                  FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


UNITED STATES OF AMERICA,                No. 16-50102
          Plaintiff-Appellee,
                                        D.C. No.
             v.                   3:15-cr-02484-BEN-1

ALEJANDRO AGUILAR DIAZ,
       Defendant-Appellant.               OPINION


      Appeal from the United States District Court
         for the Southern District of California
       Roger T. Benitez, District Judge, Presiding

        Argued and Submitted October 3, 2017
                Pasadena, California

                   Filed March 9, 2018

      Before: Susan P. Graber, Mary H. Murguia,
        and Morgan Christen, Circuit Judges.

              Opinion by Judge Christen
2               UNITED STATES V. AGUILAR DIAZ

                            SUMMARY*


                           Criminal Law

    The panel vacated a sentence and remanded for re-
sentencing in a case in which the district court denied the
defendant, who pleaded guilty to importation of cocaine and
heroin, a minor-role reduction pursuant to U.S.S.G.
§ 3B1.2(b).

     Rejecting the defendant’s argument that the district court
erred because it did not consider or mention the five factors
listed in § 3B1.2 cmt. n.3(C) and failed to mention other
factors it did consider, the panel explained that the district
court was not obligated to tick off the factors on the record.
The panel had no trouble determining from the sentencing
memoranda and the transcript of the sentencing hearing that
the district court was well aware of the factors added by
Sentencing Guidelines Amendment 794.

    The panel concluded that Amendment 794 did not change
the size of the appropriate comparison group—it remains
impermissible to compare a defendant’s conduct to that of the
hypothetical average participant—but Amendment 794 makes
clear that when a defendant knows little about the scope and
structure of the criminal enterprise in which he was involved,
that fact weighs in favor of granting a minor-role adjustment.

    The panel held that to the extent the district court’s
reasoning reflects reliance on courier conduct as dispositive

    *
      This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
             UNITED STATES V. AGUILAR DIAZ                 3

of the defendant’s eligibility for a minor-role reduction, it
was error.

     Recognizing that the district court has considerable
latitude in ruling on minor-role adjustments, the panel
concluded that on this record it must remand for re-
sentencing because the district court adopted with little
elaboration the government’s argument, which included an
incorrect interpretation of § 3B1.2 and Amendment 794,
where there was no evidence that the defendant had a
proprietary interest in the outcome of the operation or
otherwise stood to benefit more than minimally, and where
the defendant had a limited understanding of the overall
scope and structure of the criminal operation.


                        COUNSEL

Samuel L. Eilers (argued), Federal Defenders of San Diego,
Inc., San Diego, California, for Defendant-Appellant.

Emily J. Keifer (argued), Assistant United States Attorney;
Laura E. Duffy, United States Attorney; Helen H. Hong,
Assistant United States Attorney, Chief, Appellate Section,
Criminal Division; United States Attorney’s Office, San
Diego, California; for Plaintiff-Appellee.
4            UNITED STATES V. AGUILAR DIAZ

                          OPINION

CHRISTEN, Circuit Judge:

                    I. INTRODUCTION

    Defendant Alejandro Aguilar Diaz pleaded guilty to
importation of cocaine and heroin, in violation of 21 U.S.C.
§§ 952 and 960. He appeals the district court’s denial of a
minor-role reduction for his sentence pursuant to United
States Sentencing Guideline (“U.S.S.G.”) § 3B1.2(b), arguing
that the district court erred by refusing to consider all likely
participants in the subject drug trafficking organization, erred
by not sufficiently considering the factors articulated by
Amendment 794 to the Sentencing Guideline, and abused its
discretion when balancing the factors. We have jurisdiction
under 28 U.S.C. § 1291, and we vacate and remand for re-
sentencing.

                    II. BACKGROUND

    Alejandro Aguilar Diaz, a 28-year-old legal resident of
Tijuana, Mexico, was arrested on August 27, 2015, when
crossing into the United States and charged with the
importation of 10.68 kilograms of cocaine and 3.6 kilograms
of heroin. On October 22, 2015, Aguilar Diaz agreed to plead
guilty to two counts of drug importation in exchange for a
favorable sentencing recommendation from the government.

    After his arrest, Aguilar Diaz told authorities that he had
agreed to transport drugs, which he believed to be marijuana,
to an unknown location in the United States. He explained
that he was at a party with a friend, Hector Rodriguez, when
they were approached by an individual named Peter and
              UNITED STATES V. AGUILAR DIAZ                    5

asked if they would be willing to smuggle drugs across the
border because they both had border-crossing cards. They
agreed, and Aguilar Diaz accompanied Rodriguez on two
crossings. The first was a practice run; Aguilar Diaz and
Rodriguez drove separate cars and neither car carried drugs.
The purpose of the first trip was for Aguilar Diaz to show
Rodriguez how to cross the border in a vehicle. Only
Rodriguez attempted to smuggle drugs into the United States
on the second crossing but, because Rodriguez was nervous,
Aguilar Diaz agreed to go along in a separate car in exchange
for $200. Rodriguez was arrested on the second crossing.
When Aguilar Diaz reported Rodriguez’s arrest to Peter,
Peter told him that he owed a debt for the confiscated drugs
and that he would be paid only $1,000 for making an
additional smuggling trip, instead of the $2,000 originally
promised. Aguilar Diaz then allowed Peter to hide drugs in
his car, tried to cross the border a third time, and he, too, was
arrested. Eventually, Aguilar Diaz pleaded guilty to two
counts of drug importation in exchange for the government’s
favorable sentencing recommendation. The pre-sentence
report acknowledged that Aguilar Diaz cooperated after his
arrest and during the subsequent investigation, and did not
challenge his statement that he had only been involved in two
prior crossings. It was undisputed that Aguilar Diaz has no
prior criminal history.

    In preparation for sentencing, Aguilar Diaz submitted a
memorandum to the district court detailing his arguments in
support of a minor-role adjustment pursuant to the § 3B1.2(b)
Guideline. The memorandum argued that drug couriers play
minor roles in drug trafficking organizations and addressed
five factors the Sentencing Commission articulated when it
6             UNITED STATES V. AGUILAR DIAZ

clarified § 3B1.2 with Amendment 794.1 Aguilar Diaz
argued that all five of the recently enumerated factors
weighed in favor of granting a minor-role adjustment in his
case. The government disagreed and filed a sentencing
summary chart that did not include a recommendation for a
minor-role adjustment.

    At Aguilar Diaz’s sentencing hearing, the district court
heard extensive argument from both parties about whether to
grant the minor-role adjustment. The government cited
Aguilar Diaz’s involvement in multiple border crossings (the
two crossings with Rodriguez and the crossing leading to
Aguilar Diaz’s arrest) to support its position that he should be
considered a trusted courier, and urged the court to conclude
that Aguilar Diaz was not eligible for the adjustment because
he had not met his burden of demonstrating that he was
substantially less culpable than the average participant. The
defense argued the court should consider other “unknown”
individuals who “have to exist in order for a drug trafficking
organization to function,” when deciding whether Aguilar
Diaz had a minor role in the criminal enterprise. The district
court responded that Ninth Circuit precedent precluded
consideration of “hypothetical or unknown participants,” and
ruled that Rodriguez and Peter were the only other
participants for comparison purposes.

     In support of his contention that the Amendment 794
factors weighed in his favor, Aguilar Diaz argued: (1) the
$1,000 he stood to receive for transporting the drugs was very
little in comparison to the street value of the drugs
($270,000); (2) this was the first time he actually tried to

    1
        Amendment 794 to § 3B1.2 became effective on November 1,
2015.
             UNITED STATES V. AGUILAR DIAZ                   7

smuggle drugs; (3) he had limited knowledge of other
participants in the criminal enterprise; and (4) his mistaken
understanding about the type and quantity of the drugs he was
carrying demonstrated that he knew very little about the
scope and structure of the smuggling operation. For its part,
the government argued that because Aguilar Diaz had
experience crossing the border and Rodriguez did not, his
presence and familiarity with the process encouraged and
facilitated Rodriguez’s smuggling trip. The government
further argued that Aguilar Diaz was not substantially less
culpable than the average participant because he assumed
multiple roles by acting as a scout for Rodriguez’s
unsuccessful attempt and as a courier himself. The
government pointed out that Aguilar Diaz was the driver and
registered owner of the vehicle he used, that he attempted to
traffic a large and valuable quantity of drugs, and that he
agreed to accept money in exchange for the crossing. The
district court adopted the government’s argument with little
elaboration and denied the minor-role adjustment. Aguilar
Diaz was sentenced to serve 46 months in prison.

              III. STANDARDS OF REVIEW

    “[W]e review the district court’s identification of the
correct legal standard de novo and the district court’s factual
findings for clear error.” United States v. Gasca-Ruiz, 852
F.3d 1167, 1170 (9th Cir.) (en banc), cert. denied, 1385 S. Ct.
229 (2017). “[A] district court’s application of the
Sentencing Guidelines to the facts of a given case should be
reviewed for abuse of discretion.” Id.
8               UNITED STATES V. AGUILAR DIAZ

                           IV. ANALYSIS

    Section 3B1.2(b) of the United States Sentencing
Guidelines provides for a two-level reduction in a defendant’s
sentence “[i]f the defendant was a minor participant in any
criminal activity.”2 “‘The defendant bears the burden of
proving that he [or she] is entitled to a downward adjustment
based on his [or her] role in the offense.’” United States v.
Cantrell, 433 F.3d 1269, 1282 (9th Cir. 2006) (alteration in
original) (quoting United States v. Awad, 371 F.3d 583, 591
(9th Cir. 2004)). We have long held that in determining
whether to grant a minor-role reduction, the correct inquiry is
whether the defendant was “‘substantially less culpable than
the average participant’” in the charged criminal activity.
United States v. Rodriguez-Castro, 641 F.3d 1189, 1193 (9th
Cir. 2011) (quoting U.S.S.G. § 3B1.2 cmt. n.3(A)). It is also
well established that a district court need not tick off
sentencing factors to show that it considered them, see United
States v. Carty, 520 F.3d 984, 992 (9th Cir. 2008) (en banc),
because “[w]e assume that the district court knows and
applies the law correctly,” United States v. Cervantes-
Valenzuela, 931 F.2d 27, 29 (9th Cir. 1991) (per curiam). See
also United States v. Diaz-Argueta, 564 F.3d 1047, 1052 (9th
Cir. 2009).

   Prior to Amendment 794, a circuit split developed
concerning the proper interpretation of “the average


    2
        The Guideline provides: “[b]ased on the defendant’s role in the
offense, decrease the offense level as follows: (a) If the defendant was a
minimal participant in any criminal activity, decrease by 4 levels. (b) If
the defendant was a minor participant in any criminal activity, decrease by
2 levels. In cases falling between (a) and (b), decrease by 3 levels.”
U.S.S.G. § 3B1.2.
               UNITED STATES V. AGUILAR DIAZ                          9

participant” in the context of the minor-role sentencing
Guideline. U.S.S.G. App. C. Amend. 794.3 The First and
Second Circuits allowed defendants to compare their
culpability to that of their co-participants and to other persons
participating in similar crimes—hypothetical typical
offenders. See id. In our circuit and in the Seventh Circuit,
the appropriate comparison was between the defendant and
other participants in the same criminal scheme. See id.
Amendment 794 resolved the circuit split in favor of the latter
approach when it became effective on November 1, 2015.
U.S.S.G. App. C. Amend. 794.

    Amendment 794 also enumerated a list of factors for
courts to consider when deciding whether to grant a minor-
role adjustment:

         In determining whether to apply subsection
         (a) or (b), or an intermediate adjustment, the
         court should consider the following non-
         exhaustive list of factors: (i) the degree to
         which the defendant understood the scope and
         structure of the criminal activity; (ii) the
         degree to which the defendant participated in
         planning or organizing the criminal activity;
         (iii) the degree to which the defendant
         exercised decision-making authority or
         influenced the exercise of decision-making
         authority; (iv) the nature and extent of the
         defendant’s participation in the commission of


    3
        Compare United States v. Santos, 357 F.3d 136, 142 (1st Cir.
2004), and United States v. Rahman, 189 F.3d 88, 159 (2d Cir. 1999) (per
curiam), with Cantrell, 433 F.3d at 1283 (9th Cir. 2006), and United
States v. DePriest, 6 F.3d 1201, 1214 (7th Cir. 1993).
10              UNITED STATES V. AGUILAR DIAZ

         the criminal activity, including the acts the
         defendant performed and the responsibility
         and discretion the defendant had in
         performing those acts; (v) the degree to which
         the defendant stood to benefit from the
         criminal activity.

U.S.S.G. § 3B1.2 cmt. n.3(C). In stating its purpose for the
Amendment, the Sentencing Commission explained that
minor-role adjustments had been “applied inconsistently and
more sparingly than the Commission intended,” and that it
intended to address caselaw that might discourage courts
from applying minor-role adjustments.4 U.S.S.G. App. C.
Amend. 794. We have since observed that, as clarified,
§ 3B1.2 provides “‘a defendant who does not have a
proprietary interest in the criminal activity and who is simply
being paid to perform certain tasks should be considered’ for
the reduction, and ‘the fact that a defendant performs an
essential or indispensable role in the criminal activity is not
determinative’” of whether a minor-role adjustment should be
granted. United States v. Quintero-Leyva, 823 F.3d 519, 523
(9th Cir. 2016) (brackets omitted) (quoting U.S.S.G. § 3B1.2
cmt. n.3(C)).

    Quintero-Leyva reviewed a challenge to a sentence
imposed before Amendment 794’s effective date and
addressed whether the factors identified in Amendment 794
should be given retroactive effect. There, the defendant
pleaded guilty to importation of methamphetamine and
sought a minor-role adjustment because he allegedly had


     4
       “This amendment . . . addresses a circuit conflict and other caselaw
that may be discouraging courts from applying the adjustment in otherwise
appropriate circumstances.” U.S.S.G. App. C. Amend. 794.
             UNITED STATES V. AGUILAR DIAZ                   11

limited knowledge of what he was transporting and no prior
history of trafficking drugs across the border. Id. at 521. We
held that because Amendment 794 was meant to clarify an
existing Guideline, it applied retroactively to cases on direct
appeal. Id. at 523. Further, we recognized that Amendment
794 settled the circuit split regarding which participants could
be considered for comparison purposes and established that
a defendant’s conduct should be assessed against that of other
participants in his or her own criminal scheme, rather than
being compared to that of the hypothetical average participant
in similar criminal activity. Id. We remanded Quintero-
Leyva’s case to the district court for re-sentencing because it
was unclear whether the sentencing court had considered the
factors identified by Amendment 794. See id. at 523–24.

    In the wake of Amendment 794 and Quintero-Leyva, if
the denial of a minor-role adjustment is challenged and the
defendant’s sentencing occurred after the Amendment’s
effective date—as is the case here—our caselaw requires that
we assume the district judge knew the law and understood his
or her obligation to consider all of the sentencing factors, and
we invoke the well-established presumption that the district
court need not recite each sentencing factor to show it has
considered them. See Carty, 520 F.3d at 992. But in
deciding these post-Amendment appeals, we also recognize
the Sentencing Commission’s statement that minor-role
adjustments were being applied more sparingly than the
Commission intended and its admonition that, in Amendment
794, the Commission did more than merely adopt the Ninth
Circuit’s side of the previous circuit split concerning
consideration of hypothetical average participants. Going
forward, the assessment of a defendant’s eligibility for a
minor-role adjustment must include consideration of the
factors identified by the Amendment, not merely the
12            UNITED STATES V. AGUILAR DIAZ

benchmarks established by our caselaw that pre-dates
Amendment 794’s effective date.

    Turning to this appeal, Aguilar Diaz argues that the
district court erred because it did not consider or mention the
five factors listed in § 3B1.2 cmt. n.3(C), and failed to
mention other factors it did consider when it concluded that
Aguilar Diaz did not qualify for a minor-role adjustment. But
the district court was not obligated to tick off the factors on
the record to show that it considered them, see Carty, 520
F.3d at 992, and we have no trouble determining from the
sentencing memoranda and the transcript of the sentencing
hearing that the district court was well aware of the factors
added by Amendment 794. The factors were thoroughly
enumerated in the defendant’s sentencing memorandum, and
defense counsel pressed its points in argument to the court.

    Next, Aguilar Diaz argues that the district court erred by
refusing to consider all likely participants in the drug
smuggling operation in which he was involved because the
court considered only Rodriguez and Peter. In United States
v. Rojas-Millan we held that, when measuring a defendant’s
culpability relative to that of other participants, district courts
must compare the defendant’s involvement to that of all
likely participants in the criminal scheme for whom there is
sufficient evidence of their existence and participation. 234
F.3d 464, 473 (9th Cir. 2000). The question implied by
Aguilar Diaz’s appeal is whether this pre-existing caselaw is
inconsistent with the guidance provided by Amendment 794.
We conclude that it is not. Although Amendment 794 does
not alter defendant’s burden to show that the nature of his
participation rendered him substantially less culpable than
other participants, the Amendment recognizes that a true
minor-role participant need not be privy to every detail about
             UNITED STATES V. AGUILAR DIAZ                   13

the roles played by others in the scheme. This is evident from
one of the factors added by Amendment 794: “the degree to
which the defendant understood the scope and structure of the
criminal activity.” U.S.S.G. § 3B1.2 cmt. n.3(C). The
Amendment recognizes the likelihood that a true minor
participant may be unable to identify other participants with
specificity. This is consistent with our pre-existing caselaw.

     Prior to Amendment 794, Rojas-Millan acknowledged
that a defendant seeking a minor-role reduction need not
identify other participants precisely. Rojas-Millan held the
district court should have considered other actors who were
identified only by location and role—the Los Angeles
supplier and Reno distributor. 234 F.3d at 473–74. Our
caselaw has never required a defendant to identify other
participants by name; doing so is only one way a defendant
can establish the existence of other participants in a criminal
scheme. See id. Identifying the locations of other individuals
and the roles they actually served may be sufficient for the
defendant to meet his burden. We conclude that Amendment
794 did not change the size of the appropriate comparison
group—it remains impermissible to compare a defendant’s
conduct to that of the hypothetical average participant—but
Amendment 794 makes clear that when a defendant knows
little about the scope and structure of the criminal enterprise
in which he was involved, that fact weighs in favor of
granting a minor-role adjustment.

    Separately, Aguilar Diaz argues that he did demonstrate
the likely existence and participation of others, because of the
value of the drugs, the likelihood that someone supplied the
drugs to Peter and helped him load and conceal the drugs in
Aguilar Diaz’s car, and because someone must have existed
in the United States to accept delivery. The district court
14           UNITED STATES V. AGUILAR DIAZ

considered this evidence, but it was not persuaded that
Aguilar Diaz had done more than speculate that other
participants must have existed. The district court went on to
conclude that even in comparison to the people who “create
the drugs, who cut the drugs, who load the drugs, who then
unload the drugs, who sell the drugs on the streets, who . . .
generate the money and send the money back to Mexico,”
Aguilar Diaz’s role of scouting and acting as a courier to
smuggle a large amount of drugs across the border was not
minor. To the extent the district court’s reasoning reflects
reliance on courier conduct as dispositive of Aguilar Diaz’s
eligibility for a minor-role reduction, it was error.
Amendment 794 clarified that the performance of an essential
role—here, the role of smuggling drugs across the border—is
not dispositive. See Quintero-Leyva, 823 F.3d at 523.

    Finally, Aguilar Diaz argues that the district court abused
its discretion because, collectively, the factors weigh in his
favor. We agree that several of the Amendment 794 factors
do weigh in Aguilar Diaz’s favor. See U.S.S.G. § 3B1.2 cmt.
n. 3(C). For example, it is not contested that he did not know
the type or quantity of the drugs hidden in his vehicle,
suggesting he did not play a significant role in planning or
organizing. That Aguilar Diaz only knew two other
participants limits the size of the comparison group, but it
also cuts in his favor because it tends to show that he had
minimal knowledge regarding the scope and structure of the
criminal operation. It is also undisputed that Aguilar Diaz
was to receive a set fee of $1,000 and had no ownership
interest or other stake in the outcome of the trafficking
operation. Accordingly, he is among the offenders the
Sentencing Commission described as not having a
“proprietary interest in the criminal activity and who is
simply being paid to perform certain tasks.” Quintero-Leyva,
             UNITED STATES V. AGUILAR DIAZ                15

823 F.3d at 523 (emphasis added). This factor also weighs in
favor of granting the adjustment.

    Although the district court has considerable latitude in
ruling on minor-role adjustments, see id., on this record we
must remand for re-sentencing because the decision to deny
the adjustment rested on incorrect interpretations of the
§ 3B1.2 Guideline and Amendment 794. The difficulty is
that the district court adopted the government’s argument
with little elaboration, and the government’s argument
included an incorrect interpretation of § 3B1.2 and
Amendment 794. First, the government relied on the fact that
Aguilar Diaz agreed to accept money in exchange for
transporting drugs, but ignored that his compensation was
relatively modest and fixed. There was no evidence that
Aguilar Diaz had a proprietary interest in the outcome of the
operation or otherwise stood to benefit more than minimally.
Second, though the government correctly identified Peter and
Rodriguez as the comparison group, it did not account for
Aguilar Diaz’s limited understanding of the overall “scope
and structure of the criminal operation.”

   Because we cannot determine whether the district court
would have granted a minor-role adjustment had these factors
been properly applied, we vacate Aguilar Diaz’s sentence and
remand for re-sentencing.

   VACATED AND REMANDED.
