A Commentary to the Sentencing Guidelines that expands or adds
to a guideline rather than interprets it is not entitled to deference.
In United States v. Riccardi, --- F.3d --- (6th Cir. 2021), https://www.opn.ca6.uscourts.gov/opinions.pdf/21a0054p-06.pdf an investigation of a postal employee, Jennifer Riccardi, revealed that she had stolen $42,102 in cash, and 1505 gift cards from the mail. Of those gift cards, 1,322 had face values totaling about $47,000 which averaged about $35 per card. The value of the remaining gift cards was not identified by the government. Ms. Riccardi pleaded guilty to several charges including possessing 15 or more unauthorized access devices. She admitted in her plea agreement that the stolen gift cards were unauthorized access devices. (18 U.S.C. §1029(a)(3)).
In calculating the loss for the 1505 gift cards, the district court applied the $500 minimum loss amount from U.S.S.G. §2B1.1’s Application Note 3(F)(i), which resulted in a total loss of $752,500 and bumped the offense level by 14. Ms. Riccardi was sentenced near the top of the guideline range. On appeal, she argued that the district court’s application of the $500 minimum conflicts with §2B1.1. The Sixth Circuit agreed, reversed her sentence, and remanded for resentencing without the use of the automatic $500 minimum loss amount for every gift card.
The second paragraph of the court’s opinion provides a helpful summary of its ruling and is paraphrased here:
Ms. Riccardi challenged the use of
this $500 minimum loss amount, which is found in U.S.S.G. §2B1.1’s Application
Note 3(F)(i). The commentary instructs that the loss ‘shall be not less than
$500 ‘for each unauthorized access device,’ a phrase that Ms. Riccardi concedes
covers stolen gift cards. U.S.S.G. §2B1.1 cmt. n.3(F)(i). But guidelines
commentary may only interpret, not add to, the guidelines themselves. United States v. Havis, 927 F.3d 382,
386 (6th Cir. 2019). And even if there is some ambiguity in §2B1.1’s use of the
word ‘loss,’ the commentary’s bright-line rule requiring a $500 loss amount for
every gift card does not fall ‘within the zone of ambiguity’ that exists. Kisor v. Wilkie, 139 S.Ct. 2400, 2416
(2019). So this bright-line rule cannot be considered a reasonable
interpretation of - as opposed to an improper expansion beyond - §2B1.1’s text.
Slip Op. at 2.
The Sixth Circuit noted that amendments to the guidelines are subject to Congress’s review and notice-and-comment rulemaking and amendments to the commentary are not. 28 U.S.C. §§ 994 (p) and (x). Moreover, it was held in Stinson v. United States, 508 U.S. 36, 45 (1993) that the commentary’s interpretation of a guideline “must be given ‘controlling weight unless it is plainly erroneous or inconsistent with the guideline.’” Slip Op. at 9. Thus, under Stinson, the commentary “deserved the deference given to an agency’s interpretation of its regulations.” Id. at 9 citing Stinson, 508 U.S. at 45.
The Sixth Circuit, however, determined that its approach to resolving the issue in Ms. Riccardi’s case was affected by the later decision in Kisor v. Wilkie, 139 S.Ct. at 2414–18, which “cautioned that a court should not reflexively defer to an agency’s interpretation.” Slip Op. at 10. “Before doing so, a court must find that the regulation is ‘genuinely ambiguous even after [the] court has resorted to all the standard tools of interpretation’ to eliminate that ambiguity.” Id. quoting Kisor at 2414. The judicial oversight that Kisor intended would ensure that the Sentencing Commission could not amend the guidelines by simply amending the commentary and thereby avoid the notice-and-comment requirements. Consequently, the Sixth Circuit did not immediately defer to Application Note 3(F)(i).
The court started by considering whether §2B1.1 is “genuinely ambiguous.” Since the word “loss” is not defined in §2B1.1(b)(1), the court looked to its ordinary meaning and found that it could mean “different things in different contexts.” Rather than latch on to one meaning, the court cut to the chase and found that “[n]o reasonable person would define the ‘loss’ from a stolen gift card as an automatic $500.” Slip Op. at 12. As the court previously noted, the average value of each gift card was about $35 and there was no evidence to suggest that the total damage approached the $752,500 calculated with the $500 minimum.
The court found that the “bright-line” $500 minimum loss amount could not be derived from §2B1.1 “by a process reasonably described as interpretation.” Slip Op. at 13. The court viewed the Sentencing Commission’s decision to adopt the $500 minimum loss amount as “a substantive policy choice.” Id. (Emphasis added) As such, if longer prison sentences are to be based on that “fictional” loss amount, then “this substantive policy decision belongs in the guidelines, not in the commentary.” Id.
A caveat – The Sixth Circuit observed that nothing prevents the Commission from placing the $500 minimum loss amount in the guideline itself. The court cautioned that it was only holding that “the Commission may not make this kind of substantive policy choice in the commentary and claim that its choice represents nothing more than an ‘interpretation’ of the guideline.” Slip Op. at 15.
Judge Nalbandian concurred in part and concurred in the judgment. He agreed that “application note 3(F) is not a permissible interpretation of ‘loss’” in §2B1.1(b)(1) but in his view that conclusion was dictated by Stinson rather than Kisor and he “would continue to apply Stinson deference to guideline commentary cases.” Slip Op. at 18.
One other point is worth noting. Ms. Riccardi also challenged the restitution order of $89,102 ($42,102 in cash plus $47,000 for the value of the gift cards). She maintained that the amount of restitution had to be offset with the cash and gift cards that she forfeited to the government. The Sixth Circuit, however, did not consider the issue because the plea agreement specified that she waived the right to appeal her conviction and sentence and “restitution is part of a defendant’s sentence.” Slip Op. at 16.