Friday, November 15, 2013

Professor Dervan Testifies on Capitol Hill Regarding Overcriminalization, Regulatory Crimes, and Plea Bargaining


I was pleased to have the opportunity to testify yesterday before the House Committee on the Judiciary, Overcriminalization Task Force.  The focus on the hearing was potential solutions to overcriminalization, particularly regulatory overcriminalization. 



Below is a portion of my testimony:

" I commend the Task Force for its work, shining a light on the issue of overcriminalization and working to correct this fundamental problem in our criminal justice system.    

Before beginning a discussion of the possible solutions to the numerous problems associated with overcriminalization that have been identified by this Task Force during prior hearings, I think it is also important to consider once again the far reaching consequences stemming from the phenomenon of overcriminalization.  As reported by the American Bar Association in a 1998 study, forty-percent of the criminal laws passed since the Civil War were enacted after 1970.  Since the release of this ABA report, it is estimated that the federal government has created hundreds of additional criminal statutes and untold numbers of additional criminal regulatory provisions. 

One of the most visible results of overcriminalization in the last forty years has been the growth in the size of the American prison population.  In a report released in March 2009, the Pew Center on the States concluded that 2.3 million adults in the United States were in prison or jail.  This represented 1 out of every 100 adults.  Further, when adults in the United States who were on probation or parole were included, the total number under correctional control reached 7.3 million, or 1 out of every 31 adults.  Finally, as noted in a 2011 study, an estimated 65 million adults in the United States, which represents more than 1 in 4, have a criminal record.  Given these statistics, it should come as no surprise that the United States has the world’s largest prison population.  Though we represent only 5% of the world’s population, we have “almost a quarter of the world’s prisoners.”

It is also important to remember in this context that the consequences of conviction do not end when a prison sentence is completed.  There are hundreds of collateral consequences that can flow from a misdemeanor or felony conviction, regardless of whether a prison or jail sentence is ever served.  Further, such collateral consequences can impact not only the convicted but their family and community as well.  The breadth and significance of these collateral consequences cannot be understated, and I believe this is an important issue that this Task Force should consider addressing at a future hearing.

As evidenced by the work of this Task Force, there is now a deep and bipartisan appreciation for the significance of overcriminalization in our criminal justice system.  Therefore, let us consider several solutions that might be adopted by Congress to both reduce the negative impacts of past overcriminalization and prevent a return to overcriminalization in the future.  While this hearing is focused on solutions to regulatory crime, it is important to note that the solutions I propose below are applicable to all criminal offenses in the federal system and should be considered potential solutions to the broader issue of overcriminalization, not just regulatory overcriminalization.

Adopt a Default Rule for Mens Rea

First, mens rea is a cornerstone of our criminal justice system and conveys the idea that individuals should be prosecuted where they have acted with a guilty mind.  As Justice Jackson wrote in Morissette v. United States in 1952, “The contention that an injury can amount to a crime only when inflicted by intention is no provincial or transient notion.  It is as universal and persistent in mature systems of law as belief in freedom of the human will and a consequent ability and duty of the normal individual to choose between good and evil.”  Today, as a result of overcriminalization, there are many federal offenses for which there is no mens rea or only weak mens rea.  Where adequate mens rea is lacking, innocent and mistaken conduct can be criminalized under circumstances in which Congress never intended a person’s liberty to be put in jeopardy.    

To correct this problem, Congress should adopt a default mens rea rule.  Such a rule would correct unintentional omissions of a mens rea term in existing and future legislation and ensure that those without a guilty mind are protected from unwarranted prosecutions.  When adopting such a default rule, the Task Force should carefully consider the appropriate level of mens rea for incorporation as the default.  While many current federal criminal statutes utilize the lower-level mens rea standard of “knowingly,” this term generally only requires proof that the defendant had “knowledge of the facts that constitute the offense.”  Therefore, the utilization of the term “knowingly” will likely fail to achieve the Task Force’s goal of preventing application of regulator crimes and other offenses to individuals unless they intentionally engaged in inherently wrongful conduct or acted with knowledge that their conduct was unlawful.  A stronger and more appropriate term for utilization would likely be the term “willfully,” which would require some proof that the individual was aware his or her “conduct was unlawful.”

Adopt a Default Rule Applying Mens Rea to All Material Elements of an Offense

In addition to adoption of a default mens rea rule as described above, consideration must be given to codification of rules of construction that will assist in protecting the constitutional rights of defendants.  As one such example, the Task Force should consider adoption of a provision requiring courts to apply any mens rea term contained in or applicable to a statutory or regulatory offense to all material elements of that offense. 

There are several advantages to adopting such a rule.  First, this type of provision will assist in clarifying ambiguities if a default mens rea rule is adopted.  Second, such a provision will assist in preventing costly litigation regarding existing statutes that already contain a mens rea requirement but which are vague as to whether the mens rea applies to each of the material elements of the offense.  Third, adoption of a default rule will assist in creating greater uniformity amongst the various courts and their interpretations of statutes containing ambiguities as to the mens rea element.  Finally, such a provision will further the goals of this Task Force by helping to ensure that individuals are not prosecuted where they have not acted with a guilty mind.

. . .

It is important to note, of course, that Congress could still limit the application of a particular mens rea term in a particular statutory or regulatory offense.  In such cases, the specific legislation would simply need to include a clear indication of Congressional intent to limit the applicability of the mens rea term.  The default rule as described above would only apply in those cases where no such indication was present.

Adopt a Codification of the Rule of Lenity

As a second rule of construction, the Task Force should consider codifying the Rule of Lenity, a doctrine with a long and respected history in American law.  The Rule of Lenity states that “ambiguous criminal laws [are] to be interpreted in favor of the defendants subjected to them.”  Recently, in the case of United States v. Santos, Justice Scalia remarked regarding the Rule of Lenity:

This venerable rule not only vindicates the fundamental principle that no citizen should be held accountable for a violation of a statute whose commands are uncertain, or subjected to punishment that is not clearly prescribed.  It also places the weight of inertia upon the party that can best induce Congress to speak more clearly and keeps courts from making criminal law in Congress’s stead.

Unfortunately, the application of the Rule of Lenity by lower courts has not been consistent.  Therefore, the codification of this important doctrine is necessary to ensure its uniform application consistent with the doctrines that the government must sustain its burden of proof and defendants are presumed to be innocent.  Importantly, codification of the Rule of Lenity alone is not sufficient to correct the problems emanating from overcriminalization.  Rather, codification of the Rule of Lenity should be viewed only as an additional safeguard in combination with the above proposed solutions. 

Additional Possible Solutions

In addition to the above three solutions to the issue of overcriminalization and its impact on statutory and regulatory offenses, I believe consideration should also be given to several other ideas.  These include passage of a Congressional rule requiring every law that adds or modifies criminal offenses or penalties be subject to automatic referral to the relevant judiciary committee, enactment of a law that would require the federal government to produce a public report that assesses the justification, costs, and benefits of any new criminalization, and enactment of a law that would require Congress to approve any new or modified regulatory criminal offenses or penalties proposed by the Executive Branch.

Plea Bargaining

In closing, I would like to address one additional issue. 

Today, almost 97% of criminal cases in the federal system are resolved through a plea of guilty.  As the number, breadth, and sentencing severity of federal criminal statutes increased over the last century because of overcriminalization, prosecutors gained increased ability to create overwhelming incentives for defendants to waive their constitutional right to a trial by jury and plead guilty.  The power of the prosecution in this context has been made even greater by the presence of vague and esoteric regulatory offenses that require little or no mens rea.  At the same time, the financial and emotional costs to defendants and their families of proceeding to trial have grown into often insurmountable obstacles. 

Consider the examples already described in testimony before this Task Force.

In Mr. Lewis’s testimony regarding allegations he committed a felony violation of the Clean Water Act related to a blocked sewage line at work, he offered the Task Force a clear glimpse at the options he believed he had after been accused of a crime.  He stated, “I wound up pleading guilty to a federal misdemeanor because the prosecutors said that if I pled guilty, they wouldn’t oppose probation.  As a single dad, I was worried that if I went to prison there would be nobody to raise my children or care for my mother.” 

Ms. Kinder’s testimony regarding allegations that she had committed a felony violation of the Lacey Act related to the harvesting of paddlefish from the wrong side of the Ohio river also included a discussion of plea bargaining.  She stated, “We felt, and we still feel now, that we did nothing wrong.  But, on January 17, 2012, we made the painful and humiliating decision to plead guilty because we didn’t think we had a choice.  We were facing a maximum penalty of up to five years in prison, a $250,000 fine, or both, on each of four counts…  We couldn’t suffer the emotional and financial trauma of a trial, and we didn’t want to risk losing our freedom as well as our property.”  As a result, Ms. Kinder pleaded guilty to a misdemeanor.  

In each of these cases, one is offered insights into the various issues that prevent individuals from challenging criminal allegations today and exercising their constitutional right to put the government to its burden of proof at trial.  These challenges include steep sentencing differentials and penalties for proceeding to trial, along with significant financial and familial considerations.

As the examples offered by the witnesses before this committee demonstrate, we must recognize that a symbiotic relationship exists between overcriminalization and plea bargaining.  Plea bargaining and overcriminalization have perpetuated each other.  Plea bargaining has shielded overcriminalization from scrutiny.  At the same time, overcriminalization has provided the laws that allow prosecutors such wide discretion in selecting charges and creating significant incentives for defendants to plead guilty.  This relationship has lead us to our current state and created an environment in which we have jeopardized the accuracy of our criminal justice system in favor of speed and convenience.

And this is not only occurring in regulatory cases.  It is occurring in all manner of criminal cases throughout the country.

Consider for example, the nationally publicized case of Brian Banks.  In 2002, Banks, who was sixteen years old at the time, was a top college football prospect.  His world came crashing down, however, when he was wrongfully accused of sexual assault and kidnapping by an acquaintance.  After his arrest, Banks was offered a choice.  If he pleaded guilty, the government would recommend a three year sentence.  Should he proceed to trial, he could risk receiving a sentence of 41 years to life.  Banks, who some reports indicate was given only 10 minute to decide his fate, took the plea offer.  After serving five years in prison, Banks was contacted by the accuser who admitted that she had lied about the incident.  She allegedly refused to inform authorities of the falsity of her original allegations, however, because of a large financial settlement previously awarded to her in the case.  After secretly taping the accuser’s admission that the assault had not occurred, Banks was exonerated in 2012.

Consider also the case of Ada JoAnne Taylor.  In 1989, Taylor and five others were accused of killing a sixty-eight-year-old woman in Beatrice, Nebraska.  The options offered to Taylor were starkly different.  If she pleaded guilty and cooperated with prosecutors, she would be rewarded with a sentence of ten to forty years in prison.  If, however, she proceeded to trial and was convicted, she would likely spend the rest of her life behind bars.  The choice was difficult, but the incentives to admit guilt were enticing.  A sentence of ten to forty years in prison meant she would return home one day and salvage at least a portion of her life.  The alternative, a lifetime behind bars, was grim by comparison.  After contemplating the options, Taylor pleaded guilty to aiding and abetting second-degree murder.  In reality, however, she was innocent.  After serving nineteen years in prison, Taylor was exonerated after DNA testing proved that neither she nor any of the other five defendants in her case were involved in the murder. 

Through academic study, we now know that the actions of Brian Banks, Ada JoAnne Taylor and many others are not anomalies.  Factually and morally innocent people facing tough circumstances, such as penalties for proceeding to trial or a realization of the financial costs of challenging an indictment, will falsely confess to something they have not done.  As an example, in a recent article written by Dr. Vanessa Edkins (Assistant Professor, Department of Psychology, Florida Institute of Technology) and myself and published in the Journal of Criminal Law and Criminology, we discovered that more than half of the innocent participants in our study were willing to falsely admit guilt in return for a perceived benefit.

As we now know the true power of plea bargaining from both actual criminal cases and from academic research, we must begin to examine the impact that overcriminalization has had on this most fundamental aspect of the American criminal justice system.  I hope, therefore, that this Task Force and the Committee on the Judiciary will next turn its attention to modern day plea bargaining, one of the many outgrowths of the overcriminalization phenomenon. 

Along with plea bargaining, there are many other issues currently being debated in the legal academy and legal profession that are appropriate for this Task Force’s review.  Those might include issues related to collateral consequences of conviction, mandatory minimum sentences, forfeiture provisions, and conspiracy laws.  While those are not the topics of today’s proceedings, I think they are topics ripe for investigation and analysis at future hearings considering overcriminalization and the state of the American criminal justice system.

Thank you for the opportunity to testify today.  I welcome any questions the Task Force might have regarding my remarks."


The work of this bipartisan Task Force and the overwhelming interest in finding a solution to the issue of overcriminalization give me great hope that meaningful reforms are on the horizon.

A copy of my full written testimony may be found here, along with a video link to the hearing.

Monday, November 4, 2013

Johnson & Johnson settles "kickback" charges with $2.2 billion penalty

It was a good day for the government.  Along with reports that SAC Capital will pay $1.8 billion in fines related to insider trading allegations, Johnson & Johnson has reportedly agreed to pay $2.2 billion to settle allegations regarding the marketing of drugs for unapproved uses and the payment of kickbacks to doctors and nursing homes.
The penalties announced Monday involve fines and forfeiture to the federal government and several states. The settlement involves the schizophrenia drugs Risperdal and Invega, and the heart failure drug Natrecor, the company and Attorney General Eric Holder said...

The penalty amounts to one of the country's largest health care-related settlements, the Justice Department said.

It also results in what one plaintiff's attorney called the largest whistleblower payout in U.S. history. Whistleblowers in three states will collect $167.7 million under the False Claims Act...

The settlement includes payments to the federal government and several states by Johnson & Johnson, as well as subsidiaries Janssen Pharmaceuticals and Scios.
The entire CNN article is available here.

SAC Capital to Plead Guilty to Charges of Insider Trading

According to CNN, SAC Capital has agreed to pay a $1.8 billion fine and plead guilty to criminal insider trading charges. 
In addition, prosecutors say SAC will close its investment advisory business, meaning it will no longer manage money for outside investors. The deal still allows the firm to operate as a "family office," with Cohen and others at SAC investing their own money.

Cohen is one of the country's most famous hedge fund managers, with a net worth estimated at $9.4 billion in September. He could still face criminal charges of his own since the agreement does not include any immunity for individuals at the firm.

Prosecutors accused SAC in their indictment of fostering a culture of insider trading "that was substantial, pervasive, and on a scale without known precedent." The indictment excerpts a number of e-mails and instant messages from SAC traders suggesting they had illicit information from corporate insiders.

"What SAC Capital's plea demonstrates is that cheating and breaking the law were not only permitted, but allowed to persist," FBI Special Agent in Charge April Brooks said. "It was nothing short of institutional failure."

The deal still awaits approval from a judge. Preet Bharara, U.S. Attorney for the Southern District of New York, said the government's investigation remains ongoing.
The entire CNN article is available here.