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SCOTUS hears case of fisherman caught in Sarbanes-Oxley net

November 19, 2014

A dispute involving six-dozen undersized fish has a group of legal scholars arguing the federal government’s tendency to broadly interpret the criminal code runs the risk of making everyone guilty of an illegal act.

Eighteen professors, including three from Indiana, joined an amicus brief in support of a Florida commercial fisherman who was found guilty of violating the Sarbanes-Oxley Act of 2002. John Yates appealed his conviction and presented his arguments to the Supreme Court of the United States on Nov. 5 in Yates v. United States, 13-7451.

The professors view this case as another example of the problem they described as “overcriminalization.” They say the problem is two-fold with the federal government pumping the criminal code with redundant statutes and writing them so vaguely that actions are criminalized far beyond what common sense would say is prohibited.

“It effects all of us in the sense that we sort of all become criminals in some form or another when you have so many criminal laws on the books,” said Todd Haugh, assistant professor of business law and ethics at Indiana University Kelley School of Business.

Haugh, who also holds a J.D. from the University of Illinois, joined the amicus brief along with Notre Dame Law School professors Stephen Smith and Richard Garnett.

The amici are asking the Supreme Court to judge the fisherman’s behavior against a narrow reading of the Sarbanes-Oxley Act and reverse his conviction.

That the Supreme Court took the Yates case is unusual because there is no split among the Circuit courts over the application of the Sarbanes-Oxley law nor is there any overwhelming national interest or crisis creating a need to review the law.

Yates was captain of the Miss Katie when a deputized officer of the federal Fisheries Services boarded and discovered 72 red grouper measured less than 20 inches long, the legal limit for harvesting that type of fish. The official placed the grouper in wood crates and instructed Yates keep them until he returned to port where the Fisheries Service could retrieve them.

However, after the official left the boat, Yates allegedly directed a crew member to throw the undersized fish overboard and lie to federal agents at the dock. The crew member eventually confessed to authorities the little fish had been destroyed at Yates’ direction.

The federal government charged Yates with violating Section 1519 of the Sarbanes-Oxley Act, which prohibits anyone from knowingly destroying any record, document or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States.

At a federal jury trial, Yates was found guilty and sentenced to 30 days in prison followed by three years of supervised release. The 11th Circuit Court of Appeals affirmed.

Yates argued the term “tangible object” in Sarbanes-Oxley is limited by the preceding words of “document” and “record.” The Act was never intended to prohibit the destruction of non-documentary, non-informational items like fish.

In its brief for the Supreme Court, the federal government countered the statute covers acts intended to obstruct the investigation or proper administration of any matter within federal jurisdiction. Therefore, “tangible object” naturally refers to a wide range of evidence.

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Haugh pointed out although this case illustrates the concern about overcriminalization because the idea of applying a statute enacted in the wake of a financial scandal to a commercial fisherman is “particularly absurd,” the justices still face a difficult decision.

The concern, shared by Justices Antonin Scalia and Samuel Alito, is that unclear language in an overflowing criminal code gives prosecutors too much discretion. But the court, traditionally, has been reluctant to do anything that would second guess the actions of Congress.

Both Haugh and Garnett said overcriminalization can erode the public’s confidence in the justice system. Multiple statutes that cover the same offense make enforcement of the laws arbitrary. Police and prosecutors have the power to not only decide what the law is but also who gets charged and what crime the defendant committed.

According to Haugh, who attended the oral arguments, one tough moment for the government’s attorney came when he was questioned about the decision to charge Yates with violating the Sarbanes-Oxley Act.

Roman Martinez, assistant to the U.S. solicitor general, responded that the U.S. Attorney’s Manual gives the general guidance that prosecutors should charge the offense that is the most severe.

That incited Scalia to retort, “Well, if that’s going to be the Justice Department’s position, then we’re going to have to be much more careful about how extensive statutes are.”

Vague laws do not give citizens clear understanding of what is lawful and unlawful behavior, Garnett explained. He noted the Supreme Court has been concerned that the lack of clarity can lead to arbitrary and discriminatory enforcement, which contributes to overcriminalization.

“It could undermine the respect for the law and the rule of law and call into question the legitimacy of the criminal justice system if people believe that a criminal conviction is not necessarily the result of a socially harmful or wrongful act, but instead just the whim of an overreaching prosecutor or official,” Garnett wrote in an email.

The size of the federal criminal code has exploded since the latter part of the 20th century. As Smith highlighted in his article “Overcoming Overcriminalization,” published in the summer 2012 edition of Journal of Criminal Law and Criminology, 40 percent of the federal criminal laws enacted since the Civil War were passed after 1970.

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To show how broad federal statutes can snag the unsuspecting, the legal scholars in their brief pointed to IndyCar champion Bobby Unser getting prosecuted for unintentionally snowmobiling in a national forest and an 11-year-old girl being charged with violating the Migratory Bird Act after she saved a woodpecker from becoming a meal for the family cat.

The root of the problem, Haugh said, is that the legislative branch cannot just continue to try to address any harm with a statute. Instead, Congress should reform the federal criminal code to remove redundancy and vagueness, and pass better-defined statutes.

Garnett and Smith contend the judiciary has a responsibility to help stem overcriminalization, namely by narrowly defining unclear statutes in favor of the defendant. But in his article, Smith goes further by maintaining the judiciary played a role in the blossoming of charges and punishments that do not fit the crime.

“Courts bear a large share of the blame for overcriminalization, given their penchant to construe ambiguous criminal statutes broadly in a misguided quest to ensure that morally blameworthy offenders will not escape conviction,” he wrote.

Smith agreed the solution is for the legislative branch to stop adding redundancy to the federal code but, he said, the courts can do a lot on their own without resorting to “any Constitutional blunderbuss.”

Smith in part pushed for courts to consider whether the sentence is giving a punishment proportional to the criminal act.

A remedy will not come with a single Supreme Court decision. Haugh noted the problems arising from a bloated criminal code cannot be addressed quickly.

“This is not something that occurred overnight,” he said of overcriminalization. “It has been a decades-long progression of how we as a society deal with crisis and crime de jour.”•

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