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UNITED STATES COURT OF APPEALS
For the Fifth Circuit
-----------------------------
No. 92-2887
------------------------------
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
BOLIVAR O. PALACIOS-MOLINA,
Defendant-Appellant.
--------------------------------------------------
Appeal from the United States District Court
for the Southern District of Texas
-------------------------------------------------
(October 27, 1993)
Before JOHNSON, WIENER, AND DeMOSS, Circuit Judges.
JOHNSON, Circuit Judge:
Defendant-Appellant Bolivar O. Palacios-Molina ("Mr.
Palacios") pled guilty to possession with the intent to distribute
more than 500 grams of cocaine. At sentencing, however, Mr.
Palacios objected to the inclusion of the weight of the carrier
liquid in which the cocaine was distilled in the drug quantity
calculation. The district court overruled this objection, though.
As we conclude that the weight of the transport liquid should not
have been included in the quantity calculation, we reverse.
FACTS AND PROCEDURAL HISTORY
1

Mr. Palacios was arrested at the Houston Intercontinental
Airport when customs inspectors discovered powdered cocaine in two
aerosol cans he was carrying. Further, the inspectors discovered
two one-and-a-half liter bottles of "Yago Sangria" which contained
a thick liquid which proved to have cocaine distilled in it.
As a result of a plea bargain, Mr. Palacios pled guilty to
possession with the intent to distribute in excess of 500 grams of
cocaine.1 At sentencing, however, Mr. Palacios objected to the
drug quantity calculation because it included both the weight of
the powdered cocaine from the aerosol cans and the entire weight
of the liquid in the two bottles. This gross weight was 4,328.7
grams and equated to a base offense level of 30. Instead, Mr.
Palacios asserted that the weight of the waste liquid in the
bottles should have been excluded. This would produce a weight of
3,456.2 grams and equate to an offense level of 28.
The district court overruled this objection, though, and
sentenced Mr. Palacios based on the greater weight. This led to
the imposition of a sentence of 70 months' imprisonment, a five-
year term of supervised release and a $500.00 cost assessment.
Mr. Palacios timely appealed this sentence.
DISCUSSION
The facts in this case are not disputed. Instead, this
appeal challenges the district court's application of the Federal
Sentencing Guidelines to those facts. Our review of the district
1 21 U.S.C. §841(a)(1).
2

court's application of the Guidelines is de novo. United States
v. Anderson, 987 F.2d 251, 257 (5th Cir. 1993).
The issue in this appeal is whether, in calculating the
weight of cocaine for sentencing purposes, the weight of the
transport medium should be included. The starting point for
analyzing this issue is U.S.S.G. §2D1.1, Drug Quantity Table
(November, 1992). That section of the Sentencing Guidelines
states that "the weight of a controlled substance . . . refers to
the entire weight of any mixture or substance containing a detect-
able amount of the controlled substance." Id. (emphasis added).
Thus, the issue reduces to whether the liquid in the bottles
herein was a "mixture or substance" within the meaning of §2D1.1.
This section was recently discussed by the Supreme Court in
Chapman v. United States, ____ U.S. ____, 111 S.Ct. 1919 (1991).
In Chapman, the drug at issue was LSD which, for the purposes of
sale, is sprayed onto blotter paper. Squares of this paper are
then sold and the drug is ingested by either eating or licking the
paper or by dropping the paper into a beverage where the coating
dissolves and the drug is released. Id. at 1923. Chapman argued
that the weight of the blotter paper should not have been included
in the weight calculation. Instead, Chapman alleged that the
weight of the pure LSD should have determined sentencing.
The Supreme Court disagreed. In so doing, the Court observed
that Congress had "adopted a `market-oriented' approach to punish-
ing drug trafficking, under which the total quantity of what is
distributed, rather than the amount of pure drug involved, is used
3

to determine the length of the sentence." Id. at 1925. The
blotter paper met this analysis. Though it diffused the LSD and
thus decreased the drug's purity, the paper was part of the total
quantity of what was marketed. Further, the Supreme Court noted
that the LSD/blotter paper material met the dictionary definition
of the term "mixture." Hence, the Court held that this was a
mixture within the meaning of §2D1.1 and thus the weight of the
paper was includible in the quantity calculation. Id. at 1929.2
The Chapman decision did not end the uncertainty, however,
with regard to the precise issue in the present case. Chapman
involved a carrier medium. With LSD, some form of carrier medium
is needed to facilitate the marketing and distribution of the
drug. The present case involves a transport medium, though. Its
function is merely transportation and concealment and it is
removed from the drug before it is marketed.3 In addressing this
2 See also United States v. Taylor, 868 F.2d 125, 127-28
(5th Cir. 1989)(weight of the distribution medium is included in
calculating the weight of LSD).
3 The government suggests that the cocaine need not have
been separated from the liquid, but rather, it was useable and
marketable in its aqueous form. The genesis of this argument is
the dissent by Judge Van Graafeiland in United States v. Acosta,
963 F.2d 551 (2d Cir. 1992). In his dissent, the Judge recounts
that in the late 19th Century, before cocaine was branded a
controlled substance, it was distilled in many different types of
liquids and marketed in that form for its exhilarative and
medicinal qualities. Id. at 558 (Van Graafeiland, J, dissent-
ing). While this may be true, this is not the way that illicit
cocaine is marketed today. In today's market, the transport
liquid is separated from the drug powder and its cutting agents.
This separated liquid is simply waste liquid. United States v.
Rolande-Gabriel, 938 F.2d 1231, 1237 (11th Cir. 1991). Moreover,
as Mr. Palacios was also found with a quantity of powdered
cocaine, it seems clear that the cocaine he was carrying was not
4

precise issue, the Circuits have split. See Walker v. United
States, ___ U.S. ___, 113 S.Ct. 443 (1992) (White, J., dissenting
from the denial of certiorari review).
On one side, as to cocaine, stands the First Circuit. In
United States v. Mahecha-Onofre, 936 F.2d 623 (1st Cir. 1991),
that Court held that the weight of the transport medium should be
included in the quantity calculation. In that case, smugglers
tried to import cocaine by mixing it with the acrylic material in
a suitcase. Citing Chapman, the Court found that, even though the
cocaine had to be separated from the acrylic material before use,
this sustance met the "ordinary meaning" of the term mixture.
Accordingly, the Court upheld a sentence which included the weight
of the entire suitcase minus its metal parts. Id. at 626.4
On the other side of the split are the Second, Eleventh,
Third and Ninth Circuits.5 Illustrative of these cases is United
intended to be marketed as a liquid. Thus, we find no merit in
this argument.
4 See also, United States v. Lopez-Gil, 965 F.2d 1124 (1st
Cir 1992) (entire weight of cocaine/fiberglass mixture making up
a suitcase included); United States v. Restrepo-Contreras, 942
F.2d 96 (1st Cir. 1991) (cocaine mixed with beeswax and sculp-
tured into a statue is a mixture).
5 See e.g. United States v. Salgado-Molina, 967 F.2d 27, 29
(2d Cir. 1992) (weight of liqueur in which cocaine was distilled
should not be included in weight calculation); United States v.
Rolande-Gabriel, 938 F.2d 1231, 1237 (11th Cir. 1991) (unusable
liquids in a transport mixture in the trafficking of cocaine
should not be included in the weight calculation); United States
v. Bristol, 964 F.2d 1088 (11th Cir. 1992) (weight of wine in
which cocaine was distilled should not be included in weight
calculation); United States v. Rodriguez, 975 F.2d 999, 1007 (3rd
Cir. 1992) (cocaine layered on top of boric acid and compressed
into a brick not a mixture); United States v. Robins, 967 F.2d
1387, 1389 (9th Cir. 1992) (cornmeal and cocaine not a mixture
5

States v. Acosta where the Second Circuit held that the weight of
the creme liqueur in which cocaine was distilled should not be
included in the weight calculation. 963 F.2d 551 (2d Cir. 1992).
To support this holding, the Court seized on the "market-oriented"
language in Chapman. Accordingly, the Court argued that Congress
was concerned with usable drugs on the market. However, the
liqueur in Acosta had to be removed from the drug before use. It
was not marketed with the cocaine and was not ingestible, but
rather, it was merely used for transportation and concealment.
Thus, the Second Circuit held that the liqueur was merely liquid
waste and the functional equivalent of packaging material which
the Chapman Court found not to be includible in the quantity
calculation.6 Id. at 254.
because they are easily distinguishable, cornmeal is not a
diluent, and the cornmeal had to separated out before the cocaine
could be effectively used).
6 To resolve this split in authority, the Federal Sentenc-
ing Guidelines Commission has recently proposed amendments to the
comments of the Guidelines worded as follows:
Mixture or substance does not include materials that
must be separated from the controlled substance before
the controlled substance can be used. Examples of such
materials include the fiberglass in a
cocaine/fiberglass bonded suitcase, beeswax in a
cocaine/beeswax statue, and waste water from an illicit
laboratory used to manufacture a controlled substance.
58 Fed. Reg. 27148-01 (1993) (proposed April 29, 1993). This
amended commentary comes too late to directly help Mr. Palacios
as it was not yet proposed at the time he was sentenced. 18
U.S.C. §3553(a)(4) and (5) (sentencing decisions made based on
the Guidelines in effect at the time defendant sentenced).
However, it is at least persuasive authority as to the meaning of
the term "mixture" that the Guidelines Commission intended under
the Guidelines in effect when Mr. Palacios was sentenced.
6

The Fifth Circuit has not faced this specific issue of what
constitutes a mixture with the drug cocaine. It has, however,
decided this issue with regard to the drug methamphetamine. In
several cases, this Circuit has held that toxic liquid byproducts
from the manufacture of methamphetamine that contain trace
quantities of the drug are "mixtures" within the meaning of
§2D1.1. Thus, the gross weight of these liquids is includible in
the weight calculation for sentencing.7 The government argues
that these decisions with regard to methamphetamine byproducts
resolve this issue as to transport mediums with cocaine as well.
Mr. Palacios contends, however, that we should, on the
strength of the market-oriented analysis set forth in Chapman,
hold that unusable waste liquids in connection with the
trafficking of cocaine should not be included in the weight
calculation for sentencing. Further, he argues that such a
holding would not be contrary to our methamphetamine rulings
because they are distinguishable in that Chapman did not apply to
methamphetamine.
Studying Chapman, we note that the Supreme Court embarked on
its market-oriented analysis only after specifically recognizing
7 See, e.g., United States v. Anderson, 987 F.2d 251, 258
(5th Cir. 1993); United States v. Ruff, 984 F.2d 635, 640 (5th
Cir. 1993); United States v. Walker, 960 F.2d 409, 412 (5th
Cir.), cert. denied, ___ U.S. ___, 113 S.Ct. 443 (1992); United
States v. Sherrod, 964 F.2d 1501, 1509-10 (5th Cir.), cert.
dismissed, ___ U.S. ___, 113 S.Ct. 834 (1992); United States v.
Mueller, 902 F.2d 336, 345 (5th Cir. 1990); United States v.
Butler, 895 F.2d. 1016, 1018 (5th Cir. 1989), cert. denied 498
U.S. 826, 111 S.Ct. 82 (1990); United States v. Baker, 883 F.2d
13, 15 (5th Cir.), cert. denied, 493 U.S. 983, 110 S.Ct. 517
(1989).
7

that the drugs methamphetamine and PCP were singled out for
different treatment under the Guidelines.8 Chapman, 111 S.Ct. at
1924. Thus, it would appear that the market-oriented analysis was
not intended to apply to methamphetamine or PCP.
In fact, this Circuit has recognized as much. In United
States v. Sherrod, 964 F.2d at 1510, this Court reaffirmed its
methamphetamine decisions, but only after it specifically
concluded that the Chapman market-oriented reasoning did not apply
to methamphetamine.9 Further, this Court stated in United States
v. Walker that
Chapman did not involve methamphetamine; nor did it
involve a liquid. Hence, the Court did not speak to the
issue of whether the weight of liquid waste containing
methamphetamine should serve as a basis for computing a
defendant's offense level.
960 F.2d at 412.
Moreover, there are rational reasons, aside from their
disparate treatment under the Guidelines and under Chapman, to
distinguish the liquid waste in the instant case and the liquid
waste in the manufacture of methamphetamine. In the case at bar,
the liquid in the wine bottles was an otherwise innocuous liquid.
Its only purpose was to conceal the drug during transportation.
8 For these two drugs, sentencing based on either the
weight of the pure drug or on the weight of a mixture containing
the drug is allowed. For other drugs, including cocaine and LSD,
only sentencing based on the weight of a mixture is allowed.
U.S.S.G. §2D1.1, Drug Quantity Table (November 1992).
9 See also, United States v. Eastland, 989 F.2d 760, 768
(5th Cir. 1993); but see, United States v. Jennings, 945 F.2d
129, 136-37 (6th Cir. 1991) (applying the market-oriented
analysis in a methamphetamine case).
8

By contrast, the liquids involved in the methamphetamine cases
were either precursor chemicals or byproducts of the manufacturing
process. These are not otherwise innocuous liquids. Rather, they
are necessary to the manufacturing and thus the ultimate
distribution of the controlled substance. United States v.
Robins, 967 F.2d 1387, 1390 (9th Cir. 1992).
Accordingly, our decisions with regard to methamphetamine
should not dictate a result in this case. There are rational
reasons to distinguish between methamphetamine byproducts and the
liquid waste in this case. Further, in light of the Sentencing
Commission's recent proposed amendments submitted to Congress,10
we see no reason to extend our methamphetamine holdings to waste
liquids in cocaine trafficking as this has already become
superseded law.11 Lastly, Chapman's market-oriented analysis does
not apply to methamphetamine. It does, however, apply to cocaine.

Thus, we proceed unfettered by precedent as we consider
whether under the market-oriented analysis of Chapman waste liquid
in which cocaine is distilled for transport is part of a mixture
within the meaning of §2D1.1. We find that it is not and in so
doing, we follow the lead of the Second, Eleventh, Third and Ninth
Circuits.
Congress' concern was with the amount of usable, consumable
mixtures, whether pure or impure, that will eventually reach the
10 58 Fed. Reg. 27148-01, supra note 6.
11 See Stinson v. U.S., ___ U.S. ___, 113 S.Ct. 1913, 123
L.Ed.2d 598 (1993) (holding that the commentary to the Guidelines
is authoritative, even before reviewed by Congress).
9

streets. Rodriguez, 975 F.2d at 1006. To promote the goal of
reducing the amount of usable drug mixtures reaching the streets,
Congress adopted an approach to punishing drug trafficking that is
market-oriented. Chapman, 111 S.Ct. at 1925. Under this
approach, punishments are based on the "total quantity of what is
distributed, rather than the amount of pure drug involved. . ."
Id. (emphasis added). Moreover, this quantity is the "`street
weight' of the drugs in the diluted form in which they are sold. .
." Id., 111 S.Ct. at 1927-28.
In Chapman, the blotter paper was part of the usable
substance that was to be distributed on the market. It decreased
the purity of the LSD and increased the bulk of the noxious
material to be distributed. This is very different from the case
before us, though. Here, the liquid in which the cocaine was
distilled was not to be marketed as part of a usable substance
with the drug. Rather, it had to be removed before the drug was
marketed. It affected neither the purity nor the bulk of the
substance that was to be marketed. Though this liquid/cocaine
substance probably met the ordinary definition of the term
mixture, it was not a usable mixture that would ever reach the
streets.
Under the market-oriented approach, the issue is
marketability. Acosta, 963 F.2d at 555. Accordingly, sentencing
decisions should be based on the amount of marketable drug
mixtures trafficked, however pure. Id. The cocaine in the
present case was not a usable substance while it was mixed with
10

the liquid in the bottles. Only after the liquid was distilled
out would it be ready for either the wholesale or retail market.
Acosta, 963 F.2d at 555. Thus, as this liquid was not part of a
marketable mixture, it is not implicated under the market-oriented
analysis in Chapman and should not have been considered part of a
mixture for determining drug quantities under §2D1.1.
Rather, the liquid in the wine bottles in this case was akin
to the packaging material found not to be includible in Chapman,
111 S.Ct at 1926. As with any normal container, the cocaine here
was placed into the liquid for transportation and would be
separated out before use. Moreover, it was easily distinguishable
from and separable from the cocaine. Rolande-Gabriel, 938 F.2d at
1237. Thus, it was the functional equivalent of packaging
material. Robins, 967 F.2d at 1389.
Additionally, to hold that this liquid is a mixture for
§2D1.1 purposes would lead to unjust results. It is fundamentally
unfair to punish someone who trafficks in the same amount and
purity of cocaine as another more severely simply because he chose
to distill his cocaine in ten gallons of water whereas the other
chose to distill his cocaine in only five gallons. When the
respective individuals separate their cocaine from the water, the
same amount of usable drug mixtures will be marketed by each
individual and thus the same amount of societal evil will be done.
See 28 U.S.C. §991(b)(1)(B) (Sentencing Commission established to
"provide certainty and fairness in meeting the purposes of
sentencing, avoiding unwarranted sentencing disparities among
11

defendants with similar records who have been found guilty of
similar criminal conduct...").
Lastly, the government points to certain language in the
Chapman decision to the effect that the blotter paper makes the
LSD "easier to transport, store, conceal, and sell." Chapman, 111
S.Ct. at 1928. Further, the Chapman Court referred to the blotter
paper as a "tool of the trade for those who traffic in [LSD]."
Id. In like manner, the government argues that the liquid
transport medium here was a "tool of the trade" that made the
cocaine "easier to transport, store, conceal, and sell."
We do not find this argument convincing because it misses the
basic point. The yardstick by which culpability is measured in
drug trafficking cases is the amount of the commodity (usable drug
mixtures) that the defendant moves in the chain of distribution.
The government's argument ignores this. Instead, this argument
describes how the defendant moves the drugs and not how much of
the commodity the defendant moves. Acosta, 963 F.2d at 556. For
sentencing purposes, the method of transporting the drugs is
unimportant. Rather, it is the amount of that commodity
trafficked that counts. Thus, the government's argument fails.
CONCLUSION
We believe that in light of Congress' market-oriented
approach, culpability must be based on the amount of usable drug
mixtures that the defendant brings to the market. Id. at 557.
Here, the liquid transport medium in the wine bottles was to be
separated out before distribution. Thus, it was not a part of the
12

usable drug mixture that would reach the market. Accordingly, the
substance in the wine bottles in this case was not a mixture
within the meaning of §2D1.1 and therefore the weight of the waste
liquid should not have been included in the quantity calculation
for sentencing purposes.
REVERSED AND REMANDED.
13