Case o' The Week: Estoppel - well, estopped - Rodman and Entrapment by Estoppel

 

Hon. Judge Milan Smith

Licensed firearm agents should know better than giving bad advice that gets our clients arrested.

  Turns out, however, that “should know better” concept unfortunately cuts both ways.

 United States v. Rodman, Slip. Op. 13-10337, (9th Cir. Jan. 9, 2015), decision available here.

Players: Decision by Judge M. Smith, joined by Judges Wallace and Silverman.

Facts: Rodman and others were indicted with a conspiracy to unlawfully transfer machine guns by making false entries on ATF forms. Slip Op. at 4. To avoid restrictions on the transfer of these guns, Rodman and his codefendants built and sold guns that used serial numbers cut from pre-ban machine guns. Id. The ATF forms used to transfer were fraudulent. Id. at 6. Clark, who was licensed to sell these guns, told Rodman this was a legal method to transfer machineguns (Rodman claimed during trial). Id. At trial, Rodman asked for and was denied a jury instruction for entrapment by estoppel based on Clark’s alleged statements that this method of manufacturing machine guns was lawful. Id. at *7.

Issue(s): “Rodman argues that that the district court erred when it refused to give an entrapment by estoppel instruction based on his claim that Clark, a federal firearms licensee, told Rodman that the manner in which Clark manufactured and then transferred guns was legal.” Id. at *11.

Held: “Rodman is not some customer off the street inquiring about whether he can legally purchase a firearm. Rodman is himself a federal firearms licensee. . . . [W]e decline to extend the holdings of Tallmadge and Batterjee to apply when the firearm transaction is made between two federal firearms licensees. Therefore, the district court did not err by failing to give the requested entrapment by estoppel instruction as Clark was not acting as an authorized government official in this context.” Id. at 11.

Of Note: If you buy pot from a dealer, are the pair of you conspiring to distribute marijuana? No, thanks to the “buyer-seller relationship” theory, which requires the government in this situation to show “an agreement to commit a crime other than the crime that consists of the sale itself.” Id. at 12. Otherwise, every small drug sale would instantly turn into a narcotics conspiracy. Rodman tried that argument here, to no avail; he wasn’t charged with conspiring to sell guns, but conspiring to defraud the ATF. Id. at 12-13.

How to Use: Rodman’s estoppel didn’t work because he was a licensed firearms dealer – and the Court wasn’t sympathetic to the idea that he could rely on another dealer for erroneous advice about machine guns. Id. at 11. Would the outcome have been different, however, if Rodman had just been an ordinary customer? Maybe. Judge Milan Smith briefly discusses two cases where the Court has treated licensed firearm dealers as authorized government officials, in the context information about firearm purchases. Id. at 11 (discussing United States v. Tallmadge, 829 F.2d 767, 774 (9th Cir. 1987), and United States v. Batterjee, 361 F.3d 1210, 1217-19 (9th Cir. 2004). A defense to bear in mind, when a (usually prohibited) client relies on bad advice from a licensed firearms dealer, and ends up with gun he or she shouldn’t have.

                                               

For Further Reading: AFPD Kate Menendez argued the Johnson case before the Supreme Court in November of last year. The case deals with whether sawed-off shotguns are inherently “violent” for purposes of the ACCA. See generally SCOTUS blog here. 

  Last Friday, January 9th, the Court asked the parties to brief “"Whether the residual clause in the Armed Career Criminal Act of 1984, 18 U. S. C. §924(e)(2)(B)(ii), is unconstitutionally vague." See Order here. It will be put on the Court’s calendar for re-argument during the April 2015 session.

   Preserve the issue now – and take a close look at Prof. Rory Little’s prescient argument for this development in his blog, here.

Image of the Hon. Judge Milan Smith from https://www.law.hawaii.edu/sites/www.law.hawaii.edu/files/content/coliver/tn_Ninth%20Cir-%20Avi.JPG

Steven Kalar, Federal Public Defender ND Cal. Website at www.ndcalfpd.org

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Case o' The Week: Detrimental, reliance - Schafer and Equitable Estoppel

What will repeated assurances by two California law enforcement officers that your grow is legal, get you? Federal charges and five years in a federal prison. United States v. Schafer, 2010 WL 4400052 (9th Cir. Nov. 8, 2010), opinion available here.

Players: Hard-fought case argued by our ND Cal CJA comrade Barry Morris. Decision by Judge Tallman.

Facts: Marion Fry was a medical doctor diagnosed with breast cancer in ‘97. Id. at *1. She and her husband, attorney Dale Schafer, grew marijuana to help alleviate the side effects of her chemotherapy. Id. The pair informed the local sheriff, and a detective and sergeant visited their residence and inspected their marijuana plants. Id. In ‘99, the marijuana grow, grew - and the two cops continued to visit and tolerate it. Id.

In 2000 DEA started investigating, in ‘01 the feds searched the business and home, and by ‘05 the couple were charged federally with a count of conspiracy to grow and manufacture marijuana, and a count of manufacturing at least 100 plants. Id. at *2.

The defense theory was entrapment by estoppel, alleging that the detective and sheriff were affiliated with the feds, and had blessed the grow as legal. Id. That theory was asserted as a pretrial motion to dismiss, was intended to be a defense at trial, and was argued in mitigation at sentencing. Id. at *2-*3. The district court rejected the theory at each turn. The court also refused to hold an evidentiary hearing on whether the two state law enforcement officers were acting as feds and had “said Appellants’ conduct was legal.” Id. at *2.

Each defendant got five years after conviction. Id. at *3.

Issue(s): (Among others): “Appellants’ first challenge focuses on the district court’s denial of their request for an evidentiary hearing on the motion to dismiss. They argue that they were entitled to an evidentiary hearing because the filings submitted in support of and in opposition to the motion to dismiss presented significant factual disputes.” Id. at *3.

Held: “[T]he questions raised by Appellants’ motion to dismiss establish the viability of Appellants’ defense; the factual disputes were not segregable from the issue that was to be decided at trial – Appellants’ guilt. Pursuant to [Federal Rule of Criminal Procedure] 12, the district court could not resolve these disputes before trial, and therefore it did not abuse its discretion when it denied Appellants’ request for an evidentiary hearing.” Id. at *4.

Of Note: In rejecting the motion to dismiss, Judge Tallman explains that “the district court was precluded from holding that Appellants were entitled to an entrapment by estoppel defense as a matter of law until the jury resolved the truth of the factual dispute.” Id. at *5 (emphasis added). He then immediately concludes that the jury shouldn’t hear this issue, and that the district court properly excluded the entrapment by estoppel defense as a matter of law. Id. at *5. (Tricky business, that: tough for a jury to resolve a factual question it never hears . . . .)

Schafer’s discussion on the right to an evidentiary hearing is a troubling limitation on a district court’s ability to hear pretrial motions, and relies heavily on United States v. Shortt Accountancy Corp., 785 F.2d 1448, 1452-53 (9th Cir. 1986). Shortt – and now Schafer – perpetuate a tough reality when defending drug cases: to assert a defense of entrapment, a defendant has to run the huge risks of taking a case to trial and can’t rely on a pretrial motion to dismiss. Because of the federal system’s steep mandatory-minimum sentences, in most cases this principal effectively insulates agents from judicial review of entrapment by estoppel or sentencing entrapment.

How to Use: There’s little that’s good in Schafer, but there are lessons on things to avoid. One such pitfall is briefing that doesn’t present facts in sworn declarations. Schafer at *4 & n.3. Although Eastern District of California rules require it, the defense moving papers in Schafer did not have supporting declarations. Id. Judge Tallman warns, “The district court would have been well within its rights to reject the request for an evidentiary hearing on this ground alone.” Id. Because the appellate challenge was denied anyway, the panel “overlook[ed] the procedural defect in the case . . . .” Id. “Trial counsel, however, would be well advised to follow the rules.” Id.

For Further Reading: However you felt about the merits of the measure California’s Prop 19 would have sharpened the divide evident in Schafer, between the state’s tolerance of marijuana and the feds’ prosecution of the drug. For an interesting article dissecting the proposition’s defeat, and discussing plans to it to the 2012 ballot, see SF Chronicle article here.


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Steven Kalar, Senior Litigator N.D. Cal. FPD. Website at www.ndcalfpd.org


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