Seventh Circuit Clarifies Sentencing of Wholesale Drug Traffickers, Encourages Dose-Based Approach

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Category: Criminal Law & Process, Federal Criminal Law & Process, Federal Sentencing, Public, Seventh Circuit
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Wholesalers often sell drugs in relatively pure form, with the knowledge that retailers will dilute the drugs before reselling them on the street. Indeed, some powerful drugs, like the painkiller fentanyl, must be substantially diluted before they can be safely consumed. For that reason, wholesalers may end up selling much smaller quantities than retailers, at least as measured simply by weight. This presents a dilemma for sentencing, especially in the federal system, where weight drives sentences: should a wholesaler’s sentence be determined by the weight he sold, or by the weight of the diluted form of his product sold on the street?

The question has particular importance in fentanyl cases, as illustrated by the Seventh Circuit’s recent decision in United States v. Alvarado-Tizoc (No. 10-1613). In sentencing the wholesaler-defendants, the district court chose to attribute to them the full retail quantities, which were 11 to 16 times greater than the wholesale quantities.

This was improper, the Seventh Circuit held.  

The district court had relied on the relevant conduction provision of the guidelines, which makes defendants responsible for the reasonably foreseeable acts of others in furtherance of a “jointly undertaken criminal activity.” However, drawing on established principles of conspiracy law, the Seventh Circuit held that wholesalers and retailers do not necessarily engage in a “jointly undertaken criminal activity.” In general, a buyer-seller relationship does not establish a conspiracy – a point my Criminal Law students will immediately recognize (I hope) – and the same principle applies to the “jointly undertaken criminal activity” guideline. Moreover, the record in Alvarado-Tizoc did not indicate anything special in the relationship between wholesaler-defendants and their buyers so as to warrant a finding that they were jointly engaged in the retail sale of fentanyl.

The courts have not always been clear or consistent in their description of the relationship between the vicarious liability doctrine for coconspirators and the relevant conduct provision of the sentencing guidelines. For that reason, the unusually lucid treatment of the topic in Alvarado-Tizoc (penned by Judge Posner) warrants quoting at length:

The only vulnerable point in the sentencing of two of these defendants . . . was the judge’s finding that the jointly undertaken criminal activity included the retail sale of the fentanyl. There was insufficient evidence that the retailers to whom the defendants sold heroin and fentanyl were, so far as their relation to the defendants was concerned, anything more than buyers. The government points out that the defendants “specifically sought out, and received, information about [the retailers’] heroin business . . . and thus purposefully kept apprised of their operation. For instance, they asked specific questions about how much money [one of the retailers] made from the heroin he obtained from them” and informed them that “the ‘new heroin’ [which was actually fentanyl] could be diluted even further.” All this just shows a wholesaler’s natural motivation to gauge demand for his product and if possible increase that demand and so be able to raise his price. The government also notes that the defendants were “exclusive supplier[s]” of the retailers and therefore had a “vested interest in the success and profitability” of the operation. But exclusive dealing is common and every wholesaler has a vested interest in the success of his retailers. And finally the fact that the buyers diluted the fentanyl they received (and that this was foreseeable to the defendants) no more proved a conspiracy than the fact that a seller of chocolate syrup to a soda fountain knows that the syrup will be mixed with milk or soda to make chocolate milk shakes or chocolate sodas rather than being sold in its original, undiluted form makes the seller a conspirator in the retail sale of adulterated chocolate drinks.

A seller is not a party to a conspiracy with a mere buyer from him. E.g., United States v. Vallar, 635 F.3d 271, 286-87 (7th Cir. 2011); United States v. Colon, 549 F.3d 565, 567-71 (7th Cir. 2008). And while the applicable Sentencing Guideline as we know uses the term “jointly undertaken activity” rather than “conspiracy,” and indeed provides that the jointly undertaken activity need not be “charged as a conspiracy,” the case law generally treats the terms “jointly undertaken activity” and “conspiracy” as interchangeable.  See, e.g., Gray-Bey v. United States, 156 F.3d 733, 740-42 (7th Cir. 1998); United States v. McDuffy, 90 F.3d 233, 235-36 (7th Cir. 1996). The concept of conspiracy is frequently employed in criminal cases without a conspiracy actually being charged, as when proof of a conspiracy is used to render a statement by a coconspirator admissible against the defendant; and so it is with the Guidelines’ equivalent, a “jointly undertaken activity.”

Some cases point out that “jointly undertaken activity” should not be equated to “conspiracy” because a defendant could have joined a conspiracy without having joined in or agreed to all the activities undertaken by it. United States v. Soto-Piedra, supra, 525 F.3d at 531-32, and cases cited there; U.S.S.G. § 1B1.3 Application Note 2. But there is no actual conflict; the cases we cited earlier (Gray-Bey andMcDuffy) impose a sentencing enhancement on a conspirator for a jointly undertaken activity only if the activity was reasonably foreseeable to him, for foreseeing or being charged with foreseeing an activity makes him a joint participant with the other conspirators. United States v. Hernandez-Santiago, 92 F.3d 97, 100 (2d Cir. 1996). But this qualification on equating conspiracy to jointly undertaken activity cannot help the government; if there was no conspiracy between the defendants and the retailers, a fortiori the former were not engaged in a jointly undertaken activity with the latter.  (5-8)

But Posner also had a bigger and more challenging point to make about sentencing in cases involving fentanyl and other highly potent drugs.  As Posner sees it, since the guidelines’ drug equivalency table already takes into account differences in drug potency, there is potentially a form of double counting whenever a defendant is held responsible for the full weight of the diluted form of a drug:

But a point of more general significance for cases involving fentanyl and other superstrong narcotics is that attributing the amount of the diluted retail product to the seller (whether the seller is a retailer, or a wholesaler conspiring with a retailer) in computing the Guidelines sentence involves double counting. The quantity of the diluted retail product, if attributed to a wholesaler defendant, will already account, in part anyway, for the fact that fentanyl is more potent than heroin; if the same weight of fentanyl and heroin bought by a retailer makes 50 retail doses of fentanyl versus 5 of heroin, the seller of fentanyl will be “credited” with 10 times the quantity as the seller of heroin. To multiply 10 by 2.5 is to double count— more precisely to 2.5-count. And double or other multiple counting—at least when the judge is unconscious of doing it—is improper . . . .

Thus, irrespective of the fact that the quantities sold by the retailers could not be attributed to the defendants on the theory that they were conspiring with the retailers (rather than merely supplying them), the fact that by selling fentanyl instead of heroin the defendants were responsible for a larger number of doses sold to the ultimate consumers was a basis for a higher sentence—but a basis already partly reflected in the drug equivalency tables in the Guidelines.  (8-9)

In light of dilution-based difficulties with the weight-based sentencing guidelines, Posner invited district judges to use their post-Booker discretion to use a more sensible dose-based approach: sentences should not vary based on weight alone, but also take into account potency and purity.  The real question to answer in determining the relative gravity of a drug trafficking offense is not the weight sold, but the number of doses sold.  (10)  Posner observed:

Adjusting for potency makes more sense than adjusting for weight. Emphasis on the weight of a defendant’s drugs (in this case the weight of the dilute drugs sold by customers of defendants), whether or not they are diluted, has the perverse effect of giving drug dealers an incentive to possess and sell drugs of high purity or potency and makes the length of sentences depend perversely on the weight of the inactive ingredients in the drugs. Jonathan P. Caulkins et al., “Mandatory Minimum Drug Sentencee: Throwing Away the Key or the Taxpayers’ Money?” 22 (RAND Corp. Drug Policy Research Center 1997).  (11)

Cross posted at Life Sentences.

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