Friday, June 1, 2007

Judge Kaplan Confronts the Issue of Remedy in the KPMG Tax Shelter Prosecution

The Second Circuit's recent decision (see earlier post here) invalidating the civil remedy crafted by U.S. District Judge Lewis Kaplan to overcome the constitutional violation he found in the denial of attorney's fees for sixteen KPMG defendants raises the question of how the Judge will proceed from here.  In criminal cases, the usual remedy that comes to mind for violations of a defendant's rights is the exclusionary rule, except in this case there's really nothing to exclude because the violations did not yield any evidence for the government, at least not directly.  In finding the pressure prosecutors put on KPMG to deny attorney's fees to its former partners and employees was a violation of the right to counsel and due process, the Judge focused on the government's conduct during the investigatory stage.  But that conduct did not impact the evidence used to obtain the indictments, unlike a Fourth Amendment violation.

The Judge issued an order (here courtesy of the WSJ Law Blog) asking the parties to address the following question: "What if any sanctions other than dismissal of the entire indictment are available with respect to the constitutional violations found by the Court?"  The short answer is: not many, at least if the remedy is to address the violation itself and not as form of punishment for prosecutorial misconduct.  Even the dismissal option is not an easy one to reach.  Controlling Supreme Court precedent makes it difficult to dismiss an indictment because of prosecutorial misconduct during the pre-charge phase, so unless the violation resulted in the government obtaining tainted evidence there are not many other options available.  Not to blow my own horn, at least not too much, I wrote two articles addressing the issue of remedies for prosecutorial misconduct, and the conclusion I reached is that dismissal to punish prosecutors is difficult to justify under the Constitution and other remedies only indirectly address the  misconduct because society pays the price when a prosecution is hamstrung.  For those suffering from terminal insomnia, the articles are Prosecutorial Misconduct and Constitutional Remedies, 77 Wash. U.L.Q 713 (1999) [available on SSRN here], and Prosecutorial Misconduct in Grand Jury Investigations, 51 S. Carolina L. Rev. 1 (1999) [available below].

The Judge's order poses another question to prosecutors that may be a bit disingenuous.  Judge Kaplan asks: "What if any steps are [sic] the government prepared to take voluntarily in an effort to remedy the constitutional violations found by the court?"  The government likely does not agree with the court's findings, and no doubt is champing at the bit to appeal to the Second Circuit.  Would volunteering a remedy concede that the determination of constitutional violations was correct?  Moreover, there's a measure of "name your own punishment" to the order that puts the U.S. Attorney's Office in a difficult position.  If prosecutors were to recommend a remedy that the court determined was inadequate, they would be castigated again for not protecting the rights of the defendants and risk further wrath from the Judge.  If they propose significant remedies -- which are a bit hard to imagine at this point -- then they could make obtaining convictions even more difficult in an already complex case.  I suspect prosecutors will pass on the Judge's invitation.

An interesting question will be whether the Judge crafts a remedy that prevents prosecutors from appealing the underlying finding of constitutional violations.  An order dismissing the indictments is immediately appealable, as would be the exclusion of significant blocks of evidence.  Less drastic remedies may not fully vindicate the constitutional violations, but could insulate the decision from appeal except through a writ of mandamus, which is difficult to obtain.  Is Judge Kaplan willing to go to the limit and order dismissal of the indictments, opening up his decision to review by the Second Circuit?  Oral argument is scheduled for July 2.  (ph) 

Download prosecutorial_misconduct_in_grand_jury_investigations.pdf

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