                               RECOMMENDED FOR FULL-TEXT PUBLICATION
                                   Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                            File Name: 15a0259p.06

                       UNITED STATES COURT OF APPEALS
                                        FOR THE SIXTH CIRCUIT
                                          _________________


 UNITED STATES OF AMERICA,                                      ┐
                                        Plaintiff-Appellee,     │
                                                                │
                                                                │         No. 13-6530
            v.                                                  │
                                                                 >
                                                                │
 CARTER CHRISTIAN,                                              │
                                     Defendant-Appellant.       │
                                                                ┘
                             Appeal from the United States District Court
                         for the Western District of Tennessee at Memphis.
                       No. 2:12-cr-20364—Jon Phipps McCalla, District Judge.
                                         Argued: August 4, 2015
                                  Decided and Filed: October 30, 2015

            Before: SUTTON and DONALD, Circuit Judges; ZOUHARY, District Judge.*

                                           _________________

                                                 COUNSEL

ARGUED: Kevin M. Schad, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Cincinnati,
Ohio, for Appellant. Brian K. Coleman, UNITED STATES ATTORNEY’S OFFICE, Memphis,
Tennessee, for Appellee. ON BRIEF: Kevin M. Schad, OFFICE OF THE FEDERAL PUBLIC
DEFENDER, Cincinnati, Ohio, Howard B. Manis, MANIS LAW FIRM, Memphis, Tennessee,
for Appellant. Brian K. Coleman, UNITED STATES ATTORNEY’S OFFICE, Memphis,
Tennessee, for Appellee.




        *
          The Honorable Jack Zouhary, United States District Judge for the Northern District of Ohio, sitting by
designation.




                                                       1
No. 13-6530                       United States v. Christian                    Page 2

                                        _________________

                                                OPINION
                                        _________________

       ZOUHARY, District Judge. Carter Christian spent Halloween 2013 masquerading as the
lawful operator of a semi-truck pulling a load of tires. The semi he drove was in fact stolen. So
was its load. Memphis police saw through the disguise and arrested Christian. The arrest would
have been bad enough, but Christian was expected in federal court the next morning, when a
district judge would sentence him for a different conviction of possession of stolen goods, the
underlying offense in this case.       Worse still, the earlier possession offense centered on
Christian’s role in another truck theft ring.

       Christian appeals his conviction and 105-month sentence. We agree with Christian that
the district court erred in applying a two-level upward adjustment based on Christian’s alleged
managerial role in the theft ring. We therefore vacate the sentence and remand.

                                           BACKGROUND

       Christian was part of a four-member Memphis truck theft ring, working alongside Patrick
Dubose, Leonard Davis, and co-defendant Marcus Lanton. The theft ring first struck in May
2011, stealing a Mayflower moving truck. In August 2011, the thieves traveled to Big M
Transportation in northern Mississippi, where they stole two semis containing 2,800 tires. And
finally, in June 2012, the theft ring stole an SDR Trucking semi loaded with tires. A sting
operation caught Davis selling tires. Davis unwittingly led police to a Hickory Hills Road
storage unit in Memphis, rented by Christian’s girlfriend. There, police observed Christian,
Lanton, and Davis loading stolen tires into Lanton’s car.

       Memphis police arrested the three men. We do not know what became of Davis, because
only Lanton and Christian were prosecuted in federal court. Lanton and Christian lingered for a
while in state court, before state authorities dismissed theft charges against the pair in favor of
federal prosecution. At that time, Christian had a second, unrelated state prosecution. On that
second case, he was represented by the same attorney who then represented Lanton in this case.
On Lanton’s orders, Lanton’s girlfriend and the attorney convinced Christian to sign an affidavit
No. 13-6530                     United States v. Christian                      Page 3

affirming that “Lanton had no knowledge about the heist,” a statement Christian knew was not
true.

        In December 2012, a federal grand jury returned a one-count indictment against Lanton
and Christian, charging the possession offense. Christian pled guilty pursuant to a written plea
agreement.

        The pre-sentence investigation report (“PSR”) calculated a total offense level of 19,
applying three adjustments. First, Christian faced a fourteen-level specific offense characteristic
based on the amount of loss caused by the theft ring. See U.S.S.G. § 2B1.1(b)(1)(H). Second,
because the PSR found Christian played a managerial role in the theft ring, Christian received a
two-level upward adjustment. See id. § 3B1.1(c). And third, the PSR recommended a three-
level downward adjustment for acceptance of responsibility. See id. § 3E1.1. A lengthy rap
sheet landed Christian in criminal history category VI. The PSR therefore set the guideline range
at 63–78 months of imprisonment. The Government separately said it would move the court for
a substantial-assistance departure under U.S.S.G. § 5K1.1.

        Christian objected to the PSR, writing he was not “a leader of the theft crew” and at all
times Lanton “was the leader of the group” who issued orders to Christian. Christian’s objection
drew a PSR addendum, which explained the leadership allegations were “taken directly from the
investigative file and confirmed through discussions with the” Government.

        What next?     Christian’s sentencing picture became bleaker.       Because he told the
Government about the false affidavit during proffer sessions, the Government abandoned plans
for a Section 5K1.1 motion.      Christian’s Halloween 2013 arrest doomed his hopes for an
acceptance-of-responsibility adjustment -- Christian knowingly drove a stolen truck at the
request of a person who “was part of the theft group.” And after that arrest, Christian’s attorney
abandoned objections to the PSR’s amount-of-loss calculation. As a result, the guideline range
stood at 84–105 months.

        Christian testified at sentencing.   The court overruled Christian’s objection to the
managerial-role adjustment, sentencing him to 105 months of imprisonment.
No. 13-6530                     United States v. Christian                      Page 4

                                           DISCUSSION

       Legal Standard. We review a district court’s factual findings for clear error, and defer to
its legal conclusion that a defendant had a managerial role in criminal activity. See United States
v. Washington, 715 F.3d 975, 982–83 (6th Cir. 2013). The Government has the burden of
proving by a preponderance of the evidence that Section 3B1.1 applies. See United States v.
Wright, 747 F.3d 399, 412 (6th Cir. 2014).

       Section 3B1.1 and its Commentary contain an adjustment and a departure provision, each
applying to different sets of defendants. The adjustment provision directs that “[i]f the defendant
was an organizer, leader, manager, or supervisor in any criminal activity” involving fewer than
five “participants,” the offense level should increase two levels. U.S.S.G. § 3B1.1(c). The
departure provision explains that an “upward departure may be warranted . . . [for] a defendant
who did not organize, lead, manage, or supervise another participant, but who nevertheless
exercised management responsibility over the property, assets, or activities of a criminal
organization.” Id. § 3B1.1, app. n.2 (emphasis added). “[T]he method by which the defendant’s
sentence is increased [therefore] depends on whether the defendant exercised control over an
individual or over tangible property, assets or activities of a criminal enterprise.” United States
v. Gort-DiDonato, 109 F.3d 318, 321 (6th Cir. 1997).

       The distinction between an adjustment and departure matters. See United States v.
Ochoa-Gomez, 777 F.3d 278, 285 & n.6 (5th Cir. 2015) (Prado, J., concurring). The district
court considers the Section 3B1.1 adjustment while calculating a defendant’s total offense level.
See U.S.S.G. § 1B.1(a)(3).     “Once a sentencing court makes a factual finding as to the
applicability of a particular adjustment provision, the court has no discretion, but must increase
the offense level by the amount called for in the applicable provision.”         United States v.
Feinman, 930 F.2d 495, 500 (6th Cir. 1991) (discussing Section 3B1.1). And the adjustment has
a determinate impact on a defendant’s guideline range, raising the offense level by two to four
levels. See U.S.S.G. § 3B1.1(a)–(c).

       Contrast the adjustment framework with the departure provision. A departure is not
mandatory, see id. § 3B1.1, app. n.2, and Application Note 2 does not dictate the extent of the
departure, see United States v. McFarlane, 64 F.3d 1235, 1240 n.7 (8th Cir. 1995).             The
No. 13-6530                      United States v. Christian                        Page 5

departure does not shift the guideline range. A departure “means . . . imposition of a sentence
outside the applicable guideline range or of a sentence that is otherwise different from the
guideline sentence.” U.S.S.G. § 1B1.1, app. n.1(E); see United States v. Pembrook, 609 F.3d
381, 385 (6th Cir. 2010) (“[A] defendant’s guideline range is the range produced under the
guidelines’ sentencing table after a correct determination of the defendant’s total offense level
and criminal history category but prior to any discretionary departures.” (quotation marks
omitted)). A district court therefore does not consider an upward departure until after calculating
the defendant’s total offense level, fixing a criminal history category, and selecting the
applicable guideline range. See U.S.S.G. § 1B.1(a)(3) & (5)–(7), (b).

       District Court Findings. The court applied a two-level, managerial-role adjustment, but
never clearly stated the object of Christian’s control. Its oral findings contain contradictory
statements, suggesting the court found Christian managed truck-theft-ring participants or,
alternatively, only truck-theft-ring property.

       The court began by citing the adjustment provision and quoting the departure provision.
It then rejected the Government’s claim that Christian’s directions to his girlfriend showed
control over a co-participant, after Christian testified his girlfriend did not know how Christian
planned to use the storage unit. The court next mentioned unspecified cases where “individuals
received points as an accountant,” even though the person “didn’t manage any people, but
[instead] managed the assets of the criminal enterprise.” The court stated, “it was clear [that the
accountant] actually had management authority” because “they could say, no, you can’t have the
[assets or], yes, you can.” (Our review of this Court’s published opinions, filed since the
Sentencing Commission adopted Application Note 2 in 1993, shows no case upholding an
adjustment based solely on a defendant’s management of criminal assets.)

       The court then brought its accountant analogy to bear on Christian’s case. On cross-
examination, Christian explained how Lanton accessed the Hickory Hills storage unit when
Lanton had a buyer for the stolen tires. Access to the storage unit required a code -- presumably
used for the storage facility’s drive-up gate -- as well as a key to the storage unit’s padlock.
No. 13-6530                     United States v. Christian                       Page 6

       Q.      So [Lanton] was doing the selling of the tires, you were creating a place
               for the tires to be stored?
       A.      Yes, sir.
       Q.      And then when he had a buyer for the tires, you allowed him to go into the
               storage facility and gave him those tires for him to sell?
       A.      Yes, sir.
       Q.      And did you retain the key the entire time?
       A.      Did I keep the key?
       Q.      Yes.
       A.      No, sir, he had the key, but I had the -- I didn’t ever give him the code
               because he was --
       Q.      So he needed you to get in the code -- to get in the facility?
       A.      Yes, sir.
       Q.      So if he had wanted to sell tires, he needed you to get access to those tires,
               is that correct?
       A.      Yes, sir.
       Q.      And he couldn’t have sold those tires without you, isn’t that true?
       A.      Yes, sir.

       The court explained how it viewed this evidence.

       So you can be a person who manages property, and the government says, well, in
       this case he managed property because he maintained control of the access to the
       property. He could say yes or no, and he maintained control of the code. That is
       a type of management. If you can say yes, you can get tires or no, you cannot get
       tires by denying access to the code, and he clearly understood he was maintaining
       control, he has testified to that effect, and that’s clear, then you are a manager
       under the application note.

       From there, the court considered Christian’s role in the Halloween 2013 theft, reasoning
that, because Christian drove the stolen truck on his own, his “role has . . . been more than just a
pickup guy.” At the same time, the court recognized that Christian “wasn’t the guy in charge at
all,” and stated “we have identified people who were in charge here, but he did have control of
property.” The district court concluded:

       So I think the government is right that the two points [are] appropriate. I do think
       it’s a pretty close question, but factually, the government has submitted evidence,
       and it preponderates in favor of a determination that he was not just a plain
       ordinary old participant, he was somebody who had managerial supervisory
       authority at a lower level, and that’s why you get two points, you don’t get three,
       you don’t get four, so I think that that’s correct.
No. 13-6530                      United States v. Christian                      Page 7

       Procedural Sentencing Error.         As these statements show, the court emphasized
Christian’s control of tires and commented that, because of that control, he was a manager
“under the application note.” The court likewise stated that other people were in charge, and said
it agreed with the Government’s theory of Christian’s role in the offense: Christian “was, in fact,
managing and supervising the items that are the subject of the heist” because he held the storage
unit code. The court did not state that Christian controlled a co-participant.

       We give deference to a district court finding that a defendant played a leadership role in
criminal activity; such a legal conclusion “depends on a number of factual nuances that a district
court is better positioned to evaluate.” Washington, 715 F.3d at 983. However, when a court
determines a defendant’s role extended only to management of a criminal enterprise’s property,
the court errs by applying an adjustment. “To qualify for an adjustment . . . , the defendant must
have been the organizer, leader, manager, or supervisor of one or more other participants.”
U.S.S.G. § 3B1.1, app. n.2. The Government may show control over co-participants in many
ways, see United States v. Vasquez, 560 F.3d 461, 473 (6th Cir. 2009), but cannot base an
adjustment on property management alone, as was done here.

       The Government urges affirmance, stressing the court said Christian “maintained control
of the access to the property. He could say yes or no, and he maintained control of the code.
That is a type of management.” The Government parses that statement to contain a participant-
control finding: “But for the Defendant’s actual presence and permission, Lanton could not
convert the stolen property.” We disagree with the Government’s reading for two reasons.

       First, the court stated that a defendant with such control is “a manager under the
application note,” and the parties only discussed Application Note 2 for its treatment of a
property-manager defendant. Second, there is insufficient evidence supporting the essential part
of the Government’s argument: Lanton needed Christian’s permission to access the storage unit.

       Christian did testify that, because Lanton did not know the storage unit code, Lanton
“needed [Christian] to get access to th[e] tires.” While Lanton may have depended on Christian
to access tires, that does not mean Christian controlled Lanton. Offenders often depend on
subordinates to sell stolen goods. What is missing in this case is any evidence that Christian
No. 13-6530                      United States v. Christian                      Page 8

could have, or did, deny Lanton access to the storage unit or its code. There is no explanation
why Christian, not Lanton, had the code.

        Instead, the record shows the primary ringleader was Lanton. It was Lanton who Patrick
Dubose called “the head man over the Mayflower trailer load.” It was Lanton who offered to sell
tires from the Big M heist to a confidential source, and only Lanton received payment from that
source. It was Lanton who “advised Christian to rent the [Hickory Hills] storage unit for the
purpose[] of storing stolen tires in [Christian’s girlfriend’s] name.” And it was Lanton who sold
the tires from the SDR Trucking heist that were stored at the Hickory Hills storage facility, and
who initially gave Christian 125 tires for helping pull the heist.

        For purposes of the adjustment, more than one defendant can lead participants in criminal
activity.   See U.S.S.G. § 3B1.1, app. n.4.         However, that provision does not help the
Government, because all the evidence depicting Lanton and Christian’s relationship shows
Lanton controlling Christian. A few days after Lanton gave Christian his 125-tire share of the
SDR Trucking heist, Lanton reneged and “took over and started selling the [same] tires.”

        Perhaps most telling, Christian knowingly signed a false affidavit exculpating Lanton at
Lanton’s request. Christian’s action had serious consequences. Before he signed the false
affidavit, Christian’s PSR-calculated guideline range stood at 63–78 months, with a Government
recommendation pursuant to U.S.S.G. § 5K1.1 for a below-guideline-range sentence. Thereafter,
Christian lost acceptance-of-responsibility credits and any hope of a Section 5K1.1 motion,
raising his PSR-calculated guideline range to 84–105 months. And while Christian likely did not
know how his false statement would affect his sentencing range, he certainly knew that by
exculpating his sole co-defendant, he effectively agreed to be the “fall guy.” That is a sacrifice
that a criminal manager rarely makes for a subordinate.

        Aside from its purported permission finding, the court made none of the factual findings
typical of our Section 3B1.1 adjustment cases. Christian did not receive a larger share of the
theft-ring proceeds than other participants. In fact, the record lacks proof that Christian received
any payment, other than a share of the SDR Trucking heist that Lanton promptly took back.
See United States v. Bazazpour, 690 F.3d 796, 805 (6th Cir. 2012). He did not recruit others to
join the truck theft ring. See United States v. Castilla-Lugo, 699 F.3d 454, 460–61 (6th Cir.
No. 13-6530                     United States v. Christian                       Page 9

2012). He did not help plan any of the thefts. See United States v. Hernandez, 227 F.3d 686,
700 (6th Cir. 2000). He lacked special expertise on which the truck theft ring depended.
See United States v. McDaniel, 398 F.3d 540, 552 (6th Cir. 2005). He did not provide the group
with information that facilitated the crimes. See United States v. Dupree, 323 F.3d 480, 494
(6th Cir. 2003). And he did not issue orders to any group member. See United States v. Khalil,
279 F.3d 358, 370 (6th Cir. 2002). Without even one of these factual findings, the Government’s
position is essentially that a “defendant who supplies a good or service to a criminal operation . .
. automatically qualif[ies] for the leadership [adjustment] because he or she could potentially
leverage that role to control the other participants in the operation. Such an outcome is contrary
to the letter and spirit of the Sentencing Guidelines.” United States v. Cameron, 573 F.3d 179,
185 (4th Cir. 2009) (emphasis added).

       The evidence simply does not support a Section 3B1.1 adjustment. “[A]n incorrect
calculation of the defendant’s Guidelines range is reversible procedural error.” United States v.
Kamper, 748 F.3d 728, 749 (6th Cir. 2014). That error requires remand because the court “failed
to consider the correct Guidelines range.” United States v. Lane, 509 F.3d 771, 775 (6th Cir.
2007) (quotation marks and brackets omitted).

                                          CONCLUSION

       The Government has not asked for a second chance to support the Section 3B1.1
adjustment on remand and, indeed, expressly stated in the district court that it had no other
evidence to support the adjustment. Therefore, on remand the district court should re-sentence
Christian using a guideline range that is not based on a Section 3B1.1 adjustment. Because we
vacate Christian’s sentence, we do not decide whether that guideline range should include a
fourteen- or twelve-level amount-of-loss adjustment, nor do we reach Christian’s other
sentencing arguments. Our remand allows the district court to administer Rule 11(c)(5) warnings
in the course of re-sentencing, so we do not decide whether the district court’s Rule 11 colloquy
was plain error.

       For these reasons, we vacate Christian’s sentence and remand for re-sentencing.
