United States v. Duane Edward Nolder

887 F.2d 140, 1989 U.S. App. LEXIS 14973, 1989 WL 115416

• Court: Court of Appeals for the Eighth Circuit
• Decided: October 4, 1989
• Docket: 88-2648
• Status: Published

Opinions

WOLLMAN, Circuit Judge.

Duane Edward Nolder appeals the sentence imposed by the district court under the Federal Sentencing Guidelines, promulgated pursuant to the Sentencing Reform Act of 1984, 18 U.S.C. §§ 3551-3586 and 28 U.S.C. §§ 991-998. In particular, Nolder challenges the applicability of section 4B1.-3, the Criminal Livelihood guideline, which provides sentence enhancement for a defendant who commits an offense “as part of a pattern of criminal conduct from which he derived a substantial portion of his income.” We reverse and remand for resen-tencing.

I.

On August 4,1988, Nolder pleaded guilty pursuant to a plea agreement to one count of forging a United States Treasury check in violation of 18 U.S.C. § 495, and to one count of possessing stolen mail in violation of 18 U.S.C. § 1708. The stipulated facts in the plea agreement stated that Nolder stole from a mailbox a United States Treasury check for $375.58, forged the intended recipient’s name, and gave it to an accomplice, who cashed it and split the proceeds with Nolder. The facts also stated that Nolder stole from a mailbox a state welfare check for $330, which his accomplice then attempted to cash.

The plea agreement stipulated that the adjusted offense level was 10 under the applicable guideline, section 2F1.1 (Fraud and Deceit). The agreement further provided that if Nolder fully disclosed the circumstances surrounding the offenses, he would be eligible for a two-point reduction for Acceptance of Responsibility under section 3E1.1, resulting in a total offense level of 8. At this level, the guideline range of imprisonment was eighteen to twenty-four months on each count (with sentences to run concurrently). The agreement stated that neither the stipulated facts nor the calculation of the adjusted offense level was binding on the court.

The presentence report concluded that the total offense level was 11 rather than 8. Although the probation officer who compiled the report agreed that the applicable initial offense level was 10 and that Nolder was entitled to a two-point reduction for acceptance of responsibility, she enhanced the level by three points under section 4B1.3, the Criminal Livelihood guideline. Finding that Nolder had earned approximately $1,525 in the past year, including $450 from his criminal activities, the officer concluded that the monetary gain from his crimes constituted a substantial portion of his income and that the three-point enhancement was therefore appropriate. At this level, the guideline range of imprisonment was twenty-seven to thirty-three months on each count (with sentences to run concurrently).

The district court adopted the enhanced offense level as calculated in the presen-tence report. The court sentenced Nolder to two concurrent thirty-month terms of imprisonment, followed by a two-year term of supervised release and a mandatory $50 assessment on each count. This appeal followed.

II.

Nolder first challenges the constitutionality of the guidelines, arguing that they violate separation of powers principles and constitute an excessive delegation of power. The Supreme Court decision determining these issues, Mistretta v. United States, — U.S. -, 109 S.Ct. 647, 102 L.Ed.2d 714 (1989), was decided after Nolder’s brief was filed. Because Mistretta resolved the constitutional challenges raised by Nolder in favor of the guidelines, further discussion of these issues is unnecessary. See also United States v. Brittman, 872 F.2d 827 (8th Cir.1989).

Nolder next argues, and the government agrees, that the Criminal Livelihood guideline does not apply to his case. We agree with the parties that the Sentencing Commission did not intend a sentence to be enhanced under this section when a defendant gains a high percentage of his income from criminal conduct, yet his total income remains below minimum wage.

The guideline at issue, section 4B1.3, provides the following:

If the defendant committed an offense as part of a pattern of criminal conduct from which he derived a substantial portion of his income, his offense level shall not be less than 13, unless § 3E1.1 (Acceptance of Responsibility) applies, in which event his offense level shall be not less than ll.¹

The guidelines and the Sentencing Reform Act do not define “substantial portion of his income.” The legislative history states that this language was adopted from the Dangerous Special Offender statutes, 18 U.SiC. § 3575(e)(2), and 21 U.S.C. § 849(e)(2). See S.Rep. No. 98-225, 98th Cong., 1st Sess. 175-76 reprinted in 1984 U.S.Code Cong. & Admin. News 3182, 3358-59. These statutes define “substantial source of income” as an amount which exceeds the yearly minimum wage under the Fair Labor Standards Act, 29 U.S.C. § 206(a)(1), and which exceeds half of the defendant’s declared adjusted gross income. 18 U.S.C. § 3575(e); 21 U.S.C. § 849(e).

Because “substantial portion” was adopted from the Dangerous Special Offender statutes, we conclude that the definition given the original provision in those statutes should apply to the provision in the Criminal Livelihood guideline in. the absence of congressional intent to the contrary. We note that the other courts that have addressed this issue have reached the same conclusion. See United States v. Rivera, 694 F.Supp. 1105, 1106 (S.D.N.Y.1988); United States v. Kerr, 686 F.Supp. 1174, 1178 (W.D.Pa.1988). Under this definition, Nolder clearly has not earned enough to trigger the application of the Criminal Livelihood guideline. The district court found that Nolder had earned approximately $1,525 in the past year, including $450 from criminal activities. That amount falls short of the approximate yearly minimum wage of $6,700. See 29 U.S.C. § 206(a)(1).

We reject the government’s argument that an enhancement is warranted based upon Nolder’s criminal record. The determination of Nolder’s Criminal History Category accounts for his criminal record.

The judgment of the district court is reversed and the case is remanded for re-sentencing on the record made at the time of the original sentencing.

1 . We note that, unless rejected or modified by Congress, an amendment to section 4B1.3 will go into effect on November 1, 1989, changing "from which he derived a substantial portion of his income" to "engaged in as a livelihood.” See 54 Fed.Reg. 21,348, 21,380 (1989).