Opinion ID: 3003685
Heading Depth: 3
Heading Rank: 1

Heading: Schultz’s Previous Conviction

Text: Schultz argues that his prior felony conviction does not meet the definition of a “crime punishable by imprisonment for a term exceeding one year” because Congress carved out an exception under 18 U.S.C. § 921(a)(20)(A), to exclude “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.” Schultz contends that his 2005 conviction is excluded under “similar offenses relating to the regulation of business practices” because he was convicted of knowingly trafficking in a telecommunications instrument. It does not appear that this Circuit has ever addressed whether a § 1029(a)(7) conviction is exempt under § 921(a)(20(A). However, other circuits that have discussed § 921(a)(20)(A) have held that not all offenses related to the regulation of business practices fall within the exclusion; the plain meaning of the statute indicates Congress’ intent to exclude only those offenses that pertain to antitrust violations, unfair trade practices, restraints 4 No. 09-1192 of trade, or similar offenses. United States v. Stanko, 491 F.3d 408, 413-14 (8th Cir. 2007). For example, Stanko held that it did not apply to a Federal Meat Inspection Act (“FMIA”) conviction, 491 F.3d at 416; Meldish ruled it did not apply to a conviction for importing merchandise into the United States by means of a false customs declaration, United States v. Meldish, 722 F.2d 26, 27 (2d Cir. 1983); and Dreher concluded it did not apply to convictions for mail fraud and conspiracy to commit mail fraud, United States v. Dreher, 115 F.3d 330, 332-33 (5th Cir. 1997). In holding that § 921(a)(20(A) did not apply, Stanko reasoned that “none of [FMIA’s] provisions . . . require the Government to prove an effect on competition or consumers as an element of the offense.” Id. at 417. Similarly, the Dreher court concluded that the plain meaning of “offenses” referred solely to the charged violation of law and not to the possible incidental effects of a defendant’s activities. Dreher, 115 F.3d at 332. However, the district court in McLemore held that the § 921(a)(20(A) exclusion applied to convictions for rolling back odometers, in violation of 15 U.S.C. §§ 1984 and 1990c(a), because these convictions were “meant to punish an ‘unfair trade practice.’ ” United States v. McLemore, 792 F. Supp. 96, 98 (S.D. Ala. 1992). The McLemore court concluded that the government must live with its decision to prosecute the defendant’s odometer rollback activity as a Title 15 trade offense, rather than as Title 18 mail fraud or wire fraud offense. Id. Accordingly, to determine whether Schultz’s previous conviction is excluded under the § 921(a)(20)(A) exclusion, No. 09-1192 5 we focus on the elements of the predicate conviction. In order for the exclusion to apply under “regulation of business practices,” the government would have been required to prove, as an element of the predicate offense, that competition or consumers were affected; possible incidental effects are not relevant. The elements of Schultz’s § 1029(a)(7) conviction are: (1) knowingly trafficking in a telecommunications instrument that has been modified or altered to obtain unauthorized use of telecommunications services; (2) intent to defraud; and (3) conduct which affected interstate commerce. United States v. Schultz, 2008 WL 2477583,  (N.D. Ind. June 13, 2008). Essentially, Schultz’s § 1029(a)(7) conviction was modifying telecommunication instruments for the purpose of stealing cable. Similar to Stanko, Meldish, and Dreher, the government was not required to prove that Schultz’s conduct had an effect on competition or consumers. Unlike McLemore, Schultz’s conviction was under Title 18, which regulates crimes and criminal procedure and not Title 15, which regulates commerce and trade. Therefore, the § 921(a)(20)(A) exclusion does not apply to Schultz’s predicate conviction. That the government had to prove that Schultz’s conduct affected interstate commerce does change this analysis: Congress’ commerce authority only extends to those activities that substantially affect interstate commerce and accordingly, many criminal statutes include such a jurisdictional nexus. See United States v. Lopez, 514 U.S. 549, 558-59 (1995); United States v. Bell, 70 F.3d 495, 498 (7th Cir. 1995) (holding that The Gun-Free School Zone Act (from Lopez) was unconstitu- 6 No. 09-1192 tional because it was not an essential part of a larger regulation of economic activity and it did not contain a jurisdictional element which would ensure that the firearm possession in question affected interstate commerce).