Opposition — Sarian v. United States

Oifica- Supreme Court, U.S

FILED

No. 83-774 JAN 18 1983

On the Supreme Court of the mah a -

OcTOBER TERM, 1983

HRATCH K. SARIAN, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

Rex E. Lee

Solicitor General

STEPHEN S. TROTT

Assistant Attorney General

VINCENT L. GAMBALE

Attorney

Department of Justice

Washington, D.C. 20530

(202) 633-2217

s

QUESTIONS PRESENTED

1. Whether the court of appeals erred in holding that the

failure of the indictment in this case to allege expressly that

petitioner’s narcotics distribution activities were outside the

usual course of his pharmacy business did not amount toa

“manifest miscarriage of justice.”

2. Whether the district court’s instruction to the jury that

the drugs listed in the indictment were controlled substan-

ces “as a matter of law” amounted to plain error.

(I)

TABLE OF CONTENTS

SE SON cc cediccccccrcvescecssncessennns

PED wdcccdecvccccccccescoedsceesesecees

DREN bececcdccconevoveceernsdesestocesnne

PEE. Se bccecccceccccedctcccsocseenusectens

CD?! i wcoutebeceke hoe cbud wiaks ideneanes

TABLE OF AUTHORITIES

Cases:

Joplin Mercantile Co. v. United States,

BIO U.S. SEL wcccccvcccccvcccccsccccccece

McGuinn v. Crist, 657 F.2d 1107 ...........

United States v. Hart, 640 F.2d 856,

cert. denied, 451 U.S. 992 ..ccccccccccccecs

United States v. Jones, 580 F.2d 219 .........

United States v. King, 587 F.2d 956 ..........

United States v. Moore, 423 U.S. 122 ........

United States v. Outler, 659 F.2d 1306 .......

United States v. Piggie, 622 F.2d 486,

cert. denied, 449 U.S. 863 .........eeceees

United States v. Previte, 648 F.2d 73 .........

United States v. Roya, 574 F.2d 386,

cort. Gonied, 459 U.S. BST ..ccccccccccccccs

United States v. Seelig, 622 F.2d 207,

cert. denied, 449 U.S. 869 ......... ccc eeees

United States v. Wander, 601 F.2d 1251 ......

Wisniewski v. United States, 353 U.S. 901 ....

(IIT)

IV

Page

Statutes and rules:

SP MOLE) cocccerccccccssececccceeens 10

Bes SOD cv ccceccncccceccccccocenens 4,5

DREN £06 eves evensavesnisevepensave 4,5

Be Wn WOME) .ncccccvcccccsccesesen 1,4, 5

Be Wes UD occ cccccrevcccccccocescors 2

BE UBC. GAMES) .nccccccccccccsscccccccccs 2

PEM OEE Hevesesecccevrvevccessecesceees 2

SE PEED cc cccccccccccecevccccccoes 5

Fed. R. Crim. P.:

BE EREEEED coscccscccccccccoccccéncoses 6

EE ce eneRONN Re beeeeTeeseces eenseenes 8

Jn the Supreme Court of the Hnited States

OcTOBER TERM, 1983

No. 83-774

HRATCH K. SARIAN, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. Al-A5) is

not reported.

JURISDICTION

The judgment of the court of appeals was entered on

August 5, 1983. A petition for rehearing was denied on

September 7, 1983 (Pet. App. A7). The petition for a writ of

certiorari was filed on November 7, 1983 (a Monday). The

jurisdiction of this Court is invoked under 28 U.S.C.

1254(1).

STATEMENT

Following a jury trial in the United States District Court

for the Eastern District of Pennsylvania, petitioner and

co-defendants Paul F. Gaynor and Samuel I. Guttler were

convicted on five counts of unlawfully distributing con-

trolled substances, in violation of 21 U.S.C. 841(a)(1)

(1)

2

(counts two through six), and of conspiring to do so, in

violation of 21 U.S.C. 846 (count one). Petitioner also was

convicted on three counts of failing to maintain accurate

records relating to the purchase and dispensing of con-

trolled substances, in violation of 21 U.S.C. 842(a)(5) and

843(a)(4) (counts seven through nine). Petitioner was sen-

tenced to a total term of imprisonment of ten years, to be

followed by three years’ special parole and five years’ proba-

tion, and was fined $25,000 (Pet. App. A1l6-A17).' The

court of appeals affirmed (id. at Al-A5).

The evidence adduced at trial showed that in August 1979

petitioner, a registered pharmacist, purchased a pharmacy

in Philadelphia, Pennsylvania, and hired two other phar-

macists, co-defendants Gaynor and Guttler, to help him

operate the business. During September and October 1980,

acting pursuant to an administrative warrant, Drug Enforce-

ment Administration investigators audited the pharmacy’s

records for the approximately one-year period petitioner

had owned the pharmacy.? The audit revealed that during

that period the pharmacy had received a total of more than

300,000 tablets of Dilaudid, Preludin, Quaalude, Ritalin

and Talwin, 1, 956 gallons of Bromanyl, and 7,350 ounces

of Tussionex Suspension that were unaccounted for in

'Specifically, petitioner was sentenced to ten years’ imprisonment

and three years’ special parole on count two. He was sentenced to five

years’ imprisonment and three years’ special parole on counts three and

four, three years’ imprisonment and three years’ special parole on count

five, one year's imprisonment on count six, four years’ imprisonment on

counts seven and eight and one year’s imprisonment on count nine, all

of which sentences were to run concurrently with the sentence imposed

on count two. Petitioner was fined $25,000 on count one and sentenced

to five years’ probation to be served consecutively to the period of

imprisonment imposed on count two. Pet. App. Al6-Al7.

2During the course of the audit, the investigators also examined the

records of wholesale drug distributors that had sold drugs to petition-

er'’s pharmacy (11 C.A. App. 108-111). ;

3

prescription or inventory records.’ In addition, the audit

revealed that many of the prescriptions in the pharmacy’s

files did not contain the signature of the pharmacist who

filled them or the date on which they were filled, or other-

wise failed to conform to DEA regulations, and that many

prescriptions were for extraordinary quantities of drugs. II

C.A. App. 95-116.

During the course of the audit, petitioner admitted to the

investigators that he had paid all of the bills for all of the

drugs in the pharmacy and falsely stated that he had pro-

vided them with all of his purchase records. When con-

fronted with the results of the audit, petitioner first claimed

that he had no explanation for the shortages. II C.A. App.

161-162. Later that same day, petitioner told one of the

investigators that “he wanted to confess to what happened

to the drugs” and that “his life was threatened and some-

body was going to blow up his business” (id. at 163).

Four months later, on February 20, 1981, the investiga-

tors seized petitioner's pharmacy records pursuant to a

search warrant. Many of the prescriptions that had been

reviewed during the audit had been altered by inclusion of

the signatures of petitioner or his co-defendants, and some

had been altered by inclusion of refill designations. A spot

check of the purported patient addresses on 14 prescrip-

tions revealed that 12 addresses did not exist and that the

two legitimate addresses were not the residences of the

patients indicated on the prescriptions. II C.A. App. 106-

107, 166-168.

JThat accounting credited the pharmacy with all prescriptions in its

files, including many prescriptions that the investigators suspected were

invalid and that later proved to have been forged (11 C.A. App.

114-115).

4

The trial testimony of five physicians whose names

appeared on the seized prescriptions established that many

of the signatures had been forged (II C.A. App. 57-60,

132-138, 228-235, 248-251, 258-262). In addition, three

pharmacists who had interned at petitioner’s pharmacy

during the audit period testified that all three defendants

had filled suspicious looking or “phony” prescriptions and

had dispensed unusually large quantities of drugs without

prescriptions, often to the same customer (III C.A. App.

316-319, 360-386, 390-400, 590-600, 607-610). One intern

had observed a list hanging behind the pharmacy counter

that quoted higher prices for filling phony prescriptions (id.

at 596) and had noticed petitioner counting large sums of

money on days when phony prescriptions had been filled

(id. at 609-610). Finally, a witness who recently had been

convicted on federal drug charges testified that he had

purchased large quantities of Bromany] from petitioner and

his co-defendants, either by using illegitimate prescriptions

or without prescriptions (id. at 475-488, 506).

ARGUMENT

1. Section 841(a)(1) of Title 21 makes the distribution or

dispensing of drugs unlawful “{e}xcept as authorized by this

subchapter.” Section 822(b), in turn, provides that “[p]er-

sons registered * * * under this subchapter to * * * dis-

tribute, or dispense controlled substances are authorized to

possess, * * * distribute, or dispense such substances * * * to

the extent authorized by their registration and in confor-

mity with the other provisions of this subchapter.” Section

822(b) does not create a “blanket authorization” for regis-

tered practitioners to dispense controlled substances, but

merely exempts them from conviction under Section 841

unless “their activities fall outside the usual course of pro-

fessional practice.” United States v. Moore, 423 U.S. 122,

124, 131 (1975). Petitioner, a registered pharmacist, con-

tends (Pet. 8-13) that the exception provided in Section

5

822(b) is an element of the offense proscribed in Section 841

and that, therefore, his indictment was fatally deficient

because it failed to allege that he had acted outside the usual

course of his professional practice. Petitioner’s contention

is without merit.

By the plain terms of the statute, the presence of a legiti-

mate medical purpose for dispensing controlled substances

is a statutory exception to Section 841(a)(1), not an essen-

tial element of the offense that must be alleged in the

indictment. Moreover, 21 U.S.C. 885(a)(1) expressly

provides:

It shall not be necessary for the United States to

negative any exemption or exception set forth in this

subchapter in any complaint, information, indictment,

or other pleading or in any trial, hearing, or other

proceeding under this subchapter, and the burden of

going forward with the evidence with respect to any

such exemption or exception shall be upon the person

claiming its benefit.

Thus, even assuming the government bears the ultimate

burden of proof on the issue, it is not required expressly to

allege in the indictment that the drugs were distributed

outside the usual course of a registered practitioner’s prac-

tice. See United States v. Seelig, 622 F.2d 207, 211-212 (6th

Cir.), cert. denied, 449 U.S. 869 (1980). See also United

States v. Roya, 574 F.2d 386, 391 (7th Cir.), cert. denied,

439 U.S. 857 (1978). As petitioner notes (Pet. 10), two

courts have reached a contrary result. See United States v.

Outler, 659 F.2d 1306, 1308-1311 (Sth Cir. 1981); United

States v. King, 587 F.2d 956, 963-964 (9th Cir. 1978). In

neither of those cases, however, did the court address, or

even appear to be aware of, Section 885(a)(1).

6

In any event, this case does not present a suitable vehicle

in which to resolve the question whether the medical excep-

tion must be expressly negated in the indictment, because

the court of appeals did not answer that question. Because

petitioner failed to object to the indictment at trial, the

court of appeals limited its consideration of the sufficiency

of the indictment to the question whether the asserted defect

“amount[ed] to a manifest miscarriage of justice” (Pet.

App. A3). The holding of the court of appeals thus repre-

sents only a determination (ibid.) that, “assuming arguendo

that the indictment should have alleged that [petitioner]

distributed controlled substances outside the ordinary

course of his pharmacy business,” the failure of the indict-

ment to do so did not “redound[] to [petitioner’s] substan-

tial prejudice.™

That conclusion is entirely correct. As the court of

appeals held (Pet. App. A4-A5), and as petitioner does not

dispute (see Pet. 11 n.6), the indictment afforded petitioner

adequate notice of the charges against him. Moreover, the

court correctly concluded (Pet. App. A4-A5) that petition-

er’s Fifth Amendment right to an indictment by grand jury

was not violated by the failure to allege expressly that

petitioner’s narcotics activities were outside the ordinary

course of his pharmacy business:

One of the overt acts charged in the conspiracy count

against [petitioner] alleges that he conspired to sell

outside the ordinary course of his pharmacy business.

We think it reasonabie to infer from this allegation that

‘Although, as petitioner notes (Pet. 13), the failure of an indictment

to charge an offense may be raised at any time (see Fed. R. Crim. P.

12(b)(2)), “failure to object until after the verdict dictates that the

indictment be construed liberally and not held invalid absent a showing

of actual prejudice.” United States v. Previte, 648 F.2d 73, 80 (ist Cir.

1981); see also United States v. Hart, 640 F.2d 856, 857-858 (6th Cir.),

cert. denied, 451 U.S. 992 (1981).

7

the grand jury had before it evidence of [petitioner's]

excesses and indicted him for his activity outside

legally permissible limits as a pharmacist. At least, we

cannot say that the indictment is so lacking in this

assurance that we should consider the assumed defi-

ciency as a manifest miscarriage of justice.

eS 2 FF -a2. 3

Finally, we note that the substantiality of the

government's proof as to [petitioner’s] distribution

outside the course of his professional practice tends to

ameliorate any residual prejudice that [petitioner]

might have experienced due to the omission of the

alleged element.[5]

Petitioner’s reliance (Pet. 11-12) on Joplin Mercantile

Co. v. United States, 236 U.S. 531, 535-536 (1915), for the

proposition (Pet. 12) that “an overt act cannot be used

* * * to save an otherwise deficient substantive count” is

misplaced. In Joplin, the Court opined that allegations

made in the overt act clauses of a conspiracy indictment

could not supply an element missing from the “agreement”

clause of the indictment because “the making of the unlaw-

ful agreement relates to the acts of all the accused, while

overt acts may be done by one or more less than the entire

number” (236 U.S. at 536). That observation is inapposite

to the present case, however, because the overt act on which

the court below relied was specifically alleged to have been

committed by petitioner (1 C.A. App. 8a).*

‘We note that petitioner's defense at trial was that ine had nothing to

do with the charged activities, not that the charged activities were for

legitimate medical purposes (IV C.A. App. 724-782).

‘The Court's observation in Joplin in any event was dictum, in view of

ilarly, in United States v. Wander, 601 F.2d 1251, 1259(3d Cir. 1979),

2. Petitioner’s further contention (Pet. 13-18), that the

district court's instruction to the jury that the brand name

drugs listed in the indictment were controlled substances

“as a matter of law” amounted to a “ ‘partial directed ver-

dict,’ ” also is without merit.

We note at the outset that petitioner failed to object at

trial to the instruction he now challenges in this Court,

notwithstanding that the government proposed the instruc-

tion in writing and that the district judge held a conference

on the proposed instructions at which he approved the

instruction now challenged (IV C.A. App. 808-809, 941). By

failing to object to the instruction either at the time it was

proposed or when it was given, petitioner failed to comply

with the contemporaneous objection requirement contained

in Rule 30 of the Federal Rules of Criminal Procedure.

Accordingly, as petitioner concedes (Pet. 18), he would be

entitled to reversal of his conviction only if the instruction

constituted plain error or affected his substantial rights. See

Fed. R. Crim. P. 52(b). That clearly is not the case here.

Contrary to petitioner’s assertion (Pet. 14-15), there was

substantial evidence that the drugs petitioner was charged

with having distributed were controlled substances. The

DEA case agent testified that he and the other investigator

conducted an inventory of the controlled substances in

petitioner's pharmacy (II] C.A. App. 97-102). The invento-

ried substances were the same drugs listed in the indictment,

(compare II C.A. App. 188-189 and Gov't Exh. VII with I

C.A. App. 7a, 9a-13a). In addition, the agent expressly

on which petitioner also relies (Pet. 12), the court upheld the conspiracy

conviction notwithstanding the failure of the indictment to allege all of

the elements of the offense. In any event, any conflict between the

decision below and Wander is for the Third Circuit to resolve. See

Wisniewski v. United States, 353 U.S. 901 (1957). Cf. Pet. App. A4n.2.

9

testified that the drugs listed in the indictment were con-

trolled substances (II C.A. App. 115-116, 188-189). There

also was medical testimony to the effect that four of the

drugs listed in the indictment (Bromanyl, Tussionnex,

Dilaudid, and Percodan) contain narcotic elements and

that three of those drugs are controlled substances (II C.A.

App. 134, 232, 260; III C.A. App. 592).’ One of petitioner’s

suppliers further testified that four of the drugs included in

the indictment and regularly purchased by petitioner’s

pharmacy (Preludin, Percodan, Ritalin, and Quaalude) are

controlled substances (II C.A. App. 270-273).

Moreover, petitioner did not contest at trial—and does

not now dispute—that the drugs that he was charged with

unlawfully distributing were in fact controlled substances.

In these circumstances, it is beyond doubt that the district

court’s instruction to the jury that the drugs listed in the

indictment were controlled substances “as a matter of law”

could not have adversely affected petitioner's substantial

rights. See, e.g., United States v. Piggie, 622 F.2d 486, 488

(10th Cir.), cert. denied, 449 U.S. 863 (1980) (holding that

reversal of the defendant's conviction simply because the

trial court failed to instruct the jury that it was not required

to accept a judicially noticed element of the offense “would

be an exercise in the absurd” where there was evidence of

the judicially noticed element in the record and where the

element was not seriously in dispute);* see also McGuinn v.

7 According to the medical testimony, Ambeny! and Bromany] refer

to the same drug (II C.A. App. 154).

*Petitioner errs in stating (Pet. 17 n.10) that the reason the court of

appeals upheld the conviction in Piggie was that “the trial judge{] had

told the jur{y] to treat the judicially noticed fact like the other evidence,

and * * * they were free to accept or reject those facts.” To the contrary,

the court of appeals refused to set aside the conviction in Piggie not-

withstanding the fact that the jury may have considered itself “bound by

the court's taking judicial notice” (622 F.2d at 488). Indeed, although

the district court instructed the jury that it was the exclusive judge of the

10

Crist, 657 F.2d 1107, 1108-1109 (9th Cir. 1981) (“[wJhen a

jury is properly instructed with respect to the only disputed

issues in the case, the erroneous instruction with respect to

an undisputed issue is harmless error”).

Finally, contrary to petitioner's assertion (Pet. 16-18), the

refusal of the court of appeals (Pet. App. A2 n.1) to reverse

petitioner’s conviction on the basis of the challenged

instruction does not conflict with the Sixth Circuit’s deci-

sion in United States v. Jones, 580 F.2d 219 (1978). In that

case, the court of appeals reversed a conviction for illegally

intercepting telephone conversations where “the govern-

ment offered no evidence to show that South Central Bell

was at the time a ‘person engaged as a common carrier in

providing or operating. . . facilities for the transmission of

interstate or foreign communications,’ ” as required by 18

U.S.C. 2510(1). 580 F.2d at 221. By contrast, as we showed

above, there was ample evidence in the record of this case

that the drugs listed in the indictment were controlled sub-

stances and, indeed, petitioner never has contended other-

wise. In these circumstances, it cannot seriously be claimed

that petitioner's substantial rights were affected by the chal-

lenged instruction.

evidence, including “ ‘all facts which may have been admitted or stipu-

lated’ ” (622 F.2d at 489), it did not refer expressly to facts judicially

noticed. Accordingly, the court of appeals alluded to these additional

general instructions only in an appendix to its opinion (ibid.); they

plainly did not serve as the basis for its decision.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

Rex E. Lee

Solicitor General

STEPHEN S. TROTT

Assistant Attorney General

VINCENT L. GAMBALE

Attorney

JANUARY 1984

DO}-198401