Every year on September 17, the Cato Institute puts on a great all-day program celebrating Constitution Day. Geared for lawyers but interesting to anyone concerned with the state of American law, the event focuses on the most compelling cases before the U.S. Supreme Court. The day features several different panels focused on themes the Court addressed during the most recent term, and one panel dedicated to the cases slated for the upcoming October term. To close out the event, Cato brings in a distinguished practitioner or other eminent legal figure to give the annual B. Kenneth Simon Lecture on Constitutional Thought. This year’s lecture, “Flunking the Founding: Civic Illiteracy and the Rule of Law,” will be presented by Fifth Circuit Judge Don Willett.
Perhaps of particular interest to OIA readers, there is a criminal law panel from 1PM-2PM ET, featuring Paul Larkin of the Heritage Foundation, Nick Mosvick of the National Constitution Center, and Jay Schweikert of the Cato Institute. The panel will be moderated by Cato’s Clark Neily.
The full lineup and schedule for the event can be found here. Registration for the event is here. Five hours of CLE credit are available for lawyers in Virginia.
Originally published at The Daily Signal by Amir Babak Banyan and Bryan Puckett | August 20, 2019
KEY TAKEAWAYS
There are hundreds of thousands of federal crimes, creating a minefield of criminal liability that Americans unknowingly walk through every day.
Prosecutors already have tremendous power, and the fewer tethers it has, the more unjust its use becomes.
The 6th Circuit deserves praise for overturning the convictions of Amir Babak Banyan and Bryan Puckett in Tennessee.Copied
In an opinion issued on Aug. 5, the 6th U.S. Circuit Court of Appeals struck a small but valuable blow against prosecutorial overreach and the problem of overcriminalization.
By now, overcriminalization—the overuse and abuse of criminal laws to address every societal concern and punish every mistake—is a familiar problem.
There are hundreds of thousands of federal crimes, creating a minefield of criminal liability that Americans unknowingly walk through every day.
Get exclusive insider information from Heritage experts delivered straight to your inbox each week. Subscribe to The Agenda >>
The federal criminal code and the hundreds of thousands of criminal statutes contained in federal regulations criminalize things such as making an annoying noise in a national park, allowing a horse to exceed a “slow walk” when people nearby are on foot, and using a surfboard on a beach designated for swimming.
No less serious than the problem of criminalizing all sorts of innocent behavior is the problem posed by overzealous prosecutors who stretch the law to obtain as many criminal convictions as possible.
As The Heritage Foundation’s Paul Larkin writes, overzealous prosecutors “might not acknowledge or even recognize instances of overcriminalization, and even if they did, they might not highlight them, because doing so would embarrass the attorney general and individual U.S. attorneys who had the authority to prevent any such prosecutions.”
In the 6th Circuit case, prosecutors charged the defendants with bank fraud, even though they didn’t commit bank fraud. The defendants did commit mortgage fraud, but the government didn’t prosecute them for that.
In fact, for reasons unknown, the prosecutors ignored that crime for five years until the statute of limitations expired.
Then, realizing that their delay cost them a mortgage fraud conviction, the prosecutors searched the criminal code for some law that might let them prosecute the defendants anyway. They settled on bank fraud, even though the defendants’ crime didn’t fit the bill.
But the court refused to expand the law because the bank fraud statute “is as straightforward as they come” and plainly did not cover mortgage fraud. It ordered that the defendants be acquitted.
That was the right outcome.
You might counter, “The defendants were guilty of something. Surely they should go to jail, regardless of the prosecutors’ mistake.” But that flips due process on its head, allowing the government to lock people up whenever—and for whatever—it wants.
Prosecutors already have tremendous power, and the fewer tethers it has, the more unjust its use becomes.
Consider the case of Eddie Leroy Anderson and his son.
Prosecutors charged them with federal felonies for looking for arrowheads on federal land. Although they found no arrowheads, prosecutors argued that the mere act of looking for them was an attempt to violate an obscure law that the father and son didn’t know existed.
Facing felony convictions and prison terms, Anderson and his son pleaded guilty to lesser charges.
In another case, prosecutors charged a fisherman with destruction of “tangible objects” in violation of a law designed to prevent financial companies from destroying records of fraudulent activities.
The Supreme Court reversed the fisherman’s conviction and held that although fish are, strictly speaking, tangible objects, prosecuting the fisherman for throwing fish back into the sea was an impermissible expansion of a law designed to target financial crimes.
In each of these cases, prosecutors zealously sought a conviction, but never stopped to ask if they were doing justice.
The 6th Circuit deserves praise for overturning the convictions of Amir Babak Banyan and Bryan Puckett in Tennessee.
In so doing, the court reminded the prosecutors that liberty is best protected by interpreting criminal statutes narrowly and putting the burden squarely on the government to apply the right laws to the right crimes.
Prosecutors would do well to remember U.S. Supreme Court Justice George Sutherland’s admonition in a 1935 ruling that although a prosecutor “may strike hard blows, he is not at liberty to strike foul ones.”
This piece originally appeared in The Daily Signal
Originally published at Manhattan-Institute by Rafael A. Mangual | January 1, 2019
The passage of the First Step Act — the criminal-justice and prison-reform bill championed by President Trump — was a rare bipartisan triumph in this age of deep polarization.
But the bill left much unaddressed and was missing another reform that conservatives have long pressed for: namely, stopping the explosion in the number of federal crimes, well beyond what the average citizen should be expected to know or abide by.
Call that the Next Step.
Given the bipartisan cooperation behind First Step, congressional Republicans should now nudge their Democratic colleagues to address the serious issue of federal overcriminalization.
That means addressing four main problems.
First, as already mentioned, there is the sheer number of federal criminal prohibitions on the books. Though no one can say for sure just how many federal crimes exist, estimates put the number at more than 300,000, a ridiculous number of crimes for Americans to be versed in.
These include prohibitions on selling “spaghetti sauce with meat” that contains less than 6 percent meat, driving on the beach at the Cape Cod National Seashore without a shovel in the vehicle and walking a dog on a leash longer than six feet on federal property.
Second, a majority of federal crimes lack meaningful intent requirements, bucking centuries of legal tradition requiring that prosecutors establish mens rea (that the defendant acted with a guilty mind) to secure a conviction.
This lack of intent requirements is especially troubling considering the fact that thousands upon thousands of federal statutes could result in a felony conviction if violated.
Third, many federal crimes are, counterintuitively, codified outside the federal criminal code (Title 18). Instead, they are sprinkled throughout the many thousands of pages of federal statutes and regulations.
Finally, less than 2 percent of federal criminal law — about 5,000 of the more than 300,000 crimes — are statutes passed by both houses of Congress and signed into law by the president. Instead, the overwhelming majority are criminally enforceable regulations created by politically unaccountable bureaucrats.
This last problem is best understood as “criminalization without representation.” It is a direct threat to individual liberty and a hindrance to a well-functioning market economy.
Collectively, these problems have created a body of criminal law that is far too large and disorganized for anyone to read, let alone internalize. Coupled with the erosion of criminal-intent standards, this means that each of us by some estimates commits, on average, three federal felonies a day.
In addition to significantly raising the cost of legal compliance, which in turn raises the cost of doing business, overcriminalization tramples on core American principles of representation, fair notice and due process.
So what should the “next step” look like?
First, it should include a default criminal intent standard that would apply to any federal crime that doesn’t explicitly state whether, and to what extent, a showing of intent is a prerequisite for conviction.
This was part of an earlier bipartisan package of reforms scuttled at the last minute by the Obama administration and opposed by left-wing groups, though many of these same outfits loudly backed the First Step Act.
Second, the next reform should restore political accountability to the process of crime creation by restricting to civil enforcement all rules that haven’t passed both houses of Congress through the process most of us have been familiar with since childhood, thanks to “Schoolhouse Rock.”
Enacting such reforms to reduce federal overcriminalization would require Democrats to reciprocate the support they recently received from Republicans for First Step. Given the midterm-election results, that may be a tall order. Yet it should be made a priority not merely as a show of bipartisanship, but because, as the president said of the First Step Act, it’s “the right thing to do.”
______________________
Rafael A. Mangual is a fellow and deputy director for legal policy at the Manhattan Institute. Follow him on Twitter here.
Originally published at Manhattan-Institute by James R. Copland and Rafael A. Mangual | August 8, 2018
EXECUTIVE SUMMARY
Building on previous MI studies, this paper lays out the contours of America’s state-level overcriminalization problem. Today, state statutory and regulatory codes overflow with criminal offenses. Most of these offenses involve conduct that is not intuitively wrong. Most could not be easily discoverable by individuals or small businesses that lack teams of specialized lawyers. Many have weak or absent criminal-intent requirements, leaving unsuspecting and well-meaning citizens vulnerable to prosecution even when acting in good faith. Many are never reviewed by legislators accountable to the voting public. And the volume of state crimes is expanding and growing less manageable with each passing year.
The proposed model legislation and executive order in this paper offer a framework for state lawmakers to address the overcriminalization problem. These policies:
Protect well-meaning individuals by requiring a showing of criminal intent absent a clear legislative command to the contrary, and affording defendants the ability to assert a good-faith mistake-of-law defense in cases not involving public order and safety
Make the body of criminal law clearer and easier to navigate, by recodifying criminal laws and paring outdated, duplicative, and unnecessary crimes from the books
Reconnect criminal lawmaking with the legislative process, restoring political accountability for the growth of criminal law and potentially slowing the rate at which criminally enforceable regulatory offenses are created.
American law today has a way of making criminals out of ordinary citizens and small business owners:
In 2016, authorities in Oklahoma prosecuted bartender Colin Grizzle for serving vodkas infused with flavors like bacon and pickles. The practice, though popular with patrons, violated Title 37, Chapter 3, Section 584 of the Oklahoma Code.[1]
In 2012, a Minnesota man, Mitch Faber, was jailed for the crime of not finishing the siding on his own house.[2]
In 2011, North Carolina authorities prosecuted Steven Pruner for selling hot dogs from his food cart outside the Duke University Medical Center without a permit. Pruner was sentenced to 45 days of police custody.[3]
Parents today face criminal sanction if they let children run free—as South Carolina mother Debra Harrell discovered in 2014, when she was arrested and lost custody of her nine-year-old child, whom she had allowed to play alone in a park.[4] But parents who drop children off in others’ care can unwittingly place their friends in criminal jeopardy; in 2009, a Michigan woman, Lisa Snyder, was threatened with arrest after it was discovered that she was taking her neighbors’ kids to the school bus stop each morning, which state regulators considered a violation of laws banning unlicensed day care.[5]
In some cases, states have delegated criminal lawmaking authority to unelected regulators and private boards. Such boards have asserted surprisingly sweeping powers. In 2012, the North Carolina Board of Dietetics and Nutrition accused Steve Cooksey of an unlicensed practice of dietetics, a misdemeanor under a catchall provision criminalizing any violation of dietetics or nutrition provisions in the general statutes.[6]
Cooksey’s crime? After battling life-threatening diabetes, he had started an Internet blog, in which he shared his experiences, described how a new diet had helped him overcome his serious condition, and answered questions posed by blog readers.[7] According to the board, the crime extended to ordinary advice exchanged in private e-mails and telephone calls between his friends and readers.[8] Cooksey ultimately prevailed in a First Amendment challenge to the law brought by the litigation nonprofit Institute for Justice;[9] but individuals and business owners without such strong free-speech claims are not afforded a similar ability to get out of jail.
Cooksey’s alleged violation was unknowing—but that offered him little recourse. In most jurisdictions, the fact that someone accused of a crime was engaged in seemingly innocent conduct and had no reason to know that he was breaking the law affords no defense.
In 2007, a Michigan appeals court upheld the conviction of Kenneth Schumacher for the unlawful disposal of scrap tires, which included a sentence of 270 days in jail and a $10,000 fine. Schumacher had not known that the facility where he deposited his tires had seen its permit expire; he believed it to be a legal depository.[10] The court nevertheless determined that Schumacher’s subjective judgment that his delivery was legal did not absolve him of the environmental law’s strict licensing rule.[11] (Michigan has since adopted a law that requires a showing of criminal intent for any crime unless the legislature expressly states otherwise; but it remains a minority rule across the states, including in North Carolina.)
These cases exemplify “overcriminalization,” which describes the rapid growth in the number of criminally enforceable rules and regulations. Overcriminalization particularly refers to crimes for conduct that is not intuitively thought of as criminal.
Overcriminalization in the U.S. has drawn increasing scrutiny by politicians,[12] judges,[13] scholars,[14] and policy analysts.[15] In 2010, coauthor Copland published a book chapter looking at overcriminalization in New York State.[16] Four years later, the Manhattan Institute began to systematically study overcriminalization at the state level, through jurisdiction-specific analyses of quantitative and qualitative trends in state criminal lawmaking. Reports on criminal law in Michigan,[17] Minnesota,[18] North Carolina,[19] Oklahoma,[20] and South Carolina,[21] as well as additional analysis of surrounding states, identified overcriminalization as a serious problem.
Overcriminalization goes beyond the mere presence of too many laws on statute books. Our research has highlighted fundamental deficiencies in how crimes are created and codified. These deficiencies undermine political accountability and erode the structural limits on government action that preserve our freedoms. Overcriminalization is exacerbated by the erosion of traditional intent requirements and other due-process protections in criminal cases.
This paper builds upon the collective findings of our series of state-specific reports and proposes model legislation and executive orders that states can adapt to ameliorate overcriminalization.
Overcriminalizing America
Too Many Crimes
“It will be of little avail to the people that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.”
—James Madison, Federalist No. 62
In the Overcriminalizing America series of reports, Manhattan Institute scholars observed bloated criminal codes—sometimes several times larger than the Model Penal Code (Figure 1). (The Model Penal Code is a document drafted by the American Law Institute—an independent group of lawyers, judges, and academics—to “assist legislatures in making a major effort to appraise the content of the penal law by a contemporary reasoned judgment.”)[22]
In comparison with the Model Penal Code’s 114 sections, the criminal codes in Michigan and North Carolina, measured in 2014, had 918 and 765 sections, respectively; those in Minnesota, Oklahoma, and South Carolina, measured in 2016, contained 327, 1,232, and 557 sections, respectively. These state criminal codes varied between 129,000 and 293,000 words. Michigan’s criminal code, for example, uses 266,300 words—taking up 500 pages of 10-point, double-spaced Times New Roman text.
As voluminous as these state criminal codes are, they only begin to scratch the surface in cataloging how many crimes are actually on a state’s books. Many state crimes are codified not in penal codes but in other parts of the broader statutory code, in the vast array of agency-created regulation, and even in private licensing-board rules that have de facto criminal effect through “catchall” statutory delegations of criminal lawmaking power. In each of the five states studied in the Overcriminalizing America series, a majority of new crimes created by statute in the preceding six years were codified outside the criminal code—including 83% of new crimes enacted in Minnesota, 86% of new crimes enacted in South Carolina, and 91% of new crimes enacted in Oklahoma.
During the six-year periods studied, the five states added to their criminal statutes at alarming rates (Figure 2), creating 26–60 new crimes annually—an average of 42 per year. Many of the new crimes created in these jurisdictions were felonies (Figure 3).
The creation of new crimes has hardly slowed down in the years since we released our reports. During the 2015–16 legislative sessions in Michigan,[23] North Carolina,[24] and South Carolina[25], the state legislatures added an average of 37 new crimes to their books.
Outmoded, Silly, and Poorly Written Laws
“We face a Congress that puts forth an ever-increasing volume of laws in general, and of criminal laws in particular. It should be no surprise that as the volume increases, so do the number of imprecise laws.”
—Antonin Scalia, Sykes v. United States, 564 U.S. 1 (2011)
What do some of the crimes populating state statute books look like? Many are duplicative. For example, in 2012, North Carolina enacted a statute criminalizing the theft or vandalizing of portable toilets—acts presumably covered by the state’s general prohibitions on theft and vandalism.[26] The separate codification of acts covered by existing statutes makes the criminal law harder for the average citizen to follow.
Other crimes created during the periods studied border on the ridiculous. Consider a 2011 Oklahoma statute criminalizing the “[f]ailure to leave any gates, doors, fences, road blocks and obstacles or signs in the condition in which they were found, while engaged in the recreational use of the land of another.”[27] Some statutes are so poorly drafted that they remove all objectivity from the process of determining whether a crime was committed. This was the case for a 2012 Minnesota statute prohibiting drug and alcohol abuse counselors from imposing on their clients “any stereotypes of behavior, values, or roles related to human diversity.”[28] What constitutes such a stereotype is left undefined in the statute.
When considering the problems created by ill-considered new additions to the statute books, often overlooked are the problems that stem from old crimes that, while rarely enforced, remain on the books, contributing to the obesity of a state’s body of criminal law. In South Carolina, for example, an old law prohibits, on pain of imprisonment, unlicensed fortune-telling. How one goes about the licensing of fortune-tellers is unclear. A more important question is why such an archaic statute should remain on the books. We have found no example of present-day enforcement of this law.
Other examples include:
Prohibiting the temporary taking of horses or mules (North Carolina)[29]
Prohibiting minors under the age of 18 from playing pinball (South Carolina)[31]
The constant creation of new crimes, coupled with the failure to prune the statute books of old crimes, raises the transaction costs of legal compliance and exacerbates one’s risk of becoming entangled in the ever-growing web of state criminal law.
Counterintuitive Codification
“We concluded that the hunt to say, ‘Here is an exact number of federal crimes,’ is likely to prove futile and inaccurate —James Strazzella, author of the american bar association report “The Federalization of Criminal Law”
Imagine being the proprietor of a small business and wanting to figure out whether something is a criminal offense. Where do you look? Most would answer: “The criminal code.” Yet that would be a risky proposition: newly created crimes are often codified outside state criminal codes, in other chapters of the broader statutory code. Indeed, in all five states that we examined, a majority of the crimes created during the six-year periods studied were codified outside their respective criminal codes: 55% for North Carolina, 73% for Michigan, 83% for Minnesota, 86% for South Carolina, and 91% for Oklahoma (Figure 4).
When crimes are codified outside a state’s criminal code, people who want to stay out of prison must sift through every chapter of the state’s broader statutory code. Parsing through volumes of code with word counts exceeding Tolstoy’s War and Peace is difficult for a trained legal professional, let alone a layman. After such parsing, one would still need to read the broad array of catchall provisions attaching criminal liability to the rules and regulations promulgated by agency officials, government boards, and private licensing bodies.
Erosion of Mens Rea
“Even a dog knows the difference between being kicked, and being stumbled over.”
—Oliver Wendell Holmes, Jr., The Common Law (1888)
The long-standing tradition in Anglo-American legal systems has been that every crime has two elements: (1) it is a bad act (Latin: actus reus); and (2) it is undertaken with a guilty mind (mens rea).[32] The criminal law has also recognized that there are varying levels of culpability. Generally speaking, offenders can act purposefully, knowingly, recklessly, and negligently. These are terms of art whose definitions are not necessary to set out here; but readers should have a sense of the historical backdrop with which they should view current trends in criminal lawmaking.
State lawmakers have often failed to specify any intent requirements in the crimes that have been added to statutory codes in recent years. In Michigan, a study done by the Mackinac Center for Public Policy found that of the 3,102 crimes on state books in 2014, 27% of felonies (321 of 1,209) and 59% of misdemeanors (1,120 of 1,893) contained no mens rea provision.[33]
Many state courts have interpreted statutory silence on criminal intent as the legislature’s intent to create a strict-liability offense (one for which proof of mental culpability is not required). But this is unlikely. Statutory silence on intent in most cases does not reflect a considered decision on the part of legislators to create a strict-liability crime; rather, it is a likely by-product of ad hoc decision making by different statutory drafters. Regardless, inverting the Model Penal Code’s default rule that mens rea is required absent an express statutory command to the contrary leaves citizens at even greater risk: prosecutors would have only to prove that the defendant committed the prohibited act or omission.
Criminalization Without Representation
“Governments are instituted among Men, deriving their just powers from the consent of the governed.”
—Declaration of Independence (1776)
Due to the sweep of the modern regulatory state, legislators regularly delegate details to the executive branch or, in some cases, to private bodies. Statutory catchall provisions make it a crime to violate any of the vast swaths of rules, regulations, and permitting requirements developed outside legislative input or review. We have dubbed this phenomenon “criminalization without representation.”[34]
In North Carolina, for example, statutory catchall provisions make it a crime to violate any rule adopted by various boards, agency commissioners, and secretaries in the areas of public health, agriculture, and environment,[35] as well as private licensing boards in medicine, dentistry, and nutrition.[36] Further, most local ordinance violations in North Carolina are state criminal misdemeanors.[37] None of these catchall provisions contains any criminal-intent standard, despite the fact that much of the prohibited conduct is unlikely to be intuitively criminal.
North Carolina is not unique. Similar statutory catchall provisions delegating state criminal lawmaking power to unelected or local boards, or to single executive branch officials, exist in the other states studied.[38] Such catchall provisions attach criminal penalties to each rule promulgated by a non-legislative individual or board before any rule is actually created. When criminal rules are then promulgated, after the statute in question becomes law, the elected legislature is not required to review or approve the new crimes.
For an example of how criminalization without representation works, consider a 2010 Oklahoma law, the “Pet Breeders Act,” which, in addition to creating criminal penalties for violating the act, criminalized the violation of “any rule [later] adopted under the [Act].”[39] How voluminous were the subsequently promulgated rules? They exceeded 20 pages with more than 43 sections, highlighting just how much the use of regulatory catchalls can inflate a state’s body of criminal laws.[40]
Fixing the Overcriminalization of America
This report paints an unflattering picture of state criminal law. But there is some light shining through the clouds. Some state legislatures have adopted measures to stem the tide of overcriminalization. The five reforms proposed below—and the accompanying model legislation and executive orders—would build upon these recent legislative successes.
Restore Criminal Intent
One way to protect well-meaning citizens against prosecution for crimes that they unknowingly commit is to ensure that prosecutors meet the same burden of proof for both of the traditional elements of a crime. That is, the government should have to prove criminal intent in prosecuting alleged regulatory offenses—which are not intuitively criminal in nature—just as it is required to do in cases involving more serious offenses.
Fifteen states have adopted default criminal-intent statutes that establish a baseline level of intent that prosecutors must establish to secure a conviction.[41] These default provisions are typically triggered when the criminal statute or regulation in question is silent as to criminal intent.
Unfortunately, even states that have adopted these mens rea rules have sometimes omitted crimes that ordinary citizens are likely to find the least intuitively criminal. For example, Kansas’s default criminal-intent statute applies only to offenses in the state’s criminal code, despite the fact that the criminal code is likely to contain only a minority of the state’s statutory crimes. Kansas and other states should therefore expand their default criminal-intent statutes to apply to offenses listed throughout their entire statutory code.
While including an intent requirement in all criminal statutes may be good policy, legislators may wish to retain the power to create strict-liability offenses in certain cases. Default mens rea laws, such as our proposed model legislation, would not prohibit lawmakers from doing so. Instead, a default criminal-intent statute simply prohibits courts from interpreting statutory silence on criminal intent as the legislature’s desire to create a strict-liability offense. Once such a default is adopted, lawmakers who wish to create a strict-liability offense would have to do so explicitly in the statutory language.
AN ACT TO REESTABLISH MENTAL CULPABILITY AS AN ESSENTIAL ELEMENT OF A CRIMINAL OFFENSE
Sec. 1
1. Except as otherwise provided in this section, a person is not guilty of a criminal offense for which incarceration is statutorily a potential punishment, committed on or after the date of the passage of this Act by both legislative chambers, unless both of the following apply: A. The person’s criminal liability is based on conduct that includes either a voluntary act or an omission to perform an act or duty that the person is capable of performing. B. The person has the requisite degree of culpability for each element of the offense as to which a culpable mental state is specified by the language defining the offense. 2. If the statutory language setting out the elements of a criminal offense explicitly imposes strict criminal liability for the conduct described in the statute, then mental culpability is not required for a person to be guilty of the offense. 3. If a subsection of a statute plainly imposes strict criminal liability for an offense defined in that subsection but does not plainly impose strict criminal liability for an offense defined in another subsection, the offense defined in the subsection without a plain imposition of strict criminal liability should not be inferred to be a strict-liability crime. 4. Statutory silence as to mental culpability (mens rea) with respect to an offense or element of an offense shall not be construed as the legislature’s intent to impose strict criminal liability for any offenses set out therein. 5. If statutory language defining an element of a criminal offense that is related to knowledge or intent or as to which mens rea could reasonably be applied neither specifies mental culpability nor plainly imposes strict liability, the element of the offense is established only if a person acts with intent, or knowledge. A. “Intent” means a desire or will to act with respect to a material element of an offense if both of the following circumstances exist: i. The element involves the nature of a person’s conduct or a result of that conduct, and it is the person’s conscious object to engage in conduct of that nature or to cause that result. ii. The element involves the attendant circumstances, and the person is aware of the existence of those circumstances or believes or hopes that they exist. B. “Knowledge” means awareness or understanding with respect to a material element of an offense if both of the following circumstances exist: i. The element involves the nature or the attendant circumstances of the person’s conduct, and the person is aware that his or her conduct is of that nature or that those circumstances exist. ii. The element involves a result of the person’s conduct, and the person is aware that it is practically certain that his or her conduct will cause that result.
Sec. 2
1. Nothing in this Act shall be construed to alter the state of the law with respect to the legal effect or lack thereof on criminal liability of the voluntary consumption of a substance or compound one knows or reasonably should know may lead to intoxication or impairment.
Expand the Mistake-of-Law Defense
The “mistake-of-law” defense is a legal mechanism through which a defendant who committed a prohibited act can argue that he nevertheless acted in good faith. If successfully invoked, a mistake-of-law defense can rebut the presumption that a defendant knew and understood the law.
Mistake of law is an affirmative defense, i.e., a criminal defendant must advance it to negate legal liability. The defense requires a defendant to establish that he:
(1) erroneously conclude[d] in good faith that his particular conduct [was] not subject to the operation of the criminal law; (2) ma[de] a bona fide, diligent effort, adopting a course and resorting to sources and means at least as appropriate as any afforded or [sic] under our legal system, to ascertain and abide by the law; [and] (3) act[ed] in good faith reliance upon the results of such effort.[42]
The defendant must also show that “the conduct constituting the offense is neither immoral nor anti-social.”[43]
Traditionally, a mistake-of-law defense has been viable only in limited circumstances: when the law in question had not yet been published; when the defendant relied on an official interpretation of the law by a prosecutor or other applicable official; or when the defendant relied on a subsequently overruled judicial opinion. The proposed model legislation would expand the applicability of the defense. If a defendant “erroneously concludes in good faith” that his conduct is not illegal, the model legislation would allow him to present a mistake-of-law defense to a jury—even if the law in question was already published or he was not relying on a judicial opinion or an official interpretation from a government official.
This sort of expansion would offer well-meaning citizens an important layer of protection against criminal liability for acts committed despite having made a good-faith effort to comply with the law—so long as they could convince a jury of their good faith. The model mistake-of-law defense would not apply to cases involving violence, property destruction, or the possession or distribution of narcotics, thereby minimizing the possibility that the policy would harm public safety.
AN ACT TO ESTABLISH THE CONTOURS AND APPLICABILITY OF THE AFFIRMATIVE DEFENSE OF “MISTAKE OF LAW” IN CRIMINAL CASES
SEC. 1 | “MISTAKE OF LAW” DEFINED
“Mistake of Law” is an affirmative defense[44] that, if proven by a preponderance of the evidence, negates the criminal-intent element of a specific-intent crime.
SEC. 2 | ELEMENTS OF THE DEFENSE
The mistake-of-law defense is a cognizable defense when all of the following elements are established: 1. charges are brought in criminal court; 2. the statutory or regulatory offense(s) in question are not strict-liability offenses, and the state is required to establish criminal intent beyond that to merely perform the act or omission constituting the offense; 3. the defendant erroneously concludes in good faith that his particular conduct is not subject to the operation of criminal law; 4. the defendant makes a bona fide, diligent effort, adopting a course and resorting to sources and means at least as appropriate as any afforded under our legal system, to ascertain and abide by the law; and A. In cases in which the conduct constituting the offense(s) is not characterized by the manufacture, sale, possession, or distribution of narcotics or any controlled substance, and is neither violent nor destructive of property, appropriate means are not limited to reliance on official interpretations or judicial decisions, consultation with a licensed attorney, and, where the offense alleged was committed in a business setting, seeking the advice of internal compliance professionals; B. In cases in which the conduct constituting the offense(s) is not characterized by the manufacture, sale, possession, or distribution of narcotics or any controlled substance, and is neither violent nor destructive of property, enactment and publication of a law or regulation shall not be deemed to negate a mistake of law defense as a matter of law; 5. the defendant acts in good-faith reliance upon the results of such effort.
Recodify the Criminal Law
In North Carolina, lawmakers introduced a bill to establish a “recodification task force.” When the proposed legislation stalled, stakeholders from public-policy organizations and the North Carolina government formed an informal working group that took on the tasks outlined in the proposed legislation. The group has since been formally recognized by the state’s legislature, which passed a bill to deliver to the group requested data and other information.[45]
A recodification task force would reorganize a state’s criminal law into a single, comprehensive code of all criminal offenses. Providing a single source in which all criminal offenses are set out would lower the risk that ordinary citizens acting in good faith unknowingly commit a criminal offense, as well as (likely) improve compliance with the criminal law.
The task force would be free to make recommendations to exclude or include various provisions in the comprehensive code being proposed—consistent with the goal of lowering the transaction costs associated with legal compliance. The comprehensive code proposed by the task force could be amended by, and adopted in whole or in part by, the legislature.
AN ACT TO ESTABLISH THE [STATE NAME] CRIMINAL CODE RECODIFICATION COMMISSION
SEC. 1 | COMMISSION ESTABLISHED
There is established the Criminal Code Recodification Commission (hereinafter “[the] Commission”) within the [state name] Judicial Department’s Office of Court Administration {or equivalent}. SEC. 2 | COMPOSITION
The Commission shall be composed of twenty-one members to be appointed as follows {note: composition may vary based on state constitutional structure, statutory schemes, or political realities}: 1. Four members of the Senate appointed by the President Pro Tempore of the Senate. At least one Senate member must be a member of the minority party at the time of the Commission’s creation. A. Senate members may designate a member of their staff to represent them at meetings of the Commission, but the ability to vote on any matters before the Commission shall be reserved to appointed members. 2. Four members of the House of Representatives appointed by the Speaker of the House of Representatives. At least one House member must be a member of the minority party at the time of the Commission’s creation. A. House members may designate a member of their staff to represent them at meetings of the Commission, but the ability to vote on any matters before the Commission shall be reserved to appointed members. 3. Two members appointed by the Governor. 4. The Lieutenant Governor, or the Lieutenant Governor’s designee, and one additional member appointed by the Lieutenant Governor. 5. Two sitting sheriffs or police department chiefs, of which one shall be appointed by the President Pro Tempore of the Senate, and the other appointed by the Speaker of the House. 6. Seven members appointed by the Chief Justice of the [state name] Supreme Court as follows: A. A sitting superior court judge B. A sitting intermediate appellate court judge C. Two state penitentiary wardens D. A sitting district attorney E. A sitting public defender F. A member of the private criminal defense bar 7. The Chair of the Commission will be selected by the Governor from among the appointed members.
SEC. 3 | DELIVERABLES OF THE COMMISSION The Commission shall produce the following:
1. Within eighteen months from the effective date of this Act, a fully drafted, new, streamlined, comprehensive, orderly, and principled criminal code. 2. Official commentary appended to the new code explaining how it will operate. Said commentary shall identify, explain, and provide justification for changes in current law. 3. An offense grading table appended to the new code grouping all offenses covered by the new code by offense grade. Offenses shall be graded within existing sentencing classes.
SEC. 4 | MANDATE OF THE COMMISSION
In producing deliverables outlined in Sec.’s 3(1)–(3), the Commission shall:
1. Incorporate into the new code all major criminal offenses contained in existing law that the Commission has not chosen to exclude. 2. Include necessary provisions not contained in the current code, such as default mental state requirements as an essential element of criminal liability, a listing of affirmative defenses and their elements, and definitions of offenses and key terminology with corresponding citations to governing precedent when applicable or deemed helpful by the Commission. 3. Exclude from the new code unnecessary, duplicative, inconsistent, or unlawful provisions of current law. Note in commentary whether criminally enforceable provisions of current law that have been excluded from the code should remain available for civil enforcement through the levying of fines, or repealed altogether. 4. Use language and syntactical structure to make the law easier to understand and apply. 5. Ensure that criminal offenses are cohesive, rational, and consistent with one another. 6. Make recommendations regarding whether, and if so, what, limitations should be placed on the ability of administrative boards, agencies, local governments, appointed commissioners, or of other persons or entities to enact rules that will, pursuant to the enabling statute, be eligible for criminal enforcement. 7. Address any other matter deemed necessary by the Commission to carry out its legislative mandate.
Repeal Outmoded, Unnecessary, and Unconstitutional Criminal Laws
Some states have undertaken legislative efforts to clean up their statute books by repealing unnecessary, outmoded, and duplicative criminal offenses. In Kansas, for example, the state established an “Office of the Repealer” in 2011. The primary aim of the office was to review the body of criminal law and continuously flag provisions ripe for repeal, which the legislature could then choose to act upon.[46] In Michigan, Governor Rick Snyder signed, in 2015, a bill repealing a number of outmoded crimes[47]—the legislature’s response to the governor’s call for such reforms earlier that year.[48]
While these efforts are laudable, they do not go far enough, considering the rate at which lawmakers are adding new criminal offenses to the books. One state studied by the Manhattan Institute, however, does offer a fine example of how to undertake a large-scale repeal effort. In 2014, Minnesota’s legislators repealed more than 1,175 crimes in what was dubbed the legislative “unsession.”[49] The unsession was the outgrowth of a push by Governor Mark Dayton to prune unnecessary and outmoded laws piling up on state books.[50]
Dayton persuaded lawmakers to take up a long list of crowd-sourced reform proposals during its short even-year legislative session.[51] States wishing to address overcriminalization should consider using Minnesota’s approach. In addition, states should consider appointing a task force to offer recommendations, which could focus and refine crowd-sourced proposals, as well as facilitate bipartisanship.
The proposed model legislation would not create or mandate a legislative “unsession”—traditional notions of the separation of powers argue against having the executive branch of a state government set the agenda for the legislative branch. Instead, we suggest two mechanisms, legislative resolution and executive order, through which states could create an overcriminalization task force. Such a task force would be charged with reviewing the criminal law with an eye toward identifying provisions ripe for repeal. The legislature could then consider the suggestions of the task force, ideally during a special legislative “unsession.”
A JOINT RESOLUTION TO CREATE THE [STATE NAME] OVERCRIMINALIZATION TASK FORCE, TO PROVIDE FOR THE COMPOSITION OF THE TASK FORCE, AND TO PROVIDE THAT THE TASK FORCE SHALL REPORT ITS FINDINGS TO THE GENERAL ASSEMBLY
Whereas, overcriminalization, defined as the growth of criminal statutes within a state’s code of laws, exists as a phenomenon within the state of ______________; and Whereas, it is in the public interest for the State to establish a ________________ Overcriminalization Task Force to study the presence of the criminal law and how the entirety of the criminal law and state policies affect this population. Now, therefore, Be it enacted by the General Assembly of the State of __________________:
1. There is hereby established the [State Name] Overcriminalization Task Force (hereinafter “task force”) to study and review the scope and application of the criminal law and to examine how the criminal law affects the population of this state. 2. The task force shall consist of thirteen members, composed as follows: A. the Director of the [State Name] Department of Corrections, or his designee, shall serve ex officio and shall be the chairman of the task force; B. twelve members who shall be appointed as follows: i. Six members shall be appointed by the President Pro Tempore of the Senate. Two shall be members of the Senate, at least one of whom shall be a member of the majority political party represented in the General Assembly and at least one of whom shall be a member of the largest minority political party represented in the General Assembly. One shall be a member of the public at large; and ii. Six members shall be appointed by the Speaker of the General Assembly. Two shall be members of the House of Representatives, at least one of whom shall be a member of the majority political party represented in the General Assembly and at least one of whom shall be a member of the largest minority political party represented in the General Assembly. One shall be a member of the public at large; and 3. the task force shall organize as soon as practicable following the appointment of its members and shall select a vice chairperson from among its members. 4. The members of the task force shall be appointed no later than thirty days after the effective date of this act. 5. Vacancies in the membership of the task force shall be filled in the same manner provided by the original appointments. 6. The members shall serve without compensation and may not receive mileage or per diem. The task force may meet and hold hearings at the places it designates during the sessions or recesses of the legislature; and, wherever practicable, the General Assembly shall make meeting space available to the task force upon request. 7. The findings and recommendations of the task force shall be reported to the Governor and the General Assembly no later than twelve months after the initial meeting of the task force. The report shall principally identify the laws the task force recommends to the General Assembly for repeal.
8. The task force shall dissolve immediately after submitting its report to the Governor and the General Assembly.
DRAFT OF EXECUTIVE ORDER ESTABLISHING GOVERNOR’S OVERCRIMINALIZATION TASK FORCE
State of _______________ Executive Department Office of the Governor Executive Order No. 20XX-XX Whereas, overcriminalization, defined as the growth of criminal statutes within a state’s code of laws, exists as a phenomena within the state of ____________________; and Whereas, it is in the public interest for the State to establish a ____________________ Overcriminalization Task Force to study the presence of the criminal law and how the entirety of the criminal law and state policies affect this population. Now, therefore, pursuant to the authority vested in me by the Constitution and Statutes of the State of __________________, I hereby establish the Governor’s Overcriminalization Task Force (“Task Force”) to be composed of ______________ members to include _____________________, appointees from the majority and minority leaders of the Senate and House of Representatives, and representatives from different business sectors and the conservation community, of which I shall designate the chairperson. I hereby direct the Task Force as follows:
SEC. 1 | TASK FORCE DIRECTIVES
1. Task Force Mission: To study and review the body of criminally enforceable rules and regulations and submit a report to the General Assembly identifying those criminal laws and regulations it recommends for repeal.
2. Duties and responsibilities:
A. The Task Force shall evaluate the reports submitted by agencies, pursuant to Section II, that identify current and proposed statutes, rules, regulations, and policies that add new crimes or criminally-enforceable provisions to ________ laws, rules, and regulations. B. The Task Force shall cooperate and coordinate with the appropriate state agencies, as practicable, to identify current and proposed crimes or criminally-enforceable provisions in state laws, rules, and regulations.
C. The Task Force shall conduct public hearings and solicit input from businesses, employers, conservation groups, professional associations, state agencies, and other interested persons and groups to develop its final report. As practicable, the Task Force shall conduct public hearings in local communities around the State.
D. Staff will be designated to assist the Task Force in developing its report. E. The Task Force shall submit its final report on or before ________ XX, 20XX, to the Governor and the members of the General Assembly. FURTHER, I hereby direct all Cabinet agencies and encourage all other executive agencies as follows:
SEC. 2 | AGENCY DIRECTIVES
1. Each agency shall identify its current and proposed statues, rules, regulations, and policies that expand the existing quantity of criminal laws in ________ using the following guidelines:
A. Each agency shall comprehensively review all current and proposed statutes, rules, regulations, and policies in order to assess their effects on the criminal law of ________ to determine whether they are exceedingly vague, duplicitous, antiquated, enforced, proportional to their punishments, and contain reasonable culpability requirements.
B. In evaluating statutes, rules, regulations, and policies, each agency should consider factors to include, but not limited to, their necessity, complexity, efficiency, effectiveness, redundancy, public complaints or comments, short- and long-term effects, impact on all affected persons, both intended and unintended, and unintended negative consequences.
2. Each agency shall submit a written report to the Task Force on or before _____ XX, 20XX, providing detailed recommendations to repeal or amend any provisions that unduly burden businesses and citizens of this State.
3. Each agency is authorized to call upon any department, office, division, or agency of this State to supply it with data and other information, personnel, or assistance it deems necessary to discharge its duties under this Order. Each department, officer, division, or agency of the State is hereby required, to the extent not inconsistent with law, to cooperate with another agency and to furnish it with such information, personnel, and assistance as is necessary to accomplish the purpose of this Order.
4. Each agency shall take care to solicit both written and oral comments from the public, including businesses, employees, professional associations, conservation organizations, and other affected persons or entities as the agency deems appropriate and to consider the views expressed by those parties in any report.
This Order is effective immediately.
GIVEN UNDER MY HAND AND THE GREAT SEAL OF THE STATE OF [STATE NAME], THIS xx DAY OF ____________ 20XX.
Eliminate Criminalization without Representation
In every state studied in the Manhattan Institute’s Overcriminalizing America series, lawmakers have delegated effective criminal lawmaking authority to, among others, executive-branch officials, commissions, and private licensing boards. Such delegation makes legal compliance even more complicated for ordinary citizens.
Moreover, each state that we have examined has a large number of crimes that were never voted on, or even reviewed, by anyone who must answer to voters. Criminalization without representation concentrates power in the hands of unelected officials, undermining political accountability. It also threatens to accelerate the rate of new crime creation.
The proposed model legislation aims to constrain regulators’ power to create crimes without express approval by the legislative branch. The model policy would restrict regulations to the realm of civil enforcement unless and until those regulations survive votes in both chambers of a state’s legislature and are approved by the state’s governor—i.e., unless and until those regulations survive the strictures of bicameralism and presentment.
AN ACT TO END “CRIMINALIZATION WITHOUT REPRESENTATION”
SEC. 1 | DEFINITIONS
1. Regulatory “catchall” provision—A provision in legislation that prescribes penalties (specifically criminal penalties, for the purposes of this legislation) for the violation of a rule, or rules, a regulatory body is authorized to promulgate, prior to the promulgation of such rules. 2. Regulatory body—Any governmental agency, quasi-private body, commissioner, or other official, vested with the authority to promulgate regulations of any sort enforceable by the state of _______________.
3. Rule or regulation—Any prohibition or requirement articulated by a regulatory body and enforceable either civilly or criminally by the state of ______________. 4. Criminal enforcement—Any enforcement action brought by the state for which the target of the enforcement action, if found guilty, can be imprisoned, labeled as a felon or misdemeanant under state law, fined more than $10,000, or prohibited from exercising state or federal constitutional rights, including the rights to vote, keep and bear arms, and deny a law enforcement officer’s request to conduct a search pursuant to the Fourth Amendment to the Constitution of the United States.
5. Rules eligible for criminal enforcement—Any rule promulgated pursuant to a grant of legislative authority that contains a “regulatory catchall” provision by which the rule is covered.
SEC. 2 | BICAMERALISM AND PRESENTMENT REQUIRED
1. As of the effective date of this legislation, no rule or regulation covered by a “regulatory catchall” provision, except those that satisfy the requirements set out in
(2, below) may be criminally enforced. 2. A rule or regulation may be criminally enforced if and only if it has been approved—in the form of a joint resolution subject to an up and down vote—by a simple majority of both houses of the _____________ state legislature, and that resolution has been signed by the Governor. 3. Promulgated rules eligible for criminal enforcement
that have not satisfied the requirements set out in
(2, above) will be restricted to civil enforcement unless and until said requirements are satisfied.
4. If no civil enforcement penalties are set out in the legislation authorizing a promulgated rule eligible for criminal enforcement, the penalties for the violation of said rule are as follows—
A. Upon a finding of guilt by a preponderance of the evidence, a fine not exceeding $150 per violation may be levied. B. Failure to pay any fines levied pursuant to (A, above) can result in additional fines, a finding of contempt of court, or the suspension of a state license related to the offense charged held by the accused.
Conclusion
Building on the Manhattan Institute’s previous findings, this paper lays out the contours of the state-level overcriminalization problem. State statutory and regulatory codes are overflowing with criminal offenses. Most of these offenses involve conduct that is not intuitively wrong. Most could not be easily discoverable by individuals or small businesses that lack teams of specialized lawyers. Many have weak or absent criminal-intent requirements, leaving unsuspecting and well-meaning citizens vulnerable to prosecution even when acting in good faith. Many are never reviewed by legislators accountable to the voting public. And the volume of state crimes is expanding and growing less manageable with each passing year.
The proposed model legislation and executive order offer a framework for state lawmakers to address the overcriminalization problem. These policies:
Protect well-meaning individuals by requiring a showing of criminal intent absent a clear legislative command to the contrary, and affording defendants the ability to assert a good-faith mistake-of-law defense in cases not involving public order and safety
Make the body of criminal law clearer and easier to navigate, by recodifying criminal laws and paring outdated, duplicative, and unnecessary crimes from the books
Reconnect criminal lawmaking with the legislative process, restoring political accountability for the growth of criminal law and potentially slowing the rate at which criminally enforceable regulatory offenses are created
Across the states we have studied, the criminal law tends not to reflect due consideration of whether particular disfavored conduct should be criminalized, rather than dealt with through civil or administrative means; whether it is bad enough to dispense with the long-standing principle that a criminal act requires acting with a guilty mind; and whether the punishment for a given crime fits with parallel offenses, criminal and civil. Such questions can be difficult to answer, especially for the many part-time legislators across the states, constrained by time and resources, and often lacking legal training.
The reforms suggested in this paper implicitly recognize such difficulty—offering protections to criminal defendants acting in good faith, delegating recodification and repeal to focused task forces—while also restoring to the legislature the proper ultimate authority over a government’s awesome power to take away a citizen’s liberty.
Each state is different. Some states have more work to do than others. But we are confident that each state needs reform. It is up to elected state leaders to meet that need with action.
Endnotes
Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2017 Annual Report, July 13, 2017.
“Implementing MACRA,” Health Affairs Policy Brief, Mar. 27, 2017.
Office of Inspector General, U.S. Department of Health & Human Services, “Medicare Hospital Prospective Payment System: How DRG Rates Are Calculated and Updated,” OEI-09-00-00200, Aug. 2001.
Ibid.
Centers for Medicare & Medicaid Services (CMS), “National Health Expenditures.”
Charles Roehrig, “A Brief History of Health Spending Since 1965,” Health Affairs blog, Sept. 19, 2011.
American Medical Association, “RBRVS Overview.”
Congressional Budget Office (CBO), “Factors Underlying the Growth in Medicare’s Spending for Physicians’ Services,” Background Paper #2597, June 2007.
Zirui Song et al., “Medicare Fee Cuts and Cardiologist-Hospital Integration,” JAMA Internal Medicine 175, no. 7 (July 2015): 1229–31.
Medicare Payment Advisory Commission (MedPAC), Report to Congress, “Physician and Other Health Professional Services,” Mar. 2017.
“Implementing MACRA.”
Medicare Access and CHIP Reauthorization Act of 2015, Public Law 114-10.
Institute of Medicine, “Crossing the Quality Chasm: A New Health System for the 21st Century,” Mar. 2001.
Chris Pope, “Medicare’s Single-Payer Experience,” National Affairs, no. 26 (Winter 2016): 2–20.
Kathryn Toone, Natalie Burton, and David Muhlestein, “MACRA in 2017: Overview, Impact & Strategic Considerations of the Quality Payment Program,” Leavitt Partners, Mar. 2017.
Ben Sasse, “House Should Reject Medicare Change,” Politico, Mar. 26, 2015.
CMS, “Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive Under the Physician Fee Schedule, and Criteria for Physician Focused Payment Models,” Final Rule with comment period, Federal Register 81, no. 214 (Nov. 4, 2016): 77008–831.
CMS, “Medicare Program; CY 2018 Updates to the Quality Payment Program,” Proposed Rule, Federal Register 82, no. 125 (June 30, 2017): 30010–500.
Tim Gronniger et al., “How Should the Trump Administration Handle Medicare’s New Bundled Payment Programs?” Health Affairs blog, Apr. 10, 2017.
Toone, Burton, and Muhlestein, “MACRA in 2017.”
CMS, “The Quality Payment Program.”
MedPAC, Report to Congress, “Physician and Other Health Professional Services,” Mar. 2017.
CMS, “The Merit-Based Incentive Payment System: MIPS Scoring Methodology Overview.”
MedPAC, Report to Congress, “Medicare and the Health Care Delivery System,” June 2017.
MedPAC, “Physician and Other Health Professional Services.”
Eric T. Roberts, Alan M. Zaslavsky, and Michael McWilliams, “The Value-Based Payment Modifier: Program Outcomes and Implications for Disparities,” Annals of Internal Medicine 168, no. 4 (Nov. 28, 2017): 255-65.
See the transcript of the MedPAC public meeting, Oct. 5, 2017, pp. 4, 9; Virgil Dickson, “MedPAC Urges Repealing MIPS,” Modern Healthcare, Oct. 5, 2017.
Kate Bloniarz and David Glass, “Next Steps for the Merit-based Incentive Payment System (MIPS),” MedPAC public report, Oct. 5, 2017.
See the letter from Glenn M. Hackbarth, chairman of MedPAC, to Marilyn Tavenner, administrator, Centers for Medicare & Medicaid Services, “RE: CMS List of Measures Under Consideration for December 1, 2014,” Jan. 5, 2015.
See the transcript of the MedPAC public meeting, Oct. 5, 2017, p. 7.
Niam Yaraghi, “MACRA Proposed Rule Creates More Problems than It Solves,” Health Affairs blog, Oct. 16, 2016.
U.S. Government Accountability Office, “HHS Should Set Priorities and Comprehensively Plan Its Efforts to Better Align Health Quality Measures,” Report to Congressional Committees, GAO-17-5, Oct. 2016.
Robert A. Berenson, “If You Can’t Measure Performance, Can You Improve It?” Journal of the American Medical Association 315, no. 7 (Feb. 16, 2016): 645–46.
Yaraghi, “MACRA Proposed Rule.”
J. Michael McWilliams, “MACRA: Big Fix or Big Problem?” Annals of Internal Medicine 167, no. 2 (July 18, 2017): 122–24.
Roberts, Zaslavsky, and McWilliams, “The Value-Based Payment Modifier.”
Lynn Bar, Tim Gronniger, and Tim Putnam, “CMS’s Big MACRA Surprise—Physicians Will Be Judged Based on Cost in 2018 MIPS Calculation,” Health Affairs blog, Nov. 22, 2017.
Krista Teske, “Your Questions About the 2017 MACRA Final Rule—Answered,” Advisory Board Expert Insight, Jan. 31, 2017.
Bloniarz and Glass, “Next Steps for the Merit-Based Incentive Payment System (MIPS).”
Lawrence P. Casalino et al., “US Physician Practices Spend More than $15.4 Billion Annually to Report Quality Measures,” Health Affairs 35, no. 3 (Mar. 2016): 401–6.
“Table 64: MIPS Proposed Rule Estimate Impact on Total Allowed Charges by Practice Size,” Federal Register 81, no. 89 (May 9, 2016): 28375.
See the transcript of the Med PAC public meeting, Oct. 5, 2017.
Kate Bloniarz and David Glass, “Approaches to MACRA implementation: Balancing MIPS and A-APMs,” MedPAC presentation, Jan. 12, 2017.
Toone, Burton, and Muhlestein, “MACRA in 2017.”
Tara O’Neill Hayes, “Primer: MACRA and Advanced Alternative Payment Models,” American Action Forum, Mar. 30, 2017.
CMS, “Physicians and Health Care Providers Continue to Improve Quality of Care, Lower Costs,” Aug. 25, 2016.
“MACRA: Disrupting the Health Care System at Every Level,” Deloitte Health Policy Brief, 2016.
Maria Castellucci, “CMS Loses Money as Medicare ACOs Remain Risk-Averse,” Modern Healthcare, Nov. 3, 2017.
Ashish Jha, “ACO Winners and Losers: A Quick Take,” An Ounce of Evidence blog, Aug. 30, 2016.
Kristen Barlow, “3 Mandatory Bundles Will Likely Be Canceled, a 4th Scaled Back: What You Need to Know,” Advisory Board at the Helm, Aug. 16, 2017.
François de Brantes, “Medicare’s Bundled Payment Programs Suffer from Fatal Flaws, but There Is a Logical Alternative,” Health Affairs blog, May 9, 2017.
J. Michael McWilliams et al., “Outpatient Care Patterns and Organizational Accountability in Medicare,” JAMA Internal Medicine 174, no. 6 (June 2014): 938–45.
Yena Son and Daniel Kuzmanovich, “Concerned About MACRA? You’re Not the Only One,” Advisory Board Practice Notes, Dec. 8, 2016.
John O’Shea, “Salvaging MACRA Implementation Through Medicare Advantage,” Health Affairs blog, Oct. 16, 2017.
Idem, “As MACRA Implementation Proceeds, Changes Are Needed,” Health Affairs blog, Apr. 21, 2017.
De Brantes, “Medicare’s Bundled Payment Programs Suffer from Fatal Flaws.”
“Physicians Wary of MACRA’s Potential to Hasten the Demise of Independent Practices, per Black Book Survey,” PR Newswire, June 13, 2016.
“2016 Survey of America’s Physicians,” Physicians Foundation, Sept. 21, 2016.
Molly Gamble, “Sebelius: PPACA, Antitrust Law in ‘Constant Tension,’ ” Becker’s Hospital Review, Apr. 9, 2013.
Scott Gottlieb, “House Republicans Should Break the Obamacare Mold on Doctor Pay,” Forbes, Mar. 19, 2015.
Hannah T. Neprash, Michael E. Chernew, and J. Michael McWilliams, “Little Evidence Exists to Support the Expectation That Providers Would Consolidate to Enter New Payment Models,” Health Affairs 36, no. 22 (Feb. 2017): 346-54.
“CMS to Count Participation in MA Towards Alternative Pay Model Calculations,” Inside Health Policy, Nov. 8, 2017.
Katherine Baicker, Michael E. Chernew, and Jacob E. Robbins, “The Spillover Effects of Medicare Managed Care: Medicare Advantage and Hospital Utilization,” Journal of Health Economics 32, no. 6 (Dec. 2013): 1289–1300; Katherine Baicker and Jacob A. Robbins, “Medicare Payments and System-Level Health-Care Use: The Spillover Effects of Medicare Managed Care,” American Journal of Health Economics 1, no. 4 (Fall 2015): 399–431.
Originally published at Cato Institute by Jay Schweikert | April 25, 2018
Cases: Black v. US, Weyhrauch v. US
The specific language of the Fourth Amendment was largely a product of the colonists’ experience with the noxious institution of the general warrant. Historically, general warrants—and specifically, writs of assistance—gave law enforcement broad discretion to search wherever and whatever they deemed necessary, without the need to establish specific probable cause before a judicial officer. Such broad discretion enabled abusive, selective enforcement, and the colonists’ contempt for those arbitrary practices was a major cause for the Revolutionary War itself. But 227 years after ratification of the Fourth Amendment, we are tragically approaching a stealth resurrection of the general warrant, in the form of pretextual stops. In Whren v. United States, 517 U.S. 806 (1996), the Supreme Court held that the actual intent of law enforcement officers in making a stop—even unlawful intent, like racial discrimination—is irrelevant to the legality of a traffic stop under the Fourth Amendment, so long as there is probable cause to believe that some traffic violation occurred. The practical effect of this decision has been to give police officers nearly unfettered discretion to stop any person they choose at any time. After all, no one can actually operate a motor vehicle for an extended period of time without running afoul of some traffic law. Especially when combined with other areas of Fourth Amendment law that create expansive exceptions to the warrant requirement, Whren itself has already been described as the “twentieth‐century version of the general warrant.” But if that were not bad enough, the Seventh Circuit, in an en banc decision, recently extended the Whren doctrine even to parking violations—and effectively, to any and all fine‐only offenses, no matter how trivial. Especially in light of the rampant state of overcriminalization in our country today, that move represents an endorsement of the general warrant in all but name. We have so many criminal laws today that we cannot even count them all, and states routinely regulate a huge swath of generally harmless conduct that regular citizens engage in every day. If violation of any regulation whatsoever is sufficient to justify a police stop (regardless of whether that regulation was actually the motive behind the stop), then police can, in effect, stop anyone they want to. The Cato Institute has therefore filed an amicus brief urging the Supreme Court to grant cert in this case, reverse the Seventh Circuit, and reconsider the Whren doctrine entirely.
Originally published at Cato Institute by Jay Schweikert | April 17, 2018
“Vague laws invite arbitrary power.”
That’s the opening line and general theme of Justice Neil Gorsuch’s concurring opinion in Sessions v. Dimaya, announced today. In this case, Justice Gorsuch joined the Court’s four “liberals” in a 5-4 decision holding unconstitutional a provision of the Immigration and Nationality Act, which renders deportable any alien convicted of an “aggravated felony.” This statutory phrase is defined to include a “crime of violence,” which itself is defined to include both crimes where use or threat of force is an element, as well as”any other offense that is a felony and that, by its nature, involves a substantial risk that physical force against the person or property of another may be used in the course of committing the offense.” It was this last provision — the “residual clause” of the statute — that was at issue in the case. The majority held that this abstract definition was “impermissibly vague,” and thus a violation of the Fifth Amendment’s Due Process Clause.
In his separate opinion, Justice Gorsuch gave a detailed analysis of the history and legal foundations of the void-for-vagueness doctrine (largely in response to Justice Thomas, who questioned the propriety of this constitutional doctrine both here and in a similar prior case, Johnson v. United States). His concurrence argues that courts must review and strike down unconstitutionally vague statutes, not just to ensure fair notice to potential defendants, but also to enforce the separation of powers between the branches of government:
Under the Constitution, the adoption of new laws restricting liberty is supposed to be a hard business, the product of an open and public debate among a large and diverse number of elected representatives. Allowing the legislature to hand off the job of lawmaking risks substituting this design for one where legislation is made easy, with a mere handful of unelected judges and prosecutors free to “condem[n] all that [they] personally disapprove and for no better reason than [they] disapprove it.”
Justice Gorsuch also made clear that subjecting vague statutes to meaningful judicial review is equally important in civil cases, where penalties are often at least as harsh as they are under the criminal law:
[I]f the severity of the consequences counts when deciding the standard of review, shouldn’t we also take account of the fact that today’s civil laws regularly impose penalties far more severe than those found in many criminal statutes? Ours is a world filled with more and more civil laws bearing more and more extravagant punishments. Today’s “civil” penalties include confiscatory rather than compensatory fines, forfeiture provisions that allow homes to be taken, remedies that strip persons of their professional licenses and livelihoods, and the power to commit persons against their will indefinitely. Some of these penalties are routinely imposed and are routinely graver than those associated with misdemeanor crimes—and often harsher than the punishment for felonies.
This analysis obviously has implications reaching far beyond the immigration context, and is encouraging for those concerned with overcriminalization and arbitrary law enforcement in general. Justice Gorsuch correctly notes that “[p]erhaps the most basic of due process’s customary protections is the demand of fair notice.” But today, we have so many criminal laws that it’s impossible to even count them all: at the federal level alone, we estimate that there are about 4500 criminal statutes, and around 300,000 regulatory crimes — many of which do not involve inherently wrongful conduct and lack any “mens rea” requirement (that is, you can be found guilty even if you had no idea you were acting unlawfully). Who could possibly claim that such a system gives the ordinary citizen “fair notice” of the conduct for which they can be punished?
This degree of overcriminalization also places enormous unchecked power in the hands of law enforcement and prosecutors. As Justice Gorsuch recognized, vague and expansive laws “invite the exercise of arbitrary power . . . by leaving the people in the dark about what the law demands and allowing prosecutors and courts to make it up.” The staggering breadth of substantive criminalization today means that almost everyone is a criminal, whether they know it or not. If police and prosecutors are inclined to go after you, there’s almost certainly something they can find — whether or not that conduct is genuinely wrongful or harmful.
On the whole, Justice Gorsuch’s opinion in this case is an encouraging sign that he’s aware of and attuned to this set of concerns. Hopefully the newest member of the Court will continue to apply this level of exacting review to vague and arbitrary statutes across the board.
Originally published at Cato Institute by Ilya Shapiro and Reilly Stephens | March 14, 2018
Case: Ellison v. US
Can the government convict you of a crime without showing you had any understanding of the wrongdoing? Mark Ellison was convicted without any such showing and is asking the Supreme Court to take his case.
The case arises out of the tumult of 2008. A real estate company called DBSI went under during the Great Recession, like many other real estate companies at the time. But while for many this unhappy moment meant solely financial losses, for Ellison and his codefendants it meant criminal charges. Section 10(b) of the federal securities law outlaws “any manipulative or deceptive device” used to sell securities. Combined with SEC Rule 10(b)-5, this provides the primary avenue by which the government punishes securities fraud.
The government claims that Ellison and his coworkers defrauded DBSI’s customers in selling them the real-estate investment vehicles that ultimately went bust. But the jury found each innocent on most of the charges, convicting only under the “catch-all” provision of Rule 10(b)-5(c), which outlaws any fraud done “willfully”—but according to the Ninth Circuit ‘willfully’ in this context “does not require that the defendant know that the conduct was unlawful.”
This runs contrary to traditional principles of criminal law. Normally crimes require not just a bad act but also a culpable mental state, what lawyers call mens rea. The difference between murder and manslaughter, for example, is typically whether the perpetrator intended to cause the death or not. But too often these days the government has dispensed with or watered down this traditional requirement, exposing more and more citizens to criminal liability for conduct it is less and less clear should be criminalized.
In addition to watering down the mens rea requirement, the court of appeals determined that the threshold for what did or did not rise to the level of fraud depended on an open-ended test of whether a hypothetical reasonable investor might consider the information “important” in making an investment decision. The Supreme Court and most other circuits, however, have maintained that courts must consider whether, after considering the “total mix” of all the information provided in a case-specific context, the piece of information at issue was “material” to an actual investor’s actual investment decision. Following a test of materiality based on whether some theorized investor might possibly sorta-kinda-coulda thought the information was maybe material expands criminal liability past the horizon.
This case represents yet another example of the overcriminalization that has run rampant throughout our legal system. Defense lawyer and Cato adjunct scholar Harvey Silverglate has estimated that each of us unwittingly commits three felonies a day. When criminality is that capricious, the government can exploit it at its whim, punishing those who displease it through selective prosecution. This is an arrangement more befitting a banana republic than the land of the free.
Cato, joined by the Reason Foundation and law professors Julie Rose O’Sullivan, Ira P. Robbins, Jeffrey S. Parker, and Gideon Yaffe, has filed a brief authored by Paul Kamenar supporting Ellison’s petition. The Supreme Court should take Ellison v. United States and begin to roll back the rising tide of overcriminalization that threatens the liberty of every citizen.
Originally published at Cato Institute by Tim Lynch | February 16, 2017
People: Aaron Swartz, Dudley Hiibel, Bobby Unser, Eric Garner
Policymakers should
Override the old maxim that “ignorance of the law is no excuse” (given the breadth of the criminal codes now on the books, that doctrine no longer makes sense);
strengthen the rule of lenity for criminal cases by enacting a statute that explicitly provides for the strict construction of all criminal laws; and,
prohibit administrative agencies from creating new crimes.
Over the past 10 years, there has been much discussion in academic and policy circles concerning “mass incarceration” in the United States. Many have observed that there is something incongruous about America, the land of the free, finding itself with one of the highest incarceration rates in the world. The United States has about 2 million inmates and another 7 million persons under the “supervision” of the criminal justice system. Something is amiss, but the root of the problem is not sentencing policy; rather, it is the burgeoning criminal codes at the “front end” of the criminal system. Policymakers at all levels of government have criminalized so many activities that it should come as no surprise that our courthouses are clogged with cases and our prisons are overflowing with inmates. Politicians have recklessly sought short‐term political advantage by taking “credit” for new laws while ignoring the long‐term consequences of their policy decisions. It is no overstatement to say that the politics of criminalization threaten the very foundation of our free society.
The Legal Minefield
Every year American lawmakers add new crimes to the law books. Under the Constitution, crime fighting is supposed to be reserved to state and local government. But over the past 40 years, Congress has federalized many of the crimes that have always been investigated by local police. Politicians have also found ways to recriminalize criminal conduct. “Hate crimes,” for example, duplicate crimes such as murder and assault and add stiffer penalties when prosecutors can prove that bigotry was a motivating factor behind the violence.
The criminal law has also followed the rise of the regulatory state. In addition to the thousands of criminal laws, there are now tens of thousands of regulations that carry criminal penalties, including prison time. The web of rules has become so vast that it seems as if most Americans are now criminals whether they realize it or not.
The overcriminalization phenomenon extends beyond the realm of violence, fraud, vice, and commercial regulations. Consider these cases: • A river guide saw a teenager in distress and so left his boat and swam to save her. He was charged with “obstructing government operations” for not waiting for the search and rescue team. • Federal prosecutors indicted computer prodigy Aaron Swartz for improperly downloading articles from the digital library JSTOR. The Justice Department maintains that when a website owner’s terms‐of‐service policy is violated, a crime is also committed — even though owners retain the right to change the terms at any time and without prior notice. Frightened by the prospect of bankruptcy, a long prison sentence, or both, Swartz took his own life. • Retired race car driver Bobby Unser was prosecuted by federal authorities for driving his snowmobile on protected federal land. Unser and his friend got lost during a snowstorm and were desperately seeking shelter or assistance. • Nevada rancher Dudley Hiibel was jailed for declining to give his name to a policeman. • Members of a Christian outreach group were arrested and prosecuted for feeding the homeless in a Ft. Lauderdale park. Local rules restricted food sharing.
There was a telling moment before the Supreme Court in 2009 when a government lawyer was explaining the scope of the federal “honest services” law. The lawyer from the Department of Justice said that law criminalized any ethical lapse in the workplace. In response, Justice Stephen Breyer exclaimed, “There are 150 million workers in the United States. I think possibly 140 million of them flunk your test.” The government lawyer did not deny Justice Breyer’s observation. As unbelievable as it may sound, the federal government considers more than a hundred million Americans to be criminals. And that is only under its interpretation of a single federal statute. As noted, there are thousands and thousands more. The overcriminalization phenomenon is thus quite real.
The Consequences of Overcriminalization
There are several reasons to be alarmed by the exponential growth of criminal rules and regulations. First and foremost, America has always prided itself on its freedom; but a society in which the criminal rules are so pervasive that no one is safe from arrest and prosecution cannot be described as free. The traditional common law crimes — murder, rape, theft, assault — do not restrict the freedom of the citizenry to live their own lives peaceably. However, as soon as the government goes beyond the basic crimes to prohibit other human activities, the adverse impact on liberty becomes evident. As the criminal law expands, there is a concomitant diminution of liberty.
Second, when criminal code violations become virtually unavoidable, the safeguards in the Bill of Rights become ineffectual. As the Harvard legal scholar Henry Hart observed, “What sense does it make to insist upon procedural safeguards in criminal prosecutions if anything whatever can be made a crime in the first place?” Hart’s point was that if some rule can be shown to have been violated, a speedy trial cannot help the person facing a prison sentence. And an able defense attorney can only help his client by making a plea for leniency.
Third, law enforcement resources are limited. The police and courts are busy enough with violent crimes, theft, and extortion. Those cases will be neglected if the police are burdened with additional responsibilities. Andrew McCarthy, a former federal prosecutor, reminds us that there is no getting around the tradeoff: time and money “spent investigating conduct that is not inherently criminal are time and money lost to the thwarting of much more serious crime.”
Fourth, policymakers should always pause to remember that every rule brings about the possibility that the police will have to employ violence to enforce that rule. Eric Garner was killed by New York City police as they were trying to enforce a rule against selling individual cigarettes (“loosies”) on the street. Yale Law School professor Stephen Carter has noted that if policymakers want to seriously reduce the opportunities for dangerous interactions between police and civilians, they should stop talking about “better police training” and scale back the criminal codes.
Fifth, another inevitable consequence of overcriminalization has been more governmental errors. Innocent people are sometimes arrested, prosecuted, and imprisoned. Wrongful convictions are not only unjust to the prisoner, but to his or her family — children, spouse, parents, and siblings. One effective way to limit those miscarriages of justice is to keep the criminal system as small as possible. If America has two million people imprisoned and the government has done its job properly in 95 percent of the cases, that means 100,000 people are unjustly imprisoned. By scaling back the criminal codes, so that the total number of people prosecuted and imprisoned is reduced, policymakers could also reduce the number of innocent persons mistakenly imprisoned.
Reform Measures
Of course, overcriminalization can be addressed in many ways. The following are three possible routes to correcting the system.
Override the Old Maxim That “Ignorance of the Law Is No Excuse”
It is absurd and unjust for the government to impose a legal duty on every citizen to “know” all of the mind‐boggling rules and regulations that have been promulgated over the years. The old maxim that “ignorance of the law is no excuse” only makes sense when the criminal law covers conduct that is plainly and inherently wrongful, such as murder and theft.
To illustrate the rank injustice that can occur, take the case of Carlton Wilson, who was prosecuted because he possessed a firearm. Wilson’s purchase of the firearm was perfectly legal. Years later, a judge issued a restraining order against Wilson during his divorce proceedings. He didn’t know that meant he had to give up the firearm. When Wilson protested that the judge never informed him of that obligation and that the restraining order itself said nothing about firearms, prosecutors shrugged, “ignorance of the law is no excuse.” Although the courts upheld Wilson’s conviction, Judge Richard Posner filed a dissent: “We want people to familiarize themselves with the laws bearing on their activities. But a reasonable opportunity doesn’t mean being able to go to the local law library and read Title 18. It would be preposterous to suppose that someone from Wilson’s milieu is able to take advantage of such an opportunity.” Judge Posner noted that Wilson would serve more than three years in a federal penitentiary for an omission that he “could not have suspected was a crime or even a civil wrong.”
Policymakers should override the “ignorance‐is‐no‐excuse” maxim by enacting a law that requires prosecutors to prove that regulatory violations are “willful” or, in the alternative, that permits defendants to plead a good‐faith belief in the legality of one’s conduct. The former rule is already in place for our complicated tax laws. It should also shield unwary Americans from all laws and regulations as well.
Strengthen the Rule of Lenity
Even if there were only a few crimes on the books, the terms of our criminal laws ought to be drafted with precision. After all, there is little difference between a secret law and a published regulation that cannot be understood. The American Revolutionaries believed in the Latin maxim nullum crimen sine lege, which means there can be no crime without a law. In other words, people can be punished only for conduct previously prohibited by law. That principle is clearly enunciated in the ex post facto clause of the Constitution (Article I, Section 9). But the purpose of that clause can be subverted if the legislature can enact a criminal law with vague terms that can be interpreted broadly by prosecutors or judges. Such a law would not give citizens fair warning of the prohibited conduct.
One way to address the problem of vague laws that were previously enacted would be for legislators to direct the courts to follow the “rule of lenity.” That doctrine resolves legal uncertainties in favor of the accused, not the government. Unfortunately, the courts have not invoked that doctrine consistently.
Prohibit Administrative Agencies from Creating New Crimes
Beyond the thousands of criminal statutes enacted by legislatures, there are also thousands of regulations that carry criminal penalties. It is the responsibility of elected officials to carefully consider what infractions can result in a criminal conviction and prison time.
The case law that has thus far allowed the delegation of lawmaking has drawn criticism. U.S. district judge Roger Vinson, for example, has observed:
A jurisprudence which allows Congress to impliedly delegate its criminal lawmaking authority to a regulatory agency such as the Army Corps — so long as Congress provides an “intelligible principle” to guide that agency — is enough to make any judge pause and question what has happened. Deferent and minimal judicial review of Congress’ transfer of its criminal lawmaking function to other bodies, in other branches, calls into question the vitality of the tripartite system established by our Constitution. It also calls into question the nexus that must exist between the law so applied and simple logic and common sense.
Making conduct criminal is a serious matter. It is a decision that ought to be made by the people’s elected representatives, whether in Congress, the state legislatures, or city councils.
Conclusion
Political observers have noted that criminal justice reform is one of the few policy areas that is now finding support from across the political spectrum. On the left, law professor Michelle Alexander, author of The New Jim Crow: Mass Incarceration in the Age of Colorblindness, tells her students that even though she has earned fancy degrees, she is a criminal. She challenges others to come clean as well. After all, just because a person has not been caught does not mean she is not a criminal in the eyes of the law. Alexander believes reform will happen when more people come to terms with their own “criminality.” On the right, U.S. circuit judge Alex Kozinski makes a similar point in his article, “You’re (Probably) a Federal Criminal.” Most Americans are criminals, but don’t know it, he writes.
There are some indications that the policy climate is becoming more receptive to fundamental reform. A recent cover story in Harper’s was titled, “Legalize It All: How to Win the War on Drugs.” A few weeks later, a cover story in The New York Times Magazine posed the question, “Should Prostitution Be a Crime?” While these questions are still being debated, it seems clear that more and more people are coming to recognize that vices are not crimes that warrant the intervention of police powers. Over the past few years, policymakers in Vermont, Maine, Colorado, and New Hampshire have voted to repeal criminal laws regarding adultery. These developments are welcome, but policymakers should move more aggressively toward criminal code reform and prune the law books of unnecessary and unjust criminal provisions. An expansive criminal code is inimical to a free society.
Originally published by Cato Institute by Walter Olson | February 16, 2017
Congress and state lawmakers (and where appropriate, the president and executive branch law enforcement officials) should
• review existing law with an eye toward rolling back overcriminalization and replacing criminal penalties with civil sanctions where feasible; • enact reforms such as the model Criminal Intent Protection Act to bolster recognition of mens rea (punishment should ordinarily require a guilty state of mind, not inadvertent noncompliance) as well as the related mistake of law defense in criminal law; • codify the common law rule of lenity (ambiguity in law should be resolved against finding guilt), as Texas joined other states in doing in 2015; • devise safe harbor provisions that enable economic actors to avoid criminal liability by behaving reasonably and in intended compliance with the law; • limit agency discretion to create new crimes without an act of the legislature; • enact guidelines to strengthen judicial oversight of deferred prosecution agreements and nonprosecution agreements (explicit court approval, not the unilateral say‐so of government prosecutors, should be required for appointment of corporate monitors or the extension of time under supervision); • enact asset forfeiture reforms such as Rep. Jim Sensenbrenner’s (R‑WI) Due Process Act, including requiring that conviction be a prerequisite for forfeiture; • review and, where appropriate, reduce or coordinate per‐offense fines and sanctions to avoid levying penalties disproportionate to the gravity of misconduct; • prohibit, as a proposed New Mexico law would do, the allocation of settlement moneys (cy pres) to charities, nonprofits, or advocacy groups not themselves injured; • assign penalties, forfeitures, and settlement proceeds to the public treasury or, where appropriate in certain cases, to private parties who can show specific individual injury from the offense (penalties should not fund particular government agencies in ways that incentivize zealous enforcement or insulate the agencies from appropriations oversight); • prohibit the payment of public lawyers and forensics experts on contingency, that is, in ways dependent on case outcome or the magnitude of penalties (this principle should apply alike to career prosecutors, other staff public lawyers, experts, and outside law firms); existing contingency arrangements should be terminated;) and • impose transparent principles of selection and payment on outside contracting for legal services.
Prosecution: A Climate of Abuse
“The increasing criminalization of corporate behavior in America,” noted The Economist in 2014, “is bad for the rule of law and for capitalism.” In fact, the British weekly noted, prosecution as a means of regulating business in the United States has become “an extortion racket… . The formula is simple: find a large company that may (or may not) have done something wrong; threaten its managers with commercial ruin, preferably with criminal charges; force them to use their shareholders’ money to pay an enormous fine to drop the charges in a secret settlement (so nobody can check the details). Then repeat with another large company… .
“Perhaps the most destructive part of it all is the secrecy and opacity. The public never finds out the full facts of the case, nor discovers which specific people — with souls and bodies — were to blame. Since the cases never go to court, precedent is not established, so it is unclear what exactly is illegal. That enables future shakedowns, but hurts the rule of law and imposes enormous costs.”
Many abuses arise from prosecutors’ search for publicity and glory. These include splashy raids on offices and “perp walks” for executives, in situations where a simple request to cooperate would have sufficed, and manipulation of the media through leaks and prejudicial publicity.
The most natural way to address prosecutorial abuse might seem to be disciplinary sanctions based on traditional standards of legal ethics and applied by judges or bar panels. The trouble with relying on that solution is that few prosecutions of large businesses eventuate in trial before a judge. When a business does put up a fight, it sometimes wins big. In 2016, after the Department of Justice (DoJ) indicted the FedEx Corporation on charges that it had knowingly done business with illegal pharmacies, FedEx refused to settle; once before a judge, DoJ’s case collapsed in spectacular fashion and it dropped the charges midtrial. Much more often, however, businesses faced with a doubtful or overreaching prosecution take their lawyers’ advice and fold their hands and try to get the best possible settlement. For businesses based on trust or regulatory permission, the costs and risks of defying federal law enforcement — legal, reputational, and otherwise — are just too high. The government has the upper hand. That is one reason lawmakers need to step in.
Overcriminalization and the Need for Clear and Compliable Law
There are now more than 4,000 federal criminal offenses, up from approximately 165 in 1900, 2,000 in 1970, and 3,000 in 1982, along with hundreds of thousands of regulations backed up by criminal sanction.
Under the rule of law, citizens should be able to arrange their actions so as to avoid the commission of crimes. Yet the proliferation of highly technical laws, many going beyond the prohibition of intrinsically wrongful acts, makes it more likely that even a careful business with thousands of employees will commit some violations — especially if criminal infraction of regulations can be assessed without reference to mens rea (i.e., guilty intent).
As Sen. Ted Cruz (R‑TX) has written, “Congress should enact legislation that requires the government to prove the defendant knowingly violated the law — or that, at least, allows a ‘mistake of law’ defense — for certain classes of crimes that have no analog in the common law or that no reasonable person would understand to be inherently wrong. Where the government has criminalized non‐blameworthy conduct for regulatory purposes, ignorance of the law should be a valid defense to criminal liability.”
Four Outrageous Business Prosecutions
• “When I got there, there were people in SWAT attire that evacuated our entire factory.” Thirty federal agents raided the headquarters of Nashville’s legendary Gibson Guitar, carting away a fortune in wood and instruments and interrogating staff without benefit of a lawyer. The charge was that the company had used small quantities of imported wood without doing enough to ascertain suppliers’ compliance with a federal law called the Lacey Act. Gibson’s chief executive officer — who “had not received so much as a postcard telling the company it might be doing something wrong” — got a letter the next day warning him that if he so much as touched any guitar left in the plant he could be charged with a separate federal offense, with possible jail time, for each “violation.” After much press coverage sympathetic to the company, the feds settled for a relatively low $300,000, a sum far below what Gibson would have been likely to pay in legal defense, and returned the seized instruments. • The federal government extracted more than a billion dollars from Toyota in a settlement, even though its own engineers at the National Highway Traffic Safety Administration cleared the Japanese automaker of charges that its cars were subject to runaway acceleration. The penalties were mostly premised on minor regulatory infractions unrelated to any injuries or accidents. The Department of Justice’s press announcement employed language suggesting that the problem of mechanical acceleration had been real, though Washington had good reason to know better. • The federal government and various states, notably New York, launched enforcement actions against major banks whose actions, it was alleged, had helped propel the mortgage bubble and crash of 2008. No one really knew, and no court ever decided, whether the charges were true or what a suitable penalty level might be. When the dust settled, major banks had agreed to pay record settlements, some going to investors and consumers, but with hundreds of millions also going to nonprofit organizations that the various law enforcement officials saw as worthy causes — which, in the case of the Obama administration and the attorney general of New York, happened also to be close political allies. • Several small family‐owned retailers, including a Maryland dairy farm, a Detroit‐area grocery, and a North Carolina convenience store, violated the little‐known federal “structuring” law, which prohibits depositing money into banks in sums under $10,000 so as not to trigger a paperwork filing to the government, even when no tax or other laws are being evaded in the process. Federal agents seized the families’ bank accounts. With volunteer legal help, and amid public outcry, all three businesses managed to get their money back. But many other small businesses swept up by the same law, sometimes unable to pay lawyers because of the freeze on their assets, had by that time capitulated to large forfeitures.
The situation is even worse when laws are so vague that even reading them does not give fair notice of what they prohibit. Courts are inconsistent about applying the “rule of lenity” (ambiguities should be resolved against finding guilt) and the “void for vagueness doctrine” (laws can fail constitutional muster if they leave too much doubt about what they prohibit). As a result, certain areas — including federal mail and wire fraud, “honest services” fraud, antitrust law, and securities law — have proved particularly resistant to clarification.
In recent years, the U.S. Department of Justice has also sought to expand something called the “responsible corporate officer doctrine.” That doctrine allows the government to hold executives criminally liable for the sins of the corporation generally, even when those executives have not been shown to personally hold a guilty state of mind. Although the doctrine somehow passed muster at the U.S. Supreme Court in the cases of United States v. Dotterweich (1943) and United States v. Park (1975), it is ripe with potential for injustice.
Settlements and Slush Funds
Deferred prosecution agreements (DPAs) and their close relatives, nonprosecution agreements (NPAs), have become a major tool of white‐collar prosecution in recent years. Typically, in exchange for avoiding trial, a business defendant agrees to some combination of cash payment, agreement to change behavior, and submission to future oversight by DoJ. Often, DoJ assigns “monitors” with broad, vaguely defined powers to oversee the affairs of defendant companies and report back to Washington on an ongoing basis.
NPAs at the federal level date back only to 1992. But they have multiplied rapidly, from 1 or 2 a year in the nineties to more than 30 a year during the Obama administration. Since 2010, 16 of the largest U.S. businesses have come under Department of Justice supervision, with tens of billions of dollars extracted in settlements.
Notably, in these agreements, a business defendant may pledge to alter its future course of action in ways that a court would never have ordered had the case gone to trial but that the government is interested in extracting as concessions. These deals may have the effect, or even the aim, of helping or hurting third parties who have the ear of the government, such as customers or competitors of the targeted defendant.
“Without any adjudication to establish wrongdoing and without any judicial oversight, businesses have agreed through these settlements to remove or replace key officers and directors; to change sales, marketing, or compensation plans; and to appoint new officers or independent ‘monitors’ reporting to prosecutors but paid by the companies,” write James Copland and Isaac Gorodetski. The two argue that this process adds up to a “shadow regulatory state” lacking many of the administrative law protections of the visible regulatory state. Appointed monitors, in particular, can wield ill‐defined but wide‐ranging power with little accountability if it is put to heavy‐handed use.
What to do? The United Kingdom took an early lead with its 2013 Crime and Courts Act, which, among other provisions, directs judges to determine that the provisions of DPA equivalents are “fair, reasonable, and proportionate.” In the U.S. Congress, a proposal called the Accountability in Deferred Prosecution Act of 2014 attempted to pursue similar principles. Much more is needed if U.S. law is to catch up with the institutional reality of a Department of Justice that has become the nation’s most powerful business regulator without anyone’s having designed it that way.
At base, the case for civil liberties in the business world is much the same as the case for civil liberties generally. Businesses deserve impartial prosecution in the interests of justice, not merely scoring wins for the government; speedy trial and clear exposition of charges; determination of guilt on an individualized, not group, basis; no excessive punishment; protections against baseless search and seizure; and, in general, the full range of due process protections. The marketplace, like the rest of American society, deserves the full protections of the U.S. Constitution.
Frank, Theodore H., “Cy Pres Settlements.” Testimony before the House Judiciary Committee, Subcommittee on the Constitution and Civil Justice Examination of Litigation Abuse, 113th Cong., March 13, 2013.
Shapiro, Ilya, and Randal John Meyer. “Obama’s Weaponized Justice Department” (responsible corporate officer doctrine). National Review, October 30, 2015.
Originally published at National Review by JIM COPLAND & RAFAEL A. MANGUAL | 1/14/2017
Determining what is and what isn’t a crime should be part of the political process.
In his recent article in the Harvard Law Review, “The President’s Role in Advancing Criminal Justice Reform,” President Obama touts his administration’s successes while blaming Republican leadership for the failure to pass comprehensive criminal-justice reform, one of his administration’s last-year priorities. In the president’s words, the GOP leadership simply has “not yet allowed [reform bills] to come to the floor for a vote.”
The president’s interest in criminal-justice reform is laudable, but his assignment of blame is disingenuous: The lack of legislative progress owes to his unwillingness to compromise and the White House’s own outspoken opposition to Republican priorities. Specifically, the administration and left-leaning allies have opposed any federal efforts to address over-criminalization, or the rapid growth of criminal rules and regulations that punish conduct that is not intuitively wrong, often without regard for the actor’s intent.
One of the core drivers of over-criminalization is that 98 percent of the more than 300,000 crimes on America’s books were never voted on by Congress. We at the Manhattan Institute have dubbed this phenomenon “criminalization without representation.” In our view, it represents one of the most egregious usurpations of power by the state from the people in American history.
According to a count done in 2007, “only” 4,450 federal criminal statutes were on the books. The vast majority of criminally enforceable rules are set out in the Code of Federal Regulations. The CFR’s provisions are the products of decisions made by unelected, politically unaccountable bureaucrats. Contrary to what we were told by “Schoolhouse Rock,” very few criminal laws are debated and passed by Congress and signed by the president. Fewer than 2 percent of criminally enforceable federal rules come from our elected representatives.
This trend is not limited to the criminal law. According to the Competitive Enterprise Institute, for every law Congress passes, federal agencies create 18 rules.
Though this practice has been normalized over the past few decades with the growth of the modern regulatory state, it is a sharp departure from our nation’s philosophical roots. Elected representatives — and, by extension, those they represent — have not had a meaningful say in whether conduct should be criminalized. The Declaration of Independence specifically states that the government’s just powers are derived “from the consent of the governed.”
By taking crime creation almost entirely out of the political process, the government has stripped the governed of the opportunity to consent to, or not, the thousands upon thousands of outmoded, obscure, and often overreaching rules that litter the Federal Register — and threaten the unsuspecting citizen with criminal prosecution. The isolation of criminal lawmaking from the political process has also stripped citizens of the ability to hold anyone accountable for the creation of a given criminal offense.
The isolation of criminal lawmaking from the political process has also stripped citizens of the ability to hold anyone accountable for the creation of a given criminal offense.
Some might argue that we haven’t really been denied representation insofar as we can vote out the representatives who engage in the sort of delegation that created the labyrinth of crimes that now exists. Leave aside that we never formally agreed to depart from the traditional political process in the first place; the offspring of delegation outlives the delegators. To undo the consequences, congressional replacements would have to work through a process that their ousted predecessors weren’t required to work through in creating the problem they were elected to fix. That hardly seems efficient or fair.
While the president in his law-review article does identify problems worthy of serious congressional debate, the absence of any reference to the over-criminalization problem is discouraging, and that omission explains the failure of the Obama administration to enact meaningful criminal-justice reform. In light of President-elect Trump’s stated intent to reduce the regulatory burden faced by Americans, his administration ought to give serious consideration to supporting criminal-justice reform legislation that, in addition to addressing issues such as sentencing guidelines and intent requirements, would require Congress to act before a regulation can be criminally enforced. Doing so would put the power to criminalize back in the hands of the people’s representatives, where it has always belonged.
Mariza Ruelas, a single mother in Stockton, California, is facing possible jail time for offering to sell her homemade ceviche, a Latin American seafood dish, through a Facebook group in which users swap recipes and occasionally swap meals. A man took her up on her offer, but unbeknownst to Ms. Ruelas, he was a government agent working on an undercover sting operation targeting those who sell food without a license.
Ms. Ruelas’s case is part of a trend of “overcriminalization,” a term describing the rapid expansion, and increased complexity, of criminally enforceable rules and regulations regarding conduct that is not intuitively wrong.
At the federal level alone, there are an estimated 300,000 criminally enforceable rules and regulations. The five states we have studied to date in our “Overcriminalizing America” research project average more than 570 percent more sections in their criminal codes than in the Model Penal Code, the template established by leading legal scholars that forms the criminal-law basis for most states, and they are enacting, on average, more than 42 new crimes on the books, each and every year. More than three-fourths of these new crimes have been scattered around state statutes outside the criminal codes themselves. States also regularly outsource the creation of crimes to unelected commissioners, administrative agencies and even private licensing associations.
In 2013, California enacted the California Homemade Food Act, intended to help what the law called “cottage food operations” but still ensnared Ms. Ruelas. Any violation of the law’s multiple provisions — it numbers almost 7,000 words — is a misdemeanor. The law criminalizes food sales for anyone who has not registered paperwork with government authorities, and it prohibits such operations in kitchens that are also used to prepare family meals or wash dishes.
Clearly, Ms. Ruelas violated the express provisions of the act — even though she claims she meant to do nothing wrong. Traditionally, under American law and the British law upon which it is based, the state had to prove a “guilty mind” to prosecute an individual of a crime. Today, however, states regularly prosecute individuals for crimes that specify no necessary criminal intent. Fifteen states follow the Model Penal Code in mandating a default criminal-intent requirement where statutes are silent, but others, including California, assume that if the legislature fails to specify any level of criminal intent, no showing of intent is required.
Individuals acting in good faith like Mariza Ruelas should be able to go through daily life without having to worry about ending up behind bars. California could pursue steps to make its criminal law more manageable by enacting a criminal-intent default standard, requiring legislative votes on any regulatory crimes, or following the lead of other states that have held special legislative sessions or creating commissions to repeal outdated crimes and reform the criminal law. Special attention should be paid to the occupational licensing space.
While not entirely curative, adopting these reforms would represent a meaningful first step toward addressing the overcriminalization problem. Until then, well-meaning citizens like Mariza Ruelas will remain at risk of imprisonment for conduct as seemingly innocent as selling some homemade food for a few extra bucks.
James R. Copland is a senior fellow and Rafael A. Mangual a legal-policy project manager for the Manhattan Institute for Policy Research.
Originally published at Manhattan Institute by James R. Copland and Rafael A. Mangual | 6/15/16
US v. FedEx
EXECUTIVE SUMMARY
Each year, the Department of Justice (DOJ) and other federal agencies enter into scores of deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs) with businesses: DPAs involve cases in which criminal charges have been filed, and the DOJ asserts that judicial oversight is limited to ensuring their compliance with the Speedy Trial Act; NPAs are entered into without the filing of any formal criminal charges, and no judge ever reviews their contents. Faced with the threat of criminal charges, most companies agree to settle because the collateral consequences of a conviction (or often, even an indictment) are so harsh—in many cases, they amount to a corporate death sentence.
***UPDATE: Shortly after the publication of this report, which analyzes the government’s prosecution of FedEx in Case Study 3, the government suddenly dropped its case mid-trial. The government’s loss evidences the tenuousness of its theory of the case, but is unlikely to lead other companies to take their cases to trial. For more on this, see: Thank You FedEx, For Standing Up to the Feds
KEY FINDINGS
Since the beginning of 2010, 17 of America’s 100 largest companies, as ranked by Fortune magazine, have been operating under a DPA or an NPA; in 2015, the federal government entered into 100 such agreements—a record—and companies paid out more than $6 billion under their terms without any guilty plea or adjudication.
DPAs and NPAs that the government reaches with companies involve significant oversight and supervision—even dramatic restructurings of business practice, including changing top management personnel and compensation; wholesale modifications of sales and marketing strategies; and the hiring of “independent” monitors with vast oversight powers, paid out of corporate coffers but reporting to prosecutors.
DPAs and NPAs raise serious legal and policy issues, including those related to: national sovereignty; free speech; judicial oversight and transparency; and the desirability of deputizing private businesses to undertake law-enforcement activities.
Originally published at Cato Institute by Ilya Shapiro and Randal John Meyer
The explosion in criminal statutes is only a part of the problem of overcriminalization. The other side of the coin is prosecutorial discretion: a prosecutor’s official authority to charge certain offenses and not to charge others. The growth of criminal codes, state and federal, gives prosecutors more tools, which allows them to both “stack” charges and expand the reach of criminal code provisions to new, non-criminal facts.
Take for example several recent prosecutions under New Jersey’s official misconduct statute, a felony provision with a mandatory five-year, no-parole sentence.
On its face, the law simply prevents government officials from abusing their offices for personal gain. “Official misconduct” under the statute means an official’s act or omission “relating to his office but constituting an unauthorized exercise of his official functions, knowing that such act is unauthorized or he is committing such act in an unauthorized manner.” Prosecutors have used this broadly worded language in highly creative ways.
In one recent case, New Jersey Superior Court Judge Carlia M. Brady was charged with official misconduct and harboring a fugitive. Judge Brady went to the police on June 10, 2013 to report that her car was stolen and that her then-boyfriend, Jason Prontnicki, was likely involved. As it turned out, Prontnicki was wanted on an outstanding warrant for robbery. The police informed Judge Brady that she was obliged as an “officer of the court” to inform the police as to Prontnicki’s whereabouts. When Prontnicki showed up at her house for brief periods of time on June 10 and 11, Judge Brady informed Prontnicki that he could not stay with her and Prontnicki made clear his intentions to turn himself in with the help of counsel. After both incidents, Judge Brady called the police and left unreturned voicemails. On June 11, police arrested Prontnicki and Brady at her home.
Clearly Judge Brady had violated her duty to report the whereabouts of a wanted criminal suspect, right? The only problem is that such a duty doesn’t exist, either for citizens generally or for judges specifically.
In New Jersey, like most places, the enforcement of arrest warrants is the job of law enforcement officials, such as police. Indeed, the very idea of a judge enforcing the warrants she or her colleagues issue conjures up the ridiculous image of a robe-clad jurist chasing a fleeing suspect while wielding a wooden gavel. The state supreme court has even made clear that judges don’t have an official duty to effectuate arrest warrants.
Yet the prosecutor decided to charge Brady not only with harboring Prontnicki—a dubious move given her clear instructions for him to stay away, the absence of any assistance, and their understanding that he would turn himself in—but with official misconduct. In the prosecutor’s eyes, Brady’s judicial role created a special duty to report and her failure to do so constituted official misconduct—despite clear case law to the contrary and the fact that Judge Brady was on vacation from her official duties when the relevant acts occurred.
The misuse of New Jersey’s official misconduct statute isn’t limited to judges or even executive-branch officials, but reaches teachers.
In two cases, those of Adrian McConney and Nicole McDonough, high school teachers who had sex with adult students were charged with official misconduct. Neither had been accused of promising grade bumps or using their authority to control or initiate the sexual relationship. Because of this absence of the abuse of official power for some sort of quid pro quo, prosecutors in both cases looked to the administrative codes governing teacher conduct to invent a legal duty that was allegedly violated by consensual sexual relationships.
The administrative codes governing educators were not intended to provide the basis for criminal prosecution, and say as much expressly. In other words, these teachers’ extra-curricular activities may be firing offenses (and maybe not — we don’t want to get into employment law and union regulations) but they’re not crimes.
If the prosecutors’ logic were carried to its conclusion, these codes—which require such innocuous things as teachers’ maintaining professional appearance at all times—could result in five-year mandatory no-parole sentences. Every municipal bureaucrat would now have the power to write criminal law via civil guidance; any principal who has a personal conflict with a teacher could threaten prosecution with a savvy interpretation of administrative rules.
Moreover, words in official government guidance would lose all meaning: if the state says that a particular civil code will not be the basis for criminal prosecution, that should be a good indicator to a reasonable person that he or she will not run afoul of criminal laws by violating that code. Due process of law demands sufficient notice of what is criminal before a statue is applied against a defendant.
In both the federal and state criminal-justice systems, prosecutors are quite properly entrusted with discretion to charge appropriate offenses in appropriate cases—but that discretion is abused when the law is made to stretch to cover obviously licit conduct. Whatever one thinks of a judge who fraternizes with shady characters or teachers who have sex with adult students, New Jersey has not seen fit to criminalize either of these behaviors. It’s not the job of prosecutors to gap-fill the criminal code by dubiously extending the reach of criminal provisions such that anything that hints of social impropriety must be criminal.
It’s bad enough when legislatures pass laws to criminalize behavior of which they morally disapprove—as Bill Buckley said, not everything that’s bad should be illegal—but when prosecutors effectively write their own criminal codes, it’s the antithesis of the rule of law.
Originally published at Manhattan Institute by James R. Copland and Rafael A. Mangual | 10/12/15
On Oct. 1, a bipartisan group of senators including Charles E. Grassley (R-Iowa), Dick Durbin(D-Ill.), and Cory Booker (D-N.J.), announced a plan to reduce mandatory criminal sentences under federal law for nonviolent offenders and help former prisoners reintegrate into society. Such an effort is overdue, but insufficient to fully remedy the overreach of federal criminal law. To do so, lawmakers must also bring attention to what we and other reformers have called “overcriminalization” in federal code.
As Sen. Orrin Hatch (R-Utah) pointedly asserted in a Sept. 21 statement, ordinary citizens and small business owners are perpetually at risk of unknowingly violating a federal criminal code that lists some 5,000 crimes in the statutes and creates 300,000 more through agency regulations. Legal analyst and litigator Harney Silverglate estimates that the average American commits three federal felonies a day.
James Madison wrote in the Federalist Papers that it would be “of little avail to the people . . . if the laws be so voluminous that they cannot be read.” Not only is our 80,000-page Code of Federal Regulations far beyond the capacity of ordinary citizens to read and understand, much conduct criminalized under federal law is not intuitively wrong. Consider the following example from Hatch: It is punishable by up to six months in federal prison—six months!—to walk a dog in a federal park area on a leash longer than 6 feet.
Traditional legal principles would protect our hypothetical dog walker. As is still the law in several states, the government traditionally had to show a “guilty mind” (the Latinate legal term is mens rea) to convict someone of a crime. But a joint study of the 2005–06 Congressional session by the Heritage Foundation and the National Association of Criminal Defense Lawyers found that 57 percent of the 446 non-violent criminal offenses proposed lacked an adequate criminal-intentrequirement and 23 percent had no criminal-intent requirement whatsoever.
A vast and complex criminal code, crimes that are not self-evidently wrong, and no required showing of criminal intent for conviction combine to place ordinary citizens in jeopardy for innocent mistakes. For example, former automobile racer Bobby Unser is a three-time winner of the Indianapolis 500, but the sports legend is also a convicted federal criminal. His crime? While driving snowmobiles near Unser’s ranch, he and a friend were caught up in a blizzard, eventually having to abandon their vehicles to survive. Unbeknownst to Unser, they had wound up in a protected federal forest—and driving a vehicle in this forest is a crime that, like the dog-walking rule, is punishable by up to six months in prison. A federal judge and an appeals panel both determined that Unser was guilty because the government did not have to establish criminal intent under the statute.
Fortunately, Unser paid a small fine and avoided jail time, but a less-well-heeled defendant may not have been so lucky. Indeed, average Americans, small business owners, and family farmers are most at risk from overcriminalization, since they cannot afford the teams of elite lawyers that large corporations and billionaires employ to keep themselves out of trouble.
Tackling the size and complexity of the criminal code is a large undertaking, but Congress could take a major step by simply enacting a default rule that presumes the government must show criminal intent. Many states have such a rule—most recently Ohio, which enacted default mens rea legislation in late 2014.
A default criminal intent standard would not tie Congress’s hands to enact laws that made certain actions strictly criminal, even for innocent mistakes. Congress would just have to say so.
To be sure, many federal regulations have a valid purpose, but if the proscribed conduct is not obviously wrong, enforcement should generally be civil. There’s a reason to keep vehicles out of some federal forests, but do we really need to criminalize unknowing incursions during snowstorms, especially when we are talking about possible jail time and “convicted criminal” status?
Protecting citizens from criminal convictions for behaviors most people would not intuitively deem criminal should, like sensible sentencing reforms, appeal to lawmakers on both ends of the political spectrum. Senator Hatch deserves kudos for calling attention to this issue. Let’s hope that the members of both parties were listening.
Originally published at Boston Herald by Jordan Richardson | 6/8/15
Overcriminalization, the overuse or misuse of criminal law to address societal problems, is a troubling phenomenon that touches every segment of society. It manifests itself in a variety of ways, including overly broad definitions of criminal acts, excessively harsh sentencing and criminal sanctions for simple mistakes or accidents.
However, overcriminalization has a more tangible aspect beyond legislation and legal theory: For every problematic law or criminal procedure, there is a victim with a story to tell.
Those victims include three fishermen in Florida sentenced to more than six years in prison for importing lobsters packed in plastic rather than paper, a North Carolina man jailed for 45 days for selling hot dogs without a license, and an autistic teenager from Pennsylvania threatened with wiretapping charges after he recorded being bullied by classmates.
American citizens all too often find themselves trapped by the very system that they assumed existed for their protection, and prosecuted for crimes that most people would not even recognize as criminal offenses.
Reporting stories of people who have been needlessly and callously caught up in the criminal justice system has a two-fold benefit: First, it informs the public of the serious nature of overcriminalization and how it could equally harm them too. Second, it exposes public officials and law-enforcement officers who engage in misbehavior or exercise terrible judgment.
Consider the following examples:
• Lazaro Estrada was arrested and charged with obstruction of justice for simply filming a Miami police officer who arrested his friend. Despite the fact that citizens should be presumptively free under the First Amendment to film officers in public places, Estrada faced significant punishment for turning on his camera. After his video of the incident went viral, the charges against Estrada were dropped.
• Arnold Abbott, a 90-year-old charity worker from Fort Lauderdale, Fla., was threatened with arrest and a $500 fine for feeding homeless people in the local city park. A city ordinance required Abbott to comply with strict food handling and facility regulations — a mandate that would have made it nearly impossible to feed hungry people. Publicity from major news outlets soon prompted city officials to allow Abbott to continue his charitable works.
• Shaneen Allen, a single mother from Pennsylvania, was arrested after being pulled over for a traffic violation and the officer was informed that she had a handgun in her car. Allen, who had legally registered the gun in her home state, mistakenly assumed that it was legal for her to travel with it for protection across state lines. Her mistake could have sent her to prison for three years. After immense media pressure, the prosecutor allowed Allen to enter a diversion program, and New Jersey Gov. Chris Christie subsequently pardoned her.
Originally published at National Review by Timothy Head & Matt Kibbe| 5/21/15
Yates v. US
When three missing fish can land someone in jail on felony charges, reform is needed.
‘There is no one in the United States over the age of 18 who cannot be indicted for some federal crime,” retired Louisiana State University law professor John Baker told the Wall Street Journal in July 2011. “That is not an exaggeration.”
That may sound unbelievable, but this is a lesson some Americans have, sadly, learned the hard way, through no real fault of their own.
John Yates, for example, built his career as a commercial fisherman. In August 2007, Yates and his crew were fishing in the Gulf of Mexico off the Florida coast when a state conservation officer, who was also a deputized federal agent, boarded his vessel to inspect their catch of red grouper.
After inspecting some 3,000 fish, the official identified 72 red grouper that did not meet the minimum 20-inch conservation standard and issued a citation from the state. He ordered Yates to bring the undersized catch when he returned to port.
When Yates returned to port the next day, armed federal agents stood by while inspectors reexamined his catch, finding only 69 fish under the minimum standard. Federal officials accused Yates of destroying evidence — the missing three red grouper — related to a federal investigation.
“Nearly three years later, the federal government charged me with the destruction of evidence — yes, fish – to impede a federal investigation. I was subsequently arrested at my home. I have been blacklisted by boat owners, who fear federal investigations similar to mine,” Yates wrote last year. “I am now unable to make a living doing what I love to do.”
In August 2011, Yates was convicted and sentenced to a 30-day jail term and three years of supervised release under a provision in the 2002 Sarbanes–Oxley law, passed in the wake of the Enron scandal. The law’s “anti-shredding” provision, meant to apply to the destruction of documents or files related to a federal financial-fraud investigation, has nothing to do with fish.
Thankfully, the U.S. Supreme Court agreed. In February, it threw out the conviction. And although she strangely voted to uphold the conviction, Justice Elena Kagan surmised that Yates’s unusual case “is unfortunately, not an outlier, but an emblem of a deeper pathology in the federal criminal code.”
That “deeper pathology” is overcriminalization.
In Ayn Rand’s magnum opus, Atlas Shrugged, Doctor Floyd Ferris, one of the book’s main antagonists, told Hank Reardon, a proud producer who had earned the ire of crony special interests and government officials, that “there’s no way to rule innocent men.”
“The only power government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them,” said Ferris. “One declares so many things to be a crime that it becomes impossible for men to live without breaking laws.”
Fiction has become reality.
The United States now has some 300,000 federal regulations, and this long spool of burdensome and complex red tape grows every year. What’s more, there are about 4,500 federal criminal statutes on the books carrying fines or prison terms for offenders.
There are so many regulations and criminal statutes on the books that a civil-liberties expert and lawyer, Harvey Silverglate, thinks that the average American commits three felonies a day, and they often are not even aware they are breaking the law. That is, not until a federal agency begins an investigation and they are indicted.
House Judiciary Committee chairman Bob Goodlatte (R., Va.) is taking a hard look at federal overcriminalization. At a recent criminal-justice event supported by the Coalition for Public Safety, Representative Goodlatte, in a video message, told attendees, “There is a growing consensus across the political spectrum that our criminal-justice system is in need of reform.”
“The issue of overcriminalization is an issue of liberty,” Goodlatte said. “We must work together to improve our criminal-justice system so that it works fairly and efficiently and reduces crime across the United States.”
Goodlatte, in the previous Congress, put together a bipartisan overcriminalization task force, led by Crime, Terrorism, Homeland Security, and Investigations Subcommittee chairman Jim Sensenbrenner (R., Wis.) and ranking member Bobby Scott (D., Va.), to examine federal criminal laws and make recommendations for reform. The task force held ten hearings.
A civil-liberties expert and lawyer thinks the average American commits three felonies a day, often without knowing that he is breaking the law.
Although similar efforts have failed in the past, this is a cause around which both parties should come together. Our prisons are overcrowded, with far too many nonviolent offenders who have little or no criminal history taking up space that should be reserved for more serious and violent criminals.
Tackling overcriminalization could help reduce skyrocketing prison costs, restrain the out-of-control regulatory state, and end families’ being needlessly ripped apart by unnecessary, out-of-date, or excessive federal statutes.
Most importantly, Goodlatte is right: This is an issue of liberty. Not only would rolling back this brand of big government send a positive message to the country; addressing overcriminalization in a meaningful and substantive way is simply the right thing to do.
— Timothy Head is the executive director of the Faith & Freedom Coalition. Matt Kibbe is the president of FreedomWorks and author of the New York Times best-seller Don’t Hurt People and Don’t Take Their Stuff. Both are members of The Coalition for Public Safety.
On April 22, a House Judiciary subcommittee approved a bill that would send parents to jail for at least three years if they learn of drug activity near their children and fail to report it to authorities within 24 hours.
A brief pause for reflection might lead one to wonder whether this is a good idea, especially in jurisdictions such as Baltimore, where gangland killings of government witnesses are all too common. But when it comes to the criminal law, Congress rarely pauses for reflection any more.
Earlier in April, the bill’s author, Rep. James Sensenbrenner (R.-WI), floated what might be called the “Jail Janet Jackson” initiative. Instead of enforcing the Federal Communications Commission’s indecency regulations with fines on broadcasters, according to Sensenbrenner, those who violate the regulations should be subject to arrest and imprisonment: “I’d prefer using the criminal process rather than the regulatory process,” Sensenbrenner said, “Aim the cannon specifically at the people committing the offenses.”
There are serious problems with Sensenbrenner’s proposal: the FCC’s indecency standards are notoriously vague and of dubious constitutionality. How could a policy that says “misspeak and go to jail” not end up chilling constitutionally protected speech?
But there’s an even more fundamental question to ask: is this an appropriate use of the “cannon” of the criminal sanction? Do we really want to lock people up for bad taste?
Sensenbrenner’s jail‐centric approach reflects a broader social phenomenon, and a troubling one. The criminal sanction is supposed to be a last resort, reserved for the most serious offenses to civil peace. But more and more, it’s becoming government’s first line of attack: a way for lawmakers to show that they’re serious about whatever the perceived social problem of the month is. We’re all familiar with the cranky uncle who brays at the TV: “lock ‘em all up, I say!” That attitude makes for entertaining talk radio. But what’s frightening is that it’s increasingly becoming a basis for public policy.
Examples of reflexive criminalization abound. The American Horse Slaughter Prevention Act, a bill to prevent the transportation of horses for human consumption, currently has 80 cosponsors in Congress (nothing against horses, but is this a huge problem?) If signed into law, it will join such illustrious federal crimes as the interstate transport of water hyacinths, trafficking in unlicensed dentures, and misappropriating the likeness of “Woodsy Owl” and his associated slogan “give a hoot, don’t pollute” (punishable by up to six months in prison).
Because Congress criminalizes unreflectively, the federal criminal code has become vast and incomprehensible. A research team led by Professor John Baker of Louisiana State Law School recently estimated that there are now over 4,000 separate federal criminal offenses. That number, inexact as it is, vastly understates the breadth of the criminal law, since the federal criminal code in turn incorporates by reference tens of thousands of regulatory violations never voted on by Congress.
And this burgeoning Culture of Criminalization has effects all the way down the law enforcement ladder, as local police increasingly use handcuffs and jail to deal with situations that clearly don’t warrant it. Last September, at a Washington D.C. bus stop, a Metro Transit officer forced a pregnant woman to the ground and handcuffed her for talking too loudly on her cell phone. In December, a 10‐year‐old Philadelphia schoolgirl was handcuffed, put in the paddy wagon, and taken to jail for having a pair of scissors in her bookbag.
One of our most destructive overcriminalization binges occurred during the “Just Say No” Era when Congress embraced mandatory minimum sentencing as a means to deal with the use of illicit drugs. Reasonable people can disagree about whether and how much of a threat drug abuse represents. But what’s clear is that making prison the solution to drug abuse has had staggering social costs. There are now eight times as many women in prison as there were in 1980, and the drug war is a key factor in driving the incarceration rate. In 2001 the average federal drug trafficking sentence was 75 months, more than double the average manslaughter sentence. In addition to sending parents to jail for failure to testify against drug dealers, Sensenbrenner’s bill would extend and enhance mandatory minimum drug penalties, adding to the social costs of the drug war.
Sensenbrenner is right to compare the criminal law to a “cannon”: the criminal sanction is heavy artillery. It ought to be reserved for those behaviors that warrant society’s strongest condemnation and the loss of liberty that such behavior merits. Wielding the cannon indiscriminately causes tremendous collateral damage.
Decrying overcriminalization does not mean being soft on crime. Just the opposite: being tough on crime requires making intelligent distinctions between conduct that truly threatens the public and conduct better handled by fines or civil law, to say nothing of conduct that’s really none of the government’s business. Those who can’t make those distinctions, far from being tough on crime, actually weaken the moral force of the criminal law. That’s a crime in itself.
Originally published at the National Review by George Will | April 9, 2015
The hyper-proliferation of criminal statutes has put too much power in the hands of prosecutors.
What began as a trickle has become a stream that could become a cleansing torrent. Criticisms of the overcriminalization of American life might catalyze an appreciation of the toll the administrative state is taking on the criminal-justice system, and liberty generally.
In 2007, professor Tim Wu of Columbia Law School recounted a game played by some prosecutors. One would name a famous person — “say, Mother Teresa or John Lennon” — and other prosecutors would try to imagine “a plausible crime for which to indict him or her,” usually a felony plucked from “the incredibly broad yet obscure crimes that populate the U.S. Code like a kind of jurisprudential minefield.” Did the person make “false pretenses on the high seas”? Is he guilty of “injuring a mailbag”? TOP ARTICLES2/5READ MOREWarren Rips Bloomberg for AllegedlyTelling Pregnant Employee to ‘Kill’ It
In 2009, Harvey Silverglate’s book Three Felonies a Day demonstrated how almost any American could be unwittingly guilty of various crimes between breakfast and bedtime. Silverglate, a defense lawyer and civil libertarian, demonstrated the dangers posed by the intersection of prosecutorial ingenuity with the expansion of the regulatory state.
In 2013, Glenn Harlan Reynolds, University of Tennessee law professor and creator of Instapundit, published in The Columbia Law Review “Ham Sandwich Nation: Due Process When Everything is a Crime.” Given the axiom that a competent prosecutor can persuade a grand jury to indict a ham sandwich, and given the proliferation of criminal statutes and regulations backed by criminal penalties, what becomes of the mens rea principle that people deserve criminal punishment only if they engage in conduct that is inherently wrong or that they know to be illegal?
Now comes “Rethinking Presumed Knowledge of the Law in the Regulatory Age” (Tennessee Law Review) by Michael Cottone, a federal judicial clerk. Cottone warns that as the mens rea requirement withers when the quantity and complexity of laws increase, the doctrine of ignorantia legis neminem excusat — ignorance of the law does not excuse — becomes problematic. The regulatory state is rendering unrealistic the presumption that a responsible citizen should be presumed to have knowledge of the law.
There are an estimated 4,500 federal criminal statutes — and innumerable regulations backed by criminal penalties that include incarceration. Even if none of these were arcane, which many are, their sheer number would mean that Americans would not have clear notice of what behavior is proscribed or prescribed. The presumption of knowledge of the law is refuted by the mere fact that estimates of the number of federal statutes vary by hundreds. If you are sent to prison for excavating arrowheads on federal land without a permit, your cellmate might have accidentally driven his snowmobile onto land protected by the Wilderness Act.
Regulatory crimes, Cottone observes, often are not patently discordant with our culture as are murder, rape, and robbery. Rather than implicating fundamental moral values, many regulatory offenses derive their moral significance, such as it is, from their relation to the promotion of some governmental goal.
The presumption of knowledge of the law is, Cottone argues, useful as an incentive for citizens to become informed of their legal duties. Complete elimination of the presumption would be a perverse incentive to remain in an ignorance that might immunize a person from culpability. But “there can be no moral obligation to do something impossible, such as know every criminal law,” let alone all the even more numerous — perhaps tens of thousands — regulations with criminal sanctions. The morality of law, Cottone argues, requires laws to be, among other things, publicized, understandable and not subject to constant changes. Otherwise everyone would have to be a talented lawyer, “a result hardly feasible or even desirable.”
Overcriminalization, says professor Reynolds, deepens the dangers of “a dynamic in which those charged with crimes have a lot at risk, while those doing the charging have very little ‘skin in the game.’” With a vast menu of crimes from which to choose, prosecutors can “overcharge” a target, presenting him or her with the choice between capitulation-through-plea-bargain or a trial with a potentially severe sentence.
Given the principle — which itself should be reconsidered — of prosecutorial immunity, we have a criminal-justice system with too many opportunities for generating defendants, too few inhibitions on prosecutors, and ongoing corrosion of the rule and morality of law. Congress, the ultimate cause of all this, has work to undo.
Originally published at The Heritage Foundation by Paul Larkin Jr. and Michael Mukasey | February 12, 2015
What has happened to federal criminal law in recent decades? Several former senior Department of Justice officials have expressed their concern with the path we have taken,[1] along with the American Bar Association,[2] numerous members of the academy,[3] journalists,[4] and other organizations like The Heritage Foundation.[5] We agree with their considered opinion that overcriminalization is a serious problem and needs to be remedied before it further worsens the plight of the people tripped up by it and further injures the public interest.
To begin with, the sheer number of federal laws that impose criminal penalties has grown to an unmanageable point. The Department of Justice and American Bar Association have been unable to tally the correct number.[6]
Proliferation of Federal Crimes
The Congressional Research Service reportedly has been unable to come up with a definitive total of federal criminal laws; the nearest they could come was to say they number in the thousands.[7] They are by no means confined to the federal criminal code—Title 18, itself a weighty volume—but are scattered among the laws contained in the 51 titles or subject-matter volumes of the federal code and the hundreds of thousands of regulations that are supposed to implement those laws.[8] The result is that there are more criminal laws than anyone could know.
Indeed, federal crimes are not confined to offenses against the domestic laws of the United States. Under the Lacey Act, it is a crime to import into the United States animals or plants gathered in violation of the laws of the countries from whence they came.[9]
In a sense, you can understand such a law from the standpoint of a conservationist who wishes to guard against the extinction of species of animals or destruction of the world’s forests. But one result of that seemingly well-meaning legislative effort was a raid by federal agents on the premises of the Gibson Guitar Company for importing wood for guitar frets that was allegedly exported in violation of the laws of India and Madagascar (the latter, by the way, are not even written in English).[10] It is utterly unreasonable to require anyone to know the laws of every other nation in order to avoid criminal liability.
There have also been questionable prosecutions under domestic federal criminal laws. Consider the case of Lawrence Lewis. Mr. Lewis grew up in difficult circumstances but escaped the fate of two brothers, who died in prison. A blue-collar employee who worked his way up to the position of head engineer at a military retirement home, Lewis was charged with felonious pollution of a navigable waterway, a charge that summons the image of dumping toxic chemicals into a river.[11]
That image, however, has nothing to do with the facts. Mr. Lewis was simply using a facially reasonable procedure—one that he had been instructed to use and had used uneventfully for years—to clean up occasional toilet overflows in the hospice area of the home (caused by adult diapers clogging the pipes) by spraying water from a hose to direct the waste into a sewer that led to a small creek that he believed went to the District of Columbia’s publicly owned treatment works but that, unbeknownst to him, emptied into Rock Creek and ultimately into the Potomac River. The federal government charged him with a felony for making a reasonable mistake.
Even setting aside the fact that what goes on alongside the Potomac in Washington makes the occasional runoff from a toilet at a military retirement home seem hygienic by comparison, how could this happen? The Lewis case is an example of the result of a process that started out with good intentions but has taken us far down the road that the old proverb tells us is paved with good intentions.
Before the 20th century, to the extent that there were federal criminal laws, they concerned acts that everyone knew and understood were morally wrong.[12] Accordingly, the old saw that ignorance of the law is no excuse was one that could be uttered seriously and without evoking a sarcastic snicker.
At the beginning of the 20th century, laws were adopted that had the effect of protecting the purity of food, the safety of workers, and other goals included in the rubric of health and safety.[13] Violations of some of those laws were made criminal, and some permitted conviction without a finding of criminal intent: That is, all that had to be proved was that the defendant had done the act. Courts allowed that but said it was permissible only in the kinds of cases that involved protecting the health and safety of the community. The courts’ rationale for permitting this departure from usual standards was that the stakes—public health and safety—were so high that protecting public welfare was paramount.[14]
Many may well have reasoned that people whose conduct affected health and safety should be bound to pay particular attention and that if they let their intention flag, it was not unreasonable to hold them to a strict standard of something less than criminal intent. In the process, however, the whole notion of consciousness of wrongdoing in the criminal law was obscured, although the penalties of loss of freedom or property, and moral taint, remained.[15]
Achieving Institutional Reform Through Prosecution
In addition to the passage of statutes and regulations, another phenomenon that started in the setting of civil litigation but has since spilled over into the criminal law is the practice of bringing prosecutions to achieve institutional reform rather than seeking legislation that would have that end. Litigators in what are referred to loosely as civil rights or civil liberties issues have long known that they could often achieve their goals more quickly and with greater certainty through litigation than through legislation. One obvious example was a Connecticut statute that banned the sale of contraceptives. The state had not enforced the statute for years,[16] but a plaintiff eventually persuaded the Supreme Court that the law violated a constitutional right to privacy.[17]
That practice has now spread to criminal cases. Take, for example, prosecutions for promoting drugs for uses other than those for which the Food and Drug Administration has approved them, even though the targets of the promotion are not laymen but physicians who exercise independent judgment about whether to prescribe a drug or not. The prescribing of a drug for a purpose other than the one for which it was approved is not an offense at all; indeed, physicians may help to make medical progress while curing their patients if they are able to see new uses for pharmaceuticals. Yet promoting drugs for what is called off-label use is a felony.
Peter Gleason, a Maryland psychiatrist who regularly served poor and underserved constituencies, delivered a series of paid lectures at medical conventions describing success he had had with off-label use of certain drugs, and he was prosecuted for doing so. He did not have the resources to fight, so he pleaded guilty to a misdemeanor and paid a small fine. Nonetheless, the guilty plea ruined his medical practice. The Department of Health and Human Services told Dr. Gleason that his conviction excluded him from all medical programs, and virtually all of his patients were on Medicare or Medicaid.[18]
Another defendant in the same case went to trial and prevailed when the U.S. Court of Appeals for the Second Circuit held that the First Amendment protects the right to communicate truthful information about the benefits of pharmaceuticals, even off-label benefits.[19] Dr. Gleason, however, did not benefit from that ruling because his desperation over loss of his practice led to his suicide before the Second Circuit decided the case. The Gleason case is proof that good intentions can go haywire.
Nonprosecution and Deferred Prosecution Agreements
Another factor contributing to the proliferation of criminal regulations has been the advent of nonprosecution and deferred prosecution agreements with corporate defendants. The Department of Justice often uses settlements known as nonprosecution or deferred prosecution agreements to resolve criminal cases. It may seem paradoxical that agreements whereby corporations escape actual prosecution themselves contribute to the efflorescence of criminal laws and proceedings, but the process itself has pernicious results.
Consider the corporation investigated for a possible violation of criminal law. For most corporations, particularly those that are publicly traded, otherwise have a public profile, or do business in a highly regulated industry, a conviction can be crippling,[20] but an indictment alone can also have catastrophic results.[21] As a result, many large corporations negotiate deferred prosecution or nonprosecution agreements that permit them to escape the filing of a criminal charge in return for payment of a sizable penalty as a settlement.
The size of these settlements has made both state and federal governments begin to look upon prosecutors’ offices, where the interests of justice are supposed to govern, as profit centers. In some jurisdictions, proceeds of those penalties are used in whole or in part by law enforcement agencies to conduct activities or purchase equipment. In virtually all jurisdictions, including the federal government, the dollar value of penalties extracted from corporations is featured by law enforcement agencies and departments as a principal measure of their effectiveness and worth.
Moreover, as pointed out by Matthew Fishbein in the New York Law Journal, the very size of many of these settlements has raised the expectation of lay observers that individual defendants will be prosecuted as well; those expectations are then disappointed when no such prosecutions follow.[22] The reason is that corporate settlements do not challenge the government’s legal theories or its evidence, but the government is wary of bringing charges against individual defendants because people who stand to lose their freedom often go to trial and prevail when the government’s case is tested in court.
The Department of Justice often goes beyond even the extraction of large settlements and has insisted on changes in corporate governance through the imposition of standards or monitors and even changes in corporate personnel as the price of avoiding criminal charges.[23] The Department of Justice makes that demand even though those remedies would not be available as part of a sentence after conviction.[24] To that extent, the running of corporations is taken out of the hands of shareholders and directors and placed instead in the hands of prosecutors.
Proposals for Reform
If these unhappy results of the proliferation of criminal laws and prosecutions are to change, the changes will not come from courts, which have upheld criminal penalties even without a showing of intent against claims of denial of due process.[25] Obviously, prosecutors have no incentive to make changes in a system that rewards their excesses. The changes will have to come from Congress, which itself has been the source of much of the problem, both in the laws it passes and in the standards it uses to measure prosecutorial success.[26]
There have been many proposals for reform, some with merit.
One is for a statute requiring proof of guilty knowledge in any criminal prosecution unless Congress has legislated specifically to the contrary.
Another is that administrative agencies be required to list and make generally available in full text all regulations that carry potential criminal penalties, and perhaps that Congress then be required to ratify any such regulation before it can provide the basis for a criminal prosecution.
Finally, Congress should adopt a general, across-the-board defense of mistake of law, requiring that a defendant be acquitted if he can prove by a preponderance of evidence that he believed reasonably that what he did was not a crime.[27]
If we are to take pride in the claim that we are a nation governed by law, the criminal law must be sensible and accessible, not simply a trap for the unwary.—Michael B. Mukasey, Partner, Debevoise & Plimpton, served as 81st Attorney General of the United States from 2007–2009 and as a judge on the U.S. District Court for the Southern District of New York from 1988–2006. Paul J. Larkin, Jr., is Senior Legal Research Fellow in the Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation.
Originally published by Cato Institute by David Boaz | February 2, 2015
As 2014 drew to a close, the mainstream media were full of laments about the “least productive Congress.” Or more precisely that the just‐concluded 113th Congress was the secondleast productive Congress ever (since the mid‐1940s when these tallies began), second only to the 2011-12 112th Congress. But what’s the definition of a “productive Congress”? One that passes laws, of course, lots of laws. Congress passed only 297 laws in the past two years, exceeded in slackerdom only by the 284 laws passed in the previous two years of divided government.
All this productivity analysis assumes that passing laws is good, and passing more laws is better. But as the year ended, we also saw plenty of indications that many, perhaps most, laws — that is, most mandates, bans, regulations, taxes, subsidies, boondoggles, and transfer programs — do more harm than good.
Two articles in the Washington Post on December 6 reminded me that too many laws impede enterprise, charity, innovation, and growth.
Brian Levy is vice president of a company that works to develop and fund energy efficiency and renewableenergy projects. Inspired by the “micro‐houses” movement, he decided to build his own tiny house in the expensive District of Columbia. For $77,000 he built a house that’s 11 feet wide and 22 feet long, with 210 square feet of living space. It has a galley kitchen and a full‐size bed, the Post reports — although he can’t sleep overnight there because of a provision in District law.” A 210‐squarefoot house wouldn’t be my cup of tea. But it’s his house, and it won an Award of Merit from the American Institute of Architects. Why can’t he live there? Because, the Post reports, “the alley next to his lot is not 30 feet wide and does not connect to a public street.” So much for encouraging innovation and the green economy.
Another story the same day reported that the Charles Darwin Research Station on the Galapagos Islands, off the coast of Ecuador, supports itself by operating a small store — “selling mostly clothing with the Charles Darwin Foundation’s logo. But then it added swimsuits, sunglasses, Ecuadoran chocolate and artwork, and the local traders cried foul. A local mayor agreed and shut down the store.” The Research Station is also hampered by a U.S. tax provision that prevents the Galapagos Conservancy from fully funding it. So U.S. tax law and local cronyism may combine to shut down “the oldest and most prominent research organization in the famed archipelago that inspired Darwin’s masterwork, On the Origin of Species.”
Far worse than those unfortunate outcomes was the fate of Eric Garner, who died in a police chokehold after he resisted the attempt to arrest him for selling individual cigarettes — “loosies” — on the street. Why do people sell cigarettes on the street? Because New York has the country’s highest cigarette taxes, and cigarettes smuggled in from low‐tax states such as Virginia can be sold much more cheaply. Garner had been arrested more than 30 times, most often for selling cigarettes on the street. Yale law professor Stephen Carter wrote in the days after Garner’s death:
It’s not just cigarette tax laws that can lead to the death of those the police seek to arrest. It’s every law. Libertarians argue that we have far too many laws, and the Garner case offers evidence that they’re right. I often tell my students that there will never be a perfect technology of law enforcement, and therefore it is unavoidable that there will be situations where police err on the side of too much violence rather than too little. Better training won’t lead to perfection. But fewer laws would mean fewer opportunities for official violence to get out of hand.
In his book Overcriminalization: The Limits of the Criminal Law, Douglas Husak of Rutgers points out that federal law now includes more than 3,000 crimes, and there may be 300,000 or more federal regulations enforceable through criminal punishment at the discretion of an administrative agency. Which is why criminal defense attorney and Cato adjunct scholar Harvey Silverglate titled his book Three Felonies a Day.
As I wrote at USAToday.com, “the more laws we pass, the more chances there are for people to run afoul of the police. Especially when we outlaw peaceful activities, such as smoking marijuana, selling untaxed cigarettes or feeding the homeless.”
If Congress wants to be really productive, it should repeal laws. It could start by reviewing the laws that create 3,000 federal crimes. And federal, state, and local governments should consider whether it’s really a good idea to use armed agents to enforce laws and regulations about selling orchids or raw milk, letting your child play in the park, or writing a school story about killing a dinosaur with a gun.
Abstract:Are maple syrup felons sufficiently heinous that they should be imprisoned for perhaps as long as 45 years? Some members of the U.S. Senate seem to believe the answer is yes: How else to explain the provisions of the Maple Agriculture Protection and Law Enforcement Act of 2011? This bill, known as the MAPLE Act, would make it a “federal crime…for anyone knowingly and willfully to distribute into interstate commerce a product that is falsely labeled as maple syrup.” While falsely labeling a product should not go unpunished, there are ample criminal laws on the books to deal with the false labeling of maple syrup. The real threat raised by the MAPLE Act is not that of a shadowy syrup syndicate, but a U.S. Congress determined to expand the federal criminal law well beyond its intended limitations—the phenomenon known as overcriminalization.
Three months ago, the Maple Agriculture Protection and Law Enforcement Act of 2011 (MAPLE Act) was introduced in the Senate. The bill would make it a federal crime, punishable by up to five years’ imprisonment, for anyone knowingly and willfully to distribute into interstate commerce a product that is falsely labeled as maple syrup. Although punishing offenders for genuine fraud is a reasonable policy, this bill does not materially advance that policy—at least not at a reasonable cost. Instead, it amounts to piling on.
The MAPLE Act is an innocuous-looking bill. No one would contend that falsely labeling a product should go unpunished in some way or other. For example, a party injured by fraud can seek relief under the law of torts, contracts, and restitution.[1] Because “all civil penalties have some deterrent effect,”[2] private civil actions also can discourage other parties from committing fraud and therefore serve a valuable public interest. Fraud also is punished under the criminal law: Fraud has been a crime at common law in some form or another for more than 300 years;[3] the states outlaw fraud;[4] and numerous statutes make fraud a federal offense.[5]
Such redundant criminalization, however, is the problem. The type of fraud at which the MAPLE Act is aimed already is outlawed by one or more federal criminal laws, to say nothing of state criminal laws and state tort law. Indeed, there are dozensof federal statutes making fraud a crime.
Even considering only the two most widely used federal antifraud laws—the mail fraud and wire fraud acts[6]—there is no reason to believe that any large-scale fraud in the marketing or sale of maple syrup is not already a crime. After all, the parties who commit such fraud need to use the mails or telecommunications facilities to advertise, to ship their goods, to be paid, or for other reasons. One or the other (or both) of those laws should do the trick. To be sure, neither statute may reach someone who sells falsely labeled maple syrup at a roadside stand for cash,[7] but how many such cases are there? In fact, how many cases are there altogether involving the false labeling of maple syrup? And why should state or local law enforcement authorities not be responsible for such (to mix metaphors) small-potatoes cases?
True, there are times in which development of a new technology (e.g., cars, aircraft, or telephones) might require Congress to adopt a new law specifically focused on the use of that invention to commit a crime, but maple syrup is hardly a 21st century creation. It also is true that there are times when a new societal consensus develops regarding conduct that already is a crime yet justifies harsher treatment of offenders (e.g., spousal abuse), but there is no such justification driving the MAPLE Act. The people who make, market, and sell genuine maple syrup, as well as the people who enjoy that product, are in the same position that they always have been and are not more hurt by fraudulent sales today than they were 20 or 30 years ago. As a result, it is quite difficult to see what good this new fraud statute could accomplish other than giving those in the maple syrup industry a federal fraud statute of their own.
Is that a sufficient reason for another dose of punishment? The answer is “No.” There are ample criminal laws on the books to deal with this problem. Adding this new one is just overkill.[8] If this were football, the referee would throw a penalty flag for unnecessary roughness. Keep in mind that the punishments imposed under this statute would enhance the penalties that can be imposed on offenders today: The sentence for this crime can be tacked onto the sentence for mail fraud (up to 20 years’ imprisonment) and wire fraud (up to 20 years’ imprisonment) and whatever else the prosecutor can charge.[9] Are maple syrup felons sufficiently heinous that they should be imprisoned for perhaps as long as 45 years?
Finally, consider the example that this bill would create. As the late Professor William Stuntz has explained, legislators and prosecutors like to double up on the penalties for the same conduct and, to do so, prefer to use existing laws as precedents for future ones.[10] Consider, then, the new raft of statutes that this legislation could spawn: False labeling of Iowa corn, Virginia peanuts, or Coney Island hot dogs soon could become separate federal offenses. Selling phony replicas of the Statue of Liberty, Wrigley Field, the Golden Gate Bridge, the St. Louis Arch, the Louisiana Superdome, and a host of other replicas each could be made its own crime.
Of course, fraudulent conduct should be deterred or punished, even stopped if possible; no one would disagree. But is a sledgehammer needed to accomplish that goal? Put aside the harm done to the offender and his family (an unfortunate, but nonetheless inevitable, example of the collateral damage done by criminal sentencing). What marginal retributive or deterrent benefits do such new criminal laws provide? If the answer is none—and it most likely is—then such laws would be all cost and no benefit.
—Paul J. Larkin, Jr., is Senior Legal Fellow and Manager of the Overcriminalization Initiative in the Center for Legal and Judicial Studies at The Heritage Foundation.
Originally published at Politico by Charles G. Koch & Mark Holden | January 7, 2015
As Americans, we like to believe the rule of law in our country is respected and fairly applied, and that only those who commit crimes of fraud or violence are punished and imprisoned. But the reality is often different. It is surprisingly easy for otherwise law-abiding citizens to run afoul of the overwhelming number of federal and state criminal laws. This proliferation is sometimes referred to as “overcriminalization,” which affects us all but most profoundly harms our disadvantaged citizens.
Overcriminalization has led to the mass incarceration of those ensnared by our criminal justice system, even though such imprisonment does not always enhance public safety. Indeed, more than half of federal inmates are nonviolent drug offenders. Enforcing so many victimless crimes inevitably leads to conflict between our citizens and law enforcement. As we have seen all too often, it can place our police officers in harm’s way, leading to tragic consequences for all involved.
How did we get in this situation? It began with well-intentioned lawmakers who went overboard trying to solve perceived or actual problems. Congress creates, on average, more than 50 new criminal laws each year. Over time, this has translated into more than 4,500 federal criminal laws spread across 27,000 pages of the United States federal code. (This number does not include the thousands of criminal penalties in federal regulations.) As a result, the United States is the world’s largest jailer— first in the world for total number imprisoned and first among industrialized nations in the rate of incarceration. The United States represents about 5 percent of the world’s population but houses about 25 percent of the world’s prisoners.
We have paid a heavy price for mass incarceration and could benefit by reversing this trend. It has been estimated that at least 53 percent of those entering prison were living at or below the U.S. poverty line when their sentence began. Incarceration leads to a 40 percent decrease in annual earnings, reduced job tenure and higher unemployment. A Pew Charitable Trust study revealed that two-thirds of former inmates with earnings in the bottom fifth upon release in 1986 remained at or below that level 20 years later. A Villanova University study concluded that “had mass incarceration not occurred, poverty would have decreased by more than 20 percent, or about 2.8 percentage points” and “several million fewer people would have been in poverty in recent years.”
African-Americans, who make up around 13 percent of the U.S. population but account for almost 40 percent of the inmates, are significantly affected by these issues. According to Harvard sociologist Bruce Western: “Prison has become the new poverty trap. It has become a routine event for poor African-American men and their families, creating an enduring disadvantage at the very bottom of American society.”
Reversing overcriminalization and mass incarceration will improve societal well-being in many respects, most notably by decreasing poverty. Today, approximately 50 million people (about 14 percent of the population) are at or below the U.S. poverty rate. Fixing our criminal system could reduce the overall poverty rate as much as 30 percent, dramatically improving the quality of life throughout society—especially for the disadvantaged.
To bring about such a transformation, we must all set aside partisan politics and collaborate on solutions. That is why we have partnered with the National Association of Criminal Defense Lawyers for more than 10 years to bring about positive changes in our justice system.
We support a five-step approach to criminal justice reform:
First, “do no more harm.” Legislators must resist the temptation to criminalize activities that do not fit a common-sense understanding of what is a “crime.” Criminal laws should not impose liability if the accused did not knowingly and willfully intend to commit the bad act. This explosion of criminal laws has led to imposing liability on activities that ordinary citizens would have no reason to believe would be criminal such as converting a wild donkey into a private donkey, bathing in the Arkansas Hot Springs National Park without a doctor’s note, and agreeing to take mail to the post office but not dropping it off. It has led to criminal liability for amateur arrowhead collectors who had no idea their hobby could be a federal crime, as well as criminal charges and a conviction for a former Indianapolis 500 champion who got lost while snowmobiling during a blizzard and unwittingly ended up on federal land.
Second, we must address prosecutorial abuses—especially in the discovery and grand jury processes. Even the late Senator Ted Stevens fell victim to prosecutorial abuse in his trial when during the discovery process, federal prosecutors systematically concealed evidence that supported the senator’s defense and testimony. Prosecutors must disclose all evidence favorable to the accused to ensure that every American should be treated equally and fairly under the law, whether the accused is a disadvantaged urban teenager or a wealthy corporate executive.
Third, we must ensure that all those charged with a crime receive their Sixth Amendment right to representation by a lawyer. Inadequate or no legal representation results in devastating consequences for criminal defendants and their families.
Fourth, end unduly harsh sentences and resulting disparities by eliminating mandatory minimum sentences that dictate punishment unrelated to the nature or harm of the underlying crime and facts. We must honor the ideal of the punishment fitting the crime by allowing judges to exercise discretion.
Finally, after a sentence is served, we should restore all rights to youthful and non-violent offenders, such as those involved in personal drug use violations. If ex-offenders can’t get a job, education or housing, how can we possibly expect them to have a productive life? And why should we be surprised when more than half of the people released from prison are again incarcerated within three years of their release?
Hopefully, every lawmaker and committed citizen will support these proposed reforms. Overcriminalization leads to mass incarceration, undermines race relations and ultimately keeps more people in poverty. We believe the proposed reforms will improve well-being for all Americans, especially the most disadvantaged.
As issues of public policy go, few are as strange as overcriminalization. Once largely the subject only of academic complaint, the problems associated with overcriminalization are now more widely understood. Major think tanks,[1] media outlets,[2] civil libertarian groups,[3] and legal professional associations[4] have shined a harsh light on the injustices that federal prosecutors have committed against people who had no reason to know their actions were wrongful, much less illegal.
These are not isolated cases of abusive prosecution; they take place from coast to coast and have ruined the lives and reputations of people who were like other law-abiding citizens except for their misfortune of having attracted the attention of an overzealous federal agent or prosecutor.[5] From left and right of political center to points in between, there is an impressive consensus that overcriminalization gravely threatens the liberty of ordinary citizens.
Nevertheless, reports of overcriminalization’s demise would be greatly exaggerated. Congress has repeatedly held hearings on the subject, and members of both parties have criticized the present state of affairs in which the law virtually “makes everyone a felon.”[6] Yet Congress has taken no action.
Even that bleak statement is too optimistic: Congress, while at times professing concern over the federalization of crime,[7] has continued to pass new federal criminal laws at a relentless pace. Congress has created an average of 56 new crimes every year since 2000, roughly the same rate of criminalization from the two prior decades.[8] This is no aberration. As Professor John Baker has noted, “for the past 25 years, a period over which the growth of the federal criminal law has come under increasing scrutiny, Congress has been creating over 500 new crimes per decade.”[9]
Much like the addict who repeatedly breaks promises to quit, Congress cannot seem to kick the overcriminalization habit. Some addicts eventually seek help through third-party “interventions,” but the federal courts, committed as they are to expansive views of congressional power to define crimes,[10] will not nudge Congress even to curb its reliance on overcriminalization, much less to quit cold turkey.
At this point, traditional critiques of overcriminalization hit a brick wall because overcriminalization is understood primarily in quantitative terms: the notion that there are too many criminal laws regulating too many activities. From this view, reform efforts depend entirely on Congress, which needs to narrow and repeal scores of federal criminal laws. Absent such legislative action, federal prosecutors will continue to have free rein to exploit the vagaries of federal law to charge and convict whomever they wish, regardless of how innocuous the accused’s behavior is.
Fortunately, there is another path to reform in this area, one that does not depend on congressional action (or heroic self-restraint by federal prosecutors). This path to reform is informed statutory interpretation in federal criminal cases. Legislative overuse and prosecutorial misuse of the criminal sanction need not go unchecked, as many judges seem to think. The courts themselves have an important role in defining crimes, a role that takes on even greater importance as Congress continues to default on its obligation to restrict criminal liability and penalties to sensible bounds.
Courts flesh out—and, more often than not, prescribein the first instance—the state of mind required for conviction. The state-of-mind, or mens rea, requirements are of vital importance in preventing morally undeserved punishment and guaranteeing the fair warning necessary to enable law-abiding citizens to avoid committing crimes. As important as the role of defining the mental element of criminal liability is, however, it is not the judiciary’s only role in this area. The courts also help to define criminal liability by interpreting ambiguous statutes, determining the meaning of laws in which Congress failed to make its intention entirely clear.
Once the important role of the federal judiciary in defining criminal liability is understood, there is greater cause for optimism about the prospect of finally reining in overcriminalization. The effort to persuade Congress to reverse course and exercise greater restraint and care in the use of criminal sanction is important and should continue. It is time, however, to broaden the conversation to include the one branch of the federal government—the judiciary—that is most likely to be receptive to long-standing complaints about overcriminalization. As we continue to await legislative reform, it is high time for courts to be part of the solution to overcriminalization instead of part of the problem.
The rest of this paper proceeds as follows. The first section seeks to reframe the typical discussion of overcriminalization in terms of the deeper problems stemming from the expansive body of federal criminal law. These problems, which stem fundamentally from poor crime definition, are ones that the federal courts helped to create and thus can remedy on their own without action by Congress. Although comprehensive legislative reform is ultimately needed, the reform effort can and should take place in federal courtrooms as well as in the chambers of Congress.
The second and third sections discuss the ways in which courts have worsened—and, by changing interpretive strategies, can counter—the adverse effects of overcriminalization through statutory interpretation.It is not “restraint” for courts to expand ambiguous federal criminal statutes and to water down mens rea requirements. To the contrary, it is “activism” and an abdication of the judiciary’s historic responsibility to promote due process and equal justice for all.
To be faithful to its role as a coequal branch of government, the federal judiciary should not be rubber stamps for the Department of Justice’s predictably expansive uses of federal criminal statutes. The judiciary should instead counteract the personal, political, and other considerations that often sway prosecutorial decision making with informed, dispassionate judgment about the proper scope of federal criminal laws in light of statutory text, legislative intent, and enduring principles of criminal law. The sooner federal judges get the message, the sooner overcriminalization’s days will be numbered and the court system can resume the business of dispensing justice instead of merely punishment.
Overcriminalization Defined
As the term implies, critiques of overcriminalization posit that too many criminal laws are on the books today and, relatedly, that existing criminal prohibitions are too broad in scope. This standard view of overcriminalization is quantitative in that it bemoans the number of criminal laws on the books and the amount of activity that is deemed criminal.
Arguments that there is too much criminal law typically stress the fact that new criminal laws are continuously added to the books, even when crime rates are low or falling, and that the expansion often involves “regulatory” offenses. Such offenses punish conduct that is mala prohibita, or wrongful only because it is illegal, and may allow punishment where “consciousness of wrongdoing be totally wanting.”[11] With the continued proliferation of regulatory offenses, conduct that in prior generations might have resulted only in civil fines or tort liability (if that) is now subject to the stigma and punishment of criminal law.[12]
Although the quantitative view tends to dominate discussions of overcriminalization, it is unsatisfying on its own terms. While such frequent use of the criminal sanction, especially during election years and times when crime rates are low or falling, may suggest that Congress is legislating for reasons other than legitimate public-safety needs, new criminal legislation might be used, for example, to signal voters that its proponents are “tough” on crime.[13] Alternatively, steady expansion in the reach of federal crimes might signify that Congress does not see (or simply does not care much about) potential misuse of increasingly broad prosecutorial authority.[14]
Still, a broad, constantly expanding criminal code need not jeopardize individual liberty or mete out morally undeserved punishment. If the prohibitions and penalties are carefully tailored to appropriate offenses and offenders, a large, expanding code can operate as justly as a code that is smaller and more targeted in its reach. For this reason, the quantitative objection to overcriminalization is, without more, incomplete.
The quantitative objection implies a deeper, qualitative objection to overcriminalization in that overcriminalization tends to degrade the quality of the criminal code, producing unjust outcomes. For example, a code that is too large and grows too rapidly will often be poorly organized, structured, and conceived. The crimes may not be readily accessible or comprehensible to those who are subject to their commands. Moreover, a sprawling, rapidly growing criminal code likely contains inadequately defined crimes—crimes, for example, in which the conduct (actus reus) and state of mind (mens rea) elements are incompletely fleshed out, giving unintended and perhaps unwarranted sweep to those crimes.
The number and reach of criminal laws may be symptomatic of a broken criminal justice system, but the poor quality of the criminal code and the resulting mismatch between moral culpability and criminal liability are the disease.
Overcriminalization as a (Partially) Self-Inflicted Judicial Wound
Once overcriminalization’s qualitative aspects are understood, it becomes evident that the blame for overcriminalization cannot be laid entirely at Congress’s doorstep. Regrettably, the courts have played the overcriminalization game with Congress and the Department of Justice. They have done so by expansively interpreting ambiguous criminal statutes in derogation of the venerable “rule of lenity” and by not insisting on mens rea requirements robust enough to rule out morally undeserved punishment. Both of these interpretive failures have made federal criminal law even broader and more punitive.
Expansive Interpretations as Judicial Crime Creation. It is often said that courts do not “create” federal crimes, but that simply is not the case. When courts expand the reach of ambiguous criminal laws (laws which, by definition, can reasonably be read to include or exclude the defendant’s conduct), they are essentially creating crimes. They are determining for themselves, within the broad bounds of the terms of an ambiguous statute, whether the defendant’s conduct should be condemned as criminal, and they are doing so after the fact, without prior warning to the defendant charged with a violation. To allow citizens to be convicted and imprisoned based on such judicial determinations transforms federal criminal law into what one scholar has described as “a species of federal common law”[15]—a result fundamentally at odds with the principle that in a democracy, the criminalization decision is reserved for legislatures.[16]
The root of the problem is that the courts are notoriously inconsistent in adhering to the rule of lenity. The rule of lenity requires a court to construe ambiguous criminal laws narrowly, in favor of the defendant,[17] not to show lenience to lawbreakers, but to protect important societal interests against the many adverse consequences that the judicial expansion of crimes produces. These consequences include judicial usurpation of the legislative crime-definition function, not to mention potential frustration of legislative purpose and unfair surprise to persons convicted under vague statutes. The rule of lenity therefore reflects, as Judge Henry Friendly memorably said, a democratic society’s “instinctive distaste against men languishing in prison unless the lawmaker has clearly said they should.”[18]
More to the point, faithful adherence to the rule of lenity would require courts to counteract overcriminalization. The rule would require courts to narrow the scope of ambiguous criminal laws, adopting expansive interpretations onlyif compelled by the statutory text. This would prevent prosecutors from exploiting the ambiguities of poorly defined federal crimes either to criminalize conduct that Congress has not specifically declared to be a crime or to redefine—or ratchet up the penalty for—crimes dealt with more specifically in other statutes. The rule of lenity would thus make poor crime definition an obstacleto—not a licensefor—more expansive applications of federal criminal law, remitting prosecutors seeking more enforcement authority to the democratic process, not an unelected, unaccountable judiciary.
Regrettably, the federal courts treat the rule of lenity with suspicion and, at times, outright hostility. While sometimes faithfully applying the rule of lenity, the Supreme Court has frequently either ignored lenity or dismissed it as a principle that applies only when legislative history and other interpretive principles cannot give meaning to an ambiguous statute.[19] Indeed, the federal courts disregard the rule of lenity so frequently that it is questionable whether the rule of lenity can still be accurately described as a rule. As I have previously stated:
[T]he courts’ aversion to letting blameworthy conduct slip through the federal cracks has dramatically reversed the lenity presumption. The operative presumption in criminal cases today is that whenever the conduct in question is morally blameworthy, statutes should bebroadlyconstrued, in favor of the prosecution, unless the defendant’s interpretation is compelled by the statute…. The rule of lenity, in short, has been converted from a rule about the proper locus of lawmaking power in the area of crime into what can only be described as a “rule of severity.”[20]
The results of the judiciary’s haphazard adherence to the rule of lenity are as predictable as they are misguided. Federal judges have repeatedly used ambiguous statutes as a basis for creating new federal crimes.[21] They have also expanded the reach of overlapping federal crimes to drive up the punishment that Congress prescribed for comparatively minor federal crimes.[22] The end result of such assaults on the rule of lenity is necessarily a broader and more punitive federal criminal law—a worsening of overcriminalization rather than an improvement.
Inadequate Mens Rea Requirements. The courts have done better—but only slightly—in fleshing out the state-of-mind, or mens rea, requirements for federal criminal liability. As the Supreme Court explained in Morissette v. United States,[23] the concept of punishment based on acts alone without a culpable state of mind is “inconsistent with our philosophy of criminal law.” In our system, crime is understood as a “compound concept,” requiring both an “evil-doing hand” and an “evil-meaning mind.”[24]
The historic role of the mens rea requirement is to exempt from punishment those who are not “blameworthy in mind” and thereby to limit punishment to persons who disregarded notice that their conduct was wrong.[25]Mens rea also serves to achieve proportionality of punishment for blameworthy acts, ensuring that the punishment the law allows “fits” the crime committed by the accused. Mens rea, for example, guarantees that the harsher penalties for intentional homicides will not be applied to accidental homicides.[26]
Despite the critical importance of mens rea to the effectiveness and legitimacy of federal criminal law, federal crimes often lack sufficient mens rea elements. Many federal crimes, including serious crimes, contain no express mens rea requirements.[27] Perhaps more commonly, federal crimes include express mens rea requirements for some element of the crime but are silent as to the mens rea (if any) required for the other elements.[28] Here it is evident that Congress intended to require mens rea but unclear whether Congress intended the express mens rea requirement to exclude additional mens rea requirements. In still other situations, even when Congress includes mens rea terms in the definition of crimes, it uses terms such as “willfully” and “maliciously” that have no intrinsic meaning and whose meaning varies widely in different statutory contexts.[29]
This confusing state of affairs might be acceptable if the courts employed a consistent method of mens rea selection. However, the courts have been inconsistent in their approach to mens rea questions. On occasion, the Supreme Court stands ready to read mens rea requirements into statutes that are silent in whole or in part as to mens rea because the Court has an interest in making a morally culpable state of mind a prerequisite to punishment.[30] This, however, is not invariably so.
Sometimes, courts treat legislative silence concerning mens rea as a legislative signal to dispense with traditional mens rea requirements, especially with respect to regulatory crimes protecting the public health, safety, and welfare. Even Morissettev. United States, with its strong emphasis on the usual requirement that a culpable mental state is a prerequisite to punishment, conceded that the requirement may not apply to regulatory or other crimes not derived from the common law.[31] The Court seized on this statement in United States v. Freed[32] as justification for treating a felony punishable by 10 years in prison as a regulatory offense requiring no morally culpable mental state.
To be sure, more recent cases cast doubt on Morissette and Freed in this respect. Among these cases are Arthur Andersen LLP v. United States,[33]Ratzlaf v. United States,[34]and Staples v. United States.[35] In each case, the Supreme Court adopted heightened mens rea requirements, and Arthur Andersen and Ratzlaf went so far as to make ignorance of the law a defense.[36] Each time, the Court ratcheted up mens rea requirements for the stated purpose of preventing conviction for morally blameless conduct.
These cases, I believe, are best read as making a culpable mental state a prerequisite for punishment for all crimes, even regulatory offenses. As I have explained elsewhere:
[T]he Supreme Court has dramatically revitalized the mens rea requirement for federal crimes. The “guilty mind” requirement now aspires to exempt all “innocent” (or morally blameless) conduct from punishment and restrict criminal statutes to conduct that is “inevitably nefarious.” When a literal interpretation of a federal criminal statute could encompass “innocent” behavior, courts stand ready to impose heightened mens rea requirements designed to exempt all such behavior from punishment. The goal of current federal mens rea doctrine, in other words, is nothing short of protecting moral innocence against the stigma and penalties of criminal punishment.[37]
The fact remains, however, that Freed and cases like it have never been overturned. Unless that happens, confusion will persist, as will the possibility that a culpable mental state may not be required for some crimes, especially regulatory offenses involving health and safety concerns.
One thing, however, is certain: As long as courts fail to make proof of a culpable mental state an unyielding prerequisite to punishment, federal prosecutors will continue to water down mens rea requirements in ways that allow conviction in excess of blameworthiness. That is exactly what prosecutors did in Arthur Andersen during the wave of post-Enron hysteria over corporate fraud. In seeking to convict Enron’s accounting firm of the “corrupt persuasion” form of obstruction of justice, prosecutors—flatly disregarding the lesson of cases like Staples and Ratzlaf—argued for incredibly weak mens rea requirements that, as the Court noted, would have criminalized entirely innocuous conduct.[38]
Although the Supreme Court unanimously rejected the Justice Department’s efforts and overturned Arthur Andersen’s conviction, the firm has less cause to celebrate than one might think. After being convicted on a prosecution theory so aggressive that it could not win even a single vote from the Justices, the firm—once a Big Five accounting firm—went out of the consulting business. Even now that it no longer stands convicted of a crime, its reputation has likely been damaged beyond repair. Its own conduct in the Enron matter had a lot to do with that, of course, but so did the overzealousness of federal prosecutors in exploiting the serious imperfections in federal mens rea doctrine. The Arthur Andersen episode simultaneously shows the need for substantial mens rea reform and the high cost of not having strong mens rea requirements.
The Judicial Path to Overcriminalization Reform
Given that overcriminalization has qualitative components—for which courts themselves bear a large share of the blame—courts can be part of the solution instead of part of the problem. Even if Congress and federal prosecutors continue their unrestrained use of the criminal sanction, courts are not powerless to act.
The solution is for courts to interpret statutes in ways that rectify the qualitative defects that overcriminalization produces in a body of criminal law as sprawling and poorly defined as federal criminal law is. New interpretive strategies, tailored to the troubling realities of a criminal justice system characterized by rampant overcriminalization, can help to right this fundamental wrong in federal criminal law.[39]
Statutory construction, of course, has its limits and cannot be used to defeat the operation of statutes that plainly encompass the defendant’s conduct. In cases such as these, courts should apply the statutes as written, barring some constitutional infirmity, but even here courts can exercise informed discretion to counteract abusive exercises of prosecutorial discretion.
After United States v. Booker,[40] district judges have wide sentencing discretion, and they can and should use that discretion to show suitable lenience toward sympathetic defendants. The President can also use his power to grant pardons or commute sentences—as President Barack Obama recently did to free eight prisoners serving unduly long drug sentences in the wake of the Fair Sentencing Act of 2010[41]—to do justice toward defendants who were unfairly convicted or sentenced.[42] Although these important safeguards for the sound administration of criminal justice should not be overlooked, this paper focuses on how courts can interpret criminal statutes to counteract the effects of overcriminalization.
Restoring the Rule of Lenity to Its Rightful Place. In light of how often courts interpret criminal statutes expansively, it should be clear that they do not simply let the weights in the interpretive scales determine whether statutes are to be read broadly or narrowly, as academic critics of lenity would have them do.[43] Instead, the balance is heavily skewed in favor of the prosecution when the conduct in question is morally blameworthy, even when a broad interpretation allows prosecutors to drive up considerably the punishment that would otherwise apply or to evade limitations that the legislature included in the definition of the crime in more specific statutes.
Whether the law enforcement need for expanded authority is real,[44] minimal,[45] or just silly,[46] the one constant seems to be that courts will go to almost any lengths to keep blameworthy conduct from slipping through the federal cracks. Thus, it is closer to the truth to say that the operative interpretive rule in federal criminal cases is severity: that ambiguous statutes presumptively should be construed broadlyto prevent culpable defendants from slipping through the federal cracks.
In practice, then, rejecting the rule of lenity tends to look a lot like endorsing anti-lenity (or a rule of severity). That, in turn,affords a substantial justification for taking lenity seriously, even if, as a theoretical matter, an evenhanded approach to the interpretation of criminal statutes might be preferable to a strict-construction default. After all, even critics of lenity do not contend that criminal laws should always be interpreted broadly, recognizing that sometimes courts should narrow the reach of criminal statutes.[47]
The obvious assumption is that there is a viable interpretive middle ground between the lenity side of the spectrum (in which ambiguous statutes are always construed narrowly) and the anti-lenity or severity side of the spectrum (in which such statutes are always construed broadly). This assumption is quite difficult to reconcile with the courts’ rather checkered track record in interpreting federal crimes.[48] Given that courts often miss valid reasons for narrowly construing statutes, a consistently applied rule of lenity under which every ambiguous criminal statute is read narrowly is the right interpretive rule.
The political economy of criminal law confirms that lenity is the right interpretive default. The relevant question is which interpretive rule would give Congress proper incentives to make its intentions clear concerning the scope and meaning of criminal statutes. To the extent that legislatures generally share prosecutors’ desire for broad criminal prohibitions,[49] a rigidly enforced rule of lenity would operate as an information-forcing default rule, giving Congress added incentives to make its wishes known ex ante.
Additionally, once an ambiguity arises in particular settings, as it often does, the question is whether the Department of Justice or groups favoring criminal justice reform are in the best position to convince Congress to pass new legislation resolving the interpretive question. The Justice Department—the 800-pound gorilla in federal criminal law—is undoubtedly best suited to the task of overcoming legislative inertia. As Professor Einer Elhauge explains, “there is no effective lobby for narrowing criminal statutes,” whereas “an overly narrow interpretation is far more likely to be corrected…because prosecutors and other members of anti-criminal lobbying groups are heavily involved in legislative drafting and can more readily get on the legislative agenda.”[50] Strict adherence to the rule of lenity would thus put the burden of overcoming legislative inertia on the shoulders of the party in the best position to persuade Congress to act.
Finally, a reinvigorated rule of lenity would promote the more effective operation of prosecutorial restraint. When courts stand ready to expand ambiguous criminal laws to keep blameworthy offenders from slipping through the cracks in federal criminal law, prosecutors can safely “push the envelope” and stretch vague laws to their outer limit. As long as they target blameworthy offenders—and, disturbingly, even if they do not[51]—prosecutors can be confident that courts will ratify their broad readings of criminal laws.
Lenity would dramatically change the calculus by lowering the prosecution’s likelihood of conviction, giving prosecutors greater incentives to decline prosecution in cases of blameless or marginally blameworthy offenders potentially guilty only of hypertechnical, victimless crimes—the kind of offenders who tend to become ensnared in the overcriminalization net. The administration of justice in federal prosecutions, therefore, would vastly improve if federal courts started taking the rule of lenity seriously.
Proportionality-Based Approaches to Statutory Construction. If federal judges remain fickle in their adherence to the rule of lenity despite its obvious advantages, they should at least take into account the potential sentencing consequences before expanding the reach of a criminal statute. This inquiry would require courts to look past the facts of the cases before them, hypothesize the range of potential applications of the statute,[52] and pay close attention to the penal consequences of an expansive interpretation. In cases in which an expansive interpretation would threaten to visit disproportionate punishment on convicted offenders, as determined against the baseline of other criminal laws (state or federal) proscribing the same criminal act, a narrow reading is the appropriate response unless the statute’s plain meaning commands a broader interpretation.[53]
Proportionality considerations should also be factored into mens rea selection. The Supreme Court should repudiate the notion that avoiding conviction for morally blameless conduct is the only goal of mens rea doctrine.[54] A separate, equally vital and proper concern of mens rea doctrine is to ensure that the sanctions available in the event of conviction will be proportional to the blameworthiness of convicted offenders.[55]
Imposing punishment in excess of blameworthiness is just as offensive in principle as convicting blameless conduct: Either way, courts are imposing punishment that is not justified by the culpability of the offender and gambling with the moral credibility of the criminal law. Crimes for which Congress has prescribed severe penalties should require correspondingly high levels of mens rea so that offenders will be seriously blameworthy. Only then will convicted offenders be morally deserving of the stiff penalties that federal law affords.
Reinvigorate Mens Rea Requirements. Finally, courts should substantially overhaul federal mens rea doctrine. Quite simply, the doctrine is in dire need of reform both in its underlying theory and in its operational details. For the stated purpose of preventing punishment for morally blameless (or “innocent”) conduct,[56] the Supreme Court has made “innocence protection” the driving force in mens rea selection. Heightened mens rea requirements can and should be imposed where (and onlywhere) a federal criminal statute would otherwise potentially reach morally blameless conduct.[57]
In addition to making disproportionate punishment a proper concern of mens rea doctrine, courts should free the prevailing federal method of selecting mens rea from the shackles that prevent it from achieving its important goal of aligning punishment and blameworthiness. Once courts detect a potential innocence-protection problem—understood not just as the potential for punishment of blameless acts, but also as disproportionate punishment for blameworthy acts—the courts should impose whatever heightened mens rea requirement is necessary to limit punishment in accordance with blameworthiness. In doing so, courts should not be at all reluctant to require, where necessary to avoid morally undeserved punishment, prosecutors to prove knowledge that the defendant knew his conduct was illegal.
This more robust mens rea doctrine could be the single most important contribution the courts could make to avoiding the qualitative problems associated with overcriminalization. Overcriminalization horror stories typically involve prosecutors using obscure regulatory laws as traps for unwary citizens who are understandably unaware either of the existence or the meaning of the law in question.[58] To the extent that judges start demanding proof in these cases, not only of the facts that make the defendants’ conduct illegal, but also of the defendants’ knowledge that they were breaking the law, prosecutors could no longer count on guilty pleas or guilty verdicts.
The effect would not simply prevent unjust punishment, although that is a worthy goal in its own right. It would also give the federal government much-needed incentives either to give the regulated public notice that such obscure crimes exist, thereby enabling itself to prove knowing illegality, or, as one scholar helpfully suggests,[59] to use administrative or civil enforcement mechanisms in place of criminal prosecutions to achieve the government’s regulatory goals. In a free society, criminal prosecution—the most coercive and stigmatizing exercise of governmental authority—should be a last resort, reserved for cases in which the government’s legitimate regulatory goals cannot otherwise be achieved.
Conclusion
As this brief survey of federal criminal law has shown, overcriminalization is a serious problem in the federal system and more generally for American criminal law. The number and scope of criminal laws, however, is only the tip of the iceberg. Ultimately, overcriminalization is so problematic because it tends to degrade the quality of criminal codes and result in unwarranted punishment, jeopardizing the quality of justice the system generates. While overcriminalization is the order of the day in the federal system, rendering the legislature no longer supreme in matters of crime and punishment, it is ultimately prosecutors who exploit incompletely defined crimes and the redundancy of the criminal code to expand the scope of their enforcement power and ratchet up the punishment that convicted defendants face.
As judges decry this state of affairs and scholars hope against hope for bold legislative or constitutional solutions, they have missed something critical. Given that the federal courts helped to make federal criminal law as broad and punitive as it is, there is a ready solution to overcriminalization’s many problems short of legislative self-restraint or judicial activism in the name of the Constitution.
The solution is for federal judges to approach their vital interpretive functions with keen sensitivity to the many adverse effects that overcriminalization and the courts’ current, self-defeating interpretive strategies create for federal criminal law. If courts cease giving unwarranted scope to ambiguous criminal laws and redouble their efforts to use mens rea requirements to rule out morally undeserved punishment—understood not merely as punishment for blameless acts, but also as disproportionately severe punishment for blameworthy acts—overcriminalization need not be the disaster that so many with good cause believe it to be.
—Stephen F. Smith is Professor of Law at the University of Notre Dame.
The Heritage Foundation and others have criticized the modern-day phenomenon known as “overcriminalization,”[1] the neologism given to the overuse and misuse of the criminal law.[2] Those criticisms have taken several forms: Legislatures pass too many statutes creating crimes (especially federal offenses); legislatures too frequently empower administrative agencies to define crimes or otherwise “fill in the blanks” in laws that can be enforced through the criminal process; legislatures too often define offenses with inadequate mens rea or scienter (“guilty mind”) requirements; and legislatures too often increase penalties for existing crimes simply to make it look as though they have done something to reduce crime.[3]
Some claim that the critics of overcriminalization are making a mountain out of a molehill.[4] The criminal justice system has expanded its reach over time as new social and economic concerns justify new forms of regulation and new justifications emerge for using the criminal process to enforce different regulatory regimes. That expansion creates the possibility that certain individual prosecutions may be unjustified. If the number of instances of overuse or abuse of the criminal process is small, however, the problem may not be as large a concern as critics of overcriminalization claim.
At first blush, statistics seem to support the argument that critics of overcriminalization are overstating the extent of the problem. More than 90 percent of recent federal prosecutions were for crimes not subject to any overcriminalization criticism. The U.S. Sentencing Commission noted that in 2012, 32.2 percent of all federal criminal prosecutions were for immigration law violations, 30.2 percent were for controlled substance crimes, 10.5 percent were for fraud, 9.8 percent were for firearms violations, 3.5 percent were for non-fraud white-collar crimes, 2.4 percent were for child pornography offenses, and 1.7 percent were for larceny cases.[5] The “Other” category is just 9.7 percent and includes traditional crimes such as assaults on federal officials. The result, the argument concludes, is that there is little room left for an overreaching federal criminal justice system.
That argument, while facially reasonable, is unpersuasive.
The Only Party That Could Know the Full Extent of Overcriminalization—the U.S. Justice Department—Cannot Be Expected to Collect Examples of Its Own Unjust Prosecutions
The extent of the problem is difficult to determine and may be worse and more insidious than some might think. No agency in the legislative, executive, or judicial branches collects statistics about overcriminalization. Neither the U.S. Sentencing Commission nor the Federal Judicial Conference has the charter to identify all cases of unjust prosecutions, and the individual members of the federal bench lack the ability to collect such data on a nationwide basis.
The U.S. Department of Justice, of course, has no interest in identifying instances in which it or one of the U.S. Attorney’s Offices should not have brought criminal charges against someone. This is true for two simple reasons: (1) Many overzealous prosecutors might not acknowledge or even recognize instances of overcriminalization, and (2) even if they did, they might not highlight them because doing so would embarrass the Attorney General and individual U.S. Attorneys who had the authority to prevent any such prosecutions.[6]
Notable Examples of Injustices
There are several prominent examples of the misuse of the criminal justice system.
Abner Schoenwetter, for example, spent six years in a federal prison for importing Honduran lobsters that were packed in plastic—as opposed to cardboard—boxes and for supposedly violating a Honduran regulation (later declared invalid by the Honduran Attorney General) that made his lobsters marginally too small.
The federal government pursued a criminal investigation of the Gibson Guitar Company for importing wood for guitar frets that allegedly was exported illegally from India and Madagascar in violation of those nations’ laws—which, in the case of Madagascar, were not even written in English. In other words, the federal government claimed that Gibson Guitar was guilty of a federal crime in this country because it did not know the law of a foreign nation.
Lawrence Lewis, a building engineer, wound up charged with a felony and pleaded guilty to a misdemeanor for following the procedure he had been instructed to use to clean up toilet overflows at a military retirement home that, totally unbeknownst to him, wound up shunting the refuse into the Potomac River.[7]
Prosecutions such as these deprive the criminal law of the respect it needs to secure public support. That is particularly true if, as social science suggests, people generally follow the law if they respect it, not because they fear it.[8]
Each Injustice Matters
The argument that the concern with overcriminalization is overstated essentially reduces to claiming that because more than 90 percent of federal prosecutions are for classic federal crimes, overcriminalization is not a problem. These isolated instances of injustice, the argument goes, do not justify the commitment of time and effort necessary to fundamentally re-examine the criminal law:
There may be one or two extreme cases here and there where a prosecutor has exercised poor judgment and has charged someone who may have technically violated a regulatory law, but truly is morally blameless, utterly contrite, and completely harmless. A few mistakes here and there, however, do not justify tarring the entire criminal process or treating every police officer as a modern-day Inspector Javert.[9]
That defense of the status quo, however, is inconsistent with the long-standing axiom, drawn from the Bible,[10] that “It is better that ten guilty men go free than that one innocent man be convicted.”[11] As the Rev. Martin Luther King, Jr., wrote in his famous letter from the Birmingham jail, “Injustice anywhere is a threat to justice everywhere.” Society should not ignore known injustices just because they may be few in number. Rather, society should correct such errors, especially when their number is small, because we can no longer, and should not have to, rely on the clemency process to rectify them.[12]
Numerous Respected Individuals and Organizations Are Troubled by the Injustices of Overcriminalization
A large and growing number of highly respected figures believe that overcriminalization in fact is a serious problem. Former senior Justice Department officials have been vocal critics of overcriminalization.[13] An American Bar Association task force created to examine the issue released a report denouncing this phenomenon.[14] Numerous members of the academy have written about the problem.[15] Several law schools have held symposia to highlight the issue.[16] The media have expressed interest in the problem.[17] The House Judiciary Committee not only has held hearings on overcriminalization,[18] but also has chartered a task force to examine this matter.[19] Organizations from across the political spectrum—The Heritage Foundation and the ACLU, the Manhattan Institute and National Association of Criminal Defense Lawyers, the Texas Public Policy Foundation and Families Against Mandatory Minimums—that ordinarily do not hold the same public policy views all oppose overcriminalization.[20]
This widespread concern, voiced by important figures in the policymaking process representing very different viewpoints, justifies the belief that the problem is a systemic flaw in the criminal justice system and is not limited to isolated instances of legislative or prosecutorial overreaching.
Congress Should Act Now—Before the Federal Criminal Code Grows Even Further
The increasing use of criminal laws as regulatory penalties amplifies the risk that people, especially those who own or manage small businesses, may be deterred from pursuing legitimate activities due to the fear that they could commit a crime by unwittingly crossing one of the many obscure lines drawn by statutes, regulations, and ordinances. As Professor Douglas Husak has noted, among the harms caused by a large, prolix criminal code are “the freedom-limiting, anxiety-producing, and guilt-inducing effects the criminal law may have on those who take its demands seriously, even apart from the threat of punishment.”[21]
The criminal law serves a reasonable purpose when it deters individuals from approaching the line between lawful and illegal conduct—if the activity being regulated is inherently dangerous and the tort system cannot serve its traditional compensatory and deterrent functions.[22] Yet the criminal law often is used not as a necessary substitute for the tort system or as a means of enforcing traditional notions of blameworthy conduct, but as a means of protecting some favored interests over others.[23]
The public is ill-served when the criminal law is used to reduce competition rather than to promote it.[24] Cases where parties are deterred from socially beneficial activities will not show up in reported decisions discussing overcriminalization because, by definition, the affected parties will have avoided taking the risk of criminal prosecution. But it is precisely because the criminal law can have an overbroad deterrent effect that Congress should not wait until this problem worsens before remedying it.[25]
Conclusion
The only party with the ability to produce statistics on the prevalence of overcriminalization is the Justice Department, and, realistically speaking, it cannot be expected to collect accurate or complete statistics illustrating how often it has unjustifiably filed criminal charges. But the absence of proof is not proof of the absence of this problem. Numerous respected individuals and organizations, including several former high-level Justice Department officials, believe that overcriminalization is sufficiently widespread that it merits Congress’s attention and remediation. It also is clear that overcriminalization has occurred in particular cases because of flaws in criminal statutes.
Overcriminalization undeniably is a serious problem in every case in which it occurs. Congress should get to the bottom of this problem and adopt reasonable remedies to prevent injustices from reoccurring.—Paul J. Larkin, Jr., is Senior Legal Research Fellow in the Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation. Yaniv Nahon and Morgan Bennett, members of the Young Leaders Program at The Heritage Foundation, provided valuable research assistance for this paper.
Originally published at Manhattan Institute by Isaac Gorodetski James R. Copland | 2/25/14
The last ten years have seen the emergence of a new approach to business regulation and prosecution of wrongdoing in the United States. The U.S. Department of Justice now regularly enters into “deferred prosecution” or “non-prosecution” agreements (DPAs or NPAs) with large corporations, in which companies are paying billions of dollars in fines annually without trial. These agreements are presented as steps short of prosecution of corporations, a step that might drive firms into bankruptcy and disrupt their economic sectors. At the same time, a good case can be made that these agreements suffer from a lack of transparency. Questions naturally arise as to whether attorneys working for the federal government, with minimal to no judicial oversight, are best positioned to change significantly the business practices of individual companies and, indeed, entire industries.
Businesses prefer to enter into DPAs or NPAs rather than face trial, even when the costs of such arrangements are severe, because of the significant capital-market pressures stemming from criminal inquiries (including depressed stock prices and impaired credit) as well as the statutory and regulatory consequences flowing from indictment or conviction—for example, exclusion from government reimbursement or contracts, or the retraction of government licenses vital to a company’s operation. Prosecutors, in turn, prefer to avoid the risk and cost of trial as well as the potentially severe collateral consequences that indictment or conviction can impose on corporate stakeholders, including employees and creditors, as witnessed in the collapse of the large accounting firm Arthur Andersen following its 2002 federal indictment—which was ultimately set aside by the U.S. Supreme Court.
Thus, such arrangements have become commonplace, so much so that they might be characterized as a “shadow regulatory state” over business. The federal government has reached 278 DPAs and NPAs with businesses since 2004, with ten of the Fortune 100 companies operating under such agreements just since 2010. Although the federal government entered into only 17 DPAs and NPAs from 1993 through 2003, it entered into 66 in just the last two years, in which almost $12 billion in total fines and penalties were imposed. Companies in the finance and health-care sectors have been particularly likely to wind up under such agreements, with the finance sector accounting for 13 DPAs and NPAs and the health-care sector accounting for 8 of them in 2012–13. The reach of federal prosecutorial agreements has not stopped at America’s shores: the Department of Justice has asserted authority over hosts of foreign businesses—in some cases, for alleged conduct occurring completely outside the United States.
DPAs and NPAs are notable in that they impose terms on companies that go beyond the fines or incarceration normally associated with criminal punishment and because they go beyond requiring that the companies correct the specific practices alleged to be violations of the law. Instead, these agreements often call for major changes in firms’ internal processes of many types—from training to human resources—based on the apparent assumption that absent such changes, wrongdoing will be more likely to recur. Under DPAs and NPAs, companies have agreed to modify preexisting business practices significantly, by:
Implementing training and reporting programs;
Changing compensation schemes;
Modifying sales and marketing plans;
Hiring new, senior “compliance officers” as well as independent “monitors” reporting to the prosecutor; and
Firing key personnel, including directors or chief executives.
In many cases, the alleged predicate offenses underlying DPAs or NPAs involve ambiguous facts or strained or novel interpretations of law—interpretations that have remained untested in court, given companies’ pronounced pressure to settle. In addition, DPAs and NPAs regularly cede to prosecutors the sole discretion to determine whether companies are in breach of the agreement’s terms, without judicial oversight or the possibility of appeal.
This report focuses on DPAs and NPAs reached in 2012 and 2013 between prosecutors and four companies: Ralph Lauren, GlaxoSmithKline, Royal Bank of Scotland, and HSBC. These arrangements highlight companies’ difficulty in avoiding potential prosecution, even when they self-report potential violations discovered through robust internal compliance programs. They also highlight the broad social consequences of federal prosecutors’ quasi-regulatory decisions, which include:
Limiting companies’ ability to communicate truthful information to the public about pharmaceuticals, with potential life-or-death consequences;
Directly influencing trading practices and corporate speech relating to key interest rates and other global financial variables; and
Prompting companies to withdraw from developing countries, thus reducing capital formation and opportunity for the world’s poorest populations.
The U.S. practice of entering into DPAs and NPAs with corporations remains anomalous: corporate prosecutions are disfavored or impermissible in other developed nations. In 2013, however, the United Kingdom passed new legislation—the Crime and Courts Act, which introduced DPAs to the British criminal justice system beginning in February 2014. In contrast to U.S. practice, the U.K. rules limit the scope of corporate conduct subject to such arrangements and clearly delineate a transparent process that prosecutors must follow in pursuing DPAs, with significant judicial oversight. The new British rules bear watching as they are implemented, and they offer a potential blueprint for reforming American practice.
