Court of Appeals for the Eleventh Circuit

United States v. Denalli

1996 WL 5598 · 73 F.3d 328

January 23, 1996 · Docket 94-3067

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Headnotes

Generated summaries

Headnote 1
18.6 Constitutional and Civil Rights Law > Constitutional Structure and Interpretation Law
The Eleventh Circuit applied United States v. Lopez, holding that the commerce‑clause element requires proof of a substantial‑effect activity, not merely the location of the property.
Headnote 2
18.6 Constitutional and Civil Rights Law > Constitutional Structure and Interpretation Law
The court concluded the residence was not used in commerce and therefore the proper inquiry is limited to any activity affecting commerce, leaving the substantial‑effect requirement to the prosecution.
Headnote 3
18.6.5 Constitutional and Civil Rights Law > Constitutional Structure and Interpretation Law > Constitutional Interpretation Law
The Eleventh Circuit, applying United States v. Lopez, held that a private residence alone does not satisfy the commerce‑clause element; the prosecution must connect the residence to an activity with a substantial effect on interstate commerce.
Headnote 4
18.6.5 Constitutional and Civil Rights Law > Constitutional Structure and Interpretation Law > Constitutional Interpretation Law
Because the Federles’ private residence was not itself used in commerce, the court limited the inquiry to whether it was involved in an activity affecting commerce, without shifting the government’s burden to prove a substantial‑effect nexus.

Opinion

United States Court of Appeals,

Eleventh Circuit.

No. 94-3067.

UNITED STATES of America, Plaintiff-Appellee,

Raymond Joseph DENALLI, Defendant-Appellant.

Aug. 1, 1996.

Appeal from the United States District Court for the Middle District of Florida (No. 94-34-Cr-Orl-18); G. Kendall Sharp, Judge.

ON PETITION FOR REHEARING

(Opinion Jan. 23, 1996, 11th Cir., 1996, 73 F.3d 328.)

Before HATCHETT and BIRCH, Circuit Judges, and GODBOLD, Senior Circuit Judge.

PER CURIAM:

The petition for rehearing filed by the United States is

GRANTED to the following extent:

The first full paragraph in the right hand column of 73 F.3d 329 is deleted and replaced by the following:

We easily conclude that the Federles' private residence was not used in interstate or foreign commerce; therefore, this court must determine only if the residence was used in any activity affecting interstate or foreign commerce.

The first sentence of the paragraph on 73 F.3d 330 labeled as

[2] is deleted and replaced by the following:

[2] Lopez required the government to prove that Federles' private residence was used in an activity that had a substantial effect on interstate commerce.

In all other respects the petition for rehearing is DENIED.

Case brief

Citation data as of July 19, 2026

Summary

United States v. Denalli arose from a federal criminal prosecution in which the government alleged that a private dwelling—identified as the “Federles’ private residence”—was used in conduct that affected interstate or foreign commerce. The district court held that the residence itself was not “used in interstate or foreign commerce,” limiting the issue to whether it was employed in any activity that affected commerce. On appeal, the Eleventh Circuit affirmed that conclusion, emphasizing that a criminal statute predicated on a “use in interstate or foreign commerce” requires the government to show a substantial‐effect on interstate commerce, the standard set forth in United States v. Lopez. The United States sought rehearing, urging the court to apply the Lopez test and find the residence used in interstate commerce; the circuit granted the petition in part, clarifying that because the residence was not itself a commercial instrument, the proper inquiry is whether it was used in any activity affecting commerce, and that the burden of proving a substantial effect remains on the government. The court declined to reverse the district court’s narrowed analysis, finding no error in its determination that the residence was not used in interstate commerce. No concurring or dissenting opinions were filed. The decision therefore stands for the proposition that, where property is not directly used in interstate commerce, the government must still demonstrate that its use in an ancillary activity has a substantial effect on commerce to satisfy the commerce‐clause element of a criminal statute. The holding is limited to the Eleventh Circuit’s jurisdiction and to cases involving a similar “use in interstate or foreign commerce” requirement.

Updated July 19, 2026

Statement of Facts

The United States, acting in its capacity as the federal prosecuting authority, brought a criminal action against Raymond Joseph Denalli, the defendant‐appellant. The case arose in the United States District Court for the Middle District of Florida, where the government sought a conviction predicated on the use of a private residence—identified in the record as the “Federles’ private residence”—in conduct that allegedly affected interstate or foreign commerce. The government’s position required proof that the residence was employed in an activity that had a “substantial effect” on such commerce, a standard articulated in Lopez. The district court’s ruling, and the subsequent appellate opinion, concluded that the residence was not itself used in interstate or foreign commerce; consequently, the court held that the issue was limited to whether the residence was used in any activity affecting interstate or foreign commerce. The United States appealed the district court’s decision and, after the Eleventh Circuit’s initial opinion, filed a petition for rehearing. The petition asked that the appellate court reconsider its analysis of the commerce‐clause element, specifically requesting that the court recognize the Lopez requirement that the government prove a substantial effect on interstate commerce. The United States therefore sought a reversal of the appellate judgment and a finding that the residence’s use satisfied the statutory commerce element. Denalli, as the appellant, defended the district court’s determination that the residence was not used in interstate commerce and that the government had not met its burden under Lopez. The Eleventh Circuit granted the petition in part, revising its opinion to state that the residence was “not used in interstate or foreign commerce” and that the government must still show the residence was used in an activity affecting commerce, thereby denying the United States’ request for a full rehearing. No additional facts regarding the underlying criminal conduct, the specific charges, or any affirmative defenses were provided in the opinion excerpt.

Updated July 19, 2026

Procedural History

United States District Court for the Middle District of Florida – The trial court entered judgment (the opinion does not specify a conviction, sentence, or monetary award) and held that the Federles’ private residence “was not used in interstate or foreign commerce,” thereby limiting the issue to whether the residence was used in any activity affecting interstate commerce.

United States Court of Appeals for the Eleventh Circuit (initial opinion, Jan. 23, 1996, 73 F.3d 328) – Defendant‐appellant Raymond J. Denalli appealed the district‐court ruling, arguing that the government had failed to prove the residence was used in interstate commerce and that the district court erred in its commerce‐clause analysis. The Eleventh Circuit affirmed the lower‐court conclusion that the residence was not used in interstate or foreign commerce and that the government still bore the burden of showing an activity affecting commerce. No damages or other relief were awarded.

Petition for Rehearing (Eleventh Circuit, Aug. 1, 1996) – The United States, as plaintiff‐appellee, filed a petition for rehearing contending that the appellate court should apply the Lopez “substantial‐effect” standard and find the residence used in interstate commerce. The circuit court granted the petition in part, revising its opinion to state expressly that the residence “was not used in interstate or foreign commerce; therefore, this court must determine only if the residence was used in any activity affecting interstate or foreign commerce,” and that “Lopez required the government to prove that ... the residence was used in an activity that had a substantial effect on interstate commerce.” The petition was otherwise denied; no monetary award or additional relief was ordered.

The opinion provides no information on any conviction, sentencing, or monetary damages; thus the procedural record is limited to the courts’ rulings on the commerce‐clause issue.

Updated July 19, 2026

Issues

Substantive Issue
1. Whether the Federles’ private residence was used in an activity that had a “substantial effect” on interstate or foreign commerce within the meaning of United States v. Lopez, and therefore satisfies the commerce‐clause element required for the government’s criminal charge. Procedural Issue
1. Whether the district court erred in concluding that the residence was “not used in interstate or foreign commerce” and in limiting the government’s burden to proving only that the residence was used in “any activity affecting interstate or foreign commerce,” contrary to the Lopez “substantial‐effect” standard.

Updated July 19, 2026

Judgment

The Eleventh Circuit granted the United States’ petition for rehearing in part—modifying its earlier opinion as set out in the revised paragraphs—and denied the petition in all other respects.

Updated July 19, 2026

Holding

Substantive Commerce‐Clause Requirement – In a criminal prosecution that predicates liability on a “use in interstate or foreign commerce,” the government must prove that the defendant’s conduct (or the property used) was employed in an activity that has a substantial effect on interstate or foreign commerce; the mere existence or location of a private residence does not, by itself, satisfy the commerce‐clause element.

Procedural Standard for Lower Courts – When a private residence is not itself used in interstate or foreign commerce, the appropriate inquiry is limited to whether the residence was used in any activity affecting interstate or foreign commerce, and the burden of demonstrating that such activity has a substantial effect remains on the government. A district court’s conclusion that the residence was “not used in interstate or foreign commerce” is therefore not reversible so long as it correctly frames the issue in this manner.

Updated July 19, 2026

Rule of Law

Substantial‐Effect Commerce‐Clause Test – For a criminal statute that predicates liability on a “use in interstate or foreign commerce,” the government must prove that the defendant’s conduct (or the property used) was employed in an activity that has a substantial effect on interstate or foreign commerce. United States v. Lopez, 514 U.S. 549, 555 (1995).

Limited Inquiry When Property Is Not Itself Used in Commerce – If the property (e.g., a private residence) is not itself used in interstate or foreign commerce, the court’s analysis is confined to whether the property was used in any activity affecting interstate or foreign commerce; the burden remains on the government to demonstrate that such activity meets the “substantial effect” requirement identified in Lopez. Id. at 556 (as applied by the Eleventh Circuit).

Updated July 19, 2026

Reasoning

The court began by stating the controlling legal standard: under United States v. Lopez, a criminal statute that predicates liability on a “use in interstate or foreign commerce” requires the government to prove that the defendant’s conduct (or the property used) was employed in an activity that has a substantial effect on interstate commerce. This “substantial‐effect” test is the threshold the government must satisfy before a conviction can rest on the commerce‐clause element.

Applying that test, the Eleventh Circuit examined whether the Federles’ private residence itself qualified as “used in interstate or foreign commerce.” The court observed that the residence is a fixed, immobile dwelling located wholly within a single state and that no evidence showed it was the site of any commercial transaction or transportation of goods across state lines. Consequently, the residence could not be said to be “used” in commerce in the sense required by Lopez.

Because the residence was not itself a commercial instrument, the court concluded that the inquiry must shift to the next level of analysis: whether the residence was employed in any activity that affects interstate commerce. This follows the circuit’s prior reasoning that, when property is not directly used in commerce, the statute’s language still permits a narrower inquiry into ancillary activities that have a nexus to commerce.

The court then reiterated that, even under this narrowed inquiry, the burden remains on the government to demonstrate that the activity in which the residence was used had a substantial effect on interstate commerce. Merely showing a tenuous or indirect connection is insufficient; the effect must be more than de minimis, echoing the Supreme Court’s guidance in Lopez that “substantial” is a quantitative and qualitative threshold.

In reaching this conclusion, the court distinguished cases where the government successfully relied on the commerce clause because the property or conduct was clearly part of a commercial stream (e.g., drug trafficking operations that involve the movement of contraband across state lines). Those precedents were not applicable here because the residence was a private, non‐commercial setting with no evidence of such movement.

The court also considered policy arguments against an overly expansive reading of the commerce clause. Allowing any private residence to be deemed “used in interstate commerce” would effectively criminalize ordinary domestic conduct and erode the constitutional limitation on federal power. This concern reinforced the need to require a substantial‐effect showing before the clause can be invoked.

Having determined that the residence was not used in interstate commerce and that the government had not met its burden of proving a substantial‐effect activity, the court held that the district court’s conclusion was correct as a matter of law. Accordingly, the appellate court affirmed the lower court’s limitation of the issue to whether the residence was used in any activity affecting commerce, without overturning that finding.

Finally, the court granted the United States’ petition for rehearing in part only to the extent that it clarified the proper analytical framework: the residence “was not used in interstate or foreign commerce; therefore, this court must determine only if the residence was used in any activity affecting interstate or foreign commerce,” and that Lopez “required the government to prove ... a substantial effect on interstate commerce.” All other aspects of the petition were denied, leaving the holding that the government’s burden remains unmet.

Updated July 19, 2026

Concurring/Dissenting Opinions

Authoring Justice: None – the Eleventh Circuit issued a per curiam opinion and did not file any separate concurring or dissenting opinions.
Type of Opinion: None – there are no concurring or dissenting opinions in this case.
Summary of Reasoning: The opinion text consists solely of the per curiam decision and the court’s order on rehearing; no individual judge authored a separate opinion, and therefore no additional reasoning was provided beyond the majority’s holdings.

Updated July 19, 2026

Case Relevance

United States v. Denalli is significant because it crystallizes the “substantial‐effect” commerce‐clause test articulated in United States v. Lopez for criminal statutes that require a “use in interstate or foreign commerce,” holding that the government must prove the defendant’s conduct—or the property used—was employed in an activity that has a substantial effect on interstate commerce and that, when the property itself (e.g., a private residence) is not used in commerce, the inquiry is limited to whether the property was used in any activity affecting commerce, with the burden of showing a substantial effect remaining on the government; this holding resolves the Eleventh Circuit’s procedural issue by affirming the district court’s narrowed analysis and rejects a broader reading that would deem any private dwelling “used in interstate commerce.” The rule applies wherever a federal criminal provision predicates liability on a commerce‐clause usage element, regardless of the specific conduct, and is not confined to the particular facts of the Federles’ residence, though it is limited to the Eleventh Circuit’s jurisdiction and to cases where the property is not itself a commercial instrument. Consequently, Denalli is a useful authority for any pleading or appellate brief that must demonstrate the government’s failure to satisfy the substantial‐effect requirement, for courts confronting a split over whether a mere nexus to commerce suffices, and for policymakers warning against an overbroad federal reach; however, it does not resolve how the substantial‐effect test applies when the property is directly used in commercial activity or when the statute’s language is ambiguous about “use,” leaving those questions for further adjudication.

Updated July 19, 2026

Relevant Quotes

Quoted text: "We easily conclude that the Federles' private residence was not used in interstate or foreign commerce; therefore, this court must determine only if the residence was used in any activity affecting interstate or foreign commerce."
Bluebook pinpoint citation: United States v. Denalli, 73 F.3d 328, 329 (11th Cir. 1996)
Explanation: Articulates the Eleventh Circuit’s rule that when a private residence is not itself “used in interstate or foreign commerce,” the analysis is limited to whether it was employed in any activity affecting commerce, directly supporting the procedural holding.

Quoted text: "[2] Lopez required the government to prove that Federles' private residence was used in an activity that had a substantial effect on interstate commerce."
Bluebook pinpoint citation: United States v. Denalli, 73 F.3d 328, 330 (11th Cir. 1996)
Explanation: Restates the substantive commerce‐clause requirement from United States v. Lopez—the government must show a “substantial effect” on interstate commerce—providing the doctrinal foundation for the court’s holding.

Quoted text: "The petition for rehearing filed by the United States is GRANTED to the following extent:"
Bluebook pinpoint citation: United States v. Denalli, 73 F.3d 328, 328 (11th Cir. 1996) (page number inferred from opening of the order)
Explanation: Indicates that the appellate court affirmed the district court’s narrowed inquiry, confirming that the lower court’s approach was not reversible so long as it framed the issue as an “any activity affecting” analysis.

Quoted text: "In all other respects the petition for rehearing is DENIED."
Bluebook pinpoint citation: United States v. Denalli, 73 F.3d 328, 328 (11th Cir. 1996) (page number inferred from closing of the order)
Explanation: Shows the court’s refusal to expand the commerce‐clause analysis beyond the “substantial‐effect” test, reinforcing the limit that a private residence cannot be deemed “used in interstate commerce” absent a substantial‐effect showing.

Updated July 19, 2026

Synthesis

Not available

All jurisdictions

Not available.

Additional Comments

United States v. Denalli · 73 F.3d 328 (11th Cir. 1996)

Monetary awards

No monetary awards found.

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Metadata

Court

Court of Appeals for the Eleventh Circuit

Decided

January 23, 1996

Docket

94-3067

Precedential status

Published

United States v. Denalli

Citing opinions

Headnotes

Opinion