United States v. Eschman, Gary J. ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 00-1395
United States of America,
Plaintiff-Appellee,
v.
Gary J. Eschman,
Defendant-Appellant.
Appeal from the United States District Court
for the Southern District of Illinois.
No. 99-30066-DRH--David R. Herndon, Judge.
Argued June 8, 2000--Decided September 14, 2000
Before Easterbrook, Kanne, and Williams, Circuit
Judges.
Williams, Circuit Judge. Gary J. Eschman pleaded
guilty to several drug-related charges and a gun
charge. Rejecting Eschman’s objections to the
quantity of drugs attributable to him for
sentencing purposes and declining to reduce
Eschman’s sentence for acceptance of
responsibility, the district court sentenced
Eschman to almost twenty years in prison. Eschman
appeals his sentence, and for the reasons stated
herein, we reverse.
I
Because Eschman does not challenge his
conviction, we discuss only those facts relevant
to his sentencing. Acting on a tip from a local
Wal-Mart store that had sold Eschman’s son-in-law
Anthony Jines a large quantity of
pseudoephedrine, a precursor to methamphetamine,
agents from the Metropolitan Enforcement Group of
Southwestern Illinois (MEGSI) conducted a search
of the residence where Eschman lived with Anthony
Jines and his daughter, Darlla Jines. The agents
found, among other things, methamphetamine in the
Jineses’ bedroom, and two firearms and 6,400 30-
milligram pseudoephedrine pills in Eschman’s
bedroom./1 Shortly after criminal charges were
filed against him, his daughter, and his son-in-
law, Eschman pleaded guilty to conspiracy to
manufacture and possess with intent to distribute
methamphetamine, in violation of 21 U.S.C.
sec.sec. 841(a)(1), 846, maintaining a place for
the manufacture of methamphetamine, in violation
of 21 U.S.C. sec. 856(a)(1), and being a felon in
possession of a firearm, in violation of 18
U.S.C. sec. 922(g)(1)./2 In doing so, Eschman
admitted that he "cooked" or manufactured
methamphetamine in a shed next to the Jineses’
residence.
Since the sentencing guidelines base the
applicable offense level on the drug quantity
involved, the key question at Eschman’s
sentencing was how much methamphetamine should be
attributed to him. See U.S. Sentencing Guidelines
(U.S.S.G.) sec. 2D1.1 (1998). Before his
sentencing, the government (and later the
Probation Department in its pre-sentence report)
estimated the "production capacity" of Eschman’s
methamphetamine "laboratory" (i.e., the shed) to
be 177 grams of actual (pure) methamphetamine
based on a 100% "theoretical" yield of the
pseudoephedrine pills found in his possession
(i.e., converting pseudoephedrine into
methamphetamine at a one-to-one ratio). Eschman,
however, objected to this 100% conversion rate as
a means for determining his base offense level.
At sentencing, Eschman introduced testimony from
Dr. Terry Martinez, a chemist and professor at
the St. Louis College of Pharmacy, who stated
that a 100% conversion rate is merely theoretical
and that professional chemists can only obtain a
90% yield using professional equipment. Based on
a scientific study conducted by the Iowa
Department of Public Safety ("Iowa study"), Dr.
Martinez indicated that an average yield for a
clandestine laboratory is from 40% to 50%. He
stated that a clandestine laboratory can, at
most, obtain an 80% yield. He characterized
Eschman’s lab as "primitive" and testified that
no expert, in his view, could determine the
possible yield of methamphetamine for Eschman’s
lab.
In rebuttal, the government offered the
testimony of Virginia Kleekamp, a chemist with
the Drug Enforcement Administration (DEA).
Kleekamp testified that DEA chemists do a
theoretical conversion rate of pseudoephedrine to
methamphetamine of 100%, or one-to-one, adjusted
only for the difference in molecular weight. She
explained that the DEA uses a one-to-one
theoretical conversion ratio because it is
difficult to obtain an accurate measure of the
production capacity of a clandestine laboratory.
She admitted, as a practical matter, that it is
impossible to obtain a 100% yield. She indicated
that an average yield for a clandestine
laboratory is from 40% to 60%, but she has noted
yields as high as 85%. However, she did not
dispute the findings of the Iowa study.
After hearing testimony from these two experts,
the district court found Dr. Martinez’s testimony
not credible and accepted the one-to-one
conversion ratio as a means to determine the
applicable base offense level. The district court
agreed with the pre-sentence report that the
production capacity of Eschman’s laboratory was
177 grams of pure methamphetamine. Based on the
statements and testimony of Anthony Jines, who
sold methamphetamine produced by Eschman, the
district court also determined that Eschman
manufactured, at least, 36 ounces (or 1020.6
grams) of mixture or substance containing
methamphetamine.
On the basis of these drug amounts, the
district court determined that Eschman had a base
offense level of 34,/3 which when increased by
two levels for his possession of a firearm,
resulted in an offense level of 36. The district
court then denied Eschman a three-level reduction
in his offense level for acceptance of
responsibility, concluding that Eschman had not
genuinely accepted responsibility under the
sentencing guidelines. The court sentenced
Eschman to two 235-month sentences for the drug-
related convictions (the upper limit of the
relevant sentencing range) and a 120-month
sentence for the felon-in-possession conviction,
all to be served concurrently.
On appeal, Eschman argues that the district
court erred in calculating his base offense level
by (1) holding him accountable for 177 grams of
pure methamphetamine and (2) denying him a three-
level reduction for acceptance of responsibility.
II
We review the district court’s calculation of
drug quantity, as well as its determination of
whether a defendant has accepted responsibility,
for clear error. See United States v. Johnson,
200 F.3d 529, 537 (7th Cir. 2000); United States
v. Mancillas, 183 F.3d 682, 711 (7th Cir. 1999).
A. Drug Quantity Calculation
Eschman argues that the district court erred by
holding him accountable for 177 grams of pure
methamphetamine based on the amount of
pseudoephedrine found in his possession.
Specifically, Eschman contends that the district
court did not have a reliable factual basis for
the drug quantity calculation.
In cases "[w]here there is no drug seizure or
the amount seized does not reflect the scale of
the offense, the court shall approximate the
quantity of the controlled substance." U.S.S.G.
sec. 2D1.1, cmt. 12 (1998). In making this
approximation, the district court may consider
"the price generally obtained for the controlled
substance, financial or other records, similar
transactions in controlled substances by the
defendant, and the size or capability of any
laboratory involved." Id. Because there was no
seizure of the substance charged in the offense,
the district court in this case applied sec.
2D1.1 to approximate the amount of
methamphetamine Eschman could have produced in
his laboratory based upon the quantity of
pseudoephedrine found in his possession./4 The
district court, in accepting the government’s
recommendation set forth in the pre-sentence
report, found that Eschman could have converted
the pseudoephedrine into methamphetamine at a
one-to-one conversion ratio (i.e., a 100% yield).
We will uphold this finding to the extent it is
based on reliable evidence. Johnson, 200 F.3d at
537.
From our review of the record, the district
court’s finding lacks an evidentiary basis. Both
parties’ experts testified that a 100% yield is
merely theoretical (in other words,
unattainable). The experts also testified that
although an 80-85% yield might be possible with
a clandestine laboratory, yields in the range of
40%-60% were more probable. This data is
confirmed by the Iowa study, which Eschman
introduced at sentencing. While the government
must prove the quantity of drugs attributable to
Eschman only by a preponderance of evidence,
United States v. Galbraith, 200 F.3d 1006, 1011
(7th Cir. 2000), the record is void of any
evidence which would reasonably support the
district court’s decision to base its
methamphetamine quantity calculation on a one-to-
one conversion ratio.
Criminal defendants, like Eschman, have a due
process right to be sentenced on the basis of
reliable information, id. at 1012, and district
courts cannot quantify yield figures without
regard for a particular defendant’s capabilities
when viewed in light of the drug laboratory
involved. See, e.g., United States v. Cole, 125
F.3d 654, 655 (8th Cir. 1997) (relevant inquiry
is on what defendant, not "an average cook," is
capable of yielding); United States v. Hamilton,
81 F.3d 652, 653-54 (6th Cir. 1996) (rejecting
standardized drug conversion formulas in favor of
individualized assessment of defendant’s
capabilities); United States v. Mahaffey, 53 F.3d
128, 132-33 (6th Cir. 1995) (same). Here, the
record contains no evidence regarding the sorts
of yields Eschman could, with his equipment and
recipe, obtain in his methamphetamine laboratory
(or, for that matter, even evidence regarding
yields of similarly-situated defendants)./5 See
United States v. Shaffer, 993 F.2d 625, 629 (7th
Cir. 1993) (court may approximate amount that
laboratory could have produced based upon DEA
chemist’s testimony regarding chemical operations
and materials found at "farmhouse" laboratory and
production capacity of defendant’s 12-liter flask
when taking into account "sloppy" laboratory
procedures); Mahaffey, 53 F.3d at 132 (court may
approximate amount that laboratory could have
produced based upon yields of similarly-situated
defendants); United States v. Beshore, 961 F.2d
1380, 1383 (8th Cir. 1992) (court may approximate
amount that laboratory could have produced based
upon quantity of precursor chemicals, size of
laboratory, and recipes to "cook" methamphetamine
seized); United States v. Short, 947 F.2d 1445,
1456-57 (10th Cir. 1991) (court may approximate
amount that laboratory could have produced based
upon testimony of DEA chemist and characteristics
of laboratory equipment seized). Thus, the
district court erred in relying on the one-to-one
conversion ratio when determining Eschman’s base
offense level./6
On remand, the district court must undertake a
more precise inquiry into the quantity of
methamphetamine attributable to Eschman, using
reliable evidence to support its ultimate drug
quantity calculation.
B. Acceptance of Responsibility
Eschman also challenges the district court’s
refusal to grant him a three-level reduction in
offense level for acceptance of responsibility
under U.S.S.G. sec. 3E1.1. The district court
refused to grant the reduction because, in its
view, Eschman had not genuinely accepted
responsibility, but instead was simply attempting
to manipulate the criminal justice system in
order to reduce his sentence.
Under U.S.S.G. sec. 3E1.1, a defendant who
clearly demonstrates acceptance of responsibility
for his or her offense is entitled to a reduction
in his or her offense level. To qualify for the
reduction a defendant must, in a timely manner,
(1) demonstrate sincere remorse or contrition,
(2) truthfully admit the conduct comprising the
offense, and (3) neither falsely deny nor
frivolously contest relevant conduct. United
States v. Mancillas, 183 F.3d 682, 711 (7th Cir.
1999); United States v. Purchess, 107 F.3d 1261,
1269 (7th Cir. 1997); U.S.S.G. sec. 3E1.1, cmt.
1 (1998).
Here, Eschman pleaded very early in the case
and never challenged the charges against him.
Although he raised objections to the pre-sentence
report at sentencing, he never expressed outright
denials of relevant conduct and the district
court found his challenge to the "production
capacity" evidence not frivolous. Eschman also
submitted a statement to the court acknowledging
his wrongdoing and expressing regret, and at
sentencing, he apologized for his conduct,
stating that he was "sorry" for what he did. The
district court, however, did not believe Eschman
had genuinely accepted responsibility.
In light of his early, consistent, and repeated
acceptance of responsibility, it appears that the
district court’s determination was affected by
the manner in which Eschman prefaced his
statements. In accepting responsibility, Eschman
stood firm in challenging the drug quantity
calculation and our earlier discussion
demonstrates that he had good reason for doing
so. While we do not take lightly the district
court’s apparent concerns about Eschman’s
contrition, see U.S.S.G. sec. 3E1.1, cmt. 5
(1998) (district court’s determination entitled
to "great deference" on review), the court’s
finding appears to have been colored by Eschman’s
firm, but good faith challenge to the drug
quantity calculation. Our decision rejecting the
court’s drug quantity calculation places the
acceptance of responsibility question in a new
light. On remand, the district court should
reevaluate whether Eschman is entitled to a
three-level reduction in his base offense level
for acceptance of responsibility.
III
For the foregoing reasons, we VACATE Eschman’s
sentence and REMAND for resentencing in accordance
with this opinion.
/1 The MEGSI agents actually recovered 6,576
pseudophedrine pills, but the lower figure of
6,400 was used for sentencing purposes.
/2 Pursuant to the plea agreement, the government
dismissed a charge for Eschman’s possession of
methamphetamine.
/3 In calculating Eschman’s base offense level, the
district court converted the two amounts (177
grams of actual methamphetamine and 1020.6 grams
of methamphetamine mixture) into marihuana
equivalents (1,770 kilograms and 2,041 kilograms,
respectively), and added the marihuana
equivalents together to obtain a single base
offense level. The resulting sum (3,811 kilograms
of marihuana) placed Eschman at offense level 34
(for marihuana amounts between 3,000 and 10,000
kilograms). See generally U.S.S.G sec. 2D1.1,
cmt. 9 (1998).
/4 We find this approach somewhat curious because
the sentencing guidelines refer to the size or
capability of the laboratory. Under the
government’s approach, the production capacity of
a laboratory turns on the amount of precursor
drug (pseudoephedrine) found in the defendant’s
possession. This approach seems rather misguided
because one would think that the size and
equipment of the drug laboratory involved would
determine its capacity to produce a controlled
substance. However, Eschman does not challenge
the government’s approach so we reserve our
concerns for another day.
/5 While the government asserts that Eschman gave
methamphetamine to one of his co-defendants that
allows one to calculate a 90% yield figure, the
record indicates that this was not pure
methamphetamine, but a mixture (which would have
a much lower marihuana equivalent).
/6 The government contends that the error here is
harmless because only a yield figure of less than
60% would require a lower base offense level and
the record reasonably demonstrates that Eschman
could obtain a 60% yield. However, we did not
locate any record evidence that reasonably
establishes that Eschman had the capacity to
convert pseudoephedrine into methamphetamine at
yields of 60% or greater.
Easterbrook, Circuit Judge, concurring. I join the
court’s opinion, which resolves the issues the
parties presented for decision and holds that the
record does not demonstrate that the conspirators
could have turned their pseudoephedrine into
methamphetamine of equal weight. As my colleagues
observe, however, the conversion ratio is a
"somewhat curious" subject to pursue. Slip op. 5
n.4. Both the prosecutor and defense counsel
misunderstand the import of the provision that
affects Eschman’s sentence.
Application Note 12 to U.S.S.G. sec.2D1.1
provides:
Types and quantities of drugs not specified in
the count of conviction may be considered in
determining the offense level. See
sec.1B1.3(a)(2) (Relevant Conduct). Where there
is no drug seizure or the amount seized does not
reflect the scale of the offense, the court shall
approximate the quantity of the controlled
substance. In making this determination, the
court may consider, for example, the price
generally obtained for the controlled substance,
financial or other records, similar transactions
in controlled substances by the defendant, and
the size or capability of any laboratory
involved.
The prosecutor contended, and the district judge
concluded, that seizures of methamphetamine did
not "reflect the scale of the offense", so the
parties set out to determine "the size or
capability of any laboratory involved." But
instead of inquiring whether the laboratory was
large, sophisticated, efficient, and so on--the
keys to its ability to turn out methamphetamine,
and therefore good clues to how much of that drug
this operation had produced (and thus to the
scale of the offense)--both litigants and judge
asked instead how much methamphetamine could have
been made using the stock of raw materials on
hand when the police arrived. The district court
concluded that the pseudoephedrine could have
been used to make an equal weight of
methamphetamine, but this finding is clearly
erroneous, for it conflicts with expert testimony
offered by both sides. Under Application Note 12,
the finding also is irrelevant, because it does
not demonstrate "the size or capability of any
laboratory involved." It is like saying that the
"size or capability" of an automobile body plant
depends on how much aluminum can be found nearby
on a given day. But that tells us only the
plant’s inventory, not its "size or capability";
many producers of automobiles (or drugs) practice
just-in-time purchasing to curtail costs. An auto
body plant produces many more cars per year (or
even per week) than the aluminum on hand at a
given moment can yield. Just so with drug
manufacturing enterprises.
Application Note 12 is designed to match the
penalty to the true scale of the drug operation.
That the police discovered some inputs for drug
production is happenstance and not a good
indicator of long-term output; the object of the
Note is to move away from "what was seized?" to
"how big was this drug business?" Consider two
situations. In the first, the police find a large
and sophisticated laboratory, able to produce
substantial quantities of high-purity
methamphetamine, but do not find any precursor
chemicals--perhaps because they are stored
elsewhere, perhaps because they had been used
recently. In the second, the police find crude
equipment, a few pots and beakers that could be
used to make only small quantities of low-purity
drug, but also find a supply of pseudoephedrine
because they arrive just before a "cook." The
prosecutor’s approach yields no enhancement under
Application Note 12 in the first case, but a
potentially substantial enhancement in the
second. That’s backward and turns the Guidelines
into an engine of disproportion.
Perhaps the parties and the district judge were
led to their position by an omission in
Application Note 12: "size or capability of any
laboratory involved" is an incomplete way of
describing the scale of an enterprise.
Manufacturing facilities are rated in capacity
per unit of time. An auto plant produces X cars
per day; a generating station produces so many
megawatts of electricity continuously. Should the
district court take account of the lab’s likely
production over the last month, or year, or the
life span of a normal drug-manufacturing ring, or
the span of this particular conspiracy, or the
period of the statute of limitations? Application
Note 12 does not say, which makes it impossible
for courts to treat equally dangerous drug rings
the same way. Some judges are bound to select a
short period (because estimates based on the
recent past are more accurate), while others
select a long period (because that best reflects
the total output). The Sentencing Commission
should amend Note 12 to incorporate an accounting
period. The most logical period is the span of
this conspiracy, which is "the offense" whose
relevant conduct the judge is supposed to
estimate. U.S.S.G. sec.1B1.3(a)(1)(A). But the
incompleteness of Application Note 12 as it
stands does not justify replacing an estimate of
capacity (and thus of past production) with an
estimate of raw materials at the time of arrest.