USA v. Phu et al

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF OKLAHOMA
UNITED STATES OF AMERICA, 	)
)
Plaintiff, 	)
)
v. 	) 	No. CR-24-146-R
)
CHONG IU PHU, 	)
CHANH IU PHU, 	)
MATTHEW ALAN STACY, 	)
)
Defendants. 	)
ORDER
The following motions are pending before the Court:
• 	Defendant Chong IU Phu’s Motion to Strike Prejudicial Surplusage [Doc. No. 89]
• 	Defendant Chanh “Shawn” IU Phu’s Motion to Strike Surplus language from the
Indictment [Doc. No. 80]
• 	Defendant Stacy’s Motion to Dismiss as 21 U.S.C. §§ 841 and 856 are Void for
Vagueness as Applied Here [Doc. No. 82]
• 	Defendant Stacy’s Motion to Dismiss for Failure to Plea Necessary Mens Rea
Element [Doc. No. 83]
• 	Defendant Stacy’s Motion to Dismiss for Improper Classification of Marijuana
Under the Controlled Substances Act [Doc. No. 84]
• 	Defendant Chanh “Shawn” IU Phu’s Motion to Dismiss Indictment as Oklahoma’s
Residency Requirements in Marijuana Grow Ownership is Unconstitutional Under
the Dormant Commerce Clause [Doc. No. 92]
• 	Defendant Stacy’s Motion to Dismiss Under the Commerce Clause [Doc. No. 85]
• 	Defendant Chong IU Phu’s Motion for a Bill of Particulars [Doc. No. 88]
• 	Defendant Chanh “Shawn” IU Phu’s Motion for Change of Venue Due to Negative
and Biased Publicity and Publicized Racial Comments of Oklahoma Governor
Kevin Stitt and Other(s) of Chinese or Asian Descent [Doc. No. 93]
A hearing was held on September 24, 2024 regarding Defendant Shawn Phu’s Motion to
Dismiss 	Indictment 	as 	Oklahoma’s 	Residency 	Requirements 	in 	Marijuana 	Grow
Ownership is Unconstitutional Under the Dormant Commerce Clause and the parties
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submitted supplemental briefing [Doc. Nos. 130, 135, 141, 142, 152]. Each of these
motions is now fully briefed and at issue.1
BACKGROUND
Defendants stand charged by the grand jury in an eight count Indictment with
marijuana related offenses. Broadly speaking, Count 1 alleges that Mr. Stacy and Mr. Alex
Phu2 conspired to help non-resident marijuana traffickers evade the residency requirements
in Oklahoma’s medical marijuana laws. The conspiracy purportedly involved Mr. Alex
Phu, a real estate agent, brokering land sales for non-residents to use as marijuana grow
operations. Mr. Stacy, an attorney, would then allegedly assist the non-residents with
obtaining a state license and registration to grow marijuana by identifying an Oklahoma
resident as the owner on the license application. The Indictment describes the marijuana
grows established by Mr. Alex Phu and Mr. Stacy as operating on the black market and
outside the regulatory confines of Oklahoma’s medical marijuana program.
Count 3 alleges a separate drug conspiracy between Mr. Alex Phu and his brother,
Mr. Shawn Phu. The Indictment asserts that Mr. Alex Phu, with the assistance of Mr.
Shawn Phu, brokered land sales for non-residents, directed his employees to instruct the
1 Defendants have each filed motions seeking to join in motions filed by their co-
defendants. See Defendant Chong Phu’s Motion to Join and Adopt Motions filed by Co-
Defendants [Doc. No. 94]; Defendant Chanh Phu’s Motion for Joinder to Co-Defendants’
Motions [Doc. No. 96]; Defendant Chong Phu’s Motion to Join [Doc. No. 141]; and
Defendant Stacy’s Motion to Join [Doc. No. 142]. These motions are granted for the limited
purpose of allowing the defendant to join in their co-defendant’s motion.
2 The Court refers to Defendants Chong Phu and Chanh Phu by their preferred names, Alex
Phu and Shawn Phu.
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non-citizen buyers to find an individual with legal status under whose name to place the
land, rented properties to drug traffickers, and provided services such as electrical and
HVAC work to ensure the marijuana farms remained operational.
In addition to these conspiracy allegations, the Indictment alleges that Mr. Stacy
maintained a drug involved premises (Count 2), Mr. Alex Phu maintained a drug involved
premises (Counts 4, 5, 7, 8), and Mr. Shawn Phu possessed marijuana with intent to
distribute (Count 6). The various motions that are at issue are addressed separately below.
DISCUSSION
A. Motion for Bill of Particulars
Defendant Alex Phu seeks a Bill of Particulars as to counts 1 and 3 of the Indictment,
which each allege a drug conspiracy. Mr. Alex Phu contends the alleged conspiracies
overlap and the government should therefore be ordered to identify the specifics acts and
coconspirators that distinguish the conspiracies. The United States contends the Indictment
is sufficiently detailed and further represents that the information sought will be produced
in discovery.
Rule 7(c)(1) of the Federal Rules of Criminal Procedure provides that an Indictment
“must be a plain, concise, and definite written statement of the essential facts constituting
the offense charged[.]” If a defendant believes an Indictment is insufficient, he may move
for a bill of particulars under Fed.R.Crim.P. 7(f). As explained in United States v. Ivy, 83
F.3d 1266, 1281 (10th Cir. 1996),
[t]he purpose of a bill of particulars is to inform the defendant of the charge
against him with sufficient precision to allow him to prepare his defense. A
bill of particulars is not necessary if the indictment sets forth the elements of
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the offense charged and sufficiently apprised the defendant of the charges to
enable him to prepare for trial. The defendant is not entitled to notice of all
of the evidence the government intends to produce, but only the theory of the
government’s case.
(internal quotation marks, citations and brackets omitted).
The Indictment in this case is sufficiently precise to inform Defendant of the charges
against him and allow him to prepare his defense. Counts 1 and 3 each respectively set out
the essential elements of the offense charged and describe the alleged scheme underlying
the conspiracy. Although Mr. Alex Phu complains the Indictment does not identify the
separate overt acts supporting each conspiracy charge or the unnamed coconspirators, there
is more than enough detail in the Indictment to apprise Defendants of the government’s
theory of the case and to allow them to meet the charges. See United States v. Miller, 250
F.R.D. 588, 600 (D. Kan. 2008) (explaining that an Indictment needed not “identity of all
participants in the conspiracy” or “the specific terms of the conspiratorial agreement”);
United States v. Welch, 198 F.R.D. 545, 551 (D. Utah 2001) (“There is no indication of
any substantive need for the identity of the unidentified coconspirators for any substantive
purpose of meeting the charge or presenting a defense.”). Mr. Alex Phu’s request is more
geared toward discovering evidentiary detail, which is not the purpose of a Bill of
Particulars. See Dunn, 841 F.2d at 1028 (“A bill of particulars, however, is not a discovery
device[.]”).
Defendant Chong IU Phu’s Motion for a Bill of Particulars [Doc. No. 88] is therefore
DENIED.
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B. Motions to Strike Surplusage
Defendants Alex Phu and Shawn Phu both move to strike language from the
Indictment that they describe as irrelevant, confusing, or prejudicial. Federal Rule of
Criminal Procedure 7(d) provides that a court may, upon motion by a defendant, strike
surplusage from the Indictment. The rule grants district courts discretion to strike
“allegations not relevant to the charge at issue and inflammatory and prejudicial to the
defendant.” United States v. Collins, 920 F.2d 619, 631 (10th Cir. 1990). “Courts rarely
strike portions of the indictment as surplusage, and a proper instruction to the jury
ordinarily can alleviate the potential prejudicial effect of contested allegations in the
indictment.” United States v. Daniels, 159 F. Supp. 2d 1285, 1300 (D. Kan. 2001) (internal
quotation marks and citations omitted).
Mr. Shawn Phu and Mr. Alex Phu both take issue with the Indictment’s inclusion
of certain terms and phrases that they contend are immaterial and inflammatory, including
“black market”, “one stop shop for marijuana traffickers”, “regularly” brokered land sales,
“armed” security guards, “trafficker clients”, and “marijuana stash house”. These terms are
used to explain how the alleged conspiracy operated and why the charged conduct was
unlawful. The terms are therefore at least minimally relevant to the crimes charged and,
moreover, none of them are so inflammatory as to risk unduly prejudicing Defendants.
Mr. Shawn Phu next moves to strike from Count 3 the phrase “from in or about
August 2019” as confusing given the introductory section’s reference to changes to
Oklahoma’s licensing requirements that occurred on August 31, 2019. His argument is
premised on his belief that the Indictment suggests that his activities were lawful prior to
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the August 31, 2019 change in Oklahoma law. However, as the government explains in its
response, this paragraph provides context and explanation for how Defendants modified
their activities following the August 31, 2019 change and does not state that the conduct
was lawful prior to that date.
Mr. Shawn Phu also moves to strike portions of the introductory section of the
Indictment that he believes incorrectly imply that land ownership by non-citizens is
prohibited in Oklahoma. This argument is unpersuasive given that the Indictment describes
Oklahoma’s residency requirements for obtaining a license to grow marijuana, not the
requirements for land ownership by non-citizens. He also moves to strike two paragraphs
from the introductory section because they make no reference to him and discuss only his
co-defendants. These paragraphs provide information necessary to understand the roles the
various defendants played in the alleged conspiracies and is not immaterial to the charges
against Mr. Shawn Phu.
Mr. Alex Phu also seeks to strike portions of the introductory section that describe
the problems affecting Oklahoma’s medical marijuana program. Apart from providing
important 	context, 	this 	paragraph 	describes 	the 	scheme 	that 	underlies 	the 	alleged
conspiracy and is therefore not unrelated or immaterial to the charges.
Mr. Shawn Phu and Mr. Alex Phu both seek to strike phrases and references to
speaking Mandarin or to assisting clients that did not speak English, contending that these
references are inflammatory and risk prejudicing the jury based on Defendants’ nationality.
These limited references to speaking another language are not inflammatory and again,
provide relevant information about how the alleged conspiracy operated.
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Defendant Chanh “Shawn” IU Phu’s Motion to Strike Surplus Language from the
Indictment [Doc. No. 80] and Defendant Chong IU Phu’s Motion to Strike Prejudicial
Surplusage [Doc. No. 89] are therefore DENIED.
C. Motion to Change Venue
Defendant Shawn Phu moves for a change of venue on the ground that he is unable
to obtain a fair trial due to inflammatory publicity concerning Chinese nationals in the
marijuana industry.
The Sixth Amendment guarantees an accused the right to a trial by “an impartial
jury” and the Fifth Amendment ensures no person shall “be deprived of life, liberty, or
property, without due process of law.” Accordingly, Federal Rule of Criminal Procedure
21(a) requires a change of venue “if the court is satisfied that so great a prejudice against
the defendant exists in the transferring district that the defendant cannot obtain a fair and
impartial trial there.” This standard is difficult to meet, particular where the court is asked
to presume prejudice on the basis of pretrial publicity. Indeed, “[t]he Supreme Court has
presumed prejudice from pretrial publicity alone only in exceptional settings—where the
trial became ‘a hollow formality’ or when the courthouse proceedings were overrun by the
press ‘to accommodate the public appetite for carnival.” Gardner v. Galetka, 568 F.3d 862,
888 (10th Cir. 2009) (internal quotation marks and citations omitted). Thus, “[s]imply
showing that all the jurors knew about the case and that there was extensive pretrial
publicity will not suffice.” Id. (quotation omitted). Put another way, “[p]rominence does
not necessarily produce prejudice, and juror impartiality…does not require ignorance.”
Skilling v. United States, 561 U.S. 358, 381 (2010).
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Although Mr. Shawn Phu highlights some negative public comments about Chinese
nationals purchasing land in Oklahoma, he has failed to show that these types of comments
are pervasive or that they are directed at his specific case. He makes no showing that this
is one of those extraordinary cases where pretrial publicity is so widespread and toxic as to
deprive him of a fair and impartial jury. Further, despite his protestations to the contrary,
there is nothing to suggest that the Court’s voir dire process is inadequate to raise these
issues and ensure the impartiality of the jury panel. See United States v. Pedrazza, 27 F.3d
1515, 1525 (10th Cir.1994) (“Whether a jury harbors prejudice related to pretrial publicity
is best determined during voir dire examination.”).
Defendant Chanh “Shawn” IU Phu’s Motion for Change of Venue Due to Negative
and Biased Publicity and Publicized Racial Comments of Oklahoma Governor Kevin Stitt
and Other(s) of Chinese or Asian Descent [Doc. No. 93] is therefore DENIED without
prejudice.
D. Motion to Dismiss Under the Commerce Clause
Mr. Stacy moves to dismiss the Indictment on the ground that the federal prohibition
on the intrastate manufacture and distribution of marijuana is no longer a necessary or
proper exercise of Congress’ power under the Commerce Clause. This argument is
foreclosed by the Supreme Court’s decision in Gonzales v. Raich, 545 U.S. 1 (2005), which
held that the prohibition on the local cultivation and use of medical marijuana is within
Congress’ Commerce Clause authority.
Defendant Stacy’s Motion to Dismiss Under the Commerce Clause [Doc. No. 85]
is therefore DENIED.
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E. Motion to Dismiss for Failure to Plead Necessary Mens Rea Element
Mr. Stacy moves to dismiss the Indictment on the ground that a federal prosecution
under the Controlled Substances Act requires proof that the defendant knowingly and
intentionally violated his state’s laws governing medical marijuana. Mr. Stacy’s argument
relies on a combination of the Supreme Court’s holding in Ruan v. United States, 597 U.S.
450 (2022), and Congress’ repeated enactment of an appropriations Rider knows as the
Rohrabacher-Farr Amendment. However, neither Ruan nor the appropriations rider compel
the outcome Mr. Stacy seeks.
Mr. Stacy’s argument starts with Ruan, 597 U.S. at 454, a consolidated case that
addressed the prosecution of two doctors for unlawfully dispensing and distributing drugs
in violation of § 841 of the Controlled Substances Act. Section 841(a) “makes it a federal
crime, ‘[e]xcept as authorized[,] ... for any person knowingly or intentionally ... to
manufacture, distribute, or dispense ... a controlled substance,’ such as opioids.” Id.
(quoting 21 U.S.C. § 841(a)) (brackets and emphasis in Ruan). Relying on the “except as
authorized” language contained in the statute, the doctors argued that their conduct was
lawful because the drugs were dispensed pursuant to a valid prescription. Id. at 455. The
question presented to the Supreme Court was whether the “knowingly or intentionally”
state of mind contained in § 841 also applied to the phrase “[e]xcept as authorized.” Id. at
454.
The Supreme Court found that it did. In reaching this conclusion, the Court first
noted that, given the presumption that Congress intends to require a defendant to possess a
culpable mental state, a statute’s general scienter requirement may be interpreted as
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modifying “not only the words directly following it, but also those other statutory terms
that ‘separate wrongful from innocent acts.’” Id. at 458 (quoting Rehaif v. United States,
588 U.S. 225, 232 (2019)). The Court then applied this principle to the Controlled
Substances Act:
Section 	841 	contains 	a 	general 	scienter 	provision—“knowingly 	or
intentionally.” And in § 841 prosecutions, a lack of authorization is often
what separates wrongfulness from innocence. Defendants who produce
evidence that they are “authorized” to dispense controlled substances are
often doctors dispensing drugs via prescription. We normally would not view
such dispensations as inherently illegitimate; we expect, and indeed usually
want, doctors to prescribe the medications that their patients need. In § 841
prosecutions, then, it is the fact that the doctor issued an unauthorized
prescription that renders his or her conduct wrongful, not the fact of the
dispensation itself. In other words, authorization plays a “crucial” role in
separating innocent conduct—and, in the case of doctors, socially beneficial
conduct—from 	wrongful 	conduct. 	Applying 	§ 	841’s 	“knowingly 	or
intentionally” mens rea to the authorization clause thus “helps advance the
purpose of scienter, for it helps to separate wrongful from innocent acts.”
Id. at 458-59 (internal citations omitted). The Court also noted that the severe penalties that
accompany a § 841 violation and the ambiguous regulatory language defining an
authorized prescription “counsel in favor of a strong scienter requirement.” Id. at 459-460.
Mr. Stacy analogizes his case to the facts in Ruan to argue that § 841’s knowingly
and intentionally mens rea should also apply to the issue of whether his conduct was
authorized by state law. As Mr. Stacy frames it, the crucial fact that separates wrongful
conduct from innocent behavior is whether he was acting in compliance with Oklahoma’s
state medical marijuana laws. Further, he argues, the ambiguous regulatory framework
surrounding these state laws, the severe penalties that accompany a violation of § 841, and
the fact that the charged conduct is premised on his work as an attorney providing legal
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advice all weigh in favor of a strong scienter requirement. But there is a crucial difference
between this case and Ruan: the Controlled Substances Act authorizes doctors to prescribe
certain drugs pursuant to a valid prescription whereas no one, including lawyers providing
legal services, are authorized by federal law to possess, manufacture, or distribute
marijuana. See id. at 454-455.
Mr. Stacy recognizes this distinction and does not claim the CSA itself includes a
provision authorizing the charged conduct. Instead, he argues that the Rohrabacher-Farr
Amendment, a congressional appropriations rider that prohibits the Department of Justice
from spending funds to prevent states’ implementation of their own medical marijuana
laws, is the “functional analogue” to the “except as authorized” language contained in
§ 841. By virtue of the successive enactment of this appropriations rider, Mr. Stacy
contends, Congress has expressed its clear intent that a citizen acting in compliance with
state medical marijuana law is authorized to engage in conduct that facially violates the
Controlled Substances Act.
This interpretation of the Rider’s effect on the Controlled Substances Act goes too
far. As explained by the Sixth Circuit in United States v. Trevino, 7 F.4th 414, 427 (6th
Cir. 2021),
[s]ection 538 [the appropriations rider] did not alter the CSA’s substance.
The Supreme Court has said that Congress may amend substantive law in an
appropriations rider, but the rider must do so “clearly.” And “[t]he doctrine
disfavoring repeals by implication ... applies with even greater force when
the claimed repeal rests solely on an Appropriations Act.” Though Section
538 purports to temporarily deny funding for the prosecution of certain
crimes, the rider’s text contains no suggestion that the substantive conduct
prohibited by the CSA has now been made legal. Thus, even if Section 538
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validly denies funding for the prosecution of certain conduct, that conduct
remains criminal nonetheless.
(internal citations omitted). The Ninth Circuit reached the same conclusion about the
limited effect of the appropriations rider:
To be clear, § 542 [the appropriations rider] does not provide immunity from
prosecution 	for 	federal 	marijuana 	offenses. 	The 	CSA 	prohibits 	the
manufacture, distribution, and possession of marijuana. Anyone in any state
who 	possesses, 	distributes, 	or 	manufactures 	marijuana 	for 	medical 	or
recreational purposes (or attempts or conspires to do so) is committing a
federal crime. The federal government can prosecute such offenses for up to
five years after they occur. Congress currently restricts the government from
spending certain funds to prosecute certain individuals. But Congress could
restore funding tomorrow, a year from now, or four years from now, and the
government could then prosecute individuals who committed offenses while
the government lacked funding.
Nor does any state law “legalize” possession, distribution, or manufacture of
marijuana. Under the Supremacy Clause of the Constitution, state laws
cannot permit what federal law prohibits. Thus, while the CSA remains in
effect, states cannot actually authorize the manufacture, distribution, or
possession of marijuana. Such activity remains prohibited by federal law.
United States v. McIntosh, 833 F.3d 1163, 1179 n.5 (9th Cir. 2016) (internal citation
omitted); 	see 	also United 	States 	v. 	Doolin, 	93 	F.4th 	1094, 1096 	(8th 	Cir. 	2024)
(“Preliminarily, we note that, regardless of the laws of any state or any limits on
prosecutorial funding, marijuana possession remains illegal under federal law.”).
Contrary to Mr. Stacy’ position, the Rider does not alter the CSA, make a violation
of state medical marijuana laws a predicate fact to a CSA violation, or otherwise permit
the possession, distribution or manufacture of medical marijuana that complies with state
law. Consequently, there is no basis for extending § 841’s “knowingly or intentionally”
mens rea to the issue of whether Mr. Stacy complied with state law. Although compliance
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with state law may have some bearing on the DOJ’s ability to expend funds on CSA
prosecutions, compliance with state law does not bear on whether a defendant violated the
CSA.
Mr. Stacy’s Motion to Dismiss for Failure to Plea Necessary Mens Rea Element
[Doc. No. 83] is therefore DENIED.
F. Motion to Dismiss as Void for Vagueness
Mr. Stacy moves to dismiss all charges on the ground that sections §§ 841 and 856
of the Controlled Substances Act are void for vagueness as applied to him. As previously
noted, § 841(a)(1) makes it unlawful “for any person knowingly or intentionally--(1) to
manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or
dispense, a controlled substance;” including marijuana. Section 856(a)(2) makes it
unlawful to “manage or control any place, whether permanently or temporarily, either as
an 	owner, 	lessee, 	agent, 	employee, 	occupant, 	or 	mortgagee, 	and 	knowingly 	and
intentionally 	rent, 	lease, 	profit 	from, 	or 	make 	available 	for 	use, 	with 	or 	without
compensation, the place for the purpose of unlawfully manufacturing, storing, distributing,
or using a controlled substance.”
“As generally stated, the void-for-vagueness doctrine requires that a penal statute
define the criminal offense with sufficient definiteness that ordinary people can understand
what conduct is prohibited and in a manner that does not encourage arbitrary and
discriminatory enforcement.” Kolender v. Lawson, 461 U.S. 352, 357 (1983). A statute can
“be impermissibly vague for either of two independent reasons.” Hill v. Colorado, 530
U.S. 703, 732 (2000). First, if it fails to provide fair notice as to the prohibited conduct and
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second, if it authorizes or even encourages arbitrary enforcement. Id. An as-applied
vagueness challenge, like the one raised here, “tests the application of [the statute] to the
facts of a plaintiff’s concrete case.” United States v. Lesh, 107 F.4th 1239, 1246 (10th Cir.
2024). Of course, “[o]ne to whose conduct a statute clearly applies may not successfully
challenge it for vagueness.” United States v. Day, 223 F.3d 1225, 1228 (10th Cir. 2000).
Mr. Stacy argues that applying these statutes in the manner done here – without any
consideration of his knowledge or intent to violate state medical marijuana laws – “clearly
violates the void-for-vagueness doctrine” by failing to provide him fair notice that the
conduct was prohibited and by encouraging arbitrary and discriminatory enforcement. His
argument is essentially that applying the CSA without proof that a defendant knowingly
and intentionally violated state medical marijuana laws creates unconstitutional traps for
the unwary and grants federal prosecutors an impermissible amount of discretion.
To the extent this argument rehashes Mr. Stacy’s contention that a violation of the
CSA requires the government to plead and prove that a defendant knowingly and
intentionally violated state law, the argument is rejected for the reasons already discussed.
To 	the 	extent 	the 	Mr. 	Stacy 	separately 	argues 	that 	application 	of 	the 	CSA 	is
unconstitutionally vague as applied to him, that argument is also rejected.
In support of his vagueness argument, Mr. Stacy makes much of the “contradictory
and unstable state of affairs” that exists with respect to federal marijuana law enforcement.
Standing Akimbo, LLC v. United States, 141 S. Ct. 2236, 2237 (2021) (Thomas, J.
statement respecting denial of certiorari). But even accepting that description of the federal
government’s enforcement approach, it does not render the application of the CSA
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unconstitutionally vague as applied here. The CSA “flatly forbids the intrastate possession,
cultivation, or distribution of marijuana.” Id. “Nothing about this statute is ‘ambiguous’”
and neither Oklahoma’s state medical marijuana laws nor the congressional appropriations
rider renders it otherwise. Trevino, 7 F.4 th at 427.
Mr. Stacy is charged with assisting otherwise unqualified persons with obtaining a
state license to commercially grow marijuana and with knowingly leasing his property to
an unlicensed marijuana farm. This conduct falls squarely within the scope of activities
prohibited by the CSA and “remains prohibited by federal law” regardless of state law or
the Rider. Id.; McIntosh, 833 F.3d at 1179 n.5
Mr. Stacy’s Motion to Dismiss as 21 U.S.C. §§ 841 and 856 are Void for Vagueness
as Applied Here [Doc. No. 82] is therefore DENIED.
G. Motion to Dismiss for Improper Classification of Marijuana Under the
Controlled Substances Act
Defendant Stacy moves to dismiss the Indictment on the ground that marijuana is
improperly classified as a Schedule I controlled substance in the CSA. In making this
argument, he relies heavily on a 2024 notice of proposed rulemaking to reclassify
marijuana as a Schedule III controlled substance.3
The CSA “places controlled substances into five schedules based on three factors:
‘[1] their accepted medical uses, [2] the potential for abuse, and [3] their psychological and
physical effects on the body.’” United States v. Amalfi, 47 F.4th 114, 120 (2d Cir. 2022)
(quoting Gonzales v. Raich, 545 U.S. 1, 13 (2005)). “To fall under Schedule I—the strictest
3 See https://www.dea.gov/sites/default/files/2024-05/Scheduling%20NPRM%20508.pdf.
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schedule—a controlled substance must have (1) ‘a high potential for abuse,’ (2) ‘no
currently accepted medical use in treatment in the United States,’ and (3) ‘a lack of
accepted safety for use of the drug or other substance under medical supervision.’” Id.
(quoting 21 U.S.C. § 812(b)(1)). The CSA also “provides for the periodic updating of
schedules and delegates authority to the Attorney General, after consultation with the
Secretary of Health and Human Services, to add, remove, or transfer substances to, from,
or between 	schedules.” Raich, 545 U.S. at 14-15. Further, “[t]hose seeking to challenge
the government’s scheduling of a controlled substance can file an administrative petition
and, if necessary, obtain review of an adverse determination in a federal circuit court.”
Amalfi, 47 F.4th at 120 (citing 21 U.S.C. § 877). Although “[t]here have been several
attempts to reclassify marijuana through the CSA’s administrative process, … ‘it remains
a Schedule I drug.’” Id. (quoting Raich, 545 U.S. at 15).
Mr. Stacy’s motion identifies three avenues by which the purportedly improper
classification of marijuana leads to dismissal of the charges. First, he contends that
dismissal is warranted because marijuana no longer meets the statutory factors for
classifying a controlled substance as a Schedule I drug. This is not the proper forum for
that type of challenge.4 “The CSA establishes a process for seeking reconsideration of a
4 The Tenth circuit’s decision in United States v. Sullivan, 967 F.2d 370 (10th Cir. 1992)
does not suggest otherwise. In Sullivan, the Tenth Circuit considered whether amphetamine
was properly reclassified from a Schedule III to a Schedule II controlled substance. Id. at
372-73. The specific issue was whether the Secretary of the Department of Health,
Education, and Welfare provided a written scientific and medical evaluation, which is
statutorily required prior to reclassification. Id. The Tenth Circuit found that an adequate
evaluation was provided and the substance was therefore properly reclassified. Id. The
Tenth Circuit did not, however, review the merits of the Secretary’s determination that
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controlled substance’s scheduling based on the CSA’s statutory factors, and that process
requires individuals to file an administrative petition, the denial of which is directly
reviewable in the courts of appeals.” Amalfi, 47 F.4th at 120 (citing 21 U.S.C. §§ 811(a),
877); see also United States v. Forrester, 616 F.3d 929, 937 (9th Cir. 2010) (rejecting
criminal defendant’s argument that ecstasy was improperly classified under Schedule I and
holding 	“that 	substantive 	collateral 	attacks 	on 	permanent 	scheduling 	orders 	are
impermissible in criminal cases where defendants’ sentences will be determined by those
scheduling orders”); United States v. Carlson, 87 F.3d 440, 446 (11th Cir. 1996) (rejecting
defendant’s challenge to scheduling of MDMA and holding that a defendant cannot “make
a collateral attack on a final regulatory decision in a criminal case”); United States v. Young,
No. 3:09-CR-00003, 2009 WL 899671, at *2 (N.D. Ind. Mar. 30, 2009) (“The court lacks
jurisdiction to consider Mr. Young’s challenge to placement of BZP on the list of Schedule
I controlled substances[.]”).
Second, Mr. Stacy argues that marijuana’s Schedule I classification violates the
Fifth Amendment’s Due Process and Equal Protection guarantees. Unlike Mr. Stacy’s
statutory challenge, this constitutional attack on the classification of marijuana is not
necessarily foreclosed by his failure to exhaust administrative remedies under the CSA.
See Amalfi, 47 F.4th at 122. But the argument nevertheless fails on the merits. Where, as
here, “a challenged statute does not implicate suspect or quasi-suspect classifications or
burden fundamental rights,” rational basis review applies. Id. at 124. Mr. Stacy does not
amphetamine met the statutory criteria for listing it as a schedule II controlled substance.
Id.
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dispute that this is the appropriate standard of review, but argues that there is no rational
basis for classifying marijuana as a Schedule I controlled substance. Under rational basis
review, the challenged law is afforded a “strong presumption of validity” and it will be
upheld “if there is any reasonably conceivable state of facts that could provide a rational
basis for the classification.” Heller v. Doe by Doe, 509 U.S. 312, 320 (1993) (quotation
marks and citations omitted). Importantly, “the burden is on the one attacking the
legislative arrangement to negative every conceivable basis which might support it,
whether or not the basis has a foundation in the record.” Id. (brackets, quotation marks, and
citation 	omitted). 	“Thus, 	even 	if 	marijuana’s 	classification 	would 	not 	survive 	an
administrative petition for rescheduling because it fails to meet the statute’s enumerated
criteria, it is not unconstitutional unless there is no conceivable basis for placing marijuana
on the strictest schedule.” Amalfi, 47 F.4th at 125.
As the government notes, there is a long line of cases finding that marijuana’s
classification as a Schedule I controlled substance survives rational basis review, including
the Second Circuit in Amalfi just a little over two years ago. The Court sees no reason to
reach a different conclusion here. Although the recent proposal to reclassify marijuana as
a Schedule III controlled substance certainly lends credence to an argument that marijuana
no longer meets the statutory factors enumerated in the CSA, that is not sufficient to
“negative every conceivable basis” for classifying marijuana in Schedule I. In this regard,
the Court finds the reasoning in United States v. Green, 222 F. Supp. 3d 267, 279
(W.D.N.Y. 2016), aff'd sub nom. United States v. Amalfi, 47 F.4th 114 (2d Cir. 2022),
persuasive:
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Even if there is a legitimate medical purpose associated with marijuana,
under the rational basis standard of review, there are numerous conceivable
public health and safety grounds that could justify Congress’s and the DEA's
continued regulation of marijuana as a Schedule I controlled substance.
Under no reasonable view of the facts could it be concluded that it is
irrational for Congress to continue to regulate marijuana in the manner which
it has, and for the DEA to continue to adhere to a Schedule I classification
for marijuana.
Because the classification survives rational basis review, Mr. Stacy’s equal protection and
due process claim is rejected.
In a final attempt to dismiss the charges based on marijuana’s Schedule I
classification, Mr. Stacy asks the Court to exercise its equitable powers to foreclose the
prosecution based on what he describes as the government’s clearly contradictory
positions. See United States v. Stevens, 119 F. App'x 222, 226 (10th Cir. 2004) (“The
doctrine of judicial estoppel bars a party from adopting inconsistent positions in the same
or related litigation.”) (brackets and quotation marks omitted). More specifically, he argues
that prosecuting this case based on a Schedule I classification contradicts the position taken
by the Attorney General in its proposal to reclassify marijuana. The problem with this
argument, as the Court see it, is that the government has consistently maintained in this
proceeding that marijuana is properly classified as a Schedule I controlled substance. The
possible prospective reclassification of marijuana does not undermine this position or
otherwise compromise the integrity of the judicial process such that application of the
judicial estoppel doctrine is appropriate in this case.
Defendant Stacy’s Motion to Dismiss for Improper Classification of Marijuana
Under the Controlled Substances Act [Doc. No. 84] is therefore DENIED.
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H. Dormant Commerce Clause
Last, Mr. Shawn Phu moves to dismiss the Indictment on the ground that
Oklahoma’s residency requirements for marijuana grow ownership violate the dormant
Commerce Clause.
The Commerce Clause, which grants Congress the power to regulate commerce
among the states, has long been interpreted to “prohibit state laws that unduly restrict
interstate commerce.” Tennessee Wine & Spirits Retailers Ass'n v. Thomas, 588 U.S. 504,
514 (2019). “This ‘negative’ aspect of the Commerce Clause,” generally known as the
dormant 	Commerce 	Clause, 	“prohibits 	economic 	protectionism—that 	is, 	regulatory
measures designed to benefit in-state economic interests by burdening out-of-state
competitors.” New Energy Co. of Indiana v. Limbach, 486 U.S. 269 (1988). Under the
dormant Commerce Clause, “state statutes that clearly discriminate against interstate
commerce are routinely struck down, unless the discrimination is demonstrably justified
by a valid factor unrelated to economic protectionism.” Id. (internal citations omitted).
Oklahoma’s medical marijuana laws contain restrictions on a non-resident’s ability
to obtain a medical marijuana business license. See Okla. Stat. tit. 63, § 427.14. Mr. Shawn
Phu contends that these residency restrictions plainly discriminate against non-residents
and therefore violate the dormant Commerce Clause. Mr. Shawn Phu further posits that the
validity of this state law is relevant to this prosecution of a federal crime because the
essence 	of 	the 	government’s 	case 	concerns 	defendants’ 	alleged 	attempts 	to 	evade
Oklahoma’s residency requirements. Mr. Alex Phu and Mr. Stacy join in these arguments
and further argue that, in light of the appropriations rider restricting the DOJ from spending
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funds to prosecute actions taken in compliance with state law, a finding that the residency
restrictions are unconstitutional would preclude the government from prosecuting the
defendants for alleged violations of the residency restrictions.
Whatever the merits of Defendants’ attack on the constitutionality of Oklahoma’s
state medical marijuana laws, this is not the correct proceeding to adjudicate that claim. As
the Supreme Court stated in Dennis v. United States, 384 U.S. 855, 867 (1966), there are
“appropriate and inappropriate ways to challenge acts of government thought to be
unconstitutional.” A criminal defendant’s collateral attack on a statutory scheme that he is
charged with deliberately circumventing falls into the latter category.
In Dennis, the defendants were convicted of 	conspiring to fraudulently obtain
government services “by filing false affidavits in purported satisfaction of the requirements
of s 9(h) of the National Labor Relations Act.” Id. at 857. Section 9(h), which was later
repealed, required affidavits attesting that applicants were not members of the Communist
Party. Id. at 857-58. On appeal, defendants sought to overturn their convictions by arguing
that Section 9(h) was unconstitutional. The Supreme Court rejected this argument:
It is no defense to a charge based upon this sort of enterprise that the statutory
scheme sought to be evaded is somehow defective. Ample opportunities exist
in this country to seek and obtain judicial protection. There is no reason for
this Court to consider the constitutionality of a statute at the behest of
petitioners who have been indicted for conspiracy by means of falsehood and
deceit to circumvent the law which they now seek to challenge.
Id. at 866 (footnote omitted). The Supreme Court was also unpersuaded by the defendants’
argument that their case was somehow unique because the constitutional challenge went to
the propriety of the very question they were accused of falsely answering:
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The governing principle is that a claim of unconstitutionality will not be
heard to excuse a voluntary, deliberate and calculated course of fraud and
deceit. One who elects such a course as a means of self-help may not escape
the consequences by urging that his conduct be excused because the statute
which he sought to evade is unconstitutional. This is a prosecution directed
at petitioners’ fraud. It is not an action to enforce the statute claimed to be
unconstitutional.
Id. at 867.
Dennis’ “governing principle” was recently applied in United States v. Holden, 70
F.4th 1015, 1016 (7th Cir.), cert. denied, 144 S. Ct. 400 (2023). There, the defendant was
charged with knowingly making a false statement that was likely to deceive a firearms
dealer regarding a fact that was material to the lawfulness of the sale in violation of 18
U.S.C. § 922(a)(6). The defendant’s false statement – that he was not under indictment for
any felony – was material to the lawfulness of the sale because § 922(n) makes it a crime
to purchase a firearm while under indictment for a felony. Id. Relying in part on Dennis,
the Seventh Circuit held that “[t]his is not the proceeding…in which to adjudicate a
contention that any particular application of § 922(n) violates the Second Amendment.” Id.
at 1018. Rather, “[s]omeone who wants a court to take such a step should file a declaratory-
judgment action rather than tell a lie in an effort to evade detection that the sale would
violate the statute.” Id. at 1017.
The Second Circuit similarly relied on Dennis in rejecting a criminal defendant’s
ability to collaterally attack an administrative regulation. In United States v. Stewart, 590
F.3d 93, 111 (2d Cir. 2009), the defendant (an attorney) was charged with conspiring to
defraud and obstruct the government in the enforcement of “special administrative
measures” that restricted her client (who was incarcerated) from communicating with
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persons outside the prison. The defendant argued that the special administrative measures
were invalid for multiple reasons, but the Second Circuit found that the “strategy of
collaterally attacking the validity of the SAMs [was] futile” because the prosecution was
directed at the defendant’s fraud and was “not an action to enforce the [law] claimed to be
unconstitutional.” Id. (internal quotation marks omitted).
Here, the prosecution is directed at Defendants’ alleged conspiracy to manufacture
and distribute marijuana; it is not an action to enforce Oklahoma’s state medical marijuana
laws. Accordingly, consistent with Dennis and its progeny, Defendants’ collateral attack
on Oklahoma’s state statutory scheme is not appropriately raised in this proceeding.
Defendants attempt to side step Dennis by noting that it concerned conspiratorial
false statements and is generally applied in cases that explicitly charge a defrauding
offense. While a charge of fraud or false statement may be the most likely context in which
Dennis’ holding will apply, that does not mean Dennis is necessarily inapplicable in any
other type of case. Moreover, the Indictment describes the alleged conspiracies as including
fraudulent acts and the making of false statements in an attempt to evade the residency
requirements. Thus, as in Dennis, the allegations describe “an effort to circumvent the law
and not to challenge it.” Id. 865. In that situation, a criminal defendant is “in no position to
attack the constitutionality” of the underlying statute. Id. at 865.
Finally, it bears reiterating that the manufacture, distribution, or possession of
marijuana “remains prohibited by federal law” regardless of state law. McIntosh, 833 F.3d
1163, 1179 n.5 (9th Cir. 2016). Thus, even if Oklahoma’s residency requirements were
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declared invalid, that would not render Defendants conduct somehow compliant with
federal law.
Defendant Chanh “Shawn” Phu’s Motion to Dismiss Indictment as Oklahoma’s
Residency Requirement in Marijuana Grow Ownership is Unconstitutional Under the
Dormant Commerce Clause [Doc. No. 92] is therefore DENIED.
CONCLUSION
As set out above, the following motions are denied: Defendant Chanh “Shawn” IU
Phu’s Motion to Strike Surplus language from the Indictment [Doc. No. 80]; Defendant
Stacy’s Motion to Dismiss as 21 U.S.C. §§ 841 and 856 are Void for Vagueness as Applied
Here [Doc. No. 82]; Defendant Stacy’s Motion to Dismiss for Failure to Plea Necessary
Mens Rea Element [Doc. No. 83]; Defendant Stacy’s Motion to Dismiss for Improper
Classification of Marijuana Under the Controlled Substances Act [Doc. No. 84]; Defendant
Stacy’s Motion to Dismiss Under the Commerce Clause [Doc. No. 85]; Defendant Chong
IU Phu’s Motion for a Bill of Particulars [Doc. No. 88]; Defendant Chong IU Phu’s Motion
to Strike Prejudicial Surplusage [Doc. No. 89]; Defendant Chanh “Shawn” IU Phu’s
Motion to Dismiss Indictment as Oklahoma’s Residency Requirements in Marijuana Grow
Ownership is Unconstitutional Under the Dormant Commerce Clause [Doc. No. 92]; and
Defendant Chanh “Shawn” IU Phu’s Motion for Change of Venue Due to Negative and
Biased Publicity and Publicized Racial Comments of Oklahoma Governor Kevin Stitt and
Other(s) of Chinese or Asian Descent [Doc. No. 93].
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IT IS SO ORDERED this 27 th day of February, 2025.
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