This type of post has appeared on these pages numerous times.
Even though the current Supreme Court is often ideologically divided, the Court has shown remarkable consistency in recent years in rejecting overly expansive interpretations of a federal criminal statute by the Department of Justice.
This week’s decision in Thompson v. U.S. was just the latest example.
The decision, authored by Chief Justice John Roberts, was unanimous.
The opinion begins:
“Patrick Thompson took out three loans totaling $219,000 from the same bank. Later, Thompson told the Federal Deposit Insurance Corporation (FDIC) that he had “borrowed . . . $110,000” from the bank. Thompson was indicted under 18 U. S. C. §1014 for making “false statement[s]” to the FDIC. Thompson argued that his statements were not false because he had in fact taken out a loan for $110,000 just as
he said. Both the District Court and the Seventh Circuit held that they did not need to consider that argument. In their view, the prohibition in §1014 against “false statement[s]” extends to misleading ones as well, and Thompson’s statements were at least misleading in failing to mention the additional loans. The question presented is whether §1014 criminalizes statements that are misleading but not false.”
The decision continues (internal citations omitted):
“We start with the text. Section 1014 criminalizes “knowingly mak[ing] any false statement or report.” It does not use the word “misleading.” Yet false and misleading are two different things. A misleading statement can be true. And a true statement is obviously not false. So basic logic dictates that at least some misleading statements are not false.
The Government agrees with this principle, and even suggested an example at oral argument: If a tennis player says she “won the championship” when her opponent forfeited, her statement—even if true—might be misleading because it could lead people to think she had won a contested match. The Government also agreed at oral argument with another example: If a doctor tells a patient, “I’ve done a hundred of these surgeries,” when 99 of those patients died, the statement—even if true—would be misleading because it might lead people to think those surgeries were successful.
Given that some misleading statements are also true, it is significant that the statute uses only the word “false.” If that word means anything, it means “not true,” both today and in 1948 when the statute was enacted.” Just as a matter of plain text, then, a statement that is misleading but true is by definition not a “false statement.”
[…]
The Government wisely agrees that “false” means “not true.” But, dictionary in hand, the Government notes that “false” can also mean “deceitful.” And, thesaurus in the other hand, the Government adds that “false and misleading have long been considered synonyms.” Absent from the Government’s account, however, is the fact that some misleading statements are not false, as the Government acknowledged at oral argument. Given that fact, the Government’s textual arguments simply point out the “substantial overlap” between the two terms. That overlap is beside the point. Certainly, the statute’s prohibition on “false statement[s]” could reach some statements that are “mislead[ing],” “deceitful,” “deceptive,” or “mendacious,” but only because those particular statements are also false. Regardless of whether other adjectives apply, the only relevant question according to the text of the statute is whether the statement is “false.”
The court held:
“Statutory context confirms that §1014 does not cover all misleading statements. Again, the statute uses the word “false.” It does not use “misleading.” Many other statutes do, including other criminal statutes in Title 18 of the U. S. Code. Interpreting the word “false” to include “misleading” would make the inclusion of “misleading” in those statutes superfluous.
[…]
In casual conversation, people use many overlapping words to describe shady statements: false, misleading, dishonest, deceptive, literally true, and more. Only one of those words appears in the statute. Section 1014 does not criminalize statements that are misleading but true. Under the statute, it is not enough that a statement is misleading. It must be “false.”
The Thompson decision follows a clear trend over the last approximate 15 years of the Supreme Court overturning expansive DOJ interpretations of federal criminal statutes.
For instance in U.S. v. Skilling (2010), the Supreme Court rejected the DOJ’s “honest services fraud” theory of criminal prosecution. Instead of the broad construction the DOJ urged, the Court adopted a narrow interpretation of the relevant statute and reiterated “if Congress desires to go further, it must speak more clearly.”
Likewise in Bond v. U.S. (2013), the Supreme Court unanimously rejected the DOJ’s theory of criminal prosecution. Instead of the expansive construction of the term “chemical weapons” the DOJ urged, the Court adopted a narrow interpretation stating that the DOJ’s interpretation “would sweep in everything from the detergent under the kitchen sink to the stain remover in the laundry room.”
Similarly, as highlighted in this prior post, in U.S. v. Yates (2015), the Supreme Court again rejected the DOJ’s theory of criminal prosecution in the infamous are fish “tangible objects” case. Calling the DOJ’s enforcement theory an “unrestrained” and “unbounded” reading of relevant statute, the Court reversed the 11th Circuit’s opinion affirming the criminal conviction.
In U.S. v. McDonnell (2015) (see here for the prior post), the Supreme Court again rejected the DOJ’s theory of criminal prosecution. Calling the DOJ’s theory of prosecution “boundless,” the Court adopted a narrow interpretation of the meaning of “official action” (a term that also appears in the FCPA) in the federal bribery statute. As stated by the Court:
“There is no doubt that this case is distasteful; it may be worse than that. But our concern is not with tawdry tales of Ferraris, Rolexes, and ball gowns. It is instead with the broader legal implications of the Government’s boundless interpretation of the federal bribery statute. A more limited interpretation of the term “official act” leaves ample room for prosecuting corruption, while comporting with the text of the statute and the precedent of this Court.”
The McDonnell court further stated (internal citations omitted)
“[W]e cannot construe a criminal statute on the assumption that the Government will “use it responsibly.” The Court in Sun-Diamond declined to rely on “the Government’s discretion” to protect against overzealous prosecutions under §201, concluding instead that “a statute in this field that can linguistically be interpreted to be either a meat axe or a scalpel should reasonably be taken to be the latter.” A related concern is that, under the Government’s interpretation, the term “official act” is not defined “with sufficient definiteness that ordinary people can understand what conduct is prohibited,” or “in a manner that does not encourage arbitrary and discriminatory enforcement.” Under the “‘standardless sweep’” of the Government’s reading, public officials could be subject to prosecution, without fair notice, for the most prosaic interactions. “Invoking so shapeless a provision to condemn someone to prison” for up to 15 years raises the serious concern that the provision “does not comport with the Constitution’s guarantee of due process.” Our more constrained interpretation of §201(a)(3) avoids this “vagueness shoal.””
In Digital Realty Trust v. Somers (2018) (see here for the prior post) the Supreme Court once again reminded us that the law means what actual words in a specific statute say (not what other similar statutes may say) and not what the SEC interprets words in a statute to mean.
In Kelly v. U.S. (2020) (see here for the prior post) (the so-called Bridgegate case in which the DOJ charged former public officials who worked at or with the Port Authority of New York and New Jersey and had political ties to former New Jersey Governor Chris Christie), the Supreme Court unanimously reversed criminal convictions even though “the evidence the jury heard no doubt shows wrongdoing – deception, corruption, abuse of power.” In so doing, the court stated that “the federal fraud statutes at issue do not criminalize all such conduct” and that “not every corrupt act by state or local officials is a federal crime.”
In Van Buren v. U.S. (2021) (see here for the prior post), the Supreme Court rejected the DOJ’s expansive interpretation of the Computer Fraud and Abuse Act and concluded that actual words in a statute have meaning and that federal criminal statutes are not all-purpose ethics statutes.
In Ciminelli v. United States (2023) (see here for the prior post) the Supreme Court rejected the DOJ’s expansive interpretation of the federal wire fraud statute holding that federal fraud statutes criminalize only schemes to deprive people of traditional property interests and that “potentially valuable economic information” “necessary to make discretionary economic decisions” is not a traditional property interest. In so holding, the court noted that the government’s enforcement theory was “unmoored from the federal fraud statutes’ text” and “vastly expands federal jurisdiction without statutory authorization.”
In Percoco v. United States (2023) (see here for the prior post) the Supreme Court considered “whether a private citizen with influence over government decision-making can be convicted for wire fraud on the theory that he or she deprived the public of its “intangible right of honest services.” At trial the defendant was convicted based on instructions that required the jury to determine whether he had a “special relationship” with the government and had “dominated and controlled” government business. The Supreme Court concluded that this is not the proper test for determining whether a private person may be convicted of honest-services fraud because the jury instruction did not define “the intangible right of honest services” “ ‘with sufficient definiteness that ordinary people can understand what conduct is prohibited,’” or “‘in a manner that does not encourage arbitrary and discriminatory enforcement.’”
In Snyder v. U.S. (2024) (see here for the prior post), the Supreme Court rejected the DOJ’s expansive interpretation of 18 U. S. C. §666 for at least six reasons. In framing the issue, the court held:
“Section 666 of Title 18 makes it a crime for state and local officials to “corruptly” solicit, accept, or agree to accept “anything of value from any person, intending to be influenced or rewarded” for an official act. §666(a)(1)(B). That law prohibits state and local officials from accepting bribes that are promised or given before the official act. Those bribes are punishable by up to 10 years’ imprisonment. The question in this case is whether §666 also makes it a crime for state and local officials to accept gratuities—for example, gift cards, lunches, plaques, books, framed photos, or the like—that may be given as a token of appreciation after the official act. The answer is no.”
In Fischer v. U.S. (2024) (see here for the prior post), the Supreme Court rejected the DOJ’s expansive interpretation of Section 1512 of the Sarbanes Oxley Act of 2002.
And then of course there were Supreme Court benchslaps of SEC statute of limitations positions in Gabelli v. SEC (2013) (see here for the prior post) and Kokesh v. SEC (2017) (see here for the prior post) as well as the Supreme Court’s benchslap of the Federal Trade Commission in 2021 (see here for the prior post) as well as the Department of Health and Human Services in 2021 (see here for the prior post).
