U.S. v. Carson
| Decision Date | 12 April 1995 |
| Docket Number | No. 514,D,514 |
| Citation | 52 F.3d 1173 |
| Parties | 149 L.R.R.M. (BNA) 2001, 130 Lab.Cas. P 11,313 UNITED STATES of America, Plaintiff-Appellee, v. Donald CARSON, Defendant-Appellant, LOCAL 1804-1, ILA; John Barbato; George Barone; John Bowers; George Bradley; Thomas Buzzanca; Sato Calabrese; Ronald Capri; Harry Cashin; James J. Cashin; Anthony Ciccone; Joseph Colozza; Vincent Colucci; James Coonan; Michael Coppola; Harold Daggett; Doreen Supply Company, Inc.; Tino Fiumara; Anthony Gallagher; Robert Gleason; John Gotti; Leroy Gwynn; ILA Local 1588; ILA Local 1588, Executive Board; ILA Local 1809; ILA Local 1809, Executive Board; ILA Local 1814; ILA Local 1814, Executive Board; Anthony Anastasio; ILA Local 1909; Blase Terraciano; ILA Local 1909, Executive Board; ILA Local 824; ILA Local 824, Executive Board; Kevin Kelly; Joseph C.F. Kenny; George Lachnicht; Gregory Lagana; Frank Lonardo; Venero Mangano; James McElroy; Metropolitan Marine Maintenance Contractors; Carlos Mora; New York Shipping Association; Nodar Ship Repair, Inc.; Ralph Perello; Louis Pernice; Richard Pierce; Anthony Pimpinella; John Potter; Douglas Rago; Joseph Randazzo; Thomas Ryan; Anthony Salerno; Frank Scollo; Anthony Scotto; Alfred Small; and Dominick Sanzo, Defendants. Donald J. CARSON and Peggy Carson, Plaintiffs-Appellants, v. LOCAL UNION 1588, I.L.A., ITS OFFICER, EXECUTIVE BOARD AND TRUSTEES, Defendant-Appellee. ocket 94-6044. |
| Court | U.S. Court of Appeals — Second Circuit |
Fredric J. Gross, Mount Ephraim, NJ, for defendant-appellant Donald J. Carson, plaintiffs-appellants Donald J. Carson and Peggy Carson.
Claude M. Millman, Asst. U.S. Atty. for S.D.N.Y., New York City (Mary Jo White, U.S. Atty., Steven I. Froot, Asst. U.S. Atty., on the brief), for plaintiff-appellee U.S.
Donna R. Newman, Jersey City, NJ, for defendant-appellee Local Union 1588.
Before: OAKES, JACOBS and CALABRESI, Circuit Judges.
The government asserted civil claims under the Racketeer Influenced and Corrupt Organizations statute, 18 U.S.C. Sec. 1961 et seq. ("RICO"), alleging that appellant Donald J. Carson committed various racketeering acts on behalf of organized crime while Carson was Secretary-Treasurer of Local 1588 of the International Longshoremen's Association ("ILA"). 1 Following a bench trial in which the district court heard ten weeks of evidence and argument distributed over an eleven month period, the United District Court for the Southern District of New York (Sand, J.) entered a final judgment in favor of the government, (1) granting injunctive relief, (2) ordering Carson to disgorge ill-gotten gains, and (3) imposing approximately $46,000 of costs. Carson appeals on numerous grounds. In addition, appeal is taken from the district court's dismissal of a complaint filed by Carson and his wife, Peggy Carson, against Local 1588 under the Employee Retirement Income Security Act of 1974, 29 U.S.C. Secs. 1001 et seq. ("ERISA"). This ERISA action had been consolidated with the civil RICO suit.
On his appeal from the civil RICO judgment, Carson contends: (1) that the district court exceeded the scope of its jurisdiction under 28 U.S.C. Sec. 1964 when it ordered him to disgorge his past ill-gotten gains; (2) that the disgorgement order violated the Double Jeopardy Clause of the Constitution; (3) that the injunctive relief was overbroad; (4) that a portion of a transcript from a prior criminal proceeding was improperly admitted into evidence in the civil proceeding; (5) that Carson was prejudiced by the scheduling of the ten weeks of trial over an eleven month period and other features in the conduct of the trial; and (6) that excessive costs were taxed by the clerk of the court. Finally, the Carsons argue that the district court erred when it dismissed their ERISA claim against Local 1588.
We affirm in part, vacate in part and remand to the district court for re-consideration consistent with this opinion.
This civil RICO action followed in the wake of a criminal prosecution. The civil action was commenced after Carson's criminal conviction in 1988; judgment was entered in the civil action after the Third Circuit's decision in July 1992 overturning the criminal conviction.
In August 1988, Carson was convicted in the District of New Jersey for participating in a conspiracy to conduct the affairs of an enterprise through a pattern of racketeering. The criminal indictment essentially charged that Carson, who served from 1972 until 1988 as the Secretary-Treasurer of ILA Locals 1587 and 1588, 2 accepted kickbacks from a waterfront employer at the Military Ocean Terminal, in Bayonne, New Jersey ("MOTBY"), in exchange for labor peace. MOTBY is a government-owned facility used primarily to handle military cargo. The kickbacks were shared by Carson and various associates of the Genovese organized crime family.
The government's original civil RICO complaint, filed on February 14, 1990, named more than 50 individual defendants. By the time the trial concluded in 1993, four remained, including Carson. Relying on live testimony, recorded on more than 5,000 transcript pages, and on exhibits and deposition transcripts, the district court found that, during Carson's tenure as the secretary-treasurer of Local 1588, he acted on behalf of organized crime and a group described as the Waterfront Enterprise. The district court found that this Waterfront Enterprise was an alliance among union officials, waterfront businessmen and members of the Genovese and Gambino organized crime families. The district court found that Carson contributed to the wrongdoing of the Enterprise by (1) engaging in a kickback scheme which resulted in the loss of wages for the members of his union, (2) improperly accepting offers of meals and entertainment from union employers, (3) embezzling salary payments from the union, and (4) extorting the democratic rights of Local 1588's membership by maintaining a climate of fear in the union. These findings appear in the second of the five district court opinions that are referenced herein. These opinions, numbered for future reference, are listed in the margin. 3
The MOTBY Scheme: Some time prior to 1981, the federal government leased for commercial use 33 acres of MOTBY to Consolidated Pier Developers ("CPD"), a company controlled by co-defendant Gallagher. CPD, in turn, subleased a building on these 33 acres to United Terminal, Inc. ("UTI"). Sealand Service, Inc. ("Sealand"), a shipping company that moved containerized cargo worldwide, relocated its operations to MOTBY in 1981. UTI served as Sealand's contractual stevedore.
According to the record, two different classes of waterfront laborers are commonly used to load and unload ships: deep-sea labor, and warehousemen labor. Deep-sea laborers in Bayonne were members of Local 1587 while warehouseman laborers were members of Local 1588; both locals were run by Carson. At the time the illegal MOTBY activities took place, deep-sea laborers were paid roughly $5 more per hour than warehouse laborers. ILA policy required that deep-sea labor be used for loading and unloading oceangoing vessels, and opposed the use of "mixed labor" forces.
The contract between Sealand and UTI incorporated the higher wages of the deep-sea laborers. Evidence at trial indicated, however, that after Sealand relocated to MOTBY, UTI no longer hired only deep-sea laborers for the loading and unloading of oceangoing vessels. Instead, pursuant to an agreement among Carson and others, the ships were loaded and unloaded by a mixed labor force. In total, during the 15 months during which this arrangement existed (from June 1981 through September 1982), UTI saved at least $546,000 in wages by using the lower paid warehouse laborers for work generally done using deep-sea laborers. The district court found that Carson, who signed the union contract with UTI, received a payoff for arranging this utilization of labor.
Based on these findings, the district court concluded that Carson had violated the Taft-Hartley Act, 29 U.S.C. Sec. 186(b), which makes it unlawful for any labor representative to "request, demand, receive, or accept ... any money or thing of value" from an employer. 29 U.S.C. Sec. 186(b)(1).
Meals and Entertainment: The government presented the district court with evidence from the Waterfront Commission audit report documenting occasions on which employers of ILA labor paid for Carson's meals and entertainment. The district court found that the acceptance of such meals and entertainment also violated the Taft-Hartley Act.
Embezzlement of Funds: In 1982, Carson was elected General Organizer of the ILA International. Although his new position required that he spend up to 80 percent of his Creating a Climate of Fear: Finally, the district court found that Carson displayed his organized crime associations to union members, and that the members were influenced to accept his leadership of the union by their knowledge of these ties. In this way, the district court found that Carson used intimidation and fostered an environment of fear in order to suppress the democratic rights of union members, in violation of 29 U.S.C. Sec. 501(a).
working time at this new position, Carson did not relinquish his position as the secretary-treasurer of Local 1588. His salary from the Local decreased slightly, but still exceeded $50,000. At about the same time, Carson made William Fullam a full-time officer of Local 1588, raising Fullam's salary to match his own. Thus, Carson's elevation to a position in the ILA International thereby caused a substantial increase in Local 1588's total outlay for union officers--from $99,421 in 1981 to $131,628 in 1983. This increase in salary expense, exceeding 30 percent over three years, was made without the required approval of the membership of Local 1588. 4 The district court concluded that Carson's continued draw of virtually full
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