Certiorari Denied January 10, 1977. See 97 S.Ct. 736.
This is an appeal pursuant to 18 U.S.C. § 3731 from an order of the District Court dismissing, prior to trial, counts one and two of an eight count indictment alleging gambling and racketeering offenses in violation of the Organized Crime Control Act of 1970, 84 Stat. 922. The indictment charged twenty two defendants in the various counts, with count one charging sixteen of them with being associated with an enterprise engaged in interstate commerce and conducting its affairs through a pattern of racketeering activity and through the collection of debts in violation of 18 U.S.C. § 1962(c);
The gravamen of the two counts before us (counts one and two) is that the named defendants had conducted a large scale gambling business through a pattern of racketeering activity and the collection of unlawful debts, as defined in 18 U.S.C. § 1961(1), (5) and (6).
1. The Language of the Act:
We first note that each of the four paragraphs of Section 1962 begins with the all inclusive phrase: "It shall be unlawful for any person . . ." who has received any income derived from any pattern of racketeering activity, etc., to use any part of such income in the acquisition of "any enterprise engaged in . . . interstate or foreign commerce." (emphasis supplied). The word "any" is explicit. In addition, we note that in Section 1961 the Congress in defining the words "person" and "enterprise" again uses the word "any". In the light of the continued repetition of the word "any" we cannot say that "a reading of the statute" evinces a Congressional intent to eliminate illegitimate businesses from the orbit of the Act. On the contrary we find ourselves obliged to say that Title IX in its entirety says in clear, precise and unambiguous language — the use of the word "any"
2. The Cases on Title IX:
If the language of Title IX is not found to be so explicit as we hold it to be and we are obliged to construe the language of Title IX, we come out with the same result. As this Circuit held in United States v. Parness, 503 F.2d 430, 439 fn. 12 (1974)
These new penal prohibitions, enhanced sanctions, and new remedies clearly extend to an illegitimate business as well as a legitimate one; to read the Act otherwise does not make sense since it leaves a loophole
We note that three other Circuits have reached this same result.
Reversed and remanded.
VAN GRAAFEILAND, Circuit Judge (dissenting):
Because I believe that the majority's holding radically extends federal jurisdiction to virtually every criminal venture affecting interstate commerce, I must dissent. Although such a large scale incursion by the federal government into matters traditionally of local concern may be constitutionally permissible, I do not believe that such a step should be taken in the absence of clear Congressional direction. With all due respect to my brothers, I am unable to find such a mandate in either the statutory language or the legislative history of Title IX of the Organized Crime Control Act of 1970, 84 Stat. 922, 941-948.
The majority places great reliance on the word "any" which precedes "enterprise" in 18 U.S.C. § 1962. The significance of this word escapes me. "Enterprise" is defined in 18 U.S.C. § 1961(4). If, in fact, that definition encompasses only legitimate business or organizations, placing the word "any" before the defined phrase in § 1962 should not expand its meaning.
Section 1961(4), necessarily at the core of the controversy before us, yet curiously omitted from the majority's opinion, defines "enterprise" as "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." While the concluding language of this definition is subject to an expansive interpretation, the well established doctrine of ejusdem generis warns against expansively interpreting broad language which immediately follows narrow and specific terms. United States v. Insco, 496 F.2d 204, 206 (5th Cir. 1974). To the contrary, this maxim counsels courts to construe the broad in light of the narrow. United States v. Baranski, 484 F.2d 556, 566 (7th Cir. 1973). Viewed in this manner, and keeping in mind the traditional rule resolving ambiguities in penal statutes in favor of lenity, United States v. Campos-Serrano, 404 U.S. 293, 297, 92 S.Ct. 471, 30 L.Ed.2d 457 (1971); Rewis v. United States, 401 U.S. 808, 812, 91 S.Ct. 1056, 28 L.Ed.2d 493 (1971); United States v. Archer, 486 F.2d 670, 680 (2d Cir. 1973),
Even were I to agree with the majority's facial reading of the statute, I would, nevertheless, feel duty bound to examine the legislative history to ascertain Congressional intent. In expounding a statute, we must not be guided by a single sentence or word therein. Rather, we must look to the provisions of the whole law so that we may give effect to the legislative will. Philbrook v. Glodgett, 421 U.S. 707, 713, 95 S.Ct. 1893, 44 L.Ed.2d 525 (1975). "It is a familiar rule, that a thing may be within the letter of the statute and yet not within the statute, because not within its spirit, nor within the intention of its makers."
A review of the legislative history of Title IX leaves no doubt that Congress never contemplated that "enterprise" as used in §§ 1961, 1962 would extend beyond legitimate businesses or organizations. See S.Rep. No. 91-617, 91st Cong., 1st Sess. (1969); H.R.Rep. No. 91-1549, 1970 U.S. Code Cong. & Admin.News, pp. 4007, 4032-4036; Comment, Organized Crime and the Infiltration of Legitimate Business: Civil Remedies for "Criminal Activity", 124 U.Pa.L.Rev. 124, 204-206 (1975). There is nothing in the floor debates that would indicate that any member of Congress expected or desired the far reaching interpretation of Title IX postulated by the majority herein. 116 Cong.Rec. 585-586, 35,193-35,319 (1970); United States v. Moeller, 402 F.Supp. 49, 58 n.8 (D.Conn.1975); United States v. Frumento, 405 F.Supp. 23, 29-30 (E.D.Pa.1975); United States v. Mandel, 415 F.Supp. 997, 19 Cr.L. 2032 (D.Md.1976). Perhaps the most convincing indications of Congressional intent are contained in a lengthy and scholarly response to Title IX's critics by Senator John L. McClellan, the bill's principal sponsor. McClellan, The Orgainzed Crime Act (S. 30) or its Critics: Which Threatens Civil Liberties?, 46 Notre Dame Lawyer 55, 140-146, 196-197 (1970). From his opening observation that "Title IX is aimed at removing organized crime from our legitimate organizations", id. at 141, to his conclusion that § 1961 et seq. offers the first major hope of eradicating the "organized criminal influence in legitimate commerce," id. at 146, Senator McClellan clearly recognizes the scope of his bill as limited to "racketeering infiltration of legitimate business", id. at 196.
While the majority's disregard of legislative intent is troublesome, it pales in the shadow of the prospective consequences of their action on sensitive federal-state relationships and limited federal police resources and the resultant transformation of relatively minor state offenses into federal felonies by mere geographic happenstance. Rewis v. United States, supra, 401 U.S. at 812, 91 S.Ct. 1056.
The end result of the majority's expansive interpretation of § 1962(c) is to accord the word "enterprise", intended by Congress to be synonymous with commercial business, parity with the term "conspiracy". Hereafter, the Government will justifiably feel free to utilize § 1962(c) to prosecute any unlawful venture engaging in, or the activities of which affect, interstate commerce where the participants therein committed any two acts of "racketeering activity". United States v. Moeller, supra, 402 F.Supp. at 59. The Government suggests that its prosecutorial efforts will be kept in check by the statute's requirements of (1) a "pattern of racketeering activity", and (2) an effect on interstate commerce. I cannot agree. Only two acts of racketeering activity are required to establish a "pattern". 18 U.S.C. § 1961(5). Moreover, § 1961(1)'s definition of racketeering activity is as broad as it is long, encompassing any murder, kidnapping, gambling, arson, robbery, bribery, extortion or narcotics transaction chargeable under any State law and punishable thereunder by more than one year's imprisonment, as well as the violation of any of a series of enumerated federal criminal statutes. The interstate commerce requirement of § 1962 is likewise unlikely to greatly confine the scope of federal law enforcement efforts. In criminal statutes containing similar requirements, a de minimis involvement with, or effect on, commerce has frequently been found sufficient. See, e. g., United States v. Crowley, 504 F.2d 992, 997-998 (7th Cir. 1974) [Hobbs Act, 18 U.S.C. § 1951]; United States v. Kahn, 472 F.2d 272, 285-286 (2d Cir.), cert. denied, 411 U.S. 982, 93 S.Ct. 2270, 36 L.Ed.2d 958 (1973) [Travel Act, 18 U.S.C. § 1952].
Appellees are alleged to have engaged in illegal gambling, concededly a racketeering activity. In so doing, they have not invested in, acquired control of, or employed the resources of any legitimate commercial concern. The "enterprise" the majority finds is the gambling operation itself, a de facto conspiracy whose sole raison d'être was the carrying on of criminal conduct. While Congress has recognized the desirability of federal prosecution of illegal gambling, previously a matter solely of State concern, by the passage of Title VIII of the Organized Crime Control Act of 1970, 84 Stat. 922, 936-940, 18 U.S.C. § 1955, it has placed strict limits on those gambling operations which warrant federal intervention. Thus, § 1955 comes into play only when the gambling business involves five or more persons and remains in substantially continuous operation for more than thirty days or grosses $2,000 in a single day. In adopting these limitations, Congress intended to confine federal criminal jurisdiction to "relatively large gambling operations". See McClellan, Organized Crime Control Act, supra, at 138. The interpretation of § 1962 adopted by my brothers effectively circumvents the criteria of Title VIII. Because racketeering activity under § 1961 includes any gambling chargeable under any State law and punishable by more than one year's imprisonment,
Although the instant indictment alleges a violation of federal law [18 U.S.C. § 1955] as the racketeering activity, the ramifications of the majority's expansive interpretation of § 1962 become even more pronounced where the racketeering activity charged is a violation of State law. In United States v. Moeller, supra, for example, defendants were indicted for their role in the burning of a Shelton, Connecticut rubber plant, arson being a crime punishable by imprisonment of more than one year under Connecticut law. Utilizing the majority's reasoning, the Government defined the "enterprise" as a group of individuals associated in fact for the purpose of burning down the Shelton plant. 402 F.Supp. at 57. Arguing that § 1962(c) was designed solely to eliminate the infiltration of "legitimate" businesses, defendants moved to dismiss the indictment. The District Court agreed, and no appeal was taken from its decision. As I understand footnote 6 of the majority's opinion, Moeller (at least so far as it defined "enterprise") is no longer good law in this Circuit.
Application of the Court's holding today to the facts in Moeller illustrates the far-reaching effect of our expansive interpretation of "enterprise". Without a clear and
Although the question at bar has been resolved on several occasions by the district courts of this Circuit, with varying results,
In United States v. Campanale, 518 F.2d 352, 364 (9th Cir. 1975), cert. denied, 44 U.S.L.W. 3397 (Jan. 13, 1976), the Ninth Circuit held only that § 1962 applied to "business enterprises", however small. There was not the slightest hint that the business involved, Pronto Loading and Unloading Company, was not a legitimate commercial concern. Neither was there any language to suggest that the Ninth Circuit would have upheld the conviction regardless of the legitimacy of the enterprise.
In United States v. Cappetto, 502 F.2d 1351, 1358 (7th Cir. 1974), cert. denied, 420 U.S. 925, 95 S.Ct. 1121, 43 L.Ed.2d 395 (1975), the Seventh Circuit held that § 1962 applied to gambling enterprises, legitimate or not. Quite aside from the fact that Cappetto was a civil, not criminal, action and, therefore, did not bring into play the canon of lenity concerning the ambit of ambiguous criminal statutes, Rewis v. United States, supra, 401 U.S. at 812, 91 S.Ct. 1056. Bell v. United States, 349 U.S. 81, 83, 75 S.Ct. 620, 99 L.Ed. 905 (1955), I believe that the opinion therein is unable to withstand careful scrutiny. Appellants in Cappetto contended, as is argued herein, that Congress' purpose in enacting § 1962 was to protect "legitimate business" against infiltration and not to prohibit racketeering itself. The Seventh Circuit rejected this argument, concluding that "both the statutory language and the legislative history . . . support the government's contrary interpretation of the Act." 502 F.2d at 1358. While conceding that one of Congress' targets was "the infiltration of legitimate organizations by organized crime", Sen.Rep. 91-617, supra, p. 80 (1969), and that § 1962(a) was aimed at that target, the Court went on to conclude that Congress also intended to prohibit "any pattern of racketeering activity in or affecting commerce" and that §§ 1962(b) and (c) were aimed at that target.
For all of the preceding reasons, I would decline to fall in line behind the Fifth and Seventh Circuits