{"id":3410,"date":"2021-04-13T10:38:10","date_gmt":"2021-04-13T17:38:10","guid":{"rendered":"https:\/\/www.crimeandconsequences.blog\/?p=3410"},"modified":"2021-04-13T10:38:28","modified_gmt":"2021-04-13T17:38:28","slug":"litigation-threats-and-extortion","status":"publish","type":"post","link":"https:\/\/www.crimeandconsequences.blog\/?p=3410","title":{"rendered":"Litigation Threats and Extortion"},"content":{"rendered":"

Threatening a groundless lawsuit unless the target pays money has often been referred to a “legalized extortion.” But maybe it’s not always legal.<\/p>\n

The Hobbs Act makes it federal crime to obstruct, delay, or affect commerce by extortion. Extortion is defined as \u201cthe 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.\u201d See 18 U.S.C. \u00a7 1951(a). Does “wrongful” include a “threat of sham litigation.”<\/p>\n

Yes, the U.S. Court of Appeals for the Ninth Circuit held today in United States<\/em> v. Koziol<\/em><\/a>, No. 19-50018.<\/p>\n

Koziol first argues that his conviction must be reversed because the threat of litigation, even when \u201cfrivolous, meritless, or made in bad faith,\u201d can never constitute \u201cwrongful\u201d conduct under the Hobbs Act, 18 U.S.C. \u00a7 1951. Koziol made the same argument in his post-trial motion for acquittal, which the district court denied, concluding that Koziol\u2019s \u201cthreatened litigation was entirely sham in nature and made for an improper purpose,\u201d and thus \u201cwrongful\u201d under the Hobbs Act.<\/p>\n

When the denial of a motion for acquittal turns on the district court\u2019s interpretation of a statute, we review the decision de novo. See United States v. Lo<\/em>, 839 F.3d 777, 783 (9th Cir. 2016). We conclude that there is no statutory, constitutional, or policy basis to support Koziol\u2019s argument that threats of sham litigation are categorically excluded from criminal liability under the Hobbs Act.4<\/sup> Therefore, we reject Koziol\u2019s argument and affirm the denial of his motion for acquittal.<\/p>\n

\n

4<\/sup> We have previously held that the Hobbs Act does not impose liability for threats of litigation that do not rise to the level of a sham. See Sosa v. DIRECTV, Inc<\/em>., 437 F.3d 923, 939\u201340 (9th Cir. 2006). But we have not previously addressed whether the Hobbs Act applies to threats of sham litigation. In Section II.B, we address the definition of sham litigation and whether Koziol\u2019s threats rise to that level.<\/p><\/blockquote>\n

This is a particularly aggravated case, going considerably beyond the tactics of the bottom-feeders of the legal profession who make their living off of “nuisance settlements.” Even so, it is good to see that extortion by litigation does not get a blank check.<\/p>\n

The district judge sentenced Koziol to five years, ten months in the federal slammer. However, the judge made a mistake in applying the Federal Sentencing Guidelines, which are slightly less complicated than the Internal Revenue Code. The case goes back, but I do not expect that Koziol will do much better on the second try.<\/p>\n","protected":false},"excerpt":{"rendered":"

Threatening a groundless lawsuit unless the target pays money has often been referred to a “legalized extortion.” But maybe it’s not always legal. The Hobbs Act makes it federal crime to obstruct, delay, or affect commerce by extortion. Extortion is defined as \u201cthe 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.\u201d See 18 U.S.C. \u00a7 1951(a). Does “wrongful” include a “threat of sham litigation.”<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,23],"tags":[],"class_list":["post-3410","post","type-post","status-publish","format-standard","hentry","category-civil-suits","category-general"],"yoast_head":"\nLitigation Threats and Extortion - Crime & Consequences<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.crimeandconsequences.blog\/?p=3410\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Litigation Threats and Extortion - Crime & Consequences\" \/>\n<meta property=\"og:description\" content=\"Threatening a groundless lawsuit unless the target pays money has often been referred to a “legalized extortion.” But maybe it’s not always legal. 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