Supreme Court Declines to Define Fish as Tangible Object

This week, a divided Supreme Court put the brakes on federal prosecutors by saying the government could not apply the Sarbanes-Oxley corporate governance law to a corporate fisherman accused of destroying evidence that he caught undersized fish.  The ruling turned on whether or not fish are considered “tangible objects” under the law, with the majority determining that, although a fish is technically an object, Congress did not intend to include fish under the umbrella of Sarbanes-Oxley.

Florida Fisherman Prosecuted for Undersized Grouper

The case originated in 2007 over an investigation into the fishing activities of Florida’s John Yates, whose boat, the Miss Katie, was stopped with 72 grouper on his boat that appeared to be smaller than 20-inches, which is the minimum size a fish can be in order to be caught commercially.  According to federal prosecutors, Yates instructed his crew members to throw all the undersized grouper overboard and replace them with bigger fish that satisfied the minimum size requirements before a proper inspection could confirm suspicions that he was catching undersized fish.  Using Sarbanes-Oxley, which prohibits the destruction of “tangible objects” to hinder a federal prosecution, the government brought Yates to trial for “destroying, concealing, and covering up undersized fish to impede a federal investigation.”

Yates was convicted under the Sarbanes-Oxley Act and sentenced to 30 days in jail, and his subsequent appeal worked its way up to the Supreme Court.  The Justices were asked to decide whether or not a fish was considered to be the type of tangible object that Congress referred to when passing Sarbanes-Oxley.

Supreme Court Majority Finds Fish outside the Intent of Sarbanes-Oxley

Justice Ruth Bader Ginsburg, writing for Chief Justice John Roberts and Justices Stephen Breyer and Sonia Sotomayor, wrote that while a fish may technically be a tangible thing, the Sarbanes-Oxley Act was designed to target destruction of documents or other objects that record illegal behavior.  Passed in the wake of the Enron collapse in 2002, Sarbanes-Oxley was designed to give prosecutors an avenue of conviction for destroying evidence of fraud and other white collar crimes, and the Court determined that fish fell outside that definition. 

In justifying the decision to determine that a fish is not a tangible object under Sarbanes-Oxley, Justice Ginsburg wrote, “Ordinarily a word’s usage accords with its dictionary definition. In law as in life, however, the same words, placed in different contexts, sometimes mean different things.”  Justice Samuel Alito concurred with the four justices represented by Ginsburg, giving Yates the 5 votes necessary to overturn his conviction.  Writing separately, Justice Alito stated that when reading the term tangible object in Sarbanes-Oxley, “a fish does not spring to mind – nor does an antelope, a colonial farmhouse, a hydrofoil or an oil derrick.”

Although the Yates conviction was overturned with five justices declining to find that a fish is a tangible object under Sarbanes-Oxley, four of the justices, led by Justice Elena Kagan, dissented from the opinion.

Four Justices Dissent from Fisherman Ruling

Writing for four justices in dissent, Justice Elena Kagan disagreed with limiting the definition of tangible object to only items that can contain records of fraud or other criminal behavior.  Colorfully writing against the majority, Justice Kagan stated, “A fish is, of course, a discrete thing that possesses physical form. See generally Dr. Seuss, One Fish Two Fish Red Fish Blue Fish (1960). So the ordinary meaning of the term “tangible object” in §1519, as no one here disputes, covers fish (including too-small red grouper).”  Going on, Kagan wrote that it doesn’t matter that a fish is not a document, “A fisherman, like John Yates, who dumps undersized fish to avoid a fine is no less blameworthy than one who shreds his vessel’s catch log for the same reason.”

Justice Kagan and the dissent acknowledge that Sarbanes-Oxley was an over-reaction to Enron that too broadly defines criminal behavior, but noted that it is not the job of the Supreme Court to rewrite laws that are poorly written and overbroad.  Despite Justice Kagan’s creative and pointed dissent, Sarbanes-Oxley remains in full effect, except, of course, when the tangible object in question is an undersized grouper.

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