Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-03326/USCOURTS-ca10-89-03326-0/pdf.json

Parties Involved:
James T. Labat
Appellant
United States of America
Appellee

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

FILED 

U,nited Stites Coun of Appeals 

T~mh Circuit 

SEP 2 8 1990 

ROBERT L. HOECKER 

Clerk 

v. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

Nos. 89-3326, 89-3329, 

and 89-3330 

JAMES T. LABAT, 

Defendant-Appellant. 

Appeal from the United States District Court 

For the District of Kansas 

D.C. Nos. 89-10007-01, 

89-10015-01, and 89-10073-01 

Robin D. Fowler, Assistant U.S. Attorney (Kim I. Martin, Assistant 

U.S. Attorney, and Lee Thompson, United States Attorney, on the 

brief), Wichita, Kansas, for Plaintiff-Appellee. 

Cyd Gilman, Assistant Federal Public Defender, Wichita, Kansas, 

for Defendant-Appellant. 

Before MOORE, SETH, and ANDERSON, Circuit Judges. 

MOORE, Circuit Judge. 

Appellate Case: 89-3326 Document: 01019847950 Date Filed: 09/28/1990 Page: 1 
The single issue raised in this case is whether the district 

court erred in imposing a fine totalling $110,823.95 under 

u.s.s.G. s SE1.2(i). Because the district court's decision to 

impose a fine for the purpose of offsetting the costs of 

incarceration after refusing to impose a punitive fine is 

inconsistent with the guidelines, we vacate the fine. 

James Labat pled guilty to one count of conspiracy to possess 

cocaine with intent to distribute in violation of 21 u.s.c. §§ 841 

and 846. Mr. Labat was sentenced to sixty months' incarceration 

to run concurrently with sentences imposed in two other cases. 

Additionally, a term of five years of supervised release was 

imposed. In each of the three cases, the defendant was ordered to 

pay fines totalling $110,823.95. The court levied these fines for 

the purpose of reimbursing the government for the costs of his 

incarceration. 

The Pre-sentence Report (PSR) addressed Mr. Labat's ability 

to pay a punitive fine based on his existing personal assets and 

earning potential. The report disclosed Mr. Labat's two cars were 

confiscated leaving him with no assets other than personal 

eff'ects, -furniture·, .. and---clothing;· --he did not own the house where 

he resided but rented it from his sister; he has been unemployed 

since July 1988; and his family receives public assistance. The 

report further disclosed, however, Mr. Labat made cash payments 

totalling $50,000 on a home his mother owns for which she signed a 

note for the remaining $35,000 balance. 1 Mr. Labat's work history 

1ouring oral argument, we were advised by counsel for both sides 

the government has commenced forfeiture proceedings against this 

house. 

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Appellate Case: 89-3326 Document: 01019847950 Date Filed: 09/28/1990 Page: 2 
included a year of managing a club, three years of employment as a 

bodyguard, and sporadic odd jobs at a gas station and grain 

company. The PSR suggested that Mr. Labat has the earning ability 

to pay a fine on an installment basis from the lower end of the 

guideline range, u.s.S.G. § 5El.2(c)(3), but a fine above that 

limit would be inappropriate. The PSR concluded that because the 

court had appointed counsel for Mr. Labat, he should be considered 

indigent for purposes of imposing the§ 5El.2(i) additional fine. 

At the sentencing hearing, the only contested issue was Mr. 

Labat's ability to pay any fine, but no evidence directed to this 

issue was presented by either the government or the defendant. 

Despite the disclosures in the PSR and without making any specific 

finding of the defendant's ability to pay, the court imposed fines 

in all three cases. Implicit, however, in the court's refusal to 

impose a fine under § 5El.2 i~ the presumption that the court 

found the defendant unable to pay the punitive fine. 2 Upon 

request of defense counsel, the court clarified that the fines 

imposed were for incarceration and supervision. In all three 

cases, the imposition of fines was based upon the court's 

conclusion - ·they··· were -justified --because of "the defendant's 

financial profile and his future potential earning capabilities." 

The court was also of the opinion "[t]he fine could be satisfied 

2 Section 5El.2(a) states: "Except as provided in subsection (f) 

below, the court shall impose a fine in all cases." (Emphasis 

added.) Section 5El.2(f) states the court may waive the fine if 

it determines the defendant is unable to pay_ or the fine would 

"unduly burden the defendant's dependents. 11 Because the court did 

not impose the fine mandated under§ 5El.2(a), and because the 

only reasons that fine can be waived are those set out in 

subsection (f), the only logical assumption is that the court 

found those reasons to exist. 

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Appellate Case: 89-3326 Document: 01019847950 Date Filed: 09/28/1990 Page: 3 
no later than during the period of supervised release." That 

statement notwithstanding, Mr. Labat calculates to satisfy the 

$110,000 fine during his five-year period of supervised release, 

he must pay $22,164 per year.

3 

Although defense counsel argued Mr. Labat was undereducated, 

untrained vocationally, unable to retain counsel, and his family 

would be unduly burdened, the court stated that society should not 

be burdened with the expense of. paying for Mr. Labat's 

imprisonment. "I think the defendant is the one who is 

responsible for his acts and responsible for his keep," the court 

stated. 

Recognizing that § 5El.2(d) requires that the combined 

sentence reflect the seriousness of the offense, Mr. Labat 

contends on appeal that the district court overlooked additional 

factors the Commission provided to determine an appropriate fine. 

Chief of these factors, he contends, are a defendant's ability to 

pay and the burden on defendant's dependents. If the defendant 

establishes both the inability to pay and family hardship, the 

court may impose a lesser fine or waive the fine entirely provided 

the total ·combined. sanction--remains .. punitive. § SE 1. 2 ( f) . 

4 Mr. 

3since nothing within the record establishes he has any ability to 

pay this sum, he contends the district court erred in imposing a 

fine on that ground alone. 

4section 5El.2(f) states: 

If the defendant establishes that (1) he is not able, 

and, even with the use of a reasonable installment 

schedule, is not likely to become able to pay all or 

part of the fine ... , or (2) imposition of a fine 

would unduly burden the defendant's dependents, the 

court may impose a lesser fine or waive the fine. In 

(Continued to next page.) 

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Appellate Case: 89-3326 Document: 01019847950 Date Filed: 09/28/1990 Page: 4 
Labat urges the court not only bypassed this analysis but 

improperly applied the guidelines. 

Defendant contends a fine for the costs of incarceration, 

defined by§ 5El.2(i) as an "additional" fine, cannot be assessed 

unless the "regular type of fine" or punitive fine is first 

levied. Under § 5El.2(a), "the court shall impose a fine in all 

cases" (emphasis added) unless the court waives it upon finding 

the conditions of§ 5El.2(f) satisfied. Since the district court 

decided not to impose a fine under § 5El.2(a), presumably upon 

application of § 5El.2(f) to the facts in the PSR, defendant 

contends the court erred in levying the additional fine for 

incarceration in the face of the same PSR. In support, Mr. Labat 

quotes Commentary 7 of§ SEl.2: "Subsection (i) provides for an 

additional fine sufficient to pay the costs of any imprisonment 

subject to the defendant's 

(Emphasis added.) 

ability to pay • • • • II 

Mr. Labat contends the district court properly applied 

§ 5El.2(f) in deciding not to impose a punitive fine but failed to 

apply the same analysis to the so-called additional fine, despite 

the specific··inclusion·· of -subparagraph (f) limitations within 

§ 5El.2(i). In addition, Mr. Labat contends the district court's 

imposition of a subparagraph (i) fine is clearly erroneous in 

light of the record. 

(Continued from prior page.) 

these circumstances, the 

alternative sanctions in lieu 

fine, and must still impose a 

that is punitive. 

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court shall consider 

of all or a portion of the 

total combined sanction 

Appellate Case: 89-3326 Document: 01019847950 Date Filed: 09/28/1990 Page: 5 
Because defendant chose to present no evidence at the 

sentencing hearing, the only evidence before the court on 

defendant's financial condition was the PSR, which concluded: 

II [ I )t is the writer's opinion that the defendant should still be 

considered indigent for the purposes of imposing this additional 

fine." Notwithstanding his failure to augment the PSR with 

additional facts assuming such facts even exist - defendant 

maintains the court erred in imposing the fine because he is 

clearly without means to satisfy it. In support, defendant cites 

United States v. Seminole, 882 F.2d 441 (9th Cir. 1989), and 

United States v. Mitchell, 893 F.2d 935 (8th Cir. 1990). 

In Seminole, the district court assessed a $5,000 fine "to 

repay the taxpayers" for court-appointed counsel's overburdening 

the court throughout the trial. At sentencing, the parties 

stipulated that defendant was indigent. The Ninth Circuit held 

the district court failed to consider the defendant's ability to 

pay before imposing the fine and vacated and remanded the case for 

reconsideration. In Mitchell, the court ordered the defendant to 

pay restitution reduced from $45,000 to $22,000 over a three-year 

period although the·-Pre-sentence report stated defendant had a 

total monthly income of $175, and it was-unlikely that defendant 

could make restitution. Recognizing that the district court has 

broad discretion to fashion a restitutionary order, the Eighth 

Circuit reversed the order and remanded for a determination of 

defendant's ability to pay related as well to a realistic 

timetable. 

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• 

Appellate Case: 89-3326 Document: 01019847950 Date Filed: 09/28/1990 Page: 6 
In response, the government argues the court had sufficient 

evidence before it to support the fine. The government offers 

that the PSR can be read more than one way. In that alternative 

reading, it would be noted that Mr. Labat is a "healthy 29 year 

old male," graduated from high school, earned twelve hours college 

credit, and "has the physical and mental capabilities to gain 

substantial lawful employment after he is released from prison." 

The government argues defendant's life-style, choosing not to work 

in the past and preferring to traffic in cocaine, is not a 

sufficient reason for waiving the fine. The prosecutor adds, in 

one month Mr. Labat managed to pay $50,000 for his mother's house, 

half of the fine ordered by the court, and also describes two 

large cocaine buys in which Mr. Labat managed to procure large 

amounts of cash to purchase drugs. 5 The government reminds us 

that Mr. Labat has the burden to show his inability to repay the 

fine during the five years of supervised release time, but does 

not address the issue of the burden the fine would place on 

defendant's family. 

The government distinguishes Seminole on the ground that the 

court used · the fine . -to- punish defendant for his attorney's 

conduct, and Mitchell because it involved restitution. The 

government urges the district court's finding was sufficient to 

support the fine. 

5The government cites Comment 6 which states that the court may 

consider income or assets the defendant failed to disclose to 

justify the larger fine, but there is no evidence in this case the 

defendant has undisclosed assets. 

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Appellate Case: 89-3326 Document: 01019847950 Date Filed: 09/28/1990 Page: 7 
The government's arguments, however, do not realistically 

deal with the facts in the record. First, the record makes clear 

the defendant is without current assets. Second, the financial 

benefits he might have derived from trafficking in contraband 

notwithstanding, there is no evidence that he produced significant 

income from legitimate pursuits. Finally, there is no indication 

in the record of his ability to gain employment upon release from 

custody that would produce income sufficient to allow Mr. Labat to 

support his dependents and still pay the fines he was assessed. 

In this instance, we cannot say the defendant failed to carry 

the burden of showing ability to pay imposed upon him by 

§ 5El.2(f) because the PSR effectively satisfied that burden for 

him. Here, the defendant was entitled to rely and stand upon the 

facts contained in the PSR which led only to the conclusion the 

defendant is indigent and without potential prospects for 

improving that situation. Moreover, the government does not 

suggest the presence of any contrary evidence. Under the 

circumstances of this case, we would have to agree with the Eighth 

Circuit that "it is an incorrect application of the guidelines to 

impose a fine that a . defendant has little chance of paying. 11 

United States v. Walker, 900 F.2d 1201, 1207 (8th Cir. 1990). 

Assuming, argumentatively, that the evidence of the 

,defendant's ability to pay is, at best, equivocal, and the 

district court was not burdened by subparagraph (f), there is an 

even more fundamental reason the fine is 

the clear terms of § 5El.2(i), the 

invalid. According to 

fine to reimburse the 

government is an "additional fine." Yet, the government rejects 

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Appellate Case: 89-3326 Document: 01019847950 Date Filed: 09/28/1990 Page: 8 
Mr. Labat's argument that before a fine can be imposed for costs 

of incarceration, the court must impose a punitive fine, 

contending the only restriction placed on u.s.s.G. § 5El.2(i) is a 

defendant's ability to pay. 

Mr. Labat's two-step reading of the guidelines, however, 

makes sense both on grounds of simple logic and a plain reading of 

the language of this section. 6 Under§ 5El.2, a fine must be 

imposed unless subparagraph (f) is satisfied. Although (f) is not 

mandatory, it makes no sense to waive the punitive fine and impose 

the "additional" fine. 

Indeed, a fine is a fine, 7 and if a defendant is indigent for 

purposes of one, he must be indigent for purposes of the other. 

Moreover, fundamental semantics dictates that a subparagraph (i) 

fine cannot be "additional," unless it augments another fine. The 

611Additional" is defined as "existing or coming by way of 

addition." Webster's Third International Dictionary, p.24 (1981). 

7

see The Sentencing Commission's "Questions Most Frequently Asked 

About The Sentencing Guidelines," Question #24: 

Is the cost of imprisonment and supervision 

considered a fine? 

Answer: Yes. ·· The guidelines provide that the 

court shall order a fine within the guideline fine range 

and the court "shall impose an additional fine amount 

that is at least sufficient to pay the cost to the 

government of any imprisonment, probation, or supervised 

release ordered" (emphasis added). Of course, the 

guideline fine and the costs of imprisonment/supervision 

fine cannot total more than the maximum fine provided by 

statute. (See§ 5El.2(i).) 

We note this publication contains the disclaimer that the 

information does not "necessarily represent the official position 

of the Commission, should not be considered definitive, and is not 

binding upon the Commission, the court or the parties in any 

case." 

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Appellate Case: 89-3326 Document: 01019847950 Date Filed: 09/28/1990 Page: 9 
guideline simply permits no other reading. Unfortunately, the 

district court seemingly gave no consideration to the language of 

subparagraph (i) and, as a result, misapplied§ 5El.2 of the 

guidelines. 

The government cites our recent opinion in United States v. 

Doyan, __ F.2d __ (10th Cir. 1990), in support of its contention 

that the trial court did not abuse its discretion in levying the 

cost of incarceration fine. Even though Mr. Doyan was Mr. Labat's 

codefendant, there are distinctions present in Doyan which make 

the case inapposite. Principal among these distinctions is the 

evidence of Mr. Doyan's earning capacity. In this context, the 

Doyan court held the trial court did not abuse its discretion by 

refusing to waive the cost of incarceration fine. That is not the 

context of this case. Here there is no evidence Mr. Labat was 

earning a regular income or had the ability to do so upon 

discharge from incarceration. Moreover, the Doyan court did not 

consider the inconsistency between waiving the punitive fine and 

levying the cost of incarceration fine. More importantly, the 

Doyan court was not called upon to consider whether a cost of 

incarceration fine -could be -imposed without first imposing a 

punitive fine. For these reasons, Doyan is not controlling in 

this case. 

We hold that an "additional fine" under§ 5El.2(i) cannot be 

imposed unless the court first imposes a punitive fine under 

§ 5El.2(a). The FINE is VACATED, but in all other respects the 

judgment is AFFIRMED. 

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Appellate Case: 89-3326 Document: 01019847950 Date Filed: 09/28/1990 Page: 10