United States v. Johal ( 2005 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,  No. 03-30579
Plaintiff-Appellee, D.C. No.
v.
 CR-02-00214-FVS
JOGA SINGH JOHAL, ORDER AND
Defendant-Appellant. AMENDED
 OPINION
Appeal from the United States District Court
for the Eastern District of Washington
Fred L. Van Sickle, Chief Judge, Presiding
Argued and Submitted
January 10, 2005—Seattle, Washington
Filed August 30, 2005
Amended November 9, 2005
Before: Mary M. Schroeder, Chief Judge, Susan P. Graber
and Raymond C. Fisher, Circuit Judges.
Opinion by Judge Fisher
15243
15246 UNITED STATES v. JOHAL
COUNSEL
Sheryl Gordon McCloud, Law Office of Sheryl Gordon
McCloud, Seattle, Washington, for the defendant-appellant.
Russell E. Smoot, Assistant United States Attorney, Spokane,
Washington, for the plaintiff-appellee.
Allen R. Bentley, Law Office of Allen R. Bentley, Seattle,
Washington, for amicus curiae, National Association of Crim-
inal Defense Lawyers.
UNITED STATES v. JOHAL 15247
ORDER
Appellee’s motion to modify the court’s decision, filed
October 18, 2005, is GRANTED.
The opinion filed August 30, 2005, is amended in its
entirety. The Clerk is instructed to file the amended opinion
concurrently with this order.
No further petitions for panel rehearing or petitions for
rehearing en banc will be considered by the court.
OPINION
FISHER, Circuit Judge:
Joga Singh Johal (“Johal”) appeals his conviction for sell-
ing and possessing large quantities of over-the-counter cold
pills containing the ingredient pseudoephedrine “knowing or
having reasonable cause to believe” that they would be used
to manufacture methamphetamine, an illegal substance under
21 U.S.C. § 841(c)(2). Johal argues that § 841(c)(2) imper-
missibly imposes criminal liability without a mens rea
requirement and that it mandates that the illegal substance
actually be produced, foreclosing his conviction under a sting
operation. Johal also alleges that the jury instructions failed to
ensure a unanimous verdict and that the district court should
have found him eligible for a sentence reduction because of
his acceptance of responsibility.
We reject Johal’s contention that a “reasonable cause to
believe” standard, as construed and applied here, permits a
defendant to be convicted without a showing of any criminal
intent. Instead, the standard incorporates both subjective and
objective considerations to ensure the defendant had a suffi-
ciently “guilty mind” in violating the statute. We further hold
15248 UNITED STATES v. JOHAL
that a conviction under the statute does not require that the
illegal drug actually be manufactured. We also conclude that
the trial court did not err in its jury instructions or in denying
Johal a reduction for acceptance of responsibility.
I.
Johal is the owner of a grocery business in Spokane, Wash-
ington, called “J&K Gas & Grocery”. He invested in the store
in 1995, some 10 years after he emigrated to the United
States.
Beginning in the winter of 2001, the Drug Enforcement
Agency (“DEA”) began surveilling Johal’s grocery store and
a number of other convenience stores in the area. The DEA
suspected that grocery store owners were selling excessive
quantities of pseudoephedrine to individuals, who then used
the ingredient to make methamphetamine.
Pseudoephedrine is a chemical ingredient in a number of
cold medicines that can be purchased over-the-counter with-
out a prescription. However, pseudoephedrine, when
extracted from cold pills and mixed with other chemicals, is
also used to manufacture methamphetamine. Certain brands
of pseudoephedrine pills, including Action brand, facilitate
the process of extraction because they do not have a coating
on them.
Johal carried Action brand pseudoephedrine. At some
point, he stopped stocking Action cold pills on the shelves
because he said people were stealing them, and instead began
keeping the medicine behind the counter and in the back room
of the store.
The government indicted Johal based on a series of transac-
tions in which he sold large amounts of Action cold pills to
real or ostensible customers. On March 7, 2002, he sold 61
boxes of Action to P.H., who had agreed to participate in a
UNITED STATES v. JOHAL 15249
DEA undercover sting operation against Johal’s store in
exchange for having criminal charges against her dropped.
P.H. entered the store and bought three boxes while a DEA
Task Force Officer (“DEA Officer”) — working undercover
— waited in a car outside the store. P.H. left the store and
then re-entered with the DEA Officer. In the next half hour,
the DEA Officer and P.H. each made multiple three-box pur-
chases. The DEA Officer asked Johal if they could buy more.
The DEA Officer testified that he told Johal he wanted a case
of Action because he was a cook and wanted to make “crys-
tal,” a shorthand reference to crystal methamphetamine. Johal
told the two to return to the store later that evening. They
returned after the store closed, and Johal sold P.H. 40 more
boxes of Action.
The second controlled purchase occurred on March 13,
2002, by DEA informant D.W. Just a week earlier, D.W. had
purchased from Johal’s store a case of matches, which have
red phosphorous tips that also are used in methamphetamine
production. After that transaction, DEA agents pulled D.W.
over in his car and found methamphetamine and other ingre-
dients used to make the drug. D.W. agreed to cooperate with
the DEA, and the next week he purchased a case (144 boxes)
of Action from Johal for $1500. During the March 13 pur-
chase, after D.W. paid the money, Johal told him to go to the
back storeroom and wait. D.W. said another store employee
put the pills in a “Mike’s Hard Lemonade” box and put ice on
top of the boxes of Action. Johal also told D.W. he had
special-ordered matches and asked if D.W. wanted to buy
them.
Earlier that same evening, by coincidence, a third party not
working for the DEA, R.H., bought from Johal’s store $950
worth of Action that R.H. had ordered in advance. DEA
agents arrested R.H. as he was driving away from the store.
DEA agents amassed other corroborating evidence from
transactions they observed and from their search of the store
15250 UNITED STATES v. JOHAL
pursuant to a federal warrant. In a superseding indictment, the
government charged Johal with two counts of distribution and
one count of possession of a listed chemical in violation of 21
U.S.C. § 841(c)(2).
The first trial ended with a hung jury. One issue the first
jury grappled with in its deliberations was the sufficiency of
evidence needed to meet the “reasonable cause to believe”
intent standard. Johal was retried and convicted on all counts.
At sentencing, the district court judge granted Johal a down-
ward departure but denied him an adjustment based on accep-
tance of responsibility. Johal timely appealed. We have
jurisdiction under 28 U.S.C. § 1291, and we affirm.
II.
Johal contends that 21 U.S.C. § 841(c)(2) impermissibly
criminalizes conduct without imposing a mens rea require-
ment. We review de novo the proper interpretation of a stat-
ute. United States v. Odom, 329 F.3d 1032, 1034 (9th Cir.
2003). In determining what mental state is required to prove
a violation of the statute, we look to its words and the intent
of Congress. See United States v. Nguyen, 73 F.3d 887, 890
(9th Cir. 1995). In doing so, we construe the statute “in light
of the background rules of the common law in which the
requirement of some mens rea for a crime is firmly embed-
ded.” Staples v. United States, 511 U.S. 600, 605 (1994) (cita-
tion omitted) (noting that the existence of a mens rea is the
rule rather than the exception in Anglo-American criminal
jurisprudence); see Nguyen, 73 F.3d at 890 (emphasizing the
“fundamental principle that a person is not criminally respon-
sible unless ‘an evil-meaning mind’ accompanies ‘an evil-
doing hand’ ” (quoting Morissette v. United States, 342 U.S.
246, 251 (1952))).
[1] Section 841(c)(2) punishes
Any person who knowingly or intentionally —
UNITED STATES v. JOHAL 15251
(2) possesses or distributes a listed chemical know-
ing, or having reasonable cause to believe, that the
listed chemical will be used to manufacture a con-
trolled substance except as authorized by this sub-
chapter.
(Emphasis added.) Pseudoephedrine is a listed chemical under
the statute, 21 U.S.C. § 802(34)(K); but it is also a common
ingredient in nonprescription cold medicines. Johal, supported
by amicus curiae the National Association of Criminal
Defense Lawyers, argues that the statute converts the legiti-
mate sale of decongestants containing pseudoephedrine into a
criminal act, putting unwitting store clerks at risk of going to
prison simply for selling legal cold medications. He asserts
this problem arises because “reasonable cause to believe”
calls for interpreting what a reasonable person objectively
would have known and done under the circumstances, impos-
ing liability without any showing of the defendant’s actual
criminal intent.
[2] We reject Johal’s argument because the statute does
impose a mens rea requirement, as indicated in our previous
decision in United States v. Kaur, 382 F.3d 1155, 1157 (9th
Cir. 2004), a case arising out of the same DEA operation that
led to Johal’s arrest. There, we evaluated — albeit under an
abuse of discretion standard — a jury instruction identical to
the one given here that defined “reasonable cause to believe”
in § 841(c)(2) as
to have knowledge of facts which, although not
amounting to direct knowledge, would cause a rea-
sonable person knowing the same facts, to reason-
ably conclude that the pseudoephedrine would be
used to manufacture a controlled substance.
Id. at 1156.
15252 UNITED STATES v. JOHAL
[3] Relying on Kaur, we hold that “reasonable cause to
believe,” in the context of § 841(c)(2), requires that a defen-
dant subjectively know facts that either cause him or would
cause a reasonable person to believe that the ingredients are
being used to produce illegal drugs. This standard limits the
likelihood that a defendant will be prosecuted for mere inad-
vertent conduct and is consistent with the longstanding princi-
ple presuming a mens rea requirement for criminal activity.
See Nguyen, 73 F.3d at 890-91.1
[4] We also reject Johal’s argument that the “reasonable
cause to believe” standard requires proving actual, subjective
knowledge of the purchaser’s intended illegal use of the pills.
Such a reading would be redundant because the statute
already provides for conviction based on a defendant’s actual
knowledge of the intended illegal use. See Kaur, 382 F.3d at
1157 (noting that “the statute clearly presents knowledge and
reasonable cause to believe as two distinct alternatives; rea-
sonable cause to believe would be superfluous if it meant
knowledge”). However, reasonable cause to believe is not
purely objective, but turns on the facts actually known by the
defendant in a particular case — facts from which the jury can
infer that any reasonable person in the defendant’s position
would have had to know that the ingredients were being
bought to make illegal drugs. As a practical matter, therefore,
the differences between actual and constructive “knowledge”
under the statute are not substantial. See United States v.
Saffo, 227 F.3d 1260, 1268-69 (10th Cir. 2000) (holding that
the “reasonable cause to believe” standard in § 841(c)(2) “re-
quires scienter to be evaluated through the lens of this particu-
lar defendant, rather than from the [perspective] of a
1
Section 841(c)(2) is unlike the statutes at issue in Nguyen or in Staples
v. United States, 511 U.S. 600, 605 (1994), neither of which specified a
mens rea requirement at all. Here, we need not read a mental state require-
ment into the statute, because it already limits criminal punishment to
those who acted “knowing or having reasonable cause to believe” that ille-
gal activity was afoot.
UNITED STATES v. JOHAL 15253
hypothetical reasonable man” and likening the standard to
actual knowledge); Stoianoff v. Montana, 695 F.2d 1214,
1221 (9th Cir. 1983) (holding, in construing a drug parapher-
nalia statute, that “the fact that a defendant reasonably should
have known something is established in substantially the same
manner as actual knowledge”).
[5] The government presented evidence from which the
jury could find that Johal had a sufficient mens rea to violate
the statute. The jury heard testimony about the various sales
and Johal’s own statements and conduct in the course of those
transactions suggesting that Johal knew (or surely should have
known) the proposed illegal use of the pseudoephedrine pills.
He clearly was aware of the sales of Action in bulk quantities
to repeat purchasers (the DEA agent and informants) and to
R.H.; and the DEA Officer specifically told Johal that he was
going to make “crystal.” Johal’s own behavior — such as
concealing the packages in a box and having employees hand
them to customers in the back room — was strong circum-
stantial evidence that Johal knew he was selling Action for an
illicit use. At the very least, the circumstances of these sales
would have alerted a reasonable person that the Action pills
were being bought to make methamphetamine, not to cure
runny noses. The evidence was thus sufficient to show that
Johal had the requisite criminal intent to violate the statute.
III.
Johal claims that the statute requires the actual production
of methamphetamine as an element of the offense. He argues
that because he was indicted during two sting operations —
neither of which resulted in the actual manufacture of an ille-
gal drug — there is insufficient evidence to sustain his con-
viction.
[6] The text of § 841(c)(2) requires that the defendant know
or have reasonable cause to believe that the chemical he sells
“will be used to manufacture” a controlled substance.
15254 UNITED STATES v. JOHAL
(Emphasis added.) The district court interpreted this phrase to
require only that the defendant believe such production would
occur, not that the ingredients actually be used to make drugs.
The jury instruction specifically stated that “the government
does not have to prove that any pseudoephedrine actually was
used to manufacture a controlled substance.”
[7] We agree with the district court’s reading of the statute.
The commission of the crime — the actus reus — occurs at
the moment a defendant possesses or distributes a listed ingre-
dient while knowing or having reasonable cause to believe the
chemical will be used to make drugs. Thus, a defendant vio-
lates the statute based on his understanding that he or she is
contributing to the production of illicit drugs, even if the
drugs ultimately are not made. See United States v. Prather,
205 F.3d 1265, 1269 (11th Cir. 2000) (holding that the plain
language of the statute indicates that “Congress did not intend
to require proof that the controlled substance had actually
been manufactured”); United States v. Green, 779 F.2d 1313,
1319 (7th Cir. 1985) (holding that proof of the actual manu-
facture of drugs using the prohibited chemical was not neces-
sary since the statute required knowledge or a reasonable
cause to believe that the manufacturing of the drugs will in the
future come to pass). Actual production may very well bolster
the circumstantial evidence of a defendant’s awareness of his
or her participation in an illegal activity, but it is not com-
pelled by a plain reading of the statute.
IV.
Johal challenges the jury instructions for failing to ensure
a unanimous verdict on one of the two counts. Johal was
indicted for (and the jury instructions charged him with) the
sale of Action for the making of methamphetamine on March
13, 2002 (Count II). There were two separate transactions on
that day, however. The first occurred when Johal sold drugs
to R.H., the third party who was apprehended leaving Johal’s
store with a large quantity of pre-ordered Action. Later that
UNITED STATES v. JOHAL 15255
day, DEA informant D.W. purchased a case of pills from
Johal.
The jury instructions did not distinguish between the two
sales, but required the jury only to find beyond a reasonable
doubt “that on or about March 13, 2002, the Defendant know-
ingly distributed pseudoephedrine” with the “knowledge or
reasonable cause to believe that it will be used to manufacture
a controlled substance.” The district court also gave a general
unanimity instruction, telling the jury that “a verdict must rep-
resent the considered judgment of each juror. In order to
return a verdict, it is necessary that each juror agree thereto.
A verdict must be unanimous.” The instructions alerted the
jury that “[t]he Defendant is not on trial for any conduct or
offense not charged in the indictment” and that it may con-
sider evidence of other acts “only as it bears upon the Defen-
dant’s intent, knowledge, motive, opportunity, and absence of
mistake to commit the crimes charged and for no other pur-
pose.”
Johal did not raise below his objection that the district court
failed to instruct the jury that it had to agree unanimously on
the same sale of the two transactions that occurred on March
13. Nor did Johal request a polling of the jury to determine
which transaction formed the basis of each juror’s guilty ver-
dict. We, therefore, review his claim for plain error and con-
clude that the district court’s instructions were not plainly
erroneous. See United States v. Franklin, 321 F.3d 1231, 1240
(9th Cir.) (noting that plain error requires an (1) error, (2) that
is plain and (3) that affects substantial rights and concluding
that the given jury instructions did not meet those conditions),
cert. denied, 540 U.S. 858 (2003).
Johal cites United States v. Garcia-Rivera, 353 F.3d 788
(9th Cir. 2003), but that case is distinguishable. There the dis-
trict court instructed the jury that to find the defendant guilty
it had to find beyond a reasonable doubt that possession
occurred: “(a) uninterrupted between May 19, 2001 and June
15256 UNITED STATES v. JOHAL
7, 2001; or (b) about a week after the purchase of the firearm,
or (c) on June 7, 2001.” Id. at 790. The court further
instructed that the jury “must unanimously agree that the pos-
session occurred during (a) above, or on (b) or (c) above.” Id.
at 792 (emphasis in the original). We found the phrasing “fa-
tally ambiguous. The jury could have concluded that they
were required to decide unanimously only that possession
occurred during any of the three times enumerated, not that
they had to unanimously agree on which one.” Id. (emphasis
in the original); see also United States v. Echeverry, 698 F.2d
375, 377-78 (9th Cir. 1983), amended by 719 F.2d 974 (per
curiam) (reversing the defendant’s conviction where jurors
were instructed they could convict if they found the existence
of a conspiracy for “some period of time” within the six
months covered in the indictment, because different jurors
may have concluded that the defendant committed different
acts).
[8] The concern that jurors may have convicted Johal, even
though they did not agree on which of the two transactions
actually occurred on March 13, is not material. Johal does not
dispute that he sold large quantities of pseudoephedrine to
both R.H. and D.W. on the day in question. Rather, the con-
viction turned on whether Johal had the requisite knowledge
that the sales of Action were for the production of illegal
drugs. The jurors could properly consider the evidence from
both sales in deciding that Johal had the intent to commit the
crime.2 See United States v. Ferris, 719 F.2d 1405, 1407 (9th
Cir. 1983) (rejecting the claim that a unanimity instruction
must be tailored to the particular charges in a case where “the
various acts indicating knowing possession were not inconsis-
tent with each other; and even if one set of jurors might have
focused on one part of the transaction while another set
focused upon a different part, it does not follow that either set
2
Our consideration of the jury unanimity challenge might have been dif-
ferent had the sales at issue occurred over the course of a more extended
period of time or had the occurrence of the sales been disputed.
UNITED STATES v. JOHAL 15257
of jurors were in disagreement with the other”). Accordingly,
there was no plain error in the jury instructions regarding the
March 13 count.
V.
[9] Johal contends that the district court erred in denying
him a reduction of his sentence for acceptance of responsibil-
ity, a claim we review for clear error. See United States v.
Fleming, 215 F.3d 930, 939 (9th Cir. 2000). At sentencing,
Johal acknowledged selling large amounts of pseudoephe-
drine but stated that he “did not know that this was a violation
of a federal law.” He argues that because he admitted the
actus reus of the crime — distributing the chemical ingredient
— he should have been eligible for a sentence reduction.
However, our case law makes clear that the reduction is inap-
propriate where the defendant does not admit that he or she
had the intent to commit the crime. See id. (upholding district
court’s refusal to grant reduction where the defendant
attempted to accept responsibility but denied the intent ele-
ment of the offense); United States v. Ing, 70 F.3d 553, 556
(9th Cir. 1995) (holding that district court clearly erred in
denying reduction where the defendant raised an entrapment
defense, but “admitted his conduct and his intent through-
out”); United States v. Burrows, 36 F.3d 875, 883 (9th Cir.
1994) (holding that the defendant was not entitled to adjust-
ment where during and after trial he maintained that he lacked
mens rea). Johal did not admit that he had the intent to distrib-
ute the chemical-containing cold pills for the purpose of mak-
ing illegal drugs. Accordingly, the court did not clearly err by
denying him a sentence adjustment based on his acceptance
of responsibility.
[10] Nonetheless, the Sentencing Guidelines are no longer
mandatory, and we cannot determine from the record whether
the sentence imposed would have been materially different
had the district court known that the Guidelines were advi-
sory. See United States v. Ameline, 409 F.3d 1073, 1074 (9th
15258 UNITED STATES v. JOHAL
Cir. 2005) (en banc). Accordingly, the district court should
reconsider Johal’s sentence in light of Ameline.
VI.
The conviction is AFFIRMED and the case is
REMANDED for reconsideration of Johal’s sentence.