U.S. v. Davis

• Decision Date: 19 December 1985
• Docket Number: 84-2100,Nos. 84-2099,s. 84-2099
• Parties: 19 Fed. R. Evid. Serv. 1224 UNITED STATES of America, Plaintiff-Appellee, v. Dearld Gene DAVIS, a/k/a "Doc" Davis, and Phillip Martin McFarland, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 838

780 F.2d 838

19 Fed. R. Evid. Serv. 1224

UNITED STATES of America, Plaintiff-Appellee, v. Dearld Gene DAVIS, a/k/a "Doc" Davis, and Phillip Martin McFarland, Defendants-Appellants.

Nos. 84-2099, 84-2100.

United States Court of Appeals Tenth Circuit.

Dec. 19, 1985.

Warren Gotcher of Gotcher, Brown & Bland, McAlester, Okl., for defendant-appellant Dearld Gene Davis.

Ernest A. Bedford of Ernest A. Bedford, Inc., Tulsa, Okl., for defendant-appellant Phillip Martin McFarland.

Keith A. Ward, Asst. U.S. Atty. (Layn R. Phillips, U.S. Atty. with him on brief), Tulsa, Okl., for plaintiff-appellee.

Before LOGAN and MOORE, Circuit Judges, and BALDOCK, District Judge ^*

JOHN P. MOORE, Circuit Judge.

Defendants-appellants, Dearld Gene "Doc" Davis and Phillip Martin McFarland, were indicted on charges of: (1) conspiracy to manufacture methamphetamine in violation of 21 U.S.C. Secs. 841(a)(1) and 846; and (2) traveling interstate with the intent to promote, manage, establish, and carry out a conspiracy to manufacture methamphetamine in violation of the Travel Act, 18 U.S.C. Sec. 1952(a)(3). After a joint jury trial, the defendants were convicted on both counts. Davis was sentenced to concurrent terms of three years on each of the two counts, and McFarland received concurrent terms of two and one-half years for each count. Defendants seek reversal of their convictions, raising these issues in their consolidated appeal: (1) the evidence was insufficient to establish a violation of 18 U.S.C. Sec. 1952(a)(3); (2) the defendants' Fifth Amendment rights were violated by a government agent's comments during grand jury testimony; (3) tape recordings of telephone conversations were admitted as evidence against the defendants in violation of 18 U.S.C. Secs. 2515 and 2517(5); and (4) a tape recording introduced by the government should have been excluded due to the presence of unexplained inaudible portions. In addition, Davis argues the district court erred in admitting a note pad belonging to McFarland as evidence against Davis, contending it was improperly authenticated and prejudicial. McFarland argues the district court erred in admitting evidence of Davis's prior crimes in defendants' joint trial due to its prejudicial impact on McFarland's case. For the reasons set forth below, we affirm the convictions.

"Doc" Davis was for several years a self-employed musician and songwriter in Oklahoma. At the time of the events underlying his conviction in this case, he resided in Hartshorne, Oklahoma. Davis became acquainted with defendant McFarland in 1979. From time to time, Davis and his band played at a Hartshorne bar owned by McFarland, whom Davis described as a close friend.

In March 1982, Davis came to the attention of investigators with the Federal Bureau of Investigation (FBI) through a wiretap of a telephone belonging to Richard Riley, a key witness in the case against the defendants. The electronic surveillance was authorized by the United States District Court for the Western District of Oklahoma as part of an extensive investigation of public corruption and narcotics violations. Neither the defendants nor the crimes with which they were charged were listed as targets in that authorization. Initially, government investigators knew Davis only as "Doc." His last name remained unknown until after Richard Riley agreed in April 1982 to cooperate with the government in the investigation of a variety of crimes. ¹ As part of his arrangement with the government, Riley agreed to continue his relationship with "Doc" and others and to record telephone conversations relating to their activities. Thereafter, investigators learned that Doc's last name was Davis.

At trial, Riley testified that he first met Davis in 1981. At that time, Riley was the president of Midstates Distributing Products in Oklahoma City, a company involved in the distribution of "turkey" drugs. ² Riley testified that he and Jerry Woods, a friend and business associate, arranged to purchase two pounds of methamphetamine, a dangerous controlled substance, from Davis for $12,000 per pound. Riley claimed that he and Woods never paid for the second pound and that the outstanding debt was the subject of several discussions between Davis and Riley.

Following Riley's agreement to cooperate with the government in April 1982, he recorded several conversations with Davis in which arrangements were made for Davis to obtain chemicals, laboratory equipment, and glassware to manufacture methamphetamine. The government introduced twenty tapes of their conversations into evidence. As part of the arrangements, FBI agents obtained five gallons of phenylpropanolamine from the federal Drug Enforcement Administration (DEA), which were delivered to Davis in June 1982 by an FBI agent posing as Riley's girl friend. At that time, Davis believed that phenylpropanolamine, which is sold legally as a decongestant, was a necessary precursor to the manufacture of methamphetamine.

In September 1982, DEA agent John Coonce was brought into the case and introduced by Riley to Davis as a chemical supplier from Metroplex Chemical in Dallas, Texas. By that time, Davis was aware that methylamine, rather than phenylpropanolamine, was the proper precursor for methamphetamine. On September 10, 1982, in Oklahoma City, Coonce exchanged the phenylpropanolamine in Davis's possession for methylamine. Thereafter, on October 11, 1982, November 19, 1982, and December 9, 1983, Davis and McFarland made trips from Oklahoma to Metroplex in Dallas to obtain glassware, equipment, and chemicals necessary for the manufacture of methamphetamine. Through a prior agreement with the owners of Metroplex, the government videotaped these visits. The videotapes, which were introduced into evidence, indicated the defendants discussed the manufacturing process for methamphetamine with Coonce and others during their visits.

After several months without contact from defendants following their November 1982 trip to Dallas, Coonce telephoned Davis in the summer of 1983. Davis met alone with Coonce in Tulsa in September 1983. Shortly after defendants' third trip to Dallas, Coonce met with Davis and McFarland in a hotel room in Tulsa on December 17, 1983. A tape recording of their conversation, which was introduced into evidence, indicated that most of the meeting involved a discussion about the manufacturing process for methamphetamine. Upon leaving the hotel, Davis and McFarland were arrested.

The government presented the foregoing evidence in support of its theory that defendants conspired, from the time of Davis's initial contacts with Richard Riley in 1982, to establish a laboratory to produce methamphetamine. While it is uncontroverted that no methamphetamine was ever produced, the government argues that the tape recordings of various telephone calls, the videotapes of defendants' three visits to Metroplex Chemical, and testimony regarding meetings between government agents and McFarland and Davis support the inference that defendants were attempting to accumulate the materials necessary to produce methamphetamine.

Davis has continually maintained that he never intended to manufacture methamphetamine or to perform any illegal act. He contends he initiated and pursued his relationship with Richard Riley in 1982 as part of an attempt to investigate the December 1981 shooting death of his music publisher and friend, Jim Ross. ³ Several months prior to his death, Ross, who was involved in the turkey drug business, made angry references to his dealings with Riley. Davis contends he suspected Riley was involved in Ross's death, and Davis therefore attempted to gain Riley's trust and confidence by enlisting his assistance and participation in a purported scheme to manufacture methamphetamine. Davis also testified that, following a trip to Dallas with Ross in July 1981, Ross appeared to be extremely upset about his treatment at the hands of "John," whom Davis assumed Ross visited in Dallas. Davis testified he eventually began to suspect that John Coonce was the subject of Ross's anger. Throughout the trial, Davis and McFarland contended that McFarland became involved in the contacts with Riley and Coonce only to assist Davis in the investigation.

At the end of the government's case, the defendants moved for a judgment of acquittal, which they renewed at the close of all the evidence. After hearing argument on the grounds advanced in support of the motions, the district court denied defendants' motions. On appeal, defendants raise several of the same issues they presented below.

I.

With respect to Count II of the indictment, traveling interstate with the intent to promote, manage, establish, and carry out an unlawful activity in violation of 18 U.S.C. Sec. 1952(a)(3), defendants argue that the evidence presented does not support their convictions. ⁴ They first contend that they did not engage in an "unlawful activity" within the meaning of Sec. 1952(a)(3), as defined in Sec. 1952(b), because their activities did not rise to the level of a business enterprise, but were merely sporadic or isolated instances. ⁵ We recognize that business enterprise means a continuing course of conduct rather than sporadic or isolated involvement in a prohibited activity. Rewis v. United States, 401 U.S. 808, 811 n. 6, 91 S.Ct. 1056, 1059 n. 6, 28 L.Ed.2d 493 (1971); United States v. Kendall, 766 F.2d 1426, 1434 (10th Cir.1985); United States v. Corbin, 662 F.2d 1066, 1072 (4th Cir.1981); United States v. Pauldino, 443 F.2d 1108, 1112 (10th Cir.), cert. denied, 404 U.S. 882, 92 S.Ct. 212, 30 L.Ed.2d 163 (1971). However, we cannot agree with defendants' characterization of their activities as sporadic. From the evidence in the record, there emerges a picture of an ongoing plan to manufacture illegal drugs which necessitated numerous telephone calls to Richard Riley and John Coonce, three trips to Metroplex Chemical in Dallas, and...