UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
August 5, 1985
UNITED STATES OF AMERICA, against PETER BENNERSON, Defendant.
The opinion of the court was delivered by: HAIGHT
MEMORANDUM OPINION AND ORDER
HAIGHT, District Judge :
Defendant is alleged to have stolen a $274 Treasury check, forged an endorsement on it, and cashed it. In a two-count indictment filed December 21, 1984, he was charged with stealing a thing of value of the United States, in violation of 18 U.S.C. § 641, and forging an endorsement on same in violation of 18 U.S.C. § 510. Upon realizing that the theft, although not the forgery, occurred outside the Southern District of New York, the Government on March 21, 1985, filed a one-count superceding indictment charging defendant with uttering as true a false writing in order to obtain money from the United States, in violation of 18 U.S.C. § 495. In an opinion dated May 28, 1985, the Court dismissed that indictment as filed in violation of the Speedy Trial Act, specifically 18 U.S.C. § 3161(b).
Undaunted, the Government filed a second superceding indictment on June 13, 1985, once again charging the defendant with concealing and retaining within this district the check which he allegedly stole in a borough outside the district.
Defendant moves to dismiss the second superceding indictment on the ground that Congress did not intend the various acts connected with theft and forgery of a Treasury check of value less than $500 to be chargeable as a felony. Section 641,
enacted in 1948, forbids the theft of "any record, voucher, money, or thing of value of the United States" and the knowing receipt or concealment of such stolen property. The language of the statute seems broad enough to encompass the acts of which defendant is accused, and defendant does not contest its facial applicability. He contends, however, that 18 U.S.C. § 510, enacted in 1983, was intended to displace all other federal criminal statutes which could conceivably forbid the various acts connected with concealing and fraudulently cashing stolen government checks. Section 510
proscribes the forging of endorsements on, inter alia, government checks, the passing falsely endorsed government checks, and the receipt or concealment of stolen or falsely endorsed government checks. If the face value of the check involved is under $500, as here, a violation of § 510 is a misdemeanor. A violation of § 641 is a felony unless, as is not the case here, the value of the stolen property is under $100.
The leading modern case in this area is United States v. Batchelder, 442 U.S. 114, 60 L. Ed. 2d 755, 99 S. Ct. 2198 (1979). Batchelder concerned two statutes prohibiting the receipt by convicted felons of firearms which have traveled in interstate commerce. Both 18 U.S.C. § 922(h) and 18 U.S.C. § 1202(a) forbid, in similar language, such conduct. Section 922(h) provides a maximum penalty of five years; § 1202(a) provides a maximum sentence of two years. The defendant in Batchelder was prosecuted and convicted under § 922(h). He argued on appeal that the maximum permissible sentence was the two years provided by § 1202(a), which was enacted after § 922(h).
After noting the redundancy of two provisions, the Supreme Court reviewed their histories. Based on the declarations during Congressional debate, the Court found that the act containing § 1202(a) was enacted as a complement to, rather than a replacement for, the Act which contained § 922(h). Finding no express will to repeal § 922(h), the Court concluded that the two statutes were intended to operate independently. 442 U.S. at 121. It then rejected the suggestion that § 1202(a) was implicitly intended to repeal the penalty provision applicable to § 922(h), holding that
. . .it is "not enough to show that the two stat- utes produce differing results when applied to the same factual situation." Radzanower v. Touche Ross & Co., 426 U.S. 148, 155, 48 L. Ed. 2d 540, 96 S. Ct. 1989 (1976). Rather, the legislative intent to repeal must be manifest in the "'positive repugnancy between the provisions.'" United States v. Borden Co., 308 U.S. 188, 199, 84 L. Ed. 181, 60 S. Ct. 182 (1939). In this case, however, the penalty provisions are fully capable of coexisting because they apply to convictions under different statutes.
422 U.S. at 122. After finding no constitutional bar to Congress' delegating to the Justice Department the discretion to prosecute under either of two substantively identical statutes providing different penalties, the Court affirmed the conviction under § 922(h). 442 U.S. at 125.
The factual parellels between Batchelder and this case are obvious and strong. In both, Congress enacted overlapping criminal statutes, setting the maximum penalty in the later-enacted statute lower than the maximum penalty set in the earlier-enacted one. However, the factual differences also cannot be ignored. In Batchelder, the two statutory provisions forbid, with minor exceptions, precisely the same behavior. Neither could be said to be more specific or clearly tailored to the crime than the other. By contrast, § 641 is a very general statute dealing with concealment of stolen governmental property, while $150 explicitly governs the concealment of stolen Treasury checks. The difference is significant, for the very specificity of § 510 tends strongly to imply that, whatever Congress thought an appropriate penalty for the concealment of stolen governmental property in general, it considered the concealment of stolen checks under $500 face value to be a misdemeanor. Indeed, it was the strength of this implication which persuaded Chief Judge McNichols of the Eastern District of Washington to dismiss a felony prosecution for forgery of an endorsement on a Treasury check under $500 in favor of a § 510 misdemeanor charge. United States v. Jimicum, 608 F. Supp. 1530, 1534 (E.D. Wash. 1985).
It is this implication, as bolstered by the prosecution history of § 510, which defendant claims prevents a § 641 indictment in this case.
There is very little law on this topic in the Second Circuit.
Several other circuits, however, have rejected the argument that a more specific statute of necessity displaces or partially repeals a more general statute. These courts have consistently held that the existence of a specific statute, without more, does not prevent prosecution under a more general statute. In United States v. Computer Sciences Corp., 689 F.2d 1181 (4th Cir. 1982), cert. denied, 459 U.S. 1105, 74 L. Ed. 2d 953, 103 S. Ct. 729 (1983), for example, the government sought to prosecute several individuals for conspiring to file false claims with the government. In addition to indicting the defendants under 18 U.S.C. § 287, which proscribes false claims against the government, the prosecution joined counts covering the same conduct under the general wire and mail fraud statutes. Although noting that the defendant might not be susceptible to punishment under all statutes, the Court held that the government was not limited to charging the crime only under the most specific statute available. 689 F.2d at 1187-88. See similarly, United States v. Brien, 617 F.2d 299, 310 (1st Cir.), cert. denied, 446 U.S. 919, 100 S. Ct. 1854, 64 L. Ed. 2d 273 (1980) (commodities fraud may be prosecuted under mail and wire fraud statutes despite the existence of the more narrowly tailored Commodity Futures Trading Act: "Although the statutes prohibit similar conduct, they operate independently and harmoniously. The government's election to prosecute appellant under the statute which, at the time, provided the more severe penalty, was an exercise of discretion which violated no rights of appellants. [citing Batchelder ]." 617 F.2d at 310.). To similar effect is United States v. Mackie, 681 F.2d 1121, 1123 (9th Cir. 1982). Defendants in Mackie were accused of selling whole eagles and eagle beaks to undercover agents. This conduct violated not only the Migratory Bird Treaty Act, 16 U.S.C. §§ 703 and 707(b), under which the defendants were prosecuted, but the more specific Bald and Golden Eagle Protection Act, 16 U.S.C. § 668(a). In response to the defendants' argument that they could only be prosecuted under the more specific statute, the Ninth Circuit held that in the absence of an affirmative indication in the legislative history that the more specific statute was intended to preempt or partially to repeal the more general statute, the government could proceed under either.
A similar result has obtained even when the more specific statute is a misdemeanor while the more general is a felony. In United States v. Fern, 696 F.2d 1269, 1273-74 (11th Cir. 1983), defendant was prosecuted for making false statements to an Internal Revenue agent. Such conduct is a misdemeanor under 25 U.S.C. § 7207, which specifically forbids it. Nevertheless, the Court affirmed a felony conviction obtained under 18 U.S.C. § 1001, a more general statute governing the making of false statements to government officials. To similar effect is United States v. Schaffner, 715 F.2d 1099, 1102 (6th Cir. 1983), in which the government sought to prosecute an attorney for helping a witness to evade service of a subpoena. The district court dismissed felony charges under 18 U.S.C. § 1503, prohibiting obstruction of justice, because of the existence of a more specific misdemeanor statute forbidding interference with a process server. The Court of Appeals reversed. See also, United States v. Boggs, 739 F.2d 1376, 1378 n.2 (8th Cir. 1984) (in prosecuting of defendant common carrier for granting a rebate of shipping charges, government could charge under either a misdemeanor statute prohibiting such rebates or under a felony statute specifically prohibiting acceptance of prices lower than regulated rates).
These cases demonstrate, in circumstances virtually identical to those of the instant case, that no interference regarding Congressional intent may be drawn from the mere existence of a specific statute carrying a lighter penalty than a more general one. They represent an elaboration of the holding of Batchelder, supra, 442 U.S. at 122, that no partial repeal will be found from the mere existence of two redundant statutes carrying different penalties unless the two are positively repugnant--that is, unless they cannot coexist independently.
This does not end the inquiry. This general principle of interpretation is not intended to override Congressional intent. As the Ninth Circuit pointed out in United States v. Mackie, supra, 681 F.2d at 1123, partial repeal will be found if there is an affirmative indication in the legislative history of either statute that the more specific statute was intended by Congress to override the more general statute when both are applicable. Defendant argues with vigor that such indications are present in the history of § 510.
The history of § 510 is sparse. The statute was apparently first proposed by Senator DeConcini in June, 1981, see 127 Cong. Rec. S6448 (daily ed. June 18, 1981), but was not passed until November, 1983. In the relevant Congressional report,
§ 510 receives only brief comment. S.Rep.No. 225, 98th Cong., 1st Sess. 371-72, reprinted in U.S. Code Cong. & Ad. News 332-33 (November, 1984). The focus of the comment is on § 510(a), which prohibits the forging of false endorsements on government checks and securities. The conduct covered by § 510(a) was, until its enactment, prosecuted solely under 18 U.S.C. § 495, a felony statute which prohibits the forgery of a "deed. . .receipt, contract, or other writing" for the purpose of obtaining money from the government. False endorsements were held to constitute "other writings" as long ago as Prussian v. United States, 282 U.S. 675, 75 L. Ed. 610, 51 S. Ct. 223 (1931), but the absence of their express mention in § 495 was perceived by Congress as creating gaps in the criminal law prohibiting the wrongful use of government checks. Section 510 was intended to bridge these gaps by expressly prohibiting wrongful conduct which, according to the report, was not prohibited by § 495.
The report makes no mention of the sentencing provisions of § 510 or their relationship to those of § 495 or § 641. Indeed, no mention of § 641 appears in the legislative history. Although it is clear from the report that § 510 was intended to bridge gaps in § 495, and implicitly § 641, the report manifests no express intention for § 510 entirely to supplant § 495. The report is simply silent on the question of whether Congress intended for the two statutes to coexist.
Comment on the floors of Congress was barely more extensive. Apparently uncontroversial, § 510 provoked no floor debate. See, e.g., 129 Cong. Rec. S15862-63 (daily ed. November 10, 1983) (remarks of Sen. Stevens). The only legislative statement which amounts to more than an echo of the comments in Senate Report No. 98-225 is an introductory speech given by senator DeConcini in 1983. 129 Cong. Rec. S9342-43 (daily ed. June 28, 1983). The Senator first declared that the legislation he was introducing would, "if adopted, correct certain omissions in current law and prescribe penalties for forging endorsements on Treasury checks, . . . passing such obligations bearing forged endorsements, or possessing, selling or exchanging such obligations if they are stolen or bear forged endorsements. This legislation will make it possible for the Justice Department to prosecute both forgeries of endorsements and related crimes involving obligations of the United States under one section of the United States Code. . . ." 129 Cong. Rec. at S9342. Defendant argues that this statement demonstrates Congressional intent to make § 510 the exclusive means for prosecuting and punishing these crimes. The argument has some force. However, it can also be argued that the Senator was simply summarizing the effects of the individual provisions of § 510, without meaning to imply that they would thereafter be exclusive. The statute does prescribe penalties, but this does not necessarily mean that they are intended to be the only available penalties. Similarly, to say that § 510 makes it possible for the government to prosecute under one section of the Code is not necessarily to say that the government must do so.
Senator DeConcini proceeded in his remarks to discuss the gaps in § 495 which are also cited in the State Report. Then, in discussing penalties, he commented that "[w]hile section 495 is strictly a felony statute, the proposed section 510 also allows for prosecution as a misdemeanor for those obligations which do not exceed $500. This will greatly enhance the judicial process since the great majority of such cases are under the $500 amount." 129 Cong. Rec. at S9342. It seems significant that the Senator commented that § 510 "also allows" a misdemeanor prosecution. The phrase suggests an alternative--that is, that § 510 allows, but does not require, a misdemeanor prosecution. The alternative, of course, would be a felony prosecution under § 495. Further, although the purported benefit to the judicial process, the ease of prosecuting misdemeanors as opposed to felonies, is greater if all such cases must be brought as misdemeanors, the goal is no necessarily undercut by giving the prosecutor an option. This would permit the Justice Department to target its expenditure of resources, and thus that of the judiciary, at the most serious offenders. Either way, the judicial process is "enhanced."
Finally, Senator DeConcini addressed in more detail the drafters' aims in creating a misdemeanor statute:
According to GAO, Secret Service and U.S. attorneys' offices throughout the country generally agreed that various benefits would result if a Federal misdemeanor forgery statute were enacted, including the following specific benefits:
First. Result in more forgers being prosecuted by U.S. attorneys;
Second. Eliminate the need for creating "legal fictions" which result from prosecuting under misdemeanor laws that may not directly address the forgery offenses;
Third. Increase plea negotiation flexibility and guilty pleas;
Fourth. Increase use of the U.S. magistrates in check forgery cases and reduce the number of felony trials; thereby reducing the burden on the Federal district courts.
Fifth. Provide more accurate conviction records which may be useful in future prosecutions of repeat offenders; and
Sixth. Provide a realistic penalty structure.
129 Cong. Rec. at S9342.
The last purported benefit supports defendant's position. By stating that misdemeanor treatment is a "realistic" penalty for forgery of an endorsement on a check under $500, it can be argued that the Senator was implicitly indicating that felony treatment permits an excessively harsh punishment.
On the other hand, the third and fifth listed benefits provide talking points for the government. It is difficult to see how the creation of a misdemeanor statute will increase plea negotiation "flexibility" if it becomes the exclusive penalty. Flexibility implies choice of action; surely it is increased most effectively by permitting the misdemeanor statute to exist side-by-side with the preexisting felony statute. The fifth benefit perhaps less clearly weighs in the government's favor. Presumably the availability of a misdemeanor statute will provide more accurate conviction records because the government will prosecute known cases of forgery which it currently deems insufficiently serious to justify felony prosecution. Arguably, at least, the importance of accurate conviction records is that they would permit the government to ascertain repeat offenders and seek more severe punishment for them by prosecuting them as felons. If repeat offenders continue to be subject only to misdemeanor treatment, the range of punishment which can be imposed upon them is arguably so narrow as to make their identification of small practical significance.
The is the extent of the relevant legislative history. Senator DeConcini did not expressly state whether he viewed the statute as replacing all others which have historically governed forged endorsements. Certain aspects of his testimony support this view; other aspects seem inconsistent with it. In view of presumption against implicit repeal, Batchelder, supra, 442 U.S. at 122, however, it is appropriate to require an express or "affirmative" indication of intent to repeal. Mackie, 681 F.2d at 1123. No such indication is present here. As a result, the Government may avail itself of any applicable statute. Since it appears to be uncontested that § 641 prohibits the acts alleged, the motion to dismiss the indictment must fail.
It is SO ORDERED.