HUDSON ET AL. v. UNITED STATES
No. 96-976
Supreme Court of the United States
Argued October 8, 1997—Decided December 10, 1997
522 U.S. 93
Bernard J. Rothbaum argued the cause for petitioners. With him on the briefs were Jack L. Neville, Jr., Lawrence S. Robbins, C. Merle Gile, James A. Rolfe, and Lynn Pringle.
Deputy Solicitor General Dreeben argued the cause for the United States. With him on the briefs were Acting
CHIEF JUSTICE REHNQUIST delivered the opinion of the Court.
The Government administratively imposed monetary penalties and occupational debarment on petitioners for violation of federal banking statutes, and later criminally indicted them for essentially the same conduct. We hold that the
During the early and mid-1980‘s, petitioner John Hudson was the chairman and controlling shareholder of the First National Bank of Tipton (Tipton) and the First National Bank of Hammon (Hammon).1 During the same period, petitioner Jack Rackley was president of Tipton and a member of the board of directors of Hammon, and petitioner Larry Baresel was a member of the board of directors of both Tipton and Hammon.
An examination of Tipton and Hammon led the Office of the Comptroller of the Currency (OCC) to conclude that petitioners had used their bank positions to arrange a series of loans to third parties in violation of various federal banking statutes and regulations. According to the OCC, those loans, while nominally made to third parties, were in reality made to Hudson in order to enable him to redeem bank stock that he had pledged as collateral on defaulted loans.
On February 13, 1989, OCC issued a “Notice of Assessment of Civil Money Penalty.” The notice alleged that petitioners had violated
In October 1989, petitioners resolved the OCC proceedings against them by each entering into a “Stipulation and Consent Order.” These consent orders provided that Hudson, Baresel, and Rackley would pay assessments of $16,500, $15,000, and $12,500 respectively. Id., at 130a, 140a, 135a. In addition, each petitioner agreed not to “participate in any manner” in the affairs of any banking institution without the written authorization of the OCC and all other relevant regulatory agencies.2 Id., at 131a, 141a, 136a.
In August 1992, petitioners were indicted in the Western District of Oklahoma in a 22-count indictment on charges of conspiracy,
The Double Jeopardy Clause provides that no “person [shall] be subject for the same offence to be twice put in jeopardy of life or limb.” We have long recognized that the Double Jeopardy Clause does not prohibit the imposition of
Whether a particular punishment is criminal or civil is, at least initially, a matter of statutory construction. Helvering, supra, at 399. A court must first ask whether the legislature, “in establishing the penalizing mechanism, indicated either expressly or impliedly a preference for one label or the other.” Ward, 448 U. S., at 248. Even in those cases where the legislature “has indicated an intention to establish a civil penalty, we have inquired further whether the statutory scheme was so punitive either in purpose or effect,” id., at 248-249, as to “transfor[m] what was clearly intended as a civil remedy into a criminal penalty,” Rex Trailer Co. v. United States, 350 U. S. 148, 154 (1956).
In making this latter determination, the factors listed in Kennedy v. Mendoza-Martinez, 372 U. S. 144, 168-169 (1963), provide useful guideposts, including: (1) “[w]hether the sanction involves an affirmative disability or restraint“; (2) “whether it has historically been regarded as a punishment“; (3) “whether it comes into play only on a finding of scienter“; (4) “whether its operation will promote the traditional aims of punishment—retribution and deterrence“; (5) “whether the behavior to which it applies is already a crime“; (6) “whether an alternative purpose to which it may rationally be connected is assignable for it“; and (7) “whether it appears
Our opinion in United States v. Halper marked the first time we applied the Double Jeopardy Clause to a sanction without first determining that it was criminal in nature. In that case, Irwin Halper was convicted of, inter alia, violating the criminal false claims statute,
On direct appeal, this Court affirmed. As the Halper Court saw it, the imposition of “punishment” of any kind was
The analysis applied by the Halper Court deviated from our traditional double jeopardy doctrine in two key respects. First, the Halper Court bypassed the threshold question: whether the successive punishment at issue is a “criminal” punishment. Instead, it focused on whether the sanction, regardless of whether it was civil or criminal, was so grossly disproportionate to the harm caused as to constitute “punishment.” In so doing, the Court elevated a single Kennedy factor—whether the sanction appeared excessive in relation to its nonpunitive purposes—to dispositive status. But as we emphasized in Kennedy itself, no one factor should be considered controlling as they “may often point in differing directions.” 372 U. S., at 169. The second significant departure in Halper was the Court‘s decision to “asses[s] the character of the actual sanctions imposed,” 490 U. S., at 447, rather than, as Kennedy demanded, evaluating the “statute on its face” to determine whether it provided for what amounted to a criminal sanction, 372 U. S., at 169.
We believe that Halper‘s deviation from longstanding double jeopardy principles was ill considered.5 As subsequent
Finally, it should be noted that some of the ills at which Halper was directed are addressed by other constitutional
Applying traditional double jeopardy principles to the facts of this case, it is clear that the criminal prosecution of these petitioners would not violate the Double Jeopardy Clause. It is evident that Congress intended the OCC money penalties and debarment sanctions imposed for violations of
Second, the sanctions imposed do not involve an “affirmative disability or restraint,” as that term is normally understood. While petitioners have been prohibited from further participating in the banking industry, this is “certainly nothing approaching the ‘infamous punishment’ of imprisonment.” Flemming v. Nestor, 363 U. S. 603, 617 (1960). Third, neither sanction comes into play “only” on a finding of scienter. The provisions under which the money penalties were imposed,
Fourth, the conduct for which OCC sanctions are imposed may also be criminal (and in this case formed the basis for petitioners’ indictments). This fact is insufficient to render the money penalties and debarment sanctions criminally punitive, Ursery, 518 U. S., at 292, particularly in the double jeopardy context, see United States v. Dixon, 509 U. S. 688, 704 (1993) (rejecting “same-conduct” test for double jeopardy purposes).
Finally, we recognize that the imposition of both money penalties and debarment sanctions will deter others from emulating petitioners’ conduct, a traditional goal of criminal punishment. But the mere presence of this purpose is insufficient to render a sanction criminal, as deterrence “may serve civil as well as criminal goals.” Ursery, supra, at 292; see also Bennis v. Michigan, 516 U. S. 442, 452 (1996) (“[F]orfeiture . . . serves a deterrent purpose distinct from any punitive purpose“). For example, the sanctions at issue here, while intended to deter future wrongdoing, also serve to promote the stability of the banking industry. To hold that the mere presence of a deterrent purpose renders such sanctions “criminal” for double jeopardy purposes would severely undermine the Government‘s ability to engage in effective regulation of institutions such as banks.
In sum, there simply is very little showing, to say nothing of the “clearest proof” required by Ward, that OCC money penalties and debarment sanctions are criminal. The Double Jeopardy Clause is therefore no obstacle to their trial on the pending indictments, and it may proceed.
The judgment of the Court of Appeals for the Tenth Circuit is accordingly
Affirmed.
I wholly agree with the Court‘s conclusion that Halper‘s test for whether a sanction is “punitive” was ill considered and unworkable. Ante, at 101-102. Indeed, it was the absurdity of trying to force the Halper analysis upon the Montana tax scheme at issue in Department of Revenue of Mont. v. Kurth Ranch, 511 U. S. 767 (1994), that prompted me to focus on the prior question whether the Double Jeopardy Clause even contains a multiple-punishments prong. See id., at 802-803. That evaluation led me to the conclusion that the Double Jeopardy Clause prohibits successive prosecution, not successive punishment, and that we should therefore “put the Halper genie back in the bottle.” Id., at 803-805. Today‘s opinion uses a somewhat different bottle than I would, returning the law to its state immediately prior to Halper—which acknowledged a constitutional prohibition of multiple punishments but required successive criminal prosecutions. So long as that requirement is maintained, our multiple-punishments jurisprudence essentially duplicates what I believe to be the correct double jeopardy law, and will be as harmless in the future as it was pre-Halper. Accordingly, I am pleased to concur.
JUSTICE STEVENS, concurring in the judgment.
The maxim that “hard cases make bad law” may also apply to easy cases. As I shall explain, this case could easily be decided by the straightforward application of well-established precedent. Neither such a disposition, nor anything in the opinion of the Court of Appeals, would require a reexamination of the central holding in United States v. Halper, 490 U. S. 435 (1989), or of the language used in that unanimous opinion. Any proper concern about the danger that that opinion might be interpreted too expansively would be more appropriately addressed in a case that was either incorrectly decided or that at least raised a close or difficult
I
As is evident from the first sentence of the Court‘s opinion, this is an extremely easy case. It has been settled since the decision in Blockburger v. United States, 284 U. S. 299 (1932), that the Double Jeopardy Clause is not implicated simply because a criminal charge involves “essentially the same conduct” for which a defendant has previously been punished. See, e. g., United States v. Dixon, 509 U. S. 688, 696, 704 (1993); Rutledge v. United States, 517 U. S. 292, 297 (1996). Unless a second proceeding involves the “same offense” as the first, there is no double jeopardy. The two proceedings at issue here involved different offenses that were not even arguably the same under Blockburger.
Under Blockburger‘s “same-elements” test, two provisions are not the “same offense” if each contains an element not included in the other. Dixon, 509 U. S., at 696. The penalties imposed on the petitioners in 1989 were based on violations of
Thus, I think it would be difficult to find a case raising a double jeopardy claim that would be any easier to decide than this one.2
II
The Court not only ignores the most obvious and straightforward basis for affirming the judgment of the Court of Appeals; it also has nothing to say about that court‘s explanation of why the reasoning in our opinion in United States v. Halper supported a rejection of petitioners’ double jeopardy claim. Instead of granting certiorari to consider a possible error in the Court of Appeals’ reasoning or its judgment, the Court candidly acknowledges that it was motivated by “concerns about the wide variety of novel double jeopardy claims spawned in the wake of Halper.” Ante, at 98.
The Court‘s opinion seriously exaggerates the significance of those concerns. Its list of cases illustrating the problem cites seven cases decided in the last two years. Ante, at 98, n. 4. In every one of those cases, however, the Court of Appeals rejected the double jeopardy claim. The only ruling by any court favorable to any of these “novel” claims was a preliminary injunction entered by a District Court post-poning implementation of New Jersey‘s novel, controversial
The Court also claims that two practical flaws in the Halper opinion warrant a prompt adjustment in our double jeopardy jurisprudence. First, the Court asserts that Halper‘s test is unworkable because it permits only successive sanctions that are “solely” remedial. Ante, at 102. Though portions of Halper were consistent with such a reading, the express statement of its holding was much narrower.3 Of greater importance, the Court has since clarified this very point:
“Whether a particular sanction ‘cannot fairly be said solely to serve a remedial purpose’ is an inquiry radically different from that we have traditionally employed in order to determine whether, as a categorical matter, a civil sanction is subject to the Double Jeopardy Clause. Yet nowhere in Halper does the Court purport to make such a sweeping change in the law, instead emphasizing repeatedly the narrow scope of its decision.” United States v. Ursery, 518 U. S. 267, 285, n. 2 (1996).
Having just recently emphasized Halper‘s narrow rule in Ursery, it is quite odd for the Court now to suggest that its overbreadth has created some sort of judicial emergency.
Second, the Court expresses the concern that when a civil proceeding follows a criminal punishment, Halper would require a court to wait until judgment is imposed in the successive proceeding before deciding whether the latter sanction violates double jeopardy. Ante, at 102. That concern is
Thus, the concerns that the Court identifies merely emphasize the accuracy of the comment in Halper itself that it announced “a rule for the rare case . . . where a fixed-penalty provision subjects a prolific but small-gauge offender to a sanction overwhelmingly disproportionate to the damages he has caused.” 490 U. S., at 449.
III
Despite my disagreement with the Court‘s decision to use this case as a rather lame excuse for writing a gratuitous essay about punishment, I do agree with its reaffirmation of the central holding of Halper and Department of Revenue of Mont. v. Kurth Ranch, 511 U. S. 767 (1994). Both of those cases held that sanctions imposed in civil proceedings constituted “punishment” barred by the Double Jeopardy Clause.4 Those holdings reconfirmed the settled proposition that the Government cannot use the “civil” label to escape entirely the Double Jeopardy Clause‘s command, as we have recognized for at least six decades. See United States v. La Franca, 282 U. S. 568, 574-575 (1931); Helvering v. Mitchell, 303 U. S. 391, 398-399 (1938). That proposition is extremely
IV
Today, as it did in Halper itself, the Court relies on the sort of multifactor approach to the definition of punishment that we used in Kennedy v. Mendoza-Martinez, 372 U. S. 144, 168-169 (1963), to identify situations in which a civil sanction is punitive. Whether the Court‘s reformulation of Halper‘s test will actually affect the outcome of any cases remains to be seen. Perhaps it will not, since the Court recommends consideration of whether a sanction‘s “‘operation will promote the traditional aims of punishment—retribution and deterrence,‘” and “‘whether it appears excessive in relation to the alternative [nonpunitive] purpose assigned.‘” Ante, at 99-100 (quoting Kennedy, 372 U. S., at 168-169). Those factors look awfully similar to the reasoning in Halper, and while we are told that they are never by themselves dispositive, ante, at 101, they should be capable of tipping the balance in extreme cases. The danger in changing approaches midstream, rather than refining our established approach on an incremental basis, is that the Government and lower
It is, of course, entirely appropriate for the Court to perform a lawmaking function as a necessary incident to its Article III responsibility for the decision of “Cases” and “Controversies.” In my judgment, however, a desire to reshape the law does not provide a legitimate basis for issuing what amounts to little more than an advisory opinion that, at best, will have the precedential value of pure dictum and may in time unduly restrict the protections of the Double Jeopardy Clause. “It is not the habit of the Court to decide questions of a constitutional nature unless absolutely necessary to a decision of the case.” Burton v. United States, 196 U. S. 283, 295 (1905); see also Ashwander v. TVA, 297 U. S. 288, 345-348 (1936) (Brandeis, J., concurring). Accordingly, while I concur in the judgment of affirmance, I do not join the Court‘s opinion.
JUSTICE SOUTER, concurring in the judgment.
I concur in the Court‘s judgment and with much of its opinion. As the Court notes, ante, at 102, we have already recognized that Halper‘s statements of standards for identifying what is criminally punitive under the Fifth Amendment needed revision, United States v. Ursery, 518 U. S. 267, 284-285, n. 2 (1996), and there is obvious sense in employing common criteria to point up the criminal nature of a statute for purposes of both the Fifth and Sixth Amendments. See United States v. One Assortment of 89 Firearms, 465 U. S. 354, 362-366 (1984); United States v. Ward, 448 U. S. 242, 248-249 (1980); Kennedy v. Mendoza-Martinez, 372 U. S. 144, 168-169 (1963); see also Ward, supra, at 254 (“[I]t would be quite anomalous to hold that [the statute] created a criminal penalty for the purposes of the Self-Incrimination Clause but a civil penalty for all other purposes“).
Applying the Court‘s Kennedy-Ward criteria leads me directly to the conclusion of JUSTICE STEVENS‘s opinion con-
My acceptance of the Kennedy-Ward analytical scheme is subject to caveats, however. As the Court points out, under Ward, once it is understood that a legislature intended a penalty to be treated as civil in character, that penalty may be held criminal for Fifth Amendment purposes (and, for like reasons, under the Sixth Amendment) only on the “clearest proof” of its essentially criminal proportions. While there are good and historically grounded reasons for using that phrase to impose a substantial burden on anyone claiming that an apparently civil penalty is in truth criminal, what may be clear enough to be “clearest” is necessarily dependent on context, as indicated by the cases relied on as authority for adopting the standard in Ward. Flemming v. Nestor, 363 U. S. 603 (1960), used the quoted language to describe the burden of persuasion necessary to demonstrate a criminal and punitive purpose unsupported by “objective manifestations” of legislative intent. Id., at 617. Rex Trailer Co. v. United States, 350 U. S. 148, 154 (1956), cited as secondary authority, required a defendant to show that a “measure of recovery” was “unreasonable or excessive” before “what was
I add the further caution, to be wary of reading the “clearest proof” requirement as a guarantee that such a demonstration is likely to be as rare in the future as it has been in the past. See United States v. Halper, 490 U. S. 435, 449 (1989) (“What we announce now is a rule for the rare case“). We have noted elsewhere the expanding use of ostensibly civil forfeitures and penalties under the exigencies of the current drug problems, see Ursery, supra, at 300 (STEVENS, J., concurring in judgment in part and dissenting in part) (“In recent years, both Congress and the state legislatures have armed their law enforcement authorities with new powers to forfeit property that vastly exceed their traditional tools“); United States v. James Daniel Good Real Property, 510 U. S. 43, 81-82 (1993) (THOMAS, J., concurring in part and dissenting in part), a development doubtless spurred by the increasingly inviting prospect of its profit to the Government. See id., at 56, n. 2 (opinion of the Court) (describing the Government‘s financial stake in drug forfeiture); see also id., at 56 (citing Harmelin v. Michigan, 501 U. S. 957, 979, n. 9 (1991) (opinion of SCALIA, J.) for the proposition that “it makes sense to scrutinize governmental action more closely when the State stands to benefit“). Hence, on the infrequency of “clearest proof,” history may not be repetitive.
I agree with the majority and with JUSTICE SOUTER that United States v. Halper, 490 U. S. 435 (1989), does not provide proper guidance for distinguishing between criminal and noncriminal sanctions and proceedings. I also agree that United States v. Ward, 448 U. S. 242, 248 (1980), and Kennedy v. Mendoza-Martinez, 372 U. S. 144, 168-169 (1963), set forth the proper approach.
I do not join the Court‘s opinion, however, because I disagree with its reasoning in two respects. First, unlike the Court I would not say that “‘only the clearest proof‘” will “transform” into a criminal punishment what a legislature calls a “civil remedy.” Ante, at 100. I understand that the Court has taken this language from earlier cases. See Ward, supra, at 249. But the limitation that the language suggests is not consistent with what the Court has actually done. Rather, in fact if not in theory, the Court has simply applied factors of the Kennedy variety to the matter at hand. In Department of Revenue of Mont. v. Kurth Ranch, 511 U. S. 767 (1994), for example, the Court held that the collection of a state tax imposed on the possession and storage of drugs was “the functional equivalent of a successive criminal prosecution” because, among other things, the tax was “remarkably high“; it had “an obvious deterrent purpose“; it was “conditioned on the commission of a crime“; it was “exacted only after the taxpayer ha[d] been arrested for the precise conduct that gives rise to the tax obligation“; its alternative function of raising revenue could be equally well served by increasing the fine imposed on the activity; and it departed radically from “normal revenue laws” by taxing contraband goods perhaps destroyed before the tax was imposed. Id., at 781-784. This reasoning tracks the nonexclusive list of factors set forth in Kennedy, and it is, I believe, the proper approach. The “clearest proof” language
Second, I would not decide now that a court should evaluate a statute only “‘on its face,‘” ante, at 100 (quoting Kennedy, supra, at 169), rather than “assessing the character of the actual sanctions imposed,” Halper, supra, at 447; ante, at 101. Halper involved an ordinary civil-fine statute that as normally applied would not have created any “double jeopardy” problem. It was not the statute itself, but rather the disproportionate relation between fine and conduct as the statute was applied in the individual case that led this Court, unanimously, to find that the “civil penalty” was, in those circumstances, a second “punishment” that constituted double jeopardy. See 490 U. S., at 439, 452 (finding that $130,000 penalty was “sufficiently disproportionate” to $585 loss plus approximately $16,000 in Government expenses caused by Halper‘s fraud to constitute a second punishment in violation of double jeopardy). Of course, the Court in Halper might have reached the same result through application of the constitutional prohibition of “excessive fines.” See ante, at 103; Alexander v. United States, 509 U. S. 544, 558-559 (1993); Halper, supra, at 449 (emphasizing that Halper was “the rare case” in which there was an “overwhelmingly disproportionate” fine). But that is not what the Court there said. And nothing in the majority‘s opinion today explains why we should abandon this aspect of Halper‘s holding. Indeed, in context, the language of Kennedy that suggests that the Court should consider the statute on its face does not suggest that there may not be further analysis of a penalty as it is applied in a particular case. See 372 U. S., at 169. Most of the lower court confusion and criticism of Halper appears to have focused on the problem of characterizing—by examining the face of the statute—the purposes of a civil penalty as punishment, not on the application of double jeopardy analysis to the penalties that are imposed in particular cases. It seems to me quite possible that
That said, an analysis of the Kennedy factors still leads me to the conclusion that the statutory penalty in this case is not on its face a criminal penalty. Nor, in my view, does the application of the statute to the petitioners in this case amount to criminal punishment. I therefore concur in the judgment.