Opinion ID: 693375
Heading Depth: 2
Heading Rank: 2

Heading: Modern Jurisprudence

Text: 33 With this historical background in mind, we address the modern jurisprudence of the doctrine. Today, as its long history makes clear, the Double Jeopardy Clause protects an individual against multiple punishments for the same offense. See Halper, 490 U.S. at 440, 109 S.Ct. at 1897. In modern American law the punishment in question need not be death, maiming or mutilation; nor need the offense be a capital crime or even a felony. The American concept is more generous. It is viewed as an inherent part of our fundamental freedoms that a person accused of any offense, having once suffered punishment, once been convicted, or once won acquittal, is forever immune from further prosecution for that same offense. 34 Because the concept is so broad, the Supreme Court has held that it applies even to certain fines. A civil sanction may constitute punishment for double jeopardy purposes where the sanction is overwhelmingly disproportionate to the damages the defendant caused. See id. at 449, 109 S.Ct. at 1902. In such a case, the civil sanction serves not a remedial, but rather a deterrent or retributory function. Id. Halper 's test for assessing the nature of civil sanctions is a rule of reason. See United States v. 38 Whalers Cove Drive, 954 F.2d 29, 34 (2d Cir.), cert. denied sub nom. Levin v. United States, --- U.S. ----, 113 S.Ct. 55, 121 L.Ed.2d 24 (1992). 35 The double jeopardy inquiry is not concerned with the label of a sanction, but only with whether the characteristics of the sanction are punitive in nature, that is, what purpose they serve. See Department of Revenue of Montana v. Kurth Ranch, --- U.S. ----, ----, 114 S.Ct. 1937, 1945, 128 L.Ed.2d 767 (1994) (tax sanction constituted impermissible second punishment where not rationally related to damages suffered by the government). Thus, we have held that Halper does not apply to forfeiture claims. See United States v. United States Currency in the Amount of $145,139, 18 F.3d 73, 74-75 (2d Cir.) (the res itself, in this case, the money being the culprit, a criminal proceeding in personam cannot affect it), cert. denied sub nom. Etim v. United States, --- U.S. ----, 115 S.Ct. 72, 130 L.Ed.2d 27 (1994); accord United States v. Torres, 28 F.3d 1463, 1465-66 (7th Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 669, 130 L.Ed.2d 603 (1994); but see United States v. $405,089.23 U.S. Currency, 33 F.3d 1210, 1221-22 (9th Cir.1994). Defining Halper narrowly, we have also declined to apply it to prison disciplinary sanctions, see United States v. Hernandez-Fundora, 49 F.3d 848, 852 (2d Cir. Feb. 14, 1995) (disciplinary sanctions not punishment where not grossly disproportionate to the remedial goal of maintaining order and discipline in the prison); accord United States v. Newby, 11 F.3d 1143, 1145-46 (3d Cir.1993), cert. denied, --- U.S. ----, 115 S.Ct. 111, 130 L.Ed.2d 58 (1994), and to civil contempt fines, see United States v. Mongelli, 2 F.3d 29, 30 (2d Cir.1993) (per curiam) (civil contempt fines of $10,000 per day were coercive and not punitive in nature and therefore not subject to double jeopardy claims under Halper ). 36 Where there is no showing of an intent to punish, a court must examine the sanction to see if it serves a legitimate nonpunitive government purpose. See Bell v. Wolfish, 441 U.S. 520, 539 n. 20, 99 S.Ct. 1861, 1874 n. 20, 60 L.Ed.2d 447 (1979). A line is drawn because civil actions instituted to remedy or recoup financial losses the government has suffered, on the one side, and actions taken to achieve retribution or deterrence in order to uphold public justice, on the other side, are separate and distinct. Unless a sanction serves solely remedial purposes, it must be characterized as punishment. See United States v. 38 Whalers Cove Drive, 954 F.2d at 35. While both criminal and civil punishments may lawfully be provided by Congress for the same conduct, it is only the government's action to punish the same conduct on two separate occasions that subjects a defendant to double jeopardy. See United States ex rel. Marcus v. Hess, 317 U.S. 537, 548-49, 63 S.Ct. 379, 386-87, 87 L.Ed. 443 (1943). III Merits of Double Jeopardy Defense A. Preliminary Issues 37 We pass now to a discussion of the merits. The Double Jeopardy Clause protects a person from prosecution for the same offense following either an acquittal or a conviction, and it protects also against multiple punishments for the same offense. See North Carolina v. Pearce, 395 U.S. 711, 717, 89 S.Ct. 2072, 2076-77, 23 L.Ed.2d 656 (1969). Morgan cannot claim prosecution for the same offense arising after an acquittal or conviction because the initial civil proceeding did not result in either. Instead, Morgan avers he is being subjected to multiple punishments for the same offense, citing Halper, 490 U.S. at 440, 109 S.Ct. at 1897. 38 Before applying the Halper analysis to the facts of the instant case, there are two preliminary questions to be addressed. First, the government suggests that appellant's reliance on Halper is entirely misplaced because there, contrary to the facts of the instant case, the criminal trial and conviction preceded the attempted imposition of civil penalties for the same conduct. Other circuits have ruled that Halper applies when the civil sanction precedes the criminal prosecution. See, e.g., United States v. Hudson, 14 F.3d 536, 540 (10th Cir.1994); United States v. Sanchez-Escareno, 950 F.2d 193, 199 (5th Cir.1991), cert. denied, --- U.S. ----, 113 S.Ct. 123, 121 L.Ed.2d 78 (1992); United States v. Mayers, 897 F.2d 1126, 1127 (11th Cir.), cert. denied, 498 U.S. 865, 111 S.Ct. 178, 112 L.Ed.2d 142 (1990). We have not explicitly so ruled. See United States v. Amiel, 995 F.2d at 370. The district court, persuaded by the reasoning of other circuits, correctly ruled that Halper applied to this case. 39 The recited history of the double jeopardy doctrine in America demonstrates its broad application from the earliest days to civil offenses as well as criminal, unlike in England where, as Blackstone tells us, double jeopardy was only available in a criminal proceeding following an acquittal or conviction. Because of this clearly broadened protection in America, we are firmly persuaded that the shield of double jeopardy remains in place regardless of the happenstance of whether the civil proceeding or criminal prosecution arising from the same offense comes first. We now rule that such a fortuitous circumstance is of no moment in double jeopardy analysis. In short, double jeopardy protection may be claimed by a defendant whose indictment follows the imposition of a punitive civil sanction for the same offense. 40 Second, the government also urges that the $1.8 million financial obligation imposed on Morgan is not a civil penalty provided for by statute. Because the OTS had no statutory authority to impose a fine, 2 the payment imposed was, according to the government, not a fine by definition. In its brief, it declares the OTS could not, and therefore did not impose a statutory penalty upon Morgan. Therefore, the government concludes, Morgan's repayment obligation is to be construed simply as a personal debt--and a debt does not trigger double jeopardy protections. 41 We do not think the distinction between a personal obligation negotiated by settlement, and a fine fixed by statute, controls the double jeopardy analysis. As Halper noted, This constitutional protection is intrinsically personal. Its violation can be identified only by assessing the character of the actual sanctions imposed on the individual by the machinery of the state. 490 U.S. at 447, 109 S.Ct. at 1901 (emphasis added). In this case, the machinery of the state, as embodied by the OTS, compelled Morgan into undertaking this financial obligation. It is not controlling for analytical purposes whether that compulsion was or was not statutorily authorized. 42 Even were the government to have acted beyond its authority in punishing an offender against its laws, the protections of the Double Jeopardy Clause are nonetheless triggered when the government acts to punish the same offender a second time. The government's argument boils down to this: if the OTS settlement with Morgan went beyond restitution, then the OTS exceeded its statutory authority in reaching it. We do not think governmental overreaching--if it occurred and if it amounted to punishment--will prevent Morgan from now asserting his constitutional right to be free from a second punishment for the same offense. B. Application of Halper 43 Having concluded our examination of these threshold issues, analysis now turns to the rules laid down in Halper. The Supreme Court teaches that the purpose served by the civil sanction must be ascertained in order to determine whether it constitutes punishment. See 490 U.S. at 448-49, 109 S.Ct. at 1901-02. Labels such as criminal and civil, fine and repayment are not controlling. They may not be used to defeat the safeguards guaranteed citizens under the Constitution. See Kurth Ranch, --- U.S. at ----, 114 S.Ct. at 1946 (label of tax does not end double jeopardy scrutiny because at some point, an exaction labeled as a tax approaches punishment.); Hicks v. Feiock, 485 U.S. 624, 631, 108 S.Ct. 1423, 1429, 99 L.Ed.2d 721 (1988). The question in each case is whether the sanction does more than merely compensate the government for its damages and costs. Normally the trial court must undertake a rough calculation to determine whether the size of the sanction can be fairly attributed solely to remedial purposes or whether it must be deemed--because of its disproportion in relation to making the government whole--also to have been imposed for purposes of punishment. See Halper, 490 U.S. at 448-49, 109 S.Ct. at 1901-02. 44 Before undertaking this calculation we note Morgan's contention that it is Charter Federal, not the government, which sustained losses in excess of $2,275,000. The inference he would have us draw is that this figure may not be used in assessing the damage his conduct caused the government. His argument is not persuasive because Charter Federal's seizure by the Resolution Trust Corporation was attributable, at least in part, to Morgan's misconduct. Although the actual losses ultimately sustained by the government are not identical with the harm Morgan inflicted on the bank, the latter figure is a reasonable measure of the portion of the government's damages that have been occasioned by Morgan's actions. 45 In addition, Morgan claims that in his case no accounting of the government's damages and costs is necessary because the clear language of the consent order and judgment divided the remedial and retributive penalties into two separate categories: a $300,000 judgment to correct the conditions alleged to have resulted from his violations of law, and an additional fine of $1.5 million, labeled a personal obligation. Since only the former is labeled remedial, Morgan insists that the latter larger fine is plainly punishment. Ironically, Morgan's argument depends on the importance of a label, even as he disavows reliance on such tags. 46 The district court concluded that the only goal of the OTS civil proceeding was to obtain restitution and Morgan's agreement not to further participate in the conduct of the affairs of a financial institution. The trial court based this conclusion on a careful reading of the OTS documents themselves, which revealed that those documents consistently refer to both of the payments imposed as restitution. The consent order includes the $1.5 million personal obligation as a subsection of Paragraph Three, entitled Restitution. Elsewhere in the consent order, the payments ordered under that paragraph are referred to as Morgan's obligation to reimburse against loss. 47 Moreover, the district court did not simply rely on its own competing assessment of the labels the OTS documents attached to the monetary payments. Judge Daly went on to consider the underlying purpose of the settlement. He found that although the Notice of Charges averred that the bank lost $2,275,000, the consent judgment of $1.8 million represented a compromise of the amount the bank lost that reasonably could be attributed to Morgan's conduct. No other basis for the compromise is set forth in the settlement documents. 48 A defendant must make a threshold showing of punishment before a court undertakes a double jeopardy analysis. See United States v. Mongelli, 2 F.3d at 30. In the context of a civil sanction, this threshold is met by showing the sanction to be overwhelmingly disproportionate to the government's damages and expenses. Leeway is given to achieve rough justice when computing the precise amount of damages and costs the government suffered. See Halper, 490 U.S. at 449, 109 S.Ct. at 1902; 38 Whalers Cove, 954 F.2d at 34-35. Only in the rare case where such disproportion is shown does the burden of accounting for its damages and costs fall on the government. Halper, 490 U.S. at 449-50, 109 S.Ct. at 1902-03. This is not that case. We cannot say that this civil sanction is so divorced from the reality of what the government suffered in damages and expenses as to constitute punishment. See Halper, 490 U.S. at 442, 109 S.Ct. at 1898. Rather, the dollar amount of the compromise we think falls within the bounds of doing rough justice. 49 In sum, appellant has failed to make a threshold showing that any of the terms of the civil settlement could be construed as punishment. Consequently, double jeopardy protection does not attach, and the government could lawfully file an indictment against Morgan after imposing a civil sanction against him for the same conduct.CONCLUSION 50 The denial of the motion to dismiss the indictment against defendant Morgan is accordingly affirmed.