Petition for a Writ of Certiorari — United States v. Laudani

Pace

Opinions below. . -.-.-- --------------+------- pre eae 1

Jurisdiction... +- ' 2

Questign presented * = : 2

Statute involved 2

Siatement_..-¢ . 3

Specifieation of errors to be urged “4 7

Reasons for granting the writ - ¥

Conclusion — - Bee. : 12

x : CITATIONS

Statutes: :

Act of June 13, 1934, ¢. 482, 48 Stat. 948 (40 ELS. C. 276b), |

Section 1. ._. e 3

* Bacon Davis Act. as owe 46 Stat. 1494. 49 Stat. 101k, .

54 Stat. 399 (40 U. S. C. 27fa)......-22----- ------e- hl

Miscellaneous: ae a :

78 Cong. Rec. 10759_...-.-------- bee aouaete es ———

Hearings before a subcommittee of the Senate Committee

on’ Commerce on 3. Res. 74. 73d Cong,, 2d Sess., Vol oe

_g oe eee eee

dentine before a subcommittee of the Senate Committee

on Edueation, and Labor on 8S. Res. 298. 73d Cong., 2d

Sess.. Pts. l and 2 _--- w Pa ee ecg ro 10, 11

H. Rep. No. 1750, 73d Cong., 2d Sess... .-. ------- - 10

S. Rep. No ae Ee eR. ea ee 10

(I>

f

gee 45

- indictments.

nthe Supreme Gourt of the United States

OCTOBER TE RM, 1942

No. —_

UNITED Sibi OF Amprtica, PETITIONER

; v. ,

FRANK LAUDANI :

7

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED |

STATES ‘CIRCUIT COURT OF APPEALS FOR THE THIRD

CIRCUIT (i en

The Solicitor General, on behalf of the United

States, prays that a writ of certiorari issue to

_ review the judgment of the United States Circuit

Court of ‘Appeals for the 7 hird Circuit, entered

March 16, 1943 (R. 376), setting aside convictions

- for: violations of the Act of June 13, 1954, and

direefing the District. Court to quash the .

\ OPINIONS BELOW

“The or rity (R. 367-8374) and dissenting (R.

374-375) opinions ih the Circuit -C ourt of Appeals

are not yet: reported. The memorandum opinion

of the District Court. overruling petitioner's de-

murrer and tnotion to quash the indictments ap-

pears at R. 3i-AP. .

(1)

2

JURISDICTION 7 hf

The judgment. of the’ Circuit Coigrt of sake a

was entered March 16, 1943 CR. 376), anda peti

tion for rehearing (R. 379-390) was denied April

20, 1943 (R. 395). “The jurisdiction of this .C our

is invoked under Se@tion : 240 (ayy of the Judici al

Code, as areemied by the Act vot February 3,

1925. aLimcake a , f

"QUESTION PRESENTED

The Kick-back Act prohibits inducing any per-

“son employed on a-public work financed by the.

United ‘States to give. up any part of the com:

pensation to, which he is entitied under his: con-

tract of employment. The question presented, is 8

Whether this prohibition applies to a -foréinan

acting solely in his own interest,. or whether i

applies ouly té the employer and those acting. 1

his behalf. ea aie %

‘ STATUTE INVOLVED

Section | of the Act of June 13, 1934 (ec. 482.

48 Stat. $48, 40 U.S. C. 276b), commonly called

the Kick-back Act, provides: .

whoever. shall mduce any. person em-

ployed in the construction, prosecution, 01

completion of ahy public building, public

work, or building or work finaticed in

whole or in part. by loans” or grants from

the United States, or in the repair thereof.

to give up any part of the compensation to

which he is entitled under his contract o!

employment, by force, intimidation, threat

a ;

3 Yo :

- ° « a -

“of procuring dismissal from ‘such employ-

ment, or by any-other manner whatsoever,

_ shall be fined not more than $5,000, or im-

prisoned not more than five years, or both.

=

Respondent and: one Alfredo Rossi, fogether with

‘several others, were charged in a series of .in-

dictments with violations of the Kick-bac ‘k Aet of

June 13, 1934 CR. 20-26, 367). Exeept for differ-—

enees in names of the defendants ay allegations

as to the names of victims, dates of the violations;

~ and sums of money exacted, the counts of thie ‘ini-*

dietments were couched in identical language (R. 4

21, 37). They alleged. that between January 4

1937, and May 15, 1938, there was under constrme-

tion, at Weehawken, New. Jersey, certain public

works known as the Weehawken Plazz connection

f'the Lincoln Tunnel under the Hudson River

from New York to New Jersey ; that the work was

heing constructed under: a contract between the

Port of New York Authority -and George» M.

* Brewster & Son, Inc., the genera! contractor,

anid a subcontract between the Brewster Company

aid the Cape Ann Granite Company - for the fur-

nishing and setting of granite rubble facing and:

“ eoplig hecessary in the construction. of the Ww ee-

hawken Plaza connection ; that all.of this publie

work was being’ financed in part by erants from. °

the United. States; that respondent was*foreman

for the Cape Ann Granite Company, with author-

e *

4

ity to employ and . discharge stone cutters and

masons, and: knew that the rate. of pay for such

employees, as fixed and posted. on the work, was 4

certain amount per hour and that these. empboyees

were entitled to receive’ the full posted rate of

pay without deductions for any purpose ; and that

respondent and his co-defe ydants, by intimidation

‘and threats of dismissal and by giving to under-

stand that all pe rsons employ ed on the work .

would he required fo sive the defendants parts of

their trite Wages SO long as they were. ‘SO employed,

- Induced certain named employees to surrender to.

them: parts.of the,compensation to which the em

. ployees were entitled for work. and, labor on the

public work (R, 21-26; 38-39). neuree

The defendants filed a demurrer: (Rh. 26- 31)

and motion to quash (R. 32-36) the indictments

on the ground, ater alia, that it was not alleged

that they were the employers of the victims, or

that they were acting in behalf of the employer in.

inducing the victims to give up part of the com

‘pensation ‘to which they . we re. entitled.’ The

“demurrer and motion to: quash were overriled (R.

342).

The Governme nt. decid to proceed on five of

the indictments. and, after a severance as to th:

defendants other . than respondent ~ and Rossi.

'’Fhix of bjection: Was renewed at the ope ning of the trial (IR.

4if7). aut the close of the Government's case (R. 207-208).

and the eonelus ify of all the evidence’ (R. 273. 279). and 1

amotion liarrest of judgment CRO31 320), and was in eac,

Mstands overruled CR. AT, 208, 274, 280, 320).

\

o

these indictments were consolidated for trial (R.

47-49). Respondent “was convicted on ‘one, or.

more of the counts im four of ‘the indictments ,

tried (R. 316-317), and he was sentence ed to nine

months’ imprisonment on each count, the sen-

“te nees, to” rai concurrently (R. 333).

| The evidence in support of the allegations of

the counts On which respondent was convicted

may be stuninarized as follows ¢

in 1935 the Port of New York suds un- |

dertook to construet, as part: t-of the Lincoln Tunnel

pataject, ¢ certain installations at the New Jersey

approach, and. the United (States, through the-

Public Works Administration, granted ‘$4,780,000

to the Auithority to aid. in financing these works

(Bx. G5, R.o8y R: Contracts for portions

Ma: the: ores were, mee bs the Authority to George

e — & Son, Inc. (Ex, G. 6, R. 59% Ex.-

7. R. 60), and the, latter, in turn, sublet: to the

Cape ‘Ann Granite Company. inc. contracts for

furnishing and setting: granite rubble facing and

coping at the Weeh: ‘wken, New _ approach

te the tunnel (Exs. G. 8.-G..9, R. 63). Pursuant

te the requirements ot Ao Il. Section 206 of |

the National Andustrial. Recovery Act (Fruie | 1,

———

At the « Sous ofthe tri: al the Government consented tote

facissal as te respondent of all three count> of indictment

numbered: 10Cz and seventeen of the eounts of the regret ining

four indictments, (R. 276-27. 316- 317). Nine counts were

submitted to the jury. and respondent was convictedon ene! hy

Of these (R. 31s. 317, 932). . The defendant Ro-sr was ne-

etted on the coun, subm itted’ as to lum (RR. 316- 3I%).

19333, ¢. 90, 48 Stat. 195, 204-205, 40 U.S. C406)

“and regulations pl omulgated théreunder, both the

prime and subcontraets (the latter by reference

te the’ de contracts. (see Ex. G. 8, p. 4; Ex. G.

9, pp: .>)) eontained provisions fixing minimum

wage rates for employees, and requiring thsi

each employee be paid the ‘full ‘améunt acerued.te

him without deductions or rebates and that a

statement of. ‘all wage rates be posted: j at the

site of the work (Ex. ‘G. 6, pp. H-45; _Ex. i.

pp. 93-94). .

As foreman -for the Cape Ann Granite

¢ ‘ompany oni the Weehawken approach, respond~

ent had power to employ and dis¢harge emplovee-

_(R. 12, 2 34). The victims named ‘in thé counts

on which respondent was convieted a that

they were hired by him (R. 83, 121, 133, 141) and

that they: “kicked hack" to him” directly or

. through other workers’ on the job from 25 te 35

cents of their rages for each. hour of. their en)

ployment. (R. 84, 86, 87-88, 89, 90; 94, 104,

"126, 129, 134-139, 142; see also R. 148, Bt

The witnesses were compelled to make: these | pay:

ments.as a condition of their obtaining and eon-

tinuing their _employme nt (R. 8485; 87-88, 1M),

A54-155, 136). The Cape Ami Granite Company

did not | ees. these activities: = respondent .

and. knew nothing of therm. Ae. —7: 5s” see alse

"R. 242). -,. ie” §

‘Fhe court below reversed the convietions and

remanded the cause with directions ty quash the

> fs

> S: te 7

*

+?

indictments (R. 374) on the ground that the pro-

hibitions of the Kick-back Act apply only to the

employer and persons acting for or-on his behalf

and not to other persons not in privity of contract

with the emplover: (R370). “Cireuit Judge Biggs

‘

ee

dissented on this Issue of -statutory, construction

> “ :

(R. 374)... Eger Se Narr

SPECIFICATION OF ERRORS TO BE URGED

“The Cirettit_Court. ef Appeals erred: |

1 In holding that thé Kick-back Act: is not

applicable to a foreman having ‘authority to “em-

ploy and discharge employees, who, unknown to

the employer, by threats of dismissal, forces em-

plovees under his supervision to give up ty him

yaat of the wages to which they “are entitled under ”

— contracts of empleyment. :

In vemanding the cause with directions to

ea District Court to-quash the indictmie nts.

ee,

|* REASONS FOR GRANTING THE WRIT

s H ’, . { : ‘ :

The decision below is the first decision of va.

cireuit court of appeals construing thie’ Kick-back ~

The court below unanimously held (R: 373, 374) that the

“trial eourt gon: site d reversible errorin permitting the prose-

entor te argue to the jury that respondent should have pro-

lneed as withesse= the many employees of the c ape Ann

Arranite Company’ whom he was not: charged with haying,.

~ibjectOd to extortion, so that they mrigehit testify that hie had

hot exacted an¢thing’ from then (Rh. ISI. Ysa). “We co nor

here contend this holding of the court below as error: hence,

if this Court should grant the petition and Sustain Our posi-

tdi on the a <tion of ot atutony cons striction. the case should

eoreyianded d for a new trial.:

8 . |

Act. In limiting the prohibition of that Act soas

to exclude its application to foremén, the court

¥ low, ma divided opinton, has rendered a decision

* first importance in the enforcement of the

statute. “The decision, we believe, is net warranted

by the statutory language, history, or purpose:

1. The language of the Kick-back Act is broad

phrased. In terms it applies to “whoe ver” forces

employees om public. works ‘te give a

of the wages to which thev are entitled under their

contracts of employment, The court below: how

ever, emphasized the phrase ‘contract of employ

ment*” and- reasoned that since only the emplove

IST privity of contract with the employee, only the

emplover can mupair the employe go's contractual

right which the statute is designed te protect. Ws

submit that that plivase serves only te identify the

amount tof wages which may net be subtracted by

the forbidden means. and limits apphieqaion to ex.

tortion. connected with employment. | hh does et

exclude persons such. as foremen. To the eon

trary, the phrase “threat of procurme dismissi!

from such employment “in the st; atement of me aut

>wWhereby an emplovee-is me huced te give up part o!

his compensation, makillests GQ PUPPGse to cave

Persous other thar the employer, tor the latter m: 1 /

Ganeraly, distniss the emplevee. rather than ‘pre

cure” his dismissal, _ Certamby. if the statute ex-

tonds to one Whe nay procure the distnissal ofsar

ctrapleovee, it applies as well Te one whe, like re

sfondent, is" vested with author to hive a Heli

and is therefore in ; particularly advantageous

. . é e

Q

position ‘to exact tribute fron employees wider his

supervision. Ca ae | ‘

Y. The history of the statute evidences a purpose

te apply to practices of foremen on pubhe Works.

The statute resulted fromr hearings before a sub-

“committee of the Sena te Committee on Commerce

“pursuant teS, Res. 74 (Tod Cong., 2d Sess.) and be-

fore at subcommittee of the Senate Committee on

bikin ation ahd Labor pursuant to S. Res. 228° (73d

Cong. 2d Sess.) AY these sheariigs: there was

mich evidence concerning the practices of con-

‘tractors in forcing e@pleyees te return part of

their compensation, In addition, however, wit-

ohesses testified concernmg mistances of foremen’s

eXtorting money from employees for the privilege

opt working. Thus, one witness told of how a fore-

man forced employees te buy tickets at 5.00 each

tor tietitious shore dinners G¢Hlearings Betore a

Subcommittee of the Senate Committee ou Com:

ineree, supra, Vol. 1, Pt. 5. pp. T96-79L). Another

, testified that every week, followme pay daty. he and

his fellow employees were each compelled te kick

back to their foreman 50 cents for each houi they

. worke a ( Hearmes Be fore a Sube ommmittec of the

Se ante oak ommittee on, Eduedttiori and Labor. sapra,

Pts. 1 cane 2 opp. SHIS2). While the committee

meee Were very brief and did not advert directly

kiek-back practices on the at of foremen,

a

* See also. 7e/.. pp. Taz. 150. 333. 42s: Tlearines Before a

Subcommittee of the Senate © ohmitteeon Comiiieree SUDO,

Ee ee Cee ee

10

the Senate Committee on the Judiciarye which

reported the bill favorably, stated that ‘Hearings

of the Seriate Committee on Racketeering revealed

that large sums of money have been extracted

from the pockets of Ameriean labor, to enrich

contractors, subcontractors, and their officials” (S.

Rep. No. 803, 73d Cong; 2d Sess.; R. 359). In

view of the evidence before the investigating

committees that foremen were guilty of - such

abuses, it would seem that the Judiciary Com-

_-mittee’s-reference to “officials” included foremen,

as well as higher company executives.” A further

indication that Congress ‘intended the’ statute

to extend to foremen.is found in the brief dis-

cussion of the bill on the floor of- the House.

when Chairman Sumners . of the Judiciary

Committe stated, in response to a direct inquiry.

that it wis intended to apply to abuses which were

disclosed by the Senate committee of which Sena-

tor Walsh was the chairman (the subcommitec

of the Senate Committee on Education and Labor)

(78 Cong. Ree. WO759). ;

Moreover, contrary to the view of the majority

-of the court below that the construction for which .

. " \

* The report of the House Committee on the Judiciary re

ferred only to “the so-called’ *kick-back racket’ by which a

contractor on a Government project. pays his laborers wages

at the rate the Government requires dim to pay them, but

thereafter forces them to give back to him a part of the

‘wafes they have received” (H. Rep. No. ‘1750. 73d Cong.

2d Sess. sR: BHO).

03, 73d Cong,.2d Sess. ——

il .

the Government contends should not be accepted

because it would project the statute into fields’.

already covered by state criminal laws, the hear-

ings before the Senate committees show that they

recognized that the. proposed legislation would

partially overlap state law.’ In view of this and

the broad language of the statute, the implication.

is clear that: Congress intended to extend federal

protection to workers theretofore. protected only

“by state law in order to insure the effectuation of

federal peliev in respect of wages on publie

works. : ,

3. The question involved, though novel, Is one

of large public importance for, as the majority

opinion points out (R. 370-371), the statute applies

alike to all public werks for which the United:

States directly contracts and to federally aided

works undertaken by. other public bodies. The

decision below relieves from the prohibitions of

the statute a large class of persons who, by reasou

of their position of: authority, are able to -force

employees to “kick back’? to them for their own

enrichment a portion of the earnings to°which- the

employees are entitled” To this extent the de-—

* See Hearings Before a Subconimittee of the Senate Com-

. hiittee on Commerce, supra, at pp. 817-818; Hearings Be-

fore a’Subcommittee of the Senate Committee on Education

and Labor, supra, at pp, 25-24. 416-417, |

"See Bacon. Davis Act. as amended, 46 Stat. 1494, 49 Stat.

1101, S4-Stat. 399. 4 UL S.C. 27Gag See also S. Rep. No.

—_

a

cision frustrates the Congressional purpose to

seenre to employees on public works the full

benefits of their: labor. .

CONCLUSION

For thé reasons stated, it is respectfully sub-

mitted that*this petition for a writ of certiorari

. should be granted. | ~ ;

*} he 24 CuHarLes Fany,

Solicitor General.

May 1943. -

UB we eE RN GEN! PRN Mel rr ce 1944