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US Supreme Court: Criminal fines require jury finding

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An end-of-term U.S. Supreme Court decision did far more than reduce a penalty in a federal criminal environmental judgment from $18 million to $50,000. It created a new reality for how the government will have to pursue such prosecutions in the future, experts say.

A rare coalition of conservative and liberal justices ruled 6-3 in Southern Union Co. v. United States, 11–94, that the Sixth Amendment right to a jury trial requires a jury to determine facts to support a sentence imposed after a guilty verdict.

A jury found Houston-based utility company Southern Union guilty of improperly storing mercury in violation of the Resource Conservation and Recovery Act. The Supreme Court of the United States ruled that the jury verdict that proved guilt beyond a reasonable doubt was established for just one day rather than the hundreds of days the government alleged, and the award was reduced to the maximum penalty for a single-day violation.
 

ryan-scott-mug.jpg Scott

Indiana University Maurer School of Law associate professor Ryan Scott watched the case and narrated a podcast for the Federalist Society website that analyzed the Southern Union opinion. He said the justices extended to federal criminal fines the rule of Apprendi v. New Jersey, 530 U.S. 466 (2000), that states, “Other than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury and proved beyond a reasonable doubt.”

“This is definitely a win for the defendants,” Scott told the Indiana Lawyer. “That said, the history of Apprendi is one of the Supreme Court recognizing more and more expansive jury rights and the government responding with great resilience.”

In essence, experts said, juries will have to determine factors such as lengths of violations for sentences involving fines on a “per day/per violation” basis, or losses and potential penalties in federal fraud cases. A simple guilty verdict such as that in Southern Union no longer is sufficient to allow a judge to use his or her discretion in levying criminal fines.

“I think the public assumes that the right to ‘trial by jury’ has already been fully defined by the federal courts. But we continue to discover new aspects to this constitutional guarantee,” said Jeff Lorenzo, a Seymour attorney who writes the Indiana Environmental Law Report blog.

He said the decision was overshadowed by SCOTUS rulings on health care and immigration, but, “this is one those cases that talks about issues that are essential to the disposition of justice.”

Southern Union is important for a couple of reasons. It represents an important win for corporate defendants in criminal cases. Since corporations can’t be imprisoned, they are more likely to be punished by large fines. This is particularly true in the environmental practice area because the potential damages to land, air and water are so significant and cleanup costs so imposing,” Lorenzo explained. 

“Beyond that, prosecutors (and courts) will have to ascertain the appropriate mechanisms to obtain a jury decision on the most important and critical facts relevant to augmented sentences,” he said.

That’s likely to mean that prosecutors will have to seek a special verdict from juries that makes specific findings on each count in which a guilty verdict is rendered, Scott and Lorenzo said. It also might require bifurcated trials involving jury determinations of guilt followed by proceedings to determine sentencing criteria on which a judge will rule.

The decision in Southern Union affects a small number of cases, according to Scott, but they often are high-profile matters where potential fines are great. “The distribution of who makes a determination (of sentencing criteria) is very significant,” he said.

Scott believes potentially protracted jury proceedings required under the ruling also might give defendants more leverage.

“You can bet defendants will use the fact that this is an inconvenience,” he said. But he noted the government has been quick to respond to requirements of Apprendi.


lorenzo-jeff-mug.jpg Lorenzo

“I think what’s most likely to happen is the government will continue to charge in a case just as it’s always done, and this will be a feature of discussion,” he said of the rule of Apprendi. Because most cases settle, “it will become the sort of thing the government negotiates.”

In cases that do proceed to trial, judges might find themselves unable to constitutionally impose a fine greater than that allowed under a jury’s general verdict of guilty, Scott said. They’ll have to determine whether further jury determination is warranted, given the time and cost involved. “They may not feel it’s worth the candle and impose a smaller fine.”

But Southern Union also is likely to sharpen the government’s focus in prosecuting environmental and fraud cases. “I expect indictments will be a little more refined,” Scott said.

Jon Laramore, a partner with Faegre Baker Daniels LLP in Indianapolis, said the ruling was a logical extension of Apprendi.

“Now that we know there are these requirements for fines, prosecutors will be able to take some relatively simple measures to anticipate this issue and in many cases keep it from becoming a problem,” he said.

Lorenzo predicted that the difficulty of proving facts beyond a reasonable doubt relevant to sentencing could pose practical hardships.

“Prosecutors may consider delaying filing until they have the evidence they are going to need to get the fines they consider appropriate,” he wrote. 

Lorenzo said a new body of caselaw might develop from the Southern Union decision, and legislation will likely be introduced in Congress and state legislatures in response to the ruling.

Scott said the case also provided an intriguing glimpse at how the newest justices ­– President Barack Obama’s appointees Elena Kagan and Sonia Sotomayor – would rule on a case involving Apprendi, which the court decided in a 5-4 ruling with a majority across the political spectrum in 2000.

Sotomayor wrote the opinion that was joined by Kagan and Justice Ruth Bader Ginsburg from the court’s liberal wing, along with Chief Justice John Roberts and conservative justices Antonin Scalia and Clarence Thomas.

Scott said the government had hoped that Apprendi had hit a high-water mark in 2009. That’s when a 5-4 Supreme Court appeared to set back the Apprendi rule in Oregon v. Ice, 07-901. There, the court ruled judges were not prohibited from finding facts to determine whether sentences on different offenses should be served concurrently or consecutively.

“Nothing surprises me in the Apprendi line of cases,” Scott said. “You have such a scramble of justices. … They don’t break down on predictable ideological lines.”

Lorenzo said justices left open other questions. Southern Union seems to suggest that Apprendi may apply to any penalties inflicted by the government for the commission of offenses, he explained. Also left for future consideration: “When does an offense rise beyond the level of ‘non-petty’ and become substantial enough to invoke the Apprendi rule?”

Scott also sees more Apprendi questions arising. The jury trial right could be a matter for the courts to decide in cases involving restitution determinations and in matters where asset forfeiture is ordered, he said.•

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  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

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