United States v. Judy Haisten ( 2019 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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Nos. 18-2094 & 18-2095
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UNITED STATES OF AMERICA
v.
JUDY HAISTEN and DAVID HAISTEN,
Appellants
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Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 2-16-cr-00461-001 and 2-16-cr-00461-002)
District Judge: Hon. Gerald J. Pappert
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Submitted Under Third Circuit L.A.R. 34.1(a)
October 1, 2019
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Before: SHWARTZ, FUENTES, and FISHER, Circuit Judges.
(Filed: October 24, 2019)
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OPINION
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SHWARTZ, Circuit Judge.

This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7,
does not constitute binding precedent.
Defendants Judy Haisten and David Haisten appeal their convictions stemming
from their sale of counterfeit DVDs as well as flea and tick kits containing pesticides that
they were not authorized to sell. The Haistens challenge an evidentiary ruling and a
statement the Government made during its summation. Because the District Court did
not abuse its discretion by stating that it would sustain a hearsay objection and the
Government did not give an improper closing argument, we will affirm.
I
The Haistens are a married couple who, starting in 2009, ran the Luv My Pets
Supply Store LLC from their home in South Carolina and sold flea and tick kits on eBay.
The Haistens created homemade kits by disassembling kits they purchased from foreign
and domestic distributors and, using vials and syringes, created packets that included
smaller amounts of the flea and tick medication. The medication contained a regulated
pesticide, but the Haistens did not have permission from either the Environmental
Protection Agency (“EPA”) or the Food and Drug Administration to sell it.
As a result, the Haistens received cease-and-desist letters from manufacturers and
the South Carolina Pharmacy Board demanding that they stop selling the homemade kits.
At trial, Mr. Haisten testified that he and his wife “sought legal advice and . . . went to a
lawyer.” Supp. App. 655. Before Mr. Haisten testified about the content of the legal
advice, the Government objected on hearsay grounds. See Fed. R. Evid. 801(c) (defining
hearsay). The District Court stated that, although Mr. Haisten “hasn’t gotten into” the
substance of the legal advice he received from his lawyer, the Court would “sustain the
objection if we get there based on the content of what he says.” Supp. App. 655.
2
Nonetheless, Mr. Haisten eventually testified that, after he received a letter from the
South Carolina Pharmacy Board, he “ran straight to a lawyer” who gave him advice
“about what he thought [Mr. Haisten] should do.” Supp. App. 657-58. Mr. Haisten
added that the lawyer informed him “that the EPA could make as much trouble for us as
they wanted to, and it would be [a] good idea to sell [the flea and tick kits] as a whole
box, even though that considerably hurt . . . sales.” Supp. App. 658. The Government
did not object to or seek to strike this testimony.
In addition to selling flea and tick kits on eBay, the Haistens sold counterfeit
DVDs. At some point, eBay prohibited the Haistens from selling their items, and, as a
result, the Haistens asked others to let them use their names and identifying information
to open new “stealth” eBay accounts. Supp. App. 664. Mr. Haisten claimed that he
received permission “[i]n every case” where he set up eBay accounts in other people’s
names. Supp. App. 665. For instance, he testified that a family friend, G.W., gave the
Haistens permission to use his personal information to establish an eBay account. The
Haistens, however, continued to use the eBay account in G.W.’s name to sell counterfeit
DVDs even after he passed away.
The Haistens also “opened a business” in the name of M.M., who worked at their
temporary employment agency “for one day in 2001” and was paid $ 40.25. Supp. App.
882-83. M.M. was neither the Haistens’ friend nor a family member. In response to Mr.
Haisten’s testimony that he had permission to use the identities of others to establish
eBay accounts, the Government asked Mr. Haisten:
3
You’re telling us that you asked [M.M.], a woman who worked for you in
2001 for one day for her permission and she said, “Sure. Go ahead and sell
pesticide kits in my name and open a company in my name. That’s cool?”
Supp. App. 886. Mr. Haisten responded that he “wasn’t involved in the connection with
[M.M.].” Id.
During its summation, the Government stated that the jury had before it “the
pesticide[] . . . [and] [M.M.’s] name used fraudulently.” Supp. App. 785. The
Government added that Mr. Haisten “didn’t know [M.M.]” because “[s]he worked for
them for one day 15 years ago.” Supp. App. 785. Mr. Haisten objected, arguing that the
Government “ha[d] to put [M.M.] on the witness stand” to assert that the Haistens used
her name without permission. Supp. App. 787. The District Court overruled the
objection and reasoned that the Government’s argument accorded with Mr. Haisten’s
testimony.
The jury found the Haistens guilty of conspiracy, 18 U.S.C. § 371; violations of
the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), 7 U.S.C.
§ 136j(a)(1)(A), (a)(1)(E); introduction of misbranded drugs into interstate commerce in
violation of the Federal Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. §§ 331(a)
and 333(a)(2); and trafficking of counterfeit goods, 18 U.S.C. § 2320(a). The Haistens
appeal.
II1
1
The District Court had jurisdiction under 18 U.S.C. § 3231. We have jurisdiction
under 28 U.S.C. § 1291.
4
The Haistens contend that (1) the District Court improperly excluded the advice of
counsel they received about selling pet medication and (2) the Government committed
prosecutorial misconduct by mentioning facts not in evidence during its summation.
Neither argument has merit.
A2
The advice-of-counsel defense provides that, if a defendant gives a “full and
honest disclosure of the material facts surrounding a possible course of action, [and]
seek[s] and obtain[s] the advice of counsel on the potential legality of [his] actions,” then,
in relying on counsel’s advice, he “lack[s] the requisite intent to violate the law.”3 United
States v. Traitz, 871 F.2d 368, 382 (3d Cir. 1989) (internal quotation marks omitted).
The Haistens assert that, because the District Court excluded testimony of their
discussions with a lawyer about the sales of their homemade flea and tick kits, it
precluded them from using this defense.
2
We review the District Court’s decision to exclude evidence for abuse of
discretion. United States v. Starnes, 583 F.3d 196, 213-14 (3d Cir. 2009). “We will not
disturb a trial court’s exercise of discretion unless no reasonable person would adopt the
district court’s view.” Id. at 214 (alteration omitted) (quoting Ansell v. Green Acres
Contracting Co., 347 F.3d 515, 519 (3d Cir. 2003)).
3
The advice-of-counsel defense only applies to “willful violation[s] of the law.”
United States v. Ragsdale, 426 F.3d 765, 778 (5th Cir. 2005). Crimes involving “willful”
violations “require[] more than a general intent to accomplish an act; [they] require[]
proof that the act was done with the specific intent to do something that the law forbids.”
United States v. Stadtmauer, 620 F.3d 238, 258 (3d Cir. 2010). Because we conclude
that the District Court did not abuse its discretion by stating that it would sustain the
hearsay objection, we need not decide whether the advice-of-counsel defense applies to
the FIFRA and FDCA counts to which the advice pertained.
5
The District Court did not abuse its discretion when it stated that it would sustain
the Government’s hearsay objection concerning Mr. Haisten’s testimony about his
lawyer’s statements. “Hearsay is a statement, other than one made by the declarant while
testifying at trial, offered in evidence to prove the truth of the matter asserted.” United
States v. Sallins, 993 F.2d 344, 346 (3d Cir. 1993) (citing Fed. R. Evid. 801(c)). Based
on the context, the Court appropriately surmised that the Haistens’ communications with
their lawyer might be offered to show that the eBay sales were legal and thus would be
hearsay. At no point during trial did Mr. Haisten contend that the legal advice was meant
to show that he and his wife lacked the necessary intent to commit the crimes of
distributing pesticides without authorization and introducing misbranded drugs into
interstate commerce. See United States v. Edwards, 792 F.3d 355, 357 n.2 (3d Cir. 2015)
(observing that statements offered to show an “effect on the listener” are not hearsay
because they are “not offered for their truth”). Indeed, the Haistens did not present their
lawyer as a witness, argue that they relied on the advice of counsel when selling their
homemade kits, or even request an advice-of-counsel jury instruction. Accordingly, even
assuming an advice-of-counsel defense was available to the Haistens, we cannot say that
the Court abused its discretion by excluding the discussions with their lawyer as hearsay.4
4
Even if the District Court abused its discretion, the error was harmless. “The test
for harmless error is set forth in Rule 52(a) of the Federal Rules of Criminal Procedure:
‘[a]ny error, defect, irregularity, or variance that does not affect substantial rights must be
disregarded.’” United States v. Stevenson, 832 F.3d 412, 427 (3d Cir. 2016). Although
the Court stated that it would sustain a hearsay objection if Mr. Haisten testified to the
substance of the legal advice he received, Mr. Haisten (1) testified that the lawyer
informed the Haistens that the EPA could “make . . . trouble” for them and recommended
that they sell the flea kits in “whole box[es]” to comply with the relevant law, Supp. App.
6
B5
The Haistens also assert that the Government improperly argued during
summation that M.M.’s name was “used fraudulently” in operating eBay accounts that
sold the flea and tick kits. Supp. App. 785. In evaluating whether the Government’s
comments during summation were appropriate, we ask “whether such remarks, in the
context of the entire trial, were sufficiently prejudicial to violate [the] defendant’s due
process rights.” United States v. Green, 25 F.3d 206, 210 (3d Cir. 1994) (quoting United
States v. Scarfo, 685 F.2d 842, 849 (3d Cir. 1982)); see also United States v. Young, 470
U.S. 1, 11 (1985) (cautioning that “a criminal conviction is not to be lightly overturned
on the basis of a prosecutor’s comments standing alone, for the statements or conduct
must be viewed in context”). To this end, the Government has “considerable latitude in
summation to argue the evidence and any reasonable inferences that can be drawn from
that evidence.” United States v. Werme, 939 F.2d 108, 117 (3d Cir. 1991).
Based on the evidence adduced at trial, a juror could reasonably infer that Mr.
Haisten used M.M.’s name fraudulently. Mr. Haisten testified that he and his wife
658, and (2) argued during summation that he “pa[id] a lawyer $5,000” to receive advice
about the cease-and-desist letters and that the lawyer said it was “debatable” that the sale
of the flea and tick kits was illegal, Supp. App. 749. Thus, the testimony he claims he
was not permitted to offer was in fact presented and was actually unhelpful to his
defense, since it included advice that told him to stop engaging in the prohibited kit sales.
As a result, any alleged error in stating that a hearsay objection would be sustained did
not affect the outcome of the proceedings.
5
Immediately after the Government concluded its summation, Mr. Haisten
objected, arguing that the Government lacked a factual basis for its claim that he used
M.M.’s name fraudulently. Thus, we will review the District Court’s ruling for abuse of
discretion. See United States v. Brennan, 326 F.3d 176, 182 (3d Cir. 2003).
7
opened several “stealth” accounts under other people’s names because eBay “banned”
their account, and M.M. was one of the many identities that they used to conduct their
illegal businesses. Supp. App. 664. M.M. worked for the Haistens at their temporary
employment agency for one day in 2001, years before Luv My Pets Supply Store came
into existence. She was, moreover, neither the Haistens’ friend nor a family member.
While Mr. Haisten testified that he always received permission when opening an eBay
account in someone else’s name, he equivocated when discussing the account in M.M.’s
name and stated that he was not “involved” with opening it. Supp. App. 886.
Furthermore, the Haistens previously used the eBay account of a deceased friend to sell
their counterfeit DVDs, which showed that they lacked permission to operate a business
using another person’s name.
In sum, given the Haistens’ reason for establishing the accounts and the use of
identities of people who played no role in the Haistens’ business to set up those accounts,
a juror could reasonably infer that the Haistens used M.M.’s personal information without
permission, and so the Haistens were not prejudiced by the argument. Thus, the District
Court correctly overruled Mr. Haisten’s post-summation objection.
III
For the foregoing reasons, we will affirm.
8