Wednesday, March 16, 2005

Circuit Approves Novel Use of Midtrial Superceding Indictment to Allege Missing Jurisdictional Element

United States v. Milstein, No. 01-1499 (March 10, 2005) (Van Graafeiland, Kearse, Wesley, Per Curiam). This case is chock full of interesting legal issues (including whether the defense of "laches" can be applied in a criminal trademark infringement case . . . it can't), but we'll try keep focused on the most salient aspects of the decision. First, the Court approved of the novel procedure employed by the District Court which permitted the government, midtrial, to amend an indictment that had failed to allege a necessary jurisdictional element. Second, the Court found a Fifth Amendment violation with respect to one of the counts of conviction based on what it concluded was a constructive amendment of the indictment. The Court therefore affirmed four counts of conviction, vacated the conviction on the count that was deemed constructively amended, and remanded for further proceedings on the vacated count (in the event sought a retrial) and for resentencing in light of Booker.

Facts: Moshe Milstein, through a number of different buinesses, bought, repackaged, and sold 3 foreign prescription drugs: Eldepryl (a Parksinson's disease treatment), Pergonal and Metrodin (fertility drugs). During the time period of his prescription drug sales, there was only one FDA-approved distributor of Eldepryl, and one for Pergonal and Metrodin. The FDA-approved distributors sold drugs that were made and packaged outside of the United States, but in compliance with FDA standards. The drugs that Milstein purchased were made for distribution outside of the United States, but Milstein stripped them of their original packaging, repackaged them with forged labels and packaging materials to mimic the FDA-approved drugs, and then sold the drugs in the United States to doctors, pharmacists, and pharmaceutical wholesalers.

The drugs Milstein sold were not identical to the FDA-approved variety. For one thing, the fertility drugs came from a different batch of the active ingredient than the drugs approved by the FDA. For another thing, the saline solution packaged with the fertility drugs was contaminated with bacteria and endotoxins and, therefore, was not "sterile" as claimed on the label. The government also offered evidence that Milstein undertook to hide his unlawful conduct: he sold drugs through two different companies which he registered as drug wholesalers in New Jersey, but not in New York (which was required in order to sell drugs in New York); the companies' registrations were filed in the names of other people; and when an investigation was in the offing, Milstein transferred $400,000 to an account in Israel by way of complex transactions routed through Switzerland.

Milstein was charged in a five-count indictment with distributing misbranded drugs in interstate commerce with fraudulent intent (21 USC 331(a) and 333(a)(2)), knowingly distributing wholesale prescription drugs in interstate commerce without a required state license (21 USC 33a(t), 333(b)(1), and 353(e)(2)(A)), knowingly distributing prescription drugs in violation of criminal trademark laws (18 USC 2320(a)), distributing wholeslae prescription drugs without providing a required history of transactions (21 USC 331(t), 333(a)(2), and 353(e)(1)(A)), and conspriacy to commit the first three crimes listed above. He was also charged with a tax count, to which he pled guilty after trial.

On March 8, 2000, immediately after the jury was sworn in at trial, the defense moved for a judgment of acquittal on the count that charged him with selling prescription drugs without a license because the indictment failed to allege the jurisdictional element, which requires that the transactions took place in interstate commerce. The government asked the court to return to the Grand Jury to add such an allegation. In the meantime, the trial continued. On March 17, 2000, Judge Dearie granted a "theoretical . . . mistrial" on the count, prompted by the "manifest necessity" of Milstein's motion for acquittal based on the jurisdictional defect. The government was given permission, however, to return to the Grand Jury to secure an amendment which would add the jurisdictional element to the count in question. Then, Judge Dearie held that the evidenced presented at the trial would be deemed presented in connection with the amended indictment. On March 22, 2000, the Grand Jury returned a superceding indictment, adding "in interstate commerce" where necessary. And as promised, the District Court incorporated all of the prior trial evidence nunc pro tunc ("now for then") into the record of the trial on the superceding indictment. On appeal, Milstein argued that the procedure violated his rights under the Fifth Amendment's Double Jeopardy Clause.

In its count charging Milstein with distributing misbranded drugs in interstate commerce with fraudulent intent, the government specifically alleged in the indictment that "[f]orgery or falsification of any part of the packaging material, including the instructional inserts, lot numbers or expiration dates, renders the drug misbranded under federal law," and charged that Milstein "regularly distributed [the modified drugs] that had been re-packaged using forged materials." It further claimed that Milstein (and others) "sold these re-packaged drugs as if they were the original product from the licensed manufacturers, thus distributing misbranded drugs." At trial, however, the government contended that its proof that the saline for the drugs was contaminated with bacteria and endotoxins was proof relevant to this count because the saline was labled "sterile," when in fact it was not. Indeed, when the government returned, midtrial, to obtain its superceding indictment, it presented evidence of this contamination to the Grand Jury as proof that the drugs were misbranded. But the government did not obtain an amendment of this count to include that specific allegation. Nonetheless, the District Court instructed the jury that it could find Milstein guilty of the misbranding count if the labeling suggestesd, falsely, that the saline was "sterile" when in fact it was contaminated. On appeal, Milstein argued that the instruction allowed him to be convicted of misbranding on the basis of the contamination evidence, constructively amending the indictment.

Court's Rulings: The Court rejected the defense argument that Milstein's Double Jeopardy rights were violated by the midtrial superceding indictment, followed by the District Court's incorporation of all of the prior trial evidence nunc pro tunc. The Court, citing the Supreme Court's decision in Illinois v. Somerville, 410 US 458 (1973), noted that the Fifth Amendment's Double Jeopardy Clause does not prevent retrial where a mistrial was required by "manifest necessity," which includes the need to correct a jurisdictionally defective indictment. The Court concluded that if a retrial is permissible in such circumstances, then the District Court's procedure was simply a way to minimize inefficiency. Given that the defense was on notice of the need for a superceder early on in the trial and did not have to change its strategy after the superceder was obtained, the Court endorsed the District Court's "somewhat unprecedented procedure."

The Court ruled for Milstein, however, on the constructive amendment issue. The government defended the trial court's instruction on the ground that the generally framed indictment covered the more specific theory that the drugs had been misbranded because they were labeled "sterile" when they were not. The Court rejected that argument. The Court held that by alleging that Milstein was charged with misbranding because he "re-packaged the drugs as if they were the original product from the licensed manufacturers" the government did not place Milstein on notice that it would also attempt to prove that the drugs were mislabled "sterile." The Court noted that the government's decision to present the contamination evidence to the Grand Jury when it sought the superceder sure made it look like the government had recognized this problem. But the government had failed to amend the count to include the contamination allegation. Accordingly, the Court vacated that count of the conviction, because "Constructive amendment is a per se violation of the Fifth Amendment," which requires that a defendant be convicted of conduct that was actually the subject of the Grand Jury's indictment. The Court did not accept the defense argument that the constructive amendment problem also required vacatur of the conspiracy count, because that count could be proved by overt acts which were not specified in the indictment, so long as there was no prejudice to the defendant, and the Court found no prejudice on the facts before it.

In addition, the Court rejected a defense argument that the Prescription Drug Marketing Act of 1987 violated the Commerce Clause and the 10th Amendment by requiring states to create a licensing scheme for wholesale distributors of prescription drugs, at least if they wanted wholesalers to be able to distribute drugs to another state. The Court basically found that the statute was merely "encouraging" rather than "coercive" (which is a 10th Amendment no-no) because a state could still choose not to create a licensing framework.

Finally, the Court noted that, even without the vacatur on one count, a Booker remand was required for re-sentencing, but went on to provide guidance to the District Court on two defense arguments relating to the District Court's "vulnerable victim" and loss calculation findings. In both instances, the Court upheld the District Court's approach, finding that victims with fertility problems or Parkinson's disease were "vulnerable" and that no credit from the loss amount should have been given for the value of the drugs sold, given that the medicine was contaminated. Indeed, a subsequent application note was later added to Sentencing Guideline 2B1.1 to make clear that there should be no credit for goods sold without regulatory approval.

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When studying and contemplating the art of visualization most people have the impression that they must create visual images and make them real or life-like. Many people, in fact the majority, find this almost impossible to do. Even if they can formulate a solid picture of their objective they find it extremely difficult to sustain the image for any length of time. Either the image fades, changes or other intruding thoughts intervene.

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If all you had to do was just imagine stuff and your world automatically changed to reflect your imaginings this world would be full of chaos (not to mention all those creepy crawly bug-eyed monsters!). Therefore, there are a few more steps to complete before the visualization is passed to the subconscious for manifestation.

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Now we are going to create an imagined event in our lives that has the same strength and potency as that image. So relax and let's go.

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Ok open your eyes. What was the difference between the two images? Can you spot any? Did you use more, less or roughly the same senses in your fantasy event as you did in the future one? Did you see them from different angles? Was the picture bigger in one than the other? Was the sound clearer, the feelings more acute or the smell stronger? Take some time and go back to each scene in your mind. How does the future event differ from the fantasy one? Are you looking at both from a different vantage point? Do you see yourself in the image of one but not the other? Analyse the scenes and see where they differ.

Have you identified how the future event differs from the fantasy one? If you have then its time to make visualization work for you! Take a goal that you have been working on or would like to achieve. Nothing too far-fetched at this point please! Pick something that is possible but at the moment seems a little impractical. Once you have it form a mental image of what it would be like to have, be or do that thing or be in that experience. Remember to form it the same way you do a memory. Give it the same strength visually, in sound, feeling, taste and touch - use your mind in its natural state. All you have to do is imagine the scene.

Ok how does it differ from the scene of waking in the morning? Can you identify the differences in perspective, sound, taste, touch, feelings and what you hear?

Now there will be one other key thing that differs in the images- it is very simple but often overlooked. You know that the future event is going to happen! This is reflected in the way we experience the image. So what we are going to do is fool your subconscious mind into thinking your goal is definitely going to happen by manipulating your goal image!

Once you know what the differences are in each image begin to change the goal image so that it is seen the same way as the future event in your imagination. Place the visualized scene in exactly the same position with the same perspective as your future event.

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One more thing to remember: During the day think about your goal often. This reinforces the visualization and will begin to dispel doubt from your mind. hypnosis

August 19, 2006 at 8:23 PM  
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The courts certainly know how to play around with the law, vis a vis novel imaginative juggling of the laws to suit their personal agendas,whatever happened to blind justice?

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