Hobbs Act

THE HOBBS ACT IS a federal anti-racketeering law that makes it a crime to interfere with interstate commerce by extortion, robbery, or physical violence as in 18 U.S.C.A section 1951. Passed into law in 1946, the Hobbs Act was designed to battle organized crime, particularly to combat racketeering in labor-management disputes. The statute is frequently used in connection with cases involving public corruption, commercial disputes, and corruption directed at members of labor unions. Extant proof of racketeering as an element of a Hobbs Act offense is not required

The Act proscribes a number of separate offenses: 1) robbery, 2) extortion, 3) attempted robbery or extortion; and 4) conspiracy to commit robbery or extortion. Each such offense also requires the federal jurisdictional element of obstruction, delay, or effect on interstate commerce. Primary investigative jurisdiction of Hobbs Act violations lies with the Federal Bureau of Investigation. The Inspector General's Office of Investigations, Division of Labor Racketeering, U.S. States Department of Labor, is also authorized to investigate violations of the act in labor-management disputes involving the extortion of property from employers.

The policy (9-131.040) regarding the robbery section of the Hobbs Act explicitly states that it is “only to be utilized in instances involving organized crime, gang activity, or wide-ranging schemes.” The term extortion is defined as 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.” Importantly, “fear” as defined in the act is not restricted to bodily injury. Rather, it includes fear of property damage and of economic loss resulting from failure to meet the extortive demand. Thus, situations involving labor relations where union representatives threaten to initiate labor trouble or continue labor unrest unless certain payments are made for the representatives' personal use are violations of the Hobbs Act. Similarly, payments made by employers because they fear financial loss if work stoppages or strikes begin or continue, are violations of the Hobbs Act.

The latter category in the definition of extortion, “under color of official right,” generally concerns a public official trading her official actions in an area in which she has authority in exchange for the payment of money. For instance, such practices might involve municipal officials demanding money from contractors in return for official city approval of projects. The Supreme Court recently held that the “government need only show that a public official has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts.”

A Hobbs Act application can involve a firm that is substantially involved in interstate commerce and meets extortion demands, thus depleting the firm's assets. Courts have ruled this depletion of assets is an obstruction, delay, or effect upon interstate commerce as contemplated by the prohibitions of the Hobbs Act.

For example, a stereotypical organized crime case involving the extortion of a local bar owner was deemed a violation of the Hobbs Act because[Page 400] the extortion had the effect of diminishing the owner's ability to purchase for resale liquor originating in interstate commerce.

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