Source: https://openjurist.org/544/us/696/04/368
Timestamp: 2017-11-20 00:30:14
Document Index: 723012673

Matched Legal Cases: ['§ 1512', '§ 1512', '§ 2252', '§ 1512', '§ 1512', '§ 1503']

544 US 696 Arthur Andersen Llp v. United States | OpenJurist
544 U.S. 696 - Arthur Andersen Llp v. United States
544 US 696 Arthur Andersen Llp v. United States
544 U.S. 696
No. 04-368.
Argued April 27, 2005.
(a) This Court's traditional restraint in assessing federal criminal statutes' reach, see, e. g., United States v. Aguilar, 515 U. S. 593, 600, is particularly appropriate here, where the act underlying the conviction— "persua[sion]"—is by itself innocuous. Even "persuad[ing]" a person "with intent to . . . cause" that person to "withhold" testimony or documents from the Government is not inherently malign. Under ordinary circumstances, it is not wrongful for a manager to instruct his employees to comply with a valid document retention policy, even though the policy, in part, is created to keep certain information from others, including the Government. Thus, § 1512(b)'s "knowingly . . . corruptly persuades" phrase is key to what may or may not lawfully be done in the situation presented here. The Government suggests that "knowingly" does not modify "corruptly persuades," but that is not how the statute most naturally reads. "[K]nowledge" and "knowingly" are normally associated with awareness, understanding, or consciousness, and "corrupt" and "corruptly" with wrongful, immoral, depraved, or evil. Joining these meanings together makes sense both linguistically and in the statutory scheme. Only persons conscious of wrongdoing can be said to "knowingly . . . corruptly persuad[e]." And limiting criminality to persuaders conscious of their wrongdoing sensibly allows § 1512(b) to reach only those with the level of culpability usually required to impose criminal liability. See Aguilar, supra, at 602. Pp. 703-706.
Maureen E. Mahoney argued the cause for petitioner. With her on the briefs were Alexandra A. E. Shapiro, J. Scott Ballenger, and Charles A. Rothfeld. Deputy Solicitor General Dreeben argued the cause for the United States. With him on the brief were Acting Solicitor General Clement, Acting Assistant Attorney General Keeney, Kannon K. Shanmugam, Sangita K. Rao, Andrew Weissmann, and Matthew W. Friedrich.*
On October 10, Odom spoke at a general training meeting attended by 89 employees, including 10 from the Enron engagement team. Odom urged everyone to comply with the firm's document retention policy.4 He added: "`[I]f it's destroyed in the course of [the] normal policy and litigation is filed the next day, that's great. . . . [W]e've followed our own policy, and whatever there was that might have been of interest to somebody is gone and irretrievable.'" 374 F. 3d 281, 286 (CA5 2004). On October 12, Temple entered the Enron matter into her computer, designating the "Type of Potential Claim" as "Professional Practice — Government/Regulatory Inv[estigation]." App. JA-127. Temple also e-mailed Odom, suggesting that he "`remin[d] the engagement team of our documentation and retention policy.'" Brief for United States 6.
Throughout this time period, the document destruction continued, despite reservations by some of petitioner's managers.6 On November 8, Enron announced that it would issue a comprehensive restatement of its earnings and assets. Also on November 8, the SEC served Enron and petitioner with subpoenas for records. On November 9, Duncan's secretary sent an e-mail that stated: "Per Dave— No more shredding. . . . We have been officially served for our documents." Id., at 10. Enron filed for bankruptcy less than a month later. Duncan was fired and later pleaded guilty to witness tampering.
Such restraint is particularly appropriate here, where the act underlying the conviction—"persua[sion]"—is by itself innocuous. Indeed, "persuad[ing]" a person "with intent to . . . cause" that person to "withhold" testimony or documents from a Government proceeding or Government official is not inherently malign.8 Consider, for instance, a mother who suggests to her son that he invoke his right against compelled self-incrimination, see U. S. Const., Amdt. 5, or a wife who persuades her husband not to disclose marital confidences, see Trammel v. United States, 445 U. S. 40 (1980).
Acknowledging this point, the parties have largely focused their attention on the word "corruptly" as the key to what may or may not lawfully be done in the situation presented here. Section 1512(b) punishes not just "corruptly persuad[ing]" another, but "knowingly . . . corruptly persuad[ing]" another. (Emphasis added.) The Government suggests that "knowingly" does not modify "corruptly persuades," but that is not how the statute most naturally reads. It provides the mens rea — "knowingly" — and then a list of acts — "uses intimidation or physical force, threatens, or corruptly persuades." We have recognized with regard to similar statutory language that the mens rea at least applies to the acts that immediately follow, if not to other elements down the statutory chain. See United States v. X-Citement Video, Inc., 513 U. S. 64, 68 (1994) (recognizing that the "most natural grammatical reading" of 18 U. S. C. §§ 2252(a)(1) and (2) "suggests that the term `knowingly' modifies only the surrounding verbs: transports, ships, receives, distributes, or reproduces"); see also Liparota v. United States, 471 U. S. 419 (1985). The Government suggests that it is "questionable whether Congress would employ such an inelegant formulation as `knowingly . . . corruptly persuades.'" Brief for United States 35, n. 18. Long experience has not taught us to share the Government's doubts on this score, and we must simply interpret the statute as written.
The parties have not pointed us to another interpretation of "knowingly . . . corruptly" to guide us here.9 In any event, the natural meaning of these terms provides a clear answer. See Bailey v. United States, 516 U. S. 137, 144-145 (1995). "[K]nowledge" and "knowingly" are normally associated with awareness, understanding, or consciousness. See Black's Law Dictionary 888 (8th ed. 2004) (hereinafter Black's); Webster's Third New International Dictionary 1252-1253 (1993) (hereinafter Webster's 3d); American Heritage Dictionary of the English Language 725 (1981) (hereinafter Am. Hert.). "Corrupt" and "corruptly" are normally associated with wrongful, immoral, depraved, or evil. See Black's 371; Webster's 3d 512; Am. Hert. 299-300. Joining these meanings together here makes sense both linguistically and in the statutory scheme. Only persons conscious of wrongdoing can be said to "knowingly . . . corruptly persuad[e]." And limiting criminality to persuaders conscious of their wrongdoing sensibly allows § 1512(b) to reach only those with the level of "culpability . . . we usually require in order to impose criminal liability." United States v. Aguilar, 515 U. S., at 602; see also Liparota v. United States, supra, at 426.
These changes were significant. No longer was any type of "dishonest[y]" necessary to a finding of guilt, and it was enough for petitioner to have simply "impede[d]" the Government's factfinding ability. As the Government conceded at oral argument, "`[i]mpede'" has broader connotations than "`subvert'" or even "`[u]ndermine,'" see Tr. of Oral Arg. 38, and many of these connotations do not incorporate any "corrupt[ness]" at all. The dictionary defines "impede" as "to interfere with or get in the way of the progress of" or "hold up" or "detract from." Webster's 3d 1132. By definition, anyone who innocently persuades another to withhold information from the Government "get[s] in the way of the progress of" the Government. With regard to such innocent conduct, the "corruptly" instructions did no limiting work whatsoever.
The instructions also were infirm for another reason. They led the jury to believe that it did not have to find any nexus between the "persua[sion]" to destroy documents and any particular proceeding.10 In resisting any type of nexus element, the Government relies heavily on § 1512(e)(1), which states that an official proceeding "need not be pending or about to be instituted at the time of the offense." It is, however, one thing to say that a proceeding "need not be pending or about to be instituted at the time of the offense," and quite another to say a proceeding need not even be foreseen. A "knowingly . . . corrup[t] persaude[r]" cannot be someone who persuades others to shred documents under a document retention policy when he does not have in contemplation any particular official proceeding in which those documents might be material.
Briefs ofamici curiae urging reversal were filed for the American Institute of Certified Public Accountants by Kelly M. Hnatt and Richard I. Miller; for the New York Council of Defense Lawyers by Lewis J. Liman; and for the Washington Legal Foundation et al. by Carter G. Phillips, Virginia A. Seitz, Daniel J. Popeo, and Paul D. Kamenar.
We refer to the 2000 version of the statute, which has since been amended by Congress
During this time, petitioner faced problems of its own. In June 2001, petitioner entered into a settlement agreement with the Securities and Exchange Commission (SEC) related to its audit work of Waste Management, Inc. As part of the settlement, petitioner paid a massive fine. It also was censured and enjoined from committing further violations of the securities laws. In July 2001, the SEC filed an amended complaint alleging improprieties by Sunbeam Corporation, and petitioner's lead partner on the Sunbeam audit was named
A key accounting problem involved Enron's use of "Raptors," which were special purpose entities used to engage in "off-balance-sheet" activities. Petitioner's engagement team had allowed Enron to "aggregate" the Raptors for accounting purposes so that they reflected a positive return. This was, in the words of petitioner's experts, a "black-and-white" violation of Generally Accepted Accounting Principles. Brief for United States 2
The firm's policy called for a single central engagement file, which "should contain only that information which is relevant to supporting our work." App. JA-45. The policy stated that, "[i]n cases of threatened litigation, . . . no related information will be destroyed."Id., at JA-44. It also separately provided that, if petitioner is "advised of litigation or subpoenas regarding a particular engagement, the related information should not be destroyed. See Policy Statement No. 780—Notification of Litigation." Id., at JA-65 (emphasis deleted). Policy Statement No. 780 set forth "notification" procedures for whenever "professional practice litigation against [petitioner] or any of its personnel has been commenced, has been threatened or is judged likely to occur, or when governmental or professional investigations that may involve [petitioner] or any of its personnel have been commenced or are judged likely." Id., at JA-29 to JA-30.
The release characterized the charge to earnings as "non-recurring." Brief for United States 6, n. 4. Petitioner had expressed doubts about this characterization to Enron, but Enron refused to alter the release. Temple wrote an e-mail to Duncan that "suggested deleting some language that might suggest we have concluded the release is misleading." App. JA-95
For example, on October 26, John Riley, another partner with petitioner, saw Duncan shredding documents and told him "this wouldn't be the best time in the world for you guys to be shredding a bunch of stuff." Brief for United States 9. On October 31, David Stulb, a forensics investigator for petitioner, met with Duncan. During the meeting, Duncan picked up a document with the words "smoking gun" written on it and began to destroy it, adding "we don't need this."Ibid. Stulb cautioned Duncan on the need to maintain documents and later informed Temple that Duncan needed advice on the document retention policy.
Compare,e. g., United States v. Shotts, 145 F. 3d 1289, 1301 (CA11 1998), with United States v. Farrell, 126 F. 3d 484, 489-490 (CA3 1997).
Section 1512(b)(2) addresses testimony, as well as documents. Section 1512(b)(1) also addresses testimony. Section 1512(b)(3) addresses "persuade[rs]" who intend to prevent "the communication to a law enforcement officer or judge of the United States of information" relating to a federal crime
The parties have pointed us to two other obstruction provisions, 18 U. S. C. §§ 1503 and 1505, which contain the word "corruptly." But these provisions lack the modifier "knowingly," making any analogy inexact
We disagree with the Government's suggestion that petitioner's "nexus" argument is not preserved or that it is only subject to plain-error review for failure to comply with Federal Rule of Criminal Procedure 30(d). Petitioner plainly argued for, and objected to the instructions' lack of, a nexus requirement. See,e.g., Record 425 (arguing for a "nexus" and explaining that "it is insufficient for the government to show that the defendant intended to affect some hypothetical future federal proceeding"); id., at 931-932, 938; Tr. 4339-4345 (May 25, 2002). In so doing, it reasonably relied on language in United States v. Shively, 927 F. 2d 804, 812-813 (CA5 1991). Although the instruction petitioner proposed, based on Shively, does not mirror the nexus requirement it now proposes, its actions were sufficient to satisfy Rule 30(d). This argument also was preserved in the Court of Appeals, which recognized that petitioner was challenging "the concreteness of the defendant's expectation[s] of a proceeding." 374 F. 3d 281, 298 (CA5 2004); see United States v. Williams, 504 U. S. 36, 41-42 (1992). However, the Court of Appeals did not address, and petitioner did not preserve, its argument that informal inquiries are not covered by the statute. See ibid.