United States v. Rybicki - dissent , 354 F.3d 124 ( 2003 )

USA V RYBICKI
00-1043 (L), 00-1044, 00-1052, 00-1055
December 29, 2003
DENNIS JACOBS, Circuit Judge, joined by WALKER, Chief Judge,
CABRANES and PARKER, Circuit Judges, dissenting:
I agree with the majority that the appellants likely
forfeited their vagueness challenge, and that the issue is
one of plain error. The test for plain error is that there
must be (i) error, (ii) that is plain, (iii) that affects
substantial rights, and (iv) that seriously affects the
fairness, integrity, or public reputation of judicial
proceedings. This standard is satisfied here, applying the
analysis we employed in United States v. Thomas, 274 F.3d
655, 667 (2d Cir. 2001) (in banc). Certainly, conviction
under a statute that is unconstitutionally vague on its face
is an error of constitutional magnitude. See United States
v. Handakas, 286 F.3d 92, 111-12 (2d Cir.), cert. denied,
537 U.S. 894 (2002). Reaching the merits, I respectfully
dissent because in my view the so-called “honest services”
amendment to the wire and mail fraud statute, 18 U.S.C. §
1346, flunks the test for facial vagueness set forth by the
Supreme Court in City of Chicago v. Morales, 527 U.S. 41(1999).
1
I
The test for facial invalidity of a criminal statute
was articulated by the Supreme Court in 1999: “Vagueness
may invalidate a criminal law for either of two independent
reasons. First, it may fail to provide the kind of notice
that will enable ordinary people to understand what conduct
it prohibits; second, it may authorize and even encourage
arbitrary and discriminatory enforcement.” Id. at 56(Stevens, J., writing for the Court, joined by Ginsburg and
Souter, JJ.); accord id. at 64-65 (O’Connor, J., concurring
in part and concurring in the judgment, joined by Breyer,
J.); see also Kolender v. Lawson, 461 U.S. 352, 357 (1983).
The majority opinion states that the governing standard
for facial challenges outside of the First Amendment context
is to be drawn from United States v. Salerno, 481 U.S. 739(1987), which states in dicta that a statute is facially
invalid only if there is “no set of circumstances” in which
it would be valid. Id. at 745. The majority’s expressed
preference for the 1987 Salerno dicta over the 1999 Morales
holding is itself a bit of dicta because the majority holds
2
that the statute in question survives scrutiny under either
test. [Maj. Op. at 40] Although I believe that section
1346 is so vague that there is “no set of circumstances” in
which it is clear enough to be applicable, I think that the
test does matter, chiefly to assure a sound analysis of
constitutional sufficiency. I therefore undertake to
demonstrate that the governing test is the one set forth in
Morales.
At most, four Justices in Morales invoked the Salerno
test for facial vagueness or words suggestive of that
standard. See Morales, 527 U.S. at 77-81 & nn.1-3 (Scalia,
J., dissenting); id. at 111-12, 114 (Thomas, J., dissenting,
joined by Rehnquist, C.J., and Scalia, J.); id. at 71(Breyer, J., concurring in part and concurring in the
judgment) (“The ordinance is unconstitutional . . . because
the policeman enjoys too much discretion in every case. And
if every application of the ordinance represents an exercise
of unlimited discretion, then the ordinance is invalid in
all its applications.”). In any event, Morales did not
implement the Salerno dicta. See id. at 81 (Scalia, J.,
dissenting) (“Instead of requiring respondents, who are
challenging the ordinance, to show that it is invalid in all
3
its applications, [the Justices in the majority] have
required [the government] to show that it is valid in all
its applications.”).
It is true, of course, that several other propositions
discussed in Morales only attracted a plurality. As the
majority opinion notes, a three-Justice plurality of the
Morales court would apparently allow challenges for facial
vagueness outside of the First Amendment context to criminal
laws that both lack a mens rea requirement and infringe on
constitutional rights. See id. at 55 (Stevens, J., writing
for the Court, joined by Ginsburg and Souter, JJ.); [Maj.
Op. at 13] However, only those same three Justices believed
that the ordinance challenged in Morales implicated such a
constitutional right and lacked a specific intent
requirement. Compare id. at 55 (Stevens, J., writing for
the Court, joined by Ginsburg and Souter, JJ.) (“[The
challenged statute] is a criminal law that contains no mens
rea requirement and infringes on constitutionally protected
rights.”) (internal citations omitted), with id. at 66(O’Connor, J., concurring in part and concurring in the
judgment, joined by Breyer, J.) (“To be sure, there is no
violation of the ordinance unless a person fails to obey
4
promptly the order to disperse. But, a police officer
cannot issue a dispersal order until he decides that a
person is remaining in one place ‘with no apparent purpose’
and the ordinance provides no guidance to the officer on how
to make this antecedent decision.”) and id. at 69 (Kennedy,
J., concurring in part and concurring in the judgment)
(noting that the ordinance “reach[ed] a broad range of
innocent conduct” and stating that “[t]he predicate of an
order to disperse is not, in my view, sufficient to
eliminate doubts regarding the adequacy of notice under this
ordinance.”). Thus, three of the six Justices supporting
the result in Morales (Justices O’Connor, Kennedy, and
Breyer) applied the Morales test outside the First Amendment
context without regard to whether the statute had an intent
requirement or infringed on a constitutional right.
Certainly, none of these propositions nor the invocation of
the Salerno standard--each attracting only a plurality in
Morales--constitutes Supreme Court precedent.
The only proposition attracting a majority in Morales
was that a criminal statute that “reach[es] a substantial
amount of innocent conduct” and thereby fails to “establish
minimal guidelines to govern law enforcement” is, on its
5
face, unconstitutionally vague. Id. at 60-61 (Stevens, J.,
writing for the Court in part V, joined by Ginsburg and
Souter, JJ.), id. at 69 (Kennedy, J., joining in part V,
concurring in part and concurring in the judgment); see also
id. at 64-65 (O’Connor, J., concurring in part and
concurring in the judgment, joined by Breyer, J.).
We are therefore required to apply Morales here.
Although the majority holds that section 1346 withstands
either test, it is quite clear that the statute imposes
insufficient constraint on prosecutors, gives insufficient
guidance to judges, and affords insufficient notice to
defendants. That insufficiency can be illustrated by
reference to the cases cited in the majority opinion. As to
prosecutors, the majority does not disturb the holding that
overturned the conviction in Handakas, 286 F.3d at 96, of a
contractor who falsely promised to abide by New York’s wage
laws, on the ground that the “honest services” amendment was
vague as applied. The majority opinion thus confirms that
the prosecution in Handakas was misguided, or (in my view)
that prosecutorial discretion was unguided altogether
because the statute insufficiently describes the offense.
The majority opinion similarly demonstrates that judges
6
cannot understand what conduct this statute criminalizes.
The majority holds that case law predating McNally v. United
States, 483 U.S. 350 (1987), is relevant to determining the
meaning of section 1346 and thus rejects the contrary rule
announced in United States v. Sancho, 157 F.3d 918, 922 (2d
Cir. 1998) (per curiam); the majority holds that reasonable
foreseeability of non-de minimis economic or pecuniary harm
is not a necessary element of the crime and thus rejects the
panel’s contrary holding in United States v. Rybicki, 287
F.3d 257, 265-66 (2d Cir. 2002); and the majority rejects
the view expressed in Handakas that the statute is facially
vague (though that panel was constrained by Circuit
precedent from so holding). 286 F.3d at 104-06. In short,
if the statute means what the majority says it means, eight
judges in this Circuit failed to understand it in Sancho,
Handakas, and Rybicki. Of course, overturned convictions
and in banc rejection of panel rulings do not prove facial
vagueness. But this Circuit’s long experience with section
1346 is nevertheless telling evidence that most lawyers and
judges, not to speak of ordinary laymen or prospective
defendants, cannot be expected to understand the statute.
II
7
The first question that bears on the vagueness inquiry
is whether “a penal statute define[s] the criminal offense
with sufficient definiteness that ordinary people can
understand what conduct is prohibited.” Kolender, 461 U.S.
at 357. “The plain meaning of ‘honest services’ in the text
of § 1346 simply provides no clue to the public or the
courts as to what conduct is prohibited under the statute.”
Handakas, 286 F.3d at 104. The majority opinion is a
prolonged and sustained search for some prior settled
meaning for an opaque statutory phrase--“the intangible
right of honest services”--so that it can be construed as a
term of art. That effort to infuse the putative term of art
with meaning is conducted in a painstaking way, and
considers an abundant variety of alternative meanings.
However, a term of art has one single and apparent meaning,
in the same way that a pun has two; it is as odd to conduct
a scholarly search for the meaning of a term of art as it
would be to hear a pun, conduct research in semantics,
etymology and philology for a month, and then laugh.
It may be (as the majority holds) that, in enacting
section 1346, Congress intended to reinstate a body of case
law that had been overruled by the Supreme Court in McNally.
8
See Handakas, 286 F.3d at 103, 104-05 (citing legislative
history). But that insight gets us nowhere in terms of
limits on prosecutorial power and notice to the public:
The requirement imposed by the Supreme Court [in
McNally] to speak more clearly was not for the
benefit of the Circuit Courts which had, in fact,
given birth to these concepts in the first place.
Rather, the requirement . . . was for the benefit
of the public, the average citizen, . . . who must
be forewarned and given notice that certain
conduct may subject him to federal prosecution.
United States v. Brumley, 116 F.3d 728, 745-46 (5th Cir.
1997) (in banc) (Jolly, J., dissenting) (emphasis added). A
statute is unconstitutionally vague unless it provides a
“person of ordinary intelligence a reasonable opportunity to
know what is prohibited.” United States v. Strauss, 999
F.2d 692, 697 (2d Cir. 1993) (internal quotation marks
omitted). We have held that notice is insufficient if lay
persons are required to “perform[] the lawyer-like task of
statutory interpretation by reconciling the text of []
separate documents.” Chatin v. Coombe, 186 F.3d 82, 89 (2d
Cir. 1999) (invalidating a prison administrative prohibition
as unconstitutionally vague as applied). Construing a
statute (as the majority does here) to say that scores of
overruled cases are hereby revived, requires lay persons to
9
do lawyer-like tasks that few lawyers would have the skills
to perform:
[N]o one can know what is forbidden by § 1346
without undertaking the “lawyer-like task” of
answering the following questions: [1] Can pre-
McNally case law be consulted to illuminate the
wording of § 1346? [2] Can any meaning be drawn
from the case law, either the uneven pre-McNally
cases or the few cases decided post-§ 1346? [3] Is
one to be guided only by case law within one’s own
circuit, or by the law of the circuits taken
together (if that is possible)?
Handakas, 286 F.3d at 105.
It is remarkable how little the majority’s search for
meaning has turned up. The term of art for which meaning is
sought is essentially the entire mouthful of the statute:
“scheme or artifice to deprive another of the intangible
right of honest services.” Before McNally, this phrase
encompassed four “categories” of honest-services cases:
[1] government officials who defraud the public of
their own honest services; [2] elected officials and
campaign workers who falsify votes and thereby defraud
the electorate of the right to an honest election; [3]
private actors who abuse fiduciary duties by, for
example, taking bribes; and [4] private actors who
defraud others of certain intangible rights, such as
privacy.
Id. at 101-02 (citing McNally, 483 U.S. at 362-64 nn.1-4).
Yet the majority’s search for meaning bears upon no more
than one subgroup of the four categories of honest-services
10
cases.
Following an exhaustive, scholarly analysis, my
colleagues conclude that one of these four categories of
conduct criminalized by pre-McNally case law--the theft of
privacy rights--cannot be revived as a criminal offense,
presumably because the statute would be unconstitutionally
vague under Salerno as well as Morales if so applied. [Maj.
Op. at 28-29 n.13] Contra United States v. Condolon, 600
F.2d 7, 8-9 (4th Cir. 1979); United States v. Louderman, 576
F.2d 1383, 1387-88 (9th Cir. 1978). They also limit their
search for meaning to cases of “honest services” fraud in
the private sector. No attempt is made (advisedly) to
describe the prohibition, if any, in the two remaining
categories of public sector “honest services” fraud
criminalized in the pre-McNally case law; any “well-settled
meaning” relating to these remaining categories will
presumably be supplied--or looked for--later.
The majority intuits a statutory meaning that is
insufficient even to describe the subgroup of private sector
cases. Where kickbacks or bribery are involved, the
majority holds that a “scheme or artifice to deprive another
of the intangible right of honest services” means:
11
a scheme or artifice to use the mails or wires to
enable an officer or employee of a private entity
(or a person in a relationship that gives rise to
a duty of loyalty comparable to that owed by
employees to employers) purporting to act for and
in the interests of his or her employer (or of the
other person to whom the duty of loyalty is owed)
secretly to act in his or her or the defendant’s
own interests instead, accompanied by a material
misrepresentation made or omission of information
disclosed to the employer or other person.
[Maj. Op. at 35-36.] However, in cases of self-dealing,
there “may” be an additional requirement that the alleged
conduct “caused, or at least was capable of causing, some
detriment” to the employer. [Maj. Op. at 38] (emphasis
added). The tentativeness of the majority’s approach is
well justified: a number of pre-McNally cases hold that
there is no such requirement of economic detriment. See,
e.g., United States v. Bronston, 658 F.2d 920, 927 (2d Cir.
1981) (upholding mail fraud conviction against a law firm
partner paid for representing a client in contract
negotiation despite firm representing competing bidder); see
also Rybicki, 287 F.3d at 262 (“[I]t was well-settled law
both before and after McNally that the government does not
have to establish that a scheme to defraud was successful or
resulted in any actual [economic] harm to the victim.”).
[Maj. Op. at 36 n. 18.] The majority deems such cases
12
“atypical,” however. They may be atypical; but even
assuming that a term of art can be distilled from the body
of case law that was overruled in McNally, surely no
unambiguous meaning can be assigned to a phrase that has no
meaning except what can be distilled from some pre-McNally
cases provided that other pre-McNally cases are ignored,
particularly since the designation of overruled cases that
are in and those that are out is itself essentially
arbitrary. Ordinary people cannot be expected to undertake
such an analysis; rare is the lawyer who could do it; and no
two lawyers could be expected to agree independently on the
elements of an offense that must be defined by such a
project.
The majority claims that any ambiguity is of no concern
here because defendants’ conduct falls “squarely within the
meaning of ‘scheme or artifice to deprive another of the
intangible right of honest services’ as distilled from the
pre-McNally private sector cases.” [Maj. Op. at 38.] But
this argument is no answer to a facial challenge for
vagueness. The only relevant question is whether “ordinary
people can understand what conduct is prohibited.”
Kolender, 461 U.S. at 357.
13
It is only too obvious that there is no settled meaning
to the phrase “the intangible right of honest services” that
is capable of providing constitutionally adequate notice.
If there were, the judges and prosecutors in this Circuit
would certainly know it. Yet, the majority overrules the
holding (erroneously characterized as dicta) in Sancho, 157
F.3d at 922, that pre-McNally case law is irrelevant to
determining the meaning of section 1346--i.e., that “the
intangible right of honest services” lacks a well settled
meaning. The majority also concludes that the panel opinion
in this case was wrongly decided insofar as it held that one
element of a section 1346 offense is that a loss of money or
property be reasonably foreseeable. See Rybicki, 287 F.3d
at 265-66. Finally, the majority preserves the holding of
Handakas, 286 F.3d at 96, which means that the prosecutors
in the Eastern District of New York did not understand what
the statute meant. How can the public be expected to know
what the statute means when the judges and prosecutors
themselves do not know, or must make it up as they go along?
III
The second question that bears on facial vagueness is
14
whether the “legislature [has] establish[ed] minimal
guidelines to govern law enforcement.” Kolender, 461 U.S.
at 358. This second inquiry is “the more important” of the
two, and is alone sufficient to decide constitutional
infirmity. Id. at 358, 361 & n.10. The governing test is
whether the statute “permit[s] ‘a standardless sweep [that]
allows policemen, prosecutors, and juries to pursue their
personal predilections.’” Id. at 358 (second alteration in
original). “An enactment fails to provide sufficiently
explicit standards for those who apply it when it
impermissibly delegates basic policy matters to policemen,
judges and juries for resolution on an ad hoc and subjective
basis.” Handakas, 286 F.3d at 107 (internal quotation marks
and citations omitted). Thus, a statute is facially vague
if it “necessarily entrusts lawmaking to the moment-to-
moment judgment” of law enforcement. Morales, 527 U.S. at
60 (Stevens, J., writing for the majority) (internal
quotation marks omitted).
The majority opinion affirms the result in Handakas,
which means (as I pointed out earlier) that the prosecutors
in the Eastern District of New York did not understand what
the statute meant. Moreover, the meaning supplied by the
15
majority to uphold this use of section 1346 is as elusive as
the statute itself. According to the majority, the “honest
services” offense is a misrepresentation or omission that
(i) is made by a private person who secretly acts in self-
interest while purporting to act in the interests of the
employer and (ii) is capable of leading a reasonable
employer to change its conduct (i.e., it is “material”).
[Maj. Op. at 37-38] Neither requirement limits
prosecutorial discretion.
No limit is placed on the exercise of prosecutorial
discretion by requiring a showing that an employee secretly
prefers her own interest to the interest of the employer; it
is naive to assume that this preference is not the most
common premise of private employment. “[R]elationships in
the private sector generally rest upon concerns and
expectations less ethereal and more economic than abstract
satisfaction of receiving ‘honest services’ for their own
sake.” United States v. Frost, 125 F.3d 346, 365 (6th Cir.
1997). Every salaried employee can be said to work for her
own interest while purporting to act in the interests of the
employer. Yet the majority opinion effectively makes
“dishonesty by an employee, standing alone, [] a crime.”
16
Id. at 368.
Nor is prosecutorial discretion limited by the
“materiality” requirement See United States v. Sun-Diamond
Growers, 138 F.3d 961, 973 (D.C. Cir. 1998) (“Every material
act of dishonesty by an employee deprives the employer of
that worker’s ‘honest services,’ yet not every such act is
converted into a federal crime by the mere use of the mails
or interstate phone system.”); Frost, 125 F.3d at 365 (in
rejecting the materiality test: “[I]f a ‘change in business
conduct’ occurs under the materiality standard when a
business alters its behavior merely to avoid the appearance
of impropriety . . . , the intangible right to honest
services doctrine may lack substantive limits in the private
sector.”) (emphasis in original).
The majority codifies a doctrine that is as
standardless as the statute itself. Nothing in the majority
opinion prevents criminalization of any of the following
conduct: a regulated company that employs a political
spouse; an employee who violates an employee code of
conduct; a lawyer who provides sky-box tickets to a client’s
general counsel; a trustee who makes a self-dealing
investment that pays off; or an officeholder who has made a
17
decision in order to please a constituent or contributor, or
to promote re-election, rather than for the public good (as
some prosecutor may see the public good).
The majority is unconcerned with the standardless
sweep of the statute because supposedly there is “a wide
swath of behavior” for which the prohibitions of section
1346 are “clear.” [Maj. Op. at 40] This statement turns
upside down the Morales test for facial vagueness: whether
a statute reaches a wide swath of behavior that no one (yet)
deems criminal and fails to provide minimal guidance to law
enforcement. See Morales, 527 U.S. at 60 (Stevens, J.,
writing for the majority). “‘It would certainly be
dangerous if the legislature could set a net large enough to
catch all possible offenders, and leave it to the courts to
step inside and say who could be rightfully detained, and
who should be set at large.’” Kolender, 461 U.S. at 358 n.7
(quoting United States v. Reese, 92 U.S. 214, 221 (1875)).
I share the confidence implicit in the majority opinion that
prosecutors in this Circuit and the Attorney General under
whom they serve can be trusted to avoid any systematic abuse
of such a statute; but we should construe this statute so
that it serves to bind those who nevertheless may need
18
constraint. 1
IV
The majority opinion’s search for a meaning of art
leans heavily on the overruled pre-McNally case law of other
circuits. But “[e]ven the circuits that have reinstated
pre-McNally law recognize that ad hoc parameters are needed
to give the statute shape.” Handakas, 286 F.3d at 109(collecting cases). Although a number of circuits have
upheld section 1346 against a claim of facial vagueness,
there is now wide disagreement among the circuits as to the
elements of the “honest services” offense. These opinions,
1
The majority ultimately relies on the reductionist
argument that these defendants must have known that it would
be illegal “to use the wires and the mails . . . to pay off
insurance adjustors.” [Maj. Op. at 37] The natural drift
of this observation is that the scheme inflated the
settlement of claims to the benefit of the defendants’
clients and to the detriment of the insurance companies.
However, the government never contended that this occurred.
As the majority opinion recites, “the government
acknowledged that it would not seek to prove that the amount
of any of the settlements connected with a payment to an
adjuster had been inflated above what would have been a
reasonable range for that settlement.” [Maj. Op. at 6]
There was certainly no reason for these defendants to
believe that the gratuities at issue--which the government
never contended caused a loss--amounted to a federal mail or
wire fraud violation.
19
taken together, refute rather than support the idea that
section 1346 has any settled or ascertainable meaning or
that the offense it describes has known contours:
• What mens rea must be proved by the
government? The majority follows Second
Circuit precedent in holding that an intent to
cause economic harm is not required--a
defendant need only have intended to deprive
another of the “intangible right of honest
services.” [Maj. Op. at 43] However, in the
Seventh Circuit, an intent to achieve personal
gain is an element of the offense. See United
States v. Bloom, 149 F.3d 649, 656-57 (7th
Cir. 1998). But see United States v. Welch,
327 F.3d 1081, 1106-07 (10th Cir. 2003)
(holding that the text and structure of the
mail fraud statutes do not support “adding an
element” to “honest services” fraud requiring
that defendant seek to obtain a personal
benefit). The Eight Circuit describes the
mens rea element as “caus[ing] or intend[ing]
to cause actual harm or injury, and in most
20
business contexts, that means financial or
economic harm.” See United States v.
Pennington, 168 F.3d 1060, 1065 (8th Cir.
1999). One circuit has held that, to secure
an honest services conviction, “[t]he
prosecution must prove that the employee
intended to breach a fiduciary duty.” Frost,
125 F.3d at 368. Other circuits merely
require a showing of “fraudulent intent.” See
United States v. Cochran, 109 F.3d 660, 667
(10th Cir. 1997); United States v. Jain, 93
F.3d 436, 442 (8th Cir. 1996).
• Must the defendant have caused actual tangible
harm? Compare Jain, 93 F.3d at 442 (“When
there is no tangible harm to the victim of a
private scheme, it is hard to discern what
intangible ‘rights’ have been violated.”),
with Frost, 125 F.3d at 369 (“[A] defendant
accused of scheming to deprive another of
honest services does not have to intend to
inflict an economic harm upon the victim.”).
Some circuits have required that the
21
misrepresentation be material, i.e., that the
employee have reason to believe that the
information would lead a reasonable employer
to change its business conduct. See Cochran,
109 F.3d at 667 & n.3; United States v. Gray,
96 F.3d 769, 775 (5th Cir. 1996); Jain, 93
F.3d at 442. Other circuits only require a
showing that it was reasonably foreseeable for
the victim to suffer economic harm. Frost,
125 F.3d at 368; Sun-Diamond Growers, 138 F.3d
at 973-74. We adopted this last requirement
in the Rybicki panel opinion, and now abandon
it. See Rybicki, 287 F.3d at 265.
• What is the duty that must be breached to
violate section 1346? The majority holds that
it is the duty owed by an employee to an
employer, or by “a person in a relationship
that gives rise to a duty of loyalty
comparable to that owed by employees to
employers” (whatever that means). [Maj Op. at
34-35] Some circuits only allow prosecutions
for breach of an employee’s duty to an
22
employer. See, e.g., Brumley, 116 F.3d at
735. Other circuits require the breach of a
fiduciary duty. See Frost, 125 F.3d at 366,
368; Sun-Diamond Growers, 138 F.3d at 974.
• Is the source of that duty state or federal
law? The majority does not say, and other
circuits are split. Compare Frost, 125 F.3d
at 366 (“Federal law governs the existence of
fiduciary duty under the mail fraud statute.”
(emphasis added)), with Brumley, 116 F.3d at
735 (“We have held that services under § 1346
are those an employee must provide the
employer under state law.” (emphasis added)).
• Did section 1346 revive pre-McNally case law;
if so must each circuit look to its own
governing precedent or to some set of rules
distilled from the whole body of pre-McNally
cases? See Brumley, 116 F.3d at 733-34(looking to “plain language” of a statute to
discern its “meaning” because “before McNally
the doctrine of honest services was not a
unified set of rules [a]nd Congress could not
23
have intended to bless each and every pre-
McNally lower court ‘honest services’
opinion”); Frost, 125 F.3d at 364, 365(holding that “§ 1346 has restored the mail
fraud statute to its pre-McNally scope,
according to previous opinions interpreting
the intangible right to honest services” and
looking to “Sixth Circuit precedent issued
before McNally in order to discover the
precise contours of the right in this
circuit”). In Sancho, we held that pre-
McNally cases could not be considered in
determining the meaning of the statute. See
157 F.3d at 921-22. We now overrule Sancho
and adopt an approach divining statutory
meaning by analyzing cases overruled by
McNally as a whole.
In sum, the circuits are fractured on the basic issues:
(1) the requisite mens rea to commit the crime, (2) whether
the defendant must cause actual tangible harm, (3) the duty
that must be breached, (4) the source of that duty, and (5)
which body of law informs us of the statute’s meaning. This
24
lack of coherence has created “a truly extraordinary
statute, in which the substantive force of the statute
varie[s] in each judicial circuit.” Brumley, 116 F.3d at743 n.7 (Jolly, J., dissenting).
V
As the foregoing section documents, the vagueness of
the statute has induced court after court to undertake a
rescue operation by fashioning something that (if enacted)
would withstand a vagueness challenge. The felt need to do
that attests to the constitutional weakness of section 1346
as written. And the result of all these efforts--which has
been to create different prohibitions and offenses in
different circuits--confirms that the weakness is fatal.
Judicial invention cannot save a statute from
unconstitutional vagueness; courts should not try to fill
out a statute that makes it an offense to “intentionally
cause harm to another,” or to “stray from the straight and
narrow,” or to fail to render “honest services.”
“[L]egislatures and not courts should define criminal
activity.” United States v. Bass, 404 U.S. 336, 348 (1971);
see also Handakas, 286 F.3d at 101 (punishment for
25
“constructive offenses” violates the Due Process Clauses of
the Fifth and Fourteenth Amendments, which “require the
legislature to specify the elements of criminal offenses”);
Bloom, 149 F.3d at 654 (describing “a federal common-law
crime” as “a beastie that many decisions say cannot exist”).
As the splintering among the circuits demonstrates, section
1346 effectively imposes upon courts a role they cannot
perform. When courts undertake to engage in legislative
drafting, the process takes decades and the work is
performed by unelected officials without the requisite
skills or expertise; and as the statutory meaning is
invented and accreted, prosecutors are unconstrained and
people go to jail for inchoate offenses.
The majority complacently cites by analogy similarly
vague words in the Sherman Act that make unlawful any
“restraint of trade.” [Maj. Op. at 27] The Sherman Act
predates Morales by a century. Moreover, the comparison
proves too much. Courts construe the Sherman Act primarily
as a civil and regulatory statute, and criminal Sherman Act
prosecutions have long been limited essentially to price-
fixing. In keeping with its exceptional history, courts
have broadly construed the Sherman Act as “a charter of
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freedom” akin to constitutional provisions. See, e.g.,
United States v. U.S. Gypsum Co., 438 U.S. 422, 439 (1978)
(“Simply put, the Act has not been interpreted as if it were
primarily a criminal statute; it has been construed to have
a ‘generality and adaptability comparable to that found to
be desirable in constitutional provisions.’”) (citation
omitted)); 2 Phillip E. Areeda, Herbert Hovenkamp & Roger D.
Blair, Antitrust Law § 303b4, at 33 (2d ed. 2000) (“Because
they were usually dealing with civil proceedings, the courts
have implicitly understood the Sherman Act as a mandate to
develop a common law of antitrust--as indeed it would have
to be in order to fulfill its purpose as a ‘charter of
freedom.’”). The analogy to antitrust law is valid only
insofar as section 1346 is an invitation by Congress for
courts to develop a common law of criminal punishment.
Finally, “[t]he absence of discernible standards in the
‘honest services’ doctrine implicates principles of
federalism.” Handakas, 286 F.3d at 110. The majority
opinion in effect criminalizes all material acts of
dishonesty by employees or by persons who owe analogous
duties. While the majority opinion concerns itself only
with private sector “honest services” fraud, there seems to
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be no principled basis in the statute’s wording or in
(overruled) cases for excluding from section 1346's reach
services rendered in the public sector. Thus, without any
obvious limiting principles, the majority opinion invites
federal prosecutors to police honesty in the corridors of
state government by invoking section 1346 against state
employees for their acts of “honest services” fraud. This
construction of section 1346 undoubtedly “leaves its outer
boundaries ambiguous and involves the Federal Government in
setting standards of disclosure and good government for
local and state officials.” McNally, 483 U.S. at 360.
I believe that Congress has not heeded the Supreme
Court’s admonition to “speak more clearly than it has.” See
id. We should not “approve a sweeping expansion of federal
criminal jurisdiction in the absence of a clear statement by
Congress.” Cleveland v. United States, 531 U.S. 12, 24
(2000).
The majority opinion exhibits deference to Congress by
conscientiously seeking to understand congressional intent,
and the effort and product are scholarly and scrupulous.
But the work accomplished by the majority opinion, which is
admirable in its way, is properly the work of legislators in
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statutory drafting and the work of the executive in framing
prosecutorial standards. “If the words of a criminal
statute insufficiently define the offense, it is no part of
deference to Congress for us to intuit or invent the crime.”
Handakas, 286 F.3d at 109-10. I respectfully dissent.
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