Wooten v. Cauley

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 12a0101p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

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JERRY LANE WOOTEN,

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Petitioner-Appellant,

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No. 09-6405

v.

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Respondent-Appellee. -

E. K. CAULEY, Warden,

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Appeal from the United States District Court

for the Eastern District of Kentucky at Ashland.

No. 09-00067—Henry R. Wilhoit, Jr., District Judge.

Decided and Filed: April 12, 2012

Before: CLAY, GIBBONS, and WHITE, Circuit Judges.

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COUNSEL

ON BRIEF: Charles P. Wisdom, Jr., Valorie D. Smith, ASSISTANT UNITED

STATES ATTORNEYS, Lexington, Kentucky, for Appellee. Jerry L. Wooten, Ashland,

Kentucky, pro se.

CLAY, J., delivered the opinion of the court, in which GIBBONS, J., joined.

WHITE, J. (pp. 12-13), delivered a separate opinion concurring in the result.

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OPINION

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CLAY, Circuit Judge. Petitioner Jerry Lane Wooten, appearing pro se, appeals

the judgment of the district court dismissing his application for a writ of habeas corpus,

filed pursuant to 28 U.S.C. § 2241, to vacate his money laundering conviction under

18 U.S.C. §1956. For the reasons set forth below, we AFFIRM.

1

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BACKGROUND

Petitioner operated “Beck’s Wheels,” a licensed business buying and selling

automobile parts to consumers and mechanics as well as providing other automobile

services. During the course of business, Petitioner solicited, bought, and sold

automobile parts that he knew to be stolen. Petitioner and others working with him

would cash a nine thousand dollar check every morning, bring the cash back to their

business location, and use the cash to purchase goods for their business. Individuals

lined up outside of the store and entered, one at a time, to sell stolen parts to Petitioner.

Some of the for-sale items brought to Petitioner were unsolicited, while others, such as

air bags, were stolen and delivered to Petitioner at his request. Petitioner resold the

stolen items to individuals, mechanics, and businesses at a higher price than he paid for

them. He shipped some of the stolen goods across state lines to his brother in Alabama,

who operated a similar business, and to another purchaser in California. Petitioner

shipped the goods by commercial carrier or drove the goods, by van, to the out-of-state

purchasers himself. Petitioner’s operation was discovered during an FBI investigation.

In 2000, Petitioner was convicted by a federal jury of conspiracy to transport

stolen goods and conspiracy to launder money, in violation of 18 U.S.C. § 371; interstate

transportation of stolen goods, in violation of 18 U.S.C. § 2314; aiding and abetting, in

violation of 18 U.S.C. § 2; structuring financial transactions, in violation of 31 U.S.C.

§ 5324(a)(3); and money laundering in the amount of more than two million dollars, in

violation of 18 U.S.C. § 1956(a)(1)(A)(i). On May 23, 2000, Petitioner was sentenced

to 188 months imprisonment.

Petitioner unsuccessfully appealed to this Court and moved twice to vacate his

conviction pursuant to 28 U.S.C. § 2255. Neither § 2255 motion was decided in

Petitioner’s favor, and Petitioner was not granted permission to file additional § 2255

motions.

Petitioner subsequently filed a petition in the district court requesting habeas

relief from his conviction pursuant to 28 U.S.C. § 2241. In his petition, he asserted that

the court had jurisdiction to review his petition for habeas relief under § 2241 because

No. 09-6405 Wooten v. Cauley Page 3

he fell within the “savings clause” of § 2255. He argued that the Supreme Court’s

decision in United States v. Santos, 553 U.S. 507 (2008), changed the definition of

“proceeds” in 18 U.S.C. § 1956 and that he is “actually innocent” of money laundering

under the new definition. The district court denied relief and dismissed the action,

finding that the petition “appear[ed]” to be time-barred on the basis of the one-year

statute of limitations in 28 U.S.C. § 2255(f)(3). The court further held that Petitioner

could not prove his actual innocence under Santos anyway, because Santos was not

retroactively applicable to cases on collateral review and was not applicable to

Petitioner’s habeas petition on the merits.

DISCUSSION

I. STATUTE OF LIMITATIONS

The district court held that Petitioner’s § 2241 habeas petition was time-barred

under the one-year statute of limitations in 28 U.S.C. § 2255(f)(3). Because Petitioner

relied on the Santos decision as the basis of his habeas petition, the district court found

that the statute of limitations had run on June 2, 2009, one year after the Santos decision

was issued and over two months prior to Petitioner’s August 10, 2009 habeas filing.

This Court reviews de novo a district court’s dismissal of a petition for writ of

habeas as time-barred. Souter v. Jones, 395 F.3d 577, 584 (6th Cir. 2005); McSwain v.

Davis, 287 F. App’x 450, 453 (6th Cir. 2008).

There exists a one-year statute of limitations for motions filed pursuant to

28 U.S.C. § 2255, see 28 U.S.C. § 2255(f), and for state prisoners filing certain habeas

petitions, see 28 U.S.C. § 2244(d)(1). There is no statute of limitations for federal

prisoners filing habeas petitions pursuant to 28 U.S.C. § 2241. Morales v. Bezy,

499 F.3d 668, 672 (7th Cir. 2007).

Petitioner is a federal prisoner who filed his petition pursuant to § 2241. He

merely invoked the savings clause of § 2255 to demonstrate that the court had

jurisdiction to review his § 2241 petition. The use of the savings clause to establish

jurisdiction does not transform a § 2241 habeas petition into a § 2255 motion subject to

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the one-year statute of limitations, nor does it force the § 2255 statute of limitations upon

the § 2241 petition. Respondent concedes this matter as well. For this reason, we find

that the petition is not subject to the one-year statute of limitations and thus is not time-

barred.

II. ACTUAL INNOCENCE CLAIM

The district court determined that, even if the petition was not barred by the

statute of limitations, Petitioner failed to demonstrate “actual innocence” and therefore

was not entitled to a vacation of his conviction for money laundering. We agree.

A. Legal Background

This Court reviews de novo a district court’s denial of a habeas petition filed

under 28 U.S.C. § 2241. Charles v. Chandler, 180 F.3d 753, 755 (6th Cir. 1999) (per

curiam).

A federal prisoner must challenge the legality of his detention by motion under

28 U.S.C. § 2255, but may challenge the manner or execution of his sentence under

28 U.S.C. § 2241. United States v. Peterman, 249 F.3d 458, 461 (6th Cir. 2001).

However, a prisoner may also challenge the legality of his detention under § 2241 if he

falls within the “savings clause” of § 2255, which states:

An application for a writ of habeas corpus in behalf of a prisoner who is

authorized to apply for relief by motion pursuant to this section, shall not

be entertained if it appears that the applicant has failed to apply for relief,

by motion, to the court which sentenced him, or that such court has

denied him relief, unless it also appears that the remedy by motion is

inadequate or ineffective to test the legality of his detention.

28 U.S.C. § 2255(e) (emphasis added); Peterman, 249 F.3d at 461. Thus, through the

§ 2255 “savings clause” vehicle, a petitioner may seek habeas relief under § 2241 where

he can show that § 2255 provides an “inadequate or ineffective” means for challenging

the legality of his detention. The Sixth Circuit has found the savings clause to apply

only where the petitioner also demonstrates “actual innocence.” Peterman, 249 F.3d at

461–62; Charles, 180 F.3d at 757.

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B. Analysis

Petitioner argues that his remedy under § 2255 is inadequate and ineffective to

test his detention because he is unable to bring another § 2255 motion. Specifically,

Petitioner is time-barred from presenting a new § 2255 motion. See 28 U.S.C. § 2255(f).

He has also been denied permission to file second or successive motions. See 6th Cir.

R. 22(b)(2). Furthermore, successive § 2255 motions require the presentation of new

factual evidence or the demonstration of a new rule of constitutional law, and Petitioner

can present neither. See 28 U.S.C. § 2255(h). Thus, Petitioner is unable to use § 2255

to challenge the legality of his detention.

However, the inability to use § 2255 to challenge the legality of one’s detention

is not enough to prove inadequacy or ineffectiveness. Peterman, 249 F.3d at 461.

“[T]he § 2255 remedy is not considered inadequate or ineffective simply because § 2255

relief has already been denied . . . or because the petitioner is procedurally barred from

pursuing relief under § 2255 . . . or because the petitioner has been denied permission

to file a second or successive motion to vacate.” Charles, 180 F.3d at 756 (internal

citations omitted). Petitioner must also allege and prove that he is “actually innocent.”

Bannerman v. Snyder, 325 F.3d 722, 724 (6th Cir. 2003); Martin v. Perez, 319 F.3d 799,

804 (6th Cir. 2003); Peterman, 249 F.3d at 461–62; Charles, 180 F.3d at 757.

The Sixth Circuit has derived its understanding of the definition of “actual

innocence” from Bousley v. United States, 523 U.S. 614 (1998). Martin, 319 F.3d at

804. Bousley held that “[t]o establish actual innocence, petitioner must demonstrate that,

in light of all the evidence, it is more likely than not that no reasonable juror would have

convicted him . . . [and] that ‘actual innocence’ means factual innocence, not mere legal

insufficiency.” 523 U.S. at 623–24 (internal quotation marks and citations omitted).

One way to establish factual innocence is to show an “intervening change in the law that

establishes [the petitioner’s] actual innocence.” Peterman, 249 F.3d at 462. This may

be achieved by demonstrating (1) the existence of a new interpretation of statutory law,

(2) which was issued after the petitioner had a meaningful time to incorporate the new

interpretation into his direct appeals or subsequent motions, (3) is retroactive, and (4)

No. 09-6405 Wooten v. Cauley Page 6

applies to the merits of the petition to make it more likely than not that no reasonable

juror would have convicted him.

In this case, it is clear that the Santos decision issued a new interpretation of the

term “proceeds” as “profits” in 18 U.S.C. § 1956 and overruled Sixth Circuit precedent

defining “proceeds” as “gross receipts.” See United States v. Kratt, 579 F.3d 558, 560

(6th Cir. 2009). It is also clear that Petitioner could not have raised Santos in his prior

proceedings, which were complete in January 2008, because the Santos decision was not

filed until June 2, 2008. The two major issues presented here are thus whether the rule

in Santos is retroactive and whether it applies to the merits of the petition.

1. Retroactivity

The Supreme Court did not discuss whether its holding in Santos was retroactive,

and the Sixth Circuit has not yet ruled on this issue. In Teague v. Lane, 489 U.S. 288

(1989), the Supreme Court explained the exceptions to the general rule that new

decisions are not retroactive, unless the new decision provides a criminal rule of

procedure that is of “watershed” importance or is a substantive change in the law that

imposes a new burden on the states or federal government. Schriro v. Summerlin, 542

U.S. 348, 353–58 (2004); Saffle v. Parks, 494 U.S. 484, 494–95 (1990); Duncan v.

United States, 552 F.3d 442, 444 (6th Cir. 2009); Goode v. United States, 305 F.3d 378,

383 (6th Cir. 2002).

Immediately following Santos, many district courts concluded that the new

definition of “proceeds” was not of “watershed” importance and therefore held that

Santos was not retroactively applicable. See, e.g., Haukedahl v. United States, No. 3:07-

CR-64, 2009 U.S. Dist. LEXIS 29409, at *6 (N.D. Ohio Apr. 7, 2009) (“Santos has no

retroactive application. . . . [It] did not announce a new constitutional rule of watershed

importance.”). The district court below cited a number of district court decisions that

refused to apply Santos retroactively. It found that Santos was not retroactive “[b]ased

upon the great weight of this authority.” Wooten v. Cauley, No. 09-CV-67, 2009 U.S.

Dist. LEXIS 106921, at *14–15 (E.D. Ky. Nov. 16, 2009).

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However, since the district court issued its decision, several circuit courts have

ruled that Santos is retroactively applicable because the new interpretation of the

definition of “proceeds” in § 1956 is a substantive change in the law and places the

burden on the prosecution to prove the use of profits, not mere gross receipts, in money

laundering cases. See United States v. Halstead, 634 F.3d 270, 271 (4th Cir. 2011)

(holding that “Santos does apply retroactively on collateral review”); Garland v. Roy,

615 F.3d 391, 396 (5th Cir. 2010) (“[O]ur case law establishes that new decisions

interpreting federal statutes that substantively define criminal offenses automatically

apply retroactively and Santos is an exemplar of such a decision.”); King v. Keller, 372

F. App’x 70, 73 (11th Cir. 2010) (“The Santos opinion clearly construed a substantive

federal criminal statute, because it defined the meaning of one of the terms included in

§ 1956.”). In at least one instance, the government has conceded that Santos applies

retroactively, “because it sets forth a substantive rule that conceivably narrows the scope

of the federal money-laundering statute.” Santana v. United States, No. 08-1493-JLR,

2009 U.S. Dist. LEXIS 71629, at *4 n.2 (W.D. Wash. Feb. 4, 2009).

Because the new definition of a key phrase in the money laundering statute is a

substantive change of law and increases the government’s burden of proof, we agree

with the Fourth, Fifth, and Eleventh Circuits in holding that Santos is retroactive.

2. Application to Petitioner’s Conviction

Petitioner argues that the Santos definition of “proceeds” as “profits” applies to

him, and, because the government only proved Petitioner’s use of “gross receipts” and

not “profits” to further his scheme, his money laundering conviction cannot stand.

In Santos, the Supreme Court was faced with the question of whether “proceeds”

in 18 U.S.C. § 1956 should be defined as “profits” or “gross receipts” in the context of

a defendant convicted of running an illegal gambling and lottery business in violation

of 18 U.S.C. § 1955 and of money laundering under § 1956.1 553 U.S. at 509. The

1

Congress overruled Santos in 2009 when it amended 18 U.S.C. § 1956 to define “proceeds” as

“gross receipts” in all contexts. See 18 U.S.C. § 1956(c)(9) (“[T]he term ‘proceeds’ means any property

derived from or obtained or retained, directly or indirectly, through some form of unlawful activity,

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Court was concerned that “[i]f ‘proceeds’ meant ‘receipts,’ nearly every violation of the

illegal-lottery statute would also be a violation of the money-laundering statute, because

paying a winning bettor is a transaction involving receipts that the defendant intends to

promote the carrying on of the lottery.” Id. at 515. The act of running a lottery and

gambling enterprise not only violated the prohibition on illegal gambling businesses

under 18 U.S.C. § 1955, but that act alone was also sufficient to constitute a violation

of the money laundering statute, 18 U.S.C. § 1956. Id. at 516. The Court found “no

explanation for why Congress would have wanted a transaction that is a normal part of

a crime it had duly considered and appropriately punished elsewhere in the Criminal

Code to radically increase the sentence for that crime” by also punishing it under § 1956.

Id. at 517. Using the same conduct, without more, to violate two statutes created a

“merger problem” and was tantamount to double jeopardy. See id. at 516. Invoking the

“profits” definition, however, solved the merger problem because “[t]ransactions that

normally occur during the course of running a lottery are not identifiable uses of profits.”

Id. at 517. The Court thus found that “proceeds” meant “profits” when the predicate

crime was a violation of § 1955.2

Justice Stevens also indicated that “proceeds” means “profits” in other

circumstances where (1) the predicate offense merges with the money laundering

offense, (2) the money laundering conviction drastically increases the defendant’s

sentence, and (3) the legislative history is silent as to the definition of “proceeds” in

relation to the predicate crime. Santos, 553 U.S. at 527–28 (Stevens, J., concurring);

Cosgrove, 637 F.3d at 654–55; United States v. Smith, 601 F.3d 530, 544 (6th Cir.

2010); Kratt, 579 F.3d at 562.

including the gross receipts of such activity.”). However, because the legislative amendment does not

apply retroactively, it does not affect the analysis here. United States v. Moreland, 622 F.3d 1147, 1163

n.4 (9th Cir. 2010).

2

The Court split 4–4 on whether to define “proceeds” as “profits” or “gross receipts.” In his

concurrence, Justice Stevens agreed with the plurality that “proceeds” meant “profits,” but he limited his

decision to cases involving lottery and gambling business transactions and other in instances of merger.

Because the concurrence provided the narrowest rule for which a majority agreed, Justice Steven’s limited

decision provides the majority holding. See Marks v. United States, 430 U.S. 188, 193 (1977).

No. 09-6405 Wooten v. Cauley Page 9

In Kratt, this Court adopted Justice Stevens’ concerns about merger where the

same conduct is sufficient to support a conviction of both a predicate crime and money

laundering. 579 F.3d at 563.3 There, the Sixth Circuit found that the crimes of bank

fraud and making false statements merge with the crime of money laundering “because

nearly every consummated bank fraud and false statement offense involves depositing,

withdrawing, transferring or exchanging funds derived from the offense,” acts that are

also sufficient to prove money laundering. Id. “Under the Santos-Kratt framework, a

merger problem arises when defining ‘proceeds’ as ‘receipts’ automatically makes

commission of the predicate offense a commission of money laundering and where the

predicate offense carries a much lower statutory maximum sentence than the associated

money laundering charge.” Cosgrove, 637 F.3d at 655 (citing Kratt, 579 F.3d at 563).

In Cosgrove, this Court found that the crimes of money laundering and mail/wire fraud

merged, because the defendant’s act of receiving payments for his services as an attorney

and claims adjuster offering fraudulent insurance was sufficient to prove both money

laundering and mail/wire fraud. Cosgrove, 637 F.3d at 655 (emphasizing that the act of

receiving payments in violation of the mail/wire fraud statutes could also support a

violation of the money laundering statute “without any additional action by Cosgrove”).

Other circuits have also followed this basic merger inquiry. See United States

v. Bush, 626 F.3d 527, 535 (9th Cir. 2010) (merger exists in the peculiar case where a

person who commits one crime would necessarily and simultaneously commit money

laundering); United States v. Brown, 553 F.3d 768, 783 (5th Cir. 2008) (merger exists

where committing a predicate crime “would almost always support money laundering

charged without requiring proof of any distinct laundering activities”); United States v.

Payton, 437 F. App’x 241, 243 (4th Cir. 2011) (per curiam) (no merger exists where

“[a]n actual financial transaction is not an element of” the predicate crime).

Turning to the case at bar, unlike the defendants in Santos, Kratt, and Cosgrove,

Petitioner’s act of transporting the stolen car parts to Alabama and California is

3

The Sixth Circuit has also taken a “defendant-unfriendly approach” to determining when

offenses merge with money laundering. Kratt, 579 F.3d at 563 (suggesting that the resolution of the

definition of “proceeds” requires an offense-by-offense inquiry).

No. 09-6405 Wooten v. Cauley Page 10

sufficient to prove a violation of § 2314 but is not sufficient to prove a violation of the

money laundering statute of § 1956.4

Petitioner was convicted of interstate transportation of stolen goods under

§ 2314, which provides:

Whoever transports, transmits, or transfers in interstate or foreign

commerce any goods . . . of the value of $5,000 or more, knowing the

same to have been stolen, converted or taken by fraud . . . [s]hall be fined

under this title or imprisoned not more than ten years, or both.

18 U.S.C. § 2314.

Petitioner’s money laundering scheme violated § 1956, which provides:

Whoever, knowing that the property involved in a financial transaction

represents the proceeds of some form of unlawful activity, conducts or

attempts to conduct such a financial transaction which in fact involves

the proceeds of specified unlawful activity with the intent to promote the

carrying on of specified unlawful activity . . . shall be sentenced to a fine

of not more than $500,000 or twice the value of the property involved in

the transaction, whichever is greater, or imprisonment for not more than

twenty years, or both.

18 U.S.C. § 1956(a)(1)(A)(i).

The facts and elements of proof necessary to support a conviction for interstate

transportation of stolen goods do not include the threshold requirement for proving

money laundering, i.e., the existence of a financial transaction. See, e.g., Payton, 437

F. App’x at 243. Although Petitioner was also engaged in the buying and selling of

stolen goods, which does involve a financial transaction, his crime of transporting stolen

goods across state lines in violation of § 2314 did not require it.5

4

On appeal, Petitioner argues only that his money laundering and interstate transportation of

stolen goods convictions merge. He does not argue that his convictions for aiding and abetting and

structuring financial transactions merge with money laundering.

5

Petitioner also argues that paying for the transportation of the goods was an “expense” of his

scheme to buy and sell stolen goods, so his situation is analogous to that in Santos and his crimes should

merge. In Santos, the defendant’s act of paying the lottery winnings (an “expense” of running the lottery

business) was sufficient to support a violation of both statutes. But, in Petitioner’s case, the act of paying

the cost of shipping the stolen goods may violate § 2314, but it does not violate § 1956 because the

No. 09-6405 Wooten v. Cauley Page 11

Importantly, the convictions here do not implicate the Santos Court’s concern

about merger; even if the definition of “proceeds” was “gross receipts,” a violation of

§ 2314 interstate transportation of stolen goods would not automatically and necessarily

be a violation of § 1956(a)(1)(A)(i) money laundering. See Santos, 552 U.S. at 515–16;

Cosgrove, 637 F.3d at 655; Kratt, 579 F.3d at 561–63. Petitioner’s act of using proceeds

from the sale of stolen car parts to purchase more stolen car parts is independent of his

act of transporting stolen air bags to Alabama and California. Petitioner’s convictions

for interstate transportation of stolen goods and money laundering are not tantamount

to double jeopardy, and the crimes do not merge.

Petitioner is unable to demonstrate his actual innocence through Santos, because

its definition of “proceeds,” on which he bases his innocence, does not apply to the

circumstances of his case. Petitioner has not offered any other basis upon which he can

prove his actual innocence. Because Petitioner has not proven his “actual innocence,”

he does not fall within the savings clause of § 2255. This Court does not have

jurisdiction to grant him § 2241 habeas relief.

CONCLUSION

For the reasons discussed above, the judgment of the district court denying the

petition for habeas corpus relief is AFFIRMED.

government would still have to prove that the money used to pay for the shipment originated from an

unlawful financial transaction.

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CONCURRING IN THE RESULT

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HELENE N. WHITE, Circuit Judge, concurring. Although I concur in the result,

I write separately because I am not convinced under the facts of this case that the lack

of congruity in the elements of the money-laundering and transportation-of- stolen-goods

offenses eliminates the merger problem where the proceeds underlying the money-

laundering count were used to buy the stolen goods transported in interstate commerce.

See, e.g., United States v. Santos, 553 U.S. 507, 516 (2008) (noting that merger problem

exists for multiple predicate offenses because “[g]enerally speaking, any specified

unlawful activity, an episode of which includes transactions which are not elements of

the offense and in which a participant passes receipts on to someone else, would merge

with money laundering.”); United States v. Halstead, 634 F.3d 270, 279 (4th Cir. 2011)

(merger problem exists “when the illegal activity includes money transactions to pay for

the costs of the illegal activity . . . [and] the government uses those transactions also to

prosecute the defendant for money laundering.”); United States v. Moreland, 622 F.3d

1147, 1166 (9th Cir. 2010) (merger problem exists where money laundering charge

based on commission payments to Ponzi scheme operators because such commissions

were “central to carrying out the scheme’s objective of encouraging further

investment”); United States v. Lee, 558 F.3d 638, 642 (7th Cir. 2009) (using rule that

“when the crime entails voluntary, business-like operations, ‘proceeds’ must be net

income; otherwise the predicate crime merges into money laundering (for no business

can be carried on without expenses)” to find that rent and utility payments for illegal

brothel were not “proceeds” within meaning of 18 U.S.C. § 1956(a)).

Nonetheless, I concur because Petitioner has not demonstrated the actual

innocence required to prevail on his § 2241 petition. The proofs at trial showed that

Beck’s Wheels sold stolen airbags to buyers in California and Alabama at a profit, that

the sale proceeds were deposited into a business account, and that those proceeds were

subsequently withdrawn by Petitioner and his employees to pay for more stolen airbags.

No. 09-6405 Wooten v. Cauley Page 13

Accordingly, I agree that the district court’s denial of Petitioner’s § 2241 petition should

be AFFIRMED.