A Supreme Court Case That’s Just A Little Fishy

A fishy tale from the Supreme Court that may give us a clue about bigger cases to come.

law-gavel-lights

Yesterday, in one of the more unique legal arguments it has been presented with in recent years, the Supreme Court ruled that fish are not “tangible things” for purposes of the Sarbanes-Oaxley law:

WASHINGTON — A narrowly divided Supreme Court on Wednesday sided with a Florida fisherman, throwing out his conviction for tossing evidence — undersize grouper — back into the Gulf of Mexico under a federal law aimed mostly at white-collar crime.

The fisherman, John L. Yates, was convicted of violating the Sarbanes-Oxley Act of 2002, which imposes a maximum sentence of 20 years for the destruction of “any record, document or tangible object” in order to obstruct an investigation.

In two opinions, five justices accepted Mr. Yates’s argument that fish were not the sort of tangible objects with which the law was concerned. Their analysis was based on a close reading of the words and structure of the law.

The case arose from a 2007 search of the Miss Katie, Mr. Yates’s fishing vessel. A Florida field officer, John Jones, boarded it at sea and noticed fish that seemed less than 20 inches long, which was under the minimum legal size of red grouper at the time.

Mr. Jones, an officer with the Florida Fish and Wildlife Conservation Commission and a federal deputy, measured the fish and placed the 72 he deemed too small in a crate. He issued a citation and instructed Mr. Yates to take the crate to port for seizure.

But Mr. Yates had the fish thrown overboard and replaced with larger ones. A second inspection in port aroused suspicions, and a crew member eventually told law enforcement officials what had happened.

Mr. Yates was prosecuted under the financial fraud law, which was enacted after the collapse of Enron, the giant energy company. He was convicted and sentenced to 30 days’ imprisonment.

Justice Ruth Bader Ginsburg, writing for four justices, seemed to concede that the term “tangible objects” might in some settings encompass fish.

“Ordinarily,” she wrote, “a word’s usage accords with its dictionary definition. In law as in life, however, the same words, placed in different contexts, sometimes mean different things.”

In announcing her opinion from the bench, Justice Ginsburg used more colorful language. “Fish one may fry,” she said, “but may one falsify, or make a false entry in the sea dwelling creatures?” Chief Justice John G. Roberts Jr. and Justices Stephen G. Breyer and Sonia Sotomayor joined her opinion.

Justice Samuel A. Alito Jr. concurred on similar grounds. When one hears the term “tangible object,” he said, “a fish does not spring to mind — nor does an antelope, a colonial farmhouse, a hydrofoil or an oil derrick.”

In dissent, Justice Elena Kagan wrote that the real issue in the case, Yates v. United States, No. 13-7451, was that the law is too harsh. It is, she wrote, “too broad and undifferentiated, with too-high maximum penalties, which give prosecutors too much leverage and sentencers too much discretion.”

She added, “And I’d go further: In those ways,” the law “is unfortunately not an outlier, but an emblem of a deeper pathology in the federal criminal code.”

Still, she said, “this court does not get to rewrite the law.” She said it was “broad but clear.”

“A fish is, of course, a discrete thing that possesses physical form,” Justice Kagan wrote, citing as authority the Dr. Seuss classic “One Fish Two Fish Red Fish Blue Fish.”

It does not matter, she said, that what Mr. Yates destroyed was not a document.

Lyle Denniston summarizes the opinion, and notes that it could have closes for how the Court may rule in another case that it will hear oral argument in next month:

Aside from those flights of aquatic rhetoric, the three opinions the Court issued — the third was by Justice Samuel A. Alito, Jr., seemingly intending to narrow the scope of the outcome — will not make easy reading for ordinary readers.  They are filled with Latin phrases, and arcane musings about modes of “statutory interpretation.”  The two main opinions go on for pages in that way.

Even so, close students of the Court’s work will be poring over those opinions, in search of clues for how the Justices might line up when they confront the issue of how to interpret the language Congress used in writing the new federal health care law — an issue the Justices confront next Wednesday in the case of King v. Burwell.  There are, indeed, many clues here, but how they point on the Affordable Care Act controversy is far from clear.   The Court’s usual ideological line-up was scrambled this time, and that may not be the case on health care, whether other influences may be at work.

The case decided Wednesday involved a Florida commercial fisherman, John L. Yates, who served thirty days in jail after his conviction for violating a section of the so-called Sarbanes-Oxley Act — a law passed almost thirteen years ago to deal with the Enron Corporation accounting scandal.  That episode involved prosecutors’ claims, among others, that corporate files were destroyed when executives began to fear criminal prosecution.

Specifically at issue in the case was the Act’s provision making it a crime to destroy or alter “any record, document, or tangible object” with the aim of obstructing or influencing any federal investigation.  The Court, with Justice Alito making a fifth vote along with the four-Justice plurality in favor of only the result, focused on the phrase “tangible object” and found that it applies only to an object “used to record or preserve information.”   That, the ruling stressed, does not include a batch of red grouper tossed into the sea from a boat like the Miss Katie.

Without getting into the details of the Court’s opinion, it seems fairly clear that the majority in this case got the result correct here. Whatever one might think about the Sarbanes-Oaxley law, it was fairly clear from the beginning that the intent of the law was to address crime and fraud in the financial system. The fact that law was worded so broadly that Federal prosecutors found it possible to charge a fisherman with violating the law because he returned some fish that were apparently not legal to catch under a completely separate Federal law to the sea is simply another example of the problems that are created when a legislature drafts a law that is so overly broad that it can be conceivably used to charge someone with a crime under a law that was meant to go after Wall Street bankers rather than Gulf Coast fisherman. More likely than not, though, the prosecutors decided to use this statute as the basis for an indictment due to the fact that the most that Yates could have been charged with otherwise would have been violation of some Federal regulations that only impose a civil penalty of some kind unlike the criminal penalties that would have befallen him under Sarbanes-Oaxley. In that sense, this case is yet another example of the troubling practice of prosecutors at the Federal and state levels to overcharge defendants for the purpose of gaining leverage over them in plea negotiations. Had they merely charged Yates with violations of the appropriate Federal laws regarding overfishing, or whatever offense Yates might have committed, then this case wouldn’t have made it anywhere near the Supreme Court. Hopefully, cases like this will send a message to prosecutors not to overcharge based on such an absurdly “inventive” reading of the law.

As Denniston hints, the opinion in this case is likely to be scrutinized by many legal analysts for what it may or may not tell us about how the Court is likely to rule in King v. Burwell, the case challenging IRS regulations that allow those who have purchased health insurance in the Federal exchanges established by the Affordable Care Act to obtain the same subsidies that are available to those who purchased insurance on a state-based exchange. As I’ve noted before, the argument of the Plaintiff in that case is based largely on the wording of the PPACA itself which, at least at a basic level, appears to clearly say that subsidies are only authorized for insurance purchased on exchanges established by the individual states. As I noted at the time the Court accepted the case for appeal, a ruling in favor of the Plaintiffs could end up having serious implications for the fiscal viability of the entire PPACA scheme while a ruling in favor of the IRS would essentially mean the end of any real chance of repealing the law before President Obama leaves office. While Sarbanes-Oaxley and the PPACA are obvious very different laws, and the factual situations that the Court is presented with in these two cases is quite different, the fact that there seems to be a majority on the Court favoring a more restrictive reading of Federal law could bode ill for the Administration’s argument as we approach oral argument on Wednesday.

Here’s the Yates opinion:

Yates v. United States Opinion by Doug Mataconis

FILED UNDER: Law and the Courts
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. DrDaveT says:

    Well, bless Kagan for telling the unvarnished truth.

    I sympathize with the majority, though. Normally, the correct decision here would be to interpret words to mean what they actually mean, note that the law as written clearly applies, and leave it to Congress to fix the law. That’s a sucker’s game these days, though — Congress is wholly incapable of fixing anything, and has been for a while.




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  2. @DrDaveT:

    Normally, the correct decision here would be to interpret words to mean what they actually mean

    Except that’s not normally the correct decision, and you actually have no idea what the normally correct decision is, but you’re going to declare that it’s the normal correct decision because it gets you the policy outcome you happen to prefer.

    The actually relevant canon of statutory interpretation is “Ejusdem generis”:

    When a list of two or more specific descriptors is followed by more general descriptors, the otherwise wide meaning of the general descriptors must be restricted to the same class, if any, of the specific words that precede them. For example, where “cars, motor bikes, motor powered vehicles” are mentioned, the word “vehicles” would be interpreted in a limited sense (therefore vehicles cannot be interpreted as including airplanes).

    So when SOX says “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object”, “tangible object” should be interpreted to be limited to the same class as “record” and “document”, not literally any tangible object. Which is exactly what the majority ruled.




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  3. Tyrell says:

    The purpose of the law is to preserve fish populations by making sure small fish don’t wind up at some restaurant or home freezer. In this case the fisherman threw the fish back in and caught larger ones. So the wee little fish went back to the sea. The case should have ended right there and the charge dropped before it got to court.




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  4. Dave Schuler says:

    There’s another larger question here. Note that the Feds are using Sarbanes-Oxley, of all things, to go after small fry. How many prosecutions of large companies or their CEOs have been conducted over the period of the last 14 years under Sarb-Ox? Shouldn’t the CEOs of every bank that engaged in illegal practices during the housing boom have been prosecuted? They’re supposed to sign off on everything that goes on in their enterprises.

    The whole thing is like cracking down on the corner drug dealers while ignoring the drug kingpins. Is that really the best and most effective use of scarce enforcement resources?




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  5. gVOR08 says:

    @DrDaveT: I think the Court basically got this right and I can’t speak to the whole opinions, but in the quotes above, only Kagan makes any logical sense.

    Ginsburg: “…may one falsify, or make a false entry in the sea dwelling creatures?” Sarbanes-Oxley said “documents”, not falsified documents, and obviously unfalsified documents may be relevant evidence.

    Alito: “When one hears the term “tangible object,” he said, “a fish does not spring to mind…”” Actually, “tangible object” is such an all-inclusive term that nothing specific actually springs to mind.

    And in principle I agree with you, the Court should have said, “Sorry Yates, you’re screwed. And Congress, you have work to do.” On the other hand, inviting the current Congress to mess about in S-O does not seem like a very good idea.




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  6. Ken says:

    @Tyrell: In this case the fisherman threw the fish back in and caught larger ones. So the wee little fish went back to the sea. The case should have ended right there and the charge dropped before it got to court.

    Indeed. And the purpose of laws against robbery are to keep the money in the hands of its rightful owners. So if a bank robber feels bad and returns the money after he is released on bail, the case should end right there, and the charge dropped before it gets to court




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  7. Franklin says:

    @DrDaveT:

    Normally, the correct decision here would be to interpret words to mean what they actually mean

    I’m not a lawyer, so I don’t know what goes on in their bizarre little world. But in the real world, interpreting words requires context, no? If so, then the majority *did* interpret the words to mean what they actually meant.




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  8. Gustopher says:

    Are there not laws about obstructing justice and destroying evidence already on the books, predating SOX by many, many years?




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  9. Gustopher says:

    @Tyrell:

    The purpose of the law is to preserve fish populations by making sure small fish don’t wind up at some restaurant or home freezer. In this case the fisherman threw the fish back in and caught larger ones. So the wee little fish went back to the sea. The case should have ended right there and the charge dropped before it got to court.

    First, the wee little fish are most likely dead.

    Second, a crime does not disappear if you simply provide restitution or fix the damage. If someone broke into your house and stole a TV, should charges be dropped if they were to break into your house again and put the TV back?

    Third, there has to be a greater deterrent than “put the fish back” — not all ships are inspected, etc. You need to make the expected value of breaking the law greater than the expected value of following the law.

    Fourth, this is still destruction of evidence and obstruction of justice.




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  10. Turgid Jacobian says:

    @Dave Schuler:
    Note that the Feds are using Sarbanes-Oxley, of all things, to go after small fry

    literally




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  11. JWH says:

    Can you imagine the poor contract attorneys who’d get called in for these cases? “Is this case ESI?” “Nope.” “hard copy?” “Nope.” “What is it, then?” “We need you to review 25,000 fish … “




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  12. stonetools says:

    Way OT, but have to post this:

    Former Arizona county sheriff Richard Mack, a fierce opponent of Obamacare and a leader in the “constitutional sheriff” movement, is struggling to pay his medical bills after he and his wife each faced serious illnesses. The former sheriff and his wife do not have health insurance and started a GoFundMe campaign to solicit donations from family and friends to cover the costs of their medical care.

    “Because they are self-employed, they have no medical insurance and are in desperate need of our assistance,” reads a note on Mack’s personal website.

    Mack, the founder of the Constitutional Sheriffs and Peace Officers Association, suffered a heart attack in January and is in recovery. His wife fell ill late last year. Mack is on the board of Oath Keepers, a right-wing fringe group made up of police and military veterans, and is known for supporting Cliven Bundy in his standoff against the federal government. He is also an ardent opponent of Obamacare.

    I wonder if it’s possible to OD on schadenfruede?

    So here we have a conservative mugged by reality. Having been hit by serious illness, he now knows exactly why Obamacare is a good solution for self-employed. Now this jackass will most likely be bailed out by some rich donor, so shed no tears for him, but there are millions like him who will not be so fortunate if the Supreme Court buys the specious arguments of the Burwell plaintiffs.
    As to the above, the Prosecutors were trying to stretch a statute intended to focus on financial fraud to cover a completely different situation. In the Burwell case, the time honored, conservative ruling would be interpret the statute in a way so as to achieve the intent of the statute. Nobody, outside Cannon, Adler, and their circle of sociopaths, believes that the intent of legislators was to limit subsidies only to state exchanges.That’s the difference.




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  13. Dave Schuler says:

    @Turgid Jacobian:

    I choose my words carefully.




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  14. DrDaveT says:

    @Stormy Dragon:

    “tangible object” should be interpreted to be limited to the same class as “record”

    I’m aware of that; my quibble (and perhaps Kagans?) is with the interpretation of ‘record’, not whether the scope of “tangible object” should be broader than the rest of the list.

    To me, the fish on the boat are the (or at least a) record of the catch. Substituting fish is, indeed, making a false entry in a record, which (in this case) takes the form of tangible objects.

    ….but as I said above, as a practical matter I’m fine with the majority decision.




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  15. Tyrell says:

    @Gustopher: The goal of justice is to balance things out, to restore what used to be: hence restitution. The little fish are returned to their place to grow larger. No damage done. The fisherman brings in fish of the proper size. No harm is done. Things are restored. If the fisherman was charged then he becomes the victim. He has committed a crime only if he keeps the small fish. Charging him after he has set the little fishies free only upsets the balance: it would take a good situation and make it bad. Justice seeks to remedy a loss, mitigate damages. In this case no one has been harmed unless the fisherman is charged for correcting an imbalance. Why charge him with trying to correct things and make them right ? In fact he has already “paid the time” by the extra work and time involved in setting the little fish free and having to catch larger fish, not to mention the risk of possible injury, or that the big fish are not biting, or are not around that day, so then he has lost income. Hence he is then the victim and he has a case against the state. Now how about that ?
    And that is what I would argue in court.




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  16. Harvardlaw92 says:

    @Tyrell:

    Yet again – the little fishies were almost certainly dead when he threw them back in the water …




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  17. DrDaveT says:

    The little fish are returned to their place to grow larger. No damage done.

    Um, my understanding is that the little fish that were thrown overboard were dead, and thus not likely to grow larger. The fisherman was not righting his error; he was hiding the bodies. If I’m wrong about that, someone please correct me.




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  18. Grewgills says:

    @Tyrell:
    You do realize that 72 fish piled in a crate were not alive and capable of swimming off to see and breeding don’t you?




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  19. Tyrell says:

    While a few of the little fish may have not been alive, it could very well be that most were alive and flopping around.




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  20. Buffalo Rude says:

    Mr. Jones, an officer with the Florida Fish and Wildlife Conservation Commission and a federal deputy, measured the fish and placed the 72 he deemed too small in a crate. He issued a citation and instructed Mr. Yates to take the crate to port for seizure.

    I think I found the procedural error that precipitated this case.

    That’s just mind blowing. Imagine a cop telling someone “just put that marijuana back in your pocket and meet me down at the station so I can seize it.”




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  21. Tony W says:

    @Tyrell:

    While a few of the little fish may have not been alive, it could very well be that most were alive and flopping around.

    Well, then by all means let the man go! It’s not like he was selling untaxed cigarettes or something




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  22. Tyrell says:

    @Tony W: Certainly this man did not deserve any sort of jail time. A fine would be appropriate, and a small one at that. I know of some people over the years who got in trouble for fishing with illegal bait or not having an up to date fishing license. 30 days ?
    Totally ridiculous. Especially when you have drug dealers, gang members, and thieves roaming around loose.
    If you throw the fish back in, no damage done, the scales of justice are balanced, case over. The idea that a federal court would even consider this bizarre ludicrousosity is absurd. I guess next will be the case of the lemonade stand that did not charge tax or some kids selling Girl Scout cookies on the street without a permit !
    This fish story is over.




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  23. Grewgills says:

    @Tyrell:
    Tyrell,
    He was a commercial fisherman and the type of activity he was engaged in destroys fish stocks. He wasn’t an angler out for the day that accidentally caught a few undersized fish and threw them back alive to swim away when caught. He caught dozens of what he knew were undersized stock and threw them in crates, where they died, to bring to market illegally. Dead fish don’t swim off to reproduce when you toss them back. Fish stocks when overfished and the young culled too early can collapse destroying the livelihood of hundreds or thousands of people in addition to the ecological harm done. Elements of this have been pointed out to you several times. Why do you insist on pretending this was some sort of Andy Griffith episode?




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