On Wednesday, November 5, 2014, at 10:00 a.m., the U.S. Supreme Court will hear oral argument in a criminal case, Yates v. United States.
The Court will decide whether to overturn the conviction, under the Sarbanes-Oxley Act, of John Yates, a commercial fisherman who allegedly directed his crew to throw undersized fish back into the sea after receiving a regulatory citation for catching them.
Washington Legal Foundation filed a brief in the case urging reversal of Yates’s conviction, arguing that the broadly worded statute failed to provide Yates with requisite “fair warning” of what conduct would run afoul of the law. WLF Senior Litigation Counsel Cory Andrews, who authored WLF’s brief, will be available following oral argument to discuss the case and assess whether the justices’ questioning suggested any particular outcome.
The case raises important questions about the permissible scope of the Sarbanes-Oxley Act, a law passed in 2002 to restore integrity to and faith in public companies’ disclosure and accounting practices in the wake of corporate scandals at Enron and WorldCom. Yates was convicted for violating the Act’s so-called anti-shredding provision, 18 U.S.C. § 1519, which makes it a crime to destroy or cover up “any record, document, or tangible object” with the intent to obstruct an investigation.
Treating fish as “tangible object[s],” federal prosecutors indicted Yates under § 1519. The U.S. Court of Appeals for the Eleventh Circuit affirmed his conviction.
Ahead of oral argument, WLF issued this statement by Senior Litigation Counsel Cory Andrews: “Overcriminalization occurs when vague, ambiguous language in a criminal statute deprives citizens of the appropriate ‘fair warning’ needed to comply with the law. The Eleventh Circuit’s overbroad interpretation of the Sarbanes-Oxley Act’s ‘anti-shredding’ provision would radically transform that law into a trap for the unwary. It takes the investigation of a civil offense (catching fish that were too small) and converts it into a criminal matter without notice and for no good reason.”From the Washington Legal Foundation via Professor Bainbridge.
The statute states:
Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in 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 or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.I have to say that using law designed to prevent securities fraud to criminally prosecute improper fishing practices that would otherwise be subject to a civil fine does seem excessive, and the extremely conservative 11th Circuit's take on the issue seems inappropriately crabbed.
Notably, the law enforcement officer boarded the ship, measured the fish, and found 72 were too small. Then, when the ship landed, only 69 were found to be too small and the difference between the two measurements is the evidence for a charge brought three years after the citation, that the small fish were thrown overboard (not a very impressive effort, given that more than 95% of the small fish were not destroyed). The legal size is 20 inches measured in a very technically precise way. The first measurement allegedly found a few fish as small as 18 inches. The second found fish as small as 19 inches.
He was sentenced to 30 days in prison and three years of supervised release, and argued at trial in addition to this argument, that the discrepancy was due to a measurement error in the first set of measurements by the fishing officer. The felony conviction also has many collateral consequences, such as prohibiting him from voting in Florida.
A discovery sanction judicially imposing an adverse inference that the small fish were caught in the civil fine action would have been more than sufficient to address the issue and would have been the normal course of action in a situation like this one. Indeed, the criminal trial outcome was also influenced by a quite harsh discovery sanction excluding an expert witness who had been endorsed and qualified by the government the same morning because the defense had inadvertently failed to name that person as a witness.
Also, it isn't as if the fish were thrown out to prevent being caught. A regulatory citation was issued, and there is no clear indication that there was some sort of clear court order to preserve the small fish as evidence. Presumably, selling the undersized fish would also be illegal, so there was no economic value apart from the court process in preserving them, and old fish get stinky much more quickly than the court process in regulatory cases moves forward.
The amount of discretion that the statute itself allows for imposition of the penalty is also breathtakingly broad.