Appendix — Lachance v. United States

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No. 80-1706 | JUN 3™ 499

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Supreme Court of the United States

October Term, 1980

DOUGLAS LACHANCE,

Petitioner,

—vV Feed

UNITED STATES OF AMERICA,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

REPLY BRIEF IN SUPPORT OF PETITION

FOR A WRIT OF CERTIORARI

JOHN J. TIGUE, JR.

a Attorney for

a | Petitioner Douglas LaChance

| 80 Pine Street

New York, New York 10005

(212) 422-4030

Of Counsel

KOSTELANETZ & RITHOLZ

PETER J. DRISCOLL

ELLIOT SILVERMAN

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TABLE OF CONTENTS

Appendix A (Opinion of

United States Court of

Appeals for the Second

Circuit) ....

Appendix B (29 U.S.C.

§186). ....

Appendix C (26 U.S.C.

§7201) .. :

Appendix D (Rule 18,

Federal Rules of

Criminal Procedure).

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APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

At a Stated Term of the United

States Court of Appeals for the Second

Circuit, held at the United State Court-

house in the City of New York, on the

12th day of February one thousand

nine hundred and eighty-one.

Present: HONORABLE J. EDWARD LUMBARD

HONORABLE JAMES L. OAKES,

HONORABLE JON 0. NEWMAN,

Circuit Judges.

—_ Tf tf fe ke ee ell LLL LLL lL!

UNITED STATES OF AMERICA,

Plaintiff- -Appellee,

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DOUGLAS LaCHANCE,

Defendant-Appellant.

Defendant-appellant Douglas LaChance,

former President of the Newspaper and

Mail Deliverers Union (NMDU), appeals

from a judgment of the District Court for

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the Southern District New York (Milton

Pollack, Judge) convicting him after a

jury trial of 58 counts of extorting

labor payments in violation of 18 U.S.C.

§1951 (the Hobbs Act), 62 counts of

receiving unlawful labor payments in

violation of 29 U.S.C. §186 (the Taft-

Hartley Act) one count of conducting the

affairs of NMDU through a pattern of

racketeering in violation of 18 U.S.C. §

1962 (the RICO Act), and 3 counts of tax

evasion in violation of 26 U.S.C. §7201.

We affirm in part and reverse in part.

1. The motion to suppress the tape

recording of the conversation between La

Chance and DiPalermo was properly denied.

The officers’ transcript of the conversation

and the affidavit submitted in support of

the application for an amendment of the

eavesdropping warrant disclosed probable

cause to believe that the conversation

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concerned loansharking in violation of

New York's usury laws. The claim that

the supporting affidavit was rendered

deliberately or recklessly false by

inaccuracies in the accompanyingy transcript

did not entitle the defendant to relief

under Franks v. Delaware, 438 U.S. 154

(1978). A presumption of validity attached

to supporting affidavits. Id. at 171.

After listening to the recording, Judge

Pollack found that the officers’ transcript

was reasonably accurate. Based on our

own comparision of the tape and the

transcript we cannot say that this finding

was clearly erroneous. Accordingly,

suppression on this ground was not required.

See United States v. Barnes, 604 F.2d

121, 152 (2d cir. 1979), cert. denied,

100 S.Ct. 1833 (1980). The claim that

the affidavit was false and misleading in

its allegation of compliance with minimization

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standards is without merit. The materials

submitted to the District Court reflected

a reasonable effort to intercept only

narcotics-related conversations involving

one of the individuals named in the

warrant. DiPalermo was so named. The

words that were interpreted by the monitoring

officer as evidence of usury were spoken

only moments after the interception

began. DiPalermo had been overheard

discussing usury only days earlier. To

continue the interception of this non-

innocent conversation for an additional

seven minutes after these words were

spoken was not unreasonable, and reasonableness

is all that the statute demands. See

United States v. Manfredi, 488 F.2d 588,

600 (2d Cir. 1973), cert.denied, 417 U.S.

936 (1974).

2. Admission of the tape recording

was well within the scope of the District

Court's discretion. A tape recording

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should be excluded for inaudibility only

when the “unintelligible portions are so

substantial as to render the recording as

a whole untrustworthy." United States v.

Bryant, 480°F.2d 785, 790 (2d Cir. 1973).

Otherwise, the inaudibility of a part of

a tape recording goes to weight, not

admissibility. United States v. Provenzano,

615 F.2d 37, 40 n.4 (2d Cir.), cert. denied,

100 S.Ct. 2921 (1980). Judge Pollack was

able to “hear reasonably clearly the

matters set forth in the recording," and

he concluded that it was "certainly

sufficiently intelligible ... that a

jury listenting to [it] could reach a

fair conclusion as to what the subject

matter was." After listening to the

tape, we agree. We note, moreover, that

the jurors were given the Government -

and defense-prepared transcripts of the

recording and were instructed to make

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their own findings of what the recording

contained. Admission of the recording was

proper in every respect. See United States

v. Carson, 464 F.2d 424, 436-37 (2d

Cir.), cert. denied, 409 U.S. 949 (1972).

3. The cross-examination of LaChance

concerning his knowledge of the criminal

records of Troy, DiPalermo, and West was

ill-advised in view of the risk of prejudice

to the defendant, but the prosecutor's

questions did not warrant a mistrial and

are not cause for reversal. The questions

objected to were at least arguably permissible

to rebut LaChances' claims that he always

had acted in the best interests of NMDU

and had strived in his associations to

avoid even the appearance of impropriety.

Accordingly, there is no basis for reversal

‘on the ground that the questions were

"purely inflammatory" and were asked in

bad faith. The claim that the jury could

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have convicted solely because the questions

may have disclosed a general criminal

propensity is meritless. The questions

concerned the defendant's knowledge of

the criminal records of others, not his

own criminal record. The jury already

knew that LaChance associated with at

least two persons (Braunstein id O'eeen)

who had been convicted of making unlawful

labor payments. Seven other individuals

testified that they also made unlawful

payments to LaChance. Viewing the prosecutor's

questions, which constituted a small

fraction of the cross-examination of the

defendant, in light of the entire record

developed during the course of the two-

week trial, we are convinced that the

questions did not impermissibly contribute

to the verdict.

4. The evidence of venue on the

tax counts, viewed in a light most favorable

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to the Government, was sufficient to

permit the jury to find that LaChance

committed an affirmative act of tax

evasion in the Southern District. The

evidence showed that LaChance received

cash payments in the Southern District

that he failed to report on his federal

tax return. Care was taken to ensure

that the payments were in cash, and no

records of the payments were kept by

LaChance. See United States v. Spies,

317 U.S. 492, 499 (1943).

5. The evidence of venue on the

Taft-Hartley counts was at least marginally

sufficient as to all but the counts

involving the Weinberg acquisition payments.

a. the ‘evidence as to the Russ

Trucking payments (counts 130-33) showed

that the cash that was demanded and

received by LaChance was obtained at his

direction from a Manhattan bank. The

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jury could infer from this evidence that

in each instance the violation of §186(b)

began or continued in the Southern District

within the meaning of 18 U.S.C. §3237.

b. The evidence as to the Weinberg

layoff payment in October 1976 (count

127) showed that this was merely another

"usual payment of $3,000 per man" that

Weinberg previously had delivered to

LaChance through Braunstein. See App.

1072, 1102-03, 1114-15, 1161. The evidence

further showed that Braunstein conducted

his affairs from his office in the Southern

District. See App. 814-15, 921-22, 953.

We think the jury reasonably could infer

from these circumstances that the payment

in question was part of an unlawful

course of conduct that began or continued

in the Southern District.

c. The evidence as to the Weinberg

acquisition payments of December 1977

_ (count 127), February 1978 (count 128),

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and July 1978 (count 129) was insufficient

to permit a finding of venue in the

Southern District. So far as we can

tell, there was no srlidiaiela that payments

of this nature had been made in the past

to LaChance at the urging of Braunstein.

It appears that the payments were first

suggested to Weinberg by Alvino in Weinberg's

office in the Eastern District, pursuant

to conversations between Alvino and

LaChance at an unspecified location, and

delivered by Alvino to LaChance in the

Eastern District, App. 1074-83, 1168.

The convictions on these counts must be

reversed.

d. The evidence as to the Gelfand

labor-peace payments (counts 38-41) was

marginally sufficient to permit a finding

of venue in the Southern District.

Gelfand testified that Braunstein was the

intermediary between the wholesalers and

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NMDU, App. 1008; that he consulted Braunstein

regarding his problems with NMDU, App.

1009, particularly during the wholesalers'

meetings in the Southern District, App.

1008, 1009-10; and that Braunstein had

told him that he would have to make

~ _ payments to the Union, App. 1010-11. The

| evidence showed that Braunstein told

other wholesalers that a "laundry list"

of payments had to be made to the Union,

App. 301. Braunstein collected labor-

peace payments from the other wholesalers.

Finally, Gelfand testified that he made

the payments in question to LaChante

pursuant to Braunstein's suggestion.

App. 1016. There was no direct evidence

as to where this conversation occurred,

but we think the jury reasonably could

infer from the totality of the circumstances

that Braunstein either made this particular

suggestion in the Southern District or

that Gelfand's practice of making labor

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peace-payments had its origins in conduct

ocurring in that District. Accordingly,

we conclude that although the payments in

question were delivered in New Jersey, a

' sufficient basis was shown to infer that

the payments were solicitated in the

Southern District.

e. The evidence as to the Gelfand

Christmas payments of 1976-78 (counts 78-

91) and the Gelfand election payments of

1976-78 (counts 114-16) was essentially

the same as the evidence concerning the

labor-peace payments, and we conclude, by

the same reasoning applicable to those

payments, that the evidence was marginally

sufficient to support a finding of venue

in the Southern District on these counts

as well. Braunstein collected Christmas

and election payments every year from the

other wholesalers who also relied on

Braunstein to avoid and resolve problems

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with the leadership of NMDU. See App.

826-30. These payments appear to have

been part of the "laundry list" of payments

that Braunstein discussed with all the

wholesalers, including Gelfand, at the

meetings in the Southern District. See

App. at 301, 1008-11. Thus even thought

the payments were delivered in New Jersey,

we think the jury could reasonably conclude

that the payments were part of an unlawful

course of conduct that began or continued

in the Southern District.

f. The evidence as to the Feldman

election payment of May 1979 showed that

when Feldman joined the suburban Wholesaler's

Association, Braunstein informed him that

he would have to make payments for "certain

things." App. 633-34. Thereafter,

Feldman delivered election payments to

Braunstein either in the latter's office

or in a Howard Johnson's in the Bronx.

App. at 637-39. We think the jury could

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reasonably infer from this evidence that

the payment in question, though delivered

in the Eastern District, originated from

conduct occurring in the Southern District.

g. The evidence as to the Feldman

contract payment of May 1979 (count 122)

showed that after Feldman was informed by

Braunstein of the payoff scheme, he made

payments to Braunstein in connection with

the negotiation of every subsequent

collective bargaining agreement. App.

633-34. Here again, we conclude that the

payment in question, though delivered in

the Eastern District, could be viewed by

the jury as part of a course of conduct

that began or continued in the Southern

District.

5. The convictions on the Russ

Trucking counts are supported by sufficient

evidence, and the jury instructions as to

these counts were proper. There was

ample evidence that the Russ Trucking

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drivers would or could become members of

NMDU but for LaChance's conflict of

interest. NMDU represents employees

engaged in the handling and delivery of

newspapers in a territory that included

Connecticut, the location of Russ Trucking,

and the Russ Trucking drivers do this

very type of work. The 1974 agreement

between NMDU and El Diario could not

reasonably be interpreted to preclude

unionization of Russ Trucking's employees.

the fact that the charge conformed to the

literal terms of the absolute statutory

prohibition against payments by any

employer to an officer of a union that

would admit to membership the employer's

employees is no cause for holding that

the charge was erroneous. The meaning of

the statute is clear. Moreover, the

scope of the prohibition conveyed by the

plain terms of the statute did not require

a qualifying instruction that the statute

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would not apply to LaChance if he owned

Russ Trucking. The literal terms of the

statute make no exception for firms in

which a union official may have an ownership

interest, and Congress wanted the statute

to have the broadest possible scope in

order to protect employees. See United

States v. Roth, 333 F.2d 450, 453 (2d

Cir. 1964), cert.denied, 380 U.S. 942

(1965); United States v. Annunziato, 293

F.2d 373, 379 (2d Cir.), cert.denied, 368

U.S. 919 (1961). The jury could reasonably

find that the Russ Trucking payments were

detrimental to the interests of the

firm's employees. Such abuse of union

power, which the statute was intended to

prevent, is not beyond the reach of the

statute merely because the payee may have

an ownership interest in the payor. See

United States v. Overton, 470 F.2d 761

(2d Cir. 1972), cert.denied, 411 U.S. 909

(1973).

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6. The claim that the convictions

on the Hobbs Act counts must be reversed

for lack of evidence of reasonable fear

is without merit. The jury was properly

instructed that to prove a Hobbs Act

violation the Government had. to..show that

the wholesalers made the payments out of

a reasonable fear of economic injury.

See United States v. Daley, 564 F.2d 645,

650 (2d Cir. 1977), cert.denied, 435 U.S.

933 (1978). The issue of each wholesaler's

state of mind was peculiarly within the

province of the jury. See United States

v. Sears, 544 F.2d 585 (2d Cir. 1976).

Moreover, the evidence as to each of the

disputed counts was clearly sufficient.

Klinghoffer testified that Braunstein

told him that he would have to make

payments in connection with the contract

with NMDU, App. 382, and Klinghoffer also

testified from experience that union

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problems could be “very costly," App.

379. The claim that he made the payments

just to be "friendly" does not accurately

reflect his testimony. He stated that it

was good business to be friendly with

union officials, App. 426, in order to

avoid "very costly" problems. The absence

of testimony by Passaic executives did

not preclude a jury finding that the

Passaic payments were delivered to LaChance

through Braunstein out of a reasonable

fear of ecowemic injury. Braunstein's

testimony and that of the other wholesalers

amply supported a finding that all the

executives who made payments to LaChance

through Braunstein did so to avoid retaliation.

Nicol's testimony showed that Metropolitan

made the payments on Braunstein's “laundry

list" to avoid "bad trouble." App. 30l1-

04. The claim that the strike payments

were not made out of a reasonable fear is

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frivolous. Braunstein believed that

unless the payments were made, the

wholesalers would not be "permitted" to

handle the interim papers. App. 839.

The testimony of the other wholesalers

showed that they shared his belief that

the payments were absolutely required.

See App. 186-87, 639-40, 1085, 1027-08.

7. The claim that the sentence was

improper under United States v. Hendrix,

505 F.2d 1233 (2d Cir. 1974), cert.denied,

423 U.S. 897 (1975), is without merit in

light of United States v. Grayson, 438

U.S. 41, 52 (1978), which permits a court

to weight the defendant's perceived

perjury as a facter in determining an

appropriate sentence.

For the foregoing reasons, we

reverse the convictions on counts 127,

128, and 129, affirm the judgment in all

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other respects, and remand for resentencing

in light of the reversal of the convictions

on counts 127, 128, and 129.1 The

mandate shall issue forthwith.

s

Hon. J. Edward Lumbard

/s/

Hon. James L. Oakes

/s/

Hon. Jon O. Newman

Circuit Judges.

I. The effective aggregate sentence on

all counts was imprisonment of 12 years,

four months, and a fine of $100,000. The

sentence on each of counts 127, 128, and

129 was two months’ imprisonment and fine

of $500. Two-month sentences on all 62

of the Taft-Hartley counts, including

these three counts, were to run consecutively

to each other for a total, on those

counts,of 10 years, four months. This

total term is to run concurrently with

the ten-year term imposed on the RICO

count. Two-year sentences on the three

tax counts were to run concurrently with

each other but consecutively to the

sentences on all other counts. All fines

were cumulative. Therefore, reversal of

the convictions on three of the Taft-

Hartley counts will presumably result in

a reduction of six months in the aggregate

sentence on the Taft-Hartley counts to a

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total of nine years and ten months;

however, this will presumably result in

only a four-month reduction in the aggregate

sentence on all counts, since the two

years on the tax will still result in a

total aggregate sentence of 12 years.

Reversal of conviction on the three Taft-

Hartley counts will presumably reduce the

aggregate fines by $1,500 to a total of

$98,500. In entering a revised judgment,

the District Court may wish to consider

revising Part C, covering the Taft-

Hartley counts, to make clear that

counts 64, 67, 75, 77, and 78 were

dismissed; absence of that notation after

the reference in the judgment to counts

"62 through 81" appears to make the total

of Taft-Hartley counts greater by five

than the true number.

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APPENDIX B

29 U.S.C. §186.

Restrictions on financial transactions

Payment or lending, etc., of money by

employer or agent to employees, repre-

sentatives, or labor organizations

(a) It shall be unlawful for any employer

or association of employers or any person

who acts as a labor relations expert,

adviser, or consultant to an employer or

who acts in the interest or an employer

to pay, lend, or deliver, or agree to

pay, lend, or deliver, any money or other

thing of value --

(1) to any representative of any

of his employees who are employed

in an industry affecting commerce;

or

(2) to any labor organization,

or any officer or employee thereof,

which represents, seeks to represent,

or would admit to membership, any

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of the employees of such employer

who are employed in an industry

affecting commerce; or

(3) to any employee or group or

committee of employees of such

employer employed in an industry

affecting commerce in excess of

their normal compensation for the

purpose of causing such employee

group or committee directly or

indirectly to influence any other

employees in the exercise of the

right to organize and bargain

collectively through representatives

of their own choosing; or

(4) to any officer or eaployee

of a labor organization engaged in

an industry affecting commerce with

intent to influence him in respect

to any of his actions, decisions,

or duties as a representative of

employees or as such officer or

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employee of such labor organization.

Request, demand, etc., for money or

other thing of value

(b) (1) It shall be unlawful for any

person to request, demand, receive, or

accept, or agree to receive or accept,

any payment, loan, or delivery of any

money or other thing of value prohibited

by subsection (a) of this section. _

(2) It shall be unlawful for any labor

organization, or for any person acting as

an officer, agent, representative, or

employee of such labor organization, to

demand or accept from the operator of any

motor vehicle (as definded in part II of

the Interstate Commerce Act) employed in

the transportation of property in commerce,

or the employer of any such operator, any

money or other thing of value payable to

such organization or to an officer,

agent, representative or employee thereof

as a fee or charge for the unloading, or

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in connection with the unloading, of the

cargo or such vehicle: Provided, That

nothing in this paragraph shall be construed

to make unlawful any payment by an employer

to any of his employees as compensation

for their services as employees.

(c) The provisions of this section

shall not be applicable (1) in respect to

any money or other thing of value payable

by an employer to any of his employees

whose established duties include acting

openly for such employer in matters of

labor relations or personnel administration

or to any representative of his employees,

or to any officer or employee of a labor

organization, who is also an employee or

former employee of such employer, as

compensation for, or by reason, of, his

service as an employee of such employer;

(2) with respect to the payment or delivery

of any money or other thing of value in

satisfaction of a judgment of any court

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or a decision or award of an arbitrator

or impartial chairman or in compromise,

adjustment, settlement, or release of any

clain, complaint, grievance, or dispute

in the absence of fraud or duress; (3)

with respect to the sale or purchase of

an article or comodity at the prevailing

market price in the regular course of

business; (4) with respect to money

deducted from the wages of employees in

payment of membership dues in a labor

organization: Provided, That the

employer has received from each employee,

on whose account such deductions are

made, a written assignment which shall

not be irrevocable for a period of more

than one year, or beyond the termination

date of the applicable collective agreement,

whichever occurs sooner; (5) with respect

to money or other thing of value paid to

a trust fund established by such representative,

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for the sole and exclusive benefit of the

employees of such employer, and their

families and dependents (or of such

employees, families, and dependents

jointly with the employees of other

employers making similar payments, and

their families and dependents): Provided,

That (A) such payments are held in trust

for the purpose of paying, either from

principal or income or both, for the

benefit of employees, their families and

dependents, for medical or hospital care,

pensions on retirement or death of

employees, compensation for injuries or

illness resulting from occupational

activity or insurance to provide any of

the foregoing, or unemployment benefits

or life insurance, disability and sickness

insurance, or accident insurance; (B) the

detailed basis on which such payments are

to be made is specified in a written

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agreement with the employer, and employees

and employers are equally represented in

the administration of such fund, together

with such neutral persons as the representatives

of the employers and the representatives

of employees may agree upon and in the

event the employer and employee groups

deadlock on the administration of such

fund and there are no neutral persons

empowered to break such deadlock, such

agreement provides that the two groups

shall agree on an impartial umpire to

decide such dispute, or in event of their

failure to agree within a reasonable

length of time, an impartial umpire to

decide dispute shall, on petition of .

either group, be appointed by the district

court of the United States for the

district where the trust fund has its

principal office, and shall also contain

provisions for an annual audit of the

trust fund, a statement of the results of

which shall be available for inspection

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by interested persons at the principal

office of the trust fund and at such

other places as may be designated in such

written agreement; and (C) such payments

as are intended to be used for the purpose

of providing pensions or annuities for

| employees are made to a separate trust

which provides that the funds held therein

cannot be used for any purpose other than

paying such pensions or annuities; (6)

with respect to money or other thing of

value paid by any employer to a trust

fund established by such representative

for the purpose of pooled vacation,

holiday, severance or similar benefits,

or defraying costs of apprenticeship or

other training programs: Provided, That

the requirements of clause (B) of the

proviso to clause (5) of this subsection

shall apply to such trust funds; (7) with

respect to money or other thing of value

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paid by any employer to a pooled or

individual trust fund established by such

representative for the purpose of (A)

scholarships for the benefit of employees,

their families, and dependents for study

at educational institutions, or (B) child

care centers for preschool and school age

dependents of employees: Provided, That

no labor organization or employer shall

be required to bargain on the establishment

of any such trust fund, and refusal to do

so shall not constitute an unfair labor

practice: Provided further, That the

requirements of clause (B) of the proviso

to clause (5) of this subsection shail

apply to such trust funds; or (8) with

respect to money or any other thing of

value paid by any employer to a trust

fund established by such representative

for the purpose of defraying the costs of

legal services for employees, and their

families, and dependents for counsel or

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plan of their choice: Provided, That the

requirements of clause (B) of the proviso

to clause (5) of this subsection shall

apply to such trust funds: Provided

further, That no such legal service shall

be furnished: (A) to initiate any proceeding

directed (i) against any such employer or

its officiers or agents except in workman's

compensation cases, or (ii) against such

labor organization, or its parent or

subordinate bodies, or their officers or

agents, or (iii) against any other employer

or labor organization, or their officers

or agents, in any matter arising under

subchapter II of this chapter or this

chapter; and (B) in any proceeding where

a labor organization would be prohibited

from defraying the costs of legal services

by the provisions of the’ Labor-Management

Reporting and Disclosure Act of 1959.

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Penalty for violations

(d) Any person who willfully violates

any of the provisions of this ieetdion

shall, upon conviction thereof, be

guilty of a misdemeanor and be subject to

a fine of not more thant $10,000 or to

imprisonment for not more than one year,

or both.

Jurisdiction of courts

(e) The district courts of the United

States and the United States courts of

Territories and possessions shall have

jurisdiction, for cause shown, and

subject to the provisions of section 381

of Title 28 (relating to notice to

opposite party) to restrian violations of

this section, without regard to the

. provisions of chapter 6 of this title.

Effective date of provisions

(f) This section shall not apply to

any contract in force on June 23, 1947,

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until the expiration of such contract, or

until July 1, 1948, whichever first

occurs.

Contributions to trust funds

(g) Compliance with the restrictions

contained in subsection (c)(5)(B) of this

section upon contributions to trust

funds, otherwise lawful, shall we be

applicable to contributions to such trust

funds established by collective agreement

prior to January 1, 1946, nor shall

subsection (c)(5)(A) of this section be

’" construed as prohibiting contributions to

such trust funds if prior to January l, ©

1947, such funds contained provisions for

pooled vacation benefits.

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APPENDIX C

26 U.S.C. §7201

Attempt to evade or defeat tax

Any person who willfully attempts

in any manner to evade or defeat any tax

imposed by this title or the payment

thereof, shall, in addition to other

penalties provi:'ed by law, be guilty of

a felony and, upon conviction thereof,

shall be fined not more than $10,000, or

imprisoned not more than 5 years, or

both, together with the costs of prosecution.

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APPENDIX D

Rule 18, Federal Rules of Criminal Procedure.

Place of Prosecution and Trial

Except as otherwise permitted by

statute or by these rules, the prosecution

shall be had in a district in which the

offense was committed. The court shall

fix the place of trial within the district

with due regard to the convenience of the

defendant and the witnesses.

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