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United States v. Loveland

United States Court of Appeals, Ninth Circuit

June 3, 2016

United States of America, Plaintiff-Appellee,
v.
Jim Allen Loveland, Defendant-Appellant.

          Argued and Submitted July 9, 2014

          Submission Withdrawn March 16, 2015

          Resubmitted May 26, 2016 Seattle, Washington

         Appeal from the United States District Court No. 1:12-cr-00155-BLW-14 for the District of Idaho B. Lynn Winmill, Chief District Judge, Presiding

          James K. Ball, Jr., (argued), Manweiler, Manweiler, Breen & Ball PLLC, Boise, Idaho, for Defendant-Appellant.

          Lynne W. Lamprecht (argued) and Syrena Case Hargrove, Assistant United States Attorneys; Wendy J. Olson, United States Attorney, Boise, Idaho, for Plaintiff-Appellee.

          Before: Alex Kozinski [*] , Andrew J. Kleinfeld, and Mary H. Murguia, Circuit Judges

         SUMMARY [**]

         Criminal Law

         The panel reversed the district court's judgment and vacated a defendant's conviction and sentence for conspiracy to possess methamphetamine with intent to distribute.

         The panel held that despite the substantial evidence of the defendant's possession for purposes of sale, there was insufficient evidence for a jury to conclude that he tacitly or explicitly made the requisite agreement for a conspiracy.

          OPINION

          KLEINFELD, Senior Circuit Judge:

         The government had a good case against Jim Loveland for the felony of possession of methamphetamine with intent to distribute. The evidence was persuasive that he committed that crime. His apparent guilt was conceded for purposes of discussion at oral argument. The barrier to convicting him of that felony was that he was not charged with it. He was charged instead with conspiracy to do that. Twelve other defendants were charged with him and convicted. But even though four of the others were charged with possession with intent to distribute, Loveland was not.

         Conspiracy means an agreement to commit a crime, not commission of the crime.[1] Though that might sound less serious to a layman, lawyers know that the conspiracy charge affects much about trial and sentencing, all to the advantage of the prosecution. A conspiracy charge imposes one substantial disadvantage to the prosecution: the prosecution must prove the existence of the agreement beyond a reasonable doubt.[2] The agreement can be explicit or tacit, and can be proved by direct or circumstantial evidence, including inferences from circumstantial evidence, [3] but it still has to be proved. Without an agreement, there is no conspiracy.[4] Despite the substantial evidence of Loveland's possession for purposes of sale, there was insufficient evidence for a jury to conclude that he tacitly or explicitly made the requisite agreement. Despite his apparent criminality, we are compelled under circuit precedent to vacate his conviction.

         Facts.

         The government charged twelve defendants with conspiracy to possess with intent to distribute methamphetamine. Nine pleaded guilty and cooperated with the prosecution. Loveland, Jesus Sanchez, and Michael Morris proceeded to trial and were convicted. We have affirmed Sanchez and Morris's sentences in separate dispositions.[5] The indictment includes three counts charging some of the others with possession with intent to distribute, but not Loveland. For Loveland, the government took it upon itself, by its charging decision, to prove conspiracy or nothing.

         The evidence showed that during the relevant period the lead defendant, Jesus Guadalupe Sanchez, [6] imported about two pounds of methamphetamine per month to Idaho from Mexico, Arizona, or California, which he bought for $10, 000 a pound. He and his coconspirators resold the methamphetamine to a number of buyers, typically in one- or two-ounce lots, for about $1, 200 per ounce. As might be expected in a felonious trade, many of the buyers were regulars, not strangers. Some of the regulars got caught, and one made a recorded purchase for law enforcement in order to get a better deal on sentencing. Several of the others pleaded guilty and testified in exchange for benefits.

         At Loveland's jury trial, three of the coconspirators testified to repeated sales to Loveland of two ounces at a time, each time for $2, 400. And each time, Loveland paid cash on delivery. There was testimony that the quantities he bought were too much for a person to consume himself without getting sick, so the jury could reasonably infer that Loveland bought the methamphetamine partly or entirely for resale.

         Two of the coconspirators had different arrangements with Sanchez. Ben Vertner paid more, -$1, 300 per ounce instead of $1, 200-and had an explicit agreement with Sanchez to resell the drugs he bought. Mario Martinez sometimes was "fronted" the methamphetamine, which means he did not have to pay cash on delivery, and would instead pay for his inventory after he resold it. For Loveland, though, it was cash on the barrelhead every time-no discounts, no credit, and no agreement about what he would do with the drugs. Loveland would call when he wanted a delivery, and the conspirators would deliver the usual two one-ounce bags to his house and collect the usual $2, 400. The testimony put the number of deliveries to Loveland somewhere between twelve and twenty. There was no testimony supporting or implying any involvement by anyone in the Sanchez group with whatever reselling Loveland might have been doing.

         Loveland moved unsuccessfully for judgment of acquittal at the close of the government's case, and at the close of evidence, based on insufficient evidence of conspiracy.[7] The jury returned a verdict of guilty of conspiring to possess with intent to distribute 50 grams or more of methamphetamine. The district court imposed a mandatory sentence of life imprisonment because Loveland had two prior convictions for felony drug offenses.[8]

         Analysis.

         We review de novo claims of insufficiency of the evidence.[9] "Evidence is sufficient if, when viewed in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt."[10]

         Conspiracy is an agreement to commit a crime, and the intent to commit the underlying offense.[11] We assume for purposes of decision that Loveland intended to commit the crime of possession of methamphetamine for purpose of distribution.[12] And we assume for purposes of decision that the Sanchez group knew Loveland was probably reselling the methamphetamine they sold to him, because the quantity exceeded what he could use himself.[13] But Loveland's intent to possess for purpose of distribution and the Sanchez group's sales to him do not add up to conspiracy.[14] The Sanchez group has to have agreed with Loveland, expressly or tacitly, that Loveland should resell the methamphetamine in order for them to have conspired together.[15]

         We have a long line of decisions directed at the problem of distinguishing between sale of an illegal substance and conspiracy of the seller with the buyer for the buyer to resell.[16] The parties agree that United States v. Ramirez and United States v. Lennick are the most challenging cases for the government, but disagree on whether Loveland's conviction can stand despite these precedents.

         Lennick held that the evidence was insufficient to support a conviction for conspiracy to distribute narcotics, where Lennick distributed marijuana, but there was no evidence that he had agreed with the people to whom he sold or gave the drugs that they should distribute it to others.[17] We held that even Lennick's knowledge of their distribution would not suffice without an intention and agreement that they would distribute to others.[18] "[C]onspiracy requires proof of 'an agreement to commit a crime other than the crime that consists of the sale itself.'"[19] The case before us is stronger for the government than Lennick on the facts because in Lennick, arguably, the quantities were too small to support an inference that Lennick knew his distributees would redistribute.[20] But we worded our holding broadly: "To show a conspiracy, the government must show not only that Lennick gave drugs to other people knowing that they would further distribute them, but also that he had an agreement with these individuals to so further distribute the drugs."[21] In so holding, we agreed with the First, Seventh, and Tenth Circuits.[22]

         We held in United States v. Mincoff that "fronting, " which means providing the inventory to the buyer on credit, to be paid after he resells it, could support proof of a conspiracy between the seller and the buyer for the buyer to resell to a third party.[23] Mincoff, the buyer, ordered very large quantities of cocaine, and Mincoff's seller knew that Mincoff was purchasing "on behalf of [Mincoff's] buyer."[24] The extension of credit to Mincoff in these circumstances helped to show a conspiracy between the seller and the buyer for the buyer to resell.[25] After all, it is hard to imagine how Mincoff could have paid his supplier without first selling the inventory bought on credit. We distinguished Lennick based on the large quantities of drugs transferred, the testimony that the seller was acquiring the cocaine for the buyer's subsequent buyers, and the extension of credit to the buyer until he completed the resale. These facts showed a "shared stake" in the buyer's reselling enterprise amounting to a conspiracy between the seller and the intermediate buyer for the buyer to resell.[26]

         Applying Lennick in United States v. Ramirez, we reiterated that

[t]o prove conspiracy, the government had to show more than that Ramirez sold drugs to someone else knowing that the buyer would later sell to others. It had to show that Ramirez had an agreement with a buyer pursuant to which the buyer would "further distribute the drugs."[27]

         We explained that when deciding if there is sufficient evidence of an agreement, we look for "evidence of a prolonged and actively pursued course of sales coupled with the seller's knowledge of and a shared stake in the buyer's illegal venture."[28] Unlike Lennick, which involved small amounts of marijuana, Ramirez involved repeated sales of "escalating" quantities of methamphetamine.[29] But we held that even repeated sales and large quantities could not sustain ...


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