## Facts

- Lindley T. Geborde manufactured a homemade version of gamma hydroxybutyrate (GHB) and gave it to several teenagers without charging money.
- One teenager died after ingesting the substance.
- At the time of the conduct, GHB was not a controlled substance under federal controlled-substances laws.
- Federal prosecutors charged Geborde under the Federal Food, Drug, and Cosmetic Act (FDCA) rather than federal drug-trafficking statutes.
- Geborde had also been convicted in state court of manslaughter and sentenced to prison based on the same events.
- In federal court, Geborde was convicted of (1) operating an unregistered drug-manufacturing establishment with intent to defraud or mislead, and (2) multiple counts of misbranding based on misbranding “while held for sale after shipment in interstate commerce.”

## Issues

1. Whether sufficient evidence supported felony punishment for failure to register a drug-manufacturing establishment, requiring proof the failure to register was committed “with the intent to defraud or mislead.”
2. Whether misbranding under 21 U.S.C. § 331(k) was proven when the drug was given away in a purely noncommercial setting, given the requirement that the drug be “held for sale.”

## Decision

- The Ninth Circuit reversed the felony conviction and sentence on Count One and remanded with instructions to enter judgment for misdemeanor failure to register and to resentence accordingly.
- The court held the government failed to prove that Geborde’s failure to register itself was committed with intent to defraud or mislead.
- The Ninth Circuit reversed the convictions on Counts Two through Eight.
- The court held the government failed to prove the misbranding element that the drug was “held for sale,” because gratuitous, noncommercial distribution is not “held for sale” under § 331(k).

## Legal Principles

- Under 21 U.S.C. § 333(a)(2), the “intent to defraud or mislead” element that elevates an FDCA offense to a felony must relate to the specific FDCA violation charged; generalized wrongdoing is insufficient.
- A § 331(p) failure-to-register violation is a misdemeanor unless the government proves the failure to register was committed with intent to defraud or mislead.
- Misbranding liability under 21 U.S.C. § 331(k) requires proof that the drug was “held for sale after shipment in interstate commerce.”
- Drugs manufactured and distributed gratuitously in a noncommercial setting are not “held for sale” for purposes of § 331(k).

## Conclusion

The Ninth Circuit limited FDCA felony enhancement to cases where fraudulent intent is tied to the charged registration violation and rejected misbranding convictions where the government could not show the drug was “held for sale,” reversing most convictions and reducing the remaining count to a misdemeanor.


United States v. Geborde, 278 F.3d 926 (9th Cir. 2002)