What do the very young, the elderly, homeowners, businessowners, the living, and even the dead share? They have all fallen victim to scrap metal thieves. From vanishing gravemarkers, to sweltering daycares and exploding houses, this isn't the Wild West -- it's New Jersey.
United States Supreme Court Justice Louis Brandeis once said that “[i]t is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” These “experiments” have been hailed as essential to informing “subsequent federal and local decision-making about the efficacy and desirability of particular responses to various societal problems.” But what happens when state policymakers just cannot seem to get the reaction they want from their chemistry sets? One issue particularly suited to such a question is scrap metal theft.
New Jersey’s state legislators took notice of the problem when a thief stole the air conditioners from a preschool in Gloucester Township, New Jersey, amidst the oppressive humidity which bore down upon the region during the summer of 2012. Preschools were not the exclusive targets, though; places of worship, cemeteries, private homes, abandoned properties, vehicles, elderly care centers, businesses and countless others were and continue to be among the victims of this festering trend. It may be tempting to view this rash of thefts as mere property crimes, but a closer look reveals the truly human consequences involved. For one, the theft of natural gas pipes was thought to have caused a house explosion in Westville, New Jersey, in early September of 2012. The economically depressed Camden found its ability to fight a twelve-alarm warehouse fire seriously hindered in the summer of 2011 due to the theft of metal fittings on fire hydrants. And the more affluent suburban towns just miles away fared no better when, in one of the more audacious acts of thievery, hundreds of bronze grave markers and urns were stolen from the graves of area veterans.
In this light of acts like those detailed above, legislatures and political subdivisions of the several states have been on a valiant quest to curb the boom of metal theft, which has proceeded at break-neck speeds since the start of the economic recession, but such efforts have seemingly proven inadequate. Common consensus recognizes that the reasons for this criminal pestilence are threefold: 1) a positive-feedback mechanism fueled by an increased demand for and willingness to purchase scrap metal overseas, 2) drug addiction, and 3) impoverishment. The critical question, however, has been what to do about it. Is it time to call in the “big guns”—the federal government—to assist the states with their regulation? While there is some merit to this approach, as evidenced by the proposed pieces of federal legislation which have made their way into committees but never found their way back out, I posit that, as proposed federal legislation stands currently, the most pragmatic solutions reside with the states.
II. The Drama of Proposed Federal Regulation: Acts I through III
As the foregoing indicates, the dramatic economic downturn circa 2008 was the spark that set off a conflagration of metal theft which has flourished to this day. In conjunction with the good faith attempts by the states to counteract this epidemic through increased regulation, our national representatives have sought to employ federal fertilizer to increase the yield of what has thus far been a less-than-fruitful crop. What follows is a discussion of the three attempts at federal legislation in this area to date.
A. The 2008 Bill
The first and most primitive form of such legislation came in the form of the “Copper Theft Prevention Act of 2008,” which was complete with fact-finding to support its primary objectives: stemming theft and interstate transactions in stolen copper. Nevertheless, this proposed bill was doomed from the beginning. It imposed upon scrap metal dealers recording, identification, and informational requirements exclusively pertaining to copper, and no other metals. The Act, among other provisions, prohibits scrap metal purchasers from exchanging more than $250 cash in consideration for copper in a single transaction, though payment by check is acceptable in excess of that amount. Finally, it provided for up to $10,000 in civil liability for violation of its provisions and explicitly barred the imposition of any criminal liability upon non-complying dealers.
Nonetheless, the proposed Act had some obvious flaws. For one, it failed to specify what a single “transaction” was as it related to the $250 maximum cash payment provision. To avoid this restriction, could a seller with $500 worth of copper sell half of his material in exchange for cash and, as soon as the copper and money had changed hands, immediately sell the other half of his lot in a separate transaction?
Further, the recording provision concerning the description of copper received can only tell authorities so much; to demonstrate, the Act gives examples as to what the copper might be described as: “wire, tubing, extrusions, or casting.” This is helpful, for example, if a construction site reports it was victimized to the tune of fifty quarter-inch copper pipes on a Monday and fifty quarter-inch copper pipes appear at a scrap metal dealer’s business that Tuesday, but what happens if three separate construction sites report fifty quarter-inch copper pipes as stolen and the thieves split up the lot and sell each portion to a different dealer? Absent some system to better identify the owner of copper, how can a purchaser ever be sure whether the copper he is buying is legitimate or stolen?
B. The 2009 Bill
Following in the footsteps of its 2008 predecessor, the “Secondary Metal Theft Prevention Act of 2009”was introduced into the Senate. Much more mature, this legislation covered all types of stolen metal and took on a much more exigent tone in its recognition of the effects of this crime on the nation’s critical infrastructure; after all, items ranging from manhole covers and railroad tracks to street lamps and guard rails were turning up missing. It emphasized the national scope of the problem; determined to protect consumers and businesses; sought to regulate interstate commerce, specifically the trafficking of stolen metal; and kept many of the 2008 bill’s recording and informational requirements (e.g. requiring a valid, government-issued identification, mandating the recording of license plate numbers, etc.).
In a significant improvement over the previous bill, it also creates a “Do-Not-Buy List” that bars the purchase of metals on which there were logos or markings of businesses forming the country’s critical infrastructure, such as telephone, electric, and transportation companies, as well as metal which appeared to have tampered with in an effort to conceal its true ownership. As well, it drastically decreased the amount for which dealers could pay for metal by cash, setting the limit at $75, but exempting transactions between dealers and governmental or commercial suppliers with whom an “established commercial relationship” had been forged. Additionally, it remedied one of the biggest flaws of the 2008 legislation by defining what constituted a single purchase: “more than one purchase in any 48-hour period from the same seller.”
In unprecedented modifications, the 2009 bill named the Federal Trade Commission as the point agency that would not only promulgate the minutiae of the regulations, but enforce them as well; the bill even expressly permitted the states to bring a civil suit on behalf of its residents. Though other jurisdictional and procedural enforcement provisions are contained therein, they are beyond the scope of this piece. Nevertheless, it should be mentioned that the Commission retained the power to do the following: consolidate pending actions, even those in state courts; intervene in state actions; request that the State not proceed with a pending action until the conclusion of a federal one; and mandate a stay of state actions filed subsequent to a federal one. It is also important to note that both the 2008 and 2009 bills did not seek to supplant duly enacted state laws, and the provisions of the 2009 bill could potentially lead to a suit by a state challenging federal regulation based on principles of federalism—specifically, states’ rights to exercise their police powers. A discussion of such dimensions is too far beyond the scope of this piece, but as it is such an important aspect, it is ripe for future analysis.
C. The 2012 Bill
Things got “heavier” in the 2012 proposed bill in several senses. The Do-Not-Buy List was expanded to cover metal bearing marks of retail establishments in addition to those forming part of America’s critical infrastructure and added a “reasonable basis” standard by which scrap metal dealers were to determine whether metal “had been altered in such a manner that [a dealer] would have reasonable basis to believe that [it was done] for the purpose of . . . concealing” its origin. Most remarkable, though, was the creation by the 2012 bill of a specific federal offense, punishable by a fine or maximum of ten years’ imprisonment, or both, for metal “being used in or affecting interstate or foreign commerce; and the theft of which harms critical infrastructure.” This is in addition to the civil liability that both of the preceding bills, as well as this one, impose. The current bill also explicitly provides that state or local law preempts its regulation in the areas of documentation of ownership and proof of authority to sell. The same applies to state and local recording regulations, but only if they are “substantially similar” to those contained in the federal bill.
The 2012 bill also raises the maximum amount at which cash transactions may occur to $100 (in absence of state or local law providing for same) and retains the “established commercial transactions” provision, while also keeping the 48-hour single transaction rule as well. Another alteration came in the bill’s replacement of the Federal Trade Commission’s enforcement authority with that of the United States Attorney General, but otherwise it retains much of the state-federal balance of the 2009 bill and allows both to seek enforcement for violations. Again, many of the same federalism concerns endure in this legislation which, thus far, has remained stagnant in committee.
Between the theft of air conditioners from preschools and churches, the explosion of a home due to the theft of its metal gas lines, and the defacing of gravesites, all agree that something must be done. A survey of the above proposed bills leaves one to ponder what the federal government might be able to bring to bear upon the problem that the states cannot. The theory is that enactment of uniform regulations will, for example, prevent a metal thief from simply crossing the bridge from the heavily-regulated city of Philadelphia to reach the more laxly regulated dealers of Camden. However, even a cursory review of the above legislation confirms that the many preemption provisions obliterate this possibility. Can’t metal dealers simply transact in an elicit manner anyway?
Perhaps there can be created a system by which all metal that comes into a dealer’s shop is weighed and the figures then squared with amounts subsequently shipped from the dealer’s location. Maybe some kind of uniform cooperative amongst the states, or “carrot” system similar to the national uniform drinking age law, are better incentives for states than an additional layer of regulation from the federal government. Federal regulation may not be wholly imprudent, but the proposed bills, in their current forms, seem deficient in several respects. Regardless, if anything seems certain in this area, it is that the causes of this national epidemic, as well as its effects, will continue be felt for years to come and require heightened attention in one form or another.