Amicus Curiae Brief — Xiulu Ruan, Petitioner v. United States

Nos. 20-1410, 21-5261

IN THE

XIULU RUAN,

Petitioner,

v.

THE UNITED STATES OF AMERICA,

Respondent.

SHAKEEL KAHN,

Petitioner,

v.

THE UNITED STATES OF AMERICA,

Respondent.

On Writs of Certiorari

To the United States Courts of Appeals

For the Tenth and Eleventh Circuits

BRIEF OF THE CHAMBER OF COMMERCE OF THE

UNITED STATES OF AMERICA AS AMICUS CURIAE IN

SUPPORT OF NEITHER PARTY

Tara S. Morrissey

Andrew R. Varcoe

U.S. CHAMBER LITIGATION

CENTER

1615 H St. NW

Washington, DC 20062

Bruce Pettig

O’MELVENY & MYERS LLP

7 Times Square

New York, NY 10036

Michael R. Dreeben

Counsel of Record

Daniel Lautzenheiser

Nina Oat

O’MELVENY & MYERS LLP

1625 I St. NW

Washington, DC 20006

(202) 383-5400

mdreeben@omm.com

i

TABLE OF CONTENTS

Page

INTEREST OF AMICUS CURIAE ............................ 1

SUMMARY OF ARGUMENT .................................... 2

ARGUMENT ............................................................... 4

A.

Bedrock Criminal-Law Principles

Make Consciousness Of Wrongdoing

A

Presumptively

Necessary

Ingredient Of A Felony Offense ............ 4

B.

Mens Rea Requirements Have

Particular

Importance

Where

Complex Regulatory Schemes Are

Backed By Criminal Penalties ............ 10

C.

Overdeterrence

Considerations

Support Requiring Mens Rea For The

Relevant Facts Separating Lawful

From Unlawful Conduct ..................... 21

CONCLUSION.......................................................... 26

ii

TABLE OF AUTHORITIES

Page(s)

Cases

Appalachian Coals, Inc. v. United States,

288 U.S. 344 (1933) ................................................ 14

Arthur Andersen LLP v. United States,

544 U.S. 696 (2005) .......................................... 5, 7, 8

Borden v. United States,

141 S. Ct. 1817 (2021) .............................................. 6

Bryan v. United States,

524 U.S. 184 (1998) ................................................ 11

Carter v. United States,

530 U.S. 255 (2000) .................................................. 6

Cheek v. United States,

498 U.S. 192 (1991) ............................................ 9, 12

Colautti v. Franklin,

439 U.S. 379 (1979) ................................................ 10

Connally v. Gen. Constr. Co.,

269 U.S. 385 (1926) .................................................. 9

Elonis v. United States,

135 S. Ct. 2001 (2015) ...................................... 4, 5, 7

Exxon Shipping Co. v. Baker,

554 U.S. 471 (2008) .......................................... 22, 25

Flores-Figueroa v. United States,

556 U.S. 646 (2009) .............................................. 5, 6

Friends of the Earth, Inc. v. Laidlaw Envt’l

Servs. (TOC), Inc.,

528 U.S. 167 (2000) ................................................ 25

iii

TABLE OF AUTHORITIES

(continued)

Page(s)

Hanlester Network v. Shalala,

51 F.3d 1390 (9th Cir. 1995) .................................. 13

Hudson v. United States,

522 U.S. 93 (1997) .................................................. 25

Johnson v. United States,

576 U.S. 591 (2015) .................................................. 9

Liparota v. United States,

471 U.S. 419 (1985) .................................. 5, 6, 13, 16

Morissette v. United States,

342 U.S. 246 (1952) ........................................ passim

Posters ‘N’ Things, Ltd. v. United States,

511 U.S. 513 (1994) .......................................... 10, 21

Ratzlaf v. United States,

510 U.S. 135 (1994) .................................... 11, 12, 13

Rehaif v. United States,

139 S. Ct. 2191 (2019) .................................... 5, 9, 16

Screws v. United States,

325 U.S. 91 (1945) .................................................... 9

Skilling v. United States,

561 U.S. 358 (2010) ................................................ 10

Spies v. United States,

317 U.S. 492 (1943) ................................................ 11

Staples v. United States,

511 U.S. 600 (1994) ........................................ passim

United States v. Bailey,

444 U.S. 394 (1980) .................................................. 6

iv

TABLE OF AUTHORITIES

(continued)

Page(s)

United States v. Balint,

258 U.S. 250 (1922) .................................................. 8

United States v. Curran,

20 F.3d 560 (3d Cir. 1994) ..................................... 13

United States v. Davis,

139 S. Ct. 2319 (2019) .............................................. 9

United States v. Feingold,

454 F.3d 1001 (9th Cir. 2006) ................................ 21

United States v. Freed,

401 U.S. 601 (1971) .................................................. 8

United States v. Hopkins,

53 F.3d 533 (2d Cir. 1995) ..................................... 18

United States v. Hurwitz,

459 F.3d 463 (4th Cir. 2006) .................................. 21

United States v. International Minerals &

Chemical Corp.,

402 U.S. 558 (1971) .................................... 17, 19, 20

United States v. Sinskey,

119 F.3d 712 (8th Cir. 1997) .................................. 18

United States v. U.S. Gypsum Co.,

438 U.S. 422 (1978) ........................................ passim

United States v. Weintraub,

273 F.3d 139 (2d Cir. 2001) ............................. 18, 19

United States v. Weitzenhoff,

35 F.3d 1275 (9th Cir. 1993) ...................... 17, 18, 19

v

TABLE OF AUTHORITIES

(continued)

Page(s)

United States v. X–Citement Video, Inc.,

513 U.S. 64 (1994) .......................................... 5, 8, 21

Universal Health Servs., Inc. v. United States

ex rel. Escobar,

579 U.S. 176 (2016) ................................................ 22

Statutes

15 U.S.C. § 1............................................................... 14

15 U.S.C. § 2............................................................... 14

18 U.S.C. § 922(g)(5)(A) ............................................. 16

31 U.S.C. § 3729 ......................................................... 22

33 U.S.C. § 1318(a) .................................................... 25

33 U.S.C. § 1319(c)(2)(A) ........................................... 17

33 U.S.C. § 1362(6) .............................................. 19, 20

42 U.S.C. § 1320a-7b(b)(7) ......................................... 13

42 U.S.C. § 7413(c) ..................................................... 18

42 U.S.C. § 7602(g) .................................................... 19

Other Authorities

Model Penal Code § 2.02 (1985) .................................. 6

Model Penal Code § 2.02(2)(a)(i) (1985) ...................... 6

Model Penal Code § 2.02(2)(b)(i) (1985) ...................... 6

Model Penal Code § 2.04 (1985) ................................ 17

1 Wayne R. LaFave, Substantive Criminal Law

§ 5.6(d) (3d ed. Dec. 2021 update) ........................... 4

vi

TABLE OF AUTHORITIES

(continued)

Page(s)

1 Wayne R. LaFave & Austin W. Scott,

Substantive Criminal Law § 5.1(a) (1986) ............ 16

Bruce H. Kobayashi, Antitrust, Agency, and

Amnesty: An Economic Analysis of the

Criminal Enforcement of the Antitrust Laws

Against Corporations, 69 Geo. Wash. L. Rev.

715 (2001) ......................................................... 22, 23

Mark A. Cohen, Environmental Crime and

Punishment: Legal/Economic Theory and

Empirical Evidence on Enforcement of

Federal Environmental Statutes, 82 J. Crim.

L. & Criminology 1054 (1992)................................ 22

Phillip E. Areeda & Herbert Hovenkamp,

Antitrust Law: An Analysis of Antitrust

Principles and Their Application (3d ed.

2006) ................................................................. 14, 15

Richard A. Posner, Economics, Politics, and the

Reading of Statutes and the Constitution, 49

U. Chi. L. Rev. 263 (1982) ................................ 23, 24

IN THE

Nos. 20-1410, 21-5261

XIULU RUAN,

Petitioner,

v.

THE UNITED STATES OF AMERICA,

Respondent.

SHAKEEL KAHN,

Petitioner,

v.

THE UNITED STATES OF AMERICA,

Respondent.

On Writs of Certiorari

To the United States Courts of Appeals

For the Tenth and Eleventh Circuits

_____________

BRIEF OF THE CHAMBER OF COMMERCE OF THE

UNITED STATES OF AMERICA AS AMICUS CURIAE IN

SUPPORT OF NEITHER PARTY

INTEREST OF AMICUS CURIAE1

The Chamber of Commerce of the United States

of America is the world’s largest business federation.

1 Pursuant to Supreme Court Rule 37.6, amicus curiae

states that no counsel for any party authored this brief in whole

or in part and no entity or person, other than amicus curiae, its

members, or its counsel, made any monetary contribution

intended to fund the preparation or submission of this brief. All

of the parties have consented to the filing of this brief.

2

It represents approximately 300,000 direct members

and indirectly represents the interests of more than

three

million

companies

and

professional

organizations of every size, in every industry sector,

and from every region of the country.

An important function of the Chamber is to

represent the interests of its members in matters

before Congress, the Executive Branch, and the

courts. To that end, the Chamber regularly files

amicus curiae briefs in cases, like this one, that raise

issues of concern to the nation’s business community.

The Chamber’s members have an interest in the

bedrock principle of criminal law that (unless

Congress has clearly specified otherwise) felony

liability must be predicated on a defendant’s culpable

mental state with respect to the element or elements

of the offense that make his conduct unlawful.

SUMMARY OF ARGUMENT

This Court has long adhered to a presumption

that criminal liability requires knowledge of the facts

that distinguish lawful from unlawful conduct. That

presumption applies both to statutes that lack an

express mens rea element and to statutes where the

scope of a textual mens rea requirement is unclear.

This presumption applies across the realm of felony

punishment in criminal law. The presumption of

scienter not only vindicates deeply rooted legal

principles that require consciousness of wrongdoing

to justify serious criminal sanctions, but also protects

important due process interests. A stringent scienter

requirement helps alleviate notice issues that may

arise from vague, complex, or indefinite legal

standards.

3

The requirement of strong mens rea standards

has particular force in complex regulatory schemes.

There, technical and complicated legal requirements

can result in violations without conscious awareness

of wrongdoing. A statutory willfulness requirement

often protects against criminal liability when the

actor has no purpose to disobey or disregard the law.

But even absent such statutory text, the Court has

applied background principles of mens rea to require

knowledge of harmful and proscribed consequences to

justify criminal liability. The Sherman Act presents

a paradigmatic example of that practice.

In

interpreting the Act, the Court has recognized that

mens rea requirements are essential to avoid

criminalizing business practices that fall into a gray

area. And where criminal liability turns on whether

conduct is legally authorized or on a defendant’s legal

status, knowledge of that fact is necessary to avoid

criminalizing innocent conduct. To the extent that

lower courts have expanded the concept of public

welfare offenses to allow felony liability for violations

without consciousness of wrongdoing, those decisions

have gone astray.

The presumption of mens rea also serves the

valuable purpose of avoiding overdeterrence. In

many regulatory contexts, socially beneficial activity

may lie near the margins of prohibited conduct.

Criminal and other punitive sanctions that dispense

with mens rea concerning the facts on which liability

turns may lead to undue caution about lawful

conduct. That overdeterrence is harmful to society.

And given the wide array of non-punitive civil

remedies that encourage law compliance and

compensate injured parties, the presumption of mens

4

rea is particularly warranted to avoid overextending

the criminal law in ways that discourage valuable

activity.2

ARGUMENT

A “vast network of regulatory offenses . . . make

up a large part of today’s criminal law.” 1 Wayne R.

LaFave, Substantive Criminal Law § 5.6(d) (3d ed.

Dec. 2021 update). Prohibitions that trigger felonylevel punishment provide strong incentives to comply

with the law. But administrative regulations are

often vague, far-reaching, and complex. If criminal

sanctions are imposed for regulatory violations

absent consciousness of wrongdoing, the criminal law

risks overdeterring innocent, socially beneficial

conduct. This Court’s presumption of mens rea is

vital to alleviate those concerns. The Court should

therefore reaffirm the principle that unless Congress

has unmistakably specified otherwise, felony-level

criminal liability for regulatory offenses attaches only

on proof of conscious wrongdoing.

A.

Bedrock

Criminal-Law

Principles

Make

Consciousness Of Wrongdoing A Presumptively

Necessary Ingredient Of A Felony Offense

1. It is a foundational principle of our criminal

law that “wrongdoing must be conscious to be

criminal.” Elonis v. United States, 135 S. Ct. 2001,

2009 (2015) (quoting Morissette v. United States, 342

2 The foregoing principles apply generally to a wide range

of statutory and regulatory contexts. The Chamber expresses no

view on the specific application of these principles to the

criminal convictions in these cases.

5

U.S. 246, 252 (1952)). “Federal criminal liability

generally does not turn solely on the results of an act

without considering the defendant’s mental state.”

Id. at 2012. Rather, this Court regularly interprets

“criminal statutes to include broadly applicable

scienter requirements, even where the statute by its

terms does not contain them.” Id. at 2009 (quoting

United States v. X–Citement Video, Inc., 513 U.S. 64,

70 (1994)).

This interpretive rule, sometimes called the

“presumption in favor of scienter,” applies to statutes

that omit a mental state element altogether. See id.

at 2004, 2010 (18 U.S.C. § 875(c)); Staples v. United

States, 511 U.S. 600, 602–03 (1994) (26 U.S.C.

§ 5861(d)); United States v. U.S. Gypsum Co., 438

U.S. 422, 427 (1978) (15 U.S.C. § 1); Morissette, 342

U.S. at 248 (18 U.S.C. § 641). It equally applies to

statutes where it is unclear whether the specified

mental state covers all elements. See Rehaif v.

United States, 139 S. Ct. 2191, 2194 (2019) (18 U.S.C.

§ 924(a)); Flores-Figueroa v. United States, 556 U.S.

646, 647 (2009) (18 U.S.C. § 1028A(a)(1)); Arthur

Andersen LLP v. United States, 544 U.S. 696, 703

(2005) (18 U.S.C. § 1512(b)(2)); X-Citement Video,

Inc., 513 U.S. at 65–66 (18 U.S.C. § 2252); Liparota v.

United States, 471 U.S. 419, 420 (1985) (7 U.S.C.

§ 2024(b)(1)).

In both contexts, the “mere omission” of a mental

state attached to the element in question “should not

be read as dispensing with it.” Elonis, 135 S. Ct. at

2009 (internal quotation marks omitted). Instead,

the critical question is whether the element

“separat[es] legal innocence from wrongful conduct.”

X-Citement Video, Inc., 513 U.S. at 72–73 (“[The]

6

presumption in favor of a scienter requirement

should apply to each of the statutory elements that

criminalize otherwise innocent conduct.”); FloresFigueroa, 556 U.S. at 652. If the element plays that

role, the Court generally requires proof of knowledge

or intent for that element. See, e.g., Gypsum, 438

U.S. at 442; Staples, 511 U.S. at 619. Put differently,

the Court “read[s] into [the] statute . . . that mens rea

which is necessary to separate wrongful conduct from

otherwise innocent conduct.” Carter v. United States,

530 U.S. 255, 269 (2000) (internal quotation marks

omitted).3

In Liparota v. United States, for example, the

Court considered a statute proscribing knowing

possession or use of food stamps “in any manner not

authorized by [the statute] or the regulations.” 471

U.S. at 420 (quoting 7 U.S.C. § 2024(b)(1)). The

question was whether the statute merely required

proof that the defendant knowingly used or possessed

The Model Penal Code categorized the various mental

states as purpose, knowledge, recklessness, and negligence.

Model Penal Code § 2.02 (1985). Purpose denotes the actor’s

“conscious object” to achieve a result, while knowledge indicates

awareness “that his conduct is of [the specified] nature or that

[the specified attendant] circumstances exist.” Id. § 2.02(2)(a)(i)

& (b)(i). The Court has “characterized the distinction between

[purpose and knowledge] as ‘limited,’ explaining that it ‘has not

been considered important’ for many crimes.” Borden v. United

States, 141 S. Ct. 1817, 1823 (2021) (plurality opinion) (quoting

United States v. Bailey, 444 U.S. 394, 404 (1980)). This brief

does not address crimes where the distinction between purpose

and knowledge may matter. Instead, it addresses crimes where

the presumption of mens rea requires the actor’s awareness of

the facts and circumstances that make his conduct wrongful.

3

7

food stamps, or whether it additionally required proof

of knowledge that such use or possession was “not

authorized.”

The Court adopted the latter

interpretation, explaining that otherwise the statute

“would have criminalized ‘a broad range of

apparently innocent conduct’ and swept in

individuals who had no knowledge of the facts that

made their conduct blameworthy.” Elonis, 135 S. Ct.

at 2009 (quoting Liparota, 471 U.S. at 426).

Similarly, in Arthur Andersen LLP v. United

States, the Court considered a statute that proscribes

“knowingly us[ing] intimidation or physical force,

threate[ning], or corruptly persuad[ing] another

person” with intent to withhold records from an

official proceeding. 544 U.S. at 698 (quoting 18

U.S.C. § 1512(b)(2)). The government had charged

Arthur Andersen with violating the statute by

encouraging its employees to destroy documents

related to the Enron accounting scandal in

accordance with the company’s document retention

policy. The district court instructed the jury that it

could convict “even if [Arthur Andersen] honestly and

sincerely believed” that it was lawfully following its

policy, and the court of appeals affirmed. Id. at 702,

706 (citation omitted).

This Court reversed,

construing “knowingly . . . corruptly persuades” to

require “awareness, understanding, or consciousness

of wrongdoing.” Id. at 705–06. The Court explained

that the statute’s knowledge requirement is the “key”

to separating innocent from wrongful conduct. Id. at

704–06. Absent proof of a defendant’s consciousness

of wrongdoing, the statute would reach a range of

innocent conduct that results in withholding

documents—including lawful adherence to document

8

retention policies and lawful invocation of attorneyclient privilege. Id.

Similar distinctions run throughout other cases

interpreting felony offenses, reflecting the Court’s

adherence to the principle that “wrongdoing must be

conscious.” Morissette, 342 U.S. at 252. Where the

element in question makes the conduct wrongful,

scienter is required. See, e.g., X-Citement Video, Inc.,

513 U.S. at 72–73, 78 (requiring knowledge, for childpornography trafficking offense, that performers are

in fact underage); Staples, 511 U.S. at 614–15, 619

(requiring

knowledge,

for

firearm-registration

offense, of features that subject firearm to

registration requirement). Where the element is not

necessary to establish the wrongfulness of the

conduct, the presumption of mens rea may be

overcome in light of other interpretive principles. See

United States v. Balint, 258 U.S. 250, 251–54 (1922)

(construing drug offense to require only proof that

defendant knowingly sold dangerous drugs, not that

he knew such drugs were “narcotics” within statutory

ambit); United States v. Freed, 401 U.S. 601 (1971)

(upholding regulation of unregistered-hand-grenade

possession without proof of scienter); see also Staples,

511 U.S. at 608–14 (distinguishing Balint on this

basis).

The only context in which the Court does not

always apply the “presumption in favor of scienter” is

in interpreting what have been called public welfare

offenses. See Staples, 511 U.S. at 617–18 & n.3;

Morrisette, 342 U.S. at 254–56 (describing rise of

these regulatory violations, many of which seek to

minimize the “danger or probability” of harm from

“particular

industries,

trades,

properties

or

9

activities”). But the cases originating that doctrine

“almost uniformly involved statutes that provided for

only light penalties such as fines or short jail

sentences,” Staples, 511 U.S. at 616 (citation

omitted), where “conviction does no grave damage to

an offender’s reputation,” Morissette, 342 U.S. at 256.

By contrast, where the full force of criminal law is

brought to bear through a felony charge, the Court

adheres to the presumption that proof of the

defendant’s consciousness of wrongdoing is required.

See Rehaif, 139 S. Ct. at 2197; Staples, 511 U.S. at

617; Gypsum, 438 U.S. at 438.

2. The presumption in favor of scienter protects

vital due process interests. “It is common ground

that this Court, where possible, interprets

congressional enactments so as to avoid raising

serious constitutional questions.” Cheek v. United

States, 498 U.S. 192, 203 (1991). Serious due process

concerns arise when a criminal “law [is] so vague that

it fails to give ordinary people fair notice of the

conduct it punishes, or so standardless that it invites

arbitrary enforcement.” Johnson v. United States,

576 U.S. 591, 595 (2015). “The constitutional vice in

such a statute is the essential injustice to the accused

of placing him on trial for an offense, the nature of

which the statute does not define and hence of which

it gives no warning.” Screws v. United States, 325

U.S. 91, 101 (1945) (plurality opinion). “Vague laws

contravene the ‘first essential of due process of law’

that statutes must give people of ‘common

intelligence’ fair notice of what the law demands of

them.” United States v. Davis, 139 S. Ct. 2319, 2325

(2019) (quoting Connally v. Gen. Constr. Co., 269 U.S.

385, 391 (1926)).

10

This Court has “long recognized that the

constitutionality of a vague statutory standard is

closely related to whether that standard incorporates

a requirement of mens rea.” Colautti v. Franklin, 439

U.S. 379, 395 (1979) (citing, inter alia, Gypsum, 438

U.S. at 434–46). Where statutes with indefinite

standards incorporate strong mens rea requirements,

they are less likely to prompt vagueness concerns.

See, e.g., Skilling v. United States, 561 U.S. 358, 412

(2010) (statutory mens rea requirement in honestservices prosecutions under 18 U.S.C. § 1346 “blunts

any notice concern”).

The same principle is at work when the Court

relies on the presumption of scienter to infer a mens

rea requirement. For example, in Posters ‘N’ Things,

Ltd. v. United States, 511 U.S. 513 (1994), the Court

held that the absence of a “knowingly” requirement in

the text did not mean “that Congress intended to

dispense entirely with a scienter requirement,” id. at

522, and went on to reject a constitutional vagueness

challenge in part because “the scienter requirement

that we have inferred in [the statute] assists in

avoiding any vagueness problem,” id. at 526. This

analysis confirms that by requiring proof of the

defendant’s awareness of every element that makes

his conduct wrongful, the presumption of scienter

alleviates vagueness concerns that may otherwise

cast doubt on statutes that impose criminal liability

based on imprecise standards.

B.

Mens Rea Requirements Have Particular

Importance

Where

Complex

Regulatory

Schemes Are Backed By Criminal Penalties

The foregoing analysis applies across the

spectrum of federal criminal law, but especially for

11

laws that impose felony-level punishment for

regulatory violations.

In multiple regulatory

contexts, such as tax law and antitrust, strong mens

rea requirements are the only bulwark against

criminalization of innocent conduct.

And when

necessary to protect against penalizing innocent

conduct, the presumption of mens rea can require

knowledge of the legal consequences of facts as well

as knowledge of the facts themselves. Lower courts

that deviate from these principles misconstrue this

Court’s precedent and underscore why the

presumption of mens rea must apply when complex

regulatory schemes carry serious criminal penalties.

1.

Where statutes criminalize the “willful”

violation of complex regulatory schemes, this Court

has held that “willfulness” requires knowledge of the

law. “Willful” “is a word of many meanings, its

construction often being influenced by its context.”

Spies v. United States, 317 U.S. 492, 497 (1943).

“[W]hen used in the criminal context, a ‘willful’ act is

one undertaken with a ‘bad purpose.’” Bryan v.

United States, 524 U.S. 184, 191 (1998). Generally,

“in order to establish a ‘willful’ violation of a statute,

‘the Government must prove that the defendant acted

with knowledge that his conduct was unlawful.’” See

id. at 191–92 (quoting Ratzlaf v. United States, 510

U.S. 135, 137 (1994)) (upholding conviction for

willfully dealing in firearms without a federal license

when defendant knew his conduct was unlawful, even

though he did not know the specific federal licensing

requirement that he violated).

In certain situations, however, this Court has

required a “more particularized showing” of

willfulness.

See id.

This principle applies in

12

technical, complex areas of the law where a higher

level of awareness is indispensable to finding

culpable conduct. For example, Cheek v. United

States concerned certain provisions of the federal tax

code that criminalized “willfully attempt[ing]” to

evade taxes and “willfully fail[ing]” to file federal tax

returns. 498 U.S. at 194. “The proliferation of

statutes and regulations,” this Court reasoned, “has

sometimes made it difficult for the average citizen to

know and comprehend the extent of the duties and

obligations imposed by the tax laws.” Id. at 199–200.

Accordingly, the Court held that willfulness in the

tax context requires the government to prove “actual

knowledge of the pertinent legal duty.” Id. at 202. A

defendant’s subjective, good-faith misunderstanding

of the law negates the requisite mens rea to convict

him. Id. at 206–07.4

Similarly, in Ratzlaf v. United States, the

defendant purchased cashier’s checks from multiple

banks, each for less than $10,000, the threshold at

which the bank was required under federal law to

report a cash transaction. 510 U.S. at 137. He was

charged with “structuring” financial transactions for

the purpose of evading the bank’s federal reporting

requirements. Id. The Court held that it was not

enough for the government to prove that the

defendant structured cash transactions and did so

4 The Court also observed that “the more unreasonable the

asserted beliefs or misunderstandings are, the more likely the

jury will consider them to be nothing more than simple

disagreement with known legal duties imposed by the tax laws”

and will infer the requisite knowledge. 498 U.S. at 203–04.

13

with a purpose to avoid the bank’s reporting duty—it

must also show that he did so with knowledge of his

own “duty not to avoid triggering such a report.” Id.

at 140, 147.

Both Cheek and Ratzlaf “involved highly

technical statutes that presented the danger of

ensnaring individuals engaged in apparently

innocent conduct.” Bryan, 524 U.S. at 194; see also

Liparota, 471 U.S. at 426 (requiring a showing that

defendant knew his conduct was unauthorized by

statute or regulations, because to hold otherwise

“would be to criminalize a broad range of apparently

innocent conduct”). Several lower courts have relied

on the same principle to require a heightened

showing of willfulness in complex fields such as

election law and health care fraud. For example, in

United States v. Curran, 20 F.3d 560 (3d Cir. 1994),

the court of appeals overturned the defendant’s

conviction for “willfully” causing a campaign

treasurer to submit false contribution reports when

the defendant did not know his conduct was

unlawful. Id. at 567–69. And in Hanlester Network

v. Shalala, 51 F.3d 1390 (9th Cir. 1995), the court of

appeals construed “knowingly and willfully” in the

Medicare/Medicaid anti-kickback provision of the

Social Security Act, 42 U.S.C. § 1320a-7b(b)(7), as

requiring the government to prove, in part, that the

defendant had the specific intent to disobey the law.

Id. at 1400.

2.

Even absent a statutory “willfulness”

requirement, when the line between criminalized

conduct and socially desirable conduct is hard to

discern, some level of “knowledge” of wrongfulness is

required before criminal liability can attach. The

14

paradigmatic example is the Sherman Act. By its

text, the Sherman Act prohibits “[e]very contract,

combination . . . or conspiracy, in restraint of trade,”

15 U.S.C. § 1, and any “monopol[y], or attempt to

monopolize” interstate or foreign commerce, id. § 2.

Violations of either Section 1 or Section 2 are felonies

that carry a maximum of 10 years imprisonment and

a fine of up to $1,000,000 (for individuals) or $100

million (for corporations). Id.

The Sherman Act has been described as

possessing a “generality and adaptability comparable

to that found to be desirable in constitutional

provisions.” Appalachian Coals, Inc. v. United States,

288 U.S. 344, 359–60 (1933). On its face, the

Sherman Act sits uneasily with criminal law. “The

prohibitions of the Sherman Act are, after all, quite

vague and general.” Phillip E. Areeda & Herbert

Hovenkamp, Antitrust Law: An Analysis of Antitrust

Principles and Their Application ¶ 303 (3d ed. 2006).

As this Court has observed, “[t]he Sherman Act,

unlike most traditional criminal statutes, does not, in

clear and categorical terms, precisely identify the

conduct which it proscribes.” Gypsum, 438 U.S. at

438. Rather, it authorizes “[b]oth civil remedies and

criminal sanctions” for “the conduct proscribed—

restraints of trade or commerce and illegal

monopolization—without reference to or mention of

intent or state of mind.”

Id.

And “judicial

elaboration of the Act [has not] always yielded the

clear and definitive rules of conduct which the statute

omits.” Id.

Absent mens rea protections, these ambiguities

could threaten criminal sanctions for business

decisions taken in good faith. The leading antitrust

15

treatise has noted the inherent “unfairness of

punishing a reasonable person who saw or weighed

the relevant economic or other data differently from a

later judge or jury pronouncing the conduct

unreasonable.” Areeda & Hovenkamp, supra, ¶ 303.

Accordingly, despite the absence of an express mens

rea provision, this Court has construed the Sherman

Act’s criminal offenses as requiring proof of intent.

See Gypsum, 438 U.S. at 443. Warning of the risks of

imposing “criminal liability on a corporate

official . . . for engaging in such conduct which only

after the fact is determined to violate the statute

because of anticompetitive effects, without inquiring

into the intent with which it was undertaken,” id. at

441, the Gypsum Court rejected the government’s

argument that intent could be inferred from any

agreement that had the effect of raising prices, id. at

435–36. Instead, to establish criminal liability, the

government must also prove that the defendant acted

with at least “knowledge of [the] probable

consequences” that an action would have an

anticompetitive effect. Id. at 444. This holding

reflected the general requirement of mens rea as an

element of a crime and ensured that the Act would

criminalize

only

“conscious

and

calculated

wrongdoing” as opposed to good-faith business

conduct. Id. at 442.

3. Beyond requiring knowledge of the facts that

separate innocent from criminal conduct, this Court

has applied the presumption of mens rea to the legal

consequences of facts when necessary to draw the line

between wrongful and socially desirable behavior.

Liparota v. United States exemplifies that principle.

As noted, the statute in that case criminalized the

16

unauthorized use or possession of food stamps. 471

U.S. at 420. To protect against criminalizing the use

of food stamps to make “innocent” purchases—such

as in a store that illegally charged higher prices to

food-stamp customers—the Court required that “the

defendant knew his conduct to be unauthorized by

statute or regulations.” Id. at 425–26.

More recently, the Court applied this principle to

hold that a person charged with unlawful possession

of a firearm must know of the status that made his

possession unlawful. Rehaif, 139 S. Ct. at 2195–97

(construing 18 U.S.C. § 922(g)). The Court rejected

the government’s argument that requiring knowledge

of status—for example, whether an alien is “illegally

or unlawfully in the United States,” 18 U.S.C.

§ 922(g)(5)(A)—“is a question of law, not fact,” and

thus falls within “the well-known maxim that

‘ignorance of the law’ (or a ‘mistake of law’) is no

excuse.” 139 S. Ct. at 2198 (citation omitted). The

Court explained that the maxim does not apply

“where a defendant ‘has a mistaken impression

concerning the legal effect of some collateral matter

and that mistake results in his misunderstanding the

full significance of his conduct,’ thereby negating an

element of the offense.” Id. (quoting 1 Wayne R.

LaFave & Austin W. Scott, Substantive Criminal

Law § 5.1(a), at 575 (1986)).5

5 As the Court noted, the Model Penal Code embraces this

same principle: “[A] mistake of law is a defense if the mistake

negates the ‘knowledge . . . required to establish a material

element of the offense[.]’” Rehaif, 139 S. Ct. at 2198 (ellipsis in

original) (quoting Model Penal Code § 2.04, at 27).

17

Accordingly, where regulatory offenses separate

lawful from unlawful conduct based on whether

statutes or regulations authorize the defendant’s

conduct, or whether the defendant had a particular

status or responsibility, the presumption of mens rea

requires proof that the actor knew that his conduct

was not authorized or that he had the relevant

status. Otherwise, the law risks punishing conduct

without awareness of wrongdoing.

4. Lower court decisions that deviate from these

principles underscore the need for this Court to

reaffirm that strong mens rea requirements

presumptively apply to felony violations of criminalregulatory statutes. One context featuring such

deviations

involves

the

public-welfare-offense

doctrine applied in United States v. International

Minerals & Chemical Corp., 402 U.S. 558 (1971).

For example, the Clean Water Act (CWA), which

regulates discharges of pollutants into United States

waters, makes it a felony to “knowingly violate[]”

various provisions within the statute. 33 U.S.C.

§ 1319(c)(2)(A). In United States v. Weitzenhoff, 35

F.3d 1275, 1283 (9th Cir. 1993), the court of appeals

upheld a jury instruction that the government need

not prove that the defendant knew that “his act or

omissions were unlawful.” Relying on International

Minerals—which held that the defendant’s knowledge

of a corrosive-liquid-transportation regulation was

not required to obtain a misdemeanor conviction for

violating that regulation, 402 U.S. at 562–63—the

court concluded that “knowingly violates” refers to

the acts that constituted the violation, but not to the

existence of the requirements that the defendant has

violated. 35 F.3d at 1285. And because the CWA is

18

“clearly designed to protect the public at large from

the potentially dire consequences of water pollution,”

the court found that the criminal provisions of the

CWA qualify as public welfare offenses and therefore

do not require a presumption of scienter. Id. at 1286;

see also United States v. Hopkins, 53 F.3d 533, 537–

38, 540 (2d Cir. 1995) (holding that CWA provision

creates a public welfare offense and that a violation

does not require knowledge that conduct violated any

provision of the law or regulation); United States v.

Sinskey, 119 F.3d 712, 715–16 (8th Cir. 1997) (silent

on whether CWA violation is a public welfare offense

but holding that defendant did not need to have

knowledge that his conduct violated CWA).

Similarly, the Clean Air Act, the federal statute

that regulates air pollution, makes it a felony for “any

person” to “knowingly violate[]” certain provisions of

the statute. 42 U.S.C. § 7413(c). As with the

decisions concerning the Clean Water Act, some

courts have applied International Minerals to the

Clean Air Act, holding that it is a public welfare

statute and that consciousness of wrongdoing is not

required to establish a felony violation. In United

States v. Weintraub, 273 F.3d 139 (2d Cir. 2001), for

example, the court of appeals acknowledged that “[o]n

its face, the phrase [‘knowingly violates’] appears to

suggest that the government must prove that the

defendant knew he was violating the law.” Id. at 147.

But relying on International Minerals and its CWA

precedent in Hopkins, the court rejected that

interpretation and held that “the phrase ‘knowingly

violates’ requires knowledge of facts and attendant

circumstances that comprise a violation of the

19

statute, not specific knowledge that one’s conduct is

illegal.” Id.

These decisions risk making felons out of people

engaging in innocent conduct that inadvertently

steps over the line drawn by complex and technical

regulatory

schemes.

Stringent

mens

rea

requirements are necessary to protect against that

risk.

Although the courts in Weitzenhoff and

Weintraub cited International Minerals in forgoing

ordinary mens rea requirements, that decision does

not justify relaxing mens rea requirements for felonylevel punishment in complex regulatory schemes.

International Minerals does not dispense with a

knowledge-of-wrongdoing requirement under any

statute that regulates any sort of hazardous

materials.

See Weitzenhoff, 35 F.3d at 1285.

International Minerals concerned a regulation

specific to “corrosive liquid,” 402 U.S. at 559—not a

statute that also covered materials that a lay person

would not recognize as likely to be regulated. The

Clean Water Act’s definition of “pollutant” covers

sewage, garbage, and radioactive materials.

33

U.S.C. § 1362(6). But it also covers heat, rock, and

sand. Id. The Clean Air Act’s definition of “air

pollutant” covers “any air pollution agent or

combination of such agents, including any physical,

chemical, [or] biological substance or matter which is

emitted into or otherwise enters the ambient air.” 42

U.S.C. § 7602(g) (emphasis added).

To apply

International

Minerals,

which

concerned

a

misdemeanor violation of a regulation limited to

“dangerous or deleterious devices or products or

obnoxious waste materials,” is to step outside the

lines this Court carefully drew in that case, where the

20

Court noted that “[i]n Balint the Court was dealing

with drugs, in Freed hand grenades, in this case with

sulfuric and other dangerous acids.” 402 U.S. at 564–

65. On the facts of International Minerals, “the

probability of regulation is so great that anyone who

is aware that he is in possession of [dangerous acids]

or dealing with them must be presumed to be aware

of the regulation.” Id. But that is not automatically

true in all regulation that may protect against

pollution.

The public welfare doctrine applies in “limited

circumstances.” Gypsum, 438 U.S. at 437. Those

circumstances do not include statutes that regulate—

in addition to toxic waste—rock, sand, and heat. 33

U.S.C. § 1362(6) (defining “pollutant”). Additionally,

the doctrine is reserved for offenses that “almost

uniformly involve[] statutes that provide[] for only

light penalties such as fines or short jail sentences,”

Staples, 511 U.S. at 616, and for which conviction

“does no grave damage to an offender’s reputation.”

Morissette, 342 U.S. at 256. Extending this exception

to serious felonies runs counter to the principle that

“offenses that require no mens rea generally are

disfavored” and that the penalty is a “significant

consideration in determining whether the statute

should be construed as dispensing with mens rea.”

Staples, 511 U.S. at 606, 616.

5. Requiring mens rea about the wrongfulness of

conduct does not allow individuals to redefine the

legal or professional standards that govern their

liability. Defining those standards objectively is fully

compatible with demanding that before felony

criminal liability is imposed, the government must

prove subjective knowledge of their requirements.

21

See, e.g., Posters ‘N’ Things, 511 U.S. at 517–25

(construing drug-paraphernalia statute to require an

objective definition of drug paraphernalia before

holding that the government must prove that the

defendant “knew that the items at issue are likely to

be used with illegal drugs”); United States v. Hurwitz,

459 F.3d 463, 478–82 (4th Cir. 2006) (construing

controlled-substances

statute

to

embody

an

“objective” standard of “proper medical practice,”

before holding that the defendant cannot be convicted

if he acted in good faith to conform to that standard);

United States v. Feingold, 454 F.3d 1001, 1009–13

(9th Cir. 2006) (describing with approval jury

instructions referring to a “national standard of care”

for physicians before holding that the government

must prove that a physician “intentionally”

prescribed drugs “for no legitimate medical purpose

and outside the usual course of professional

practice”). But absent a showing of consciousness of

wrongdoing for felony liability, the law would punish

violators even when they make honest attempts to

comply with recondite, ambiguous, or debatable

regulatory standards. To “separat[e] legal innocence

from wrongful conduct,” X-Citement Video, Inc., 513

U.S. at 72–73, the presumption in favor of mens rea

must apply to the facts that mark the dividing line,

thereby preserving the guiding principle that

“wrongdoing must be conscious,” Morrissette, 342

U.S. at 252.

C.

Overdeterrence

Considerations

Support

Requiring Mens Rea For The Relevant Facts

Separating Lawful From Unlawful Conduct

Mens rea requirements also serve the important

purpose of reducing the risk of overdeterrence of

22

productive and socially valuable conduct in regulated

industries.

1. Regulatory crimes are often “byproducts of

activities that society does not wish to prohibit

entirely.” See Mark A. Cohen, Environmental Crime

and Punishment: Legal/Economic Theory and

Empirical Evidence on Enforcement of Federal

Environmental Statutes, 82 J. Crim. L. &

Criminology 1054, 1062 (1992). As departures from

“legitimate business activities,” id. at 1104, these

crimes are “generally ‘conditionally deterred’” by

statute, because society stands to “benefit[] from the

underlying activity that gives rise to the regulatory

violation,” id. at 1062.

That means that the

definition of criminal sanctions must be carefully

calibrated to avoid overdeterrence. Strict penalties

and stringent standards might increase deterrence of

harmful conduct within regulated industries. But

excess deterrence imposes costs on society. See id.; cf.

Bruce H. Kobayashi, Antitrust, Agency, and Amnesty:

An Economic Analysis of the Criminal Enforcement of

the Antitrust Laws Against Corporations, 69 Geo.

Wash. L. Rev. 715, 716 (2001). See generally Exxon

Shipping Co. v. Baker, 554 U.S. 471, 492–513 (2008).

The risk of overdeterring productive and lawful

conduct is heightened when complex regulations are

enforced through criminal statutes or, for that

matter, through civil statutes with punitive

provisions, such as the False Claims Act, 31 U.S.C.

§ 3729, et seq. See Universal Health Servs., Inc. v.

United States ex rel. Escobar, 579 U.S. 176, 182

(2016) (civil penalties of the False Claims Act are

“essentially punitive in nature” (citation omitted)).

As a general matter, “[t]he harsher the sanctions for

23

violation, the greater the overdeterrence and the

resulting costs in socially beneficial conduct forgone.”

Richard A. Posner, Economics, Politics, and the

Reading of Statutes and the Constitution, 49 U. Chi.

L. Rev. 263, 280 (1982).

And the risk of

overdeterrence is heightened where standards for

criminal liability are unclear: “[S]ocially efficient

behavior can be deterred when there is a possibility

of legal error, i.e., when the criminal law is

erroneously applied to legal behavior.” Kobayashi,

supra, at 732, 735. Both of these conditions—

criminal penalties and uncertain legal standards—

often combine in complex business regulation. See

Gypsum, 438 U.S. at 439 (“Modern business

patterns . . . are so complex that market effects of

proposed conduct are only imprecisely predictable.”).

In these contexts, requiring the government to prove

knowingly wrongful conduct before imposing criminal

liability is indispensable to avoid discouraging

individuals from engaging in innovative, productive,

and creative business activities that lie within the

“gray zone of socially acceptable and economically

justifiable” conduct. Cf. id. at 440–41.

2. The Court has used just that approach to

counter the risk of overdeterrence in the antitrust

context. In Gypsum, this Court recognized that the

Sherman Act, “unlike most traditional criminal

statutes, does not, in clear and categorical terms,

precisely identify the conduct which it proscribes.”

438 U.S. at 438. Citing concerns about criminalizing

“salutary and procompetitive conduct” by good-faith

actors, Gypsum rejected a reading of the Sherman

Act that would have dispensed with a mens rea

requirement. Id. at 441. Because “procompetitive

24

conduct” can lie “close to the borderline of

impermissible conduct,” the Court was “unwilling to

construe the Sherman Act as mandating a regime of

strict-liability criminal offenses.” Id. at 436, 441.

The Gypsum Court explained that it held a

“generally inhospitable attitude to non-mens rea

offenses” and that this attitude was “reinforced by an

array of considerations” in the antitrust context. Id.

at 438. Specifically, the Court reasoned that it may

“be difficult . . . to tell” when “projected actions will

run afoul of the Sherman Act’s criminal strictures,”

and given this uncertainty, the “imposition of

criminal liability on a corporate official . . . without

inquiring into the intent” behind his conduct “holds

out the distinct possibility of overdeterrence.” Id. at

439, 441. As a result, the Court expressed wariness

about imposing criminal liability without proof of

mens rea. See id. at 438, 441.

Concerns about overdeterrence are not limited to

the antitrust realm. Lawful and productive conduct

can be chilled on the (often vague and broad) margins

of tax, financial, and environmental regulation if

liability is imposed without conscious fault. And

while “overdeterrence is the characteristic vice of

broad [statutory] construction,” overdeterrence can

“be reduced by careful specification of . . . statutory

limits.”

Posner, supra, at 280–81.

Mens rea

requirements play precisely this role: requiring

consciousness of wrongdoing reduces the risk that

individuals will refrain from “socially acceptable and

economically justifiable business conduct” within

these regulated industries out of excess caution. Cf.

Gypsum, 438 U.S. at 441.

25

3. Avoiding overdeterrence from the risk of

inadvertent regulatory violations is particularly

appropriate given the wide array of alternative civil

remedies to compensate victims and deter violations.

These include civil administrative sanctions, see

Hudson v. United States, 522 U.S. 93, 105 (1997)

(noting that civil “money penalties and debarment

sanctions will deter others from emulating

petitioners’ conduct”); administrative oversight, see,

e.g., 33 U.S.C. § 1318(a) (empowering the

Environmental Protection Agency to inspect books,

records, and facilities relevant to CWA enforcement);

and in certain circumstances private actions, see

Friends of the Earth, Inc. v. Laidlaw Envt’l Servs.

(TOC), Inc., 528 U.S. 167, 174–75 (2000) (describing

Clean Water Act’s citizen-suit provisions). And even

in the civil arena, this Court has been careful to

ensure that available remedies strike the right

balance “to reach a generally accepted optimal level

of penalty and deterrence.” See Exxon Shipping Co.,

554 U.S. at 500 (affirming availability of punitive

damages under maritime common law but reducing

amount awarded). The in terrorem effect of federal

criminal law is too blunt an instrument to be the sole

vehicle to achieve the socially beneficial ends of

encouraging law compliance and redressing the harm

from regulatory violations.

For these reasons as well, this Court’s continued

adherence to the presumption in favor of scienter is of

vital importance. Where complex regulatory schemes

are enforced through criminal sanctions, specifying a

mens rea standard can decrease the risk that

individuals will “shun[]” productive and beneficial

work to avoid criminal punishment for “a good-faith

26

error of judgment.” Gypsum, 438 U.S. at 441. The

absence of a mens rea requirement would shift the

focus of felony liability toward “regulat[ing] business

practices” rather than “punish[ing] conscious and

calculated wrongdoing.” Id. at 442.

CONCLUSION

For the foregoing reasons, the Court should

reaffirm the presumption that a showing of mens rea

on the elements of an offense that distinguish lawful

from unlawful conduct is a necessary prerequisite for

felony punishment for regulatory offenses.

Respectfully submitted,

Tara S. Morrissey

Andrew R. Varcoe

U.S. CHAMBER LITIGATION

CENTER

1615 H St. NW

Washington, DC 20062

Bruce Pettig

O’MELVENY & MYERS LLP

7 Times Square

New York, NY 10036

December 27, 2021

Michael R. Dreeben

Counsel of Record

Daniel Lautzenheiser

Nina Oat

O’MELVENY & MYERS LLP

1625 I St. NW

Washington, DC 20006

(202) 383-5400

mdreeben@omm.com