F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
MAY 2 2001
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
HOWARD SCOTT SIMPSON,
Petitioner-Appellant,
v. No. 00-3101
EDWARD E. BOUKER, Judge, District
Court of Ellis County; THOMAS J.
DREES*, County Attorney of Ellis
County; CARLA STOVALL, Kansas
Attorney General,
Respondents-Appellees.
ROY L. JENSEN,
Petitioner-Appellant,
v. No. 00-3107
EDWARD E. BOUKER, District Court
Judge of Ellis County; THOMAS J.
DREES, County Attorney of Ellis County,
Kansas; ATTORNEY GENERAL OF
THE STATE OF KANSAS,
Respondents-Appellees.
*
Pursuant to Fed. R. App. P. 43(c)(2), Thomas J. Drees is substituted for Glenn R.
Braun, Ellis County Attorney, as a respondent in this action.
JOHN G. HALLOCK,
Petitioner-Appellant,
v. No. 00-3133
BYRON MEEKS, Pawnee County
District Court Judge; JOHN M. SETTLE,
County Attorney of Pawnee County,
Kansas; ATTORNEY GENERAL OF
KANSAS,
Respondents-Appellees.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
(D.C. Nos. 97-CV-3011-DES, 97-CV-3032-DES, & 97-3013-DES)
Michael S. Holland of Holland and Holland, Russell, Kansas, for Petitioners-Appellants.
David L. Harder, Kansas Department of Revenue (Jared S. Maag, Assistant Attorney
General, with him on the brief), Topeka, Kansas, for Respondents-Appellees.
Before EBEL, ANDERSON, and BALDOCK, Circuit Judges.
BALDOCK, Circuit Judge.
Petitioners Howard Scott Simpson, Roy L. Jensen, and John G. Hallock appeal the
district court’s order denying their petitions for a writ of habeas corpus. See 28 U.S.C.
§ 2254. Petitioners argue their prosecutions for possession of marijuana, following the
State of Kansas’ imposition of a penalty for failure to pay a drug tax pursuant to Kan.
2
Stat. Ann. §§ 79-5201 thru 79-5212, violate the Double Jeopardy Clause of the Fifth
Amendment. See U.S. Const. amend. V. We exercise jurisdiction pursuant to 28 U.S.C.
§ 2253(a), and affirm.
I.
The Kansas Drug Tax Act (Act) imposes a tax on marijuana and other controlled
substances. The Act bases the rate of taxation on the weight of the substance in a dealer’s
possession. Under the Act, the tax rate for marijuana is $3.50 per gram. Kan. Stat. Ann.
§ 79-5202(a)(1). The Secretary of Revenue adopts rules and regulations relating to the
administration of the Act and the Director of Taxation administers the tax itself. Id.
The Act applies only to “dealers” defined as “any person who, in violation of
Kansas law, manufactures, produces, ships, transports, or imports into Kansas or in any
manner acquires or possesses more than 28 grams of marijuana . . . .” Id. § 79-5201(c).
The Director of Taxation sells official stamps which purchaser’s affix to the marijuana as
evidence of payment. Id. § 79-5204(b). Each stamp is valid for three months after
issuance. Id. Any person may purchase the stamps without disclosing his or her identity.
Id. The tax is due immediately upon acquisition or possession of the requisite amount of
marijuana within the State. Id. § 79-5204(d).
Upon learning the tax is unpaid, the Director may assess the tax. Id. § 79-5205(a).
If the tax remains unpaid after notification of the amount of tax, penalty and interest due,
the Director may collect the amount due as provided in the income tax statutes. Id.
3
Information obtained in compliance with the Act is confidential and may not be used
against the dealer in any criminal proceeding except proceedings involving taxes due. Id.
§ 79-5206.
Both criminal and civil penalties are available for violation of the Act. Id.
§ 79-5208. A dealer violating the Act is subject to a civil penalty of 100% of the tax in
addition to payment of the tax itself. Id. The Act also makes distributing or possessing
marijuana without affixing the appropriate stamps a level ten felony. Id. The Act does
not give a dealer immunity from criminal prosecution. Id. § 79-5209.
II.
A. Petitioner Jensen
On June 23, 1993, pursuant to a search warrant, state law enforcement officers
searched Petitioner Jensen’s home and seized a quantity of marijuana. On July 9, 1993,
the Kansas Department of Revenue (KDR) assessed a tax upon the marijuana seized in
the amount of $9,975.00. The KDR also assessed a 100% penalty for failure to pay the
drug tax bringing the total due to $19,950.00.
On July 20, 1993, the Ellis County Attorney filed a complaint charging Petitioner
Jensen with (1) possession of marijuana with intent to sell within 1000 feet of school
property in violation of Kan. Stat. Ann. § 65-4127b(b)(3) (re-codified at Kan. Stat. Ann.
§ 65-4163(a)(3) (1999 Supp.)) and (2) possession of marijuana without affixing the
appropriate tax stamps in violation of Kan. Stat. Ann. § 79-5208. The state district court
4
dismissed the possession with intent to sell charge on double jeopardy grounds. Based
upon stipulated facts, Petitioner Jensen was found guilty of possession of marijuana
without affixing the appropriate tax stamps. Petitioner Jensen received a stay of his
sentence pending the State’s appeal of the dismissal of the possession with intent to sell
charge.
B. Petitioner Simpson
On May 2, 1994, a police officer stopped Petitioner Simpson for operating a
vehicle with an expired license tag. During the stop, the officer looked through the
window of the vehicle and saw a large bag full of marijuana. The officer arrested and
charged Petitioner Simpson with (1) possession of marijuana without affixing the
appropriate tax stamps in violation of Kan. Stat. Ann. § 79-5208, (2) possession of
marijuana with intent to sell in violation of Kan. Stat. Ann. § 65-4127b(b)(3) (re-codified
at Kan. Stat. Ann. § 65-6142(a)(3) (1999 Supp.)), and (3) driving an unregistered vehicle
in violation of Kan. Stat. Ann. § 8-142. On May 16, 1994, the KDR assessed a tax upon
the marijuana seized in the amount of $7,840.00. The KDR also assessed a 100% penalty
for failure to pay the drug tax, bringing the total amount due to $15,680.00. The state
district court again dismissed the possession with intent to sell charge on double jeopardy
grounds. Petitioner Simpson pled guilty to driving an unregistered vehicle. The State
appealed the district court’s dismissal of the possession with intent to sell charge.
5
C. Petitioner Hallock
In July 1994, police arrested and charged Petitioner Hallock with (1) possession of
marijuana with intent to sell within 1000 feet of a school in violation of Kan. Stat. Ann.
1994 Supp. § 65-4163(a)(3), (b) and (2) possession of marijuana without affixing the
appropriate tax stamps in violation of Kan. Stat. Ann. § 79-5208. On July 29, 1994, the
KDR assessed a tax on the marijuana seized in the amount of $29,810.00. The KDR also
assessed a 100% penalty resulting in a total due of $59,620.00. This time, the state
district court denied Petitioner Hallock’s motion to dismiss based on double jeopardy
grounds. Petitioner Hallock did not appeal the district court’s denial of the motion to
dismiss.
D.
The Kansas Supreme Court consolidated the Simpson and Jensen appeals, held
that the district court erred in dismissing the possession of marijuana charges as a
violation of the Double Jeopardy Clause, and remanded the cases with instructions to
reinstate the possession charges as to each Petitioner. See State v. Jensen, 915 P.2d 109
(Kan. 1996). On remand, Petitioner Jensen was found guilty of possession of marijuana
with intent to sell within 1000 feet of school property. After sentencing, Petitioner Jensen
obtained a stay until he exhausted his federal habeas remedies. Petitioners Simpson and
Hallock each received a stay of criminal prosecution until federal court review of the
6
double jeopardy issue was completed.1
Each Petitioner filed an application for habeas relief pursuant to 28 U.S.C. § 2254,
alleging violations of their Fifth Amendment right against double jeopardy. The district
court denied each Petitioner’s application for habeas relief and issued each Petitioner a
certificate of appealability. See id. § 2253(c).
III.
The Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), Pub. L. No.
104-132, 110 Stat. 1214 (1996), applies to this appeal. See Williams v. Taylor, 529 U.S.
362, 402 (2000). Under AEDPA, if a state court adjudicates a claim on the merits, a
petitioner is entitled to federal habeas relief only if he can establish that the state court
decision “was contrary to, or involved an unreasonable application of, clearly established”
Supreme Court precedent or “was based on an unreasonable determination of the facts in
light of the evidence presented.” 28 U.S.C. § 2254(d)(1), (2). A state court decision is
1
Petitioner Hallock did not seek review from the Kansas appellate courts, proceeding
instead directly to the United States District Court. Respondents argue that Petitioner
failed to exhaust his available state court remedies and, therefore, his appeal must be
dismissed. AEDPA amended the exhaustion provisions of § 2254. While § 2254(b)(1)
retains the pre-AEDPA requirement that a petition for a writ of habeas corpus may not be
granted unless the petitioner has exhausted available state court remedies, § 2254(b)(2)
specifically provides that a claim may be denied on the merits notwithstanding a failure to
exhaust. See Goodwin v. Oklahoma, 923 F.2d 156, 158 (10th Cir. 1991) (recognizing
exception to the exhaustion doctrine where “the state’s highest court has explicitly and
recently addressed the precise issue advanced by the petitioner”). The Kansas Supreme
Court already decided the double jeopardy issue presented in this case in both State v.
Gulledge, 896 P.2d 378 (1995) and State v. Jensen, 915 P.2d 109 (1996). As such, we
will consider Petitioner Hallock’s petition on the merits.
7
“contrary to” established Supreme Court precedent if the state court (1) arrives at a
conclusion opposite to that reached by the Supreme Court on a question of law or (2)
decides a case differently than the Supreme Court has on a set of materially
indistinguishable facts. Williams, 529 U.S. at 405. A state court decision involves an
“unreasonable application” of Supreme Court precedent if the state court identifies the
correct governing legal principle from Supreme Court decisions but unreasonably applies
that principle to the facts of the particular case. Id. at 407.
The Double Jeopardy Clause of the Fifth Amendment provides that no person shall
“be subject for the same offense to be twice put in jeopardy of life or limb.” U.S. Const.
amend. V. The Double Jeopardy Clause affords three distinct protections to a criminal
defendant: (1) protection against a second prosecution for the same offense after
acquittal; (2) protection against a second prosecution for the same offense after
conviction; and (3) protection against multiple criminal punishments for the same offense.
Jones v. Thomas, 491 U.S. 376, 380-81 (1989). Petitioners argue that their prosecutions
for possession of marijuana, following the assessment of a tax penalty for failure to pay
the drug tax, violate the Double Jeopardy Clause’s protection against multiple criminal
punishments for the same offense.
A.
The Supreme Court’s opinion in Dep’t of Revenue of Montana v. Kurth Ranch,
511 U.S. 767 (1994), guides us because it addresses both the Double Jeopardy Clause and
8
drug taxes. In Kurth Ranch, the Court examined Montana’s Dangerous Drug Tax Act and
held that the assessment of the drug tax following state criminal proceedings violated the
Double Jeopardy Clause. Id. at 784. The Court initially stated that “[a]s a general matter,
the unlawfulness of an activity does not prevent its taxation.” Id. at 777 (citing United
States v. Constantine, 296 U.S. 287, 293 (1935); James v. United States, 366 U.S. 213
(1961)). The Court noted, however, that “there comes a time in the extension of the
penalizing features of the so-called tax when it loses its character as such and becomes a
mere penalty with the characteristics of regulation and punishment.” Id. at 779 (citing
Bailey v. Drexel Furniture Co., 259 U.S. 20, 38 (1922)). The Court concluded that the
Montana tax of $100 per ounce of marijuana was “remarkably high” and that the Montana
legislature intended the tax to deter people from possessing marijuana. Id. at 781.
Two “unusual features” appeared in the Montana tax that the Court determined set
it apart from most taxes and ultimately resulted in the Court holding the tax violated the
Double Jeopardy Clause. First, Montana conditioned the tax on the commission of a
crime. The state assessed the tax only after an arrest for the precise conduct that initiates
tax liability. Therefore, the Court concluded this feature was “significant of penal and
prohibitory intent.” Id. at 781. Second, although the Montana tax was purportedly a
property tax on “the possession and storage of dangerous drugs,” the Court reasoned the
state levied the tax “on goods that the taxpayer neither owns nor possesses when the tax is
imposed” because the state presumably confiscated the drugs. Id. at 783. The Court
9
believed these “unusual features” indicative of a punitive character and ultimately
concluded that “[t]aken as a whole, this drug tax is a concoction of anomalies too far
removed in crucial respects from a standard tax assessment to escape characterization as
punishment.” Id. at 783.
In Jensen, 915 P.2d at 109, the Kansas Supreme Court reaffirmed its previous
decision in Gulledge, 896 P.2d at 378, which applied and distinguished Kurth Ranch. In
Gulledge, the court recognized that the Kansas tax, like the Montana tax, has a deterrent
purpose and a very high tax rate.2 896 P.2d at 924. The court went on to note, however,
that unlike the Montana tax that the state conditioned upon the commission of a crime, the
Kansas drug tax only applies to those who illegally possess drugs in large enough
2
The Montana Dangerous Drug Tax Act taxed marijuana at a rate of $100 per ounce.
The Kansas drug tax is $3.50 per gram which equates to approximately $100 per ounce.
In Kurth Ranch, the Court had an estimated market value available and figured the tax
and penalty to total eight times the market value of the marijuana. 511 U.S. at 780.
Market value can change, however, depending on such factors as quality, supply and
demand, and volume sold. In this case, we have no evidence before us as to the market
value of the marijuana seized so we cannot determine the exact tax rate. In any event,
although the tax rate may be high, a high rate of tax does not automatically render a tax
criminal punishment for purposes of Double Jeopardy. See e.g. United States v. Sanchez,
340 U.S. 42 (1950) (upholding a federal tax (now repealed) of $100 per ounce on
transfers of marijuana).
Petitioners also argue that because the tax stamps are only valid for three months,
the initial tax rate quadruples over the course of a year. Coupled with the penalty for
failure to pay the tax, Petitioners argue the potential tax rate is 64 times the market value
of marijuana per year. This argument lacks merit, however, because nothing suggests the
legislature intended the tax to be collected more than once. In Gulledge, the Kansas
Supreme Court determined that the tax stamps are only valid for three months because
“[p]resumably, the short life span of the tax stamps reflects the legislature’s recognition
of the rapid turnover rate of illicit drugs.” 896 P.2d at 923.
10
quantities to meet the definition of a “dealer.” Id. Because an individual must qualify as
a “dealer” to incur tax liability, Kansas does not tax mere drug possession. Thus, a person
can possess lesser quantities of marijuana in violation of Kansas law without incurring tax
liability. Persons who have been arrested for possessing marijuana constituted the entire
class of taxpayers subject to the tax in Montana. Kurth Ranch, 511 U.S. at 781-82. The
Kansas tax, however, is assessed regardless of whether the taxpayer has been arrested for
criminal conduct. Gulledge, 896 P.2d at 385.
In addition, unlike the Montana tax where the state did not assess the tax until after
the arrest of the taxpayer for drug possession, the Kansas tax is due immediately upon
possession of the requisite amount of controlled substance. See Kan. Stat. Ann.
§ 79-5204. The fact that the tax is essentially self-assessed, and many dealers refuse to
pay the tax, does not transform the tax into one assessed only upon criminal prosecution.3
Therefore, the court determined the Kansas drug tax lacked the “unusual features” which
rendered the tax in Kurth Ranch so punitive in nature as to transform it into a criminal
punishment. See Gulledge, 896 P.2d at 930.
3
The Court in Kurth Ranch specifically noted that “[p]ersons who have been arrested for
possessing marijuana constitute the entire class of taxpayers subject to the Montana tax.”
511 U.S. at 782. Here, “dealers” constitute the class of taxpayers subject to the tax, rather
than just arrested dealers. In addition, Petitioners submit data from the KDR that states
from 1991 through 1996, the Kansas drug tax generated $3,914,096.00. Although the
majority of the tax collected was assessed subsequent to an arrest, $15,990.00 was
collected independent of an arrest. Therefore, some individuals are paying the tax upon
possession without being arrested.
11
Additionally, the Jensen court rejected the argument that the penalty for failure to
pay the drug tax was punishment for possession of marijuana. The court explained that
[T]he [possession] charges which were dismissed as carrying
duplicative punishments would not have punished the same
offense as the 100% penalty. The 100% penalty is
punishment for the offense of failing to pay the drug tax, and
the punishment of the dismissed charges would have been for
possessing the drug. Because the punishments are not for the
same offense, the Double Jeopardy Clause is not implicated.
Jensen, 915 P.2d at 120.
The Kansas Supreme Court’s decision in Jensen is not an unreasonable application
of Kurth Ranch. The court ultimately distinguished the Act in a well-reasoned opinion
after careful examination of the Montana tax and the analysis utilized by the Court in
Kurth Ranch. In addition, the petitioners in Kurth Ranch challenged the assessment of
the tax subsequent to their criminal convictions. The Supreme Court never decided the
question whether the prior assessment of a tax would bar a criminal proceeding. In fact,
in Kurth Ranch, the Court specifically noted that the case “did not raise the question
whether an ostensibly civil proceeding that is designed to inflict punishment may bar a
subsequent proceeding that is admittedly criminal in character.” 511 U.S. at 782, n. 21.
Accordingly, the Kansas court’s decision does not run afoul of established Supreme Court
precedent.
B.
Our conclusion that Jensen is not an unreasonable application of Kurth Ranch is
12
reinforced by the Supreme Court’s decision in Hudson v. United States, 522 U.S. 93
(1997). Hudson, decided after Jensen, does not affect the ultimate conclusion of the
Kansas Supreme Court but does clarify the proper analysis for determining whether a
particular sanction violates double jeopardy. Hudson held that the Double Jeopardy
Clauses’s prohibition against multiple punishments for the same offense “protects only
against the imposition of multiple criminal punishments.” Hudson, 522 U.S. at 99. The
core inquiry, therefore, is whether the penalty is criminal or civil in nature. Hudson
articulated a two-part test for determining whether a particular punishment is civil or
criminal. First, we must determine whether the legislature “indicated either expressly or
impliedly a preference for one label or the other.” Id. Second, even if the legislature
intended for the tax to be a civil sanction, we must consider whether the statutory scheme
is “so punitive either in purpose or effect as to transform what was clearly intended as a
civil remedy into a criminal penalty.” Id.
In determining whether the Act is indeed a civil penalty, Hudson suggests the
factors set forth in Kennedy v. Mendoza-Martinez, 372 U.S. 144, 168-69 (1963) as
“useful guideposts”:
(1) whether the sanction involves an affirmative disability or restraint; (2)
whether it has historically been regarded as a punishment; (3) whether it
comes into play only on a finding of scienter; (4) whether its operation will
promote the traditional aims of punishment, retribution and deterrence; (5)
whether the behavior to which it applies is already a crime; (6) whether an
alternative purpose to which it may rationally be connected is assignable for
it; and (7) whether it appears excessive in relation to the alternative purpose
assigned.
13
Hudson, 522 U.S. at 99. Courts must consider these factors “in relation to the statute on
its face,” and “only the clearest proof will suffice to override legislative intent and
transform what has been denominated a civil remedy into a criminal penalty.” Id.
Kansas courts, in interpreting the state legislature’s intentions, have repeatedly
held the assessment of taxes pursuant to the Act is civil in nature. See State v. Matson,
798 P.2d 488 (Kan. 1990) (holding the Act constituted a civil penalty because one of its
objectives was revenue collection and because assessment of the tax did not necessarily
depend on the illegal nature of the sale or possession of marijuana); see also State v.
Berberich, 811 P.2d 1192 (Kan. 1991) (reaffirming Matson). The legislature quite clearly
labeled the applicable statute a tax. See Kan. Stat. Ann. § 79-5201 (entitled “Taxation of
marijuana and controlled substances”) (emphasis added). In addition, Kan. Stat. Ann.
§ 79-5203 confers authority upon the Secretary of Revenue to “adopt all rules and
regulations necessary to administer and enforce the provisions of this act.” See Hudson,
522 U.S. at 103 (“That such authority was conferred upon administrative agencies is
prima facie evidence that Congress intended to provide for a civil sanction”). Because
the Act purports to be civil on its face, a presumption arises that the statute is civil in
nature. Kansas v. Hendricks, 521 U.S. 346, 361 (1997). Petitioners can overcome this
presumption only “by the clearest proof that the statutory scheme is so punitive either in
purpose or effect as to transform what was clearly intended as a civil remedy into a
criminal penalty.” Hudson, 522 U.S. at 118.
14
Application of the Kennedy factors fails to achieve the “clearest proof” standard
under Hudson to transform the Kansas drug tax into a criminal penalty. First, monetary
fines do not constitute an “affirmative disability or restraint.” Noriega-Perez v. United
States, 179 F.3d 1166, 1172 (9th Cir. 1999). Second, courts have not historically viewed
monetary penalties as punishment. Id. Third, the statute does not contain a scienter
requirement. The tax is due immediately upon possession of the requisite amount of
controlled substance. See Kan. Stat. Ann. § 79-5204. Fourth, the Kansas courts have
already determined that the tax does serve a deterrent purpose. The Supreme Court has
recognized, however, that a monetary sanction may deter others without being criminal in
nature. See Hudson, 522 U.S. at 105 (“[T]he mere presence of this purpose is insufficient
to render a sanction criminal.”). Fifth, possession of marijuana is a crime and the tax is
triggered by the act of possessing the requisite amount of marijuana. The penalty,
however, is for failure to pay the tax only and does not relate to the illegal act of
possessing the drugs. Sixth, the alternative purpose is raising revenue and a concern that
the “flourishing underground economy not operate on a tax-free basis.” Gulledge, 896
P.2d at 384-85. Finally, although the penalty for failure to pay the tax might be
considered excessive, the Supreme Court emphasizes that “no one factor should be
considered controlling.” Hudson, 522 U.S. at 494. These factors considered in their
entirety convince us that the Kansas drug tax is not criminal punishment for double
jeopardy purposes.
15
IV.
The reasoning of the Kansas Supreme Court is not contrary to nor an unreasonable
application of, established Supreme Court precedent. Accordingly, we AFFIRM the
district court.
16