Opinion ID: 525037
Heading Depth: 2
Heading Rank: 2

Heading: Challenge to the Convictions Based on Replacement Cost

Text: 17 Kaylor also challenges the jury's conviction as erroneous because of the district court's failure to specifically define to the jury the term material or compound or to instruct that replacement cost should include wholesale discounts available to the particular pharmacy and the lesser cost of generic equivalents for stolen brand-name drugs. Additionally, Kaylor asserts that the Government presented insufficient evidence that the replacement cost of the drugs taken from each pharmacy met or exceeded $500. 18 Initially, turning to the instruction relating to the statute, the court stated to the jury the following as elements of the offense: 19 Four essential elements are required to be proved in order to establish the offense charged in the indictment: 20 First: The act of taking, from the person or presence of another, any material or compound containing any quantity of a controlled substance belonging to or in the care, custody, management, or possession of a person or pharmacy registered with the Drug Enforcement Administration; 21 Second: The act of taking such controlled substance by force or violence or by means of intimidation; 22 Third: The material or compound containing any quantity of a controlled substance stolen must have a replacement cost to the pharmacy of not less than $500.00; 23 Fourth: Doing such act or acts willfully. 24 To convict a defendant of robbery of a federally registered pharmacy, the Government must prove each of these essential elements beyond a reasonable doubt. 25 (T. at 660-61). This instruction adequately covered the necessary elements of the crime. 26 Kaylor sought an instruction that would take the price of a generic equivalent as a replacement cost for drugs taken from the Clark Pharmacy. No authority supports the giving of such an instruction which would require substitution of the replacement cost of generic drugs for the cost of stolen brand-name drugs. We think the trial court adequately defined replacement cost to the jury as follows: 27 The replacement cost of the materials or compounds containing controlled substances should be determined separately for each indictment. The replacement cost for each pharmacy is the amount of money necessary to replace the materials or compounds stolen. If the replacement cost to the registrant is less than $500.00 for the offense charged, you must find the defendant not guilty of that charge. 28 (T. at 664-65). 29 Although no case appears to define the statutory phrase replacement cost    to the registrant, we think it self-evident that when replacement occurs within a reasonable time after the robbery, the Government must prove that the registrant incurred an actual cost of at least $500 in replacing the stolen items. On the other hand, when replacement does not occur within a reasonable time, the proof should establish the amount of money, not less than $500, necessary for the registrant to replace the stolen items. In such cases, the average wholesale price for those items at or near the time of the robbery may establish the replacement cost to the registrant. This calculation comports with the lone piece of legislative history on point, a House report which states that Congress used the term replacement cost in an effort to assure that Federal jurisdiction will be applied with a high degree of uniformity across the nation without need to take into account the variations in markup between different retailers. H.R. No. 644, 98th Cong., 2d Sess. 5, reprinted in 1984 U.S.Code Cong. & Admin. News 521, 525. 3 30 In this case, the Government presented adequate proof that the replacement cost to each pharmacy exceeded the statutory minimum, although Kaylor controverted that proof at trial. As to the Nile Pharmacy, the owner used the October 1987 red book to calculate the average wholesale price of the stolen drugs at $612.23. Three months later, and after the return of the indictment, the pharmacy replaced all of the allegedly stolen drugs at a cost of $500.21. As to the Clark Pharmacy, the pharmacist in charge estimated the quantity of drugs taken and, using the average wholesale price, estimated the replacement cost at $883.06. Subtracting available discounts, he estimated the actual replacement cost at no less than $775.00. Thus, the issue of replacement cost to each pharmacy rested with the jury upon the evidence presented by the prosecution and the defendant. 31 Finally, Kaylor argues that the trial court abused its discretion in denying him access to inventory and sales records of the Clark Pharmacy. Kaylor sought these records as a basis to perform an audit to challenge the Government's proof of the amounts of drugs stolen. The magistrate denied discovery, and the district court affirmed on the basis of relevancy. 32 Because the request called upon the pharmacy to produce thousands of retained prescription orders, we believe the ruling rested within the proper discretion of the district court. Moreover, Kaylor fails to show any prejudice from the ruling. See United States v. Woosley, 761 F.2d 445, 449 (8th Cir.1985). The request called for records of Schedule II drugs, but Schedule III drugs also had been taken in the robbery. Therefore, Kaylor could not have performed an accurate audit based on the requested records.