Coercion Isn’t Extortion, Supreme Court Rules

WASHINGTON (CN) - Coercing a positive review from the general counsel for a state comptroller did not amount to extortion, the U.S. Supreme Court ruled Wednesday.

Prosecutors had informed the general counsel for New York's comptroller in 2009 about their investigation of a placement agent with FA Technology Ventures.

Since the state comptroller had been considering investing $35 million from employee pension funds with FA, news of the investigation led the general counsel to caution against the investment.

FA stood to make $7.6 million in management fees over 10 years had the investment gone through.

After an FA employee learned about the recommendation, the general counsel received an anonymous email on his work account about a "serious ethical issue." He later received threatening emails on his personal email account over the FA deal.

The emails warned that the general counsel's wife would learn of her husband's office affair unless he changed his tune about the FA recommendation.

After the general counsel pulled in law enforcement, the FBI tracked the emails to the Brookline, Mass., home of Giridhar Sekhar, an FA Technology managing partner.

Sekhar admitted to having sent the emails and was indicted for attempted extortion and six counts of interstate transmission of extortionate threats.

In a pro se objection, Sekhar argued that extortion charges must involve an attempt to obtain property, and that the "recommendation" or "approval" of counsel does not meet that standard.

A federal judge concluded otherwise, and a jury convicted Sekhar of extortion and five of the six interstate threat counts, earning him 15 months in prison.

The 2nd Circuit affirmed in June 2012, but Sekhar won reversal from the Supreme Court on the last day of its term Wednesday.

"As far as is known, no case predating the Hobbs Act - English, federal, or state - ever identified conduct such as that charged here as extortionate," Justice Antonin Scalia wrote for a six-member majority. "Extortion required the obtaining of items of value, typically cash, from the victim. It did not cover mere coercion to act, or to refrain from acting."

Scalia also noted that Supreme Court precedent "similarly de­mands reversal of petitioner's convictions."

"Whether one considers the personal right at issue to be 'property' in a broad sense or not, it certainly was not obtainable property under the Hobbs Act," he added (emphasis in original).

Scalia slammed the government's for its "absurd" arguments on the definition of property.

"Clearly, petitioner's goal was not to acquire the general counsel's 'intangible property right to give disinterested legal advice,'" the ruling states. "It was to force the general counsel to offer advice that accorded with petitioner's wishes. But again, that is coercion, not extortion."

"No fluent speaker of English would say that 'petitioner obtained and exercised the general counsel's right to make a rec­ommendation,' any more than he would say that a person 'obtained and exercised another's right to free speech,'" Scalia added (Emphasis in original). "He would say that 'petitioner forced the general counsel to make a particular recommendation,' just as he would say that a person 'forced another to make a statement.' Adopting the government's theory here would not only make nonsense of words; it would collapse the longstand­ing distinction between extortion and coercion and ignore Congress's choice to penalize one but not the other. That we cannot do."

Concurring in the judgment, Justice Samuel Alito called Sekhar's case "an outlier," and said "the jury's verdict stretches the concept of property beyond the breaking point."

"The court holds that petitioner's conduct does not amount to attempted extortion, but for a different reason: According to the court, the alleged property that petition­er pursued was not transferrable and therefore is not capable of being 'obtained,'" Alito added. "Because I do not believe that the item in question constitutes prop­erty, it is unnecessary for me to determine whether or not petitioner sought to obtain it."

Justices Anthony Kennedy and Sonia Sotomayor joined Alito's opinion. The rest of the justices joined with the Scalia.

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