When is political protest a RICO violation?

On February 26, the U.S. Supreme Court decided Scheidler v. National Organization for Women (1) (NOW II), which began a decade ago as a civil RICO suit against several antiabortion protesters and organizations. The Court held that the federal Hobbs Act--which NOW used as the basis for its claim that the protesters had engaged in a "pattern of racketeering activity" against abortion clinics--required proof that the defendant actually sought to "obtain property," as the statute states, rather than merely sought to drive another party out of business. Because NOW II is one of those rare cases that has been to the Supreme Court twice, a full understanding of it requires some historical context.

The Court decided National Organization for Women v. Scheidler (2) (NOW I) in 1994. It held unanimously that the RICO statute could be applied to an organization--such as the protesters'--that was not motivated by an economic purpose. This decision caused a great outcry among antiabortion and other political action groups, who claimed that their ability to present their message would be squelched by the threat of RICO treble-damages lawsuits.

However, NOW I was nothing more than a straightforward reading of the RICO statute, which, on its face, contained no "economic purpose" limitation. Moreover, the Court simply reversed the dismissal of the lawsuit by the district court, allowing the litigation to go forward, without deciding whether the suit might ultimately infringe on the defendants' First Amendment interests.

In an article analyzing the Court's decision and agreeing with its unexceptional conclusion, I examined NOW's complaint with an eye to the forthcoming trial and round two significant problems. (3)

First, to establish a RICO violation, plaintiffs must prove a "pattern of racketeering activity." The plaintiffs in this case alleged a series of extortions in violation of the Hobbs Act and state law to meet the "pattern" requirement. The Hobbs Act, like most state extortion statutes, requires that the defendant be shown to have "obtain[ed] property" by "force, violence, or fear, or under color of official right." (4)

But the defendants here had plainly not sought to obtain the property of the abortion clinics. Rather, they were trying to drive the clinics out of business. This, in my view, was not extortion, but the lesser crime of "criminal coercion," which is not included in the Hobbs Act. Hence, the complaint did not allege a "pattern of racketeering activity." (5)

The second problem with the complaint had been recognized by Justice David Souter, concurring in NOW I. He observed that "conduct alleged to amount to Hobbs Act extortion ... may turn out to be fully protected First Amendment activity...." (6)

There was a substantial concern that, despite some acts of property damage and physical violence by the protesters, the First Amendment might well preclude the NOW lawsuit. As the Court held in NAACP v. Claiborne Hardware Co.:

The burden of demonstrating that [the taint of violence that colored some acts] colored the entire collective effort ... is not satisfied by evidence that violence occurred or even that violence contributed to the success of the boycott. A massive and prolonged effort to change the social, political, and economic structure of a local environment cannot be characterized as a violent conspiracy simply by reference to the ephemeral consequences of relatively few violent acts. (7)

Further, the treble damages available under RICO seemed to violate Claiborne Hardware's requirement that damages for political protest must be limited to "the direct consequences of [violent] conduct." (8) Despite these problems, NOW proceeded to trial on essentially the same complaint. The jury round that the defendants had committed a "pattern of racketeering activity," namely "21 violations of the Hobbs Act" and "25 violations of state extortion law." (9) However, over the defendants' objection, the jury was not required to specify which of the protesters' acts constituted extortion, when or where these acts had occurred, or what property the defendants had obtained.

The jury awarded damages, which were trebled under RICO. The district court also issued a nationwide injunction prohibiting defendants from engaging in various protest activities that interfered with clinics' operation.

On appeal, the Seventh Circuit affirmed the verdict, rejecting the three major arguments the antiabortion groups raised: that RICO did not permit a nongovernment plaintiff to seek an injunction, that the Hobbs Act had not been violated, and that the protesters were found liable for activity protected by the First Amendment. (10) The court explained that it had "repeatedly held that intangible property such as the right to conduct a business can be considered 'property' under the Hobbs Act." (11) It held that "as a legal matter, an extortionist can violate the Hobbs Act without either seeking or receiving money or anything else. A loss to, or interference with the rights of, the victim is all that is required." (12)

This term, the Supreme Court granted certiorari in NOW II only on the first two issues, choosing to pass on the First Amendment question. The case stirred up a great deal of interest among other parties who participated as amici curiae for the protesters, including People for the Ethical Treatment of Animals (PETA), whom I represented; the Seamless Garment Network, a political action organization promoting liberal causes; and the Southern Christian Leadership Conference.

These groups had no position on the abortion controversy. Rather, they were concerned that their political activism would be chilled by civil RICO suits brought by parties claiming harm as a result of protest activities---or even criminal prosecutions. PETA had already been sued under RICO and had settled out of court.

The United States also joined the fray, agreeing with the protesters that RICO did not allow a private plaintiff to seek an injunction, and agreeing with NOW that the protesters had violated the Hobbs Act.

The Supreme Court, in an opinion by Chief Justice William Rehnquist, held for the protesters on the Hobbs Act question by an 8-1 vote, saving the injunction issue for another day. (13) The Court acknowledged that earlier cases had held that a RICO defendant need not have obtained property for himself or herself personally, (14) and that intangible property can qualify as "property" for the purposes of federal criminal law. (15) But it held that "the effort to characterize petitioners' actions here as an 'obtaining of property from' respondents is well beyond [those cases]." (16)

The Court noted that Congress used two sources of law as models for the Hobbs Act: the New York Penal Code and the Field Code. (17) In both, the definition of extortion required that the defendant obtain property from the plaintiff. The Supreme Court itself had previously construed the Hobbs Act as requiring "not only the deprivation, but also the acquisition of property." (18)

Extortion v. coercion

The Court concluded that "eliminating the requirement that property must be obtained to constitute extortion would not only conflict with the express requirement of the Hobbs Act, it would also eliminate the recognized distinction between extortion and the separate crime of coercion...." (19)

But RICO also prohibits "extortion.... chargeable under state law." (20) The jury had found 25 such violations, but without specifying the acts or where they occurred. Six states' extortion statutes "leave the realm of property altogether and cover threats made to induce the [victim] to do 'any act against his will.'" (21) If NOW could show coercive conduct in one of these states, it could argue a RICO violation based on state law without showing property obtainment.

Because NOW had not proved that any of the protesters' acts had occurred in these states, it tried to argue that the coercive conduct fell within the "generic" definition of extortion. (22) But as the Court had already discussed, the protesters' conduct does not fall within that definition, which, under the Model Penal Code and under the law of 44 states, requires property obtainment.

This argument led the Court to its only misstep in an otherwise sure-handed decision: "[W]here, as here, the Model Penal Code and a majority of states recognize the crime of extortion as requiring a party to obtain or to seek to obtain property, as the Hobbs Act requires, the state extortion offense for purposes of RICO must have a similar requirement." (23)

This broad conclusion is inconsistent with RICO's provision that it can be violated by "extortion ... chargeable under state law" in states where property acquisition is not an element of extortion. Correct or not, the Court's conclusion--that references to state law violations in federal criminal statutes are now to be construed according to how "the Model Penal Code and a majority of states" view those crimes, rather than whether the conduct actually violates the law of the state in question--may cause mischief in the future. If it does, I suspect that the Court will retreat from this pronouncement, which seems inconsistent with Rehnquist's usual deference to state law and is, in any case, dictum.

Justices Ruth Bader Ginsburg and Stephen Breyer concurred in the decision, agreeing that "the Seventh Circuit's decision accords undue breadth to ... RICO." (24) Ginsburg obviously wanted to reassure abortion providers and their supporters by reminding them that the Court's abolition of RICO as a weapon against antiabortion protests would not lead to a new wave of violent demonstrations around the country. She noted that the Freedom of Access to Clinic Entrances Act of 1994, (25) enacted after this lawsuit had begun, would have prevented much of the protesters' coercive behavior in this case.

Only Justice John Paul Stevens dissented. He complained that "the Court's murky opinion seems to hold that this phrase ["obtaining property"] covers nothing more than the acquisition of tangible property." (26) But the Court's opinion is clear: It does require that the defendant acquire property, but does not require that the property be tangible.

Stevens and the government were concerned about the continued viability of a series of federal prosecutions under the Hobbs Act, the best known of which is United States v. Tropiano. (27) These cases involve mobsters who have been prosecuted for attempting to control local markets for various services. In a typical scenario, the gangsters, or their friends, establish a trash-hauling company. Using threats and violence, they drive all other trash-hauling companies out of the market, so that the gangsters' favored firm will have all the local business for itself.

But nothing in the Court's opinion interferes with this sort of prosecution because, unlike the abortion protesters, the gangsters ultimately seek to obtain property--namely, the town's trash-hauling business. The fact that they may do this on someone else's behalf or that their more immediate goal is to drive others out of business does not mean they have not violated the Hobbs Act. The majority makes this clear in a footnote, observing that "the dissent is mistaken to suggest that our decision reaches, much less rejects, lower court decisions such as United States v. Tropiano." (28) Therefore, these important federal Hobbs Act prosecutions may continue unabated.

There is another way for NOW to use the Hobbs Act as a RICO predicate. In addition to prohibiting "obstruct[ing], delay[ing], or affect[ing] commerce by robbery or extortion," the Hobbs Act forbids "commit[ting] or threaten[ing] physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section." (29)

Federal prosecutors have ignored this rather convoluted provision. However, when the Hobbs Act was first proposed in 1945, it was designed to punish not only gangsters, but also saboteurs who interfered with the war effort by blowing up trains, bridges, and the like. (30) Unlike the "extortion" provision of the act, this clause does not require the obtainment of property, but rather punishes those who, as I read it, purposely interfere with commerce by the commission or threat of physical violence. (31) Since this is exactly what the protesters allegedly did, that provision would seem to fit this case.

NOW raised this argument in the court of appeals, but, because it had not proved the contention while at trial, it was too late. Plaintiffs bringing similar claims in the future would do well to avoid NOW's mistakes.

Notes

(1.) 123 S. Ct. 1057 (2003) [hereinafter NOW II].

(2.) 510 U.S. 249 (1994).

(3.) Craig Bradley, NOW v. Scheidler: RICO Meets the First Amendment, 1994 SUP. CT. REV. 129, 130 (1995).

(4.) 18 U.S.C. [section]1951(b)(2) (2000).

(5.) Bradley, supra note 3, at 137-41.

(6.) 510 U.S. 249, 264 (Souter, J., concurring) (citing NAACP v. Claiborne Hardware Co., 458 U.S. 886 (1982)) (holding that a state common law prohibition on malicious interference with business could not, under the circumstances, be constitutionally applied to a civil rights boycott of white merchants).

(7.) 458 U.S. 886, 933.

(8.) Id. at 918. See Bradley, supra note 3, at 153.

(9.) NOW II, 1238. Ct. 1057, 1062. The jury also found 23 unspecified violations of the Travel Act. (18 U.S.C. [section] 1952) and 23 more unspecified attempts to violate the Travel Act by extortion.

(10.) Scheidler v. Nat'l Org. for Women, Inc., 267 F.3d 687 (7th Cir. 2001).

(11.) Id. at 709.

(12.) Id.

(13.) NOW II, 123 S. Ct. 1057, 1069.

(14.) United States v. Green, 350 U.S. 415, 420 (1956).

(15.) Carpenter v. United States, 484 U.S. 19, 27 (1987).

(16.) NOW II, 123 S. Ct. 1057, 1064.

(17.) David Dudley Field, a New York lawyer, prepared codes of civil and criminal procedure for the state in the mid-19th century. The civil code became the basis for procedural reform throughout the country.

(18.) NOW II, 123 S. Ct. 1057, 1065 (citing United States v. Enmons, 410 U.S. 396, 400 (1973)).

(19.) Id. at 1066.

(20.) 18 U.S.C. [section] 1961(1)(A).

(21.) Bradley, supra note 3, at 144 (quoting 2 WAYNE LAFAVE & AUSTIN SCOTT, CRIMINAL LAW [section] 8.12 (1986)). The six states are Alaska, Colorado, Kansas, New Mexico, Ohio, and Wyoming.

(22.) Respondents' Brief, at 33-34.

(23.) NOW II, 123 S. Ct. 1057, 1069.

(24.) Id. (Ginsburg, J., concurring).

(25.) 18 U.S.C. [section] 248.

(26.) NOW II, 123 S. Ct. 1057, 1069 (Stevens, J., dissenting).

(27.) 418 F.2d 1069 (2d Cir. 1969).

(28.) NOW II, 123 8. Ct. 1057, 1064 n.6. See Bradley, supra note 3, at 139.

(29.) 18 U.S.C. [section] 1951(a).

(30.) H.R. No. 238, 79th Cong, 1st Sess. (Feb. 27, 1945). There is some confusion on this point because the prewar Anti-Racketeering Act contained a similar provision.

(31.) See Bradley, supra note 3, at 142-43.