Opinion ID: 778825
Heading Depth: 2
Heading Rank: 1

Heading: Drug Quantity Approximation

Text: 21 The applicable sentence range for both drug trafficking and maintaining a drug house depends upon the amount of drugs involved. See U.S.S.G. §§ 2D1.1(c) (Nov. 1, 2001) & 2D1.8(a) (Nov. 1, 2001). Where the amount of drugs seized does not reflect the scale of the offense, the district court may approximate the quantity of the drugs. Id. § 2D1.1, comment (n. 12); August, 86 F.3d at 154. 22 Approximations of drug quantity must meet three criteria. First, as with all factors which increase a defendant's offense level, the government is required to prove the approximate quantity by a preponderance of the evidence. August, 86 F.3d at 154. The district court must `conclude that the defendant is more likely than not actually responsible for a quantity greater than or equal to the quantity for which the defendant is being held responsible.' Id. (quoting United States v. Walton, 908 F.2d 1289, 1302 (6th Cir.1990)). Second, the information which supports an approximation must possess `sufficient indicia of reliability to support its probable accuracy.' Id. (quoting U.S.S.G. § 6A1.3(a)). Third, since a defendant's sentence depends in large part upon the amount of drugs attributable to his conduct, and approximation is by definition imprecise, the district court must err on the side of caution in calculating approximated drug quantity. Id. Because approximation prescribes punishment for unconvicted conduct, courts must proceed carefully ... in the estimation of drug quantities. United States v. Scheele, 231 F.3d 492, 498 (9th Cir.2000). A district court's failure to consider the margin of error when arriving at the quantity of drugs on which the sentence was based constitutes error. Id. at 500. 3 23 This case illustrates the profound impact a determination of drug quantity by the district court can have on a defendant's sentence. The total marijuana actually seized in the entire three-year investigation comprised less than one kilogram. The district court sentenced Culps as if a jury had convicted him of selling 80 to 100 kilograms of marijuana. As a result, Culps' base offense level under the Sentencing Guidelines increased threefold, from 8 to 24, and the applicable sentencing range rose from 10-16 months to 78-97 months.
24 The aforementioned criteria apply to any method of approximation, including the multiplier method used here. Under the multiplier method, the district court accounts for the defendant's behavior over time by determining a daily or weekly quantity, selecting a time period over which it is more likely than not that the defendant was dealing in that quantity and multiplying these two factors together. See August, 86 F.3d at 155. Although other circuits have approved of the multiplier method, United States v. Paulino, 996 F.2d 1541, 1548 (3d Cir.1993); United States v. Walton, 908 F.2d 1289, 1302 (6th Cir.1990), and we have cited those cases with approval, Scheele, 231 F.3d at 498; August, 86 F.3d at 154, we have not previously had occasion to hold that the multiplier method is one permissible method of approximating drug quantity. 4 We do so now. Provided that the approximation has a reliable evidentiary basis and that the court proceeds with caution, a court may approximate drug quantity for sentencing purposes by multiplying an estimated daily or weekly quantity by an applicable period of time. The district court did not err by choosing to employ the multiplier method here. We thus consider whether the three numbers the court plugged into the formula are clearly erroneous.
25 The first of those numbers, one quarter-ounce as the average transaction size, cannot be sustained. The district court did not identify the information upon which it relied in adopting the quarter-ounce estimate. We see two possible sources of that information — the PSR and the government's nine controlled purchases. Whether the district court relied on either of these sources of information or both, we conclude that the quarter-ounce estimate lacks a reliable evidentiary basis and must therefore be rejected as clearly erroneous. The information supporting that estimate was either not sufficient or was not sufficiently reliable. 26
27 The first possibility is that the district court adopted the quarter-ounce estimate directly from the PSR. If it did so, the court's finding cannot be sustained. Although the court may adopt the factual findings of the presentence report ... [i]t may not ... adopt conclusory statements unsupported by facts or the Guidelines. United States v. Navarro, 979 F.2d 786, 789 (9th Cir.1992); see United States v. Garcia-Sanchez, 189 F.3d 1143, 1149 (9th Cir.1999) (reversing estimate of conspiracy's weekly drug sales where government offered only agent's unexplained conclusions that did not contain sufficient indicia of reliability to support its probable accuracy). The PSR contained only a conclusory statement that the average transaction size was one quarter of an ounce. The factual underpinning for that assertion, if any, was not explained. Rather, the PSR promised that the government plans to present testimony to the Court at the time of sentencing that ... an average of a quarter-ounce of marijuana was distributed per transaction. The government failed to deliver on that promise.
28 In the alternative, we can assume the district court adopted the quarter-ounce estimate based on the quantities associated with the nine marijuana purchases controlled and executed by government agents and informants. Although it is not clear what evidentiary basis the government advanced below, on appeal the government emphasizes the controlled buys as the basis upon which we could sustain the estimate. We disagree that these few buys do so. 29 The use of nine buys to estimate the 60,250 transactions the government says took place is statistically and legally unreliable. Without information showing that the sample purchases are representative of the larger conduct, there is an inadequate evidentiary basis for the quarter-ounce estimate. See United States v. Rivera-Maldonado, 194 F.3d 224, 231 (1st Cir.1999) (holding that estimating the average drug transaction size of 86,400 transactions by using a sample of 12 controlled buys was improper); see also United States v. Shonubi, 103 F.3d 1085, 1092 (2nd Cir.1997) (holding it was error to use a sample of four balloons to estimate the total weight of heroin found in 103 balloons); United States v. Butler, 41 F.3d 1435, 1447 (11th Cir.1995) (rejecting average of 66 transactions per day based solely on a single day's 66 transactions where there was no evidence that single day was typical or average or otherwise a valid indicator of drug activities on other days); United States v. Collado, 975 F.2d 985, 998 (3d Cir.1992) (overturning a finding that telephone calls regarding heroin transactions must have referred to a sale of at least 62.5 grams because the defendants dealt in quantities of at least that amount on other occasions); United States v. Hewitt, 942 F.2d 1270, 1274 (8th Cir.1991) (disapproving of using defendant's admission that he brought 112 grams during certain trips to conclude that other trips also involved 112 grams); cf. U.S.S.G. § 2D1.1, comment (n.12) (permitting district court to consider  similar transactions in controlled substances by the defendant to approximate drug quantity (emphasis added)). The government presented no evidence that the nine controlled transactions typified the alleged 60,241 other marijuana purchases. Indeed, other evidence at trial and in the PSR undercut the quarter-ounce estimate. One of the government's confidential informants testified that he bought marijuana from Culps five times in amounts less than a quarter-ounce. Further, during the search of the residence, the government found 25 small, prepackaged bags of marijuana with an amount of marijuana that apparently was too small to weigh. 30 That the sample represents buys controlled by the government, in which the government established the quantity, amplifies our misgivings. See Rivera-Maldonado, 194 F.3d at 232 (holding there was insufficient evidence to conclude that controlled buys by government agents were representative of the average drug purchaser); cf. U.S.S.G. § 2D1.1, comment (n.14) (recognizing that the use of quantities controlled by the government to approximate drug quantity may not accurately reflect a defendant's culpability). The government possesses considerable monetary resources and an incentive to buy as much marijuana as it can from the targets of its investigation. Indeed, on several occasions, undercover officers attempted to buy much larger, quarter-pound quantities of marijuana from the Culps residence. Although we do not suggest that the respective drug-type quantities indicated in these controlled buys must be disregarded merely because they were controlled by the government, we do say that the necessary factual inference — that these controlled buys were reasonably representative of the uncontrolled drug transactions ... — should find discernible record support that is lacking here. Rivera-Maldonado, 194 F.3d at 232. 5 31 We therefore hold that the district court's use of a quarter-ounce of marijuana as an average transaction size constituted clear error. Culps' sentence must be vacated and the case remanded to the district court. Because additional issues raised by Culps' appeal may arise on remand, we address them next.
32 The remaining two numbers plugged into the multiplier formula were 50 transactions per day and 1205 days. The district court adopted each of these estimates from the PSR, but halved the resulting approximation — the total quantity produced by multiplying the three factors — before designating a final drug quantity of 80 to 100 kilograms. In determining whether the 50-transactions-per-day and 1205 days estimates can be sustained, we take into consideration the district court's application of a 50% discount to account for evidence indicating that the government's estimate was excessive. We begin with the 50 transactions per day estimate. 33 We conclude that the estimation of 50 transactions per day was supported by sufficient and reliable information. Although the neighbors gave varying estimates of the numbers of cars in the neighborhood, much of the deviation can be explained by the neighbors' differing vantage points and schedules. Balch's estimate of 30 to 50 vehicles per night is not inconsistent with the testimony of Dorais and Broderson, each of whom observed a somewhat greater number of cars per day — 50 to 60 trips in the case of Dorais and 75 to 125 trips in the case of Broderson. Considering that Balch's testimony referred only to a portion of the day, and that the district court reasonably could have inferred that the higher estimates represented full-day activity, it was reasonable to adopt the 50 transactions per day figure. 34 Given the unusual circumstances of this case — in particular, the sparsely populated rural setting — the district court also reasonably relied on vehicular traffic in the neighborhood as a proxy for the number of marijuana transactions occurring at the Culps residence. The neighbors' testimony created an adequate link between the cars in the neighborhood and the Culps residence, and motorists' brief layovers at the Culps residence supported a reasonable inference that they were buying drugs. As all three witnesses agreed, the automotive traffic in the neighborhood slowed to a trickle after Culps and his brother were arrested. 35 The court's application of a 50% discount — a portion of which was allocated to uncertainties in the number of transactions per day — properly erred on the side of caution. The discount accounted for the margin of error in each neighbor's estimate and for the fact that not every prospective customer would have been successful. Narcotics officers attempting to purchase marijuana were unable to consummate controlled buys in one-quarter of their attempts. As the district court acknowledged, two of the neighbors also recalled seeing signs stating out of product, closed or sold out on some occasions.
36 When the multiplier method is used to approximate drug activity over time, the court must select a time period over which it is more likely than not that the defendants were dealing in the average daily or weekly quantity. See August, 86 F.3d at 155. To establish that illegal activity was continuous between Point A and Point B, it is not enough simply to establish that drug sales occurred at Points A and B, at least where A and B are not close enough in time to infer [that the defendants] were dealing on a regular basis in the interim. Walton, 908 F.2d at 1302. This principle is illustrated by Walton, where the Sixth Circuit reversed a drug approximation using the multiplier method because the government had failed to establish continuous illegal activity between drug sales that took place in 1986 and drug paraphernalia found during a search of defendants' home in 1988. Without evidence filling the two-year gap, the evidence was simply insufficient to support a finding of continuous drug dealing during this period. Id. at 1303. 37 As in Walton, the investigation here involved extended intervals between controlled buys — an extraordinary 28 months in one instance and nine months in another. To overcome these gaps, the government once again presses the neighbors' trial testimony into service. The neighbors' reports constitute some evidence that the Culpses regularly sold marijuana during the 1205-day period. Balch was asked to describe the traffic at least for the two or three years preceding execution of the warrant. His answer of 30 to 50 cars per night spans a period of time corresponding to a portion of the period charged in the indictment. Broderson's testimony that the traffic had been heavy for quite a few years and that it's always been heavy furnishes some underpinning for the district court's finding of continuous operation. The direct evidence of continuous dealing also was stronger here than it was in Walton. Agents' contacts with the Culps residence, although marked by large intervals, were nonetheless numerous. The search, moreover, turned up not just drug paraphernalia, but tell-tale signs of large-volume marijuana dealing. The controlled buys occurring in 1996 and 1998-99 and the physical evidence seized in June 1999 bolster the district court's conclusion. 38 Nonetheless, we must conclude that the evidence was insufficient to establish continuous operation during the period charged in the indictment. Even if Balch's testimony is read in the light most favorable to the government, it does not fully bridge the gap in the government's investigation. Broderson's testimony was simply too vague to establish a reliable evidentiary basis for the district court's conclusion. The direct evidence of drug sales in 1996 and 1998-99 is not sufficient to establish continuous operation in the intervening two years. In short, the neighbors' trial testimony was not tailored to sentencing and the evidence that the government produced at sentencing did not establish continuous operation. On this record, we cannot sustain the district court's finding that Culps' drug business operated for 1205 days. 39 The district court's use of a 50% discount cannot cure the approximation's evidentiary defects. As a general matter, we follow the Third and Sixth Circuits and approve of the use of a discount in multiplier cases to account for uncertainties and satisfy the district court's duty to err on the side of caution. The 50% discount is an appropriate tool in the right case. See Walton, 908 F.2d at 1302 (approving of the district court's halving of the government's estimate as necessary to give effect to the court's duty to err on the side of caution and as constitutionally required to prevent excessive sentences); Paulino, 996 F.2d at 1548 (The halving of [the government's proposed amount], rather than being arbitrary, is, instead a reasonable calculation by the district court, erring on the side of caution, to take into consideration `off' days and days in which perhaps lesser sales occurred.). If the evidence here had supported continuous operation, the 50% reduction would have been an appropriate mechanism to account for the margin of error in the number of days drugs were sold, including off days, days in which the Culpses were out of product, snow days, days Culps was in custody and other uncertainties. The district court's 50% reduction, however, cannot substitute for sufficient and reliable evidence that marijuana more probably than not was sold on 1205 days, an estimate that presumes, without an adequate evidentiary foundation, continuous operation during the extraordinary investigatory lapses. See Walton, 908 F.2d at 1302-03 (approving of the district court's 50% discount but nonetheless vacating its approximation where the government failed to establish continuous drug dealing). 40