Court Opinion

ID: 2793706
Source: CourtListenerOpinion
Date Created: 2015-04-14 20:01:22.352139+00
Date Added: 2024-06-11T11:29:06.316212
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                APR 14 2015

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                        No. 13-10172

              Plaintiff - Appellee,              D.C. No. 3:10-cr-00642-CRB-6

  v.
                                                 MEMORANDUM*
JOSEPH CAROZZA,

              Defendant - Appellant.

UNITED STATES OF AMERICA,                        No. 13-10179

              Plaintiff - Appellee,              D.C. No. 3:10-cr-00642-CRB-2

  v.

DANIEL JOHNSON,

              Defendant - Appellant.

UNITED STATES OF AMERICA,                        No. 13-10198

              Plaintiff - Appellee,              D.C. No. 3:10-cr-00642-CRB-1

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
  v.

CHRISTOPHER NAPOLI,

              Defendant - Appellant.

                  Appeal from the United States District Court
                      for the Northern District of California
                Charles R. Breyer, Senior District Judge, Presiding

                      Argued and Submitted March 10, 2015
                           San Francisco, California

Before: BYBEE, CALLAHAN, and OWENS, Circuit Judges.

       Defendants-Appellants Chris Napoli, Daniel Johnson, and Joseph Carozza

(“Defendants”) appeal their convictions for conspiracy to distribute and possess

with intent to distribute Schedule III and IV controlled substances in violation of

21 U.S.C. § 846, and possession with intent to distribute a Schedule IV controlled

substance in violation of 21 U.S.C. § 841(a)(1), (b)(2), arising out of the operation

of an internet pharmacy. Napoli and Johnson also appeal their convictions for

conspiracy to launder money in violation of 18 U.S.C. § 1956(a)(2)(A), (h).

Defendants argue that the district court abused its discretion by excluding certain

evidence at trial: the testimony of a DEA Administrator, a Congressional Research

Service Report, and portions of a civil complaint filed by Defendants Napoli and

Carozza seeking declaratory relief. Defendants also contend that the district court

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erred in its formulation of jury instructions. Defendants further assert that the

district court should have dismissed the indictment because DEA witnesses

testified inaccurately before the grand jury. We have jurisdiction under 28 U.S.C.

§ 1291, and we affirm.

      1.     The district court did not abuse its discretion by excluding

Defendants’ proffered evidence at trial. Both the Fifth Amendment right to due

process and the Sixth Amendment right to compulsory process “guarantee[]

criminal defendants a meaningful opportunity to present a complete defense.”

United States v. Stever, 603 F.3d 747, 755 (9th Cir. 2010) (internal quotation

marks omitted). The admissibility of proffered evidence is reviewed under an

abuse of discretion standard. United States v. Orm Hieng, 679 F.3d 1131, 1141

(9th Cir. 2012). “‘We may affirm the district court’s evidentiary ruling on any

grounds supported by the record.’” Id. (quoting United States v. Ibarra-Pino, 657

F.3d 1000, 1005 (9th Cir. 2011)). Even “where the district court did not explicitly

exclude the evidence under Rule 403, the appellate court may affirm the district

court based on Rule 403.” United States v. Blaylock, 20 F.3d 1458, 1464 (9th Cir.

1994).

      The district court could have concluded that the probative value of the

excluded evidence was “substantially outweighed by a danger of . . . unfair

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prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or

needlessly presenting cumulative evidence.” Fed. R. Evid. 403. Defendants assert

that the proffered evidence had a tendency to demonstrate the reasonableness of

their subjective belief that their conduct complied with the statute. However, the

precise issue for the jury’s consideration was not Defendants’ belief about the law,

but rather Defendants’ good faith belief that a physician was issuing prescriptions

in the usual course of professional practice and for a legitimate medical purpose.

See United States v. Feingold, 454 F.3d 1001, 1007–08 (9th Cir. 2006). Thus, the

evidence had limited probative value. Furthermore, the district court could have

concluded that government officials’ statements about the law and Defendants’

self-serving statements in the civil complaint would obfuscate the issues for the

jury. Given these circumstances, we cannot say that the exclusion of evidence was

an abuse of discretion.

      Defendants’ reliance on United States v. James, 169 F.3d 1210 (9th Cir.

1999) (en banc), is misplaced. James did not hold that all corroborating

documentary evidence must be admitted in every case. Nor did James displace the

general rule that the district court may exclude evidence under Federal Rule of

Evidence 403.

      But even if the district court erred by excluding this evidence, any error was

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harmless beyond a reasonable doubt. See United States v. Pineda-Doval, 614 F.3d

1019, 1033–34 (9th Cir. 2010). First, upon review of the proffered testimony by

the DEA Administrator and the Congressional Research Service Report, this

evidence appears largely unfavorable to Defendants. Moreover, there was

overwhelming evidence at trial disproving Defendants’ good faith belief that their

physicians acted with a legitimate medical purpose and within the usual bounds of

medical practice. Defendant Carozza approved hundreds of prescriptions daily.

Carozza continued to prescribe medications in this manner even after being

interviewed by the DEA. Furthermore, the online questionnaire had no mechanism

to confirm the accuracy of the information being provided; did not ask for any

medical records; did not provide for follow-up contact; did not permit customer

consultation with a doctor; and did not require customers to submit a valid form of

identification. Each Defendant, aware of the preceding facts, stood to gain

hundreds of thousands of dollars. Thus, there was overwhelming evidence that

Defendants lacked a good faith belief that their physicians’ conduct was for a

legitimate medical purpose or was within the scope of professional standards.

      2.    The district court did not err in its formulation of the jury instructions.

Whether jury instructions omit or misstate elements of a statutory crime or

adequately cover a defendant’s proffered defense are questions of law reviewed de

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novo. See United States v. Hofus, 598 F.3d 1171, 1174 (9th Cir. 2010); United

States v. Morsette, 622 F.3d 1200, 1201 (9th Cir. 2010) (per curiam). A district

court’s formulation of jury instructions is reviewed for an abuse of discretion. See

Hofus, 598 F.3d at 1174. “The adequacy of jury instructions is determined by

examining them as a whole.” United States v. Ibarra-Alcarez, 830 F.2d 968, 973

(9th Cir. 1987) (citing United States v. Hayes, 794 F.2d 1348, 1351 (9th Cir.

1986)). “It is not error to refuse a proposed instruction if the other instructions,

when viewed in their entirety, cover that theory.” Id. “[S]o long as the instructions

fairly and adequately cover the issues presented, the judge’s formulation of those

instructions or choice of language is a matter of discretion.” United States v.

Melvin, 91 F.3d 1218, 1224 (9th Cir. 1996) (internal quotation marks omitted).

       The district court did not err by instructing the jury that the government was

not required to prove that Defendants knew they were violating the law. None of

the underlying crimes charged required that Defendants know that they were

violating the law. See 21 U.S.C. §§ 841(a)(1), (b)(2), 846; 18 U.S.C.

                                           6
§ 1956(a)(2)(A), (h).2 A conspiracy charge does not require that the defendant

know that she is violating the law unless the underlying crime so requires. United

States v. Baker, 63 F.3d 1478, 1493 (9th Cir. 1995); see also United States v.

Hubbard, 96 F.3d 1223, 1229 (9th Cir. 1996) (“[A] federal conspiracy conviction

does not require a greater level of criminal intent than a conviction on the

substantive count.”). Nor is an aider and abettor required to have specific

knowledge that her assistance is illegal. United States v. Delgado, 357 F.3d 1061,

1068 (9th Cir. 2004); cf. United States v. McDaniel, 545 F.2d 642, 644 (9th Cir.

1976).

      The district court did not err by instructing the jury that Defendants’ belief

that they were in compliance with the law or that the government lacked the

authority to enforce the law in a particular way was not, standing alone, a defense.

Defendants’ beliefs about the law as written were irrelevant, as the precise issue for

the jury’s consideration was whether Defendants believed that their physicians

      2
        Unlike other sections of the federal money laundering statute,
§ 1956(a)(2)(A) does not require the defendant know that the property involved
constitutes the proceeds of unlawful activity. Compare 18 U.S.C. § 1956(a)(2)(A),
with id. § 1957(a); see also United States v. Turman, 122 F.3d 1167, 1169 (9th Cir.
1997) (holding that under a different statute, 18 U.S.C. § 1957, the government
was required to prove the defendant knew the laundered funds were derived from
illegal activity), abrogated on other grounds by Henderson v. United States,
— U.S. —, 133 S. Ct. 1121 (2013).

                                          7
were issuing prescriptions in the usual course of professional practice and for a

legitimate medical purpose. See Feingold, 454 F.3d at 1007–08. Likewise,

Defendants’ purported belief that the DEA lacked authority to enforce the law in a

particular way would be irrelevant and not a defense to the crimes charged. See

Cheek v. United States, 498 U.S. 192, 204–06 (1991) (district court properly

instructed jury to disregard the defendant’s assertion that tax laws were

unconstitutional).

      The district court’s jury instructions did not permit the jury to convict

Defendants based on a physician’s mere malpractice. The district court was

acutely aware of this risk, and added the express instruction: “It is not enough for

the United States to prove that a practitioner committed malpractice, intentional or

otherwise.”

      The district court did not err by refusing to instruct the jury regarding

in-person examinations, the Ryan Haight Act, or the distinction between lay

people, and professional physicians and pharmacists. Rather, the district court

properly instructed the jury to consider all of the evidence in determining whether

Defendants acted in good faith. See Hofus, 598 F.3d at 1174.

      The district court also had a sufficient basis to instruct the jury that it could

find Defendants acted knowingly if the jury found that Defendants were

                                           8
deliberately ignorant. See United States v. Heredia, 483 F.3d 913, 918 (9th Cir.

2007) (en banc).

      3.     Finally, any misstatements by the DEA agents before the grand jury

were rendered harmless by the petit jury’s guilty verdict. “[A] petit jury’s verdict

of guilty beyond a reasonable doubt demonstrates a fortiori that there was probable

cause to charge the defendants with the offenses for which they were convicted.”

United States v. Mechanik, 475 U.S. 66, 67 (1986); see also United States v.

Bingham, 653 F.3d 983, 998–99 (9th Cir. 2011). Defendants contend that under

Bank of Nova Scotia v. United States, we may reverse their convictions if we find

“[a] violation substantially influenced the grand jury’s decision to indict or if there

is grave doubt that the decision to indict was free from the substantial influence of

such violations.” 487 U.S. 250, 256 (1988) (internal quotation marks omitted).

But Bank of Nova Scotia applies only when the district court considers a motion to

dismiss the indictment prior to the petit jury verdict. United States v. Navarro, 608

F.3d 529, 539–40 (9th Cir. 2010). Therefore, the district court did not err by

denying Defendants’ motion to dismiss the indictment after the petit jury rendered

its guilty verdict convicting Defendants.

      AFFIRMED.

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