The Obama Administration faced a skeptical U.S. Supreme Court on Tuesday as it argued that the attempted extortion of a lawyer’s advice is a crime under a 1946 federal law.
During arguments in Sekhar v. U.S., the justices vigorously pressed lawyers on both sides on whether Giridhar Sekhar’s attempt to blackmail the general counsel of a New York employee pension fund in order to change the counsel’s recommendation on an investment was an extortion of "property" under the Hobbs Act.
The federal law does not define "property," and the Supreme Court has yet to determine the reach of that requirement in the law.
"The crime of extortion under the Hobbs Act, like the related crimes of larceny, burglary and embezzlement, is at bottom a property crime," said Sekhar’s counsel, Paul Clement of Bancroft. "The government has offered you a definition of property that only a prosecutor could love: any intangible right with economic value."
Instead, Clement contended, property has to be "alienable, transferable, movable" in order to fall within the Hobbs Act.
But the court has held that a person has a property interest in running a business and in doing their job, countered Assistant to the Solicitor General Sarah Harrington. "When someone comes along and uses threats of harm or threats of force or violence to try to get them to do their job in a different way, what they are doing is they are taking control of that property interest that the person has," she argued.
Sekhar was the managing partner of a venture capital firm that was being considered as a possible $35 million-investment by the pension fund’s sole trustee, the New York comptroller. The comptroller’s general counsel, Luke Bierman, recommended against the investment in an internal memorandum, and the comptroller subsequently decided not to issue a "commitment" to Sekhar’s fund.
Several days after that decision, Bierman began receiving a series of anonymous emails, which he reported to law enforcement officials, demanding that he reverse his recommendation or the writer would disclose an alleged affair between Bierman and a co-worker to Bierman’s wife and others. The FBI traced the emails to Sekhar. He was charged under the Hobbs Act and a jury convicted him after finding that the property he attempted to extort was Bierman’s recommendation to approve the comptroller’s commitment to invest.
The U.S. Court of Appeals for the Second Circuit affirmed the conviction. It said property under the Hobbs Act includes both tangible and intangible property, the latter being "any valuable right considered as a source or element of wealth."
A number of justices struggled with the government’s definition of the property right in the case.
"By accepting your definition do we suddenly throw within the statute, which speaks of property, any time there is an appropriate threat which has as a condition the person doing the job differently?" asked Justice Stephen Breyer. "That’s true of whether it’s a postman, you know, any public official, any private official, anybody."
Justice Anthony Kennedy, agreeing with Breyer, called the government’s approach "far reaching."
However, Harrington explained, "Not every time you interfere with someone’s doing of their job are you obtaining that property. Here, what [Sekhar] was trying to do was not keep the general counsel from making a recommendation; he was attempting to dictate the substance of what the recommendation was, and in doing so, he was trying to exercise the general counsel’s right to make the recommendation, his right to do his job, and that was his property."
Sekhar’s approach, she added, would "wipe out the heartland of Hobbs Act organized crime prosecutions" or any extortion of a business that provides services instead of tangible goods. "Doing a job is a source of economic value to a person and the court should construe it as property, and the right to exercise control over doing their job is also property," she said.
In rebuttal, Clement said that if his argument prevails, "the Government’s going to have to be careful. They’re going to have to write their indictments to focus on things like money or obtainable property, and they can’t get sloppy and put together these autonomy interests and call them property."
Marcia Coyle can be contacted at firstname.lastname@example.org.