Supreme Court Limits Judges’ Discretion in Criminal Fines

Photo by dbking. Some rights reserved.

The Supreme Court on Thursday ruled on a case triggered by an environmental law with implications reaching to criminal and financial spheres. The Court overturned an $18 million penalty imposed on Texas-based natural gas company Southern Union, which had been found guilty of storing mercury in a Pawtucket, Rhode Island building without a permit. The judge on the case arrived at his $18 million number based on calculating a maximum fine of $38 million – 762 days of violations carrying a maximum of $50,000 in fines (Reuters has the story here).

Southern Union’s argument, rejected in the 1st U.S. Circuit Court of Appeals in Boston, is that the jury did not specifically determine how long the mercury had been improperly stored and relied on the dates specified in the indictment. The Supreme Court agreed with the defendant that Apprendi v. New Jersey, requiring any fact that increases the maximum punishment for a crime to be proved to a jury beyond a reasonable doubt, applies to criminal fines like the one imposed on Southern Union (ie, not just prison sentences as in Apprendi).

Mayer Brown’s Dan Himmelfarb points out that corporate defendants (which cannot go to jail) are more likely to be subjected to fines than individuals. Facts that increase a fine such as the duration of a violation cannot just be proved by a preponderance of evidence to a judge. In Justice Sotomayor’s opinion, she rejects the government’s argument that because fines are a lesser burden than prison, they should be exempt from Apprendi. Further, and as Himmelfarb points out, perhaps of broader importance, the Court seems now to comfortably favor the jury in the “judge/jury” debate over who must find facts to increase a defendant’s sentence or fine.

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