        RECOMMENDED FOR FULL-TEXT PUBLICATION
             Pursuant to Sixth Circuit Rule 206
     ELECTRONIC CITATION: 2000 FED App. 0111P (6th Cir.)
                 File Name: 00a0111p.06


UNITED STATES COURT OF APPEALS
               FOR THE SIXTH CIRCUIT
                 _________________


                                  ;
                                   
 UNITED STATES OF AMERICA,
                                   
          Plaintiff-Appellee,
                                   
                                   
                                       No. 99-5364
            v.
                                   
                                    >
 JACK BRENT CRACE,                 
         Defendant-Appellant. 
                                  1
       Appeal from the United States District Court
     for the Eastern District of Kentucky at Pikeville.
    No. 95-00026—Joseph M. Hood, District Judge.
                Argued: January 27, 2000
           Decided and Filed: March 29, 2000
Before: KENNEDY, RYAN, and BOGGS, Circuit Judges.
                   _________________
                        COUNSEL
ARGUED: Stephen D. Milner, HUGHES, LOWRY &
MILNER, Lexington, Kentucky, for Appellant. Thomas L.
Self, ASSISTANT UNITED STATES ATTORNEY,
Lexington, Kentucky, for Appellee. ON BRIEF: Stephen D.
Milner, HUGHES, LOWRY & MILNER, Lexington,
Kentucky, for Appellant. Thomas L. Self, Charles P.
Wisdom, Jr., ASSISTANT UNITED STATES
ATTORNEYS, Lexington, Kentucky, for Appellee.

                             1
2     United States v. Crace                       No. 99-5364

                    _________________
                        OPINION
                    _________________
   KENNEDY, Circuit Judge. Defendant, Jack Brent Crace,
appeals the district court’s decision to revoke his supervised
release and impose an additional prison sentence after
determining that the defendant violated the terms of his
supervised release by producing a urine specimen which
tested positive for cocaine. He contends that the district court
erred in revoking his term of supervised release and, in the
alternative, that the district court applied an inappropriate
sentencing range in determining his sentence. We believe that
the district court’s decision to revoke the defendant’s
supervised release and incarcerate him for a year was not an
abuse of discretion and affirm the judgment of the district
court.
                           I. Facts
   Defendant Crace pled guilty to participating in the interstate
transportation of stolen property and was sentenced to a term
of twelve months imprisonment to be followed by a twenty-
four month period of supervised release. Shortly after the
defendant was released from federal custody, he was
convicted in state court and incarcerated. Upon his release
from state custody, the defendant was once again placed upon
supervised release for his federal sentence. Six days after his
release from state custody, the defendant tested positive for
cocaine. Defendant’s probation officer filed a Notification of
Violation of Supervised Release. Although the defendant
initially denied using cocaine when questioned by his
probation officer, he admitted using cocaine at the hearing on
the alleged supervised release violation. Following the
hearing, the district court judge revoked the defendant’s
supervised release and sentenced him to a period of twelve
months incarceration. Defendant appeals the revocation of
his supervised release and the sentence of incarceration
imposed by the district court.
10   United States v. Crace                      No. 99-5364      No. 99-5364                       United States v. Crace      3

   In addition to its finding that the defendant’s conduct                               II. Discussion
constituted a felony under federal law, the district court also
found that the defendant’s positive drug test constituted a         Defendant raises two issues on appeal. He argues that the
felony under state law. Under Kentucky law, possession of a       district court was not required to revoke his term of
controlled substance is a felony even if it is the individual’s   supervised release and that the district court abused its
first offense. See Ky. Rev. Stat. Ann. § 218A.1415(2)(b)          discretion by determining that it was mandated to incarcerate
(Baldwin 1998). Because defendant’s instant conduct, simple       the defendant. He also argues that the district court erred in
possession, divorced from his prior criminal activity,            applying the sentencing guidelines. He contends that the
constitutes a Class D felony, punishable by at least one year     district court’s finding that his conduct was a Grade B, rather
of imprisonment, we believe that the district court properly      than a Grade C offense constituted impermissible double
classified the defendant’s positive drug test as a Grade B        counting. In response, the government states that the district
violation.                                                        court did not abuse its discretion in revoking the defendant’s
                                                                  supervised release because it was mandated to do so by the
                      III. Conclusion                             case law of this circuit. The government also argues that the
                                                                  district court did not err in sentencing the defendant to 12
  For the foregoing reasons, we affirm the decision of the        months imprisonment because the district court’s
district court.                                                   consideration of the defendant’s prior criminal conduct did
                                                                  not constitute impermissible double counting.
                                                                    This court applies an abuse of discretion standard to its
                                                                  review of a district court’s decision to revoke supervised
                                                                  release. See United States v. Stephenson, 928 F.2d 728, 732
                                                                  (6th Cir. 1991). This court reviews a district court’s
                                                                  application of the sentencing guidelines to a particular set of
                                                                  facts de novo. See United States v. Childers, 86 F.3d 562,
                                                                  563 (6th Cir. 1996). We believe that the district court did not
                                                                  abuse its discretion in revoking the defendant’s term of
                                                                  supervised release. We also hold that the district court’s
                                                                  consideration of the defendant’s prior criminal conduct when
                                                                  classifying defendant’s current conduct as a Grade B violation
                                                                  was not impermissible double counting.
                                                                              A. Revocation of Supervised Release
                                                                     Defendant argues that a failed drug test constitutes a
                                                                  Grade C violation and that section 7B1.3(a) of the sentencing
                                                                  guidelines permits the district court to extend or modify the
                                                                  term of supervised release, in lieu of revoking the supervised
                                                                  release in the case of a Grade C violation. U.S.S.G.
                                                                  § 7B1.3(a) (1998). Because the district court held that under
                                                                  this circuit’s law, defendant’s failed drug test was evidence of
4        United States v. Crace                          No. 99-5364        No. 99-5364                      United States v. Crace      9

possession, a Grade B violation, which, under 18 U.S.C.                       measure different things. The offense level represents a
§ 3583(g), requires revocation of supervised release defendant                judgment as to the wrongfulness of the particular act.
argues that the court abused its discretion. We believe that                  The criminal history category principally estimates the
the district court was correct in finding that it was required by             likelihood of recidivism.
18 U.S.C. § 3583(g) to revoke the defendant’s term of
supervised release upon the defendant’s positive drug test and              Id. at 24 (internal citations omitted). The Second Circuit
admission of the use of a controlled substance unless                       noted that the statute under which the defendant was
defendant could come under the exception in 18 U.S.C.                       convicted, 8 U.S.C. § 1326, provided for an increased
§ 3583(d).                                                                  maximum sentence when the defendant had been convicted
                                                                            of an aggravated felony, as opposed to a simple felony. The
    We note that 18 U.S.C. § 3583(d) now provides that                      court stated that this indicated Congress’ conclusion that the
                                                                            defendant’s prior commission of an aggravated felony was
    [t]he court shall consider whether the availability of                  relevant to measuring the severity of the instant offense. Id.
    appropriate substance abuse treatment programs, or an                   Other circuits also have addressed the use of a defendant’s
    individual’s current or past participation in such                      prior felony conviction in calculating both the offense level
    programs, warrants an exception in accordance with                      and the criminal history and found this dual use permissible.
    United States Sentencing Commission guidelines from                     See United States v. Alessandroni, 982 F.2d 419, 423 (10th
    the rule of section 3583(g) when considering any action                 Cir. 1992) (holding that the district court properly used the
    against a defendant who fails a drug test.                              defendant’s prior conviction as the predicate felony under
                                                                            § 922(g)(1) and as a prior sentence in the defendant’s criminal
For individuals like Crace who have failed a drug test, the                 history); United States v. Wycoff, 918 F.2d 925, 927 (11th Cir.
district court must consider whether an appropriate substance               1990) (same).
abuse program was available, and whether enrollment in such
a program was an option preferable to prison. We assume                       We find the rationales of these courts persuasive and hold
that the district judge considered and rejected this option.                that the district court did not engage in impermissible double
Crace did not raise this issue on appeal, so it is waived;                  counting. Like the statute in Campbell, 21 U.S.C. § 844(a)
moreover, we do not require magic words in the record of the                provides for a higher maximum sentence for defendants who
sentencing hearing indicating that substance abuse treatment                have prior convictions for drug offenses. We think that this
was considered   in order to uphold the district court’s prison             evidences Congress’ belief that a defendant’s prior drug
sentence.1                                                                  convictions affect the severity of a subsequent drug
                                                                            possession offense. The district court’s use of Crace’s prior
  This case is governed by the holding set forth in United                  drug convictions to establish the offense level of his positive
States v. Hancox, 49 F.3d 223 (6th Cir. 1995) with respect to               drug screen and his criminal history category was not
                                                                            impermissible double counting. These prior convictions were
                                                                            used to establish both the wrongfulness of the instant offense
     1                                                                      and the defendant’s potential for recidivism. Because the
      We note defendant had three prior drug convictions. Also, the court   base offense and the criminal history category are intended to
was concerned that defendant’s original claim, that he didn’t know how
the drugs got in his system, “was not a positive step toward                reflect different concerns, we hold that the district court
rehabilitation.” The court did not extend supervised release saying, “I     properly considered the defendant’s prior convictions in its
don’t want any of my probation officers to have anything further to do      sentencing.
with defendant.”
8        United States v. Crace                            No. 99-5364         No. 99-5364                       United States v. Crace       5

  In determining that the defendant’s conduct constituted a                    whether the results of a failed drug test constitute possession.
felony, thus a Grade B violation, the district court considered                In Hancox, a panel of this Circuit held that use of a controlled
both state and federal law. The defendant argues that the                      substance constitutes possession under 18 U.S.C. § 3583(g).
district court should be guided by federal, not state law2 and                 Id. at 224.
that simple possession is not a felony under federal law. See
21 U.S.C. § 843(a) (simple possession is subject to                               The part of § 3583(d) discussed above was not in effect at
punishment of not more than one year imprisonment). Under                      the time of Hancox’s sentencing by the district court, so it did
federal law, the district court would be3 required to consider                 not affect the ruling on appeal. However, the district court
the defendant’s prior drug convictions in order to find that                   opinion in Hancox would be upheld today, under § 3583(d) as
his instant offense was a felony. Because the defendant’s                      it has been amended. This circuit’s ruling in Hancox on what
prior convictions affect the calculation of his criminal history,              constitutes possession stands, but insofar as the sentencing
the defendant argues that the district court’s consideration of                guidelines are rooted in the statutory commands of the
his prior convictions in defining the elements of the instant                  amended § 3583(d), they are not merely advisory. Hence,
offense was error.                                                             contrary to cases like United States v. Bolenbaugh, it is not
                                                                               the advisory nature of the section 7 guideline policy
  We disagree with the defendant’s contention that the                         statements that make a prison sentence acceptable, but rather
district court engaged in double counting. This case presents                  the minimal nature of the command in § 3583(d) to
the unique situation where a single act is relevant to two                     “consider” substance abuse treatment programs in lieu of
dimensions of the sentencing guidelines analysis. The district                 prison. See United States v. Bolenbaugh, No. 96-1499, 1996
court used the defendant’s prior convictions to determine both                 WL 557793 (6th Cir. Sept. 30, 1996). Again, we assume the
the base offense and his criminal history category. In United                  district court gave due consideration to alternatives to prison
States v. Campbell, 967 F.2d 20, 25 (2d Cir. 1992), the                        for the reasons noted above.
Second Circuit found that the use of a defendant’s prior
conviction for an aggravated felony in defining the instant                       The defendant argues that this panel should overturn the
offense and in calculating the defendant’s criminal history                    Hancox decision in light of the interpretation of 18 U.S.C.
was not impermissible double counting. The Campbell Court                      § 3583 by Katherine M. Goodwin, Assistant General Counsel,
noted that                                                                     Administrative Office of the United States Courts. In
                                                                               response to an inquiry by the district court’s probation office,
    it may be appropriate to count a single factor both in                     Goodwin stated that her office had recommended that United
    assessing the defendant’s criminal history category and                    States probation officers classify positive drug tests as Grade
    in calculating the applicable offense level since the two                  C violations under section 7B1.1 of the sentencing guidelines.
                                                                               She also stated that her office believed that positive drug tests
                                                                               were evidence of, but not necessarily determinative of
     2                                                                         possession. She stated that she believed that a court should
      The defendant, however, directs us to no case law which mandates         have discretion to decide whether a positive drug test
that the district court consider only federal law. In fact, the guidelines
reference federal, state and local law in their definition of the categories   constitutes possession for revocation purposes. Goodwin,
of supervised release violations. U.S.S.G. § 7B1.1. We address the             however, acknowledged that the Sixth Circuit, in the Hancox
district court’s analysis under state law supra.                               case, greatly restricted the district court’s discretion. While
                                                                               Goodwin argues that there are grounds to support the
     3
     The defendant had been convicted of three drug offenses, including        defendant’s contention that Hancox should be overturned, we
possession of a controlled substance, prior to his positive drug screen.
6     United States v. Crace                       No. 99-5364      No. 99-5364                       United States v. Crace      7

believe that the Hancox court considered all of the arguments       First, he contends that while his positive drug test is a
Goodwin raises in reaching its decision. In particular,             violation of the terms of his supervised release, it is not a
Goodwin cites the 1994 amendments to section 3583(d)                crime.      Second, he argues that the district court’s
which gave courts greater discretion to consider whether to         consideration of his prior criminal conduct in determining
revoke supervised release when a defendant fails a drug test.       whether his current conduct constitutes a felony is
She also notes that the guidelines reflect greater flexibility.     impermissible double counting. Because the defendant’s
The Hancox court was aware of the flexibility provided by the       prior criminal activity is encompassed in the district court’s
guidelines and still chose to hold that use constitutes             computation of his criminal history, he argues the district
possession and mandates revocation of supervised release.           court cannot use this same information to enhance the conduct
See 49 F.3d at 224-225 (citing United States v. Pettigrew,          for which he is being sentenced. The defendant requests that
Nos. 92-6621/6222, 1993 WL 322667 (6th Cir. Aug. 24,                this court remand his case for resentencing even though his
1993), which notes that the sentencing guidelines permit, but       sentence of 12 months incarceration falls into both guideline
do not require, the court to infer possession from positive         ranges. Because this court cannot determine what sentence
drug tests and holding that the “defendant’s admitted use of        the district court would have imposed had it applied the Grade
drugs necessarily required possession”). In addition, other         C guideline range defendant argues that remand is necessary.
panels which have considered this issue after the amendments
to section 3583(d) became effective have found that Hancox             A Grade B offense is identified as “conduct constituting
remains the law of the Circuit. See, e.g., United States v.         any other federal, state, or local offense [not encompassed in
Graham, No. 97-5195, 1997 WL 705070, *1 (6th Cir. Nov. 6,           Grade A] punishable by a term of imprisonment exceeding
1997) (holding that Hancox governs in a case where the              one year.” U.S.S.G. § 7B1.1(a)(2) (1998). A Grade C
district court revoked the defendant’s supervised release on        offense consists of “conduct constituting (A) a federal, state,
January 31, 1997); United States v. McDowell, No. 96-5924,          or local offense punishable by a term of imprisonment of one
1996 WL 665611 (6th Cir. Nov. 14, 1996) (similar). We               year or less; or (B) a violation of any other condition of
believe that this Circuit should adhere to the holding in           supervision.” U.S.S.G. § 7B1.1(a)(3) (1998). Defendant
Hancox; therefore, we affirm the decision of the district court     contends that his positive drug test should be classified as a
that defendant possessed cocaine. 18 U.S.C. § 3583(d),              Grade C violation because it constituted a violation of a
which provides an exception to mandatory revocation when            condition of his supervision, but did not constitute a crime.
a failed drug test is the source of the possession, seems to        In support of his argument, he again points to the Goodwin
have been enacted to remove any undue strictness of requiring       letter. Goodwin states that a positive drug test is evidence of,
revocation in all instances and to restore discretion to the        but not dispositive of the commission of a crime. As stated
district judge.                                                     above, we reject the Goodwin letter and adhere to the holding
                                                                    in Hancox. The defendant’s positive drug test combined with
                     B. Double Counting                             his admission of use of a controlled substance mandates a
                                                                    finding that the defendant possessed drugs. Because
   The defendant also argues that the district court erred in       possession of drugs is a crime, the district court erred in
finding that the applicable guideline range was 12-18 months.       classifying the defendant’s conduct as a Grade B violation
He contends that his use of cocaine constituted a Grade C           only if we find that defendant’s possession would be subject
offense, rather than a Grade B offense, and that the correct        to punishment of one year or less of imprisonment.
guideline range is 6-12 months. The defendant offers two
theories to support his contention that the district court erred.
