Opposition Brief — Mississippi v. Roderick

In The beeoeeerrr™

Supreme Court of the United States

October Term, 1997

¢

THE STATE OF MISSISSIPPI,

Petitioner,

BYRON RODERICK, BILLY SAXTON

and CYNTHIA SAXTON,

Respondents.

+

On Petition For Writ Of Certiorari

To The Supreme Court Of Mississippi

+

RESPONDENTS’ BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

2 a

Eart L. DENHAM

Counsel of Record

Levi & DennaoM, Ltp.

Post Office Box 580

Ocean Springs, MS 39568-0580

Telephone: (228) 875-1234

Counsel for Respondents

Byron Roderick,

Billy Saxton and

Cynthia Saxton

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-283!

QUESTIONS PRESENTED FOR REVIEW

Is there any jurisdiction for this Court to hear this

case, a case involving the Mississippi Supreme Court's

interpretation of Mississippi law and its holding of a

Mississippi statute unconstitutionally void for vague-

ness?

If there is jurisdiction, did the Mississippi Supreme

Court err in determining that the Racketeer Influenced

Corrupt Organizations Act (RICO), Miss. Code Ann.

8§ 97-43-3(b) and 97-43-5(3, 4) (1972) are unconstitu-

tionally vague as applied to Mississippi's civil usury

statute thus invoking the jurisdiction of this Court?

il

LIST OF INTERESTED PARTIES

1. State of Mississippi, Petitioner

2. Hon. Jean Smith Vaughan, Consumer Protection

Division, Office of the Attorney General of the State

of Mississippi, and Counsel for Petitioner

WwW

Hon. Leslie Staehle, Consumer Protection Division,

Office of the Attorney General of the State of Missis-

siIppl

3. Byron Roderick, Respondent

~

Billy Saxton and Cynthia Saxton, Respondents

cl

Hon. Earl L. Denham, Counsel for Respondents

6. Hon. Robert H. Walker, Circuit Court Judge

(ther Interested Parties:

7. Hon. Mike Moore, Attorney General of the State of

Mississippi

8. City of Gulfport, Mayor Ken Combs

9. Hon. James B. Halliday, Gulfport Assistant City

Attorney

10. Harrison County, Mississippi and the Harrison

County Board of Supervisors, Bobby Eleuterius,

President, Larry Benefield, David LaRosa, Sr., Robin

Alfreda Midcalf, and C. T. Switzer, Jr.

11. Hon. Steve Simpson, Harrison County Assistant Dis-

trict Attorney

hN

Hon. Edward O’Neal, Harrison County Assistant

District Attorney

. ee

18.

ill

LIST OF INTERESTED PARTIES —- Continued

Ed Twomey, Detective, Gulfport Police Department

George H. Payne, Jr., Chief of Police, Gulfport Police

Department

Hon. William H. Jones, Attorney representing sev-

eral “check cashing” businesses in Mississippi

Elvin J. Roberts, Check Cashing, Incorporated

Mississippi Check Cashing Association, Elvin J.

Roberts, President, Todd Broom, Vice-President,

Jackie Peterson, Secretary, Dan Robinson, Treasurer,

Danny King, former president

Hon. Mike Frascogna, Attorney for Mississippi

Check Cashing Association

iV

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW ........... i

Lit CF INT RARO Fes PAREIEO 6s cise ies es euneden ii

SPs SIE. aR Rs Ks 64S bin hee hae ga eakcke iv

EER ns ATE GRE EUG TE BAO 6 06 1.0 PKs pe weeeenaeD Vv

PLS) fA to Se POR ee Dern ae eid Ae ere rye” hd eMer per l

CONSTITUTIONAL AND STATUTORY PROVI-

SNS SecA LACK ERATE REN OR ETOP ES eS sabia tees 2

DIAEROIME GIR, CTE Mh eri vel iavcdthaveteva’. Oo

CORRECTION OF MISSTATEMENTS IN THE PETI-

c 2 2, ERE Cg re ee ey Peek cary eee te pee a mere 6

REASONS FOR DENYING THE WRIT............. )

|. Review is not required as no federal question

was presented in the courts below........... 10

NM

The Mississippi Supreme Court was not

required to rely upon case law from other juris-

dictions in its analysis of this matter......... 1]

3. The failure of the Mississippi RICO statutes

and the indictment to afford due process notice

iat Of OCUIVIEY 86 CFIMNEMIBE 2 o oie cc cc wieas ss 12

4. The Petitioner’s claim that intent is proved by

Sas * enema = rE ig Sid ha 14

CXR CRE Ges bos od DEGRA S ae RAEN ORES eee en A

TABLE OF AUTHORITIES

Page

Cases-FEDERAL:

Adams v. Robertson, 117 S.Ct. 1028, 520 U.S. 83, 137

ae ae i ORS ee a ah cc ae 18

Connally v. General Construction Co., 269 U.S. 385,

6:65: 396776 6G Fe OS ok ck 11

U.S. v. Aucoin, 964 F.2d 1492 (5th Cir. 1992), cert.

denied, 121 L.kd.2d 587, 113 S.Ct. 661 (1992) ...... 15

U.S. v. Petrillo, 332 U.S. 1, 67 S.Ct. 1538, 91 L.Ed.

SF CRE cor PCE uae ek Pade ee Cen SG Ook, 15, 16

United States v. Addonizio, 451 F.2d 49, 58 n. 7 (3d

Cir. 1971), cert. denied, 405 U.S. 936, 92 S.Ct. 949,

= ge FE 2 Se | MLE» ge 3 RD RO tg Page Sh I A 12

United States v. Biasucci, 786 F.2d 504 (C.A. 2 1986),

cert. denied, 479 U.S. 827, 107 S.Ct. 104 (1986)..... 16

United States v. Eufrasio, 935 F.2d 553 (C.A. 3 1991),

cert. denied, 502 U.S. 925, 112 S.Ct. 340, 116

Di ME A I NE a oe Nn I ST i a 12

United States v. Pepe, 747 F.2d 632 (C.A. 11 1984) ...16, 17

Williams v. United States, 341 U.S. 97, 71 S.Ct. 576,

ey Ren ae NE i een Wena ee a yy aud 15

CASES-STATE:

Polakoff v. State of Florida, 586 So.2d 385 (Fl. 1991).... 17

Ahmad v. State, 603 So.2d 843 (1992) ................ 13

Huntley v. State, 524 So.2d 572 (Miss. 1988).......... 13

Hydrick v. State, 150 So.2d 423, 246 Miss. 448 (Miss.

DES oa che NAA Soa ih as 6 ns Palys BEE 4 hose ee 8 17

Vi

TABLE OF AUTHORITIES — Continued

Page

Nichols v. City of Gulfport, 589 So.2d 1280 (Miss.

1991) . ..... 0's os:s'e wile ateate tiie eile anata aimee oh aall 13

Pearl River Valley Water Supply Dist. v. Hinds

County, 445 So.2d 1330 (Miss. 1984)

(2987) . . oc 00 wa.c0.ib 6a ane ene ae 15, 16

State v. Thrower, 62 Ohio App.3d 359, 575 N.E.2d

$63 (1989)

Sunburst Bank v. Keith, 648 So.2d 1147 (Miss. 1995) .... 17

STATUTES:

i8 U.S.C. § 1962... 0. 53.4485 ee a aes 2

28 USC. § 1237. .5<.c 5k ee AS herr eat FCCP awe

Miss. Code Ann. & /2-47=2 40min cbus st bntcehsheeeuns 17

Miss. Code Ann. § 75-17-5 (1972) ..... PED GU aais ae

Miss. Code Ann. § 97-43-3(b) (1972)...... ag ay Stas Se 2

Miss. Code Ann. § 97-43-5(3, 4) (1972) .............2.. 2

OTHER AUTHORITIES:

62 Harv. L.R. 77. (3968S sic ke ee ee eere a 14

;

ii a

JURISDICTION

Petitioner relies upon 28 U.S.C. § 1275 to invoke the

jurisdiction of this Court. Respondent assumes that Peti-

tioner has committed a scrivener’s error in attempting to

cite 28 U.S.C. § 1257. (App. - 1.)

According to 28 U.S.C. § 1257, jurisdiction of this

Court is granted after final judgment or decree is ren-

dered by the highest court of a state in the following

instances: (a) where the validity of a treaty or statute of

the United States is drawn in question; (b) where the

validity of a statute of any State is drawn into question as

being repugnant to the Constitution, treaties or laws of

the United States; or (c) where any title, right, privilege,

or immunity is specially set up or claimed under the

Constitution, treaties, statutes, or any commission or

_ authority of the United States.

In the instant case, there is no dispute regarding the

validity of a treaty or statute of the United States. As to

the validity of a state statute, the Mississippi Supreme

Court examined the use of Mississippi's civil usury law

as the predicate “crime” for an indictment under the

Mississippi RICO statute and held that the application of

the Mississippi RICO statute to the Mississippi civil usury

law would criminalize activity not previously criminal

under Mississippi statutes without fair notice and defi-

nite warning of the prohibited conduct. Such a finding is

clearly not repugnant to the Constitution, treaties or laws

of the United States. Finally the record is clear that this

matter does not involve any title, right, privilege, or

immunity protected by the Constitution, treaties, statutes,

or any commission or authority of the United States. This

Court does not have jurisdiction in this matter.

CONSTITUTIONAL AND STATUTORY PROVISIONS

Petitioner sets forth 18 U.S.C. § 1962 in its declaration

of the constitutional and statutory provisions which are

to be reviewed by this Court. This citation, however, is

also erroneous as the Respondents were not indicted

under the federal RICO Act, nor did the Mississippi

Supreme Court or the trial court find it necessary to rely

upon the federal RICO Act for guidance to determine the

constitutionality of Petitioner’s utilizing Mississippi's

civil usury law as the basis for a criminal indictment of

Respondents under Mississippi's RICO Act. As the record

clearly demonstrates, the Petitioner’s sole reference to

federal RICO during argument before the lower court

was to inform the iower court that Mississippi RICO i:

similar to federal RICO. No federal statute played any

role in the history of this case. The decision turned on

state law as interpreted by the Mississippi Supreme

Court, which held that under the peculiar circumstances

of this case and given the interpretation of Mississippi

statutes concerning usury, the state RICO statutes, Miss.

Code Ann. §§ 97-43-3(b) and 97-43-5(3, 4) (1972), are

constitutionally void for vagueness when used by the

State to attempt to criminalize usury, a civil offense in

Mississippi. (Pet. App. - 43.)

—— —¢ —

STATEMENT OF THE CASE

Respondent, BYRON RODERICK, a businessman

from Jackson, Mississippi, opened a check cashing service

in Gulfport, Mississippi. He leased a location, raised the

necessary start-up cash, and hired Respondents, BILLY

SAXTON and CYNTHIA SAXTON, to open and manage

the business which was known as “We Cash It”. The

business purchased a license from the City of Gulfport in

September of 1993 and advertised itself. The purpose of

the business was to provide discounted cash for a cus-

tomer’s check with the customer allowed fourteen to

sixteen days to redeem the check. If the customer chose

not to redeem the check, then “We Cash It” would

deposit the customer’s check. Although customers were

not required to pay interest, a one-time fee was charged

for the service. Customers sometimes post-dated checks

which they tendered to the business.

The check cashing industry was at the time of the

alleged crime unregulated by the State of Mississippi but

flourishing statewide. The Mississippi Attorney General's

office (including Leslie Staehle and Jean Smith Vaughan

in their capacities as Special Assistant Attorneys Gen-

eral), the Legislature, and the Check Cashing Association

were meeting regularly to discuss and negotiate legisla-

tive regulation of the fledgling industry prior to and

during the time Respondents were in business. (R - 20-21,

110-112, 114-115.) Testimony from various witnesses was

presented to the lower court regarding conversations and

meetings with the Check Cashing Association, the district

attorney, various members of the Attorney General’s

office, the legislative Banking Committee, and Attorney

General Mike Moore. (R - 71, 83-85, 108-111, 114, 118-126.)

During cross-examination, Special Assistant Attorney

General Jean Smith Vaughan acknowledged that the

meetings occurred. Because of the State’s interest in regu-

lating check cashing, Roderick and others in the business

repeatedly tried to obtain and did obtain guidance from

the Attorney General's office regarding the legality of the

business prior to opening.

However, after “We Cash It” opened for business an

investigation by the City of Gulfport Police Department

ensued utilizing information and testimony provided by,

of all people, Special Assistant Attorney General Leslie

Staehle. On October 22, 1993, eight police officers raided

the premises of “We Cash It” with a search warrant based

on Staehle’s “interpretation” of Mississippi’s RICO stat-

ute. The police officers meticulously went through every-

thing on the premises, including a fast food lunch bag

containing a hamburger. Except for a few large pieces of

furniture, the police seized nearly everything on the

premises, including all checks, business documents,

video tape machines, calculators, telephones, filing cabi-

nets, and even the hamburger, causing a total shutdown

of the business. Roderick and the Saxtons could not con-

tinue to operate the business without their business

records. The destruction of the business was one obvious

intent of the search.

Despite numerous telephone calls by Respondents’

counsel during which the police maintained that there

was no ongoing investigation in progress, the confiscated

property was not returned until November 9, 1993, when

furnishings and equipment of the office, minus the nego-

tiable instruments, were returned to the Respondents.

Without the checks the business completely failed.

On August 19, 1994, Respondents, Byron Roderick,

Billy Saxton, and Cynthia Saxton were indicted by the

Grand Jury of Harrison County, Mississippi, on two

counts of alleged violations of Mississippi RICO (not

three counts as is alleged by the Petitioner). (Pet. - 3; Pet.

App. - A-48 - A-52.) The statute upon which the underly-

ing predicate “crime” of usury was based was not cited in

the indictment.

On March 23, 1995, the Petitioner filed a Motion In

Limine requesting the court to “exclude any evidence or

testimony by the Defendants (Respondents) of any offi-

cial or unofficial action or lack of action by the Office of

the Attorney General, its agents or employees, relating to

the business of check cashing in the State of Missis-

sippi...” (CP - 17-22. Quoting from p. 17.) Defendants /

Respondents filed a Suggestion of Conflict of Interest and

Motion for Counsel to Withdraw on or about March 28,

1995.

During a hearing held on May 12, 1995, arguments of

counsel were heard by the Circuit Court, and the pre-

arrest conduct of Leslie Staehle and Jean Smith Vaughan,

who were now representing the State in its prosecution of

this case, was presented to the Circuit Court. The court

was informed that these two attorneys, while acting in

their official capacities as Special Assistant Attorneys

General and other state officials, had represented to

Roderick and other agents and representatives of check

cashing businesses that check cashing as a business in

Mississippi is legal. Further, these same two attorneys

were intimately involved in negotiations, conferences and

legislative committee meetings regarding proposed legis-

lation to regulate check cashing businesses in Mississippi.

(R - 21-23, 28, 30, 71-73, 83-84, 96, 108-112, 119-121.)

According to the record, Special Assistant Attorney Gen-

eral Staehle gave a verbal opinion to the Gulfport Police

Department wnich precipitated the arrests of the Respon-

dents for the same alleged “criminal activity” to which on

the other hand she was referring before the legislature as

a business activity which should be regulated.

Respondents filed a Motion to Quash and Dismiss

Indictment and Demurrer and supporting brief on May

30, 1995. On June 5, 1995, the date set for the trial, a

hearing was held on the motion, and three days later the

Circuit Court entered its Order dismissing the indict-

ment. (Pet. App. A-31 - A-42.) The Petitioner then

appealed the matter to the Mississippi Supreme Court.

After briefs were submitted by all parties, the Mississippi

Supreme Court affirmed the Circuit Court’s order. State v.

Roderick, 704 So.2d 49, 54-55 (Miss. 1997). Being aggrieved

with the decision of the Mississippi Supreme Court, the

Petitioner filed its Petition for Writ of Certiorari to which

Respondents now reply.

CORRECTION OF MISSTATEMENTS

IN THE PETITION

The Petitioner complains that the Mississippi

Supreme Court erred in accepting testimony presented in

the Circuit Court regarding the Respondents’ efforts to

obtain information from the Attorney General’s office

regarding the law and check cashing business prior to

beginning a new venture in this fledgling industry. The

testimony clearly established a lack of criminal intent and

was properly offered for that purpose as well as to dem-

onstrate prosecutorial misconduct. The Petitioner,

although admitting that meetings occurred and contact

was made with various individuals in the check cashing

industry, refused to acknowledge its own participation in

the Respondents’ efforts to follow state law. During the

hearing before the Circuit Court undisputed testimony

was offered that check cashing is unregulated in Missis-

sippi and that -he Attorney General’s office met on

numerous occasions with representatives of the check

cashing industry to formulate proposed regulations for

submission to the Legislature. In any case no federal issue

exists in regard to the Petitioner’s concerns.

The Petitioner has made unsubstantiated and

unproven allegations that the Respondents advanced

funds for fees up to 900% interest. Testimony before the

Circuit Court established that those in the check cashing

industry were discounting negotiable instruments and

charging a one time fee to cash each check. Again, no

federal issue is presented.

Petitioner’s argument that the purpose of RICO is to

eradicate organized crime implies that the Respondents

are involved with organized crime. During briefing

before the Mississippi Supreme Court, the Petitioner’s

numerous references to “loansharking” were made in the

State’s desperate attempt to raise a stigma of mafia con-

nections and underworld dealing which are nothing short

of pathetic. These implications were never raised before

the Circuit Court and are not supported by the record, the

facts, or the indictment. The record clearly demonstrated

the following: (a) Byron Roderick was a respected busi-

nessman in Jackson, Mississippi, who has owned and

a

operated a vacuum cleaner sales and service business for

over twenty-two years (R - 17, 109); (b) Billy Saxton is a

retired City of Gulfport police officer (R - 16-17); (c)

Cynthia Saxton is a therapist in a hospital. (R - 16-17);

and (d) “We Cash It” was the first venture by any of these

parties in a check cashing business. There is no evidence

to support the Petitioner’s allegation that these parties

have any history of involvement with organized crime.

The Respondents would point out, arguendo, that if the

Respondents are involved with organized crime, then the

Attorney General was knowingly meeting with the mafia

to regulate and profit by its nefarious activities. Again,

there is no federal issue.

The record does not support the Petitioner’s claim

that Respondents have “claimed to be outside the law” or

stated “that no law applied to them.” (Pet. - 20.) Since

Mississippi has no regulatory guidelines for check cash-

ing businesses, Roderick, along with numerous others in

the business, contacted and met with the Attorney Gen-

eral’s office to seek guidance and to discuss proposed

legislative regulation. Based upon information obtained

from the Attorney General’s office, and in particular from

the very same Special Assistant Attorneys General who

are currently prosecuting this matter, the Respondents

opened for business. This was only one of many similar

check cashing businesses which operated in Mississippi

at the time. After the State seized nearly every asset in

the business, “We Cash It” ceased operation and went out

of business. If Respondents had truly believed that “no

law applied to them,” they would not have made such a

diligent effort to obtain guidance from the State prior to

beginning operations. Respondents were advised that

there was no law governing check cashing in Mississippi,

but it is clearly improper to attempt to put a cynical spin

onto what is a mere statement of fact. Lack of regulation

by the State of Mississippi does not confer the specter of

illegality upon the industry. Thus, lack of criminal intent

is apparent from the record, but this is hardly an issue

which this Court should review.

REASONS FOR DENYING THE WRIT

The Petition- for Writ of Certiorari should be denied

as no federal question was raised in the courts below and

none can be raised here. The validity of the indictment in

the instant case is solely dependent upon an interpreta-

tion of Mississippi’s RICO Act as it applies to Missis-

sippi’s civil usury statute as interpreted by Mississippi's

Supreme Court. There is no interpretation or application

of federal law in the record.

The Mississippi Supreme Court in affirming the

lower court’s dismissal of the indictment against the

Respondents, held that the Mississippi RICO statute as it

was applied in this matter to an allegation of usury is

unconstitutional in Mississippi as it failed to meet the

notice requirements of the Fourteenth Amendment. The

Mississippi Supreme Court’s finding of unconstitu-

tionality pertains only to that portion of the Mississippi

RICO Act which applies to usury as defined under state

law.

10

1. Review is not required as no federal question

was presented in the courts below:

The Mississippi Supreme Court’s decision was a

plainly correct analysis of the law of the State of Missis-

sippi. Here there is no conflict between state and federal

law or between the decision of the Mississippi Supreme

Court and that of any federal court. Petitioners’ primary

concern distills down to the fact that the Mississippi

Supreme Court did not rely upon federal RICO cases

when making its analysis of Mississippi RICO and Missis-

sippi’s usury statute. In fact, no such reliance is possible

in a case based solely on state court interpretation of state

usury statuies. Although the wording of Mississippi

RICO statutes may be based upon that of the federal

RICO statutes, the indictment specifically cites Missis-

sippi RICO. Neither the trial court nor the Mississippi

Supreme Court were required to rely upon federal RICO

in their interpretation of state law. (Pet. App. - A-48 -

A-52.)

The indictment does not cite the Mississippi usury

statute which is relied upon by the State as the underly-

ing predicate crime. This would trouble any court, but

here there was an obvious reason. It did not cite the only

statute applicable to Respondents because it is civil — not

criminal in nature. After Respondents were indicted, the

Petitioner verbally informed them that the indictment

was based upon Mississippi's civil usury statute. The

Mississippi Supreme Court wryly noted the “legal gym-

nastics.” State v. Roderick, supra, at 54 (Miss. 1997).

1]

Petitioner alleges that the Mississippi Supreme Court

misapplied the test for constitutionality set forth in Con-

nally v. General Construction Co., 269 U.S. 385, 46 S.Ct. 126,

70 L.Ed. 322 (1926), but a review of the Mississippi

Supreme Court's decision clearly indicates otherwise.

State v. Roderick, supra, at 52-55. The Mississippi Supreme

Court’s decision was a plainly correct application of the

Connally test to the facts and law in the instant case.

2. The Mississippi Supreme Court was not

required to rely upon case law from other jurisdictions

in its analysis of this matter:

The lower court was asked to determine whether

Mississippi RICO was correctly applied to the facts in this

particular case, not whether federal RICO or another

state’s RICO statutes are constitutional or even applica-

ble. The lower court was also asked to determine whether

the Respondents were given sufficient constitutional

notice that their business activities could be construed as

criminal acts forbidden by usury statutes of the State of

Mississippi, not by usury statutes of Florida, Ohio, New

Jersey, New York, or those of any other state. Although,

arguendo, RICO state statutes may generally differ little

from state to state they do differ, and the usury statutes

of each state significantly differ. Some states have crimi-

nal usury statutes, but in Mississippi the only criminal

statute governs Small Loan Regulatory licensees and even

the Petitioner has never charged its applicability to the

Respondents. The Petitioner has repeatedly stated that

the statute upon which the RICO indictment is based is

the civil usury statute.

12

The case law from other jurisdictions that was cited

by Petitioner discussed RICO indictments which were

based upon criminal statutes, not a civil statute as exists

in Mississippi. The Mississippi Supreme Court speci-

fically addressed this point in its decision:

Also, all crimes used as bases for a RICO pros-

ecution are outlined in the RICO Act, and there

are cross-references between RICO and the

underlying criminal statutes. There do not appear

to be any other cases in which Mississippi or any

other state has tried to prosecute under RICO with a

civil statute as the underlying offense. [Emphasis

added.] No reference to RICO is made in the

usury statute or the other statutes on interest

and finance charges, other than in the previ-

ously discussed § 75-67-119. A person of ordi-

nary intelligence reading the laws governing

interest rates, finance charges, and usury would

not be given fair warning that usury is a pros-

ecutable offense. State v. Roderick, supra, at 54.

3. The failure of the Mississippi RICO statutes

and the indictment to afford due process notice that an

activity is criminal.

Pursuant to case law cited by the Petitioner, “an

indictment charging a statutory crime is sufficient if it

substantially follows the language of the criminal statute...”

{Emphasis added.] United States v. Eufrasio, 935 F.2d 553,

575 (C.A. 3 1991), cert. denied, 502 U.S. 925, 112 S.Ct. 340,

116 L.Ed.2d 280 (1991). See also United States v. Addonizio,

451 F.2d 49, 58 n. 7 (3d Cir. 1971), cert. denied, 405 U.S. 936,

92 S.Ct. 949, 30 L.Ed.2d 812 (1972). In Eufrasio, the court

stated that the indictment must track the language of the

criminal statute in order to allow the defendant adequate

knowledge to develop a defense against the charge. Id. at

13

575-576. In the instant case, the indictment against the

Respondents did not cite any criminal statute other than

RICO; it merely refers in the abstract to the civil usury

statute.

According to the Petitioner, “[d]ue process will not

invalidate a statute if assistance [is] necessary to give the

words of the statute a reasonable meaning,” one may

merely refer to the dictionary for enlightenment. (Pet. -

16.) However, in a criminal matter due process requires

notice of the elements of the alleged crime, not just a

definition of the word “usury.” A penal statute must be

sufficiently explicit so as to inform those subject to its

mandates that conduct will be penalized. Huntley v. State,

524 So.2d 572 (Miss. 1988). See also Nichols v. City of

Gulfport, 589 So.2d 1280 (Miss. 1991) [Penalties of the law

cannot rest upon subjective guidelines, nor can the law

subject individuals to penal consequences without first

providing sufficiently definite notice of warning of what

is prohibited. ]

Without a clear understanding of the elements of the

underlying predicate crime upon which the RICO indict-

ment is based, the Respondents had no way of knowing

with what they have been charged. Since the statute upon

which the Petitioner relied for the indictment is a civil

usury statute, the Respondents had no way of knowing

that their acts could be considered criminal in nature.

Words of a statute or act should be ascribed their

ordinary and usual meaning absent legislative guidance

to. the contrary. Ahmad v. State, 603 So.2d 843, 845 (1992),

citing Pearl River Valley Water Supply Dist. v. Hinds County,

445 So.2d 1330, 1334 (Miss. 1984). The “ordinary and

14

usual meaning” of a violation of the usury statute relied

upon by the Petitioner has been interpreted by the Missis-

sippi Supreme Court as a civil offense not a criminal

offense. See State v. Roderick, supra, 53-55. Therefore, there

was no notice that a violation of the usury statute, if in

fact such occurred, was subject to criminal prosecution.

The Petitioner argues that due process does not

require a finding that a statute is void for vagueness

because the average person must seek legal counsel to

interpret the statute. Citing 62 Harv. L.R. 77, 78 (1948).

Respondents are entitled to notice of the crime with

which they have been charged. The requirement of notice

is not an attempt to place the Respondents outside the

law but to enable them to prepare a defense against the

charges contained in the indictment. Testimony and evi-

dence presented during a hearing before the lower court

clearly demonstrated that the Respondents and all other

individuals interested in establishing check cashing busi-

nesses in Mississippi were making every effort to comply

with the law. The police had no idea a “crime” was

occurring until the Special Assistant Attorney General

explained matters. Even the Mississippi Supreme Court

has been unable to explain to the Special Assistant Attor-

ney General that no crime ever occurred. Given the con-

fusion of the experts, the vagueness of the statute should

be apparent.

4. The Petitioner’s claim that intent is proved by

the indictment:

Petitioner argues that the Mississippi “RICO statute

adds an element of ‘criminal intent’ which must be read

15

in pari materi [sic] and applied to each of the prohibited

acts in the statute.” (Pet. - 21, para. 2.) The Petitioner

relied upon U.S. v. Aucoin, 964 F.2d 1492 (5th Cir. 1992),

cert. denied, 121 L.Ed.2d 587, 113 S.Ct. 661 (1992), to claim

that the element of intent is supplied by the indictment

itself and argues: “The RICO statute must be construed so

as to effectuate the legislative intent to eradicate orga-

nized crime. When the language of the statute conveys

sufficient definite warning of the proscribed conduct

when measured by common understanding and practices,

the Constitution requires no more.” (Pet. - 22-23, 25.) In

Aucoin, the jury was instructed that proof of specific

intent was required before a defendant could be con-

victed of the crimes charged, but the court did not hold

that one may look to the indictment to establish intent.

Supra, at 1498. Here, the prohibited act is not contained

within those statutes specifically set forth in RICO as

prohibited acts but instead is an alleged violation of a

civil usury statute, a statute subject exclusively to inter-

pretation by the Mississippi Supreme Court.

“In determining the sufficiency of the notice, a stat-

ute must be examined in light of the conduct with which

a defendant is charged. The test for vagueness is not

whether there are marginal or remote cases in which its

clarity may be in doubt, but whether it conveys an ade-

quate warning in a specific situation. State v. Passante, 225

N.J. Super. 439, 542 A.2d 952, 956 (1987), citing Williams v.

United States, 341 U.S. 97, 71 S.Ct. 576, 95 L.Ed. 774 (1951);

U.S. v. Petrillo, 332 U.S. 1, 67 S.Ct. 1538, 91 L.Ed. 1877

(1947). The Passante court stated: “ ...2C Rico does not

make conduct criminal that was not already prohibited

16

before its enactment. It was intended to serve as a reme-

dial statute, providing enhanced criminal and civil sanc-

tions for conduct prohibited by existing state and federal

law.” [Emphasis added.] Passante, supra, at 957. Here the

Petitioner is attempting by invoking RICO to make con-

duct criminal that is not rendered criminal by state law.

Respondents clearly did not have “sufficient definite

warning of the proscribed conduct.” See U.S. v. Petrillo,

supra.

According to the Petitioner, the prosecution would

never have to prove any defendant’s intent because the

“intent” would always be established by the use of the

term “willful” in the indictment. How can the Respon-

dents prepare a defense if (1) the Petitioner does not have

to specify the crime charged, and (2) the Petitioner is

allowed to prove intent by the use of terminology such as

“willful” in the indictment. Such manipulation of the true

meaning of “due process” was surely never envisioned

by the makers of the Constitution of the United States

and the Constitution of the State of Mississippi. There can

be no question that the applicabie mens rea of the predi-

cate “crime,” in this case “usury,” is an essential which

must be proved by the State.

In United States v. Biasucci, 786 F.2d 504, 512 (C.A. 2

1986), cert. denied, 479 U.S. 827, 107 S.Ct. 104 (1986) the

court stated that since “RICO imposes no additional mens

rea requirement beyond that found in the predicate

crimes” we must “look to the scienter elements found in

the statutory definitions of the predicate crimes to deter-

mine the degree of knowledge that must be proved to

establish a RICO violation.” Id. at 512. See also United

States v. Pepe, 747 F.2d 632, 675-76 (C.A. 11 1984); State v.

17

Thrower, 62 Ohio App.3d 359, 575 N.E.2d 863, 872 (1989).

The court should define the mental state required by the

predicate act, ie., “knowingly” and “willfully.” United

States v. Pepe, supra, at 676. In the instant case, the “predi-

cate crime” is alleged by the Petitioner to be a violation of

the civil usury statute of the State of Mississippi, an act in

Mississippi which is no “crime” at all.

Respondents could only prepare a defense based

upon the charges contained within the indictment. See

also Polakoff v. State of Florida, 586 So.2d 385 (Fl. 1991). [A

count charging a defendant with a state law violation of

RICO which defines “an unlawful debt” only by reference

to that term in the statute, which itself refers generally to

many other statutes relating to many types of illegal

usurious debts is invalid, as the information does not

directly refer to the usury chapter generally or to a speci-

fic usury statute.]

Where a crime consists of an act combined with

specific intent, intent is just as much an element of the

crime as the act, thus mere general malice or criminal

intent is insufficient as an element and specific intent

must be shown as a matter of fact, either by direct or

circumstantial evidence. Hydrick v. State, 150 So.2d 423,

246 Miss. 448 (Miss. 1963).

In Mississippi, in order to establish a civil violation of

the usury statute Miss. Code Ann. § 75-17-1 (1972), the

creditor must intend to commit usurious acts. (App. -

1-2.) Sunburst Bank v. Keith, 648 So.2d 1147 (Miss. 1995).

However, even if intent is established and it is found that

the creditor exceeded the lawful interest rate, forfeiture of

18

“all interest” is the penalty. Id. at 1152. See also Miss. Code

Ann. § 75-17-5 (1972). (App. - 2.)

+

CONCLUSION

Evidence and testimony presented to the lower court

demonstrates that the Respondents were involved in a

legitimate, though unregulated, business which is a rela-

tively new and growing industry in the State of Missis-

sippi. Testimony established that various individuals

contacted the office of the Attorney General regarding the

business of “check cashing” in the State of Mississippi

and were told that it is legal. (R - 21-23, 71-73, 83-84, 103,

108-112, 119-121, 125-126, 129.) After contacting the office

of the Attorney General and various banking and finance

officials throughout Mississippi ior instructions and

advice, the Respondents began operating a “check cash-

ing” business in Gulfport known as “We Cash It.”

Respondents were then targeted for arrest and caused to

be indicted by the same state officials to whom they had

turned for advice. Respondents never had any intention

of violating the laws of the State of Mississippi, never

violated any state or federal law, and have never claimed

“to be outside the law” or implied that “no law applied”

to them. Respondents made diligent efforts to identify

what laws applied to the “check cashing” industry and to

abide by those laws.

The Mississippi Supreme Court held that Missis-

sippi’s usury statute is clearly civil not criminal, thus no

matter how many lawyers review the statute and inter-

pret its wording, the statute has no criminal penalty. The

aA a 9 Wen SOT NT oe a Dinan PR ol OMEN, 5 NOL Ly <p ait =

19

Petitioner has even admitted that this is so. The decision

of the Circuit Court and the Mississippi Supreme Court

that the Mississippi RICO statute is void for vagueness as

it applies to the facts in the instant case is clearly correct.

There are no questions of federal law in this matter, thus

this Court does not have jurisdiction to review the judg-

ment on a writ of certiorari. See Adams v. Robertson, 117

S.Ct. 1028, 520 U.S. 83, 137 L.Ed.2d 203 (1997). Based

upon the foregoing, Respondents respectfully request the

Court deny the Petition for Writ of Certiorari.

Respectfully submitted,

Eart L. DENHAM

Levi & DenHaM, Lrp.

P. O. Drawer 580

Ocean Springs, MS 39568-0580

(228) 875-1234

Counsel for Respondents

Byron Roderick, Billy Saxton

and Cynthia Saxton

APPENDIX

App. 1

28 U.S.C.A. § 1257. State courts; certiorari

(a) Final judgments or decrees rendered by the

highest court of a State in which a decision could be had,

may be reviewed by the Supreme Court by writ of cer-

tiorari where the validity of a treaty or statute of the

United States is drawn in question or where the validity

of a statute of any State is drawn in question on the

ground of its being repugnant to the Constitution,

treaties, or laws of the United States, or where any title,

right, privilege, or immunity is specially set up or

claimed under the Constitution or the treaties or statutes

of, or any commission held or authority exercised under,

the United States.

(b) For the purposes of this section, the term “high-

est court of a State” includes the District of Columbia

Court of Appeals.

MISS. CODE ANN. (1972) § 75-17-1. Legal rates of inter-

est and finance charges.

(1) The legal rate of interest on all notes, accounts

and contracts shall be eight percent (8%) per annum,

calculated according to the actuarial method, but con-

tracts may be made, in writing, for payment of a finance

charge as otherwise provided by this section or as other-

wise authorized by law.

(2) Any borrower or debtor may contract for and

agree to pay a finance charge for any loan or other

App. 2

extension of credit made directly or indirectly to a bor-

rower or debtor which will result in a yield not to exceed

ihe greater of ten percent (10%) per annum or five per-

cent (5%) per annum above the discount rate, excluding

any surcharge thereon, on ninety-day commercial paper

in effect at the Federal Reserve bank in the Federal

Reserve district where the lender is located, each calcu-

lated according to the actuarial method. The rate of

finance charge authorized under this subsection (2) shall

‘

be known as the “contract rate.”

(3) Notwithstanding the foregoing and any other

provision of law to the contrary, any partnership, joint

venture, religious society, unincorporated association, or

domestic or foreign corporation, whether organized for

profit or nonprofit, may contract for and agree to pay a

finance charge which will result in a yield not to exceed

the greater of fifteen percent (15%) per annum or five

percent (5%) per annum above the discount rate, exclud-

ing any surcharge thereon, on ninety-day commercial

paper in effect at the Federal Reserve bank in the Federal

Reserve district where the lender is located, each calcu-

lated according to the actuarial method, on any contract,

loan, extension of credit or other obligation under which

the principal balance to be repaid shall originally exceed

Two Thousand Five Hundred Dollars ($2,500.00), or on

any series of advances of money pursuant to a contract if

the aggregate of sums advanced or originally proposed to

be advanced shall exceed Two Thousand Five Hundred

Dollars ($2,500.00); and as to any such agreement, the

claim or defense of usury by such partnership, joint ven-

ture, religious society, unincorporated association, or

App. 3

corporation, or their successors, guarantors, assigns or

anyone on their behalf is prohibited.

(4) Notwithstanding the foregoing and any other

provision of law to the contrary, any borrower or debtor

may contract for and agree to pay a finance charge which

will result in a yield not to exceed the greater of ten

percent (10%) per annum or five percent (5%) per annum

above the index of market yields of the Monthly Twenty-

Year Constant Maturity Index of Long-Term United States

Government Bond Yields, as compiled by the United

States Treasury Department, each calculated according to

the actuarial method, on any loan, mortgage or advance

which is secured by a lien on residential real property or

by a lien on stock in a residential cooperative housing

corporation where the loan, mortgage or advance is used

to finance the acquisition of such stock. The term “resi-

dential real property,” as used in this subsection, means

real estate upon which there is located or to be located a

structure or structures designed in whole or in part for

residential use, or which comprises or includes one or

more apartments, condominium units or other dwelling

units.

(5) Notwithstanding the foregoing and any other

provision of law to the contrary, any borrower or debtor

may contract for and agree to pay and any lender or

extender of credit may contract for and receive any

finance charge agreed to in writing by the parties, not-

withstanding that such charge is in excess of that other-

wise allowed on any contract, credit sale, obligation or

other extension of credit, regardless of the security taken

or the purpose of the extension of credit, under which the

principal balance to be repaid originally exceeds Two

App. 4

Thousand Dollars ($2,000.00), or on any series of

advances of money pursuant to a contract if the aggregate

of sums advanced or originally proposed to be advanced

exceeds Two Thousand Dollars ($2,000.00), or on any

extension or renewal thereof; and as to any such agree-

ment, the claim or defense of usury or violation of any

law prescribing, limiting or regulating the rate of finance

charge by any borrower or debtor, or his successors,

guarantors, assigns or anyone on his behalf is prohibited.

This subsection (5) shall stand repealed on July 1,

2001.

MISS. CODE ANN. (1972) § 75-17-5. Discount, interest,

bank issues.

The issues, bills, notes, bonds, or certificates of

deposit of any bank, corporation, or association of per-

sons formed for banking purposes, or possessing banking

privileges, situated within or without the limits of this

state, shall not be loaned in this state bv any agent, officer

or person employed by, or having any interest in or

connection with, any such bank, corporation, or associa-

tion of persons, at a greater rate of discount or interest

than is allowed by the laws of this state. All contracts and

agreements made in violation of the provisions of this

section shall, as to the whole of the discount or interest

allowed or paid, or agreed to be allowed or paid, be void,

and the discount or interest may be recovered back by the

person suffering such discount or paying such interest.