Crime & Federalism

I want to plug a newsletter I've been reading for a while.  Mark Stancil offers the best summaries of Supreme Court opinions.  They're also (usually - sometimes he tries too hard) funny.  Here's an excerpt from his most recent newsletter:

Greetings, sportsfans.  Today was International Smugglers' Day at the Supreme Court, with a pair of opinions bringing bad news for bootleggers and good news for a would-be arms dealer.

Pasquantino v. United States (03-725) - Give the petitioners here credit for creativity.  First, they dreamed up a scheme to buy liquor on the cheap in the U.S. and smuggle it into Canada without paying the latter's oppressive excise taxes (think "Strange Brew" meets "Smokey and the Bandit").  Second, when indicted by the U.S. for wire fraud, they argued that the little-known "common-law revenue rule" bars application of  U.S. criminal statutes to "enforc[e] the tax laws of foreign sovereigns."  A panel of the Fourth Circuit agreed, but the en banc court reversed and upheld petitioners' convictions.  The Supreme Court affirmed.  Justice Thomas-joined by the Chief, Stevens, O'Connor, and Kennedy-took his maple-syrup-sweet time with this one.  He first determined that petitioners' scheme "falls within the literal terms of the wire fraud statute," 18 U.S.C. § 1343, because petitioners used interstate wires (they called in their orders to discount liquor stores in Maryland) in furtherance of a "scheme or artifice to defraud" a victim of "property."  Petitioners' assertions to the contrary notwithstanding, "Canada's right to uncollected excise taxes on the liquor petitioners imported into Canada is 'property' in its hands."  Unlike Cleveland v. United States, 531 U.S. 12 (2000), where the court held that an unissued video poker license was only a regulatory interest and not "property," here Canada has "a straightforward 'economic' interest" in the revenue."  "How else do you expect Canada to pay for all those Commie social programs like universal health care and Kids in the Hall," Thomas added.  He next rejected petitioner's argument that the common-law revenue rule excepted "frauds directed at evading foreign taxes" from the wire fraud statute.  It was not at all clear that the rule would have prohibited this prosecution when Congress enacted § 1343 in 1952, Thomas concluded, and he refused to draw the opposite inference from the-gasp!-foreign cases upon which petitioners relied.  In any event, none of those cases "barred an action that had as its primary object the deterrence and punishment of fraudulent conduct-a substantial domestic regulatory interest entirely independent of foreign tax enforcement."  To the extent U.S. law might require petitioners to pay restitution to Canada, which would come closer to offending the common-law rule, they can just get a pass.  Thomas then rejected petitioners' analogy to "early English common-law cases" enforcing contracts with the illegal purpose of evading foreign revenue laws.  Whereas those cases were designed to promote commerce in the face of "high tariffs," by the 20th Century the focus of the rule had shifted to avoiding the appearance of enforcing another sovereign's penal laws.  Thomas closed by disputing Justice Ginsburg's suggestion in dissent that the Court's holding gives the wire fraud statute extraterritorial effect.  "[The] domestic element of petitioners' conduct is what the Government is punishing in this prosecution," Thomas explained, "no less than when it prosecutes a scheme to defraud a foreign individual or corporation, or a foreign government acting as a market participant."

All you need do to subscribe is send Mr. Stancil an e-mail.  Mark [dot] Stancil [at sign] bakerbotts [dot] com