United States v. Haisten
| Docket Number | 21-1421,21-1422 |
| Decision Date | 05 October 2022 |
| Citation | 50 F.4th 368 |
| Parties | UNITED STATES of America v. Judy HAISTEN, Appellant in No. 21-1421 David Haisten, Appellant in No. 21-1422 |
| Court | U.S. Court of Appeals — Third Circuit |
Peter G. Erdely [ARGUED], Law Offices of Peter G. Erdely, 100 South Juniper Street – 3rd Fl., Philadelphia, PA 19107, Counsel for Appellants
Christopher E. Parisi, Robert A. Zauzmer [ARGUED], Office of United States Attorney, 615 Chestnut Street – Ste. 1250, Philadelphia, PA 19106, Counsel for Appellee
Before: JORDAN, PORTER, and PHIPPS, Circuit Judges
Judy and David Haisten appeal the District Court's order denying their joint motion for post-conviction relief under 28 U.S.C. § 2255. They claim that their convictions should be vacated because their trial counsel was ineffective for failing to request a jury instruction on improper venue or judgment of acquittal on venue grounds. We will vacate the District Court's order and remand for the Court to conduct an evidentiary hearing on whether their counsel had a strategic reason for not raising a defense based on improper venue.
In 2009, the Haistens started an internet business out of their home in South Carolina. They sold discounted animal pesticides and drugs through their own company's website and other websites, including eBay. They did not, however, register their business with the Environmental Protection Agency or use EPA-approved labeling and packaging materials, in violation of EPA regulations governing manufacturers, importers, and distributors of animal pesticides. They similarly violated Food and Drug Administration regulations by dispensing certain drugs without a prescription, as well as by failing to register their business facilities with the FDA and use FDA-approved labeling and packing.
In a truly unusual pairing of business lines, the Haistens also used their online business to sell counterfeit DVDs of movies and television shows. They ordered the DVDs from suppliers in mainland China and Hong Kong, who would then ship them to the Haistens' home in South Carolina, using invoices and customs declarations that misrepresented the contents of the shipments.
The Haistens received cease-and-desist letters from South Carolina state regulators and two animal pesticides companies, all of which they ignored. After receiving multiple customer complaints about the Haistens' sales of counterfeit goods, eBay shut down their seller accounts. The Haistens, nevertheless, created new accounts and continued to sell the animal pesticides, drugs, and counterfeit DVDs.
By 2012, the U.S. Department of Homeland Security opened a criminal investigation into the Haistens' business dealings.
DHS agents began making undercover purchases from the Haistens' business, particularly of animal pesticides and drugs, and Customs and Border Protection (CBP) officers seized shipments of counterfeit DVDs destined for the Haistens' home in South Carolina. Federal investigators then executed a warrant and searched the Haistens' home, which revealed unapproved animal pesticides and drugs, counterfeit DVDs, business records, and various cease-and-desist letters and seizure notices.
In November 2016, a grand jury in the U.S. District Court for the Eastern District of Pennsylvania indicted the Haistens on fifteen counts, including conspiracy, distributing and selling unregistered pesticides, distributing and selling misbranded pesticides, introducing misbranded animal drugs into interstate commerce, and trafficking in counterfeit goods. Of importance for this appeal, Count 14 charged the Haistens with trafficking counterfeit DVDs. Those DVDs happened to have been seized by CBP officers in Cincinnati, Ohio, before they reached the Haistens' South Carolina home. Count 15 also charged them with trafficking counterfeit DVDs, in this instance DVDs that were seized at their home.
About a year later, the Haistens were convicted on fourteen charges, including Counts 14 and 15.1 David was sentenced to 12 months' imprisonment on each of the first twelve counts and 78 months' imprisonment on each of Counts 14 and 15, all to run concurrently, producing a total sentence of 78 months. Judy was sentenced to 12 months' imprisonment on each of the first twelve counts, and 60 months' imprisonment on each of Counts 14 and 15, all to run concurrently, producing a total sentence of 60 months. The Haistens' trial counsel did not request a jury instruction on improper venue or move for acquittal on Counts 14 or 15 for lack of proper venue in the Eastern District of Pennsylvania.
The Haistens appealed, challenging an evidentiary ruling and a statement the government made during its summation. We affirmed. United States v. Haisten , 790 F. App'x 374, 376 (3d Cir. 2019). They filed numerous pro se motions in the District Court, all of which were denied. They also filed pro se notices of appeal, which their subsequently retained counsel moved to dismiss.
The Haistens timely filed a joint pro se motion for relief under 28 U.S.C. § 2255, arguing that their trial counsel had been ineffective for, among other things, failing to challenge venue on Counts 14 and 15. The District Court denied their motion. With respect to their venue argument, it held that any attempt by trial counsel to challenge venue would have been futile because the government had proved venue for Counts 14 and 15. The Court based its conclusion on a spreadsheet offered by the government that showed five shipments of DVDs were sent to customers in the Eastern District of Pennsylvania.
The Haistens then turned to us for a certificate of appealability. We granted it, limited to the issue of whether the District Court erred in denying the Haistens' § 2255 motion with respect to their claims that trial counsel was ineffective for failing to request a jury instruction on improper venue for Counts 14 and 15, or for failing to move for a judgment of acquittal on those counts on the basis that venue had not been proven.
Both parties now agree that, because the seized DVDs at issue in Counts 14 and 15 were not actually involved in sales to customers in the Eastern District of Pennsylvania, the District Court erred in concluding that venue had been established for those counts. See U.S. Const. amend. VI (). The government concedes that "trial counsel would have prevailed on a motion for a judgment of acquittal on the basis of improper venue" and that "the jury would have found that the government failed to prove there was venue on these counts had it been instructed on this issue." (Answering Br. at 26.)
Despite those concessions, the government still contends that the Haistens' trial counsel did not perform deficiently by failing to object to improper venue and that, even if his performance was deficient, the failure to object did not prejudice the Haistens' defense. Rather, the government argues, trial counsel may have chosen not to pursue an improper venue argument on Counts 14 and 15 because doing so would have exposed the Haistens to trials in two districts, the sentencing ranges would have been the same regardless of convictions on Counts 14 and 15, and a jury instruction on venue would not have aided their defense. The government further asserts that defense counsel's questioning of one witness about the venue issue demonstrated counsel's awareness of it, suggesting that the choice not to pursue a venue challenge was purposeful.
We are unpersuaded. While a wide berth is given to the strategic decisions of counsel and their professional judgment, the record here is devoid of any explanation for trial counsel's failure to object to improper venue on Counts 14 and 15. Under 28 U.S.C. § 2255(b), "[u]nless the motion and files and records of the case conclusively show that the prisoner is entitled to no relief, the court shall ... grant a prompt hearing thereon[.]" (emphasis added). The District Court's failure to hold such a hearing in this case – a decision likely influenced by its error in finding that venue for Counts 14 and 15 was established – was thus problematic.
The Haistens' ineffective-assistance-of-counsel claim is subject to the familiar two-prong test in Strickland v. Washington , 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984) : they must show, first, "that counsel's performance was deficient" and, second, "that the deficient performance prejudiced the defense." Counsel's performance is not deficient under Strickland if it is the product of a strategic litigation choice. Gaines v. Superintendent Benner Twp. SCI , 33 F.4th 705, 712 (3d Cir. 2022). But, for Strickland claims, too, "a district court must hold a hearing ‘[u]nless the motion and the files and records of the case conclusively show that the prisoner is entitled to no relief.’ " United States v. Arrington , 13 F.4th 331, 334 (3d Cir. 2021) (alteration in original) (quoting 28 U.S.C. § 2255(b) ), cert. denied , ––– U.S. ––––, 142 S. Ct. 1431, 212 L.Ed.2d 412 (2022). "If ... a claim, when taken as true and evaluated in light of the existing record, states a colorable claim for relief under Strickland , then further factual development in the form of a hearing is required." Id.
"[C ]olorable legal merit is distinct from actual merit." Id. The threshold for a habeas petitioner's claim to be colorable is low. Again, we have emphasized that a hearing must be held if the claim "does not conclusively fail either prong of the Strickland test[.]" Id. The bottom line is, given the lack of evidence in the record about trial counsel's strategic reasons for failing to object to improper venue on Counts 14 and 15, it is inconclusive whether the Haistens' trial counsel performed deficiently. And while we take no...
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