Amicus Curiae Brief — Scheidler v. National Organization for Women, Inc.

No. 01-1118

IN THE

SUPREME COURT OF THE UNITED STATES

7

JOSEPH SCHEIDLER, ANDREW SCHOLBERG,

TIMOTHY MURPHY, AND THE

PRO-LIFE ACTION LEAGUE, INC..,

Petitioners,

Vv.

NATIONAL ORGANIZATION FOR WOMEN, ET AL.,

Respondents.

.

On Writ of Certiorari to the

United States Court of Appeals

for the Seventh Circuit

7

BRIEF AMICUS CURIAE OF THE RUTHERFORD INSTITUTE

IN SUPPORT OF PETITIONERS

+

John W. Whitehead Jamin B. Raskin

Steven H. Aden (Counsel of Record)

THE RUTHERFORD INSTITUTE | WASHINGTON

112 Whitewood Road COLLEGE OF LAW

Charlottesville, VA 22901 4801 Mass. Ave., NW

Tel.: (434) 978-3888 Washington, DC 20016

Tel.: (202) 274-4011

July 12, 2002

TABLE OF CONTENTS

TABLE OF AUTHORITIES

es : ‘6 : INTEREST OF AMICUS CURIAE

ee : SUMMARY OF ARGUMENT

Stee Gene ce ee Weaicts say, on | I. THE “INTANGIBLE RIGHTS” THEORY OF Ex: ORTION

OR i ed aR SR oS ne ee a Ss REVIVES ABSTRACT LOCHNER-ERA NOTIONS OF

mie CL are Coe a Ge aE a Re | ABSOLUTE PROPERTY RIGHTS WHICH ARE NO

RECN aa en ae eee a : ‘ | LONGER VALID AND WILL DETER PUBLIC

Pag ES oe Na er eee 3 | 3 en 6

af LE ae ae . THE “INTANGIBLE-RIGHTS” THEORY OF

iy poe Eee ease “EXTORTION” WILL DETER PUBLIC OPPOSITION TO

aot SOR a seek | : SI eiecsssenncenenssenseamdtennennntatenmenstessemiensinnein 1]

Ill. By ADOPTING THE Hosss AcT’s CRIMINALIZATION

OF “EXTORTION” AS THE “OBTAINING OF PROPERTY

: | FROM ANOTHER, WITH CONSENT” WHERE SUCH

: | t CONSENT “Is INDUCED BY THE WRONGFUL USE OF

ACTUAL OR THREATENED FORCE, VIOLENCE, OR

\ 1 FEAR,” THE SEVENTH CIRCUIT’S DECISION

INTRODUCES SUBSTANTIALLY VAGUE AND

OVERBROAD JUDICIAL RESTRICTIONS ON

ACTIVITIES OF POLITICAL PROTESTORS . .........cc000000 13

CONCLUSION

TABLE OF AUTHORITIES

CASES

Callanan v. United States, 223 F.2d 171 (8* Cir.

EEE 14, 15

Carbo v. United States, 314 F.2d 718 (9 Cir. 1963) . 15

Drake v. B.F. Goodrich Co., 782 F.2d 638 (6" Cir.

| | ) 9

Eastern Railroad Presidents Conference v. Noerr

Motor Freight, Inc., 365 U.S. 127 (1961) ........sescsseresees 8

Genty v. Resolution Trust Corp., 937 F.2d 899 (3"

Clie. 19D1) ...ccccccsssccsccecsscocsceosesorssnsnsessssssnennsessesessseneenenns 9

In re Jensen, 995 F.2d 925 (9™ Cir. 1993) .....cceseeseseeseres a

Lochner v. New York, 198 U.S. 45 (1905) ......:0++0+ 7,13

Lucero v. Trosch, 121 F.3d 591 (11™ Cir. 1997) .........+. l

Monterey Plaza Hotel Ltd. Partnership v. Local 483,

215 F.38 923 (CF? Cle. DBGD) ceoccccccesescscesenssocessssseens 10, 11

NAACP v. Claiborne Hardware, 458 U.S. 886 (1982)

EEE eee 2,8

National Org. of Women v. Scheidler, 1997 WL

610782 (N.D.TIL. 1997) ..cccccccccccccesccseescrssesevsessosscossssosones 4

New York Times v. Sullivan, 376 U.S. 254 (1964) ........ 6

-l-

New York v. Operation Rescue, 80 F.3d 64 (2” Cir.

Sa sitet ciraartaaiaderinnaipaenmuentenmenntemsseenecmaneneesccaneneesees l

Nollan v. California Coastal Comm'n, 483 U.S. 825

STITT iaietinihieiaien date tinecenmeminnemnmnenensusccncesereesmnenenessvensenes 8

NOW v. Scheidler, 510 U.S. 249 (1994) ......cccc000 1,3,4

NOW, Inc. v. Scheidler, 267 F.3d 687 (7 Cir. 2001) ... 5

NOW, Inc. v. Scheidier, No. 86-C-7888, 1999 U.S.

Dist. LEXIS 11980 (N. Dist. Ill. July 28, 1999) ............... 4

Ohio v. Kovacs, 469 U.S. 274 (1985) ......ccccccccccceceeeeeees 4

Oscar v. University Students Co-op Ass'n, 965 F.2d

Fe Cae, FEF Cae DI) ccccccccccscccccecceccscccscesscces 9,13

Palmetto State Medical Center v. Operation Lifeline,

rat nrrestrrrnemeensenmeensscsens 1,4

Patterson v. McLean Credit Union, 491 U.S. 164

EE 17

Penn Central Transportation Co. v. Cityof New York,

TD sc nrseteteetinstrcarnntncencnenenmsenennscansnnenennnees 8

Planned Parenthood v. American Coalition of Life

Activists, 945 F.Supp. 1355 (D.Or. 1996) ..........c0000e0 4

Reves v. Ernst & Young, 507 U.S. 170 (1993) ............ 10

United States v. Billingsley 474 F.2d 63 (6" Cir.

SL 15

United States v. Brecht, 540 F.2d 45 (2™ Cir. 1976) .. 12

United States v. Jones, 529 U.S. 848 (2000) .............. 18

United States v. Lew, 875 F.2d 219 (9 Cir. 1989) .... 11

United States v. Russo, 708 F.2d 209 (6 Cir. 1983)

son nssensusessnesenssunesnensnessseesessesSUesnenSCRIDSeNDaSEDSDUSNSnines 16, 17

United States v. Stillo, 57 F.3d 553 (7 Cir. 1995) ....... 6

United States v. Tolub, 309 F.2d 286 (2™ Cir. 1962) . 15

Veneklase v. City of Fargo, 78 F.3d 1264 (8* Cir.

1996), cert. den., 519 U.S. 867 (1996), further appeal

at 248 F.3d 738 (11" Cir.) (en banc), cert. den., 122

ee PEED conmsnnerssnitininepeteniaiiiidinmatiiidietiaeininiities l

West Hartford v. Operation Rescue, 991 F.2d 1039

FP Te creecitniiviiitinianiininnibininstintanditaiaiatiiiaiie |

CONSTITUTIONAL PROVISIONS, STATUTES AND RULES

I BG ea iiicindninctbinniitignn eee 10

SD UIOG, 0 SI i cccciitsniitisnditiniecitnsiits 7, 10, 14

EO a a NERS eS 11

I I iii 11

I AN i 11

RN I ia ies icin ilililidien

BB ULB. © BOGERD cececccsccsscsssssssccsssscssssessscsssssessssssessese

9B UBC. § IDGALS) nccccccccccccceccsscnssccesccsensssescsseseesses 4,12

Racketeer Influenced Corrupt Organizations Act, 18

a ie passim

MISCELLANEOUS AUTHORITY

Angela Hubbell, FACEing the First Amendment:

Application of RICO and the Clinic Entrances Act to

Abortion Protesters, 21 Onto N.U. L. Rev. 1061

(a

Comment, Regulating the Abortion Clinic

Battleground: Will Free Speech be the Ultimate

Casualty?, 21 Ohio N.U. L.Rev. 995 (1995) .........--++0++

J. Raskin and C. LeBlanc, Disfavored Speech About

Favored Rights: Hill v. Colorado, the Vanishing

Public Forum and the Need for an Objective Speech

Discrimination Test, 51 AMERICAN U. LR. 179

|

Operation Rescue: A Historical and Theoretical

Analysis, 48 WASH. & LEE L. REV. 77 (1991) ........-.00+++

L. Wardle, The Quandary of Pro-Life Free Speech: A

Lesson from the Abolitionists, 62 ALB. L.REv. 853

ee

Note, Stretching RICO to the Limit and Beyond, 45

DUKE L.J. 819 (1996)

SSS ESEEEEEEEEEEESESEE SEER EEE ES

including parties in the prior appearance of the instant case

' Counsel of record to the parties in this case have consented to the

filing of all amicus curiae briefs on behalf of any party, pursuant to

blanket consents filed with the Court on May 8, 2002 (Petitioners’

2 See, e.g., Palmetto State Medical Center v. Operation Lifeline,

117 F.3d 142 (4* Cir. 1997); West Hartford v. Operation Rescue,

991 F.2d 1039 (2™ Cir. 1993); New York v. Operation Rescue, 80

F.3d 64 (2™ Cir. 1996); Lucero v. Trosch, 121 F.3d 591 (11* Cir.

1997); Veneklase v. City of Fargo, 78 F.3d 1264 (8* Cir. 1996), cert.

den., 519 U.S. 867 (1996), further appeal at 248 F.3d 738 (11* Cir.)

(en banc), cert. den., 122 S.Ct. 42 (2001). See generally John W.

Whitehead, Civil Disobedience and Operation Rescue: A Historical

and Theoretical Analysis, 48 WASH. & LEE L. REV. 77 (1991).

l

Government.

The Court’s amicus will address its arguments solely to the

second Question Presented in No. 01-1118, whether the Hobbs

Act criminalizes the activities of political protestors who

engage in sit-ins and demonstrations that obstruct the public’s

access to a business’s premises and interfere with the freedom

of putative customers to obtain services offered there. See

Petition for Writ of Certiorari, at i This question raises the

extremely important issue of whether there exist constitutional

limits to the use of the civil tort system to exact speech-chilling

sanctions against protestors for aggressive speech on politically

divisive issues, on the dubious basis that such protestors are

“extorting” an intangible property right or civil right possessed

by the business and its customers.

SUMMARY OF ARGUMENT

Amicus respectfully submits that the Seventh Circuit's

longstanding view that mere apprehension of loss of business

due to the actions of Hobbs Act defendants is sufficient to give

rise to liability under the Act, reiterated in Scheidler I] and

886 (1982).

ARGUMENT

Abortion clinics frequently seek to employ the civil liability

provisions of the RICO Act’ as a tool for limiting abortion

> 18 U.S.C. § 1962(c).

protests. RICO was enacted with broad language in the intent

to provide claimants and courts with all the tools necessary to

combat the economic effects of organized crime. The salient

provision of RICO makes it 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 enterprise’s affairs through a pattern of racketeering

activity or the collection of an unlawful debt." A “pattern” of

RICO ectivity occurs if two “predicate acts” are committed

within a ten-year span. °

In Scheidler I, the Supreme Court unanimously rejected the

argument that RICO could not be construed to apply to

political protestors because they lacked an economic

motivation to constitute an “enterprise” under RICO. 510 U.S.

at 258-259. The Court as a whole did not address RICO's

potential chilling effects upon free speech or associational

rights. However, Justice Souter, concurring, recognized that

RICO had the potential to infringe upon legitimate free speech

rights. Jd. at 806, n6 (Souter, J., concurring). As one

commentator noted after Scheidler I, it would appear that “any

damage or technical trespass can be elevated to a federal

crime.”* Due to the uncertain limits of RICO, many abortion

protesters are hesitant to engage in expressive activity out of

4

18 U.S.C. § 1962(c).

5 18U.S.C. § 1961(5).

5 Angela Hubbell, FACEing the First Amendment: Application of

RICO and the Clinic Entrances Act to Abortion Protesters, 21 OHIO

NU. L. REV. 1061, 1067 (1995). See also Comment, Regulating the

Abortion Clinic Battleground: Will Free Speech be the Ultimate

Casualty?, 21 Ohio N.U. L.Rev. 995 (1995).

3

fear of being subjected to RICO liability. RICO can be

particularly intimidating because of the potential assessment of

triple damages, the stigma facing racketeering charges, and the

possible legal costs that could be involved.’ Since Scheidler,

several courts have ruled on the merits of RICO claims against

poe with me Gnd , ficting)

Scheidler IT now reviews the Northern District of Ijinois’

judgment against three pro-life protest leaders and their

organizations for their efforts to demonstrate outside Chicago

area abortion clinics. The Petitioners were ordered to pay over

eighty-five thousand dollars to two abortion clinics, which

award was trebled pursuant to RICO.’ Although the

Respondents neither alleged nor proved that Petitioners were

personally directly responsible for the alleged acts of federal

and state extortion that formed the predicate offenses necessary

to prove a RICO enterprise existed, the court allowed them to

lnk to Petitioners various violent acts committed by other anti-

* 18 U.S.C. § 1964(c).

" See, e.g., Palmetto State Med. Ctr. v. Operation Lifeline, 117

F.3d 142 (4* Cir. 1997) (no evidence existed to show that Operation

Lifeline or any of the individual defendants engaged in any illegal

activities on the particular dates alleged by the plaintiff-hospital);

Planned Parenthood v. American Coalition of Life Activists, 945

F.Supp. 1355 (D.Or. 1996) (plaintiffs adequately stated RICO claims

against all defendants but one); National Org. of Women v. Scheidler,

1997 WL 610782 (N.D.Il. 1997) (permitting certain RICO claims to

proceed against defendants, while granting judgment for plaintiffs on

other RICO claims).

* NOW, Inc. v. Scheidler, No. 86-C-7888, 1999 U.S. Dist. LEXIS

11980 (N. Dist. Il. July 28, 1999).

4

abortion protesters who were not parties to the case.'°

The Seventh Circuit Court of Appeals affirmed the

decision.'' On the key issues that have now been presented to

the Supreme Court, the Seventh Circuit ruled mn favor of NOW.

The appeals court held that violations of the federal extortion

law, the Hobbs Act, could establish that there were “predicate

acts” of racketeering committed, even though the Hobbs Act

requires proof that the accused individuals sought io obtain

“property” of another person — clearly not the intent of the

protesters. 267 F.3d at 709.

[Petitioners’] primary contention on this pomt is that

the Hobbs Act defines extortion as “the obtaining of

property from another, with his consent, induced by

wrongful use of actual or threatened force, violence, or

fear,” and that the things [Respondents] claim were

taken here — the class women's rights to seek medical

services from the clinics, the clinic doctors’ rights to

perform their jobs, and the clinics’ rights to provide

medical services and otherwise conduct their

businesses -— cannot be considered “property” for

purposes of the Hobbs Act. However, this circuit has

repeatedly held that intangible property such as the

right to conduct a business can be considered

“property” under the Hobbs Act, see, e.g., United States

v. Anderson, 716 F.2d 446, 450 (7" Cir. 1983), and we

267 F.3d at 709. The Seventh Circuit likewise reiterated its

"0 See L. Wardle, The Quandary of Pro-Life Free Speech: A Lesson

from the Abolitionists, 62 ALB. L.REV. 853, 888 (1999).

"NOW, Inc. v. Scheidler, 267 F.3d 687 (7* Cir. 2001).

5

prior holding that “as a legal matter, an extortionist can violate

the Hobbs Act without either seeking or receiving money or

anything else. A loss to, or interference with the nghts of, the

victim is all that is required.” Jd., citng United States v. Stillo,

57 F.3d 553, 559 (7" Cir 1995).

The Court’s amicus urges that, for the reasons discussed

herein, the Court of Appeals’ broad reading of the definition of

“extortion” under the Hobbs Act, coupled with the historically

expansive reading of the term by other Circuits construing the

Act, poses an unacceptable threat to the First Amendment free

speech nights of protestors and demonstrators across the

political spectrum. Conceivably, the Court of Appeals’

decision could chill not only pro-life protestors, but union

organizers and picketers, civil nghts activists, environmental

of public fora, though undoubtedly quite a bit more peaceable,

would in no way resemble the places for “robust, uninhibited

and wide-open”? debate the First Amendment was intended to

protect.

I. THE “INTANGIBLE RIGHTS” THEORY OF EXTORTION

REVIVES ABSTRACT LOCHNER-ERA NOTIONS OF

ABSOLUTE PROPERTY RIGHTS WHICH ARE NO

LONGER VALID AND WILL DETER PUBLIC

OPPOSITION TO BUSINESS.

The fundamental error in the Seventh Circuit’s decision is

that it creates out of thm am a federal common law of

2 New York Times v. Sullivan, 376 U.S. 254, 270 (1964). See J.

Raskin and C. LeBlanc, Disfavored Speech About Favored Rights:

Hill v. Colorado, the Vanishing Public Forum and the Need for an

Objective Speech Discrimination Test, 51 AMERICAN U. L.R. 179

(2001).

intangible property rights that is radically more expansive than

the law recognizes in any other context. “Obtaining property”

illegally as extortion has to mean something more than simply

interfermg with or affecting another’s exercise of his property

rights. The intangible right not to have a business affected by

outside influence is not, and would not, be recognized as

“property” under the Fifth Amendment Takings Clause,

environmental law, bankruptcy law, or RICO’s “enterprise”

requirement.

The Hobbs Act defines “extortion” as: “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”” 18 U.S.C. 1951(b)(2). Scheidler IT

defines the “obtaining of property” as encompassing

protestors’ deprivation of a business’ right to operate free of

interference, and its customers’ right to receive such services.

267 F.3d at 709. But the protestors have not “obtained”

anything unless it is the imagined “property” interest in the

abstract not to be interfered with by political opponents. This

hopelessly circular definition of “property” would transform all

simple torts at the state level into federal extortion. It is a

doctrinal move of breathtaking dimension that would be

rejected in every other area of the law.

The notion that an outsider “takes” property whenever she

influences a business’s decisions is the same theory of absolute

property rights espoused in Lochner v. New York, 198 U.S. 45,

63-64 (1905). In Lochner, the Court held that a law restricting

a business’ right to operate as it saw fit was a deprivation of a

constitutionally protected business nght without substantive

due process. Jd.

Lochner is no longer the law. When government restricts

how a business may conduct its affairs, this restriction is not a

“taking of property” unless the owner has been substantially

dispossessed of his land. See Nollan v. California Coastal

Comm'n, 483 U.S. 825, 834 (1987) and cases cited therein.

Even though the regulation may remove one stick m the

business’s bundle of rights, it is not a “taking of property,”

even if the business’s prohibited conduct was not inherently

blameworthy or noxious. See Penn Central Transportation Co.

v. City of New York, 438 U.S. 104, 130-131, 133 n.30 (1978).

Penn Central recognized that the 19th century regime of

absolute property rights is over. Businesses are influenced by

a multitude of pressures, including government regulation and

outside protest. Cf; NAACP v. Claiborne Hardware, 458 U.S.

at 913 (“While States have broad power to regulate economic

case.””); cf. Eastern Railroad Presidents Conference v. Noerr

Motor Freight, Inc., 365 U.S. 127 (1961) (railroad company

The intangible right to influence a business’ conduct is also

not recognized as “property” under environmental law. For

example, citizens who claim the nght to restrain a business’s

toxic dumping do not possess by virtue of that right any

“property” right over the offending business that would entitle

them to the extra remedies of RICO. See Genty v. Resolution

Trust Corp., 937 F.2d 899, 918 (3 Cir. 1991) (unlawful toxic

dumping not remediable under RICO) and Drake v. B.F.

Goodrich Co., 782 F.2d 638, 644 (6" Cir. 1986) (same), cited

in Oscar v. University Students Co-op Ass'n, 965 F.2d 783,786

(9™ Cir. 1992) (en banc). If the Seventh Circuit’s view applied

consistently, neighbors of a polluting business would have an

intangible property interest in the offending business, simply

because they claim a legal power to restrain the business’s

conduct of its affairs. If a legal claim to control a business’

toxic dumping does not confer “property” on environmentalists

under RICO, then RICO cannot consistently label them as

extortionists seizing an “intangible property night” when they

picket or prutest to achieve the same end.

Likewise, bankruptcy law treats a business’s promise to

modify its conduct as only a contractual obligation, not a

property interest of the promisees. For example, a business’s

obligation to clean up toxic wastes does not make the affected

neighbors into secured lienholders in its property if the

business goes bankrupt. Persons affected by a business’ toxic

waste bave no secured property right over the business. A

bankrupt business may normally liquidate its clean-up

obligations and discharge them as an umsecured claim in

bankruptcy. See Ohio v. Kovacs, 469 U.S. 274, 282 (1985); In

re Jensen, 995 F.2d 925, 929-931 (9 Cir. 1993).

This fact shows the inconsistency in the Seventh Circuit’s

intangible rights theory of property. If environmentalists

succeed in compelling a business to change its conduct €.z.,

by signing a code of clean business conduct), they have not

obtained a secured property right (like a lien) that would be

recognized in bankruptcy proceedings. If a labor union forces

a business to sign a collective bargaining agreement, that

agreement is not a secured property right, even though it

restricts how the business conducts its affairs. The bankrupt

see 15 U.S.C. § 1113, as it could not with a property lien held

by a secured creditor. Yet Scheidler IT holds that protestors

who seek to induce concessions from health care providers are

“obtaining property” in violation of the Hobbs Act if they

commit any civil wrong in their protests. This is an inconsistent

doctrine.

The Supreme Court implicitly rejected the “intangible

property rights” theory in deciding when outsiders can be said

to “conduct[ ] or participat[e], directly or indirectly, in the

conduct of an enterprise” in Reves v. Ernst & Young, 507 U.S.

170, 184-185 (1993). Reves held that outsiders who harm a

business cannot be said to "conduct or participate,” even

indirectly, in the conduct of the business’ affairs within the

meaning of RICO, 18 U.S.C. § 1962(c). Only actual insiders

meet that test. See 507 U.S. at 185. Reves’ interpretation of 18

U.S.C. § 1962(c) cannot be ignored in construing the Hobbs

Act, 18 U.S.C. § 1951(b)(2). The statutes involve the same

concept: when does a tort-feasor obtain the business that she

harms? If the intangible-rights theory of extortion were valid,

the Supreme Court could not have rejected the plaintiff's

theory of “enterprise” in Reves. Harming a business would

have been the same as obtaining an intangible control over the

business. This was rejected in Reves, yet this is the theory of

“obtaining property” revived here.

The Ninth Circuit Court of Appeals properly saw through

this argument in Monterey Plaza Hotel Ltd. Partnership v.

Local 483, 215 F.3d 923 (9 Cir. 2000). Monterey Plaza

concerned an employer’s attempt to employ a similar rationale

10

to impose RICO liability upon a labor union based on predicate

acts of mail and wire fraud under 18 U.S.C. §§ 1341 and 1343.

215 F.3d at 926-927. The statutes at issue were designed to

prevent deceptive communications by wire, radio or television.

They explicitly require an intent to obtain “money or property

[from the one who is deceived] by means of false or fraudulent

pretenses, representations, or promises.” §§ 1341 and 1343;

see United States v. Lew, 875 F.2d 219, 221 (9 Cir. 1989).

The Union did not obtain property by deceiving the

Hotel or its customers; the Union was simply carrying

on a strategy in a protracted labor dispute. The Union's

conduct may have been vexatious or harassing, but it

was not acquisitive. The purpose of the mail fraud and

wire fraud proscriptions is to punish wrongful transfers

of property from the victim to the wrongdoer, not to

salve wounded feelings.

Id. at 927 (emphasis added). The Court should take the same

cautious road as the Court of Appeals n Monterey Plaza,

recognizing that a regime that punishes speakers for intangible

harms is simply too evanescent to administer without certain

damage to the cherished right to protest.

Il. THE “INTANGIBLE-RIGHTS” THEORY OF

“EXTORTION” WILL DETER PUBLIC OPPOSITION

TO BUSINESS.

The Seventh Circuit’s expansion of the Hobbs Act makes

a difference only when the challenged conduct is not otherwise

a RICO predicate act. When a defendant commits crimes that

are independently punishable by more than a_ year’s

imprisonment, see 18 U.S.C. § 1961(1), the RICO plaintiff

does not need to rely on the Hobbs Act to claim them as

11

predicate acts. The expanded use of “extortion” theories will

only be relevant when the alleged misconduct is too munimal

to trigger RICO on any other ground.

The Hobbs Act does not define any minimum threshold for

“extortion.” Before civil RICO, courts tried to contain the

application of the Hobbs Act by admonishing prosecutors to

invoke it only for serious offenses. See, e.g., United States v.

Brecht, 540 F.2d 45, 52 n.14 (2™ Cir. 1976) (instructing U.S.

Attorney to “exercise careful judgment” in deciding whether to

commence a federal prosecution for conduct so close to a state-

law misdemeanor). This was only a plea for moderation, not

a tule of law. After the explosion of civil RICO, courts can no

longer count on neutral prosecutors to keep the Hobbs Act

private businesses suing their adversaries under civil RICO

have no public duty to confine their extortion charges to “really

serious” conduct.

Furthermore, businesses that want to rid themselves of

activists will have every incentive to make out “extortion”

claims against them, even for minimal or non-existent wrongs.

Because RICO provides for mandatory attorneys’ fees to a

prevailing plaintiff, 18 U.S.C. § 1964(c), proof of even nominal

damages will impose a ruinous attomeys’ fee liability on the

protestor to pay the business’s corporate lawyers. There is no

similar provision for fees to prevailing RICO defendants if the

suit turns out to be baseless.

12

movement.” Note, Stretching RICO to the Limit and Beyond,

45 DuKEL.J. 819, 821 (1996). The activist organization does

not have an equivalent RICO remedy for the business’s crimes

and torts, because ordinary citizens have no RICO-enforced

“{ntangible property rights” against wrongs committed for pro-

business (and anti-union or anti-environmental) motives. See

Oscar, 965 F.2d at 785-786.

This outcome is not Congress’ fault. So long as the courts

stick to the plain meaning of the phrase “obtaining of property

from another, with his consent, induced by wrongful use of

actual or threatened force, violence, or fear,” the Hobbs Act

does not lend itself to the suppression of social activism. This

language addresses something more than interference with a

business — it requires the outright expropriation of property

from a victim, with the victim’s coerced consent. No other

area of the law would accept the outrageous “intangible rights”

theory of property advanced here, which is nothing less than

the criminal-law ghost of Lochner.

Il. By ADOPTING THE HosBBs ACT’S

CRIMINALIZATION OF “EXTORTION” AS THE

“OBTAINING OF PROPERTY FROM ANOTHER,

WITH CONSENT” WHERE SUCH CONSENT “Is

INDUCED BY THE WRONGFUL USE OF ACTUAL

OR THREATENED FORCE, VIOLENCE, OR FEAR,”

THE SEVENTH CIRCUIT’S DECISION INTRODUCES

SUBSTANTIALLY VAGUE AND OVERBROAD

JUDICIAL RESTRICTIONS ON ACTIVITIES OF

POLITICAL PROTESTORS.

Even assuming that the imtangible-rights theory applies to

the actions of Petitioners and others similarly situated, the term

“fear” is substantially vague and overbroad as construed by the

Circuit Courts of Appeal and is in critical need of clarification

13

right.” 18 U.S.C. § 1951(b)(2) (emphasis added). The Hobbs

Act element of fear has been interpreted in various ways by the

comply with requests made by the defendants, while others

defendant was of the sort of character that would exploit such

In Callanan v. United States, 223 F.2d 171 (8 Cir. 1955),

a mere conversation between a labor representative and an

employer was found to induce reasonable fear in the employer

on the part of the organizer. 223 F.3d at 176. The employer

vocalized his fears concerning the quality of work he would

receive from the organizer's labor pool and the organizer

suggested a price that the employer could pay so his fears

would not be realized. Jd. at 175. The employer agreed on a

il

E

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need only play on the victim’s fear — based on circumstances

not of the defendant’s making — in order to obtain the property.

The Second Circuit followed the Eighth Circuit’s reasoning

in Callanan, and further elaborated on the reasonableness of

fear by the victim, in United States v. Tolub, 309 F.2d 286 (2°

Cir. 1962). The Second Circuit found that the evidence

submitted as to the reasonableness of the victim’s fear was

sufficient, which included the testimony by the victim that he

was “overwrought” because he fe't he had to pay money to the

defendant, a union organizer. Jd. at 288. The court also held

that there was sufficient evidence from which a jury could find

that Tolub was in a position of harm, and fear of such harm

was reasonable. Jd. This evidence included Tolub’s duties,

which showed that he was in a position to “influence the

employees, to cause slowdowns and stoppages,” even if such

acts were not approved by the union. /d. at 289. The court

affirmed that the jury was able to find inducement of fear from

the testimony of the victim as to state of mind. /d. Also, if the

victim knew of the position of the defendant as a union official,

“deliberately imposed fear” could be inferred solely based on

that position. Jd.

Similarly, in Carbo v. United States, 314 F.2d 718 (9" Cir.

1963), the Court allowed evidence a defendant’s bad moral

character because it showed the defendant’s alleged plan to

instill fear and the subsequent generation of fear in the victims.

In Carbo, boxing promoters linked with organized crime

attempted to gain control of the boxers themselves along with

the rights to showcase the boxer’s fights by intimidation of the

boxer’s managers and extortion of funds. The court held that

defendant to “be dangerous and that fear reasonably resulted.”

Id. at 741. See also United States v. Billingsley 474 F.2d 63

(6" Cir. 1973) (character evidence admissible of a labor

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organizer to show generation of fear in victim).

Teo Fh Cont tne 0d Oo ee oe eas fear

q that the Government need not

Dery eet consequence or that te victim personally feared

the Defendant. United States v. Sander, 615 F.2d 215 (5 Cir.

1980). The Court found an extortionate act when a zoning

board member informed a land developer that the payment of

$10,000 would ensure a favorable vote and may eliminate any

trouble he could encounter in obtaining a zoning permit. Id. at

217. The Court classified this act to be a “subtle extortion”

since the victim did not actually fear the defendant, but rather

feared economic harm. /d. at 218. The Court further held that

the Government satisfies its burden of proof if the

circumstances surrounding the alleged acts render the victim's

fear reasonable. Id. The plaintiff faced a potential loss of

millions of dollars, which induced him to part with his money,

and the Court held this uncertainty to be a threat adequate to

establish reasonable fear. Jd. at 219.

The most in depth explanation of the element of fear as

used in the Hobbs Act derives from jury instructions affirmed

by the Sixth Circuit in United States v. Russo, 708 F.2d 209 (6®

Cir. 1983). In Russo, the defendants were charged with

violations of the Hobbs Act for forcing an employer to make

payments to a union pension and welfare fund. Id. at 210. The

jury instructions stated in part

apprehension of anticipated harm. It does not

necessarily refer to physical fear or fear of violence. It

includes fear of economic loss. It exists if you find

beyond a reasonable doubt that by threats of the

defendant, fear of economic loss was created in the

victim’s mind, or that the defendants knowingly and

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willfully used the victim’s fears of economic loss; and

under the circumstances it was reasonable for the

victim to have such fear; and that the defendant made

use of such fear to extort or attempt to extort.

Id. at 213. The Court of Appeals held that the instructions

properly required only a finding of fear of economic loss. /d.

The opinion drew a cautionary concurrence by District Judge

Holschuh, who admonished that aggressive labor protest not be

chilled by RICO liability:

In labor's struggle for higher wages and better working

conditions and in management's efforts to mmimume

labor costs, the use of threats o* economic loss is

commonplace. Employees threaten to shut down an

employer's plant by strike if their demands for higher

wages are not met; employers in today's economy have

threatened to shut down their own plants if employees

do not agree to reduce their wages.... This case... may

be the first case in which the Hobbs Act has been held

to apply to activities between an employer and the

employer's own employees while engaged in an attempt

to resolve a labor dispute over terms and conditions of

employment. The ramifications of the majority opinion

are both far-reaching and, to me, troublesome for both

labor and management.

708 F.3d at 216-217 (Holschuh, D./., concurring in result)

(citation and footnotes omitted).

CONCLUSION

The federal courts should not interpret a federal statute to

take over and swallow up an entire field of state regulation

absent explicit Congressional direction See Patterson v.

17

McLean Credit Union, 491 U.S. 164, 183 (1989) (42 U.S.C. §

1981 will not be read to cover all claims for breach of contract

involving racial animus, since this would federalize state law

without clear Congressional authority and direction); United

States v. Jones, 529 U.S. 848 (2000) (Commerce Clause

authority does not permit Congress to enact federal criminal

legislation based upon conduct historically within the authority

‘on of loss of business - would become predicate

acts of “extortion” sufficient to subject protestors to federal

racketeering judgments, since such conduct would deprive the

business of an intangible right to operate free of disruption.

The federal courts should not read a federal statute this broadly

without clear authority from Congress. For the reasons stated

above, the Court of Appeals should be reversed.

Respectfully submitted,

Jamin B. Raskin

(Counsel of Record)

WASHINGTON COLLEGE OF LAW

4801 Massachussetts Ave., NW

Washington, DC 20016

Tel.: (202) 274-4011

John W. Whitehead

Steven H. Aden

THE RUTHERFORD INSTITUTE

112 Whitewood Rd.

Charlottesville, VA 22901

Tel: (434) 978-3888

July 12, 2002

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