Opinion ID: 772567
Heading Depth: 4
Heading Rank: 1

Heading: William Dirie

Text: 139 Dirie argues that the crimes allegedly constituting racketeering activity by him were all based on extortion. 17 In essence, Dirie argues that extortion requires the wrongful use of force, violence or fear and, in each of these instances, that element is entirely missing. Dirie claims that there was no evidence of a threat from him and that there was no evidence of the requisite fear of adverse consequences with respect to each of the charges of extortion. Dirie also argues that the predicate acts with which he was charged were supported, like much else, by no evidence except the testimony of DeFalco. See Brief of Defendant-Cross-Defendant-Appellant-Cross-Appellee William Dirie at 14. 140 The plaintiffs argue that 18 U.S.C. § 1951(b)(2) defines extortion as 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. The plaintiffs further claim that fear of economic loss has long been held to satisfy this statutory definition of extortion. The plaintiffs argue that Dirie's acts clearly constitute extortion because, in each instance that DeFalco followed Dirie's orders, DeFalco acted under a threat or implication that the plaintiffs' project would be harmed by the political actions or inactions of Dirie or the other defendants. 141 Under the Hobbs Act, [t]he 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. 18 U.S.C. § 1951(b)(2). 18 Extortion through threats of economic loss falls within the Hobbs Act's prohibitions, see United States v. Robilotto, 828 F.2d 940, 944 45 (2d Cir.1987), cert. denied, 484 U.S. 1011 (1988). Extortion may therefore be established on a theory that activities amounted to extortion by wrongful use of fear of economic loss. See, e.g., United States v. Capo, 817 F.2d 947, 951 (2d Cir. 1987) (en banc); United States v. Rastelli, 551 F.2d 902, 904 (2d Cir.), cert. denied, 434 U.S. 831 (1977). 142 In this Circuit, [t]he cases interpreting the Hobbs Act have repeatedly stressed that the element of 'fear' required by the Act can be satisfied by putting the victim in fear of economic loss. Capo, 817 F.2d at 951 (quoting United States v. Brecht, 540 F.2d 45, 52 (2d Cir. 1976), cert. denied, 429 U.S. 1123 (1977)) (citations omitted). The absence or presence of fear of economic loss must be considered from the perspective of the victim, not the extortionist; the proof need establish that the victim reasonably believed: first, that the defendant had the power to harm the victim, and second, that the defendant would exploit that power to the victim's detriment. Capo, 817 F.2d at 951 (citing Rastelli, 551 F.2d at 905). 143 This Circuit's case law on extortion by wrongful use of fear of economic loss is comprised of cases in which the evidence was plain that nonpayment would result in preclusion from or diminished opportunity for some existing or potential economic benefit. Capo, 817 F.2d at 951. For example, in Brecht, the evidence established that the defendant was the manager of Westinghouse's technical publications group, a position that afforded him discretion to award outside subcontracts for the production of Westinghouse's technical manuals. At a meeting with a subcontractor's representative, the defendant demanded a $1,000 kickback as a condition for the award of the contract to [the subcontractor]. Brecht, 540 F.2d at 47. This Court affirmed Brecht's conviction for extortion by wrongful use of fear of economic loss because the evidence showed that he obtained the $1,000 by the use of fear, attempting to convince the victim that he would be denied any chance to obtain a contract unless he paid. Id. at 52; see also United States v. Clemente, 640 F.2d 1069, 1073 (2d Cir.) (nonpayment would lead to loss of existing carpentry account), cert. denied, 454 U.S. 820 (1981); United States v. Daley, 564 F.2d 645, 650 (2d Cir. 1977) (failure to provide free supplies and labor to union official would lead to loss of jobs and labor unrest), cert. denied, 435 U.S. 933 (1978); Rastelli, 551 F.2d at 904-05 (failure of lunch truck suppliers to pay kickbacks to union official would lead to loss of union members' business). 144 Conversely, in Capo, there was no evidence that noncompliance would result in preclusion from or diminished opportunity for some existing or potential economic benefit. In Capo, the defendants allegedly solicited bribes in exchange for certain job referrals to Eastman Kodak. The government argued that the evidence was adequate to allow a rational juror to find that the victims reasonably feared economic loss if they did not make the payments demanded by the defendants. In holding that the evidence of fear of economic loss was insufficient as a matter of law, the Court held that there was no evidence that any defendant did, in fact, negatively influence any hiring decision after allegedly soliciting bribes in exchange for job referrals to Eastman Kodak. Capo, 817 F.2d at 952. The Court noted that not one witness testified to any fear that nonpayment would result in one of the defendants adversely affecting his or her chances for a job at Kodak; indeed, most of the 'victims' testified that they had no such fear, while others simply were not asked. Id. Accordingly, the Court held that the second part of the Rastelli test - that the victim reasonably believed that the defendant would exploit his power to the victim's detriment - [was] not satisfied. Id. 145 Applying these principles here, we conclude that extortion by Dirie through threats of economic loss was shown in the instant case. Dirie was the elected Supervisor of the Town of Delaware. In this position, Dirie served as a member of the Town Board and as a member of the Town Legislature. As set forth in detail above, there was ample evidence at trial that Dirie offered to help guide DeFalco with his real estate development in the Town of Delaware, provided that DeFalco followed the suggestions that Dirie made to him. There was also considerable evidence that, when DeFalco resisted each of Dirie's suggestions, Dirie used his authority within the Town of Delaware to adversely affect the plaintiffs' development. 146 Dirie's argument that the suggestions were not accompanied by the requisite threat of harm to the plaintiffs is perhaps strongest with respect to the finding that Dirie [e]xtorted from plaintiffs the value of the services of Harry Fisher, see Special Verdict Form, Question 4 at 2 (JA:630); (T2:1201), because the suggestion that DeFalco hire Fisher occurred at the initial 1987 meeting between DeFalco, Dirie and Fisher at DeFalco's home. Although it is a close call, there was sufficient evidence from which a reasonable jury could conclude that DeFalco reasonably believed, at the time of their first meeting, that Dirie had the power to harm him, and that Dirie would exploit that power to his detriment. See Capo, 817 F.2d at 951 (citing Rastelli, 551 F.2d at 905). 147 At the initial meeting, Dirie informed DeFalco that he was the Supervisor of the Town of Delaware. (T2:70). Dirie proceeded to tell DeFalco that This is not Long Island....We're going to help you every possible way we can to guide you through the muddy waters.... I'm going to make some suggestions to you. (T2:70). Dirie then proceeded to make his initial suggestions that: (1) DeFalco hire Fisher as a foreman and pay Fisher by purchasing him a new truck in Fisher's son's name; (2) DeFalco buy landscaping materials from Curtis, local nursery owner and Chairman of the Delaware Planning Board; (3) DeFalco purchase equipment at Tax Assessor Meckle's sporting goods store; and (4) DeFalco use Bernas to do the road construction at the development and mine the gravel from the JOBO gravel pit. Dirie explained that Around here in Sullivan County, you got to deal with the local people. (T2:71) (emphasis added). 148 Although Dirie characterizes his initial statements as suggestions that were accompanied with no threat of adverse action, and DeFalco characterizes them as threats made by a Town Supervisor demanding that DeFalco use local people, the jury reasonably sided with DeFalco. Dirie informed DeFalco of his position as the Town of Delaware Supervisor. Dirie's suggestions not only benefited certain members of the Town government and favored local residents, but also were coupled with the statement that: Around here in Sullivan County, you got to deal with the local people. (T2:71) (emphasis added). A reasonable jury therefore could have concluded that these were credible threats rather than mere suggestions. A reasonable jury could also have found that DeFalco reasonably believed that Dirie had the power to harm him, and that Dirie would exploit that power to the his detriment. Indeed, that fear of economic loss was subsequently borne out - when DeFalco fired the whole crew, including Harry Fisher... Dirie told [him] that he'd scrap the project (T2:132), and took steps to do so. Accordingly, there was sufficient evidence for a reasonable jury to find that Dirie extorted the value of the services of Harry Fisher. 149 As set forth in detail above, there was also ample evidence from which the jury could reasonably have found that Dirie put DeFalco in fear of economic loss with respect to the other predicate acts - namely, that Dirie extorted timber and/or firewood for his own benefit; extorted timber for the benefit of Ray Ferber; extorted one-third of the shares of JOBO Associates, Inc., for the benefit of John Bernas, Inc.; and extorted from plaintiffs truck wheels and tires for the benefit of William Dirie's son. For example, when DeFalco protested Dirie's demand that he cancel the Walczak logging contract so that Dirie's logging activities could remain exclusive, Dirie told him Don't expect to get your approvals at the Planning Board meeting unless it's done. (T2:126). DeFalco was also instructed by Tax Assessor Richard Ferber to use his cousin, Ray Ferber, for the logging contract, [o]therwise [he was] never going to get approvals. (T2:128). There was also considerable evidence of actual or threatened adverse official action with respect to the transfer of the JOBO stock. In short, there was sufficient evidence of fear of economic loss with respect to all five predicate acts charged against Dirie for a reasonable jury to conclude that DeFalco believed that Dirie had the power to harm him, and that Dirie would exploit that power to the plaintiffs' detriment. 150