United States v. Jerome Kelly

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 13-3513
UNITED STATES OF AMERICA
v.
JEROME LAMONT KELLY,
Appellant
APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE WESTERN DISTRICT OF
PENNSYLVANIA
(D.C. Crim. Action No. 2-08-cr-00374-012)
District Judge: Honorable Joy Flowers Conti
SUR PETITION FOR REHEARING
Present: McKEE, Chief Judge, AMBRO, FUENTES,
SMITH, FISHER, CHAGARES, JORDAN, HARDIMAN,
GREENAWAY, JR., VANASKIE, SHWARTZ, KRAUSE,
RESTREPO, SCIRICA and ROTH,1 Circuit Judges
The petition for rehearing filed by Appellant in the
above-entitled case having been submitted to the judges who
participated in the decision of this Court and to all the other
available circuit judges of the circuit in regular active service,
and no judge who concurred in the decision having asked for
rehearing, and a majority of the judges of the circuit in
regular service not having voted for rehearing, the petition for
rehearing by the panel and the Court en banc, is denied.
1
The votes of Judge Scirica and Judge Roth are limited to
panel rehearing only.
BY THE COURT,
s/Joseph A. Greenaway, Jr.
Circuit Judge
Dated: May 26, 2016
SLC/cc: Donovan J. Cocas, Esq.
Robert Epstein, Esq.
Rebecca R. Haywood, Esq.
Michael L. Ivory, Esq.
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No. 13-3513 UNITED STATES v. JEROME LAMONT
KELLY
OPINION DISSENTING SUR DENIAL OF PETITION
FOR REHEARING EN BANC
MCKEE, Chief Judge, with whom AMBRO, SMITH and
RESTREPO, Circuit Judges, join.
I appreciate that the panel’s decision in this case was
dictated by circuit precedent and that my colleagues therefore
felt compelled to affirm the jury’s determination that Kelly’s
membership in the Alford drug distribution conspiracy had
been proven beyond a reasonable doubt. However, I take the
unusual step of filing this opinion sur denial of rehearing to
explain why we have made a mistake by not availing
ourselves of this opportunity to reexamine our jury
instructions in drug conspiracies. I do so even though this
appeal has been resolved in a non-precedential opinion
because our current approach to informing jurors how to
distinguish between a purchaser from a drug conspiracy and a
member of that conspiracy is so meaningless that it presents
the illusion of an objective standard while furnishing no
guidance to jurors who must make this crucial distinction.
Our current standard for channeling a jury’s inquiry in
such prosecutions fails to provide a jury with sufficient
guidance to allow jurors to appropriately differentiate
between customers and co-conspirators. Although some of
our factors may be relevant to this inquiry, the irrelevant
factors I discuss below create the very real danger of placing
a thumb on the conspiratorial side of the scale and thereby
tipping the balance in favor of a conviction for conspiracy
when only a buyer-seller relationship has been established.
Because there is no way of knowing how this jury would have
viewed the circumstantial evidence against Kelly if that
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additional weight had not been added to the conspiratorial
side of the scale, I believe this case “involves a question of
exceptional importance,” meriting en banc reconsideration.
Fed. R. App. P. 35(a).
I.
In order to establish that a purchaser of illegal drugs is
a member of the conspiracy that is selling them, the
Government must generally prove beyond a reasonable doubt:
“(1) a shared unity of purpose; (2) an intent to achieve a
common illegal goal; and (3) an agreement to work toward
that goal, which [the defendant] knowingly joined.” United
States v. Boria, 592 F.3d 476, 481 (3d Cir. 2010). Although
proof of membership in a conspiracy can certainly be satisfied
by circumstantial evidence, circumstances that merely
establish “a simple buyer-seller relationship, without any
prior or contemporaneous understanding beyond the sales
agreement itself, [are] insufficient to establish that the buyer
was a member of the seller’s conspiracy.” United States v.
Perez, 280 F.3d 318, 343 (3d Cir. 2002) (quoting United
States v. Gibbs, 190 F.3d 188, 198 (3d Cir. 1999)).
Accordingly, our current jury instructions give undue weight
to the fact that one has purchased from someone who is a
member of a conspiracy, and they fail to provide the
analytical compass that would help jurors place such
purchases in their proper context.
In United States v. Gibbs we note several factors
relevant to determining whether an alleged co-conspirator
“has knowledge of the conspiracy to the extent that his drug
purchases are circumstantial evidence of his intent to join that
conspiracy.” Gibbs, 190 F.3d at 199. These include “the
length of affiliation between the defendant and the
conspiracy; whether there is an established method of
payment; the extent to which transactions are standardized;
and whether there is a demonstrated level of mutual trust.”
Id. (citing United States v. Hach, 162 F.3d 937, 943 (7th Cir.
1998)). An additional factor provided in Gibbs is “whether
the buyer's transactions involved large amounts of drugs.” Id.(citing United States v. Flores, 149 F.3d 1272, 1277 (10th
Cir. 1998); United States v. Kozinski, 16 F.3d 795, 808 (7th
Cir. 1994)). In writing the opinion in Gibbs, Judge Becker
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took pains to point out the problems with the standard that we
were using to differentiate between mere purchasers of drugs
from a drug conspiracy and members of that conspiracy. He
explained in a footnote:
Judge Becker believes that a
buyer’s knowledge that he is
buying drugs from someone
involved in a larger conspiracy
does not lead directly to the
inference that the buyer intended
to join that conspiracy and
achieve a common goal with its
conspirators. He urges a course
correction under which this
precept would be abandoned in
favor of the approach to buyer-
seller relationships in the
conspiracy context taken by the
Seventh Circuit Court in an
important opinion by Judge
Flaum. See United States v.
Townsend, 924 F.3d 1385 (7th
Cir. 1991).
Gibbs, 190 F.3d at 198 n.3. Judge Becker then goes on to
explain why the Townsend analysis provides more substantive
and meaningful guidance to jurors than the approach we
continue to take.
This case illustrates why our current jurisprudence
creates little more than an illusory distinction between buyers
and co-conspirators and thereby creates the very real risk that
the co-conspiratorial net will be cast over those who merely
purchase from a drug conspiracy. Indeed, this case represents
a quintessential example of this problem.
II.
Kelly made more than one purchase from the Alford
conspiracy for personal use, and he also resold some of the
drugs that he purchased. However, although there were over
60,000 recorded conversations with the leader of the
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conspiracy, Kelly appears on the underwhelming sum of
seven of them, and there is no evidence that any of these
conversations tied Kelly into doing anything other than
buying from Alford (and getting information about how to
convert the purchased product to crack cocaine). In addition,
to the extent that the testifying co-conspirators in this case
knew Kelly, none named him as a member of the conspiracy.
Rather, the Government’s own witnesses said Kelly was
merely a customer, or a “lick.” See J.A. at 1240, 1242. He
did not advance funds to the members of the conspiracy or
have any financial interest or stake in the conspiracy, nor is
there any evidence that he was involved in its operations and
objectives in any way beyond his purchases.
In affirming his conviction for conspiracy, my
colleagues are partially persuaded by the phone records in
which Kelly and Alford discussed third parties in a way that
would enable a rational jury to conclude that Kelly was aware
of Alford’s transactions with drug suppliers and, by
extension, of Alford’s role within a larger operation.
However, as Judge Becker noted in Gibbs, a buyer’s
knowledge of the larger conspiracy “does not lead directly to
the inference that the buyer intended to join that conspiracy
and achieve a common goal with its conspirators.” Gibbs,
190 F.3d at 198 n.3. The Government attempts to explain
away this evidentiary void by claiming that this is only
relevant where the existence of the larger conspiracy itself is
in question. See Gov’t Response at 5 (quoting United States
v. Pressler, 256 F.3d 144 (3d Cir. 2001)). The Government’s
rejoinder based on Pressler is neither persuasive nor helpful.
In Pressler, we held that the evidence was insufficient to
establish that the defendant (Shreffler) was a co-conspirator
as opposed to a mere purchaser. We explained:
The Government demonstrated
that the main person from whom
Shreffler obtained his heroin, . . .
Caban, also distributed the drug to
many others, and that some of the
people to whom Caban sold
heroin had been referred to him
by Shreffler. The evidence also
established that many of the
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people to whom Shreffler and
Caban provided heroin sold the
drug themselves, including a man
with whom Shreffler lived for
several months. And the
Government proved that Shreffler
was aware of all of the above
facts.
256 F.3d at 147. That evidence is more suggestive of a
conspiratorial relationship than the evidence that purports to
tie Kelly to the Alford conspiracy here. Yet, we held the
evidence was insufficient to establish a conspiratorial
relationship between Shreffler and Caban. “[T]here was
simply no evidence that Shreffler ever agreed to work with
either his seller or his buyers to achieve a common goal or
advance a common interest.” Id. There is also no evidence
that Kelly ever agreed to work with Alford to achieve a
common goal or advance a common interest.
The Government’s attempt to limit the force of Gibbs
and to distinguish Pressler by suggesting that the concern
expressed by Judge Becker in Gibbs is only relevant where
the existence of a conspiracy is in question is simply wrong.
Pressler did distinguish Gibbs by explaining that “[i]n Gibbs
there was no question that a cocaine distribution ring headed
by . . . Gibbs . . . existed; the dispute was whether [a
purchaser of large amounts of heroin from Gibbs] had agreed
to join the conspiracy.” 256 F.3d at 151. Although that
distinction was helpful to the analysis in Pressler, when
viewed in its proper context, it is a distinction without any
analytical difference here. Rather, the language the
Government relies upon merely established that where a
conspiracy is shown to exist, and the conspiratorial “gang has
divided the neighborhood into zones in which only a single
dealer may operate, then the fact that the defendant
consistently sells . . . drugs [in a zone controlled by the
conspiracy] would provide evidence that the defendant both
knew of the existence of the conspiracy and was a participant
in it.” Id. That is simply not the situation here. There is not
even a suggestion that Kelly resold drugs in an area
exclusively controlled by the Alford conspiracy, and the
Government has not argued to the contrary. That was also
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not the situation in Pressler where we held that the evidence
was not sufficient to establish that a purchaser was a co-
conspirator.
Nevertheless, relying upon the factors we have
previously endorsed, the District Court determined that the
circumstantial evidence, viewed “in the light most favorable
to the government, supports the ‘reasonable and logical
inference’ that Kelly’s interactions with the members of the
Alford conspiracy ‘could not have been carried on except as
the result of a preconceived scheme or common
understanding’” such that “[a] reasonable jury could have
concluded beyond a reasonable doubt that Kelly knew he was
dealing with a larger drug operation when he purchased
cocaine . . . , that he shared the Alford conspiracy’s goal of
selling cocaine and crack cocaine for profit, and that he
worked with members of the Alford conspiracy to achieve
that goal.” J.A. at 40 (quoting Gibbs, 190 F.3d at 197).    Yet,
it is highly likely that, had the jury been afforded a
meaningful metric to assess this evidence, it would have
concluded that the Government had failed to prove that Kelly
was anything more than a mere purchaser of drugs and that he
ever intended to join the Alford drug conspiracy or advance
its criminal objectives.
As Judge Becker argued in Gibbs, knowledge of a
larger conspiracy can easily be attributed to anyone who
purchases illegal drugs from a cocaine distribution ring.
Everyone who purchases cocaine in the United States should
understand that the seller is but one link in a larger supply
chain because the coca leaves that are necessary to produce
cocaine are not grown in the United States. Thus, one who
buys cocaine knows that his seller is part of a larger network.
Yet, no fair system of jurisprudence should allow that
knowledge to be considered as circumstantial evidence that
the purchaser thereby intended to join the distribution
network or to advance its illegal objectives. That remains true
even if the purchaser then resells any of those drugs, absent
proof of some arrangement with the original seller or his
agent that would establish more than a buyer-seller
relationship (such as selling in a neighborhood that is under
the exclusive control of the initial seller’s organization).
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Here, the panel’s analysis to the contrary ignores the
fact that a college student who purchases a quantity of
cocaine and resells some of it to his/her roommate knows that
the cocaine almost certainly came from out of the Country.
Because the purchase money obviously furthers the purpose
of a drug cartel (i.e., profiting from the sale of illegal drugs),
the purchase money contributes to the common illegal goal
and an agreement can certainly be inferred to “work toward
that goal.” NPO at 3. However, that is not the least bit
helpful in separating mere purchasers from those who agree
(however tacitly) to advance the conspiratorial entity.
It is for this reason that Judge Becker recommended in
Gibbs that we follow the Seventh Circuit’s approach to buyer-
seller relationships in the context of drug conspiracies rather
than instructing a jury to consider whether a buyer had
knowledge of the larger conspiracy. We should ask instead
“whether the buyer can be said to have a stake in the larger
conspiracy.” Id. In other words, in order to hold a defendant
liable as a member of the larger conspiracy, the Government
should have to prove that the defendant actually intended to
join the larger organization and advance its objectives and
goals. Judge Becker believed that this framework, “which
may often render a buyer a conspirator with his seller but not
with the larger conspiracy, is more consistent with both the
precepts of agency law (which undergirds conspiracy law)
and with reality.” Id. I agree, and it is past the time that we
should have adopted something analogous to the Seventh
Circuit’s buyer-seller relationship inquiry, also adopted by the
Second Circuit, which would examine whether the buyer has
a stake in the larger conspiracy. See United States v. Clay, 37
F.3d 338, 341 (7th Cir. 1994); United States v. Brock, 789
F.3d 60, 65 (2d Cir. 2015) (“[A] good customer—even a very
good customer—of a drug organization may still be just a
customer, not a co-conspirator, if the evidence cannot support
an inference of mutual dependency or a common stake.”).
I realize, of course, that “[d]etermining whether
someone has ‘a stake in the venture’ is easier said than
done—especially [when limited to] circumstantial evidence.”
United States v. Brown, 726 F.3d 993, 998 (7th Cir. 2013).
Accordingly, the Seventh Circuit has recently reevaluated the
factors it uses to analyze a buyer’s “stake” in a seller’s larger
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conspiracy, recognizing that most of the previously accepted
factors “d[o] not actually distinguish conspiracies from buyer-
seller relationships.” Brown, 726 F.3d at 999. Circumstances
such as “frequency, regularity and standardization,” for
example, can just as well apply to someone buying “two
sticks of deodorant for $3.49 each, every other Friday” at
Walmart. Id.
Similarly, everyone engaged in the buying and selling
of illegal contraband will necessarily exhibit “mutual trust,”
the same as co-conspirators, “because either buyer or seller
might be a government informant or turn violent.” United
States v. Colon, 549 F.3d at 565, 569 (2d Cir. 2008). If the
seller did not trust the buyer, there would never be a sale.
This ever-present trust, even between mere buyers and sellers,
should not be a factor in determining whether there is
sufficient evidence that the purchaser intended to advance the
seller’s illegal objectives and thereby join the drug
conspiracy.
III.
No doubt because of the problems of distinguishing
purchasers from co-conspirators, the Seventh Circuit has
reworked its factors in a manner consistent with these
concerns. That Court now focuses more on whether the buyer
and seller have stakes in each other's businesses above and
beyond a traditional buyer-seller relationship. The Seventh
Circuit’s non-exhaustive list of factors includes: (1) “sales on
credit or consignment,” (2) “an agreement to look for other
customers,” (3) “a payment of commission on sales,” (4) “an
indication that one party advised the other on the conduct of
the other’s business,” or (5) “an agreement to warn of future
threats to each other’s business stemming from competitors or
law enforcement authorities.” Brown, 726 F.3d at 999
(quoting United States v. Johnson, 592 F.3d 749, 755-56 (7th
Cir. 2010)). These factors are a vast improvement over the
factors we ask juries to consider. Yet, the Court of Appeals
for the Seventh Circuit views this refined list of
considerations merely as the “starting point” for a buyer-
seller/co-conspirator inquiry. That Court recognizes that the
appropriate inquiry must “consider the totality of the
circumstances . . ., tak[ing] into account all the evidence
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surrounding the alleged conspiracy . . . [and] not los[ing]
sight of the larger picture—deciding whether the jury
reasonably discerned an agreement to further trafficking of
drugs.” Id. at 1001-02.
Two recent cases from the Courts of Appeals for the
Seventh and Second Circuits are instructive and should
inform our own jurisprudence. In United States v. Brock, the
defendant James Dickerson purchased crack cocaine from a
cooperating conspirator several times each week and resold it
in $20 baggies. Brock, 789 F.3d at 62. Although the District
Court denied Dickerson’s Rule 29 motion, finding that he had
“knowledge” of the larger conspiracy, the Second Circuit
reversed, concluding “the evidence was insufficient to permit
any rational juror to infer that Dickerson knowingly joined or
participated in the charged conspiracy.” Id. at 65. The Court
was influenced by the fact that the conspirators “never sold
crack to Dickerson on credit, and placed no limitations on
Dickerson’s ability to use or resell the product he purchased,”
“did not consider Dickerson to be a member of the
organization, and did not know or care what Dickerson did
with the drugs after he purchased them,” as well as the fact
that Dickerson never “shared profits,” had no “interactions
with [the conspirators] other than the transactions that made
him a customer,” and never “assisted their operation in any
capacity.” Id. at 64.
Similarly, there was no evidence here that Kelly ever
bought drugs from Alford on credit or that Alford placed any
limitations on Kelly’s use of the drugs he purchased, nor is
there any evidence that Kelly shared profits or assisted the
Alford conspiracy in any way. Moreover, as noted earlier, the
Government’s own cooperating witnesses testified that Kelly
was not a member of the conspiracy in which they were
members.
In United States v. Pulgar, 789 F.3d 807 (7th Cir.
2015), the Court of Appeals for the Seventh Circuit found that
despite evidence of a close friendship between a defendant
supplier and purchaser, “[w]ithout evidence of repeated
fronting, sales on consignment, provisioning of tools or
supplies, warnings of threats to the business, or some other
signal that they enjoyed a heightened level of trust indicative
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of a drug distribution conspiracy, we cannot infer anything
nefarious from this friendship.” Id. at 815-16. Kelly’s trial is
similarly devoid of evidence of fronting, consignment sales,
provisioning of tools or supplies, warnings, or any other
evidence of a shared conspiratorial stake between Kelly and
Alford.
There is evidence that, in one of the seven out of
60,000 phone calls that were intercepted on Alford’s phone
where Kelly and Alford spoke, Kelly asked Alford how to
process powder cocaine into crack cocaine. Kelly apparently
did not know how to “cook” crack and he asked Alford for
assistance. See J.A. at 585–89, 1249–51. Relying on the
factors allowed under Gibbs, my colleagues conclude “a
rational trier of fact could interpret [this] to demonstrate
Kelly’s role as a processor and distributor of crack and as a
co-conspirator of Alford.” NPO at 4. That simply does not
follow. Even under the illusory guidance of Gibbs, it is
difficult to understand why asking a seller of cocaine how to
convert it to crack is evidence that the purchaser had entered
into a conspiratorial agreement with the seller beyond the
sales transaction or that he intended to advance the seller’s
enterprise. Such evidence only proves that Kelly did not
know how to “cook” powder cocaine into crack, and that he
assumed his seller, Alford, would be able to tell him how to
accomplish that. Conspiracies should be made of sterner stuff
than this.
IV.
Given the extent to which illegal drugs and illegal drug
sales continue to devastate and destroy lives and
communities, I have no doubt that we will have another
opportunity to revisit the factors we use in attempting to
distinguish between purchasers and co-conspirators.
Regrettably, in the interim we also will no doubt expose
numerous purchasers of drugs (even those who purchase
merely to “feed” their own addiction) to the exponentially
greater penalties that attach to being a member of a drug
conspiracy. I therefore take this opportunity to express my
concern that we are failing to afford jurors the guidance they
need and that the law requires in deciding whether evidence is
sufficient to establish guilt beyond a reasonable doubt in
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cases such as this. Worse yet, the “guidance” that we do give
jurors is not only less than helpful, it is misleading because it
can be an open invitation to convict mere purchasers of illegal
drugs of the far more serious crime of being a member of a
drug conspiracy. Accordingly, I now echo the concern
expressed by Judge Becker a decade and a half ago and
explain why we should avail ourselves of this opportunity and
grant Kelly’s petition for rehearing.
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