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Appellate Court Confirms that Steering Contracts to a Third Party Can Violate the Hobbs Act

The First Circuit Court of Appeals recently ruled that steering contracts to a third party may violate the federal prohibition against extortion — even where the extortionist receives no personal benefit. The case, United States v. Brissette, serves as a stark reminder of the breadth of conduct that can constitute “extortion” under the Hobbs Act.

Brissette concerned two Boston city officials, Kenneth Brissette and Timothy Sullivan, who attempted to leverage a permit needed to produce a music festival at a public venue into work for members of a particular labor union. Brissette, who had the power to issue the required permits, and Sullivan, the mayor’s Chief of Staff, allegedly insisted that the festival’s production company hire members of the union even though the production company already had a contract with another company that satisfied its labor needs. The city ultimately issued the permit but did so only after the production company hired eight workers and a foreman who were members of the labor union preferred by Brissette and Sullivan.

The United States charged Brissette and Sullivan with extortion under the Hobbs Act, claiming that they obtained, through the fear of economic harm, the wages paid to the union workers for “imposed, unwanted, and unnecessary and superfluous services and benefits.”1

The Hobbs Act prohibits, among other things, “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.”2 Brissette and Sullivan successfully argued before the district court that their conduct did not qualify as “obtaining of property from another” because they did not themselves receive a personal benefit as a result of the alleged conduct.

The First Circuit overturned the district court, holding that the Hobbs Act does not require that a defendant receive a personal benefit when “obtaining” property through extortion. By deciding that the Hobbs Act’s “obtaining” element can be met when property is transferred to a third party, without regard to any personal benefit, the Brissette court brings the First Circuit in line with the Second, Third, Eighth, Ninth, and Tenth Circuits, all of which have reached a similar conclusion.3

The court also determined that directing wage payments to a third person, whether for real or fictitious work, by using the victim’s fear of economic harm counts as “obtaining of property from another” under the Hobbs Act.

Brissette left open the question of whether such conduct would ultimately satisfy the statute’s “wrongfulness” requirement, noting that the issue had not been addressed by the parties or the lower court. Given that merely causing someone to have an economic fear is not necessarily “wrongful” under the Hobbs Act according to First Circuit precedent,4 we will continue tracking Brissette and the decisions of the district court. The ultimate resolution of this case will provide further clarity as to what conduct runs afoul of the Hobbs Act.

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1 United States v. Brissette, No. 18-1254, 2019 WL 1397579, at *2 (1st Cir. Mar. 28, 2019).

2 18 U.S.C. § 1951(b)(2).

See United States v. Carlson, 787 F.3d 939, 944 (8th Cir. 2015); United States v. Vigil, 523 F.3d 1258, 1264 (10th Cir. 2008); United States v. Gotti, 459 F.3d 296, 324 n.9 (2d Cir. 2006); United States v. Panaro, 266 F.3d 939, 943 (9th Cir. 2001); United States v. Provenzano, 334 F.2d 678, 686 (3d Cir. 1964).

See Brissette, 2019 WL 1397579, at *12 (citing United States v. Burhoe, 871 F.3d 1, 9 (1st Cir. 2017)).

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.