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U.S. Supreme Court: Investment recommendation is not “obtainable property” for purposes of Hobbs Act prosecution

Giridhar C. Sekhar v. United States, USSC No. 12-357, 6/26/13

United States Supreme Court decision, reversing U.S. v. Sekhar, 683 F.3d 436 (2nd Cir. 2012)

Attempting to compel a person to recommend that his employer approve an investment does not constitute “the obtaining of property from another” for purposes of a prosecution under the Hobbs Act, 18 U. S. C. §1951(a).

Investments for the New York government employees pension fund are chosen by the State Comptroller. After the Comptroller’s general counsel recommended against investing in a fund managed by Sekhar, the general counsel received anonymous e-mails demanding that he recommend the investment and threatening, if he did not, to disclose to others information about the general counsel’s alleged extramarital affair. Some of the e-mails were traced to Sekhar’s home computer. For this conduct he was convicted of attempted extortion under the Hobbs Act, which defines “extortion” to mean “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). On a special verdict form, the jury specified the property Sekhar attempted to extort was the general counsel’s recommendation to approve the investment. (Slip op. at 1-3).

The Supreme Court holds the general counsel’s recommendation to invest in a particular fund is not “property” that can be extorted:

The text of the statute at issue confirms that the alleged property here cannot be extorted. Enacted in 1946, the Hobbs Act defines its crime of “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.” 18 U. S. C. §1951(b)(2) (emphasis added). Obtaining property requires “not only the deprivation but also the acquisition of property.” Scheidler v. National Organization for Women, Inc., 537 U. S. 393, 404 (2003) (citing United States v. Enmons, 410 U. S. 396, 400 (1973)). That is, it requires that the victim “part with” his property, R. Perkins & R. Boyce, Criminal Law 451 (3d ed. 1982), and that the extortionist “gain possession” of it, Scheidler, supra, at 403, n. 8; see also Webster’s New International Dictionary 1682 (2d ed. 1949) (defining “obtain”); Murray, Note, Protesters, Extortion, and Coercion: Preventing RICO from Chilling First Amendment Freedoms, 75 Notre Dame L. Rev. 691, 706 (1999) (Murray). The property extorted must therefore be transferable—that is, capable of passing from one person to another. The alleged property here lacks that defining feature. (Slip op. at 4-5 (footnote omitted)).

Scheidler provides particular support for this conclusion. That case held that protesters did not commit extortion under the Hobbs Act when they “interfered with, disrupted, and in some instances completely deprived” abortion clinics of their ability to run their business because, though the protesters may have deprived the clinics of an “alleged property right,” they did not pursue or receive “‘something of value from’” the clinics that they could then “exercise, transfer, or sell” themselves. 537 U. S. at 404–405.

This case is easier than Scheidler, where one might at least have said that physical occupation of property amounted to obtaining that property. The deprivation alleged here is far more abstract. Scheidler rested its decision, as we do, on the term “obtaining.” Id., at 402, n. 6. The principle announced there—that a defendant must pursue something of value from the victim that can be exercised, transferred, or sold—applies with equal force here.  Whether one considers the personal right at issue to be “property” in a broad sense or not, it certainly was not obtainable property under the Hobbs Act. (Slip op. at 7-8 (footnotes omitted)).

A concurrence by Justices Alito, Kennedy, and Sotomayor concludes the general counsel’s recommendation to invest is not even “property” under the Act, much less property that can be “obtained.”

A decision relevant to federal practice, but not state, as Wisconsin’s comparable statute, § 943.30(1), allows the crime to be charged as extortion (defined in Wis. J.I.-Criminal 1473A and 1473B to require “obtaining”) or as coercion (compelling a person to do or refrain from an act). As the opinion notes, unlike the state statute on which it was based, the Hobbs Act doesn’t have a coercion alternative, and the Court concludes “[t]he omission must have been deliberate, since it was perfectly clear that extortion did not include coercion.” (Slip op. at 6).

The Court notes it “may well be proper” to charge a person under the Hobbs Act with obtaining money by threatening a third party, obtaining funds belonging to a corporate or governmental entity by threatening the entity’s agent, or obtaining “goodwill and customer revenues” by threatening a market competitor; but whether any of these constitute “obtaining property from another” is not something the Court considers “because the Government did not charge any of them here.” (Slip op. at 5 n.2).

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