Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-87-02428/USCOURTS-ca10-87-02428-0/pdf.json

Parties Involved:
Carrie Renee Gaudreau
Appellee
State of Colorado
Amicus Curiae
United States of America
Appellant

Document Text:

P U B L I S H 

IN THE UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

UNITED STATES OF AMERICA, 

Plaintiff-Appellant, 

v. 

CARRIE RENEE GAUDREAU and 

CONRAD PAUL GAUDREAU, 

aka JOSEPH GAUDREAU, 

Defendants-Appellees. 

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Nos. 87-2428 

87-2432 

\ 

FILED 

United St.ates Court of Appeals 

Tenth Circuit 

OCT 1 71988 

ROBERT L. HOOCKER 

Clerk 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. No. 87-CR-41) 

Gerald J. Rafferty, Assistant United States Attorney, Denver, 

Colorado (Robert N. Miller, United States Attorney, and Bruce F. 

Black, Assistant United States Attorney, Denver, Colorado, were 

also on the brief), for Plaintiff-Appellant 

Charles 

Colorado 

Colorado, 

Gaudreau 

Szekeley, Assistant Federal Public Defender, Denver, 

(Michael G. Katz, Federal Public Defender, Denver, 

was also on the brief), for Defendant-Appellee Carrie 

Jeffrey S. English, Lakewood, Colorado, for Defendant-Appellee 

Conrad Paul Gaudreau 

Duane Woodard, Attorney General, Charles B~ Howe, Deputy Attorney 

General, Richard H. Forman, Solicitor General, and David L. Saine, 

Assistant Attorney General, Denver, Colorado, filed a brief for 

the State of Colorado as Amicus Curiae · 

Before HOLLOWAY, Chief Judge, and McKAY and TACHA, Circuit Judges 

HOLLOWAY, Chief Judge 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 1 
This appeal involves a constitutional challenge to Colorado's 

commercial .. bribery statute, Colorado Revised .. Statutes §§ 18-5-

401 ( l) (a) and (l)(d) (1986), when used as a component of a RICO 

prosecution. The d~fendants-appellees Carrie and Joseph Gaudreau, 

the remaining defendants involved on this appeal, argue that the 

state statute's prohibition of a "knowing violation of a duty of 

fidelity" is unconstitutionally vague and therefore cannot form 

the basis of a racketeering charge. The district court agreed 

and dismissed the RICO counts of the indictment. 

1404. The government appeals~ We reverse. 

667 F.Supp. 

I. 

Oscar Lee was variously Vice-President, Assistant VicePresident, and Executive Assistant Vice-President of the 

Electrical Production Division of Public Service Company of 

Colorado (Public Service). Superseding Indictment, Introduction, 

~l. In each of these positions Mr. Lee had the authority t0 

approve contracts for the purchase of goods and services by the 

Electrical Production Division of Public Service. Id. at 1124. 

Defendant Carrie Gaudreau was variously Secretary and 

Administrative Assistant to the Vice-President of the Electrical 

Production Division and Production Coordinator of Public Service. 

Id. at 113. Defendant Joseph Gaudreau, Carrie's father, was the 

manager of the Denver office of Zachary Industries, a supplier to 

Public Service. Id. at ~4. 

In essence, the indictment against the Gaudreaus alleges 1 

1 

At this stage of the case the allegations in the indictment 

must be taken as true. Boyce Motor Lines v. United States, 342 

U.S. 337, 343 n.16 (1952). 

2 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 2 
that Mr, Lee and the Gaudreaus agreed that Mr. Lee would accept 

_--money-injexchange for :award-ing Public Service contra-cts to certain 

suppliers, in violation of Colorado's commercial bribery statute. 

That statute provides: 

5 felony if 

accept any 

knowingly 

(1) A person commits a class 

he solicits, accepts, or agrees to 

benefit as consideration for 

violating or agreeing to violate a 

fidelity to which he is subject as: 

duty of 

(a) Agent or employee; or 

(d) Officer of an incorporated 

association. 

Colo, Rev. Stat. § 18-5-401 (1986). 2 

This alleged agreement between Mr. Lee and the Gaudreaus 

allegedly amounted to a conspiracy to conduct the affairs of 

Public Service through a pattern of racketeering activity3 in 

2 

Colorado's commercial bribery statute duplicates the 

commercial bribery statute proposed by the American Law Institute 

in Model Penal Code § 228.4 (1980), except for the important 

difference that the Model Penal Code proposes misdemeanor 

penalties and a violation of the Colorado statute is a felony. 

Similar commercial bribery statutes have been uniformly 

upheld in the face of vagueness challenges. See United States v. 

Perrin, 580 F.2d 730, 735 (1979); Ex Parte Mattox, 683 S.W.2d 93 

(Tex. App.3 Dist. 1984); State v. Brewer, 129 S.E.2d 262, 277 

(1963), appeal dismissed for want of a substantial federal 

question, 375- U.S. 9 (1963); People v. Nankervis, 46 N.W.2d 592, 

595 (1951). 

3 

The Superseding Indictment, Count 2, 12 alleges that Mr. Lee 

and the Gaudreaus "did knowingly combine, conspire, confederate 

and agree together .•. to conduct and participate, directly and 

indirectly, in the conduct of [Public Service's] affairs through a 

pattern of racketeering activity ..... " 

3 

.. ,:(.· .. ,' 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 3 
violation of 18 u.s.c. § 1962(d), ·generally known as the Racketeer 

~~~nfluenced Corrupt .Organizations Act (RICO). 4 

The Gaudreaus moved to dismiss the indictment on the ground 

that violations of the Colorado statute cannot serve as predicate 

acts for a RICO charge because the state statute is 

unconstitutionally vague and thus violates the Due Process Clause 

of the Fourteenth Amendment. The district court held that: 

Subsections (l)(a) and (l)(d) of the Colorado 

commercial bribery statute, C.R.S. § 18-5-401, are 

void for vagueness, both facially and as applied in 

this case. Because alleged violations of that 

statute are the predicate offense for the RICO 

violations, Counts One and Two of the indictment 

must be dismissed. 

667 F. Supp. at 1414. The government appeals. 

II. 

The void-for-vagueness doctrine requires that a penal statute 

define the criminal offense with sufficient definiteness that 

4 

18 U.S.C. § 1962(d) provides: "It shall be unlawful for any 

person to conspire to violate ... (18 U.S.C. § 1962(c))." 

18 U.S.C. § 1962(c) provides: "It shall be unlawful for any 

person employed by . any enterprise engaged in, or the 

activities of which affect, interstate ..• commerce, to conduct 

or participate, directly or indirectly, in the the conduct of such 

enterprise's affairs through a pattern of racketeering activity . II . 

18 U.S.C. § 1961(5) defines "pattern of racketeering 

activity" to require at least two acts of racketeering activity. 

18 u.s.c. § 1961(1) defines "racketeering activity" as "any 

act •.. involving ••. bribery ... which is ~hargeable under 

state law and punishable by imprisonment for more than one year." 

Colo. Rev. 

bribery, a class 

imprisonment. 

Stat. § 18-l-105(l)(a) 

5 felony, punishable 

4 

(1986) makes commercial 

by one to two years' 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 4 
-ordinary people can understand what conduct is -prohibited and in a 

manner that,-. does not encourage ,arbitra~y and- discriminatory 

enforcement. Kolender v. Lawson, 461 U.S. 352, 357 (1982). The 

same facets of a statute usually raise concerns of both fair 

notice and adequate enforcement standards. Hence the analysis of 

these two concerns tends _to overlap. The Supreme Court, however, 

while recently recognizing the second concern as more important, 

continues to treat each as an element to be analyzed separately. 

See id. at 357-58. 

The degree of specificity which the Constitution demands 

depends on the nature of the statute. Criminal statutes must be 

more precise than civil statutes because the consequences of 

vagueness are more severe. 5 Further, a scienter requirement may 

mitigate a criminal law's vagueness by ensuring that it punishes 

only chose who are aware their conduct is unlawful. 6 Also, 

regulatory statutes governing business activities may be less 

precise because the conduct proscribed is usually in a narrow 

category and the regulated enterprise may have the ability to 

clarify the meaning of the regulation by inquiring of an 

administrative agency or resort to an adminstrative process. 7 

Finally, the Constitution demands more clarity of laws which 

5 

Winters v. New York, 333 U.S. 507, 515 (1948); see also 

Kolender, 461 U.S. at 359 n.8. 

6 

Screws v. United States, 325 U.S. 91, 101-104 

(plurality opinion). 

7 

(1945) 

Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 

4 8 9 , 4 9 8 ( 19 81 ) ; uni t e d states v . Mazur i e , 41 9 u . s . 5 4 4 ( 1 9 7 4 ) ; 

see also Joseph Seagram & Sons, Inc. v. Hostetter, 384 U.S. 35, 49 

(1966); McGowan v. Maryland, 366 U.S. 420, 428 (1961). 

5 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 5 
threaten to inhibit constitutionally protected conduct, especially 

, -... conduct protected ,,.,by ... the. First Amendment. 8 The-defendants have 

not argued, nor do we perceive, that the Colorado commercial 

bribery statute threatens to chill constitutionally protected 

conduct. Nevertheless, the statute imposes criminal penalties and 

is not merely a business regulation. "[C]riminal responsibility 

should not attach where one could not reasonably understand that 

his contemplated conduct is proscribed." United States v. 

National Dairy Products Corp., 372 U.S. 29, 32-33 (1963). 

We address two preliminary issues. The Gaudreaus argue that 

the statute is unconstitutional on its face and as applied to 

them. Their facial challenge is inappropriate. Facial challenges 

are proper in two circumstances. First, a statute may be 

challenged on its face when it threatens to chill constitutionally 

protected conduct, 9 especially .conduct protected by _the First 

Amendment. If a statute is so vague that it can reasonably be 

interpreted to prohibit constitutionally protected speech as well 

as conduct the state may constitutionally forbid, people may 

choose to refrain from speaking rather than challenge the 

8 

Grayned v. City of Rockford, 40& U.S. 104, 109 n.5 (1972); 

Baggett v. Bullitt, 377 U.S. 360, 372 (1964); United States v. 

National Dairy Products Corp., 372 u.s. 29, 36 (1963); Smith v. 

California, 361 U.S. 147, 151 (1959); Winters v. New York, 333 

U.S. 507, 515 (1948). 

9 

Colautti v. Franklin, 439 U.S. 379, 390-91, 394, 396 

(1979)(statute subjecting doctors· to criminal liability if they 

fail to use certain abortion procedures when the fetus is viable 

or there is sufficient reason to believe that the fetus may be 

viable held unconstitutionally vague on its face); Lanzetta v. New 

Jersey, 306 U.S. 451 (1939) (statute making it a crime to be a 

"gangster" - "a member of any gang consisting of two or more 

persons," who has been convicted for certain prior offenses - held 

facially void for vagueness). 

6 

., 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 6 
statute's constitutionality in their criminal prosecution. Thus, 

freedom -of speech will· be chilled. · We allow a person who is 

prosecuted for conduct which the state may constitutionaly forbid 

to challenge the statute as vague on its face, rather than 

restricting him to challenging it as applied to his conduct, 

because those who refrain from speech will never have a chance to 

make their claims in court. In this way the claims of those who 

would be silenced are heard. Vagueness and overbreadth challenges 

are similar in this respect. Kolender, 461 U.S. at 358-359 n.8. 

Second, a facial challenge to the constitutionality of a 

statute may in some instances be appropriate on pre-enforcement 

review. In a declaratory judgment action no one has been charged 

so the court cannot evaluate the statute as applied. In these 

cases, the challenger may attempt to facially attack the statute 

as "vague in all of its applications." Hoffman Estates v. 

Flipside, Hoffman Estates, Inc., 455 U.S. 489, 497 (1982). If a 

statute is vague in all its applications then it will necessarily 

be vague "as applied" in every case. The statute would thus be 

void on its face. On the other hand, since the Colorado statute 

challenged here does not threaten to chill constitutionally 

protected conduct, and has been applied to the challengers, we 

hold that we must examine the statute as applied for vagueness in 

light of the conduct with which the Gaudreaus are charged. 10 

10 

Flipside, 455 U.S. at 494-495; United .States v. Powell, 423 

U.S. 87, 92-93 (1975); Mazurie, 419 U.S. at 550; National Dairy, 

372 U.S. at 32-33, 36; Robinson v. United States, 324 U.S. 282, 

285-286 (1945); United States v. Hines, 696 F.2d 722, 727 (10th 

Cir. 1982) (Oklahoma commercial gambling statute upheld against 

vagueness challenge and "appellants lack[ed] standing to attack 

the statute on the basis·that it might be unconstitutionally vague 

as applied to the conduct of others").· 

7 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 7 
As for the second preliminary issue, a federal court 

-" •. evaluating a .vagueness challenge to a, state -law .must read the 

statute as it is interpreted by the state's highest court. 11 In 

People v. Lee, 717 P.2d 493, 496 (Colo. 1986), the Colorado 

Supreme Court interpreted the statute's phrase "duty of fidelity'' 

to mean "duty of loyalty" as the term has been defined at common 

law. 12 We therefore evaluate the statute for vagueness in light 

of that interpretation. 13 

11 

Flipside, 455 U.S. at 494 n.5; Wainwright v. Stone, 414 U.S. 

21, 22-23 (1973)("For the purpose of determining whether a state 

statute is too vague and indefinite ..• we must take the statute 

as though it read precisely as the highest court of the State has 

interpreted it."). 

12 

Defendants argue that this limiting construction has no 

relevance to their vagueness challenge because Lee was evaluating 

a charge that the law impermissibly allowed the person to whom the 

duty is owed unfettered discretion in defining the duty. 

The concern which underlay the improper delegation attack in 

Lee (that duty of fidelity is too subjective a term upon which to 

base criminal liability) is similar to the argument, which 

defendants make in this case, that the law does not give fair 

notice and provides excessive opportunities for arbitrary and 

discriminatory enforcement. Therefore, we think the limiting 

construction placed upon the statute in Lee must be respected in 

this case. 

13 

The Superseding Indictment alleges that Mr. Lee held various 

positions as an officer of Public Service and as Manager of its 

Electrical Production Division. Superseding Indictment, 

Introduction, ~ 1. The Colorado Supreme Cburt has held that a 

director's duty of loyalty to his corporation is defined by the 

law of the state of incorporation. Great Western Producers CoOperative v. Great Western United Corporation, 613 P.2d 873, 878 

n.4 (Colo. 1980). Subsequently, however, the Colorado Court 

applied Restatement (Second) of Conflict of Laws § 309 (1971), 

which states the rule that: 

The local law of the state of incorporation will be 

applied to determine the existence and extent of a 

director's or officer's liability to the 

corporation, its creditors and shareholders, except 

(Footnote continued on next page) 

8 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 8 
A. Fair -Notice 

. -.We.turn now to the first .. elemenh~of .. our vagueness analysis, 

the fair notice question. The Supreme Court has stated the test 

as follows: "As generally stated, the void-for-vagueness doctrine 

requires that a penal statute define the criminal offense with 

sufficient definiteness that ordinary people can understand what 

conduct is prohibited . II Kolender, 461 U.S. at 357. 

The Gaudreaus argue that the statute did not give them fair 

notice that their conduct was prohibited because they could have 

discovered that Mr. Lee's duty of loyalty forbade him from taking 

bribes only by consulting cases, other statutes, and treatises. 

They say that while the statute may give notice to an ordinary 

lawyer, it does not give notice to an ordinary layman. Defendant 

Carrie Gaudreau argues that "the language contained in the statute 

itself must define the crime.'' Brief of Appellee Carrie Gaudreau 

at 13 (emphasis in original). 

(Footnote continued): 

where, with respect to the particular issue, some 

other state has a more significant 

relationship .... 

See Ficor, Inc. v. McHugh, 639 P.2d 385, 391 (Colo. 1982)(Colorado 

law held to govern rights and duties between directors and 

officers of District of Columbia corporation and corporation'$ 

creditors because virtually all of corporation's activities were 

conducted in Colorado and all of its assets were located there). 

Public Service was incorporated in Colorado. Public Service 

Company of Colorado v. Blue River Irrigation Co., 753 P.2d 737 

(1988). The Superseding Indictment alleges that at all times 

material to the indictment Mr. Lee was a resident of Brighton, 

Colorado, IR. Item 2 at 3, and that all of Mr. Lee's racketeering 

acts contemplated by the conspiracy occurred in Colorado. IR. 

Item 2 at 13, 17-18. Thus it seems clear that Colorado law 

defines Mr. Lee's duty of loyalty and the briefs of the parties 

have not suggested the applicability of any other law. 

9 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 9 
Such broad arguments are ·foreclosed by decisions of the 

. Supn~me Court .. , The• Court has-.· .. consistently held statutes 

sufficiently certain when they employ words or phrases with "a 

well-settled common law meaning, notwithstanding an element of 

degree 

differ. 

in the definition as to which estimates might 

II Connally v. General Construction Co., 269 U.S. 

385, 391 (1926). 14 

As discussed above, we evaluate Carrie and Joseph Gaudreau's 

vagueness challenges in light of the conduct with which they are 

charged: conspiring with Mr. Lee to engage in a pattern of 

commercial bribery. Although the prosecution has directed us to 

no Colorado cases or statutes specifically addressing this issue, 

the authorities are unanimous that an officer or agent breaches 

his duty of loyalty to his corporation or principal by accepting 

bribes to compromise his pr'incipal I s 

Cyclopedia of Corporations, § 884 states: 

interests. 

14 

Since the directors and other officers of 

a corporation occupy a· fiduciary or quasitrust relation toward the corporation and the 

stockholders collectively, they cannot, either 

directly or indirectly, in their dealings on 

behalf of the corporation with others, or in 

Fletcher, 

See ·also Rose v. Locke, 423 p.s. 48, 50 (1975) ("crimes 

against nature" sufficiently defined to include conduct of 

defendant in light of prior state court decisjons); Nash v. United 

States, 229 U.S. 373, 377 (1912)(Sherman Act's criminal 

prohibition of conspiracy in restraint of trade, adopting common 

law interpretation, valid); Screws, 325 U.S. at 103-105 (plurality 

opinion upholding civil rights criminal prohibition of willful 

deprivation of constitutional rights, as made specific by express 

terms of the Constitution or decisions interpreting them); but cf. 

International Harvester v. Kentucky, 234 U.S. 216, 223 (191~ 

For criticism of the Court's application of the fair notice 

requirement see John Calvin Jeffries, Jr., Legality, Vagueness, 

and Construction of Penal Statutes, 71 Va.L.Rev. 189, 205-212 

(1985). 

10 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 10 
. any other transaction in which they are under 

a duty to guard the interests of the 

corporation, .make. any prof it, or acquire any 

other personal benefit or advantage, not also 

enjoyed by the other stockholders. [S]tated in 

its most general form, the rule is that 

directors or other officers of a corporation 

cannot make a personal profit out of their 

office. (Emphasis added). 

Similarly, the Restatement (Second) of Agency explains that an 

agent owes a duty of loyalty to his principal which requires him 

to refrain from acting on behalf of an adverse party, 15 and to 

turn over profits he makes, 16 in connection with transactions he 

handles on behalf of the principal. Consequently, in the context 

of the Gaudreaus' alleged conduct, the Colorado statute and the 

common law meaning of "duty of loyalty" provide constitutionally 

sufficient notice that Mr. Lee's acceptance of bribes in his 

dealings pn behalf of Public Service would violate the statute. 17 

15 

"Unless otherwise agreed, an agent is subject to a duty to 

his principal not to act on behalf of an adverse party in a 

transaction connected with his agency without the principal's 

knowledge." Restatement (Second) of Agency, § 391 (1958). 

16 

"Unless otherwise agreed, an agent who makes a profit in 

connection with transactions conducted by him on behalf of the 

principal is under a duty to give such profits to the principal." 

Restatement (Second) of Agency, § 388 (1958). See Byer v. 

International Paper Co., 314 F.2d 831 (10th Cir.· 1963) (manager of 

lumber yard held liable for kickbacks he received in• exchange for 

extending credit of employer to a customer). 

17 

Laws cannot define the boundaries of impermissible conduct 

with mathematical certainty. "Whenever the law draws a line there 

will be cases very near each other on opposite sides. The precise 

course of the line may be uncertain, but no one can come near it 

without knowing that he does so, if he thinks, and if he does so 

it is familiar to the criminal law to make him take the risk. Nash 

v. United States, 229 U.S. 373." United States v. Wurzbach, 280 

U.S. 396, 399 (1930). 

11 

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Additionally, the Supreme ·Court has recognized that "a 

scienter requ.ir.emen t .may, mitigate a···. law's -vagueness, especially 

with respect to the adequacy of notice to the complainant that his 

conduct is proscribed ••.. " Flipside, 455 U.S. at 499; see 

~' Colautti v. Franklin, 439 U.S. 379, 395 (1979); Boyce Motor 

Lines, Inc. v. United States, 342 U.S. 337, 342 (1952); Screws v. 

United States, 325 U.S. 91, 101-103 (1945); see also Murphy v. 

Matheson, 742 F.2d 564, 573-74 (10th Cir. 1984); M.S. News Co. v. 

Casado, 721 F.2d 1281, 1290 (10th Cir. 1983); United States v. 

Salazar, 720 F.2d 1482, 1485-86 (10th Cir. 1983), cert. denied, 

469 U.S. 1110 (1985). 18 The Colorado statute prohibits enumerated 

classes of people from "knowingly violating or agreeing to violate 

a duty of fidelity .• II The type of scienter which the 

prosecution must prove is precisely the type that overcomes the 

objection that the Colorado statute may punish without fair 

warning to the accused; 19 the prosecution must prove beyond a 

18 

"[T)he requirement of a specific intent to do a prohibited 

act may avoid those consequences to the accused which may 

otherwise render a vague or indefinite statute invalid ••.. The 

requirement that the act must be willful or purposeful may not 

render certain, for all purposes, a statutory definition of the 

crime which is in some respects uncertain. But it does relieve 

the statute of the objection that it punishes without warning an 

·offense of which the accused was unaware." Screws, 325 u.s at 

101-102 (quoted in Colautti, 439 U.S. at 395 n. 13). 

19 

" [I) t is evident that .•. the 'scienter' [which mi ti gates 

vagueness) must be some other kind of scienter than that 

traditionally known to the common law -- the knowing performance 

of an act with the intent to bring about that thing, whatever it 

is, which the statute proscribes, knowledge of the fact that it is 

so proscribed being immaterial . • . • Such scienter would 

clarify nothing; a clarificatory 'scienter' must envisage not only 

a knowing what is done but a knowing that what is done is unlawful 

or, at least so wrong that it is probably unlawful." Note, The 

Void-for-Vagueness Doctrine in the Supreme Court, 109 U.Pa.L.Rev. 

67, 87 n.98 (1960) (cited in Flipside, 455 U.S. at 499 n.14.). 

12 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 12 
reasonable doubt that he knew his .duty of fidelity and knew he was 

. 1 t. . 20 . •·· Nl O a l ng l t. 

Further, the Colorado commercial bribery statute requires 

proof that the accused accepted a "benefit as consideration" for 

violating,, his duty of fidelity in order to establish a violation. _ ____, 

The statute prohibits bribery, a concept well-understood by the 

ordinary person. Although an ordinary agent or corporate officer 

may not know exactly the outer boundaries of his duty of loyalty 

in other contexts, when he accepts money or property for 

compromising the interests of his principal he should know that he 

is violating the statute. 

We hold, therefore, that the Colorado commercial bribery 

statute provides sufficient notice that the conduct contemplated 

by the alleged conspiracy between the Gaudreaus and Mr. Lee is 

prohibited. so as to serve as predicate acts for this RICO 

prosecution. 

B. Enforcement Standards 

We now address the second element of our vagueness analysis, 

the adequacy of the enforcement standards. Due process requires 

that ~egislation state reasonably clear guidelines for law 

enforcement officials, juries, and courts to follow in discharging 

their responsibility of identifying and evaluating allegedly 

illegal conduct. 21 Criminal statutes that fail to provide minimal 

20 

To convict the Gaudreaus of conspiracy the prosecution will 

be required to prove that the Gaudreaus knew Mr. Lee's duty of 

loyalty and knew that ~heir agreement encompassed its violation. 

21 

Kolender, 461 U.S. at 357-358; Grayned, 408 U.S. at 108; 

Smith v. Goguen, 415 U.S. 566, 574-575 (1974); United States v. 

(Footnote continued on next page) 

13 

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guidelines may permit "a standardless sweep [that] allows 

, • 0-policemen., ... ,,prosecutors and juries. to- pursue their personal 

predilections." Kolender, 461 tJ.s. at 358 (quoting Smith v. 

Goguen, 415 U.S. 566, 575 (1974); Papachristou v. Jacksonville, 

405 U.S. 156, 165 (1972). 

The Gaudreaus argue that the term "duty of loyalty" fails to 

specify any standard of conduct at all; it "simply has no core," 

citing Smith v. Goguen, 415 U.S. at 578 (1974), and Coates v. 

Cincinnati, 402 U. s. 611 ( 1971). We disagree. In Coates the 

Court held unconstitutionally vague a statute criminalizing acts 

of three or more persons assembling on any sidewalk who "there 

conduct themselves in a manner annoying to persons passing by 

II The statute was impermissibly vague because whether or 

not a person's behavior is "annoying" depends entirely upon the 

subjective judgment of the "persons pa$sing by, 11 or any police 

officer. As the Court said, "[t]he ordinance is vague, not in the 

sense that it requires a person to conform his conduct to an 

imprecise but comprehensible normative standard, but rather in the 

sense that no standard of conduct is specified at all." 402 U.S. 

at 614. Similarly, in Smith the Court held invalid a statute 

imposing criminal liability on one who, inter alia, 

"publicly . 

States. . 

treats contemptuously the flag of the United 

II Again the statute was held impermissibly vague 

because the standard depended on nothing more than the preference 

(Footnote continued): 

Cohen Grocery Co., 255 U.S. 81, 89 (1921); United States v. Reese, 

92 U.S. 214, 221 (1876). 

14 

.., 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 14 
of the police, the court, and the jury for treatment of the flag. 

Al5 U.S. at 578. 22 

The Colorado commercial bribery statute does not create this 

kind of potential for abuse. In contrast to the statutes in Smith 

and Coates, the Colorado statute provides sufficiently clear, 

objective standards to satisfy due process. First, the duty of 

loyalty owed by an agent to his principal, in particular the duty 

of loyalty owed by a corporate officer to his corporation, is 

objectively defined in the'common law and clearly prohibits an 

agent from accepting bribes to compromise his principal's 

interests. 23 Second, the Colorado statute requires the 

prosecution to show that the accused accepted a "benefit as 

consideration" for breaching his duty. Whether or not an agent 

received or agreed to receive money or property as consideration 

for breaching his duty of loyalty is an objectively verifiable 

element of the crime. 

22 

See also Kolender, 461 U.S. at 

persons ~provide "credible and 

police held unconstitutionally vague 

reliability of identification was 

judgment of police). 

23 

360-61, (statute requiring 

reliable" identification to 

because the credibility and 

determined by the subjective 

We note that the Superseding Indictment, Introduction, 11 27 

asserts that Mr. Lee and Carrie Gaudreau were bound by their duty 

of loyalty to adhere to Public Service's employee manual. The 

government, however, abandoned such reliance on the manual at oral 

argument in the district court. Supp. II R. 32. 

The Colorado Supreme Court specifically held in People · v. 

Lee, 717 P.2d 493, 496 (Colo. 1986), that the statute prohibits 

violations of an agent's or corporate officer's duty of loyalty as 

defined by the common law, not as defined by his employer. The 

references to Public Service's employee manual, therefore, may be 

relevant only as they may tend to show it is more probable than 

not that Carrie Gaudreau knew of Mr. Lee's common law duty of 

loyalty to Public Service. 

15 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 15 
In sum, the Colorado commercial bribery statute provides 

-.sufficient enforcement standards to sa.tisfy ".t-be .. _i:equir.ement _ that 

a legislature establish minimal guidelines to govern law 

enforcement." Kolender, 461 U.S. at 358 (quoting Smith, 415 U.S. 

at 474). 

III. 

Accordingly, the order of the district court dismissing the 

RICO counts of the Superseding Indictment is REVERSED and the case 

is REMANDED for further proceedings. 

16 

Appellate Case: 87-2428 Document: 010110042878 Date Filed: 10/17/1988 Page: 16