OPINION
The defendant, Richard D. Goldberg, has moved to dismiss an indictment of him for, inter alia, mail fraud (18 U.S.C. §§ 1341, 1346) and violation of the Travel Act (18 U.S.C. § 1952). He argues that his prosecution under these statutes violates “the principles of federalism and the Tenth Amendment.” Specifically, he claims that the mail fraud statute is unconstitutional because it allows for federal prosecution of an act that is not prohibited by federal law, and that the Travel Act, as applied to his case, fails to meet the constitutional standards for “affecting commerce.” 1
Goldberg’s federalism argument may be divided into two broad categories, based on two Supreme Court cases,
McNally v. United States,
Most circuits, including this one, have explicitly recognized that § 1346 overrules McNally. This court concludes that, for the reasons set forth below, Goldberg’s argument is unsupported by McNally itself, or by the cases preceding and following it.
In the second part of Goldberg’s argument (the Lopez argument), Goldberg claims that his challenged activity is “inherently local” and does not “substantially affect” interstate commerce, such that it meets Lopez's requirements for congressional regulation under the commerce clause. After considering Lopez and the eases cited by Goldberg, the court concludes that Goldberg does not make a claim that would justify dismissing the indictment.
The court will address these arguments in turn.
Goldberg also makes an argument based on a paragraph he excerpts from the Supreme Court’s opinion in
Garcia v. San Antonio Metro. Transit Auth.,
I. Facts
In July of 1995, a federal grand jury indicted Goldberg on various charges (including mail fraud, wire fraud, violation of the Travel Act, and conspiracy) in connection with what the government contends was the provision of illegal gratuities to members of the Massachusetts Legislature. 2 The government alleges that Goldberg attempted to influence members of the Legislature improperly in his efforts to get favorable treatment by the Legislature with respect to certain property he owned. Goldberg is the owner of a valuable off-site parking lot at Boston’s Logan Airport. During the period covered by the investigation that resulted in this indictment, the Commonwealth of Massachusetts was considering taking the lot by eminent domain for use in a major highway construction program called the Central Artery/Third Harbor Tunnel Project. Goldberg was allegedly seeking to influence the Massachusetts Legislature to approve an alternate route for the construction that would not require taking his property, or to influence the Legislature to approve better terms and compensation for the taking of his property than he could have received in the eminent domain procedure.
Specifically, Goldberg'allegedly allowed a one or more legislators to use, without paying for it, a summer vacation home Goldberg had rented. The house, a rental property, is located in this Commonwealth, on Cape Cod; all the principals involved (Goldberg, the *92 Legislator(s), and a lobbyist) are also located in Massachusetts. The owner of the vacation home resides out of state.
II. Argument and Analysis
A. McNally Argument
1. “Intangible Rights” Doctrine Defined
Goldberg seeks to take advantage of some judicial confusion over the status of what is known as the “intangible rights doctrine” under the mail fraud statute. This doctrine originated in court decisions to the effect that the mail fraud statute applied to schemes “to defraud citizens of their ‘intangible rights to honest and impartial government.’ ” '
United States v. Silvano,
Silvano
provides the First Circuit’s pre
McNally
reasoning on this issue. The defendants in that ease, a Boston city official and a friend of his, were convicted of mail fraud for attempting to get kickbacks from the city’s health insurance provider. Silvano argued that “Congress did not intend to extend the mail fraud statute, 18 U.S.C. § 1341
3
, to local political matters, absent a particular federal interest.”
Silvano,
the purpose of the statute was to curb swindles and securities fraud, not corruption in local government. Application of the mail fraud statute to this case, which ... involves “only a tenuous or contrived connection to federal law” is ... well beyond the contemplation of Congress and contravenes the basic principles of federalism and criminal law.
Id. The First Circuit flatly disagreed with this contention:
The Supreme Court rejected this federalism argument long ago. Badders v. United States,240 U.S. 391 [36 S.Ct. 367 ,60 L.Ed. 706 ] (1916) [parallel citations omitted] (Whatever the limits to its power, Congress may forbid putting letters into the post office when such acts are “done in furtherance of a scheme that it regards as contrary to public policy, whether it can forbid the scheme or not.”). See also Parr v. United States,363 U.S. 370 [80 S.Ct. 1171 ,4 L.Ed.2d 1277 ] (1960) [parallel citations omitted]. This court has specifically stated that Congress enacted the mail fraud statute to protect the integrity of the mails and that it reaches use of the mails “to implement fraudulent schemes directed at a state agency.” United States v. Rendini,738 F.2d 530 , 533 (1st Cir.1984). [citations omitted.]
Id. The court then decided that “the mail fraud statute proscribes use of the mails to defraud a state and its citizens” of the intangible right to honest and impartial government. Id. at 759. The reasoning in Silvano would decisively foreclose Goldberg’s current federalism argument, were it not for a rather confusing subsequent history for the “intangible rights” doctrine.
2. McNally and 18 U.S.C. § 1346
During the same year in which
Silvano
was decided, the Supreme Court decided
McNally v. United States,
The Supreme Court narrowed the import of
McNally
with its decision in
Carpenter v. United States,
Carpenter's effect on McNally was substantial. As one commentator states,
the holding in Carpenter served to narrow the McNally decision to the precise circumstance of the absence of injury to any property right, tangible or intangible. These decisions established, therefore, that depriving an employer, public or private, of loyal services was not within the scope of the mail fraud statute ...
Stanley S. Arkin et al., Business Crime ¶ 32.03[2]Od] (1995). This narrow scope, if left intact, would nonetheless cover Goldberg’s ease.
In the next year, however, Congress overruled McNally by statute when it enacted 18 U.S.C. § 1346. That Section defines the “scheme or artifice to defraud” element of a mail fraud claim to include “a scheme or artifice to deprive another of the intangible right of honest services.” Id.
Senator Biden, then Chair of the Senate Judiciary Committee, clarified the import of this new section:
This section overturns the decision in McNally v. United States in which the Supreme Court held that the mail and wire fraud statutes protect property but not intangible rights. Under the amendment, those statutes will protect any person’s intangible right to the honest services of another, including the right of the public to the honest services of public officials. The intent is to reinstate all of the pre-McNally easelaw pertaining to the mail and wire fraud statutes without change.
134 Cong.Rec. S17360-02 (daily ed., Nov. 10, 1988) (Senator Biden).
Though this statement and the statute itself seem straightforward, in truth the statute, at least, is anything but. Commentators agree that the statute is intended to resurrect pre-McNally easelaw;
4
and courts, including the Court of Appeals for the First Circuit, are in accord.
United States v. Sawyer,
Despite this apparent agreement about Congress’ intent in enacting § 1346, however, the ongoing effects of McNally itself have been unclear. This is the crack through which Goldberg attempts to escape his indictment. The unanswered question of which *94 Goldberg seeks to take advantage is, “[w]hether that language [of § 1346] in fact cures all the problems [that] surfaced in the months following the McNally decision---[I]t is not necessarily clear that ‘honest services’ embraces all the intangibilities that government prosecutors might want to advance as bases for § 1341 prosecutions.” B.J. George, Jr., Contemporary Federal Criminal Practice § 6-58 (2d ed. 1993); see also Obermaier & Morrillo, supra n. 4 at § 9.02[f][iv] (“The statute was widely seen and no doubt intended to reverse McNal ly____ Clearly, it reinstates earlier cases, such as United States v. Margiotta, that criminalized any breach of duty by a public or quasi-public official.” Id.)
In a related vein, Goldberg also argues that § 1346 does not display a sufficiently clear intention to overcome the Supreme Court’s admonition in McNally that Congress must “speak clearly” so that the federal government would not be in the position of legislating ethical and other normative conduct for state officials.
The question of which law — state or federal — governs the ethical issues that underlie McNally and similar cases has, until the First Circuit’s recent decision in Sawyer, remained unanswered. As one commentator framed the question, it is
What body of law gives rise to the “duty of honest services”? Is it agency law, state statutory law, or some version of federal common law? This question, long ignored, has been made explicit by Section 1346. If the answer is state law, then the substantive content of the mail and wife fraud statutes could vary across the country, but a federal common law of fiduciary duties has long been resisted by the Supreme Court.
Obermaier & Morvillo, supra n. 3, at § 9.02[f][iv]. 5 .
The
Sawyer
decision makes great strides toward answering these questions, as they pertain to the elements of a § 1346 case. Specifically, that decision dictates that, though it is not necessary that the government prove a violation of the underlying state law,
Sawyer,
In other words, what the
Sawyer
opinion makes clear is that mere violation of a state ethics law, standing alone, does not suffice to establish the intent to deprive the citizenry of the “honest services” of a government official, and is therefore insufficient to establish a violation of the mail fraud statute. Something other than a state ethics law violation — for example, evidence of “the defendant’s fraudulent intent,”
Sawyer,
Given Sawyer’s definition of the elements of “honest services” deprivation under § 1346, this court concludes that Goldberg’s concern about federalized ethical standards is inapplicable. To be successful, a prosecution of Goldberg under § 1346 will require that the government prove more than mere state-law violations; the government will also be required to prove the intent to deprive the public of the official’s honest services. By *95 clarifying this element of a § 1346 charge, the First Circuit has eliminated any lingering federalism concerns and has answered the question of which law, state or federal, serves as the basis for a prosecution such as this one.
B. Lopez Argument
1. The Lopez Case
Congress is a body with limited, enumerated powers. One of those powers is that Congress may “regulate commerce with foreign Nations, and among the Several States, and with the Indian Tribes.” U.S. Const., Art. I, § 8, cl. 3.
Last year, the Supreme Court heard and decided the first significant commerce clause case in decades. That ease,
United States v. Lopez,
— U.S. -,
Lopez
sets forth the three “broad categories of activity that Congress may regulate under its commerce power.”
Lopez,
— U.S. at -,
The Court in
Lopez
summarized what it admitted was uneven easelaw on whether activities in the third category must “affect”, or “substantially affect” interstate commerce, then held that “substantially affect” was the standard.
Id.
at -,
The First Circuit has not yet published an opinion devoted to interpreting Lopez. 6 The other courts of appeals that have construed the case do not speak with one voice on issues relevant to Goldberg’s case: first, does the inclusion of a “jurisdictional element” in the statute provide a sufficient commerce nexus by requiring a case-by-case analysis of the activity’s relation to commerce, or is the inclusion of a jurisdictional element merely indicative of a likely-sufficient commerce nexus? Second, does Lopez require that any congressional regulation under the commerce clause “substantially affect” commerce, or does that test apply only to the third category of regulation (substantial relation to interstate commerce)?
2. Requirements of the Travel Act
The Travel Act, 18 U.S.C. § 1952, provides (in relevant part):
(a) Whoever travels in interstate or foreign commerce or uses any facility in interstate or foreign commerce, including the mail, with intent to— ... (3) otherwise promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, or any unlawful activity, and thereafter performs or attempts to perform any of the acts specified [above], shall be [fines and maximum sentences omitted], (b) As used in this *96 section “unlawful activity” means ... (2) extortion, bribery, or arson in violation of the laws of the State in which committed or of the United States.
18 U.S.C. § 1952.
This court understands Goldberg to be attacking the charges against him on the following grounds: first, he claims that the Travel Act violates some general principle of federalism by allowing the federal government to “regulate state legislative services.” This is the same argument Goldberg attempts to make above, under
McNally.
It relies on his expansive reading of
Garcia v. San Antonio Metro. Transit Auth,
Goldberg’s second ground for challenging his Travel Act prosecution is that “[a]ctions may only constitute a federal offense under the Bribery Act [sic] if the interstate acts are central to the scheme, not ‘incidental’ to it.” Defendant’s Memorandum of Law at 9. This argument fundamentally mischaracterizes applicable law. The First Circuit has stated that “[t]here is ‘no requirement that the use of the interstate facilities be essential to the scheme: it is enough that the interstate travel or the use of interstate facilities make easier or facilities [sic] the unlawful activity.’ ”
United States v. Arruda,
Goldberg’s third argument is that “all of the alleged significant conduct underlying this indictment was local,” Defendant’s Memorandum of Law at 10, and that therefore there is an insufficient commerce nexus to support federal jurisdiction. He argues that the house is local, and therefore not involved in commerce, and that the activities were local. This court concludes that Goldberg cannot prevail on either of these arguments, for the reasons discussed below.
3. Interpreting Lopez — Test of Commerce Nexus
As noted above, this court reads
Lopez
as denominating three categories of congressional power under the commerce clause. Activities whose regulation falls into the third category, “activities having a substantial relation to interstate commerce,” must “substantially affect” interstate commerce in order for their regulation to be proper. Activities whose regulation falls into the first and second categories (“the use of the channels of interstate commerce” and “the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities”) are not subject to the “substantially affect” test, since they contain a “jurisdictional element” to ensure that, in any given case, there is a sufficient commerce nexus to support the regulation. The reason for this distinction, as explained by the
Lopez
Court, is that such a jurisdictional element “ensure[s], through case-by-case inquiry, that the [alleged violation] in question affects interstate commerce.”
Lopez,
— U.S. at -,
This interpretation is supported by the Eighth Circuit’s decision in
United States v. Robinson,
First, the carjacking statute, on its face, regulates an item in interstate commerce: the statute addresses only the taking by force of motor vehicles that have been “transported, shipped, or received in interstate commerce.” 18 U.S.C. § 2119. Therefore, the carjacking statute fits squarely within the second category of activities regulable by Congress under the commerce clause, not requiring a separate showing that the intrastate activity substantially affects interstate commerce. *97 Second, the statute, by virtue of the same provision, included the requirement of a case-by-case showing of a nexus between the intrastate activity and interstate commerce; if the government cannot show that the motor vehicle was transported, shipped, or received in interstate commerce, an element of the carjacking crime has not been proven, and the statute will not apply.
Id. at 236-37 (internal footnote and citation omitted; emphasis added).
Most cases since
Lopez
have been “third category” cases, so the question of whether activities in the second category must “substantially
affect”
interstate commerce has not often arisen. Some courts have considered statutes having a “jurisdictional element” under the third category analysis (“substantial effect”), while other courts find the inclusion of a jurisdictional element alone sufficient to satisfy the requirements of the commerce clause and remove the statute from the third category.
Compare United States v. Pappadopoulos,
This Circuit appears (though the brevity of its discussion leaves the matter somewhat unclear) to have taken the latter approach— that is, that a statute which includes the jurisdictional element need not satisfy the “substantial effects” test.
United States v. Diaz-Martinez,
The Third, Eighth, and Tenth Circuits have also considered
post-Lopez
challenges to statutes’ constitutionality, as follows: The Third Circuit, considering .the federal carjacking statute (18 U.S.C. § 2119), found without discussion that the statute fell into the third category, and applied the “substantial effects” test, noting that the statute had a jurisdictional element.
United States v. Bishop,
This barrage of cases demonstrates that easelaw is unsettled about the proper inquiry under a “second category” test, as well as the method for determining the category in which to place a particular statute.
This court concludes that the Travel Act falls into Lopez’s second category, since the Act evidences Congress’ regulation of “the instrumentalities of interstate commerce, or persons or things in interstate commerce,” which is proper “even though the threat may come only from intrastate activities,”
Lopez,
— U.S. at-,
Therefore, this court is satisfied that the Travel Act constitutes a lawful exercise of Congress’ power to regulate interstate commerce, as explained by the Supreme Court in Lopez.
For the foregoing reasons, the defendant’s motion is DENIED.
So ordered.
Notes
. Yesterday, the Court of Appeals for the First Circuit decided
United States v. Sawyer,
. Specifically, Goldberg is charged with violating the following statutes: 18 U.S.C. §§ 2, 371, 1341, 1343, 1346, and 1952.
. The section at issue in this motion, 18 U.S.C. § 1346, was added to the mail fraud statute after Silvano was decided, and clarifies the prohibition set forth in 18 U.S.C. § 1341.
. See, e.g., Otto G. Obermaier & Robert G. Morvillo, White Collar Crime: Business and Regulatory Offenses (1994) ("When Congress enacted 18 U.S.C. § 1346 in 1988, it restored to prosecutors the option of charging mail fraud, based on a scheme to 'deprive another of the intangible right of honest services.’ Thus, at a strike, such cases as Mandel and Margiotta once again became good law.” Id. at § 9.02[l][f][ii]); Arkin, supra, at ¶ 32.03[2][b] ("Since the passage of § 1346, a scheme to defraud is once again actionable if it is directed to a deprivation of ... the right of honest and faithful services, governmental or otherwise.” Id.).
. Obermaier and Morvillo go on to state that "the view that fiduciary duties are defined by state law has been repeated on several occasions by the Supreme Court and is most forcefully stated in
Santa Fe Indus, v. Green,
. The Circuit did recently refer to
Lopez,
in its opinion in
United States v. Diaz-Martinez,
. Construing the Travel Act in this case, the Second Circuit stated, "Use of the mails, whether to mail a letter across the street or across the nation, historically has been recognized by Congress as use of an exclusively federal instrumentality.”
Riccardelli,
For purposes of the Travel Act, and not the commerce clause, the question is less settled. The Sixth Circuit has also considered the question of whether an intrastate mailing suffices to invoke Travel Act jurisdiction, and came to the contrary conclusion. In
United States v. Barry,