81 F.4th 171
2d Cir.2023Background
- Michael Avenatti agreed to represent Gary Franklin (Cal Supreme) over alleged Nike misconduct; Franklin gave Avenatti confidential documents and sought reinstatement/sponsorship and discipline of Nike employees.
- In March 2019 Avenatti pressed Nike in meetings and calls: he demanded $1.5M for Franklin plus a separate $15–25M retainer (or a $22.5M package) for himself, threatened a press conference/New York Times disclosures, and conditioned settlement on Nike’s payment to him.
- Nike’s outside counsel (Boies Schiller) and in-house counsel recorded meetings and contacted prosecutors; Avenatti was arrested March 25, 2019. Recordings were admitted at trial.
- A jury convicted Avenatti of transmitting extortionate communications (18 U.S.C. § 875(d)), attempted Hobbs Act extortion (18 U.S.C. § 1951), and honest‑services wire fraud (18 U.S.C. §§ 1343, 1346); he was sentenced to concurrent prison terms (up to 30 months) and later ordered to pay $259,800.50 restitution to Nike under the MVRA.
- On appeal Avenatti challenged (1) sufficiency of evidence for each count, (2) the district court’s refusal to give his proposed honest‑services jury instructions about attorney authority and settlement, and (3) the legality/timeliness/applicability of the restitution award.
Issues
| Issue | Plaintiff's Argument (Gov't) | Defendant's Argument (Avenatti) | Held |
|---|---|---|---|
| Sufficiency of evidence for extortion (wrongfulness element) | Evidence showed Avenatti demanded millions unrelated to any plausible claim of right and threatened public disclosure — a wrongful extortionate threat. | His demands were tied to client Franklin’s objectives or to legitimate attorney fees/retainer; thus not wrongful extortion. | Affirmed: a reasonable jury could find no nexus between demands/threats and any claim of right — wrongfulness proven. |
| Sufficiency for honest‑services fraud (quid pro quo and intent) | Avenatti solicited a bribe (quid) — millions from Nike — and offered to breach his fiduciary duty (quo) by influencing Franklin to accept a settlement while concealing his own side deal; intent to defraud is shown. | Forbearance alone (not an affirmative act) cannot establish the required quid/quo; no proof he intended to corruptly influence Franklin. | Affirmed: evidence supported a quid‑pro‑quo (pay Avenatti in return for inducing client to settle) and intent to deprive Franklin of honest services. |
| Jury instruction on attorney authority / settlement | District court adequately instructed on attorney duties, loyalty, and that only client may accept settlement; it allowed defense theory to be argued. | Requested additional language that a lawyer has broad implied authority to take tactical measures and that only client can conclude settlements; omission prejudiced defense. | Affirmed: requested language was unnecessary; charge fairly presented law and defense theory; no prejudice. |
| Restitution: timeliness and MVRA victim/pecuniary‑loss issues | The court retained authority under Dolan to award restitution after 90 days; Nike suffered pecuniary loss (attorney fees for the March 19 meeting) directly from Avenatti’s conduct so MVRA applies. | The § 3664(d)(5) 90‑day deadline bars late restitution; attorneys’ fees here do not constitute the pecuniary loss required to invoke MVRA. | Affirmed: Dolan permits late awards; Avenatti showed no prejudice from delay; Nike incurred pecuniary loss pre‑investigation (Boies Schiller fees) so MVRA applies; award reduced to recoverable fees. |
Key Cases Cited
- United States v. Raniere, 55 F.4th 354 (2d Cir. 2022) (sufficiency review standards and deference to jury in drawing inferences)
- United States v. Jackson, 180 F.3d 55 (2d Cir. 1999) (Jackson I) (wrongfulness element: threat is wrongful when no plausible claim of right or no nexus to claim)
- United States v. Jackson, 196 F.3d 383 (2d Cir. 1999) (Jackson II) (harmless‑error rehearing clarifying nexus/plausibility inquiry for wrongfulness)
- Skilling v. United States, 561 U.S. 358 (2010) (limits honest‑services fraud to bribery or kickback schemes)
- Neder v. United States, 527 U.S. 1 (1999) (omission of an element is subject to harmless‑error analysis)
- Jackson v. Virginia, 443 U.S. 307 (1979) (standard for sufficiency of the evidence review)
- Dolan v. United States, 560 U.S. 605 (2010) (90‑day restitution deadline is not jurisdictional; court retains power to order restitution after deadline)
- Lagos v. United States, 138 S. Ct. 1684 (2018) (§3663A(b)(4) limits recoverable attorneys’ fees to those incurred in participation in government investigation/prosecution)
- United States v. Ng Lap Seng, 934 F.3d 110 (2d Cir. 2019) (bribery requires a quid‑pro‑quo; definition of corrupt intent)