United States v. McFadden

• Citation: 823 F.3d 217
• Decision Date: 19 May 2016
• Docket Number: No. 13–4349.,13–4349.
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Stephen Dominick McFADDEN, a/k/a Stephen Domin McFadden, Defendant–Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

823 F.3d 217

UNITED STATES of America, Plaintiff–Appellee

v.Stephen Dominick McFADDEN, a/k/a Stephen Domin McFadden, Defendant–Appellant.

No. 13–4349.

United States Court of Appeals, Fourth Circuit.

Argued: March 22, 2016.

Decided: May 19, 2016.

ARGUED: J. Lloyd Snook, III, Snook & Haughey, P.C., Charlottesville, VA, for Appellant. Anthony Paul Giorno, Office of the United States Attorney, Roanoke, VA, for Appellee. ON BRIEF: Timothy J. Heaphy, United States Attorney, Roanoke, VA, Ronald M. Huber, Assistant United States Attorney, Jean B. Hudson, Assistant United States Attorney, Office of the United States Attorney, Charlottesville, VA, for Appellee.

Before TRAXLER, Chief Judge, and WILKINSON and KEENAN, Circuit Judges.

Affirmed in part, vacated in part, and remanded by published opinion. Judge KEENAN

wrote the opinion, in which Chief Judge TRAXLER and Judge WILKINSON joined.

BARBARA MILANO KEENAN

, Circuit Judge:

In this case, which is before us for a second time, we consider whether certain erroneous jury instructions given at trial require us to vacate Stephen D. McFadden's convictions. After a jury trial, McFadden was convicted of conspiring to distribute controlled substance analogues and of distributing controlled substance analogues in violation of the Controlled Substance Analogue Enforcement Act of 1986 (the Analogue Act), 21 U.S.C. §§ 802(32)(A)

, 813, and the Controlled Substances Act (CSA), 21 U.S.C. §§ 841(a), 846. In McFadden's initial appeal, we affirmed the district court's judgment, and McFadden petitioned the Supreme Court for certiorari. The Supreme Court granted certiorari, concluded that the jury instructions given at trial improperly omitted elements relating to McFadden's state of mind, and remanded this case for us to consider whether the error was harmless.

On remand, we conclude that the erroneous jury instructions constituted harmless error with respect to McFadden's convictions under Counts One, Five, Six, Seven, Eight, and Nine of the superseding indictment. However, we conclude that the error was not harmless with respect to McFadden's convictions under Counts Two, Three, and Four. We therefore affirm in part, vacate in part, and remand the case for further proceedings in the district court.

I.

A.

We begin by providing an overview of the relevant federal statutes and regulations governing controlled substances and their analogues. The CSA prohibits the distribution of a “controlled substance,” 21 U.S.C. § 841

, and defines “controlled substance” to mean any drug or substance included in five schedules, Schedule I through Schedule V, established by the CSA. 21 U.S.C. §§ 802(6), 812(a). Distribution of controlled substances listed on Schedule I carries strict criminal penalties. 21 U.S.C. § 841(b)(1)(C). The Attorney General also has the authority to add substances to or remove substances from the CSA schedules by rule. 21 U.S.C. § 811(a). The up-to-date schedules are codified in the Code of Federal Regulations. See 21 C.F.R. §§ 1308.11 –1308.15.

Congress enacted the Analogue Act to prevent the distribution of newly created drugs, not yet listed on the schedules but that have similar effects on the human body. See United States v. Klecker, 348 F.3d 69, 70 (4th Cir.2003)

. The Analogue Act defines a “controlled substance analogue” as any substance “the chemical structure of which is substantially similar to [that] of a controlled substance in schedule I or II” (the chemical structure element), and “which has [an actual, claimed, or intended] stimulant, depressant, or hallucinogenic effect on the central nervous system that is substantially similar to or greater than [that] of a controlled substance in schedule I or II” (the physiological effect element). 21 U.S.C. § 802(32)(A).

Under the Analogue Act, controlled substance analogues are treated as Schedule I controlled substances for purposes of federal law. 21 U.S.C. § 813

. The interaction between the CSA and the Analogue Act therefore prohibits the distribution of controlled substance analogues, even if not listed on the CSA schedules.

B.

The facts of this case are discussed in detail in our previous opinion in United States v. McFadden, 753 F.3d 432 (4th Cir.2014)

, and in the Supreme Court's opinion in McFadden v. United States, ––– U.S. ––––, 135 S.Ct. 2298, 192 L.Ed.2d 260 (2015). We will recite here the facts relevant to the issue presented on remand.

In July 2011, certain law enforcement officials (police officers) in Charlottesville, Virginia began investigating the distribution of synthetic stimulants commonly known as “bath salts.” The investigation revealed that bath salts were being sold from a video rental store owned and operated by Lois McDaniel. Under supervision of the police officers, a confidential informant made two controlled purchases of bath salts at McDaniel's video store. On August 24, 2011, the police officers confronted McDaniel with evidence from their investigation, searched the video store, and solicited information regarding her supplier.

McDaniel agreed to cooperate with the investigation and to assist the police in gathering evidence against her supplier, Stephen McFadden. At the officers' direction, McDaniel initiated recorded telephone conversations with McFadden, who was located in Staten Island, New York. The first of these telephone conversations occurred on August 25, 2011. In these recorded conversations, McFadden described the active ingredients in the bath salts and gave instructions on how the bath salts were to be consumed. McFadden also described the stimulant effects of the bath salts and compared the effects to those of cocaine or methamphetamine. During these telephone conversations, McDaniel engaged in five separate controlled purchases of several varieties of bath salts from McFadden. McFadden shipped packages containing bath salts through FedEx, a commercial courier, from Staten Island to Charlottesville.

The United States Drug Enforcement Administration (DEA) seized the packages directly from FedEx. Inside these packages, the “vials” and “baggies” containing the bath salts had been labeled by McFadden, and some labels warned that the contents were “not for human consumption or illegal use.” Other labels listed chemical compounds, some of which were Schedule I controlled substances, and stated that the package contents “[did] not contain [those] compounds or analogues of [those] compounds.”

Chemical analysis revealed that the composition of the bath salts seized in these shipments changed over time. McFadden's five shipments from July 2011 through September 2011 contained 3,4–methylenedioxypyrovalerone (MDPV), 3,4–methylenedioxymethcathinone (methylone, or MDMC), and 4–methyl–N–ethylcathinone (4–MEC).

On October 21, 2011, the government adopted a rule adding MDPV and methylone to Schedule I. See Schedules of Controlled Substances: Temporary Placement of Three Synthetic Cathinones into Schedule I, 76 Fed. Reg. 65,371, 65,371

–75 (Oct. 21, 2011). Immediately upon learning of the new rule, McFadden destroyed his inventory of MDPV and methylone. Although McFadden ceased distributing MDPV or methylone at this point, he continued to send shipments containing 4–MEC until his arrest in February 2012.

A federal grand jury indicted McFadden for distributing MDPV, methylone, and 4–MEC in violation of the CSA and the Analogue Act. The indictment alleged that although MDPV, methylone, and 4–MEC were not controlled substances at the time of McFadden's distribution, these three compounds nonetheless qualified as controlled substance analogues by virtue of their chemical structures and physiological effects. See 21 U.S.C. § 802(32)(A)

. The grand jury charged McFadden with one count of conspiracy to distribute controlled substance analogues between June 2011 and February 2012 (Count One), and eight counts of distribution of controlled substance analogues. Three counts of distribution corresponded with three different shipments made on July 25, 2011 (Count Two), August 11, 2011 (Count Three), and August 24, 2011 (Count Four), before police officers began supervising telephone conversations between McFadden and McDaniel on August 25, 2011. Five counts of distribution corresponded with five different shipments made on August 26, 2011 (Count Five), September 16, 2011 (Count Six), October 27, 2011 (Count Seven), January 6, 2012 (Count Eight), and February 2, 2012 (Count Nine), after the police officers began directing and monitoring McDaniel's communications with McFadden.

In a motion to dismiss the indictment and in his proposed jury instructions, McFadden argued that the government was required to prove that he knew the substances he distributed were controlled substance analogues under the Analogue Act. Under McFadden's proposed jury instruction, the government would have been required to prove that McFadden knew that the analogues had substantially similar chemical structures and physiological effects as those of controlled substances.

The district court denied McFadden's motion, relying on this Court's opinion in United States v. Klecker, 348 F.3d 69, 71 (4th Cir.2003)

(requiring the government to prove only that a substance had the chemical structure and physiological effects of an analogue and that the defendant intended the substance be consumed by humans). During the four-day trial, McFadden presented evidence that he was not aware of the Analogue Act, or that the CSA prohibited the distribution of controlled substance analogues. The district court instructed the jury consistent with the holding in Klecker, and the jury returned a guilty verdict on all nine counts.

At his sentencing hearing, McFadden argued that he had been careful not to sell any substances listed on the controlled substance schedules. McFadden and the government stipulated that McFadden had consulted the DEA website for the list of controlled substances, and that the website did not contain any warning at the time that controlled substance...