United States v. Allen

155 F.3d 35, 1998 WL 458373
CourtCourt of Appeals for the Second Circuit
DecidedAugust 6, 1998
DocketDocket Nos. 97-6254, 97-6274
StatusPublished
Cited by29 cases

This text of 155 F.3d 35 (United States v. Allen) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Allen, 155 F.3d 35, 1998 WL 458373 (2d Cir. 1998).

Opinion

JON 0. NEWMAN, Circuit Judge:

This case primarily concerns the appropriateness of summary judgment in resolving the issue of whether defendants in a civil case under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), see 18 U.S.C. § 1964, have exercised the requisite control over the affairs of an alleged RICO enterprise to incur liability for conducting the enterprise’s affairs. Two sets of defendants, (i) John Pagano, Ace Garbage and Rubbish Removal, Inc. (“Ace Garbage”), and Mets Roll-Off Service, Inc. (“Mets Roll-Off’) (collectively, the “Ace Defendants”), and (ii) John Allen and Donald Finley Allen & Co., Inc. (“DAF”) (collectively, the “Allen Defendants”), appeal from orders of the District Court for the Eastern District of New York (Leo I. Glasser, District Judge), entered October 2, 1997. The District Court granted summary judgment for the United States, the plaintiff in this civil RICO action, and ordered various forms of injunctive relief, as well as the disgorgement of defendants’ illegal profits.

All the Appellants contend that genuine issues of disputed fact preclude summary judgment for the Government. The Allen Defendants also challenge the District Court’s rejection as a matter of law of their defenses of extortion and coercion. We conclude that these defenses were properly rejected but that summary judgment was not warranted on the issue of the Appellants’ liability, and we therefore affirm in part, vacate in part, and remand.

Background

The complaint. In 1989, the Government filed this civil RICO action against 112 defendants involved in the solid waste carting industry on Long Island. Named as defendants were alleged organized crime families, a trade association, a labor union, carting firms and their officers and directors, and a number of town employees who were alleged to have taken bribes for permitting trucks loaded with solid waste to be underweighed at the scalehouse of the Oyster Bay landfill. Although the case is still pending in District Court, its scope has been substantially narrowed, as a result of settlements and the granting of various motions for summary judgment.

The core of the complaint was the alleged effort — beginning in the 1950s — of successive associations of Long Island carters to control the carting industry by setting up a “property rights” regime. Carters were allegedly assigned “rights” to service particular customers or geographic areas. The system allegedly operated to suppress competitive pricing, and organized crime elements used violence to enforce the “property rights” regime. In addition to the formation and enforcement of this cartel, the complaint alleged that “carting industry racketeers have, either singly or in concert, used their control, power or money to corrupt public officials by offers of bribes or by rewarding misconduct, in return for actions by these officials which benefit the corrupt businesses.”

The complaint alleged the existence of two overarching RICO “enterprises.” See 18 U.S.C. §§ 1961(4), 1962. First, it identified the Private Sanitation Industry Association of Nassau/Suffolk, Inc. (“PSIA”), and characterized it as “an association organized, existing and operating for the purpose of controlling the solid waste disposal industry on Long Island.” Second, it identified a group that it termed the “Carting Industry Enterprise” (“CIE”), composed of all defendants together with other unnamed “entities in which defendants have an interest.” The CIE was described as “associated in fact for the purpose of controlling the solid waste disposal industry on Long Island.”

While numerous other defendants were alleged to have used violence and intimidation [38]*38to enforce the carters’ “property rights” system, the alleged predicate acts of the Appellants were limited to bribery of workers at the Oyster Bay town dump. The Appellants were alleged to have conferred “bribes and rewards” on dump employees, in exchange for the employees’ underreporting the weight of the Appellants’ trucks, thereby undercharging them for fees for dumping at the landfill. Although the complaint characterized this activity as racketeering acts under state law punishing both bribery and grand larceny, the Government defends the challenged rulings on appeal by contending that the Appellants’ predicate acts were only bribery. See 18 U.S.C. § 1961(1)(A) (state law offenses qualifying as “racketeering activity” include bribery but not theft).

The complaint alleged violations of RICO’s substantive and conspiracy provisions. See 18 U.S.C. § 1962(c), (d). However, after the Court granted the defendants’ motion to dismiss the conspiracy count without prejudice, against all but three defendants (none of whom is involved in the instant appeal), the Government elected not to replead this count. Accordingly, only the substantive claim under section 1962(c) remains at issue on this appeal.1

The Government and the Defendants-Appellants cross-moved for summary judgment. The following facts, unless otherwise noted, are undisputed.

The Ace Defendants. Ace Garbage and Mets Roll-Off are New York corporations. Ace is owned equally by Pagano and Joseph Petrizzo, who serve as president and vice-president, respectively. Mets Roll-Off is wholly owned by Petrizzo. However, because the entities are run as a single operation, the parties have consented to their being treated interchangeably.

The PSIA was organized in 1979 as a trade association of those engaged in the business of solid waste collection, transportation, and disposal on Long Island. Both Ace Garbage and Mets Roll-Off were members of the PSIA from its inception until 1989 and paid dues and assessments during that period. The parties agree that Petrizzo attended certain PSIA meetings; however, the parties appear to disagree over the extent to which he was involved in PSIA decision-making. Petrizzo’s daughter, Patricia, submitted an affidavit averring that the Ace Defendants were only “passive” members of the PSIA. She acknowledged that she attended some PSIA meetings with her father, but stated that these consisted of nothing more than informational presentations and exchanges of pleasantries.

Ace Garbage and Mets Roll-Off also became members of a sub-group of PSIA — the “Oyster Bay PSI Committee” (the “OB-PSI Committee”). The parties agree that the OB-PSI Committee was specifically concerned with protecting and representing the interests of those of its members who used the Oyster Bay dump. The Appellants maintain, however, that none of these objectives was illegal and that their involvement extended only to receiving mailings.

In any event, it is undisputed that from at least January 1982 until February 1985, Ace Garbage and Mets Roll-Off, along with other carting companies, made regular payments to workers at the municipal dump, in exchange for underweighing the trucks. This practice, known as “slipping the scale,” was accomplished by allowing the truck to pull only partially onto the scale before the weight was measured.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Rizvi v. Allstate Corporation
D. Connecticut, 2019
De Sole v. Knoedler Gallery, LLC
139 F. Supp. 3d 618 (S.D. New York, 2015)
Elsevier Inc. v. Memon
97 F. Supp. 3d 21 (E.D. New York, 2015)
City of New York v. Lasership, Inc.
33 F. Supp. 3d 303 (S.D. New York, 2014)
Noel v. New York City Taxi & Limousine Commission
687 F.3d 63 (Second Circuit, 2012)
CRABHOUSE OF DOUGLASTON INC. v. Newsday, Inc.
801 F. Supp. 2d 64 (E.D. New York, 2011)
United States v. Burden
600 F.3d 204 (Second Circuit, 2010)
Maersk, Inc. v. NEEWRA, INC.
687 F. Supp. 2d 300 (S.D. New York, 2009)
Kimm v. Chang Hoon Lee & Champ, Inc.
196 F. App'x 14 (Second Circuit, 2006)
Carousel Foods of America, Inc. v. Abrams & Co.
423 F. Supp. 2d 119 (S.D. New York, 2006)
Tuscano v. Tuscano
403 F. Supp. 2d 214 (E.D. New York, 2005)
Docket No. 03-7897(l)
385 F.3d 159 (Second Circuit, 2004)
Allstate Insurance v. Seigel
312 F. Supp. 2d 260 (D. Connecticut, 2004)
Andrea Doreen Ltd. v. Building Material Local Union 282
299 F. Supp. 2d 129 (E.D. New York, 2004)
Marshak v. Reed
13 F. App'x 19 (Second Circuit, 2001)

Cite This Page — Counsel Stack

Bluebook (online)
155 F.3d 35, 1998 WL 458373, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-allen-ca2-1998.