Ed. Note: This morning at a press conference (the video on-demand for which can be accessed here), Washington Legal Foundation released the third edition of its Timeline: Federal Erosion of Business Civil Liberties. Joining the author of this post, WLF General Counsel Mark Chenoweth, at the briefing were former Associate Attorney General of the U.S. Jay Stephens and National Association of Criminal Defense Lawyers’ Executive Director Norman Reimer. Over the next six days, the WLF Legal Pulse will be featuring commentary by leading white-collar criminal law voices on each of the six topics covered in the Timeline.
Overcriminalization is a term that came into vogue about ten or so years ago as a catch-all phrase to describe several interrelated legal policy problems. Washington Legal Foundation (WLF) has been at the forefront of the debate on overcriminalization, helping to popularize the term and offering thought leadership to policymakers, judges, and other participants in the criminal justice system. One concrete manifestation of this leadership is the new third edition of WLF’s Overcriminalization Timeline, which tracks the federal erosion of business civil liberties.
The timeline explores six facets of overcriminalization: (1) Inadequate mens rea requirements and overreliance on public welfare offenses and the Responsible Corporate Officer doctrine; (2) Criminal enforcement policies and practices at the Environmental Protection Agency (EPA); (3) Criminal enforcement policies and prosecution practices at the Department of Justice (DOJ); (4) Infringements on the attorney-client privilege and work-product doctrine; (5) Abuse of deferred prosecution and non-prosecution agreements (DPAs and NPAs); and (6) The proliferation of criminal laws and unduly harsh sentencing provisions.
By arranging the various developments in these six areas in chronological order and in chart form, the Timeline helps to illustrate negative overcriminalization trends. For example, in the mens rea row, it becomes rapidly clear that Congress has been a major part of the problem. The Fraud Enforcement and Recovery Act of 2009 amended the False Claims Act to eliminate the ‘intent to defraud’ requirement. The Dodd-Frank Act in 2010 expanded SEC’s ability to try wrongdoers for conduct that is merely reckless. The Patient Protection and Affordable Care Act of 2010 (i.e., Obamacare) reduced the criminal mens rea needed to prove health care fraud.
Nor is this a one-party problem. Although it happened too recently to be included in the Timeline, it is worth mentioning that the bipartisan criminal-law reform bill in the Senate omitted mens rea reform, including even the very basic idea of a default mens rea provision that would apply to statutes or regulations that do not otherwise specify the level of intent necessary to prove a criminal offense.
In the EPA criminal enforcement policy category of the Timeline, that agency’s decision to hire 200 new civil investigative demand agents and to curtail the agency’s successful self-audit policy show a preference for traditional enforcement over achieving positive environmental results.
In the DOJ criminal prosecution policies category, there are several examples of prosecutions that never should have been pursued. From charging a defendant who put a household chemical on someone’s doorknob with a violation of the Chemical Weapons Convention Implementation Act to charging a fisherman who threw three undersized fish overboard with destroying a “tangible object” under the Sarbanes-Oxley Act, prosecutors seem intent on overcharging—and, worse, DOJ seems willing to pursue these misguided cases all the way up to the Supreme Court. The latest example along these lines is the current indictment against FedEx for “laundering money” and “conspiring to traffic in controlled substances” because it delivered some packages containing prescription drugs to customers of Internet pharmacies.
Attorney-client privilege continues to be an area of concern too. Although the so-called Yates Memo was released after the Timeline went to press, the increased focus on prosecuting individual corporate officers that that memo portends will inevitably bring back the concerns that were sharpest about a decade ago when DOJ was also making the prosecution of white-collar crime a priority second only to terrorism. Because corporations do not have Fifth Amendment rights against self-incrimination, a favorite tactic of prosecutors has been to target the corporation to obtain documents that would not be available from individual defendants, and then go after specific individuals incriminated by the documents. To the extent that the Yates Memo envisions pressuring companies to turn over more information about potentially culpable individuals, this end-running of individuals’ Fifth Amendment protections will recur.
When it comes to deferred and non-prosecution agreements, the unmistakable trend is that DOJ is coming to rely on them more heavily. There were only 18 DPAs or NPAs from 1993-2002. Since then, there has been an average of more than 17 DPAs or NPAs each year. The question arises how often these agreements are causing companies to buckle who might otherwise—if pressed to defend their actions in court—prevail against overly aggressive interpretations of governing statutes. For example, in connection with an NPA, UPS forfeited $40 million to settle DOJ’s probe into its shipments on behalf of online pharmacies. If FedEx ultimately prevails in its case, it will raise a strong concern that UPS paid a stiff criminal penalty for doing something that was not illegal.
Finally, in the realm of proliferation of criminal laws, the Timeline notes that 439 new federal criminal offenses were added to the books from 2008-2013—a pace of almost 1 ½ new federal crimes every week. And even this frighteningly high number vastly understates the problem, as it only counts offenses in the U.S. Code. The innumerable new criminal penalties created in the Code of Federal Regulations by federal regulatory agencies further compounds the problem. On the bright side, the House of Representatives made an internal rule change at the beginning of this year to give the House Judiciary Committee concurrent jurisdiction over any bill containing criminal penalties. It will be interesting to see in future years whether that check on runaway legislation slows the growth of new criminal laws or not.
Overcriminalization developments continue to occur at an alarming pace, as demonstrated by the couple of examples mentioned above that happened even after the Overcriminalization Timeline went to print. Washington Legal Foundation will continue to cover them adroitly. We expect that the Federal Erosion of Business Civil Liberties Timeline will serve as a useful way to identify, track, and contextualize overcriminalization problems that arise in the months and years ahead.
Also published by Forbes.com on WLF’s contributor site