United States v. Carbone
United States v. Carbone
Opinion of the Court
delivered the opinion of the Court.
This case comes to us under the Criminal Appeals Act
Three of the appellees are officers of Local 39 of the International Hod Carriers’ Building and Common Laborers’ Union of America; the fourth appellee is president of the Eastern Massachusetts Laborers District Council and is also employed by Local 39. They were indicted for conspiring to violate § 1 of the Kickback Act. It was charged
Pursuant to this agreement, the appellees approved to the contractors for employment as laborers members of Local 39 or of other locals of the International Union and only such other persons as paid the appellees the sum of $5.00. The appellees represented to the latter persons that this payment would be regarded as an installment upon the initiation fee of Local 39 and the International Union and that each such employee would be required to pay the appellees $5.00 per week until the total initiation fee was paid “or the person would not be permitted to continue work upon the said construction.” Receipts were given for each weekly payment. The initiation fee was originally $50.00, but it was later reduced to $40.00 and then to $20.00.
It was further charged that the appellees directed the stewards each week to go among the laborers and demand of each nonmember of the union' either that he display a receipt showing that he had paid the $5.00 for the current week or that he immediately pay that sum to the stewards or to the appellees “under threat of procuring his dismissal from his employment” if he did not do so. The appellees allegedly were able to carry out this threat by reason of
The indictment also stated that the appellees kept no records of those who made payments to them. But if a laborer should present receipts showing payment of the initiation fee in full, his name was recorded and sent to the headquarters of the International Union with the sum of $5.35, representing the share of the fee to which the International was entitled under its rules. And the appellees “made no report to the Local 39, or to anyone, of the amount they had received from laborers paying less than the full initiation fee as aforesaid, or the total sums they had collected in this way, nor did they cause any of the sums collected in this way and received by them to be recorded in the Financial Secretary’s book as the rules of the said International Union require: The defendants [appellees] well knowing that the majority of those who paid the initial five dollars would not and did not complete payment of the full initiation fee.”
The indictment concluded by charging that the appellees acted in concert in these matters, that they induced the laborers to give up part of the compensation to which they were entitled under their contracts, that they represented that they were acting for Local 39 and the International, and that they concealed from these organizations the sums they thus collected from laborers who did not pay the initiation fee in full.
The appellees moved to dismiss the indictment, alleging as one ground that it did not state an offense cognizable in law. Relying upon this Court’s decision in United States v. Laudani, 320 U. S. 543, the District Court granted the motions. 61 F. Supp. 882. It plainly was of the view that the facts as alleged in the indictment fell
We agree with the District Court. Section 1 of the Kickback Act punishes “whoever” induces another person employed on a federally financed project “to give up any part of the compensation to which he is entitled under his contract of employment, by force, intimidation, threat of procuring dismissal from such employment, or by any other manner whatsoever . . .” The United States contends that this provision applies to the instant situation inasmuch as the appellees induced certain workers on a federal project to give up part of the compensation to which they were entitled by threatening to procure dismissal from their employment. Emphasis is placed upon the allegation in the indictment that the appellees had power to enforce this threat by reason of the closed-shop agreement with the contractors and upon the further allegation that the appellees neglected to report or to turn over to Local 39 of the International Union all of the money collected, as required by the rules of those organizations.
But as is apparent from our discussion in the Laudani case, not every person or act falling within the literal sweep of the language of the Kickback Act necessarily comes within its intent and purpose. That language must be read and applied in light of the evils which gave rise to the statute and the aims which the proponents sought to achieve. When that is done the inapplicability of the Act to the facts set forth in the indictment becomes clear.
From a superficial standpoint, the facts in the indictment would indicate that the appellees did induce the laborers to give up part of' their lawful wages by threatening to procure their dismissal. But the facts as charged must be considered in light of the closed-shop agreement between the appellees and the contractors. That agreement, so far as appears, was a lawful one, giving the appellees the power as union representatives to insist that all laborers be or become members of Local 39 and the International Union. The initiation fee which was assessed is a normal and usual assessment by a union on a person seeking a union job or membership in the union. There is no claim in this instance that the fee was unauthorized, excessive or otherwise improper; in fact, it is admitted that when the full amount of the initiation fee was paid the laborer became enrolled as a member of both
The crucial fact relied upon by the United States, however, is the alleged failure of the appellees to report or to account to the unions as to those payments made by laborers who quit before making the last installment. But if that fact be true it cannot operate retroactively to make the assessments illegal or to give them the character of kickbacks. It must be assumed from the indictment as construed below that the assessments were lawful when made and that the appellees had the right to make them on behalf of the unions. If the appellees thereafter con verted the money to their own use in violation of union rules, the evil falls outside the scope of the Kickback Act. Embezzlement and failure to obey union rules are matters vastly different from an unlawful demand upon an employee to return part of the wages he has earned. Congress has given, no indication in this Act that it desired to deal with such matters.
The interpretative process would be abused and the legislative will subverted weie we to. deal with the broad
Affirmed.
Act of March 2, 1907, 34 Stat. 1246, as amended by the Act of May 9, 1942, 56 Stat. 271; 18 U. S. C. § 682.
Section 1 of the Act provides: “Whoever shall induce any person employed in the construction, prosecution, or completion of any public building, public work, or building or work financed in whole or in part by loans or grants from the United States, or in the repair thereof to give up any part of the compensation to which he is entitled under his contract of employment, by force, intimidation, threat of procuring dismissal from such employment, or by any other manner whatsoever, shaE be fined not more than $5,000, or imprisoned not more than five years, or both,” 48 Stat. 948 ; 40 U. S. C. § 276b.
Senator Copeland, in charge of the bill in the Senate, explained its purposes as follows: “I should be unwilling to have the bill passed without the Senate understanding its purpose. Much has been said on the floor recently about' what is known as the ‘kick-back’ where employers or sub-employers have indecently and immorally taken from employees a part of the wage which it was supposed they were being paid. The testimony before our committee investigating crime is so startling as to indicate that as much as 25 percent of the money supposed to be paid out of Federal funds for employment is actually repaid to employers in this improper manner. The purpose of the bill is to attempt to put some check upon that practice.” 78 Cong. Ree. 7401. Senator Copeland also quoted from a letter from Mr. William Green, President of the American Federation of Labor, stating, "It has been a common practice for contractors constructing Fed
Representative Sumners, the chairman of the House committee in charge of the bill, referred to the bill as follows: “May I suggest to gentlemen on both sides of the House that we are going to attempt to call up on the first opportunity S. 3041, which is known as the ‘kickback’ bill, preventing contractors from compelling workmen to return a part of their salaries.” 78 Cong. Rec. 10521.
The United States points to certain isolated references in the legislative hearings concerning dishonest union practices. Hearings, Subcommittee of Senate Committee on Commerce, S. Res. 74, 73d Cong., 2d Sess., Vol. 1, pp. 35, 82, 808, 814, 826. But these relate to general “racketeering” in labor unions or to connivance between union officials and contractors on the matter of kickbacks, neither of which is involved in this case. Thus Adolph Dzik, attorney for the anti-racketeering committee of the American Federation of Labor building trade unions in New York, testified as follows (Id., pp. 808, 814):
Mr. Daru [counsel for Senate Subcommittee]. Do you think it is usually a dishonest contractor or an employee, superintendent, or otherwise, who is sandwiching in between there and getting the “kickback” ?'
• Mr. Dzik. I think it is the contractor and some of the officials of the unions.
The Chairman. Is it your opinion that there is connivance between the contractor or his representative and certain officials?
Mr. Dzik. I think so.
The Chainnan. I take it from what you say that you arc placing responsibrty largely upon the contractors, or do you also
_ Mr. Dzik. I will say that primarily the contractors themselves are responsible, and that they corrupt the officials of the unions and in that manner are able to do it without being exposed. I will tell you why I say that, Senator. I say that if the officials and labor unions were really interested in this racket, they would immediately pass a resolution suspending the operation of the rule of the union punishing the laborers that exposed it.
See 46 Col. L. Kev. 326.
Dissenting Opinion
dissenting, with whom Mr. Chief Justice Stone and Mr. Justice Burton concur.
Until 1907 no review could be had from a judgment of a district — or the predecessor, circuit — court setting aside an indictment. By the Criminal Appeals Act of that year, 34 Stat. 1246,18 U. S. C. § 682, this Court was given jurisdiction to review such a judgment, but only if the decision of the district court was based exclusively upon the invalidity or construction of the statute which gave rise to the indictment. If the district court construed an indictment as well as a statute, this Court could not entertain the appeal. United States v. Hastings, 296 U. S. 188. Accordingly, when the dismissal of an indictment involved an erroneous ruling in whole or in part upon the sufficiency of the indictment as a matter of pleading, the United States was without remedy. The upshot was that justice might be thwarted through a misconception by a district judge of the requirements of criminal pleading because time might bar a new indictment.
It was the purpose of the Act of May 9, 1942, 56 Stat. 271, 18 U. S. C., Supp. IV, § 682, to meet this situation. This Act authorized the Government to appeal to a circuit court of appeals from the decision of a district court in those cases where direct appeals to this Court do not lie. It also required this Court to remand to a circuit court of appeals a case svrongly brought here. Ac
The Court applied this procedure in United States v. Swift & Co., 318 U. S. 442, although, or perhaps because, there was a division here as to the meaning of the District Court’s action. This course, in my judgment, should now be followed. The scope of the opinion below is certainly not unequivocal. Did the District Court mean that the indictment charged that the defendants acted exclusively as authorized agents of the union in collecting fees, but converted those fees to their own purposes? That may well be embezzlement under the Massachusetts law: but no one would contend that it comes within the terms of the “kick-back” statute. Or, did the District Court read the indictment to mean that that which the defendants did was outside the scope of their authority as union officials and was not done on behalf of the union, and hold that the “kick-back” statute does not apply to persons because they are officers of a union? Or, did the District Court read the indictment to mean that the union officials acted on, their own and not for union purposes, but hold that such conduct is not covered by the “kick-back” statute because it applies exclusively to persons who work for the employer and who line their pockets by virtue of their power to assure or withhold employment? Instead of starting with an unequivocal construction of the indictment by the District Court, this Court is itself in effect construing the indictment when Congress has withheld from this Court the right to construe indictments.
But under the compulsion of the Court’s decision the case is before us on the merits. See Helvering v. Davis, 301 U. S. 619, 640. The statute seems to be clear: “Whoever shall induce any person employed in the construction, ... of any . . . work financed in whole or in part by loans or grants from the United States, ... to give up any part of the compensation to which he is entitled under his contract of employment, by force, intimidation, threat of procuring dismissal from such employment, or by any other manner whatsoever, shall be fined ... or imprisoned ... or both.” 48 Stat. 948, 40 U. S. C. § 276b. No legislative history is invoked to undo the scope of this language and to immunize what Congress has plainly condemned. What Congress has enacted should be enforced. The statutory phrase is “by any other manner whatsoever.” The indictment does not describe a check-off or collection of union dues or initiation fees in a labor union. That, as the Government agrees, is not prohibited. The statute seeks to protect forays against wages derived from federal funds and does not touch diminution of such wages in connection with union membership. The statute is for the protection of the laboring man and the taxpayer. It should be so interpreted and enforced. It should not be interpreted so
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