Saturday, January 30, 2021

Third Circuit Case Discussing Difference Between Willfully Element for Tax Crimes (Cheek Willfulness) and for General Crimes with Willfully Element (1/30/21)

In United States v. Smukler, ___ F.3d ___. 2021 U.S. App. LEXIS 2072 (3d Cir. 1/26/21), Ct here; GS here,  a nontax case, the Court wrestled with the criminal statutory element that the defendant have acted "willfully."  Readers of this blog will recall that Title 26’s tax crimes generally required that the defendant act willfully.   Cheek v. United States, 498 U.S. 192, 201 (1991); see also Ratzlaf v. United States, 510 U.S. 135 (1994).  (The Smukler Court calls this the Cheek-Ratzlaf standard, but I shorten it here to the Cheek standard.)  Cheek interpreted willfully for  tax crimes to be intentional violation of a known legal duty.  Stated otherwise, the defendant must know that he is violating the law to act and, as a corollary, ignorance of the law is an excuse (contrary to the general requirement for crimes, even those with a willfully element, that ignorance of the law is no excuse).  Smukler was charged and convicted of a mélange of campaign finance violations, conspiracy with respect to them, filing and causing the filing of FEC reports.  (See Slip Op. 11 n6.) Some of these required that the defendant act willfully.

The Court tees up the discussion as follows (Slip Op. 2-3):

Interpreting the term "willfully" can be a challenge. It is a "chameleon word," United States v. Starnes, 583 F.3d 196, 210, 52 V.I. 1051 (3d Cir. 2009), and "[i]n any closely reasoned problem, whether legal or nonlegal, chameleon hued words are a peril both to clear thought and to lucid expression," Bryan A. Garner, A Dictionary of Modern Legal Usage 145 (2d ed. 1995) (quoting Wesley N. Hohfeld, Fundamental Legal Conceptions 35 (1919) (reprint 1966)). But we take comfort knowing that we do not struggle alone with this "notoriously malleable" concept. Bryan v. United States, 524 U.S. 184, 202, 118 S. Ct. 1939, 141 L. Ed. 2d 197 (1998) (Scalia, J., dissenting). Indeed, "willfully" is "a word of many meanings" whose definition is "dependent on the context in which it appears." Id. at 191 (majority opinion). And just as a chameleon's appearance depends on the surroundings, we look to the whole text of a law to best "interpret the words consistent with their ordinary meaning . . . at the time Congress enacted the statute." Wis. Cent. Ltd. v. United States, 138 S. Ct. 2067, 2070, 201 L. Ed. 2d 490 (2018) (alteration in original) (internal quotation marks omitted). We approach that task with a full box of "traditional tools" of construction. Kisor v. Wilkie, 139 S. Ct. 2400, 2415, 204 L. Ed. 2d 841 (2019). Aided by these principles, interpreting "willfully" seems less troublesome.

Kenneth Smukler asks us to do just the opposite, arguing for an exceptional understanding of "willfully" in otherwise unexceptional statutes. But the ordinary understanding of "willfully" is the best one.

In other words, Smukler wanted a Cheek-type jury instruction as explained (Slip Op. 12-13):

First, Smukler argues that the District Court incorrectly instructed the jury on the mens rea element of the federal criminal laws requiring the Government to prove that Smukler acted "willfully." The District Court explained that "the Government must prove beyond a reasonable doubt that defendant knew his conduct was unlawful and intended to do something that the law forbids." (App. at 1943.) "That is," the Court continued, "to find that the defendant acted willfully, you must find that the evidence proved beyond a reasonable doubt that defendant acted with a purpose to disobey or disregard the law." (App. at 1943.) Smukler sought different language: that "the government must prove beyond a reasonable doubt that the defendant knew of the specific law prohibiting the conduct at issue, and that he acted with the intent to violate that specific law." (App. at 312.) In rejecting Smukler's proposed instruction, the District Court explained that it would follow "the mens rea standard of willfulness based on [the] Third Circuit Model Jury Instructions . . . and will not cover [Smukler's] inconsistent instructions requested on that issue." (App. at 12-13.) Smukler argues that because the Government charged him with violations in the federal election law context, our precedent required the District Court to charge the jury under a "heightened" standard of "willfully."

The Court’s discussion of Smukler’s “willfully” arguments (Slip Op. 16-28) is too lengthy to cut and paste here.  I will therefore just bullet-point the key points that I see in that discussion.  I do encourage interested readers, to read the entire discussion.  The following are key points I focus on here:

The Court had already noted that “willfully” was a chameleon word in the criminal law having different meanings in different contexts.

For tax crimes and some other highly technical statutes, as noted, willfully is interpreted under the Cheek standard.  This standard, the Court explained (p. 17): , “the jury must find that the defendant was aware of the specific provision of the [statute] that he was charged with violating.” Id. at 194 (citing Cheek v. United States, 498 U.S. 192, 201 (1991)).  

For other more general crimes, willfully can mean something less -- requiring the the Government to “prove that the defendant acted with knowledge that his conduct was unlawful.”  See Slip Op. 17.

JAT Comments:

1. This is more a musing rather than a fully thought-out comment. Focus on the last bullet point.  I know that is what the Supreme Court said in Bryan v. United States, 524 U.S. 184, 195-196 (1998) but I ask whether that makes any sense.  As the Smukler Court articulates the difference, the heightened Cheek willfulness requires that the defendant know the specific statutory provision that he is violating, but the lesser and general willfulness standard still requires that the defendant know that the conduct was unlawful.  That dividing line makes no sense, particularly because as other courts have noted a defendant subject to the heightened Cheek standard in tax cases rarely will know the specific Code provision he is charged with violating.  See United States v. Mousavi, 604 F.3d 1084, 1092 (9th Cir. 2010) (“the term willfulness' requires the government to prove that the defendant was aware of the legal duty at issue, but not that the defendant was aware of a specific statutory or regulatory provision.”); and United States v. Patridge, 507 F.3d 1092, 1094 (7th Cir. 2007) (“Knowledge of the law's demands does not depend on knowing the citation any more than ability to watch a program on TV depends on knowing the frequency on which the signal is broadcast.”), cert. den. 552 U.S. 1228 (2008).  How many defendants in tax cases know that their omission of income and failure to report tax is a violation of § 61 or § 7201?  Conversely, if the general standard still requires that the defendant know that he is violating the law, then what is the difference between the two standards if you take out specific knowledge of the Code section?  Why would ignorance of the law be an excuse for one and not for the other? 

2.  I offer an interesting quote from United States v. Starnes, 583 F.3d 196, 210 n.7 (3d Cir. 2009), which in turn quotes Judge Learned Hand on willfully:

As we have previously observed, the interpretive difficulties posed by the word “willfully” are well-illustrated by a notable exchange that took place between Judge Learned Hand and Herbert Wechsler, the Reporter for the Model Penal Code, during which Judge Hand made plain his feelings on the utility of the term: “ ‘[Willfully is] a very dreadful word… . It's an awful word! It is one of the most troublesome words in a statute that I know. If I were to have the index purged, ‘willful’ would lead all the rest in spite of its being at the end of the alphabet.’ ” United States v. Hayden, 64 F.3d 126, 129 n.5 (3d Cir. 1995) (quoting ALI Proceedings 160 (1955), quoted in Model Penal Code and Commentaries § 2.02, at 249 n.47 (Official Draft and Revised Comments 1985)); cf. Rex Wine Corp. v. Dunigan, 224 F.2d 93, 95 (2d Cir. 1955) (Hand, J.) (noting of the word “willful” that “[i]t must be owned that about that adjective there always gathers an unhappy cloud of uncertainty”). We could not agree more.


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