Desimone v. State, 24971

• Decision Date: 04 October 1995
• Docket Number: No. 24971,24971
• Citation: 111 Nev. 1221,904 P.2d 1
• Parties: Corky DESIMONE, Appellant, v. The STATE of Nevada, Respondent.
• Court: Nevada Supreme Court

Page 1

904 P.2d 1

111 Nev. 1221

Corky DESIMONE, Appellant, v. The STATE of Nevada, Respondent.

No. 24971.

Supreme Court of Nevada.

Oct. 4, 1995.

Michael R. Specchio, Public Defender, and John Reese Petty, Deputy Public Defender, Washoe County, for Appellant.

Frankie Sue Del Papa, Attorney General, Carson City; Richard A. Gammick, District Attorney, and Gary H. Hatlestad, Deputy District Attorney, Washoe County, for Respondent.

OPINION

YOUNG, Justice

Appellant Corky Desimone ("Desimone") was arrested for possession and sale of methamphetamine. Desimone was assessed a tax and penalties in the amount of $166,000 pursuant to NRS chapter 372A for illegal possession of a controlled substance. The State reduced this amount to judgment. Desimone was then convicted in a bench trial of one count of possession of a trafficking quantity of a controlled substance. Desimone appeals his conviction, presenting two arguments: (1) the district court erred in convicting him, because the criminal conviction is a second punishment barred by the Double Jeopardy Clause; and (2) in the alternative, the case must be remanded for a hearing to determine whether the taxes and penalties imposed by the State pursuant to NRS chapter 372A constitute punishment sufficient to implicate the Double Jeopardy Clause. For the reasons discussed herein, we reverse Desimone's conviction, but conclude that remand is unnecessary.

FACTS

On August 1, 1992, shortly after Desimone was released from prison in California, undercover officers arrested Desimone after he provided three ounces of methamphetamine in exchange for what Desimone believed to be stolen property. Desimone was charged with five violations of NRS chapter 458, all involving the possession and sale of methamphetamine. On January 28, 1993, the Nevada Department of Taxation ("the Department") filed a claim against Desimone in the amount of $166,000 in unpaid taxes and civil penalties pursuant to NRS chapter 372A, entitled "Tax on Controlled Substances." This statute forbids a person to "sell, offer to sell or possess with the intent to sell a controlled substance" unless he registers with the Department and pays a tax on that controlled substance. NRS 372A.070. The term "sell" is defined broadly to include "exchange, barter, solicitation or receipt of an order, transfer to another for sale or resale, possession or transportation in contravention of this chapter and any other transfer for any consideration or a promise, obtained directly or indirectly." NRS 372A.040. The tax does not apply "to any person who is registered or exempt from registration pursuant to NRS 453.226 or any other person who is lawfully in possession of a controlled substance." NRS 372A.060. Those exempt from the provisions of the statute include the ultimate user in possession of a controlled substance pursuant to a lawful order of a physician, in addition to manufacturers, distributors, and dispensers of those controlled substances. NRS 453.226. On May 20, 1993, the district court entered judgment against Desimone in favor of the Department for the entire amount of $166,000.

On September 22, 1993, Desimone was convicted of one count of possession of a trafficking quantity of a controlled substance. He was sentenced to fifteen years imprisonment and fined $100,000. Desimone appealed, claiming that the criminal conviction constituted a second punishment in violation of the Double Jeopardy Clause of the United States and Nevada Constitutions.

DISCUSSION

The Double Jeopardy Clause of the Fifth Amendment to the United States Constitution provides that no person shall be "subject for the same offense to be twice put in jeopardy of life or limb." U.S. Const. amend V. ¹ This protection is afforded the citizens of Nevada through the Fourteenth Amendment and the Nevada Constitution itself. See Nev. Const. art. I, § 8. The Double Jeopardy Clause protects against three abuses: (1) a second prosecution for the same offense after acquittal, (2) a second prosecution for the same offense after conviction, and (3) multiple punishments for the same offense. United States v. Halper, 490 U.S. 435, 440, 109 S.Ct. 1892, 1897, 104 L.Ed.2d 487 (1989). The third abuse is at issue in this case, an abuse which "can be identified only by assessing the character of the actual sanctions imposed on the individual by the machinery of the state." Id. at 447, 109 S.Ct. at 1901. ² Considering this admonition, we must determine whether taxes and penalties imposed on, but not paid by, Desimone under NRS chapter 372A for possession of methamphetamine constitute "punishment."

Whether a tax levied pursuant to NRS 372A constitutes a penalty for purposes of double jeopardy analysis

A civil penalty is considered "punishment" for double jeopardy purposes when that penalty does not solely "serve a remedial purpose, but rather can only be explained as also serving either retributive or deterrent purposes." Halper, 490 U.S. at 448, 109 S.Ct. at 1901; accord Austin v. United States, 509 U.S. 602, ----, 113 S.Ct. 2801, 2806, 125 L.Ed.2d 488 (1993) (holding that forfeiture is a punishment if it does not serve solely remedial purposes). It is these "purposes actually served by the sanction in question ... that must be evaluated." Halper, 490 U.S. at 447, n. 7, 109 S.Ct. at 1901, n. 7 (emphasis added).

Whether a tax constitutes a punishment, triggering protections of the Double Jeopardy Clause, was recently answered by the United States Supreme Court in Dep't of Revenue of Montana v. Kurth Ranch, 511 U.S. 767, 114 S.Ct. 1937, 128 L.Ed.2d 767 (1994). There, the Court concluded that a tax on the possession of illegal drugs assessed after the State of Montana imposed a criminal penalty for the same offense constituted double jeopardy. Id. at ----, 114 S.Ct. at 1948. In Kurth Ranch, a family of Montana farmers supplemented its income by cultivating a significant marijuana crop. Id. at ----, 114 S.Ct. at 1942. Montana law enforcement officers raided the farm, prosecuted family members, and then attempted to collect a state tax imposed for possession and storage of dangerous drugs. Id. at ----, 114 S.Ct. at 1941-43. The tax totalled $181,000, a figure arrived at by placing a $100-an-ounce tax on 1,811 ounces of marijuana harvested by the farmers. Id. The farmers declared bankruptcy, and the state's claim for the tax was denied by the bankruptcy court on double jeopardy grounds. Id. The bankruptcy court's decision was affirmed by the district court, the United States Court of Appeals for the Ninth Circuit, and finally by the United States Supreme Court. Id. at ----, 114 S.Ct. at 1943-44.

The Court concluded that a tax is not immune from double jeopardy scrutiny, id. at ----, 114 S.Ct. at 1946, even though in most cases a state may legitimately tax criminal activity. See Marchetti v. United States, 390 U.S. 39, 44, 88 S.Ct. 697, 700, 19 L.Ed.2d 889 (1968). Rather than focus on whether a state purpose was accomplished by enforcement (i.e., actual payment of a fine), the Court in Kurth Ranch considered the underlying motivation of the state tax statute to determine the "purposes actually served" by the State's enforcement action. The Court considered the following factors in concluding that the Montana tax was primarily designed to punish rather than to raise revenue: (1) the high rate of taxation--eight times the street value of the confiscated marijuana; (2) the deterrent purpose, based on the use of tax revenues for anti-crime initiatives; (3) the requirement that the tax be imposed solely upon criminal activity, such as illegal marijuana growing; and (4) the imposition of the tax upon goods which were neither owned nor possessed by the debtor. Kurth Ranch, 511 U.S. at ----, 114 S.Ct. at 1946-48. The Court concluded that these factors, taken as a whole, indicated that the drug tax was "too far-removed in crucial respects from a standard tax assessment to escape characterization as punishment for the purpose of Double Jeopardy analysis." Id. at ----, 114 S.Ct. at 1948.

As Kurth Ranch makes clear, the crucial inquiry in determining whether jeopardy attaches to tax statutes probes the state's intentions. Kurth Ranch identified characteristics of the state's enactment and prosecution of the tax statute to test objectively if the state intended punishment. Whether actual punishment occurred in each individual case was not part of the inquiry. A requirement of actual punishment would require a factual review after every prosecution to reveal what, if any, payment a defendant has made toward the fine. Further, a determination must be made of how great partial payment must be for jeopardy to attach. This approach could only lead to a greater number of appeals and the absurd result of defendants frustrating future criminal prosecution by paying a minimum amount pursuant to tax statute liability. Kurth Ranch wisely refrained from adding actual punishment to the jeopardy formula, and we consider that guidance sound.

NRS chapter 372A exhibits the same punitive aspects as the Montana illegal drug tax. First, the Nevada law imposes a $1,000 per-gram fee for methamphetamine (and a $100 per-gram fee for marijuana). See NRS 372A.070. This amount far exceeds the high rate of taxation condemned in Kurth Ranch. See NRS 372A.070.

Second, potential tax proceeds are earmarked to pay for anti-crime measures, as were the proceeds of the tax analyzed in Kurth Ranch. See NRS 372A.110.

Third, the tax is designed to punish criminal activity. As Desimone points out, pharmaceutical companies, pharmacists, and medical practitioners are exempt from the tax. See NRS 453.226. Thus, although criminal activity is not strictly required before the tax is imposed, the non-criminal possession and sale of controlled substances by legitimate manufacturers, distributors, and ultimate users fall outside the scope of the tax. See NRS 372A.060(1). In fact, legislators contemplating initial passage of...