In the Courts

Southern Union argued that the verdict form was imprecise and that the court's instructions allowed a conviction even if the jury only found a single, one-day violation. It claimed that Apprendi applied to the imposition of a criminal fine and that, therefore, a $50,000 fine was the maximum punishment allowed. Id.

The District Court held that Apprendi applies to the imposition of a criminal fine, but it concluded that the “content and context of the verdict all together” indicated that the jury in fact found a 762-day violation. Id. It imposed a maximum potential fine of $38.1 million and an actual fine of $6 million plus a community service obligation of $12 million. The Court of Appeals affirmed the sentence, but on
different grounds. It held that the jury had not necessarily found a 762-day violation, and that Apprendi did not apply to the imposition of criminal fines. Other circuits had found that Apprendi applies to the imposition of criminal fines. See, e.g., United States v. Pfaff, 619 F. 3d 172 (2d Cir. 2010) (per curiam).

The Supreme Court has applied the Apprendi rule in cases involving imprisonment or a death sentence, and stated here that “we see no principled basis under Apprendi for treating criminal fines differently.” Id. at 2350. This was in part because “the amount of a fine, like the maximum term of imprisonment or eligibility for the death penalty, is often calculated by reference to particular facts.” Id. Apprendi, the Court wrote, prohibits “judicial factfinding that increases maximum criminal sentences, penalties, or punishments ' terms that each undeniably embrace fines.” Id. at 2351 (citations, brackets and internal quotation marks omitted). Thus, the Court held that there was no difference between sentencing factors (such as those that would increase a criminal fine) and elements of an offense, for purposes of fact-finding. Id. at 2356.

The decision is likely to affect the manner in which the government charges and tries corporate defendants, prompting more detailed indictments and requiring prosecutors to spend more time proving those facts at trial.

Below-Guidelines Sentence for Big Dig Offenders

On July 13, 2012, the the U.S. Court of Appeals for the First Circuit affirmed a sentence of six months of home monitoring, three years' probation, 1,000 hours of community service, and fines for two former contractors convicted of mail fraud, highway project fraud, and conspiracy to defraud the government in relation to Boston's “Big Dig” Project. United States v. Prosperi, 2012 WL 2866243 (1st Cir.). This sentence is substantially below the United States Sentencing Guidelines (USSG) range of 87 to 108 months' imprisonment for these offenses. The two former employees of Aggregate Industries NE, Inc., Robert Prosperi and Gregory Stevenson, were found guilty of providing concrete that could cause safety issues and did not meet project specifications. Id. at *3. The government appealed the sentences and argued that they were substantively unreasonable under Gall v. United States, 552 U.S. 38 (2007), but the First Circuit held that it was proper for the district court to consider as a mitigating factor that the defendant's intent in orchestrating the scheme was not to harm the government project or to enrich themselves but only to help their company succeed. Id. at *33.

Business Crimes Hotline and In the Courts were written by Kirkland & Ellis, LLP, Summer Associate Steven Hagenbuch.

Supreme Court Extends Apprendi Requirement

On June 21, 2012, the Supreme Court resolved a circuit split, holding that Apprendi v. New Jersey , 530 U.S. 466 (2000), applies to the imposition of criminal fines for non-petty offenses. Southern Union Co. v. United States, 567 U.S. ____, 132 S. Ct. 2344 (2012). Apprendi required juries to determine any fact, other than the fact of a prior conviction, which increases a criminal defendant's maximum potential sentence beyond that authorized for a particular crime, but there has been a circuit split as to whether that extended to facts that increase a potential criminal fine. The Southern Union decision, written by Justice Sotomayor, was joined by Chief Justice Roberts and Justices Scalia, Thomas, Ginsburg and Kagan. Justice Breyer wrote a dissenting opinion, joined by Justices Kennedy and Alito.

A jury had convicted Southern Union of violating the Resource Conservation and Recovery Act of 1976, 42 U.S.C. ' 6928(d)(2)(A), which is punishable by a fine of not more than $50,000 for each day of violation. The verdict form stated that Southern Union unlawfully stored liquid mercury “on or about September 19, 2002 to October 19, 2004.” Id. at 2349. The Probation Office calculated the maximum fine as $38.1 million based on the 762-day period listed on the jury form.

Southern Union argued that the verdict form was imprecise and that the court's instructions allowed a conviction even if the jury only found a single, one-day violation. It claimed that Apprendi applied to the imposition of a criminal fine and that, therefore, a $50,000 fine was the maximum punishment allowed. Id.

The District Court held that Apprendi applies to the imposition of a criminal fine, but it concluded that the “content and context of the verdict all together” indicated that the jury in fact found a 762-day violation. Id. It imposed a maximum potential fine of $38.1 million and an actual fine of $6 million plus a community service obligation of $12 million. The Court of Appeals affirmed the sentence, but on
different grounds. It held that the jury had not necessarily found a 762-day violation, and that Apprendi did not apply to the imposition of criminal fines. Other circuits had found that Apprendi applies to the imposition of criminal fines. See, e.g., United States v. Pfaff , 619 F. 3d 172 (2d Cir. 2010) (per curiam).

The Supreme Court has applied the Apprendi rule in cases involving imprisonment or a death sentence, and stated here that “we see no principled basis under Apprendi for treating criminal fines differently.” Id. at 2350. This was in part because “the amount of a fine, like the maximum term of imprisonment or eligibility for the death penalty, is often calculated by reference to particular facts.” Id. Apprendi, the Court wrote, prohibits “judicial factfinding that increases maximum criminal sentences, penalties, or punishments ' terms that each undeniably embrace fines.” Id. at 2351 (citations, brackets and internal quotation marks omitted). Thus, the Court held that there was no difference between sentencing factors (such as those that would increase a criminal fine) and elements of an offense, for purposes of fact-finding. Id. at 2356.

The decision is likely to affect the manner in which the government charges and tries corporate defendants, prompting more detailed indictments and requiring prosecutors to spend more time proving those facts at trial.

Below-Guidelines Sentence for Big Dig Offenders

On July 13, 2012, the the U.S. Court of Appeals for the First Circuit affirmed a sentence of six months of home monitoring, three years' probation, 1,000 hours of community service, and fines for two former contractors convicted of mail fraud, highway project fraud, and conspiracy to defraud the government in relation to Boston's “Big Dig” Project. United States v. Prosperi, 2012 WL 2866243 (1st Cir.). This sentence is substantially below the United States Sentencing Guidelines (USSG) range of 87 to 108 months' imprisonment for these offenses. The two former employees of Aggregate Industries NE, Inc., Robert Prosperi and Gregory Stevenson, were found guilty of providing concrete that could cause safety issues and did not meet project specifications. Id. at *3. The government appealed the sentences and argued that they were substantively unreasonable under Gall v. United States , 552 U.S. 38 (2007), but the First Circuit held that it was proper for the district court to consider as a mitigating factor that the defendant's intent in orchestrating the scheme was not to harm the government project or to enrich themselves but only to help their company succeed. Id. at *33.

Business Crimes Hotline and In the Courts were written by Kirkland & Ellis, LLP, Summer Associate Steven Hagenbuch.