United States v. Hyatt

28 F.4th 776

UNITED STATES of America, Plaintiff-Appellee,

v.Kenneth R. HYATT, Defendant-Appellant.

No. 21-1212

United States Court of Appeals, Seventh Circuit.

Argued January 25, 2022

Decided March 14, 2022

Nathaniel Whalen, Attorney, Office of the United States Attorney, Hammond, IN, for Plaintiff-Appellee.

Johanna M. Christiansen, Thomas W. Patton, Attorneys, Office of the Federal Public Defender, Peoria, IL, for Defendant-Appellant.

Before Ripple, Wood, and Jackson-Akiwumi, Circuit Judges.

Wood, Circuit Judge.

Kenneth Hyatt was charged with several child-pornography offenses—transportation, 18 U.S.C. § 2252(a)(1) ; receipt, id. § 2252(a)(2) ; and possession, id. § 2252(a)(4)(B). He pleaded guilty to the receipt offense. The question before us in this appeal is whether the district court plainly erred when it applied a two-level enhancement under U.S.S.G. § 2G2.2(b)(3)(F) for distribution of child pornography, based solely on the fact that he uploaded images to a folder in his Dropbox account yet took no steps to allow any other person to obtain access to that folder. We conclude that such error occurred, and that Hyatt is entitled to resentencing. We therefore vacate the sentence and remand for further proceedings.

I

We can be brief with the underlying facts. In 2019, law enforcement officers received a tip from Dropbox, a well-known cloud-storage host, that someone had uploaded child pornography to it. (Dropbox first informed the National Center for Missing and Exploited Children of the suspected upload.) The officers tracked the IP address to Hyatt's home, where they found him. He admitted that he had uploaded the files.

Hyatt was charged with transporting, receiving, and possessing child pornography. Initially, he agreed to plead guilty to the transportation charge in exchange for a below-guideline sentence of 180 months. The district court rejected that plea agreement, however, and so Hyatt returned with a plea of guilty—unaccompanied by any agreement with the prosecutor—to the receiving offense. That time, the court did accept the plea and set the case for sentencing.

The Presentence Investigation Report (PSR) determined that he had a total offense level of 34, using U.S.S.G. § 2G2.2. It reached that determination as follows:

• Base offense (2G2.2(a)(2))	22
• Pre-pubescent minors (2G2.2(b)(2))	+2
• Knowing distribution (2G2.2(b)(3)(F))	+2
• Sadistic, masochistic (2G2.2(b)(4)(A))	+4
• Use of computer (2G2.2(b)(6))	+2
• 600 or more images (2G2.2(b)(7)(D))	+5
• Acceptance of responsibility (3E1.1(b))	-3

The only explanation the report writer provided for the distribution enhancement was that Hyatt "uploaded 65 files of child pornography on Dropbox." Hyatt had 22 criminal history points, far more than was needed to place him in Criminal History Category VI. This led to an advisory guideline range of 262 to 327 months' imprisonment.

Hyatt did not object to any of these calculations, either in the sentencing memorandum he filed or at the hearing. Instead, he pressed for a below-guideline sentence of 180 months. In so doing, he argued that the court should disregard four of the enhancements: those for sadistic behavior; prepubescent children; using a computer; and 600 or more images. He did not mention the two-level distribution enhancement, despite the fact that the PSR did not explain what evidence, other than Hyatt's upload to Dropbox, supported it. With respect to the four adjustments on which he did focus, his argument was that while they may have been "technically correct" under the Guidelines, they added nothing because they apply to almost everyone charged with child-pornography offenses. He further contended that these enhancements lacked empirical support and that both the Sentencing Commission and the courts have questioned their utility. He concluded that the court, using its authority under 18 U.S.C. § 3553(a), should sentence him as if they did not apply.

The district court was not persuaded by these arguments, and so it sentenced Hyatt to 293 months' imprisonment, a point in the middle of his guideline range. Before announcing the sentence, the court repeated that the distribution enhancement was based on Hyatt's "uploading 65 images to Dropbox, which is a file-sharing platform." Hyatt then confirmed again that he "ha[d] no objection to the positions taken in the report" and that the court had "calculated the guideline range correctly." In explaining its sentence, the court noted that it had not "been told in this case whether the uploaded materials to Dropbox could be accessed by others. Though, in this era of cloud-based storage, that risk certainly remains." The court also observed that the distribution and computer-usage enhancements partially overlapped because they were based on the same conduct—Hyatt's uploading of images to Dropbox, from whence they could be "disseminated at the push of a button." A one-level reduction to reflect the overlap, it noted, would yield an alternative range of 253 to 293 months. The court concluded that a sentence at the top of that range would properly account for the seriousness of Hyatt's behavior and his extensive criminal history.

II

On appeal, Hyatt argues for the first time that it was error for the court to apply the enhancement provided by U.S.S.G. § 2G2.2(b)(3)(F) for distribution. He makes two key points: first, that the simple act of uploading the files to Dropbox does not meet the Guidelines' definition of distribution, any more than one would "distribute" an item to a safe or a locked file cabinet, at least until someone else obtained access to the safe and removed the item; and second, that the risk of distribution falls short of actual distribution, and the court found only the former.

Before we delve into those arguments, we must decide whether Hyatt's failure to raise them in the district court amounted to waiver, or merely forfeiture. If he waived them, then they are not properly before us; if he forfeited them, we may assess them using the plain-error standard of review. See, e.g., United States v. Dridi , 952 F.3d 893, 898 (7th Cir. 2020).

Waiver occurs when a party intentionally relinquishes a known right; forfeiture, in contrast, occurs as a result of a negligent failure timely to assert a right. United States v. Olano , 507 U.S. 725, 733, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993) (cleaned up); United States v. Robinson , 964 F.3d 632, 643 (7th Cir. 2020). In order to assess which of those two concepts applies to a given case, we must take all the circumstances into account. One factor that points toward waiver is the existence of "sound strategic reasons" why a defendant might choose to forego an argument in the district court. Dridi , 952 F.3d at 898, citing United States v. Jaimes-Jaimes , 406 F.3d 845, 847–49 (7th Cir. 2005). Conversely, "we have found forfeiture when the government cannot proffer a plausible strategic justification for a decision not to object." Dridi , 952 F.3d at 898.

A mere failure to object to part of a PSR is not enough to support a finding of waiver. United States v. Hammond , 996 F.3d 374, 399 (7th Cir. 2021). Even when a defendant repeatedly states that he has no objections to the PSR, as Hyatt did, those statements are not dispositive. Jaimes-Jaimes , 406 F.3d at 848. We reaffirmed in Hammond that "the waiver principle is construed liberally in favor of the defendant." 996 F.3d at 399.

Hyatt contends that this record does not support a finding of waiver, in part because he did not raise any objections to the PSR's calculation of the guideline range, choosing instead to rely on Section 3553(a). That is correct: he did not challenge the factual basis of any of the enhancements we noted earlier, even though he did argue that the policy underlying four of them was flawed and so they should be disregarded in sentencing. Adding that to the fact that it was not until the court issued its sentence that anyone seriously focused on the accessibility of materials in Hyatt's Dropbox account, we conclude that this record does not support a finding of intentional abandonment of the distribution argument. It was forfeited, however, and so we now turn to the question whether the record demonstrates plain error.

The Supreme Court has explained that plain-error review involves four steps:

First, there must be an error or defect—some sort of deviation from a legal rule—that has not been intentionally relinquished or abandoned, i.e. , affirmatively waived, by the appellant.... Second, the legal error must be clear or obvious, rather than subject to reasonable dispute.... Third, the error must have affected the appellant's substantial rights, which in the ordinary case means he must demonstrate that it affected the outcome of the district court proceedings.... Fourth and finally, if the above three prongs are satisfied, the court of appeals has the discretion to remedy the error—discretion which ought to be exercised only if the error seriously affect[s] the fairness, integrity or public reputation of judicial proceedings.

Puckett v. United States , 556 U.S. 129, 135, 129 S.Ct. 1423, 173 L.Ed.2d 266 (2009). We now examine each of these steps.

We already have addressed the first criterion—whether there was some "error or defect" that was not waived. The alleged error is the application of the enhancement under U.S.S.G. § 2G2.2(b)(3)(F) for distribution, as applied to a situation where the defendant did no more than store those materials in an inaccessible cloud folder. As just explained, Hyatt forfeited this point; he did not "affirmatively waive" it. The third criterion—effect on substantial rights—is also satisfied. With the two-point enhancement, Hyatt's advisory range was 262 to 327 months; without it, the range would have been 210 to 262 (possibly lower, if the district court on remand were to accept his argument that he is also entitled to the two-level reduction provided by U.S.S.G. § 2G2.2(b)(1) —a contention on which we do not comment). The...