Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-15-02528/USCOURTS-ca7-15-02528-0/pdf.json

Parties Involved:
Joseph A. Phelps
Appellant
United States of America
Appellee

Document Text:

In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 15-2528

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JOSEPH A. PHELPS,

Defendant-Appellant.

____________________

Appeal from the United States District Court

for the Central District of Illinois.

No. 12-CR-10095-001 — Joe Billy McDade, Judge.

____________________

SUBMITTED OCTOBER 2, 2015 — DECIDED MAY 24, 2016

____________________

Before POSNER, SYKES, and HAMILTON, Circuit Judges.

SYKES, Circuit Judge. Joseph Phelps was convicted of conspiracy to manufacture methamphetamine and was sentenced to 120 months in prison, the statutory minimum, well

below the Sentencing Guidelines range of 188–235 months. 

A year later the government moved for a sentence reduction 

as a reward for his substantial assistance. See FED. R. CRIM.

Case: 15-2528 Document: 22 Filed: 05/24/2016 Pages: 8
2 No. 15-2528

P. 35(b). The district court granted the motion and reduced 

the sentence to 60 months.

Several months later Amendment 782 to the Sentencing 

Guidelines took effect, retroactively reducing Phelps’s 

guideline range to 151–188 months. As permitted by 

18 U.S.C. § 3582(c)(2), Phelps moved for a sentence reduction 

based on the retroactive amendment. He asked the court to 

reduce his sentence to 48 months, citing the policy statement 

in U.S.S.G. § 1B1.10(b)(2)(B), which contains the Sentencing 

Commission’s guidance for handling a § 3582(c)(2) motion in 

a case involving a defendant who is serving a belowguideline sentence based on substantial assistance to the 

government. In that situation the Commission advises that 

“a reduction comparably less than the amended guideline 

range ... may be appropriate.” U.S.S.G. § 1B1.10(b)(2)(B) 

(emphasis added).

The judge calculated that a “reduction comparably less

than” the amended range in Phelps’s case would be

75 months, not 48 months as Phelps had argued. The judge

arrived at this higher figure by comparing Phelps’s 

60-month sentence to the below-guideline sentence of 

120 months that the court had originally imposed before the 

government’s substantial-assistance motion. The 60-month 

term was 50% of the original sentence, so the judge applied 

the same percentage to the amended range, the bottom of 

which was 151 months. That approach yielded a term of not 

less than 75 months. Because this term was greater than 

Phelps’s 60-month sentence, the judge found him ineligible 

for a § 3582(c)(2) reduction and denied the motion.

We reverse. To calculate a sentence that is “comparably 

less than the amended guideline range,” the Sentencing 

Case: 15-2528 Document: 22 Filed: 05/24/2016 Pages: 8
No. 15-2528 3

Commission instructs the court to compare the defendant’s 

current below-guideline sentence to the original unamended

guideline range, convert the difference to a percentage, and 

apply that percentage reduction to the amended range. See 

§ 1B1.10(b)(2)(B) cmt. n.3. This approach applies for all 

defendants serving a below-guideline sentence based on 

substantial assistance, even where (as here) the government’s substantial-assistance motion came after the court 

imposed a below-range sentence for some other reason (e.g., 

based on the factors listed in 18 U.S.C. § 3553(a)).

The judge’s misstep in this case was to compare Phelps’s 

current 60-month sentence to his initial below-guideline

120-month sentence rather than to the original unamended

guideline range. Phelps performed the correct calculation: 

His “comparably less” sentence is not less than 48 months, 

so he is eligible for a sentence reduction under § 3582(c)(2).

I. Background

Phelps pleaded guilty in January 2013 to a charge of conspiring to manufacture more than 500 grams of methamphetamine. See 21 U.S.C. §§ 841(b)(1)(A)(viii), 846. Under the 

then-applicable 2012 Sentencing Guidelines, the presentence 

report began with a base offense level of 32, added three 

levels for environmental harm, and three more levels for 

Phelps’s role as a manager or supervisor, and finally subtracted three levels for acceptance of responsibility. U.S.S.G. 

§§ 2D1.1(c)(4) (base offense), 2D1.1(b)(13)(C)(ii) (environmental harm), 3B1.1(b) (manager and supervisor), 3E1.1(a) 

(acceptance of responsibility). This yielded an adjusted

offense level of 35, which together with a criminal-history 

category of II, produced a guideline range of 188–

235 months.

Case: 15-2528 Document: 22 Filed: 05/24/2016 Pages: 8
4 No. 15-2528

At sentencing in May of that year the judge adopted 

these findings but imposed the statutory minimum sentence

of 120 months, see § 841(b)(1)(A), well below the bottom of 

the guideline range. This substantial downward variance 

was based on the judge’s consideration of the sentencing 

factors in § 3553(a). In July 2014 the prosecutor moved to 

reduce Phelps’s sentence based on his substantial assistance

to the government. See FED. R. CRIM. P. 35(b). The judge 

granted the motion and reduced the sentence to 60 months.

In November 2014 the Sentencing Commission promulgated Amendment 782, which reduced the base offense level 

for most drug crimes by two levels. See U.S.S.G. app. C., 

amend. 782, p. 65 (2014). The Commission later made the 

amendment retroactive. See id. amend. 788, p. 87. Phelps 

filed a pro se motion under § 3582(c)(2) seeking a sentence 

reduction based on the retroactive amendment. His appointed counsel later amended the motion, explaining that 

Amendment 782 had the effect of dropping Phelps’s base 

offense level to 30, his adjusted offense level to 33, and his 

guideline range to 151–188 months. Counsel argued that 

although Phelps’s current 60-month sentence was below the 

amended guideline range, the policy statement in 

§ 1B1.10(b)(2)(B) (the Commission’s guidance for handling 

§ 3582(c)(2) motions by defendants serving below-guideline 

sentences for substantial assistance) made him eligible for a 

new sentence of not less than 48 months.

The government agreed with Phelps’s reading of 

§ 1B1.10(b)(2)(B) but urged the judge to decline, in his discretion, to award any further sentence reduction. The judge 

rejected the parties’ interpretation of § 1B1.10(b)(2)(B), 

concluding instead that applying the policy statement to 

Case: 15-2528 Document: 22 Filed: 05/24/2016 Pages: 8
No. 15-2528 5

Phelps’s situation yielded a new sentence of not less than

75 months. Because this newly calculated term was greater 

than Phelps’s 60-month sentence, the judge held that Phelps 

was not eligible for the § 3582(c)(2) reduction and denied the 

motion.

II. Analysis

Section 3582(c)(2) authorizes the district court to reduce 

the sentence of a defendant who is serving a term of imprisonment “based on a sentencing range that has subsequently 

been lowered by the Sentencing Commission.” The court 

may reduce the defendant’s sentence “after considering the 

factors set forth in section 3553(a) to the extent that they are 

applicable,” but only “if such a reduction is consistent with 

applicable policy statements issued by the Sentencing Commission.” § 3582(c)(2) (emphasis added).

The statute requires a two-step inquiry: “First, the court 

determines whether a sentence reduction is consistent with 

the applicable policy statements promulgated by the Sentencing Commission; if it is, then the court considers whether a reduction is warranted after weighing any applicable 

§ 3553(a) factors.” United States v. Koglin, Nos. 15-1943 & 

15-1946, 2016 WL 2865620, at *2 (7th Cir. May 17, 2016) 

(citing Dillon v. United States, 560 U.S. 817, 826–27 (2010)).

In this case the judge never reached step two; instead, he 

found Phelps ineligible for a § 3582(c)(2) sentence reduction 

under the Commission’s policy statement, § 1B1.10(b)(2). 

That guideline states a general rule: The court “shall not 

reduce the defendant’s term of imprisonment ... to a term 

that is less than the minimum of the amended guideline 

range.” § 1B1.10(b)(2)(A). But there’s an exception for a 

Case: 15-2528 Document: 22 Filed: 05/24/2016 Pages: 8
6 No. 15-2528

defendant (like Phelps) who is serving a below-guideline 

sentence based on substantial assistance to the government:

If the term of imprisonment imposed was less 

than the term of imprisonment provided by the 

guideline range applicable to the defendant at 

the time of sentencing pursuant to a government motion to reflect the defendant’s substantial assistance to authorities, a reduction comparably less than the amended guideline range ... may

be appropriate.

§ 1B1.10(b)(2)(B) (emphasis added).

The precise question here is how to calculate a reduction 

“comparably less than the amended guideline range” when 

the defendant’s original sentence was below the guideline 

range for reasons other than substantial assistance and the 

credit for substantial assistance came later, reducing the 

sentence further still.

Application note 3 to § 1B1.10 gives an example for the 

perhaps more common scenario of a defendant who received credit for substantial assistance at the original sentencing proceeding. In that situation the note instructs the 

court to calculate the ratio between the defendant’s belowguideline sentence and the bottom of the original unamended guideline range and apply that same ratio to the bottom 

of the amended range. That computation produces the 

“comparable reduction,” which the Commission suggests 

“may be appropriate” in the exercise of the court’s discretion. § 1B1.10 cmt. n.3. 

But the application notes do not explicitly address the 

more complicated situation presented here. Phelps was 

Case: 15-2528 Document: 22 Filed: 05/24/2016 Pages: 8
No. 15-2528 7

initially sentenced to a term of imprisonment—120 

months—that was below the original unamended guideline 

range, but for reasons unrelated to substantial assistance. 

Only later did the court reduce the sentence based on the 

government’s substantial-assistance motion. Phelps argues

that in this situation a sentence reduction “comparably less 

than the amended guideline range” requires the same sort of 

approach specified in application note 3: a straightforward 

calculation of the ratio between his current 60-month sentence and the original unamended guideline range. The 

government agrees.1

The district judge saw things differently, interpreting

§ 1B1.10(b)(2)(B) to require a more limited inquiry into the 

specific portion of the defendant’s below-guideline sentence 

that is attributable solely to the substantial-assistance motion. 

On this understanding, the judge tried to isolate the effect of 

Phelps’s substantial-assistance credit by comparing his 

current 60-month sentence to his initial below-guideline

120-month sentence.

It’s true that the timing of the substantial-assistance motion in Phelps’s case distinguishes it from the example in 

application note 3. But we don’t think the distinction requires a different approach. Section 1B1.10(b)(2)(B) simply 

 1 In an earlier case the government took the opposite position. See Brief 

of Plaintiff-Appellee at 8, 11–14, United States v. Nichols, 789 F.3d 795 (7th 

Cir. 2015) (No. 15-1108) 2015 WL 1805151. We did not reach the issue,

however, finding the defendant’s challenge to his § 3582(c)(2) sentence 

reduction waived. United States v. Nichols, 789 F.3d 795, 796 (7th Cir. 

2015). The government acknowledges that its current position represents 

a change in its view of how § 1B1.10(b)(2)(B) applies in this situation. 

Case: 15-2528 Document: 22 Filed: 05/24/2016 Pages: 8
8 No. 15-2528

asks whether the defendant’s current term of imprisonment 

is less than the original unamended guideline range and 

whether that term was imposed pursuant to a substantialassistance motion. It doesn’t ask if that motion came during 

or after the original sentencing proceeding. Though the 

application notes could be clearer, we agree with the parties 

that the two-step computation explained in application 

note 3 applies regardless of whether the substantialassistance reduction came at the time of the original sentencing or after. 

Under this approach Phelps is eligible to receive a new 

sentence of not less than 48 months.2 Whether he deserves 

that reduction in his sentence, something less, or no reduction at all is a question for the judge to consider on remand 

based on an examination of any applicable § 3553(a) factors. 

REVERSED and REMANDED.

 2 Here’s the math: Phelps’s current sentence is 60 months. The bottom of 

his original unamended guideline range was 188 months. Sixty months is 

31.9% of 188 months. When this percentage is multiplied by the bottom 

of the amended guideline range (151 months), the result is approximately 48 months.

Case: 15-2528 Document: 22 Filed: 05/24/2016 Pages: 8