U.S. v. Clay, s. 93-3699

Decision Date06 October 1994
Docket Number93-3840,Nos. 93-3699,s. 93-3699
Citation37 F.3d 338
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Jim CLAY, Defendant-Appellant.
CourtU.S. Court of Appeals — Seventh Circuit

Steven Shobat, Asst. U.S. Atty., Crim. Div. (argued), Barry Rand Elden, Asst. U.S. Atty., Crim. Receiving, Appellate Div., Chicago, IL, for plaintiff-appellee.

Marc W. Martin, Genson, Steinback, Gillespie & Martin, Richard W. Stopka, Chicago, IL (argued), for defendant-appellant.

Before CUDAHY, ESCHBACH and FLAUM, Circuit Judges.

FLAUM, Circuit Judge.

For over a year, Jim Clay regularly purchased distribution-size quantities of cocaine from Hamdi Ayyash, a local drug supplier for several Chicago-area dealers. Clay financed his transactions with Ayyash on credit, with Ayyash maintaining a current ledger and Clay making payments on his account from the proceeds of the cocaine resales. After a bench trial Clay was convicted of both a substantive drug charge and conspiracy. He challenges (1) the sufficiency of the evidence supporting the latter conviction, contending that only a simple buyer-seller relationship was established, (2) the district court's relevant conduct findings at sentencing, arguing that its estimate of drugs attributable to Clay was inflated (and also mounting general constitutional and statutory challenges to the Sentencing Guidelines) and (3) the district court's refusal to adjust his offense level downward for acceptance of responsibility, asserting that he went to trial only to mount a conceptual challenge to the use of a conspiracy theory in his case, not to deny responsibility for what he had done. We affirm.

I.

We have one housekeeping matter to dispose of before turning to address these contentions. Two notices of appeal were filed in this case, one on November 2, 1993, and the other on November 12, 1993, generating two appeals by Clay, Nos. 93-3699 and 93-3840. Why? The district court sentenced Clay on October 28 and the judgment order was entered on the docket on November 5. The November 2 notice was timely and proper under Fed.R.App.P. 4(b) (even though, because it was filed before the date of entry of judgment, it is treated as being filed on that date--November 5) and would have sufficed to secure our jurisdiction. A little confusion set in, however, after the district court, acting on its own motion, entered an order the next day, November 3, purporting to stay the October 28 sentence in order to reconsider the question of acceptance of responsibility in light of a recent decision of this court. On November 9, after a status hearing, the district court decided not to alter the sentence and issued an order (entered on November 10) vacating its October 28 order. Concerned about the impact these developments might have on his previous attempt to appeal, Clay filed a second notice of appeal on November 12. This he need not have done. The district court's November 3 order can only be understood (and is so understood by both parties) as notice that it was contemplating an exercise of its authority under Fed.R.Crim.P. 35(c) to correct a sentence within seven days after imposition; the court did not literally have the authority to stay execution of the sentence under the circumstances of this case, compare Fed.R.Crim.P. 38(b), but could within the bounds of Rule 35(c) fix a clear error (even one that only became clear in light of recent legal developments). The date of "imposition of the sentence" from which the seven days runs signifies the date judgment enters rather than the date sentence is orally pronounced, see United States v. Morillo, 8 F.3d 864, 869 n. 8; United States v. Turner, 998 F.2d 534, 536 (7th Cir.1993); cf. Fed.R.App.P. 4, 1993 advisory committee note to subdivision (b) ("[A] posttrial motion may be disposed of more than 10 days before sentence is imposed, i.e. before the entry of judgment"), and thus when the district court in effect denied its own 35(c) motion on November 9, it acted within the time constraints of the Rule.

Appellate Rule 4(b) makes clear that the "filing of a motion under Fed.R.Crim.P. 35(c) [does not] affect the validity of a notice of appeal filed before entry of the order disposing of the motion" and we read this statement to refer to all such "motions," whether made by the parties or the court itself. The 1993 advisory committee note confirms that as a general matter actions taken pursuant to Rule 35(c) will not vitiate a prior, properly filed notice of appeal. This is entirely consistent with the expectation of the drafters of Rule 35(c) that the seven-day window for correction of sentences would not prevent "the appellate process (if a timely appeal is taken) [from] proceed[ing] without delay and without jurisdictional confusion." Fed.R.Crim.P. 35, 1991 advisory committee note. * Although this version of Rule 4(b), which added the explication of the interaction with Rule 35(c), did not become effective until December 1, 1993--after the relevant dates in this case--the earlier Rule merely took a silent, not an opposing, stance. And in light of the clear design that Rule 35(c), enacted in 1991, not disrupt the usual process by which appellate jurisdiction is attained, we conclude that action under it has the same noneffect on a properly filed notice of appeal under the previous version of Rule 4(b) as it does under the current one. It would make little sense to complicate matters with a special rule for the two years it took to iron out the ambiguities that Rule 35(c) potentially portended for Rule 4(b) (but that Congress eventually insured it did not). Therefore, Clay's first notice of appeal adequately secured review of his conviction and sentence by this court; his second notice of appeal was superfluous and the docketed appeal that it spawned, No. 93-3840, is dismissed.

II.

On to the merits. Clay's challenge to his conspiracy conviction is a familiar one. He insists that his relationship with his supplier, Ayyash, while continuous and ongoing, was clearly an arms-length and disinterested buyer-seller arrangement. Although the nub of a conspiracy is an agreement, a simple agreement between a buyer and seller to exchange something of value for cocaine cannot alone constitute a conspiracy because such an agreement is itself the substantive crime. See United States v. Lechuga, 994 F.2d 346, 349 (7th Cir.1993) (en banc ); see also United States v. Kozinski, 16 F.3d 795, 808 (7th Cir.1994). The "something more" that is necessary for the existence of a true drug distribution conspiracy is a further understanding between the buyer and seller, often implicit, that usually relates to the subsequent distribution of the narcotics (though conceivably could, in an ongoing relationship, pertain to the prior procurement of the supply). Just how implicit that understanding can be to sustain a conspiracy, and how circumstantial the proof of it will typically be, was demonstrated in Direct Sales Co. v. United States, 319 U.S. 703, 63 S.Ct. 1265, 87 L.Ed. 1674 (1943). There, the corporate petitioner was a drug manufacturer that sold much of its wares by mail order. A regular postal customer of the company was a certain Dr. Tate, a small-town physician, who frequently, and eventually exclusively, ordered massive quantities of morphine far in excess of what he could lawfully dispense in the course of his practice. Even after the Bureau of Narcotics informed the company that it was being used as a source for illicit redistribution and that an average physician would not legitimately require the size lots that it offered for sale, the company continued to sell to Tate unusually large amounts of morphine at a deep discount. Eventually the company was convicted of conspiring with Dr. Tate to illegally distribute the drug. The Supreme Court unanimously upheld a challenge to the sufficiency of the evidence.

The Court noted that the knowledge alone that one is supplying inputs to another's illicit business cannot support a finding of conspiracy. But knowledge is sometimes accompanied by an intent to further or cooperate in the secondary endeavor, especially when that endeavor is essential to bringing the seller's goods to market and the relationship is ongoing. And even without there ever being a formal statement of collaboration, as two parties continue on a course of conduct this intent can boil down to a tacit, albeit somewhat nebulous, agreement to further the buyer's redistribution project, the seller "join[ing] both mind and hand" with the buyer.

What sort of evidence will allow--and all we review for is bare sufficiency, see United States v. Byerley, 999 F.2d 231 (7th Cir.1993)--a trier of fact to make the inference that buyer and seller are dealing not just with disinterested eyes narrowly focused on the purchase at hand but with a mutual understanding about subsequent distribution? Direct Sales indicates that a prolonged and actively pursued course of sales coupled with the seller's knowledge of and a shared stake in the buyer's illegal venture is sufficient to sustain a finding of conspiracy. This court similarly has observed that when "A sells drugs to B who then distributes the drugs, and A 'knows of, and benefits from, B's subsequent distribution, we may infer a limited agreement to distribute between A and B.' " Kozinski, 16 F.3d at 808 (quoting United States v. Townsend, 924 F.2d 1385, 1392 (7th Cir.1991)). Such a future-oriented interest is difficult to infer from a single spot sale for cash, see Lechuga, 994 F.2d at 349-50, because once such a trade is completed and the parties part company neither has any particular reason to care about what the other does next (aside from steering clear of the police). But when a sales relationship is ongoing, seller and buyer will to some degree share an interest in the fortunes of the other: the buyer would like the seller to continue to have access to a supply and the seller would like...

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