U.S. v. DOUGLASNos. 07-1695, 07-1696, 07-1850, 07-1851.
634 F.3d 852 (2011)
UNITED STATES of America, Plaintiff-Appellee/Cross-Appellant,
Donny G. DOUGLAS (07-1695/1850) and Jay D. Campbell (07-1696/1851), Defendants-Appellants/Cross-Appellees.
Donny G. DOUGLAS (07-1695/1850) and Jay D. Campbell (07-1696/1851), Defendants-Appellants/Cross-Appellees.
United States Court of Appeals, Sixth Circuit.
Argued: January 20, 2011.
Decided and Filed: February 10, 2011.
ARGUED: N.C. Deday LaRene, LaRene & Kriger, P.L.C., Detroit, Michigan, Harold Gurewitz, Gurewitz & Raben, PLC, Detroit, Michigan, for Appellants. Kathleen Moro Nesi, Assistant United States Attorney, Detroit, Michigan, for Appellee. ON BRIEF: N.C. Deday LaRene, LaRene & Kriger, P.L.C., Detroit, Michigan, Harold Gurewitz, Gurewitz & Raben, PLC, Detroit, Michigan, for Appellants. Kathleen Moro Nesi, Assistant United States Attorney, Detroit, Michigan, for Appellee.
Before: MARTIN and MOORE, Circuit Judges; BUNNING, District Judge.
BOYCE F. MARTIN, JR., Circuit Judge.
Defendants-Appellants-Cross-Appellees Donny Douglas and Jay Campbell appeal their convictions under the Labor Management Relations Act and the Hobbs Act. The United States cross-appeals their sentences. This case is now in its eighth year of litigation. Some of the underlying events transpired over seventeen years ago. Our court, and this same panel, heard a first appeal in this case more than six years ago. United States v. Douglas,
Donny Douglas and Jay Campbell worked as representatives of the United Auto Workers at the General Motors factory in Pontiac, Michigan. While negotiating with General Motors in the 1990s, they pressured General Motors several times to give highly skilled, "journeyman" jobs to two non-qualified relatives of Union members. These jobs paid as much as $150,000 per year, which was approximately double
The United States prosecuted Douglas and Campbell for violations of the Labor Management Relations Act and the Hobbs Act, claiming that they conspired to demand "things of value" and wrongfully used their labor positions to force General Motors to give jobs to two relatives of Union members. The district court dismissed the indictment as insufficient, but this Court reversed when this same panel found that the indictment sufficiently alleged the charges. Subsequently, Douglas and Campbell proceeded to trial and were convicted. They now appeal, arguing that their convictions are not supported by sufficient evidence. The United States cross-appeals their sentences.
Douglas and Campbell appeal their convictions on several grounds: (1) their actions do not constitute a violation of the Labor Management Relations Act, and the district court's jury instruction regarding the Act was an incorrect statement of the law; (2) violating a labor agreement is not a criminally "wrongful" use of a labor position under the Hobbs Act; and (3) the United States's Brady violation at trial warrants a new trial. Additionally, Campbell argues that the district court's jury instruction constructively amended his indictment to include activity not covered by the Labor Management Relations Act.
The United States cross-appeals both sentences, claiming that the district court erred by: (1) using the Blackmail Sentencing Guideline, U.S.S.G. § 2B3.3, rather than the Extortion Sentencing Guideline, U.S.S.G. § 2B3.2; (2) failing to enhance Douglas's and Campbell's total offense level by calculating the loss to General Motors as zero; and (3) varying Douglas's sentence downward to match a departure that Campbell received due to his lung cancer.
A. The Labor Management Relations Act
The Labor Management Relations Act prohibits "any employer . . . to pay, lend, or deliver . . . any money or other thing of value to any representative of any of his employees who are employed in an industry affecting commerce." 29 U.S.C. § 186(a)(1). It further forbids anyone to "request, demand, receive, or accept. . . any payment, loan, or delivery of any money or other thing of value prohibited by subsection (a) of this section." Id. § 186(b)(1). Douglas and Campbell argue that their actions do not fall within the
1. Thing of Value
Douglas and Campbell protest that the word "other" in the phrase "money or other thing of value" constrains "thing of value" to things of monetary value. They also invoke ejusdem generis, a principle of statutory interpretation providing that, "where general words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words." Wash. State Dept. of Soc. & Health Servs. v. Guardianship Estate of Keffeler,
"[A] fundamental canon of statutory construction is that `when interpreting statutes, the language of the statute is the starting point for interpretation, and it should also be the ending point if the plain meaning of that language is clear.'" Thompson v. Greenwood,
2. Third party beneficiaries
Douglas and Campbell argue that they could not have violated section 186(b)(1) because they themselves never received a "thing of value," but plainly, this is not a requirement of the statute. Although section 186(b)(1) outlaws receiving or accepting things of value, it outlaws
Furthermore, we find agreement from our sister circuits. In United States v. DeBrouse,
Accordingly, Douglas and Campbell violated section 186(b)(1) by demanding a thing of value for third party beneficiaries.
3. Constructive amendment
Campbell contends that the jury instructions constructively amended the indictment by permitting the jury to convict on the basis of an uncharged third-party-beneficiary theory. We have explained that jury instructions constructively amend an indictment when they "modify essential elements of the offense charged [so] that there is a substantial likelihood that the defendant may have been convicted of an offense other than the one charged in the indictment." Budd, 496 F.3d at 521 (internal quotation marks omitted).
In this case, the jury instructions did not constructively amend the indictment. The indictment alleges that the defendants "unlawfully. . . demand[ed] . . . the payment. . . of money and things of value in excess of $1,000.00 from General Motors, to wit:  the skilled trades and/or journeyman designation . . . and  employment under that designation with associated wages and benefits for Gordon Campbell and Todd Fante, whom the defendants knew were not qualified." (emphasis added). The indictment clearly put Douglas and Campbell on notice that the United States intended to proceed based upon a third-party-beneficiary theory. Jury instructions to that effect, then, did not constructively amend the indictment.
B. The Hobbs Act
Douglas and Campbell argue that their actions cannot form the basis for criminal liability and be "wrongful" under the Hobbs Act, 18 U.S.C. § 1951(b)(2), merely because the actions violated a collective-bargaining agreement between General Motors and the Union. United States v. Enmons,
Douglas, 398 F.3d at 415 (emphasis added).
The only remaining question is whether the evidence at trial proved what the indictment asserted. We review "the evidence in the light most favorable to the prosecution" and ask whether "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia,
Accordingly, Douglas's and Campbell's actions fell within the Hobbs Act's definition of wrongful.
C. Brady Violation
Douglas and Campbell claim that the United States violated Brady v. Maryland,
Brady violations have three elements: " [t]he evidence at issue must be favorable to the accused, either because it is exculpatory, or because it is impeaching;  that evidence must have been suppressed by the State, either willfully or inadvertently; and  prejudice must have ensued." Strickler v. Greene,
In 1988, approximately eighteen years before Douglas's and Campbell's trial, Hawkins pleaded guilty to attempted receipt or concealment of a stolen "pleasure boat" and "outboard motor" valued over one hundred dollars. He served thirty days in jail. Douglas and Campbell claim that they learned of the conviction only after the case had been submitted to the jury. The district court denied their motion for a new trial because the evidence of Hawkins's prior conviction was "immaterial." The crime occurred eighteen years before trial and eight years before the conduct for which the defendants were
The record bears out the district court's assessment. While Douglas and Campbell mention several matters about which Hawkins testified, they only point to one fact about which no other witness testified— that Douglas and Campbell protracted negotiations for the 1995 Validation Center move. Even assuming that they are correct, that fact was in no way essential to either conviction. Therefore, Hawkins's testimony was not prejudicial, and Douglas's and Campbell's Brady claim fails.
The Probation Office's Presentence Reports calculated both Douglas's and Campbell's sentences using United States Sentencing Guideline section 2B3.3 for Blackmail and Similar Forms of Extortion, which provides a base offense level of nine. It added four points for a loss to General Motors exceeding $20,000 according to sections 2B3.3(b)(1) and 2F1.1(b)(1)(E), and two points for abuse of trust according to section 3B1.3. The resulting total offense level was fifteen. Both Douglas and Campbell had a criminal history category of I, yielding an advisory sentencing range of one and a half years to two years of imprisonment. The United States objected to the use of section 2B3.3 and argued instead for section 2B3.2. It also argued for a higher amount of loss, while Douglas and Campbell claimed that General Motors had lost nothing.
The district court sentenced both defendants according to section 2B3.3 and did not impose a loss enhancement. With an offense level of eleven, the resulting sentencing range was eight months to one year and two months of imprisonment. Because Campbell had lung cancer, the district court reduced his offense level by three. This resulted in a sentencing range of zero to six months of imprisonment. The court sentenced Campbell to no imprisonment, two years of probation including six months of house arrest, and a $4,000 fine. The district court found that the section 3553(a) factors pointed toward "the same conclusion" for Douglas, reduced his total offense level by three, and imposed on Douglas the same sentence that Campbell had received. As opposed to Campbell, Douglas was healthy.
We review de novo whether a district court imposed the correct Sentencing Guideline. United States v. Rivera,
1. Using the blackmail versus extortion Guideline
The district court calculated the sentences using section 2B3.3, which governs "blackmail and similar forms of extortion where there clearly is no threat of violence to person or property." U.S.S.G. § 2B3.3 cmt. n. 1 (1995). That section defines blackmail as "a threat to disclose a violation of United States law unless money or some other item of value is given." Id. The United States believes this choice
Id. § 2B3.2 cmt. n. 2 (emphasis added). "[C]ommentary in the Guidelines Manual that interprets or explains a guideline is authoritative unless it violates the Constitution or a federal statute, or is inconsistent with, or a plainly erroneous reading of, that guideline." Stinson v. United States,
The district court erred in applying section 2B3.3 and should have applied section 2B3.2. The difference between the two sections is the type of action threatened. Section 2B3.3 contemplates blackmail, which is defined as threatening to reveal a violation of federal law unless money or some other item of value is given, and similar threats. These types of threats involve making public an established fact; revealing that which already exists. In a sense, the victim of blackmail created the possibility for his injury. Quite differently, section 2B3.2 contemplates extortion by force or threat of injury or serious damage. These types of threats involve attacks upon more "innocent" victims who have in no way brought upon themselves any harm. Furthermore, both sections contemplate that a threat is covered by one or the other, not both. See U.S.S.G. § 2B3.3(c)(2) ("If the offense involved extortion by force or threat of injury or serious damage, apply § 2B3.2.").
Douglas and Campbell argue that the threat did not rise to the serious levels explained in section 2B3.2 because the threatened action would not have driven General Motors out of business. However, even assuming that an on-going strike would not have terminated General Motors entirely, that assertion ignores that the Pontiac plant might have been crippled or ruined. Cf. United States v. Williams,
As the state of Michigan has sadly witnessed time and time again, large automotive manufacturers will close and consolidate plants if necessary, especially if doing so will result in more favorable labor conditions. Here, Douglas and Campbell threatened to prolong an already lengthy
2. The loss to General Motors
The Probation Office proposed that General Motors suffered a loss of $30,474.76 as a result of complying with Douglas's and Campbell's threat, and accordingly proposed a four-level enhancement to Douglas's and Campbell's offense levels. It measured the loss according to the salaries that General Motors paid to the unqualified relatives before GM "evaluated and retained" those men "based on their work performance." The United States, Douglas, and Campbell all objected to this recommendation. The district court rejected the loss enhancement entirely because the relatives performed their jobs well and caused General Motors no "workplace loss." In other words, General Motors obtained valuable services in exchange for the salaries that it paid. The United States appeals the loss determination.
First, the parties disagree about whether "workplace loss" is a meaningful measure in an extortion case. Douglas and Campbell cite many older cases in which courts concluded that the value of fraudulently provided services offset any loss for purposes of loss calculation. See, e.g., United States v. Maurello,
Second, the district court did not consider General Motors's consequential losses. Section 2B3.2 expressly anticipates consequential losses, see U.S.S.G. § 2B3.2 cmt. 5, but consequential losses are irrelevant under section 2B3.3, which looks only at "the greater of the amount obtained or demanded," U.S.S.G. § 2B3.3(b)(1). Because we conclude that the district court should have applied section 2B3.2, the district court should have also determined whether General Motors suffered any consequential losses.
Here, when General Motors hired the non-qualified relatives, they violated the hiring priorities set forth in the national and local Union agreements. As a result, multiple qualified Union members filed grievances because they should have had higher priority. General Motors had to pay $450,000 in legal fees, plus salaries and
3. Downward variance in Douglas's sentence
While the district court's use of the incorrect Guidelines section requires that we remand this matter for resentencing, the United States additionally claims that Douglas's sentence is substantively unreasonable because the district court relied upon an improper factor—the disparity between Douglas's and Campbell's sentences. Pursuant to section 5H1.4, Campbell received a downward departure equivalent to three offense levels because he had lung cancer. Although Douglas was not ill, the district court reduced his offense level by the same amount to "avoid unwarranted sentencing disparities among defendants with similar records who have been found guilty of similar conduct."
Sentencing decisions must be both procedurally and substantively reasonable. Gall, 552 U.S. at 51,
Douglas and Campbell violated section 186(b) of the Labor Management Relations Act by threatening to lengthen a labor strike if jobs—things of value—were not given to two unqualified relatives of Union members—third party beneficiaries. Furthermore, because this action flew in the face of the national and local Union agreements, it was wrongful pursuant to the Hobbs Act. Accordingly, we
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