                    United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                    ___________

                                   No. 96-2893
                                   ___________

United States of America,               *
                                        *
             Appellee,                  *
                                        * Appeal from the United States
      v.                                * District Court for the
                                        * District of Nebraska
Donald A. Hellbusch,                    *
                                        *
             Appellant.                 *
                                   ___________

                            Submitted: May 25, 1998

                                Filed: June 30, 1998
                                   ___________

Before McMILLIAN, HENLEY1 and BEAM, Circuit Judges.
                          ____________


McMILLIAN, Circuit Judge.


       Donald A. Hellbusch appeals a final order entered in the District Court for the
District of Nebraska denying his 28 U.S.C. § 2255 motion to vacate his sentence and
withdraw his guilty plea. United States v. Hellbusch, No. 8:CR93-56 (D. Neb.

      1
       The Honorable J. Smith Henley died on October 18, 1997. Judge McMillian
and Judge Beam, as the remaining two judges on the panel that heard oral argument,
have determined the appeal pursuant to 8th Cir. R. 47E.
May 28, 1996). For reversal, appellant argues the district court erred in denying his
§ 2255 motion based on Bailey v. United States, 516 U.S. 137 (1995) (Bailey). We
held the appeal in abeyance pending the Supreme Court’s decision in Bousley v. United
States, 118 S. Ct. 1604 (1998) (filed May 18, 1998). For the reasons discussed below,
we reverse and remand the case to the district court for further proceedings consistent
with this opinion.

       The underlying facts are not disputed. In February 1993 appellant sold
methamphetamine to a confidential informant and an undercover officer. The
undercover officer later obtained a search warrant for appellant’s residence. The
confidential informant and the undercover officer went to appellant’s residence and
bought more methamphetamine from appellant. Upon a signal from the undercover
officer, other law enforcement officers entered the residence and executed the search
warrant. The officers seized methamphetamine and marijuana, $900 in currency, drug
paraphernalia, and four handguns, two of which were loaded. The two loaded
handguns and the $900 were found in a bedroom. Appellant was arrested in the living
room.

       In May 1993 a federal grand jury indicted appellant on four counts--distribution
of methamphetamine (count I) and distribution and possession of methamphetamine
with intent to distribute (count II), in violation of 21 U.S.C. § 841(a)(1), using and
carrying a firearm during and in relation to a drug trafficking offense (count III), in
violation of 18 U.S.C. § 924(c), and unlawful firearms possession (count IV), in
violation of 18 U.S.C. § 922(g). The district court denied appellant’s motion to
suppress. Pursuant to a negotiated plea agreement, appellant entered a conditional
guilty plea to counts II and III, and the government agreed to dismiss with prejudice
counts I and IV and to recommend a sentence at the low end of the applicable
sentencing guideline range. The government’s evidence would have shown that the
officer found the two loaded handguns in the same room as the $900. Appellant
reserved the right to appeal the district court order denying his motion to suppress.

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       At the plea hearing the district court noted that appellant had reserved the right
to appeal from the denial of the motion to suppress. Defense counsel added, and the
district court acknowledged, that appellant also reserved the right to appeal
sentencing issues as well. Transcript of plea hearing at 3. The district court
informed appellant that he would be allowed to withdraw his guilty plea only if the
district court rejected the plea agreement, if he could show some “just and fair”
reason, or if a higher court reversed the denial of the motion to suppress. Id. at
31-32. The district court accepted the guilty plea and sentenced appellant to a total
of 66 months imprisonment (6 months for the drug trafficking count, plus a
mandatory consecutive term of 60 months for the § 924(c) count), 3 years supervised
release, and a special assessment of $100. Appellant filed a direct appeal, raising
suppression issues but not challenging the validity of his plea. This court affirmed
the conviction and sentence. United States v. Hellbusch, 48 F.3d 1225 (8th Cir.
1995) (per curiam) (table) (opinion filed Mar. 9, 1995).

       On December 5, 1995, the Supreme Court decided Bailey and rejected the “mere
presence, availability or proximity” standard previously applied by this court and other
circuit courts of appeals. The Court held that “use” of a firearm under 18 U.S.C.
§ 924(c) requires a showing of “active employment,” 516 U.S. at 144, for example,
“brandishing, displaying, bartering, striking with, and, most obviously, firing or
attempting to fire a firearm . . . [, as well as making] a reference to a firearm calculated
to bring about a change in the circumstances of the predicate offense,” id. at 148, and
not merely “storing a weapon near drugs or drug proceeds” or “conceal[ing] a gun
nearby to be at the ready for an imminent confrontation.” Id. at 149.

       In February 1996 appellant filed this § 2255 motion to vacate his sentence and
withdraw his guilty plea, arguing that his sentence on the firearms count is unlawful
under Bailey. He argued that, in light of Bailey, his plea was not intelligent because he
had been misinformed as to the elements of a § 924(c) offense, there was no factual
basis for his guilty plea, and he is factually innocent of the § 924(c) offense because the
                                           -3-
two handguns were merely stored near drug proceeds. The district court held that
appellant’s guilty plea had waived all non-jurisdictional challenges, including any Bailey
issue, to his § 924(c) conviction and sentence, slip op. at 7, and denied the motion. This
appeal followed.

      In October 1996 this court held in Bousley v. Brooks that a petitioner had waived
the right to collateral review of Bailey issues by pleading guilty and by failing to
challenge the conviction and sentence on that ground on direct appeal. 97 F.3d at 287.
The Supreme Court granted certiorari to resolve a split among the circuits over the
permissibility of post-Bailey collateral attacks on § 924(c)(1) convictions obtained
pursuant to guilty pleas, Bousley v. United States, 118 S. Ct. 31 (1997), and we held
the present appeal in abeyance pending the Supreme Court’s decision in Bousley v.
United States.

        On May 18, 1998, the Supreme Court decided Bousley v. United States, holding
that a procedurally defaulted claim that a plea was unintelligent because of Bailey error
may be considered on the merits if the petitioner can show either cause and actual
prejudice or actual innocence. 118 S. Ct. 1610-12. We believe it appropriate to remand
this case to permit the district court to reconsider in light of Bousley v. United States
and Muscarello v. United States, No. 96-1654, 1998 WL 292058 (U.S. June 8, 1998).2



     Accordingly, the order of the district court is reversed and the case is
remanded to the district court for further proceedings.



      2
       We note that because appellant pleaded guilty to “using and carrying” a firearm
in violation of § 924(c)(1), on remand, he must show that he is factually innocent of
both “using” a firearm as defined in Bailey and “carrying” a firearm as defined in
Muscarello v. United States, No. 96-1654, 1998 WL 292058, at *2-10 (U.S. June 8,
1998), in order to establish a “gateway” factual innocence claim.
                                          -4-
A true copy.

    Attest:

      CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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