Hubbard v. United States – Oral Argument – February 21, 1995

Media for Hubbard v. United States

Audio Transcription for Opinion Announcement – May 15, 1995 in Hubbard v. United States

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William H. Rehnquist:

We’ll hear argument now in Number 94-172, John Bruce Hubbard v. The United States.

Mr. Morris.

Paul Morris:

Mr. Chief Justice, and may it please the Court:

This case concerns the applicability of title 18, United States Code, section 1001, often referred to as the false statement statute, to statements of the petitioner made in the course of bankruptcy court proceedings.

Section 1001, of course, prohibits the making of knowingly false statements in any matter within the jurisdiction of any department of the United States.

Our position is essentially twofold.

If there is an honest debate over whether the term 1001 and/or related limitations placed upon section 1001 by the various courts of appeals that have reached this issue.

Very briefly, the petitioner’s three convictions under section 1001 arose from three written responses made through counsel during the course of the bankruptcy proceedings.

These responses were made to the bankruptcy trustee as a result of inquiries made by that trustee.

The first two convictions arose from answers to the bankruptcy trustee’s complaint, and essentially those answers consisted of the words,

“denied for the reason that the allegations in the complaint are untrue. “

The third conviction arose as a result of a discovery dispute.

William H. Rehnquist:

These answers were verified?

Paul Morris:

The third conviction arose as a result of a discovery dispute.

William H. Rehnquist:

None of these answers were verified?

Paul Morris:

No, they were not.

The answer to the complaint was signed by counsel and signed by the petitioner, but not under oath, and the discovery response was not signed by the petitioner at all, only signed by counsel.

The discovery response arose as a result of the trustee asking for the production of certain documents from the petitioner, and the discovery response filed by counsel stated that the petitioner had turned over those documents to the prior trustee.

Later on in the bankruptcy court proceedings, the bankruptcy judge issued an order directing the petitioner to turn over those documents, and they were turned over.

Nevertheless, the petitioner was indicted for 1001 as a result of that response in the discovery issue, and that comprised the third of the three convictions.

First, I would like to address the question that the determination of whether 1001 applies at all to the courts is a question that logically and necessarily precedes the determination of whether the judicial function exception applies to 1001.

This issue is not just fairly included within the question presented for review, it is a necessary predicate to a determination of the propriety of the judicial function exception.

Ours is a plain language argument.

Congress used the word in 1001, “department”.

Congress did not–

Sandra Day O’Connor:

Well, Bramblett stands in your way.

Do you say we have to overrule Bramblett?

Paul Morris:

–It is, Your Honor, dictum in Bramblett that stands in our way, and for that reason, we do not believe that the Court will run into the problem of stare decisis, as the Government would suggest.

Stare decisis, of course, carries particular weight in a statutory construction case, but not the kind of weight the Government suggests it should carry in this case, because, of course, we are addressing dictum, and we have asked the Court to recede from the dictum in Bramblett–

Sandra Day O’Connor:

Well, it certainly has been followed in the intervening years, hasn’t it?

Paul Morris:

–Well, the courts of appeals, because of Bramblett, have felt constrained to hold that such statement that… to hold that 1001 applies to the courts because of the dictum in Bramblett, and it is with several misgivings that the courts of appeals have noted that.

In fact, this is one such case, and the very first case after Bramblett was that type of case also.

William H. Rehnquist:

What Bramblett decided, though, not really by way of dictum, was that it was not limit… 1001 was not limited to the executive branch.

Paul Morris:

But the issue before Bramblett, Your Honor, was not a statement made to the judiciary, it was a statement made to the legislative branch, and in fact–

William H. Rehnquist:

Yes, but once you say it doesn’t apply to the… it’s not limited to the executive branch but it extends to the legislative branch, it seems to me it’s very hard to carve out of the statute a meaning that says, it covers executive and legislative but not judicial.

Paul Morris:

–But nevertheless, that is what the statute says.

The plain language of the statute uses the word, 18, section 6, and that definition of department is the executive departments, and it was explained in the reviser’s notes to that definition of department.

Antonin Scalia:

What about Congress?

Paul Morris:

I’m sorry?

Antonin Scalia:

What about Congress?

Is Congress within that definition?

Paul Morris:

No, it states that–

Antonin Scalia:

Well, there goes your plain language argument out the window.

Bramblett held that it was applicable to Congress, didn’t it?

Paul Morris:

–And we are asking, even if you are looking at the holding of Bramblett, if the holding of Bramblett is deemed at issue, we’re asking the Court to recede from the holding of Bramblett.

William H. Rehnquist:

So you’re not really talking just about dicta.

Paul Morris:

Well, technically, yes, we are, because Bramblett did not involve… in the sense that Bramblett did not involve a statement to the judiciary, yes.

If the Court finds that there’s no principal distinction between the legislature and the judiciary for the purposes of examining Bramblett, then yes, indeed, we’re asking the Court to recede from the holding as well.

Antonin Scalia:

Well, there is certainly no principal distinction for purposes of making a plain language argument.

Paul Morris:

Well, there isn’t–

Antonin Scalia:

If you want to make a plain language argument, you must ask us to overrule Bramblett.

Paul Morris:

–Yes, and Bramblett runs counter to the plain language argument and to the definition supplied by Congress of the term “department”.

Do you attach any–

–When you say–

–Excuse me.

Go ahead.

When you say recede, you mean overrule?

Paul Morris:

Yes, overrule, if we’re going to view it as the holding of Bramblett is at issue, but recede if we’re going to view Bramblett as only standing in the way of the petitioner’s argument as far as the dictum is concerned.

John Paul Stevens:

Do you attach any significance to the fact that Bramblett was not just any statement to Congress but rather was in support of a claim made to the disbursing office of the Congress?

Paul Morris:

Yes, and that carries particular significance in drawing the distinctions between administrative and adjudicative functions that have been drawn in the judicial function exception.

Paul Morris:

If we are to understand why the courts of appeals have had such widespread acceptance of the judicial function exception and the justification for the distinction drawn between housekeeping functions and adjudicate functions, all we need to do is look at Bramblett and see why that happened.

And the Second Circuit in the Masterpol decision, when that circuit adopted the judicial function exception, probably set forth the most cogent explanation of that distinction, and the Masterpol decision stated that in viewing Bramblett and what it was limited to, it was limited to a statement made to the disbursing office.

It was limited to the legislature as far as administrative function was concerned.

And, therefore, Masterpol said the reason why the courts of appeals are justified in drawing this judicial function exception is so that Bramblett applies to the legislature in the same way that 1001 will apply to the judiciary, only insofar as the administrative functions of the courts are concerned, so in that respect–

David H. Souter:

There is no textual basis, though, for that distinction.

You agree with that, I take it?

Paul Morris:

–Well–

David H. Souter:

I mean, that’s a nice way to draw a line, but it doesn’t reflect anything that’s written in the statute.

Isn’t that fair to say?

Paul Morris:

–No, but the courts… yes, it’s fair to say, but the courts of appeals felt that that was a justified interpretation of the statute, because Congress never intended that that statute would apply to statements such as those made by the petitioner in this case, or certainly not to every misrepresentation made in every Federal court.

Ruth Bader Ginsburg:

But, counsel, if similar statements had been made before an ALJ, for example, an administrative adjudicator, then you recognize that that would certainly be covered?

Paul Morris:

If it fell within the adjudicative function, arguably–

Ruth Bader Ginsburg:

Of an ALJ who was acting inside the executive branch but making a determination as a trier?

Paul Morris:

–Under that factual scenario, it may be arguable that there would be an exception to the applicability of 1001 as well, because that is an adjudicative function of the ALJ even though it is within the executive branch.

Ruth Bader Ginsburg:

So you say adjudicative functions cross the board–

Paul Morris:

Yes.

Ruth Bader Ginsburg:

–even for something that plainly is an agency or department of Government?

Paul Morris:

Well, though, of course–

Antonin Scalia:

Well, now you’ve turned out to be the enemy of plain language.

Paul Morris:

–Well–

Antonin Scalia:

There’s nothing like that in the statute.

Paul Morris:

–Although that issue is not precisely before the Court, I think that argument can be made.

If we are going to take the judicial function at its word, and what it represents in terms of how limited 1001 should be in the judicial proceeding, I think an argument can be made for that.

Ruth Bader Ginsburg:

And you distinguish between the two… can you give any reason why, if you have an adjudicative function exception, it should apply to courts, but not administrative agency adjudications?

Paul Morris:

I would rely upon what all the circuits have held, and that is that 1001 was… there is no indication of congressional intent that 1001 would have that broad scope, that there have to be some limitations, and the reason–

Ruth Bader Ginsburg:

Is there any… once we get away from the plain language, is there any rationale for keeping the courts out but keeping the administrative adjudicators in?

Paul Morris:

–Only under… only because of the rationale of the judicial function exception itself.

Beyond that, no.

That could be a problem in that scenario.

Antonin Scalia:

And you would exclude congressional adjudicative functions?

Antonin Scalia:

What would they be?

Paul Morris:

Well, as I stated, I think an argument can be made that if it is acting in an adjudicative function, that the rationale of the judicial function exception could apply to those situations.

Now–

Antonin Scalia:

When does it act in an adjudicative capacity?

Paul Morris:

–When it takes on the–

Antonin Scalia:

Impeachment.

What else?

Paul Morris:

–Well, when it’s acting in the same fashion as a court, the same functions as a court.

Antonin Scalia:

I know that.

When is that?

You mean when it’s holding hearings, don’t you?

Paul Morris:

Yes.

Holding hearings–

Antonin Scalia:

Holding hearings is an adjudicative function?

Paul Morris:

–Well, witnesses–

John Paul Stevens:

But your point is that it’s not a claim against the Government in those situations.

Paul Morris:

–Correct.

Antonin Scalia:

Well, but I’m trying to know what you’re carving out of the congressional coverage which we have said exists.

You’re carving out committee hearings.

You think that is an adjudicative function?

Paul Morris:

It may… it may be, it may not be.

I think it would turn on–

Antonin Scalia:

I know.

Which do you say?

Paul Morris:

–the individual facts.

Well, I think it could be, and I think the argument could be made that it is, but–

Antonin Scalia:

We’ll have to litigate this in the future, right–

Paul Morris:

–Yes.

Antonin Scalia:

–and try to figure out where this line goes?

Paul Morris:

Yes.

William H. Rehnquist:

There’s simply nothing in the statute, though, that suggests any sort of a judicial function exception for anything.

The courts who have reached that result have tried to do it on the basis of comparing it with the coverage that Bramblett actually said extended to the legislative function, but without Bramblett, I don’t think there ever would have been any effort to find a judicial exception.

Paul Morris:

Well, without Bramblett I think the argument would have prevailed in the courts of appeals that Bramblett–

William H. Rehnquist:

Without Bramblett you might well have come up and said this applies to the executive department only, but you would never say there’s a judicial exception that extends through the executive department as well as excluding legislative and judiciary.

Paul Morris:

–Well, the judicial function exception, of course, is an outgrowth of the Bramblett decision, and it flowed from Morgan’s discussion of traditional trial tactics and how those should not be within the ambit of 1001, and that–

Sandra Day O’Connor:

Well, Mr. Morris, let me ask you in this case whether the false statements that were made in the course of the bankruptcy proceeding could be punished under any other provision of Federal law?

Paul Morris:

–Arguably, yes.

They could have been punished as perhaps obstruction of justice, as contempt.

Certainly the discovery response would subject it to the contempt powers of the bankruptcy judge if there had been a violation of an order.

Certainly Rules 11 and Rules 37.

Rule 11 sanctions against the parties or the litigants, and Rule 37 sanctions for abuse of the discovery process.

Sandra Day O’Connor:

The perjury statute wouldn’t cover it, because they weren’t under oath?

Paul Morris:

That’s correct, and therein lies one of the anomalies of the Government’s interpretation of 1001.

Perjury, which carries a greater penalty than 1001, would create the anomaly that a person who makes a false statement in court not under oath would be subjected to a greater punishment than a person who is under oath and makes a false statement, and that’s the type of unintended consequence that the courts of appeals were concerned with in carving out the judicial function exception, in particular coming to the conclusion that 1001 is not a boundless statute, and Congress never intended it to be such.

John Paul Stevens:

Mr. Morris, do you know if this statute has been applied to unsworn statements in committee hearings that turn out to be false?

Paul Morris:

No, I do not, Your Honor.

The petitioner’s statements, we would submit, if the Court is going to approve the judicial function exception, squarely falls within the adjudicative functions of the Court, and if the exception is approved, he should prevail.

There is also a related private civil–

Ruth Bader Ginsburg:

Mr. Morris, I just wanted to make sure I understood you correctly.

Did you mean to say that perjury is punished less severely than a false statement under–

Paul Morris:

–Well, my understanding is that the perjury statute carries 5 years and $2,000, and then a violation of 1001 carries 5 years and $10,000.

Antonin Scalia:

–You said it the other way around.

Paul Morris:

Oh, I’m sorry.

I misspoke.

I apologize.

The petitioner is also seeking relief under the private civil litigation exception, as it is so-called, from the Second Circuit’s D’Amato case, which was also adopted by the Eleventh Circuit in London, and those cases held that 1001 does not apply to civil litigation where the Government is not a party.

The rationale of those decisions applies here as well.

And unless there are further questions, I will reserve the balance of my time for rebuttal.

William H. Rehnquist:

Very well, Mr. Morris.

Mr. Bress, we’ll hear from you.

Richard P. Bress:

Mr. Chief Justice, and may it please the Court:

There is no judicial function exception to section 1001.

The so-called judicial function exception conflicts with the plain text of the statute.

It has no basis in the history of the statute or in this Court’s decisions, and it is not needed to protect constitutional rights or traditional trial tactics.

Before I get to those points, however, I recognize that petitioner now raises a broader challenge not raised in his petition for certiorari.

Petitioner now says that Bramblett was incorrectly decided and that section 1001 does not apply to false statements made to the courts.

In Bramblett, this Court held squarely that section 1001 is not limited to false statements made to the executive branch, but that the term “department” extends broadly and includes all three branches of Government.

John Paul Stevens:

Yes, but isn’t it true that the history of this statute was one of false claims against the Government, usually monetary claims, and the particular false statement in Bramblett was in support of a monetary claim made to the disbursing officer, so isn’t it conceivable that one could say the holding goes only to those departments of the judiciary or the legislature that perform similar functions to the departments in the executive branch that process claims against the Government?

Richard P. Bress:

No, Justice Stevens, and primarily for two reasons.

First, the Court expressly declined to deny on the nature of the Government function being carried out in Bramblett.

It was suggested, and the Court declined to rely on it.

Secondly–

John Paul Stevens:

I’m no sure the opinion… that’s a correct reading of the opinion.

Where did… how do you… what do you rely on for that statement?

Richard P. Bress:

–In Bramblett it was argued, and the Court noted, that the matter involved… and this is on page 509 of the opinion… was within the jurisdiction of the Treasury Department, and the misstatements could be taken, therefore, to be misstatements to the Treasury, because the money would come out of the Treasury.

That was basically a disbursement rationale.

In other words, because the false statement would take money from the Government, it is like false claims, and the Court should approve it on that basis.

John Paul Stevens:

Yes, but that… that’s what you rely on for saying that it was… you think the rationale would apply to an unsworn statement at a committee hearing?

Richard P. Bress:

Yes, and in fact the District of Columbia Circuit held as much in the Poindexter case.

The statutory reason for that interpretation is that the original false statement provision only went to false statements made to collect payment on false claims.

That statute was amended, broadened to include false statements to cheat, defraud, or swindle the Government.

When this Court in the Cohn decision interpreted that phrase still only to reach monetary claims, the Court deleted the purpose element entirely and substituted the “in any matter” clause.

That clause was interpreted later–

John Paul Stevens:

The Congress did.

Richard P. Bress:

–Congress did.

I’m sorry.

That clause was interpreted later by the Court in United States v. Gilliland to remove the restriction to monetary frauds and to broaden the statute to false statements that might pervert any authorized Government function.

That lack of a functional distinction was echoed by this Court in United States v. Rodgers, where the Court rejected the notion that false statements to an investigatory agency… in that case, it was the FBI and the Secret Service… would not come within the scope of section 1001.

The Court held in that case that section 1001 does not make functional distinctions, and that any matter means any matter.

Antonin Scalia:

Mr. Bress, suppose I think that the case was… Bramblett was incorrectly decided.

Antonin Scalia:

It would not be an unusual phenomenon for a court to narrow a bad prior holding in such a way that you’re not overruling the case, but you nonetheless do not follow the full rationale of the case.

So why couldn’t we simply say, if we think that Bramblett was incorrectly decided that “department” doesn’t mean Congress, why couldn’t we say, we will go along with Bramblett insofar as it has been applied to Congress, but we won’t take the further step, which would be logical, if you believe Bramblett was right, of extending it to the judiciary as well?

What would be so terrible about that?

Richard P. Bress:

Well, if the Court took the approach of only applying Bramblett to Congress, then the Court would essentially be overturning the overarching rationale of the case.

Antonin Scalia:

Sure, but I’m saying, I’m under the impression that’s quite a common thing.

It’s how the common law courts develop their law.

You regard the holding of an earlier case that was a stinker of a case to be a very narrow holding, regardless of what it said.

What it held… what it held was that Congress is within the meaning of “department”.

It said that the… I mean, implied the judiciary was as well, but that was… you know, we don’t have to follow that.

Richard P. Bress:

That approach we believe would suffer the same faults as overturning the case in its entirety, in the following sense.

The Court’s special regard for statutory stare decisis is based in part on Congress’ ability, if it does not like the holding that the Court has with respect to a statute, to change the statute in reaction to that holding.

Congress did not change or amend section 1001 in response to this Court’s decision in Bramblett, and in the 40 years since Bramblett was decided, this Court and the lower Federal courts have based many decisions on this Court’s interpretation of the statutory language in Bramblett.

For example, in Yermian and in Rodgers, this Court based decisions on Bramblett’s holding that the 1934 amendment was not intended to narrow the scope of the statute.

In addition, Federal prosecutors have for decades relied on this Court’s interpretation of the statute in Bramblett to prosecute under section 1001 false statements made to the courts.

For the Court to change course and essentially–

John Paul Stevens:

Yes, but you’re asking us to change course on a lot of courts of appeals who have thought this was not really what was intended and have developed this kind of ironic judicial exception.

Their stare decisis argument cuts both ways, is what I’m suggesting, because there is law out there that does support this exception.

Richard P. Bress:

–There’s law out there that supports the exception.

We would–

John Paul Stevens:

By several courts.

Richard P. Bress:

–We would contend that that law is not based on the text of the statute, not based on any discernible history, and not based on any legitimate policy rationale.

John Paul Stevens:

Well, can’t one read the definition of “department”, which says it means the executive department unless the context reads otherwise, and couldn’t one say the context does indicate otherwise when there’s a monetary claim against another branch of the Government, such as the disbursing officer of the legislature, or one of our disbursing officers… that’s a similar claim.

You could say that context indicates you ought to treat those legislative and judicial functions as departments for the purpose of this statute.

Richard P. Bress:

After the statute was amended in ’34 and in light of this Court’s holding in Gilliland, we do not agree that you can read context to give any special sort of a notice to false statements made in connection with false claims.

Whatever monetary attachment the false statement provision once had, it no longer has.

The context indicating otherwise was interpreted by this Court in Bramblett primarily to take account of the evolution of the statute over time.

David H. Souter:

Does the context refer literally only to the words of the statute, or does the context include the historical understanding behind those words?

For example, if you are going to apply it to the judicial branch across the board, then I suppose in theory a lawyer making a closing argument who allegedly misrepresents facts is going to be indictable under this statute.

Would you agree?

Richard P. Bress:

If the lawyer intentionally misrepresents facts, the lawyer may be prosecutable under section 1001.

Richard P. Bress:

However, in a closing statement, for example, the lawyer is generally not taken to be stating facts that he believes exist, but rather to be summing up what has gone on during the trial.

David H. Souter:

Well, let’s say that’s one way… there’s a difference, though, between a closing argument and the reference to facts there, and the factual implications of entering a plea, which in fact–

Richard P. Bress:

Yes.

David H. Souter:

–is the distinction that you recognize.

Well, when we bear in mind the fact that historically a lawyer who is claimed to have made a misrepresentation in closing argument is usually dealt with by an objection, a statement by the judge saying to the jury, take your own recollection of the evidence, this is just argument, you don’t have to accept his statement of the fact, that is for you to decide.

Isn’t that part of the context in which we should determine whether the statute in fact applies, the context here being that there is a settled practice for dealing with these problems, and it would be rather startling to assume that suddenly this settled practice had been overlaid by a… the creation of an indictable offense.

Would that be a proper contextual argument as you are suggesting we should consider context, or as the statute thinks we should consider context?

Richard P. Bress:

It might be a proper contextual argument, except that we would take the position that the overlap of section 1001 on top of, as you say, more specific context… for example, this is… the trial context exists not only in the judicial branch but also in the legislature and also in the executive branch.

David H. Souter:

So you’re saying if you do what I was exploring, in fact you are going to read out a great deal of the ostensible application of the statute?

Richard P. Bress:

That is correct.

David H. Souter:

So we shouldn’t do what I was suggesting?

Richard P. Bress:

That is my position.

David H. Souter:

Oh, is that your position?

[Laughter]

Richard P. Bress:

To be more specific, section 1001 does overlap many more specific prohibitions and ways of dealing with things in the judicial branch and outside of it.

In the judicial branch, it overlaps perjury as has been suggested.

Obstruction also overlaps perjury, for that matter.

Outside of the judicial context… and this is an important point, we believe… section 1001 also overlaps perjury there, because perjury applies to agency hearings and false verifications.

Moreover, section 1001 overlaps with many more specific false statement prohibitions that exist outside of the judicial branch, mostly in the executive branch.

If section 1001 were read not to apply where a more specific prohibition applies, you would cut the guts out of the statute, which was intended to be a broad statute.

Moreover, as a general matter, this Court has never taken the position that criminal statutes ought to be interpreted narrowly to minimize or eliminate areas of overlap.

That would, in our view, conflict with the strong presumption against implied repeal.

Stephen G. Breyer:

You are supposed to interpret an ambiguous statute in the direction of lenity, and why isn’t it ambiguous?

That is to say, where the term “department” means executive department unless the context shows the term is intended to describe executive, legislative, or judicial, and the context here would seem ambiguous in respect to judicial, wouldn’t it?

If you look at the function of the judiciary, the percentage of instances in which people make statements in order to get money out of the Government I would imagine is much smaller than in the executive or the legislative branches.

That is where the statute was aimed.

But why isn’t it at least ambiguous, given all of the considerations that have been brought up, and then once it’s ambiguous, why can’t you say, yes, executive, legislative, but not judicial because the context doesn’t call for judicial?

Richard P. Bress:

Well, firstly, in terms of the context, we disagree that the context is ambiguous, particularly if you compare it with the legislative context.

I don’t believe there is any distinction you can make–

Stephen G. Breyer:

Well, I suppose the distinction might be that people very often go to Congress… very often… in order to get money from the United States Government.

Stephen G. Breyer:

When they come into court, the instances of their trying to get money from the United States Government, while significant, is smaller, significantly smaller than the instances in which they’re trying to get money from Congress or the executive branch.

Richard P. Bress:

–The 1934 amendment to the act was passed mostly at the urging of the Department of the Interior, which was concerned about falsifications of statements made in connection with hot oil shipments.

Those false statements were not made in any respect to take money out of the Federal Government.

The amendment to the statute at that point, and I can’t emphasize this too much, was meant to take out the need to prove monetary fraud, and rather to reach false statements that might pervert any authorized Government function.

To view otherwise would be contrary to this Court’s decision in Rodgers.

Stephen G. Breyer:

So when I go back to the legislative history I would find that money has nothing to do with this statute, that in fact what Congress wanted to do was to say, if you make a false statement to the postman, you say, hey, I used to live on Apple Street… indictable offense, even though it’s not under oath, because now he may go to the wrong place?

That’s what Congress intended to do?

Richard P. Bress:

The limitation that you are looking for, we believe, would be provided by the materiality requirement in section 1001.

Materiality as defined by this Court in Kunjes, which itself relied on the District of Columbia Circuit’s decision in Wein–

Stephen G. Breyer:

Because the postman will go to the wrong address.

It’s material.

Extra work.

Richard P. Bress:

–Well, I defer to the Court’s decision on that matter, but I… nonetheless, the point remains that in 1934 Congress did intend to reach nonmonetary fraud.

The amendment in 1934 completely removed the need to prove on the false statement was geared to take money from the Federal Government.

Ruth Bader Ginsburg:

Mr. Bress, even if one accepts that the concern is making false statements to the Government, what about the distinction that the Second Circuit made in D’Amato that Mr. Morris brought up at the end of his argument?

That is, at lease excise civil litigation between private parties.

Unlike agency adjudication, where one of the parties is the Government, here we have no Government interests being adjudicated, only private parties.

Why shouldn’t that be taken out?

Richard P. Bress:

In our view, the decision of the Second Circuit in D’Amato was basically a different way of saying that the Second Circuit didn’t agree with Bramblett in the first place, because the Second Circuit was essentially saying that a lie in a judicial context is only going to fall within 1001 if the lie was essentially to the Government as executive on the other side of the case, that the lie to the court, which might pervert the court’s decisionmaking functions, would not fall within the statute.

We believe that that holding is fundamentally inconsistent with Bramblett, and that perversion of judicial functions, just as perversion of executive or legislative, falls within the statute.

Antonin Scalia:

Mr. Bress, I’d feel better if I thought Bramblett was right.

Can you persuade me that Bramblett was right, then I wouldn’t have all these problems?

Was it, indeed, correct?

Richard P. Bress:

We believe that Bramblett was correctly decided.

The Court in Bramblett was influenced heavily by looking back at the legislative… or, the history of the statute through time.

Antonin Scalia:

I knew you were going to say that.

Richard P. Bress:

I was trying not to say, legislative history.

[Laughter]

John Paul Stevens:

But in Bramblett the Court said that Congress could not have intended to leave frauds such as this without penalty, and this is with a characteristic false claim just like you usually make to the executive branch.

Why couldn’t one say, well, Bramblett is kind of shaky, and that it’s certainly sound to say it applies to claims like this in the judicial and legislative branch, but we don’t have to read it as expansively as you suggest and still… we’d still be faithful to the holding?

Richard P. Bress:

If that were the only, or the primary rationale for the decision in Bramblett–

John Paul Stevens:

It’s not the primary rationale, but it’s the holding.

Richard P. Bress:

–Well–

John Paul Stevens:

The holding is that Congress didn’t intend frauds such as this, the claim for money made to the disbursing officer, to be uncovered by the statute.

Richard P. Bress:

–Justice Stevens, we take the holding in Bramblett to be that section 1001 was not intended to be restricted to the executive branch but, rather, reach the legislative and judicial branches.

John Paul Stevens:

That’s correct, but it doesn’t necessary mean that it covers everything that happens in the judicial and legislative branches.

Richard P. Bress:

Yes, but the functional distinction that I believe you were making would be inconsistent with this Court’s decision in Rodgers, because in Rodgers–

John Paul Stevens:

But Rodgers was an executive department case.

You could say you have open season in the… across the executive department.

When you get out of the normal meaning of department, which is executive, then it’s fraud such as this which Bramblett decided.

Richard P. Bress:

–But then I believe you are caught by Bramblett’s other hook, which is that the 1934 amendment was not intended to restrict the false statements to the executive branch.

Bramblett recognized that before 1934 the statute applied to false statements made to any of the three branches.

John Paul Stevens:

But those were in support of false claims at that time.

Richard P. Bress:

Yes, and–

John Paul Stevens:

And not–

Richard P. Bress:

–what the Court decided in Bramblett was that Congress in 1934 intended to broaden the types of false claims that could be prosecutable without narrowing the false claims to any particular branch of Government.

John Paul Stevens:

–No, but the broadening could have covered the normal meaning of department, which is the executive, and also the old-fashioned meaning for legislative and judicial frauds.

Richard P. Bress:

The Court defined “department” in Bramblett to include all three, and did not purport to make a distinction based on the function that that department was then performing.

William H. Rehnquist:

Gilliland is not a false claim statute, is it?

It’s a… Gilliland is not anybody making a claim against the Government.

That’s the hot oil reports.

Richard P. Bress:

That’s correct, Your Honor.

Gilliland made a point, in fact, of holding that in order… of noting that in order to reach its conclusion it had to hold that the statute was not limited to false claims.

William H. Rehnquist:

And that was decided in 1941.

Richard P. Bress:

Yes, only 7 years after the 1934 amendments, and notably 7 years before the 1948 enactment of the definition of department in section 6.

Anthony M. Kennedy:

I take it the Government argued in Bramblett that ultimately the Treasury would disburse these moneys, and so there was fraud upon the executive branch in any event.

Richard P. Bress:

The Government had a narrower argument than argument today in Bramblett.

The Government argued that the disbursing office of Congress was an authority within the meaning of the term “agency” in the statute.

Anthony M. Kennedy:

So under the Government’s position, this conduct could have been punishable without the expansive reading that the Supreme Court gave in Bramblett?

Richard P. Bress:

That’s correct.

Richard P. Bress:

That is correct.

I’d like to turn now, if I may, to the question or the issue that was presented in this case, the existence of the judicial function exception to the statute.

As petitioner has conceded, there is no textual basis for that exception.

There’s no basis in the legislative evolution of the statute, and there’s no basis in this Court’s decisions.

The exception, therefore, relies entirely on policy.

Petitioner says that a judicial function exception to the statute is necessary to protect constitutional rights, or traditional trial tactics.

The Constitution and this country’s traditions, however, have never protected a right knowingly to lie to the courts.

It is simply not the case that section 1001 will impede a plea of not guilty.

It is… a plea of not guilty is not a statement of factual innocence.

It is similarly not the case that section 1001 will interfere with the right against self-incrimination, because the right to remain silent does not include the right to lie.

It is also more broadly the case that section 1001 won’t unfairly hinder defense counsel.

Defense counsel may still zealously challenge the probity or sufficiency of the Government’s case without resorting to knowing falsehoods.

As this Court held in Nix v. Whiteside, the right to effective assistance of counsel does not include the right to cooperation of counsel in perjury.

David H. Souter:

Isn’t one of the things that we should worry about is not what theoretically would be covered by this, but by the sort of interorum effect of the statute if it is going to have the meaning, the breadth that you give it?

Take my example a moment ago of the lawyer who becomes too exuberant in final argument.

I suppose the… what we ought to worry about is not merely, and perhaps not at all, about the lawyer who just flatly lies to the jury in a patent way, but the lawyer who is close to the edge in a case against the Government and then finds himself next week being indicted with 6 months of litigation facing criminal penalties to follow.

Isn’t that a reason for trying to trim the sails, and isn’t the interorum effect perhaps a better reason than merely a solicitude for letting the judiciary take care of its own problems?

Richard P. Bress:

I’ve got a number of responses.

I guess first of all there’s no reason to confine that argument to the judicial branch.

People are represented by attorneys in front of the legislature and certainly in lots of agency instances, so that argument would not support an argument… would not support a theory that simply excepted judicial functions in courts.

Secondly, the fear here, which is of prosecutorial overreaching, is not backed up by any statistics of Justice Department prosecutions.

It’s purely hypothetical.

David H. Souter:

Well, that’s because they don’t have the decision of this case as you want it handed down yet.

Once they get it, they may be a little bit more aggressive.

Richard P. Bress:

We don’t believe there’s much reason to think so, because obstruction of justice under 1503 could currently be a basis for making such charges against a lawyer who has knowingly made false statements in courts.

Anthony M. Kennedy:

Do any of the separate States have statutes that specifically punish misrepresentations in judicial proceedings?

Is there any State law jurisprudence?

Richard P. Bress:

Other than perjury, Your Honor?

Anthony M. Kennedy:

Yes.

Richard P. Bress:

I do not know.

John Paul Stevens:

May I also ask you, going back to the legislature… you cited the Poindexter case as one.

Has the Government ever prosecuted anyone other than Admiral Poindexter for false statements in congressional hearings?

Do you know?

Richard P. Bress:

I don’t know–

John Paul Stevens:

Because there must have been a lot of them over the two odd ones.

[Laughter]

I think Richard Kleindienst was prosecuted under the misdemeanor section of this statute.

Of 1001.

Of course, that is specifically covered by 18 U.S.C. 1505.

Richard P. Bress:

–The obstruction statute for Congress?

Anthony M. Kennedy:

Yes, and that statute has two parts, as I recall.

It prohibits a misrepresentation to a department, and then it has a specific clause for congressional committees, which indicates to me that “department” does not include the Congress unless the statute specifically says so.

Richard P. Bress:

In that statute that may be so.

We agree that 1505 would cover false statements made to Congress.

I will note, however, that the District of Columbia Circuit in Poindexter did find otherwise, so it’s not completely clear.

Stephen G. Breyer:

Is that a general view of your office, that those false statements that are prosecutable under 1001 in respect to a judicial or congressional proceeding must be such as they would support an obstruction of justice conviction?

Richard P. Bress:

I think it would generally be the case.

I don’t–

Stephen G. Breyer:

Is it absolutely the case?

That is to say, does it, or does it not, do you think, extend beyond whatever the scope is of obstruction of justice?

Richard P. Bress:

–Well, obstruction of justice includes the term “corruptly”, and so the question there would be whether “corruptly” adds anything to the term “intentionally”.

By its plain language, it may.

Stephen G. Breyer:

This may go well beyond, then, any kind of a false statement at all made to a clerk of a court, or what about a prisoner who writes a letter about prison conditions, knowing it will be attached, though unsworn?

Richard P. Bress:

If it’s a–

Stephen G. Breyer:

What about the… et cetera.

Richard P. Bress:

–If it’s an intentional false statement of fact, it would be prosecutable under section 1001.

The Court has recognized that the criminal law has not grown by any sort of neat design, but in many cases, and especially in this area, more by accretion.

Stephen G. Breyer:

Then a prisoner who says, after all, the food has… you know, has 90,00 different complaints, and some of them are not true.

Unsworn, in a letter attached to the… that’s all covered?

Richard P. Bress:

Intentional false statement would be covered so long as it was material, and the decision as to the breadth of 1001, as this Court pointed out in Rodgers, is not a decision for this Court, but is rather a decision for Congress.

William H. Rehnquist:

What if the prisoner made a false statement to the warden?

That would be covered under the narrowest reading of Bramblett, wouldn’t it, part of the executive branch?

Richard P. Bress:

It certainly would, Your Honor.

If there are no more questions, my argument is concluded.

William H. Rehnquist:

Very well, Mr. Bress.

Mr. Morris, you have 15 minutes remaining.

Paul Morris:

Thank you, Your Honor.

The breadth of the statute which the Government is advancing today is truly extraordinary, and perhaps what all lawyers and litigants must be concerned about if the interpretation advanced by the Government is adopted by the Court is what happens if they lose a case in a Federal civil court proceeding?

Arguably, statements can be obtained during the course of those proceedings in unsworn pleadings or oral representations to a court or jury that would constitute probable cause sufficient for a charge of 1001.

William H. Rehnquist:

Are you suggesting the consequences to the losing lawyer are different in a civil proceeding than in a criminal proceeding?

Paul Morris:

There are other implications involved in the criminal proceedings, namely the constitutional implications that are not involved in the civil proceedings, and it would seem to me that the consequences are much more far-reaching in civil because of the absence of those protections.

William H. Rehnquist:

And how about lawyers who lose cases before administrative law judges in the executive branches?

Paul Morris:

It would seem to me, under the Government’s interpretation, that 1001 applies to those situations as well, but–

William H. Rehnquist:

But under your interpretation it would, too, would it not?

Paul Morris:

–Yes.

William H. Rehnquist:

So I mean we’ve… lawyers are going to have something to worry about no matter how this case comes out.

Paul Morris:

Well, that brings us back to the Government’s discussion of Bramblett.

Antonin Scalia:

Why are you worrying about losing lawyers?

I’d be more worried if I were a winning lawyer, winning against the Government.

Don’t you think that’s the real… that’s the real worry?

Paul Morris:

Certainly an equally and perhaps more compelling grave concern would be the lawyers and litigants in that situation as well, so the breadth that’s being read into this statute by the Government cuts virtually cross the board, and how can it reasonably be argued that Congress ever intended that 1001 would have such a reach into not just criminal litigation, but into civil litigation?

What happens when an attorney has a client appear in his office on, say, the eleventh hour of a statute of limitations and is seeking the filing of a civil complaint?

Under the Government’s view of 1001, that attorney has to think twice about filing that complaint.

That attorney has to be concerned where the attorney is not that much concerned today, because today under Rule–

Antonin Scalia:

He just doesn’t have to lie, that’s all.

He just doesn’t have to lie.

Paul Morris:

–But the realities of the situation–

Antonin Scalia:

The reality is, it’s a criminal prosecution.

It’s not a more-likely-than-not kind of problem.

You have to get a jury to unanimously decide that he was lying.

Paul Morris:

–But what happens, Your Honor, when the… that client who comes to that lawyer at the eleventh hour is making misrepresentations that wind up in that complaint and the lawyer doesn’t find that out till after it’s filed?

Under the present state of law–

Sandra Day O’Connor:

Well, it’s not based on negligence, it’s based on a knowing and wilful falsification.

Paul Morris:

–Which… which should once we look at the facts of this case, afford the Court small consolation.

If we look at the discovery response statement that was indicted and convicted in this case, what was knowingly and false that protected this particular petitioner that’s going to afford such great protections in future cases that come along before the U.S. Attorney’s Offices throughout the United States, and the answer is, not much at all.

We have in this particular case the discovery response, oh, I turned those over to the prior successor, and then that’s litigated in the bankruptcy court, and the documents are ultimately turned over after the bankruptcy judge issues an order to turn them over.

I think most people would be startled to come to the conclusion that that was deemed knowingly false, indictable, charged and convicted.

William H. Rehnquist:

But that’s a finding of fact that can’t be challenged here.

Paul Morris:

But it shows with what ease, Your Honor–

William H. Rehnquist:

Well, this petitioner here did knowingly and intentionally fail to turn something over.

Paul Morris:

–Well, we’re assuming that for the sake of this case, of course.

William H. Rehnquist:

Well, you assume it because a jury found it unanimously in a criminal case.

Paul Morris:

Correct, but that demonstrates the ease with which those terms can be interpreted and–

David H. Souter:

Well, I don’t know that it does.

I mean, it certainly doesn’t back up the point that you were making a moment ago, in which you were concerned about the negligent lawyer.

This was the person who either turned or didn’t turn the documents over.

He said he did.

In fact, he was found not to have done so.

That’s a pretty far cry from the lawyer that you were concerned with in your hypothetical a moment ago, who simply has a client misrepresent something to him and is guilty, I suppose, of nothing more than negligence if there isn’t time to check it out before the deadline.

Paul Morris:

–Yes, but some of the cases where it is easier to draw the line, and if this Court views this as one of those such cases, adopting the Government’s argument, we are going to necessarily lead to those grayer areas which necessarily impact upon the every day practice of law, and every–

Ruth Bader Ginsburg:

If you want to carve out the judiciary, then do you have a problem in this case, because the bankruptcy judge is not an Article III judge?

Paul Morris:

–No, Your Honor, my under… although that issue was not briefed and the Government has never challenged that the bankruptcy judge is part of a court, it’s my understanding that the bankruptcy court is a division of the United States district courts, and that… and it was never contested that this was a judicial proceeding.

Antonin Scalia:

What is so sacrosanct about lawyers?

They’re businessmen who all the time have to file responses to executive branch inquiries about this, that, or the other things, all sorts of regulations, and if they are found wilfully to have misrepresented, they’re subject to 1001, so lawyers are being treated no differently from anybody else.

Why do we establish a special rule for lawyers?

Paul Morris:

It’s not that, Your Honor, that lawyers are so sacrosanct or that the litigants are, or that we’re asking for an exception to be carved out of 1001 for only their protection.

What we’re asking is that the reading of 1001 that’s consistent with Congress’ intent be applied to this statute, and Congress never intended that every unsworn misrepresentation made in a Federal court would subject the person who makes that statement to a 1001–

Antonin Scalia:

Although you’re perfectly willing to say that they assume that every unsworn representation made by any businessman when he fills out, you know, page 2003 of some form that a Federal agency has sent to him… that Congress intended, but not that a lawyer should be held to honesty as well.

Paul Morris:

–Well, we… of course–

Antonin Scalia:

It isn’t self-evident to me, that’s all I can say.

Antonin Scalia:

You must say that Congress did intend that the exact same sort of representations before an administrative adjudication in one of the agencies, it did intend the strictures of this statute to apply there, but it didn’t to a judicial proceeding, and yet the earmarks of one are very similar to the earmarks of the other.

Paul Morris:

–Well, we submit that the Government’s contention that disapproving or limiting Bramblett is going to cause a change of conduct, or a change of the course of the law, whether it’s dramatic or otherwise, is really not borne out by what has happened since the Morgan decision in 1962.

In fact, the interpretation that we are seeking of 1001 in no way would constrain the prosecution.

In fact, even the United States Attorneys Manual advises against using 1001 in situations such as these, where the statements are made in a judicial proceeding.

And returning to the context argument, the context of the word “department”, under this Court’s decision in Roland, context is limited to the text of the statute, and what the Government is relying upon here is its view of the evolution of the statute, which in essence is another way of saying the legislative history of the statute.

It is going outside of what Congress intended.

William H. Rehnquist:

Well, but it’s relying on Bramblett, which is a decision of this Court, a statutory decision.

Paul Morris:

Which we are seeking limitation of–

William H. Rehnquist:

Yes.

Paul Morris:

–of course, in order to be consistent in our argument.

Anthony M. Kennedy:

Do you happen to know, counsel, if any of the separate States have enacted and enforced statutes of the kind that we’re considering here–

Paul Morris:

My–

Anthony M. Kennedy:

–particularly against lawyers in judicial proceedings?

Paul Morris:

–My distant recollection in researching the case was that California had a similar case, a similar statute, and there might have been one or two other States, but I found no decisions applying those statutes to the judicial context.

Anthony M. Kennedy:

So we can say, based on that research, and we can check it out, of course, ourselves, that the States have not found it necessary to police the legal profession by criminal statutes of this kind?

Paul Morris:

That is correct, Your Honor.

It is indeed–

William H. Rehnquist:

Is your client a member of the legal profession?

Paul Morris:

–No.

No, Your Honor, he’s a litigant.

William H. Rehnquist:

Yes.

Paul Morris:

And… but the same considerations that will apply to the legal professional will apply to the litigants, because it is the statements of the lawyers that are so often–

William H. Rehnquist:

Yes, but–

Paul Morris:

–factual assertions in court.

William H. Rehnquist:

–what we have here is not any statement of any lawyer, but a statement of a litigant.

Paul Morris:

Correct, but we can rest assured that if the Government’s interpretation is adopted, it will be extended to misrepresentations made in court–

William H. Rehnquist:

Well, why should we rest assured that way?

Bramblett has been on the books for 40 years.

Paul Morris:

–But the Government’s reading of 1001 is not limited to litigants.

It’s limited… it’s not limited to litigants.

Paul Morris:

It applies to any person who makes any misrepresentation in the Federal court.

William H. Rehnquist:

And that’s true now, even under your theory, in the executive branch.

Any… a lawyer, bless their souls, even if they come in and make misrepresentations to the executive branch, is held liable under 1001.

Paul Morris:

And if that’s a choice that Congress made in drafting the statute, then that’s Congress’ doing.

It’s not the–

William H. Rehnquist:

Yes, but Bramblett said it wasn’t the choice that Congress made.

Paul Morris:

–And–

William H. Rehnquist:

Bramblett said it goes beyond department.

Paul Morris:

–Yes, and we, of course, are arguing to the contrary, and the crux of our argument is that at the very least, 1001 raises an ambiguity as to its scope, certainly within the meaning of the term “department”, and we request reversal of the decision below, based upon resolution of that ambiguity, in favor of the accused.

William H. Rehnquist:

Thank you, Mr. Morris.

The case is submitted.