U.S. v. One Big Six Wheel

• Decision Date: 03 December 1997
• Docket Number: No. 97-CV-6500 (ARR).,97-CV-6500 (ARR).
• Citation: 987 F.Supp. 169
• Parties: UNITED STATES of America, Plaintiff, v. ONE BIG SIX WHEEL, Defendant.
• Court: U.S. District Court — Eastern District of New York

987 F.Supp. 169

UNITED STATES of America, Plaintiff, v. ONE BIG SIX WHEEL, Defendant.

No. 97-CV-6500 (ARR).

United States District Court, E.D. New York.

December 3, 1997.

Stephen Kelly, United States Atty's Office, Brooklyn, NY, for plaintiff.

ROSS, District Judge.

In a recent case involving the Antiterrorism and Effective Death Penalty Act of 1996 (the "AEDPA"), Pub.L. 104-132, 110 Stat. 1214, Justice Souter remarked, "All we can say is that in a world of silk purses and pigs' ears, the Act is not a silk purse of the art of statutory drafting." Lindh v. Murphy, ___ U.S. ___, ___, 117 S.Ct. 2059, 2068, 138 L.Ed.2d 481 (1997). This case demonstrates how true this statement rings, as the court is called upon to discern the impact of a miscellaneous provision of the AEDPA on pre-existing section of the criminal code that deals with shipboard gambling. Over time, courts may derive much meaning from the 1996 enactment. With respect to this case, however, little is clear.

The shipboard gambling provision at issue here. 18 U.S.C. § 1081 (Supp.1997), is part of the Gambling Ship Act, codified at 18 U.S.C. §§ 1081-1084 (1984 & Supp.1997). Pursuant to the forfeiture provision of the Gambling Ship Act, 18 U.S.C. § 1082(c), and 28 U.S.C. § 2461(1994 & Supp.1997), the United States of America seeks the civil forfeiture of one Big Six Wheel, the defendant in rem. The Big Six Wheel is a gambling device on the Liberty I, a seagoing vessel leased and operated by Bay Casino, LLC ("Bay Casino"). Bay Casino operates gambling cruises-to-nowhere¹ from Sheepshead Bay in Brooklyn, New York. The United States and Bay Casino stipulate that on or about July 21, 1997, Bay Casino operated one or more gambling establishments, including one that made use of the defendant in rem Big Six Wheel, while Liberty I was situated more than three, but fewer than twelve, nautical miles from the shore of the United States. The United States claims that Bay Casino thereby operated a "gambling ship" in violation of the criminal proscription of the Gambling Ship Act,² and that the offending Big Six Wheel is therefore subject to forfeiture. Bay Casino has moved to dismiss the civil forfeiture action, claiming that its gambling cruise-to-nowhere fits within the "covered voyage exception"³ of the Gambling Ship Act. The United States for its part argues that the AEDPA extended the territorial sea of the United States from three nautical miles to twelve nautical miles, and in the process effectively amended the Gambling Ship Act (18 U.S.C. § 1081) such that a ship must now sail beyond the twelve nautical mile mark before its gambling activities commence if it is to fit within the covered voyage exception. This case thus presents the question of whether a vessel used principally for the operation of one or more gambling establishments must travel beyond twelve nautical miles from the shore of the United States in order to fit within the covered voyage exception, or whether a distance of three nautical miles continues to suffice notwithstanding the enactment of AEDPA.⁴ For the reasons stated below, this court is not prepared to conclude that the AEDPA changed the Gambling Ship Act's covered voyage exception from three to twelve nautical miles. Because the statute at issue is a criminal provision and the effect of the AEDPA is not clear, the court must apply the principle of lenity, which leads to resolution of ambiguity in favor of Bay Casino. See United States v. Thompson/Center Arms Co., 504 U.S. 505, 517-18, 112 S.Ct. 2102, 2109-10, 119 L.Ed.2d 308 (1992). Bay Casino's motion to dismiss the forfeiture complaint is therefore granted.

Statutory Background

The Gambling Ship Act was enacted in 1948 in response to the concern of a west coast state which prohibited gambling within its territory, but which was frustrated by the operation of commercial gambling ships in waters just beyond its jurisdiction. Water taxis ferried visitors between ship and shore so the gambling ship itself would not cross into the state's waters and thereby become subject to its jurisdiction. The Gambling Ship Act outlawed the operation of both the "floating casinos" and the water taxis that had brought passengers to the ships. See H.R.Rep. No. 102-242(I) (1991); H.R.Rep. No. 80-1700, reprinted in 1948 U.S.C.C.A.N. 1487.

Later, Congress became concerned with the toll that federal anti-gambling laws were taking on the U.S. cruise and shipbuilding industries. Foreign flag cruise ships were free to offer gambling beyond state waters, but their U.S. counterparts could not. To allow U.S. flag ships to offer gambling to their guests in the same manner as foreign flag ships, in 1992 Congress amended the Johnson Act, 15 U.S.C. §§ 1171-1178 (1982 & Supp.1997), and allowed U.S. flag ships to transport gambling devices. The 1992 amendment was not intended to alter the Gambling Ship Act, which prohibited the operation of vessels for the principal purpose of gambling. See H.R.Rep. No. 102-1092 (1992); 138 Cong. Rec. H68-02 (daily ed. Jan. 28, 1992); H.R.Rep. No. 102-357 (1991).

In 1994, however, Congress amended the Gambling Ship Act to permit, in effect, the operation of a vessel for the principal purpose of gambling. Specifically, the 1994 amendment added to the Gambling Ship Act (18 U.S.C. § 1081) a covered voyage exception that provided that the term "gambling ship" "does not include a vessel with respect to gambling aboard such vessel beyond the territorial waters of the United States during a covered voyage (as defined in section 4472 of the Internal Revenue Code of 1986 as in effect on January 1, 1994)." Under § 4472 of the Internal Revenue Code of 1986 (the "Code"), the term "covered voyage" includes a "voyage of ... a commercial vessel transporting passengers engaged in gambling aboard the vessel beyond the territorial waters of the United States, during which passengers embark or disembark the vessel in the United States." 26 U.S.C. § 4472 (Supp. 1997). An interpretive regulation of the Internal Revenue Service indicates that

For purposes of sections 4471 and 4472, the territorial waters of the United States are those waters within the international boundary line between the United States and any contiguous foreign country or within 3 nautical miles (3.45 statute miles) from low tide on the coastline.

26 C.F.R. § 43.4472-1 (1997). This regulation, setting U.S. territorial waters at the three nautical mile mark has remained constant from January 1, 1994 (the date to which 18 U.S.C. § 1081 refers), through the date that Congress amended 18 U.S.C. § 1081, and remains unchanged today.

The government does not contest that at the time Congress created the covered voyage exception in 1994, it was understood that one could lawfully operate a "gambling ship" so long as no gambling took place while the ship was within three nautical miles of the U.S. coastline.⁵ Such an understanding in 1994 was not surprising in light of the centuries-long history of the use of the term "territorial waters" to include the area of sea extending three nautical miles from the U.S. coast. Secretary of State Thomas Jefferson established the three mile limit in 1793 in order to place the coast out of cannon range, and that limit remained undisturbed by Congress for some 200 years. See, e.g., H.R.Rep. No. 102-843(I) (1992); H.R.Rep. No. 89-2086, reprinted in 1966 U.S.C.C.A.N. 3232; see also Cunard S.S. Co. v. Mellon, 262 U.S. 100, 122, 43 S.Ct. 504, 507, 67 L.Ed. 894 (1923) ("It now is settled in the United States and recognized elsewhere that the territory subject to its jurisdiction includes ... a marginal belt of sea extending from the coast line outward a marine league, or three geographic miles.").

The first sign that the three nautical mile conception of the territorial sea might change came in 1988 with a Proclamation of President Ronald Reagan, stating that "[t]he territorial sea of the United States henceforth extends to twelve nautical miles from the baselines of the United States determined in accordance with international law." 43 U.S.C. § 1331 (Supp.1997). This presidential proclamation came in response to the international legal community's recognition that a coastal nation could extend its territorial sea up to a limit of twelve nautical miles. See Convention on the Law of the Sea, Dec. 10, 1982, arts. 2 & 3 (reprinted in E.C. Benedict, Benedict on Admiralty, Doc. 10-6, at 10-78.3 (Frank L. Wiswall, Jr. ed., 1995)).

The presidential proclamation had only limited legal effect, however.⁶ Congress had to enact legislation in order to implement the expansion of the territorial sea with respect to existing law. See, e.g., H.R.Rep. No. 105-236, Title III (1997) (indicating that "while the President has the authority to expand our territory and sovereignty, only Congress has the authority to exercise legislative jurisdiction" and indicating that unamended laws have been enforced only to the three nautical mile limit); H.R.Rep. No. 102-843(I) (1992) (discussing bill intended to extend U.S. sovereignty to twelve nautical miles and corresponding extension of application of certain maritime laws, and noting need for implementing legislation to expand beyond three miles the geographic scope and effect of existing statutes using term "territorial sea").

One such piece of legislation implementing the twelve-mile limit was a miscellaneous provision of the AEDPA of 1996. That provision of the AEDPA, § 901, is entitled "Territorial Sea Extending to Twelve Miles Included in Special Maritime and Territorial Jurisdiction." It added the following to the Historical and Statutory Notes of 18 U.S.C. § 7:

"The Congress declares that all the territorial sea of the United States, as defined by Presidential Proclamation 5928 of December 27, 1988 [set out as a note under section 1331 of Title 43, Public Lands], for purposes of Federal criminal jurisdiction is part of the United States, subject to its sovereignty,...