                    FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

JUAN JOSE JIMENEZ RICE,                   
                            Petitioner,          No. 05-74297
                  v.
                                                 Agency No.
                                                 A077-855-635
ERIC H. HOLDER    JR., Attorney
General,                                           OPINION
                          Respondent.
                                          
          On Petition for Review of an Order of the
               Board of Immigration Appeals

                 Submitted February 11, 2010*
                   San Francisco, California

                    Filed February 26, 2010

       Before: John T. Noonan, Marsha S. Berzon and
               Sandra S. Ikuta, Circuit Judges.

                   Opinion by Judge Berzon;
                  Concurrence by Judge Ikuta




  *The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).

                               3171
                  JIMENEZ RICE v. HOLDER             3173




                       COUNSEL

Nathan M. Zaslow, San Francisco, California, for the peti-
tioner.
3174               JIMENEZ RICE v. HOLDER
Peter D. Keisler, David V. Bernal, and Jamie M. Dowd, U.S.
Department of Justice, Washington, D.C., for the Attorney
General.


                         OPINION

BERZON, Circuit Judge:

   We must decide whether first-time offenders convicted of
using or being under the influence of a controlled substance
pursuant to Cal. Health & Safety Code § 11550, where such
offenders are subsequently granted relief under Cal. Penal
Code § 1203.4, are eligible for the same immigration treat-
ment as those convicted of simple drug possession whose
convictions are expunged under the Federal First Offender
Act (FFOA). We hold that they are.

   FACTUAL AND PROCEDURAL BACKGROUND

  Juan Jose Jimenez Rice is a national and citizen of Mexico.
He entered the United States as a visitor on January 19, 1987,
with permission to stay until July 18, 1987. He never left. He
has two U.S. citizen children, a 22-year-old daughter and an
18-year-old son.

   On September 20, 1999, the former Immigration and Natu-
ralization Service (INS) issued Jimenez a Notice to Appear,
charging that he was unlawfully present in the United States
and therefore removable. His first removal hearing, in Octo-
ber 1999, was continued so that he could apply for cancella-
tion of removal.

  In June 2001, Jimenez was charged in a single complaint
with two drug offenses: one felony count of possession of
cocaine in violation of Cal. Health & Safety Code § 11350(a)
and one misdemeanor count of using or being under the influ-
                    JIMENEZ RICE v. HOLDER                 3175
ence of a stimulant in violation of Cal. Health & Safety Code
§ 11550. He pleaded nolo contendere and was convicted of
both offenses on November 29, 2001. The Superior Court sus-
pended imposition of sentence and admitted him to three
years of supervised probation. In June 2003, the court issued
a single order under Cal. Penal Code § 1203.4 terminating
Jimenez’s probation under Cal. Penal Code § 1203.3, setting
aside his pleas of nolo contendere, entering pleas of not
guilty, dismissing the complaint, and releasing him from spec-
ified penalties and disabilities resulting from the offenses.

   The INS moved to pretermit Jimenez’s application for can-
cellation of removal, asserting, among other things, that the
convictions would prevent him from establishing the requisite
good moral character. In a May 2004 hearing, the Immigra-
tion Judge (IJ) held that Jimenez was statutorily ineligible for
cancellation of removal because he could not satisfy the good
moral character requirements, specifically section 101(f)(3) of
the Immigration and Nationality Act (INA), 8 U.S.C.
§ 1101(f)(3), because he had been convicted of violating a
controlled substance law as defined in INA § 212(a)(2)(A), 8
U.S.C. § 1182(a)(2)(A).

   The Board of Immigration Appeals (BIA) conducted a de
novo review and dismissed Jimenez’s appeal. It held, first,
that he would not have been eligible for relief under the Fed-
eral First Offender Act (FFOA), 18 U.S.C. § 3607, for the
offense of being under the influence of a controlled substance
because the FFOA applies only to simple possession offenses.
Thus, that conviction was still valid for immigration purposes,
even though he received relief under Cal. Penal Code
§ 1203.4. Second, the BIA held that “expunged convictions
can be used in assessing an alien’s good moral character
because the facts underlying expunged convictions are rele-
vant in the context of good moral character determinations.”
Jimenez timely petitioned for review with this court.
3176                JIMENEZ RICE v. HOLDER
                         ANALYSIS

   This court has jurisdiction under 8 U.S.C. § 1252(a)(2)(D)
to review the BIA’s determination that a controlled substance
conviction precludes immigration relief as a matter of law.
See Ramirez-Altamirano v. Holder, 563 F.3d 800, 804 (9th
Cir. 2009).

   Where, as here, the BIA conducted a de novo review of the
IJ’s decision, we review only the decision of the BIA. See
Romero v. Holder, 568 F.3d 1054, 1059 (9th Cir. 2009). The
BIA’s conclusions of law are reviewed de novo. Id. Review
is limited to the actual grounds relied upon by the BIA. See
Ramirez-Altamirano, 563 F.3d at 804. If the BIA’s decision
cannot be sustained upon its reasoning, we must remand to
allow the agency to decide any issues remaining in the case.
Id.

   [1] A nonpermanent resident seeking cancellation of
removal must meet four threshold requirements. INA
§ 240A(b)(1), 8 U.S.C. § 1229b(b)(1). He must:

    (A) [have] been physically present in the United
    States for a continuous period of not less than 10
    years immediately preceding the date of such appli-
    cation;

    (B) [have] been a person of good moral character
    during such period;

    (C) [not have] been convicted of an offense under [8
    U.S.C. § ] 1182(a)(2), 1227(a)(2), or 1227(a)(3) . . . ,
    subject to [certain exceptions for victims of domestic
    violence]; and

    (D) establish[ ] that removal would result in excep-
    tional and extremely unusual hardship to the alien’s
    spouse, parent, or child, who is a citizen of the
                          JIMENEZ RICE v. HOLDER                         3177
       United States or an alien lawfully admitted for per-
       manent residence.

Id. A person cannot be found to have good moral character if,
among other things, he is “convicted of, or . . . admits having
committed, or . . . admits committing acts which constitute the
essential elements of . . . a violation of . . . any law or regula-
tion of a State . . . relating to a controlled substance,” INA
§ 212(a)(2)(A)(i), 8 U.S.C. § 1182(a)(2)(A)(i), as long as the
offense was committed “during the period for which good
moral character is required to be established,” INA
§ 101(f)(3), 8 U.S.C. § 1101(f)(3).

   [2] “[A]s a general rule, an expunged conviction qualifies
as a conviction under the INA.” De Jesus Melendez v. Gon-
zales, 503 F.3d 1019, 1024 (9th Cir. 2007) (quoting Ramirez-
Castro v. INS, 287 F.3d 1172, 1174 (9th Cir. 2002)). The Fed-
eral First Offender Act (FFOA), 18 U.S.C. § 3607, creates an
exception to the rule. The FFOA:

       allows persons who have never previously violated
       the narcotics laws and are found guilty of first time
       simple drug possession to have the charges dis-
       missed without entry of a conviction, provided that
       the judge deems them suitable for such treatment.
       The law applies to citizens and aliens alike, and
       allows those who benefit from it to avoid having
       their offenses used against them for any purpose.

De Jesus Melendez, 503 F.3d at 1024 (quoting Lujan-
Armendariz v. INS, 222 F.3d 728, 737 (9th Cir. 2000)).1
  1
   In relevant part, the FFOA provides:
      (a) . . . If a person found guilty of an offense described in section
      404 of the Controlled Substances Act (21 U.S.C. 844) —
          (1) has not, prior to the commission of such offense, been
          convicted of violating a Federal or State law relating to con-
          trolled substances; and
3178                     JIMENEZ RICE v. HOLDER
“Given that the FFOA provides immigration relief for first-
time defendants found guilty of drug possession in federal
court,” Ramirez-Altamirano, 563 F.3d at 806, we have held
“as a matter of constitutional equal protection, that the bene-
fits of the Act [must] be extended to aliens whose offenses are
expunged under state rehabilitative laws, provided that they
would have been eligible for relief under the Act had their
offenses been prosecuted as federal crimes.” Lujan-
Armendariz, 222 F.3d at 749 (citing Paredes-Urrestarazu v.
INS, 36 F.3d 801, 811-12 (9th Cir. 1994); Garberding v. INS,
30 F.3d 1187, 1191 (9th Cir. 1994)).

   [3] Further, although the plain language of the FFOA
applies only to offenses described in 21 U.S.C. § 844, which
provides that it is “unlawful . . . to possess a controlled sub-
stance,” we have held that the FFOA can be applicable to a
drug offense less serious than simple possession, possession
of drug paraphernalia. See Cardenas-Uriarte v. INS, 227 F.3d
1132, 1137 (9th Cir. 2000). Noting that Congress intended the
FFOA to “permit[ ] first-time drug offenders who commit the
least serious type of drug offense to avoid the drastic conse-
quences which typically follow a finding of guilt in drug

        (2) has not previously been the subject of a disposition under
        this subsection;
    the court may . . . place him on probation for a term of not more
    than one year without entering a judgment of conviction. At any
    time before the expiration of the term of probation, if the person
    has not violated a condition of his probation, the court may, with-
    out entering a judgment of conviction, dismiss the proceedings
    against the person and discharge him from probation. . . .
    (b) . . . A disposition under subsection (a) . . . shall not be consid-
    ered a conviction for the purpose of a disqualification or a dis-
    ability imposed by law upon conviction of a crime, or for any
    other purpose.
18 U.S.C. § 3607. Section 404 of the Controlled Substances Act criminal-
izes only simple possession of a controlled substance. 21 U.S.C. § 844(a).
                    JIMENEZ RICE v. HOLDER                 3179
cases,” id. (quoting Lujan-Armendariz, 222 F.3d at 734-35),
we determined that Congress “had no need to include posses-
sion of drug paraphernalia explicitly under the FFOA because
no federal statute made such possession a crime.” Ramirez-
Altamirano, 563 F.3d at 808. At least in the circumstances of
Cardenas’s case, we concluded, possession of drug parapher-
nalia was a “lesser offense” than simple possession of a con-
trolled substance, so “congressional intent indicates that it
should be included under the Act.” Cardenas-Uriarte, 227
F.3d at 1137. Our cases thus establish that a state conviction
cannot be used for immigration purposes if the alien can show
that “(1) the conviction was his first offense; (2) he had not
previously been accorded first offender treatment; (3) his con-
viction was for possession of drugs, or an equivalent or lesser
charge such as possession of drug paraphernalia, . . . ; and (4)
he received relief under a state rehabilitative statute.”
Ramirez-Altamirano, 563 F.3d at 812 (internal citation omit-
ted) (emphasis added).

   [4] We see no relevant distinction for present purposes
between the offenses of possession of drug paraphernalia and
using or being under the influence of a controlled substance,
as both are generally less serious than simple possession. As
with possession of drug paraphernalia, “Congress would
never have considered including” under the FFOA the offense
of using or being under the influence of a controlled sub-
stance, because no federal statute covers that crime.
Cardenas-Uriarte, 227 F.3d at 1137; see 21 U.S.C. §§ 841-
865. Here, as in Cardenas-Uriarte, “[w]e can be sure that
[using or being under the influence of a controlled substance]
is a lesser offense because it [is] a misdemeanor . . . while
possession of [cocaine is] a felony.” Cardenas-Uriarte, 227
F.3d at 1137; see Cal. Health & Safety Code §§ 11350(a),
11550. Moreover, we have observed in other cases that “use
of drugs has generally been considered a less serious crime
than possession.” Medina v. Ashcroft, 393 F.3d 1063, 1066
(9th Cir. 2005) (internal quotation omitted). We therefore
hold that persons convicted of using or being under the influ-
3180                JIMENEZ RICE v. HOLDER
ence of a controlled substance, where that offense is less seri-
ous than simple drug possession, are eligible for the same
immigration treatment as those convicted of drug possession
under the FFOA.

   We decline to address here the government’s contention
that Jimenez would not have been eligible for relief under the
FFOA because he was convicted of two drug offenses on
November 29, 1999. The BIA’s decision was not premised on
that circumstance, and it was asserted here for the first time
in a letter filed with this court pursuant to Federal Rule of
Appellate Procedure 28(j). See Ramirez-Altamirano, 563 F.3d
at 804 (holding that this court’s “review is limited to the
actual grounds relied upon by the BIA”); Medina-Morales v.
Ashcroft, 371 F.3d 520, 527 n.6 (9th Cir. 2004) (concluding
that the government had waived an argument made for the
first time in a 28(j) letter).

   The BIA also held that “expunged convictions can be used
in assessing an alien’s good moral character because the facts
underlying expunged convictions are relevant in the context
of good moral character determinations.” It is unclear whether
this second holding was in the alternative, in the event that the
FFOA does cover Jimenez’s convictions, or whether it
addresses only convictions expunged under state law but not
eligible for FFOA relief. Under the latter interpretation, the
BIA’s second holding is correct, see Ramirez-Castro, 287
F.3d at 1175, but this holding would be irrelevant were the
BIA to determine on remand that Jimenez’s simultaneous
convictions are both eligible for relief under Lujan-
Armendariz.

   If, on the other hand, the BIA’s holding refers to expunged
convictions that would be eligible for relief under the FFOA,
then the holding is erroneous. We have recently held that “the
facts underlying a conviction that would have been eligible
for relief under the FFOA, but was expunged under a state
rehabilitative statute, cannot serve as an ‘admission’ of a drug
                   JIMENEZ RICE v. HOLDER                3181
offense, statutorily barring a finding of good moral character
under 8 U.S.C. § 1101(f)(3).” Romero, 568 F.3d at 1062. That
is so because “under the FFOA, ‘the finding of guilt is
expunged and no legal consequences may be imposed as a
result of the defendant’s having committed the offense. The
[FFOA’s] ameliorative provisions apply for all purposes.’ ”
Id. at 1060 (quoting Lujan-Armendariz, 222 F.3d at 735)
(brackets in Romero). If Jimenez’s simultaneous convictions
qualify for relief under Lujan-Armendariz, then they cannot
serve as a bar to his proving good moral character.

                      CONCLUSION

   [5] Jimenez’s state conviction for using or being under the
influence of a controlled substance, which has been expunged,
does not bar his relief under Lujan-Armendariz. As the BIA
erred in holding otherwise, we grant the petition and remand
to the BIA.

  PETITION GRANTED; REMANDED for further proceed-
ings.



IKUTA, Circuit Judge, concurring:

   Though Congress determined that an alien who is found
guilty and subject to some form of penalty ordered by the
court is considered to have a “conviction” for purposes of
immigration law, 8 U.S.C. § 1101(a)(48)(A), our cases have
all but written this requirement out of the INA. Beginning in
Lujan-Armendariz v. INS, we reached the erroneous conclu-
sion that the Equal Protection Clause required us to hold that
an alien did not have a “conviction” for immigration purposes
if: (1) the alien was “adjudged guilty” of a state crime that
was expunged under state law; and (2) the alien would have
qualified for expungement under the Federal First Offender
Act (FFOA) if adjudged guilty of an identical federal crime.
3182                JIMENEZ RICE v. HOLDER
See 222 F.3d 728, 749-50 (9th Cir. 2000). As every other cir-
cuit to consider this issue has noted, this equal protection
analysis is meritless. See Ramirez-Altamirano v. Holder, 563
F.3d 800, 816-17 (9th Cir. 2009) (Ikuta, J., dissenting) (col-
lecting cases).

   From this dubious starting point, we have step by step trav-
eled further afield from any reasonable interpretation of the
INA, holding that an alien does not have a conviction for
immigration purposes even if the alien would not have quali-
fied for expungement under the FFOA, see Cardenas-Uriarte
v. INS, 227 F.3d 1132, 1137-38 (9th Cir. 2000), or has not
received state law relief equivalent to expungement under the
FFOA, see Ramirez-Altamirano, 563 F.3d at 812. Indeed, our
treatment of state relief statutes does not even track state law:
Under our case law, though the state can rely on the facts of
an expunged state law conviction in subsequent prosecutions,
see Cal. Penal Code § 1203.4(a), we forbid the BIA to rely on
the expunged state law conviction for any purpose, see
Romero v. Holder, 568 F.3d 1054, 1061-62 (9th Cir. 2009).

   Today, compelled by these precedents, we extend this
judge-made edifice even further, holding that the BIA may
not consider for any purpose a state crime (using or being
under the influence of a controlled substance in violation of
California Health & Safety Code section 11550) that neither
qualifies for FFOA treatment nor received state law relief
equivalent to that under the FFOA. In reaching this conclu-
sion, we again overrule the BIA’s determination that such
convictions should retain immigration consequences under the
INA, even though: (1) we owe deference to the BIA’s inter-
pretation that the state conviction has immigration conse-
quences under the INA, see INS v. Aguirre-Aguirre, 526 U.S.
415, 425 (1999); (2) Congress has expressly amended the
INA to define “conviction” in a manner that includes
expunged state convictions, see 8 U.S.C. § 1101(a)(48)(A);
and (3) the Supreme Court has informed us that Congress may
“allow[ ] benefits to some aliens but not to others,” Mathews
                     JIMENEZ RICE v. HOLDER                  3183
v. Diaz, 426 U.S. 67, 80 (1976), and that such delineations
“must be upheld against equal protection challenge if there is
any reasonably conceivable state of facts that could provide
a rational basis for the classification,” FCC v. Beach
Commc’ns, Inc., 508 U.S. 307, 313 (1993).

   Our case law compels me to join the majority. I lament,
however, that we have drifted so far off the path counseled by
Congress, the Supreme Court, and our sister circuits. The
creeping expansion of federal common law in this area calls
out for us to revisit and correct this questionable line of prece-
dent.
