New Third Circuit Court of Appeals Decision – Federal Sentencing Guidelines

Bold Third Circuit Court Ruling on Federal Sentencing Guidelines

On February 5, 2025, the United States Court of Appeals for the Third Circuit decided United States v. Milchin, which affirmed the District Court’s denial of a sentence reduction pursuant to 18 U.S.C. § 3582(c)(2) based on Federal Sentencing Guidelines U.S.S.G. § 4C1.1 for a defendant who had received an aggravating role adjustment under U.S.S.G. § 3B1.1.

Federal Sentencing Guidelines and the Case Background

In 2018 the defendant Michael Milchin pled guilty to multiple criminal charges, including healthcare fraud, conspiracy to commit healthcare fraud, conspiracy to distribute oxycodone, and possession of oxycodone with intent to distribute. He was sentenced to 168 months of imprisonment and three years of supervised release.

Sentence Reduction Appeal Under Federal Sentencing Guidelines

Milchin moved for a sentence reduction under 18 U.S.C. § 3582(c)(2), based on the retroactive application of the Federal Sentencing Guidelines U.S.S.G. § 4C1.1. This new guideline, which became effective on November 1, 2023, allows for an offense-level reduction for certain offenders with zero criminal history points at the time of sentencing. Initially, on November 13, 2023, the District Court ruled that Milchin was not eligible for relief but dismissed his motion without prejudice due to a general stay on motions seeking retroactive application of § 4C1.1.

After Milchin requested the appointment of counsel, the District Court denied that request on March 1, 2024, reaffirming that he did not qualify for a sentence reduction. Milchin filed an emergency motion for reconsideration on March 4, 2024, which was also denied. He then appealed.

Third Circuit Court’s Review of Federal Sentencing Guidelines Eligibility

On appeal, the Third Circuit reviewed de novo whether Milchin was eligible for a reduced sentence under a retroactive guideline amendment. Under 18 U.S.C. § 3582(c)(2), a defendant may seek a reduction if they were sentenced based on a sentencing range that was subsequently lowered. The central issue was whether the amendment to U.S.S.G. § 4C1.1 lowered the sentencing range applicable to Milchin.

Why the Federal Sentencing Guidelines Did Not Apply

The court found that the eligibility criteria under Federal Sentencing Guidelines U.S.S.G. § 4C1.1 excludes defendants who, among other disqualifiers, either: (1) received an aggravating role adjustment under U.S.S.G. § 3B1.1; or (2) were engaged in a continuing criminal enterprise as defined in 21 U.S.C. § 848. Milchin had received an aggravating role adjustment, athough he was not engaged in a continuing criminal enterprise. He argued that the disqualification should apply only to defendants who met both conditions, rather than either one.

Third Circuit Applies Supreme Court Precedent to Federal Sentencing Guidelines

The Third Circuit rejected this argument, holding that the exclusion applies to a defendant who meets either condition. The court relied heavily on the Supreme Court’s decision in Pulsifer v. United States, 601 U.S. 124 (2024), which addressed a similarly structured sentencing provision.

In Pulsifer, the Supreme Court held that a provision stating that a defendant was ineligible for relief if they had (A) more than 4 criminal history points, (B) a prior 3-point offense, and (C) a prior 2-point violent offense, should be read disjunctively—meaning that satisfying any of the three conditions disqualified a defendant. Applying the same principle to Milchin, the Third Circuit concluded that the “and” in Federal Sentencing Guidelines U.S.S.G. § 4C1.1(a)(10) operates disjunctively, making a defendant ineligible if they either received an aggravating role adjustment or were engaged in a continuing criminal enterprise.

Key Takeaways from This Federal Sentencing Guidelines Decision

The Third Circuit affirmed the District Court’s decision, reinforcing that Federal Sentencing Guidelines U.S.S.G. § 4C1.1 does not apply to defendants who received an aggravating role adjustment, regardless of whether they were also engaged in a continuing criminal enterprise. This decision clarifies the interpretation of U.S.S.G.  § 4C1.1 and establishes a precedent in the Third Circuit that will affect future sentence reduction motions under this guideline.

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