Napoli v. U.S.
| Decision Date | 04 August 1994 |
| Docket Number | 93-2587,Nos. 1362,93-2594,93-2700,1365,93-2593,1364,1363,1366,s. 1362 |
| Citation | 32 F.3d 31 |
| Parties | Joseph P. NAPOLI, Marty Gabe, Dennis Rella, Alan Weinstein and Harold Fishman, Petitioners-Appellants, v. UNITED STATES of America, Respondent-Appellee. , and 93-2704. |
| Court | U.S. Court of Appeals — Second Circuit |
Joseph P. Napoli, pro se.
Martin J. Siegel, New York City, for petitioner-appellant Marty Gabe.
Richard E. Mischel, New York City, for petitioner-appellant Dennis Rella.
Ronald DePetris, New York City, for petitioner-appellant Alan Weinstein.
Steven R. Kartagener, New York City, for petitioner-appellant Harold M. Fishman.
Faith E. Gay, Sp. Asst. U.S. Atty., Brooklyn, NY (Zachary W. Carter, U.S. Atty. E.D.N.Y., Emily Berger, Asst. U.S. Atty., of counsel), for appellee.
Before: MESKILL, MINER and MAHONEY, Circuit Judges.
Petitioners-appellants Joseph Napoli, Harold Fishman, Marty Gabe, Dennis Rella and Harold Weinstein appeal from an August 31, 1993 order of the United States District Court for the Eastern District of New York (Sifton, J.), denying their motions, brought pursuant to 28 U.S.C. Sec. 2255, to vacate and set aside their convictions. Appellants were convicted, following a jury trial, of conducting, and of conspiring to conduct, the affairs of an enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. Secs. 1962(c) and 1962(d). In their section 2255 motions, appellants contended that the district court's charge on the element of section 1962(c) requiring that the defendant "conduct or participate, directly or indirectly, in the conduct" of the affairs of the RICO enterprise, a charge based upon the settled law of this Circuit, see United States v. Scotto, 641 F.2d 47 (2d Cir.1980), cert. denied, 452 U.S. 961, 101 S.Ct. 3109, 69 L.Ed.2d 971 (1981), was incorrect under the Supreme Court's recent decision in Reves v. Ernst & Young, --- U.S. ----, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993). The district court denied the motions, concluding that (1) there was no procedural bar to the habeas applications; (2) the charge given satisfied Reves; and (3) any error was, at most, harmless. For the reasons that follow, we affirm.
The convictions in this case arose from appellants' involvement in Morris J. Eisen, P.C., a large Manhattan law firm that specialized in personal injury suits. Napoli and Fishman were trial attorneys who were "Of Counsel" to the Eisen firm, with Napoli being the main trial attorney for the firm. Gabe, Rella and Weinstein were private investigators affiliated with the firm who assisted with trial preparation.
In our opinion affirming the convictions in this case, we summarized the evidence as follows:
The evidence at trial established that the defendants conducted the affairs of the Eisen law firm through a pattern of mail fraud and witness bribery by pursuing counterfeit claims and using false witnesses in personal injury trials, and that the Eisen firm earned millions in contingency fees from personal injury suits involving fraud or bribery. The methods by which the frauds were accomplished included pressuring accident witnesses to testify falsely, paying individuals to testify falsely that they had witnessed accidents, paying unfavorable witnesses not to testify, and creating false photographs, documents, and physical evidence of accidents for use before and during trial. The Government's proof included the testimony of numerous Eisen firm attorneys and employees as well as Eisen firm clients, defense attorneys, and witnesses involved in fraudulent personal injury suits. Transcripts, correspondence, and trial exhibits from the fraudulent personal injury suits were also introduced.
United States v. Eisen, 974 F.2d 246, 251 (2d Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1841, 123 L.Ed.2d 467 (1993).
The jury considered illegal acts committed in eighteen personal injury lawsuits in which the plaintiffs were represented by the Eisen firm. Appellants were found guilty of racketeering acts involving the following cases:
At trial, the district court charged the jury on the substantive RICO violation as follows:
[T]he prosecution must show that the defendant whose case you are considering knowingly and intentionally conducted or participated in the conduct of the affairs of the enterprise through a pattern of racketeering activity....
Simply put, the prosecution must prove that there is a meaningful connection between the pattern of racketeering activity and the affairs of the enterprise, that is, that the defendant knew of the existence of the enterprise and intended that its affairs be furthered by the defendant engaging in a pattern of racketeering activity.
....
The prosecution is not required to prove that the defendant participated in the management or control of the enterprise. The prosecution is, however, required to prove that the defendant's actions were related to the enterprise and that those acts were known to and were intended to further the affairs of the enterprise and did in fact further the affairs of the enterprise.
The prosecution need not prove, as the statute indicates, that the defendant directly participated in the conduct of the affairs of the enterprise. It must prove, however, that the defendant either directly or indirectly conducted or participated in the conduct of the enterprise's affairs through the pattern of racketeering activity.
J.A. at 33-34 (emphasis supplied).
The portion of the charge in which the district court instructed the jury that it need not find that the defendants participated in the management or control of the enterprise was, at the time it was given, a correct statement of the law of this Circuit under our decision in Scotto, 641 F.2d at 54. None of the appellants challenged the charge. On direct appeal, appellants raised numerous challenges to their convictions, all of which were rejected by this Court in an August 17, 1992 opinion. 974 F.2d 246.
On October 13, 1992, Reves v. Ernst & Young, --- U.S. ----, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993), was argued to the Supreme Court, which rendered its decision in that case on March 3, 1993. Settling a split among the circuits, compare Bennett v. Berg, 710 F.2d 1361, 1364 (8th Cir.) (en banc) (), cert. denied, 464 U.S. 1008, 104 S.Ct. 527, 78 L.Ed.2d 710 (1983) with Bank of Am. Nat'l Trust & Sav. Assn. v. Touche Ross & Co., 782 F.2d 966, 970 (11th Cir.1986) ( same test), and overruling in part our decision in Scotto, the Court answered in the affirmative the question "whether one must participate, in the operation or management of the enterprise itself to be subject to liability under [18 U.S.C. Sec. 1962(c) ]." --- U.S. at ----, ---- - ----, 113 S.Ct. at 1166, 1172-73.
None of the petitioners, except Napoli, challenged the propriety of the jury charge on direct appeal. Napoli apparently noted in his reply brief that certiorari had been granted in Reves. He also noted this fact in his petition for rehearing to this Court and in his petition for certiorari. On April 8, 1993, about one month after the Court decided Reves, Fishman apparently filed a supplemental petition for certiorari, 1 requesting that Reves be applied to his case. The Supreme Court denied each of appellants' petitions for certiorari. --- U.S. ----, 113 S.Ct. 1841, 123 L.Ed.2d 467 (Apr. 19, 1993) (Napoli, Rella, Weinstein and Fishman); --- U.S. ----, 113 S.Ct. 1619, 123 L.Ed.2d 178 (Mar. 22, 1993) (Gabe).
During the Summer of 1993, appellants moved the district court, pursuant to 28 U.S.C. Sec. 2255, to vacate and set aside their convictions, arguing that the district court's charge was incorrect in light of Reves. On August 28, 1993, the district court denied the motions, finding that (1) there was no procedural bar to the section 2255 applications; (2) the charge given satisfied Reves; and (3) any error was, at most, harmless. This appeal followed.
Under section 1962(c), it is illegal "for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt." Reves involved a civil RICO action brought by the trustee in bankruptcy of a farming cooperative against outside accountants who allegedly filed false financial statements for the cooperative, the charged enterprise. The district court in that case dismissed the section 1962(c) claim because the plaintiffs had failed to demonstrate that the accountants had participated in the operation or management of the enterprise, as required under the Eighth Circuit's interpretation of the provision.
The Supreme Court agreed with the Eighth Circuit's interpretation. First, the Court concluded that the word "conduct," as it was used in the provision, required that the defendant exercise some degree of direction over the affairs of the enterprise. --- U.S. at ---- - ----, 113 S.Ct. at 1169-70. The Court then reasoned,
Once we understand the word "conduct" to require some degree of direction and the word "participate" to require some part in that direction, the meaning of Sec. 1962(c) comes into focus. In order to "participate, directly or indirectly, in the conduct of such enterprise's affairs," one must have some part in directing those affairs. Of course, the word "participate" makes clear that RICO liability is not limited to those with primary responsibility for the enterprise's affairs, just as the phrase "directly or...
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