Res Ipsa Criminal: Criminalizing Civil Negligence: Gerry Goldstein NACDL 2023 White Collar Seminar

Res Ipsa Criminal: Criminalizing Civil Negligence

 

NACDL’s 2023 White Collar Seminar October 18-21, 2023

 

 Presented by:

GERRY GOLDSTEIN

310 South Saint Marry’s Street, Suite 2900

San Antonio, Texas 78205 (210) 226-1463

GerryGoldsteinLaw@gmail.com

 

OVERCRIMINALIZATION AS A DEFENSE:

 

Federal criminal law has come a long way since the Crimes Act of 1790, which enumerated some 30 offenses.¹ Today there are approximately 4,500 offenses proscribed by Congress in the United States Code, and while no-one can say for certain, there are over 300,000 federal crimes buried on the vast Code of Federal Regulations,² not created by those elected to legislate such prohibitions, but by executive fiat of the same Executive Branch agencies, whose job it is to prosecute the very crimes they have created.

The U.S. Supreme Court has recognized that “based upon the notion that the law is definite and knowable, the common law presumed that every person knew the law,” however, “the proliferation of statutes and regulations has sometimes made it difficult for the average citizen to know or comprehend the extent of the duties and obligations imposed” by our laws. Accordingly, at least when it came to the tangled and complicated federal tax code, the Supreme Court has required proof that the defendant actually “violated a known legal duty.” See Cheek v. U.S., 498 U.S. 192, 199 – 200 (1991) and Ratzlaf v. U.S., 510 U.S. 135, 141 (1994), [noting that

“mindful of the complex of provisions in which they are imbedded,” the prosecution must prove the intentional violation of a “known legal duty.”].³

Over a decade before the Supremes took up the issue, we were able to convince the 5^th Circuit in the Piedras Negras Jailbreak case, that the Government was required to prove “a voluntary and intentional violation of a known legal duty” in any “specific intent” crime, particularly when the offense is a regulatory crime found in the complicated Code of Federal Regulations, such as the federal munitions list . See U.S. v. Davis, 83 F.2d 190, 193 – 194 (5^th Cir. 1978).

“Because the items covered by the statute are spelled out in administrative regulations and include items not known generally to be controlled by the government…Congress did not intend to impose criminal penalties on innocent or negligent errors.” (emphasis supplied)

The Court went on to note that where the criminal offense is buried in the administrative regulations and the defense is lack of knowledge of such prohibiton, that a jury instruction that “ignorance of the law is no excuse,” is inappropriate.

“The trial court, when instructing that specific intent is required, may not instruct that ignorance of the law is no excuse, because ignorance of the law goes to the heart of the defendant’s denial of specific intent.” 190 F2d, at 193-4.

Accordingly, counsel would be well advised to object to such an “ignorance of the law is no excuse” instruction, and insist upon an instruction that the Defendant must have knowledge that his or her conduct was illegal or at least wrongful.⁴

 

GENERAL REQUIREMENT OF CULPABILITY:

Another reason to insist that the jury be instructed that the prosecution must prove beyond a reasonable doubt that the defendant knew his or her conduct was illegal or at least wrong, is that in order for conduct to be criminal there must be an “awareness of some wrongdoing.” See Elonis

1. U.S., 575 U.S. 723, 734 (2015), a terroristic threats case, where Roberts, C.J., ruling for a 7 justice majority, held that as a general rule “a guilty mind is a necessary element in the indictment and proof of every crime.”

“[T]he basic principle that ‘wrongdoing must be conscious to be criminal,’ and that a defendant must be ‘blameworthy in mind’ before he can be found guilty. Morissette v. United States, 342 U.S. 246, 252 (1952).⁵ The ‘general rule’ is that a guilty mind is ‘a necessary element in the indictment and proof of every crime.’” (emphasis supplied) 575 U.S., at p. 734.

Accordingly, it should follow as a general rule that a charging instrument is subject to dismissal where it does not allege a culpable mental state, and the jury must be instructed that the prosecution has a burden to prove every element of the offense beyond a reasonable doubt, including that the defendant was conscious of the wrongfulness of his or her conduct.

 

RECENT TRENDS:

The judicial branch has continuously chosen to grant great deference to how federal agencies interpret the regulations that they seek to enforce. Even when congressional delegation to an agency is implicit rather than explicit, the United States Supreme Court has stated that courts

may not “substitute [their] own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency.” This presumption that agencies have greater expertise as to the particular field they regulate than the legislature is known as the “Chevron Doctrine.” See Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 844 (1984). Agency interpretations are supposed to be “given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute.” Id. Very recently, however, it appears that this general deference to agency interpretation has been somewhat curtailed. West Virginia  EPA, 142 S. Ct. 2587 (2022) flipped the concept of deference to the agency’s interpretation of it’s regulations on its head when the matter involves a “major question.” See West Virginia v. EPA, 142 S. Ct. 2587 (2022) (holding that in cases involving “major questions” the agency “must point to clear congressional authorization for the power it claims.”). Although it is currently unclear how much effect this recent decision will have on how agency interpretation of their authority is handled by the courts. It would appear that agencies now have the burden to demonstrate that they have sufficient congressional authorization.

THE NON-DELEGATION DOCTRINE

The obvious distinction between legislation and regulation is that Congress, composed of elected representatives makes laws (legislation) and the executive branch, through the agencies that comprise that branch of government, enforce those laws (enacting regulations to guide them in performing their designated tasks). The respective role and power of these separate branches of government is Constitutionally divided into three branches, the legislative, executive, and judicial, each with distinct and different roles, separate from, but designed to keep a check on

the other branches. The fact that one branch is not permitted to infringe upon the role of the other is known as the “separation of powers doctrine,” and their relationship is often referred to as a “system of checks and balances.”

The concept that federal agencies (which are arms of the executive branch) are not in the business of enacting the very legislation they are charged with enforcing is fundamental to that “separation of powers doctrine.” As a consequence, courts early on developed what has come to be known as the “non-delegation doctrine,” standing for the proposition that these various branches of our government really are separate, and one branch should not be seen to delegate it’s separate and distinct powers to another. For example, Congress should not delegate its legislative role or function to the executive branch (i.e. federal agencies should not be permitted to create the laws they are supposed to enforce).

Interestingly, Justice Neal Gorsuch, when he served on the 10^th Circuit Court of Appeals (prior to his appointment to the U.S. Supreme Court) was a vocal advocate for resurrecting and exhuming this “nondelegation doctrine,” which had been overlooked and fallen into some disfavor in recent years.⁶

For example, in U.S. v. Baldwin, 745 F.3d 1027 (10^th Cir. 2014), a Government Services Administration attorney⁷ was charged with criminally violating a GSA regulation buried within the vast Code of Federal Regulations.⁸ Judge Gorsuch, then serving on the 10^th Circuit Court of Appeals, asked the question “[c]an Congress so freely delegate the core legislative business of writing criminal offenses to unelected property managers at GSA?” In answer to his own question Gorsuch held that even if such a delegation of authority was a violation of the “nondelegation doctrine,” Baldwin had failed to raise same in the trial court below and therefore had waived any such argument on this appeal.⁹ Nevertheless, Judge Gorsuch felt compelled to opine:

“Might this arrangement blur the line between the Legislative and Executive functions assigned to separate departments by our Constitution?

Gorsuch went on to note that:

“Thanks to this and so many other similarly generous congressional delegations, the Code of Federal Regulations today finds itself crowded with so many ‘crimes’ that scholars actually debate their number.”

A year later, in U.S. v. Nichols, 784 F3d 666 (10^th Cir. 2015) Judge Gorsuch dissenting from the 10^th Circuit’s denial of rehearing en banc (i.e. denial of reconsideration of the 3-judge panel opinion by all of the judges sitting on that Circuit court), felt compelled to express his strong view that Congress’ delegation to the Attorney General of the United States the authority to determine whether to apply the sex offender registration requirements of the Federal Sex Offender Registration and Notification Act (SORNA) retroactively to offenders convicted prior to the statute’s enactment, constituted a clear violation of the nondelegation doctrine, noting that:

 

“If the separation of powers means anything, it must mean that the prosecutor isn’t allowed to define the crimes he gets to enforce.”

 

Gorsuch went on to express the view that the framers were particularly concerned about the delegation of Congress’ legislative authority to the Executive when it comes to criminal law.

“Without a doubt, the framers’ concerns about the delegation of legislative power had a great deal to do with the criminal law. The framers worried that placing the power to legislate, prosecute, and jail in the hands of the Executive would invite the sort of tyranny they experienced at the hands of a whimsical king. Their endorsement of the separation of powers was predicated on the view that ‘[t]he inefficiency associated with [it] serves a valuable’ liberty-preserving function, and, in the context of criminal law, no other mechanism provides a substitute.’ Rachel

1. Barkow, Separation of Powers and the Criminal Law, 58 Stan. L.Rev. 989, 1011– 17, 1031 (2006).”

Justice Gorsuch has continued his quest to put teeth back into this near-forgotten rule forbidding Congress from delegating it’s legislative function even after his appointment to the Supreme Court. For example, in Sesssions v. Dimaya 138 S. Ct. 1204 (2018)¹⁰, Justice Gorsuch concurred in the 5 to 4 opinion written by Justice Kagan, noting the distinction between the legislative and executive functions and the underlying purpose of the “nondelegation doctrine”:

“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 ‘condemn all that they personally disapprove and for no better reason than they disapprove it.”

Even more recently, in Gundy v. United States, 139 S. Ct. 2116 (2019) Gorsuch, dissenting from a plurality opinion of an eight Justice Court (Kavanaugh took no part in the decision), revisited the view he expressed while on the 10^th Circuit in his dissent from the denial of rehearing en banc in

U.S. v. Nichols, noting that:

“The Constitution promises that only the people’s elected representatives may adopt new federal laws restricting liberty. Yet the statute before us scrambles that design. It purports to endow the nation’s chief prosecutor with the power to write his own criminal code governing the lives of a half-million citizens. Yes, those affected are some of the least popular among us. But if a single executive branch official can write laws restricting the liberty of this group of persons, what does that mean for the next?

Today, a plurality of an eight-member Court endorses this extraconstitutional arrangement but resolves nothing. Working from an understanding of the Constitution at war with its text and history, the plurality reimagines the terms of the statute before us and insists there is nothing wrong with Congress handing off so much power to the Attorney General. But JUSTICE ALITO supplies the fifth vote for today’s judgment and he does not join either the plurality’s constitutional or statutory analysis, indicating instead that he remains willing, in a future case with a full Court, to revisit these matters. Respectfully, I would not wait.”

Kavanaugh, who did not participate in the Gundy decision, could provide a 5^th vote with respect to the application of the nondelegation doctrine and it is interesting that several opinions while he sat on the D.C. Court of Appeals before taking his seat on the Supreme Court hint that he may

be inclined to support revisiting the issue when same next presents itself. See PHH Corp v. Consumer Financial Protection Bureau, 881 F.3d 75 (D.C. Cir. 2018) en banc, Kavanaugh, dissenting [where the Justice noted that “[t]o prevent tyranny and protect individual liberty, the Framers of the Constitution separated the legislative, executive, and judicial powers of the new national government.”]. However, while Justice Kavanaugh’s dissent from the en banc opinion in PHH Corp and his opinion in Free Enterprise Fund v. Public Company Accounting Oversight Board, 537 F.3d 672 (D.C. Cir. 2008) discuss the historical roots of the Constitutional Separation of Powers doctrine, they more forcefully express his expansive views regarding Executive power. It remains to be seen where he might find himself when presented with the choice between the nondelegation doctrine and the more permissive “modern administrative state.”

“ACCARDI” DOCTRINE

Another different, but related issue that often arises in criminal, and occasionally in civil cases, is whether a litigant can require a governmental agency to follow it’s own internal guidelines or regulations, and if so, what is the appropriate remedy for the failure to do so?

As a general rule, while federal agencies are required to follow legislative mandates, courts have been fairly lax in holding that a citizen or litigant may enforce those agency’s guidelines and/or regulations.¹¹

However, there is an argument that where a government agency prescribes regulations for the benefit and/or protection of the individual citizen it is charged with regulating, that agency must follow internal guidelines it promulgates for the protection of the individuals and/or entities it regulates. See U.S. ex rel Accardi v. Shaughnessy, 347 U.S. 260, 267-68 (1975); See also, Service

1. Dulles, 354 U.S. 363, 372 (1957); Morton v. Ruiz, 415 U.S. 199 (1974); School Board of Broward County v. HEW, 525 F.2d 900, 908 (5th Cir. 1976).

“Where the rights of individuals are affected it is incumbent upon agencies to follow their own procedures. This is so even where internal procedures are possibly more rigorous than otherwise would be required.” Morton v. Ruiz, 415 U.S. at 235; See also U.S. v. Jacobs, 547 F.2d 772, 774 (2d Cir. 1976) (applying the ‘Accardi Doctrine’ to Justice Department Guidelines). Morton v. Ruiz, 415 U.S. at 235…

We did not [in an earlier opinion] specifically refer to the analogy of an agency being required to adhere to its own regulations, Service v. Dulles, 354 U.S. 363, 732 (1957), because we recognized that the Attorney general in his prosecutorial function may be, strictly speaking, less restricted than the Secretary of State. However, the analogy is persuasive when the Attorney General actually promulgates Guidelines for supervision by the United States Attorney in specific circumstances, see United States v. Leahey, 434 F.2d 7 (1st Cir. 1970); United States v. Heffner, 420 F.2d 809 (4th Cir. 1969) (non-constitutional ground), and inconsistent treatment results therefrom.” Morton v. Ruiz, 415 U.S. at 235.

While these concepts regarding the distinction between legislation and regulation have been less than successful in recent attempts to reign in regulatory agencies’ seemingly boundless appetite

to impose criminal sanctions in an effort to incentivize better business practices, the author would suggest that younger and brighter minds keep knocking on the doors of justice. If nothing else, reducing the number and scope of regulatory crimes might provide some relief to our overburdened criminal justice system.

A side effect of the countless number of federal regulations that are currently on the books is that many of them are ambiguous and cover obscure issues. They also often criminalize what was previously thought of as noncriminal conduct. For example, one such regulation makes it possible for a person to be charged with a class B misdemeanor if you allow your dog to bark in a national park frightening wildlife. See 36 C.F.R. § 2.15(a)(4). This creates a real concern about the overcriminalization of ordinary conduct, especially with many of these regulations being obscure, hidden in the vast array of federal regulations, and silent with respect to any mens rea requirement.

There have been many attempts to reduce and combat this growing issue of overcriminalization. This includes an executive order issued by then President Trump on January 18, 2021, and many criminal justice reform bills introduced to Congress. However, little progress has been made in this area, and the number of federal regulations being created is not showing any signs of slowing. Without drastic changes in regard to how Congress delegates its legislative authority, we run the risk that every aspect of our lives and businesses will fall prey to continued regulation.

1. The Federal Criminal Code of 1790 proscribed treason (for which the exclusive penalty was death, although the act did provide for appointed counsel), piracy and mutiny on the high seas, murder, robbery, counterfeiting, crimes against the law of nations, perjury, obstruction of justice, prison break, and even mayhem.
2. No one, not even DOJ, can say for certain how many punishable crimes are dispersed in the voluminous body of federal regulations.
3. While the Court in Cheek and Ratzlaf seemed fixated on the distinction between “willful” and “knowing” conduct, the author would suggest that there is an alternate and more compelling rational for requiring that the accused “violated a know legal duty” discussed above.
4. This is especially true where the offense falls more toward malum prohibitum rather than Malum en se. In other words, such regulatory crimes that are not found in the bible or taught to you by your mother.
5. Interestingly, Justice Jackson, speaking for a unanimous Supreme Court, noted that while “no federal crime can exist, except by force of statute,” the Court has come to recognize certain exceptions regarding certain police powers and safety regulations. Morissette v. U.S., 342 U.S., at p. 259.
6. See The Myth of the Nondelegation Doctrine, University of Pennsylvania Law Review, Vol. 165: 379 (2017)[“For much of the nineteenth and early twentieth centuries, the nondelegation doctrine served as a robust check on governmental expansion. Then, during the New Deal revolution, the Supreme Court reined in the doctrine, thereby paving the way for the rise of the modern administrative state.”]
7. As might be expected from the result, attorney Baldwin may have had a fool for a client, he represented himself and was convicted and sentenced to the maximum allowable penalty.
8. Then Judge Gorsuch noted that “Deep in the Code of Federal Regulations, in the part titled ‘Public Contracts and Property Management,’ lie two small provisions that would be easy to overlook were it not for disputes like this one.” Gorsuch goes on to note that “[t]hanks to this and many other similar and similarly generous congressional delegations, the Code of Federal Regulations today finds itself crowded with so many “crimes” that scholars actually debate their number,” opining that “[b]y one estimate, there are over 300,000 federal regulations that may be enforced criminally.”
9. Which may serve only to demonstrate that not only did Baldwin have a fool for a client, his client’s lawyer may have been lacking as well.
10. Sessions v. Dimaya, 138 S. Ct. 1204 (2018), actually turned on whether the term “crime of violence” in the Immigration and Nationality Act (which requires deportation of permanent aliens convicted of crimes of violence) is “void for vagueness” under the 5^th Amendment’s due process clause.
11. For example, Courts have held that agency regulations do not create any Constitutional right under the 5th Amendment “due process” clause [See Olim v. Wakinekona, 103 S. Ct. 1741, 1747 (1983); Board of Curators v. Horowitz, 435 U.S. 78, 92 n.8 (1978); Bates v. Sponberg, 547 F.2d 325, 329-30 (6th Cir. 1976)], or that procedural rules do not necessarily create an entitlement [See Bills v. Henderson, 631 F.2d 1287, 1298-99 (6th Cir. 1980), or by treating an agency’s internal regulations as simply unenforceable guideposts for that agency’s exercise of its own discretionary rulings. See United States v. Caceres, 440 U.S. 741, 754 n.18 (1979).