U.S. v. Gaudreau

• Decision Date: 17 October 1988
• Docket Number: Nos. 87-2428,87-2432,s. 87-2428
• Parties: RICO Bus.Disp.Guide 7054 UNITED STATES of America, Plaintiff-Appellant, v. Carrie Renee GAUDREAU and Conrad Paul Gaudreau, aka Joseph Gaudreau, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 357

860 F.2d 357

RICO Bus.Disp.Guide 7054

UNITED STATES of America, Plaintiff-Appellant, v. Carrie Renee GAUDREAU and Conrad Paul Gaudreau, aka Joseph Gaudreau, Defendants-Appellees.

Nos. 87-2428, 87-2432.

United States Court of Appeals Tenth Circuit.

Oct. 17, 1988.

Rehearing Denied Jan. 9, 1989.

Gerald J. Rafferty, Asst. U.S. Atty., Denver, Colo. (Robert N. Miller, U.S. Atty., and Bruce F. Black, Asst. U.S. Atty., Denver, Colo., were also on the brief), for plaintiff-appellant.

Charles Szekeley, Asst. Federal Public Defender, Denver, Colo. (Michael G. Katz, Federal Public Defender, Denver, Colo., was also on the brief), for defendant-appellee Carrie Gaudreau.

Jeffrey S. English, Lakewood, Colo., for defendant-appellee Conrad Paul Gaudreau.

Duane Woodard, Atty. Gen., Charles B. Howe, Deputy Atty. Gen., Richard H. Forman, Sol. Gen., and David L. Saine, Asst. Atty. Gen., Denver, Colo., filed a brief, for the State of Colo., as amicus curiae.

Before HOLLOWAY, Chief Judge, and McKAY and TACHA, Circuit Judges.

HOLLOWAY, Chief Judge.

This appeal involves a constitutional challenge to Colorado's commercial bribery statute, Colorado Revised Statutes Secs. 18-5-401(1)(a) and (1)(d) (1986), when used as a component of a RICO prosecution. The defendants-appellees Carrie and Joseph Gaudreau, the remaining defendants involved on this appeal, argue that the state statute's prohibition of a "knowing violation of a duty of fidelity" is unconstitutionally vague and therefore cannot form the basis of a racketeering charge. The district court agreed and dismissed the RICO counts of the indictment. 667 F.Supp. 1404. The government appeals. We reverse.

I.

Oscar Lee was variously Vice-President, Assistant Vice-President, and Executive Assistant Vice-President of the Electrical Production Division of Public Service Company of Colorado (Public Service). Superseding Indictment, Introduction, p 1. In each of these positions Mr. Lee had the authority to approve contracts for the purchase of goods and services by the Electrical Production Division of Public Service. Id. at p 24. Defendant Carrie Gaudreau was variously Secretary and Administrative Assistant to the Vice-President of the Electrical Production Division and Production Coordinator of Public Service. Id. at p 3. Defendant Joseph Gaudreau, Carrie's father, was the manager of the Denver office of Zachary Industries, a supplier to Public Service. Id. at p 4.

In essence, the indictment against the Gaudreaus alleges ¹ that Mr. Lee and the Gaudreaus agreed that Mr. Lee would accept money in exchange for awarding Public Service contracts to certain suppliers, in violation of Colorado's commercial bribery statute. That statute provides:

(1) A person commits a class 5 felony if he solicits, accepts, or agrees to accept any benefit as consideration for knowingly violating or agreeing to violate a duty of fidelity to which he is subject as:

(a) Agent or employee; or ...

(d) Officer ... of an incorporated association.

Colo.Rev.Stat. Sec. 18-5-401 (1986). ²

This alleged agreement between Mr. Lee and the Gaudreaus allegedly amounted to a conspiracy to conduct the affairs of Public Service through a pattern of racketeering activity ³ in violation of 18 U.S.C. Sec. 1962(d), generally known as the Racketeer Influenced Corrupt Organizations Act (RICO). ⁴

The Gaudreaus moved to dismiss the indictment on the ground that violations of the Colorado statute cannot serve as predicate acts for a RICO charge because the state statute is unconstitutionally vague and thus violates the Due Process Clause of the Fourteenth Amendment. The district court held that:

Subsections (1)(a) and (1)(d) of the Colorado commercial bribery statute, C.R.S. Sec. 18-5-401, are void for vagueness, both facially and as applied in this case. Because alleged violations of that statute are the predicate offense for the RICO violations, Counts One and Two of the indictment must be dismissed.

667 F.Supp. at 1414. The government appeals.

II.

The void-for-vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement. Kolender v. Lawson, 461 U.S. 352, 357, 103 S.Ct. 1855, 1858, 75 L.Ed.2d 903 (1983). The same facets of a statute usually raise concerns of both fair notice and adequate enforcement standards. Hence the analysis of these two concerns tends to overlap. The Supreme Court, however, while recently recognizing the second concern as more important, continues to treat each as an element to be analyzed separately. See id. at 357-58, 103 S.Ct. at 1858.

The degree of specificity which the Constitution demands depends on the nature of the statute. Criminal statutes must be more precise than civil statutes because the consequences of vagueness are more severe. ⁵ Further, a scienter requirement may mitigate a criminal law's vagueness by ensuring that it punishes only those who are aware their conduct is unlawful. ⁶ Also, regulatory statutes governing business activities may be less precise because the conduct proscribed is usually in a narrow category and the regulated enterprise may have the ability to clarify the meaning of the regulation by inquiring of an administrative agency or resort to an administrative process. ⁷ Finally, the Constitution demands more clarity of laws which threaten to inhibit constitutionally protected conduct, especially conduct protected by the First Amendment. ⁸ The defendants have not argued, nor do we perceive, that the Colorado commercial bribery statute threatens to chill constitutionally protected conduct. Nevertheless, the statute imposes criminal penalties and is not merely a business regulation. "[C]riminal responsibility should not attach where one could not reasonably understand that his contemplated conduct is proscribed." United States v. National Dairy Products Corp., 372 U.S. 29, 32-33, 83 S.Ct. 594, 598, 9 L.Ed.2d 561 (1963).

We address two preliminary issues. The Gaudreaus argue that the statute is unconstitutional on its face and as applied to them. Their facial challenge is inappropriate. Facial challenges are proper in two circumstances. First, a statute may be challenged on its face when it threatens to chill constitutionally protected conduct, ⁹ especially conduct protected by the First Amendment. If a statute is so vague that it can reasonably be interpreted to prohibit constitutionally protected speech as well as conduct the state may constitutionally forbid, people may choose to refrain from speaking rather than challenge the statute's constitutionality in their criminal prosecution. Thus, freedom of speech will be chilled. We allow a person who is prosecuted for conduct which the state may constitutionaly forbid to challenge the statute as vague on its face, rather than restricting him to challenging it as applied to his conduct, because those who refrain from speech will never have a chance to make their claims in court. In this way the claims of those who would be silenced are heard. Vagueness and overbreadth challenges are similar in this respect. Kolender, 461 U.S. at 358-59 n. 8, 103 S.Ct. at 1859 n. 8.

Second, a facial challenge to the constitutionality of a statute may in some instances be appropriate on pre-enforcement review. In a declaratory judgment action no one has been charged so the court cannot evaluate the statute as applied. In these cases, the challenger may attempt to facially attack the statute as "vague in all of its applications." Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 497, 102 S.Ct. 1186, 1193, 71 L.Ed.2d 362 (1982). If a statute is vague in all its applications then it will necessarily be vague "as applied" in every case. The statute would thus be void on its face. On the other hand, since the Colorado statute challenged here does not threaten to chill constitutionally protected conduct, and has been applied to the challengers, we hold that we must examine the statute as applied for vagueness in light of the conduct with which the Gaudreaus are charged. ¹⁰

As for the second preliminary issue, a federal court evaluating a vagueness challenge to a state law must read the statute as it is interpreted by the state's highest court. ¹¹ In People v. Lee, 717 P.2d 493, 496 (Colo.1986), the Colorado Supreme Court interpreted the statute's phrase "duty of fidelity" to mean "duty of loyalty" as the term has been defined at common law. ¹² We therefore evaluate the statute for vagueness in light of that interpretation. ¹³

A. Fair Notice

We turn now to the first element of our vagueness analysis, the fair notice question. The Supreme Court has stated the test as follows: "As generally stated, the void-for-vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited...." * Kolender, 461 U.S. at 357, 103 S.Ct. at 1858.

The Gaudreaus argue that the statute did not give them fair notice that their conduct was prohibited because they could have discovered that Mr. Lee's duty of loyalty forbade him from taking bribes only by consulting cases, other statutes, and treatises. They say that while the statute may give notice to an ordinary lawyer, it does not give notice to an ordinary layman. Defendant Carrie Gaudreau argues that "the language contained in the statute itself must define the crime." Brief of Appellee Carrie Gaudreau at 13 (emphasis in original).

Such broad arguments are foreclosed by decisions of the Supreme Court. The Court has consistently held statutes sufficiently certain when they employ words or phrases with "a well-settled common law meaning, notwithstanding an element of degree in the definition as to which estimates might differ...." Connally v. General Construction Co., 269 U.S. 385, 391, 46...