Reaffirming Deference to Sentencing Guidelines Commentary under Stinson: Inclusion of Intended Loss in U.S.S.G. §2B1.1 Calculations

Introduction

United States v. Eric Upchurch is a Seventh Circuit decision issued on April 30, 2025, concerning the proper calculation of “loss” for sentencing under U.S.S.G. §2B1.1. Eric Upchurch was convicted by a jury of wire fraud, false statements, and money laundering related to fraudulent Paycheck Protection Program (PPP) loan applications during the COVID-19 pandemic. At sentencing, the district court applied the greater of actual or intended loss—per Application Note 3(A) to §2B1.1—resulting in a higher Guidelines range. Upchurch challenged this approach on appeal, arguing that the circuit’s prior decision in United States v. Ponle misapplied deference principles in light of the Supreme Court’s decision in Kisor v. Wilkie, and that “loss” unambiguously means only actual loss. The Seventh Circuit affirmed, reaffirming that commentary to the Sentencing Guidelines is authoritative under Stinson v. United States and Ponle, and rejecting Upchurch’s Kisor-based challenge.

Summary of the Judgment

The Seventh Circuit held that:

1. The base offense level under §2B1.1 must reflect the greater of actual or intended loss, in accordance with Application Note 3(A).
2. Application Note 3(A) is binding commentary from the Sentencing Commission and remains authoritative under Stinson, even post-Kisor.
3. No “plainly erroneous” showing was made to overturn Ponle, which interpreted “loss” consistently with the note.
4. Upchurch’s sentencing range was properly calculated at 37–46 months, though his ultimate below-Guidelines sentence of 28 months was permissible.

Accordingly, the court affirmed the sentence.

Analysis

Precedents Cited

• United States v. Ponle (7th Cir. 2024): Held that Application Note 3(A) to §2B1.1 requiring the greater of actual or intended loss is authoritative under Stinson.
• Stinson v. United States (1993): Established that Sentencing Guidelines commentary is binding unless inconsistent with the text or plainly erroneous.
• Kisor v. Wilkie (2019): Held that Auer deference to agency interpretations applies only when a regulation is genuinely ambiguous and after exhausting traditional tools of construction.
• United States v. Banks (3d Cir. 2022): Applied Kisor to §2B1.1 and held “loss” unambiguously means actual loss, rejecting Application Note 3(A).
• Circuit splits: Sixth, Ninth, and Eleventh Circuits followed Banks’ approach; Fifth and Tenth Circuits aligned with Ponle, deferring to commentary under Stinson (Vargas, Maloid).
• Other Seventh Circuit decisions reaffirming Stinson post-Kisor: Sotelo, White.

Legal Reasoning

1. Authority of Sentencing Commentary: Under Stinson, commentary issued by the Sentencing Commission is authoritative unless it conflicts with the Guideline text or is clearly erroneous. The court reaffirmed that the Sentencing Commission is not an executive agency, distinguishing it from regulatory agencies addressed in Kisor.

2. Notice-and-Comment Process: The court emphasized that Application Note 3(A) underwent notice-and-comment rulemaking, reducing concerns about unreviewed agency interpretations that animated Kisor.

3. No “Plainly Erroneous” Showing: Upchurch failed to identify any intervening legal developments or textual conflicts that would render Application Note 3(A) “plainly erroneous” under Stinson.

4. Circuit Precedent and Stability: The court declined to overrule Ponle without a “compelling reason,” noting that a mere circuit split is insufficient to disturb settled precedent.

Impact

This decision cements the Seventh Circuit’s approach to loss calculation in fraud cases, ensuring that sentencing courts continue to apply the greater of actual or intended loss. It narrows the influence of Kisor on Guidelines commentary and forecloses challenges that the Commentary is non-binding if unambiguous. Defendants in this Circuit will face higher offense levels where intended loss exceeds actual loss, even if some applications were denied. The broader impact includes:

• Reinforcing deference to the Sentencing Commission’s rulemaking process in other Guidelines contexts.
• Limiting forum shopping by defendants seeking more favorable treatment in Third, Sixth, Ninth or Eleventh Circuits.
• Potentially prompting the Supreme Court to resolve the divergence on commentary deference vs. Kisor across circuits.

Complex Concepts Simplified

Actual vs. Intended Loss: “Actual loss” is the money the defendant actually obtained or caused a victim to lose. “Intended loss” includes funds the defendant sought to obtain, even if the attempt failed. Under the Commentary, sentencing uses whichever number is higher.

Stinson Deference: A rule that commentary published by the Sentencing Commission carries binding authority in federal courts unless it contradicts the Guideline or is plainly wrong.

Kisor Deference: A doctrine applying to executive-agency interpretations of their own rules, requiring a genuine ambiguity and a reasoned interpretation. It does not displace Stinson’s approach to Guidelines commentary.

Conclusion

United States v. Eric Upchurch reaffirms that sentencing courts in the Seventh Circuit must apply the greater of actual or intended loss under U.S.S.G. §2B1.1, as specified in Application Note 3(A). The decision underscores the continuing authority of Guidelines commentary under Stinson, rejects the application of Kisor to displace that deference, and maintains consistency with prior Seventh Circuit precedents. This ruling will guide future sentencing, ensuring that defendants cannot avoid higher offense levels by contesting only actual loss when significant intended losses are documented.