Affecting commerce: post Lopez review of the Hobbs Act.

• Author: Ferro, George P.
• Position: Case Note

1. INTRODUCTION

   This Note addresses what United States Supreme Court Justice Sandra Day O'Connor refers to as "our oldest question of constitutional law ... discerning the proper division of authority between the Federal Government and the States." (1) More specifically, the focus is how violations of the federal Hobbs Act (2) are affected by the Supreme Court's decision in United States v. Lopez. (3) Until Lopez, Congress encountered few, if any, obstacles regulating intrastate activity under the Commerce Clause. (4) Since Lopez, Congress has been permitted to regulate intrastate activity only when that activity has a substantial effect on interstate commerce. Although Lopez is arguably at odds with mid-twentieth century Commerce Clause jurisprudence, the Supreme Court has yet to overrule this test. (5) Other federal courts, however, have rejected the doctrine of Lopez in upholding federal statutes and affirming convictions. This begs the question of whether Lopez is limited to the narrow context in which it arose or whether the ruling encompasses additional areas--in particular, certain crimes under the Hobbs Act.

   How do activities such as bribery of local officials and violent crimes involve interstate commerce such that the federal government has jurisdiction to prosecute? Part II of this Note provides a comprehensive outline of Congress' power to regulate under the Commerce Clause. Part III discusses pre-Lopez violations of the Hobbs Act, while Part IV discusses the Lopez decision itself. Part V applies the substantial effect doctrine--as enunciated in Lopez--to recent lower court cases involving violations of the Hobbs Act, and Part VI discusses other federal criminal statutes and lower courts' refusals to apply Lopez. Finally, Part VII considers the interest of the federal government in prosecuting state crimes.

2. EARLY EXPANSION OF THE COMMERCE POWER

   Federal regulation under the Commerce Clause after the 1930s encountered little resistance by the Supreme Court. (6) In NLRB v. Jones and Laughlin Steel Corp., (7) the Court struck down a challenge to The National Labor Relations Act (8) that empowered the National Labor Relations Board to prevent any person from engaging in unfair labor practices "affecting commerce." (9) The National Labor Relations Board filed a complaint alleging that the respondent had been involved in "unfair labor practices" after the discharge of certain employees. (10) The Court found that "[a]lthough activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control." (11)

   Four years later, in United States v. Darby, (12) the Supreme Court upheld the Fair Labor Standards Act of 1938. (13) At issue was whether Congress had the power to halt the shipment of interstate goods when an employer was not adhering to fixed wage and hour mandates. (14) The Supreme Court concluded that Congress was not limited to regulating commerce where the activity was solely interstate in nature and noted that the power "extend[ed] to those activities intrastate which so affect interstate commerce ... as to make regulation of them appropriate means to the attainment of a legitimate end...." (15)

   Perhaps the most far-reaching example of Congress' power is evident in Wickard v. Filburn. (16) There, the Court was confronted with the constitutionality of the Agricultural Adjustment Act. (17) The respondent operated a small farm in Ohio that included a small area of wheat cultivated to feed both himself and his livestock. (18) Filburn grew 239 bushels of wheat in excess of the allotment imposed by the Secretary of Agriculture, subjecting himself to a penalty of 49 cents per excess bushel--a fine totaling $117.11. (19) Refusing to tender the fine, Filburn was denied a "marketing card" pursuant to the regulations, which would relieve a buyer of his goods from liability. (20) Filburn challenged the Secretary of Agriculture's authority to impose a fine on wheat grown solely for home consumption on the basis that the wheat was not, in any way, tied to interstate activity. (21) The court nevertheless upheld the statute, stating that "activity [can] be reached by Congress if it exerts a substantial economic effect on interstate commerce." (22) The Court held that intrastate activity--as long as it is economic or commercial in nature can be aggregated to show a substantial affect on commerce. (23)

   Following the Wickard decision, Congress enjoyed the luxury of the Supreme Court's application of the rational basis test to federal legislation. (24) The Supreme Court used this test in Heart of Atlanta Motel v. United States (25) to determine whether the petitioner could obtain an injunction to declare unconstitutional the enforcement of Title II of the Civil Rights Act of 1964 (26) as applied to the petitioner's motel. (27) Under the Supreme Court's rational basis review jurisprudence, all Congress was required to show was that it had a rational basis for concluding that racial discrimination in places of public accommodation affected interstate commerce. (28) Consequently, the Supreme Court upheld Title II as applied to the petitioner's motel finding no reason to disturb Congress' determination that the Civil Rights Act had an effect on interstate commerce. (29)

   The first application of the rational basis test in the area of criminal law occurred in Perez v. United States. (30) In Perez, the Supreme Court was confronted with the constitutionality of the Consumer Protection Act, (31) which federally criminalized loan-sharking activity. The defendant was involved in '"[e]xtortionate credit transactions,"' in which the defendant loaned money to victims and then required repayment in weekly installments. (32) The defendant repeatedly increased the weekly payment amounts which, in turn, forced the victims to borrow more money. (33) Typically, victims were ultimately forced to sell their assets to the lender in order to pay back the loan. (34) Rejecting the defendant's argument that Congress could not regulate purely intrastate activity, the majority stated that the economic effect of loan sharking--which drained over $350 million dollars a year from America's poor--usurped any contention that the activity was wholly intrastate. (35) Justice Stewart, dissenting, opposed the constitutionality of the statute, calling for facts that would provide that the criminal conduct proscribed by the statute actually affected interstate commerce, as opposed to being "local." (36)

3. THE HOBBS ACT BEFORE LOPEZ

   The plain text of the Hobbs Act provides nearly unlimited jurisdiction to federal prosecutors by allowing for the prosecution of anyone who uses extortion or threats of physical violence to affect commerce "in any way or degree." (37) While cases involving bribery under the Hobbs Act were scant in the period between the decisions in Perez and Lopez, in one example, United States v. Peete, (38) the defendant's conviction for taking a bribe was affirmed. (39) The record showed that the city council had authority over, and voted on, decisions made by the local land-use board to which a local real estate development company made a proposal for the construction of a business that would utilize materials that passed through interstate commerce. (40) The defendant, a city councilman, agreed that, in exchange for the defendant's favorable vote, the developers would pay the defendant $1,000 up front and another $1,000 after his vote was cast. (41) Rejecting the defendant's argument that Congress could not regulate an attempt to affect interstate commerce, the court sustained jurisdiction under the Hobbs Act based on the fact that the developers intended to utilize materials purchased through interstate commerce. (42) In reaching this conclusion, the Court determined that an actual effect on interstate commerce was not required to legislate in a given area. (43)

4. UNITED STATES V. LOPEZ

   Well established by the time of Lopez was the notion that Congress has the authority to regulate activity that falls into three categories: Activity dealing with the use of interstate channels; instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities; and, those activities having a substantial relation to interstate commerce. (44)

   In United States v. Lopez, (45) the defendant, a senior at a Texas high school, possessed a loaded handgun in a known school zone. (46) The defendant was charged with a violation of the federal Gun Free School Zone Act (47) but the charges were dismissed--a decision that the Supreme Court ultimately affirmed. (48) Concluding that the Gun Free School Zone Act did not fit into any of the three categories in which Congress held power to regulate, the Court held that:

   Section 922(q) is a criminal statute that by its terms has nothing to do with "commerce" or any sort of economic enterprise, however broadly one might define those terms. Section 922(q) is not an essential part of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were regulated. It cannot, therefore, be sustained under our cases upholding regulations of activities that arise out of or are connected with a commercial transaction, which viewed in the aggregate, substantially affects interstate commerce (emphasis added). (49) Essentially, the Court resurrected the...