United States v. David Davalos, Sr. ( 2020 )

Case: 18-50784 Document: 00515388946 Page: 1 Date Filed: 04/20/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
April 20, 2020
No. 18-50784 Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff - Appellee
v.
DAVID DAVALOS, SR.,
Defendant - Appellant
Appeal from the United States District Court
for the Western District of Texas
USDC No. 2:16-CR-1115-11
Before JOLLY, GRAVES, and HIGGINSON, Circuit Judges.
PER CURIAM:*
Defendant-Appellant David Davalos, Sr. (“Mr. Davalos”) challenges
several aspects of the criminal sentence imposed on him by the district court.
Having considered his arguments, we affirm in part, vacate in part, and
remand this case for further proceedings.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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I. BACKGROUND
In August 2016, a federal grand jury returned a nine-count indictment
against Mr. Davalos and 25 others. Mr. Davalos was specifically named in two
counts: Count Three, which charged him with conspiring to possess with intent
to distribute five or more kilograms of cocaine in violation of 21 U.S.C. §§ 846,
841(a)(1) and (b)(1)(A); and Count Five, which alleged that he opened, used,
and maintained a premise in Crystal City, Texas, for the purpose of
distributing cocaine in violation of 21 U.S.C. § 856(a)(1) and (b).
The indictment included both (1) a notice of demand for forfeiture of real
property; and (2) a money judgment with a provision regarding substitute
assets. In January 2017, the government filed a bill of particulars stating that
it sought the criminal forfeiture of both the property named in the indictment
and additional properties described in the bill.
In March 2017, Mr. Davalos pleaded guilty to Counts Three and Five of
the indictment without a plea agreement. The government offered a factual
basis supporting the plea, which Mr. Davalos admitted with two exceptions.
Specifically, Mr. Davalos (1) objected to the drug quantity and drug proceeds
in the factual basis, and (2) notified the court that he did not agree to the
government’s forfeiture provisions. The district court approved Mr. Davalos’s
plea, but deferred matters related to the forfeiture to the sentencing hearing.
In May 2018, the government filed an advisory regarding the items of
which it intended to seek forfeiture at the upcoming sentencing hearing. The
advisory noted that, with respect to Mr. Davalos, the government planned to
seek (1) “[a] sum of money equal to the proceeds obtained by [Mr. Davalos] from
the violations he has pled guilty to”; (2) real property located at 310 West
Zapata Street in Crystal City, Texas; (3) $4,118.00 in U.S. currency; and (4) a
2004 Cadillac Escalade.
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Mr. Davalos’s sentencing hearing took place on August 29, 2018. During
the hearing, the court held a sealed bench conference to resolve issues
regarding drug quantity, role adjustments, and forfeiture. Following the bench
conference, the court determined that Mr. Davalos was subject to a guideline
sentence of 210–262 months for Count Three and 210–240 months for Count
Five. The district court found the advisory guideline sentencing ranges
“adequate” and imposed a concurrent 235-month term of imprisonment on each
count. The court also sentenced Mr. Davalos to supervised release.
The district court did not enter its written judgment until September 6,
2018. That judgment included an order of forfeiture and a forfeiture money
judgment. However, the government had not yet filed a motion for a
preliminary order of forfeiture or motion for entry of money judgment. It did
not do so until several weeks after entry of the district court’s written
judgment. The district court then entered a preliminary order of forfeiture and
an order of money judgment. Those orders were filed 83 and 97 days after Mr.
Davalos’s sentencing, respectively. Mr. Davalos filed his notice of appeal on
September 19, 2018.
On appeal, Mr. Davalos challenges (1) the district court’s entry of the
preliminary order of forfeiture and order of money judgment; and (2) his
within-guidelines sentence. He also seeks remand to conform the district
court’s oral pronouncement of sentence to its written judgment.
II. ORDER OF FORFEITURE AND MONEY JUDGMENT
Mr. Davalos advances two challenges to the forfeiture and money
judgment entered against him. We address each in turn.
A. Rule 32.2
Mr. Davalos contends that the district court exceeded its subject-matter
jurisdiction when it entered a preliminary order of forfeiture and order of
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money judgment more than fourteen days after his sentencing and the entry
of judgment. Existing caselaw dictates otherwise.
The imposition of criminal forfeiture is governed by Federal Rule of
Criminal Procedure 32.2. That rule provides that the court, when forfeiture is
contested, must conduct a hearing after it finds the defendant guilty. Fed. R.
Crim. P. 32.2(b)(1)(B). If the court “finds that property is subject to forfeiture,
it must promptly enter a preliminary order of forfeiture setting forth the
amount of any money judgment, directing the forfeiture of specific property,
and directing the forfeiture of any substitute property if the government has
met the statutory criteria.” Fed. R. Crim. P. 32.2(b)(2)(A). Unless it is
“impractical” to do so, the court “must enter the preliminary order sufficiently
in advance of sentencing to allow the parties to suggest revisions or
modifications before the order becomes final as to the defendant under Rule
32.2.(b)(4).” Fed. R. Crim. P. 32.2(b)(2)(B). Rule 32.2(b)(4) provides that the
preliminary forfeiture order becomes final either “[a]t sentencing” or “at any
time before sentencing if the defendant consents.” Fed. R. Crim. P. 32.2(b)(4).
The district court must “include the forfeiture when orally announcing the
sentence or must otherwise ensure that the defendant knows of the forfeiture
at sentencing.” Fed. R. Crim. P. 32.2(b)(4)(B). The court must also include the
forfeiture order, either directly or by reference, in the judgment. Id.Here, while the written judgment entered by the district court included
an order of forfeiture and a forfeiture money judgment, the government did not
actually move for a preliminary order of forfeiture or for entry of money
judgment until more than a month after sentencing. The preliminary order of
forfeiture was not issued until 83 days after sentencing, and the order of money
judgment was entered 97 days after sentencing.
Mr. Davalos therefore argues that the district court lacked subject
matter jurisdiction to enter either the preliminary order of forfeiture or the
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order of money judgment. While subject matter jurisdiction is reviewed de novo
as a question of law, Gandy Nursery, Inc. v. United States, 318 F.3d 631, 636
(5th Cir. 2003), this court’s precedent makes clear that Mr. Davalos’s argument
is incorrect. The issue presented here is not jurisdictional, and plain error
review applies.
In United States v. Marquez, a $2 million money judgment was entered
against the defendant. 685 F.3d 501, 509 (5th Cir. 2012). Although the district
court included the money judgment in the defendant’s criminal judgment, it
failed to enter a preliminary order of forfeiture. See id. at 507, 510. On appeal,
the defendant argued that the money judgment was improperly issued because
the district court failed to comply with Rule 32.2’s requirements. Id. at 509.
The panel applied plain error review to the forfeiture issue because the
defendant did not object to the district court’s failure to enter the preliminary
order of forfeiture. See id. at 510. Applying plain error review, the panel
affirmed the district court because the defendant could not show that his
substantial rights were affected by the district court’s errors. Id. Although no
preliminary order was entered, this court allowed the money judgment to
stand.
The Marquez panel deemed the rules set forth in Rule 32.2 “procedural
requirements.” Id. at 509; see also id. at 510 (“Marquez has the burden of
showing that these procedural defects affected his substantial rights.”). And
“three-judge panels . . . abide by a prior Fifth Circuit decision until the decision
is overruled, expressly or implicitly, by either the United States Supreme
Court or by the Fifth Circuit sitting en banc.” Cent. Pines Land Co. v. United
States, 274 F.3d 881, 893 (5th Cir. 2001) (quoting United States v. Kirk, 528
F.2d 1057 (5th Cir.1976)). We therefore apply plain error review to the issue
at hand.
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On plain error review, this court may not correct an error in the district
court unless (1) there is error; (2) the error is plain; and (3) the error affects
substantial rights. United States v. Gomez, 905 F.3d 347, 353 (5th Cir. 2018).
Even when all three of those conditions are met, this court may only exercise
its discretion to notice a forfeited error if the error “seriously affects the
fairness, integrity, or public reputation of judicial proceedings.” Id.With respect to the first two prongs of the plain error analysis, Mr.
Davalos has satisfied his burden. Rule 32.2’s mandates are clear, and the
district court’s deviation from those mandates is plainly erroneous. But Mr.
Davalos has not demonstrated that the district court’s failure to follow Rule
32.2 affected his substantial rights.
“As a general rule, an error affects a defendant’s substantial rights only
if the error was prejudicial.” United States v. Gonzalez-Rodriguez, 621 F.3d
354, 364 (5th Cir. 2010) (citing United States v. Olano, 507 U.S. 725, 734
(1993)). “Error is prejudicial if there is a reasonable probability that the result
of the proceedings would have been different but for the error.” Id. (citation
omitted). “The probability of a different result must be sufficient to undermine
confidence in the outcome of the proceedings.” Id. (citation omitted).
Mr. Davalos has not shown that there is a reasonable probability that
the result of his proceedings would have been any different had the district
court followed the appropriate procedures. See, e.g., Marquez, 685 F.3d at 510.
As such, he is not entitled to relief on this ground.
B. Honeycutt and 21 U.S.C. § 853In addition to his argument regarding Rule 32.2, Mr. Davalos asserts
that the money judgment entered against him should be vacated in light of
Honeycutt, a recent Supreme Court decision addressing forfeiture from an
individual drug conspiracy defendant relating to the proceeds of a criminal
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conspiracy. See Honeycutt v. United States, 137 S. Ct. 1626, 1630 (2017). We
agree.
21 U.S.C. § 853 governs forfeiture of property constituting or derived
from proceeds a defendant obtained as the result of certain drug crimes. Id.Honeycutt concerned how Section 853 operates when two or more defendants
act as part of a conspiracy, id., as is the case here. The case established that,
under Section 853, a defendant may not be held jointly and severally liable for
property that his co-conspirator derived from the crime but that the defendant
himself did not acquire. Id. at 1635.
In this case, the government’s multi-party indictment was issued before
publication of Honeycutt. It sought a money judgment of $5,980,000.00 against
all defendants, for which they would be jointly and severally liable. At the
sentencing hearing, the district court initially found “that there is a money
judgment in the case of the amount alleged of [$]5,980,000, but that is joint
and several liability.” The government then alerted the district court to
Honeycutt, which was decided in the period between filing of the indictment
and the sentencing hearing. After the government indicated that it was only
seeking $1,794,000.00 because of Honeycutt, the following exchange occurred:
THE COURT: The total amount of the money judgment is
5,980,000, but that is everybody combined. Not just you alone. And
you said it was one what?
AUSA: 1.794 million.
THE COURT: Okay. Once – I don’t really know how to say this
now because the case law has gotten really strange about joint and
several liability.
AUSA: And he would just be liable, not jointly and severally, just
for him, for the 1.794.
THE COURT: Okay, you’re not – this is not joint and several
liability?
AUSA: No, Your Honor.
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THE COURT: All right. So your amount only, alone, would be
1.794 million, not the 5.98. Okay? Everybody else will be
responsible for the rest of it. Okay?
There was no more discussion regarding the money judgment.
Mr. Davalos argues that the district court erred by entering a money
judgment against him for $1.794 million without making any factual findings
about whether he actually acquired that amount or other substitute property
as a result of the crime. We review de novo. See United States v. Rasco, 123
F.3d 222, 226 (5th Cir. 1997).
The government contends only that the district court “did hold a lengthy
hearing where it was determined that the conspiracy was responsible for
proceeds in the amount of $5,980,000” and that its imposition of the $1,794,000
money judgment against Mr. Davalos was “procedurally and substantively
reasonable and should be affirmed.” It cites no law in support of that argument.
And the Supreme Court made clear in Honeycutt that the provisions of Section
853(a) “are in accord with the limitation of forfeiture to property the defendant
himself obtained.” Honeycutt, 137 S.Ct. at 1633.
Because the money judgment entered against Mr. Davalos is without
sufficient factual support, it should be vacated and this case remanded for the
purpose of making factual findings regarding the appropriate money
judgment.1
1 Given this finding, we do not address the parties’ dispute regarding whether the
district court should have required the government to make a showing under Section 853(p)
prior to entering the money judgment. We note, however, that even Section 853(p)—“the sole
provision of § 853 that permits the [g]overnment to confiscate property untainted by the
crime”—is limited to property “up to the value of the tainted property.” Honeycutt, 137 S.Ct.
at 1633–34 (internal quotation marks and citation omitted). As explained above, the district
court here made no factfinding regarding that value.
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III. OTHER PROVISIONS OF SENTENCE
Mr. Davalos raises two additional challenges to his sentence, arguing
that (1) the district court committed reversible plain error because it misstated
the applicable standard in its Statement of Reasons; and (2) the case should be
remanded because the district court’s oral pronouncement of sentence conflicts
with its written judgment. While we find Mr. Davalos’s first argument
unpersuasive, we agree that this case should be remanded so that the district
court can amend the written judgment.
A. Statement of Reasons
When the spread of an applicable guideline sentencing range exceeds 24
months, federal law requires the district court to state—in open court and at
the time of sentencing—its “reason for imposing a sentence at a particular
point within the range.” 18 U.S.C. § 3553(c)(1). Here, the spreads of the
applicable guideline sentencing ranges were 52 months for Count Three and
30 months for Count Five.2 However, the district judge filed a Statement of
Reasons incorrectly stating that Mr. Davalos’s sentence was within an
advisory guideline range that “does not exceed 24 months.” Mr. Davalos
therefore argues that this court should vacate his sentence and remand for
resentencing.
Because Mr. Davalos did not raise an objection regarding this issue
below, this court’s review is for plain error. We therefore consider whether the
district court committed plain error that affected Mr. Davalos’s substantial
rights. See Gomez, 905 F.3d at 353. We conclude that it did not.
“While the sentencing court is required to state ‘the reasons for its
imposition of the particular sentence,’ a full explanation of the sentencing
2 The district court determined that Mr. Davalos was subject to a guideline sentence
of 210–262 months for Count Three and 210–240 months for Count Five.
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factors is not required in every case.” United States v. Duke, 788 F.3d 392, 396
(5th Cir. 2015) (citing Rita v. United States, 551 U.S. 338, 356 (2007)). Indeed,
when the district court imposes a within-guidelines sentence, “‘little
explanation’ is required” to satisfy 18 U.S.C. § 3553(c). Id. (citing United States
v. Mares, 402 F.3d 511, 519 (5th Cir. 2005)). Rather, “[t]he sentencing judge
should set forth enough to satisfy the appellate court that [s]he has considered
the parties’ arguments and has a reasoned basis for exercising h[er] own legal
decisionmaking authority.” Id. (cleaned up).
Here, the district court’s oral statement of reasons for the imposition of
Mr. Davalos’s particular sentence was sufficient to meet the mandate of 18
U.S.C. § 3553(c). See, e.g., Rita, 551 U.S. at 359 (“Where a matter is as
conceptually simple as in the case at hand and the record makes clear that the
sentencing judge considered the evidence and arguments, we do not believe the
law requires the judge to write more extensively.”); Mares, 402 F.3d at 519(“When the judge exercises her discretion to impose a sentence within the
Guideline range and states for the record that she is doing so, little explanation
is required.”). The district court made a statement immediately before
announcing Mr. Davalos’s particular sentence, noting that it was taking into
account “the advisory guidelines, as well as the policy statements of those
guidelines, together with other sentencing factors such as the nature and
circumstances of the offense, the seriousness of the offense, the history and
characteristics of the defendant, the need to promote respect for the law and to
provide just punishment for the offense, [and] the need to deter future criminal
conduct and to protect the public.” The court also advised that it was taking
into account “the allocution of the parties, as well as the factual information
contained within the presentence report.”
This court’s opinion in Ramos is a useful analogue. There, the district
court orally imposed a 144-month term of imprisonment and the written
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judgment reflected the same 144-month term, but the Statement of Reasons
stated that the term of imprisonment was 135 months. United States v. Ramos,
33 F. App’x 704, *2 (5th Cir. 2002) (per curiam) (unpublished). A panel of this
court noted that the district court “stated orally the reasons for imposing the
particular sentence,” concluding that “[t]he only logical conclusion for the
discrepancy . . . is that the numeral ‘135’ in the ‘Statement of Reasons’ section
of the written judgment is merely a clerical error.” Id. The panel found that
“such a clerical error does not create doubts as to the period of incarceration
the district court intended to impose” and “did not affect [the defendant’s]
substantial rights.” Id.Here, we conclude the same. Because the district court orally stated its
reasons for imposing the particular sentence it did, the dictates of 18 U.S.C.
§ 3553(c) were satisfied. The clerical error in the subsequent Statement of
Reasons did not affect Mr. Davalos’s substantive rights.
B. Written Judgment
Both parties acknowledge that, with respect to several special conditions
associated with Mr. Davalos’s term of supervised release, there is conflict
between the district court’s written judgment and oral pronouncement.
During the district court’s oral pronouncement of sentence, it said to Mr.
Davalos: “one of your standard conditions is that you’re not supposed to
associate with known felons.” But the district court went on to state that Mr.
Davalos had “the Court’s permission to associate with” his son, brothers, and
nephew, listing six individuals who were specifically exempted from the
condition. That amendment to the standard condition does not appear in the
written judgment.
There is additional conflict between the oral pronouncement and the
written judgment regarding where Mr. Davalos may live after his release from
prison. During sentencing, the district court said:
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Now, this next condition, I’m – I’m imposing it right now in case
something goes haywire in terms of the – the valid place for Mr.
Davalos to live.
Mr. Davalos, I don’t know yet what’s going to happen with the
forfeiture on your house, so I’m imposing this out of an abundance
of caution. If, when you get out, you’ve got a place to live, probation
will file a motion with me, [and] I’ll remit this next condition.
Okay?
That the first six months of your term of supervised release or your
terms of supervised release, you shall reside at a residential
reentry center for a term of six months, and you shall follow the
rules and regulations of the center; that once employed, you shall
pay 25 percent of your weekly gross income, so long as that amount
does not exceed the daily contract rate.
While the written judgment reflects the imposition of a condition requiring Mr.
Davalos to reside in a residential reentry center for a term of six months, it
does not provide that this condition will be “remitted” if Mr. Davalos “has a
valid residence to go to” when he is released from prison.
If a written judgement “broadens the restrictions of requirements of
supervised release from an oral pronouncement,” the “appropriate remedy is
remand to the district court to amend the written judgment to conform to the
oral sentence.” United States v. Mireles, 471 F.3d 551, 558 (5th Cir. 2006). We
therefore conclude that this case should be remanded to the district court so
that, with respect to the two issues discussed in this section, it may conform
the written judgment to its oral pronouncement.
IV. CONCLUSION
For the reasons stated above, we VACATE the forfeiture money
judgment provision of Mr. Davalos’s sentence. We REMAND this case to the
district court so that it may (1) conduct factfinding regarding the appropriate
value of the money judgment in accordance with Honeycutt; and (2) conform
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the written judgment to its oral pronouncement of sentence. In all other
respects, we AFFIRM.
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