No. 98-447
In the Supreme Court of the United States
OCTOBER TERM, 1998
VITEK SUPPLY CORPORATION AND
JANNES DOPPENBERG, PETITIONERS
v.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
SETH P. WAXMAN
Solicitor General
Counsel of Record
JAMES K. ROBINSON
Assistant Attorney General
DANIEL S. GOODMAN
Attorney
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
QUESTIONS PRESENTED
1. Whether the district court's instructions adequately advised the jury
of the elements of petitioners' offenses.
2. Whether the district court had discretion to reject petitioners' untimely
lesser-included-offense instruction.
3. Whether the district court's finding that petitioners' customer had been
defrauded, and had therefore suffered a loss cognizable under United States
Sentencing Guidelines § 2F1.1, was clearly erroneous.
In the Supreme Court of the United States
OCTOBER TERM, 1998
No. 98-447
VITEK SUPPLY CORPORATION AND
JANNES DOPPENBERG, PETITIONERS
v.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
OPINIONS BELOW
The opinion of the court of appeals (Pet. App. A) is reported at 144 F.3d
476.
JURISDICTION
The judgment of the court of appeals was entered on May 14, 1998. A petition
for rehearing was denied on June 16, 1998 (Pet. App. B). The petition for
a writ of certiorari was filed on September 14, 1998. The jurisdiction of
this Court is invoked under 28 U.S.C. 1254(1).
STATEMENT
Following a jury trial, petitioners were convicted on one count of conspiring
to defraud the United States by impeding the lawful functions of the United
States Food and Drug Administration and the United States Customs Service,
in violation of 18 U.S.C. 371; five counts of smuggling goods into the United
States, in violation of 18 U.S.C. 545; and six counts of introducing adulterated
and misbranded drugs into interstate commerce, in violation of 21 U.S.C.
331(a), 333(a)(2), and 352(a). Petitioner Doppenberg was sentenced to 44
months' imprisonment, to be followed by three years' supervised release,
and was fined $25,000. Pet. App. A17-A18; see also C.A. App. 2-4.1 Petitioner
Vitek Supply Corporation was placed on four years' probation and was fined
$350,000. Pet. App. A18; C.A. App. 8-9. Petitioners were held jointly liable
for restitution of $735,266.65. Pet. App. 18; see C.A. App. 6, 11. The court
of appeals affirmed. Pet. App. A1-A26.
1. Section 331(a) prohibits "[t]he introduction or delivery for introduction
into interstate commerce of any food, drug, device, or cosmetic that is
adulterated or misbranded." 21 U.S.C. 331(a). Under Section 333(a)(2),
a person who violates Section 331 "with the intent to defraud or mislead"
is subject to criminal penalties. 21 U.S.C. 333(a)(2).
Petitioner Vitek Supply Corporation, of which petitioner Doppenberg was
the general manager, manufactured feed mixtures for veal calves using certain
substances that were unapproved by the Food and Drug Administration. Pet.
App. A1; Gov't C.A. Br. 6. Several of those substances are carcinogenic
or otherwise harmful to human health. Pet. App. A1. With the assistance
of Vitek's Dutch parent corporation, petitioners smuggled the substances
into the United States, often through fraudulent means. Id. at A2. The evidence
of fraud included the use of code names and numbers in inventory records,
mixing formulas, invoices, and other records; misrepresenting to U.S. Customs
the contents of goods imported into the United States; concealing goods
on pallets underneath other goods; double-bagging products to conceal the
labeling; and identifying on product labels all contents except the illegal
drugs. Gov't C.A. Br. 43-44.
2. At trial, the district court charged the jury that, with respect to the
scienter component of Section 333(a)(2),
[t]o act with intent to defraud means to act voluntarily and intentionally
to deceive or cheat. The intent to defraud may be established by proof that,
with respect to the specific count in question, the defendant intended to
deceive or cheat another person, a business entity, or a government agency.
To act with intent to defraud a government agency means to act with the
intent to interfere with or obstruct a lawful government function by deceit
or trickery, or at least by means that are dishonest. . . .
To act with the intent to mislead means to act voluntarily and intentionally
to conceal a material fact and thereby create a false impression, or to
omit or withhold information from a statement and thereby cause a portion
of the statement to be misleading. An intent to mislead may be established
by proof that the defendant intended to mislead a person, an entity with
whom he was doing business, or a government agency.
Pet. App. A15-A16. The court rejected other instructions submitted by petitioners,
which would have described the scienter element in more detail-by specifying,
for example, that the government had to prove that petitioners "knew
that the substances in question were new animal drugs" and that petitioners
had "actual knowledge that the drug[s] at issue w[ere] unapproved and
not properly labeled or safe." Gov't C.A. Br. 45-46; see generally
C.A. App. 126-134.
At the very close of the charging conference, petitioner Doppenberg's attorney
orally announced, without elaboration, that "on behalf of Mr. Doppenberg
we want lesser included offenses to be submitted to the jury." Tr.
3835. The district court rejected the request on the ground that "[i]f
you wanted that you should have brought it up before." Ibid. Petitioners
subsequently put into writing their proposal for a lesser-included-offense
instruction on the Section 333(a)(2) counts, but only after the government
had begun its closing argument. See Gov't C.A. Br. 41-42; Pet. App. A15
n.2; see also C.A. App. 121-123. The district court again rejected the proposed
instruction, this time on two independent grounds: first, that the request
was untimely and, second, that it was insufficiently detailed to enable
the court "to determine whether or not [the purported lesser included
offenses] are in fact lesser included offenses." C.A. App. 125; see
also Pet. App. A15 n.2.
Petitioners were found guilty on all twelve counts of the indictment. C.A.
App. 1, 7. In calculating the offense level for the six adulterated and
misbranded drug counts, the district court applied the specific offense
characteristic in Section 2F1.1(b)(1) of the United States Sentencing Guidelines
for losses greater than $2,000. Pet. App. A17-A18. The district court arrived
at a loss figure that fell between the figures suggested by the government
and petitioners. The figure adopted by the court was based on the sum of
the government's own loss of $29,254 in import duties plus a $705,814 loss
incurred by a meat processing company (Swissland Packing Co.), which had
to destroy its calves after learning that they had been fed tainted products
supplied by petitioners. Id. at A18; see C.A. App. 38.2
3. The court of appeals affirmed. Pet. App. A1-A26. After addressing a variety
of issues that petitioners do not present here (see id. at A2-A15), the
court turned to petitioners' challenge to the district court's scienter
instructions. The court of appeals held that those instructions, "when
considered in their larger context, adequately advised the jury" of
the requirements of Sections 331(a) and 333(a)(2). Id. at A16; see id. at
A15-A17. The court separately held that petitioners' challenge to the district
court's refusal to present a lesser-included-offense instruction "does
not warrant discussion," because petitioners' request for that instruction
was "untimely," and "the district court had the discretion
to reject it." Id. at A15 n.2.
Finally, as to sentencing, the court of appeals rejected challenges brought
by both the government and petitioners to the district court's calculation
of the amount of loss under Guidelines § 2F1.1. Pet. App. A17-A26.
The court of appeals found, among other things, that the district court
had not erred in rejecting petitioners' claim that Swissland had known "the
true content" of petitioners' products and therefore (according to
petitioners) could not have suffered any cognizable "loss." Id.
at A20 n.3.
ARGUMENT
1. Petitioners first contend (Pet. 15-21) that the district court erred
in rejecting their proposed scienter instructions for the substantive offenses
charged under Section 333(a)(2), and that the court of appeals' refusal
to reverse their convictions in light of that purported error raises important
issues concerning the harmless error doctrine. That claim is without merit,
because there was in fact no "error" that could give rise to any
harmless error issue.
As the court of appeals determined, the instructions actually given, "when
considered in their larger context, adequately advised the jury" of
the nature of the required scienter finding. Pet. App. A16-A17.3 Petitioners
contend (Pet. 19) that the court of appeals erred in considering "the
evidence and arguments of counsel" in assessing the jury instructions.
This Court has made clear, however, that in determining whether there is
"a reasonable likelihood that the jury has applied the challenged instruction[s]"
erroneously, a court must consider the "commonsense understanding of
the instructions in the light of all that has taken place at the trial."
Boyde v. California, 494 U.S. 370, 380-382 (1990). The court of appeals
correctly applied that guidance here. The court found that "[i]n light
of the[] closing arguments and the evidence presented at trial," the
jury understood the elements of the charged offenses and on that basis found
petitioners guilty of committing those offenses. See Pet. App. A17. There
was thus no constitutional violation of which petitioners could complain.
As a result, unlike the harmless-error cases that petitioners cite (Pet.
18-19), this case does not present any issue concerning the appropriate
scope of harmless error review when the trial court's jury instructions
deprived the jury of its role in finding each element of a charged offense.
Although petitioners suggest (Pet. 20-21) that this case presents an opportunity
for the Court to revisit the issue left unresolved in Rogers v. United States,
118 S. Ct. 673 (1998), that case in fact illustrates precisely why petitioners'
claims here do not warrant review. In Rogers, this Court granted certiorari
to consider whether a district court's failure to instruct the jury on an
element of an offense could be harmless where the defendant had admitted
the element under oath. The Court dismissed the writ as improvidently granted,
however, after determining that the jury may in fact have construed the
instructions to require it to find the purportedly omitted element. Id.
at 676-677 (plurality opinion); id. at 677-678 (O'Connor, J., concurring
in the result). Here, the court of appeals' correct and factbound determination
that the jury knew (and found) the elements of petitioners' offenses renders
irrelevant, as in Rogers, any inquiry into the circumstances in which an
instructional error that removes an element from the jury's consideration
requires reversal of the defendant's conviction.4
2. Petitioners next argue (Pet. 21-24) that the court of appeals should
have considered on the merits their claim that they were entitled to a lesser-included-offense
instruction on the Section 333(a)(2) counts. The court denied that claim
on procedural grounds, reasoning that the district court had acted within
its discretion in rejecting that instruction because the defendants did
not request it in writing "until after the government began its closing
argument." Pet. App. A15 n.2. Petitioners nonetheless contend (Pet.
22) that petitioner Doppenberg's attorney adequately preserved their request
for that instruction by announcing, at the end of the charging conference,
that "we want lesser included offenses to be submitted to the jury."
Tr. 3835. That claim is without merit.
Rule 30 of the Federal Rules of Criminal Procedure provides that parties
shall file "written requests" for jury instructions by "the
close of evidence." Petitioners violated that requirement. Indeed,
the district court noted that the defense had engaged in a "pattern
of * * * dilatory tactics," that "there weren't any instructions
submitted in a timely fashion for the defendants," and that, although
the court did accept some belated proposals, it "ha[d] to draw the
line somewhere," for "otherwise the court would never be able
to proceed to instruct the jury." C.A. App. 124 (emphasis added). In
these circumstances, the district court acted well within its discretion
in refusing to consider the proposed lesser-included-offense instruction.
Neither United States v. Krapp, 815 F.2d 1183, 1187 (8th Cir.), cert. denied,
484 U.S. 860 (1987), nor United States v. Whitaker, 447 F.2d 314, 317 (D.C.
Cir. 1971), supports petitioner's erroneous contention (Pet. 24) that "an
oral request for lesser-included offense or other instructions is sufficient
to * * * preserve[] the request for appellate review," a proposition
that is at odds with Rule 30. In neither Krapp nor Whitaker did the court
of appeals clearly reverse a district court's decision to reject an instructional
request on procedural grounds; in each case, the district court appeared
to have considered and rejected the request on the merits, and the government
then apparently raised the procedural issue on appeal. See Krapp, 815 F.2d
at 1187; Whitaker, 447 F.2d at 317. Moreover, neither decision purports
to abrogate a district court's discretion to reject proposed jury instructions
that are filed in violation of Rule 30's procedural requirements. Indeed,
after observing that "Rule 30 evidences a preference for written requests
for instructions," the Krapp court reaffirmed that "[a] failure
to make a written request can under certain circumstances be sufficient
grounds for denial of the requests." 815 F.2d at 1187. One such circumstance
is where, as here, the defendant's oral request provides insufficient notice
of or support for the proposed instruction.5
3. Finally, petitioners challenge (Pet. 25-31) the district court's determination
that Swissland had been defrauded by petitioners' scheme and that it had
therefore suffered a "loss" for purposes of § 2F1.1 of the
United States Sentencing Guidelines. Petitioners argue that Swissland could
not have been defrauded because, in their view, Swissland must have known
about petitioners' illegal scheme. The court of appeals rejected that argument
in a footnote, holding that the district court's determination "that
Swissland had been defrauded" was not "clearly erroneous."
Pet. App. A20 n.3. That factbound determination warrants no further review.
Although petitioners contend (Pet. 28, 30) that the court of appeals' holding
on this point is "directly in conflict" with precedents (including
Seventh Circuit precedents) concerning the appropriate burden of proof in
attributing "losses" to defendants, that is plainly incorrect.
The court of appeals did not discuss any issue concerning burden of proof,
but simply reviewed the evidence of "loss" under a standard of
review appropriately deferential to the district court.6
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
SETH P. WAXMAN
Solicitor General
JAMES K. ROBINSON
Assistant Attorney General
DANIEL S. GOODMAN
Attorney
JANUARY 1999
1 "C.A. App." refers to the appendix materials filed in the court
of appeals, some of which were appended to petitioners' opening brief, and
some of which were filed in a "Separate Appendix of Defendants-Appellants."
2 In early December 1998, petitioners agreed to make immediate payment of
$400,000 "for the use and benefit of Swissland" as "payment
in full of the restitution ordered to be paid to Swissland" in the
district court judgment. Settlement Agreement and General Releases at 4;
see also Order of Dec. 8, 1998 (approving settlement agreement). The parties
entered into that settlement agreement largely because Swissland wished
to avoid "additional efforts to locate assets and supplemental litigation
to enforce collection." Settlement Agreement at 2. The United States
was a party to the agreement "only because the aforesaid restitution
is to be paid to the U.S. for the use and benefit of Swissland." Id.
at 3. Petitioners have not contended, and could not contend, that the settlement
agreement is in any respect relevant to the issues presented in this petition.
3 Petitioners are therefore simply mistaken in contending (Pet. 17) that
the court of appeals "acknowledged that the district court's instructions
failed to include * * * necessary elements of the offenses charged."
Although the court of appeals noted that the instructions "did not
explicitly state that the defendants had to know that they were distributing
new animal drugs or misbranded products," it found no error, because,
taking the instructions as a whole and in context, "the jury understood
that one of the issues was whether [petitioners] knew that they were distributing
'new animal drugs' and that their labeling omitted information about the
presence of unapproved substances." Pet. App. A17. In any event, as
the government stressed in the court of appeals, we believe that the district
court's instructions, even if viewed in isolation, adequately described
the scienter element of the offenses at issue. See Gov't C.A. Br. 45-48.
4 This Court recently granted certiorari in a case presenting a harmless-error
issue similar to the one that petitioners mistakenly contend is presented
here. See Neder v. United States, No. 97-1985 (to be argued Feb. 23, 1999).
Even if there had been error in this case, however, there would be no reason
to hold the petition here pending disposition of Neder. This case, unlike
Neder, would not require a harmless-error analysis based on the strength
of the evidence on an uncontested issue. If there had been error in this
case, harmless-error analysis would rest on, inter alia, the fact that the
jury's "guilty verdict on the [separate] charge of conspiracy against
the FDA and Customs is a 'clear indication' that the jury believed that
Vitek and Doppenberg were aware of the illegal nature of their activities."
Pet. App. A17; see, e.g., Carella v. California, 491 U.S. 263, 270-271 (1989)
(Scalia, J., concurring in the judgment).
5 The district court cited the untimeliness of petitioner's request as one
of two independent reasons for denying that request. The court also explained
that "the request does not contain a detailed statement" supporting
the proposed lesser-included-offense instruction-a statement necessary to
help the court determine whether such an instruction was in fact warranted
and, if so, how it should be framed. C.A. App. 125; cf. Gov't C.A. Br. 42-44.
That procedural default would impose an independent obstacle to appellate
relief even if petitioners could plausibly argue that the district court
abused its discretion in rejecting their request as untimely.
6 Petitioners contend (Pet. 29) that, in the court of appeals, the government
"conceded * * * that it had not affirmatively proven that [Swissland]
was defrauded by the defendants." That is inaccurate. The government
argued instead: "[Petitioners] acknowledge that there was no direct
evidence establishing actual participation or even guilty knowledge on Swissland's
part, but apparently feel that the government must produce affirmative evidence
to demonstrate the negative. * * * The government submits that it meets
its overall burden of proof by demonstrating loss to a third party caused
by [petitioners'] crimes, together with the absence of any evidence that
the third party knew of the crime and accepted its benefits." Gov't
C.A. Br. 55 (citation omitted). The court of appeals did not address the
parties' dispute on that issue.