In the

United States Court of Appeals

For the Seventh Circuit

Nos. 00-4008 & 00-4166

United States of America,

Plaintiff-Appellee/Cross-Appellant,

v.

Johnny P. Watts,

Defendant-Appellant/Cross-Appellee.

Appeals from the United States District Court

for the Central District of Illinois, Peoria Division.

No. 00-10007-004--Joe B. McDade, Chief Judge.

Argued April 17, 2001--Decided July 5, 2001

 Before Fairchild, Cudahy, and Coffey,

Circuit Judges.

 Cudahy, Circuit Judge. On January 19,

2000, Johnny P. Watts and three

companions robbed a branch of the

Commerce Bank in Peoria, Illinois. While

two men jumped over the bank’s teller

counter and removed approximately

$55,000, Watts stood near the front door

and allegedly pointed a small-caliber

handgun in the direction of the bank

tellers./1 All four men were

apprehended shortly after the robbery.

 The indictment charged Watts with armed

bank robbery (count one), in violation of

18 U.S.C. sec. 2113(a) and (d), and using

or carrying a firearm during a crime of

violence (count two), in violation of 18

U.S.C. sec. 924(c)(1). On July 13, 2000,

Watts pleaded guilty to both counts, but

reserved the right to pursue on appeal a

line of argument popular with criminal

defendants these days: whether Congress

exceeded its Commerce Clause power by

enacting the federal armed bank robbery

statute. 

 The district court sentenced Watts to 57

months of imprisonment on the armed bank

robbery count with minimal objection from

either the government or Watts.

Sentencing on the second count, use of a

firearm, proved more contentious. Section
924(c)(1)(A)(ii) increases the minimum

term of imprisonment from five to seven

years upon a finding that the firearm was

brandished during the crime. Because the

indictment did not charge Watts with

brandishing his firearm, the district

court believed that Apprendi v. New

Jersey, which holds that "[o]ther than

the fact of a prior conviction, any fact

that increases the penalty for a crime

beyond the prescribed statutory maximum

must be submitted to a jury, and proved

beyond a reasonable doubt," 530 U.S. 466,

490 (2000),/2 precluded the higher

seven-year mandatory minimum sentence

prescribed by sec. 924(c) (1)(A)(ii).

Accordingly, the district court declined

the government’s invitation to decide

whether Watts brandished his firearm

during the robbery and instead sentenced

Watts to a five-year term of imprisonment

on count two, to run consecutively with

the 57-month term of imprisonment he

received on count one.

 Watts appeals his conviction, arguing

that the district court should have

dismissed count one because Congress

exceeded its Commerce Clause power when

it enacted the armed bank robbery

statute. The government cross-appeals

Watts’ sentence, arguing that the

district court should have considered

imposing a seven-year term of

imprisonment on count two because

Apprendi does not govern mandatory

minimum sentences.

 

I.

 We first address Watts’ argument that

Congress exceeded its authority to

regulate interstate commerce under the

Commerce Clause when it enacted the

federal armed bank robbery statute, 18

U.S.C. sec. 2113. As might be expected,

Watts bases this argument on United

States v. Lopez, 514 U.S. 549 (1995)

(Gun-Free School Zones Act exceeded

Congress’ Commerce Clause power), and its

progeny, United States v. Morrison, 529

U.S. 598 (2000) (Violence Against Women

Act exceeded Congress’ Commerce Clause

power), and Jones v. United States, 529

U.S. 848 (2000) (construing reach of

federal arson statute to exclude owneroccupied private property so as to avoid

Commerce Clause question). Collectively,

these cases teach that Congress’ power to
regulate under the Commerce Clause is

limited to three broad categories: "(1)

’Congress may regulate the use of the

channels of interstate commerce’; (2)

’Congress is empowered to regulate and

protect the instrumentalities of

interstate commerce, or persons or things

in interstate commerce, even though the

threat may come only from intrastate

activities’; (3) ’Congress’ commerce

authority includes the power to regulate

those activities having substantial

relation to interstate commerce.’" United

States v. Taylor, 226 F.3d 593, 598 (7th

Cir. 2000) (quoting Lopez, 514 U.S. at

558-59). These cases thus have put an end

to a 58-year sequence in which the

Supreme Court "consistently upheld

federal legislation against claims that

Congress had overstepped its authority

under the Commerce Clause." Id. (and

cases collected therein). 

 Watts advances a number of arguments in

an effort to show that the federal armed

bank robbery statute, 18 U.S.C. sec.

2113, falls into none of the above-noted

categories of permissible Commerce Clause

regulation. We need not discuss many of

these arguments because they so clearly

lack merit. See United States v. Wicks,

132 F.3d 383, 390 (7th Cir. 1997) (noting

that any argument which claims that sec.

2113 exceeds Congress’ powers under the

Commerce Clause would be untenable);

United States v. Harris, 108 F.3d 1107,

1109 (9th Cir. 1997) (noting that sec.

2113’s regulation of banks that are

insured by the Federal Deposit Insurance

Corporation (FDIC) ensures that Congress

has acted well within its Commerce Clause

power); United States v. Wilson, 73 F.3d

675, 694 (7th Cir. 1995) (Coffey, J.,

dissenting) (describing sec. 2113 as a

"properly framed" statute for Commerce

Clause purposes). 

 Nonetheless, Watts does present one

argument--regarding sec. 2113’s

jurisdictional reach over federally

insured banks--that is worth exploring in

slightly more detail./3 To further this

argument, Watts relies primarily on Jones

v. United States, 526 U.S. 227 (1999),

which involved a challenge to the federal

arson statute by a defendant who had set

fire to an owner-occupied private

residence. The arson statute at issue in

Jones limited its jurisdiction to

"property used in interstate or foreign
commerce or in any activity affecting

interstate or foreign commerce." As part

of its attempt to show that the private

residence satisfied this jurisdictional

requirement, the government pointed out

that the house in question was insured

under an insurance policy that had been

issued by an out-of-state insurer. The

Supreme Court rejected this argument,

finding that the interstate insurance

policy was insufficient to justify a

finding that the residence had been used

in interstate commerce. See Jones, 529

U.S. at 855-56. 

 Watts believes that, like arson, robbery

is the kind of "paradigmatic common law

crime" that requires more than proof of

interstate insurance coverage--such as by

the FDIC’s deposit insurance--before

Congress may prohibit the crime through

an exercise of its Commerce Clause

powers. Watts is even more convinced that

FDIC insurance does not provide a proper

basis for Congress’ exercise of its

Commerce Clause power because, as he was

informed in a letter from a senior

attorney at the FDIC, FDIC insurance does

not even cover losses due to robbery.

Accordingly, Watts is convinced that

Congress exceeded its Commerce Clause

power by turning the robbery of

federally-insured banks into a federal

crime. 

 We believe otherwise, for FDIC-insured

banks are fundamental to the conduct of

interstate commerce. Congress created the

FDIC to "keep open the channels of trade

and commercial exchange." Weir v. United

States, 92 F.2d 634, 636 (7th Cir. 1937).

As a result, "[t]he activities of an

FDIC-insured institution . . . affect

interstate commerce more than property

insured by a private carrier. . . . [T]he

government insurance is federally

administered, federal officials

periodically examine the accounts, and

the reports sent to the FDIC deal with

money that has been deposited from many

sources, including those outside the

state." United States v. Peay, 972 F.2d

71, 75 (4th Cir. 1992). Robberies of

FDIC-insured banks thus have an

interstate economic effect that is quite

independent of the coverage that FDIC

insurance extends to insured banks./4

It is therefore of no consequence that

FDIC insurance does not cover losses due

to robbery. Accordingly, at the very
least, the FDIC-insured financial

institutions are instrumentalities and

channels of interstate commerce and their

protection from robbery is well within

Congress’s Commerce Clause power. See

Harris, 108 F.3d at 1109.

II.

 On cross-appeal, the government argues

that Apprendi-- which holds that "[o]ther

than the fact of a prior conviction, any

fact that increases the penalty for a

crime beyond the prescribed statutory

maximum must be submitted to a jury, and

proved beyond a reasonable doubt," 530

U.S. 466, 490-- does not govern mandatory

minimum sentences. As already noted,

count two of the indictment charged Watts

with a violation of 18 U.S.C. sec. 924,

which prescribes increasingly lengthy

mandatory minimum sentences depending on

the seriousness of the firearm’s use

during the crime; merely using or

carrying a firearm subjects the defendant

to a mandatory minimum five-year term of

imprisonment, sec. 924(c)(1)(A)(i), but

"brandishing" the firearm increases the

mandatory minimum to seven years, sec.

924(c)(1)(A)(ii). The district court

believed that Apprendi prevented it from

imposing the higher seven-year mandatory

minimum sentence because the indictment

did not charge Watts with brandishing his

firearm during the robbery. Accordingly,

the district court sentenced Watts to a

five-year term of imprisonment under sec.

924(c)(1)(A)(i) without determining

whether he brandished the firearm. 

 The government argues that the district

court incorrectly interpreted Apprendi

because Apprendi’s inapplicability to

statutory mandatory minimum sentences is

well-settled in this circuit, as well as

many of our sister circuits. See United

States v. Rodgers, 245 F.3d 961, 967-68

(7th Cir. 2001) (and cases collected

therein); United States v. Williams, 238

F.3d 871, 877 (7th Cir. 2001). Watts’

only argument in the face of such

overwhelmingly unfavorable precedent is

to ask us to ignore our precedent,

discount the majority’s discussion of

mandatory minimum sentences in Apprendi

and adopt the rule of the Sixth Circuit,

which is, as far as we can tell, the only

circuit that extends Apprendi’s reach to

mandatory minimum sentences. 
 In applying Apprendi to mandatory

minimum sentences, the Sixth Circuit

reasoned that "[t]he basic holding of Ap

prendi is twofold: first, that courts

must count any ’fact’ that increases the

’penalty beyond the prescribed statutory

maximum’ as an element of the offense

’except for one important exception,’

i.e., ’the fact of a prior conviction;’

and second, that it ’is unconstitutional

for a legislature’ to treat ’facts that

increase the prescribed range of

penalties to which a criminal defendant

is exposed’ as mere sentencing factors,

rather than facts to be established as

elements of the offense." United States

v. Ramirez, 242 F.3d 348, 350 (6th Cir.

2001) (emphasis in original). Focusing on

this supposed second holding of Apprendi,

the Sixth Circuit concluded "that ’the

assessment of facts that increase

theprescribed range of penalties to which

a criminal defendant is exposed,’ such as

moving up the scale of mandatory minimum

sentences, invokes the full range of

constitutional protections required for

’elements of the crime.’" Id. at 351

(quoting Jones v. United States, 526 U.S.

at 252 (Stevens, J., concurring)). 

 While the Sixth Circuit’s reading of

Apprendi is now perhaps a tenable one

(and might indeed be the wave of the

future), it is not, at this point, our

reading. It is true, as noted by the

Sixth Circuit, that the Apprendi majority

did quote Justice Stevens’ concurrence in

Jones for the proposition that "it is

unconstitutional for a legislature to

remove from the jury the assessment of

facts that increase the prescribed range

of penalties to which a criminal

defendant is exposed." See Apprendi, 530

U.S. at 490 (quoting Jones, 526 U.S. at

252 (Stevens, J., concurring)) (emphasis

added). However, the majority also

explicitly disclaimed any intent to

overrule McMillan v. Pennsylvania, 477

U.S. 79 (1986), which held that a

defendant’s due process rights were not

violated when a sentencing judge decided

facts that raised the defendant’s

mandatory minimum sentence using the

preponderance of the evidence standard.

See Apprendi, 120 S.Ct. at 2361 n.13.

Unlike the Sixth Circuit, we have

resolved the tension between these

seemingly contradictory statements by

looking to the more specific of the two:

"the majority opinion in Apprendi
specifically stated that, in cases

involving a mandatory minimum sentence,

the rule of Apprendi is not implicated

when the actual sentence imposed is less

severe than the statutory maximum."

Williams, 238 F.3d at 877. This is the

rule in this circuit, and, accordingly,

the district court erred by declining to

consider whether Watts was subject to a

mandatory minimum seven-year term of

imprisonment for brandishing his firearm

during the robbery.

III.

 For the foregoing reasons, the judgment

of conviction is Affirmed and the sentence

is Vacated. The case is Remanded to the

district court for further proceedings

consistent with this opinion.

FOOTNOTES

/1 The record does not reflect what role the fourth

co-defendant played in the robbery.

/2 Technically, Apprendi does not separately address

whether facts that increase the maximum penalty

for a crime beyond the prescribed statutory

maximum must be charged in the indictment. See

530 U.S. at 477 n.3. However, the Apprendi majority quotes with approval the holding in Jones v.

United States: "under the Due Process Clause of

the Fifth Amendment and the notice and jury trial

guarantees of the Sixth Amendment, any fact

(other than prior conviction) that increases the

maximum penalty for a crime must be charged in an

indictment, submitted to a jury, and proven

beyond a reasonable doubt." 526 U.S. 227, 243 n.6

(1999) (emphasis added). See Apprendi, 530 U.S.

at 476. It is perhaps for this reason that we

have nonetheless read Apprendi to require that

certain facts must be charged in the indictment,

as well as submitted to a jury and proven beyond

a reasonable doubt. See United States v. Noble,

246 F.3d 946, 955 (7th Cir. 2001); United States

v. Brough, 243 F.3d 1078, 1080 (7th Cir. 2001)

(and cases cited therein).

/3 Section 2113(f) also extends to banks that are

members of the Federal Reserve System. However,

the parties confine their discussion to

sec. 2113(f)’s jurisdiction over FDIC-insured

banks, and we do so as well.

/4 For the sake of completeness, however, we note

that even if FDIC insurance does not cover losses

due to robbery, the FDIC’s concern with robbery’s

impact on its insureds is illustrated by its

requirement that insured banks "adopt appropriate
security procedures to discourage robberies,

burglaries, and larcenies and . . . assist in

identifying and apprehending persons who commit

such acts." 12 C.F.R. sec. 326.0.