United States v. James M. Laster (99-6244) and Jerry Lear (99-6247)

Citations: 258 F.3d 525; 56 Fed. R. Serv. 832; 2001 U.S. App. LEXIS 16780Docket: 99-6244, 99-6247

Court: Court of Appeals for the Sixth Circuit; July 26, 2001; Federal Appellate Court

Combined Opinion SummaryCombined Opinion Original

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Defendants Jerry Lear and James M. Laster appeal their convictions and sentences related to drug offenses, specifically regarding the district court's admission of records concerning the purchase and attempted purchase of hydriodic acid. The court also addresses the implications of the Supreme Court's decision in Apprendi v. New Jersey on their sentence calculations. 

In 1993, state drug task force detective James Acquisto received a tip from Universal Testing Incorporated (UTI) about Laster's unauthorized order of hydriodic acid, a methamphetamine precursor. Acquisto, along with Drug Enforcement Agent Gary Tennant, confronted Laster, who claimed he was misled by an unnamed individual seeking chemicals for methamphetamine production. Laster later admitted to making multiple trips with Lear to Illinois to acquire hydriodic acid for payment, which Lear corroborated in his own statement. 

In September 1993, a meeting took place involving government agents, Lear, Laster, and their lawyers, during which the defendants agreed to assist in a methamphetamine manufacturing investigation in Kentucky. Later, in August 1994, Lear was stopped by police for reckless driving, during which Laster was seen placing a container in the truck. Police discovered firearms and materials commonly associated with methamphetamine production, including 58.2 grams of pure D-methamphetamine found in glass jars, which contained substances indicative of hydriodic acid use. 

The court ultimately affirms the convictions and addresses other appellate issues in an unpublished opinion.

A bag found in the truck's cab contained 7.44 grams of methamphetamine, razors, a vial, a spoon, a lighter, pH strips, plastic bag corners, and rubber bands. A notebook on the dashboard included non-incriminating notes and entries indicating drug sales totaling $2,000 alongside references to gram quantities and dollar amounts. The district court denied motions to suppress these items. The defendants faced multiple charges, including conspiracy and aiding and abetting in methamphetamine manufacture and distribution, as well as firearm possession during drug trafficking. Lear was convicted on several counts and sentenced to 211 months, while Laster received 151 months for his convictions.

The defendants contested the admission of purchase records from Wilson Oil Company, arguing they were inadmissible hearsay. The district court, however, deemed them admissible under the business records exception to hearsay rules. The records included invoices for hydriodic acid and other chemicals sold on specific dates, with one order canceled. A witness qualified under the business records exception laid the foundation for the records' admission. The business records exception requires that the documents were created in regular business activity, kept in the normal course of business, produced as a standard practice, and made by someone with knowledge of the transactions.

Defendants contest the admissibility of records based on Acquisto's lack of qualification under the business records exception. Acquisto did not examine Wilson Oil Company’s financial records and lacked knowledge regarding the company's accounting processes, raising concerns about his familiarity with their record-keeping. The court cited United States v. Hathaway, which allows a government agent’s testimony to establish a foundation for admitting records under Fed. R. Evid. 803(6), provided the witness is familiar with the record-keeping system. However, Acquisto's limited interactions with Wilson did not demonstrate such familiarity, leading to the conclusion that the evidence was inadmissible under this rule.

Conversely, the district court appropriately admitted purchase orders and related documents under the residual hearsay exception of Fed. R. Evid. 807, as there was no evidence questioning their reliability. The court declined to adopt a narrow interpretation suggested by the defendants, stating that if evidence qualifies under one of the hearsay exceptions, it should be preferred over the residual exception. This aligns with the reasoning in United States v. Earles, indicating that if a statement is admissible under any hearsay rule, the specific exception should be applied.

Regarding the defendants' sentencing, the court reviewed the drug quantity calculations for clear error, applying the 1993 Sentencing Guidelines, which differentiate between D-methamphetamine and L-methamphetamine. Based on the records from Wilson Oil Company, the district court determined that defendants could have produced 616 grams of methamphetamine from purchased chemicals, in addition to 58.2 grams seized during a traffic stop, totaling 674.2 grams. Consequently, Laster was sentenced to 151 months and Lear to 211 months in prison, based on the intent to manufacture D-methamphetamine.

Defendants acknowledge the seizure of 58.2 grams of D-methamphetamine on August 21, 1994, but argue that the government failed to prove it was derived from hydriodic acid, relying solely on testimony from Acquisto and government witness Peter Poole regarding the production and market value of D- and L-methamphetamine. They assert that the evidence does not support that the methamphetamine attributed to them was more likely than not D-methamphetamine, referencing United States v. Dudden, where the court found it erroneous to base a sentence on D-methamphetamine without sufficient proof. Consequently, they request a remand for sentencing based on L-methamphetamine, advocating for a cautious approach in determining drug responsibility.

Defendants also claim violations of their Fifth and Sixth Amendment rights, arguing that the jury should have decided whether they intended to create D- or L-methamphetamine, as due process requires a jury to determine facts that increase penalties. Citing Apprendi v. New Jersey, they contend that the district court's finding, which raised their offense level from 18 to 34, necessitated jury involvement.

However, the court counters that Apprendi does not apply because the methamphetamine type attributed to defendants did not affect the statutory maximum sentence. Their sentences were not increased beyond the statutory maximum, rendering their Apprendi argument invalid. Accepting their position would require a broader interpretation of Apprendi, potentially mandating jury determinations for any significant factual findings affecting sentences.

L-methamphetamine lacks a market due to its low potency (one-tenth that of D-methamphetamine) and the difficulty in obtaining its primary ingredient. The court referenced *United States v. Owusu*, affirming that the classification of a drug (e.g., crack vs. cocaine base) is a matter for the sentencing court to decide. The district court's admission of Wilson Oil Company's records was upheld as compliant with Fed. R. Evid. 807, and its calculations of D-methamphetamine amounts were deemed correct, with no violation of Apprendi since sentences were below the statutory maximum. The convictions and sentences of the defendants were affirmed after considering related cases. 

Judge Karen Nelson Moore dissented, arguing against the admission of business records under the residual hearsay exception, asserting that the government failed to establish a proper foundation for these records under the business records exception (Fed. R. Evid. 803(6)), although the majority found them admissible under Rule 807. The criteria for Rule 807's application include the necessity of the statement for a material fact, its greater probative value compared to available evidence, and the alignment with the rules' objectives and justice interests.

Rule 807 of the Federal Rules of Evidence allows for the admission of out-of-court statements not specifically covered by Rules 803 or 804, contingent on their possessing "equivalent circumstantial guarantees of trustworthiness." Some courts have controversially applied Rule 807 to statements that would otherwise be inadmissible under the established hearsay exceptions, including grand jury testimony from unavailable witnesses, which has been deemed admissible in several circuits provided it meets the trustworthiness requirement. Conversely, a minority view holds that Rule 807 should be limited to truly exceptional cases where no established hearsay exception applies, emphasizing that the residual exception should not serve as a blanket allowance for hearsay statements. Legislative history indicates that the residual hearsay exception was intended for rare, exceptional circumstances, not as a broad license for judicial discretion in admitting hearsay evidence.

The excerpt critiques the interpretation of the residual hearsay exception in legal evidence rules, specifically contrasting the "near-miss theory" with the "close-enough" theory of admissibility. The "near-miss theory" suggests that evidence that narrowly fails to meet established exceptions is inadmissible, while the "close-enough" theory allows such evidence to be considered admissible under the residual exception, even if it does not satisfy explicit exceptions like those in Rules 803 and 804. The majority opinion, according to the excerpt, improperly embraces the "close-enough" reasoning without adequately addressing the structure or legislative history of the hearsay exceptions. It asserts that this approach undermines the explicit requirements of the business records exception, particularly the necessity of a sponsoring witness to validate the records. The majority's ruling effectively negates the need for such foundational testimony, which contradicts the established standards for the admissibility of business records under Rule 803(6). The excerpt concludes that the majority's interpretation disregards the safeguards intended by the rules, raising concerns about the reliability of hearsay evidence admitted without proper foundational support.

The majority's "close-enough" approach to the residual hearsay exception undermines established hearsay rules and exceptions, effectively allowing the residual exception to dominate. The court is advised against aligning with other circuits that have broadened the residual exception beyond its intended scope as outlined by the drafters of the Federal Rules of Evidence. In the current case, a specific hearsay exception was applicable, rendering the documents inadmissible. The intent of the drafters has been overlooked, risking the integrity of categorical rules in favor of a case-by-case basis. Rule 807 allows residual hearsay admission only if it is not covered by another exception, suggesting that hearsay closely aligned with an existing exception should not be admitted as residual. However, courts have often misinterpreted this term, equating "not specifically covered" with "not admissible." This discrepancy highlights a conflict between case law and the intended text of the rule.