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United States of America v. Rodney Morrison

July 16, 2012

UNITED STATES OF AMERICA, APPELLANT-CROSS-APPELLEE,
v.
RODNEY MORRISON, DEFENDANT-APPELLEE-CROSS-APPELLANT.



The opinion of the court was delivered by: Calabresi, Circuit Judge:

10-1926(L); 10-1951

United States v. Morrison

Argued: November 9, 2011

Before: CALABRESI, CHIN, and CARNEY, Circuit Judges.

The government appeals an order of the district court (Denis R. Hurley, J.) vacating, on grounds of statutory vagueness, Defendant-Appellee Rodney Morrison's conviction for conspiracy pursuant to the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(d), the federal Contraband Cigarette Trafficking Act ("CCTA"), 18 U.S.C. § 2341 et seq., and New York Tax Law § 471. Morrison cross-appeals,claiming, inter alia, that New York's long-running formal policy of "forbearance" from enforcing taxes on cigarettes sold on Native American reservations renders the CCTA inapplicable to the conduct on which his conviction was predicated and thus provides an alternative ground for vacating that conviction. We hold that the district court erred in vacating Morrison's conviction on vagueness grounds. In this respect, we rule that the predicate for the district court's decision-our Court's certification of questions of New York tax law to the New York Court of Appeals in City of New York v. Golden Feather Smoke Shop, Inc., 597 F.3d 115 (2d Cir. 2010)-was not a proper basis for a finding of vagueness in New York Tax Law § 471, and thereby, in the CCTA as applied to Morrison. We hold also that the CCTA remains applicable to Morrison's conduct in this case, despite New York's "forbearance policy." Finally, we find the remainder of Morrison's claims to be without merit.

Reversed in part and affirmed in part.

After a jury convicted him of one count of conspiracy, in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(d), and one count of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g), Defendant-Appellee-Cross-Appellant Rodney Morrison filed several motions to vacate his convictions and dismiss the charges against him. The district court (Denis R. Hurley, J.) granted the last of these motions. It kept the firearm conviction in place, but vacated Morrison's RICO conspiracy conviction and dismissed the conspiracy count from his indictment. According to the court, the government's attempt to prosecute Morrison for conspiracy to violate the Contraband Cigarette Trafficking Act ("CCTA"), 18 U.S.C. § 2341 et seq., failed for unconstitutional vagueness in New York Tax Law § 471, the state law that, in this case, delineated the parameters of a violation of the CCTA. The district court found Section 471 unconstitutionally vague given an earlier decision by our Court to certify to New York's Court of Appeals questions regarding New York's taxing power under that section. See City of New York v. Golden Feather Smoke Shop, Inc., 597 F.3d 115, 125-28 (2d Cir. 2010) ("Golden Feather II").

The government timely appealed the district court's order, arguing that the Golden Feather II decision was not a valid basis for a finding of vagueness in Section 471. Morrison cross-appealed. He seeks, first, affirmance of the district court's decision vacating his conspiracy conviction. He also challenges, on a cavalcade of grounds, the district court's earlier denials of other motions to dismiss the conspiracy charges against him and/or vacate his conspiracy conviction. Finally, Morrison requests vacatur of his firearm conviction and dismissal of the corresponding charge.

Of the many arguments that the parties have raised, only two warrant extended discussion. The first is the government's contention that the district court erred in vacating Morrison's conspiracy conviction on the ground of vagueness. The second is Morrison's claim that the CCTA was inapplicable to him given New York's "forbearance policy," under which the State refrained from collecting taxes on cigarette sales transacted on Native American reservations. According to Morrison, this forbearance policy barred his conviction under the CCTA because that statute provides that, in order for a federal prosecution to lie, the state in which the allegedly contraband cigarettes are found must "require" tax stamps to be placed on cigarettes. We reverse the district court's order vacating Morrison's RICO conspiracy conviction and reject all of Morrison's challenges to his convictions.

BACKGROUND

1.The Offense Conduct

Morrison was the managing partner of the Peace Pipe Smoke Shop, which sold cigarettes on the Unkechauge Indian Nation's Poospatuck Indian Reservation, in Mastic, New York.*fn1

Peace Pipe's revenue came principally from the sale of untaxed cigarettes. Morrison advertised his cigarette-selling business throughout nearby New York City. While Morrison sold some of these untaxed cigarettes over the counter at Peace Pipe or through the internet, he also made frequent, large wholesale transactions with individuals whom he called "Big Customers." These sales often involved quantities of cigarettes in excess of 60,000. All told, revenues from sales to Big Customers from 1999 through 2004 amounted to more than $138 million. Peace Pipe's employees typically delivered cigarettes to Big Customers in large black plastic bags to conceal the items. The ledgers in which Morrison recorded Peace Pipe's sales referred to his Big Customers solely by pseudonyms. At least some of Morrison's Big Customers re-sold the cigarettes they bought from Peace Pipe at off-reservation locations, and Morrison was aware that they were doing this.

2.The Superseding Indictment

On July 11, 2006, a federal grand jury in the Eastern District of New York returned a Superseding Indictment against Morrison. The Indictment identified Morrison as the leader of a RICO enterprise that, over an eight-year span from October 1996 to September 2004, he and others operated through Peace Pipe. The Indictment contained eleven counts against Morrison, inter alia: (a) conducting and participating in the affairs of an enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. § 1962(c) (hereafter referred to as the "substantive RICO count" or "Count One"); (b) entering into a racketeering conspiracy, in violation of 18 U.S.C. § 1962(d) (hereafter referred to as the "RICO conspiracy count" or "Count Two"); and (c) two counts of illegal possession of a firearm by a convicted felon, in violation of 18 U.S.C. § 922(g)(1) (hereafter referred to as the "firearm counts" or "Counts Eight and Nine"). In support of its charges under the substantive RICO and RICO conspiracy counts, the government alleged eighty predicate racketeering acts. Of these, acts four through eighty alleged seventy-seven separate sales of contraband cigarettes in violation of 18 U.S.C. § 2342(a)-one component of the CCTA, which prohibits trafficking in "contraband cigarettes or contraband smokeless tobacco"-and 18 U.S.C. § 2, which makes criminal aiding or abetting the commission of an offense against the United States. According to the Superseding Indictment, these predicate sales occurred between January 8, 1997 and August 2, 2004.

3.Morrison's Multiple Challenges to the Superseding Indictment and Verdict

At the close of the government's case, Morrison filed a Fed. R. Crim. P. 29 motion to dismiss the CCTA racketeering acts alleged to support the substantive RICO count. The district court granted Morrison's motion, finding that the government's evidence failed to establish that the parties who had purchased cigarettes from Morrison subsequently sold them in quantities sufficient to constitute independent violations of the CCTA. Morrison then moved to dismiss on collateral estoppel grounds the same racketeering acts from the RICO conspiracy count, but the court denied that motion. The trial proceeded from there, with the jury ultimately convicting Morrison of one count of RICO conspiracy (Count Two) and one count of unlawful possession of a firearm as a convicted felon (Count Eight).

Following the verdict, Morrison filed several more motions. The most important of these were motions to dismiss the racketeering acts from the remaining RICO conspiracy count (on the same collateral estoppel grounds that Morrison had raised before) and to dismiss the RICO conspiracy count altogether as void for vagueness as applied to him. The district court rejected these motions. See United States v. Morrison, 596 F. Supp. 2d 661, 672-706 (E.D.N.Y. 2009) ("Morrison I"). After New York's Fourth Department issued its opinion in Cayuga Indian Nation v. Gould, 66 A.D.3d 100, 884 N.Y.S.2d 518 (4th Dep't 2009) ("Cayuga I"), Morrison filed for reconsideration. Morrison claimed that Cayuga I barred the prosecution's theory in his case. In a bench decision of August 11, 2009, the district court rejected this motion. Morrison again moved for reconsideration, but was again rejected.

When our Court decided Golden Feather II, 597 F.3d 115, Morrison filed yet another motion for reconsideration of his RICO conspiracy conviction. In Golden Feather II, we certified two questions to the New York Court of Appeals regarding New York Tax Law Sections 471 and 471-e. 597 F.3d at 127-28. Morrison claimed that our decision to certify indicated that both Section 471 and the CCTA were void for vagueness as applied to his case. The district court agreed with Morrison and, on April 16, 2010, vacated his conviction for RICO conspiracy. See United States v. Morrison, 706 F. Supp. 2d 304, 313-14 (E.D.N.Y. 2010) ("Morrison II").

On May 7, 2010, the district court sentenced Morrison solely on the basis of his firearm conviction. Morrison received a sentence of 120 months' incarceration followed by three years of supervised release. The court also levied a fine of $75,000 and a special assessment of $100.

The government timely appealed the district court's April 16, 2010 order vacating Morrison's RICO conspiracy conviction. Morrison cross-appealed, offering various grounds for vacating both of his ...


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