Fischer v. United States: Evaluating Sarbanes-Oxley in Non-Corporate Applications
July 2024 | Madeline Krieger (Staff Writer & Editor)
Introduction
On a chill December evening in 1773, a group of Boston revolutionaries boarded a merchant ship, dumping over three hundred chests of tea overboard in an act of defiance against British taxation. [1] While the Boston Tea party was immortalized in the American mythos, it would be only the first of many protests in America’s history, from the Stonewall riots to the Vietnam War demonstrations, to shape freedoms and politics. However, while the First Amendment protects the right to assemble and “petition the Government for a redress of grievances,” it does not vindicate acts of violence and civil disobedience. [2]
The events of January 6th, 2021 were an unprecedented blurring between protest and insurrection, as rioters stormed the Capitol building in a violent attempt to interfere with the electoral vote count. [3] Rising tensions between the Democratic and Republican parties had led to volatile distrust in the validity election’s outcome— distrust that would fuel the mob that descended on the Capitol. [4] Joseph Fischer, a former police officer, was among these protestors and was arrested for disorderly conduct and assault of a member of law enforcement. [5] While Fischer would be punished for these charges, he would challenge the initial application of the 2008 Sarbanes-Oxley Act to his case. Sarbanes-Oxley, which could have expanded the government’s ability to criminalize obstruction of official proceedings, would be heavily contested as a threat to First Amendment freedoms. [6] The Supreme Court’s ruling in favor of Fischer affirms American cultural emphasis on the right to protest, limits how future insurrectionists can be punished, and follows a recent trend of limiting expanded powers.
Context and Cases “Otherwise” Relevant
The Sarbanes-Oxley Act was Congress’s response to the accounting scandals of the early 2000s, which were catalyzed by corporations fabricating information about their debts to investors. [7] The ensuing financial crisis led Congress to enact policy that would require more accountability and criminalize falsely reporting audits. In addition to improving financial transparency, Sarbanes would outline punishments for tampering with “any record, document, or tangible object with the intent to impede, obstruct, or influence” government proceedings, as shown below in §802. [8]
§1512 would later restate §802’s criminalization of evidence tampering, but would separate the “intent to to impede” phrase into its own line, preceded by the words “or otherwise." [9]
This slight adjustment of phrasing would create ambiguity about whether Congress had intended for c(2) to stand on its own— something Fischer would contest in his trial twenty years later. However, Sarbanes-Oxley would actually first be applied in a non-corporate setting in the 2014 case Yates v. United States.
Oleta Yates was a fishing captain charged with destruction of evidence after dumping illegally undersized fish overboard, despite being instructed to take them to a dock by a federal agent. [10] Yates would challenge his conviction under §802, arguing that Sarbanes-Oxley was only intended for financial and corporate applications. The Supreme Court would rule in his favor later that year, establishing that §802’s use of the phrase “tangible object” referred only to “objects used to store information, such as computer hard drives, not fish.” [11] While Fischer v. United States would focus more on the breadth of §1512, Yates set a precedent for a more narrow, context-bound application of Sarbanes.
Miller v. United States would precede Fischer’s case as one of the first trials in the January 6th proceedings to consider Sarbanes-Oxley as well. [12] Garret Miller believed that §1512(c)2 was irrelevant to his prosecution, arguing that he had not damaged evidence or participated in a protest with corrupt intent. [13] Miller claimed that c(2) required the requisite of c(1) and that even if c(2) was read on its own, his actions did not constitute interference with an official proceeding. The District of Columbia District Court would rule that the electoral vote count was an official proceeding, but acknowledged that the phrase “or (2) otherwise” made it unclear how c(2) should be applied. [14]
Judge Carl Nichols would rule in favor of a non-inclusive interpretation, citing the 2008 Supreme Court Case Begay v. United States. [15] Begay considered the definition of “violent felony” under a law that defined it as an act that involves “burglary of a dwelling, arson, or extortion… use of explosives, or otherwise involves conduct that presents a serious potential risk of physical injury to another.” [16] The Supreme Court ruled that the first half of the definition was a prerequisite and that other behavior not specifically listed was not a felony even if it led to risk of injury. [17] Judge Nichols would apply this ruling to Miller’s case and affirm that the use of “or otherwise” in Sarbanes-Oxley did not make c(2) a standalone section. [18]
Fischer’s Initial Prosecution and Appeal
During his initial trial at the District of Columbia District Court in March 2022, Fischer would claim that §1512 was unconstitutionally broad and did not apply to the scope of his actions. [19] The section opens with the phrase “whoever corruptly,” a somewhat subjective requisite for intent that gives judges discretion in evaluating what types of protest constitute disruption of justice. Ruling that Sarbanes-Oxley §1512c(2) criminalizes any form of interference with official proceedings would be a broad interpretation that could overlap with First Amendment rights to political protest. Fischer would ultimately be prosecuted for obstructing law enforcement, but Judge Nichols would again rule for a narrow interpretation of §1512. [20] Nichols argued that Sarbanes-Oxley could not be applied because Fischer had not destroyed evidence, despite interfering with the electoral vote count. [21] This decision would later be appealed in April 2023, and Nichols’ ruling would be overturned by Florence Pan, the Appellate Circuit Judge. [22]
The Appeal Court noted that Begay could not be used as precedent, because the definition of a felony was structured differently than Sarbanes. Pan argued that §1512’s sections sit within a “separately numbered subparagraph,” putting each section “visually on an equal footing and indicat[ing] that they have separate meanings.” [23] To support this interpretation, the Court also referenced Loughrin v. United States, which established that “two clauses [that] have separate numbers, line breaks before, between, and after them, and equivalent indentation” have independent meanings. [24] While Pan would acknowledge that there was no precedent to use Sarbanes to prosecute crimes that did not involve evidence tampering, he opposed Fischer’s argument that the act’s interpretative room was unconstitutionally broad. [25] Fischer would go on to submit a writ of certiorari later that year, which would be approved in December 2023. [26]
April 2024 Supreme Court Oral Arguments
The Supreme Court would hear Fischer’s oral arguments on April 16th, 2024 and consider the issues addressed by both the district and appellate courts. [27] Fischer’s legal team was primarily questioned about Congress’s intent for applications of §1512(c)2 if not to create a broader application for (c)1. [28] Justice Kagan would argue that there were “multiple ways in which the drafters of c(2) could have made it clear that… [it] operate[s] only in the sphere of evidence spoliation.” [29] On its own, §1512c(2) makes no reference to evidence and does not seem to be constructed as a subsequent of c(1), as Justice Barrett would claim. Barrett posits that if c(2) was meant to be read with the inclusion of c(1), it would have been written as “otherwise obstructs, influences, or impedes any official proceeding with the intent to impair the object's integrity or availability for use in an official proceeding.” [30] Despite the awkward phrasing, had Sarbanes-Oxley been constructed in this way, it would have been more clear that c(2) was not intended to serve as a catchall. Justice Alito also noted that there had been some dissatisfaction between the judges who had decided the Begay vs. United States case. Alito said that he was “not a fan” of the decision that had been reached and was hesitant to apply it as precedent for Sarbanes.
Solicitor General Elizabeth Prelogar, however, would speak in favor of Fischer during the second oral argument. Along with Justice Roberts, she would share concerns about the breadth of c(2) if read on its own. Prelogar considered §1512’s structure and noted that it “[didn’t] look like the typical kind of statutory phrase that consists of parallel list of nouns.” [31] The semicolon separating c(1) and c(2) convolutes §1512’s structure, making it unclear if the two sections are meant to be read as part of the same list. Justice Roberts would also consider the potential issue in the broad phrasing of “obstructs, influences, or impedes” in c(2). [32] Prelogar considered multiple situations where someone might influence a proceeding, like protesting in a courtroom or blocking government vehicles during a protest. While these actions might not be clearly protected by the first amendment, it would be difficult to determine if they had the “corrupt” intent Sarbanes requires. [33] Even if Fischer’s actions in the January 6th insurrection were deemed corrupt, the Court acknowledged the potential significance of extending the reach of Sarbanes through this case.
June 2024 Supreme Court Ruling and the Potential of Relabeling Corruption as Protest
On June 28, 2024, the Supreme Court ruled with a 6-3 vote that Fischer could not be prosecuted under Sarbanes-Oxley. The ruling acknowledged that the purpose of c(2) was to clarify that actions not specifically mentioned in c(1) were illegal, but that it’s unclear how broad c(2) was meant to be. [34] The majority opinion would cite United States vs. Williams, a case that established that sections of a law should be interpreted in concordance with the breadth of the sections around it. Sinice c(1) is intentionally specific with its relevance to evidence, the Court also reaffirmed Begay’s non-inclusive interpretation of the phrase “or otherwise.” [35] The Court would conclude that if c(2) was meant to be a catchall for all forms of obstruction, Congress wouldn’t have given specific examples and punishments in c(1).
The dissenting opinion, which was written by Justices Barret, Sotomayor, and Kagan, criticized this limited interpretation of Sarbanes-Oxley. The Justices argued that the words “obstruct” and “impede” in c(2) were intentionally broad and written as a catchall. [36] While c(1) was meant to outline punishments for impeding official proceedings through evidence destruction, c(2) was framed to address impeding through any other means. [37] Barret, Sotomayor, and Kagan would specifically question why c(1) would “give examples for other forms of obstructing proceedings” if it was written only to criminalize evidence tampering. [38]
This ruling follows some of the Supreme Court’s recent decisions in cases like Dobbs and Chevron to limit the powers of the federal government. However, the immediate impacts of Fischer’s outcome are reassuringly minimal, since only twenty four percent of other January 6th defendants were initially tried under Sarbanes-Oxley to begin with. [39] Furthermore, the majority of these defendants were found guilty of other charges, demonstrating that the Court’s ruling in favor of Fischer was not inherently confinement. [40]
This case ultimately establishes that Sarbanes-Oxley’s application in future cases will be explicitly evidence-related, not that insurrections will be seen as constitutionally protected forms of political protest by the courts. However, this significance could be exaggerated through a partisan interpretation. The events of January 6th are reflective of national political divides and distrust of the Supreme Court extends further than concerns raised by its conservative majority. Narrowing the scope of how criminals like Fischer can be prosecuted could also be seen as a right-wing victory and encourage future extremists into relabeling corruption as protest. The outcome of Fischer v. United States exacerbates tensions if seen as a partisan victory, despite the legal impact it holds on its own.
Sources
“Boston Tea Party Timeline.” National Parks Service, n.d.
“U.S. Constitution - First Amendment.” Constitution Annotated, n.d.
Jonathan Katz, Lily Conway, et al. “The January 6 Insurrection: One Year Later.” Brookings, 2 Aug. 2022.
Ibid.
Howe, Amy. “Jan. 6 Defendant Asks Supreme Court to Throw out Obstruction Charge.” SCOTUSblog, 17 Apr. 2024.
Golde, Kalvis. “Fischer v. United States.” SCOTUSblog. Accessed July 21, 2024.
“Sarbanes-Oxley Act.” Legal Information Institute, Legal Information Institute.
Office of the Federal Register, National Archives and Records Administration. "Public Law 107 - 204 - Sarbanes-Oxley Act of 2002". Government. U.S. Government Printing Office, July 29, 2002.
Ibid.
“Yates v. United States, 574 U.S. 528 (2015).” Justia Law, n.d.
Ibid.
“Yates v. United States, 574 U.S. 528 (2015).” Justia Law, n.d.
Ibid.
United States v. Fischer, 2022 District of Columbia District Court. CRIMINAL ACTION 1:21-cr-00234 (CJN)
Ibid.
Begay v. United States.” Legal Information Institute, Legal Information Institute,
Ibid.
United States v. Fischer, 2022 District of Columbia District Court. CRIMINAL ACTION 1:21-cr-00234 (CJN)
Ibid.
Ibid.
Ibid.
United States v . Fischer, 2023 United States Court of Appeals, District of Columbia. United States v. Fischer. No. 22-3038.
Ibid.
Ibid.
Ibid.
Golde, Kalvis. “Fischer v. United States.” SCOTUSblog,
Transcript of Oral Argument, Fischer v. United States (23-5572). United States Supreme Court.
Ibid.
Ibid.
Ibid.
Ibid.
Ibid.
Ibid.
United States v. Fischer. June 2024 Supreme Court of the United States. No. 23–5572.
Ibid.
Ibid.
Ibid.
Ibid,
Ryan Goodman, Mary B. McCord. “The Limited Effects of Fischer: DOJ Data Reveals Supreme Court’s Narrowing of Jan. 6th Obstruction Charges Will Have Minimal Impact.” Just Security, June 28, 2024.
Ibid.