USA v. Egge

• Decision Date: 17 July 2000
• Docket Number: No. 98-30322,98-30322
• Citation: 223 F.3d 1128
• Parties: (9th Cir. 2000) UNITED STATES OF AMERICA, Plaintiff-Appellee, v. JOHN EGGE, Defendant-Appellant. Office of the Circuit Executive
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1128

223 F.3d 1128 (9th Cir. 2000)

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. JOHN EGGE, Defendant-Appellant.

No. 98-30322

Office of the Circuit Executive

U.S. Court of Appeals for the Ninth Circuit.

Argued and Submitted July 17, 2000--Seattle, Washington

Filed September 15, 2000

[Copyrighted Material Omitted] Deirdre Caughlan, Butte, Montana, for the defendant-appellant.

Kris A. McLean, Assistant United States Attorney, Missoula, Montana, for the plaintiff-appellee.

Appeal from the United States District Court for the District of Montana, D.C. No.CR-98-00007-5-DWM; Donald W. Molloy, District Judge, Presiding

Before: Thomas M. Reavley,^* Cynthia Holcomb Hall, and Diarmuid F. O'Scannlain, Circuit Judges.

HALL, Circuit Judge:

This case requires us to consider whether drug users who purchase drugs from a seller convicted of conspiracy to distribute methamphetamine under 21 U.S.C. S 846 are necessarily participants in the criminal activity for the purposes of the U.S.S.G. S 3B1.1(b) enhancement for role in the offense. We hold that customers who are solely end users of controlled substances are not participants for the purposes of U.S.S.G. S 3B1.1(b). Because the record in this case provides sufficient evidence of five participants in Appellant's criminal activity exclusive of his customers, we nevertheless affirm the sentence imposed by the district court. We also affirm the judgment convicting Appellant. The district court had jurisdiction under 18 U.S.C. S 3231. This Court has appellate jurisdiction pursuant to 18 U.S.C. S 3742 and 28 U.S.C.S 1291.

I.

Appellant is a thirty-nine year old male who resided in Missoula, Montana prior to his incarceration. In 1997, the Missoula County Sheriff's Department began investigating an individual named Gordon Eric Barraugh, who they suspected was involved in dealing controlled substances. An investigation of Barraugh pointed the police to Appellant, who was listed as a customer in one of Barraugh's drug ledgers. At trial, Barraugh testified that he fronted methamphetamine to Appellant and had once loaned him several hundred dollars.

The police obtained a warrant to search Appellant's home and vehicle. In his home they found one small plastic bag containing marijuana. A search of his vehicle produced, inter alia, a small scale, a box of ziploc baggies, and LSD. The police also found Jennifer Featherman's name and address during the course of their search. At trial, Featherman testified that she obtained drugs from Appellant and that she accompanied him on a number of occasions when he was purchasing and distributing methamphetamine. She testified that, after purchases, the two of them would proceed to her home to weigh the methamphetamine purchased and place it in plastic bags for distribution. She also testified that another individual performed services for Appellant similar to those Featherman performed so that they "could take the fall" for Appellant if the police discovered the illegal activities.

Appellant was indicted by a grand jury on charges that he violated 21 U.S.C. S 846, conspiracy to distribute the controlled substance of methamphetamine (distribution itself iscriminalized by 21 U.S.C. S 841(a)(1)). Featherman testified at trial that Appellant asked her to help him flee the state after his indictment. However, Appellant was arrested, arraigned, and released on his own recognizance. Appellant subsequently attempted to fake his own suicide as a means of evading trial. When the police were unable to locate Appellant's body, they issued a warrant for his arrest, and he was apprehended on May 15, 1998.

After a two-day trial, Appellant was convicted by a jury. The district court denied Appellant's motion for a judgment of acquittal notwithstanding the jury's verdict, or in the alternative for a new trial. Subsequently, during the preparation of the Presentence Investigation Report ("PSR"), Appellant's probation officer interviewed Featherman on the telephone. According to the PSR, Featherman stated that Appellant "had at least 3 suppliers and at least 10 regular customers." Based on that statement and the fact that Appellant was convicted of conspiracy to distribute methamphetamine, the PSR recommended a three-level upward adjustment for role in the offense under U.S.S.G. S 3B1.1(b). The district court largely adopted the PSR's recommendation and ordered a three-level enhancement. The district court overruled the objections of Appellant's trial counsel that Featherman's unsworn statement about the number of customers and suppliers had "no indicia of reliability." Appellant was sentenced to 41 months imprisonment on October 28, 1998. Appellant then filed a notice of appeal.

II.

This Court reviews the district court's factual finding that a defendant was a manager of a criminal activity involving five or more participants for clear error. See United States v. Camper, 66 F.3d 229, 231 (9th Cir. 1995). This Court reviews the district court's Rule 29 determination that sufficient evidence supports the conviction de novo. See United States v. Riggins, 40 F.3d 1055, 1057 (9th Cir. 1994)."In deciding whether there was sufficient evidence to convict . .. `the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond any reasonable doubt.' " Id. (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979)).

III.

Appellant contends that the district court erred by finding that he managed or supervised a criminal activity involving five or more participants, qualifying Appellant for a three-level enhancement under U.S.S.G. S 3B1.1(b). ¹ Appellant claims that he was not a manager, that the district court improperly relied on an unsworn hearsay statement in making its finding, and that the district court improperly included Appellant's customers as participants in his criminal activity.

Appellant first argues that the evidence does not support a finding that he was a manager or supervisor. The Sentencing Guidelines provide for a three-level upward adjustment in offense level "[i]f the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive." U.S.S.G. S 3B1.1(b). Application note 2 of the Sentencing Guidelines commentary notes that to "qualify for an adjustment under this section, the defendant must have been the organizer, leader, manager, or supervisor of one or more other participants." Id. at commentary application note 2. The enhancement may thus be appropriate as long as Appellant managed at least one participant. See Camper, 66 F.3d at 231.

There is sufficient evidence in the record for a reasonable trier of fact to conclude that Appellant did manage Jennifer Featherman. Featherman testified that she allowed Appellant to use her home as a place for weighing and packaging the methamphetamine he had purchased. Featherman accompanied Appellant on trips to pick up methamphetamine from his suppliers, saw him sell drugs, and worked for Appellant's lawn mowing business. Appellant also asked Featherman to assist him in fleeing the state after his indictment. The record also supports the inference that Appellant compensated Featherman for her services with free drugs. Featherman's testimony further indicates that Appellant used another individual in a similar manner to help him sell drugs. On this record, there is sufficient evidence for a reasonable trier of fact to conclude that Appellant managed Featherman and another individual. The district court did not clearly err.

Appellant next argues that the district court erred by basing its finding that the criminal activity involved five or more participants on an unsworn hearsay statement. When the district court ordered the enhancement under U.S.S.G. S 3B1.1(b), the court largely adopted the Presentence Investigation Report's recommendation, including the number of Appellant's suppliers and customers listed in the PSR. The PSR's count was based on Jennifer Featherman's statement made during a telephone call with Appellant's probation officer that Appellant "had at least 3 suppliers and at least 10 regular customers." The district court overruled the objection of Appellant's trial counsel that Featherman's unsworn statement lacked sufficient indicia of reliability. The district court indicated that the testimony he heard at trial corroborated Featherman's hearsay statement that there were at least five participants in the conspiracy.

In making factual determinations, a sentencing judge is generally not restricted to evidence that would be admissible at trial. See United States v. Hopper, 27 F.3d 378, 382 (9th Cir. 1994). However, "inadmissible evidence cannot be considered [at sentencing] if it lacks sufficient indicia of reliability to support its probable accuracy." Id. (internal quotation marks omitted); see also United States v. Petty , 982 F.2d 1365, 1369 (9th Cir.), as amended by 992 F.2d 1015 (9th Cir. 1993) ("Although the Confrontation Clause does not apply at sentencing, a defendant clearly has a due process right not to be sentenced on the basis of materially incorrect information. Due process requires that some minimal indicia of reliability accompany a hearsay statement.") (citations omitted). This requirement demands extrinsic corroborating evidence that supports the hearsay statement. See id. at 1370.

In this case, the district court adopted the number of Appellant's customers and suppliers as stated in the PSR recommendation when it ordered the section 3B1.1(b) adjustment. However, the only evidence that Appellant had at least three suppliers and ten customers was Featherman's unsworn hearsay statement. The trial testimony indicates that Appellant had at least one supplier and some customers, but because the critical question here is the precise number...