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United States v. Thomas

United States Court of Appeals, Tenth Circuit

October 1, 2019

UNITED STATES OF AMERICA, Plaintiff - Appellee,
DONALD RAY THOMAS, a/k/a Donald Ray Thomas, II, Defendant-Appellant.

          Appeal from the United States District Court for the District of Colorado (D.C. No. 1:16-CR-00325-PAB-1)

          Jacob R. Rasch-Chabot, Assistant Federal Public Defender (Virginia L. Grady, Federal Public Defender, with him on the briefs), Denver, Colorado for Defendant-Appellant.

          J. Bishop Grewell, Assistant United States Attorney (Robert C. Troyer, United States Attorney, with him on the brief), Denver, Colorado for Plaintiff-Appellee.

          Before HARTZ, MATHESON, and EID, Circuit Judges.


         The sole issue presented on this appeal is the meaning of counterfeit substance in § 4B1.2(b) of the United States Sentencing Guidelines. Defendant contends that a counterfeit substance is a controlled substance that has been mislabeled or misbranded fraudulently or without authorization-a definition that appears in a federal statute, 21 U.S.C. § 802(7). The government counters that it is a noncontrolled substance that is passed off as a controlled substance. Joining the five other circuits that have opined on the subject, we agree with the government.

         Under USSG § 2K2.1(a)(2) the base offense level for a defendant convicted of a firearm offense is 24 if the offense was committed "subsequent to sustaining at least two felony convictions of either a crime of violence or controlled substance offense." The offense level is 20 if the defendant had a conviction of only one such offense. See id. § 2K2.1(a)(4). These provisions adopt the meaning of controlled substance offense in USSG § 4B1.2(b). See USSG § 2K2.1(a), App. n.1. That definition is as follows:

The term "controlled substance offense" means an offense under federal or state law, punishable by imprisonment for a term exceeding one year, that prohibits the manufacture, import, export, distribution, or dispensing of a controlled substance (or a counterfeit substance) or the possession of a controlled substance (or a counterfeit substance) with intent to manufacture, import, export, distribute, or dispense.

USSG § 4B1.2(b) (emphasis added). The guidelines do not define counterfeit substance for the purposes of this provision.

         Defendant Donald Ray Thomas pleaded guilty in the United States District Court for the District of Colorado to possession of a firearm by a convicted felon. See 18 U.S.C. § 922(g)(1). On appeal he does not challenge the validity of his plea; but as permitted by his plea agreement with the government, he raises one challenge with respect to his sentence. Because it is undisputed that he had a prior felony conviction for a crime of violence (robbery), his base offense level was at least 20. Whether it was 20 or 24 depended on the characterization of his 2014 Colorado conviction of distribution of an "imitation controlled substance" under Colo. Rev. Stat. § 18-18-422(1)(a). Colorado defines an imitation controlled substance as:

a substance that is not the controlled substance that it is purported to be but which, by appearance, including color, shape, size, and markings, by representations made, and by consideration of all relevant factors as set forth in section 18-18-421, would lead a reasonable person to believe that the substance is the controlled substance that it is purported to be.

Colo. Rev. Stat. § 18-18-420(3). Defendant challenges the district court's ruling that his conviction involved a "counterfeit substance" and therefore was a "controlled substance offense" under USSG § 2K2.1(a). Exercising jurisdiction under 18 U.S.C. § 3742(a) and 28 U.S.C. § 1291, we reject this challenge and affirm Defendant's sentence.

         I. DISCUSSION

         "Ultimately, our task in interpreting the Guidelines is to determine the intent of the Sentencing Commission." United States v. Rivera-Oros, 590 F.3d 1123, 1129 (10th Cir. 2009). We perform this task by applying traditional techniques of statutory construction. See United States v. Archuleta, 865 F.3d 1280, 1287 (10th Cir. 2017) (when a term "is not defined in the Guidelines, we must rely on the accepted rules of statutory construction in defining the term").

         As a general rule, we interpret a word or phrase in a statute or the guidelines in accordance with its ordinary, everyday meaning. See United States v. Marrufo, 661 F.3d 1204, 1207 (10th Cir. 2011) ("When a term is not defined in the Guidelines, we give it its plain meaning."); Antonin Scalia & Brian A. Garner, Reading Law: The Interpretation of Legal Texts, § 6 ("Ordinary-Meaning Canon") (2012) ("Reading Law"). The definition of counterfeit in the most authoritative legal dictionary is: "Made to look genuine in an effort to deceive; produced by fakery, esp. with an intent to defraud." Black's Law Dictionary 427 (10th ed. 2014). This is in keeping with the definitions in leading dictionaries for general use. See New Oxford American Dictionary 387 (2d ed. 2005) ("[M]ade in exact imitation of something valuable or important with the intention to deceive or defraud."); Webster's Third New International Dictionary 519 (2002) ("[M]ade in fraudulent imitation: produced with intent to deceive."). Thus, a substance that is not in fact a controlled substance but is passed off as such is commonly referred to as a counterfeit controlled substance. See, e.g., Franklin v. Bradshaw, 545 F.3d 409, 412 (6th Cir. 2008) ("Hennig realized that they had been given counterfeit cocaine commonly referred to as 'fleece.'"); United States v. Martinez, 520 F.3d 749, 751 (7th Cir. 2008) ("The [drug] agents replaced the cocaine with 100 kilograms of counterfeit cocaine."); United States v. Sampson, 140 F.3d 585, 588 (4th Cir. 1998) (two co-conspirators "testified that . . . they sold 'flex' (counterfeit cocaine) to unsuspecting purchasers."). The government urges us to use the plain-English definition of counterfeit and construe counterfeit substance as a substance made in imitation of a controlled substance with intent to deceive.

         Defendant does not contend that if we apply the common meaning of counterfeit substance, he could nevertheless prevail. He argues, however, that we should adopt a narrower meaning. He asserts that when determining the meaning of an undefined offense used in the guidelines, courts have not given the term its ordinary English meaning but have instead looked to federal statutes, state laws, model codes, treatises, and dictionaries to determine the "generic, contemporary meaning" of the offense. Aplt. Br. at 11; see United States v. Martinez-Cruz, 836 F.3d 1305, 1309 (10th Cir. 2016) ("To determine the generic, contemporary meaning of a crime enumerated in the Guidelines, the court begins by looking to the federal statute under which the defendant was previously convicted" and "also examines . . . the definitions of the crime in a majority of the States' criminal codes, as well as prominent secondary sources, such as criminal law treatises and the Model Penal Code." (brackets and internal quotation marks omitted)); Rivera-Oros, 590 F.3d at 1126-27 ("We look to a wide range of sources to determine the generic meaning of an enumerated offense, including federal and state statutes, the Model Penal Code, dictionaries, and treatises."). Accordingly, in his view, we must adopt the definition of counterfeit substance commonly used in those sources.

         We agree with Defendant that the statutory definitions of the term counterfeit substance most often refer to controlled substances that are fraudulently or falsely labeled. For example, and most notably, the federal Controlled Substances Act states the following:

The term 'counterfeit substance' means a controlled substance which, or the container or labeling of which, without authorization, bears the trademark, trade name, or other identifying mark, imprint, number, or device, or any likeness thereof, of a manufacturer, distributor, or dispenser other than the person or persons who in fact manufactured, distributed, or dispensed such substance and which thereby falsely purports or is represented to be the product of, or to have been distributed by, such other manufacturer, distributor, or dispenser.

21 U.S.C. § 802(7). The term appears in 21 U.S.C. § 841(a), which provides:

(a) Unlawful acts
Except as authorized by this subchapter, it shall be unlawful for any person knowingly or intentionally-
(1) to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance; or
(2) to create, distribute, or dispense, or possess with intent to distribute or dispense, a counterfeit substance.

         Paragraph (1) in general prohibits dealing in controlled substances. The "Except as authorized" language at the beginning of subsection (a) is necessary, however, because some controlled substances serve useful purposes and can lawfully be manufactured, distributed, dispensed, or possessed, although they must still be regulated to protect consumers and prevent misuse. Effective regulation of such substances requires that they be properly labeled-that is, that they not be what are called "counterfeit substances" in the statute. Paragraph 2 prohibits trading in such counterfeits. For example, even when a person is authorized to manufacture a controlled substance, that person is prohibited from creating a counterfeit substance by mislabeling the controlled substance. Cf. United States v. Khoury, 901 F.2d 948, 965 (11th Cir. 1990) ("At a minimum, to prove a conspiracy to violate section 841(a)(2) . . . the government must provide some evidence that the conspirators planned to place on the substance or its container a trademark, trade name, or other identifying mark of a manufacturer other than the persons actually manufacturing the substance.")

         The Uniform Controlled Substances Act uses the term counterfeit substances in the same way:

Counterfeit Substances Prohibited; Penalty.
(a) A person may not knowingly or intentionally manufacture or deliver, or possess with intent to manufacture or deliver, a controlled substance that, or the container or labeling of which, without authorization, bears the trademark, trade name, or other identifying mark, imprint, number, or device, or a likeness thereof, of a manufacturer, distributor, or dispenser, other than the person who manufactured, distributed, or dispensed the substance.

         Unif. Controlled Substances Act § 404 (1995). And the government does not dispute Defendant's assertion that the laws of 36 states and the District of Columbia similarly define counterfeit substance, although it points to eight states that have adopted the meaning of counterfeit substance that it urges in this court.

         The essence of Defendant's position is that when dealing with a technical or specialized subject, we should understand terms in their technical or specialized meaning. As a general rule, we would agree with that proposition. But that proposition cannot override common sense. In Johnson v. United States, 599 U.S. 133, 138 (2010), the Supreme Court had to resolve the meaning in the Armed Career Criminal Act (ACCA), 18 U.S.C. § 924(e), of the noun force, which "has a number of meanings." The specific question was whether the Florida offense of battery constituted a "violent felony" under the Act (and so could be used to enhance the defendant's sentence). That depended on whether the requirement of "force" in the ACCA could be satisfied by "even the slightest offensive touching," which was all the force necessary to establish the common-law crime of battery (and battery under Florida law). See id. at 139. The Court refused to adopt the common-law meaning of the term force, finding it incongruous as part of the definition of the term violent felony, particularly because common-law battery was a misdemeanor rather than a felony. See id. at 139–42. It explained: "[W]e do not assume that a statutory word is used as a term of art where that meaning does not fit. Ultimately, context determines meaning, and we do not force term-of-art definitions into contexts where they plainly do not fit and produce nonsense." Id. at 139–41 (citation and internal quotation marks omitted).

         Similar reasoning requires rejection of Defendant's argument. Application of his definition of counterfeit substance in USSG § 4B1.2(b) adds no substantive content to the guidelines definition of controlled substance offense. For convenience we repeat that provision:

The term "controlled substance offense" means an offense under federal or state law, punishable by imprisonment for a term exceeding one year, that prohibits the manufacture, import, export, distribution, or dispensing of a controlled substance (or a counterfeit substance) or the possession of a controlled substance (or a counterfeit substance) with intent to manufacture, import, export, distribute, or dispense.

USSG § 4B1.2(b) (emphasis added). Under the statutory definition that Defendant would adopt ("The term 'counterfeit substance' means a controlled substance which [is mislabeled]." 21 U.S.C. § 802(7)), every counterfeit substance is already a controlled substance; a counterfeit substance is simply a controlled substance that is mislabeled to conceal its origin. The parenthetical "(or a counterfeit substance)" therefore would not include any item beyond those clearly encompassed by the term controlled substance, which immediately precedes the parenthetical. Statutes that regulate, say, the distribution of counterfeit substances (using Defendant's definition) are simply a subset of statutes that regulate the distribution of controlled substances. We follow our precedent stating that "we should interpret statutory provisions and the guidelines in a way which gives meaning and effect to each part of the statutory or guideline scheme." United States v. Acosta-Olivas, 71 F.3d 375, 379 (10th Cir. 1995); see Reading Law, § 26, Surplusage Canon, at 174 ("If possible, every word and every provision is to be given effect (verba cum effectu sunt accipienda). None should be ignored. None should needlessly be given an interpretation that causes it to duplicate another provision or to have no consequence.").

         To avoid the surplusage canon, Defendant notes that the term counterfeit substance appears in § 4B1.2(b) only within a parenthetical and contends that "any redundancy . . . is therefore of little consequence." Aplt. Br. at 17. He relies on Chickasaw Nation v. United States, 534 U.S. 84, 88 (2001), in which Indian tribes claimed that a parenthetical statutory cross-reference in the Indian Gaming Regulatory Act exempted gambling operations from excise and occupational taxes. The Supreme Court quoted the following from a circuit-court opinion: "A parenthetical is, after all, a parenthetical, and cannot be used to overcome the operative terms of the statute." Id. at 95 (internal quotation marks omitted). (The quotation, appropriately enough, was in a parenthetical to the citation to the circuit-court opinion. We decline, in this parenthetical, to engage in a philosophical discussion about whether a parenthetical can be authority for the proposition that parentheticals are not authoritative.) But the Chickasaw Nation Court did not say that parentheticals are necessarily surplusage. On the contrary, it took the parenthetical cross-reference in the statute very seriously. Indeed, it was the central subject of the Court's decision. The Court determined that it was required to treat the relevant language as surplusage not because it was contained in a parenthetical, but because "the language outside the parenthetical is unambiguous" and the Court could not "give the [parenthetical] reference independent operative effect without seriously rewriting the language of the rest of the statute." Id. at 89; see id. ("We agree with the Tribes that rejecting their argument reduces the [statutory reference in the parenthetical] to surplusage. Nonetheless, we can find no other reasonable reading of the statute.") We therefore conclude from Chickasaw Nation that we should try to give substantive effect to language in a parenthetical. And here, in contrast to Chickasaw Nation, giving the parenthetical in the guideline its common meaning adds eminently reasonable content to the guideline (by expanding the relevant offenses to encompass those involving fake controlled substances). We also observe that putting "or a counterfeit substance" in a parenthetical, rather than simply setting it off with commas, is more likely to have been for purposes of readability than to signify unimportance (as suggested by the dissent). There were already 10 commas in the sentence defining controlled substance offense. The reader may wish to try replacing the parentheses by commas and see how easy it would be to read the definitional sentence.[1]

         The dissent suggests that the "(or counterfeit substance)" parenthetical serves the purpose of clarification-making clear that counterfeit substances (as defined by the dissent) are among the controlled substances covered by the guideline. But if that were the intent, the Sentencing Commission would have used the word including rather than the word or. The Sentencing Commission appears to have followed a consistent practice that distinguishes (in accord with common usage) between parentheticals beginning with the word including and parentheticals beginning with the word or when the parenthetical appears after a term in a guideline. Parentheticals using the word including are meant to clarify the guideline; those with the word or are meant to expand the meaning. When it uses the word including, it is emphasizing that the term as used in the guideline is not excluding a particular subset of what is encompassed by the usual meaning of the term. For example, USSG § 2B3.2 cmt. n.1 speaks of "transportation systems and services (including highways, mass transit, airlines, and airports"). The words in the parenthetical are generally considered examples (subsets) of the terms before the parenthetical. We include in a footnote the occasions of this use of including in the guidelines.[2] In contrast, when the Commission inserts a parenthetical beginning with the word or after a term in the guidelines, it is expanding the scope of the guideline to include things that would generally not be considered subsets of the term in its common meaning. For example, USSG § 2B1.1 comment n.10(C) speaks of "the defendant (or a person for whose conduct the defendant is accountable)" and comment n.10(D) speaks of "name (or other identifying information)." We include in a footnote other examples of this use of the word or in guidelines parentheticals.[3] Given this common usage and the practice of the Sentencing Commission, we can infer that if the Sentencing Commission intended the "or a counterfeit substance" parenthetical in § 4B1.2(b) to refer to those controlled substances defined as counterfeit substances in 21 U.S.C. § 802(7)-which are a subset of controlled substances-it would have said "including a counterfeit substance." That would have made clear that when § 4B1.2(b) spoke of controlled substances, it was including those controlled substances defined as counterfeit substances. But instead the Commission said "or a counterfeit substance," and the use of the word or was signaling that the Commission was including substances that are not controlled substances. This is substantial support for our reading of the guideline.

         It should also be noted that the definition of controlled substance offense in § 4B1.2(b) does not include the word creation along with the prohibited acts "manufacture, import, export, distribution, or dispensing," even though creation is the prohibited act unique to counterfeit substances, see 21 U.S.C. § 841(a)(2); Khoury, 901 F.2d at 965. This is a peculiar, and confusing, omission if the Sentencing Commission's focus in including the "or a counterfeit substance" parenthetical had been to make sure that the enhancement of the firearm-offense base offense level under § 2K2.1(a)(2) for prior drug convictions would encompass prior convictions under § 841(a)(2) (the federal counterfeit-substance provision) and similar state laws.

         A further indication, if any is needed, that § 4B1.2(b) was not referencing the statutory definition of counterfeit substance is that the Sentencing Commission did not include a statutory reference in the guideline. Not only are such cross-references common in the guidelines, see, e.g., United States v. Mills, 485 F.3d 219, 223 (4th Cir. 2007) (citing numerous statutory cross-references in §§ 4B1.2 and 2K2.1), but of particular note, the Commission has even cross-referenced the statutory definition of counterfeit substance in a different guideline. Application note 4 to USSG § 2D1.1 (the guideline section used to compute the offense level for drug offenses) states: "The statute and guideline also apply to 'counterfeit' substances, which are defined in 21 U.S.C. § 802 to mean controlled substances that are falsely labeled so as to appear to have been legitimately manufactured or distributed." If the Sentencing Commission also intended to use that statutory definition in § 4B1.2, it would be remarkable to omit the cross-reference there. Cf. United States v. Lucero, 747 F.3d 1242, 1249 (10th Cir. 2014) ("It is a well-settled principle of statutory construction that when Congress (or, as here, the Sentencing Commission) includes particular language in one section of a statute or Guideline, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." (internal quotation marks omitted)). The cross reference to the statutory definition appeared in the original version of § 2D1.1 in 1987. See USSG § 2D1.1 cmt. n.2, at 2.40 (1987). The term counterfeit substance first appeared in § 4B1.2 as a result of Amendment 268 two years later in 1989. See U.S. Sentencing Guidelines Manual app. C, vol. I, Amend. 268 at 131–33 (2003). It is not as if it had never occurred to the Sentencing Commission to add the statutory definition as a cross reference. The omission of the cross-reference in § 4B1.2 only two years after it was added in § 2D1.1 appears to have been informed and intentional.

         Defendant also argues that the history of § 4B1.2 supports his position. He contends that the language of the guideline before it was revised in 1989 clearly conveys the meaning he now advocates.[4] We do not think the earlier language was all that clear. But in any event, the Sentencing Commission explained that the purpose of its 1989 amendment was "to clarify the definitions of crime of violence and controlled substance offense used in this guideline." U.S. Sentencing Guidelines Manual app. C, vol. I, Amend. 268 at 132–33 (2003). In that light, it would make little sense to say that the present guideline is clarified by looking at the earlier version. If, as suggested by Defendant, the earlier version clearly supported his position, the change in language would imply that the Commission was not comfortable with that position.

         We should also respond to a comment repeated several times in the dissent, although it has no basis in any principle of statutory interpretation. The dissent suggests that we should not adopt a definition contrary to a definition that "was promulgated by elected legislatures." Dissent at 5. The implication is that when Congress has defined a term (as it has with counterfeit substance), we are violating the will of the people by adopting another definition. There might be some force to the argument if Congress had stated in a statute that its statutory definition of counterfeit substance was to apply throughout federal law, or at least to the sentencing guidelines. But the definitions in 21 U.S.C. § 802 are simply for words "[a]s used in this subchapter," meaning 21 U.S.C. §§ 801–904. That is the full extent of Congress' statutory command. Congress has not made any attempt to tell the Sentencing Commission how it must use the term counterfeit substance in its guidelines. It is worth noting that even when Congress has explicitly stated that a definition is to apply to a certain portion of the United States Code, the Supreme Court has repeatedly ignored that command when the context otherwise requires. See, e.g., Util. Air Regulatory Grp. v. EPA, 573 U.S. 302, 316 (2014); N.W. Austin Mun. Util. Dist. No. One v. Holder, 557 U.S. 193, 206 (2009); Philco Aviation, Inc. v. Shacket, 462 U.S. 406, 409 (1983); Lawson v. Suwannee Fruit & S.S. Co., 336 U.S. 198, 201 (1949).

         And as recently stated by Justice Ginsburg in Yates v. United States, 135 S.Ct. 1074, 1082 (2015) (opinion of Ginsburg, J.), "We have several times affirmed that identical language may convey varying content when used in different statutes, sometimes even in different provisions of the same statute." The Supreme Court has even had occasion to reject the suggestion that a term in the Controlled Substances Act must be given the same definition as it has under the guidelines. See DePierre v. United States, 564 U.S. 70, 88 (2011) ("[W]e reject DePierre's suggestion that the term 'cocaine base' as used in [21 U.S.C. § 841(b)(1)(A)(iii), (B)(iii)] must be given the same definition as it has under the Guidelines."). In that case the defendant wished to benefit from the guidelines definition, which was narrower than the definition of the statutory term adopted by the Court. The Court denied the defendant his wish, and it never suggested that the Sentencing Commission had to use the word the same way that the statute did.

         Thus, standard tools of statutory interpretation all point to the government's construction of the guidelines definition of controlled substance offense. This should suffice to affirm the sentence imposed by the district court.

         But there is more. Institutional considerations also argue in favor of that result. At least five other circuits have reached the same conclusion as we do here. See United States v. Hudson, 618 F.3d 700, 704 (7th Cir. 2010); United States v. Mills, 485 F.3d 219, 225 (4th Cir. 2007); United States v. Robertson, 474 F.3d 538, 541 (8th Cir. 2007); United States v. Crittenden, 372 F.3d 706, 709 (5th Cir. 2004); United States v. James, 712 F.App'x 838, 840 (11th Cir. 2017) (citing United States v. Frazier, 89 F.3d 1501, 1505 (11th ...

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