United States v. Albertson
1997 U.S. Dist. LEXIS 11043, 971 F. Supp. 837, 1997 WL 432026 (1997)
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Rule of Law:
The 'wrongful' use of economic fear under the Hobbs Act does not encompass situations where an individual seeks payment to cease lawful political and legal opposition to a business project, provided the alleged victim receives something of value and is not deprived of a pre-existing legal entitlement or a 'level playing field' for their business interests.
Facts:
- Joseph Corrado and his business partners sought to develop an 80-acre manufactured home community called 'Applewood Farms' in Camden, Delaware, and applied for rezoning and conditional use approvals.
- Kirk Albertson, a resident, spearheaded public, legal, and political opposition to the Applewood Farms project through a group he led, the 'Concerned Citizens of Camden' (CCC).
- Albertson's opposition included recruiting anti-development candidates who won local elections and petitioning the Delaware Attorney General's Office, which initially questioned the rezoning's validity.
- Corrado filed a lawsuit in Delaware Chancery Court against the Town of Camden, the mayor's wife, and Albertson, seeking to affirm the rezoning and prevent further public hearings.
- On October 30, 1996, Albertson telephoned Corrado and offered to drop his personal opposition to the Applewood Farms development and remove himself from the lawsuit in exchange for a $20,000 sponsorship for his semi-pro football team.
- Following subsequent discussions, Corrado gave Albertson a $5,000 check, and Albertson later signed a stipulation of dismissal from the Chancery Court lawsuit on December 18, 1996.
Procedural Posture:
- Kirk Albertson was charged in a single-count indictment with attempted extortion in violation of the Hobbs Act.
- A jury trial was held, resulting in a verdict of guilty.
- Albertson made several timely motions for judgment of acquittal during the trial.
- The Court reserved decision on Albertson’s motions for judgment of acquittal pursuant to Rule 29(b) of the Federal Rules of Criminal Procedure.
- Albertson filed a motion for a new trial, based on an allegedly erroneous jury instruction.
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Issue:
Does an individual commit attempted extortion under the Hobbs Act by offering to drop legitimate legal and political opposition to a land development project in exchange for a financial sponsorship, when the developer is not legally entitled to be free from such opposition and is not deprived of a 'level playing field' for their business?
Opinions:
Majority - Murray M. Schwartz, Senior District Judge
No, Albertson's conduct did not constitute attempted extortion under the Hobbs Act because Corrado received something of value—the cessation of legitimate opposition—and was not deprived of a 'level playing field' for his business activities. The court clarified that the Hobbs Act's prohibition against the 'wrongful' use of fear does not encompass all economic threats, distinguishing between 'hard bargaining' and extortion. Drawing upon Viacom Int’l, Inc. v. Icahn, the court explained that extortion involves a victim being deprived of a pre-existing entitlement to pursue their business interests free from fear, whereas 'hard bargaining' involves a transaction where the victim receives something of value to which they were not already legally entitled. The court relied on the reasoning from United States v. Collins, United States v. Capo, and United States v. Garcia, which collectively establish that a Hobbs Act violation typically requires the payor to be deprived of an opportunity to compete equally or to lose something to which they were legally entitled. Here, Corrado was not legally entitled to develop his land free from political opposition, nor would he have lost the opportunity to seek project approval had he not paid Albertson. Instead, he paid to enhance his chances, similar to the 'willing participants' in Capo who paid to improve their employment prospects. The court distinguished United States v. Cerilli because Albertson was not a public official and lacked the sole power to grant or deny permits. It also distinguished United States v. Kattar where the underlying agreement was 'illicit and unenforceable.' While acknowledging United States v. Castillo presented a classic form of blackmail, the court declined to follow it, finding the 'level playing field' analysis more appropriate. The court rejected the government's arguments that secrecy or personal enrichment (as opposed to public benefit) define 'wrongful' under the Hobbs Act, stating these are not supported by the statute or existing jurisprudence, and concluded that the Hobbs Act does not police all ethically repugnant behavior, only 'wrongful' economic fear.
Analysis:
This case significantly narrows the interpretation of 'wrongful' conduct under the Hobbs Act, particularly concerning economic threats related to political and legal opposition. It establishes that the Hobbs Act does not criminalize all demands for money in exchange for ceasing lawful activities, provided the victim receives something of value and is not legally entitled to be free from the threat, nor is deprived of a 'level playing field' for pursuing their interests. This ruling could limit future Hobbs Act prosecutions against individuals engaged in advocacy who seek to monetize their influence, distinguishing such actions from traditional extortion or bribery involving public officials.
