Brief of Respondent — United States v. Laudani

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. SF NOPLEY

CLERK.

Supreme Court of the United States

OCTOBER TERM, 1943 *

No. 71

; ee Bek

THe Uniren States oF AMERICA,

Petitioner,

Pe Vv.

Frank LAuDANL ° rae? Fae

ON WRIT OF CERTIORARI TO THE UNITED STATES

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&- RESPONDENT’S BRIEF

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HaroLp Simanpi,

Attorney for Frank Landani, Respondent.

“CIRCUIT COURT OF APPEALS FOR THE THIRD CIRCUIT

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Opinidns. Below 2s eeeencncnenenenenmnneleneeeennannctemmmnannnerenesiiien ]

NEES LALA LE ADEA RAMEE 1

aay TAO i ccccseaidecenitemnahpenipneaetinianrnowiamieninlhammnrenceinoneen o

“Question Presented .cceccmennrnnninnennne plneunuadeien 2

SEES FE ELLA OE A 5: RETO

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CONCLUSION

- ARGUMENT:

The. C onstruction of the "hie k- Back”

Majority Below Is Supported By the I

ths Statute, the |

o*

Act By the

anguage of

egisvative Antent and History.

“The Language of the Statute Caos

The Legislative’ Intent and History............0j |

The Construction Urged _ by the

cation Would Reduce *the Statute to

(Giovernment

_ Should Be. Rejected Because Ats Limitless” Appli-_

An Absurd-

ity; Such a Statute Would Be Unconstitutional

and Would Be So Vague and U neertain As To Be

Unenforceable

Redractio ad Ab srr ameccrrescceccecccceevccenesrneriennnnecensnncensnneee ‘

Unconstitutionality

Vagueness and Uncertainty

aadecccsocsatconebsedocotersbensscosssssesesonesisessn seem ere emeII OOO reo APTS

CASES CITED — *

The Abb Dodge, 233 Uy 8. 166..ccnenmnnnndpennmne ie 12

No. A. Schechter Poultry Corp. v. United States,

29 U.S. 490 : ee ee

Arnold v. United States, E15.F. (2d) 025... ; OER | i

-Auatin-v. State, 53 N. W482

bbattwell v. Mitchell, 3 F: (2d) 428... = Saas 12

Bowen v. Johnston, 3806 0. Ss. 19. ~ aan ae Care insinib —

Bray v. United States, 289 ed. 329.02... or SO DRE EICS ite ee

Champlin Rtg. Co..v. Commtission, 286 U.S. 210. ma

Church of the Holy Triitty. vy. United States, BU.

4 TP a Saciaseupanainnil senceecessncnescesessnencpescecscescscesesesseeseiesssessesecsebecssouses wosenvanvermageensenscannesauecnns . hl

Cline v F rink Dairy Co., 274 U.S. 445.00... ae ie

Cohens v. State of Virgiitia’, OW haat | SA eT,

= Collins v.. Kentucky, 234 CU, 8 SCSI ——e at

Commally'y. General Construction Co., 269 U.S. 885. oy

ES Parte C harley Webb, 225 0.8. O63. sonnet ben tL

R Gregy ve United Stats sx, 116 FB. (2a). 609 cua been ee

. Herndon Vv. Lowry, 80% "f Sa HP PRIA TEE

+ International Harvest Co. v. Kentucky, 234 U.S. 216.0 28

Lanzetta v. New Jersey, 806 TLS. $01 cares viinnnlinnde wt

Linder v. Unitéd States, 268 U.S. Cae ems |

y Nation: il Lathor Aelations Board v. Jones and Laughlin,

)

Senall ( Cov. ee Rie. Co. 267 U.S. 2385. aD

* 7 :

‘hhteh vw, Cahoon, 208 87. BS BRE tates | OU

iil

Stromberg v. California, 285 ELS. 359. ea ae

Tavlor v. United States, 207 U.S. 120. 12

Texas Vv. Eastern Texas R. Co.,.258 U.S. 204.0 2

Lirited States v. American-Trucking Co. 310 U.S. 584. 12

Uuited States v. Baltimore Post Co., 2 F. (2d) T6boww. «22

(nited States v. Bevans, 3: Wheat. ec. a

United States v. Bowman, 260.0. Stes ee madd

United States v. Butler, OTL, S. Staves co Sree ae a

inited States ve Chartick, 26, I, Supp. 203... fae S

United States v¥. ¢ ‘ohen Grocery Co. ,, Cc i a ae

~ United States v. € onstantine; 296; Ss. > tO aR

United States v. Ditorio, S By (2d) Lao. pee ON + oe

United States \ ; . Doremus, 24) Cs. a reese eeeaieediians : =

United States v. Fox, 95 CLS. G70... rien nit Mans a

United States v. Golder etal, LLB, ome: wea er 18

United States v. Jim Huey Moy, 241 U.S. 300... re 12

' Vnited States’ v. Katz, 2714. 8. 854.. — oe eee

‘United: States v. Kirby, 74 U. S. 482 aalaeh crm Rec karti tear -

United States v. Laws, OO Te a sichns in. 22

United States v. McGowan, 3 PES >: ee ste A

United States v. Noveek, 2H) U.S. 202.00... LSE

United States ve Palmer, ¢ Wheat, 610... gon is.

United States v. ‘Resnick, ae 6 ee _ Ww

United States v. Walter, 265 \. ; ey } aoa Soper be ee >

Weeds ve United States, 244 0. 109 Be ee a ae. ae

iv

STATUTES CITED

sudicial Code:

SOCHHON PHO GA) penne nee enntnmenennnmeenny cares waa

2° E. &: UC. Nee. 431. coe meee ee Pre Pak Baer

40 USAC. See, 206 niente Mme .

STB te wie)...

BT. 6 Oe Dee... eek cca eae

40 US. Copar. 40L 0. unin ORAL eT

United States Constitution : |

Acticle 1\. Hection 3, Clhauee 2. va

PAGE

IN THE

Supreme Court nf the United States

i OCTOBER. TERM, 1943

No. 71

‘The Unxiren States or AMERICA, *

; Petitioner,

Sm a "i

Frank LAvoant.

ON WRIT OF CERTIORARL TQ THE UNITED STATES

CIRCUIT COURT OF APPEALS FOR THE THIRD CIRCUTT

- RESPONDENT'S BRIEF

» Opinions Beiow

The majority (R. 241-248). and dissenting (R. 248-249)

opinions in the Cireuit Court of Appeals are reported in-

Int FL (2d) 847. The memorandum opinion of the District

Court overruling Respondent’s demurrer and motion to

quash the indictment appears at R. 25-29. |, .

a urisdiction 5

The judgment “ot the Cireuit Court of Appeals was

entered March 16, 1943 (UR. 250), and a petition for re-

ge.

p. 13: footnote 9, p. 44). This Court must therefore deter

mine whether the remand: to the, District Court should be

9

hearing was denied April 20, 1945 (R. 291-252 ). The

petition for a writ of certiorari was filed May 24, 1943,

and granted October 11, 1948 (IR. 252). The jurisdiction

of this Court is conferred by Section 240(a) of the Judicial

Code as amended by the Act of February 15,-192.

Statute Involved

The Act of June 13,1 1934 (ce, 482, 48 Stat. 948, 40) UC.

°76b), commonly ealled the “wWiek-Back” Act, prov ee. .

1, That whoever shall induce any* person employed in

the construction, prosecution, or completion of any public

building, public work, or building.or work financed in w seed

- or in part by loans or ‘grants from the United States,

in the repair thereof to give up any part of the coimpen-

sation to which he-is entitled. under his contract of employ-

iment, by force, intimidation, t threat of procuring distnissal

from such employment, or by any other manner whatso-

ever, shall be fined not imore than $9.060, or imprisoned —

not more than five vears, or both. :

‘To aid in the enforcement of the above section, the

Seeretary of the Treasury and the Secretary of the -Interier

jointly shall make reasonable reguiations for contractors

or subcontractors on-any sueh building or work, including

a provision that-each contractor and sube ontractor shall’

furnish weekly a sworn aftidavit wit’ respect to the wage:

paid-each employee during the preceeding week.

Question Presented

tt ix conceded by -the Government that the judgment oc!

the Cireuit-Court of Appedls in reversing tlie District Cour

should be affirmed (Government's. Brief, p. Sz footnote ©.

.

©

for the purpose of quashing the indictinents or for a new

trial. - This involves the consideration of whether the pro--

hibition of the “Kick-Back” Act applies to Laudani, -who

was charged with. acting solely in his own interest and not

in behalf of the contractor or subcontractor. He was not

a party to the ‘contract of employment of his alleged

victims: No kiek-back to or enrichinent of the employer

vo , .

resulted.

Statement

:

Respondent and one Rossi, together with several. others,

_ were charged in a series ‘of indictments with Violations of

the “Kick-Back” Act of June 13, 1934 CR. 14-18, 241-242).

Except for differences in names of the defendants *and_ in

allegations as to the names of victims, dates of the viols-

tions, and sums of money exacted, the. counts of the indict-

Amin were couched in identical language (R. 14, 25-20).

They alleged that hetween Jantary 1, 1937, and May 15,

| 1938. there was—-under construction_at— Weehawken, New

“Jersey, a certain publie work known as the Weehawken

Plaza connection of the Lmeoln Tunnel under the Hudson:

River from New York to New Jersey; that the work? was

being done under a contract between the Port of New York

Authority and George M, Brewster.& Son, Ine., the’ general

contractor, and a-subcontract between the Brewster Cosi-

pany and the Cape>Ann Granite Company, line, for the

furnishing and setting of granite rubble facing and coping °

necessary in the construction of the Weehawken Ptazg con-

nection: that all of this public work was being financed in

part by grants. from the United States: that Responde nt

Was foreman for the: Cape. Ann Gramte Company, with

autherity to.employ and discharge stonecutters and masons,

and knew that the rate of pay for such employees, as fixed

r att posted on the work, Was a certain amount per hour,

amd that these emplovees were entitlode to receive the fuil

posted rate of pay without deductions for anys purpose:

2

- : , 4

and that Respondent and his co-defendants, by intimidatr:n

and threats of dismissal and by giving to understand: thia'

all persons employed on the work would be required to give

the defendants part of their true wages so long as they

were so employed, induced certain named employees to.

surrender_to-them parts of the compensation to, which the

emploveeSwere eatees for work and labor on the public

work (R. AR-15, 26). : ees

The defendants tiled a demurrer (R.°19-22) and motion

to quash (R. 22-25) the indictments oe the ground, inte:

alia, that it was not alleged that they were the employers

of the victims, or that they were acting on behalf of the

emplever ih sre Fie the victims to give up part of the

compensation to Ww ‘hich they were entitled CR. 19) 20,

The demurrer and motion to’ quash were overruled by ie

Jude heating them, Ina written opinion (R. 25-29). ee

objection was renewed at the opening-of the ‘trial (R.:

33), at ‘he close of the Government's case (R. 135), wal

at ‘the conclusion of all the evidence (R. 179), and ‘in

motion in arrest of judgment. (R.-210),— and “Was in each

rently (R. 211).

_instance overruled. :

The Government: elected to proceed 0 on five of the indict

ments and, after a severance as to the deféndants other

than’ Respondent and Rossi, these indictments were coi

solidated for trial (R. 14, 33). At the close of the trial the

Government consented ‘to the dismissal as to cue eet

— of all three counts of indictine nt numbered LOC, and se

enteen . . the counts of ‘the remaining four indictment

(R.-181,-182,-208),——. ide =

Nine pink were submitted to’ tlie jury, and Responde nt

-was corivicted on each of these (R. DOS). The defendan'

Rossi was acquitted on the counts’ submitted as to” hin

(R. 208)... Responde nt was sentenced to. nine months" Ti

prisonment on each count, the sentences to run eonen

*%

The evidence in support of the allegations of the count:

‘on whieh Respondent was convicted may be stunmarized

as follows:

)

In 1926 the Port of New York Authority undertook to

construct, as part of thie Lincoln Tunnel projeet, certain

installations at the New Jersey appreach, and the United

States, through the Publie Works Administration, granted

$4.7 S000 to the Authority toate mn financing these works

(Ex. G-5, RL 39). Most of the cost of the enterprise was

financed by the Authority. Contracts for portions of thie.

et “works. Were let hy. the. aa to George _M. Brewster :

~ A Son, Ine, (Ex. G a R. 40; bx. G-7, Ro 40), and the latter,

ih turn, <ublet to ‘the’ Cape Ann Granite Company, Ine.,

contractors for furnishing and setting granite rubble Faciny

and ¢oping at the Weehawken, New Jersey, approach to

the tunnel (Fexs: G-S, G-9: BR. 4h, 42). It as doubtful that

any ofthe funds of the Public Works Adininistration were

- actually disbursed to the Cape Ann Granite Company, Ine.

- (R. 53, 54). |

! e . ° : .

Laudani is married and has a famih. He was, well

2 a ”™ .

regarded in the community where he Tived (Ro DSS). He

/ was not an officer director or stockholder of the Cape Ann

Granite Company CR. 153). He was emploved a= it fore.

manat #60a week (Ro 194) and was given authority to hire

and discharge emplovees for and in behalf of that company

(R. 48). However, the officers sof the Cape Ann Granite

Conipany, together with its estimator, were naggiesd at the

siteof the work, representing the company CR. 16). The

work commenced early in 1957 and ended May, 1938. "Phe

Cape Ann Granite Company were obliged te obtain union

stone masons through three labor union locals CR. bo4).

ach localhad- business aventat the job to see to ‘it that

o.

there was no infraction ‘of union rules (Ro 155). -One of -

‘them was. Louis Mazvola, who Was ‘business agent of the

ci to whieh Laudani belonged (R. 155). Although the

Cape Ann Granite Company emploved 100 workmen, there

Was no complaint by anvone until wine months after the:

work liad been completed (R. 147, 160). During those nine

tonths Laudani had énzaged in three heated election Con

tests with Mazzola for offices in the loeal CR. 160-164). The

6

contests created bitterness between Mazzola, his followers

and: Laudani (R. 160, 161), and Mazzola swore revenge

(R. 162). |

The Government’s investigation commenced shortly after

the last contest (R. 119-135). Tt was instigated and directed

by Mazzola (Rt. 147). The Government's witnesses were

adherents ef Mazzola (R..161-164). Only a few of the 100

workmen emptoyed “by the Capé Ann tiranite-Company——

made @¢harges. Only one of them (‘Tomasello)-said Laudani

asked him to rebate 25 cents an hour (R: 88).- The others

said they conversed with Rossi or a fellow workman (notin

the presence of Lavudani), and thereatfer paid to Rossi or

the fellow-workman from 25 to oo cents of their wages fer

each Hour of their employment (R: 56, 81, 99, 99, 107). In

‘a few instances they left the money at the toeeoann” s shants

with Laudani (R. 60, 62, 63. 82, 943. Laudani vigorously

denied the charges (R. 159). He claimed. the sanall sums

which the workinen: paid him were repayments of loans

which he had made (R. 158, 168). Rossi also de nied “the

~charges and corroborated him TR 8-307. ‘Phere wire

no evidence of the use of force or threats. ‘The Governmen

established that the Cape Ann Granite Company and-i!

officers knew nothing of these alleged activities .nd ail

not authorize them (R.'49).

¢

ARGU MENT

The ‘Construction of the “Kiek-Back” Act By the

Majority Below Is Supported By the Language of the

Statute, the Legislative Intent and History

_ The Language of the. Statute

‘The language of the “Kick-Back”™ Aet une quivocally: de

lineatos the situation it séeks to remedy and punish. It i

the inducement of an employee of a certain type “te ee

up any part of the compe sation ‘to which he is entitted

tnder his contract of employinent™. The Gove rhiment

‘

_cedes (Government's Brief, pp. 2. 68) that the “contract

> of employinent” is the contract hetween the euployer and

the employee, and, of course, no. other contract is or could

‘be contemplated.“ This is the holding of United States v.

Golder et al., 11 F. Supp. 870, 871 (D. C., BE. D. Pa.), as

well ‘as the majority and dissenting: opinions of the Court

below. It. follows, therefore, that in the construction: of

“this Act we must ascertain and: describe the conduct that

‘could invade or disturb this ‘contract: In‘other words, we

must circumseribe the statute so that the conduct denounced

-and the persons capable of violations are in clear relation-

ship to. the impairment, violation or derogation of the

enuployee’s contractual right to obtain the wages’ he is

entitled to receive. * | ae

Only the employer is the other party to the “contract

- of employment” and only the employer provides the “com-

pensation to which he is entitled under ‘his contract of

employment”. Only, the emplover, therefore, or one acting

for or on his’ behalf, is so situated, legally or otherwise,

that he ean come within the tietd-of-operation=-deserthedE

of anticipated by the “Kiek-Back” Aet. The thajority’

helow (R. 243) aptly held: .

From a reading of the statute it seems plain that

the evil aimed at is the inducing of, an employee,

‘engaged in work of the character specified, ‘to give up

any part of the compensation to which he is entitled

under his contract of employment.” The ‘contract of

employment’ referred -to of course means the contract

between the employee and his employer. “United States

v. Golder et al. 11 F. Supp. 870; 87! (D.C... D. Pa...

Essential, therefore, to the: crime as defined by the

statute is the impairment, violation or derogation of

the emplovee’s contractual right with respect to the

waves he is to receive. ‘As the person capable of so

offending, hecause of the requisite privity 6f contract,

is the employer, the statute as written necessarily has

application to a situation where the employee gives up

_/ or eedes a portion of: hits gontractual wage to or in

‘favor of or at the instance of the emplover or one

-neting for or on behalf of the emplover.”

: RO he ee 38

‘This construction finds. support also in the use of the

phrase. “give up”. Relating, as it-does, to “compensation”

and to the “contract of employment”, these words “give .

up” must refer to the wages earned under » the contract

_and must refer, further, to a giving up to the other party

to the contract, namely, the employer. This ix’ What Is

Jegally and factually contemplated in a “kick-back”. | Ac

cordingly, it has been held that “give up” in this ‘stattite

-“aheans “pay back”, “return”. United States v. Charlich,-

26 F. Supp. 208 (D. C., E. D. Pa.).. In this case, Judge

Kirkpatrick stated, on page 2057.) | 1 Beer

“The offense at which it is aimed: is; compelling

workmen to return to. their eniployers wages to which

the contract between the employer and his employers

entitles them.” aa

4

sf the workman receives the whole amount of wages

which the employer agreed to pay him when he went‘to~—~

work, and is not compelled te give back or to’ walve-

cany part of it, the act has not been violated.”

The same conelusion was reached by the ‘Comptroller

General.in a decision (A. Q983). rendered to. the Secretary

_of the’ Treasury on December 14, 19389 (19 Comp. Gen-

ATG: 577, DTS). The statute therefore contemplates that

‘the éarnings have actually passed. into the possession of

the workman and before there can be any violation it wus!

appear that the workman has paid back or kicked back .

some portion of his earnings to the employer or’ to one.

‘acting for or on behalf of the employer. According to the

title, the statute sought “to effectuate the purpose of cer-

iain statutes concerning rates of: pay for labor, by making

it unlawful to prevent anyone from receiving the compen

sation contracted for thereunder, and for other purposes

if the workman receives from his employer the full amoui'

of the compensation contracted for, without any requir

te | Q- ow

: : . : ae | - :

ment to give back any part of such compensation, how can

it be said that he has been induced to vive up that to whieh,

he is entitled under his contract’ of employment! The

majority opinion below, in recognizing this, states:

“So long, therefore, as the employer pays his em-

ployees the wages to which they areentitled under their

contracts of employment and the employees are not

jnduced_or required to give: back any part of: their

- compensation, it cannot be said that they have heen”

prevented from receiving the. compensation tO which

their contracts of employment entitle them. ,Whrat

happens to ‘the compensation after the employee: has

received it.in full, and wholly without relation to or

effect upon his contract of employment, is a matter

with which this statute does not purport to deal.”

‘Certainly no doubt that this is the proper construction of

the statute can remain after examining Seetion 2 of this |

"statute. Congress provided that “to aid in the enforcement

‘of the above section”, reasonable regulation should be made

fer “contractors or subcontractors”, and that -each “con-

affidavit with respect to the wages paid each employee dur-

ing the preceding week”, . It ix noteworthy that Section 2 of

‘this statute, which ix to assist in the enforcement of Section -

bis coextensivesand consistent with the construction of

Section L-sét forth herein. Section 2 would fall far short of

niding the enforcement of the statute as interpreted by

the Government. | *e

“In construing this statute in accordance with the lan-

cuage and phraseology used it is important to bear in nnd

that this is a penal act evhich must be strictly construed

in favor o1, the accused. Statutes which are penal in nature

should not’ be ‘interpreted -to include situations or acts

outside of the clear and explicit language of the statute.

“Statutes creating crimes are to be strictly construed

in favor of the accused they may not be held to extend

to eases not covered Fy the words used, United States

vy. Wiltherger, 5 Wheat. 76, 95, 5 1. Hd. 97, 42: Fasulo

t

tractor and subcontractor st at turnish weekly—a sworn

10

v. United States s, 272 U.S. 620, 628, 71 L: Ed. 443, 445..°

478. Ct. 200. * * * Before one may be punished, it

must:appear that his case is plainly within the statute;

_ there are no constructive offenses. United States v.

Lacher, 1384 U. S. 624, 628, 33 L. Ed. 1080, 1083, 10

S. Ct. 625; United States v. Chase, 135-U, S. 255, 261,

o4 L. Ed. 117, 119,10 S. Ct. 756; Fasulo v. United

_States, supra (272 [ 7, mm 629, 71 L. Ed. ‘445, 47 S_ Ct =

‘ea

200)."” United States vy. Resnick, 299 U: S. 208-210. .

‘ * . bd ° 7 : ° 3 “Ss :

“Statutes will not be read to create crimes, of nea

degrees or classes of crime, unless the ar a so to

do is plain.” United States. v. Noveck»? IU. S 202,

DO4. ree (

“*Laws whick create crime oaght to be so explicit

that all en subject to their penalties may know whiat

acts it is their duty to avoid,’ (United States v. Brewer,

139 U. 8S. 278, < 288) and that ambiguity and uncertainty

nbout the méaning of a criminal statute ought to he

resolved by a strict interpretation in favor of ,the.lib-

erty of the citizen.” Ex Parte Charley Webi, 225 U.S

665, 689. (Emphasis supplied.) .

The ‘Government in its brief (ppewl4, 15, 20/21, 22, ody

24, 25, 26) seeks to make much of the use of the word

“whoever” and cites various, ‘statutes wherein that word.

or similar words have been construed generally. No doulit

there are various statutes in which Congress intended.

“whoever” to be without limitation, and the courts have

determined such intention by interpreting the legislative

history of the st atute ‘and by construing the context of the

‘language. However, it is equally true that many,-statute>

using the word “whoever” or words of similar import have

been construed to be limited in their application by tlie

same process of Raterpeegeeaen. and construction.

In United States v. Katz, O71 U.S. 354, 362, this Court

said:

subject to a criminal statute may and should be limited

Where the literal application of the statute would lead

“Ge neral terms descriptive of a class of persons nade:

1}

.

ee?

|. to extreme or absurd results, and where the legislative

purpose gathered from the whole Ac t would be satisfied

by_a more limited interpretation.’

“In that case, the defendant was indicted for a conspiracy

>it? violate a law of the United States which provided, “No

* person shall * * * sell-any liquor Without mnaking at the

time, a permanent record thereof * * *". This Court

held that the statute did not apply to.one wiio unlawfully

sold, liquor and kept no record. : |

An the case of Church of tke » Holy Trinity v. United

States, 143 U.S. 458, the eh lr made a contract with a

minister (an alien’residing in. England) to come to the

City of New York and enter into its ‘service as a rector

and pastor.” In pursuance of such contract, the minister

removed to the United States and entered upon =e service

The act which the chureh was charged with violating was

as follows: ‘

-

“*.* © it shall be unlawful for any person, company,

= partnership, or corporation, | in an¥ manner whatsoever,

to prepay the transportation, or in anv way asgist or

encourage the importation or migration of any alien

into the United States, under contract, or*agreement

made previons to the importation of such alien * * *

to perform Jabor or service -of any kind in the U nited

States.” ;

This Court quoted (p. 460):

~+***)'Phe language of the act, tf construed literally,

evidently eads to-an absurd result. Hf a literal con-

struction of the words of a statute be absurd, the act

“must be so construed as to avoid the absurdity. The

court Inust restrain the words. The object designed to

be reached by the act must limit and control the literal

import of the te rins and phrases employed." -

Jn the recent case of. Arnold ¥ “United - States (C. C. A.

8), 115 F. (2d) 523, the "’ court construed the following ¢ rimi-

nal statute: %&

>

“whoever shall knowingly ship or cause to. be shipped

from one Ntate * * * into ant-ether State 7 * *-any

<6

\ Poe eo. 2?

package of « yaelehise containing: spirituotis ond act

Jiquors 7 ° unless such package he ‘so labeled on

the outsidé cover as to nlaciints show the name of the.

consignee * * * shall be fined, ete. * * °° :

The © ourt held that the’ ‘statute “ial not. include: priv ate

carriess, but that it applied solely to common car riers.* It

_-is plain that ‘the literal terms of the statute were broad.

. enough tos include any person w ho shipped. But the Court

Was mindful of the fact that it was considering a highly

penal statute, aud in construing it kept in mind throughout

what it conceived was the ‘true imtention of vee

Compare : United States y. dum fg y Moy, 241 ¥.

sabe 0 Taylor v. U ago facg eta 207 Ve. 10: United ath .

. Laws, 168 0. S. 2 : United Seep yo Wirby, T4 U. S:

439, 486; Raltzetl Vv. etic toeg 3 °F. (2d) 428. 430; United

Statecv. Ditorio, SF. (2d)-279, 280; United States vy. Balte-

“more Post, Cw oe 42d) 761, 763; Gregg v. United States.

116 F. (2d) GOO; Austin v State 53 N: B. 481; United States .

“v. Palmer, 7 W heat. 610, 631; United, States v. Walter, 263

“ULS.172 The Abb Dodae, 233 VU, S; 166, 172: Texas v. Fast:

ern-Teras R. Co., 258 U.S. 204, 217; National Labor Rela-

-tions Board v. Jane s and Laughlin, 301 U.S. 1. 29: United

States v. American Trucking Co., 310-0. S.9 a4.

The, above deci isions clearly show tRat the meaning o!

; the word “whoever” depends upon a sensihle construc tion

of the statute and the legislative intent. The Gov ernment,

hy isolating the word “whoever” from the statute and seek,

ing its meaning, so isolated, merely hees the question to |

he decided:

The. ss ‘rmnment in its brief f also discusses at length (pps

16, 29. 80. 31) the Davis-Bacon Aet of Mareh 3, “VOSL Ce.

“411, 46 < it. 1494: 40.7 S.C. See, 276a ef seq.) and Title

Tl af the } Wational Industria) pgs Act. of “June 16.

1933 (ce. 2, 48 Stat. 195; 40 U.S.C, par. 401 et seq).

The Government asses that Contin had these two

Acts in inind when. it peeses the “Kiek-Back” Act. Even

though this assum Iption he accepted, we fail te soe how

. ele

4

“s

sor the agweney disbursing sueh funds.

aids the construction for which the Goverttinc yt contends.

On thea contrary, an examiation of the s-Bacon Act

and the provisions of the N. LR. A. referred to shows a

careful and studied effort h¥ Congress to contrel the pav-

iment ef weges by contractors cud-subcontractors, Almost

every section of these statutes is limited. to “contractors

and subcontractors”. See ig: 04 of Title [1], Jume 16, 1955,

©, 90248 Stat. 208 (40 0. See. 404 (¢)), not referred

to in the Government’ s wey aitilen, in part:

“all contracts involving the expenditure of such mregte

shall contain provisions establishing minimum rates

of wages,.to be determined by the State Highway De-

partment, which contractors ‘shall pay: to ski led and

unskilled labor * °°."

No one can dény that Congress, in.lending money for ,

construction projects, may exact certain agreements and.

‘apply certain conditions binding upon those te whom

Government money is given. This is the rationale of the

labor and wage provisions above referred to. The con-

clusion is irresistible that: the “Kick-Back” Act intended

to punish criminally those contractors and subcontractors

who violated the conditions and agreements which were

part and parcel of the federal funds given to them. Ons

contractors and subcontractors are sufficic ‘ntly priv y to th

timitations on. the use of federal funds to be ma position

to defraud or deceive the Treasury of the United States,

The Legislative Intent and History

An examination ito the histors at the statute discloses

heyond doubt, that Congress never intended that it should

apply to a situation so wholly local in nature, as is pre-

sented by this record. The statute resulted from hearings

hefore’a sib-committee of the Senate Committee on-Com--

4

merce, pursuant to S. Res. 74 and 196 (7rd Cong.) and it

was drafted and recommended by that body.'

The Senate Conmnittee on Edueation and Labor pursu-

ant-to S. Reg, 228 (73rd Cong. 2nd Ness.) merely , held

preliminary ‘hearings on May 4 and 7, 1954, te determine

whether conditions were such as to warrant an Mvestiga-

tion “of the relationship existing between certain contrac-

tors and their employees in the United States.” *

~The legislation in question. had passed the Senate and

was pending in the House at the time the preliminary hea:

ings were held.® oo

At the preliminary hearings, many representatives of |

organized labor appeared and gave testimony. What they >

said may be briefly summarized as follows: Dishonest con-

tractors and subcontractors who had’ been awarded con

tracts to perform Federal public construction work (in the

District of Columbia), Were not paying the prev ailing rate

of wages to their employees, as required by their contracts.

Contractors had gong, to other parts of the country where.

the wave scale was lower and had induced cheap labor,

hoth union ‘and non-union, to come to the District. These

warknen were offering their services at rates far below

the prev ailing wage scale in the District. Dishonest con-

tractors were taking unfair advantage of the situation by 2°

employing these workmen at low rates and using all sorts

of subterfuges to cloak their illegal operations. ‘Those

complaining. sought a curb -of such ‘activities.!

‘After the preliminary hearings were completed, the suh-

cofumittee Was authorized te proceed and it did not com

menee to hold its hearings until June 21, 1954, whieh wae

after the “kick-hack” statute was enacted.®

rs, Report No. 1189 (¢ 73th ¥ éng. Ist Raga: pp. 4, 20. ;

2 Hearings before sub-committee of the S. ¢ onunittee on deduce:

th mn and Labor, Part I. PP. i. &.

Sid. p. J.

tld. pp. 5 to tol

id. pp. 1.2

1

The record of proceedings before that sub-committee do

ee te a purpose by © ongress to exte nd the statute in

the manner contended for by the Government.

The report of the sub-committee: ofthe Committee on

~ Commerce pursuant to S. Res. No. 74 and 196 (Tord Cong. )

discloses that this statute was first discussed’ on December

M1, 1985; after George J. Atwell, president of the George

J. Atwell Foundation Corp. had complained ‘te the com,

miittecand had appeared and testified before it.

The committee was obviously impressed by his ‘testi-

mony, and the views he expressed and the suggestions which

he offered, are reflected in the text of the statute.‘

It was his view that the “kiek-back” was the fault of tlie

contractor who bid so low for Federal work that he could

not do it at the price without receiving ¢ “kiek-back” from

the workmen. a ae

That practice put the honest contractor to ‘a serious dis-

ndvantage. Tt was Mr. Atwetl’s suggestion that the Gov

-ermment rid itself of such dishonest contractors by com

pelfing them to pay. the prevailing rate of wages and stop

them from obtaining a “kiek-back” from the workmen."

He suggested that every payroll should be certified and

sworn. te by the contractors. !"

That suggestion is clearly embodied jn the statute!

Most of the testimony before the committee related: to

incidents basically similar to those charged in the imdiet-

ment under consideration. |

"Ss: Report No. TI89 (73th Cong., Ist Sess.) p. 4—hearings before

sub-committee of the 8 Committee on Commerce (73rd Cong. 21d

Sess.) Vol. I part 5. p. 789.

7S. Report No. 1189 (75th Cong.. Ist Sess: )p. 20). ;

S Hearings before sub-committee or the S. Conmuttec on ® om

merce (73rd Cong., 2nd Sess.) Vol 1. Part 5. p. 792 ,

* ld. pp. 793, 790.

1 Td.p. 793.

18S. Report No. PISO (73th. Cong. Ist Sess.) pp. 20, 46. See

Sec. 2 of the Act, 40 US. C. 270€,

! Report No. 1189 (75th Cong. Ist Sess. oop. 20 Hearings he tore

sub canes af the Ss. (Lominaittce on Commeree (73rd Cong... 2nd,

Sess». Vol 1. Part 3. pp (790-826 : Z

Ix ResponpDENT’S Brier—-UnitED States OF AMERICA V.

Frank Laupant—No. 71 .

Addendum Page 16, Line 7

The-report of Mr. Sumners of the Committee on Judiciary

in the House cortains the following : ae .

“This bill is aimed at the suppression of the so-called

“*kiek-back racket’ by which a eontractor on a Govern-

ment project pays his laborers wages at the rate the

(Jovernment requires him to pay, but thereafter forces

_ them to give back to him a part of the-wages they have

received” (R. 236). . aoe

43 The Committee reported (p 20): :

“After a thorough study of the testimony given and the com-

plaints made, the committce concluded that the majority of th

cases presented were of a local nature and were not within the

jurisdiction Ff the Federal Government. But it was decided that

the committee could effectuate the purpose of certain Fedtrat

statutes concerning rates ‘ole wages to be paid on work done.

under Government contracts. To this ‘end a bill (S. 3041) was.

_ introduced during the Seventy-third Congress entitled "A bill t»

-etfpctuate the purpose of certain statutes concerning rates of

‘pay for labor, by making it unlawful to prevent anyone from

. receiving the compensation. ‘contracted ‘for thereunder, and for

other purposes.’ This bill passed both Houses. and became

Public Act No. 324. In accordance with the power conferred

by this act, the Secretary of the Treasury and the Secretary ot

the Interior jointly promulgated a series of regulations, effective

January 15, 1935, which were to. be incorporated im every Fed- ,

eral Government contract. ‘| his regulation reqtired the tities

of an affidavit sworn to by the person, in charge of the pay rolls.

“attesting the pay roll and that no rebates Or deductions wer

made; dirett! or indirectly.” CTraltes supplied.

14S. Report No. P89 (75th Cong... Ist Sess. pots.

a

vi ,

scionably enrich themselves at the expense of their em-

plovees in denial of their contracts.‘of employment”

(R. 244).

And in holding: *

“But nowhere in the Act, its title, or its legislative

history is it suggested that it was intended thereby to

reach an extortioner or blackmailer (not privy io the.

contract of employment) merely because the persons

upon whom such an offender preys receive their cou-

pensation as employees of -a contractor doing public

work financed in whole or in. part by federal aid” (R.

O45). i uae

.

-

: . .

. ‘

The Construction Urged by the Government Should

Be Rejected Because Its Limitless Application Would _

_Reduce the Statute to An Absurdity; Such a Statute

Would Be Unconstitutional and Would Be So Vague

and Uricertain As To Be Unenforceable

We helieve that the apparent absurdity and ineflicacy

_of a construction of the “Kick-Back” Act as urged by the

Government furnishes one of the most cogent and sound |

arguinents for the construction urged by this Respondent.

A breakdown of the Gavernment’s analysis; of the statute

shows the following: “whoever”. is urged by the. Govern-

ment? to mean “any person” without limitation (Cover

ment’s Brief, pp. 14. 20). The “contract of employment”

‘is held to have no esoterje meaning and is used merely to

identify the money (Govermnent’s Brief, p. 35). “(live up”

does not mean “kiek-hack’ or a return of the money (tiov-

eynment'’s: Brief, p. 26), and the phrase “by force, intimida-

tion, threat or procuring dismissal from such employment

or by any other manner whatsoever’, is not lirhited to acts

or conduct relating tooa “kiek-back”, bat is broad énonugsi

fo enconipass any act or conduct of anyone, —~

ie

Is

é ‘ .

By rewriting and rephrasing «the — in accordance

with these analyses and contentions, we have

“any person, Whether cot rected with the victimes em

ployment or not who shallNby any manner whatsvever,

induce a person employed in the construction (of

projects wholly or partly financed by Federal funds)

te give up any part of the compensation to whieh te

is entitled, shall ke fined not more than Five Theusand

(85000) Dollars-or imprisoned not more than five ven rs.

or both.” . .

We submit that such a statute compels the. following

criticisms: The statute will be practically without Lannvitin

tion and reduced to an absurdity ; the statute. would be un

constitutional; and finally it would be so vague-and indef)

nite as to. be unenforceable. .

Reductio ad Absurdim .

The absurdity of the Government's contention ts clearly

recognized by the majority opinion hetow (Rt. 245):

“But nowhere in the Act, its title*or Its jovislative

history is it suggested that it was intended thereby to

reach an extortioner or blackmailer (not privy to the

contract of employment) ‘merely because the persons,

upon whom such an offender preys receive’ their cor

pensation as eniployees of a contractor doing public

avork financed in whole or in part by federal aid. Nev,

would a court be justitied in so extending the statute.”

The illustrations could be multiplied indefinitely. Congres +.

never intended that the legislation in question should ap:

piy to the bandit who, by force, steals from the workman;

“the landlord, who coerces to ‘get his rent; or th® union

oflicial who intimidates a workman in order to collect ducs

that he may owe toa unio, Nor_could it apply to a shop

keeper or vendor who fraudulently misrepresents the goods ©

sold to the workman. Such individuals are in a legal

vense, strangers to the Government, as well as the work-

mun. ‘They have no contract with the Federal Goverment

and therefore, have not cubmmitted themselves to its control:

“419

They have he contract with the workmen and are, legally,

strangers to them. Lf the phrase ‘or by any other manner

whatsoever”, as. the Government contends, is not limited

to illegal or unlawful means, the applicable illustrations

continue ad infinitum invading almost every-type of human

conduct, legal cr-illegal. In this fashion the “Kiek-Back”

Act wouldapply to all who sell merchandise to a person eni-

pioved on a Government financed project and agree to ac

cept payment weekly oui of the emiphoyer s salary, or toa

vendor who takes an assignment of wages from such elu

“playvee, oF to a finarfce company, or to a bill collector or toi it

aiielion company. Ls this the scope of the “Kiek-Back

‘Act intended by Congress? Is this a construction of the

statute reasonably in aceord with its manifest purposes!

Ix this 2 striet construction in favor of the accused:

Unconstitutionality

Before amplifying this eriticisin “of the.Government’=

construction of the statute; we must call attention to an

Inconsistency? in the Government's Briefs In tfootnote O35,

page 36, it is stated: . ; a

“Since the Government is not here urging the appli- .

cation of the, statute to the conduct of one who was

‘wholly unconnected with his (viethns} emplosiment,

there is not heré presented, the constitutional problen

which the Cireuit Court of Appeals felt that such a

COMSEMUCTION night involve * CR. 246). .

WV e faik to understand se the Government can sud.

denly inject this statement in its “brief, in view of the many

pages presented, directly to the contrary. The fact is that

the Government contends, that the “Kiek-Back” Act applies

without limitation. This is irrefutably shown by the ref-

erences-to-thebriet-stated_abeve wherein the Governinent—

sought to construe “whoever”, “contract of emplovine nt”

*oive up. and the phrase relating to “force, intimidation,

“ete Piroughout the brief the Govermuent has aryeued

that the statute “does not stiggest methods which only an

20

employer, or one acting on his behalf, would be eapable of

using” (p. 15). That, “as is. evident from its sweeping termi

nology and avowed purposes, the statute had a broader and.

not quite so teehnival an end in view” (p. 15). That the

purpose of the Act is that the workman “should have the

full enjoyment and benefit of those. wages” (p. 16). That

the statute is broad with sweeping terminology (p. 2).

Repetition of these phrases will be found throughout Gov-

‘ernment's brief.

—The—-only explanation that we can diagnose for the

amazing statement in footnote 33, page 36, is that the Giov-

ernment bel latedly realized that its own constriction of the

“Kick-Back” Act-left the door wide open, to the finding of

‘unconstitutionality. The Government -realize “| at the out-

set that a broad construction would have to be adopted

to hold the Respondent, and it ingeniously hit-zipon. the

broad and limitless ev ril of “lowering of the living standards

of working nen” (p.32) ; thereafter with blind enthusiasin:

and for many pages, the Government pursued its course,

eliminating practically all limitations tothe operation of

therstatute, and making it applicable to everybody: and

everyone (contrary, as we shall show ‘later to both the

‘majority and dissenting opinions of the Court below).

. The, first dampening of the Government’s enthusias

‘ame with the recollection of the “check off” system. The

‘mental process ix clear. The Government couldn't admit

that a “check off” violated: the “Kick-Back” Act and vet a

“check off” clearly was contrary to the construction whic!)

it urged. Thé Goverment had to explain away this anom

oly. The purported explanation is found in the Govern

ment’s briet, footnote 26, pages 33, 34. The weakness of,

the explanation, is apparent on reading this footnote. In

the first place; the Gevernment says, “in our-_oepinion™ 2

“check off” would not fall «within the “Kick-Back” Act.

‘Certainly (it cay as plausibly he said or argued that 2

“check off" is Wlegal and erimin: alas violative of thissstatu'

(fic especially so where a union forees the employee ‘to

.

4

i + z

?

agree to the “check off” as a-condition to remaining —e9-—

ployed). Secondly, the Government states in effect that a

“check off” would be: an xeeption to the statute. This hold

statement and nothing more is a clear example of sophistic

reasoning. The Government reasons that the statute should

he construed in a certain manner and then starts ree Ogniz-

_ing exceptions to its own reasoning. Isn't it more logical

‘to say that Congress mitust have been. aware of its own

legislation and policy permitting “check offs”, and that the

“statute” should ‘therefore he construed jin recognition

thereof?) + : ee ee

Atnost at the time the end. i the brief was reached and

in footnote 33, page 36, the Government's enthusiasm (for

its broad and sweeping construction) liad changed com»

pletely to fear—fear of the constitutionality of the statute

if constr ned accordingly,

This fear is recognized by the majority opinion below

AR. ¢ 246):<0 ° ad : .

“Under the construction of the statute, here involved,

which the government. necessarily urgés in an effort

to sustain the indictments, the blackmailer, who,”

wholly unconnected with his victim's employment,*re-.

quires anid receives a part of the employee's wages

each week for withholding knowledge of something

which the latter. desires to keep secret. from his em-

plover lest he lose his job, would be equally indictable.

Clearly, the statute was nat so intended. Furthermore,

any such extension of its scope suggests the possible

invasion of the field of private rights and wrongs, un-

related to any federal interest or conce@a. whieh C on-:

gress is/without constitutional Warrant to enter upon.

‘The regulation of the conduct ‘of its own cipmens he-

longs to the State, not to the United States.” United

States v. Constantine, 296 U.S. 287, 296." Z

This fear of unconstitutionality ix likewise justified by

athe decisions.

: "** anmact conimitted within a State, whether for

a cope or a bad purpose, of ‘whether with an honest

.

a 99

i oe

or a criminal intent, cannot'be made an offense against

the United States, unless it have ‘some relation to the

execution-of a power of Congress, or to some matter

within the jurisdiction of the United States. An act

not having any such relation is one in respect to which

the State can alone legislate.” United States v. For,

95 U. S. 670, 672. - ae Be

-~ “In this view the statute is a clear invasion of the

police power, inherent in the States, reserved from the

~~ grant-of powers te the federal government_by the Con-_.

: stitution * * *. 4 :

* * * The affirmation of such a’ proposition would

obliterate the distinction,. between the delegated powers

of the federal. government and those reserved to the

- States and to their citizens. ‘The implications from a

_. decision sustaining such an iimposition would be start-

i. ling. The concession of such a power would open the

door to unlimited regulation of matters of State ¢on-

cern by federal authority. The regulation of the con-

duct of its own citizens helongs to the State, not to the

United States. The right to impose sanctions for

violations of the State’s laws inheres in the body of its

citizens speaking tlirough — their. representatives.”

United. States v: Constantine, 296 U.S. 287, 296:

_ “There is, of “course, no constitutional power in

Congress to prohibit or to punish assaults committed

in the territorial limits of the state of South Carolina,

wiless they in some way interfere with the operations

of. the federal goyernment.” Bray v.. United States.

O89 Fed. 329, 382. :

‘To the same effect, Umtted States v. Doremus, 249 Us >.

96. 93, 95; United States v. Builer; 207 U.S. 1, 68; A, Le A.

Schechter Poultry Corp. vy. -Unitéd. States, 995 U.S. 499,

79 L. Ed. 1570, 55 S. Ct. 837, 97 AL. R. 947.

The state, through the exercise’ of its police power, has

the exclusive duty and. power to protect its local workmen '

om the depredations of ‘those. who through fraud, oppre=-

. v. coercion, or other wrongfvl act seek to take agnfeir

advantage of them. On what constitutional ground: can

certain workmen be singled out as entitled to federal pro-

a | ae 99

_teetion, simply. because thei employer is engaged in work:

ing on a purely local project which is partly de ‘pende nt upon

federal grant? What constitutional sanction recognizes |

that threats of extortioners-and blac ‘kmailers are greater or,

different with’ a. to such emplorees as distinguished

from all employe ? What reasonable relation is there be-

tween this statute and extortion from a workman merely

lecause he exerts his labors on a local project partially

_financed by federal soho pres ateres (canoes coca vncs ia

states (R. 245): .

“Equally ‘reprehensible though it is for one not oe

emplover to exact tribute from a workman upon threa

of disturbing him in his émployment, no greater ne

for federal®protection of w orkers against the threats

of extortjoners or blackmailers in general is indicated

_simply because, their-employer diayppens to derive all or

‘a part of his income from work depe ndent upon federal

loans or grants. « All other workers merit no less con-

sideration. But extortion or blackmail visited upon

private persons in respect of ‘their private rights or |

property are-offenses which, under our federal system,

-have been left to the @rimina! adminis tration of the

states. 2

+ ors can the Construction urged: by the Government find

constitutional sanction i in’ the theory that the project

(financed in whole or in ae by federal funds) is within

the jarisdiction of the United States. Article IV, Seetion

3, clause 2, of the United States Constitution gives Con-

-gress power to make all needful rules and regulations re-

-specting the territory or. other sag rty belonging to. tlie

United States. The statute (18 U.S. C.See. 451) affords

federal jurisdiction over crimes committe within or on

any lands reserved or acquired for the exclusiveuse of the

Vnited States and under its exclusive jurisdiction or any

ne e purchased or otherwise acquired by the United States

by the consent of the legislature of the state fot the erection

of a forty magazine, éte.

eo. y o4

‘Mgis\statute cannot help the Government in its conten-

tion vuse it is now settled beyond question that the.

United States must have been given exclusive jurisdiction

and: possession of the property in question and further

that the state legislature miust have granted Congress

criminal jurisdiction thereof. Bowen vy. Johnston, 306

ULS. 19; United States.v.. Bevans, 3 Wheat., 336; United

States v. McGowan, 302 U.S. 535; United States v. Bow-

man, 260 U.S. 94.0 | |

It must not be. overlooked, that the project upon which.

the workmen were employed was not a federal project, but

‘a purely State project undertaken by a State agency, The

‘workmen were not Government employees or officials. They

were the private employees of a private dothestic contrac.

tor. It is extremely doubtful that any part of the federal

grant was actually disbursed fo the employees. or their

employer (R. 53, 54).

In light of the anthorities heretofore cited, we Melawa.

that if the construction urged by the Government were

adopted, the statute would be unconstitutional, Certainly,

the most that can be favorably said, even affording. the

henefit of every reasonable doubt, : is, that there still re-

mains grav e doubt on that seore,

*

In Linde’ v. UL S., 268ULS. 5, this Court states on pages

li, 18:

“Congress cannot, under the pretext of executing dele-

gated power, pass laws for the accomplishment of ob-

_ jects net intrusted to the Federal government. And

we accept as established doctrine that any provision

of an act of Congress ostensibly enacted under power

vranted by the Constitution, not naturally and reason-

ably adapted to the effective exereise of such power,

- ut solely -to the achievemént of something plainly

within power reserved: to the states, is invalid, and

“annot be enforced. MeCulloch vy. Maryland, 4 Wheat

S16, 423, 4 L. ed. 579, 605; License’ Tax Cases, 5 Wall.

462. IS L. ed. 497: United States vo Dewitt, 9 Wall.

gi

..

#1, 19 L.. ed. 593; Keller v. United States, 213 UCS., 138,

03 1. ed. 737, 29 Sup. Ct: Rep. 470, 16 Ann. Cas. 10606;

Hlammer y, Dagethart, 247 U.-S. 261, 62 L. ed. 1101,

3 A. L. R. 649, 38. Sup. Ct. Rep. 529, Ann. Cas. 18h,

» 724; Child Labor Tax Case, 259 U.S. 20, 66 L. ed. 817,

“1, A. L. R. 1432, 42 Sup. Ct. Rep. 449. In the light of

these principles and not forgetting the familiar rule,

that ‘a-statute must be construed, if fairly possible,

* 80 as to avotd not only the conclusion that it is un-

constitutional, but also qrave doubis upon that score,

the provisions of this statute must. he interpreted and

applied.” (Italics ours.) . ‘ ,

To the same effect see Cohens.y. Slate of Virginia, 6 Wheat.

“64, in which, the Court lield that an act of Congress would.

not be construed so as to imply an intention of interfering

with the penal laws of a state’ unless the provisians of an

act are such as to render the construction ‘inevitable.

Vagueness and Uncertainty

The construction urged by the Government would leave

the statute so vague and uncertain that it would bene Tee.

~tual and “unenforceable, The Government has”refused to

recognize that the dovtrine of ejusdem- djeneris applies to

the expression “or-by any other manner whatsoever", We

have also demonstrated the Government's construction of

the word “whoever”, as well as the other language in the

statute. In Connally v. General Construction Co, 269 U.S.

385, the Court states on page 391; |

“That the. terms of a penal statute creating a new

offence must be sufficiently explicit to inform those

Who are subject to it what conduct on their part will

render them liable torts penalties, is a well-recognized

requirement, consonant alike With ordinary notions ‘of

fair-play and the settled rules of law. And a statute

which either forbids .or requires the doing of an aet

in terins so vague that men of common intelligerice

inust necessarily guess at its meaning and differ ys to

its application, violates the first essential of due proce.

ess of taw.”

a

26

In Lanzetta v. New Jersey, 306, UsS 451, this Court held

on page 453: . —- .

.“No-one may be required at peril of life, liberty, or

property, to- speculate as. to the meaning of penal

statutes. © All are entitled to be informed as to what the

_, statute commands or forbids.”

To the same effect are, Champlin Rig. Co. v. Commission,

P86 UL S. 210, 242, 243; Cline v. Frink Dair y Co, 274 USS.

445, 498; Small Cov. American Sugar Rig. Co., 267 CLS.

233, bes United States v. Cohen Grocery Co., 255 U.S

$1, 89; Collins v. Nentucky, ty U.S. 6384, 638; International

Harvest Co. v. Ke utucky, 2 Ba Ut GS: 226,231; Weeds v..

United States, 255 U.S. 109; Stromberg v. California, 285.

U.S. 359, 369; Smith v. Cahoon, 283 U.S. 553, 564; wisi

don v. Lowry, 301 U.S. 242. 261). |

defore leaving the criticism of the construction of. the

‘statute urged by the Government, it is noteworthy to.point

Aut that the Government does not agree with -either the

majority or the dissenting opinion below, The dissentin:

opinion of J udge Biggs makes it clear that he agrees that

the statute was not intended to apply to instances of extor- .

tion unconnected with the contract of employment (R. 249).

His only disagreement with the majority is that the limita-

tion imposed by the majority is too. striet and that a fore.

man is an official of ‘a company close enough to the contract

of elployme 1it.to, he within the statute. As stated above,

the Government does not agree with either opinion, since

the Government’s construction ef tlie statute depends clear-

lv and unequivocably. upona determination that the statute)

ix intended to apply to conduct unconnected with the con-

tract of employment, and to anyone without limitation.

+

27 '

CONCLUSION :

The construction of. the statute adopted by the Court

below is in clear ‘accord With the obvious intent of the

Congress and is consonant with reason. and the limitations

on the federal Jurisdiction. It leaves the’ statute sufficient |

and efficient for the purposes it was intended to serve:

The construction urged by the Government requires a

‘venture into the realm of the imagination in order to, torture

the plain meaning into absurdity, and to reach a-result

Wholly foreign to the jegislative intent. 7

Respectfully submitted,

Harotp: Simanpr.,

Attorney for Frank Laudani. Respondent,

December 11, 1943.

SUPREME COURT OF THE UNITED STATES.

No. 71.—Ocrossr Trem, 1943.

°

7

7

The United States of America, ) On Writ of Certiorari to the

Petitioner, — ' United States Cireuit Court

vs. r of Appeals for the Third

Frank Laudani. Circuit. Te

¢ [January 3, 1944.]

& me P :

Mr. Justice BLack delivered the opinion of the Court.

7

Indictments returned in a United’ ‘States District Court in

‘New ‘Jersey charged that the respondent Laudani, while acting ©

as a company foreman with authority to employ and discharge

workers on a public works project financed in part by the United

States, had contrary to Section 1 of an Act of June 13, 1934.)

forced certain of his subordinates to give him part of their wages

in order to keep their jobs. Laudani moved to quash assigning --

as one ground that the indictments failed to charge conduct

_ prohibited by this Act since they did not contain allegations that

he was the employer of the coerced men or that he had acted as

agent of the employer in foreing the payments. The gist of

his contention was that the prohibition of. the Aet extends only

to employers and persons who act in coneert with them. The Dis-

trict Court concluded that the Act applied to a foreman such as

Laudani, overruled his motion, and a jury convicted him. The

Cireuit Court of Appeals accepted La\idani’s contention, reversed

the judgment, and directed that the ind ments be quashed. 134

F. -2a 847. The public importance of the question presented

prompted us to grant certiorari. . oe fess: ;

Both the language and history of the Kickback Act argue

against the conclusion that Congress intended its prohibition to

1 This Act is commonly known as the ‘‘Kiekback’’ Act. Section 1 pro-

vides that, ‘‘ Whoever’ shall induce any -person emploved in the construction,

Prosecution, or completion of any public building, publie work. or building

or work financed 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 te which he

is entitled under his contract of emplovment, by force, intimidation, threat’

of procuring dismissa) from such employment, or bv ‘anv other manner what-

Seever, shail be fined not more than $5,000. or imprisoned not more than five

years, or both.’’ 48 Stat. 948: US. ©. Title 40, § 276b.

3 — United States vs. Laydani.

‘apply only to employers and not to foremen who exercise many

‘of AKé powers of employers. The Act punishes ‘*whoever”’ — ,

‘induce -any person employed on a federally financed work ‘‘t

give up any part of the compensation to which he is mittitea

under his: contract of employment”? by ‘force, intimidation, threat

of procuring dismissal from such employment, or by any. other

«manner whatsoever.’ The sweep of the word ‘‘whoever’’, if

that word stood alone, would bé wide enough to include fot only

an employer but‘any other person - And the coereive qnethods. vor

inducement expressly prohibited by the Act are methods in whie h

‘at least some persons other than canpheg ers could engage without

legal Cause or excuse.

. The. Cireuit Court of Appeals pointed out, however’ that’ if

the word ‘‘whoever’’ be given its broadest scope the Act migh:!

include common biackmailers who have no relationship to- their

victims’ employment. In an effort to avoid what it considere:|

to be.such an extreme application of the Act, the Court focused

attention on the clause ‘‘to give up any part of the compensa-

tion to which he is entitled under his contract of employment.’

Viewing tais clause as proof that the purpose of Congress -was

to protect the employees’ contractual rights to receive wages from

their employer, the Court: reasoned that rio one but the employer

or. one acting on his- behalf possessed ‘“‘the requisite privity of

-contract’’ with the employees to be capable of impairing these +

rights. Having thus emphasized the Congressional reference to a

‘“‘eontract of employnient™*, the Court stated brvadly that, ‘‘ What

“happens to the compensation after the employee has received it

in full, and wholly without relation to or effec’ upon his contract *

of employment, is a matter with which this statute does not pur.

port to deal.’

The Court’s statement might have been. pertinent had the in-

dictments here been“ aguinst a common blackmailer,- extortioner.

or some other person not alleged to have been vested by the em-

ployer with power to fix and terminate the employer-employee

status. But we think that the coerced surrender of wages by

employees at the instance of a company foreman given. authority

by his employer to hire and discharge them cannot properly be

said to bear no relation to or have no effect upon their contracts

of employment, especially where, as here alleged, the surrender

2 Ibid. , “s

‘ee oeee

; United States vs. Laudani. > 8

of wages was induced by ‘the foreman’s express threat to dismiss

all employees who did not comply ‘with ‘his_demand. - Execution

of such a threat against employees unwilling to pay would imme-

~~~ diately and completely have terminated their: employment con-

. tracts. .. We find nothing in the Act Which Suggests that, under

these circumstances, a foreman must—be deemed incapabie of: yii)-

lating its previsions merely because he piay not stand in that rela-

tionship to employees. which the Cireuit Court characterized as

“privity of contract.”’ =e

The purpose of the Act under consideration is to extend pro:

tection not merely to the legal form: of employment contracts but.

to the substantive rights of workers actually: to receive the. benetit

of the wage schedules - which Congress has provided for them.

The evil aimed at was the wrongtul deprivation of fult work pay-

ments. The Act was adopted near the bottom of a great busi-

ness depression as one part of a “broad Congressional program

the goal of which was to strengthen’ the domestic economy by

increasing the .purchasing power. of the nation’s consumers. To

this end, Congress enacted legislation designed to relieve wide-

spread ‘unemployment and enable working people to. earn just

and reasonable wages. <A large program for federal finaneing

-of public works was established,’ and legislation was passed re-

quiring government contractors to pay eertain minimum wage

. rates. It was the purpose of the Kickback Act. to assure that the

federal funds thus provided for workers should actually be re-

ceived by them. foe their own use except where diverted under

authority of law or a Worker's voluntary agreement.5

cnssitbananaeiniiaisiaiatni pe

pe nse neti stem

3 The grant of money for the work on which Laudani was employed was

. authorized by Title IL of the National Industria] Reeovery Act enacted June

16, 1933, near the bottom of the depression. Section -1 of this Act deelare.{

that the pelicy of Congress was ++ - . . tO Increase the consumption of in-

dustrial and agricultural .products hy inereasing purchasing power, to reduce .

and relieve unemployment, to improve standards of lubor, and‘ otherwise to.

rehabilitate industry and to conserve natural resources.’’ 48-Stat. 195.

' Title IT, Section 206, of the National Industrial Reeovery “Act of June 16,

1933, provides in part that, ‘*All eontraets let for construction projects. and

all loans and grants pursuant to this title shall contain such provisions as sre

necessary to insure . . | that all emp'ovees shall be paid’ just ari! reasonable

- Wages which shall be compensation sufficient to Provide, for the hours of lahor

cm #3 limited, a standard of living in decency and comfort . __. .”? 48. Stat..

: “04-205; U. S.C. Title 40, $406. See also an Act of March 3, 1931, as

&mended, commonly known as the Davis-Biteon Act 46 Stat. 1494; 49 Stat. -

101i; 54 Star. 3993 U, 8, C. Title 40, &§ 276a-276a-5; Perkins v. Lukens Stee]

Co, 810 U..S. 112, 128, . ;& -t 6

5. See Report of the House Committee on the Judiciary on‘ Bill sg: 3041,

_H. Rep. No. 1750, 73d Cong., 24: Sess, The .réport printed a letter from the

_—

—

teats _ : , ———

. ee :

- tas =

ae as ae

———_—

— ‘ United States vs. handons.

In view of this background, we cannoty | hold that Congress in-—

tended to exelude from the Act’s proseription a foreman with

‘the authority Laudani is alleged:‘to have possessed. .Foremen

vested with fuil power to employ ‘and discharge subordinates

could frustrate the objective of the Act just as effectively as could

their employers, and foremen not given such broad powers might

nevertheless be. able to use their authority to. accomplish the same —

result. That foremen not only could but might do this very thing »

was testified at Senate hearings when the problem of ‘‘kickbacks”

was under study.* And the members of the Senate Committee on

the Judiciary ‘reporting the bill used. language broad.enough to,

‘inelude foremen 4mong others when -they said that- hearings “had ©

revealed, **that large sums of money have been extracted from

the poekets of American labor, to enrich contractors, subeontrae-

tors, and their officials.’*

. To hold that a company foreman vested with sufficient’ power

substantially to affect his subordinates’ contracts of employment

- is within the Act’s prescription is not to hold that the Act applies

to, every .extortioner, blackmailer, or other person who extracts

money from one who-has previously. received it for labor on a

federally financed project. We need not, at this time. attempt to

delineate the outside scope of the Act’s application. But the pur-

pose of the legislation. no less than its language. shows that the

power to employ and discharge brings an — company ’s

foreman within its prohibition.

The judgment of.the Cireuit C ourt of purines is reversed, and

the cause is remanded to that court for/eonsideration and dis-

“position of other questions not here involved. ‘

= Reversed and pomended

d ‘Federal Emer; ency Administrator of Publie Works, Harold L. Ickes, which

' urcved immediate passage of the bill “to prevent a very prevalent evi) in the

construction industry which, to the extent that it exists on Publie Works pro-

jects. defeats the purpose of: Title If of the National Industrial, Recovery Act

_and the suecess of our Publie Works program.’’

6 See, ‘fot example. Hearings, Subcommittee of Senate Cumaiaes on —

=. S. Res. 74, 73d Cong., 2d Sess., Vol. I, pp. 790-792, 801, B26,

7S, Rep. No. 803, 73d Cong., | 2d Sess. . : ————-

eo