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The business community and criminal defense lawyers have found common ground in efforts to limit prosecutors’ attempts to pierce attorney-client privilege in federal investigations. This week, they successfully joined in urging the Supreme Court to consider subjecting criminal fines to Sixth Amendment scrutiny. The U.S. Chamber of Commerce and the National Association of Criminal Defense Lawyers (NACDL) — not-so-common bedfellows — filed an amicus brief supporting a grant of review in Southern Union Co. v. U.S. The case is potentially a major step in the sentencing revolution begun in 2000 and led by justices Antonin Scalia and John Paul Stevens. The revolution was a reinvigoration of the Sixth Amendment right to a jury trial. In Apprendi v. New Jersey, a 5-4 majority, led by Stevens, held in 2000 that any fact — other than a prior conviction — that increases a defendant’s sentence above the relevant statutory maximum must be submitted to a jury, not a judge, and must be proved beyond a reasonable doubt, not merely by a preponderance of the evidence. After Apprendi, the Court applied its rule in a series of cases to facts subjecting a defendant to the death penalty; facts permitting a sentence in excess of the “standard range” under Washington’s Sentencing Reform Act; facts triggering a sentence range elevation under the then-mandatory Federal Sentencing Guidelines, and aggravating facts under California’s determinate sentencing law. In the Southern Union case, the justices will decide whether the reasoning of Apprendi applies when the sentence is a criminal fine. The stakes for business are obvious. “This is how you sentence corporations,” said Stanford Law’s Jeffrey Fisher, co-chair of the NACDL’s amicus committee. Fisher himself played an integral role in this sentencing revolution as winning counsel in one of the post-Apprendi challenges. In their amicus brief, the Chamber and the NACDL tell the Court: “In white-collar prosecutions in particular, fines represent a significant component of the penalties faced by individuals, including those represented by NACDL’s members. And because a corporation cannot be incarcerated, fines represent the central component of the penalties faced by organizations, like members of the Chamber. The decision below, however, permits the sentencing judge to increase the maximum fine based upon facts found by a mere preponderance of the evidence.” Fisher contends the case is “pretty straightforward if you’re going to give stare decisis effect to Apprendi and its line of cases — unless you’re going to say the Sixth Amendment doesn’t apply to corporations, which would be quite a break with respect to how the Court treats corporations under other amendments.” In Southern Union’s petition, its counsel, Carter Phillips of Sidley Austin, pressing the importance of the issue, noted: “In 2010, 9.3 percent of criminal sentences in the federal courts involved fines. For corporations and other organizational defendants, 77 percent of criminal sentences in the federal courts involved fines. The average fine imposed on an organizational defendant in 2010 was more than $16.3 million, and the largest fine was $1.195 billion (on a pharmaceutical corporation for violations of food and drug laws). In total, federal courts imposed fines on more than 7700 offenders in 2010.” However, the United States countered, “Because the Sixth Amendment permits sentences to be enhanced based on facts the defendant admits in a guilty plea colloquy, the judge-versus-jury question presented here has, at most, limited relevance in guilty-plea cases. Indeed, petitioner emphasizes that most convictions of organizational defendants result in a fine. But the same statistics show that nearly all organizational defendants (93.8 percent) are convicted pursuant to a guilty plea.” A jury found Southern Union guilty of knowingly storing mercury without a permit in violation of the Resource Conservation and Recovery Act. The mercury was stored in a brick building owned by the company and used to store junk. Local youths broke into the building, found the liquid mercury and spilled it in and around the building and their apartment complex. The mercury was tracked into residences at the complex which had to be evacuated for two months while cleanup was done. The federal law imposes a fine for knowing storage of hazardous waste without a permit of “not more than $50,000 for each day of violation.” The government recommended that Southern Union be fined $38.1 million, based on the maximum $50,000-fine for each of the 762 days of violations charged in the indictment. But Southern Union argued that because the jury did not determine the duration of its violation as required by Apprendi, the maximum sentence was the maximum fine for a one-day violation. The trial court agreed with Southern Union that Apprendi applied to criminal fines. However, even though the jury was not asked to determine the number of days that Southern Union was in violation of the law, the court held that the jury had implicitly found the full 762 days from the indictment, jury instructions and the verdict form. The court imposed a $6 million fine and $12 million in community service obligations. The U.S. Court of Appeals for the 1st Circuit disagreed that Apprendi applied to criminal fines but called it a close question, and affirmed the sentence. In rejecting the Apprendi analysis, the appellate court relied on the Supreme Court’s 2009 decision in Oregon v. Ice which held that Oregon’s sentencing scheme, which allowed judges to find facts justifying imposition of consecutive, instead of concurrent, sentences did not violate the Sixth Amendment. Imposing consecutive sentences, according to Ice, historically was not within the jury function. Applying Apprendi, the Court said, would invalidate many other sentencing determinations made by judges including “the imposition of statu¬torily prescribed fines and orders of restitution.” The Ice decision was considered “a bit of a retrenchment” by the Court, said sentencing scholar Douglas Berman of Ohio State University Moritz College of Law. “It was particularly surprising because Justices [Ruth Bader] Ginsburg and Stevens, who had been fans of Apprendi, joined with the anti- Apprendi justices in the majority.” Ice may be considered an outer boundary to Apprendi, but not a rollback, added Stanford’s Fisher. “On other hand, the opinion by Justice Ginsburg does have some language reminiscent of some of the arguments found in the earlier Apprendi-related dissents. Justice Scalia pointed out in his dissent there was some troublesome language in Ice. It’s a classic scenario where the question now is, while the holding isn’t so bad, does the reasoning suggest something more dramatic? That’s what we need now to find out.” The Court has not announced an argument date for the case. Marcia Coyle can be contacted at [email protected].

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