The Issues -

On November 5, 2014, the Supreme Court heard arguments in Yates v. United States of America. In layman's terms, the issue is whether an Enron-era antishredding provision of the Sarbanes-Oxley Act was wrongly used to convict a fisherman of a crime carrying a penalty of up to 20 years in prison based on evidence that he destroyed some undersized grouper after receiving a civil citation from a wildlife agency.

The opening argument of Assistant Federal Defender John L Badalamenti, Yates' counsel, centered on syntax and canons of construction like Ejusdem Generis, which requires that a word be construed according to the company it keeps. The pertinent provision, codified at 18 U.S.C. § 1519, subjects anyone to criminal punishment who, with the requisite intent, "alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object." Badalamenti told the Justices that "[t]he natural, sensible and contextual reading of Section 1519 is that the phrase 'record document or tangible object' is confined to records, documents and devices designed to preserve information, the very matters involved in the Enron debacle." Representing the United States as Assistant to the Solicitor General, Roman Martinez argued in response that "this is a general statute that would cover destroying any record, document, or tangible object, which we think, as a manner of plain meaning and history covers all types of – physical evidence."

Originally Published in ACE's Management Liability Insights Newsletter - November 2014.