Government Employees Not Subject to RICO Suit for Extortion: Supreme Court

This posting was written by Sonali Oberg, editor of CCH RICO Business Disputes Guide.

Government officials acting pursuant to their regulatory capacity could not be guilty of the RICO predicate act of extortion for attempting to obtain property for the sole benefit of the government, according to a June 25 decision of the U.S. Supreme Court

Employees of the federal Bureau of Land Management (BLM) could not have engaged in various forms of extortion in an attempt to force a landowner to re-grant an easement that the BLM had lost, the Court held.

Harassment and Intimidation

According to the complaining landowner, the government employees pursued a campaign of harassment and intimidation to force him to re-grant the lost easement, including (1) performing unauthorized surveys of the former easement; (2) illegally entering the landowner’s lodge; (3) bringing regulatory charges against the landowner for trespass, land use violation, and unauthorized road repairs; and (4) pursuing criminal charges for which the landowner was acquitted.

All these activities constituted extortion under the Hobbs Act and adversely affected the landowner's business by interfering with his guest ranch operations, according to the federal RICO claim.

Extortion

The government contended it had a valid claim of entitlement to the disputed property, which would be a complete defense against extortion. The Hobbs Act— which prohibits actual or attempted robbery or extortion affecting interstate or foreign commerce—does not apply when the U.S. government is the intended beneficiary of allegedly extortionate acts, the Supreme Court held.

The Act did not speak explicitly to efforts to obtain property for the government rather than a private party. Without some other indication from Congress, it is not reasonable to expose all federal employees to extortion charges whenever they stretch in trying to enforce government property claims, the Court held.

RICO Predicate Act

Because the employees' conduct did not fit the traditional definition of extortion, it also did not survive as a RICO predicate offense on the theory that it was chargeable under state law. There was no decision by any court from the entire 60 years of the Hobbs Act that found extortion in the efforts of government employees to get property for the exclusive benefit of the government, according to the Court.
The Supreme Court overturned a holding by the U.S. Court of Appeals in Denver (CCH RICO Business Disputes Guide ¶10,322) that the landowner could proceed with a RICO claim against BLM employees.

The opinion is Wilke v. Robbins, Docket No. 06-219, decided June 25, 2007. It will appear in CCH RICO Business Disputes Guide.