United States v. Daane , 475 F.3d 1114 ( 2007 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,  No. 05-50282
Plaintiff-Appellee, D.C. No.
v.  CR-01-01155-DDP-
WILLIAM DWIGHT DAANE, 02
Defendant-Appellant.

UNITED STATES OF AMERICA,  No. 05-50283
Plaintiff-Appellee, D.C. No.
v.  CR-01-01155-DDP-
TERE THOMPSON DAANE, 03
Defendant-Appellant.

UNITED STATES OF AMERICA,  No. 05-50295
Plaintiff-Appellee, D.C. No.
v.  CR-01-01155-DDP-
GLENN HURST TRENT, JR., 01
Defendant-Appellant.

UNITED STATES OF AMERICA,  No. 05-50309
Plaintiff-Appellee, D.C. No.
v.  CR-01-01155-DDP-
RICHARD ERIC MILLER, 06
Defendant-Appellant.

1195
1196 UNITED STATES v. DAANE
UNITED STATES OF AMERICA,  No. 05-50346
Plaintiff-Appellee, D.C. No.
v.  CR-01-01155-DDP-
JOHN WILLIAM ARN, aka John Arn, 04
Defendant-Appellant.
 OPINION
Appeal from the United States District Court
for the Central District of California
Dean D. Pregerson, District Judge, Presiding
Argued and Submitted
June 7, 2006—Pasadena, California
Filed February 1, 2007
Before: Dorothy W. Nelson, Johnnie B. Rawlinson, and
Carlos T. Bea, Circuit Judges.
Opinion by Judge Rawlinson
1198 UNITED STATES v. DAANE
COUNSEL
Donald W. MacPherson, Glendale, Arizona, for appellants
William and Tere Daane.
Jeff Price, Santa Monica, California, for appellant Glenn
Trent.
Stephen M. Lathrop, Rolling Hills Estates, California, for
appellant Richard Miller.
Karen L. Landau, Oakland, California, for appellant John
Arn.
Jerry A. Behnke, Assistant United States Attorney, Riverside,
California, for appellee United States.
OPINION
RAWLINSON, Circuit Judge:
Appellants William and Tere Daane (collectively the
Daanes), Glenn Trent (Trent), Richard Miller (Miller), and
John Arn (Arn) appeal their convictions for conspiracy and
attempted extortion. Because we conclude that the district
court committed no error when it rejected the appellants’
proffered “claim of right” instruction, we affirm the convic-
tions.1
I. Overview
Appellants were indicted for conspiracy and attempted
interference with commerce in violation of 18 U.S.C. § 1951
(the Hobbs Act), and traveling in interstate commerce for the
1
Appellants raised other issues, which are addressed in a memorandum
disposition filed contemporaneously with this opinion.
UNITED STATES v. DAANE 1199
purpose of extortion. The indictment alleged, inter alia, that
appellants traveled to Riverside, California from outside the
state in order to “assault, restrain and abduct Leslie Darwin
Murdock (Murdock) and force him to transfer money inter-
state from Murdock’s bank accounts to accounts controlled by
the defendants and others.” The indictment also alleged that
William Daane knowingly possessed a firearm in furtherance
of crimes of violence in violation of 18 U.S.C. § 924(c). At
the conclusion of appellants’ first trial, the district court
granted their motion for a new trial because of juror miscon-
duct.
One of the appellants’ co-defendants, Mark Stich (Stich),
pled guilty and testified at appellants’ second trial.
II. Background
A. The Ponzi Scheme and Recovery Efforts
Murdock pled guilty in a separate case to three counts of
mail fraud. Although Murdock guaranteed a five percent
weekly return to investors, his investment plan was in reality
a Ponzi scheme.2 Approximately 950 individuals invested in
Murdock’s business, including the appellants. The total loss
to these investors was approximately $20 to $40 million.
Murdock had his first personal meeting with the Daanes
and Miller in a hotel in Las Vegas. They discussed “opportu-
nities to continue [Murdock’s] program offshore.” A couple
of weeks after the Las Vegas meeting, Murdock met with
Tere Daane and Arn in Temecula, California, where they dis-
cussed expansion of the scheme.
Shortly thereafter, Murdock met with Stich. Stich “made a
2
A Ponzi scheme pays investors with money received from later partici-
pants.
1200 UNITED STATES v. DAANE
demand on his return of his principal.” Murdock finally
agreed in writing to repay Stich.
After the meeting with Stich, Murdock traveled to Las
Vegas to meet with the Daanes. Murdock met the Daanes and
Arn at a restaurant in the Orleans Casino. They had a cordial
conversation and the Daanes invited Murdock to their house
for further discussions. At the Daanes’ residence, the Daanes
and Arn presented Murdock with documents entitled “What
We Know” and “What We Can Do For Leslie D. Murdock.”
The “What We Know” document contained information
allegedly related to Murdock’s finances and Ponzi scheme.
For example, it stated that Murdock had an active accounts
investment total of $10,000,000; Murdock made 3,900 wire
transfers through seventeen banks; and Murdock was being
investigated by the FBI and Treasury Department for money
laundering and bad checks.
The “What We Can Do For Leslie D. Murdock” document
referred to the creation of an offshore business structure;
assistance in securing a second citizenship and passport for
Murdock; the ability to “make LDM [Murdock] an invisible
investor” and to “get LM [Murdock] of [sic] the federal
income tax system.”
During the discussions, Murdock, Tere Daane, and Arn
moved into the kitchen. When Miller and Trent entered the
kitchen, Trent moved toward Murdock and stated, “You don’t
know who I am, do you.” Trent surprised Murdock since nei-
ther Tere Daane nor Arn had told him that other people would
be joining them. Trent immediately demanded the return of
$75,000 from Murdock and threatened Murdock that they
“were going to the desert until [Trent] was satisfied.”
After Tere Daane and Arn intervened to keep the peace,
Murdock agreed to take Trent back to Riverside. Arn volun-
teered to go instead, and Murdock agreed to sign a promise
UNITED STATES v. DAANE 1201
to repay Trent $78,000. Arn was to stay with Murdock to
“provide upkeep and transfer particulars up to the payment of
said funds.” Arn was also supposed to work on obtaining
reimbursement for a list of individuals provided by Tere
Daane. The total amount of reimbursement to these individu-
als approximated one million dollars.
During their drive to California, Murdock and Arn con-
versed about the events at the Daanes’ residence. Arn told
Murdock that Arn was nervous because there was a gun in the
back of Trent’s shorts.
Murdock took Arn back to Las Vegas after approximately
two weeks in Riverside. Although Murdock assured Arn that
he was going to proceed with their plan to restructure the
investment program, Murdock later called Arn and informed
him that Murdock was going to declare bankruptcy.
B. The Trip To Pasadena
On September 20, 2001, Stich, the Daanes, Arn, Miller, and
Trent met in Trent’s hotel room. Trent stated that he did not
care “if they found Mr. Murdock buried in the sand.” They
discussed going to Pasadena the next day, and Trent sug-
gested that they “should take Murdock somewhere.” Trent
also mentioned, “Mr. Murdock’s a big man. I’m going to need
some help with him because of his size . . .” William Daane
and Miller agreed to help with Murdock, but Stich refused.
Arn stated that “he had an uncle that had a hotel in the desert
where Mr. Murdock could be taken.” Trent suggested that
they “band-tie” Murdock’s hands, “duct tape his feet, put him
in a car, and take him out to the desert.” Tere Daane also
stated that she had a fax machine and wiring instructions for
transferring funds to an international account. There was no
discussion of firearms at this meeting.
The following morning, Stich, Miller, Arn, Trent, and the
Daanes prepared to go to Pasadena. When Stich was placing
1202 UNITED STATES v. DAANE
his bags into William Daane’s Suzuki, he saw draw ties3 and
duct tape. Stich had also purchased two pairs of gloves and
duct tape. Stich rode with William Daane to Pasadena. Arn
and Tere Daane were in a white Cherokee, with Miller and
Trent in a blue Ford Taurus rental car. After locating Mur-
dock’s car in a Staples parking lot, William Daane told Stich
to place the ties and duct tape into Trent’s blue rental car.
After Stich spotted Murdock running down the street, Wil-
liam Daane used a two-way radio and stated, “The rabbit’s on
the run.” Tere Daane also had a two-way radio, and she
repeated that “[t]he rabbit is on the run.” William Daane then
moved his car to a parking lot where Tere Daane and Arn
were waiting in the white Cherokee. In the parking lot, Wil-
liam Daane retrieved a plastic box from the Cherokee’s cargo
area. William Daane returned to his car, placed the plastic box
on Stich’s lap, and confirmed that it contained a gun. After-
wards, William Daane and Stich drove to the Staples parking
lot. When they arrived, Stich saw Murdock get into his car.
Trent ran up to Murdock’s car and held the door open. As
Trent tried to pull Murdock from his car, a struggle ensued
and police officers were called.
Stich slid the box containing the gun underneath the driv-
er’s seat of the Suzuki. As Stich was walking away from the
incident, William Daane told him to “hide the gun,” but Stich
had already placed it underneath the seat. After they were
arrested, William Daane told Stich that “he was going to tell
the police that the guns were for a hunting trip.”
C. The Pasadena Investigation
Officer Howlett responded to the incident at the Staples
parking lot. Initially, Trent, Miller, and William Daane denied
that an altercation had occurred. They also denied having any
3
The terms “draw ties” and “flex ties” are used interchangeably in this
opinion to refer to plastic ties found at the scene of the altercation.
UNITED STATES v. DAANE 1203
of Murdock’s property. Officer Howlett asked three or four
times for them to return Murdock’s telephone and keys. After
being threatened with arrest for robbery, Trent and William
Daane returned the items to Murdock.
Miller permitted Officer Howlett to search the blue rental
car. She noticed a two-way radio on the center console; a pair
of gloves; a full roll of duct tape in the passenger’s seat; and
plastic flex ties on the passenger floorboard. Miller admitted
that he had used the two-way radio in the car “to communi-
cate with his friends.”
After Officer Howlett approached Tere Daane, who was in
the white Cherokee, Tere handed the officer “some papers
that had names and dollar amounts written on them.” The
documents were affidavits made out to Murdock and signed
by different individuals. Officer Howlett also observed a fax
machine in Tere Daane’s vehicle.
Officer Howlett retrieved an e-mail document from Tere
Daane providing information on how to transfer one million
dollars by wire.
Tere Daane told Officer Howlett, “she and the group of
people had invested money with [Murdock], and that he had
not been paying them, and he had been avoiding them, and
they had to hunt him down like a rabbit.”
Officer Alaniz also searched the white Jeep Cherokee, find-
ing a .50 caliber handgun, a smaller caliber handgun, a radio
battery charger, binoculars, a glass cutter, and clothing. The
smaller handgun was found inside of a backpack in a holster,
“with the lettering D-A-A-N-E written on it.”
When Officer Peinado arrived, he noticed an unoccupied
gray Suzuki with its headlights on and engine running. He
entered the Suzuki and turned the engine off. When he
searched the vehicle, he found a loaded .44 magnum handgun
1204 UNITED STATES v. DAANE
in a black, plastic container underneath the driver’s seat, and
“a 380 caliber semiautomatic pistol” in the Suzuki’s front
console. The latter firearm was in a holster inside of a plastic
bag.
In an interview with Officer Peinado, William Daane stated
that “he had no idea” why the .380 caliber firearm was on the
front console. He explained that the duct tape,4 flex ties, and
gloves in the car were for hunting, and that “he forgot he left
guns in the car . . . .”
During an interview with Special Agent Roberts of the FBI,
William Daane admitted that “he wanted to scare Les Mur-
dock.” William Daane also stated that, during the altercation,
he warned Murdock “to settle down or he would have to hurt
him.” Daane denied any knowledge of how the flex ties
“came to Pasadena.”
William Daane gave Agent Roberts two different explana-
tions for the presence of the firearms. He told Agent Roberts
that he had packed them for an upcoming hunting trip, but had
not packed any other supplies for the trip. He also told Agent
Roberts “that the firearms were in his car because he had been
busy and had forgotten to unpack his car because he had been
shooting either the weekend, or perhaps two weekends,
prior[.]”
Trent informed Agent Roberts that “he was the passenger
in the blue Ford Taurus . . . and he was watching Mr. Mur-
dock’s car — trying to spot Mr. Murdock come back to the
car.” Trent stated that he approached Murdock and “tried to
grab the phone out of Mr. Murdock’s hand because he did not
want Mr. Murdock to make a telephone call” and that he
“began pulling Murdock from the car.”
4
This duct tape was not the same as the tape Stich put in the rental car.
UNITED STATES v. DAANE 1205
With respect to the flex ties, Trent stated that he had seen
the flex ties in the back seat of the Ford Taurus, but “didn’t
know how they got there.” Trent also recounted that he
moved the flex ties “from the back seat area to the front seat
area so that if Mr. Murdock saw them he would not be
scared.”
Officer Finney searched a suitcase taken from the white
Cherokee. Inside the suitcase, she found checks payable to
Arn that were drawn on Murdock’s account. She also found
a passport in Arn’s name and a spreadsheet listing amounts
Murdock owed to numerous individuals, including appellants.
The total amount listed on the spreadsheet was $1,750,330.27.
D. Jury Verdicts
The Daanes, Arn and Trent were convicted of conspiracy
and attempted interference with commerce by threats and vio-
lence. Miller was convicted only on the conspiracy charge.
Appellants filed timely notices of appeal.
III. Standards of Review
“We review the district court’s determination that a factual
foundation does not exist to support a jury instruction pro-
posed by the defense for an abuse of discretion.” United
States v. Castellanos-Garcia, 270 F.3d 773, 775 (9th Cir.
2001) (citations omitted). “A court commits reversible error
when it fails to instruct the jury as to a defense theory if the
theory finds some basis in the record and is supported by
law.” United States v. Shortt Accountancy Corp., 785 F.2d
1448, 1455 (9th Cir. 1986) (citations omitted).
IV. Discussion
Relying on United States v. Enmons, 410 U.S. 396 (1973),
and Scheidler v. National Organization For Women, 537 U.S.
393 (2003), appellants argue that the district court erred when
1206 UNITED STATES v. DAANE
it rejected their proffered “claim of right” instruction. In par-
ticular, appellants assert that they had a rightful claim to the
funds in Murdock’s possession and therefore their actions
were not “wrongful” as required for extortion.
[1] However, neither Enmons nor Scheidler supports appel-
lants’ claim of right instruction. In Enmons, the Supreme
Court specifically addressed “whether the Hobbs Act pro-
scribes violence committed during a lawful strike for the pur-
pose of inducing an employer’s agreement to legitimate
collective-bargaining demands.” Enmons, 410 U.S. at 399.
The Supreme Court observed that “[t]he legislative frame-
work of the Hobbs Act . . . makes it clear that the Act does
not apply to the use of force to achieve legitimate labor ends.”
Id. at 401. However, “when the objectives of the picketing
changed from legitimate labor ends to personal payoffs, then
the actions became extortionate.” Id. at 406 n.16. Enmons,
with its specific focus on labor disputes, undermines appel-
lants’ contention that a similar claim of right defense was
applicable in their case. Tellingly, this court has previously
declined to extend Enmons beyond the context of a labor dis-
pute. See United States v. Thordarson, 646 F.2d 1323, 1326-
27 (9th Cir. 1981) (“There is no basis in the [Supreme]
Court’s decision or its underlying rationale for the creation of
an ‘Enmons doctrine’ of immunity applicable to all federal
criminal statutes. We read Enmons as holding only that the
use of violence to secure legitimate collective bargaining
objectives is beyond the reach of the Hobbs Act.”).
[2] Other circuits have reached the same conclusion. In
United States v. Zappola, 677 F.2d 264 (2d Cir. 1982), the
Second Circuit opined that a claim of right defense is unwar-
ranted in cases involving the use of force. The Second Circuit
distinguished Enmons as limited to cases involving legitimate
labor strikes. Id. at 269. The Second Circuit clarified that:
[B]y adopting the states’ statutory law of extortion,
Congress meant to punish as extortion any effort to
UNITED STATES v. DAANE 1207
obtain property by inherently wrongful means, such
as force or threats of force . . . , regardless of the
defendant’s claim of right to the property. . . . We
agree with the other circuits that have addressed this
issue that Enmons merely carved out a labor excep-
tion to the traditional law of extortion codified in the
Hobbs Act.
Id. at 268-69 (citations omitted).
[3] Similarly, the Seventh Circuit in United States v. Cas-
tor, 937 F.2d 293 (7th Cir. 1991), held that the district court
properly rejected the defendants’ proffered instruction
because, “[w]hatever the contours of [the claim of right]
defense may be, they do not reach extortions based on threats
of physical violence outside the labor context. [Y]ou cannot
beat someone up to collect a debt, even if you believe he owes
it to you.” Id. at 299 (citation omitted).
Additionally, those decisions establishing a claim of right
defense in cases involving threat of economic harm are inap-
posite. In United States v. Sturm, 870 F.2d 769 (1st Cir.
1989), the First Circuit held:
Although it may be appropriate not to recognize a
claim of right defense in extortion cases based on the
wrongful use of force or violence, different consider-
ations apply in the context of extortion based on eco-
nomic fear. Whereas the use of actual or threatened
force or violence to obtain property is inherently
wrongful, there is nothing inherently wrongful about
the use of economic fear to obtain property.
Id. at 772-73 (citations omitted). Because this case involves
the use of physical violence, not the threat of economic harm,
the rationale of Sturm does not apply.
Scheidler is similarly inapposite. In Scheidler, the Supreme
Court considered whether anti-abortion protesters, who
1208 UNITED STATES v. DAANE
obstructed access to abortion clinics, “committed extortion
within the meaning of the Hobbs Act.” Scheidler, 537 U.S. at
397, 399. In holding that the protesters did not commit extor-
tion, the Court focused on the fact that the protesters obtained
no property from those whose access to abortion clinics was
restricted. Id. at 397. In contrast, in this case, appellants
attempted to take money from Murdock.
The Supreme Court’s recent consideration of Scheidler in
no way strengthens appellants’ argument. In Scheidler v.
National Organization For Women, 126 S. Ct. 1264, 1270
(2006), the Supreme Court held that “physical violence unre-
lated to robbery or extortion falls outside the scope of the
Hobbs Act.” Id. “Congress did not intend to create a free-
standing physical violence offense in the Hobbs Act. It did
intend to forbid acts or threats of physical violence in further-
ance of a plan or purpose to engage in what the statute refers
to as robbery or extortion (and related attempts or conspira-
cies).” Id. at 1274.
[4] The record in this case undeniably reveals that appel-
lants used physical violence in their attempt to force Murdock
to transfer funds to them. Scheidler therefore does not fore-
close appellants’ conviction.
[5] Although Arn, Tere Daane, Trent, Stich, and Miller
invested only $375,062 with Murdock, they intended to force
Murdock to transfer over $1,700,000. At a minimum, appel-
lants failed to demonstrate that they had a legal right to funds
in excess of those invested. Accordingly, any “claim of right”
instruction was properly rejected by the district court.
V. Conclusion
The district court did not abuse its discretion in rejecting
appellants’ proffered “claim of right” instruction, because
such an instruction was not supported by the law or the facts.
AFFIRMED.