Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-13-30162/USCOURTS-ca9-13-30162-0/pdf.json

Parties Involved:
Lynne W. Lamprecht
Appellee
Jim Allen Loveland
Appellant
United States of America
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JIM ALLEN LOVELAND,

Defendant-Appellant.

No. 13-30162

D.C. No.

1:12-cr-00155-BLW-14

OPINION

Appeal from the United States District Court

for the District of Idaho

B. Lynn Winmill, Chief District Judge, Presiding

Argued and Submitted July 9, 2014

Submission Withdrawn March 16, 2015

Resubmitted May 26, 2016

Seattle, Washington

Filed June 3, 2016

Before: Alex Kozinski*, Andrew J. Kleinfeld,

and Mary H. Murguia, Circuit Judges.

Opinion by Judge Kleinfeld

* Following the death of Judge Alarcón, Judge Kozinski was drawn to

replace Judge Alarcón on the panel. Judge Kozinski has read the briefs,

reviewed the record, and listened to the oral argument.

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2 UNITED STATES V. LOVELAND

SUMMARY**

Criminal Law

The panel reversed the district court’s judgment and

vacated a defendant’s conviction and sentence for conspiracy

to possess methamphetamine with intent to distribute.

The panel held that despite the substantial evidence of the

defendant’s possession for purposes of sale, there was

insufficient evidence for a jury to conclude that he tacitly or

explicitly made the requisite agreement for a conspiracy.

COUNSEL

James K. Ball, Jr., (argued), Manweiler, Manweiler, Breen &

Ball PLLC, Boise, Idaho, for Defendant-Appellant.

Lynne W. Lamprecht (argued) and Syrena Case Hargrove,

Assistant United States Attorneys; Wendy J. Olson, United

States Attorney, Boise, Idaho, for Plaintiff-Appellee.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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UNITED STATES V. LOVELAND 3

OPINION

KLEINFELD, Senior Circuit Judge:

The government had a good case against Jim Loveland

for the felony of possession of methamphetamine with intent

to distribute. The evidence was persuasive that he committed

that crime. His apparent guilt was conceded for purposes of

discussion at oral argument. The barrier to convicting him of

that felony was that he was not charged with it. He was

charged instead with conspiracy to do that. Twelve other

defendants were charged with him and convicted. But even

though four of the others were charged with possession with

intent to distribute, Loveland was not.

Conspiracy means an agreement to commit a crime, not

commission of the crime.1 Though that might sound less

serious to a layman, lawyers know that the conspiracy charge

affects much about trial and sentencing, all to the advantage

of the prosecution. A conspiracy charge imposes one

substantial disadvantage to the prosecution: the prosecution

must prove the existence of the agreement beyond a

reasonable doubt.2 The agreement can be explicit or tacit,

and can be proved by direct or circumstantial evidence,

including inferences from circumstantial evidence,3but it still

has to be proved. Without an agreement, there is no

 

1

See United States v. Lennick, 18 F.3d 814, 818–19 (9th Cir. 1994).

 

2

See United States v. Tran, 568 F.3d 1156, 1163–64 (9th Cir. 2009).

 

3

See United States v. Mincoff, 574 F.3d 1186, 1192 (9th Cir. 2009).

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4 UNITED STATES V. LOVELAND

conspiracy.

4

 Despite the substantial evidence of Loveland’s

possession for purposes of sale, there was insufficient

evidence for a jury to conclude that he tacitly or explicitly

made the requisite agreement. Despite his apparent

criminality, we are compelled under circuit precedent to

vacate his conviction.

Facts.

The government charged twelve defendants with

conspiracy to possess with intent to distribute

methamphetamine. Nine pleaded guilty and cooperated with

the prosecution. Loveland, Jesus Sanchez, and Michael

Morris proceeded to trial and were convicted. We have

affirmed Sanchez and Morris’s sentences in separate

dispositions.5 The indictment includes three counts charging

some of the others with possession with intent to distribute,

but not Loveland. For Loveland, the government took it upon

itself, by its charging decision, to prove conspiracy or

nothing.

The evidence showed that during the relevant period the

lead defendant, Jesus Guadalupe Sanchez,

6

imported about

4

See United States v. Feola, 420 U.S. 671, 692 (1975) (“[T]he essence

of conspiracy is agreement and persons cannot be punished for acts

beyond the scope of their agreement.”); cf. United States v. Moe, 781 F.3d

1120, 1124 (9th Cir. 2015) (“The elements of conspiracy are (1) an

agreement to accomplish an illegal objective, and (2) the intent to commit

the underlying offense.” (internal quotation marks and citation omitted)).

5

See United States v. Sanchez, 583 Fed. App’x 727 (9th Cir. 2014);

United States v. Morris, 583 Fed. App’x 724 (9th Cir. 2014).

 

6

 Also known as Jose Salazar and Che.

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UNITED STATES V. LOVELAND 5

two pounds of methamphetamine per month to Idaho from

Mexico, Arizona, or California, which he bought for $10,000

a pound. He and his coconspirators resold the

methamphetamine to a number of buyers, typically in one- or

two-ounce lots, for about $1,200 per ounce. As might be

expected in a felonious trade, many of the buyers were

regulars, not strangers. Some of the regulars got caught, and

one made a recorded purchase for law enforcement in order

to get a better deal on sentencing. Several of the others

pleaded guilty and testified in exchange for benefits.

At Loveland’s jury trial, three of the coconspirators

testified to repeated sales to Loveland of two ounces at a

time, each time for $2,400. And each time, Loveland paid

cash on delivery. There was testimony that the quantities he

bought were too much for a person to consume himself

without getting sick, so the jury could reasonably infer that

Loveland bought the methamphetamine partly or entirely for

resale.

Two of the coconspirators had different arrangements

with Sanchez. Ben Vertner paid more,—$1,300 per ounce

instead of $1,200—and had an explicit agreement with

Sanchez to resell the drugs he bought. Mario Martinez

sometimes was “fronted” the methamphetamine, which

means he did not have to pay cash on delivery, and would

instead pay for his inventory after he resold it. For Loveland,

though, it was cash on the barrelhead every time—no

discounts, no credit, and no agreement about what he would

do with the drugs. Loveland would call when he wanted a

delivery, and the conspirators would deliver the usual two

one-ounce bags to his house and collect the usual $2,400. 

The testimony put the number of deliveries to Loveland

somewhere between twelve and twenty. There was no

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6 UNITED STATES V. LOVELAND

testimony supporting or implying any involvement by anyone

in the Sanchez group with whatever reselling Loveland might

have been doing.

Loveland moved unsuccessfullyfor judgment of acquittal

at the close of the government’s case, and at the close of

evidence, based on insufficient evidence of conspiracy.

7 The

jury returned a verdict of guilty of conspiring to possess with

intent to distribute 50 grams or more of methamphetamine. 

The district court imposed a mandatory sentence of life

imprisonment because Loveland had two prior convictions

for felony drug offenses.8

Analysis.

We review de novo claims of insufficiency of the

evidence.9“Evidence is sufficient if, when viewed 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.”10

Conspiracy is an agreement to commit a crime, and the

intent to commit the underlying offense.11 We assume for

purposes of decision that Loveland intended to commit the

 

7

See Fed. R. Crim. P. 29(a).

 

8

See 21 U.S.C. § 841(b)(1)(A).

 

9 United States v. Webster, 623 F.3d 901, 907 (9th Cir. 2010).

10 Id. (emphasis added) (internal quotation marks and citation omitted).

11 United States v. Herrera-Gonzalez, 263 F.3d 1092, 1095 (9th Cir.

2001); see 21 U.S.C. § 846.

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UNITED STATES V. LOVELAND 7

crime of possession of methamphetamine for purpose of

distribution.12 And we assume for purposes of decision that

the Sanchez group knew Loveland was probably reselling the

methamphetamine they sold to him, because the quantity

exceeded what he could use himself.13 But Loveland’s intent

to possess for purpose of distribution and the Sanchez group’s

sales to him do not add up to conspiracy.

14 The Sanchez

group has to have agreed with Loveland, expressly or tacitly,

that Loveland should resell the methamphetamine in order for

them to have conspired together.15

We have a long line of decisions directed at the problem

of distinguishing between sale of an illegal substance and

conspiracy of the seller with the buyer for the buyer to

resell.16 The parties agree that United States v. Ramirez and

United States v. Lennick are the most challenging cases for

the government, but disagree on whether Loveland’s

conviction can stand despite these precedents.

 

12 See 21 U.S.C. § 841(a)(1).

13 Cf. United States v. Ocampo, 937 F.2d 485, 488 (9th Cir. 1991)

(“Possession of a large quantity of cocaine alone may be sufficient to infer

both knowledge and intent [to distribute it].”).

 

14 United States v. Ramirez, 714 F.3d 1134, 1140 (9th Cir. 2013).

 

15 United States v. Moe, 781 F.3d 1120, 1124–25 (9th Cir. 2015).

16 See, e.g., United States v. Lapier, 796 F.3d 1090, 1095 (9thCir. 2015);

Moe, 781 F.3d at 1124–25; Ramirez, 714 F.3d at 1140; United States v.

Webster, 623 F.3d 901, 907 (9th Cir. 2010); United States v. Mincoff,

574 F.3d 1186, 1193–94 (9thCir. 2009); United States v. Lennick, 18 F.3d

814, 818–19 & n.4 (9th Cir. 1994).

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8 UNITED STATES V. LOVELAND

Lennick held that the evidence was insufficient to support

a conviction for conspiracy to distribute narcotics, where

Lennick distributed marijuana, but there was no evidence that

he had agreed with the people to whom he sold or gave the

drugs that they should distribute it to others.17 We held that

even Lennick’s knowledge of their distribution would not

suffice without an intention and agreement that they would

distribute to others.18“[C]onspiracy requires proof of ‘an

agreement to commit a crime other than the crime that

consists of the sale itself.’”19 The case before us is stronger

for the government than Lennick on the facts because in

Lennick, arguably, the quantities were too small to support an

inference that Lennick knew his distributees would

redistribute.20 But we worded our holding broadly: “To show

a conspiracy, the government must show not only that

Lennick gave drugs to other people knowing that they would

further distribute them, but also that he had an agreement

with these individuals to so further distribute the drugs.”21In

 

17 Lennick, 18 F.3d at 819.

18 Id. at 818 (“Although an agreement may be inferred from the

defendant’s acts or from other circumstantial evidence, ‘simple

knowledge, approval of, or acquiescence in the object or purpose of a

conspiracy, without an intention and agreement to accomplish a specific

illegal objective, is not sufficient.’” (citation omitted) (quoting United

States v. Melchor-Lopez, 627 F.2d 886, 891 (9th Cir. 1980))).

19

Id. at 819 (quoting United States v. Lechuga, 994 F.2d 346, 347 (7th

Cir. 1993)).

 

20 Id.

 

21 Id.

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UNITED STATES V. LOVELAND 9

so holding, we agreed with the First, Seventh, and Tenth

Circuits.22

We held in United States v. Mincoff that “fronting,” which

means providing the inventory to the buyer on credit, to be

paid after he resells it, could support proof of a conspiracy

between the seller and the buyer for the buyer to resell to a

third party.

23 Mincoff, the buyer, ordered very large

quantities of cocaine, and Mincoff’s seller knew that Mincoff

was purchasing “on behalf of [Mincoff’s] buyer.”24 The

extension of credit to Mincoff in these circumstances helped

to show a conspiracy between the seller and the buyer for the

buyer to resell.25 After all, it is hard to imagine how Mincoff

could have paid his supplier without first selling the inventory

bought on credit. We distinguished Lennick based on the

large quantities of drugs transferred, the testimony that the

seller was acquiring the cocaine for the buyer’s subsequent

buyers, and the extension of credit to the buyer until he

completed the resale. These facts showed a “shared stake” in

the buyer’s reselling enterprise amounting to a conspiracy

between the seller and the intermediate buyer for the buyer to

resell.26

22 See id. at 819 n.4 (citing United States v. Moran, 984 F.2d 1299, 1302

(1st Cir. 1993); United States v. Fox, 902 F.2d 1508, 1514–15 (10th Cir.

1990); United States v. Mancari, 875 F.2d 103, 105–06 (7th Cir. 1989);

United States v. McIntyre, 836 F.2d 467, 471 (10th Cir. 1987)).

 

23 574 F.3d 1186, 1192–93 (9th Cir. 2009).

 

24 Id. at 1190.

 

25 Id. at 1193, 1195.

 

26 Id. at 1194.

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10 UNITED STATES V. LOVELAND

Applying Lennick in United States v. Ramirez, we

reiterated that

[t]o prove conspiracy, the government had to

show more than that Ramirez sold drugs to

someone else knowing that the buyer would

later sell to others. It had to show that

Ramirez had an agreement with a buyer

pursuant to which the buyer would “further

distribute the drugs.”27

We explained that when deciding if there is sufficient

evidence of an agreement, we look for “evidence of a

prolonged and actively pursued course of sales coupled with

the seller’s knowledge of and a shared stake in the buyer’s

illegal venture.”28 Unlike Lennick, which involved small

amounts of marijuana, Ramirez involved repeated sales of

“escalating” quantities of methamphetamine.29 But we held

that even repeated sales and large quantities could not sustain

a conspiracy conviction, in the absence of evidence of

involvement of Ramirez in his buyers’ drug sales.30

Ramirez was a stronger case for the government than this

one. Ramirez’s buyer collected money from the government

undercover agent while Ramirez was nearby and brought the

27 714 F.3d 1134, 1140 (9th Cir. 2013) (quoting Lennick, 18 F.3d at

819).

28 Id. (emphasis added) (quoting United States v. Thomas, 284 F.3d 746,

752 (7th Cir. 2002)).

 

29 Id. at 1136.

 

30 Id. at 1140.

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UNITED STATES V. LOVELAND 11

money immediately to Ramirez. Ramirez exchanged the

methamphetamine immediately, which the go-between

immediately delivered to the undercover agent.31In three out

of four of the sales proved, the undercover agent and Ramirez

were in sight of each other.32 Nevertheless, we held that there

was insufficient evidence of conspiracybetween Ramirez and

the go-between.33 A fortiori, the Sanchez group’s sales to

Loveland, with no involvement in Loveland’s resales, does

not suffice to establish a conspiracy. In Ramirez, the seller

had been present for the resale. No one from the Sanchez

group observed or was told what Loveland was doing with

the methamphetamine.

Subsequently, in United States v. Moe, we held that

“[d]istinguishing between a conspiracy and a buyer-seller

relationship requires a fact-intensive and context-dependent

inquiry that is not amenable to bright-line rules.”34 We listed

ten factors that might aid in the “holistic” evaluation of

sufficiency of evidence.35 We noted that the prolonged

cooperation and mutual coded warning system between the

buyer and seller, as well as quantity and frequency of the

sales, supported an inference of a shared stake.36 We noted

that “fronting” drugs or supplying them on consignment

 

31 Id. at 1136.

 

32 Id. at 1140.

 

33 Id.

 

34 781 F.3d 1120, 1125 (9th Cir. 2015).

 

35 Id. at 1125–26.

 

36 Id. at 1126.

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12 UNITED STATES V. LOVELAND

would also be strong indicators.37 Moe’s frequent 600-mile

round trips and her frequent texting and talking with her

supplier supplied a context from which the jury could infer a

stronger relationship than mere buyer and seller.38

Though courts once called the “buyer-seller rule” a

“narrow exception” to conspiracy,

39

a particularly thoughtful

Supreme Court of Connecticut decision, State v. Allan, notes

that the buyer-seller relationship is a failure of proof of

conspiracy, not an exception to conspiracy.

40 As we held in

Lennick and reiterated in Moe, “conspiracy requires proof of

an agreement to commit a crime other than the crime that

consists of the sale itself,”41

and “the government must show

that the buyer and seller had an agreement to further

distribute the drug in question.”42 Distribution is a different

crime from conspiracy to distribute. For the seller to be

conspiring with the buyer to redistribute, there has to be an

agreement, not just surmise or knowledge, between the seller

 

37 Id. at 1125.

38 See id. at 1123. The distance from Helena, Montana, where Moe

lived, to Spokane, Washington, where she drove monthly to purchase the

methamphetamine fromher supplier, is approximately 300 miles one way.

39 Id. at 1124 (quoting United States v. Parker, 554 F.3d 230, 234 (2d

Cir. 2009)).

 

40 83 A.3d 326, 333, 339–40 (Conn. 2014).

 

41 18 F.3d 814, 819 (9th Cir. 1994) (internal quotation marks omitted);

Moe, 781 F.3d at 1124.

 

42 Lennick, 18 F.3d at 819 n.4; Moe, 781 F.3d at 1124–25.

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UNITED STATES V. LOVELAND 13

and buyer for the buyer to redistribute.43 The agreement is an

element of the crime, and has to be proved.44

Of course, like any element, the agreement may be proved

by direct evidence or circumstantial evidence.45 And the

agreement can be explicit or tacit.46 But the agreement has to

be there. A relationship of mere seller and buyer, with the

seller having no stake in what the buyer does with the goods,

shows the absence of a conspiracy, because it is missing the

element of an agreement for redistribution.47 As the Seventh

Circuit explained in United States v. Brown, “We discuss

buyer-seller relationships at such length because they do not

qualify as conspiracies.”48

We have mentioned extension of credit or taking the

goods on consignment as evidence of an agreement to resell,

because of the “shared stake” the seller and buyer have in

 

43 Lennick, 18 F.3d at 819.

 

44 See Moe, 781 F.3d at 1124.

 

45 See Moe, 781 F.3d at 1125; Lennick, 18 F.3d at 818.

46 See Direct Sales Co. v. United States, 319 U.S. 703, 714 (1943);

United States v. Melchor-Lopez, 627 F.2d 886, 891 (9th Cir. 1980).

 

47 See Allan, 83 A.3d at 335 (“[A] mere buyer-seller relationship lacks

an essential element necessary to form a conspiracy.”); see also United

States v. Ramirez, 714 F.3d 1134, 1140 (9th Cir. 2013) (“And the

government presented no evidence indicating that Ramirez had any kind

of involvement in Bejaran’s drug sales.”).

 

48 726 F.3d 993, 1001 (7th Cir. 2013).

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14 UNITED STATES V. LOVELAND

resale.49 Like any wholesaler giving credit, the drug buyer

may be unable to pay his wholesaler if he cannot resell his

inventory. Credit and consignment were absent, though, in

this cash-on-the-barrelhead case. And we have mentioned the

seller’s assistance with the resale as strong evidence of an

agreement to redistribute.50 That was also absent here. And

there was also no evidence here of high pressure sales by

Sanchez,

51 which might support an agreement to redistribute. 

Loveland called Sanchez; Sanchez did not call Loveland. 

Sanchez offered no incentives for redistribution.52 As we

held in Moe, there is no bright-line rule, and the decision

whether the evidence would allow any reasonable juror to

conclude beyond a reasonable doubt that there was an

agreement for the redistribution must necessarily be context

dependent and “holistic”—that is, a judgment about the

totality of the circumstances.

53 The totality of the

circumstances here do not suggest an agreement. Rather, the

quantities and repeated sales to Loveland would support an

inference that the Sanchez group knew that it was probably

selling drugs to a reseller. But under Ramirez, that is not

49

See Moe, 781 F.3d at 1125; United States v. Mincoff, 574 F.3d 1186,

1193–94 (9thCir. 2009); see also Brown, 726 F.3d at 999 (in consignment

sales “the buyer and seller have enmeshed their interests”).

50 See United States v. Lapier, 796 F.3d 1090, 1095 (9th Cir. 2015);

United States v. Webster, 623 F.3d 901, 907 (9th Cir. 2010).

 

51 See Direct Sales, 319 U.S. at 711.

 

52 Cf. Webster, 623 F.3d at 907.

 

53 Moe, 781 F.3d at 1124–25.

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UNITED STATES V. LOVELAND 15

sufficient evidence to prove that the Sanchez group agreed

with Loveland that he was to redistribute drugs.54

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.

55 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.”56 However,

we share the Seventh Circuit’s skepticism that “‘regular’

purchases on ‘standard’ terms can transform a customer into

a co-conspirator.”57

 

54 See United States v. Ramirez, 714 F.3d 1134, 1140 (9th Cir. 2013).

55 See United States v. Brock, 789 F.3d 60, 65 (2d Cir. 2015) (finding

that the fact the seller had no interest in what the buyer did with the drugs

he purchased and that he viewed the buyer only as a customer vitiated the

inference of an agreement to redistribute).

 

56 549 F.3d 565, 568 (7th Cir. 2008).

 

57 Id. at 567.

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16 UNITED STATES V. LOVELAND

There was no evidence of an agreement, so the evidence

was insufficient to support Loveland’s conspiracyconviction. 

Therefore, we REVERSE the judgment and VACATE

Loveland’s conviction and sentence.

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