Yates v. United States: Illegal Fishing and the Sarbanes Oxley Act

BY ZACH LIPSHULTZ — On November 5, 2014, the Supreme Court heard oral arguments in Yates v. United States, a case that may help define the jurisdictional reach of the Sarbanes-Oxley Act (“SOX”). The Court granted certiorari on the issue of whether Yates, a commercial fishing captain from Cortez, Florida, violated the Act’s anti-spoliation provision by disposing of undersized grouper at sea. In August 2007, Yates captained his vessel, the Miss Katie, on a multi-day fishing trip into federal waters in the Gulf of Mexico. While at sea, patrolling fisheries’ enforcement officers boarded the Miss Katie and, upon inspection of Yates’ catch, found 72 red grouper below the minimum legal length in his possession. The officers separated the undersized fish in a crate and instructed Yates to keep them stored for enforcement officials on land who were awaiting his return to port. Failing to heed the officers’ instructions, Yates ordered his crew to dispose of the illegal fish at sea and replace them with different, larger fish. When Yates arrived at port, enforcement officers found 69 fish in the crate which they suspected to have been replaced by Yates’ crew.

The Sarbanes Oxley Act criminalizes the known destruction of “records, documents, or tangible objects” with the intent to disrupt a federal investigation. Seemingly, Yates’ instruction to dispose of the undersized fish so as to avoid their seizure by federal officers would fall within the range of conduct prohibited by the Act. While the SOX itself does not define the term, it is difficult to dispute that a fish is a “tangible object” under a literal reading of the phrase—an interpretation the Eleventh Circuit deemed sufficient to uphold Yates’ conviction from the Middle District of Florida. However, what is less clear is whether a fish is a “tangible object” under the SOX. Yates argues that the Act, passed in the wake of the Enron Corporation scandal, was never intended for such broad application. Rather, his attorneys point to the preceding words “records” and “documents,” and the context surrounding the Act’s passage to support their proposition that “tangible object” refers only to those things used to “preserve information, such as a computer, server, or storage device.” In essence, Yates is asking the Court to read context and legislative purpose into an arguably unambiguous phrase.

Questions of statutory interpretation aside, the unique facts presented in Yates v. United States have piqued the interest of the legal community. Some scholars view the case as a classic example of “overcriminalization, the overuse and abuse of criminal law.” Similarly, others question the government’s decision to charge Yates under the Act at all, including Justice Antonin Scalia, who during oral arguments inquired as to who from the government “exercises prosecutorial discretion.” Pacific Legal Foundation, in amici to the Court, views this as an attempt by prosecutors to persuade Yates to accept a plea bargain by ratcheting up charges. These arguments focus on the maximum sentence of 20 years under the SOX, the nature of Yates’ crime, and the availability of alternative, less stringent criminal charges. However, discussion of this case has seemingly relegated to pun the importance of adequate adherence to and enforcement of fisheries regulations.

As expansive offshore waters preclude enforcement inspections at a frequency necessary to ensure compliance, industry self-regulation is often critical to the success or failure of a fisheries management program. The socio-economic and ecological impacts of illegal fishing are serious, numerous, and well documented. To be sure, the disregard for regulations exhibited by Yates is not likely shared by most commercial fishermen; indeed, the ability to continue earning a living from commercial fishing is determined by the long-term health of the fisheries themselves—the model of sustainability fisheries’ regulations seek to capture. Yet, ocean fisheries are a quintessential “common pool resource” and, thus, are viewed by some as requiring mutually agreed upon coercion between institutional actors and resource users to avoid a collapse of the resource.

Top-down fisheries regulations, such as those authorized by the Magnuson-Stevens Act and violated by Yates, are a classic example of such a coercive management regime. But when a regime’s coercive nature is insufficient to garner complete adherence by resource users, where does the institution turn? More specifically, how does one correct a fishery management regime that incentivizes some fishermen to kill undersized fish, with the contingency that the illegal fish may always be discarded at sea to avoid punishment? In the light of Yates, to some, an answer might be to increase the degree of punishment to align with a level that deters violations from all resource users, and Garrett Hardin once went so far as to state: “[i]njustice is preferable to total ruin.” Certainly, 20 years imprisonment seems excessive for a violation such as Yates’, a position presumably accepted by prosecutors who decided against seeking such a sentence under the SOX. While this case presents fascinating questions of statutory interpretation and the jurisdictional scope of the SOX, the underlying tension between decriminalization and the needs of fisheries enforcement should not be overlooked.

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