The appeals court found that just because the government did not mention any possibility of appealing the sentence during the plea agreement it doesn't mean that any waiver of the right to appeal was expressed or implied. The government had argued for the minimum sentence both during sentencing and in their sentencing memorandum, and noted that the judge lacked the discretion to give sentences less than the mandatory minimum.
Gee, I wonder when the Feds are going to indict the members of the district court who "illegally" sentenced them?
If they indicted every judge who had their decision overturned by an appeals court then half the judiciary would be locked up.
The appeals court must be full of psychics, since they imply they knew what was in the minds of the Federal attorneys at that time.