Skilling Decision: Good for Justice, Bad for Jurisprudence

jeff skilling

It looks like we spotted the trend.  Unfortunately.

Last week we noted that, when faced with an ambiguous statute, some on the Supreme Court are now willing to read new language into the statute, rather than toss it back to Congress to do it right.  And we wondered if that might be a harbinger of what was to come in the “honest services” cases of Black, Weyrach and Skilling.

Well, those cases came down this morning, and sure enough the majority decided to read in new language, rather than toss out the statute for being vague.

It’s great for the defendants, whose honest-services convictions got tossed.  But to get there the Court had to change the rules.  Now, judicial invention is a perfectly acceptable method of statutory interpretation… so long as the new language is what “everybody knows” the statute really meant to say.  And that’s bloody dangerous. 

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We’ve been paying close attention to this issue (see other posts here, here, here and here), as have many others, because the feds love charging people with honest services fraud.  It’s so vague and open-ended, that it potentially criminalizes any activity that’s outside one’s job description.  That makes it a great catchall when you can’t prove something more substantive.  But it’s also not at all what Congress intended.

“Honest services” fraud was originally a judge-created law.  There wasn’t any statute criminalizing it, it just sort evolved via common law, accepted in all the Circuits.  But we don’t do common-law crimes in this country, for one thing, and the mail fraud statute didn’t say anything about intangible rights, so in 1987 the Supreme Court threw out the common-law version of honest services fraud.  If Congress wanted to criminalize it, then that was up to Congress.

The idea was pretty simple: If you had a position of trust, and you abused that position for private gain (say, by taking bribes or kickbacks), then you were depriving people of the services you ought to have been giving them had you been honest.  You were getting paid under the table to do your job wrong.  So in 1988 Congress came up with 18 U.S.C. § 1346.

But the language didn’t say anything about abusing a position of trust.  Instead, it just said that fraud included a scheme “to deprive another of the intangible right of honest services.”  And didn’t define what “the intangible right of honest services” meant.

And nobody knew what it meant.  That’s how prosecutors liked it, because real-life corruption charges are notoriously difficult to prove.  It’s hard to get solid evidence of bribery and kickbacks, especially when the only real evidence would have to come from the parties themselves.  But if the feds could skip all that and just charge a mail/wire fraud, based on this amorphous intangible thing nobody really understood, then they could prosecute all they want with just the barest modicum of evidence.  And so they did.

But now, in the Black, Weyrach and Skilling cases, the Supreme Court was asked to find the statute unconstitutionally vague.

Instead, however, the Court has decided to read the statute as if it had been written properly, instead of making Congress go back and do it right.

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In Skilling v. U.S. (opinion here), the Court ruled that §1346 only covers bribery and kickbacks.  Since none of the defendants in Black, Weyrach and Skilling were charged with any bribery or kickbacks, these charges had to be dismissed.

But nowhere in the statute does it mention bribery or kickbacks.  And the feds have used it to prosecute any number of things that involved neither.  So clearly the feds, at least, understood it to mean more than just bribery and kickbacks.  And the Circuits that upheld such convictions understood it to mean more than that. 

Nevertheless, despite the fact that a lot of smart and reasonable people understood the statute to cover more than just bribery and kickbacks, the Court’s decision today says that everyone knows that’s what the statute meant.  Because everyone knows what Congress really meant to say, the statute’s not unconstitutionally vague.

Due process requires a penal statute to define the offense definitely enough so that ordinary people understand what’s prohibited, and so that it is not enforced arbitrarily.

The Court said ordinary people understand what’s prohibited — not in light of the way it’s actually enforced these days, which is unpredictable at best — but in light of the way the common-law doctrine had evolved prior to 1987. 

It’s obvious that Congress meant to embody that common-law doctrine, which dealt pretty much with bribery and extortion.  So if you interpret the statute to only encompass such acts, it’s not unconstitutionally vague.  Everyone knows you’re not supposed to do that stuff.

Seriously.  That’s the relevant portion of the opinion, in a nutshell.  “Yeah, it’s vague as written, but if it were written to say what Congress meant to say, then it’s not vague.  So we’ll interpret it as if it had been written properly.”

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Justice Ginsburg wrote the opinion.  Part III is the section that deals with this issue (it begins on page 34 of the opinion).  As to Part III, she was joined by Roberts, Stevens, Breyer, Alito and Sotomayor.

Scalia, joined by Thomas and Kennedy, said the Court should not have rewritten the statute, but should have found it unconstitutionally vague.  “In transforming the prohibition of ‘honest-services fraud’ into a prohibition of ‘bribery and kickbacks,’ [the Court] is wielding a power we long ago abjured: the power to define new federal crimes.  See United States v. Hudson, 7 Cranch 32, 34 (1812).”  A vague statute cannot be saved “by judicial construction that writes in specific criteria that its text does not contain, see United States v. Reese, 92 U.S. 214, 219-221 (1876).”

Once again, we agree wholeheartedly with Scalia.  His opinion delightfully picks apart the errors of the majority’s statutory interpretation.  Our favorite passage is this one:

Arriving at that conclusion requires not interpretation but invention.  The Court replaces a vague criminal standard that Congress adopted with a more narrow one (included within the vague one) that can pass constitutional muster.  I know of no precedent for such “paring down,” and it seems to me clearly beyond judicial power.

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Unfortunately, Scalia’s wrong.  There is precedent.  This Court is creating it as you’re reading this.  Last week’s Dolan decision was the start of a rule expressly permitting judicial invention as a method of statutory interpretation.  Today’s Skilling decision is a major adoption of that rule.

We wish it were otherwise, but it would be foolish to expect the Court to not apply that rule in future cases.

Still, it’s a good outcome.  Honest-services fraud is no longer a tool for lazy prosecution of cases that couldn’t otherwise be proven.  We just wish the Court had done it right, and thrown out the law entirely.

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2 Comments

  1. Anonymous, February 13, 2015:

    Practical info that you can tell the attorney took the time to write himself – but without the “lawyerspeak”!

  2. Anonymous, February 13, 2015:

    A great example of a beefy blog – not only in terms of the posts themselves, but also in terms of how they’ve piled up over the years, just because the author stuck with it.

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