Greetings, Court fans!
Yesterday, the Court twice dealt with issues relating to the extraterritorial application of US criminal law. The result: two split decisions, bitter dissents, and clear indications of unrest in this area of the law.
In Small v. United States (03-750), the Court held that an individual convicted of a crime in another country who subsequently purchases a gun in the United States cannot be prosecuted under 18 U.S.C. § 922(g)(1), which forbids possession of a firearm by anyone “convicted in any court” of a crime punishable by imprisonment for more than a year. Small was convicted in Japan of attempting to smuggle firearms and ammunition into the country and sentenced to five years. After returning to the United States, he purchased a gun and was ultimately charged and pled guilty under § 922(g)(1), while reserving his right to challenge the scope of the statute.
Breyer delivered the opinion of the Court (joined by Stevens, Souter, O’Connor and Ginsburg — the Chief did not participate), finding that § 922(g)(1) was not intended to cover foreign convictions. Breyer noted that Congress likely did not consider this situation when drafting the statute; thus the use of “any” was not dispositive. Relying heavily on the fact that Congress “ordinarily legislates with domestic concerns in mind,” Breyer noted that while the presumption against extraterritorial application was not directly applicable, a similar presumption should apply because “convicted in any court” is a required element of the statute. Further, because other countries may criminalize conduct permissible (perhaps even desirable) under US law, foreign convictions are less reliable indicators of dangerousness. In addition, if the statute encompassed foreign convictions, it would produce anomalies because certain exceptions, definitions, and specifications under the statute refer only to federal and state convictions. As a result, US convictions for antitrust or business regulatory crimes would not bar gun ownership, while foreign convictions for the same conduct would. Similarly, US convictions for misdemeanor crimes of domestic violence would bar gun ownership, while foreign convictions would not. These illustrations indicated that Congress failed to consider whether the generic phrase “convicted in any court” applied to foreign convictions.
Justice Thomas, joined by Scalia and Kennedy, authored a forceful dissent. In the event you haven’t already guessed their position, it’s plain meaning! The statute says “any court” and it means any court. The dissent criticized the majority for “inventing” a new canon of statutory interpretation that “[the majority] terms ‘an ordinary assumption about the reach of domestically oriented statutes,'” in effect imposing a “clear statement” rule on Congress if it intends a statute to refer to something outside the US. Further, the majority’s decision undermines the purposes of the statute by allowing dangerous individuals convicted in foreign courts to purchase guns. While the dissent recognized that its reading of the statute would lead to some results that are “at most, odd,” they are not absurd and do not warrant a departure from plain meaning.
While leading the dissent in Small, Justice Thomas penned the majority opinion (for Rehnquist, Stevens, O’Connor and Kennedy) in Pasquantino v. United States (03-725), holding that a plot to defraud Canada of tax revenues could fall under the federal wire fraud statute, 18 U.S.C. § 1343, which criminalizes the use of interstate wires “to defraud, or for obtaining money or property by means of false or fraudulent pretences, representations, or promises.” Pasquantino and two others were convicted for making interstate phone calls in order to smuggle large quantities of liquor into Canada without paying customs duties and taxes.
The Court first held that defendants’ conduct technically violated the statute, as Canada’s right to receive tax revenue constitutes “property.” Next, the Court rejected Pasquantino’s argument that the common-law “revenue rule,” which precludes one nation from enforcing another nation’s revenue laws, required the Court to exempt frauds directed at evading foreign taxes. This prosecution was not barred because it was not an effort to collect foreign taxes, but rather “a criminal prosecution brought by the United States in its sovereign capacity to punish domestic criminal conduct.” While taxes might be collected and provided to Canada as victim compensation, the prosecution’s nexus with tax collection “was incidental and attenuated.” Further, even if prosecution would indirectly enforce Canadian tax laws, revenue rule cases relating to indirect enforcement were “not sufficiently well established to narrow the wire fraud statute in the context of this criminal prosecution.” The Court also rejected the notion that permitting enforcement under these circumstances could lead to international friction. The action was brought by the Executive, the sole organ of international relations, who is in the best position to evaluate the impact of prosecution. Finally, the Court found that its interpretation of the wire fraud statute did not give the law extraterritorial effect. Defendants used US wires to execute a scheme to defraud. “Their offense was complete the moment they executed the scheme inside the United States: ‘the wire fraud statute punishes the scheme, not its success.'” The majority conceded that the prosecution in this case “may seem an odd use of the Federal Government’s resources,” but found that “the broad language of the wire fraud statute authorizes it to do so and no canon of statutory construction permits us to read the statute more narrowly.”
Ginsburg, joined by Breyer, and by Scalia and Souter for Parts II and III, dissented. While the language of the wire fraud statute is broad, it should not be given “an exorbitant scope.” US law explicitly addresses international smuggling in 18 U.S.C. § 546, providing for criminal enforcement of foreign customs laws only where the foreign nation reciprocally criminalizes smuggling into the US, which Canada does not. It is unlikely that Congress intended to bypass this carefully crafted structure by permitting prosecutions under the generic wire fraud statute. There is also a treaty between the US and Canada governing tax collection, which also would not provide for prosecution under these circumstances. For Ginsburg, the Court decision is “all the more troubling for its failure to take account of Canada’s primary interest in the matter at stake,” as Canadian courts are best positioned to decide whether Pasquantino actually violated its customs and revenue laws.
In Part I of her dissent (for Ginsburg and Breyer only), Ginsburg argues that the prosecution of Pasquantino and his colleagues is, in effect, an extraterritorial application of the wire fraud statute. Their guilt depended on their intent to violate Canadian law. But if no Canadian duty or tax existed, their actions would not have been unlawful. This dependence on Canadian law continued at sentencing, where the court determined the amount of loss by looking to the revenue supposedly lost by Canada. Absent some indicia of intent by Congress to encompass violations of foreign revenue laws under the wire fraud statute, the presumption against extraterritorial application requires a finding that the wire fraud statute does not apply to defendants conduct.
In Part II (this is where Scalia and Souter join in), Ginsburg argues that the revenue rule also precludes construing the wire fraud statute so broadly. “[D]efendants’ conduct arguably fell within the scope of § 1343 only because of their purpose to evade Canadian customs and tax laws; shorn of that purpose, no other aspect of their conduct was criminal in this country.” It is therefore “unavoidably obvious” that this prosecution “directly implicates the revenue rule.” This point is reinforced by the fact that, at sentencing, the Government took the position that restitution should not be ordered under the Mandatory Victims Restitution Act (“MVRA”) because it would violate the revenue rule. While the Government changed its tune on appeal, the fact that it initially asked the trial court to overlook the MVRA out of concern for the revenue rule argues against the Government’s expansive reading of the statute. Finally, in Part III, the dissent argues that the rule of lenity also counsels against a broad construction of the wire fraud statute where its reach is ambiguous.
This is no doubt an interesting pair of cases released on the same day. Perhaps the biggest surprise: Scalia’s departure from plain language to join in the dissent in Pasquantino.
The Court issued two more opinions today — a scintillating insecticide case and another in its line of cases clarifying the time limit for filing federal habeas corpus petitions.
In Bates v. Dow Agrosciences LLC (03-388), the Court considered whether the Federal Insecticide, Fungicide, and Rodenticide Act, (“FIFRA”, 7 U.S.C. § 136 et. seq. if you’re interested), preempts state-law claims against pesticide manufacturers. A group of Texas peanut farmers used Dow’s new “Strongarm” weedkiller, advertised as safe for use “in all areas where peanuts are grown,” but suffered significant crop damage. After they notified Dow of their intent to bring various state-law claims, Dow brought a federal declaratory judgment action asserting FIFRA preemption. At the summary judgment stage, the District Court and the Fifth Circuit agreed with Dow, based on a FIFRA provision barring states from imposing “any requirements for labeling or packaging in addition to or different from” those under FIFRA. These courts held that, because a jury verdict against Dow would effectively require it to alter its label, the farmers’ case was preempted.
The Court, led by Justice Stevens, vacated and remanded. The Court first marched through a lengthy (and fascinating) history of pesticide regulation and litigation in the United States, leading to the conclusion that FIFRA did not occupy the field but rather left “ample room” for states to supplement federal regulatory efforts. The Court then noted that FIFRA’s ban on other labeling laws simply did not apply to the common-law basis for many of the farmers’ claims, which rested on the duty to manufacture safe products, to test them adequately, and to honor express warranties. While an adverse jury verdict might lead Dow to change its label, “an event . . . that merely motivates an optional decision is not a requirement.” So these claims were not preempted. The farmers’ fraud and failure-to-warn claims were another story, however, because they were premised on common-law rules regarding labeling. The Court agreed with the farmers that if these common-law duties were equivalent to FIFRA’s ban on false or misleading statements, then their claims could survive preemption because (1) FIFRA bars only “different” or “additional” state requirements, not “parallel requirements”; and (2) FIFRA does not bar new state remedies based on its requirements. The Court rejected Dow’s argument that this would lead to a “crazy-quilt” of jury verdicts in all fifty states, because: (1) the statutory language had no other plausible meaning; (2) there is a general presumption against preemption absent clear congressional guidance; and (3) there is a long history of tort litigation against makers of poisonous substances. All that said, the Court remanded the issue of whether Texas common law was substantively “parallel to” or “different from” FIFRA, to give Dow the chance to brief the issue to the Fifth Circuit.
Justice Breyer concurred to note that, on remand, Texas’ requirements should be measured against EPA regs under FIFRA. Justice Thomas (joined by Scalia) concurred in part and dissented in part, based on his view that a state-law cause of action cannot impose liability where FIFRA would not. Thus, he would remand the farmers’ breach of warranty claims to determine whether Texas law would impose liability for statements on Strongarm’s label where FIFRA would not (apparently in response, the majority noted that a breach of warranty claim only holds a company to its promises, and does nothing to require them to make the promise in the first place).
Pace v. DiGuglielmo (03-9627) further clarified the time limits applicable to federal habeas corpus petitions under the Antiterrorism and Effective Death Penalty Act (“AEDPA”), holding (in a 5-4 decision) that untimely state court petitions for post-conviction relief are not “properly filed” and therefore do not toll the one year limitation period for filing a federal habeas corpus petition. Pace was convicted in Pennsylvania state court in 1986. He filed a post-conviction petition in state court in 1986, which was litigated until 1992, when the Pennsylvania Supreme Court denied review. At the time of his conviction, Pennsylvania’s post-conviction relief statute contained no statute of limitations. In 1995, it was amended to provide a limitations period, subject to certain exceptions. In November 1996, after passage of AEDPA, but before Pace’s time for filing a federal habeas petition had expired, Pace filed another state court petition for post-conviction relief. The court of common pleas denied the petition on the merits in July 1997. On appeal to the superior court, the state argued for the first time that Pace’s petition was untimely under the amended post-conviction relief statute. The court ultimately agreed and the Pennsylvania Supreme Court denied review on July 29, 1999. Pace filed the current federal habeas petition on December 24, 1999. The District Court found that the state court petition tolled Pace’s limitations period under AEDPA and therefore found his federal petition timely. The Third Circuit disagreed, however, concluding that Pace’s untimely state court petition was not “properly filed” and therefore could not toll AEDPA’s limitations period.
The Chief authored the majority opinion, in which O’Connor, Scalia, Kennedy and Thomas joined. The majority concluded that time limits on post-conviction petitions are conditions to filing. Therefore, an untimely petition (just like a petition for which the filing fee is not paid) is not properly filed and provides no basis for statutory tolling. This is true regardless of whether the state post-conviction statute provides exceptions to its time limit for filing, as was the case here. Any other interpretation of “properly filed” would permit petitioners to avoid AEDPA’s time limits by filing repetitive state court petitions. Federal habeas petitions may only be filed after state court options have been fully exhausted. Therefore, Pace argued that a prisoner could litigate for years in the state system, only to find out after it was too late that his petition was not timely filed and therefore did not toll the federal limitations period. Under these circumstances, the Court advises prisoners to file a “protective” federal petition and request that the federal court “stay and abey” the federal habeas proceedings until the state proceedings are concluded. The Court also found no exceptional circumstances warranting equitable tolling given Pace’s long delay between conviction and the filing of his second state court petition.
Stevens, joined by Souter, Ginsburg and Breyer, dissented. Given that the limitation period in Pennsylvania’s post-conviction relief statute is subject to exceptions, it is odd to say that the petition is untimely and therefore improper. Each claim within the petition must be analyzed separately to determine whether an exception to the time limit applies. Thus, it cannot accurately be said that the application is “properly filed” or “improperly filed” — in fact, half of the application might be timely and half untimely. Under these circumstances, it is more appropriate to conclude that the petition is properly filed, but that some or all of the claims may be procedurally defaulted. Such a properly filed petition should toll the limitations period for filing a federal habeas petition. Further, litigation over the merits of the petition and the limitation period issues could go on for years before a decision is reached in state court. The majority’s decision will lead to the filing of numerous “protective” federal court petitions, clogging district court dockets without any corresponding benefit. Finally, to the extent that the majority is concerned that adoption of a different rule would lead to repetitive state court petitions merely to toll the limitations period, that is unlikely for two reasons. First, there is no benefit to a prisoner in delaying resolution of his claims. Second, if a district court believes the state court petition was filed merely as a delay tactic, the district court could certainly find that petition no “properly filed.”
That’s all for now. For those of you who made it this far — thanks, as always for reading.
Kim & Ken
From the Appellate Practice Group at Wiggin and Dana. For more information, contact Kim Rinehart, Ken Heath, Aaron Bayer, or Jeff Babbin at 203-498-4400