People v. Newspaper & Mail Deliverers' Union of New York & Vicinity
Court: Appellate Division of the Supreme Court of the State of New York; December 2, 1998; New York; State Appellate Court
A corruption investigation into the Newspaper and Mail Deliverers’ Union of New York revealed multiple illegal activities conducted by the Union's officers, members, and agents, including organized crime associates. The Union, which manages the distribution of newspapers in the New York Metropolitan area, has collective bargaining agreements with major newspapers like the New York Times and the Daily News. Key findings from the indictment included:
- The Union leadership allegedly maintained fictitious employees on their payrolls, allowing target employers to pay wages and Union fees for non-existent workers.
- Foremen conspired with shop stewards to facilitate this falsification, while others falsified newspaper returns to obtain refunds from distribution companies.
- Instances of theft from loading docks were reported, with stolen newspapers delivered to non-Union "bootlegger" distributors.
- Union business agents and company foremen were implicated in accepting bribes to overlook violations of collective bargaining agreements and to assign Union drivers to bootleggers.
- Strike funds held for Union members were reportedly stolen, and the Union’s Executive Board allowed ineligible confederates to join and pay dues.
- Complaints from Union members about these activities often led to assaults.
- Many involved were alleged to be affiliated with organized crime.
As a result of these findings, the Union faced an indictment for enterprise corruption under Penal Law § 460.20, based on 81 pattern acts, including grand larceny, falsifying business records, commercial bribery, and physical assaults against dissenting members. Additionally, several individual members were indicted for enterprise corruption and related offenses.
The indictment involved several individuals associated with organized crime and union corruption. James Galante, linked to the Bonanno crime family, and John Vispiano, a New York Post Union foreman, both pleaded guilty to enterprise corruption. Joe Steo, another foreman, pleaded guilty to grand larceny. Michael Diana, a Union business agent, admitted to enterprise corruption for stealing strike funds, while Leo D’Angelo, a general foreman, pleaded guilty to enterprise corruption related to a phantom employee scheme, misappropriation of seniority rights, and orchestrating an assault on a noncooperating member. Two assistant foremen, Jackie Piervencenti and Thomas Carrube, pleaded guilty to perjury. Michael Alvino, a former Union president, pleaded guilty to criminal contempt for his Grand Jury testimony regarding bribes delivered to former president Douglas LaChance, who had a history of bribery but was re-elected in 1991. The indictment suggests systemic corruption within the Union, effectively operating for the benefit of corrupt individuals.
The appeal raises issues about the Union's ability to be indicted as an unincorporated association and the adequacy of the Grand Jury instructions regarding liability under Labor Law § 807(6). The prosecution argued that the indicted individuals' actions were facilitated by the Union's complicity, and instructed the Grand Jury that to indict the Union, they needed to find evidence of the Union's actual involvement. The Union contested the indictment, claiming it could not be held liable for the unauthorized acts of its members and that proving the collective mental state of an unincorporated association was impossible. However, the motion court ruled that the Union qualifies as a 'person' under the Penal Law and is subject to the enterprise corruption statute, rejecting the Union's legal sufficiency challenge.
The court referenced Martin v Curran to assert that under New York common law, an unincorporated association cannot be held liable for the unlawful acts of its members unless all members authorized or ratified those acts. Consequently, the motion court dismissed the indictment, concluding that Labor Law § 807(6) applied only to labor disputes and was not relevant to the case at hand. However, the court incorrectly determined that the common-law principle based on Martin v Curran prohibited the action due to a lack of specific legislation. While the court upheld the Grand Jury instructions regarding enterprise corruption as sufficiently detailed, it criticized the clarity of terms like "actual participation," "actual authorization," and "ratification after actual knowledge," suggesting that their ambiguity could mislead jurors in assessing liability imputation from individuals to the Union.
Disagreeing with the motion court, the summary emphasizes that the Union fits within the enterprise corruption statute's definition, which encompasses groups engaging in criminal conduct with a structured organization beyond individual incidents. The statute defines "person" to include unincorporated associations, which undermines the motion court's reliance on Martin v Curran. Rejecting the notion that unincorporated associations cannot be criminally liable would render the relevant Penal Law provision meaningless. Furthermore, applying criminal liability to unions aligns with the legislative intent to combat organized crime's infiltration of such entities, protecting them from being manipulated for criminal purposes.
The Legislature linked the rise of organized crime to insufficient sanctions and remedies for addressing complex criminal structures. Instead of precise definitions, the Legislature emphasized that terms should have their plain meaning based on legislative intent. The inclusion of unincorporated associations in the definition of 'person' aligns with the objectives of article 460, which aims to combat pervasive corruption, particularly within unions. The defendant argues that unincorporated associations lack the cohesion necessary to impose liability collectively, but the modern union is characterized as a structured entity with clear purposes, not a loose gathering of individuals. Expanding liability to include such associations encourages them to monitor their members more effectively. Historically, racketeering prosecutions targeted individuals, allowing corrupt entities to persist as new corrupt individuals emerged. Article 460 was designed to indict corrupt associations, including unions, regardless of their legal form. The Union cannot evade liability by claiming its members were victims of crime since the alleged criminal actions were conducted under the Union's authority. Previous case law, such as Martin v Curran, does not apply here as it dealt with tort liability rather than criminal liability, and the court will not amend statutes to fit modern realities. The enactment of Penal Law article 460, in conjunction with the definition of 'person,' empowers prosecutors to indict associations previously deemed insufficiently defined.
The application of the Martin common-law rule is challenged on the grounds that it would undermine the legislative intent of Penal Law article 460 by shielding a corrupt union from prosecution under RICO, thereby protecting its financial gains from state enforcement. The document states that obsolete common-law doctrines may be discarded as societal circumstances evolve. It addresses concerns regarding the clarity of key terms in Labor Law § 807, asserting that these terms are commonly understood and that the grand jurors received adequate instruction. Labor Law § 807 applies to labor disputes and does not establish criminal liability standards, but it imposes a heightened threshold for attributing liability to union officers. The indictment against the Union was supported by stringent standards and adequately informed the Grand Jury to determine if a crime occurred. The Union failed to demonstrate that jury instructions were so deficient as to compromise the integrity of the Grand Jury process, which is necessary for dismissal. Consequently, the Supreme Court's dismissal of the indictment for enterprise corruption is reversed, the indictment is reinstated, and the case is remanded for further proceedings.
