Supreme Court Strikes Another Blow Against Prosecuting Corruption in the Buffalo Billions Case

Inspired by Will Baude and Dan Epps‘ Divided Argument podcast, we wrote about a pending SCOTUS case Ciminelli v. United States last November.  Now, thanks are due to Leah Littman, Melissa Murray, and Kate Shaw, and the Strict Scrutiny Podcast’s “You Can Crime if You Want To” episode, for reminding me of the case and alerting me to the two opinions that SCOTUS has now issued.

Justice Thomas (left) wrote for the Court in Ciminelli v. United States.  As we noted in our prior post, the operative legal theory at the District Court and in the Second Circuit was the so-called “right of control,” a property-based fraud theory that permits conviction where the defendant through wire fraud (18 U. S. C. §1343) deprives victims of valuable economic information necessary to make discretionary decisions.  The Court unanimously rejected the “right of control” theory as a basis for criminal liability under 18 U. S. C. §1343.

That’s too bad, because the opinion outlines what clearly seems to be a criminal conspiracy to rig government contracts by using businesses as front companies so as to direct very large construction contracts to politically-connected insiders.  The Court based its ruling on the statutory text as well as prior case law in which the Court held that the statute does not create a general federal power to police integrity or punish deception.  The crime must involve money or property and not intangible interests such as “honest services.”   

You don’t need a Weatherman to know that the winds at SCOTUS are blowing in the direction of tighter scrutiny of white-collar criminal convictions, and so the government abandoned the “right of control” theory in its briefing.  Rather, the government tried to persuade the court that there was sufficient evidence in the record to sustain the conviction on a more traditional theft-of-money-or-property theory.  The Court remanded the case to let an actual jury make that determination.  Justice Alito filed a concurring opinion in which he hinted that, if he were on the jury, he knows what he would find . . . .

Justice Alito wrote for the Court in Percoco v. United States, except that Justice Jackson did not join Part II-C-2.  That part is a bit substantive chunk of the opinion, so I am not sure what it means for her to concur except for that part.  Criminal law.  Sheesh.

Joseph Percoco was convicted of mail and wire fraud for having deprived the public of its intangible right to honest services.  The Court noticed in Ciminelli that intangible offenses such as “honest services” violations cannot provide a basis for conviction under 18 U.S.C. § 1843, but Percoco was convicted under 18 U.S.C. § 1846, which Congress enacted in response to a SCOTUS decision and which specifically encompasses a “scheme or artifice to deprive another of the intangible right of honest services.”

Percoco was a close associate of Governor Cuomo.  During a brief time when he was not an official state employee, but was still an informal advisor to the Governor and was employed by the Governor’s campaign, he took $35,000 to operate as a political fixer.  On appeal, he argued that an honest services violation can only occur when the defendant is a public official.  The Court rejected that argument as too sweeping.  Nonetheless, the Court found that the jury instructions in Percoco’s case were incorrect.  As in Ciminelli, the government did not defend those instructions but argued that the error was harmless.  Unsurprisingly, the Court disagreed and remanded the case for further proceedings consistent with the opinion.  The instructions on what constitutes an honest services violation were too vague.  The Court did not indicate whether the government’s alternative grounds for upholding the conviction could provide a basis for a conviction if actually presented to a jury, nor did it provide clear guidance on what instructions would survive its vagueness analysis.

Justice Gorsuch, joined by Justice Thomas, concurred but would go one step further.  As currently written, 18 U.S.C. § 1836 does not provide private citizens with adequate notice of what constitutes a violation.  The Justices could put their heads together, Justice Gorsuch confidently predicts, and draft a better version of the statute, but that is not their job.  The Court “should decline further invitations to invent rather than interpret this law.”  And anyway, the Court’s invention workshop is already working overtime on new wrinkles to the major questions doctrine, the history-and-tradition approach to the Fourteenth Amendment, the alternative to Smith in the Free Exercise context, a new version of the dormant commerce clause, and a version of standing flexible enough to allow pro-life doctors with no connection to mifepristone to challenge 20+-year-old FDA rulings.

But I digress.