Petition — Phillips v. United States

Court,

| FILED

} JUN t978

IN THE {

SUPREME COURT OF THE en IR., CLERK

October T 1977

No. v 1740

MORRIS E. PHILLIPS, JR.,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

KIRSCHNER & GREENBERG

RICHARD H. KIRSCHNER

LEWIS S. FELDMAN

10850 Wilshire Boulevard

Fourth Floor

Los Angeles, CA 90024

(213) 474-6555 879-5800

Attorneys for Petitioner

Morris E. Phillips, Jr.

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1977

No.

MORRIS E. PHILLIPS, JR.,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

KIRSCHNER & GREENBERG

RICHARD H. KIRSCHNER

LEWIS S. FELDMAN

10850 Wilshire Boulevard

Fourth Floor

Los Angeles, CA 90024

(213) 474-6555 879-5800

Attorneys for Petitioner

Morris E. Phillips, Jr.

TOPICAL INDEX Page

Table of Authorities ii

OPINION BELOW 1

JURISDICTION 2

QUESTIONS PRESENTED 2

STATUTE INVOLVED 3

STATEMENT 3

REASONS FOR GRANTING THE WRIT 8

CONCLUSION 14

APPENDIX A - OPINION COURT OF APPEALS

NINTH CIRCUIT

Filed May ll, 1973

TABLE OF AUTHORITIES

Page

Stirone v. United States

361 U.S. 212 (1960) 14

United States v. Littwin

338 F.2d 141 (6th Cir. 1964)

cert. den. 380 U.S. 911 (1964) 9, 10

United States v. Shackelford

494 F.2d 67 (9th Cir. 1974)

cert. den. 417 U.S. 934 (1974) 7, ll

United States v. Staszcuk

517 F.2d 53 (7th Cir. 1975)

(en banc) cert. den. 423 U.S.

837 (1974) te Be La

Statutes

Hobbs Act

18 U.S.C. § 1951) 2. Bs Oe Ge af

18 8.8.6. 8 2 4

28 U.S.C. § 1254(1) 2

Rules

Federal Rules of Evidence

Rule 106 2, 6, 8, 9, Ll

ii.

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1977

No.

MORRIS E. PHILLIPS, JR.,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

: FOR THE NINTH CIRCUIT

KIRSCHNER & GREENBERG, on behalf of

MORRIS PHILLIPS, petitions for a Writ of

Certiorari to review the judgment of the

United States Court of Appeals for the

Ninth Circuit in this case.

OPINION BELOW

: The opinion of the Court of Appeals

is reported at F.2d i i(9th Cir.Nos.

77-1243/77-1428, May 11, 1978).

JURISDICTION

The judgment of the District Court

(CT 389) 1/was entered on January 19, 1977.

A timely petition for judgment of acquit-

tal and/or a new trial was denied on De-

cember 9, 1976 (CT B-2). The jurisdiction

of this Court is invoked under 28 U.S.C.

§ 1254(1).

QUESTIONS PRESENTED

1. Whether a Court may rule that por-

tions of a taped conversation cannot be

admitted under Rule 106, F.R.Ev. (requir-

ing the introduction of “complete” state-

ments) without in fact listening to the

evidence, and whether such a ruling denies

a defendant due process?

2. Whether the requisite effect on in-

terstate commerce is satisfied under the

Hobbs Act (18 U.S.C. § 1951) where the

specific effect in question already ex-

ists independent of defendant's activities?

3. Whether the failure of the proof at

trial to conform to the charge of the in-

dictment in this case led to a fatal vari-

ance?

17 All references to the Clerk's Transcript

will hereafter be referred to as CT.

Re

STATUTE INVOLVED

vides in pertinent part:

(a) Whoever in any way or degree

obstructs, delays, or affects com-

merce or the movement of any article

or commodity in commerce, by robbery

or extortion or attempts or conspires

so to do, or commits or threatens

physical violence to any person or

property in furtherance of a plan or

purpose to do anything in violation

of this section shall be fined not

more than $10,000 or imprisoned not

more than twenty years, or both.

(b) As used in this section --

(2) The term “extortion” means

the obtaining of property from

another, with his consent, induced

by wrongful use of actual or

threatened force, violence, or fear,

or under color of official right.

STATEMENT

Following a jury trial in the United

States District Court for the Northern

District of California, Phillips was con-

victed under an indictment (CT 1 through

5) charging him in Count 1 with conspiring

to interfere with commerce by extortion

in violation of 18 U.S.C. § 1951, and in

Count 2 with principal to a crime [sic],

and aiding and abetting in violation of

3.

18 U.S.C. § 1951 and 18 U.S.C. § 2. Phil- expedite Smith's claim. In March of 1976,

lips was sentenced to serve concurrent : James Beasley, Chairman of the Citizen's

sentences of three years on each of two Committee of the Model Cities Program,

counts, and to pay a fine of $10,000 with and an influential member of the Hunter's

respect to Count 2. The Court of Appeals Point community, approached Smith and pro-

affirmed (Appendix A, infra). posed to get Smith's clair settled for an

illicit $67,000 kickback (RT 8l). Beasley

stated to Smith that he represented vari-

ous RDA board members and Phillips, and

that Phillips would "guarantee transaction”.

1. The evidence at trial showed that

in 1970 Chester Smith subcontracted with

a private contractor, C.E.M.E. Development

Co ration (CEME), to rform earth mov-

— ; : “= Beasley met Smith several times in 1976,

ing services in the San Francisco Hunter's ;

attempting to negotiate the kickback

scheme (RT 116, 117, 198, 201-202, 21l-

212). On June 21, 1976, Smith taped a

telephone conversation with Phillips on a

Point area. CEME was the principal con-

tractor for the San Francisco Redevelop-

ment Agency (RDA), the Governmental agency

responsible for the development in the :

miniature recorder provided to him by the

FBI, wherein Phillips told him that his

claim would be settled in the near future

City and County of San Francisco. A dis-

pute arose which resulted from Smith be-

ing unable to obtain payment in full from

CEME (RT 27-28). Although Smith was a sub-

contractor to CEME, he nevertheless sought

since some of the RDA board members would

be meeting soon (RT 216). On June 29,

1976, Smith called Phillips and explained

to settle his claim independently in early that he did not want to give any money to

1973 (RT 29). Smith may have filed a suit

; Beasley because he did not trust him. On

against the RDA and CEME (RT 30).

July 7, 1976, Beasley again visited Smith,

Smith had several conversations with demanding money. Smith called Phillips

Phillips, who was Area Director of the RDA and arranged to meet him for lunch the

for Hunter's Point late in 1975, wherein next day (RT 242). On July 8, 1976,

Phiilips promised to see if he could

4.

5.

Smith received a phone call from Beasley

advising that Phillips would meet Smith

for lunch (RT 301). Upon his arrival

Smith was met by Beasley who advised that

Phiilips would arrive soon. Phillips ar-

rived and Smith testified that he then

offered $5,000 directly to Phillips, that

Phillips insisted he should give it to

Beasley (RT 305). Beasley later met Smith

at a Safeway market, gave him the $5,000

and was immediately arrested. Phillips

was subsequently arrested.

2. On appeal, Phillips raised, among

others, the following arguments of error:

(a) That the District Court erred

in refusing to allow the tapes of con-

versations between Smith and appellant

to be played in full, pursuant to Rule

106, F.R.Ev.

(b) That the Government failed to

prove that Phillips’ actions had the

requisite effect on interstate commerce

required under the Hobbs Act, as in

fact the "probable effect” on interstate

commerce -- i.e., the denial of Smith's

Claim -- had already occurred through

the RDA's decision to litigate Smith's

claim. 6.

(c) That the conviction of Phillips

was based upon facts not alleged in the

indictment. The indictment charged

that Phillips would use his power and

influence to “impede and obstruct pay-

ment of Smith's claim". However, the

testimony regarding the alleged Beasley

Phillips extortion attempt contemplated

only the early settlement of Smith's

claim and in no way implied a threat

to impede or obstruct a settlement.

The Court of Appeals nevertheless af-

firmed the judgment, holding that (a) The

ruling by the District Court to exclude

the remaining portions of the tapes, with-

out listening to them, was within its dis-

cretion since "Phillips argued the general

relevance of the tape without specifying

portions or passages." (b) The requisite

effect on interstate commerce under the

Hobbs Act was satisfied since only a de

minimus effect is necessary (United States

v. Shackelford, 494 F.2d 67, 75 (9th Cir.

1974), cert. den. 417 U.S. 934 [1974]),

and the effect need only be probable or

potential, United States v. Staszcuk, 517

F.2d 53 (7th Cir. 1975) (en banc), cert.

7.

den. 423 U.S. 837 (1974). (c) Phillips'

failure to support Smith's claim in ef-

fect “impeded” that claim, or in any

case that Phillips’ actions "affected"

interstate commerce and thus, even assum-

ing there to be a variance in the indict-

ment, Phillips, rights were not substan-

tially prejudiced.

REASONS FOR GRANTING THE WRIT

First, the Court of Appeals holding in

this case, allowing the judge to exclude

the remaining portions of statements un-

der Rule 106, F.R.Ev., without listening

to them, sanctions potentially serious

constitutional violations to the exercise

of “discretion” under Rule 106, and can-

not be allowed to stand.

Secondly, the Court of Appeals holding

drastically expands the requirement under

the Hobbs Act (18 U.S.C. § 1951) -= that

required actions "affect intexstate com-

merce" -- to include situations where ac-

tions independent of those of the defen-

dant have already resulted in the requi-

site affect on interstate commerce, and

thus the defendant's actions are

8.

superfluous.

Finally, the testimony at trial indi-

cated that Phillips never threatened or

attempted to "impede or obstruct" payment

of Smith's claim as alleged in the indict-

ment. Inasmuch as the evidence indicated

Phillips’ actions could not have affected

Smith's claim, the Court of Appeals hold-

ing that the variance in the indictment

was harmless to Phillips case cannot stand.

1. Rule 106, F.R.Ev. provides:

"When a writing or a recorded state-

ment or a part thereof is intro-

duced by a party, an adverse party

may require him at that time to

introduce any other part or any

other writing or recorded statement

7

Be OE 7 ith it

(Emphasis added)

The “rule of completeness" is subject

to the qualification that the remaining

portions of the proffered evidence be

"relevant" (United States v. Littwin, 338

F.2d 141, 145-146 [6th Cir. 1964], cert.

den. 380 U.S. 911 [1964]). Defense coun-

sel in this case submitted numerous re-

quests that the tapes offered in evidence

9.

by the Government be played in their entire-

ty (CT 270, RT 418-24, 476, 482, 488, 958-

959, 968, 981, 988, 1033). The defense ar-

gued that the remaining portions of the

tapes were relevant to (1) Smith's state of

mind, (2) Smith's credibility, (3) Phillips'

state of mind with regard to his intent,

and (4) to remove undue emphasis from the

previously played portions created by the

"out of context" segments selected by the

Government (RT 418, 475, 477-78, 958-959,

1033). The relevance of these remaining

portions were thus squarely argued before

the Court, yet the trial court ruled them

irrelevant and refused to admit them without

listening to the remaining portions of the

tapes.

In affirming the trial court's holding,

the Court of Appeals stated, "The record

shows Phillips argued the general relevance

of the tapes without specifying portions or

passages. Given this failure, the District

Court's ruling was within its discretion."

While Phillips acknowledges that Rule 106

rulings involve the exercise of judicial

discretion (United States v. Littwin, supra,

at 146), it is nevertheless submitted that

10.

a ruling under Rule 106 that remaining

portions of a conversation are irrelevant,

in the face of contrary argument, without

listening to these remaining portions,

constitutes a blatant denial of due pro-

cess under the Fifth Amendment; Phillips

was, at the very least, entitled to the

benefit of an enlightened ruling upon

the admissibility of this evidence. The

Court of Appeals opinion fails to con-

front this issue, and thus must be con-

sidered to sanction "blind" decisions

as to the relevance of remaining or re-

lated statements under Rule 106. It is

submitted that such a ruling cloaks a

judge with constitutionally impermissible

discretion under this important federal

statute.

2. In order to satisfy the jurisdic-

tional requirement necessary to sustain

a conviction under the Hobbs Act, the

Government must prove that the alleged

activity had at least a probable impact

on interstate commerce (United States v.

Shackelford, 494 F.2d 67, 75 [9th Cir.],

cert. den. 417 U.S. 734 [1974]). As the

Court of Appeals noted, only a de minimus

ll.

effect is necessary (id), and the effect

need only be potential, not actual

(United States v. Staszcuk, 517 F.2d 53,

[7th Cir. 1975] [en banc], cert. den. 423

U.S. 837 [1974]).

With respect to appellant Phillips,

the Government had to prove that his ac-

tivities, i.e. the alleged obstruction of

Smith's claim -- had at least a probable

effect on interstate commerce. However,

the delay of the awarding of Smith's claim

was caused by the RDA board's legitimate

actions, independent of the acts of Phil-

lips (RT 745, 758, 765-767). Thus, the

alleged probar’e effect on interstate com-

merce existed independently of Phillips’

alleged activities. Since the specific

effect on interstate commerce in question

already existed, and Phillips actions

were merely superfluous, his actions must

be considered to be outside the scope of

the Hobbs Act. The Court of Appeals

opinion, which holds otherwise, stands

for the proposition that an accused's

actions are within the jurisdiction of

the Hobbs Act, even if his actions add

absolutely nothing to a preexisting

12.

transactions effect on interstate com-

merce. Such a holding unjustifiably ex-

pands the potential class of defendants

under the Hobbs Act drastically and can-

not be allowed to stand.

3. The indictment charged Phillips

with threatening to "impede and obstruct

payment of Smith's claim." These allega-

tions were not proved at trial. As the

Court of Appeals noted in its opinion,

Phillips never "threatened nor apparently

intended to actively obstruct the claim."

The court went on, however, to state that

it was unnecessary since Phillips’ "“fail-

ure to support the claim amounted to an

effective killing of it." The evidence,

however, simply does not support this

conclusion of the Court of Appeals.

The decision to litigate, rather than

to settle Smith's claim was chosen by the

RDA board for reasons thought to be in its

own best interests (RT 736, 745, 754, 763-

64, 772). Phillips, in fact, had no power

to influence the board one way or the

other (RT 663). Thus the proof at trial

failed to correspond to the material

13.

allegations of the indictment -- that

Phillips obstructed Smith's claim. It is

submitted that this constituted a variance

fatal to the Government's case under

Stirone v. United States, 361 U.S. 212,

216-217 (1960). The Court of Appeals,

however, alternatively stated in its opin-

ion that even assuming a variance in the

indictment, there is no prejudice since

Phillips could have been indicted for

"affecting" interstate commerce by his

threats. As already noted above, however,

it was the RDA board, not Phillips, which

had the power, if any, to impede Smith's

claim, and thus "affect" interstate com-

merce. Phillips could not have been con-

victed under this alternative language and

the variance was prejudicial, mandating an

acquittal.

CONCLUSION

The petition for writ of certiorari

should be granted.

Respectfully submitted,

KIRSCHNER & GREENBERG

RICHARD H. KIRSCHNER

LEWIS S. FELDMAN

Attorneys for Petitioner

14.

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

FILED

MAY 11 1973

EMIL E. MELFI, JR.

CLERK, U.S.COURT

OF APPEALS

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

Vv.

MORRIS PHILLIPS and

JAMES BEASLEY,

Defendants-Appellants.

eee ee

OPINION

No. 77-1283

No. 77-1428

Appeal from the

United States District Court

Northern District of California

Before: CARTER and TRASK, Circuit Judges,

and BURNS,* District Judge.

CARTER, Circuit Judge:

This is a joint appeal by Morris Phil-

lips and James Beasley, who were con-

victed of conspiracy to commit extortion,

* Honorable James M. Burns, United States

District Judge, District of Oregon,

sitting by designation.

l.

in violation of the Hobbs Act (18 U.S.C.

§ 1951) (Count I), and of attempting to

commit extortion, also in violation of

the Hobbs Act (Count II). Phillips was

sentenced to concurrent three-year terms

and fined $10,000.00. Beasley was sen-

tenced to concurrent five-year terms.

ISSUES

Appellants raise on appeal the follow-

ing issues:

(1) Both appellants question whether

their conduct falls within the ambit of

the Hobbs Act;

Phillips contends:

(2) That the indictment improperly

alleged the same offense in each count;

(3) That the district court abused

its discretion in not requiring the tapes

to be played in full;

(4) That the transcripts of the tapes

were inaccurate and were not admissible;

(5) That the district court erred in

permitting the introduction of a co-con-

spirator's statements before proof of

Phillips' participation in the conspiracy;

2.

(6) That there was a fatal variance

between his indictment and the proof ad-

duced at trial;

Beasley contends:

(7) That the district court erred in

failing to order production under the

Jencks Act of certain tax returns;

(8) Both appellants contend that the

jury instructions were improper.

FACTS

In 1970, Chester Smith, owner of Chet

Smith Trucking, subcontracted with a pri-

vate contractor, CEME Development Corpo-

ration, to perform various earth moving

services in the San Francisco Hunter's

Point area. CEME was principal contractor

for the San Francisco Redevlopment Agency

("RDA"), a governmental body responsible

for urban redevelopment in the City and

County of San Francisco. Smith completed

his work in 1972 but could not obtain pay-

ment in full from CEME. Attempts to ob-

tain payment were unsuccessful and in

February 1973, Smith filed a claim with

the RDA for $434,000.00, the amount owed

3.

to him. The claim stagnated and in Octo-

ber 1973, Smith filed suit against the

RDA and CEME for $1.1 million in damages.

The events which followed unfold the

extortion conspiracy. |1! smith had several

meetings with Beasley, who served as

Chairman of the Citizens Committee of the

Model Cities Program and was known as an

influential member of the Hunter's Point

community. Smith also met with Phillips,

who, as Area Director of the RDA for Hun-

ter's Point, was responsible for the oper-

ation of the project. Phillips had di-

rect access to and influence with the

five-person RDA Board, the approval of

which was required for payment of Smith's

claim. These meetings and communications

will be summarized in chronological order

for clarity.

August 5, 1975

Smith met with Phillips at a San Fran-

cisco restaurant. Smith sought to

[1] The government's chief witness was

Smith, who traced his meetings and

conversations with appellants. Most of

his conversations were taped and intro-

duced as evidence.

4.

influence Phillips to urge a quick settle-

ment of his claim. Phillips told Smith

he thought it was “criminal” that the RDA

nad refused to settle the claim. Smith

informed Phillips that an RDA Board mem-

ber, Joe Mosley, had attempted to solicit

a $30,000.00 kickback from Smith in return

for settlement of his claim. Phillips

said that was a matter between Mosley and

Smith.

October 1975

Another meeting took place between

Smith and Phillips in which Phillips de-

scribed a meeting he had with another RDA

Board member, Jim Silva. Phillips assured

Smith “he could handle it” and promised to

talk to Silva again.

January 1976

Smith met with Phillips for lunch at a

San Francisco restaurant. This meeting

(and most subsequent meetings) was taped

by Smith with a miniature body recorder

furnished to him by the FBI. These tapes

were admitted into evidence. During the

meeting, Phillips told Smith that his

claim would probably be settled soon and

Ss.

again showed his disinterest in the al-

leged kickback attempt of Mosley.

January 26, 1976

Beasley came unannounced to Smith's

place of business in San Francisco.

Beasley said he had been sent by others

to see how much it would be worth to

Smith to have his claim settled. Smith

said it would be worth a great deal, and

Beasley said he would be in touch.

March 17, 1976

Beasley again came to Smith's offices.

In a taped conversation, Beasley told

Smith he was acting on behalf of Mosley,

Silva, and Phillips as go-between explain-

ing that because of his criminal record

he could not be embarrassed by disclosure.

He said settlement would cost $67,000.00,

but encouraged a counter-offer from Smith.

April 19, 1976

During a taped conversation at Smith's

office, Beasley told Smith he was going to

meet Phillips to discuss the deal. Smith

offered $5,000.00 down and $30,000.00 up-

on payment of his claim, and Beasley said

6.

he would check with Phillips about wheth-

er this offer was acceptable.

April 26, 1976

Beasley met Smith at his office and

for some still unexplained reason, offered

to put up the initial $5,000.00 expected

from Smith as a downpayment. Smith agreed.

April-June 1976

Smith met with Beasley several times.

Beasley suggested asking CEME to pay the

kickback, but Smith rejected the idea as

unrealistic. Beasley instructed Smith to

pay $395.00 to a third party. This amount

was to be deducted from the ultimate pay-

off.

June 21, 1976

Smith taped a telephone conversation

with Phillips. Phillips stated that

Smith's claim would be settled in the near

future because three of the five RDA Board

members were leaving office soon and "they

don't have nothing to concern themselves

about." .Phillips alluded to the fact that

Smith should just follow directions. He

told Smith he preferred not to talk to him

over the telephone but within a week he

Fe

could give Smith "an omen" or "a message."

June 29, 1976

Beasley called Smith and demanded on

behalf of Phillips and Commissioners Mos-

‘ley, Silva and Jensen $5,000.00 in addi-

tion to that which Beasley allegedly al-

ready had paid on Smith's behalf. Later

that day Phillips called Smith (indicat-

ing he wished he were calling from a pay

telephone when talking to Smith) and said

he understood Smith's "dilemma" and that

"you're getting valid information; just

do what you can about [it] and at least

know where its coming from. . .." Phil-

lips further explained that "We got to

use whatever conduit we can, irrespective

of what you might think about the quality

Om "OM. «© « «*

July 2, 1976

°

Beasley called Smith and again demanded

the $5,000.00. He said he was serving as

bagman because he had no direct connection

the the RDA. He told Smith that it was

worth paying the money in lieu of longer

delay or possibly never receiving payment

on his claim.

8.

July 7, 1976

Beasley visited Smith and repeated his

demand for the money. Beasley called

Phillips' office while with Smith and

asked Phillips’ secretary to ask Phillips

to "reassure Mr. Smith for me please."

Later Smith called Phillips, who told him:

(a) "The thing you're dealing with

on the 13th or the 20th looks like

the magic day... .-

(b) “Well, I'm pretty much aware

of everything that's being said to

you on this. . . . I understand ex-

actly how that's going. It doesn't

present me with any problem. . Ss

(c) "I just said nobody will leave

you hanging out.”

Phillips agreed to meet Smith for lunch

the following day.

July 8, 1976

Beasley called Smith in the morning

and told him to tell Phillips at lunch

where the payoff was to take place. Smith

did not tell Beasley where he was meeting

Phillips for lunch. Despite this fact,

Beasley was at the restaurant when Smith

9.

arrived and said "the man" would arrive

shortly. Beasley left Smith and took a

seat at the bar.

Phillips arrived and assured Smith that

he was "guaranteeing the whole thing.”

Beasley, Phillips said, was acting only

as a "messenger and a conduit." Smith

offered the $5,000.00 directly to Phillips,

but Phillips insisted it be given to Beas-

ley for safety's sake. After that, Phil-

lips said, he was going to “spend a couple

of bucks for the conduit and pass it on."

Smith then suggested a location for the

payoff and Phillips agreed.

Smith met Beasley at the appointed time

and place that afternoon. (Smith had not

told Beasley about the meeting.) Smith

gave the $5,000.00 to Beasley, who was

immediately arrested. Phillips was ar-

rested shortly thereafter.

Appellants were indicted by a special

federal grand jury on two counts of vio-

lating the Hobbs Act, 18 U.S.C. § 1951.

The indictment charged the two with par-

ticipation in a scheme to extort $40,000.00

from Smith "by fear of economic loss and

10.

under color of official right." Appel-

lants were tried separately and found

guilty on both counts.

(1) THE HOBBS ACT

The appellants' contention that their

conduct is not within the scope of the

Hobbs Act is without merit.

These cases were argued on August 8,

1977. At that time United States v. Cul-

bert, 548 F.2d 1355 (9 Cir. 1977) had re-

cently been decided, holding that ""al-

though an activity may be within the lit-

eral language of the Hobbs Act, it must

constitute "racketerring" to be within

the perimeters of the Act,'" p. 1357,

quoting United States v. Hokley, 542 F.2d

300, 304 (6 Cir. 1976). Following argu-

ment the present cases were submitted for

decision. In October 1977 the Supreme

Court granted certiorari in Culbert and

on November 2, 1977, the panel vacated

the submission of the present cases until

the Supreme Court decided Culbert, at

which time the cases would be automati-

cally resubmitted.

ll.

On March 28, 1978, the Supreme Court

reversed in United States v. Culbert,

U.S. __—s-« (1978), 46 U.S.L.W. 4259, con-

cluding that ". . . Congress intended to

make criminal all conduct within the reach

of the statutory language." The Court

declined "to limit the statute's scope by

reference to an undefined category of con-

duct termed ‘racketeering.'" p. 4261.

The indictment charged that Phillips

and Beasley conspired "to commit extortion

as .. . defined in Section 1951, Title 18,

United States Code, which extortion would

obstruct, delay and affect commerce...

in that . . . defendants . .. did con-

spire to obtain the sum of Forty Thousand

Dollars ($40,000) from Chester C. Smith

with his consent, said consent to be in-

duced by fear of economic loss and under

color of official right, towit....

(Emphasis added). The pertinent parts of

(2)

Section 1951 are set forth in the margin.

[2] 18 U.S.C., § 1951.

Interference with commerce by threats

or violence

(a) Whoever in any way or degree ob-

structs, delays, or affects commerce or

the movement of any article or commodity

12. (continued)

Thus the indictment, by charging con-

spiracy to commit extortion, under fear

of

economic loss and/or color of official

[2]

(continued) in commerce, by robbery

or extortion or attempts or con-

spires so to do, or commits or

threatens physical violence to any

person or property in furtherance

of a plan or purpose to do anything

in violation of this section shall

be fined not more than $10,000 or

imprisoned not more than twenty

years, or both.

(b) As used in this section --

(1) The term "robbery" means....

(2) The term "extortion" means

the obtaining of property from

another, with his consent, in-

duced by wrongful use of actual

or threatened force, violence,

or fear, or under color of offi-

cial right.

(3) The term "commerce" means

commerce within the District of

Columbia, or any Territory or Pos-

session of the United States; all

commerce between any point in a

State, Territory, Possession, or

the District of Columbia and any

point outside thereof; all com-

merce between points within the

same State through any place out-

side such State; and all other

commerce over which the United

States has jurisdiction.

) Pe

Bde

right, sets forth a classic case of vio-

lation of the Hobbs Act (18 U.S.C. § 1951)

as shown by the adjudicated cases. United

States v. Mazzei, 521 F.2d 639 (3 Cir.

1975), cert. denied, 423 U.S. 1014 (1975)

(kickbacks to state senator from rental

to state agencies); United States v. Irali,

503 F.2d 1295 (7 Cir. 1974), cert. denied,

420 U.S. 990 (1975) ($150 payoff to secure

tavern license); United States v. DeMet,

486 F.2d 816 (7 Cir. 1973), cert. denied,

416 U.S. 969 (1974) (payoffs to police

for not enforcing parking ordinances by

owner of nightclub); United States v. Hyde,

448 F.2d 815 (5 Cir. 1971) (state attorney

general and aides extorting moneys from

insurance companies); United States v.

Pranno, 385 F.2d 387 (7 Cir. 1967), cert.

denied, 390 U.S. 944 (1968) (city offici-

als extracting kickbacks for building per-

mits); United States v. Furmento, 405 F.

Supp. 23 (E.D. Pa. 1975) (payment to state

official by cigarette dealer for not col-

lecting state tax); and United States v.

Addonizio, 313 F.Supp. 486 (D. N.J. 1970),

aff'd, 451 F.2d 49 (2 Cir. 1971), cert.

denied, 405 U.S. 1048 (1972) (kickbacks

from contractors for city building project).

14.

All of these cases are similar to the

instant cases in that in each one a pub-

lic official is engaged in extracting

money from another person through the use

of fear of economic loss and/or color of

official right.

The requisite effect on interstate com-

merce is satisfied. Only a de minimis

effect is necessary, United States v.

Shackelford, 494 F.2d 67, 75 (9 Cir. 1974),

cert. denied, 417 U.S. 934 (1974), and

the effect need be only probable or poten-

tial, not actual, United States v. Stasz-

cuk, 517 F.2d 53 (7 Cir. 1975) (en banc),

cert. denied, 423 U.S. 837 (1974). Here

appellants threatened the depletion of

resources from a business engaged in inter-

state commerce. This has been consistently

found an adequate jurisdictional basis.

See, e.g., United States v. Merolla, 523

F.2d 51, 54 (2 Cir. 1975); United States

v. DeMet, supra, 486 F.2d at 821.

(2) MULTIPLICITY OF INDICTMENT

Phillips argues that both counts of

the indictment were based on the same

acts. Count 1 alleged conspiracy; Count

15.

2 charged attempted extortion. The law

is settled that a violation of the Hobbs

Act is a substantive offense, separable

from a Hobbs Act conspiracy. United

States v. Jacobs, 451 F.2d 530, 534-35,

nn. 2 & 5 (5 Cir. 1971), cert. denied,

405 U.S. 955 (1972); Carbo v. United

States, 214 F.2d 718, 733 n. 17 (9 Cir.

1963), cert. denied, 377 U.S. 953 (1964).

The indictment was proper.

(3) PLAYING OF TAPES

Phillips contends that the district

court erred in refusing to require the

tapes of conversations between Smith and

appellants to be played in full. Phillips

recognizes that invocation of this so-

called rule of completeness is subject to

the requirement that the proffered evi-

dence be relevant. See United States v.

McCorkle, 5l1l F.2d 482, 487 (7 Cir. 1975).

The record shows Phillips argued the gen-

eral relevance of the tapes without speci-

fying portions or passages. Given this

failure, the district court's ruling was

within its discretion.

16.

(4) USE OF TRANSCRIPTS

Thirteen tapes of conversations were

introduced during trial. Transcripts

were submitted to the jury during the

playing of four of these 13 tapes. Phil-

lips now complains that these transcripts

were inaccurate and hence not admissible.

Phillips does not cite a single example

of this purported inaccuracy, and the dis-

trict court repeatedly reviewed the tran-

scripts and found them to be accurate.

Moreover, the jury was instructed that

the tapes were the real evidence and that

the transcripts were merely aids to their

understanding. Testimony also was received

from the FBI agent who prepared the tran-

scripts verifying their accuracy. The

transcripts were properly used. See

United States v. Turner, 528 F.2d 143,

167-68 (9 Cir. 1975), cert. denied, 423

U.S. 996 (1976).

(5) CO-CONSPIRATOR'S STATEMENTS

Phillips argues that there was not

“substantial independent evidence” other

than hearsay of a Phillips-Beasley con-

spiracy to support the introduction of

1?.

statements from Beasley under the co-

conspirator's hearsay exception. See

United States v. Peterson, 549 F.2d 654,

658 (9 Cir. 1977); United States v. Cala-

way, 524 F.2d 609, 612 (9 Cir. 1975),

cert. denied, 424 U.S. 967 (1976). In

fact, Phillips' own words provide ample

evidence both of the illegal conspiracy

and his participation in it.

Smith's first contacts with anyone con-

nected with the RDA were with Phillips.

Shortly thereafter, Beasley came unan-

nounced to offer Smith a deal. On June

21, Phillips told Smith to follow Beasley's

directions and assured him of RDA Board

approval. On July 8, Phillips met Smith

at a restaurant and openly admitted his

role in the plan, Beasley's role as a

“messenger and a conduit,” and his use of

the payoff money. Moreover, Beasley knew

both of the Phillips-Smith restaurant meet-

ing and of the drop-off location -- facts

revealed only to Phillips. This indepen-

dent evidence proves the existence of a

conspiracy and Phillips’ connection with

it.

Phillips also contends that the trial

18.

court committed reversible error by per-

mitting Beasley's statements in evidence

before the existence of the conspiracy

had been proven. But the procedure of

provisionally admitting a co-conspirator's

statements is well establishei. United

States v. Heck, 499 F.2d 778, 790 (9 Cir.

1974); United States v. Castanon, 453 F.

2d 932, 934 (9 Cir. 1972). Phillips con-

tention that this practice is prejudicial

therefore is unavailing.

(6) VARIANCE

The indictment charged Phillips and

Beasley with threatening Smith that they

would “impede and obstruct payment of

Smith's claim . . . unless and until Smith

consented to pay $40,000 to defendants."

Phillips contends that the government's

proof showed only that he and Beasley

promised quick settlement in return for

the payoff. Cf. Stirone v. United States,

361 U.S. 212, 216-17 (1960). He thus

Claims there was a fatal variance between

the indictment and proof.

Beasley in fact told Smith on July 2

that paying the money was better than no

19.

settlement at all. Smith's claim had

been pending with the RDA for over three

years and there was no indication the RDA

intended to settle. The very need to pay

certain RDA Board members sugg2sts their

unwillingness to settle. It is true thai

Phillips never threatened nor apparently

intended to actively obstruct the claim.

But this was not necessary. His failure

to support the claim amounted to effective

killing of it. There is no requirement

nd

conduct to constitute extortion. Cf.

United States v. Hathaway, 534 F.2d 386

(1 Cir 1976) (threat to not award con-

tract); United States v. Braasch, 505 F.

2d 139 (7 Cir. 1974) (promise of nonen-

forcement of local liquor ordinances).

there be active rather than passive

The statute itself requires only that

a defendant “affect” interstate commerce

by his threats. Even if Phillips and

Beasley did not “obstruct,” it is certain

they did “affect.” In order for a vari-

ance to be fatal to an indictment, the

substantial rights of a defendant must be

prejudiced. Fed. R. Crim. P. 52(a);

United States v. Anderson, 532 F.2d 1218,

20.

1227 (9 Cir. 1976), cert. denied, 426 U.S.

925 (1976). Since appellants could have

been convicted under this alternative

working, no prejudice resulted and any

variance occurring was harmless. Cf.

United States v. Bolzer, F.2d.

(9 Cir. 1977); United States v. Andrino,

501 F.2d 1273, 1278 (9 Cir. 1974).

(7) JENCKS ACT MATERIAL

Beasley claims that Smith's personal

income tax returns constitute "statements"

under the Jencks Act, 18 U.S.C., § 3500,

and that the district court erred in re-

fusing to order their production. Such

eivdence allegedly would have proven that

Smith suffered no loss of his interstate

buying power.

Beasley makes no showing that the infor-

mation in the tax returns related to

Smith's “cash flow" position. But it is

clear that the tax returns would have

indicated the extent of Smith's interstate

business and thus related to the govern-

ment's asserted jurisdictional basis. A

contrary conclusion might violate the

policy of liberally construing the Jencks

21.

Act. See Goldberg v. United States,

U.S. , 44 U.S.L.W. 4424 (March 30,

1976).

There is some doubt whether Smith's

tax returns constitute "statements."

Cases under the Jencks Act generally con-

cern prior testimony, written materials,

or interviews relating to the alleged

offenses. In the one case where a defen-

dant sought to produce tax returns, the

court did not answer the question of

whether the returns were producible, but

ruled that the information contained in

the returns was obtained in cross-examina-

tion anyway. See United States v. Covello,

410 F.2d 536, 545-56 )2 Cir. 1969), cert.

denied, 396 U.S. 879 (1969).

The real answer to Beasley's complaint

is that production of the tax returns

would not have served any purpose. The

fact that Smith used some capital for

interstate purchases is undisputed, as is

the fact that appellants would have taken

a sizable amount from Smith. The tax re-

turns would not have shown how this money

would have been spent. At most this evi-

dence would have been cumulative. Thus,

22.

Beasley suffered no prejudice from the

alleged Jencks Act error. Cf. United

States v. Carrasco, 537 F.2d 372, 377 (9

Cir. 1976); United States v. Phillips,

482 F.2d 1355, 1357 (9 Cir. 1973), cert.

denied, 419 U.S. 847 (1974).

(8) JURY INSTRUCTIONS

Both Phillips and Beasley argue that

the district court erred in refusing to

instruct the jury that if they were

guilty of bribery, they could not be also

guilty of extortion. However, appellants

were indicted for extortion both by fear

of economic loss and under color of offi-

cial right. The circuits are unanimous

in concluding that where official right

is alleged, bribery and extortion are not

mutually exclusive under the Hobbs Act.

See United States v. Hathaway, supra,

534 F.2d at 394; United States v. Braasch,

supra, 505 F.2d at 151; United States v.

Kahn, 472 F.2d 272, 278 (2 Cir. 1973),

cert. denied, 411 U.S. 982 (1973).

The district court initially refused

to give the government's requested in-

struction on coercion as a defense because

23.

Phillips’ counsel objected to its being

given. Later, however, it became appar-

ent that the jury was considering coer-

cion as a defense for Phillips. At this

point, the district court gave a supple-

mental instruction on coercion. Phillips

claims this was error.

Phillips testified that he was "forced"

and “coerced” by Beasley -- a "forceful

guy" who worked through a "methodology of

fear" -- to make certain statements to

Smith. In addition, Phillips counsel ar-

gued coercion to the jury in his discus-

sion of willfulness. Since "the neces-

sity, extent, and character of additional

instructions are matters within the sound

discretion of the trial judge,” United

States v. Miller, 546 F.2d 320, 324 (9

Cir. 1976), the court could properly con-

clude that the evidence supported the in-

structions.

Phillips lastly argues that it was re-

versible error for the district court not

to instruct the jury that conspiracy is a

specific intent crime. The short answer

to this is that the court did so instruct

the jury. See TR., p. 1176 and E. Devitt

24.

and C. Blackmar, Federal Jury Practice

and Instructions,

The judgments of conviction are

AFFIRMED.

§ 29.05 (2d ed.

25.

1970).

since ieee ]

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