United States of America, Appellant, v. Thomas J. Pecora, Appellee, 484 F.2d 1289 (3d Cir. 1973)

Thomas J. Pecora was indicted under Sec. 186(b) of the Labor-Management Relations Act which makes it an offense for an employee representative to receive from an employer "any payment, loan, or delivery of any money or other thing of value."¹  After a prehearing conference, the government and appellee entered into a stipulation as to the facts upon which the indictment was returned. This stipulation was attached to a motion to dismiss the indictment filed by appellee. The district court, 351 F. Supp. 164, granted appellee's motion, and the government has appealed. We must consider two questions: (1) Whether the government has the right to appeal the dismissal of the indictments under 18 U.S.C. § 3731; and (2) if it does, whether the district court was correct in its dismissal.

Appellee Thomas J. Pecora was the business manager of Local 1058, Construction and General Laborers and Materials Handlers. In July, 1968 the Thomas Pecora Testimonial Dinner Committee was formed to honor appellee for his involvement in the labor movement. Tickets to the dinner cost fifty dollars per couple and advertisements in a souvenir program cost three hundred dollars per page. Appellee was not a member of the committee nor did the stipulation state he instigated the planning.

The committee's efforts were fruitful. It sold $44,400.00 worth of tickets and advertising. Employers who employed some members of Local 1058 purchased $25,450.00 worth of tickets and advertising.

At the dinner, appellee received a new car worth $5,324.96, a color television set worth $448.00, a plaque, a citation from the International Union, and a 30-year pin. Following the dinner, after $11,871.72 was deducted to cover expenses, appellee received the balance of the proceeds: $26,755.32 in cash. It was the receipt of this cash and the gifts which the government claims violated Sec. 186(b).

The district court decided that the stipulated facts did not constitute a violation of Sec. 186 and dismissed the indictment. The court reasoned that the government had not alleged any facts which showed any direct involvement of appellee in the solicitation of contributions from the employers.²  The court determined that a corrupt purpose had to be shown for an indictment to be valid under Sec. 186 and that "the mere receipt of money" was not sufficient. The government challenges that interpretation.

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Before we reach that issue, we must decide whether the government has the right to appeal the district court's order.

In 1971, 18 U.S.C. § 3731 was amended³  to read, in pertinent part, as follows:

"Sec. 3731. Appeal by United States

"In a criminal case an appeal by the United States shall lie to a court of appeals from a decision, judgment, or order of a district court, dismissing an indictment or information as to any one or more counts, except that no appeal shall lie where the double jeopardy clause of the United States Constitution prohibits further prosecution.

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"The provisions of this section shall be liberally construed to effectuate its purposes."This amendment replaced a statute described by the Supreme Court as "a failure . . . an awkward and ancient Act." United States v. Sisson, 399 U.S. 267, 307, 308, 90 S. Ct. 2117, 2139, 26 L. Ed. 2d 608 (1970).⁴  Under the old statute, it is most probable that the government would not have been able to appeal the decision of the district court for the Supreme Court had stated in United States v. Brewster, 408 U.S. 501, 506, 92 S. Ct. 2531, 33 L. Ed. 2d 507 (1972) about the "old" Sec. 3731:

"Under United States v. Sisson, 399 U.S. 267, 90 S. Ct. 2117, 26 L. Ed. 2d 608 (1970), an appeal does not lie from a decision that rests, not upon the sufficiency of the indictment alone, but upon extraneous facts. If an indictment is dismissed as a result of a stipulated fact or the showing of evidentiary facts outside the indictment, which facts would constitute a defense on the merits at trial, no appeal is available. See United States v. Findley, 439 F.2d 970 (CA1 1971)."

As amended, however, Section 3731 provides that the government may appeal from an order or decision dismissing an indictment except where the double jeopardy clause prohibits it. United States v. Sisson, supra, 399 U.S. at 306, 307, note 61, 90 S. Ct. 2117. Because of the amendment of Section 3731, it would appear that the statement in Brewster is no longer an accurate statement of the law. The First Circuit, for example, in United States v. Findley, 439 F.2d 970, 973 (1st Cir. 1971) (cited with approval by the Supreme Court in Brewster), conceded that the defendant had not been formally placed in jeopardy when a district court judge considered a motion to dismiss an indictment based on stipulated facts before a jury has been impaneled.

We have a similar situation before us and we agree with the conclusion of the First Circuit that jeopardy has not attached. Therefore, the government may appeal the decision of the district court.

In a jury case, jeopardy attaches when a jury has been impaneled and sworn; in a non-jury case, jeopardy attaches after the court has begun to hear evidence. E. g., United States v. Hill, 473 F.2d 759 (9th Cir. 1972). Was this a jury or a non-jury case? Appellee argues that by entering into the stipulation of facts he "essentially waived" his right to a jury trial. Rule 23(a) of the Federal Rules of Criminal Procedure, however, states that a defendant is entitled to a jury trial unless he waives the right "in writing with the approval of the court and the consent of the government." Entering into the stipulation of facts for the purpose only of attacking the validity of the indictment did not constitute the waiver necessary under Rule 23(a). As the Supreme Court has said, "'courts indulge every reasonable presumption against waiver' of fundamental constitutional rights and that 'we do not presume acquiescence in the loss of fundamental rights."' (Footnotes omitted). Johnson v. Zerbst, 304 U.S. 458, 464, 58 S. Ct. 1019, 1023, 82 L. Ed. 1461. Although the defendant normally argues that he has not waived a right, there is no reason to subvert a principle which protects defendants because in this particular case it would benefit him to have a less strict standard of waiver. Absent compliance with Rule 23(a), there can be no waiver of a jury trial.

Appellee relies upon the decision in United States v. Hill, 473 F.2d 759 (9th Cir. 1972). In Hill, the defendants were charged with mailing obscene advertisements. The parties stipulated which materials were alleged to be obscene. Based on the indictments and the stipulation, the defendants moved to dismiss the indictments. The stipulated materials were introduced into evidence, and the court granted the motion to dismiss on the ground that the materials were not legally obscene. The Ninth Circuit determined that the government could not appeal the decision.

Hill is distinguishable for two reasons.⁵  One, the court did not determine whether the defendant had waived his right to a jury trial; and two, evidence was actually entered into the record. The district court determined the character of that evidence so it may be said that jeopardy had attached.

We are aware of the rationale behind the decision in Findley (and equally applicable in Hill and here):

"If an appeal will lie in the present case, while it cannot if the defendant waits and subjects himself to jeopardy, informed counsel believing they have a defense on the merits will henceforth protect their clients by avoiding an expediting procedure otherwise beneficial to all concerned, and only ignorant and ill-advised defendants will subject their defense on the merits to a government appeal." United States v. Findley, supra 439 F.2d at 974.

But we find this consideration is outweighed by Congress' intention as expressed in the plain wording of the statute.⁶  As the Supreme Court commented in Sisson, supra 399 U.S. at 307, 90 S. Ct. at 2139:

"Clarity is to be desired in any statute, but in matters of jurisdiction it is especially important. Otherwise the courts and the parties must expend great energy, not on the merits of a dispute settlement, but on simply deciding whether a court has the power to hear a case."

Our interpretation of Sec. 3731 does not subvert any constitutional rights of citizens. It merely gives effect to the Congressional intention not to expand on these rights.⁷ 

Our review of the district court's interpretation of Sec. 186(b) is governed by our recent decision in United States v. Lanni, 466 F.2d 1102 (3d Cir. 1972). In Lanni, we emphasized that Sec. 186(b) forbids all payments, direct or indirect, between employers and representatives of employees. This result follows from both the plain wording of the statute and the Congressional history. The Supreme Court has read the statute as we read it, United States v. Ryan, 350 U.S. 299, 305, 76 S. Ct. 400, 100 L. Ed. 335 (1956); and so has the Second Circuit. United States v. Ricciardi, 357 F.2d 91, 99 (2d Cir. 1966).

The district court indicated that some kind of "corrupt purpose" was necessary for a violation of Sec. 186(b) to occur.⁸  As we have stated, that is simply not correct. To allow a device such as this to go unchecked would make a mockery of attempts to enforce Sec. 186(b). It would not take much ingenuity to devise an insulating body between an employer and a representative of employees and shuttle the payments through the body. The congressional purpose in enacting Sec. 186(b) would be poorly served by our allowing it.

As we stated in Lanni and reiterate here, all that was necessary to prove a wilful violation of Sec. 186(b) is that appellee benefited from the money paid to the Committee with knowledge:

(1) that there were "payments"; and

(2) that the payments came from employers who employed workers represented by Pecora. United States v. Lanni, 466 F.2d 1102, 1110.

There are stated exceptions to the strict rule of Sec. 186(b). Appellee claims that the testimonial dinner falls within subsection (c) (3). This subsection permits "the sale or purchase of an article or commodity at the prevailing market price in the regular course of business." 29 U.S.C. § 186(c) (3). Appellee contends that the dinner committee "sold" a testimonial dinner at the prevailing market price.

This contention is entirely lacking in merit, and we reject it. Even if we were to assume that a testimonial dinner was a "commodity," and even if we were to assume that it was sold in "the regular course of business," it would strain credulity to believe that the market price for an advertisement in the program was $300 or that the value of the dinner was twenty-five dollars per person. The fact that out of gross proceeds of $44,400 the expenses of the dinner amounted only to $11,871.72 belies a conclusion that the testimonial was offered at the market price.

Appellee also contends that there was no evidence that he knew or was aware that any of the money he received came from employers whose employees were represented by appellee. This contention is also without merit. Incorporated into the stipulation were portions of the grand jury testimony of the chairman of the dinner committee. In that testimony, the chairman stated that appellee on various occasions would ask the chairman's secretary how the dinner was "coming along"; that on one occasion he went with the chairman to make arrangements for the dinner; and that at the dinner were various contractors who dealt with local unions represented by appellee. The chairman further testified that appellee was at the dinner, that he had been in the union for thirty years, and that he dealt with contractors "all of the time." From this testimony, one can easily infer that appellee knew that employers of union members he represented had contributed money.

The order of the district court sustaining the motion to dismiss the indictment will be reversed, and the case remanded to that court for trial.