Opinion ID: 759769
Heading Depth: 2
Heading Rank: 1

Heading: Federal Jurisdiction Over Possession Of Contraband Cigarettes

Text: 9 Although first raised in a proceeding held after his conviction by a jury, Abdullah challenges the jurisdiction of the federal courts to criminalize what the defendant categorizes as state tax law violations, citing United States v. Lopez, 514 U.S. 549, 558, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995). In that case, the Supreme Court identified three broad categories of activity that Congress may regulate under its commerce power. 10 First, Congress may regulate the use of the channels of interstate commerce. Second, 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. Finally, Congress' commerce authority includes the power to regulate those activities having a substantial relation to interstate commerce, i.e., those activities that substantially affect interstate commerce. 11 Id. at 558-59, 115 S.Ct. 1624 (citations omitted). 12 The government contends that the statutory prohibitions on trafficking in contraband cigarettes actually regulate the use of the channels of interstate commerce and thus are a proper exercise of the federal government's criminal jurisdiction. The purpose of the ban on receipt or possession of untaxed cigarettes is not, however, to keep open the very avenues by which interstate commerce is transacted. Furthermore, the statute does nothing to regulate the instrumentalities of commerce. Instead, any federal authority over the possession of such contraband must be grounded in Congress's power to regulate those activities having a substantial relation to interstate commerce. 13 Unlike the activities regulated by the Gun-Free School Zones Act, 18 U.S.C. § 922(q)(1)(A), under consideration in Lopez, contraband cigarette trafficking involves an inherently commercial or economic enterprise--the dealing of untaxed products in order to create a higher profit margin for unscrupulous retailers. Second, although 18 U.S.C. §§ 2341-2346 do not contain an explicit jurisdictional element that would ensure the presence of an effect upon interstate commerce, the legislative history of these statutes, again unlike the law at issue in Lopez, unmistakably recognizes the pervasive effects of cigarette smuggling on interstate commerce. For example, the Senate Report on the bill that eventually became P.L. 95-575 (18 U.S.C. §§ 2341-2346) states that the purpose of the legislation is to provide a timely solution to the serious problem of organized crime and other large scale operations of interstate cigarette bootlegging and to help provide law enforcement assistance and relief to cities and States. S.Rep. No. 95-962, at 3 (1978), reprinted in 1978 U.S.C.C.A.N. 5518 (emphasis added). 14 The report then continues by explaining how large profits may be generated and legitimate businesses harmed by the unchecked practice of smuggling cigarettes from a low-tax state to a high-tax state for retail sale. S.Rep. No. 95-962, at 4-8 (1978), reprinted in 1978 U.S.C.C.A.N. at 5518-23. Finally, the report concludes that, because of the interstate nature of the problem, federal legislation is needed to address the deficiencies engendered by the jurisdictional limitations of the individual states affected by the practices. S.Rep. No. 95-962, at 9 (1978), reprinted in 1978 U.S.C.C.A.N. at 5524. Thus, the legislative history of the statutes relevant to this criminal prosecution expressly concludes that the evils addressed by the legislation substantially burden interstate commerce. 15 Moreover, Lopez did not proclaim a general rule that all federal criminal statutes must include a jurisdictional element. United States v. Tucker, 90 F.3d 1135, 1141 (6th Cir.1996). As long as a statutory scheme regulates economic activity that Congress could rationally determine has a substantial effect on interstate commerce, the criminal law remains constitutional, even after Lopez. See United States v. McHenry, 97 F.3d 125, 128-29 (6th Cir.1996), cert. denied, 519 U.S. 1131, 117 S.Ct. 992, 136 L.Ed.2d 873 (1997). In this case, the government adduced credible evidence to establish that the contraband cigarettes connected to the defendant were transported to Michigan from New York without payment of the appropriate taxes, and that such smuggling has a profound effect on both the nature of and the participants in interstate commerce. Abdullah's jurisdictional challenge to this prosecution is, therefore, without merit.