Friday, September 18, 2015
Just days ago, DOJ came down with a new corporate directive (discussed here) describing a shift in investigation policy. The new focus would be on the prosecution of individuals within the entity. It states:
"2. Both criminal and civil corporate investigations should focus on individuals from the inception of the investigation.
Both criminal and civil attorneys should focus on individual wrongdoing from the very beginning of any investigation of corporate misconduct. By focusing on building cases against individual wrongdoers from the inception of an investigation, we accomplish multiple goals. . . . "
So much for this new policy, as the GM Deferred Prosecution Agreement comes before any individual prosecutions. (see Corporate Crime Reporter here). It has the company paying $900 million, accepting responsibility, agreeing to cooperate, and providing information to the government.
Both the old DOJ approach and this new one, that seems to exist only on paper and not in practice, have problems. Both have the company serving as "agents" of the government. Both have the company doing the investigative work for the DOJ. Both have the company "throwing employees under the bus." And both show a disrespect for individual attorney-client relations.
Corporate and individual criminal actions are a problem that needs to be corrected. But as previously said, pitting the entity against its constituents will not correct misconduct. And telling the public that you intend to take a different approach and just days after you do the opposite fosters a lack of trust. It also demonstrates the importance of Congressional action as opposed to reliance on DOJ internal guidelines.
Tuesday, September 15, 2015
Striking the Right Balance: Criminal v. Civil Law Sanctions
National Association of Criminal Defense Lawyers (NACDL), Foundation of Criminal Justice (FCJ), Constitution Project (TCP)
Moderator Professor Lucian Dervan (Southern Illinois School of Law)
Panelists - Adeel Bashir (Office of the Federal Defender, Middle District of Florida), John Lauro (Lauro Law Firm), & Marjorie Peerce (Ballard Spahr)
Wednesday, September 16, 2015 from 12:00 PM to 1:15 PM (EDT) For more information see here.
Monday, September 14, 2015
I have just released a new article discussing the sentencing of Jordan Belfort, better known as the "Wolf of Wall Street." I use this case as a mechanism for considering how white collar sentencing has evolved from the 1980s until today. In particular, the article examines the growth in uncertainty and inconsistency in sentences received by major white collar offenders over this period of time and considers some of the reasons for this trend. The article also examines the impact of recent amendments adopted by the U.S. Sentencing Commission on white collar sentences.
Lucian E. Dervan, Sentencing the Wolf of Wall Street: From Leniency to Uncertainty, 61 Wayne Law Review -- (2015).
This Symposium Article, based on a presentation given by Professor Dervan at the 2014 Wayne Law Review Symposium entitled "Sentencing White Collar Defendants: How Much is Enough," examines the Jordan Belfort (“Wolf of Wall Street”) prosecution as a vehicle for analyzing sentencing in major white-collar criminal cases from the 1980s until today. In Part II, the Article examines the Belfort case and his relatively lenient prison sentence for engaging in a major fraud. This section goes on to examine additional cases from the 1980s, 1990s, and 2000s to consider the results of reforms aimed at “getting tough” on white-collar offenders. In concluding this initial examination, the Article discusses three observed trends. First, today, as might be expected, it appears there are much longer sentences for major white-collar offenders as compared to the 1980s and 1990s. Second, today, there also appears to be greater uncertainty and inconsistency regarding the sentences received by major white-collar offenders when compared with sentences from the 1980s and 1990s. Third, there appear to have been much smaller sentencing increases for less significant and more common white-collar offenders over this same period of time. In Part III, the Article examines some of the possible reasons for these observed trends, including amendments to the Federal Sentencing Guidelines, increased statutory maximums, and judicial discretion. In concluding, the Article offers some observations regarding what the perceived uncertainty and inconsistency in sentencing major white-collar offenders today might indicate about white-collar sentencing more broadly. In considering this issue, the Article also briefly examines recent amendments adopted by the U.S. Sentencing Commission and proposed reforms to white-collar sentencing offered by the American Bar Association.
Wednesday, September 9, 2015
The new DOJ Policy (see here for the NYTimes story that includes DOJ Policy) makes the current practice of corporations "throwing employees under the bus," official. It states, "[t]o be eligible of any cooperation credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct." Corporations have received deferred and non-prosecution agreements (DPAs and NPAs) that often provide for the corporation cooperating with the government in the investigation of alleged criminally culpable individuals. Now it is clear that to obtain "any" cooperation credit it will be necessary to provide the evidence against these individuals.
Three concerns here:
1) what is meant by providing "all relevant facts"? Does this mean only information that is relevant to the government's case against the individuals? Will the government also be asking for Brady material that might be exculpatory for the individuals? Does this mean that the corporation now is officially a member of the government team?
2) what does this mean for the corporate culture? The concept of the individuals in the company working together, asking for legal advice from corporate counsel, and working to resolve problems in an open environment may now be officially over. This policy pits the corporation against the individual. Is this a wise approach to correcting business misconduct?
3) does this make it more important that there be fairness in internal investigations? See here for a discussion of the importance of fairness in internal investigations.
Interestingly, the new policy calls for starting with the individual and also calls for sharing information between civil and criminal attorneys. It also requires "a clear plan to resolve related individual cases before the statute of limitations expires and declinations as to individuals in such cases must be memorialized." This is a clear message that individual prosecutions are now a priority.
The message to white collar criminal defense attorneys - corporate prosecutions may no longer be the focus. Get ready for more prosecutions against individuals.
Check out the NY Times article, Matt Apuzzo & Ben Protess, New Justice Dept. Rules Aimed at Prosecuting Corporate Executives .
Monday, September 7, 2015
Registration is now open for the Inaugural ABA Criminal Justice Section Global White Collar Crime Institute, which will take place November 19-20, 2015 at the Ritz-Carlton Shanghai Pudong in Shanghai, China. The event is done in collaboration with the KoGuan Law School of the Shanghai Jiao Tong University. I am honored to serve as the Institute Chair and hope to see many of our blog readers at the event.
This conference will be an incredible opportunity to interact with prosecutors, judges, defense counsel, accountants, in-house counsel, and academics from the U.S., China, and other parts of the world as they convene to discuss the complexities of international white collar crime.
More from the registration website:
The goal of the conference is to bring the energy and excitement of our previous international white collar crime conferences to Asia and create unique opportunities for our participants to network and explore the legal complexities of white collar crime in the growing Chinese legal market. Conference topics will include:
- General Counsels’ Roundtable
- Enforcers' Roundtable
- How to Conduct an International Internal Investigation
- Recent Developments in Global Antitrust Cartel Enforcement and Anticipated Implications for China and Asia
- Comparative Legal Systems & Special Enforcement Issues in China, the US & Beyond
- Year in Review: Lessons Learned from Recent White Collar Crimes Prosecutions in China & the US
- Trends Regarding Anti-Corruption Enforcement in China & the US
- Cyber Crime & Virtual Currencies
- Social Responsibility of Corporations
LUNCHEON KEYNOTE SPEAKER – November 19
Sung-Hee Suh, U.S. Deputy Assistant Attorney General
Suh was appointed in Sept. 2014 as the U.S. Department of Justice's Deputy Assistant Attorney General overseeing the Criminal Division's Fraud, Appellate and Capital Case Sections. She re-joined the Department after 15 years in private practice at Schulte Roth & Zabel LLP in New York, where she was a partner in the Litigation group and focused on representing institutions and individuals in financial fraud, securities regulatory, Foreign Corrupt Practices Act, anti-money laundering and sanctions matters.
The complete program is also now available on the ABA CJS registration website.
Thursday, September 3, 2015
Earlier this year, the Wall Street Journal ran an interesting story about several cases in which U.S. courts refused to recognize the attorney-client privilege for communications between in-house counsel and overseas companies. The article focused on two cases in particular – Wultz et al. v. Bank of China Limited and Anwar et al. v. Fairfield Greenwich Limited.
Just recently, Janet Levine, Gail Zirkelbach, Derek Hahn, and Danielle Rowan wrote an article in the Summer 2015 edition of the ABA CJS Criminal Justice magazine on the topic of The Evolving Landscape of Legal Privilege in Internal Investigations. Along with the Bank of China case, the article provides summaries of three other cases involving the privilege issue during internal investigations – In re Kellogg Brown & Root, Inc. (KBR) (previously discussed on this blog here and here), Wal-Mart Stores, Inc. v. Ind. Elec. Workers Pension Trust Fund IBEW (previously discussed on this blog), and Paterno v. NCAA).
As an update to the above excellent reads, it is important to note that the U.S. Court of Appeals for the District of Columbia recently released another opinion in the KBR matter. This opinion vacated additional orders by the District Court that would have required KBR to turn over the materials at issue in the case. See In re Kellogg Brown & Root, Inc., -- F.3d –, 2015 WL 4727411 (August 11, 2015).
According to the appellate court in the new KBR opinion:
More than three decades ago, the Supreme Court held that the attorney-client privilege protects confidential employee communications made during a business’s internal investigation led by company lawyers. See Upjohn Co. v. United States, 449 U.S. 383, 101 S. Ct. 677, 66 L. Ed. 2d 584 (1981). In this case, the District Court denied the protection of the privilege to a company that had conducted just such an internal investigation. The District Court’s decision has generated substantial uncertainty about the scope of the attorney-client privilege in the business setting. We conclude that the District Court’s decision is irreconcilable with Upjohn. We therefore grant KBR's petition for a writ of mandamus and vacate the District Court's March 6 document production order.
The issue of attorney-client privilege in the internal investigation context is one that is growing in both complexity and significance. Keep an eye out for more court decisions on this issue in the future as companies, attorneys, and courts struggle to find a balance in today’s complex legal and business environment.
Wednesday, August 26, 2015
Once again, the ABA Criminal Justice Section Academics Committee will host work-in-progress roundtables at the annual Criminal Justice Section Fall Institute in Washington, DC. The roundtables will be held on Thursday, October 22, 2015 from 12:30-3:00pm at the Loews Madison Hotel, and the ABA will provide sandwiches and drinks for lunch. The rest of the CJS Fall Institute programs will take place later in the day on Thursday, October 22 and on Friday, October 23 at the same hotel.
We hope you will consider workshopping your criminal justice works-in-progress at these roundtables. Participants will present their work in a roundtable format, and abstracts or drafts will be shared among presenters and discussants in advance of the workshop. If you’re interested in participating, please email an abstract of your paper of no more than 500 words to Lucian Dervan at firstname.lastname@example.org by Sept. 15, 2015. Space is limited, and presenters will be chosen by members of the organizing committee.
This is an excellent opportunity for academics at any stage of their careers, and for those who would like to transition to academia, to workshop pieces at an early stage of development or obtain feedback on more developed pieces. Workshop presenters will be responsible for their own travel and hotel costs, but there is no registration fee for participating in the roundtables. If you decide to participate in the remainder of the ABA CJS Fall Institute, you will need to register for that event separately.
We are also excited to note that this year’s workshop will begin with a brief opening address by Professor Stephen A. Saltzburg of the George Washington University Law School. Professor Saltzburg will discuss how to create and execute a productive and impactful research agenda. Professor Saltzburg is one of the nation’s leading scholars and has authored over twenty books and over 100 articles. Professor Saltzburg’s talk is not to be missed.
The Criminal Justice Section has secured a special room rate of $269 single/double per night at the Lowes Madison Hotel. This rate can be reserved by calling 855-255-6397 and referring to the “ABA Criminal Justice Section Fall Institute.” You can also book online. Reservations must be made by Thursday, October 1, 2015 at 5:00pm EST to secure this rate.
Please spread the word to those who might be interested, including those not yet in academia. We have included below some information regarding last year’s workshop. We hope to see everyone in D.C. at the end of October.
All the best,
Lucian E. Dervan (SIU Law) and Meghan J. Ryan (SMU Law)
Co-Chairs, ABA CJS Academics Committee
Information Regarding Last Year’s Roundtable
On October 23, 2014, the ABA Criminal Justice Section Academics Committee hosted academic roundtables at the ABA Criminal Justice Section Seventh Annual Fall Institute. At these roundtables, scholars from across the country discussed papers on topics ranging from big data’s effect on jury selection to whether second-look sentencing is consistent with the asserted purposes of the Model Penal Code. Participants in the academic roundtables included Joanmarie Davoli (Florida Coastal, now Fed. Soc.), Cara Drinan (Catholic), Andrew Ferguson (Univ. of D.C.), Lea Johnston (Florida), Kevin Lapp (Loyola LA), Ion Meyn (Wisconsin), Steve Morrison (North Dakota), Anthony O’Rourke (Buffalo), and Meghan Ryan (SMU).
Here is a sampling of the great work they presented:
The Miller Revolution, by Cara Drinan (forthcoming in the Iowa L. Rev.)
In a series of cases culminating in Miller v. Alabama, the United States Supreme Court has limited the extent to which juveniles may be exposed to the harshest criminal sentences. In this Article, I argue that the Miller trilogy has revolutionized juvenile justice. While we have begun to see only the most inchoate signs of this revolution in practice, this Article endeavors to describe what this revolution may look like both in the immediate term and in years to come. Part I demonstrates how the United States went from being the leader in progressive juvenile justice to being an international outlier in the severity of its juvenile sentencing. Part II examines the Miller decision, as well as its immediate predecessor cases, and explains why Miller demands a capacious reading. Part III explores the post-Miller revolution in juvenile justice that is afoot. Specifically, Part III makes the case for two immediate corollaries that flow from Miller, each of which is groundbreaking in its own right: 1) the creation of procedural safeguards for juveniles facing life without parole (“LWOP”) comparable to those recommended for adults facing the death penalty; and 2) the elimination of mandatory minimums for juveniles altogether. Finally, Part III identifies ways in which juvenile justice advocates can leverage the moral leadership of the Miller Court to seek future reform in three key areas: juvenile transfer laws; presumptive sentencing guidelines as they apply to children; and juvenile conditions of confinement.
Strictissimi Juris, by Steve Morrison (67 Ala. L. Rev. __ (forthcoming 2015)
Guilt by association is universally rejected, but its criticisms are always based on the substantive due process right to individual, not imputed, liability. The rule of strictissimi juris promises to be the procedural counterpart to the substantive right. Its promise, however, has gone unfulfilled because it is little understood or developed. This article provides a descriptive, prescriptive, and contextual dissertation on strictissimi juris. Descriptively, it provides the jurisprudential foundation and definition of strictissimi juris. Prescriptively, it sets forth the purposes for which lawyers and courts have invoked strictissimi juris, thus providing a guide for how future lawyers might invoke strictissimi juris, and courts apply it. Contextually, it analogizes strictissimi juris to substantive canons that play important roles in the separation of powers.
Thursday, August 13, 2015
On Wednesday, Judge Berman of the Southern District of New York issued an order preliminarily enjoining the SEC from pursuing an administrative proceeding – an in-house trial before an SEC administrative law judge (“ALJ”) rather than an Article III judge – against Barbara Duka, a former Standard & Poor’s executive whom the SEC has accused of securities fraud. The order finds that the SEC’s process for appointing its ALJs is “likely unconstitutional in violation of the Appointments Clause,” marking the third preliminary injunction issued by a federal district court that has come to the same conclusion in recent months – and the first such injunction issued from the SDNY, the putative center of the universe of securities enforcement. The constitutionality of SEC ALJs’ appointments is apparently in grave doubt. This issue has the potential to bring the SEC’s use of administrative proceedings (“APs”) to a halt; indeed, it could impact administrative proceedings in any number of agencies beyond the SEC as well.
The SEC publicly has trumpeted its increased reliance on its ALJ system as part of the agency’s overall goal of pumping up enforcement because of its perceived efficiency – at least from the perspective of the government. For the past several years, the SEC has brought the vast majority of its enforcement actions before its ALJs. The SEC’s success rate in cases before ALJs has been a startling 90% over the past 4.5 years, compared with 69% in federal court over the same period. This is perhaps unsurprising, given the procedural advantages the SEC enjoys in its APs: unlike in federal court, SEC APs involve no jury; discovery for respondents is seriously limited – contrasting sharply with the SEC’s ability to collect evidence, sometimes over the course of years, via subpoena; respondents are generally afforded no more than four months to review the case and prepare for trial; the Federal Rules of Evidence do not apply; and traditionally-inadmissible evidence routinely is considered: “[A]ll evidence that can conceivably throw any light upon the controversy at hand should normally be admitted.” In the Matter of Jay Alan Ochanpaugh, Exchange Act Rel. No. 54363, 2006 SEC LEXIS 1926, *23 n.29 (Aug. 25, 2006) (citing In the Matter of Jesse Rosenblum, 47 S.E.C. 1065, 1072 (1984)). The SEC has turned to its ALJ system to pursue complex cases, including insider trading cases, that historically had been reserved for resolution in federal district court. Anecdotal reports also strongly suggest that the SEC has invoked its perceived advantages before ALJs during settlement negotiations with potential respondents. Thus, the current ALJ system not only provides the SEC with concrete procedural advantages during actual litigation, but the mere threat of the current ALJ system bestows upon the SEC a less concrete but potentially extremely potent weapon to use, behind the scenes, to convince its targets to never litigate in the first place.
Against this backdrop, parties threatened with or subject to SEC administrative proceedings recently have argued, inter alia, that the SEC’s ALJ appointment process violates the Constitution’s Appointments Clause of Article II, which requires that “inferior officers” of the United States be appointed by the President, a Court of Law, or the Head of a Department. This argument should prevail if both (1) SEC ALJs are indeed “inferior officers,” and (2) they are not appointed by the President, a Court, or the Head of a Department. As to the second question, the SEC already has conceded that its ALJs are appointed via a selective service process, which “would be inconsistent with the terms of the Appointments Clause” if the ALJs are inferior officers. And as to the first question – whether the SEC ALJs are inferior officers – the Northern District of Georgia, and now the Southern District of New York, have confirmed in separate cases that closely-analogous Supreme Court precedent “mandates a finding that the SEC ALJs . . . [are] inferior officers.” Hill v. SEC, No. 15-cv-1801-LMM, 2015 U.S. Dist. LEXIS 74822, at *52 (N.D. Ga. June 8, 2015); Gray Financial Group v. SEC, No. 15-cv-492-LMM (N.D. Ga. Aug. 4, 2015); Duka v. SEC, No. 1:15-cv-357 (S.D.N.Y. Aug. 12, 2015). The Supreme Court precedent at issue is Freytag v. Comm’r, 501 U.S. 868, 881 (1991), in which the Court held that special tax trial judges, due to their ability to “exercise significant discretion,” are inferior officers under Article II. The legal conclusion by Judge Berman that SEC ALJs are inferior officers draws particular strength from Second Circuit precedent: in Samuels, Kramer & Co. v. Commissioner of Internal Revenue, 930 F.2d 975 (2d Cir. 1991), the Second Circuit anticipated the Supreme Court’s decision in Freytag, issued only three months later, when it addressed the same issue and reached an identical holding, through similar reasoning.
This legal conclusion is also entirely consistent with the actual powers enjoyed by ALJs, which are parallel to those of a trial court judge presiding over a bench trial: he or she has the power and discretion to rule on any motions, including pre-trial motions for summary disposition; conduct trials and take testimony; order production of evidence and rule on admissibility questions; issue subpoenas and rule on applications to quash; sanction parties if they are in contempt; enter orders of default; take notice, where appropriate, of facts not appearing in the record; and grant extensions of time and dismiss for failure to meet deadlines. The SEC ALJ decides whether the respondent has violated the law. That decision is appealable to the Commission itself, although in many cases the Commission can simply deny a petition for review. If the decision is not appealed, or if the Commission declines to review the ALJ’s decision, the SEC enters an order that the ALJ’s decision has become final. The respondent then may appeal to the federal Court of Appeals, albeit on a standard of review that is generally very favorable to the SEC, which so far has entirely handled the proceeding.
The issue is still working its way through the courts – no Court of Appeals has yet weighed in – but it is gaining traction. What is the potential practical effect if the courts ultimately conclude that the SEC’s ALJs are unconstitutionally appointed? This is a complex question, on which we already have written at length. In short, it appears that parties who have lost on appeal, or whose time to appeal has expired, likely will be unaffected. However, parties whose adjudications are not yet final may be able to void their adjudications. As to parties against whom the SEC may in the future bring APs, the SEC theoretically has available the easy fix of simply re-appointing its ALJs under a constitutionally-adequate process and proceeding as normal. But this issue has been percolating for months, and the SEC – represented by the DOJ –has declined to exercise this option. Indeed, in its response to an order in the Duka case which “allow[ed] the SEC the opportunity to notify the Court of its intention to cure any violation of the Appointments Clause,” the SEC was conspicuously silent as to any plan to address the issue. Thus, it appears that the SEC will continue, at least for the foreseeable future, to employ an enforcement process that runs a significant risk of being declared entirely unconstitutional.
One potential explanation for the SEC’s reticence to cure its growing problem is that any such move could be perceived as a concession that past practices were improper. Moreover, the government at large, including the DOJ, which often serves as the litigation arm for many different agencies and departments, may face a more global quandary because this issue is not necessarily limited to just SEC ALJs; rather, it may imperil the legitimacy of many ALJs across the government. Until the SEC – and possibly other agencies and departments – resolve this problem, bringing enforcement actions in federal court may be the only way to ensure that resources are used effectively, rather than pursuing judgments that ultimately may be voided.
(ph, ar, & ck)
Wednesday, July 22, 2015
John Quincy Adams and Henry Clay can rest quietly in their graves. Their "corrupt bargain" would not be considered a federal crime today. The same goes for Ike and Earl Warren. In United States v. Blagojevich, decided yesterday by the Seventh Circuit and discussed here by contributing editor Lucian Dervan, the panel vacated five counts of conviction based on partially faulty jury instructions. Under those instructions, the jury could have convicted the former Illinois Governor based on his attempt to obtain a Cabinet seat in the incoming Obama Administration in exchange for appointing Valerie Jarrett to President Obama's soon-to-be-empty Senate seat. This was just logrolling and Judge Easterbrook and his colleagues were having none of it. "It would be more than a little surprising to Members of Congress if the judiciary found in the Hobbs Act, or the mail fraud statute, a rule making everyday politics criminal." The same was true of the Government's efforts to shoehorn the Cabinet seat/Jarrett offer into 18 U.S.C. 666--the notorious mark of the beast. Altogether a sound public policy decision, although the statutory analysis is not as clear cut.
Tuesday, July 21, 2015
The Seventh Circuit has overturned five of 18 counts against former Illinois Governor Rod Blagojevich. While the government could pursue a third trial on the overturned counts, it is more likely that the former Governor will simply be re-sentenced on the remaining convictions. It is unclear whether the ruling will result in a different sentence for Blagojevich, who was sentenced to 168 months in prison after his conviction in 2011. Judge Frank Easterbrook, writing for a unanimous three judge panel, wrote, "It is not possible to call the 168 months unlawfully high for Blagojevich's crimes, but the district judge should consider on remand whether it is the most appropriate sentence." Blogojevich will not be released awaiting his re-sentencing on the counts. The Appellate Court stated, "Because we have affirmed the convictions on most counts and concluded that the advisory sentencing range lies above 168 months, Blagojevich is not entitled to be released pending these further proceedings."
Tuesday, July 14, 2015
Ellen Podgor and I have just released a new article discussing the complexities of defining the term “white collar crime.” The ability to define and identify white collar offenses is vital, as it allows one to track, among other things, the number of these cases prosecuted each year, the frequency with which particular types of charges are brought in these matters, and the sentences imposed on those convicted. This new article begins with a brief historical overview of the term “white collar crime.” The piece then empirically examines several specific crimes to demonstrate that statutory approaches to defining and tracking white collar offenses are often ineffective and inaccurate. The article then concludes by recommending that the U.S. Sentencing Commission adopt a new multivariate definitional approach that recognizes the hybrid nature of many white collar offenses. The final version of the article will appear next year in Volume 50 of the Georgia Law Review.
Ellen S. Podgor and Lucian E. Dervan, “White Collar Crime”: Still Hazy After All These Years, 50 Georgia Law Review -- (forthcoming 2016).
With a seventy-five year history of sociological and later legal roots, the term “white collar crime” remains an ambiguous concept that academics, policy makers, law enforcement personnel and defense counsel are unable to adequately define. Yet the use of the term “white collar crime” skews statistical reporting and sentencing for this conduct. This Article provides a historical overview of its linear progression and then a methodology for a new architecture in examining this conduct. It separates statutes into clear-cut white collar offenses and hybrid statutory offenses, and then applies this approach with an empirical study that dissects cases prosecuted under hybrid white collar statutes of perjury, false statements, obstruction of justice, and RICO. The empirical analysis suggests the need for an individualized multivariate approach to categorizing white collar crime to guard against broad federal statutes providing either under-inclusive or over-inclusive examination of this form of criminality.
Friday, July 10, 2015
Though it may come as no surprise given his long history with the firm, Covington & Burling has announced that former United States Attorney General Eric Holder will return to the firm. Holder previously worked at the firm from 2001 to 2009. According to the release, Holder will be in the "firm’s Washington office and focus on complex investigations and litigation matters, including matters that are international in scope and raise significant regulatory enforcement issues and substantial reputational concerns."
Holder also recently gave an interview to The American Lawyer, in which he discusses his return to private practice and his plans to work on a mix of projects at the firm, including pro bono and access-to-justice issues. In addition, The American Lawyer published an article on the subject of Holder's return.
Tuesday, June 30, 2015
Walt Pavlo (500 Pearl Street) and Jack Donson (former BOP Case Manager) developed a unique interactive website to educate lawyers on what a client needs to know about the prison experience. Check it out here. They state, "[p]risonology's intuitive website provides an easy to read narrative, a video interview with an expert on the topic, links to BOP and US Probation policies, tips, and written experiences from those who have gone through the process. It has everything a client needs to be informed and prepared." It is wonderful to see technology being used to educate lawyers so that they can be in a better position to advise and inform their clients.
Tuesday, June 9, 2015
Three years ago, I wrote a lengthy blog piece about U.S. v. Daguerdas, a case in which a SDNY judge ordered a new trial for three of four defendants because of juror misconduct. ("Lying Juror Requires New Trial in Tax Fraud Case," July 12, 2012). The judge denied a new trial for the fourth defendant, Parse, because his lawyers, said the judge, knew or should have known of the juror's misconduct and chose not to report it to the court, and thus Parse waived the misconduct. On appeal to the Second Circuit, U.S. v. Parse (13-1388, June 8, 2015)), the Court, with Judge Amalya Kearse writing the majority opinion, reversed Parse's conviction and remanded for a new trial as to him also.
The Court spent a considerable time reviewing the record to conclude that the district court's factual findings (by Judge William Pauley) that prior to the verdict the lawyers knew about the misconduct or failed to exercise due diligence to determine whether it had occurred was "clearly erroneous" and "unsupported by the record." This ruling, with which Judge Chester Straub, while concurring in the reversal, disagreed, I am sure gave some measure of relief to the trial lawyers, from the firm of Brune and Richard, whom Judge Pauley had chastised. Those lawyers appeared to have been faced with the difficult dilemma of whether and when a lawyer is obliged to report suspected misconduct by a trial participant that is likely to be favorable to her client and to have chosen not to report something that would have diminished his (and their) chance of winning. (It is also possible that during the heat and travail of trial the lawyers never focused on the reporting issue.)
This ethical/practical dilemma arises, for instance, when an attorney suspects or believes - but lacks actual knowledge - about trial misconduct, whether minor misconduct such as a juror engaging a defendant in casual conversation outside a courtroom despite a court admonition, or major misconduct such as a witness or defendant perjuring himself. Reporting the misconduct would likely result in removing a potentially favorable juror in the first example and in striking favorable testimony and severely limiting the defense in the second, in both cases lessening the client's (and attorney's) chance of a favorable outcome.
The Court declined to adopt a general rule, as requested by the defendant and amicus New York Council of Defense Lawyers, that lawyers (including prosecutors presumably) need not bring juror misconduct to the attention of the court unless counsel actually knew that such misconduct had occurred. Nonetheless, I suspect lawyers will cite the case for that specific proposition and the broader proposition that lawyers need not report any trial misconduct unless they have actual knowledge.
Interestingly, the extensive, case-specific factual analysis about the extent of the attorneys' knowledge of the juror's misconduct was unnecessary to the Court's decision, as both the two-judge majority and concurring opinions demonstrated. Even assuming the district court was correct in its negative evaluation of the attorneys' conduct, the Court found the denial to Parse of his basic Sixth Amendment right to an impartial jury by the improper presence of the lying juror was so significant that it could not be, as the district court had found, "waived" by the lawyers' conduct, and warranted reversal.
Monday, June 8, 2015
"The highest ranking BP exec charged in the fatal 2010 Deepwater Horizon disaster," was acquitted on Friday after two hours of jury deliberations. Initially charged with false statements and Obstruction of Congress, the court dismissed the obstruction charge, leaving the jury to consider the false statements charge. Interestingly the dismissal of the obstruction charge was "after three members of Congress and six staffers subpoenaed by" the accused "sought to be kept from having to testify, citing the speech and debate clause in the U.S. Constitution." (Steptoe & Johnson LLP here). The case was handled on the defense side by Brian Hererlig and Reid Weingarten.
Saturday, June 6, 2015
The DOJ has prosecuted many companies, often resolving the cases with Deferred and Non-Prosecution Agreements. And on occasion, states have also proceeded against companies alleging corporate criminal liability. But how far does entity liability go, and can you extend corporate criminality to entities like the Archdiocese of St. Paul and Minneapolis. According to Jean Hopfensperger's article in the Star Tribune, Archdiocese Charged in Sex Abuse Coverup, the Ramsey County Attorney's Office has filed these charges against this entity and that the entity reports it will cooperate in this state investigation. Will we start seeing states adopting the federal path of proceeding criminally against entities, getting them to cooperate, followed by individual indictments premised upon the information provided? Does it make a difference here that an individual has already been indicted? And will proceeding against this particular entity, present a different model? And should corporate criminality versus civil liability be used here?
Tuesday, June 2, 2015
Yesterday I skimmed through the FIFA indictment referred to by my colleague Lucian Dervan on May 26, 2015 ("FIFA Officials Facing Corruption Charges"), primarily to determine how the government justified jurisdiction over alleged criminal activities that largely, seemingly almost entirely, occurred in other nations, a complaint made by none other than Vladimir Putin. Upon review, I believe the indictment, apparently drafted with that question in mind, facially makes a reasonably strong case for U.S. jurisdiction, based largely, although not entirely, on money transfers through U.S. financial institutions.
There remains, however, the question whether the U.S. Department of Justice should assume the role of prosecutor of the world and prosecute wrongs, however egregious, that were almost wholly committed by foreigners in foreign nations and affected residents of those foreign nations much more than residents of the United States. Our government's refusal to submit to the jurisdiction of the International Criminal Court is arguably inconsistent with our demand here that citizens of other nations submit to our courts.
On another subject, what struck me as just wrong was a minor part of the indictment, the obstruction of justice charge against Aaron Davidson, one of the two United States citizens indicted (the other, a dual citizen, is charged with procuring U.S. citizenship fraudulently). While the obstruction of justice count itself (count 47) is a bare bones parsing of the statute, the lengthy 112-page preamble to the actual recitation of counts (to me in clear violation of Fed. R. Crim. P. 7(c), which says the indictment "must be a plain, concise and definite written statement")(emphasis added) describes Davidson's allegedly criminal conduct as follows: "Davidson alerted co-conspirators to the possibility that they would be recorded making admissions of their crimes."
Such advice is provided as a matter of course - absolutely properly and professionally, in my opinion - by virtually every white-collar or other criminal lawyer representing a target of a criminal investigation. Since lawyers are given no special treatment different from others, if these facts justify a criminal conviction, a lot of white-collar lawyers will be counting the days until the five-year statute of limitations has passed since their last pre-indictment stage client meeting.
The obstruction of justice statute is so vague that it gives the government the opportunity to charge virtually any effort by lawyers or others to advise persons under investigation to exert caution in talking with others. The applicable statute, the one used against Davidson, prescribes a 20-year felony for "whoever corruptly...obstructs, influences, or impedes any official proceeding, or attempts to do so..." 18 U.S.C. 1512(c)(2). That catch-all statute, which follows one proscribing physical destruction of tangible evidence, to me is unconstitutionally vague, but courts have generally upheld it and left the determination of guilt to juries on the ground the word "corruptly," which itself is subject to many interpretations, narrows and particularizes it sufficiently. I hope that the presiding judge in this case, the experienced and respected Raymond Dearie, does not allow that count to get to the jury.