KELLY v. UNITED STATES et al.

Certiorari To The United States Court Of Appeals For The Third Circuit

No. 18-1059. Argued January 14, 2020--Decided May 7, 2020

During former New Jersey Governor Chris Christie’s 2013 reelection campaign, his Deputy Chief of Staff, Bridget Anne Kelly, avidly courted Democratic mayors for their endorsements, but Fort Lee’s mayor refused to back the Governor’s campaign. Determined to punish the mayor, Kelly, Port Authority Deputy Executive Director William Baroni, and another Port Authority official, David Wildstein, decided to reduce from three to one the number of lanes long reserved at the George Washington Bridge’s toll plaza for Fort Lee’s morning commuters. To disguise their efforts at political retribution, Wildstein devised a cover story: The lane realignment was for a traffic study. As part of that cover story, the defendants asked Port Authority traffic engineers to collect some numbers about the effect of the changes. At the suggestion of a Port Authority manager, they also agreed to pay an extra toll collector overtime so that Fort Lee’s one remaining lane would not be shut down if the collector on duty needed a break. The lane realignment caused four days of gridlock in Fort Lee, and only ended when the Port Authority’s Executive Director learned of the scheme. Baroni and Kelly were convicted in federal court of wire fraud, fraud on a federally funded program or entity (the Port Authority), and conspiracy to commit each of those crimes. The Third Circuit affirmed.

Held: Because the scheme here did not aim to obtain money or property, Baroni and Kelly could not have violated the federal-program fraud or wire fraud laws.

The federal wire fraud statute makes it a crime to effect (with the use of the wires) “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.” 18 U. S. C. §1343. Similarly, the federal- program fraud statute bars “obtain[ing] by fraud” the “property” (including money) of a federally funded program or entity. §666(a)(1)(A). These statutes are “limited in scope to the protection of property rights,” and do not authorize federal prosecutors to “set[ ] standards of disclosure and good government for local and state officials.” McNally v. United States, 483 U. S. 350, 360. So under either provision, the Government had to show not only that Baroni and Kelly engaged in deception, but that an object of their fraud was money or property. Cleveland v. United States, 531 U. S. 12, 26.

The Government argues that the scheme had the object of obtaining the Port Authority’s money or property in two ways. First, the Government claims that Baroni and Kelly sought to commandeer part of the Bridge itself by taking control of its physical lanes. Second, the Government asserts that the defendants aimed to deprive the Port Authority of the costs of compensating the traffic engineers and back-up toll collectors. For different reasons, neither of these theories can sustain the verdicts.

Baroni’s and Kelly’s realignment of the access lanes was an exercise of regulatory power—a reallocation of the lanes between different groups of drivers. This Court has already held that a scheme to alter such a regulatory choice is not one to take the government’s property. Id., at 23. And while a government’s right to its employees’ time and labor is a property interest, the prosecution must also show that it is an “object of the fraud.” Pasquantino v. United States, 544 U. S. 349, 355. Here, the time and labor of the Port Authority employees were just the implementation costs of the defendants’ scheme to reallocate the Bridge’s lanes—an incidental (even if foreseen) byproduct of their regulatory object. Neither defendant sought to obtain the services that the employees provided. Pp. 6–13.

909 F. 3d 550, reversed and remanded.

Kagan, J., delivered the opinion for a unanimous Court.


United States v. Sineneng-Smith

Certiorari To The United States Court Of Appeals For The Ninth Circuit

No. 19-67. Argued February 25, 2020--Decided May 7, 2020

Respondent Evelyn Sineneng-Smith operated an immigration consulting firm in San Jose, California. She assisted clients working without authorization in the United States to file applications for a labor certification program that once provided a path for aliens to adjust to lawful permanent resident status. Sineneng-Smith knew that her clients could not meet the long-passed statutory application-filing deadline, but she nonetheless charged each client over $6,000, netting more than $3.3 million.

Sineneng-Smith was indicted for multiple violations of 8 U. S. C. §1324(a)(1)(A)(iv) and (B)(i). Those provisions make it a federal felony to “encourag[e] or induc[e] an alien to come to, enter, or reside in the United States, knowing or in reckless disregard of the fact that such coming to, entry, or residence is or will be in violation of law,” §1324(a)(1)(A)(iv), and impose an enhanced penalty if the crime is “done for the purpose of commercial advantage or private financial gain,” §1324(a)(1)(B)(i). In the District Court, she urged that the provisions did not cover her conduct, and if they did, they violated the Petition and Free Speech Clauses of the First Amendment as applied. The District Court rejected her arguments and she was convicted, as relevant here, on two counts under §1324(a)(1)(A)(iv) and (B)(i).

Sineneng-Smith essentially repeated the same arguments on appeal to the Ninth Circuit. Again she asserted a right under the First Amendment to file administrative applications on her clients’ behalf, and she argued that the statute could not constitutionally be applied to her conduct. Instead of adjudicating the case presented by the parties, however, the court named three amici and invited them to brief and argue issues framed by the panel, including a question never raised by Sineneng-Smith: Whether the statute is overbroad under the First Amendment. In accord with the amici’s arguments, the Ninth Circuit held that §1324(a)(1)(A)(iv) is unconstitutionally overbroad.

Held: The Ninth Circuit panel’s drastic departure from the principle of party presentation constituted an abuse of discretion.

The Nation’s adversarial adjudication system follows the principle of party presentation. Greenlaw v. United States, 554 U. S. 237, 243. “In both civil and criminal cases, . . . we rely on the parties to frame the issues for decision and assign to courts the role of neutral arbiter of matters the parties present.” Id., at 243.

That principle forecloses the controlling role the Ninth Circuit took on in this case. No extraordinary circumstances justified the panel’s takeover of the appeal. Sineneng-Smith, represented by competent counsel, had raised a vagueness argument and First Amendment arguments homing in on her own conduct, not that of others. Electing not to address the party-presented controversy, the panel projected that §1324(a)(1)(A)(iv) might cover a wide swath of protected speech, including abstract advocacy and legal advice. It did so even though Sineneng-Smith’s counsel had presented a contrary theory of the case in her briefs and before the District Court. A court is not hidebound by counsel’s precise arguments, but the Ninth Circuit’s radical transformation of this case goes well beyond the pale. On remand, the case is to be reconsidered shorn of the overbreadth inquiry interjected by the appellate panel and bearing a fair resemblance to the case shaped by the parties. Pp. 3–9.

910 F. 3d 461, vacated and remanded.

Ginsburg, J., delivered the opinion for a unanimous Court. Thomas, J., filed a concurring opinion.