U.S. v. Russo

Citation708 F.2d 209
Decision Date20 May 1983
Docket Number80-5054 and 80-5055,Nos. 80-5052,s. 80-5052
Parties113 L.R.R.M. (BNA) 2658, 97 Lab.Cas. P 10,174, 13 Fed. R. Evid. Serv. 389 UNITED STATES of America, Plaintiff-Appellee, v. James A. RUSSO; Vincent Meli; Roby G. Smith, Defendants-Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

Edward Sanders (argued), Detroit, Mich., for defendant-appellant in No. 80-5052.

Leonard R. Gilman, U.S. Atty., Detroit, Mich., Sheldon N. Light (argued), John L. Newcomer, Detroit, Mich., for United States.

William J. Weinstein (argued), Weinstein, Kroll & Gordon, Marc I. Shulman, Southfield, Mich., for defendant-appellant in No. 80-5054.

Richard M. Lustig (argued), Lustig & Friedman, Southfield, Mich., for defendant-appellant in No. 80-5055.

Before MARTIN, Circuit Judge, BROWN, Senior Circuit Judge, and HOLSCHUH, * District Judge.

BAILEY BROWN, Senior Circuit Judge.

Appellants, James A. Russo, Vincent Meli, and Roby Smith, were charged in a two-count indictment with conspiracy to violate and a substantive violation of the Hobbs Act, 18 U.S.C. Sec. 1951. 1 The indictment charged that the appellants, who were an officer and an employee of J & J Cartage Company and a union local business agent, conspired to and did in fact obstruct, delay and affect interstate commerce by threatening employees of the Company with economic loss and thereby forced them to pay J & J Cartage Company's contributions to a union pension and welfare fund. 2

Appellants were convicted on both counts and have appealed, claiming numerous errors. We overrule appellants' claims and affirm their convictions.

BACKGROUND

The J & J Cartage Company was a corporation engaged in the business of hauling raw steel from the Detroit waterfront to plants and warehouses in the metropolitan Detroit area. Appellant James Russo, along with Joseph Cusmano, 3 was part owner of the Company, holding fifty percent of the stock. Appellant Vincent Meli was an employee of the Company, employed both as a public relations person and as a negotiator for the Company. Roby Smith was a business agent of Local 299 of the International Brotherhood of Teamsters, which, at the times pertinent to these proceedings, represented the Company's employees.

J & J Cartage Company employed approximately forty truck drivers to haul steel. The equipment used to haul the steel belonged in part to the Company and in part to the individual drivers. Some drivers owned both the tractor and trailer, some owned only the tractor, and some did not own either. Drivers who provided the equipment used to haul the steel were known as "owner-operators."

During the time of the conspiracy alleged in the indictment, the Company was party to collective bargaining agreements with Local 299 of the International Brotherhood of Teamsters, the bargaining representative of Company employees. The basic collective bargaining agreement for the trucking industry was the National Master Freight Agreement, which was supplemented regionally by both the Central States Area Local Cartage Supplemental Agreement and by a special rider known as the Local Cartage Steel Rider. Instead of minimum hourly rates of pay, as set forth in the National Master Freight Agreement, the Local Cartage Steel Rider established a system for paying drivers a percentage of the gross amount paid to the Company for the loads of steel actually hauled.

Specifically, Article 2 of the Local Cartage Steel Rider provided that owner-operators were to be paid not less than 75% of the gross earnings, while drivers other than owner-operators were to receive no less than 60% of the gross. Articles 54 and 55 of the Central States Area Local Cartage Supplemental Agreement provided that the employer was to contribute to the Central States Southeast and Southwest Areas Health and Welfare Fund, as well as to the Pension Fund. Article 7 of the Rider provided that: "It shall be unlawful and illegal for Health and Welfare and/or Pension payments to be deducted from Owner-Operator's gross earnings."

It is undisputed that sometime in 1972 some of the Company's drivers organized a grievance committee which prepared a list of the drivers' grievances. The drivers sought, among other things, to have the Company pay social security taxes and make contributions to the Teamster health and welfare and pension plans with respect to them, as expressly required under the collective bargaining agreement. The grievances were presented to both the Company and to appellant Roby Smith, the Teamster business agent assigned to represent the Company's drivers.

In an attempt to resolve some of the employees' grievances, the Company management

called a general meeting of the drivers on November 26, 1972. Appellants Russo and Meli, along with two other Company representatives, appeared on behalf of the Company. According to several of the drivers, the Company proposed that 15% of the gross earnings of each driver be deducted to cover the costs of the drivers' demands. This proposal was voted down. The November 26, 1972 meeting was adjourned with no agreement having been reached between management and the employees

The Company called a second general meeting between management and the employees on March 25, 1973. At this time the Company presented a new proposal to the drivers: in return for an 11% "service charge" taken from the drivers' gross earnings, the Company would meet its obligations under the collective bargaining contract. The Company explained that, after deducting the 11% service charge, the amount available for division between the Company and a driver would equal 89% of the gross. The drivers overwhelmingly voted against the 11% proposal by a show of hands.

After the meeting of March 25, the Company's president, Joseph Cusmano, called each of the drivers individually into his office, and through promises, threats of economic loss, and misrepresentation, procured their signatures on a Supplementary Agreement providing for the 11% deduction discussed above. The agreement was later signed by appellant Roby Smith in his capacity as the representative of Local 299. This 11% "service charge" became effective on June 3, 1973, and continued in effect until on or about April 10, 1974.

There was testimony at trial that appellant Meli had a reputation as being a part of the Mafia, this being admitted in evidence to show the state of mind of the drivers when they agreed to the deduction of the "service charge." There was also evidence that appellant Smith failed to process grievances and acted in cooperation with the Company in approving this supplemental agreement that was contrary to and invalid under the collective bargaining agreement.

The first trial of appellants Meli, Russo, and Smith was declared, after several weeks, a mistrial due to the death of the trial judge, the Honorable Lawrence Gubow. The case was reassigned to the Honorable Patricia J. Boyle.

As stated, all three appellants were tried and convicted by a jury on both counts. The court sentenced each appellant to three years imprisonment for each count, to be served concurrently. Appellants Meli and Russo were fined $10,000.00 for each count of the indictment, while Smith was ordered to pay a fine of $5,000.00 for each count.

I

Appellants contend that there was, at trial, a constructive amendment of the indictment. They contend, and the Government agrees, that the indictment charges only an extortion by threats of economic loss and does not charge an extortion by threats of physical violence. 4 Appellants further contend that this constructive amendment was effected because of the admission of evidence that appellant Meli had a reputation as being connected with the Mafia, which could only connote physical violence, and because the charge allowed a finding of extortion by means of threats of physical violence.

As stated (n. 3 at p. 211), Cusmano's trial was severed, and he was tried separately prior to the trial of these appellants. There, the charge to the jury clearly allowed a finding of extortion by threat of physical violence as well as by threat of economic loss. Cusmano's conviction was reversed on the ground that the indictment was constructively amended at trial. As we read this court's opinion in Cusmano's case, the court did not hold that the admission of

proof as to Meli's reputation of Mafia connections constructively amended the indictment; rather, it held the indictment was so amended because the charge to the jury at Cusmano's trial specifically allowed a finding by the jury of extortion by threats of physical violence as well as by threats of economic loss. After quoting from the charge to such effect, the opinion in Cusmano then states

We cannot know whether the grand jury would have included in its indictment an allegation of extortion through threats of physical violence. The admission of evidence of such extortion, together with the trial court's instructions, indicate that this might have been the basis of Cusmano's conviction. If so, he was convicted on charges the grand jury never made against him. This was fatal error. [citations omitted.]

659 F.2d at 719.

On the contrary, the charge in the instant case made clear that the alleged extortion to be considered by the jury was extortion by threats of economic loss. In this connection the court charged:

Fear is a state of anxious concern, alarm or apprehension of anticipated harm. It does not necessarily refer to physical fear or fear of violence. It includes fear of economic loss. It exists if you find beyond a reasonable doubt that by threats of the defendant, fear of economic loss was created in the victim's mind, or that the defendants knowingly and willfully used the victim's fears of economic loss; and that under the circumstances it was reasonable for the victim to have such fear; and that the defendant made use of such fear to extort or attempt to extort money.

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