United States v. Gary Graves , 908 F.3d 137 ( 2018 )

Case: 17-11276 Document: 00514717132 Page: 1 Date Filed: 11/08/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 17-11276 United States Court of Appeals
Fifth Circuit
FILED
November 8, 2018
UNITED STATES OF AMERICA,
Lyle W. Cayce
Plaintiff-Appellee, Clerk
v.
GARY DON BOYD GRAVES,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Texas
Before DAVIS, COSTA, and OLDHAM, Circuit Judges.
ANDREW S. OLDHAM, Circuit Judge:
Gary Don Boyd Graves pleaded guilty to one count of possessing child
pornography in violation of 18 U.S.C. § 2252A(a)(5)(B) and (b)(2). The district
court sentenced him to 108 months’ imprisonment followed by 10 years of
supervised release. It also ordered Graves to pay the $100 special assessment
as well as a $5,000 additional special assessment pursuant to the Justice for
Victims of Trafficking Act of 2015. See 18 U.S.C. §§ 3013(a)(2)(A), 3014(a)(3).
The additional $5,000 special assessment must be imposed on any non-
indigent person who commits certain offenses, including offenses related to
sexually exploiting children. See id. § 3014.
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As part of his plea deal, Graves generally waived his right to appeal.
Notwithstanding that waiver, Graves filed this appeal to challenge the $5,000
special assessment on the basis of his purported indigence. Whether Graves
waived his right to challenge the special assessment is a close question. But it
is one we need not answer. We instead resolve this appeal on the merits and
hold § 3014 allows district courts to consider a defendant’s future earning
capacity when determining whether a defendant is indigent. Therefore, we
conclude the district court did not err in imposing the $5,000 special
assessment and affirm its judgment.
I.
On June 14, 2017, Graves was indicted for possessing pornographic
images of pre-pubescent children. Because the magistrate judge found that he
was “financially unable to obtain counsel,” the court appointed a public
defender. After consulting with his appointed counsel, Graves decided to
accept responsibility for his crime and pleaded guilty to possessing child
pornography that included images of children under the age of twelve.
In the plea agreement, the Government and Graves agreed to minimum
and maximum penalties for Graves’s crime. The possible penalties included:
(a) imprisonment; (b) a fine; (c) a term of supervised release; (d) a mandatory
special assessment of $100 and an additional mandatory special assessment of
$5,000 if the court found Graves not indigent; (e) restitution; (f) costs of
incarceration and supervision; and (g) forfeiture of property. In the plea
agreement, Graves acknowledged that “the actual sentence imposed (so long
as it is within the statutory maximum) is solely in the discretion of the Court.”
And Graves explicitly waived his right “to appeal the conviction, sentence, fine
and order of restitution or forfeiture in an amount to be determined by the
district court.” He did, however, reserve his right to appeal “a sentence
exceeding the statutory maximum punishment.”
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In September 2017, after the plea agreement was signed, the probation
officer prepared a presentence investigation report (“PSR”). It included
information about Graves’s employment history and current financial status.
Because Graves had failed to provide requested information regarding his
finances, the probation officer relied on Graves’s June 2017 financial affidavit
in evaluating his financial condition. Based on that information, the PSR
determined Graves had no substantial assets, $874 in debt, and a monthly cash
flow of $50 after accounting for expenses. The PSR concluded that any fine or
$5,000 assessment should be imposed based on Graves’s future earning
capacity because he was employable. Graves disagreed. In his objections to
the PSR, Graves argued the court must consider only his financial condition at
the time of his sentencing, not his potential future earnings, in determining
whether to assess him $5,000.
Graves subsequently submitted additional documents showing he had
an income of $700 a month and up to $245 in monthly discretionary income.
As a result, the probation officer filed an addendum to the PSR, which updated
Graves’s financial information and reasoned that, based on Graves’s current
income, he “could pay a $5,000 assessment, in-full, in less than 2 years.” The
addendum also concluded that Graves would likely have an increased earning
potential after his release from prison. Graves continued to disagree.
At the sentencing hearing, Graves argued that he was “most certainly
indigent” and urged the district court not to impose the $5,000 special
assessment. The Government countered that the court should consider
Graves’s future earning capacity in assessing his indigence. Pointing to
Graves’s education, which included some college courses, his employment
history, and the fact that he is able bodied, the Government argued Graves
would have the ability to make payments in the future. The district court
agreed. It found that Graves “is not indigent based upon his potential future
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earning capacity” and imposed the $5,000 additional special assessment.
Graves preserved his objection to the special assessment. This appeal followed.
II.
As with other legal issues, we review the effect of an appeal waiver de
novo. United States v. Walters, 732 F.3d 489, 491 (5th Cir. 2013). We usually
employ a two-step inquiry, asking: (1) “whether the waiver was knowing and
voluntary” and (2) “whether, under the plain language of the plea agreement,
the waiver applies to the circumstances at issue.” United States v. Keele, 755
F.3d 752, 754 (5th Cir. 2014). In this case, however, neither party contests the
knowing and voluntary nature of the waiver. So we skip straight to step two—
whether the waiver bars the present appeal.
Graves’s appeal waiver expressly preserves his right to appeal “a
sentence exceeding the statutory maximum punishment.” He argues the
district court was not statutorily authorized to impose the $5,000 special
assessment because Graves is “an[ ] [ ]indigent person” under 18 U.S.C.
§ 3014(a)(3), and therefore, the sentence exceeds the statutory maximum. To
support his reading of the statutory-maximum exception to his appeal waiver,
Graves relies on appeals challenging the legality of restitution orders. Under
our precedent, an appeal waiver with a statutory-maximum exception does not
foreclose challenges to restitution awards that are unsupported by evidence of
the victims’ losses. See United States v. Chem. & Metal Indus., Inc., 677 F.3d
750, 752 (5th Cir. 2012); see also United States v. Winchel, 896 F.3d 387, 389
(5th Cir. 2018) (determining an appeal fell within a statutory-maximum
exception when “a court orders a defendant to pay restitution under § 2259
without determining that the defendant’s conduct proximately caused the
victim’s claimed losses” because “the amount of restitution necessarily exceeds
the statutory maximum”); Keele, 755 F.3d at 756 (noting “that, while defendant
has made no such argument on appeal herein, an ‘in excess of the statutory
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maximum’ challenge, if properly raised on appeal, would not be barred by an
appeal waiver” (quoting Chem. & Metal Indus., Inc., 677 F.3d at 752)).
Arguably, appeals challenging restitution orders are analogous to appeals
challenging special assessments. After all, both types of appeals turn on
whether a statute authorizes the district court to demand money from the
defendant—and hence whether the district court exceeded the “statutory
maximum” in doing so.
The Government counters that a special assessment is more analogous
to a “fine,” which falls within the plain terms of Graves’s appeal waiver. The
appeal waiver provided: “The defendant waives the defendant’s rights . . . to
appeal the conviction, sentence, [or] fine.” The Government further argues
that, even if a special assessment were analogous to a restitution order, the
appeal waiver would still apply unless the record contained no evidence to
support it. See Chem. & Metal Indus., Inc., 677 F.3d at 752 (appeal waiver
does not bar challenge to restitution order where Government concedes “there
was no finding of loss”). By contrast here, the Government observes, ample
record evidence supports the district court’s finding that Graves would be able
to pay the $5,000 special assessment based on his future earning capacity.
Fortunately, we do not need to resolve the appeal-waiver question here
because this case is easily resolved on the merits. See United States v.
Childers, No. 17-40621, 2018 WL 5259393, at *1 (5th Cir. Oct. 19, 2018) (per
curiam) (denying motion for summary dismissal of a challenge to the $5,000
special assessment when the defendant’s claim would fail even if it was not
barred by the appeal waiver); United States v. Smith, 528 F.3d 423, 424 (5th
Cir. 2008) (declining “to address the issue of whether a general appeal waiver
bars review of a restitution order when the plea agreement does not discuss
restitution” because the “appeal is more easily resolved on the merits”).
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III.
Whether Graves is “a[ ] non-indigent person” is a factual question we
review for clear error. United States v. Streaty, 735 F. App’x 140, 140 (5th Cir.
2018) (per curiam). Whether the district court applied the correct legal
standard in assessing Graves’s non-indigence, however, is a question of law we
review de novo. Pedcor Mgmt. Co. Welfare Benefit Plan v. Nations Pers. of Tex.,
Inc., 343 F.3d 355, 358 (5th Cir. 2003).
A.
1.
“We start, of course, with the statutory text.” BP Am. Prod. Co. v.
Burton, 549 U.S. 84, 91 (2006). “Unless otherwise defined, statutory terms are
generally interpreted in accordance with their ordinary meaning.” Id. Here
the statutory text provides in relevant part:
[I]n addition to the assessment imposed under section 3013, the
court shall assess an amount of $5,000 on any non-indigent person
or entity convicted of an offense under . . . chapter 110 (relating to
sexual exploitation and other abuse of children) . . . .
18 U.S.C. § 3014(a)(3). The parties focus our textual exegesis on one phrase—
“any non-indigent person”—and ask us to decide whether district courts may
consider future earning capacity in determining non-indigence in this context.
They can. That is so for three reasons.
First, the ordinary meaning of “indigent” includes a forward-looking
assessment of the defendant’s means. The word includes someone who is
presently “[w]anting,” “lacking,” or “destitute”; but it also includes someone
who is “[d]estitute of . . . means of comfortable subsistence.” WEBSTER’S NEW
INTERNATIONAL DICTIONARY 1266 (2d ed. 1954) (emphasis added). “Means”
refers to a person’s capabilities—whether a person has or lacks the capacity to
earn subsistence. The ordinary meaning of “indigent” therefore includes both
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someone who is poor today and someone who lacks the means to earn the
necessaries of life in the future.
Second, “[t]ext may not be divorced from context.” Univ. of Tex. Sw. Med.
Ctr. v. Nassar, 570 U.S. 338, 356 (2013); see also ANTONIN SCALIA & BRYAN
GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 56 (2012).
Here, the statutory context shows that a district court’s decision to impose the
assessment is forward-looking to the defendant’s future ability to pay.
Section 3014 mandates “the court shall assess an amount of $5,000 on
any non-indigent person” convicted of certain offenses, and the assessments
shall be used to provide services to trafficking victims. 18 U.S.C. § 3014(a), (c),
(h) (emphasis added). By denying district courts discretion to impose the
$5,000 additional special assessment, Congress made clear the assessment is
a mandatory part of the sentence for an enumerated offense. See Valdez v.
Cockrell, 274 F.3d 941, 950 (5th Cir. 2001) (“The word ‘shall’ is mandatory in
meaning.”).
Not only must the special assessment be imposed today, the
responsibility to pay it also persists well into the future. To increase the
possibility the assessments would be collected and used to help victims,
Congress stipulated the obligation to pay the assessment would continue for
twenty years after the release from imprisonment or the entry of judgment,
whichever is later. See 18 U.S.C. §§ 3014(g), 3613(b). 1 The duration of that
statutory obligation further underscores that a district court must impose the
assessment unless it finds the defendant could not pay it today—or at any point
for the next twenty years.
1In contrast, the obligation to pay the $100 special assessment “ceases five years after
the date of the judgment.” 18 U.S.C. § 3013(c).
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As if that were not enough, Congress also directed the Government to
collect the $5,000 special assessment like a fine. See 18 U.S.C. § 3014(f) (“The
amount assessed under subsection (a) shall . . . be collected in the manner that
fines are collected in criminal cases.”). And a defendant’s future earning
capacity is relevant to determining indigence for criminal fines. For example,
the Federal Sentencing Guidelines provide courts “shall impose a fine in all
cases, except where the defendant establishes that he is unable to pay and is
not likely to become able to pay any fine.” U.S.S.G. § 5E1.2(a) (emphasis
added). Accordingly, when determining what fine amount to impose, courts
may “consider the defendant’s ability to pay in light of his earning capacity and
financial resources.” United States v. Altamirano, 11 F.3d 52, 53 (5th Cir.
1993). In this context—a mandatory assessment, collectable for 20 years,
treated like a fine—a district court’s indigency finding should include
consideration of the defendant’s future ability to pay.
Third, our reading of the phrase “any non-indigent person” in § 3014
comports with that of our sister circuits. See United States v. Janatsch, 722 F.
App’x 806, 811 (10th Cir. 2018) (“[T]he district court here did not err in
concluding that [the defendant] would have the ability to pay the special
assessment in the future.”); United States v. Kelley, 861 F.3d 790, 801 (8th Cir.
2017) (concluding, “that in the context of § 3014 indigence determinations, an
analysis of both a defendant’s current financial situation and his ability to pay
in the future is appropriate in determining his ‘non-indigent’ status”); United
States v. Strange, 692 F. App’x 346, 349 (9th Cir. 2017) (concluding “the district
court properly took into account that [the defendant] was ‘able-bodied’ ” and
affirming its imposition of the $5,000 special assessment). Graves offers no
argument that would justify creating a circuit split on this issue. See Alfaro v.
Comm’r of Internal Revenue, 349 F.3d 225, 229 (5th Cir. 2003) (“We are always
chary to create a circuit split.”).
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2.
Graves argues only that indigency must be determined once and for all
at the time of sentencing—a single snapshot of the defendant’s bank account
and employment. But this interpretation ignores the statutory context that
informs the meaning of “non-indigent.” As discussed above, the statutory
context demonstrates the assessment of a defendant’s financial condition
should consider future earning capacity, especially in light of the fact that the
statute authorizes the payment obligation to last for twenty years after
judgment. See 18 U.S.C. § 3014(g).
Given that text may never be taken out of context, it is obviously true
the word “indigent” could carry different meanings in different contexts. As
Justice Goldberg has observed, indigence “must be conceived as a relative
concept” and defined in light of the context or “with reference to the particular
right asserted.” Hardy v. United States, 375 U.S. 277, 289 n.7 (1964)
(Goldberg, J., concurring;) see also 7 OXFORD ENGLISH DICTIONARY 868 (2d ed.
1989) (defining “indigent” by reference to something else—“falling short of the
proper measure or standard”). Accordingly, when evaluating whether a
defendant is indigent and should be allowed to proceed in forma pauperis, a
court “assesses a defendant’s immediate ability to pay because ‘any person
haled into court, who is too poor to hire a lawyer, cannot be assured a fair trial
unless counsel is provided for him.’ ” Kelley, 861 F.3d at 800 (emphasis added)
(quoting Martinez v. Ryan, 566 U.S. 1, 12 (2012)).
But when evaluating whether a defendant is indigent for purposes of his
ability to pay $5,000 over the span of twenty years, it would be nonsensical for
a court to limit itself to considering only a defendant’s immediate ability to pay.
See id. at 801 (“Because the special assessment under § 3014 deals with
sentencing-phase considerations, the indigence analyses of similar post-
conviction assessments are more helpful than the analysis used for
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determining IFP status or appointed counsel.”); cf. United States v. Lewis, 104
F.3d 690, 694 (5th Cir. 1996) (per curiam) (“In determining an amount of
restitution to be paid, the district court considers not only a defendant’s
present financial resources, but also his future ability to pay.”).
B.
Because we conclude the district court applied the correct legal standard
in assessing Graves’s indigence, Graves must show the district court clearly
erred by finding he was not indigent. He fails to make this showing.
The district court found Graves was non-indigent based on evidence he
(1) took accelerated placement courses in high school, obtained his GED, and
briefly attended college; (2) had a wide range of vocational skills; (3) had a long
history of employment; (4) had previously earned $40,000 annually; and (5)
was able bodied. Graves does not argue that any of these factual findings are
wrong, much less clearly erroneous. 2 Nor can Graves argue, in light of our
holding above, these facts are legally irrelevant.
Graves likewise cannot argue these fact findings are irreconcilable with
the magistrate judge’s earlier determination that Graves was financially
unable to obtain counsel. See United States v. Perez, 693 F. App’x 364, 365 (5th
Cir. 2017) (per curiam) (“Contrary to [the defendant’s] contention, a conclusion
of non-indigency is not precluded by other orders entered in the case that
depended on financial status.”). When determining whether a defendant is
unable to afford counsel, a court considers “a defendant’s immediate ability to
2 Graves argues only that the district court’s non-indigency finding was “implausible”
based on the income reported in the PSR and PSR addendum. According to these documents,
Graves’s income while on pre-trial release was between $700 and $1,000 a month. Graves
argued that the evidence thus showed his income fell below the federal poverty level of
$12,060 for an individual. Once again, this argument ignores that the district court could
consider Graves’s future earning capacity. And, given that Graves previously earned $40,000
a year, it was not unreasonable for the district court to conclude he could earn a higher income
and that he therefore was not indigent.
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pay” and bases its decision on preliminary financial information. Kelley, 861
F.3d at 800; see Perez, 693 F. App’x at 365 (explaining that “a magistrate
judge’s analysis of preliminary financial information, when undertaking the
task of ensuring [the defendant’s] Sixth Amendment right to counsel, [does not]
bar[ ] a later conclusion of non-indigency based on the more revealing
information about [the defendant’s] total net worth given in the presentence
report”). In contrast, when assessing whether a defendant is unable to pay a
$5,000 special assessment, a court considers the defendant’s current and
future financial condition and bases its decision on the additional information
provided in a PSR. That Graves was entitled to appointed counsel thus does
not undermine the district court’s later finding that he was not indigent.
The district court’s decision not to impose a separate fine of $25,000 to
$250,000 is similarly reconcilable with its decision to impose the $5,000 special
assessment. It should go without saying that a defendant may not have the
same ability to pay $5,000 as he would have to pay five to fifty times that
amount. See Perez, 693 F. App’x at 365 (rejecting a defendant’s argument “that
the non-imposition of a fine impacts the additional special assessment decision,
given that the fine range of $50,000 to $250,000 vastly exceeds the sum of the
additional special assessments”). Accordingly, none of Graves’s arguments
leaves us “with the definite and firm conviction that a mistake has been made.”
Cordova-Soto, 804 F.3d at 718. We therefore find no clear error in the district
court’s conclusion that Graves is non-indigent under § 3014.
* * *
Because the district court applied the correct legal standard and did not
clearly err in finding Graves is “a[ ] non-indigent person” under 18 U.S.C.
§ 3014, the district court’s judgment is AFFIRMED.
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