United States v. Graham, Perry A.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 30, 1998 Decided December 22, 1998

No. 97-3138

United States of America,

Appellee

v.

Perry A. Graham,

Appellant

Consolidated with

Nos. 97-3139 and 97-3151

Appeals from the United States District Court

for the District of Columbia

(No. 92cr00287-01)

(No. 92cr00287-02)

(No. 92cr00287-03)

Pleasant S. Broadnax, III, appointed by the court, argued
the cause and filed the brief for appellant Perry A. Graham.

Robert E. Sanders, appointed by the court, argued the
cause and filed the briefs for appellant Terrence A. Terrell.

Mary E. Davis, appointed by the court, argued the cause
and filed the brief for appellant Roger V. Smith.

Barbara A. Grewe, Assistant U.S. Attorney, argued the
cause for appellee. On the brief were Wilma A. Lewis, U.S.
Attorney, John R. Fisher, Mary-Patrice Brown, Lynn C.
Leibovitz and Clark W. Metz, Assistant U.S. Attorneys.

Before: Edwards, Chief Judge, Ginsburg and Rogers,
Circuit Judges.

Opinion for the Court filed by Circuit Judge Rogers.

Rogers, Circuit Judge: In United States v. Graham, 83
F.3d 1466 (D.C. Cir. 1996), we affirmed the convictions of
Terrence Terrell, Perry Graham, and Roger Smith for vari-
ous narcotics related offenses as members of the "Newton
Street Crew," but vacated the sentences so that the district
court could (1) make individualized Rule 32 findings on chal-
lenges to the Presentence Report, (2) make adequate findings
on the volume of drug sales attributable to each appellant,
and (3) explain the foundation for finding that Terrell played
a managerial role in the conspiracy. Appellants now appeal
from resentencing on their convictions for conspiracy to dis-
tribute a large volume of crack, each attempting to minimize
his role in the conspiracy and thereby reduce his sentence.
Our focus is on Terrell's contention that the district court
erred in enhancing his base offense level by three levels
under U.S.S.G. s 3B1.1(b) for serving as a manager or super-
visor within the conspiracy. Because the government's evi-
dence was deficient in that regard, and because we conclude
that Graham's and Smith's contentions lack merit, as do
Terrell's other contentions, we affirm the judgments of resen-
tencing for Graham and Smith but vacate the adjustment of
Terrell's base offense level and remand Terrell's case for
resentencing.

I.

The most relevant conviction for sentencing purposes was
count one of the indictment, which charged conspiracy to
distribute crack cocaine. The sentence on count one is the
longest for each appellant; the remaining sentences run
concurrently. Upon resentencing after remand, the district
court made detailed findings about appellants' participation in
the Newton Street crack distribution ring. The court then
applied the 1995 Guidelines to impose the following sentences:

Terrell and Smith:
Base Offense Level: 38
Managerial Role Adjustment:+3
Criminal Hist. Category: I
Range: 324-405 months
Sentence: 324 months

Graham:
Base Offense Level: 39
Managerial Role Adjustment:+3
Criminal Hist. Category: I
Range: 360-Life
Sentence: 360 months
Under the 1995 Sentencing Guidelines, distribution of more
than 1.5 KG of cocaine base ("crack") warrants a base offense
level of 38. See U.S.S.G. s 2D1.1(c)(1). A defendant is
responsible for the drugs that he personally distributed as
well as the "reasonably foreseeable" distribution by "others in
furtherance of [a] jointly undertaken criminal activity, that
occurred during the commission of the offense of convic-
tion,...." U.S.S.G. s 1B1.3(a)(1). The district court must
determine weights by a preponderance of the evidence sub-
ject to appellate review for clear error. See United States v.
Lam Kwong-Wah, 966 F.2d 682, 685-688 (D.C. Cir. 1992).

The district court found that Terrell was responsible for
approximately 19 KG of crack, as follows: approximately 2
KG sold, 6.5 KG packaged, 6.5 KG distributed by co-
conspirator Frank Lynch, and 4.5 KG distributed by Graham.
As we understand Terrell's position, he generally challenges

the district court's methodology for calculating distribution
weights without proposing an alternative interpretation of the
record that would reduce his liability below 1.5 KG. In any
event, each of his arguments, save one, lacks merit.1

Terrell's sole persuasive challenge to his sentence arises
from the district court's imposition of a three-level enhance-
ment under U.S.S.G. s 3B1.1(b) for being a "manager or
supervisor (but not an organizer or leader)" of the charged
criminal activity. In essence, Terrell contends that the rec-
ord shows only that he was a gofer rather than a manager,
and that he therefore was insufficiently culpable to justify an
enhancement.

The Sentencing Guidelines permit the district court to
adjust base offense level because of a defendant's "aggrava-
ting role" in an offense. U.S.S.G. s 3B1.1. The magnitude of
the enhancement varies with the culpability of the defendant:
4 levels for leading or organizing relatively extensive criminal
activity; 3 levels for managing or supervising such activity;
and 2 levels for leading, organizing, managing, or supervising
relatively confined criminal activity. See id. An enhance-
ment under s 3B1.1 must be supported by the preponderance
of the evidence, see United States v. Thomas, 114 F.3d 228,

__________
1 Terrell's contention that the district court failed to make
required findings about the scope of his conspiratorial agreements
with Lynch and Graham is belied by the record; the required
findings appear in paragraphs eight through ten of the district
court's findings of fact and conclusions of law at sentencing. Simi-
larly, Terrell's implication that the district court erred by attribut-
ing drugs to Terrell that were sold prior to July 1990 in furtherance
of a conspiracy distinct from the one for which he was convicted is
belied by the court's express statement that drugs sold prior to July
1990 were not attributed to Terrell. See Sentencing Opinion at
p 1(a). To the extent that Terrell contends that the record is
insufficient to justify an inference about the weight of drugs he sold
in transactions alluded to but not described by witnesses, see
United States v. Badru, 97 F.3d 1471, 1477 (D.C. Cir. 1996), we
need not decide whether the district court erred by attributing an
extra 1.14 KG to Terrell because even without this increase, he

261 (D.C. Cir. 1997), but such evidence may be circumstantial,
see United States v. Layeni, 90 F.3d 514, 524 (D.C. Cir. 1996).
We review the district court's factual findings for clear error
and accord "due deference to the district court's application of
the guidelines to the facts." 18 U.S.C. s 3742(e); see also
United States v. Bapack, 129 F.3d 1320, 1324 (D.C. Cir. 1997).
According to the Guidelines, an average drug dealer who
sold the same amount of crack as Terrell would have received
an offense level of 38. Terrell, however, received an adjusted
offense level of 41 because the district court concluded that
his drug dealing activity was more culpable, based on his
supervisory role within a large conspiracy, than that of many
of his fellow drug dealers. This interpretation of the culpabil-
ity standards in s 3B1.1(b) stretches the guideline beyond
recognition.2
In applying s 3B1.1(b), the district court relied on three
factual conclusions. First, the district court concluded that
Terrell was a "lieutenant" in the Newton Street Crew. The
court's sole support in the record for this conclusion is the
testimony of William Woodfork, who stated that Terrell was
"sometimes" a lieutenant. Nothing in Woodfork's testimony
explains how often Terrell acted as a lieutenant, what actions
Terrell performed when purportedly acting as a lieutenant,
whether all lieutenants acted alike, or--most importantly--
why he believed that Terrell was a lieutenant, as opposed to
some other type of cog in the Newton Street machine.
Woodfork's testimony is therefore a vivid illustration of why
conclusory labels are inadequate when assessing culpability
under s 3B1.1. See, e.g., Thomas, 114 F.3d at 260; United
States v. Sostre, 967 F.2d 728, 733 n.5 (1st Cir. 1992).3 Hence
__________
would still be liable for more than enough cocaine base to justify his
sentence.

2 For reasons we do not understand, the government insists on
characterizing its case as based on "ampl[e]" record evidence, see
Appellee's Brief at 26, even though this court on direct appeal and
the district court on resentencing noted that the government's
position was weak. See Graham, 83 F.3d at 1482 (stating that
s 3B1.1 issue was "close"); Sept. 26, 1997 Hearing Transcript at 4
(stating that government's evidence was "minimal").

3 At oral argument, the government provided an illustration of
the mischief that labels can engender when divorced from context.
Counsel stated:

this testimony cannot provide a basis for a s 3B1.1(b) en-
hancement.

Second, the district court found that Terrell acted "in
effect" as a "block overseer" by directing potential drug
buyers to fellow conspirators acting as sellers. The phrase
"block overseer" does not appear to be part of the Newton
Street lexicon, but, in any event, the title is substantially
inflated given that the testimony cited by the district court
shows only that Terrell, in the course of selling drugs, would
point customers to the people carrying drugs.4 We agree
with the First and Tenth Circuits that the mere act of
directing buyers to sellers does not constitute management or
supervision warranting an enhancement. See Sostre, 967
F.2d at 733; United States v. Roberts, 14 F.3d 502, 524 n.37
(10th Cir. 1993). Chapter 3B1.1(b) targets managers, not
concierges and bellhops.
__________
... Woodfork's testimony [was] that at times, Mr. Terrell acted
as a lieutenant. And the definition of lieutenant was you were
next to the kingpin. You knew exactly what was going on.
And you were in that role.

Oral Arg. Tr. at 19. Woodfork did use the word "lieutenant" to
describe Terrell, but he provided no evidence that Terrell "knew
exactly what was going on" or was otherwise "next to the kingpin."
Nor does Woodfork's testimony indicate that he had a specific
definition in mind when he referred to Terrell as an occasional
lieutenant.

4 The district court cited the testimony of Frank Lynch, which
was as follows:

Q. What was Terrence Terrell doing out there in July of 1990?

A. Selling drugs.

Q. And when you say selling drugs, what would you see him do?

A. Direct customers, you know, selling--if they want some, he
would get it to them.

7/29/93 Transcript at 29. This testimony does not establish that
Terrell was a "block overseer."

Third, the district court found that Terrell operated within
a middle-zone of the Newton Street Crew hierarchy. The
evidence supports this view of Terrell, but we conclude that
not being at the bottom rung of a conspiracy is merely a
necessary but not a sufficient condition to justify an enhance-
ment under s 3B1.1(b).

Terrell was not one of the most junior members of the
Newton Street Crew. The district court found that Terrell
was part of a distribution "clique" with Graham (who is
Terrell's cousin), Smith, and Lynch, under the overall leader-
ship of Mark Hoyle and John McCollough. At the bottom
rung of this clique were runners and "pipeheads" who assist-
ed in the day-to-day operations of the conspiracy. Terrell
was more than just a runner, and he apparently was not a
"pipehead." Rather, Terrell on occasion provided a runner
with crack and worked closely with individuals, such as
Graham and Lynch, who were central figures in the Newton
Street conspiracy. For example, Lynch testified that he
stored drugs at Terrell's house and relied on Terrell to direct
customers to him. This fact establishes that Terrell was a
crack dealer; but it does not indicate that he supervised other
dealers. Indeed, to the extent relevant at all, Lynch's testi-
mony demonstrates that Terrell was a subordinate to Lynch,
who was a lieutenant, rather than a lieutenant in his own
right. Likewise, the fact that Terrell is Graham's cousin is,
by itself, insufficient to prove that Terrell acted as a manager
or supervisor. See Roberts, 14 F.3d at 524.

Terrell differed from his co-defendants in material re-
spects. For example, witnesses testified that Terrell was
essentially a 'wannabe' who liked hanging out with his drug-
dealing friends and relatives, and wearing flashy clothes
purchased with drug money, but who could not be trusted
with operational control over the enterprise. Indeed, when
Terrell asked Hoyle to supply him with drugs, Hoyle refused
because Terrell was not ready; a lieutenant intervened on
Terrell's behalf, but was forced to pay Hoyle $1,000 compen-
sation when Terrell "messed up." This incident occurred at a
relatively early date in the conspiracy, and there is no evi-
dence to suggest that Terrell ever redeemed himself or

gained more responsibility as time passed. This behavior is
also consistent with testimony that one lieutenant cut off his
distribution arrangement with Terrell because Terrell was
incompetent; he was too "lazy" to sell drugs and could not
protect the drugs that were entrusted to him. Of course,
characterizing Terrell as a "wannabe" does not excuse his
conduct; wannabes who break the law warrant incarceration.
The question is whether he falls within the definition of
"manager or supervisor" in s 3B1.1(b).

Neither the district court nor the government has cited any
evidence to dispel our view of Terrell as simply a barnacle
clinging to the outer hull of middle management. The record
is devoid of any evidence that Terrell received extra compen-
sation for serving as a manager, disciplined any lower-
ranking member of the conspiracy, altered the conspiracy's
policies or procedures in any respect, provided guidance to
senior managers or subordinates, issued any orders on behalf
of the conspiracy, or otherwise held himself out as a link in
the chain of command. All the record shows is that Terrell
sold drugs and worked closely with others who sold drugs
while occasionally assisting with drug sales by runners and
pipeheads. This behavior is consistent with that of a drug
dealer subject to sentencing at an offense level of 38, but does
not justify a three level upward adjustment. See United
States v. Glinton, 154 F.3d 1245, 1260 (11th Cir. 1998).

Nevertheless, the government contends, and the district
court apparently agreed, that the mere fact that Terrell was
not the most junior person in the Newton Street Crew
renders him a manager of those beneath him in the Crew's
"hierarchy." According to the government, the conspiracy in
which Terrell was a member consisted of numerous "strata,"
and Terrell occupied a stratum above pipeheads and some of
the runners. The government then argues that because it
can draw a vertical line on an organizational chart from some
conspirators to Terrell, Terrell must be a manager or supervi-
sor within the meaning of s 3B1.1(b).

There is, however, nothing to indicate that the Sentencing
Commission intended s 3B1.1(b) analysis to devolve into a

hollow exercise in spatial geometry. Rather, the Commission
designed s 3B1.1(b) to distinguish between defendants based
on "relative responsibility" and has provided substantive fac-
tors to assist courts in applying the guideline. See U.S.S.G.
s 3B1.1 background note. These factors include the defen-
dant's

exercise of decisionmaking authority, the nature of his
participation in the commission of the offense, his re-
cruitment of accomplices, any claimed right to a larger
share of the fruits of the crime, the degree of his
participation in planning or organizing the offense, the
nature and scope of the illegal activity, and the degree of
control or authority he exercised over others.

Thomas, 114 F.3d at 261.5 No one factor is dispositive. See
id.; U.S.S.G. s 3B1.1 application note 4. These factors im-
pose a meaningful limit on prosecutorial and judicial discre-
tion to enhance sentences, and cannot be read to create a
formulaic sentencing methodology. As the Seventh Circuit
has observed, "One's status as a middleman in a drug distri-
bution chain does not, standing alone, make one a manager or
supervisor," United States v. Thompson, 944 F.2d 1331, 1349
(7th Cir. 1991); and, as the First Circuit noted, being an
"essential" participant in a conspiracy is not alone sufficient
to trigger s 3B1.1(b), Sostre, 967 F.2d at 733.

__________
5 The court in Thomas adopted these factors nearly verbatim
from application note 4 to s 3B1.1. Technically, application note 4
is not directly applicable because the note governs in cases in which
the court must distinguish an organizer or leader from a manager
or supervisor. By contrast, this case--like Thomas--requires dis-
tinguishing a manager or supervisor from a mere participant in a
crime. The factors enumerated in application note 4 nonetheless
apply here as well because the two inquiries differ only in degree
rather than in kind. Whether a court must distinguish a manager
from a participant or a leader from a manager, it must rely on
factors that parse defendants based on "relative culpability."
Thomas, 114 F.3d at 261. The factors in application note 4 are
tailored to this end, and therefore aid our analysis in the present
case.

The more plausible reading of s 3B1.1 is that it creates
three relevant tiers for conspiracies that are "extensive": a
tier for leaders and organizers, a tier for managers and
supervisors, and a tier for everyone else. See U.S.S.G.
s 3B1.1 and application notes. When confronted with a
heavily stratified conspiracy, a court must superimpose the
s 3B1.1 framework over the organizational chart of the con-
spiracy and, using the factors noted above, decide where to
draw the two relevant lines that determine who qualifies for a
s 3B1.1 enhancement. All persons receiving an enhancement
must exercise some control over others, see United States v.
Baylor, 97 F.3d 542, 548 (D.C. Cir. 1996); United States v.
Kelley, 36 F.3d 1118, 1129 (D.C. Cir. 1994),6 but we do not
discern any basis in the guidelines for enhancing the sentence
of every participant in a conspiracy who does not reside in its
bottom layer. In other words, not all hierarchical distinctions
among offenders matter for sentencing.

Consequently, while Terrell may have operated at a differ-
ent level than some of his colleagues, this fact alone did not
make him a manager or supervisor. Because the record does
not provide any other evidence supporting an enhancement,
cf. Thomas, 114 F.3d at 261-62, the district court could not
properly find that Terrell is a manager or supervisor within
the meaning of s 3B1.1(b) as he was not significantly more
culpable than other crack dealers within the Newton Street
Crew. We therefore vacate Terrell's sentence and remand
his case for resentencing.

II.

Graham's and Smith's contentions require only brief discus-
sion. We find no plain error by the district court in not
holding an evidentiary hearing to permit cross-examination of
witnesses whose testimony was necessary to determine the
quantity of drugs for which Graham would be held liable
under U.S.S.G. s 2D1.1(c). See U.S.S.G. s 6A1.3 commen-

__________
6 An upward departure, as opposed to an adjustment, may be
warranted for offenders who manage property, assets, or activities
rather than people. See U.S.S.G. s 3B1.1 application note 2.

tary; United States v. Plunkett, 125 F.3d 873, 874 (D.C. Cir.
1997). Our review of the record shows no reason, and
Graham has not identified any, to conclude that an evidentia-
ry hearing would have produced relevant information not
otherwise available to the district court. See United States v.
Olano, 507 U.S. 725, 735 (1993); Fed. R. Crim. P. 32(c).

Nor is there merit to Graham's contention that the govern-
ment failed to comply with an agreement that would have
limited his sentence; the government proffered at a pre-trial
detention hearing that Graham had distributed approximately
130 grams of crack, but there is nothing to suggest that the
government represented that its proffer accounted for all of
the drugs that Graham had distributed, as opposed to some
threshold amount sufficient to warrant pre-trial detention,
much less that the government would have been bound by
such a proffer had its proof at trial differed. In any event,
because Graham failed to raise any claim of detrimental
reliance at resentencing, we review only for plain error, and
find none.

Smith's contention that in enhancing his base offense level
by three levels to account for his managerial role in the
Newton Street Crew, the district court relied in part on the
testimony of William Woodfork, who has purportedly recant-
ed his testimony, gains naught for Smith. Even without
Woodfork's testimony, the record demonstrates that Smith
frequently was a manager and supervisor within the drug
distribution conspiracy for which he was convicted. For
example, Smith gave crack to "pipeheads" who would sell it
and give him the proceeds, watched over "pipeheads" while a
colleague was away, "oversee'd sales" for a senior conspirator,
collected money from runners, and was filmed--and thus
observed by the district court7--directing drug transactions
by subordinate runners. Hence, the district court's factual

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7 Smith cites testimony that provides alternative explanations
for the events on tape, but the district court heard this testimony
and rejected it in favor of its own direct observations. Based on the
record before us, we lack any foundation for disputing the district
court's characterization of visual images that it witnessed.

conclusions and application of the guidelines to the facts merit
deference. See United States v. Harris, 959 F.2d 246, 266
(D.C. Cir. 1992); 18 U.S.C s 3742(e).

Accordingly, we affirm the sentences of Graham and Smith
but vacate Terrell's sentence and remand for resentencing;
while district courts may sentence convicted drug dealers to
long prison terms specified in U.S.S.G. s 2D1.1, only an
especially culpable sub-class of dealers, as defined in s 3B1.1,
are singled out by the Commission for incarceration for an
even longer time, and here the government's evidence failed
to establish that Terrell fell into this sub-class.