Court Opinion

ID: 4026644
Source: CourtListenerOpinion
Date Created: 2016-08-19 20:01:31.265525+00
Date Added: 2024-06-11T07:45:06.101569
License: Public Domain

FILED
                                                                          United States Court of Appeals
                                        PUBLISH                                   Tenth Circuit

                      UNITED STATES COURT OF APPEALS                              August 19, 2016

                                                                                Elisabeth A. Shumaker
                             FOR THE TENTH CIRCUIT                                  Clerk of Court
                         _________________________________

UNITED STATES OF AMERICA,

      Plaintiff - Appellee,

v.                                                             No. 15-2119

RACHEL BASURTO,

      Defendant - Appellant.

                         _________________________________

                                      ORDER
                         _________________________________

Before MATHESON, SEYMOUR, and BACHARACH, Circuit Judges.
                  _________________________________

       This matter is before the court on appellant’s Petition for Rehearing En Banc and

Panel Rehearing. Upon consideration by the original panel members, the request for

panel rehearing is granted to the extent of the amendments made to the attached revised

decision.

       The petition and the revised opinion were also circulated to all of the judges of the

court who are in regular active service. As no member of the panel and no judge in

regular active service on the court requested a poll, the request for en banc

reconsideration is denied.
The clerk of court is directed to file the amended Opinion forthwith.

                                      Entered for the Court

                                      ELISABETH A. SHUMAKER, Clerk

                                     2
                                                                         FILED
                                                             United States Court of Appeals
                                  PUBLISH                            Tenth Circuit

                UNITED STATES COURT OF APPEALS                     August 19, 2016

                                                                Elisabeth A. Shumaker
                       FOR THE TENTH CIRCUIT                        Clerk of Court
                       _________________________________

UNITED STATES OF AMERICA,

       Plaintiff - Appellee,

v.                                                   No. 15-2119

RACHEL BASURTO,

       Defendant - Appellant.
                      _________________________________

              Appeal from the United States District Court
                     for the District of New Mexico
                    (D.C. No. 1:13-CR-00969-JB-1)
                      _________________________________

John V. Butcher, Assistant Federal Public Defender, Office of the Federal
Public Defender, Albuquerque, New Mexico, for Defendant-Appellant.

James R.W. Braun, Assistant United States Attorney, (Damon P. Martinez,
United States Attorney, with him on the brief) Office of the United States
Attorney, Albuquerque, New Mexico, for Plaintiff-Appellee.
                       _________________________________

Before MATHESON, SEYMOUR, and BACHARACH, Circuit Judges.
                  _________________________________

BACHARACH, Circuit Judge.
                  _________________________________

     Ms. Rachel Basurto was convicted on federal drug charges. In light

of the conviction, the district court had to decide whether to impose a fine

and set the amount. Ms. Basurto’s only sources of income were her
monthly disability payments, but she and her husband owned a house

unencumbered by a mortgage. Relying on Ms. Basurto’s co-ownership of

the house, the district court imposed a fine of $13,133.33, reasoning that

Ms. Basurto could pay this amount by selling the house or obtaining a loan

with the house as collateral. 1 Ms. Basurto appeals the fine, arguing that it

is procedurally unreasonable. We affirm.

I.    Ms. Basurto asserts five challenges to the fine.

      On appeal, Ms. Basurto brings five challenges to the fine 2:

      1.    The district court failed to consider arguments that Ms. Basurto
            could not sell the house.

      2.    The district court erred in finding that Ms. Basurto could
            obtain a loan with the house as collateral.
      3.    In assessing Ms. Basurto’s ability to pay a fine, the district
            court should have considered the hardship to Ms. Basurto.

1
      To calculate the fine, the district court

           valued the house at its tax-assessment value, $33,689,

           subtracted a 6% realtor fee,

           halved this figure to account for the husband’s interest in the
            house, and

           subtracted Ms. Basurto’s existing liabilities ($2,500) and court-
            imposed special assessments ($200).

Based on these calculations, the district court imposed a $13,133.33 fine.
2
      On appeal, Ms. Basurto refers to the Eighth Amendment’s Excessive
Fines Clause. See Appellant’s Opening Br. at 43-45, 48, 50. We do not
interpret these references as a separate appeal point.

                                       2
      4.    The district court clearly erred by relying on facts that (a) the
            family members living with Ms. Basurto had known about and
            could have prevented her crimes and (b) the house had been
            used to facilitate the crimes.

      5.    The district court did not account for the increased risk of
            recidivism posed by the fine.

We reject each challenge.

II.   We consider whether the district court abused its discretion.

      We review the reasonableness of the district court’s decision to

impose a fine under the abuse-of-discretion standard. United States v.

Lopez-Macias, 661 F.3d 485, 488-89 (10th Cir. 2011). “Reasonableness has

both procedural and substantive components.” United States v. Cage, 451
F.3d 585, 591 (10th Cir. 2006).

      Ms. Basurto characterizes her challenges to the fine as procedural.

This characterization is correct because Ms. Basurto challenges the method

that the district court used in calculating the fine. See id.

      In assessing her procedural challenge, we can disturb the district

court’s factual findings only if they are clearly erroneous. United States v.

Trujillo, 136 F.3d 1388, 1398 (10th Cir. 1998). But the district court’s

legal conclusions are subject to de novo review. United States v. Ray, 704
F.3d 1307, 1315 (10th Cir. 2013).

                                       3
III.   The district court did not fail to consider arguments regarding
       Ms. Basurto’s inability to sell the house.

       The U.S. Sentencing Guidelines authorize district courts to impose

fines except when defendants establish that they are unable to pay and

unlikely to obtain that ability. U.S.S.G. § 5E1.2(a) (2014). 3 Applying this

authority, the district court found that Ms. Basurto could pay a fine by

selling her house.

       According to Ms. Basurto, the district court failed to consider

impediments preventing her from selling the house. For example, she

argued in district court that state law prevented her from selling the house

without her husband’s consent, that she did not know where her husband

was, 4 and that he probably would not consent to a sale. See N.M. Stat. Ann.

§ 40-3-13(A) (voiding the sale of real property that spouses own as

community property without both spouses’ consent). After defense counsel

presented these arguments, the district court found that Ms. Basurto

probably would need to sell the house even in the absence of a fine. R. at

347.

3
      Section 5E1.2(a) states that the district court “shall” impose a fine
unless the defendant establishes an inability to pay, but the U.S. Supreme
Court’s decision in United States v. Booker, 543 U.S. 220 (2005) rendered
the Guidelines advisory.
4
      Ms. Basurto believed that Mr. Basurto was residing in Mexico, but
she had not had any contact with him since 2003, when he went to Mexico.

                                       4
      It is true that the district court’s written opinion did not make

specific findings on Ms. Basurto’s arguments. But there was no need for

such findings. See United States v. Trujillo, 136 F.3d 1388, 1398 (10th Cir.

1998) (addressing ability to pay and concluding that express findings as to

each statutory factor are not required prior to the imposition of a fine);

United States v. Washington-Williams, 945 F.2d 325, 327-28 (10th Cir.

1991) (holding that express findings are unnecessary on ability to pay a

fine under U.S.S.G. § 5E1.2); United States v. Wright, 930 F.2d 808, 810

(10th Cir. 1991) (“Specific fact-finding on the record has been deemed

unnecessary for imposition of fines under [a prior version of 18 U.S.C.

§ 3572, which set out the factors governing imposition of a fine].”). “It is

sufficient that the record reflects the basis for the imposition of a fine.”

United States v. Trujillo, 136 F.3d 1388, 1398 (10th Cir. 1998).

      The district court entertained Ms. Basurto’s sentencing arguments,

holding two sentencing hearings, ordering and reviewing supplemental

briefing, providing a general statement of reasons for imposing the fine,

and stating that the relevant sentencing factors had been considered. We

have no reason to believe that the district court ignored Ms. Basurto’s

arguments against a fine.

                                       5
IV.   The district court did not clearly err in finding that Ms. Basurto
      could obtain a loan with the house as collateral.

      Ms. Basurto also challenges the finding regarding her ability to

obtain a loan with the house as collateral. But this finding was not clearly

erroneous.

      Ms. Basurto argues that she could not obtain a loan because she is

indigent. But this argument overlooks the fact that she co-owns a house

unencumbered by a mortgage. Ms. Basurto’s co-ownership of the house

provided her with collateral to offer a lender.

      According to Ms. Basurto, she could not use the house as collateral

because state law prohibits sale of the house without her husband’s

consent. Thus, Ms. Basurto argues, “[t]he chances of not being able to

liquidate the home would be too great.” 5 Appellant’s Opening Br. at 33. In

our view, however, the district court could reasonably reject this argument.

      State law provides a statutory procedure allowing married individuals

to sell marital property when their spouses disappear. See N.M. Stat. Ann.

§ 40-3-16. If Ms. Basurto did not know where her husband was, she could

sell the house without his consent upon completion of five tasks:

      1.     File a petition stating why the transaction would be desirable.

5
     State law would also prohibit Ms. Basurto from mortgaging the house
without spousal consent, but Ms. Basurto does not argue this point. See
N.M. Stat. Ann. § 40-3-13(A).

                                       6
     2.    Obtain court appointment of a guardian ad litem for the absent
           husband and pay this guardian a “reasonable fee.”

     3.    Serve a notice of hearing on the guardian ad litem.

     4.    Publish four successive weekly notices of hearing in a
           newspaper of general circulation in the county where the
           petition was pending.

     5.    Obtain a court order authorizing the transaction based on a
           finding that the husband had disappeared.

N.M. Stat. Ann. § 40-3-16.

     The district court could reasonably consider Ms. Basurto capable of

performing these five tasks. Even if Ms. Basurto could not afford an

attorney, the statutory procedure is relatively straightforward and Ms.

Basurto did not present any evidence of an inability to carry out the

statutory procedure.

     Ms. Basurto argues elsewhere that she could not comply with the

statutory procedure because she (1) would not be able to prove that her

husband’s location was “unknown to anyone” and (2) could not afford the

non-attorney costs associated with the procedure, such as publishing

notices in a local newspaper. Appellant’s Opening Br. at 28. 6 The district

court could reasonably reject these arguments. The statutory procedure

required only that a spouse’s location was “unknown to the other spouse

[Ms. Basurto]”; the statute did not require Ms. Basurto to prove that her

6
      Ms. Basurto presented these arguments when stating that the district
court had disregarded her contentions about an inability to sell the house.

                                      7
husband’s location was unknown to anyone. N.M. Stat. Ann. § 40-3-16(A).

And Ms. Basurto presented no evidence of an inability to pay the costs

associated with the statutory procedure.

      Ms. Basurto would not need to use the statutory procedure if the

husband consented to a sale. According to Ms. Basurto, spousal consent

was impossible because she did not know where the husband was. But the

record does not show that Ms. Basurto ever attempted to contact her

husband, much less that she was unable to locate him or obtain his consent.

In fact, Ms. Basurto’s appeal briefs suggest the opposite: Ms. Basurto

states that one of her daughters has been in contact with the husband, that

Mr. Basurto has a son who “could possibly provide [the husband’s]

location,” and that Ms. Basurto “will probably not be able to prove [the

husband] has disappeared and his location is unknown to anyone.”

Appellant’s Opening Br. at 7, 28-29.

      In these circumstances, the district court could reasonably conclude

that a lender would be willing to loan money to Ms. Basurto with the house

as collateral. Ms. Basurto disagrees, contending that she would be

considered a poor credit risk. But Ms. Basurto did not present any evidence

of a difficulty in obtaining a loan. In the absence of such evidence, the

district court could reasonably infer that Ms. Basurto would be able to

obtain a loan since she could provide her house as collateral. As a result,

                                       8
the court did not clearly err in finding that Ms. Basurto could obtain a loan

with her unencumbered co-ownership of the house.

V.    The district court did not err when analyzing the hardship that
      the fine imposed on Ms. Basurto.

      The district court reasoned that the hardship to Ms. Basurto and her

ability to pay are separate inquiries:

      Once the Court decided that–despite [Ms. Basurto’s] minimal
      assets, the third parties living in [Ms. Basurto’s] home, and the
      other factors–it should fine her, the burden shifted to [Ms.]
      Basurto to prove she could not afford to pay that fine. . . .
      While the difficulty a fine will cause is certainly relevant when
      she is arguing that the Court should not impose a fine, it is not
      relevant once the Court decides to impose a fine. At that stage,
      difficulty to the defendant is not the issue; the sole issue is
      whether [Ms. Basurto] can pay the fine.

R., vol. I at 254. Ms. Basurto challenges this reasoning, arguing that the

district court should have treated hardship as part of the ability-to-pay

analysis. Appellant’s Opening Br. at 34-37. 7 We conclude that the district

court did not err.

7
      In her reply brief, Ms. Basurto offers a different interpretation of the
district court’s language, arguing that the district court incorrectly
reasoned that hardship is immaterial regarding the amount of the fine. But
Ms. Basurto did not raise this interpretation of the district court’s language
until her reply brief. As a result, we decline to consider this argument. See
United States v. Hunter, 739 F.3d 492, 495 (10th Cir. 2013) (declining to
consider an argument omitted in the appellant’s opening brief).

                                         9
      In deciding whether to impose a fine and set the amount, the district

court must consider the sentencing factors in 18 U.S.C. § 3572(a). 8 Section

3572(a) requires the district court to consider factors including the

defendant’s income, earning capacity, financial resources, and the burden

of the fine on the defendant. 18 U.S.C. § 3572(a)(1)-(2) (2012). Similarly,

the guidelines require the district court to consider the defendant’s ability

to pay and the burden on the defendant. U.S.S.G. § 5E1.2(a), (d)(2)-(3)

(2014).

      The district court complied with the statute and guidelines by

considering hardship in determining whether to impose a fine. As noted

above, the court expressly stated that it had decided to impose a fine only

after considering “the difficulty a fine will cause.” R., vol. I at 254. The

court simply noted that ability to pay and hardship are distinct inquiries,

and they are. Ms. Basurto elsewhere recognizes this distinction, stating

that “[t]he [sentencing] factors that must be considered also include those

specific to fines: the defendant’s ability to pay, which is determined by the

defendant’s income, earning capacity, and financial resources, 18 U.S.C.

§ 3572(a)(1), U.S.S.G. § 5E1.2(d)(2); [and] the hardship the fine will

impose upon the defendant, her family and her financial resources,

8
      The district court was also required to consider the sentencing factors
in 18 U.S.C. § 3553(a). The district court’s consideration of the factors in
§ 3553(a) is not at issue in this appeal.

                                      10
§ 3572(a)(2), § 5E1.2(d)(3) & (8) . . . .” Appellant’s Opening Br. at 44. As

Ms. Basurto implicitly admits in this passage, hardship and ability to pay

are distinct considerations.

      In her briefs and petition for rehearing, Ms. Basurto suggested a

parade of horribles if the court ignores hardship in deciding whether to

impose a fine. But the district court did not ignore the hardship; the court

simply observed the differences between the factors involving ability to

pay and hardship. Thus, we reject Ms. Basurto’s challenge to the district

court’s decision to impose a fine.

VI.   The district court did not rely on clearly erroneous facts in
      finding that (1) Ms. Basurto’s family had known about her drug
      activity and (2) Ms. Basurto’s house was connected to her drug
      activity.

      A district court errs procedurally when it imposes a fine based on

clearly erroneous facts. United States v. Lente, 647 F.3d 1021, 1030 (10th

Cir. 2011). Ms. Basurto argues that the district court clearly erred by

relying on two facts: (1) the family members living with Ms. Basurto had

known about the illegal drug activity and could have stopped it, and

(2) Ms. Basurto’s house had been connected to her illegal behavior. In our

view, these factual findings were not clearly erroneous.

                                     11
      The record includes three facts supporting the district court’s finding

that several of Ms. Basurto’s family members had been aware of Ms.

Basurto’s drug activity. 9

      First, Ms. Basurto’s adult daughter knew the combination to a safe in

the house that contained methamphetamine, cash, a handgun, and a key to

another safe containing more cash. R., vol. I at 277-78. In fact, the

daughter

           opened the safe for the police because Ms. Basurto had claimed
            that she did not know the combination and

           claimed that some of the cash from the safe was hers.

      Second, methamphetamine was found in the son-in-law’s car.

      Third, Ms. Basurto kept items consistent with drug dealing—a scale,

small plastic baggies, and a razor blade—in plain view in her bedroom.

      Based on these three facts, the district court could reasonably find

that several of Ms. Basurto’s family members had known about the drug

activity and chose to continue residing with Ms. Basurto anyway.

      In addition, the district court could reasonably find that Ms. Basurto

had used her house to “further [her] drug dealing enterprise[].” Supp. R. at

71. As noted, Ms. Basurto kept cash, drugs, and a handgun in her house.

9
     Ms. Basurto’s one-year-old granddaughter also lived with Ms.
Basurto. Ms. Basurto argues that “of course . . . [the] granddaughter was
completely innocent.” Appellant’s Opening Br. at 47-48. The
granddaughter’s presence in the house does not affect our analysis.

                                     12
Even if Ms. Basurto had conducted drug transactions elsewhere, the district

court could reasonably infer that Ms. Basurto’s house had played a role in

the illegal activity.

      Accordingly, we conclude that the district court did not clearly err in

finding that (1) Ms. Basurto’s live-in family members had known of the

drug crimes and (2) Ms. Basurto’s house had been connected to the drug

crimes.

VII. The district court did not abuse its discretion by failing to
     address the risk of recidivism caused by the fine.

      Ms. Basurto also argues that the district court failed to consider the

risk that the fine would result in recidivism. As discussed above, however,

specific findings were unnecessary. See Part III, above. 10 Thus, the district

court did not err by omitting findings on the risk of recidivism from a fine.

VIII. Disposition

      We affirm.

10
      In considering the sentencing factors, the district court expressly
considered the recidivism risk posed by the fine and accounted for the
possibility that a large fine might “nudge [Ms. Basurto] into further profit-
bearing criminal activity that she might not otherwise commit.” Supp. R. at
23.

                                      13