United States v. Kleinman

• Citation: 880 F.3d 1020
• Decision Date: 16 June 2017
• Docket Number: No. 14-50585,14-50585
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Noah KLEINMAN, AKA Chuckles, Defendant–Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

880 F.3d 1020

UNITED STATES of America, Plaintiff–Appellee,

v.Noah KLEINMAN, AKA Chuckles, Defendant–Appellant.

No. 14-50585

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 4, 2017, Pasadena, California

Filed June 16, 2017

Amended January 22, 2018

Becky S. James (argued) and Rachael A. Robinson, Greenberg Gross LLP, Los Angeles, California, for Defendant–Appellant.

Julie Shemitz (argued) and David P. Kowal (argued), Assistant United States Attorneys; Lawrence S. Middleton, Chief, Criminal Division; United States Attorney's Office, Los Angeles, California; for Plaintiff–Appellee.

Paula M. Mitchell, Ninth Circuit Appellate Clinic, Alarcón Advocacy Center, Loyola Law School, Los Angeles, California, for Amici Curiae Members of Congress.

Roger I. Roots, Livingston, Montana, for Amicus Curiae Fully Informed Jury Association.

Alexandra W. Yates, Deputy Federal Public Defender; Hilary Potashner, Federal Public Defender; Office of the Federal Public Defender, Los Angeles, California; for Amici Curiae Federal Public and Community Defenders for Alaska; Arizona; The Central, Eastern, Northern, and Southern Districts of California; Guam; Hawaii; Idaho; Montana; Nevada; Oregon; and the Eastern and Western Districts of Washington.

Before: DAVID M. EBEL,^* MILAN D. SMITH, JR., and N. RANDY SMITH, Circuit Judges.

ORDER AND AMENDED OPINION

Defendant–Appellant's petition for panel rehearing is GRANTED. The opinion filed June 16, 2017, and reported at 859 F.3d 825, is hereby withdrawn. A superseding opinion will be filed concurrently with this order.

Judge M. Smith and Judge N.R. Smith vote to deny the petition for rehearing en banc, and Judge Ebel so recommends. The full court has been advised of the petition for rehearing en banc, and no judge requested a vote on whether to rehear the matter en banc. Fed. R. App. P. 35. The petition for rehearing en banc, filed the same date, is DENIED. No further petitions for panel rehearing or rehearing en banc will be entertained.

M. SMITH, Circuit Judge:

Noah Kleinman appeals his jury conviction and 211 month sentence for conspiracy to distribute and possess marijuana, distribution of marijuana, maintaining a drug-involved premises, and conspiracy to commit money laundering. His offenses arose out of purported medical marijuana collective storefronts that he operated with his co-defendants in California, which he alleges complied with state law. On appeal, Kleinman argues that (1) a congressional appropriations rider enjoining use of United States Department of Justice (DOJ) funds in certain medical marijuana cases prohibits continued prosecution of his case; (2) the district court gave an anti-nullification jury instruction that effectively coerced a guilty verdict; (3) the district court erroneously denied Kleinman's motion to suppress evidence seized pursuant to a faulty search warrant; (4) the district court erred by not granting an evidentiary hearing on the validity of the affidavit supporting the search warrant; (5) the district court erred by refusing to instruct the jury on Kleinman's defense theory; and (6) the 211 month sentence was substantively and procedurally unreasonable. For the reasons described herein, we AFFIRM Kleinman's conviction and sentence.

FACTS AND PRIOR PROCEEDINGS

Kleinman, along with defendant Paul Montoya and others, began operating purported medical marijuana collectives in California around 2006. In 2007 or 2008 they opened their fourth store, NoHo Caregivers (NoHo), which the government alleged was the hub of a large conspiracy to distribute marijuana. At trial, witnesses testified that Kleinman and his associates sold 90% of their marijuana outside of their storefronts, used encrypted phones and burner phones to communicate, drove rented cars to escape detection, hid drugs and money in "stash apartments" rented for that purpose, and shipped marijuana hidden in hollowed-out computer towers to customers in New York and Philadelphia.

In 2010, pursuant to a Los Angeles Police Department (LAPD) investigation of medical marijuana collectives, two undercover officers entered Kleinman's dispensary Medco Organics (Medco) and purchased marijuana. The LAPD then obtained a search warrant and seized evidence, and California initiated criminal proceedings against Kleinman. He moved to dismiss the case, arguing that he had complete immunity from prosecution pursuant to California medical marijuana laws. The state did not file an objection. During a preliminary hearing on the dismissal motion, the deputy district attorney stated that he did not see a basis on which to deny Kleinman's motion, and the state court dismissed the charges. After the case was dismissed, the United States Drug Enforcement Administration (DEA) seized the evidence in the LAPD's custody.

In 2011, a federal grand jury indicted Kleinman, Montoya, and five others for conspiracy to distribute and possess marijuana, distribution of marijuana, maintaining a drug-involved premises, and conspiracy to commit money laundering. Kleinman moved to suppress the evidence seized by the DEA on the ground that it was obtained pursuant to a search warrant that lacked probable cause. In the alternative, Kleinman moved for an evidentiary hearing on the validity of the affidavit supporting the warrant due to alleged material omissions in the affidavit. The district court denied the motions.

At a pretrial hearing, the district court concluded that any references to medical marijuana would be irrelevant at trial because state law compliance is not a defense to federal charges. During jury selection, the district court emphasized that jurors should not question any purported conflict between federal and state law, and should consider the case under federal law only.

The jury convicted Kleinman on all counts and found that the amount of marijuana involved in the offenses exceeded 1,000 kilograms. The district court held a sentencing hearing on December 8, 2014, determined that the applicable United States Sentencing Guidelines (Guidelines) range was 188 to 235 months, and sentenced Kleinman to 211 months. Shortly after Kleinman's convictions and sentence, on December 16, 2014, Congress enacted an appropriations rider that prohibits the DOJ from expending funds to prevent states from implementing their laws authorizing the use, distribution, possession, and cultivation of medical marijuana. Consolidated and Further Continuing Appropriations Act, 2015, Pub. L. No. 113–235, § 538, 128 Stat. 2130, 2217 (2014).

ANALYSIS

I. Kleinman is not entitled to remand for an evidentiary hearing on his state law compliance.

In 1996, California voters approved the Compassionate Use Act (CUA), which decriminalized possession and cultivation of marijuana for medical use. Cal. Health & Safety Code § 11362.5. In 2003, the California legislature enacted the Medical Marijuana Program (MMP), permitting qualified patients to form collectives for the cultivation and distribution of medical marijuana. Id. §§ 11362.7–11362.9. Federal law, however, still prohibits the use or sale of marijuana, even if distributed and possessed pursuant to state-approved medical marijuana programs. See United States v. McIntosh , 833 F.3d 1163, 1179 n.5 (9th Cir. 2016) ("Anyone in any state who possesses, distributes, or manufactures marijuana for medical or recreational purposes (or attempts or conspires to do so) is committing a federal crime.").

Since December 16, 2014, congressional appropriations riders have prohibited the use of any DOJ funds that prevent states with medical marijuana programs (including California) from implementing their state medical marijuana laws. Consolidated and Further Continuing Appropriations Act, 2015, 128 Stat. at 2217; Consolidated Appropriations Act, 2016, Pub. L. No. 114–113, § 542, 129 Stat. 2242, 2332–33 (2015); Consolidated Appropriations Act, 2017, Pub. L. No. 115-31, § 537, 131 Stat. 135, 228 (2017). All of these riders are "essentially the same," see United States v. Nixon , 839 F.3d 885, 887 (9th Cir. 2016) (per curiam), and the current rider will remain in effect until at least September 30, 2017. See Consolidated Appropriations Act, 2017, 131 Stat. at 135. In this opinion we refer to the riders collectively as § 542.

In McIntosh we determined that, pursuant to § 542, federal criminal defendants who were indicted in marijuana cases had standing to file interlocutory appeals seeking to enjoin DOJ expenditure of funds used to prosecute their cases. 833 F.3d at 1172–74. We held that "§ 542 prohibits DOJ from spending funds from relevant appropriations acts for the prosecution of individuals who engaged in conduct permitted by the State Medical Marijuana Laws and who fully complied with such laws." Id. at 1177. However, § 542 does not prohibit prosecuting individuals for conduct that is not fully compliant with state medical marijuana laws. Id. at 1178. We remanded, holding that the DOJ could only continue the prosecutions if the defendants were given "evidentiary hearings to determine whether their conduct was completely authorized by state law, by which we mean that they strictly complied with all relevant conditions imposed by state law on ... medical marijuana." Id. at 1179. Kleinman asks us to remand for an evidentiary hearing as we did in McIntosh . We decline to do so.

Preliminarily, we clarify that the government's approach to this case is mistaken. Kleinman was convicted and sentenced shortly before § 542 was enacted. The government therefore claims that § 542 is inapplicable to Kleinman's prosecution for two reasons, neither of which is availing. First, it asserts that application of § 542 after judgment is entered would be a retroactive application of that law, when the statute was not intended to apply retroactively.

However, Kleinman does not seek retroactive application of § 542. Rather, he argues that § 542 prohibits continued DOJ expenditures on his case since its enactment, which in this case refers to the...