United States v. Caldes, 71-2261.

• Decision Date: 10 February 1972
• Docket Number: No. 71-2261.,71-2261.
• Citation: 457 F.2d 74
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Theodore CALDES and Wellaine M. Lowery, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

457 F.2d 74 (1972)

UNITED STATES of America, Plaintiff-Appellee, v. Theodore CALDES and Wellaine M. Lowery, Defendants-Appellants.

No. 71-2261.

United States Court of Appeals, Ninth Circuit.

February 10, 1972.

George Kaufmann (argued), Washington, D. C., Michael E. Benchoff, Phoenix, Ariz., for defendants-appellants.

Charles C. Ruff, Dept. of Justice, Washington, D. C. (argued), Richard K. Burke, U. S. Atty., Phoenix, for plaintiff-appellee.

Before JERTBERG and WRIGHT, Circuit Judges, and WILLIAMS, District Judge.^*

DAVID W. WILLIAMS, District Judge:

Defendants were indicted in the District Court of Arizona and charged in a two count indictment with violating the Hobbs Act, 18 U.S.C. § 1951. They appealed after being convicted before a jury of both counts. Caldes was a field representative of AFL-CIO and Lowery was president of the Laundry and Dry-cleaning International Union, Local 369. The Laundry Workers Union and Mission Linen Supply Company (Mission) were involved in protracted negotiations for a collective bargaining agreement and these efforts were still in progress at the times of the incidents which were the basis of this indictment.

Mission is a corporation which engages in interstate commerce and is in the business of renting linen and other supplies to hospitals, hotels and other institutions. Jurisdiction is found in 28 U.S.C. §§ 1291 and 1294.

The Hobbs Act provides in pertinent part that:

"(a) Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in interstate commerce, by robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be fined not more than $10,000 or imprisoned not more than twenty years, or both.

"(b) As used in this section—

(1) * * *

(2) The term `extortion\' means the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right." 18 U.S.C. § 1951.

Appellants were accused of two incidents. On October 24, 1969, they followed one Ramon Herrera, a driver for Mission, whose job was to deliver linen to Mission's customers. When Herrera stopped for a red light he saw Lowery throw an object into his truck from a car driven by Caldes. Herrera returned the truck to the company's plant and found a green substance which appeared to be a dye, along with broken glass on the floor of the truck. A malicious mischief report was filed with local police but no charges were instituted in state court. The FBI began surveillance of the appellants and on December 3, 1969, witnessed the events that formed the accusation of count 2. That afternoon FBI agents saw Caldes and Lowery drive to the Georgian Court Nursing Home, a customer of Mission. One agent testified that Caldes ran from the car toward the nursing home and then quickly returned to the car and drove away. The agent found a laundry hamper sitting in a breezeway directly in line with Caldes' path of travel full of line discolored by a green dye. A glass jar containing an identical substance was later found in Caldes' car along with a list of Mission's customers and the numbers of its trucks.

The damage done in each instance was minimal and appellants seem not to seriously dispute their involvement in the mischief. They raised two points on appeal:

(1) did the Government establish beyond a reasonable doubt that defendants acted in furtherance of a plan to pressure the company into a collective bargaining agreement through the wrongful use of force, and

(2) does the Hobbs Act reach violence to property as a part of a plan to extort a thing of value in the form of a collective bargaining agreement covering wages, hours and working conditions of wanted employees?

The first can be disposed of quickly. There was a labor dispute which had gone on for almost two years involving Mission; defendants were labor leaders who were seen on two instances committing acts of vandalism against Mission's property of the type that could logically be inferred as "getting a message" to the company that if it did not settle, the level of violence might escalate. We are obliged to look at the evidence in the light most favorable to the Government in this criminal appeal, Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942) and United States v. Nelson, 419 F.2d 1237 (9th Cir., 1969), and in a real sense there was ample evidence from which the jury could logically conclude that the violence was intended to pressure the company into an agreement.

The second claim presents more difficulty, and we conclude we must reverse upon the ground that the Act was not intended to reach low level violence committed in connection with bona fide labor disputes between employers and employees. In this, we try to carefully distinguish this case from one in which acts of extortion are committed to compel an employer to take on unwanted workers (featherbedding) or to pay for work which the worker has no intention of performing. Our research has not led to the discovery of another federal appellate court that has addressed itself to this issue, but a recent district court case seems not inconsistent with our conclusions.¹

The Hobbs Act was enacted in 1946 to correct what certain members of Congress felt to be an error created by the holding in United States v. Local 807, etc., 315 U.S. 521, 62 S.Ct. 642, 86 L.Ed. 1004 (1942). Congressman Hobbs first introduced his bill two weeks after the filing of the opinion in Local 807. That case construed portions of the Anti-racketeering Act of 1934, known as the Copeland Act, 48 Stat. 979 carried forward in 18 U.S.C. § 420a. Local 807 of Teamsters were truck drivers and helpers in New York City. They resented out-of-state drivers coming into New York to make deliveries of goods brought in from other shipping points and they stationed themselves at the entry points connecting New York City to bordering states and stopped trucks seeking to deliver merchandise to New York consignees and by threat and actual use of force and violence ordered the drivers to let a Local 807 man deliver the load from them into the city or pay the union equivalent of a day's wages. If the foreign driver paid the local member, his truck would be taken into the city, unloaded, reloaded and returned to him for the return trip. Often, after he paid the tribute, the foreign driver was compelled to drive his truck into New York as the local member would refuse to perform the service even when requested to so do.

Section 2(a) of the Anti-racketeering Act denounced the person who "in connection with . . . any act . . . affecting trade or commerce . . . —

(a) Obtains or attempts to obtain, by the use or attempt to use or threat to use force, violence, or coercion, the payment of money or other valuable considerations, or the purchase or rental of property or protective services, not including, however, the payment of wages by a bona-fide employer to a bona-fide employee." (emphasis added).

Local 807 held that persons who offered to perform services for another and who demanded and received union wages for such offer were exempted by Section 2(a) of the Act from criminal liability even though their proffered services were rejected. The Court held that the determining criterion was not whether the victim paid the money with the intent to buy protection but whether the money was demanded without the intention of performing any service. Then the Court concluded that even when it is known that an employer does not need additional workers, violence and threats accompanying a sincere offer to work is not extortion.

Congressional reaction to the Local 807 decision was immediate and highly vocal. Many members saw the case as giving license to unions to use violence to exact wages as long as the laborer was willing to work. The legislative history of the Hobbs Act shows that the deliberate purpose of Congress was to eliminate Section 2(a) of the Anti-racketeering Act on which Local 807 turned, so as "to prevent the rendition of that sort of decision by any court in the future . . . ." remarks of Congressman Sumners, 91 Cong.Rec. 11909 (H.R. Dec. 12, 1945).

By eliminating Section 2(a) however, Congress did not intend to eliminate traditional labor or union activity, albeit militant, which has as its object legitimate ends. The exclusion was not meant to provide impunity to the terroristic and extortionate activities of union members, but to protect union activity directed toward legitimate labor goals even when militantly pursued. It seems that the Local 807 decision went beyond the holding it was called upon to reach and beyond the intent of Congress, in condoning a union's engaging in violence as a means of getting wages so long as the union member was willing to work. This could be construed as permitting the use of robbery and extortion to bring about the hiring of unwanted, unneeded employees.

Conduct of this type was judicially frowned upon in United States v. Kemble, 198 F.2d 889 (3rd Cir.), cert. den. 344 U.S. 893, 73 S.Ct. 211, 97 L.Ed. 690 (1952). The defendant, a member of a New Jersey Truck Drivers Union, was convicted of employing actual and threatened violence against a driver not a member of defendant's local who had brought a load of merchandise by truck to New Jersey from another state. The defendant had sought to make the out-of-state driver hire a local member to unload his truck and pay a day's wages to him at union scale. The Court emphasized that the defendant was using extortion to bring about the hiring of an unwanted employee and held this to be a violation of 18 U.S.C. § 1951. Judge Hastie stated that he felt the Hobbs Act was broad enough to include the forced payment of wages where the money was for "imposed,...