United States v. Carlson

• Citation: 810 F.3d 544
• Decision Date: 14 January 2016
• Docket Number: 14–2987,14–3242.,Nos. 14–2986,s. 14–2986
• Parties: UNITED STATES of America, Plaintiff–Appellee v. James Robert CARLSON, Defendant–Appellant. United States of America, Plaintiff–Appellee v. Lava Marie Haugen, Defendant–Appellant. United States of America, Plaintiff–Appellee v. Joseph James Gellerman, Defendant–Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

810 F.3d 544

UNITED STATES of America, Plaintiff–Appellee

v.James Robert CARLSON, Defendant–Appellant.

United States of America, Plaintiff–Appellee

v.Lava Marie Haugen, Defendant–Appellant.

United States of America, Plaintiff–Appellee

v.Joseph James Gellerman, Defendant–Appellant.

Nos. 14–2986

14–2987

14–3242.

United States Court of Appeals, Eighth Circuit.

Submitted: Oct. 19, 2015.

Filed: Jan. 14, 2016.

Rehearing and Rehearing En Banc Denied March 10, 2016.

Mark D. Nyvold, argued and on the brief, Fridley, MN, for appellant James Robert Carlson.

John J.E. Markham, II, argued and on the brief, Boston, MA, for appellant Lava Marie Haugen.

Charles L. Hawkins, argued and on the brief, Minneapolis, MN, for appellant Josephy James Gellerman.

Surya Saxena, AUSA, argued and on the brief, Minneapolis, MN, for appellee.

Before LOKEN, MURPHY, and COLLOTON, Circuit Judges.

MURPHY, Circuit Judge.

Defendants James Carlson, Lava Haugen, and Joseph Gellerman were charged with violating provisions of the Food Drug and Cosmetic Act (FDCA), the Controlled Substances Act (CSA), and the Controlled Substance Analogue Enforcement Act of 1986 (Analogue Act) for selling misbranded synthetic drugs at a head shop in Duluth, Minnesota. The jury found the defendants guilty on several counts. The district court¹ rejected defense challenges to the constitutionality of the Analogue Act, to the sufficiency of evidence, and to jury instructions. The defendants now appeal from their convictions and their sentences. We affirm.

I.

Carlson was the owner and operator of the Last Place on Earth (Last Place), a head shop in Duluth, Minnesota which sold synthetic drugs from 2010 until 2012. Both Haugen, Carlson's domestic partner, and Carlson's son Gellerman worked at the shop. As store clerks, Gellerman and Haugen received shipments of misbranded synthetic drugs from Last Place suppliers and sold such products to customers. Haugen also weighed and bagged synthetic drugs, helped order them from suppliers, and took inventory. Although the drugs were labeled "not for human consumption," store employees knew that customers purchased them to consume as drugs.

From August 10, 2011 through September 21, 2012, law enforcement obtained 75 synthetic drug products from Last Place through controlled purchases and search warrants. One purchase included a product containing a trace amount of the controlled substance JWH–018, a synthetic cannabinoid. The government charged the defendants with violating the FDCA, the CSA, and the Analogue Act. Among the charges were allegations that the defendants sold products containing six analogues: (1) AM–2201, (2) UR–144, (3) XLR–11, (4) 5–MeO–DALT, (5) MPPP, and (6) 4–FA. Carlson was also charged with money laundering.

The witnesses at trial included law enforcement officers, former Last Place employees, and individuals who had supplied, manufactured, and used its synthetic drugs. Former employee Sherry Anderson testified that she and Haugen prepared order forms for Carlson who ordered drugs by telephoning suppliers in the presence of her or Haugen. Anderson also testified that once the government scheduled a substance, Carlson would move drugs containing that substance into the basement of the store and later sell those products "under the counter" to trustworthy customers.

The parties also presented testimony from dueling experts about the chemistry of the substances. The defense experts testified that the substances sold by the defendants were not structurally similar to controlled substances even though they had similar pharmacological effects. Government expert Dr. Terrance Boos, acting section chief of the Drug and Chemical Evaluation Section of the DEA, testified that the chemical structures of analogues sold at Last Place were substantially similar to those of controlled substances. This conclusion was based on visual inspections, scientific literature, and discussions with colleagues about the chemical structures of the products. Dr. Boos reported that no objective scientific consensus exists for determining "substantial similarity" between two different chemical structures. He also conceded that his opinion was not subject to peer review outside the DEA and did not have a known rate of error.

The jury was instructed that in order to find a defendant guilty of violating the Analogue Act the prosecution must have proven that the defendant knew that the substance at issue was a controlled substance analogue. That required proof beyond a reasonable doubt that (1) the defendant knew that the substance had a chemical structure that was substantially similar to a controlled substance in Schedule I or II of the CSA, and (2) the defendant knew that the substance either actually had, or the defendant represented or intended it to have, an effect on the central nervous system that is substantially similar to or greater than a controlled substance in Schedule I or II of the CSA. The district court also instructed the jury, "if you find the government has proved beyond a reasonable doubt that the defendant knew facts that satisfy part 2 of the test above, that is evidence from which you may, but are not required to, find or infer that the defendant knew facts that satisfy part 1 of the test above."

The jury found Carlson guilty of conspiracy to violate the FDCA, nine felony violations of the FDCA, eight misdemeanor violations of the FDCA, one violation of the CSA, conspiracy to violate the Analogue Act, nine violations of the Analogue Act, and twenty three money laundering violations under 18 U.S.C. § 1957. In calculating Carlson's guideline sentence, the district court used a 1:167 tetrahydrocannabinol ("THC") to marijuana conversion ratio and a two level firearm enhancement, resulting in a sentence of 210 months. Haugen was found guilty of conspiracy to violate the FDCA, two felony violations of the FDCA, and conspiracy to violate the Analogue Act. She received a 60 month sentence. Gellerman was convicted of two misdemeanor violations of the FDCA and was sentenced to three years probation.

II.

A.

Carlson and Haugen both appeal their Analogue Act convictions. Under that statute it is unlawful knowingly or intentionally to manufacture, distribute, or dispense a controlled substance analogue. See 21 U.S.C. §§ 813, 841. A controlled substance analogue is defined as a substance:

(i) the chemical structure of which is substantially similar to the chemical structure of a controlled substance in schedule I or II; (ii) which has a stimulant, depressant, or hallucinogenic effect on the central nervous system that is substantially similar to or greater than the ... effect on the central nervous system of a controlled substance in schedule I or II; or (iii) with respect to a particular person, which person represents or intends to have a stimulant, depressant, or hallucinogenic effect on the central nervous system that is substantially similar to or greater than the ... effect on the central nervous system of a controlled substance in schedule I or II.

21 U.S.C. § 802(32)(A).

The Supreme Court has explained that the government may prove a defendant knowingly distributed a controlled substance analogue in violation of the Analogue Act in two ways. See McFadden v. U.S., ––– U.S. ––––, 135 S.Ct. 2298, 2305, 192 L.Ed.2d 260 (2015). First, the government may demonstrate that the "defendant knew that the substance with which he was dealing [was] some controlled substance—that is, one actually listed on the federal drug schedules or treated as such by operation of the Analogue Act—regardless of whether he knew the particular identity of the substance." Id. Alternatively, the government may satisfy a two part test to prove that the defendant knew that the analogue he was dealing with (1) had a chemical structure that was substantially similar to a controlled substance, and (2) had similar effects to a controlled substance or the defendant represented or intended it to have those effects. See id.

Carlson contends that the Analogue Act is unconstitutional because it does not provide notice of which acts are criminal and permits arbitrary enforcement contrary to the Due Process Clause. "We review a challenge to the constitutionality of a federal statute de novo." United States v. Stephens, 594 F.3d 1033, 1036–37 (8th Cir.2010) (internal quotation marks omitted). The Supreme Court recently determined in McFadden v. United States that the Analogue Act is not unconstitutionally vague because the statute's "knowingly or intentionally" scienter requirementalleviates vagueness concerns by "narrow[ing] the scope of its prohibition, and limit[ing] prosecutorial discretion." ––– U.S. ––––, 135 S.Ct. 2298, 2307, 192 L.Ed.2d 260 (2015). Carlson's constitutional challenge thus fails.

B.

Carlson and Haugen additionally argue that the district court failed to instruct the jury properly about the necessary elements for an Analogue Act conviction. Although jury instructions are regularly reviewed for abuse of discretion, if as here statutory interpretation is required, "it is an issue of law that we consider de novo." United States v. Petrovic, 701 F.3d 849, 858 (8th Cir.2012). "If we conclude that the district court's interpretation of the statute resulted in the omission of a required element of the offense, we then apply harmless error review." Preston v. United States, 312 F.3d 959, 960 (8th Cir.2002).

Carlson and Haugen argue that the district court erred by improperly instructing the jury about the two part test to prove a knowing violation of the Analogue Act. The court instructed the jury that if "the government has proved beyond a reasonable doubt that the defendant knew facts that satisfy part 2 of the test above [similar nervous system effects], that is evidence from which you may, but are not required to, find or infer that the defendant knew facts that satisfy part 1 of the test above [similar chemical structure]." The parties refer to this permissive inference as a "Turcotte in...