People v. Newspaper and Mail Deliverers' Union of New York and Vicinity

• Decision Date: 19 June 1996
• Parties: The PEOPLE of the State of New York, Plaintiff, v. NEWSPAPER AND MAIL DELIVERERS' UNION OF NEW YORK AND VICINITY, Defendant.
• Court: New York Supreme Court

Page 760

649 N.Y.S.2d 760

170 Misc.2d 790

The PEOPLE of the State of New York, Plaintiff, v. NEWSPAPER AND MAIL DELIVERERS' UNION OF NEW YORK AND VICINITY, Defendant.

Supreme Court, New York County.

June 19, 1996.

B. Anthony Morosco, White Plains, for defendant.

Robert M. Morgenthau, District Attorney of New York County, New York City (Andrew M. Lankler, of counsel), for plaintiff.

HAROLD J. ROTHWAX, Justice.

The defendant Newspaper and Mail Deliverers' Union of New York and Vicinity (hereinafter "NMDU") has been indicted for a single count of enterprise corruption (Penal Law § 460.20) based on 81 pattern acts committed by individual unindicted NMDU officers, members, or agents acting together and with other unindicted co-conspirators who worked for the distribution departments at two newspaper companies and an independent distribution company with which the NMDU had collective bargaining agreements or who operated non-union "bootleg" companies with which the NMDU had no such agreements. Several of the unindicted co-conspirators, including some union members, are alleged to have ties to organized crime. The same grand jury which indicted the NMDU voted two separate indictments charging the various individual actors with enterprise corruption and/or the substantive crimes which make up 71 of the 81 pattern acts charged in the indictment against the NMDU.

The NMDU moves to dismiss the indictment as based on legally insufficient evidence to establish the liability of the labor union for the criminal acts alleged and as defective because the instructions on the union's liability were incorrect and inadequate. (C.P.L. §§ 210.20[1][a], [b], [c]; 210.35[3], [5] ). This is apparently the first time a labor union has been charged with criminal conduct as a person under New York Law.

Enterprise corruption is defined by P.L. § 460.20:

1. A person is guilty of enterprise corruption when, having knowledge of the existence of a criminal enterprise and the nature of its activities, and being employed by or associated with such enterprise, he: (a) intentionally conducts or participates in the affairs of an enterprise by participating in a pattern of criminal activity....

2. For purposes of this section, a person participates in a pattern of criminal activity when, with intent to participate in or advance the affairs of the criminal enterprise, he engages in conduct constituting, or, is criminally liable for pursuant to section 20.00 of this chapter, at least three of the criminal acts included in the pattern....

A labor union is an artificial entity which cannot act except through individuals. Therefore, for the NMDU to be prosecuted for enterprise corruption, it must be held vicariously liable for acts committed by its officers, members, or agents. The first issue is whether a labor union may ever be prosecuted as an artificial person for crimes defined by the Penal Law and, if so, whether the NMDU may be prosecuted for enterprise corruption.

P.L. § 10.00(7) defines "person" as "a human being, and where appropriate, a public or private corporation, an unincorporated association, a partnership, a government or a governmental instrumentality". This statute clearly states the legislative intent that an unincorporated association, such as a labor union, may be criminally liable under New York law. However, while the Legislature enacted a statute defining the scope of a corporation's criminal liability (P.L. § 20.20), it did not enact a statute defining the scope of an unincorporated association's criminal liability. This statutory lacuna has made it difficult if not impossible for the prosecution in this case to instruct the grand jury on the correct legal theory for a union's criminal liability and to do so in a meaningful way. Indeed, the NMDU's main argument is that the failure of the legislature to enact a statute defining the criminal liability of an unincorporated association demonstrates the legislature's intent to exclude such associations from criminal liability, notwithstanding the inclusion of unincorporated associations in the Penal Law definition of "person." This interpretation is erroneous.

The general rules of statutory construction require that a statute "must be read and given effect as it is written by the Legislature" and in accordance with the natural and ordinary meaning of the words. (Parochial Bus Sys., Inc. v. Bd. of Educ. of the City of New York, 60 N.Y.2d 539, 548-49, 470 N.Y.S.2d 564, 458 N.E.2d 1241 [1983], quoting Lawrence Constr. Corp. v. State of New York, 293 N.Y. 634, 639, 59 N.E.2d 630 [1944]; McKinney's Cons.Laws of N.Y., Book 1, Statutes §§ 92, 94). "In the course of construing a statute the court must assume that every provision thereof was intended for some useful purpose." (McKinney's Cons.Laws of N.Y., Book 1, Statutes, § 144; see People v. Gaskins, 171 A.D.2d 272, 279, 575 N.Y.S.2d 564 [2d Dep't 1991] ). The Penal Law's definition of most substantive crimes, including enterprise corruption, begins with the language "A person is guilty of...." Therefore, contrary to the defendant's claim, the inclusion of unincorporated associations within the definition of "person" evidences the clear intent of the Legislature that such associations may be liable for crimes defined by the Penal Law.

The failure to enact a statute defining the scope of the penal liability of an unincorporated association does not defeat the clear intent that liability be imposed. Every entity defined as a person under the Penal Law may be held liable "where appropriate" for criminal conduct defined by the Penal Law, except where such entity is specifically excluded from liability by the language of a specific penal statute. (See P.L. §§ 135.60[6]; 155.05[2][e][vi]; 215.50[3] [excluding certain labor union activity from the purview of coercion, extortion, and contempt statutes]; People v. Vizzini, 78 Misc.2d 1040, 359 N.Y.S.2d 143 [Sup.Ct., N.Y.County 1974] ).

The determination of whether it is "appropriate" to prosecute the NMDU as a person for enterprise corruption turns on two factors: whether a labor union is the type of unincorporated association for which the imposition of criminal liability is appropriate and whether enterprise corruption is the type of crime for which a labor union may appropriately be held accountable. In the commentary to section 2.07 of The Model Penal Code (1985 ed.), upon which the Penal Law is based in part, a distinction is made between "highly organized business associations operating entirely for the purpose of the economic gain of its members" for which "the same considerations justifying corporate responsibility might apply" and "loosely formed societies organized for social, religious, and charitable purposes to which such considerations will have no application." (Id. p. 334). A labor union is of the former type. Therefore, a modern labor union is an appropriate type of unincorporated association for imposition of criminal liability upon the association as a person.

Enterprise corruption (P.L. § 460.20) is also an appropriate crime for the imposition of liability upon a labor union. Nothing in the enterprise corruption statute exempts a labor union from prosecution for this crime. In the legislative findings section of the Organized Crime Control Act (OCCA) (P.L. § 460.00), of which the enterprise corruption statute is a part, the Legislature articulated that the purpose of the OCCA is not to "define what organized crime is" but to "define and criminalize what organized crime does." The Legislature specifically identified "labor racketeering" as one of the ways in which organized crime is operating in New York and concluded that:

The money and power derived by organized crime through its illegal enterprises and endeavors is increasingly being used to infiltrate and corrupt businesses, unions and other legitimate enterprises and to corrupt our democratic processes. This infiltration takes several forms with legitimate enterprises being employed as instrumentalities, injured as victims, or taken as prizes. Through such infiltration, the power of an enterprise can be diverted to criminal ends, its resources looted, or it can be taken over entirely, either on paper or de facto. Thus, for purposes of making both criminal and civil remedies available to deal with the corruption of such enterprises, the concept of criminal enterprise should not be limited to traditional criminal syndicates or crime families, and may include persons who join together in criminal enterprise ... for the purposes of corrupting such legitimate enterprises or infiltrating and illicitly influencing industries.

(P.L. § 460.00).

A labor union which is alleged to have been heavily infiltrated by organized crime to the point where many of its senior officers, members and agents are engaging in an organized pattern of criminal conduct in their daily conduct of union business cannot escape liability simply because the union is a legitimate association which includes many individual members who are not themselves criminals or affiliated with any organized crime activity. When a labor union has permitted itself to become the instrumentality of a criminal enterprise and its officers, members, or agents are conducting a significant portion of the union's daily business through a pattern of criminal activity for the purpose of illicitly influencing the industry within which the union operates, the labor union itself may be prosecuted as a member of the criminal enterprise, provided that the People can prove the requisite level of involvement sufficient to impose criminal liability on the organization as an entity. Nothing in this ruling detracts from the responsibility of the individual union officers, members, or agents for enterprise corruption or for the substantive crimes comprising the pattern acts (See People v. Sakow, 45 N.Y.2d 131, 408 N.Y.S.2d 27, 379 N.E.2d 1157 [1978] ).

While not...