In the

United States Court of Appeals

For the Seventh Circuit

No. 11-1927

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

MARIO NUNEZ,

Defendant-Appellant.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 10 CR 740-1—Amy J. St. Eve, Judge.

ARGUED JANUARY 25, 2012—DECIDED MARCH 9, 2012

Before BAUER, POSNER, and ROVNER, Circuit Judges.

POSNER, Circuit Judge. This criminal appeal requires us

to wrestle once again with the distinction between a

“mere” buyer-seller relation and a conspiracy involving

a buyer and a seller. For our earlier struggles with the

issue, see, e.g., United States v. Colon, 549 F.3d 565 (7th

Cir. 2008), and the six opinions in United States v. Lechuga,

994 F.2d 346 (7th Cir. 1993) (en banc).

The defendant was convicted by a jury of conspiracy

to possess and distribute cocaine, in violation of 21 U.S.C.
2 No. 11-1927

§§ 841(a)(1), 846, and of related offenses, and was sentenced to 85 months in prison. He asks us to order that

he be acquitted of the conspiracy charge (and related

charges dependent on it), on the ground that no reasonable jury could find him guilty of conspiracy. He

asks in the alternative that we order a new trial on the

ground that the verdict of conspiracy was against

the weight of the evidence.

Since the sale of illegal drugs is a crime, one might

think it would make no difference whether a defendant

was prosecuted as a seller or as a member of a conspiracy to sell, and hence that the government would be

assuming a gratuitous burden, in charging conspiracy, of

proving that the defendant was conspiring, and not just

selling. The concern—remote from the traditional criticisms of the concept of conspiracy, see, e.g., Krulewitch v.

United States, 336 U.S. 440, 445-58 (1949) (Jackson, J.,

concurring); Harrison v. United States, 7 F.2d 259, 263 (2d

Cir. 1925) (L. Hand, J.)—is redundancy. United States v.

Reynolds, 919 F.2d 435, 439 (7th Cir. 1990). But there are

legitimate, significant advantages to prosecutors in drug

cases not only of proving conspiracy, which is not the

same thing as charging conspiracy, but also of obtaining

a verdict of conspiracy.

Although the sentence for selling or conspiring to sell

is the same when it is based on the same quantity of

drugs, 21 U.S.C. § 846, a conspiracy will often, as in this

case, embrace a greater quantity than the amount sold

by a single defendant; for it will include the amount

foreseeable to the defendant that the conspirators
No. 11-1927 3

intended to sell in furtherance of the conspiracy. True,

for conspiracy as for distribution the relevant quantity

for purposes of sentencing under the federal sentencing

guidelines is limited to the defendant’s “jointly undertaken activity,” U.S.S.G. § 1B1.3(a)(1)(B); United States v.

Lewis, 110 F.3d 417, 422-23 (7th Cir. 1999); United States

v. Spotted Elk, 548 F.3d 641, 673-74 (8th Cir. 2008); United

States v. Laboy, 351 F.3d 578, 582 (1st Cir. 2003), a term

that while similar to “conspiracy” and often treated as

interchangeable with it, see United States v. Alvarado-Tizoc,

656 F.3d 740, 744 (7th Cir. 2011), is narrower because

the activity undertaken by the defendant in concert with

others is more limited than the activity, foreseeable to

him, of the entire conspiracy. See United States v. Morales,

655 F.3d 608, 635-36 (7th Cir. 2011); United States v.

Almanza, 225 F.3d 845, 846 (7th Cir. 2000). But proof of

conspiracy goes far to establish that the defendant’s

jointly undertaken activity involved a larger quantity of

drugs than those he himself sold.

For purposes of determining statutory (as distinct

from guidelines) minimums, moreover, the total amount

of drugs attributable to a conspiracy can be aggregated,

United States v. Easter, 553 F.3d 519, 523 (7th Cir. 2009), but

not the amounts involved in multiple counts of distribution. United States v. Resinos, 631 F.3d 886, 888 (8th Cir.

2011) (en banc) (per curiam); United States v. Sandlin, 313

F.3d 354, 355-56 (6th Cir. 2002) (per curiam); United States

v. Harrison, 241 F.3d 289, 291-92 (2d Cir. 2001). Statutory

minimum sentences, as in 21 U.S.C. §§ 841(b)(1)(A),

(b)(1)(B), are a boon to prosecutors because so many

sentences are below the guidelines ranges (in fiscal year
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2010, 43 percent of sentences nationwide and 49 percent

in the Seventh Circuit, U.S. Sentencing Commission,

“National Comparison of Sentence Imposed and Position

Relative to the Guideline Range: Fiscal Year 2010,”,

www.ussc.gov/Data_and_Statistics/Annual_Reports_and_

Sourcebooks/2010/TableN.pdf, and “Comparison of

Sentence Imposed and Position Relative to the Guideline

Range by Circuit: Fiscal Year 2010,” www.ussc.gov/

Data_and_Statistics/Annual_Reports_and_Sourcebooks/

2010/TableN-7.pdf (both visited Feb. 23, 2012)).

Evidence of prior crimes is less likely to be barred from

admission by Fed. R. Evid. 404(b)(1) in a conspiracy

case, because prior crimes are likely to be germane to

establishing that the defendant had a relationship with

other participants in his drug deals that went beyond

mere buying or selling. See United States v. Gilmer, 534

F.3d 696, 705 (7th Cir. 2008); United States v. Penson, 896

F.2d 1087, 1092-93 (7th Cir. 1990); United States v. Mercado,

573 F.3d 138, 144 (2d Cir. 2009).

Out-of-court statements by a conspirator are freely

admissible in evidence against his coconspirators as

admissions of a party opponent, rather than being inadmissible as hearsay, Fed. R. Evid. 801(d)(2)(E); United

States v. Rea, 621 F.3d 595, 604 (7th Cir. 2010); United

States v. Lopez, 649 F.3d 1222, 1238 (11th Cir. 2011);

United States v. Diaz, 597 F.3d 56, 67 (1st Cir. 2010), although their admissibility requires not that conspiracy

be charged but only that it be proved by a preponderance

of the evidence. United States v. Bolivar, 532 F.3d 599,

604 (7th Cir. 2008); United States v. Martinez de Ortiz, 907

F.2d 629, 632 (7th Cir. 1990) (en banc).
No. 11-1927 5

The evidentiary burden on the government of proving

a conspiracy often is lighter than that of proving

multiple charges of distribution in order to maximize

the quantity of drugs for which the defendant can be

held responsible. Prosecuting every sale between seller

and buyer in this case, for example, would have been

difficult. The government had video evidence of only

two sales. Proving the others beyond a reasonable

doubt would have depended on the credibility of the

seller, who had been induced to testify for the government

and would be vulnerable to cross-examination. To persuade a jury to convict on a single conspiracy charge

the government need prove only an agreement. Quantity

is not an element, United States v. Garcia, 580 F.3d 528,

535 (7th Cir. 2009); Barker v. United States, 7 F.3d 629, 634

(7th Cir. 1993), and proof of an overt act is not required.

United States v. Shabani, 513 U.S. 10 (1994).

Charging a conspiracy can avoid a statute of limitations defense that would be effective against a charge

of distribution. The statute of limitations for conspiracy

does not begin to run against an individual conspirator

until he withdraws from the conspiracy, United States

v. Wren, 363 F.3d 654, 663 (7th Cir. 2004), and it is difficult to prove that one has withdrawn other than by

becoming a government informant; mere cessation of

activity on behalf of the conspiracy is not enough. Hyde

v. United States, 225 U.S. 347, 369 (1912); United States v.

Paladino, 401 F.3d 471, 479-80 (7th Cir. 2005); United

States v. Borelli, 336 F.2d 376, 388 (2d Cir. 1964) (Friendly,

J.). And finally a small fry prosecuted for membership

in a conspiracy is unlikely to obtain a severance of his
6 No. 11-1927

trial from that of the ringleaders. See United States v. TiemTrinh, 665 F.3d 1, 17 (1st Cir. 2011).

In the present case, however, by charging conspiracy

in addition to distribution the government handed the

defendant his only ground of appeal—a vexing ground

because of the difficulty of drawing a clear line between

sales, and conspiracies to sell, in particular cases.

The difficulty is illuminated by an antitrust analogy.

Section 1 of the Sherman Act punishes contracts, combinations, and conspiracies in restraint of trade, 15 U.S.C. § 1,

and the distinction among these terms is unimportant.

If a seller signs a contract with a buyer that sets a floor

under the retail price at which the buyer may resell the

seller’s product, the resulting limitation on intrabrand

price competition can be challenged under section 1 as

a contract in restraint of trade, but equally as a conspiracy in restraint of trade; for “conspiracy” in section 1

is simply a pejorative term for a contract, both “conspiracy” and “contract” signifying an agreement, a meeting

of minds. That is equally true when one person

agrees to sell illegal drugs to another. Of course to be

legally enforceable a contract requires certain formalities, which will not be found in a conspiracy. But their

absence is of no moment; a criminal contract is unenforceable whatever form it takes.

The federal drug laws, however, insist on the distinction

between a conspiracy and a contract of sale. E.g., United

States v. Vallar, 635 F.3d 271, 286-87 (7th Cir. 2011); United

States v. Johnson, 592 F.3d 749, 754-57 (7th Cir. 2010); United

States v. Delgado, No. 07-41041, 2012 WL 574012, at *7-8 (5th
No. 11-1927 7

Cir. Feb. 22, 2012) (en banc); id. at *33-38 (dissenting

opinion), and cases cited in id. at *33 n. 20. As explained

in United States v. Colon, supra, 549 F.3d at 569, quoting

United States v. Townsend, 924 F.2d 1385, 1394 (7th Cir.

1991), “there are practical reasons for not conflating sale

with conspiracy. ‘A sale, by definition, requires two

parties; their combination for that limited purpose does

not increase the likelihood that the sale will take place,

so conspiracy liability would be inappropriate.’ ” But “a

conspiracy involves more people and can therefore

commit more crimes; and it can do so more efficiently,

by exploiting the division of labor and by arranging

concealment more effectively—sometimes through

suborning law enforcers.” United States v. Manzella, 791

F.2d 1263, 1265 (7th Cir. 1986).

So there must be more than just a sale of drugs to support an inference of conspiracy, and the question is what

more. The answer might seem to depend on how the

criminal law draws the line between contract and conspiracy. The line might run between “contract” conceived

of as a purely arm’s-length relationship and “conspiracy”

conceived of as a cooperative relationship—a relationship

of mutual assistance. See United States v. Speed, 656 F.3d

714, 719 (7th Cir. 2011); United States v. Townsend, supra,

924 F.2d at 1392. Actually that would be a distinction

among types of contract. A spot contract, illustrated in

its purest form by a trade on a stock exchange, involves

a minimal relationship, because there is only the single

transaction and the parties may not even be identified

to each other. In contrast, the aptly named “relational

contract,” such as a long-term requirements contract,

creates a continuing relationship flexible enough to
8 No. 11-1927

adapt to changes of circumstance that could not have

been fully anticipated when the contract was negotiated.

See Charles J. Goetz & Robert E. Scott, “Principles

of Relational Contracts,” 67 Va. L. Rev. 1089, 1092-95

(1981). So one way to understand a drug conspiracy is as

a relational contract among drug dealers. See United

States v. Lechuga, supra, 994 F.2d at 349 (plurality opinion).

Without necessarily endorsing that approach, let us

consider on which side of that line the present case falls.

The defendant had bought almost two kilograms of

cocaine from a man named Latine over a period of 18

months. Some of the sales had been on credit, and Latine

had sometimes allowed the defendant to return cocaine

he had bought because it was not of the agreed-upon

quality, and when that happened Latine had refunded

the purchase price. It is unclear how many sales in total

he made to the defendant over the course of their relationship, but from his testimony concerning the amount

of each sale a jury could reasonably infer that there

had been at least seven sales.

These facts just reveal a commonplace wholesale relationship. The defendant was a retail dealer, which

means that he probably had a number of customers and

that his sales to them were spot transactions, while he

had a continuing relation with his wholesaler, Latine.

Sales on credit and returns for refunds are normal incidents of buyer-seller relationships, spot or otherwise; so

thus far all we’ve seen to distinguish the defendant’s

dealings with Latine from “mere” sales is that the sales

were not spot transactions and were wholesale rather

than retail sales.
No. 11-1927 9

The government adds that there was “mutual trust”

between the defendant and Latine, and it cites cases in

which our court and other courts have described “mutual

trust” as a factor that distinguishes an ordinary drug sale

from a drug conspiracy. E.g., United States v. Kincannon,

567 F.3d 893, 898-99 (7th Cir. 2009); United States v.

Baugham, 449 F.3d 167, 173 (D.C. Cir. 2006); United States

v. Washington, 318 F.3d 845, 852 (8th Cir. 2003). But

mutual trust is just an implication of illegal sales on

credit; since you cannot sue a buyer who stiffs you in an

illegal transaction, you must trust him in order to be

willing to extend credit to him. See United States v. Colon,

supra, 549 F.3d at 567-68; United States v. Baugham, supra,

449 F.3d at 173. It is not an additional factor but rather

a way of explaining why sales on credit are a factor in

inferring conspiracy. It would be different if mutual trust

were being inferred from a familial relationship or

some other circumstance distinct from a willingness to

make an illegal sale on credit.

But this leaves unanswered the question why willingness to sell illegal drugs on credit is evidence of

conspiracy, when it is such a common feature of legal

selling. Less trust is involved in legal sales on credit,

since the seller has legal remedies; but why should trust

be thought indicative of conspiracy? That would imply

that sales on credit were made only to coconspirators.

Moreover, parties to an illegal sale must trust each

other more than is normal in legal sales, even when the

sale is for cash rather than on credit: trust each not to

rob the other and not to be or to turn government informant.
10 No. 11-1927

Since an agreement to commit a crime is a conspiracy,

the wholesaling of illegal drugs on credit could be

thought to give rise to an automatic inference of conspiracy. The wholesaler knows the retailer will repay

the loan by committing the crime of selling the illegal

drugs that he’s acquired on credit, and by acquiescing

the wholesaler becomes a party to the retail sale, which

is to say to an agreement to commit a crime, which is a

conspiracy. For cases supportive of this approach, see, e.g.,

United States v. Vallar, supra, 635 F.3d at 286; United States

v. Rock, 370 F.3d 712, 714-15 (7th Cir. 2004); United States

v. Kozinski, 16 F.3d 795, 808 (7th Cir. 1994); United States

v. Lechuga, supra, 994 F.2d at 350 (plurality opinion); United

States v. Parker, 554 F.3d 230, 238-39 (2d Cir. 2009). The

approach is attractive both conceptually, by aligning

conspiracy with an agreement to commit a crime, and as

a welcome simplification of doctrine, by drawing a

bright line between the retail and wholesale drug trades

and treating the relationship between wholesaler and

retailer as conspiracy rather than trying to distinguish

contract from conspiracy on the basis of “plus” factors

that seem mostly makeweights, such as mutual trust

when it is just an inference from sales on credit. Application of this approach in the present case would nail

the defendant.

And this may be where the law is headed, as the cases

just cited indicate. But a number of other cases, such as

United States v. Johnson, supra, 592 F.3d at 755-57, and

United States v. Townsend, supra, 924 F.2d at 1392, reject

such a rule.
No. 11-1927 11

We needn’t choose between the two lines of authority

in this case, because there is additional evidence of conspiracy.

Latine’s supplier was the defendant’s father. He had

been the son’s wholesale supplier, but they had quarreled

and the son had switched to buying from Latine, though

the father remained his son’s indirect supplier. One

evening the defendant by chance saw Latine’s car

stopped by the side of a road and being searched by

police. The defendant telephoned his father to tell him

what was happening, and they agreed that Latine’s

family should be told and should be urged to discard

any drugs that Latine might have in the house. The

father directed his son to tell the family these things, and

also to leave Latine’s house promptly after doing so,

before the police arrived. He also told his son that he

was in touch with a person at the scene of the arrest

who was waiting to see whether the police would discover the drugs hidden in Latine’s car and arrest him.

We needn’t decide whether a conspiracy with the

father was formed by the discussion with the son, or

indeed pre-existed the discussion (which would be no

surprise, since the father was Latine’s supplier). It is

enough that the episode reveals mutual support and

protection grounded in a family relationship that

provided linkage that is not a common feature of wholesaling. Cf. United States v. Murray, 474 F.3d 938, 941

(7th Cir. 2007). When he learned of Latine’s arrest the

defendant could simply have cleared out; instead he

tried to save Latine’s business. The family connection—
12 No. 11-1927

the defendant’s father being Latine’s direct and the son’s

indirect supplier and the quarrel between father and son

being forgotten in a crisis—had forged a relationship

between Latine and the defendant that the jury was

entitled to characterize as conspiring to distribute

drugs rather than merely buying and selling them.

United States v. Rea, supra, 621 F.3d at 608; United States

v. Johnson, supra, 592 F.3d at 755-56. The judgment is

therefore

AFFIRMED.

3-9-12