Appeal from the United States District Court for the District of New Jersey, (Crim. 82-00233-02 & 82-0023-01).
Before: SEITZ, BECKER, and ROSENN, Circuit Judges.
The defendants, James Paone and Thomas Pecora, appeal judgments of conviction against them in the district court on two counts of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961 et seq. We have jurisdiction under 28 U.S.C. § 1291.
The defendants were convicted by a jury of violations of both sections 1962(c) and (d) of RICO, which make it unlawful to conduct (section 1962(c)), or to conspire to conduct (section 1962(d)), an enterprise through a pattern of racketeering activity, Defendant Pecora, general manager of Federico Trucking, Inc. (FTI),*fn1 was charged with making payments, mainly in the form of salaries "paid" to a succession of no-show employees over the course of a decade, to defendant Paone, business agent and recording secretary of Local 863 of the International Brotherhood of Teamsters. These payments were allegedly the product of a conspiracy including Paone and Pecora, and were intended to influence Paone in the conduct of the business of Local 863. The jury found that the payments violated sections 302(a) and (b) of the Taft-Hartley Act, ch. 120, 61 Stat. 157 (1947), as amended by section 505 of the Labor-Management Reporting and Disclosure Act, Pub. L. 86-257, 73 Stat. 537 (1959), codified at 29 U.S.C. § 186(a) and (b). The Taft-Hartley violations formed the predicate acts required to establish a "pattern of racketeering activity" under 18 U.S.C. § 1961(1)(c).
On appeal, the defendants raise a multitude of issues which they argue warrant reversal of their convictions. To avoid repetition, we will discuss in detail below the facts pertinent to each issue, and content ourselves with a cursory sketch of the general scheme here. We describe the facts in the light most favorable to the government.
FTI, a corporation doing business in New Jersey, was established in 1972, and entered into a contract with Foodhaulers Inc., a subsidiary of Wakefern Food Corp., whereby Foodhaulers subcontracted its delivery of bakery products for Wakefern to FTI. Truckdrivers employed directly by Foodhaulers were represented by Local 863. FTI was wholly owned by Biagio Federico, who also owned S. Federico Trucking in New York. S. Federico had a long-standing union relationship with Teamsters Local 202. When FTI was established, a jurisdictional dispute arose among several locals including 863 and 202 as to which Teamsters local would represent FTI employees. The dispute was considered by the New York and New Jersey Joint Councils of the Teamsters, and apparently resolved pursuant to a 1963 Memorandum of Understanding between the those Councils to allow Local 202 to follow the work and represent the FTI drivers.
The relationship between Foodhaulers and the FTI drivers, however, bore many of the indicia of an employer/employee relationship. For example, Foodhaulers accepted the applications of FTI drivers, required them to have medical examinations, administered driving tests to them, issued them identification cards, and had the power to fire them.
The government claimed that FTI in the persons of Pecora and Biagio Federico conspired with Paone to funnel payments to him in order to prevent Local 863 from asserting that the subcontract was a sham intended to allow Foodhaulers to hire non-863 drivers in violation of its collective bargaining agreement, an assertion that could have interfered with FTI's subcontract. Paone would therefore use his influence as a high official in Local 863 to ensure that Local 863 would neither object to the subcontract or attempt to assert jurisdiction over FTI's driver employees.
From 1972 to 1981, a number of no-show employees were paid salaries, which were routed to Paone through middlemen. By 1981, the payments totalled approximately $235,000. In addition, FTI made several thousand dollars in welfare fund contributions on behalf of Paone's sister, despite the fact that she was never employed by FTI.
After the jury found that defendants guilty of both RICO counts, the district court denied motions for a judgment of acquittal under Federal Rule of Criminal Procedure 29, and motions for a new trial based on trial error and newly discovered evidence under F. R. Crim. P. 33. This appeal followed.
The defendants contend that the district court erred in denying their motions for a judgment of acquittal because, on the facts presented to the jury, there was insufficient evidence as a matter of law to find that they had violated sections 302(a) and (b) of the Taft-Hartley Act, 29 U.S.C. §§ 186(a) and (b). In reviewing the district court's denial of defendants' motions, we determine whether there is substantial evidence, viewed in the light most favorable to the government, to support a jury's finding of guilt beyond a reasonable doubt as to the elements of the crime charged. Government of the Virgin Islands v. Williams, k739 F.2d 936, 940 (3d Cir. 1984). The government must be given the benefit of inferences that may be drawn from the evidence, and the evidence may be considered probative even if it is circumstantial. Id. In addition, "'the evidence does not need to be inconsistent with every conclusion save that of guilt if it does establish a case from which the jury can find the defendant guilty beyond a reasonable doubt.'" Id., quoting United States v. Allard, 240 F.2d 840, 841 (3d Cir.), cert. denied, 353 U.S. 939, 77 S. Ct. 814, 1 L. Ed. 2d 761 (1957). Of course, to the extent we must review the district court's statutory interpretations or other decisions on matters of law, our review is plenary.
(a) ... unlawful for any employer ... or any person who acts in the interest of an employer to pay, lend, or deliver, or agree to pay lend, or deliver, any money or other thing of value --
(1) to any representative of any of his employees who are employed in an industry affecting commerce; or
(2) to any labor organization, or any officer or employee thereof, which represents, seeks to represent, or would admit to membership, any of the employees of such employer who are employed in an industry affecting commerce; or
(4) to any officer or employee of a labor organization engaged in an industry affecting commerce with intent to influence him in respect to any of his actions, decisions, or duties as a representative of such labor organization.
Section 302(b) makes it "unlawful for any person to request, demand, or accept, or agree to receive or accept, any payment, loan, or delivery of any money or other thing of value prohibited by subsection (a)."
The essence of the defendants' arguments is that, under the facts, Paone was not a "representative" of FTI employees, that circumstances prevented Local 863 from admitting FTI employees to membership, and that payments to Paone could not have been made with intent to influence him in his capacity as an official of Local 863. Payments in violation of any one of the subsections of section 302(a), of course, would suffice to make out a Taft-Hartley violation. We are therefore called upon to construe the language of section 302 to see whether the facts here fall within its scope. We will take up each subsection in turn.
The facts relevant to section 302(a)(2) are not complex. First, a number of FTI's office employees were dues paying members of Local 863. Some of those employees were supervisory personnel and we will assume that they could not be represented by the Local under the National Labor Relations Act. However, other employees who were Local 863 members were clerical, non-supervisory personnel. The defendants maintained at trial that the office employees paid dues to the union for the sole purpose of participating in the insurance program operated under Local 863's welfare fund, and therefore that Local 863 was not their representative within the meaning of section 302.
At least one office employee testified that Local 863 never represented him with respect to the terms and conditions of employment, and there was testimony to the effect that a union and its welfare fund are two distinct entities. Local 863 never negotiated a collective bargaining agreement for the office employees. When the office employees transferred to another health plan, they were put on Local 863's withdrawal rolls.
The seminal case construing the term "representative" is United States v. Ryan, 350 U.S. 299, 100 L. Ed. 335, 76 S. Ct. 400 (1956). In Ryan, the petitioner argued for a very restrictive interpretation, but the court held that "a narrow reading of the term 'representative' would substantially defeat the Congressional purpose." 350 U.S. at 304.
Ryan did not purport to define the outer limits of the scope of the term "representative", but instead stressed its breadth. The Court noted that a narrow reading of the statute would prevent applying section 302 to "other individuals as trustees [of welfare funds]," 350 U.S. at 305, and that Congress had "enlarged [the scope of section 302 to] reach ... a 'case where the union representative is shaking down the employer.'" 350 U.S. at 306, quoting Senator Taft.
The defendants contend that Ryan stands for the proposition that dues paying members of a union local are not represented by that union's officer if the purpose of their membership is simply participation in the union's welfare fund. They would have us adopt the following language from Ryan: "'For purposes of this section [§ 302 of Taft-Hartley], the term 'representative' means any labor organization which, or any individual who, is authorized or purports to be authorized to deal with an employer ... concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.'" Ryan, 350 U.S. at 306, n.6, quoting section 302(g) of the Senate version of section 302.
Ryan does not support such a reading of section 302, however.*fn2 The Senate's proposed definition was omitted from the final version of section 302. Instead, Congress adopted by reference in section 501(3) of Taft-Hartley the definition of representative found in section 2(4) of the National Labor Relations Act, 29 U.S.C. § 152(4): "The term 'representative' includes any individual or labor organization." The NLRA's language is considerably broader than the definition that was deleted. See Ryan, 350 U.S. at 301. While the Court made it clear that section 302 covers at least the scope of proposed section 302(g), it concluded with the broad statement "that § 302 prohibits payments by employers to individuals who represent employees in their relations with the employers." 350 U.S. at 307. Ryan thus imposes no limitation on the subject matter of the representation.
With respect to the FTI employees who were members of Local 863, then, we must decide whether the jury could find that Local 863 represented them in their relations with FTI, even assuming that only subject matter of the relationship was the inclusion of the employees in Local 863's pension fund. The district judge instructed the jury that the fact that the office employees were members of Local 863 was not dispositive and he told them that they might consider the payment of dues, the lack of a collective bargaining agreement, and other factors in their decision.
The district court's instructions were consistent with the case law interpreting section 302. In Mechanical Contractors Ass'n v. Local Union 420, 265 F.2d 607, 611 (3d Cir. 1959), we held that persons designated by a union to administer a fund derived from employer contributions were representatives within the meaning of section 302, even where none of the fund's purposes included collective bargaining for the employees or representation on the job or in grievances. We rejected the contention that section 302's applicability depended on the "character of the functions performed by the joint administrators." 265 F.2d at 611. Thus, even if FTI's office employees belonged to Local 863 for the sole purpose of participation in the welfare fund, Local 863 and its officers would be "representatives" within the scope of section 302. See also Sheet Metal Contractors Ass'n v. Sheet Metal Workers International Union, 248 F.2d 307, 315 (9th Cir. 1957), cert. denied, 355 U.S. 924, 2 L. Ed. 2d 354, 78 S. Ct. 367 (1958).
Further, participation in an insurance program itself may be considered a part of the wage package given to employees sufficient to make union officials with no other connection to the workers involved representatives within the meaning of section 302. See Sheet Metal Contractors Ass'n. 248 F.2d at 314 (2 1/2 cents per hour welfare fund contributions sought by Local 74 for Local 104 workers working temporarily in its jurisdiction were "on behalf of ... members of Local 104 temporarily in the northern counties and in respect to the working conditions and wage scales of ... 104 members;" thus, joint board members of Local 74 could be considered representatives).
When employees participate in a welfare fund, there must be some determination of the amount of the contributions on their behalf, the mechanics of payment, the claims procedure, the means by which claims disputes are resolved, and so on. There is no need under the statute to show that the union officials actually negotiated or personally handled the amount of the payments to the welfare fund, the ...