In Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), the Supreme Court did away with the “Chevron Doctrine” essentially eliminating the Judiciary’s mandated deference to agency interpretations of ambiguous statutes. On the horizon, is what effect the Loper decision will have on the Federal District Court’s mandated utilization of the Sentencing Guidelines when sentencing defendants.
Over the past few years, I have had the good fortune to work on two high profile political corruption cases brought in the Eastern District of Pennsylvania. The Defendants in those matters John Dougherty (Local 98 Leader convicted of, inter alia, paying bribes to Philadelphia City Councilman Robert Henon) and Rahim Islam (CEO of Universal Community Homes convicted of, inter alia, paying bribes to a Milwaukee Public School official) were coincidentally sentenced within days of each other in July of this year. Both men were given significant sentences; Mr. Dougherty (6 years) and Mr. Islam (7 years). However, despite both Defendants putting the Government through its paces, both sentences fell well below what the Guidelines called for; Mr. Dougherty (11 – 14 years) and Mr. Islam (12 – 16 years).
Consistent with these two cases, federal judges have been reluctant to sentence Defendants within the Guidelines. In the years leading up to United States v. Booker, 543 U.S. 220, 125 S. Ct. 738, 160 L. Ed. 2d 621 (2005) wherein the Supreme Court demoted the Guidelines from mandatory to merely advisory, federal judges would bemoan the fact that their hands were tied at sentencing and that they would most certainly have handed down a lesser sentence, but for, the mandatory nature of the Guidelines. Since the Booker decision, federal judges have generally made good on those promises with a healthy majority of sentences handed down since Booker departing or varying downward from the guidelines. For example, in 2022, only 44% of sentences handed down were within or above applicable guideline range. (2022 Federal Sentencing Statistics)
Now armed with the Loper decision, Defendants will further chip away at the mandate that federal district courts must consider the guidelines at sentencing. With regard to the Sentencing Commission’s Commentary to the Guidelines, since the Supreme Court’s 1993 decision in Stinson v. United States, 508 U.S. 36, 113 S. Ct. 1913, 1914, 123 L. Ed. 2d 598 (1993), the court has held that the Commentary found in the Guidelines must be considered authoritative “unless it violates the constitution or federal statutes, or is inconsistent with, or a plainly erroneous reading of the Guideline.” The court in Stinson relied on Chevron in finding the commentary authoritative stating that:
Although the analogy is not precise because Congress has a role in promulgating the Guidelines, we think the Government is correct in suggesting that the commentary be treated as an agency’s interpretation of its own legislative rule. The Sentencing Commission promulgates the Guidelines by virtue of an express congressional delegation of authority for rulemaking and through the informal rulemaking procedures in 5 U.S.C. §553. Thus, the Guidelines are the equivalent of legislative rules adopted by federal agencies. The functional purpose of commentary (of the kind at issue here) is to assist in the interpretation and application of those rules, which are within the Commission’s particular area of concern and expertise and which the Commission itself has the first responsibility to formulate and announce. In these respects, this type of commentary is akin to an agency’s interpretation of its own legislative rules. As we have often stated, provided an agency’s interpretation of its own regulations does not violate the Constitution or a federal statute, it must be given “controlling weight unless it is plainly erroneous or inconsistent with the regulation.”
Id. (internal citations omitted). Thus, a fair reading of Loper as applied to the Commentary in the Guidelines, unbinds federal district courts from deferring to Guideline Commentary in interpreting the Guidelines.
With the Loper decision arguably eliminating a trial court’s deference to the Guidelines Commentary, what is then in store for the guidelines themselves? The Supreme Court’s mandate in Booker and subsequently in Molina-Martinez v. United States, 578 U.S. 189, 189, 136 S. Ct. 1338, 1339, 194 L. Ed. 2d 444 (2016) that trial courts consider the Guidelines at sentencing, and justifying that requirement based on the Commission’s “expertise” amounts to the functional equivalent of Chevron deference. With courts sentencing Defendants within the guidelines less than 50% of the time, perhaps it’s time for federal courts, relying on the Loper decision, to move away from the Guidelines once and for all.
Takeaway
Who would have thought politicians can work for tips? Well, that is what Portage, Indiana Mayor Jim Snyder argued (more or less) before the Supreme Court last month, when he sought to overturn his conviction under 18 U.S.C. § 666 on the grounds that the law prohibits bribery, but not gratuities, involving state and local officials. If observers of the April 15, 2024, oral arguments are correct, Mayor Snyder is likely to prevail in yet another decision by the Supreme Court narrowing the scope of public corruption laws. And a decision in his favor may resonate beyond the sphere of public officials.
The Facts
In late 2012, and in late 2013, Mayor Snyder, on behalf of Portage, purchased two garbage trucks through a public bidding process. The contracts, totaling more than $1.1 million, were awarded to Great Lakes Peterbilt (GLPB). Snyder put a friend in charge of the bidding process, who tailored the specifications in both procurements to make them easy for GLPB to meet. Moreover, Snyder had been in contact with GLPB’s owners during the bidding process. Approximately two weeks after the second contract was awarded, GLPB paid Snyder $13,000, supposedly for consulting services that Snyder was to provide, although Snyder provided varying explanations for the purpose of this payment. According to the testimony of one of the GLPB owners, Snyder had requested the payment because he was tight on funds.
In November 2016, Snyder was indicted for federal funds fraud under 18 U.S.C. § 666(a)(1)(B). After he was convicted and then granted a new trial on the bribery charge, he was convicted a second time in March 2021.[1] Snyder appealed his conviction, and argued before the Seventh Circuit that Section 666 applies to bribery, but not “gratuities” like what he received from GLPB. He claimed that there was no quid pro quo agreement for the payment prior to Portage awarding the contracts to GLPB, and therefore, Section 666 does not apply. The Seventh Circuit rejected that argument, affirming his conviction.
The Statute(s)
As described by the Seventh Circuit, 18 U.S.C. § 666(a)(1)(B), “in relevant part . . . makes it a crime for an agent of a state or local government receiving federal funds to ‘corruptly solicit[ ] or demand[ ] for the benefit of any person, or accept[ ] or agree[ ] to accept, anything of value from any person, intending to be influenced or rewarded in connection with” any government business or transaction worth $5,000 or more. The court noted that although the statutory language does not use the terms “bribe” or “gratuity,” the language “‘influenced or rewarded’ easily reaches both bribes and gratuities.”
The Court of Appeals further observed that it has repeatedly held that § 666(a)(1)(B) forbids taking gratuities as well as bribes and has refused to import a quid pro quo requirement into the elements of the offense. It noted that “many” other Circuits have taken the same position, but the First and Fifth Circuits have held that § 666 does not apply to gratuities.
Also relevant to the Supreme Court’s analysis of the scope of Section 666 is 18 U.S.C. § 201, which criminalizes bribery of federal officials, and gratuities paid to or received by federal officials. The Seventh Circuit turned to United States v. Sun-Diamond Growers of California, 526 U.S. 398, 405 (1999), which under Section 201(c) defined an illegal gratuity as “a reward for some future act that the public official will take . . . or for a past act that he has already taken,” to support its conclusion that “§ 666 covers gratuities as well as bribes.”
What’s at Stake
Aside from the obvious impact on the 21-month prison sentence that former Mayor Snyder is facing, the Supreme Court’s consideration of this case will resonate widely. The Bureau of Labor Statistics identifies approximately 20.3 million state and local government employees as of March 2024. Moreover, Section 666 is quite an elastic statute used by prosecutors to reach all manner of alleged fraud and corruption. Snyder, as the mayor of Portage, was a local official, but the statute extends to the private sector by covering not just state and local government agencies, but also “any organization” that receives over $10,000 in a year in federal funds, through a contract, grant, etc. Hospitals, universities, government contractors, other nonprofits, and their patrons, all will be watching this case closely.
What’s The Issue?
The Supreme Court will decide whether 18 U.S.C. § 666(a)(1)(B) criminalizes gratuities, i.e., payments in recognition of actions a state or local official has already taken or committed to take, without any quid pro quo agreement to take those actions.
The Government argues, and the Seventh Circuit agreed, that the terms “influenced or rewarded” signals Congress’ intention to extend the statute to gratuities, thereby covering after-the-fact payments “intended to ‘make a return . . . for a service.’” It contends that if the statute is limited to quid pro quo bribery, the term “rewarded” essentially would be surplusage. Mayor Snyder, on the other hand, argues that § 666(a)(1)(B) criminalizes only bribery, requiring a quid pro quo, and asserts that “rewarded” was added to ensure that a recipient of a bribe paid after the recipient acts could not escape accountability, and to thwart a defense that the recipient of the bribe wasn’t influenced by it, and would have taken the same action anyway.
Both sides also offer their own perspective on the importance of the term “corruptly” in the statute. Snyder argues that “corruptly” accepting money intending to be influenced to act in the payor’s favor suggests that the quid pro quo is necessary whether it influences the action (before) or rewards the action (after). And if there is no quid pro quo, and the recipient is merely rewarded by the payor, then neither party is acting “corruptly,” and the statute does not apply; the official is merely receiving a gift of appreciation. “Unquestionably, corruptly intending to be influenced requires specific intent to exchange official conduct for money.”
The government’s interpretation of “corruptly,” by contrast, is that Congress included that “stringent mens rea as a means of excluding innocuous gifts that the ban on gratuities might reach.” At Synder’s trial, however, the government and district court seemed to water down this “stringent” mens rea, instructing the jury that “corruptly” means acting with the understanding that something of value is to be offered or given to reward the defendant in connection with his official duties.” This seems more akin to a quid pro quo than a straight gratuity, but Snyder argues that “corruptly” was transformed to mean the defendant was acting with mere knowledge that something is given as thanks for official conduct.
Supreme Court Argument
The Supreme Court heard oral argument on Mayor Snyder’s case on April 15, 2024. The consensus among observers is that a majority of the Justices – while not especially sympathetic to the facts of Snyder’s case, and his request for and receipt of $13,000 from GLPB soon after GLPB won a second contract to sell Portage a garbage truck – seemed skeptical that Section 666 applies to gratuities, and concerned that “corruptly” was too vague a mens rea standard. Justices Gorsuch and Kavanaugh spun out several hypotheticals illustrating the difficulty of well-intended gift recipients knowing where the line is drawn – can accepting a restaurant gift card run afoul of the law? How about sports tickets? How about a large donation to a hospital that treated a wealthy individuals loved one? Even political contributions can be considered gratuities under the breadth of the statute.
Assistant U.S. Solicitor General Colleen Sinzdak struggled to articulate an interpretation of “corruptly” that had sufficient clarity to satisfy the Justices’ concerns. She thus tried to reassure the Court that the statute has built in constraints with its applicability limited to transactions of $5,000 or more, and the discretion that prosecutors would exercise in not pursuing de minimis cases. That reassurance, however, fell flat with Chief Justice Roberts, who remarked that “We’ve had several cases where we’ve made the very clear point that we don’t rely on the good faith of the prosecutors in deciding cases like this.”
Chief Justice Roberts could have been hinting at the novel theories that have been deployed against former President Donald Trump and in some of the prosecutions of January 6 defendants, which are presently before the Court. More likely, the Chief Justice was referring to the line of public corruption cases with novel prosecution theories that the Supreme Court has overturned in recent years, including the prosecutions of former Virginia Governor Bob McDonnell (overturning bribery conviction where Governor and his wife accepted gifts from a constituent but never performed an “official act” on his behalf) and Joseph Percoco (overturning conviction for honest services fraud of former New York official who used his influence with state government agencies on behalf of a paying client).
Section 666 was itself the subject of the infamous “Bridgegate” case, where the government charged two New Jersey officials with wire fraud and federal program fraud for ordering the closing of two lanes of the George Washington Bridge as an act of political retribution. The Court unanimously overturned the officials’ convictions, holding that fraud statutes were intended to apply to cases where the object of the fraud scheme was to obtain property, and not to all instances of dishonesty by government officials.
Prediction
Mayor Snyder does not appear to the Court as a sympathetic public official who unwittingly accepted sports tickets from a grateful constituent. Indeed, the Seventh Circuit suggested that his case approached the quid pro quo standard for which he has been arguing. Nevertheless, the Justices seemed to recognize that the vagueness and breadth of this provision can make it a trap for the unwary and leave millions of people at the mercy of discretion of prosecutors, who have shown a propensity in corruption cases to find their defendant first, and then try to shoehorn a statute into the relevant facts to determine the crime. Given the questioning of the Justices across the Court’s ideological spectrum, it appears that the Court will limit the applicability of Section 666 to quid pro quo bribery cases.
[1] Snyder was convicted on a tax charge, too, but that charge is not the subject of his Supreme Court appeal.
