LOCATION: New York Board of Education Headquarters
DOCKET NO.: 95-1228
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Eighth Circuit
CITATION: 519 US 482 (1997)
ARGUED: Nov 04, 1996
DECIDED: Feb 26, 1997
James R. Wyrsch - Argued the cause for the respondents
Michael R. Dreeben - Department of Justice, argued the cause for the petitioner
Facts of the case
Jerry E. Wells and Kenneth R. Steele were charged with knowingly making false and "material" statements to a federally insured bank in violation of federal law. At the trial's end, the District Court instructed the jury, at the Government's request, that withholding a "material fact" made a statement or representation false and that materiality of an allegedly false statement was for the judge, not the jury, to determine. Subsequently, the jury treated Wells and Steele's statements as material and convicted them. The U.S. Supreme Court then decided that materiality was a question for the jury to decide. On appeal, Wells and Steele argued that materiality was an element of knowingly making false and "material" statements to a federally insured bank in violation of federal law and it was a question for the jury to decide. The Government then argued materiality was not an element of the crime, so that no harm had been done when the trial judge had dealt with the issue. The Court of Appeals agreed with Wells and Steele, vacated their convictions and sentences, and remanded the case for a new trial.
Is the materiality of falsehood an element of the crime of knowingly making a false statement to a federally insured bank?
Media for United States v. WellsAudio Transcription for Oral Argument - November 04, 1996 in United States v. Wells
Audio Transcription for Opinion Announcement - February 26, 1997 in United States v. Wells
William H. Rehnquist:
The opinion of the Court in No. 95-1228, United States against Wells, will be announced by Justice Souter.
David H. Souter:
This case comes to us on writ of certiorari to the United States Court of Appeals for the Eighth Circuit.
A federal grand jury indicted the respondents, Wells and Steele on charges of violating and conspiring to violate Section 1014 of Title 18 of the U.S. Code which prohibits making certain false statements to an FDIC insured bank.
The indictment alleged that the respondents had provided several banks with false information when they applied for financing to save their financially-troubled company.
At the end of the trial, the District Court told the jury that it did not need to determine whether the respondent’s allegedly false statements were material.
That is, whether the statements were capable of influencing the bank’s decisions but, he, the judge would make that determination.
The jury found the respondents guilty.
The respondents' appealed their conviction to the Eighth Circuit and argued that materiality is an element of Section 1014 and and that they were entitled to have the jury determine whether any false statements were material.
The Court of Appeals agreed and remanded the case for a new trial.
In an opinion filed today with the Clerk of Court, we vacate the judgment of the Court of Appeals and hold that materiality is not an element under Section 1014.
The statute does not explicitly mention materiality but instead provides simply that whoever knowingly makes any false statement or report for the purpose of influencing in any way the action of any bank, the deposits of which are insured by the FDIC upon any application commitment or a loan shall be fined not more than a million dollars or imprisonment and so on.
We find no reason to justify departing from the text and reading materiality element into the statute.
Respondents have made two other arguments which relate to the jury instruction and the indictment.
Because the Respondents did not raise these issues in the brief they submitted to the Eighth Circuit and because the Court of Appeals did not address them in its opinion, we remand the case to allow the Court of Appeals to consider whether the respondents properly raised those issues and address them if it is appropriate.
Justice Stevens has filed a dissenting opinion.