What a week in the world of white collar criminal law (UPDATED)

Last week was white collar law overload. Bridgegate (convictions reversed by SCOTUS). Varsity Blues (motion to dismiss for prosecutorial misconduct denied). Michael Flynn (prosecutors move to dismiss). And more.

Some random thoughts about these cases:

1. Why does it take the Supreme Court (9-0) to continue to reverse fraud convictions. The government is clearly overreaching with these statutes and yet lower courts almost never dismiss.

2. Same with respect to lower courts and prosecutorial misconduct. They almost never dismiss on prosecutorial misconduct claims, so it was no surprise that the district judge did not dismiss the Lori Loughlin case. Why not? How will prosecutors ever get the point that they should not engage in such behavior. Maybe the Loughlin lawyers will now file a motion to dismiss based on Bridgegate. After all, if fraud requires obtaining money or property, then lying to gain college admission may not be enough for wire fraud.

3. There has been lots of criticism for the in the Flynn case. But let's take a step back for a second. Remember that Flynn had moved to vacate his plea because the new DC prosecutors had recently turned over Brady material that had yet to be disclosed. We should be applauding the prosecutors for doing that. (A big shout out to Michael Sherwin, the DC supervisory prosecutor who made sure that disclosure happened after previous prosecutors did not disclose). If the judge had vacated the plea and allowed Flynn to go to trial, would the critics have been happier if the government had gotten spanked at trial? This was a distinct possibility because the lead witness for the government was former agent Peter Strozk. Imagine that cross! Comey would likely have also been a witness... Anyway, let's hope this materiality standard explained by Barr in the Flynn dismissal memo is used across the board for criminal defendants. Wouldn't that be a good thing? Of course our justice system should not be politicized, but there is quite a bit to grab onto in that Flynn motion to dismiss.

4. Some have said that the Flynn judge should deny the motion to dismiss. That is a bad idea and would set a very bad precedent. The Department of Justice brought the case. It's their prerogative to drop the case. That's how the adversary system works. Judges do not dismiss criminal cases when the defense asks. Now they aren't going to dismiss when the prosecutor asks? Rule number 1: never dismiss cases. Rule number 2: when in doubt, see rule number 1.

UPDATE 5. Mary B. McCord, an acting assistant attorney general for national security at the Justice Department from 2016 to 2017, wrote this op-ed in the New York Times, called "Bill Barr Twisted My Words in Dropping the Flynn Case. Here’s the Truth." I have to laugh in reading her piece. She complains that the 302 of her interview is "an interesting read" with "colorful adjectives" that "twist[s] her words." Now that's rich. The criminal defense bar has always said that 302 reports summarizing interviews are wholly unreliable and that interviews should be recorded. Prosecutors and investigative agencies like the FBI and DEA refuse to record and judges let agents testify from these reports about their interviews. McCord worked at DOJ for decades. Under her watch, thousands of non-recorded interviews took place and prosecutions relied on 302 and other interview reports to convict people. Now that she is reading her own 302, she complains. Welcome to the defense bar, Ms. McCord.

Blue Angels fly over Ferguson courthouse

First loop around downtown pic.twitter.com/L2AX1yg86z

— David Oscar Markus (@domarkus) May 8, 2020

Blue Angels flying over downtown Miami pic.twitter.com/ZBXcHVRLcp

— David Oscar Markus (@domarkus) May 8, 2020

Bridgegate convictions reversed

9-0 per Kagan.

Another example of the lower courts not stepping up and letting prosecutors run wild using fraud statutes.

Kagan's introduction:

For four days in September 2013, traffic ground to a halt in Fort Lee, New Jersey. The cause was an unannounced realignment of 12 toll lanes leading to the George Washing-ton Bridge, an entryway into Manhattan administered by the Port Authority of New York and New Jersey. For decades, three of those access lanes had been reserved during morning rush hour for commuters coming from the streets of Fort Lee. But on these four days—with predictable consequences—only a single lane was set aside. The public officials who ordered that change claimed they were reducing the number of dedicated lanes to conduct a traffic study.In fact, they did so for a political reason—to punish the mayor of Fort Lee for refusing to support the New Jersey Governor’s reelection bid. Exposure of their behavior led to the criminal convictions we review here. The Government charged the responsible officials under the federal statutes prohibiting wire fraud and fraud on a federally funded program or entity. See 18 U. S. C. §§1343, 666(a)(1)(A). Both those laws target fraudulent schemes for obtaining property. See §1343 (barring fraudulent schemes “for obtaining money or property”);§666(a)(1)(A) (making it a crime to “obtain[] by fraud . . . property”). The jury convicted the defendants, and the lower courts upheld the verdicts.The question presented is whether the defendants com-mitted property fraud. The evidence the jury heard no doubt shows wrongdoing—deception, corruption, abuse of power. But the federal fraud statutes at issue do not criminalize all such conduct. Under settled precedent, the offi-cials could violate those laws only if an object of their dis-honesty was to obtain the Port Authority’s money or property. The Government contends it was, because the officials sought both to “commandeer” the Bridge’s access lanes and to divert the wage labor of the Port Authority employees used in that effort. Tr. of Oral Arg. 58. We disagree. The realignment of the toll lanes was an exercise of regulatory power—something this Court has already held fails to meet the statutes’ property requirement. And the employees’ labor was just the incidental cost of that regulation, rather than itself an object of the officials’ scheme. We therefore reverse the convictions.

"Last week, likely for the first time in our history, we held no jury trials—not in my courtroom or in any other courtroom across the country."

That's how Judge Roy Altman starts this piece, "What we lose with jury trials on hold," in The Dispatch.  The whole thing is definitely worth a read.  Here's how it starts out:

Last week, likely for the first time in our history, we held no jury trials—not in my courtroom or in any other courtroom across the country. We have had jury trials, in every state in the union, for hundreds of years—since before we ratified the Constitution, before Jefferson wrote the Declaration of Independence. The jury trial is part of the fabric of who we are as a nation: John Adams first became famous for representing British soldiers before a Boston jury; Hamilton and Burr first grew to loathe each other in front of a New York jury; and Lincoln first perfected his plainspoken prose “riding circuit” with the judges and juries of rural Illinois. We will miss our jury trials—now more than ever—because they are, as Adams once called them, the “heart and lungs” of our democracy.
In political elections, our individual vote gets drowned out in a sea of thousands, or tens of thousands, or—in the context of presidential politics—even tens of millions of votes. But, in the jury room, as anyone who has ever seen 12 Angry Men knows, every vote counts—and not just as one vote out of 12. Because a jury’s verdict must (in most cases) be unanimous, in the jury room, any one vote counts as much as all the other votes combined. And that’s true whether the holdout vote is black or white, rich or poor, religious or agnostic.
In my courtroom, when I pick juries, I make it a point to look into the jurors’ faces as I call out their names. And, invariably, I see one unambiguous emotion imprinted there: horror. How—they seem to be thinking to themselves—could I have been this unlucky? Why—out of this cobbled-together collection of human beings—did this judge pick me? But, by the end of the trial, when I go back into the jury room to hand the jurors’ their certificates, and to thank them for their service to their community, I gaze into their faces again. And, this time, I inevitably see an entirely different emotion there—and that is gratitude. Why? Because, however toxic our politics might become—however much the national mood makes us feel as though we’re divided beyond repair—jury service reminds everyday people of how vibrant and alive our democracy truly is.

In other feel good news, you *have* to watch this graduation movie that UM Professor Ricardo Bascuas put together. It is truly incredible:

The law school asked faculty for short videos to mark graduation. Mine is a stringcite to key life lessons and a toast to our #ClassOf2020. #WeDontNeedRoads #WereAlreadyThere #LifeMovesPrettyFast #TakePleasureInTheDetails #BeExcellentToEachOther #DontGetCocky #DontCrossTheStreams pic.twitter.com/Ga7MFknn0k

— Ricardo Bascuas (@rbascuas) May 6, 2020

Finally, I wonder whether this was one of the advocates or one of the Justices.  Either way, I hope this doesn't happen to you during your next telephonic argument, let alone one in the Supreme Court:

LISTEN: Toilet flush during U.S. Supreme Court oral argument (h/t @nicninh) pic.twitter.com/He3QGMzvJI

— Jeremy Art (@cspanJeremy) May 6, 2020

Justice Ruth Bader Ginsburg is in the hospital

And now half the country is holding its breath until November, scared that the Court might tilt even more conservative.  From the AP:

Justice Ruth Bader Ginsburg was hospitalized Tuesday with an infection caused by a gallstone, but plans to take part in the court’s arguments by telephone Wednesday, the Supreme Court said.
The 87-year-old justice underwent non-surgical treatment for what the court described as acute cholecystitis, a benign gallbladder condition, at Johns Hopkins Hospital in Baltimore.
She is resting comfortably and expects to be in the hospital for a day or two, the court said.

But Ginsburg is a tough cookie.  She participated in oral argument yesterday and today, and says she will call in front the hospital tomorrow.  Here’s hoping for a speedy recovery!

It’s been an interesting two days of arguments.  Although I like the free-for-all of judges asking questions when they see fit, this format of asking questions by seniority has led to some interesting exchanges.  And we have seen Justice Thomas ask questions two days in a row!  Justice Sotomayor is all of us as she has forgotten to unmute her phone two days in a row. From AJC:

For a second straight day, Justice Clarence Thomas - who once went more than a decade from 2006-2016 without asking a single question in oral arguments - was instead a veritable legal chatterbox by phone."What has changed since this case was here last?" Thomas asked attorneys, in a case about rules related to federal funding for HIV/AIDS relief by overseas affiliates of U.S. non-profit groups.
***
“Justice Sotomayor?" Chief Justice John Roberts said, indicating that Sotomayor was next up for questions.After eight seconds of silence, the Chief Justice repeated himself."Justice Sotomayor?"There was a noise on the line, and an apology."I am sorry, Chief," Sotomayor said, sounding a bit sheepish. "Did it again."

Oops, I did it again...