Miami, FL | July 10, 2024 – Partner Matthew DellaBetta provided the Daily Business Review with commentary on the Supreme Court’s recent decision in Snyder v. United States. The article is available at the following link: https://www.law.com/dailybusinessreview/2024/07/10/snyder-decision-re-emphasizes-supreme-courts-federalism-concerns-in-federal-prosecutions/
‘Snyder’ Decision Re-Emphasizes Supreme Court’s Federalism Concerns in Federal Prosecutions
The U.S. Supreme Court decided that issue in Snyder v. United States, holding that Section 666 only criminalizes bribes, and not the acceptance of gratuities, by state and local officials. This decision further narrows the power of federal prosecutors to pursue corruption cases.
July 10, 2024
Federal law criminalizes the receipt of bribes, as well as the receipt of gratuities, by federal public officials. See 18 U.S.C. Sections 201(b)-(c). For years, however, federal courts were divided on whether the analogue statute for state and local officials, 18 U.S.C. Section 666, prohibited gratuities. Last week, the U.S. Supreme Court decided that issue in Snyder v. United States, holding that Section 666 only criminalizes bribes, and not the acceptance of gratuities, by state and local officials. This decision further narrows the power of federal prosecutors to pursue corruption cases. But the Supreme Court’s ruling also re-emphasizes the court’s concern over federal criminal laws interfering with traditional areas of state governance.
Section 666 makes it a crime for most state and local officials to “corruptly” solicit, accept, or agree to accept “anything of value … intending to be influenced or rewarded in connection with” any official business or transaction worth $5,000 or more. Notably, Section 666 does not use the terms bribe or gratuity, which left the court to determine whether the statute prohibited both types of conduct. Although these concepts are similar, the law differentiates between bribes and gratuities. A bribe is a payment meant to secure an official act by a public official, whereas a gratuity is a payment given to the official after an official act, generally as a token of appreciation.
Snyder involved the conviction of James Snyder, the former major of Portage, Indiana. In 2013, Portage, a town of around 38,000, needed garbage trucks. Snyder hand-picked a close friend with no experience handling public bids to run the bidding process. Snyder’s friend then tailored the bid request to call for the precise vehicle specifications of the trucks that a local company sold, knowing that this would favor the company’s bid. Unsurprisingly, the local company won the bid, and Portage ended up awarding over a million dollars in contracts to the company. The following year, the company cut a $13,000 check to Snyder, which Snyder described as payment for consulting work for the company. Although federal prosecutors certainly suspected it, they did not charge Snyder with accepting a bribe for steering the truck contracts to the local company. Instead, prosecutors brought a case under 18 U.S.C. Section 666(a)(1)(B), alleging that Snyder accepted an illegal gratuity.
Justice Brett Kavanaugh’s 6-3 majority opinion held that the text of Section 666, especially considering amendments to the statute, demonstrates that the statute does not cover gratuities. This means that going forward, the timing of a payment to a state or local public official will likely dictate the viability of a corruption prosecution absent evidence of a quid-pro-quo agreement. Because proving the existence of these types of agreements is often difficult, Snyder limits the number of corruption cases that federal prosecutors will bring.
On a broader level, the court’s reasoning in Snyder demonstrates the court’s continuing concern that federal prosecutors may interfere with traditional state governance. The breakdown of the court was also notable in this case. The court did not end its analysis of Section 666 with the text of the statute, and instead offered six reasons to interpret the statute as only prohibiting bribes.
Although the court did not identify any of its six reasons as controlling, the decision gives particular emphasis to federalism concerns. Throughout the opinion, the court focused on the different ways that states and local governments have regulated gratuities for public officials. For example, some states criminalize gratuities altogether, whereas others restrict them in certain circumstances based on the type of gift or the relationship between the parties. Some states make accepting gifts for official conduct a misdemeanor, while others make it a felony. The court saw the diversity of these laws as proof of the historical regulation of gratuities by state and local governments. For the court, Section 666 improperly displaced this traditional area of state governance by imposing a categorical prohibition on gratuities by public officials.
The court’s focus on federalism will certainly continue to play an important role in its interpretation of criminal statutes in future cases. Last term, the court held in Ciminelli v. United States that federal fraud statutes are limited to the protection of traditional property rights. And earlier this month, the court granted certiorari in Kousisis v. United States. That appeal centers on the fraudulent inducement theory of the federal wire fraud statute. One of the issues implicated by the fraudulent inducement theory is whether it interferes with traditional state concepts of property interests. The court’s reasoning in Snyder, as well as its decision to review Kousisis, forecasts that the court will continue to focus on federalism will in cases to come.
Matthew DellaBetta is a former federal prosecutor and partner at Stumphauzer Kolaya Nadler & Sloman, where he focuses on white-collar criminal defense.
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