Opinion ID: 4389139
Heading Depth: 2
Heading Rank: 1

Heading: The “Stash-House” Enhancement

Text: Mr. Lozano first argues that the district court erred in applying a two-level sentencing enhancement under U.S.S.G. § 2D1.1(b)(12), which increases a defendant’s base offense level two points if he “maintained a premise for the purpose of manufacturing or distributing a controlled substance.” The government must prove this by a preponderance of the evidence. See, e.g., United States v. GambinoZavala, 539 F.3d 1221, 1228 (10th Cir. 2008). Both parties agree that the evidence here concerns only drug distribution (not manufacturing). The commentary to § 6 2D1.1(b)(12), which is authoritative, explains that “distributing a controlled substance need not be the sole purpose for which the premises was maintained, but must be one of the defendant’s primary or principal uses for the premises, rather than one of the defendant’s incidental or collateral uses for the premises.” § 2D1.1, cmt. n.17; see also United States v. Murphy, 901 F.3d 1185, 1190 (10th Cir. 2018). This determination of “primary” use requires consideration of the frequencies of the lawful and unlawful activity at the premises. § 2D1.1, cmt. n.17; see Murphy, 901 F.3d at 1191. And the frequent/substantial metric is a reciprocal sliding scale. A substantial drug distribution that regularly and quickly passes through the home (two or three days) on a bi-monthly or tri-monthly basis may qualify as a primary use of the premises for drug-related purposes much the same as an exquisitely frequent, but relatively paltry, operation. Id. In the same way that a residence is considered to be a home 100% of the time even when not occupied 100% of the time, a home may be used for the primary purpose of unlawful drug activity even when such activity is not constant. Id. The analysis comes down to a ‘totality of the circumstances’ evaluation, which includes: (1) the frequency and number of drugs sales occurring at the home; (2) the quantities of drugs bought, sold, manufactured, or stored in the home; (3) whether drug proceeds, employees, customers, and tools of the drug trade (firearms, digital scales, laboratory equipment, and packaging materials) are present in the home, and (4) the significance of the premises to the drug venture. Id. at 1191–92. The facts found to be sufficient to support an enhancement in one case may not be necessary to support that enhancement in other cases. See id. at 1195. 7 The district court explained that Mr. Lozano had no reason to finance the Josephine house other than for facilitation of the drug-distribution network. Although Mr. Lozano leased and paid the utilities at the Josephine house, the court found that it was not Mr. Lozano’s living place. In so doing, the court noted that “[w]ith respect to the presentence report, as well as the [] bail report, there are addresses listed that he lives at, where his wife lives, where his family lives. This place doesn’t show up as among that list.” Aplt. Aplt. App. at 115. The court rejected as unsupported Mr. Lozano’s proffered explanation of using the house to charitably host relatives, noting that “[h]e is not, drugs aside, a wealthy man. There’s no reason to believe that he is using this as a familial house.” Id. at 86. Accordingly, the district court found that Mr. Lozano could have no logical primary interest for the house “other than a place where these drug loads [were] brought, unloaded, replaced with money and moved on.” Id. at 85–86. Mr. Lozano challenges these factual findings on appeal. He argues that the premises were not maintained by him but by Mr. Lara-Gallegos, and that other facts such as the lack of drug paraphernalia found in Mr. Lozano’s storage unit plus his familial relationship with Mr. Lara-Gallegos compel the conclusion that he was primarily using the house as a home and not for drug distribution. But the district court’s factual findings are supported by the record, and Mr. Lozano’s presentation of different facts as forming a different view of the evidence cannot undermine the district court’s plausible account. First, as the government aptly notes on appeal, a defendant’s day-to-day control of a property is only one part of the inquiry as to 8 whether he maintained that property. See § 2D1.1, cmt. n.17. This comment to § 2D1.1 first asks whether the defendant owned or rented the place, which Mr. Lozano unquestionably did. The inquiry also includes “the extent to which the defendant controlled access to” the premises; here, Mr. Lozano controlled who resided in the house in his absence (Mr. Lara-Gallegos) and he provided vehicles enabling access to and from the premises to both this resident and Mr. Molina-Villalobos, a regular visitor. Id. The record supports the district court’s finding that Mr. Lozano “maintained” the premises. Second, the district court properly looked to both the size and scope of Mr. Lozano’s use of the house for cocaine distribution in determining that this was a primary use. See Murphy, 901 F.3d at 1192 (“But looking to both the size and the scope of the drug-related use of the home . . . ensures the enhancement will not apply when that use is truly ‘incidental.’”). Employing logic analogous to the sliding scale described in Murphy, the district court recognized that in the same way a constant flow of people through the house to pick up paltry quantities of drugs is consistent with a primary use for distribution, so is fewer uses of the house that are individually greater in magnitude. Considering the scale of the drug loads being moved through the house, the court explained that “you have to look at, kind of, the nature of the enterprise that we're talking about. What we're talking about is multiple kilogram loads, very large. We're not talking about retail sales and retail distribution.” Aplt. App. 82. 9 Moreover, the district court found that the frequency of the transactions using the house likewise supported the application of the sentencing enhancement. It inferred that these transactions were more numerous than the two specifically outlined, supporting this inference by citing stipulated facts such as Mr. MolinaVillalobos’s statements about the house receiving drug shipments from “various” people, which the court interpreted as meaning “more than two.” Id. at 86; see also id. at 83–84 (“[T]here’s no suggestion, no reasonable interpretation of these facts, that suggests that there was drug activity, and then it, for some reason, stopped during the entirety of the time of the Josephine house ownership . . . . That’s not consistent with the recurring nature of the loads.”). The court explained that it was looking at the totality of the circumstances, stating that “I take [the facts] as a picture, and what that picture says is, recurring use of that house . . . .” Id. at 86. Based on all of the circumstances, the court found it more likely than not that Mr. Lozano maintained the residence for the purpose of distributing cocaine. Given the evidence discussed above, we cannot say that the district court clearly erred in so finding.