United States v. Watts, Johnny P. ( 2001 )

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 00-4008 & 00-4166
United States of America,
Plaintiff-Appellee/Cross-Appellant,
v.
Johnny P. Watts,
Defendant-Appellant/Cross-Appellee.
Appeals from the United States District Court
for the Central District of Illinois, Peoria Division.
No. 00-10007-004--Joe B. McDade, Chief Judge.
Argued April 17, 2001--Decided July 5, 2001
Before Fairchild, Cudahy, and Coffey,
Circuit Judges.
Cudahy, Circuit Judge. On January 19,
2000, Johnny P. Watts and three
companions robbed a branch of the
Commerce Bank in Peoria, Illinois. While
two men jumped over the bank’s teller
counter and removed approximately
$55,000, Watts stood near the front door
and allegedly pointed a small-caliber
handgun in the direction of the bank
tellers./1 All four men were
apprehended shortly after the robbery.
The indictment charged Watts with armed
bank robbery (count one), in violation of
18 U.S.C. sec. 2113(a) and (d), and using
or carrying a firearm during a crime of
violence (count two), in violation of 18
U.S.C. sec. 924(c)(1). On July 13, 2000,
Watts pleaded guilty to both counts, but
reserved the right to pursue on appeal a
line of argument popular with criminal
defendants these days: whether Congress
exceeded its Commerce Clause power by
enacting the federal armed bank robbery
statute.
The district court sentenced Watts to 57
months of imprisonment on the armed bank
robbery count with minimal objection from
either the government or Watts.
Sentencing on the second count, use of a
firearm, proved more contentious. Section
924(c)(1)(A)(ii) increases the minimum
term of imprisonment from five to seven
years upon a finding that the firearm was
brandished during the crime. Because the
indictment did not charge Watts with
brandishing his firearm, the district
court believed that Apprendi v. New
Jersey, which holds that "[o]ther than
the fact of a prior conviction, any fact
that increases the penalty for a crime
beyond the prescribed statutory maximum
must be submitted to a jury, and proved
beyond a reasonable doubt," 530 U.S. 466,
490 (2000),/2 precluded the higher
seven-year mandatory minimum sentence
prescribed by sec. 924(c) (1)(A)(ii).
Accordingly, the district court declined
the government’s invitation to decide
whether Watts brandished his firearm
during the robbery and instead sentenced
Watts to a five-year term of imprisonment
on count two, to run consecutively with
the 57-month term of imprisonment he
received on count one.
Watts appeals his conviction, arguing
that the district court should have
dismissed count one because Congress
exceeded its Commerce Clause power when
it enacted the armed bank robbery
statute. The government cross-appeals
Watts’ sentence, arguing that the
district court should have considered
imposing a seven-year term of
imprisonment on count two because
Apprendi does not govern mandatory
minimum sentences.
I.
We first address Watts’ argument that
Congress exceeded its authority to
regulate interstate commerce under the
Commerce Clause when it enacted the
federal armed bank robbery statute, 18
U.S.C. sec. 2113. As might be expected,
Watts bases this argument on United
States v. Lopez, 514 U.S. 549 (1995)
(Gun-Free School Zones Act exceeded
Congress’ Commerce Clause power), and its
progeny, United States v. Morrison, 529
U.S. 598 (2000) (Violence Against Women
Act exceeded Congress’ Commerce Clause
power), and Jones v. United States, 529
U.S. 848 (2000) (construing reach of
federal arson statute to exclude owner-
occupied private property so as to avoid
Commerce Clause question). Collectively,
these cases teach that Congress’ power to
regulate under the Commerce Clause is
limited to three broad categories: "(1)
’Congress may regulate the use of the
channels of interstate commerce’; (2)
’Congress is empowered to regulate and
protect the instrumentalities of
interstate commerce, or persons or things
in interstate commerce, even though the
threat may come only from intrastate
activities’; (3) ’Congress’ commerce
authority includes the power to regulate
those activities having substantial
relation to interstate commerce.’" United
States v. Taylor, 226 F.3d 593, 598 (7th
Cir. 2000) (quoting Lopez, 514 U.S. at
558-59). These cases thus have put an end
to a 58-year sequence in which the
Supreme Court "consistently upheld
federal legislation against claims that
Congress had overstepped its authority
under the Commerce Clause." Id. (and
cases collected therein).
Watts advances a number of arguments in
an effort to show that the federal armed
bank robbery statute, 18 U.S.C. sec.
2113, falls into none of the above-noted
categories of permissible Commerce Clause
regulation. We need not discuss many of
these arguments because they so clearly
lack merit. See United States v. Wicks,
132 F.3d 383, 390 (7th Cir. 1997) (noting
that any argument which claims that sec.
2113 exceeds Congress’ powers under the
Commerce Clause would be untenable);
United States v. Harris, 108 F.3d 1107,
1109 (9th Cir. 1997) (noting that sec.
2113’s regulation of banks that are
insured by the Federal Deposit Insurance
Corporation (FDIC) ensures that Congress
has acted well within its Commerce Clause
power); United States v. Wilson, 73 F.3d
675, 694 (7th Cir. 1995) (Coffey, J.,
dissenting) (describing sec. 2113 as a
"properly framed" statute for Commerce
Clause purposes).
Nonetheless, Watts does present one
argument--regarding sec. 2113’s
jurisdictional reach over federally
insured banks--that is worth exploring in
slightly more detail./3 To further this
argument, Watts relies primarily on Jones
v. United States, 526 U.S. 227 (1999),
which involved a challenge to the federal
arson statute by a defendant who had set
fire to an owner-occupied private
residence. The arson statute at issue in
Jones limited its jurisdiction to
"property used in interstate or foreign
commerce or in any activity affecting
interstate or foreign commerce." As part
of its attempt to show that the private
residence satisfied this jurisdictional
requirement, the government pointed out
that the house in question was insured
under an insurance policy that had been
issued by an out-of-state insurer. The
Supreme Court rejected this argument,
finding that the interstate insurance
policy was insufficient to justify a
finding that the residence had been used
in interstate commerce. See Jones, 529
U.S. at 855-56.
Watts believes that, like arson, robbery
is the kind of "paradigmatic common law
crime" that requires more than proof of
interstate insurance coverage--such as by
the FDIC’s deposit insurance--before
Congress may prohibit the crime through
an exercise of its Commerce Clause
powers. Watts is even more convinced that
FDIC insurance does not provide a proper
basis for Congress’ exercise of its
Commerce Clause power because, as he was
informed in a letter from a senior
attorney at the FDIC, FDIC insurance does
not even cover losses due to robbery.
Accordingly, Watts is convinced that
Congress exceeded its Commerce Clause
power by turning the robbery of
federally-insured banks into a federal
crime.
We believe otherwise, for FDIC-insured
banks are fundamental to the conduct of
interstate commerce. Congress created the
FDIC to "keep open the channels of trade
and commercial exchange." Weir v. United
States, 92 F.2d 634, 636 (7th Cir. 1937).
As a result, "[t]he activities of an
FDIC-insured institution . . . affect
interstate commerce more than property
insured by a private carrier. . . . [T]he
government insurance is federally
administered, federal officials
periodically examine the accounts, and
the reports sent to the FDIC deal with
money that has been deposited from many
sources, including those outside the
state." United States v. Peay, 972 F.2d
71, 75 (4th Cir. 1992). Robberies of
FDIC-insured banks thus have an
interstate economic effect that is quite
independent of the coverage that FDIC
insurance extends to insured banks./4
It is therefore of no consequence that
FDIC insurance does not cover losses due
to robbery. Accordingly, at the very
least, the FDIC-insured financial
institutions are instrumentalities and
channels of interstate commerce and their
protection from robbery is well within
Congress’s Commerce Clause power. See
Harris, 108 F.3d at 1109.
II.
On cross-appeal, the government argues
that Apprendi-- which holds that "[o]ther
than the fact of a prior conviction, any
fact that increases the penalty for a
crime beyond the prescribed statutory
maximum must be submitted to a jury, and
proved beyond a reasonable doubt," 530
U.S. 466, 490-- does not govern mandatory
minimum sentences. As already noted,
count two of the indictment charged Watts
with a violation of 18 U.S.C. sec. 924,
which prescribes increasingly lengthy
mandatory minimum sentences depending on
the seriousness of the firearm’s use
during the crime; merely using or
carrying a firearm subjects the defendant
to a mandatory minimum five-year term of
imprisonment, sec. 924(c)(1)(A)(i), but
"brandishing" the firearm increases the
mandatory minimum to seven years, sec.
924(c)(1)(A)(ii). The district court
believed that Apprendi prevented it from
imposing the higher seven-year mandatory
minimum sentence because the indictment
did not charge Watts with brandishing his
firearm during the robbery. Accordingly,
the district court sentenced Watts to a
five-year term of imprisonment under sec.
924(c)(1)(A)(i) without determining
whether he brandished the firearm.
The government argues that the district
court incorrectly interpreted Apprendi
because Apprendi’s inapplicability to
statutory mandatory minimum sentences is
well-settled in this circuit, as well as
many of our sister circuits. See United
States v. Rodgers, 245 F.3d 961, 967-68
(7th Cir. 2001) (and cases collected
therein); United States v. Williams, 238
F.3d 871, 877 (7th Cir. 2001). Watts’
only argument in the face of such
overwhelmingly unfavorable precedent is
to ask us to ignore our precedent,
discount the majority’s discussion of
mandatory minimum sentences in Apprendi
and adopt the rule of the Sixth Circuit,
which is, as far as we can tell, the only
circuit that extends Apprendi’s reach to
mandatory minimum sentences.
In applying Apprendi to mandatory
minimum sentences, the Sixth Circuit
reasoned that "[t]he basic holding of Ap
prendi is twofold: first, that courts
must count any ’fact’ that increases the
’penalty beyond the prescribed statutory
maximum’ as an element of the offense
’except for one important exception,’
i.e., ’the fact of a prior conviction;’
and second, that it ’is unconstitutional
for a legislature’ to treat ’facts that
increase the prescribed range of
penalties to which a criminal defendant
is exposed’ as mere sentencing factors,
rather than facts to be established as
elements of the offense." United States
v. Ramirez, 242 F.3d 348, 350 (6th Cir.
2001) (emphasis in original). Focusing on
this supposed second holding of Apprendi,
the Sixth Circuit concluded "that ’the
assessment of facts that increase
theprescribed range of penalties to which
a criminal defendant is exposed,’ such as
moving up the scale of mandatory minimum
sentences, invokes the full range of
constitutional protections required for
’elements of the crime.’" Id. at 351
(quoting Jones v. United States, 526 U.S.
at 252 (Stevens, J., concurring)).
While the Sixth Circuit’s reading of
Apprendi is now perhaps a tenable one
(and might indeed be the wave of the
future), it is not, at this point, our
reading. It is true, as noted by the
Sixth Circuit, that the Apprendi majority
did quote Justice Stevens’ concurrence in
Jones for the proposition that "it is
unconstitutional for a legislature to
remove from the jury the assessment of
facts that increase the prescribed range
of penalties to which a criminal
defendant is exposed." See Apprendi, 530
U.S. at 490 (quoting Jones, 526 U.S. at
252 (Stevens, J., concurring)) (emphasis
added). However, the majority also
explicitly disclaimed any intent to
overrule McMillan v. Pennsylvania, 477
U.S. 79 (1986), which held that a
defendant’s due process rights were not
violated when a sentencing judge decided
facts that raised the defendant’s
mandatory minimum sentence using the
preponderance of the evidence standard.
See Apprendi, 120 S. Ct. at 2361 n.13.
Unlike the Sixth Circuit, we have
resolved the tension between these
seemingly contradictory statements by
looking to the more specific of the two:
"the majority opinion in Apprendi
specifically stated that, in cases
involving a mandatory minimum sentence,
the rule of Apprendi is not implicated
when the actual sentence imposed is less
severe than the statutory maximum."
Williams, 238 F.3d at 877. This is the
rule in this circuit, and, accordingly,
the district court erred by declining to
consider whether Watts was subject to a
mandatory minimum seven-year term of
imprisonment for brandishing his firearm
during the robbery.
III.
For the foregoing reasons, the judgment
of conviction is Affirmed and the sentence
is Vacated. The case is Remanded to the
district court for further proceedings
consistent with this opinion.
FOOTNOTES
/1 The record does not reflect what role the fourth
co-defendant played in the robbery.
/2 Technically, Apprendi does not separately address
whether facts that increase the maximum penalty
for a crime beyond the prescribed statutory
maximum must be charged in the indictment. See
530 U.S. at 477 n.3. However, the Apprendi major-
ity quotes with approval the holding in Jones v.
United States: "under the Due Process Clause of
the Fifth Amendment and the notice and jury trial
guarantees of the Sixth Amendment, any fact
(other than prior conviction) that increases the
maximum penalty for a crime must be charged in an
indictment, submitted to a jury, and proven
beyond a reasonable doubt." 526 U.S. 227, 243 n.6
(1999) (emphasis added). See Apprendi, 530 U.S.
at 476. It is perhaps for this reason that we
have nonetheless read Apprendi to require that
certain facts must be charged in the indictment,
as well as submitted to a jury and proven beyond
a reasonable doubt. See United States v. Noble,
246 F.3d 946, 955 (7th Cir. 2001); United States
v. Brough, 243 F.3d 1078, 1080 (7th Cir. 2001)
(and cases cited therein).
/3 Section 2113(f) also extends to banks that are
members of the Federal Reserve System. However,
the parties confine their discussion to
sec. 2113(f)’s jurisdiction over FDIC-insured
banks, and we do so as well.
/4 For the sake of completeness, however, we note
that even if FDIC insurance does not cover losses
due to robbery, the FDIC’s concern with robbery’s
impact on its insureds is illustrated by its
requirement that insured banks "adopt appropriate
security procedures to discourage robberies,
burglaries, and larcenies and . . . assist in
identifying and apprehending persons who commit
such acts." 12 C.F.R. sec. 326.0.