Court Opinion

ID: 2997197
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:34:30.849906+00
Date Added: 2024-06-11T09:33:48.234533
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 03-4004
UNITED STATES OF AMERICA,
                                              Plaintiff-Appellee,
                               v.

KENNETH SHEARER,
                                          Defendant-Appellant.

                         ____________
       Appeal from the United States District Court for the
       Northern District of Indiana, Fort Wayne Division.
            No. 01 CR 49—William C. Lee, Judge.
                         ____________
     ARGUED JUNE 4, 2004—DECIDED AUGUST 12, 2004
                     ____________

 Before FLAUM, Chief Judge, and DIANE P. WOOD and
EVANS, Circuit Judges.
   FLAUM, Chief Judge. On June 20, 2002, Kenneth Shearer
was convicted of dealing in display fireworks without a
license issued by the Bureau of Alcohol, Tobacco & Firearms
(“ATF”), placing false labels on cases of display fireworks,
and knowingly receiving display fireworks in interstate
commerce. He now appeals his conviction and sentence. For
the reasons stated herein, we affirm the judgment of con-
viction and remand the case for resentencing.
2                                               No. 03-4004

                     I. BACKGROUND
   In 1999, Kenneth Shearer was the owner and operator of
All American Professional Fireworks (“All American”) which
was in the business of selling display fireworks. Due to the
dangerous nature of such devices, the ATF strictly regulates
their distribution and requires that every dealer be licensed
and inspected by the ATF. Shearer did not have a such a
license, at least not in July 1999 when an undercover agent
from the U.S. Consumer Product Safety Commission
arrived at All American and purchased two boxes of display
fireworks.
  As was already noted, display fireworks are inherently
dangerous items. Classified as “1.3G” devices, display fire-
works are those that contain more than 130 milligrams of
flash powder per tube. They are thus distinguishable from
consumer fireworks, which are classified as “1.4G” devices
and have 130 milligrams or less of flash powder per tube.
Unlike consumer fireworks, display fireworks pose a risk of
mass detonation. This risk is a serious one, and if there is
an accident involving display fireworks, emergency person-
nel must evacuate all persons within a half-mile radius of
the site. To prevent such accidents, display fireworks
dealers must store the fireworks in an explosives magazine
inspected by the ATF and located away from inhabited
buildings and highways. To avoid more purposeful mischief
with display fireworks, those transporting the devices must
swear under penalty of perjury that they are acting on
behalf of one licensed by the ATF, each display firework
must be shipped with a specific label designating it as
“1.3G”, and dealers must keep clear records indicating the
amount and type of display fireworks on the premises. In
contrast, the ATF has no regulations for the storage, trans-
portation, or distribution of consumer fireworks.
  Although Shearer at one time possessed a license to sell
display fireworks, this license expired in January 1998.
No. 03-4004                                                 3

Thus, when an undercover agent purchased two boxes of
single shot Thunder Kings from All American in July 1999,
and each Thunder King contained an average of 3,716 mil-
ligrams of flash powder per tube, Shearer became the sub-
ject of an ATF investigation. The investigation culminated
in a search of All American’s premises which uncovered
twenty-five cases of display fireworks, invoices showing
purchases of display fireworks, and an ATF permit issued
to a “Robert Bombka.” Additionally, ATF agents discovered
that many of the cases of display fireworks had false “1.4G”
labels placed directly over the correct “1.3G” labels.
  Shearer was subsequently indicted and charged with en-
gaging in the business of dealing in display fireworks without
an ATF license, placing false labels on cases of display fire-
works in violation of the Hazardous Materials Transportation
Act, and knowingly receiving display fireworks in interstate
commerce. After a jury trial, Shearer was convicted on all
counts against him and sentenced to concurrent sentences
of 80 months’ imprisonment and 60 months’ imprisonment.
Shearer now appeals his conviction and sentence.

                      II. DISCUSSION
   Shearer’s first issue on appeal is whether the district
court erred by allowing testimony at trial that Shearer sold
display fireworks in 1998 and 2000. Shearer argues that
because he was charged only with dealing in display
fireworks from May 1999 through July 1999, any evidence
regarding 1998 and 2000 is improper character evidence
under Federal Rule of Evidence 404(b). The government
responds that the evidence was proper under Rule 404(b)
because it was used to rebut Shearer’s assertion that he
was keeping the fireworks for his own personal use and to
establish instead that Shearer intended to deal in display
fireworks in 1999.
4                                               No. 03-4004

  As Shearer failed to object to the use of this evidence at
trial, we review the district court’s admission of the testi-
mony for plain error. See United States v. Carroll, 871 F.2d
689, 691 (7th Cir. 1989). Under this standard of review, we
must find that: (1) an error occurred; (2) the error was
“plain,” that is, it was clear or obvious; and (3) the error
affected the outcome of the district court proceedings. See
United States v. Olano, 507 U.S. 725, 731-35 (1993). Unfor-
tunately for Shearer, he cannot show any error, let alone an
error that is plain.
  The challenged testimony is that of two fireworks vendors
who purchased display fireworks from All American
annually. One of these vendors, Pauline St. Marie, testified
that she spent approximately $10,000 at All American each
season, beginning in 1996 and continuing until 2000. The
other vendor, Johnathan Hetzer, testified that he began
purchasing cases of display fireworks from All American in
1998 and returned in 1999 with yet a third seasonal fire-
works seller, Michael Crosby. The testimony of these vendors
established that All American generated large profits by
dealing in display fireworks, and that it had ongoing rela-
tionships with customers who transacted business with All
American regularly. This, in turn, helped show that Shearer’s
possession of twenty-five cases of display fireworks was for
the purpose of dealing in display fireworks rather than for
Shearer’s personal use.
  Rule 404(b) does not ban all evidence of a defendant’s pri-
or bad acts. It prohibits only evidence used “to prove the
character of a person in order to show action in conformity
therewith,” while allowing evidence that is for the purpose
of proving such things as “motive, opportunity, intent, prep-
aration, plan, knowledge, identity, or absence of mistake or
accident.” Fed. R. Evid. 404(b). In this case, the government
had the burden of showing that Shearer was engaged in the
business of dealing in display fireworks. Shearer disputed
this and, in fact, argued that he was simply keeping display
No. 03-4004                                                  5

fireworks for his own personal use. St. Marie’s and Hetzer’s
testimony was properly directed towards proving Shearer’s
intent to deal by demonstrating that Shearer engaged in
regular and repeated transactions involving display fire-
works with a consistent group of buyers. The admission of
this evidence therefore did not violate Rule 404(b).
   Shearer next contends that his sentence was improper.
Specifically, Shearer challenges several enhancements to
his sentence based upon the district judge’s factual findings
that: (1) Shearer’s offense involved more than 1,000 pounds
of explosive materials; (2) Shearer was the organizer or leader
of a criminal organization that involved five or more
participants or was otherwise extensive; (3) Shearer used a
minor to commit the offense; and (4) Shearer committed
perjury by denying virtually every fact material to his guilt
at trial. Additionally, Shearer believes that he merited a
sentence reduction for acceptance of responsibility.
  Although such challenges to the application of the
Sentencing Guidelines would have presented us with little
difficulty a few weeks ago, the Supreme Court’s decision in
Blakely v. Washington, 2004 WL 1402697 (U.S. June 24,
2004) and our reading of Blakely in United States v. Booker,
2004 WL 1535858 (7th Cir. July 9, 2004), demonstrate that
the constitutional validity of the Guidelines is in doubt. See
also United States v. Pineiro, 2004 WL 1543170 (5th Cir.
July 12, 2004) (addressing this issue but holding that
Blakely should not be read to invalidate the U.S. Sentencing
Guidelines). Under Blakely as interpreted in Booker, a
defendant has the right to have a jury decide factual issues
that will increase the defendant’s sentence. As Booker
holds, the Guidelines’s contrary assertion that a district
judge may make such factual determinations based upon
the preponderance of the evidence runs afoul of the Sixth
Amendment. Thus, in light of Booker, we must remand this
case to the district court for resentencing.
6                                            No. 03-4004

                   III. CONCLUSION
  For the foregoing reasons, the judgment of conviction is
AFFIRMED. The sentence imposed is VACATED and the case
is REMANDED for resentencing.

A true Copy:
      Teste:

                       ________________________________
                       Clerk of the United States Court of
                         Appeals for the Seventh Circuit

                  USCA-02-C-0072—8-12-04