WILLIAM M. SKRETNY, Chief Judge.
This is a criminal action brought against Defendants Carl A. Larson, James L. Minter III, Mark N. Kirsch, Gerald H. Franz, Jr., Jeffrey A. Peterson, Gerald E. Bove, Michael J. Caggiano, Jeffrey C. Lennon, Kenneth Edbauer, George Dewald, Michael Eddy, and Thomas Freedenberg.
Pending before this Court is the Report and Recommendation of the Honorable Hugh B. Scott, United States Magistrate Judge, filed October 12, 2010 (Docket No. 184), recommending that Defendants' motions to dismiss the Superseding Indictment (Docket Nos. 153, 155) be granted. On November 29, 2010, the government filed objections to the Report and Recommendation. (Docket No. 196.) After full briefing, this Court heard oral argument on June 14, 2011, and took the objections under advisement at that time. (Docket No. 226.)
For the reasons discussed below, having considered Judge Scott's Report & Recommendation, the parties' submissions, and the issues raised at oral argument, this Court will set aside Judge Scott's Report & Recommendation, grant the government's objections, and deny Defendants' motions to dismiss.
On April 1, 2008, the grand jury returned an eight-count superseding indictment against Defendants, charging them
Count One of the indictment alleges, generally, that Defendants, members of the International Union of Operating Engineers, Local 17, AFL-CIO ("Local 17"), were operating as a criminal enterprise with the objective of extorting property from various construction firms throughout Western New York. (Id. at 2-5.) The criminal enterprise operated from about January 1997 to December 2007. (Id. at 2.) Defendants Larson, Minter, Kirsch, and Franz were the "primary" figures within the criminal enterprise. (Id. at 3-5.)
The purported objective of the Local 17 criminal enterprise was to obtain through extortion several types of property, including (1) the property of construction contractors consisting of wages and benefits to be paid pursuant to labor contracts with Local 17; (2) the property of non-union construction laborers consisting of the jobs being performed by those laborers, and the attendant wages and benefits; (3) the property right of construction contractors and businesses to make business decisions free from outside pressure; and (4) the property of construction contractors consisting of wages and benefit contributions paid by such contractors for "unwanted, unnecessary, and superfluous labor." (Id. at 5.) Defendants used various unlawful means to secure these objectives, including actual violence, threats, intimidation, sabotage of property, and attempted interruption of construction projects. (See id. at 6-8.)
Defendants allegedly engaged in a conspiracy to conduct a pattern of racketeering activity. (Id. at 8-9.) Eleven acts of racketeering are described. (See id. at 10-32.) Each act consists of attempted extortion in violation of the Hobbs Act, 18 U.S.C. § 1951(a), and/or the New York Penal Law, see N.Y. Penal Law § 155.05(2)(e)(i) & (ii). Racketeering Act 11 alleges a conspiracy to commit extortion in violation of federal and state law. (Sup. Indict. at 29-32.)
Different Defendants are named as participants in each of the eleven acts. For example, Defendant Larson is the named actor with respect to Racketeering Act 1, an attempt to extort jobs and other forms of property from STS Construction of Western New York. (Sup. Indict. at 10-12.) Defendants Peterson, Larson, Minter, Franz and Dewald are the alleged participants in Racketeering Act 2, directed at Zoladz Construction Company. (Id. at 12-15.)
Count Two charges that Defendants engaged in a Hobbs Act conspiracy from about October 2003-December 2007, with the purpose of extorting the following types of property from Western New York construction contractors: (1) the property right to make business decisions free from pressure; (2) wages and benefits for "unwanted, unnecessary, and superfluous" labor; and (3) the jobs and associated wages and benefits of the employers' employees. (Id. at 32-33.) The indictment lists 75 overt acts in furtherance of this conspiracy. (Id. at 33-53.) These acts include telephone harassment, damaging construction equipment, making verbal threats, the
Counts Three through Eight allege attempted Hobbs Act extortion against Western New York construction firms, based on the same conduct underlying Counts One and Two. (Id. at 53-60.) Different Defendants are named in the various counts. (Id.) Again, the charge is that Defendants attempted to extort from the victims (1) the right to make business decisions free from pressure; (2) wages and benefits for "unwanted, unnecessary, and superfluous" labor; and (3) the jobs of the contractor employees, with attendant wages and benefits. (See, e.g., id. at 53-54 (allegations of attempts to extort from STS Construction).)
Finally, the indictment sets forth a claim for forfeiture of property and proceeds deriving from the criminal enterprise, along with benefits relating to Defendants' union positions, under 18 U.S.C. § 1963. (Id. at 60-62.)
On April 19, 2010, Defendants filed a joint motion to dismiss the Superseding Indictment. (Docket No. 153.) Defendants maintained that the charges in the indictment did not state a violation of the Hobbs Act under United States v. Enmons, 410 U.S. 396, 93 S.Ct. 1007, 35 L.Ed.2d 379 (1973). (Mem. in Supp. of Defs.' Joint Mot. Dismiss (Docket No. 154) at 2-5.) Nor did the alleged conduct constitute extortion under New York state law. (Id. at 5-8.) Defendants also contended that the indictment should be dismissed as impermissibly vague to the extent it could be read to permit Hobbs Act and RICO liability for the conduct alleged therein. (Id. at 11-12.)
Defendant Bove moved separately to dismiss on the ground that the indictment was facially insufficient because it did not allege the essential facts underlying the charges against him. (Mem. in Supp. of Def. Bove's Mot. Dismiss (Docket No. 156) at 1-15.) Defendant Bove also argued that the Hobbs Act is unconstitutional as applied in this case because it criminalizes protected speech and association. (Id. at 16-23.) Finally, Defendant Bove contended that the Hobbs Act impermissibly fails to warn of the potential criminality of the conduct alleged in this case. (Id. at 23-24.)
On October 12, 2010, the Honorable Hugh B. Scott, United States Magistrate Judge, issued a Report and Recommendation (Docket No. 184 ("R & R")), recommending that Defendants' motions be granted and that the Superseding Indictment be dismissed. (R & R at 18.)
In evaluating the facial validity of the indictment, Judge Scott identified the key issue as whether Defendants, in engaging in the conduct alleged in the indictment, were pursuing lawful union objectives; namely, the attainment of work for Local 17's members that was not "unwanted or superfluous." (Id. at 12.) Judge Scott determined that the indictment failed on its face because it did not identify which services offered by Defendants were unwanted, superfluous, or fictitious, but instead relied on the conclusory allegation that the services Defendants sought to be
(Id.) The indictment also did not allege that Defendants sought personal payoffs or fictitious jobs for union members, so as to bring the conduct within the scope of the Hobbs Act. (Id.)
Judge Scott concluded that Defendants' conduct, as alleged, was not for any unlawful purpose. Rather, it was aimed at the legitimate objective of obtaining union jobs from reluctant construction contractors, which Enmons recognizes as lawful labor action. (Id.) Accordingly, the indictment failed to allege any Hobbs Act violations. (Id.)
Next, Judge Scott considered whether the indictment properly alleged extortion under New York Penal Law. (Id. at 14.) Judge Scott pointed out that under New York law, pursuit of legitimate union objectives is not punishable as extortion. (Id.) Because Defendants' objectives here were legitimate, the RICO count could not be predicated on state law extortion allegations.
Judge Scott also addressed Defendant Bove's separate motion. Judge Scott rejected the argument that the indictment was facially insufficient for failure to allege the specific criminal conduct of each Defendant. (Id. at 16.) However, Judge Scott agreed that the indictment failed to the extent it criminalized protected speech and association by union members. (Id. at 17.) Under Giboney v. Empire Storage & Ice Co., 336 U.S. 490, 69 S.Ct. 684, 93 L.Ed. 834 (1949), speech in the context of a labor dispute may be criminalized where it is integral to criminal conduct. (Id.) However, because the indictment did not allege the requisite unlawful union objective upon which to base criminal liability, speech in connection with the conduct in the indictment could not be criminalized. (Id.) Accordingly, Judge Scott recommended that Defendant Bove's motion to dismiss be granted on this ground.
The government filed objections to Judge Scott's Report and Recommendation. See 28 U.S.C. § 636(b)(1); see also Fed.R.Crim.P. 10 (providing that a magistrate judge may perform the duties authorized by 28 U.S.C. § 636 in a federal criminal proceeding). Defendants filed responses to the objections. This Court heard oral argument from the parties on June 14, 2011.
Under 28 U.S.C. § 636(b)(1), if objections are made to a magistrate judge's report and recommendation regarding a dispositive matter, the district court must make a de novo determination of any disputed findings and conclusions. 28 U.S.C. § 636(b)(1). The court may accept, reject, or modify any of the proposed findings and recommendations of the magistrate judge. Id.
Rule 12(b) of the Federal Rules of Criminal Procedure provides that a motion to dismiss may raise "any defense, objection, or request which is capable of
Defendants contend that the Superseding Indictment fails on its face because it does not allege any criminal conduct. As noted, the indictment in this case charges a RICO conspiracy predicated on violations of the Hobbs Act and New York extortion law.
The Hobbs Act provides in relevant part:
18 U.S.C. § 1951.
In United States v. Enmons, 410 U.S. 396, 396, 93 S.Ct. 1007, 35 L.Ed.2d 379 (1973), the Supreme Court of the United States addressed the applicability of the Hobbs Act to union activity. The appellees in that case were union members and officials who were seeking a new collective bargaining agreement with Gulf States Utilities Company ("Gulf States") while the employees were on strike. 410 U.S. at 397, 93 S.Ct. 1007. The indictment charged that appellees had conspired to obstruct commerce, and that in furtherance of the conspiracy they
Id. at 397-98, 93 S.Ct. 1007 (internal quotations omitted). The alleged violent acts by the appellees included firing high-powered rifles at company transformers, draining the oil from a company transformer, and blowing up a transformer substation owned by the company. Id. at 398, 93 S.Ct. 1007.
The Supreme Court held in a 5-4 decision that the alleged conduct did not constitute a violation of the Hobbs Act, and thus that the indictment properly had been dismissed. Id. at 412, 93 S.Ct. 1007. First, the Court considered the meaning of the term "wrongful" as it applied to the definition of "extortion" under the Act. Id. at 399-400, 93 S.Ct. 1007. The Court explained that the term "wrongful" would be superfluous if it described only the means used to obtain the property, because any use of force or violence to obtain property would be wrongful. Id. Thus, the term "wrongful" must have been intended to refer to the objective of the alleged extortionist in seeking the property: "`[W]rongful' has meaning in the Act only if it limits the statute's coverage to those instances where the obtaining of the property would itself be `wrongful' because the alleged extortionist has no lawful claim to that property." Id. at 400, 93 S.Ct. 1007 (original emphases omitted).
The Court explained that the Hobbs Act had been properly applied in cases where union officials had used fear or force to obtain personal payoffs or "wages" for "imposed, unwanted, superfluous and fictitious services" of workers. Id. at 400, 93 S.Ct. 1007. In these instances, the union officials or members had no legitimate claim to the employer's property. Id. However, the Act could not be read to reach "the use of violence to achieve legitimate union objectives, such as higher wages in return for genuine services which the employer seeks," because the employers would receive honest, sought-for labor and the workers would be entitled to compensation therefor. Id.
Next, the Court turned to the Hobbs Act's legislative history. The Act was passed in response to the Supreme Court's decision in United States v. Local 807, 315 U.S. 521, 62 S.Ct. 642, 86 L.Ed. 1004 (1942). Enmons, 410 U.S. at 402, 93 S.Ct. 1007. In Local 807, members of the teamsters union in New York City had extracted payments from out-of-town truck drivers in exchange for the "unwanted and superfluous" service of driving the out-of-town trucks to and from the city. Id. at 401-02, 93 S.Ct. 1007. In several instances, the teamsters members had simply taken the "wages" and disappeared without performing any service. Id. at 402, 93 S.Ct. 1007.
The Local 807 Court applied the predecessor to the Hobbs Act, which excepted from criminal liability the extraction of "wages by a bona-fide employer to a bona-fide employee." Id. at 401, 93 S.Ct. 1007. The Local 807 Court held that the teamsters' conduct fell within the "wage" exception to the statute despite the fact that the work they provided was unwanted and unneeded. Id. at 402, 93 S.Ct. 1007.
The Enmons Court noted that Congress responded swiftly to the Local 807 decision
The Court reasoned that construing the Hobbs Act to apply to the use of force to obtain the "legitimate union demands of higher wages" would impermissibly broaden the reach of the statute to "all overtly coercive conduct in the course of an economic strike, obstructing, delaying, or affecting commerce." Id. at 410, 93 S.Ct. 1007. The Court noted:
Id. at 411, 93 S.Ct. 1007.
Significantly, Enmons did not discuss what constitutes a legitimate labor objective other than striking for higher wages. The Court provided only two examples of illegitimate labor objectives: "the exaction of personal payoffs, or the pursuit of `wages' for unwanted or fictitious services[.]" Id. at 407, 93 S.Ct. 1007.
Most courts applying Enmons have interpreted it narrowly, even within the labor context. In United States v. Markle, 628 F.3d 58 (2d Cir.2010), the Court of Appeals for the Second Circuit considered whether violence by a members of one union against members of another union during a dispute at a construction site fell within the Enmons exception to the Hobbs Act. Id. at 60. The Second Circuit concluded that "a violent attack on members of a competing union to gain the competing union's work is not a legitimate labor union objective within the meaning of Enmons." Id. at 62. Nothing in the statutory text or legislative history suggested that inter-union violence not connected to a labor-management dispute was exempt from Hobbs Act liability. Id. at 63. The court held that "[t]he Enmons defense is limited to labor-management disputes and does not extend to inter-union violence." Id. See also United States v. Debs, 949 F.2d 199, 201 (6th Cir.1991) (Enmons exception did not apply to union official's attempts to use violence to force another union member to withdraw his candidacy for union president; "Enmons has not been extended beyond its own facts"); United States v. Jones, 766 F.2d 994, 1002-03 (6th Cir.1985) (doubting whether Enmons would apply to the use of violence outside the collective bargaining context and in pursuit of goals other than higher wages and against individuals other than the strikers' employer); United States v. Russo, 708 F.2d 209, 215 (6th Cir.1983) (finding Enmons inapplicable where an employer coerced individual employees to agree to amend the collective bargaining agreement to the employees' detriment); United States v. Porcaro, 648 F.2d 753, 760 (1st Cir.1981) (Enmons dealt specifically with the problem of strike violence); United States v. Cerilli, 603 F.2d 415, 419 (3d Cir.1979) ("The [Enmons] Court's reasoning was obviously and explicitly tied to the labor context and more specifically to the strike context.").
Several decisions have addressed the Enmons exception in the context of a union's attempt to pressure a new employer into accepting a collective bargaining agreement.
Local One sought dismissal of the RICO claim, which was predicated on Hobbs Act violations, based on the Enmons exception. Id. at 504. Then-Judge Sotomayor stated:
Id. at 506. Local One was not authorized to negotiate an agreement on behalf of ATP's employees, and the employees did not want Local One's representation. Id. The court noted that
Id. Because Local One was not properly authorized and certified to make collective bargaining demands against ATP, its objectives were not legitimate and Enmons was inapplicable. Id. The court reasoned that "forcing a collective bargaining agreement upon unwilling employees and their employer is `wrongful' within the Hobbs Act's meaning; the union is an outside meddler with no lawful claim to the employer's property." Id. at 507. In Asbestos & Lead Removal Corporation v. Severino, et al., 2007 WL 925485 (E.D.N.Y. March 23, 2007) (ALR), as in A. Terzi Productions, an employer brought a civil RICO action against a union and its principals based on alleged Hobbs Act violations. Id. at **1-2. ALR alleged that the Laborers International Union of North America Local 78 ("Local 78") undertook a series of illegal acts intended to extort ALR into entering a collective bargaining agreement with Local 78. Id. at *1. These acts included breaking ALR's president's hand with a billy club and trying to run him over with a car; vandalizing ALR and employee vehicles; menacing an ALR employee on the Long Island Expressway; and spray painting and throwing bricks at the president's house. Id.
Local 78 argued the RICO claim should be dismissed under Federal Rule of Civil Procedure 12(b)(6). Id. at *1. Local 78 noted that, unlike in A. Terzi Productions, which concerned a fashion industry union, the case at bar involved a construction industry union. Id. at *2. Under federal labor standards, a union may seek a collective bargaining agreement with a construction employer even without recognition of the union by a majority of the employer's workers. Id. (citing 29 U.S.C. § 158(f)). Thus, Local 78 contended its actions in
The district court rejected this argument. The court explained that none of the material facts in Enmons were present in that case:
Id. at *3. Despite the fact that construction industry labor standards could afford Local 78 a legitimate basis to demand union recognition from ALR, there was no indication that "the violent acts alleged were incidental to bona fide bargaining in the context of a labor dispute." Id. at *4. The court reasoned:
Id. at *4. The court refused to apply Enmons to dismiss the Hobbs Act-based claims. Id. See also United States v. Franks, 511 F.2d 25, 31-32 (6th Cir.1975) ("[V]iolence designed to coerce a businessman into changing his establishments from non-union to union is certainly violence designed to extort."); C & W Constr. Co. v. Brotherhood of Carpenters and Joiners of Am., Local 745, AFL-CIO, 687 F.Supp. 1453, 1469 (D.Haw.1988) (union's conduct against employer did not fall within Enmons exception; there was no collective bargaining agreement and employer's employees did not want union's representation).
Rule 7(c) of the Federal Rules of Criminal Procedure requires that an indictment contain a "plain, concise and definite written statement of the essential facts constituting the offense charged." Fed.R.Crim.P. 7(c). An indictment is constitutionally sufficient if it (1) contains the essential elements of the offense charged so as to inform the defendant of the nature and cause of the accusation; (2) contains enough detail to enable the defendant to plead double jeopardy in a future prosecution based on the same set of facts; and (3) prevents prosecution for crimes based on evidence not presented to the grand jury. United States v. Walsh, 194 F.3d 37, 44 (2d Cir.1999) (citing United States v. Silverman, 430 F.2d 106, 110 (2d Cir.), modified, 439 F.2d 1198 (2d Cir.1970)). "We have often stated that `an indictment need do little more than to track the language of the statute charged and state the time and place (in approximate terms) of the alleged crime.'" United States v. Stavroulakis, 952 F.2d 686, 693 (2d Cir. 1992) (quoting United States v. Tramunti, 513 F.2d 1087, 1113 (2d Cir.1975), and citing cases).
Under these standards, this Court finds the indictment sufficient to state violations of the Hobbs Act, as judicially modified by Enmons. The indictment provides approximate dates, names, and places, and alleges that Defendants sought the "property" of their victims through the "wrongful use of actual or threatened force, violence, or fear." The indictment generally charges, for example, that from
(Sup. Indict. at 10-11 (emphasis added).) This allegation tracks the elements of Hobbs Act extortion. 18 U.S.C. § 1951 (requiring a deprivation of property, with the victim's consent, through the wrongful use of actual or threatened force, violence, or fear). It also uses the term "wrongful" to describe the overarching objective in using "actual and threatened force, violence and fear," and as such takes the allegation outside the Enmons exception. The other Hobbs Act extortion allegations in the indictment use the same language. (Sup. Indict. at 13-14, 15-16, 18-19, 20-21, 27-28, 29-30, 53-60.)
Defendants argue that, notwithstanding the indictment's use of the term "wrongful" to characterize their alleged conduct, the indictment fails to state a Hobbs Act violation because the substantive allegations do not describe a "wrongful" union objective. Instead, the allegations merely describe Defendants' goal of obtaining new collective bargaining agreements with construction employers in Western New York. This, according to Defendants, is a legitimate union objective. As such, under Enmons the indictment fails to state a Hobbs Act violation and is subject to dismissal.
It is clear that Hobbs Act liability in the context of a labor-management dispute turns on the legitimacy of the union's objective in engaging in the alleged conduct. If the union acts in furtherance of a legitimate labor objective, the use of force or violence incident to the pursuit of that objective is not subject to Hobbs Act liability (although it might be subject to prosecution under other provisions). However, if a union's objective is not legitimate, Enmons will not protect it from prosecution under the Hobbs Act.
Contrary to Defendants' assertion, even if a union's ultimate objective is to obtain collective bargaining agreements with new employers, this is insufficient on its own to bring the union's extortionate conduct under the Enmons exception. To read Enmons broadly to hold that, so long as the union is seeking a collective bargaining or similar agreement for its members, it is irrelevant whether violence, threats, and property damage are the primary tactics employed, would be to extend Enmons far beyond the narrow context in which it was decided. See Enmons, 410 U.S. at 399, 93 S.Ct. 1007 (narrowly framing issue as whether the Hobbs Act proscribes "violence committed during a lawful strike for the purpose of inducing an employer's agreement to legitimate collective-bargaining demands.") (emphases added); Markle, 628 F.3d at 62 (noting that the circuit courts have rarely extended Enmons beyond the context of strikes or bona fide negotiations between unions and employers) (citing cases); A. Terzi Productions,
This reading of Enmons is in accordance with the Supreme Court's interpretation of the term "wrongful" in the Hobbs Act. The Enmons Court concluded that "wrongful" referred to the use of coercive conduct when the extortionist has no lawful claim to the property sought. 410 U.S. at 400, 93 S.Ct. 1007. In a legitimate strike situation, the union has a lawful platform on which to seek higher wages and better terms for its members. However, when a union pursues agreements with new employers through primary tactics of violence, threats, and intimidation, it does not have a lawful platform on which to claim the property of the employer. The use of such tactics is therefore "wrongful" under the Hobbs Act. See A. Terzi Productions, 2 F.Supp.2d at 507 ("[F]orcing a collective bargaining agreement upon unwilling employees and their employer is `wrongful' within the Hobbs Act's meaning; the union is an outside meddler with no lawful claim to the employer's property.").
In this case, much of the conduct alleged in the indictment is unrelated to a strike or other bona fide dispute with an employer. Rather, it sounds in harassment of employers, through violence and intimidation, aimed at coercing them into entering into agreements to hire Local 17 members for their projects. (See, e.g., Sup. Indict. at p. 37 (allegation that Defendant Caggiano stabbed the STS Construction president at a local restaurant); 42-43 (allegation that Defendant Larson and others surrounded Wadsworth Golf Construction employees and made threatening statements); 50 (allegation that Defendants Larson and Peterson pushed a gate over at a National Fuel cleanup site, causing injury to a guard).) The alleged conduct falls outside the narrow Enmons exception.
Defendants point out, as did the defendants in ALR, that under federal labor standards, unions representing construction workers are lawfully permitted to approach construction employers to enter into collective bargaining agreements without the majority support of the employees. See ALR, 2007 WL 925485, at *2.
In general, under federal labor standards, a union may not seek recognition from an employer without first obtaining majority support from the existing employees. Nat'l Labor Relations Bd. v. Local Union No. 103, Intern. Ass'n of Bridge, Structural and Ornamental Iron Workers, 434 U.S. 335, 344, 98 S.Ct. 651, 54 L.Ed.2d 586 (1978) ("Local 103"). This rule is meant to prevent coercive tactics by unsupported unions, such as "the continuous coercion of an organizational picket line." Id. at 347 n. 9, 98 S.Ct. 651 (quoting 105 Cong.Rec. 1731 (1959) (remarks of Sen. Dirksen)).
This does not mean, however, that a union may legitimately use an unlimited array of coercive tactics to secure such an agreement with an employer. As the Supreme Court explained in Local 103, in enacting the construction industry exception, Congress was concerned about "coerced designations of bargaining agents." 434 U.S. at 347-48, 98 S.Ct. 651. The Court stated:
434 U.S. at 348 n. 10, 98 S.Ct. 651 (emphasis added).
The allegations here do not state an attempt to secure a voluntary pre-hire or collective bargaining agreement between a willing construction employer and a union, as permitted by section 158(f). Instead, the indictment alleges that Defendants used a variety of coercive means to force collective bargaining agreements upon the employers at issue. At this stage of the proceedings, this Court will not dismiss the indictment on the ground that Defendants' objectives were "legitimate" because they did not require majority employee support to approach the employers for labor agreements.
Defendants also make the related contention that the indictment substantively fails to allege the attempted deprivation of "property" as required by the Hobbs Act. Under the Hobbs Act, an extortionist must obtain "property" from another. 18 U.S.C. § 1951. In the indictment, the government
(Sup. Indict. at 5.)
Defendants argue that these categories of "property" as a whole are not cognizable under the Hobbs Act, because the alleged "property" is nothing more than collective bargaining agreements with the employers, which are legitimate union goals.
Even assuming that the categories of "property" listed in the indictment are merely another way of saying "collective bargaining agreements," as discussed above, the indictment sufficiently alleges that Defendants' objective in seeking collective bargaining agreements through coercive measures was not a legitimate one. The relevant question is whether a collective bargaining agreement, with the attendant jobs and benefits flowing to union members, can be "property" under the Hobbs Act.
In general, if an employer is forced to hire union workers at higher wages than it had previously been paying to its non-union employees, the employer has suffered a deprivation in the form of added costs. Additionally, the union members hired for the jobs in question receive the wages and benefits associated with those jobs, and therefore gain valuable consideration. As such, the coerced acceptance of a collective bargaining or similar agreement constitutes a deprivation of "property" under the Hobbs Act. See United States v. Franks, 511 F.2d 25, 32 n. 8 (6th Cir.1975) ("By coercing a businessman into changing his establishments from non-union to union, or risk being bombed, one deprives the businessman of his `property' interest of an economic advantage, of using non-union labor, or of operating his business.").
Defendants contend, and Judge Scott concluded, that the indictment fails to allege the crime of extortion under New
Defendants maintain that an exception equivalent to that in Enmons exists with respect to New York's law of extortion, because the Hobbs Act was itself modeled on New York law, under which there was a recognized labor exception to liability. Additionally, New York case law still provides that one would not be guilty of extortion for attempting to achieve legitimate union goals. Because the indictment fails to allege conduct by Defendants in the pursuit of anything other than legitimate union goals, Defendants argue it fails to allege the crime of extortion under New York law.
The government counters that any labor exception under New York law is narrower than the federal-law exception crafted in Enmons. The government points out that the language of the extortion statute, while excepting from extortion liability threats of strikes and boycotts on behalf of unions, has no such exception for threats of physical violence and property damage on behalf of unions. Moreover, the New York cases delineating the labor exception do not address violent union conduct in pursuit of union objectives.
In relevant part, New York penal law provides:
New York Penal Law § 155.05(2)(e)(i), (ii), (iii) & (vi). By its terms, there is an exception to extortion liability for threats of strikes, boycotts, or other "collective labor group action" made by a union representative for the union's benefit. However, this exception is not applicable to threats of violence, property damage, or other types of harm.
New York state court decisions regarding extortion in the labor context primarily concern union representatives taking personal payoffs in return for ending or diverting adverse union action. In People v. Dioguardi, 8 N.Y.2d 260, 203 N.Y.S.2d 870, 168 N.E.2d 683 (N.Y.1960), the defendants were McNamara, an official of the local teamsters union, and Dioguardi, the owner of a "publishing house" that allegedly was a front for an extortion scheme. 8 N.Y.2d at 263, 203 N.Y.S.2d 870, 168 N.E.2d 683. A local stationery supply business was picketed and subjected to protesting by four different unions over a period of several months, and its ingoing and outgoing shipments were blocked. Id. at 263-64, 203 N.Y.S.2d 870, 168 N.E.2d 683. The business was approached by McNamara, who offered to assist in resolving the dispute through the use of Dioguardi's company's "services." Id. at 264-65, 203 N.Y.S.2d 870, 168 N.E.2d 683. Eventually, the business owner agreed to pay a $3,500 fee, along with a $200 monthly
The Court of Appeals of New York upheld McNamara and Dioguardi's extortion convictions. Id. at 268, 203 N.Y.S.2d 870, 168 N.E.2d 683. The court stated:
Id. at 271, 203 N.Y.S.2d 870, 168 N.E.2d 683. See also People v. Forde, 153 A.D.2d 466, 473, 552 N.Y.S.2d 113 (1st Dept.1990) (union representative demanded $2,000 from flooring company in exchange for refraining from invoking a collective bargaining provision that would have caused financial harm to the flooring company; indictment for extortion was upheld); People v. Adelstein, 9 A.D.2d 907, 908, 195 N.Y.S.2d 27 (2d Dept. 1959), aff'd sub nom. People v. Squillante, 8 N.Y.2d 998, 205 N.Y.S.2d 332, 169 N.E.2d 425 (N.Y.1960) (reversing extortion conviction of union agent allegedly involved in a scheme to require local businesses to use certain union "cartmen" to dispose of their garbage; proof failed to establish beyond a reasonable doubt that "(1) the appellant was actuated by the purpose of obtaining a financial benefit for himself or his codefendants and was not attempting in good faith to advance the cause of unionism; or (2) that there was any relationship among appellant and his codefendants which would sustain the inference that they aided each other in securing any personal benefit from the termination of the services of the nonunion cartmen[.]"); see also People v. Feldman, 7 Misc.3d 794, 811, 791 N.Y.S.2d 361 (N.Y.Sup.2005) (citing the above cases and Enmons for the proposition that otherwise legal actions, such as picketing or enforcing a collective bargaining agreement, can become extortionate where a personal payoff is sought or there is an illegitimate purpose for the payment).
In Enmons, the Supreme Court noted that the Hobbs Act "incorporate[d] New York's conventional definition of extortion—`the obtaining of property from another... with his consent, induced by a wrongful use of force or fear, or under color of right.'" 410 U.S. at 406 n. 16, 93 S.Ct. 1007 (quoting New York Penal Law and citing several remarks of Congressmen). The Court, interpreting New York law at the time, stated:
Id. (quoting People v. Cuddihy, 151 Misc. 318, 324, 271 N.Y.S. 450 (N.Y.Gen.Sess. 1934), aff'd, 243 A.D. 694, 277 N.Y.S. 960 (1st Dept.1935); and Adelstein, 9 A.D.2d at 908, 195 N.Y.S.2d 27). See also Andrea Doreen Ltd. v. Building Material Local Union 282, 299 F.Supp.2d 129, 150
The New York statutes and decisions, and the dicta in Enmons, establish that certain types of actions in pursuit of legitimate union objectives would not constitute extortion under New York law.
Applying these principles to the instant case, this Court finds the indictment sufficiently states conduct violating New York extortion law. As noted, the indictment alleges conduct by Defendants that was completely unrelated to a strike or other bona fide employer-union dispute. Rather, much of the alleged conduct consists of harassment of employers, using actual and threatened violence and property damage, aimed at coercing them into entering into agreements to hire Local 17 members. (See, e.g., Sup. Indict. at 11-12 (generally alleging that Defendant Larson "wrongfully" attempted to obtain the property of STS Construction, such property consisting of wages and benefits to be paid under labor contracts with Local 17, along with the STS employees' wages and benefits, "by compelling and inducing and attempting to compel and induce STS and its owner Timothy P. Such ... to deliver said property ... by means of instilling ... a fear that if the property was not so delivered, the defendant and others would cause physical injury to some person in the future and cause damage to the property[.]"); 37 (allegation that Defendant Larson told an STS Construction representative: "You should sign. Russo's
Judge Scott concluded that Defendant Bove's separate motion to dismiss the indictment should be granted. Judge Scott found that Defendant Bove's first argument—that the indictment was invalid because it did not make sufficient factual allegations against him—lacked merit. However, Judge Scott agreed that the indictment as to Defendant Bove criminalized protected speech. Judge Scott identified the relevant question as whether Defendant Bove's speech was "integral to criminal conduct." Because, in Judge Scott's view, the indictment failed to allege criminal conduct (i.e., Hobbs Act or state law extortion), he determined that the speech was not integral to any crime.
Given his recommendation that the indictment be dismissed on Enmons and First Amendment grounds, Judge Scott found it unnecessary to decide whether the Hobbs Act unconstitutionally failed to warn of the potential for criminal liability for the conduct at issue.
Defendant Bove does not argue that the indictment fails to recite the elements of the crimes charged. Rather, Defendant Bove contends that there are very few specific described acts that support his indictment, "beyond the mere membership in the union." (Mem. in Supp. of Def. Bove's Mot. Dismiss at 2.)
As noted, an indictment is constitutionally sufficient if it charges a crime with enough precision to inform the defendant of the charges against him and provides enough detail that the defendant might plead double jeopardy in a future prosecution based on the same conduct. United States v. Stavroulakis, 952 F.2d 686, 693 (2d Cir.1992). "An indictment need do little more than to track the language of the statute charged and state the time and place (in approximate terms) of the alleged crime.'" Id. (quoting United States v. Tramunti, 513 F.2d 1087, 1113 (2d Cir.1975), and citing cases).
This Court agrees with Judge Scott that the indictment is sufficient with respect to its allegations against Defendant Bove. Defendant Bove is named as a Local 17 member who "occupied positions of influence within the Local 17 Criminal Enterprise." (Sup. Indict. at 4.) He is part of the alleged "group" that was willing to engage in acts of violence and destruction of property against Western New York construction employers. (Id.) He is named in two of the alleged acts of racketeering constituting the charged pattern of racketeering. (Id. at 15-17 (Racketeering Act 3); and 24-25 (Racketeering Act 7).) The racketeering act allegations include the approximate dates; the names of the victim companies; the relevant places; and the specific property sought. Defendant Bove also is named in several of the "overt acts" that are described in support of the Hobbs Act conspiracy count. (See, e.g., id. at 34-35, 39-40, 41.) This is sufficient to satisfy the pleading requirements set forth above. See United States v. Cohen, 518 F.2d 727, 733 (2d Cir.1975) ("The Government need not, when charging conspiracy, set out
Defendant Bove next argues, and Judge Scott agreed, that the indictment must be dismissed because it seeks to prosecute him for exercising his rights to free speech and association under the First Amendment. In essence, Defendant Bove contends he is being prosecuted based only on his membership in Local 17 and on various protected statements he made in furtherance of the union's goals.
The crimes with which Defendant Bove is charged are (1) RICO conspiracy; (2) Hobbs Act conspiracy; and (3) one count of attempted Hobbs Act extortion. (Sup. Indict. at 4, 32, 56-57.) He also is alleged to have engaged in two predicate acts of attempted extortion that form the basis for the RICO count. (Id. at 15-17, 24-25.) Finally, he is alleged to have perpetrated several of the "overt acts" in furtherance of the Hobbs Act conspiracy. The "overt acts" consist of various statements made by Defendant Bove, along with one instance of picketing. (Id. at 34-35, 39-40, 41.)
It is indisputable that many activities by union members, including speeches, picketing, and boycotting, are forms of speech and conduct entitled to First Amendment protection. See, e.g., Smithfield Foods, Inc. v. United Food and Commercial Workers Int'l Union, et al., 585 F.Supp.2d 789, 803 (E.D.Va.2008). "The dissemination of information concerning the facts of a labor dispute must be regarded as within that area of free discussion that is guaranteed by the Constitution." Thornhill v. Alabama, 310 U.S. 88, 102, 60 S.Ct. 736, 84 L.Ed. 1093 (1940). "Free discussion concerning the conditions in industry and the causes of labor disputes appears to us indispensable to the effective and intelligent use of the processes of popular government to shape the destiny of modern industrial society." Id. at 103, 60 S.Ct. 736. This is true even though such information "may persuade some of those reached from entering into advantageous relations with the business establishment that is the scene of the dispute." Id. at 104, 60 S.Ct. 736.
But the protection afforded by the First Amendment is not absolute, even in the labor context. As an initial matter, the "First Amendment does not provide a defense to a criminal charge simply because the actor uses words to carry out his illegal purpose." United States v. Barnett, 667 F.2d 835, 842 (9th Cir.1982). "The Supreme Court repeatedly has recognized that it does not abridge the freedom of speech to make a course of conduct illegal, even though the conduct is in some respect carried out by means of expression." Smithfield Foods, 585 F.Supp.2d at 803 (citing Cox v. Louisiana, 379 U.S. 559, 563, 85 S.Ct. 476, 13 L.Ed.2d 487 (1965)); see also Giboney v. Empire Storage & Ice Co., 336 U.S. 490, 502, 69 S.Ct. 684, 93 L.Ed. 834 (1949) ("[I]t has never been deemed an abridgement of freedom of speech or press to make a course of conduct illegal merely because the conduct was in part initiated, evidenced, or carried out by means of language,
Moreover, it is settled that "true threats" of violence are not protected by the First Amendment. Virginia v. Black, 538 U.S. 343, 349, 123 S.Ct. 1536, 155 L.Ed.2d 535 (2003). As the Supreme Court explained in Black,
Id. at 359-50, 123 S.Ct. 1536 (citing R.A.V. v. City of St. Paul, 505 U.S. 377, 388, 112 S.Ct. 2538, 120 L.Ed.2d 305 (1992)). Additionally, it is clear that threats of extortion are not protected under the First Amendment "simply because they are verbalized or written." United States v. Bly, 510 F.3d 453, 456 (4th Cir.2007); see also United States v. Boyd, 231 Fed.Appx. 314, 316 (5th Cir.2007) ("The First Amendment does not protect extortion."); Planned Parenthood of Columbia/Willamette, Inc. v. Am. Coalition of Life, 244 F.3d 1007, 1015 n. 8 (9th Cir.), reh'g en banc granted, 268 F.3d 908 (2001), reh'g en banc, 290 F.3d 1058 (2002); Smithfield Foods, 585 F.Supp.2d at 806 ("[T]he law seems quite settled that the First Amendment provides no refuge for extortion.").
A conspiracy to commit a crime or crimes typically will include association and speech. However, even though RICO requires association with an "enterprise," the RICO conspiracy provision punishes conduct rather than mere association or speech—namely, the intentional conduct of agreeing to further the criminal enterprise by committing predicate crimes. United States v. Yarbrough, 852 F.2d 1522, 1540-41 (9th Cir.1988); United States v. Rubio, 727 F.2d 786, 792 (9th Cir.1983) (citing United States v. Martino, 648 F.2d 367, 380 (5th Cir.1981)); United States v. Elliott, 571 F.2d 880, 903 (5th Cir.1978) ("To be convicted as a member of an enterprise conspiracy, an individual, by his words or actions, must have objectively manifested an agreement to participate, directly or indirectly, in the affairs of an enterprise through the commission of two or more predicate crimes.").
In light of this background, it is premature at this time to dismiss the indictment against Defendant Bove (or any other Defendant) on First Amendment grounds, because there has been no evidence introduced to establish precisely what conduct—protected or unprotected— is at issue here. The mere inclusion of speech-related allegations in the indictment is not enough to deem the entire basis for Defendant Bove's prosecution for extortion and conspiracy facially impermissible under the First Amendment. Compare Watts v. United States, 394 U.S. 705, 706-08, 89 S.Ct. 1399, 22 L.Ed.2d 664 (1969) (trial judge erred in denying defendant's motion for a judgment of acquittal, after the government's evidence showed that the defendant's statement allegedly threatening the President of the United States was merely "political hyperbole" and not a true threat).
Of course, the evidence produced to prove the allegations against Defendant Bove may show that he engaged solely in protected speech and conduct and never crossed the line into attempted extortion and conspiracy. But this is a matter of proof that cannot be resolved at this
As the Second Circuit has explained,
United States v. Rahman, 189 F.3d 88, 117 (2d Cir.1999) (citing United States v. Spock, 416 F.2d 165, 169-71 (1st Cir.1969)). Defendant Bove's motion to dismiss the indictment on First Amendment grounds is denied.
Defendant Bove alternatively seeks a pre-trial evidentiary hearing on the First Amendment issues, citing Dombrowski v. Pfister, 380 U.S. 479, 85 S.Ct. 1116, 14 L.Ed.2d 22 (1965). In Dombrowski, state officials raided the offices of, seized files from, and prosecuted the appellants, the leaders of a civil rights organization, under anti-Communist laws. Id. at 487-88, 85 S.Ct. 1116. The appellants filed an action in federal court seeking an injunction against the state on First Amendment grounds. Id. at 482, 85 S.Ct. 1116. The appellants alleged that the state's actions were part of a larger plan to use "arrests, seizures, and threats of prosecution under color of the statutes to harass appellants" and discourage them from pursuing civil rights causes in the state. Id.
A three-judge panel of the district court dismissed the appellants' complaint on the ground that the allegations, although "conceded to raise serious constitutional issues, did not present a case of threatened irreparable injury to federal rights which warranted cutting short the normal adjudication of constitutional defenses in the course of state criminal prosecutions[.]" Id. at 483, 85 S.Ct. 1116.
Dombrowski is inapposite here. Even assuming that case could be read to permit this Court to hold a pre-trial evidentiary hearing on First Amendment issues in a federal criminal prosecution, the indictment here sounds in extortion and conspiracy, not political activism. As discussed, extortion and conspiracy, even if committed through speech, are not protected under the First Amendment. Thus, the "serious constitutional issues" warranting immediate federal review in Dombrowski are not present in this case. Defendant Bove's request for a pre-trial hearing is denied.
Finally, Defendant Bove claims the Hobbs Act is unconstitutional as applied in this case, because it did not fairly apprise him that the conduct alleged in the indictment could be subject to criminal prosecution. In other words, Defendant Bove claims to have been deprived of the due process requirement of "fair warning" of the criminality of his conduct. See United States v. Lanier, 520 U.S. 259, 266-67, 117 S.Ct. 1219, 137 L.Ed.2d 432 (1997) (due process requires "fair warning" of the potential criminality of conduct; "[T]he touchstone is whether the statute, either standing alone or as construed, made it reasonably clear at the relevant time that the defendant's conduct was criminal.").
This Court finds no merit to Defendant Bove's argument. The Hobbs Act proscribes impeding or affecting interstate commerce "by robbery or extortion." 18 U.S.C. § 1951. "Extortion" is defined clearly as the "obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear[.]" Id. These are plain terms the average individual would understand, and they are the plain terms set forth in the indictment. See Lanier, 520 U.S. at 266-67, 117 S.Ct. 1219. Further, the Enmons Court clarified the term "wrongful" in the Hobbs Act by defining the term to describe coercion where the alleged extortionist has no lawful claim to the property demanded. 410 U.S. at 400, 93 S.Ct. 1007; see Lanier, 520 U.S. at 266, 117 S.Ct. 1219 (noting that statutory ambiguity may be resolved "by judicial gloss on an otherwise uncertain statute").
For the foregoing reasons, this Court finds that the Magistrate Judge's Report and Recommendation must be set aside. Additionally, this Court finds that Defendants' Joint Motion to Dismiss and Defendant Bove's Motion to Dismiss must be denied.
IT HEREBY IS ORDERED, that the Report and Recommendation of the Honorable Hugh B. Scott (Docket No. 184) is SET ASIDE.
FURTHER, that the Defendants' Joint Motion to Dismiss (Docket No. 153) is DENIED.
FURTHER, that Defendant Bove's Motion to Dismiss (Docket No. 155) is DENIED.
FURTHER, that this case will be returned to Judge Scott for further pre-trial proceedings.
SO ORDERED.
Because the indictment otherwise has sufficiently alleged the attempted deprivation of "property" under the Hobbs Act—i.e., collective bargaining agreements with the employers—it is unnecessary at this juncture to determine whether these distinct categories of "property" are cognizable as well.
The strictissimi juris standard is, by its terms, relevant when a court is evaluating the sufficiency of the evidence supporting a conviction. Id. It does not apply to review of the validity of the indictment itself, and therefore is not applicable to determination of this motion to dismiss.
