United States v. Brett Depue , 912 F.3d 1227 ( 2019 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 15-10553
Plaintiff-Appellee,
D.C. No.
v. 2:10-cr-00121-
RLH-RJJ-1
BRETT DEPUE,
Defendant-Appellant. OPINION
Appeal from the United States District Court
for the District of Nevada
Roger L. Hunt, Senior District Judge, Presiding
Submitted En Banc September 26, 2018 *
Pasadena, California
Filed January 14, 2019
Before: Sidney R. Thomas, Chief Judge, and William A.
Fletcher, Richard A. Paez, Marsha S. Berzon, Milan D.
Smith, Jr., Sandra S. Ikuta, Morgan Christen, Jacqueline H.
Nguyen, Paul J. Watford, Andrew D. Hurwitz
and Michelle T. Friedland, Circuit Judges.
Opinion by Judge Berzon
*
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
2 UNITED STATES V. DEPUE
SUMMARY **
Criminal Law
Affirming a conviction and sentence, the en banc court
reaffirmed the distinction between waiver and forfeiture of
sentencing challenges: a defendant waives his rights and
precludes plain error review only when there is evidence that
he knew of his rights at the time and nonetheless
relinquished them.
Affirming the conviction, the en banc court adopted the
three-judge panel’s decision that the district court did not
abuse its discretion when it dismissed a juror who
complained of health problems during deliberations.
The en banc court held that the defendant forfeited—
rather than waived—his challenge to the Sentencing
Guidelines calculation because nothing in the district court
record suggests that the defendant considered objecting to
the calculation method or to any of the alleged factual
inaccuracies he now raises. The en banc court explained that
the fact the defendant knew generally that he could object if
he recognized a mistake, or that he recognized and raised
other errors, does not mean that he waived the right to
challenge the specific alleged errors he raises on appeal.
Because the defendant forfeited rather than waived his
challenge to the district court’s Guidelines calculation, the
en banc court evaluated whether the calculation was plain
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
UNITED STATES V. DEPUE 3
error affecting substantial rights. The en banc court held that
regardless of whether the district court’s loss calculation
method was legally erroneous, the defendant has not met his
burden to show that the alleged error affected his substantial
rights. As to the defendant’s factual disputes underlying the
Guidelines calculation, the en banc court was not convinced
that the district court’s factual errors, if any, were so
egregious as to be plainly erroneous.
COUNSEL
Mario D. Valencia, Henderson, Nevada, for Defendant-
Appellant.
Adam Flake, Assistant United States Attorney; Elizabeth O.
White, Appellate Chief; Steven W. Myhre, Acting United
States Attorney; United States Attorney’s Office, Las Vegas,
Nevada; for Plaintiff-Appellee.
Vincent J. Brunkow and Michael A. Marks, Federal
Defenders of San Diego Inc., San Diego, California, for
Amici Curiae Ninth Circuit Federal Public and Community
Defenders.
Lee H. Rubin and Donald M. Falk, Mayer Brown LLP, Palo
Alto, California, for Amicus Curiae National Association of
Criminal Defense Lawyers.
4 UNITED STATES V. DEPUE
OPINION
BERZON, Circuit Judge:
This appeal is, as Yogi Berra did or did not say, déjà vu
all over again. 1 We are asked to explain when a defendant is
entitled to plain error review of challenges to his sentence
that he failed to raise in the district court. Our cases have
consistently held that a defendant waives his rights and
precludes plain error review only when there is evidence that
he knew of his rights at the time and nonetheless
relinquished them. Twenty-one years ago, we explained this
point in an en banc opinion. United States v. Perez, 116 F.3d
840 (9th Cir. 1997) (en banc). We reaffirm today this
distinction between waiver and forfeiture.
Depue challenges (1) the dismissal of a juror who
complained of health problems during deliberations, and
(2) the district court’s sentencing range calculations under
the United States Sentencing Guidelines (“Guidelines”). We
adopt the three-judge panel’s decision that the district court
did not abuse its discretion when it dismissed the juror, as
well as the panel’s reasoning on that issue. See United States
v. Depue, 879 F.3d 1021, 1027–28 (9th Cir. 2018).
Confining our en banc consideration to Depue’s challenge to
the Guidelines calculations, we hold that Depue’s failure to
object to the Guidelines calculations at sentencing
constitutes forfeiture subject to plain error review, but that
there was no plain error.
1
Victor Mather & Katie Rogers, Behind the Yogi-isms: Those Said
and Unsaid, N.Y. Times (Sept. 23, 2015), https://www.nytimes.com/20
15/09/24/sports/yogi-berra-yogi-isms-quotes-explored.html.
UNITED STATES V. DEPUE 5
I
We recite the facts as pertinent to the issue addressed in
this opinion.
From February 2005 to May 2007, Brett Depue
(“Depue”) conspired to orchestrate a large-scale mortgage
fraud scheme. The conspiracy involved recruiting
individuals with high credit scores to act as straw buyers of
residential properties in Nevada. The straw buyers allowed
Depue to use their names and good credit to buy properties
with 100% financing. In exchange, they received
approximately $5,000 for each property purchased in their
name and the expectation of a good return on their
“investment” in the property. To secure the financing, Depue
and his co-conspirators prepared mortgage loan applications
containing false and fraudulent information about the
borrowers’ employment, income, assets and intent to occupy
the property as a primary residence.
Depue and his co-conspirators employed several
methods to orchestrate their fraud. At first, Depue profited
from third party disbursements. 2 This scheme involved using
the identities of straw buyers to purchase properties with
100% financing at above the asking price, and disbursing the
difference to one of the several business entities Depue
operated. Depue also employed double escrows to further his
conspiracy. This method involved purchasing a property at
or below the asking price and immediately reselling it to a
2
A third party disbursement occurs when, at the closing of a
mortgage loan, money is issued to a person or entity other than those
typically entitled to it, as are the seller, realtor, mortgage company,
mortgage broker, lender, and the title and escrow company.
6 UNITED STATES V. DEPUE
straw buyer at an inflated price. 3 The straw buyer’s purchase
was financed through a fraudulently obtained mortgage.
Depue and his co-conspirators profited from the price
difference.
In 2010, the government indicted Depue on eleven
counts of wire fraud and aiding and abetting in violation of
18 U.S.C. §§ 2, 1343, and one count of conspiracy to commit
bank fraud, mail fraud, and wire fraud in violation of
18 U.S.C. § 1349. The government dismissed four of the
wire fraud charges before the end of Depue’s first trial, and
a mistrial was declared on the remaining eight charges due
to a hung jury.
In 2012, Depue proceeded pro se in his second trial. A
jury found him guilty on all eight counts. Depue then
appealed his conviction to this court. We held that Depue’s
waiver of his right to counsel had not been sufficiently
knowing and intelligent, and so vacated Depue’s convictions
and remanded for a new trial. United States v. Depue, 595 F.
App’x 732, 734 (9th Cir. 2015).
Depue again proceeded pro se in his third trial, held in
July 2015. He called no witnesses and made no opening or
closing statements. Depue did not challenge the
government’s evidence or question its witnesses. Again, he
was convicted on all eight counts.
Under the Guidelines, the recommended sentencing
range for a convicted defendant is a function of the
defendant’s total offense level and criminal history category.
3
At first, the initial purchase of the property was funded by a hard
money lender who would be repaid after Depue resold the property.
Later, Depue eliminated the need for a hard money lender by conducting
the purchasing and reselling of the property at the same time.
UNITED STATES V. DEPUE 7
The sentencing court calculates a defendant’s total offense
level by identifying the base offense level and increasing that
offense level based on specific characteristics of the offense.
U.S.S.G. § 2B1.1. For certain economic offenses, including
those for which Depue was convicted, the offense level is
increased from the base offense level based on the amount
of economic loss resulting from the offense. U.S.S.G.
§ 2B1.1(b)(1).
Prior to Depue’s sentencing hearing, the government
filed a Sentencing Memorandum, which calculated Depue’s
total offense level as 39. The calculation was based largely
on a determination that Depue’s offenses resulted in a loss
greater than $25 million. For losses between $25 and
$65 million, the Guidelines instruct the court to add 22
offense levels to the base offense level. U.S.S.G.
§ 2B1.1(b)(1)(L).
To arrive at the loss figure, the government submitted
evidence that, as part of the mortgage fraud, Depue and his
co-conspirators had purchased 106 properties at a total price
of $55,070,000. The government asserted that because the
vast majority of these properties were purchased with 100%
financing, the total purchase price equaled the total amount
that Depue and his co-conspirators borrowed from banks.
The banks eventually foreclosed on the properties and sold
them for a total of $29,581,950. The Sentencing
Memorandum therefore calculated the total loss to the banks
as the difference between the total purchase and sales prices:
$25,488,050. The Sentencing Memorandum calculated
Depue’s criminal history category as I, and concluded that
the Guidelines recommended sentencing range was 262–327
months.
At his sentencing hearing, Depue did not object to the
Pre-Sentence Report’s (“PSR”) calculation method, which
8 UNITED STATES V. DEPUE
was the same as the method used by the government in its
Sentencing Memorandum. The trial judge asked Depue if
there were any errors in the PSR. Depue mentioned only his
qualms about the dates of incarceration reported in the PSR
and stated, “Other than that, the rest of [the PSR] appeared
to be correct.” After clarifying his incarceration dates, Depue
again stated, “everything else appears to be accurate.” The
trial judge gave Depue a second opportunity to “comment”
at sentencing, but Depue did not do so.
After calculating the Guidelines range using the same
method as in the PSR and Sentencing Memorandum, the
district court sentenced Depue to concurrent terms of
imprisonment: 262 months on Count One; 240 months, each,
on Counts Two, Three, Four, Five, Six, Seven, and Ten. The
district court also imposed restitution in the amount of
$1,567,429.93; five years’ supervised release; and an
$800 assessment fee. Depue timely appealed.
On appeal before a three-judge panel, Depue challenged
(1) the dismissal of Juror No. 9 during deliberations, who
complained of health problems because he suspected that he
had been poisoned by another juror; and (2) the district
court’s Guidelines sentencing range calculations. With
respect to the Guidelines challenge, Depue argued that the
district court employed the wrong calculation method by
calculating the actual loss from the conspiracy based on the
sales price of the properties rather than on the loan principals
for the mortgages he and his co-conspirators fraudulently
obtained. He also argued that certain properties should not
be included in the loss calculation because they were double-
counted, displayed mistaken sales prices, or were not part of
the mortgage-fraud conspiracy.
The three-judge panel affirmed the district court, holding
that it did not abuse its discretion in dismissing the juror and
UNITED STATES V. DEPUE 9
that Depue affirmatively waived his right to challenge the
alleged Guidelines errors. Depue, 879 F.3d at 1029. A
majority of the active, non-recused judges of this court voted
in favor of rehearing en banc. Having adopted the three-
judge panel’s decision and reasoning regarding the juror
dismissal question, we consider Depue’s Guidelines
challenge anew.
II
A.
Depue argues that the district court made numerous
errors in the calculation of the loss amount from his offenses,
which resulted in a 22-level enhancement to his Guidelines
sentencing range. Because Depue did not object to any
alleged Guidelines errors during his trial or sentencing, we
apply plain error review. See United States v. Olano,
507 U.S. 725, 731–35 (1993); United States v. Hammons,
558 F.3d 1100, 1103 (9th Cir. 2009); see also Fed. R. Crim.
P. 52(b) (“A plain error that affects substantial rights may be
considered even though it was not brought to the court’s
attention.”). 4
4
Depue argues that we are not limited to the plain error standard
when the issue presented is a pure question of law. See United States v.
Torres, 828 F.3d 1113, 1123 (9th Cir. 2016). But see United States v.
Yijun Zhou, 838 F.3d 1007, 1015–17 (9th Cir. 2016) (Graber, J.,
concurring) (suggesting that the “pure question of law” exception to
plain error review should be reconsidered). We need not address whether
the “pure question of law” exception applies, or whether it should be
reconsidered, as it is not pertinent here. Depue’s argument that the
district court used the wrong method to calculate the total loss amount is
a mixed question of law and fact, not a pure question of law. He claims
that the sales-price method was not a “reasonable estimate of the loss,”
U.S.S.G. § 2B1.1, cmt. 3(C), based on the loan information available in
10 UNITED STATES V. DEPUE
The general requirements of plain error review are
familiar enough. “Plain error is (1) error, (2) that is plain,
and (3) that affects substantial rights.” Hammons, 558 F.3d
at 1103 (internal quotation marks omitted) (quoting United
States v. Ameline, 409 F.3d 1073, 1078 (9th Cir. 2005) (en
banc)). If these conditions are met, the reviewing court has
the discretion to grant relief so long as the error “seriously
affects the fairness, integrity, or public reputation of judicial
proceedings.” Id.
As a threshold matter, to constitute “error” under the first
requirement, a defendant’s claim or objection must not be
“intentionally relinquished or abandoned.” Molina-Martinez
v. United States, 136 S. Ct. 1338, 1343 (2016). Otherwise,
the defendant has affirmatively acquiesced to the district
court’s ruling, and the district court made no error, plain or
otherwise. See Olano, 507 U.S. at 732–34. Thus, forfeited
claims are reviewed for plain error, while waiver precludes
appellate review altogether. We write to clarify this long-
established distinction specifically in the sentencing context.
B.
The Supreme Court made clear a quarter-century ago
that “[w]aiver is different from forfeiture. Whereas forfeiture
is the failure to make the timely assertion of a right, waiver
is the ‘intentional relinquishment or abandonment of a
known right.’” Id. at 733 (emphasis added) (quoting Johnson
v. Zerbst, 304 U.S. 458, 464 (1938)).
this case. See Yijun Zhou, 838 F.3d at 1012 (majority opinion)
(concluding that de novo review of a forfeited Guidelines challenge is
not appropriate where “[d]efendant’s argument requires that we apply
the legal standard in the [statute] to the particular factual details in the
record”).
UNITED STATES V. DEPUE 11
We elaborated on the knowledge requirement for waiver
in United States v. Perez, 116 F.3d at 840. Perez held that a
defendant forfeited, as opposed to waived, his right to appeal
an erroneous jury instruction even though his attorney
submitted the instructions at trial. Id. at 845–46. Perez so
concluded because there was no “evidence in the record that
the defendant was aware of . . . the relinquished or
abandoned right.” Id. at 845. Although defense counsel
submitted the erroneous instructions, there was no indication
that counsel knew what the correct instructions would have
been and, “for some tactical or other reason,” did not submit
them. Id. Perez explained that waiver occurs when a
defendant “considered the controlling law, . . . and, in spite
of being aware of the applicable law,” relinquished his right.
Id.
Under Perez, a failure to object or an uninformed
representation to the court is not alone sufficient evidence of
waiver. Rather, there must be evidence that the defendant
was aware of the right he was relinquishing and relinquished
it anyway. Id. Absent such evidence, failure to preserve a
claim constitutes forfeiture subject to plain error review.
Since Perez, we have routinely applied plain error
review to sentencing determinations when defendants have
failed to object to the district court’s sentencing
calculations—or even affirmatively endorsed them—as long
as the actual evidence of knowing relinquishment required
by Perez was absent. See, e.g., United States v. Alvirez,
831 F.3d 1115, 1126 (9th Cir. 2016); United States v.
Gallegos-Galindo, 704 F.3d 1269, 1272 (9th Cir. 2013);
Hammons, 558 F.3d at 1103; United States v. Waknine,
543 F.3d 546, 551 (9th Cir. 2008); United States v. Jimenez,
258 F.3d 1120, 1123–24 (9th Cir. 2001). The critical
question has been whether there was evidence indicating the
12 UNITED STATES V. DEPUE
defendants knew of their rights and chose to relinquish them
anyway.
For example, United States v. Jimenez held that a
defendant who “confirmed the accuracy of the PSR” had
forfeited, not waived, his right to appeal the district court’s
sentencing errors. 258 F.3d at 1124. Jimenez argued that the
district court’s reliance on the PSR was erroneous because
the PSR did not specify the statute of conviction for his
offense. Id. at 1125–26. We held that plain error review was
available because “[t]here is no evidence that Jimenez knew
of any requirement that the statute of conviction had to be
cited in the PSR or that he considered objecting at the
hearing, but ‘for some tactical or other reason rejected the
idea.’” Id. at 1124 (quoting Perez, 116 F.3d at 845); see also
United States v. Potter, 895 F.2d 1231, 1238–39 & n.6 (9th
Cir.1990) (reviewing challenge to PSR for plain error where
defense counsel “agreed with the prosecutor and the court to
proceed on the basis of the [PSR]” at sentencing).
This case is precisely parallel to Jimenez. Like the
defendant in that case, Depue did not object to the accuracy
of the PSR with respect to the alleged errors he now raises
on appeal. Apart from mentioning that the PSR misstated his
previous dates of incarceration, Depue stated that “the rest
of [the PSR] appeared to be correct.” Similarly, the record is
devoid of any evidence that Depue knew of the errors he now
asserts, much less that he intended to relinquish them.
Although Depue did object to the dates of incarceration
in the PSR, his doing so is not evidence that he was aware of
and considered objecting to other alleged errors, but “for
some tactical or other reason, rejected the idea.” Perez,
116 F.3d at 845. The relevant question is whether Depue
knew the substantive legal rules underlying the particular
challenges to the Guidelines calculation he raises on appeal,
UNITED STATES V. DEPUE 13
and knew that the district court’s calculation violated those
rules. See Jimenez, 258 F.3d at 1124 (“There is no evidence
that Jimenez knew of any requirement that the statute of
conviction had to be cited in the PSR . . . .”); Perez, 116 F.3d
at 845 (“[T]he record reveals that neither defendants, the
government, nor the court was aware of Mendoza’s
requirement that the ‘in relation to’ element be submitted to
the jury.” (citing United States v. Mendoza, 11 F.3d 126, 128
(9th Cir. 1993))). The evidence indicates he did not. Nothing
in the record suggests that Depue considered objecting to the
calculation method or to any of the alleged factual
inaccuracies he raises now. The fact that Depue knew
generally that he could object if he recognized a mistake, or
that he recognized and raised other errors, does not mean that
he waived the right to challenge the specific alleged errors
he raises on appeal.
We therefore hold that Depue forfeited—rather than
waived—his challenge to the sentencing calculation on
appeal. In doing so, we underscore that the distinction
between waiver and forfeiture is particularly important in the
sentencing context. By requiring evidence that a waiver is
knowing, and therefore permitting plain error review when
such evidence is absent, we preserve our ability to review
sentencing errors even if the parties were not diligent or
knowledgeable enough to identify them during sentencing.
The Sentencing Guidelines “are complex, and so there will
be instances when a district court’s sentencing of a defendant
within the framework of an incorrect Guidelines range goes
unnoticed.” Molina-Martinez, 136 S. Ct. at 1342–43; see
also Rosales-Mireles v. United States, 138 S. Ct. 1897, 1904
(2018). The risk is heightened where, as in this case, the
defendant proceeds pro se. Although a district court will
often ask whether the parties object to its Guidelines
calculations, it “has the ultimate responsibility to ensure that
14 UNITED STATES V. DEPUE
the Guidelines range it considers is correct.” Rosales-
Mireles, 138 S. Ct. at 1904. As the Supreme Court has
explained, uncorrected Guidelines errors risk depriving
defendants of liberty beyond what is necessary to serve the
purposes of punishment. See id. at 1908. Such errors also
undermine the United States Sentencing Commission’s (“the
Commission”) ability to revise the Guidelines to ensure
certainty and fairness in the sentencing process more
broadly, because the Commission relies on data from
individual sentencing proceedings to amend the Guidelines.
Id. Attention to the distinction between forfeiture and
waiver—which results in a distinction between plain error
appellate review and no appellate review—is thus of special
salience in the sentencing context.
C.
Because we hold that Depue forfeited his challenge to
the district court’s Guidelines calculation, we evaluate
whether the calculation was plain error affecting Depue’s
substantial rights. Fed. R. Crim. P. 52(b); Hammons,
558 F.3d at 1103. We conclude that, except for the absence
of waiver, the plain error requirements are not met.
“An error is plain if it is ‘contrary to the law at the time
of appeal . . . .’” Ameline, 409 F.3d at 1078 (alteration in
original) (quoting Johnson v. United States, 520 U.S. 461,
468 (1997)). It affects substantial rights if the defendant can
“demonstrate a reasonable probability that [he] would have
received a different sentence if the district court had not
erred.” United States v. Joseph, 716 F.3d 1273, 1280 (9th
Cir. 2013) (alteration in original) (internal quotation marks
omitted) (quoting United States v. Tapia, 665 F.3d 1059,
1061 (9th Cir. 2011)).
UNITED STATES V. DEPUE 15
Depue’s primary objection to the Guidelines calculation
is that the district court erred by calculating the actual loss
from the conspiracy based on the sales price of the purchased
properties, rather than on the loan principals of the
mortgages he and his co-conspirators fraudulently obtained.
Regardless of whether the district court’s loss calculation
method was legally erroneous, Depue has not met his burden
to show that the alleged error affected his substantial rights.
“When a defendant is sentenced under an incorrect
Guidelines range . . . the error itself . . . most often will[] be
sufficient to show a reasonable probability of a different
outcome absent the error.” Molina-Martinez, 136 S. Ct. at
1345. But here, the evidence is insufficient to demonstrate
that a different method would have generated a lower
Guidelines range, and so does not show “a reasonable
probability of a different outcome.” Id.
According to the Guidelines, a 22-level enhancement is
appropriate for fraud causing a loss between $25 million and
$65 million. U.S.S.G. § 2B1.1(b)(1)(L). Based on evidence
submitted by the government, the total loss as calculated
using the sales price of the properties amounted to
$25,488,050. Depue has only provided evidence that the
allegedly erroneous calculation method resulted in over-
counting the loss on one property by $20,250, far less than
what he must show to demonstrate that the 22-level
enhancement is incorrect. He has not shown that the
calculation method resulted in over-counting the loss on
other properties; any possibility that it did so is speculative.
See Jones v. United States, 527 U.S. 373, 394–95 (1999)
(“Where the effect of an alleged error is so uncertain, a
defendant cannot meet his burden of showing that the error
actually affected his substantial rights.”).
16 UNITED STATES V. DEPUE
In fact, Depue seems to recognize that a loan-principal
calculation method would not yield a significantly different
calculation. He acknowledges that the “vast majority” of the
properties involved in the scheme were purchased with
100% financing, and so the principal amount of the loan
would be approximately equal to the sales price.
Depue’s remaining claims amount to factual disputes
underlying the Guidelines calculation. He argues that certain
properties should not be included in the loss calculation
because they were double-counted, displayed mistaken sales
prices, or were not part of the mortgage-fraud conspiracy.
Unless extreme, “an error that hinges on a factual dispute is
not ‘obvious’ as required by the ‘plain error’ standard.” Yijun
Zhou, 838 F.3d at 1011; see also United States v. Scrivner,
114 F.3d 964, 968–70 (9th Cir. 1997). We are not convinced
that the district court’s factual errors, if any, were so
egregious as to be plainly erroneous.
III
Because the record does not indicate that Depue
knowingly relinquished his right to appeal the alleged
Guidelines errors, we apply plain error review to his
forfeited claims. However, Depue has not demonstrated that
the district court committed plain error affecting his
substantial rights. We therefore affirm Depue’s conviction
and sentence.
AFFIRMED.