U.S. v. Goodwin, 01-3070.

• Decision Date: 31 January 2003
• Docket Number: No. 01-3070.,01-3070.
• Citation: 317 F.3d 293
• Parties: UNITED STATES of America, Appellee, v. Darrel A. GOODWIN, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

317 F.3d 293

UNITED STATES of America, Appellee, v. Darrel A. GOODWIN, Appellant.

No. 01-3070.

United States Court of Appeals, District of Columbia Circuit.

Argued November 1, 2002.

Decided January 31, 2003.

Appeal from the United States District Court for the District of Columbia (No. 99cr00122-01).

Beverly G. Dyer, Assistant Federal Public Defender, argued the cause for appellant. With her on the briefs was A.J. Kramer, Federal Public Defender.

Thomas S. Rees, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief were Roscoe C. Howard Jr., U.S. Attorney, and John R. Fisher, Mary-Patrice Brown, and Kenneth F. Whitted, Assistant U.S. Attorneys.

Before: RANDOLPH and ROGERS, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge STEPHEN F. WILLIAMS.

STEPHEN F. WILLIAMS, Senior Circuit Judge:

In early 1999 Darrel Goodwin was arrested by agents from the Drug Enforcement Administration ("DEA") who had just sold him cocaine. Although testimony suggested that at the time the market price for a single kilogram of cocaine was above $27,000, Goodwin had made a deal to buy three kilograms at a unit price of $20,000 each. On the day of his arrest, Goodwin paid about $20,000 in cash and $1,500 worth of heroin toward the purchase of the first two kilograms, with the balance to be paid on the second kilogram once he had sold the drugs. In addition, Goodwin agreed to come back the following day to pay for and collect the third kilogram.

Goodwin argues that his case squarely fits the language of Application Note 14¹ to § 2D1.1 of the United States Sentencing Guidelines ("U.S.S.G."), which under some circumstances allows (but doesn't require) a departure in a "reverse sting" (a drug sale by government agents to the defendant). Specifically, the Note authorizes departure where the agent "set a price ... that was substantially below the market value ...," leading the defendant to purchase a "significantly greater quantity" than he otherwise could have. At sentencing the district court rejected the argument as unsupported by the evidence. We cannot say that the district court erred in denying the departure, and accordingly affirm.

* * *

In January 1999 DEA agents began working with a confidential informant who introduced them to Goodwin. On three occasions Goodwin sold the informant and DEA Special Agent Kenneth Abrams small amounts of heroin (totaling 56.8 grams), "fronting" Abrams and the informant on two occasions. During one of these transactions, Goodwin sold $3,500 worth of heroin for only $2,450, with the remainder to be paid later, and another time he sold $2,620 worth, requiring only $1,500 up front.

At some point during these transactions Abrams and Goodwin began discussing the possibility of working together to buy cocaine. At first, they discussed a transaction in which they would split one kilo, toward which Goodwin would contribute $10,000. Abrams told Goodwin he had a source that could sell cocaine for about $24,000 per kilogram and that the source could supply larger volumes as well. Goodwin said that he — along with an unnamed partner — could come up with $37,000 toward a deal.

In early February Abrams brought Goodwin to meet Special Agent Robert Valentine, who was posing as the source of the cocaine. Valentine explained that he could sell Abrams and Goodwin five kilos for $100,000. In Goodwin's presence, Agent Abrams gave Valentine $10,000 as a fake down payment; the record is obscure on the role of this payment, and Goodwin makes no claim that it was a part of the payment made for his drugs in the offense of conviction. Goodwin told the agents that he could come up with about $15,000 and "his people" could come up with about $24,000.

A few days later, Goodwin met with Agents Abrams and Valentine at a hotel. Goodwin said that he only had about $20,000 but that he was still interested in buying the cocaine. Valentine asked Goodwin if he had any heroin to trade for cocaine. Goodwin produced 14 grams of heroin, worth about $1,500.

After sampling the cocaine and approving its quality, Goodwin agreed to purchase three kilos for $20,000 each. He paid $19,870 for the first kilogram, and gave the $1,500 worth of heroin as a down payment on the second, with further payment to come from street sales of the purchased cocaine. Goodwin was to return for the third kilogram the following day. But as he left the room with the first two kilos, officers arrested him.

Goodwin pled guilty to possession of 500 grams or more of cocaine with the intent to distribute, in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(B)(ii). At Goodwin's sentencing hearing, Agent Abrams testified that the price of cocaine at that time was $26,000 or $27,000 per kilo in New York or Miami, and that prices in Washington, D.C. were higher than in New York or Miami. Abrams testified that the $20,000 per kilo price agreed to by Goodwin reflected a negotiated bulk discount. Goodwin argued that the court should use its discretion to grant a downward departure because the agents had induced his purchase with a price that was "substantially below the market value." U.S.S.G. § 2D1.1, Application Note 14.

Although the terms in which the district court judge disposed of Goodwin's Application Note 14 theory are not crystal clear, a fair reading is that he rejected both the claim that the sale was on terms substantially below market and the claim that any below-market pricing induced a purchase of higher volume — both of which are necessary for a Note 14 departure. On the first element, for example, he said that he could not "find that either the second or third kilograms should be unattributable to Mr. Goodwin," emphasizing the "substantial down payment" and noting that Goodwin "was expected, obviously, to pay the rest. He wasn't given these drugs for free." The latter phrase ("for free") strikes us as simply a hyperbolic way of expressing the idea that Goodwin had not shown the terms to be markedly more favorable than could be expected in the market. In addition, the district court found that the deal "was not induced by" the price.

For sentencing purposes the district court assigned Goodwin a base offense level of 28, which covers the range from 2 to 3.5 kilograms of cocaine (or its equivalent under the Guidelines' drug equivalency table). U.S.S.G. § 2D1.1(c) & Application Note 10. It attributed the entire three kilograms of cocaine to Goodwin, and may also have included the 70.8 grams of heroin he sold the agents. But as the 70.8 grams of heroin converts to only .354 kilos of cocaine, it did not affect the offense level even if included.

Goodwin presents two arguments for reversal. First, he argues that the court erred because the price for the first kilogram of cocaine — about $20,000 rather than upwards of $27,000 — was artificially low and triggered the court's power to depart. Second, he says that the credit terms for the second kilogram were overly generous, because the agents didn't have enough knowledge of Goodwin's ability to profitably distribute large amounts of cocaine, not to mention his reliability; the credit terms were thus the equivalent of lower prices, and therefore permit departure.

Finding no clear error in the finding that Goodwin failed to show that the terms were substantially more favorable than in the market generally, we affirm.

* * *

Congress has devised a "trichotomy" for review of district court resolution of Guidelines issues: "[P]urely legal questions are reviewed de novo; factual findings are to be affirmed unless `clearly erroneous'; and we are to give `due deference' to the district court's application of the guidelines to facts." United States v. Kim, 23 F.3d 513, 517 (D.C.Cir.1994) (citing 18 U.S.C. § 3742(e)); see also Buford v. United States, 532 U.S. 59, 121 S.Ct. 1276, 149 L.Ed.2d 197 (2001); United States v. Sammoury, 74 F.3d 1341, 1343-44 (D.C.Cir.1996). There is some ambiguity whether the district court's decision not to apply Note 14 involved a finding of fact (and thus should be reviewed under the "clearly erroneous" standard) or an "application of the guidelines to the facts" (and thus should be reviewed under the intermediate "due deference" standard). Certainly the line between the two can be unclear. Compare, e.g., United States v. Brooke, 308 F.3d 17, 20-21 & n. 4 (D.C.Cir.2002) (using clear error standard to review whether home confinement would be "equally efficient as" incarceration), with Kim, 23 F.3d at 517 (using due deference standard to review whether defendant's actions constituted "more than minimal planning"). Here, however, both parties assume that the standard is one of clear error. We accordingly apply that standard, though noting that we would reach the same outcome if we used "due deference." The defendant bears the burden of proving by a preponderance of the evidence that he is eligible for a downward departure. See, e.g., United States v. Sachdev, 279 F.3d 25, 28 (1st Cir.2002).

Application Note 14 states:

If, in a reverse sting (an operation in which a government agent sells or negotiates to sell a controlled substance to a defendant), the court finds that the government agent set a price for the controlled substance that was substantially below the market value of the controlled substance, thereby leading to the defendant's purchase of a significantly greater quantity of the controlled substance than his available resources would have allowed him to purchase...