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02/17/2017

Doing the Time Without Doing the Crime

Imagine that you are the CEO of large food producer, and you are notified out of the blue that your company is responsible for a salmonella outbreak possibly affecting thousands of people around the country.  If I were that CEO, I would be worried for those who were affected and disappointed that my leadership hadn’t prevented such an outbreak.  Most importantly, I would immediately act to remedy the situation.

In August, 2010, this hypothetical became a reality for Austin (“Jack”) DeCoster and his son, Peter DeCoster, the CEO and COO, respectively, of a large Iowa egg producer, Quality Egg, LLC.  Around this time, the Food and Drug Administration traced a salmonella outbreak back to the company’s eggs after it received reports of roughly 1,900 illnesses.  Jack and Peter DeCoster were unaware of the contamination in their facilities and had no knowledge that their company was sending out such eggs, but they immediately took steps to remedy the outbreak.  They voluntarily recalled millions of dozens of eggs and complied with all of the Food and Drug Administration’s investigations into their facilities.

When the United States prosecuted Quality Egg under the Food, Drug, and Cosmetic Act (“FDCA”), which prohibits the introduction of any adulterated food into interstate commerce, the company plead guilty and agreed to pay a $6.8 million dollar fine.  Jack and Peter DeCoster also plead guilty to being “responsible corporate officers” of Quality Egg under a doctrine created by the Supreme Court in United States v. Park, 421 U.S. 658 (1975).

Under the Park doctrine, a corporate officer can be found guilty of committing a misdemeanor when his or her corporate position affords them “the power to prevent” violations of the FDCA, even absent “knowledge of, or personal participation in” the violation.  Park, 421 U.S. at 6670, 676.  Because of this low burden for proving criminal culpability, and the lack of any “guilty mind” requirement, no corporate officer had ever received a jail sentence under the Park doctrine.  In the plea agreement, both the government and the DeCosters agreed that the DeCosters had no knowledge that the eggs contained salmonella and that the DeCosters had taken no action to contribute to the release of the adulterated eggs into the marketplace.  In other words, the DeCosters had neither a “guilty mind” nor had they taken any “guilty act” to commit this crime, as is required to receive a prison sentence under the Fifth Amendment Due Process Clause of the United States Constitution.

Nonetheless, at sentencing, the Judge found the DeCosters had run the company in a negligent manner, and sentenced them each to pay a $100,000 fine and serve three months in prison.

After a split panel of the United States Court of Appeals for the Eighth Circuit affirmed, the DeCosters filed a petition for a writ of certiorari, asking the Supreme Court to review the legality of their prison sentence.  The DeCosters’ petition highlights Due Process concerns that could affect anyone being charged criminally for the conduct of others.  On February 10, 2017, Cause of Action joined a “friend of the court” brief in support of the DeCosters’ petition, along with the National Association of Manufacturers and the National Association of Criminal Defense Lawyers, arguing that liability for “responsible corporate officers” has never and should never result in prison time, due to a lack of any mens rea requirement for conviction.

In our system, the government must prove in a criminal prosecution that the defendant committed a criminal act and did so with criminal intent.  As the Supreme Court has stated, “we must construe [an imprisonment] statute in light of the background rules of the common law in which the requirement of some mens rea for a crime is firmly embedded.”  Staples v. United States, 511 U.S. 600, 605 (1994).

The DOJ wants to make an example of the DeCosters.  The U.S. Attorney who filed the case stated: “Corporate officials are on notice….[c]laims of ignorance or ‘I delegated the responsibility to someone else’ will not shield them from criminal responsibility.”  But to do so at the expense of a hallmark principle of our justice system is a mistake, and marks a dangerous departure from the safeguards of American criminal jurisprudence.

The brief can be found here.

Erica Marshall is counsel at Cause of Action Institute.

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02/9/2017

Kellyanne Conway’s “buy Ivanka’s stuff” comment: wrong, but probably not illegal

Appearing on Fox News this week, Counselor to the President Kellyanne Conway encouraged people to “Go buy Ivanka’s stuff, is what I would tell you . . . I’m going to give it a free commercial here, go buy it today.”  Many government watchdogs, including us here at the Cause of Action Institute, perked up upon hearing this.  There are, of course, very strict rules prohibiting the endorsement of products by government employees.  In light of those rules, Ms. Conway’s comments seem like a clear violation.  Indeed, many attorneys and ethics experts on social media have chimed in.  Chris Lu, former Deputy Secretary of Labor under Obama, tweeted “This is the federal ethics law that @KellyannePolls just violated” and linked 5 C.F.R. § 2635.702. Norm Eisen, a fellow at Brookings, retweeted with the comment, “Exactly right!” Most importantly, Don W. Fox, former OGE general counsel and former acting director, claimed in the Washington Post that “Conway’s encouragement to buy Ivanka’s stuff would seem to be a clear violation of rules prohibiting misuse of public office for anyone’s private gain.” Citizens for Responsibility and Ethics in Washington (“CREW”) just filed a formal complaint about Conway’s conduct, citing § 2635.702.

I too reacted in the same way.  I’m familiar with those OGE rules, and it clearly seemed like Ms. Conway broke the law.  But, upon a closer look, I’m not so sure she was in violation of the regulation cited by Mr. Lu and CREW’s ethics complaint. Here’s why.  The relevant regulation, § 2635.702, bars an “employee” from engaging in product promotion.  5 C.F.R. § 2635.102 defines employee as “any officer or employee of an agency, including a special Government employee.”  So, the next question is: “what’s an agency? Is the White House an agency?”  For that, let’s look at 5 U.S.C. § 105, which reads “For the purposes of this title, “Executive Agency” means an Executive Department, a Government corporation, and an independent establishment.”  Right off the bat, we can cross off “Government Corporation.”  “Executive Department” is defined by an exhaustive list in 5 U.S.C. § 101.  The White House isn’t on there.  That leaves only “independent establishment” as the last potential category.

Unfortunately, whoever wrote the regulation defining independent establishment didn’t do a very good job.  It basically reads that “an independent establishment is an establishment which is not part of an independent establishment.” It’s a horribly unclear and ambiguous definition.  Thankfully, the D.C. Circuit tackled this in Haddon v. Walters, 43 F.3d 1488 (D.C. Cir. 1995).  In that case, the court was trying to decide whether or not the Executive Residence qualifies as an independent establishment.  Here’s the key language:

First, we note that elsewhere Congress has used the term “independent establishment” in distinction to the Executive Residence. Specifically, Congress has authorized “[t]he head of any department, agency, or independent establishment of the executive branch of the Government [to] detail, from time to time, employees of such department, agency, or establishment to the White House Office, the Executive Residence at the White House, the Office of the Vice President, the Domestic Policy Staff, and the Office of Administration.” 3 U.S.C. § 112 (1988) (emphasis added). That Congress distinguished the Executive Residence from the independent establishments, whatever they may be, suggests that Congress does not regard the Executive Residence to be an independent establishment, as it uses that term.

Haddon v. Walters, 43 F.3d 1488, 1490 (D.C. Cir. 1995)

Basically, the court is saying that Congress clearly referred to “independent establishment” and the “Executive Residence” as two separate things.  Right next to it on that same, distinguished list is the “White House Office.” Thus, according to the D.C. Circuit’s reasoning, the White House Office also is not an independent establishment.  Because the White House clearly does not fall into the other 2 covered categories, Government Corporations and Executive Departments, it appears that the regulation cited by many of these commenters, including the former general counsel of OGE, does not cover Kellyanne Conway as Counselor to the President.

Now, this doesn’t excuse what Ms. Conway said.  Her conduct clearly falls short of the standards expected of White House employees working on the taxpayer dime.  It is wholly inappropriate to endorse a product in the fashion she did, especially since she has a relationship with the beneficiary.  But against OGE’s ethics regulations?  Unclear, leaning towards no.

UPDATE, 3.2.2017

Shortly after the above post, we sent a letter to OGE inquiring about what legal authority the agency was asserting over Kellyanne Conway.  After combing both OGE’s letter to Congress and its letter to the White House, we didn’t see any citations that got them around the “independent establishment” problem we discussed in our blog post.

Much to his credit, OGE Director Walter Shaub replied promptly to our letter.  He directed us to 3 C.F.R. § 100.1, which reads “Employees of the Executive Office of the President are subject to the executive branch-wide standards of ethical conduct at 5 CFR part 2635, and the executive branch-wide financial disclosure regulations at 5 CFR part 2634.”

At first glance, one might think this is a problem, as the issue we flagged was statutory and, certainly, a regulation cannot amend a statute.  However, the statute matters because it is incorporated by the regulation to serve as a definition.  That very same agency, therefore, could promulgate another regulation expanding the definition for certain covered actions.

This is the first time OGE, or any authority, for that matter, has cited this part of the regulation, extending coverage to Kellyanne Conway.  While this does not cure the issue of many OGE regulations not applying to White House personnel, as the White House itself notes, it does seem to resolve the matter at hand.

 

Have any questions or criticisms?  Think I might have missed something?  Please give me an e-mail at eric.bolinder@causeofaction.org. I’d love to hear from you.  I’ll try to share and address any appropriate comments in a future blog post.

Eric Bolinder is counsel at Cause of Action Institute

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02/8/2017

Defining a “Record” under FOIA

The Freedom of Information Act has provided the public with access to federal agency records since the mid-1960s.  As hard as it may be to believe, the definition of a “record” is still not established.  There has been a great deal of litigation over the definition of an “agency record” (as opposed to, for example, a congressional record or a personal record), as those are the only types of records that are accessible through FOIA.[1]  But the antecedent question—what exactly is a “record”—has not been litigated.

The U.S. Court of Appeals for the D.C. Circuit recognized this gap in its important decision last year in American Immigration Lawyers Association v. Executive Office for Immigration Review (“AILA”).[2]  In that case, the circuit court held that agencies may not use “non-responsive” as a redaction tool to withhold information within an otherwise responsive record.  I discussed that issue in a previous post titled There is No Tenth Exemption.  The circuit court, however, did not define a “record” in that case.

Cause of Action Institute filed a FOIA request with the Department of Justice (“DOJ”) to determine how it would respond to AILA and how it would attempt to define a “record.”  We asked for an email chain that the agency had previously produced to us with most of the information redacted as non-responsive.  In making this second request, we specifically asked for the entire email chain and drew the DOJ’s attention to the AILA decision.  Instead of removing the offending “non-responsive” redactions, however, the DOJ contended that each email in the chain—and in fact each header of each email—was a separate record.  The agency then withheld those supposedly separate records as “non-responsive.”  Compare the full original here and the full re-produced record here.  This approach makes a mockery of AILA; so we filed suit.  

Today, CoA Institute filed its Cross-Motion for Summary Judgment arguing among other matters that the DOJ’s approach to defining a record is untenable.  The DOJ has taken the position, in recently issued guidance from its Office of Information Policy, that the interplay between the subject matter of the request and the content of agency documents define the “nature of a FOIA record” in response to that request.  The agency’s position, in other words, is that a FOIA record is defined—indeed, that the “record” comes into being—through the process of reading and interpreting a request and then searching for and analyzing agency documents to find those portions that contain responsive information.

As we note in our Cross-Motion (pages 25-28), this approach has several problems.  First, it has no basis in the statute.  Second, it conflicts with the rule that requesters may only seek access to records that are already in existence when the request is submitted.  Third, it means that the same, single document could be one record in response to one request, but ten records in response to another.  Finally, it conflicts with one of the venue provisions in FOIA’s judicial review section, rendering it a nullity.

CoA Institute instead proposed its own definition of a record (pages 22-25) that is based on the statute, harmonizes with existing FOIA statutory and case law, and promotes disclosure.  Our approach takes into account that agencies already have material containing information (whether documents, video files, electronic files, etc.) in their control before a request is submitted, that this material exists in a particular form and format, and that agencies must disclose such material as a unit whenever the informational content is responsive to a request (subject to FOIA’s nine exemptions, of course).  Thus, our “complete and proper definition of a ‘record’ under the FOIA is (1) any material containing information, (2) created or obtained by an agency, (3) within an agency’s control when a request is submitted, and (4) in its full native form and format as maintained by an agency at the time of a request, ‘i.e., as a unit’” (page 25).

We also urged the court to continue the practice of denying agencies any deference to their interpretations of FOIA’s statutory terms (pages 19-21).

Click here for the complete filing.

Click here for There is No Tenth Exemption, a previous post in this series.

Update: On October 10, 2017, the district court found the case was moot and did not reach the underlying issues discussed in this post.

James Valvo is Counsel & Senior Policy Advisor at Cause of Action Institute. You can follow him on Twitter @JamesValvo.

 

[1] See Department of Justice v. Tax Analysts, 492 U.S. 136 (1989).

[2] 830 F.3d 667 (D.C. Cir. 2016).

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02/6/2017

This Fisherman Is Battling the Government to Save His Livelihood

The New England and Mid-Atlantic fishing industry is older than the Nation itself. The industry’s regulators, however, have embarked on a project that threatens its imminent destruction.

Meet New Hampshire fisherman David Goethel. The federal government is destroying Mr. Goethel’s industry through overregulation and forcing ground-fishermen like himself to pay $700 per day to have authorities monitor them on their boats. Even the government estimates these additional costs would put 60% of the industry out of business. Cause of Action Institute is helping Mr. Goethel fight back through the courts to save his livelihood. Learn more HERE

#FreeTheFishermen

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02/3/2017

Pitfalls of Politicization

Disregard of legal standards that apply to everyone to achieve immediate political goals is never good. Politicization tends towards pernicious, unpredictable results.  It is particularly erosive when it infects the administration of justice.  Developments in Texas v. United States, a federal case testing the limits of the President’s and Congress’s authority to set immigration policy, demonstrate just how—and how much—politicization can undermine the rule of law.

Back in May 2016, Judge Andrew Hanen of the Southern District of Texas found that lawyers representing the United States made a series of misstatements to the court and the 26 plaintiff States and that those lawyers knew the truth when they spoke. In 2014 and 2015 those lawyers misrepresented, among other things, timing under an executive order that expanded an immigration program to millions of additional persons, most of whom were parents of children born here as citizens, for whom permissible work periods were expanded to three years. Arising from the interplay of immigration, constitutional, and administrative law, the legal issues in Texas v. United States were complex.

But the problematic misrepresentations by the Justice Department’s lawyers were straightforward. The lawyers for the United States said that the immigration authorities wouldn’t start implementing the program before February 2015.  That led the court and 26 States to forego extraordinary proceedings for emergency relief that might have resulted in a restraining order expressly preventing implementation by the federal government.  The same lawyers also misrepresented how many three-year extensions were at issue, and the government granted over 100,000 before the truth came out in court. “[T]he Justice Department lawyers knew the true facts and misrepresented those facts to the citizens of the 26 Plaintiff States, their lawyers and this Court on multiple occasions.”   The misrepresentations enabled the government to do broadly what could have been expressly restrained.

The court, quite reasonably, asked Why? The DOJ gave several reasons, none sufficient.   The scores of government lawyers working on the case “lost focus” on the facts which had “receded in memory or awareness.”  That excuse gives away the cake:  it admits a breach of every lawyer’s duty of competence.  The government’s other excuse was that many lawyers were responsible for the case, spread across multiple agencies.  The government’s disingenuous conclusion was that any remedy should only apply to the handful of lawyers who appeared in court.  Two weeks ago, on the last full day of the Obama administration, the government lost.  The court ruled, “[a]t the very least, the Justice Department should, in an organized manner, require its attorneys to review and understand each state’s ethical rules before those attorneys appear in that state. This is a minimum requirement.”

Indeed, the court’s requirement is, if anything, too minimal and the Justice Department escaped by the skin of its teeth the Court’s more fulsome wrath from May. Commentators who previously administered Justice in prior Republican and Democratic administrations, however, suggest a more plausible, but still insufficient, reason for the misconduct:  politicization at the Department of Justice.   That should trouble everyone, regardless of party affiliation.

The federal government’s omission of facts that have “receded” or “lost focus” in the service of a legal victory for its current political masters must never be acceptable, minimized, or considered “normal” mistakes, regardless of their complexity. Current events show why.  The most troubling aspects of Texas v. United States arose during the Obama administration.  But headlines during the first weeks of the Trump administration reveal the political staying power of at least four horsemen: Executive Orders, judicial review, immigration, and administration representations. Politicization will undermine the validity of them all.

Mike Geske is counsel at Cause of Action Institute

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02/3/2017

Sec. Vilsack followed ethics guidelines when negotiating his future employment

Under the Obama administration, we at Cause of Action Institute have not had many opportunities to applaud public officials for taking it upon themselves to adhere to applicable ethics standards.  This week, we learned that U.S. Department of Agriculture (“USDA”) Secretary Tom Vilsack appears to be an outlier for the administration.

On January 18, 2017, Cause of Action Institute submitted a Freedom of Information Act (“FOIA”) request to USDA after media reports indicated that Sec. Vilsack apparently began negotiating for private employment while still serving in government, triggering federal ethics laws.  Sec. Vilsack then retired from his government role a week before his term concluded.

The Stop Trading on Congressional Knowledge Act of 2012 (“STOCK Act”) states that Executive Branch employees who are required to file public financial reports may not directly negotiate for future employment unless the individual’s ethics office is notified in writing within three business days after negotiations begin.

According to un-redacted records provided to Cause of Action Institute on January 31, 2017, less than two weeks after our FOIA request, Secretary Vilsack appears to have alerted his agency’s ethics office and properly followed all ethics guidelines when he decided to pursue his next employment opportunity.

We wish the Secretary the best in his new role and hope USDA continues to provide timely responses to all future FOIA requests.

John Vecchione is acting president of Cause of Action Institute

 

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02/3/2017

CoA Institute Investigates EPA Employees Using Electronic Messaging Apps to Thwart Transparency

Washington D.C. – Cause of Action Institute (“CoA Institute”) has filed a Freedom of Information Act (“FOIA”) request after recent media reports identified a number of career EPA employees possibly using an encrypted electronic messaging app called “Signal” to communicate about work-related issues, including how to prevent political appointees from “undermin[ing] their agency’s mission to protect public health and the environment” or “delet[ing] valuable scientific data.”

“It appears that some employees at the EPA may be using encrypted apps on their phones to avoid transparency laws in an effort to conceal their communications from internal and external oversight,” said CoA Assistant Vice President Henry Kerner. “Under the Federal Records Act, the EPA has a legal obligation to preserve all records made by employees working on official government business.  This obligation is all the more important if EPA employees are using personal cellular devices or private accounts for such purposes.  These messages must also be made available under the Freedom of Information Act.  Agency leadership, Congress, and the public have a right to know if federal employees are using encrypted electronic messages to evade transparency.”

It is unknown whether these employees discuss work related issues on Signal using their EPA-issued or personal devices. Under the Federal Records Act, the EPA has a legal obligation to preserve records evidencing employees working on government business, no matter the medium of their communication. CoA Institute is submitting this Freedom of Information Act request and notifying Acting Administrator McCabe of her obligation under the Federal Records Act to ensure that all work-related Signal messages are retained or retrieved by the EPA.

The full FOIA can be found here.

 

 

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