Opinion ID: 3037353
Heading Depth: 3
Heading Rank: 2

Heading: Utility of the Ephedrine in the Production of

Text: Methamphetamine Lo contends that the Government was required to prove that ephedrine easily could be extracted from the ma huang extract and used to manufacture methamphetamine, and he further contends that the Government failed to provide sufficient evidence of these facts. Although the Daas court did conclude that the ephedrine in that case was “easily extractable” from the cold tablets, the court did not rule that easy extraction was required. Daas, 198 F.3d at 1175. The Daas court directed its analysis toward determining whether combining the ephedrine with other substances affected the utility of the ephedrine. See id. Given the legislative scheme at issue, such an analysis makes sense. If the chemical that is mingled UNITED STATES v. LO 5465 with other substances cannot ever be used to manufacture a controlled substance, there cannot be a violation of the statute; the reason for statutorily identifying chemicals as listed chemicals is to prevent their use in the manufacture of controlled substances. Section 802(34) defines a list I chemical as a “chemical that is used in manufacturing a controlled substance.” 21 U.S.C. § 802(34). Thus, if the ephedrine in the ma huang extract cannot be used to manufacture a controlled substance, then it cannot be considered a listed chemical. [9] The fact that it is difficult to use a particular chemical to manufacture a controlled substance, however, does not mean that the chemical cannot or will not be used in the manufacture of controlled substances. Drug sales can be extremely lucrative and the selling price of a controlled substance may make it worth the effort and cost to engage in a difficult process to be able to manufacture the drug. Thus, a person is not exempt from prosecution for possession of a listed chemical simply because combining the chemical with other substances makes it difficult to use the chemical to manufacture a controlled substance. [10] For example, DEA regulations exempt unaltered5 ma huang plant material and other ma huang products with relatively low concentrations of ephedrine from certain registration and record-keeping requirements concerning the sale and importation of listed chemicals. See 21 C.F.R. § 1310.12(c), (d)(1). Nevertheless, the regulations explicitly state that an exemption from the record keeping and reporting regulations 5 The ma huang extract at issue in this case would not qualify for such an exemption. The exemption for plant material is limited to plant material that preserves the natural constituents in ratios that are found in the plant’s natural state. 21 C.F.R. § 1310.12(d)(1). The regulation explicitly states that “[p]lant material subjected to chemical or physical extraction, concentration, chemical reaction, or other treatment that alters the plant’s natural constituents or the ratios of the plant constituents are not exempt.” Id. This kind of extracted and concentrated material is precisely the kind of material at issue in the instant case. 5466 UNITED STATES v. LO does not affect “the criminal liability for illegal possession, distribution, exportation, or importation of listed chemicals contained in the exempt chemical mixture.” 21 C.F.R. § 1310.12(b). Therefore, in a case such as the instant one, where the ephedrine concentration in the ma huang extract is too high for the extract even to qualify for an exemption from the registration and record keeping requirements,6 criminal 6 The DEA established the concentration limit based on its concern that exempted chemical mixtures, including ma huang, were providing drug traffickers with an unregulated source for obtaining listed chemicals. See 68 Fed. Reg. 23195, 23196 (May 1, 2003). The DEA was aware that ma huang and ma huang extracts containing ephedrine had been seized from clandestine methamphetamine laboratories. See id. at 23198. The DEA explicitly noted: “DEA studies confirm that the ephedrine contained in such extracts and some dietary supplement products can be readily recovered and can be easily used in the production of methamphetamine.” Id. Thus, the DEA concluded that “Ephedra (in the form of dietary supplements or bulk ephedra extract), therefore, can and is being used as the source of precursor material for the illicit production of methamphetamine.” Id. At first, the DEA responded to these concerns by proposing regulating ma huang products, including ma huang extracts, whenever the percentage of ephedrine exceeded 2%. Id. at 23199. However, members of the dietary supplement industry protested that the regulations would be too burdensome and that their products were not likely to be used to manufacture methamphetamine; therefore, they suggested limiting the regulation of ma huang products to products containing more than 6% ephedrine. Id. at 23199-200. Recognizing that a 2% limit would create a significant regulatory burden, the DEA agreed to raise the concentration limit above 2%. Id. at 23195. However, the DEA agreed to raise the concentration limit only to 5% because it believed that higher concentrations of bulk ephedra extracts are practical sources for a methamphetamine precursor. Id. at 23200. Thus, the DEA concluded that the 5% concentration limit was “expected to exempt the vast majority of dietary supplements containing ephedrine/ pseudoephedrine while allowing bulk ephedra extract to be treated as a regulated chemical.” Id. (emphasis added). This 5% limit is now contained in 21 C.F.R. § 1310.12(c). The uncontradicted testimony in Lo’s case was that the ma huang extract seized from him was an extract that contained 8% ephedrine. Therefore, the ma huang extract seized from Lo would not qualify for the regulatory exemption. UNITED STATES v. LO 5467 liability certainly should be possible even if it is not easy to extract the ephedrine and use it to manufacture methamphetamine. There was sufficient evidence in the record from which a reasonable juror could find that the ephedrine in the ma huang extract seized from Lo could be used to manufacture methamphetamine. The Government’s expert witness, a chemist, testified that she extracted ephedrine from the ma huang extract seized from Lo and that one could use the ephedrine in the ma huang extract to manufacture methamphetamine. She also testified about an alternate method that could be used to extract the ephedrine from the ma huang extract and that this ephedrine could be used to make methamphetamine. In addition, the DEA special agent, who had specialized training in clandestine drug laboratories, testified that ephedrine is used to manufacture methamphetamine. [11] Even Lo’s own expert testified about articles he had read in which people had extracted ephedrine from ma huang. He also testified that he found a method where he could successfully extract ephedrine from ma huang extract and he did, in fact, extract ephedrine oxylate, an ephedrine salt that is a listed chemical. Thus, although Lo’s expert testified that it would be difficult to extract the ephedrine and manufacture methamphetamine, there was sufficient evidence for a jury to find that the ephedrine in the ma huang extract could be used to manufacture methamphetamine. [12] Because we hold that there was sufficient evidence that the ephedrine maintained its separate identity within the ma huang extract and that it could be used to manufacture methamphetamine, we reverse the district court’s grant of acquittals on Counts Four and Five. C. Conspiracy Lo was tried for conspiring to achieve four objects of the conspiracy: 1) to distribute ephedrine, knowing or having rea5468 UNITED STATES v. LO sonable cause to believe the ephedrine would be used to manufacture a controlled substance; 2) to aid and abet the manufacture of methamphetamine; 3) to distribute MDP-2-P, knowing or having reasonable cause to believe the MDP-2-P would be used to manufacture a controlled substance; and 4) to aid and abet the manufacture of Ecstacy. In a special verdict, the jury convicted Lo of conspiring to achieve all four objects of the conspiracy. The jury acquitted Kuan of conspiracy. Following the verdict, the district court denied Lo’s motion for an acquittal on the conspiracy conviction and then denied Lo’s motion for reconsideration. Lo appeals, claiming that there was insufficient evidence to support a conviction for conspiracy. We review de novo the denial of a motion for a Fed. R. Crim. P. 29(c) acquittal, examining the evidence in the light most favorable to the Government to determine whether any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. United States v. Pacheco-Medina, 212 F.3d 1162, 1163 (9th Cir. 2000). 1. Lo’s Co-Conspirator Lo contends that there was insufficient evidence to support the conspiracy conviction because most of his interactions were with undercover operatives. It is true that the agreement in a conspiracy cannot be established with evidence that the defendant had an agreement with a government informer.7 See United States v. Escobar de Bright, 742 F.2d 1196, 11982000 (9th Cir. 1984). The question, therefore, is whether there was sufficient evidence to find a conspiracy with someone other than government agents and informants. 7 In fact, the judge instructed the jury as follows: “Before being con- victed of a conspiracy, an individual must conspire with at least one coconspirator. There can be no conspiracy when the only person with whom the defendant allegedly conspired was a government informer who secretly intended to frustrate the conspiracy.” UNITED STATES v. LO 5469 Lo also argues that any conviction for conspiracy cannot be based on a theory that the convicted person conspired with someone whom the jury acquitted of conspiracy. Therefore, because the jury acquitted Kuan of conspiracy, Lo claims that we may not rely on evidence of an agreement with Kuan to find sufficient evidence that he committed conspiracy. [13] Lo’s argument has no merit. It is well established that a person may be convicted of conspiring with a co-defendant even when the jury acquits that co-defendant of conspiracy. United States v. Valles-Valencia, 823 F.2d 381, 382 (9th Cir. 1987), modifying 811 F.2d 1232 (9th Cir. 1987). Indeed, in Valles-Valencia, we affirmed8 a conspiracy conviction even though there was insufficient evidence that the convicted conspirator conspired with anyone other than people whom the jury acquitted of conspiracy. Id. at 382, modifying 811 F.2d at 1239; see also United States v. Hughes Aircraft Co., 20 F.3d 974, 977-78 (9th Cir. 1994) (affirming conspiracy conviction where “indispensable co-conspirator” was acquitted of conspiracy on identical evidence); United States v. Ayers, 924 F.2d 1468, 1483 (9th Cir. 1991) (affirming conspiracy conviction and concluding that “the acquittal of all conspirators but one does not necessarily indicate that the jury found no agreement” with the acquitted co-conspirators). As a result of this 8 In Valles-Valencia, we originally concluded that the appellant’s conspiracy conviction had to be reversed because his co-conspirators had been acquitted of conspiracy. 811 F.2d at 1239. However, we then reconsidered our opinion in light of United States v. Powell, 469 U.S. 57 (1984). In Powell, the Supreme Court rejected a rule that had allowed defendants to challenge a conviction based on the fact that the conviction was inconsistent with the jury’s other verdicts. Powell, 469 U.S. at 66. The Supreme Court reasoned that inconsistent verdicts do not necessarily lead to the conclusion that the guilty verdict was the incorrect verdict. Id. at 65. In Valles-Valencia, we relied upon Powell to conclude that “inconsistent verdicts can just as easily be the result of jury lenity as a determination of the facts. Thus, the acquittal of all conspirators but one does not necessarily indicate that the jury found no agreement to act.” Valles-Valencia, 823 F.2d at 381-82. We therefore affirmed the conspiracy conviction based on an agreement with acquitted co-defendants. Id. 5470 UNITED STATES v. LO legal precedent, we must affirm Lo’s conviction for conspiracy if there is sufficient evidence that he conspired with Kuan, even though the jury acquitted Kuan of conspiracy. 2. The Sufficiency of the Evidence To establish a drug conspiracy, the Government must prove: 1) an agreement to accomplish an illegal objective; and 2) the intent to commit the underlying crime. United States v. Iriarte-Ortega, 113 F.3d 1022, 1024 (9th Cir. 1997), amended on denial of reh’g, 127 F.3d 1200 (9th Cir. 1997). Proof of the agreement may be based on circumstantial evidence from which the jury may draw an inference of an agreement. Id. at 1024. Thus, a conspiracy may be proven by circumstantial evidence that the defendants acted together towards a common goal. Id. Here, the crimes that were the alleged objects of the conspiracy were illegal distribution of listed chemicals and aiding and abetting the manufacture of controlled substances. Illegal distribution of a listed chemical in violation of section 841(c) requires knowingly distributing a substance that is a listed chemical knowing or having reasonable cause to believe that the listed chemical will be used to manufacture a controlled substance. 21 U.S.C. § 841(c)(2). Aiding and abetting contains four elements: (1) that the accused had the specific intent to facilitate the commission of a crime by another, (2) that the accused had the requisite intent of the underlying substantive offense, (3) that the accused assisted or participated in the commission of the underlying substantive offense, and (4) that someone committed the underlying substantive offense. United States v. Garcia, 400 F.3d 816, 818 n.2 (9th Cir. 2005) (citations and emphasis omitted). UNITED STATES v. LO 5471 [14] Section 841(a) prohibits “knowingly or intentionally” manufacturing a controlled substance. 21 U.S.C. § 841(a). As with unlawful possession under section 841(a), there is a criminal intent requirement for unlawfully manufacturing a controlled substance in violation of section 841(a), so knowledge that one is manufacturing an unlawful substance is a required element. Cf. United States v. Lopez-Martinez, 725 F.2d 471, 474 (9th Cir. 1984) (holding that to prove unlawful possession under section 841, the defendant must have knowledge that he possessed a controlled substance). Therefore, the charge of conspiracy to aid and abet the manufacture of a controlled substance requires a belief that the chemicals will be used to manufacture a controlled substance, not just reasonable cause to believe that the chemical will be used to manufacture controlled substances. Examining the evidence in the light most favorable to the Government, we hold that there was sufficient evidence to support a verdict that Lo conspired with Kuan9 to achieve the methamphetamine-related objects of the conspiracy. On January 15, 2002, surveillance agents saw Kuan loading barrels into vans and then unloading the barrels at a trash dump. The agent also testified that the barrels he observed looked like the seized barrels that contained ma huang extract. On April 11, 2002, Kuan helped Lo load approximately 18 heavy and large trash bags from a storage locker into a van. Kuan and Lo then took the van to their apartment and backed the van into the garage. On April 12, 2002, a special agent observed Kuan closing the door to her van with barrels inside of it. Kuan and Lo then took the barrels to the apartment and into the parking garage, where they then unloaded the barrels. Later that day, agents seized 40 barrels of ma huang extract from that location. The agents subsequently found 297 more barrels at another storage locker to which Kuan and Lo had joint access. 9 The Government also claims that there is sufficient evidence to prove that Lo conspired with persons whose names are unknown, as charged in the indictment. Since we hold that there is sufficient evidence to find a conspiracy between Lo and Kuan, we need not reach this issue. 5472 UNITED STATES v. LO A witness from the pharmaceutical company testified that he delivered the barrels of ma huang extract to both Lo and Kuan. Even more significantly, that witness also testified that he saw both Kuan and Lo remove the identifying labels from the barrels of ma huang extract. Since possession of ma huang extract was not in and of itself illegal, this is compelling evidence that Kuan and Lo actually believed that the huge volume of ma huang extract they were hiding in storage units was going to be used to manufacture methamphetamine and that they were trying to hide their unlawful conduct. Thus, we hold that, viewing the evidence in the light most favorable to the Government, there was sufficient evidence that Lo and Kuan conspired to distribute ephedrine,10 knowing or having reasonable cause to believe the ephedrine would be used to manufacture a controlled substance and that they conspired to aid and abet the manufacture of methamphetamine. There also was sufficient evidence to support the jury verdicts relating to the Ecstasy related objects of the conspiracy. On April 11, 2002, agents saw Kuan come out of the apartment garage and give Lo a plastic bottle containing brown liquid. On April 12, 2002, agents seized from that same location a five-gallon box containing the brown liquid, which was MDP-2-P. [15] Kuan also was present at a meeting in which Lo and others discussed the progress of the Ecstasy manufacturing, including the estimated date that the Ecstacy would be deliv10 Lo argues that, at the very least, there was insufficient evidence regarding the object of distributing ephedrine because he agreed only to distribute ma huang, not ephedrine. There are two problems with this argument. First, as discussed above, there was sufficient evidence to find that the ma huang extract contained ephedrine. Second, Lo did not have to possess ephedrine to conspire to distribute ephedrine. Even if Lo possessed only ma huang extract and not ephedrine, there is sufficient evidence that he was part of a conspiracy where there was an agreement to ensure that ephedrine was obtained from the ma huang extract and distributed for purposes of manufacturing methamphetamine. UNITED STATES v. LO 5473 ered to Lo. Her presence was not mere happenstance; the agents had been informed ahead of time that she was going to attend the meeting. Examining the evidence in the light most favorable to the Government, there is sufficient evidence to support a verdict that Kuan and Lo conspired to distribute MDP-2-P, knowing or having reasonable cause to believe the MDP-2-P would be used to manufacture a controlled substance and that they conspired to aid and abet the manufacture of Ecstasy. Therefore, we affirm the district court’s denial of Lo’s motion for an acquittal on the conspiracy count.