United States v. Louis Smith , 714 F. App'x 701 ( 2017 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS NOV 14 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 15-30332
Plaintiff-Appellee, D.C. No.
2:13-cr-00014-RMP-1
v.
LOUIS DANIEL SMITH, AKA Daniel MEMORANDUM*
Smith, AKA Daniel Votino,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of Washington
Rosanna Malouf Peterson, District Judge, Presiding
Argued and Submitted August 31, 2017
Seattle, Washington
Before: McKEOWN and GOULD, Circuit Judges, and FOOTE,** District Judge.
Defendant-Appellant Louis Smith appeals his convictions for conspiracy to
introduce misbranded drugs into interstate commerce, import merchandise contrary
to law, and defraud the United States, in violation of 18 U.S.C. § 371 (count one);
introduction of misbranded drugs into interstate commerce, in violation of 21
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Elizabeth E. Foote, United States District Judge for the
Western District of Louisiana, sitting by designation.
U.S.C. §§ 331(a) and 333(a)(2) (counts two through four); and smuggling, in
violation of 18 U.S.C. § 545 (count six). These convictions stem from Smith’s
manufacture, marketing, and distribution of Miracle Mineral Solution (“MMS”), as
well as his importation of sodium chlorite, a chemical necessary to manufacture
MMS. On appeal, Smith argues: (1) the indictment was defective on all counts for
failure to allege an essential element of each crime; (2) there was insufficient
evidence to sustain his conviction on each count; (3) the district court erred in its
jury instructions on each count; (4) the district court erred in refusing to suppress
evidence; (5) Smith’s appointed counsel suffered from a conflict of interest; and
(6) the district court violated Smith’s Sixth Amendment rights by denying his
various motions to continue his trial. We have jurisdiction under 28 U.S.C. § 1291
and affirm.
I. Counts Two Through Four
Smith contends that his convictions on counts two through four must be
reversed because the indictment failed to allege materiality. The sufficiency of the
indictment is reviewed de novo. United States v. O’Donnell, 608 F.3d 546, 555
(9th Cir. 2010). An indictment must be specific in what it charges and cannot
simply repeat the language found in the criminal statute. Id. However, it must “be
read in its entirety, construed according to common sense, and interpreted to
include facts which are necessarily implied.” Id. (quoting United States v. Givens,
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767 F.2d 574 (9th Cir. 1985)) (internal marks omitted). We have found that
materiality is a required element of proof in a misbranding offense. United States
v. Watkins, 278 F.3d 961, 965-66 (9th Cir. 2002). However, an indictment does
not have to allege materiality if the facts in the indictment support an inference of
materiality. United States v. Berger, 473 F.3d 1080, 1103 (9th Cir. 2007).
Counts two through four charged that, in violation of 21 U.S.C. §§ 331(a)
and 333(a)(2), Smith and his co-defendants, with the intent to defraud and mislead,
introduced, delivered for introduction, and caused the introduction and delivery
into interstate commerce of a drug that was misbranded because it was
manufactured in an establishment not registered with the Secretary of Health and
Human Services. Section 331(a) provides two tiers of liability for misbranding
violations. Felony misbranding, per § 333(a)(2), requires that the defendant acted
with intent to defraud or mislead.
Smith’s criminal intent to defraud or mislead is linked to his introduction of
MMS into interstate commerce, which is sufficiently detailed in the indictment.
The indictment alleged a pattern of systematic and widespread misrepresentations
and omissions of material fact that were plainly made with the intent to deceive
and mislead Smith’s suppliers and the government. Counts two through four of the
indictment satisfied the requisite standard of sufficiency. Smith’s claim is without
merit.
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Smith next contends there was insufficient evidence to prove that the MMS
relevant to counts two through four was manufactured in an unregistered facility,
which rendered it a misbranded drug. Sufficiency of the evidence is reviewed de
novo. United States v. Odom, 329 F.3d 1032, 1034 (9th Cir. 2003). We must
determine whether, “after viewing the evidence in the light most favorable to the
prosecution, any rational trier of fact could have found the essential elements of the
crime beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319 (1979).
The elements may be proved by circumstantial evidence. See United States v.
Loveland, 825 F.3d 555, 561 (9th Cir. 2016). While mere speculation is
insufficient to support a verdict, all reasonable inferences must be drawn in favor
of the government.
The trial testimony, viewed as a whole, established that at the time of the
investigation, the facility in which the MMS was made was not a registered
manufacturer of drugs as required by federal statutes and regulations. Viewed in
the light most favorable to the prosecution and taking into account all reasonable
inferences, the evidence was sufficient to prove that MMS was manufactured in an
unregistered facility. Smith’s assertions to the contrary are without merit.
Next, Smith challenges the sufficiency of the evidence to sustain his
substantive misbranding convictions. However, there was sufficient evidence at
trial from which a rational jury could conclude that Smith intended to mislead
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suppliers and authorities about the intended use of MMS by consumers. This
challenge fails.
Smith next insists that Jury Instruction 13, which was given in regards to the
substantive misbranding counts, directed a verdict that MMS was misbranded.
When no objection is raised at trial to the jury instructions, we review for plain
error. United States v. Nobari, 574 F.3d 1065, 1080 (9th Cir. 2009). There are
four requirements for a finding of plain error: (1) error, (2) that is plain,
(3) affecting substantial rights, “which in the ordinary case means it affected the
outcome of the district court proceedings,” and (4) “seriously affect[ing] the
fairness, integrity or public reputation of judicial proceedings.” United States v.
Lapier, 796 F.3d 1090, 1096 (9th Cir. 2015) (quoting United States v. Marcus, 560
U.S. 258, 262 (2010)). Instruction 13 was provided in the context of defining and
contextualizing each of the four elements the jury had to consider for the
misbranding offenses. Instruction 13 did not direct a verdict, but merely reminded
the jury of the precise way in which the offenses were charged in the indictment.
The court did not err in giving Instruction 13.
Smith also challenges Jury Instruction 10, which required the jury to
consider whether he “acted with the intent to defraud or mislead when he
introduced MMS products into interstate commerce.” The court did not err in
giving Jury Instruction 10, which was an accurate statement of the law and
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consistent with the charged statutes.
II. Count Six
Smith avers that the indictment failed to charge materiality with respect to
count six. Count six charged Smith with fraudulently and knowingly importing
sodium chlorite, contrary to § 331(a), in that sodium chlorite was a bulk drug
ingredient that was misbranded, and that Smith did knowingly and fraudulently
receive, conceal, buy, sell, and facilitate the transportation, concealment, and sale
of the sodium chlorite, after importation, knowing it to have been imported and
brought into the United States contrary to law, in violation of 18 U.S.C. § 545.
Although the term materiality is not used in 18 U.S.C. § 545, the statute does
use the term fraudulently, which can be interpreted as requiring an intent to
defraud. Following Neder v. United States, 527 U.S. 1 (1999), we have instructed
that the settled meaning of intent to defraud requires a showing of materiality.
Watkins, 278 F.3d at 965. Given this settled meaning, we “must presume that
Congress intended to incorporate materiality unless the statute otherwise dictates.”
Id. (quoting Neder, 527 U.S. at 23). Here, the indictment was sufficiently detailed
to warrant the inference of material misrepresentations and omissions made with
respect to Smith’s importation of sodium chlorite. Smith’s claim is without merit.
Smith next argues there was insufficient evidence to sustain his conviction
on count six. To the contrary, there was sufficient evidence at trial to establish that
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Smith caused shipments of sodium chlorite to be imported or brought into the
United States from Canada, contrary to law. Specifically, the evidence established
that Smith paid a Canadian distributor to ship sodium chlorite to a fictitious
company, created by Smith to facilitate the importation and receipt of this
chemical, and that the stated purpose of the sodium chlorite was for use in
wastewater treatment, which was plainly untrue, given Smith’s intent to employ it
in the manufacture of MMS. There was sufficient evidence to sustain Smith’s
conviction on this count, and his challenge fails accordingly.
Smith next contends that the court plainly erred by not including a
knowledge component in its jury instructions on count six. Instead, the court
required the jury to find that Smith fraudulently imported the sodium chlorite.
“Fraudulently” importing unlawful merchandise–doing so with the intent to
defraud–requires specific intent, while “knowingly” committing an act requires
only general intent. See generally Carter v. United States, 530 U.S. 255, 268-70
(2000). Thus, specific intent is a more stringent standard and encompasses the
lower standard of general intent. See United States v. Doe, 136 F.3d 631, 637 (9th
Cir. 1998). The court did not err by requiring proof of intent to defraud, a specific
intent standard, which was more rigorous to prove than knowledge, a general intent
standard.
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III. Count One
Smith challenges count one of the indictment, which charged one
conspiracy, comprised of three different objectives: (1) to introduce misbranded
drugs into interstate commerce, (2) to smuggle, and (3) to defraud the United
States by impeding, impairing, and defeating the FDA’s functions and duties.
Smith contends that because his substantive convictions should be reversed, we
must necessarily reverse his conspiracy conviction. We reject this argument, as
there was sufficient evidence to sustain the substantive convictions, as discussed
above.
Next, with respect to count one’s third objective only (conspiracy to defraud
the United States by impeding, impairing, and defeating the FDA’s functions and
duties), Smith challenges the sufficiency of the indictment, the sufficiency of the
evidence, and the jury instructions. Count one will stand regardless of our findings
on objective three because count one’s two other objectives are unchallenged on
appeal. Furthermore, the verdict form contained three separate findings, one for
each objective of the conspiracy. The jury found Smith guilty of all three
objectives. The guilty verdict can be sustained on the basis of any one or more of
the objectives set forth in the indictment. Thus, an error in the charging, evidence,
or instruction for the third objective, if any, would be harmless. This challenge
fails.
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Smith next asserts that the jury instructions were deficient because they
failed to include a buyer-seller instruction. In this case, the buyer-seller instruction
was not warranted by the evidence presented at trial. This claim is without merit.
IV. Suppression of Evidence
Smith argues that the district court erred in denying his motion to suppress
evidence of the conspiracy that was seized by federal agents during the execution
of search warrants. “Whether a search is within the scope of a warrant is a
question of law subject to de novo review.” United States v. Hurd, 499 F.3d 963,
965 (9th Cir. 2007). Smith has failed to identify a single piece of evidence that he
believes should have been suppressed; rather, he just refers generally to “evidence
of the conspiracy.” Thus, Smith has failed to provide “citations to the authorities
and parts of the record” on which he relies. Fed. R. App. P. 28(a)(8)(A).
Furthermore, the conspiracy was based upon the same fraudulent scheme
and the same overt acts as the substantive counts; therefore, evidence of the
substantive counts necessarily constitutes evidence of the conspiracy. In this case,
Smith has failed to pinpoint any discrete evidence that would be considered
evidence of the conspiracy, but could not be deemed evidence of the substantive
offenses. The district court did not err in denying the motion to suppress.
V. Conflict of Interest
Smith asserts that his appointed counsel suffered from a conflict of interest
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that required the district court to remove him as counsel. The court’s failure to do
so, Smith submits, violated his Sixth Amendment rights. A defendant’s Sixth
Amendment right to counsel includes the “correlative right” to conflict-free legal
representation; that is, the right to be represented by an attorney with undivided
loyalty. Wood v. Georgia, 450 U.S. 261, 271 (1981). To establish a violation of
this right, a defendant must demonstrate that an actual conflict of interest adversely
affected counsel’s performance. Mickens v. Taylor, 535 U.S. 162, 171 (2002). If
the defendant can show that a conflict of interest “affected the adequacy” of
counsel’s representation, then he need not demonstrate actual prejudice stemming
from the conflict. Id. (quoting Cuyler v. Sullivan, 446 U.S. 335, 349-50 (1980)).
“[U]ntil a defendant shows that his counsel actively represented conflicting
interests, he has not established the constitutional predicate for his claim of
ineffective assistance.” Cuyler, 446 U.S. at 350.
Smith has not established that an actual conflict existed. The record does
not support a finding that counsel actively represented conflicting interests. Nor
has Smith shown that a conflict, assuming one even existed, influenced counsel’s
decisions. See United States v. Shwayder, 312 F.3d 1109, 1118 (9th Cir. 2002),
amended by 320 F.3d 889 (9th Cir. 2003) (explaining that defendant must establish
that an actual conflict influenced counsel’s performance). Because no actual
conflict existed and nothing supports the view that counsel’s performance was
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affected by any claimed conflict, Smith’s Sixth Amendment challenge fails as a
matter of law.
VI. Effective Assistance of Counsel
Smith claims that the court’s denial of his motions to continue denied him
effective representation in myriad ways. “A district court’s decision to grant or
deny a continuance is reviewed for abuse of discretion . . . .” United States v.
Moreland, 622 F.3d 1147, 1158 (9th Cir. 2010). Smith must demonstrate that the
trial court “abused its discretion through an unreasoning and arbitrary insistence
upon expeditiousness in the face of a justifiable request for delay.” Houston v.
Schomig, 533 F.3d 1076, 1079 (9th Cir. 2008) (quoting Morris v. Slappy, 461 U.S.
1, 11-12 (1983) (internal marks omitted)).
Here, the court granted numerous continuances over the two years between
the indictment and trial. Smith insisted on representing himself and did not request
representation until ten days before trial. Counsel’s lack of time to adequately
prepare for trial was within Smith’s control. See Moreland, 622 F.3d at 1158
(holding that the district court did not abuse its discretion in denying a continuance
when the “need for a continuance was Moreland’s fault”). Smith was clearly
responsible for the delay in counsel’s appointment, counsel’s inability to fully
engage in active trial preparation, and counsel’s lack of insight into the evidence,
strategies, and theories of the case. The district court’s refusal to grant a sixth
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continuance was not an abuse of discretion. Because the court did not abuse its
discretion in denying another continuance, we need not reach the issue of whether
the denial of the continuance resulted in ineffective assistance of counsel.
AFFIRMED.
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