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United States v. Schuh

May 08, 2002

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
ROBERT SCHUH, LISA NOLEN, AND CURTIS LANE, DEFENDANTS-APPELLANTS.



Appeals from the United States District Court for the Western District of Wisconsin. Nos. 00-CR-29-S-01, 00-CR-29-S-08 & 00-CR-29-S-04--John C. Shabaz, Judge.

Before Posner, Manion, and Rovner, Circuit Judges.

The opinion of the court was delivered by: Rovner, Circuit Judge

Argued June 5, 2001 *fn1

Jocko's Rocket Ship, a tavern in Madison, Wisconsin, secretly operated as a drug house for over a decade. Its owner, Robert Schuh, pleaded guilty to maintaining a drug house, 21 U.S.C. sec. 856(a)(1), and eight individuals who dealt drugs at Jocko's pleaded guilty to various other drug offenses. We consolidated Schuh's case with appeals filed by two of the dealers, Lisa Nolen and Curtis Lane. Schuh challenges an upward adjustment for being an organizer or leader, and counsel for both Nolen and Lane move to withdraw under Anders v. California, 386 U.S. 738 (1967), asking that we dismiss their respective client's appeal. For the reasons that follow, we vacate Schuh's sentence and remand for resentencing without an adjustment for being an organizer or leader. We also grant both motions to withdraw and dismiss the appeals of Nolen and Lane.

I. Background

Schuh knowingly allowed dealers to sell drugs at Jocko's, but did not supply drugs to the dealers or regularly deal himself. Occasionally he sold drugs on behalf of the dealers, but more often he steered customers to them. The dealers controlled the terms of their own sales, essentially acting as independent contractors. Each dealer determined when, how, and what they would sell at Jocko's. They did not share profits or pay Schuh for the use of Jocko's, but often gave him "gratuities" of cocaine for allowing them to sell there. Although Schuh welcomed the cocaine "gratuities" to support his own habit, he never demanded them from the dealers. Sometimes the dealers used the basement to weigh, package, or sell cocaine, but to get access to the basement they needed permission from Schuh (or a bartender if Schuh was unavailable). Schuh required the dealers to be discreet when dealing, i.e., they could not approach customers at Jocko's and had to transact their business in the restrooms, but the bartenders could pass drugs in matchbooks across the bar. Also, Schuh required the dealers to be cautious about newcomers who might be law enforcement agents. Schuh could "banish" a dealer from Jocko's for breaking these informal rules.

After an undercover investigation, Schuh and eight dealers, including Nolen and Lane, were charged with various drug offenses. Schuh pleaded guilty to maintaining a drug house, 21 U.S.C. sec. 856(a)(1), and received a 4-level upward adjustment for being an organizer or leader. The district court concluded that Schuh deserved the adjustment because he accepted cocaine from the dealers who worked at Jocko's, controlled access to the basement, required the dealers to act discreetly and to exercise caution when selling to unknown bar patrons, directed bar customers wanting drugs to the dealers, occasionally sold drugs himself, and banned two dealers when they broke his rules. Furthermore, the court reasoned that Schuh's "failure to benefit to a greater financial extent" did not undermine the adjustment because his willingness to accept an occasional gratuity of cocaine in exchange for the use of Jocko's "could have been readily changed for the asking." Schuh was sentenced to 228 months' incarceration, three years' supervised release, and a $100 special assessment.

Nolen, a bartender at Jocko's for two years, sold cocaine there until she was fired in 1999 because of her pregnancy. She pleaded guilty to conspiring to manage a drug house, 21 U.S.C. sec.sec. 846, 856(a)(2), and was sentenced to 70 months' incarceration, 3 years' supervised release, and a $100 special assessment. Lane, a regular dealer at Jocko's, pleaded guilty to conspiring to distribute and possess with intent to distribute cocaine, 21 U.S.C. sec.sec. 846, 841(a)(1). Lane later moved to withdraw his plea, claiming that he was pressured into pleading guilty. The district court denied the motion, finding that Lane's reason for moving to withdraw was "incredible" because he contradicted statements made at his plea hearing. The court sentenced him to 135 months' imprisonment, three years' supervised release, and a $100 special assessment.

II. Discussion

A. Robert Schuh

On appeal Schuh challenges the district court's 4-level upward adjustment for being an organizer or leader. U.S.S.G. sec. 3B1.1. We review for clear error the district court's factual finding that a defendant was an organizer or leader, United States v. Mijangos, 240 F.3d 601, 604 (7th Cir. 2001), and will reverse "only if, after reviewing the entire evidence, we are left with the definite and firm conviction that a mistake has been committed," United States v. Carrera, 259 F.3d 818, 826 (7th Cir. 2001).

Schuh argues that the district court erred in concluding that his actions merited an adjustment for being an organizer or leader. Section 3B1.1(a) calls for a 4-level upward adjustment "[i]f the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive." U.S.S.G. sec. 3B1.1(a). To receive the adjustment a defendant must "organize[ ] [or] lead[ ] . . . one or more other participants" rather than merely "exercis[e] management responsibility over [ ] property." U.S.S.G. sec. 3B1.1, comment. (n.2); see also United States v. Lalley, 257 F.3d 751, 757-58 (8th Cir. 2001); United States v. Fones, 51 F.3d 663, 668 (7th Cir. 1995). Moreover, sec. 3B1.1 adjustments reflect a defendant's relative role in the offense, and "[a] defendant who had no greater role than any other participant cannot receive a sec. 3B1.1 increase." United States v. Mustread, 42 F.3d 1097, 1103 (7th Cir. 1994). To determine a defendant's relative role as an organizer or leader, a sentencing judge must consider the following factors: (1) exercise of decision-making authority; (2) nature of participation in the commission of the offense; (3) recruitment of accomplices; (4) claimed right to a larger share of the fruits of the crime; (5) degree of participation in planning or organizing the offense; (6) nature and scope of the illegal activity; and (7) degree of control and authority exercised over others. U.S.S.G. sec. 3B1.1, comment. (n.4); United States v. Noble, 246 F.3d 946, 953 (7th Cir. 2001).

In finding that Schuh was an organizer or leader, the district court relied on the following: (1) Schuh received cocaine from the dealers in exchange for the use of Jocko's and could have demanded a greater share of cocaine; (2) Schuh controlled access to the basement where the dealers weighed and packaged the cocaine; (3) Schuh sometimes followed the dealers to the basement, observed their activities, and received his cocaine there; (4) Schuh required the dealers to be discreet when selling and to be aware of new patrons who might be law enforcement agents; (5) Schuh steered customers to the dealers and occasionally sold drugs on behalf of other dealers; and (6) Schuh "banished" two dealers from Jocko's when they broke his rules. But two of these findings are unsupported by the record, and the remaining findings are insufficient to merit the sec. 3B1.1 adjustment. First, the finding that Schuh could have demanded a greater share of cocaine was mere speculation in light of the government's assertion that all of the cooperating dealers admitted that they provided the cocaine only as a gratuity and that Schuh never demanded or even requested that they do so. Second, it is undisputed that Schuh banished Nolen because of her pregnancy, not because she broke his rules, and the government concedes that Schuh banished another dealer, Rick Grafton, because he "took a swing" at a bar patron for reasons unrelated to drugs.

The remaining findings are insufficient to establish Schuh as an organizer or leader. First, providing access to Jocko's, even to the basement, is insufficient for a sec. 3B1.1 adjustment because it establishes merely that Schuh "exercised management responsibility over [ ] property" rather than "organiz[ing] [or] lead[ing] . . . one or more other participants." See U.S.S.G. sec. 3B1.1, comment. (n.2); Lalley, 257 F.3d at 757-58; Fones, 51 F.3d at 668. Even though Schuh sometimes followed the dealers to the basement to observe them and receive cocaine, there was no evidence that he organized, led, or in any way controlled the dealers in the basement, such as by instructing them to package the cocaine in specific amounts. And although Schuh implemented rules to avoid detection by authorities, he never actually banished anyone for breaking the rules. Moreover, the rules equally benefitted the dealers because they had the same interest in not getting caught. See Mustread, 42 F.3d at 1105 (convincing another to buy pager for defendant did not establish control over another because both benefitted from the pager by enabling them to profit more efficiently). Finally, acting as a "middleman" by ...


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