United States v. Casimir Staszcuk

STEVENS, Circuit Judge.

Count III of the indictment1 charged that on December 8, 1970, appellant did obstruct, delay and affect commerce as defined in the Hobbs Act2 by extorting $3,000 from a person named Allen.3 The government proved that defendant received the $3,000 and that he did not oppose a subsequent zoning change authorizing the construction of an animal hospital. However, no such hospital was ever built. Therefore, there is no evidence that either the zoning change or the payment had any effect whatsoever, either favorable or unfavorable, on interstate commerce. The question presented is whether the federal statute reaches this extortion.

The question is novel and significant. The extraordinary growth of federal criminal litigation poses a serious threat to the quality of federal justice; moreover, this growth may not only reflect but also contribute to the continuing transfer of power from the several states to the national government. Since we have no desire to accelerate this trend unnecessarily, we approach the question with a special regard for appellant’s claim that the federal prosecutor has overreached the proper limits of his jurisdiction. The importance of the issue merited the fresh consideration of the court sitting en banc. It should be decided neither by simple extrapola*56tion from the precedents on which the government relies nor by merely distinguishing the cases which have not yet carried us this far.

We first restate the essential facts and then explain why we believe that a fair consideration of the statutory purpose and its constitutional predicate require that the district court judgment be affirmed.

I.

In September, 1970, William Harris planned to build an animal hospital on property located in the 13th ward of the City of Chicago. As then zoned, such a use of the land was prohibited. Harris therefore paid $5,500 to Al C. Allen, who had acquired a reputation as “the zoning man”;4 Allen talked to defendant Staszcuk, who was then serving as aider-man of the 13th ward; on September 15, 1970, an amendatory ordinance was introduced in the City Council.

On December 8, 1970, the zoning man paid the alderman $3,000. On that date. the alderman participated in the public hearing on the proposed ordinance, questioning objectors and, at least implicitly, supporting the proposal. Following the public hearing on December 8, pursuant to customary procedure, the zoning committee deferred action on the matter. A few weeks later, on January 27, 1971, the ordinance was approved by the committee and adopted by the City Council. Harris was thereafter free to construct his animal hospital.

In March, Harris received bids from three contractors. For reasons not explained in the record, however, the veterinarian apparently changed his plans and the hospital was never built. Instead, Harris improved his property with construction that would have been permitted before the zoning ordinance was amended.

The estimator for one of the three contractors testified that in his judgment construction of the animal hospital would have required the use of components manufactured outside of the State of Illinois.5 Neither of the other bidders testified. The nexus between the extortion and interstate commerce may therefore be described thusly: the extortion eliminated the alderman’s possible opposition to the removal of a restriction which prevented Harris from building the hospital; if Harris had not changed his plans, the construction of the hospital would have involved the use of out-of-state materials. The jury found this nexus sufficient under the trial court’s instructions on the commerce issue.6 A panel of this court originally concluded that it was too tenuous and reversed the conviction on Count III. After reargument and reconsideration we now affirm that conviction.

II.

The present form of the statute is a codification of a 1946 enactment, the Hobbs Act, which amended the so-called “Federal Anti-racketeering Act of *571934.”7 The 1946 amendment was intended to encompass the conduct held to be beyond the reach of the 1934 Act by the Supreme Court in United States v. Local 807, 315 U.S. 521, 62 S.Ct. 642, 86 L.Ed. 1004.8 It was a broadening amendment concerned primarily with the proper differentiation between “legitimate” labor activity and labor “racketeering.” It is, therefore, appropriate to consider the legislative purpose in enacting the 1934 Act in addressing the issue presented by this case.

That purpose was described in Judge Learned Hand’s opinion for the majority of the Circuit Court of Appeals in the Local 807 case as follows:

In conclusion we may add that a consideration of the evil at which Congress was aiming, seems to us to confirm the construction we are putting upon what it said. For a number of years before 1934 — at least in the City of New York — the levy of blackmail upon industry, especially upon relatively small shops, had become very serious, and the local authorities either would not, or could not, check it. The courts were powerless, because the witnesses were terrorized and could not be protected if they told what they knew; the public felt themselves at the mercy of organized gangs of bandits and became much wrought up over the situation. It was, at least primarily, to check such Camorras that Congress passed this measure.

United States v. Local 807, 118 F.2d 684, 687-688 (2d Cir. 1941).

A description of the statute as designed to eliminate the “levy of blackmail upon industry, especially upon relatively small shops,” casts a revelatory light on the problem presented by this case. An effective prohibition against blackmail must be broad enough to include the case in which the tribute is paid9 as well as the one in which a victim is harmed for refusing to submit. Since the payment would normally enable the business to continue without interruption,10 the inference is inescapable that Congress was as much concerned with the threatened impact of the prohibited conduct as with its actual effect.

Moreover, congressional concern was not merely a matter of providing federal protection to each of the “relatively small shops” being victimized, but rather reflected the legislative judgment that these entrepreneurs, in the aggregate, represented a component of indus*58try of sufficient importance to merit federal protection. The concern which gave rise to the statute is marketwide. Thus, although enforcement necessarily proceeds on a case-by-case basis, our evaluation of both the intent of Congress and its power to implement that intent, requires more than a consideration of the consequences of the particular transaction disclosed by this record; it requires an identification of the consequences of the class of transactions of which this is but one example.11

The statute is not regulatory in character but instead is intended to remove artificial restraints on the free flow of goods. The elimination of “blackmail upon industry” can have no inhibitory effect on interstate commerce; it can only facilitate the operation of a free economy. Like the Sherman Act, which is broadly directed against private regulation of the free market, and which has been construed as an exercise by Congress of “all the power it possessed” to prevent restraints on commercial competition, see Apex Hosiery Co. v. Leader, 310 U.S. 469, 495, 60 S.Ct. 982, 84 L.Ed. 1311, and Atlantic Cleaners & Dyers v. United States, 286 U.S. 427, 435, 52 S.Ct. 607, 76 L.Ed. 1204, the purpose of the Hobbs Act parallels the central purpose of the Commerce Clause itself.

That central purpose was described in these words by Justice Rutledge:

If any liberties may be held more basic than others, they are the great and indispensable democratic freedoms secured by the First Amendment. But it was not to assure them that the Constitution was framed and adopted. Only later were they added, by popular demand. It was rather to secure freedom of trade, to break down the barriers to its free flow, that the Annapolis Convention was called, only to adjourn with a view to Philadelphia. Thus the generating source of the Constitution lay in the rising volume of restraints upon commerce which the Confederation could not check. These were the proximate cause of our national existence down to today.
As evils are wont to do, they dictated the character and scope of their own remedy. This lay specifically in the commerce clause. No prohibition of trade barriers as among the states could have been effective of its own force or by trade agreements. It had become apparent that such treaties were too difficult to negotiate and the process of securing them was too complex for this method to give the needed relief. Power adequate to make and enforce the prohibition was required. Hence, the necessity for creating an entirely new scheme of government.
* * * * *
So by a stroke as bold as it proved successful, they founded a nation, although they had set out only to find a way to reduce trade restrictions. So also they solved the particular problem causative of their historic action, by introducing the commerce clause in the new structure of power.

W. Rutledge, A Declaration of Legal Faith, at 25-26 (1947).

The primary purpose of the Commerce Clause was to secure freedom of trade, to break down the barriers to its free flow, and to curtail the rising volume of restraints upon commerce that the Articles of Confederation were inadequate to control. A statute which has a purpose which so unambiguously parallels the fundamental purpose of its constitutional predicate must receive an expansive construction.

It is, therefore, not surprising to find that the language of the statute, its legislative history, and its interpretation by the Supreme Court all confirm an intent by Congress to exercise its full powers under the Commerce Clause. The definition of the word “commerce” in the 1934 Act encompassed “all other trade or commerce over which the United States *59has constitutional jurisdiction.”12 The Senate Report approvingly quoted a Department of Justice memorandum stating that the proposed statute was designed “to extend Federal jurisdiction over all restraints of any commerce within the scope of the Federal Government’s constitutional powers.” See S.Rep. No. 532, 73rd Cong., 2d Sess. at 1 (1934). And, as has often been noted, in Stirone v. United States, 361 U.S. 212, 215, 80 S.Ct. 270, 272, 4 L.Ed.2d 252, the Supreme Court expressly stated that the broad language of the Hobbs Act manifests “a purpose to use all the constitutional power Congress has to punish interference with interstate commerce by extortion, robbery or physical violence.”

Against this background, we have no alternative but to conclude that Congress intended the Hobbs Act to apply to a case such as this and that it had ample power to effectuate that intent.

III.

There was no need to prove that the extortion was actually intended to obstruct or to affect interstate commerce. The commerce element of the Hobbs Act violation is jurisdictional. Recently the Supreme Court removed such doubt as theretofore existed about the prosecutor’s burden of proving “anti-federal scienter.” See United States v. Feola, 420 U.S. 671, 95 S.Ct. 1255, 43 L.Ed.2d 541 (1975).13

We are also persuaded that the cases which uniformly hold that a threatened effect on interstate commerce is sufficient to bring the statute into play notwithstanding the absence of any actual effect, correctly interpret the congressional purpose.14 Finally, we have no doubt that the extortion revealed by this record is a species of the “blackmail upon industry” which Congress mustered its full power to eradicate. The muscle of the faithless public servant is just as intolerable as the muscle of the Camorras described by Judge Hand.15

This does not mean, however, that we may ignore the constitutional limits on the power of the national government. Nor may we disregard the statutory language which requires the prosecutor to prove some connection with interstate commerce in every case.16 We hold, however, that the commerce element of a Hobbs Act violation — the *60federal jurisdictional fact — may be satisfied even if the record demonstrates that the extortion had no actual effect on commerce.17 Congressional concern is justified by the harmful consequences of the class of transactions to which the individual extortion belongs, and jurisdiction in the particular case is satisfied by showing a realistic probability that an extortionate transaction will have some effect on interstate commerce.18

The jurisdictional inquiry must, of course, focus on the situation at the time of the offense. In this case the crime occurred on December 8, 1970. No actual effect on commerce occurred either before or after that date. It was, nevertheless, entirely reasonable for the jury, assessing probabilities as of that time, to find that a potential effect on commerce had been proved. The jury could reasonably infer that, as a result of the extortion on that date, there was then a likelihood that the movement across state lines of a furnace, plate glass, and plumbing and electrical fixtures would be affected. The events which occurred after December 8, 1970, the evidence concerning the interested parties’ plans and expectations, and the contractor’s testimony about the need to use out-of-state components to build an animal hospital in Illinois were all relevant to the commerce issue. Contrary to the prosecutor’s view, however, we do not think appellant’s guilt or innocence may be determined entirely on the basis of the intent of the property owner or the zoning man; nor, on the other hand, do we think federal jurisdiction is defeated by the fortuitous circumstance that, after the crime had been committed, a change of plans occurred and the hospital was never built.19 Finally, contrary to appellant’s argument, even though it is possible that another contractor might have been able to construct the hospital entirely with local materials, the testimony was adequate to support the conclusion that the use of out-of-state components was far more probable. The jury, like Congress, was entitled to assess probabilities.

The jury was properly instructed on the commerce issue and its verdict is supported by the evidence. The conviction on Count III is affirmed.20 For the reasons stated in the panel opinion of September 10, 1974, the convictions on Counts IV, V, VI, and VII are reversed and the convictions on Counts I, II, VIII and IX are affirmed.

. The disposition of the remaining counts is explained in the panel opinion reported at 502 F.2d 875 (7th Cir. 1974).

. Act of July 3, 1946, c. 537, 60 Stat. 420. The statute as codified in 18 U.S.C. § 1951, provides, in pertinent part:

“(a) Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in 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—
* * * * * *
(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.
(3) The term ‘commerce’ means all . . . commerce over which the United States has jurisdiction.”

. The charging paragraph in Count III of the indictment reads as follows:

“On or about December 8, 1970, at Chicago, in the Northern District of Illinois, Eastern Division,
CASIMIR STASZCUK,
the defendant, knowingly, wilfully and unlawfully did obstruct, delay and affect commerce, as defined by Section 1951(b)(3) of Title 18 of the United States Code, by means of extortion. More specifically, defendant, a public official, obtained property not due either him or his office, in the form of $3,000., paid partly by check and partly by cash, from Al C. Allen, with his consent being induced under color of official right. This payment was made because Allen believed and feared that he would be unable to procure a zoning change on property located on Pulaski Road between 56th Place and 57th Street, in the Thirteenth Ward of Chicago, unless he compensated defendant to refrain from objecting to such a change as a member of the Chicago City Council;
“In violation of Title 18, United States Code, Section 1951.”

. The witness Prokop referred to Allen as “the zoning man.” (Tr. 174.) When asked to explain how she heard about Allen, she stated that she had read about him in the papers and she went in to see him “because he was always zoning.” (Tr. 177).

. Specifically, the contractor whose estimator testified would have used cast iron plumbing fixtures, plate glass, electrical fixtures, and a furnace manufactured elsewhere. Since the witness’s testimony was predicated on his company’s experience in the construction of four comparable animal hospitals in the preceding five years and his general knowledge of the industry, and since he was not aware of any Illinois sources for these items, the jury could fairly infer from the testimony that the other contractors would also have found it necessary to use components manufactured outside of Illinois.

. After explaining the meaning of “extortion under color of official right,” the trial judge stated:

“It is not necessary for you to find that the defendant Staszcuk knew or intended that his actions would affect, delay or obstruct commerce or the movement of any article in commerce; it is only necessary that the natural effect of the act committed by him, whether he was conscious of it or not, would be to affect, delay or obstruct commerce.” (Tr. 585-586)

. The original statute is found at 48 Stat. 979-980, the 1946 amendment at 60 Stat. 420, and the 1948 codification at 18 U.S.C. § 1951.

. That case involved the construction of the exemption for “the payment of wages by a bona fide employer to a bona fide employee,” which is no longer a part of the statute.

. Counts I and II of this case; and Stirone v. United States, 361 U.S. 212, 80 S.Ct. 270, 4 L.Ed.2d 252; Nick v. United States, 122 F.2d 660 (8th Cir. 1941), cert. denied, 314 U.S. 687, 62 S.Ct. 302, 86 L.Ed. 550; Hulahan v. United States, 214 F.2d 441 (8th Cir. 1954), cert. denied, 348 U.S. 856, 75 S.Ct. 81, 99 L.Ed. 675; United States v. Floyd, 228 F.2d 913 (7th Cir. 1956), cert. denied, 351 U.S. 938, 76 S.Ct. 835, 100 L.Ed. 1466; United States v. Pranno, 385 F.2d 387 (7th Cir. 1967), cert. denied, 390 U.S. 944, 88 S.Ct. 1028, 19 L.Ed.2d 1132, and United States v. Hyde, 448 F.2d 815 (5th Cir. 1971), cert. denied, 404 U.S. 1058, 92 S.Ct. 736, 30 L.Ed.2d 745, are examples of such cases. Speaking for our court in Pranno, Judge Fair-child stated:

“The statute seems to be read as not only prohibiting the obstruction of commerce by extortion, but also prohibiting extortion by any threat, the carrying out of which would obstruct commerce. We have no doubt of its coverage here.” 385 F.2d at 389 (Emphasis added.)

. Of course, the payment of the extortion demand may, in some cases, have a direct actual effect on interstate commerce by reducing the assets available for the purchase of goods originating in other states. See, e.g., United States v. Gill, 490 F.2d 233 (7th Cir. 1973), cert. denied, 417 U.S. 968, 94 S.Ct. 3171, 41 L.Ed.2d 1139; United States v. DeMet, 486 F.2d 816 (7th Cir. 1973), cert. denied, 416 U.S. 969, 94 S.Ct. 1991, 40 L.Ed.2d 558, and United States v. Augello, 451 F.2d 1167 (2d Cir. 1971), cert. denied, 405 U.S. 1070, 92 S.Ct. 1518, 31 L.Ed.2d 802. In this case, however, the government does not contend that the $3,000 payment so depleted the resources of either Allen or Harris.

. Compare United States v. Walker, 489 F.2d 1353, 1357 (7th Cir. 1973), cert. denied, 415 U.S. 982, 94 S.Ct. 1574, 39 L.Ed.2d 879.

. 48 Stat. 979. Moreover, in describing the requisite effect on commerce, § 2 of the 1934 Act broadly referred to activity “in connection with or in relation to any act in any way or in any degree affecting trade or commerce or any article or commodity moving or about to move ' in trade or commerce . . .”

. Speaking of 18 U.S.C. §§111 and 371, the Court stated:

“The jurisdictional requirement is satisfied by the existence of facts tying the proscribed conduct to the area of federal concern delineated by the statute. Federal jurisdiction always exists where the substantive offense is committed in the manner therein described, that is, when a federal officer is attacked. Where, however, there is an unfulfilled agreement to assault, it must be established whether the agreement, standing alone, constituted a sufficient threat to the safety of a federal officer so as to give rise to federal jurisdiction. If the agreement calls for an attack on an individual specifically identified, either by name or by some unique characteristic, as the putative buyers in the present case, and that specifically identified individual is in fact a federal officer, the agreement may be fairly characterized as one calling for an assault upon a federal officer, even though the parties were unaware of the victim’s actual identity and even though they would not have agreed to the assault had they known that identity.” 420 U.S. at-■, 95 S.Ct. at 1269.

. See the cases in n. 9, supra.

. Compare Mr. Justice Clark’s reference to “a betrayal of public trust of the most alarming type to a free society” in his opinion in United States v. Braasch, 505 F.2d 139, 141 (7th Cir. 1974), cert. denied, 421 U.S. 910, 95 S.Ct. 1562, 43 L.Ed.2d 775 (1975).

. The language of this statute does not permit us to treat it as a determination that since the class of activities giving rise to federal concern has an adverse effect on commerce, Congress intended any activity within the class to be subject to prosecution without the necessity of any showing of an actual or potential effect on commerce in the particular case. Compare United States v. Hunter, 478 F.2d 1019, 1020-1021 (7th Cir. 1973), cert. denied, 414 U.S. 857, 94 S.Ct. 162, 38 L.Ed.2d 107.

. The same conclusions apply to the Sherman Act. The federal interest in keeping the market free of artificial restraints justifies a prohibition against an agreement to fix prices even if the agreed price is reasonable, see, e. g., United States v. Trenton Potteries Co., 273 U.S. 392, 397-401, 47 S.Ct. 377, 71 L.Ed. 700, and even if the agreement may result in a lower price in the particular case. See, e. g., Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U.S. 211, 213, 71 S.Ct. 259, 95 L.Ed. 219. Undoubtedly the illegality would attach even if the defendants could demonstrate that the prevailing price would have been the same without any such agreement. The federal power to protect the free market may be exercised to punish conduct which threatehs to impair competition even when no actual harm results. Cf. United States v. Finis P. Ernest, Inc., 509 F.2d 1256 (7th Cir. 1975).

. The instruction in this case required the jury to find that the “natural effect” of the transaction would be to affect commerce. See n. 6, supra. We find no significant difference between that phrasing and a test phrased in terms of a “realistic probability” of such an effect.

. Nor would appellant have been any less culpable if for some unanticipated reason the ordinance had not in fact passed on January 27, 1971. Conversely, if on December 8, 1970, no effect on interstate commerce had been foreseeable, a subsequent decision creating an interstate nexus would not retroactively convert a possible state offense into a federal crime.

. At appellant’s request we have again reviewed the transcript of the voir dire examination of prospective jurors. Although we adhere to our original conclusion that the entire examination brought out sufficient information • about the seven male jurors (and one male alternate) who were accepted to enable experienced defense counsel to make a reasonably knowledgeable use of their peremptory challenges, we repeat our disapproval of the trial judge’s refusal to inquire about the marital status of male jurors or to ascertain the employment status of their spouses.