United States v. Basurto , 834 F.3d 1109 ( 2016 )

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS August 19, 2016
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 15-2119
RACHEL BASURTO,
Defendant - Appellant.
_________________________________
ORDER
_________________________________
Before MATHESON, SEYMOUR, and BACHARACH, Circuit Judges.
_________________________________
This matter is before the court on appellant’s Petition for Rehearing En Banc and
Panel Rehearing. Upon consideration by the original panel members, the request for
panel rehearing is granted to the extent of the amendments made to the attached revised
decision.
The petition and the revised opinion were also circulated to all of the judges of the
court who are in regular active service. As no member of the panel and no judge in
regular active service on the court requested a poll, the request for en banc
reconsideration is denied.
The clerk of court is directed to file the amended Opinion forthwith.
Entered for the Court
ELISABETH A. SHUMAKER, Clerk
2
FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS August 19, 2016
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 15-2119
RACHEL BASURTO,
Defendant - Appellant.
_________________________________
Appeal from the United States District Court
for the District of New Mexico
(D.C. No. 1:13-CR-00969-JB-1)
_________________________________
John V. Butcher, Assistant Federal Public Defender, Office of the Federal
Public Defender, Albuquerque, New Mexico, for Defendant-Appellant.
James R.W. Braun, Assistant United States Attorney, (Damon P. Martinez,
United States Attorney, with him on the brief) Office of the United States
Attorney, Albuquerque, New Mexico, for Plaintiff-Appellee.
_________________________________
Before MATHESON, SEYMOUR, and BACHARACH, Circuit Judges.
_________________________________
BACHARACH, Circuit Judge.
_________________________________
Ms. Rachel Basurto was convicted on federal drug charges. In light
of the conviction, the district court had to decide whether to impose a fine
and set the amount. Ms. Basurto’s only sources of income were her
monthly disability payments, but she and her husband owned a house
unencumbered by a mortgage. Relying on Ms. Basurto’s co-ownership of
the house, the district court imposed a fine of $13,133.33, reasoning that
Ms. Basurto could pay this amount by selling the house or obtaining a loan
with the house as collateral. 1 Ms. Basurto appeals the fine, arguing that it
is procedurally unreasonable. We affirm.
I. Ms. Basurto asserts five challenges to the fine.
On appeal, Ms. Basurto brings five challenges to the fine 2:
1. The district court failed to consider arguments that Ms. Basurto
could not sell the house.
2. The district court erred in finding that Ms. Basurto could
obtain a loan with the house as collateral.
3. In assessing Ms. Basurto’s ability to pay a fine, the district
court should have considered the hardship to Ms. Basurto.
1
To calculate the fine, the district court
 valued the house at its tax-assessment value, $33,689,
 subtracted a 6% realtor fee,
 halved this figure to account for the husband’s interest in the
house, and
 subtracted Ms. Basurto’s existing liabilities ($2,500) and court-
imposed special assessments ($200).
Based on these calculations, the district court imposed a $13,133.33 fine.
2
On appeal, Ms. Basurto refers to the Eighth Amendment’s Excessive
Fines Clause. See Appellant’s Opening Br. at 43-45, 48, 50. We do not
interpret these references as a separate appeal point.
2
4. The district court clearly erred by relying on facts that (a) the
family members living with Ms. Basurto had known about and
could have prevented her crimes and (b) the house had been
used to facilitate the crimes.
5. The district court did not account for the increased risk of
recidivism posed by the fine.
We reject each challenge.
II. We consider whether the district court abused its discretion.
We review the reasonableness of the district court’s decision to
impose a fine under the abuse-of-discretion standard. United States v.
Lopez-Macias, 661 F.3d 485, 488-89 (10th Cir. 2011). “Reasonableness has
both procedural and substantive components.” United States v. Cage, 451
F.3d 585, 591 (10th Cir. 2006).
Ms. Basurto characterizes her challenges to the fine as procedural.
This characterization is correct because Ms. Basurto challenges the method
that the district court used in calculating the fine. See id.
In assessing her procedural challenge, we can disturb the district
court’s factual findings only if they are clearly erroneous. United States v.
Trujillo, 136 F.3d 1388, 1398 (10th Cir. 1998). But the district court’s
legal conclusions are subject to de novo review. United States v. Ray, 704
F.3d 1307, 1315 (10th Cir. 2013).
3
III. The district court did not fail to consider arguments regarding
Ms. Basurto’s inability to sell the house.
The U.S. Sentencing Guidelines authorize district courts to impose
fines except when defendants establish that they are unable to pay and
unlikely to obtain that ability. U.S.S.G. § 5E1.2(a) (2014). 3 Applying this
authority, the district court found that Ms. Basurto could pay a fine by
selling her house.
According to Ms. Basurto, the district court failed to consider
impediments preventing her from selling the house. For example, she
argued in district court that state law prevented her from selling the house
without her husband’s consent, that she did not know where her husband
was, 4 and that he probably would not consent to a sale. See N.M. Stat. Ann.
§ 40-3-13(A) (voiding the sale of real property that spouses own as
community property without both spouses’ consent). After defense counsel
presented these arguments, the district court found that Ms. Basurto
probably would need to sell the house even in the absence of a fine. R. at
347.
3
Section 5E1.2(a) states that the district court “shall” impose a fine
unless the defendant establishes an inability to pay, but the U.S. Supreme
Court’s decision in United States v. Booker, 543 U.S. 220 (2005) rendered
the Guidelines advisory.
4
Ms. Basurto believed that Mr. Basurto was residing in Mexico, but
she had not had any contact with him since 2003, when he went to Mexico.
4
It is true that the district court’s written opinion did not make
specific findings on Ms. Basurto’s arguments. But there was no need for
such findings. See United States v. Trujillo, 136 F.3d 1388, 1398 (10th Cir.
1998) (addressing ability to pay and concluding that express findings as to
each statutory factor are not required prior to the imposition of a fine);
United States v. Washington-Williams, 945 F.2d 325, 327-28 (10th Cir.
1991) (holding that express findings are unnecessary on ability to pay a
fine under U.S.S.G. § 5E1.2); United States v. Wright, 930 F.2d 808, 810
(10th Cir. 1991) (“Specific fact-finding on the record has been deemed
unnecessary for imposition of fines under [a prior version of 18 U.S.C.
§ 3572, which set out the factors governing imposition of a fine].”). “It is
sufficient that the record reflects the basis for the imposition of a fine.”
United States v. Trujillo, 136 F.3d 1388, 1398 (10th Cir. 1998).
The district court entertained Ms. Basurto’s sentencing arguments,
holding two sentencing hearings, ordering and reviewing supplemental
briefing, providing a general statement of reasons for imposing the fine,
and stating that the relevant sentencing factors had been considered. We
have no reason to believe that the district court ignored Ms. Basurto’s
arguments against a fine.
5
IV. The district court did not clearly err in finding that Ms. Basurto
could obtain a loan with the house as collateral.
Ms. Basurto also challenges the finding regarding her ability to
obtain a loan with the house as collateral. But this finding was not clearly
erroneous.
Ms. Basurto argues that she could not obtain a loan because she is
indigent. But this argument overlooks the fact that she co-owns a house
unencumbered by a mortgage. Ms. Basurto’s co-ownership of the house
provided her with collateral to offer a lender.
According to Ms. Basurto, she could not use the house as collateral
because state law prohibits sale of the house without her husband’s
consent. Thus, Ms. Basurto argues, “[t]he chances of not being able to
liquidate the home would be too great.” 5 Appellant’s Opening Br. at 33. In
our view, however, the district court could reasonably reject this argument.
State law provides a statutory procedure allowing married individuals
to sell marital property when their spouses disappear. See N.M. Stat. Ann.
§ 40-3-16. If Ms. Basurto did not know where her husband was, she could
sell the house without his consent upon completion of five tasks:
1. File a petition stating why the transaction would be desirable.
5
State law would also prohibit Ms. Basurto from mortgaging the house
without spousal consent, but Ms. Basurto does not argue this point. See
N.M. Stat. Ann. § 40-3-13(A).
6
2. Obtain court appointment of a guardian ad litem for the absent
husband and pay this guardian a “reasonable fee.”
3. Serve a notice of hearing on the guardian ad litem.
4. Publish four successive weekly notices of hearing in a
newspaper of general circulation in the county where the
petition was pending.
5. Obtain a court order authorizing the transaction based on a
finding that the husband had disappeared.
N.M. Stat. Ann. § 40-3-16.
The district court could reasonably consider Ms. Basurto capable of
performing these five tasks. Even if Ms. Basurto could not afford an
attorney, the statutory procedure is relatively straightforward and Ms.
Basurto did not present any evidence of an inability to carry out the
statutory procedure.
Ms. Basurto argues elsewhere that she could not comply with the
statutory procedure because she (1) would not be able to prove that her
husband’s location was “unknown to anyone” and (2) could not afford the
non-attorney costs associated with the procedure, such as publishing
notices in a local newspaper. Appellant’s Opening Br. at 28. 6 The district
court could reasonably reject these arguments. The statutory procedure
required only that a spouse’s location was “unknown to the other spouse
[Ms. Basurto]”; the statute did not require Ms. Basurto to prove that her
6
Ms. Basurto presented these arguments when stating that the district
court had disregarded her contentions about an inability to sell the house.
7
husband’s location was unknown to anyone. N.M. Stat. Ann. § 40-3-16(A).
And Ms. Basurto presented no evidence of an inability to pay the costs
associated with the statutory procedure.
Ms. Basurto would not need to use the statutory procedure if the
husband consented to a sale. According to Ms. Basurto, spousal consent
was impossible because she did not know where the husband was. But the
record does not show that Ms. Basurto ever attempted to contact her
husband, much less that she was unable to locate him or obtain his consent.
In fact, Ms. Basurto’s appeal briefs suggest the opposite: Ms. Basurto
states that one of her daughters has been in contact with the husband, that
Mr. Basurto has a son who “could possibly provide [the husband’s]
location,” and that Ms. Basurto “will probably not be able to prove [the
husband] has disappeared and his location is unknown to anyone.”
Appellant’s Opening Br. at 7, 28-29.
In these circumstances, the district court could reasonably conclude
that a lender would be willing to loan money to Ms. Basurto with the house
as collateral. Ms. Basurto disagrees, contending that she would be
considered a poor credit risk. But Ms. Basurto did not present any evidence
of a difficulty in obtaining a loan. In the absence of such evidence, the
district court could reasonably infer that Ms. Basurto would be able to
obtain a loan since she could provide her house as collateral. As a result,
8
the court did not clearly err in finding that Ms. Basurto could obtain a loan
with her unencumbered co-ownership of the house.
V. The district court did not err when analyzing the hardship that
the fine imposed on Ms. Basurto.
The district court reasoned that the hardship to Ms. Basurto and her
ability to pay are separate inquiries:
Once the Court decided that–despite [Ms. Basurto’s] minimal
assets, the third parties living in [Ms. Basurto’s] home, and the
other factors–it should fine her, the burden shifted to [Ms.]
Basurto to prove she could not afford to pay that fine. . . .
While the difficulty a fine will cause is certainly relevant when
she is arguing that the Court should not impose a fine, it is not
relevant once the Court decides to impose a fine. At that stage,
difficulty to the defendant is not the issue; the sole issue is
whether [Ms. Basurto] can pay the fine.
R., vol. I at 254. Ms. Basurto challenges this reasoning, arguing that the
district court should have treated hardship as part of the ability-to-pay
analysis. Appellant’s Opening Br. at 34-37. 7 We conclude that the district
court did not err.
7
In her reply brief, Ms. Basurto offers a different interpretation of the
district court’s language, arguing that the district court incorrectly
reasoned that hardship is immaterial regarding the amount of the fine. But
Ms. Basurto did not raise this interpretation of the district court’s language
until her reply brief. As a result, we decline to consider this argument. See
United States v. Hunter, 739 F.3d 492, 495 (10th Cir. 2013) (declining to
consider an argument omitted in the appellant’s opening brief).
9
In deciding whether to impose a fine and set the amount, the district
court must consider the sentencing factors in 18 U.S.C. § 3572(a). 8 Section
3572(a) requires the district court to consider factors including the
defendant’s income, earning capacity, financial resources, and the burden
of the fine on the defendant. 18 U.S.C. § 3572(a)(1)-(2) (2012). Similarly,
the guidelines require the district court to consider the defendant’s ability
to pay and the burden on the defendant. U.S.S.G. § 5E1.2(a), (d)(2)-(3)
(2014).
The district court complied with the statute and guidelines by
considering hardship in determining whether to impose a fine. As noted
above, the court expressly stated that it had decided to impose a fine only
after considering “the difficulty a fine will cause.” R., vol. I at 254. The
court simply noted that ability to pay and hardship are distinct inquiries,
and they are. Ms. Basurto elsewhere recognizes this distinction, stating
that “[t]he [sentencing] factors that must be considered also include those
specific to fines: the defendant’s ability to pay, which is determined by the
defendant’s income, earning capacity, and financial resources, 18 U.S.C.
§ 3572(a)(1), U.S.S.G. § 5E1.2(d)(2); [and] the hardship the fine will
impose upon the defendant, her family and her financial resources,
8
The district court was also required to consider the sentencing factors
in 18 U.S.C. § 3553(a). The district court’s consideration of the factors in
§ 3553(a) is not at issue in this appeal.
10
§ 3572(a)(2), § 5E1.2(d)(3) & (8) . . . .” Appellant’s Opening Br. at 44. As
Ms. Basurto implicitly admits in this passage, hardship and ability to pay
are distinct considerations.
In her briefs and petition for rehearing, Ms. Basurto suggested a
parade of horribles if the court ignores hardship in deciding whether to
impose a fine. But the district court did not ignore the hardship; the court
simply observed the differences between the factors involving ability to
pay and hardship. Thus, we reject Ms. Basurto’s challenge to the district
court’s decision to impose a fine.
VI. The district court did not rely on clearly erroneous facts in
finding that (1) Ms. Basurto’s family had known about her drug
activity and (2) Ms. Basurto’s house was connected to her drug
activity.
A district court errs procedurally when it imposes a fine based on
clearly erroneous facts. United States v. Lente, 647 F.3d 1021, 1030 (10th
Cir. 2011). Ms. Basurto argues that the district court clearly erred by
relying on two facts: (1) the family members living with Ms. Basurto had
known about the illegal drug activity and could have stopped it, and
(2) Ms. Basurto’s house had been connected to her illegal behavior. In our
view, these factual findings were not clearly erroneous.
11
The record includes three facts supporting the district court’s finding
that several of Ms. Basurto’s family members had been aware of Ms.
Basurto’s drug activity. 9
First, Ms. Basurto’s adult daughter knew the combination to a safe in
the house that contained methamphetamine, cash, a handgun, and a key to
another safe containing more cash. R., vol. I at 277-78. In fact, the
daughter
 opened the safe for the police because Ms. Basurto had claimed
that she did not know the combination and
 claimed that some of the cash from the safe was hers.
Second, methamphetamine was found in the son-in-law’s car.
Third, Ms. Basurto kept items consistent with drug dealing—a scale,
small plastic baggies, and a razor blade—in plain view in her bedroom.
Based on these three facts, the district court could reasonably find
that several of Ms. Basurto’s family members had known about the drug
activity and chose to continue residing with Ms. Basurto anyway.
In addition, the district court could reasonably find that Ms. Basurto
had used her house to “further [her] drug dealing enterprise[].” Supp. R. at
71. As noted, Ms. Basurto kept cash, drugs, and a handgun in her house.
9
Ms. Basurto’s one-year-old granddaughter also lived with Ms.
Basurto. Ms. Basurto argues that “of course . . . [the] granddaughter was
completely innocent.” Appellant’s Opening Br. at 47-48. The
granddaughter’s presence in the house does not affect our analysis.
12
Even if Ms. Basurto had conducted drug transactions elsewhere, the district
court could reasonably infer that Ms. Basurto’s house had played a role in
the illegal activity.
Accordingly, we conclude that the district court did not clearly err in
finding that (1) Ms. Basurto’s live-in family members had known of the
drug crimes and (2) Ms. Basurto’s house had been connected to the drug
crimes.
VII. The district court did not abuse its discretion by failing to
address the risk of recidivism caused by the fine.
Ms. Basurto also argues that the district court failed to consider the
risk that the fine would result in recidivism. As discussed above, however,
specific findings were unnecessary. See Part III, above. 10 Thus, the district
court did not err by omitting findings on the risk of recidivism from a fine.
VIII. Disposition
We affirm.
10
In considering the sentencing factors, the district court expressly
considered the recidivism risk posed by the fine and accounted for the
possibility that a large fine might “nudge [Ms. Basurto] into further profit-
bearing criminal activity that she might not otherwise commit.” Supp. R. at
23.
13