People v. Magnant
| Decision Date | 30 July 2021 |
| Docket Number | 159371, No. 159373 |
| Citation | 508 Mich. 151,973 N.W.2d 60 |
| Parties | PEOPLE of the State of Michigan, Plaintiff-Appellee, v. Gerald MAGNANT, Defendant-Appellant. People of the State of Michigan, Plaintiff-Appellee, v. John Francis Davis, Defendant-Appellant. |
| Court | Michigan Supreme Court |
Dana Nessel, Attorney General, Fadwa A. Hammoud, Solicitor General, and Daniel C. Grano and Scott R. Shimkus, Assistant Attorneys General, for the people.
Law Offices of Salem F. Samaan PC, Plymouth (by Salem F. Samaan ) for Gerald Magnant.
Hertz Schram PC (by Walter J. Piszczatowski, Bloomfield Hills and Kristen Randall) for John F. Davis.
BEFORE THE ENTIRE BENCH
This case involves the interpretation and application of the Tobacco Products Tax Act (the TPTA), MCL 205.421 et seq. Defendants were charged with violating the TPTA because they did not have a license to transport cigarettes. The issue in this case is whether the TPTA's licensing requirement for a "person" who is a "transporter" of tobacco applies to a nonsupervisory employee of an unlicensed entity that transports tobacco. If we find that an individual license is required under the TPTA, we then must determine how criminal intent applies to the TPTA licensing requirements in order to hold such an employee criminally responsible under MCL 205.428(3).
We hold that an individual employee is a "transporter," who must be licensed to transport a regulated quantity of tobacco in Michigan, when (a) the tobacco is obtained from an out-of-state source or from a source not duly licensed under the TPTA, and (b) the individual is not licensed by the Interstate Commerce Commission (the ICC) or an out-of-state operator of a business or warehouse licensed under the TPTA. MCL 205.422(y) ; MCL 205.423(1). An individual employee who takes possession of tobacco from her or his duly licensed (as provided by the TPTA) employer is not a "transporter" and does not need a personal transporter license. MCL 205.422(y).
We further hold that while an individual acting as a "transporter" need not have specific awareness of the law that creates the licensing requirement, a conviction for violating MCL 205.428(3) must, at a minimum, be supported by a showing that the individual (1) knew he or she was transporting a regulated amount of cigarettes and (2) knew of facts that conferred "transporter" status upon him or her. This knowledge-of-status requirement is satisfied when the person is aware that the cigarettes were obtained from an out-of-state source or from a source not duly licensed under the TPTA. In this case, the prosecution failed to present any evidence establishing or implying that defendants were aware of facts that conferred transporter status on them. Accordingly, we affirm in part and reverse in part the opinion of the Court of Appeals and grant defendants’ joint motion to quash the district court's bindover decision.
Defendants Gerald Magnant and John Francis Davis were nonsupervisory employees of the Keweenaw Bay Indian Community (KBIC). The KBIC, a federally recognized Native American tribe, has previously challenged the state of Michigan's authority to tax tobacco products sold by the tribe to nontribal consumers. See Keweenaw Bay Indian Community v. Rising , 477 F 3d 881 (C.A. 6, 2007). On December 11, 2015, the Michigan State Police pulled over a KBIC-owned pickup truck for speeding on U.S. Highway 41. The traffic stop was captured on video. The driver, defendant Davis, consented to a search of the utility trailer attached to the truck, representing to the trooper that it contained "supplies" and "chips." The trailer actually contained 56 cases holding over 600,000 "Seneca" cigarettes marked with KBIC stamps but not with the Michigan Department of Treasury tax stamps required by the TPTA. The trooper told Davis, "[Y]ou knew that stuff was back there," to which Davis replied, "I'm just a worker." The truck's passenger, defendant Magnant, admitted that he had helped load the trailer. The parties have stipulated that Davis, Magnant, and the KBIC were not licensed to transport tobacco products under the TPTA.
Davis and Magnant were each charged with violating MCL 205.428(3) for transporting 3,000 or more cigarettes without the transporter's license required by MCL 205.423(1). After a preliminary examination, the district court bound the case over as to each defendant. In the circuit court, defendants jointly moved to quash the bindover, arguing that MCL 205.428(3) required the prosecution to show that defendants knowingly violated the TPTA licensing requirement. Defendants also jointly moved to dismiss the charges, arguing that the relevant statutes are unconstitutionally vague because they do not give individual employees, as opposed to businesses, adequate notice that they are subject to the TPTA licensing requirement for transporting cigarettes.
The circuit court denied defendants’ motion to quash the bindover, ruling that the prosecution need only show that defendants knowingly transported 3,000 or more cigarettes and that defendants were not licensed, irrespective of their knowledge of the licensing requirement. The circuit court also denied defendants’ motion to dismiss, ruling that the language of the TPTA provided adequate notice that an "individual" can be a "transporter" subject to the licensing requirement.
The Court of Appeals consolidated defendants’ cases on appeal and affirmed in a split, unpublished opinion. The majority held that (1) because MCL 205.428(3) is a general-intent offense, the only criminal intent the prosecution must show is the actor's knowledge that they possessed 3,000 or more cigarettes, and (2) the TPTA provides sufficient notice to individual employees that they must be licensed if they are "transporters" of tobacco products. People v. Davis , unpublished per curiam opinion of the Court of Appeals, issued February 5, 2019 (Docket Nos. 341621 and 341627), pp. 4, 7, 2019 WL 453891. Judge RONAYNE KRAUSE dissented, opining that the TPTA's licensing requirement did not apply to low-level, nonsupervisory employees like defendants. Id. ( RONAYNE KRAUSE , J., dissenting) at 5. She opined that even if the licensing requirement did apply to nonsupervisory employees, the prosecution had the burden to show that defendants knew "both that they were transporting cigarettes, and at least generally that they were doing so in violation of the TPTA." Id. at 8.
Defendants each sought leave to appeal, and this Court ordered consolidated oral argument on the applications. People v. Magnant , 505 Mich. 1000, 939 N.W.2d 684 (2020). We directed the parties to address "(1) whether MCL 205.428(3) requires proof that the defendants knew that they were transporting cigarettes in a manner ‘contrary to’ [the TPTA]; (2) whether nonsupervisory employees fall within the definition of ‘transporter’ under MCL 205.422(y) ; and (3) if so, whether the TPTA's definition of ‘transporter’ satisfies due process by putting the defendants on fair notice of the conduct that would subject them to punishment." Id. (citations omitted).
A district court's bindover decision must be supported by probable cause to believe that the defendant committed a felony. People v. Shami , 501 Mich. 243, 250, 912 N.W.2d 526 (2018). This requires evidence as to each element of the charged offense that would "cause a person of ordinary prudence and caution to conscientiously entertain a reasonable belief of the defendant's guilt." Id. at 250-251, 912 N.W.2d 526 (quotation marks and citation omitted). This Court reviews a district court's bindover decision for an abuse of discretion, which occurs when the district court's decision falls outside the range of principled outcomes. Id. at 251, 912 N.W.2d 526. "To the extent the lower court's ruling is based on questions of law, however, it is reviewed de novo." People v. Hall , 499 Mich. 446, 451-452, 884 N.W.2d 561 (2016). "Questions of constitutional and statutory interpretation present questions of law reviewed de novo." Id. at 452, 884 N.W.2d 561.
The Legislature enacted the TPTA "to provide for a tax upon the sale and distribution of tobacco products; to regulate and license manufacturers, wholesalers, secondary wholesalers, vending machine operators, unclassified acquirers, transportation companies, transporters, and retailers of tobacco products; ... [and] to prescribe penalties and provide remedies for the violation of this act[.]" 1993 PA 327, title. The TPTA "is at its heart a revenue statute, designed to assure that tobacco taxes levied in support of Michigan schools are not evaded."
People v. Nasir , 255 Mich App 38, 42, 662 N.W.2d 29 (2003). This Court's goal in interpreting a statute is to effectuate the Legislature's intent. Shami , 501 Mich. at 253, 912 N.W.2d 526.
Defendants were charged with violating a criminal provision of the TPTA, which provides, in relevant part:
A person who possesses, acquires, transports, or offers for sale contrary to this act 3,000 or more cigarettes ... is guilty of a felony, punishable by a fine of not more than $50,000.00 or imprisonment for not more than 5 years, or both. [ MCL 205.428(3).]
The prosecution alleges that defendants acted "contrary to" the TPTA because they violated MCL 205.423(1), which provides, in relevant part, "[A] person shall not purchase, possess, acquire for resale, or sell a tobacco product as a ... transporter in this state unless licensed to do so." The TPTA defines a "transporter" as follows:
"Transporter" means a person importing or transporting into this state, or transporting in this state, a tobacco product obtained from a source located outside this state, or from any person not duly licensed under this act. Transporter does not include an interstate commerce carrier licensed by the [ICC] to carry commodities in interstate commerce, or a licensee...
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