*This matter is being decided by a quorum. 28 U.S.C. § 46(d).

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 97-20911

Conference Calendar

_____________________

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

LOUIS GUZMAN GAITAN,

Defendant-Appellant.

________________________________________________________________

Appeal from the United States District Court

for the Southern District of Texas

_________________________________________________________________

March 24, 1999

Before BARKSDALE and EMILIO M. GARZA, Circuit Judges.*

BY THE COURT:

Louis Guzman Gaitan pleaded guilty to conspiracy to possess

with intent to distribute heroin. In his plea agreement, he waived

the right to appeal his sentence unless it was based on an “upward

departure” from the Sentencing Guidelines.

Douglas M. Durham was appointed to represent Gaitan on appeal.

Although the district court did not make an upward departure,

Gaitan, represented by Durham, challenged the two-level increase in

Gaitan’s base offense level, imposed pursuant to U.S.S.G. §

3B1.1(c), for Gaitan’s role in the offense. Nor did Gaitan file a
- 2 -

reply brief in response to the assertion by the Government that the

waiver precluded the appeal.

Based on the waiver, we dismissed Gaitan’s appeal as

frivolous. And, we ordered Durham to show cause why sanctions

should not be imposed against him for pursuing Gaitan’s appeal in

the light of Gaitan’s waiver and for failing to address the waiver

in the appellate brief.

In response to the show-cause order, Durham asserts that he

viewed the issue raised by Gaitan (claimed error for increasing

Gaitan’s offense level by two levels for his role in the offense)

as falling within the exception to the waiver of appeal language in

the plea agreement (for “upward departures” from the Sentencing

Guidelines). He states that he did not address the waiver in his

brief because he did not perceive it to be in issue. 

Durham maintains that he treated the “upward adjustment” to

Gaitan’s offense level as an “upward departure”, based on our

court’s statement in United States v. Perkins, 105 F.3d 976 (5th

Cir. 1997), that “there is ‘little functional difference’ between

an enhancement and an upward departure”. Id. at 980-81 (quoting

United States v. Knight, 76 F.3d 86, 88 (5th Cir. 1996)). 

Although Durham is correct that our court has stated that

there is little functional difference between an increase in

offense level and an upward departure, we nevertheless have

recognized that there are important differences. For example, the
- 3 -

district court must give a defendant notice of its intention to

depart upward on a ground not identified as a ground for upward

departure either in the presentence report (PSR) or in a prehearing

submission by the Government. See Burns v. United States, 501 U.S.

129, 138-39 (1991). But, such notice is not required for an upward

adjustment to the offense level, because “[t]he Guidelines

themselves put defense counsel on notice that all possible grounds

for enhancement or reduction are on the table at a sentencing

hearing”. United States v. Knight, 76 F.3d 86, 88 (5th Cir.)

(district court not required to give defendant notice that it is

considering rejecting PSR’s recommendation for decrease in offense

level for acceptance of responsibility and imposing two-level

adjustment for obstruction of justice), cert. denied, 518 U.S. 1011

(1996).

Perkins, which cited Knight for the proposition that there is

little functional difference between an upward adjustment and an

upward departure, does not support Durham’s position. At issue in

Perkins was the propriety of an increase in Perkins’ offense level

pursuant to § 3B1.1(c), which authorizes a two-level increase in

the offense level “[i]f the defendant was an organizer, leader,

manager, or supervisor in any criminal activity” involving less

than five participants. U.S.S.G. § 3B1.1(c). (Gaitan’s appeal

similarly challenges a § 3B1.1(c) upward adjustment; the adjustment

was based on Gaitan’s supervision of two individuals who delivered
- 4 -

heroin pursuant to his instructions.) The commentary to § 3B1.1

states:

To qualify for an adjustment under this

section, the defendant must have been the

organizer, leader, manager, or supervisor of

one or more other participants. An upward

departure may be warranted, however, in the

case of a defendant who did not organize,

lead, manage, or supervise another

participant, but who nevertheless exercised

management responsibility over the property,

assets, or activities of a criminal

organization.

U.S.S.G. § 3B1.1, comment. (n.2) (emphasis added). Perkins

asserted, for the first time on appeal, that his management of

assets of the organization did not warrant an upward departure.

Our court stated that, because Perkins did not exercise

control over another participant, the district court erred by

enhancing Perkins’ sentence under § 3B1.1(c). Nevertheless, it

exercised its discretion not to correct the error, because the

district court “could have validly departed upward based upon

[Perkins’] management of the organization’s assets”, and Perkins

had notice that the increase would be considered. Id. at 980-81.

For § 3B1.1(c), other cases have also distinguished between

upward adjustments and upward departures. In United States v.

Jobe, 101 F.3d 1046 (5th Cir. 1996), cert. denied, ___ U.S. ___,

118 S. Ct. 81 (1997), the district court increased Novoa’s offense

level by two levels pursuant to § 3B1.1(c). Our court vacated the

sentence, because Novoa did not manage or supervise any other
- 5 -

criminal participant in the check kiting scheme. However, our

court noted that its decision was “without prejudice to the

possibility that an upward departure for Novoa’s management

responsibility over the assets involved in the check kiting might

be warranted”. Id. at 1068.

A similar distinction was recognized in United States v.

Giraldo, 111 F.3d 21 (5th Cir.), cert. denied, ___ U.S. ___, 118 S.

Ct. 322 (1997). There, the district court increased the

defendant’s offense level by two levels pursuant to § 3B1.1(c),

based on the defendant’s obtaining the $180,000 that completed the

drug transaction. Our court stated:

Insofar as the district court relied on the

asset management exception to make an upward

adjustment to the offense level, it misapplied

the guidelines. That exception clearly

applies to an upward departure only. The PSR

expressly concludes that there were no

aggravating or mitigating circumstances that

would merit consideration for a departure in

this case.

Id. at 24 (emphasis added). Nevertheless, our court did not vacate

the sentence, because it concluded that the district court would

have imposed the identical sentence based on the defendant’s role

as an organizer of other criminal participants.

Accordingly, counsel’s reliance on the functional similarity

between “upward adjustments” and “upward departures” to justify

pursuing this appeal in the light of Gaitan’s waiver of the right

to appeal in the absence of an upward departure, is quite
- 6 -

misplaced. At the very least, he should have explained such

reliance in his brief. And counsel certainly should have filed a

reply brief. 

IT IS ORDERED that, as a sanction for pursuing this appeal

contrary to the waiver, Durham shall not receive any payment for

services rendered and expenses incurred in this appeal.

SO ORDERED