## F I L E D United States Court of Appeals Tenth Circuit 

### JUL 2 1997 

### PATRICK FISHER Clerk 

### PUBLISH UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED STATES OF AMERICA, Plaintiff-Appellee,

v. KENNETH WAYNE HOLLAND, Defendant-Appellant, No. 96-1102

Appeal from the United States District Court for the District of Colorado (D.C. No. 96-M-76)

James P. Moran, Assistant Federal Public Defender ( Michael G. Katz, Federal Public Defender, with him on the briefs), Denver, C olorado, for DefendantAppellant. Charlotte J. Mapes, Assistant United States Attorne y (Henry L. Solano, United States Attorney, with her on the brief), Denver, Co lorado, for Plaintiff-Appellee.

Before SEYMOUR , Chief Judge, BRORBY and KELLY , Circuit Judges.

SEYMOUR , Chief Judge.1 Mr. Holland was also convicted of two separate cou nts of possession of a

firearm by a convicted felon under 18 U.S.C. § 922( g). These convictions are not challenged here and are not relevant to our conside ration of the issues raised by Mr. Holland. -2- Kenneth Wayne Holland was convicted of possession o f cocaine with intent to distribute under 21 U.S.C. § 841(a)(1), and of u sing and carrying a firearm during and in relation to a drug trafficking crime under 18 U.S.C. § 924(c)(1). 1 His convictions were affirmed on direct appeal. Un ited States v. Holland , 10 F.3d 696 (10th Cir. 1993). He subsequently brought a mo tion to vacate judgment and sentence under 28 U.S.C. § 2255, asserting that his section 924(c)(1) conviction is invalid under Bailey v. United States , 116 S. Ct. 501 (1995), which was decided after we affirmed of his conviction. Mr. Holland appeals the district court’s denial of relief, and we affirm. The facts underlying Mr. Holland’s convictions are set out in detail in our opinion on direct appeal, and we therefore recite o nly those facts relevant to the disposition of the issue before us here. After a v ehicle occupied by Mr. Holland and co-defendant Sevelt Kelly was pulled over on a routine traffic stop, police officers observed five rounds of ammunition on the vehicle’s center console. Mr. Holland, who was driving, consented to a search of the car, which revealed a revolver registered to Mr. Kelly under the passenge r seat plus drug paraphernalia and a small amount of cocaine found elsewhere in th e vehicle. Both defendants-3-

possessed cash and pagers purchased by Mr. Holland, and Mr. Kelly also had three rounds of ammunition that matched the cylinde r of the gun under the seat. Three ounces of cocaine in a cosmetic bag were foun d by the side of the road where the traffic stop occurred. Mr. Holland was convicted of violating 18 U.S.C. § 924(c)(1), which imposes a mandatory minimum term of imprisonment up on a person who “during and in relation to any crime of violence or drug tr afficking crime . . . uses or carries a firearm.” He now contends that his secti on 924(c)(1) conviction is invalid under the Supreme Court’s construction of t hat statute in Bailey . Prior to the Baileydecision, this court had adopted a definition of “ use” for purposes of section 924(c)(1) under which “a defendant ‘uses’ afirearm when it ‘(1) is readily accessible, (2) is an integral part of the criminal undertaking, and (3) increases the likelihood of success for that undertaking.’” H olland , 10 F.3d at 699 (quoting United States v. Conner , 972 F.2d 1172, 1173 (10th Cir. 1992)). Under thi s definition we had upheld the section 924(c)(1) “use ” conviction of the driver of a vehicle containing drugs and a gun under a bag on t he passenger seat next to him.
See United States v. McKinnell , 888 F.2d 669, 674-75 (10th Cir. 1989). In Bailey , the Supreme Court rejected such a broad definitio n of “use” and held that section 924(c)(1) “requires evidence suff icient to show an active employmentof the firearm by the defendant, a use that makes the firearm an-4-

operative factor in relation to the predicate offen se.” Bailey , 116 S. Ct. at 505. Under this construction, “[a] defendant cannot be c harged under § 924(c)(1) merely for storing a weapon near drugs or drug proc eeds. Storage of a firearm, without its more active employment, is not reasonab ly distinguishable from possession.” Id. at 508. The Court also made clear that “use” does not extend to situations “where an offender conceals a gun nearby to be at the ready for an imminent confrontation. . . . Placement for later a ctive use does not constitute ‘use.’” Id. at 508-09. It is clear that under the constructio n of “use” employed in Bailey , the evidence in this case is legally insufficientto support a conviction for using a firearm during and in relation to a drug tr afficking offense under section 924(c)(1). We thus turn to Mr. Holland’s argument that he is entitled to relief under section 2255. We have held that Baileyapplies retroactively to cases on collateral revie w. See United States v. Barnhardt , 93 F.3d 706, 708-09 (10th Cir. 1996). In so doing, we relied on Supreme Court authority holding that “a petitioner collaterally attacking his conviction should be given the benefi t of case law decided after his conviction when the conviction was ‘for an act thatthe law does not make criminal.’” Id. at 709 (quoting Davis v. United States , 417 U.S. 333, 346 (1974)). We also relied on United States v. Dashney , 52 F.3d 298 (10th Cir. 1995), in which we held that under Davis , “substantive changes in the law, as opposed to-5-

procedural changes, apply retroactively.” Barnhard t , 93 F.3d at 709. In light of those cases, we concluded: Baileyestablishes a new non-constitutional rule of subst antive law which may produce a different result under the fact s of this case than that dictated by prior law. In other words, action s that were criminal pre-Baileymay no longer be such. Therefore, we hold that Ba iley applies retroactively to convictions under 18 U.S.C . § 924(c)(1). Id. The conviction in Barnhardtwas the result of a guilty plea rather than a jury trial, however, and we pointed out that Bailey ’s application in those circumstances was not governed by cases applying Ba ileyfollowing a jury trial. Id. Because Mr. Holland was convicted by a jury, we t urn to the cases applying Baileyin those circumstances. As an initial matter, we recognize that a federal p risoner who has defaulted the claim he seeks to assert in a section 2255 moti on must ordinarily show cause for his default and actual prejudice resulting from the error he asserts. United States v. Shelton , 848 F.2d 1485, 1490 (10th Cir. 1988) (en banc). Shelton , like the present case, involved a section 2255 proceedin g asserting the retroactive application of a substantive non-constitutional dec ision of the Supreme Court narrowing the reach of a federal criminal statute. Id. at 1489. We noted in Shelton , id. at 1490 n.4, that because a conviction for conductthat is not criminal would result in a complete miscarriage of justice, see Davis , 417 U.S. at 346-47, a compelling argument can be made that a showing of c ause is not required. See-6-

Dashney , 52 F.3d at 299. We nevertheless assessed cause i n Shelton , as we do here. A petitioner has cause for having failed to raise aclaim when it had no reasonable basis in existing law, a standard satisf ied when “a Supreme Court decision overturns ‘a longstanding and widespread p ractice to which [the Supreme Court] has not spoken, but which a near-unanimous b ody of lower court authority has expressly approved.’” Shelton , 848 F.2d at 1490 (quoting Reed v. Ross , 468 U.S. 1, 17 (1984) (internal quotation omitted)). H ere, although the circuits had adopted various constructions of the “use” prong, s ee Bailey , 116 S. Ct. at 505, they were less stringent than that articulated in B aileyand the circumstances in this case would have satisfied virtually all of the m. Accordingly, we hold that Mr. Holland has shown cause for failing to raise th e claim earlier. We therefore must determine whether Mr. Holland has established actual prejudice resulting from the erroneous construction of “use” employed at trial. Mr. Holland was charged with both using and carryin g a firearm during and in relation to a drug trafficking offense. The trial court instructed the jury that:

To find use, it is not required that you find defen dant brandished or displayed or discharged the firearm; nor that the defendant had actual possession of either the firea rm or the drugs; nor that the firearm was loaded; nor that a drug tr ansaction occurred at the place where the drugs were found; nor that t he sole purpose of the firearm was to protect the drug operation. Use is established when the defendant has ready access to the firearm and the firearm was an integral part of his criminal undertaking an d its availability2 Mr. Holland has never asserted that this definitio n of “carry” under

section 924(c)(1) is erroneous. The instruction is clearly correct under our preBaileycases, which held “that the government is required to prove only that the defendant transported a firearm in a vehicle and th at he had actual or constructive possession of the firearm while doing so.” United States v. Miller , 84 F.3d 1244, 1259 (10th Cir.) (citing cases), cert. denied , 117 S. Ct. 443 (1996). The instruction is also proper after Baileyin view of our conclusion that “nothing in Bailey. . . conflicts with our pre-Bailey ‘vehicular carrying’ line of cases.” Id. at 1260. -7- increased the likelihood that the criminal undertak ing would succeed. The ready access element requires evidence that the firearm was available to the defendant in the vicinity where th e drug trafficking offense took place. However, to find use, you mustfind that the defendant actually and knowingly possessed the fire arm as possession is defined elsewhere in these instructio ns. Rec., vol. 5 at 449-50. This definition of “use” i s, of course, incorrect under Bailey

. However, the indictment charged that Mr. Holland “d id use and carry a firearm during and in relation to a drug traffickin g crime,” id. at 439 (emphasis added), and the court instructed the jury with resp ect to “carry” that:

[A] firearm may be carried simply by being carried in a vehicle as part of and in relation to a drug trafficking of fense, so long as the defendant actually and knowingly possessed or inten tionally had dominion and control over the weapon, by himself ortogether with another in the vehicle, while committing a drug tra fficking offense. Id. at 450. 2 On appeal, the government contends that Mr. Holla nd is unable to show the requisite prejudice to support collateral relief because the evidence was sufficient to sustain his conviction for carrying u nder a proper instruction. We-8-

agree that Mr. Holland is not entitled to relief, a lthough we reach our conclusion on a different ground than that urged by the govern ment. We are guided in our analysis by Justice Scalia’s c oncurring opinion in California v. Roy , 117 S. Ct. 337 (1996) (per curiam). The Court th ere, as here, was concerned with “an error in the instruction that defined the crime.” Id. at 339. In assessing whether this error required reve rsal of the conviction, Justice Scalia stated that a criminal defendant is constitutionally entitled t o a jury verdictthat he is guilty of the crime, and absent such a verdic t the conviction must be reversed, “no matter how inescapable the fi ndings to support that verdict might be.” A jury verdict that he is guilty of the crime means, of course, a verdict that he is guilty of each necessary element of the crime. Id. (Scalia, J., concurring) (quoting Sullivan v. Loui siana , 508 U.S. 275, 279 (1993)). Justice Scalia then explained:

The absence of a formal verdict on this point can n ot be rendered harmless by the fact that, given the evide nce, no reasonable jury would have found otherwise. To allow the erro r to be cured in that fashion would be to dispense with trial by jury. “The Sixth Amendment requires more than appellate speculation about a hypothetical jury’s action, or else directed verdic ts for the State would be sustainable on appeal; it requires an actu al jury finding of guilty.” The error in the present case can be harm less only if the jury verdict on other points effectively embraces this o ne or if it is impossible, upon the evidence, to have found what t he verdict did find without finding this point as well. Id. at 339-40 (quoting Sullivan508 U.S. at 280). This analysis informs our3 We recognize that the Court in California v. Roy , 117 S. Ct. 337 (1996)

(per curiam), was addressing the standard to determ ine whether an error in a state trial entitled the petitioner to relief under 28 U. S.C. § 2254. We nonetheless believe Justice Scalia’s concurrence sheds light on our assessment of prejudice here. Justice Scalia’s concurrence clarifies the d istinction between errors in instructions on the elements of the crime for which the “harm” is a lack of a jury verdict on an element, and the more typical brand o f trial error for which the “harm” is insufficient legally permissible evidence to support a verdict actually rendered. To determine if errors in the first cate gory are harmless, one must look to whether there was a proper verdict in fact (even if not in form). We note that Justice Scalia’s rationale is wholly consistent wit h the Supreme Court’s analysis in Johnson v. United States , 117 S. Ct. 1544, 1550 (1997), in which the Court held that lack of a jury verdict on an element did not warrant reversal for plain error where the evidence on the element was “overwh elming” and “essentially uncontroverted.” The Court reached that result bec ause under those circumstances, the lack of an actual jury verdict d id not “seriously affect the fairness, integrity or public reputation of judicia l proceedings” as required under the fourth prong of the plain error test of United States v. Olano , 507 U.S. 725 (1993). The Court assumed that the defendant had satisfied the third prong of Olano by demonstrating the error affected substantial ri ghts, i.e. was harmful. Justice Scalia’s concurrence in Royprovides guidance on the inquiry used to determine if an instructional error affects substan tial rights under the third prong of Olano , just as it provides guidance to our analysis here of actual prejudice in the habeas context. -9- assessment of prejudice in the present case. 3 We must ascertain whether the jury here in effect found the elements necessary to sust ain a conviction for carrying under section 924(c)(1). Our task is complicated b y the fact that Mr. Holland was convicted under an erroneous “use” instruction and a proper “carry” instruction. In United States v. Miller , 84 F.3d 1244, 1256-61 (10th Cir.), cert. denied , 117 S. Ct. 443 (1996), we considered on direct appe al the situation in which a defendant had been charged with both using and carrying a firearm under section-10-

924(c)(1) and had been tried and convicted on a jury instruction that defined “use” improperly under Bailey . We noted that:

If the substantive law allows the jury to convict adefendant for an offense, here a violation of 18 U.S.C. § 924 (c)(1), based on either of two alternative grounds, here that [the d efendant] either “used” or “carried” the firearms, and the district court correctly instructs the jury regarding each ground, we must a ffirm the conviction if there is sufficient evidence to suppo rt it under either of the alternative grounds, even if there is not suffi cient evidence to support the conviction under one of them. Id. at 1257. We held that the above analysis does notapply, however, when “the instruction defining one of the two alternative gro unds for conviction was legally erroneous, . . . unless we can determine with absol ute certainty that the jury based its verdict on the ground on which it was correctly instructed.” Id. We explained that this approach is required because “‘[j]urors a re not generally equipped to determine whether a particular theory of conviction submitted to them is contrary to law,’ and may have intended to convict the defen dant on a legally invalid ground while rejecting the evidence supporting the legally valid one.” Id. (quoting Griffin v. United States , 502 U.S. 46, 59 (1991)); see also United States v. Smith , 82 F.3d 1564,1567 (10th Cir. 1996). The Milleranalysis is equally applicable to this section 225 5 motion. If the jury could have convicted Mr. Holland solely on the legally invalid ground, he would have been convicted for conduct the law does not make criminal and would therefore establish the requisite prejudice for rel ief. The fact that the evidence-11-

was sufficient to support a conviction on the legal ly valid ground does not eliminate this possibility or the resulting prejudi ce unless we can be assured the jury did in fact rely on the valid ground, or unles s, in convicting Mr. Holland, the jury necessarily made the findings required to supp ort a conviction on the valid ground. In this case, the gun providing the basis for the s ection 924(c)(1) conviction was located under the front passenger seat of a carowned and driven by Mr. Holland. The jury necessarily found these facts as predicates for its finding of possession, a finding that was a requisite part of the “use” conviction under the court’s instructions. The court thus instructed th at Mr. Holland had to “possess” the weapon in order to be guilty of either using orcarrying it, and defined possession as follows:

The law recognizes two kinds of possession: actual possession and constructive possession. A person who knowingl y has direct physical control over a thing, at a given time, is then in actual possession of it. A person who, although not in actual possession, kn owingly has both the power and the intention at a given tim e to exercise dominion or control over a thing, either directly o r through another person or persons, is then in constructive possessi on of it. The law recognizes also that possession may be sole or joint. If one person alone has actual or constructive poss ession of a thing, possession is sole. If two or more persons share a ctual or constructive possession of a thing, possession is j oint. However, remember that merely [being] present with others wh o had possession is not possession. The government must prove that a particular defendant knew that he had either actual or constru ctive possession of the firearm.-12-

Rec., vol. 5 at 450-51. Mr. Holland has not challe nged this instruction and it was not at issue in the Supreme Court’s Bailey opinion. The district court also correctly instructed the ju ry that the government was required to prove “the defendant used or carried th e firearm in relation to and during a drug trafficking crime.” Id. at 445. The “use” instruction, while improper in other respects under Bailey , required the government to prove that “the firearm was an integral part of [Mr. Holland’s ] criminal undertaking and its availability increased the likelihood that the crim inal undertaking would succeed.” Id. at 449. The “carry” instruction similarly address ed the “during and in relation to” element by requiring that the defen dant carry the gun “while committing a drug trafficking offense.” Id. at 450. Mr. Holland has not challenged the “during and in relation to” aspects of the section 924(c)(1) instructions and that element likewise was not at i ssue in Bailey

. The jury findings required by the instructions, tak en together, establish the elements of carrying a firearm under section 924(c) (1). The jury necessarily found that the gun was being transported in the veh icle owned and operated by Mr. Holland, that Mr. Holland possessed the gun, an d that he did so during and in relation to a drug trafficking offense, all finding s it was required to make under the instructions for either a “using” or “carrying” conviction. These findings were made under proper instructions, unaffected by Bailey , and supported by-13-

sufficient evidence. Because the necessary jury fi ndings together satisfy all the requirements needed to support a conviction for car rying a firearm during and in relation to a drug trafficking crime, Mr. Holland h as failed to show he was convicted for conduct that the law does not make cr iminal. He is therefore not entitled to relief under section 2255. This case is analogous to United States v. Richards on , 86 F.3d 1537 (10th Cir.), cert. denied , 117 S. Ct. 588 (1996), in which the defendant, wh o was arrested while driving a vehicle, had a gun in his left rear pocket and another gun in the front seat of the truck he was driving. Alt hough these facts were legally insufficient to satisfy the “use” standard under Ba iley , they did establish the defendant was carrying the firearms within the mean ing of section 924(c)(1), id. at 1548. The critical dispute left for the jury to resolve was whether he did so during and in relation to a drug trafficking offens e, a finding the defendant challenged on appeal as unsupported. Because “duri ng and in relation to” is an element of both “using” and “carrying,” in finding the defendant guilty the jury necessarily had to have found that his actions with respect to the firearms were taken during and in relation to drug trafficking. Although the defendant argued the evidence was insufficient to support this findi ng, he did not assert that the jury was erroneously instructed on this element and we concluded the evidence was sufficient. As we have pointed out, the “durin g and in relation to” element4 In reaching this conclusion, we hold that an errone ous “use” instruction

does not require reversal of the conviction when th e jury was also instructed without objection on “carry,” the defendant did notdispute that the firearm was carried on his person or in his vehicle, and the ju ry verdict necessarily includes an inherent finding of “carrying during and in relatio n to the drug crime.” The essential inquiry is whether the jury’s verdict, un der the instructions given and the nature of the evidence, required the jury to find a ll the elements of a “carrying” violation, or stated another way, whether the verdi ct was the functional equivalent of such a finding. We must be convinced that it wa s impossible upon the evidence and instructions for the jury to have retu rned a “use” conviction without finding all the elements of a “carrying” violation as well. Other circuits have articulated comparable standards by which they eval uate whether a Baileyerror requires reversal. See , e.g. , United States v. Windom , 103 F.3d 523, 524 (7th Cir. 1996) (section 924(c)(1) convictions should be affi rmed despite erroneous “use” definition “if the undisputed facts necessarily fou nd by the jury amounted to the ‘functional equivalent’ of a finding that the defen dant had carried a weapon”); United States v. Pimentel , 83 F.3d 55, 60 (2d Cir. 1996) (new trial not requ ired despite erroneous “use” instruction if, in light of other instructions and the evidence, the findings the jury necessarily made ar e the “functional equivalent” of required findings for a “carry” conviction); United States v. Moore , 76 F.3d 111, 112 (6th Cir. 1996) (Baileyerror requires reversal of conviction unless “the jury necessarily based its verdict on conduct that, afte r Bailey , is still considered criminal”). The results in some of our prior cases are contrary to the analysis and holding set out here. See , e.g. , United States v. DeSantiago-Flores , 107 F.3d 1472 (10th Cir. 1997); United States v. Miller , 84 F.3d 1244 (10th Cir. 1996). In both cases, the jury was instructed to convict if t he defendant either used or carried a firearm, and we concluded that the giving of an erroneous “use” (continued...) -14- was not affected by the holding in Bailey . In Richardson , because the findings necessarily made by the jury established the elemen ts of carrying a firearm during and in relation to a drug crime under section 924(c )(1), no retrial was necessary. The same is true here. Mr. Holland has failed to s how he was prejudiced by the Baileyerror. 44 (...continued)

instruction required reversal of the conviction. T he issue under the analysis we adopt today, however, is whether the jury verdict u nder the instructions given established that the jury necessarily found all the elements of a “carrying” offense. In both DeSantiago-Flores and Millerthe only facts linking the defendant to the gun, and thus facts that the jury had to have found to convict under § 924(c)(1), were possession and transportati on of the firearm during the drug offense. Because the jury even under pre-Bail eylaw had to find that these facts occurred during and in relation to a drug off ense to convict under either the “use” or “carry” prong, the jury verdict in those c ases necessarily embraced all the elements of a “carrying” violation. The resultin DeSantiago-Flores and Millerwould therefore be different under the analysis we use here. We have circulated this footnote to the en banc cou rt, which has unanimously agreed that to the extent any of our ea rlier cases can be viewed as inconsistent with our holding here, they are overru led. -15- We AFFIRM the judgment of the district court denying relief under section 2255.