Opinion ID: 148719
Heading Depth: 2
Heading Rank: 1

Heading: Evaluating a Predicate Offense under the Business Practices Exception

Text: Coleman first asserts that the district court erred by denying his Motion to Dismiss the indictment. He claims that his § 371 conviction for conspiracy to violate § 605(e)(4) and § 506(a) falls within the business practices exception created by § 921(a)(20)(A) for offenses pertaining to antitrust violations, unfair trade practices, restraint of trade, or other similar offenses relating to the regulation of business practices. Because Coleman's motion to dismiss the indictment was based on the interpretation of a federal statute, this court reviews the denial of the motion de novo. See United States v. Perez-Macias, 335 F.3d 421, 425 (5th Cir.2003). The felon in possession of a firearm statute, 18 U.S.C. § 922(g)(1), makes it a crime for any person who has been convicted in any court of, a crime punishable by imprisonment for a term exceeding one year ... to possess a firearm or ammunition which has traveled in interstate or foreign commerce. The business practices exception to § 922(g)(1), set out in 18 U.S.C. § 921(a)(20), excludes from the definition of a crime punishable by imprisonment for a term exceeding one year... any federal or state offenses pertaining to antitrust violations, unfair trade practices, restraints of trade, or other similar offenses relating to the regulation of business practices.... Thus, a felon in possession of a firearm who has been convicted of one of the types of violations itemized in § 921(a)(20)(A) cannot be found guilty under § 922(g)(1) on the basis of that conviction. In Dreher v. United States , this court applied a framework for evaluating whether a prior felony conviction falls within the § 921(a)(20)(A) business practices exception. 115 F.3d at 330. The defendant had been convicted of conspiracy to commit mail fraud and mail fraud in violation of 18 U.S.C. §§ 371, 1341 and 1342. Id. at 331. He petitioned for a declaratory judgment that he was not a convicted felon under § 922(g)(1) because the predicate offenses fell within the business practices exception. Id. The defendant argued that the court should evaluate the conduct underlying the convictionsbilling for services not rendered. The Dreher court, however, reasoned that the plain meaning of the term `offenses' in the context of the statute is the charged violation of law, not the facts underlying the violation of law. Id. at 332. The court evaluated whether the elements that the Government was required to prove under 18 U.S.C. §§ 371 and 1341 depended on whether they have an effect upon competition. [1] Id. at 332-33. It analyzed the statutes as follows: The offenses (or violations of law) of which Dreher was convicted are conspiracy to commit mail fraud and mail fraud, pursuant to 18 U.S.C. §§ 371, 1341. To prove conspiracy under § 371, the government must show: (1) an agreement between two or more persons to commit an unlawful act and (2) an overt act by one of the conspirators in furtherance of the agreement. See United States v. Schmick, 904 F.2d 936, 941 (5th Cir. 1990). To convict under § 1341, the government must prove (1) a scheme to defraud; (2) intent to defraud; and (3) use of the mails in furtherance of the scheme. See United States v. Nguyen, 28 F.3d 477, 481 (5th Cir.1994). Id. at 332. The court then held that [b]ecause violations of §§ 371 & 1341 in no way depend on whether they have an effect upon competition, they are not `offenses' that are excluded from the § 921(a)(20) definition of `crimes punishable by imprisonment for a term exceeding one year.' Id. at 333. The defendant in Dreher had been convicted of both conspiracy to commit mail fraud under § 371 and mail fraud under § 1341. Id. at 332. Both or either of those convictions could have potentially functioned as predicate offenses under § 922(g)(1). Consequently, the court's evaluation of the elements under both § 371 and § 1341 does not necessarily clarify whether, in cases such as the present one, the court must evaluate the elements of the offense underlying a conspiracy conviction where there is no conviction for the underlying offense. Additionally, although Dreher specifically rejected any examination of the facts underlying the charged crime, it did not clearly address whether the court might examine the violation of the law that is the target of the charged conspiracy. The Government asserts that, consistent with the categorical approach of Taylor v. United States, 495 U.S. 575, 110 S.Ct. 2143, 109 L.Ed.2d 607 (1990), the district court properly evaluated only the elements of the charged offense for the prior conviction to determine whether an offense falls within the business practices exception. The Government claims that the offenses that were the target of the conspiracy are merely underlying facts and are irrelevant to Dreher 's elements test. If we were to apply the approach advocated by the Government, we would not consider the target offenses of the conspiracy conviction, but would analyze only the elements of conspiracy pursuant to § 371. This reasoning would require the conclusion that any conspiracy conviction pursuant to § 371 would qualify as a predicate offense under § 922(g)(1). We reject such a conclusion. According to the Government's position, a conviction under § 371 invariably qualifies as a predicate offense under § 922(g)(1), even where the unlawful act that was the object of the conspiracy is one of the offenses listed in § 921(a)(20)(A). But, for example, given that the language of § 921(a)(20)(A) exempts any Federal or State offenses pertaining to antitrust violations, conspiracy to commit an antitrust violation would be an offense pertaining to antitrust violations. (emphasis added). Moreover, a conviction for conspiracy under § 371 requires that the Government show: (1) an agreement between two or more persons to pursue an unlawful objective; (2) the defendant's knowledge of the unlawful objective and voluntary agreement to join the conspiracy; and (3) an overt act by one or more of the members of the conspiracy in furtherance of the objective of the conspiracy. United States v. Peterson, 244 F.3d 385, 389 (5th Cir.2001) (citing United States v. Dadi, 235 F.3d 945, 950 (5th Cir.2000)). Thus, § 371 requires that the Government prove as an element that the conspiracy was targeted at a specific offense or unlawful objective. [2] See United States v. White, 571 F.3d 365, 372 (4th Cir.2009) ([t]he Conspiracy Offense cannot be divorced from its ... objective). Consequently, if the targeted offense requires the Government to prove an effect upon competition as an element of the offense, then the conspiracy conviction falls within the business practices exception. We therefore conclude that the district court erred by evaluating only § 371; the analysis under § 921(a)(20)(A) also requires an examination of the elements of the target offense of the conspiracy conviction. As the district court correctly held in the alternative, however, even considering the target offenses of the conspiracy, Coleman's prior offense qualifies as a predicate felony for purposes of § 922(g)(1). The first offense [3] charged as the target of Coleman's conspiracy conviction was 47 U.S.C. § 605(e)(4), the Communications Act of 1934. To prove a violation of § 605(e)(4), the Government must show that the defendant: (1) manufactured, assembled, modified, imported, exported, sold, or distributed; (2) any electronic mechanical, or other device or equipment that was primarily of assistance in the unauthorized decryption of satellite cable programming or direct-to-home satellite services; (3) while knowing or having reason to know that the device or equipment was primarily of assistance in the unauthorized decryption of satellite cable programming or direct-to-home satellite services. These elements do not require any proof of an effect upon competition. Dreher, 115 F.3d at 332. Coleman argues that the legislative history of the Communications Act indicates that the purpose of § 605 is to protect the competitive nature of the satellite industry and prohibit unfair trade practices. Courts have looked to the legislative history of a statute in order to determine whether it falls within the business practices exception. See, e.g., Stanko, 491 F.3d at 416-17 ([T]he statement of congressional findings ... includes concerns about the effects of unwholesome meat on competition and markets. These concerns, however, are subordinate to the FMIA's primary public-health purpose ...); United States v. McLemore, 792 F.Supp. 96, 98 (S.D.Ala.1992) ([O]dometer rollback is prohibited by 15 U.S.C. §§ 1984 and 1990c(a) as an unfair trade practice exactly because of its `effect on competition and consumers.' This interpretation is supported by the legislative history of the Truth in Mileage Act of 1986.). But legislative history remains secondary to an examination of the elements of the statute. See Stanko, 491 F.3d at 416-17 ([M]ore significantly, none of the provisions of the FMIA require the Government to prove an effect on competition or consumers as an element of the offense.). Regardless, even taking into account legislative history, this court has stated that § 605(e)(4)'s purpose is to proscribe the piracy of programming signals, whether they be for commercial or personal use. United States v. Harrell, 983 F.2d 36, 39 (5th Cir.1993). The other offense charged as the target of Coleman's conspiracy conviction was 17 U.S.C. § 506(A), the Criminal Copyright Infringement Statute. To prove a violation of § 506(A), the Government must show that the defendant: (1) willfully infringed; (2) a valid copyright; (3) for commercial advantage, for private financial gain, or in a manner otherwise prohibited by the statute. See 17 U.S.C. § 506(A). For the conviction to fall within the business practices exception, the Government must have been required to prove, as an element of the predicate offense, that competition ... [was] affected; possible incidental effects are not relevant. Schultz, 586 F.3d at 530; see also Dreher, 115 F.3d at 332. Under § 506(A), the Government would not have been required to prove any effect upon competition. We hold that in evaluating whether a § 371 conspiracy conviction falls within the business practices exception, courts must evaluate the elements of § 371 and the target offenses of the conspiracy. Here, the conspiracy conviction for the target offenses of § 605(e)(4) and § 506(A) does not fall within the business practices exception. Coleman's prior conspiracy conviction is therefore a predicate offense for purposes of § 922(g)(1), and we affirm the conviction.