Opinion
CR. NO. S-03-0144 WBS.
September 14, 2005
MEMORANDUM RE: GROUPING OF COUNTS
At the sentencing hearing on September 14, 2005, this court found, as part of its sentencing determination, that counts 1 and 2 are appropriately grouped pursuant to United States Sentencing Guideline § 3D1.2. The purpose of this memorandum is to set forth the bases for that determination.
I. Relevant Facts
Defendant Roth has pleaded guilty to counts one and two of the indictment against her. The first count charges Roth with conspiracy to distribute and to possess with intent to distribute a controlled substance analogue to GHB in violation of 21 U.S.C. §§ 846, 813, 841(a)(1), and 841(b)(1)(C), and 18 U.S.C. § 2. The second count charges her with conspiracy to distribute a misbranded drug in violation of 21 U.S.C. §§ 331(a), 331(c), and 333(a)(2), and 18 U.S.C. §§ 2 and 371. Both counts involve defendant Roth's distribution of 1, 4 butanediol, an analogue to the schedule I controlled substance gammahydroxybutyric acid (GHB) within the meaning of 21 U.S.C. § 802(32)(A).
Any person who attempts or conspires to commit any offense defined in this subchapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy.21 U.S.C. § 846.
A controlled substance analogue shall, to the extent intended for human consumption, be treated, for the purposes of any Federal law as a controlled substance in schedule I.21 U.S.C. § 813.
Except as authorized by this subchapter, it shall be unlawful for any person knowingly or intentionally —
(1) to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance. . . .21 U.S.C. § 841(a).
In the case of a controlled substance in schedule I or II, or 1 gram of flunitrazepam, except as provided in subparagraphs (A), (B), and (D), such person shall be sentenced to a term of imprisonment of not more than 20 years and if death or serious bodily injury results from the use of such substance shall be sentenced to a term of imprisonment of not less than twenty years or more than life . . .21 U.S.C. § 841(b)(1)(C).
(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces, or procures its commission, is punishable as a principal.
(b) Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal.18 U.S.C. § 2.
The following acts and the causing thereof are prohibited:
(a) The introduction or delivery for introduction into interstate commerce of any food, drug, device, or cosmetic that is adulterated or misbranded.
. . .
(c) The receipt in interstate commerce of any food, drug, device, or cosmetic that is adulterated or misbranded, and the delivery or proffered delivery thereof for pay or otherwise.21 U.S.C. § 331.
Notwithstanding the provisions of paragraph (1), if any person commits such a violation after a conviction of him under this section has become final, or commits such a violation with the intent to defraud or mislead, such person shall be imprisoned for not more than three years or fined not more than $10,000, or both.21 U.S.C. § 333(a)(2).
If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.
If, however, the offense, the commission of which is the object of the conspiracy, is a misdemeanor only, the punishment for such conspiracy shall not exceed the maximum punishment provided for such misdemeanor.18 U.S.C. § 371.
Roth's co-defendant Shawn Gelegan purchased 1, 4 butanediol from "Miracle Cleaning Products" in Festus, Missouri. Gelegan repackaged the drug as "JetClean," and sold it to individuals through his website. (Plea Agreement App. A (Factual Basis) at 1-2). Roth, as Gelegan's live-in girlfriend, knowingly participated in this scheme. She repackaged and labeled the 1, 4 butanediol as "JetClean." (Id. at 2). She was aware that the drug was intended for human consumption. (Id.). She received, through her personal Paypal account, over $8,000 for the sale of at least 652 ounces of 1, 4 butanediol. (Id. at 3).
The appendix to the plea agreement states that the labeling of "JetClean" as a purported ink jet cleaner, when it was already intended for human consumption, was "intentionally designed to defraud and/or mislead the government." (Id. at 4). Thus, the victim of the mislabeling was the United States government.
II. Discussion
Defendant Roth argues that counts one and two should be grouped pursuant to United States Sentencing Guideline ("U.S.S.G.") § 3D1.2. Section 3D1.2's main requirement is that the counts "involv[e] substantially the same harm."
All counts involving substantially the same harm shall be grouped together into a single Group. Counts involve substantially the same harm within the meaning of this rule:
(a) When counts involve the same victim and the same act or transaction.
(b) When counts involve the same victim and two or more acts or transactions connected by a common criminal objective or constituting part of a common scheme or plan.
(c) When one of the counts embodies conduct that is treated as a specific offense characteristic in, or other adjustment to, the guideline applicable to another of the counts.
(d) When the offense level is determined largely on the basis of the total amount of harm or loss, the quantity of a substance involved, or some other measure of aggregate harm, or if the offense behavior is ongoing or continuous in nature and the offense guideline is written to cover such behavior.
U.S.S.G. § 3D1.2.
Subsection (b) to U.S.S.G. § 3D1.2 is the subsection most applicable to these facts. Subsection (b) requires that the counts: (1) involve the same victim; and (2) are connected by a common criminal objective or constitute a common scheme or plan. Subsection (b) does not require that the offenses charged consist of the same elements for them to be grouped. United States v. Riviere, 924 F.2d 1289, 1306 (3d Cir. 1991) ("The guidelines anticipate that offenses requiring proof of different elements will be grouped."); U.S.S.G. § 3D1.2, application Note 4("Subsection (b) provides that counts that are part of a single course of conduct with a single criminal objective and represent essentially one composite harm to the same victim are to be grouped together, even if they constitute legally distinct offenses occurring at different times.") (emphasis added). Subsection (a) is not the best fit because misbranding requires a physical act — putting the drugs into containers without the required information — that is not an element of the distribution of drugs count and could be performed at a time separate from the time defendant delivered the drugs. Thus, it would be inaccurate to say that these counts involve "the same act or transaction."See U.S.S.G. § 3D1.2(a). The misbranding of drugs is not "a specific offense characteristic in, or other adjustment to, the guideline applicable to" the drug distribution count. See U.S.S.G. § 3D1.2(c). Because the harm done by the conduct charged in the two counts is measured in different ways (weight and value), subsection (d) to U.S.S.G. § 3D1.2 does not apply. See United States v. Syrax, 235 F.3d 422, 424 (9th Cir. 2000) ("[G]rouping under section 3D1.2(d) is not appropriate when the guidelines measure harm differently.") (quotation marks and citation omitted).
Defendant points out that "Count II is enhanced pursuant to 2B1.1(b)(2) because of the dollar amount received for the [drug]" and "Count I [is] . . . assigned an offense level based on the weight of the substance." "Given that the dollar value is directly proportional to the weight or amount of the substance sold," defendant concludes, "these are really two ways of measuring the exact same thing." (Def.'s Supp. Mem. at 8-9). However, this reading is outside the heartland of § 3D1.2(c), which requires that "one of the counts embodies conduct that is treated as a specific offense characteristic in or other adjustment to, the guideline applicable to another of the counts." Misbranding a drug is not a specific offense characteristic or other adjustment to the guideline applicable to distributing that drug.
The first question under U.S.S.G. § 3D1.2(b) is whether the two counts involve crimes against the same victim. The victim of a violation of 21 U.S.C. § 841(a) is society at large. "The societal interest directly threatened by violations of drugs laws such as 21 U.S.C. § 841(a)(1) . . . is the interest in drug abuse prevention." United States v. Nanthanseng, 221 F.3d 1082, 1084 (9th Cir. 2000). The victim of the crime of misbranding drugs may be either an individual consumer or the government. "Federal agencies may be the victims of fraud in counterfeiting and misbranding drugs. . . . There is no meaningful distinction between the government as victim and individual consumer victims;Bradshaw held that it is possible for either or both to be defrauded." United States v. Cambra, 933 F.2d 752, 756 (9th Cir. 1991) (citing United States v. Bradshaw, 840 F.2d 871 (11th Cir. 1988)). Society at large has an interest in effective law enforcement by the government. United States v. Kim, 105 F.3d 1579, 1582 (9th Cir. 1997).
In Bradshaw, the defendant, like the defendant here, was convicted of the distribution of misbranded substances with the intent to defraud or mislead in violation of 21 U.S.C. §§ 331 and 333. 840 F.2d at 872. Bradshaw was in the business of selling steroids wholesale. Id. at 873. He misbranded his packages as "Herbalife products" to avoid detection. Id. The buyers to whom he sold the drugs knew they were steroids, and therefore, defendant argued, he had not intended to defraud anybody. Id. The court rejected defendant's argument, holding that "[w]hen Bradshaw misled the governmental agencies, thereby frustrating their efforts to protect the public, he indirectly misled and defrauded the public. Thus, Bradshaw's actions fell squarely within the congressional purpose." Id. at 874.
In this case, defendant Roth mislabeled the 1, 4 butanediol to evade detection by law enforcement.
Roth and [co-defendant] Gelegan took a number of affirmative steps which were intentionally designed to defraud and/or mislead the government. Among the many steps that Roth and Gelegan took to conceal their activity from law enforcement and from the Federal Drug Administration ("FDA"), was: . . . the labeling of "Jet Clean" as a purported ink jet cleaner when it was always intended for human consumption.
(Plea Agreement App. A (Factual Basis) at 4; see also Pl.'s Am. Response to Def.'s Sentencing Mem. at 14 ("the defendants endeavored to avoid detection by the `drug' provisions of the FDA by labeling the substance which they distributed as `ink jet cleaner.'"); id. at 9 ("The fact that defendant conspired with her co-defendant [to] . . . put false information on the bottles of the GHB analogue which they referred to as `Jet Clean' a purported `inkjet cleaner' show that it was her affirmative intent to conceal activity from the FDA."). Therefore, the victim of defendant's misbranding was society at large, since society at large has an interest in effective law enforcement. See Kim, 105 F.3d at 1582. The government now argues that, given the context of the sale through the anabolicextreme.com website, a site dedicated to body building, the victims of the misbranding were Roth's and Gelegan's customers. "[T]he consumers of this product ostensibly ingested the product believing that it would enhance their physical performance." (Pl.'s Am. Response to Def.'s Sentencing Mem. at 13-14). However, if defendant's customers had such a belief, it was not due to defendant's misbranding the drug. Defendant misbranded the drugs as "ink jet cleaner," not as a steroid or performance enhancer. Further, while it is true that the consumers of the product did not have documents indicating the proper dosage, possible side effects and other dangers associated with 1, 4 butanediol, the same could be said of consumers of any other street drug. A purchaser of cocaine or heroin also does not have that valuable information. Yet it would be extremely unusual, for example, to charge a defendant with the misbranding of heroin in addition to the sale of heroin. The point is that the main impetus behind the misbranding count seems to be to specifically and generally deter criminal deception of the FDA and law enforcement effected by misbranding an illegal controlled substance as a legal cleaning solvent.
"`Where society at large is the victim,' the sentencing court must go on to determine whether `the societal interests that are harmed are closely related.'" Nathanseng, 221 F.3d at 1084 (quoting U.S.S.G. § 3D1.2 application note 2). There does not seem to be any case addressing the grouping of misbranding and drug distribution counts. The case most on point is United States v. Lopez, 104 F.3d 1149 (9th Cir. 1997). In that case, the defendant was convicted of money laundering and conspiracy to distribute marijuana and cocaine. Id. at 1150. The issue before the appellate court was whether those counts should be grouped for purposes of sentencing. The court first noted that "[v]ictimless crimes, such as those involved here, are treated as involving the same victim when the societal interests that are harmed are closely related." Id. The court held that "[t]he societal interests harmed by money laundering and drug trafficking are closely related . . . Lopez laundered money to conceal the conspiracy's drug trafficking and thus facilitated the accomplishment of the conspiracy's ultimate objective of obtaining the financial benefits of drug trafficking." Id. at 1150-51.
. . . For offenses in which there are no identifiable victims (e.g., drug or immigration offenses, where society at large is the victim), the "victim" for purposes of subsections (a) and (b) is the societal interest that is harmed. In such cases, the counts are grouped together when the societal interests that are harmed are closely related. . . . Ambiguities should be resolved in accordance with the purpose of this section as stated in the lead paragraph, i.e., to identify and group "counts involving substantially the same harm."
U.S.S.G. § 3D1.2, application note 2.
Similarly, in this case, Roth misbranded drugs to conceal the conspiracy's drug trafficking and thus facilitated the accomplishment of the conspiracy's ultimate objective of obtaining the financial benefits of drug trafficking. Therefore, the counts should be grouped. This conclusion is bolstered by application notes 2 and 4 to U.S.S.G. § 3D1.2. Example (3) in application note 4 provides: "The defendant is convicted of one count of auto theft and one count of altering the vehicle identification number of the car he stole. The counts are to be grouped together." The alteration of the vehicle identification number is presumably performed to evade law enforcement, although technically the victim of the alteration of a VIN is probably the same as the victim of the theft itself given the example's inclusion in application note 4. See 18 U.S.C. § 511 (providing as one of its elements that the alteration of the VIN be performed "with intent to further the theft of a motor vehicle"). An example given in application Note 2 to U.S.S.G. § 3D1.2 is also analogous: "Where one count, for example, involves unlawfully entering the United States and the other involves possession of fraudulent evidence of citizenship, the counts are grouped together because the societal interests harmed . . . are closely related." An illegal immigrant presumably possesses fraudulent papers to assist him in evading law enforcement and achieving his ultimate goal of unlawful entry. Analogous to the examples given in application Notes 2 and 4 are the facts here: defendants Roth and Gelegan mislabeled the 1, 4 butanediol as a cleaning substance to avoid detection for as long as possible so as to facilitate achievement of the ultimate goal of making money from the sale of the drug.
The government argues that United States v. Barron-Rivera controls this case. See 922 F.2d 549 (9th Cir. 1991). It does not. In that case, Barron-Rivera was found guilty of (1) being an alien unlawfully in the United States after deportation; (2) being an illegal alien in possession of a firearm; and (3) being a felon in possession of a firearm. Id. at 551. The district court grouped Barron-Rivera's two firearm possession convictions into one offense group, and treated the conviction for being an illegal alien after deportation as a separate offense category.Id. at 554. Barron-Rivera argued that all three counts should have been grouped. The appellate panel disagreed, finding that the result of Barron-Rivera's bootstrapping theory would be to "combine two dissimilar offenses: being an illegal alien in the United States after deportation and being a felon in possession of a firearm." Id. Unlike Lopez and the present case, it cannot be said that Barron-Rivera's possession of a firearm somehow helped him to evade detection as an illegal immigrant. Therefore, Lopez offers better guidance.
The appellate court did not disturb the grouping of the firearms convictions.
Further, the similarity of the offenses in this case — the sale and misbranding of an illegal drug, both of which offenses are completed upon distribution to customers — provides another reason why Barron-Rivera is not the precedent to which the court should look. Compare 21 U.S.C. § 331 (crime consummated upon delivery of misbranded drug into interstate commerce) with 21 U.S.C. § 841(a) (crime consummated upon distribution of controlled substance). The defendant adds: "Had the defendant sold 1, 4 butanediol only for the purpose of cleaning industrial equipment, her actions would not have violated either of the statutes in Count I and Count II." (Def.'s Supp. Brief at 7). Thus, there is a symmetry of intent requirements for Counts I and II.
For the foregoing reasons, the court determined that counts 1 and 2 of the indictment are properly grouped pursuant to United States Sentencing Guideline § 3D1.2.