author: CALABRESI, Circuit Judge:

text:
    UNITED STATES of America, Appellee, v. Darrell BENNETT, also known as Sealed Defendant 1, Defendant-Appellant
    Docket No. 15-0024-cr
    August Term, 2015
    United States Court of Appeals, Second Circuit.
    Argued: April 28, 2016
    Decided: October 6, 2016
    Amended: October 7, 2016

      Colleen P. Cassidy, Federal Defenders of New York, Inc., Appeals Bureau, New York, New York, for Defendant-Appellant
    Eun Young Choi (Adam S. Hickey, on the brief), Assistant U.S. Attorneys, for, Preet Bharara, United States Attorney for the Southern District of New York, New York, New York, for Appellee
    Before: WALKER, CALABRESI, and HALL, Circuit Judges.
   CALABRESI, Circuit Judge:

Defendant Darrell Bennett appeals his sentence of 84 months’ imprisonment entered in the United States District Court for the Southern District of New York (Sullivan, J.) after he pled guilty to one count of possession of child pornography under 18 U.S.C. § 2252A(a)(5)(B). Bennett argues that the District Court erred in calculating the Guidelines range by imposing a five-level enhancement under U.S.S.G. § 2G2.2(b)(3)(B) for distribution of child pornography “for the receipt, or expectation of receipt, of a thing of value” based on his use of a peer-to-peer file-sharing system to trade pornography. While we ultimately conclude that the manner in which Bennett used file sharing warranted this enhancement, we hold that the District Court erred in describing the Guidelines range as above the statutory maximum for the charge. We therefore remand for resentencing.

BACKGROUND

Bennett pled guilty to an information charging him with one count of possession of child pornography under 18 U.S.C. § 2262A(a)(5)(B). Investigators with the Department of Homeland Security (“DHS”) identified Bennett as part of a larger investigation into the distribution of child pornography via the internet. In particular, DHS was investigating peer-to-peer file-sharing services, which allow users to download files stored on other users’ computers via the internet. On November 15, 2012, an undercover agent contacted Bennett through the file-sharing network GigaTribe and requested access to the files stored on Bennett’s computer. Bennett provided the password (which was “fun”), and the agent downloaded six videos from Bennett’s computer that contained child pornography. The undercover officer used software to determine the Internet Protocol address of Bennett’s computer, which was then used to identify Bennett’s residence.

The Offense Conduct. On February 22, 2013, DHS agents executed a warrant to search Bennett’s Manhattan apartment for child pornography. The agents seized Bennett’s computer, which was later found to contain 208 still images of child pornography and approximately 79 videos of child pornography. These images and videos included graphic depictions of adult men engaging in oral and anal intercourse with prepubescent boys. Forensic analysis of Bennett’s computer also established that he had shared his password approximately 221 times with approximately 174 different users on GigaTribe.

In many cases, Bennett shared his password with other users in exchange for their passwords (password-for-password, or “pass-for-pass” exchanges). For instance, Bennett engaged in one such exchange with another user:

[Bennett]: whats up?
[Bennett]: im in teens boys and stuff.
[Bennett]: what about u
[Other User]: 3 to 15 b//b, m//b b//g
[Other User]: pass for pass?
[Bennett]: yea
[Bennett]: mine is fun
[Other User]: lol
[Other User]: mine is; FFK25
[Bennett]: cool
[Bennett]: im trying to download but its not starting
[Other User]: because I have a huge amounts of people in que as I have possibly too many files., .sorry.. .be patient s I rarely go offline
[Bennett]: ok cool

l:14-cr-203-l Doc. 29, Ex. D, at 4. Bennett traded passwords with users on other occasions, such as:

[Other User]: wanna trade passes?
[Bennett]: yea
[Bennett]: mine is fun
[Bennett]: whats yours
[Other User]: thanks
[Other User]: t

Id. at 3. And:

[Other User]: would be interested in trading passes if you are
[Bennett]: yea I am
[Bennett]: yea
[Bennett]: mine is fun
[Other User]: mines [ ]
[Other User]: thanks for that
[Bennett]: thanks

Id. at 9.

Bennett was arrested and charged with the receipt and distribution of child pornography, in violation of 18 U.S.C. § 2252A(a)(2), in addition to possession of child pornography, in violation of 18 U.S.C. § 2252A(a)(5)(B). On March 25, 2014, however, Bennett waived indictment and consented to the filing of an information that charged him solely with the possession count. And, on September 5, 2014, Bennett pled guilty before the District Court (Sullivan, J.) to the possession count of the Information.

The PSR. The Presentence Report (“PSR”) prepared by the Probation Office determined the Guidelines range to be 97 months’ to 120 months’ imprisonment. In calculating this range, the PSR found that the base offense level was 18 and applied the following sentencing enhancements: (1) a two-level increase because Bennett possessed pornography that “involved a prepubescent minor or a minor who had not attained the age of 12 years”; (2) a two-level increase because the offense involved “distribution other than distribution described in subsections A through E” of 18 U.S.S.G. § 2G2.2 (b)(3); (3) a four-level increase because Bennett possessed pornography that “involved material that portrays sadistic or masochistic conduct or other depictions of violence”; (4) a two-level increase because “the offense involved the use of a computer or an interactive computer service”; and (5) a five-level increase because the offense involved 600 or more images. PSR ¶¶ 25-37. This resulted in an adjusted offense level of 33, which was reduced by three levels for acceptance of responsibility for a total offense level of 30.

The total offense level of 30, together with Bennett’s criminal history category of I, resulted in a Guidelines range of 97 months’ to 121 months’ imprisonment. But, because the Guidelines-range maximum was limited by the statutory maximum of 120 months’ imprisonment, the Probation Office found that the Guidelines counseled a term of imprisonment of 97 to 120 months.

The PSR also detailed Bennett’s difficult upbringing. His father physically abused his mother and frequently took Bennett, from about the age of five, to brothels, strip clubs and sex shops in Baltimore. Although Bennett’s mother left his father when Bennett was five years old, Bennett continued to see his father after the divorce. This typically occurred while his father was in the company of women or consuming alcohol. Moreover, when he was seven years old, Bennett was sexually molested by a 15-year-old male babysitter. These experiences led him to be focused on (and engage in) sexual behavior from an extremely early age. Such behavior continued throughout high school and college.

After finishing law school, during a period of depression, he began to use Giga-Tribe to view a broad range of pornography, including bestiality, group sex, and child pornography. On this basis, Bennett’s psychiatric expert concluded that his interest in child pornography was not a product of a real predilection for minors but rather was “borne out of his own experiences with childhood sexual behavior and represents an unresolved psychological matter that can be addressed through psychotherapy.” PSR ¶ 71.

Despite this troubled—and, specifically, sexually troubled—background, Bennett was tremendously successful. After high school, Bennett attended Morehouse ■ College, from which he graduated as valedictorian. He then went to the Harvard Law School, graduating in 2010 as a-Class-Marshal. Bennett was, however, unable to find a legal job after graduating from law school and became severely depressed as a result. He briefly sought treatment at Harlem Hospital, where he was diagnosed with depression and bipolar disorder with manic depression • and schizophrenia and was prescribed Seroquel for insomnia. Bennett did find a job as an adjunct professor of criminal justice at ASA College in Brooklyn, where he worked from early 2011 until late 2018. He then began work as a substitute and adjunct professor at Borough of Manhattan Community College. This job continued until his sentencing.

The PSR ultimately recommended a Guidelines sentence of 97 months’ imprisonment. This was based, in part, on skepticism toward the conclusions of Bennett’s psychiatric expert that Bennett was not sexually attracted to minors and should not be diagnosed with pedophilia. The recommendation also , demonstrated the “serious concerns [of the Probation Office] about [Bennett’s] risk to re-offend and his ability to be safely managed in the community.” Id. at 23.

The Sentencing Submissions. On December 5, 2014, Bennett submitted a sentencing letter that requested a sentence of three years’ probation. The submission argued that this sentence was appropriate given (1) Bennett’s unusual promise and success, especially in light of his childhood, (2) Bennett’s traumatic sexual history, which suggested that Bennett did not pose any danger to the community, and (3) Bennett’s abstention from viewing child pornography after his computer had been seized by agents in February 2013. On this basis, Bennett, and the expert who supported his submission, argued that he was “an excellent candidate for supervision, treatment and rehabilitation.” App. Í08. Bennett did not challenge the PSR’s calculation of his Guidelines range.

On December 12, 2014, the Government, in its own sentencing submission, agreed that a below-Guidelines sentence was appropriate for essentially the same reasons advanced by Bennett, but asked for a “significant incarceratory sentence” given the seriousness of the offense conduct. App. 185. Moreover, as to the calculation of the Guidelines range, the Government argued that, a five-level enhancement under U.S.S.G. § 2G2.2(b)(3)(B), instead of the two-level enhancement under U.S.S.G. § 2G2.2(b)(3)(F), applied. This was because distribution “for the receipt, or expectation of receipt, of a thing of value, but not for pecuniary gain,” instead of simple distribution, was involved. The more significant, enhancement was appropriate, the Government contended, because Bennett “gave his password to others in anticipation of receiving their passwords in turn, [so] that Bennett could gain access to other user’s ... shared folders and the child pornography contained therein.” App. 195.

The Sentencing. Bennett was sentenced by the District Court on December 19, 2014. After summarizing the materials received and confirming that there were no objections to the facts presented in the PSR, the District Court turned to the calculation of the Guidelines range. In particular, the District Court found that Bennett’s interactions with users on the site— where there was an “exchange of passwords, after a brief exchange as to the interests of the users,” App. 231—warrant-ed the imposition of the five-level enhancement under U.S.S.G. § 2G2.2(b)(3)(B). This resulted in a total offense level of 33 and, based on this, the District Court found:

There’s no dispute that Mr. Bennett is in Criminal History Category I, so according to the guidelines, the range is 135 to 168, That’s about 11 years to 14 years or so. So 11 to 14 years, which is a long time.

App. 232.

After hearing argument from Bennett and the Government, the District Court went on to impose sentence:

The maximum here is ten, the guidelines are 11 to 14. I’m not moved by that. I think it’s worth noting just because I’m required to note it, but from the moment I read the facts of this case, it seemed to me that eight to ten is not inappropriate, II to 14 is not inappropriate. It’s not that I’m callous, it’s not that I have no sense as to what that time means to a young man like you who has so much promise, but it’s that the penalty has to send a message of moral outrage and a message of conviction that children matter.
So, look, I have to credit the goodness in you. The fact that I don’t think you’re a predator, you are distinguishable from many other defendants who are charged with crimes like this, I’m prepared to come down below the guidelines, down below the statutory maximum of ten, which would be within the guidelines range, but it seems to me that a sentence of seven years is as low as I can go without insulting the victims in this crime.

App. 281. The District Court then imposed a sentence of seven years’ incarceration, to be followed by five years of supervised release. The District Court also ordered special assessment of $100.

Bennett appealed.

DISCUSSION

Bennett’s principal contention on appeal is that the District Court erred in applying a five-level enhancement for distribution “for the receipt, or expectation of receipt, of a thing of value” under U.S.S.G. § 2G2.2(b)(3)(B). We ultimately conclude that this enhancement was warranted in Bennett’s case. But we also hold that the District Court incorrectly calculated the applicable Guidelines range by failing to recognize that the Guidelines range was reduced to the statutory maximum under U.S.S.G. § 5Gl.l(a).

A.

We review sentences using a “deferential abuse-of-discretion standard.” United States v. Gavera, 550 F.3d 180, 189 (2d Cir. 2008) (en banc) (internal quotation marks omitted). This review has both procedural and substantive components. Id. First, we scrutinize whether the District Court has committed “significant procedural error, such as failing to calculate (or improperly calculating) the Guidelines range, treating the Guidelines as mandatory, failing to consider the § 3553(a) factors, selecting a sentence based on clearly erroneous facts, or failing to adequately explain the chosen sentence.... ” Gall v. United States, 552 U.S. 38, 51, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007). An error applying the Guidelines is a legal error and, as a result, is reviewed de novo. United States v. Broxmeyer, 699 F.3d 265, 281 (2d. Cir 2012). Then, if there are no such procedural errors, we proceed to assess whether the sentence was substantively reasonable. Gall, 552 U.S. at 51, 128 S.Ct. 586.

Bennett did not challenge the calculation of the Guidelines range under U.S.S.G. § 5Gl.l(a) at the District Court. Accordingly, we review any such challenges for plain error. Molina-Martinez v. United States, — U.S. -, 136 S.Ct. 1338, 1343, 194 L.Ed.2d 444 (2016). This requires there to be (1) an error, (2) that is “plain—that is to say, clear or obvious,” and (3) which affected “substantial rights.” Id. In turn, for an error to affect substantial rights, there must be “a reasonable probability that, but for the error, the outcome of the proceeding would be different.” Id. (internal quotation marks omitted). We then exercise our discretion to correct the error if it “seriously affects the fairness, integrity or public reputation of judicial proceedings.” Id. (internal quotation marks omitted). That said, the plain-error standard is applied less “stringently in the sentencing context, where the cost of correcting an unpreserved error is not as great as in the trial context.” United States v. Gamez, 577 F.3d 394, 397 (2d Cir. 2009) (per curiam).

B.

Bennett contends that the District Court erred in applying the five-level increase under U.S.S.G. § 2G2.2(b)(3)(B) because Bennett’s conduct did not amount to anything “more than simple fire sharing,” and therefore did not constitute “any particular exchange.” Appellant’s Br. 32. We disagree.

Section 2G2.2(b)(3)(B) requires the application of a five-level increase if a defendant’s offense involved “[distribution for the receipt,' or expectation of receipt, of a thing of value, but not for pecuniary gain.” Application Note 1 to that Guideline clarifies that this type of distribution encompasses “any transaction, including bartering or other in-kind transaction, that is conducted for a thing of value, but not for profit.” U.S.S.G. § 2G2.2 cmt. n.l. The Note defines a “thing of value,” in turn, as “anything of valuable consideration,” including “child pornographic material received in exchange for other child pornographic material bartered in consideration for the material received.” Id.

If a defendant’s conduct involves distribution not for the “receipt, or expectation of receipt, of a thing of value,” and does not otherwise implicate any of the other forms of aggravated distribution enumerated in U.S.S.G. § 2G2.2(b)(3)(A), (C), (D), or (E), a two-level increase is applied for simple distribution under U.S.S.G. § 2G2.2(b)(3)(F). The Government does not contend that Bennett’s conduct implicates any of these other forms of aggravated distribution. Accordingly, the question before us is whether Bennett’s use of file-sharing software involves “distribution for the receipt, or expectation of receipt, of’ other child pornography. If so, the District Court correctly applied a five-level increase; if not, a two-level increase was appropriate.

We have not addressed whether the use of file-sharing technology can trigger the enhancement under Section 2G2.2(b)(3)(B), and if so, in what circumstances it is triggered. The Fifth and Eighth Circuits have held that an agreement to distribute child pornography in exchange for other child pornography is inherent in the knowing use of file-sharing programs to obtain and make available child pornography. United States v. Groce, 784 F.3d 291, 294-95 (5th Cir. 2015); United States v. Griffin, 482 F.3d 1008, 1012-13 (8th Cir. 2007) (“We now hold that § 2G2.2(b)(2)(B)’s five-level enhancement .,. applies to a defendant who downloads and shares child pornograr-phy files via an internet peer-to-peer file-sharing network, as these networks exist ... for users to share, swap, barter, or trade files between one another.”). Other Circuits have rejected such a per se rule, and instead have looked to the defendant’s particular use of file sharing to determine whether an expectation of receipt existed. United States v. Hernandez, 795 F.3d 1159, 1165 (9th Cir. 2015); United States v. McManus, 734 F.3d 315, 320 (4th Cir. 2013); United States v. Spriggs, 666 F.3d 1284, 1288 (11th Cir. 2012); United States v. Geiner, 498 F.3d 1104, 1111 (10th Cir. 2007).

We decline to adopt the reasoning of those courts that have found that any use of file sharing triggers the five-level enhancement. Some individuals undoubtedly use file-sharing software to engage in exchanges of illicit pornographic material. Cf. Groce, 784 F.3d at 294 (“By using this software as Groce has, the user agrees to distribute the child pornography on his computer in exchange for additional child pornography,”). But individuals need not utilize file sharing as a bargaining platform. Indeed, as the Eleventh Circuit has recognized, “[f]ile-sharing programs exist to promote free access to information” and “[generally ... do not operate as' a forum for bartering.” Spriggs, 666 F.3d at 1288. And, as a technological matter, file-sharing programs facilitate either approach; individuals may or may not restrict access to their files through password protection and, even if they do maintain a password, nothing restrains them from making their password generally available as a gift as opposed to as consideration in an exchange.

That many, or’ perhaps even most, Giga-Tribe users interact with this service in one way does not imply that other uses should be ignored in evaluating the applicability of the enhancement. Thus, “[although a defendant may share files on a file-sharing network with the expectation of receiving other users’ files in return, this is not necessarily true in every case.” Hernandez, 795 F.3d at 1165 (quoting Geiner, 498 F.3d at 1111).

Nevertheless, we conclude that Bennett’s conduct in the case before us warrants application of the Section 2G2.2(b)(3)(B) enhancement. We have previously held that, to show an exchange, the evidence need not demonstrate a “specific agreement or understanding between the distributor and the recipient of child pornography.” United States v. Maneri, 353 F.3d 165, 168 (2d Cir. 2003). Instead, we have stated that evidence of an “expectation]—rather than just [a] hope[ ]— to receive a thing of value,” including child pornography, suffices. Id. Other courts have adopted this logic. For instance, in Hernandez, the Ninth Circuit concluded that such an expectation was supported by evidence of a conversation in which defendant complained that an undercover officer was “leeching” him by failing to provide defendant with reciprocal access to pornography. 795 F.3d at 1166.

Accordingly, for the enhancement to apply, the Government must advance specific, individualized . evidence that Bennett provided access to his collection of child pornography to another user with the expectation that that user would provide similar access to other child-pornography files. That standard is plainly met here.

Bennett repeatedly engaged in “pass-for-pass” exchanges, in which he provided his password to another user with the expectation of receiving the other user’s password. Indeed, in one exchange (relied upon by the District Court) Bennett and another user expressly discussed their pornography preferences before agreeing to provide each other access to their child-pornography files. Then, upon having trouble downloading the other user’s pornography, Bennett complained of not having received his bargained-for material. And, we agree with the District Court that “[t]his exchange of passwords, after a brief exchange as to the interests of the users, would seem to be exactly what [Section 2G2.2(b)(3)(B) cmt. n.l] has in mind.” App. 231. Moreover, although the discussions surrounding Bennett’s other exchanges were perhaps not as fulsome, each nevertheless constituted a separate quid pro quo—I’ll give you my password (and therefore access to my child pornography) if you give me yours—that was understood by Bennett to involve an exchange of child pornography and carried out as such. Thus, Bennett, in carrying out each of these exchanges, did expect to receive access to these individuals’ child pornography files in exchange for his own files.

We conclude that the District Court properly applied a five-level enhancement for distribution for “the receipt, or expectation of receipt, of a thing of value, but not for pecuniary gain” under Section 2G2,2(b)(3)(B).

C.

The District Court, however, erred in calculating Bennett’s Guidelines range in another respect. It failed to take into account the effect of the statutory maximum on the Guidelines as required by U.S.S.G. § 5Gl.l(a).

U.S.S.G. § 5Gl.l(a) expressly provides that “[w]here the statutorily authorized maximum sentence is less than the minimum of the applicable guideline range, the statutorily authorized maximum sentence shall be the guideline sentence.” Thus, in United States v. Dorvee, 616 F.3d 174, 181 (2d Cir. 2010), we held that it was plain error for a district court to calculate a Guidelines range to be 262 to 327 months’ imprisonment where the statutory maximum of the underlying offense was 240 months’ imprisonment. Because the district court there “twice stated that the operative Guidelines range was 262 to 327 months” and “never correctly stated that the operative Guidelines range was 240 months’ imprisonment, either by indicating the Guidelines range on the record at sentencing or by adopting at sentencing the PSR’s statement of the applicable Guidelines range,” it “failed to apply section 5Gl.l(a) correctly.” Id. Because of this error, it “plainly erred in its Guidelines calculation.” Id.

Here, the District Court made the same error. In calculating the Guidelines range, it specifically stated that “the range is 135 to 168. That’s about 11 years to 14 years or so. So 11 to 14 years, which is a long time.” App. 232. It then continued to make reference to the Guidelines range as being 11 to 14 years’ imprisonment. App. 281 (“The maximum here is ten, the guidelines are 11 to 14.... [Fjrom the moment I read the facts of this case, it seemed to me that eight to ten is not inappropriate, 11 to 14 is not inappropriate.”). The District Court never corrected this error by indicating that the statutory maximum and the Guidelines range (both the minimum and the maximum) were the same: ten years. Accordingly, the District Court plainly erred in its calculation of the Guidelines range.

Moreover, the District Court’s error affected Bennett’s substantial rights. As the Supreme Court recently recognized, “[i]n most cases a defendant who has shown that the district court mistakenly deemed applicable an incorrect, higher Guidelines range has demonstrated a reasonable probability of a different outcome.” Molina-Martinez, 136 S.Ct. at 1346. This is because the “Guidelines are not only the starting point for most federal sentencing proceedings but also the lodestar.” Id. Indeed, “[e]ven if the sentencing judge sees a reason to vary from the Guidelines, if the judge uses the sentencing range as the beginning point to explain the decision to deviate from it, then the Guidelines are in a real sense the basis for the sentence.” Id. at 1345 (emphasis in original) (internal quotation marks omitted); see also Dorvee, 616 F.3d at 181 (finding that miscalculation of Guidelines affected substantial rights where the “district court continued to treat [the miscalculated range] as though it were the benchmark for any variance”).

Here, the miscalculated Guidelines range may well have anchored the District Court’s thinking as to what an appropriate sentence would be. Thus, even though the District Court asserted it was “not moved by” the Guidelines, it returned multiple times to the “11 to 14” range in framing its choice of a seven-year below-Guidelines sentence. App. 281. And, to the extent that the District Court concluded that this sentence was necessary “to send a message of moral outrage,” id. the strength of such a message is necessarily reflective of the Guidelines range, which, itself, “is based on the seriousness of a defendant’s offense,” Molina-Martinez, 136 S.Ct. at 1342.

In these circumstances, and given the less stringent application of the plain-error standard in sentencing, Gamez, 577 F.3d at 397, we hold that the District Court’s error affected Bennett’s substantial rights and seriously affected the fairness of the judicial proceedings. See Molina-Martinez, 136 S.Ct. at 1343. Bennett therefore has met the requirements of plain error review.

CONCLUSION

The District Court properly applied the five-level enhancement under U.S.S.G. § 2G2.2(b)(3)(B), but miscalculated the Guidelines sentence applicable to Bennett’s conduct because it referenced a Guidelines range above the statutory maximum sentence. That miscalculation affected Bennett’s substantial rights. Accordingly, we REMAND for resentencing.

      . At sentencing, the Government explained this portion of the discussion as Bennett stating that he was interested in pornography involving "teens, boys and stuff” and the other user describing his own interest in pomog-raphy involving "people ... between the ages of three [and] fifteen” and "boy on boy,” "man on boy,” and "boy on girl” pornography. App. 229. This characterization was not contested by Bennett's counsel.

      . Section 2G2.2.(b)(3) provides for a sentence enhancement where the offense conduct involves the distribution of material involving sexual exploitation of a minor. The degree of that enhancement, however, depends on the nature of the distribution at issue. Subsection (A) of that Section provides for an enhancement of at least five levels depending on the retail value of the material at issue where the distribution was "for pecuniary gain.” Subsection (B) similarly imposes a five-level enhancement where the distribution was "for the receipt, or expectation of receipt, of a thing of value, but not for pecuniary gain.” Subsection (C) provides for a five-level enhancement where the distribution was "to a minor.” Subsection (D) requires a six-level enhancement for distribution intended to "persuade, induce, entice, or coerce” a minor to engage in illegal activity, except where that illegal activity constitutes "prohibited sexual conduct,” which is subject to a seven-level enhancement under Subsection (E). Finally, if the offense conduct involved distribution not described in Subsections (A) through (E), Subsection (F) provides for a two-level enhancement. The PSR recommended this two-level enhancement under Section 202.2(b)(3)(F).

      . We have, however, previously held that file sharing can constitute simple distribution under U.S.S.G. § 2G2.2(b)(3)(F). United States v. Reingold, 731 F.3d 204, 228-30 (2d Cir. 2013). There, we found that the lesser enhancement was appropriate given that the defendant “knew from the start that distribution was a necessary condition of receipt” and that, "with that knowledge, [defendant] took deliberate and purposeful actions to effect that distribution.” Id. at 229.

      . The Eighth Circuit has subsequently clarified that "whether a defendant qualifies for the [Section 2G2.2(b)(3)(B)] enhancement must be decided on a case-by-case basis,” but that this could be established through evidence of defendant’s knowledge of “how [file sharing] worked.” United States v. Stults, 575 F.3d 834, 849 (8th Cir. 2009); see also United States v. Durham, 618 F.3d 921, 925-26 (8th Cir. 2010).

      . Bennett contends that the District Court committed procedural error in two other ways. But neither argument has merit.
      First, Bennett argues that the District Court "disagreed with Dorvee[ ] ... and refused to follow it” in sentencing him to seven years' imprisonment. Reply Br. 10. Bennett’s argument here, however, boils down to an assertion that his sentence was simply too long for an offender who is “not a pedophile and is unlikely to reoffend, and who holds an advanced education with unusual promise for the future,...” Id. 6. Whether or not this is true, however, Bennett's claim essentially is that his sentence is substantively unreasonable in light of Dorvee, a claim that we do not reach for reasons mentioned in footnote 9, infra.

      Second, Bennett claims that the District Court erred by taking into consideration the fact that Bennett’s offense conduct could have supported a charge under 18 U.S.C. § 2552A(a)(2), which would have been subject to a mandatory minimum of five years. But, as we have recognized, “[t]he sentencing court’s discretion is largély unlimited ... as to the kind of information it may consider,” and it is "free to consider .,. evidence of uncharged crimes, dropped counts of an indictment and criminal activity resulting in acquittal in determining sentence.” United States v. Gomez, 580 F.3d 94, 105 (2d Cir. 2009) (quoting United States v. Sisti, 91 F.3d 305, 312 (2d Cir. 1996)). That Bennett could have been charged with a more serious crime constitutes data similar to this sort of information, Moreover, while Bennett contends that the District Court wanted to compensate for* Bennett’s having “got[ten] a break” from the Government, Reply Br. 11, there is no basis for concluding this. Rather, the District Court raised this point in connection with Bennett’s counsel’s argument that his offense conduct was not that serious.

      . Because this argument was not raised below, it is subject to plain-error review. Additionally, Bennett first made it during oral argument. We nevertheless exercise our discretion to consider it. See City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011). We do so for reasons of judicial economy, as it could be raised in a collateral proceeding as part of an ineffective-assistance-of-counsel claim.

      . At oral argument, the Government argued that the following statement by the District Court indicated that it correctly calculated the Guidelines sentence to be 10 years’ imprisonment:
      I’m prepared to come down below the guidelines, down below the statutory maximum of ten, which would be within the guidelines range....
      Oral Arg. Recording at l:39:30-:48:00 (quoting App. 281 (emphasis added)). The Government contends that the clause ‘‘which would be within the guidelines range” should be read to equate the Guidelines range and the statutory maximum. This interpretation of the statement, however, is dubious. The statutory maximum would not be within the Guidelines "range” if the District Court had calculated the Guidelines sentence correctly. That maximum would be the Guidelines.

      . This conclusion, moreover, accords with contemporary research on judicial decision making, which indicates that anchoring and other "contextual factors” can affect the exact sentence imposed. See Jeffrey J. Rachlinski, Andrew J. Wistrich & Chris Guthrie, Can Judges Make Reliable Numeric Judgments? Distorted Damages and Skewed Sentences, 90 Ind. L. J. 695, 706 (2015).

      . Because we conclude that the District Court committed procedural error in imposing Bennett’s original sentence, we do not proceed to review the sentence for substantive reasonableness. See Cavera, 550 F.3d at 190. In doing this we emphasize that we are taking no position, at this time, on Bennett’s substantive Dorvee contention.


source: Caselaw Access Project

author: DENNIS JACOBS, Circuit Judge:

license: Public Domain

text:
    Cheryl SMITH, Plaintiff-Appellant, v. BARNESANDNOBLE.COM, LLC, Defendant-Appellee.
    Docket No. 15-3508
    August Term, 2015
    United States Court of Appeals, Second Circuit.
    Argued: May 20, 2016
    Decided: October 6, 2016
    Carlos A. Leyva, Digital Business Law Group, P.A., Largo, FL, for Appellant.
    ELIZABETH ROGERS BRANNEN, Stris & Maher LLP, Los Angeles, CA (with Peter K Stris, Brendan S. Maher, Dana Berkowitz, and Victor O’Connell on the brief), for Appellee.
    Before: KEARSE, WINTER, and JACOBS, Circuit Judges,

      . The Clerk of Court is directed to amend the caption as shown above,

   DENNIS JACOBS, Circuit Judge:

Plaintiff Cheryl Smith appeals from the judgment of the United States District Court for the Southern District of New York (Carter, J.), dismissing her complaint on summary judgment. Smith alleged direct and contributory copyright infringement by defendant Barnesandnoble.com, LLC (“Barnes & Noble” or “defendant”). The defendant, under license, uploads books and book samples to digital “lockers” that the defendant maintains for its individual customers. When the license granted by Smith was terminated, the defendant did not delete a sample of Smith’s book. Because the allegedly infringing conduct was authorized by the contracts at issue, we. affirm the district court.

BACKGROUND

The plaintiff is the widow of Louis. K. Smith, who authored and copyrighted a book entitled The Hardscrabble Zone (“Hardscrabble”). In 2009, Mr. Smith contracted with Smashwords, Inc. (“Smash-words”), an online ebook distributor, .to market his book. One relevant term of the agreement provided:

6d. Promotional Rights. Smashwords shall have the right to distribute samples of the Work in any form of media, including printed media, in order to promote (a) the author or author’s Work and/or (b) the Smashwords service. These samples will be licensed for free, non-commercial use, duplication and sharing, and will comply with the sample percentage authorized by the Author.

App’x at 28. The agreement contemplated robust rights in digital samples: it recognized that .“uninhibited sampling and sharing” had the potential to “dramatically increase” an author's “total audience and sales opportunities.” App’x at 30. At the same time, the contract provided that end-users who acquired a “free work” (defined to include “sample works”) had a license to “duplicate, share and reproduce” the sample, but only for “non-commercial purposes” and only “during the time the price is set at zero.” App’x at 29. While these arrangements contemplate that a customer’s right to share and duplicate a free sample could be terminated, the agreement did not provide that a customer’s right to use a validly obtained sample (or the entire work) would terminate, even if the entire distribution agreement was canceled. The agreement gave notice that “Smashwords does not publish works containing digital rights management schemes that limit the customer’s ability to consume Author’s Work as they see fit.” App’x at 30.

In accordance with this contract (and with Mr. Smith’s permission), Smashwords provided Hardscrabble for sale and sampling to its retail partners, including Barnes & Noble, which listed the book for sale on bn.com and made free samples available.

Apparently disappointed with the sales figures (none were sold), Mr. Smith terminated, his agreement with Smashwords in October 2011. Despite the termination, the book erroneously remained listed by Barnes & Noble on bn.com. The book was de-listed on April 20, 2012, and the disposi-tive issue is whether any customers acquired a sample while it was listed without a distribution agreement in place. Prior to termination of the.agreement, a single customer of Barnes & Noble acquired a digital sample of Mr. Smith’s book. No other customer bought a copy or obtained a sample, before or after the distribution agreement was cancelled.

The sample was stored through Barnes & Noble’s digital locker system. When a Barnes & Noble customer downloads a free sample (or purchases an ebook) the content is stored through a digital locker associated with the customer’s account. The system, effectively the user’s bookshelf for digital products, is cloud-based. Cloud computing uses remote servers and networks for data storage which may be accessed using web-enabled devices, such as computers, tablets, or smart phones.

There is no dispute that the single customer’s initial access to the sample was authorized under the contract and occurred before the agreement was terminated. After Mr. Smith cancelled the agreement with Smashwords, that same customer twice accessed the sample in his or her cloud-based' account. Those two instances of access form the basis of the plaintiffs claim that Barnes & Noble infringed the copyright. There is no record evidence that any other customer accessed a sample after the agreement was can-celled; and there is no record evidence that any person ever purchased the entire work from Barnes & Noble. The plaintiffs theory of liability is that Barnes & Noble was no longer permitted to provide its customers with access to the sample after the agreement was terminated.

DISCUSSION

I

We review a grant of summary judgment de novo. Authors Guild, Inc. v. HathiTrust, 755 F.3d 87, 93-94 (2d Cir. 2014). The moving party bears the burden to demonstrate the absence of any genuine issues of material fact; and we “view the evidence in the light most favorable to the party opposing summary judgment, [] draw all reasonable inferences in favor of that party, and [] eschew credibility assessments.” Amnesty Am. v. Town of W. Hartford, 361 F.3d 113, 122 (2d Cir. 2004) (internal quotation marks omitted).

The district court granted summary judgment on the basis that the conduct at issue did not amount to direct or contributory infringement under Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121, 131-33 (2d Cir. 2008), and the Sony-Betamax rule, see Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 442, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984). We decline to decide the infringement issue in the novel context of cloud storage, particularly given the sparse facts of the case. Instead we affirm on an alternative ground. See Name.Space, Inc. v. Network Solutions, Inc., 202 F.3d 573, 584 (2d Cir. 2000); Shumway v. United Parcel Serv., Inc., 118 F.3d 60, 63 (2d Cir. 1997) (“It is beyond cavil that an appellate court may affirm the judgment of the district court on any ground appearing in the record.”).

We conclude that the conduct at issue was authorized by the relevant contracts between the parties. See Revson v. Cinque & Cinque, P.C., 221 F.3d 59, 66 (2d Cir. 2000) (“Under New York law, the meaning of a contract that is unambiguous is a question of law for the court to decide.”).

II

A claim of direct copyright infringement requires proof that (1) the plaintiff had a valid copyright in the work, and (2) the defendant infringed the copyright by violating one of the exclusive rights that 17 U.S.C. § 106 bestows upon the copyright holder. Island Software & Computer Serv., Inc. v. Microsoft Corp., 413 F.3d 257, 260 (2d Cir. 2005). There is no dispute in this case that the plaintiff has a valid copyright, but the plaintiff must also be able to demonstrate that the copying was unauthorized. See Laureys-sens v. Idea Grp., Inc., 964 F.2d 131, 139 (2d Cir. 1992). Where, as here, the existence of the license is undisputed, and the only contested issue is its scope, the copyright owner bears the burden of proving that the defendant’s conduct was unauthorized under the license. See Graham v. James, 144 F.3d 229, 236 (2d Cir. 1998); Bourne v. Walt Disney Co., 68 F.3d 621, 631 (2d Cir. 1995).

The plaintiff had a distribution agreement that explicitly permitted the distribution of samples as promotional material. The plaintiff concedes that digital sampling as a method of distribution was permitted under the distribution agreement’s phrase “any form of media.” See App’x at 28.

After the agreement was canceled, the one customer who had already validly obtained a sample was permitted to access the sample in the customer’s cloud-based account two more times;.the plaintiff contends that these two instances of access amount to copyright infringement. However, the agreement provides for the distribution of samples with a license “for free, noncommercial use, duplication and sharing,” App’x at 28, without provision to terminate the license for samples already distributed in the event the distribution agreement itself is terminated. Significantly, the distribution agreement authorizes paper samples as well as digital samples, and treats them alike. Since a customer who has a paper sample may obviously keep it, reread it, and make additional paper copies of it for noncommercial use at will, it follows that the agreement does not provide or imply that a person who obtained a digital sample would lose the license for free access upon termination of the distribution agreement. Cf. Boosey & Hawkes Music Publishers, Ltd. v. Walt Disney Co., 145 F.3d 481, 486 (2d Cir. 1998) (explaining that licensees “may properly pursue any uses which may reasonably be said to fall within the medium as described in the license.” (quoting Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150, 155 (2d Cir. 1968) (Friendly, J.)). To the contrary, the agreement contemplated robust sampling rights, and Smashwords prohibited authors from using digital rights management schemes that would limit a customer’s ability to consume the author’s work “as they see fit.” See App’x at 30. The plaintiff does not argue that a customer who purchased the book itself would lose cloud-based access to it upon termination of a distribution agreement; the license to access the (free) sample is no more restrictive or limited than the license to access the book itself after purchase. Once the customer acquired the cloud-based sample, the service that Barnes & Noble provided was no longer distribution; the service provided was access. The cloud-based digital locker system permitted the customers to put ebooks or samples into their accounts, which books and samples they could then download to their devices whenever and wherever they wanted.

Because the agreement does not provide for the license in the sample to terminate after the sample has been distributed, the plaintiff cannot sustain her burden to prove that providing cloud-based access to validly obtained samples is beyond the scope of the license agreement. Accordingly, the district court was correct to grant defendants’ motion for summary judgment, and we affirm the judgment, albeit on different grounds.

CONCLUSION

For the foregoing reasons, we AFFIRM the judgment of the district court. We have considered all of appellant’s other arguments and find them to be meritless.

      . The provision governing termination stated, "Either party may terminate this agreement this Agreement [sic] at any time without notice. Registered Smashwords members may cancel their membership at any time, and published Smashwords authors may remove their author and book listings at any time.” App'x at 30.

      . In the agreement between Barnes & Noble and Smashwords, it was made clear that Barnes & Noble was permitted "to allow its customers from time to time to upload and download eBooks that were purchased by such customers from such eBook Store even if the eBook is no longer for sale.” App’x at 35 (emphasis added). As’ discussed above, there is no indication that Smashwords intended a more restrictive license for free samples distributed under its agreements with authors.

      . We express no opinion whether it would be copyright infringement if a customer had obtained a sample from Barnes & Noble for the first time after Mr. Smith cancelled the distribution agreement.