United States v. Khalid Hamdan , 910 F.3d 351 ( 2018 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 18-1327
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
KHALID HAMDAN,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 16 CR 252 — Manish S. Shah, Judge.
____________________
ARGUED SEPTEMBER 25, 2018 — DECIDED DECEMBER 11, 2018
____________________
Before KANNE, ROVNER, and BARRETT, Circuit Judges.
KANNE, Circuit Judge. Khalid Hamdan appeals his 2014
conviction on three counts related to his activities involving
XLR-11, a Schedule I synthetic cannabinoid used to make the
street drug “spice.” On appeal, Hamdan argues the district
court abused its discretion by granting the government’s mo-
tion to quash Hamdan’s subpoenas of two Wisconsin state
troopers. The troopers previously arrested and questioned
Hamdan after a 2012 traffic stop where Hamdan possessed a
2 No. 18-1327
different synthetic cannabinoid. According to Hamdan, this
evidence would have supported his defense that he honestly
believed synthetic cannabinoids were legal substances and he
therefore lacked the requisite mens rea to commit the alleged
crimes. Hamdan similarly argues that the district court
abused its discretion in failing to grant his motion for a new
trial because the district court’s evidentiary rulings jeopard-
ized his right to present his theory of defense. Because the dis-
trict court did not abuse its discretion, we affirm.
I. BACKGROUND
Khalid Hamdan was arrested after an October 30, 2014,
traffic stop revealed he was driving on a suspended license.
In the vehicle with Hamdan at the time was a man named
Fadel Yahia and a shoebox on the backseat containing more
than $67,000 in cash. Officers discovered the money after
Hamdan consented to their search of his car. Although
Hamdan’s explanation of the money’s origin and purpose
would change over time, he generally claimed it constituted
proceeds from past sales of dollar store businesses.
Police additionally found a business card for a Public Stor-
age business inscribed with unit and access code information.
After Hamdan denied knowledge of the storage unit, police
obtained a search warrant. Despite Hamdan’s denial, one of
the keys he was carrying during the arrest opened the lock at
the storage unit identified on the Public Storage business
card.
Fadel Yahia, on the other hand, cooperated with law en-
forcement. He told them that he was employed by Hamdan
(who paid Yahia in cash) and alerted them to the existence of
a second, “U-Stor It” storage unit. The second unit was rented
No. 18-1327 3
in Yahia’s name, but Yahia insisted Hamdan controlled it. An-
other of Hamdan’s keys opened the unit’s lock. With Yahia’s
consent, police searched the second storage unit and discov-
ered boxes inside emblazoned with Hamdan’s name and ad-
dress.
When examining both storage units, the officers discov-
ered a total of approximately 20,000 packages of spice. Offic-
ers also found the necessary tools and ingredients to make
spice: a blue tarp, a digital scale, bottles of acetone, bottles of
flavoring, boxes containing a green leafy substance, and a
plastic bag filled with a white powdery substance containing
the synthetic cannabinoid XLR-11. Officers also recovered
handwritten ledgers detailing sales and inventory.
On April 12, 2016, a grand jury indicted Hamdan in two
counts of possession of a controlled substance with intent to
distribute and one count of conspiracy to manufacture a con-
trolled substance in violation of 21 U.S.C. §§ 841 & 846, re-
spectively. The indictment charged Hamdan for his activities
ranging from April 2014 until his arrest in October 2014.
While mustering his defense, Hamdan indicated he would
argue that he did not know or believe that his spice-related
activities were illegal. Hamdan planned to introduce, among
other things, evidence that he was previously arrested—but
not prosecuted or convicted—for activities related to spice in
Illinois in 2011 and in Wisconsin in 2012. Accordingly,
Hamdan sought to subpoena two Wisconsin state troopers
who arrested and interviewed him, in part, on synthetic can-
nabinoid charges following a June 2, 2012, traffic stop. In the
2012 case, Hamdan ultimately pled guilty to misdemeanor
possession of THC and the prosecution dropped a controlled
4 No. 18-1327
substance analogue charge for Hamdan’s possession of an-
other synthetic cannabinoid. Hamdan contended that evi-
dence of his non-prosecution for other synthetic cannabinoids
supported his claim that he sincerely believed his conduct in
2014 was legal. Additionally, Hamdan sought to argue that
XLR-11 was not a Schedule I controlled substance prior to
May 16, 2013.
The government opposed Hamdan’s proposed evidence
and filed motions in limine urging the district court to exclude
evidence that spice was previously “legal.” The government
also moved the court to exclude evidence showing that in the
past other jurisdictions declined to prosecute Hamdan for of-
fenses related to different synthetic cannabinoids. Similarly,
the government filed a motion to quash Hamdan’s subpoenas
of the Wisconsin state troopers, arguing that Hamdan’s 2012
interactions with the Wisconsin officers were irrelevant to
Hamdan’s arrest on October 30, 2014 and that their testimony
would be prejudicial.
On June 20, 2017, the district court excluded evidence of
Hamdan’s previous non-prosecution and spice’s former legal
status. The court reasoned,
[d]ecisions not to prosecute defendant for posses-
sion of other synthetic cannabinoids years before the
conduct alleged in the indictment do not tend to
show that defendant believed the substance in this
case was not controlled. A decision not to prosecute
is not a statement of legality and it has no bearing on
XLR 11’s status in defendant’s mind.
(R. 72 at 2).
The district court also remarked that although XLR-11 was
not listed as a Schedule I controlled substance prior to May
No. 18-1327 5
2013, it had been a controlled substance analogue since 2011.
As a result, the court explained, “it would not be correct to
describe XLR 11 as ‘legal’ before May 2013, and therefore
[Hamdan] is prohibited from making such an argument.” Id.
Despite partially granting the government’s motions, the
court noted that Hamdan could still present evidence demon-
strating his personal belief that XLR-11 was not a controlled
substance and suggested it would revisit the admissibility of
specific evidence if Hamdan established the connection of the
evidence to his mental state.
Similarly, the district court granted the government’s mo-
tion to quash the subpoenas. Hamdan’s attorney stated that,
in light of the court’s ruling, the troopers’ testimony would
not be used to show that Hamdan was not previously prose-
cuted for possession of synthetic cannabinoids. Instead,
Hamdan’s attorney told the court the troopers’ testimony
would confirm Hamdan did not believe synthetic canna-
binoids were illegal. Hamdan’s attorney indicated that the
Wisconsin troopers were unfamiliar with the white powdery
substance they found in Hamdan’s car in 2012 and that they
did not know whether it was an illegal substance or not. Ac-
cording to Hamdan’s attorney, the fact that even law enforce-
ment officers were unsure about the legality of a synthetic
cannabinoid substance supported Hamdan’s argument that
he could not have possibly known that synthetic canna-
binoids were illegal. The district court found that the Wiscon-
sin officers' testimony regarding Hamdan’s 2012 arrest for a
different synthetic cannabinoid was irrelevant to his mental
state in 2014 concerning XLR-11. Further, the court noted that
even if the testimony was weakly probative, its value was
substantially outweighed by the likelihood of confusing the
jury.
6 No. 18-1327
The case continued to trial, where the government pre-
sented evidence indicating that Hamdan knew his spice busi-
ness was illegal. Through testimony and exhibits, the govern-
ment submitted that Hamdan ran his spice business out of
storage units in low-traffic areas, that the units were rented in
others’ names, that Hamdan actually controlled the units, and
that he employed a lookout while he manufactured spice.
Two of Hamdan’s associates testified against him. Yahia testi-
fied that Hamdan paid him in cash to perform a variety of
tasks including packaging spice, renting storage units, and
acting as a lookout. The other associate stated that Hamdan
hired him to transport chemicals from Florida and also paid
him in cash. Officers testified that Hamdan provided incon-
sistent and false explanations for the cash found in his car.
Expert witnesses provided testimony concluding that
Hamdan’s operations had the hallmarks of illegal drug trade
and that his fingerprints were found on the packages of the
finished product.
Hamdan’s attorney made arguments that the government
failed to prove Hamdan knew his activities were illegal and
further that Hamdan did not believe his activities were illegal.
He argued that spice was previously “legal,” sold openly at
gas stations, and that it eventually became illegal. Hamdan’s
attorney also argued that spice could be made from a variety
of ingredients and emphasized that without laboratory anal-
ysis, a person possessing spice may not know its precise con-
tents.
On January 16, 2018, a jury convicted Hamdan on all three
counts. Hamdan moved for a new trial under Fed. R. Crim. P.
33 on the basis that the district court’s pre-trial evidentiary
rulings prevented him from presenting evidence that he did
No. 18-1327 7
not know his actions relating to the manufacture and distri-
bution of spice were illegal. This, Hamdan argued, prevented
him from presenting his theory of defense. Hamdan further
argued that the evidence of his prior arrests would have pro-
vided an alternate explanation for why his spice operations
were conducted in the obscurity of the storage units: Hamdan
was simply avoiding more police harassment of his legitimate
business activities. The district court deemed Hamdan’s new
justification for the evidence as forfeited and denied his mo-
tion for a new trial. The district court ultimately sentenced
Hamdan to 120 months’ imprisonment and three years of su-
pervised release, and ordered the forfeiture of $67,900.
II. ANALYSIS
On appeal, Hamdan argues the district court abused its
discretion in two ways. First, the district court abused its dis-
cretion by quashing Hamdan’s subpoenas of the Wisconsin
troopers involved in his 2012 arrest. According to Hamdan,
this error deprived him of his right to present his theory of
defense, and forced him to choose between his Fifth Amend-
ment right not to testify against himself and proffering his
theory. Second, the district court abused its discretion by not
granting Hamdan’s Rule 33 motion for a new trial, where he
could have subpoenaed witnesses and offered testimony rel-
evant to his beliefs about synthetic cannabinoids’ legality. In-
tegral to both claims is the Controlled Substances Act’s
knowledge requirement. Hamdan suggests the Wisconsin
troopers’ testimony would have helped him negate the stat-
ute’s knowledge element by showing he did not believe syn-
thetic cannabinoids were illegal.
8 No. 18-1327
A. The Controlled Substances Actʹs Knowledge Requirement
Hamdan was convicted of both possession of a controlled
substance with intent to distribute and conspiracy to manu-
facture a controlled substance under the Controlled Sub-
stances Act, 21 U.S.C. §§ 841 & 846. Section 841 provides, “it
shall be unlawful for any person knowingly or intention-
ally…to manufacture, distribute, or dispense, or possess with
intent to manufacture, distribute, or dispense, a controlled
substance[.]” 21 U.S.C. § 841(a)(1). Section 846 criminalizes
conspiracy and attempts to commit the crimes identified in
§ 841. “[Section] 841(a)(1) requires the Government to estab-
lish that the defendant knew he was dealing with ‘a controlled
substance.’” McFadden v. United States, 135 S. Ct. 2298, 2302
(2015).
The Supreme Court explained that the knowledge element
of the Controlled Substances Act could be proven in two
ways. First, the knowledge requirement “may be met by
showing that the defendant knew he possessed a substance
listed on the schedules, even if he did not know which sub-
stance it was.” Id. at 2304. Second, the knowledge requirement
may also be met “by showing that the defendant knew the
identity of the substance he possessed.” Id.
The first of the two methods is relevant to Hamdan's de-
fense—he claims he did not know synthetic cannabinoids
were illicit. The court gave an example of how one might not
know the identity of the substance, but still might know that
it was illegal:
Take, for example, a defendant whose role in a larger
drug organization is to distribute a white powder to
customers. The defendant may know that the white
powder is listed on the schedules even if he does not
No. 18-1327 9
know precisely what substance it is. And if so, he
would be guilty of knowingly distributing “a con-
trolled substance.”
Id. See also United States v. Mire, 725 F.3d 665, 679 (7th Cir.
2013) (“It does not matter whether [the defendant] knew that
khat contained cathinone or cathine; all that matters is [the
defendant] knew that khat contained an illegal substance.
This distinction is key because having to prove a defendant
knew the particular controlled substance at issue would be a
much more difficult undertaking.”).
To prove Hamdan’s knowledge that he possessed a con-
trolled substance, the government need not provide direct ev-
idence, but can offer circumstantial evidence of Hamdan's
knowledge. McFadden, 135 S. Ct. at 2308 n.3. “As with prose-
cutions involving substances actually listed on the drug
schedules, the Government may offer circumstantial evidence
of that knowledge.” Id. See also Mire, 725 F.3d at 679; United
States v. Griffin, 150 F.3d 778, 785 (7th Cir. 1998).
B. The District Court Did Not Abuse Its Discretion When It
Quashed Hamdanʹs Subpoenas
Hamdan argues that the district court abused its discre-
tion by granting the government's motion to quash his sub-
poenas of the state troopers. As with other evidentiary deter-
minations, we review the district court’s rulings on a motion
to quash subpoenas for an abuse of discretion. United States v.
Ashman, 979 F.2d 469, 495 (7th Cir. 1992); United States v. Ajayi,
808 F.3d 1113, 1121 (7th Cir. 2015). We will reverse the district
court only “when no reasonable person could take the view
adopted by the trial court.” United States v. Ozuna, 561 F.3d
728, 738 (7th Cir. 2009) (quoting United States v. Khan, 508 F.3d
10 No. 18-1327
413, 417 (7th Cir. 2007)). “A district court may exclude collat-
eral or irrelevant evidence where its tendency to mislead and
confuse the jury substantially outweighs its probative value.”
Ozuna, 561 F.3d at 738.
In this case, we cannot agree with Hamdan that the district
court abused its discretion. Hamdan’s proposed evidence was
largely irrelevant to the issues at trial. The synthetic canna-
binoid involved in the 2012 Wisconsin arrest was not XLR-11,
the substance at issue here. The two incidents were remote in
time and Hamdan’s knowledge of XLR-11’s illegality could
have changed over the years. Additionally, the troopers’ tes-
timony regarding their own beliefs about the substance dis-
covered in Hamdan’s car during the 2012 arrest would not
provide meaningful insight into Hamdan's mental state in
2014.
We also agree with the district court that the troopers' tes-
timony could have caused confusion and prejudice: jurors
could have easily lost track of the purpose for which Hamdan
was introducing the troopers' testimony. Instead of listening
for evidence of and insights into Hamdan's knowledge in
2014, jurors could view law enforcement officials' testimony
with an “authoritative gloss.” The district court's concerns
were entirely reasonable, and given the tenuous connection
between Hamdan's proffer and his knowledge in 2014, it did
not err by quashing the subpoenas.
C. The District Court Did Not Abuse Its Discretion by Deny-
ing Hamdanʹs Motion for a New Trial
Hamdan similarly argues that the district court abused its
discretion by denying his motion for a new trial because the
district court's evidentiary rulings effectively deprived him of
No. 18-1327 11
his opportunity to present his theory of defense. Specifically,
Hamdan claims that excluding his proposed evidence and
quashing his subpoenas, the district court forced him to
choose between presenting his theory of defense and testify-
ing against himself in violation of his Fifth Amendment
rights. We disagree.
We review a district court’s rulings on a motion to grant a
new trial for an abuse of discretion. United States v. Peterson,
823 F.3d 1113, 1132 (7th Cir. 2016). Our review of the district
court’s denial is “highly deferential, recognizing that the ‘ex-
ercise of power conferred by Rule 33 is reserved for only the
most extreme cases.’” United States v. Conley, 875 F.3d 391, 399
(7th Cir. 2017) (quoting United States v. Peterson, 823 F.3d 1113,
1122 (7th Cir. 2016)).
Rule 33 provides that the district court may “vacate any
judgment and grant a new trial if the interest of justice so re-
quires.” Fed. R. Crim. P. 33(a). As we explained in United
States v. Kuzniar, 881 F.2d 466, 470 (7th Cir. 1989), “courts have
interpreted the rule to require a new trial ‘in the interests of
justice’ in a variety of situations in which the substantial rights
of the defendant have been jeopardized by errors or omissions
during trial.”
This is not a case where the district court’s evidentiary rul-
ings constituted errors that jeopardized Hamdan’s rights.
Hamdan was not deprived of his theory of defense. Hamdan's
theory at trial included his claims that he did not know that
the chemicals he had been processing since 2010 ever became
illegal. Moreover, his counsel pointed out that the products
Hamdan was manufacturing were previously sold at dollar
stores, gas stations, and tobacco shops—a fact suggesting that
12 No. 18-1327
the spice product had been legitimate at one time. Most sig-
nificantly, despite excluding some of Hamdan’s proposed ev-
idence and quashing his subpoenas to the Wisconsin troopers,
the district court explicitly left the door open to the possibility
that he could proffer evidence relevant to his knowledge of
spice’s legal status in 2014. The district court therefore did not
prevent Hamdan from employing his preferred theory of de-
fense. Rather, it permissibly declined to let him present evi-
dence it deemed irrelevant, confusing, and prejudicial.
III. CONCLUSION
The district court did not err by quashing Hamdan's subpoe-
nas of the Wisconsin state troopers. The proposed testimony
by the troopers about an arrest that occurred years before this
case was irrelevant to Hamdan's mental state and would have
likely been confusing to jurors and prejudicial. Similarly, the
district court's evidentiary rulings did not deprive Hamdan
of his right to present his theory of defense. AFFIRMED.