United States v. Demott

• Citation: 906 F.3d 231
• Decision Date: 09 October 2018
• Docket Number: August Term, 2018,Docket Nos. 13-3410,13-4283,14-178
• Parties: UNITED STATES of America, Appellee, v. Charles DEMOTT Jr., Rosario Gambuzza, and Ernest Snell, Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

906 F.3d 231

UNITED STATES of America, Appellee,

v.Charles DEMOTT Jr., Rosario Gambuzza, and Ernest Snell, Defendants-Appellants.^*

Docket Nos. 13-3410

13-4283

14-178

August Term, 2018

United States Court of Appeals, Second Circuit.

Argued: March 9, 2016

Decided: October 9, 2018

Steven D. Clymer (Carla B. Freedman, on the brief ) for Grant C. Jaquith, United States Attorney for the Northern District of New York, Syracuse, NY.

James Scott Porter, Seneca Falls, NY for Charles Demott, Jr.; Donald T. Kinsella, Albany, NY for Rosario Gambuzza; James P. Egan (James F. Greenwald, on the brief ), for Lisa A. Peebles, Office of the Federal Public Defender, Syracuse, NY, for Ernest Snell.

Before: LEVAL, POOLER, and WESLEY, Circuit Judges.

Judge Richard C. Wesley concurs in this opinion and in addition by separate opinion.

LEVAL, Circuit Judge:

Defendants Rosario Gambuzza, Ernest Snell, and Charles Demott, Jr. appeal from their convictions under a Second Superseding Indictment (the "Indictment") in the United States District Court for the Northern District of New York (Glenn T. Suddaby, J. ). All three were convicted under the Controlled Substance Analogue Enforcement Act of 1986 (the "Analogue Act" or the "Act"), 21 U.S.C. §§ 802(32)(A), 813, of conspiracy to deal in "controlled substance analogues." Demott pleaded guilty to Count 1, which charged conspiracy to distribute and to possess with intent to distribute a controlled substance analogue, reserving his right to challenge the constitutionality of the Analogue Act on appeal. Gambuzza and Snell were tried before a jury and convicted on Count 1, as well as on Count 2, which charged conspiracy to import a controlled substance analogue in violation of 21 U.S.C. §§ 813, 960(a)(1) and (b)(3), and 963, and, in Gambuzza's case, on 19 counts of money laundering, in violation of 18 U.S.C. §§ 1956(a)(2)(A) and 2(b).

Defendants' principal contentions are that the Analogue Act is unconstitutionally vague as applied to these charges; that the evidence at the trial was insufficient to support the convictions of Snell and Gambuzza for the drug offense; that the trial Defendants were prejudiced by improper jury instructions relating to the element of knowledge under the Analogue Act; and that Gambuzza's trial was prejudiced by the receipt of inadmissible hearsay evidence. We agree with the latter two contentions and therefore vacate the convictions of Gambuzza and Snell by reason of errors in the jury instructions and the receipt of prejudicial, inadmissible hearsay evidence. Otherwise, we reject Defendants' arguments. We therefore affirm Demott's conviction on his guilty plea and remand for retrial of Snell and Gambuzza.

BACKGROUND

The Indictment charged Defendants with conspiring in and around Syracuse, New York between January 2010 and April 2011 to import from China and deal in two "controlled substance analogues": 4-methylmethcathinone (known as "4-MMC" or "mephedrone") and 4-methyl-n-ethylcathinone (known as "4-MEC").¹ The term "controlled substance analogues" refers to substances that are similar to those listed as "controlled substances" in Schedule I or II of the CSA, 21 U.S.C. § 812. "Controlled substance analogues" are statutorily defined (as further discussed below) as substances that are "substantially similar" to Schedule I or II controlled substances—both in their chemical structure and in their actual, intended, or represented effect on the central nervous system (or "pharmacological effect"). See Id . § 802(32)(A).² Pursuant to § 813, "controlled substance analogue[s]," when intended for human consumption, are treated for the purposes of federal law as "controlled substance[s] in Schedule I" regulated by the CSA.

In the trial of Snell and Gambuzza, the evidence showed a scheme that originated with importations from China by co-conspirator Vincent Cizenski (who cooperated with the Government and testified against Snell and Gambuzza at trial). Cizenski had previously used MDMA (3,4-methylenedioxy-N-methamphetamine, also known as "Molly" or "ecstasy"), which is a controlled substance listed in Schedule I. In the course of searching the Internet for a similar drug, he came across a seller in China named Eric Chang (also known as Lei Zhang) who offered 4-MMC, a chemical compound that was not, at the time, listed in the schedules of the CSA.

Cizenski began to order 4-MMC from Chang and to sell the product to others, including another co-conspirator named William Harper, who also cooperated with the Government and testified at trial. Harper sold the drug to Gambuzza, and both Harper and Gambuzza subsequently ordered it directly from Chang. Snell and Demott both purchased the drug from Harper, with Snell at times giving Harper cocaine in exchange.

Chang initially sent the co-conspirators 4-MMC. He later began to fill their orders with 4-MEC instead. 4-MEC, like 4-MMC, was not listed in the CSA schedules at the time of the conspiracy. A controlled purchase from Harper for "Molly" in July 2010 was filled with 4-MMC. In contrast, controlled purchases from Harper in September and November 2010 were filled with 4-MEC. Similarly, packages shipped from Chang's company, CEC Limited, to Harper and Gambuzza in December 2010 were found, when seized by United States Customs and Border Protection ("Customs") at the border, to contain 4-MEC.

When placing orders with Chang, the co-conspirators (who paid with Western Union money orders) referred to 4-MMC as "Mp," signifying "mephedrone." Joint Appendix ("App.") 316-17. In shipping the substances, Chang deceptively labeled them as "metal corrosion inhibitor" or "camphanic acid." Id. at 320. He usually included invoices reflecting false prices. The conspirators, including Snell and Gambuzza, used coded language in communicating with each other about the substances. For example, on one intercepted phone call, Gambuzza asked Harper if he had any "extra tanning sessions." Id. at 378. Harper testified that this was code for 4-MMC. On another call, Harper told Gambuzza that the "stuff that we like is now officially illegal in China," referring again to the 4-MMC they received from Chang, which had recently been made illegal by Chinese law. Id. at 379.

On April 12, 2011, law enforcement officials executed search warrants at the residences of Snell and Gambuzza. At Snell's residence, they found plastic bags containing 4-MEC and cocaine in the kitchen cabinets and in a Klondike ice cream bar box in the freezer. They also found a digital scale, a Tupperware dish, and a measuring spoon. At Gambuzza's residence, they found a digital scale, small plastic baggies, a shipping receipt from CEC Limited, a receipt for a money transfer to CEC Limited, and a sender's copy of a FedEx Ground order form for a shipment addressed to a co-conspirator in California.

With respect to the status of 4-MMC and 4-MEC as controlled substance analogues, the government submitted expert testimony that both substances are substantially similar in chemical structure to methcathinone, which is listed in Schedule I, and that their pharmacological effect is substantially similar to that of methcathinone and MDMA, which is also listed in Schedule I.

In August 2011, a federal grand jury returned a six-count indictment naming Demott, Gambuzza, and Snell, as well as 19 others. In June 2012, that indictment was replaced with a two-count superseding indictment, which charged a conspiracy to distribute, to possess with intent to distribute, and to import a controlled substance analogue. All three Defendants moved to dismiss the superseding indictment on the ground that the Analogue Act is unconstitutionally vague. The district court denied the motions.

The Second Superseding Indictment (described above), under which Defendants were convicted, was filed in January 2013. Demott and Snell each renewed their motions to dismiss it. The district court again denied the motions. Demott then pleaded guilty pursuant to a written agreement, reserving his right to appeal the denial of his motion to dismiss. Snell and Gambuzza were tried before a jury and were convicted on all counts. All three now appeal.

DISCUSSION

I. Vagueness

All three Defendants assert on this appeal that the Analogue Act is unconstitutionally vague as applied to the facts of this case. Precedents establish that a statute is unconstitutionally vague if it fails to define the unlawful conduct with "sufficient definiteness that ordinary people can understand what conduct is prohibited," or if its vagueness makes the law unacceptably vulnerable to "arbitrary enforcement." See Kolender v. Lawson , 461 U.S. 352, 357-58, 103 S.Ct. 1855, 75 L.Ed.2d 903 (1983).

We recognize that making criminality depend on the "substantial similarity" of a substance to an expressly prohibited substance inevitably involves a degree of uncertainty. Accord United States v. Makkar , 810 F.3d 1139, 1143 (10th Cir. 2015) ("It's an open question, after all, what exactly it means for chemicals to have a 'substantially similar' chemical structure—or effect."). However, as the Supreme Court has recently explained, such "non-numeric," "qualitative standard[s]" abound in our law, and are not so inherently problematic as to independently render a statute void for vagueness. Sessions v. Dimaya , ––– U.S. ––––, 138 S.Ct. 1204, 1215, 200 L.Ed.2d 549 (2018) (internal quotation marks omitted). Further, the viability of Defendants' argument is substantially undercut by the fact that the Supreme Court, our court, and other circuits have upheld the Analogue Act against vagueness challenges.

In McFadden v. United States , the Supreme Court rejected a vagueness challenge to the Analogue Act, characterizing the statute as "unambiguous." ––– U.S. ––––, 135 S.Ct. 2298, 2307, 192 L.Ed.2d 260 (2015). This court, as well, has upheld the Analogue Act against similar vagueness challenges. See Roberts , 363 F.3d at 125-26 ; United States v. Ansaldi , 372 F.3d 118, 123-24 (2d Cir. 2004). Other circuits...