Court Opinion

ID: 770553
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:36:20+00
Date Added: 2024-06-11T08:22:02.037050
License: Public Domain

227 F.3d 886 (7th Cir. 2000)
United States of America, Plaintiff-Appellee,v.Gary J. Eschman, Defendant-Appellant.
No. 00-1395
In the  United States Court of Appeals  For the Seventh Circuit
Argued June 8, 2000Decided September 14, 2000

Appeal from the United States District Court  for the Southern District of Illinois.  No. 99-30066-DRH--David R. Herndon, Judge.[Copyrighted Material Omitted]
Before Easterbrook, Kanne, and Williams, Circuit  Judges.
Williams, Circuit Judge.

1
Gary J. Eschman pleaded  guilty to several drug-related charges and a gun  charge. Rejecting Eschman's objections to the  quantity of drugs attributable to him for  sentencing purposes and declining to reduce  Eschman's sentence for acceptance of  responsibility, the district court sentenced  Eschman to almost twenty years in prison. Eschman  appeals his sentence, and for the reasons stated  herein, we reverse.

2
* Because Eschman does not challenge his  conviction, we discuss only those facts relevant  to his sentencing. Acting on a tip from a local  Wal-Mart store that had sold Eschman's son-in-law  Anthony Jines a large quantity of  pseudoephedrine, a precursor to methamphetamine,  agents from the Metropolitan Enforcement Group of  Southwestern Illinois (MEGSI) conducted a search  of the residence where Eschman lived with Anthony  Jines and his daughter, Darlla Jines. The agents  found, among other things, methamphetamine in the  Jineses' bedroom, and two firearms and 6,400 30-  milligram pseudoephedrine pills in Eschman's  bedroom.1 Shortly after criminal charges were  filed against him, his daughter, and his son-in-  law, Eschman pleaded guilty to conspiracy to  manufacture and possess with intent to distribute  methamphetamine, in violation of 21 U.S.C.  sec.sec. 841(a)(1), 846, maintaining a place for  the manufacture of methamphetamine, in violation  of 21 U.S.C. sec. 856(a)(1), and being a felon in  possession of a firearm, in violation of 18  U.S.C. sec. 922(g)(1).2 In doing so, Eschman  admitted that he "cooked" or manufactured  methamphetamine in a shed next to the Jineses'  residence.

3
Since the sentencing guidelines base the  applicable offense level on the drug quantity  involved, the key question at Eschman's  sentencing was how much methamphetamine should be  attributed to him. See U.S. Sentencing Guidelines  (U.S.S.G.) sec. 2D1.1 (1998). Before his  sentencing, the government (and later the  Probation Department in its pre-sentence report)  estimated the "production capacity" of Eschman's  methamphetamine "laboratory" (i.e., the shed) to  be 177 grams of actual (pure) methamphetamine  based on a 100% "theoretical" yield of the  pseudoephedrine pills found in his possession  (i.e., converting pseudoephedrine into  methamphetamine at a one-to-one ratio). Eschman,  however, objected to this 100% conversion rate as  a means for determining his base offense level.

4
At sentencing, Eschman introduced testimony from  Dr. Terry Martinez, a chemist and professor at  the St. Louis College of Pharmacy, who stated  that a 100% conversion rate is merely theoretical  and that professional chemists can only obtain a 90% yield using professional equipment. Based on  a scientific study conducted by the Iowa  Department of Public Safety ("Iowa study"), Dr.  Martinez indicated that an average yield for a  clandestine laboratory is from 40% to 50%. He  stated that a clandestine laboratory can, at  most, obtain an 80% yield. He characterized  Eschman's lab as "primitive" and testified that  no expert, in his view, could determine the  possible yield of methamphetamine for Eschman's  lab.

5
In rebuttal, the government offered the  testimony of Virginia Kleekamp, a chemist with  the Drug Enforcement Administration (DEA).  Kleekamp testified that DEA chemists do a  theoretical conversion rate of pseudoephedrine to  methamphetamine of 100%, or one-to-one, adjusted  only for the difference in molecular weight. She  explained that the DEA uses a one-to-one  theoretical conversion ratio because it is  difficult to obtain an accurate measure of the  production capacity of a clandestine laboratory.  She admitted, as a practical matter, that it is  impossible to obtain a 100% yield. She indicated  that an average yield for a clandestine  laboratory is from 40% to 60%, but she has noted  yields as high as 85%. However, she did not  dispute the findings of the Iowa study.

6
After hearing testimony from these two experts,  the district court found Dr. Martinez's testimony  not credible and accepted the one-to-one  conversion ratio as a means to determine the  applicable base offense level. The district court  agreed with the pre-sentence report that the  production capacity of Eschman's laboratory was  177 grams of pure methamphetamine. Based on the  statements and testimony of Anthony Jines, who  sold methamphetamine produced by Eschman, the  district court also determined that Eschman  manufactured, at least, 36 ounces (or 1020.6  grams) of mixture or substance containing  methamphetamine.

7
On the basis of these drug amounts, the  district court determined that Eschman had a base  offense level of 34,3 which when increased by  two levels for his possession of a firearm,  resulted in an offense level of 36. The district  court then denied Eschman a three-level reduction  in his offense level for acceptance of  responsibility, concluding that Eschman had not  genuinely accepted responsibility under the  sentencing guidelines. The court sentenced  Eschman to two 235-month sentences for the drug-  related convictions (the upper limit of the  relevant sentencing range) and a 120-month  sentence for the felon-in-possession conviction,  all to be served concurrently.

8
On appeal, Eschman argues that the district  court erred in calculating his base offense level  by (1) holding him accountable for 177 grams of  pure methamphetamine and (2) denying him a three-  level reduction for acceptance of responsibility.

II

9
We review the district court's calculation of  drug quantity, as well as its determination of  whether a defendant has accepted responsibility,  for clear error. See United States v. Johnson,  200 F.3d 529, 537 (7th Cir. 2000); United States  v. Mancillas, 183 F.3d 682, 711 (7th Cir. 1999).

A.  Drug Quantity Calculation

10
Eschman argues that the district court erred by  holding him accountable for 177 grams of pure  methamphetamine based on the amount of  pseudoephedrine found in his possession.  Specifically, Eschman contends that the district  court did not have a reliable factual basis for  the drug quantity calculation.

11
In cases "[w]here there is no drug seizure or  the amount seized does not reflect the scale of  the offense, the court shall approximate the  quantity of the controlled substance." U.S.S.G.  sec. 2D1.1, cmt. 12 (1998). In making this  approximation, the district court may consider  "the price generally obtained for the controlled  substance, financial or other records, similar  transactions in controlled substances by the  defendant, and the size or capability of any  laboratory involved." Id. Because there was no  seizure of the substance charged in the offense,  the district court in this case applied sec.  2D1.1 to approximate the amount of  methamphetamine Eschman could have produced in  his laboratory based upon the quantity of  pseudoephedrine found in his possession.4 The  district court, in accepting the government's  recommendation set forth in the pre-sentence  report, found that Eschman could have converted  the pseudoephedrine into methamphetamine at a  one-to-one conversion ratio (i.e., a 100% yield).  We will uphold this finding to the extent it is  based on reliable evidence. Johnson, 200 F.3d at  537.

12
From our review of the record, the district  court's finding lacks an evidentiary basis. Both  parties' experts testified that a 100% yield is  merely theoretical (in other words,  unattainable). The experts also testified that  although an 80-85% yield might be possible with  a clandestine laboratory, yields in the range of  40%-60% were more probable. This data is  confirmed by the Iowa study, which Eschman  introduced at sentencing. While the government  must prove the quantity of drugs attributable to  Eschman only by a preponderance of evidence,  United States v. Galbraith, 200 F.3d 1006, 1011  (7th Cir. 2000), the record is void of any  evidence which would reasonably support the  district court's decision to base its  methamphetamine quantity calculation on a one-to-  one conversion ratio.

13
Criminal defendants, like Eschman, have a due  process right to be sentenced on the basis of  reliable information, id. at 1012, and district  courts cannot quantify yield figures without  regard for a particular defendant's capabilities  when viewed in light of the drug laboratory  involved. See, e.g., United States v. Cole, 125  F.3d 654, 655 (8th Cir. 1997) (relevant inquiry  is on what defendant, not "an average cook," is  capable of yielding); United States v. Hamilton,  81 F.3d 652, 653-54 (6th Cir. 1996) (rejecting  standardized drug conversion formulas in favor of  individualized assessment of defendant's  capabilities); United States v. Mahaffey, 53 F.3d  128, 132-33 (6th Cir. 1995) (same). Here, the  record contains no evidence regarding the sorts  of yields Eschman could, with his equipment and  recipe, obtain in his methamphetamine laboratory  (or, for that matter, even evidence regarding  yields of similarly-situated defendants).5 See  United States v. Shaffer, 993 F.2d 625, 629 (7th  Cir. 1993) (court may approximate amount that  laboratory could have produced based upon DEA  chemist's testimony regarding chemical operations  and materials found at "farmhouse" laboratory and  production capacity of defendant's 12-liter flask  when taking into account "sloppy" laboratory  procedures); Mahaffey, 53 F.3d at 132 (court may  approximate amount that laboratory could have  produced based upon yields of similarly-situated  defendants); United States v. Beshore, 961 F.2d  1380, 1383 (8th Cir. 1992) (court may approximate  amount that laboratory could have produced based  upon quantity of precursor chemicals, size of  laboratory, and recipes to "cook" methamphetamine  seized); United States v. Short, 947 F.2d 1445,  1456-57 (10th Cir. 1991) (court may approximate  amount that laboratory could have produced based  upon testimony of DEA chemist and characteristics  of laboratory equipment seized). Thus, the  district court erred in relying on the one-to-one  conversion ratio when determining Eschman's base  offense level.6

14
On remand, the district court must undertake a  more precise inquiry into the quantity of  methamphetamine attributable to Eschman, using  reliable evidence to support its ultimate drug  quantity calculation.

B.  Acceptance of Responsibility

15
Eschman also challenges the district court's  refusal to grant him a three-level reduction in  offense level for acceptance of responsibility  under U.S.S.G. sec. 3E1.1. The district court  refused to grant the reduction because, in its  view, Eschman had not genuinely accepted  responsibility, but instead was simply attempting  to manipulate the criminal justice system in  order to reduce his sentence.

16
Under U.S.S.G. sec. 3E1.1, a defendant who  clearly demonstrates acceptance of responsibility  for his or her offense is entitled to a reduction  in his or her offense level. To qualify for the  reduction a defendant must, in a timely manner,  (1) demonstrate sincere remorse or contrition,  (2) truthfully admit the conduct comprising the  offense, and (3) neither falsely deny nor  frivolously contest relevant conduct. United  States v. Mancillas, 183 F.3d 682, 711 (7th Cir.  1999); United States v. Purchess, 107 F.3d 1261,  1269 (7th Cir. 1997); U.S.S.G. sec. 3E1.1, cmt.  1 (1998).

17
Here, Eschman pleaded very early in the case  and never challenged the charges against him.  Although he raised objections to the pre-sentence  report at sentencing, he never expressed outright  denials of relevant conduct and the district  court found his challenge to the "production  capacity" evidence not frivolous. Eschman also  submitted a statement to the court acknowledging  his wrongdoing and expressing regret, and at  sentencing, he apologized for his conduct,  stating that he was "sorry" for what he did. The  district court, however, did not believe Eschman  had genuinely accepted responsibility.

18
In light of his early, consistent, and repeated  acceptance of responsibility, it appears that the  district court's determination was affected by  the manner in which Eschman prefaced his  statements. In accepting responsibility, Eschman  stood firm in challenging the drug quantity  calculation and our earlier discussion  demonstrates that he had good reason for doing  so. While we do not take lightly the district  court's apparent concerns about Eschman's  contrition, see U.S.S.G. sec. 3E1.1, cmt. 5  (1998) (district court's determination entitled  to "great deference" on review), the court's  finding appears to have been colored by Eschman's  firm, but good faith challenge to the drug  quantity calculation. Our decision rejecting the  court's drug quantity calculation places the  acceptance of responsibility question in a new  light. On remand, the district court should  reevaluate whether Eschman is entitled to a  three-level reduction in his base offense level  for acceptance of responsibility.

III

19
For the foregoing reasons, we VACATE Eschman's  sentence and REMAND for resentencing in accordance  with this opinion.

Notes:

1
 The MEGSI agents actually recovered 6,576  pseudophedrine pills, but the lower figure of  6,400 was used for sentencing purposes.

2
 Pursuant to the plea agreement, the government  dismissed a charge for Eschman's possession of  methamphetamine.

3
 In calculating Eschman's base offense level, the  district court converted the two amounts (177  grams of actual methamphetamine and 1020.6 grams  of methamphetamine mixture) into marihuana  equivalents (1,770 kilograms and 2,041 kilograms,  respectively), and added the marihuana  equivalents together to obtain a single base  offense level. The resulting sum (3,811 kilograms  of marihuana) placed Eschman at offense level 34  (for marihuana amounts between 3,000 and 10,000  kilograms). See generally U.S.S.G sec. 2D1.1,  cmt. 9 (1998).

4
 We find this approach somewhat curious because  the sentencing guidelines refer to the size or  capability of the laboratory. Under the  government's approach, the production capacity of  a laboratory turns on the amount of precursor  drug (pseudoephedrine) found in the defendant's  possession. This approach seems rather misguided  because one would think that the size and  equipment of the drug laboratory involved would  determine its capacity to produce a controlled  substance. However, Eschman does not challenge  the government's approach so we reserve our  concerns for another day.

5
 While the government asserts that Eschman gave  methamphetamine to one of his co-defendants that  allows one to calculate a 90% yield figure, the  record indicates that this was not pure  methamphetamine, but a mixture (which would have  a much lower marihuana equivalent).

6
 The government contends that the error here is  harmless because only a yield figure of less than  60% would require a lower base offense level and  the record reasonably demonstrates that Eschman  could obtain a 60% yield. However, we did not  locate any record evidence that reasonably  establishes that Eschman had the capacity to  convert pseudoephedrine into methamphetamine at  yields of 60% or greater.

20
Easterbrook, Circuit Judge, concurring.

21
I join the  court's opinion, which resolves the issues the  parties presented for decision and holds that the  record does not demonstrate that the conspirators  could have turned their pseudoephedrine into  methamphetamine of equal weight. As my colleagues  observe, however, the conversion ratio is a  "somewhat curious" subject to pursue. Maj. op. 890 n.4. Both the prosecutor and defense counsel  misunderstand the import of the provision that  affects Eschman's sentence.

22
Application Note 12 to U.S.S.G. sec.2D1.1  provides

23
Types and quantities of drugs not specified in  the count of conviction may be considered in  determining the offense level. See  sec.1B1.3(a)(2) (Relevant Conduct). Where there  is no drug seizure or the amount seized does not  reflect the scale of the offense, the court shall  approximate the quantity of the controlled  substance. In making this determination, the  court may consider, for example, the price  generally obtained for the controlled substance,  financial or other records, similar transactions  in controlled substances by the defendant, and  the size or capability of any laboratory  involved.

24
The prosecutor contended, and the district judge  concluded, that seizures of methamphetamine did  not "reflect the scale of the offense", so the  parties set out to determine "the size or  capability of any laboratory involved." But  instead of inquiring whether the laboratory was  large, sophisticated, efficient, and so on--the  keys to its ability to turn out methamphetamine,  and therefore good clues to how much of that drug  this operation had produced (and thus to the  scale of the offense)--both litigants and judge  asked instead how much methamphetamine could have  been made using the stock of raw materials on  hand when the police arrived. The district court  concluded that the pseudoephedrine could have  been used to make an equal weight of  methamphetamine, but this finding is clearly  erroneous, for it conflicts with expert testimony  offered by both sides. Under Application Note 12,  the finding also is irrelevant, because it does  not demonstrate "the size or capability of any  laboratory involved." It is like saying that the  "size or capability" of an automobile body plant  depends on how much aluminum can be found nearby  on a given day. But that tells us only the  plant's inventory, not its "size or capability";  many producers of automobiles (or drugs) practice  just-in-time purchasing to curtail costs. An auto  body plant produces many more cars per year (or  even per week) than the aluminum on hand at a  given moment can yield. Just so with drug  manufacturing enterprises.

25
Application Note 12 is designed to match the  penalty to the true scale of the drug operation.  That the police discovered some inputs for drug  production is happenstance and not a good  indicator of long-term output; the object of the  Note is to move away from "what was seized?" to  "how big was this drug business?" Consider two  situations. In the first, the police find a large  and sophisticated laboratory, able to produce  substantial quantities of high-purity  methamphetamine, but do not find any precursor  chemicals--perhaps because they are stored  elsewhere, perhaps because they had been used  recently. In the second, the police find crude  equipment, a few pots and beakers that could be  used to make only small quantities of low-purity  drug, but also find a supply of pseudoephedrine  because they arrive just before a "cook." The  prosecutor's approach yields no enhancement under  Application Note 12 in the first case, but a  potentially substantial enhancement in the  second. That's backward and turns the Guidelines  into an engine of disproportion.

26
Perhaps the parties and the district judge were  led to their position by an omission in  Application Note 12: "size or capability of any  laboratory involved" is an incomplete way of  describing the scale of an enterprise.  Manufacturing facilities are rated in capacity  per unit of time. An auto plant produces X cars  per day; a generating station produces so many  megawatts of electricity continuously. Should the  district court take account of the lab's likely  production over the last month, or year, or the  life span of a normal drug-manufacturing ring, or  the span of this particular conspiracy, or the  period of the statute of limitations? Application  Note 12 does not say, which makes it impossible  for courts to treat equally dangerous drug rings  the same way. Some judges are bound to select a  short period (because estimates based on the  recent past are more accurate), while others  select a long period (because that best reflects  the total output). The Sentencing Commission  should amend Note 12 to incorporate an accounting  period. The most logical period is the span of  this conspiracy, which is "the offense" whose  relevant conduct the judge is supposed to  estimate. U.S.S.G. sec.1B1.3(a)(1)(A). But the  incompleteness of Application Note 12 as it  stands does not justify replacing an estimate of  capacity (and thus of past production) with an  estimate of raw materials at the time of arrest.