[00:00:00] Speaker 04: Thank you. [00:00:02] Speaker 04: The next case on the calendar is United States versus DOP 24-3774. [00:00:31] Speaker 04: whenever you're ready. [00:00:35] Speaker 05: Doug Beavers for Gabrielle Diop. [00:00:37] Speaker 05: I'd ask to reserve two minutes for a reply. [00:00:40] Speaker 04: That's fine. [00:00:42] Speaker 05: In Castillo, this court used Kaiser analysis to hold that the phrase, offense of distribution of controlled substance, unambiguously did not include offenses of distribution that did not happen, such as conspiracy and attempt. [00:00:58] Speaker 05: Mr. Diop's case, [00:01:00] Speaker 05: he was sentenced for losses that also did not happen, attempts. [00:01:04] Speaker 05: In this court, in U.S. [00:01:07] Speaker 05: v. Kirioluk, this court held that loss unambiguously did not mean fictional gain, unconnected to actual losses. [00:01:16] Speaker 05: After Castillo, in an unpublished decision of [00:01:21] Speaker 05: Aboamo, we know this case, 2024 US App Lexis 30558 reaffirmed that loss was unambiguously at least not meaning fictional gains, not actual losses. [00:01:38] Speaker 05: These decisions holding that loss and distribution were unambiguous do not mean that those words for all sets of facts always must be unambiguous. [00:01:48] Speaker 02: Well, you're kind of leaving out Yafa, right? [00:01:51] Speaker 05: Right. [00:01:52] Speaker 05: the court held that loss was ambiguous as to one certain difficult set of facts. [00:01:59] Speaker 04: So it sounds to me like you're looking at language in a guideline and telling us that you think it's ambiguous as applied to a set of facts as opposed to just looking at the text. [00:02:10] Speaker 04: Is that what you're doing? [00:02:11] Speaker 05: I think that a federal court always has to look at this concrete issue, can't just rule out whether a word is always ambiguous for all purposes, because if we go back to Kaiser and look at what Justice Kagan said, the problem of Kaiser is that regulations may be genuinely ambiguous when applied to some fact patterns. [00:02:36] Speaker 05: It's not just, and she gives us an example [00:02:41] Speaker 05: liquids, is paté a liquid? [00:02:44] Speaker 05: That might be ambiguous, but the fact that the regulation may be ambiguous [00:02:51] Speaker 05: as to pate, doesn't mean that it's unambiguous to water and ice. [00:02:57] Speaker 02: Well, I guess I was going to interrupt you. [00:03:00] Speaker 04: Not at all. [00:03:00] Speaker 04: That's fine. [00:03:02] Speaker 02: You know, we have Yafa. [00:03:03] Speaker 02: Yafa says loss is genuinely ambiguous. [00:03:05] Speaker 02: It seems like the question in this case is, is it a reasonable interpretation, given that ambiguity, which we have precedent that now says that's ambiguous, is it within the zone of ambiguity to say that intended loss can count as loss? [00:03:18] Speaker 02: So what's your answer? [00:03:20] Speaker 05: Well, I think it's clearly not within the zone of ambiguity, because otherwise, I mean, Yaffa itself says they're not resolving this issue in Putno 5. [00:03:35] Speaker 05: In addition, Yaffa could not have ruled that the word loss was ambiguous for all purposes, because that would have put it into direct conflict with Kirioluk. [00:03:48] Speaker 05: they didn't have authority to overrule Kirioluk as another panel ruling on the exact same word. [00:03:56] Speaker 05: The issue, the way I see it is that loss in Jaffa, this court was dealing with the issue of how you calculate loss. [00:04:08] Speaker 05: It's ambiguous as to how you calculate loss. [00:04:10] Speaker 05: It's always been [00:04:12] Speaker 05: loss in restitution cases, there's ambiguity. [00:04:16] Speaker 05: In the restitution statute that predated the guidelines and it was part of the same statutory scheme, the restitution guidelines said if it was difficult to calculate, just don't do it. [00:04:31] Speaker 05: This statute is not the same way. [00:04:33] Speaker 05: Loss does have some ambiguity as to how you calculate the levels and the exact dollar value. [00:04:40] Speaker 05: but it's the definition of what is or isn't a loss. [00:04:44] Speaker 05: That is much more a straightforward interpretation of the word. [00:04:50] Speaker 05: And I think also we need to look at the issue of, if we go back to the statutory scheme, the relevant conduct statute existed at the same time that the Sentencing Commission passed 2B1.1 and 2F1.1. [00:05:09] Speaker 05: and in 2F applied intended loss in the text of the guidelines and 2B didn't apply intended loss in that. [00:05:20] Speaker 05: So there's clear statutory history or regular drafting history where the commission drafted the relevant conduct statute and in together in the same package included [00:05:39] Speaker 05: one section that didn't include intended loss, one section that didn't include intended loss, and I believe the tax statute also, which included, expressly included intended loss. [00:05:51] Speaker 02: But doesn't the relevant conduct provision, you know, at a broader level, more support treating losses including intended loss? [00:05:59] Speaker 05: Well, if you don't look at that [00:06:04] Speaker 05: If you were operating on a blank slate, maybe, but if at the time that they wrote that statute, the relevant conduct statute, they also included two separate statutes that one that included intended loss, one that didn't include, it's clear that that system, looking at those three statutes together, that the relevant conduct statute would have made [00:06:30] Speaker 02: How about just like the basic structure and operations of the guidelines in terms of the objectives of treating people who have similar culpability similarly? [00:06:42] Speaker 02: Because, you know, by the logic of your argument, somebody can, you know, intend to inflict a massive fraud. [00:06:49] Speaker 02: And as long as the authorities catch them before they do that, their loss is essentially zero. [00:06:55] Speaker 02: But somebody who accomplishes a small fraud is going to have a higher loss calculation. [00:07:00] Speaker 02: seems like the guidelines are trying to get away from that. [00:07:02] Speaker 05: Well I think the problem is that that is a major policy decision and I think that the the most recent Sentencing Commission made that policy decision that the way that you suggest that it it should [00:07:20] Speaker 05: You should include all the actual loss, but Congress approved that change after Mr. Diop's case. [00:07:25] Speaker 02: The last time Congress approved a change in the guidelines, it approved the removal of the actual, of the intended loss from the... Right, but when we're looking at cases like Yaffa that talk about why the term loss is ambiguous, that's one of the things that case talks about is this issue of essentially fairness across defendants. [00:07:47] Speaker 05: It, that I think when you're dealing with gain, I think there's a major problem that that's actual losses. [00:07:54] Speaker 05: The alpha dealt with actual losses that you couldn't calculate. [00:07:57] Speaker 05: So you, you've got to, there's an actual harm. [00:08:00] Speaker 05: As to the other issue of whether, whether there should be, whether there should be identity between actual and intended loss, I think that is a major policy decision that [00:08:16] Speaker 05: has to be approved by Congress and I understand that the guideline Commission tried to do it by regulation and that They did it wrong. [00:08:24] Speaker 05: They didn't get Congress's approval when they noticed it Congress this Congress fixed it but we're dealing with back when this guideline was written and when actual loss was taken out we have to presume that Congress in approving that [00:08:41] Speaker 01: Intended it to be that can you address one of the points made and it was one of the Sixth Circuit decisions that nothing ruled Against your position and nothing the Sixth Circuit decisions point was if you don't consider Intended loss then you can't fully apply another provision of the sentencing guidelines Forget the one they're referred to you have to consider all harm that resulted from and was the object of the acts and [00:09:06] Speaker 01: And the Sixth Circuit said, well, if we can't consider it tender harm, then we really can't give meaning to that provision. [00:09:11] Speaker 01: Can you address that? [00:09:12] Speaker 05: Well, I think they did not address, as the dissent in that case did address, the problem that [00:09:27] Speaker 05: interpretation would have conflicted with the original guidelines that did include in one section and did not include in another section, and still includes it in the tax code, and that you have to go to the express interpretation of that statute. [00:09:49] Speaker 05: And Castillo focuses on related statutes, not some general relevant conduct statute. [00:09:55] Speaker 05: It also would [00:09:56] Speaker 05: unravel and there are many, many guidelines that would be affected by the relevant conduct. [00:10:04] Speaker 05: There are many, many guidelines where it's not said what [00:10:10] Speaker 05: whether it doesn't cover the whole loss, whether there's the term distribution that was in Castillo is all over the guidelines in 2D 1.1. [00:10:19] Speaker 05: Does that apply to intended distribution or conspiracy? [00:10:24] Speaker 05: Is a house where you just talked about drug distribution, is that a drug house? [00:10:30] Speaker 05: That would conflict with Castillo if you incorporate the relevant conduct guideline to every single word in the guideline. [00:10:38] Speaker 05: That's what I think their decision does. [00:10:40] Speaker 04: Council, you're out of time. [00:10:42] Speaker 04: Thank you for your argument. [00:10:43] Speaker 04: For planning purposes, we'll put two minutes on the clock when you come back. [00:10:46] Speaker 04: We took up a lot of your time with our questions. [00:10:49] Speaker 04: We'll hear from the state, please. [00:10:55] Speaker 00: Good morning, Your Honors. [00:10:56] Speaker 00: May it please the Court, I'm Sam Stofanke on behalf of the United States. [00:11:00] Speaker 00: This court should affirm the district court's sentence of defendant Gabriel Diop based on the full amount of money that he took concrete steps to steal. [00:11:10] Speaker 00: I'd like to address a couple of points Mr. Beavers made. [00:11:14] Speaker 00: He seems to want to read section 1B1.3 entirely out of the guidelines book. [00:11:20] Speaker 00: He says it was a major policy decision that Congress made to recently amend the guidelines to include intended loss in the text. [00:11:27] Speaker 00: That would be a major policy decision, and it was, and that's why 1B1.3 has been around for so long. [00:11:34] Speaker 00: 1B1.3 establishes the overarching structure of the guidelines, and it requires that a sentencing court look to a defendant's acts and omissions that were undertaken, counseled, induced as part of a common fraud scheme, common course of conduct, like what Mr. Diop committed here. [00:11:53] Speaker 00: So it was not as big of a change, I think, as Mr. Beavers would like to articulate it to be that this idea that intended loss should be subsumed under loss. [00:12:03] Speaker 00: I'd also like to address Judge Bress's question about [00:12:08] Speaker 00: Is intended loss within the zone of ambiguity that was identified in Yafa? [00:12:12] Speaker 00: And the answer is 100% yes. [00:12:15] Speaker 00: Yafa articulated that zone of ambiguity quite expansively. [00:12:19] Speaker 00: It stretches at a minimum along the spectrum from the actual calculable loss experienced by victims to the far broader harms involved in and arising out of a defendant's conduct. [00:12:31] Speaker 00: And so just by looking at that particular definition of the zone of ambiguity that the YAAFA panel identified, Mr. Diop's intended loss was appropriately accounted for. [00:12:42] Speaker 02: This is now like a time-limited problem because of the change to the guidelines. [00:12:47] Speaker 02: Do you have any sense of how many cases are [00:12:50] Speaker 02: you know, in the pipeline that are in this transitional phase that this issue still matters? [00:12:55] Speaker 00: Not across the country, Your Honor. [00:12:56] Speaker 00: I do know that there is at least one other case in my district, the Eastern District of California, where this is of moment. [00:13:05] Speaker 00: I can't imagine it's all too, too many cases where it applies. [00:13:10] Speaker 00: It's still an important issue because the way that this panel interprets the interplay between 1B1.3 and 2B1.1 has cascading effects through a number of other guidelines. [00:13:21] Speaker 02: How would that be the case? [00:13:22] Speaker 02: Why would that matter going forward with the new guidelines? [00:13:28] Speaker 00: Because if this court adopts somewhat of a restrictive reading of the interplay between 1B1.3 and 2B1.1, other guideline provisions that may [00:13:38] Speaker 00: be affected by 1B1.3's command to include all harms that were intended by a defendant could be affected. [00:13:48] Speaker 00: So this is a small issue in terms of the number of defendants it might affect, but it's a large issue as far as statutory interpretation of the guidelines moving forward. [00:13:57] Speaker 02: Your friend on the other side has an argument that if we interpret this loss to mean intended loss, then lots of provisions in the guidelines would have it implied, intended in front of them. [00:14:08] Speaker 02: Can you address that? [00:14:09] Speaker 00: Yes, Your Honor. [00:14:10] Speaker 00: He's incorrect for at least two reasons. [00:14:14] Speaker 00: 1B1.3 clearly says, unless otherwise specified in the particular guideline, here's the background rule. [00:14:22] Speaker 00: So a good example would be the tax provision, I believe, 2B1.4, if my memory serves correctly. [00:14:28] Speaker 02: In other words, if a provision says someone distributes drugs and they get an enhancement, we're not going to then turn around and say that means intended to distribute drugs, even if you didn't actually distribute them. [00:14:38] Speaker 00: Yes, Your Honor. [00:14:39] Speaker 00: And Mr. Beaver's argument also relies on [00:14:44] Speaker 00: It mischaracterizes what the government is saying. [00:14:46] Speaker 00: The government is not saying if you think something, if you think maybe one day I should steal a million dollars, suddenly you have a one million dollar loss amount. [00:14:54] Speaker 00: That's not even close to what the government's arguing and that's not even close to what 1B1.3 says. [00:14:58] Speaker 00: 1B1.3 says a defendant must take an action and if it's a groupable offense, it must be part of the same course of conduct or common scheme or plan. [00:15:08] Speaker 00: The guidelines are not punishing thoughts. [00:15:10] Speaker 00: The guidelines are incorporating culpability for a defendant's actions. [00:15:18] Speaker 03: Are there any further questions? [00:15:21] Speaker 03: I don't think we have any further questions. [00:15:22] Speaker 03: Thank you, Your Honor. [00:15:22] Speaker 03: Thank you. [00:15:27] Speaker 05: I have one minute. [00:15:29] Speaker 04: You have two minutes. [00:15:30] Speaker 05: Thank you. [00:15:32] Speaker 05: First, because of the Hackett decision, [00:15:36] Speaker 05: applying plain error to this issue based on the split in the circuits there seem to be only about two or three cases that this would apply to and I think that going forward the issue that you raised about how do you punish attempted loss is it exactly the same or not I think it's easier it's practically more likely to get downward variances where the harm is for attempted loss from this new guideline [00:16:05] Speaker 05: that it would be for the government to get upward variances to take into account all of the- Explain that to me. [00:16:14] Speaker 02: I thought that now this issue would be basically moot under the new guidelines. [00:16:19] Speaker 05: Right, and defendants could if the harm was far below the, if the intended loss was [00:16:26] Speaker 05: massive and somebody only got $2, I think a lot of judges would doubt and would vary to some extent. [00:16:32] Speaker 02: Wasn't that available here though? [00:16:34] Speaker 02: The problem for your client is that that's not what he did. [00:16:38] Speaker 02: He intended very much to try to get another $9 million and that was stopped. [00:16:44] Speaker 05: But not for lack of trying. [00:16:45] Speaker 05: Right. [00:16:46] Speaker 05: If it went the other way, if you interpret the guidelines the way that I'm saying, the government would have the authority to try to [00:16:54] Speaker 05: seek an upward variance for that. [00:16:57] Speaker 05: Upward variances are harder to get than downward variances statistically, so I think that had a lot to do with why, how we're going to resolve that problem. [00:17:05] Speaker 05: It's probably not likely that every case will be exactly the same going forward. [00:17:10] Speaker 05: I think, so there are just these three people. [00:17:12] Speaker 05: I think the other issue is that the government's argument that 1B1.1 should take into account other, all object of such acts, that would [00:17:24] Speaker 05: have been a massive delegation of authority of the Sentencing Commission to basically rewrite regulations, to reinterpret everything in the guidelines. [00:17:33] Speaker 05: That's all. [00:17:35] Speaker 04: Thank you, counsel. [00:17:36] Speaker 04: Thank you both for your arguments. [00:17:38] Speaker 04: We're going to take a very quick five-minute break before we hear the last argument on the calendar.