Petition — JAMES E. E. FISHER v. UNITED STATES (Nos. 81-962, 81-828, 81-936, 81-952)

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Supreme Court of the United States

OcTOBER TERM, 1981

JAMES E. FISHER,

Petitioner

versus

UNITED STATES OF AMERICA,

Respondent

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

DAN RYAN

RYAN & MARSHALL

822 Houston Bar Center eat rr L

Building

723 Main Street Attorneys for Petitioner

Houston, Texas 77002

October 30, 1981

——————e—_—E———————————

Alpha Law Brief Co., One Main Plaza, No. 1 Main St., Houston, Texas 77002

QUESTIONS PRESENTED

I. Who has the burden of proof and what is the stand-

ard of review in the appellate court when the Gov-

ernment appeals the trial court’s dismissal of an

indictment?

II. Can the RICO statute properly be applied to a

Defendant with no connection to the persons or

activities of organized crime?

III. Does the indictment allege facts sufficient to con-

stitute a violation of the Texas commercial bribery

statute?

IV. Are the certification regulations of the Emergency

Petroleum Allocation Act unconstitutionally vague

for purposes of a criminal prosecution?

TABLE OF CONTENTS

QUESTIONS PRESENTED ..............-eeseeeeees

TABLE OF AUTHORITIES ...............0eeeeeeees

SE CEE eS ewnivcescccccccdscuscevecseces

STATEMENT OF JURISDICTION ..................

STATEMENT OF THE CASE ...............ceeeeees

ARGUMENT AND AUTHORITIES

II.

THE FIFTH CIRCUIT ERRED IN REVERSING

THE TRIAL COURT’S DISMISSAL OF THE IN-

DICTMENT BECAUSE THE CIRCUIT COURT

IMPROPERLY SHIFTED THE BURDEN ON AP-

PEAL Msg APPLIED THE WRONG TEST OF

POEs ce cccceveccescccedsccsccsccccesccccces

A. The Burden Rested Upon the Government .......

B. The Test on Review in the Circuit Court was Abuse

EP EEE Sabb nuh eoedsddeenvenededébcaouse ;

C. If the Basis of the Trial Court’s Order of Dismissal

was Unclear, The Fifth Circuit Should have Re-

quested Further Clarification. ...................

THE FIFTH CIRCUIT ERRED IN REVERSING

THE TRIAL COURT’S DISMISSAL OF THE IN-

DICTMENT BECAUSE THE INDICTMENT IS

AN INAPPROPRIATE USAGE OF THE RICO

BREE hs cencsegsccseweccsoceneodevevcceces

A. The Undisputed Purpose of the RICO Statute is

the Control of Organized Crime. ................

B. Defendant Fisher Had no Connection with Organ-

By MEE. ncunvancdccedosnccassdceesvoecio‘se

C. The Prosecution of Defendant Fisher Under RICO

Carries the Statute Beyond Its Intended Bounds.

. THE FIFTH CIRCUIT ERRED IN REVERSING

THE TRIAL COURT’S DISMISSAL OF THE IN-

DICTMENT BECAUSE THE INDICTMENT DOES

NOT CONTAIN FACTS SUFFICIENT TO CON-

STITUTE COMMERCIAL BRIBERY. ............

Page

IV. THE FIFTH CIRCUIT ERRKED IN REVERSING

THE TRIAL COURT’S DISMISSAL OF THE IN-

DICTMENT BECAUSE THE EMERGENCY PE-

TROLEUM ALLOCATION ACT CERTIFICATION

REGULATIONS UPON WHICH APPELLANT'S

PROSECUTION IS GROUNDED ARE UNCON-

STITUTIONALLY VAGUE. ...........e0eeeeeee: 16

A. Constitutionality of the yo Regulations is Essen-

tial to the Prosecutorial Scheme ...............- 16

B. The EPAA Certification Regulations do not Pro-

vide Constitutional Fair Notice. ................ 23

V. THE FIFTH CIRCUIT ERRED IN REVERSING

THE TRIAL COURT’S DISMISSAL OF THE IN-

DICTMENT BECAUSE THAT COURT HAD NO

JURISDICTION TO REVIEW ADJUDICATION

BY THE TRIAL COURT OF EMERGENCY PE-

TROLEUM ALLOCATION ACT ISSUES. ......... 29

VI. THE FIFTH CIRCUIT ERRED IN REVERSING

THE TRIAL COURT’S DISMISSAL OF THE IN-

DICTMENT BECAUSE THE EMERGENCY PE-

TROLEUM ACT PREEMPTED THE RELEVANT

PROVISIONS OF TITLE EIGHTEEN TO THE EX-

TENT THEY MIGHT HAVE PERTAINED TO

ALLEGATIONS IN THIS INDICTMENT. ........ 30

EC NAGE LR Ee Sena a ne 30

CERTIFICATE OF GERVICE ......ccccccccccccccess 31

TABLE OF AUTHORITIES

CASES

Barr v. WUI/TAS, Inc., 66 F.R.D. 109 (1975) ..........

Basin, Inc. v. Federal Energy Administration, 534 F.2d 324

DU PD Soave cceenne scenes eteeeecvanncess

Boyce Motor Lines v. United States, 342 U.S. 337 (1952) .

Brennan v. Occupational Safety and Health Review Com-

mission, 505 F.2d 869 (10th Cir. 1974) ..............

Carrado v. United States, 210 F.2d 712 (D.C. Cir. 1953) .

"0 te General Construction Company, 269 U.S. 385

SEED C6 O60 60 Gese cee cabeccedconcceseesoeeceeeoese

Dedemore v. United States, 322 F.2d 938 (9th Cir. 1963) .

Diebold, Inc. v. Marshall, 585 F.2d 1327 (6th Cir. 1978) .

Grayned v. City of Rockford, 408 U.S. 106 (1972) .......

Hanna v. United States, 404 F.2d 405 (Sth Cir, 1968) ...

Krause and Brothers v. United States, 327 U.S. 614 (1946)

Kreda v. Rush, 550 F.2d 888 (3rd Cir. 1977) ...........

Lanzetta v. New Jersey, 306 U.S. 451 (1939) ...........

Mobil Oil Corp. v. Federal Energy Administration, 435 F.

Se, Gee GR BU BEE oc ccccccccccccvcessocces

In re Pope, 580 F.2d 620 (D.C. Cir. 1978) .............

Power Plant Div. v. Occupational Safety and Health Re-

view Commission, 590 F.2d 1363 (Sth Cir. 1979) ......

Russell v. United States, 369 U.S. 749 (1962) ...........

Truchinski v. United States, 393 F.2d 627 (8th Cir. 1969)

United States v. Blumberg, 258 F.Supp. 885 (D. Del. 1966)

United States v. Boylan, 620 F.2d 359 (2nd Cir. 1980) ...

United States v. Brown, 555 F.2d 407 (Sth Cir. 1977) ....

United States v. Campanale, 518 F.2d 352 (9th Cir. 1975)

United States v. Forsyth, 560 F.2d 560 (3rd Cir. 1977) ...

United States v. Harris, 347 U.S. 612 (1954) ............

United States v. Hawes, 529 F.2d 472 (Sth Cir. 1976) ....

United States v. Insco, 496 F.2d 204 (Sth Cir. 1974) .....

United States v. Lee, 413 F.2d 910 (7th Cir. 1969) .......

United States v. Mandel, 415 F.Supp. 997 (D. Md. 1976)

United States v. McLaurin, 557 F.2d 1064 (Sth Cir. 1977)

United States v. Morrison, 436 F.2d 286 (9th Cir. 1979) ..

United States v. Poore, 594 F.2d 39 (4th Cir. 1979) ......

United States v. Schwartz, 464 F.2d 449 (2nd Cir. 1972) .

United States v. Tane, 339 F.2d 848 (2nd Cir. 1964) .....

United States v. Theriault, 526 F.2d 698 (Sth Cir. 1976) .

Page

10, 11, 13

United States v. Uni Oil, 646 F.2d 946 (Sth Cir. 1981) ..4,5,8, 18

; Page

STATUTES

Racketeer Influenced and Corrup: Organizations Act, Pub.

L. No. 91-452 84 Stat. 922 (1970) ............000ee. 7,11,12

18 U.S.C. § 1001, ef seg. (1976) .........cceccceeeeee 22

18 U.S.C. § 1961, et seg. (Supp. 1981) ..........00000e 7,9

1S US.C. § 751, ef seg. (Supp. 1973) ......ccccccccees 19, 26

Tex. Penal Code Ann. § 32.43 (Vernon 1974) .......... 14, 15

Tex. Penal Code Ann. § 36.02 (Vernon 1974) .......... 9

REGULATIONS

10 C.F.R. § 210.921(a)(b) (1976) pg. 25 .............. 25

10 C.F.R. § 212.131(a)(2) (1973) pg. 20 .............. 20, 25

10 C.F.R. § 212.131(b)(1) (1976) pg. 25, 27 .......... 20, 25, 27

ey ey Gs Ge GOED avcedccvcceceveveocseeneeenes 26

Ded, BR. Cov. B. 8B cccccccccccccoccccccs TITTTTT ITT ° 6

NO.

Supreme Court af the United States

OcTOBER TERM, 1981

JAMES E. FISHER,

Petitioner

versus

UNITED STATES OF AMERICA,

Respondent

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

OPINIONS BELOW

The opinion of the Fifth Circuit Court of Appeals is

reported at 646 F.2d 946 (Sth Cir. 1981). The District

Court, Honorable Ross N. Sterling, in dismissing the

indictment issued no formal written opinion.

STATEMENT OF JURISDICTION

The jurisdiction of this Court is invoked under 28

U.S.C. §1254 (1) (1966).

STATEMENT OF THE CASE

On March 7, 1979 a Houston grand jury returned an

eighty four count indictment against two oil companies

and -five individuals, including Petitioner Fisher. The

underlying theme of the entire indictment is a supposed

fraudulent scheme to miscertify and sell crude oil. The

specific charges include conspiracy to violate the Racke-

teer Influenced and Corrupt Organizations Act (RICO),

a pattern of racketeering activities under RICO, mail

fraud, wire fraud and false statements pursuant to 18

U.S.C. §1001. Each of these counts is founded upon al-

leged noncompliance with certification regulations pro-

mulgated by the Federal Energy Administration (now,

Department of Energy).

Petitioner Fisher was, at the times in question, an

employee of Uni Oil, Inc., a small company in the busi-

ness of reselling crude oil. The oil industry labors under

extensive federal regulation, including regulations issued

in association with the Emergency Petroleum Allocation

Act (EPAA). That statute was passed in 1973 princi-

pally to control the price of domestically produced oil,

so as to combat the effect of the Arab oil embargo. The

essence of this price control program was classification

of crude oil as “old” or “new” oil, depending upon the

date of its production. New oil could be sold at prices

substantially higher than those for old oil.

The purpose of the certification regulations was to

denominate oil as new or old, so that purchasers could

distinguish one from the other in the marketplace. Regula-

tions which initially applied only to producers were in

time extended to resellers as well. As a consequence,

resellers of crude oil become obligated to certify to buyers

the amounts of old and new oil which were being sold.

Alleged miscertification under these regulations lies at

the heart of each count in the present indictment and

forms the basis of each Title 18 offense charged.

Each of the defendants filed motions to dismiss the

indictment. Following an extensive hearing on May 29,

1979, the Honorable Ross N. Sterling of the United

States District Court for the Southern District of Texas

granted these motions and the indictment was dismissed.

A brief order without discussion or authorities was sub-

sequently signed by the Court. On July 24, 1979 Judge

Sterling also dismissed a later, similar indictment against

Mid-Atiantic Petroleum Company, Ltd. and eight other

corporate and individual defendants. The appeals of

these two cases by the Government were consolidated

before the Fifth Circuit Court of Appeals.

On May 19, 1981 a three-judge panel of the Fifth

Circuit Court of Appeals issued an opinion which re-

versed the District Court’s dismissal of the indictment.

The Defendants/Appellees filed Motions For Rehearing

and Rehearing En Banc, which were denied by the Fifth

Circuit Court of Appeals on September 4, 1981. It is

from the Fifth Circuit’s reversal of the District Court

that this appeal is perfected by way of this Petition

for Writ of Certiorari.

THE FIFTH CIRCUIT ERRED IN REVERSING THE

TRIAL COURT’S DISMISSAL OF THE INDICTMENT

BECAUSE THE CIRCUIT COURT IMPROPERLY

SHIFTED THE BURDEN ON APPEAL AND APPLIED

THE WRONG TEST OF REVIEW.

A. The Burden Rested Upon the Government.

The appeal of this cause before the Fifth Circuit Court

of Appeals as to James E. Fisher was one by the Govern-

ment contesting the Trial Court’s granting of Fisher’s

motion to dismiss a voluminous eighty-four cows: indict-

ment against him. On appeal, the burden of demonstrating

prejudicial error rested squarely upon the party attacking

the Trial Court’s ruling. Hanna v. United States, 404

F.2d 405, 406 (Sth Cir. 1968); Dedemore v. United

States, 322 F.2d 938, 946 (9th Cir. 1963). Even a cur-

sory review of the Fifth Circuit Court’s sixteen page

opinion, however, will reveal that the burden on appeal

before that court was imposed upon Mr. Fisher and his

fellow Appellees. See United States v. Uni Oil, 646 F.2d

946 (Sth Cir. 1981). Nowhere does the opinion of the

lower court acknowledge the Government’s obligation

to prove error. Rather, the opinion poses each of the

grounds for dismissal raised in the lower court by the

various Defendants—Appellees and then sets out to hold

each such ground insufficient, as though the Appellees

before that court were the appealing parties. For example,

in discussing the challenge to the indictment because

counts under the Racketeer Influenced and Corrupt Or-

ganizations Act were included, the Fifth Circuit declared:

In order to dismiss an indictment for failure to state

an offense we must find that the indictment ‘contains

the elements of the offense intended to be charged.’

Uni Oil at 953 (emphasis added). The cases cited for

that proposition, however, were cases in which the de-

fendants were the appellants, complaining of the suf-

ficiency of the indictments, just the opposite of the

present case. The Fifth Circuit Court in this case was

reviewing the dismissal of an indictment, not a refusal

to dismiss, and it manifestly was not required to find

that the indictment “does not contain the elements of

the offense to be charged.” That approach prejudicially

shifted the burden to show error onto the Defendants-

Appellees before that court and constituted reversible

error.

By way of further example, in the succeeding section

of its opinion, the Fifth Circuit addressed the complaint

that the indictment is defective for failing to delineate the

various elements of commercial bribery, one supposed

example of “racketeering activities.” The Circuit Court

conceded that the indictment fails to “allege each element

of commercial bribery separately” and that this con-

stitutes a “deficiency.” (Uni Oil at 954). Nonetheless,

the Court noted the usual test of sufficiency articulated

in Russell v. United States, 369 U.S. 749, 82 S.CT. 1038

(1962) and, while observing that it did “not condone

the Government’s sloppiness,” Uni Oil at 954, decided

that the indictment passes the Russell test. That, however,

was decidedly not the question before the Court. This

is not a circumstance in which the indictment tracks

exactly the statute being charged, with the burden thus

falling upon the defendant to point out what additional

allegations are necessary to fulfill the statutory purpose.

Rather, the Fifth Circuit’s role was to decide only whether

the Trial Court, in determining that the indictment was

deficient, was guilty of an outright abuse of discretion

in so ruling and dismissing the faulty indictment.

B. The Test on Review in the Circuit Court was

Abuse of Discretion.

Nowhere in its opinion does the Circuit Court acknowl-

edge or apply the abuse of discretion test, which is the

appropriate test when reviewing a Trial Court’s dismissal

of an indictment. See. e.g., United States v. Poore, 594

F.2d 39 (4th Cir. 1979); United States v. Schwartz,

464 F.2d 449, 511 (2nd Cir. 1972); United States v.

Lee, 413 F.2d 910 (7th Cir. 1969) cert. den. 396 U.S.

1022, 90 S. Ct. 595; Truchinski v. United States, 393

F.2d 627 (8th Cir. 1968) cert. den. 393 U.S. 831, 89 S.

Ct. 104; United States v. Tane, 329 F.2d 848 (2nd Cir.

1964); Carrado v. United States, 210 F.2d 712, 717

(D.C. Cir. 1953). The Fifth Circuit was not called upon

to agree with Judge Sterling or to say that it, in the same

position, would have ruled as he did. The Circuit Court

was not to reverse unless the Government proved an

actual abuse of discretion in the Judge’s ruling, and this

the Government failed to do. Indeed, there was never

even any attempt to demonstrate abuse of discretion.

C. if the Basis of the Trial Court’s Order of Dis-

missal was Unclear, The Fifth Circuit Should

Have Requested Further Clarification.

The Trial Court was not required to state grounds

for its ruling, e.g. FED. R. CIV. P. 12, although the

Government could have easily requested reasons if it

had cared to. No complaint of this character was raised

in the Government’s briefs before the Fifth Circuit in

the course of carrying its burden to demonstrate error.

However, if there was doubt in the minds of the Fifth

Circuit as to the Trial Court’s grounds for dismissal,

proper procedure would have been for the Circuit Court

to retain jurisdiction of the appeal and to request a clarifi-

cation from the Trial Court as to the reasons for its

decision. See e.g., United States v. Theriault, 526 F.2d

698, 699 (Sth Cir 1976); In re Pope, 580 F.2d 620,

623 (D.C. Cir. 1978); Kreda v. Rush, 550 F.2d 888,

890 (3rd Cir. 1977). This device would have allowed

for the considerable discretion accorded the District Court

in assessing the sufficiency of indictments, as well as for

the opportunity simply to reindict properly, and the

heavy burden upon the Government, as appellant in the

court below, to show that the District Court was guilty

of abuse of discretion. Instead, the Fifth Circuit simply

burdened the Defendants, who were Appellees before

that Court, with the onus of justifying the Trial Court’s

ruling, at the peril of reversal if the Circuit Court did

not exactly agree with the ruling made by the Trial Court.

The prejudice to Defendant Fisher and others in his posi-

tion is apparent: saddled with the improper burden of

demonstrating defects in the indictment de novo they

now find theinselves Petitioners before this Court.

Il.

THE FIFTH CIRCUIT ERRED IN REVERSING THE

TRIAL COURT’S DISMISSAL OF THE INDICTMENT

BECAUSE THE INDICTMENT IS AN INAPPROPRI-

ATE USAGE OF THE RICO STATUTE.

A. The Undisputed Purpose of the RICO statute is

the Control of Organized Crime.

The Racketeer Influenced and Corrupt Organizations

Act, now codified at 18 U.S.C. § 1961 ef. seg. (Supp.

1981), was originally enacted as Title [IX of the Or-

ganized Crime Control Act of 1970. See Racketeer In-

fluenced and Corrupt Organizations Act, Pub. L. No.

91-452, 84 Stat. 922, 941 (1970). The Statement of

Findings and Purposes of that Act makes it abundantly

clear that the Act was enacted for the purpose of pro-

viding new remedies to the Government for combating

the pervasive problem of organized crime. In cases such

as United States v. Boylan, 620 F.2d 359 (2nd Cir.

1980) and United States v. Brown, 555 F.2d 407 (Sth

Cir. 1977), the Courts have quoted directly from this

Findings and Purposes section of the Act to demonstrate

how clear-cut the legislative intent was. Even the opinion

rendered by the Fifth Circuit in the case at bar concedes

that “the legislative history of RICO vividly demonstrates

that is was primarily enacted to combat organized crime.”

United States v. Uni Oil, 646 F.2d 946 (Sth Cir. 1981).

Thus, the title of the Act that produced this statute, the

legislative history of the statute, and the cases litigated

under the statute, all plainly indicate that the RICO

statute was primarily intended to combat organized crime.

B. Defendant Fisher Had no Connection with

Organized Crime.

Nowhere in the indictment is there any allegation that

Defendant Fisher was in any way connected with organ-

ized crime personalities. Rather, the indictment makes it

abundantly clear that Fisher was a legitimate business-

man engaging in complex transactions involving the buy-

ing and selling of crude oil. The indictment almost sug-

gests by omission that Defendant Fisher was not involved

in organized crime or dealing with members of organized

crime. While such involvement or association is not

absolutely essential for prosecution under the racketeering

statute, it is a factor that should weigh heavily in con-

sidering the over-zealous extension of this statute to areas

far beyond the original congressional intent.

Appellate opinions in other RICO prosecutions have

pointed out, however, that the RICO statute is not di-

rected toward the “status” of organized crime, but the

“activities” of organized crime. The Fifth Circuit opinion

in the case at bar points out that “membership in organ-

ized crime is not a necessary element of a RICO con-

viction.” Uni Oil at 953. It is necessary, however, to

demonstrate that the Defendant was engaged in “racke-

teering activities.” The list of racketeering activities pro-

vided by the statute includes such traditional organized

crime activities as gambling, prostitution, and extortion.

The only traditional organized crime activity of which

Defendant Fisher is even accused is bribery, and that

accusation warrants close scrutiny.

The RICO statute authorizes prosecution for business

activities in connection with state bribery statutes. 18

U.S.C.A. 1961(1) (Supp. 1981). The Texas bribery

statute follows the common law rule, and the standard

adhered to in most states, and defines bribery as the

conferring of a benefit on a public official for certain

acts in the exercise of his official powers. Tex. Pen. Code

Ann. § 36.02 (Vernon 1974). Moreover, the case of

United States v. Forsyth, 560 F.2d 1127 (3rd Cir. 1977),

points out that when the RICO statute refers to acts

prohibited by state bribery statutes it is referring to a

generic description of bribery. The opinion in that case

then provides a generic description of bribery as “conduct

which is intended, at least by the alleged briber, as an

assault on the integrity of a public office or an official

action.” Forsyth at 1137. There is no allegation in the

indictment that Fisher or the other Defendants ever made

any payments to public officials .. in any way attempted

to exert any influence on official actions. Under the

common law definition of bribery, the standard provided

in the Texas Penal Code, and the generic description of

bribery that the RICO statute was meant to encompass,

there was no bribery in this case.

With the allegation of bribery eliminated as a considera-

tion, the only remaining activities of which Defendant

Fisher is accused, and upon which the RICO indictment

is grounded, are federal mail fraud and wire fraud. These

allegations are based upon the fact that the Defendents

violated EPAA oil pricing guidelines, and some of the

transactions constituting these violations were conducted

through the mails and over the wires. The real evil that

the Government is concerned about here is the violation

of federal energy regulations. Yet, since such violations

are not “racketeering activities,” they alone will not

suffice to invoke the RICO statute. Accordingly, the

Government has strained to pull the regulation violations

through the mail and wire fraud statutes in order in-

directly to step under the RICO umbrella with its stricter

penalties and forfeiture provisions. This approach could

lead to a very dangerous form of bootstrapping. If this

practice is sanctioned, anyone who violates any federal

regulation, and at some point in the transaction happens

to use the mails or the telephone—which is almost always

the case—would be subject to prosecution under the

RICO statute. Surely Congress did not intend for the

RICO statute to be applied so broadly as to suddenly

classify virtually all violators of federal regulations as

“racketeers.”

This fear was expressed by a Federal Court in the

remarkably similar case of Barr v. WUI/TAS, Inc., 66

F.R.D. 109 (1975). That case involved a private civil

action under the RICO statute, rather than a criminal

prosecution, but all of the other facts were very close

to the instant case. The Defendants allegedly violated

federal regulations involving wage and price controls in

the early 1970’s. Since the Defendants transacted business

through the mails, Plaintiff sought to bootstrap his

attack from regulation violations to mail fraud to RICO

—just as the Government has done in the case at bar.

The Court firmly rejected this misuse of the RICO statute.

It conceded that mail fraud technically comes within the

statutory definition of “racketeering activities,” but pointed

to the clear legislative history of RICO and refused to

extend that statute to this kind of case. The Court ob-

served that:

It is clear that it was aimed not at legitimate

business organizations but at combatting ‘a society

of criminals who seek to operate outside of the

control of the American people and their Govern-

ments.’ There is no question that Defendant cannot

be so characterized.

Assuming that Plaintiffs’ allegations have merit,

the most that can be said is that Defendants’ trans-

actions, on this occasion, have been illegal. Defend-

ant is not a member of a society of criminals operat-

ing outside of the law.

Barr at 113. The instant case is almost identical to Barr

and the same analysis is persuasive here. Defendant Fisher

was not involved in any real organized crime activities.

C. The Prosecution of Defendant Fisher Under

RICO Carries the Statute Beyond Its Intended

Bounds.

The RICO statute was drafted very broadly out of

necessity. While the statute was directed at members of

organized crime, it would be impractical and unconstitu-

tional to criminalize and punish a class of people because

of their status. Thus, rather than identifying a class of

persons as criminals, the act focuses on a class of ac-

iivities, most of which have been traditionally associated

with organized crime. In compiling this list of activities,

however, the drafters of the RICO statute cut a very

broad swath because of the difficulties of dealing with

organized crime. Because organized crime is so “highly

sophisticated, diversified and widespread,” Racketeer In-

fluenced and Corrupt Organizations Act, supra at § 1,

it is often impossible to discover and prosecute the illicit

activities that organized crime thrives upon. The RICO

statute, then, includes offenses such as wire fraud and

mail fraud to enlarge the net which Federal Prosecutors

might cast over organized crime. These activities were

included as additional tools for the Government to use

in getting to the “racketeers” that the statute was meant

to control—they were not intended to be a means whereby

persons wholly outside of organized crime might be sub-

jected to the penalties of the RICO statute. To allow

the statute to be used against persons like Defendant

Fisher, who are clearly not racketeers, is to ignore the

very clear legislative intent of the act.

Admittedly, the line between what is and is not an

activity of organized crime is sometimes a fine one. The

enforcement of the act could not be limited to card-

carrying members of the so-called Mafia, and there may

be many close cases that hover on the border of that

sphere. In such cases good faith prosecution should be

allowed. But there also comes a point at which over-

zealous prosecution steps way beyond that line, where

the use of the RICO statute cannot even arguably be said

to relate to controlling organized crime, and where the

broad terms of the statute, which were intended to aid

in the attack on organized crime, are twisted and manipu-

lated to be used for wholly different purposes. Surely

the prosecution of Defendant Fisher under the racketeer-

ing statute is such a case.

The cases that have been litigated under the RICO

statute provide some guidance in this task of line-drawing.

The cases cited by the Government in previous briefing

on this case all involve some activity that has tradition-

ally been associated with organized crime or racketeering.

For example, United States v. Brown, 555 F.2d 407 (5th

Cir. 1977), involved the bribery of a police department

over a 20 year period to protect gambling, lottery, and

prostitution rackets; United States v. Hawes, 529 F.2d

472 (Sth Cir. 1976), was a gambling prosecution; United

States v. McLaurin, 557 F.2d 1064 (5th Cir. 1977)

concerned an extensive prostitution ring; United States

v. Campanale, 518 F.2d 352 (9th Cir. 1975), involved

an extortion scheme; and United States v. Mandel, 415

F.Supp. 997 (D. Md. 1976), was a prosecution for bribery

of a public official, the Governor of the State of Maryland.

In the instant case there was no bribery of a public

official, no extortion, no prostitution, no gambling, no

numbers games. There was merely a businessman buy-

ing and selling crude oil, sometimes through the mail

and the wires, in a manner which allegedly violated

Federal Energy Regulations.

In contrast to the cases previously cited by the Gov-

ernment, all of which are distinguishable for their heavy

flavor of organized crime, there is one RICO case which

is remarkably similar to the present litigation. The previ-

ously cited case of Barr v. WUI/TAS, Inc. also involved

the violation of federal regulations in an attempt to boot-

strap these violations to the level of mail fraud, and

through that to a RICO violation. In that case the Court

wisely recognized that RICO had been extended far

beyond its original purpose and rejected the attempted

application of RICO.

Thus, the case law reflects the approach which De-

fendant Fisher is urging. In cases that are arguably re-

lated to organized crime and traditional organized crime

acitvities, RICO can and should be applied. The purpose

of the statute should be kept in mind, however, and

when prosecutions under RICO are not even conceivably

related to organized crime, a line should be drawn, the

Court should recognize the prosecution as an overbroad

application of the racketeering statute, and the indict-

ment should be dismissed.

THE FIFTH CIRCUIT ERRED IN REVERSING THE

TRIAL COURT’S DISMISSAL OF THE INDICTMENT

BECAUSE THE INDICTMENT DOES NOT CONTAIN

FACTS SUFFICIENT TO CONSTITUTE COMMER-

CIAL BRIBERY.

One of the allegations of “racketeering activities” used

by the Government to invoke the RICO statute is a

charge of commercial bribery under § 32.43 of the Texas

Penal Code. As previously argued under Point of Error

II, the listing of “business activities in connection with

state bribery statutes” as a racketeering activity proscribed

by the RICO statute was intended to refer to the generic

description of bribery, which pertains to attempts to

influence public officials in their official acts. The “com-

mercial bribery” prohibited by the Texas statute is quite

different from the generic description of bribery that was

intended to be encompassed by the RICO statute. A

RICO indictment based on commercial bribery, then, goes

beyond the intended purposes of the statute, and should

be dismssied.

Even if the Texas commercial bribery statute is an

appropriate foundation for a RICO indictment, however,

the facts alleged in this indictment cannot possibly be

construed as constituting a violation of the commercial

bribery statute. The statute defines commercial bribery

as follows:

(b) A person who is a fiduciary commits an of-

fense if he intentionally solicits, accepts, or agrees

to accept any benefit as consideration for:

(1) violating a duty to a beneficiary; or

(2) otherwise causing harm to a beneficiary by

an act or omission.

confers, or agrees to confer any benefit the accept-

ance of which is an offense under subsection (b) of

this section.

Tex. Penal Code Ann. § 32.43 (Vernon 1974). This

statutory definition utterly fails to encompass the present

situation for three reasons. First, the only recognizable

beneficiaries in these transactions were the Defendants

themselves. Each of the companies involved was prin-

cipally owned by one or more of the Defendants, they

were the only beneficiaries and it was impossible for

them to have violated a duty to themselves. Second, the

commentary to the commercial bribery statute points

out that, “this section is aimed principally at kickbacks.

If the beneficiary expressly or impliedly consents to the

kickback—as is customary in some trades—there is no

violation of duty and hence no violation. . . .” Tex.

Penal Code Ann. § 32.43, Practice Commentary (Vernon

1974). The oil industry is exactly the type of trade where

kickbacks and similar payments are common and ex-

pressly or impliedly consented to. The payments alleged

in the instant case, however, were not even kickbacks,

but simply broker’s fees in accordance with common

industry practices. They wre certainly not intended, nor

did they function, as bribes. Finally, even if there were

other beneficiaries, there is no indication that they were

harmed by the transactions. In fact, the indictment alleges

that the companies involved profited greatly from the

transactions, which renders impossible a violation of duty

or harmful effect on beneficiaries. The indictment fails

to allege any facts which would constitute commercial

bribery. If anything, it alleges facts which would render

commercial bribery impossible.

In the opinion of the Fifth Circuit in the case at bar,

the Court summarily dismissed this argument by char-

acterizing it as an attack on the indictment for failing

to delineate the elements of commercial bribery. The

point urged by Defendant Fisher, however, is not so

much that the federal indictment failed to allege each

and every element of the state statute, but that the facts

alleged and the scenario described in the federal indict-

ment render a violation of the state statute impossible.

Since the indictment under the RICO statute is partially

based on a violation of the state statute regarding com-

mercial bribery, the failure of the indictment to allege

facts sufficient to constitute a violation of that state

statute renders the indictment defective.

IV.

THE FIFTH CIRCUIT ERRED IN REVERSING THE

TRIAL COURT’S DISMISSAL OF THE INDICTMENT

BECAUSE THE EMERGENCY PETROLEUM ALLO-

CATION ACT CERTIFICATION REGULATIONS UP-

ON WHICH APPELLANT’S PROSECUTION IS

GROUNDED ARE UNCONSTITUTIONALLY VAGUE.

A. Constitutionality of the Energy Regulations is

Essential to the Prosecutorial Scheme.

In his motion to dismiss the indictment and accompany-

ing memorandum of authorities presented to the Trial

Court, Defendant James E. Fisher argued that the lengthy

indictment was based upon alleged violation of the

Emergency Petroleum Allocation Act certification regula-

tions and that those regulations, because of vagueness,

failed to provide fair warning of the obligations and re-

sponsibilities they imposed. Both in its written response

to Appellant Fisher’s Motion to Dismiss and in its brief

before the Fifth Circuit, the Government’s reply was

simply that the regulations were irrelevant to this case

inasmuch as the various Defendants were charged with

Title 18 offenses, and not direct violations of the energy

regulations. The Government never contended in the

Trial Court or before the Fifth Circuit, however, that

Appellant Fisher was not attacking the constitutionality

per se. Indeed, in its brief to the Fifth Circuit, the Gov-

ernment acknowledged that “Appellees argued in the

District Court that the underlying certification require-

ments were unconstitutionally vague and that no guidance

was Offered as to the treatments of inventories of crude

oil.” Brief for Appellant at 13-14. (See also the Reply

Brief for Appellant in which it is noted that ‘in their

Motion to Dismiss filed in the District Court, Appellees

argued that the EPAA certification regulations were

unconstitutional.” Reply brief for Appellant at 2-3.)

The Government is surely correct in this representation.

In his brief before the Fifth Circuit Appellant Fisher

contended that ‘if his supposed violation of DOE certi-

fication regulations issued pursuant to the EPAA is to

form the basis of violations of other substantive criminal

statutes, then two things are sure: (1) Those regulations

must be constitutionally adequate for their violation to

serve as a predicate for violation of other criminal

statutes. . . .” Brief for Appellee ‘ames E. Fisher at 9.

The Fifth Circuit, however, discussed the constitution-

ality issue only in the context of deciding whether an

EPAA issue was adjudicated by the District Court. The

Circuit Court ignored the motions and briefs of the

Appellees (Petitioners here) and interpreted the constitu-

tional argument raised as “not an attack on constitution-

ality of the regulations per se but on the constitutionality

of prosecuting a person for conduct that was made

criminal without fair notice.” Uni Oil at 950. With all

due respect to the lower court, this is simply wrong.

The direct question of constitutionality of the certification

regulations was raised; ..e Government’s response was

simply that the regulations were irrelevant inasmuch as

the offenses charged were Title 18 offenses, and not direct

violation of the energy statute. The Fifth Circuit also

falls into this same trap by noting that “there is no charge

of a violation of EPAA regulations.” Uni Oil at 949.

The Fifth Circuit continues its erroneous approach by

concluding that:

In the absence of the existence of the EPA or of any

EPAA regulations it would presumably be a criminal

act to use the mails as part of a scheme to defraud

by falsely certifying facts relating to the provenance

of oil knowingly and with intent to defraud. What

makes the act criminal is not the regulation, but the

use of the mails to carry an untrue document fabri-

cated with fraudulent purpose. Uni Oil at 949.

The Circuit Court cites exactly no authorities for this

assertion that, absent the EPA or EPAA regulations,

use of the mails as part of a scheme to defraud by falsely

certifying facts relating to the source of oil would still

be criminal. The lower court only “presumes this”; that

is not the law. The criminal element, says the Circuit

Court, comes from the use of the mails to carry untrue

documents fraudulently produced. However, the very

(and only) thing which makes any documents in this

case “untrue” is violation of the underlying regulations.

It is conceptually impossible to separate the Title 18

charges from the predicate regulations; it is alleged non-

compliance with those regulations which constitutes the

violation of the substantive felony statutes. If, as here,

the offenses in question consist of a statute superimposed

upon a regulation, then the constitutional scrutiny must

penetrate the first layer and recognize that the violation

of the statute depends upon non-compliance with the

underlying, predicate regulation.

Although the Government has been vigorously attempt-

ing to argue that this case has little to do with the EPAA

regulations, the Grand Jury which returned the indict-

ment in question inextricably bound every count of the

indictment to an alleged violation of the certification regu-

lations. For example, in the very first count the indictment

sets forth the EPAA certification regulations in great

detail:

COUNT ONE

1. At all times material to this Indictment and

specially from, on or about August 1, 1975, con-

tinuing to on or about December 31, 1977:

a. There was in existence the Emergency Petro-

leum Allocation Act (EPAA) of 1973, Title 15,

United States Code, Section 751, et seq., which pro-

vided for mandatory allocation of all crude petro-

leum produced in or imported into the United States.

g. There were also in existence a certification

program with regard to the purchase and sale of

domestic crude petroleum, pursuant to the Emerg-

ency Petroleum Allocation Act of 1973, Title 15,

United States Code, Section 751, et seqg., and regu-

lations set forth by the Federal Energy Administra-

tion, now known as the United States Department

of Energy. Those regulations provided in pertinent

part:

Each seller of domestic crude petroleum, .. .

shall, with respect to each sale of domestic crude

petroleum .. . certify in writing to the purchaser

the amount of old crude petroleum included in the

volume of domestic crude petroleum so sold. The

certification shall also contain a statement that the

price charged for the domestic crude petroleum is

no greater than the maximum price permitted pur-

suant to this part. Title 10, Code of Federal Regu-

lations, Section 212.131(a)(2).

[3]

This section was amended, effective September 1,

1976, as follows:

Each seller of domestic crude oil, . . . shall,

with respect to each sale of domestic crude oil. . .

certify in writing to the purchaser the respective

volumes of and respective per barrel prices for

the old crude oil, new crude oil so sold. The

certification shall also contain a statement that

the price charged for the domestic crude oil is

no greater than the maximum price permitted

pursuant to this part. Title 10, Code of Federal

Regulations, Section 212.131(b)(1).

Indictment, Count One. These regulations were incorpo-

rated by reference into each of the many following counts.

The balance of Count One of the Indictment proceeds

to describe a supposed conspiracy, the object of which

was to certify “old” oil as “new” oil, those terms being

the offspring of the EPAA regulations. Thereafter, Count

Two of the Indictment purports to charge violations of

the Racketeer Influenced and Corrupt Organizations Act

in the form of a “scheme and artifice to defraud” and

prevent the Federal Energy Administration of its right

to have its regulations providing for the certification of

domestic petroleum sales conducted properly and free

of corruption. That scheme is further described as one

to pass off “old” domestic crude oil according to the

regulations, as “new” domestic crude oil and to use the

United States Postal Service in the process of disseminat-

ing fraudulent certifications. This and the remaining mail

fraud counts also charge the Defendants with defrauding

purchasers “who relied under the Federal Energy Regu-

lations on certifications made by Defendants, as to

whether the volume of domestic crude petroleum purchased

were .. . ‘old’ crude petroleum.” Indictment, Counts 3-34.

The Defendants were further accused of carrying out

this alleged fraud by vending oil that was “falsely certi-

fied.” Id.

In short, all of the mail fraud counts were grounded

completely in the existence of EPAA certification regu-

lations and upon the intentional violation of the obliga-

tions imposed by those regulations. Had the various De-

fendants complied with the regulations, no conviction on

any of these counts would be possible. The RICO counts

likewise are simply based upon the alleged scheme of

mail fraud found in Counts 3-34. The wire fraud counts,

Counts 35-59, mirror the mail fraud counts.

Further still, each of the counts charging false state-

ments was also based upon a supposed violation of the

certification regulations. In each of these counts the state-

ment alleged was said to be a “false writing” which was

“caused to be prepared and submitted, pursuant to afore-

said act and regulations” certifying that the sale of certain

crude oil was 100% upper tier crude oil. In each instance,

it is alleged, “the certification” was false. Indictment,

Counts 60-84.

As this discussion reveals, the entire indictment is based

upon alleged violations of the certification regulations

promulgated pursuant to the EPAA. The indictment is

unmistakably constructed throughout so as to ground the

main offenses charged in noncompliance with the certifi-

cation requirements. None of the conduct which sup-

posedly constitutes a felony is illicit absent a showing of

noncompliance with the underlying energy certification

regulations. The Government, in its brief before the Fifth

Circuit, acknowledges as much when it concedes that

“appellees are charged with schemes to miscertify and

mislabel crude oil. . . .” Brief For Appellant at 14.

Focusing upon the constitutionality of regulations, vio-

lation of which gives rise to a supposed Title 18 offense,

is not a novel idea. The significance of the constitution-

ality of the underlying regulations is exemplified by the

case of United States v. Blumberg, 258 F.Supp. 885 (D.

Del. 1966). Defendant in that case was convicted under

18 U.S.C. § 1001, one of the statutes allegedly violated

in the present case. The Defendant there was convicted

because he did not disclose the winner of the “twin

double” at a racetrack, in violation of Internal Revenue

Service Regulations. The conviction was overturned and

the Defendant was ultimately acquitted, however, because

the IRS regulations were found to be unconstitutionally

vague. Here, as in the Blumberg case, the indictment was

brought under certain sections of Title 18, including sec-

tion 1001, but the illicit nature of the conduct which

constitutes the felowy offense is created by regulation

requirements. Where the underlying legal responsibility

is imposed by regulation, then the vagueness of that regu-

lation becomes of paramount importance.

B. The EPAA Certification Regulations do not

Provide Constitutionally Fair Notice.

The Due Process Clause of the Fifth Amendment re-

quires that statutory language be precise enough to pro-

vide notice of prohibited conduct. A statute written in

“terms so vague that men of ordinary intelligence must

necessarily guess at its meaning violates ‘he first essential

of Due Process.” Connally v. General Construction Com-

pany, 269 U.S. 385 (1926); Lanzetta v. New Jersey, 306

U.S. 451 (1939). As observed by this Court,

The underlying principle is that no man shall be

held criminally responsible for conduct which he

could not reasonably understand to be proscribed.

United States v. Harris, 347 U.S. 612 (1954).

This Court has more recently declared that:

Vague laws offend several important values. First,

because we assume that man is free to steer between

lawful and unlawful conduct, we insist that laws give

the person of ordinary intelligence a reasonable op-

portunity to know what is prohibited, so that he may

act accordingly. Vague laws may trap the innocent

by not providing fair warning. Second, if arbitrary

and discriminatory enforcement is to be prevented,

laws must provide explicit standards for those who

apply them. A vague law impermissibly delegates

basic policy matters to policemen, judges, and juries

for resolution on an ad hoc and subjective basis

with the attendant dangers of arbitrary and dis-

criminatory application.

Grayned v. City of Rockford, 408 U.S. 106, 107 (1972).

Regulations too are subject to these exacting principles.

Fundamental fairness requires that regulations be clear

so that men of common intelligence need not guess at the

meaning and differ as to the application. Boyce Motor

Lines v. United States, 342 U.S. 337 (1952); Brennan

v. Occupational Safety and Health Review Commission,

505 F.2d 869 (10th Cir. 1974). One can have knowledge

of a purported legal duty imposed by regulations only if

there is adequate notice. If criminal sanctions are im-

posed, courts will not tolerate lack of specificity. E.g.

United States v. Morrison, 536 F.2d 286 (9th Cir. 1976).

As this court observed in Kraus and Bros. v. United

States, 327 U.S. 614 at 621-2 (1946), to regulations

[Ml]ust be applied the same strict rule of construc-

tion that is applied to statutes defining criminal ac-

tion. In other words, the Administrator’s provisions

must be explicit and unambiguous in order to sus-

tain a criminal prosecution; they must adequately

inform those who are subject to their terms what

conduct will be considered evasive . . . the dividing

line between unlawful evasion and lawful action

cannot be left to conjecture. The elements of evasive

conduct should be so clearly expressed by the Ad-

ministrator that the ordinary person can know in

advance how to avoid an unlawful course of action.

As noted by certain Co-Appellants before the Fifth

Circuit, the vagueness of a particular regulation must be

assessed in the light of the environment in which they

were meant to apply. See e.g. Diebold, Inc. v. Marshall,

585 F.2d 1327 (6th Cir. 1978); United States v. Insco,

496 F.2d 204 (Sth Cir. 1974); Power Plant Div. v.

Occupational Safety and Health Review Commission,

590 F.2d 1363 (Sth Cir. 1979). In the last case cited,

a civil penalty provided by statute had been imposed upon

the company for noncompliance with a regulation. The

Fifth Circuit, however, reversed that action because it

was not demonstrated that the industry appreciated what

it was the regulation required of it. The Court expressly

observed that:

[T]he employer can properly be deemed to have

notice of his duties under [29 C.F.R.] section

1926.28(a) only when it is demonstrated that a

reasonable employer in his industry would have

recognized the same [duties] Jd. at 1365.

The federal energy regulations cited by the Govern-

ment in the indictment are 10 Code of Federal Regula-

tions § 212.131(a)(2), § 212.131(b)(1) and § 210.912

(a)(b). The simple citation of sections obscures the fact

that of these, § 212.131(b)(1), the portion regarding

certification by “sellers” of crude oil, was altered four

tir es during the time period affected by this indictment:

(1) January, 1974; (2) August, 1976; (3) September,

1976; and (4) August, 1977. The only regulation date

noted in the indictment precedes an edited rendition of

§ 212.131(b)(1) on page 3, declaring that the quoted

section was effective September 1, 1976. The date Sep-

tember 1, 1976 occurred well after the date of any alleged

wrongful act of Defendant Fisher set out in the indict-

ment and prosecution based upon this version of § 212.-

131(b)(1) would represent an ex post facto prosecution.

The 1973 oil embargo spawned a system in which

supplier-purchaser relationships were essentially frozen.

The Federal Energy Administration created arbitrary cate-

gories of crude oil produced and sold domestically, classi-

fying crude from property producing in 1972 as “old” to

the extent that a like quantity of crude was thereafter pro-

duced. Crude originating from previously non-productive

property or in excess of the level of production of prop-

erties in 1972 was termed “new” or “upper tier” oil.

Resellers have since purchased and conveyed oil from

varied sources which bore those classifications. In so

doing they have faced a maze of unclear, confusing and

constantly changing regulations issued by the FEA. This

state of confusion is aptly evidenced by the indictment in

that the Government has cited but a fragment of the

repeatedly changed regulations which it contends were

not satisfied.

A telling example of the confusion and Catch-22 in-

equity facing resellers in the industry, particularly relative

newcomers, because of the jungle of changing and arbi-

trary FEA regulations in Basin, Inc. v. Federal Energy

Administration, 534 F.2d 324 (Em. App. 1975) (re-im-

plementation of lapsed FEA regulations tending to reduce

competition to the disadvantage of new marketers of

crude oil and abrogating existing contracts). Even the

original Emergency Petroleum Allocation Act (15 U.S.C.

§ 751 et seq.) has been judicially described as “inartfully

drawn.” Mobil Oil Corporation v. Federal Energy Ad-

ministration, 435 F.Supp. 983, 986 (N.D. Tex 1977).

The DOE itself has acknowledged the uncertainty in-

herent in the regulations, for violation of which the

Government now seeks to prosecute this Defendant. In

42 F. Reg. 250 (Dec. 29, 1977), the DOE conceded

that:

The DOE is aware that, even with the adoption of

these rules for application after January 1, 1978,

cousiderable confusion continues to exist as to the

appropriate application of the rules of subpart F to

sales by crude oil resellers prior January 1, 1978. In

order to provide appropriate guidance DOE will

soon issue a further notice on this issue.

Subsection L was a provision designed to afford direction

to resellers regarding certification and pricing. The De-

cember 29, 1977 remarks of the DOE were in conjunc-

tion with issuance of a new subsection L. Direction to

resellers to aid in complying with the old subsection L,

however, was something without which resellers were left

to struggle.

The certification regulations require that a crude oil

reseller “certify in writing to the purchaser the respective

volumes of . . . old crude, and new crude oil. . . .” 10

C.F.R. § 212.131(b)(1). This requirement is sensible

only upon the assumption that the reseller in question

does not employ an inventory for purposes of bookkeep-

ing. No better explanation of this complication can be

given than that which was presented in the brief of Ap-

pellees The Crude Company and John Allen Masek to

the Fifth Circuit of Appeals and thus it is adopted:

With a “no inventory” assumption, the regulations

inform a reseller what certifications must be made.

Under this assumption, when a reseller buys one

barrel of oil from producer A, and immediately

thereafter sells one barrel of oil to refiner B, it is for

bookkeeping purposes the same barrel of oil—and

would need to have the same certification. Given

this “no inventory” premise, the regulation simply re-

quires that a reseller sell each barrel of oil with the

same certification it had at the time of purchase.

But in the commercial context where the regula-

tion is meant to be applied, this “no inventory”

assumption is unrealistic. Crude oil resellers, like

most businessmen, would be expected to keep inven-

tories for bookkeeping purposes. In fact, during the

period covered by the Indictment, EPAA price regu-

lations required that they do so. For example, under

10 C.F.R. § 212.93, the lawful price a reseller was

allowed to charge for crude oil depended upon the

“cost of the product in inventory.”

The problem is that, when applied to a reseller

who keeps inventory for bookkeeping purposes, the

regulation does not indicate what certifications are

required. When a barrel of oil is bought from pro-

ducer A, it goes into inventory, when a barrel of oil

is sold to refiner B, it comes from inventory. For

bookkeeping purposes it need not, and usually will

not, be the same barrel of oil. But the EPAA certifi-

cation regulations do not inform a reseller what

certification is appropriate for a barrel of oil coming

from inventory. The President of the Petroleum Re-

sellers Association recently testified at an Energy

Department hearing about this continuing problem.

For example, if I had 100,000 barrels of old

oil in inventory and in the meantime bought an-

other 100,000 barrels of [new], and in a subse-

quent month sold 100,000 barrels from inventory,

which barrels did I sell?

That is one of the problems, again, that we

have in the current reseller regulations. It is not

The cause of this problem is that, there are no

physical differences between old oil and new oil.

It is a regulatory distinction that has meaning only

on a bookkeeper’s ledger. The certification attached

to a barrel of oil depends upon bookkeeping entries

—not upon which physical barrel of oil is actually

transferred. This is if a “Last In, First Out” account-

ing system is used; certifications will be entirely

different than if a “First In, First Out” system is

used. And if another system is used, an entirely dif-

ferent set of certifications will result. With inventory

bookkeeping, a regulation cannot prescribe the re-

quired certification unless it specifies a particular

accounting system or establishes different rules for

each of several designated accounting systems. Un-

fortunately, the EPAA certifications regulations did

neither. Thus they require accurate certifications

without giving resellers any idea whatsoever about

what certifications would be considered accurate.

These regulations fail to give resellers any guidance

regarding what constitutes accurate certification. The in-

dictment simply assumes that certifications in connection

with the purchase of old oil from one company, while at

the same time selling the same amount of new oil to

another company, constitutes willful miscertification. Be-

cause the price regulations required resellers to maintain

an inventory for purposes of bookkeeping, yet the certifi-

cation regulations fail to make allowance for such an

inventory, the regulations did not give fair warning that

certifications under these conditions would be improper.

Because of the lack of fair warning, the Due Process Clause

prohibits criminal prosecution based upon alleged viola-

tion of the responsibilities imposed by the certification

regulations. Accordingly, dismissal of the indictment

which depended upon alleged violation of those regula-

tions was entirely proper.

THE FIFTH CIRCUIT ERRED IN REVERSING THE

TRIAL COURT’S DISMISSAL OF THE INDICTMENT

BECAUSE THAT COURT HAD NO JURISDICTION

TO REVIEW ADJUDICATION BY THE TRIAL

COURT OF EMERGENCY PETROLEUM

ALLOCATION ACT ISSUES.

In view of the strict page limitations imposed upon ap-

plications for writ of certiorari and the fact that Co-

Petitioner’s The Crude Company and John Allen Masek

will argue this issue in their application for writ, Peti-

tioner Fisher will simply adopt the argument of his Co-

Petitioners on this point, without further discussion.

VI.

THE FIFTH CIRCUIT ERRED IN REVERSING THE

TRIAL COURT'S DISMISSAL OF THE INDICTMENT

BECAUSE THE EMERGENCY PETROLEUM ACT

PREEMPTED THE RELEVANT PROVISIONS OF

TITLE EIGHTEEN TO THE EXTENT THEY MIGHT

HAVE PERTAINED TO ALLEGATIONS IN

THIS INDICTMENT.

In view of the strict page limitations imposed upon

applications for writ of certiorari and the fact that Co-

Petitioners The Crude Company and John Allen Masek

will argue in their application for writ, Petitioner Fisher

will simply adopt the argument of his Co-Petitioners on

this point, without further discussion.

CONCLUSION

The Petition for Writ of Certiorari should be granted,

the action of the Fifth Circuit Court of Appeals should

be reversed, and the dismissal of the indictment by the

District Court should be reinstated.

Respectfully submitted,

RYAN & MARSHALL

Dan RYAN

822 Houston Bar Center

723 Main Street

Houston, Texas 77002

713/228-4556

Attorneys for Petitioner

James E. Fisher

CERTIFICATE OF SERVICE

This is to certify that a true and correct copy of the

foregoing Brief of Petitioner James E. Fisher was for-

warded this the 30th day of October, 1981 by U.S. Mail

to Mr. Wade Hampton McCree, Jr., Solicitor General,

Department of Justice, Tenth and Constitution Avenue,

Washington, D.C. 20530, Daniel Hedges, United States

Attorney, P. O. Box 61129, Houston, Texas 77208,

counsel for Respondent; and Mr. Vincent J. Fuller coun-

sel, for Petitioners The Crude Company and John Allen

Masek, Williams & Connally, Hill Building, Washington,

D.C. 20006.

Dan RYAN

A-l

APPENDIX

UNITED STATES of America,

Plaintiff-Appellant,

Vv.

UNI OIL, INC., Thomas M. “Mick” Hajecate, Thomas

H. “Tom” Hajecate, James E. Fisher, Charles R. Akin,

Charles Goss and Ball Marketing Enterprises,

Defendants-Appellees.

UNITED STATES of America,

Plaintiff-Appellant,

Vv.

MID-ATLANTIC PETROLEUM COMPANY, LTD.,

et al.,

Defendants-Appellees.

Nos. 79-2488, 79-3082

UNITED STATES COURT OF APPEALS

Fifth Circuit

May 19, 1981.

As Modified on Denial of Rehearings

and Rehearings En Banc

Sept. 4, 1981.

The United States District Court for the Southern Dis-

trict of Texas, Ross N. Sterling, J., entered judgments

dismissing indictments, and appeals were taken. Follow-

ing consolidation, the Court of Appeals, James C. Hill,

A-2

Circuit Judge, held that: (1) claims that prosecutions

for RICO violations, for alleged mail fraud, for com-

mercial bribery, and for other criminal violations were

unconstitutional because of absence of fair notice, through

regulations issued pursuant to Emergency Petroleum Al-

location Act, of conduct that was criminal did not raise

issue such as vested exclusive jurisdiction over appeal

from dismissal of complaints in Temporary Emergency

Court of Appeals; (2) the Emergency Petroleum Ailoca-

tion Act did not “preempt” application of general criminal

statutes to conduct regulated by the Act so as to require

appeal from dismissal of indictment to be within exclusive

jurisdiction of Temporary Emergency Court of Appeals;

(3) membership in organized crime was not necessary

element to establish conviction for violation of racketeer

influenced and corrupt organizatiuns statute; (4) count

of indictment charging commercial bribery was not ma-

terially defective, even though it failed to allege sepa-

rately each element of commercial bribery; (5) indict-

ment was not duplicitous; and (6) jurisdictional requisite

for charging violation of statute proscribing making of

false statement in “matter within the jurisdiction of any

department or agency of the United States” was satisfied.

Reversed and remanded .

J. A. Tony Canales, U. S. Atty., James R. Gough,

Asst. U. S. Atty., Houston, Tex., Richard A. Sauber,

Sp. Atty., Washington, D. C., for the U. S.

Charles N. Wooten, Sr., Charles Brandt, Lafayette, La.,

Thano Dameris, Houston, Tex., for Uni Oil, Hajecate,

Hajecate, Akin, Goss and Ball Marketing.

A-3

Dan Ryan, Houston, Tex., for Fisher.

Vincent J. Fuller, Judith A. Miller, Scott Blake Harris,

Washington, D. C., Edward B. McDonough, Jr., Houston,

Tex., Robert L. Weinberg, Washington, D. C., for Crude

Co. and Masek.

Appeals from the United States District Court for the

Southern District of Texas.

Before HILL, RUBIN and ANDERSON, Circuit

Judges.

JAMES C. HILL, Circuit Judge:

Under regulations adopted by the Department of En-

ergy, see 10 C.F.R. §§ 212.1-212.188 (1980),’ vendors

of domestic crude oil operate subject to various price

controls. This appeal is a consolidation of two cases in

which appellee oil dealers were indicted for various

fraudulent schemes and practices which allegedly enabled

them to sell domestic crude oil for prices in excess of

legal maxima.’ See 10 C.F.R. § 212.131 (1980).

Although the indictments exclusively charge Title 18

offenses, both the indictments and the defenses thereto

make use of the Emergency Petroleum Allocation Act

(EPAA) 15 U.S.C. §751 et seq. and its regulations.

The tension between Title 18 and the EPAA poses diffi-

1. For convenience, we cite the applicable regulations that were

in effect until January 28, 1981. See 46 Fed. Reg. 9909 (1981).

The instant case actually involves ancestor provisions, since amended.

A-4

cult questions regarding our jurisdiction and the suffici-

ency of the indictments. The district court dismissed both

indictments. For the reasons set out below, we conclude

that we have jurisdiction to consider this appeal and that

both indictments are sufficient. Therefore, we reverse and

remand to the district court.

I. The Indictments

On March 7, 1979 a grand jury in Houston, Texas

returned an eighty-four count indictment against Uni

Oil, Ball Marketing Enterprise and five named individual

defendants, Thomas “Mick” Hajecate, Thomas “Tom”

Hajecate, James Fisher, Charles Akin, and Charlie Goss.

United States v. Uni Oil, Inc., No. 79-2488 (hereinafter

Uni Oil). The indictment charged that the defendants

conspired to violate the Racketeer Influenced and Cor-

rupt Organizations (RICO) statute in order to miscertify

and sell oil that was properly considered “old” oil as

“new” oil, 18 U.S.C. § 1962(d) [Count 1], conducted

the affairs of an enterprise, Uni Oil, through a pattern

of racketeering activity which included mail fraud and

commercial bribery, 18 U.S.C. § 1962(c) [Count 2],

furthered a scheme and artifice to defraud the United

States and its agencies through mailings which fraudu-

lently certified “old” oil as “new” oil, 18 U.S.C. § 1341

[Counts 3-34], engaged in wire fraud to further the same

scheme and artifice, 18 U.S.C. § 1343 [Counts 35-59],

and made false and fraudulent representations regarding

the origin of oil in records caused to be prepared and

submitted pursuant to government regulation. 18 U.S.C.

§ 1001 [Counts 60-84].

The appellees challenged the indictment on numerous

grounds. After extensive briefing, a hearing was held

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before the Honorable Ross N. Sterling of the United

States District Court for the Southern District of Texas

on May 29, 1979. At the close of argument, Judge

Sterling announced that the appellees’ motions to dismiss

were granted. One week later the judge issued a one

sentence order dismissing the indictment. Despite the

complexity of the issues, the order was not accompanied

by a memorandum or by any other analysis by the district

judge.

On April 30, 1979 a grand jury in Houston, Texas

returned a twenty-nine count indictment against the Mid-

Atlantic Petroleum Company, Ltd., The Crude Company,

Uni Oil, Inc., H.C. Iran, Ltd. and five named individuals,

John Allen Masek, Thomas “Tom” Hajecate, Thomas

“Mick” Hajecate, Charles R. Akin, and R. Stanley Cor-

bitt. United States v. Mid-Atlantic Petroleum Co., Ltd.,

No. 79-3082 (hereinafter Mapco). The indictment

charged that the defendants conspired to conduct the

affairs of an enterprise, Uni Oil, through a pattern of

racketeering activity in order to disguise oil that was

properly to be considered “old” oil as “new” oil, 18

U.S.C. § 1962(d) [Count 1], conducted the affairs of

Uni Oil through a pattern of racketeering activity, 18

U.S.C. § 1962(c) [Count 2], caused false and fraudulent

invoices and certificates to be placed in the mail 18 U.S.C.

§ 1341 [Counts 3-23], and knowingly made false and

fraudulent representations in a matter within the juris-

diction of the Federal Energy Administraton, i. e., falsely

certifying domestic crude oil, 18 U.S.C. § 1001 [Counts

24-29].

As in Uni Oil, the appellees challenged the indictment

on numerous grounds. After extensive briefing, oral argu-

ment was held before the Honorable Ross N. Sterling of

A-6

the United States District Court for the Southern District

of Texas. From the bench, Judge Sterling ordered dis-

missal of the indictment for “the reasons siated in the

Defendants’ briefs.” On July 25, 1979, Judge Sterling

issued a written order granting the motions to dismiss

“for the reasons set out in the Defendants’ briefs.”

II. Discussion

A. Jurisdiction

The threshold question is whether we have jurisdiction

to consider this appeal. Section 211(b)(2) of the Eco-

nomic Stabilization Act of 1970 provides that the Tem-

porary Emergency Court of Appeals shall have “exclusive

jurisdiction of all appeals from the district courts of the

United States in cases and controversies arising under

this title or under regulations or orders issued thereunder.”

12 U.S.C. § 1904 note (West Supp. 1977). Section 5

(a)(1) of the Emergency Petroleum Allocation Act, as

amended, 15 U.S.C. § 754, incorporates and carries

forward this grant of special jurisdiction. Accordingly,

if the district court adjudicated an EPAA issue we lack

jurisdiction. Coastal States Marketing, Inc. v. New Eng-

land Petroleum Corp., 604 F.2d 179, 187 (2d Cir. 1979).

[1] We begin by noting that an EPAA issue is not

raised simply because the indictments “included an ex-

planation of the EPAA regulations proscribing miscerti-

fication and that such regulations provided a convenient

format for defendants’ [alleged] scheme of fraud and

criminal enterprise,” United States v. Zang, 645 F.2d

999 at 1003 (Em. App. 1981). However, the thrust of

appellees’ argument is not that the indictment arose

under the EPAA. Rather, they contend that two EPAA

issues were raised in defense to the indictment. See Coastal

A-7

States Marketing, Inc. v. New England Petroleum Corp.,

604 F.2d 179 (2d Cir. 1979). First, they argue that the

EPAA regulations “upon which the charges were predi-

cated” are unconstitutionally vague. Second, they argue

that the EPAA preempted certain Title 18 provisions as

they might have otherwise applied to the allegations in

the indictment. See Post Argument Brief of Appellees The

Crude Company and Masek at 2. Appellees urge that

the above issues require a constitutional construction of

the EPAA; hence, both the letter and spirit of § 211(b)

(2) are served by transferring this case to TECA. See

United States v. Wickland, 619 F.2d 75 (Em. App.

1980). Appellees’ excellent briefs present a forceful argu-

ment. Nonetheless, a close examination of the character

of the issues presented reveals that none of them arise

under the EPAA.

B. Jurisdiction and Vagueness

{2} An analysis of the appellees’ defenses cannot be

conducted without reference to the indictments. Consider-

ing the indictments themselves, not the ones the defend-

ants seek for us to imagine in their stead, there is no

charge of a violation of EPAA regulations. The crimes

charged vary with each count, but Count 3 of No. 79-

2488 will serve as an example. The issue wnder Count 3

is whether Invoice #147, mailed to Mid-Atlantic Petro-

leum Company from one of the co-defendants, Uni Oil,

on July 22, 1976, contained untrue representations, made

knowingly and with intent to defraud, as part of the

scheme alleged in the indictment. In the absence of the

existence of the EPA or of any EPAA regulations, it

would presumably be a criminal act to use the mails as

part of a scheme to defraud by falsely certifying facts

relating to the provenance of oil knowingly and with

A-8

intent to defraud. What makes the act criminal is not

the regulation, but the use of the mails to carry an untrue

document fabricated with fraudulent purpose.

If the description of “old” and “new” oil, wherever set

forth, whether in regulations or technical literature, is so

vague that no one can tell one from the other (or if, as

put by the defendants, they do not provide “fair notice”

of that difference between “old” and “new” oil), evidence

to that effect and the arguments of counsel might persuade

a jury that the defendants did not knowingly make a false

statement or lacked intent to defraud or otherwise did not

violate the statute upon which the indictment is based.

On Appeal, the defendants phrase this issue as “whether

the regulations are unconstitutionally vague.” Thus, they

assert, the constitutionality of the regulations is at issue

and only TECA has jurisdiction.

This contention is subtly different from their contention

in the district court. Below they contended that “FEA’s

Crude Oil Certification Regulations Cannot be the Basis

for Criminal Prosecution Unless they Provided ‘Fair No-

tice’ of What Conduct was Required.” “Because of this

lack of fair notice, the Due Proces, Clause prohibits

criminal prosecution of the defendants for violating the

certification regulations.” This was not an attack on con-

stitutionality of the regulations per se but on the con-

stitutionality of prosecuting a person for conduct that was

made criminal without fair notice. That issue does not

require resolution of the constitutionality or even the

interpretation of the regulations; only whether the crimi-

nal statutes clearly prescribed the conduct charged.

In United States v. Weatherspoon, 581 F.2d 595 (7th

Cir. 1978), the defendant was convicted under the RICO,

A-9

mail fraud, and false statements statutes (the same statutes

involved here). She claimed that the certifications she

was alleged to have falsely made were too ambiguous

to support a false statements prosecution because they

did not adequately set out what information she was

required to supply. The Seventh Circuit rejected that

conclusion, but rested in part on a construction of the

certification requirement. “Moreover, even if we agreed

with Weatherspoon that the language is not a model of

clarity, we note that the ‘vagueness’ argument was open

to Weath-rspoon at trial, for the Government was re-

quired under 18 U.S.C. § 1001 to establish not only that

the certification was false, but also that Weatherspoon

had made the certification knowing it to be false.” 581

F.2d at 601 (emphasis in original).

Although the TECA has defined its “arising under”

jurisdiction broadly, to include all EPAA issues, it has

drawn a distinction between an issue “arising under”

the EPAA and one that only peripherally involves a

regulation.

In United States v. Cooper, 482 F.2d 1393 (Em. App.

1973), the defendant was charged with violations of

rent control regulations and with violations of the false

statement statute, 18 U.S.C. § 1001 (one of the statutes

invoked against the present defendants). He appealed

to the Ninth Circuit and that court transferred the case

to TECA. TECA took jurisdiction over the charges of

violation of regulations, but treated the transfer as an

untimely notice of appeal and dismissed the appeal. It

concluded, however, that the false statement charge did

not arise under the statute and was not within the ap-

pellate jurisdiction of TECA, even though it involved

false statements on forms required by ESA regulations.

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“We start with the premise that a conviction under 18

U.S.C. § 1001 would be appealable only to a court of

appeals, under 28 U.S.C. § 1291, unless the Stabilization

Act provides otherwise. . . . We do not think that Count

1 being based on 18 U.S.C. § 1001, was a controversy

“arising under” any title of the Stabilization Act or under

regulations or orders issued thereunder.” Jd. at 1397.

Thus, the mere fact that a criminal conviction may rest

on a false statement made while engaging in a business

regulated by EPAA or ESA, does not of itself place the

action within TECA’s jurisdiction. The case or contro-

versy itself must arise under the statute or regulations;

the resolution of the issue must turn on proper interpreta-

tion of EPAA or ESA. Moreover, some initial determina-

tion of the scope of the EPAA or ESA regulations is

necessary to determine who has jurisdiction. In Cooper,

TECA had to determine that 18 U.S.C. § 1001 stated

an offense separate and exclusive of ESA issues before

it could determine that it lacked jurisdiction.

The ruling in Bray v. United States, 423 U.S. 73, 96

S.Ct. 307, 46 L.Ed.2d 215 (1975) was based on similar

logic. In Bray the defendant was convicted of criminal

contempt for failure to comply with a district court order

to respond to an IRS subpoena issued pursuant to ESA.

He appealed to the circuit court and it dismissed, holding

that the appeal should be to TECA. The Supreme Court

reversed:

The Act does not contain any provision prohibiting

ihe violation of a district court’s enforcement order

or establishing penalties for such a violation. . . .

Review in the TECA of criminal contempt convic-

tions relating to compliance investigations or en-

forcement efforts is not necessary to assure uniform

A-11

interpretation of the substantive provisions of the

stabilization scheme.

423 US. at 75, 96 S.Ct. at 309.

Bray cited and expanded upon the holding in Cooper.

The mere fact that a prosecution involves duties created

by the ESA or EPAA is not decisive concerning who

has jurisdiction. The crucial question is whether the case

involves issues that must be decided by TECA in order

that “uniform interpretation of the substantive provisions

of the” statute may be achieved. Bray involved no such

issues because the validity of the contempt charge “was

not dependent on the existence of [ESA] violations or

even the continuation of the [ESA] investigation.” /d.

See also United States v. Vixie, 532 F.2d 1277 (9th

Cir. 1976).

This line of reasoning was further strengthened by the

TECA’s recent decision in United States v. Zang, 645

F.2d 999 (Em. App. 1981). The indictment in Zang

was substantially similar to the one here. The defendants

were charged under certain general criminal statutes for

allegedly devising a fraudulent scheme through the use

of their companies and the mail and wire communications,

whereby they could resell “old” crude oil at “new” or

“exempt” oil prices.

The defendants’ motions to dismiss contended, inter

alia, that 15 U.S.C. § 754 preempted the general criminal

statutes of Title 18 and that the government was en-

gaging in selective prosecution. The district court denied

the defendants’ motions. Defendants then sought a writ

of mandamus from TECA ordering the trial court to

sustain their motions to dismiss the indictment.

A-12

Relying extensively on Cooper and Bray, TECA con-

cluded that the EPAA, as amended, does not “provide

for or mention any of these grave (Title 18) felony of-

fenses, and this Court has no jurisdiction of this appeal.”

At 1003. TECA’s conclusion, quoted from Bray, has

equal force here:

This judicial-review provision was designed to

provide speedy resolution of cases brought under the

Act and ‘to funnel in to one court all the appeals

arising out of the District Courts and thus gain in

consistency of decision.’ S. Rep. No. 92-507, p. 10

(1971), U.S. Code Cong. & Admin. News 1971,

pp. 2283, 2292.

Nothing in the Act or in its legislative history

indicates that Congress intended ‘to include existing

offenses, already covered under Title 18, under the

umbrella of the Stabilization Act.’ United States v.

Cooper, 482 F.2d 1393, 1398 (TECA 1973). Re-

view in the TECA of criminal contempt convictions

relating to compliance investigations or enforcement

efforts is not necessary to assure uniform interpre-

tation of the substantive provisions of the stabiliza-

tion scheme. Indeed, a requirement of such review

would only serve to undermine the prompt resolution

of Stabilization Act questions by burdening the

TECA with additional appeals.

423 U.S. at 74-75, 96 S.Ct. at 308-309.

Appellees correctly point out that Zang dii not decide

the identical issues presented by this case. The focus in

Zang was on “the felony offenses charged in the indict-

ment,” at 1003, rather than the defenses raised by the

defendant. But this difference is irrelevant here. The

appellees’ defenses, like the charges in Cooper, Bray,

and Zang, simply do not require interpretation of the

substantive provisions of the EPAA.

A-13

In sum the defenses raised by the appellees do not

C. Jurisdiction and “Preemption”

[3] The defendants contend also that the EPAA pre-

empts application of the general criminal statutes to con-

involve “interpretation of the substantive provisions” of

We do not take a constricted view of TECA jurisdic-

tion. TECA is vested with jurisdiction over any EPAA

issue adjudicated by a district court whether or not the

action can be said to arise under EPAA in the constitu-

tional sense. However, not every case that in some manner

involves the EPAA necessarily raises EPAA issues.*

the EPAA. They involve interpretation of the proper

scope of the criminal code statutes under which the de-

fendants were charged.‘

i et i sai

BR iid

nal Ba

enti: vi fil

A-14

duct regulated by EPAA. This claim is also within our

‘urisdicti

In United States v. Vixie, 532 F.2d 1277 (9th Cir.

1976), the defendant contended that his false statement

conviction was invalid because he should have been

charged under the provisions of ESA dealing with com-

pelling compliance with subpoenas. The circuit court,

rather than submitting that question of preemption to

TECA, concluded that nothing in ESA suggested that

its compliance provisions were the exclusive remedy for

failure to comply and that the defendant did not simply

fail to comply, she falsely complied; the court therefore

concluded that there were no preemption.

In United States v. Gilliland, 312 U.S. 86, 61 S.Ct.

518, 85 L.Ed. 598 (1941), the Supreme Court considered

whether provisions of the Hot Oil Act, 15 U.S.C. §§ 715-

715(d), (requiring affidavits concerning the amount of

oil shipped from wells) preempted prosecutions under

the predecessor of 18 U.S.C. § 1001 for false statements

on affidavits even though the regulations may have been

violated as well. The question was not phrased as an

issue involving the interpretation of the regulations, but

as an issue involving the interpretation of the scope of

the criminal statute. The court held that the provisions

of the general false statements statute were not limited

to the enforcement of the “hot oil” regulations and that

the later “hot oil” act did not repeal the earlier general

statute so far as the latter applied to “hot oil” documents.

The statutes were complimentary, not exclusive. See also

United States v. Carter, 526 F.2d 1276 (Sth Cir. 1976)

(determining that the false statement provisions of 15

U.S.C. § 645(a) do not preempt 18 U.S.C. § 1001, even

though they may both reach false statements on SBA

A-15

forms. 18 U.S.C. § 1001 requires proof of elements not

required by the other statute).

Because the preemption issue concerns only the EPAA’s

effect on an unrelated criminal statute, “[rjeview in the

TECA . . is not necessary to assure uniform interpreta-

tion of the substantive provisions of the stabilization

scheme.” Bray v. United States, 423 U.S. at 75, 96 S.Ct.

at 309 (emphasis added). Bray also cautions us to avoid

burdening the TECA with additional appeals, so that

the TECA will not be prevented from promptly deciding

D. Further Challenges to the Indictments

Appellees’ remaining points, which should have been

disposed of by the district court, require little discussion.

Appellees challenge the government’s use of the

Racketeer Influenced and Corrupt Organizations statute,

18 U.S.C. § 1961 et seq. on essentially two grounds. First,

they contend that RICO’s language is unconstitutionally

vague. See Grayned v. City of Rockford, 408 U.S. 104,

92 S.Ct. 2294, 33 L.Ed.2d 222 (1972). Second, they

argue that the indictments fail to state an offense because

they, the defendants, are not members of organized crime,

the explicit target of RICO.

"§. Although we have found that the question presented here is

as ve note that TECA has

by 15 USC. 4734, Uned Staves, Zong 645 F.2d 99

States v. Zang, 645 F.2d 999

912 (2d

A-16

[4] Appellees vagueness argument focuses on the de-

finition of “racketeering activity.” 18 U.S.C. § 1961. We

must cut short appelleer proposed tour of the RICO

statute because they lack standing to undertake it. See

Association of Data Processing Service Organizations v.

Camp, 397 U.S. 150, 152-153, 90 S.Ct. 827, 829-830,

25 L.Ed.2d 184 (1970). The “racketeering activity” for

which the Unj Oil defendants were indicted consisted of

conspiracy and substantive “violations of the Mail Fraud

Statute as charged in Counts Three through Thirty-four

. .. and violation of the State of Texas Commercial Brib-

ery Statute.” Contrary to appellees professed bafflement,

both the language of the indictment charging racketeering

and the sections of the statute from which it is drawn are

composed of easily understood terms. The language is

more than sufficient “to give a person of ordinary intelli-

gence fair notice that his contemplated conduct is for-

bidden by the statute.” United States v. Harriss, 347 U.S.

612, 617, 74 S.Ct. 808, 811, 98 L.Ed. 989 (1954).

[5, 6] In order to dismiss an indictment for failure to

state an offense we must find that the indictment does not

“contain[ ] the elements of the offense intended to be

charged.” Russell v. United States, 369 U.S. 749, 763,

82 S.Ct. 1038, 1046, 8 L.Ed.2d 240 (1962), United

States v. Meacham, 626 F.2d 503, 507 (Sth Cir. 1980).

Although the legislative history of RICO vividly demon-

strates that it was primarily enacted to combat organized

crime, nothing in that history, or in the language of the

statute itself, expressly limits RICO’s use to members of

organized crime. Stated differently, membership in organ-

ized crime is not a necessary element of a RICO convic-

tion. Accordingly, appellees’ argument on this point fails.

[8, 9] The Uni Oil appellees also contend that count 1

is defective for failing to delineate the elements of com-

mercial bribery. An indictment is sufficient if it clearly

informs the defendant of the precise offense of which he

is accused so that he may prepare his defense and if it

states facts adequate to permit the defendant to plead

former jeopardy in a subsequent prosecution. Russell v.

United States, .69 U.S. 749, 763-64, 82 S.Ct. 1038,

1046-47, 8 L.Ed.2d 240 (1962). Furthermore, as the

Supreme Court has explained, the sufficiency of an in-

dictment “is not a question of whether it could have been

more definite and certain.” United States v. Debrow, 346

U.S. 374, 378, 74 S.Ct. 113, 115, 98 L.Ed. 92 (1953)

A-18

(emphasis added). Although we do not condone the

government’s sloppiness, we find the indictment passes the

test outlined above. Despite the government’s failure to

allege each element of commercial bribery separately, the

indictment contains copious facts which adequately ap-

prise the defendants of the nature of the charge against

them. Therefore, the indictment’s deficiency is not ma-

terial. See United States v. Yida, 643 F.2d 348 at 352

(Sth Cir. 1981).

[10] The Mapco appellees also urge that counts 1

through 23 are duplicitous because in addition to charg-

ing RICO and mail fraud violations, each counts also

charges the additional offense of conspiracy to defraud

the United States, 18 U.S.C. § 371. A duplicitous indict-

ment charges two or more distinct offenses in a single

count. Bins v. United States, 331 F.2d 390 (Sth Cir.),

cert. denied, 397 U.S. 880, 85 S.Ct. 149, 13 L.Ed.2d 87

(1964), Fed. R. Crim. P. 8(a).

A straightforward reading of the indictment rebuts

appellees’ effort to interject § 371 conspiracies into counts

1-23 through a hypertechnical reading of selected parts

of the various counts. Counts must be read as a whole to

determine their meaning. See United States v. Markham,

537 F.2d 187, 192 (Sth Cir. 1976), cert. denied, 429

U.S. 1041, 97 S.Ct. 739, 50 L.Ed.2d 752 (1977). The

dangers of duplicity, that it will be impossible to deter-

mine what the jury has found and that the defendants

may be subject to double jeopardy in the event of a sub-

sequent prosecution, are not present in this case. Bins v.

United States, 331 F.2d 390, 393 (Sth Cir.), cert. denied,

397 U.S. 880, 85 S.Ct. 149, 13 L.Ed.2d 87 (1964).

Unlike Bins in which the defendant was charged with two

separate acts of false uttering in the same count, only one

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violation is charged in each count here. Count 1 charges

a RICO conspiracy, count 2 a substantive RICO viola-

tion, and counts 3-24 each rely on a separate mailing in

charging mail fraud.

[11] Next, Mapco appellees contend that the mailings

in counts 3-18 were simply routine, regularly employed

mailings and hence cannot form the basis for mail fraud

charges. See United States v. Tarnopol, 561 F.2d 466,

472 (3d Cir. 1977). The record, as developed to date,

does not support this view of the mailings. Rather, the

indictment clearly charges that the mailings were used

“for the purpose of executing” a scheme or artifice to

defraud. See Parr v. United States, 363 U.S. 370, 80

S.Ct. 1171, 4 L.Ed.2d 1277 (1960). If the appellees de-

velop this argument at trial they may have valid grounds

for a motion for judgment of acquittal.

[12] Finally, Mapco appellees contend that counts 24-

29 fail to state an offense under 18 U.S.C. § 1001 because

they refer only to statements made to a private purchaser.

Section 1001 requires that the false statement be made in

a “matter within the jurisdiction of any department or

agency of the United States.” 18 U.S.C. § 1001 (West

1976). This jurisdictional requisite has been satisfied.

The indictment sufficiently charges that the allegedly

false certificates of defendants were relied on by refiners

who prepared records which ultimately influenced FEA

calculations. 18 U.S.C. § 1001 is designed to protect

federal funds and functions from fraudulent interference.

In order to achieve this objective, it is well settled that a

false statement need not be made direcily to a federal

agency in order to sustain a § 1001 conviction. United

States v. Baker, 626 F.2d 512, 514 (Sth Cir. 1980);

A-20

United States v. Hooper, 596 F.2d 219 (7th Cir. 1979).

If, however, subsequently developed evidence shows that

the certification in question did not influence FEA calcu-

lations, either directly or indirectly, the Appellees may

have valid grounds for a motion for judgment of acquittal

on these grounds.

We find no merit in appellees’ remaining arguments.

Accordingly, the judgment of the district court is reversed

and remanded for proceedings consistent with this opinion.

REVERSED and REMANDED.

A-21

UNITED STATES of America,

Plaintiff-Appellant,

Vv.

UNI OIL, INC., Thomas M. “Mick” Hajecate, Thomas

H. “Tom” Hajecate, James E. Fisher, Charles R. Akin,

Charles Goss and Ball Marketing Enterprise,

Defendants-Appellees.

UNITED STATES of America,

Plaintiff-Appellant,

Vv.

MID-ATLANTIC PETROLEUM COMPANY, LTD.,

et al.,

Defendants-Appellees.

Nos. 79-2488, 79-3082

UNITED STATES COURT OF APPEALS

Fifth Circuit

Sept. 4, 1981.

Defendants were convicted in the United States District

Court for the Southern District of Texas, Ross N. Sterling,

J., of making false statements and they appealed. The

Court of Appeals, 646 F.2d 946, affirmed. On petition

for rehearing, the Court of Appeals held that indictment

which charged that allegedly false certificates of defend-

ants were relied upon by refiners who prepared records

which ultimately influenced Federal Energy Agency cal-

culations charged the offense of making false statements.

Petition denied.

* ¢

A-22

James Gough, Asst. U. S. Atty., Houston, Tex., Richard

Sauber, Sp. Atty., Washington, D. C., for plaintiff-appel-

lant.

Charles Wooten, Charles Brandt, Lafayette, La., Thano

Dameris, Houston, Tex., for Uni Oil, Hajecate, Hajecate,

Akin, Goss & Ball Marketing.

Dan Ryan, Houston, Tex., for Fisher.

Maurice Bresenhan, Jr., Houston, Tex., for R. Stanley

Corbitt.

Michael E. Tigar, Washington, D. C., for Hajecate,

Hajecate & Akin.

Vincent J. Fuller, Judith A. Miller, Scott Blake Harris,

Washington, D. C., for Crude Co. & Masek.

Edward B. McDonough, Jr., Houston, Tex., Robert L.

Weinberg, Washington, D. C., for defendants-appellees.

Appeals from the United States District Court for the

Southern District of Texas.

ON PETITIONS FOR REHEARING AND

PETITIONS FOR REHEARING EN BANC

(Sth Cir. 1981, 646 F.2d 946)

Before HILL, RUBIN and ANDERSON, Circuit

Judges.

PER CURIAM.

Pursuant to a review of the Appellee’s briefs we strike

the penultimate paragraph and replace it with the follow-

ing.

[1, 2] The indictment sufficiently charges that the al-

legedly false certificates of defendants were relied on by

A-23

refiners who prepared records which ultimately influenced

FEA calculations. 18 U.S.C. § 1001 is designed to pro-

tect federal funds and functions from fraudulent inter-

ference. In order to achieve this objective, it is well set-

tled that a false statement need not be made directly to

a federal agency in order to sustain a § 1001 conviction.

United States v. Baker, 626 F.2d 512, 514 (Sth Cir.

1980); United States v. Hooper, 596 F.2d 219 (7th Cir.

1979). If, however, subsequently developed evidence

shows that the certification in question did not influence

FEA calculations, either directly or indirectly, the Ap-

pellees may have valid grounds for a motion for judgment

of acquittal on these grounds.

With the above observations, the Petitions for Rehear-

ing are DENIED and no member of this panel nor Judge

in regular active service on the Court having requested

that the Court be polled on rehearing en banc (Rule 35

Federal Rules of Appellate Procedure; Local Fifth Cir-

cuit Rule 16) the Petitions for Rehearing En Banc are

DENIED.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.