UNITED STATES v. TURKETTE
Legal provision: Racketeer Influenced and Corrupt Organizations
ORAL ARGUMENT OF MARK I. LEVY, ESQ., ON BEHALF OF THE PETITIONER
Chief Justice Burger: We'll hear arguments next in United States v. Turkette.
Mr. Levy, you may proceed when you are ready.
Mr. Levy: Thank you, Mr. Chief Justice, and may it please the Court:
This case is here on writ of certiorari to the United States Court of Appeals for the First Circuit.
Respondent was convicted by a jury on eight counts of substantive drug and mail fraud offenses and on one count of conspiracy under the Racketeer Influenced and Corrupt Organizations Act.
In brief, the evidence at trial, the sufficiency of which was not challenged, showed the Respondent organized and headed a criminal association that engaged in a continuing course of illegal activities for profit.
The Turkette group was in existence for more than a two year period and was involved in numerous offenses, including the theft and distribution of drugs, the commission and facilitation of mail fraud by arson and other means, and the bribery of police officers and witnesses to protect these illegal activities.
The group operated in a highly structured and sophisticated manner, in which different individuals performed specific assigned roles to further the group's venture.
The questions presented by our petition are whether the Racketeer Influenced and Corrupt Organizations Act excludes wholly illegitimate enterprises like Respondent's from the scope of its coverage, and if so, whether automatic reversal of Respondent's otherwise valid, non RICO convictions required on grounds of misjoinder.
Unidentified Justice: Well the First Circuit theory really was that these people were so totally illegal that they had to be acquitted, wasn't it?
Mr. Levy: I think that's correct.
And the Court below stands alone in reaching that anomalous result.
Unidentified Justice: Or was it that they were so well organized in their enterprise that--
Mr. Levy: I believe the holding of the Court below was that enterprises that are entirely and completely illegal are not within the scope of the principal anti racketeering statute in the federal criminal code.
That strikes us as an anomalous result, and every other Court of Appeals to consider the issue has concluded that RICO is not restricted to legitimate enterprises, but applies to illegitimate enterprises as well.
Nothing in the language of the statute distinguishes between legitimate and illegitimate enterprises.
On the contrary, the definition of enterprise states without qualification that enterprise includes any group of individuals associated in fact.
Similarly, the substantive provisions of RICO draw no distinction between legitimate and illegitimate enterprises, but refer broadly to any enterprise.
And Congress specifically reinforced the sweep of the statute by providing that the provisions of RICO shall be liberally construed to effectuate its remedial purposes.
In addition, despite the existence of an extensive definitional section for the key terms used in RICO, the statute offers no guidance whatever for defining the words legitimate and illegitimate the Respondent and amici seek to insert into the statute.
Unidentified Justice: --Under the First Circuit theory, on which side of the line would fall an enterprise that had an apparently legitimate front, that is, a truck line, or whatever, but was--
Mr. Levy: Well, I think that's difficult to--
Unidentified Justice: --was engaged 75 percent or 90 percent in shooting for hire, killing for hire, arson for hire and extortion and loan sharking.
Where would the First Circuit case take us?
Mr. Levy: --I don't think one knows with certainty, because the meaning of the terms legitimate and illegitimate are by no means self evident, and neither the statute nor the legislative history offer any guidance on the meaning of those terms.
Simply because Congress didn't have that concept in mind.
In your hypothetical, for example, as I understand it, it's impossible to know what are the salient considerations or the proportion of legal and illegal activities--
Unidentified Justice: You think that's irrelevant?
What the proportion is?
Mr. Levy: --We do, because we think both "legitimate" and "illegitimate" are within the statute.
And we think that the introduction of such an indefinite term as legitimate enterprise would complicate and protract RICO trials, and would lead to distinctions according to degree of legitimacy that are entirely unrelated to Congress' purpose to eradicate organized crime.
Unidentified Justice: In any event, it's common ground there has to be an enterprise.
Mr. Levy: It is common ground that there has to be an enterprise.
Unidentified Justice: And enterprise is defined in the statute how, where is it?
Mr. Levy: Relevant here, enterprise is defined as an entity consisting of a group of individuals associated in fact.
That's the statutory definition of enterprise under which this prosecution was brought.
Unidentified Justice: A corporation would be an enterprise.
Mr. Levy: A corporation would also be an enterprise.
Unidentified Justice: Or a corporate association.
Mr. Levy: A labor union would.
Unidentified Justice: Where is the statutory definition?
Mr. Levy: It's in Section 1961(4) which is reprinted in our Appendix to the petition.
Unidentified Justice: Thank you.
Well Mr. Levy, is there a difference between an illegal enterprise and the coverage under the Act of a group of persons who commit a pattern of racketeering activities, that is two predicate acts, is there a difference between the two?
Mr. Levy: Well, if I understand the question correctly I believe there is.
An enterprise is an entity as in this case, a group of individuals associated in fact.
Unidentified Justice: Well no, what I'm trying to get at is what distinguishes a group of persons who commit a pattern of racketeering activities, that is, two predicate acts from an illegal enterprise?
Mr. Levy: The enterprise is an entity looking to the common meaning of the word associate, and Congress used the word associate in the definition of entity, we think that means that the group of individuals had to join together to form a confederacy or a union for some common purpose or overall objective.
We think that's what the word associate means.
Therefore, if there were simply two predicate acts, that were unrelated to an enterprise, or simply isolated or sporadic criminal activities, then they would not violate the statute because there would be no enterprise.
Congress went on to--
Unidentified Justice: What do you think the statute means when it says enterprise includes any individual?
Mr. Levy: --I believe what that means is that an individual may be an enterprise, and--
Unidentified Justice: So one person could be prosecuted under RICO?
Mr. Levy: --I think that is conceivable.
Unidentified Justice: If he were carrying on an illegitimate... the illegitimate business of bank robbery?
Mr. Levy: Let me say that is not at issue in this case, and as far as I know, the government has never brought a case--
Unidentified Justice: Under the statutory definition do you submit that he could?
Mr. Levy: --I believe he could; if the person were engaged in a sole proprietorship of crime rather than a partnership in crime, it seems to me--
Unidentified Justice: If he were an individual entrepreneur bank robber he could be prosecuted under RICO?
Mr. Levy: --In some circumstances, for example--
Unidentified Justice: Well what circumstances?
Mr. Levy: --if he held himself out as being engaged in the business--
Unidentified Justice: No, he's not holding himself out.
That's just his way of life, he robs banks.
Mr. Levy: --And he does it repeatedly, using a similar plan.
If there were two people--
Unidentified Justice: What's this got to do with a similar plan?
If he is an individual--
Mr. Levy: --If two people--
Unidentified Justice: --enterprise includes any individual this says.
Mr. Levy: --That's correct.
Unidentified Justice: And that means that any person who is a repetitive offender can be prosecuted under RICO, does it?
Mr. Levy: Well, I think not necessarily.
It says that it might be but that it's not necessarily so.
If somebody commits two isolated--
Unidentified Justice: When I say can be prosecuted under RICO, I mean not necessarily.
Mr. Levy: --Yes.
I think that a single individual in some circumstances can be prosecuted under RICO, that's correct.
If the individual engaged in conduct that if it were done by two people, a partnership in crime, would be within the statute, we don't think Congress intended an immunity simply because one person did it.
Unidentified Justice: So any professional criminal in the sense that this is his business--
Mr. Levy: This is an organized criminal enterprise.
Unidentified Justice: --is a criminal enterprise for purposes of RICO.
Well how can you organize one person?
Mr. Levy: You can organize in the sense that you engage in a conduct in an organized ant recurring--
Unidentified Justice: Well an individual operates individually--
Mr. Levy: --That's right.
Unidentified Justice: --not through an organization.
Mr. Levy: That is correct in some circumstances.
Unidentified Justice: Well in every circumstance, isn't it?
Mr. Levy: If the individual is acting alone, that's right.
Unidentified Justice: Well, an enterprise includes any individual this says.
Mr. Levy: That's correct.
An individual is not excluded from the scope of the statute but--
Unidentified Justice: He's included.
Mr. Levy: --That is correct.
Unidentified Justice: But he violates 1962(c) when he commits two bank robberies.
Mr. Levy: No, I think that if he commits two bank robberies that are in the language used in the legislative history, sporadic or isolated, he commits the one year and five years later, bearing no relationship.
Unidentified Justice: And in the meantime he's a bank clerk.
Mr. Levy: For example.
I would doubt that that would fall under RICO.
Unidentified Justice: Where does the statute exempt?
Mr. Levy: That's a different problem.
Unidentified Justice: Say he commits two bank robberies, one on February 1st, one on March 1st.
Why doesn't that violate the statute?
Mr. Levy: It might well violate--
Unidentified Justice: Under 1962(c), isn't that directly covered?
Mr. Levy: --It might well violate the statute.
But as I say, it's a little hard to know since the government has never brought a prosecution against a single individual, to the best of my knowledge, and the provision simply hasn't been construed.
Unidentified Justice: Well I just wonder then, upon... your argument rests upon the statutory definition of enterprise, and enterprise includes any individual.
Mr. Levy: It does, and it also includes a group of individuals associating--
Unidentified Justice: Well it includes any individual, and--
Mr. Levy: --The statute does provide that.
Unidentified Justice: --And therefore, and yet the government has never utilized that against an individual?
Mr. Levy: To the best of my knowledge, they have not--
Unidentified Justice: Well the statute does define an enterprise as any individual, doesn't it?
Mr. Levy: --It does.
And a prosecution could be brought--
Unidentified Justice: Well then certainly you could, I suppose, one person could infiltrate another individual, I mean, if you couldn't be prosecuted for your own activities you could subvert an individual proprietorship of another.
Mr. Levy: --You might be able to, and that might fall within either subsections (a) or (b), depending on the method of infiltration.
Unidentified Justice: Kind of like the aliens?
Mr. Levy: I'm sorry?
Unidentified Justice: After your answers to my colleagues' questions, I get back to the question I asked you, Mr. Levy.
If an individual may be an enterprise and a group of persons who commit a pattern of activities, that is, two predicate acts, may also be an enterprise, then how... what is the difference between them and an illegal enterprise?
Mr. Levy: The fact that a group of individuals commit two illegal acts does not ipso facto establish a violation of the statute.
The two illegal acts, the pattern of racketeering activity have to occur in a conduct of an enterprise.
The word 1961(4)--
Unidentified Justice: Well I know, but you've already told us an individual may be an enterprise, a group of persons committing two predicate acts may be an enterprise.
Mr. Levy: --They may be, but they are not necessarily.
Unidentified Justice: Well then I still ask you what... how are either of those distinguished from "an illegal enterprise"?
Aren't they illegal enterprises?
Mr. Levy: Perhaps I didn't understand the question.
If the association in fact is formed solely to commit illegal acts and I think that's what the Court of Appeals had in mind when it spoke of an illegal or an illegitimate enterprise.
It's hard to know how that would be applied in a particular case to conclude--
Unidentified Justice: Well of course, what I'm getting at is, the First Circuit as I read their opinion, had the idea that to include an illegal enterprise within 1962(c) would make that section internally redundant.
Mr. Levy: --That was the suggestion of the First Circuit, that's correct.
Unidentified Justice: What I'm just trying to find out is is that idea wholly without merit?
Mr. Levy: We believe it is without merit; that there is nothing that makes the provisions redundant or internally inconsistent.
There is still the requirement that there be an enterprise or an entity and there is still the requirement that there be certain criminal acts.
It may well be true, and this may have been what the Court of Appeals had in mind, that the government's proof in a particular case will be much the same to show the pattern element of the offense and to show the enterprise element of the offense; the fact that people commit a series of offenses together may be a grounds for the jury to infer that they had joined together to form an association in fact that would satisfy the requirement of an enterprise.
But the fact that the government's proof may be the same on those two issues does not make them any less separate and distinct issues.
Unidentified Justice: Incidentally, while I have you interrupted, Mr. Levy, looking at 1961(4), what's the meaning of
"union or group of individuals associated in fact although not a legal entity. "
What's that supposed to mean?
Mr. Levy: Well I think the second clause of 1961(4) was designed to expand the reach of the word enterprise to include entities that are not in contemplation of law a separate and definable--
Unidentified Justice: Can you illustrate that?
Mr. Levy: --Well a union would be one example, I think.
Unidentified Justice: Well, no, they say... expressly a union... what's
"group of individuals associated in fact, although not a legal entity? "
Mr. Levy: Well I think if you had some informal group of individuals who formed a civic association or a bridge club or something like that, there would be no entity in the legal sense.
Unidentified Justice: This even reaches bridge clubs, RICO?
Mr. Levy: Excuse me?
Unidentified Justice: This even reaches bridge clubs, does it?
Mr. Levy: Not necessarily; they would still have to commit a pattern of racketeering activities and I assume most bridge players would not do that.
But they might well be an enterprise--
Unidentified Justice: But even as my brother White just suggested what if they play for money?
Mr. Levy: --And that were a violation of state law?
Unidentified Justice: Yes.
Mr. Levy: It's conceivable that the statute--
Unidentified Justice: The bridge club might be prosecuted, under RICO?
Mr. Levy: --Just as a large scale gambling syndicate would be.
I don't think--
Unidentified Justice: Just like it might be prosecuted now, under state law?
Mr. Levy: --It might be, or under the travel act, or the--
Unidentified Justice: Playing for money.
Mr. Levy: --I think that's right.
Unidentified Justice: Well, I suppose what is commonly called the Mafia is not a corporation or an association, but it would be covered here?
Mr. Levy: I think that's absolutely correct, and I think that's... certainly incongruous to think that Congress in passing the Racketeer Influenced and Corrupt Organizations Act didn't mean to take into account the Cosa Nostra or the Mafia in the prohibitions of the Act.
The reading of RICO I've just suggested to encompass illegitimate as well as legitimate enterprises, is fully consistent with and supported by the legislative history of the statute and the statute's purpose.
The legislative history nowhere indicates that Congress intended to limit the statute exclusively to the infiltration and corruption of organized or legitimate businesses... and to exclude racketeering activities pertaining to thoroughly unlawful operations as Respondent and amici urge.
Indeed, we can conceive of no reason and the Respondent and amici have offered none, why Congress would have wished entirely illegal businesses to be immune from the provisions of RICO.
Unidentified Justice: Well, it's not that they wished them to be immune from prosecution, but they... Congress might rationally have thought entirely illegitimate businesses are already prohibited by other criminal laws.
Mr. Levy: I don't doubt that Congress could have drafted the statute in many ways, but I think there's--
Unidentified Justice: It wouldn't have been totally irrational for Congress to say well, since those are covered by existing laws, the new law will try to reach something else.
Mr. Levy: --By definition, any prosecution under RICO has to involve the violation of some other statutes.
Congress passed RICO to supplement those existing statutes because of what it found to be inadequacies--
Unidentified Justice: And because of its primary concern, and the legislative history is certainly replete with this, that the primary concern of Congress... this doesn't totally undercut your argument at all... was, the infiltration of legitimate business by organized crime.
Mr. Levy: --Nobody doubts that that was a principal concern of Congress.
But it was by no means the exclusive concern, and the legislative history doesn't indicate it was.
Unidentified Justice: But your point is, the Mafia which is, does not purport to be a legitimate business, would be covered if their whole objective and stated purpose was illegal?
Mr. Levy: That's right, that would not be covered under the decision of the court below.
Unidentified Justice: That is, arson for hire, murder for hire, or kidnapping for hire?
Mr. Levy: That's correct.
As we read the statute and the legislative history, Congress intended RICO to be a broad gauged weapon in a full scale attack on racketeering to the end that organized crime in this country would be eradicated.
And it was not designed for some narrow and technical statute in the manner that Respondent suggests.
Unidentified Justice: Mr. Levy, there are a number of kind of ambiguous phrases in the briefs and so on, yet as you pointed out illegitimate and legitimate... pose questions in the brief of what is organized crime as opposed to unorganized crime?
Mr. Levy: Or perhaps disorganized crime?
Unidentified Justice: Or disorganized crime.
Mr. Levy: The statute and the legislative history don't define that.
We think in general, Congress used that term in a rather broad sense, as you've suggested, to mean organized criminal activities as well as in the narrower sense to mean the mob or the Cosa Nostra, organized crime in the vernacular sense.
I think they were concerned about racketeering, about organized criminal--
Unidentified Justice: Well, what's racketeering?
Mr. Levy: --The statute offers the definition of what Congress meant by racketeering, and those are the enumerated statutes found in 1961 Subsection 1.
In discussing it, I think Congress was relying to some extent on the common sense view, and on the--
Unidentified Justice: For buying protection, and that sort of thing?
Mr. Levy: --Well I think it had in mind those things, but it didn't by any means limit itself to that.
And the statute, if I may point out, does not require that the defendant need be a member of an organized crime or organized, criminal activity, much as in Culbert, the Court held that the Hobbs Act was not limited in that way.
The statutory statement of findings in the legislative history of RICO plainly revealed Congress' awareness of and concern over organized crime's wholly illegal activities, and nothing suggests that Congress intended these activities to be left outside the scope of the statute by confining the term enterprise to legitimate enterprises.
Moreover on several occasions, Congress indicated that RICO would apply to illegitimate enterprises.
For example, in the Senate Report, in discussing the civil provisions of RICO, Congress referred to state cases in which civil remedies had been used against illegal gambling and prostitution businesses.
Similarly, Senator McClellan, the principal sponsor of the legislation, explained that RICO would apply to the counterfeit phonograph record business, to the illicit prescription drug industry and to stolen and counterfeit credit card schemes, all those being wholly illegal operations.
In the same vein, Congressman Poff, the sponsor of the bill in the House observed that truck hijacking operations would be subject to RICO; again an indication that Congress understood the breadth of the provisions it enacted.
Congress also recognized that illegal activities constitute the economic foundation of organized crime and provide the money and power used to used to infiltrate and corrupt legitimate businesses, labor unions and government offices.
Thus even if the sole purpose of the statute were to prevent the infiltration of legitimate organizations, that purpose would be well served by applying RICO to entirely illegal ventures in order to eliminate the economic base of organized crime--
Unidentified Justice: Tell me, Mr. Levy, does that go this far... say two men robbed a bakery today--
Mr. Levy: --Excuse me?
Unidentified Justice: --Two men robbed a bakery.
Mr. Levy: A bakery, yes sir.
Unidentified Justice: They never see one another for another eight years and then they run into one another and they decide, let's go ahead and rob another one.
So they rob a second bakery eight years later.
Are they vulnerable to a RICO prosecution?
Mr. Levy: I think not.
In that case, there was no association over that period of time to which the two predicate acts of racketeering were related to, that would simply be in contrast sporadic or isolated criminal activity and that's the very reason why the Court of Appeals was incorrect in suggesting that our interpretation of the statute rendered the statutory element enterprise redundant to the term pattern they think that is--
Unidentified Justice: But how about 1961 Subsection 5, where it defines pattern of racketeering activity as at least two acts of racketeering activity, one of which occurred after the effective date of this Chapter and the last of which occurred within ten years, including any period of imprisonment.
Wouldn't my brother Brennan's example come under that?
No, but your answer to my brother Brennan I understood, was to underline your argument that there first of all has to be an enterprise, in which the test is different.
Mr. Levy: --Exactly so.
In the hypothetical, the pattern element would be satisfied,--
Unidentified Justice: But the enterprise element would not be.
Mr. Levy: --That's exactly right.
Unidentified Justice: What would have to be, I gather, the two would... on the occasion of the first robbery, let's go into the business of robbery.
Is that it?
Mr. Levy: That--
Unidentified Justice: That then would be an enterprise.
Mr. Levy: --That's right.
Unidentified Justice: But the hypothetical I gave you, they were just isolated acts with no agreement between them to make this a regular pattern of living.
Mr. Levy: --That's correct.
Unidentified Justice: Let's take another one.
A single individual who talks to no one, but simply goes around to a series of pharmacies and says to the proprietor, I want to buy x number of certain drugs, cocaine and some others, without a prescription and you either give them to me or your windows will be broken as fast as you can replace them.
And he goes around to ten establishments and gets the cocaine and sells it.
Is that an enterprise?
Mr. Levy: I think it would be, yes.
I think it would be.
Unidentified Justice: Whether there's one, two or ten, it's an enterprise, is that right?
Mr. Levy: I think that's correct.
If two people did it, I don't think there would be any doubt about it.
I don't think there's any immunity provided in the statute for the fact that a person exists as a sole proprietorship... rather than a partnership--
Unidentified Justice: Well then in that bridge example we were talking about earlier.
The ladies would have to agree on the pattern of gambling, would they, over the years?
Mr. Levy: --I think they would, although I don't mean to suggest that bridge clubs would be--
Unidentified Justice: Well if you could win your case without conceding that the individual could be, himself, prosecuted?
Mr. Levy: --That's correct.
I repeat that our case doesn't involve a single individual,--
Unidentified Justice: But your argument does.
Even if you put the individual aside on the grounds that it was silly, then it would be--
--Your argument involves that statute, that part of the statutory definition or more accurately, your opponent's argument, because that implies that the individual has to be... is engaged in a legitimate enterprise, and he has to be infiltrated by criminal activity.
Mr. Levy: --I don't believe this case would be any different if the word individual in the definition of enterprise had been omitted.
Unidentified Justice: I think your case would be a little easier.
Mr. Levy: Excuse me?
Unidentified Justice: Well, it's a difference of opinion... don't you think your case might be a little easier?
Mr. Levy: I don't believe our case would since it involved a group of individuals and more than 50 drug store burglaries, for example, and by no means the single individual or a sporadic and isolated pattern of crime.
The Court of Appeals was also concerned with respect to the redundancy of the statute about applying the criminal provisions of Sections 1962(a) and (b) and the civil provisions of Section 1964 to illegitimate enterprises.
We have discussed that in the brief, and we don't think there is any inconsistency or redundancy in applying the statute that way, and indeed the application of those provisions could well serve Congress' purpose to eradicate organized crime by enabling the government to prosecute a defendant who used racketeering income, for example, to establish an illegal narcotics business or who, in the words of amici, muscled into an existing illegal operation.
Similarly in the civil provisions, we think that the Congressional intent would be fully effectuated if any person injured by a violation of the statute, including an illegitimate enterprise, would be able to seek compensation under Section 1964(c) from the wrongdoer for the injury he suffered to his business or property.
I'd like to reserve the balance of my time for rebuttal.
Chief Justice Burger: Very well, Mr. Levy.
ORAL ARGUMENT OF JOHN WALL, ESQ., ON BEHALF OF THE RESPONDENT
Mr. Wall: Mr. Chief Justice, and may it please the Court:
This case presents the opportunity for this Court to reaffirm its decision in Kotteakos, and repair the damage done to that decision and to rule 8, by such circuit court decisions as Elliott.
And I'd like to mention, in that regard, what RICO does not do and was not intended by Congress to do.
The RICO statute neither by its terms nor in its legislative history, ever did purport to allow a single prosecution of a defendant for all his disparate and unrelated and otherwise non joinable crimes.
Also, in enacting RICO, Congress did not intend to extend vicarious liability beyond the limits of traditional conspiracy law to permit mass trials.
What RICO does do and what it was intended to do, I suggest, by Congress, was to protect the integrity of interstate businesses by 1962, thus 1962(a) prohibits people with dirty money from buying into the businesses.
1962(b) prevents the takeover of interstate businesses through criminal activity such as extortion and whatnot.
And (c) prevents the corruption or spoiling of legitimate businesses when one of its employees or associates goes bad.
Unidentified Justice: Well let's accept that it does all those things, what do you say it can't do?
Mr. Wall: Sir?
Unidentified Justice: What do you say that it can't do?
Mr. Wall: What I say, Mr. Chief Justice, is what RICO was designed to do was to be used like a scalpel, rather than a meat cleaver.
RICO was an integrated statute in itself, part of an integrated whole, the Organized Crime Act.
True, the Organized Crime Act was designed to eradicate organized crime.
Unidentified Justice: Well are you saying there must be a legitimate business involved, and then there is some illegitimate penetration of that, is that it?
Mr. Wall: Yes sir.
What I'm saying is,--
Unidentified Justice: It would have to be totally illegitimate from the outset?
Mr. Wall: --No sir, not under, the definition, and under the precise restricted purpose that Congress had in enacting this one section.
And I can perhaps best underline that, Mr. Chief Justice Burger, if we think of the enterprise that we're protecting as the victim, not the criminal, at the heart of the split in the circuit is the distinction between the enterprise as victim and enterprise as criminal.
Only the First and Eighth Circuits have squarely and correctly looked at the statute as a whole in the symmetry of the RICO title together within the larger symmetry of the Organized Crime Act, and made it clear that Congress' purpose was to treat the enterprise as a victim.
And this satisfies the plain meaning, so called plain meaning rule; look at the statute as a whole and to make every element within the statute have significance and not be redundant, we consider--
Unidentified Justice: Mr. Wall, why does your distinction between victim and criminal enterprise itself necessarily answer our problem?
Because is it not conceivable that you might have say, a neighborhood numbers game, or a neighborhood prostitution business, something like that.
And a larger criminal element comes in and by racketeering activities takes over that more or less local enterprise.
Why doesn't the statute apply there and there the one taken over would be the victim?
Mr. Wall: --There are other titles within the Organized Crime Act, and other specific statutes that take care of that particular problem.
Unidentified Justice: What takes care of the takeover problem other than 1962(b)?
Isn't that just exactly what that's directed at?
Mr. Wall: What I'm suggesting, sir, is that that is a simple extortion that could be handled under another statute.
Unidentified Justice: Well maybe it wasn't an extortion, maybe it was just a... using whatever these racketeering activities as defined in the statute are, just to take over an illegal enterprise?
And I don't understand why your distinction between victim and criminal helps us at all in our analysis, because it seems to me you can have an illegal enterprise, that would also be a victim of a takeover by a larger illegal enterprise.
Mr. Wall: Well, the reason that analogy is helpful is that if we follow the Elliott definition and say that all illegal enterprises are included, then we have no cohesive thought to apply the conspiracy concept to.
According to Elliott, the essential nature of the plan was to associate for the purpose of making money.
And rather than the wheels and the chains, we have an amoeba like infrastructure that controls the secret criminal network.
Until Elliott, defining RICO to include so called illegal enterprises, that is, to include an individual who does two separate crimes that come under the definition of criminal racketeering, or a group of individuals who do strictly illegal activities,... excuse me, I lost my train of thought.
Unidentified Justice: Well, as long as you've lost your train of thought for a moment, the word enterprise as contained in the definitional section of the statute doesn't make any distinction between legal and illegal entities, does it?
Mr. Wall: It does, Your Honor, I suggest... Mr. Justice, if you look at the statute--
Unidentified Justice: I'm talking about 1961(4) where it says enterprise includes any individual, partnership, corporation, association or other legal entity and any union or group of individuals associated in fact, although not a legal entity.
Mr. Wall: --Yes sir, it does make a distinction as the First Circuit and other courts in dissenting opinions have pointed out.
Under the rule of ejusdem generis, that... in interpreting the statute, you apply that canon of construction.
Also, when considered with the other elements in the statute, to give enterprise independent meaning it would have to only refer to legitimate business rather than illegitimate.
Unidentified Justice: In the hypothetical I put to your friend about the individual, just one man, who goes around to the... a dozen pharmacies and says you sell me 500 units of cocaine every week, or your windows will be broken.
You say that would not be covered because that's one person, and it's totally illegal from the start, it has no legal front.
What do you say about that?
Mr. Wall: I say that that, the RICO statute, this section, was not directed at that activity, and that has been the problem of many a--
Unidentified Justice: How do you get away from the word... the first category under subsection (4) is any individual, partnership, and then the whole array, seriatim.
Why weren't they trying to get at this one strong armed extortionist?
Mr. Wall: --They weren't because... because they stated that with this particular title they were directing the protection to the victims of... interstate businesses that were victims of organized criminal activity.
Unidentified Justice: And an individual could be a victim, if he were an individual entrepreneur.
Mr. Wall: He could be a victim, yes sir, if he's involved in legitimate--
Unidentified Justice: An individual wrongdoer, obviously, it would be... your argument is, it would be silly to apply RICO to an individual wrongdoer.
Mr. Wall: --It was not designed to protect him, no.
The Anderson Court makes the distinction that it has to be a separate economic entity, it doesn't say legitimate or illegitimate, and under the Anderson definition the wrongdoer might be protected.
Unidentified Justice: Mr. Wall, would you say the loners who engage in this activity are not covered by RICO?
They must have at least one other colleague helping them.
Mr. Wall: In what activity, now?
Unidentified Justice: Extortion of the druggist.
Well I had understood your argument to be that whether he be a loner, whether it be an association of two or 100, it's not covered.
Mr. Wall: That's absolutely correct.
Unidentified Justice: It's illegal activity.
Mr. Wall: It's illegal activity, there has to be--
Unidentified Justice: I was just starting with the first category, I was going to take you through the rest of them.
Mr. Wall: --The loner--
Unidentified Justice: Is it not covered if it's illegal from its inception?
Mr. Wall: --If the loner in the first instance, by robbing the drug store intends only to rob the drugstore, he's not covered.
If he intends by robbing the drugstore two separate times, to make the drugstore owner give him a piece of the business, then I suggest the victim is the drugstore and he is covered by RICO, because he's done precisely what Congress was attempting to prevent from happening to the legitimate victim business by--
Unidentified Justice: Then the enterprise is the drugstore, it's not the individual?
Mr. Wall: --That's correct.
In this instance, and I suggest that it helps us clarify who we're trying to protect if we realize that in every instance in the legislative history and the purpose of the statute was to protect legitimate businesses.
So we have to think of the enterprise as the victim.
Unidentified Justice: In your ejusdem argument, or argument under the definition, you assume as I understand it, the first listed things like partnership, corporation, association, would necessarily be legitimate.
But is it not possible that a corporation could be organized and do nothing but deal in stolen goods or stolen securities or something like that, and be wholly illegitimate.
Would you say that even a corporate, a corporation, so organized and totally illegitimate would not be an enterprise within the meaning of the statute?
Mr. Wall: That, sir, was precisely the reason that liberal construction provision was submitted, I suggest.
And that, I suggest that Congress intended to mean that you liberally construe who are the victims.
Congress wanted to protect as many forms of legitimate endeavors as possible, so to effectuate the remedial purposes of 904(a) you don't limit the Rule of Lenity, but you broadly construe the term enterprise when enterprise is the victim.
Unidentified Justice: But not if it's a wholly illegal business, you don't broadly construe it then?
Mr. Wall: No sir.
Unidentified Justice: Even though it's a victim?
Mr. Wall: Anderson says that they would.
I suggest that under Anderson or the First Circuit, understanding of the purpose of the Act and the legislative history, it doesn't matter in the long run.
Unidentified Justice: I don't see, personally, I don't see how urging us to apply broad principles and broad construction to criminal statutes helps a defendant.
You kind of lose me on that one.
Mr. Wall: Well, Mr. Justice, I'm not suggesting that.
I was suggesting that the liberal construction provision of 904(a) should be applied only to the definition liberally construe who are the victims.
So that, when you have the definition statute--
Unidentified Justice: You apply one part of it liberally and the other part--
Mr. Wall: --One part liberal to the definition as to who is an enterprise, who is a legal enterprise, because as somewhere in the legislative history was mentioned, organized crime may form all kinds of different ways to get around this.
Well that's precisely why the broad term of enterprise is applied, when you are construing it to protect the victim.
When it comes to the criminal, the actor, rather than the one or the individual or the enterprise acted upon, the Rule of Lenity applies.
And by adopting our understanding of the statute, you are protecting the Rule of Lenity regarding the penal provisions.
Unidentified Justice: --But you're not observing Congress' admonition that organized crime may find all sorts of ways to get around these definitions.
Mr. Wall: I am, Your Honor, Mr. Justice.
In this regard, that I'm applying the broad construction to the remedial purpose of protecting the legitimate enterprise which we define broadly.
But when it comes to the Rule of Lenity, when that's applied to a wrongdoer, the criminal, the one acting rather than the one acted upon, no.
And by the approach that we take, you protect the Rule of Lenity, and you avoid the due process implications mentioned in Dunn v. the United States, where Mr. Justice Marshall said, writing for the majority of this Court, as a matter of fact for the unanimous court, this practice, that is the Rule of Lenity, is not merely a convenient maxim of statutory construction, rather, it is rooted in fundamental principles of due process.
Related to that argument, and particularly related to what we consider probably the most important case to be considered in this matter, is that Dunn's observation... or, rather Dunn, Dunn has significance with regard to the Justice Department's observation is, well, theoretically, this thing may be overbroad, but trust our discretion to apply it properly.
I suggest to you there are two problems with that.
One, the Justice Department, instead of Congress, then defines the crime.
A bigger problem, as pointed out by Dunn and relevant in this case too, is it defines the crime differently when it signs the indictments than it does at the legislative hearings.
In Dunn, that precise point was brought out by the Court.
In our view, the Justice Department's contemporaneous rather than current interpretation offers the more plausible reading of the subcommittee's intent.
At the legislative hearings on RICO, the Attorney General, the chief of the criminal division, everybody, said that the purpose of RICO... again, applying the scalpel as part of an overall plan, is to cut out the cancer of racketeering activity on legitimate interstate businesses.
Unidentified Justice: Mr. Wall, I gather from what you said much earlier, you read 1962(c) as addressed to a situation in which some employee or somebody associated with a legitimate enterprise, sets about conducting that legitimate enterprise in business through a pattern of racketeering activity or collection of unlawful debt.
And that that's as far as that section goes, is that right?
Mr. Wall: Yes sir.
Unidentified Justice: Is there anything in the legislative history to support that very narrow reading?
Mr. Wall: Yes sir.
The whole, everything in the legislative history.
As a matter of fact--
Unidentified Justice: This is all part of your basic argument that Congress was more interested in protecting a victim from--
Mr. Wall: --Than getting the wrongdoer--
Unidentified Justice: --infiltration or otherwise--
Mr. Wall: --Title 10.
They specifically went after the repeat offender, and Title 8, they specially went after another aspect of organized crime, that's precisely the point I'm making, Mr. Justice.
Unidentified Justice: --What's collection of unlawful debt?
Mr. Wall: A gambling debt, I assume.
Unidentified Justice: Or usurious debts?
Mr. Wall: Or usurious, yes sir.
Unidentified Justice: Certainly in 1962... goes after some variety of criminal behavior?
I mean, this whole part that we're talking about isn't for the benefit of the victims.
It was to create criminal offenses.
Mr. Wall: It's to create a criminal... a... to focus in on the protection of the victim; that's precisely the purpose of 1962.
Unidentified Justice: But 1962 also makes criminal some conduct, does it not?
Mr. Wall: It certainly does.
And it said, this particular type of activity, this depredation that's taking place on legitimate businesses, is serious enough that we're making this drastic criminal penalties.
Unidentified Justice: So it isn't as if it were just kind of a reparation statute or a victim of crime statute.
It in itself makes certain acts criminal that weren't otherwise made criminal.
Mr. Wall: Right.
That's a fact, Mr. Justice.
Unidentified Justice: I mean, how do you square your previous statement--
Mr. Wall: Well, excuse me.
I didn't mean to interrupt you, Mr. Chief Justice.
It doesn't... the acts themselves were criminal previously, and they are otherwise criminal, however; when they are committed in this pattern... two separate acts, to do this act, attack the victim that we want to protect, it's a--
Unidentified Justice: --Traditionally?
Mr. Wall: --Yes sir.
Unidentified Justice: Previously, I understood you to say that the term enterprise was just a one way street, applied only to one of the two, that is, victim or criminal actor, you said it couldn't apply to the criminal actor?
Doesn't 1962(c) explicitly apply to the criminal actor and the victim; or neither one?
Mr. Wall: Well, 1962(c) applies, I suggest, to protect the victim; it prevents corruption or spoiling of a legitimate business or a front business, as was suggested by one of the questions, supposing there's an apparently legitimate front truck line.
Who is the victim?
It's the truck line.
Unidentified Justice: Let's suppose something less.
Let's suppose that if some group, one or 21 people, set up a specialty of collecting illegal debts.
That is, usurious debts, gambling debts, any other kind, and that's all they do.
You say they are not covered?
Mr. Wall: I say they are not covered--
Unidentified Justice: You mean, they can't be prosecuted under this statute?
Mr. Wall: --Under this particular statute, RICO, it was not designed, it's... it was not designed, and doesn't make internal sense, and it destroys the traditional conspiracy and joinder rules if it is applied to that--
Unidentified Justice: Destroys them or supplements them?
Mr. Wall: --I suggest, Mr. Chief Justice Burger, most respectfully, it destroys them.
And it changes--
Unidentified Justice: Isn't this one of the broadest nets that Congress has ever thrown out to catch criminal activity?
Mr. Wall: --It is probably... well, I suggest, it may... it is, the Organized Crime Control Act is a very broad net.
However, Congress did not set up RICO to get all possible criminal activity, and they did not intend this body of lawyers as Mr. Justice Rehnquist said in Alvarez, this body of lawyers did not intend, when they passed RICO, to change the rules of conspiracy, to change Kotteakos, and to change the rules of Joinder.
And if they did intend to do it, which they didn't, but if they tried to, I suggest it would be unconstitutional and this Court would have much to say about that.
Members of the Court, it has been suggested that even if this Court does agree with our view of the scope of RICO, that my client should nevertheless have the First Circuit reversal, the change, because there was harmless error.
And our argument is, of course, that there was not harmless error, that he was joined with other defendants he should not have been, and that he was joined in a number of criminal charges against him, that without the RICO expansion of conspiracy vehicle he could never have been tried together for.
Unidentified Justice: Did you ever seek a severance?
Mr. Wall: Yes sir.
Unidentified Justice: In the trial court?
Mr. Wall: Yes sir.
I represented Vargas at the trial court, Your Honor, but as the First Circuit points out, severances were sought by this defendant as well as Vargas, and there were many written and oral requests, every few days in this almost seven week trial.
Unidentified Justice: Was the denial of severance appealed?
Mr. Wall: Well, you mean, an interlocutory appeal?
It was appealed, the denial of severance, was appealed.
Unidentified Justice: After conviction?
Mr. Wall: Yes sir.
Unidentified Justice: What about the sentences?
On the substantive counts, didn't he not get sentences concurrent with the sentence under the RICO count?
Mr. Wall: He did, Mr. Justice.
Unidentified Justice: But he had... how was he prejudiced?
The sentences under the substantive counts stand, don't they?
Mr. Wall: They do, except for this.
The First Circuit reversed because once the legally improper conspiracy count is out, there is no basis, no legal basis for having joined all these crimes.
And they cited McElroy v. The United States--
Unidentified Justice: The reversal gave them a new trial, does it?
Mr. Wall: --It would get them a new trial.
Unidentified Justice: Gave them a new trial.
Mr. Wall: Yes sir.
Unidentified Justice: Just on the substantive counts, I gather?
Mr. Wall: That's correct.
I suggest finally to this Court, that the principles of severance enunciated in McElroy and the language in Kotteakos which supports it, suggests that he was damaged by going to trial in all these cases.
For instance, Vargas was found not guilty by the jury on three of the mail fraud counts.
Another defendant was found not guilty of bribery in the police bribing count.
I'm suggesting that to have gone to trial with all these crimes confounds the defendant.
I'm suggesting he may well have had a good defense, say, to one or more of the arson or bribery counts, and might have wanted to testify but was not able to because of the drug charge.
Unidentified Justice: Did the United States urge harmless error in the Court of Appeals?
Mr. Wall: Yes sir.
Unidentified Justice: And decided it against them?
Mr. Wall: Absolutely.
Unidentified Justice: But they held as a matter of law that reversal was required, regardless of whether it was harmless error or not, didn't they?
Mr. Wall: Except for this: I suggest the intimation is, and the fact is, that in these circumstances there's certain error that is not harmless and never can be with this illegal theory, never can be harmless.
And if I might take a moment just to remind all of us that in Kotteakos, the Court of Appeals had said that there was no prejudice, especially since guilt was manifest and to reverse the conviction would be a miscarriage of justice.
But this Court, speaking in Kotteakos, said technical, my foot, they said, what may be technical for one is substantial for another.
What minor and unimportant in one setting, crucial in another.
Moreover, lawyers know if others do not, that what may seem technical may embody a great tradition of justice or a necessity for drawing lines somewhere between great areas of law, that in other words, one cannot always segregate the technique from the substance, or the form from the reality.
I'm suggesting also, members of this Court, that in your decision in Dunn that living, wonderful principle of our law was again upheld where the Court of Appeals in the Tenth Circuit said, it's obvious there was a variant, sure, but the guy lied under oath, even if it was in the lawyer's office, so let the conviction stand.
Oh no, this Court, in a unanimous opinion written by Chief Justice... or rather, I'm sorry, by Mr. Justice Marshall, stated: the jury well... may well have reached the same verdict had the prosecution built its case properly.
But the offense was not so defined, and appellate courts are not free to revise the basis on which a Defendant is convicted simply because the same result would likely obtain on retrial.
I suggest to the Court that in conjunction with the principles enunciated in Kotteakos, and in Dunn, and in McElroy and in King in the First Circuit, that the First Circuit decision should stand.
Chief Justice Burger: Do you have anything further, Mr. Levy?
Mr. Levy: I only have two brief points, Mr. Chief Justice.
First, Mr. Wall has argued that under the statute, the enterprise must be the victim rather than the means of the commission of the pattern of racketeering activity.
Nothing in the statute suggests or requires that, and indeed the fallacy may be shown by the Ninth Circuit's decision in the Zemek case cited in our reply brief, where the owner of a tavern advanced his tavern business through extortion and murder of his competitors.
In that case, the enterprise was a tavern and that was advanced rather than being the victim of the racketeering activity.
Second, in this case, there were legitimate businesses that were harmed by Respondent's conduct.
Particularly the drugstores that were burglarized and the insurance companies that were defrauded were clearly harmed and that illustrates how the application of RICO to an entirely illegitimate enterprise can serve to protect legitimate businesses from the ill effects of racketeering.
ORAL REBUTTAL ARGUMENT OF MARK I. LEVY, ESQ., ON BEHALF OF THE PETITIONER
Chief Justice Burger: Thank you, gentlemen.
The case is submitted.
Unidentified Justice: The Honorable Court is now adjourned until tomorrow at ten o'clock [= 10:00].