Archive for March, 2009

ROY and ROY v WALTON COUNTY, FLORIDA. Case No. 3:06cv95/MCR/EMT. March 31, 2009

Tuesday, March 31st, 2009

M. Casey Rodgers, Judge.

ORDER
This case involves the proposed development of real property in Walton County, Florida, owned by plaintiffs Sony and Raymonde Roy (“plaintiffs” or “the Roys”). Alleging they have been prevented from fully developing the property by the discriminatory actions of the defendants, the Roys assert various constitutional and statutory violations for which they seek damages, a declaratory judgment, attorneys’ fees, and other relief. Pending are defendants’ motions for summary judgment and plaintiffs’ cross-motion for partial summary judgment. Also pending are the motions of defendants Nelson, Vogel, and Webb for leave to amend their answers. The court heard oral argument on the motions on September 25, 2008. For the reasons that follow, defendants’ motions for summary judgment are GRANTED, plaintiffs’ cross-motion for partial summary judgment is DENIED, and defendants’ motions for leave to amend are DENIED as moot.

BACKGROUND2

Plaintiffs, a married couple originally from Haiti, are residents of Georgia and citizens of the United States. They are black. The Roys own property in Walton County along Route 30A in an area that historically has been racially segregated. The Roys sought to build a subdivision on the property called Chateaux de Paris which they intended to market substantially but not exclusively to blacks, including sports figures and professionals. Mr. Roy (“Roy”) and his wife also planned to build their own home on one of the lots. On May 4, 2004, the Roys obtained a final development order for the property from defendant Walton County Board of County Commissioners (“the County”) for a seven parcel subdivision. The order permitted the construction of houses three storeys in height, ordinary utilities and roadway improvements, common areas, a front wall, and perimeter fencing. Roy (and Chateaux de Paris, LLC, a Georgia development company working under a development agreement with Roy) subsequently began construction.

According to the Roys, during construction defendants Kenneth C. Vogel (“Vogel”) and Margaret “Meg” Nelson (“Nelson”) informed him that his plan to build three story homes was prohibited under a legal ruling in a case in which Nelson had been a party.3 Roy later determined, however, that the case had been voluntarily dismissed with no judgment having been entered, which caused him to believe that Vogel and Nelson’s statements were intended to dissuade him from proceeding with his subdivision. Further, Roy alleges that on October 6, 2004, defendant Charles C. Webb (“Webb”), sent an email to the County identifying ways in which the Roys’ development failed to conform to the County’s final development order, but this e-mail is not part of the record.4 The Roys maintain that as a result of Webb’s complaint the County issued a stop-work order, citing Roy’s failure to obtain a building permit for construction of retaining walls.5 No evidence supports this suggestion, either. The Roys have not introduced the stop-work order into the record, and the County denies having issued the stop-order.6 Plaintiffs also claim Roy was forced to obtain a building permit for these retaining walls, but support for this contention is also missing from the record.

On or about December 15, 2004, County staff performed a final inspection of the construction and approved the release of the Roys’ letter of credit. Roy then applied to the Walton County Planning Division for approval of his subdivision plat.7 Final plat approval by the County’s Planning Division was scheduled for May 24, 2005. Between December 15, 2004, and February 25, 2005, Roy and various County staff had discussions about the progress of construction, including the front privacy wall. During these discussions, Roy was advised by County officials that constructing a wall at the front property line would be acceptable and he would not need a permit for the construction so long as the wall was non-weight bearing. Based on these discussions, Roy provided written notice to the County on February 25, 2005, of his intent to fence and gate the subdivision by placing fencing on top of the rear and side retaining walls and to build a privacy wall along the property line at the front of the subdivision.8 After providing the February 25, 2005, notice, Roy began construction of a masonry privacy wall at the front of the property, which encompassed nearly all of the linear frontage along Route 30A and required the removal of a strip of native vegetation on the property.

On May 11, 2005, Webb sent a letter to Kenneth Goldberg, his attorney,9 complaining that Roy’s development violated the County’s zoning code. After receiving Webb’s letter Goldberg went to Blackshear’s office to personally deliver Webb’s complaints.10 The same day Blackshear dispatched two code enforcement employees to the Roys’ property to investigate and asked them to post a stop-work order if there were indeed violations. The staff visited the property that day and found violations for which they issued a stop-work order. According to the County, the Roys’ property lies in the “Route 30A scenic corridor” as established by the County’s Comprehensive Land Use Plan and implemented under its Land Development Code. The rules of the Land Development Code provide that native vegetation must be planted by the roadside and structures must be set back a specific distance from the roadway and limited to a width of 65% of the linear frontage on the roadway.11 The stop-work order was issued because, according to the County, the Roys’ privacy wall violated these specific buffer requirements and the rules protecting native vegetation.

The stop-work order had limited effect, as it only prohibited work on the wall and in the native vegetation zone. The Roys were not prevented by the order from installing roads, infrastructure, or other upgrades. They were not, however, able to sell or develop lots during this time because their plat application had not yet been approved. Consideration of the application had been set for the Planning Division’s May 24, 2005, meeting, but following the issuance of the stop-work order County staff removed the plat application from the agenda. The County claims the application was removed from the agenda because the Land Development Code provides that no orders may be issued for development when a stop-work order is pending. Nonetheless, shortly after the plat application was removed from the agenda, defendant Blackshear, as Planning Director, made the decision to grant relief to the Roys from this part of the code. Blackshear felt responsible for the confusion the County staff had caused the Roys, and thus she decided to interpret the stop-work order as relating only to the privacy wall. As a result, the plat application was placed back on the Planning Division’s July 2005 meeting agenda. The application was approved at this meeting, clearing any impediments to the Roys’ ability to fully market and develop their property.12 The County acknowledges the two-month delay that may have slowed home construction in the subdivision, but it insists that this was the only impediment experienced by the Roys at any time, with the exception of the prohibition concerning the wall itself. Indeed, it is undisputed that, after the July 2005 plat approval, the Roys were never prohibited from developing the subdivision’s lots and marketing them to whomever they desired.

Prior to the plat approval, and in response to the Roys’ complaints about their application being withdrawn from the May 2005 agenda, the Planning Division sent Roy a letter on June 3, 2005, advising him of the need to comply with the Land Development Code’s buffer requirements and suggesting three options: (1) remove the privacy wall and replant the native vegetation he had removed; (2) apply to the BOA for a variance; or (3) appeal the County’s May 11, 2005, stop-work order — presumably to the Board of County Commissioners or a state circuit court. Roy chose to file a petition for a variance with the BOA, which he did on June 21, 2005. A hearing on the petition was scheduled for September 22, 2005.13

On September 20, 2005, on behalf of Webb, Goldberg filed a motion to dismiss Roy’s variance petition for lack of jurisdiction with the BOA.14 Before considering the variance petition, the BOA heard argument on the motion from Goldberg, County staff, and Roy. Goldberg argued that the variance petition could not be heard by the BOA because Roy was seeking an exception to the Comprehensive Plan, which could only be granted by the Board of County Commissioners. According to Goldberg, the BOA did not have the authority to permit the Roys to build the wall in the setback zone in contravention of the Comprehensive Plan. After hearing argument on the motion to dismiss, the BOA deferred a decision on the motion to dismiss and tabled Roy’s variance petition.

During a recess of the BOA meeting and after the hearing on the motion to dismiss, County Attorney David Hallman (“Hallman”) told Roy that in light of the procedural difficulties he had encountered, namely the conflicting advice he had received from County staff regarding his ability to construct the front privacy wall, he would recommend that an “estoppel letter” be issued from the Planning Division allowing construction of Roy’s privacy wall to go forward. The estoppel letter was issued by Blackshear on November 3, 2005. In the letter, the County admitted that some of its staff had erroneously represented to Roy that he could construct the privacy wall at the property line. Because these representations had been made prior to the construction of the front wall, the County concluded the Roys should be permitted to reasonably rely on them. Thus, according to the letter, the County would not enforce violations of the wall “as proposed.” The letter also provided that any person adversely affected by the letter could appeal it to the BOA within thirty days.

On November 28, 2005, Goldberg filed, by e-mail to the Planning Division, an appeal of the estoppel letter contesting the Division’s authority to issue the letter. Under Goldberg’s interpretation of the Land Development Code, only the Board of County Commissioners could make an estoppel determination. Accordingly, Goldberg argued, the estoppel letter had been issued without legal authority. Goldberg followed up with a second e-mail on December 19, 2005, requesting that a new stop-work order be issued and the matter be brought before the BOA for hearing. County Attorney Hallman then determined that the matter should be placed on the BOA agenda and that Roy should be given appropriate notice.15 The next day, December 20, 2005 — pending the BOA’s decision on the estoppel letter — another stop-work order was issued and posted on the Roys’ property. As did the May 2005 order, this order cited Roy for clearing the native vegetation zone and building a wall in the scenic corridor; it did not purport to prohibit the Roys from developing any other part of the property.16 By this time the Roys’ plat application had been approved for over five months.

Roy received actual notice of the stop-work order when it was posted on December 20, 2005, but Roy claims he did not receive the November 3, 2005, estoppel letter until January 2006 and only after it was forwarded to him by a neighbor. On January 6, 2006, through counsel, Roy faxed written notice to Blackshear that he understood the estoppel letter to mean all stop-work orders were no longer in effect and that he intended to rely on the letter to complete the front privacy wall.17 On January 9, 2006, however, the County issued and sent, by certified mail to Roy’s address in Georgia, an “amended notice of violation” reaffirming the December 2005 stop-work order. This notice again cited the setback and native vegetation violations and gave Roy thirty days in which to comply.18

After communicating with Roy and his counsel, Blackshear scheduled a final meeting to discuss the matter. The meeting was held on February 2, 2006, and was attended by Blackshear, Hallman and other County staff, Roy, Mrs. Roy (by telephone), Roy’s brother, Nelson, and Goldberg; according to the defendants, Goldberg stated to all present that he was in attendance on behalf of Webb.19 At the meeting, Hallman informed the Roys that the estoppel letter would be rescinded based on his determination that the Planning Division did not have the authority to issue it. Hallman also told the Roys the County would prepare a new letter regarding the status of the development. On hearing this, Roy became upset and left the meeting, leaving his attorney behind. Roy waited outside the County’s offices, where he observed Goldberg and Nelson having a conversation after the meeting ended. The Roys suggest this is further evidence of a conspiracy but Nelson claims the conversation was innocent and was conducted in the usual course of her long friendship with Goldberg.

On March 6, 2006, the Roys filed their initial complaint in this court. They have since been permitted to amend the complaint three times. On defendants’ prior motions, the court dismissed several of the Roys’ claims with prejudice and others without prejudice. Four claims now remain: Count III, 42 U.S.C. § 1981 (equal right to make and enforce contracts), against all defendants except the County20; Count IV, 42 U.S.C. § 1982 (equal right to hold and enjoy property), against all defendants; Count VI, 42 U.S.C. § 1985(3) (conspiracy to violate civil rights), against all defendants; and Count VII, 42 U.S.C. § 3604 (Fair Housing Act), against all defendants.

STANDARD OF REVIEW

A motion for summary judgment should be granted when “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A factual dispute is “ ‘genuine’ if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed. 2d 202 (1986). A fact is “material” if it “might affect the outcome of the suit under the governing [substantive] law.” Anderson, 477 U.S. at 248; Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 998 (11th Cir. 1992). The court must view the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in the nonmoving party’s favor. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); see Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1609, 26 L.Ed.2d 142 (1970). “If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment.” Miranda v. B & B Cash Grocery Store, Inc., 975 F.2d 1518, 1534 (11th Cir. 1992) (citation omitted). Nevertheless, a general denial unaccompanied by any evidentiary support will not suffice. Fed.R.Civ.P. 56(e)(2); see, e.g., Courson v. McMillian, 939 F.2d 1479 (11th Cir. 1991); Hutton v. Strickland, 919 F.2d 1531 (11th Cir. 1991). Furthermore, the court is not obliged to deny summary judgment for the moving party when the evidence favoring the nonmoving party is merely colorable or is not significantly probative. See Anderson, 477 U.S. at 249. To avoid summary judgment, the nonmoving party “must do more than show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., 475 U.S. at 586. Indeed, the existence of a scintilla of evidence in support of the nonmovant’s position is insufficient; the test is “whether there is [evidence] upon which a jury could properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed.” Id. at 252. The moving party has the initial burden of showing the absence of a genuine issue as to any material fact. See Adickes, 398 U.S. at 157; Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). Once the movant satisfies its burden of demonstrating the absence of a genuine issue of material fact, the burden shifts to the nonmovant to “come forward with ‘specific facts showing that there is a genuine issue for trial.’ ” Matsushita Elec. Indus. Co., 475 U.S. at 587 (emphasis omitted). Otherwise stated, the nonmovant must “demonstrate that there is indeed a material issue of fact that precludes summary judgment.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991).

DISCUSSION

Counts III, IV, and VI: 42 U.S.C. §1981, §1982, and §1985(3)

To prevail on a claim under §1981, §1982, or §1985, a plaintiff must prove intentional discrimination on the basis of race. See Gen. Bldg. Contractors Ass’n v. Pennsylvania, 458 U.S. 375, 391, 102 S.Ct. 3141, 3150, 73 L.Ed.2d 835 (1982) (§ 1981); Jackson v. Okaloosa County, Fla., 21 F.3d 1531, 1543 (11th Cir. 1994) (§ 1982); Morris v. Office Max, Inc., 89 F.3d 411, 413 (7th Cir. 1996) (§§ 1981 and 1982); Griffin v. Breckenridge, 403 U.S. 88, 102, 91 S.Ct. 1790, 1798, 29 L.Ed.2d 338 (1971) (§ 1985). Because intentional discrimination is required, a mere “showing of disparate impact through a neutral practice is insufficient”; rather, the plaintiff must show “purposeful discrimination.” Ferrill v. Parker Group, Inc., 168 F.3d 468, 472 (11th Cir. 1999). To establish purposeful discrimination under § 1981 and § 1982 a plaintiff must show that, under similar circumstances, the defendant treated a white individual differently than it treated him. See Humphries v. CBOCS West, Inc., 474 F.3d 387, 404 (7th Cir. 2007), aff’d on other grounds, 128 S.Ct. 1951 (2008) (§ 1981); Burke-Fowler v. Orange County, Fla., 447 F.3d 1319, 1324-26 (11th Cir. 2006) (§ 1981); Lawrence v. Courtyards at Deerwood Ass’n, Inc., 318 F. Supp.2d 1133, 1148 (S.D. Fla. 2004) [17 Fla. L. Weekly Fed. D870a] (§ 1982). Intentional discrimination may be proven through (1) direct evidence, (2) circumstantial evidence, or (3) statistical proof. Rioux v. City of Atlanta, 520 F.3d 1269, 1274 (11th Cir. 2008) [21 Fla. L. Weekly Fed. C485a].

The court has thoroughly reviewed the record in this case for any evidence of purposeful racial discrimination on the part of any defendant in this case. There is none. In fact, the record is crystal clear that as of July 2005, when the Roys’ plat application was approved, nothing the County or the individual defendants had done interfered with, hampered, impeded, or delayed the Roys’ ability to develop and market their property to whomever they wished. Furthermore, subsequent to July 2005 the only thing the Roys were prevented from constructing was the front privacy wall, a prohibition which did not implicate a civil right, much less the violation of a civil right. Moreover, there is nothing in the record to suggest that issuance of the May 11, 2005, stop-work order and removal of the plat application from the May 2005 BOA agenda was racially motivated. The Roys have not shown that, under circumstances similar to those alleged in this case, the County treated a white developer differently than it treated them, i.e., the Roys have come forward with nothing that shows a white developer who built in the scenic corridor setback zone received more favorable treatment by the County than did the Roys. Here, there is absolutely no credible comparator evidence.21

Even if the plaintiffs were not required to come forward with evidence of a white comparator on their § 1981 and § 1982 claims, they have failed to rebut the defendants’ articulated non-discriminatory reason for issuing the stop-work orders and removing their plat from the May 24, 2005, meeting agenda.22 More specifically, the Roys’ construction of the front privacy wall violated the specific setback and vegetation protection requirements of the Land Development Code. Plaintiffs’ fanciful arguments notwithstanding, the front privacy wall construction unquestionably violated these requirements.23 Nonetheless, even if Webb, Goldberg, and the County were incorrect in their determination that the wall violated the buffer and vegetation requirements their error does not equate to intentional discrimination. Cf. E&T Realty v. Strickland, 830 F.2d 1107, 1114 (11th Cir. 1987) (“[m]ere error or mistake” or “[e]ven arbitrary administration” of a statute does not amount to intentional discrimination). There is simply not one shred of evidence of pretext on the record before the court. Indeed, the Roys have come forward with absolutely no credible direct or circumstantial evidence, or statistical proof, of any intentional discrimination whatsoever. Rioux, 520 F.3d at 1274. The Roys’ claims pursuant to § 1981 and § 1982 therefore are completely without merit.

Likewise, there is no proof of a conspiracy in this case. Section 1985 protects only “the right to be free from being a victim of independent illegality,” but the Roys cannot show that defendants are liable under § 1981 or § 1982 and there can be no conspiracy without an underlying illegal act. See Poirier v. Hodges, 445 F.Supp. 838, 845 (M.D. Fla. 1978). Moreover, § 1985 requires proof of a conspiracy, or agreement, between the defendants. Dickerson v. Alachua County Comm’n, 200 F.3d 761, 767 (11th Cir. 2000). The Roys have presented no credible factual evidence of an agreement, only allegations which are insufficient to rebut the defendants’ denials.24 Thus the Roys’ § 1985 claim also is without merit.25

For all of the foregoing reasons, plaintiffs’ claims pursuant to 42 U.S.C. §1981, §1982, and §1985(3) fail. Defendants’ motions for summary judgment on Counts III, IV, and VI are therefore granted, and plaintiffs’ cross-motion is denied.

Count VII: Fair Housing Act Violations with Disparate Impact

Count VII of the third amended complaint alleges that each defendant is liable for violating the Roys’ rights under the Fair Housing Act (“FHA”), 42 U.S.C. §§ 3601 et seq. The court previously dismissed some of the Roys’ FHA claims, leaving only their claim under § 3604(a), which makes it unlawful “[t]o . . . make unavailable or deny[ ] a dwelling to any person because of race . . . or national origin.” The court permitted the Roys’ § 3604(a) claim to go forward on a theory of disparate impact only.

The Roys fail to specifically identify any facially neutral policy of the defendants in support of their FHA disparate impact claim, a necessary element of any FHA disparate impact prima facie case. Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926, 934 (2d Cir. 1988) (stating that a disparate impact claim is a challenge to a facially neutral policy that “actually or predictably results in . . . discrimination” against an identifiable group.). There can be no discriminatory impact of a facially neutral policy to consider if none is alleged. The closest the Roys come to identifying any facially neutral policy of the defendants is by referring to their having made “the decision,” without identifying what is meant by “the decision” or who made “the decision”; nothing in Count VII identifies anything more than “Defendants’ actions” as the object of the Roys’ FHA challenge. Thus, summary judgment in defendants’ favor on Count VII is appropriate.

The court notes that even if the analysis of the FHA claim proceeded in the absence of any identified policy, the Roys’ FHA claim would still be subject to summary judgment. This is so because the Roys have failed in their effort to show, by statistical proof, that the defendants’ actions had a disparate impact on blacks in Walton County.26 Viewing the record in the light most favorable to the Roys, as it must, the court finds that in presenting their case, specifically their statistical case, the Roys have failed to satisfy their burden of coming forward with some evidence to show there is a genuine issue of material fact as to any disparate impact upon blacks as a group. See Tsombanidis v. W. Haven Fire Dep’t, 352 F.3d 565, 574-78 (2d Cir. 2003) (failure to establish statistical case or any qualitative comparison between populations insufficient to show FHA violation); United States v. Nichols, 512 F.3d 789, 795 (6th Cir. 2008) (“bald accusations and irrelevant generalized statistics do not even come close to constituting” a prima facie case of equal protection violation).

Remaining for disposition are the defendants’ motions for leave to amend to amend their answers to include an affirmative defense under the Noerr-Pennington doctrine.27 In light of the court’s determination that defendants’ motions for summary judgment should be granted and plaintiffs’ cross-motion for partial summary judgment should be denied, the motions are denied as moot.

In closing, the court feels compelled to make the following comments on the course of litigation and conduct of this case, which has now been pending on the court’s docket for over three years. In fairness, the court acknowledges that some of the delay can be attributed to its heavy docket. Nevertheless, the court is also persuaded that counsel for plaintiff persisted in pursuing untenable legal theories and arguments based on unsupported facts long after it should have been apparent to him that any reasonable basis for proceeding with this case did not exist. This unfortunate conduct by plaintiffs’ counsel resulted in the waste of scarce judicial resources, as well as the defendants’ resources.

Accordingly, it is ORDERED:

1. Defendants’ motions for summary judgment (docs. 250, 251, 252, and 254) are GRANTED.

2. Plaintiffs’ motion for partial summary judgment (doc. 259) is DENIED.

3. Defendants’ motions for leave to amend their answers (docs. 294, 297, and 299) are DENIED as moot.

4. The clerk is directed to enter judgment in favor of all defendants and to close this case.

__________________

1Since the filing of plaintiffs’ third amended complaint, Rosier “Ro” Cuchens has been replaced on the Walton County Board of County Commissioners by Sara Commander. Pursuant to the court’s order of November 9, 2007, Commissioner Commander was substituted for Commissioner Cuchens. Additionally attorney Kenneth Goldberg (“Goldberg”) was originally named as a defendant in this case but on March 14, 2007, plaintiffs voluntarily dismissed their claims against him.

2On cross-motions for summary judgment, the court must construe facts and draw inferences “in favor of the party against whom the motion under consideration is made.” Samuelson v. LaPorte Cmty. Sch. Corp., 526 F.3d 1046, 1051 (7th Cir. 2008) (internal quotation marks omitted). The court does so here in setting out the facts that follow in this Background section, taking those facts from the pleadings, the discovery and disclosure materials, and the affidavits presented as part of the summary judgment record. Fed.R.Civ.P. 56(c); N.D.Fla.Loc.R. 56.1. Nevertheless, the court observes that what are stated as “facts” herein for purposes of summary judgment review may not be the actual facts. See Montount v. Carr, 114 F.3d 181, 182 (11th Cir. 1997).

3Defendants Vogel and Nelson are married and own property adjoining Roy’s property. Vogel is also a member of the Walton County Board of Adjustment (“BOA”).

4Defendant Webb is a resident of Walton County and a licensed general contractor. He owns property adjoining Chateaux de Paris in an adjacent subdivision.

The Roys allege that prior to October 6, 2004, Webb took a number of actions to hinder development, including making numerous complaints to the County about Roy’s activities, confronting the Roys’ engineer and contractor, and harassing Roy by telephone. The Roys allege that these actions were all taken after Webb learned that Roy intended to market properties in his development to successful black professionals.

It is undisputed that Webb and Roy had a falling out; both parties describe a heated conversation between Webb and the Roys’ agent over a sewer line in August 2004, in which each claims to have been physically threatened by the other. Roy claims he never spoke to Webb after October 4, 2004, and he concedes that W ebb’s complaints to the County between October 2004 and May 2005 were disregarded by the County. Roy theorizes, however, that once “Mr. Webb hooked up with the other defendants through the agency of [Webb's attorney Kenneth Goldberg],” all defendants acted in concert to stall the development of Roy’s property. (Doc. 286, at 3-4.)

5The retaining wall referenced here is not the front privacy wall discussed infra. The front privacy wall is at the center of the parties’ dispute.

6There is also no mention of an October 2004 stop-work order in Roy’s statement of facts or his opposition to defendants’ statements of facts. (Docs. 261, 288).

7Defendant Pat Blackshear (“Blackshear”) was the Director of the Planning Division during the relevant time period.

8Roy’s notice stated that he was relying on assurances from Jim Harmon and Bill Bearden of the County’s development inspection department that Roy could fence or wall his property up to the property line and replace any disturbed vegetation after construction. Although the County concedes these representations were made to Roy, it maintains the representations were incorrect insofar as they related to the front privacy wall.

9According to the Roys, Webb engaged Goldberg to represent him in his opposition to the Roys’ project. The Roys assert that while all defendants sought to block his project, Goldberg was the “hinge” in a conspiracy between the defendants to further their common, racially-motivated objective to stop the development altogether. According to the Roys, Nelson and Vogel were secret clients of Goldberg and through relationships he maintained with various County staff, Goldberg was able to accomplish more than any of the defendants could on their own as far as hindering the Roys’ development efforts.

10The following day, May 12, 2005, Goldberg memorialized Webb’s complaints in a letter e-mailed to the County at Blackshear’s request. According to Goldberg and Webb, the Roys violated the zoning codes by building a wall; building in the setback zone; removing native vegetation; constructing cement columns; failing to comply with the drainage plan; and constructing a structure (i.e., the wall) wider than 65% of the linear frontage. The only complaints relevant to this case are those related to the front privacy wall, namely, the setback violation and the removal of native vegetation.

11The Roys dispute that the property lies in the Route 30A scenic corridor and thus argue that the buffer restrictions do not apply. Although the Roys recognize that the purpose of the corridor, according to the Land Development Code, “shall be to preserve and maximize views of the Gulf of Mexico, to enhance the visual characteristics of the roadway corridor, and to eliminate roadside clutter” (see Walton County Land Development Code § 13.02.00.A), they take the position that the property is excluded from the corridor restrictions because Chateaux de Paris is on the north side of the highway and the Gulf of Mexico lies entirely to the south. The court rejects this interpretation of the Land Development Code. As the County correctly notes, the Roys’ argument flies in the face of language from the very next code section which provides that “[a]ll properties that are located contiguous to County Road 30A” are part of the corridor. See id. at § 13.02.00.B. Whether on the north side or south side of the road, the Roys’ property is clearly part of the 30A corridor. The court further notes that the Roys have never presented this argument to any County or state governmental or judicial body.

Plaintiffs repeatedly argue that the County’s interpretation of its Land Development Code is erroneous and suggest that this somehow serves as evidence of racial animus in this case. First, as the County points out, some of the code interpretations the Roys now challenge as erroneous unambiguously appear on the face of the development order Roy sought and signed — most notably the designation of the property as being located within the Route 30A scenic corridor and subject to certain setbacks. Additionally, it is undisputed that the Roys never appealed any contrary interpretations or adverse decisions of which they now complain to any appropriate County or State body. The evidence shows the decisions of County staff, if incorrect, could have been appealed to the Board of County Commissioners or challenged before the Walton County Circuit Court. Moreover, even if the County’s interpretation of the code were deemed arbitrary and capricious for due process purposes, a finding not made here, in the absence of evidence of racial animus the County’s actions would not rise to the level of a cognizable federal civil rights claim. In this case, as discussed infra, there is absolutely no evidence in the record suggesting racial animus in connection with any of the County’s code interpretations.

12The County cites certain sections of the Land Development Code that explain why no further action can be taken when a stop-work order is pending at a development project. The County cites no support, however, for Blackshear’s decision to proceed with plat approval in disregard of these prohibitory code sections. Although Blackshear’s decision appears to have been procedurally irregular, the court notes that it operated only to the Roys’ advantage, not their disadvantage. This evidence of Blackshear’s conduct therefore does not aid the Roys; rather the contrary is true: it tends to show the lack of any discriminatory animus on Blackshear’s part.

13This was Vogel’s first meeting as a member of the BOA. He recused himself on the matter of the Roys’ variance.

14The parties agree this motion was initially filed on September 20, 2005, and amended on September 22, 2005, prior to the BOA meeting that day. Roy claims he did not receive this motion until the meeting.

15The Roys originally contended that the appeal was untimely, that Roy was not given notice of the appeal, and that no appeal was ever filed. The argument that the appeal was untimely relied on the fact that Goldberg’s December 19, 2005, e-mail was sent more than thirty days after the estoppel letter was issued. The Roys also complained that the County improperly considered this e-mail only after Goldberg had made an oral request for an extension of time, for which there is apparently no provision in the County’s zoning codes. Webb responded that the December 19, 2005, e-mail was sent within thirty days of his receipt of notice of the estoppel letter.

None of these arguments are relevant in light of the fact that Goldberg sent the first e-mail on November 28, 2005, which was within the thirty day period. As to whether Roy received notice of the appeal, the record does not clearly show whether Roy had the opportunity to contest the appeal, but in light of the County’s determination that it was simply without authority to issue the estoppel letter, the court finds there was nothing for Roy to contest.

16The order stated in full: “All work within the native vegetation preservation zone and the Route 30A scenic corridor setback must cease immediately.”

17The Roys’ attempt to rely on the estoppel letter to terminate all stop-work orders when they knew the County had later issued a stop-work order (i.e., in December 2005, one month after the November 2005 estoppel letter) was disingenuous.

18The difference between an amended notice of violation and a stop-work order is not clear to the court. Both appear to have the effect of ordering a halt to specific construction activities, but the notice of violation also gives the property owner a set number of days for compliance, with the risk of a daily monetary penalty of up to $500 for failing to comply. There is no evidence the County ever enforced the monetary penalty against the Roys.

19Roy did not expect to see anyone other than County staff at the meeting, particularly Nelson and Goldberg, because he believed the matter was private. Roy insists that Nelson and Goldberg’s attendance at the meeting is further evidence of the conspiracy against him. In response, Nelson maintains she heard of the meeting only because she happened to be meeting with Blackshear about an unrelated matter immediately before the meeting. Defendants claim Goldberg found out about the meeting “accidentally,” by proposing to meet with Blackshear at the same time on another matter, and learning from Blackshear’s assistant that Blackshear would be busy due to the meeting with the Roys; Goldberg then asked Blackshear if he could attend.

20The Roys incorrectly assert that Count III remains viable against the County. As noted in the court’s November 9, 2007, order on the motions to dismiss, the court previously dismissed this count against the County with prejudice. See doc. 51 at 25 and doc. 156 at 14, n.30.

21To satisfy their burden of introducing a comparator, the Roys might have produced evidence of a white developer who sought and received a variance of the type denied to them, evidence of a white developer who was permitted to build in the scenic corridor setback zone despite arguable code violations, or other plausible evidence of disparate treatment, but they did not. In fact, they have identified no other property owner or developer for comparison at all.

22To show intentional discrimination through circumstantial evidence, the Roys may use the familiar burden-shifting framework established by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973). EEOC v. Joe’s Stone Crab, Inc., 220 F.3d 1263, 1272-73 (11th Cir. 2000) (per curiam). Under this framework, a plaintiff must first present sufficient evidence to establish a prima facie case of intentional discrimination. McDonnell Douglas Corp., 411 U.S. at 802, 93 S.Ct. at 1824. If a prima facie case is established, the burden then shifts to the defendant to articulate a legitimate, nondiscriminatory reason for its actions. Id. If the defendant does so, the burden shifts back to the plaintiff to show that the reason was merely pretextual. Id., 411 U.S. at 804.

23According to the Roys, there are multiple“prima facie cases” under which intentional discrimination may be established. Some of the Roys’ theories are not applicable — for example, disparate impact does not prove an intentional discrimination claim under §§ 1981, 1982, or 1985 — and others are puzzling to the court, such as the Roys’ distinction between “denial of benefit” and “imposition of penalty” outcomes or their complaint that defendants have proven no “violation of rule.”

Additionally, the Roys argue at length about procedural irregularities in the County’s processes. In fact the court initially had concerns about some of these irregularities; however, on review of the record it is obvious that any such procedural irregularities operated only to the Roys’ benefit.

24The Roys’ conspiracy allegations are based on the following. When Goldberg was a defendant in this case he submitted an affidavit in which he denied representing “any other party” than Webb. The Roys insist this contradicts a statement contained in a truncated, 10-second video clip purportedly showing Goldberg at the September 22, 2005, BOA meeting. In the video, an unidentifiable man is filmed from behind saying, “My name is Ken Goldberg, I represent several homeowners in Tranquility Shores and Gulf Vista, which are the neighboring subdivisions to this particular project — .” The Roys insists Goldberg must have been referring to Nelson and Vogel because they live in Gulf Vista; thus, at oral argument, Roy’s counsel claimed that Goldberg must have been “lying” either in the affidavit or at the BOA meeting. Second, Roy asserts there is evidence of a conspiracy because Goldberg and Nelson both attended this meeting, where they sat together, and they also attended the February 2, 2006, final meeting at the County’s offices.

The court cannot consider the video clip purportedly depicting Goldberg; it is inadmissible because there is no testimony in the record to authenticate it and it is not self-authenticating. Fed.R.Evid. 901, 902. Even if the evidence were admissible, however, the court finds it is utterly insufficient to give rise to an inference that Goldberg lied, thus casting doubt on his credibility. Goldberg’s “several homeowners” could have been any number of people other than Nelson and Vogel. Moreover, in his affidavit Goldberg avers that in connection with this matter he represented no party other than Webb. There is simply no contradiction, as the Roys claim, between Goldberg’s denial that he represented any other party in this lawsuit and any statement that he represents several other homeowners. Additionally, there is nothing nefarious in Nelson and Goldberg’s appearance at the BOA meeting; Roy himself sent the notice of the meeting to Nelson and Webb, Goldberg’s client, because they were nearby landowners affected by Roy’s variance petition.

The court simply cannot credit the implication that two private citizens, each with a longstanding interest in land use issues, must have engaged in a conspiracy because they both attended a public meeting on land use. As to Nelson and Goldberg’s attendance at the February 2, 2006, meeting Blackshear arranged, the court finds these individuals have offered justifiable explanations for their attendance which Roy has not rebutted, as is his burden. While their attendance may not have been expected or invited by Roy, that does not translate into evidence of a conspiracy to deprive the Roys of their constitutional rights.

25Given that plaintiffs have failed to establish a constitutional violation, the court agrees with Blackshear that she is entitled to qualified immunity in connection with the constitutional claims against her. See Hope v. Pelzer, 536 U.S. 730, 122 S.Ct. 2508, 2513, 153 L.Ed.2d 666 (2002) [15 Fla. L. Weekly Fed. S511a] (citing Saucier v. Katz, 533 U.S. 194, 201, 121 S.Ct. 2151, 150 L.Ed.2d 272 (2001) [14 Fla. L. Weekly Fed. S361a].

26The Roys make a highly confusing and convoluted statistical argument, which the court briefly summarizes as follows. Route 30A runs through two census block groups numbers which are subdivisions of another, larger census tract. The Roys’ property is located in only one of the block groups, but the Roys combine the two block groups together for analytical purposes. According to the Roys, the proportion of stop-work orders issued along Route 30A should mirror the population of their selected area. Because the ratio of whites to blacks in that area is 94.0% to 0.4%, they claim there should be 235 times as many stop-work orders issued to whites as to blacks, or 460. No stop-work orders, however, were issued to anyone on Route 30A from January 2005 to February 2008, other than to the Roys. The Roys argue this is “sufficiently glaring” proof of discriminatory intent and impact.

The Roys’ argument fails on factual, logical, and legal grounds. First, it lacks valid data. The record in fact reflects that twelve stop-work orders were issued to properties along Route 30A during 2004-2006, ten of which were issued during the time period selected by the Roys. These stop-work orders are indistinguishable from those issued to the Roys. Moreover, the Roys’ analysis is invalid because relies solely on stop-work orders issued along Route 30A only. It is possible that hundreds of stop-work orders were issued to white property owners who resided within the selected block groups but not on Route 30A.

Additionally, the Roys’ argument makes the unexplained, unwarranted assumption that the stop-work orders should be issued at a rate mirroring the general population. Without explaining why population is a proper proxy for development projects, the Roys’ argument lacks any foundation. Hallmark Developers, 466 F.3d at 1286 (holding “statistics based on the general population [should] bear a proven relationship to the actual applicant flow”). The Roys’ statistical theory also disregards other, legitimate explanations for the apparent “disparity” in number of stop-work orders issued, such as that properties under active development are cited more frequently than properties whose development is already complete. See Balderston v. Fairbanks Morse Engine Div. of Coltec Indus., 328 F.3d 309, 319 (7th Cir. 2003)(noting the Supreme Court has instructed courts to “examin[e] all of the surrounding facts and circumstances which create the statistics themselves”).

The Roys also make legally insufficient allegations of disparate impact without offering any evidence showing that blacks as a group will be affected. Schwarz v. City of Treasure Island, 544 F.3d 1201, 1218 (11th Cir. 2008) [21 Fla. L. Weekly Fed. C1154a] (“simply showing that a few houses are affected by an ordinance does not come close to establishing disparate impact”). Additionally, the Roys must show — but have failed to do so other than by speculation — the race of those who would have occupied the housing were it not for the challenged action. Hallmark, 466 F.3d at 1286. Finally, the Roys’ analysis also requires the court to consider numbers so small as to be statistically insignificant. The Roys’ approach requires extrapolating, from very small figures, the implication of unlawful discrimination and discriminatory impact. Such an extrapolation simply cannot be supported by this record. See Smith v. Xerox Corp., 196 F.3d 358, 369 (2d Cir. 1999), overruled on other grounds by Meacham v. Knolls Atomic Power Lab., 461 F.3d 134 (2d Cir. 2006) (noting that “[i]n any large population a subset can be chosen that will make it appear as though the complained of practice produced a disparate impact”).

27See Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965), and Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961).

* * *

Share

USA v BORNSCHEUER. Case Nos. 06-14607 & 07-10009. March 31, 2009

Tuesday, March 31st, 2009

Appeals from the U.S. District Court for the Southern District of Florida (No. 06-60023-CR-WPD).

(Before TJOFLAT, MARCUS and WILSON, Circuit Judges.)

(TJOFLAT, Circuit Judge.) This case involves prosecutions under the Hobbs Act, 18 U.S.C. § 1951, for extortion, and under the Travel Act, 18 U.S.C. § 1952(a)(3), for traveling from Germany to the United States to carry out the extortion. A jury convicted the defendants as charged. One of them, Alexander Bornscheuer, now appeals, challenging the district court’s Hobbs Act instruction to the jury, some of the court’s evidentiary rulings, and the denial of his motion for a new trial. We affirm.

I.
At the time of the events that gave rise to this criminal prosecution, Claus Fessler, a German citizen residing in Parkland, Florida, was an entrepreneur who owned and managed “Police Today,” a very successful magazine publishing firm based in Germany. In the early 1990s, Alexander Bornscheuer, a German citizen residing in Deerfield Beach, Florida, who was self-described as coming from a wealthy family, astute in business and finance, and an “international playboy,” became interested in acquiring Police Today, and purchased the company from Fessler for $1 million. Because Bornscheuer failed to prove himself as an astute businessman, and Fessler wanted the firm’s history of success to continue, Fessler repurchased the company from Bornscheuer for $1.5 million. In the meantime, Fessler started a new publishing company, which he incorporated in Florida, called International Publishing Consultants (IPC). The new firm also met with success. In the mid-1990s, Bornscheuer, along with his associate Reinhard Berkau,1 purchased Fessler’s interest in IPC for $1 million. Subsequently, Bornscheuer and Berkau purchased the remaining interests in IPC for $4.85 million.

Although Bornscheuer portrayed himself as an independently wealthy businessman, he did not personally have the funds to acquire IPC. Instead, he and Berkau raised money from outside sources, including family, friends, and other investors. Among those Bornscheuer successfully courted was Eberhard Wahl, who loaned Bornscheuer $850,000 to assist Bornscheuer in acquiring various assets, including IPC. To hold and distribute the monies he received from outside sources, Bornscheuer established an offshore bank in Naru, a small island nation located in the Micronesian South Pacific. Bornscheuer named the bank the “Bank of Newport.”

Sometime in 2003, Fessler again formed a Florida corporation called Broward Investors Group (BIG). Fessler funded the company with $1.2 million. Bornscheuer approached Fessler and sought to acquire Fessler’s interest in BIG. Fessler agreed to sell his interest to Bornscheuer for $1.2 million. Because Bornscheuer lacked the funds to pay the purchase price up front, Fessler and Bornscheuer agreed that Bornscheuer would pay $360,000 at closing,2 and he would pay $595,000 of the remaining $840,000 by giving Fessler’s wife, Susanne, a note and mortgage on his Deerfield Beach residence. The parties would treat the $245,000 balance as an unsecured debt.3 These business dealings began to sour in 2003 and 2004, when Bornscheuer and Berkau’s investors began to demand payment of their loans. At the end of 2004, Bornscheuer and Berkau demanded that Fessler agree to rescind their purchases of IPC (i.e., Fessler’s interest) and BIG. They also demanded that he have Susanne cancel the $595,000 mortgage she held on Bornscheuer’s residence. When Fessler refused, Berkau said, “You don’t understand, Fessler, that my investors are dangerous people. They are of the criminal element. They are the kinds of people who will resort to anything in order to get their money back.”

The parties attempted to negotiate a settlement, but were unable to reach an agreement. As a result, Bornscheuer sued Fessler in Broward County, Florida,4 and Berkau sued Fessler for fraud in Germany.5 Berkau prevailed in the fraud case, obtaining a judgment from the trial court on December 13, 2005.6 Following the entry of that judgment, Bornscheuer and Berkau, who were in Germany during much of December 2005, asked Fessler to go to the office of the McRae Law Firm7 in Delray Beach, Florida, on December 19, 2005, to participate in a conference call with them. Bornscheuer told Fessler that the reason for having to participate in the call from the law firm’s office was to ensure “a certain degree of privacy and confidentiality” and to prevent him from recording the conversation.8 The purpose of the call, Bornscheuer said, was to discuss the steps the parties might take in response to the German court’s judgment.

The conference call took place as scheduled.9 During the call, Bornscheuer and Berkau repeated the demand for recision that they had made twelve months earlier. They said that, unless he complied with their demand, they would (1) continue pressing their lawsuits in the Broward County Circuit Court and in Germany; (2) have the German authorities bring criminal charges against him for fraud; and (3) report him, his wife, and his three children to the federal immigration authorities for violating the conditions of their visas, which could result in their deportation. Bornscheuer and Berkau also reminded Fessler that their investors were dangerous people and that if he did not meet their demand, they could not guarantee his or his family’s safety.

Bornscheuer returned to the United States sometime around Christmas of 2005, and, on December 28, he had Fessler meet him at his Deerfield Beach home. There, Bornscheuer repeated his and Berkau’s threats of continuing litigation, criminal actions, and deportation. Bornscheuer also mentioned that one of his investors, Eberhard Wahl, was a dangerous underworld figure who would do whatever was necessary to recover his money. Bornscheuer related that Wahl knew where Fessler and his family lived10 and that he was struggling to hold Wahl at bay pending Fessler’s compliance with his and Berkau’s demand. Bornscheuer stated that Fessler had to comply by mid-January; otherwise, he and his family would be at grave risk. Bornscheuer noted that Fessler’s compliance would include the cancellation of the $360,000 he still owed for the purchase of BIG; the release of the $595,000 mortgage Susanne held on his residence; and a payment of $1 million in U.S. currency.

Fearing that he and his family were in grave danger, Fessler immediately contacted the FBI. After he met with Special Agents William Schureck and Donald VanHoose, the FBI began investigating Bornscheuer and his associates. The FBI instructed Fessler to record all future conversations with Bornscheuer, and Berkau, and to agree to any demands they made.

Fessler spoke with Bornscheuer by telephone on January 2, 2006, and they scheduled a meeting for January 14, 2006, at which Fessler would close the rescission of the IPC and BIG transactions in accordance with Bornscheuer and Berkau’s demand. The following parties were to attend the meeting: Bornscheuer, Berkau, Claus and Susanne Fessler, and Claus’s attorney in Germany, Hartmut Mertin. Following their telephone conversation, Bornscheuer sent Fessler a fax, which memorialized the terms of the closing. The fax stated:

There is agreement [sic] that the conversation that will take place on January 14th should not end in a Turkish bazaar. In other words, the settlement amount we are striving for in the amount of one million U.S. dollars is not subject of the negotiations [sic]. Rather, the subject of the negotiations is the how, that is, how the non-cash portion of the settlement amount could be provided.

The fax further listed several points of agreement, including: (1) Susanne Fessler’s cancellation of the $595,000 mortgage; (2) Fessler’s liquidation of the companies which he owned;11 (3) the dismissal of lawsuits pending in the Broward County Circuit Court and in Germany; and (4) the disassociation of the parties “from all possible future adverse actions.”

On January 4, Fessler and Bornscheuer again met at Bornscheuer’s home, this time to discuss the contents of the fax. As the FBI instructed, Fessler recorded the conversation. The two men went over the terms of the settlement and discussed a criminal complaint that had been filed against Fessler in Germany. Fessler asked what Bornscheuer meant by the words “possible future adverse actions.” Bornscheuer responded,

that is naturally expressed obscurely, with all intentions very obscure. You know very well that I can’t write something here, in black and white, something that could possibly be laid out as coercion. That’s clear, you know very well what is meant with that. What is meant is that you don’t do anything that could harm us, and that we neither go after your [U.S. immigration] visa, nor conduct criminal proceedings.

Fessler and Bornscheuer also talked about Wahl. Bornscheuer reminded Fessler of Wahl’s background and went into some detail about the violent methods Wahl used to collect rent from deadbeat tenants in Germany. Fessler asked Bornscheuer whether any harm would come to him or his family, and Bornscheuer replied that he and Fessler were both chess players and that Fessler knew that he could not answer that question.

On January 6, Bornscheuer telephoned Fessler. Fessler tape-recorded the call. Bornscheuer told him that they had to close by the end of the month; otherwise, it would be “total war” and Bornscheuer could not “stop anything.” On January 9, Bornscheuer called Fessler again. As recorded, Bornscheuer told Fessler that he had spoken with Wahl and Wahl had agreed that he would “ne’er darken Fessler’s door” in exchange for $500,000.

On January 14, the parties — Bornscheuer, Berkau, the Fesslers, and Mertin — met, as scheduled, at Bornscheuer’s house.12 They discussed the terms of the fax Bornscheuer had sent Fessler, and Bornscheuer reiterated that the terms were non-negotiable. Berkau also advised Fessler that, if the parties failed to reach a settlement, Fessler would be subject to criminal action. Mertin urged Fessler to reject the settlement proposal. However, in accordance with the FBI’s instructions to agree to any demands made on him, Fessler rejected Mertin’s counsel. He then asked Mertin to leave the meeting and to wait outside in the car.

After Mertin left, Berkau reminded Fessler that dangerous people were putting pressure on him for payment and that he was doing all he could to restrain them from harming the Fesslers. Bornscheuer also suggested that Fessler use an office building he owned as collateral for the settlement amounts.13 The office building was estimated to be worth $2 million. Also, as for Wahl, Bornscheuer would pay Wahl $500,000 from the $1 million Fessler had agreed to pay Bornscheuer and Berkau. Bornscheuer assured the Fesslers that this would keep Wahl from doing anything to harm them or their children.

Wanting to hear direct assurances from Wahl, Fessler asked Bornscheuer to place a telephone call to Wahl. Bornscheuer agreed and called Wahl. He used a speaker phone so the Fesslers could speak directly to Wahl. Wahl assured the Fesslers that, if they settled, they would have nothing to fear. Fessler asked Wahl whether his family would be harmed if he did not settle; Wahl’s answer was that he believed a settlement would be reached. Bornscheuer interjected that what Wahl might do if Fessler refused to settle could not be discussed over the telephone.

Later in the day, Bornscheuer emailed Steve Goerke, an attorney with the McRae Law Firm, the terms of the verbal agreement the parties had reached at the meeting. The terms were as follows: (1) Susanne would release the $595,000 mortgage she held on Bornscheuer’s home; (2) all legal actions would be dismissed, and there would be no future legal actions between the parties; (3) Fessler would transfer ownership of the office building he owned to Bornscheuer, with Bornscheuer assuming the existing mortgage of approximately $1,165,000; (4) the note reflecting Bornscheuer’s $360,000 debt to BIG would be cancelled; (5) neither Bornscheuer nor Fessler would seek attorney’s fees in the litigation pending in the Broward County Circuit Court; and (6) Fessler would pay Berkau between $400,000 and $520,000 in cash.14

II.
On January 26, 2006, a Southern District of Florida grand jury handed down a four-count indictment against Bornscheuer, Berkau, and Wahl. Count 1 charged them with conspiring from December 2005 through January 14, 2006, in violation of 18 U.S.C. § 371,15 to extort money and the forgiveness of debts from Claus and Susanne Fessler, in violation of the Hobbs Act, 18 U.S.C. § 1951,16 and to travel in foreign commerce with intent to commit such extortion, in violation of the Travel Act, 18 U.S.C. § 1952(a)(3).17 Count 2 charged the defendants with extortion, in that they obtained or attempted to obtain property of the Fesslers, with their consent,

induced by the wrongful use of actual and threatened force, violence and fear, in that defendants did threaten to harm [Claus Fessler], [Susanne Fessler] and their children and take other action if the defendants did not receive monies and the forgiveness of debts from [Claus Fessler], and [Susanne Fessler].

Count 3 charged Bornscheuer, and Count 4 charged Berkau, with traveling in foreign commerce to commit extortion. The defendants pled not guilty and stood trial together.

The trial began on April 3, 2006. The Government’s case in chief established the facts we have set out in part I, supra. The defendants called only one witness in their defense, Mitchell McRae, who had previously represented Berkau in a lawsuit and was acting as counsel for Bornscheuer in the cases he had brought against Fessler in the Broward County Circuit Court. He did not hear any of the conversations that Bornscheuer and Berkau had with Fessler, so his testimony did not touch on any of the conduct that gave rise to the defendants’ indictment.

At the close of the evidence, the defendants moved for judgment of acquittal. The district court denied their motion and then conferred with counsel about the jury instructions. The court informed counsel that it planned to give the Eleventh Circuit’s Pattern Jury Instruction on the Hobbs Act, which is as follows:

Title 18, United States Code, Section 1951(a), makes it a Federal crime or offense for anyone to extort something from someone else and in doing so to obstruct, delay or affect commerce or the movement of articles in commerce. The Defendant can be found guilty of that offense only if all of the following facts are proved beyond a reasonable doubt:

First: That the Defendant induced the person described in the indictment to part with property;

Second: That the Defendant did so knowingly and willfully by means of “extortion,” as hereafter defined; and

Third: That the extortionate transaction delayed, interrupted or affected commerce.

The term “property” includes not only money and other tangible things of value, but also includes any intangible right considered as a source or element of income or wealth.

Extortion means to obtain property from someone else with that person’s consent, but whose consent is brought about or induced by the wrongful use of actual or threatened force, violence or fear.

The term “fear” means a state of anxious concern, alarm or apprehension of harm, and it includes fear of economic loss as well as fear of physical violence.

Eleventh Circuit Pattern Jury Instructions (Criminal) 66.1 (2003) (emphasis added).

Bornscheuer and Berkau objected to the two parts of the instruction we have underscored. Their first objection was to the definition of extortion. Although the word “or” appears between “violence” and “fear” in the statutory definition of “extortion,” Count 2 of the indictment uses the word “and” instead of “or.” They therefore asked the court to insert “and” for “or” in its proposed instruction. The district court summarily overruled the objection. The second objection addressed the inclusion of “fear of economic loss” in the definition of “fear.” Bornscheuer and Berkau argued that the phrase “fear of economic loss” should be omitted because the Government, in its opening statement to the jury, took the position that the extortion in this case was based on the Fesslers’ fear of physical violence, not a fear of economic loss.18 The court overruled the defendants’ second objection on the ground that the evidence was sufficient for the jury to find that the Fesslers feared economic loss as well as physical violence. The court therefore included the pattern instruction in its charge to the jury.

On April 21, the jury returned its verdicts, finding the defendants guilty on all counts. Post-verdict, the defendants renewed their motions for judgment of acquittal and, alternatively, moved the court for a new trial.19 The court denied their motions and thereafter sentenced Bornscheuer and Berkau to prison terms of thirty-seven months and Wahl to a prison term of thirty months. Bornscheuer now appeals.20

Bornscheuer’s appeal challenges the district court’s refusal to delete from the jury instruction on the elements of the Hobbs Act the words “fear of economic loss,”21 evidentiary rulings the court made during the trial, and the court’s refusal to grant a new trial. We consider these challenges in order.

III.

A.
The Hobbs Act offense contains two elements: (1) extortion, and (2) interference with interstate commerce. See Stirone v. United States, 361 U.S. 212, 218, 80 S. Ct. 270, 274, 4 L. Ed. 2d 252 (1960); United States v. Kaplan, 171 F.3d 1351, 1354 (11th Cir. 1999). A constituent sub-element of “extortion” is the victim’s fearful state of mind. United States v. Grassi, 783 F.2d 1572, 1578 (11th Cir. 1986). In Grassi, we defined “extortion” as obtaining “property from someone else with his consent, but whose consent is brought about or induced by the wrongful use of actual or threatened force, violence, or fear.” In doing so, the Grassi court necessarily adopted the following definition of “fear”: “ ‘[F]ear’ means a state of anxious concern, alarm or apprehension of harm, and it includes fear of economic loss as well as fear of physical violence.” Id. at 1577 (emphasis added);22 see United States v. Vallejo, 297 F.3d 1154, 1165 (11th Cir. 2002) [15 Fla. L. Weekly Fed. C813a]; accord United States v. Sopher, 362 F.2d 523, 527 (7th Cir.), cert. denied, 385 U.S. 928, 87 S. Ct. 286, 17 L. Ed. 2d 210 (1966); Bianchi v. United States, 219 F.2d 182, 189 (8th Cir.), cert. denied, 349 U.S. 915, 75 S. Ct. 604, 99 L. Ed. 1249 (1955). The jury instruction the district court gave recited these Grassi definitions verbatim.23 Putting aside the fact that Grassi bound the district court to include the “fear of economic loss” wording in its Hobbs Act instruction — because the evidence clearly supported a finding that the Fesslers were threatened with economic loss as well as physical violence — Bornscheuer’s argument that the wording does not square with a principled reading of the Hobbs Act rings hollow.

Bornscheuer contends that the meaning of the term “fear,” as used in the indictment, must be drawn from its neighboring words — in the statutory interpretation context, we refer to this as noscitur a sociis. According to Bornscheuer, “fear” must be defined, in accordance with the words used in the indictment, as “a state of anxious concern, alarm or apprehension of harm . . . of actual and threatened force [and] violence.” Any instruction defining “fear” otherwise, he continues, necessarily amends the indictment. We note, however, that an equally applicable canon of construction exists, namely that all words in a text must be given independent meaning. Cf. United States v. Menasche, 348 U.S. 528, 538-39, 75 S. Ct. 513, 520, 99 L. Ed. 615 (1955) (“The cardinal principle of statutory construction is to save and not to destroy. It is our duty to give effect, if possible, to every clause and word of a statute.” (internal quotation marks and citations omitted)); Davis v. Chevy Chase Fin., Ltd., 667 F.2d 160, 170 (D.C. Cir. 1981) (applying the contract law credo that “every word in an agreement should be given meaning”). Under this maxim, if we defined “fear” narrowly as merely pertaining to “actual and threatened force [and] violence,” we would strip the term of its independent meaning as assigned by this court in Grassi.

Endeavoring to give effect to each term of the indictment, we read Count 2 of the indictment as charging Bornscheuer with illegally obtaining or attempting to obtain property with the consent of the victims “induced by the wrongful use of actual and threatened force, violence and fear.” “Fear,” as defined in Grassi, means “a state of anxious concern, alarm or apprehension of harm and it includes fear of economic loss as well as fear of physical violence.” Grassi, 783 F.2d at 1577. Therefore, the indictment charged Bornscheuer with extortion under theories of physical violence and economic loss. We find further support for this reading in the next clause of Count 2, which states that Bornscheuer and his codefendants “did threaten to harm [Claus and Susanne Fessler] and their children and take other action” if their demands were not met. We read “take other action” as including the commission of acts calculated to cause economic loss. Such a reading of the indictment mirrors the instruction given to the jury — which was consistent with Grassi — and leads us to the conclusion that the court did not err in giving the pattern jury instruction verbatim.

B.
Bornscheuer argues, as he did during the charge conference the district court held prior to counsel’s closing arguments, that the court should have excluded the “fear of economic loss” wording from its Hobbs Act instruction because the prosecutor, in his opening statement to the jury at the beginning of the trial, told the jury that the defendants conspired to obtain the Fesslers’ property by threatening the Fesslers with physical violence, but not economic loss. In other words, despite the fact that the evidence showed that the defendants’ threats, if carried to fruition, would have resulted in economic loss — the expense the Fesslers would necessarily incur in defending criminal and civil lawsuits and undergoing a possible deportation proceeding — the court should have bound the United States to the representation the prosecutor happened to make in his opening statement to the jury. Bornscheuer cites no precedent in support of this argument, and we are aware of none.24 His argument therefore fails.

IV.
Bornscheuer argues that the district court violated his rights under the Confrontation Clause of the Sixth Amendment by admitting as evidence, through the testimony of Susanne Fessler, statements Claus Fessler made to her describing the threats Bornscheuer had made.25 His argument is meritless. Although his brief contains broad assertions about the Government’s use of out-of-court statements that came in through Susanne Fessler’s testimony, the brief fails to cite any statement that came in over a hearsay objection. Perhaps such failure is due to the fact that the majority of the out-of-court statements Susanne Fessler recited were elicited by Bornscheuer’s attorney during cross-examination. Bornscheuer cannot complain here about testimony he elicited. Ford v. Garcia, 289 F.3d 1283, 1293-94 (11th Cir. 2002) [15 Fla. L. Weekly Fed. C510a]; see also United States v. Martinez, 604 F.2d 361, 366 (5th Cir. 1979) (“The accepted rule is that where the injection of allegedly inadmissible evidence is attributable to the action of the defense, its introduction does not constitute reversible error.”).26

Bornscheuer’s brief cites out-of-court statements other witnesses repeated over a hearsay objection. Most of these statements were either not hearsay or fell within a hearsay exception. For example, during the prosecutor’s direct examination of Susanne Fessler, the court overruled Bornscheuer’s hearsay objection to the following question:

Q. Had [Berkau] told you what types of clients he represented?

A. He told me — he told us about from [sic] the Hell’s Angels at one point, that he did represent them.

The district court did not abuse its discretion in admitting the testimony, as such a statement is admissible under Federal Rule of Evidence 801(d)(2)(E) as a statement of a co-conspirator made in furtherance of a conspiracy. See Lucas v. W.W. Grainger, Inc., 257 F.3d 1249, 1256 (11th Cir. 2001) [14 Fla. L. Weekly Fed. C991a] (stating that we may affirm the district court’s judgment on any ground that finds support in the record). Furthermore, the answer the question called for was relevant, because the jury could reasonably infer from Berkau’s answer, which revealed Berkau’s association with a group of people notorious for using violence, that it intimidated Susanne Fessler.27 In sum, we find nothing in the record to support Bornscheuer’s abuseof-discretion challenges to the district court’s evidentiary rulings.

V.
Federal Rule of Criminal Procedure 33 provides the district court with discretion to grant a defendant a new trial on the basis of newly discovered evidence “if the interest of justice so requires.” Bornscheuer argues that the district court abused this discretion when it refused to grant his motion for a new trial after reviewing the new evidence he had presented — namely, a German appellate court’s opinion affirming a judgment Berkau had obtained against Fessler and the Broward County Circuit Court’s order denying Fessler’s motions for summary judgment in consolidated cases pending in that court. To obtain a new trial based on newly discovered evidence, the “movant must demonstrate that the evidence was discovered after trial, that due diligence was shown, and that the evidence was neither cumulative nor impeaching but actually material and likely to produce a new result.” United States v. Fernandez, 136 F.3d 1434, 1438 (11th Cir. 1998) (quotation and citation omitted). Bornscheuer contends that these rulings are relevant to the issue of his state of mind, and thus his intent, during the time he allegedly conspired to commit the Hobbs Act offense. The district court disagreed, concluding the obvious: Bornscheuer could not have been thinking about court rulings that had not yet issued. We likewise disagree. The district court acted well within its discretion in denying Bornscheuer a new trial.

VI.
We find no basis in Bornscheuer’s arguments for reversing or vacating the district court’s judgment and remanding the case for a new trial. The court’s judgment is, accordingly,

AFFIRMED.

__________________

1Berkau was an attorney in Germany who, at the time of the events at issue here, specialized in debt collection.

2The transaction closed without Bornscheuer paying the $360,000.

3The record does not indicate whether Bornscheuer gave Fessler an unsecured note for $245,000 or an IOU.

4Bornscheuer filed, in his name or that of the interested party, three separate lawsuits against Fessler in the Broward County Circuit Court sometime in early 2005. These lawsuits, collectively, sought the following: (1) payment of a past-due loan Bank of Newport had made to Fessler; (2) cancellation of the $360,000 debt Bornscheuer owed Fessler in connection with his purchase of BIG; and (3) cancellation of the mortgage Susanne Fessler held on Bornscheuer’s residence.

5It appears from the record that the dispute in that case arose, in part, after Bornscheuer and Berkau discovered that Fessler had made misrepresentations concerning Fessler’s ownership of a licensing claim that Fessler sold to Berkau in 2000. It turned out that Police Today owned the claim, not Fessler; hence, Berkau acquired nothing in exchange for the money he paid Fessler.

6The judgment ordered Fessler to pay Berkau as follows: “US$310,000 plus interests [sic] in an amount of US$213,667.74 as well as additional interests [sic] in an amount of 5 percentage points above the basic interest rate on US$523,677.74 since June 1, 2005.”

7The McRae Law Firm represented Bornscheuer in the Broward County Circuit Court.

8Bornscheuer made certain that an employee of the law firm would be present during the call to ensure that Fessler did not record it.

9A law firm employee sat with Fessler during the phone call and ensured that he did not record the conversation. The conversation lasted approximately 20 minutes. The employee did not speak German and thus did not understand what was said.

10Bornscheuer told Fessler that Wahl had driven past Fessler’s house.

11The record does not identify the companies that would be affected by this agreement.

12Claus Fessler came to the meeting armed with a tape recorder.

13The tape recording of the meeting does not indicate whether Fessler was to use the building as collateral for a bank loan or to secure a note he would give Bornscheuer and Berkau. Because Fessler deeded the building to Bornscheuer, our inference is that the building was not used as collateral.

14This is the first indication in the record that Fessler would make such a payment. Nothing in the record indicates who would fix the precise amount of the payment.

15Section 371 of Title 18 reads:

If two or more persons conspire . . . to commit any offense against the United States . . . and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than 5 years, or both.

16The Hobbs Act reads in relevant part:

(a) Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be fined under this title or imprisoned not more than twenty years, or both.

(b) As used in this section —

(1) The term “robbery” means the unlawful taking or obtaining of personal property from the person or in the presence of another, against his will, by means of actual or threatened force, or violence, or fear of injury, immediate or future, to his person or property, or property in his custody or possession, or the person or property of a relative or member of his family or of anyone in his company at the time of the taking or obtaining.

(2) The term “extortion” means 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.

(3) The term “commerce” means commerce within the District of Columbia, or any Territory or Possession of the United States; all commerce between any point in a State, Territory, Possession, or the District of Columbia and any point outside thereof; all commerce between points within the same State through any place outside such State; and all other commerce over which the United States has jurisdiction.

18 U.S.C. § 1951.

17The Travel Act reads in relevant part:

(a) Whoever travels in . . . foreign commerce . . . with intent to —

. . . .

(3) . . . promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity, and thereafter performs or attempts to perform —

(A) an act described in paragraph . . . (3) shall be fined under this title, imprisoned not more than 5 years, or both[.]

(b) . . . ‘unlawful activity’ means . . . (2) extortion . . . in violation of the laws of the State in which they are committed or of the United States. . . .

18 U.S.C. § 1952.

18The defendants argued that if the court’s Hobbs Act instruction included the “fear of economic loss” language, the court would be amending the indictment in contravention of the Fifth Amendment, which states that “[n]o person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury. . . .” U.S. Const. amend V. Bornscheuer repeats this Fifth Amendment argument in his brief. Because it is clear that he was not convicted of a crime not alleged in the indictment in this case, we confine our discussion to the question of whether the district court erred in instructing the jury as it did and we do not refer to the Fifth Amendment prohibition against convicting an accused for a crime not presented in the indictment.

19The defendants moved for a new trial based on newly discovered evidence, which included the opinion of a German appellate court affirming the trial court’s judgment against Fessler and an order of the Broward County Circuit Court denying Fessler’s motions for summary judgment in three pending cases. The court denied the motions because these rulings occurred subsequent to the defendants’ commission of the charged offenses and, thus, could not have had a bearing on the defendants’ intent at that time. As for the other newly discovered evidence, the court found that it was merely cumulative or impeaching and, as such, would not have affected the outcomes of the trial.

20Berkau did not appeal. Wahl filed a notice of appeal but abandoned it. On September 27, 2006, we dismissed Wahl’s appeal on his motion.

21Bornscheuer’s argument that the court erred in including the “fear of economic loss” wording in its Hobbs Act instruction applies to the Count 1 charge of conspiracy to violate the Hobbs Act as well as the Count 2 charge of a substantive Hobbs Act offense.

22In Grassi, two businessmen, Wilson and Williams, set up an illegal tax shelter in the Bahamas. The two became entangled with two men who purportedly had ties to the Mafia: Santerelli and Grassi. Santerelli and Grassi became angry when Wilson and Williams left them out of a major deal, and they physically assaulted them and made various thinly-veiled threats to induce them to turn over one-third of any profit made as a result of the venture. See Grassi, 783 F.2d at 1573-74. Although the evidence presented at trial strictly supported a conviction for extortion based on the use of fear of physical violence, we quoted and adopted the district court’s use of the following definition of “fear” in its charge to the jury: “ ‘Fear’ means a state of anxious concern, alarm or apprehension of harm, and it includes fear of economic loss as well as fear of physical violence.” Id. at 1577.

23The evidence fully supported the district court’s inclusion of the “fear of economic loss” wording in its Hobbs Act instruction; although the threats made to the Fesslers were directed principally to their persons, the threats involved financial consequences as well.

24Bornscheuer’s argument suggests, in part, that the district court effectively amended the indictment — in violation of his Fifth Amendment right to be held to answer only on indictment by a grand jury — by authorizing the jury to find against the defendants on a theory the Government had eschewed in opening statement. Bornscheuer cites no authority, and we are aware of none, for the proposition that an indictment must be narrowed to conform to the prosecutor’s opening statement to the jury at the commencement of a trial.

25We review a district court’s evidentiary rulings for abuse of discretion. Old Chief v. United States, 519 U.S. 172, 174 n.1, 117 S. Ct. 644, 647 n. 1, 136 L. Ed. 2d 574 (1997); United States v. Abel, 469 U.S. 45, 54-55, 105 S. Ct. 465, 470-71, 83 L. Ed. 2d 450 (1984). “An abuse of discretion arises when the district court’s decision rests upon a clearly erroneous finding of fact, an errant conclusion of law or an improper application of law to fact.” United States v. Frazier, 387 F.3d 1244, 1276 n.12 (11th Cir. 2004) (en banc) (Tjoflat, J., specially concurring) (quotations and citations omitted).

26In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this Court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to close of business on September 30, 1981.

27Also, the statement was not offered for the truth of the matter asserted. It was offered to demonstrate the affect it had on Susanne. See Fed. R. Evid. 801(c).

* * *

Share