United States v. Judy Haisten ( 2022 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 21-1421 and 21-1422
_____________
UNITED STATES OF AMERICA
v.
JUDY HAISTEN,
Appellant in No. 21-1421
DAVID HAISTEN,
Appellant in No. 21-1422
__________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Nos. 2-16-cr-0461-001 and 2-16-cr-0461-002)
District Judge: Honorable Gerald J. Pappert
_______________
Argued
June 28, 2022
Before: JORDAN, PORTER, and PHIPPS, Circuit Judges
(Filed October 5, 2022)
_______________
Peter G. Erdely [ARGUED]
Law Offices of Peter G. Erdely
100 South Juniper Street – 3rd Fl.
Philadelphia, PA 19107
Counsel for Appellants
Christopher E. Parisi
Robert A. Zauzmer [ARGUED]
Office of United States Attorney
615 Chestnut Street – Ste. 1250
Philadelphia, PA 19106
Counsel for Appellee
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OPINION OF THE COURT
_______________
JORDAN, Circuit Judge.
Judy and David Haisten appeal the District Court’s
order denying their joint motion for post-conviction relief
under 28 U.S.C. § 2255. They claim that their convictions
should be vacated because their trial counsel was ineffective
for failing to request a jury instruction on improper venue or
judgment of acquittal on venue grounds. We will vacate the
District Court’s order and remand for the Court to conduct an
evidentiary hearing on whether their counsel had a strategic
reason for not raising a defense based on improper venue.
2
I. BACKGROUND
In 2009, the Haistens started an internet business out of
their home in South Carolina. They sold discounted animal
pesticides and drugs through their own company’s website and
other websites, including eBay. They did not, however,
register their business with the Environmental Protection
Agency or use EPA-approved labeling and packaging
materials, in violation of EPA regulations governing
manufacturers, importers, and distributors of animal
pesticides. They similarly violated Food and Drug
Administration regulations by dispensing certain drugs without
a prescription, as well as by failing to register their business
facilities with the FDA and use FDA-approved labeling and
packing.
In a truly unusual pairing of business lines, the Haistens
also used their online business to sell counterfeit DVDs of
movies and television shows. They ordered the DVDs from
suppliers in mainland China and Hong Kong, who would then
ship them to the Haistens’ home in South Carolina, using
invoices and customs declarations that misrepresented the
contents of the shipments.
The Haistens received cease-and-desist letters from
South Carolina state regulators and two animal pesticides
companies, all of which they ignored. After receiving multiple
customer complaints about the Haistens’ sales of counterfeit
goods, eBay shut down their seller accounts. The Haistens,
nevertheless, created new accounts and continued to sell the
animal pesticides, drugs, and counterfeit DVDs.
3
By 2012, the U.S. Department of Homeland Security
opened a criminal investigation into the Haistens’ business
dealings. DHS agents began making undercover purchases
from the Haistens’ business, particularly of animal pesticides
and drugs, and Customs and Border Protection (CBP) officers
seized shipments of counterfeit DVDs destined for the
Haistens’ home in South Carolina. Federal investigators then
executed a warrant and searched the Haistens’ home, which
revealed unapproved animal pesticides and drugs, counterfeit
DVDs, business records, and various cease-and-desist letters
and seizure notices.
In November 2016, a grand jury in the U.S. District
Court for the Eastern District of Pennsylvania indicted the
Haistens on fifteen counts, including conspiracy, distributing
and selling unregistered pesticides, distributing and selling
misbranded pesticides, introducing misbranded animal drugs
into interstate commerce, and trafficking in counterfeit goods.
Of importance for this appeal, Count 14 charged the Haistens
with trafficking counterfeit DVDs. Those DVDs happened to
have been seized by CBP officers in Cincinnati, Ohio, before
they reached the Haistens’ South Carolina home. Count 15
also charged them with trafficking counterfeit DVDs, in this
instance DVDs that were seized at their home.
About a year later, the Haistens were convicted on
fourteen charges, including Counts 14 and 15.1 David was
1
At the close of the government’s case, the government
moved to dismiss Count 13, which charged the Haistens with
trafficking in counterfeit goods. The reason for the dismissal
of this count is not reflected in the trial transcript or clarified
by the parties.
4
sentenced to 12 months’ imprisonment on each of the first
twelve counts and 78 months’ imprisonment on each of Counts
14 and 15, all to run concurrently, producing a total sentence
of 78 months. Judy was sentenced to 12 months’ imprisonment
on each of the first twelve counts, and 60 months’
imprisonment on each of Counts 14 and 15, all to run
concurrently, producing a total sentence of 60 months. The
Haistens’ trial counsel did not request a jury instruction on
improper venue or move for acquittal on Counts 14 or 15 for
lack of proper venue in the Eastern District of Pennsylvania.
The Haistens appealed, challenging an evidentiary
ruling and a statement the government made during its
summation. We affirmed. United States v. Haisten, 790
F. App’x 374, 376 (3d Cir. 2019). They filed numerous pro se
motions in the District Court, all of which were denied. They
also filed pro se notices of appeal, which their subsequently
retained counsel moved to dismiss.
The Haistens timely filed a joint pro se motion for relief
under 28 U.S.C. § 2255, arguing that their trial counsel had
been ineffective for, among other things, failing to challenge
venue on Counts 14 and 15. The District Court denied their
motion. With respect to their venue argument, it held that any
attempt by trial counsel to challenge venue would have been
futile because the government had proved venue for Counts 14
and 15. The Court based its conclusion on a spreadsheet
offered by the government that showed five shipments of
DVDs were sent to customers in the Eastern District of
Pennsylvania.
The Haistens then turned to us for a certificate of
appealability. We granted it, limited to the issue of whether
5
the District Court erred in denying the Haistens’ § 2255 motion
with respect to their claims that trial counsel was ineffective
for failing to request a jury instruction on improper venue for
Counts 14 and 15, or for failing to move for a judgment of
acquittal on those counts on the basis that venue had not been
proven.
II. DISCUSSION2
Both parties now agree that, because the seized DVDs
at issue in Counts 14 and 15 were not actually involved in sales
to customers in the Eastern District of Pennsylvania, the
District Court erred in concluding that venue had been
established for those counts. See U.S. Const. amend. VI (“In
all criminal prosecutions, the accused shall enjoy the right [to
trial] by an impartial jury of the state and district wherein the
crime shall have been committed[.]” (emphasis added)). The
government concedes that “trial counsel would have prevailed
on a motion for a judgment of acquittal on the basis of improper
venue” and that “the jury would have found that the
government failed to prove there was venue on these counts
had it been instructed on this issue.” (Answering Br. at 26.)
Despite those concessions, the government still
contends that the Haistens’ trial counsel did not perform
deficiently by failing to object to improper venue and that, even
2
The District Court had jurisdiction under 28 U.S.C.
§ 2255. We have jurisdiction pursuant to 28 U.S.C. §§ 1291and 2253(c). “We review the District Court’s denial of an
evidentiary hearing in a habeas case for abuse of discretion.”
United States v. Booth, 432 F.3d 542, 545 (3d Cir. 2005).
6
if his performance was deficient, the failure to object did not
prejudice the Haistens’ defense. Rather, the government
argues, trial counsel may have chosen not to pursue an
improper venue argument on Counts 14 and 15 because doing
so would have exposed the Haistens to trials in two districts,
the sentencing ranges would have been the same regardless of
convictions on Counts 14 and 15, and a jury instruction on
venue would not have aided their defense. The government
further asserts that defense counsel’s questioning of one
witness about the venue issue demonstrated counsel’s
awareness of it, suggesting that the choice not to pursue a
venue challenge was purposeful.
We are unpersuaded. While a wide berth is given to the
strategic decisions of counsel and their professional judgment,
the record here is devoid of any explanation for trial counsel’s
failure to object to improper venue on Counts 14 and 15.
Under 28 U.S.C. § 2255(b), “[u]nless the motion and files and
records of the case conclusively show that the prisoner is
entitled to no relief, the court shall … grant a prompt hearing
thereon[.]” (emphasis added). The District Court’s failure to
hold such a hearing in this case – a decision likely influenced
by its error in finding that venue for Counts 14 and 15 was
established – was thus problematic.
The Haistens’ ineffective-assistance-of-counsel claim is
subject to the familiar two-prong test in Strickland v.
Washington, 466 U.S. 668, 687 (1984): they must show, first,
“that counsel’s performance was deficient” and, second, “that
the deficient performance prejudiced the defense.” Counsel’s
performance is not deficient under Strickland if it is the product
of a strategic litigation choice. Gaines v. Superintendent
Benner Twp. SCI, 33 F.4th 705, 712 (3d Cir. 2022). But, for
7
Strickland claims, too, “a district court must hold a hearing
‘[u]nless the motion and the files and records of the case
conclusively show that the prisoner is entitled to no relief.’”
United States v. Arrington, 13 F.4th 331, 334 (3d Cir. 2021)
(alteration in original) (quoting 28 U.S.C. § 2255(b)), cert.
denied, 142 S. Ct. 1431 (2022). “If … a claim, when taken as
true and evaluated in light of the existing record, states a
colorable claim for relief under Strickland, then further factual
development in the form of a hearing is required.” Id.“[C]olorable legal merit is distinct from actual merit.”
Id. The threshold for a habeas petitioner’s claim to be
colorable is low. Again, we have emphasized that a hearing
must be held if the claim “does not conclusively fail either
prong of the Strickland test[.]” Id. The bottom line is, given
the lack of evidence in the record about trial counsel’s strategic
reasons for failing to object to improper venue on Counts 14
and 15, it is inconclusive whether the Haistens’ trial counsel
performed deficiently. And while we take no definitive
position on the merits of the Haistens’ arguments on the
prejudice prong, their theory that they are prejudiced by having
additional, improperly imposed felony convictions on their
record is not so conclusively meritless as to have justified
denying them a hearing.
Our dissenting colleague disagrees with us on that last
conclusion, and his contrary belief is premised on two points:
first, that it is mere speculation that the Haistens would spend
less time in prison if they were resentenced without the two
additional felony counts being on their record, and, second,
that their allegations do not even implicate the idea of being
“in custody,” so there is nothing really at stake here. Neither
8
of those arguments is sufficient to make the Haistens’
allegation of prejudice less than colorable.
As to the first point, looking into the future necessarily
involves uncertainty, and, though the dissent dismisses the
possibility of shorter sentences as mere speculation, it is at least
as speculative to assert that the sentences the Haistens would
receive at a resentencing would be the same as the ones they
received when they were being sentenced for two additional
felonies. The sentencing court is entitled to know what the
record of convictions is before assessing what sentence to
impose. That’s true whether the sentence ultimately imposed
is inside or outside of the guidelines range.3 Indeed, a
sentencing court has to know what the actual convictions and
other considerations are so that it can sensibly arrive at and
explain its decision. See United States v. Langford, 516 F.3d
205, 213 (3d Cir. 2008) (describing duty of district court to
explain its sentencing decision, especially if it chooses to go
outside the guidelines). The changed record may end up
making no difference to the District Court, if there ever is a
resentencing (and a resentencing is by no means certain, since
the Haistens may not get past the “performance” prong of the
Strickland test). Still, it may make a difference, and that is for
the District Court to decide, not for us to assume.4
3
The Haistens received sentences below their
guidelines ranges. Those ranges were 121 to 151 months for
David, and 108 to 135 months for Judy. David actually
received 78 months, and Judy received 60.
4
The dissent’s reliance on Rainey v. Varner, 603 F.3d
189 (3d Cir. 2010), is misplaced. True enough, we concluded
9
As to the second point – that the Haistens’
ineffectiveness claim doesn’t implicate the issue of “custody”
at all and so is irrelevant – that too is mistaken. It takes as
given what it purports to prove, namely that there’s no
prejudice because the sentence will be the same and there will
be no impact on how long they’ll be in custody. But, as just
discussed, that is not so. Even if it were, however, the
conclusion would still be wrong because “custody” is not the
determinative factor; “prejudice” is, and the two terms are not
synonymous. Nothing in our jurisprudence suggests that being
in custody is a prerequisite to showing prejudice. On the
contrary, collateral consequences can and do count when
considering the question of prejudice. Cf. Ball v. United States,
470 U.S. 856, 865 (1985) (deciding on direct appeal that an
increased sentence under a recidivist statute for a future offense
or delay in eligibility for parole constituted potential adverse
collateral consequences of an unauthorized conviction).
that prejudice could not be shown in that case because the
petitioner would have received the same sentence regardless of
the ineffectiveness of counsel, id. at 202-03, but we have
declined to apply Rainey outside of its specific context: an
ineffective-assistance claim involving a mandatory life
sentence for second-degree felony murder. Bennett v.
Superintendent Graterford SCI, 886 F.3d 268, 289-90 (3d Cir.
2018); see also id. at 290 n.19 (“Rainey [was] a narrow
decision that certainly did not purport to redefine prejudice
globally by adding a requirement of a more onerous sentence
for all petitioners alleging guilt-phase ineffectiveness.”)
(internal quotation marks omitted).
10
Our dissenting colleague thinks otherwise and cites
United States v. Ross, 801 F.3d 374 (3d Cir. 2015), for the
proposition that “section 2255 provides relief only to those
prisoners who claim the right to be released from ‘custody.’”
Id. at 379. Ross, however, said a good deal more than that. We
were at pains there to declare that “[t]he term ‘custody’ … is
not as straightforward as it may at first appear[,]” and that, as
the Supreme Court has explained, the concept of “custody” is
“expansive enough to encompass harms and remedies other
than immediate discharge from physical confinement[.]” Id.(citing Peyton v. Rowe, 391 U.S. 54, 66-67 (1968)). In short,
“‘our understanding of custody has broadened’ to include
many forms of restraint short of physical confinement[.]” Id.(quoting Rumsfeld v. Padilla, 542 U.S. 426, 437 (2004)).
Our dissenting colleague also asserts that we are unduly
broadening the standard for obtaining an evidentiary hearing
under § 2255. He cites Maleng v. Cook, 490 U.S. 488, 492
(1989) (per curiam), in which the Supreme Court held that, for
purposes of § 2245, a petitioner who had served his
sentence on one conviction was no longer “in custody” for that
conviction, even though that sentence had been used to
enhance the sentence he received for a subsequent crime.
(Dissent at 3-4.) The Court observed that, because the
petitioner had served his time for the conviction he was trying
to collaterally attack, § 2255 was no longer available to him as
a vehicle to contest that fully satisfied conviction. Maleng, 490
U.S. at 492-93. Maleng, however, has no pertinence here, and
the dissent’s focus on “custody” continues to confuse rather
than clarify the issue before us. Unlike the petitioner in
Maleng, the Haistens in fact are in custody right now, serving
sentences based on the convictions they are attacking. Their
ability to exercise their right to file for relief under § 2255 as
11
current federal prisoners has never been at issue. Because they
are in prison based, in part, on convictions that even the
government acknowledges cannot stand, there is nothing in the
least out of the ordinary in their using § 2255 as the procedural
means to attack those convictions.
That brings us back to what actually is significant at this
stage of the proceeding: the Haistens are in custody and must
assert a colorable claim under Strickland to obtain an
evidentiary hearing under § 2255. Whereas in Ross, a special
assessment of $100 was not enough of a restraint on liberty to
render the petitioner in custody and warrant relief under
§ 2255, 801 F.3d at 379-80, it may well be that two wrongful
felony convictions are enough of a collateral consequence to
be a restraint on liberty, especially since they carry with them
the prospect of enhanced penalties, should the Haistens commit
similar crimes in the future. Nevermind that, says the dissent;
“[f]or those enhanced penalties to have a plausible effect on the
Haistens, they would have to commit another counterfeiting
crime[,]” and we should assume they will instead be law
abiding. (Dissent at 2-3.) Yet enhanced penalties are provided
precisely because recidivism is real, the assumption being that
people do stray again if not facing severe consequences. It is
not a disservice to a criminal defendant’s good intentions to
recognize that the prospect of an extra helping of punishment
upon a re-offense is a real-world consequence of his present
conviction. He may plan to be law-abiding, but the threat of
enhanced penalties makes even an unfounded accusation of a
re-offense a sword of Damocles. That reality deserves better
than a rhetorical shrug. At the least, it gives rise to a colorable
claim that having wrongful felony convictions results in
cognizable prejudice, and that is all that matters at this stage
for the Haistens.
12
Accordingly, the Haistens have a colorable claim of
ineffective assistance of counsel, and the District Court abused
its discretion in failing to hold an evidentiary hearing before
denying their claim.
III. CONCLUSION
For the foregoing reasons, we will vacate the District
Court’s order denying the Haistens’ § 2255 motion and will
remand to the District Court for an evidentiary hearing on
whether the Haistens’ trial counsel had a strategic reason for
not objecting to improper venue on Counts 14 and 15.
13
United States v. Haisten, Nos. 21-1421 & 21-1422
PHIPPS, Circuit Judge, dissenting.
The Majority Opinion remands this case for an evidentiary
hearing on the Haistens’ motion for postconviction relief
pursuant to 28 U.S.C. § 2255. But such a hearing is warranted
only if, after taking as true all non-frivolous factual claims
alleged in the petition, a person in custody plausibly states a
claim that his or her sentence was imposed in violation of
federal law. See United States v. Arrington, 13 F.4th 331, 334
(3d Cir. 2021); see also 28 U.S.C. § 2255(b) (providing for an
evidentiary hearing “[u]nless the motion and the files and
records of the case conclusively show that the prisoner is
entitled to no relief”). Applied to the claim for ineffective
assistance of counsel raised here, the Haistens must plausibly
allege a deficiency in their counsel’s performance and
resulting prejudice. See Arrington, 13 F.4th at 334 (explaining
that if a § 2255 motion “clearly fails to demonstrate either
deficiency of counsel’s performance or prejudice to the
defendant, then the claim does not merit a hearing” (quoting
United States v. Dawson, 857 F.2d 923, 928 (3d Cir. 1988)));
see generally Strickland v. Washington, 466 U.S. 668 (1984).
The Majority Opinion correctly concludes that the Haistens
plausibly alleged deficient performance. But they did not
present similarly plausible allegations of prejudice, so their
§ 2255 motion fails as a matter of law. For that reason, the
District Court’s denial of their motion without an evidentiary
hearing should be affirmed, and on that ground, I respectfully
dissent.
No one here contests the plausibility of the allegation that
if the Haistens’ trial counsel would have moved for acquittal
due to improper venue, then the Haistens would have been
acquitted on the two counterfeiting charges (Counts 14 and
15). In this context, however, that alone does not suffice for
prejudice. Even without convictions for those counts, the
Haistens would have been subject to the same Guidelines
ranges: 121 to 151 months for David, and 108 to 135 months
for Judy. Because those counterfeiting convictions did not
alter their Guidelines ranges, it is conjecture to conclude that
the Haistens would have received a lighter sentence without
them. And with nothing more than speculation in support of
the prejudice prong, the Haistens are not entitled to an
evidentiary hearing. Cf. Rainey v. Varner, 603 F.3d 189, 202–
03 (3d Cir. 2010) (rejecting a claim for ineffective assistance
of counsel, because “even had [the petitioner’s] counsel
challenged the sufficiency of the evidence, [the petitioner]
would have received the same sentence”); United States v.
Rangel, 781 F.3d 736, 744–45 (4th Cir. 2015) (rejecting a
claim for ineffective assistance of counsel based on trial
counsel’s failure to request a jury instruction when the
petitioner’s “sentence would have been the same even with a
proper jury instruction”). In reaching a different conclusion,
the Majority Opinion neglects that the movant, here the
Haistens, must plausibly allege that they would have received
a lighter sentence; the government does not have to prove that
the sentence would have been the same. See Arrington,
13 F.4th at 334–35. Without non-speculative allegations of a
lighter sentence, the Haistens are not entitled to an evidentiary
hearing.
Nor is the Haistens’ § 2255 motion the proper method for
challenging the downstream collateral consequences of their
counterfeiting convictions. Such a motion may be used to
litigate ineffective-assistance-of-counsel claims, and the
standard for the motion – not the standard for the underlying
claim – is that the violation of federal law must result in a
2
“severe” restraint on individual liberty that is “immediate” and
“not speculative.” Duka v. United States, 27 F.4th 189, 195
(3d Cir. 2022) (quoting United States v. Ross, 801 F.3d 374,
379 (3d Cir. 2015)). And here, although their counterfeiting
convictions would subject the Haistens to an increased
maximum prison sentence for any subsequent counterfeiting
offenses, see 18 U.S.C. § 2320(b)(1)(B), that possibility does
not immediately restrain their liberty. For those enhanced
penalties to have a plausible effect on the Haistens, they would
have to commit another counterfeiting crime. Yet their motion
provides no basis for supposing their recidivism. Cf. O’Shea
v. Littleton, 414 U.S. 488, 497 (1974) (explaining that courts
generally assume that persons “will conduct their activities
within the law and so avoid prosecution and conviction”). And
therefore, the downstream collateral consequences of their two
counterfeiting convictions do not implicate their custody to the
degree required for challenging a sentence through a § 2255
motion. See Ross, 801 F.3d at 379 (“The plain text of section
2255 provides relief only to those prisoners who claim the right
to be released from ‘custody.’”).
The Majority Opinion recognizes the possibility that the
Haistens may re-offend, but § 2255 requires plausible
allegations of immediate and non-speculative restraints on
liberty. See id. Yet the Haistens, who both received below-
Guidelines sentences, offer nothing to suggest that they would
pose an immediate risk of recidivism upon their release. By
ignoring the requirement that a restraint on individual liberty
be immediate and non-speculative, the Majority Opinion
essentially applies a blanket rule: because any conviction may
influence the sentencing for a future crime, a claim of wrongful
conviction will always plausibly allege the prejudice needed
for an evidentiary hearing. The legal standard to obtain a
3
§ 2255 hearing, however, is not that sweeping. Cf. Maleng v.
Cook, 490 U.S. 488, 492 (1989) (per curiam) (concluding that
a habeas petitioner was not in custody following the expiration
of his prison sentence “merely because of the possibility that
the prior conviction will be used to enhance the sentences
imposed for any subsequent crimes of which he is convicted”).
In sum, I view the record as sufficient to affirm the District
Court’s denial of the Haistens’ § 2255 motion.
4