Second Circuit Defines 'Obtaining Property' Under Hobbs Act Post-Scheidler II

Introduction

The case of United States of America v. Peter Gotti et al., decided on July 12, 2006, by the United States Court of Appeals for the Second Circuit, presents a pivotal interpretation of the Hobbs Act in light of the Supreme Court's decision in SCHEIDLER v. NATIONAL ORGANIZATION FOR WOMEN, INC. (commonly referred to as Scheidler II). This commentary delves into the background of the case, summarizing key judicial findings, analyzing the legal reasoning, and exploring the broader impact of the decision on extortion law.

Summary of the Judgment

The defendants-appellants—Peter Gotti, Richard G. Gotti, Anthony Ciccone, and Richard Bondi—challenged various extortion counts under the Hobbs Act, arguing that the Supreme Court's ruling in Scheidler II invalidated extortion charges based on the extortion of intangible property rights. The Second Circuit held that Scheidler II did not preclude such extortion counts. Instead, Scheidler II clarified that for Hobbs Act liability to attach, there must be evidence that the defendant sought not only to deprive the victim of their property rights but also to obtain those rights for themselves. Consequently, the extortion counts against the defendants stood firm, and their convictions were upheld, with specific remands for resentencing.

Analysis

Precedents Cited

The judgment heavily references pivotal cases that shaped the interpretation of the Hobbs Act:

• Trendione v. National Organization for Women, Inc. (Scheidler I): Addressed similar issues of extortion under the Hobbs Act.
• Scheidler II (2003): The Supreme Court narrowed the scope of extortion under the Hobbs Act, emphasizing the need for defendants to obtain property rights, not merely deprive others of them.
• Tropiano v. Mangano: Established that intangible property rights can be protected under the Hobbs Act.
• Arena v. United States: Differentiated extortion from coercion, reinforcing that extortion requires obtaining property rights.
• Rybicki and Bellomo: Further elaborate on the definitions and scope of property rights under the Hobbs Act.

Legal Reasoning

The Second Circuit meticulously dissected the implications of Scheidler II, reaffirming that intangible property rights are indeed protected under the Hobbs Act. The court clarified that while Scheidler II tightened the extortion requirements by insisting on the "obtaining" of property, it did not invalidate the protection of intangible rights. The essence of the court’s reasoning hinged on two main points:

• Definition of Property: The court upheld that intangible rights, such as the rights guaranteed by the Labor-Management Reporting and Disclosure Act (LMRDA), qualify as property under the Hobbs Act.
• Obtaining Property: Extortion is affirmed when a defendant attempts to procure property rights for personal gain, rather than solely depriving others of those rights.

Applying this framework, the court found that the defendants had indeed sought to obtain control over union positions and other intangible rights for themselves, thereby satisfying the Hobbs Act’s extortion criteria post-Scheidler II.

Impact

This judgment has significant ramifications for future extortion cases under the Hobbs Act, particularly those involving intangible property rights. It reinforces the principle that the mere deprivation of property rights does not constitute extortion; there must be an element of acquisition. As a result, organized crime entities can still be prosecuted for extorting intangible rights provided there is evidence of attempting to benefit from those rights.

Additionally, the decision underscores the continued relevance of RICO (Racketeer Influenced and Corrupt Organizations Act) in addressing complex patterns of criminal activity, including fraud and money laundering intertwining with extortion.

Complex Concepts Simplified

Hobbs Act: A federal law prohibiting robbery or extortion affecting interstate commerce, often used to combat organized crime.

Scheidler I, II, III: Refer to different iterations of the Supreme Court’s decisions in the Scheidler case, each refining the scope of extortion under the Hobbs Act.

Extortion vs. Coercion: Extortion involves obtaining property rights through wrongful means, while coercion pertains to forcing someone’s actions through threats without a direct intent to acquire property.

RICO: A federal law designed to combat organized crime by allowing prosecution of all individuals involved in a criminal organization.

Intangible Property Rights: Non-physical rights such as positions within an organization, the right to freely participate in union activities, or the control over business operations.

Conclusion

The Second Circuit's decision in United States v. Gotti et al. provides a clear and structured interpretation of extortion under the Hobbs Act post-Scheidler II. By affirming that intangible property rights are protected and that extortion requires both deprivation and acquisition of such rights, the court has delineated a framework that balances the need to combat organized crime with the statutory requirements of extortion. This ruling not only upholds the convictions of the defendants but also sets a precedent that will guide future judicial interpretations and prosecutions involving complex extortion schemes.