(B)  Three Factors Determine Whether a Conviction is a Felony.  There are three factors that can contribute to the conclusion that a conviction is a felony conviction: (1) whether the convicting jurisdiction labels the conviction a felony or misdemeanor; (2) the maximum sentence to custody possible for the conviction under the law of the convicting jurisdiction; and (3) the level of the offense if it had been prosecuted in federal court (“hypothetical federal prosecution test”).  See § 3.57, supra.

BIA

AGGRAVATED FELONY - DRUG TRAFFICKING - SMALL QUANTITY
Matter of Aruna, 24 I.& N. Dec. 452 (BIA 2008) (Maryland misdemeanor conviction for violation of Maryland Criminal Law 5-602, distribution of a controlled substance, is an drug trafficking aggravated felony because the offense would be a felony if prosecuted under federal law; 21 U.S.C. 841(b)(4), which treats distribution of a small amount of marijuana without remuneration as a misdemeanor is not a separate federal offense, but rather a "mitigating exception" to the federal felony offense; therefore the categorical analysis is inapplicable to that section).

NOTE: A good example of outcome-based legal reasoning (and the BIA trying to have its cake and eat it too), this case may actually have some positive effect in fighting against Matter of Babaisakov, and other BIA attempts to avoid the categorical analysis. The BIA in this case pushes the "elements" vs. "facts" distinction very hard, providing language counsel can use in other cases.

First Circuit

AGGRAVATED FELONY - DRUG TRAFFICKING - STATE MISDEMEANOR CONVICTION OF POSSESSION OF CONTROLLED SUBSTANCES WITH INTENT TO DISTRIBUTE HELD AN AGGRAVATED FELONY BECAUSE IT WOULD HAVE BEEN A FELONY IF PROSECUTED IN FEDERAL COURT
Berhe v. Gonzales, ___ F.3d ___, 2006 WL 2729689 (1st Cir. Sept. 26, 2006) (to determine whether a state drug offense is an aggravated felony under INA 101(a)(43)(B), 8 U.S.C. 1101(a)(43)(B), the court examines whether the underlying offense would have been punishable as a felony if it had been prosecuted under federal law, and is not bound by the fact that the conviction is a misdemeanor under state law).

Third Circuit

AGGRAVATED FELONY " DRUG TRAFFICKING " ILLICIT TRAFFICKING TEST " FELONY REQUIRED
Thomas v. Attorney General of U.S., 625 F.3d 134 (3d Cir. Oct. 26, 2010) (Because Thomas's convictions were misdemeanors under New York Penal Law, see N.Y. Penal Law 221.40, those convictions cannot, by definition, be aggravated felonies pursuant to the illicit trafficking route.)

Ninth Circuit

AGGRAVATED FELONY " DRUG TRAFFICKING " COCAINE BASE
United States v. Baptist, __ F.3d __, 2011 WL 2150993 (9th Cir. Jun. 2, 2011) (Fair Sentencing Act of 2010, reducing 100-1 disparity in sentencing for crack cocaine, is not retroactive).