Question

In Direct Sales Co. v. United States,[i] discussed in the Lauria case, the conviction of a wholesale drug company for conspiracy to violate the narcotic laws by selling large quantities of drugs to a physician who was supplying addicts was upheld by the Supreme Court. The Lauria court distinguished Direct Sales case from United States v. Falcone,[ii] in which the sellers of large quantities of sugar, yeast, and cans were absolved from participation in a moonshining conspiracy. What do you see as the critical distinctions between these two cases that explains the different outcomes in the two cases? Suppose Mr. Lauria provided answering services to a marijuana dealer with the knowledge that his service was taking messages for such a drug dealer. Given your reading of the Lauria case, and its summary of Direct Sales and Falcone, what would you predict the outcome of such a case to be? Why? Would your response change if the dealer were selling crack cocaine? Why or why not?

Answer 1

Answer.

The two leading cases under consideration point us in opposite directions in the matter of convictions about the unlawful supply of a service or goods. In United States v. Falcone, 311 U.S. 205 [85 L. Ed. 128, 61 S. Ct. 204], the sellers of large quantities of sugar, yeast, and cans were absolved from participation in a moonshining conspiracy among distillers who bought from them, while in Direct Sales Co. v. United States, 319 U.S. 703 [87 L. Ed. 1674, 63 S. Ct. 1265], a pharmaceutical wholesaler was convicted of conspiracy to violate the federal narcotic laws by selling drugs in quantity to a physician who in turn supplied them to drug addicts. The difference between these two [251 Cal. App. 2d 476]cases is primarily based on the fact that distributors of such dangerous products as drugs are required to exercise greater discrimination in the conduct of their business than are distributors of more safely consumed substances like sugar and yeast.

Both the cases provide us with a framework for evaluating the criminal liability of a supplier of lawful goods or services put to unlawful use. Moroever, a judgement of conviction in the Direct Sales Co. vs United States was made after considering two criteria- the element of knowledge of the illegal use of the goods or services and the element of intent.

In the earlier case of Falcone, the sellers' knowledge of the illegal use of the goods was insufficient by itself to make the sellers participants in a conspiracy with the distillers who bought from them. Since proof of a conspiracy could not be made, the jury concluded against the prosecutor’s claim that the respondents knew of the conspiracy from the size of the sales alone.