United States District Court, D. New Hampshire
ORDER
Landya
McCafferty United States District Judge.
The
government has charged defendant, Mustafa Arif, with wire
fraud in violation of 18 U.S.C. § 1343 (Count I) and
four counts of introducing misbranded drugs into interstate
commerce in violation of 21 U.S.C. §§ 331(a),
333(a)(2), and 352(a) (Counts II - V) ("misbranding of
drugs"). The charges arise from alleged
misrepresentations Arif made on his websites offering various
drugs for sale.
Arif
has filed two motions pursuant to Federal Rule of Criminal
Procedure 12(b)(1), requesting that the court determine that
two defenses he intends to offer at trial are viable.
See doc. nos. 113 & 114. The government objects
to both motions.
Background
The
parties have agreed to 19 separate, detailed factual
stipulations. See doc. no. 94. As the court
summarized these facts in its September 16, 2016 order,
see doc. no. 108, the court will refer to them in
this order only where relevant.
To
prove that Arif committed wire fraud, the government must
prove that he participated in a scheme to defraud with the
intent to defraud. To prove that Arif introduced misbranded
drugs into interstate commerce, the government must prove
that he acted with the intent to defraud or
mislead.[1]
In his
trial briefs, Arif stated that he intended to offer at trial
a defense that he had a good faith belief in the efficacy of
the drugs sold on his websites and, therefore, could not have
had an intent to defraud for purposes of any of the charges
("good faith defense").[2] Arif proposed a hybrid
approach to his defense: counsel would represent Arif on the
entirety of his case with the exception of his good faith
defense, and, on that defense, Arif would represent himself.
After a
hearing on Arif's request for hybrid counsel, Arif
requested that the court decide the issue of the viability of
his good faith defense as a matter of law prior to trial. In
an order dated September 16, 2016, the court held that
Arif's proposed good faith defense is not a viable
defense to the "intent to defraud" element of the
pending wire fraud and misbranding of drugs charges.
See doc. no. 108.
At a
hearing on that same date, the parties disclosed that the
ruling had generated discussions about a conditional plea
agreement. Arif informed the court that he intended to plead
guilty to the wire fraud charge if he could retain his right
to appeal two legal issues.[3] The two legal issues, briefly
summarized, are: (1) whether Arif's proposed good faith
defense is a viable defense to the "intent to
defraud" element of the pending wire fraud and
misbranding of drugs charges (the issue addressed in the
court's September 16 order); and (2) whether the
government would be precluded from prosecuting the wire fraud
charge in the event the government failed at trial to prove
certain alleged facts with respect to the misbranding of
drugs charges (i.e., that the representations about the drugs
constitute labeling as opposed to advertising) (the
"jurisdictional defense").
There
were two impediments to Arif's ability to enter into a
plea and reserve his right to challenge the court's
rulings on the two issues. First, the court had not issued an
order or expressed any view, adverse to Arif or otherwise, on
his jurisdictional defense. Second, although the court
decided the first legal issue adversely to Arif, see
doc. no. 108, that issue did not come before the court by way
of "a specified pretrial motion" as required in
Rule 11(a)(2). See doc. no. 108 (explaining the
case's unique procedural history).
To
resolve these procedural snags, the parties proposed that
they place both issues before the court in a manner that
would allow the court to rule, as required by Rule 11(a) (2),
on "a specified pretrial motion." The court agreed
to continue the trial for a short time (until October 11,
2016), to enable the parties to file their motions and
objections, and allow the court to rule on the motions prior
to the start of trial.
Arif
has now filed two specified pretrial motions, pursuant to
Federal Rule of Criminal Procedure 12(b)(1). The first is a
"motion for pre-trial ruling regarding
jurisdiction" (doc. no. 113). The second is
"defendant's pro se motion for pretrial ruling -
intent" (doc. no. 114). The government objects to both
motions.
Discussion
Rule
12(b)(1) provides: "A party may raise by pretrial motion
any defense, objection, or request that the court can
determine without a trial on the merits." The parties
agree that the court can determine the viability of
Arif's jurisdictional defense and his good faith defense
without a trial on the merits.
I.
Jurisdictional Defense
Counts
II through V of the superseding indictment charge Arif with
misbranding of drugs with the intent to defraud or mislead in
violation of 21 U.S.C. §§ 331(a) and 333(a) (2)
.[4]
The superseding indictment alleges that the drugs were
misbranded under 21 U.S.C. § 352(a) because their
labeling, in this case, Arif's statements about the drugs
on his websites, was false or misleading. Thus, if the
government fails to prove at trial that Arif's statements
about the drugs on his websites constitute labeling (as
opposed to advertising), then Arif would be entitled to a
verdict of not guilty on Counts II through V.
Arif's
motion (doc. no. 113) asks the court to assume, for purposes
of the motion, that the government would fail at trial to
prove that Arif's statements about the drugs on his
websites constitute labeling, and instead that they
constitute merely advertising. Arif contends that, in such
circumstances, the government would be precluded from
prosecuting the wire fraud charge (Count I) on the basis of
false advertising because the Federal Trade Commission
("FTC") has exclusive jurisdiction over false
advertising of drugs. Arif asserts two arguments to support
his theory of preclusion: 1) the Department of Justice cannot
criminally charge a defendant with wire fraud based on false
advertising because such a charge is preempted by the Federal
Trade Commission Act ("FTCA"); and 2) even if the
Department of Justice could criminally charge a defendant
based on false advertising, it cannot do so unless the FTC
certifies the facts necessary for such a charge, which the
FTC has not done in this case. See doc. no. 113 at
7. The court addresses each of these arguments in
turn.[5]
A.
Preemption
Arif
first asserts that a charge of wire fraud based on false
advertising of drugs is preempted or implicitly repealed by
the FTCA. See doc. no. 113 at 7 ("To allow the
Government to charge wire fraud . . . where the allegations
of fraud fall squarely within the regulatory jurisdiction of
the FTCA, guts the intent of 15 U.S.C. §§ 52-57 and
renders it meaningless."). In so arguing, Arif
"march[es] into the teeth of a strong judicial policy
disfavoring the implied repeal of statutes." United
States v. Brien, 617 F.2d 299, 310 (1st Cir. 1980);
Posadas v. Nat'l City Bank of N.Y., 296 U.S.
497, 503 (1936) ("The cardinal rule is that repeals by
implication are not favored."). "For a court to
find implied repeal, there must be a positive repugnancy
between the two statutes." Brien, 617 F.2d at
310 (citing United States v. Borden Co., 308 U.S.
188, 198 (1939)). "When two statutes are capable of
...