Corrupt? Yes. An abuse of power? Yes. But criminal? Not quite. On May 7, 2020, the US Supreme Court unanimously overturned the convictions of two former New Jersey public officials responsible for “Bridgegate,” a scheme that resulted in traffic on the George Washington Bridge (the Bridge) grinding to a standstill for four days in September 2013. The decision has far-reaching implications for cases in which the US Department of Justice (DOJ) seeks to charge wire fraud under 18 U.S.C. § 1343 or federal program fraud under 18 U.S.C. § 666(a)(1)(A), as well as other fraud statutes.

The defendants in the case were Bridget Kelly, then-New Jersey Governor Chris Christie’s deputy chief of staff, and William Baroni, whom Governor Christie had named as the deputy executive director of the Port Authority of New York and New Jersey, which operates the Bridge. The defendants, intending to punish Fort Lee, New Jersey’s mayor for refusing to back Governor Christie’s reelection campaign, engaged in a scheme to reduce the number of lanes at the Bridge’s toll plaza reserved for Fort Lee’s morning commuters from three to one. The lane realignment, which was purportedly for a “traffic study,” but was in truth an act of political retribution, caused four days of gridlock in Fort Lee. Baroni and Kelly were convicted in federal court of wire fraud, federal program fraud, and conspiracy to commit each of these crimes.

The Supreme Court, however, unanimously reversed their convictions. Justice Elena Kagan, writing on behalf of the Court, found that the evidence the jury heard showed deception, corruption, and abuse of power. She observed, however, that the statutes charged in the case criminalize fraudulent schemes undertaken for the purpose of obtaining money or property. The defendants, the Court concluded, did not undertake the scheme for the purpose of obtaining the Port Authority’s money or property. Rather, the defendants abused their regulatory power for political reasons by deciding that drivers from Fort Lee should get two fewer lanes, while drivers from nearby highways should get two more. This regulatory decision to reallocate the number of lanes available to commuters from Fort Lee did not qualify as the taking of property, notwithstanding the fact that the defendants acted for bad reasons and by resorting to lies.    

In reversing the convictions, the Supreme Court rejected the government’s arguments that the defendants intended to obtain the Port Authority’s money or property by, first, seeking to commandeer the Bridge itself by taking control of its physical lanes, and, second, aiming to deprive the Port Authority of the costs of compensating the traffic engineers and back-up toll collectors. The Court found that the defendants had not taken the lanes from the government, but rather, had regulated the use of the lanes, as officials responsible for roadways so often do. The Court further found that the time and labor of the Port Authority employees were just the implementation costs of the defendants’ scheme to reallocate the lanes – in other words, the labor costs were an incidental byproduct of the defendants’ regulatory decision.

The Court contrasted this incidental expense with a situation in which a mayor used deception to get city workers to renovate his daughter’s new home, or where a city parks commissioner induced his employees to do gardening work for political contributors. In those situations, the entire purpose of the schemes was to obtain the employees’ services on government time. Here, by contrast, neither defendant sought to obtain the services that the Port Authority employees provided. Their plan was to impede access from Fort Lee to the Bridge, and the cost of the employee hours spent on implementing that plan was an incidental byproduct of that decision.

The Supreme Court’s repudiation of the government’s theory in this case is a message to the DOJ that even broad federal fraud statutes have their limits. As Justice Kagan cautioned, “not every corrupt act by state or local officials is a federal crime.” In future cases, the DOJ will have to take care to show that obtaining money or property was truly the purpose of the alleged fraud, rather than simply a byproduct of it. The Bridgegate decision is consistent with recent judicial decisions, including decisions in the Foreign Corrupt Practices Act (FCPA) context, that have reined in the DOJ’s attempts to take an expansive view of its jurisdiction and charging powers. For instance, earlier this year, a district court in Connecticut reinforced the Second Circuit’s decision to limit prosecutors’ ability to pursue FCPA charges against foreign nationals acting extraterritorially.¹

The Bridgegate decision is another reminder that companies and individuals alike should monitor courts’ decisions to try to limit prosecutorial overreach, and may consider challenging prosecutors’ attempts to hold them liable through an expansive application of fraud statutes.  

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¹Eversheds Sutherland’s Legal Alert entitled “Hoskins escapes FCPA convictions while money laundering convictions remain” can be accessed here.

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