[00:00:00] Speaker 03:
Let's go ahead and get started with USA versus Reed.

[00:00:03] Speaker 03:
Each side will have 15 minutes.

[00:00:06] Speaker 03:
If appellants would like to reserve time for rebuttal, please be aware that you are responsible for keeping track of your time.

[00:00:13] Speaker 03:
Ms.

[00:00:14] Speaker 03:
Zink, good morning and welcome.

[00:00:17] Speaker 03:
You may begin when you're ready.

[00:00:18] Speaker 01:
Good morning, Your Honors.

[00:00:19] Speaker 01:
Marla Zink on behalf of Richard Reed.

[00:00:21] Speaker 01:
I will endeavor to reserve five minutes for rebuttal, and I'd like to speak this morning on both issues, both the insufficiency of the evidence and the unconstitutionality of the sentencing condition.

[00:00:32] Speaker 01:
With regard to the insufficiency of the evidence, the government here charged Mr. Reed under the anti-kickback statute.

[00:00:38] Speaker 01:
This required the government to prove that Reed and or the lab NWPL solicited or received kickbacks for referral of testing specimens covered by government healthcare programs.

[00:00:51] Speaker 01:
This is otherwise known as the remuneration element.

[00:00:54] Speaker 01:
Taking all reasonable inferences in the prosecution's favor, the evidence was insufficient and the government failed to prove its case.

[00:01:03] Speaker 01:
Instead, the evidence showed that the parties entered into lawful contracts called ASAs that were safe harbors or not remuneration if fulfilled.

[00:01:12] Speaker 03:
Ms.

[00:01:12] Speaker 03:
Zing, can you please let me know what marketing did NWPL do for the smaller companies, SRL and MTL?

[00:01:20] Speaker 01:
Yeah, absolutely.

[00:01:21] Speaker 01:
The ASA set out very specific and lengthy marketing provisions, and NWPL and Reed fulfilled them all.

[00:01:31] Speaker 01:
It solicited and arranged for and recommended that potential customers utilize Sterling.

[00:01:36] Speaker 01:
It did so in various ways, including packaging and selling an attractive model of one-stop shopping for customers,

[00:01:44] Speaker 01:
so that all specimens could be sent to a single lab to NWPL, and NWPL handled all the shipping and processing services to get those samples that were tested by government healthcare programs to MTL or Sterling.

[00:01:59] Speaker 01:
NWPL and Reed trained a sales force to be able to faithfully execute the terms of the ASA, and they maintained customer rapport in a competitive market, and Reed was specifically sought out for these skills.

[00:02:12] Speaker 05:
Was there proof at trial?

[00:02:14] Speaker 05:
of performance under these agreements?

[00:02:17] Speaker 01:
Yes, and I would refer the court to, I mean, the agreements are lengthy and the provisions of marketing are lengthy, so I won't have time to recite all the pages.

[00:02:27] Speaker 05:
I'm not asking you about the content of the agreement.

[00:02:30] Speaker 05:
Correct.

[00:02:31] Speaker 05:
My question is, what evidence was there before the jury that these contracts were actually performed?

[00:02:38] Speaker 01:
Yes, so that evidence is cited in the reply brief at page three through seven, in the opening brief at, and page seven through 11 for, so the marketing services are at page three through seven, so there's 13 specific provisions for marketing.

[00:02:54] Speaker 01:
And in the reply brief at pages seven through 11, I step through all the other services, so there's 13 other services that were provided.

[00:03:00] Speaker 05:
Probably have not asked this question as carefully as I should have.

[00:03:03] Speaker 05:
Was there evidence before the jury, not of the contents of the agreement, but actual performance under the agreement?

[00:03:13] Speaker 05:
For example, did someone get on the stand and say, yes, I had the benefit of these agreements, and here's what was done for me for the remuneration that I provided?

[00:03:24] Speaker 01:
Yes, absolutely.

[00:03:25] Speaker 01:
And those are cited in those pages that I said.

[00:03:27] Speaker 01:
So, for example, representatives from NWPL met regularly to discuss marketing.

[00:03:33] Speaker 01:
That is at 3ER 414 to 415.

[00:03:37] Speaker 01:
Reed understood well Sterling's business needs and abilities, and he executed a strategy to complement and improve that.

[00:03:44] Speaker 01:
So that's at 3ER 392 through 93.

[00:03:46] Speaker 01:
They met the lab's marketing and sales objectives through promotion programs and field action plans.

[00:03:54] Speaker 01:
You can look at 4ER 632 to 33, 4ER 690 through 91, 10ER 2417, et cetera.

[00:04:03] Speaker 04:
I mean, there's a lot of what I'll say sort of sprinkled

[00:04:07] Speaker 04:
evidence but here of course on the sufficiency of the evidence was pretty high bar as you well understand and it seems like during this time there's a there's a lot of evidence in the record like they never created a marketing company yeah they went to talk to people but they didn't talk for example they might have provided specimens but did they do marketing so it seems to me that

[00:04:32] Speaker 04:
It's not that they might have done a few sprinkled things, but whether the record really supports that the jury could reasonably find that they really didn't live up to the agreements.

[00:04:45] Speaker 04:
For example, one example I'll give you is they created this company to market

[00:04:52] Speaker 04:
RYSE, was that the name of the company?

[00:04:55] Speaker 04:
But did it do anything?

[00:04:57] Speaker 04:
I don't think it ever marketed anything.

[00:04:59] Speaker 04:
So I think the jury is left with a few sprinkled examples, but overwhelmingly,

[00:05:05] Speaker 04:
They just didn't do anything.

[00:05:07] Speaker 04:
So what's your response to that?

[00:05:08] Speaker 01:
Yeah, I respectfully disagree.

[00:05:09] Speaker 01:
So the question comes down to how marketing is defined.

[00:05:13] Speaker 01:
And the anti-kickback statute does not define marketing, but it does provide that there can be a lawful contract, a safe harbor.

[00:05:20] Speaker 01:
And that's what the ASAs were.

[00:05:22] Speaker 01:
And the ASAs very specifically define marketing.

[00:05:24] Speaker 01:
And as marketing is defined in the ASAs, all those terms were fulfilled.

[00:05:29] Speaker 01:
And that comports with the dictionary definition for marketing as well.

[00:05:32] Speaker 01:
So the government puts forth this sense of what marketing should have been, that it should have been Reed and NWPL saying Sterling's name all the time, bringing brochures with them to make sure that they were handed out to every customer, but none of that is in the contract.

[00:05:47] Speaker 01:
So what was required was proof according to the contract.

[00:05:51] Speaker 01:
As the inspector general testified, that contract was lawful if fulfilled.

[00:05:56] Speaker 01:
And the evidence showed that all the terms of the contract were fulfilled.

[00:06:00] Speaker 01:
It is not relevant if Reed or NWPL also didn't do what the government expects from marketing or what the jury might have expected in their lay experience.

[00:06:09] Speaker 01:
What matters is what the elements are and what the contract was.

[00:06:12] Speaker 01:
And the same is true with regard to

[00:06:15] Speaker 01:
evidence that the government tries to put forth, such as the lab guidelines.

[00:06:19] Speaker 01:
So the lab guidelines said that employees shouldn't be talking about a partnership with Sterling in particular, but it did say that they should be talking about a partnership with a lab.

[00:06:30] Speaker 01:
The reasonable inference from that evidence is that there was no unlawfulness in the partnership with the lab.

[00:06:36] Speaker 01:
And employees did, in fact, know about Sterling.

[00:06:40] Speaker 01:
The people that were processing the samples at NWPL were all aware that they were going to Sterling.

[00:06:48] Speaker 01:
There was testimony from Sills, one of the physician customers, that he was aware that there was a relationship with Sterling, not knowing the extent, and the salesperson, Catano, testified the same.

[00:06:58] Speaker 01:
So again, it may not have been in the way that the government expected, but it is in the way that the law requires.

[00:07:03] Speaker 01:
If the court doesn't have further questions on that, I will turn to the... One quick one.

[00:07:12] Speaker 05:
One or more of his co-defendants entered please?

[00:07:16] Speaker 01:
Yes.

[00:07:17] Speaker 01:
Yes, several co-defendants entered please.

[00:07:19] Speaker 01:
He was the only one that went to trial.

[00:07:21] Speaker 05:
Did any of them testify?

[00:07:22] Speaker 01:
No.

[00:07:24] Speaker 05:
Thank you.

[00:07:24] Speaker 05:
Go ahead.

[00:07:25] Speaker 01:
Yes, and just I'll do one more point there and just talk about the volume language that was also this is another example of the government being untethered from the law.

[00:07:33] Speaker 01:
And so the the anti kickback statute prohibits the discussion of or taking volume into account.

[00:07:41] Speaker 01:
for as compensation, but it doesn't prohibit talking about volume and it doesn't prohibit talking with physician customers about who are using private pay models about volume.

[00:07:52] Speaker 01:
So it's very important to look at the terms of the statute and then actually what the evidence says rather than how the government summarizes it.

[00:08:00] Speaker 01:
In regards to standard sentencing condition 10, this condition is a complete ban on weapon ownership, possession, and access intended to imply to everyone on supervised release during the entire period of supervised release after release from imprisonment.

[00:08:16] Speaker 01:
This is a Second Amendment problem as applied to Reed, where his crime relates to health care frauds.

[00:08:21] Speaker 01:
He has no history or present finding of violence or propensity for violence.

[00:08:25] Speaker 03:
Counsel, is Reed making a facial or an as applied or both challenge?

[00:08:30] Speaker 01:
We are challenging it in both regards.

[00:08:32] Speaker 01:
And the court should find it unconstitutional on either or both grounds if it doesn't reverse on the sufficiency of the evidence.

[00:08:38] Speaker 05:
He's now a convicted felon.

[00:08:41] Speaker 01:
That's correct, but it's still subject to... And as a convicted felon, he cannot

[00:08:46] Speaker 05:
Possessed firearms, correct?

[00:08:48] Speaker 01:
So 922G provides restrictions on that.

[00:08:51] Speaker 01:
Those challenges to that wouldn't be ripe and are not before the court in this case.

[00:08:54] Speaker 01:
But that doesn't mean that there can't be a separate challenge to standard sentencing condition 10 and that it is an also subject.

[00:09:02] Speaker 04:
He's still under a sentence so long as he's on the supervised release, correct?

[00:09:06] Speaker 04:
That's right.

[00:09:07] Speaker 04:
And wouldn't that distinguish him from some cases where it's talking about pretrial or other circumstances?

[00:09:14] Speaker 01:
Right.

[00:09:15] Speaker 01:
So each circumstance should be taken by this court in its individual setting.

[00:09:18] Speaker 01:
And in the case of supervised release, there are constitutional rights that are restricted, but none that are completely lost, like the Second Amendment right.

[00:09:28] Speaker 01:
So the Fourth Amendment right might be restricted.

[00:09:30] Speaker 01:
Freedom of travel might be restricted during supervised release.

[00:09:33] Speaker 01:
But this is a total ban on the Second Amendment rights during the entire period of supervised release.

[00:09:39] Speaker 01:
And both the US Sentencing Commission

[00:09:41] Speaker 01:
the guidelines and Wessner District of Washington probation say that this should be imposed on every individual and there was no individualized finding made so there's no finding that it's crime related or necessary to deter or protect the public and so that's still important in the case of a sentencing condition even though it's part of the sentence.

[00:10:00] Speaker 03:
Did Mr. Reed object to the condition of release number 10 while he was in the district court?

[00:10:06] Speaker 01:
He did not and it was not individually discussed at all.

[00:10:09] Speaker 03:
So are we looking at de novo review or plainer?

[00:10:12] Speaker 01:
So this court's precedent has been somewhat complicated on that.

[00:10:17] Speaker 01:
The court has applied both.

[00:10:19] Speaker 01:
The most applicable here should be de novo review because it is a legal challenge to a legal issue and the records fully developed and there's no prejudice to the prosecution.

[00:10:31] Speaker 01:
However, we also carry the case under plain error standard and that's in the briefing as well.

[00:10:36] Speaker 01:
And in terms of the government's burden here, it's their burden to show an historical tradition through founding error analogs that are relevantly similar in both the how and the why.

[00:10:46] Speaker 01:
And in each of the analogs that the government provides, or even those cited in Moore or in Jackson, the supplemental authority cited on Friday, the government fails on the how or the why on every single one of those.

[00:10:58] Speaker 03:
So counsel, is it your position that anytime an individual is convicted of a nonviolent offense,

[00:11:04] Speaker 03:
District Court cannot impose a standard sentencing condition number 10, basically saying you're not allowed to have weapons during the pendency of your probationary period.

[00:11:16] Speaker 01:
Well, I don't think the government has shown a historical tradition of complete dispossession during a period following incarceration while someone's still on a sentence.

[00:11:27] Speaker 01:
So yes, I think that would also apply to violent felons.

[00:11:31] Speaker 01:
But as applied to Reed, who is a nonviolent felon, that absolutely would be the case.

[00:11:37] Speaker 01:
And courts should at least be making an individualized finding as to it.

[00:11:41] Speaker 04:
So if he were a violent felon, is your position that this

[00:11:46] Speaker 04:
supervised release provision would have been constitutional.

[00:11:50] Speaker 01:
No, we are making a facial challenge and I do not believe that the government has shown a historical tradition.

[00:11:57] Speaker 01:
So that needs to be a broad set of laws that were in place at the founding era.

[00:12:03] Speaker 01:
And we know from, we have affirmative evidence of no historic tradition towards even violent felons at the founding era.

[00:12:09] Speaker 01:
This court in Chauvin noted that there had the first federal firearm restrictions for violent offenders wasn't until 1938 in this country.

[00:12:17] Speaker 01:
There's also a UCLA Law Review article in the now vacated Duarte opinion that talks about the fact that there was no law limiting gun possession for people convicted of crimes at all at the founding era.

[00:12:29] Speaker 01:
So we have affirmative evidence of that as well.

[00:12:31] Speaker 04:
Imagine that he was in prison still, and they said you can't have a gun in prison.

[00:12:37] Speaker 04:
Makes total sense, of course.

[00:12:39] Speaker 04:
But what kind of colonial statute would the government have to come up with in order to justify that?

[00:12:46] Speaker 04:
being relevantly similar, for example, under Rahmini.

[00:12:49] Speaker 01:
Right.

[00:12:50] Speaker 01:
So the how and the why would have to be similar.

[00:12:52] Speaker 01:
So the how would be that there would be no possession of firearms or dangerous weapons allowed while someone is held in prison or jail.

[00:12:59] Speaker 01:
There were jails and prisons then.

[00:13:01] Speaker 01:
And also to show that the why was similar.

[00:13:04] Speaker 01:
So presumably the why here is to protect public safety, to deter the conduct to begin with,

[00:13:11] Speaker 01:
and to work towards rehabilitation.

[00:13:12] Speaker 01:
And so those would all have to be present in a tradition that was existing at the founding.

[00:13:16] Speaker 04:
But if those weren't present, and even though the prison says, look, you can't have a gun in here, then I guess it would be unconstitutional to put that prohibition on him, correct?

[00:13:26] Speaker 01:
It could be while incarcerated, but that's not the challenge at issue here, right?

[00:13:29] Speaker 01:
We're talking about post.

[00:13:30] Speaker 04:
But the same analysis applies.

[00:13:32] Speaker 01:
Correct.

[00:13:32] Speaker 01:
That is the Second Amendment analysis.

[00:13:35] Speaker 01:
Thank you, Your Honors.

[00:13:35] Speaker 01:
I'll reserve the remainder.

[00:13:37] Speaker 03:
OK, thank you.

[00:13:38] Speaker 03:
Miss Culberton?

[00:13:40] Speaker 03:
And did I pronounce your name correctly?

[00:13:42] Speaker 03:
Wonderful.

[00:13:50] Speaker 00:
Good morning.

[00:13:51] Speaker 00:
Tanya Culbertson on behalf of the United States.

[00:13:54] Speaker 00:
Viewing the evidence in the light most favorable to the verdict, any rational trial or fact could find here that Reid knowingly and willfully solicited and received kickbacks for referring government samples to Sterling and MTL and that he conspired with others to do so.

[00:14:09] Speaker 00:
Reid argued his defense to the jury that the payments from those outside labs were for marketing and personal services under contracts and so fell within a regulatory safe harbor.

[00:14:20] Speaker 00:
But the government's evidence showed that was not the case.

[00:14:23] Speaker 00:
The jury simply rejected Reid's interpretation of the facts, which he is now trying to re-argue on appeal.

[00:14:30] Speaker 00:
Now, under the anti-kickback statute, referrals only must be one of the purposes of the solicitation or payment.

[00:14:37] Speaker 00:
So it's not a defense that some other services may have been provided to.

[00:14:42] Speaker 00:
That comes from this court's decisions in United States versus Hong and United States versus Katz.

[00:14:48] Speaker 00:
In Katz, which was also a case involving lab specimens, the court said that the statute only requires that one purpose of the payment be to induce future referrals, even if the payments were also intended to compensate for professional services.

[00:15:04] Speaker 00:
I also want to direct the court to the language of the Safe Harbor provision itself.

[00:15:10] Speaker 00:
Under that, Safe Harbor at 42 CFR 1001.952D, it says that to fall within the Safe Harbor, compensation under the contracts must, quote, not be determined in a manner that takes into account the volume or value of any referrals or business otherwise generated.

[00:15:30] Speaker 00:
Now, extensive evidence here show the jury that these ASAs, these contracts, were indeed determined taking into account the volume and value of the samples that Reid's lab was going to send over to Sterling and MTL.

[00:15:44] Speaker 00:
And this court should also look at the evidence of how the contracts were actually implemented.

[00:15:50] Speaker 00:
How the contracts were implemented is relevant

[00:15:52] Speaker 00:
to this inquiry and it supports this understanding because, in truth, very little, if any, marketing of Sterling and MTL was done.

[00:16:00] Speaker 00:
Now, Northwest Physicians Lab went out and marketed itself.

[00:16:04] Speaker 00:
It certainly sent out its own sales force to doctors to recruit them to use the lab.

[00:16:10] Speaker 00:
But salesperson after salesperson testified that they were not trained to discuss sterling or MTL and that that lab guidelines which opposing counsel reference made it a fireable offense to mention the name sterling and then

[00:16:27] Speaker 00:
You have sort of the lies that Reid told to the physicians that he was recruiting and the lies that he told to his own workforce about the existence of these contracts with these outside labs.

[00:16:41] Speaker 00:
So I know we've cited a lot of the evidence in our briefs as to how during negotiations Reid was, you know, certainly taking into account the volume and the value of the samples that Northwest Physicians Lab would be sending over to the outside labs.

[00:16:55] Speaker 00:
And then you have all of the evidence of how the contracts were actually implemented and the lack of marketing.

[00:17:00] Speaker 05:
Anyone from the outside labs under these ASAs testify?

[00:17:06] Speaker 00:
Yes, yes.

[00:17:09] Speaker 00:
Two representatives, I believe at least, from Sterling testified.

[00:17:12] Speaker 00:
I don't believe that the manager of MTL testified.

[00:17:15] Speaker 00:
What did they say?

[00:17:17] Speaker 00:
They said that they didn't have insight into what kind of marketing was being done under the contracts.

[00:17:22] Speaker 00:
They could see that their volume of samples was increasing.

[00:17:25] Speaker 00:
They were receiving samples

[00:17:27] Speaker 00:
from Northwest.

[00:17:28] Speaker 00:
But they said they didn't have insight into how the marketing was done.

[00:17:31] Speaker 00:
And one of the representatives from Sterling said that when he asked to audit the company, he was rebuffed.

[00:17:38] Speaker 00:
That Jay Lee said, no, absolutely not.

[00:17:40] Speaker 00:
You can't do that.

[00:17:41] Speaker 00:
And Reed, in fact, said, please don't reach out to our clients.

[00:17:45] Speaker 00:
These are our clients.

[00:17:46] Speaker 00:
Don't contact them directly.

[00:17:47] Speaker 05:
When Reed solicited samples from physicians,

[00:17:52] Speaker 05:
Did he tell them that his lab couldn't process federally insured patients?

[00:18:01] Speaker 00:
I believe the evidence showed that if he was asked, he would say, you know, we send them to an outside lab, but he would not necessarily mention the names of those outside labs or the arrangement by which that was done.

[00:18:15] Speaker 05:
When he did mention sending federally insured patients samples to outside labs, did he tell them he was being paid for doing that?

[00:18:27] Speaker 00:
He did not know.

[00:18:29] Speaker 00:
In fact, he outright denied that to doctors that asked if there was any kind of financial relationship.

[00:18:35] Speaker 00:
He said, and this is at 5ER 847 to 49, that the lab and its officers and managers had, quote, no direct or indirect financial relationship with Sterling.

[00:18:45] Speaker 00:
He said that the testing of samples did not give a return to the lab's shareholders.

[00:18:50] Speaker 00:
And via attorney opinion letters, he shared that the lab had no financial interest.

[00:18:54] Speaker 00:
His lab had no financial interest in the outside labs.

[00:18:58] Speaker 00:
So we think the evidence here is more than sufficient as to all counts, including the conspiracy count.

[00:19:05] Speaker 00:
If the court has no further questions on sufficiency, I'll turn to the Second Amendment.

[00:19:10] Speaker 00:
Reviews here should be for plain error, as Reed did not object to the firearm condition at sentencing, nor raise any issue about its constitutionality.

[00:19:17] Speaker 00:
Reed's sentencing took place at least six months after Bruin.

[00:19:21] Speaker 00:
So this is not a situation where you have a new decision the day before sentencing.

[00:19:26] Speaker 05:
Is there any evidence

[00:19:29] Speaker 05:
that in the span of Reed's contact within the confines of the indictment, that he brandished a weapon or used a weapon or displayed a weapon?

[00:19:43] Speaker 00:
No, that was not in his offense conduct, the evidence of his offense conduct.

[00:19:48] Speaker 00:
Now, I do want- Did the government ask for this condition?

[00:19:52] Speaker 00:
Probation asked for this condition.

[00:19:54] Speaker 00:
So probation submitted it in its recommended sentence to the court.

[00:19:57] Speaker 00:
They say why?

[00:19:58] Speaker 00:
They did not give, I think, specific reason.

[00:20:03] Speaker 00:
This is a standard condition in this district, right?

[00:20:05] Speaker 00:
This is a standard discretionary condition.

[00:20:08] Speaker 00:
So it's just check, check, check?

[00:20:09] Speaker 00:
That is correct.

[00:20:09] Speaker 00:
But I will tell the court that at 1 ER 24, the district court said, I am adopting probation's recommendations as to all of the conditions.

[00:20:20] Speaker 00:
So it's not that there was nothing in the record indicating that the court thought this condition was appropriate.

[00:20:25] Speaker 00:
The court accepted the recommendation from probation.

[00:20:27] Speaker 00:
And, you know, this is a condition that was imposed.

[00:20:31] Speaker 05:
Other than a checklist, was there anything in the probation report, which you tell us was adopted by the district court, to suggest the reason for imposing this kind of condition on a nonviolent offender?

[00:20:47] Speaker 00:
I don't think there is anything spelled out in particular as to this defendant.

[00:20:51] Speaker 00:
I will say that in general, this condition, there are good reasons for this condition and it makes good sense why probation recommends it for its

[00:20:59] Speaker 00:
felony offenders that supervising somebody on supervised release can be dangerous.

[00:21:05] Speaker 00:
Probation officers make unannounced visits to supervise these houses.

[00:21:10] Speaker 00:
And so I think just the public safety reasons of probation imposing the standard in all or most cases are quite clear.

[00:21:20] Speaker 05:
Is there anything that reads history?

[00:21:23] Speaker 05:
about firearm use or display?

[00:21:26] Speaker 00:
No, the only mention of firearm use we have in Reed's history is after he was sentenced when he failed to report that there was some concern there that when he was a fugitive for 12 days he may have been armed.

[00:21:40] Speaker 00:
I know the court obviously couldn't take that into account because it happened after sentencing, but I would say it does support the notion that even with non-violent offenders, even for somebody who has committed a financial crime or a healthcare crime, they may do unpredictable things, and there's good reason to allow the imposition of this condition.

[00:21:59] Speaker 00:
And going back to plain error review, which I think is what applies here.

[00:22:02] Speaker 00:
No court has held that this firearm condition violates the Second Amendment.

[00:22:06] Speaker 00:
So even if the court feels like it was error here, it was not error that was plain.

[00:22:11] Speaker 03:
Let me push back on that.

[00:22:13] Speaker 03:
Council for Mr. Reed said that we should just do de novo review.

[00:22:17] Speaker 03:
You won't be prejudiced.

[00:22:18] Speaker 03:
It's, you know, we have everything here to be able to do that.

[00:22:24] Speaker 03:
What's your response?

[00:22:25] Speaker 00:
So I don't think this is a pure question of law.

[00:22:28] Speaker 00:
The record was not developed below on this.

[00:22:31] Speaker 00:
And we mentioned this in a footnote in our supplemental brief, that there is a burden at step one for the challenger to show that the proposed course of conduct and the weapon falls within what the Second Amendment protects.

[00:22:42] Speaker 00:
And so at a very minimum, it may not be a heavy burden, but Mr. Reed did have to say, I want to possess a gun and here is why.

[00:22:50] Speaker 00:
And I would direct the court here to United States versus Perez Garcia in that case, which obviously involved pretrial conditions.

[00:23:00] Speaker 00:
The defendants each filed a motion after the pretrial condition was imposed, and they said why they wanted a gun, what kind of gun.

[00:23:06] Speaker 00:
As to one of the defendants, it was because he wanted to work as an armed security guard to support his family.

[00:23:13] Speaker 00:
As to the other defendant, I believe he said he had to travel for work a good deal, and he preferred to be armed while he did that.

[00:23:19] Speaker 00:
So there you have

[00:23:20] Speaker 00:
developed record on that first step and so I don't think that that you know in deciding whether or not the record is developed it's fair to just assume that you know as a matter of law this doesn't matter here because as you argue it sounds like a remand would be in order to see whether step one was complied with if we were to look at it de novo

[00:23:42] Speaker 00:
I don't think that a remand really makes sense here because I do think that even on the merits under de novo review, Reid fails at step two.

[00:23:52] Speaker 00:
Also, Reid has a mechanism for challenging this condition and getting de novo review.

[00:23:57] Speaker 00:
He can still file a motion to modify his conditions in the district court before he begins his term of supervision or even during his term of supervision.

[00:24:06] Speaker 00:
So it's not that he has no way to have this issue received de novo review.

[00:24:10] Speaker 00:
I just don't think it's appropriate for the court

[00:24:12] Speaker 00:
to give de novo review here on this record.

[00:24:17] Speaker 00:
I can move to step two briefly.

[00:24:19] Speaker 00:
Perez Garcia, which I've discussed, has already accepted the constitutionality of disarming pretrial defendants who are awaiting trial even on nonviolent felony charges.

[00:24:30] Speaker 00:
And those are defendants who are presumptively innocent and surely have more fulsome constitutional rights than defendants convicted of felonies who are, as Judge McEwen observed, still serving their sentences.

[00:24:43] Speaker 00:
So in other words, the Perez Garcia

[00:24:46] Speaker 00:
opinion does all of the legwork here on the historical analogs.

[00:24:52] Speaker 00:
It goes through an extensive analysis of historical analogs that nonviolent crimes such as forgery and horse theft were capital offenses, that many nonviolent crimes were punished with life sentences or estate forfeiture.

[00:25:06] Speaker 00:
Rahimi supports this sort of greater includes the lesser analysis.

[00:25:11] Speaker 00:
So if you can punish those kinds of crimes at the founding with permanent and total disarmament through execution or through a life sentence or through a state forfeiture, then surely a temporary disarmament such as this one is acceptable.

[00:25:25] Speaker 00:
So I don't think the court, even if it gets to the merits here, I don't think the court needs to break any new ground.

[00:25:31] Speaker 00:
I think that

[00:25:32] Speaker 00:
Whatever rights a defendant has on supervision, they certainly must be less than the rights you have before you are convicted.

[00:25:39] Speaker 00:
And Perez Garcia already approved under the Second Amendment the disarmament of pretrial defendants.

[00:25:50] Speaker 00:
If the court has no further questions, we ask that the judgment be affirmed.

[00:25:56] Speaker 00:
Thank you.

[00:26:03] Speaker 01:
To uphold the conviction, the government continues to rely on definitions untethered from the statute or from the ASA to rely on unreasonable inferences rather than a chain of logic from the evidence and to rely on speculation and conjecture.

[00:26:17] Speaker 01:
The contract payments were based on fair market value for services that NWPL provided, and it was set in advance.

[00:26:25] Speaker 01:
So they provided time, employees, and resources.

[00:26:28] Speaker 01:
This evidence is at 3ER410 to 12, 503 to 505, and 9ER1988, as well as 3ER401, and discussed in the reply brief at 16 through 17, and the opening brief at 20 through 23.

[00:26:44] Speaker 01:
The lies that the government talks about are either not actually lies or not based on a reasonable inference from the evidence.

[00:26:52] Speaker 01:
So to say that NWPL did not get a return on investment from specimens, that is a true statement.

[00:26:59] Speaker 01:
Their return was for services.

[00:27:01] Speaker 01:
That's pursuant to the ASA.

[00:27:02] Speaker 01:
The government's argument that that's a lie is circular.

[00:27:05] Speaker 01:
It's using it both as proof of the crime and to establish the crime.

[00:27:10] Speaker 01:
And if it has not independently established the crime, it cannot show that that is a lie.

[00:27:15] Speaker 01:
So it can't be used for both.

[00:27:18] Speaker 01:
NWPL also correctly reported that it did not have an equity or financial interest in Sterling or MTL.

[00:27:24] Speaker 01:
It did not.

[00:27:25] Speaker 01:
It was not a shareholder.

[00:27:26] Speaker 01:
It was not an owner.

[00:27:27] Speaker 01:
It was not an employee of those companies and had a contractual relationship.

[00:27:31] Speaker 01:
It was essentially a subcontractor.

[00:27:35] Speaker 01:
The lab guidelines require that they do not mention the services regarding sterling, but the name of sterling itself was allowed to be said.

[00:27:44] Speaker 01:
It's on all the records.

[00:27:45] Speaker 01:
Again, there's evidence that many people knew about sterling in particular.

[00:27:49] Speaker 01:
So looking at the evidence makes clear that NWPL fulfilled valid contracts and therefore did not violate the anti-kickback statute.

[00:27:55] Speaker 01:
It recruited new customers, retained customers, grew at Salesforce, shipped, sorted, and directed samples.

[00:28:01] Speaker 01:
Sterling and MTL received the benefit of their bargain, and so did NWPL.

[00:28:06] Speaker 01:
The government did not prove its case here, and the court should vacate and dismiss the charge.

[00:28:12] Speaker 01:
Thank you, Your Honors.

[00:28:13] Speaker 03:
Thank you, Counsel.

[00:28:14] Speaker 03:
This matter is now submitted.