U.S. v. Johal, 03-30579.

• Decision Date: 09 November 2005
• Docket Number: No. 03-30579.,03-30579.
• Citation: 428 F.3d 823
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Joga Singh JOHAL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 823

428 F.3d 823

UNITED STATES of America, Plaintiff-Appellee, v. Joga Singh JOHAL, Defendant-Appellant.

No. 03-30579.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted January 10, 2005.

Filed August 30, 2005.

Amended November 9, 2005.

Sheryl Gordon McCloud, Law Office of Sheryl Gordon McCloud, Seattle, WA, for the defendant-appellant.

Russell E. Smoot, Assistant United States Attorney, Spokane, WA, for the plaintiff-appellee.

Allen R. Bentley, Law Office of Allen R. Bentley, Seattle, WA, for amicus curiae, National Association of Criminal Defense Lawyers.

Appeal from the United States District Court for the Eastern District of Washington; Fred L. Van Sickle, Chief Judge, Presiding. D.C. No. CR-02-00214-FVS.

Before: SCHROEDER, Chief Judge, GRABER and FISHER, Circuit Judges.

ORDER

Appellee's motion to modify the court's decision, filed October 18, 2005, is

GRANTED.

The opinion filed August 30, 2005, is amended in its entirety. The Clerk is instructed to file the amended opinion concurrently with this order.

No further petitions for panel rehearing or petitions for rehearing en banc will be considered by the court.

OPINION

FISHER, Circuit Judge:

Joga Singh Johal ("Johal") appeals his conviction for selling and possessing large quantities of over-the-counter cold pills containing the ingredient pseudoephedrine "knowing or having reasonable cause to believe" that they would be used to manufacture methamphetamine, an illegal substance under 21 U.S.C. § 841(c)(2). Johal argues that § 841(c)(2) impermissibly imposes criminal liability without a mens rea requirement and that it mandates that the illegal substance actually be produced, foreclosing his conviction under a sting operation. Johal also alleges that the jury instructions failed to ensure a unanimous verdict and that the district court should have found him eligible for a sentence reduction because of his acceptance of responsibility.

We reject Johal's contention that a "reasonable cause to believe" standard, as construed and applied here, permits a defendant to be convicted without a showing of any criminal intent. Instead, the standard incorporates both subjective and objective considerations to ensure the defendant had a sufficiently "guilty mind" in violating the statute. We further hold that a conviction under the statute does not require that the illegal drug actually be manufactured. We also conclude that the trial court did not err in its jury instructions or in denying Johal a reduction for acceptance of responsibility.

I.

Johal is the owner of a grocery business in Spokane, Washington, called "J & K Gas & Grocery". He invested in the store in 1995, some 10 years after he emigrated to the United States.

Beginning in the winter of 2001, the Drug Enforcement Agency ("DEA") began surveilling Johal's grocery store and a number of other convenience stores in the area. The DEA suspected that grocery store owners were selling excessive quantities of pseudoephedrine to individuals, who then used the ingredient to make methamphetamine.

Pseudoephedrine is a chemical ingredient in a number of cold medicines that can be purchased over-the-counter without a prescription. However, pseudoephedrine, when extracted from cold pills and mixed with other chemicals, is also used to manufacture methamphetamine. Certain brands of pseudoephedrine pills, including Action brand, facilitate the process of extraction because they do not have a coating on them.

Johal carried Action brand pseudoephedrine. At some point, he stopped stocking Action cold pills on the shelves because he said people were stealing them, and instead began keeping the medicine behind the counter and in the back room of the store.

The government indicted Johal based on a series of transactions in which he sold large amounts of Action cold pills to real or ostensible customers. On March 7, 2002, he sold 61 boxes of Action to P.H., who had agreed to participate in a DEA undercover sting operation against Johal's store in exchange for having criminal charges against her dropped. P.H. entered the store and bought three boxes while a DEA Task Force Officer ("DEA Officer") — working undercover — waited in a car outside the store. P.H. left the store and then re-entered with the DEA Officer. In the next half hour, the DEA Officer and P.H. each made multiple three-box purchases. The DEA Officer asked Johal if they could buy more. The DEA Officer testified that he told Johal he wanted a case of Action because he was a cook and wanted to make "crystal," a shorthand reference to crystal methamphetamine. Johal told the two to return to the store later that evening. They returned after the store closed, and Johal sold P.H. 40 more boxes of Action.

The second controlled purchase occurred on March 13, 2002, by DEA informant D.W. Just a week earlier, D.W. had purchased from Johal's store a case of matches, which have red phosphorous tips that also are used in methamphetamine production. After that transaction, DEA agents pulled D.W. over in his car and found methamphetamine and other ingredients used to make the drug. D.W. agreed to cooperate with the DEA, and the next week he purchased a case (144 boxes) of Action from Johal for $1500. During the March 13 purchase, after D.W. paid the money, Johal told him to go to the back storeroom and wait. D.W. said another store employee put the pills in a "Mike's Hard Lemonade" box and put ice on top of the boxes of Action. Johal also told D.W. he had special-ordered matches and asked if D.W. wanted to buy them.

Earlier that same evening, by coincidence, a third party not working for the DEA, R.H., bought from Johal's store $950 worth of Action that R.H. had ordered in advance. DEA agents arrested R.H. as he was driving away from the store.

DEA agents amassed other corroborating evidence from transactions they observed and from their search of the store pursuant to a federal warrant. In a superseding indictment, the government charged Johal with two counts of distribution and one count of possession of a listed chemical in violation of 21 U.S.C. § 841(c)(2).

The first trial ended with a hung jury. One issue the first jury grappled with in its deliberations was the sufficiency of evidence needed to meet the "reasonable cause to believe" intent standard. Johal was retried and convicted on all counts. At sentencing, the district court judge granted Johal a downward departure but denied him an adjustment based on acceptance of responsibility. Johal timely appealed. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

II.

Johal contends that 21 U.S.C. § 841(c)(2) impermissibly criminalizes conduct without imposing a mens rea requirement. We review de novo the proper interpretation of a statute. United States v. Odom, 329 F.3d 1032, 1034(9th Cir.2003). In determining what mental state is required to prove a violation of the statute, we look to its words and the intent of Congress. See United States v. Nguyen, 73 F.3d 887, 890 (9th Cir.1995). In doing so, we construe the statute "in light of the background rules of the common law in which the requirement of some mens rea for a crime is firmly embedded." Staples v. United States, 511 U.S. 600, 605, 114 S.Ct. 1793, 128 L.Ed.2d 608 (1994) (citation omitted) (noting that the existence of a mens rea is the rule rather than the exception in Anglo-American criminal jurisprudence); see Nguyen, 73 F.3d at 890 (emphasizing the "fundamental principle that a person is not criminally responsible unless `an evil-meaning mind' accompanies `an evil-doing hand'" (quoting Morissette v. United States, 342 U.S. 246, 251, 72 S.Ct. 240, 96 L.Ed. 288 (1952))).

Section 841(c)(2) punishes

Any person who knowingly or intentionally —

(2) 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.

(Emphasis added.) Pseudoephedrine is a listed chemical under the statute, 21 U.S.C. § 802(34)(K); but it is also a common ingredient in nonprescription cold medicines. Johal, supported by amicus curiae the National Association of Criminal Defense Lawyers, argues that the statute converts the legitimate sale of decongestants containing pseudoephedrine into a criminal act, putting unwitting store clerks at risk of going to prison simply for selling legal cold medications. He asserts this problem arises because "reasonable cause to believe" calls for interpreting what a reasonable person objectively would have known and done under the circumstances, imposing liability without any showing of the defendant's actual criminal intent.

We reject Johal's argument because the statute does impose a mens rea requirement, as indicated in our previous decision in United States v. Kaur, 382 F.3d 1155, 1157(9th Cir.2004), a case arising out of the same DEA operation that led to Johal's arrest. There, we evaluated — albeit under an abuse of discretion standard — a jury instruction identical to the one given here that defined "reasonable cause to believe" in § 841(c)(2) as

to have knowledge of facts which, although not amounting to direct knowledge, would cause a reasonable person knowing the same facts, to reasonably conclude that the pseudoephedrine would be used to manufacture a controlled substance.

Id. at 1156.

Relying on Kaur, we hold that "reasonable cause to believe," in the context of § 841(c)(2), requires that a defendant subjectively know facts that either cause him or would cause a reasonable person to believe that the ingredients are being used to produce illegal drugs. This standard limits the likelihood that a defendant will be prosecuted for mere inadvertent conduct and is consistent with the longstanding principle presuming a mens rea requirement for criminal activity. See Nguyen, 73 F.3d at 890-91.¹

We also reject Johal's argument that the "reasonable cause to...