The U.S. Supreme Court has issued its decision in the closely watched case of Yates v. United States.  In a colorful opinion, rife with aquatic and fishing references, the Court ruled that grouper were not a “tangible object” under 18 U.S.C. 1519 (Sarbanes-Oxley).  Justice Ginsburg wrote for the plurality in a four-one-four decision, in which Justice Alito concurred in the holding only, but argued for a more narrow application of the Court’s opinion.

In August 2007, a federal agent conducted an inspection of Captain John Yates’ commercial fishing vessel in the Gulf of Mexico.  During the inspection it was determined that the catch contained undersized red grouper, purportedly in violation of applicable U.S. law and  regulation.  Captain Yates was instructed to keep the measured, undersized fish segregated from the catch, so that the fish could be processed in port.  When the vessel returned to port, the segregated fish did not match the previously recorded sizes and three (3) fish were missing completely.  Crew members admitted that Captain Yates had instructed them to throw the fish overboard, and they had replaced the segregated fish with other grouper that were closer in size to the permissible length requirements.

Prosecutors sought to convict Captain Yates of not only a violation of 18 U.S.C. § 2232(a), which makes it a crime to destroy or remove property to prevent seizure; but also obstruction of justice pursuant to 18 U.S.C. § 1519, for destroying, concealing, and covering up the undersized fish to impede a federal investigation.  Section 1519 was crafted by Congress in response to a perceived gap in the obstruction of justice statutes, which came to the forefront as a result of the Enron case.  The statute applies when an individual, “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence” a federal investigation.  Federal prosecutors alleged that in this case, the grouper were a “tangible object” and therefore prosecution under § 1519 was warranted.  Captain Yates argued that the statute was a “documents offense”, and therefore should apply only to objects (like hard drives or logbooks), which are similar in nature to a document or record.  The District Court had misgivings about applying such an expansive reading to 1519, but ultimately followed Eleventh Circuit precedent and affirmed his conviction and sentenced Captain Yates to thirty (30) days in prison.  On appeal, the Eleventh Circuit affirmed, finding the language of the statute to be “plain.”

In reversing the Eleventh Circuit, Justice Ginsburg wrote that while a fish is no doubt an object that is tangible, for the Court to hold that § 1519 applies to “any and all objects”, would cut loose the statute “from its financial-fraud mooring.”  The Court applied various statutory construction canons including: “ordinary and plain meaning” of the words in the text; Congressional intent (as reflected by legislative history, statute caption, and other identifying factors); noscitur a sociis (the meaning of an unclear word or phrase to be governed by the words surrounding it); and ejusdem generis (in statutory construction, when a general word follows specific words, the general words are construed to embrace objects which are similar in nature to the preceding specific words). The U.S. Supreme Court’s ultimate conclusion was: “A tangible object captured by § 1519 . . . must be one used to record or preserve information.”

While the decision will serve to limit the federal government’s use of § 1519 in future prosecutions, the real key to the holding will be whether any of the Court’s statutory analysis can be applied in other contexts to not only challenge the overreach of criminal prosecutions, but also federal agencies and their broad interpretation of U.S. law and regulations.

For more information on the background of the case and additional legal issues of interest, check out  the prior blog posts by Michelle Otero Valdés (of the Chalos & Co Miami office) on the case here and here.

To read a copy of the U.S. Supreme Court’s decision, click here.

For more information about the decision and how it may apply to specific facts and circumstances, please do not hesitate to contact us at info@chaloslaw.com.