NACDL - Inside NACDL: Overcriminalization: It Can Be Complex or Simple, But It Is Always Wrong

Access to The Champion archive is one of many exclusive member benefits. It’s normally restricted to just NACDL members. However, this content, and others like it, is available to everyone in order to educate the public on why criminal justice reform is a necessity.

For the annual white collar crime issue of The Champion, this column returns to a familiar theme: the transcendent need for this nation to rein in overcriminalization. Overcriminalization is a word that was largely unknown in the lexicon of the criminal law until the past several years. NACDL has been in the vanguard of heightening public awareness about the problem, and it is a topic that has been regularly addressed in this column.¹ Just this past September, NACDL brought the issue to Capitol Hill when it sponsored a briefing for congressional staffers titled Striking the Right Balance:Criminal v. Civil Enforcement. The program addressed two key questions: How should the federal government strike the right balance between the use of criminal law sanctions instead of civil law sanctions? And are prosecutors expanding the reach of criminal statutes to address conduct that was clearly not contemplated by Congress when enacted?

To address these questions, Professor Lucian Dervan of the Southern Illinois University School of Law, who has written extensively on these and related issues, moderated a panel that included pre-eminent criminal defense litigators who have dealt with cases of manifest overcriminalization. Adeel Bashir, from the Office of the Federal Defender in the Middle District of Florida, discussed the Yates case — a case in which federal prosecutors employed the anti-shredding provisions of Sarbanes-Oxley to prosecute a fisherman for allegedly disposing of three undersized fish. Marjorie Peerce, a partner at Ballard Spahr, described a series of cases in which prosecutors employed a novel theory to prosecute stock exchange trading specialists for conduct that was ambiguous at best. Ultimately the theory of criminality was rejected by the appellate court — but not before several defendants endured the humiliation and cost of trials, and others, to avoid the trial penalty if convicted, pled guilty and served time in jail for conduct that it turned out was not even criminal.

Finally, John Lauro, of the Lauro Law Firm, described an outrageous prosecution that will be discussed in detail later in this column.² Indeed the case he described and one other case currently in ligation, which was not addressed at the program, underscore how pervasive the problem is and how unchecked criminal prosecutions have become in this country. And make no mistake about it — a criminal prosecution should never be invoked lightly. The consequences are simply too devastating for too many, and that is why overcriminalization must be addressed.

The term overcriminalization embraces many flaws in the criminal justice system, from overly aggressive policing practices in some venues, to unchecked abuse of prosecutorial power. But two illustrative cases typify the two most common causes of overcriminalization: (1) prosecutorial over-expansion of a criminal statute to cover situations that were not even remotely considered criminal by lawmakers when a statute was enacted and (2) legislative overreach to explicitly criminalize behavior that by no stretch of the imagination should trigger a criminal prosecution.

First, John Lauro discussed the case of United States v. Clay, a case that is slated for argument in the Eleventh Circuit early in October. The case involves the prosecution of leading executives of a medical services provider company in Tampa, Fla. The factual background is exceedingly complex, and essentially involves a prosecution based solely upon a disagreement as to how to interpret a state Medicaid statute.³ Even though the defendants took an informed and reasonable approach, the federal government applied a different interpretation and brought the case based on its view that its interpretation rendered certain medical service contracts and related statements criminally false. The government brought the case despite relevant authority that a false statement charge is inapplicable when the statement is true under an objectively reasonable interpretation of the law.⁴ Legal nuances aside, what is most troubling about the Clay case is that individuals, who in the ordinary course of their business do their best to try to comply with a complicated and ambiguous regulatory regime, are forced to gamble with their freedom. The combination of vague laws and overly zealous prosecutors is toxic. When lawyers themselves cannot agree on how a set of rules and regulations should be applied, it is nothing less than immoral to subject lay individuals to the catastrophe of a criminal prosecution.

Another species of overcriminalization exists — the criminalizing of all manner of disfavored personal or social behavior. In those cases, the law is clear. It is just its application that is idiotic and cruel. Like many communities in America, Boise, Idaho, has a problem with homelessness. Also, like many other communities, Boise would like to expeditiously get rid of its homeless population, although not necessarily by addressing the underlying problems that breed homelessness. In Bell v. City of Boise, et al.,⁵ a group of homeless individuals challenged their convictions under Boise Municipal Code ordinances that prohibit camping on streets or parks or public places and that prohibit “disorderly conduct,” which includes sleeping in public. That’s right. Boise has arrested homeless people for sleeping.

This case is hardly aberrational. Over the years, as NACDL has studied misdemeanor courts, researchers have documented the prevalence of prosecutions for such innocuous behavior as taking up two or more seats on a subway or feeding the homeless. But what is quite remarkable is that in the Boise case, the U.S. Department of Justice (DOJ) took the extraordinary step of filing a statement of interest in support of the plaintiffs. In that statement, DOJ agreed that invoking a criminal statute to prosecute a homeless person for sleeping in public is a violation of the Eighth Amendment ban on cruel and unusual punishment. Noting that on any given night half a million people in the United States are homeless, DOJ observed:

It should be uncontroversial that punishing conduct that is a universal and unavoidable consequence of being human violates the Eighth Amendment. … Sleeping is a life-sustaining activity — i.e., it must occur at some time in some place. … If the court finds that it is impossible for homeless individuals to secure shelter space on some nights because no beds are available, no shelter meets their disability needs, or they have exceeded the maximum stay limitations, then the Court should also find that enforcement of the ordinances under those circumstances criminalizes the status of being homeless and violates the Eighth Amendment to the Constitution.⁶

This important statement by the DOJ is indeed refreshing and important. NACDL President Gerry Morris observed that the filing is “another sign that the nation and its leaders have grown weary with the failed, decades-long experiment criminalizing all manner of human conduct.” Hopefully, Gerry’s observation will prove to be an accurate prognostication. Judging by the attorneys listed on the Statement of Interest, the filing was the product of the DOJ Civil Rights Division and Office for Access to Justice. Now, if only that point of view could gain traction in the Criminal Division, there might be some real progress in the effort to rein in overcriminalization.

Notes

Read the following “Inside NACDL” columns in The Champion magazine: ‘Without Intent’ — NACDL Makes the Case for Reasonable Lawmaking, May 2010 at 9; When It Comes to Overcriminalization, Prosecutorial Discretion Is for the Birds, September/October 2012 at 9; A Lamentable Example of Overcriminalization: HIV Criminalization, December 2013 at 7; Whether Fish or Fowl — Prosecutorial Overreach Is a Poisonous Aspect of Overcriminalization, September 2014 at 7; Overcriminalization and the Trial Penalty: Gaining Traction One Case — and One Justice — at a Time, January/February 2015 at 9; and Changing the Rules of the House: A Tangible Step to Stem the Tide of Overcriminalization, March 2015 at 9.
Readers are encouraged to view the one-hour program in its in entirety at http://www.nacdl.org/overcrim.
NACDL has filed an amicus brief in the case. Matthew G. Kaiser, an author of the amicus brief, also wrote an article that provides an excellent encapsulation of the facts that gave rise to this abusive prosecution:
Wellcare provided health care services under Florida’s Medicaid program pursuant to its so-called 80/20 Statute (Fla. Stat. § 409.912(4)(b)). Under the 80/20 Statute, a health care provider must spend 80 percent of the premiums it receives “for the provision of behavioral health care services.” If it spends less than 80 percent for those services — because, for example, it incurs higher administration costs — then the provider must return the difference to the state. Wellcare interpreted the statutory phrase “for the provision of health care services” such that it could lawfully set up a subsidiary to provide patient services. In that scenario, the subsidiary would be the health care provider and would be paid a portion of the premium dollars that Florida’s Medicaid program paid for these services. Wellcare reported the payments made to the related subsidiary as expenses under the 80/20 Statute, and it returned the unspent premiums to the state under the formula. No state statute, rule, or contract provision prevented this method of calculating the payback to the state. Moreover, other managed-care providers in Florida interpreted the 80/20 Statute in a manner identical to Wellcare’s interpretation. Florida’s Agency for the Health Care Administration (AHCA), which implements the state’s Medicaid program, did not promulgate a regulation on whether payments to subsidiaries were an allowable expense under the 80/20 Statute. Indeed, at the criminal trial, the government’s own witnesses, including the statute’s primary author, testified that Wellcare’s interpretation of the 80/20 Statute was reasonable. Moreover, among the other managed-care providers embracing Wellcare’s interpretation, only one was sued. That provider settled a civil case with AHCA. Instead of paying a penalty, the provider agreed to employ Florida’s suggested method in the future.
Matthew G. Kaiser, Clay v. United States: When Executives Receive Jail Time for Ordinary Business Decisions, Legal Backgrounder, Vol. 30 No. 5 (March 2015), available at http://www.wlf.org/upload/legalstudies/legalbackgrounder/031315LB_Kaiser.pdf.
See United States v. Whiteside, 285 F.3d 1345, 1351 (11th Cir. 2002). See also NACDL’s amicus brief in United States v. Clay (go to http://www.nacdl.org/Amicus and click the 2014 link).
Bell v. Boise, et al, Civil Action No 1:09-cv-00540-REB (D. Idaho).
Read the document at http://www.nacdl.org/DOJstatementsofinterest.