FEDERAL REGULATORY READING LIST: Resources for New Leaders at DOJ

DOJ*Note: This is the third in a series of posts compiling Washington Legal Foundation papers, briefs, regulatory comments, and blog commentaries relevant to critical legal and constitutional issues facing new senior leaders at specific federal regulatory agencies. To read posts addressing other federal agencies, click here.

As the federal government’s primary prosecutor, the Department of Justice (DOJ) serves an important role in enforcing criminal penalties.  However, DOJ frequently oversteps its bounds and advances overzealous enforcement policies.

Through its public-interest litigation, publishing, and other advocacy, WLF influenced debates over DOJ’s recent policies and actions with timely papers and blog commentaries, and weighed in directly through amicus briefs.  Those activities have resulted in an impressive body of reference materials that are instructive for new leadership in the agency.  This post provides a summary of and links to those documents below to simplify access to relevant work product from WLF in each of those areas.

Overcriminalization Timeline

In November 2015, WLF released the third edition of its Timeline: Federal Erosion of Business Civil Liberties (Overcriminalization Timeline).  Each category in the Timeline reflects a separate concern with DOJ’s approach to white-collar criminal enforcement: mens rea, DOJ criminal enforcement, attorney-client and work product privileges, deferred prosecution and non-prosecution agreements, and criminal sentencing.

At the time of its release, WLF published guest blog posts on each topic area, along with a lead post by our general counsel, and conducted a press conference in conjunction with the National Association of Criminal Defense Lawyers (NACDL),  NACDL also printed the Timeline as a pullout feature in an issue of its magazine, The Champion.

Improper Use or Overuse of Criminal Sanctions

WLF believes that criminal sanctions in the business context should be reserved for only the most culpable behavior and situations where defendants personally caused significant, actual harm.  Otherwise, civil or administrative remedies should be the government’s primary means of sanctioning wrongdoers.

DOJ has increasingly opted to pursue criminal charges against corporations and their executives for relatively minor infractions.  WLF filed several amicus briefs in recent years asking federal appellate courts to overturn criminal sanctions—some including jail time—for individuals who committed unintentional technical violations of federal regulations.  In one such case, a victory for WLF, the US Supreme Court overturned the conviction of a fisherman for the “destruction of a tangible object” when he allegedly directed his crew to throw undersized fish overboard to avoid detection. WLF also acted as counsel of record for two small business owners, Cory King and Krister Evertson, as they pursued US Supreme Court review of their convictions under similar circumstances.

In addition, WLF has published several papers and blog posts outlining the broader implications of DOJ’s overreliance on criminal sanctions.  For instance, a 2016 Legal Backgrounder, New DOJ and DOL Reliance on Environmental Laws Lowers Bar for Workplace-Safety Criminal Prosecutions, describes federal regulators’ application of environmental laws to workplace accidents as a way to increase criminal penalties.  Another Legal Backgrounder analyzed the prosecution of healthcare company executives for conduct that had been traditionally addressed with administrative fines.  WLF also supported the executives’ appeal to the Eleventh Circuit in an amicus brief.

WLF Senior Litigation Counsel Cory Andrews’s 2016 blog post roundly criticized DOJ’s criminal prosecution of FedEx.  DOJ argued that FedEx was criminally responsible for delivering packages containing illegal prescription drugs.  FedEx not only denied such knowledge, but also, as the post noted, worked with the government to identify illegal internet pharmacies.  Not long after this widely read post was published, DOJ abandoned the prosecution.

Finally, a recent blog post demonstrates how DOJ’s using the threat of prosecution can cause industry-wide isolation of legitimate businesses DOJ disfavors.  Pursuant to Operation Chokepoint, DOJ and the Federal Deposit Insurance Corporation intimidated banks into ending their lending to disfavored, but legal, businesses to drive them out of operation.  The post urges the new leadership at DOJ to put an end to the operation.

Criminal and Civil Prosecution Policies

In recent years, DOJ has instituted several prosecution policies with the aim of increasing corporate liability and targeting individual business executives.  The most infamous of those policies is the so-called Yates Memo—a directive by then-Deputy Attorney General Sally Yates instructing DOJ prosecutors to seek civil and criminal sanctions against individual executives whenever possible and encouraging businesses under investigation to offer up all individuals involved in the alleged wrongdoing in return for leniency.  A 2016 Legal Backgrounder explains the policy and advises corporate executives and officers to be more aware of their conduct and its potential to expose them to criminal liability.

Another 2016 analysis, written by WLF Legal Pulse Featured Expert Contributor Anthony Swisher, explains DOJ’s announcement to seek more criminal sanctions in wage-fixing and no-poaching antitrust cases.  The announcement, and Mr. Swisher noted, was especially significant because it was a part of a broader, administration-wide policy push to increase wage and employment competition.

A 2015 Legal Backgrounder, Going Overboard: U.S. v. Yates and DOJ’s “Most Serious Offense” Charging Policy, urged DOJ to abandon a policy in its US Attorneys Manual which dictates that prosecutors pursue “the most serious offense that is consistent with the nature of the defendant’s conduct, and that is likely to result in a sustainable conviction.”  This policy led prosecutors to charge commercial fisherman Yates under the anti-shredding provision of the Sarbanes-Oxley Act for tossing undersized fish overboard, instead of a law that prohibited destruction of property to prevent its seizure. The paper notes that in 2013, the Attorney General directed that the most-serious-offense policy be abolished for certain non-violent, low-level drug offenders.  A logical next step would be for the current Attorney General to abolish it in the context of regulatory offenses.

WLF also continued its long-standing work in the courts and through its publications to shape DOJ policy and jurisprudence on the False Claims Act (FCA).  In recent years, DOJ and private qui tam relators have become especially creative and aggressive in broadening the FCA’s reach and application.  A December 2016 Working Paper explains one way that DOJ expands the law’s power: through threats of exclusion from government contracting and debarment.  Such threats frustrate FCA defendants from opposing DOJ in court, which deprives judges of opportunities to test the government’s arguments.  In addition, DOJ has rarely objected to qui tam plaintiffs’ invention of new legal theories, such as the “implied false claim,” where a contractor’s non-compliance with any federal rule violated the FCA.  WLF pushed back against this theory by filing amicus briefs in several FCA cases where relators alleged implied false claims.

Use of Deferred- and Non-Prosecution Agreements

DOJ officials have also continued to increase their reliance on such pre-trial diversion devices as deferred- and non-prosecution agreements (NPAs and DPAs).  Under these agreements, the federal government delays or terminates prosecution in exchange for certain commitments from the defendant, including changes to their compliance programs or the termination of certain employees.  Former Deputy Attorney General Larry Thompson discussed pros and cons of these agreements with WLF Legal Policy Advisory Board Chairman Jay Stephens in a Conversations With paper on the topic.  A recent blog post explained that DPAs and NPAs, if used too liberally and totally without judicial oversight, have the potential to infringe upon other corporate rights.

Mens Rea

Perhaps the most critical component of criminal liability is the intent requirement or mens rea.  In the business regulatory context, where hundreds of complex laws and rules can be applied criminally, the line between innocence and guilt is most often whether the defendant knowingly committed a violation.  For nearly the last decade, WLF has published papers and filed amicus briefs meant to remind courts and prosecutors that criminal liability requires the necessary mens rea.  A 2008 WLF Legal Opinion Letter, Mens Rea Requirement: A Critical Casualty of Overcriminalization, made the case that modern attempts to criminalize negligent or even innocent behavior undermine the very concept of criminal intent and undermine the deterrent effect of penal sanctions.

Federal prosecutors’ most egregious disregard for the intent requirement is their frequent reliance on the so-called responsible corporate officer or RCO doctrine. Invented decades ago by the US Supreme Court, the doctrine imposes liability on corporate executives based not on their knowledge of the alleged criminal actions, but on their mere position as managers. A company’s criminal behavior, as a 2010 Legal Backgrounder explains, is imputed to the executive.

In highly-regulated industries, such as pharmaceuticals and food processing, imposition of the RCO doctrine can destroy an individual’s career.  Over a three-year period from 2009 to 2012, WLF filed three amicus briefs supporting drug-company executives convicted of misdemeanors under the RCO doctrine, convictions that led the government to exclude them from the industry for 12 years.  WLF has also filed two briefs in an RCO-doctrine case involving food-industry executives, DeCoster v. United States.  Finally, WLF conducted a well-attended Web Seminar on the RCO doctrine’s use in the food industry on October 12 posing the provocative question “Do Criminal Prosecutions Make Food Safer?”

The obvious disregard for mens rea at DOJ and in US Attorneys’ offices throughout the country led some in Congress to seek reform of how criminal intent is expressed in federal laws.  Senior DOJ officials testified and spoke out forcefully against those bipartisan efforts.  Two early 2016 blog posts (here and here) outlined this resistance and argued that it reflected DOJ’s attitude that prosecution was a tool of regulation instead of punishment for wrongdoing.

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