United States v. Marty Stacy ( 2014 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 13-3551
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
MARTY C. STACY,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Southern District of Illinois.
No. 12 CR 40094-001 — J. Phil Gilbert, Judge.
____________________
ARGUED SEPTEMBER 10, 2014 — DECIDED OCTOBER 20, 2014
____________________
Before WOOD, Chief Judge, and EASTERBROOK and TINDER,
Circuit Judges.
TINDER, Circuit Judge. Marty Stacy was convicted after a
jury trial of conspiracy to manufacture methamphetamine,
21 U.S.C. §§ 841(a)(1), 846, and possession of pseudoephed-
rine knowing that it would be used to manufacture meth-
amphetamine, 21 U.S.C. § 841(c)(2). The district court sen-
tenced him to a prison term of 336 months. On appeal, Stacy
argues that the district court misapplied Federal Rule of Ev-
2 No. 13-3551
idence 404(b) by admitting evidence of his prior possession
of methamphetamine and unreasonably imposed a prison
sentence that did not account for an alleged disparity in
treatment of pseudoephedrine and methamphetamine of-
fenses. We affirm Stacy’s conviction and sentence. We con-
clude that the district court erred in admitting the evidence
of his prior acts under the approach to Rule 404(b) adopted
in United States v. Gomez, 763 F.3d 845 (7th Cir. 2014) (en
banc), but that the error was harmless.
I. BACKGROUND
In May 2012, Michael Bertin, a sheriff’s deputy in Rich-
land County, Illinois, initiated a traffic stop of a truck driven
by 17-year-old Kaleb Bracken in which Stacy was a passen-
ger. Bertin knew at the time that Stacy and Bracken had re-
cently purchased notable quantities of pseudoephedrine
pills from local pharmacies, possibly for use in manufactur-
ing methamphetamine. When an officer then found a glass
smoking pipe in the truck, Stacy and Bracken were arrested
for possession of methamphetamine. Eventually, Stacy was
charged with one count of conspiracy to manufacture meth-
amphetamine and four counts of possession of
pseudoephedrine knowing that it would be used to manu-
facture methamphetamine.
A. NOTICE OF INTENT TO USE PRIOR-ACT
EVIDENCE
As Stacy headed to trial, the government provided notice
that it planned to introduce evidence under Rule 404(b)
about his arrest in March 2008 for possession of metham-
phetamine. Stacy objected, arguing that this evidence was
highly prejudicial and had low probative value because it
No. 13-3551 3
involved different co-conspirators and possession rather
than manufacture of methamphetamine. At a hearing on the
matter, the government noted that Stacy had been found in
2008 with a bag of methamphetamine in his pocket and ar-
gued that this evidence went “to the heart of the intent” for
the charged crimes. Without analyzing the government’s ar-
gument, the district court stated that it would allow the evi-
dence as long as the government laid a proper foundation at
trial. The court promised to caution the jury about the lim-
ited use of the evidence under Rule 404(b).
B. TRIAL EVIDENCE
Stacy’s trial lasted two days. Despite getting initial per-
mission to present evidence about the 2008 incident, the
government did not introduce that evidence until midway
through the second day. Before that, the government pre-
sented testimony about Stacy’s efforts in 2010 through 2012
to obtain pseudoephedrine pills for use in making metham-
phetamine.
The government’s first witnesses explained that
pseudoephedrine pills are necessary to make methamphet-
amine and legally obtainable from local pharmacies. Phar-
macies must log pseudoephedrine sales in a national data-
base and check purchases against that database to make sure
that no single person exceeds daily or monthly purchasing
limits. People who cook methamphetamine sometimes seek
to circumvent those limits, a police consultant said, by send-
ing other people to purchase pills—a process called “smurf-
ing.” The government introduced logs from the national da-
tabase showing the pseudoephedrine purchases of Stacy and
his alleged coconspirators.
4 No. 13-3551
The government next presented eyewitness testimony
about Stacy’s use of “smurfs” to purchase pseudoephedrine
pills for making methamphetamine. Four witnesses, includ-
ing Kaleb Bracken and Jennie Edgington, who was living
with Stacy when he was arrested, testified that they had
purchased pseudoephedrine pills and given them to Stacy
for use in manufacturing methamphetamine on multiple oc-
casions. Bracken also testified that the pipe found at Stacy’s
arrest is for smoking methamphetamine and that it was not
in his truck before he picked up Stacy. Edgington told the
jury that police recovered a scale used to weigh metham-
phetamine from Stacy’s room after his arrest. A fifth witness
testified that Stacy had provided her and her boyfriend,
Chris Stout, with pills and other supplies for making meth-
amphetamine.
The government then presented Sheriff Andy Hires,
warning the district court that his testimony would consti-
tute evidence of a prior act. The government asserted that it
was introducing the testimony to prove “intent and
knowledge”—that Stacy knew pseudoephedrine “was a con-
trolled substance and that it was for the purpose of making
methamphetamine.” The district court did not conduct any
further analysis, but gave an instruction cautioning the jury
to consider Hires’s testimony only on the issues of intent and
knowledge, not Stacy’s propensity to commit the charged
offenses.
Hires testified that in March 2008 he responded to a call
about a vehicle parked at an abandoned house and encoun-
tered Stacy and two other men inside the house. He said that
a dog brought to the house alerted to the presence of drugs,
leading to a search of Stacy and the vehicle. Hires explained
No. 13-3551 5
that Stacy had “a small corner-cut baggy that had a white
powdery substance” in his pocket and identified the bag as
an exhibit introduced by the government. Hires added that
his team also found two packages of pseudoephedrine pills
in the trunk of the vehicle along with methamphetamine res-
idue and additional items used to manufacture metham-
phetamine. On cross-examination, defense counsel elicited
that Stacy was charged with possession of methampheta-
mine at that time, but that case “was disposed of.” A second
officer confirmed that he helped preserve the bag found in
Stacy’s pocket.
The government continued by presenting additional evi-
dence about Stacy’s involvement with methamphetamine.
The government showed the jury the scale recovered from
Stacy’s room, and a forensic scientist testified that there was
methamphetamine residue on it. Two methamphetamine
cooks, Chris Stout and Jason Banker, testified that Stacy had
provided them with pseudoephedrine for making metham-
phetamine. Banker added that he had seen Stacy using a
scale to weigh methamphetamine. An additional witness, a
smurf, testified about giving pills to Stacy for use in making
methamphetamine and about using the drug with him.
Finally, the government presented sheriff’s deputy Mi-
chael Bertin, who was involved in investigating Stacy’s ac-
tivities in both 2008 and 2012. Bertin confirmed the chain of
custody for the bag of methamphetamine found on Stacy in
March 2008. He also testified about recovering the glass
smoking pipe from the vehicle at Stacy’s arrest in 2012, and
he spoke about the search of Stacy’s residence, where police
found an electronic scale for weighing methamphetamine on
a dresser in his room and a pill container with one
6 No. 13-3551
pseudoephedrine pill and one painkiller. Lastly, Bertin dis-
cussed a summary of pharmacy logs showing that, on mul-
tiple occasions, Stacy and his affiliates had made purchases
of pseudoephedrine pills within short time frames of each
other.
The government then rested its case. Stacy discussed
with the district judge the possibility of testifying himself—
acknowledging that he “took a blood bath yesterday”—but
ultimately did not present any evidence in defense. The
court again warned the jury not to consider the evidence of
Stacy’s earlier crime for any purpose other than determining
intent, knowledge, or lack of mistake. The jury returned a
verdict of guilty on all five counts and a special verdict find-
ing that the conspiracy involved manufacturing more than
50 grams of methamphetamine.
C. SENTENCING
In advance of sentencing, a probation officer, using
pharmacy logs, determined that Stacy was responsible for
relevant conduct involving 326.98 grams of pseudoephed-
rine. The probation officer also recommended an offense-
level increase of two for Stacy using a person under eight-
een, Kaleb Bracken, to commit the offense. U.S.S.G. § 3B1.4.
The total recommended offense level was 36 with a criminal
history category of VI, for an advisory sentencing range of
324 to 405 months for the conspiracy count and 240
months—the statutory maximum—for the pseudoephedrine
counts.
The district court accepted the probation officer’s rec-
ommendations and imposed a within-range prison sentence
of 336 months. In asking for leniency, Stacy’s attorney em-
No. 13-3551 7
phasized that Stacy was 47 years old and would reach age 70
in prison even if given a sentence at the low end of the sen-
tencing range. The court decided, however, that none of the
factors under 18 U.S.C. § 3553(a) weighed in Stacy’s favor,
explaining that Stacy is “no dummy” and knew better than
to manufacture methamphetamine, and that he had “one of
the worst criminal histories” the court had ever seen.
II. DISCUSSION
A. EVIDENCE OF OTHER ACTS
Rule 404(b)(1) prohibits the admission of evidence of
crimes, wrongs, or other acts for the purpose of proving a
person’s character or propensity to behave in a certain way.
Rule 404(b)(2), however, allows admission of other-act evi-
dence “for another purpose, such as proving motive, oppor-
tunity, intent, preparation, plan, knowledge, identity, ab-
sence of mistake, or lack of accident.”
Before our decision in Gomez, we determined admissibil-
ity under Rule 404(b) using a four-part test that analyzed
“whether (1) the evidence is directed toward establishing a
matter in issue other than the defendant’s propensity to
commit the crime charged, (2) the evidence shows that the
other act is similar enough and close enough in time to be
relevant to the matter in issue, (3) the evidence is sufficient
to support a jury finding that the defendant committed the
similar act, and (4) the probative value of the evidence is not
substantially outweighed by the danger of unfair prejudice.”
United States v. Zapata, 871 F.2d 616, 620 (7th Cir. 1989). In
Gomez, however, this court, sitting en banc, abandoned that
approach, noting that, “[e]specially in drug cases like this
one, other-act evidence is too often admitted almost auto-
8 No. 13-3551
matically, without consideration of the ‘legitimacy of the
purpose for which the evidence is to be used and the need
for it.’” 763 F.3d at 853 (quoting United States v. Miller, 673
F.3d 688, 692 (7th Cir. 2012)). We thus adopted “a more
straightforward rules-based approach,” which is summa-
rized as follows:
[T]o overcome an opponent’s objection to the
introduction of other-act evidence, the propo-
nent of the evidence must first establish that
the other act is relevant to a specific purpose
other than the person’s character or propensity
to behave in a certain way. See Fed. R. Evid.
401, 402, 404(b). Other-act evidence need not be
excluded whenever a propensity inference can
be drawn. But its relevance to “another pur-
pose” must be established through a chain of
reasoning that does not rely on the forbidden
inference that the person has a certain charac-
ter and acted in accordance with that character
on the occasion charged in the case. If the pro-
ponent can make this initial showing, the dis-
trict court must in every case assess whether
the probative value of the other-act evidence is
substantially outweighed by the risk of unfair
prejudice and may exclude the evidence un-
der Rule 403 if the risk is too great. The
court’s Rule 403 balancing should take account
of the extent to which the non-propensity fact
for which the evidence is offered actually is at
issue in the case.
Id. at 853, 860.
No. 13-3551 9
Applying this new test, we determined that the district
court erred by admitting evidence of cocaine found in
Gomez’s bedroom in his trial for conspiracy to distribute co-
caine. Id. at 862–63. The government had introduced phone
calls discussing cocaine deals from Gomez’s alleged cocon-
spirator to someone in Gomez’s residence, and Gomez argued
mistaken identity. The district court then allowed the gov-
ernment to introduce the cocaine found in Gomez’s bedroom
for the purpose of proving identity. We explained, however,
that the government’s identity argument relied on a forbid-
den propensity inference—that Gomez was more likely the
culprit because he had possessed drugs before—and that the
government had failed to explain “how the evidence is rele-
vant in a propensity-free way.” Id. at 863 (emphasis in origi-
nal).
The same flaw underlies the government’s argument
here. The government maintains that the events surrounding
Stacy’s prior possession of methamphetamine—particularly
the presence of pseudoephedrine pills—were probative of
his intent to use pseudoephedrine to make methampheta-
mine and his knowledge of the process for making metham-
phetamine. But as in Gomez, this argument relies on a pro-
pensity inference: that Stacy’s history of involvement with
methamphetamine manufacturing makes it more likely that
he intended to use the pseudoephedrine pills he collected in
2010 through 2012 to make methamphetamine. For that rea-
son, we are persuaded that the court erred by admitting the
evidence of Stacy’s prior involvement with methampheta-
mine. See United States v. Chapman, 765 F.3d 720, 726–27 (7th
Cir. 2014) (concluding that admission of prior drug convic-
tion to prove intent to distribute was error); United States v.
Lee, 724 F.3d 968, 980 (7th Cir. 2013) (same); Miller, 673 F.3d
10 No. 13-3551
at 699-700 (same); see also Gomez, 763 F.3d at 862–63 (rejecting
government’s argument as relying on the theory of “[o]nce a
drug dealer, always a drug dealer”).
Even if the government could somehow muster a per-
missible purpose for this evidence, it would not remedy the
district court’s decision to admit it without assessing wheth-
er the government had established a specific, permissible
purpose for the evidence under Rule 404(b) or whether the
probative value of the evidence was substantially out-
weighed by the risk of unfair prejudice under Rule 403. The
court accepted the government’s asserted purpose for the
evidence without explanation, offering only a limiting in-
struction as a safeguard against the evidence’s misuse. More
analysis is warranted “where, as here, reasonable minds
could disagree as to which exception to Rule 404(b) applies,
whether an exception applies at all, and whether the
strength of the evidence outweighs its potential for undue
prejudice.” United States v. Moore, 641 F.3d 812, 823 (7th Cir.
2011). Without an articulation of the district court’s rationale,
it is difficult for us to determine that the court properly ob-
served the limits of Rule 404(b). See Lee, 724 F.3d at 977–78;
Moore, 641 F.3d at 822–23; United States v. Beasley, 809 F.2d
1273, 1279–80 (7th Cir. 1987).
The jury instructions about the limits of Rule 404(b) did
not cure the district court’s error. The boilerplate instruc-
tions given in this case allowed the jury to consider the evi-
dence of Stacy’s prior act for the purpose of assessing “in-
tent, knowledge, and absence of mistake.” Although jury in-
structions may help reduce the risk of unfair prejudice from
other-act evidence—especially when “customized to the case
rather than boilerplate,” Gomez, 763 F.3d at 860—when, as
No. 13-3551 11
here, “the government cannot explain how the prior convic-
tion relates to the question of intent without resorting to a
propensity inference, it would be unfair to expect the jury to
do so based only on [a limiting] instruction,” Miller, 673 F.3d
at 702; see Lee, 724 F.3d at 980.
Nonetheless, we are persuaded that the error here was
harmless. To determine whether an evidentiary error is
harmless, the court must decide “‘whether, in the mind of
the average juror, the prosecution’s case would have been
significantly less persuasive had the improper evidence been
excluded.’” Gomez, 763 F.3d at 863 (quoting United States v.
Vargas, 689 F.3d 867, 875 (7th Cir. 2012)). In Gomez, for exam-
ple, we concluded that admission of cocaine found in
Gomez’s bedroom was harmless because additional evi-
dence identifying him as the second person on incriminating
phone calls “was quite compelling and would not have been
less so had the other-act evidence been excluded.” Id.The same is true for the evidence of Stacy’s intent to pro-
vide pseudoephedrine for use in manufacturing metham-
phetamine. Even before introduction of evidence about Sta-
cy’s prior acts, numerous witnesses testified about how they
provided Stacy with pseudoephedrine pills for the purpose
of making methamphetamine. The government backed up
this testimony with purchase logs from local pharmacies.
Multiple other witnesses, including two who admitted to
manufacturing methamphetamine, testified that they had
received pseudoephedrine pills from Stacy to make into
methamphetamine. This testimony was enough for the jury
to convict Stacy even without the evidence of his possession
of methamphetamine in 2008.
12 No. 13-3551
Stacy concedes that there was sufficient evidence to con-
vict him but insists that the admission of the bag of meth-
amphetamine nonetheless prejudiced his case because of the
powerful effect of physical evidence on a jury. This argu-
ment might be more persuasive if the bag was the only phys-
ical evidence linking him to the manufacture of metham-
phetamine, but it was not. The government showed the jury
the scale found in Stacy’s bedroom, along with analysis from
a forensic scientist that there was methamphetamine residue
on the scale and testimony confirming that the scale was
used to weigh methamphetamine. The jury also saw the
glass smoking pipe found at Stacy’s arrest and heard testi-
mony from a coconspirator about him using a pipe to smoke
methamphetamine.
In light of this compelling evidence of Stacy’s knowledge
and intent, we are not convinced that the government’s case
would have been significantly less persuasive without the
evidence of Stacy’s prior drug possession. As in Gomez, the
government’s case here was strong, and the district court’s
error in admitting the evidence of prior acts under Rule
404(b) was harmless.
B. SENTENCING
Stacy concedes that the district court correctly deter-
mined the guidelines imprisonment range. 1 He argues, how-
1 Stacy does contend that the probation officer miscalculated the base of-
fense level for count one by converting the amount of pseudoephedrine di-
rectly into an amount of marijuana. Instead, he argues, the officer should
have first converted the pseudoephedrine quantity to an amount of a mix-
ture and substance containing methamphetamine using a yield rate dis-
cussed by Jordon Banker during trial. But Stacy admits that this issue did
not affect the guidelines range because the offense level for counts two
No. 13-3551 13
ever, that the district court failed to consider whether the
guidelines treat pseudoephedrine too harshly “based pri-
marily on incorrect assumptions as to the quality of meth-
amphetamine that would be produced from the
pseudoephedrine.” He contends that the court should have
addressed whether the United States Sentencing Commis-
sion’s adoption of a yield ratio of 50% for conversion of
pseudoephedrine to methamphetamine unfairly results in
stiffer punishment for those who procure pseudoephedrine
than for those who actually make methamphetamine.
See U.S.S.G. § 2D1.1, cmt. n.8(D) (listing conversion ratios to
marijuana of 1g to 10kg for pseudoephedrine and 1g to 20kg
for actual methamphetamine); United States v. Martin, 438
F.3d 621, 625 (6th Cir. 2006) (discussing adoption of 50%
yield ratio).
Because Stacy never raised this argument in the district
court, the government argues that our review is for plain er-
ror. Under that standard, reversal is warranted only if an er-
ror seriously affected “the fairness, integrity or public repu-
tation of judicial proceedings.” United States v. Olano, 507
U.S. 725, 732 (1993) (quotations omitted); see United States v.
Newbern, 633 F.3d 599, 602 (7th Cir. 2011). Stacy argues,
however, that our review is for abuse of discretion because
he challenges only the substantive reasonableness of his sen-
tence. See Gall v. United States, 552 U.S. 38, 51 (2007); United
through five was 36 under U.S.S.G. § 2D1.11(d)(3)—when combined with the
two-level increase for involvement of a minor—and that this offense level
applied to count one under U.S.S.G. §§ 3D1.2(d) and 3D1.3(b). Because this
issue did not affect the advisory sentencing range, we need not address it
further.
14 No. 13-3551
States v. Marin-Castano, 688 F.3d 899, 902 (7th Cir. 2012). He
acknowledges that, even under that standard, we apply a
presumption of reasonableness to his sentence because it
was within the guidelines range. See Rita v. United States, 551
U.S. 338, 347 (2007); United States v. Smith, 721 F.3d 904, 906
(7th Cir.), cert. denied, 134 S. Ct. 660 (2013).
We agree with the government that plain error applies.
Although Stacy insists that his argument relates only to the
facts of this case, his reasoning represents a fundamental
policy disagreement with the Sentencing Commission’s ad-
visory drug ratios. After Kimbrough v. United States, 552 U.S.
85, 107–08 (2007), sentencing judges are free to deviate from
the Commission’s recommendations if they view an adopted
policy as unjust. But when a defendant does not alert the dis-
trict court to this type of policy concern, we have consistent-
ly reviewed appellate challenges on that basis for plain error.
See Newbern, 633 F.3d at 601–02 (reviewing categorical chal-
lenge to career-offender guideline); United States v. White,
582 F.3d 787, 798–99 (7th Cir. 2009) (reviewing challenge to
drug ratio for crack and powder cocaine after Kimbrough);
United States v. Taylor, 520 F.3d 746, 746 (7th Cir. 2008)
(same). Stacy has not presented a persuasive reason to de-
part from that precedent here.
This is not a situation where Stacy lacked an appropriate
opportunity to raise his argument before the district court, as
sometimes occurs when an issue develops for the first time
during sentencing. See United States v. Farmer, 755 F.3d 849,
853–54 (7th Cir. 2014) (noting tension in cases about stand-
ard of review when defendant does not object to judicial de-
cisions made without prior notice). Here, the presentence
report put Stacy on notice that the guideline range would be
No. 13-3551 15
driven by the quantity of pseudoephedrine pills involved in
his offenses. That Stacy failed to object after receiving this
notice further supports application of plain-error review. 2
In any event, Stacy’s argument is not persuasive under
either standard of review. He argues that Congress considers
pseudoephedrine offenses “less serious” than the act of
manufacturing methamphetamine, but that is not apparent.
The statutory minimum and maximum penalties for manu-
facturing methamphetamine are generally harsher than those
for possessing precursor chemicals like pseudoephedrine.
Compare 21 U.S.C. § 841(b)(1)(A)–(C), with id. § 841(c). In
2000, however, Congress responded to the growing use of
methamphetamine by, in part, directing the Sentencing
Commission to ramp up penalties for offenses involving
pseudoephedrine and other precursor chemicals, and to
amend the conversion ratios accordingly. Methamphetamine
Anti-Proliferation Act of 2000, Pub. L. No. 106-310, § 3651(b),
114 Stat. 1238–39. The Commission then enacted U.S.S.G.
§ 2D1.11 to target pseudoephedrine offenses and determined
the yield rate of 50% for conversion of pseudoephedrine to
methamphetamine. See U.S.S.G. app. C, Amendment 625, at
199 (Nov. 1, 2003). Stacy attacks the 50% ratio as meant to
“approximate the amount of pure methamphetamine that a
high-grade laboratory could produce.” But the Commission
based its ratio on a report from the Drug Enforcement Ad-
2 In his objections to the presentence report, Stacy stated, without elabora-
tion, that “the marijuana equivalent conversion ratio in the guidelines is sus-
pect at best as pointed out in numerous decisions.” But counsel said that he
was “choos[ing] not to waste the Court’s time in this regard” and, moreover,
never raised any concern about the conversion ratio for pseudoephedrine to
methamphetamine.
16 No. 13-3551
ministration about the typical yield rate in clandestine labora-
tories. See id.; Martin, 438 F.3d at 625, 634–35 (explaining the
basis for the conversion ratio and concluding district court’s
reliance on it was not plain error). Stacy thus fails to con-
vince us that the district court plainly erred, or even acted
unreasonably, by not mitigating his sentence based on un-
raised concerns about the conversion ratios.
Moreover, the district court gave a thorough explanation
for its decision to impose a prison sentence within the guide-
lines range. The court addressed Stacy’s primary mitigating
argument about his advanced age but concluded that other
§ 3553(a) factors, particularly the seriousness of the scourge
of methamphetamine and Stacy’s extensive criminal history,
warranted a sentence within the guidelines range. Thus, we
see no reason to vacate Stacy’s sentence.
Stacy’s conviction and sentence are AFFIRMED.