                    FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                       No. 05-50777
                Plaintiff-Appellee,
               v.                                 D.C. No.
                                               CR-03-01112-MLH
ARTURO CARLOS FIGUEROA-OCAMPO,
                                                   OPINION
             Defendant-Appellant.
                                          
         Appeal from the United States District Court
           for the Southern District of California
          Marilyn L. Huff, District Judge, Presiding

                  Submitted* February 1, 2007
                     Pasadena, California

                        Filed July 24, 2007

       Before: Harry Pregerson, Ronald M. Gould, and
             Richard R. Clifton, Circuit Judges.

                  Opinion by Judge Pregerson




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

                                8981
8984          UNITED STATES v. FIGUEROA-OCAMPO


                        COUNSEL

Jodi Denise Thorp, Federal Defenders of San Diego, Inc., for
the defendant-appellant.

Mary D. Fan, Assistant United States Attorney, San Diego,
California, for the plaintiff-appellee.


                         OPINION

PREGERSON, Circuit Judge:

   Arturo Carlos Figueroa-Ocampo (Figueroa-Ocampo)
appeals his sentence for being a deported alien found in the
United States in violation of 8 U.S.C. § 1326(a). We have
jurisdiction under 28 U.S.C. § 1291. Applying the recent
United States Supreme Court decision in Lopez v. Gonzales,
___ U.S. ___, 127 S. Ct. 625 (2006), we vacate Figueroa-
Ocampo’s sentence and remand for re-sentencing.

                             I.

   On April 16, 2003, Figueroa-Ocampo was indicted for vio-
lating 8 U.S.C. § 1326(a) (previously deported alien found in
               UNITED STATES v. FIGUEROA-OCAMPO              8985
the United States without the Attorney General’s permission).
On October 22, 2004, a federal jury found Figueroa-Ocampo
guilty as charged in the one-count indictment. Figueroa-
Ocampo’s presentence report (PSR) set his base offense level
at eight points and added eight points for his prior California
felony conviction for possession of a controlled substance,
which the PSR characterized as an “aggravated felony” under
U.S. Sentencing Guidelines Manual § 2L1.2(b)(1)(C) (2003).
Figueroa-Ocampo received a three-point reduction for accep-
tance of responsibility, lowering his total offense level to thir-
teen. With a criminal history category of V, his guidelines
sentence range was thirty to thirty-seven months imprison-
ment followed by three years of supervised release.

   Figueroa-Ocampo objected to the eight-point sentence
enhancement for his simple possession (possession for per-
sonal use) offense in violation of California Health and Safety
Code § 11350(a). He argued that his simple possession
offense should not be considered an “aggravated felony”
because, although a felony under California law, the offense
is a misdemeanor under the Controlled Substances Act. The
district court overruled Figueroa-Ocampo’s objection and sen-
tenced him to thirty-seven months of imprisonment.

                               II.

   We review de novo whether the district court erred when
it determined that the defendant’s prior conviction qualifies as
an “aggravated felony” for purposes of U.S. Sentencing
Guidelines Manual § 2L1.2(b)(1)(C). See United States v.
Soberanes, 318 F.3d 959, 961 (9th Cir. 2003). We also review
de novo the “district court’s interpretation of the [S]entencing
[G]uidelines.” Id.

                               III.

  A defendant convicted under section 1326(a) is generally
subject to a maximum term of imprisonment of two years. See
8986           UNITED STATES v. FIGUEROA-OCAMPO
8 U.S.C. § 1326(a). However, a defendant whose prior
removal from the United States was “subsequent to a convic-
tion for commission of an aggravated felony” may receive up
to a twenty-year sentence under section 1326(b)(2). Id.

   [1] What a sentence may be for a person convicted of enter-
ing or remaining in the United States in violation of 8 U.S.C.
§ 1326(a) is governed by section 2L1.2 of the Sentencing
Guidelines. Under the guidelines, the sentencing court may
increase the defendant’s base offense level by eight points if
the defendant was previously deported after a conviction for
an “aggravated felony.” See U.S. Sentencing Guidelines Man-
ual § 2L1.2(b)(1)(C); see also Soberanes, 318 F.3d at 960.

   Application note 3 to the sentencing guideline § 2L1.2
states that the term “ ‘aggravated felony’ has the meaning
given that term in . . . 8 U.S.C. § 1101(a)(43).” U.S. Sentenc-
ing Guidelines Manual § 2L1.2, cmt. n.3(A) (citing section
101(a)(43) of the Immigration and Naturalization Act (INA)).
Section 1101(a)(43) defines “aggravated felony” as “illicit
trafficking in a controlled substance . . . including a drug traf-
ficking crime (as defined in section 924(c) of Title 18).” 8
U.S.C. § 1101(a)(43)(B). Section 924(c) defines a drug traf-
ficking crime as “any felony punishable under the Controlled
Substances Act.” 18 U.S.C. § 924(c)(2). Lastly, the relevant
provision of the Controlled Substances Act defines the term
“felony” as “any Federal or State offense classified by appli-
cable Federal or State law as a felony.” 21 U.S.C. § 802(13).

   Simple possession is punishable as a misdemeanor under
the Controlled Substances Act. See 21 U.S.C. § 844(a).

                               IV.

   Relying on section 1326(b)(2), the district court enhanced
Figueroa-Ocampo’s sentence by eight points based on his
prior conviction for simple possession (possession for per-
sonal use) under California law.
                 UNITED STATES v. FIGUEROA-OCAMPO                     8987
   [2] In overruling Figueroa-Ocampo’s objection to the eight-
point enhancement, the district court acted consistently with
our holding in United States v. Ibarra-Galindo, 206 F.3d 1337
(9th Cir. 2000). In Ibarra-Galindo, we held that an aggravated
felony enhancement under sentencing guideline section 2L1.2
is appropriate where the defendant previously suffered a state
felony conviction, even though the same offense may be only
a misdemeanor under federal law. See id. at 1339-40. We
interpreted the term “felony punishable under the Controlled
Substances Act” to mean that the defendant must have been
convicted of a possession offense that is punishable as a fel-
ony under either state or federal law, and which is also pun-
ishable under the Controlled Substances Act.1 See id. at 1339.
Accordingly, a simple possession offense that is a misdemea-
nor under federal law, such as the California possession
offense suffered by Figueroa-Ocampo, could be classified as
an “aggravated felony” under section 1101(a)(43)(B) and
used to enhance a defendant’s sentence under guideline sec-
tion 2L1.2(b)(1)(C).

   Until now, this court has repeatedly relied on Ibarra-
Galindo’s holding to decide sentencing appeals that raised the
same issue: whether an offense that is a felony under state law
but a misdemeanor under federal law can be a “felony punish-
able under the Controlled Substances Act,” and thus an “ag-
gravated felony.” See, e.g., Soberanes, 318 F.3d at 961
(reaffirming that a “simple drug possession can be an ‘aggra-
vated felony’ for purposes of U.S.S.G. § 2L1.2.”); see also
  1
    Judge Canby disagreed with the panel majority’s interpretation of the
term “felony punishable under the Controlled Substances Act” which he
read to encompass an offense that is punishable under the Controlled Sub-
stances Act as a felony. Judge Canby noted that, “[b]ecause common
sense rebels at the thought of classifying bare possession of a tiny amount
of narcotics as a drug trafficking crime, we should not adopt that interpre-
tation unless the statutory language compels us to conclude that Congress
intended such a startling result.” Ibarra-Galindo, 206 F.3d at 1341
(Canby, J., dissenting).
8988          UNITED STATES v. FIGUEROA-OCAMPO
United States v. Rios-Beltran, 361 F.3d 1204, 1207 (9th Cir.
2004).

   [3] We have, however, interpreted the term “aggravated fel-
ony” under section 1101(a)(43)(B) differently for immigration
purposes. For immigration purposes, we held that a posses-
sion offense must be punishable as a felony under federal law
to constitute an “aggravated felony.” See Cazarez-Gutierrez v.
Ashcroft, 382 F.3d 905, 912 (9th Cir. 2004). Thus, in the
immigration context, a simple possession offense that is pun-
ishable as a felony under state law but a misdemeanor under
federal law, like the one suffered by Figueroa-Ocampo, is not
to be considered as an “aggravated felony” under section
1101(a)(43)(B).

   In his brief to this court, Figueroa-Ocampo urged us to
apply the Cazarez-Gutierrez interpretation of the term “aggra-
vated felony” in criminal cases. Figueroa-Ocampo reasoned
that the definition of the term “aggravated felony” for immi-
gration purposes applies equally to criminal/sentencing mat-
ters because the Sentencing Guidelines expressly adopted the
Immigration and Naturalization Act’s definition of the term
“aggravated felony” as set forth in 8 U.S.C. § 1101(a)(43).

   While this appeal was pending, the Supreme Court granted
certiorari and heard oral argument in two consolidated cases,
United States v. Toledo-Flores, 126 S. Ct. 1652 (2006), and
Lopez v. Gonzales, 126 S. Ct. 1651 (2006). Toledo-Flores, a
Fifth Circuit criminal case, and Lopez, an Eighth Circuit
immigration case, required our sister circuits to define what
constitutes a “felony punishable under the Controlled Sub-
stances Act.” The Fifth Circuit and the Eighth Circuit’s hold-
ings were consistent with our holding in Ibarra-Galindo. The
two Circuits held that conduct that is punishable as a felony
under state law, but a misdemeanor under federal law, consti-
tutes a “felony punishable under the Controlled Substances
Act,” and thus an “aggravated felony” under section
1101(a)(43)(B).
                UNITED STATES v. FIGUEROA-OCAMPO                   8989
   In Toledo-Flores, the defendant-appellant objected to the
sentencing court’s determination that his state simple posses-
sion offense, a felony under Texas law and a misdemeanor
under federal law constitutes an “aggravated felony” for sen-
tence enhancement purposes. The Fifth Circuit disagreed. See
United States v. Estrada-Mendoza, 475 F.3d 258, 260 (5th
Cir. 2007).

   In Lopez, petitioner Lopez suffered a prior conviction in
South Dakota for aiding and abetting the possession of cocaine.2
See Lopez v. Gonzales, 417 F.3d 934, 935 (8th Cir. 2005).
During Lopez’s removal proceedings, the government charac-
terized this simple possession offense as an “aggravated felo-
ny” which left Lopez ineligible for cancellation of removal.
See id. The Board of Immigration Appeals’s (BIA) agreed.
See id. at 936. On appeal, the Eight Circuit affirmed the BIA
and denied Lopez’s petition for review. See id. at 938.

  We postponed the decision in this case pending the
Supreme Court’s resolution of these two consolidated appeals.

  On December 5, 2006, the Supreme Court decided Lopez.
See Lopez v. Gonzales, ___ U.S. ___, 127 S. Ct. 625 (2006).
On the same day, the Supreme Court dismissed the writ of
certiorari in Toledo-Flores as improvidently granted. See
Toledo-Flores v. United States, 127 S. Ct. 638 (2006).

   [4] In Lopez, the Court held that “a state offense constitutes
a ‘felony punishable under the Controlled Substances Act’
only if it proscribes conduct punishable as a felony under that
federal law.” Lopez, 127 S. Ct. at 633. In so holding, the
Court rejected the government’s argument that the term “fel-
ony punishable under the Controlled Substances Act” refers
to any offense that is punishable by federal law as either a fel-
  2
   South Dakota law treats aiding and abetting possession of a controlled
substance as equivalent to a possession offense. See Lopez, 127 S. Ct. at
629.
8990          UNITED STATES v. FIGUEROA-OCAMPO
ony or a misdemeanor. Id. at 629. The Court further reasoned
that “illicit trafficking,” the term defined as a “felony punish-
able under the Controlled Substances Act,” requires a “com-
mercial dealing” which “is no[t an] element of simple
possession.” Id. at 630.

   [5] Moreover, the Court clearly pointed out that the defini-
tion of “aggravated felony” under section 1101(a)(43)(B)
applies to both the Immigration and Naturalization Act and
the Sentencing Guidelines that adopted the INA’s definition
of that term. Id. at 627-28. The Court, in resolving the Circuit
split, cited both immigration and criminal cases, including
Ibarra-Galindo and Cezarez-Gutierrez. Id. at 629 n.3.

   [6] Given the Supreme Court’s discussion of the shared
definition of “aggravated felony” under the INA and the Sen-
tencing Guidelines, the Court’s reference to Ibarra-Galindo
and Cezarez-Gutierrez, and the Court’s interpretation of the
INA term “aggravated felony” adopted by the Guidelines, it
is beyond dispute that Lopez applies in both criminal sentenc-
ing and immigration matters. We acknowledge, therefore, that
Ibarra-Galindo has been effectively overruled by Lopez and
is no longer valid authority. Accordingly, under Lopez, the
district court erred when it categorized Figueroa-Ocampo’s
prior simple possession conviction as an “aggravated felony.”
Because Figueroa-Ocampo’s prior simple possession convic-
tion was not an “aggravated felony,” the eight-point “aggra-
vated felony” enhancement was improper.

  But our inquiry does not end here. On January 31, 2006,
shortly after the Supreme Court issued its opinion in Lopez,
Figueroa-Ocampo completed serving his thirty-seven month
sentence and was released to serve his three year term of
supervised release.

   The government agrees with Figueroa-Ocampo that, under
the Supreme Court’s recent decision in Lopez, Figueroa-
Ocampo’s criminal sentence should not have been enhanced
              UNITED STATES v. FIGUEROA-OCAMPO               8991
based on his prior simple possession conviction. The parties,
however, disagree as to the effect of the Lopez decision on
Figueroa-Ocampo’s appeal in light of his subsequent release
from custody. In short, the government contends that the
appeal is moot.

   The government urges us to dismiss Figueroa-Ocampo’s
appeal as moot because, in its view, under 18 U.S.C.
§ 3624(e), excess prison time is not credited to the supervised
release term and may not reduce its length. The government
cites United States v. Johnson, 529 U.S. 53, 60 (2000), for the
proposition that the term of supervised release begins upon
the defendant’s actual release, and concludes that there is
nothing that this court can do to shorten-up Figueroa-
Ocampo’s term of supervised release. Figueroa-Ocampo dis-
agrees.

   [7] We agree with the government that we cannot credit
Figueroa-Ocampo’s supervised release term with the “extra”
time he served in custody. See Mujahid v. Daniels, 413 F.3d
991, 994 (9th Cir. 2005) (reiterating previously recognized
principle that “a prisoner who wrongfully serves excess prison
time is not entitled to an automatic reduction in his term of
supervised release.”). However, we do not agree with the gov-
ernment’s conclusion that Figueroa-Ocampo’s appeal is moot.

    [W]here a defendant has received a sentence that
    includes a period of supervised release, a challenge
    to the length of his sentence of imprisonment is not
    moot because the district court has discretion regard-
    ing the length of supervised release, see 18 U.S.C.
    § 3583(a)-(b), and can change the supervised release
    period, see § 3583(e)(2).

United States v. Allen, 434 F.3d 1166, 1170 (9th Cir. 2006)
(noting that “the district court could resentence Allen to a
shorter term of supervised release in light of [the fact that
defendant should have been sentenced to] a shorter appropri-
8992            UNITED STATES v. FIGUEROA-OCAMPO
ate term of imprisonment”). Figueroa-Ocampo appealed his
sentence. Accordingly, he objected to the thirty-seven month
term of imprisonment and the subsequent three-year period of
supervised release.

   As discussed above, section 1326(b) governs the sentence
of a defendant convicted under section 1326(a) who has suf-
fered a prior conviction. A defendant who was previously
deported following a conviction for “commission of three or
more misdemeanors involving drugs, crimes against the per-
son, or both, or a felony (other than an aggravated felony)”
faces a maximum ten years imprisonment. See 8 U.S.C.
§ 1326(b)(1). However, a defendant who was previously
deported after suffering an “aggravated felony” conviction
faces a sentence of up to twenty years imprisonment. See 8
U.S.C. § 1326(b)(2).

   [8] The district court believed that Figueroa-Ocampo’s sim-
ple possession conviction under California law is to be treated
as an “aggravated felony.” Accordingly, the district court sen-
tenced Figueroa-Ocampo under section 1326(b)(2). Subse-
quently, the Court in Lopez made it clear that Figueroa-
Ocampo’s prior simple possession conviction is not to be
treated as an “aggravated felony” because it is not a “felony
punishable by the Controlled Substances Act.”3 Thus, under
Lopez, the district court was incorrect when it determined that
Figueroa-Ocampo faced a twenty-year statutory maximum
sentence under 8 U.S.C. § 1326(b)(2) instead of a ten-year
maximum sentence under 8 U.S.C. § 1326(b)(1).

  [9] This error is significant. The Sentencing Guidelines
provide different terms of supervised release for defendants
sentenced under section 1326(b)(1) and section 1326(b)(2).
Compare U.S. Sentencing Guidelines Manual § 5D1.2(a)(2)
  3
   Without the aggravated felony enhancement, the guideline range would
have been twenty-one to twenty-seven months instead of thirty to thirty-
seven months imprisonment.
              UNITED STATES v. FIGUEROA-OCAMPO             8993
(2005) (“[a]t least two years but not more than three years”
of supervised release for § 1326(b)(1)) with U.S. Sentencing
Guidelines Manual § 5D1.2(a)(1) (2005) (“[a]t least three
years but not more than five years” of supervised release for
§ 1326(b)(2)). Accordingly, Figueroa-Ocampo’s three-year
term of supervised release was calculated based on the wrong
statutory provision.

  [10] Because it is possible that the district court would have
imposed a shorter term of supervised release had it calculated
Figueroa-Ocampo’s sentence under the correct guideline, we
hold that Figueroa-Ocampo’s sentencing appeal is not moot.
See Gunderson v. Hood, 268 F.3d 1149, 1153 (9th Cir. 2001)
(holding that the possibility of relief is sufficient to prevent
mootness).

   [11] Because Figueroa-Ocampo was sentenced under now-
rejected jurisprudence, we vacate his sentence and remand for
re-sentencing.

  VACATED and REMANDED.
