U.S. v. Woodruff, CR-93-0438-VRW.

• Citation: 941 F.Supp. 910
• Decision Date: 22 August 1996
• Docket Number: No. CR-93-0438-VRW.,CR-93-0438-VRW.
• Parties: UNITED STATES of America, Plaintiff, v. Kevin Paul WOODRUFF, et al., Defendants.
• Court: U.S. District Court — Northern District of California

941 F.Supp. 910

UNITED STATES of America, Plaintiff, v. Kevin Paul WOODRUFF, et al., Defendants.

No. CR-93-0438-VRW.

United States District Court, N.D. California.

August 22, 1996.

As Modified September 3, 1996.

COPYRIGHT MATERIAL OMITTED

Ephraim Margolin, Law Offices of Ephraim Margolin, San Francisco, CA, for defendants.

Craig J. Jacobsen, U.S. Attorney's Office, San Francisco, CA, for plaintiff.

ORDER

WALKER, District Judge.

Pending before the court is defendant's FRCrP 29 motion for judgment of acquittal. On May 23, 1996, the court issued a tentative decision granting defendant's motion. The court also invited the parties to submit further memoranda in light of that tentative decision and ordered them to appear for a hearing on July 2, 1996. At that hearing, the government, in addition to addressing the merits of the court's tentative decision, requested leave to file a motion to detain defendant pending appeal of the court's order. Briefing on the government's detention motion was completed August 2, 1996. For the reasons described below, the court now GRANTS defendant's motion for acquittal and GRANTS the government's motion to detain defendant pending appeal.

I

In United States v. Lopez, ___ U.S. ___, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995), the United States Supreme Court, for the first time in two generations, struck down an act of Congress as falling outside the outer limit of Congress' power under the Commerce Clause. In so doing, the Court reaffirmed the importance of the dual-sovereign nature of our system of government:

In the compound republic of America, the power surrendered by the people is first divided between two distinct governments, and then the portion allotted to each subdivided among distinct and separate departments. Hence a double security arises to the rights of the people. The different governments will control each other, at the same time that each will be controlled by itself. Id. at ___, 115 S.Ct. at 1638 (Kennedy, J. and O'Connor, J., concurring) (quoting The Federalist No 51, p 323 (J. Madison) (C. Rossiter ed 1961)); see also Gregory v. Ashcroft, 501 U.S. 452, 458-59, 111 S.Ct. 2395, 2400, 115 L.Ed.2d 410 (1991) ("Just as the separation and independence of the coordinate branches of the Federal Government serve to prevent the accumulation of excessive power in any one branch, a healthy balance of power between the States and the Federal Government will reduce the risk of tyranny and abuse from either front. * * * In the tension between federal and state power lies the promise of liberty."); New York v. United States, 505 U.S. 144, 181, 112 S.Ct. 2408, 2431, 120 L.Ed.2d 120 (1992) ("[T]he Constitution divides authority between federal and state governments for the protection of individuals. State sovereignty is not just an end in itself: Rather, federalism secures to citizens the liberties that derive from the diffusion of sovereign power.") (internal quotation omitted).

In their concurring opinion, Justices Kennedy and O'Connor further reviewed the important motivations underlying protection of these fundamental precepts of federalism:

The theory that two governments accord more liberty than one requires for its realization two distinct and discernible lines of political accountability: one between the citizens and the Federal Government; the second between the citizens and the States. If, as Madison expected, the federal and state governments are to control each other, see The Federalist No. 51, and hold each other in check by competing for the affections of the people, see The Federalist No. 46, those citizens must have some means of knowing which of the two governments to hold accountable for the failure to perform a given function. `Federalism serves to assign political responsibility, not to obscure it.' FTC v. Ticor Title Ins Co, 504 U.S. 621, 636, 112 S.Ct. 2169, 2178, 119 L.Ed.2d 410 (1992). Were the Federal Government to take over the regulation of entire areas of traditional state concern, areas having nothing to do with the regulation of commercial activities, the boundaries between the spheres of federal and state authority would blur and political responsibility would be illusory. The resultant inability to hold either branch of the government answerable to the citizens is far more dangerous even than devolving too much authority to the remote central power.

Lopez, ___ U.S. at ___, 115 S.Ct. at 1638 (Kennedy, J. and O'Connor, J., concurring) (internal citation omitted).

It is the responsibility of all officers of the government to respect this constitutional design. Id. at ___, 115 S.Ct. at 1639 (citing Public Citizen v. Department of Justice, 491 U.S. 440, 466, 109 S.Ct. 2558, 2573, 105 L.Ed.2d 377 (1989)). As it did in Lopez, the judiciary must act "when one or the other level of Government has tipped the scales too far," as the "federal balance is too essential a part of our constitutional structure and plays too vital a role in securing freedom for [a court] to admit inability to intervene." Id.

It is with these principles in mind that the court reluctantly finds itself compelled to intervene to correct an imbalance in the scales of power. The Hobbs Act, 18 U.S.C. § 1951(a), makes criminal the conduct of anyone who "in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion * * *." As should be clear from the plain language of this statute, Congress did not intend to reach, nor did it purport to reach, every robbery and extortion. In just the same way, the Framers did not intend that federal authority under the Commerce Clause reach all business transactions and certainly not all non-business activities which affect commerce in some incidental fashion. While the court does not suggest that the Hobbs Act was beyond the authority of Congress to enact, the court concludes that the government's prosecution of this case under the Hobbs Act fails to respect the constitutional limits applicable to the Hobbs Act. Implicit in every prosecution under the Hobbs Act is the government's determination that the conduct of the defendant is the proper subject of federal action. The court believes that this determination under the facts at hand is incorrect.

For the reasons discussed below, the court finds that the government has crossed the line that circumscribes its authority in this case as it has failed to show either that defendant's conduct had a substantial effect on interstate commerce or that defendant's activities were of a class of activities that, in the aggregate, would lead to a substantial effect on commerce.

II

A

This case arises out of events occurring between March 1 and March 29, 1991. The government's evidence at trial proved that defendant robbed three jewelry stores and attempted to rob a fourth one. All four stores were located in three counties of northern California.

The first robbery occurred on or about March 1, 1991, when defendant robbed Mark Areias Jewelers in Aptos, California. As a result of the robbery, the store lost approximately $200,000 worth of jewelry and was unable to conduct business for three days. Although the store purchased at least 50% of its inventory from out of state, it served mostly local customers. Nicolle Callahan, a witness for the government, testified that the robbery caused no change in the way the store dealt with out-of-state suppliers and that the store still purchases the same amount of its merchandise from out of state.

On March 12, 1991, defendant robbed Shreve & Co. Jewelers in Walnut Creek, California, resulting in the loss of approximately $300,000 worth of jewelry. The store had to replace the stolen jewelry and was shut down for one day after the robbery. At trial, Peter Fogel, former president of Shreve & Co., testified that at least 90% of the jewelry in the Walnut Creek store came from out of state. Fogel also testified that his company did not reduce its inventory or change its out-of-state buying practices as a result of the robbery. The store's clientele was comprised mainly of local residents. Shreve & Co. operates in California but was at the time owned by a company headquartered in Minneapolis, Minnesota.

On March 29, 1991, defendant attempted to rob Sam Bloch Jewelers in Hayward, California. Although the store did not lose any inventory, it was closed for one or two days and was unable to conduct business during that time. At trial, Nathan Stone, the owner, testified that the store purchased 75%-80% of its jewelry from out of state, but that most of its customers and operations were local.

Defendant, on the same day of the attempted robbery at Sam Bloch, robbed Golden Treasures Jewelers in Montclair, California. The owner of the store, Arthur Oppenheimer, testified that he lost approximately $118,000 in jewelry, 75% of which he had handmade. According to Oppenheimer, Golden Treasures was closed for business for a few days due to the robbery and has still not fully recovered the loss. Oppenheimer testified that, as a result of the robbery, he could not conduct business as usual for quite some time after the robbery because he did not have the necessary parts to manufacture the jewelry sold in his store.

On August 20, 1993, defendant was indicted on four counts of interfering with commerce by robbery under the Hobbs Act, 18 U.S.C. § 1951. During the course of trial, defendant moved for judgment of acquittal pursuant to FRCrP 29. The court reserved decision until after the jury had reached a verdict. On January 29, 1996, the jury convicted the defendant on all four counts. Thereafter, defendant timely renewed his motion for judgment of acquittal contending that the government's evidence was insufficient to sustain a conviction under the Hobbs Act.

B

The test for determining whether to grant a motion under FRCrP 29 is whether, viewing the evidence in the light most favorable to the government,...