U.S. v. Schiffman

• Decision Date: 15 May 1978
• Docket Number: No. 77-5309,77-5309
• Citation: 572 F.2d 1137
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Monroe Charles SCHIFFMAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1137

572 F.2d 1137

UNITED STATES of America, Plaintiff-Appellee, v. Monroe Charles SCHIFFMAN, Defendant-Appellant.

No. 77-5309.

United States Court of Appeals, Fifth Circuit.

May 15, 1978.

Alan S. Ross, Miami, Fla., for defendant-appellant.

Jack V. Eskenazi, U. S. Atty., Stephen M. Pave, A. Scott Miller, Asst. U. S. Attys., Miami, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before JONES, RONEY and TJOFLAT, Circuit Judges.

RONEY, Circuit Judge:

Defendant Monroe Charles Schiffman, a pharmacist, seeks reversal of his federal drug conviction on the sole ground that evidence seized from his drugstore under an administrative search warrant should have been suppressed. The main thrust of defendant's argument centers on whether information supplied to federal agents by an agent of the Florida Board of Pharmacy, which information is statutorily prohibited from use in a Florida criminal prosecution, may be used to furnish the probable cause necessary to support a federal search warrant. We do not reach this question. With the challenged information excised from the warrant application, enough facts were furnished the magistrate to support the administrative search warrant under the lesser standard of statutory probable cause required for such searches, a constitutionally permissible standard under United States v. Biswell, 406 U.S. 311, 92 S.Ct. 1593, 32 L.Ed.2d 87 (1972). We therefore affirm the conviction.

Defendant Schiffman was convicted in a nonjury trial for conspiracy to possess and distribute controlled drugs and distribution of controlled drugs, and for furnishing false information in records required by law to be kept. 21 U.S.C.A. §§ 841(a)(1), 843(a)(4).

The events leading to defendant's conviction began on April 7, 1976, when officers of the Hialeah, Florida, Police Department arrested Michael Borka for the sale of certain controlled drugs (Seconal and Dexodrine). The drugs were still in the manufacturer's original 1000-count bottles, which contained the manufacturer's lot numbers. The police found manufacturer's bottles for other drugs (Tuinal) in Borka's apartment. The police department contacted the Federal Drug Enforcement Administration Compliance Section. Borka told the police and DEA Agent Corbitt that the ultimate source of his drugs was a man who owned a pharmacy and planned to buy another.

DEA Agent Corbitt then began an investigation of Borka's pharmaceutical bottles. From the lot number, he traced two Tuinal bottles to the manufacturer, Lilly, Inc. From Lilly, Corbitt learned the names of the four wholesale distributors in Miami to whom the drugs had been shipped only one month before Borka's arrest. Agent Corbitt went to these four distributors to determine which retail outlets had purchased the drugs. He learned that only seven of approximately 400 local pharmacies had purchased that drug within the requisite time frame. Of those seven, he was able to determine that the drugs were probably coming from one of two pharmacies, Sharon Drugs or Washington Pharmacy. His investigation focused on Sharon Drugs, defendant's pharmacy, when he inadvertently learned during a separate investigation that the owner of Sharon Drugs owned a second pharmacy and was going to purchase a third. This information tied in with Borka's description of his ultimate source.

On April 23, 1976, pursuant to 21 U.S.C.A. § 873 and standard DEA policy, which both call for cooperation with local authorities, Corbitt informed Agent Vernon Bell of the Florida Board of Pharmacy of his investigation. Bell agreed with Corbitt that Sharon Drugs was the most likely suspect, since he thought that Washington Pharmacy could handle the quantity of drugs it was buying in the regular course of its business, while Sharon Drugs could not.

That same afternoon, Bell went to Sharon Drugs and examined defendant's records, as he is allowed to do under the Florida law regulating pharmacists. Fla.Stat.Ann. § 465.131 (West Supp.1976). Bell informed Corbitt that Sharon Drugs could not account for a large amount of the drugs it had purchased.

Corbitt then applied for and obtained an administrative search warrant from a federal magistrate. After being presented with the warrant and read his Miranda rights, Schiffman executed a waiver of rights form and gave an oral and written statement to Corbitt in which he admitted his guilt. Corbitt conducted an inventory and accounting, deducting the prescriptions written from the amounts purchased. The investigation showed that over 90% Of defendant's drug purchases were unaccounted for.

Defendant moved to suppress the "fruits" of the search, including his admission and the trial testimony of a witness allegedly discovered because of defendant's statements. Denying the motion to suppress, the district court found defendant guilty on all three counts. Defendant appeals solely on the ground that the court erred in denying the motion to suppress.

Defendant argues that the information furnished to federal agent Corbitt by state agent Bell could not be used to supply probable cause for the search warrant. Florida Statute § 465.131 authorizes the Florida Board of Pharmacy to conduct warrantless inspections of pharmacies within Florida. The Supreme Court of Florida has held that information obtained from warrantless inspections under that section cannot be used to aid criminal prosecutions under Florida's drug laws. Olson v. State, 287 So.2d 313 (Fla.1973). Before we need decide what use federal authorities may make of information received from the Florida Board of Pharmacy, we must first determine whether the information from state agent Bell was necessary to the validity of the federal warrant. This Court has previously held that even though the application for a search warrant may contain prohibited information, if the other facts set forth in the application would sustain the warrant, its issuance will not be condemned. See United States v. Hunt, 496 F.2d 888, 894-895 (5th Cir. 1974).

Probable Cause Under § 880(d)

The warrant here was issued under 21 U.S.C.A. § 880(d) of the Federal Drug Abuse Prevention and Control Act of 1970. This section permits the judicial issuance of warrants for administrative inspections, and seizures appropriate to such inspections, on a showing of probable cause. The Act defines probable cause differently from that which the courts have required for fourth amendment search warrants.

For the purposes of this section, the term "probable cause" means a valid public interest in the effective enforcement of this subchapter or regulations thereunder sufficient to justify administrative inspections of the area, premises, building, or conveyance, or contents thereof, in the circumstances specified in the application for the warrant.

21 U.S.C.A. § 880(d)(1).

The initial inquiry is whether the warrant application, with the information provided by the state agent excised, provides sufficient facts to satisfy this statutory standard of probable cause. The critical paragraph of the application, after reciting that Sharon Drugs was registered as a retail pharmacy with the DEA, recited:

2. The establishment has not been previously inspected by the Drug Enforcement Administration. Probable cause does exist, because the registrant's purchasing records (Federal Order Forms) indicates large purchases of Schedule II drugs, (Tuinal 200 mg and Tuinal 100 mg) which a State investigation, initiated on April 23, 1976 was unable to account for either by the firm's dispensing records or inventory.

The italicized words are those to be eliminated from consideration of the validity of the application. The application then stated that this is a "scheduled inspection undertaken as a part of a statutorily authorized inspection program designated to assure compliance with the Comprehensive Drug Abuse Prevention and Control Act of 1970 . . . ."

The test is whether these facts show "probable cause," defined as a valid public interest sufficient to justify an administrative search of the premises.

The precise question is whether large purchases of controlled drugs by a registered retail pharmacy alone create such a valid public interest. We hold that they do.

The Comprehensive Drug Abuse Prevention and Control Act of 1970 was enacted to provide a system for the control of drug traffic and to prevent the abuse of drugs. Congress recognized that many controlled drugs have "a useful and legitimate medical purpose," but that, at the same time, improper use of these and other drugs has a detrimental effect on people's health. See 21 U.S.C.A. § 801(1)-(2). The statutory scheme envisioned by the Act is one of control through registration of and recordkeeping by all those within the "legitimate distribution chain," and prohibition of transactions outside the legitimate distribution chain. See (1970) U.S.Code Cong. & Admin.News 4566, 4569. All those who manufacture, distribute or dispense any controlled substance must be registered with the Attorney General. 21 U.S.C.A. §§ 822-823. Registrants are required to keep certain records, which must be made available for inspection. Id. § 827. The statute informs registrants the Government is authorized to inspect their establishments in accordance with the rules and regulations promulgated under the statute. Id. § 822(f). Thus, a potential registrant is put on notice that, as a condition of engaging in the manufacture or distribution of drugs, he subjects himself to the regulatory system imposed by the Act including administrative inspections by the DEA as authorized by § 880.

With this general program of control, Congress then provided for administrative inspections upon a showing of probable cause defined as "a valid public interest in the effective enforcement of this subchapter or regulations thereunder sufficient to justify administrative inspections . . . in the circumstances...