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Dissenting from Order Denying Rehearing En Banc, Judges Voice Concerns About Overbroad Criminal Statutes Enabling Prosecutorial Abuse

Yesterday the Second Circuit issued an order denying rehearing en banc in United States v. Marinello, No. 15-224, after an active judge of the Court had requested a poll as to whether the case should be reheard by the full Court.  Two judges (Jacobs and Cabranes) dissented from the denial of rehearing en banc.  Writing for the dissenters, Judge Jacobs wrote that the panel decision placed the Second Circuit “on the wrong side of a circuit split” by affirming a conviction based on “the most vague of residual clauses,” and that in doing so the Court had paved the way for “prosecutorial abuse.”

Marinello involved the prosecution of a defendant for various violations of the tax code based on the defendant’s failure between 1992 and 2010 to keep corporate books and records for his business and to file personal and corporate tax returns.  Marinello was convicted at trial on nine counts, and eight of those counts raised no issues according to Judge Jacobs’s dissent from en banc rehearing.  The dissent was troubled, however, by the count of conviction under the so-called omnibus clause of 26 U.S.C. § 7212(a).  This clause makes it a felony to “in any other way corruptly . . . obstruct[] or impede[], or endeavor[] to obstruct or impede, the due administration of this title [i.e., the Internal Revenue Code].”  The government had charged Marinello with violating this clause in eight different ways (e.g., failing to maintain corporate records, destroying corporate records, and paying employees with cash) and at trial the jury was instructed that it could convict Marinello under the omnibus clause as long as each juror determined that Marinello had violated the statute in any one of those ways. 

The district court rejected Marinello’s argument that, consistent with the Sixth Circuit’s interpretation of Section 7212(a)’s omnibus clause in United States v. Kassouf, 144 F.3d 952 (6th Cir. 1998), conviction under Section 7212(a) required a finding that Marinello had knowingly interfered with a pending IRS investigation.  Kassouf relied on an analogy to 18 U.S.C. § 1503, which prohibits obstruction of a judicial or grand jury proceeding; although Section 1503 is worded broadly, the Supreme Court has imposed a requirement that there be a nexus between the defendant’s misconduct and the judicial or grand jury proceeding.  See United States v. Aguilar, 515 U.S. 593, 599 (1995).  Based on differences between the text of the two statutes, the phrasing of the prohibition, and the legislative history, the Second Circuit’s panel decision (written by Judge Sack, with Judge Pooler and District Judge Failla in agreement) rejected the analogy to Section 1503 and affirmed the conviction.  United States v. Marinello, 839 F.3d 209 (2d Cir. 2016).

Judge Jacobs’s dissent argued that the panel decision in Marinello erred in not adopting the limiting construction on Section 7212(a) that was set forth in Kassouf and that the Court had now joined an “emerging consensus of error in the circuit courts.”  The dissent highlighted that the Supreme Court has become increasingly wary of broad residual criminal statutes and it identified numerous decisions in which the Supreme Court had construed such clauses in a way to narrow their breadth.  Three of the decisions cited by the dissent were decided in the last two years—Yates v. United States, 135 S. Ct. 1074 (2015); Johnson v. United States, 135 S. Ct. 2551 (2015); and McDonnell v. United States, 136 S. Ct. 2355 (2016).

The dissent criticized the panel decision for affording “the sort of capacious, unbounded, and oppressive opportunity for prosecutorial abuse that the Supreme Court has repeatedly curtailed.”  This theme of prosecutorial abuse was repeatedly highlighted throughout the dissent.  Although the panel had assessed whether the omnibus clause was vague or overbroad, Judge Jacobs’s dissent criticized the panel for its determination that any such concerns were allayed by the mens rea requirement that the underlying acts be done “corruptly.”  The dissent wrote that prosecutorial overreach was still a concern because “the line between aggressive tax avoidance and ‘corrupt’ obstruction can be hard to discern” and because prosecutors would have no trouble merely alleging a corrupt motive.  The dissent noted that under the panel decision it would be easy for “an overzealous or partisan prosecutor” to investigate or threaten anybody.  This was a concern for the dissent because “[p]rosecutorial power is not just the power to convict those we are sure have guilty minds; it is also the power to destroy people.”  The dissent faulted the panel for failing to “consider the risk of prosecutorial abuse at all,” instead focusing on a narrow issue of statutory interpretation. 

Seemingly irked by the panel decision’s statement that its construction of the omnibus clause was “consistent” with the Department of Justice’s internal tax division policy, the dissent stated that it would not “defer to the Department of Justice’s views to determine the scope of a criminal statute.”  The dissent concluded by stating that even if the panel had correctly construed the omnibus clause, the case should have been reheard en banc to determine whether the statute was constitutional.  Judge Jacobs closed his dissent by suggesting that absent a limitation to the reach of the statute, a prosecutor could say “Show me the man and I’ll find you the crime.”

Judge Jacobs’s dissent raises a few interesting issues.  It is the second instance in a matter of weeks in which there has been a dissent from an order denying rehearing en banc in the circuit, a relatively rare occurrence.  (See our coverage of the other recent decision here.)  The Circuit is known for conducting few en banc rehearings, compared to some other federal circuit courts.  Although neither case will be reheard en banc, the public airing of the dissents from rehearing suggests that this dim view of en banc rehearing may be changing.  The dissent’s observation that there is a circuit split concerning the interpretation of Section 7212(a) also raises a question as to whether this is a case that might merit review by the Supreme Court.  It appears that the Sixth Circuit’s Kassouf decision is an outlier that has now been rejected by the First, Second, Ninth, and Tenth Circuits.  But as the dissent observed, the Supreme Court has been increasingly concerned about overbroad criminal statutes in recent years, and Judge Jacobs’s opinion may be seen as a signal to the defendant to petition for further review.  Nevertheless, it is less than clear that the Supreme Court would consider this case to be a good vehicle to address any concerns raised by Section 7212(a) about overbreadth and prosecutorial abuse.  As Judge Jacobs’s dissent acknowledges, the majority of the counts of conviction were uncontroversial and affirmed, and so the defendant’s conviction would stand if even if one count were to be reversed on appeal.  Also, neither the panel opinion nor Judge Jacobs’s dissent identify this specific case as an instance of prosecutorial overreach.  Either way, the case raises important questions about the limits of prosecutorial discretion and the question of whether the federal code overcriminalizes conduct that should not be prohibited.

-By Jared Buszin and Harry Sandick