CHARLES MOORE, PETITIONER V. UNITED STATES OF AMERICA No. 90-6989 In The Supreme Court Of The United States October Term, 1990 On Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Eighth Circuit Brief For The United States In Opposition OPINION BELOW The decision of the court of appeals (Pet. App. A1288-A1296) is reported at 913 F.2d 1288. JURISDICTION The judgment of the court of appeals was entered September 10, 1990. A petition for rehearing was denied November 1, 1990. Pet. App. B. The petition for a writ of certiorari was filed January 31, 1991. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). QUESTION PRESENTED Whether, for purposes of sentencing under the Sentencing Guidelines, the value of goods stolen while in interstate shipment in violation of 18 U.S.C. 659 is measured by their wholesale market value or their retail market value. STATEMENT Petitioner pleaded guilty in the United States District Court for the Eastern District of Missouri to one count of knowing possession of more than $100 worth of property that had been stolen from a rail carrier while in interstate transit, in violation of 18 U.S.C. 659. The district court sentenced him to a 48-month term of imprisonment to be followed by two years' supervised release. The court of appeals affirmed. 1. In April 1988, the FBI, the U.S. Customs Service, several other federal agencies, and state and local authorities jointly began to investigate the sale of stolen goods in East St. Louis, Missouri. That month, an FBI undercover agent and a confidential informant met with Ricky Russell, one of petitioner's co-defendants, to inquire about a sale. In May, Ricky's brother, Tony Russell, contacted the informant and offered to sell him 32 cases of stolen Hennessy cognac for $3,200, and on May 5, the FBI agent purchased one case of the cognac for $100 from Ricky Russell and petitioner. On May 17, the informant and Tony Russell arranged for the sale of six computers that had been stolen from a freight yard. Pet. App. A1290. In early June, petitioner and his co-defendants negotiated and consummated the sale of 35 cases of stolen vodka and 55 pairs of stolen pants. On June 10, the informant struck another deal with petitioner and his co-defendants for 40 cases of stolen Remy Martin cognac. When petitioner and Ricky Russell attempted to deliver the cognac, they were arrested. Id. at A1291. 2. Petitioner and his co-defendants were charged in a five-count indictment with possession of the stolen property. Petitioner pleaded guilty to one count alleging knowing possession of the vodka and the pants. As part of his plea agreement, petitioner signed a Stipulation of Facts, which stated that the vodka had a retail value of $1,530 and the pants had a retail value of $1,292.50. Pet. App. A1293. Petitioner argued at a sentencing hearing that his sentence should be based on the wholesale value of the stolen items, rather than their retail value. Sent. Tr. 103. He did not, however, deny that the retail value was $24,628.90, as stated in the stipulation of his co-defendant. /1/ The district court ruled that the retail value applied, and increased petitioner's offense level six points under Sentencing Guidelines Section 2B1.1(b)(1)(G) (Nov. 1987), which at that time governed offense level increases for stolen goods valued between $20,000 and $50,000. /2/ 3. Petitioner contended on appeal that the district court erred in sentencing him based on the retail value of the stolen goods. /3/ He insisted that the wholesale value should have been used to compute his sentence, and that the record supported a finding of a wholesale value $3,748.40 less than retail value. Pet. C.A. Br. 5. Had the district court used that figure, petitioner's sentence would have been enhanced five points under Guidelines Section 2B1.1(b)(1)(F), rather than six points under Section 2B1.1(b)(1)(G), which would have lowered his sentencing range to 37-46 months from 41-51 months. The court of appeals upheld petitioner's sentence. Although the court found that "the Sentencing Guidelines do not specify whether wholesale market value or retail market value is appropriate," Pet. App. A1292, it looked to the statute under which petitioner had been convicted, 18 U.S.C. 659, and determined that under that statute "value" was defined as "face, par, or market value, or cost price, either wholesale or retail, whichever is greater." Pet. App. A1292. The court also held that in light of the Guidelines' goal of uniform sentencing, a single measure of value was appropriate. Finally, the court determined that "there is essentially a failure of proof as to the wholesale value of the goods," id. at A1293 n.4, and that the retail value provided the most reliable indicator of value. One judge dissented on the ground that, in his view, the Guidelines require market value to be determined with respect to the victim, and since the victim in this case was a wholesaler, the wholesale value should have been used to calculate petitioner's sentence. ARGUMENT Petitioner reasserts (Pet. 2-5) his argument that the wholesale value of the cognac should have been used to determine his sentencing range. Petitione was sentenced pursuant to Guidelines Section 2B1.2, which calls for increases in the base offense level according to the "Specific Offense Characteristics" table, located at Guidelines Section 2B1.1(b)(1). That table lists a range of "loss(es)" caused by a crime and gives the corresponding sentence enhancement for each loss. /4/ "Loss" is defined in Application Note 2 in the Commentary to Section 2B1.1 as "the value of the property taken. * * * Ordinarily, when property is taken * * * the loss is the fair market value of the particular property at issue. Where market value is difficult to ascertain or inadequate to measure harm to the victim, the court may measure loss in some other way, such as reasonable replacement cost to the victim." /5/ Application Note 3 states that "loss need not be determined with precision, and may be inferred from any reasonably reliable information available." Although neither Section 2B1.1(b)(1) nor its application notes indicate explicitly whether "value" means wholesale or retail value, the clear thrust of the Guidelines is that the greatest reliable measure -- in this case, the retail value -- should be used to compute sentences. The original version of Application Note 2 to Section 2B1.1 stated that "(l)oss is to be based upon replacement cost to the victim or market value of the property, whichever is greater." /6/ Cases interpreting Section 2B1.1 consistently choose the highest ascertainable value, however that may be measured. See United States v. Wilson, 900 F.2d 1350 (9th Cir. 1990) (loss to victim, not resale value, proper in measuring value of stolen biotechnology data); United States v. Jenkins, 901 F.2d 1075 (11th Cir.) (face value of stolen non-negotiable securities, not replacement cost to victim, proper to measure loss), cert. denied, 111 S. Ct. 259 (1990). Likewise, in cases involving stolen drugs, Application Note 5 to Section 2B1.1 instructs that "(c)ontrolled substances should be valued at their estimated street value," not their legitimate-market value or the victim's replacement cost. See Section 2B1.1, Application Note 2 (in case of stolen check, loss is face value of check, even if not cashed). /7/ Petitioner's suggestion (Pet. 2-5) that loss must always be measured with reference to the victim therefore has little force. /8/ Our interpretation is consistent with the guiding spirit behind the Sentencing Guidelines: similar crimes committed by similar criminals should be punished alike. See Guidelines Ch.1, Part A(3) (Policy Statement). Two identical criminals who steal the same goods from two railroad cars should not be punished differently merely because of the fortuity that one of the trains was destined for a retailer and the other for a wholesaler. Instead, both thieves should be sentenced equally. Using the retail value of the goods is the best way to assure uniformity of sentences. That is particularly true in this case, where the retail value of the stolen cognac was known and uncontested, but its wholesale value was undetermined and petitioner was unable to prove it. See Pet. App. A1293 n.4. /9/ The courts below were therefore correct in using retail value to determine petitioner's sentence. CONCLUSION The petition for a writ of certiorari should be denied. Respectfully submitted. KENNETH W. STARR Solicitor General ROBERT S. MUELLER, III Assistant Attorney General RICHARD A. FRIEDMAN Attorney APRIL 1991 /1/ Contrary to the court of appeals' opinion (Pet. App. A1292), petitioner did not stipulate that the value of the stolen goods exceeded $24,000.00. That stipulation was made by co-defendant Tony Russell; petitioner stipulated only to the value of the vodka and pants. See Sent. Tr. 36. /2/ Section 2B1.1(b)(1)(G) has since been changed to cover a range of $20,000-$39,999. Because petitioner's crime would have fallen within the range of Section 2B1.1(b)(1)(G) whether or not the district court included the value of the stolen computers (whose inclusion petitioner had challenged), the court did not consider them in determining petitioner's sentence. Sent. Tr. 130. The total retail value of merchandise for which petitioner was sentenced was $21,028.90, which included the vodka, the pants, the Remy Martin Cognac and the Hennessy Cognac. /3/ Petitioner only challenged the value assigned to the Remy Martin cognac and Hennessy cognac, and not the value of the pants and vodka, Pet. C.A. Br. 4, perhaps considering himself bound by his stipulation as to the value of those items. /4/ Guidelines Section 1B1.3(a)(2) requires that the sentence of a defendant who pleads guilty to a single theft offense should take into account "all acts * * * that were part of the same course of conduct or common scheme." The district court accordingly included in the offense-conduct the value of the Hennessy cognac and the Remy Martin cognac, as well as the property directly involved in petitioner's offense of conviction, the vodka and the pants. Petitioner does not challenge that aggregation of conduct. /5/ The Application Note became effective on June 15, 1988, and therefore applied to petitioner's September 1988 sentence. /6/ The June 1988 amendment to the Application Note was intended "to clarify the guideline in respect to the determination of loss." Sentencing Guidelines (Nov. 1, 1989 ed.) App. C, Note 7, p. C.11. There is no suggestion in the modified Application Note or in the explanation of the modification that it was meant to change the thrust of the Guideline: that the sentencing range is to be based on the greater of "replacement cost" or "market value." /7/ The Guidelines' preference for use of the highest permissible sentencing range is also demonstrated in calculating drug quantities. The Guidelines direct that, when calculating the quantity of drugs contained in mixed substances, the quantity is to be determined so as to produce the greatest sentence. See footnote to Drug Quantity Table. /8/ The Background portion of the Commentary to Section 2B1.1 states that the "value of property taken * * * is an indicator of both the harm to the victim and the gain to the defendant." The focus of the Guideline is thus not on one party or the other, but on the culpability of the behavior at issue. Looking to the victim to determine the value of stolen items is indicated only "(w)here market value is difficult to ascertain or inadequate to measure harm to the victim," Section 2B1.1, Application Note 2; for instance, where an item has no readily ascertainable market value. See United States v. Wilson, supra (no market value for biotechnology data); United States v. Pemberton, 904 F.2d 515 (9th Cir. 1990) (no market for stolen technical drawings). Moreover, in this case, petitioner may have gained more than the wholesale value of the stolen cognac: had petitioner intended to drink the liquor himself or with his co-defendants, he would have saved its retail price. That possibility illustrates the error in looking only at the victim or at the thief, rather than at the conduct. /9/ Use of retail market value is also consistent with the statute to which petitioner pleaded guilty. Under 18 U.S.C. 659, the "value" of goods is defined as in 18 U.S.C. 641, which directs that "value" means "market value, or cost price, wholesale or retail, whichever is greater." See United States v. Watson, 570 F.2d 282 (8th Cir. 1978); United States v. Payne, 467 F.2d 828 (5th Cir. 1972), cert. denied, 410 U.S. 912 (1973); United States v. Dandridge, 437 F.2d 1324 (7th Cir.), cert. denied, 403 U.S. 934 (1971); Russell v. United States, 288 F.2d 520 (9th Cir. 1961), cert. denied, 371 U.S. 926 (1962). Although, as petitioner argues (Pet. 4-5), sentences for violations of 18 U.S.C. 2315 also are determined under Guidelines Section 2B1.1, and "value" under Section 2315 is defined as the price a willing buyer would pay to a willing seller at the time and place the property was stolen, see United States v. Cummings, 798 F.2d 413, 416 (10th Cir. 1986); United States v. Bakken, 734 F.2d 1273, 1278 (7th Cir. 1984), the definitions in that statute do not control sentencing under Section 659.