U.S. v. Jae Gab Kim

• Decision Date: 10 April 2006
• Docket Number: No. 05-50112.,05-50112.
• Citation: 449 F.3d 933
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. JAE GAB KIM, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

449 F.3d 933

UNITED STATES of America, Plaintiff-Appellee, v. JAE GAB KIM, Defendant-Appellant.

No. 05-50112.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 6, 2006.

Filed April 10, 2006.

Amended May 25, 2006.

William J. Genego, Esq., Santa Monica, CA, argued the case and was on the briefs for the defendant-appellant.

Gregory A. Lesser, Assistant U.S. Attorney, Los Angeles, CA, argued the case and was on the briefs for the plaintiff-appellee; Debra Wong Yang, U.S. Attorney and Thomas P. O'Brien, Assistant U.S. Attorney, Los Angeles, CA, were on the briefs for the plaintiff-appellee.

Appeal from the United States District Court for the Central District of California Robert J. Timlin, Senior Judge, Presiding. D.C. No. CR-01-00024-RT.

Before M. MARGARET McKEOWN and MARSHA S. BERZON, Circuit Judges, and SAMUEL P. KING,^* Senior Judge.

ORDER AND AMENDED OPINION

BERZON, Circuit Judge.

ORDER

The opinion filed on April 10, 2006, is amended as follows:

On slip opinion page 3929, line 9, beginning with "Over-the-counter sales ..." and ending line 12 with "from `regulated transactions.'" delete and replace with the following:

Over-the-counter sales of pseudoephedrine that are not "ordinary," however, may be regulated transactions, because they are not necessarily included in the exemption from regulated transactions.

On slip opinion page 3929, line 12, after "exemption from `regulated transactions.'" insert the following footnote:

The definition of "regulated transaction" generally allows the "Attorney General [to] establish[ ] a threshold amount for a specific listed chemical." § 802(39)(A). Section 802(39)(A)(iv)(II) provided at the time of Kim's offense "the threshold for any sale of products containing pseudoephedrine ... products by retail distributors or by distributors required to submit reports by section 830(b)(3) of this title shall be 24 grams of pseudoephedrine . . . in a single transaction."

At the time of the relevant transactions in this case, the Attorney General had not established single transaction thresholds for retail sales of pseudoephedrine, but he has done so since then. Compare 21 C.F.R. 1310.04(f) (2000) with 21 C.F.R. 1310.04(f) (2006). The details of the quantity or quality of pseudoephedrine that must be recorded and reported are not dispositive in this case and the statute has been amended recently, see infra note 8, so we do not address the recording and reporting requirements further.

On slip opinion page 3929, line 22, beginning with "Alternatively, sales of twenty-four grams . . ." and ending line 28 with "twenty-four grams or more." delete and replace with the following:

Additionally, sales of twenty-four grams or more of pseudoephedrine were automatically subject to the recording requirements of § 830. § 802(39)(A)(iv)(II). The upshot is that over-the-counter sales of pseudoephedrine had to be recorded if the items purchased totaled twenty-four grams or more and (1) were not in blister packs or (2) were in packages of more than three grams per package.

With these amendments, the panel has voted to deny the petition for rehearing. The petition for rehearing is DENIED. No further petitions for rehearing or for rehearing en banc may be filed.

OPINION

Pseudoephedrine, a "listed chemical" under a federal drug statute, 21 U.S.C. § 802(33) & (34)(K), is an ingredient in many over-the-counter cold medications. It can also be used to manufacture methamphetamine, a controlled substance under 21 U.S.C. § 812. Both the United States and California have statutes prohibiting over-the-counter sales of drugs containing pseudoephedrine in certain instances.

See 21 U.S.C. § 841(c)(2); CAL. HEALTH & SAFETY CODE § 11100(a)(17) & (e)(6).

This case concerns the conviction of the proprietor of a small pharmacy for selling cold remedies containing pseudoephedrine. Jae Gab Kim was convicted of violating 21 U.S.C. § 841(c)(2), which prohibits the distribution of listed chemicals, including pseudoephedrine, "knowing, or having reasonable cause to believe, that [the pseudoephedrine] will be used to manufacture a controlled substance." He argues that, because drugs containing pseudoephedrine can be legally sold over the counter and there is no bright line in the law demarcating a legal sale from an illegal sale, the law allowing conviction upon "reasonable cause to believe" is unconstitutionally vague. We have previously held that § 841(c)(2) contains a mens rea requirement. With that mens rea standard, the statute is not unconstitutionally vague. We therefore affirm Kim's conviction.

I. BACKGROUND

Kim owned and operated the San Jacinto Pharmacy. After receiving information about the law regarding the sale of pseudoephedrine from an industry newsletter, Kim instructed his clerk, Virginia Garcia, not to sell more than 150 sixty-milligram pills per person, per day. Kim believed that sales under this quantity were legal.

Kim purchased drugs containing pseudoephedrine from Bergen Brunswig. In May 2000, the Drug Enforcement Administration (DEA) received a report from Bergen Brunswig that Kim's purchases of drugs containing pseudoephedrine had sharply increased.¹

The DEA began an investigation of Kim, sending undercover agents to purchase cold remedies containing pseudoephedrine from his pharmacy. Two transactions are relevant to this appeal:² On January 4, 2001, three undercover agents entered Kim's pharmacy. Kim was standing in an elevated section at the rear of the pharmacy, filling prescriptions. Kim nodded and smiled at the three agents. The agents attempted to purchase all the packages of cold medication on display. After Garcia started to tell the agents that one person could not buy all the medication, Kim interjected to ask what was going on and who was buying what. Kim instructed them to return some of the medication so that his stock would not be depleted. The three agents returned some of the boxes and divided the remainder for purchase. Ultimately, the agents were each allowed to purchase two boxes of 96-count thirty-milligram tablets and one box of 24-count thirty-milligram tablets, for a total of around 6 grams of pseudoephedrine. Additionally, in Kim's presence and conspicuously, the men inquired about and purchased hydrogen peroxide, iodine, and rubbing alcohol, all of which are used to manufacture methamphetamine. One of the men mumbled, in connection with the purchase of alcohol, that he needed alcohol to "break it down." One of the agents provided all the money for the purchases, although the purchases were rung up separately. There were confusing statements as to whether the person who supplied the money was holding the others' money for them or, instead, paying for all the purchases himself.

As Garcia was completing the transaction, one of the agents asked, "Can we get some more of this tomorrow?" Garcia answered, "Well hopefully." Kim, however, answered, "We're not selling every day." He added that the purchase "lasts for you, normally."

The next day, January 5, 2001, the same three undercover officers returned to the pharmacy. Kim again nodded to them as they entered. Although the officers assumed that he recognized them, there is no direct evidence that he did. One officer attempted to purchase multiple bottles of pseudoephedrine. Again, Garcia would not allow this sale to proceed. She did, however, allow each man to purchase one 100-count sixty-milligram bottle. As on the previous day, one officer held all the money initially and handed it to the other two so they could pay for their pseudoephedrine. Afterwards, the officers also each purchased two 24-count boxes of thirty-milligram pseudoephedrine, for a total of about 7.5 grams each. Kim was not involved in this transaction, but he was in the store at the time.

Kim was indicted for violating 21 U.S.C. § 841(c)(2),³ for distributing a listed chemical when the merchant "knows or has reasonable cause to believe" that the chemical will be used to manufacture illicit drugs.⁴ At trial, at the close of the government's case-in-chief, the district court granted Kim's motion for judgment of acquittal on three counts. The jury found Kim not guilty of another count. The district court later granted a post-verdict judgment of acquittal as to yet another count. In the end, Kim was convicted only on counts six and seven, covering the incidents described above.

Both after the government's case-in-chief and after the jury returned its verdict, Kim challenged the vagueness of the statute under which he was indicted. The district court denied both motions. Kim was sentenced to five months incarceration, three years supervised release—during which he was to spend five months in home detention—and a $15,000 fine. We were informed at oral argument that he lost his pharmacist's license as a result of the convictions.

II. STATE AND FEDERAL LAW

The federal statute under which Kim was convicted provides that "[a]ny person who knowingly or intentionally . . . possesses or distributes a listed chemical knowing, or having reasonable cause to believe, that the listed chemical will be used to manufacture a controlled substance except as authorized by this subchapter" shall be fined or imprisoned, or both. 21 U.S.C. § 841(c)(2). The federal law also contains a requirement that sales of certain packages of pseudoephedrine be recorded.⁵ The recording statute contains a confusing maze of rules, exceptions to the rules, and exceptions to the exceptions. First, "[e]ach regulated person who engages in a regulated transaction involving a listed chemical . . . shall keep a record of the transaction for two years after the date of the transaction." 21 U.S.C. § 830(a)(1). Not all sales of listed chemicals, however, are considered "regulated transactions." "[A]ny sale of ordinary over-the-counter pseudoephedrine . . . by retail distributors shall not be a regulated transaction." § 802(39)(A)(iv)(I)(aa). Over-the-counter sales...