Case Name: UNITED STATES of America, Plaintiff-Appellee, v. Charles O. KALLESTAD, Defendant-Appellant
Court: United States Court of Appeals for the Fifth Circuit
Jurisdiction: United States
Decision Date: 2000-12-19
Citations: 236 F.3d 225
Docket Number: No. 98-51089
Parties: UNITED STATES of America, Plaintiff-Appellee, v. Charles O. KALLESTAD, Defendant-Appellant.
Judges: Before REYNALDO G. GARZA, JOLLY and HIGGINBOTHAM, Circuit Judges.
Reporter: Federal Reporter 3d Series
Volume: 236
Pages: 225–233

Head Matter:
UNITED STATES of America, Plaintiff-Appellee, v. Charles O. KALLESTAD, Defendant-Appellant.
No. 98-51089.
United States Court of Appeals, Fifth Circuit.
Dec. 19, 2000.
Joseph H. Gay, Jr., Mark Randolph Stelmach (argued), Asst. U.S. Attys., San Antonio, TX, Mark Howard Marshall, Asst. U.S. Atty., Austin, TX, for Plaintiff-Appellee.
Thomas M. Dawson, David V. Ayres (argued), Leavenworth, KS, for Defendant-Appellant.
Before REYNALDO G. GARZA, JOLLY and HIGGINBOTHAM, Circuit Judges.

Opinion:
PATRICK E. HIGGINBOTHAM,
Circuit Judge:
In this 28 U.S.C. § 2255 case we consider a challenge to the constitutionality of 18 U.S.C. § 2252(a)(4)(B), which prohibits the possession of sexually explicit depictions of minors if those depictions or the materials used to produce them were shipped in interstate commerce. We are persuaded that Congress could rationally conclude that to regulate a national market in child pornography it was necessary to regulate its local possession.
I
Government agents found a large number of nude photos and films of women, some of whom appeared to be minors, in Kallestad's home. They also found notes he made regarding the women, including their names, addresses, and phone numbers. Agents used these notes to locate some of the women, and they discovered that several of them were minors at the time the photos and films were taken.
Kallestad had advertised in the Austin American Statesman newspaper for "slender female nude models." Some of the advertisements stated that the age of the "models" was "unimportant." Several of the girls who responded to the advertisement were 16 to 17 years old, and most of them told Kallestad their ages and that they were high school students. Kallestad took pictures and made films of the girls engaged in sexually explicit conduct and in some instances of them engaging in such conduct with him. The photos and films were made at Kallestad's home in Austin, Texas. The film used to make the photos and films was manufactured outside of Texas.
Kallestad was convicted of numerous offenses including six counts charging violations of section 2252(a)(4)(B). On direct appeal, we vacated his sentence, finding an error in his sentence.
After Kallestad was resentenced, he moved for relief under 28 U.S.C. § 2255. He argues that his conviction for possession of material involving the sexual exploitation of minors should be vacated because the statute making that conduct an offense exceeds the authority of Congress under the Commerce Clause. Kallestad did not raise this issue on direct appeal.
The magistrate recommended denying relief, and the district court did so, also denying a certificate of appealability. We granted a certificate of appealability on the issue of the constitutionality of the statute prohibiting possession of materials involving the sexual exploitation of minors.
II
The government argues that Kallestad's challenge is barred because he did not raise the question on direct appeal. A section 2255 movant who fails to raise a constitutional or jurisdictional issue on direct appeal waives the issue for a collateral attack on his conviction, unless there is cause for the default and prejudice as a result. Kallestad argues that his counsel was ineffective for not raising the issue on direct appeal.
It is true that ineffective assistance of counsel can meet the cause and prejudice requirement for overcoming procedural default in a section 2255 motion. We do not consider the contention further because the government failed to preserve the issue. The government asserted the procedural bar before the magistrate, but filed no objection to the magistrate's proposed findings and recommendations even though Kallestad filed objections and the district court conducted a de novo review of the case. The government must invoke the procedural bar in the district court to raise it here. A party who fails to file written objections to a magistrate judge's proposed findings and recommendations waives the objection, and on appeal we will review the issue for plain error only. The district court did not err in reaching the merits of the constitutional challenge.
III
Kallestad argues that section 2252(a)(4)(B), which prohibits mere possession of child pornography, is beyond Congress's power under the Commerce Clause. We review this constitutional challenge to a federal statute de novo.
Similar arguments have been made in, and rejected by, other courts. The Third Circuit, in United States v. Rodia, rejected a similar challenge by a defendant convicted of possessing child pornography. The court noted that, in passing the 1978 Protection of Children Against Sexual Exploitation Act, Congress explicitly found that child pornography was a "multi-mil-lion dollar industry," and the court concluded that there was a "substantial interstate market" in child pornography. The Rodia court then analogized to Wickard v. Filburn, and upheld the statute. Other courts have upheld section 2252(a)(4)(B) based on its jurisdictional hook, which requires that either the pornography itself, or the material used to manufacture it, has moved in interstate commerce.
In United States v. Lopez, the Supreme Court defined three categories of activity Congress may regulate under the Commerce Clause: channels of interstate commerce, persons or things traveling in interstate commerce, and activities having a substantial effect on interstate commerce. In United States v. Morrison, the Court clarified how the third category is to be analyzed. Courts are directed to inquire (1) whether the statute regulates "commerce," or an activity that might be deemed an "economic activity," broadly defined; (2) whether the statute has an "express jurisdictional element" that restricts its application to activities that have "an explicit connection with or effect on interstate commerce"; (3) whether congressional findings support the judgment that the activity in question has a substantial effect on interstate commerce; and (4) whether the act made an offense has an attenuated relationship to that substantial effect on interstate commerce.
Kallestad argues that his offense falls within the third category, and like the crime of possessing a gun near a school zone, does not have a sufficiently substantial effect on interstate commerce to fall within Congress's authority. He challenges section 2252(a)(4)(B) facially and as applied. We find his challenge unpersuasive.
A
Applying the first Morrison factor, the conduct being regulated here is commercial in character, defined broadly. As the 1986 Attorney General's Commission on Pornography found, much of the interstate traffic in child pornography "involves photographs taken by child abusers themselves, and then either kept or informally distributed to other child abusers." Such pornography is exchanged through the mails, and also becomes the basis for commercial child pornography magazines, which are made not with photographs taken by the magazine producers, but rather with homemade photographs submitted by private child abusers. This case is therefore distinct from Lopez, as the child pornography statute "represents Congressional regulation of an item bound up with interstate attributes and thus differs in substantial respect from- legislation concerning possession of a firearm within a purely local school zone." Moreover, Wickard affirms that, when a person produces for their own consumption a product that is traded in an interstate market, his conduct is economic in character. Kalles-tad may not have intended to sell his photographs, but then Filburn never intended to sell his wheat. In this regard, Kalles-tad's conduct was unlike the rape at issue in Momson.
B
Section 2252(a)(4)(B) also contains a jurisdictional hook. Section 2252(a)(4)(B) makes it an offense to possess child pornography that "has been mailed, or has been shipped or transported in interstate or foreign commerce, or which was produced by using materials which have been mailed or so shipped or transported." No evidence demonstrated that Kallestad's pictures moved in interstate commerce, but the evidence established that his film did.
This jurisdictional element is not alone sufficient to render section 2252(a)(4)(B) constitutional. That argument, advanced by the government, has no principled limit. Where the relationship between the interstate and local activity is attenuated, a jurisdictional hook alone cannot justify aggregating effects upon interstate commerce to find Congressional power under the Commerce Clause. It is one thing for Congress to prohibit possession of a weapon that has itself moved in interstate commerce, but it is quite another thing for Congress to prohibit homicides using such weapons.
What the jurisdictional hook does accomplish in this case, however, is to limit prosecutions under section 2252(a)(4)(B) to a smaller universe of provable offenses. It further reflects Congress's sensitivity to the limits upon its commerce power, and Congress's express interest in regulating national markets.
C
Ample findings establish the proposition that local possession of child pornography impacts interstate commerce. In passing the original 1977 Act, Congress found that child pornography was harmful to children, and represented "a large industry — representing millions of dollars in annual revenue — that operates on a nationwide scale and relies heavily on the use of the mails and other instrumentalities of interstate and foreign commerce." Even then Congress did not reach for local possession. That effort, now at issue, came only after the widely reported Meese Commission extensively documented the interstate, commercial nature of child pornography.
These findings show that child pornography is a growing, predatory business that exploits and injures the most vulnerable among us. Congress found that the child pornography trade operates across the United States, out of major cities and small towns alike, to reach consumers nationwide.
D
We come, therefore, to the fourth Morrison factor — whether or not the act criminalized has only an attenuated relationship to interstate commerce. As explained in Morrison, as well as in our opinion in United States v. Bird, and the dissent in United States v. Hickman, the question is the rationality of Congress's judgment. We ask whether Congress could rationally have determined that it must reach local, intrastate conduct in order to effectively regulate a national, interstate market.
It is not sufficient merely for Congress to analogize the local conduct it seeks to regulate to some form of interstate conduct it may permissibly regulate. Such a license would invite the "house that Jack built" justification for federal authority, unfettered and nigh unprincipled. Yet the commerce power has internal limits, that are judicially enforceable. We enforce one such internal limit today by asking if there is a national market in the sense that its discrete and local parts are interdependent and interact. This inquiry lays aside large classes of local conduct that, while they may present a serious, even "national," problem, do not involve a national market. For example, that the homicide rate is high and presents a national concern does not mean that Congress may federally regulate purely local murder.
Congress determined that an interstate market in child pornography exists. No one questions Congress's authority to regulate that market directly. Unlike the rape at issue in Morrison, the possession of child pornography interacts with a national market on both the supply and demand side. Applying the commerce power, read through the Necessary and Proper Clause, Congress can reach purely local possession if it rationally determines that doing so is necessary to effectively regulate the national market.
Congress could reach such a conclusion with respect to child pornography because it may often be impossible to determine whether a specific piece of child pornography has moved in interstate commerce. In some cases, law enforcement officials may be fortunate enough to intercept child pornography en route. Absent that, however, child pornography does not customarily bear a label identifying the state in which it was produced. For that reason, Congress could rationally determine that banning purely local possession was a necessary adjunct to its effort to ban interstate traffic. Congress can rationally decide that failing to reach to the fountainheads will impede its regulation of the interstate stream.
This is the rationale supporting the federal laws prohibiting possession of certain controlled substances and firearms. We explained its limits upon the commerce power in a dissenting opinion in United States v. Hickman, and earlier in United States v. Bird. As we observed in Bird:
[0]ur inquiry must determine not simply whether section 248(a)(1) proscribes intrastate activity that has (or might have) a substantial affect on interstate commerce, but rather whether there is a national commercial market in abortion-related services such that the regulated conduct — considered in light of the size and scope of the benchmark market— substantially affects interstate commerce.
Bird holds, as we again insist today, that in the absence of a jurisdictional hook itself sufficient to sustain its regulation, Congress must have as its purpose the regulation of a national market and a rational basis for concluding that permitting the proscribed conduct would impair Congress's ability to regulate that market.
A true market is inevitably commercial, and is pushed by supply and demand, whether manifested in swaps or purchase and sale. The Congress, supported by the findings of the Meese Commission, found such a market in child pornography. With such a market we have little hesitation in concluding that where the product is fungible, such that it is difficult if not impossible to trace, Congress can prohibit local possession in an effort to regulate product supply and demand and thereby halt interstate trade.
IV
In sum, acting pursuant to its commerce power, Congress may reach intrastate possession in an effort it may rationally conclude is necessary to control this interstate market. It is not irrational for Congress to conclude that to regulate a national commercial market for a fungible good, it must as a practical matter be able to regulate the possession of that type of good— possession that in a real economic sense is never wholly "local." Local inventories become the source of trading and selling as familiarity dulls the utility of the pictures.
Congress could reach Filburn's wheat because the federal government legitimately sought to support the price of wheat on the interstate market. Congress had little concern for the few bushels of wheat in Wickard grown for home consumption. Its intent was plainly to regulate the national market. That its goal was to support wheat prices is of no moment. Its means, by necessity, was control of supply. Our analysis would not differ if Congress's regulatory objective had been to end all production of wheat. For like reasons, Congress can reach Kal-lestad's pornography because it legitimately seeks to eliminate the interstate market for child pornography. And it is rational to conclude that reaching local possession is a necessary incident to that objective.
V
We hold that section 2252(a)(4)(B) is facially valid and that its application to Kal-lestad in this case falls within Congress's power under the Commerce Clause.
AFFIRMED.
. At the time of Kallestad's charged conduct, 18 U.S.C. § 2252(a)(4)(B) provided criminal penalties for any person who
(B) knowingly possesses 3 or more books, magazines, periodicals, films, video tapes, or other matter which contain any visual depiction that has been mailed, or has been shipped or transported in interstate or foreign commerce, or which was produced using materials which have been mailed or so shipped or transported, by any means including by computer, if—
(i) the producing of such visual depiction involves the use of a minor engaging in sexually explicit conduct; and
(ii) such visual depiction is of such conduct.
18 U.S.C. § 2252(a)(4)(B) (1991). Section 2252(a)(4) was amended on October 30, 1998. See Protection of Children From Sexual Predators Act of 1998, Pub.L. No. 105-314, Title II, § 202(a), 203(a), 112 Slat. 2977, 2977-78. The amended statute makes it an offense to possess one or more (rather than three or more) sexually explicit depictions of a minor. See 18 U.S.C.A. § 2252(a)(4)(B) (2000). The amendments also provide for an affirmative defense when three or fewer matters are possessed and the defendant either promptly destroyed them or contacted law enforcement authorities. See 18 U.S.C.A. § 2252(c) (2000). Kallestad's conduct was completed by October 31, 1991, the date on which officers discovered the photographs. Since Kal-lestad's conduct occurred before the statute was amended, the government was required to prove that he had three or more or sexually explicit depictions of a minor.
. His other offenses included conspiracy to commit bank fraud, bank fraud, aiding and abetting, and making false statements to a federally insured bank.
. United States v. Patten, 40 F.3d 774, 776-77 (5th Cir.1994) (per curiam); United States v. Pierce, 959 F.2d 1297, 1301 (5th Cir.1992); United States v. Capua, 656 F.2d 1033, 1037 (5th Cir. Unit A 1981).
. Patten, 40 F.3d at 776-77; Pierce, 959 F.2d at 1301.
. See United States v. Drobny, 955 F.2d 990, 995 (5th Cir.1992).
. See Douglass v. United Services Auto. Assn. 79 F.3d 1415, 1428-29 (5th Cir.1996).
. See United States v. Jennings, 195 F.3d 795, 800 (5th Cir.1999).
. 194 F.3d 465, 477-79 (3d Cir. 1999).
. Id. at 474.
. 317 U.S. 111, 63 S.Ct. 82, 87 L.Ed. 122 (1942).
. See Rodia, 194 F.3d at 476; see also United States v. Robinson, 137 F.3d 652, 655-56 (1st Cir.1998).
. See United States v. Bausch, 140 F.3d 739, 740-42 (8th Cir.1998); Robinson, 137 F.3d at 654-55.
. 514 U.S. 549, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995).
. Id. at 558-59, 115 S.Ct. 1624.
. 529 U.S. 598, 120 S.Ct. 1740, 146 L.Ed.2d 658 (2000).
. Id. at 1749-51.
. Attorney General's Commission on Pornography: Final Report 406 (U.S. Dep't of Justice, 1986).
. Id. at 407.
. Id. at 408.
. United States v. Knutson, 113 F.3d 27, 30 (5th Cir.1997), quoting United States v. Wilks, 58 F.3d 1518, 1521 (10th Cir.1995).
. See Wickard, 317 U.S. at 114, 63 S.Ct. 82. The dissent implies that Wickard is no longer tenable in the wake of the Supreme Court's decisions in Lopez and Momson. Although the Court has noted that Wickard resides in the outer boundaries of the Commerce Power, see United States v. Lopez, 514 U.S. 549, 560, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995), it has never overruled the case. The Court has repeatedly underscored its unwillingness to recognize the overruling of its prior decisions by implication. See Agostini v. Felton, 521 U.S. 203, 237, 117 S.Ct. 1997, 138 L.Ed.2d 391 (1997) ("We do not acknowledge, and we do not hold that other courts should conclude our more recent cases have, by implication, overruled an earlier precedent.... [T]he Court of Appeals should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions.") (internal quotation marks omitted).
.This court has said that the lack of such an element was central to the Lopez Court's decision to strike down the Gun-Free School Zones Act. See United States v. Luna, 165 F.3d 316, 320 (5th Cir.1999).
. 18 U.S.C. § 2252(a)(4)(B).
. S.Rep. No. 95-438, 1978 U.S.C.C.A.N. 40, 44.
. See Part A, supra. The Meese Commission also advocated expanding the jurisdictional coverage of the then-existing version of the statute to encompass activities that "affect" commerce. See Attorney General's Commission on Pornography, supra, at 475.
. 1978 U.S.C.C.A.N. at 42-48.
. 124 F.3d 667 (5th Cir.1997).
. 179 F.3d 230, 232-33 (5th Cir.1999) (equally divided en banc) (Higginbotham, J., dissenting).
. See United States v. Lopez, 459 F.2d 949, 951 (5th Cir.1972) (upholding federal drug laws, stating "where it is apparent that an attempt to separate interstate activities from intrastate activities would be a futile exercise substantially interfering with and obstructing the exercise of the granted power of Congress to regulate interstate commerce, that attempt is not required"). Although this case was decided before the Supreme Court's 1995 Lopez decision, courts addressing Commerce Clause challenges to 18 U.S.C. § 841 since that decision have found it constitutional. See United States v. Edwards, 98 F.3d 1364, 1369 (D.C.Cir.1996); United States v. Kim, 94 F.3d 1247, 1249-50 (9th Cir.1996); United States v. Bell, 90 F.3d 318, 321 (8th Cir.1996); United States v. Lerebours, 87 F.3d 582, 584-85 (1st Cir.1996).
. The Supreme Court in Lopez refused to decide the broader question of whether Congress could forbid the "mere possession" of firearms. See United States v. Bass, 404 U.S. 336, 339 n. 4, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971). Since the Supreme Court's Lopez decision, this Court has held that Congress could forbid the possession of a firearm by a person subject to a protective order prohibiting domestic violence. See United States v. Pierson, 139 F.3d 501 (5th Cir.1998); 18 U.S.C. § 922(g)(8). In Pierson, this Court found the presence of a jurisdictional hook a dispositive basis for distinguishing the Supreme Court's Lopez decision. See Pierson, 139 F.3d at 503. See also United States v. Knutson, 113 F.3d 27 (5th Cir.1997) (upholding 18 U.S.C. § 922(o), which criminalizes possession of a machine gun, against a Commerce Clause challenge); United States v. Kirk, 105 F.3d 997, 999-1005 (5th Cir.1997) (en banc) (opinion of Higginbotham, J.) (same). The dissent's arguments in this case contradict the clear import of this Court's decisions in the drug and firearms contexts. The logic underlying the dissent would require a reversal of these decisions, thereby overturning a vital and established body of federal protections against criminal conduct.
. 179 F.3d at 232-33.
. 124 F.3d at 667.
. Id. at 677.