Theft by Extortion

Section 223.4 makes it theft to get another person's property by threat. A person is guilty if he purposely obtains property of another by threatening to do any one of the harms the section lists.¹ The offense therefore has two working parts: a purposeful obtaining of property, and a threat that falls within the list. The first part turns on the Code's definition of obtain, which means to bring about a transfer or purported transfer of a legal interest in the property, whether to the obtainer or to someone else.² That definition looks at what the actor causes, a change in who holds an interest, so the property need not end up in the actor's own hands, and a transfer that is only purported counts too. The word purposely supplies the mental element. The actor's aim must be to get the property by means of the threat, and a menace uttered in anger, with no design on the victim's property, does not satisfy it.

Before the Code, threats used to get property were prosecuted under two older labels. Common-law extortion was the corrupt collection of an unlawful fee by an officer under color of his office, and it was generally a misdemeanor. Statutory extortion, which includes blackmail, was the extraction of money or other value by a threat not sufficient for robbery, or a communication made for the purpose of such extraction, and it was usually a felony.³ Theft by extortion under § 223.4 covers what was formerly blackmail or extortion.⁴ It is broader than the officer-fee crime, because the person making the threat may be a private individual or an official, and one of the listed threats is itself a threat to take or withhold official action.⁵ An officer who demands payment as the price of acting is thus one more actor within the section, and no longer the only one.

The Code places extortion inside theft because the victim's transfer is as hollow as in fraud. A deceived owner hands over property because of a false belief, and a threatened owner hands it over because of fear, so in neither case has the owner made a free choice about the property. Treating extortion as one more way of misappropriating another's property also removes a charging problem that separate offenses created, since a demand that mixed lies with menace could produce a conviction under the wrong label that then failed on appeal.⁶ The list of threats then separates extortion from ordinary bargaining. People press their interests constantly, by threatening to take their business elsewhere or to quit a job, and the Code does not treat every such pressure as a crime. It names categories of threats that no one has a right to use as leverage for personal gain, so a demand is extortionate only when the threat falls within one of them.⁷

Robbery sits beside this offense without being part of it. Because robbery endangers the person as well as the property, the Code treats it as a morally worse crime than the offenses it gathers under theft, and § 221.1 makes it a separate offense rather than another form of theft.⁸ The older statutory definition of extortion drew the same boundary from the other side, describing extraction by a threat not sufficient for robbery.⁹ The threat of bodily injury in paragraph (1) lies near that boundary, so an answer that finds extortion should still notice when the facts also describe robbery, an offense with its own elements.

The paradigm case is a demand backed by a threat of crime. A defendant tells a store owner he will smash her windows unless she pays him $1,000 a month, and she pays, so he purposely obtained property by threatening to commit a criminal offense.¹⁰ The contrasting case lacks the obtaining. If a defendant threatens to beat a neighbor over loud music but obtains no property from him, there is no completed theft by extortion, because the threat neither produced a transfer nor aimed at one.¹¹

The fact that moved the answer is the transfer. The threat, the listed harm, and the man's purpose were the same in both versions, and only the first version ended with a legal interest changing hands. Students lose this issue when they treat a frightening threat that produces no transfer as completed theft, because the completed offense depends on the obtaining, however menacing the threat was.¹²

The sections below take the listed threats in the order the text gives them: bodily injury or crime, accusation of a crime, exposure of secrets, the remaining categories, and then the restitution defense that applies to some of them. Each of those sections plugs into the same frame, which is best run as a short sequence of questions.

Exam Analysis Steps

Because every form of the offense shares one structure and differs only in the threat, the common frame should be confirmed before the particular threat is analyzed. The steps are these:

Identify what the actor got, and confirm that a transfer or purported transfer of a legal interest in property was brought about, whether to the actor or to someone else.
Identify the threat the actor made, and match it to one of the harms listed in § 223.4 before asking anything further about it.
Ask whether the actor's aim was to obtain the property by means of that threat, since a threat made without that purpose does not satisfy the section.
If the threat falls within paragraph (2), (3), or (4), check whether the restitution defense applies, because the defense is limited to those paragraphs.
Check whether the facts also describe robbery, which the Code treats as a separate offense, so that the answer does not fold it into theft.

Threats of Injury or Crime

Paragraph (1) of § 223.4 opens the list of prohibited threats with the most direct form of coercion: a threat to inflict bodily injury on anyone or to commit any other criminal offense.¹⁴ The rest of the offense is already in place from the section's frame, which requires that the actor purposely obtain property of another by means of the threat, so this paragraph adds only the content of the threat. Two phrases carry that content. The word "anyone" fixes who may be the target of the harm, and the phrase "any other criminal offense" extends the category beyond physical violence to wrongdoing of every kind.¹⁵

The word "anyone" means that the person threatened and the person who pays need not be the same. An owner who hands over cash to keep a child from being hurt makes the same fear-driven transfer as an owner who pays to avoid being hurt personally, because fear for a loved one distorts the decision about the property just as strongly as fear for oneself. A rule that protected only threats aimed at the payer would invite an obvious workaround, which is to aim the menace at the payer's family, employees, or friends. The paragraph closes that gap by naming no particular victim of the threatened injury.¹⁶

The fact that moved the answer is the character of the thing threatened. In both versions someone applies pressure to get something, and the shopkeeper would rather give in than face the consequence. What differs is whether the actor was threatening something he has a right to do. A customer may lawfully take his trade elsewhere, so his offer to refrain is an ordinary bargaining position. No one has a right to injure a child or to commit a crime, so an offer to refrain from that conduct is a demand to be paid for stopping wrongdoing. Students lose this distinction when they treat hard bargaining as a threat of crime, because pressure that stays inside the actor's lawful rights never reaches the list in § 223.4.¹⁷

The second phrase applies the same logic beyond violence. A threat to burn a building, to destroy a competitor's property, or to commit a theft is a threat to commit a criminal offense, and the paragraph reaches it whether or not anyone would be physically hurt.¹⁸ The category is defined by the unlawfulness of the threatened act, which is why the text needs no catalogue of particular crimes.

Paragraph (1) also stands outside the restitution defense. That defense is confined to prosecutions based on paragraphs (2), (3), or (4), where the property obtained by threat of accusation, exposure, lawsuit, or other invocation of official action was honestly claimed as restitution or indemnification for harm done, or as compensation for property or lawful services.¹⁹ Those threats describe things an actor can often lawfully do, such as reporting a wrong or going to court, so an honest claim to repayment gives the actor a real reason to speak. Bodily injury and crime have no lawful version, and the text therefore gives the defense no foothold on a paragraph (1) charge.

Threats to Accuse

Paragraph (2) of § 223.4 makes it theft to obtain another's property by threatening to "accuse anyone of a criminal offense."²¹ The rest of the offense carries over from the section's frame. The actor must purposely obtain property of another, which means bringing about a transfer or purported transfer of a legal interest in it, and the threat must be the means of obtaining it.²² What this paragraph adds is the content of the threat, an accusation of crime. Because the text says "anyone," the person who would be accused need not be the person who pays, so a demand backed by a threat to accuse the payer, the payer's relative, or a third party falls within the paragraph.²³

This paragraph differs from paragraph (1) in a way that controls how it is analyzed. A threat to injure someone or to commit a crime describes conduct that no one may lawfully engage in. A threat to accuse describes something the actor may well have every right to do, because anyone may report a crime to the police. The Code nonetheless reaches the threat once it is joined to a demand for property, since the actor is then offering to withhold a report for a price.²⁴ The act threatened is lawful, but it has become leverage, and the leverage is what makes the obtaining extortionate.

The reason for treating that bargain as theft has two parts. The first concerns what is being sold. Criminal accusation is a public process that exists to answer wrongdoing, and a person who sells silence turns that process into a private source of income while the wrong goes unreported. The second part concerns the victim, who must choose between paying and facing an accusation. That choice is distorted whether or not the victim is guilty, because an innocent person may pay to avoid the cost and stigma of being accused, and a guilty person may pay to escape consequences the law means for that person to face. The paragraph asks only whether the actor threatened to accuse in order to obtain property, so neither the victim's guilt nor the truth of the accusation turns the demand into a legitimate one.²⁵

The fact that moved the answer is the link between the accusation and the property. In both versions the actor speaks of the same crime and proposes the same lawful act of reporting it. Only the first version attaches a price, and only the first ends with a transfer. The trap in this paragraph is treating the lawfulness of reporting as a reason the demand cannot be extortion, because the offense depends on what the actor demanded in exchange for refraining, and the legality of the threatened act does not answer that question.²⁶

Paragraph (2) is also one of the three paragraphs to which the restitution defense applies. The defense is an affirmative defense, meaning the actor must raise and support it even though the elements of the offense are met. It covers property obtained by threat of accusation that was honestly claimed as restitution or indemnification for harm done in the circumstances to which the accusation relates, or as compensation for property or lawful services.²⁷ The defense fits here because the person who was wronged has a real stake in both the accusation and the repayment, since both concern the same harm. A demand to be made whole for that harm resembles the settlement of a dispute far more than the sale of silence about someone else's wrongdoing. The claim has to be honest, and a restitution claim has to concern the harm the accusation addresses.

What separates the two demands is the actor's own stake in the harm. The woman and the passerby threatened the same lawful act and received the same sum, but only the woman can honestly describe the payment as repayment for a loss. The checklist below runs both the offense and the defense in the order a court would take them.

Exam Analysis Steps

Because the offense is complete before the defense is considered, the elements come first and the restitution question comes last. The steps are these:

Identify what the actor threatened to do, and confirm that it was to accuse someone, whether the payer or anyone else, of a criminal offense, without asking whether the accusation would be true.
Confirm that the actor made the threat in order to obtain property, and that a transfer or purported transfer of a legal interest in it followed.
Treat the lawfulness of reporting a crime as irrelevant once the report has been offered as the price of silence in exchange for property.
Ask whether the actor honestly claimed the property as restitution or indemnification for the harm the accusation concerns, or as compensation for property or lawful services, because paragraph (2) is covered by the defense.

Threats to Expose Secrets

Paragraph (3) of § 223.4 covers the conduct most people picture when they hear the word blackmail: obtaining another's property by threatening to "expose any secret tending to subject any person to hatred, contempt or ridicule, or to impair his credit or business repute."²⁹ The rest of the offense comes from the section's frame. The actor must purposely obtain the property by bringing about a transfer or purported transfer of a legal interest in it, and the threat must be the means of getting it.³⁰ What this paragraph supplies is the content of the threat, so the analysis becomes a question about the information: what is the secret, and what would exposing it tend to do to the person it concerns?

The mechanism resembles the one behind paragraph (2). Telling people something is usually lawful, and a person who threatens to do so has not yet threatened a crime. The Code reaches the threat because the actor attaches a price to silence, and the victim pays only because the harm that disclosure would cause looks larger than the sum demanded. Paragraph (3) differs from paragraph (2) in what is held over the victim. An accusation must concern a criminal offense, while paragraph (3) is satisfied by a secret that involves no crime at all, such as an affair or a hidden financial collapse, so long as exposure would damage the person's standing.³¹ The phrase "any person" also means the secret may concern someone other than the payer, so a threat to reveal a secret about the payer's child or business partner falls within the paragraph.³²

The text limits the paragraph to secrets of a particular kind, and the limit has two branches. The first is social: information that would tend to bring hatred, contempt, or ridicule on a person. The second is economic: information that would tend to impair a person's credit or business repute.³³ The limit follows from what the paragraph is meant to catch, which is leverage drawn from real fear of injury to reputation or finances. Without it, any demand paired with a promise to stay quiet about any fact would qualify, and the offense would sweep in disclosures that cost the victim nothing worth paying to avoid. Nobody is coerced by the prospect of a harmless disclosure, so the Code leaves such threats outside the paragraph.

Hypothetical Illustration

Marcus tells a coworker that he will inform their employer of the coworker's affair unless the coworker pays him $5,000, and the coworker pays. The affair is a secret that tends to bring contempt on the coworker and to damage standing at work, and Marcus obtained the money by threatening to expose it, so paragraph (3) is satisfied. The affair need not be a crime, and Marcus is free to tell the employer if he wishes, but the demand for payment turns that freedom into leverage.

Change one fact: Marcus tells the coworker that he will let people know the coworker prefers a particular brand of coffee unless the coworker pays him $50, and the coworker pays. The threat and the payment are the same, but a coffee preference is not a secret tending to cause hatred, contempt, or ridicule or to impair credit or repute, so paragraph (3) does not apply.

The fact that moved the answer is the damaging character of the secret. Both versions contain a threat to tell, a price for silence, and a payment, so none of those features separates them. The affair would tend to lower the coworker in the eyes of others and to endanger the job, while the coffee preference would do neither, and the paragraph recognizes only threats to expose information of the first kind.

The paragraph does not ask whether the secret is true, and true secrets are the typical case. Its test looks to what exposure would tend to do, so an actor gains nothing by proving that his information was accurate. Students lose this issue when they treat the truth of the secret as a reason the demand is legitimate, because the paragraph reaches the sale of silence, and a victim is pressured by the prospect of exposure whether or not the story is accurate.³⁴

Paragraph (3) is one of the three paragraphs to which the restitution defense applies. The defense is an affirmative defense: it is available when the actor honestly claimed the property as restitution or indemnification for harm done in the circumstances to which the exposure relates, or as compensation for property or lawful services.³⁵ The defense belongs here because a person who was wronged has a real stake in speaking about the matter, and a demand to be made whole resembles the settlement of a dispute more than the sale of silence about someone else's secret.

The checklist below runs the paragraph in the order a court would take it, with the screening of the secret as the step that does the distinctive work.

Exam Analysis Steps

Because the paragraph differs from the others only in the kind of threat, the shared elements are confirmed first and the nature of the secret second. The steps are these:

Confirm that the actor demanded property and that a transfer or purported transfer of a legal interest in it followed, with the threat as the means of obtaining it.
Identify the information the actor threatened to expose, and whether it concerns the payer or someone else.
Ask whether exposure of that information would tend to subject a person to hatred, contempt, or ridicule, or to impair credit or business repute, and treat harmless matters as outside the paragraph.
Disregard whether the information is true and whether it involves a crime, since neither question decides whether paragraph (3) applies.
Ask whether the actor honestly claimed the property as restitution or indemnification for the harm the exposure relates to, or as compensation for property or lawful services, because the affirmative defense covers this paragraph.

Other Prohibited Threats

The first three paragraphs of § 223.4 cover threats of crime, accusation, and exposure. The four that remain share a different feature: in each, the actor offers to sell something he has no right to sell, whether the power of a public office, the leverage of collective action, the content of testimony, or the capacity to harm someone for no gain of his own. Each paragraph supplies a different content for the threat, and the frame of the offense stays the same. The actor must purposely obtain the property, by bringing about a transfer or purported transfer of a legal interest in it, and the threat must be the means of getting it.³⁷

Paragraph (4) reaches threats to take or withhold action as an official, or to cause an official to take or withhold action.³⁸ It is the Code's version of what the common law called extortion, which was the corrupt collection of an unlawful fee by an officer under color of office and was ordinarily a misdemeanor.³⁹ The Code widens that older offense in two ways. The threatener need not hold office, because a private person who threatens to make an official act or hold back is within the text. And extortion is now one manner of committing the single offense of theft, so the grading rules for theft apply to it.⁴⁰ The reason for the paragraph follows from what official power is. An official holds it for the public, so pricing it converts a public duty into private income, and a person asked to pay cannot know whether refusing will cost a decision he is entitled to receive.

The withholding of action is present in both versions, and the demand for property is what separates them. Paragraph (4) is also one of the three paragraphs to which the affirmative restitution defense applies, a point taken up in the next section, and paragraphs (5) through (7) are outside that defense.⁴¹

Paragraph (5) covers threats to bring about or continue a strike, boycott, or other collective unofficial action, and it carries a limiting clause the other paragraphs lack. The paragraph applies only if the property is not demanded or received for the benefit of the group in whose interest the actor purports to act.⁴² The clause is needed because collective action is a lawful way to bargain, and a union that threatens to strike for higher wages is using the leverage that organized labor is expected to use. A threat of that kind becomes extortion only when the money stops flowing to the group. If the person who speaks for the members demands payment for himself, the members' power is being used as an instrument of his private gain.

The strike is lawful in both versions, and the demand is backed by the same leverage. The trap is assuming that the legality of a strike settles the question, when the paragraph asks who receives the money, looking to where the demand was aimed and where the property went.

Paragraph (6) covers threats to testify or provide information, or to withhold testimony or information, with respect to another's legal claim or defense.⁴³ Its reason lies in how lawsuits work. A dispute is decided on the evidence that witnesses are willing to give, and a witness who sets a price on what he will say, or on whether he will say it, has turned evidence into a commodity. Like the accusation paragraph, it reaches a threat to do something that is lawful in itself, since testifying is ordinarily conduct a witness may engage in, and the text does not make the offense depend on whether the testimony would be accurate.⁴⁴

Paragraph (7) is the catch-all for a threat to inflict any other harm which would not benefit the actor.⁴⁵ The closing words of the paragraph set its limit. A threat to take one's business elsewhere unless a price drops is ordinary bargaining, because carrying it out would advance the speaker's own interests. A threat whose execution would only injure the victim, with no gain to the actor, serves no purpose except to frighten, and a demand for property backed by that threat is extortion. The paragraph therefore fills the gaps left by the specific lists without making every hard bargain a theft.

Restitution Defense

The extortion section closes with a defense that changes how three of its paragraphs operate. Under § 223.4, it is an affirmative defense to a prosecution based on paragraph (2), (3), or (4) that the property obtained by threat of accusation, exposure, lawsuit, or other invocation of official action was honestly claimed as restitution or indemnification for harm done in the circumstances to which the accusation, exposure, lawsuit, or official action relates, or as compensation for property or lawful services.⁴⁷ Restitution means repaying what was taken or lost, and indemnification means making a person whole for a loss suffered. Because the defense is affirmative, the actor raises it after the elements of extortion are already met, and it relieves a defendant who has done everything the paragraph forbids.

The defense has two operative parts, and each rests on its own reason. The first is coverage: it reaches only paragraphs (2), (3), and (4), the ones in which the threatened act is lawful taken alone. Reporting a crime, telling a true secret, and pursuing an official proceeding are all things a person may ordinarily do, so the wrong in those paragraphs lies in attaching a price to the act. When that price is only repayment of what the actor honestly believes the victim owes for the very events the threat concerns, the actor is less culpable than someone who manufactures leverage to extract money, and the Code lets the actor say so. Paragraph (1) is different because the threatened act is itself a crime, and no claim of a debt makes violence or another offense an acceptable way to collect.

The second part is the content of the claim. The property must have been claimed as restitution or indemnification for harm done in the circumstances the threat relates to, or as compensation for property or lawful services.⁴⁸ That tie to the underlying harm keeps the defense from becoming a general license, since without it anyone with a grievance could attach a price to silence and describe the price as a debt. The word "honestly" also places the inquiry on the actor's good faith. A claim that turns out to be mistaken can still have been honestly made, so a sincere belief that the money repays a real injury may support the defense, while a pretext invented to justify a demand cannot.

Hypothetical Illustration

A storekeeper watches a customer shoplift $50 of merchandise. The next day he tells her to sign a confession and pay $50 or he will turn her in to the police, and she pays. The threat is to accuse her of a criminal offense, so paragraph (2) is satisfied. He honestly claimed the $50 as restitution for the harm to which the accusation relates, so the affirmative defense applies.

Change one fact: the storekeeper threatens to break the customer's legs unless she pays the same $50. That is a threat of bodily injury under paragraph (1), and the defense reaches only paragraphs (2), (3), and (4). The storekeeper is guilty of theft by extortion even though his claim to the money is just as honest.

Change a different fact: the storekeeper never saw any shoplifting and invents the accusation to collect $50. He knows he has no claim, so nothing was honestly claimed as restitution, and the defense fails.

In the first two versions the demand, the amount, and the honesty of the claim are identical, and the type of threat alone changes the result. In the first and third, the threat is the same and the honesty of the claim changes it. Students lose points here when they treat the defense as a general right to collect a debt, because the type of threat decides whether the defense is available at all, and only after that does the claim itself get examined.

The Code's choice becomes clearer against the divided common law. One line of authority looked to the actor's objective and treated an honest belief that the money was owed as a defense, on the idea that an extortion statute should not reach a person whose method is objectionable but whose aim is legitimate; the Code's own commentary states that idea.⁴⁹ The weight of authority went the other way. In People v. Fichtner a New York court held that the law does not authorize collecting even a just debt by threatening to accuse the debtor of a crime, and that it made no difference whether the debt arose from that crime or was wholly unrelated.⁵⁰ A South Dakota court in In re Sherin likewise reasoned that a person can extort something to which he is rightfully entitled.⁵¹ The Code resolves the split by a compromise. It takes the second view for threats of crime and violence and for the paragraphs outside the defense, and it takes the first view in the three lawful-act paragraphs, but only for claims tied to the harm or to compensation for property or lawful services.⁵²

Exam Analysis Steps

Because the defense depends first on which threat was made and second on what the actor claimed, it is best run in that order. The steps are these:

Identify which paragraph of § 223.4 the threat falls under, and stop if it is paragraph (1) or one of paragraphs (5) through (7), because the defense does not reach them.
If the threat falls under paragraph (2), (3), or (4), identify what the actor said the property was for.
Ask whether the property was claimed as restitution or indemnification for harm done in the circumstances to which the accusation, exposure, lawsuit, or official action relates, or as compensation for property or lawful services.
Ask whether the actor made that claim honestly, testing good faith rather than correctness, and treat a pretext as defeating the defense.