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Wednesday, July 14, 2010

Some thoughts on willful blindness

Christine Hurt and Stephen Bainbridge are asking whether the “willful blindness” doctrine, which is also known as conscious avoidance and deliberate ignorance in some jurisdictions, will suffer the same fate as the “honest services” doctrine.  For those who don’t study white collar crime, the Supreme Court recently struck down, in United States v. Skilling, the ever-expanding definition of “fraud by deprivation of honest services” that prosecutors had been using in prosecutions of corporate officers and managers who had deprived victims of their “honest services.”  The problem with the “honest services” statute (18 USC 1346) was that it had been stretched to criminalize a wide variety of corporate misbehavior (including self-dealing and nondisclosure of conflicts of interest) with no effective limit.  The government’s theory of “honest services” had become so broad as to make it impossible for citizens of ordinary intelligence to discern in advance what they could and could not do.  Such vagueness created tremendous discretion for prosecutors, which in turn threatened arbitrary, after-the-fact enforcement of conduct that, in the first instance, might not have been reasonably perceived as a violation of criminal law.

This term, the Supreme Court fixed the problem (see here) by interpreting the “honest services” statute to apply only to bribery and kickback schemes (that is, situations where the person making the misstatement receives undisclosed side payments from a third party in exchange for the misstatement).  Presumably, we have seen the last of honest services prosecutions based solely on allegations of self-dealing or undisclosed conflicts of interest.  (The decision does not, however, fraud that leads to the deprivation of money or other things of value). Based on some recent cases in the white collar world (which Hurt discusses in her Conglomerate post), Hurt and Bainbridge are both wondering if willful blindness will meet the same fate as honest services.  Let me suggest after the jump why it won’t.

1.       It’s a procedural rule:  The willful blindness instruction is a procedural innovation that helps juries decide whether the evidence supports the finding of requisite mens rea.  When given properly, the instruction does not define wrongful conduct.   You cannot commit the “crime” of willful blindness.   You can commit the crime of money laundering, however, and find yourself convicted because your deliberate attempts to “hide your head in the sand like an ostrich” evinced evidence that you were deliberately hiding from certain facts in order to engage in wrongful conduct.  You can see an early, 1990, excerpt of Judge Posner’s explanation of the “ostrich instruction” here, and his later, extremely helpful, 2008 explanation of the charge here on page 13 of his Conrad Black opinion, as well as his attempted rehabilitation of the ostrich at page 12.  (Ironically, the 7th Circuit opinion, which affirmed Black’s honest services conviction, was vacated by the Supreme Court in light of its decision in Skilling.)

2.  It’s subject to greater and more systematic oversight:  The way willful blindness comes up at trial is that the defense offers a theory that, to the extent any conspiracy or wrongful scheme existed, her client “didn’t know” what was happening.  Willful blindness is thus a way of rebutting that claim.  Prosecutors wishing to rely on this concept must obtain a jury instruction from judges, whose instruction will be reviewed de novo by appellate courts.  The potential for appellate review means that courts can devise language that sufficiently avoids the (incorrect) impression that willful blindness is the equivalent of negligence.   By contrast, the government’s theory of “honest services” created the fear of an overly powerful enforcer, constrained by neither legislature nor courts.  Not so here.

3.  It is too big too fail:  Jettisoning the “willful blindness” charge would create far broader implications for federal criminal law than the Supreme Court’s exorcism of self dealing from the honest services statute.   Willful blindness has been one of the key tools for proving mens rea in any number of crimes where knowledge and intent are almost always inferred.  It has successfully been applied in drug trafficking (which accounts for nearly half of the federal docket), money laundering, all varieties of fraud and so forth.  Gutting the willful blindness doctrine would severely hamper prosecutions of all of these crimes.  However the Supreme Court felt about honest services, you can expect them to be far more circumspect about restraining the use of this tool.

None of this is to say that the charge is perfect. The charge can be mishandled, and when it is, appellate courts should not be afraid to toss out convictions that rest on improper definitions of the underlying crime.  But the instruction does have value, when delivered in its proper form.     

Posted by Miriam Baer on July 14, 2010 at 04:08 PM | Permalink


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