U.S. v. Allen

• Citation: 127 F.3d 260
• Decision Date: 08 October 1997
• Docket Number: D,No. 937,937
• Parties: UNITED STATES of America, Appellee, v. Ernest ALLEN, aka 1-95-m-1426-01, Defendant-Appellant. ocket 96-1305.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 260

127 F.3d 260

UNITED STATES of America, Appellee, v. Ernest ALLEN, aka 1-95-m-1426-01, Defendant-Appellant.

No. 937, Docket 96-1305.

United States Court of Appeals, Second Circuit.

Argued Feb. 13, 1997.

Decided Oct. 8, 1997.

Jeremy Gutman, New York City, for Defendant-Appellant.

Jo Anne Weissbart, Assistant United States Attorney, Brooklyn, NY (Zachary W. Carter, United States Attorney for the Eastern District of New York, Peter A. Norling, Assistant United States Attorney, Brooklyn, NY, on the brief), for Appellee.

Before: JACOBS, CALABRESI and LAY ^*, Circuit Judges.

JACOBS, Circuit Judge:

Ernest Allen appeals from a judgment of the United States District Court for the Eastern District of New York convicting him, following a jury trial, of making two extortionate extensions of credit in violation of 18 U.S.C. § 892(a). On appeal, Allen claims that 18 U.S.C. § 892(a) is unconstitutionally vague as applied to the facts of his case, and that the jury instructions improperly favored the prosecution and failed to articulate the central theory of the defense. We conclude that Allen's vagueness argument is better framed as a challenge to the sufficiency of the evidence; that manifest injustice would result if we were to address Allen's jury instruction argument without reaching the sufficiency issue; and that the evidence was insufficient to prove one of the elements of the offense beyond a reasonable doubt. Accordingly, we reverse.

BACKGROUND

Allen, a janitor at the Veterans Administration Hospital in Brooklyn, was also a small-time loan shark. In early February 1995, the Office of the Inspector General of the Department of Veterans Affairs conducted an undercover operation at the hospital, in which agent Alexis Fernandez posed as a work-study student assigned to the hospital's engineering section. Agent Fernandez learned of Allen's loan-sharking sideline from other hospital employees.

On February 10, 1995, Fernandez approached Allen at the hospital and asked to borrow $100. Allen agreed to lend the money for a week, at a 25% per week interest rate, on the condition that Fernandez secure the loan with his gold chain. Fernandez had purchased this gold chain for approximately $300 six years earlier. Allen took down Fernandez's home address, gave Fernandez his pager number, and told Fernandez that (now that he had the pager number) Fernandez could not claim that he could not find the lender: "[P]eople who borrow from me know they don't have an excuse why they can't pay me back on time because I'll go anywhere to any neighborhood at any time to get the money."

On February 16, 1995, Fernandez approached Allen at the hospital, repaid the $100, remitted the $25 interest, and took back his gold chain. As agent Fernandez secretly tape recorded this conversation, the two then engaged in an amiable conversation, punctuated by joking and laughter, during which Fernandez began questioning Allen about his business. Fernandez asked Allen why he took collateral from borrowers. Allen explained that he took security so that he did not have to depend on the borrowers for The next loan transaction took place over two months after this exchange. On April 27, 1995, Fernandez asked Allen to borrow $150, but Allen was prepared to lend only $100, and the transaction was done on the same terms as the first loan. Again, Fernandez turned over his gold chain as collateral. On May 2, 1995, the two men met on a street corner near Allen's home. Fernandez repaid the $100, plus $25 interest, and Allen returned the gold chain. Allen then invited Fernandez to his home, where they went and talked.

                repayment.  He added that he sometimes took losses but that "you can't get excited when you lose" because "[i]t's just a loss."   Laughing out loud, Fernandez suggested that if a borrower defaulted, "you just smack that nigger, and you tell him give me my money."   Allen allowed that he did that "many times," and that he "caught a guy one time over here [and] [k]nocked him out right here in the, um, bus stop."
                

On June 23, 1995, Fernandez borrowed $150 from Allen on the same terms as the other two loans. Once again, Fernandez relinquished his gold chain as collateral. On June 27, 1995, Fernandez repaid the loan, plus $37.50 interest, and soon thereafter Allen returned the gold chain.

The original indictment charged Allen with four counts: three counts of extortionate extension of credit in violation of 18 U.S.C. § 892 (one count for each loan to Fernandez); and one count (in respect of all three loans) of collection on extensions of credit by extortionate means in violation of 18 U.S.C. § 894. At the conclusion of the prosecution's case-in-chief, as well as at the conclusion of all the evidence, Allen moved for a judgment of acquittal pursuant to Fed.R.Crim.P. 29(a), arguing that based upon the evidence, the jury could not find guilt beyond a reasonable doubt. Those motions were denied.

Allen was convicted (on counts two and three) of making two extortionate extensions of credit in relation to the second and third loans to Fernandez, but was acquitted on count one (alleging the extortionate extension of credit in respect of the first loan), and on the fourth count: collection of the three loans by extortionate means.

Allen then filed a Rule 29(c) motion for judgment of acquittal, claiming that 18 U.S.C. § 892(a) was unconstitutionally vague, as applied to the facts of his case. The district court denied this motion.

Allen was principally sentenced to 27 months' imprisonment; he is free on bail pending the outcome of this appeal.

DISCUSSION

A.

On appeal, Allen advances a subtle constitutional argument that the extortionate extension of credit statute, as applied to his case, is unconstitutionally vague. In addition, Allen asserts that the jury instructions improperly favored the prosecution and failed to articulate the defense's theory. Allen does not challenge the sufficiency of the evidence on appeal. However, although we believe that the vagueness challenge may have some merit, we think that this argument is better conceived and addressed as a sufficiency challenge.

To be constitutional, a statute must "give the person of ordinary intelligence a reasonable opportunity to know what is prohibited" and "provide explicit standards for those who apply [it]." Grayned v. City of Rockford, 408 U.S. 104, 108, 92 S.Ct. 2294, 2299, 33 L.Ed.2d 222 (1972). A "scienter requirement may mitigate a law's vagueness, especially with respect to the adequacy of notice ... that [the] conduct is proscribed." Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 499, 102 S.Ct. 1186, 1193, 71 L.Ed.2d 362 (1982). In United States v. Curcio, 712 F.2d 1532 (2d Cir.1983), we found that, although § 892(a) is somewhat vague on its face, the statute contains a scienter requirement which can be satisfied by showing that the creditor and the debtor both understand at the outset of the loan transaction that violence could result if the loan is not repaid. Id. at 1544.

Allen points out that the word "understand" is very broad and may not in every case be sufficient to mitigate the law's vagueness. Specifically, Allen argues that if his Although this argument may have some merit, the argument is better conceived as a challenge to the sufficiency of the evidence. The sufficiency of the evidence to satisfy the scienter requirement in a particular case is a threshold issue that obviates a vagueness challenge. Moreover, it is preferable to address the sufficiency issue if it has merit, because--unlike the vagueness issue--the sufficiency issue ordinarily raises no constitutional question.

actions are sufficient to prove understanding under § 892(a), the statute encompasses conduct that the person of ordinary intelligence would not know is prohibited.

Accordingly, before considering the evidentiary sufficiency in this case, we must consider whether Allen preserved the sufficiency issue at trial and raised it on appeal, and--if not--whether we may reach it and by what standard we must review it.

The Government concedes that the defendant "technically preserved" the sufficiency issue at trial via his Rule 29 motion at the conclusion of the Government's case and at the conclusion of all the evidence. However, without citing authority, the Government asserts that the issue was "abandoned" or "disavowed" by Allen's failure to raise it in the Rule 29(c) post-trial motion, and is therefore subject to review only for "plain error."

To preserve the sufficiency issue and avoid the burden of showing plain error, a defendant must have moved for judgment of acquittal either at the close of all the evidence pursuant to Rule 29(a) or post-trial in a motion pursuant to Rule 29(c). See United States v. Pless, 982 F.2d 1118, 1122 (7th Cir.1992); cf. United States v. Leslie, 103 F.3d 1093, 1100-01 (2d Cir.) (holding that defendant did not waive sufficiency challenge by raising argument in Rule 33 motion for new trial and not in Rule 29 motion for judgment of acquittal), cert. denied, --- U.S. ----, 117 S.Ct. 1713, 137 L.Ed.2d 837 (1997). We find no case that requires the defendant to make both motions in order to preserve the issue or that treats as a forfeiture a failure to raise the sufficiency claim on the Rule 29(c) motion. Allen's motion at the close of evidence therefore preserved the sufficiency issue for appeal.

But Allen did not argue the sufficiency challenge on appeal. "Ordinarily ... an argument not raised on appeal is deemed abandoned. However, Fed. R.App. P. 2 gives a Court of Appeals the discretion to overlook such a failure if manifest injustice otherwise would result." United States v. Babwah, 972 F.2d 30, 34-35 (2d Cir.1992) (citations omitted).

Manifest injustice would result here if we failed to consider the sufficiency of the evidence. First, as noted, Allen's void-for-vagueness argument is closely related to the sufficiency...