Court Opinion

ID: 2994770
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:16:32.618522+00
Date Added: 2024-06-11T11:45:22.276859
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

Nos. 99-3967 & 99-4159

United States of America,

Plaintiff-Appellee,

v.

George Peterson and Pedro Sandoval,

Defendants-Appellants.

Appeals from the United States District Court
for the Northern District of Indiana, Hammond Division.
Nos. 98-CR-193 & 98-CR-167--Rudy Lozano, Judge.

Argued September 19, 2000--Decided January 4, 2001

      Before Bauer, Manion, and Kanne, Circuit Judges.

      Bauer, Circuit Judge. Pedro Sandoval and George
Peterson directly appeal their convictions for
robbery and attempted robbery affecting
interstate commerce and carrying a firearm during
the commission of these crimes. We reverse these
convictions.

BACKGROUND

      Members of the Latin Kings gang learned that
James Estep, a man in his mid-sixties, sold
marijuana from his Hammond, Indiana home. In
January 1997, armed with this information and
weapons, Pedro Sandoval, George Peterson, and
four others, all gang members, robbed Estep in
his home. The robbers successfully carried away
thirty pounds of bricked marijuana, about $18,000
cash, and three guns. Estep, an avid gun
collector, housed well over thirty guns in a gun
case he built. Worried about the discovery of his
drug business, Estep did not report the robbery
to the police. He did, however, report that two
guns had been stolen from his van.

      The gang members divided the booty among them.
Basking in their first success, Peterson,
Sandoval, and another gang member returned to
Estep’s in February. This time they were thwarted
by Estep’s daughter, Katherine Bohlke, who met
them at the door with a gun. Peterson fired his
gun, hitting Bohlke in the shoulder. As the gang
members fled, Peterson tripped, causing his gun
to discharge again. The bullet pierced a
neighbor’s wall, killing Steven Bodoki, a visitor
to that home. This time Estep could not avoid the
police. In fact, the FBI soon got involved
because the Hammond police needed high-tech
recording equipment in order to surveil the gang
members. Soon thereafter, the federal government
obtained arrest warrants for the gang members.

      Sandoval and Peterson were indicted for the
following violations under 18 U.S.C sec. 1951 and
18 U.S.C. sec. 924(c): Count 1--robbery of an
enterprise affecting interstate commerce, January
1997; Count 2--carrying a firearm during the
commission of this crime, January 1997; Count 3--
attempted robbery of an enterprise affecting
interstate commerce, February 1997; and Count 4--
carrying a firearm during the commission of this
crime, February 1997. The jury found Sandoval
guilty on Counts 1, 3, and 4, and Peterson guilty
on Counts 1 and 3. The judge sentenced Peterson
to forty-five years, and Sandoval to forty years.
DISCUSSION

      Defendants attack their conviction on two
fronts. First, they posit that a recent Supreme
Court decision requires the government to prove
beyond a reasonable doubt that these robberies
had a substantial effect on interstate commerce,
rather than merely a de minimis effect. Second,
they contend that even if the de minimis standard
remains, the evidence presented to the jury was
insufficient to meet that standard.

      I.         Hobbs Act Jurisdictional Element

      To uphold the tenets of federalism, in order to
prosecute an individual under the Hobbs Act, the
federal government bears the onus of proving that
the accused’s conduct affected interstate
commerce. This proof differentiates Hobbs Act
violations from common law robbery. How strong an
affect on interstate commerce the Constitution
demands is a question raised by defendants. The
Hobbs Act provides, in part:
Whoever in any way or degree obstructs, delays,
or affects commerce or the movement of any
article or commodity in commerce, by robbery or
extortion or attempts or conspires so to do, or
commits or threatens physical violence to any
person or property in furtherance of a plan or
purpose to do anything in violation of this
section shall be fined under this title or
imprisoned not more than twenty years, or both.

18 U.S.C. sec. 1951(a). Thus, two elements must
be proven: robbery and an effect on interstate
commerce. The Supreme Court has interpreted the
statutory language of "in any way or degree" as
"manifesting a purpose to use all the
constitutional power Congress has to punish
interference with interstate commerce by
extortion, robbery or physical violence." Stirone
v. United States, 361 U.S. 212, 215 (1960). We
have long held that the government need only show
some actual, even if de minimis, effect, or,
where there is no actual effect, a realistic
probability of an effect, on interstate commerce
to bring robbery within its prosecutorial reach.
See United States v. Bailey, 227 F.3d 792, 797
(7th Cir. 2000).

      In this case, the defendants surmise that
United States v. Morrison, 529 U.S. 598, 120
S.Ct. 1740, 146 L.Ed.2d 658 (2000) mandates a
higher showing. Specifically, they argue that a
substantial affect on interstate commerce must be
demonstrated, and that the use of the "depletion
of assets" theory is precluded because robbery is
not an economic activity. We start by noting that
after the Court’s opinion in United States v.
Lopez, 514 U.S. 549 (1995), we construed the
Hobbs Act as still requiring only a showing of a
de minimis effect. See United States v. Stillo,
57 F.3d 553, 558 n.2 (7th Cir. 1995) (extortion
case) ("Nor did the Lopez decision undermine this
Court’s precedents that minimal potential effect
on commerce is all that need be proven to support
a conviction."). Whether this recent case changes
the standard is a new question of law, which we
review de novo.

      The Court in Morrison struck down 42 U.S.C.
sec. 13981, which created a federal civil remedy
for victims of gender-motivated violence. The
Court likened sec. 13981 to the Gun-Free School
Zones Act of 1990, struck down in Lopez, because
there was no jurisdictional element establishing
that "the federal cause of action is in pursuance
of Congress’ power to regulate interstate
commerce." 120 S.Ct. at 1751. The statute was
found to exceed Congress’ power because
"[g]ender-motivated crimes of violence are not,
in any sense of the phrase, economic activity."
Id. The Court said that generally the aggregation
principle has only been applied when the
regulated activity was commercial in nature. See
id. at 1750. Accordingly, the Court rejected the
"argument that Congress may regulate nonecomonic,
violent criminal conduct based solely on that
conduct’s aggregate effect on interstate
commerce." Id. at 1754.

      Defendants argue that like gender-motivated
violence in Morrison, robbery is not an economic
activity, and thus aggregation cannot be
employed. Defendants quote Lopez, 514 U.S. at
558, which states that "where a general
regulatory statute bears a substantial relation
to commerce, the de minimis character of
individual instances arising under that statute
is of no consequence," to argue that local
robbery ought not be a federal crime. We rejected
a similar argument in United States v. Wilson.
See 73 F.3d 675, 684 (7th Cir. 1995) ("There is
no authority for the proposition that Congress’s
power extends only to regulation of commercial
entities. . . . [C]ourts have upheld numerous
statutes which regulate private conduct that
affects commercial entities or commercial
activity."). We do not view the Hobbs Act as
impermissibly regulating local conduct, that is,
it does not regulate robbery for the sake of
regulating robbery. Further, the Hobbs Act does
not suggest that robbery is an economic activity;
rather, the Hobbs Act regulates interference with
economic activity by robbery. In other words, it
does not federalize all robberies because all
robberies per se affect interstate commerce;
rather, it applies only to robberies with the
proven effect. Unlike the Hobbs Act, the Morrison
statute regulated gender-motivated violence
wherever it occurred, not just violence directed
at interstate commerce. Thus, aggregation is
appropriate because what is aggregated is the
depletion of the interstate entity’s assets by
robbery, and not the act of robbery alone.

      As our brethren in the Tenth Circuit have
recently reasoned in United States v. Malone, we
do not believe Morrison undermines our prior
holdings that a showing of a de minimis effect is
constitutionally satisfactory. See 222 F.3d 1286,
1294-95 (10th Cir. 2000). Therefore, we uphold
the de minimis standard because, in the
aggregate, robbery of an interstate business has
a substantial affect on commerce.

      II.              Sufficiency of Evidence

      Our next inquiry is whether sufficient evidence
was presented for the jury to find defendants
guilty beyond a reasonable doubt. We lend great
credence to a jury’s verdict. Thus, a conviction
will be overturned based on insufficient evidence
only if the record reveals no evidence from which
the rational jury could have found the defendants
guilty beyond a reasonable doubt. See Bailey, 227
F.3d at 797. At trial, the government bore the
burden of proving that the robbery affected
interstate commerce. Our review of the trial
transcript reveals that the government’s proof
was insufficient to satisfy the de minimis impact
standard.

      In its opening statement, the government told
the jury:

      [T]here’s an element that we are required to
prove, not just that the crime occurred, but that
there’s a federal nexus or a federal involvement.
And that, you will see from the instructions, is
that interstate commerce was affected.

      You will be hearing testimony from experts that
this marijuana that was taken, and attempted to
be taken, was grown outside of the State of
Indiana. The weapons that were taken in the first
robbery and attempted to be taken in the second,
were manufactured outside of the State of
Indiana. And, of course, United States currency,
as I think most of you know, is not printed in
the State of Indiana, but outside. Therefore, all
three items that were taken in the first robbery
and attempted to be taken in the second, had
crossed state lines to be here in the State of
Indiana.

Tr. at 202. During its case, the government
presented three expert witnesses to help
establish this jurisdictional theory.

      The government called James Crane, a Special
Agent with the United States Secret Service, as
an expert in investigations involving United
States currency. He testified, in part:
Q. Sir, are you familiar with the production of
the United States currency?
A. Yes, I am.
Q. And where is the United States currency
actually produced?
A. U.S. currency is produced in two places in the
United States, one in Washington, D.C. at the
Bureau of Engraving and Printing, and there’s
also another Bureau of Engraving and Printing in
Fort Worth, Texas.

* * *

Q. Sir, with regards to United States currency
which is found in the [S]tate of Indiana, what
are any possible places of origin for that United
States currency?
A. To be produced?
Q. Correct.
A. Nowhere in Indiana.

Tr. at 876, 878-79.

      Seemingly, the purpose of Crane’s testimony was
to establish that the money taken and attempted
to be taken by defendants from Estep was printed
out-of-state, and thus was at one time in
interstate commerce. To endorse this sort of
showing would require an overly expansive
interpretation of the Hobbs Act. As the Eleventh
Circuit intimated, "[w]e acknowledge that cash
may ’travel’ in interstate commerce but . . . .
[w]e do not rest our decision on this weak reed."
United States v. Paredes, 139 F.3d 840, 844 n.3
(11th Cir. 1998). This is because, practically
speaking, under the government’s theory, all
robberies committed outside of Texas could be
classified as federal crimes (as all robberies
committed in Washington, D.C. are already so). In
its brief, the government rightly "concedes that
the out-of-state origin of the currency alone is
insufficient to satisfy the commerce element of
the Hobbs Act." We agree and hold that this
testimony was inappropriate to establish the
interstate commerce element under the Hobbs Act.

      Another government witness was Eric Siweck, a
DEA Special Agent and an expert in the
enforcement of federal drug laws. Siweck, on
direct examination, testified in part:

Q. If you were to recover brick marijuana, based
on your investigations in Indiana, based on your
training and experience, would the origin be from
Indiana?
A. Normally, no. It would be from an area, you
know, that could grow on a regular basis, would
be my experience.
Q. And some of these areas are?
A. South America, Mexico, Southern States. They do
grow in Texas, Arizona, Nevada, places that have
a lot more growing days than we do here.

* * *

Q. Sir, have you had an opportunity prior to this
trial today to speak with Mr. Estep . . .
regarding some marijuana?
A. Yes, I have.
Q. And [was he] able to describe certain size of
brick marijuana?
A. Yes, [he] did.
Q. And based on those conversations, your opinion
would still be the same that marijuana of that
size, which is brick, would be from another
state?
A. Yes, in the content and the quality of the
marijuana described, to me it’s for cultivation,
it’s done by a grower for distribution. And the
way it was described to me, it does not sound
like it’s Indiana grown.

Tr. at 886-87. On cross examination, Siweck
testified:

Q. Mr. Siweck, you’re saying it’s still possible
that the marijuana described by Louis Young and
Mr. Estep could have been cultivated in Indiana?
A. It is possible, yes, sir.
Tr. at 887. On redirect, he responded:

Q. So when defense counsel asks you about a
possibility, you indicate highly unlikely?
A. It is possible, highly unlikely, . . . but it
is possible.

Tr. at 890. Estep, who had been given immunity by
the government, had previously testified that he
had sold marijuana from his home for about two
years and was planning to sell the marijuana
taken by defendants in January. Thus, the jury
could rationally find that Estep operated a drug
business and that its assets were depleted by the
robberies. The question is whether the evidence
could allow the jury to find that Estep’s drug
business was interstate in nature.

      Traditionally, the government meets the de
minimis standard under the "depletion of assets"
theory. The government presents evidence that a
business is either actively engaged in interstate
commerce or customarily purchases items in
interstate commerce, and had its assets depleted
by the robbery, thereby curtailing the business’
potential as a purchaser of such goods. See
United States v. Elders, 569 F.2d 1020, 1025 (7th
Cir. 1978). And, typically in Hobbs Act cases an
owner or manager of the business establishment
takes the stand to testify that the business
robbed either served out-of-state customers or
bought inventory manufactured out-of-state. See,
e.g., United States v. Rodriguez, 218 F.3d 1243,
1245 (11th Cir. 2000) (desk clerk testified that
motel robbed served out-of-state guests); United
States v. Guerra, 164 F.3d 1358, 1359, 1361 (11th
Cir. 1999) (owner and manager testified that gas
station robbed sold fuel from out-of-state);
United States v. Smith, 182 F.3d 452, 456 (6th
Cir. 1999) (government provided evidence that
stores robbed sold beer, wine, and tobacco
originating out-of-state); United States v.
Hebert, 131 F.3d 514, 523-24 (5th Cir. 1997)
(managers and owners testified that restaurants
and liquor stores robbed bought products from
out-of-state); United States v. Brown, 959 F.2d
63, 68 (6th Cir. 1992) (distributor testified
that it provided bar robbed with beer and food
manufactured out-of-state).

      Contrary to the above cited examples, the Hobbs
Act does not require that the commerce affected
be legal commerce. However, since Estep’s illegal
drug business was not a conventional commercial
entity, it was especially important that the
government prove the interstate nature of the
business. The government needed to show the jury
that Estep’s marijuana source originated from
out-of-state or that he sold drugs to out-of-
state customers. For example, in United States v.
Thomas, we upheld a Hobbs Act conviction for
obstructing interstate commerce when a drug
seller robbed a drug buyer of money that would
have been used to buy his cocaine. See 159 F.3d
296, 297 (7th Cir. 1998). The government offered
evidence that cocaine originated in South
America, and thus traveled through interstate
commerce. See id. at 298. Likewise, in Bailey, we
upheld a Hobbs Act conviction for attempted
robbery. The defendant had targeted a drug
supplier whom was suspected to possess on his
person either cash from a cocaine sale or actual
cocaine. See 227 F.3d at 798. The government
called an expert to testify that cocaine is
produced in South America, and therefore, it must
enter Illinois via interstate commerce. See id.
Thus, the cocaine dealer’s assets were depleted
because he had less means available to purchase
more cocaine through interstate commerce. See id.

      In this case, the government failed to adduce
this benchmark form of proof, or any other
satisfactory form. Siweck’s testimony offered the
jury qualified inferences-- namely that Estep
housed cultivated marijuana, not "ditch weed,"
that cultivated marijuana "normally" comes from
outside of Indiana, and that even though it was
"possible" for the marijuana to be Indiana grown,
it was "highly unlikely." Evidence on this
element was not elicited from any other witness,
including Estep, the witness with the most
knowledge as to this matter. While cultivated
marijuana may not "normally" be grown in Indiana,
it is possible. See, e.g, United States v. Myers,
46 F.3d 668, 668-69 (7th Cir. 1995) (indoor
marijuana growing operation found in Indiana).
Based on this, we find that the inferences
offered by Siweck were too attenuated to
establish that Estep ran an interstate business.
To render a guilty verdict, the jury must hear
sufficient evidence to avoid resorting to
excessively strained inferences or guesswork. The
evidence of the source of the marijuana was based
on strained inferences. In both Thomas and
Bailey, the government garnered sufficient proof
that the cocaine’s source was South America. We
are not saying that it is not possible that
Estep’s drug business was interstate in nature,
we are saying that the government failed to
adequately prove the possibility.

      The government postures that it need not
specifically show that the drugs were grown
outside Indiana because "drug dealing is an
economic activity that affects interstate
commerce." (Citing United States v. Westbrook,
125 F.3d 996, 1009 (7th Cir. 1997) (quoting
United States v. Rogers, 89 F.3d 1326, 1338 (7th
Cir. 1996))). However, the government is
conflating its burden of proof under two distinct
statutory schemes--the Controlled Substances Act
("CSA"), 21 U.S.C. sec.sec. 801 et seq. and the
Hobbs Act, 18 U.S.C. sec. 1951. The statute at
issue in Westbrook is part of the CSA, also
enacted pursuant to Congress’ Commerce Clause
power. However, in enacting the CSA, Congress
made specific findings and declarations codified
in 21 U.S.C. sec. 801. These findings
demonstrated that intrastate narcotic activity
substantially affects interstate commerce. Based
on these findings, when the government prosecutes
a defendant under the CSA, it need not show that
the conduct in the individual case affects
interstate commerce. The Hobbs Act was not
predicated on such findings; rather, the Hobbs
Act requires individualized proof that the
robbery charged affected interstate commerce.
Therefore, it cannot be assumed that Estep’s drug
business was interstate in nature.

      We find this case puzzling, particularly because
of the government’s trial theory. Lopez crafted
three categories that Congress may regulate under
its Commerce Clause power: (1) the use of the
channels of interstate commerce; (2) the
instrumentalities of interstate commerce, or
persons or things in interstate commerce; and (3)
activities that substantially affect interstate
commerce. See 514 U.S. at 558-59. In its brief,
the government spells out these categories and
surmises that "the Hobbs Act as applied in this
case served to protect ’persons or things in
interstate commerce.’" The government then
concludes that the "Hobbs Act conviction in this
case [may be] sustained under the third as well
as the second category of permissible Commerce
Clause legislation described in Lopez." The
defendants’ counter that since this theory was
not presented to the jury, it cannot sustain the
convictions. Specifically, the defendants’ brief
states, "But the government, not thinking of the
case as a Lopez category-two case, paid no
attention at trial to its burden under that
theory." Both parties misunderstand the import of
the three Lopez categories. These categories are
not suggested methods of proof; rather, they
signal areas within Congress’ power to regulate.

      It appears that the government was attempting
to prove that this Hobbs Act case fits into Lopez
category two. Perhaps the government confused the
Hobbs Act with statutes such as 18 U.S.C. sec.
2119, the federal carjacking statute, which
states, in part: "Whoever, with the intent to
cause death or serious bodily harm[,] takes a
motor vehicle that has been transported, shipped
or received in interstate commerce . . . ." Under
this statutory language, we have found it
sufficient to show that the stolen car had at
some time traveled in interstate commerce. See
United States v. Taylor, 226 F.3d 593, 600 (7th
Cir. 2000) (finding it sufficient that government
proved that car was made in Kansas and stolen in
Indiana); see also United States v. Bell, 70 F.3d
495, 498 (7th Cir. 1995) (finding it sufficient
under 18 U.S.C. sec. 922(g)(1) to prove that
firearm had at some point traveled in interstate
commerce). Such statutes are enacted pursuant to
Congress’ Commerce Clause power under Lopez
category two.

      The Hobbs Act, however, falls within Lopez
category three. The very language dictates that
the government must show an effect on interstate
commerce. Yet, the government argued to the jury
that since the items taken-- the money, drugs,
and guns--had crossed state lines at some point,
interstate commerce was affected. But, the
language of the Hobbs Act, as distinct from the
federal carjacking statute, does not envision
this type of showing. The government’s proof
should have focused on the nature of the business
robbed and how the robbery affected its operation
in interstate commerce; that is to say, that
Estep sold drugs from an out-of-state source and
that the robbery of the money and drugs depleted
the assets of his business. On appeal, the
government attempts to convert the case into one
where the government proved that the robberies
substantially affected interstate commerce
because defendants robbed an interstate
enterprise. Fatal to the government’s appeal is
that this theory was not presented to the jury,
and thus, cannot support its verdict.

      Finally, Jeffrey Emmons, a Special Agent with
the United States Treasury Department, the Bureau
of Alcohol, Tobacco and Firearms, an investigator
of federal firearms violations, was called to
testify as to the interstate nexus of the stolen
firearms. Emmons testified that the guns taken
and used in the robbery were not made in Indiana.
The testimony concluded:

Q. Sir, the five weapons we have discussed today,
you’ve indicated that none of those weapons were
manufactured in Indiana, is that correct?
A. That’s correct.
Q. So, in fact, if those weapons were recovered in
Indiana, they did cross state lines?
A. That’s correct.

Tr. at 682. The government abandons this approach
on appeal. Instead, it argues that the guns were
part of Estep’s drug business because guns are
necessarily part of the drug trade. No evidence
was presented to this effect; actually the
evidence was to the contrary. Estep testified
that the guns were his personal property, and
that the guns were "home when they c[a]me to my
house." Tr. at 844. According to the record,
Estep was a gun collector, separate and apart
from his drug business, and he was not a gun
seller. Estep even testified that he had never
used drug money to purchase guns. The
government’s argument here is baseless, the
evidence did not show that the guns were part of
Estep’s business, and it did not show that
Estep’s business was interstate.

      In light of our analysis as to the money and
drugs, we decline to further address the
sufficiency of the gun proof because "[w]hen a
verdict may have rested on any of several
grounds, one of which was improper, the
conviction cannot be upheld." United States v.
Feldman, 711 F.2d 758, 764 (7th Cir. 1983)
(citing Stromberg v. California, 283 U.S. 359,
368 (1931); United States v. Baranski, 484 F.2d
556, 560-61 (7th Cir. 1973)); see Feela v.
Israel, 727 F.2d 151, 154-55 (7th Cir. 1984). The
fact that the jury might have solely relied on
Crane’s testimony regarding the money is of
concern. Crane’s only purpose in testifying was
to show that the money was not printed in
Indiana. His testimony was clear and unqualified,
and thus provided an easy avenue for the jury to
find that the interstate commerce element was
satisfied. Also, the evidence as to the source of
Estep’s marijuana was insufficient to satisfy the
interstate commerce element. Since the verdict
was general, the jury may well have rested its
decision that the robberies affected interstate
commerce on the drug or money evidence, both
improper grounds.

CONCLUSION

      We conclude that the Supreme Court’s decision
in Morrison did not alter the showing required to
satisfy the jurisdictional element of the Hobbs
Act. Since evidence beyond a reasonable doubt as
to any impact on interstate commerce is lacking
to sustain the Hobbs Act convictions, we hereby
REVERSE defendants’ convictions.