The opinion of the court was delivered by: LEONARD B. SAND
Having previously determined that the four remaining defendants in this action -- Donald Carson, Anthony Gallagher, George Lachnicht, and Venero Mangano -- were liable to the government for violations of the civil RICO statute, 18 U.S.C. § 1962(c), the Court now turns to the remedy phase of this litigation. See United States v. Local 1804-1, Int'l Longshoremen's Ass'n, 812 F. Supp. 1303 (S.D.N.Y. 1983) (the "Liability Opinion"), modified, United States v. Local 1804-1, Int'l Longshoremen's Ass'n, 831 F. Supp. 167 (1993) (the "Rule 52(b) Opinion"). In Part I of this Opinion, the Court will consider whether further evidence should be received in connection with the remedy phase of this lawsuit. After concluding that there is no need to receive further evidence, the Court will address, in Part II, the remedy to which the government is entitled in light of this Court's liability findings. In Part II the Court will also address defendant Venero Mangano's request to exempt his attorney's fees from any remedy award ordered by this Court. See United States v. Local 1804-1, Int'l Longshoremen's Ass'n, 90 Civ. 963 (LBS), 1993 U.S. Dist. LEXIS 3354, 1993 WL 77319 at *8 n.1. (March 15, 1993) (the "Asset Restraint Opinion") (reserving decision on whether Mangano's attorney's fees should be exempted from Asset Restraining Order). Finally, in Part III, the Court will address defendant Anthony Gallagher's request to proceed with his appeal in forma pauperis.
THE APPROPRIATENESS OF FURTHER EVIDENTIARY PROCEEDINGS
The first issue this Court must address is whether the defendants should be permitted to submit further evidence in connection with the remedy phase of this action. By Order dated March 29, 1993, the parties were instructed to submit to the Court a list of the testimony and evidence they proposed to introduce, if the Court were to conduct further proceedings. In that Order the Court reminded the parties that "the only matter that would be at issue in such [further proceedings] would be the relief to which the government is entitled in light of this Court's liability findings."
In response, Donald Carson and Anthony Gallagher wrote letters to the Court listing those witnesses they would propose to call and documents they would seek to introduce during the remedy phase. We will briefly go through the requests. We conclude, however, that no further evidentiary proceedings are required at this time.
A. Carson's List of Proposed Witnesses
1. Carson proposes to call six witnesses -- including two former federal district judges and a former federal prosecutor -- and to introduce numerous documents to support his claim of entitlement to an "equitable offset of all losses proximately caused by the government's violations under the Fourth Amendment and/or Title III." Letter to the Court from Fredric J. Gross, Attorney for Donald Carson, dated April 6, 1993 ("Carson's Letter") at 2. Carson has previously calculated the value of such an offset at approximately one million dollars. See Brief for Donald Carson in Opposition to Freeze of Assets at 4. We conclude that Carson's claim of entitlement to an equitable offset is completely without merit, for many reasons, including sovereign immunity, statutory immunity, see 18 U.S.C. § 2520(d)(1) (good faith reliance on court warrant or order is a "complete defense" against any claim for damages for violation of wiretapping statute), and laches. Accordingly, Carson's request to offer evidence pertaining to these issues is denied.
2. Carson proposes to call three of the Assistant United States Attorneys assigned to this action to prove that the Government is "seeking recovery on behalf of others," which Carson contends violates Fed. R. Civ. P. 17(a) and Article III of the United States Constitution. Carson's Letter at 2. While disputing Carson's view of the law, the government concedes that it "seeks to restore ill-gotten gains to the defendants' victims and that a portion of the proceeds may be deposited into the United States Treasury." Letter to the Court from Claude Millman, Assistant United States Attorney, dated April 21, 1993 ("Govt. Letter") at 3. The government also concedes that it seeks to impose the costs of all court-appointed officers on the defendants. Id. The defendants have had notice that this was the government's intent from the outset of this litigation. See Amended Complaint at 123-24. Since the disagreement between Carson and the government involves a pure question of law, there is no need to receive any evidence pertaining to these issues.
Turning to the question of law, we conclude that Carson's argument that the government is attempting to assert the rights of third parties in violation of Fed. R. Civ. P. 17(a) and Article III of the United States Constitution must be rejected as meritless.
The mere fact that certain victims of the defendants' racketeering acts may receive partial restitution as a result of the government's prosecution of this case does not mean that the government has brought this suit on behalf of the victims. On the contrary, the government brought this action to vindicate its own interest in ensuring that the RICO statute is enforced. The Attorney General, who is empowered to bring actions on behalf of the United States, 28 U.S.C. § 516, is authorized to "institute proceedings under" the civil RICO statute. 18 U.S.C. § 1964(b). Carson's argument must be rejected as meritless.
3. Carson also proposes to call the Clerk of the United States District of New Jersey, presumably to authenticate various documents from the DiGilio criminal case, to support his claim that the government is barred from obtaining monetary relief by the Double Jeopardy Clause of the United States Constitution. Since these documents have already been admitted in evidence in this case, and since the government does not dispute their authenticity, see Govt. Letter at 4, Carson's request is denied. The Court also denies Carson's request to call three of the Assistant United States Attorneys assigned to this action in connection with his double jeopardy claim. The Court addresses Carson's double jeopardy argument in Part II.A.5 of this Opinion.
4. In this Court's Liability Opinion, we held that Carson violated the Taft-Hartley Act by accepting meals and entertainment from employers of ILA labor. See Liability Opinion, 812 F. Supp. at 1328. Since the government "is not seeking restitution with respect to the meals and entertainment," Govt. Letter at 4, there is no need to receive any further evidence with regard to Carson's claim that the receipt of these meals yielded no personal benefit to Carson.
5. Since the Court withdraw its finding that Carson embezzled expenses from Local 1588, see Rule 52(b) Opinion, slip op. at 16-17, there is not need to hear any further testimony with regard to Carson's expenses. Accordingly, Carson's request to offer evidence regarding whether the union local would have disapproved of Carson's expenses is denied as moot.
6. Carson asks to present evidence that he claims would demonstrate that Seal and saved money from the MOTBY mixed-labor contract. The government does not dispute that Sealand saved money when it moved its operations from Port Newark to MOTBY due to increased security and employee productivity. Govt. Letter at 5-6. However, the dispositive issue is not whether Sealand saved money after it moved to MOTBY; the dispositive issue is whether UTI billed Sealand at the higher longshoremen rate when it only provided Sealand with a mixed-labor force. Indeed, if the MOTBY participants had not defrauded Sealand by charging the higher ...