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June 08, 2008

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Scott Lemieux is reading too much into U.S. v. Santos, which is the primary basis for his more pessimistic take. On its face, Santos involved the question of whether the word "proceeds" in the money laundering statute means "net profits" or "receipts" (i.e., "the total amount brought in"). Scalia's majority opinion found that "proceeds" means "net profits," thereby giving the win to defendants Santos and Diaz. Four justices dissented from the holding -- Alito, Breyer, Roberts, and Thomas -- because they thought "proceeds" meant "receipts."

But Santos has an important additional dimension: the definition of "promotion," a question that was not technically before the Court, but which is addressed in the majority and dissenting opinions. Lower Courts had defined "promotion" in the money laundering statute extremely broadly -- so broadly, in fact, that if a broad definition of "proceeds" was also adopted, a huge number of other crimes would suddenly become "money laundering" as well. In the Government's view, virtually every crime that involves money is, ipso facto, money laundering. (I exaggerate a bit.)

The dissenters disagreed with Scalia's view that "proceeds" means "net profits." Importantly, however, both dissents suggested possible changes in the meaning of "promotion" in future cases. These dissents strongly suggest that all nine Justices disagree with the Government's view that the money laudering statute should criminalize a wide variety of behavior. Here is Scalia's discussion of the issue:

The principal dissent [Alito's] suggests that a solution to the merger problem may be found in giving a narrow interpretation to the "promotion prong" of the statute: A defendant might be deemed not to "promote" illegal activity "by doing those things ... that are needed merely to keep the business running," post, at 18, because promotion (presumably) means doing things that will cause a business to grow. See Webster's 2d, p. 1981 (giving as one of the meanings of "promote" "[t]o contribute to the growth [or] enlargement" of something). (This argument is embraced by Justice Breyer's dissent as well. See post, at 2.) The federal money-laundering statute, however, bars not the bare act of promotion, but engaging in certain transactions "with the intent to promote the carrying on of specified unlawful activity." 18 U. S. C. §1956(a)(1)(A)(i) (emphasis added). In that context the word naturally bears one of its other meanings, such as "[t]o contribute to the ... prosperity" of something, or to "further" something. See Webster's 2d, p. 1981. Surely one promotes "the carrying on" of a gambling enterprise by merely assuring that it continues in business.5 In any event, to believe that this "narrow" interpretation of "promote" would solve the merger problem one must share the dissent's misperception that the statute applies just to the conduct of ongoing enterprises rather than individual unlawful acts. If the predicate act is theft by an individual, it makes no sense to ask whether an expenditure was intended to "grow" the culprit's theft business. The merger problem thus stands as a major obstacle to the dissent's interpretation of "proceeds."

Alito's dissent put it this way:

While the primary definition of the term "proceeds" is "the total amount brought in," I recognize that the term may also be used to mean "net profit," Webster's 3d 1807, and I do not suggest that the question presented in this case can be answered simply by opening a dictionary. When a word has more than one meaning, the meaning that is intended is often made clear by the context in which the word is used, and thus in this case, upon finding that the term "proceeds" may mean both "the total amount brought in" and "net profit," the appropriate next step is not to abandon any effort at interpretation and summon in the rule of lenity. Rather, the next thing to do is to ask what the term "proceeds" customarily means in the context that is relevant here--a money laundering statute.

....

Second, the merger problem that the plurality opinion and Justice Stevens seek to avoid assumes the correctness of the interpretation of the promotion prong of the money laundering statute that the Seventh Circuit adopted in Santos' direct appeal, i.e., that a defendant "promotes" an illegal gambling business by doing those things, such as paying employees and winning bettors, that are needed merely to keep the business running. As Santos' brief puts it, the merger problem arises when the interpretation of "proceeds" as gross receipts is "[c]ombined with the Government's broad application of the 'promotion' prong of the money laundering statute." Brief for Respondent 6. But the meaning of the element of promotion is not before us in this case, and it would not make sense to allow our interpretation of "proceeds" to be dictated by an unreviewed interpretation of another statutory element.

Notably, Breyer, considered a center-left Justice, agreed with Alito's view and also dissented.

So .... This was a close case.* Moreover, contra Scott, an argument can be made that Santos actually supports Publius' views regarding Alito's and Roberts' respect for precedent. The change in the definition of "proceeds" is likely to have a significant impact on money laundering cases. Santos will upset a few apple carts. Scalia was happy to reach a result that he believed to be correct, despite the consequences. Alito, Roberts, and others preferred instead to keep the structure in place, while sending a strong signal to the Government that another aspect of the money laundering statute was likely to be narrowed in the future -- and that it should frame its future cases accordingly.

*Indeed, Santos was one of those close cases in which a lawyer's skill may well have been decisive.... and not at all because one of my partners* argued the (winning) case for Santos.

(FWIW, I thought/think Alito's view on "proceeds" to be pretty strong. I was concerned that we'd see a opinion just like Alito's for the majority and, indeed, feared that Scalia would write it. I am happy to see that Scalia agreed with Santos' view and ended up in the majority.)

(Here is where I remind y'all that the views expressed here are mine and not my firm's.)

Four justices dissented from the holding -- Alito, Breyer, Roberts, and Thomas -- because they thought "proceeds" meant "receipts."

Sorry; Kennedy dissented. Thomas joined Scalia.

which is the primary basis for his more pessimistic take.

This isn't true; see the link.

At any rate, your response doesn't really address my point. I'm not saying that Alito's dissent was unreasonable, or that the case wasn't "close." I'm saying that Alito and Roberts, since they generally lack Scalia and Thomas's (however intermittent) commitment to certain broad legal rules they will reach conservative results in cases where Scalia and Thomas won't. Santos is certainly an example of this. The fact that Breyer -- by far the weakest of the Court's "liberals" on civil liberties issues -- is both unsurprising and doesn't counter my argument.

which is the primary basis for his more pessimistic take.

This isn't true; see the link.

Scott, that's an extremely silly response. All of the substance in the linked article is about Santos. You have prior posts in which are assert, based on voting patterns (among other things), that Altio and Roberts are doctrinaire conservatives. But the point under discussion is whether two recent civil rights cases are meaningful new data points for Alito and Scalia. In the linked post, you argue that they aren't and your primary basis is Santos -- as I correctly stated.

At any rate, your response doesn't really address my point. I'm not saying that Alito's dissent was unreasonable, or that the case wasn't "close." I'm saying that Alito and Roberts, since they generally lack Scalia and Thomas's (however intermittent) commitment to certain broad legal rules they will reach conservative results in cases where Scalia and Thomas won't. Santos is certainly an example of this.

This response is not silly at all, but it does suggest that I wasn't clear enough because my point was missed. Here it is: Close, nonpolitical cases in which a Court seems to uniformly reject a particular position (here, the Government's) -- i.e., Santos -- is not a particularly good data point.

Santos was a unique case because of the unusual prior interpretation of "promotion" -- an issue that was not before the Court, but which colors every opinion that's written. (It's mentioned expressly in at least three of the four: Scalia's, Alito's, and Breyer's.) There seems to have been general agreement that the result in Santos was wrong, but there was a difference of opinion whether and how it should be corrected.

Additionally, note that the rule of lenity -- Scalia's main basis for his majority opinion -- is very seldom invoked. Aside from money laundering claims, this was not a broad reshaping of the law and is hardly a datapoint to support the view that Scalia and Thomas (unlike Alito and Roberts) are more civil libertarian. You are reading far too much into Santos.

Jeebus, I should go to sleep. There are a ton more typos than usual in the above. Hope my meaning was clear.

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