U.S. v. Gibson Specialty Co.

• Court: U.S. Court of Appeals — Ninth Circuit
• Writing for the Court: Before KOELSCH and SNEED, Circuit Judges, and LINDBERG; LINDBERG
• Citation: U.S. v. Gibson Specialty Co., 507 F.2d 446 (9th Cir. 1974)
• Decision Date: 21 November 1974
• Docket Number: Nos. 73-2988,s. 73-2988
• Parties: UNITED STATES of America, Appellant, v. GIBSON SPECIALTY COMPANY and Patrick Zurla, Appellees. UNITED STATES of America, Appellant, v. PEERLESS PROCUCTS, INC., et al., Appellees. UNITED STATES of America, Appellant, v. EMPIRE PRESS, INC., et al., Appellees. UNITED STATES of America, Appellant, v. UNIVERSAL MANUFACTURING COMPANY et al., Appellees. to 73-2991.

Page 446

507 F.2d 446

UNITED STATES of America, Appellant, v. GIBSON SPECIALTY COMPANY and Patrick Zurla, Appellees.

UNITED STATES of America, Appellant, v. PEERLESS PROCUCTS, INC., et al., Appellees.

UNITED STATES of America, Appellant, v. EMPIRE PRESS, INC., et al., Appellees.

UNITED STATES of America, Appellant, v. UNIVERSAL MANUFACTURING COMPANY et al., Appellees.

Nos. 73-2988 to 73-2991.

United States Court of Appeals, Ninth Circuit.

Nov. 21, 1974.

Frederick W. Read, III, Atty. (argued), U.S. Dept. of Justice, Washington, D.C., for appellant.

Raymond J. Smith, of Crowley, Nash & Shea (argued), Chicago, Ill., for Gibson Specialty Co.

Michael B. Nash (argued) of Crowley, Nash & Shea, Chicago, Ill., for Peerless Products, Inc.

Ralph Wright (argued) of Sandall Moses & Cavan, Billings, Mont., for Empire Press, Inc.

F. Russell Millin (argued) Kansas City, Mo., for Universal Mfg. Co.

Before KOELSCH and SNEED, Circuit Judges, and LINDBERG, District judge. ^*

OPINION

LINDBERG, District Judge.

On November 2, 1972, a federal grand jury in the district of Montana returned four separate multi-count indictments against the individual and business defendants named in the caption. The defendants are manufacturers of punchboards and pulltabs. Violations of the travel act ¹ were charged. ² Motions to dismiss were filed by all of the defendants. The prosecution and the defendants entered into stipulations of fact. ³ By agreement of counsel, the four actions were consolidated for a hearing. On August 17, 1973, the district court granted the motions to dismiss on the ground that the stipulated facts revealed commission of no crime within the purview of the travel act. The prosecution has appealed.

In urging reversal of the district court, the prosecution notes the applicable sections of the travel act and argues three points: (1) The travel act is meant to permit federal powers to aid in-state authorities in policing criminal activity the effect of which is local but the support and organization of which is national; accordingly, the act must be construed as follows: (a) Because possession of punchboards and pulltabs is prohibited in Montana, certain distributors, to whom the defendants sold punchboards and pulltabs, were engaged in 'unlawful activities.' (b) The defendants intended to and did 'facilitate' the 'unlawful activities' of the distributors by selling them punchboards and pulltabs in interstate commerce. (2) The legislative history of the federal statute banning interstate transportation of wagering paraphernalia ⁴ suggests that that statute does not treat punchboards and pulltabs; however, the legislative history of the wagering paraphernalia statute does not control construction of the travel act, which has a broader reach. Erlenbaugh v. United States, 409 U.S. 239, 93 S.Ct. 477, 34 L.Ed.2d 446 (1972). (3) It is irrelevant that the particular use made of interstate commerce is innocuous. Menendez v. United States, 393 F.2d 312 (5th Cir. 1968). The conclusion which the prosecution attempts to reach with this argument is: A sale of goods by an independent manufacturer effected through any medium in interstate commerce, which aids in certain kinds of violation of state law, is a violation of the travel act.

We do not agree. We hold that the district court's dismissal of the four actions was proper because neither the defendants' intention to facilitate nor the defendants' actual facilitation of unlawful activities in Montana were shown. ⁵ Having resolved the matter on this basis, we do not reach other issues raised by counsel.

This court has many times construed the travel act; and the scope of the act, although broad indeed, is not unlimited. United States v. Polizzi,500 F.2d 856 (9th Cir. 1974); United States v. Colacurcio, 499 F.2d 1401 (9th Cir. 1974); United States v. Donaway, 447 F.2d 940 (9th Cir. 1971); United States v. Cozzetti, 441 F.2d 344 (9th Cir. 1971); United States v. Roselli, 432 F.2d 879 (9th Cir. 1970); Marshall v. United States, 355 F.2d 999 (9th Cir. 1966); Turf Center, Inc. v. United States, 325 F.2d 793 (9th Cir. 1963). In order to mount a successful prosecution under those portions of the travel act applicable here, the following elements must be proved: (1) that an accused voluntarily used the facilities of interstate commerce; (2) that the accused attempted to or did on fact promote, manage, establish, carry on or facilitate the promotion, management, establishment or carrying on of any one of certain statutorily defined activities; and (3) that the accused formed a specific intent to promote, manage, establish, carry on or facilitate one of the prohibited activities. United States v. Gebhart, 441 F.2d 1261 (6th Cir. 1971). Put simply, the prosecution has failed to establish all elements of the offense.

INTENT

In enacting the legislation involved here, Congress 'required that there be intent to facilitate the carrying on of (some) business enterprise involving gambling in violation of state laws.' United States v. Miller,379 F.2d 483, 486 (7th Cir. 1967). The burden is upon the United States to prove intent. Turf Center, Inc. v. United States, 325 F.2d 793 (9th Cir. 1963).

Where, as in the travel act, intent to facilitate a criminal venture is expressly made part of the offense, we cannot extend the statute by holding that proof of a lesser mens rea is sufficient to establish the crime. In our opinion, in order for a prosecutor to show that a manufacturer has violated the travel act by selling punchboards and pulltabs under circumstances similar to those involved here, the prosecutor must show that the manufacturer in some significant manner associated himself with the purchaser's criminal venture for the purpose of its advancement. Were we not to define intent in the travel act in this manner, the act would be plagued by the very overexpansiveness which Congress sought to rule out by inclusion of an express mens rea requirement. Cf. United States v. Sin Nagh Fong, 490 F.2d 527 (9th Cir. 1974); United States v. Greer, 467 F.2d 1064 (7th Cir. 1972); United States v. Peoni, 100 F.2d 401 (2nd Cir. 1938); Model Penal Code 2.06(3)(a).

Applying the test delineated above to the stipulated facts, we conclude that the requisite specific intent has not been shown. None of the stipulations shows more than that a non-Montana manufacturer has produced catalogues, filled orders for punchboards and pulltabs from Montanans, billed the buyers, and received payment. In fact, the prosecution has baldly conceded in two of the stipulations that the defendants have no financial interest in or control over the Montana distributorships to which the punchboards and pulltabs were sold. There is no evidence in the record, direct or circumstantial, from which one could infer that the defendants associated with, participated in or sought to make succeed the Montana operations.

We have reached this conclusion without focussing upon the defendants' knowledge of Montana law. It is a question whether any of the defendants here knew what Montana law was with respect to punchboards and pulltabs. ⁶ And it is a question whether the familiar presumption that every person knows what the law forbids could aid the prosecution in establishing that defendants knew they were vending goods to violators of state law. Compare, Windsor v. United States, 384 F.2d 535 (9th Cir. 1967); United States v. Miller, 379 F.2d 483 (7th Cir. 1967); and Phillips v. United States, 356 F.2d 297 (9th Cir. 1965); with Turf Center, Inc. v. United States, 325 F.2d 793 (9th Cir. 1963). Nevertheless, we have assumed both that the defendants knew the text of the pertinent Montana statutes and that the construction placed on those statutes by the prosecution is correct. ⁷ Even making these assumptions, we cannot find that the defendants by selling to Montanans intended, within the meaning of the travel act, to facilitate a violation of state law. ⁸

FACILITATION

In the context of the travel act as well as in that of other statutes, the term 'facilitate' has been held to have its ordinary meaning: 'to make easy or less difficult.' United States v. Judkins, 428 F.2d 333 (6th Cir. 1970); United States v. Miller, 379 F.2d 483 (7th Cir. United States v. Teemer, 214 F.Supp. 952 (D.W.Va.1963); United States v. Barrow, 212 F.Supp. 837 (D.Penn.1962); United States v. One 1949 Ford Sedan, 96 F.Supp. 341 (D.N.C.1951). As some of the cited cases demonstrate, not every action which, in a literal sense, eases or renders less difficult a law violation has been held to constitute legal facilitation.

In Rewis v. United States, 418 F.2d 1218 (5th Cir. 1969), it was held that patronizing by interstate gamblers of a gambling establishment did not constitute 'facilitation' such that the gamblers themselves could be charged with violation of the travel act. The United States Supreme Court expressly approved the position taken on this issue by the Court of Appeals for the Fifth Circuit. Rewis v. United States, 401 U.S. 808, 811, 91 S.Ct. 1056, 28 L.Ed.2d 493 (1971). In so doing the Court noted the maxim that any ambiguity in criminal statutes should be resolved in favor of lenity. See also, United States v. Bass, 404 U.S. 336, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971); United States v. Isaacs, 493 F.2d 1124 (7th Cir. 1974). We are of the opinion that application of this familiar rule of statutory construction is warranted in the instant case.

There is another important consideration which leads us to our conclusion. A reading of the travel act as broad as that urged by the prosecution has the potential of altering sensitive federal-state relationships and could overextend limited federal police resources. Erlenbaugh v. United States, 409 U.S. 239, 247 n. 21, 93 S.ct. 477, 34 L.Ed.2d 446 (1972); United States v. Archer, 486 F.2d 670 (2nd Cir. 1973) (Friendly, J.).

The facts adduced here reveal aid and assistance to alleged Montana law violators of quite an...