                     United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT

                                     ___________

                                     No. 99-1225
                                     No. 99-1673
                                     ___________

United States of America,                 *
                                          *
             Appellee,                    *
                                          * Appeals from the United States
      v.                                  * District Court for the
                                          * Southern District of Iowa.
Dale Lynn Ryan,                           *
                                          *
             Appellant.                   *
                                     ___________

                              Submitted: January 12, 2000

                                   Filed: September 8, 2000
                                    ___________

Before WOLLMAN, Chief Judge, MORRIS SHEPPARD ARNOLD, and MURPHY,
      Circuit Judges.
                             ___________

WOLLMAN, Chief Judge.

       Dale Lynn Ryan appeals from the district court’s denial of his 28 U.S.C. § 2255
petition for postconviction relief and from its denial of his motion for reconsideration.
We reverse and remand.
                                            I.

       On January 1, 1990, fire engulfed the Ryan Fun and Fitness Center (the Fitness
Center), in West Burlington, Iowa, killing two volunteer firefighters who were
attempting to extinguish the blaze. After an extensive investigation, Ryan, the manager
of the Fitness Center, was charged with violating 18 U.S.C. § 844(i). Section 844(i)
makes it a federal crime to “maliciously damage or destroy . . . by means of fire or an
explosive, any building, vehicle, or other real or personal property used in interstate or
foreign commerce or in any activity affecting interstate or foreign commerce.”

       At trial, the government introduced a variety of evidence in an attempt to satisfy
the interstate commerce requirement of section 844(i). The government showed that
the Fitness Center was owned by Ryan’s father, Ronald D. Ryan, a Kansas resident,
and that it was leased to Ryan Air Services, Inc., a Kansas shell corporation controlled
by Ron Ryan. The government also established that the Fitness Center conducted
business until December 6, 1989, at which time Ron Ryan ordered the Fitness Center
closed, and that shortly thereafter Ryan and his father began taking steps to sell the
business. They took a photographic inventory of the building’s interior and had a real
estate agent inspect the property for purposes of determining its market value. The
property, however, was not formally listed for sale or rent at the time of the fire.
Finally, the government introduced evidence that the Fitness Center received natural
gas from an out-of-state provider.

       At the close of the evidence, the district court instructed the jury that it should
find that the Fitness Center was “used in an activity affecting interstate commerce” if
it found that on January 1, 1990: (1) the “[Fitness Center] was owned by Ronald D.
Ryan, a resident of Kansas, and leased by him to Ryan Air Services, Inc., a Kansas
Corporation,” or (2) “the [Fitness Center] was supplied with natural gas used to heat
the building, and such natural gas was supplied from outside of the state of Iowa.” Jury


                                           -2-
Instruction Number 10. Ryan’s counsel did not object to this instruction. The jury
returned a verdict of guilty, and Ryan was sentenced to 328 months in prison.

       On direct appeal, Ryan urged, among other things, that there was insufficient
evidence to support his conviction and that Instruction Number 10 failed to satisfy the
interstate commerce element of section 844(i). A divided panel of this court rejected
Ryan’s arguments and affirmed his conviction. See United States v. Ryan, 9 F.3d 660
(8th Cir. 1993) (Ryan I). We granted rehearing en banc, but once again affirmed
Ryan’s conviction. See United States v. Ryan, 41 F.3d 361 (8th Cir.1994) (en banc)
(Ryan II). A plurality of this court found that there was sufficient evidence to support
the requisite link between the Fitness Center and interstate commerce, see id. at 364-
65, and that neither portion of Instruction Number 10 was plainly erroneous under
existing law, see id. at 366-67 (applying plain error review because of defense
counsel’s failure to object to Instruction Number 10). Ryan then moved for a new trial
based on newly discovered evidence. The district court denied the motion, and we
affirmed. See United States v. Ryan, 153 F.3d 708 (8th Cir. 1998) (Ryan III).

       On April 18, 1997, Ryan filed the instant section 2255 petition. After denying
the petition and Dale’s subsequent motion for reconsideration, the district court granted
Ryan a certificate of appealability on three issues. First, whether the fact that Ryan’s
attorney fees were paid by his father, who was also a suspect in the arson, gave rise to
an actual conflict of interest that rendered Ryan’s assistance of counsel ineffective.
Second, whether Ryan was denied the effective assistance of counsel because of his
attorneys’ failure to object to Instruction Number 10. Third, whether Ryan was
convicted for conduct that was beyond Congress’s power to proscribe under the
Commerce Clause, in light of the holding in United States v. Lopez, 514 U.S. 549
(1995), which was decided after Ryan’s conviction was affirmed in Ryan II.

      After hearing oral argument on these issues, we held the case in abeyance
pending the Supreme Court’s ruling in Jones v. United States, 120 S. Ct. 1904 (2000),

                                          -3-
a case which involved a Lopez argument similar to that raised by Ryan. Following the
Court’s decision in Jones, in which the Court narrowly construed the scope of section
844(i) and did not reach the Lopez issue, we directed the parties to submit
supplemental briefs discussing the impact of Jones on the present appeal. In his
supplemental brief, Ryan contends that Jones makes clear that there was insufficient
evidence introduced at trial to support his conviction under section 844(i), and that,
even if there was sufficient evidence, Instruction Number 10 was plainly erroneous.
We agree that there is insufficient evidence to satisfy the interstate commerce element
of section 844(i), as construed in Jones. We thus conclude that because Ryan’s
conviction is for an act that section 844(i) does not make illegal, he is entitled to relief
under section 2255. Accordingly, we limit our discussion to this single issue.

                                            II.

                                            A.

       Dewey Jones was convicted under section 844(i) for tossing a Molotov cocktail
into an owner-occupied private residence in Fort Wayne, Indiana. On appeal, Jones
contended that section 844(i), when applied to the arson of a private residence not used
for commercial purposes, exceeds Congress’s authority under the Commerce Clause,
as defined in Lopez. The Supreme Court, noting a circuit split regarding both this issue
and the preliminary question of whether section 844(i) even reaches residential
property, granted certiorari to determine whether “section 844(i) applies to the arson
of a private residence; and, if so, whether its application to the private residence in the
present case is constitutional.” See Jones, 120 S. Ct. at 1908-09.

       In addressing the question of the reach of the statute, the Court focused on
section 844(i)’s requirement that the building at issue be “used in . . . any activity
affecting . . . commerce.” See id. at 1909. The Court observed that although the
phrase “affecting . . . commerce,” when unqualified, signals Congress’s intent to invoke

                                            -4-
its full authority under the Commerce Clause, Congress, in section 844(i), qualified this
phrase with the term “used.” See id. Accordingly, the Court concluded that when
determining whether a building satisfies section 844(i)’s interstate commerce
requirement, “the proper inquiry . . . ‘is into the function of the building itself, and then
a determination of whether that function affects interstate commerce.’” Id. at 1910
(quoting then-Chief Judge Richard Arnold’s dissenting opinion in Ryan I, 9 F.3d at
675). Thus, a building is “‘used’ in an activity affecting commerce” only when, at the
time of the fire, it is being “active[ly] employ[ed] for commercial purposes,” which
requires more than “merely a passive, passing, or past connection to commerce.” Id.;
see id. at 1912 (“We hold that [section 844(i)] covers only property currently used in
commerce or in an activity affecting commerce.”).

       As so construed, the Court concluded that section 844(i) does not, by its terms,
reach an owner-occupied residence not used for commercial purposes and therefore did
not reach the residence in Jones. See id. at 1910. The Court reasoned that neither a
private residence’s receipt of natural gas from an out-of-state source, nor its status as
collateral for a mortgage with an out-of-state lender, nor its being the subject of an out-
of-state insurer’s casualty insurance policy constitutes “active employment,” as
required by the “use” qualification of section 844(i). See id. at 1910. Furthermore, the
Court found that the only active employment of the residence in Jones--the everyday
living of a family--had no affect on, or even relation to, interstate commerce and
therefore did not satisfy the “commerce” qualification of section 844(i). See id.
Having found that section 844(i) does not reach an owner-occupied residence, the
Court vacated Jones’s conviction on that ground, making it unnecessary to consider his
Lopez-based constitutional challenge to section 844(i).

      As we recently noted in United States v. Rea, No. 98-2546, slip op. at 3 (8th Cir.
Aug. 11, 2000), the decision in Jones “has substantially changed the law of the Eighth
Circuit regarding the reach of § 844(i).” For example, prior to Jones we had upheld
convictions under section 844(i) where a defendant destroyed a building that, although

                                            -5-
commercial in nature, had only one established connection to interstate commerce--the
receipt and use of natural gas from an out-of-state source. See United States v. Melina,
101 F.3d 567, 572 (8th Cir. 1996); United States v. Flaherty, 76 F.3d 967, 973 (8th Cir.
1996). Under Jones, such a passive connection to interstate commerce does not satisfy
section 844(i)’s “use” requirement, which requires that property be actively employed
in interstate commerce. See Jones, 120 S. Ct. at 1910. Noting this change brought
about by Jones, Ryan argues that although the evidence at his trial may have been
sufficient to satisfy section 844(i)’s interstate commerce requirement as we had
construed it prior to Jones, such evidence is plainly insufficient in light of Jones’s more
restrictive view of section 844(i).

                                            B.

       Before we may reach the merits of Ryan’s argument, we must determine whether
there are any procedural impediments to our doing so. We find none. First, Teague v.
Lane, 489 U.S. 288 (1989), does not bar the application of Jones to Ryan’s claim for
postconviction relief. Teague applies when the Supreme Court announces a “new
constitutional rule of criminal procedure,” generally barring the application of such a
rule to cases on collateral review. See id. at 310-11. The Court has made clear,
however, that Teague does not apply in those cases in which the Court determines the
meaning of a criminal statute enacted by Congress, because such a decision involves
the substantive reach of a federal statute, not a new rule of criminal procedure. See
Bousley v. United States, 118 S. Ct. 1604, 1610 (8th Cir. 1998). Indeed, we have often
applied Bailey v. United States, 516 U.S. 137 (1995), in which the Court defined the
reach of 18 U.S.C. § 924(c)(1) more narrowly than had our prior case law, to section
2255 claims for postconviction relief.1 See, e.g., Swedzinski v. United States, 160 F.3d


      1
        In Bailey, the Supreme Court held that a conviction under 18 U.S.C. § 924(c)(1)
for the “use” of a firearm during and in relation to a drug trafficking crime requires

                                           -6-
498, 500 (8th Cir. 1998); Williams v. United States, 98 F.3d 1052, 1053-54 (8th Cir.
1996). Thus, Jones may be applied retroactively.

       Second, we construe the contentions raised in Ryan’s direct appeal as
constituting a challenge to the sufficiency of the evidence adequate to preserve that
issue for review in the present action.

                                           C.

      We turn, then, to the merits of Ryan’s contention that there is insufficient
evidence in the record to satisfy section 844(i)’s interstate commerce element, as
construed in Jones. Evidence is sufficient to sustain a conviction if, viewing the
evidence in the light most favorable to the government, “any rational trier of fact could
have found the essential elements of the crime beyond a reasonable doubt.” Jackson
v. Virginia, 443 U.S. 307, 319 (1979). “The standard to be applied to determine the
sufficiency of the evidence is a strict one, and the finding of guilt should not be
overturned lightly.” Hill v. Norris, 96 F.3d 1085, 1088 (8th Cir. 1996).

       Having reviewed the evidence in light of Jones, we conclude that, at the time of
the fire, the Fitness Center was not being “‘used’ in an activity affecting commerce.”
Jones, 120 S. Ct. at 1910. In so holding, we reject the government’s contention that
because Jones involved residential rather than commercial property, its holding is
inapplicable to the Fitness Center. Rather, the Court, agreeing with the government’s
observation to that effect, noted that “§ 844(i) excludes no particular type of building


evidence of “active employment” of the firearm by the defendant. See Bailey, 516 U.S.
at 143. In so holding, Bailey overruled our prior decisions affirming section 924(c)(1)
convictions of defendants who merely stored firearms at their residences to protect
drugs or proceeds. See United States v. Harris, 10 F.3d 596, 597 (8th Cir. 1993)
(listing cases).

                                          -7-
(it covers ‘any building’).” Id. Whether section 844(i) applies to a building thus
depends on whether the building is being “‘used’ in an activity affecting commerce.”
Id. See Rea, slip op. at 4 (noting the broad sweep of the Court’s holding in Jones that
“all buildings must be ‘used in’ commerce in order to meet the requirements of §
844(i)”).

        The evidence adduced at trial is insufficient to satisfy section 844(i)’s interstate
commerce requirement, as construed in Jones. That the Fitness Center was owned by
an out-of-state resident does not establish the requisite nexus. It can hardly be said that
the mere status of being owned (“Every building is owned by someone . . . .” Ryan II,
41 F.3d at 369 (Arnold, C.J., dissenting)) constitutes “active employment,” as required
by section 844(i)’s use qualification. Cf. Jones, 120 S. Ct. at 1190 (the fact that a
building is collateral for an out-of-state mortgage does not satisfy section 844(i)).
Likewise, the fact that Ron Ryan leased the Fitness Center to his own shell corporation
fails to create a sufficient nexus with interstate commerce. Although the Court in
Russell v. United States found that an apartment building that was being “used as rental
property” and which produced rental income was sufficiently connected to interstate
commerce for purposes of section 844(i), see 471 U.S. 858, 859 (1985), the Fitness
Center was not similarly used at the time of the fire. Ron Ryan was holding the Fitness
Center through the formality of a lease agreement with his wholly owned company.
Such a passive legal arrangement does not transform an otherwise unused building into
actively employed property sufficient to satisfy section 844(i)’s interstate commerce
element. See Ryan II, 41 F.3d at 369 (“That the Kansas owner, for business purposes
of his own, leased the property to his controlled Kansas corporation adds nothing.”
(Arnold, C.J., dissenting)).

      Furthermore, the evidence pertaining to the Fitness Center’s closing and its
potential sale does not satisfy section 844(i). After thoroughly reviewing this evidence
in Ryan II, a plurality of this court concluded that the Fitness Center “was about to be


                                            -8-
placed on the market for sale” and that it had the “potential for ready reentrance as a
functioning business in the commercial marketplace.” Ryan II, 41 F.3d at 365. These
findings make clear that the Fitness Center was not “currently used in commerce or in
an activity affecting commerce,” Jones, 120 S. Ct. at 1912, and that it merely had a
“past connection to commerce,” which is insufficient under Jones. Id. at 1910.
Similarly, the bare fact that the Fitness Center was marketable does not constitute
active employment for commercial purposes. If this were sufficient to create an
interstate commerce nexus under section 844(i), the statute would encompass all
property, for “[a]ll property will sell at some price.” Ryan II, 41 F.3d at 369 (Arnold,
C.J., dissenting).

       Finally, the Fitness Center’s receipt of natural gas from an out-of-state provider
constitutes a “passive connection” to commerce and thus fails to show a sufficient
interstate commerce nexus. See Jones, 120 S. Ct. at 1190.

      In sum, we conclude that there is insufficient evidence to satisfy the interstate
commerce requirement of section 844(i), an essential element of this statute. Thus,
because Ryan stands convicted for conduct not prohibited by section 844(i), we must
reverse the judgment.

       The judgment is reversed, and the case is remanded to the district court with
directions to vacate the conviction and dismiss the indictment.

      A true copy.

             Attest:

                 CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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