Record and brief — Thordarson v. United States

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ALEXA?

In THE pete STEVAS.

SUPREME COURT OF THE UNITED STATES

October Term, 1981

STEN THORDARSON, MARTIN FRY,

CRAIG DUNBAR, MARTIN SALGADO,

and CHARLES WISE,

Petitioners,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI

OF APPEALS

STILZ, BOYD, LEVINE &

HANDZLIK

JAN LAWRENCE HANDZLIK

Suite 1200

2049 Century Park East

Los Angeles, CA 90067

(213) 277-6844

Attorneys for Petitioners

QUESTIONS PRESENTED

In the absence of explicit statutory

language and a clear expression of Con-

gressional intent to expand Federal

criminal jurisdiction and to encroach upon

the criminal jurisdiction of the States,

do acts done in furtherance of legitimate

labor goals violate Federal criminal law?

In light of the comprehensive statu-

tory and administrative scheme enacted by

Congress to protect the rights of unions

and union members pursuing legitimate labor

goals, are acts done to secure bona fide

collective-bargaining objectives cognizable

under Federal criminal laws as well as

Federal labor laws?

TABLE OF CONTENTS

QUESTIONS PRESENTED

TABLE OF CONTENTS

TABLE OF AUTHORITIES

OPINIONS BELOW

JURISiDICTION

STATUTORY PROVISIONS INVOLVED

STATEMENT OF THE CASE

PROCEEDINGS BELOW

STATEMENT OF FACTS

ARGUMENT

THE RATIONALE ANIMATING UNITED

STATES v. ENMONS, 410 U.S. 396

(1973) PRECLUDES APPLICATION

OF THE FEDERAL CRIMINAL LAWS

CHARGED IN THIS CASE TO ACTS

DONE IN FURTHERANCE OF A LEGI-

TIMATE LABOR DISPUTE

THE INDICTMENT IMPROPERLY IN-

TRUDES INTO A FEDERALLY

PROTECTED AREA

BEFORE FEDERAL CRIMINAL STAT-

UTES CAN BE APPLIED TO ACTS

OCCURRING IN CONNECTION WITH

A LEGITIMATE LABOR DISPUTE,

A CLEAR EXPRESSION OF CONGRES-

SIONAL INTENT IS NECESSARY

1. No Specific Legislative

Intent Exists Supporting

the Application of the

Statutes Charged in

this Context.

2. Reference to Related

Statutory Schemes Rein-

forces the Conclusion

that Congress Did Not In-

tend These Statutes To Be

Used in the Context of

Legitimate Labor Disputes

and That the Prosecution

of Such Acts Has Been Left

to the States.

CONCLUSION

APPENDIX A:

APPENDIX B:

APPENDIX C:

APPENDIX D:

APPENDIX E:

Opinion of the Court

of Appeals

Opinion of the United

States District Court

Order Denying Rehearing

Statutory Provisions

Involved

Indictment

iii

TABLE OF AUTHORITIES

Page

Cases

Beacon Moving and Storage,

Inc. vw. Local 814, etc.

362 #.Supp. 442

(S.D.N.Y. 1972) 20

Bell v. United States

349 U.S. 81 (1955) 25

Erlenbaugh v. United States

409 U.S. 239 (1972) 31, 38, 39

Langel v. United States

451 F.2d 957

(8th Cir. 1971) 23

NLRB v. Georgetown Dress

Corporation

537 F.2d 1239

(4th Cir. 1976) 24

NLRB v. Union Nacional de

Trabajadores

540 F.2d 1

(lst Cir. 1976),

cert. denied,

429 U.S. 1039 (1977) 24

Rewis v. United States

401 U.S. 808 (1971) 31

Scott v. Moore

640 F.2d 708

(Sth Cir. 1981) 21, 30

United States v. Bailes

120 F.Supp. 614

(S.D.W.Va. 1954)

United States v. Caldes

457 F.2d 74

(9th Cir. 1972)

United States v. DeLaurentis

491 F.2d 208

(2nd Cir. 1974)

United States v. Enmons

410 U.S. 396 (1973)

United States v. Local 807

315 U.S. 521 (1942)

United States v. Love

482 F.2d 213 (5th Cir.),

cert. denied,

414 U.S. 1026 (1973)

United States v. Marubeni

America Corp.

611 F.2d 763

(9th Cir. 1980)

United States v. Parker

586 F.2d 422

(5th Cir. 1978),

cert. denied,

441 U.S. 962 (1979)

-Vv-

30,

18,

27,

United States v. Polizzi

500 F.2d 856

(9th Cir. 1974),

cert. denied,

419 U.S. 670 (1975)

United States v. Quinn

514 F.2d 1250

(5th Cir. 1975),

cert. denied,

424 U.S. 955 (1976)

United States v.

Thordarson, et al.

646 F.2d 1323

(9th Cir. 1981)

United States v.

Thordarson, et al.

487 F.Supp. 991

(C.D. Cal. 1980)

United States v. Turkette

U.S. ,

TOl Ss.ct. 2524,

L.Ed. (1981)

Statutes

18 U.S.C. §844(i)

18 U.S.C. §1951

18 U.S.C. §1952

18 U.S.C. §1961(1)-(5)

-vi-

20,

1, 20-

31, 36,

29-

3, 6,

25,

23,

37,

31,

16,

3, 6,

U.S.C.

§1962

§1962(c)

§1962(d)

§1963

§1963(b)

§1964

§1964 (a) (b)

§3731

§1254(1)

§151

§152(9)

§153

§157

§158

§159

§401

§501

§501 (c)

-vii-

3, 5,

19,

6, 7,

Page

Acts

Anti-Racketeering Act of

1934, §2(a) 41, 42

National Labor Relations Act

of 1947 17-19

Organized Crime Control Act

of 1970, Public Law 91-452 40

Rules

United States Supreme Court Rules,

Rule 21.1(f) 3

Miscellaneous

Proposed legislation, United States

Senate:

$.613, (97th Congress,

lst Session) 34, 35

S.613(a) (1) (2) 34

S.613(c) (2) 34

S$.1722(b), (96th Congress,

lst Session) 33, 34

-viii-

OPINIONS BELOW

The May 20, 1981 Opinion of the

United States Court of Appeals for the

Ninth Circuit is contained in Appendix "A".

It is published as United States v.

Thordarson, et al., 646 F.2d 1323 (9th Cir.

1981).

The March 17, 1980 Opinion of the

United States District Court for the Cen-

tral District of California is contained

in Appendix "B". It is published as

United States v. Thordarson, et al., 487

F.Supp. 991 (C.D. Cal. 1980).

JURISDICTION

The judgment of the Court of Appeals

for the Ninth Circuit was entered on May

20, 1981. An Order denying a petition for

rehearing and rejecting a suggestion for

rehearing en banc was entered on August 5,

1981. That. Order is contained in Appendix

The jurisdiction of this Court is in-

voked under 28 U.S.C. §1254(1).

STATUTORY PROVISIONS INVOLVED

Pursuant to Rule 21.1(f), United

States Supreme Court Rules, the statutory

provisions which this case involves are set

forth in Appendix "D". Those provisions

are:

1. 18 U.S.C. §844(i): Damage by Ex-

plosives to Vehicles (Appendix "D", page 118);

2. 18 U.S.C. §1951: Interference with

Commerce by Threats or Violence (App. D,

pp 118-119);

3. 18 U.S.C. §1952: Interstate Trans-

portation in Aid of Racketeering Enterprises

(App. D, p. 120-121);

4. 18 U.S.C. §1961(1)-(5); Defini-

tions - Racketeer Influenced and Corrupt

Organizations ("R.I.C.0.") (App. D, p. 121-3);

5. 18 U.S.C. §1962(c) and (d); Pro-

hibited Activities (R.I.C.0.) (App. D, p.123);

6. 18 U.S.C. §1963: Criminal Penal-

ties (R.I.C.0O.) (App. D, p. 123);

7. $418 U.S.C. §1964: Civil Remedies

(R.I.C.0.) (App. D, pp 125-6);

8. 29 U.S.C. §151: Findings and De-

Claration of Policy (National Labor Rela-

tions Act of 1947) ("N.L.R.A.") (App. D,

pp 126-128);

9. 29 U.S.C. §152(9): Definitions

(N.L.R.A.) (App. D, p. 128);

10. 29 U.S.C. §157: Rights of Employ-

ees as to Organization, Collective Bar-

gaining, etc. (N.L.R.A.) (App. D,pp 128-9);

ll. 29 U.S.C. §401: Congressional

Declaration of Findings, Purposes, and

Policy (Labor-Management Reporting and

Disclosure Act of 1959) (App. D, pp 129-130);

12. 29 U.S.C. §501: Fiduciary Re-

sponsibility of Officers of Labor Organi-

zations (App. D, pp 131-133).

STATEMENT OF THE CASE

A. PROCEEDINGS BELOW

On November 20, 1979, a Federal Grand

Jury for the Central District of California

returned a ten count Indictment in the pre-

sent case. (Clerk's Record, "CR", Docket

Control Number 1) A copy of the Indictment

is contained in Appendix "E",

The Indictment charged the five peti-

titioners, each of whom is an officer or

employee of the Teamsters Union, with being

an “enterprise” engaged in a pattern of

racketeering activity. It was thus alleged

that the petitioners had taken part in a

racketeering conspiracy in violation of 18

U.S.C. §1962(d), the Racketeer Influenced

and Corrupt Organizations statute

( "R.I.C.0."). (Appendix E, pp 134-7)

The Indictment, which alleged that the

petitioners were engaged in an effort to

unionize employees of a moving and storage

company, also charged violations of 18

U.S.C. §1952, Interstate Transportation in

Aid of Racketeering Enterprises (the "Tra-

vel Act"); 18 U.S.C. §844(i), Damage by

Explosives to Vehicles; and 29 U.S.C.

§50l1(c), Embezzlement of Union Funds.

(Id.)

On January 21, 1980, a hearing was

held on petitioners’ motion to dismiss

the Indictment for failure to state offen-

ses under Federal Law (CR 54; Reporter's

Transcript, "RT", January 21, 1980).

On March 17, 1980, the District Court

filed an Opinion and Order dismissing the

Indictment. (CR 76; Appendix "B") Judg-

ments of Discharge as to each petitioner

were filed on the same day. (CR 76)

On April 9, 1980, under the authority

of 18 U.S.C. §3731, the Government appealed

to the Court of Appeals for the Ninth Cir-

cuit. (CR 77)

On May 20, 1981, the Opinion of the

Court of Appeals was entered. (Appendix

"A") With one Judge dissenting, the Court

of Appeals reversed the District Court's

dismissal of the counts of the Indictment

charging violations of the R.I.C.0. statute,

the Travel Act and the explosives statute.

_ (Appendix A, pp 20, 69)

The Court of Appeals, holding that the

allegations in the Indictment were suffi-

cient, also reversed the District Court's

dismissal of the counts of the Indictment

charging violations of the embezzlement

statute, 29 U.S.C. §50l(c). (Appendix A,

pp 22, 69)

A petition for rehearing was denied on

August 5, 1981. (Appendix nanyl/

1/ The names of all parties to the pro-

ceeding in the Court of Appeals are con-

tained in the caption of the present

Petition.

B. STATEMENT OF FACTS

Between approximately July 1, 1978

and December 1, 1978, two Local Unions of

the International Brotherhood of Teamsters

sought to unionize employees of Redman

Moving and Storage Company, Thousand Oaks,

California ("Redman"). (CR 1, [Indictment]

pp 1-3; Id. Appendix E, pp 134-7 )

Local 186, aided by Local 389, sought

to induce Redman into recognizing the Team-

sters Union. Redman employees had elected

Local 186 as their bargaining agent. The

election had been certified by the National

Labor Relations Board. In July 1978, after

Redman had refused to recognize the Team-

sters as bargaining agent, Local 186 or-

dered a strike against Redman. (Id.;

RT 12-13)

During the course of this lawful

strike, the acts alleged in the Indictment

purportedly took place. To induce Redman

into recognizing the union, three trucks

were purportedly damaged or destroyed, and

plans to destroy another truck were alle-

gedly made. (Appendix E, pp 137-9)

In attempting to induce Redman into

recognizing the Teamsters, expenses were

incurred by the Locals and by certain of

their members. (Appendix E, p139) Payment

of or reimbursement for these expenses by

the Locals was charged as embezzlement of

union funds in the Indictment. These dis-

bursements were also alleged to be part of

the “pattern of racketeering activity”

charged in the R.I.C.0O. count. (Id.)

Certain defendants charged gasoline

purchases for the vehicles which they were

using on union credit cards. Seven gaso-

line purchases ranging in the amount from

$5.00 to $14.00 were alleged. The credit

card bills were paid by the Locals. (Id.

at 151-165)

Telephone calls were charged to union

telephone credit cards, the monthly bills

for which were paid by the Locals. Other

expenses incurred in connection with efforts

to unionize Redman, including automobile

and airplane rental expenses, were paid for

or reimbursed by the Locals. (Id.)

All such expenses were incurred in

connection with the Locals' attempt to

unionize Redman (Id. 139) The constitution

of each Local authorized payment of or re-

imbursement for such expenses. (Appendix B

p.99 and n.13, p 111) The Indictment suggests

that the use of union funds had been auth-

orized for these expenses. (Appendix E,

pp 151-165) The funds were not converted to

the personal use of any defendant or any

other person. (RT 8-9; CR 58, pp 1-2)

ARGUMENT

A. THE RATIONALE ANIMATING UNITED STATES

v. ENMONS, 410 U.S. 396 (1973) PRE-

CLUDES APPLICATION OF THE FEDERAL

CRIMINAL LAWS CHARGED IN THIS CASE

TO ACTS DONE IN FURTHERANCE OF A

LEGITIMATE LABOR DISPUTE

In 1973, this Court was asked to

determine whether the Hobbs Act, 18 U.S.C.

§ 1951, proscribed ". . . violence com-

mitted during a lawful strike for the

purpose of inducing an employer's agree-

ment to legitimate collective-bargaining

demands." United States v. Enmons, 410

U.S. 396, 399 (1973).

The Court rejected the application

of the Hobbs Act to acts of violence com-

mitted by union members to secure a

collective-bargaining agreement. The

violent acts, directed at a utility com-

pany, included blowing up a transformer

substation owned by the company and firing

high-powered rifles at company transform-

ers. Id. at 398. Among other things, the

Court held that violence to achieve legi-

timate union objectives was not covered

by the extortion provision of the Hobbs

Act, because there could have been no

“wrongful” taking of the employer's prop-

erty. Id. at 400.

In the present case, the Government

again seeks to prosecute union members

for extortionate acts committed during

the course of and in furtherance of a

lawful labor dispute which had as its

objective the attainment of a legitimate

collective-bargaining agreement. This

time, instead of using the Hobbs Act, the

Government is employing different Federal

criminal statutes to accomplish the same

result. The Government, by attempting

to evade the dictates of Enmois, supra,

while ignoring the carefully crafted limi-

tations of Federal labor law, is once more

seeking to expand Federal criminal juris-

diction.

In Enmons, supra, following an anal-

ysis of the pertinent legislative history,

the Court concluded that Congress had not

intended to exercise its power to reach

the acts of violence charged. Id. at

410; see Id. at 413 (Mr. Justice Black-

mun, concurring). The Court noted that

the Government's interpretation of the

Hobbs Act:

",. . « would cover all overtly

coercive conduct in the course

of an economic strike, obstruc-

ting, delaying, or affecting

commerce. The worker who threw

a punch on a picket line, or

the striker who deflated the

tires on his employer's truck

would be subject to a Hobbs

Act prosecution and the possi-

bility of 20 years’ imprison-

ment and a $10,000 fine.” Id.

at 410.

Finally, the Court held that, for

two reasons related to its construction

of the term “wrongful,” the Hobbs Act

could not properly be expanded in the

manner sought by the Government, ". ..

{e]ven if the language and history of the

Act were less clear than we have found

them to be. ..." Id. at 4ll. The

Court first stated that a criminal stat-

ute such as the Hobbs Act must be strictly

construed and any ambiguity resolved in

favor of lenity. Id.

The Court then addressed itself to

the same important questions of Federal

criminal and labor law presented by the

present case. In rejecting the Govern-

ment's attempt to bring about a major

expansion of Federal criminal jurisdic-

tion, the Court stated:

"Secondly, it would

require statutory language

much more explicit than that

before us here to lead to the

conclusion that Congress in-

tended to put the Federal

Government in the business

of policing the orderly con-

duct of strikes. Neither

the language of the Hobbs

Act nor its legislative

history can justify the

conclusion that Congress

intended to work such an

extraordinary change in

federal labor law or such an

unprecedented incursion into

the criminal jurisdiction of

the States. [citations

omitted)" Id. at 411.

Once again, the Government asks this

Court to thrust the Federal Government

into the business of ". . . policing the

orderly conduct of strikes." Id. By

charging acts of vandalism which amount

to extortion in a legitimate labor con-

text under sections of Federal criminal

law other than the Hobbs Act, the Govern-

ment again seeks to make the Federal

Courts the arbiter of disputes histori-

cally left to the criminal jurisdiction

of the States. Id. at 410, 411-412.

The petitioners are charged with

violations of the Racketeer Influenced and

Corrupt Organizations statute ("R.I.C.0."),

18 U.S.C. § 1962(d); the statute prohibi-

ting Interstate Travel in Aid of Racke-

teering (the "Travel Act"), 18 U.S.C.

§ 1952; the Damage by Explosives to Vehi-

cles, 18 U.S.C. § 844(i); and Embezzle-

ment of Union Funds, 29 U.S.C. § 50l(c),

for acts done to induce an employer into

recognizing their union. (Appendix E

[Indictment], pp 136-7) Thus, in an effort

to skirt the proscriptions of Enmons and

the dictates of the National Labor Rela-

tions Act, the Government has employed

different statutes to accomplish the same

objective sought in Enmons.

B. THE INDICTMENT IMPROPERLY INTRUDES

INTO A FEDERALLY PROTECTED AREA

During the period of time covered by

the Indictment, two Locals of the Inter-

national Brotherhood of Teamsters “sought

to unionize Redman [Moving and Storage

Company] employees." (Appendix E [Indict-

ment], p 135) In an effort to unionize

Redman, the Locals employed both organi-

zational efforts and a strike. Both the

strike and its objectives were legal, and

the union's activities were protected

under a comprehensive Federal statutory

scheme.

Through numerous pieces of legisla-

tion, including the National Labor Rela-

tions Act, Congress has established a

comprehensive statutory and administra-

tive scheme to protect the rights of

unions and union members pursuing legi-

timate labor objectives. Such legisla-

tion underscores the significance which

Congress attributes to the labor move-

ment. It was the clear intent of Congress

that Federal labor law or State criminal

and civil proceedings be employed to

police events occurring during efforts to

achieve legitimate labor objectives.

United States v. Enmons, supra, 410 U.S.

at 411; United States v. DeLaurentis, 491

F.2d 208, 211, 214 (2nd Cir. 1974).

The National Labor Relations Act of

1947 (the “Act") first discusses the burdens

on and obstructions to interstate commerce

caused by “strikes and other forms of in-

dustrial strife or unrest..." Section One

of the Act then goes on to state that:

"It is declared to be the

policy of the United States to

eliminate the causes of certain

substantial obstructions to the

free flow of commerce and to

mitigate and eliminate those

obstructions when they have

occurred by encouraging the

practice and procedure of col-

lective bargaining and by pro-

tecting the exercise by workers

of full freedom of association,

self-organization, and designa-

tion of representatives of their

own choosing, for the purpose of

negotiating the terms and condi-

tions of their employment or other

mutual aid and protection."

29 U.S.C. § 151

The Act goes on to create the National

Labor Relations Board, 29 U.S.C. § 153; to

set forth the rights of employees, 29

U.S.C. § 157; to define unfair labor prac-

tices of both employers and unions, 29

U.S.C. § 158; and to set forth the terms

for the selection of labor representa-

tives by employees, 29 U.S.C. § 159. It

is highly significant to note that no-

where in this exhaustive scheme of

Federal labor legislation does Congress

make a criminal act committed as part

of a labor dispute a Federal offense.

United States v. DeLaurentis, supra, 491

F.2d at 212-213.

Labor unions are by their very nature

involved in organizational activity which

includes economic coercion. The Act

acknowledges that coercion brought to

bear in an effort to induce an employer

into recognizing a union has a substantial

effect upon interstate commerce. Absent

specific Congressional intent, the use of

coercive tactics to obtain legitimate

labor objectives is beyond the reach of

Federal criminal law. United States v.

Quinn, 514 F.2d 1250, 1257 (5th Cir.

1975), cert. denied 424 U.S. 955 (1976);

cf. United States v. Caldes, 457 F.2d

74, 76-77, 79 (9th Cir. 1972).

In the present case, the Court of

Appeals stated that Federal labor laws

do not provide the exclusive remedy for

dealing with union violence to achieve

collective-bargaining purposes. United

States v. Thordarson, et al., 646 F.2d

1323, 1331 (9th Cir. 1981) (Appendix A,

p17) This is correct; other remedies

are available. Injunctive relief may

be sought in Stete courts. See Beacon

Moving and Storage, Inc. v. Local 814,

Etc., 362 F. Supp. 442, 444-445 (S.D.N.Y.

1972) .2/ Compensation for damages may be

obtained under State tort laws. United

States v. Thordarson, et al., supra, 646

F.2d at 1331 n. 13. (Appendix A, p 51)

Federal Court injunctive relief is avail-

able. Scott v. Moore, 640 F.2d 708, 714,

723-4, 731 (5th Cir. 1981). Finally,

criminal acts may be prosecuted under State

law. Thordarson, supra, 1331, 1338 (Judge

Pregerson, dissenting) (Appendix A, pp 18,

19, 72); United States v. Enmons, supra,

410 U.S. at 410-412.

However, the conclusion of the Court

of Appeals that the Federal criminal stat-

2/ The RICO Act authorizes injunctive relief.

These provisions are found in both the criminal

penalties, 18 U.S.C. § 1963(b), and civil remedies,

18 U.S.C. § 1964(a) (b). Under the Government's

theory, the injunctive relief available as a cri-

minal penalty in § 1963(b) could logically be used

to restrain acts done by union members in further-

ance of legitimate labor objectives, which acts

violated § 1962. See United States v. Turkette,

U.S.__, 101 S.Ct. 2524, 2529-2530, | L.Bd (1981)

(discussion of civil remedies under RICO).

utes charged here may be applied to acts

committed in furtherance of legitimate

labor disputes lacks persuasive legisla-

tive or judicial support. The Majority

Opinion was unable to point to anything

in the legislative history of Federal

labor laws to support its conclusion.

Instead, the Court below stated:

"Nothing in the language or

legislative history of federal

labor legislation suggests

that federal criminal statutes

--enacted to supplement state

criminal sanctions--should not

Similarly be available to

punish union members and offi-

cials who try to achieve col-

lective bargaining goals by

means of the kind of violence

charged in the indictment

before us." Id. (Appendix A,

p 18)

This falls far short of the explicit

statutory language and clear legisla-

tive history called for in Enmons, supra,

410 U.S. at 4ll.

Nor is the Court of Appeals able to

rely upon persuasive judicial precedent

for its conclusion. In again attempting

to turn a lack of authority into support

for its conclusion, the Court cites three

explosives cases in which the issues dealt

with in Enmons and presented by the pre-

sent case were neither raised nor dis-

cussed. Thordarson, supra, 646 F.2d at

1327 n. 8 (Appendix A, pp 40-41).2/ This

paucity of case support is indicative of

the fact that the Government has rarely

sought to use Federal criminal laws to

police labor disputes.

It is without question that certain

acts of violence and threats of violence

committed by either unions or employers

3/ United States v. Parker, 586 F.2d

422 (5th Cir. 1978), cert. denied, 441

U.S. 962 (1979); United States v. Love,

482 F.2d 213 (5th Cir.), cert. denied,

414 U.S. 1026 (1973); Langel v. United

States, 451 F.2d 957 (8th Cir. 1971).

Langel was actually decided before

Enmons, supra.

can, in certain narrowly defined circum-

stances, be held to be unfair labor

practices. 29 U.S.C. § 158. See NLRB v.

Union Nacional de Trabajadores, 540 F.2d

1, 10-11 (lst Cir. 1976), cert. denied,

429 U.S. 1039 (1977); NLRB v. Georgetown

‘Dress Corporation, 537 F.2d 1239, 1242

(4th Cir. 1976). In the present case, it

is sufficient to say that nothing done

during the course of the Union's efforts

to induce Redman into recognizing it was

ever found or even alleged to constitute

an unfair labor practice. To now claim

that certain acts allegedly committed in

furtherance of that legitimate labor dis-

pute are Federal crimes is an insidious

intrusion into a federally protected area.

United States v. DeLaurentis, supra, 491

F.2d at 214.

C. BEFORE FEDERAL CRIMINAL STATUTES CAN

BE APPLIED TO ACTS OCCURRING IN CON-

NECTION WITH A LEGITIMATE LABOR DIS-

PUTE, A CLEAR EXPRESSION OF CONGRES-

SIONAL INTENT IS NECESSARY

1. No Specific Legislative Intent

Exists Supporting the Applica-

tion of the Statutes Charged in

this Context.

The application of R.I.C.0., the Tra-

vel Act, the explosives statute and the em-

bezzlement statute to acts allegedly com-

mitted in the context of a legitimate labor

dispute is not supported by clear legis-

lative intent. On the contrary, it is the

clear intent of Congress that such acts,

if criminal, shall be left to the States.

United States v. Enmons, supra, 410 U.S.

at 411; United States v. Quinn, supra, 514

F.2d at 1257.

As stated in Bell v. United States,

349 U.S. 81, 83 (1955):

"When Congress has the will it has

no difficulty in expressing it ....

When Congress leaves to the Judiciary

the task of imputing to Congress an

undeclared will, the ambiguity should

be resolved in favor of lenity."

The Government attempts to distinguish

Enmons by stating that, while extortion in a

labor context was charged in Enmons, the

present case involves the simple crime of

arson. Such an attempt ignores the very

language of the Indictment, as well as the

principles enunciated in Enmons. As noted

earlier, the Government alleges that, dur-

ing the period of time covered by the

Indictment, the Locals "sought to unionize

Redman employees." (Appendix E [Indict-

ment], p 135) The Government then goes on

to charge:

"It was part of the conspiracy

that the defendants would and did

utilize fear, threats and violence,

including arson and threats of arson

to induce Redman Moving and Storage

Company by unlawful means into recog-

nizing the Teamsters Union."

(Id. at p 137)

Thus, even if the Government's re-

strictive interpretation of Enmons is

correct, it is clear that the Indictment

has in fact charged the defendants with ex-

tortion in the context of a legitimate

labor dispute.

The Government's reading of Enmons

is too narrow. United States v. Thordar-

son, supra, 646 F.2d at 1338 (Judge

Pregerson, dissenting) (Appendix A p 70).

A similar attempt by the Government to

avoid the dictates of Enmons was rebuffed

in United States v. DeLaurentis, supra, 491

F.2d 208 (2nd Cir. 1974). In DeLaurentis,

the Government attempted to utilize an 1870

Civil Rights statute to prosecute three

officers of a labor union for conspiring to

“injure, oppress, threaten and intimidate"

members of the union in the free exercise

of their right not to participate in certain

labor activity. The Second Circuit re-

versed the defendants’ convictions and

ordered the Indictment dismissed, ruling

that the defendants’ acts had not been made

criminal by Congress. Id. at 2ll, 214.

The Court held that the comprehen-

sive statutory scheme enacted by Congress

as the National Labor Relations Act con-

trolled the regulation of acts such as those

at issue in DeLaurentis. Id. at 21l. The

Court noted that criminal penalties were not

intended for violations of the Act; such

penalties were "conspicuously absent" from

the Act. Id. at 212-213; See United States

v. Caldes, supra, 457 F.2d at 78.

As in this case, the violence charged

in DeLaurentis occurred in the course of a

legitimate labor dispute. As here, the de-

fendants were not charged with seeking per-

sonal gain, but with conspiring to advance

the aims of their union by illegal means.

As here and in Enmons, the statutory

language arguably applied to the Acts

alleged. 491 F.2d at 211-212; Enmons,

supra, 410 U.S. at 399; See United States

v. Turkette, supra, 101 S.Ct. at 2527.

Relying upon Enmons, the Second

Circuit ordered the Indictment dismissed,

because the language and history of the

statute charged did not explicitly reflect

the intent of Congress to make even

violent criminal acts committed in fur-

therance of legitimate labor goals Federal

offenses. Citing Enmons and United States

v. Bailes, 120 F.Supp. 614, 637 (S.D.W.Va.

1954), the Second Circuit concluded:

"The Government has unjustifiably

used federal law to convert an un-

fair labor practice into a criminal

conspiracy." 491 F.2d at 2144/

The lengthy discussion of the legisla-

tive history of the R.I.C.O. Act in United

States v. Turkette, supra, 101 S.Ct. at

2531-2534 and notes 11-14, makes it clear

that the major purpose of Congress in en-

acting R.I.C.0. was to ". . . address the

infiltration of legitimate business by

organized crime." Id. at 2532. Congress

sought to attack the source of organized

4/ As the Ninth Circuit stated in Caldes,

supra, 457 F.2d at 79:

"[I]t appears to us that the acts

of vandalism of the type committed

by these appellants would be more

properly and suitably piosecuted in

the state courts and it is doubtful

if Congress intended by Section 195l

to elevate this type of conduct to

the level of the federal court."

See United States v. Quinn, supra, 514

F.2d at 1257; C£. Scott v. Moore, supra;

640 F.2d at 723-724 ("Section 1985(3)

cannot be invoked to disrupt the opera-

tion of a carefully integrated statutory

scheme" and citing United States v. De-

Laurentis, supra),

crime's economic power, whether that power

was wielded through legitimate or illegi-

timate enterprises. Id at 2532-2534.

See also United States v. Marubeni America

Corp., 611 F.2d 763, 769 n. 11 (9th Cir.

1980).

It is also established that R.I.C.O.

is not limited to members of "organized

crime" or “labor racketeers” as those terms

are commonly used. United States v.

Thordarson, et al., supra, 646 F.2d at

1328-1329 n. 10. Nor is the reach of the

Travel Act limited in this fashion. 1a.2/

5/ However, Courts have repeatedly rejected

an “expansive" application of the Travel

Act which, among other things, "...might

well produce situations in which...rela-

tively minor state offenses [would be

transformed] into federal felonies." Rewis

v. United States, 401 U.S. 808, 812 (1971),

as quoted in Erlenbaugh v. United States,

409 U.S. 239, n. (1972); United

States v. Polizzi, 500 F.2d 856, 874 (9th

Cir. 1974), cert. denied 419 U.S. 670 (1975)

["...-prosecutions of minor illegal acts in-

cidental to an otherwise legal business."]

Nevertheless, before these statutes

may be applied to acts done in furtherance

of legitimate collective-bargaining ob-

jectives, a clear expression of Congres-

sional intent must be found. The explicit

language of the statutes fails to disclose

such an intent. The legislative history

of the statutes fails to disclose such an

intent. In the absence of such an expres-

sion of Congressional intent, it cannot be

concluded that Congress:

". . »« intended to work such an extra-

ordinary change in federal labor law

or such an unprecedented incursion

into the criminal jurisdiction of

the States."

Enmons, supra, 410 U.S. at 41l

Congress is now considering legisla-

tion which would, in effect, limit the

scope of the Enmons' decision. This action

is an indication of the fact that Congress

did not intend present Federal criminal

laws to cover acts committed to further

legitimate labor disputes. The legislation

as originally proposed in the Senate was

designed to amend the extortion laws and

contained a highly significant exclusion.

Sub-paragraph (b) of proposed Section 1722

of S.1722 (96th Congress, First Session)

stated:

“(b) BAR TO PROSECUTION.--It is a bar

to prosecution under this section

that the offense occurred in connecti-

on with a labor dispute as defined in

29 U.S.C. 152(9) to achieve legiti-

mate collective bargaining objectives,

unless there is clear proof that the

conduct which constitutes the threat

or placing in fear required under sub-

section (a)(1l) consists of a felony

and the conduct was engaged in for

the purpose of causing death or severe

bodily injury in order to secure such

objectives; and the Attorney General,

Deputy Attorney General, or Assistant

Attorney General for the Criminal

Division certifies in writing that--

"(A) the facts establish the exist-

ence of the additional elements of

the offense required under this

subsection;

"(B) a federal prosecution should

be commenced under this section; and

"(C) the State is unable or unwill-

ing to proceed with any equivalent

prosecution relating to such conduct.

(pp 119-120 of Report No. 96-553)

S. 1722 thus recognized the deference ac-

corded to State criminal proceedings in this

sensitive area of federally protected rights.

On March 3, 1981, a Bill which, if

passed, would effectively overrule Enmons

was introduced in the first session of the

Ninety-Seventh Congress. S. 613 is pre-

sently being considered by the Senate

Judiciary Committee. In addition to extor-

tion provisions, S. 613 also prohibits

certain acts affecting interstate commerce

without regard to "extortion" or "wrongful

taking." See 4(a) sub-paragraphs (1) and

(2), which relate to acts involving threats

of death and property damage of a certain

dollar amount. Subsection (c)(2) then

states:

"Nothing in this section shall be

construed as indicating an intent on

the part of the Congress--

"(2) to exclude federal juris-

diction over the offenses defined

in this section on the ground that

the conduct is also a violation of

state or local law, or that the

conduct, if it involves force,

violence, or fear thereof, takes

place in the course of a legitimate

business or labor dispute or in

pursuit of a legitimate business

or labor objective."

S. 613 is thus a clear indication of a

belief on the part of Congress (and perhaps

the Justice Department) that acts such as are

charged in this case are not covered by ex-

isting Federal criminal laws.

As was stated in the dissenting

Opinion in the Court below:

"More serious, however, is the

majority's failure to appreciate

that the Enmons decision rests not

solely on the interpretation of

the particular statute involved

there, but on a broad historically

justified concern that the federal

government not intrude into the

business of policing the orderly

conduct of legitimate labor dis-

putes. Punishing lawlessness

perpetrated during labor disputes

has historically been and should

continue to be the province of

the States and their law enforce-

ment authorities."

Thordarson, supra, 646 F.2d at

Judge Pregerson, dissenting)

(Appendix A, pp 71-72)

The majority opinion in the Court

below itself recognizes that Enmons cannot

be read as based solely on the language

and legislative history of the Hobbs Act.

After noting that the Travel Act includes

///

extortion within its definition of “unlaw-

ful activity", and that R.I.C.0. includes

extortion chargeable under State law within

its definition of "racketeering activity",

the majority states:

"In light of the emphasis in Enmons

on the special characteristics of

the crime of extortion. .. its

holding delimiting the scope of the

Hobbs Act arguably should be extended

to similarly limit the scope of the

RICO and Travel Act extortion pro-

visions. That issue, however, is not

before us at this time."

Thordarson, supra, 646 ».2d at 1327-

n. (Appendix A, pp 41-42)

Thus, the application of R.I.C.0O. and

the Travel Act to labor disputes creates

the same risk as the application of the

Hobbs Act to such disputes. Id at 1338

and n. 1 (Judge Pregerson, dissenting).

(Appendix A, pp 71, 72-73) Acts done in

furtherance of legitimate labor goals which

are extortionate in nature as well as acts

of vandalism incidental to legitimate

labor disputes will be transformed into

Federal felonies. Neither the language

nor the legislative history of the statutes

in question contemplates such a result.

2. Reference to Related Statutory

Schemes Reinforces the Conclusion

that Congress Did Not Intend

These Statutes To Be Used in the

Context of Legitimate Labor Dis-

putes and That the Prosecution

of Such Acts Has Been Left to the

States.

In a Travel Act case decided before

Enmons, the Court recognized the rule of

statutory construction that reference to

related statutory schemes is proper in re-

solving doubts as to the meaning of a stat-

ute. Erlenbaugh v. United States, supra,

409 U.S. at 243-245. The statutes charged

in the present case and the Hobbs Act per-

tain to the same subject and should there-

fore be construed "as if they were one law”

in resolving the issues presented in this

case. Id. at 243. As further noted in

Erlenbaugh, the principle necessarily as-

sumes that:

“[W]henever Congress passes a new

statute, it acts aware of all pre-

vious statutes on the same subject.

[citations omitted].” 409 U.S.

at 244.

The Hobbs Act, passed in 1948, and the

Travel Act, passed in 1961, are both found

in Chapter 95 of Title 18, “Racketeering.”

Even the Government states that they are

part of the same “legislative package.”

(Appellant's Opening Brief, Ninth Circuit,

p17, n. 22) The R.I.C.O. statute, passed

in 1970, is found in Chapter 96 of Title

18, “Racketeer Influenced and Corrupt

Organizations." These related statutes

all pertain to the same subject matter.

Moreover, 18 U.S.C. §844(i), Damage by Ex-

plosives to Vehicles Used in Interstate

Commerce, was enacted along with the

R.I.C.0. statute as part of the Organ-

ized Crime Control Act of 1970, Public

Law 91-452. All the statutes are part of

an overall congressional attempt to combat

racketeering activity and organized crime.

United States v. Turkette, supra, 101 S.

Ct. at 2531-2534; United States v. Thor-

darson, supra, 646 F.2d at 1328.

The legislative and judicial history

of the Hobbs Act, as discussed in Enmons,

supra, 410 U.S. at 401-408, and United

States v. Caldes, supra, 457 F.2d at 76-

77, further demonstrates that Congress did

not intend these statutes to be applied to

acts committed in connection with legi-

timate labor disputes.

In the Caldes case, which was decided

before and cited with approval in Enmons,

the Ninth Circuit concluded that the Hobbs

Act:

". . . Was not intended to reach low

level violence committed in con-

nection with bona fide labor disputes

between employers and employees."

Id. at 75.

As in the present case, the defendants

in Caldes were union officials attempting to

secure a collective bargaining agreement.

During protracted negotiations with a linen

supply company, the defendants purportedly

damaged property belonging to the company.

As here, the violence was intended to

pressure the company into an agreement.

Ia.

The Ninth Circuit examined the history

of the Hobbs Act, noting that it was en-

ected in reaction to the decision in

United States v. Local 807, 315 U.S. 521

(1942). In Local 807, the Supreme Court

held that Section 2(a) of the Anti-

Racketeering Act of 1934 (the “Copeland

Act") did not prohibit the demanding of

payment for unwanted, unnecessary or fic-

titious services by union members.

Id. at 75-76.

In a reaction to that decision, Con-

gress passed the Hobbs Act, which elimi-

nated Section 2(a) of the Copeland Act.

By so doing, however:

"Congress did not intend to eli-

minate traditional labor or union

activity, albeit militant, which has

as its object legitimate ends. The

exclusion was not meant to provide

impunity to the terroristic and ex-

tortionate activities of union

members, but to protect union acti-

vity directed towards legitimate

labor goals even when militantly pur-

sued." Id at 76. [emphasis added]

The Ninth Circuit noted that labor

activity may be proscribed under the Hobbs

Act, if it involves circumstances where

the services offered by the union are im-

posed, unwanted and superfluous or ficti-

tious. Id.at 77. On the other hand, the

Court stated that:

"Labor unions must be able to active-

ly and rigorously pursue the interest

of their members at all times, pro-

vided their activity is directed

toward legitimate ends."

Id. at 78.

In Enmons, supra, this Court affirmed

the District Court's dismissal of the

Indictment for failure to state a Federal

offense, holding that the Act did not apply

to the use of force to achieve legitimate

labor ends. 410 U.S. at 401. The Court

noted that no reported case had upheld the

theory that the Hobbs Act proscribed the

use of force to achieve legitimate col-

lective-bargaining demands. Id,at 408.

As the Court stated:

"Indeed not until the indictments

were returned in 1970 in this and

several other cases has the Govern-

ment even sought to prosecute under

the Hobbs Act actual or threatened

violence employed to secure a union

contract ‘calling for higher wages

and other monetary benefits.' [foot-

note omitted] Yet, throughout this

period, the Nation has witnessed

countless economic strikes, often

unfortunately punctuated by violence.

It is unlikely that if Congress had

indeed wrought such a major expansion

of federal criminal jurisdiction in

enacting the Hobbs Act, its action

would have so long passed unobserved."

Id.at 409-410.

Those comments apply with equal force to

the statutes employed in the present case.

By attempting to circumvept the dictates of

Enmons, the Government seeks to bring to

Federal Court the numerous instances of

strike-related violence which are a part of

many labor disputes. It was not the intent

of Congress to have such matters litigated

in a criminal context in Federal Court.

This attempt to expand Federal criminal

jurisdiction should be rejected.

CONCLUSION

Based upon the foregoing reasons,

it is respectfully submitted that a

Writ of Certiorari should issue to review

the Judgment and Opinion of the United

States Court of Appeals for the Ninth

Circuit.

Respectfully submitted,

STILZ, BOYD, LEVINE &

HANDZLIK

Attorneys for Petitioners

- A. &

\, he

APPENDIX A

FILLED

May 20, 1981

RICHARD H. DEANE

Clerk, U.S. Court

of Appeals

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

Vv.

STEN THORDARSON,

MARTIN FRY,

CRAIG DUNBAR,

MARTIN SALGADO, and

CHARLES WISE,

Defendants~-Appellees.

ee eee ee ee ee ee ee

No. 80-1239

D.C. CR 79-946-RMT

OPINION

Appeal from the United States District

Court for the Central District of

. California

Robert M. Takasugi, United States

District Judge, Presiding

Argued and Submitted September 17, 1980

Before: FERGUSON, PREGERSON, and NORRIS,

Circuit Judges

NORRIS, Circuit Judge:

The government appeals from a district

court order dismissing a ten-count indict-

ment charging defendants with violating

18 U.S.C. §§ 1962(d), 1952, and 844(i),

and 29 U.S.C. § 50l(c). This court has

jurisdiction under 18 U.S.C. § 3731. We

reverse.

I. Facts

In 1978, the employees of the Redman

Moving and Storage Company of Thousand

Oaks, California, elected Teamsters Local

186 as their bargaining agent. When Red-

man refused to recognize the union, Local

186, aided by Teamsters Local 389, called

a strike against the company. During the

time of the strike, Redman trucks in Cali-

fornia, Arizona and Connecticut were

damaged or destroyed.

In November of 1979, a ten-count in-

dictment was filed in the United States

District Court for the Central District

of California, alleging that the defen-

dants--all officers or employees of Local

186 or Local 389--conspired to destroy

Redman trucks in an effort to coerce Red-

man into recognizing the Teamsters.

The indictment charges defendants

with the use of explosives to damage ve-

hicles used in interstate commerce in

violation of 18 U.S.C. § 844(i)} (Counts

2 and 3); travel in interstate commerce

to commit arson in violation of the

Travel Act, 18 U.S.C. § 19527

(Counts 4

and 5); conversion of union funds in

violation of 29 U.S.C. § 501(c)> (Counts

6 through 10); and conspiracy to conduct

the affairs of an enterprise through a

pattern of racketeering activity in

violation of the Racketeer Influenced

and Corrupt Organization Act (RICO), 18

U.S.C. § 1962(a) 4 (Count 1).° The al-

leged pattern of racketeering included

the conduct charged substantively in

Counts 2 through 10.

The district court dismissed all ten

counts of the indictment. The RICO, Travel

Act and explosives charges (Counts 1-5)

were dismissed on the authority of United

States v. Enmons, 410 U.S. 396 (1973),

which the district court read as "preclud-

{ing] federal prosecution for violent acti-

vity which occurs during the course of a

legitimate labor dispute” absent specific

authorization from Congress. United

States v. Thordarson, 487 F.Supp. 991, 995

(C.D. Cal. 1980). The conversion of union

funds charges were dismissed for failure

to allege essential elements of the offense.

II. Counts 1 through 5: United States v.

Enmons

In Enmons, the defendants were strik-

ing union members charged with using vio-

lence to obtain higher wages and other

employment benefits in violation of the

Hobbs Act, 18 U.S.C. § 1951. The issue

was whether acts of violence committed

during a lawful strike for the purpose of

inducing an employer's agreement to legi-

timate collective bargaining demands con-

stituted extortion, defined by the Hobbs

Act as "the obtaining of property from

another, with his consent, induced by

wrongful use of actual or threatened force,

violence or fear." 18 U.S.C. § 1951(b)

(2) .°

In interpreting the statute, Justice

Stewart, writing for the majority, focused

on the word "wrongful," and reasoned that

because it would be redundant to speak of

"wrongful violence" or “wrongful force,"

Congress must have intended “wrongful” to

limit the statute's coverage "to those in-

stances where the obtaining of the proper-

ty would itself be ‘wrongful’ because the

extortionist has no lawful claim to the

property." 410 U.S. at 400. Accordingly,

the Court held that violence to achieve

legitimate union objectives is not within

the Hobbs Act's prohibition because there

is no "wrongful" taking of the employer's

property when union members receive wages

and benefits in exchange for genuine ser-

vices bargained for by the employer.

The Court found support in the legis-

lative history of the Hobbs Act for its

interpretation of "extortion". The pre-

decessor of the Act, § 2 of the Anti-

Racketeering Act of 1934, 48 Stat. 979,

proscribed the exaction of valuable con-

sideration by force, violence or coercion,

but expressly excepted "the payment of

wages by a bona-fide employer to a bona-

fide employee." In enacting the Hobbs

Act, Congress eliminated this express

wage exception in response to the Supreme

Court's decision in United States v. Local

807, 315 U.S. 521 (1942). In that case,

the Court had held that the wage exception

immunized from prosecution under the Anti-

Racketeering Act New York City truck drivers

who "by violence and threats exacted pay-

ments for themselves from out-of-town

truckers in return for the unwanted and

superfluous service of driving ~ut-of-town

trucks to and from the city." Enmons, 410

U.S. at 402. The Enmons Court, however,

despite Congress’ repeal of the express

wage exception in enacting the Hobbs Act,

read the legislative history as evidencing

an intent to preserve an exemption for

violence in pursuit of legitimate collec-

tive bargaining objectives. Id at 404-07.

In particular, the Court pointed to assu-

rances given during the floor debate that

the Hobbs Act would not interfere with

legitimate labor activity and that a sim-

ple assault during a strike would not be-

come a federal crime under the Act. 1a.’

The Court noted that the broad inter-

pretation of extortion advanced by the

government would reach "all overtly coer-

cive conduct in the course of an economic

strike . .. [with the result that] [t]he

worker who threw a punch on a picket line

or the striker who deflated the tires on

his employer's truck would be subject to

a Hobbs Act prosecution and the possibi-

lity of twenty years’ imprisonment and a

$10,000 fine." Id. at 410. In rejecting

this reading of the statute, the Court

concluded:

{I]t would require statutory lan-

guage much more explicit than that

before us here to lead to the con-

clusion that Congress intended to

put the Federal Government in the

business of policing the orderly

conduct of strikes. Neither the

language of the Hobbs Act nor its

legislative history can justify

the conclusion that Congress intended

to work such an extraordinary change

in federal labor law or such an un-

precedented incursion into the

criminal jurisdiction of the United

States.

Id. at 411.

The defendants contend that the effect

of Enmons is to place violence during the

course of legitimate strike activity be-

yond the reach of all federal criminal laws.

We cannot agree. There is no basis in the

Court's decision or its underlying rati-

onale for the creation of an "Enmons doc-

trine" of immunity applicable to all fede-

ral criminal statutes.®

We read Enmons

as holding only that the use of violence

to secure legitimate collective bargain-

ing objectives is beyond the reach of the

Hobbs Act.

The Court's holding in Enmons turned

on its reading of the specific language of

§ 1951--particularly the term "wrongful"

in the definition of extortion--and its

reading of the Hobbs Act's singular leg-

islative history. By contrast, the de-

fendants have not cited, and we have not

found, anything in the statutory language

or the legislative history of the Travel

Act, RICO or § 844 of Title 18 which indi-

cates that Congress intended to exclude

from the reach of those statutes violence

in the pursuit of legitimate union ob-

jectives. Indeed, our reading of those

statutes suggests that Congress intended

no such exemption. ?

The Travel Act, on its face, applies

to "[w]hoever travels in interstate ...

commerce or uses any facility in inter-

state commerce .. . with intent to...

promote, manage, establish, carry on...

arson in violation of the laws of the State

in which committed or of the United States."

18 U.S.C. § 1952. Section 844(i) of Title

18 covers "[(w]hoever maliciously damages

or destroys, or attempts to damage or de-

stroy, by means of explosive, any...

vehicle . . . used in interstate commerce

- « »« Or in any activity affecting inter-

state .. . commerce." RICO provides that

it shall be unlawful to conspire "to conduct

Or participate .. . in the conduct [of an]

enterprise's affairs through a pattern of

racketeering activity ... ." 18 U.S.C.

§ 1962(c),(d). Racketeering activity in-

cludes "any act or threat involving...

arson . . . which is chargeable under state

law and punishable by imprisonment for more

than one year; .. . any act which is in-

dictable under title 18, United States Code

» « « Section 1952 .. . [and] any act

which is indictable under title 29, United

States Code, .. . section 50l(c)." 18

U.S.C. § 1961(1).

These statutes are written in general

terms and make criminal the prescribed con-

duct without regard to the status or ulti-

mate objectives of the person engaging in

it.?° See, e.g., United States v. Roselli,

432 F.2d 879, 885 (9th Cir. 1970), cert.

denied, 401 U.S. 924 (1971) (Travel Act);

United States v. Perrin, 580 F.2d 730, 733

(Sth Cir. 1978), aff'd, 444 U.S. 37 (1979)

(Travel Act); United States v. Campanale,

518 F.2d 352, 363-64 (9th Cir. 1975),

cert. denied, 423 U.S. 1050 (1976) (RICO);

United States v. Field, 432 F.Supp. 55,

57-58 (S.D.N.Y. 1977), aff'd, 578 F.2d

1371 (2d Cir. 1978) (RICO). We consider it

improbable that Congress, having determined

that arson and the willful iisuse of ex-

plosives constituted a sufficiently grave

threat to persons and property to warrant

the imposition of federal criminal sancti-

ons, intended to make the imposition of

such sanctions depend upon whether the

person who willfully causes the fire or ex-

plosion did so for his own personal gain or

for the gain of members of his union.

Nor do we consider the policy arguments

advanced in Enmons applicable to this case.

In Enmons, the Court focused on the special

characteristics of the crime of extortion

which embraces any act or threat of violence,

however minor, used to obtain the property

of another. The underlying concern was that

to apply a federal extortion statute in the

context of the collective bargaining pro-

cess would transform minor acts of labor

violence punishable by state law into

federal felonies, thus placing the federal

government in the business of policing the

routine conduct of strike activity.

There is little, if any, risk that

the crimes charged in this indictment, if

applied to labor violence, would involve

the federal government in policing routine

strike activity. The destruction of ve-

hicles used in interstate commerce by

means of explosives and travel in inter-

state commerce to commit arson are hardly

the sorts of minor picket line violence

that the Enmons Court feared would be

transformed into federal crimes under the

Hobbs Act.

Moreover, there is no basis for the

contention that the indictment in this case

constitutes an unintended incursion into

state criminal jurisdiction. Both RICO and

the Travel Act explicitly prohibit conduct

also chargeable under state laws of arson.

18 U.S.C. § 1961(1); 18 U.S.C. §1952(b) (2).

In addition, the legislative history of 18

U.S.C. § 844 clearly shows that it was en-

acted in response to the perceived "absence

of any effective state or local controls"

over explosives. H.R. Rep. No. 91-1549,

9lst Cong. 2d Sess., reprinted in [1970]

U.S. Code Cong. & Ad. News at 4007, 4013.

See also United States v. Dawson, 467 F.2d

668, 671-73 (8th Cir. 1971), cert. denied,

410 U.S. 956 (1972). Thus, to the extent

that this indictment, by reaching conduct

also punishable under state law, represents

an incursion into state criminal juris-

diction, it was an incursion plainly and

deliberately undertaken by Congress.?+

To uphold the dismissal of Counts l

through 5, we would be required to create

an exemption for labor violence that would

necessarily be applicable to all federal

criminal statutes. As counsel for the

defendants candidly admitted during oral

argument, if an "Enmons doctrine" were to

immunize a union official from federal pro-

secution under the Travel Act or § 844(i),

it would, in all logic, immunize from

federal prosecution a union official--or,

indeed, an employer--desperate enough to

resort to kidnapping to achieve collect-

ive bargaining objectives. To carve out

a narrow exemption from a federal ex-

tortion statute on the basis of its

language and legislative history, as the

Supreme Court did in Enmons, is one thing;

to exempt a wide range of violent be-

havior from all federal criminal liabi-

lity, despite plain language that pro-

hibits such conduct, is quite another.

The defendants nevertheless contend

that the federal regulation of labor union

activities through a comprehensive scheme

of predominantly civil remedies evidences

a Congressional intent to exempt labor

violence from federal criminal prosecu-

tion. This argument is without merit.

The federal labor laws do not purport to

govern all unlawful conduct engaged in by

union members and officials. Thus, while

acts of violence directed at an employer

during a strike may be found, in some cir-

cumstances, to restrain or coerce employees

in the exercise of their rights guaranteed

under § 7 of the National Labor Relations

Act, see e.g., NLRB v. Union Nacional de

Trabajadores, 540 F.2d 1 (lst Cir. 1976),

cert. denied, 429 U.S. 1039 (1977); NLRB v.

United Mine Workers, 429 F.2d 141, 147-48

(3rd Cir. 1970), they are not in and of

themselves unfair labor practices. Cf.

Linn v. Plant Guard Workers, 383 U.S. 53,

63 (1966) (defamation arising during a

labor dispute is not an unfair labor prac-

tice absent showing that it interfered

with exercise of specific rights guaran-

teed under the National Labor Relations

Act). Moreover, even to the extent that

federal labor laws do reach union violence

to achieve collective bargaining object-

ives, it is clear that they do not provide

the exclusive remedy for such violence.

See Linn v. Plant Guard Workers, supra;

Auto Workers v. Wisconsin Board, 35l U.S.

266, 272-73 (1956). Defendants concede,

for example, that arson and the destruc-

tion of property by means of explosives may

be prosecuted under state criminal laws

whether or not those acts also constitute

unfair labor practices. !? Nothing in the

language or legislative history of federal

labor legislation suggests that federal

criminal statutes--enacted to supplement

state criminal sanctions--should not simi-

larly be available to punish union members

and officials who try to achieve collect-

ive bargaining goals by means of the kind

of violence charged in the indictment be-

fore us.

The defendants’ reliance on United

States v. DeLaurentis, 491 F.2d 208 (2d

Cir. 1974), is also misplaced. In

DeLaurentis, the federal government invoked

an 1870 civil rights statute to prosecute

union officials for threatening and inti-

midating union members in violation of

§ 7 of the National Labor Relations Act,

which gives an employee the right to re-

frain from engaging in concerted union acti-

vities. In reversing the conviction, the

Second Circuit held that Congress did not

intend § 7 violations to be enforced under

the 1870 Civil Rights Act, 18 U.S.C.

s 241,14

but rather intended such violations

to be enforced by the procedures and sanc-

tions provided by the National Labor

Relations Act. In this case, the undispu-

ted availability of state criminal law

demonstrates that the procedures and civil

sanctions set forth in the National Labor

Relations Act were not intended to be the

exclusive means of regulating violence to

achieve collective bargaining objectives.

Moreover, in contrast to the broad language

of the 1870 Civil Rights Act prohibiting

persons from conspiring to "injure, op-

press, threaten or intimidate any citizen

in the free exercise or enjoyment of any

right or privilege secured by him by the

- « »« laws of the United States," the

language of the statutes involved in this

appeal plainly and specifically reaches

the acts of violence alleged in the in-

dictment.

We therefore reverse the dismissal of

Counts 1 through 5 of the indictment.

III. Counts 6 through 10: the § 501(c)

Violations

The government also appeals from the

district court's dismissal of Counts 6

through 10 of the indictment which charge

the defendant with using union funds to

destroy Redman trucks in violation of

§ 50l(c) of the Landrum-Griffith Act, 29

U.S.C. § 501(c). Section 50l1(c) prohibits

a union officer or employee from convert-

ing union funds to his own use or the use

of another.?°

The district court dismissed Counts 6

through 10 apparently for failure to allege

essential elements of the offense. See

United States v. Thordarson, 487 F.Supp.

991, 995-99 (C.D. Cal. 1980). The district

court held that the essential elements of

§ 501(c) include (1) a fraudulent intent to

deprive the union of its funds and (2)

either a lack of union authorization or an

absence of a good faith belief in benefit

to the union. Id. at 996-97. Not finding

these elements alleged in the indictment, /®

the district court dismissed. Id. at 998-

39.

The government contends that the use

of union funds for an illegal purpose con-

stitutes a per se violation of § 501l(c)

under United States v. Boyle , 482 F.2d

755 (D.C. Cir.), cert. denied, 414 U.S.

1076 (1973). This court, like the court

below, declines to follow Boyle and the per

se rule it espouses. We nevertheless con-

clude that the district court erred in dis-

missing the indictment for failure to allege

the essential elements of a § 50l(c) of-

fense. We hold that neither a lack of union

authorization nor an absence of good faith

belief in union benefit need be alleged in

an indictment as essential elements of

§ 50l1(c), and that the indictment in this

case adequately alleged fraudulent intent.

We reverse, therefore, the district court's

dismissal of Counts 6 through 10.

A. United States v. Boyle

The defendant in Boyle was convicted

of violating § 50l(c) by using union funds

to make campaign contributions. The con-

tributions were illegal under 18 U.S.C.

§ 610 (repealed Pub. L. No. 94-283, Title

II, § 20l(a), 90 Stat. 496 (1976)) which

prohibited labor unions from contributing

money to candidates for federal office.

On appeal, the defendant challenged his

conviction on two grounds. First, he con-

tended that to convict under § 50l(c) the

jury must find either that the expenditure

was made without union authorization or

that the union derived no benefit from the

expenditure. Second, he argued that § 501

illegal or ultra vires expenditures. The

Court of Appeals for the District of Colum-

bia sejested both contentions.

The D.C. Circuit noted that "[nJo

officer or union governing body could in

all logic believe that a transfer for a

criminal purpose was for a legitimate union

purpose, was authorized by the union con-

stitution or by-laws, or was for the

union's benefit." United States v. Boyle,

482 F.2d at 765. Nor was there any "hint

in either the statute or its legislative

history that indicates a Congressional in-

tent to excuse from the ambit of § 50l(c)

transfers for a criminal purpose." Id.

The Court thus concluded "[i]Jf the use to

which the money is knowingly transferred

is unlawful, then the transfer constitutes

a violation of § 50l(c)." Id. at 764.

In this case, the union funds were

allegedly used for the purpose of financ-

ing the destruction of Redman trucks. The

government argues that since the expendi-

ture was for an unlawful purpose the

indictment is sufficient to state a § 501

however, like the district court, find

Boyle unpersuasive.?’

Section 50l(c) states a "“larceny-type”

offense. United States v. Marolda, 615

F.2d 867, 872-73 (9th Cir. 1980) (Judge

Larson, concurring); United States v.

Silverman, 430 F.2d 106, 126-27 (2d

Cir.), modified on other grounds, 439 F.2d

1198 (1970), cert. denied, 402 U.S. 953

(1971). Although the scope of criminal

liability under § 50l(c) extends beyond the

common law offense of larceny and the old

statutory crime of embezzlement, the es-

sence of the § 50l(c) crime, like the older

crimes of embezzlement and larceny is the

"tak[ing] [of] another's property .

knowing that the other person would not have

wanted that to be done.” United States v.

Silverman, 430 F.2d at 126-127; United

States v. Andreen, 628 F.2d at 1241. Thus,

it is well established that proof of a

specific criminal intent to deprive the

union of its funds is required to make out

a § 50l(c) violation.

The Boyle court, however, would in

effect irrebuttably presume the requisite

criminal intent where union funds are used

for a criminal purpose. The effect of such

an approach would be to impermissibly con-

vert a “larceny-type" statute requiring a

fraudulent intent to deprive the union of

its funds into a statute subjecting indivi-

dual officers and employees to criminal

liability for union expenditures made for

prohibited purposes. /®

In addition, such an

interpretation would permit a conviction

under § 50l1(c) without a finding by the

trier of fact that the defendant has "taken

another person's property . . . knowing that

the other person would not have wanted that

to be done." United States v. Silverman,

430 F.2d at 126-127. We conclude that such

an approach improperly presumes an essenti-

al element of a § 50l(c) offense. Accord-

ingly, we decline to follow Boyle.

B. The Essential Elements of § 501l(c)

Since it is not disputed that fraudu-

lent intent is an element of §50l(c), we

must consider whether lack of authorization

and lack of good faith belief in union bene-

fit are also elements of § 50l(c). In two

recent cases this circuit addressed this

issue without totally resolving it. United

States v. Andreen, 628 F.2d 1236 (9th Cir.

1980); United States v. Marolda, 615 F.2d

867, 869-70 (9th Cir. 1980).

In Marolda, the defendant was convicted

of violating § 50l(c) after the court's

instructions to the jury failed to mention

lack of authorization or lack of union bene-

fit. The court reversed the conviction

because of a prejudicial variance between

the jury instructions and the language of

the indictment, which had explicitly alleged

both lack of authorization and lack of union

benefit. Id. at 870. Thus the court was

not required to reach the issue whether

either or both are essential elements of

§ 50l(c). Judge Larson, however, ina

well-reasoned concurring opinion, addressed

the issue and concluded that neither lack

of authorization nor lack of union benefit

is an essential element. Id. at 872.

Rather, he wrote, both bear on the issue

of criminal intent.

In Andreen, the court held that if the

government established lack of authoriza-

tion, it need not prove lack of union

benefit.19 628 F.2d at 1242-43. The court

expressly left open the issue now before us

--whether the government must allege and

prove lack of union benefit if it fails to

establish lack of authorization--although

in dictum it approved the position taken by

Judge Larson in his concurring opinion in

Marolda. Andreen, 628 F.2d at 1242. We

also agree with Judge Larson and now hold

that neither lack of authorization nor lack

of good faith belief in union benefit is an

essential element of § 50l(c). Neither,

therefore, need be alleged in the indictment,

even though we recognize that evidence of

either or both is likely to be admissible at

trial as bearing on the issue of criminal

intent to convert union funds to the defen-

dant's own use or the use of another.

Section 50l(c) is one of a number of

statutes in which Congress has extended

federal jurisdiction to cover common law

theft crimes. As noted by Judge Friendly in

United States v. Silverman, 430 F.2d at 126,

the language of § 50l(c) resembles the

language of such "“larceny-type" statutes

as 18 U.S.C. §§ 641, 645, 655-61.7° In

determining the elements of § 50l(c), we

are strongly influenced by the doctrine of

these other “larceny-type" statutes.

Judge Larson, in his concurrence in

Marolda, suggests that Congress, in enact-

ing § 50l(c), “was merely transmuting common

law theft crimes involving union funds and

committed by union officers or employees

into Federal crimes." 615 F.2d at 872.

The Supreme Court has stated in dictum that

18 U.S.C. § 641 was intended to combine the

common law theft crimes and also outlaw

acts which might fall into the “gaps or

crevices" separating those crimes.

Morissette v. United States, 342 U.S. 246,

271 (1952). As we read the legislative

history of § 50l(c), Congress' intent in

passing it was the same as with § 641.71

We see no evidence that Congress, in en-

acting § 50l(c), intended to add any new

elements to the common law theft offenses

except those necessary to show federal

jurisdiction and subject matter: that the

accused is (1) an official or employee

(2) of a labor organization (3) involved

in interstate commerce, and that (4) the

funds belong to the labor organization.

United States v. Bane, 583 F.2d 832, 836

n.9 (6th Cir. 1978), cert. denied, 439

U.S. 1127 (1979) (identifying the juris-

dictional elements of § 50l(c)); Silverman,

430 F.2d at 11l (same). Instead, as stated

in Morissette, supra, Congress intended to

simplify some of the technical requirements

of the common law crimes.

We therefore see no reason to add lack

of authorization or lack of good faith be-

lief in union benefit to the list of

essential elements of § 50l(c). Neither of

the two has a counterpart in the elements

of the common law theft crimes or of the

other federal theft statutes. **

"Congress

subjected union officers or employees to

the same test of criminal liability as

government employees, bank officers and

the like--not to a lower one." Silverman,

430 F.2d at 127. The two elements which

the government must allege and prove, in

addition to jurisdictional elements, in

making out a § 50l(c) violation, are the

same as those announced by the Supreme Court

for § 641: fraudulent intent and conversion

to the defendant's own use or the use of

another. Morissette, 342 U.S. at 271-72.73

See also United States v. Durnin, 632 F.2d

1297, 1300 (5th Cir. 1980).74

We do think that lack of authorization,

lack of union benefit, and the defendant's

failure to believe that there is authoriza-

tion or union benefit, all are likely to

bear on the essential element of fraudulent

intent. See Andreen. 628 F.2d at 1242-43;

Marolda, 615 F.2d at 873 (Larson, J., con-

curring). In a particular case, these

factors may be crucial in determining the

defendant's intent. In such a case, a jury

instruction concerning them is likely to

be appropriate.

For example, in this case, appellants

are free to argue that they had no criminal

intent because they believed that blowing

up trucks conferred a benefit on the union

and that the union, were it able to speak,

would have wanted its money spent for such

an unlawful purpose. The government can

argue the contrary and in so doing is free

to introduce evidence that destroying the

trucks was unauthorized and did not work to

the benefit of the union members as a whole.

The trier of fact will then have to deter-

mine whether the government has proved its

case that the defendants have "'taken

another person's property .. . knowing that

the other person would not have wanted that

to be done,'" Andreen, 628 F.2d at 1241,

quoting Silverman, 430 F.2d at 126-27, and

that “the ‘union’ presumably would have

objected if it had been able to speak free-

ly." Silverman, 430 F.2d at 127.

In conclusion, we hold that the indict-

ment neec merely allege fraudulent intent,

and need not allege lack of authorization

nor lack of belief in union benefit.

C. The Sufficiency of the Indictment

The district court in this case ap-

parently held that the indictment was in-

sufficient not only because it failed to

set forth either lack of authorization or

lack of good faith belief in union benefit,

but also because it failed to adequately

allege fraudulent inte:.t. Upon review of

the indictment, however, we find that

fraudulent intent is adequately alleged.

Counts 6, 9, and 10 of the indictment

allege that the defendants "did embezzle,

steal, and unlawfully and wilfully ab-

stract and convert to their own use and

the use of another" the funds of the union.

Counts 7 and 8 of the indictment allege

that the defendants "did embezzle, steal

and unlawfully convert to their own use

and the use of another" the funds of the

union. Language just like that in Counts 6,

9 and 10 has been held to constitute a

sufficient allegation of criminal intent

under § 50l(c). See Colella v. United

States, 360 F.2d 792, 798-99 (lst Cir.),

cert. denied, 385 U.S. 829 (1966); Doyle

v. United States, 318 F.2d 419, 420-22

(8th Cir. 1963). The word "wilfully,"

read in the context of the statutory lan-

guage used in the indictment as a whole,

is sufficient to allege the requisite cri-

minal intent. See United States v.

Illinois Central Railroad Co., 303 U.S. 239,

242 (1938) ("In statutes denouncing offenses

involving turpitude, ‘wilfully’ is generally

used to mean with evil purpose, criminal

intent or the like") .?° The language in

Counts 7 and 8, though less complete, ade- |

quately informs the defendants of the

charges against which they must defend. See

Hamling v. United States, 418 U.S. 87, 117

(1974).

The judgment is reversed and the cause

remanded for further proceedings consistent

with this opinion.

FOOTNOTES

1. 18 U.S.C. § 844(i) provides that:

Whoever maliciously damages or

destroys, or attempts to damage or

destroy, by means of an explosive,

any building, vehicle, or other real

or personal property used in inter-

state or foreign commerce or in any

activity affecting interstate or

foreign commerce shall be imprisoned

e e « OF fined... or both.

2. 18 U.S.C. § 1952 provides in pertinent

part that:

(a) Whoever travels in inter-

state or foreign commerce, or uses any

facility in interstate or foreign com-

merce, including the mail, with

intent to . . . (2) commit any crime

of violence to further any unlawful

activity; or (3) otherwise promote,

manage establish, carry on, or facili-

tate the promotion, management,

establishment, or carrying on, of any

unlawful activity, and thereafter

performs or attempts to perform any of

the acts specified in subparagraphs (1),

(2), and (3), shall be fined... or

imprisoned . . . or both.

(b) As used in this section “un-

lawful activity” means (1) any business

enterprise involving gambling, liquor

on which the Federal excise tax has not

been paid, narcotics, or prostitution

offenses in violation of the laws of the

State in which they are committed or of

the United States, or (2) extortion,

bribery, or arson in violation of the

laws of the State in which committed or

of the United States.

Section 50l(c) provides that:

converts to his own use, or the use of

another, any of the moneys, funds,

securities, property, or other assets

of a labor organization of which he is

an officer, or by which he is employed,

directly or indirectly, shall be fined

- « « OF imprisoned .. . or both.

Section 1961(d) provides:

It shall be unlawful for any person

to conspire to violate any of the pro-

visions of subsections (a), (b), or

Section 1962(c) provides:

It shall be unlawful for any person

employed by or associated with any

enterprise engaged in, or the activities

of which affect, interstate or foreign

commerce, to conduct or participate,

directly or indirectly, in the conduct

of such enterpr‘se's affairs through a

pattern of racketwering activity ....

An “enterprise” as defined by § 1961(4) in-

cludes:

any individual, partnership, corpora-

tion, association, or other legal

entity, and any union or group of in-

dividuals associated in fact although

not a legal entity.

A “pattern of racketeering activity" as

defined by § 1961(5):

requires at least two acts of racket-

eering activity, one of which oc-

curred after the effective date of

this chapter and the last of which

occurred within ten years (excluding

any period of imprisonment) after

the commission of a prior act of

racketeering activity.

"Racketeering activity" as defined by

§ 1961(1) includes:

(A) any act or threat involving mur-

der, kidnaping, gambling, arson,

robbery, bribery, extortion, or

dealing in narcotic or other

dangerous drugs, which is charge-

able under State law and punishable

by imprisonment for more than one

year; (B) any act which is indict-

able under any of the following pro-

visions of title 18, United States

Code: . . . Section 1952 (relating to

racketeering) . . . and (C) any act

which is indictable under title 29,

United States Code, .. . section

50l(c) (relating to embezzlement from

union funds).

All defendants are charged with vio-

lating the Travel Act, RICO and 28 U.S.C.

§ 50l(c). Only defendants Fry and Salgado

are named in the explosives counts.

18 U.S.C. § 1951 provides in pertinent

part:

(a) Whoever in any way or degree

obstructs, delays, or affects commerce

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 physi-

cal violence to any person or property

in furtherance of a plan or purpose to

do anything in violation of this sec-

tion shall be fined . .. or impri-

soned .. . 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.

7. Justice Douglas, writing for the four

dissenters in Enmons, contended that by

repealing the wage exception in the Anti-

Racketeering Act and by rejecting similar

amendments, Congress intended to include

within the ambit of the Hobbs Act the use

of threats and violence to achieve legi-

timate, as well as illegitimate, labor

objectives. 410 U.S. at 413-19.

8. We are unaware of any other case in

which a criminal defendant has attempted

to assert United States v. Enmons as a

defense to a prosecution under a statute

other than the Hobbs Act. Cf. United

States v. Parker, 586 F.2d 422 (5th Cir.

1978), cert. denied, 441 U.S. 962 (1979)

(affirming without discussion of Enmons

a conviction under § 844(i) on facts

virtually identical to the case sub

judice); United States v. Love, 482 F.

2d 213 (5th Cir.), cert. denied, 414

U.S. 1026 (1973) (same); Langel v.

United States, 451 F.2d 957 (8th Cir.

1971) (affirming without discussion of

Enmons a conviction of union members for

possessing a prohibited firearm--a bomb

--in violation of 26 U.S.C. § 5861(d) in

connection with the destruction of an

employer's truck during a bona fide labor

dispute).

9. The Travel Act includes within its de-

finition of unlawful activity “extortion .

- « in violation of the laws of the State

in which committed or of the United

States." 18 U.S.C. § 1952(b)(2). Extor-

tion chargeable under state law is also

included in the definition of "racketeer-

ing activity" provided by RICO. In light

of the emphasis in Enmons on the special

characteristics of the crime of extortion,

see discussion infra, its holding deli-

miting the scope of the Hobbs Act arguably

should be extended to similarly limit the

scope of the RICO and Travel Act extortion

provisions. ° That issue, however, is not

before us at this time.

10. Thus, while the Travel Act was pri-

marily directed at suppressing the unlawful

local activities that provide organized

crime with its source of funds, see Legis-

lation Relating to Organized Crime: Hear-

ings on H.R. 468, H.R. 1246, etc., before

Subcommittee No. 5 of the House Committee

on the Judiciary, 87th Cong., lst Sess.

(1961); The Attorney General's Program to

Curb Organized Crime and Racketeering:

Hearings on S.1653, S.1654, etc., before

the Senate Committee on the Judiciary,

87th Cong., lst Sess. (1961), its reach is

not limited to the activities of organized

crime. See, e.g., United States v.

Rosselli, 432 F.2d 879, 884-85 (9th Cir.

1970), cert. denied, 401 U.S. 924 (1971).

Rather, the Act forbids persons from

traveling interstate or using the facili-

ties of interstate commerce to commit any

of the offenses enumerated in § 1952(b).

See United States v. Nardello, 393 U.S.

286, 293 (1969). As this court observed in

United States v. Roselli, supra, in re-

jecting the defendants' argument that their

scheme to cheat at gin rummy was not within

the reach of § 1952(b) (1),

The words of Section 1952 are gene-

ral; they contain no restriction to

particular persons or to particular

kinds of gambling, liquor, narcotics

and prostitution offenses ....

[A]s we read the legislative record,

Congress meant exactly what the lan-

guage of Section 1952 states--it de-

liberately chose to make the statute

applicable generally, and without

crippling restrictions, to any per-

son engaged in any kind of illicit

business enterprise in one of the

four fields of activity specified in

the statute, which experience showed

to be those in which organized

racketeers commonly engaged.

Id. at 885.

See also United States v. Barnes, 383 F.2d

287, 289 n.2 (6th Cir. 1967), cert. denied,

389 U.S. 1040 (1968); United States v.

Vespe, 389 F.Supp. 1359, 1368-69 (D.Del.),

aff'd sub nom. United States v. Shaffer,

520 F.2d 1369 (3d Cir. 1975).

The district court's conclusion that

RICO does not apply because the “defendants

have not engaged in any activities which

constitute ‘labor racketeering'" must be

rejected for similar reasons. Although

never clearly articulated, the defendants’

theory appears to be that since the primary

purpose of RICO is to rid legitimate orga-

nizations of the influence of organized

crime, and since the defendants’ conduct

was not alleged to be in aid of organized

crime nor part of a “racketeering scheme"

as that term is most commonly used, RICO

does not reach the defendants’ conduct.

This circuit has squarely held, how-

ever, that RICO does not require that the

defendants be engaged in "organized crime."

United States v. Campanale, 518 F.2d 352,

363 (9th Cir. 1975), cert. denied, 423 U.S.

1050 (1976). See also United States v.

Grande, 620 F.2d 1026, 1030 (4th Cir.),

cert. denied, 101 S.Ct. 98 (1980); United

States v. Aleman, 609 F.2d 298, 303-04

(7th Cir. 1979), cert. denied, 445 U.S.

946 (1980); United States v. Mandel, 415

F.Supp. 997, 1018-20 (D.Md. 1976);

McCellan, The Organized Crime Act (S.30)

or Its Critics: Which Threatens Civil

Liberties?, 46 Notre Dame Law. 55, 142-44

(1970). While Congress, in enacting RICO,

focused on the type of activities commonly

engaged in by organized crime, § 1962 of

the Act was written to "make[s] unlawful

such activities no matter who engages

therein.” United States v. Campanale, 518

F.2d at 363. Nor did Congress intend to

remove from the coverage of the Act behavi-

or that would otherwise constitute "rac-

keteering activity,” as defined in § 1961

(1), solely because it was not engaged in

for personal profit. ‘See, e.g., United

States v. Field, 432 F.Supp. 55, 57-58 (S.

D.N.Y. 1977), aff'd, 578 F.2d 1371 (2d

Cir. 1978).

Moreover, to create an exception for

conduct that is not part of a "“racketeer-

ing scheme," as that term may be commonly

used, would create substantial uncertainty

in the law and raise significant questions

as to the constitutionality of the Act.

In United States v. Culbert, 435 U.S. 371 °

(1978), for example, the defendant argued

that proof of "racketeering" was an element

of a Hobbs Act violation. While acknow-

ledging that the Hobbs Act was aimed pri-

marily at racketeering activities, the Court

rejected the defendant's argument, empha-

sizing that the Act was written in broad

language and the legislative history re-

vealed no intention to limit the statutory

language. In addition, the Court noted that

due process requires that a statute define

the elements of a crime with sufficient

clarity that “persons of common intelligence

{will not] necessarily guess as to its mean-

ing and differ as to its application." Id

at 374, quoting Connally v. General Con-

struction Co., 269 U.S. 385, 391 (1926).

Thus, the Court cautioned that serious due

process problems would be raised if a gene-

ral undefined term like "racketeering" was

read into the statute. Id. at 374.

Like the Second Circuit, we are not

unmindful that "the potentially broad reach

of RICO poses a danger of abuse where the

prosecutor attempts to apply the statute to

situations for which it was not primarily

intended." United States v. Weisman, 624

F.2d 1118, 1123 (2d Cir.), cert. denied,

101 S.Ct. 209 (1980), quoting United

States v. Huber, 603 F.2d 387, 395-96

(2nd Cir. 1979). We, too, "caution against

undue prosecutorial zeal in invoking RICO.”

Id. The defendants in this case, however,

would have us substitute their own defini-

tion of racketeering for the one provided

by § 1961 of the Act. This we cannot do.

ll. The district court quotes Rewis v.

United States, 401 U.S. 808, 812 (1971),

for the proposition that an "expansive in-

terpretation of the Travel Act would alter

sensitive federal-state relationships,

[and] could over-extend federal police

resources ... ." In Rewis, the Court

held that conducting a gambling establish-

ment frequented by out-of-state bettors

does not, without more, violate the Travel

Act. In the recent case of Perrin v.

United States, 444 U.S. 37 (1979), how-

ever, the Court rejected a claim that the

concerns for federalism expressed in

Rewis require a narrow interpretation of

the Travel Act. The issue in Perrin was

whether the Travel Act proscribed com-

mercial bribery that violated state law.

In holding that it did, the Court noted

that:

So long as the requisite interstate

nexus is present, the statute re-

flects a clear and deliberate intent

on the part of Congress to alter the

federal-state balance in order to

reinforce state law enforcement.

In defining an ‘unlawful activity, '

Congress has clearly stated its in-

tention to include violations of

state as well as federal bribery

law. Until statutes such as the

Travel Act contravene some provision

of the Constitution, the choice is

for Congress, not the courts.

Id. at 318.

12. The district court below cited a

number of circuit court decisions in

support of an across-the-board exemption

derived from Enmons. We find these cases

inapposite. United States v. Quinn, 514

F.2d 1250 (5th Cir. 1975), cert. denied,

424 U.S. 955 (1976), affirmed a conviction

under the Hobbs Act for receiving payoffs

from an employer in return for calling off

a picket line at the employer's store. The

court noted that although a bona fide labor

dispute existed and the defendant was

authorized to represent the employees, the

payment was received in violation of § 302

of the Taft-Hartley Act and therefore could

not be in pursuit of legitimate labor objec-

tives. There was no discussion in Quinn of

the applicability of Enmons to any federal

statute other than the Hobbs Act

United States v. Cerilli, 603 F.2d

415 (3d Cir. 1979), cert. denied, 444 U.S.

1043 (1980), affirmed a conviction under

the Hobbs Act for extorting political con-

tributions. The court noted that the

Enmons decision was the result of the

unique legislative history of the Hobbs Act

and must be applied cautiously outside the

labor context. Id. at 419-20. There is

nothing in the Third Circuit's opinion to

suggest that Enmons creates a general ex-

emption from federal criminal law for

violence in furtherance of legitimate labor

goals. Similarly, the other cases cited

by the district court provide no support

for its holding that "absent specific

authorization from Congress, United States

v. Enmons precludes federal criminal pro-

secution for violent activity which occurs

during the course of a legitimate labor

dispute." Thordarson, 487 F.Supp. at 995.

13. State tort law may also be available

to award compensation for damages result-

ing from violent conduct during the course

of a strike. See Automobile Workers v.

Russell, 356 U.S. 634 (1958); San Diego

Unions v. Garman, 359 U.S. 236, 247-49

(1959).

14. Section 241 provides in pertinent part:

If two or more persons conspire to in-

jure, oppress, threaten, or intimidate

any citizen in the free exercise or

enjoyment of any right or privilege

secured to him by the Constitution or

laws of the United States, or because

of his having so exercised the same .

- « they shall be fined not more than

$10,000 or imprisoned not more than 10

years.

15. For the text of § 50l(c), see footnote

3, supra.

16. In considering whether the indictment

alleged these elements, the district court

found that "[i]t is unlikely that there was

a fraudulent intent to deprive the union of

its funds"; that the expenditures were auth-

orized under the unions’ constitutions; that

there was concededly "no evidence that union

funds were used for the defendants’ personal

benefit"; and, following Enmons, that

violent and illegal means for legitimate

union ends "are for the union's benefit."

United States v. Thordarson, 487 F.Supp.

991, 998 (C.D. Cal. 1980).

At issue at this stage of the liti-

gation, of course, is the sufficiency of

the indictment, not the sufficiency of the

government's evidence. For example, the

government contends that under the inter-

national union's constitution, the expendi-

tures were not authorized.

17. Although the district court found the

Boyle decision "troubling", it sought to

distinguish Boyle on its facts. Boyle, the

district court found, involved an expendi-

ture of union funds which was prohibited by

criminal statute. In the present case, the

specific expenditure--the reimbursement for

expenses--was not prohibited by statute,

only the eventual use of the money to de-

stroy trucks was illegal, and so the dis-

trict court held that Boyle did not apply.

Thordarson, 487 F.Supp. at 997-98. We,

however, find Boyle indistinguishable from

the present case on its facts. The §501l(c)

violation in Boyle involved a transfer from

the United Mine Workers' (UMW) treasury to

the UMW's legislative and lobbying arm.

While the transfer was to facilitate the

making of unlawful contributions, the

transfer itself was not unlawful. See id.

at 758-59 and n.8.

18. The holding in Boyle converts §501(c)

from a “larceny-type” statute tc a statute

criminalizing union expenditures for cer-

tain purposes. Such a reading would make

criminal certain breaches of fiduciary

duty despite the absence of a specific in-

tent to deprive the union of its funds.

We find no support in the legislative his-

tory for such a reading of the statute.

First, the precursors to §§ 501(a)

and 501(c) were added to the Act at dif-

ferent times. These precursors are first

found in S. 1555, 86th Cong., lst Sess.

(1959). Section 109(a) of S. 1555. as

reported from the Ccmmittee on Labor and

Public Welfare on April 14, 1959, is almost

identical to § 50l(c). See 105 CONG. REC.

5980 (1959). There was no federal fiduci-

ary obligation in the bill at that time.

See S. REP. NO. 187, 86th Cong., lst Sess.

(1959), reprinted in [1959] U.S. CONG. &

AD. NEWS, 2318, 2376-77 (minority views).

A fiduciary obligation was added to the bill

by an amendment proposed by Senator

McClellan, 105 CONG. REC. 6525, on April

23, 1959, as § 509, and later renumbered

§ 609. 105 CONG. REC. 6523,28 (1959). The

subsequent House bill, H.R. 8342, included

§ 109(a) of S. 1555 almost verbatim as

§ 50l(c), but strengthenec the fiduciary

obligation by replacing § 609 of S. 1555

with § 50l(a). See 105 CONG. REC. 15549-

50 (1959) (remarks of Rep. Bolling); Id.

at 15888 (text of H.R. 8342).

Second, the legislative history

states that § 501(b), and not § 50l(c),

was meant to be the enforcement provision

for § 50l(a). The discussion of fiduciary

duties in the analysis of H.R. 8342 dis-

cusses § 501(b) as the enforcement pro-

vision for § 50l(a) and fails to mention

§ 501(c). See H.R. REP. NO. 741, 86th

Cong., lst Sess. (1959) reprinted in

[1959] U.S. CODE CONG. & AD. NEWS 2424,

2479-80 (Supplementary views). The Senate

Republicans’ remarks on the conference

bill, reported by Senator Goldwater, state

that the purpose of § 50l(c) is to make

embezzlement and other thefts of union

funds federal crimes as well as state

crimes, while the purpose of § 50l1(b) is

to enforce the fiduciary duty of union

officials. See 105 CONG. REC. 19766 (1959)

remarks of Sen. Goldwater).

19. The issue on appeal in Andreen was

the sufficiency of the evidence for a con-

viction under 18 U.S.C. § 664. The court

treated the case as though it were a § 501

to employee welfare and pension plans, uses

language that parallels § 50l(c).

20. The key language in 29 U.S.C. § 501l(c)

is “embezzles, steals, or unlawfully and

willfully abstracts or converts to his own

use, or to the use of another." The com-

parable language in 18 U.S.C. § 641 is

"“embezzles, steals, purloins, or knowingly

converts to his use or the use of another";

the language in 18 U.S.C. § 656 and § 657

is “embezzles, abstracts, purloins, or

wilfully misapplies."

21. The Senate Minority Report on S. 1555

states that § 109(a), the precursor to

§ 50l(c), does nothing more than make the

state crimes of embezzlement and theft

federal crimes for union officials, and

does not give union members any additi-

onal protection. S. REP. NO. 187, 86th

Cong., lst Sess. (1959), reprinted in U.S.

CODE CONG. & AD. NEWS 2318, 2401 (Minority

views, Appendix B). Senator Goldwater,

commenting on this section, renumbered

209(a), stated that it merely created

"concurrent jurisdiction" and was "like

gilding the lily." 105 CONG. REC. 10099

(remarks of Sen. Goldwater). We have found

nothing in the legislative history to con-

tradict these remarks. See also note 18

supra.

22. The elements of embezzlement, when

codified in a statute such as 18 U.S.C.

§ 641, are:

(1) a trust or fiduciary re-

lationship, (2) that the property

claimed embezzled is embraced within

the meaning of the statute, (3) that

it came into the possession or care

of accused by virtue of his employ-

ment, (4) it is property of another,

(5) that his dealing therewith con-

stituted a fraudulent conversion or

appropriation of same to his own

use, and (6) such was the intent to

deprive the owner thereof.

United States v. Powell, 294 F.Supp. 1353,

1355 (E.D. Va. 1968), aff'd, 413 F.2d 1037

(4th Cir. 1969).

The elements of common law larceny are

(1) a wrongful taking and carrying away

(asportation), (2) of the personal property

of another, (3) with the fraudulent intent

to deprive the owner of his property with-

out his consent. United States v. Barlow,

470 F.2d 1245, 1251 (D.C. Cir. 1972); see

also Morissette v. United States, 342 U.S.

246, 267 n.28 (1952). Larceny is usually

incorporated in a federal theft statute in

a broadened form by means of the words

"steal" or “purloin": "Stealing, having

no common law definition to restrict its

meaning as an offense, is commonly used to

denote any dishonest transaction whereby

one person obtains that which rightfully

belongs to another, and deprives the

owner of the rights and benefits of owner-

ship, but may or may not involve the ele-

ment of stealth usually attributed to the

word purloin.” Morissette, 342 U.S. at 268

n.28, quoting Crabb v. Zerbst, 99 F.2d 562,

565 (5th Cir. 1938). Conversion is even

broader than stealing, since it can be ac-

complished without a wrongful taking (where

the converter's initial possession was law-

ful) and without any intent to keep posses-

sion, so long as the property is misused

or abused. Morissette, 342 U.S. at 271-72.

Thus the addition of elements of lack

of authorization or lack of union benefit

is directly counter to the thrust of the

federal theft statutes to eliminate the

technicalities of the common law offenses.

See generally Id. at 263-73.

23. Although Morissette does not expli-

citly state that conversion is an element

of § 641, that is the effect of Moris-

sette's reasoning. Morissette states that

"[plrobably every stealing is a conversion,"

342 U.S. at 271, and then shows that a

stealing is a conversion with the added

elements of a wrongful taking and an intent

to retain possession. Id. at 272. Embez-

zlement and purloining, the other two

offenses combined to make § 641, are also

conversions with other elements added: to

purloin is to steal with the element of

stealth, id. at 268 n.28, and conversion is

an established element of embezzlement.

See, e.g., United States v. Powell, supra,

294 F.Supp. at 1355. It is thus clear from

Morissette that any violation of § 641 must

involve a conversion.

24. We recognize that there appears to be

considerable support in other circuits for

the defendant's position that there are

additional essential elements to § 501(c)--

although we note that those circuits fail

to agree on what the additional elements

are. The Sixth Circuit has adopted the

view that § 501(c) does not require a show-

ing of lack of authorization or lack of

union benefit, but does require a showing

of fraudulent intent and a lack of good

faith belief in authorization and union

benefit. United States v. Bane, 583 F.2d

832 (6th Cir. 1978), cert. denied, 439

U.S. 1127 (1979). The Fifth Circuit has

held that the elements of § 50l(c) include

fraudulent intent and either actual lack

of authorization or lack of a good faith

belief in union benefit. United States v.

Dixon, 609 F.2d 827 (5th Cir. 1980); see

also United States v. Nell, 526 F.2d 1223

(5th Cir. 1976) (fraudulent intent and lack

of authorization sufficient). But see

United States v. Durnin, 632 F.2d 1297,

1300 & n.5 (5th Cir. 1980) (suggesting that

authorization is irrelevant if fraudu-

lent intent is “thoroughly established").

The Eighth Circuit agrees that fraudulent

intent and lack of authorization are suffi-

cient, but has reserved the issue as to

what elements in addition to fraudulent

intent are required if the expenditure is

authorized. United States v. Goad, 490 F.

2d 1158 (8th Cir.), cert. denied, 417 U.S.

945 (1974). Finally, the Second Circuit

has held that the elements of § 50l(c) are

fraudulent intent and either lack of auth-

orization (or ratification) or lack of good

faith belief in union benefit. United

States v. Santiago, 528 F.2d 1130, 1133-34

(2nd Cir.), cert. denied, 425 U.S. 972

(1976). But see United States v. Silverman,

430 F.2d 106, 117-18; 126-27 (2nd Cir.),

modified on other grounds, 439 F.2d 1198

(1970), cert. denied, 402 U.S. 953 (1971)

(Judge Moore suggests lack of actual union

benefit, and not a lack of belief in union

benefit, is required if authorization is

present; Judges Friendly and Hays agree

arguendo).

Like Judge Larson, we are “not certain

why courts began to add new elements to

§ 50l1(c) crimes," Marolda, 615 F.2d at 873,

but we suspect that the procedural posture

of each case has had an effect. Ours ap-

pears to be the first case involving a

government appeal from the dismissal of the

indictment for failure to allege essential

elements of the offense. Preceding § 501

appeals when issues relating to lack of

authorization or lack of union benefit

turned on the circumstances of the particu-

lar case, such as the jury instruction, or

the evidence actually adduced a’* trial.

See, e.g., United States v. Dixon, 609 F.

2a 827 (5th Cir. 1980); United States v.

Nell, 526 F.2d 1223 (5th Cir. 1976);

United States v. Ottley, 509 F.2d 667

(2d Cir. 1975); United States v. Bane,

supra; United States v. Goad, 490 F.2d

1158 (8th Cir.), cert. denied, 417 U.S.

945 (1974).

For example, United States v. Silver-

man, supra, considered as the seminal case

on the question of the elements of § 501

(c), see, e.g., Goad, supra, and Ottley,

supra, involved challenges both to the in-

dictment and to the sufficiency of the

evidence. The indictment in Silverman,

like the indictment in the present case,

merely tracked the language of § 50l(c) and

then gave the dates and amounts involved in

the transaction underlying each count of

the indictment. Silverman, 430 F.2d at

109-110. Neither lack of authorization nor

lack of union benefit was specifically al-

leged. The indictment, challenged on other

grounds, was upheld. Judge Friendly,

however, writing for the majority, held

that the evidence concerning an expenditure

of union funds for a local political cam-

paign was insufficient to sustain a § 501

rized the expenditure and the expenditure

benefited the union. Silverman, 430 F.2d

at 126-28. The discussion of authorization

is confined strictly to the issue of the

sufficiency of the evidence.

25. The district court, in discussing the

fraudulent intent issue, stated that "[i]t

is unlikely that there was a fraudulent

intent to deprive the union of its funds

because reimbursement for the expenses in-

curred in labor organizing, and particular-

ly strike-oriented activities, are pro-

bably not for acts ‘that the union would

not have wanted .. . done.'" United

States v. Thordarson, supra, 487 F.Supp. at

998. This suggests that the district court

may have dismissed the indictment not be-

cause the indictment failed to allege

fraudulent intent, but because the court

doubted that fraudulent intent could be

proved at trial. If this was the district

court's reasoning, it was in error. An

indictment is sufficient if it adequately

alleges the elements of the offense and

fairly informs the defendant. See Hamling

v. United States, supra, 418 U.S. at 117

and United States v. Bailey, supra, 444

U.S. at 414. The strength of the govern-

ment's case is not at issue. However

difficult it may be to prove fraudulent in-

tent on the facts of this case, the govern-

ment is entitled to an opportunity to pre-

sent its proof.

The government admitted at oral argu-

ment that unless this circuit follows the

rule in United States v. Boyle, supra

(fraudulent intent is presumed where the

union funds are spent for an unlawful pur-

pose), the government has little hope of

establishing criminal intent in this case.

We have declined to follow Boyle. We do

not, however, interpret the government's

statement as a concession that we can ap-

propriately reverse the district court only

if we decide to follow Boyle. The govern-

ment's underlying contention is that the

indictment sufficiently alleged all of the

elements of § 50l(c). We hold that the

indictment is indeed sufficient. If the

government concludes that it does not have

adequate proof of fraudulent intent without

use of the Boyle doctrine, it is free to

use its prosecutorial discretion not to

proceed on the § 501(c) counts.

PREGERSON, Circuit Judge (concurring

and dissenting): Because section 50l(c) of

the Landrum-Griffin Act is expressly de-

signed to regulate the conduct of union of-

ficials in the use of union funds, I agree

that the district court erred in dismissing

those counts of the indictment that charged

violations of section 50l(c), and join in

Parts I and III of the court's opinion. I

cannot agree, however, with the majority's

view of the scope of United States v.

Enmons, 410 U.S. 396 (1973). I believe that

the rationale animating Enmons precludes

the application of RICO, the Travel Act, or

18 U.S.C. § 844(i) to violence incidental to

a legitimate labor dispute. Accordingly, I

dissent from Part II of the majority's

opinion.

The majority distinguishes Enmons from

the case at bar by reading it as based on

the specific language and legislative his-

tory of the Hobbs Act. I agree with the

district court, however, that "it is inac-

curate to so narrowly limit the case."

United States v. Thordarson, 487 F.Supp.

991, 992-93 (C.D. Cal. 1980). The Court in

Enmons explicitly stated that even had the

language and history of the Hobbs Act not

precluded its application to violence dur-

ing legitimate labor disputes, policy

reasons would make such application impro-

per. 410 U.S. at 411. The Court voiced

its reluctance, absent unmistakably com-

pelling statutory language, to conclude

"that Congress intended to put the Federal

Government in the business of policing the

orderly conduct of strikes." Id. This

policy is as appropriate here as in Enmons

and counsels against extending RICO, the

Travel Act, or section 844(i) to “the use of

force to achieve legitimate collective-

bargaining demand." 410 U.S. at 408.

The majority neglects this policy

consideration. The only policy argument

stated in Enmons that the majority acknow-

ledges is that "the special characteristics

of the crime of extortion” made the Court

fear that applying the Hobbs Act to labor

disputes risked transforming minor picket

line violence into federal crimes. The

majority scarcely recognizes that applying

the Travel Act or RICO to labor disputes

creates the same risk, since extortion is

one of the “unlawful activities” to which

the Travel Act applies and is included in

RICO's definition of "racketeering activi-

ty."

More serious, however, is the majori-

ty's failure to appreciate that the Enmons

decision rests not solely on the interpre-

tation of the particular statute involved

there, but on a broad, historically justi-

fied concern that the federal government

not intrude into the business of policing

the orderly conduct of legitimate labor dis-

putes. Punishing lawlessness perpetrated

during labor disputes has historically been

and should continue to be the province of

the States and their law enforcement au-

thorities. I therefore respectfully dis-

sent from Part II of the court's opinion.

FOOTNOTE

1. The Travel Act penalizes anyone who

travels in interstate commerce with intent

to carry on an “unlawful activity. 18 U.

S.C. § 1952(a) (3). And it includes extor-

tion in its definition of "unlawful acti-

vity."” 18 U.S.C. § 1952(b). RICO pro-

hibits “racketeering activity” in various

contexts, 18 U.S.C. § 1962, and extortion

chargeable under state law is explicitly

included in the definition of such activity.

18 U.S.C. § 1961(1) (A).

The majority does acknowledje this

problem but suggests that Enmons "argu-

ably should be extended to . .. limit the

scope of the RICO and Travel Act extortion

provisions." Majority Opinion, note 9.

This concession makes it clear that ,Enmons

cannot be read as based solely on the

legislative history of the Hobbs Act.

ean hs Wee

fees

APPENDIX B

FILED

March 17, 1980

Clerk, U.S.

District Court

Central District

of California

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, )

)

Plaintiff, )

)

Vv. )

)

STEN THORDARSON, )

MARTIN FRY, )

CRAIG DUNBAR, )

MARTIN SALGADO, and )

CHARLES WISE, )

)

Defendants.

No. CR 79-946-RMT

OPINION

FACTUAL BACKGROUND

In 1978, Teamsters Local 186 and 389

("Local") attempted to organize employees

of Redman Moving and Storage Company

("Redman") located in Thousand Oaks, Cali-

fornia. After Leing elected as the bar-

gaining agent for Redman employees in

July of 1978, Local 186 ordered a strike

against Redman. Since Local 186 did not,

by itself, have the requisite manpower to

conduct the strike, it obtained the assist-

ance of Local 389. Between July and

December of 1978, Redman's truck fleet was

the object of vandalism, including tire

Slashings and truck burnings.

In November of 1979, after a fourteen-

month investigation, Sten Thordarson, Craig

Dunbar and Charles Wise, secretary-

treasurer, business agent, and vice-presi-

dent, respectively, of Local 389, and

Martin Fry and Martin Salgado, secretary-

treasurer and trustee, respectively, of

Local 186, were indicted on ten counts for

violations of 18 U.S.C. §§ 1952, 844(i),

and 1962(d) and 29 U.S.C. § 50l(c) in

connection with the burning of two Redman

trucks in Arizona and Connecticut. The

defendants have moved to dismiss the

entire indictment.

II.

COUNTS 4 AND 5 OF THE

INDICTMENT, BROUGHT UNDER

18 U.S.C. § 1952, ARE DISMISSED.

Defendants move to dismiss Counts 4

and 5 of the indictment charging them

with violations of 18 U.S.C. § 1952,/

rely-

ing on the Supreme Court's ruling in

' United States v. Enmons, 410 U. S. 396

(1973). The defendants in Enmons were

charged with using threats of force and

violence during a strike action to obtain

higher wages and benefits for union

members, in violation of the Hobbs Act,

18 U.S.C. § 1951.7

The defendants alleg-

edly blew up a transformer substation,

fired high powered rifles at three com-

pany transformers, and drained oil from a

company transformer. The court held that

the alleged acts did not amount to a

“wrongful taking" necessary for a § 1951

extortion violation because violence was

used to achieve legitimate union objec-

tives, such as higher wages in return for

genuine services which the employer seeks.

Enmons, 410 U.S. at 400.

The governmer*'s major attempt to

distinguish Enmons from the case at bar

is its insistence upon limiting that case

to merely an interpretation of the term

"extortion" in § 1951. Because § 1952

does not contain the “wrongful taking"

element of § 1951, it is argued, Enmons

is inapplicable to a § 1952 prosecution.

However, after a careful reading of

Enmons and its progeny, it is inaccurate

to so narrowly limit the case. The ruling

in Enmons was based upon the underlying

purpose of § 1951 which was to deal with,

inter alia, labor racketeering activities.

In reviewing the language and legis-

lative history of the Hobbs Act, the

court found no congressional intent to

extend federal criminal jurisdiction to

include violent acts done in pursuit of

legitimate union objectives or to put the

federal government in the business of

policing the orderly conduct of strikes.

Enmons, 410 U.S. at 408-12. In fact,

the issue upon which certiorari was

granted in Enmons, was not whether vio-

lent activity during strikes may consti-~

tute extortion under § 1951, but whether

§ 1951 “proscribes violence during a law-

ful strike for the purpose of inducing an

employer's agreement to legitimate collec-

tive bargaining demands." Enmons, 410

U.S. at 399. The court concluded that

the state court was the proper forum for

such a prosecution.”

The court further concluded that even

if the language and history of the Hobbs

Act were less clear, a § 1951 prosecution

would have been improper for two related

reasons. First, criminal statutes must be

strictly construed, with any ambiguity

being resolved in favor of lenity. Rewis

v. United States, 401 U.S. 808, 812 (1971).

Second, unless Congress clearly conveys

its purpose, the court will not assume "a

significant change in the sensitive rela-

tion between federal and state criminal

jurisdiction. United States v. Bass, 404

U.S. 336, 349 (1971)." Enmons, 410 U.S.

at 411-412.

Clearly, a labor official, merely by

virtue of his position, is not exempt

from all federal prosecution. Labor

officials have been federally prosecuted

for abusing their power to order picket-

ing or strikes for the purpose of extract-

ing money for their personal benefit.

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

Cir. 1977), cert. denied, 435 U.S. 933

(1978); United States v. Quinn, 514 F.2d

1250 (5th Cir. 1975), cert. denied, 424

U.S. 955 (1976). Federal criminal prose-

cution is also not precluded where vio-

lence is used in an attempt to force an

employer to pay for work which the worker

had no intention of performing. United

States v. Kemble, 198 F.2d 889 (3d Cir.),

cert. denied, 344 U.S. 843 (1952). Such

labor racketeering is precisely the acti-

vity which § 1951 was intended to curb.

However, § 1951 is inapplicable to “vio-

lence employed during the course of a

valid, bona fide collective bargaining

negotiation for better working hours,

wages and conditions." United States v.

Caldes, 457 F.2d 74, 77 (9th Cir. 1972).

Rather than limiting the Enmons ruling

to extortion cases, subsequent courts have

consistently recognized that the case was

explicitly tied to the labor context.

Short of express congressional intent,

"the effect of Enmons was to remove from

the reach of federal criminal law the use

of coercive tactics to obtain increased

wages . . . when the payment is gained in

furtherance of legitimate objectives.”

United States v. Quinn, 514 F.2d 1250,

1257 (5th Cir. 1975), cert. denied, 424

U.S. 955 (1976). See also, United States

v. Cerilli, 603 F.2d 415, 419-20 (3d Cir.

1979). Thus, if Enmons is to be narrowly

construed at all, it is only done so

within the context of legitimate labor

activity. United States v. Culbert, 435

U.S. 371, 376-78 (1978); United States v.

Warledo, 557 F.2d 721 (10th Cir. 1977);

United States v. Jacobs, 543 F.2d 18

(7th Cir. 1976), cert. denied, 431 U.S.

929 (1977).

The courts have similarly delimited

the reach of the Travel Act, 18 U.S.C.

§ 1952. Several courts have stated that

the primary purposes of § 1952 are to

attack organized crime and to aid local

authorities in combatting it. United

States v. Polizzi, 500 F.2d 856 (9th

Cir. 1974), cert. denied, 419 U.S. 1120

(1975); United States v. Peskin, 527 F.2d

71 (7th Cir. 1975), cert. denied, 429 U.S.

818 (1976). An extensive analysis of the

legislative history of § 1952 is found in

United States v. Roselli, 432 F.2d 879

(9th Cir. 1970), cert. denied, 401 U.S.

924 (1971). The Ninth Circuit stated

that, “it is quite clear that in enacting

§ 1952, Congress was not concerned with

regulating interstate travel or the use

of interstate facilities, but rather with

directly suppressing unlawful local acti-

vities from which organized crime drew its

sustenance." Roselli, 432 F.2d at 891;

United States v. Colacurcio, 499 F.2d

1401, 1406 (9th Cir. 1974).

The Supreme Court in Rewis v. United

States, 401 U.S. 808 (1971), stated that:

The legislative history of the

[Travel] Act is limited, but

does reveal that § 1952 was

aimed primarily at organized

crime and, more specifically,

at persons engaged in one

state while operating or man-

aging illegal activities in

another. . . [A]n expansive

interpretation of the Travel

Act would alter sensitive

federal-state relationships,

could overextend federal police

resources and would transform

relatively minor state offenses

into federal felonies.

Rewis, 401 U.S. at 812.

Rewis@ was followed in United States

v. Brecht, 540 F.2d 45 (2d Cir. 1976),

cert. denied, 429 U.S. 1123 (1977), in

which § 1952 was not extended to acts of

commercial bribery, even though bribery

was a § 1952 offense. "The inquiry into

whether the state violation committed by

the defendant comes within the scope of

the Travel Act depends not upon the

nomenclature used but upon the nature of

the violations." Brecht, 540 F.2d at 50.

The court observed that § 1952 was prima-

rily intended to counter methods used by

organized crime to generate income, such

as “shakedowns” or “loan-sharking." United

States v. Nardello, 393 U.S. 286 (1969).

Citing Enmons as to the rule of lenity, the

Brecht court refused to consider commercial

bribery within the ambit of § 1952.

The Enmons rationale is as appropriate

to a § 1952 prosecution as it is toa

§ 1951 prosecution.” Defendants, in the

case at bar, are labor officials whose

unions participated in a lawful strike.

Their alleged acts are ones contemplated

as part of a series of coercive tactics

to achieve the recognition of a union con-

tract. Although, as in Enmons, the

statutory proscriptions arguably apply,°

there is no indication that Congress in-

tended to extend the scope of a statute

aimed at combatting organized criminal

activity to encompass violence arising

out of a lawful strike. Criminal statutes

must be strictly construed, and any ambi-

guity resolved in favor of lenity. Enmons,

410 U.S. at 411. Much more explicit sta-

tutory language is required “to lead to

the conclusion that Congress intended to

put the federal government in the business

of policing the orderly conduct of strikes."

Id.

The indictment is an attempt to cir-

cumvent the Enmons proscription similar to

the one rejected by the Second Circuit in

United States v. DeLaurentis, 49l F.2d 208

(2d Cir. 1974). In DeLaurentis, the

government attempted to invoke a civil

rights statute to gain federal jurisdic-

tion over violent activity which had

occurred during a lawful labor dispute.

The court found that explicit provisions

of the National Labor Relations Act, and

not the civil rights statute, controlled

regulation of the alleged acts. Relying

on Enmons, the court concluded that "the

Government has unjustifiably used federal

law to convert an unfair labor practice

into a criminal conspiracy." DeLaurentis,

491 F.2d at 214. See, United States v.

Bailes, 120 F.Supp. 614, 637 (S.D.W.Va.

1954).

Acts of violence, such as the ones

alleged in the instant case, occurring

during a lawful labor dispute and result-

ing in damage to persons or property are

punishable under state law. However,

there is nothing in the language or his-

tory of § 1952 to "justify the conclusion

that Congress intended [§ 1952] to work

such an extraordinary change in Federal

labor law or such an unprecedented incur-

sion into the criminal jurisdiction of

the States." Enmons, 410 U.S. at 4ll.

Therefore, Counts 4 and 5 charging vio-

lations of 18 U.S.C. §1952 are dismissed.

IItl.

COUNTS 2 AND 3 OF THE

INDICTMENT, BROUGHT UNDER

18 U.S.C. § 844(i), ARE DISMISSED.

Defendants Fry and Salgado are charged

with violations of 18 U.S.C. § 844(i).’

As discussed, supra, absent specific autho-

rization from Congress, United States v.

Enmons, supra, precludes federal criminal

prosecution for violent activity which

eccurs during the course of a legitimate

labor dispute. § 844(i), enacted as part

of the Organized Crime Control Act of 1970

(P.L. 91-452), does not provide such

authorization. ®

Although the application of § 844

may not be limited solely to organized

crime, there is clearly no indication of

any intent by the Congress to extend

federal criminal prosecution into the

labor field. In fact, any such congres-

sional intent is even less apparent in

§ 844 than in the Hobbs Act which was con-

sidered in the Enmons case, supra.” Thus,

a consistent application of the Enmons

doctrine is appropriate to a § 844 prose-

cution. Accordingly, Counts 2 and 3

charging violations of 18 U.S.C. § 844(i)

are dismissed.

IV.

COUNTS 6 THROUGH 10 OF THE

INDICTMENT, BROUGHT UNDER

29 U.S.C. § 501(c), ARE DISMISSED.

Defendants are also alleged to have

violated 29 U.S.c. § 501(c)?° by autho-

rizing and using union funds to pay for

travel, telephone, and unspecified ex-

penses incurred in trips to Arizona and

Connecticut for the unlawful purpose of

locating and destroying two Redman trucks.

The government's theory is that a viola-

tion of § 50l(c) is established when the

union official utilizes union funds for an

unlawful purpose, regardless of the exist-

ence of any arguable union benefit.

The leading case is United States v.

Silverman, 430 F.2d 106 (2d Cir. 1970),

cert. denied, 402 U.S. 953 (1971). The

defendant was indicted for embezzlement

in violation of § 50l(c) and charged in

Counts 1 through 8 with diverting union

funds for the payment of printing expenses

incurred in the campaign of Abraham Beame

for mayor of New York under the guise of

a payment for union stationery and in

Counts 10 through 13, for receiving four

checks from the union under the pretense

of a steward's committee expense. Judge

Moore wrote the majority opinion involving

Counts 10 through 13 and dissented from

Judge Friendly's opinion involving Counts

1 through 8.

The court noted initially that the

purpose of § 50l(c) was to hold union

officials strictly responsible as fidu-

ciaries for the union funds entrusted to

them and, therefore, to require them to

expend those funds only in accordance

with the union's constitution, by-laws,

and resolutions. The two judges differed,

however, as to the standards for a

§ 50l1(c) conviction.

Judge Moore stated that because the

political contributions in Counts l

through 8 were not per se illegal, it was

necessary to focus on the issue of whether

the contributions were properly authorized

and made for the union's benefit. If

there is no possible union benefit from

the use of the funds (e.g., personal non-

business expenses not incurred in further-

ance of union business, United States v.

Dibrizzi, 393 F.2d 642 (2d Cir. 1968), it

makes no difference whether the use was

authorized. Judge Moore held that a con-

viction under § 50l(c) may be obtained

by demonstrating a fraudulent intent to

deprive the union of its funds and either

a lack of authorization or an absence of

benefit to the union. Believing that

there was sufficient evidence for the

jury to find that the contributions were

either for the private benefit of the

defendant or made with only a sham or

invalid authorization from the union,

Judge Moore voted to affirm the convic-

tions in Counts 1 through 8.

However, the majority opinion by

Judge Friendly observed that § 50l(c) is

essentially a larceny-type offense which

amounts to the taking of another person's

property or causing it to be taken, knowing

that the other person would not have wanted

that to be done. The “unlawful and wilful"

element of the offense requires that the

funds be used for the converter's personal

benefit (or for the personal benefit of

another) and not for the benefit of the

union. Judge Friendly stated that assum-

ing, arguendo, that Judge Moore's standard

was adopted, the union did benefit from

the political contributions and, in view

of the fact that the union's constitution

contemplated political contributions,

there was no fraudulent intent to deprive

the union of its funds nor lack of bona

fide authorization.

Finally, the payments in Counts 10

through 13 were clearly for the personal

benefit of the defendant. The entire

court upheld the conviction on these counts

because there was sufficient evidence for

the jury to conclude that there was no

proper authorization for the payments.

As explained in United States v.

Goad, 490 F.2d 1158 (8th Cir.), cert.

denied, 417 U.S. 945 (1974), Silverman,

supra, may be analyzed as applying dif-

ferent standards for authorized and unau-

thorized expenditures. Because Judge

Moore's opinion dealt with the unautho-

rized uses, the elements in a § 50l(c)

conviction for such uses can be charac-

terized as requiring (1) a fraudulent

intent to deprive the union of its funds,

and (2) a lack of authorization according

to the union's constitution and by-laws.

On the other hand, Judge Friendly's opinion

adopted Judge Moore's standard arguendo

concerning the authorized uses. Under

those circumstances, the standard required

is (1) a fraudulent intent to deprive the

union of its funds, and, (2) an absence of

benefit to the union. ?

The government relies primarily on

United States v. Boyle, 482 F.2d 755 (D.C.

Cir.), cert. denied. 414 U.S. 1076 (1973).

In Boyle, the defendant converted union

funds into campaign contributions in direct

violation of 18 U.S.C. § 610 [making it

unlawful for any labor organization to

contribute to a federal political cam-

paign]. The court distinguished Silverman

on the grounds that in the case there was

no legal bar to the use of the funds if

the transfer was properly authorized by

the union. But in Boyle, the use to which

the money was converted was itself unlaw-

ful and, therefore, not even an authoriza-

tion could have made the contribution

legal.

The court further rejected defen-

dant's claim that the jury must find that

the union official knew at the time that

the expenditure was illegal or ultra vires:

As we have noted, however, the

transfer in this case was not

for a purpose that was ultra

vires, but rather for a purpose

that was itself a crime. There

is no hint in either the stat-

ute or its legislative history

that indicates a Congressional

intent to excuse from the ambit

of § 50l(c), transfers for a

criminal purpose. No officer

or union governing body could

in all logic believe that a

transfer for a criminal purpose

was for legitimate union pur-

poses, was authorized by the

union constitution or by-laws,

or was for the union's benefit.

Boyle, at 765.

The government interprets Boyle as

establishing a § 50l(c) violation whenever

the funds are utilized for an "unlawful

purpose." However, the government's

interpretation is overly broad. Speci-

fically, the use of this "broad" inter-

pretation in the context of labor organi-

zational activities and strikes is trou-

bling. Taken to its logical conclusion,

the government's theory would consider as

an embezzlement indictable under § 50l(c),

any union expenditures made to reimburse

members or other individuals who ulti-

mately violate certain state laws through

acts that might reasonably occur during

the labor dispute, such as disturbance

of the peace, assault, or vandalism. For

example, unions often hire professional

picketers. If these picketers participate

in “unlawful activities" that occur during

legitimate labor activities, the union

officials who authorized the expenditure

for the hiring of the picketers could con-

ceivably be prosecuted under § 50l(c). If

a union officer reimbursed organizers for

gasoline, hotel and other expenses, and

these organizers participated in the

identical activities as did the union

workers in Enmons, supra, (blowing up a

transformer substation, firing high-

powered rifles at three company trans-

formers, and draining the oil from a

company transformer) there would exist

the anomalous situation wherein the

federal government would be precluded

from indicting the union officials who

commit violent acts in pursuit of legi-

timate labor objectives, but would be

able to convict the union officials on

the basis that any funds expended toward

those legitimate labor objectives would

constitute a § 50l(c) embezzlement.

Although Boyle, supra, is persuasive,

it is not binding on this court. Boyle

can, however, be distinguished because

the “use” to which the funds were con-

verted was per se illegal. In the case at

bar, reimbursement for expenses incurred

for union benefit are not per se illegal.

As indicated above, Boyle is overly broad

and involved special circumstances that

were not necessarily applicable to the

Silverman standara. /?

The Silverman standard is the appro-

priate standard to apply to the facts of

this case. The constitutions of both

unions contain provisions authorizing reim-

bursements for expenses incurred while

performing union business. 2? The secre-

tary-treasurers of both unions have the

authority to reimburse union organizers

for expenses incurred for out-of-town

trips pursuant to activities that are of

benefit to the union. As such, these

expenses can reasonably be considered as

authorized.

The factors to consider in deter-

mining whether authorized expenditures

are violations of § 50l(c) are the fraudu-

lent intent of the defendant and his good

faith belief that the funds were expended

for the union's benefit. It is unlikely

that there was a fraudulent intent to

deprive the union of its funds because

reimbursement for the expenses incurred

in labor organizing, and particularly

strike-oriented activities, are probably

not for acts “that the union would not

have wanted. . . done." United States v.

Ottley, 509 F.2d 667 (2d Cir. 1975);

United States v. Silverman, 430 F.2d 106

(2d Cir. 1970), cert. den. 402 U.S. 953 (1971);

United States v. Hart, 417 F.Supp. 1314,

1322 (S.D. Iowa 1976). Further, the

government concedes that it has no evi-

dence that union funds were used for the

defendants’ personal benefit. Finally,

it is clear from United States v. Enmons,

410 U.S. 396 (1973), that violent means,

even if in violation of state law, used to

achieve legitimate labor objectives, are

for the union's benefit. Accordingly,

100

Counts 6 through 10 charging violations of

29 U.S.C. § 50l1l(c) are dismissed.

Vv.

COUNT 1 OF THE INDICTMENT,

IS DISMISSED.

The § 1962(a)+* [the RICO Statute]

count shall be dismissed for two reasons.

First, the Enmons doctrine, supra, is

equally applicable to RICO. The Ninth

Circuit in United States v. Marubeni

America Corp., F.2d (9th Cir.

No. 79-1327, January 10, 1980) reviewed

the legislative history of the statute

and stated:

We believe that anyone who

reads the legislative history

must be struck by the single-

mindedness with which Congress

drafted RICO. Congress de-

clared over and over again

that its purpose was to rid

legitimate organizations of

influence of organized crime.

This purpose must be the linch-

pin of any construction of RICO.

101

See, Slip Opinion, p. 1593 n.1l.

Clearly, RICO's jurisdiction does not

extend to violent activities occurring

during strikes.

Second, defendants have not engaged

in any activities which constitute “labor

racketeering." Furthermore, the means by

which the government attempts to invoke

§ 1962 - violations of 18 U.S.C. §§ 1952

and 844(i) and 29 U.S.C. § 50l(c) - have

all been disposed of.

Therefore, Count 1 charging a viola-

tion of 18 U.S.C. § 1962(d) is also dis-

missed.

Dated: March 17, 1980.

ROBERT M. TAKASUGI

United States District

Judge

102

FOOTNOTES

l. 18 U.S.C. § 1952 provides in pertinent

part that:

(a)

Whoever travels in interstate or

foreign commerce or uses any faci-

lity in interstate or foreign

Commerce, including the mail, with

intent to...

(2) commit any crime of violence

to further any unlawful

activity; or

(3) otherwise promote, manage,

establish, carry on, or

facilitate the promotion,

management, establishment,

or carrying on, of any

unlawful activity,

and thereafter performs or at-

tempts to perform any of the

acts specific in subparagraphs

(1), (2), and (3), shall be fined

103

(b)

- « « OY imprisoned ...cr

both.

As used in this section, “unlaw-

ful activity" means ... (2)

extortion, bribery or arson in

violation of the laws of the

state in which committed or of

the United States.

2. 18 U.S.C. § 1951 provides in pertinent

part:

fa)

Whoever in any way or degree ob-

structs, delays, or affects com-

merce or the movement of any

article or commodity in commerce,

by robbery or extortion or at-

tempts or conspires so to do, or

commits or threatens physical

violence to any person or prop-

erty in furtherance of a plan or

purpose to do anything in viola-

tion of this section shail be

104

fined . . . or imprisoned .

or both.

The court stated that “acts of vio-

lence occurring during a lawful strike

and resulting in damages to persons

Or property are undoubtedly punish-

able under state law. To punish

persons for such acts of violence

was not the purpose of the Hobbs Act."

Enmons, 410 U.S. at 398.

The court in Rewis refused to extend

§ 1952 to the interstate travel by

mere customers of a gambling esta-

blishment.

The government argues that the defen-

dants' attempt to make an exception

to § 1952 is analogous to the one

attempted in United States v. Erlen-

baugh, 409 U.S. 239 (1972). Erlen-

baugh, however, hardly stands for the

proposition advocated by the govern-

105

ment. The court merely recognized

that §§ 1952 and 1953 were both parts

of the same legislative effort to

assist local authorities in dealing

with organized criminal activity,

playing different roles in achieving

the common goal. Erlenbaugh cannot

possibly be construed as extending

the scope of § 1952 beyond organized

criminal activity and into the field

of legitimate labor activity.

The government further attempts to

distinguish Enmons on the basis that

the cases do not preclude federal pro-

secution for violation of specific

federal statutes. The government

argues that because §§ 1952 and 844(i)

(discussed, infra.) apply to "any

person" or to “whoever" commits the

unlawful act, the statutes clearly

include the alleged conduct of the

106

defendants and are not limited to ex-

clude certain classes of people, such

as labor officials who perform unlaw-

ful acts te further union objectives.

This argument is without merit. § 195l,

considered in Enmons, also applies to

“whoever" performs the unlawful acts.

The court, nevertheless, held that the

congressional intent explicitly did

not extend the statute to violent

activity stemming from a lawful strike.

18 U.S.C. § 844(i) provides that:

Whoever maliciously damages or

destroys, or attempts to damage

or destroy, by means of an explo-

a or

other real or personal property

used in interstate or foreign

commerce or in any activity

affecting interstate or foreign

commerce shall be imprisoned...

107

or fined . .. or both.

The legislative history of § 844 is

unclear. There is some indication

that it may have been included in the

Organized Crime Control Act in response

to the bombings of buildings on col-

lege campuses during the late 1960's.

1970 U.S. Code Cong. & Ad. News at

4075, 4090. § 844, however, was part

of the overall congressional attempt

to combat organized crime. In fact,

included in the Act was 18 U.S.C.

§ 1962, under which defendants are

also charged. See discussion, infra.

The Hobbs Act, 18 U.S.C. § 1951, was

directed at labor racketeering acti-

vities. United States v. Daley, 564

F.2d 645 (2d Cir. 1977), cert. denied,

435 U.S. 933 (1978). There is no

indication that Congress intended

§ 844 to be concerned with legitimate

108

10.

ll.

labor activity.

29 U.S.C. § 501(c) provides that:

Any person who embezzles, steals,

or unlawfully and willfully ab-

stracts or converts to his own

use, or the use of another, any

of the moneys, funds, securi-

ties, property, or assets of a

labor organization of which he

is an officer or by which he is

employed, directly or indirectly,

shall be fined .. . or impris-

oned . . . or both."

See United States v. Bane, 583 F.2d

832 (6th Cir. 1978) cert. denied, 439

U.S. 1127 (1979), where the court

stated that in a § 50l1(c) case in

which the expenditure of union funds

was authorized, the government must

prove a fraudulent intent to deprive

the union of its funds and a bad faith

109

12.

belief that the expenditure was for the

legitimate benefit of the union. The

government, however, need not prove

that the expenditure did not actually

benefit the union. See also United

States v. Santiago, 528 F.2d 1130 (2d

Cir.), cert. denied, 425 U.S. 972

(1976), where the same standard was

used.

The logical extension of the Boyle

argument is that the ultimate use is

a violation of § 50l(c) itself (which

is an unlawful act) thereby allowing

some creative prosecutor to bootstrap

an alleged § 50l(c) violation as being

the urlawful act necessary to impose

the Boyle standard. To avoid the

circular possibilities of Boyle, the

focus as to the ultimate unlawfulness

should be on the wrongful conversion.

Accordingly, the standard that should

110

13.

be adopted is one that concentrates

on the authorization for the expendi-

ture and the fraudulent intent of the

alleged converter, rather than on the

"use."

Local 389's constitution provides:

The Secretary-Treasurer shall

have the authority to disburse

or order the disbursement of all

monies necessary to pay the bills,

obligations and indebtedness of

the Local Union, which have been

properly incurred as provided

herein. He shall have the autho-

rity to pay current operating

expenses of the Local Union,

including rents, utilities and

maintenance of the union hall,

and salaries and expenses of

officers and employees as autho-

rized by the Executive Board.

lll

--Article IX, H

He shall have general charge

and supervision of all the

officers and employees. ...

--Article Ix, I

Recognizing that the officers

and representatives of this

organization do not work regu-

larly scheduled hours and receive

no compensation for overtime or

premium pay; also recognizing

that such individuals are re-

quired to pay varying amounts for

lodgings and meals depending

upon the city to which they tra-

vel, which amounts are sometimes

less, but more cften more than

the allowance given them, . . .;

that such activities benefit the

organization and its members,

112

that the time spent in such acti-

vities is unpredictable and unas-

certainable, such officers and

representatives may be granted an

allowance (both for in-town and

out-of-town work, respectively,

which in the case of out-of-town

work shall include hotel and meal

expenditures) in which amount

(daily, weekly, or monthly) as

the Local Executive Board may

determine and there shall be no

need to make a daily or other

accounting to the local union

membership for such allowances.

In addition to the allowances

set forth above, all officers

and employees may be reimbursed

for, or credit provided for, all

other expenses incurred in con-

nection with their activities.

113

14.

--Article XV, A

When a representative of the

organization is engaged in acti-

vities in the intent of or for

the benefit of the organization

and its members, the labor

organization shall pay the

expenses incurred therein, or

reimburse the representative upon

receipt of itemized vouchers from

him or the suppliers of such

services.

--Article XV, B

Local 189 has similar provisions

(Articles X and XV) in its constitu-

tion.

18 U.S.C. § 1962(c) provides in per-

tinent part that:

114

It shall be unlawful for any

person employed by or associated

with any enterprise engaged in,

or the activities of which af-

fect, interstate or foreign

commerce, to conduct or parti-

cipate, directly or indirectly,

in the conduct of such enter-

prise's affairs through a pat-

tern of racketeering activity

or collection of unlawful debt.

18 U.S.C. § 1962(d) provides that:

It shall be unlawful for any

person to conspire to violate

any of the provisions of sub-

sections (a), (b), or (c) of

this section.

115 -

ee ee ee

— ;

a &

we Sects

APPENDIX C

FILED

August 5, 1981

RICHARD H. DEANE

Clerk, U.S. Court

of Appeals

_ UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, )

Plaintiff-Appellant, )

vs. )

STEN THORDARSON, MARTIN FRY, )

CRAIG DUNBAR, MARTIN SALGADO, )

and CHARLES WISE, )

Defendants-Appellees. )

)

No. 80-1239

D.C. CR 79-946

ORDER

Before: PREGERSON, FERGUSON and NORRIS,

Circuit Judges

The panel as constituted in the above

case has voted unanimously to deny the

petition for rehearing and to reject the

suggestion for a rehearing en banc.

The full court has been advised of

the suggestion for anen banc rehearing and

116

no judge of the court has requested a

vote on the suggestion for rehearing en

banc. Fed. R. App. P. 35(b).

The petition for rehearing is denied

and the suggesticn for a rehearing en

banc is rejected.

117

APPENDIX D

18 U.S.C. § 844 Penalties

"(i) Whoever maliciously damages or

destroys, or attempts to damage or destroy,

by means of an explosive, any building,

vehicles, or other real or personal prop-

erty used in interstate or foreign commerce

or in any activity affecting interstate or

foreign commerce shall be imprisoned for

not more than ten years or fined not more

than $10,000, or both; and if personal

injury results shall be imprisoned for not

more than twenty years or fined not more

than $20,000, or both; and if death results

shall also be subject to imprisonment for

any term of years, or to the death penalty

or to life imprisonment as provided in

section 34 of this title.”

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 in

commerce, by robbery or extortion or at-

tempts 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

ef 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 --

118

"(1) The term ‘robbery’ means the

unlawful taking or obtaining of per-

sonal property from the person or in

the presence of another, against his

will, by means of actual or threatened

force, or violence, or fear of injury,

immediate or future, to his person or

property, or property in his custody

or possession, or the person or prop-

erty of a relative or member of his

family or of anyone in his company at

the time of the taking or obtaining.

"(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.

"(3) The term ‘commerce’ means

commerce within the District of Colum-

bia, or any Territory or Possession of

the United States; all commerce be-

tween any point in a State, Territory,

Possession, or the District of Colum-

bia and any point outside thereof; all

commerce between points within the

same State through any place outside

such State; and all other commerce over

which the United States has jurisdic-

tion.

"(c) This section shall not be con-

strued to repeal, modify or affect section

17 of Title 15, sections 52, 101-115, 151l-

166 of Title 29 or sections 151-188 of Title

119

18 U.S.C. § 1952 Interstate and foreign tra-

vel or transportation in aid

of racketeering enterprises

“(a) Whoever travels in interstate or

foreign commerce or uses any facility in

interstate or foreign commerce, including

the mail, with intent to --

"(1) distribute the proceeds of

any unlawful activity; or

"(2) commit any crime of violence

to further any unlawful activity; or

"(3) otherwise promote, manage,

establish, carry on, or facilitate the

promotion, management, establishment,

or carrying on, of any unlawful acti-

vity,

“and thereafter performs or attempts to per-

form any of the acts specified in subpara-

graphs (1), (2), and (3), shall be fined

not more than $10,000 or imprisoned for not

more than five years, or both.

"(b) As used in this section ‘unlawful

activity’ means (1) any business enterprise

involving gambling, liquor on which the

Federal excise tax has not been paid, nar-

cotics or controlled substances (as defined

in section 102(6) of the Controlled Sub-

stances Act), or prostitution offenses in

violation of the laws of the State in which

they are committed or of the United States,

or (2) extortion, bribery, or arson in vio-

lation of the laws of the State in which

committed or of the United States.

"(c) Investigations of violations under

120

this section involving liquor shall be con-

ducted under the supervision of the Secre-

tary of the Treasury."

18 U.S.C § 1961 Definitions

"As used in this chapter --

"(1) ‘racketeering activity’ means (A)

any act or threat involving murder, kidnap-

ping, gambling, arson, robbery, bribery,

extortion, or dealing in narcotic or other

dangerous drugs, which is chargeable under

State law and punishable by imprisonment

for more than one year; (B) any act which

is indictable under any of the following

provisions of title 18, United States Code:

Section 201 (relating to bribery), section

224 (relating to sports bribery), sections

471, 472, and 473 (relating to counterfeit-

ing), section 659 (relating to theft from

interstate shipment) if the act indictable

under section 659 is felonious, section 664

(relating to embezzlement from pension and

welfare funds), sections 891-894 (relating

to extortionate credit transactions), sec-

tion 1084 (relating to the transmission of

gambling information), section 1341 (rela-

ting to mail fraud), section 1343 (relating

to wire fraud), section 1510 (relating to

obstruction of justice), section 1510

(relating to obstruction of criminal

investigations), section 151ll (relating to

the obstruction of State or local law

enforcement), section 1951 (relating to

interference with commerce, robbery, or

extortion), section 1952 (relating to rack-

eteering), section 1953 (relating to inter-

state transportation of wagering parapher-

121

nalia), section 1954 (relating to unlawful

welfare fund payments), section 1955 (rela-

ting to the prohibition of illegal gambling

businesses), sections 2314 and 2315 (rela-

ting to interstate transportation of stolen

property), sections 2341-2346 (relating to

trafficking in contraband cigarettes),

sections 2421-24 (relating to white slave

traffic), (C) any act which is indictable

under title 29, United States Code, section

186 (dealing with restrictions on payments

and loans to labor organizations) or sec-

tion 50l(c) (relating to embezzlement from

union funds), or (D) any offense involving

fraud connected with a case under title ll,

fraud in the sale of securities, or the

felonious manufacture, importation, re-

ceiving, concealment, buying, selling, or

otherwise dealing in narcotic or other

dangerous drugs, punishable under any law

of the United States;

"(2) ‘State’ means any State of the

United States, the District of Columbia,

the Commonwealth of Puerto Rico, any ter-

ritory or possesion of the United States,

any political subdivision, or any depart-

ment, agency, or instrumentality thereof;

"(3) ‘person’ includes any individual

or entity capable of holding a legal or

beneficial interest in property;

"(4) ‘enterprise’ includes any indi-

vidual, partnership, corporation, associa-

tion, or other legal entity, and any union

or group of individuals associated in fact

although not a legal entity;

"(5) ‘pattern of racketeering activity'

requires at least two acts of racketeering

122

activity, one of which occurred after the

effective date of this chapter and the last

of which occurred within ten years (exclud-

ing any period of imprisonment) after the

commission of a prior act of racketeering

activity;"

18 U.S.C. § 1962 Prohibited activities

"(c) It shall be unlawful for any per-

son employed by or associated with any

enterprise engaged in, or the activities of

which affect, interstate or foreign com-

merce, to conduct or participate, directly

or indirectly, in the conduct of such enter-

prise's affairs through a pattern of racke-

teering activity or collection of unlawful

debt.

"(d) It shall be unlawful for any person

to conspire to violate any of the provisions

of subsections (a), (b), or (cc) of this sec-

tion."

18 U.S.C. § 1963 Criminal penalties

"(a) Whoever violates any provision of

section 1962 of this chapter shall be fined

not more than $25,000 or imprisoned not more

than twenty years, or both, and shall for-

feit to the United States (1) any interest

he has acquired or maintained in violation

of section 1962, and (2) any interest in,

security of, claim against, or property or

contractual right of any kind affording a

source of influence over, any enterprise

which he has established, operated, con-

123

trolled, conducted, or participated in the

conduct of, in violation of section 1962.

"(b) In any action brought by the

United States under this section, the dis-

trict courts of the United States shall have

jurisdiction to enter such restraining orders

or prohibitions, or to take such other ac-

tions, including, but not limited to, the

acceptance of satisfactory performance bonds,

in connection with any property or other

interest subject to forfeiture under this

section, as it snall deem proper.

"“(c) Upon conviction of a person under

this section, the court shall authorize the

Attorney General to seize all property or

other interest declared forfeited under

this section upon such terms and conditions

as the court shall deem proper. If a prop-

erty right or other interest is not exer-

cisable or transferable for value by the

United States, it shall expire, and shall

not revert to the convicted person. All

provisions of law relating to the disposi-

tion of property, or the proceeds from the

sale thereof, or the remission or mitiga-

tion of forfeitures for violation of the

customs laws, and the compromise of claims

and the award of compensation to informers

in respect of such forfeitures shall apply

to forfeitures incurred, or alleged to have

been incurred, under the provisions of this

section, insofar as applicable and not in-

consistent with the provisions hereof. Such

duties as are imposed upon the collector of

customs or any other person with respect to

the disposition of property under the cus-

toms laws shall be performed under this

chapter by the Attorney General. The United

States shall dispose of all such property

124

as soon as commercially feasible, making

the provision for the rights of innocent

persons."

18 U.S.C. § 1964 Civil remedies

"(a) The district courts of the United

States shall have jurisdiction to prevent

and restrain violations of section 1962 of

this chapter by issing appropriate orders,

including, but not limited to: ordering

any person to divest himself of any inte-

rest, direct or indirect, in any enterprise;

imposing reasonable restrictions on the

future activities or investments of any

person, including, but not limited to, pro-

hibiting any person from engaging in the

same type or endeavor as the enterprise

engaged in, the activities of which affect

interstate or foreign commerce; or ordering

dissolution or reorganization of any enter-

prise, making due provision for the rights

of innocent persons.

"(b) The Attorney General may insti-

tute proceedings under this section. In

any action brought by the United States

under this section, the court shall proceed

as soon as practicable tc the hearing and

determination thereof. Pending final deter-

mination thereof, the court may at any time

enter such restraining orders or prohibi-

tions, or take such other actions, includ-

ing the acceptance of satisfactory perform-

ance bonds, as it shall deem proper.

"(c) Any person injured in his busi-

ness or property by reason of a violation

of section 1962 of this chapter may sue

125

therefor in any appropriate United States

district court and shall recover threefold

the damages he sustains and the cost of

the suit, including a reasonable attorney's

fee.

"(d) A final judgment or decree ren-

dered in favor of the United States in any

criminal proceeding brought by the United

States under this chapter shall estop the

defendant from denying the essential allega-

tions of the criminal offense in any subse-

quent civil ssaieiaee tae brought by the United

States."

29 U.S.C. § 151 Findings and declaration

of policy

"The denial by some employers of the

right of employees to organize and the

refusal by some employers to accept the

procedure of collective bargaining lead to

strikes and other forms of industrial strife

or unrest, which have the intent or the

necessary effect of burdening or obstructing

commerce by (a) impairing the efficiency,

safety, or operation of the instrumentali-

ties of commerce; (b) occurring in the cur-

rent of commerce; (c) materially affecting,

restraining, or controlling the flow of raw

materials or manufactured or processed goods

from or into the channels of commerce, or

the prices of such materials or goods in

commerce; or (d) causing diminution of em-

ployment and wages in such volume as sub-

stantially to impair or disrupt the market

for goods flowing from or into the channels

of commerce.

126

"The inequality of bargaining power

between employees who do not possess full

freedom of association or actual liberty

of contract, and employers who are organized

in the corporate or other forms of ownership

association substantially burdens and af-

fects the flow of commerce, and tends to

aggravate recurrent business depressions,

by depressing wage rates and the purchasing

power of wage earners in industry and by

preventing the stabilization of competitive

wage rates and working conditions within

and between industries.

"Experience has proved that protection

by law of the right of employees to organize

and bargain collectively safeguards com-

merce from injury, impairment, or inter-

ruption, and promotes the flow of commerce

by removing certain recognized scurces of

industrial strife and unrest, by encourag-

ing practices fundamental to the friendly

adjustment of industrial disputes arising

out of differences as to wages, hours, or

other working conditions, and by restoring

equality of bargaining power between em-

ployers and employees.

"Experience has further demonstrated

that certain practices by some labor orga-

nizations, their officers, and members have

the intent or the necessary effect of bur-

dening or obstructing commerce by prevent-

ing the free flow of goods in such com-

merce through strikes and other forms of

industrial unrest or through concerted

activities which impair the interest of the

public in the free flow of such commerce.

The elimination of such practices is a

necessary condition to the assurance of the

rights herein guaranteed.

127

"It is declared to be the policy of the

United States to eliminate the causes of

certain substantial obstructions to the free

flow of commerce and to mitigate and elimi-

nate these obstructions when they have oc-

curred by encouraging the practice and

procedure of collective bargaining and by

protecting the exercise by workers of full

freedom of association, self-organization,

and designation of representatives of their

own choosing, for the purpose of negotia-

ting the terms and conditions of their

employmnet or other mutual aid or protec-

tion."

29 U.S.C. § 152 Definitions

"(9) The term ‘labor dispute’ includes

any controvery concerning terms, tenure or

conditions of employment, or concerning the

association or representation of persons in

negotiating, fixing, maintaining, changing,

or seeking to arrange terms or conditions

of employment, regardless of whether the

disputants stand in the proximate relation

of employer and employee."

29 U.S.C. § 157 Right of Employees as to

Organization, collective

bargaining, etc.

"Employees shall have the right to self-

organization, to form, join, or assist labor

organizations, to bargain collectively

through representatives of their own choos-

ing, and to engage in other concerted acti-

vities for the purpose of collective bar-

128

gaining or other mutual aid or protection,

and shall also have the right to refrain

from any or all of such activities except

to the extent that such r’ ght may be af-

fected by an agreement requiring member-

ship in a labor organization as a condition

of employment as authorized in section

158(a) (3) of this title.”

29 U.S.C. § 401 Congressional declara-

tion of findings, pur-

poses, and policy

"(a) The Congress finds that, in the

public interest, it continues to be the

responsibility of the Federal Government to

protect employees' rights to organize,

choose their own representatives, bargain

collectively, and otherwise engage in con-

certed activities for their mutual aid or

protection; that the relations between

employers and labor organizations and the

millions of workers they represent have a

substantial impact on the commerce of the

Nation; and that in order to accomplish

the objective of a free flow of commerce

it is essential that labor organizations,

employers, and their officials adhere to

the highest standards of responsibility

and ethical conduct in administering the

affairs of their organizations, particu-

larly as they affect labor-management

relations.

"(b) The Congress further finds, from

recent investigations in the labor and

management fields, that there have been a

number of instances of breach of trust,

corruption, disregard of the rights of

129

individual employees, and other failures to

observe high standards of responsibility

and ethical conduct which require further

and supplementary legislation that will

afford necessary protection of the rights

and interests of employees and the public

generally as they relate to the activities

of labor organizations, employers, labor

relations consultants, and their officers

and representatives.

"(c) The Congress, therefore, further

finds and declares that the enactment of

this chapter is necessary to eliminate or

prevent improper practices on the part of

labor organizations, employers, labor

relations consultants, and their officers

and representatives which distort and de-

feat the policies of the Labor Management

Relations Act, 1947, as amended, and the

Railway Labor Act, as amended, and have the

tendency or necessary effect of burdening

or obstructing commerce by (1) impairing

the efficiency, safety, or operation of the

instrumentalities of commerce; (2) occur-

ring in the current of commerce; (3) mate-

rially affecting, restraining, or control-

ling the flow of raw materials or manu-

factured or processed goods into or from

the channels of commerce, or the prices

of such materials or goods in commerce;

or (4) causing diminution of employment

and wages in such volume as substantially

to impair or disrupt the market for goods

flowing into or from the channels of com-

merce."

130

29 U.S.C. § 501 Piduciary responsibility

of officers of labor

organizations

Duties of officers; exculpatory provisions

and resolutions void

"(a) The officers, agents, shop stew-

ards, and other representatives of a labor

Organization occupy positions of trust in

relation to such organization and its mem-

bers as a group. It is, therefore, the

duty of each such person, taking into

account the special problems and functions

of a labor organization, to hold its money

and property solely for the benefit of the

Organization and its members and to man-

age, invest, and expend the same in accord-

ance with its constitution and bylaws and

any resolutions of the governing bodies

adopted thereunder, to refrain from dealing

with such organization as an adverse party

in any matter connected with his duties and

from holding or acquiring any pecuniary or

personal interest which conflicts with the

interests of such organization, and to

account to the organization for any profit

received by him in whatever capacity in

connection with transactions conducted by

him or under his direction on behalf of

the organization. A general exculpatory

provision in the constitution and bylaws

of such a labor organization or a general

exculpatory resolution of a governing body

purporting to relieve any such person of

liability for breach of the duties declared

by this section shall be void as against

public policy.

131

Violation of duties; action by member

after refusal or failure by labor

organizati

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