United States v. James Whitley

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 12-4062

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

v.

JAMES EDWARD WHITLEY,

Defendant - Appellant.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Wilmington. Louise W. Flanagan,
District Judge. (7:10-cr-00105-FL-1)

Argued: February 1, 2013 Decided: September 9, 2013

Before GREGORY and KEENAN, Circuit Judges, and Robert E. PAYNE,
Senior United States District Judge for the Eastern District of
Virginia, sitting by designation.

Affirmed by unpublished per curiam opinion. Senior Judge Payne
wrote a separate opinion concurring in part and concurring in
the judgment.

ARGUED: James Ryan Hawes, EDMISTEN & WEBB, Raleigh, North
Carolina, for Appellant. Jennifer P. May-Parker, OFFICE OF THE
UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee.
ON BRIEF: Thomas G. Walker, United States Attorney, Kristine L.
Fritz, Assistant United States Attorney, OFFICE OF THE UNITED
STATES ATTORNEY, Raleigh, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.

2
PER CURIAM:

James Edward Whitley pleaded guilty to charges of wire

fraud, in violation of 18 U.S.C. § 1343, and money laundering,

in violation of 18 U.S.C. § 1957, based on his activities in

conducting a fraudulent investment scheme. The district court

found that under the United States Sentencing Guidelines (the

guidelines), Whitley’s advisory range of imprisonment was 57 to

71 months on each count. Upon determining that sentences within

the guidelines range would be insufficient, the court imposed

concurrent sentences of 120 months’ imprisonment on the two

counts.

On appeal, Whitley argues that the district court committed

procedural error in its sentencing determination because the

court did not specify whether it was imposing departure-based

sentences under the guidelines, or instead was imposing variant

sentences based on the factors set forth in 18 U.S.C. § 3553(a).

Whitley further argues that the sentences are substantively

unreasonable because they are excessive. Upon our review, we

conclude that the district court did not commit procedural or

substantive error as alleged. Accordingly, we affirm the

district court’s judgment.

3
 I.

In September 2010, a grand jury issued a twenty-count

indictment charging Whitley with six counts of wire fraud and

fourteen counts of money laundering. These charges resulted

from a government investigation revealing that Whitley engaged

in a three-year scheme of defrauding friends, family members,

and acquaintances (collectively, the victims), who had invested

their money with Whitley. Whitley solicited funds from the

victims by representing that he was in the business of brokering

purchase order factoring contracts. 1 Whitley told the victims

that he had contracts with certain companies, that the victims’

funds would be invested in those companies, and that the victims

would receive their return of capital after the expiration of

the companies’ factoring contracts. Whitley provided the

victims with promissory notes specifying both interest rates and

due dates.

Whitley did not use any of the funds he received from the

victims to invest in a factoring business. Instead, Whitley

used the funds to further his fraudulent scheme and for his

personal use. For instance, as is typical of a Ponzi scheme,

1
A “purchase order factoring contract” is needed when a
supplier requires that a buyer pay for goods by cash on
delivery, but the buyer wants to purchase the goods on 30 to 60
day terms. The purchase order contractor agrees to pay the
supplier upon delivery of the goods, which enables the buyer to
delay payment for a specified period of time.

4
Whitley used some of the funds he received from later investors

to pay initial investors interest on the money they had

provided, thereby creating the impression that the investment

was successful. Whitley also used some of the proceeds from his

scheme to pay off a construction loan for his secondary

residence, a beach house on Bald Head Island, North Carolina.

Additionally, Whitley used some funds provided by the victims to

take beach vacations to the Caribbean and ski trips to Colorado.

Whitley’s scheme affected at least 25 victims and resulted in a

collective loss of about $7 million.

Whitley and the government entered into a plea agreement,

under which Whitley agreed to plead guilty to one count of wire

fraud and one count of money laundering in exchange for the

government agreeing to dismiss the other 18 counts alleged in

the indictment. The parties also stipulated in the plea

agreement that the amount of loss was between $2.5 million and

$7 million for purposes of Whitley’s advisory guidelines

sentencing range. After the district court accepted Whitley’s

guilty plea, the United States Probation Office prepared

Whitley’s presentence investigation report (PSR), in which the

5
probation officer calculated an advisory guidelines range of 57

to 71 months’ imprisonment. 2

At Whitley’s sentencing hearing, the district court adopted

the probation officer’s calculations concerning Whitley’s

advisory guidelines range. The district court also heard

testimony from six victims concerning the impact of Whitley’s

fraudulent scheme on their lives. Additionally, counsel from

the government read statements from several other victims who

were unable to attend the hearing.

The evidence presented at the sentencing hearing showed

that Whitley’s conduct created significant emotional

consequences for some victims, contributed to the demise of a

marriage, and impaired some of the victims’ retirement and

education plans. The victims’ statements and testimony also

described Whitley’s tenacious and persistent pursuit of

investment funds, the manner in which Whitley lied to the

victims when they inquired about their investments, and

Whitley’s lack of remorse toward them and his failure to attempt

to repay the victims for their losses. The government asked

that the district court sentence Whitley to a term of

imprisonment “at the upper end” of his guidelines range, while

2
This range was calculated based in part on the parties’
agreement concerning the amount of loss, which resulted in a
total offense level of 25 under the guidelines.

6
Whitley’s counsel requested sentences “within the guideline[s]

range.”

After receiving this evidence and considering the parties’

arguments, the district court sentenced Whitley to a term of

imprisonment of 120 months on each count, to be served

concurrently. The court stated that it considered Whitley’s

advisory guidelines range and the sentencing factors set forth

in 18 U.S.C. § 3553(a), and explained that the court did not

think “that the advice of the guidelines reflects the [§

3553(a)] factors fully[,] [m]ost particularly, the need to

promote respect for the law and to discourage this type of

criminal conduct.” The court noted that Whitley “preyed on

people who had reason to trust [him],” that Whitley’s tactics

were aggressive and persistent, and that the impact of Whitley’s

conduct was “overwhelming.” The court also observed that

Whitley continued to conduct his fraudulent scheme even after

becoming aware that the government was investigating his

activities. Near the end of the hearing, the district court

provided further explanation why the court had “gone above the

guideline[s] range,” stating that:

[T]he guideline[s] sentence does not accomplish [sic]
in this case, given the pervasive nature of the scheme
and the persons upon whom [Whitley] preyed and the
impact upon those individuals, for all these reasons,
also including what appears to be a lack of penitence
on the part of [Whitley] where there’s been [an]
opportunity . . . given [to] him by the Court to begin

7
 to collect funds. I’m compelled to conclude that he’s
a very dangerous person and that there’s a complete
lack of respect for the law.

In announcing the sentences from the bench, the district

court mentioned the § 3553(a) factors on several occasions but

did not use either the term “variance” or the term “departure”

in explaining the sentences. Notably, Whitley’s counsel did not

ask the court during the sentencing hearing to specify whether

the court was departing from the advisory guidelines range or

instead was imposing variant sentences. After the court issued

its judgment and written statement of reasons, Whitley timely

filed a notice of appeal.

II.

A.

We first address Whitley’s challenge to the procedural

reasonableness of his sentences. As a general matter, we review

a district court’s imposition of a sentence, whether within or

outside a defendant’s advisory guidelines range, under a

deferential abuse-of-discretion standard. Gall v. United

States, 552 U.S. 38, 41 (2007). The government, however,

asserts that Whitley’s procedural reasonableness challenge is

subject to review only for plain error, because Whitley did not

raise in the district court the argument he presents here. See

8
United States v. Olano, 507 U.S. 725, 732-34 (1993) (discussing

plain error standard of review).

We need not determine whether the more rigorous plain error

standard applies in this case, because we conclude that the

district court did not commit procedural error as alleged by

Whitley, plain or otherwise. Whitley’s sole contention

concerning procedural error is that the district court erred by

“fail[ing] to specify at the sentencing hearing whether [the

court] departed or varied in doubling the advisory guidelines

[range].” Br. of Appellant at i, 10. Whitley concedes that

under our precedent, a district court is not required to “first

look to whether a departure is appropriate before varying.” See

United States v. Diosdado-Star, 630 F.3d 359, 366 (4th Cir.

2011) (citation omitted). However, Whitley contends that a new

sentencing hearing is required because the district court

allegedly failed to state whether it varied or departed in

determining the 120-month sentences, and thus that the court

violated the general principle stated in Diosdado-Star that a

court must “adequately explain the chosen sentence to allow for

meaningful appellate review and to promote the perception of

fair sentencing.” Id. at 365 (citation omitted); see Gall, 552

U.S. at 51 (listing ways in which a district court may commit

procedural error, including by failing to adequately explain the

chosen sentence).

9
 We reject Whitley’s argument because it is based on his

mistaken assertion that there is “no way to determine how the

[district] court arrived at the 120 month sentence[s].” Br. of

Appellant at 12. The record of the sentencing proceedings

refutes Whitley’s argument, and shows that the district court

imposed variant sentences, rather than departure-based

sentences.

The term “departure” has a unique meaning under the

guidelines, and “refers only to non-Guidelines sentences imposed

under the framework set out in the Guidelines.” Irizarry v.

United States, 553 U.S. 708, 714 (2008). Here, although the PSR

identified a possible basis for departure under U.S.S.G. §

2B1.1(b)(1), 3 the district court did not focus either on

Whitley’s offense level or on any fees or other similar costs

incurred. Thus, we conclude that the sentences were not imposed

on the basis of this guidelines provision. Nor did the district

court give the parties notice that the court was considering the

imposition of departure-based sentences for any other reason, as

3
Under Application Note 19(A)(iii) to U.S.S.G. §
2B1.1(b)(1), a district court may make an upward departure to a
defendant’s guidelines range in cases in which the offense level
“substantially understates the seriousness of the offense,” on
account of the offense involving a substantial amount of
interest, finance charges, late fees, penalties, or “other
similar costs, not included in the determination of loss.” The
PSR mentioned this provision, but the probation officer did not
make a recommendation concerning whether Whitley’s sentence
should be increased based on such a departure.

10
would be required under Rule 32(h) of the Federal Rules of

Criminal Procedure.

By contrast, “variant” sentences are drawn from

consideration of the sentencing factors set forth in § 3553(a).

See Irizarry, 553 U.S. at 714-15; see also United States v.

Rivera-Santana, 668 F.3d 95, 100 n.6 (4th Cir. 2012) (discussing

the difference between a departure, a sentence imposed by

reference to the defendant’s guidelines range, and a variance,

“a non-Guidelines sentence” that is justified on the basis of

the § 3553(a) factors) (citation omitted). During the

sentencing hearing, the district court referred frequently to

certain factors set forth in § 3553(a) in explaining Whitley’s

sentences. Moreover, the written statement of reasons issued by

the district court specified that the court imposed sentences

“outside the advisory sentencing guideline system,” 4 and that

“the court varied upwardly to a sentence of 120 months[’]

imprisonment.” (Emphasis added.) Based on these statements in

the record, we easily conclude that the district court imposed

variant sentences, not departure-based sentences. Accordingly,

4
The statement of reasons form includes a “check box” that
would allow a court to indicate departure-based sentences.
However, the district court did not mark that box denoting
departure-based sentences, and instead marked the box indicating
sentences based outside the guidelines system.

11
we hold that Whitley’s procedural reasonableness claim lacks any

merit.

In reaching this conclusion, we additionally observe that

Whitley has not challenged the validity of our holding in

Diosdado-Star that a district court is not required to consider

whether any departures under the guidelines are applicable

before imposing a variant sentence. See 630 F.3d at 365-66. At

oral argument in this case, however, this Court raised the

question whether the November 2010 amendments to U.S.S.G. §

1B1.1 5 have undermined the above holding in Diosdado-Star.

Nevertheless, we do not answer that question here, because

Whitley waived any such argument due to his failure to raise it

in his brief to this Court. See Equal Rights Ctr. v. Niles

Bolton Assocs., 602 F.3d 597, 604 n.4 (4th Cir. 2010) (holding

that the appellant waived an argument by not raising it in the

opening brief, even though that issue was discussed by the panel

and the parties during oral argument); see also United States v.

5
The current iteration of that commentary section, titled
“Application Instructions,” was enacted after appellate briefing
in Diosdado-Star but before oral argument and the issuance of
the opinion in that case. The Application Instructions provide
that district courts “shall determine the kinds of sentence and
the guideline range as set forth in the guidelines . . . by
applying the provisions of this manual in the following order,”
and lists the consideration of any departures from the
guidelines before listing the consideration of the § 3553(a)
factors. The parties in Diosdado-Star did not bring to this
Court’s attention this revision to U.S.S.G. § 1B1.1.

12
Hudson, 673 F.3d 263, 268 (4th Cir. 2012) (holding that issues

not raised in opening brief are waived). Moreover, Whitley

cites with approval in his brief the very proposition in

Diosdado-Star that this Court raised during oral argument in

Whitley’s appeal, namely, that “a district court is not required

to ‘first look to whether a departure is appropriate before

varying.’” Br. of Appellant at 10 (quoting Diosdado-Star, 640

F.3d at 365-66). Accordingly, we hold that Whitley’s reliance

on Diosdado-Star and his failure to challenge its vitality in

light of amended U.S.S.G. § 1B1.1 precludes consideration of

that issue here.

B.

Finally, we determine whether the district court abused its

discretion in sentencing Whitley to concurrent terms of 120

months’ imprisonment, sentences well above his advisory

guidelines range. In conducting a review of alleged substantive

sentencing error, we review the sentences imposed for

reasonableness, regardless whether they were based on the

guidelines or were variant sentences. United States v. Evans,

526 F.3d 155, 164 (4th Cir. 2008). When reviewing sentences

that are outside the defendant’s advisory guidelines range,

imposed either by departure or by variance, we consider whether

the district court “acted reasonably both with respect to its

decision to impose such a sentence and with respect to the

13
extent of the divergence from the sentencing range.” United

States v. Hernandez-Villanueva, 473 F.3d 118, 123 (4th Cir.

2007). In undertaking this analysis, we “must defer to the

trial court and can reverse a sentence only if it is

unreasonable, even if the sentence would not have been the

choice of the appellate court.” Evans, 526 F.3d at 160

(emphasis omitted).

In sentencing Whitley on the basis of the § 3553(a)

factors, the district court observed the “pervasive nature” of

Whitley’s fraudulent scheme, the manner in which he had

perpetuated the fraud, and his lack of remorse. The court also

considered the testimony of Whitley’s victims, who discussed the

impact of Whitley’s fraudulent scheme on their lives. See,

e.g., id. at 163 (discussing with approval the district court’s

consideration of the victims’ statements in affirming a sentence

that was more than four times as much as the upper end of the

defendant’s advisory guidelines range). Most notably, the

district court discussed the need for sentences in excess of the

guidelines range to protect the public, because when Whitley was

“on notice of [the] investigation and notice of wrongdoing [he]

continued to prey on others.” The district court also noted

that substantial terms of imprisonment were justified by the

need to provide adequate deterrence regarding similar criminal

conduct and to promote respect for the law. After reviewing

14
these reasons provided by the district court, as well as the

entire sentencing record and the parties’ arguments, we conclude

that Whitley’s concurrent sentences of 120 months’ imprisonment

are not substantively unreasonable.

III.

For these reasons, we affirm the district court’s judgment.

AFFIRMED

15
PAYNE, Senior District Judge, concurring in part and concurring
in the judgment:

I agree with the majority that Whitley’s sentence is

substantively reasonable. However, for the reasons that follow,

I submit that Whitley’s asserted procedural error should be

reviewed under the plain error standard; that there was plain

error; but that the error did not affect Whitley’s substantial

rights.

I.

Whitley and the government disagree about the applicable

standard of review of the alleged procedural error. Whitley

contends that the abuse of discretion standard applies. The

government contends that the plain error standard of review

controls because the challenges raised by Whitley are presented

for the first time on appeal.

In United States v. Lynn, 592 F.3d 572, 576 (4th Cir.

2010), the Court held “that plain-error review applies when a

party lodges an objection to the sort of procedural sentencing

error at issue here [inadequate explanation of sentencing] for

the first time on appeal.” Id. at 577. See United States v.

Hargrove, 625 F.3d 170, 183-84 (2010) (pointing out that Lynn

called for plain error review when a procedural sentencing error

is raised for the first time on appeal). Also, in Lynn, the

Court explained how a party can preserve a claim of procedural

16
sentencing error. The Court stated that, “[b]y drawing

arguments from § 3553 for a sentence different than the one

ultimately imposed, an aggrieved party sufficiently alerts the

district court of its responsibility to render an individualized

explanation addressing those arguments, and thus preserves its

claim.” Id. at 578 (emphasis added). Later, in United States

v. Boulware, 604 F.3d 832, 838 (4th Cir. 2010), citing Lynn, the

Court held that “arguments made under § 3553(a) for a sentence

different than the one that is eventually imposed are sufficient

to preserve claims that the district court erred in not

adequately explaining its rejection of the sentencing

arguments.” (emphasis added).

II.

In Gall v. United States, 552 U.S. 38, 40 (2007), the

Supreme Court identified several kinds of procedural errors that

can occur at sentencing. Among them was “failing to adequately

explain the chosen sentence - including an explanation for any

deviation from the Guidelines range.” Gall, 552 U.S. at 51.

Whitley contends that:

[t]he district court procedurally erred when it failed
to specify at the sentencing hearing whether it
departed or varied in imposing a sentence that doubled
the guideline range. This error resulted in a failure
to adequately explain its decision to impose the 120
month sentence and, therefore, the sentence must be
vacated.

17
Appellant’s Brief, at 10. Thus, Whitley raises the kind of

procedural error that is identified in the last phrase of the

exemplary list of procedural errors provided in Gall.

To decide whether Whitley preserved that error, it is

necessary to determine whether, in the sentencing proceedings,

Whitley drew “̒arguments from § 3553 for a sentence different

than the one ultimately imposed . . . .’” United States v.

Powell, 650 F.3d 388, 395 (4th Cir. 2011) (citation omitted)

(emphasis in original); Boulware, 604 F.3d at 838; Lynn, 592

F.3d at 578. The arguments necessary to preserve an error of

this sort can be set forth in written sentencing positions filed

before the sentencing hearing or in arguments made at the

hearing. Neither Whitley nor the government filed a written

pre-sentencing submission. Therefore, the record at the

sentencing hearing must be examined to see whether there Whitley

drew any argument from § 3553(a) for a sentence that was

different than the one the court ultimately imposed. The record

demonstrates that he did not.

In his sentencing argument, Whitley’s counsel made four

points: (1) that Whitley had made a bad decision for which he

had “accepted responsibility” and “entered a plea agreement;”

(2) that Whitley had suffered in his personal life for that bad

decision and had been forced into bankruptcy; (3) that Whitley’s

18
wife had divorced him and his children had “alienated him;” and

(4) that “his property has been foreclosed on.” Having made

those points, counsel then said, “we ask that you sentence him

to a sentence within the guideline range.” 1

Quite clearly, Whitley’s arguments for a within-Guideline

sentence cannot be said to be drawn from the factors in §§

3553(a)(2)-(7). That leaves § 3553(a)(1), “the nature and

circumstances of the offense and the history and characteristics

of the defendant.” Whitley’s sentencing points do not refer to

“the nature and circumstances of the offense.” Nor can the four

points raised in Whitley’s sentencing argument be fairly related

to either his history or characteristics. Rather, in one way or

another, each point makes note of how the offense has affected

Whitley (points (2)-(4)) or recites a neutral fact, acceptance

of responsibility by pleading guilty, (point (1)).

The oblique references to the effects of Whitley’s crime on

him and to the fact of a guilty plea, like the oblique

references in United States v. Powell, do not “̒sufficiently

alert the district court of its responsibility to render an

individualized explanation addressing those arguments’ under §

3553” (quoting Lynn, 592 F.3d at 578). In sum, Whitley did not

1
Counsel also asked that Whitley be confined in a specific
nearby prison and that he be allowed to “self-report” to begin
service of the sentence.

19
“̒draw[] arguments from § 3553 for a sentence different than the

one ultimately imposed,’” and thus, even under the quite lenient

standard for preservation of such an error that the Court has

adopted, Whitley did not preserve the procedural error that he

now asserts

III.

To demonstrate plain error, Whitley is obligated to

establish that: (1) the trial court erred, (2) the error is

clear and obvious, and (3) the error affected his substantial

rights. United States v. Olano, 507 U.S. 725, 732-34 (1993);

Hargrove, 625 F.3d at 184. If Whitley discharges that

responsibility, the Court has discretion to recognize the error,

but need not do so unless it “seriously affect[s] the fairness,

integrity or public reputation of judicial proceedings.” Olano,

507 U.S. at 736 (quotations and alterations omitted); Hargrove,

625 F.3d at 184.

Whether an error is plain is judged “‘at the time of

appellate consideration.’” Henderson v. United States, ___ U.S.

___, 133 S. Ct. 1121, 1130 (2013) (citing Johnson v. United

States, 520 U.S. 461, 468 (1997)). That is so even if the issue

was previously unsettled. Id.

20
 A.

Whitley argues that the procedural error occurred here

because, in imposing the non-Guideline sentence, the district

court did not specify whether the sentence was one chosen by way

of departure or by way of variance. For that reason, says

Whitley, the sentence was not adequately explained and

meaningful appellate review has been foreclosed. To Whitley,

the failure to articulate the mode of deviation from the

Guidelines is of particular significance because the PSR

identified a possible predicate for departure under U.S.S.G. §

2B.1(b)(1) and then outlined the findings necessary to depart

thereunder, none of which did the district mention in imposing

the sentence. Whitley also posits other possible bases for

departure that the district court may have had in mind, but

about which it did not remark. In perspective of the

availability of these possible predicates for departure, it is

argued that the district court’s failure to express whether it

was departing or varying constituted procedural error.

In support of his argument, Whitley cites United States v.

Diosdado-Star, 630 F.3d 359, 365 (4th Cir. 2011). However,

Diosdado-Star actually is contrary to the substance of Whitley’s

position because it reasons from the premise that the terms

“departure” and “variance” are interchangeable terms, id. at

364-65, a concept that is the polar opposite of Whitley’s

21
position. And, Diosdado-Star holds that “the method by which

the district court deviates from the Guidelines range does not

alter (1) the review in which courts of appeals must engage, or

(2) the justification the district court must provide,” id. at

365, holdings that are antithetical to the core of Whitley’s

argument. Thus, although Whitley’s argument pays lip service to

Diosdado-Star, in substance, his argument proceeds from the

premise that a non-Guideline sentence cannot be meaningfully

explained or reviewed unless the district court actually

articulates whether the methodology of departure or the

methodology of variance is the means of deviating from the

Guideline range, disposes of any possible ground for departure,

and then keys its explanation of the imposed sentence to the

chosen means of deviation.

Whitley’s substantive position finds support in Irizarry v.

United States, 553 U.S. 708, 714 (2008) which clarifies that,

comments to the contrary in Gall notwithstanding, “variances”

and “departures” are quite different kinds of sentencing modes.

A variance is a sentence outside the advisory Guideline range,

the imposition of which depends on an analysis of the factors in

§ 3553(a). A departure is a sentence outside the advisory

Guideline range that depends on an analysis of the applicable

22
departure provisions in the Guidelines. Irizarry, 553 U.S. at

714-15. 2

Those differences are significant at the district court

level because whether to depart requires a different analysis

than that required in deciding whether to vary. And, the

differences are significant on appellate review, inter alia,

because the standard of review for a departure is de novo, see

Pepper v. United States, 131 S. Ct. 1229, 1244 (2011), whereas

variances are reviewed for abuse of discretion.

Whitley’s argument finds further support in the Guidelines,

specifically Chapter One, Part B General Application Principles,

§ 1B1.1 Application Instructions, which provides:

(a) The court shall determine the kinds of sentence and
the guideline range as set forth in the guidelines by
applying the provisions of this manual in the
following order, except as specifically directed:
[stating that the court shall determine the range as
set forth in §§ 1B1.1(a)(1)–(7) by applying Chapters
Two, Three, Four and Five, and then determine the
sentencing requirements and options (8).]

(b) The court shall then consider Parts H and K of Chapter
Five, Specific Offender Characteristics and
Departures, and any other policy statements or
commentary in the guidelines that might warrant
consideration in imposing sentence. See 18 U.S.C. §
3553(a)(5).

2
A recent opinion of this Court, United States v. Rivera-
Santana, 668 F.3d 95 (4th Cir. 2012), has taken the same view.
Relying on Irizarry, the Court there explained that “[t]he terms
‘variance’ and ‘departure’ describe two distinct sentencing
options available to a sentencing court,” and described the
differences between the two sentencing options. Id. at 100 n.6.

23
 (c) The court shall then consider the applicable factors
in 18 U.S.C. § 3553(a) taken as a whole. See 18 U.S.C.
§ 3553(a).

U.S.S.G. § 1B1.1 (Nov. 1, 2012) (emphasis added) (hereafter

“§ 1B1.1”).

The Court, of course, is bound by the General Application

Principles and the Application Notes in interpreting the

Guidelines. United States v. Price, 711 F.3d 455, 458 (4th Cir.

2013) (citing United States v. Hudson, 272 F.3d 260, 263 (4th

Cir. 2001); United States v. Banks, 130 F.3d 621, 624 (4th Cir.

1997)). That is so because even after the Guidelines were held

to be advisory, 3 they “continue to play an important role in the

sentencing process.” United States v. Dean, 604 F.3d 169, 173

(4th Cir. 2010). 4

Further, it is settled that “[t]he Sentencing Commission

promulgates the guidelines by virtue of an express congressional

delegation of authority for rulemaking,” and thus, “the

guidelines are the equivalent of legislative rules adopted by

federal agencies.” Stinson v. United States, 508 U.S. 36, 44-45

3
United States v. Booker, 543 U.S. 220, 234 (2005).
4
In Kimbrough v. United States, 552 U.S. 85, 101 (2007)
(relying on Gall), the Supreme Court directed that a sentencing
court must “give respectful consideration to the Guidelines,” as
required by 18 U.S.C. § 3553. See also Pepper v. United States,
___ U.S. ___, 131 S. Ct. 1229, 1247 (2011) (“Accordingly, we
have instructed that district courts must still give ‘respectful
consideration’ to the now-advisory Guidelines (and their
accompanying policy statements).”).

24
(1993). And, as this Court has put it: “[t]he [Sentencing]

Commission’s interpretive commentary is ‘akin to an agency’s

interpretation of its own legislative rules,’” and “is therefore

entitled to substantial deference.” United States v. Mason, 284

F.3d 555, 559 (4th Cir. 2002) (citations omitted). “As a

result, Guidelines commentary that ‘interprets or explains a

guideline is authoritative unless it violates the Constitution

or a federal statute, or is inconsistent with, or a plainly

erroneous reading of, that guideline.’” Id. (quoting Stinson,

508 U.S. at 38, 113 S. Ct. at 1915). In United States v. Hood,

628 F.3d 669 (4th Cir. 2010), well after Booker made the

Guidelines advisory, the Court, in deciding the meaning of crime

of violence, recognized the continuing force of Stinson. 5

The amendment that is reflected in § 1B1.1 was implemented

to help secure consistency in the application of the Guidelines

after they were made advisory by Booker. As the majority

opinion explains, Diosdado-Star did not mention Irizarry or §

1B1.1 which took effect on November 1, 2010, almost three months

before Diosdado-Star was issued and slightly more than a month

before arguments were heard. Also, the briefs in Diosdado-Star

5
In Hood, the Court observed that “[t]he Supreme Court has
long held that ‘commentary in the Guidelines Manual that
interprets or explains a guideline is authoritative unless it
violates the Constitution or a federal statute, or is
inconsistent with, or a plainly erroneous reading of, that
guideline.’” Id. at 672.

25
were filed before the amendment took effect, and they do not

mention the amendment.

The Reason for Amendment section accompanying the amendment

to § 1B1.1 points out that, after Booker, most circuits,

including this one, used the three-step approach specified in

the amendment and, indeed, cites United States v. Moreland, 437

F.3d 424, 433 (4th Cir. 2006), as support for that approach. The

same section articulated that “[a] ‘variance’ - i.e., a sentence

outside the guideline range other than as provided for in the

Guidelines Manual [a departure] - is considered by the court

only after departures have been considered.” Amendment 741

(Effective Date: Nov. 1, 2010; 2011 WL 5984683, at *1113

(emphasis added).

Hence, the sentencing catechism in effect at the time of

appellate consideration recognizes that there are significant

differences between “departures” and “variances,” and requires

that, before varying, a court must first consider whether a

departure sentence is in order. And, that logically means that

an adequate explanation of a non-Guideline sentence should state

whether the deviation from the Guidelines is by way of departure

or by way of variance. And, where, as here, there is an

available ground of departure identified in the PSR, the

district court would have to address (and accept or reject) that

ground before imposing a variance sentence.

26
 B.

Thus, on appeal, the Court is confronted with Guideline

provisions that are at squarely odds with a published opinion

issued by the panel of this Court in Diosdado-Star. At the same

time, Henderson necessitates application of the law in effect at

the time of appellate consideration. If, as I understand to be

the rule, deference is owed to § 1B1.1, a regulation that has

the force of law, it would appear that this panel could not

follow Diosdado-Star to apply the law in effect at the time of

appellate consideration.

However, under the principle of interpanel accord,

“customarily a panel considers itself bound by the prior

decision of another panel, absent an in banc overruling or a

superseding contrary decision of the Supreme Court.” Busby v.

Crown Supply, Inc., 896 F.2d 833, 840-41 (4th Cir. 1990); see

also Mentavlos v. Anderson, 249 F.3d 301, 312 n.4 (4th Cir.

2011) (“[A] panel of this court cannot overrule, explicitly or

implicitly, the precedent set by a prior panel of this court.

Only the Supreme Court or this court sitting en banc can do

that.”).

The principle of interpanel accord, however, is not

inflexible. For example, in Derflinger v. Ford Motor Co., 866

F.2d 107, 110 (4th Cir. 1989), the Court applied the principle

of interpanel accord, but noted that a previous panel decision

27
would not be followed where there was a subsequent statutory

amendment (there a subsequent change in an applicable state

statute in a diversity case) that makes the previous decision

wrong. In United States Dep’t of Health & Human Servs. v. Fed.

Labor Regulations Auth., 983 F.2d 578, 581-82 (4th Cir. 1992),

the Court explained that “[a] decision by a panel of this court,

or by the court sitting en banc does not bind subsequent panels

if the decision rests on authority that subsequently becomes

untenable.” Id. (citing Busby, 896 F.2d at 840-41, and Faust v.

South Carolina State Highway Dep’t, 721 F.2d 934, 940 (4th Cir.

1983)).

There are no decisions in this circuit that involve

application of the interpanel accord principle to facts quite

like those presented here in which the change in law occurred

before the prior panel decision, but was not mentioned in the

panel opinion apparently because of the temporal relationship

between the change, the briefing, and the panel opinion.

However, in Moody Nat’l Bank v. GE Life & Annuity Assurance Co.,

383 F.3d 249, 252 (5th Cir. 2004), the Fifth Circuit faced an

issue quite similar to the one presented here.

In Moody Nat’l Bank, the statutory amendment went into

effect approximately two months before the release of the prior

panel decision and after oral argument and briefing in that

case. After explaining the circuit’s settled adherence to the

28
rule of interpanel accord, the Fifth Circuit explained that the

rule that a panel is “bound to follow the prior panel rulings of

this court . . . is inapplicable, however, where Congress makes

a change in statutory law that directly affects a prior panel

opinion.” Id. Observing that “it is clear that [the prior

panel] did not consider the amendments . . . or the relevant

comments thereto in reaching its decision,” id. at 253 n.5, the

Fifth Circuit decided the case in perspective of the recent

amendment. That approach, of course, is consistent with the

comments in Derflinger and with the “subsequently becomes

untenable” rationale in Fed. Labor Regulations.

Of course, the decisions in Derflinger and Fed. Labor

Regulations must be viewed in perspective of the fact that the

Court, sitting en banc, has expressed a clear preference for

adherence to the rule of interpanel accord absent an intervening

opinion from this Court sitting en banc or the Supreme Court.

McMellon v. United States, 387 F.3d 329 (4th Cir. 2004).

However, McMellon did not present the rather unusual

circumstances that are present here, circumstances that involve

the kind of approach that district courts must take respecting

the every-day judicial task of sentencing. Nor, at the time of

McMellon, had Henderson been decided requiring that plain error

be judged at the time of appellate consideration.

29
 Nonetheless, as explained in United States v. White, 670

F.3d 419, 516 (4th Cir. 2012), it is the duty of the subsequent

panel to find an appropriate way to harmonize resolution of a

conflicting issue with a prior panel decision on that issue if

it is possible to do so. Unfortunately, it is not really

possible to harmonize the decision in Diosdado-Star with §

1B1.1.

Considering that the Supreme Court and this Court’s

decisions, for example in Price and Hood, require substantial

deference to the Guidelines, and taking into account that there

is no Constitutional or other infirmity here that would

foreclose such deference, I would conclude that the sentencing

approach articulated in Diosdado-Star is no longer tenable and

that it was error not to proceed as § 1B1.1 requires.

The error was plain, if measured at the time of appellate

consideration, even considering the unsettled circumstance

created by the conflict between § 1B1.1 and Diosdado-Star

because § 1B1.1 must be given substantial deference. United

States v. Henderson, ___ U.S. ___, 113 S. Ct. 1130. District

judges, and most litigants, likely would prefer the less-

structured, and quite sensible, approach reflected in Diosdado-

Star. But, as long as the Guidelines continue to be a part of

the approach to federal sentencing, and as long as they have the

force of law to which substantial deference is owed, it seems to

30
me that § 1B1.1 must be applied as the law at the time of

appellate consideration. For the foregoing reasons, I would

conclude that the error, measured at the time of appellate

consideration, is plain.

However, Whitley does not satisfy the Olano test because

his substantial rights were not prejudiced by the approach taken

by the district court. That is so because talismanic

recitations of sentencing vernacular are never necessary and a

sentence is adequately explained if the Court can determine from

the record what occurred at sentencing. United States v.

Allmendinger, 706 F.3d 330, 343 (4th Cir. 2013); United States

v. Carter, 564 F.3d 325, 328-30 (4th Cir. 2009). As the

majority opinion makes clear, the record shows that the non-

Guideline sentence imposed here was a variance, not a departure;

and, as the majority concludes, the sentence imposed was

adequately explained and is readily amenable to appellate

review.

Relying on a finding of waiver, the majority finds it

unnecessary to address the conflict between Diosdado-Star and §

1B1.1 because Whitley did not raise § 1B1.1 in his brief or at

oral argument and, in fact, purported, in his brief, to rely on

Diosdado-Star. Both of those points are correct, but, I

respectfully suggest that they do not warrant by-passing the

issue. As I understand it, “[w]hen an issue or claim is

31
properly before the court, the court is not limited to the

particular legal theories advanced by the parties, but rather

retains the independent power to identify and apply the proper

construction of governing law.” Kamen v. Kemper Financial

Services, Inc., 500 U.S. 90, 99 (1991) (rejecting contention

that petitioner waived argument by failing to raise it until

reply brief)(citing Arcadia v. Ohio Power Co., 498 U.S. 73, 77

(1990)). Further, an appellate court may consider an argument

“̒antecedent to . . . and ultimately dispositive of’ the dispute

before it, even an issue the parties fail to identify and

brief.” U.S. Nat. Bank of Oregon v. Indep. Ins. Agents of Am.,

Inc., 508 U.S. 439, 445-46 (1993). It seems to me that, in

substance, Whitley’s argument invokes the principles reflected

in § 1B1.1. And, it is the substance of an argument that

presents the issue even if the party making the argument fails

to cite the best authority in support of it. Hence, I would

conclude that Whitley’s argument presents the issue that is the

conflict between § 1B1.1 and Diosdado-Star, even though he has

not cited § 1B1.1 and even though his brief pays lip service to

Diosdado-Star.

32