United States v. Daniel Stanford

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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 17-30285 United States Court of Appeals
Fifth Circuit
FILED
UNITED STATES OF AMERICA, February 19, 2018
Lyle W. Cayce
Plaintiff-Appellee, Clerk
v.
DANIEL JAMES STANFORD,
Defendant-Appellant.
Appeals from the United States District Court
for the Western District of Louisiana
Before STEWART, Chief Judge, and JOLLY and OWEN, Circuit Judges.
CARL E. STEWART, Chief Judge:
This criminal appeal returns to this court after Stanford was resentenced
following this court’s decision in United States v. Stanford remanding the case
“for any other proceedings as needed.” 1 Back before this court on appeal,
Stanford, in addition to alleging various errors in the district court’s
redetermination of his guideline range, argues that the district court erred in
denying his request for in camera review of various co-conspirator witness
reports and requests that this court reassign the case to a different district
court judge. Because the district court did not commit reversible error, we
1 823 F.3d 814, 852 (5th Cir. 2016) (hereinafter, “Stanford I”).
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AFFIRM. Stanford’s request for reassignment of the case to a different district
court judge is DENIED.
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY 2
On September 4, 2012, Stanford and eight co-conspirators were indicted
for their then-alleged involvement in a conspiracy to distribute a controlled
substance analogue (“CSA”), in violation of 21 U.S.C. §§ 841, 846(b)(1)(c), 813,
and 802(32)(A).
As relevant here, Stanford was charged with: (1) conspiracy to distribute
a CSA (“Count One”); conspiracy to introduce and cause to be introduced
misbranded drugs into interstate commerce (“Count Two”); and conspiracy to
engage in money laundering (“Count Three”) (collectively, “Counts One, Two,
and Three”). At the time of his indictment, Stanford was a practicing criminal
defense lawyer in Lafayette, Louisiana. The product in question, “Mr. Miyagi,”
is a synthetic cannabinoid, and contained a Schedule I CSA known as “AM–
2201.” Prior to trial, the parties quarreled as to whether Count One required
an instruction to the jury that they must find, as an element of the CSA
conspiracy, that Stanford knew AM-2201 was a CSA.
The district court concluded that such knowledge was not required, but
acknowledged that the question was the subject of a circuit split. The district
court agreed to send the issue to the jury as an interrogatory and permitted
Stanford to put on evidence addressing his knowledge that AM-2201 was a
CSA. In fact, the district court’s language was more emphatic, stating that the
“question of knowledge needs to be addressed in th[e] trial.” After a 10-day jury
trial, on August 20, 2014, the jury found Stanford guilty on Counts One, Two,
and Three. In a special interrogatory, the jury concluded that Stanford knew
2 A more detailed factual background setting forth trial testimony and the factual
underpinnings of Stanford’s indictment is set forth in Stanford I. We address the facts and
procedural history as pertinent to this appeal.
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that AM-2201 was a CSA. On January 15, 2015, the district court sentenced
Stanford to 121 months’ imprisonment, grouping Counts One and Two and
applying the base offense level calculated for Count One as the underlying
offense for purposes of calculating the base offense level for Count Three. The
sentences on Count One and Count Three ran concurrently. Stanford timely
appealed.
In Stanford I, Stanford challenged his convictions on Count One and
Count Three. He also argued that the Government ran afoul of Brady v.
Maryland, 373 U.S. 83 (1963) by failing to turn over witness reports of co-
defendants Dan Francis, Boyd Barrow, Drew Green, and Joshua Espinoza.
Applying the Supreme Court’s intervening ruling in McFadden v. United
States, the Stanford I panel agreed with Stanford’s challenge to his conviction
on Count One. See –– U.S. ––, 135 S. Ct. 2298 (2015). The McFadden decision
resolved the knowledge dispute in Stanford’s favor, holding that a defendant’s
knowledge that a CSA was indeed a CSA is an element necessary to secure a
conviction under 21 U.S.C. §§ 846 and 841(b)(1)(C). See id. at 2305. In light of
that holding, the Stanford I panel concluded that the district court’s failure to
properly instruct the jury with respect to knowledge was not harmless error.
Stanford I, 823 F.3d at 827–38. Notwithstanding that conclusion, the Stanford
I panel “affirmed the sentence and conviction on all other counts, and
remand[ed] for [any other] proceedings as needed.” 3 Stanford I, 823 F.3d at
822, 852.
3The affirmation of the sentences on the surviving convictions was likely rooted in the
rationale outlined in footnote 35, which provided:
At oral argument, Stanford’s counsel agreed that any McFadden error affects
only Count One. Thus, the reversal on that court [sic] has no effect on the
sentence related to any other counts.
Stanford I, 823 F.3d at 843 n.35.
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On remand, the district court, despite feeling constrained from doing so
in light of Stanford I’s mandate, resentenced Stanford on the remaining
convictions—namely, Count Two and Count Three. The district court imposed
the same sentence of 121 months’ imprisonment on Count Three, arriving at
the base offense level for Count Three through the calculation of the guideline
range applicable to Count Two. The district court also reiterated its Brady
ruling on remand, summarily rejecting Stanford’s request for the same witness
reports. Stanford timely appealed these rulings. In addition, Stanford requests
that this panel reassign the case to a different district court judge.
II. DISCUSSION
The parties understandably spend considerable time on appeal briefing
whether Stanford was entitled to resentencing, focusing on the repercussions
of Stanford I’s mandate and the perceived oral argument concession embodied
in footnote 35 of the Stanford I opinion. Nevertheless, we decline to address
the applicability of the mandate rule to Stanford’s entitlement to resentencing.
Instead, we will proceed to the merits of the sentencing issues raised because
there was no reversible error. See United States v. Simpson, 796 F.3d 548, 552
n.7 (5th Cir. 2015) (reaching merits to affirm after reminding that mandate
rule is discretionary rather than jurisdictional).
A. Application of Sentencing Guidelines at Resentencing
This court reviews a district court’s interpretation and application of the
Guidelines, including any cross references and selection of the applicable
sentencing guideline, de novo. See United States v. Grant, 850 F.3d 209, 219
(5th Cir. 2017) (citation omitted); United States v. Johnston, 559 F.3d 292, 294
(5th Cir. 2009) (citation omitted). Where a party fails to present an argument
to the district court, however, this court reviews the sentencing objection for
plain error. See United States v. Hughes, 726 F.3d 656, 659 (5th Cir. 2013). “If
procedural error occurs, harmless error review applies.” United States v. Clay,
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787 F.3d 328, 330 (5th Cir. 2015) (citation omitted). 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.” United States v. Diaz-
Corado, 648 F.3d 290, 292 (5th Cir. 2011).
Stanford argues that the district court committed reversible error in its
interpretation and application of the Guidelines for Count Two and, by
extension, Count Three. Specifically, Stanford argues that the district court
erred by: (1) failing to select the applicable guideline in the manner prescribed
by the Guidelines; and (2) applying cross reference U.S.S.G. § 2N2.1(c)(2). We
disagree.
i. Selection of Applicable Guideline
We first address Stanford’s argument that the district court committed
reversible error when purportedly bypassing selection of the most appropriate
guideline in the manner instructed by U.S.S.G. §§ 1B1.1(a)(1) and 1B1.2(a).
The steps for determining the applicable guideline is not for this court to
decide. That method is clearly set forth in the Guidelines. As this court
recently reminded in Grant, the selection of the applicable guideline begins
with reference to, first, the count of conviction, and, then, the Statutory Index. 4
See 850 F.3d at 209. The Statutory Index of the Guidelines provides the
4 Although this circuit in United States v. Principe, 203 F.3d 849, 851 (5th Cir. 2000)
explained that courts “generally” reference the Statutory Index to determine the applicable
guideline, the plain language of U.S.S.G. 1B1.2(a) appears to command reference to the
Statutory Index. See Grant, 850 F.3d at 220 n.2. (“The Guidelines instruct courts to ‘[r]efer
to the Statutory Index . . . to determine the . . . offense guideline, referenced in the Statutory
Index for the offense of conviction.’”). Opinions from other circuits lend support to the notion
that reference to the Statutory Index should not be brushed aside. See, e.g., United States v.
Almeida, 710 F.3d 437, 441–42 (1st Cir. 2013); United States v. Boney, 769 F.3d 153, 160 (3d
Cir. 2014); United States v. Hochschild, 442 F.3d 974, 977 (6th Cir. 2006); United States v.
Kupfer, 797 F.3d 1233, 1244–46 (10th Cir. 2015).
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applicable offense guidelines for various criminal statutes. See U.S.S.G. app.
A (2016). In the simplest cases, a statute will have only one applicable
guideline listed in the Statutory Index. Where, however, the Statutory Index
provides more than one applicable guideline for a statute, the Guidelines
instruct district courts to “determine which of the referenced guideline sections
is most appropriate for the offense conduct charged in the count of which the
defendant was convicted.” U.S.S.G. 1B1.2(a) & cmt. n.1; see also United States
v. Principe, 203 F.3d 849, 851 (5th Cir. 2000). While “the allegations in the
indictment” serve as the critical piece “to [the] determin[ation] [of] whether the
alleged offense more closely resembles [one guideline over the other],” see, e.g.,
Grant, 850 F.3d at 219, 220 n.2., this court also employs the text of the
potential guidelines and statute of conviction to assist in the inquiry. Principe,
203 F.3d at 851–53. In addition, this court considers the type of conduct that
the statute was designed to punish. Id.
Stanford contends that the district court failed to follow the directions of
U.S.S.G. §§ 1B1.1(a)(1) and 1B1.2(a) when selecting the applicable guideline,
and, in doing so, improperly selected U.S.S.G. § 2N2.1 rather than U.S.S.G. §
2B1.1 as the offense guideline applicable to the offense of conviction—the
misbranding conspiracy alleged in Count Two. Pointing to the conduct charged
in the indictment, and this circuit’s decision United States v. Arlen, 47 F.2d
139 (5th Cir. 1991), Stanford contends that U.S.S.G. § 2B1.1 was the most
appropriate guideline selection because the conduct charged in the indictment
for Count Two demonstrated a quintessential fraudulent scheme. This
selection is particularly clear, Stanford argues, because the count charged a
conspiracy to violate 21 U.S.C. § 331 “with the intent to defraud and mislead”
the Food and Drug Administration (FDA) and without that allegation, a
violation of the FDCA is a mere misdemeanor. The Government counters by
arguing that because the indictment alleged that the sole object of the
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conspiracy was to distribute misbranded drugs for profit, U.S.S.G. § 2N2.1 was
the appropriate guideline selection. Count Two as a whole, the Government
urges, charges a drug trafficking offense not a fraud offense. Significant to this
contention is the incorporation of drug trafficking related allegations from
Count One. The Government maintains that U.S.S.G. § 2B1.1 is not meant to
address this sort of drug trafficking scheme involving mislabeled products,
directing the court’s attention to the guideline’s enhancements and cross
references.
For the reasons stated below, we agree with the Government that
U.S.S.G. § 2N2.1 is the most appropriate guideline.
Count Two of the indictment charges conspiracy to introduce misbranded
drugs into interstate commerce, in violation of 18 U.S.C. § 371 and 21 U.S.C.
§§ 331, 333(a)(2). The Statutory Index for 18 U.S.C. § 371 lists various
guidelines, including U.S.S.G. § 2X1.1. The district court selected 2X1.1, which
sent the district court back to the guideline of the substantive offense—here,
21 U.S.C. §§ 331 and 333(a)(2). See U.S.S.G. § 2X1.1(a) (2016). Neither party
objected to the district court’s decision to use U.S.S.G. § 2X1.1(a). Similarly,
the parties and the district court focused on Count Two as the substantive
offense driving the calculation of the base offense level for the money
laundering conspiracy conviction in Count Three.
21 U.S.C. § 331(a) prohibits introducing or causing to be “introduc[ed]
into interstate commerce any . . . drug . . . that is adulterated or misbranded.”
21 U.S.C. § 331(a). 21 U.S.C. § 333(a)(2) prescribes a penalty “of not more than
three years or [a] fine[ ] not more than $10,000, or both” for violations of 21
U.S.C. § 331 “with the intent to defraud or mislead.” 21 U.S.C. § 333(a)(2).
The Statutory Index for 21 U.S.C. § 333(a)(2), addressing, inter alia,
punishment for violations of 21 U.S.C. § 331 with an intent to defraud or
mislead, lists both U.S.S.G. § 2B1.1 and U.S.S.G. § 2N2.1 as potentially
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applicable guidelines. See U.S.S.G. app. A (2016). The Statutory Index for 21
U.S.C. § 331(a) lists only U.S.S.G. § 2N2.1. Id.
The district court acknowledged many of the arguments Stanford
advances on appeal and concluded that U.S.S.G. § 2N2.1 was appropriate when
viewing Count Two alone. First, the district court stated that, “even if you
confined yourself just to the language of the indictment in Count 2, it becomes
clear that the underlying offense is the drug conspiracy.” After Stanford
himself raised the arguments he now raises on appeal, the district court
responded “when we look to the indictment itself for Count 2, it contains the
information that the Court has indicated, such that the Court is on sufficient
notice as to what is the conspiracy.” It is clear that the district court, when
cabining its review to the allegations in Count Two, concluded that the fraud
guideline did not adequately account for offense conduct charged in Count Two,
and that it was not, as Stanford suggested, restricted to applying that guideline
in light of Arlen and Grant. Instead, the district court selected U.S.S.G. §
2N2.1. Irrespective of the district court’s approach, we independently conclude
that U.S.S.G. § 2N2.1 was the most appropriate guideline.
Although the selection between U.S.S.G. § 2N2.1 or U.S.S.G. § 2B1.1 is
not an issue of first impression, making the selection upon this factual
backdrop appears rare. That is, the selection is typically made in cases that
concern drugs generally regulated by the FDA rather than, as here, a CSA. Cf.
United States v. Ihenacho, 716 F.3d 266, 276 (1st Cir. 2013) (selecting U.S.S.G.
§ 2B1.1 rather than U.S.S.G. § 2N2.1 in a case involving both controlled and
non-controlled substances). Stanford argues that this distinction is not
meaningful, reasoning that a non-compliant FDA-regulated drug is no
different than a non-compliant controlled substance for purposes of this
analysis. In light of the conduct charged in Count Two of the Indictment, we
disagree.
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Count Two of the Indictment alleges, in relevant part, that the FDA, in
its authority as the regulator of drugs, as that term is defined by 21 U.S.C. §
321(g), ensures that drugs are, among other things, properly labeled for their
intended uses before they can be legally marketed in interstate commerce.
Count Two goes on to explain that the Federal Food, Drug, and Cosmetic Act
(“FDCA”) prohibits the manufacture, introduction or delivery for introduction,
and receipt of misbranded drugs. Clarifying the meaning of misbranded, Count
Two of the Indictment states that a drug is misbranded if the labeling was: (1)
false and misleading; (2) lacked the name and place of business of the
manufacturer; or (3) lacked adequate directions for use. Before proceeding to
the conspiracy allegations, object of the conspiracy, and overt acts, Count Two
of the Indictment incorporated paragraphs D through H of Count One. These
paragraphs all related to the sale and manufacture of “Mr. Miyagi.” The
Conspiracy portion of Count Two of the Indictment alleges that Stanford and
his cohorts, “with intent to defraud and mislead, did knowingly and
intentionally combine . . . to [violate the FDCA] . . . [by] receiv[ing],
manufactur[ing], packag[ing], hold[ing] for sale, distribut[ing], introduc[ing],
and caus[ing] the introduction . . . drugs that were misbranded.”
The object of the conspiracy, Count Two of the Indictment goes on to
allege, was to “distribute . . . to consumers and other distributors, misbranded
drugs for profit.” Count Two of the Indictment ends with the listing of two overt
acts that Stanford and co-conspirators took in furtherance of the conspiracy:
(1) packaging Mr. Miyagi with a misleading “directions for use,” “warning,” and
listing of wrong ingredients; and (2) advising individual franchise owners of
Curious Goods L.L.C. on how to store, display, and sell the Mr. Miyagi
products, how to detect and evade law enforcement, and how to respond to
customers who asked questions about how to use the products and/or the
physiological effects of the Mr. Miyagi products.
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Upon this backdrop, the court is tasked with solving one principal
question: what offense guideline accounts for the offense conduct charged in
Count Two?
A review of the offense guidelines themselves are not dispositive, but
U.S.S.G. § 2N2.1 appears a more natural fit. The background of U.S.S.G. §
2N2.1, notes that the guideline addresses “regulatory offense[s] that involved
knowing or reckless conduct” while U.S.S.G. § 2B1.1’s background notes that
it “covers offenses involving theft, stolen property, property damage or
destruction, fraud, forgery, and counterfeiting.” Compare U.S.S.G. § 2N2.1
cmt. background (2016) with U.S.S.G. § 2B1.1 cmt. background (2016). Viewed
in its entirety, U.S.S.G. § 2N2.1 is relatively straightforward providing for a
base offense level, one specific offense characteristic, and two potential cross
references—one where the offense involves fraud and the other where the
offense was committed in furtherance of or to conceal another offense. See
U.S.S.G. § 2N2.1 (2016). U.S.S.G. § 2B1.1 is, by comparison, more far reaching
touching a wide variety of fraudulent behavior and providing four cross
references—none having any clear applicability to the offense conduct charged
in Count Two of the Indictment. See U.S.S.G. § 2B1.1 (2016).
The argument that Stanford advances on this issue essentially calls on
this court to establish a per se rule mandating that district courts select
U.S.S.G. § 2B1.1 wherever an intent to defraud or mislead is charged in
conjunction with a violation of the FDCA. The argument fails for one simple
reason: this court, under these circumstances, is not empowered to override
the decision of the Sentencing Commission that both U.S.S.G. §§ 2N2.1 and
2B1.1 are appropriate guidelines where defrauding or misleading is charged.
If the Sentencing Commission agreed with Stanford’s approach, it could have
simply provided that U.S.S.G. § 2B1.1 is the only applicable offense guideline
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for violations of 21 U.S.C. § 333(a)(2). 5 Even taking Stanford’s reasoning,
essentially an elements-based approach to selecting the most appropriate
guideline, misbranding was just as essential to the conviction as the alleged
intent to defraud or mislead, and those allegations fit comfortably under
U.S.S.G. § 2N2.1. 6
Taking into account all the allegations of Count Two, the offense conduct
charged in the indictment for Count Two demonstrates that the gravamen of
the conduct charged was a violation of the FDCA for purposes of concealing the
involvement with Mr. Miyagi. Targeting in on the focus of the offense conduct
in Count Two, the scheme is one more aptly understood as evading the
discovery of a CSA. Accordingly, a guideline that plainly permits such a
consideration is most appropriate. 7 See, e.g., United States v. Hochschild, 442
F.3d 974, 978 (6th Cir. 2006) (analyzing guideline cross references to determine
the most appropriate guideline); Ihenacho, 716 F.3d at 276 (referencing
U.S.S.G. § 2N2.1 cross reference in analysis of most appropriate guideline).
U.S.S.G. § 2N2.1 is the most appropriate guideline.
Although Stanford waived the argument by raising it for the first time
in his reply brief, the court rejects his argument that the alleged overt acts in
Count Two were not relevant to the selection of the applicable guideline. See
5 21 U.S.C. § 333(a)(2) also addresses enhanced penalties where an individual is
convicted of a second FDCA violation. See 21 U.S.C. § 333(a)(2). Nevertheless, the
Sentencing Commission overwhelmingly prefers U.S.S.G. § 2N2.1 for FDCA violations and
its inclusion of U.S.S.G. § 2B1.1 is merely a nod to the inclusion of the element of fraud.
6 21 U.S.C. § 333(a)(2) is the only FDCA related provision in the Statutory Index that
does not provide U.S.S.G. § 2N2.1 as the solely applicable guideline. See U.S.S.G. app. A
(2016). 21 U.S.C. §§ 331, 333(a)(1) and 333(b)(1)-(6) provide only U.S.S.G. § 2N2.1 as the
applicable guideline. Id. 21 U.S.C. § 333(b)(7) only references U.S.S.G. § 2N1.1. Id.
7 Naturally, there is some tension in adopting too broad a view of conduct charged
given the ability to incorporate entirely unrelated portions of one count in an indictment into
a different count. That is particularly acute here given the Government’s decision not to
retry Count One. Nevertheless, reference to the Statutory Index is the limiting factor here.
If the Sentencing Commission determined that selection of U.S.S.G. § 2N2.1 was a bridge too
far, presumably the guideline would not be included as a potential choice.
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United States v. Aguirre-Villa, 460 F.3d 681, 683 n.2 (5th Cir. 2006) (“[T]his
Court will not ordinarily consider arguments raised for the first time in a reply
brief.”). The overt acts set forth in the indictment for Count Two were relevant
to his offense of conviction, and accordingly relevant to the selection of the
applicable guideline for that offense. Indeed, the district court instructed as
much on the issue, differentiating the relevance of overt acts for the conviction
on Count Two from the now reversed Count One conviction as well as the Count
Three Conviction. 8 There is a meaningful distinction between the general
federal conspiracy statute, 18 U.S.C. § 371, which requires the Government to
prove an overt act, from the drug conspiracy statute, 18 U.S.C. § 846, which
does not require proof of an overt act. See United States v. Shabani, 513 U.S.
10, 14–15 (1994).
Stanford advances various appellate decisions that he argues compel a
different result. Although they both address guilty pleas rather than, as
relevant here, jury convictions, Ihenacho and Arlen deserve individualized
treatment.
In Ihenacho, the First Circuit affirmed the district court’s selection of the
fraud guideline in a case that alleged violations of both the FDCA and
Controlled Substances Act based on the distribution of “both controlled
substances and non-controlled substances.” 716 F.3d at 270 (emphasis in
original). The First Circuit explained that the indictment alleged an “intent to
defraud and mislead,” and rejected defendant’s suggestion that the district
court “should have ignored the indictment and instead focused on his version
8The district court provided that, with respect to the misbranding conspiracy, the
government was required to prove that “one of the co-conspirators during the existence of the
conspiracy knowingly committed at least one of the overt acts described in the superseding
indictment in order to accomplish some object or purpose of the conspiracy. Unlike in Counts
1 and 3 of the superseding indictment, for this conspiracy, Count 2, the government must
prove the commission of an overt act by a conspirator.”
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of the facts of the case.” Id. at 276 (quotation marks omitted). That decision
does not provide that the fraud guideline should be used whenever the intent
to defraud and mislead is charged. Rather, the driving force of the court’s
decision in Ihenacho was the rejection of the defendant’s futile argument that
“the [district] court should have ignored the indictment” focusing instead on
“his version of the ‘facts of the case.’” Id. To the contrary here, a faithful
application of the conduct charged in Count Two of the indictment leads to the
conclusion that U.S.S.G. § 2N2.1 is the most appropriate guideline.
This circuit’s decision in Arlen is less helpful to Stanford’s case insofar
as it is held out as foreclosing application of U.S.S.G. § 2N2.1 despite the
indictment in this case. In Arlen, after a conviction for selling steroids to users
and other dealers in violation of 21 U.S.C. §§ 331 and 333(a)(2)’s predecessor
statute, the district court upwardly departed from U.S.S.G. § 2N2.1 to apply
the fraud guideline—the Statutory Index had yet to include the fraud guideline
for 21 U.S.C. § 333(a)(2). 947 F.2d at 141, 146. The panel affirmed the district
court’s selection of the fraud guideline, reasoning that the fraud guideline
applied because fraud was the “defining characteristic” of both his conduct and
the “black market world in which he conducted his illicit steroid business.” Id.
at 146. Rather than mandating use of the fraud guideline where an intent to
defraud or mislead is alleged, Arlen provides that the selection was reasonable
in light of the district court’s conclusion that fraud was the defining
characteristic of the offense conduct as alleged in the indictment. See id.
Notably, the decision in Arlen predated the inclusion of the cross
reference in U.S.S.G. § 2N2.1 that permits a district court to apply a different
guideline where the misbranding violation was committed in furtherance of or
to conceal another offense. That cross reference was added in 1992. Indeed, at
the time of Arlen, U.S.S.G. § 2N2.1 did not have any cross references and the
current fraud cross reference was instead an application note in the
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commentary of the guideline, directing that “[i]f the offense involved theft,
fraud, bribery, revealing trade secrets, or destruction of property, apply the
guideline applicable to the underlying conduct, rather than this guideline.”
U.S.S.G. § 2N2.1 cmt. n.1 (1991).
The holdings in Ihenacho and Arlen do not establish a per se rule. Nor
could they do so without running afoul of the general principles guiding the
selection of the applicable guideline. That is, consideration of the applicable
guidelines listed in the Statutory Index followed by an individualized
assessment of the offense conduct charged in the count of conviction.
We are mindful of the modified real-offense balance struck by the
Sentencing Commission in adopting the tiered process of selecting the
applicable guideline through conduct charged and tried for the statute of
conviction and the consideration of broader conduct later when, among other
things, applying cross references, Chapter Three adjustments, and Chapter
Four’s computation of a defendant’s criminal history category. See Julie R.
O’Sullivan, In Defense of the U.S. Sentencing Guidelines’ Modified Real-Offense
System, 91 NW. U. L. REV. 1342, 1354–56 (1997) (offering compelling analysis
of the Commission’s efforts to refashion the Guidelines to address concerns of
proponents of the opposing regimes). Count Two of the Indictment does not
expressly exclude either offense guideline. There is an allegation of the intent
to defraud—U.S.S.G. § 2B1.1. There is an alleged violation of the FDCA—
U.S.S.G. § 2N2.1. Yet, this court cannot deny that the epicenter of the offense
conduct charged in Count Two of the indictment concerns concealing Mr.
Miyagi and the jury was charged with finding that one or both of the overt acts
alleged occurred. Under these circumstances, U.S.S.G. § 2N2.1 was the most
appropriate guideline. The district court did not err in concluding that the
“gravamen” of the conduct charged in the indictment rendered U.S.S.G. §
2N2.1 the most appropriate guideline. See Grant, 850 F.3d at 220.
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ii. Selection of Cross Reference
Stanford next argues that, even assuming the district court was correct
in selecting U.S.S.G. § 2N2.1 as the most appropriate guideline, cross reference
U.S.S.G. § 2N2.1(c)(2) does not apply because “offense” as that word is defined
in the Guidelines requires two offenses of conviction—a requirement the Count
One drug conspiracy could no longer satisfy. Because Stanford failed to raise
the error before the district court, the court reviews the claim for plain error.
See Hughes, 726 F.3d at 659. Concluding that the district court did not commit
plain error, we affirm the district court’s selection of cross reference U.S.S.G. §
2N2.1(c)(2).
When the court is called to interpret the Guidelines, the typical rules of
statutory interpretation are utilized. United States v. Koss, 812 F.3d 460, 473
(5th Cir. 2016). Starting with the text of the relevant guideline or cross
reference, the court uses “a plain-meaning approach” to interpret the
Guidelines. United States v. Mendez-Villa, 346 F.3d 568, 570 (5th Cir. 2003)
(per curiam). If the language is unambiguous, and does not lead to an “absurd
result,” the court’s inquiry begins and ends with the plain meaning of that
language. Koss, 812 F.3d at 473. Nevertheless, the court “do[es] not disregard
‘the cardinal rule that a statute is to be read as a whole, . . . since the meaning
of statutory language, plain or not, depends on context.’” United States v.
Hoang, 636 F.3d 677, 681 (5th Cir. 2011) (quoting King v. St. Vincent’s Hosp.,
502 U.S. 215, 221 (1991)).
The cross reference at issue provides:
If the offense was committed in furtherance of, or to conceal, an
offense covered by another offense guideline, apply that other
offense guideline if the resulting offense level is greater than that
determined above.
U.S.S.G. § 2N2.1(c)(2) (2016).
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Interpreting the cross reference, the district court turned to the
Guidelines’ definition of “offense” embodied in Application Note 1(H) of § 1B1.1.
The Guidelines define “offense” as “the offense of conviction and all relevant
conduct under § 1B1.3 (Relevant Conduct).” See U.S.S.G. § 1B1.1 cmt. n.1(H).
The district court concluded that it was “not barred from considering the facts
underlying the drug conspiracy if they [were] established by a preponderance
of the evidence.” After finding that the Count One drug conspiracy, including
Stanford’s knowledge, was established by a preponderance of the evidence, the
district court applied U.S.S.G. § 2N2.1(c)(2) because “the Guidelines
themselves direct the Court to apply the latter because it results in a greater
offense level.” See U.S.S.G. § 1B1.1(a) cmt. n.5 (2016). The district court’s
selection was not plain error.
To the issue of the necessity of a separate “offense of conviction,” there
appears to be little dispute that the first offense—referenced in “if the
offense”—necessarily refers to an offense of conviction by operation of the
“mechanical process” employed by the Guidelines. See United States v. Boney,
769 F.3d 153, 158 (3d Cir. 2014). Cf. United States v. Kaluza, 780 F.3d 647, 663
n.62 (5th Cir. 2015) (“In reading a statute, we must not look merely to a
particular clause, but consider in connection with it the whole statute.”).
Stated differently, the offense referenced in “in the offense,” by the nature of
reaching an applicable guideline through reference to the statute of conviction,
necessarily refers to an offense of conviction. See U.S.S.G. § 1B1.2(a) & cmt.
n.1 (2016).
Stanford reads the cross reference as requiring two separate offenses of
conviction—that is, the cross reference only applies “[i]f the offense [of
conviction] was committed in furtherance of or to conceal, an offense [of
conviction] covered” elsewhere in the Guidelines. Although Application Note 1
explains that all definitions are accorded “general applicability (except to the
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extent expressly modified in respect to a particular guideline or policy
statement),” the definition of “offense” comes with the proviso that it applies
“unless a different meaning is specified or is otherwise clear from the context.”
U.S.S.G. § 1B1.1 cmt. n.1 & n.1(H).
The interpretation of the second instance of “offense” that Stanford
advances conflicts with the more contextually relevant U.S.S.G. § 1B1.3 which
instructs that, “[u]nless otherwise specified . . . cross references in Chapter Two
. . . shall be determined on the basis of [relevant conduct].” U.S.S.G. § 1B1.3(a).
(emphasis added). Commentary to 1B1.3 explains that, “in the absence of more
explicit instructions in the context of a specific guideline,” relevant conduct
principles apply in the determination of cross references. U.S.S.G. § 1B1.3 cmt.
background (emphasis added). There are no explicit instructions in this case. 9
And while “offense” is defined as an “offense of conviction and all relevant
conduct,” the definition does not apply if it is “clear from the context” in which
it appears. U.S.S.G. § 1B1.1 cmt. n.1(H) (emphasis added). U.S.S.G. § 2N21.1,
itself, does not specify a different meaning for “offense,” but the plain language
of the Guidelines also clearly envisions the application of cross references
rising or falling on the basis of relevant conduct.
Defining the second instance of offense as it is used in U.S.S.G. §
2N2.1(c)(2)’s cross reference as constricted to a separate “offense of conviction”
and that offense of conviction’s relevant conduct does not comport with the
reality that the term offense is being used in the context of a cross reference.
See, e.g., United States v. Garcia, 411 F.3d 1173, 1177 (10th Cir. 2005) (“The
term ‘offense,’ as used in the cross-reference, includes both charged and
uncharged relevant conduct.” (citing United States v. Tagore, 158 F.3d 1124,
9 Application Note 2 provides that 2N2.1(c)(2) “addresses cases in which the offense
was committed in furtherance of, or to conceal, an offense covered by another offense
guideline (e.g., bribery).”
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1128 (10th Cir. 1998)). This context-specific distinction comports with U.S.S.G.
§ 1B1.5 which addresses cross references. Defining cross references as “an
instruction to apply another offense guideline,” 1B1.5 also provides that “[a]
reference may direct that, if the conduct involved another offense guideline for
such other offense is to be applied.” U.S.S.G. § 1B1.5 cmt. n.3 (2016). In
addressing those situations, application note 3 to U.S.S.G. § 1B1.5 provides
that “[c]onsistent with the provisions of § 1B1.3 (Relevant Conduct), such other
offense includes . . . conduct that occurred under circumstances that would
constitute a federal offense had the conduct taken place within the . . . United
States.” Id. In other words, the commentary concerning offense in the context
in which this court addresses it here plainly views the term as being consistent
with relevant conduct principles.
Although the issue of whether U.S.S.G. § 2N2.1(c)(2) requires two
separate offenses of conviction has yet to be addressed, several decisions
addressing a different guideline are insightful.
In United States v. Williams, this circuit addressed an argument similar
to one advanced by Stanford in the context of cross reference U.S.S.G. §
2C1.1(c)(1). See 332 F. App’x 937, 939–40 (5th Cir. 2009) (per curiam)
(unpublished). U.S.S.G. § 2C1.1(c)(1) provides:
If the offense was committed for the purpose of facilitating the
commission of another criminal offense, apply the offense
guideline applicable to a conspiracy to commit that other offense,
if the resulting offense level is greater than that determined above.
Id. at 938.
The defendant in Williams, after pleading guilty to extortion affecting
interstate commerce for his agreement to escort shipments of cocaine for cash
payment, was sentenced under U.S.S.G. § 2D1.1 after the district court
concluded that cross reference U.S.S.G. § 2C1.1(c)(1) permitted it to take into
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account the conspiracy to commit drug trafficking. Id. The defendant argued
that the cross reference only applies when the defendant has been convicted of
a conspiracy, and that he could not conspire with an undercover agent. Id. at
939. The court explained that it was not relevant whether there was actually
a conspiracy to commit the other offense, “but rather that the purpose of the
[extortion] offense was to facilitate the commission of another criminal
offense.” Id. at 939–40. The court observed that it was sufficient that the
defendant admitted at his sentencing hearing that he understood the purpose
of his services to be to protect a shipment of cocaine. Id. at 939–40. Similarly,
in United States v. Solomon, the Third Circuit, addressing whether “another
criminal offense” required a charge or conviction, concluded that the “the
Guidelines [did not] require . . . that [the defendant] actually facilitated
another criminal offense.” 766 F.3d 360, 364–65 (3d Cir. 2014) (emphasis in
original). The “key word” to interpreting the cross reference, the panel
explained, was “‘purpose’—i.e., the reason the defendant accepted the
payments.” Id. at 367 (emphasis in original).
The reasoning advanced by the panels in Williams and Solomon is
compelling on this issue. In both instances, faced with reference to another
criminal offense, the panels did not conclude that the generally applicable
definition required that “another criminal offense” meant a criminal offense of
conviction. In other words, the court concluded that the predicate for applying
the cross reference was that the offense of conviction was “committed for the
purpose of facilitating” another offense irrespective of a jury conviction on the
other offense.
Extrapolating from that reasoning, the predicate for application of
U.S.S.G. § 2N2.1(c)(2) is not necessarily another offense of conviction. Rather,
it is sufficient that the offense for which the defendant is convicted—i.e., “the
offense”—was committed “in furtherance of, or to conceal” another offense
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regardless of whether there is a jury conviction on the other offense. These
interpretations of the Guidelines comport with the context that the decision of
a cross reference, unless explicitly instructed otherwise, is made on the basis
of relevant conduct principles.
In light of the foregoing, the district court’s selection of cross reference
U.S.S.G. § 2N2.1(c)(2) was not plain error. See, e.g., United States v. Bishop,
603 F.3d 279, 281 n.5 (5th Cir. 2010) (“An error is not plain ‘unless the error is
clear under current law’ . . . [particularly where] [t]here are no published
decisions in this Circuit that address [the issue].”). Cf. United States v.
Aderholt, 87 F.3d 740, 744 (5th Cir. 1996) (“The error is evident from a plain
reading of the statute and thus, is obvious.”). 10
***
In sum, the district court’s resentencing of Stanford is affirmed. Because
we find no reversible error in the calculation of Stanford’s guideline for Count
Two, we, by extension, affirm the sentence on Count Three as well.
B. Denial of In Camera Review
Stanford next argues that this court should remand the case with
instructions that the district court conduct in camera review of certain co-
conspirator witness statements because those statements contain exculpatory
Brady material concerning his knowledge that AM-2201 was a CSA.
To overcome Stanford I’s denial of his Brady claim for the same witness
reports, Stanford argues that the issue of knowledge was made newly relevant
by the decision in Stanford I and as such, he was not foreclosed from requesting
the witness reports based on the argument that these reports might include
10 Stanford does not advance a rule of lenity argument on appeal nor do we conclude
that he could successfully do so. See United States v. Buck, 847 F.3d 267, 277 n.43 (5th Cir.
2017) (explaining that use of the term location within the Guidelines “d[id] not have the kind
of ‘grievous ambiguity’ that implicates the rule of lenity.”).
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exculpatory information related to his knowledge that AM-2201 was a CSA.
The Government contends that Stanford is precluded from re-litigating
Stanford I’s holding that he failed to establish a colorable Brady claim. We
agree with the Government and hold that Stanford was not entitled to renew
his Brady claim on remand.
When a case is remanded for resentencing, district courts in this circuit
are not permitted to provide parties “a second bite at the apple” by holding a
de novo resentencing as a matter of course. United States v. Marmolejo, 139
F.3d 528, 531 (5th Cir. 1998) (“Marmolejo II”). Rather, courts are confined to
addressing “discrete, particular issues directed by the court,” or those that
“aris[e] out of” or become “newly relevant” because of the appeal. Id. at 530,
531 (citation omitted); United States v. Lee, 358 F.3d 315, 325 (5th Cir. 2004)
(“Lee II”). In that vein, this circuit instructs district courts to faithfully apply
the “waiver” doctrine by discerning whether an issue raised after a remand is
one that could have been, but was not, raised during the original appeal. See
Med. Ctr. Pharm. v. Holder, 634 F.3d 830, 834 (5th Cir. 2011) (explaining that
“[law-of-the-case] rule . . . is qualified by the waiver doctrine, which holds that
an issue that could have been but was not raised on appeal is forfeited and may
not be revisited by the district court on remand.”). The doctrine, aimed at
addressing a “party’s inaction[,]. . . . promotes procedural efficiency and
prevents the bizarre result that a party who has chosen not to argue a point on
a first appeal should stand better as regards the law of the case than one who
had argued and lost.” Lindquist v. City of Pasadena, 669 F.3d 225, 239–40 (5th
Cir. 2012) (internal quotation marks omitted). The district court’s reasoning
on remand, namely, not relying on the waiver doctrine in ruling on the request
for in camera review, does not preclude this court’s consideration of the waiver
doctrine. See Art Midwest, Inc. v. Clapper, 805 F.3d 611, 614 (5th Cir. 2015)
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(recognizing that district court’s stated rationale does not “limit this court’s
ability to consider waiver”).
Stanford I addressed whether Stanford was entitled to purported Brady
material of Dan Francis, Boyd Barrow, Drew Green, and Joshua Espinoza,
namely DEA witness reports or agent notes about any meetings with them.
These are the same reports Stanford now seeks here.
In keeping with his counsel’s argument at the original appeal that the
case was a “trial by ambush,” Stanford argued to the Stanford I panel that he
did not have any of the DEA witness reports or rough notes of the interviews
with these witnesses to use to impeach them. According to Stanford, these
documents would have demonstrated a shifting story by his co-defendants and
provided him with an opportunity to impeach their credibility as well as the
veracity of their testimony.
Addressing these arguments, the Stanford I panel wrote extensively on
the Brady issue in its published decision, dedicating five paragraphs to the
issue and concluding that Stanford misapprehended this circuit’s Brady
jurisprudence. Stanford I, 823 F.3d at 841–42. The panel observed that
Stanford did not “appear to have requested in camera review of specific
documents for Brady purposes.” Id. at 842. Armed with the court’s opinion and
a reversal on Count One, Stanford renewed his request for Brady material on
remand. In Stanford’s reply before the district court, he requested that the
district court conduct an in camera review of the documents. The district court
issued an order rejecting Stanford’s request.
The law-of-the-case doctrine and its related waiver doctrine leads us to
conclude that Stanford’s Brady claim is forfeited because the issue was
germane to the case prior to and during the appeal and he failed to raise it
during that time.
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Stanford, citing to Lee II’s “newly relevant” language, argues that
“knowledge did not become a material issue until remand.” Lee II offers little
assistance to the Stanford’s revival of this Brady claim. In Lee II, the court
concluded that the waiver doctrine did not preclude consideration of an upward
departure that “was not appealable” as a matter of law during the original
appeal. 358 F.3d at 324 (“We find that the record in this case amply justifies
the government’s earlier silence quite simply because the enhancement at
issue was not appealable in the initial appeal.”). Quite differently, Stanford’s
Brady claim on the basis of his knowledge that AM-2201 was a CSA was both
legally permissible and relevant to the original district court proceedings and
appeal.
To be sure, Stanford I did clarify the precise relation that knowledge had
to Count One. Nonetheless, knowledge was the star issue in the district court
proceedings and on appeal, leading to a reversal in part. 11 The dispute
concerning whether Stanford knew AM-2201 was a CSA was not ancillary to
the original district court proceedings and appeal. The parties briefed the issue
in great detail. Indeed, Stanford I detailed the district court’s permission of
knowledge-related evidence at trial despite the district court’s conclusion that
it was not an element of the Count One charge. 12 See Stanford I, 823 F.3d at
826–27. As the foregoing demonstrates, Stanford had ample reason to make a
Brady claim argument centered on his knowledge that AM-2201 was a CSA.
With the knowledge issue resolved successfully and the Brady claim
resolved unsuccessfully by this court in Stanford I, Stanford essentially
attempts to revive the latter using the former. Stanford, at least, had incentive
11 Stanford’s briefing on the original appeal conceded as much: “The most hotly
contested fact in this case—and the element on which the government’s evidence was
weakest—was whether Stanford knew that AM-2201 was a CSA.”
12 Stanford’s resentencing briefing noted that “approximately 90% of the trial dealt
with Count One.”
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to argue the knowledge issue with respect to his Brady claim on the basis of
impeachment value. Stanford essentially argues that analysis by this court
adding layers of argument to an issue on appeal, opens that issue up for review
again on remand. That rationale does not comport with this circuit’s waiver
doctrine. See, e.g., Serna v. Law Office of Joseph Onwuteaka, PC., 614 F. App’x
146, 156 (5th Cir. 2015) (per curiam) (unpublished) (explaining that “new legal
argument” on remand concerning an issue that was previously decided was
“plainly foreclosed by the law-of-the-case doctrine and the related doctrine of
waiver”).
As this court has explained, “[i]n short, nothing prevented . . . [Stanford],
in [his] appeal in [Stanford] I, from arguing that the” Government’s failure to
turn over DEA witness reports would be necessary to potentially impeach
witness testimony concerning his knowledge that AM-2201 was a CSA.
Lindquist, 669 F.3d at 240. Stated plainly, Stanford could have brought, and
had sufficient incentive to raise, a Brady claim at the district court and on
appeal prior to remand on the basis of their purported value to his knowledge
that AM-2201 was a CSA. 13 Id. at 239–40.
C. Reassignment
Primarily pointing to statements made during trial concerning the
handling of exhibits, Stanford argues that the district court has a set opinion
of him that renders the district court incapable of rendering an unbiased
opinion going forward.
An “extraordinary” and “rarely invoked” power, reassignment to a
different judge on remand turns on more than intemperate remarks. See
13 Stanford does not brief, nor does the record implicate, any of the applicable
exceptions justifying departure from the waiver doctrine with respect to his Brady claim. See
Med. Ctr. Pharm., 634 F.3d at 836 (“Only plain error justifies departure from the waiver
doctrine.”); Demahy v. Schwarz Pharma, Inc., 702 F.3d 177, 184 (5th Cir. 2012) (listing three
exceptions to mandate rule and law of the case doctrine).
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Johnson v. Sawyer, 120 F.3d 1307, 1333 (5th Cir. 1997). “[R]eassignments
should be made infrequently and with the greatest reluctance.” United States
v. Winters, 174 F.3d 478, 487 (5th Cir. 1999) (quotation marks and citation
omitted). Because we conclude that this court’s supervisory power to reassign
a matter is coterminous with the necessity of a remand, we need not reach the
issue. See 28 U.S.C. § 2106.
Even if we did so, the record in this case does not support reassignment.
The standard for reassignment presents a high hurdle—a hurdle that Stanford
fails to clear. Stanford’s decision to proceed pro se at trial placed him at the
center of ordinary case management by a trial court judge and that case
management is not sufficient to warrant reassignment. See, e.g., Gomez v. St.
Jude Med. Daig Div. Inc., 442 F.3d 919, 939 (5th Cir. 2006) (noting that district
court judge’s “annoy[ance] with counsel at times . . . [that was] not without
reason]” failed to justify reassignment on remand”).
Viewed in its entirety, Stanford’s claim for reassignment centers on the
district court’s rulings against him at trial, sentencing, and resentencing. The
most noteworthy statement by the district court came during its ruling on an
obstruction of justice enhancement at Stanford’s sentencing hearing in which
she expressed forward-looking skepticism about his veracity in putting
evidence before the court. Crediting this statement by the district court at
Stanford’s original sentencing as a basis for reassignment would be
inappropriate in light of the district court’s fairhanded, thorough handling of
the thorny issues before it at the subsequent resentencing hearing. The
request is denied.
III. CONCLUSION
For the foregoing reasons, Stanford’s sentence on Counts Two and Three
and the district court’s denial of Stanford’s Brady claim without conducting in
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camera review is AFFIRMED. Stanford’s request for reassignment to a
different district court judge is DENIED.
26