Mark A. Behrens and Virginia Knapp Dorell of the international law firm Shook, Hardy & Bacon, L.L.P., in an article originally published on Corporate LiveWire, outline proposed amendments to the Federal Rules of Civil Procedure released by the Advisory Committee on Civil Rules. These suggested fixes are aimed at curbing litigation costs, especially those related to discovery.
Isaac Gorodetski Archives
Walter Olson, senior fellow at the Cato Institute's Center for Constitutional Studies (and founding editor of PointofLaw), has penned a critical piece on the SEC's new proposed rule to implement a mandate under the Dodd-Frank law that U.S. corporations disclose the ratio between the pay of their chief executive officer and that of their workers.
by Paul J. Larkin, Jr.
Bill Otis, a highly respected former prosecutor and now a law professor, argues that a mistake of law defense would hamper the government's ability to enforce the criminal law. I respect Bill and always value his opinions, but this time he is mistaken.
Bill notes that regulatory crimes are problematic because administrative officials are not directly accountable to the electorate. That is true, but there is an additional and bigger problem: Regulatory offenses oftentimes involve a network of one or more intricately worded statutes and a boatload of hyper-complex regulations. It is easy to understand a law prohibiting a street crime, but far harder to comply with a regulatory offense because the line between lawful and unlawful regulated conduct can be indistinct. No amount of murder is permissible, and no one can obtain a license to steal, but a party can obtain a license to dispose of used oil and other types of waste that are the unavoidable byproduct of legitimate business activities. In fact, administrative laws assume that some regulated conduct is permissible; those laws just limit when, where, how often, and by whom certain it can be done. The problem lies in knowing what can and cannot be done. Is this used oil a "waste"? If so, is it a "hazardous waste"? Or is it a "recyclable material"? Agencies need complex rules, oftentimes requiring considerable scientific or technical knowledge, to regulate industrialization. But those same complex rules can be impossible for the average lawyer--let alone the average person--to understand. A mistake of law defense forces the government clearly to define crimes before someone can be held liable for committing one.
Bill argues that a mistake of law defense would enable crooked defendants, aided by unscrupulous lawyers, to escape responsibility for conduct that any reasonable person would have known was unlawful. The concern with manufactured defenses is legitimate, but overstated. If a government civil inspector notifies someone that his conduct is unlawful, the government can use that notice as proof of guilt if the defendant repeats that conduct. Also, if you place the burden of proof on the defendant, you effectively compel him to testify at trial to establish a mistake-of-law defense. Once he testifies, the prosecution can cross-examine him, and the jury can decide if he is a con artist who connived with a shyster. If the judge finds that a mistake of law defense is incredible--that is, no reasonable person could buy it--the judge need not instruct the jury on it. Finally, if corporate wrongdoing is a concern, a mistake of law defense can be limited to individuals and exclude corporations. In sum, Bill's concern can be met without turning every reasonable mistake of law into a crime.
by William G. Otis
Defenses that on paper look perfectly reasonable can morph into something entirely different in the hands of a creative counselor.
Lack of bad intent is -- as it should be -- a long-accepted defense to criminal charges. We would think grossly unfair a system that provided no such defense. Little did we suspect, however -- until it actually happened -- that garden-variety criminal intent could be flummoxed out the jury's mind by defense counsel's claim that his client ate too many Twinkies. But exactly that happened because of the inventive approach authored by the attorney for Dan White, the San Francisco city supervisor who killed Harvey Milk. White beat the murder wrap, and got punished only for manslaughter, because his lawyer convinced the jury that excess Twinkie consumption had deepened his "depression."
This is not an isolated example. The invention currently in vogue is "urban survival syndrome." This "syndrome" is now used to convince juries that the defendant is a victim, not a bad guy. In the hands of a smooth-talking defense lawyer, more than one jury has been persuaded that the client more nearly resembles a counseling patient than, as it used to be known, a thug.
There is a lesson here as we contemplate expanding the mistake of law defense. In the era of the gargantuan regulatory state, quite properly we want to help defendants who never had a bad heart -- or, worse, may never have known or had reason to know that their conduct was criminal at all. Expanding the mistake of law defense thus has understandable appeal. But like so many modern inventions of the law, there is the danger of unintended consequences. The danger here is that the mistake of law defense will sooner rather than later shed the limitations we build into it, incrementally nibble away at what is left of responsible commercial life, and become the corporate reincarnation of too many Twinkies.
by Paul J. Larkin, Jr.
A millennium ago, the criminal law was simple. If you knew the Decalogue, you knew what not to do: don't murder, steal, or lie. As a result, the law did not exonerate someone who claimed to believe that what he did was not a crime, since no one could reasonably believe that those immoral actions were not also illegal. Today, however, the criminal law has expanded to Brobdingnagian proportions. There are approximately 4,500 federal crimes alone. Atop that, use of administrative agencies to define criminal statutes (or their terms) exacerbates the problem. Congress may use a broadly defined term (e.g., "solid waste") in a statute (e.g., the Resource Conservation and Recovery Act) that delegates to an agency (e.g., the EPA) the power to define its terms (e.g., "hazardous waste") by creating a list of specific examples (e.g., "listed hazardous wastes") or by specifying exemptions (e.g., "recyclable materials"). The result is that there are perhaps 300,000 potentially relevant regulations. No one--no law enforcement officer, no lawyer, no law professor, no judge--could honestly claim to know them all.
A reasonable mistake defense avoids the risk that a morally blameless person could be convicted of conduct that no reasonable person would have known was a crime. Even a child knows the inherent unfairness of being punished for conduct that no one, not even an adult, would reasonably have known was out of bounds. The simplest and most direct remedy, therefore, is to allow a person to prove that he made a mistake and that his mistake was reasonable.
A reasonable mistake defense does not pose the risk that rogues could manipulate it and escape justice. Some conduct is so well known as immoral and illegal that no one reasonably could claim ignorance of the law as an excuse. Murder, manslaughter, rape, mayhem, robbery, burglary, arson, and larceny were crimes at common law and have been outlawed by state and federal criminal codes ever since. Kidnapping, possession of heroin, and the like are modern crimes everyone knows or should know. No one could reasonably claim ignorance that such conduct, or even analogous behavior, is prohibited. A reasonableness requirement would impose a sensible limitation on a Mistake of Law Defense and would go a long way toward eliminating the concern that scallywags will wriggle out of responsibility for conduct that any reasonable person would have known is a crime.
by William G. Otis
The reach of criminal law to enforce the regulatory state poses serious questions. Regulatory crimes tend to be "strict liability" offenses. That is, they do not require that that the defendant be found to have had bad intent in order to convict and punish him.
This is a relatively new and potentially ominous development. The Founders contemplated criminal punishment for, roughly, "bad actors" -- those who do something a person with common sense and ordinary intelligence would intuitively think of as criminal. Generally, criminal behavior up to now has been defined by people who either don't control their temper; want to make a quick buck; or range from extremely non-empathetic to malevolent.
Regulatory crimes are a different kettle of fish. As some recent episodes have shown, regulations "criminalize" behavior based on what the regulator, acting to implement his view of vaguely described legislative intent, sees as forbidden. For the law to accommodate this raises a host of problems. One of them is lack of accountability: The regulator does not face the voters, and is often hidden behind layers of bureaucracy. Another is lack of democratic legitimacy: Regulators simply do not have the mandate conferred by getting elected.
To partly counteract these problems, some have suggested an updated version of the mistake of law defense. Under this version, it would be an affirmative defense if the defendant did not know, and a reasonable person in the defendant's position would not have known, that the defendant's conduct was a crime.
Such a proposal has obvious appeal for the reasons outlined. Yet caution is in order, because the on-the-ground reality will look different. What will happen is that the defendant will preemptively go to his brother-in-law (the one with a law degree) and present some sanitized version of his plan, in order to inveigle the newly-employed "counsel" to say, "Well it might be close to the line, but I guess it's OK."
When the defendant goes to trial -- having swindled his way to millions through some novel, improvised, now-you-see-it-and-now-you-don't "financial product" -- he'll use the mistake of law defense to insist, "I sought legal advice and was told it wasn't any worse than close to the line. I might have made a mistake, but I asked and my lawyer said it was OK."
More generally, once we allow defendants to turn the trial into a contest about the state of their legal knowledge, we have invited a morass. State-of-mind defenses are already out of control; state of legal knowledge defenses will be, if anything, worse. Even to combat the dangers of regulators-run-wild, we should be cautious before we expand them.
The traditional common-law principle of "Ignorantia juris non excusat,"--Latin for "ignorance of the law" does not excuse--prevented a criminal defendant from escaping liability by claiming that he was unaware that his conduct was unlawful. When most crimes were malum in se--meaning inherently wrong according to the generally accepted moral code--the concept of "ignorance is no excuse" went unchallenged. That was all before the phenomenon of overcriminalization, before criminal codes and regulatory provisions were flooded with new criminal offenses, many of which were vague, ambiguous, duplicative and well-beyond the scope of the traditional common-law-based criminal justice system.
Now in the face of a new reality, policy experts and legal scholars have been working on solutions to curb overcriminalization and reign in the unwieldy proliferation of criminal laws. Policy makers have met those efforts with interest; the House of Representatives formed a special task force on the question earlier this year. Among the many proposals being considered to deal with the alarming trend is a reversal of this age-old principle that "ignorance of the law is no excuse." What has been proposed by many advocates is a new "mistake of law" defense which would for the first time allow a criminal defendant to make the case that he did not know that his conduct was against the law and that no reasonable person in his position would know. This drastic departure from the "ignorance of the law" principle has alarmed many experts who, while acknowledging the threat of overcriminalization, worry that a mistake of law defense would create its own host of serious problems.
To advocate in favor of the "mistake of law defense", we're thrilled to welcome Paul Larkin, senior legal research fellow at the Heritage Foundation's Edwin Meese III Center for Legal and Judicial Studies. Before joining Heritage, Larkin held various positions with the federal government in Washington, D.C. At the U.S. Department of Justice from 1984 to 1993, Larkin served as an assistant to the solicitor general and as an attorney in the criminal division's section on organized crime and racketeering. He argued 27 cases before the U.S. Supreme Court. Additionally, Paul authored several legal memoranda which outlined the case for the Mistake of Law Defense generally and also specified the elements of that prospective defense.
Opposite Larkin, we are happy to welcome Georgetown Law adjunct professor William G. Otis, a former chief of the Appellate Division at the US Attorney's Office for the Eastern District of Virginia, counselor to the administrator with the Drug Enforcement Administration and special counsel to President George H. W. Bush.
We hope you will visit back over the ensuing days to see what our distinguished participants have to say, in what promises to be a fascinating discussion.
Follow the featured discussion
The Manhattan Institute's Center for Legal Policy will continue tracking the impact of these alarming criminal-law trends in Ohio and other states in an effort to raise awareness of this grave threat to individual liberty and states' rights.
Erika Harford, clinic assistant director for the Institute of Justice, penned a piece published in the Chicago Sun-Times that pointed to the phenomenon - in Illinois and specifically Chicago - where government in many cases treats its small businesses and entrepreneurs like criminals.
In Illinois a business owner can be charged with a felony for braiding hair or applying nail polish without a license. Unlicensed delivery of letters by bicycle in Chicago's Loop can land a messenger in jail. Chicago's food truck operators are required to install GPS devices, the costly equivalent of electronic ankle bracelets, so that the city can track their whereabouts. The Department of Business Affairs and Consumer Protection's Commissioner has the power to vest any Department employees or inspectors with full police powers, including the right to arrest, to enforce any business licensing provision.
These are only a few examples of how criminal penalties for business-licensing violations have proliferated in laws affecting low- and moderate-income occupations, which are typically set up as small businesses.
Everyone from Gov. Pat Quinn to Mayor Rahm Emanuel recognizes the vital contribution small businesses make to our communities, but it can be easy to underestimate how the layers of red tape can entangle entrepreneurs and make them feel unwelcome. Having these provisions on the books, regardless of how frequently they may be enforced, is a threat hanging over the heads of business owners, especially innovative new businesses with significant job-creating potential. The criminal penalties foster a presumption of guilt and a culture of intimidation in which business owners are afraid to stand up to erroneous or arbitrary applications of the law by regulators or inspectors.
Hello PointofLaw Community,
Firstly, thank you for your readership, support and constructive feedback which has helped turn PointofLaw into the valuable resource it is today. The PoL team strives daily to return the favor by providing unique, insightful and timely commentary on a diverse range of legal topics such as civil justice reform, criminal law and prosecution, corporate governance, financial regulation to name a few. We now have an opportunity to make our legal blog even better for our readers, but we need your help!
The American Bar Association is currently accepting nominations for their annual list of the 100 best legal blogs. We know that a vast majority of our readers are extremely busy, but we ask that you please take a couple of minutes to fill out a very brief nomination form in order to include PoL on that prestigious list for 2013. PoL cannot make the cut without your nominations.
PoL is fortunate to feature numerous legal scholars and intellectuals who have led truly distinguished careers. These top-flight legal minds use our forum to share their knowledge and vast experience with you, our readers, while also contributing to legal scholarship and public discourse. A few of these scholars include:
- Ted Frank, adjunct fellow for the Manhattan Institute's Center for Legal Policy, and Editor-in-Chief of PoL. In addition to these roles, Mr. Frank is the president and founder of the Center for Class Action Fairness; he has written on various issues such as class action reform, litigation reform, medical malpractice, and products liability. Mr. Frank has previously been named by the Wall Street Journal as a "leading tort-reform advocate."
- Richard Epstein, Laurence A. Tisch professor of law at New York University and senior fellow at the Hoover Institution. Mr. Epstein pens regular columns original to PoL on issues involving law and economics, property rights, intellectual property, tort law, constitutional law, communications law, employment law, and health law and policy. He has been named one of the most cited legal professors in the country in a myriad of categories (including taking top honors in the field of law and economics).
- Hester Peirce, senior research fellow at the Mercatus Center at George Mason University. Ms. Peirce's research areas include consumer protection, financial crises and regulation, and financial markets. She has served as senior counsel for Senator Richard Shelby's staff on the Senate Banking, Housing, and Urban Affairs committee; in this capacity, she worked on financial reform following the 2008 crash and oversaw the implementation of the Dodd-Frank Act.
- Jonathan Wilson, attorney in the corporate & business practice group of the Atlanta firm of Taylor English Duma, LLP. Mr. Wilson has experience in corporate securities, corporate finance and governance, M&A and intellectual property law. He is the former general counsel of two NASDAQ companies.
We want to add to that impressive roster, expand our coverage, and diversify our content in order to improve the readers' experience. Additionally, in the past, we have hosted lively debates on our featured discussions and podcasts pages which flesh out multiple perspectives on breaking legal news. We'd like to increase the frequency of those PoL debates and discussions. ABA recognition of PoL as among the top legal blogs has the potential to significantly boost our exposure which can take our content and presentation to the next level and help us meet all of the aforementioned goals.
It is in this spirit that we ask that you please take a few minutes to nominate us for the ABA's top 100 legal blogs. Clicking here will take you to the nominating instructions. As always, we thank you for taking the time to visit PointofLaw.com and hope you will continue to find it a valuable and insightful resource.
Center for Legal Policy at the