PIA-Based “Legal Impossibility” Requires Supporting Facts; Intended Loss (Post-Amendment 827) Includes Impossible or Unlikely Harm in Trade-Secret Conspiracies

Case: United States v. Juan Martinez (11th Cir. Jan. 23, 2026) (not for publication)

Charges: Conspiracy to steal trade secrets, 18 U.S.C. § 1832(a)(5)

Key Holdings: (1) A district court may bar “legal impossibility” as a closing-argument theory when the record does not support it; (2) under United States v. Horn and Amendment 827, “loss” under U.S.S.G. § 2B1.1(b)(1) is the greater of actual or intended loss; (3) intended loss may be estimated using reliable evidence of foreseeable competitive harm, even if the harm was “impossible or unlikely to occur.”

I. Introduction

This appeal arose from a trade-secret theft conspiracy tied to a start-up’s effort to commercialize anti-icing technology for aircraft wings. Juan Martinez, working with APAC Airplane Design Consulting, LLC (“APAC”), received Gulfstream Aerospace Corporation (“Gulfstream”) proprietary documents through a Gulfstream contractor, Gilbert Basaldua, who covertly routed the materials through personal email accounts and disguised transmissions (e.g., labeling emails “Time Card”).

The defense pivoted on a Proprietary Information Agreement (“PIA”) previously executed between Gulfstream and APAC. Martinez argued that the PIA authorized use of Gulfstream information to develop a wind-tunnel test plan for FAA-related work, making the charged conspiracy “legally impossible.” The district court prohibited counsel from presenting that “legal impossibility” theory as a dispositive closing argument, while allowing counsel to argue a more conventional factual theory: Martinez believed the PIA authorized the access.

On sentencing, the dispute focused on U.S.S.G. § 2B1.1(b)(1): whether “loss” could be based on intended loss, and whether the intended loss figure—derived from expected lost profits from reduced aircraft sales—was supported by sufficient evidence.

II. Summary of the Opinion

The Eleventh Circuit affirmed both conviction and sentence.

Closing argument / “legal impossibility”: The panel held the district court acted within its authority in precluding a closing-argument theory of legal impossibility because the record did not support that the PIA authorized the disclosures or the uses at issue. Martinez was unaware of the PIA; disclosures to him therefore could not satisfy the PIA’s requirement that recipients be “bound by and have been made aware of” the restrictions. Additionally, APAC’s intended uses extended beyond the PIA’s “Permitted Purpose,” and Basaldua was not an authorized Gulfstream discloser under Section 15.
Intended loss: Relying on Amendment 827 and United States v. Horn, the court held intended loss is properly considered because “loss” equals the greater of actual or intended loss.
Evidentiary basis for loss estimate: The district court’s estimate—foreseeable lost profit on at least one aircraft sale, based on expert testimony about competitive impact and margins—was a reasonable, non-speculative estimate grounded in record evidence and thus not clear error.

III. Analysis

A. Precedents Cited

1) Controlling framework for limiting summation

United States v. Harris, 916 F.3d 948 (11th Cir. 2019): Provided the standard of review (“abuse of discretion”) and the principle that limits on closing argument are permissible so long as the defendant can make all “legally tenable arguments” supported by the facts. The Martinez panel invoked Harris both to justify the district court’s gatekeeping role and to emphasize that closing argument may be constrained when it risks drifting beyond legally supported theories.
United States v. Gaines, 690 F.2d 849 (11th Cir. 1982): Quoted (via Harris) for the proposition that limits on summation are generally upheld absent abuse of discretion if the defendant can still present legally tenable, fact-supported arguments.
Herring v. New York, 422 U.S. 853 (1975): Cited (via Harris) for the court’s authority to ensure argument does not “stray unduly” or impede orderly trial conduct—supporting the legitimacy of confining counsel to defensible theories.
United States v. Mitrovic, 890 F.3d 1217 (11th Cir. 2018): Cited for the proposition that constitutional questions embedded in closing-argument limitations are reviewed de novo, even as the restriction itself is reviewed for abuse of discretion.

2) Threshold evidentiary showing to present a defense theory

United States v. Bailey, 444 U.S. 394 (1980): Used to support the “threshold showing” principle—trial courts need not permit a defense to be argued to the jury absent evidence that could satisfy the elements of that defense.
United States v. Middleton, 690 F.2d 820 (11th Cir. 1982): Reinforced that the judge decides whether the facts, if believed, are legally sufficient to render the accused innocent under the proffered defense framework. This underwrote the decision to treat Martinez’s “legal impossibility” closing as legally unsupported on the record.

3) “Legal impossibility” in conspiracy

Johnson v. United States, 158 F. 69 (5th Cir. 1907): Recognized that legal impossibility can defeat a conspiracy charge in unusual settings (there, concealing assets “from his trustee” where the trustee was the defendant himself). Martinez relied on this concept; the panel acknowledged the doctrine but confined it to situations where the facts genuinely make the charged object non-criminal even if completed.
Wayne R. LaFave, Criminal Law § 12.4, 687 (5th ed. 2010): Cited for the idea that “pure legal impossibility” may negate mens rea in some conspiracy contexts. The court’s analysis implicitly treated the PIA theory as incapable of negating mens rea because Martinez neither knew of the PIA nor fit within its authorization structure.

4) Sentencing: interpretation of “loss” and proof of the loss figure

United States v. Cingari, 952 F.3d 1301 (11th Cir. 2020): Provided de novo review standard for Guidelines interpretation and application.
United States v. Moss, 34 F.4th 1176 (11th Cir. 2022): Supplied the clear-error standard for loss determinations and the requirements that estimates be “reasonable” and grounded in “reliable and specific” facts rather than speculation.
United States v. Bazantes, 978 F.3d 1227 (11th Cir. 2020): Quoted (via Moss) on clear-error review for loss calculations.
United States v. Moran, 778 F.3d 942 (11th Cir. 2015): Quoted (via Moss) for the prohibition on speculating about facts that would yield a higher sentence and the need for findings based on trial evidence, undisputed PSI facts, or sentencing evidence.
United States v. Horn, 129 F.4th 1275 (11th Cir. 2025): The pivotal authority on Amendment 827. The panel treated Horn as settling that Amendment 827 is “clarifying” and applies on direct appeal; thus “loss” unambiguously includes intended loss as the greater of actual or intended loss.

B. Legal Reasoning

1) Why the “legal impossibility” closing argument was properly barred

Martinez sought to transform the PIA into a categorical legal bar: if APAC was authorized under the PIA to access/use Gulfstream materials, then the conspiracy’s object would not be criminal, making conviction “legally impossible.” The panel’s reasoning rejected that premise through three record-driven steps:

PIA authorization depended on recipient awareness and binding restrictions: Section 4A allowed disclosure only to individuals “bound by and have been made aware of the restrictions.” The panel treated Martinez’s lack of awareness of the PIA as fatal to any claim that the agreement authorized disclosure to him. This simultaneously undermined (i) “authorization” and (ii) the contention that the PIA could negate his mens rea.
Uses exceeded the “Permitted Purpose”: Section 1 limited use to exchanging technical information and proposals for “potential use on the G650 aircraft.” The record supported that APAC sought FAA-certified proof of concept to market to competitors after Gulfstream ended consideration. The panel emphasized Martinez knowingly left trade secret information in the FAA submission months after Gulfstream had ended its evaluation—placing the conduct outside the PIA’s permitted scope.
Disclosure route violated the PIA’s designated disclosure mechanism: Section 15 identified Meghan Wright as the only Gulfstream point of contact authorized to disclose proprietary information to APAC. Basaldua—sending documents from Gulfstream to personal email and onward to Martinez, while warning “guard this, my job depends on it”—was not acting under the PIA’s disclosure authority. Thus, even if the PIA existed, it did not sanitize this channel of transmission.

In effect, the court treated “legal impossibility” not as an abstract label but as a defense that must be tethered to facts that, if believed, would make the alleged agreement non-criminal. Because the PIA did not actually authorize this defendant’s receipt and use—on this record—the district court could confine closing argument to fact-supported themes (e.g., belief, intent, authorization as a factual matter) rather than a misfitting “if PIA then acquit” legal directive.

2) Why intended loss governed and how the amount was supported

Two doctrinal moves controlled sentencing:

Interpretive move (what “loss” means): Though the district court initially viewed § 2B1.1(b)(1) as ambiguous and relied on commentary, the Eleventh Circuit resolved the issue through Amendment 827 and United States v. Horn: “loss” is the greater of actual loss or intended loss, and Amendment 827 is clarifying (thus applicable on direct appeal).
Evidentiary move (how to estimate intended loss): Applying United States v. Moss/United States v. Moran, the panel held the intended-loss estimate was reasonable and non-speculative because it was anchored in (i) Martinez’s own trial admissions about the plan to market to competitors and (ii) expert testimony quantifying the foreseeable competitive effect and profit margins.

The panel also addressed Martinez’s “chain of assumptions” critique by pointing to then-operative guideline commentary that intended loss “includes intended pecuniary harm that would have been impossible or unlikely to occur.” That provision matters in trade-secret cases, where conspirators may be interrupted before commercialization, but still intend competitive displacement.

C. Impact

1) Trial practice: narrowing “legal impossibility” to fact-fitting cases

The decision reinforces a practical boundary: even when “legal impossibility” is theoretically available in conspiracy cases (acknowledged via Johnson v. United States), trial courts may prevent counsel from presenting it as a dispositive legal rule unless the evidentiary predicates are present. Here, the predicates failed because (i) the defendant did not qualify under the PIA’s disclosure-and-awareness regime, (ii) the use exceeded the permitted purpose, and (iii) the disclosure bypassed the PIA’s designated Gulfstream discloser.

For future trade-secret defendants, this signals that contractual permission defenses must be built with granular proof: who could disclose, to whom, with what notice/binding restrictions, for what limited purpose, and whether conduct remained within that purpose.

2) Sentencing in trade-secret conspiracies: intended loss via competitive displacement

The opinion illustrates how intended loss can be framed—and upheld—when the theory is competitive harm rather than direct theft of money: lost profits from displaced sales may serve as intended loss if supported by reliable testimony (e.g., expected sales impact, pricing, margins) and linked to the defendant’s intended market effects.

Additionally, by applying United States v. Horn, the panel cements (within the circuit’s post-827 framework) that intended loss is not an exceptional add-on; it is part of the guideline text as clarified, limiting defendants’ ability to argue that only actual loss counts in interrupted schemes.

3) Appellate posture and harmlessness considerations

The district court stated it would impose the same 63-month sentence “regardless of what the guidelines said” and “regardless of the loss amount.” While the panel did not rely on that as an alternative holding, the statement underscores a recurring dynamic: even successful guideline challenges may face a harmlessness headwind when the district court clearly announces an identical variant sentence under 18 U.S.C. § 3553(a). Future litigants should therefore develop records that test the firmness and rationale of such “same sentence” pronouncements.

IV. Complex Concepts Simplified

Legal impossibility vs. factual impossibility: “Legal impossibility” (in its pure form) means that even if everything the conspirators planned occurred, it still would not be a crime. “Factual impossibility” means the plan is criminal, but cannot be completed due to facts (e.g., the “victim” property wasn’t there). Martinez tried to characterize the PIA as making the plan non-criminal; the court found the PIA did not actually authorize what happened, so the theory did not fit the facts.
Mens rea in conspiracy: Conspiracy generally requires intent to agree and intent to achieve an unlawful objective. A true “legal impossibility” scenario can sometimes negate intent because the object is not unlawful. Here, the court reasoned the PIA could not negate Martinez’s intent where he did not know of the PIA and where the conduct fell outside any permission it might have provided.
Why a court can limit closing argument: Closing is not a free-form venue to instruct the jury on incorrect law. Under United States v. Harris and Herring v. New York, the judge can restrict arguments that are not legally tenable on the evidence, while still allowing supported factual arguments.
Intended loss: “Intended loss” is the financial harm the defendant meant to cause, even if it never happened (and even if it was unlikely). In trade-secret cases, that can be framed as the competitive harm the conspirators sought—e.g., lost profits from displaced sales—so long as the court’s estimate rests on reliable facts, not speculation.
Amendment 827 (U.S.S.G. § 2B1.1): Amendment 827 moved the “greater of actual loss or intended loss” rule from commentary into the guideline text. Under United States v. Horn, it is “clarifying” and applies to cases on direct appeal, confirming intended loss remains part of the calculation.

V. Conclusion

United States v. Juan Martinez tightens two pressure points in trade-secret conspiracy litigation. First, it confirms that “legal impossibility” may be acknowledged in principle but can be kept from the jury where the evidentiary predicates do not support it—particularly when contractual authorization arguments collapse under the agreement’s own disclosure limits, purpose restrictions, and recipient-awareness requirements. Second, it applies the post-Amendment 827 landscape (via United States v. Horn) to reaffirm that intended loss is part of the § 2B1.1(b)(1) calculus and illustrates a defensible method for estimating intended loss through record-supported competitive-displacement and profit-margin evidence.