US v. James Whitley, No. 12-4062 (4th Cir. 2013)

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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 12-4062 UNITED STATES OF AMERICA, Plaintiff - Appellee, v. JAMES EDWARD WHITLEY, Defendant - Appellant. Appeal from the United States District Court for the Eastern District of North Carolina, at Wilmington. Louise W. Flanagan, District Judge. (7:10-cr-00105-FL-1) Argued: February 1, 2013 Decided: September 9, 2013 Before GREGORY and KEENAN, Circuit Judges, and Robert E. PAYNE, Senior United States District Judge for the Eastern District of Virginia, sitting by designation. Affirmed by unpublished per curiam opinion. Senior Judge Payne wrote a separate opinion concurring in part and concurring in the judgment. ARGUED: James Ryan Hawes, EDMISTEN & WEBB, Raleigh, North Carolina, for Appellant. Jennifer P. May-Parker, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee. ON BRIEF: Thomas G. Walker, United States Attorney, Kristine L. Fritz, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee. Unpublished opinions are not binding precedent in this circuit. 2 PER CURIAM: James Edward Whitley pleaded guilty to charges of wire fraud, in violation of 18 U.S.C. § 1343, and money laundering, in violation of 18 U.S.C. § 1957, based on his activities in conducting a fraudulent investment scheme. The district court found that under the United States Sentencing Guidelines (the guidelines), Whitley s advisory range of imprisonment was 57 to 71 months on each count. Upon determining that sentences within the guidelines range would be insufficient, the court imposed concurrent sentences of 120 months imprisonment on the two counts. On appeal, Whitley argues that the district court committed procedural error in its sentencing determination because the court did not specify whether it was imposing departure-based sentences under the guidelines, or instead was imposing variant sentences based on the factors set forth in 18 U.S.C. § 3553(a). Whitley further argues that the sentences unreasonable because they are excessive. are substantively Upon our review, we conclude that the district court did not commit procedural or substantive error as alleged. Accordingly, district court s judgment. 3 we affirm the I. In September 2010, a grand jury issued a twenty-count indictment charging Whitley with six counts of wire fraud and fourteen counts of money laundering. These charges resulted from a government investigation revealing that Whitley engaged in a three-year scheme of defrauding friends, family members, and acquaintances (collectively, the victims), who had invested their money with Whitley. Whitley solicited funds from the victims by representing that he was in the business of brokering purchase order factoring contracts. 1 Whitley told the victims that he had contracts with certain companies, that the victims funds would be invested in those companies, and that the victims would receive their return of capital after the expiration of the companies factoring contracts. Whitley provided the victims with promissory notes specifying both interest rates and due dates. Whitley did not use any of the funds he received from the victims to invest in a factoring business. Instead, Whitley used the funds to further his fraudulent scheme and for his personal use. For instance, as is typical of a Ponzi scheme, 1 A purchase order factoring contract is needed when a supplier requires that a buyer pay for goods by cash on delivery, but the buyer wants to purchase the goods on 30 to 60 day terms. The purchase order contractor agrees to pay the supplier upon delivery of the goods, which enables the buyer to delay payment for a specified period of time. 4 Whitley used some of the funds he received from later investors to pay initial investors interest on the money they had provided, thereby creating the impression that the investment was successful. Whitley also used some of the proceeds from his scheme off to pay a construction loan for his secondary residence, a beach house on Bald Head Island, North Carolina. Additionally, Whitley used some funds provided by the victims to take beach vacations to the Caribbean and ski trips to Colorado. Whitley s scheme affected at least 25 victims and resulted in a collective loss of about $7 million. Whitley and the government entered into a plea agreement, under which Whitley agreed to plead guilty to one count of wire fraud and one count of money laundering in exchange for the government agreeing to dismiss the other 18 counts alleged in the indictment. The parties also stipulated in the plea agreement that the amount of loss was between $2.5 million and $7 million for sentencing range. guilty plea, the purposes of Whitley s advisory guidelines After the district court accepted Whitley s United States Probation Office prepared Whitley s presentence investigation report (PSR), in which the 5 probation officer calculated an advisory guidelines range of 57 to 71 months imprisonment. 2 At Whitley s sentencing hearing, the district court adopted the probation advisory officer s guidelines calculations range. The concerning district court Whitley s also heard testimony from six victims concerning the impact of Whitley s fraudulent scheme on their lives. Additionally, counsel from the government read statements from several other victims who were unable to attend the hearing. The that evidence presented Whitley s at conduct the sentencing created hearing significant showed emotional consequences for some victims, contributed to the demise of a marriage, and impaired education plans. Whitley s investment funds, when of the victims retirement and The victims statements and testimony also described victims some tenacious the they manner inquired and in persistent which about Whitley their pursuit lied to investments, of the and Whitley s lack of remorse toward them and his failure to attempt to repay the victims for their losses. that the district court sentence The government asked Whitley to a term of imprisonment at the upper end of his guidelines range, while 2 This range was calculated based in part on the parties agreement concerning the amount of loss, which resulted in a total offense level of 25 under the guidelines. 6 Whitley s counsel requested sentences within the guideline[s] range. After receiving this evidence and considering the parties arguments, the district court sentenced Whitley to a term of imprisonment of concurrently. 120 months on each count, to be served The court stated that it considered Whitley s advisory guidelines range and the sentencing factors set forth in 18 U.S.C. § 3553(a), and explained that the court did not think that 3553(a)] promote criminal the advice factors respect of fully[,] the for conduct. [m]ost guidelines the law and The court reflects particularly, to noted discourage that the [§ the need to this type of preyed on Whitley people who had reason to trust [him], that Whitley s tactics were aggressive and persistent, and that the impact of Whitley s conduct was overwhelming. The court also observed that Whitley continued to conduct his fraudulent scheme even after becoming aware activities. that the government was investigating his Near the end of the hearing, the district court provided further explanation why the court had gone above the guideline[s] range, stating that: [T]he guideline[s] sentence does not accomplish [sic] in this case, given the pervasive nature of the scheme and the persons upon whom [Whitley] preyed and the impact upon those individuals, for all these reasons, also including what appears to be a lack of penitence on the part of [Whitley] where there s been [an] opportunity . . . given [to] him by the Court to begin 7 to collect funds. I m compelled to conclude that he s a very dangerous person and that there s a complete lack of respect for the law. In announcing the sentences from the bench, the district court mentioned the § 3553(a) factors on several occasions but did not use either the term variance or the term departure in explaining the sentences. Notably, Whitley s counsel did not ask the court during the sentencing hearing to specify whether the court was departing from the advisory guidelines range or instead was imposing variant sentences. After the court issued its judgment and written statement of reasons, Whitley timely filed a notice of appeal. II. A. We first address Whitley s reasonableness of his sentences. challenge to the procedural As a general matter, we review a district court s imposition of a sentence, whether within or outside a defendant s advisory deferential abuse-of-discretion States, 552 U.S. asserts that 38, Whitley s 41 guidelines standard. (2007). procedural The range, Gall under v. government, reasonableness a United however, challenge is subject to review only for plain error, because Whitley did not raise in the district court the argument he presents here. 8 See United States v. Olano, 507 U.S. 725, 732-34 (1993) (discussing plain error standard of review). We need not determine whether the more rigorous plain error standard applies in this case, because we conclude that the district court did not commit procedural error as alleged by Whitley, plain or otherwise. Whitley s sole contention concerning procedural error is that the district court erred by fail[ing] to specify at the sentencing hearing whether [the court] departed or varied in doubling the advisory guidelines [range]. Br. of Appellant at i, 10. Whitley concedes that under our precedent, a district court is not required to first look to whether a departure is appropriate before varying. United States v. Diosdado-Star, 2011) (citation omitted). sentencing allegedly hearing failed is to 630 F.3d 359, 366 (4th See Cir. However, Whitley contends that a new required state because whether it the varied district or court departed in determining the 120-month sentences, and thus that the court violated the general principle stated in Diosdado-Star that a court must adequately explain the chosen sentence to allow for meaningful appellate review and to promote the perception of fair sentencing. Id. at 365 (citation omitted); see Gall, 552 U.S. at 51 (listing ways in which a district court may commit procedural error, including by failing to adequately explain the chosen sentence). 9 We reject Whitley s argument because it is based on his mistaken assertion that there is no way to determine how the [district] court arrived at the 120 month sentence[s]. Appellant at 12. The record of the sentencing Br. of proceedings refutes Whitley s argument, and shows that the district court imposed variant sentences, rather than departure-based sentences. The term departure has a unique meaning under the guidelines, and refers only to non-Guidelines sentences imposed under the framework set out in the Guidelines. United States, 553 U.S. 708, 714 (2008). identified a 2B1.1(b)(1), 3 possible the basis district for court Here, although the PSR departure did Irizarry v. not under U.S.S.G. § focus either on Whitley s offense level or on any fees or other similar costs incurred. Thus, we conclude that the sentences were not imposed on the basis of this guidelines provision. Nor did the district court give the parties notice that the court was considering the imposition of departure-based sentences for any other reason, as 3 Under Application Note 19(A)(iii) to U.S.S.G. § 2B1.1(b)(1), a district court may make an upward departure to a defendant s guidelines range in cases in which the offense level substantially understates the seriousness of the offense, on account of the offense involving a substantial amount of interest, finance charges, late fees, penalties, or other similar costs, not included in the determination of loss. The PSR mentioned this provision, but the probation officer did not make a recommendation concerning whether Whitley s sentence should be increased based on such a departure. 10 would be required under Rule 32(h) of the Federal Rules of Criminal Procedure. By contrast, variant sentences are drawn from consideration of the sentencing factors set forth in § 3553(a). See Irizarry, 553 U.S. at 714-15; see also United States v. Rivera-Santana, 668 F.3d 95, 100 n.6 (4th Cir. 2012) (discussing the difference between a departure, a sentence imposed by reference to the defendant s guidelines range, and a variance, a non-Guidelines sentence that is justified on the basis of the § 3553(a) factors) (citation omitted). During the sentencing hearing, the district court referred frequently to certain factors set forth in § 3553(a) in explaining Whitley s sentences. Moreover, the written statement of reasons issued by the district court specified that the court imposed sentences outside the advisory sentencing guideline system, 4 and that the court varied imprisonment. upwardly to (Emphasis added.) a sentence of 120 months[ ] Based on these statements in the record, we easily conclude that the district court imposed variant sentences, not departure-based sentences. 4 Accordingly, The statement of reasons form includes a check box that would allow a court to indicate departure-based sentences. However, the district court did not mark that box denoting departure-based sentences, and instead marked the box indicating sentences based outside the guidelines system. 11 we hold that Whitley s procedural reasonableness claim lacks any merit. In reaching this conclusion, we additionally observe that Whitley has not challenged the validity of our holding in Diosdado-Star that a district court is not required to consider whether any departures under the before imposing a variant sentence. oral argument question 1B1.1 5 in whether have Nevertheless, this the case, we do not the 2010 above answer are applicable See 630 F.3d at 365-66. however, November undermined guidelines this Court amendments holding that in question to raised At the U.S.S.G. § Diosdado-Star. here, because Whitley waived any such argument due to his failure to raise it in his brief to this Court. See Equal Rights Ctr. v. Niles Bolton Assocs., 602 F.3d 597, 604 n.4 (4th Cir. 2010) (holding that the appellant waived an argument by not raising it in the opening brief, even though that issue was discussed by the panel and the parties during oral argument); see also United States v. 5 The current iteration of that commentary section, titled Application Instructions, was enacted after appellate briefing in Diosdado-Star but before oral argument and the issuance of the opinion in that case. The Application Instructions provide that district courts shall determine the kinds of sentence and the guideline range as set forth in the guidelines . . . by applying the provisions of this manual in the following order, and lists the consideration of any departures from the guidelines before listing the consideration of the § 3553(a) factors. The parties in Diosdado-Star did not bring to this Court s attention this revision to U.S.S.G. § 1B1.1. 12 Hudson, 673 F.3d 263, 268 (4th Cir. 2012) (holding that issues not raised cites in with opening approval brief in his are waived). brief the Moreover, very Whitley proposition in Diosdado-Star that this Court raised during oral argument in Whitley s appeal, namely, that a district court is not required to first look varying. to whether a departure is appropriate before Br. of Appellant at 10 (quoting Diosdado-Star, 640 F.3d at 365-66). Accordingly, we hold that Whitley s reliance on Diosdado-Star and his failure to challenge its vitality in light of amended U.S.S.G. § 1B1.1 precludes consideration of that issue here. B. Finally, we determine whether the district court abused its discretion months in sentencing imprisonment, guidelines range. sentencing to sentences well we review regardless the whether 526 F.3d 155, 164 (4th Cir. 2008). are above outside the defendant s sentences they guidelines or were variant sentences. that concurrent terms his of 120 advisory In conducting a review of alleged substantive error, reasonableness, Whitley were imposed based on for the United States v. Evans, When reviewing sentences advisory guidelines range, imposed either by departure or by variance, we consider whether the district court acted reasonably both with respect to its decision to impose such a sentence 13 and with respect to the extent of the divergence from the sentencing range. States v. 2007). trial Hernandez-Villanueva, F.3d 118, 123 (4th Cir. In undertaking this analysis, we must defer to the court unreasonable, choice 473 United of and can even the if reverse the a appellate sentence court. sentence would only not Evans, if 526 is been have it the at 160 F.3d (emphasis omitted). In sentencing Whitley on the basis of the § 3553(a) factors, the district court observed the pervasive nature of Whitley s fraudulent scheme, the manner in which perpetuated the fraud, and his lack of remorse. he had The court also considered the testimony of Whitley s victims, who discussed the impact of Whitley s fraudulent scheme on their lives. See, e.g., id. at 163 (discussing with approval the district court s consideration of the victims statements in affirming a sentence that was more than four times as much as the upper end of the defendant s advisory guidelines range). Most notably, the district court discussed the need for sentences in excess of the guidelines range to protect the public, because when Whitley was on notice of [the] investigation and notice of wrongdoing [he] continued to prey on others. The district court also noted that substantial terms of imprisonment were justified by the need to provide adequate deterrence regarding similar criminal conduct and to promote respect for the law. 14 After reviewing these reasons provided by the district court, as well as the entire sentencing record and the parties arguments, we conclude that Whitley s concurrent sentences of 120 months imprisonment are not substantively unreasonable. III. For these reasons, we affirm the district court s judgment. AFFIRMED 15 PAYNE, Senior District Judge, concurring in part and concurring in the judgment: I agree with the majority that Whitley s sentence is substantively reasonable. However, for the reasons that follow, I asserted submit that Whitley s procedural error should be reviewed under the plain error standard; that there was plain error; but that the error did not affect Whitley s substantial rights. I. Whitley and the government disagree about the applicable standard of review of the alleged procedural error. Whitley contends that the abuse of discretion standard applies. government contends that the plain error standard of The review controls because the challenges raised by Whitley are presented for the first time on appeal. In United States v. Lynn, 592 F.3d 572, 576 (4th Cir. 2010), the Court held that plain-error review applies when a party lodges an objection to the sort of procedural sentencing error at issue here [inadequate explanation of sentencing] for the first time on appeal. Id. at 577. See United States v. Hargrove, 625 F.3d 170, 183-84 (2010) (pointing out that Lynn called for plain error review when a procedural sentencing error is raised for the first time on appeal). Also, in Lynn, the Court explained how a party can preserve a claim of procedural 16 sentencing error. The Court stated that, [b]y drawing arguments from § 3553 for a sentence different than the one ultimately imposed, an aggrieved party sufficiently alerts the district court of its responsibility to render an individualized explanation addressing those arguments, and thus preserves its claim. Id. at 578 (emphasis added). Later, in United States v. Boulware, 604 F.3d 832, 838 (4th Cir. 2010), citing Lynn, the Court held that arguments made under § 3553(a) for a sentence different than the one that is eventually imposed are sufficient to preserve adequately claims that explaining the its district court rejection of erred the in not sentencing arguments. (emphasis added). II. In Gall v. United States, 552 U.S. 38, 40 (2007), the Supreme Court identified several kinds of procedural errors that can occur at sentencing. Among them was failing to adequately explain the chosen sentence - including an explanation for any deviation from the Guidelines range. Gall, 552 U.S. at 51. Whitley contends that: [t]he district court procedurally erred when it failed to specify at the sentencing hearing whether it departed or varied in imposing a sentence that doubled the guideline range. This error resulted in a failure to adequately explain its decision to impose the 120 month sentence and, therefore, the sentence must be vacated. 17 Appellant s Brief, at 10. Thus, Whitley raises the kind of procedural error that is identified in the last phrase of the exemplary list of procedural errors provided in Gall. To decide whether Whitley preserved that error, it is necessary to determine whether, in the sentencing proceedings, Whitley drew Ì arguments from § 3553 for a sentence different than the one ultimately imposed . . . . United States v. Powell, 650 F.3d 388, 395 (4th Cir. 2011) (citation omitted) (emphasis in original); Boulware, 604 F.3d at 838; Lynn, 592 F.3d at 578. The arguments necessary to preserve an error of this sort can be set forth in written sentencing positions filed before the hearing. sentencing hearing or in arguments made at the Neither Whitley nor the government filed a written pre-sentencing submission. Therefore, the record at the sentencing hearing must be examined to see whether there Whitley drew any argument from § 3553(a) for a sentence different than the one the court ultimately imposed. that was The record demonstrates that he did not. In points: his sentencing argument, Whitley s counsel made four (1) that Whitley had made a bad decision for which he had accepted responsibility and entered a plea agreement; (2) that Whitley had suffered in his personal life for that bad decision and had been forced into bankruptcy; (3) that Whitley s 18 wife had divorced him and his children had alienated him; and (4) that his property has been foreclosed on. Having made those points, counsel then said, we ask that you sentence him to a sentence within the guideline range. 1 Quite clearly, Whitley s arguments for a within-Guideline sentence cannot be said to be drawn from the factors in §§ 3553(a)(2)-(7). That leaves § 3553(a)(1), the nature and circumstances of the offense and the history and characteristics of the defendant. Whitley s sentencing points do not refer to the nature and circumstances of the offense. Nor can the four points raised in Whitley s sentencing argument be fairly related to either his history or characteristics. Rather, in one way or another, each point makes note of how the offense has affected Whitley (points (2)-(4)) or recites a neutral fact, acceptance of responsibility by pleading guilty, (point (1)). The oblique references to the effects of Whitley s crime on him and to the fact of a guilty plea, like the oblique references in United States v. Powell, do not Ì sufficiently alert the district court of its responsibility to render an individualized explanation addressing those arguments under § 3553 (quoting Lynn, 592 F.3d at 578). 1 In sum, Whitley did not Counsel also asked that Whitley be confined in a specific nearby prison and that he be allowed to self-report to begin service of the sentence. 19 Ì draw[] arguments from § 3553 for a sentence different than the one ultimately imposed, and thus, even under the quite lenient standard for preservation of such an error that the Court has adopted, Whitley did not preserve the procedural error that he now asserts III. To demonstrate establish that: plain error, Whitley is obligated to (1) the trial court erred, (2) the error is clear and obvious, and (3) the error affected his substantial rights. Hargrove, United States v. Olano, 507 U.S. 725, 732-34 (1993); 625 F.3d at 184. If Whitley discharges that responsibility, the Court has discretion to recognize the error, but need not do so unless it seriously affect[s] the fairness, integrity or public reputation of judicial proceedings. Olano, 507 U.S. at 736 (quotations and alterations omitted); Hargrove, 625 F.3d at 184. Whether an error is appellate consideration. plain is judged at the time of Henderson v. United States, ___ U.S. ___, 133 S. Ct. 1121, 1130 (2013) (citing Johnson v. United States, 520 U.S. 461, 468 (1997)). was previously unsettled. Id. 20 That is so even if the issue A. Whitley argues that the procedural error occurred here because, in imposing the non-Guideline sentence, the district court did not specify whether the sentence was one chosen by way of departure or by way of variance. Whitley, the sentence was not For that reason, says adequately explained meaningful appellate review has been foreclosed. the failure Guidelines to is articulate of the particular mode of To Whitley, deviation significance and from the the PSR because identified a possible predicate for departure under U.S.S.G. § 2B.1(b)(1) and then outlined the findings necessary to depart thereunder, none of which did the district mention in imposing the sentence. Whitley also posits other possible bases for departure that the district court may have had in mind, but about which it did not remark. In perspective of the availability of these possible predicates for departure, it is argued that the district court s failure to express whether it was departing or varying constituted procedural error. In support of his argument, Whitley cites United States v. Diosdado-Star, 630 F.3d 359, 365 (4th Cir. 2011). However, Diosdado-Star actually is contrary to the substance of Whitley s position because departure 364-65, a and it reasons variance concept that is from are the 21 the premise that interchangeable polar opposite the terms, of terms id. at Whitley s position. And, Diosdado-Star holds that the method by which the district court deviates from the Guidelines range does not alter (1) the review in which courts of appeals must engage, or (2) the justification the district court must provide, id. at 365, holdings that are antithetical to the core of Whitley s argument. Thus, although Whitley s argument pays lip service to Diosdado-Star, premise that explained articulates methodology in a or substance, non-Guideline reviewed whether of his sentence unless the variance argument the the cannot district methodology is proceeds means of of be from the meaningfully court departure deviating actually or the from the Guideline range, disposes of any possible ground for departure, and then keys its explanation of the imposed sentence to the chosen means of deviation. Whitley s substantive position finds support in Irizarry v. United States, 553 U.S. 708, 714 (2008) which clarifies that, comments to the contrary in Gall notwithstanding, variances and departures are quite different kinds of sentencing modes. A variance is a sentence outside the advisory Guideline range, the imposition of which depends on an analysis of the factors in § 3553(a). A departure is a sentence outside the advisory Guideline range that depends on an analysis of the applicable 22 departure provisions in the Guidelines. Irizarry, 553 U.S. at 714-15. 2 Those differences are significant at the district court level because whether to depart requires a different analysis than that required differences are in deciding significant on whether appellate to vary. review, And, inter the alia, because the standard of review for a departure is de novo, see Pepper v. United States, 131 S. Ct. 1229, 1244 (2011), whereas variances are reviewed for abuse of discretion. Whitley s argument finds further support in the Guidelines, specifically Chapter One, Part B General Application Principles, § 1B1.1 Application Instructions, which provides: (a) The court shall determine the kinds of sentence and the guideline range as set forth in the guidelines by applying the provisions of this manual in the following order, except as specifically directed: [stating that the court shall determine the range as set forth in §§ 1B1.1(a)(1) (7) by applying Chapters Two, Three, Four and Five, and then determine the sentencing requirements and options (8).] (b) The court shall then consider Parts H and K of Chapter Five, Specific Offender Characteristics and Departures, and any other policy statements or commentary in the guidelines that might warrant consideration in imposing sentence. See 18 U.S.C. § 3553(a)(5). 2 A recent opinion of this Court, United States v. RiveraSantana, 668 F.3d 95 (4th Cir. 2012), has taken the same view. Relying on Irizarry, the Court there explained that [t]he terms variance and departure describe two distinct sentencing options available to a sentencing court, and described the differences between the two sentencing options. Id. at 100 n.6. 23 (c) U.S.S.G. The court shall then consider the applicable factors in 18 U.S.C. § 3553(a) taken as a whole. See 18 U.S.C. § 3553(a). § 1B1.1 (Nov. 1, 2012) (emphasis added) (hereafter § 1B1.1 ). The Court, of course, is bound by the General Application Principles Guidelines. and the Application Notes in interpreting the United States v. Price, 711 F.3d 455, 458 (4th Cir. 2013) (citing United States v. Hudson, 272 F.3d 260, 263 (4th Cir. 2001); United States v. Banks, 130 F.3d 621, 624 (4th Cir. 1997)). That is so because even after the Guidelines were held to be advisory, 3 they continue to play an important role in the sentencing process. United States v. Dean, 604 F.3d 169, 173 (4th Cir. 2010). 4 Further, it is settled that [t]he Sentencing Commission promulgates the guidelines by virtue of an express congressional delegation of authority for rulemaking, and thus, the guidelines are the equivalent of legislative rules adopted by federal agencies. Stinson v. United States, 508 U.S. 36, 44-45 3 United States v. Booker, 543 U.S. 220, 234 (2005). In Kimbrough v. United States, 552 U.S. 85, 101 (2007) (relying on Gall), the Supreme Court directed that a sentencing court must give respectful consideration to the Guidelines, as required by 18 U.S.C. § 3553. See also Pepper v. United States, ___ U.S. ___, 131 S. Ct. 1229, 1247 (2011) ( Accordingly, we have instructed that district courts must still give respectful consideration to the now-advisory Guidelines (and their accompanying policy statements). ). 4 24 (1993). And, as this Court has put it: [t]he [Sentencing] Commission s interpretive commentary is akin to an agency s interpretation of its own legislative rules, and is therefore entitled to substantial deference. F.3d 555, result, 559 (4th Guidelines Cir. 2002) commentary United States v. Mason, 284 (citations that omitted). interprets or As a 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. 508 U.S. at 38, 113 S. Ct. at 1915). 628 F.3d 669 (4th Cir. 2010), Id. (quoting Stinson, In United States v. Hood, well after Booker made the Guidelines advisory, the Court, in deciding the meaning of crime of violence, recognized the continuing force of Stinson. 5 The amendment that is reflected in § 1B1.1 was implemented to help secure consistency in the application of the Guidelines after they were made advisory by Booker. As the majority opinion explains, Diosdado-Star did not mention Irizarry or § 1B1.1 which took effect on November 1, 2010, almost three months before Diosdado-Star was issued and slightly more than a month before arguments were heard. Also, the briefs in Diosdado-Star 5 In Hood, the Court observed that [t]he Supreme Court has long held that 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. Id. at 672. 25 were filed before the amendment took effect, and they do not mention the amendment. The Reason for Amendment section accompanying the amendment to § 1B1.1 points out that, after Booker, most circuits, including this one, used the three-step approach specified in the amendment and, indeed, cites United States v. Moreland, 437 F.3d 424, 433 (4th Cir. 2006), as support for that approach. The same section articulated that [a] variance - i.e., a sentence outside the guideline range other than as provided for in the Guidelines Manual [a departure] - is considered by the court only after (Effective departures Date: have been 1, 2010; Nov. considered. 2011 WL Amendment 5984683, at 741 *1113 (emphasis added). Hence, the sentencing catechism in effect at the time of appellate consideration recognizes that there are significant differences between departures and variances, and requires that, before varying, a court must departure sentence is in order. first consider whether a And, that logically means that an adequate explanation of a non-Guideline sentence should state whether the deviation from the Guidelines is by way of departure or by way available of variance. ground of And, departure where, as identified here, in there the is PSR, an the district court would have to address (and accept or reject) that ground before imposing a variance sentence. 26 B. Thus, on appeal, the Court is confronted with Guideline provisions that are at squarely odds with a published opinion issued by the panel of this Court in Diosdado-Star. At the same time, Henderson necessitates application of the law in effect at the time of appellate consideration. If, as I understand to be the rule, deference is owed to § 1B1.1, a regulation that has the force of law, it would appear that this panel could not follow Diosdado-Star to apply the law in effect at the time of appellate consideration. However, customarily under a the panel principle considers of itself interpanel bound by accord, the prior decision of another panel, absent an in banc overruling or a superseding contrary decision of the Supreme Court. Busby v. Crown Supply, Inc., 896 F.2d 833, 840-41 (4th Cir. 1990); see also Mentavlos v. Anderson, 249 F.3d 301, 312 n.4 (4th Cir. 2011) ( [A] panel of this court cannot overrule, explicitly or implicitly, the precedent set by a prior panel of this court. Only the Supreme Court or this court sitting en banc can do that. ). The principle inflexible. of interpanel accord, however, is not For example, in Derflinger v. Ford Motor Co., 866 F.2d 107, 110 (4th Cir. 1989), the Court applied the principle of interpanel accord, but noted that a previous panel decision 27 would not be followed where there was a subsequent statutory amendment (there a subsequent change in an applicable state statute in a diversity case) that makes the previous decision wrong. In United States Dep t of Health & Human Servs. v. Fed. Labor Regulations Auth., 983 F.2d 578, 581-82 (4th Cir. 1992), the Court explained that [a] decision by a panel of this court, or by the court sitting en banc does not bind subsequent panels if the decision rests on authority that subsequently becomes untenable. Id. (citing Busby, 896 F.2d at 840-41, and Faust v. South Carolina State Highway Dep t, 721 F.2d 934, 940 (4th Cir. 1983)). There are no decisions in this circuit that involve application of the interpanel accord principle to facts quite like those presented here in which the change in law occurred before the prior panel decision, but was not mentioned in the panel opinion apparently because of the temporal relationship between the change, the briefing, and the panel opinion. However, in Moody Nat l Bank v. GE Life & Annuity Assurance Co., 383 F.3d 249, 252 (5th Cir. 2004), the Fifth Circuit faced an issue quite similar to the one presented here. In Moody Nat l Bank, the statutory amendment went into effect approximately two months before the release of the prior panel case. decision and after oral argument and briefing in that After explaining the circuit s settled adherence to the 28 rule of interpanel accord, the Fifth Circuit explained that the rule that a panel is bound to follow the prior panel rulings of this court . . . is inapplicable, however, where Congress makes a change in statutory law that directly affects a prior panel opinion. Id. panel] not did Observing that it is clear that [the prior consider the amendments . . . or the relevant comments thereto in reaching its decision, id. at 253 n.5, the Fifth Circuit amendment. comments decided the case in perspective of the recent That approach, of course, is consistent with the in Derflinger and with the subsequently becomes untenable rationale in Fed. Labor Regulations. Of course, the decisions in Derflinger and Fed. Labor Regulations must be viewed in perspective of the fact that the Court, sitting en banc, has expressed a clear preference for adherence to the rule of interpanel accord absent an intervening opinion from this Court sitting en banc or the Supreme Court. McMellon However, v. United McMellon States, did not 387 F.3d 329 present (4th the Cir. rather 2004). unusual circumstances that are present here, circumstances that involve the kind of approach that district courts must take respecting the every-day judicial task of sentencing. Nor, at the time of McMellon, had Henderson been decided requiring that plain error be judged at the time of appellate consideration. 29 Nonetheless, as explained in United States v. White, 670 F.3d 419, 516 (4th Cir. 2012), it is the duty of the subsequent panel to find an appropriate way to harmonize resolution of a conflicting issue with a prior panel decision on that issue if it is possible possible to to do so. Unfortunately, harmonize the decision in the Supreme Court it is not really Diosdado-Star with § 1B1.1. Considering that and this Court s decisions, for example in Price and Hood, require substantial deference to the Guidelines, and taking into account that there is no Constitutional or other infirmity here that would foreclose such deference, I would conclude that the sentencing approach articulated in Diosdado-Star is no longer tenable and that it was error not to proceed as § 1B1.1 requires. The error was plain, if measured at the time of appellate consideration, created by even the considering conflict between the § unsettled 1B1.1 and circumstance Diosdado-Star because § 1B1.1 must be given substantial deference. States v. Henderson, ___ U.S. ___, 113 S. Ct. 1130. judges, and most litigants, likely would prefer United District the less- structured, and quite sensible, approach reflected in DiosdadoStar. But, as long as the Guidelines continue to be a part of the approach to federal sentencing, and as long as they have the force of law to which substantial deference is owed, it seems to 30 me that § 1B1.1 must be applied as the law at the time of appellate consideration. For the foregoing reasons, I would conclude measured that the error, at the time of appellate consideration, is plain. However, Whitley does not satisfy the Olano test because his substantial rights were not prejudiced by the approach taken by the district court. That is so because talismanic recitations of sentencing vernacular are never necessary and a sentence is adequately explained if the Court can determine from the record what occurred at sentencing. United States v. Allmendinger, 706 F.3d 330, 343 (4th Cir. 2013); United States v. Carter, 564 F.3d 325, 328-30 (4th Cir. 2009). As the majority opinion makes clear, the record shows that the nonGuideline sentence imposed here was a variance, not a departure; and, as the adequately majority explained concludes, and is the sentence readily amenable waiver, the imposed to was appellate review. Relying on a finding of majority finds it unnecessary to address the conflict between Diosdado-Star and § 1B1.1 because Whitley did not raise § 1B1.1 in his brief or at oral argument and, in fact, purported, in his brief, to rely on Diosdado-Star. Both of those points are correct, but, I respectfully suggest that they do not warrant by-passing the issue. As I understand it, [w]hen 31 an issue or claim is properly before the court, the court is not limited to the particular legal theories advanced by the parties, but rather retains the independent power to identify and apply the proper construction of governing law. Kamen v. Kemper Financial Services, Inc., 500 U.S. 90, 99 (1991) (rejecting contention that petitioner waived argument by failing to raise it until reply brief)(citing Arcadia v. Ohio Power Co., 498 U.S. 73, 77 (1990)). Further, an appellate court may consider an argument Ì antecedent to . . . and ultimately dispositive of the dispute before it, brief. even an issue the parties fail to identify and U.S. Nat. Bank of Oregon v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 445-46 (1993). It seems to me that, in substance, Whitley s argument invokes the principles reflected in § 1B1.1. And, it is the substance of an argument that presents the issue even if the party making the argument fails to cite the best authority in support of it. Hence, I would conclude that Whitley s argument presents the issue that is the conflict between § 1B1.1 and Diosdado-Star, even though he has not cited § 1B1.1 and even though his brief pays lip service to Diosdado-Star. 32

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