Supreme Court Extends Apprendi Rule To Criminal Fines: Requires Proof Beyond A Reasonable Doubt

On June 21, 2012, the U.S. Supreme Court issued an opinion in Southern Union Company v. United States, holding that the Apprendi rule applies to the imposition of criminal fines. The Apprendi rule holds that “[o]ther than the fact of the prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.” Apprendi v. New Jersey, 530 U.S. 466, 490 (2000).

In Southern Union, the Defendant, a natural gas distributor, stored liquid mercury at one of its facilities without a proper permit. The Defendant faced criminal charges after the facility was broken into and mercury was spread around the complex. In 2007, a grand jury indicted the Defendant on multiple counts, including a count which alleged that the company stored liquid mercury without a permit in violation of the Research Conservation and Recovery Act of 1976 (“RCRA”), “from on or about September 19, 2002 until on or about October 19, 2004.” Following a trial, the jury convicted the Defendant on this count. The verdict form stated that the Defendant was guilty of unlawfully storing liquid mercury for an approximate time period, using the language “on or about,” however, the jury was not asked to determine the precise duration of the violation. The trial court concluded that the jury had found a 762 day violation of the RCRA, which was punishable by inter alia “a Court fine of not more than $50,000 for each day of the violation.” 42 U.S.C. §6928(d). The trial court thus determined that the maximum potential fine, which the Defendant faced, was $38.1 million. However, the Court imposed a fine of $6 million and a community service obligation of $12 million. The Defendant challenged, under Apprendi, the trial court’s finding with respect to the maximum fine.

On appeal, the Supreme Court sided with the Defendant and applied the Apprendi rule to the imposition of criminal fines. The Court held that the jury must find, beyond a reasonable doubt, all facts which determine a fine’s maximum amount. In reaching this conclusion, the Court decided not to treat criminal fines differently than other punishment, such as incarceration. The Court stated that criminal fines, like other forms of punishment, are penalties inflicted for the commission of an offense. Substantial, and not petty, fines may engender a significant infringement of freedom, and most importantly trigger a Sixth Amendment right to a jury trial. Moreover, the amount of a fine (similar to a maximum term of imprisonment) is often calculated by reference to a particular set of facts. In Southern Union, for example, the duration of the statutory violation was a fact upon which the maximum fine was determined. The Court thus determined that the Apprendi rule should apply to criminal fines.

While the vast majority of federal convictions result from guilty pleas and juries have few opportunities to address all facts that would determine a fine’s maximum amount, we believe that Southern Union may impact the Government’s practice with regard to indictments. It appears that any facts that tend to increase the amount of a fine must now be alleged in the indictment. Because the Government’s knowledge of facts related to sentencing may be incomplete at the indictment stage, Southern Union may result in the Government foregoing greater fines.