In 2005, Kevin Schultz pled guilty to one count of trafficking in counterfeit telecommunications instruments.  His offense involved modifying telecommunications equipment for the purpose of stealing cable.  His sentence? Two years on probation, including a period of home detention.

Two and a half years after his first conviction, federal agents searched Schultz’s home and found a shotgun.  He was convicted of being a felon in possession of a firearm and sentenced this time to eighteen months in prison.

On appeal, Schultz argued that his telecoms offense, although a felony, did not expose him to liability under the felon-in-possession statute.  He relied on an exception in the law for prior convictions “pertaining to antitrust violations, unfair trade practices, restraints of trade, or similar offenses relating to the regulation of business practices.”  However, the Seventh Circuit rejected this argument and affirmed the conviction in United States v. Schultz (No. 09-1192) (Bauer, J.). 

The court seemed remarkably disinterested in exploring the underlying policy rationale for the business regulation exception.  The statute’s reference to “similar offenses” cries out for a theory to explain what the listed offenses (antitrust violations, unfair trade practices, and restraints of trade) have in common and why Congress deemed it appropriate to carve these offenses out of the general criminal prohibition on gun possession by a felon.  For instance, it strikes me that the listed offenses are similar in that all are nonviolent and are commonly perpetrated by otherwise legitimate business enterprises.  Thus, those who commit such offenses are not presumptively dangerous in ways that would warrant special restrictions on their right to own guns.  Based on this analysis, a court might determine whether a prior conviction counts as a “similar offense” by considering whether the offense was nonviolent and of the sort commonly perpetrated by otherwise legitimate business enterprises.  (Such an approach would, among other things, have the benefit of helping to ensure that some substantial state interest warrants the infringement on Second Amendment rights imposed by the felon-in-possession statute.)

Rather than attempting to discern a coherent congressional purpose behind the business regulation exception, the Seventh Circuit instead cobbled together a handful of holdings from other circuits to reach this test:

In order for the exclusion to apply under “regulation of business practices,” the government would have been required to prove, as an element of the predicate offense, that competition or consumers were affected; possible incidental affects are not relevant.

Because Schultz’s telecoms offense did not have as an element “that competitition or consumers were affected,” it qualified as a predicate offense. 

Interestingly, Schultz’s offense did, in fact, have as an element that his conduct affected interstate commerce.  But the court dismissed the significance of this element, observing simply that “many criminal statutes include such a jurisdictional nexus.” 

Absent is any discussion of why it makes sense to treat business regulatory offenses differently based on whether competition or consumers were affected.  Stealing cable is hardly laudable conduct, but why should the person who cheats the cable company get treated so much more harshly than the person who cheats real live consumers?