Academic journal article Harvard Law Review

Sarbanes-Oxley Act - Destruction of Evidence

Academic journal article Harvard Law Review

Sarbanes-Oxley Act - Destruction of Evidence

Article excerpt

After a series of catastrophic corporate and accounting frauds in the early 2000s, (1) Congress passed the Sarbanes-Oxley Act of 2002. (2) The Act included a provision, codified as 18 U.S.C. [section] 1519, making it a crime, punishable by up to twenty years in prison, to "knowingly alter[], destroy[], ... falsif[y], or make[] a false entry in any record, document, or tangible object" in order to obstruct a federal investigation. (3) In 2011, Florida fisherman John Yates was convicted under that provision for destroying not records, not documents, but seventy-two undersized red grouper. Last Term, in Yates v. United States, (4) the Supreme Court threw out Yates's conviction, holding that the phrase "tangible object," for purposes of [section] 1519, encompasses only objects "used to record or preserve information." (5) While the plurality opinion is couched in the language of statutory interpretation, a constitutional concern lurks under the surface: the level of notice mandated by the Due Process Clause. The Court reached the right result in narrowing the statute's application, but it should have clearly identified the due process problem and applied the canon of constitutional avoidance to accomplish the same ends.

In August 2007, Yates was leading a fishing expedition in the Gulf of Mexico when his vessel, the Miss Katie, was boarded by John Jones, a Florida official tasked with enforcing state and federal fishing laws. (6) Jones noticed that three red grouper on the boat appeared to be shorter than the twenty inches required by federal regulations. (7) Jones measured all of Yates's grouper, determining that seventy-two fish were undersized and separating those from the remainder of the haul. (8) Jones issued a citation for this civil violation and told Yates to leave the undersized fish in their separate crates. (9) Four days later, after the Miss Katie had returned to shore, Jones reviewed the offending fish and noticed that many were now longer than those he had previously measured. (10) Suspecting foul play, Jones questioned a crewmember, who admitted that Yates had instructed the crew to cast the undersized grouper overboard and replace them with larger fish. (11)

In May 2010, almost three years after instructing his crew to toss the too-small grouper overboard, Yates was indicted for violating 18 U.S.C. [section] 1519. (12) The government took the position that the discarded fish were "tangible objects" within the meaning of the statute, and that Yates had intentionally destroyed evidence relevant to a federal investigation. During his trial, Yates moved for a judgment of acquittal, arguing that [section] 1519's reference to a "tangible object" must be read in light of the destruction of evidence in the Enron implosion that spurred Sarbanes-Oxley's passage. (13) It should thus be interpreted to reach only physical items used to store information--things like hard drives, not fish. (14) However, the trial judge applied binding Eleventh Circuit precedent, which read the provision broadly, and denied the motion. (15) Yates was convicted and sentenced to thirty days imprisonment, followed by supervised release for three years. (16)

The Eleventh Circuit affirmed Yates's conviction, attending to the scope of [section] 1519 in a single paragraph. (17) Writing for a unanimous panel, Judge Dubina held that the term "tangible object" "unambiguously applies to fish." (18) The court also determined that because the statute was clear, the rule of lenity did not apply. (19)

The Supreme Court reversed. Writing for a plurality of the Court, Justice Ginsburg (20) began her analysis with the ordinary meaning of the statutory term. On its face, "tangible object" would clearly encompass fish, as they are things that can be "seen, caught, and handled." (21) However, "[i]n law as in life, ... the same words, placed in different contexts, sometimes mean different things." (22) For Justice Ginsburg, the context in Yates started with [section] 1519's title--"Destruction, alteration, or falsification of records in Federal investigations and bankruptcy"--and the title of the section of Sarbanes-Oxley that created [section] 1519--"Criminal penalties for altering documents. …

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