417 S.E.2d 244 (1992)
331 N.C. 731
STATE of North Carolina
v.
Lamont McKOY.
No. 458A91.
Supreme Court of North Carolina.
June 25, 1992.
*245 Lacy H. Thornburg, Atty. Gen. by Valerie B. Spalding, Asst. Atty. Gen., Raleigh, for the State.
Carlton E. Fellers, Raleigh, for defendant-appellant Lamont McKoy.
MITCHELL, Justice.
The defendant was tried upon a proper indictment charging him with murder. The jury found the defendant guilty of murder in the first degree. At the conclusion of a capital sentencing proceeding, the jury recommended a sentence of life imprisonment for the defendant. The trial court imposed the sentence pursuant to the jury's recommendation.
In his assignment of error, the defendant contends that the trial court committed reversible error by instructing the jury that the defendant had admitted facts relating to the crime charged. We find this contention without merit.
The State's evidence tended to show that on 25 January 1990, Bobby Lee Williams met Myron Hailey on Branson Street in Fayetteville. Hailey had about twelve or thirteen plastic "zip-lock" bags of "rock" cocaine in his hand. He showed these to Williams, who tasted one piece and realized that it was "beet" imitation or fake cocaine.
Hailey and Williams proceeded to look for the person who had sold the fake cocaine to Hailey. Hailey saw the defendant and identified him as the seller. Williams knew the defendant and told him to return Hailey's money or give him real cocaine. The three men went behind a house, where an exchange of the fake cocaine for real cocaine was made between the defendant and Hailey.
Shortly after the three men had separated, Williams heard the sound of a gunshot coming from Bryan Street, where Hailey had left his car, and a voice saying "Don't do it. Don't do it." Williams saw a group of men running along a path towards Davis Street nearby. The defendant was in this group. Williams followed the men to Davis Street, where he saw the defendant pull out a pistol, aim it, and shoot. When the defendant fired the pistol, Williams saw sparks coming from the rear of Hailey's car. Williams then saw a female passenger in the car. He heard her scream, "Put your feet to the gas pedal," and saw her lean over as if to take the steering wheel. Williams saw the car weave down Davis Street and turn onto Hay Street.
Hailey was later found by the authorities slumped over in the car on the side of the road. There were bullet holes in the trunk of the car and in the rear left turn signal. Bullets had entered through the back of the vehicle, then passed through the back seat and through the front seat. Three bullets struck Hailey, with one going completely through his body causing his death.
In his assignment of error, the defendant contends that the trial court committed reversible error by expressing an opinion on the evidence when instructing the jury. The statutory prohibitions against expressions of opinion by the trial court are now contained in N.C.G.S. § 15A-1222 and N.C.G.S. § 15A-1232. State v. Hewett, 295 N.C. 640, 247 S.E.2d 886 (1978); State v. Whitted, 38 N.C.App. 603, 248 S.E.2d 442 *246 (1978). The language which relates to the defendant's assignment of error states that: "In instructing the jury, the judge shall not express an opinion as to whether or not a fact has been proved...." N.C.G.S. § 15A-1232 (1988).
During its instructions to the jury in this case, the trial court stated:
There is evidence which tends to show that the defendant has admitted the facts relating to the crime charged in this case. If you find that the defendant made that admission, then you should consider all the circumstances under which it was made in determining whether it was a truthful admission and the weight you will give to it.
The defendant argues that the trial court's statement that evidence "tends to show" that the defendant "admitted the facts relating to the crime charged" amounted to an impermissible expression of opinion on the evidence. We disagree.
A trial court's use of the words "tends to show" in reviewing the evidence does not constitute an expression of opinion on the evidence. State v. Young, 324 N.C. 489, 495, 380 S.E.2d 94, 97 (1989); State v. Allen, 301 N.C. 489, 272 S.E.2d 116 (1980). In Young, the trial court instructed the jury that evidence tended to show that the defendant had confessed that he committed the crime charged. 324 N.C. at 494, 380 S.E.2d at 97. This Court held that the instruction did not violate the prohibition against judicial expression of opinion as to what had been proven because it was qualified with the "tending to show" language. Id. at 495, 380 S.E.2d at 98. Further, the instruction was held proper in that case "because evidence had been introduced which in fact tended to show that the defendant had confessed." Id.
In the case at hand, the defendant was found guilty of first-degree murder under the felony murder rule. The underlying felony relied upon by the State was that the defendant had discharged a firearm into an occupied vehicle. The State presented evidence tending to show that after the defendant had been forced to exchange real cocaine for the "beet" he had sold to the victim, he followed the victim to his car and shot him as he began to drive away.
Officer Michael Ballard testified that on 9 March 1990 he had a conversation with the defendant. Ballard testified that:
I then stated the night you shot Myron Hailey, you did so because he ripped you off. McKoy replied with a smile on his face, "I know it." I stated that Hailey got into his car and started driving away, and he shot him, bamb, bamb. McKoy replied, "I know it." I then said you, Ant Lee, Cat, [and] Charmain ran through the path, came out the corner of Davis and Arsenal[. W]hen Hailey turned down Davis, you shot again, and Hailey started swerving from side to side. McKoy replied, "I know it."
If the jury believed such evidence that the defendant gave the repeated answers of "I know it," it reasonably could have found that the defendant had admitted shooting the victim as the victim drove away in his car. Therefore, we conclude that the trial court did not err in stating that there was evidence "tending to show" that the defendant had "admitted the facts relating to the crime charged in this case."
The defendant contends that his repeated answers of "I know it" to Officer Ballard's questions were ambiguous at best, and that the trial court's instructions failed to leave it for the jury to determine whether those answers in fact were admissions. We conclude that contrary to the assertions of the defendant, the jury was allowed to determine whether any admission actually was made by the defendant. The trial court's statement that there was evidence tending to show that the defendant had admitted the facts relating to the crime charged was followed immediately by the following instruction: "If you find that the defendant made that admission, then you should consider all the circumstances under which it was made in determining whether it was a truthful admission and the weight you will give to it." This instruction made it clear *247 that even though there was evidence tending to show that the defendant had made an admission, it was solely for the jury to determine whether the defendant in fact had made any admission. State v. Young, 324 N.C. 489, 498, 380 S.E.2d 94, 99 (1989). The trial court's instructions in this regard were proper.
We hold that the defendant received a fair trial free of prejudicial error.
NO ERROR.


Order                                                                                Michigan Supreme Court
                                                                                Lansing, Michigan

  May 24, 2011                                                                                Robert P. Young, Jr.,
                                                                                Chief Justice

  142359                                                                                Michael F. Cavanagh
                                                                                Marilyn Kelly
                                                                                Stephen J. Markman
                                                                                Diane M. Hathaway
                                                                                Mary Beth Kelly
  PEOPLE OF THE STATE OF MICHIGAN,                                                                        Brian K. Zahra,
            Plaintiff-Appellee,                                                                                Justices

  v                                                                SC: 142359
                                                                   COA: 288711
                                                                   St Joseph CC: 03-011781-FC
  JEFFERY TODD BARNES,
            Defendant-Appellant.

  _________________________________________/

        On order of the Court, the application for leave to appeal the December 7, 2010
  judgment of the Court of Appeals is considered, and it is DENIED, because we are not
  persuaded that the questions presented should be reviewed by this Court.

        ZAHRA, J., did not participate because he was on the Court of Appeals panel.

                          I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
                    foregoing is a true and complete copy of the order entered at the direction of the Court.
                          May 24, 2011                        _________________________________________
           h0516                                                              Clerk


897 So.2d 669 (2004)
In re: Ted DEMURO and Nicholas Demuro.
No. 2003 CA 2694.
Court of Appeal of Louisiana, First Circuit.
November 3, 2004.
J. Brian Juban, Kyle Keegan, Baton Rouge, for Appellants Ted Demuro and Nicholas Demuro.
R. Gray Sexton, Kathleen M. Allen, Maris E. LeBlanc, Baton Rouge, for Appellee The Louisiana Board of Ethics.
Panel composed of Judges FRANK FOIL, RANDOLPH H. PARRO and JAMES E. KUHN.
FOIL, J.
Appellants, Dr. Theodore (Ted) Demuro and his son, Nicholas Demuro, appeal a decision of the Louisiana Board of Ethics. They challenge the Board's determinations that they violated several provisions of the Code of Governmental Ethics, La. R.S. *670 42:1101 et seq. For the reasons that follow, we affirm.

FACTS AND PROCEDURAL BACKGROUND
This case Involves several violations of the Code of Governmental Ethics allegedly committed by Ted and Nicholas Demuro. Ted Demuro was the headmaster of the Community School for Apprenticeship Learning (CSAL), and was also a member of the school's Steering Committee. On June 13, 2002, the Board of Ethics considered information indicating that Ted Demuro may have participated in the hiring of his son, Nicholas, as an employee and later as a contract laborer. The Board referred both men to investigation. Following a confidential investigation, a public hearing was conducted on April 10, 2003.
Based on the evidence presented, the Board found that Ted Demuro violated Section 1112 B(1) of the Code by participating in the hiring of his son as an employee and a contract laborer at CSAL.[1] The Board also found that Ted and Nicholas Demuro violated Section 1119 A, by virtue of Nicholas's employment at CSAL when Ted was the headmaster.[2] The Board further found that Nicholas Demuro violated Section 1113 A by providing services as a contract laborer to the school.[3] The Board imposed a $750 fine on Ted Demuro and a $500 fine on Nicholas Demuro.
The Demuros bring the instant appeal. They argue that the Board improperly applied the three Code provisions to the hiring and employment of Nicholas Demuro. In six assignments of error, they urge that the Board erred in: 1) determining that Ted Demuro participated in a "transaction involving the governmental entity" within the meaning of La. R.S. 42:1112 B; 2) determining that the element of a "substantial economic interest" was satisfied for purposes of Section 1112 B; 3) determining that Ted Demuro was an "agency head" within the meaning of Section 1119 A; 4) determining that CSAL is an "agency" within the meaning of Section 1119 A; 5) determining that Nicholas Demuro's employment was a "contract, subcontract, or other transaction that is under the supervision or jurisdiction of the agency of such public servant" within the meaning of Section 1113 A; and 6) determining that a monetary fine in any amount was appropriate.

STANDARD OF REVIEW
Judicial review of rulings of the Board of Ethics is conducted in accordance with the Louisiana Administrative Procedure Act. In Re Jefferson Alliance, Inc., 02-0335 (La.App. 1 Cir. 2/14/03), 841 So.2d 15, 16, writ denied, 03-1136 (La.6/20/03), 847 So.2d 1233. A reviewing court may reverse or modify the Board's decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (1) in violation of constitutional or statutory provisions; (2) in excess of the agency's statutory authority; (3) made upon unlawful procedure; (4) affected by other error *671 of law; (5) arbitrary, capricious, or an abuse of discretion; or (6) not supported and sustainable by a preponderance of evidence as determined by the reviewing court. La. R.S. 49:964 G; In Re Jefferson Alliance, Inc., 841 So.2d at 16.
In this case, the evidence showed that CSAL is a Type 1 charter school.[4] The Code of Governmental Ethics applies to charter schools. La. R.S. 17:3996 B(20). Ted Demuro served as the headmaster of the school from 1997 to 2002. As headmaster, he was responsible for oversight of the school, supervising faculty and staff, and implementing the curriculum. Ted Demuro was also a member of the Steering Committee and the Board of Directors for CSAL. The Steering Committee had authority to employ and terminate school personnel. The decision to hire Nicholas Demuro was made by the Steering Committee, of which Ted Demuro was a member at the time. In 1999, Nicholas Demuro was a salaried employee of CSAL. In 2000 and 2001, Nicholas Demuro provided construction services to CSAL on various school projects.
Employing the requisite standard of review, we conclude the evidence supports a finding that the Demuros violated the three provisions of the Code at issue. Based on the evidence, we cannot say that the findings of fact and conclusions of law made by the Board are incorrect. Accordingly, we decline to reverse or modify the Board's decision. Further, we find no merit to the Demuros' challenge to the penalties imposed by the Board, as the Board was authorized to impose a penalty of up to $10,000 for each violation of the Code.

DECREE
Based on the foregoing, the decision appealed from is affirmed. All costs of this appeal are assessed to appellants, Dr. Theodore and Nicholas Demuro.
AFFIRMED.
KUHN and PARRO, JJ., concur.
NOTES
[1]  Section 1112 B(1) provides that no public servant shall participate in a transaction involving the governmental entity in which any member of his immediate family has a substantial economic interest.
[2]  Section 1119 A provides that no member of the immediate family of an agency head shall be employed in his agency.
[3]  Section 1113 A provides that no public servant, or member of his immediate family, shall bid on or enter into a contract that is under the supervision or jurisdiction of the public servant's agency.
[4]  See La. R.S. 17:3973(2)(b)(i).


                   IN THE SUPREME COURT OF IOWA

                            No. 35 / 04-0808

                          Filed August 4, 2006

STATE OF IOWA,

      Appellee,

vs.

ADAM DONALD MUSSER,

      Appellant.

      Appeal from the Iowa District Court for Johnson County, L. Vern

Robinson (motion to dismiss), and Patrick R. Grady (trial), Judges.

      Defendant appeals his conviction of criminal transmission of human

immunodeficiency virus in violation of Iowa Code section 709C.1(1)(a)

(2001). AFFIRMED.

      Linda Del Gallo, State Appellate Defender, and Stephan J. Japuntich,

Assistant State Appellate Defender, for appellant.

      Thomas J. Miller, Attorney General, Cristen Douglass, Assistant

Attorney General,    J. Patrick White, County Attorney, and Victoria

Dominguez, Assistant County Attorney, for appellee.
                                           2

PER CURIAM.

       The defendant, Adam Musser, appeals his conviction of criminal

transmission of human immunodeficiency virus (HIV) in violation of Iowa

Code section 709C.1(1)(a) (2001). The issues raised on appeal in this case

duplicate those raised in two other appeals brought by this defendant from

two additional convictions for criminal transmission of HIV. 1 See State v.

Musser, ___ N.W.2d ___ (Iowa 2006) (affirming conviction in case no. 04-

0809); State v. Musser, ___ N.W.2d ___ (Iowa 2006) (affirming conviction in

case no. 04-0719). We found no merit in the claims made by the defendant

in those cases, and for the reasons set forth in our opinions, we find no

merit in the same issues raised by the defendant in this appeal. Therefore,

we affirm the defendant’s judgment of conviction and sentence.

       AFFIRMED.

       This opinion shall not be published.

       1Although  the defendant initially challenged the sufficiency of the evidence to
support his conviction, he abandoned that issue at oral argument. Therefore, we need not
discuss it.


                NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 13a0069n.06

                                           No. 12-5134
                                                                                FILED
                                                                                Jan 14, 2013
                          UNITED STATES COURT OF APPEALS
                                                                               DEBORAH S. HUNT, Clerk
                               FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,                        )
                                                 )
       Plaintiff-Appellee,                       )
                                                 )
v.                                               )    ON APPEAL FROM THE UNITED
                                                 )    STATES DISTRICT COURT FOR THE
SEAN JAY WIDMER,                                 )    EASTERN DISTRICT OF TENNESSEE
                                                 )
       Defendant-Appellant.                      )

       Before: COOK and WHITE, Circuit Judges; SHARP, District Judge.*

       COOK, Circuit Judge. Sean Widmer pleaded guilty to one count of knowingly receiving

child pornography in violation of 18 U.S.C. § 2252A(a)(2) and (b)(1). The district court imposed

a low-end Guidelines sentence of ninety-seven months’ imprisonment, followed by five years of

supervised release. On appeal, Widmer challenges the procedural and substantive reasonableness

of his sentence and the special conditions imposed on his supervised release. For the following

reasons, we AFFIRM Widmer’s sentence, and VACATE and REMAND the special conditions of

his supervised release for further proceedings consistent with this opinion.

       *
       The Honorable Kevin H. Sharp, United States District Judge for the Middle District of
Tennessee, sitting by designation.
No. 12-5134
United States v. Widmer

                                                  I.

       On February 1, 2010, federal investigators interviewed Widmer regarding child pornography

on his computer. Widmer admitted that he used a file-sharing software program to receive child

pornography via the Internet. He also provided written consent for agents to examine his computer,

and agents’ later examination identified seven still images and 134 videos depicting identifiable child

victims, prepubescent children in sexual contact with adults and other children, and sadistic and

masochistic conduct. Because the Guidelines credit each video as seventy-five images, Widmer

possessed 10,057 images.

       Widmer stipulated to a base offense level of twenty-two in his plea agreement. Probation’s

Presentence Investigation Report (“PSR”) calculated the applicable sentencing adjustments. Widmer

obtained reductions for receipt without the intent to distribute (two levels) and acceptance of

responsibility (three levels). He also received enhancements because he possessed more than 600

images (five levels), used a computer to receive the pornography (two levels), and the images

contained prepubescent minors (two levels) and depicted sadistic, masochistic, or violent content

(four levels). Widmer’s offense level totaled thirty. This offense level and Widmer’s criminal

history yielded an advisory Guidelines range of 97–121 months’ imprisonment. Additionally, 18

U.S.C. § 3583(k) mandated a minimum five-year term of supervised release, on which the PSR

recommended the court impose the Eastern District of Tennessee’s standard special conditions of

supervised release for sex offenders. Widmer objected to five: sex-offender mental-health

                                                 -2-
No. 12-5134
United States v. Widmer

treatment, a post-release psychosexual evaluation, probation-officer compliance searches, and

restrictions on both his association with minors and use of computers.

       To support his challenge, Widmer argued that testing performed by Dr. Ted Shaw

demonstrated that he presented no risk to children and had a low likelihood of recidivism. (See R.

27, Def.’s Obj. PSR.) At a later hearing, however, the court found Shaw’s report “highly subjective”

and ordered additional assessment and testing with Dr. James Michael Adler. (R. 44, Addt’l Testing

Hr’g Tr. at 66:18–20, ID #336.) During this additional testing, Widmer admitted masturbating to

images in his child pornography collection (R. 45, Adler Report at 13, ID #353), and Dr. Adler’s

report assessed a “low-moderate” risk of recidivism (id. at 11, ID #351).

        Three days before the sentencing hearing, the court issued an order overruling Widmer’s

PSR objections (see R. 49, Jan. 20, 2012 Order, ID #506), concluding that the challenged

conditions, if imposed at the sentencing hearing, would not impermissibly delegate sentencing

authority to the probation department (id. at 11–12, ID #516–17). Further, the court found each of

the PSR’s recommended supervised-release conditions reasonably related to the crime of child

pornography, but “[i]t remain[ed] for the Court to determine at sentencing whether [Widmer’s]

specific offense, history, and characteristics merit the imposition of these post-incarceration terms.”

(Id. at 14, ID #519.)

       Widmer also filed a “Motion for Below-Guidelines Sentence Based on § 3553(a) Factors and

Sentencing Memorandum” (R. 47), seeking a sixty-month mandatory-minimum sentence. At the

                                                 -3-
No. 12-5134
United States v. Widmer

sentencing hearing, after listening to testimony from Drs. Shaw and Adler, the court imposed a

ninety-seven month, low-end, within-Guidelines sentence and five years of supervised release with

the standard special conditions.

                                                  II.

A. Reasonableness of the Sentence

       We review a district court’s sentencing determination for reasonableness under a deferential

abuse-of-discretion standard, United States v. Bolds, 511 F.3d 568, 578 (6th Cir. 2007), first ensuring

that the district court committed no significant procedural error such as “treating the Guidelines as

mandatory, failing to consider the § 3553(a) factors . . . or failing to adequately explain the chosen

sentence.” Gall v. United States, 552 U.S. 38, 51 (2007). If the sentence is procedurally sound, we

then consider its substantive reasonableness. United States v. Grossman, 513 F.3d 592, 595 (6th Cir.

2008) (quoting Gall, 552 U.S. at 51).

       i. Procedural Reasonableness

       Widmer levied two procedural-reasonableness challenges: First, he argued that the court

abused its discretion by misconstruing his variance motion as a downward-departure motion,

erroneously employing departure standards to deny a variance. Second, he argued that the court’s

use of the phrase “the heartland” suggests it treated the Guidelines as mandatory, thereby

overlooking the § 3553(a) sentencing factors.

                                                 -4-
No. 12-5134
United States v. Widmer

        Widmer’s first argument fails because the record demonstrates that the court conducted

separate departure and variance analyses, affording him two chances at relief. The court separately

outlined the grounds on which it could grant a departure or variance (see R. 55, Sent’g Tr. at

151:2–17 (explaining departures), 151:18–152:4 (explaining variances)), explaining, for example,

that it “has much more discretion and may take a wide range of considerations into account when

determining whether a downward variance is appropriate under . . . Section 3553(a).” (Id. at

151:18–21.) The court clearly signaled when it moved from departure to variance analysis:

“Furthermore, a downward variance is not warranted . . . .” (Id. at 152:18 (emphasis added).)

Ultimately, the court independently decided the departure and variance issues: “The Court finds that

there is no basis for a downward departure and that the Section 3553(a) factors do not indicate that

a downward variance is warranted in this case.” (Id. at 155:14–16.) Though Widmer insists that his

“Motion for a Below Guidelines Sentence” requested only a downward variance, we find no abuse

of discretion in the court’s decision to analyze an additional possible ground for shortening

Widmer’s sentence.

        Widmer further contends that the court’s use of the phrase “the heartland,” a concept

developed before the Guidelines became advisory, betrays the court’s improper treatment of the

§ 3553(a) factors. He posits that the court treated the Guidelines as mandatory by first requiring facts

to remove Widmer’s case from “the heartland” of child pornography cases before considering the

§ 3553(a) factors. Again, the record belies Widmer’s claim. The court individually assessed the

§ 3553(a) factors and simply found that they did not warrant a downward variance. (See id. at

                                                 -5-
No. 12-5134
United States v. Widmer

155:15–16.) The court clearly understood the Guidelines’ advisory nature. (See, e.g., id. at 149:23

(declaring that it “treat[s] the Sentencing Commission Guidelines as advisory only”).) We glean no

procedural error from the court’s two brief references to “the heartland.”

       ii. Substantive Reasonableness

       “A sentence is substantively unreasonable if the sentencing court arbitrarily selected the

sentence, based the sentence on impermissible factors, failed to consider pertinent § 3553(a) factors,

or gave an unreasonable amount of weight to any pertinent factor.” United States v. Cunningham,

669 F.3d 723, 733 (6th Cir. 2012) (citing United States v. Collington, 431 F.3d 805, 808 (6th Cir.

2006)). Because Widmer’s ninety-seven month sentence falls within the properly calculated

Guidelines range of 97–121 months, we afford it a presumption of reasonableness. United States

v. Simmons, 587 F.3d 348, 365 (6th Cir. 2009). “Defendant bears a heavy burden in showing that

his sentence at the low-end of his Guidelines range is [substantively] unreasonable.” Cunningham,

669 F.3d at 733 (citing United States v. Bolds, 511 F.3d 568, 581 (6th Cir. 2007)). Here,

presumptive reasonableness dooms Widmer’s substantive-reasonableness challenges.

       Widmer argues that the district court inappropriately utilized the “market theory” of child

pornography to impose his sentence. Because his conduct involved downloading rather than

exchanging or purchasing child pornography, Widmer argues that he could not have affected the

child-pornography market. When courts consider general deterrence as a sentencing factor, the

inquiry “should be focused upon the market for such activities” and target the “production,

                                                -6-
No. 12-5134
United States v. Widmer

distribution, receipt, or possession of child pornography.” United States v. Robinson, 669 F.3d 767,

777 (6th Cir. 2012). General deterrence “is crucial in the child pornography context.” United States

v. Camiscione, 591 F.3d 823, 834 (6th Cir. 2010).

        Here, the district court relied on the market theory for only part of its general deterrence

analysis before properly considering the sentence’s deterrent effect. After explaining that “[t]hose

who receive child pornography form a market for the images and encourage the further abuse of

children depicted in the images,” (R. 55, Sent’g Tr. at 153:3–6), the court employed yet another

rationale—difficulty of detection. “General deterrence is especially important in child pornography

cases because child pornography is . . . difficult to detect, as the Internet allows potential offenders

to perpetrate the offense in the privacy of their homes.” (Id. at 154:22–25.) The court stated that

Widmer’s sentence “will send a signal to would-be offenders that receipt of child pornography

carries significant consequences.” (Id. at 155:6–7.) Cf. Camiscione, 591 F.3d at 834 (reversing

district court because it “failed to consider how its sentence provided adequate ‘general deterrence’

to the population at large”). The district court clearly considered the need for its sentence to promote

general deterrence, and its analysis withstands Widmer’s challenge.

        Widmer next argues that the district court overlooked the results of the additional, court-

mandated testing. Yet the record shows that counsel, the court, and Widmer discussed Dr. Adler’s

additional testing throughout Widmer’s sentencing hearing. At the start of Dr. Adler’s testimony,

the court confirmed it received his written report. (R. 55, Sent’g Tr. at 28:9.) During the hearing,

                                                 -7-
No. 12-5134
United States v. Widmer

Widmer’s counsel and the Government questioned Dr. Adler at length about his findings. (Id. at

27–76.) When Widmer addressed the court, he referenced his interactions with Dr. Adler. (Id. at

157:12–16.) The court considered the import of Widmer’s masturbation to images of adolescent

females (id. at 154:6–9), later recounting that “Dr. Michael Adler[] found ample evidence that

[Widmer] has some sexual interest in children and reported that [Widmer] had a low to moderate

range of risk of recidivism.” (Id. at 167:22–25.)

       Widmer also overstates Dr. Adler’s testimony as proof that he lacks a sexual interest in

children. Dr. Adler’s report suggests that Widmer poses a “low-moderate range of risk” and “most

likely does not have a ‘sexual interest’ in children.” (See R. 45, Adler Report at 11, ID #351.) These

statements contradict Widmer’s exaggerated interpretation—that the test absolves him of culpable

conduct and any risk of recidivism. Rather than disproving Widmer’s sexual interest in children,

Adler’s report raises questions about Widmer’s culpability and motivations. The report also found

that Widmer’s “use of child pornography is much more complex than he currently acknowledges,”

and “[w]hen challenged, [he] becomes angry, agitated, and reports memory loss.” (Id.) The court

could draw upon all of these findings, and Widmer fails to show abuse of discretion.

       Nor did the district court violate Tapia v. United States, 131 S. Ct. 2382 (2011), by imposing

a longer sentence than otherwise appropriate so Widmer could complete a treatment program. Tapia

instructs that “a court may not impose or lengthen a prison sentence to enable an offender to

complete a treatment program or otherwise to promote rehabilitation.” Tapia, 131 S. Ct. at 2393.

                                                -8-
No. 12-5134
United States v. Widmer

Here, the probation officer recommended that Widmer submit to sex offender and drug treatment

while imprisoned. The court recommended such treatment to the Bureau of Prisons after finding that

Widmer “is in need [of] and will benefit from [treatment] during his incarceration.” (R. 55, Sent’g

Tr. at 155:11–13.) Contrary to Tapia, where the lower court imposed a fifty-one month sentence “so

[defendant] is in long enough to get” recommended treatment, 131 S. Ct. at 2385, here the court

merely found that Widmer would benefit from treatment during incarceration and recommended as

much. The court’s rehabilitative concerns here differ markedly from the imposition of treatment

for rehabilitative purposes at issue in Tapia. Thus, we find that the district court did not violate

Tapia’s prohibition.

        Widmer further contends that the court erred when weighing the § 3553(a) factors. But the

court properly considered these factors, going so far as to commend Widmer for his work history,

favorable characteristics, references, and post-rehabilitative efforts. (R. 55, Sent’g Tr. at 152:18–22.)

The court properly determined that Widmer’s risk of recidivism and his offense’s willful and lengthy

nature necessitated specific deterrence. (Id. at 154: 10–19.) It decided the sentence was necessary

to “send a signal to would-be offenders that receipt of child pornography carries significant

consequences.” (Id. at 155:6–7.) We discern no error in the court’s characterization of Widmer’s

conduct, let alone in its evaluation of the evidence to find him sexually interested in children.

Widmer downloaded images of minor children engaging in sexual activity with adult males. (Id. at

12:6–12.) He admitted to Dr. Adler that he masturbated to the images “of the older kids, the

                                                  -9-
No. 12-5134
United States v. Widmer

adolescents.” (Id. at 30:23–24.) The record reflects no clear error in the court’s determination that

Widmer’s masturbation discredits his asserted sexual disinterest in children.

        The district court properly assessed Widmer’s case, and we find no abuse of discretion in

Widmer’s ninety-seven month sentence.

B. Special Supervised Release Conditions

        We review special conditions imposed during supervised release for abuse of discretion.

United States v. Brogdon, 503 F.3d 555, 563 (6th Cir. 2007). Despite the Government’s argument

that Widmer failed to object to the terms at sentencing, necessitating plain-error review, Widmer

properly preserved the issue: “I respectfully object to the procedural and substantive reasonableness

of the sentence and of the terms—of some of the terms of supervised release, the ones that we’ve

objected to.” (R. 55, Sent’g Tr. at 168:20–22.) Widmer’s objection to the PSR, filed before the

sentencing hearing, pointed to the same five conditions he now appeals. (R. 27, Def.’s Obj. PSR at

24–46.) Because he previously objected to these five conditions, and his attorney objected to the

procedural and substantive reasonableness of these conditions at sentencing, abuse-of-discretion

applies.

        This court’s review of special conditions involves procedural and substantive components.

To be procedurally reasonable, the court must first “state in open court . . . its rationale for mandating

special conditions of supervised release.” United States v. Carter, 463 F.3d 526, 528–29 (6th Cir.

                                                  - 10 -
No. 12-5134
United States v. Widmer

2006) (citation and internal quotation marks omitted). Special conditions imposed without specific

justification are “harmless error if the supporting reasons are evident on the overall record, and the

subject special condition[s are] related to the dual major purposes of probation, namely rehabilitation

of the offender and enhancement of public safety.” Brogdon, 503 F.3d at 564 (quoting United States

v. Kingsley, 241 F.3d 828, 836 (6th Cir. 2001)).

       In Widmer’s case, the court imposed the shortest possible term of supervised release. See

18 U.S.C. § 3583(k). In its order overruling Widmer’s PSR objections, the court repeatedly tied the

challenged conditions to the crime of child pornography, but postponed examining whether

Widmer’s circumstances merited special conditions until the sentencing hearing. “The PSR’s

recommended conditions of supervised release are reasonably related to the crime for which

Defendant has been convicted. It remains for the Court to determine at sentencing whether the

Defendant’s specific offense, history, and characteristics merit the imposition of these post-

incarceration terms.” (R. 49, Jan. 20, 2012 Order at 14, ID #519.)

       Yet at sentencing, the court imposed the challenged conditions without explaining or

addressing Widmer’s argument that his circumstances did not justify special supervised release

conditions. The court merely stated, “Last, the Defendant shall comply with the sex offender

conditions set forth in Paragraphs 114 through 126 of the pre-sentence report.” (R. 55, Sent’g Tr.

at 164:19–21.) Although we sometimes affirm special conditions of supervised release on a silent

record, see, e.g., United States v. Lantz, 443 F. App’x 135, 144–45 (6th Cir. 2011) (computer

                                                - 11 -
No. 12-5134
United States v. Widmer

restrictions), this case differs because the reasons for imposing Widmer’s special conditions are not

clear from the overall record. The association restriction, for example, bars Widmer from all contact

with minors—even his own daughter—absent a probation officer’s approval. But because Widmer

never solicited or physically harmed a child, the record lacks an obvious rationale for imposing such

a restriction. After having failed to deliver the promised analysis of Widmer’s objections to the

special conditions of supervised release, omitting rationales supporting special conditions of

supervised release cannot be harmless. We therefore vacate the challenged conditions of supervised

release and remand to the district court for a fuller explanation of its reasons for imposing the five

special conditions of supervised release.

                                                 III.

       For the foregoing reasons, we AFFIRM Widmer’s sentence, VACATE the special conditions

of supervised release, and REMAND for proceedings consistent with this opinion.

                                                - 12 -


288 F.2d 308
METALOCK REPAIR SERVICE, INC., and Lois R. Morrisonv.Hal W. HARMAN.
No. 14243.
United States Court of Appeals Sixth Circuit.
March 30, 1961.

Carl Bagwell, Oklahoma City, Okl., for appellants.
Warren H. F. Schmieding, Columbus, Ohio (Schmieding & Fultz, Columbus, Ohio, on the brief), for appellee.
Before MILLER, Chief Judge, and CECIL and WEICK, Circuit Judges.
PER CURIAM.

1
This is an appeal from an order of the District Court denying the motion of the appellants Metalock and Morrison to dissolve a preliminary injunction.  The facts in the case and the history of the litigation between the parties are set forth in our previous opinion reported in 258 F.2d 809.  In that opinion, we vacated the order appealed from and remanded the cause to the District Court to state its findings of fact and conclusions of law.  The District Court complied and re-entered the order denying appellants' motion to dissolve the preliminary injunction which resulted in the present appeal.

2
The sole question is whether the District Court had jurisdiction over the appellants Morrison and Metalock to enter the preliminary injunction against them.  They were not parties to the original action for infringement of the patent in which Lawrence Boston Scott was the only defendant.  Morrison and Metalock were both residents of New York and were added as parties defendant by order of the District Judge sometime after he had entered an interlocutory order against Scott finding that the patent in suit was valid, referring the cause to a master for an accounting and granting a permanent injunction.  Substituted service of process was obtained on John J. Mahoney, an attorney for Morrison and Metalock in Columbus, Ohio by order of the District Court.  Morrison and Metalock appeared specially and moved to quash service of process on them or in the alternative to dismiss the supplemental complaint filed against them.  They further moved the Court to dissolve the preliminary injunction which the Court had granted against them.  These motions were denied by the District Court.

3
Appellee based jurisdiction of the District Court over the non-resident defendants Morrison and Metalock on the claim that Scott and Morrison had been partners in the business until the assets were transferred to the corporation; that the transfer of assets to the New York corporation was for the purpose of defrauding appellee and preventing the District Court from enforcing a judgment in the patent infringement action; that some assets had been transferred to Morrison without consideration; that Morrison and Scott left the jurisdiction of the court and moved to New York in order to evade process; that Metalock had the patented article made in the district and shipped to it in New York and to its customers in other places; that Morrison and Metalock were interested in the patent infringement action and undertook to and did defend Scott in said action and paid the cost, expense and attorneys fees incident thereto; that this conduct entered their appearance in the patent infringement action and subjected them to the jurisdiction of the District Court.  Appellee relies on our decision in Ocean Accident & Guaranty Corp. Ltd. v. Felgemaker, 6 Cir., 1944, 143 F.2d 950 which was not an action for patent infringement.

4
The venue statute applicable to this case provides:

5
'Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.'  28 U.S.C. 1400(b).

6
The affidavits of Morrison and John J. Mahoney filed in the District Court were to the effect that Morrison and Metalock were citizens and residents of New York; that they never had any regular and established place of business in the district or committed any acts of infringement therein or had any agent in the district upon whom service of process could be made; that they owned no property in the district; that Conrad (the man alleged to have made the infringing article for Metalock in the district) was never an employee or agent of Metalock and never had a contract with it; that whatever acts Conrad committed were in his own behalf; that Mahoney was not an agent of Morrison or Metalock and was not authorized to receive service of process.

7
There was no evidence in the record to establish that at the time Morrison and Metalock were added as parties defendant they resided or had a regular and established place of business in the district or had an agent upon whom process could be served or had property in the district.  The District Court made no findings to that effect and the uncontroverted evidence was all to the contrary.  While appellee claims that the infringing articles were made in the district, no such finding was made by the District Judge.  In the brief of appellee is contained the statement 'There has been no ruling to the effect that the corporation (Metalock) did not commit acts of infringement in Columbus, Ohio.'  The fact that no ruling had been made does not help appellee for jurisdiction must affirmatively appear upon the face of the record.

8
Assuming that assets of Scott had been wrongfully transferred to the non-resident defendants Morrison and Metalock, this would not enter their appearance in the action or confer jurisdiction on the District Court to set aside the transfers.  The transfers could be set aside only in a court which had jurisdiction over them, in personam or over their property.  The District Court had neither.

9
Appellee must, therefore, rely on the interest of Morrison and Metalock in the subject of the patent litigation and on their participation in the defense of Scott, to constitute a waiver of the venue requirements of Section 1400(b) of Title 28 U.S.C.

10
This type of conduct was held not to constitute a waiver of venue in the recent decision of the Supreme Court in Schnell v. Eckrich & Sons, Inc., 81 S.Ct. 557.  Schnell followed an earlier decision of the Court in Merriam Co. v. Saalifield, 1916, 241 U.S. 22, 36 S.Ct. 477, 60 L.Ed. 868.  While openly controlling the defense of a case in which a person has an interest would preclude such person from later relitigating the same issues, it does not constitute a waiver of the venue statute.  The rule in Ocean does not apply in an action for patent infringement where venue is controlled exclusively by Section 1400(b).  See also: Fourco Glass Co. v. Transmirra Products Corp., 1957, 353 U.S. 222, 77 S.Ct. 787, 1 L.Ed.2d 786.

11
The order of the District Court denying appellants' motion to dissolve the preliminary injunction is reversed and the cause remanded with instructions to grant said motion to dissolve and to dismiss the supplemental complaint as to them for lack of jurisdiction.


In the
United States Court of Appeals
For the Seventh Circuit

No. 00-2596

Central States, Southeast and Southwest Areas
Pension Fund, and Howard McDougall, trustee,

Plaintiffs-Appellees,

v.

Thomas C. Fulkerson and Dolly S. Fulkerson,

Defendants-Appellants.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 99 C 0420--James F. Holderman, Judge.

Argued January 9, 2001--Decided January 29, 2001

      Before Flaum, Chief Judge, and Bauer and Coffey,
Circuit Judges.

      Flaum, Chief Judge. Defendants Thomas and Dolly
Fulkerson appeal the district court’s grant of
summary judgment to plaintiff Central States on
its claim for withdrawal liability. The
Fulkersons argue that the district court erred in
determining that their activities met the
statutory requirements for liability. For the
reasons stated herein, we reverse and remand.

I.   Background

      Thomas ("Tom") and Dolly are husband and wife.
They are the only shareholders of Holmes Freight
Lines, Inc. ("Holmes"), a trucking company that
is now in bankruptcy. Tom is the President of
Holmes and owns 68% of its stock, while Dolly is
a 32% owner and is the Vice-President, Secretary,
and a member of the Board of Directors, though
the defendants claim she has never been active in
running Holmes.

      In addition to managing Holmes, Tom leased a
few properties. At his direction, Holmes
purchased three parcels of land between January,
1985 and January, 1987. The properties were
located in Portland, Oregon, Salt Lake City,
Utah, and Auburn, Washington. Holmes built
trucking terminals on the properties and then
sold these back to Tom. Tom then leased the
properties to Action Express, Inc. ("Action").
Action was another trucking company owned by the
Fulkersons’ sons, though Holmes and Action were
always maintained as separate corporations and
Tom and Dolly did not have any interest in or
participate in the management of Action. Tom
negotiated both the purchases of the property and
the leases. These leases were "triple net
leases," under which the tenant is responsible
for most obligations such as maintenance,
operating expenses, real estate taxes, and
insurance (though Holmes may have paid the
insurance premium on these properties and have
been reimbursed by Tom). Thus, Tom had few
obligations associated with being a traditional
landlord. Tom sold the Auburn property in 1990
and the Portland property in 1995, realizing
gains on both sales. The Salt Lake City property
is still leased to Action. Tom has not devoted
more than five hours in any year in connection
with the properties, and claims that he purchased
the properties for investment purposes. According
to Tom, he does little more than deposit the rent
checks and make mortgage payments, and reports
the rental income on Schedule E of his federal
income tax forms for supplemental income.

      Holmes was subject to various collective
bargaining agreements that required it to
contribute to Central States. After Holmes ceased
operations in July, 1998, it began self-
liquidating and paid unsecured creditors one-
quarter of the amount they were owed. Holmes paid
Central States $236,126.45, a fourth of the
amount Holmes believed sufficient to cover its
pension obligations. Central States, on the other
hand, calculated Holmes’s withdrawal liability
under the Multiemployer Pension Plan Amendments
Act of 1980 ("MPPAA") to be $1,889,011.61. See
generally Central States, Southeast and Southwest
Areas Pension Fund v. Midwest Motor Express,
Inc., 181 F.3d 799, 803-04 (7th Cir. 1999)
(discussing the mechanics of withdrawal
liability). The fund decided to sue the
Fulkersons to recover the deficiency.

      In the district court on a motion for summary
judgment, Central States argued that the
Fulkersons’ leasing activities constituted an
unincorporated trade or business under 29 U.S.C.
sec. 1301(b)(1), which states that all "trades or
businesses," whether or not they are
incorporated, shall be treated as a single
employer. Under this theory, because both the
supposed leasing business and Holmes are under
the common control of the Fulkersons, the leasing
business was obligated to pay the remainder of
Holmes’s withdrawal liability. Since the leasing
business was unincorporated, the Fulkersons
became personally liable for these payments to
Central States. See Central States, Southeast and
Southwest Areas Pension Fund v. Johnson, 991 F.2d
387, 388-89 (7th Cir. 1993) (describing a similar
theory of liability).

      The Fulkersons responded with a variety of
arguments, which primarily center on the claim
that they did not spend enough time engaging in
leasing activities for these to constitute a
"trade or business" as required by the statute.
They also offered an expert witness in the real
estate market who opined that the triple net
leases were economically identical to passive
investments such as stocks or bonds. In the
alternative, they contended that Dolly had shown
that she did not intend to be a partner in the
alleged leasing business, and so she should not
be personally liable for the withdrawal liability
even if Tom is. The district court rejected all
of the Fulkersons’ arguments, granted summary
judgment to the fund, and ordered the Fulkersons
to pay Central States the withdrawal liability
plus liquidated damages, interest, and attorneys’
fees, as provided in 29 U.S.C. sec. 1132(g)(2).
The Fulkersons now appeal the district court’s
determinations that the leasing was a trade or
business and that Dolly intended to be a partner
with Tom.

II.    Discussion

A.    Standard of Review

      The initial question presented by this case is
the standard by which we review the district
court’s decision. The district court’s
interpretation of the statutory phrase "trade or
business" is, of course, purely a question of law
that we review de novo. See Salve Regina College
v. Russell, 499 U.S. 225, 231-32 (1991); Eli
Lilly & Co. v. Natural Answers, Inc., 233 F.3d
456, 467 (7th Cir. 2000). Summary judgments are
reviewed de novo, viewing all of the facts, and
drawing all reasonable inferences from those
facts, in favor of the nonmoving party. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
255 (1986); Opp v. Wheaton Van Lines, Inc., 231
F.3d 1060, 1063 (7th Cir. 2000).

      However, Central States argues that in the
circumstances of this case we review the district
court’s "characterizations" of undisputed
historical facts, which apparently means mixed
questions of law and fact, under a clearly
erroneous standard of review, citing Central
States, Southeast and Southwest Areas Pension
Fund v. Slotky, 956 F.2d 1369, 1373-74 (7th Cir.
1992) and Central States, Southeast and Southwest
Pension Fund v. Personnel, Inc., 974 F.2d 789,
792 (7th Cir. 1992). Central States claims that
for both the trade or business issue and the
partnership question the underlying facts are
undisputed, the district court merely applied the
law to the facts, and the Fulkersons have no
right to a jury trial. According to the fund, the
satisfaction of these three conditions requires
this court to deferentially review the district
court’s decision. The Fulkersons argue that
Slotky and Personnel are unsound to the extent
that these opinions contradict well-settled law
of the Supreme Court and this circuit regarding
review of summary judgments, and in the
alternative that they are entitled to a jury
trial; thus, a de novo standard should be
applied.

      We agree with the Fulkersons that our review is
de novo on the trade or business question
because, as explained more fully below, the
district court committed a legal error in
interpreting the statute. Slotky and Personnel
are inapplicable for this reason. Thus, we
decline the Fulkersons’ invitation to partially
overrule these cases.

B.   Trade or Business

      An employer incurs withdrawal liability for
withdrawing from a multiemployer pension plan, 29
U.S.C. sec. 1381(a), and employer means all
"trades or businesses (whether or not
incorporated)" that are under common control, 29
U.S.C. sec. 1301(b)(1). Thus, in order to impose
withdrawal liability on an organization other
than the one obligated to the fund, two
conditions must be satisfied: (1) the
organization must be under common control with
the obligated corporation; and (2) it must be a
trade or business. The Fulkersons do not dispute
that Tom Fulkerson controlled both Holmes and the
leasing. Thus, the only question is whether Tom’s
leasing constitutes a trade or business.

      As in all statutory interpretation cases, we
begin with the statutory language. See Hughes
Aircraft Co. v. Jacobson, 525 U.S. 432, 438
(1999). Statutory terms or words will be
construed according to their ordinary, common
meaning unless these are defined by the statute
or the statutory context requires a different
definition. See Walters v. Metropolitan Educ.
Enters., Inc., 519 U.S. 202, 207 (1997); Perrin
v. United States, 444 U.S. 37, 42 (1979). Section
1301(b)(1) presents no interpretive difficulties
when it is used to impute withdrawal liability to
another corporation or other formally recognized
business organization that is under common
control with the obligated entity. However,
thorny questions can arise when informal economic
activities are claimed to be a trade or business.
In these circumstances, given the interpretive
principles outlined above and the fact that MPPAA
does not define "trades or businesses," we
reaffirm that the test for what constitutes a
trade or business established in Commissioner v.
Groetzinger, 480 U.S. 23, 35 (1987) applies in
determining whether an activity is a trade or
business for purposes of sec. 1301(b)(1)./1 See
Personnel, 974 F.2d at 794; see also Connors v.
Incoal, Inc., 995 F.2d 245, 250-51 & n.7. For an
activity to be a trade or business under
Groetzinger, a person must engage in the
activity: (1) for the primary purpose of income
or profit; and (2) with continuity and
regularity. 480 U.S. at 35. While Groetzinger was
interpreting only a specific provision in the tax
code, its test comports with the common meaning
of trade or business and thus can be used more
generally./2 One purpose of the Groetzinger test
is to distinguish trades or business from
investments, which are not trades or business and
thus cannot form a basis for imputing withdrawal
liability under sec. 1301(b)(1). See Personnel,
974 F.2d at 794.

      The district court committed a legal error in
determining that the second part of the trade or
business test was satisfied. The district court
relied only on the Fulkersons’ holding of the
leases alone, which they had done for over ten
years, in concluding their leasing had been
continuous and regular conduct; this was
incorrect. Actions of a person, such as
negotiating leases, researching properties,
maintaining or repairing properties, etc., are
business or trade conduct and thus are
appropriately considered in determining whether
the continuity and regularity prong of
Groetzinger is satisfied. However, possession of
a property, be it stocks, commodities, leases, or
something else, without more is the hallmark of
an investment. Thus, mere ownership of a property
(as opposed to activities taken with regard to
the property) cannot be considered in determining
whether conduct is regular or continuous./3

      Central States argues that even if the holding
of the leases is not considered, Tom Fulkerson
engaged in activities such as selecting the
properties, negotiating purchases, and
negotiating the leases. However, the Fulkersons
presented evidence, including an expert witness,
that the leases were an investment that rarely
required the time or attention of the Fulkersons.
Tom Fulkerson averred that he never spent more
than five hours in a year dealing with the leases
or the leased properties. Once the possession of
the leases is removed from the equation, a
reasonable factfinder could determine that the
leasing activities were not sufficiently
continuous and regular to constitute a trade or
business.

      In making this decision, we are mindful that
sec. 1301 (b)(1) was not intended to impose
automatic personal liability on individuals who
own companies that are required to contribute to
pension funds. The plain statutory language
demonstrates this by stating that only "trades or
businesses" can be considered as a single
employer, and we have held that shareholders
generally are not responsible for withdrawal
liability. See Johnson, 991 F.2d at 390-91;
Plumbers’ Pension Fund, Local 130 v. Niedrich,
891 F.2d 1297, 1299-1301 (7th Cir. 1989). Given
the prevalence of investing, permitting the
holding of investments (which will normally
satisfy the first prong of Groetzinger since the
purpose is to produce income) without more to be
considered regular and continuous activity would
eviscerate the limitations placed in the text of
sec. 1301(b)(1). Pension funds have statutory
means to recover assets that are transferred to
evade withdrawal liability, such as 29 U.S.C.
sec. 1392(c), and must employ these rather than
a personal liability mechanism not granted to
them by Congress.

      Central States has a couple of arguments in
support of the district court’s holding, though
we find these unconvincing. First, it claims that
Tom Fulkerson’s leasing activities are virtually
identical to those in Personnel, where the
defendant was held to be responsible for the
withdrawal liability. However, the defendant in
Personnel much more frequently engaged in
activities related to leasing, such as buying and
selling multiple properties annually and
advertising, than the Fulkersons. 974 F.2d at
794-95. Thus, in Personnel the defendant spent
enough time engaged in actions related to leasing
to show that his conduct was regular and
continuous. In the present case, taking the facts
regarding the minimal time spent on leasing
activities as presented by the Fulkersons, we are
unable to make such a conclusion. For example, in
contrast to the numerous real estate sales and
purchases the defendant in Personnel transacted
every year, Tom Fulkerson bought only three
properties and sold two over a span of more than
ten years.

      Second, Central States argues that "trades or
businesses" should be construed broadly in
accordance with MPPAA’s policy to prevent the
avoidance of withdrawal liability obligations by
fractionalizing assets. Central States is correct
that this was a policy behind MPPAA, see, e.g.,
Johnson, 991 F.2d at 388, Personnel, 974 F.2d at
794, but knowing what the policy is tells us
little about how far it should extend. MPPAA,
like much other legislation, is a compromise
embodying competing purposes and is intended to
effectuate certain policies only to a restricted
degree. See Central States, Southeast and
Southwest Areas Health and Welfare Fund v. Cullum
Cos., 973 F.2d 1333, 1339 (7th Cir. 1992)
(explaining that a number of MPPAA’s provisions
were meant to limit the impact and application of
withdrawal liability and that giving these less
effect than the plain language requires would
distort the statutory scheme). The only way in
which we can determine the boundaries on these
policies is by examining the statutory language.
This explains why we have in the past rejected
policy-based interpretations of MPPAA that did
not find support in the text. See Trustees of
Chicago Truck Drivers, Helpers and Warehouse
Workers Union (Independent) Pension Fund v.
Leaseway Transp. Corp., 76 F.3d 824, 830-31 (7th
Cir. 1996); Johnson, 991 F.2d at 390-91; Cullum
Cos., 973 F.2d at 1338-40. Congress demarcated
the extent to which the anti-fractionalization
policy would be pursued in the text of the MPPAA,
such as by not imposing personal liability on
shareholders, as explained above. The provision
imposes liability only on "trades or businesses,"
and those words must be given their ordinary
meaning in accordance with established canons of
interpretation. Under a proper construction of
the language of sec. 1301(b)(1), a reasonable
factfinder could determine that the Fulkersons’
leasing activities do not constitute a trade or
business./4

III.   Conclusion

      The plain meaning of MPPAA precludes considering
the passive holding of property in determining
whether an activity rises to the level of a trade
or business. Thus, the district court committed
error by relying only on the fact that the
Fulkersons had held the leases for ten years in
determining whether the continuity and regularity
prong of Groetzinger was satisfied. On remand (to
which Circuit Rule 36 will apply) only the
actions of the Fulkersons regarding the leasing,
rather than mere possession of the leases, should
be considered. For the reasons stated herein, we
Reverse the decision of the district court and Remand
for further proceedings consistent with this
opinion.

FOOTNOTES

/1 We also reaffirm that no economic nexus is
required between the obligated organization and
trades or business under common control because
the statute does not impose one. See Personnel,
974 F.2d at 793; Slotky, 956 F.2d at 1374.
/2 In Central States, Southeast and Southwest Areas
Pension Fund v. Ditello, 974 F.2d 887, 889-90
(7th Cir. 1992), we cautioned against using tax
code cases to interpret MPPAA. Ditello noted that
the phrase "trade or business" appears almost two
hundred times in the tax code. Id. at 889. The
particular meaning given to any single instance
of the phrase may be shaped by the surrounding
statutory context of the tax code and thus
involve considerations that are absent in MPPAA.
While we adhere to the idea that courts must be
careful in using tax code cases to construe MPPAA
because of the different context, Groetzinger
states the common, ordinary definition of trade
or business and is thus appropriately used to
interpret sec. 1301(b)(1).

/3 Board of Trustees of Western Conference of
Teamsters Pension Trust Fund v. Lafrenz, 837 F.2d
892, 894-95 & n.7 (9th Cir. 1988) contains
language indicating that passively holding
investments might be considered a trade or
business under MPPAA, though it limits its
holding to the facts before it. To the extent
that Lafrenz might be read to conflict with our
decision, we decline to follow it. As stated in
Personnel and supported by Groetzinger, passively
holding investments without more cannot normally
be considered to be a trade or business.

/4 This court’s holding that the district court
erred in deciding that Tom Fulkerson’s leasing is
a trade or business vacates the district court’s
finding that Dolly was a partner of Tom in the
leasing business. Thus, we need not reach the
Fulkersons’ argument that the district court
incorrectly determined that Dolly intended to be
Tom’s partner.


90 Wn.2d 355 (1978)
581 P.2d 1349
LINDA L. SALOIS, ET AL, Appellants,
v.
MUTUAL OF OMAHA INSURANCE COMPANY, ET AL, Respondents.
No. 45231.
The Supreme Court of Washington, En Banc.
August 3, 1978.
McKanna, Herman, Toreson & Dunkley, by Lloyd A. Herman and Reed, Otterstrom & Giesa, P.S., by John P. Giesa, for appellants.
MacGillivray, Jones, Clarke, Schiffner & Johnson, by Richard E. Hayes, for respondents.
Slade Gorton, Attorney General, John E. Lamp, Senior Assistant, and Peter J. Bezek, Assistant, amici curiae.
BRACHTENBACH, J.
Plaintiffs, husband and wife, sued for amounts allegedly due from defendant Mutual of Omaha Insurance Company under an insurance policy providing hospital and surgical benefits, for mental distress damages and for attorneys' fees and damages under the Consumer Protection Act, RCW 19.86. Defendant counterclaimed for rescission of the policy, alleging misrepresentations in the application therefor.
Plaintiffs were awarded the insurance benefits plus damages for mental distress. However, the trial court denied the recovery of attorneys' fees and damages under the Consumer Protection Act. The only issue on appeal is recovery under the Consumer Protection Act. We reverse.
*357 Plaintiffs purchased the policy involved from defendant's agent. They paid the premium. No special exclusions from coverage were stated. Prior to physical issuance of the policy, plaintiff wife experienced medical problems which led to hospitalization and surgery. When notified of plaintiff's claim, defendant attempted to return the premium and cancel coverage. When plaintiffs refused this action, defendant issued the policy but added an exclusion to eliminate coverage for plaintiff wife's condition.
Our review is limited because only a portion of the clerk's papers were brought up. The record does not include the insurance application, the policy or any record of proceedings. We have gleaned the foregoing facts from the limited record and treat the issue as a matter of statutory interpretation.
The jury rendered a special verdict finding: (1) that plaintiff wife did not make a false and material misrepresentation about her state of health or past medical history; (2) that defendant did not engage in unfair or deceptive practices in effecting the sale of the policy; and (3) that defendant did breach its duty of good faith and fair dealing in refusing to pay plaintiffs' claim for benefits. We are without the benefit of any of the jury instructions upon which the special verdict was based.
Acting upon post-trial motions, the court rendered a memorandum opinion and entered findings and conclusions. The court held that the refusal of defendant to pay policy benefits and its attempt to persuade plaintiffs to settle for less than they were entitled to were unfair and a breach of its duty under the policy. Apparently relying upon Johnston v. Beneficial Management Corp. of America, 85 Wn.2d 637, 538 P.2d 510 (1975), the court believed that this post-sale bad faith did not give rise to a Consumer Protection Act remedy.
We conclude that plaintiffs were entitled to damages and reasonable attorneys' fees under RCW 19.86.090 for defendant's violation of RCW 19.86.020.
*358 There are several complex and intertwined theories involved, but our analysis must be bottomed on two principles: (1) the legislature has declared that the Consumer Protection Act is to be "liberally construed that its beneficial purposes may be served" and (2) that the purpose of the act is to complement the body of federal law governing similar acts and practices. RCW 19.86.920.
Before examining our cases interpreting the act, we first review the pertinent provisions of the statute. First, RCW 19.86.020 provides:
Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.
This section is patterned after section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1).
Second, the remedy for violation of RCW 19.86.020 is dictated by RCW 19.86.090:
Any person who is injured in his business or property by violation of RCW 19.86.020 ... may bring a civil action in the superior court to enjoin further violations, to recover the actual damages sustained by him, or both, together with the costs of the suit, including a reasonable attorney's fee, and the court may in its discretion, increase the award of damages to an amount not to exceed three times the actual damages sustained: Provided, That such increased damage award for violation of RCW 19.86.020 may not exceed one thousand dollars.
Thus our questions are whether defendant's actions were a violation of RCW 19.86.020 and whether plaintiff is entitled to the benefits of RCW 19.86.090.
[1] In State v. Reader's Digest Ass'n, 81 Wn.2d 259, 501 P.2d 290 (1972), we held that what is illegal and against public policy is per se an unfair trade practice within the ambit of RCW 19.86.020. If the defendant's actions in dealing with plaintiff's claim under the insurance policy were illegal and against public policy, then there was a per se violation of .020. The Reader's Digest test is twofold: (1) is the action illegal, i.e., is it unlawful; and (2) is it against public policy as declared by the legislature or the judiciary?
*359 Some statutes contain a specific mandate that commission of a prohibited act shall be a violation of the Consumer Protection Act, e.g., RCW 19.16.440 governing collection agencies. There is no such connecting link between the insurance code to which defendant is subject and the Consumer Protection Act.
[2] However, RCW 48.01.030[1] is a clear declaration that there is a public interest in the business of insurance and that it is to be conducted in good faith and free from deception.
The jury's special verdict that defendant breached its duty of good faith and fair dealing proves a violation of RCW 48.01.030. Consequently, defendant's actions were unlawful. Likewise, defendant's actions were against public policy in view of the legislature's mandate of a public interest in the business of insurance. It follows, and we conclude, that the defendant's actions were a per se violation of RCW 19.86.020.
Defendant contends that the Consumer Protection Act is applicable only to acts or practices which are designed to induce a potential buyer to purchase goods or services. Thus it argues no post-sale acts or practices are within RCW 19.86. We disagree.
[3] The statute is not so limited. RCW 19.86.020 declares unlawful unfair or deceptive acts or practices in the conduct of any trade or commerce. The words "trade or commerce" are defined in RCW 19.86.010(2) to include "the sale of assets or services, and any commerce directly or indirectly affecting the people of the state of Washington." The fact that the definition of those words state that they shall "include" sales must mean that there is encompassed more than just sales. If the legislature had intended to so limit the act it could have said that it applies only to sales. *360 Not only did it not do so, it went on to include "any commerce directly or indirectly affecting the people of the state of Washington."
Taking the broad scope of RCW 19.86.010 and coupling it with RCW 19.86.020's reference to the conduct of any trade or commerce, we cannot conclude that the legislature intended the act to be restricted to acts or practices designed to induce a sale.
The practical effect of such a narrow construction is apparent in this case. The defendant was not unfair or deceptive in the sale of its policy. But what the plaintiffs purchased was not the pieces of paper constituting the policy. They purchased the potential benefits and security of coverage. When defendant should have rendered those benefits, it, according to the special verdict, engaged in acts of bad faith and breached its duty of fair dealing.
The able trial judge recognized that plaintiffs were deprived, in effect, of what they had purchased. He said:
Although it has been established by the jury's verdict that she is entitled to recover under the policy and that Mutual of Omaha was guilty of bad faith in refusing to honor her claim for benefits, the necessity to employ and pay her attorneys has deprived plaintiff of an adequate recovery. Her victory is a pyrrhic one, if a victory at all.
Yet in denying attorneys' fees and exemplary damages, the court felt bound by some of the language in Johnston v. Beneficial Management Corp. of America, supra. There is language to the effect that only acts designed to effect a sale are within the Consumer Protection Act. Upon reexamination and review of additional material we find that such a reading of the statute is too narrow and contrary to the policy of the act. Under its facts, Johnston is correct in result. First, we pointed out that we were cited no authority that the comparable federal act was not so limited. Second, we held that the 1970 private remedy amendment, RCW 19.86.090, Laws of 1970, 1st Ex. Sess., ch. 26, § 2, did not apply retroactively, which was correct. Third, we held that inaction in not notifying a consumer that a contract might *361 violate the act did not create a cause of action. To the extent that the opinion seemingly went beyond those narrow holdings, based upon the facts of that case, it is so modified.
Next we must consider Lightfoot v. MacDonald, 86 Wn.2d 331, 544 P.2d 88 (1976). There we held that the Consumer Protection Act does not encompass contract disputes between individuals when there is no public interest subject matter involved. There are two sentences in the Lightfoot opinion which apparently are being misinterpreted. We said at page 334:
It follows that an act or practice of which a private individual may complain must be one which also would be vulnerable to a complaint by the Attorney General under the act. A breach of a private contract affecting no one but the parties to the contract, whether that breach be negligent or intentional, is not an act or practice affecting the public interest.
Implicit in that statement is the reverse, i.e., if private contracts affect the public interest then the private remedy provided in RCW 19.86.090 becomes viable.
Thus Lightfoot is correct on its facts in that there was a failure to show that the private dispute affected the public interest or was within the sphere of trade or commerce as required by the statute.
[4] In contrast, in this case we have a business which has been declared by the legislature to be one affected by the public interest, RCW 48.01.030. It is an industry extensively regulated and is supervised by an elected public official.
Thus, all the requisites of RCW 19.86 are met. The defendant is engaged in trade and commerce in a business legislatively declared to be affected by the public interest. It has committed acts which, by the special verdict, have been found to be unfair. Since we have concluded that post-sale activities are subject to the act, the plaintiffs are entitled to invoke the remedies of RCW 19.86.090.
*362 The cause is remanded to the Superior Court for the determination of the appropriate awards to be made under that statute.
WRIGHT, C.J., and ROSELLINI, HAMILTON, STAFFORD, UTTER, HOROWITZ, DOLLIVER, and HICKS, JJ., concur.
NOTES
[1]  "The business of insurance is one affected by the public interest, requiring that all persons be actuated by good faith, abstain from deception, and practice honesty and equity in all insurance matters. Upon the insurer, the insured, and their representatives rests the duty of preserving inviolate the integrity of insurance." RCW 48.01.030.