Dewald v. Wriggelsworth

Decision Date07 April 2014
Docket NumberNo. 12-2076,12-2076
PartiesJEROME WESTFIELD DEWALD, Petitioner-Appellee, v. GENE WRIGGELSWORTH, Respondent-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 14a0063p.06

Appeal from the United States District Court

for the Western District of Michigan at Grand Rapids

No. 1:08-cv-00906Paul Lewis Maloney, Chief District Judge.

Before: COLE, GILMAN, and DONALD, Circuit Judges.

COUNSEL

ARGUED: Linus Banghart-Linn, OFFICE OF THE MICHIGAN ATTORNEY GENERAL, Lansing, Michigan, for Appellant, J. Nicholas Bostic, BOSTIC & ASSOCIATES, Lansing, Michigan, for Appellee. ON BRIEF: Mark G. Sands, OFFICE OF THE MICHIGAN ATTORNEY GENERAL, Lansing, Michigan, for Appellant, J. Nicholas Bostic, BOSTIC & ASSOCIATES, Lansing, Michigan, for Appellee.

GILMAN, J., delivered the opinion of the court, in which DONALD, J., concurred. COLE, J. (pp. 12-21), delivered a separate dissenting opinion.

OPINION

RONALD LEE GILMAN, Circuit Judge. The district court granted habeas relief under 28 U.S.C. § 2254 to Jerome Westfield Dewald with regard to his state convictions for common-law fraud and larceny by conversion, which arose from Dewald's diversion of presidential campaign contributions into a bank account that he controlled. In doing so, the court concluded that the Federal Election Campaign Act (FECA), 2 U.S.C. §§ 431 et seq., preempted the state-law basis for those convictions, and that the Michigan Court of Appeals' determination to the contrary was objectively unreasonable.

Sheriff Gene Wriggelsworth, on behalf of the state of Michigan, contends that the district court erred in granting habeas relief because (1) there is no clearly established federal law, as determined by the Supreme Court, holding that the FECA precludes a state from prosecuting a defendant for committing fraud in the context of a federal election; and (2) even if federal preemption provides "clearly established federal law" in general, the state appellate decision affirming Dewald's convictions did not unreasonably apply those general principles to the case before it. Because we find the State's arguments persuasive, we REVERSE the judgment of the district court.

I. BACKGROUND
A. Factual background

During the 2000 presidential election, Dewald established and operated two political action committees (PACs), one called "Friends for a Democratic White House" and the other called "Swing States for a GOP White House." Dewald, under the pretense of soliciting campaign funds for each PAC, mailed fundraising letters to political donors whose names and addresses appeared on donor lists maintained by the Federal Election Commission.

The PACs collected approximately $750,000 in contributions, but Dewald paid less than 20 percent of that amount to the political parties or to any outside PACs. He instead funneledmost of the campaign donations into his own for-profit corporation that provided "consulting and administrative services" to each of the two PACs. The money ultimately flowed into a bank account maintained by Dewald's consulting firm, or was seized by the State in conjunction with the underlying criminal investigation.

B. State-court procedural history

Dewald was indicted under Michigan law for obtaining money under false pretenses, common-law fraud, and larceny by conversion. A jury convicted him on all counts. He was initially sentenced to concurrent prison terms of 24 to 60 months on Count One (false pretenses); 90 days on Count Two (false pretenses); and 30 to 120 months on Counts Three through Six (fraud and larceny by conversion). The state trial court later resentenced Dewald because of a sentencing miscalculation, which reduced his overall sentence to between 23 and 120 months.

Dewald then appealed his convictions to the Michigan Court of Appeals. He raised a number of claims, including whether the FECA preempts the state-law charges against him. The Michigan Court of Appeals rejected all of his claims. See People v. Dewald, 705 N.W.2d 167, 173 (Mich. Ct. App. 2005). Regarding Dewald's preemption claim, the Michigan Court of Appeals reasoned:

Congress stated that the provisions of the Federal Election Campaign Act (FECA) "supersede and preempt any provision of State law with respect to election to Federal office." 2 USC 453. However, federal courts have held that "'courts have given section 453 a narrow preemptive effect in light of its legislative history.'" Karl Rove & Co. v. Thornburgh, 39 F.3d 1273, 1280 (C.A.5, 1994), quoting Stern v. Gen. Electric Co., 924 F.2d 472, 475 n. 3 (C.A.2, 1991). Additionally, federal courts have held that Congress did not intend the criminal sanctions of the FECA to be a substitute for all other possible criminal sanctions. United States v. Trie, 21 F Supp 2d 7, 19 (D.D.C., 1998), citing United States v. Hopkins, 916 F.2d 207, 218 (C.A.5, 1990), United States v. Curran, 20 F.3d 560, 556 (C.A.3, 1994), and United States v. Oakar, 924 F. Supp. 232, 245 (D.D.C., 1996), aff'd in part and rev'd in part on other grounds, 111 F.3d 146, 324 U.S. App DC 104 (1997). Defendant was charged with and convicted of Michigan state-law crimes. These crimes are not specifically preempted by 2 USC 453. Defendant does not cite another portion of the federal statute that specifically preempts a state from pursuing criminal charges when the crimes are brought against a factual background that involves an election. There is also no conflict between state and federal law in this area. Defendant's convictions for the crimesat issue were not barred by the FECA. Thus, we reject defendant's federal-preemption argument.

Id. The Michigan Supreme Court subsequently denied Dewald leave to appeal. He then unsuccessfully sought post-conviction relief in state court.

C. Federal habeas petition

After exhausting his state post-conviction appeals, Dewald filed his petition for a writ of habeas corpus in the United States District Court for the Western District of Michigan. Both the magistrate judge and the district court judge agreed that habeas relief should be granted on Dewald's convictions for fraud and larceny by conversion. This timely appeal by the State followed.

II. ANALYSIS
A. Standard of review

The Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), 28 U.S.C. §§ 2254, et seq., governs Dewald's petition. AEDPA requires us to deny habeas relief with respect to any federal constitutional claim that was "adjudicated on the merits in State court proceedings" unless the state court's decision "was contrary to, or involved an unreasonable application of, clearly established Federal law, as determined by the Supreme Court of the United States." Id. § 2254(d).

B. Clearly established federal law

"Under AEDPA, if there is no clearly established Federal law, as determined by the Supreme Court that supports a habeas petitioner's legal argument, the argument must fail." Miskel v. Karnes, 397 F.3d 446, 454 (6th Cir. 2005) (emphasis in original) (internal quotation marks omitted). Identifying clearly established federal law is thus the "threshold question under AEDPA." Williams v. Taylor, 529 U.S. 362, 390 (2000). In answering this threshold question, we must consult "the holdings, as opposed to the dicta, of [the Supreme] Court's decisions as of the time of the relevant state-court decision." Carey v. Musladin, 549 U.S. 70, 74 (2006) (internal quotation marks omitted).

This straightforward AEDPA test is easier to state than apply. The Supreme Court has noted the tension "between applying a rule and extending it" in the determination of clearly established law. Yarborough v. Alvarado, 541 U.S. 652, 666 (2004). For example, the Supreme Court has acknowledged that "if a habeas court must extend a rationale before it can apply to the facts at hand then the rationale cannot be clearly established at the time of the state-court decision." Id. The Supreme Court has recognized, however, that "[c]ertain principles are fundamental enough that when new factual permutations arise, the necessity to apply the earlier rule will be beyond doubt." Id.

This tension is present here, with Dewald arguing that we can apply general standards of federal preemption to this case without exceeding our inquiry under AEDPA. In making this argument, Dewald minimizes the significance of the lack of Supreme Court cases directly addressing FECA preemption. Michigan, in turn, argues that whether the FECA preempts state-court criminal prosecutions is a question that "has not been presented to, let alone answered by, the United States Supreme Court."

The proper disposition of this case largely turns on how one characterizes the conduct for which Dewald was prosecuted. As viewed by the district court, the Michigan Court of Appeals committed a fundamental error by permitting the State to prosecute Dewald for using a federal candidate's name to unlawfully solicit campaign contributions from those persons shown on donor lists maintained by the Federal Election Commission. This led the court to conclude that the State's prosecution of Dewald intruded into areas of the law that were expressly governed by the FECA. Cf. U.S. Term Limits v. Thornton, 514 U.S. 779, 805 (1995) (voiding an Arkansas statute that limited the number of times that a person could run for Congress, with the Court holding that the statute violated the Constitution's Election Clause by in effect regulating a federal election).

But Dewald's conduct did not add a new qualification for federal office as in Thornton, nor did his prosecution regulate a federal election or upset the federal-state electoral balance. Rather, Dewald simply used the 2000 presidential election to create an air of legitimacy for his illegitimate objective: to funnel money to his for-profit consulting firm under false pretenses. His prosecution thus reflected the State's inherent authority to prosecute wrongdoing within itsborders....

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