the court, the court is not limited to the
particular legal theories advanced by the parties, but rather
retains the independent power to identify and apply the proper
construction of governing law.” Kamen v. Kemper Financial
Services, Inc., 500 U.S. 90, 99 (1991) (rejecting contention
that petitioner waived argument by failing to raise it until
reply brief)(citing Arcadia v. Ohio Power Co., 498 U.S. 73, 77
(1990)). Further, an appellate court may consider an argument
“̒antecedent to . . . and ultimately dispositive of’ the dispute
before it, even an issue the parties fail to identify and
brief.” U.S. Nat. Bank of Oregon v. Indep. Ins. Agents of Am.,
Inc., 508 U.S. 439, 445-46 (1993). It seems to me that, in
substance, Whitley’s argument invokes the principles reflected
in § 1B1.1. And, it is the substance of an argument that
presents the issue even if the party making the argument fails
to cite the best authority in support of it. Hence, I would
conclude that Whitley’s argument presents the issue that is the
conflict between § 1B1.1 and Diosdado-Star, even though he has
not cited § 1B1.1 and even though his brief pays lip service to
Diosdado-Star.
32