United States v. Barry Bays
680 F. App'x 303
| 5th Cir. | 2017Background
- Barry Bays owned B&B Distribution, which manufactured and sold synthetic "spice" labeled "not for human consumption" but marketed and distributed in ways indicating it was intended to be smoked.
- Jerad Coleman, Bays's brother, was an employee involved in production, labeling, and distribution.
- Indiana law scheduled XLR-11 (5f-UR-144) in September 2012; DEA scheduled it federally in May 2013. Indiana and federal searches recovered spice, a pipe testing positive for XLR‑11, and two handguns at Bays's residence.
- Indictment charged Bays and Coleman with: conspiracy to defraud the U.S. (Count One), conspiracy to commit mail fraud (Count Two), and conspiracy to distribute a controlled substance analogue (Count Three); Bays also faced firearm and communication-facility counts (Counts Four and Five).
- A jury convicted both defendants on all counts; on appeal the court examined sufficiency and instructional error issues, particularly after the Supreme Court decided McFadden v. United States.
Issues
| Issue | Government's Argument | Bays/Coleman Argument | Held |
|---|---|---|---|
| Whether jury was properly instructed that Gov't must prove defendant knew the substance was a "controlled substance" (McFadden knowledge element) for conspiracy to distribute an analogue (Count Three) | Jury instruction sufficient; evidence overwhelmingly showed Bays knew substances were analogues | Instruction was insufficient; Gov't must prove defendant knew substance was a controlled substance under federal law | Reversed Count Three for both defendants because jury lacked proper McFadden instruction and error was not harmless |
| Whether Bays's firearm and communication-facility convictions (Counts Four & Five) survive if Count Three is reversed | These counts independently supported by evidence | Counts depend on underlying drug felony (Count Three) | Reversed Counts Four and Five for Bays because they relied on reversed Count Three |
| Sufficiency of evidence for conspiracy to defraud the United States (Count One) | Evidence showed deliberate mislabeling and intent to avoid FDA regulation; scheme to sell for human consumption while labeling otherwise | Bays: advertising cured mislabeling; Coleman: lacked intent to defraud FDA | Affirmed Count One; evidence supported knowing mislabeling and intent to avoid regulation |
| Sufficiency of evidence for conspiracy to commit mail fraud (Count Two) | Labels and promotional statements were materially false/misleading and capable of influencing purchasers | No actual reliance; customers "in on the joke" so not defrauded | Affirmed Count Two; material misrepresentations were shown and actual reliance not required |
Key Cases Cited
- McFadden v. United States, 135 S. Ct. 2298 (Sup. Ct.) (knowledge element requires proof defendant knew substance was a controlled substance, even in analogue cases)
- Neder v. United States, 527 U.S. 1 (Sup. Ct.) (harmless-error standard for omission of an element)
- United States v. Stanford, 823 F.3d 814 (5th Cir.) (post-McFadden harmless-error analysis; jury interrogatory inadequacy)
- United States v. McFadden, 823 F.3d 217 (4th Cir.) (remand analysis applying McFadden; recorded calls showing knowledge)
- United States v. Harms, 442 F.3d 367 (5th Cir.) (materiality test for mail-fraud statements)
- United States v. Morris, 46 F.3d 410 (5th Cir.) (participation in labeling supports conspiratorial intent)
- United States v. Brown, 727 F.3d 329 (5th Cir.) (standard for viewing evidence on sufficiency/review for manifest miscarriage of justice)