The White Collar Appeal: Decisions from the Third and Ninth Circuits Diverge on When to Consult the U.S. Sentencing Guidelines Commentary

• The Supreme Court decided in 2019 that a court should defer to an agency’s interpretation of its own regulation only where the regulation is genuinely ambiguous.  But courts have not applied this precedent with uniformity when interpreting the U.S. Sentencing Guidelines.
• In one recent decision, the Third Circuit held that a district court erred in considering the Sentencing Guidelines commentary to construe the meaning of a Guidelines provision without first determining whether the terms of the provision were genuinely ambiguous.  The very next day, however, the Ninth Circuit did exactly that by going directly to the Guidelines commentary without considering whether the provision was ambiguous.
• The lack of clarity about when the Guidelines commentary is fair game creates optionality for advocates at sentencing.  Where the commentary is unhelpful, counsel should direct the court to the text of the Guidelines provision and object to any reliance on the commentary.  That said, it appears the Supreme Court is likely to weigh in on this question in its next term.

Background

United States v. Riddy.  DEA agents suspected that Timothy Riddy was selling crack.  They had evidence suggesting that Riddy collected payments through Cash App and either made sales himself or sent his codefendant to make them.  When they searched his home, agents found drugs, a ledger reflecting drug sales, and cash.  Riddy pleaded guilty to a drug conspiracy, and the Probation Office recommended a two-level enhancement under Section 3B1.1(c) of the Sentencing Guidelines on the basis that Riddy was a manager or supervisor.  (The role adjustment was significant, because Riddy otherwise would have qualified for the safety valve under Section 3553(f) and could have been sentenced below the ten-year mandatory minimum.)  The district court resolved the question by relying on the Guidelines commentary, determined that Riddy qualified for the role adjustment, and sentenced him to 120 months.

United States v. Shi.  Shi was a money laundering case involving Target gift cards procured through a telephone scam.  The Guidelines calculation involved a number of enhancements specific to the money laundering Guideline, as well as arguments about aggravating- and mitigating-role adjustments.  As relevant here, the district court held that two defendants did not qualify for a mitigating-role adjustment under Section 3B1.2.

Holdings

Riddy.  The Third Circuit held that the district court should not have consulted the Guidelines commentary.  In a prior case, the Third Circuit had determined that the Supreme Court’s decision in Kisor v. Wilkie, 588 U.S. 558 (2019)—which held that courts should defer to agency interpretations of their own regulations only where the regulation is genuinely ambiguous—required courts to undertake a three-step analysis to determine when to refer to the Guidelines commentary.  First, is the text of the Guidelines provision genuinely ambiguous after considering its text, structure, history, and purpose? If not, then the court should not go beyond the plain text.  Second, if it is ambiguous, does the Guidelines commentary clarify the ambiguity without changing the text’s meaning?  If not, then the commentary is unreasonable and the court should not defer to it. Third, if the commentary is reasonable, does its interpretation “implicate” the Sentencing Commission’s “substantive expertise, reflect fair and considered judgment,” and constitute the Commission’s “official position”?  If so, then it is entitled to controlling weight.  (Unless otherwise indicated, this post omits internal quotation marks, citations, and alterations in the decision.)

In Riddy, however, the Third Circuit never got past the first step.  Using applicable dictionary definitions, the court determined that “manager” and “supervisor” were unambiguous and meant a person with oversight over operations or other people.  The structure of the aggravating-role adjustment provision confirmed that reading, and nothing about the purpose or history of the provision suggested otherwise. As a result, the district court erred by consulting the Guidelines commentary.  Ultimately, however, because the record supported the application of the enhancement, the Third Circuit affirmed the sentence.

Shi.  The Ninth Circuit briefly addressed, and rejected, Shi’s argument that he should have received a mitigating-role adjustment.  Specifically, it explained that “Shi was not ‘substantially less culpable than the average participant,’” citing Application Note 3(A) to Section 3B1.2.

In a concurrence, the Honorable Eric C. Tung took issue with this approach.  In his view, Kisor overruled prior Ninth Circuit precedent that would require a sentencing court to analyze the five factors listed in the commentary to the mitigating-role Guidelines provision.  Instead, according to Judge Tung, because the term “minor participant” is not ambiguous, the Guidelines commentary should not have factored into the court’s analysis.

Key Takeaways

Anyone seeking to exclude commentary relating to “manager” or “supervisor” should cite Riddy.  Riddy is clear:  “the terms ‘manager’ and ‘supervisor’ are not genuinely ambiguous… Without any genuine ambiguity, the factors listed under Application Note 4 should not be afforded controlling weight.”  Instead, “a ‘manager’ or a ‘supervisor’ is a person with oversight over operations or other persons.”  Defendants who believe they have a better shot to avoid the enhancement under Riddy’s definition should object to any reliance on the commentary, if only to preserve the issue for appeal.

Riddy suggests that some Guidelines commentary may be fair game even if other commentary is not.  When it came to analyzing the purpose of the aggravating-role adjustment, the Third Circuit looked to the “Background” commentary for Section 3B1.1. In doing so, the court distinguished between the Guidelines’ “Background” commentary and “interpretive commentary” like the Application Notes.  The former, the Third Circuit explained, does not implicate the three-step analysis, but the latter does. 

The Supreme Court may soon clarify the proper way to use the commentary.  In April 2026, the Supreme Court granted cert in a case where the lower court had given dispositive weight to Guidelines commentary even though the Guidelines provision itself was not ambiguous.  And in its merits brief—filed only a few days before Riddy and Shi came down—the Solicitor General conceded that the lower court’s reliance on the commentary was erroneous and suggested that the Supreme Court vacate the sentence. So it seems likely that the Supreme Court may soon shed light on exactly when and how sentencing courts should consult the Guidelines commentary.

In the meantime, defense counsel should object anytime a sentencing court relies on unhelpful commentary.  Until there is clarity about the import of the Guidelines commentary, defendants might as well object anytime the government or a sentencing court invokes an unhelpful Application Note.  At a minimum, defendants should insist that the court complete the genuine-ambiguity inquiry before treating any commentary as authoritative.

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