Ofthe Northe rnDis t ri c tofI ndi ana , s i t t i ng by des i gna t i on. ^ 

## In the 

# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 09

- 2672 U NI T ED S TATE SOF A MERI CA, Plai nt i f f

-Appe l l ant, v. J U L I O L EIJA -S ANCHEZ, D efend a nt-A pp ellee

.

A pp eal from the United S t ates Di strictC our t fo r the N o rthernDi stricto f Illino is, Eas tern Div isi on. No . 07 C R 224

—Rebec ca R. Pal lmey er, Ju dge

.
A RG UE D F EB RU AR Y 12, 2010

— D ECI DE D A PRI L 8, 2010

Befo re E A S T E R B R OO K , Ch i e f J udg e , H A MI L T ON , Cir cu i tJudg e, a nd S PR I NGMA NN, D i s t r i ctJudg e . ^ E A S T E RB R OO K, Chi e

f Judg e . A n ind ict m en t re tu rn ed in 2007al l ege s that J uli o Leij a- Sanc h ez w as the k i ngpin of an o rg ani zati on that pr oduced fr audu l ent S oci alS ec uri ty car ds, d ri ver ’ s li censes , gree n car ds, and other docum ents f o r a l i en s l i vingi n the Uni te d S ta te s unl awful l y . The2 N o. 09

- 2672 pros ecuto r bel i eve s that the o rg ani zati on g ener ate d r ev en ue s ex ce eding$ 2. 5 m i l l i o n a y ea r . The i nd i ct m en t al l eg es tha t m any of th e o r g an i za ti o n’ s empl o y ee s an d future custo m er s w er e recr uit ed i n M exi co and sm uggl ed i nto thi s co untry. Leij a- Sanchez m ove d to dism i ss Count I I I, wh i ch char ges hi m wi thv i o l at i ng1 8 U. S
. C. § 19 59 by ar r an g i nga nd payi ng for the m urder ofGuil l er m o J i m enez Fl or es ( k no wn as M o nt es ) , a f o r m ere m pl o y ee who ha d g o ne i nto com peti ti on with hi s o rg ani zati on. A ssa ssi ns in Leij aSanchez ’ s e m plo y fou n d M onte s in M exi co and ki l l ed hi m the r e. M o ntes w as a M ex i ca n c i ti ze n; s o a r e th e as sa ss i ns. T he di st r i ctc o ur t di smi ss ed th i s co unt, c o ncl ud ing th at§ 19 59 do es no t appl y e xt r at er r i to r i al l y . The U ni ted S ta tes has appeal ed und er18 U
. S. C. §373 1 ¶1
. M ea n w h ile th e re st of th e c rim in a l p ro se c u tio n is in abey ance. The pros ecuto r re l i es on U ni t e d St at e s v. B owm an , 26 0 U
. S. 94 ( 1922 ) , f orthe propos i ti on that c rim inalst atute s apply eve n w hen one orm or e e l em en ts o ccurs abr oad o r on the hi gh sea s. Se e a l so U nite d State s v. Va sq uez-Velas co , 15 F. 3d 833 ( 9th Ci r. 19 94)
. Leij a- Sanchez co ntends that Bow m an i s no l onge r goo d l aw , i n l i ght o fEEO C v. Ar ab i an Ame r i c an Oi l Co
. , 499 U
. S. 244 (1991) (A ram co ), and other deci si ons est abl i shi ng a presum pti on that ci vi l st atutes do not ap p l y t o acti vi ty outsi de the U ni ted S tat es. W hat Bow m an had sai d i s that “ th e sa m e r ule o fi nter preta ti on shoul d not be appli ed to cr i m i nal st atute s which are , a s a cl as s, notl o g i ca l l y de pen den t o n the i r l o ca l i tyf o r the Gover nm ent’ s j uri sdic ti on”. 26 0 U.S
. at98
.N o. 09

- 2672 3 C ivi l deci si ons such as Aram co cannoti m pli citly overru le a d ecision hold ing tha t crim inal statu t es are appli ed differ entl y. The m ai n re aso n f orr equi ring a cl ear l egi sl ati ve deci si on be f or e a pp l yin g a ci vi l st atute to acti vi ty outsi de our bor ders i s that nati ons ofte n d iffer w i th r espec t to acceptabl e co nd uct. S ee 499 U
. S. at24 8. Tit l e VI Io fthe Civi l Ri ghts A ct o f19 64, the sta tute at iss u e in Aramco , f o rbi ds r el i g i o us di sc r i m i na ti o n, b ut othe r nati ons m ay i m pose re l i gi ous t es ts. A fterA ra m co di s c ha r g e d o ne o fi t s wo r k e r s i n S a ud i A ra b i a , the EE OC c on te n d ed th at A r a m c o (w h ich h as its h ea d q u ar te rs in the Unite d Sta tes ) m ust a pp l y Ti tl e VI Ito i ts w or k for ce w or l dw i de. The S up re m e Cour t co ncl ud ed that the l aw of the p lace of em p loym en t govern s; th at w ay em p loyers can com p ly full y w ith th e law s of allnation s w he re th eyc o nduc t o per at i o ns . ( A co nt r ar yc o nc l us i o n mi g ht ha ve h ad the pract i caleffect ofendi ng the m ult i nati onal oper ati ons ofbusi nesse s ba sed i n the U ni ted S tat es, o r f or ci ng the m to m ove thei r headqu ar ter s t o som e o ther n at ion .) N ati ons differi n the w ay they tr eatthe ro l e o fr el i gi on in em p loy m en t; th ey d o n otd iffer to th e s a m e e x te n t in the wa y the yt r e a tmur de r . T he y ma y u s e di ffe r e nta ppr o ac he s to de fen se s, b urd ens o fpr o o fa nd pe r su as i o n, th e r o l e o fprem edi ta ti o n, a nd pun i sh m en t, b utno ne of these is at stake he re. I t is not as if m urd er w ere forbi dd en byU
. S. l aw but re quir ed (orev en to l er ate d) b y M ex ica n law

. T h e c rim e in Bowm an w as fraud ; the C ou rt obs er ved thatfra ud was unla w ful in al l o fthe pla ces whe r e Bo wm a n’ s s c he me wa s i mpl e men t e d.4 N o. 09

- 2672 W hethero r notAram co a nd othe r po st
- 19 22 de ci si o ns ar e in tens i on with Bowm an , w e m u s t a p p ly Bowm an unt i l the J us ti ce s th emsel ves o ve r r ul e i t. “ I fa pr ec ede nt of this Cou rt has direct ap p li cation i n a c a s e , y et ap p ears t o r e s to n r e a s o ns r ej e c t e d in s o me o the r l i ne o fde c i s i o ns , the Co ur to fApp e a l s s ho ul d fo l l o w the c a s e wh i ch dir ectl y c ontr ol s, l eaving to t hi s Courtthe prer oga ti ve o fo ve r r ul i ngi ts o wn dec i si o ns . ” Rodr iguez deQ uijas v. She ars on/Am e r i ca n Expre s s , Inc . , 490 U
. S. 477, 48 4 ( 1989 )
. S ee als o, e.g., St at eO i l Co. v. Khan , 5 22 U. S
. 3 , 2 0 ( 19 97 )
. The Su p re m e Cour t has nei thero ver rul ed Bowm an norsugges ted that the co urts o fappeal s a re fre e t o re consi der i ts c o nc l us i o n. Bow m an does nothol d t h at cri m i nal st atute s al ways apply extr ate rr i tor i al l y. I t c on cl ud es that j ud ges m ust co ns i derthe l an g ua g e an d func ti o n o f th e pr o hibi ti o n. The sta tute in Bowm an was desi gned to pre vent f ra ud by m ilita ry co n tr ac to rs d u rin g a n d in th e a fte rm at h of W or ld W arI
. The J usti ces obs er ved that, because m i l i tar y o perati o ns in thatwart o o kpl ac e th r o ug ho utthe wor l d, the sta tute m ust r each fr auds hatched abr oad. The U ni ted St ate s m ake s a si m i l arar gum ent about §195 9, wh i ch provi des: ( a) W hoeve r, as consi derat i on fo r the r ecei pt of, o r as consi derat i on f ora prom i se orag re em en t to p ay, an yth ing of p ecu niary value from a n en terpr i se e ng ag ed i n ra ck et ee r i nga ct i vi ty, o r f o r the pu rpos e o fga i ni ng e n trance t o orm ai ntai ni ng o r i n c re as in g p os itio n in a n en te rp ris e e n ga ge d in ra cket eer i ng ac ti vi ty, m urders , ki dn aps, m ai m s,N o. 09

- 2672 5

ass aul ts w i th a dangerou s w eapon, co m m i ts assaul t r esul ti ng i n ser i ous b odi l y inj u ry u pon, o r thre ate ns t o com m i t a cr i m e o fvi ol ence aga i nst any ind i vi du ali n vi ol ati on ofthe l aw s o fany St ate orthe U ni ted S tat es, o r att em pts o r conspi re s s o to do, shal l be pu ni shed

— [det ail s om itted ]. ( b) A s use d i n thi s s ecti on

— ( 1) “r acke tee ring acti vi ty” has the m eani ng se t f o r thi n s ec ti o n 1 96 1 o fthi s ti tl e; a nd ( 2 ) “ e nt e r pr i s e ” i nc l ud e s a nyp a r tne r s hi p, cor pora ti on, as soc i ati on, o r othe r l ega l ent i ty, an d a n y u n ion or gr ou p of in d ivid u als as so c iate d i n f act al thoug h n ot a l ega l enti ty, wh i ch i s engag ed i n, or the acti vi ti es of w hi ch affe ct, i nter sta te orf or ei gn co m m er ce. C ri m i na l b us i ne ss es may be i nt erna ti o na l i n s co pe; the i nd i ctm ent a l l ege s that Leij a- Sanchez ’ s o rg ani zati on w a s . S e c tio n 19 59 ap p lies to en te rp ris es th at en ga ge in oraffect “f or ei gn co m m er ce”; thi s r ule cannotbe i m ple

m ented i fthe exi ste nce o f a cti vi ti es abr oad pre vents appl i ca ti o n o f§ 19 59 t o tho se a ct s an d e ffec ts tha t o cc ur i n the U ni ted S tat es. Leij a- S an ch ez a ss um es tha t a cr i m e ha ppen s i n o ne p l a c e on ly

— w here verthe l astel em ent o ccurs . The fi nal ele m en t o f C ou n t III w as th e m u rd er in M ex ico , so on th is und er sta nd i ng the cr i m e was “in” M exi co. The vie w that a cr i m e ne cess ar i l y ha s j us t o ne s i tu s ha s i ts b as i s i n the com m on l aw , se e W ayne R. LaFav e, Su b s t ant i veCr im i nal Law §§ 4. 2( d), 4. 4 ( 2d ed. 20 03) , b u t has bee n m odi fi ed by6 N o. 09

- 2672 st at u te . Su p p os e L eija-S an c h e z h a d arr an ge d in Illin ois f or M o nt e s t o b e k i l l e d i n Te xa s . He c o ul d ha v e bee n p ro se c u te d ine i t her s ta te f orthato ffense, bec ause el eme n t s o c c u r r e d i n e a c h

. S e e 1 8 U. S
. C. § 3 2 3 7 ( a ) ¶ 1 ( c r i me “begun i n one dist ri ct a nd co m plete d in another, o r com m i tte d i n m or e than on e d istr i ct” m ay be pr ose cuted “i n any dist ri ct in w hi ch [ i t] was b eg u n , conti nued , o r com p leted

. ”); U ni t e d S t at e s v. Rodr iguez-M ore no , 52 6 U
. S. 275 (1999). I fa c r i m e o cc ur s i n the s ta te where it i s ar r an g ed an d p aid for w he n the kil ling occu rs i n T ex as, i t equ all y occu rs in th e s ta te w h er e itw as p lan n ed w h en t h e m u rd er is acco m plis h ed i n M exi co. Because §195 9 f orbi ds att em pts as w el l as co m ple ted crim es, Leij a- Sanchez co uld be f ound culpabl e under that sta tute eve n i fM onte s had su r vi ve d. ( Put ting outthe c o nt r ac t, a nd a r r an g i ng f or p aym ent, ar e s ubstanti alst eps thatco uld s up porta convi cti on f orat tem pt. ) S ecti on 1 959 forbi ds cer tai n acts i n further ance o fa ra cketeer i ng ent er pri se; the §195 9 o ffen se i s no t m ur der( o r s o m e o th erc r im e) in i so l at i o n, but the m ult i ple act s bywh i ch a cri m e s uch as m urder f aci l i tat es a cr i m i nal ente rpri se . A n d m any o ftho se acts, as w el l as the enter pri se that Leij a- Sanchez so ught t o advance, were l oca ted i n I l l i noi s. Bow m an i tse l fshow s that the S up re m e Cour t doe s no t us e a “l as t ac t” r ule for defi ni nga c r i m e’ s l o ca ti o n. The m ast ero fa vess eli nd ire ctl y o w ned by the U ni ted S tat es dec i de d t o e nr i c h hi mse l fb yo v e rb i l l i ngf o r e xp e nses. W hi l e in the p o r to fR i o de J a ne i r o , the ma s t e r b r ib e d a supp l i erto gi ve a r ecei pt showing that the v ess elhadN o. 09

- 2672 7 loa d ed ( a n d p a id for) t w ice as m u c h fu el oil as it ac tu ally pu rchas ed

. The r ecei pts were subm i tte d by t el egr am f ro m the shi p w h ile at sea, and the Treas ury pai d too m uchf o r the fue l

. The l as t ac t o fthi s sch eme, c as hi ngthe T reasur y’ s che ck, l i kel y o ccurr ed i n the U ni ted S tat es ( Bow m an i s no t cl ea r o n thi s) , a nd a t al l e ve nts the inj ury oc cu rred i n th e U nited States, w hos e fu n d s w ere deplet ed. YetB o wm an tho ught that there was a quest i on a b o ute xt r a t e r r i t o r i a l a pp l i c a t i o n b ecause s o meo fthe el ement s o cc ur r ed i n Br az i l o r a t se a. The Co ur t co nc l ud e d tha tU. S
. l a w a pp l i e s e v e n tho ugh e sse nt i a l s t e ps occur re d outsi de i ts bor ders. Lik ew i se here : som e ofthe acts (pl anni ng and paym ent) occur re d i n the U ni ted S tat es, o ne ( the k i l l i ng) o ccurr ed abr oad; and the obj ecti ve (r educed com peti ti on f orLeij aSanchez ’ s s yndica te) was re al i zed i n the U n i ted S tat es. Se e a l so P a squa ntin o v. U nite d S t a tes , 54 4 U.S
. 34 9 ( 2005 ) ( use o ffedera l wir e fra ud st atute to bl ocki nter sta te com m unica ti ons, i n the U ni ted S tat es, desi gned to d efr au d C an ad a o f ta x rev en u es is n otan im p er m iss i b le ex traterritori al app li cat ion ); Fo rd v . U nited Sta tes , 273 U
. S. 593, 6 22 –2 4 ( 19 27 ) ( i fa c r i m i na l e nt er pr i se i s ca r r i ed o ut i n partwithi n the U ni ted S tat es, al l o fthe parti c ip an ts, i ncl ud i ng f or ei gner s whose a cti vi ti es w er e e nti re l y o utside the U nited States, m ay be p en aliz e d ). C f. Pin ke r t on v. U nited Sta tes , 328 U
. S. 64 0 , 6 4 7 ( 1946 ); U ni t e d S t at e s v. M a cey, 8 F. 3d 462, 468 (7th Cir. 1993). Even i n ci vi l li ti gat i on, the Suprem e Cour t has hel d that the l aw s o f t hi s nat i on m ay be a pp l i ed to m ult i

- nati onal oper ati ons that have substa nti aleffec ts i n thi s nat i on. Fo r8 N o. 09

- 2672

exam ple , F. Ho

ffm a nn -La R o ch e L t d v. E m pa gra n S .A
. , 54 2 U
. S. 15 5 ( 2004 ) , co ncl ud es that thi s nat i on’ s a ntitru st law s a p p ly to t h e d om es tic effe c ts of fore ign ca rt els

— though no t t o f or ei gn effects thatar e in depend ent o f the d om est i c effects
. W hen an i nter nati onalcar telhas effects bo th withi n and w i thout ou r b or ders, A m er i can l aw appli es to at l eas t the dom est ic effects , ev en wh en m any ( i fnotal l ) o fthe act s p roducing thos e a dvers e e ffe c t s o c c u r a b r o a d

. T h e C o u r t th o u g h t th a t th i s a pproa ch adequatel y a voi ded unnecess ar y inter fer ence w ith ot h er n at i o n s’ la w s, w h ich m ay to ler at e (w ith in th ei r o wn ter r i to r i es ) e ffec ts tha t o ura nt i tr us t l aws c o ndem n, wh i l e e nsuri ng tha t thi s nat i on can achi eve i ts ow n en d s w ithin its territory. Cf. Re s t at e m e nt( Thir d) of Fore ign Rel at i ons §4 02( 1) ( concl ud i ng tha t the U ni ted St ate s m ay apply i ts l aw to condu ct that ei thertakes pl ace “i n substa nti alpart ” withi n the U ni ted S tat es orhas a “su bsta nt ialeffect” i n th is nation). The i n d ictm ent a l l ege s that Leij a- Sanchez ’ s co nd uct too k pla ce “i n substa nti alpart ” i n thi s nat i on

— i nd e e d, all of the co nd uct as cribed to Leij a- Sanchez to ok pla ce he re . A n d the i nd i ctm ent a l l ege s that the go alo fthe contr act killin g w as to a d va n c e L eija-S an c h ez ’s in te re st s in thi s co untry by curta i l i ng c om peti ti on t o hi s cr i m i nal or gani zati on. Thi s i s no t a n anti tr ust ca se; the U ni ted St ate s i s no t try i ng to pre ser ve com peti ti on i n the busi ness o fpr o ducingb o g us c r ede nt i al s, s o th at al i en s ca n b uy p h on y d oc u m en ts atlow er p ric es . Fed er al p olic y is i ns te ad to st amp o utc o unt er fei t- do cumentmil l s. Butthe pri nci ple o fHof

f m ann - La Rochethatthe U ni ted S tat es m ay red re ss effe c ts in t h is n at ion of c o n d u c t a b ro ad st illN o. 09

- 2672 9 appli es. By r ubbi ng o ut M on tes , Leij a- Sanchez r em ove d not onl y a r i val( al l owing hi m to char ge hi gherpri ces f o r hi s i l l egal war es ) b uta l so a po te nt i alwi tn es s i n a pros ecuti on s uch as thi s o ne. S o w e hav e bo th si gni fi ca ntc o nduc t i n the Uni te d S ta te s an d s i g ni fi ca nt conse quences her e. A pp l yi ng §1 959 to thi s co ntra ct k i l l i ngdo es not violat e an y r ul e o fi nt erna ti o na l l aw a nd i s co m patibl e with the nor m s that g ove rn the appli cati on ofcr i m i nal st atute s t o i nter nati onalcr i m i nal ente rpri ses . A ny i nter nati onalr eperc ussi ons ofthe d ec isio n to pros ecute Leij a- Sanchez ar e forthe pol i ti calbr anches to re sol ve w i th the i r counter parts i n M exi co, r ather than m atter s f orthe j ud i ci albr anch. That di plo m acy has o ccurr ed al re ady. Leij a- Sanchez fl ed to M exi co, whi che xt r adi te d hi m t o th e Uni te d S ta te s to f ac e al l o fthe i nd i ctm ent’ s char ges . The U ni ted S tat es prom i sed not to see ko r i m po se the de ath pe na l tyf o r the murder; M ex i co was s at i sfi ed wi ththa t unde r ta k ing an d s aw no re aso n w hy the U ni ted S ta tes sho uld notapplyi ts substa nti ve rul es. Giv en the hol ding ofU ni t e d St at e s v. Al varezM achain , 5 04 U. S
. 6 55 ( 19 92 ) , tha t pr o se cut i o n in the Uni te d S ta te s i s per m i ss ibl e ev eni fthe de fend an t arr i ve s byk i dna ppi ngr athe r tha n f o r m ale xt r adi ti o n, thi s pro secuti on i s e asyto s u p port
. The subst anti ve offe n se inAlvarez-M achain was the m urder i n M ex ico, by a M exi can nat ional, o ftwo pers ons w ho were hel ping to en for c e U .S. d ru g la w s; th e s ta tu te sa id to be vio lat ed in A lvarez-M achain w as 18 U
. S. C
. §1959 , becau se th e m urd ers hel ped an i nter n atio nal drug ring co nti nue i n business. T h e S u p re m e C ou rtw as n otas ke d to h old inAl varezM achain thatap ply i ng §1 959 i n thi s f ashi on would have10 N o. 09

- 2672 been im p er m i ssibl y e xtra ter ri tor i al, so i ts deci si on i s no t dir ect author i ty. Bu t w e concl ud e that w hat the par ti es as su m ed inAlva rez-M achain

— that §195 9 a pp l i es to a m ur deri n a no th erna ti o n de si g ne d t o f ac i l i ta te the oper ati on ofa cri m i nal ente rpri se i n the U ni ted S tat es

— is i n d e e d th e l a w. R EVER S ED

4- 8- 10