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IN THE COURT OF APPEALS OF THE STATE OF ALASKA
DEAN C. KINNEY, )
) Court of Appeals No. A-5812
Appellant, ) Trial Court No. 4BE-94-634 Cr
)
v. ) O P I N I O N
)
STATE OF ALASKA, )
)
Appellee. ) [No. 1501 - November 29, 1996]
______________________________)
Appeal from the Superior Court, Fourth Judicial
District, Bethel, Mark I. Wood, Judge, pro tem.
Appearances: Scott Jay Sidell, Anchorage, for
Appellant. Eric A. Johnson, Assistant Attorney
General, Office of Special Prosecutions and
Appeals, Anchorage, and Bruce M. Botelho,
Attorney General, Juneau, for Appellee.
Before: Bryner, Chief Judge, and Coats and
Mannheimer, Judges.
MANNHEIMER, Judge.
Dean C. Kinney was convicted of arranging a sale of liquor
in a local-option community þ a community where, by local vote, the
sale of liquor was banned. AS 4.16.200(b). Kinney argues that his
conviction is invalid because the jury never determined whether
Kinney knew that he was breaking the law when he arranged the sale
of the liquor. We hold that the State was not required to prove
that Kinney knew he was breaking the law.
Kinney also argues he was entitled to an acquittal because
he obtained no monetary profit from the sale of the liquor. The
legislature has enacted a "no personal profit" defense for people
charged with distributing liquor without a license, but this defense
is not available to people charged with distributing liquor in
local-option communities. Kinney argues that the legislature
violated the due process clause of the Alaska Constitution when it
made the "no personal profit" defense inapplicable to sales in
local-option communities. We hold that the legislature had a
rational basis for drawing this distinction.
Facts of the Case
During January and February of 1994, the state troopers
conducted an investigation of bootlegging in Bethel. One of their
undercover informants was Rick Wilson. Wilson had arranged to
purchase liquor from A.A., a suspected bootlegger, on February 1st,
but when Wilson arrived for the transaction, A.A. demurred.
Instead, A.A. offered to introduce Wilson to another bootlegger.
He then took Wilson to the Hammer Manor Apartments, where he
introduced him to the manager, Dean Kinney. Kinney offered to sell
liquor to Wilson, but Wilson declined. (EN1)
The next day, Wilson returned to the Hammer Manor
Apartments and attempted to purchase alcohol from Kinney. This
time, Kinney told Wilson that he would have to make a telephone call
first. Kinney made the call and, soon thereafter, someone knocked
at Kinney's door. Kinney went out to speak to the person at his
door; when Kinney came back in, he was carrying a bottle of vodka.
Kinney gave the bottle to Wilson, and Wilson gave Kinney $50.00 in
pre-recorded buy money. Upon leaving Kinney's apartment, Wilson
took the bottle to his trooper supervisor and reported this
transaction. Based on this sale, the troopers obtained a warrant
to record ensuing transactions between Wilson and Kinney.
On February 4th, Wilson returned to Kinney's apartment and
asked if he could buy another bottle of liquor. This second
transaction occurred in much the same way as the first: Kinney made
a telephone call, a bottle was delivered outside Kinney's apartment,
and Kinney sold the bottle to Wilson for $50.00. During the
negotiation of this sale, Wilson asked Kinney if he could "give
[him] a break on the price". Kinney replied that he was only making
a profit of $5.00 on each sale and he therefore could not lower the
price.
On February 18th, Wilson made a third purchase from
Kinney. Wilson went to Kinney's apartment and told Kinney that he
wanted to make a purchase. This time, Kinney asked Wilson how many
bottles he wished to purchase; Wilson replied that he wanted just
one. Again, Wilson offered Kinney $50.00, but this time Kinney told
Wilson to return one hour later. Both men left Kinney's apartment.
Approximately one hour later, Kinney returned to the apartment, and
Wilson arrived soon thereafter. Kinney had a bottle of liquor for
Wilson upon his return. During this third transaction, Wilson again
asked Kinney to give him a break on the price, but Kinney again
refused, adding that he "wasn't making anything".
Kinney was ultimately indicted on three counts of felony
bootlegging under AS 4.11.010(a) and AS 4.16.200(b). Following a
jury trial in the Bethel superior court, Kinney was convicted for
the second and third sales (the ones that had been recorded).
In a prosecution for bootlegging, must the
government prove that the defendant knew his conduct
was illegal?
At trial, Kinney asked the judge to instruct the jury that
Kinney could not be convicted unless the government proved that he
was "aware that his conduct was of an illegal nature". The trial
judge declined to give this instruction. On appeal, Kinney argues
that his proposed instruction was constitutionally required.
Kinney's argument hinges on language taken from Hentzner
v. State, 613 P.2d 821 (Alaska 1980), a case in which the supreme
court interpreted the culpable mental state required for the crime
of selling unregistered securities. Hentzner was prosecuted under
AS 45.55.210(a) [now AS 45.55.925(a)], which provides criminal
penalties for anyone who "wilfully" violates the Securities Act.
The supreme court had to decide what "wilfully" meant. Hentzner,
613 P.2d at 825.
To interpret this statute, the supreme court relied on the
principle that a person may not be convicted of a crime (with the
exception of minor violations and public welfare offenses) unless
the government proves that the defendant acted with "criminal
intent", in the broad sense of "a culpable mental state". See
Speidel v. State, 460 P.2d 77, 78 (Alaska 1969); AS 11.81.600(a).
(EN2) Referring to this basic requirement of criminal intent, the
court said:
Where the crime involved may be said to be
malum in se, that is, one which reasoning
members of society regard as condemnable,
awareness of the commission of the act
necessarily carries with it an awareness of
wrongdoing. In such a case[,] the requirement
of criminal intent is met upon proof of
conscious action, and it would be entirely
acceptable to define the word "wilfully" to
mean no more than consciousness of the conduct
in question. See Alex v. State, 484 P.2d 677,
680-82 (Alaska 1971) [holding that, in a
prosecution for escape, the government need not
show that the defendant knew that he was
breaking the law]. However, where the conduct
charged is malum prohibitum[,] there is no
broad societal concurrence that it is
inherently bad. Consciousness on the part of
the actor that he is doing the act does not
carry with it an implication that he is aware
that what he is doing is wrong. In such cases,
more than mere conscious action is required to
satisfy the criminal intent requirement. ...
The crime of offering to sell or selling
unregistered securities is malum prohibitum,
not malum in se. Thus, criminal intent in the
sense of consciousness of wrongdoing should be
regarded as a separate element of the
offense[.]
Hentzner, 613 P.2d at 826.
Kinney contends that the crime of bootlegging, like the
crime of selling unregistered securities, is malum prohibitum. He
therefore argues that, like the defendant in Hentzner, he too could
not be convicted unless the State proved that he acted with
"consciousness of wrongdoing". According to Kinney, this means
proving that he understood that his conduct violated the law.
The distinction between crimes that are "mala prohibita"
and those that are "mala in se" has not only shaped but, to a
certain extent, also bedeviled the law. Basically, a crime is
termed "malum prohibitum" if it is "not inherently evil [but is]
wrong only because prohibited by the legislature". A crime is
"malum in se" if it is "wrong in [itself], inherently evil". Wayne
R. LaFave and Austin W. Scott, Jr., Substantive Criminal Law (1986),
sec. 1.6(b), Vol. 1, p. 45.
However, as LaFave and Scott point out, this terminology
has never been precise. Id. at 45-48. Generally, common-law crimes
are called "mala in se" and statutory crimes are called "mala
prohibita", but courts also say that a crime is "malum in se" if
it involves "moral turpitude". These criteria sometimes point in
different directions. For instance, the offenses of embezzlement
and obtaining money by false pretenses are statutory expansions of
the common-law crime of larceny, see LaFave and Scott, sec. 8.6(a)
and sec. 8.7(a), Vol. 2, pp. 368 and 383, yet few would dispute
their classification as crimes of moral turpitude.
A third criterion is stated in Rollin M. Perkins & Ronald
N. Boyce, Criminal Law (3rd edition 1982), p. 896: If a statute
proscribes conduct that is "intolerably below the level of proper
moral behavior", then the offense is malum in se. If, on the other
hand, the defined conduct is not "morally culpable" (Perkins gives
the example of overtime parking), then the offense is malum
prohibitum.
The Hentzner decision itself suggests yet a fourth
criterion. In the above-quoted passage, the supreme court refers
to mala in se crimes as those offenses "which reasoning members of
society regard as condemnable", while mala prohibita crimes are
those proscribing conduct as to which "there is no broad societal
concurrence that it is inherently bad". Hentzner, 613 P.2d at 826.
Given criteria like these, there is little wonder that
courts reach differing answers when asked to classify the same
offense. For instance, the crimes of driving while intoxicated and
possession of drugs have been classified by some courts as mala in
se, while other courts have found them to be mala prohibita. LaFave
& Scott, sec. 1.6(b), Vol. 1, p. 46. LaFave and Scott conclude that
"[t]he difficulty of classifying particular crimes as mala in se or
mala prohibita suggests ... that the classification should be
abandoned[.]" Id. at 48.
As an intermediate appellate court, we are loath to
abandon a classification that our supreme court has expressly relied
on. Rather, our task should be to interpret how that classification
applies to the case before us.
Hentzner declares that a crime is malum prohibitum if
"there is no broad societal concurrence that [the proscribed
conduct] is inherently bad". One could argue that even though
unlicensed sale of liquor is normally malum prohibitum, sale in a
local-option community is malum in se. If a person sells liquor in
a community where sale is legal but restricted to certain license-
holders, then the crime is simply a violation of laws regulating
commercial transactions. But if a community has seen the need to
prohibit all sales of alcohol, then there may be "broad societal
concurrence" that the act of selling alcohol is condemnable.
Despite this potential argument, we will assume for
purposes of deciding Kinney's appeal that all laws prohibiting the
sale or distribution of alcohol create mala prohibita crimes.
Nevertheless, we reject Kinney's assertion that, under Hentzner, the
State had to prove that Kinney understood the law and knew that he
was breaking it.
As noted above, Hentzner involved a prosecution for the
crime of offering securities that had not been registered with the
Department of Commerce and Economic Development. The defendant, who
was attempting to raise money for a gold-mining venture, offered to
sell his to-be-mined gold for the price of $80.00 an ounce
(substantially below market value) to anyone who would pay the
purchase price immediately. That is, Hentzner was asking people to
give him money in exchange for his promise that, in several months,
they would be repaid in gold at the extremely favorable rate of one
ounce for every $80.00 they advanced him. Hentzner, 613 P.2d at
822.
The State alleged that Hentzner's fund-raising effort
constituted the offering of a "security" (more specifically, an
"investment contract") under AS 45.55.130(12) [now, AS 45.55.-
990(12)]. The State's theory was that, by offering to sell gold
that had not yet been mined, Hentzner was in effect asking people
to invest money upon the promise that they would share in future
gold-mining profits to be derived from Hentzner's entrepreneurial
or managerial efforts. Hentzner, 613 P.2d at 823-24.
Hentzner represented a collision between the practice of
"grubstaking" (EN3), a traditional way for western miners to raise
capital, and Alaska's securities act þ in particular, the labyrinth
of definitions and exemptions codified in AS 45.55.900 and
AS 45.55.980-990. Under Alaska's securities laws, the request for
a grubstake is the offer of a "security", and a miner who wishes to
ask for a grubstake must register this offering.
The definition of a security and the rules governing
registration are not matters of common knowledge. Thus, the supreme
court faced a situation in which a miner who pursued a traditional
capital-raising practice, who engaged in no misrepresentation, and
who (at least arguably) acted reasonably in failing to discover the
need to register his fund-raising effort, could nevertheless face
felony conviction for his failure to register the grubstake offer
with the Department of Commerce and Economic Development. Given
this context, it is hardly surprising that the supreme court ruled
that "wilfully" failing to register the grubstake offer required
proof of something more than mere failure to register.
Kinney interprets Hentzner as saying that this "something
more" must be proof that the defendant understood that his conduct
violated the law. This is how the State of Alaska interpreted
Hentzner when it filed its petition for rehearing. In its petition,
the State argued that the supreme court was "breaking new ground in
requiring the [government] to prove [the defendant's] knowledge of
the law". [Petition for Rehearing in Hentzner v. State, File No.
3649, p. 2] The State asked the court to amend its opinion to
clarify that "the prosecution, to prove Hentzner guilty, must prove
that he acted with intent to do wrong, but that this ... does not
include knowledge of the penal law". [Petition, p. 3]
In a tersely worded order, the supreme court rejected the
State's petition and the State's interpretation of Hentzner:
On consideration of the petition for
rehearing filed June 27, 1980,
The opinion cannot reasonably be read to
require that the prosecution prove the
defendant had knowledge of the law and knew
that he was breaking it; that meaning of the
word "wilfully" is specifically rejected.
[Slip Op. p. 12].
The Petition for Rehearing is therefore
denied.
Order dated July 23, 1980 in Hentzner v. State, File No. 3649.
The supreme court's denial of the State's petition for
rehearing cites page 12 of its slip opinion (Opinion No. 2103). On
that page, the court stated:
The issue before us is the meaning of the
word "wilfully" as used in AS 45.55.210(a).
There are several possibilities. One is that
the defendant must act intentionally in the
sense that he is aware of what he is doing;
another is that the defendant must be aware
that what he is doing is illegal; and a third
is that the defendant must know that what he is
doing is wrong. It is in this last sense that
we think "wilfully" should be interpreted as it
is used in Section 210.
Hentzner, 613 P.2d at 825 (footnote omitted). This language from
Hentzner indicates that the supreme court did not think it had
imposed the mens rea requirement that Kinney argues for in the
present appeal þ the purported requirement that the government prove
that the defendant acted with "knowledge of the law" and awareness
"that he was breaking it".
With respect to securities prosecutions, this court has
interpreted Hentzner's "awareness of wrongdoing" requirement to mean
that the State must prove that the defendant "recklessly
disregarded" the fact that he was unlawfully selling unregistered
securities þ that the defendant consciously disregarded a
substantial and unjustifiable risk that his conduct would result in
a violation of the law. Wheeler v. State, 659 P.2d 1241, 1251-52
(Alaska App. 1983). Wheeler remains the controlling authority on
this point.
More relevant to Kinney's appeal, both Wheeler and Steve
v. State, 875 P.2d 110, 122-23 (Alaska 1994), interpret Hentzner as
a case in which the supreme court's "primary concern was to avoid
application of strict liability in cases where the accused could be
subjected to severe criminal penalties". Wheeler, 659 P.2d at 1251.
Hentzner was charged with a felony, not for offering his investment
scheme, but for failing to register it. Thus, Hentzner's crime was
one of omission. "The gist of [Hentzner's] crime was ... the
defendant's failure to perform an act required by law þ registering
the securities before offering them to the public." Steve, 875 P.2d
at 122.
As this court noted in Steve, when a crime is defined in
terms of a failure to act, "the prevailing view is that one may not
be held liable if one does not know the facts indicating a duty to
act". Id. (quoting LaFave and Scott, sec. 3.3(b), Vol. 1, p. 289).
Thus, Steve interprets Hentzner as saying that if a person
reasonably fails to perceive that his business activities fall
within the securities laws, so that his failure to register is an
act of reasonable inadvertence, then that person should not be
guilty of a felony for failing to register.
Kinney's case is substantially different. Kinney was
charged with selling alcohol; his crime was one of commission, not
omission. Kinney's sales of alcohol did not arise through
inadvertence or neglect. Moreover, it is common knowledge in our
society that one is not permitted to sell alcohol without a license,
and it is common knowledge in Alaska that various localities have
voted themselves dry. Under these circumstances,
[w]hat is essential is not an awareness that a
given conduct is a "wrongdoing" in the sense
that it is proscribed by law, but rather, an
awareness that one is committing the specific
acts which are defined by law as a
"wrongdoing". It is ... no defense that one
was not aware his acts were wrong in the sense
that they were proscribed by law. So long as
one acts intentionally, with cognizance of his
behavior, he acts with the requisite awareness
of wrongdoing. In the words of Justice Holmes:
If a man intentionally adopts certain
conduct in certain circumstances
known to him, and that conduct is
forbidden by the law under those
circumstances, he intentionally
breaks the law in the only sense in
which the law ever considers intent.
Ellis v. United States, 206 U.S. 246, 257,
27 S.Ct. 600, 602, 51 L.Ed. 1047, 1053 (1907).
Alex v. State, 484 P.2d at 681-82 (citations omitted).
It was not necessary for the State to prove that Kinney
was aware of the bootlegging law and knew that his conduct violated
that law. We therefore uphold the trial judge's refusal to give
Kinney's proposed jury instruction.
Did the legislature violate the constitution by not
allowing a "no personal profit" defense when a
defendant is charged with bootlegging in a dry
community?
Under AS 4.11.010(a), no person may "manufacture, sell,
offer for sale, possess for sale or barter, traffic in, or barter
an alcoholic beverage" unless they have the proper license or
permit. Under AS 4.16.200(a)-(b), a person who violates this
licensing law is guilty of a class A misdemeanor unless the
violation occurs in a local-option community, in which case the
crime is a class C felony.
In AS 4.16.200(c), the legislature has provided a limited
exception to the licensing requirement: a person charged with
unlicensed trafficking in liquor may defend by proving that "no
profit was involved in the solicitation or receipt of [the] order
for the delivery of [the] alcoholic beverage". There are two
instances in which this "no personal profit" defense does not apply:
when the defendant is charged with selling or offering to sell
alcoholic beverages to a minor, and when the defendant is charged
with liquor trafficking in a local-option community.
Kinney asserts that the legislature had no valid reason
for restricting the "no personal profit" defense in this fashion.
He argues that, because there is no rational basis for restricting
the scope of the defense, the due process clause of the constitution
requires that the defense be available to anyone accused of
unlicensed sale of liquor, even if the offense occurred in a local-
option community.
We disagree. The two limitations on the "no personal
profit" defense appear to be based on the same rationale: lack of
profit is no defense to unlicensed sale of liquor when it would be
illegal for anyone to sell liquor under the same circumstances.
Thus, the defense is not available to someone who sells liquor to
a minor, nor is it available to someone who sells liquor in a
community that has voted to ban liquor sales. In these situations,
unlicensed sale of liquor is not just a violation of statutes that
regulate alcohol sales and restrict the number of alcohol sellers;
rather, the unlicensed sale violates society's determination that
no one should sell alcohol under such circumstances. Because there
is a rational basis for the legislature's decision to restrict the
scope of the "no personal profit" defense, Kinney's due process
attack fails. Concerned Citizens of South Kenai Peninsula v. Kenai
Peninsula Borough, 527 P.2d 447, 452 (Alaska 1974); Harrelson v.
State, 687 P.2d 332, 343-44 (Alaska App. 1984).
Conclusion
The judgement of the superior court is AFFIRMED.
ENDNOTES:
1. Wilson was wearing electronic monitoring equipment, and he was
afraid that, if he monitored Kinney, this would violate the terms
of the warrant authorizing the monitoring; the warrant mentioned
only Wilson's anticipated conversations with A.A..
2. AS 11.81.600, which is entitled, "General Requirements of
Culpability" provides:
(a) The minimal requirement for criminal culpability
is the performance [of] ... a voluntary act or the
omission to perform an act that the person is capable of
performing.
(b) [With the limited exceptions listed below,] [a]
person is not guilty of an offense unless the person acts
with a culpable mental state[.]
3. A "grubstake" is "[m]oney or supplies advanced to a prospector
in return for a share in any findings". Webster's New World
Dictionary of American English (3rd College Edition, 1988), p. 597.
