Opposition Brief — Eisen v. United States

Nos. 92-919, 92-968 and 92-969 J, 2.

= Dice Of int CLEKK

Jn the Supreme Court of the Cited States

OcTOBER TERM, 1992

MORRIS J. EISEN, PETITIONER

UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI!

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

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QUESTIONS PRESENTED

1. Whether the government adequately established

the state-law predicate offenses on which petitioners’

racketeering convictions were based.

2. Whether the Racketeer Influenced and Corrupt

Organizations Act (RICO), 18 U.S.C. 1961 et seq., is un-

constitutionally vague.

3. Whether mail fraud in violation of 18 U.S.C. 1341

(1988 & Supp. TI] 1991) constitutes a RICO predicate

offense when the fraudulent scheme involves a violation

of a state perjury statute that does not itself constitute a

predicate offense.

4. Whether a defendant can “conduct or participate,

directly or indirectly, in the conduct of [the] enterprise’s

affairs through a pattern of racketeering activity” in

violation of 18 U.S.C. 1962(c) without exercising control

over the management or operation of the enterprise.

5. Whether the district court erred in responding to

petitioners’ claim that the jury would be influenced by

media reports about actions one of petitioners’ lawyers

took in another case.

TABLE OF CONTENTS

Page

eae es ceicdidevaniaxesspisstarcspaviess 2

Jurisdiction................ Milieweres 2

Statement ooo... 2

Arguinent................. 7 asa seedeas ; f

Conclusion............ 14

TABLE OF AUTHORITIES

(Cases:

Demarest v. Manspeaker, WAS. Ct. 599 (1991) 7,12

(rrayned v. City of Rockford, 408 U.S. 104 (1972) ........ a

HJ. Inc. v. Northwestern Bell Telephone Co., 492 U.S

Tee ee ee sev vaiuadeevevev eit y

Kolender v. Lawson, 461 U.S. 352 (1983) .... ets ~

Reves v. Ernst & Young, cert. granted, 112 S. Ct. 1159

(1992) (No. 91-886) .................... bidcehaa ks 12

United States v. Angiulo, 897 F.2d 1169 (st Cir ), cert

denied, 111 S. Ct. 130 (1990) ...................0.0.0000. iG

i/nited States v. Coiro, 922 F.2d 100% (2d Cir.) cert. de

| nied, 11S. Ct. 2826 (A991) occ. ee 4

United States v. Coonan, 9238 F.2d 15523 (2d Cir. 1991).

cert. denied, 112 S. Ct. 1486 (1992)

United States v. Erwin, 792 F.2d 656 (Sth Cir.). cert. de

nied, 479 U.S. 991 (1986) ................ 7

United States v. Licavoli, 725 F.2d 1040 (6th Cir.), cert

denied, 467 U.S. 1252 (1984) .00.000...... 7

| United States v. Muskousky, #62 F.2d 1319 (7th Cir

1988), cert. denied, 489 U.S. 1067 (1989) 7

United States v. Paone, 782 F.2d 3&6 (2d Cir.) certs. de

nied, 479 U.S. 8&2 (1986) and 483 U.S. 1019 (1987 17

{ United States v. Powell, 423 U.S. 87 (1975) .....

United States v. Pungitore, 910 F.2d 1084 (3d Cir. 1990

cert. denied, 111 S. Ct. 2009 (1991

Cases —Continued: Page

United States v. Woods, 915 F 2d 854 (3d Cir. 1990), cert.

denied, 111 S. Ct. 1413 RIPE saree en tone G10)

Village of Hoffman Estates v. The Flipside, Hoffman

Estates, Inc., 455 U.S. 489 (1982) «000.0000... ~

Constitution and statutes:

18 U.S.C. 1961(1)(A) (1988 & Supp. IT 1991) 0. 6,9

18 U.S.C. 1961(1)(B) (1988 & Supp. II] 1991) .......... 10

MS NPA re MMOD weckitilaistbtcnanreradiitte tants oc ca ® 9

adi hs ite , , eRN ne a e ED 2, 3, 6, 11

BE RE spahate WIMINED seionciaesScasnsaccueusbieete cacscie anced et cc 2,3

Travel Act, 18 U.S.C. 1952 (1988 & Supp. IIT 1991) .0....... fj

I8 U.S.C. 1341 (1988 & Supp. III 1991) 0.00 3, 10-11

N.Y. Penal Law (McKinney):

TOME SUMED siniisesknecsuietuessisasphdcacccecnoeete 5,6

PBA COWUDP scsi cspiciniiedavcin causedces 3,6

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In the Supreme Court of the Cited States

OcTOBER TERM, 1992

No. 92-919

Morris J. EHISEN, PETITIONER

ae

UNITED STATES OF AMERICA

No. 92-96%

GERALDINE G. MORGANTI AND DENNIS RELLA

PETITIONERS

y.

UNITED STATES OF AMERICA

No. 92-969

JOSEPH P. NAPOLI, PETITIONER

.

UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUTI

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. la-

Ada)! is reported at 974 F.2d 246.

JURISDICTION

The judgment of the court of appeals was entered on

August 17, 1992. A petition for rehearing was denied

on October 20, 1992. Pet. App. 46a. The petitions for a

writ of certiorari were filed on November 27, 1992 (in

No. 92-919) and December 7, 1992 (in Nos. 92-968 and

92-969). The jurisdiction of this Court is invoked

under 28 U.S.C. 1254(1).

STATEMENT

After a four-month jury trial in the United States

District Court for the Eastern District of New York,

petitioners Eisen, Morganti, and Napoli were con-

victed of racketeering and conspiracy to engage in

racketeering, in violation of the Racketeer Influenced

and Corrupt Organizations Act, 18 U.S.C. 1962(¢c) and

(d) (RICO); petitioner Rella was convicted of con-

spiracy to commit racketeering offenses. Petitioner

Kisen was sentenced to 57 months’ imprisonment,

fined $100,000, and ordered to forfeit $500,000 and to

make restitution of $17,100. Petitioner Morganti was

sentenced to 37 months’ imprisonment, fined $25,000,

and ordered to make restitution of $17,100. Petitioner

' “Pet. App.” refers to the appendix to the petition in No.

92-919.

Napoli was sentenced to 46 months’ imprisonment,

fined $75,000, and ordered to forfeit $30,000. Peti-

tioner Rella was sentenced to 24 months’ impris-

onment. Gov't C.A. Br. 2. The court of appeals

affirmed. Pet. App. la-45a.

1. Morris J. Kisen, P.C., was a Manhattan law firm

that specialized in bringing personal injury suits on

behalf of plaintiffs. The Kisen firm earned millions of

dollars in contingency fees by bringing false personal

injury suits, paying friendly witnesses to testify

favorably and hostile witnesses not to testify at all,

and creating false photographs, documents, and phys-

ical evidence of accidents for use before and during

trial. Petitioner Kisen was the founder, sole share-

holder, and principal attorney of the Eisen firm.

Petitioner Napoli was associated with the firm in an

“of counsel” capacity and was the firms main trial

attorney. Petitioner Morganti was the office admin-

istrator of the Eisen firm. Petitioner Rella was a

private investigator affiliated with the firm. Pet. App.

3ja-4a; see Gov't C.A. Br. 5-29.

2. A grand jury indicted petitioners for racketeer-

ing and conspiracy to engage in racketeering, in

violation of 18 U.S.C. 1962(c) and (d). To establish the

requisite “pattern of racketeering activity,” the in-

dictment alleged that petitioners had bribed wit-

nesses, in violation of N.Y. Penal Law §§ 20.00 (1987)

and 215.00 (McKinney 1975), and committed mail

fraud, in violation of 18% U.S.C. 1341 (1988 & Supp. III

1991). Indictment 1-37. At trial, the government

offered testimony of some of petitioners’ former

accomplices to establish the predicate racketeering

acts. Petitioners submitted a proposed jury in-

4

struction articulating a New York rule that requires

the prosecution to corroborate accomplice testimony

used to prove serious offenses.* The court refused to

give the proposed instruction. See 92-919 Pet. 10-12.

At the time of petitioners’ trial, the government

was engaged in the unrelated RICO prosecution of

John Gotti, which also was pending in the United

States District Court for the Eastern District of

New York. While petitioners’ jury was deliberating,

the court in the Gotti prosecution heard argument on

the government’s motion to disqualify several of the

defense attorneys in that case, including Gerald L.

Shargel, who was at the same time representing

petitioner Napoli in this case. When the govern-

ment’s disqualification motion became the subject of

substantial media coverage, petitioner Napoli argued

that the media coverage of his attorney in the Gotti

prosecution would lead the jury in this case to

associate him with the defendants in the Gotti

prosecution. The district judge decided that the

proper course was to advise each juror individually in

chambers to avoid all news media reports over the

coming weekend. Napoli’s counsel objected to in-

dividual interviews and requested that the jury

instead be sequestered. The judge denied the request

but admonished the jury to avoid all news media

reports over the weekend. The court set up a

telephone line the jurors could call to receive news

about events in the Persian Gulf. Pet. App. 38a-39a;

see Gov’t C.A. Br. 184-185.

“ See United States v. Paone, 782 F.2d 386, 393-394 (2d Cir.)

(discussing the rule), certs. denied, 479 U.S. 882 (1986) and 483

U.S. 1019 (1987); 92-919 Pet. 11 n.2 (same).

5

After the jury convicted petitioners on the

racketeering and racketeering conspiracy counts, the

district court vacated petitioner Rella’s substantive

racketeering conviction because the racketeering

acts underlying that conviction were not committed

within the limitations period. Pet. App. 5a & n.1;

Gov't C.A. Br. 2 & n.1.

3. The court of appeals affirmed. Pet. App. la-45a.

The court specifically rejected eight of petitioners’

claims, two of which are presented in these petitions.

First, it concluded that mail fraud may serve as a

RICO predicate offense even when the fraudulent

scheme effectuated by the mailing involves a state-

law perjury offense that would not itself constitute a

predicate offense under RICO. Z/d. at 10a-lla. The

court explained that “where, as here, a fraudulent

scheme falls within the scope of the federal mail fraud

statute and the other elements of RICO are

established, use of the mail fraud offense as a RICO

predicate act cannot be suspended simply because

perjury is part of the means for perpetrating the

fraud.” Jd. at 10a. Second, the court rejected peti-

tioner Napoli’s claim that the trial court erred in

refusing to sequester the jury to protect it from

publicity concerning his counsel’s actions in the

Gotti prosecution. /d. at 38a-41la. The court noted

that the trial court admonisned the jurors to avoid

media reports of all kinds until the end of the trial.

The court also noted that the allegations regarding

counsel’s conduct in the Gotti case did not concern

the trial in this case. /d. at 40a. Finally, the court

disposed of a number of petitioners’ other claims by

“find[ing] them to be without merit.” Jd. at 45a.

6

ARGUMENT

1. Petitioners’ principal claim is that the bribery

offenses that were used as predicate acts in their

prosecutions were not “chargeable under State law”

for purposes of 18 U.S.C. 196101)(A) (1988 & Supp. IT

1991), and that the racketeering convictions resting

on those offenses thus should be overturned. 92-919

Pet. 14-45; 92-968 Pet. 13-19; 92-969 Pet. 28-34. RICO

proscribes participation in the conduct of an enter

prise’s affairs “through a pattern of racketeering: ac-

tivity.” 18 U.S.C. 1962(¢). Section 196101)(A), in turn,

defines “racketeering activity” to include a variety of

offenses “chargeable under State law.” In this case,

the government relied on state-law bribery offenses

as some of the predicate acts of racketeering activity.

The indictment cited N.Y. Penal Law §§ 20.00 (1987)

and 215.00 (McKinney 1975), see, e.g., Indictment 10,

18, and the district court properly instructed the jury

that it could convict petitioners only if it found that

the government had proved all of the elements of the

offenses created by those provisions of New York law.

Tr. 9114-9116."

* Because the government in this case proved all of the

substantive elements of the state-law crimes it used as predicate

offenses, petitioner Eisen accomplishes nothing by his extensive

discussion (92-919 Pet. 14-45), joined by the other petitioners

(see 92-968 Pet. 13-14; 92-969 Pet. 28-29), of the uncertainty in

the lower courts regarding the circumstances in which the

government must establish all the state-law elements to

establish predicate offenses in prosecutions under RICO and the

Travel Act, 18 U.S.C. 1952 (1988 & Supp. IIT 1991). Whether

or not the government always must establish the precise

elements of a particular state-law crime to use it as a predicate

for a RICO offense, the convictions in this case were proper

~)

Petitioners correctly point out that the district

court declined to instruct the jury that the

government was required to corroborate accomplice

testimony that the government used to establish the

predicate offenses in question. See 92-919 Pet. 10-1]

& n.2; 92-968 Pet. 14-19. But the text of RICO plainly

does not require such proof. Whether or not the

government corroborated the testimony of the accom

plices, the charged conduct that the government

established at trial was “chargeable under State law,”

which is all that RICO requires. As the Second

Circuit explained in United States v. Paone, 7&2 F.2d

386, cert. denied, 479 U.S. 882 (1986), the language of

the statute makes it clear that “Congress did not

intend to incorporate the various states’ procedural

and evidentiary rules into the RICO statute.” 782

i'.2d at 393.

because the government specifically established al! the elements

of the state-law bribery offenses at issue here. Petitioner

Napoli’s argument (92-969 Pet. 29-34) that the trial court did

not properly instruct the jury regarding the “understanding”

element of the state-law offenses was not raised in the court of

appeals and is thus not properly before this Court. See Napoli

(A. Br. 49-60. Compare, e.g., Demarest v. Manspeaker, 111 5

Ct. 599, 603 (1991). In any event, Napoli’s argument on that

state-law question does not appear to raise a substantial

question of federal law.

‘ See United States v. Coonan, 93% F.2d 1553, 1564 (2d Cir

1991), cert. denied, 112 S. Ct. 1486 (1992); United State

Erwin, 793 F.2d 656, 669 (5th Cir.), cert. denied, 479 U.S. 991

(1986): United States v. Licavoli, 725 F.2d 1040, 1047 (6th Cir

(“The reference to state law in [RICO] is simply to define the

wrongful conduct, and is not meant to incorporate state pro

cedural law.”), cert. denied, 467 U.S. 1252 (1984); United

&

Petitioners do not suggest that any other court

would have required the prosecution to adhere to

state-law procedural requirements like the corrobo-

ration requirement at issue in this case. In light of

the clear intent of the RICO statute on the point,

petitioners’ claim does not merit review by this

Court.

2. Petitioners also contend (92-919 Pet. 46-64; 92-

968 Pet. 20; 92-969 Pet. 39) that RICO is unconstitu-

tionally vague. That claim does not merit review.

Absent First Amendment considerations, a defen-

dant may not challenge a statute for vagueness on the

ground that there is some uncertainty regarding the

full reach of the statute in marginal cases not before

the court. Rather, the defendant must show that the

statute is vague as applied to the particular conduct

with which he is charged. See Village of Hoffman

Estates v. The Flipside, Hoffman Estates, Inc., 455

U.S. 489, 494-495 & n.7 (1982); United States v.

Powell, 423 U.S. &7, 92 (1975). Thus, to sustain such a

vagueness attack, the defendant must show that the

statute fails to give a person of ordinary intelligence

reasonable notice that his conduct is forbidden. See

Kolender v. Lawson, 461 U.S. 352, 357 (1983);

Grayned v. City of Rockford, 408 U.S. 104, 108 (1972).

Whatever ambiguity may exist at the margins of

the RICO statute, it is clear that the statute is

sufficiently precise to pass constitutional muster as

applied in this case. First, contrary to the argument

advanced by petitioner Eisen (92-919 Pet. 46-57), any

States v. Muskovsky, 863 F.2d 1319, 1331 (7th Cir. 1988), cert.

denied, 489 U.S. 1067 (1989).

9

person of ordinary intelligence would understand that

the phrase “chargeable under State law” in 18 U.S.C.

1961(1)(A) (1988 & Supp. II] 1991) includes the bribery

offenses used as predicate offenses in this case. The

jury was instructed that it could convict petitioners

only if it found that they had violated all of the

elements of a specific New York bribery statute.

Assuming that the jury correctly found those facts to

be true, it is plain that the conduct would have been

“chargeable under State law.” The fact that the

government proved those violations in a federal court

using federal procedural and evidentiary rules does

not obscure the fact that the substantive conduct is

forbidden by the New York statute and chargeable as

a criminal offense under that statute.

The same is true of petitioner Eisen’s challenge

(92-919 Pet. 57-64) to RICO’s “pattern” requirement,

in which the other petitioners join (92-968 Pet. 20; 92-

969 Pet. 39). That challenge relies primarily on the

concurring opinion in H.J. Inc. v. Northwestern Bell

Telephone Co., 492 U.S. 229, 254-256 (1989), in which

Justice Scalia, joined by three other Justices,

expressed doubt whether the RICO “pattern” element

could withstand a constitutional vagueness chal-

lenge.® But even in the wake of H../. Inc., the courts of

appeals uniformly have rejected vagueness challenges

to RICO’s “pattern” requirement. See United States

v. Coiro, 922 F.2d 1008, 1016-1017 (2d Cir.), cert.

denied, 111 S. Ct. 2826 (1991); United States v. Woods,

915 F.2d 854, 862-864 (3d Cir. 1990), cert. denied, 111 S.

5 The RICO statute states that a “pattern” requires “at least

two acts of racketeering activity” within a particular ten-year

period. 18 U.S.C. 1961(5).

10

Ct. 1413 (1991); United States v. Pungitore, 910 F.2d

1084, 1102-1105 (8d Cir. 1990),-cert. denied, 111 S. Ct.

2009 (1991); United States v. Angiulo, 897 F.2d 1169,

1178-1180 (ist Cir.), cert. denied, 111 S. Ct. 130 (1990).

In any event, the lengthy series of similar

racketeering acts committed by the law firm under

petitioners’ direction® would satisfy any plausible

definition of the “pattern” requirement. Petitioners’

vagueness challenge to the “pattern” requirement

thus has no merit.

3. Petitioners Morganti, Rella, and Napoli also

argue (92-968 Pet. 21; 92-969 Pet. 35-38) that mail

fraud does not constitute a valid predicate offense

under RICO if the fraudulent scheme involves state-

law perjury, because such a perjury offense would not

itself constitute a RICO predicate offense.? That

claim is meritless. Section 1961(1)(B) of Title 18

(1988 & Supp. III 1991) describes the conduct that

constitutes “racketeering activity” for purposes of

RICO; the definition includes “any act which is

indictable under * * * section 1341 (relating to mail

fraud).” Petitioners do not argue that the conduct in

question was not indictable as a violation of 18 U.S.C.

* For a summary of 16 of the racketeering acts, see Gov't

C.A. Br. 7-29.

* Despite Napoli’s arguments to the contrary (92-969 Pet.

36-37), it is irrelevant that one of the predicate acts of mail

fraud was established with the aid of a stipulation. Napoli’s

counsel agreed to the stipulation and moved to withdraw it

only after the jury had begun deliberating and had asked to

review the evidence showing that the letter was mailed. Gov't

C.A. Br. 156. The accuracy of the stipulation is not relevant to

the question whether mail fraud is a valid RICO predicate

offense when it is related to perjury.

11

1341 (1988 & Supp. III 1991); the plain language of the

statute therefore rebuts their argument.* The fact

that the purpose of the fraudulent scheme in questioii

was to commit an act that would not itself have been a

federal offense is irrelevant, just as it would have

been irrelevant in a prosecution for the mail fraud

itself. The justification for federal criminal sanctions

in a RICO ease of this sort, as in Section 1341, is

Congress’s judgment that fraudulent conduct in-

volving the use of the mails interferes with distinctly

federal interests not adequately addressed by state

criminal sanctions. Moreover, petitioner Napoli

acknowledges that apart from the Second Circuit’s

opinion in this case, “there is no authority con-

cerning the use of mail fraud as a predicate act” in

this context. 92-969 Pet. 37. Accordingly, petitioner’s

challenge to the mail fraud predicate offenses does not

merit plenary review.

4. Napoli also claims (92-969 Pet. 15-20) that his

RICO convictions are improper because he was

merely of counsel to the Eisen firm, and “did not

participate in the conduct of [the] enterprise’s affairs

within the meaning of [the] RICO statute,” id. at 19.

In particular, he contends that the phrase in 18

U.S.C. 1962(c) requiring the defendant “to conduct or

participate, directly or indirectly, in the conduct of

[the] enterprise’s affairs through a pattern of

* As the court of appeals explained, “where, as here, a

fraudulent scheme falls within the scope of the federal mail

fraud statute and the other elements of RICO are established,

use of the mail fraud offense as a RICO predicate act cannot be

suspended simply because perjury is part of the means for

perpetrating the fraud.” Pet. App. 10a.

12

racketeering activity” can be satisfied only by proof

that the defendant exercised control over the

management or operation of the enterprise. Although

the Court granted certiorari to consider that ques-

tion in Reves v. Ernst & Young, 112 S. Ct. 1159 (1992)

(No. 91-886), the petition need not be held pending

disposition of that case, because Napoli did not raise

the issue in the court of appeals. Accordingly, the

claim is not properly before the Court, and petitioner

Napoli would not be entitled to relief under any

disposition of Reves. See, e.g., Demarest v. Man-

speaker, 111 8S. Ct. 599, 603 (1991).

5. Finally, petitioner Napoli claims (92-969 Pet. 21-

27) that the trial court erred in its treatment of his

claims relating to the publicity surrounding his

counsel’s behavior in the Gotti prosecution. After

reviewing the record, the court of appeals sum-

marized the relevant events as follows:

When the problem was brought to Judge Sifton’s

attention on the Friday of the hearing in the Gotti

case, the Judge determined that he would speak

with each juror individually in chambers about

avoiding all news media over the weekend.

Defense counsel objected to individual interviews,

arguing that it would magnify the problem, and

instead requested sequestration. The Judge de-.

nied sequestration, but conducted a general

inquiry of the jury, asking the jury to avoid all

news media over the weekend and providing a

means by which concerned jurors could call the

Court to ascertain the progress of then pending

events in the Persian Gulf without resort to the

13

media. The jurors gave their general agreement

that they could comply.

Pet. App. 39a. As that discussion makes clear, “[t]he

steps taken to protect the integrity of the jury

deliberations were adequate under the circum-

stances.” Jbid. Although it might have been appro-

priate for the district court to have sequestered the

jury, petitioner has identified no reason to believe

that the trial court was required to proceed as

petitioner suggested. The district court’s exercise of

its discretion in determining how to proceed in these

particular circumstances does not present a legal

question of general significance.°

*° To the extent petitioner claims that the trial court erred

by declining to hold a hearing to evaluate his factual assertion

that the jury disobeyed its instructions and was affected by the

media coverage (92-969 Pet. 25-26), the claim is not properly

before the Court, because Napoli did not raise that claim in the

court of appeals. In that court he argued not that the trial

court erred in declining to investigate his assertions of juror

misconduct, but that he was entitled to a new trial based on his

view that the trial judge should have sequestered the jury. See

Napoli C.A. Br. 84-97. In any event, the question whether

petitioner’s allegations that the jurors disobeyed their in-

structions were of sufficient weight to require the trial judge

to conduct a hearing is not one of general significance, but

involves the application of well-settled principles of law to the

facts of this case.

14

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

WILLIAM C. BRYSON

Acting Solicitor General

JOHN C. KEENEY

Acting Assistant Attorney General

DAVID S. KRIS

Attorney

JANUARY 1993