Friday, February 07, 2014

Evidence of “Gray Market” Excluded

US v. Zayyad:  Awni Zayyad received several felony convictions in connection with his sales of counterfeit prescription drugs (more specifically, erectile dysfunctions drugs that looked like Viagra and Cialis).  On appeal, Mr. Zayyad mounts two related evidentiary challenges, that the district court erred in excluding evidence of the “gray market” for prescription pills, and that the Government did not establish that he knew the pills he peddled were fakes.

At Mr. Zayyad’s first trial, which ended in a deadlock, the district court permitted Mr. Zayyad to suggest through cross-examination of Government witnesses from pharmaceutical companies, that he believed he obtained the drugs from the “gray market,” inferring that the pills were real; the trial ended in with a mistrial.  The Government filed a superseding indictment, and moved to exclude and evidence of the “gray market,” as it would only be relevant if the defendant testified about his state of mind, i.e., that he believed the pills he sold were genuine.  The district court granted the motion under F.R.E. 401 and 403, holding that there was no evidence that showed Mr. Zayyad had any genuine pills, and that confusion of the issue, misleading the jury, and wasting time would overwhelm the probative value of the evidence; Mr. Zayyad did not take the stand.  The jury convicted Mr. Zayyad after the second trial.

On appeal, the Fourth Circuit panel noted that Mr. Zayyad had the option of testifying, and he could have introduced evidence of a “gray market” but he chose not to take the stand to justify his actions.  The panel stated that it considered the district court’s order as an appropriate limit on Mr. Zayyad’s right to cross-examine, since the ruling did not interfere with the right of the defendant to elect not to testify at trial.  Further, the panel determined that it was unlikely that Mr. Zayyad preserved his appeal issues because he failed to raise an argument that the contested evidence went to show his knowledge that the pills were "gray market" items.

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