Argument preview: Does Apprendi limit judicial fact finding relevant to the imposition of criminal fines?

The following argument preview is written by Susan F. Mandiberg, Jeffrey Bain Faculty Scholar and Professor of Law at Lewis & Clark Law School. Her teaching and research focus on criminal law and procedure and the enforcement of environmental protection laws.

Introduction

On Monday, March 19, the Supreme Court will hear oral argument in Southern Union Co. v. United States, a case that could bring about profound changes in the way courts impose criminal fines, which serve as the principal sanction for organizations, including corporations. The Court will have to determine whether fines are subject to the principle announced in Apprendi v. New Jersey: “Other than the fact of a 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.”  To date, the Court has applied this principle only to the death penalty (Ring v. Arizona) and to sentencing schemes limiting years of incarceration a judge may impose in the absence of specific factual findings (Blakely v. Washington, United States v. Booker, Cunningham v. California, and Oregon v. Ice).

The issue arises in the context of an environmental criminal statute authorizing a prison term and a fine “per day” of violation. The jury was not asked to determine the number of violation days; it returned a general verdict of guilty. However, the court imposed a sentence based on the premise that the violation had occurred for more than one day.  If the Supreme Court finds that the trial court engaged in judicial fact finding – and if Apprendi applies to fines – the sentence violates due process and the Sixth Amendment right to jury trial.

The decision in this case could turn on the Court’s assessment of the judicial role in imposing fines at the time of the Founders and whether fines – the sanction for corporate “persons” – are a fundamentally different punishment from incarceration. Considerations concerning the administration of justice may come into play.  Finally, the opinion should clarify the significance of Oregon v. Ice, the Court’s most recent relevant precedent.

Background

The United States charged Southern Union, a natural gas company, in a three-count indictment alleging crimes involving handling of mercury, a hazardous waste. The jury returned a general verdict acquitting Southern Union of two counts and convicting it of storing hazardous waste without a permit in violation of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. § 6928(d)(2)(A). For organizational defendants, this felony statute imposes a maximum fine of “not more than $50,000 for each day of violation.” (The fine provisions of the Federal Sentencing Guidelines do not apply to organizations convicted of environmental crimes.) The indictment alleged that Southern Union stored mercury without a permit “[f]rom on or about September 19, 2002 until on or about October 19, 2004.” The district court held that Apprendi applies to the imposition of fines but found that the guilty verdict, combined with the indictment, implied a jury finding that Southern Union had violated RCRA for the full 762 days in the alleged range. Although this finding permitted the court to impose a fine of $38.1 million, it imposed penalties of only $18.1 million: a $6 million “fine” and a $12 million “community service obligation.” Southern Union objected to the penalties as involving judicial fact finding in violation of Apprendi.

The First Circuit affirmed on the ground that Apprendi does not apply to fines. It based this holding on Oregon v. Ice, which involved the decision to impose consecutive prison sentences for two separate crimes. A statute limited the Oregon court to concurrent sentences unless the judge found specified facts beyond the jury’s verdict on either charge, but the Supreme Court declined to extend Apprendi to consecutive sentences for separate offenses. Although Southern Union involved sentencing for a single crime, the First Circuit found that the reasoning in Ice “had altered the method of analysis underlying Apprendi”; it also relied on dicta in Ice suggesting that the Court would treat fines differently from incarceration.

Arguments

The parties articulate the nature of the problem differently.  Southern Union basically argues that the judge found 761 more violation days than the jury’s verdict supports, and so made a separate guilty finding for each day of violation. Indeed, the First Circuit also found – and noted that the government “essentially” conceded – that “the jury did not necessarily determine the number of days of violation.” Nevertheless, the United States urges that there was only one offense and characterizes the issue as “quantifying the harm” that this offense caused: the number of days this offense continued does not constitute a “separate set of acts for punishment” because the offense is still the same.  Analogizing the fact finding to valuing profits, loss, or harm from the criminal activity, the government notes that the judge found no new facts about how Southern Union committed the offense.

To support its position on whether Apprendi applies, each side presents a different history of the judicial role in imposing fines. Both sides point to supportive language in prior Supreme Court opinions.  Southern Union cites lower-court cases and commentary that presume Apprendi applies to fines. It notes that Booker’s solution to the Apprendi problem was to make the Federal Sentencing Guidelines advisory across the board; the government responds that Booker did not involve or mention fines and that Booker’s wholesale solution was adopted to avoid “administrative complexities.”

The two sides also propose different interpretations of Oregon v. Ice.  Southern Union argues that the multiple-offense context of Ice distinguishes the case completely, while the United States mentions the context only in passing. Southern Union urges that Ice’s dicta distinguishing fines from incarceration is not entitled to weight and unclear in any case; the United States agrees with the First Circuit that the dicta must be taken seriously. Southern Union asserts that Ice did not change the Apprendi principle or the Court’s basic methodology in applying it.  The United States disagrees, arguing that in Ice the “Court rejected the view that all facts increasing the ‘quantum of punishment’ must be found by a jury.” Thus, it is no longer enough to show that the jury’s verdict entitles a defendant to a lower penalty absent specific predicate findings; rather, the defendant must show that the sentencing procedure violates Apprendi’s core principles or concerns.

The parties disagree on the nature of those core concerns and are also divided on other doctrinal matters. Southern Union argues that Apprendi’s core principle is that, in a single-offense sentencing, the jury must find beyond a reasonable doubt every fact that increases punishment.  A fine is a kind of punishment, and so Apprendi is violated by “substantial monetary penalties” based on judicial fact finding.  Southern Union points out that the Founders saw fines as a serious penalty when they adopted the Eighth Amendment’s excessive fines clause and that the rights to counsel and to jury trial extend to organizations faced with criminal fines. Organizations cannot be incarcerated; thus, if Apprendi does not extend to fines, organizations will be deprived of a significant constitutional protection. The United States submits that Apprendi’s core concerns are the protection of life and liberty, the interests harmed by punishment in the previous cases.  Fines are different, as they involve property, and constitutional protections decrease in some instances where punishment does not include lengthy incarceration or death.

The parties also urge the Court to consider the effects of its decision on the administration of justice. If Apprendi applies to per-day fines, prosecutors alleging more than one day of violation will have to request special verdicts or charge each day as a separate count in the indictment; similar procedures could also be required for facts relevant to valuing the harm caused by the offense. The United States lists problems such a holding could cause: impossibility of pleading sentencing facts unknown at the time of indictment; and bifurcated or trifurcated trials to avoid both admission at trial of evidence prejudicial to the defendant on the merits and possible jury confusion. A legislature could avoid these problems by eliminating the facts required to increase the fine above a minimum, but doing so would frustrate attempts to rein in judicial discretion and make fine-based sentences more proportional. These problems would confront states as well as the federal government. On the other hand, if Apprendi does not apply to fines, judges have discretion, based on their own findings, to impose a fine higher than that supported by the facts inherent in the jury’s verdict. Southern Union and its amici, the Chamber of Commerce et al., predict that this situation will increase the bargaining leverage of prosecutors and result in more innocent defendants pleading guilty. In addition, that holding would allow Congress to make the fine provisions of the Federal Sentencing Guidelines mandatory again, creating problems when sentencing individuals to both a fine (Guidelines mandatory) and incarceration (Guidelines advisory).

Analysis

The Supreme Court’s five-to-four decision in Oregon v. Ice turned on three factors, all of which are likely to be important in this case.  First is the historical record, which is open to interpretation regarding the judge’s role in imposing fines. The second Ice factor – state sovereignty – is not directly at issue in this case, but states will also feel the administrative effects if Apprendi is extended to fines. The third Ice factor was the distinction between sentencing for one offense versus multiple offenses; in this regard, this case is less like Ice and more like the earlier Apprendi progeny.

The tie-breaker in this case may be the Court’s assessment of whether substantial fines should be treated similarly to incarceration in assessing this aspect of the Sixth Amendment right to jury trial.  The crime is a felony, and penalties can certainly reach the $52 million amount that called for a jury trial in the contempt proceedings in International Union, United Mine Workers v. Bagwell. The Court’s respect for the status of corporations as “persons” (e.g., Citizens United v. Federal Election Commission) may weigh in the balance, as fines are the major criminal sanction for organizations, and significant fines can hamper an organization’s activities or even result in corporate “death.”  On the other hand, the administrative complications raised by the United States are not negligible, especially in the context of valuation of harm, profit to the defendant, or loss to the victim.  The United States focuses, in fact, on valuation in making its argument regarding administrative fallout.  The problem might be less serious in the context of violation days, as such evidence is more likely to be presented at trial in any case. This distinction raises the intriguing possibility that the Court could distinguish between types of fine-related facts in making its decision.

Conclusion

The Court will have to weigh the often conflicting – and manipulable – considerations of history, criminal justice administration, the nature of punishment, and the rights of organizations.  Unlike the case in Ice, the jury convicted Southern Union of only one offense. The United States would have the Court treat days of violation as a detail of how the crime was committed. However, the more the Court sees each day of violation as an essentially separate offense, the harder it will be to affirm the First Circuit’s holding that Apprendi does not apply.