Friday, June 03, 2016

U.S. v. Loveland (9th Cir. - June 3, 2016)

This one was a long time in coming.  An outstanding opinion, to be sure.  But, boy, did it take a while.

Judge Kleinfeld authors the opinion.  He makes very clear at the outset that there's no real doubt that the defendant, Jim Loveland, was guilty of possessing quite a fair amount of methamphetamine.  But the government didn't charge him with that.  It instead deliberately charged him only with conspiracy -- basically, a bigger charge, with bigger benefits for the government, presumably in an all-or-nothing strategy to persuade the jury not just to convict on a charge of mere possession-with-intent.

Okay.  But when you charge a conspiracy, you've got to prove an agreement.

And that's where the case gets tricky.

Because Mr. Loveland surely buys a fair amount of methamphetamine.  But that's basically it.  He pays in cash.  Doesn't get the drugs "fronted" to him.  Sure, he's presumably selling the drugs to other people down the line.  But for a "conspiracy" to exist, there's got to be an agreement to sell the stuff to downstream customers.  And there's essentially no evidence whatsoever for that.

The jury nonetheless convicted him.  But the Ninth Circuit reverses.  There's insufficient evidence of an agreement.

Judge Kleinfeld's opinion does a really masterful job of dissecting the numerous conspiracy-versus-mere-drug-buyer cases that exist both in the Ninth Circuit as well as across the nation.  It's a really well-written -- and smart -- opinion.  Here's basically the best summary of Judge Kleinfeld's thoughts on the matter:

"We are unable to see how in this case any reasonable juror could conclude beyond a reasonable doubt that the Sanchez group had an agreement, even tacit, with Loveland, for Loveland to resell the methamphetamine. Though the Sanchez group might assume that Loveland was reselling the methamphetamine that he bought from them, he could have flushed it down the toilet for all they cared, since they already had his money. As for future sales, they had no hold on him. Loveland was free to shop elsewhere. Their stake in his enterprise was no different from a big-box store’s stake in a convenience store’s financial success from the resale of individually packaged peanuts purchased by the carton from the big-box store. The big-box store ordinarily has no agreement with the convenience store owner regarding his resales. As the Seventh Circuit said in United States v. Colon, 'Every seller to a distributor has a stake in the distributor’s activities; a person who buys for resale will not enrich his seller if his resale business dries up.' However, we share the Seventh Circuit’s skepticism that “‘regular’ purchases on ‘standard’ terms can transform a customer into a co-conspirator."

Makes sense to me.

What also made sense to me -- at least initially -- was Judge Kleinfeld's distinction between "cash-for-drugs" as opposed to drugs that are fronted.  Judge Kleinfeld says that when the wholesaler fronts the drugs (i.e., doesn't demand payment at the outset, but instead gets cash once the drugs are sold), that's pretty good evidence of an agreement, hence conspiracy, since the wholesaler's clearly interested in getting effectively repaid.  There are, indeed, cases to that effect.  And that seemed right to me.  (It is a situation not present in the current case, but it nonetheless helps draw the distinction between the "mere buyer" cases versus the "actual conspiracy" situations.)

But, upon reflection, I wonder if it's actually true.  Or if the Ninth Circuit would draw the same conclusion in analogous situations outside the drug context.

Take a car sale.  Or a wholesaler who sells peanuts.  Or pretty much any commercial industry that sells on credit -- and that's pretty much everyone.  Let's assume that they do (as indeed they do) the same basic thing that a drug wholesaler does:  sells on credit.  Would we really say that this legally resulted in an "agreement" between the two parties to redistribute the goods to downstream buyers?

Take two examples.  (A)  I sell my brother my car for $1000, and he intends to paint it, make it look nice, and sell it on eBay.  He doesn't have the money now, so I "front" him the car, and tell him to repay me once he makes his money on eBay.  He ultimately gets a buyer who agrees to pay him $1500 for it.  (B) Acme Manufacturing makes widgets, Doug's Widgets places an order for 20,000 widgets, and Acme Manufacturing sells 'em to Doug's on credit, knowing full well that Doug's Widgets isn't going to use the widgets itself but instead intends to sell them to others.

Assume also that, in both cases, something goes wrong.  Maybe, in situation (A), eBay screws up the sale between my brother and the third party; i.e., tortiously interferes with that contract.  Or maybe, in (B), Doug's Widgets sells the widgets to X, Y, and Z on credit, but then Doug's goes bankrupt.

If there's legally an agreement, then presumably in (A), I can sue eBay for screwing up the sale, and in (B), Acme Manufacturing can sue X, Y, and Z for the purchase price of the widgets, right?  Since there was an agreement -- call it a joint venture, call it a contract, or call it a conspiracy -- between me and my brother (as well as Acme and Doug's) to sell to the downstream buyers, that's presumably give me standing to sue on my own behalf.  And that'd be true even if my brother/Doug's couldn't, or wouldn't, sue the downstream buyer themselves.

But there's no way the courts would, in fact, let me or Acme sue in situations (A) or (B).  I'm very, very confident that they'd say that there was no actual agreement between us to sell to the downstream buyer.  That the mere fact that one party sold on credit and/or knew that the items were going to be resold legally demonstrates an agreement to do so.  They'd kick that civil case out of court on its ears.

Yet that exact same evidence is held to establish an agreement beyond a reasonable doubt in these criminal cases.

That doesn't seem to make sense to me.

So I'm wondering now about even the fronting cases.  Should even those be sufficient to establish a conspiracy.  Even though, at first, I thought, yeah, that made sense.

So maybe we either have to change the criminal cases or the civil ones.  Seems like there should at least be a consistent answer.


One more thing.  Mr. Loveland gets great news today.  He was sentenced to life in prison for the conspiracy.  But, today, he's completely off.  No retrial.  No nothing.  Insufficient evidence.  You're a free man.

Talk about a great day for him, eh?

Yet, look how long it took.  Mr. Loveland filed his appeal in 2013.  Oral argument was in 2014.  It took the Ninth Circuit two years to write this sixteen-page, fairly straightforward opinion.  And for every single one of those years, Mr. Loveland -- who was legally innocent of the offense for which he was convicted -- continued to rot in prison.

That seems sort of harsh, no?  (And, yes, I understand that there might be some "rough justice" here, since he's "getting off" of a life sentence for which he'll only actually serve four or five years despite the fact that he almost surely dealt a fair amount of meth.  But that's not legally, or ethically, the way we can look at it, since he wasn't, in fact, charged with any offense that he actually committed.)

Now, there may well be reasons why this relatively simple case took an extraordinarily long period of time to resolve on appeal.  The case was argued in July 2014, and Judge Alarcon was on the panel, and he died in January of 2015.  So that undoubtedly delayed things a bit as they had to draw a new judge (which ended up being Judge Kozinski) to replace Judge Alarcon, read the briefs, listen to oral argument, and make up his mind.

Still.  There was presumably a pretty hefty bench memo -- and vote -- nearly two years ago.  Plus presumably at least a partial draft opinion by the time Judge Alarcon died in January 2015.  Even if you take into account delays in drawing a replacement, getting up to speed, etc., taking 18 months to write an opinion -- one without even a dissent -- that already had a lot of work on it done both prior to as well as six months after the oral argument is a ton of time.  If only from the perspective of the person, Mr. Loveland, who's rotting in prison for a crime he didn't commit.

Maybe this is one of those opinions that you want to expedite writing once you've decided to reverse the defendant's conviction for insufficient evidence.

None of which takes away from the actual content of the opinion.  Which is outstanding and, again, extremely well-written.

My substantive comments about one portion of it notwithstanding.