United States v. Stirone

• Decision Date: 05 December 1957
• Docket Number: Crim. A. No. 14871.
• Citation: 168 F. Supp. 490
• Parties: UNITED STATES of America v. Nicholas A. STIRONE.
• Court: U.S. District Court — Eastern District of Pennsylvania

168 F. Supp. 490

UNITED STATES of America v. Nicholas A. STIRONE.

Crim. A. No. 14871.

United States District Court W. D. Pennsylvania.

December 5, 1957.

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Vincent M. Casey, Pittsburgh, Pa., for defendant.

D. Malcolm Anderson, U. S. Atty., Hubert I. Teitelbaum, Asst. U. S. Atty., Pittsburgh, Pa., for United States.

MILLER, District Judge.

Following trial and conviction for a violation of § 1951 of Title 18 U.S.C.A., the defendant Nicholas Stirone has filed motions for arrest of judgment, for acquittal and, in the alternative, for a new trial. The substance of the single count indictment was that the defendant, a union official, obstructed, delayed and affected interstate commerce and the movement of materials in interstate commerce by the extortion of $31,274.13 from William G. Rider. The extortion was alleged to consist of the obtaining of money by defendant's wrongful imposition on the victim of a fear of economic loss. 18 U.S.C.A. § 1951 (b) (2). Rider, a supplier of ready-mixed concrete, had obtained a valuable subcontract to furnish the concrete requirements for the construction of a new plant at Allenport, Pennsylvania, for Pittsburgh Steel Corporation. The principal contractor on the project was Ragnar-Benson Company, which began construction in September 1951. Rider operated a batching plant at Belle Vernon, Pennsylvania, on the premises of the Duquesne Slag Products Company from which he was required to purchase the sand and slag aggregate used in manufacturing the concrete. According to the government contention, the defendant, in the company of Dierker, the president of Duquesne Slag Products Company, visited Rider at his batching plant shortly after September 13, 1951. It was alleged that while the three were seated in an automobile the defendant made an unlawful demand for payment of $.50 on every cubic yard of concrete furnished under the Ragnar-Benson contract as a price for Rider's continuing to hold the contract. Rider, called as a witness by the government, testified that when the demand was made he "got mad" and left the automobile after which Dierker joined him, persuading him to agree to the defendant's proposal and telling him that an adjustment would be made in the price of slag. Following Rider's consent to the proposal, defendant allegedly told him he would keep Rider out of labor trouble. Numerous checks were given to the defendant periodically from April 1952, until January 1954. The payments were entered on Rider's books as commissions. The defense countered with an alibi and with a contention that the payments represented true commissions as consideration for the defendant's agreement to use his influence with Ragnar-Benson to secure the subcontract mentioned above for Rider.

Conceding that the evidence must now be viewed in a light most favorable to the government, United States v. Migliorino, 3 Cir., 1956, 238 F.2d 7, 10, the defendant contends that the evidence produced by the government at the trial was not sufficient to support the verdict of guilty. He argues first that the alleged extortion was not shown to have affected, obstructed or delayed commerce in any substantial way and second, that the alleged extortion payments were not shown to have been made by Rider because of fear.

In the indictment it was charged that the defendant by his coercive actions obstructed, delayed and affected interstate commerce and the movement of materials and supplies—i. e., sand, in interstate commerce. It was then proved at the trial that sand used by Rider in manufacturing ready-mixed concrete and purchased from Duquesne Slag Products Company had without question been transported in interstate commerce, and secondly, that steel articles produced at the plant after construction had been transported in commerce to the centers of the appliance and automotive industries outside the State of Pennsylvania. A sufficient foundation for introduction of both kinds of proof was laid in the indictment.

Defendant's denial that interstate commerce was affected by his actions is based in part upon an argument that interstate commerce ended with the delivery of the sand in Pennsylvania; that the interstate character of the sand was lost when it was delivered to and stored by Duquesne Slag Products Company and Rider; and that the sand lost its identity as a separate article of commerce when it was mixed with other ingredients to form a new product, ready-mixed concrete. The conclusion is said to follow that the present prosecution is founded upon a forbidden attempt to exert federal control over purely local matters —manufacture of ready-mixed concrete and the performance of a building subcontract. The answer to defendant's contention is that the power of Congress to regulate commerce is plenary and the power to regulate includes the power to protect commerce "no matter what the source of the dangers which threaten it." National Labor Relations Board v. Jones & Laughlin Steel Corp., 1937, 301 U.S. 1, 37, 57 S.Ct. 615, 624, 81 L.Ed. 893. Racketeering affecting interstate commerce is clearly within the federal control, United States v. Green, 1956, 350 U.S. 415, 421, 76 S.Ct. 522, 100 L.Ed. 494, and commerce may be affected even though the actual movement of goods has ceased and the character of the goods altered in the hands of the consumer. Since the act of Congress was intended to insure the free flow of articles in interstate commerce, the only criteria which this court may properly employ to determine whether the act is applicable are whether the channels of interstate commerce have been used and whether the free passage of articles therein has been threatened. The court correctly told the jury that if the government's facts were believed, interstate commerce had been affected by the conduct of the defendant. Cf. United States v. Lowe, 3 Cir., 1956, 234 F.2d 919, 922-923, certiorari denied, 1956, 352 U.S. 838, 77 S.Ct. 59, 1 L.Ed.2d 56. That statement was based upon a premise that a deliberate act which tends to prevent articles from being used once they have reached their destination after being shipped in interstate commerce dams up the stream of commerce and delays, obstructs and affects interstate commerce as surely as though the same act had cut off the supply at its source. Nick v. United States, 8 Cir., 1941, 122 F.2d 660, 668, certiorari denied, 1941, 314 U.S. 687, 62 S.Ct. 302, 86 L.Ed. 550; Hulahan v. United States, 8 Cir., 1954, 214 F.2d 441, 445, certiorari denied, 1954, 348 U.S. 856, 75 S.Ct. 81, 99 L.Ed. 675.

Defendant also urges that the "new construction" doctrine prevents consideration of the interstate shipment of products manufactured at the plant following its completion in determining whether the extortion here affected interstate commerce. That doctrine appears no longer to be controlling in cases arising under the Federal Employers' Liability Act, 45 U.S.C.A. § 51 et seq., and the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., where it arose. Southern Pacific Co. v. Gileo, 1956, 351 U.S. 493, 76 S.Ct. 952, 100 L.Ed. 1357; Mitchell v. C. W. Vollmer & Co., Inc., 1955, 349 U.S. 427, 75 S.Ct. 860, 99 L.Ed. 1196. Nor was it considered in Hulahan v. United States, 8 Cir., 214 F.2d 441, under circumstances similar to the instant case. There is no reason for adopting so restrictive an interpretation of the act.

Aside from the question of federal jurisdiction, the issues affecting guilt under the statute are whether the victim was fearful, whether that fear was reasonable and whether the defendant knowingly made use of that fear to obtain the property of another. We turn to the argument that there was no showing that the payments were motivated by fear. "Fear" in the statutory sense of course includes a deliberately imposed fear of economic loss such as might result from an intentional interference with a valuable contract right. This proposition is well settled. Bianchi v. United States, 8 Cir., 1955, 219 F.2d 182, 189, certiorari denied, 1955, 349 U.S. 915, 75 S.Ct. 604, 99 L.Ed. 1249; United States v. Dale, 7 Cir., 1955, 223 F.2d 181, 183; United States v. Varlack, 2 Cir., 1955, 225 F.2d 665, 668-669; cf. Callanan v. United States, 8 Cir., 1955, 223 F.2d 171, 175, certiorari denied, 1955, 350 U.S. 862, 76 S.Ct. 102, 100 L.Ed. 764; Hulahan v. United States, 8 Cir., 214 F.2d 441. It is equally clear that the subjective mental state of the victim is a relevant and important subject for testimony in determining the presence or absence of the requisite fear. Nick v. United States, 8 Cir., 122 F.2d 660, 671; Callanan v. United States, 8 Cir., 223 F.2d 171, 174. It was shown that the defendant was a responsible and important union official. During the period involved, the defendant was president of Local No. 1058 of the International Hod Carriers, Building and Common Laborers Union of America; he was president of the Heavy Engineering, Railroad, Contracting and Highway Construction Council which acted as bargaining agent for unions composed of carpenters, operating engineers, laborers and teamsters; he was chairman and spokesman for the Laborers' District Council, the bargaining agent which represented numerous unions affiliated with the Hod Carriers International. His position was known to Rider. In prosecutions under the act, the victim may testify, as did Rider, to his state of mind and motive in meeting the unlawful demand. Bianchi v. United States, 8 Cir., 219 F.2d 182-190. Rider's declarations to his wife and his conduct following his return from the alleged shake-down interview could also have been considered by the fact-finding body. 2 Wigmore, Evidence § 661 (3d ed. 1940). Under the circumstances, it was for the jury to determine whether the payments were made by Rider, as the government contended, because of fear imposed by the defendant or, as argued by defendant, because of Dierker's...