United States v. Price, 12426.

• Decision Date: 07 July 1955
• Docket Number: No. 12426.,12426.
• Parties: UNITED STATES of America, Appellant, v. Lennis Luther PRICE, Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

224 F.2d 604 (1955)

UNITED STATES of America, Appellant, v. Lennis Luther PRICE, Appellee.

No. 12426.

United States Court of Appeals Sixth Circuit.

July 7, 1955.

Leo Meltzer, Washington, D. C., Warren Olney, III, Leo Meltzer, Washington, D. C., John C. Crawford, Jr., John F. Dugger, Knoxville, Tenn., on the brief, for appellant.

Charles H. Davis, Knoxville, Tenn., for appellee.

Before MARTIN, MILLER and STEWART, Circuit Judges.

STEWART, Circuit Judge.

Appellee was indicted on three counts for violating the so-called "Kickback" Act, 18 U.S.C. § 874. That statute reads as follows:

"Whoever, by force, intimidation, or threat of procuring dismissal from employment, or by any other manner whatsoever induces any person employed in the construction, prosecution, completion or repair of any public building, public work, or building or work financed in whole or in part by loans or grants from the United States, to give up any part of the compensation to which he is entitled under his contract of employment, shall be fined not more than $5,000 or imprisoned not more than five years, or both."

The first count of the indictment charged:

"* * * that during the period between October 8, 1953, and March 24, 1954, there was under construction, prosecution and completion in Roane County, Tennessee, a certain public building and public work known as the Kingston Steam Plant of the Tennessee Valley Authority, said construction, prosecution and completion being wholly financed by grants from the United States of America; that the defendant, Lennis Luther Price, was then and there employed as foreman in charge of lathers engaged on said construction;

"That on or about March 24, 1954, within the Northern Division of the Eastern District of Tennessee, the defendant did unlawfully induce one Rubel Estel Simmons, who was then and there employed as a lather on said construction, to give up the sum of One Hundred and Fifty Dollars ($150.00), a part of the compensation to which the said Rubel Estel Simmons was entitled under his contract of employment, in the following manner:

"The defendant did represent to the said Simmons that he was authorized and entitled to collect from the said Simmons the sum of $2.00 for every day that the said Simmons worked, for the purpose of paying such money to a labor organization, to wit, Local 255, Wood, Wire and Metal Lathers Union, for the issuance of a work permit to the said Simmons; but in fact, neither the defendant nor any other person was authorized to collect any sum of money from the said Simmons by said labor organization, for the issuance of a work permit or any other purpose; and the defendant did not make payment to said labor organization of the money so received, but converted it to his own use."

The other two counts of the indictment charged the same offense with respect to two other named employees.

In response to appellee's motion, the United States furnished a bill of particulars, stating, in part, as follows:

"2. The defendant did not have any authority to hire or fire employees on his lathing crew.

"3. The defendant\'s personal recommendation as to hiring of personnel would carry no weight. All employees at the Kingston Steam Plant have to complete a Tennessee Valley Authority Application and fulfill the other regular Tennessee Valley Authority requirements.

"The Tennessee Valley Authority would fire an employee on defendant\'s crew if the defendant advised the Tennessee Valley Authority that such employee should be fired for cause. The Tennessee Valley Authority, however, would first inquire of the employee if he had been treated fairly as an employee."

The district court granted appellee's motion to dismiss the indictment, stating in a memorandum opinion that appellee "was not vested with the power to interfere with the contractual relation between the employees from whom he is alleged to have wrongfully collected funds and their employer in relation to their respective contracts of employment." 127 F.Supp. 484.

Relying upon the cases of United States v. Carbone, 1946, 327 U.S. 633, 66 S.Ct. 734, and United States v. Laudani, 1944, 320 U.S. 543, 64 S.Ct. 315, 88 L. Ed. 300, the district court was of the view that "A reasonable construction to be placed upon the Act and upon the Supreme Court opinions herein mentioned is to the effect that the evil against which employees were intended to be protected was deprivation of some right which the employee had under his employment contract by the employer or persons placed in positions of authority by the employer, and that the Act was not intended to protect employees from racketeers within the ranks of labor or fellow-employees engaged in their own private schemes of blackmail." 122 F.Supp. 595.

From the district court's order granting appellee's motion to dismiss the indictment, the United States has brought this appeal under the provisions of 18 U.S.C.A. § 3731, sixth paragraph.¹

It is the government's contention that the district court misconstrued the indictment as implemented by the bill of particulars in concluding that it failed to allege that appellee was "vested with the power to interfere with the contractual relation between the employees * * * and their employer." The government further contends that the district court's conclusion that the reach of the Kickback Act is in effect limited to employers and those whom they have clothed with the authority to hire and discharge employees was erroneous.

As to the government's first contention, we agree that the indictment as implemented by the bill of particulars does allege some power on the part of the appellee to interfere with the relationship between the employees over whom he was placed as foreman and their employer. Though the appellee had no right himself either to hire or fire these employees, and was without power even to influence the decision as to hiring them, the employer "would fire an employee on defendant's crew if the defendant advised the employer that such employee should be fired for cause." In view of this allegation, we think that the district court's conclusion that appellee lacked "power to interfere with the contractual relation between the employees * * * and their employer" was incorrect. While it is true that the bill of particulars states that before discharging an employee upon appellee's advice the employer "would first inquire of the employee if he had been treated fairly as an employee," that fact falls short of obliterating appellee's influence upon the employment relationship.

The question thus becomes whether or not the statute is broad enough to cover a foreman without...