U.S. v. Stuebben

• Decision Date: 10 September 1986
• Docket Number: No. 85-3713,85-3713
• Citation: 799 F.2d 225
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Michael J. STUEBBEN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 225

799 F.2d 225

UNITED STATES of America, Plaintiff-Appellee, v. Michael J. STUEBBEN, Defendant-Appellant.

No. 85-3713.

United States Court of Appeals Fifth Circuit.

Sept. 10, 1986.

John H. Craft, New Orleans, La., for defendant-appellant.

Rene C. McGinty, Asst. U.S. Atty., John P. Volz, C. Renee Clark, U.S. Atty., Joseph I. Giarusso, Asst. U.S. Attys., New Orleans, La., for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before GEE and HILL, Circuit Judges, and HUNTER, ^* District Judge.

GEE, Circuit Judge:

Appellant Stuebben was tried for transporting lottery paraphernalia in interstate commerce in violation of 18 U.S.C. Sec. 1301 and 18 U.S.C. Sec. 1953. Convicted on all counts, he now appeals, advancing two arguments, one statutory and the other constitutional. Disagreeing with his contention that his activity falls within an exception to Sec. 1953's coverage, we hold that he may properly be convicted under that statute. We also reject the constitutional challenge; even though lotteries are no longer condemned as an evil to society, these statutes do not violate Stuebben's right to substantive due process. Accordingly, we affirm his convictions.

Nearly all the facts of this case are undisputed. Stuebben ran a Louisiana company in the business of purchasing Illinois State Lottery tickets for his customers. He provided to various New Orleans restaurants, bars, and newstands lottery betting slips. Patrons of these establishments wishing to participate filled in the slips, indicating the numbers they selected. They then gave the completed forms, along with cash in the amount of the price of a lottery ticket plus Stuebben's fee of 50 percent of the ticket price, to designated employees of the establishments. Stuebben later picked up the forms and the money from these cooperating employees, placed the collected materials in envelopes, and delivered them to Chicago. In the beginning, he would fly to Chicago, where he would then call a favorite taxicab driver named Steve Almaseri to drive him to various Chicago locations selling lottery tickets. At these locations, he would purchase the tickets, picking the numbers his customers had requested. Later on, he abandoned this method; instead, he would send the forms to Almaseri by parcel shipping. Almaseri would pick them up, make the purchases, then send the tickets to Stuebben. Under either method, upon the tickets' arrival in New Orleans, Stuebben distributed them to everyone who had placed an order. On Saturday nights, all could get the lottery results by watching a Chicago station carried by New Orleans cable television.

Stuebben achieved great notoriety in the local media for this venture; unfortunately for him, the Federal Bureau of Investigation was watching too: following a period of surveillance, the F.B.I. arrested Stuebben in May 1985. A six-count indictment soon followed. Counts one, two, and three charged that Stuebben violated 18 U.S.C. Sec. 1301 ¹ by receiving lottery tickets from Chicago on three different dates. Counts four, five, and six charged that violations of 18 U.S.C. Sec. 1953 ² occurred when Stuebben used interstate commerce three times to transport the betting slips to Chicago. With the jury returning guilty verdicts on all six counts, the trial court sentenced him to one year for each of the first three counts, sentences to run concurrently; for each of the last three counts, he received three years supervised probation beginning after the prison term, sentences to run concurrently. Stuebben now appeals these convictions.

On appeal, he raises both statutory and constitutional arguments. Federal courts, if they can, should resolve cases on non-constitutional grounds. See Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 341, 56 S.Ct. 466, 480, 80 L.Ed. 688 (1936) (Brandeis, J., dissenting in part). In this spirit, we first look to Stuebben's statutory argument. He contends that he cannot be convicted for violating 18 U.S.C. Sec. 1953 because his activity falls within the list of exceptions set forth in Sec. 1953(b). At first glance, this subsection might appear to exclude from Sec. 1953's coverage the transportation of betting forms to a state where a lottery is legal:

(b) This section shall not apply to ... (4) equipment, tickets, or materials used or designed for use within a State in a lottery conducted by that State under authority of state law....

The statute's legislative history, however, makes clear that this is not the case. In 1975, Congress amended Sec. 1953(b) by adding paragraph (4). This amendment was part of legislation seeking to relieve states operating lotteries from the restrictions federal law then imposed. Specifically, the new law allowed the use of the mail, radio, and television within a state holding a lottery to provide information about that lottery. Then-existing restrictions were lifted, however, only to the extent necessary for intrastate publicity. This is shown in the House Report's enunciation of the purpose behind the legislation:

The purpose of the proposed legislation, as amended, is to amend existing provisions of law so as to permit the broadcasting of advertising, lists of prizes, or information concerning a State conducted lottery by a radio or television station licensed to a location in a State conducting a lottery under the authority of State law. The bill would similarly permit the mailing of newspapers published in the State containing advertisements, lists of prizes or information concerning a State conducted lottery. Under a separate subsection, the transportation or mailing of tickets and other materials concerning a State conducted lottery within the State to addresses within the State would be permitted.

H.R.Rep. No. 1517, 93rd Cong., 2nd Sess., reprinted in 1974 U.S.Code Cong. & Ad.News 7007, 7009. In congressional hearings, Justice Department witnesses voiced no opposition to this relaxing of federal law if certain conditions were met:

(1) the lottery activity is either (a) wholly within one state, or (b) between two states each of which conducts a lottery; and

(2) the lottery in every instance is conducted by a state agency acting under authority of law.

Id. at 7011. In explaining this view, the Justice Department informed the House what the amendments should not allow:

... [T]he Department would not favor any change in the law which would have the effect of opening up the channels of commerce to individuals who would seize upon the existence of a State authorized lottery to "commercialize the process." It was explained that this meant that the Department didn't want it to be possible for criminals to engage in interstate traffic of lottery tickets.

Id. The Congress agreed by making the amendments even more restrictive than the Justice Department had urged; it rejected any softening of restrictions for traffic in such materials between states that authorize lotteries. Id. at 7012. Instead, the 1975 legislation allows the use of radio, television, and the mail for "the transportation, mailing, and broadcasting of advertising, information, and materials concerning" a lottery alone within the state authorizing that lottery. As the House Report declared, "[t]he Committee desires to emphasize...