Petitioners Brief — Joseph Percoco, Petitioner v. United States, et al.

Supreme Court briefAug 31, 2022

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No. 21-1158

IN THE

Supreme Court of the United States

JOSEPH PERCOCO,

Petitioner,

UNITED STATES,

Respondent.

On Writ Of Certiorari

To The United States Court Of Appeals

For The Second Circuit

BRIEF FOR PETITIONER

BARRY A. BOHRER

MINTZ, LEVIN, COHN,

FERRIS, GLOVSKY &

POPEO, P.C.

666 Third Ave.

New York, NY 10017

MICHAEL L. YAEGER

CARLTON FIELDS, P.A.

405 Lexington Ave.,

36th Floor

New York, NY 10174

YAAKOV M. ROTH

Counsel of Record

BRINTON LUCAS

BRETT WIERENGA

JONES DAY

51 Louisiana Ave., NW

Washington, DC 20001

(202) 879-3939

yroth@jonesday.com

MATTHEW J. RUBENSTEIN

JONES DAY

90 South 7th St.

Minneapolis, MN 55402

Counsel for Petitioner

QUESTION PRESENTED

Does a private citizen who holds no elected office or

government employment, but has informal political or

other influence over governmental decisionmaking,

owe a fiduciary duty to the general public such that he

can be convicted of honest-services fraud?

PARTIES TO THE PROCEEDING

Petitioner, who was a Defendant-Appellant in the

Second Circuit, is Joseph Percoco.

Steven Aiello was also a Defendant-Appellant in

the Second Circuit and, pursuant to Rule 12.6 of this

Court’s Rules, is a Respondent herein.

Respondent, who was the Appellee in the Second

Circuit, is the United States.

Joseph Gerardi, Louis Ciminelli, and Alain

Kaloyeros were also Defendants-Appellants in the

Second Circuit. Peter Galbraith Kelly, Jr., Michael

Laipple, and Kevin Schuler were Defendants in the

district court.

iii

TABLE OF CONTENTS

Page

QUESTION PRESENTED.......................................... i

PARTIES TO THE PROCEEDING ........................... ii

TABLE OF AUTHORITIES ....................................... v

INTRODUCTION ....................................................... 1

OPINION BELOW ..................................................... 4

JURISDICTION ......................................................... 4

PROVISION INVOLVED .......................................... 4

STATEMENT ............................................................. 4

The Honest-Services Doctrine ................... 5

The Margiotta Theory ................................ 8

The Underlying Facts .............................. 13

The Indictment and Trial ........................ 15

The Second Circuit’s Decision.................. 17

SUMMARY OF ARGUMENT .................................. 18

ARGUMENT ............................................................ 21

MARGIOTTA WAS WRONG FROM ITS

INCEPTION ......................................................... 21

Private Citizens Owe No Duties

To Act in the Public Interest.................... 21

Reliance and Control Do Not

Generate a Duty To Provide

Honest Services ........................................ 24

TABLE OF CONTENTS

(continued)

Page

II.

MARGIOTTA IS NOW ALSO FORECLOSED BY

THIS COURT’S PRECEDENTS ............................... 29

Skilling Shut the Door on Novel

Theories of Honest-Services Fraud ......... 29

McDonnell Limited Federal Bribery

Law to the Sale of Official Powers ........... 34

III. MARGIOTTA OFFENDS CONSTITUTIONAL

NORMS ............................................................... 38

The Second Circuit’s Standard

Chills First Amendment Activity ............ 38

The Second Circuit’s Standard

Interferes with State Prerogatives .......... 42

The Second Circuit’s Standard Is

Vague, Open-Ended, and Subject

to Abuse .................................................... 44

IV. REJECTING MARGIOTTA REQUIRES

REVERSAL .......................................................... 47

CONCLUSION ......................................................... 49

TABLE OF AUTHORITIES

Page(s)

CASES

Ams. for Prosperity Found. v. Bonta,

141 S. Ct. 2373 (2021) .......................................... 41

Ariz. Free Enter. Club’s Freedom Club

PAC v. Bennett,

564 U.S. 721 (2011) .............................................. 41

Carpenter v. United States,

484 U.S. 19 (1987) ................................................ 22

Carter v. Carter Coal Co.,

298 U.S. 238 (1936) .............................................. 28

Cheese Shop Int’l, Inc. v. Steele,

303 A.2d 689 (Del. Ch. 1973) ............................... 26

Citizens United v. FEC,

558 U.S. 310 (2010) .................................. 39, 41, 42

City of Columbia v. Omni Outdoor

Advert., Inc.,

499 U.S. 365 (1991) .............................................. 38

City of Hope Nat’l Med. Ctr. v.

Genentech, Inc.,

181 P.3d 142 (Cal. 2008) ...................................... 24

Dixson v. United States,

465 U.S. 482 (1984) ........................................ 36, 37

FEC v. Wis. Right to Life, Inc.,

551 U.S. 449 (2007) .............................................. 46

Gentile v. State Bar of Nev.,

501 U.S. 1030 (1991) ............................................ 47

TABLE OF AUTHORITIES

(continued)

Page(s)

Gregory v. Ashcroft,

501 U.S. 452 (1991) .............................................. 42

Hall v. Schoenwetter,

686 A.2d 980 (Conn. 1996) ................................... 24

In re Jennings’ Est.,

55 N.W.2d 812 (Mich. 1952) ................................ 27

Kelly v. United States,

140 S. Ct. 1565 (2020) .......................................... 43

Lee v. LPP Mortg. Ltd.,

74 P.3d 152 (Wyo. 2003) ...................................... 25

Loving v. United States,

517 U.S. 748 (1996) .............................................. 22

McCormick v. United States,

500 U.S. 257 (1991) .............................................. 40

McCutcheon v. FEC,

572 U.S. 185 (2014) .............................................. 40

McDonnell v. United States,

579 U.S. 550 (2016) ....................... 3, 17, 19, 29, 34,

35, 36, 37, 38, 41,

42, 43, 44, 47, 48

McNally v. United States,

483 U.S. 350 (1987) ..................... 6, 7, 8, 12, 17, 19,

21, 29, 30, 32,

33, 44, 45, 46

Mobil Oil Corp. v. Rubenfeld,

339 N.Y.S.2d 623 (Civ. Ct. 1972) ......................... 26

vii

TABLE OF AUTHORITIES

(continued)

Page(s)

Octane Fitness, LLC v. ICON

Health & Fitness, Inc.,

572 U.S. 545 (2014) .............................................. 38

Regions Bank v. Schmauch,

582 S.E.2d 432 (S.C. Ct. App. 2003) .................... 25

Shushan v. United States,

117 F.2d 110 (5th Cir. 1941) .................................. 5

Skilling v. United States,

561 U.S. 358 (2010) ....................... 3, 5, 7, 8, 19, 21,

29, 30, 31, 32,

33, 36, 37, 46

Sorich v. United States,

555 U.S. 1204 (2009) .............................................. 7

Trs. of Jesse Parker Williams

Hosp. v. Nisbet,

14 S.E.2d 64 (Ga. 1941) ....................................... 27

United States v. Adler,

274 F. Supp. 2d 583 (S.D.N.Y. 2003) ......... 2, 12, 31

United States v. Birdsall,

233 U.S. 223 (1914) .............................................. 35

United States v. Bohonus,

628 F.2d 1167 (9th Cir. 1980) ................................ 6

United States v. Chestman,

947 F.2d 551 (2d Cir. 1991) (en banc) ........... 27, 28

United States v. Frost,

125 F.3d 346 (6th Cir. 1997) .................................. 7

viii

TABLE OF AUTHORITIES

(continued)

Page(s)

United States v. George,

477 F.2d 508 (7th Cir. 1973) .................................. 6

United States v. Gray,

790 F.2d 1290 (6th Cir. 1986) .............................. 12

United States v. Harriss,

347 U.S. 612 (1954) .............................................. 23

United States v. Holzer,

840 F.2d 1343 (7th Cir. 1988) ........................ 12, 30

United States v. Isaacs,

493 F.2d 1124 (7th Cir. 1974) ................................ 5

United States v. Kenney,

185 F.3d 1217 (11th Cir. 1999) ............................ 36

United States v. Mandel,

591 F.2d 1347 (4th Cir. 1979) .......................... 5, 21

United States v. Margiotta,

688 F.2d 108 (2d Cir. 1982) ...... 2, 3, 5, 8, 9, 10, 11,

12, 16, 17, 18, 19,

20, 21, 22, 23, 24,

25, 26, 27, 28, 29,

30, 31, 32, 33, 34,

35, 36, 37, 38, 39,

40, 41, 42, 43, 44,

45, 46, 47, 48, 49

United States v. Margiotta,

811 F.2d 46 (2d Cir. 1982) ................................... 12

United States v. McClain,

934 F.2d 822 (7th Cir. 1991) .......................... 39, 40

TABLE OF AUTHORITIES

(continued)

Page(s)

United States v. Murphy,

323 F.3d 102 (3d Cir. 2003) ............... 12, 22, 31, 49

United States v. Ochs,

842 F.2d 515 (1st Cir. 1988) ................................ 33

United States v. Procter & Gamble Co.,

47 F. Supp. 676 (D. Mass. 1942) ............................ 6

United States v. R.L.C.,

503 U.S. 291 (1992) .............................................. 37

United States v. Reed,

601 F. Supp. 685 (S.D.N.Y.) ................................. 25

United States v. Rooney,

37 F.3d 847 (2d Cir. 1994) ................................... 49

United States v. Rybicki,

354 F.3d 124 (2d Cir. 2003) (en banc) ................. 27

United States v. Silver,

948 F.3d 538 (2d Cir. 2020) ................................. 48

United States v. Smith,

985 F. Supp. 2d 547 (S.D.N.Y. 2014) ............. 12, 30

United States v. Sorich,

523 F.3d 702 (7th Cir. 2008) .................................. 7

United States v. Sprague,

282 U.S. 716 (1931) .............................................. 22

United States v. Sun-Diamond

Growers of Cal.,

526 U.S. 398 (1999) .............................................. 44

TABLE OF AUTHORITIES

(continued)

Page(s)

United States v. Thomas,

240 F.3d 445 (5th Cir. 2001) ................................ 36

United States v. Urciuoli,

513 F.3d 290 (1st Cir. 2008) ................................ 35

United States v. Warner,

292 F. Supp. 2d 1051 (N.D. Ill. 2003) ............ 12, 31

Yenchi v. Ameriprise Fin., Inc.,

161 A.3d 811 (Pa. 2017) ....................................... 25

Zastrow v. Journal Commc’ns, Inc.,

718 N.W.2d 51 (Wis. 2006) ............................ 24, 26

STATUTES

18 U.S.C. § 201 .............................................. 34, 36, 37

18 U.S.C. § 666 .................................................... 15, 16

18 U.S.C. § 1343 ........................................................ 15

18 U.S.C. § 1346 ......................... 4, 7, 8, 15, 17, 19, 20,

21, 27, 29, 30, 31,

33, 36, 37, 43, 44

18 U.S.C. § 1349 ........................................................ 15

18 U.S.C. § 1951 ........................................................ 15

28 U.S.C. § 1254 .......................................................... 4

N.Y. Civ. Serv. Law § 107 ......................................... 43

N.Y. Pub. Off. Law § 73 ............................................. 43

N.Y. Pub. Off. Law § 74 ............................................. 43

TABLE OF AUTHORITIES

(continued)

Page(s)

OTHER AUTHORITIES

Robert Batey, Vagueness and the

Construction of Criminal StatutesBalancing Acts, 5 VA. J. SOC. POL’Y

& L. 1 (1997) ................................................... 31, 39

Jordi Blanes i Vidal et al., Revolving

Door Lobbyists, 102 AM. ECON.

REV. 3731 (2012) .................................................. 39

G.G. Bogert, The Law of Trusts and

Trustees § 482 (rev. 2d ed. 1978) ......................... 27

Craig M. Bradley, Foreword: Mail

Fraud After McNally and Carpenter:

The Essence of Fraud, 79 J. CRIM. L.

& CRIMINOLOGY 573 (1988) .................................. 31

John C. Coffee, Jr., Modern Mail

Fraud: The Restoration of the

Public/Private Distinction,

35 AM. CRIM. L. REV. 427 (1998) .......................... 31

John C. Coffee, Jr., The Metastasis of

Mail Fraud: The Continuing Story of

the ‘Evolution’ of A White-Collar

Crime, 21 AM. CRIM. L. REV. 1 (1983) ............ 31, 45

Kim Eisler, Hired Guns: The City’s 50

Top Lobbyists, Washingtonian

(June 1, 2007) ....................................................... 39

Ron Elving, Who Is Clinton Confidant

Sidney Blumenthal?, NPR

(May 20, 2015) ...................................................... 45

xii

TABLE OF AUTHORITIES

(continued)

Page(s)

Federalist No. 10 (James Madison)

(Clinton Rossiter ed., 1961) ................................. 23

Thomas Franck & Dan Mangan, Senate

GOP Suggests Biden Fed Nominee

Sarah Bloom Raskin Used Government

Ties To Help Financial Tech Firm,

CNBC (Feb. 3, 2022) ............................................ 45

Daniel J. Hurson, Limiting the Federal Mail

Fraud Statute - A Legislative Approach,

20 AM. CRIM. L. REV. 423 (1983) .............. 22, 23, 31

John Calvin Jeffries, Jr., Legality,

Vagueness, and the Construction of

Penal Statutes, 71 VA. L. REV. 189

(1985) ....................................................... 23, 30, 31,

39, 41, 44

David Mills & Robert Weisberg, Corrupting

the Harm Requirement in White Collar

Crime, 60 STAN. L. REV. 1371 (2008) ................... 31

Evan Minsker, Kanye West and Kim

Kardashian Lobbied Trump in Effort

to Free A$AP Rocky, PITCHFORK

(July 18, 2019) ...................................................... 45

Geraldine Szott Moohr, Mail Fraud and

the Intangible Rights Doctrine:

Someone to Watch Over Us,

31 HARV. J. ON LEGIS. 153 (1994)......................... 31

xiii

TABLE OF AUTHORITIES

(continued)

Page(s)

Ashley Parker & Josh Dawsey, Trump’s

Cable Cabinet: New Texts Reveal the

Influence of Fox Hosts on Previous White

House, WASH. POST (Jan. 9, 2022) ....................... 45

Restatement (Second) of Agency (1958) ............. 22, 28

Restatement (Second) of Torts (1965) ...................... 24

Revolving Door: Former Members of the

115th Congress, OpenSecrets .............................. 39

INTRODUCTION

When a public official accepts money to convince the

government to do something, we call him a crook. But

when a private citizen accepts money to convince the

government to do something, we call him a lobbyist.

That is not an arbitrary distinction. It reflects the fact

that public officials hold a fiduciary obligation to act

in the public’s best interests, while private citizens do

not. That basic dichotomy lies at the foundation of our

system of representative democracy: Citizens are

constitutionally entitled to petition the government in

service of their self-interests, while public officials are

entrusted with making decisions in the public good.

Yet in the decision below, the Second Circuit held

that private citizens can owe a fiduciary duty to the

public and thus be guilty of honest-services fraud for

accepting “bribes” to influence government decisions.

Under its test, if a jury concludes that a private person

exercises de facto control over government actions by

virtue of officials’ reliance on him, the jury can send

him to prison—even if he had no official title, official

powers, official salary, or official duties.

Indeed, that was the sole basis to convict Petitioner

Joseph Percoco—who was the campaign manager for

then-Governor Andrew Cuomo—for being paid

$35,000 by a real estate developer, allegedly to help

navigate New York’s bureaucracy surrounding labor

law. According to the panel, Percoco owed a duty of

honest services to the public because, as a former

senior staffer and longtime friend of the Governor’s

family, he continued to command “clout” with state

agencies and officials. JA.681-82.

In upholding this conviction, the Second Circuit

breathed new life into United States v. Margiotta, 688

F.2d 108 (2d Cir. 1982), an aberrational precedent

dating back four decades. Issued over a fierce dissent

by the late Judge Winter, Margiotta broadly expanded

the then-nascent theory of “honest services” fraud by

extending to influential private citizens the fiduciary

duties owed by public officials. Scholars and judges

widely condemned the decision, and developments in

the law left it so discredited that even district courts

within the Second Circuit declared that “Margiotta

was wrongly decided and is no longer good law in this

Circuit or anyplace.” United States v. Adler, 274 F.

Supp. 2d 583, 587 (S.D.N.Y. 2003). In the decision

below, however, the panel exhumed Margiotta.

This Court should reverse. The notion that private

citizens owe a duty of honest services to the public so

long as a jury deems them sufficiently influential

lacks any foothold in law or common sense. The public

has no right to any “services” of a private citizen.

Margiotta erred by transforming one’s influence over

others into a source of affirmative duties, without any

agency or representative relationship. And then,

importing that flawed premise into the public sphere,

Margiotta blurred the fundamental line that defines

the distinct roles of citizens and officials. To be sure,

officials who abdicate their power to party bosses,

campaign operatives, or lobbyists may violate their

own fiduciary duties to the public. But such failure

does not somehow transfer the duties to those private

citizens and expose them to criminal prosecution for

corruption.

In short, Judge Winter was right;

Margiotta was wrong.

Even if Margiotta had a theoretical basis, however,

it has since been uprooted by this Court’s decisions.

This Court has refused to indulge exotic applications

of the federal fraud laws, especially the vague honestservices statute. In Skilling v. United States, a

majority upheld that ill-defined provision against a

constitutional challenge, but only through a limiting

construction that narrowed its scope to “core” and

“paramount” applications. 561 U.S. 358, 404 (2010).

The Margiotta theory is anything but. To the

contrary, treating payments to a private citizen as

“bribes” runs smack into McDonnell v. United States,

which explained that bribery law is concerned not

with influence in the abstract, but rather with the sale

of one’s “official position.” 579 U.S. 550, 552 (2016).

No official position means no bribery. And no bribery

means no honest-services fraud.

Finally, a host of constitutional principles condemn

Margiotta, resolving any remaining doubt. Foremost

is the First Amendment. Margiotta offered no basis

to distinguish its conception of de facto control from

effective lobbying, and thus puts an entire sphere of

constitutionally protected conduct in the crosshairs.

Next is federalism. By inventing a new federal

fiduciary duty, Margiotta also intruded on the States’

power to structure their own democratic systems and

norms. And, as Judge Winter warned, the Second

Circuit’s malleable test offends due process too, by

depriving citizens of fair notice and empowering

prosecutors to engage in mischief.

Once again, the lower courts’ startling expansion of

federal bribery law is both wrong and dangerous. The

Court should reverse the decision below and vacate

Percoco’s convictions.

OPINION BELOW

The decision of the U.S. Court of Appeals for the

Second Circuit affirming Petitioner’s judgment of

conviction (JA.641) is reported at 13 F.4th 180.

JURISDICTION

The Second Circuit entered judgment on September

8, 2021, and denied rehearing on November 1, 2021.

JA.641; Pet.App.47a-54a.

Justice Sotomayor

extended the time to file a petition for certiorari until

March 1, 2022. No. 21A298 (U.S.). This Court

granted a timely filed petition on June 30, 2022, and

has jurisdiction under 28 U.S.C. § 1254(1).

PROVISION INVOLVED

18 U.S.C. § 1346 provides:

For the purposes of this chapter, the term

“scheme or artifice to defraud” includes a scheme

or artifice to deprive another of the intangible

right of honest services.

STATEMENT

While serving as campaign manager for Governor

Andrew Cuomo’s reelection, Petitioner Joseph Percoco

accepted $35,000, allegedly in exchange for helping a

real estate developer secure a release of certain labor

law duties from a state agency. Even though Percoco

was a private citizen during this entire period, he was

charged with depriving the public of his “honest

services” by accepting a “bribe.” The theory was that

Percoco’s past employment as an aide to Cuomo, and

his ongoing relationship with the Governor, put him

in a position of “dominance” over state affairs.

The district court instructed the jury that Percoco

owed a fiduciary duty to the people of New York if he

exercised control over government decisions and state

officials relied on him. In doing so, the court relied on

the Second Circuit’s divided decision in Margiotta. On

appeal, the Second Circuit affirmed, resurrecting

Margiotta notwithstanding its flaws and a series of

intervening legal developments.

A. The Honest-Services Doctrine.

Understanding this case requires some background

on the convoluted history of “honest services” fraud.

The doctrine began as a circuit-level gloss on the mail

and wire fraud statutes. This Court rejected it. After

Congress subsequently adopted it in vague terms, this

Court narrowed it in a saving construction.

1. The honest-services theory of fraud originated in

Shushan v. United States, which held that bribery is

a “scheme to defraud the public” and thus falls within

the mail fraud statute’s prohibition of any “scheme to

defraud.” 117 F.2d 110, 115 (5th Cir. 1941). The court

reasoned that public officials owe “sacred duties,” and

that bribes induce “betrayal” of those duties and

deprive the public of the official’s “fair judgment.” Id.

The theory took off in the 1970s, with the Courts of

Appeals agreeing that depriving the “citizens” of their

officials’ “honest and faithful services” by a “breach of

fiduciary duty” can be mail or wire fraud, even absent

“property loss.” United States v. Isaacs, 493 F.2d 1124,

1149-50 (7th Cir. 1974); see, e.g., United States v.

Mandel, 591 F.2d 1347, 1362 (4th Cir. 1979) (“A fraud

is perpetrated upon the public to whom the official

owes fiduciary duties”); see also Skilling, 561 U.S. at

400-01 (recounting this history).

Lower courts applied the same theory to criminalize

“employee disloyalty,” i.e., a “scheme to defraud an

employer of loyal service.” United States v. Bohonus,

628 F.2d 1167, 1172 (9th Cir. 1980). The premise was,

again, that employees are agents who owe a “fiduciary

duty” to provide “honest and loyal services,” and that

bribes and kickbacks deprive their employers (the

principals) of that “honest and faithful performance.”

United States v. George, 477 F.2d 508, 512-13 (7th Cir.

1973); see also United States v. Procter & Gamble Co.,

47 F. Supp. 676, 678 (D. Mass. 1942) (citing

Restatement of Agency for proposition that a “normal

relationship of employer and employee implies that

the employee will be loyal and honest in all his actions

with or on behalf of his employer”).

2. This Court rejected the honest-services theory—

overturning this lower-court consensus—in McNally

v. United States, 483 U.S. 350 (1987). The Court held

that “[t]he mail fraud statute clearly protects property

rights, but does not refer to the intangible right of the

citizenry to good government.” Id. at 356. McNally

invoked the rule of lenity, explaining “that when there

are two rational readings of a criminal statute, one

harsher than the other, we are to choose the harsher

only when Congress has spoken in clear and definite

language.” Id. at 359-60. Declining to “construe the

statute in a manner that leaves its outer boundaries

ambiguous and involves the Federal Government in

setting standards of disclosure and good government

for local and state officials,” this Court read it “as

limited in scope to the protection of property rights.”

Id. at 360. “If Congress desires to go further, it must

speak more clearly than it has.” Id.

As this Court later recounted, McNally “stopped the

development of the intangible-rights doctrine in its

tracks.” Skilling, 561 U.S. at 401.

3. Congress responded the next year by enacting

the honest-services statute. Just 28 words long, it

defined “scheme or artifice to defraud” to include “a

scheme or artifice to deprive another of the intangible

right of honest services.” 18 U.S.C. § 1346.

Section 1346’s brevity and imprecision, however,

gave rise to “chaos,” as the lower courts “attempt[ed]

to cabin [its] breadth … through a variety of limiting

principles.” Sorich v. United States, 555 U.S. 1204,

1206, 1208 (2009) (Scalia, J., dissenting from denial of

certiorari).

Courts agreed that “some coherent

limiting principle” was needed to prevent “abuse,” but

“[n]o consensus” emerged as to that principle. Id. at

1206. In the absence of clear lines, courts upheld

convictions for everything from patronage hiring, see

United States v. Sorich, 523 F.3d 702, 711 (7th Cir.

2008), to academic plagiarism, see United States v.

Frost, 125 F.3d 346, 369 (6th Cir. 1997).

4. Two decades after § 1346’s enactment, this Court

addressed it in Skilling. The petitioners there argued

that the statute was unconstitutionally vague because

it did not define the “honest services” covered or

provide any guidance on the scope or breadth of the

criminal prohibition. Justices Scalia, Kennedy, and

Thomas agreed and would have deemed the statute

unconstitutional, see 561 U.S. at 415 (Scalia, J.,

concurring in part and in the judgment), but the

majority concluded that it could “preserve” the statute

by construing it narrowly, id. at 404 (majority op.).

Specifically, the Court said it could “pare” the body

of pre-McNally cases “down to its core”—“paramount”

instances of “bribes or kickbacks”—and treat § 1346

as reinstating the doctrine to that extent. Id.; see also

id. at 405 (noting that courts “consistently applied the

fraud statute to bribery and kickback schemes”). The

Court therefore read § 1346 to forbid “paradigmatic”

violations: i.e., when defendants, “in violation of a

fiduciary duty, participate[] in bribery or kickback

schemes.” Id. at 407.

B. The Margiotta Theory.

This case presents a unique extension of the honestservices concept developed in its pre-McNally heyday.

Margiotta held that a citizen “who holds no official

government office but who participates substantially”

in government decisions owes a duty of honest

services to the public, just like a public official. 688

F.2d at 111. In recognizing this novel duty, the

Second Circuit drew an impassioned dissent from

Judge Winter. And it was that dissent, not the

majority’s analysis, that ultimately earned the favor

of other courts and commentators.

1. Joseph M. Margiotta served as Chairman of the

Republican Committees of Nassau County and the

Town of Hempstead. Id. at 112. He was charged with

fraud for helping an insurance agency obtain an

exclusive broker position with the county and town in

alleged exchange for kicking back a portion of its

commissions. Id. at 120. Although Margiotta held no

public office, the prosecutors argued that he owed a

fiduciary duty to the public because his “power and

prestige” as a party boss gave him “influence” over

local Republican officials. Id. at 113.

The panel framed the question as whether the fraud

statutes prohibit political misconduct “by individuals

who participate in the political process but who do not

occupy public office.” Id. at 112. It recognized this

was a “novel application” of the law and purported to

“tread most cautiously.” Id. at 120. Indeed, the panel

acknowledged that the “seemingly limitless” language

of the fraud statutes created a “danger of sweeping

within [their] ambit … conduct, such as lobbying and

party association, which has been deemed central to

the functioning of our democratic system since at least

the days of Andrew Jackson.” Id. But the panel was

equally if not more concerned about “eliminat[ing] a

potential safeguard of the public’s interest in honest

and efficient government.” Id.

The panel ultimately held that “we do not believe

that a formal employment relationship, that is, public

office, should be a rigid prerequisite to a finding of

fiduciary duty in the public sector.” Id. at 122. In lieu

of a “precise litmus paper test” (which it deemed

impossible, because “[t]he drawing of standards in

this area is a most difficult enterprise”), the majority

cited two tests to govern whether a private individual

owes a duty to the public: “(1) a reliance test, under

which one may be a fiduciary when others rely upon

him”; and “(2) a de facto control test, under which a

person who in fact makes governmental decisions may

be held to be a governmental fiduciary.” Id. Almost

wishfully, the panel claimed these “guidelines” would

“permit[] a party official to act in accordance with

partisan preferences or even whim, up to the point at

which he dominates government.” Id. Exactly where

that point is, the court did not specify.

Committed to its new private-public fiduciary duty,

the court rejected any constitutional challenges to its

approach. The majority acknowledged that the rights

of “lobbyists and others who seek to exercise influence

in the political process are basic in our democratic

system.” Id. at 128-29. Yet those First Amendment

concerns were merely “a chimera,” it said, because

“there is no indication that the application of the mail

fraud statute in this specific case would deter

protected political activities in other contexts,” even if

the same “theory” could admittedly be “misapplied to

constitutionally protected conduct.” Id. at 129.

The majority likewise recognized, “[t]heoretically,”

that there may be “federalism concerns” in finding a

fiduciary duty absent “reference to state law.” Id. at

124. Nonetheless, the court held that “a violation of

local law is not an essential element” of the offense.

Id. It sufficed that “federal public policy” ostensibly

condemned Margiotta’s conduct. Id.

Finally, quoting the adage that “[m]en must turn

square corners when they deal with the Government,”

the panel reasoned that it “requires little imaginative

leap to conclude that individuals who in reality or

effect are the government owe a fiduciary duty to the

citizenry.” Id. (emphasis added). It therefore found

no “fair notice” concerns. Id. at 129.

2. In a scathing dissent, Judge Winter described

the majority’s reading of the fraud statute “as a catchall prohibition of political disingenuousness” that

“expands [the statute] beyond any colorable claim of

Congressional intent and creates a real danger of

prosecutorial abuse for partisan political purposes.”

Id. at 139 (Winter, J., dissenting in part).

While Judge Winter recognized the then-existing

honest-services theory, he explained that the majority

added “one seemingly small element”—that “a jury

may find that a politically active person has sufficient

influence and power over the acts of elective officials

to be subjected to the same duty as those officials.” Id.

at 142. And that innovation “subjects virtually every

active participant in the political process to potential

criminal investigation and prosecution.” Id. at 143.

Turning to first principles, Judge Winter faulted

the majority for analogizing fiduciary duties between

private parties to those between citizens and the

public “in a pluralistic, partisan, political system.” Id.

at 142. The former cannot be imported into the latter

context “simply by mouthing the word fiduciary.” Id.

Rather, Judge Winter urged that “we should recognize

that a pluralistic political system assumes politically

active persons will pursue power and self-interest,”

not the public good. Id. at 143.

Judge Winter proceeded to explain the effects of the

majority’s standard: “Juries are simply left free to

apply a legal standard which amounts to little more

than the rhetoric of sixth grade civics classes.” Id. at

142. That malleable test, in turn, creates a “potential

for abuse through selective prosecution.” Id. at 143;

And it also threatens the First Amendment, since the

theory “subjects politically active persons to criminal

sanctions based solely upon what they say or do not

say in their discussions of public affairs.” Id. at 140.

“When the first corrupt prosecutor prosecutes a

political enemy for mail fraud,” Judge Winter warned,

“the rhetoric of the majority about good government

will ring hollow indeed.” Id. at 144.

Of course, Judge Winter “hope[d] that public affairs

are conducted honestly and on behalf of the entire

citizenry,” but “shudder[ed] at the prospect of partisan

political activists being indicted for failing to act

‘impartially’ in influencing governmental acts.” Id. at

143. “Where a statute, particularly a criminal statute,

does not regulate specific behavior, enforcement of

inchoate obligations should be by political rather than

criminal sanctions.” Id. He decried the majority’s

creation of a new “catch-all political crime which has

no use but misuse.” Id. at 144.

3. Margiotta barely escaped en banc review even in

the famously collegial Second Circuit, leaving the

convictions undisturbed over four judges’ dissent after

other judges recused themselves from the vote. See

811 F.2d 46 (2d Cir. 1982); Adler, 274 F. Supp. 2d at

586 (describing Margiotta’s en banc vote).

4. Margiotta was “widely criticized by practically

everybody.” United States v. Smith, 985 F. Supp. 2d

547, 603 (S.D.N.Y. 2014); see, e.g., United States v.

Holzer, 840 F.2d 1343, 1348 (7th Cir. 1988) (calling

Margiotta one of the “worst abuses of the mail fraud

statute”).

Other courts expressly rejected it—

including the Third Circuit. United States v. Murphy,

323 F.3d 102 (3d Cir. 2003) (Becker, C.J.); see also

United States v. Warner, 292 F. Supp. 2d 1051, 1061

(N.D. Ill. 2003). And even courts in the Second Circuit

declared that Margiotta “was wrongly decided and is

no longer good law.” Adler, 274 F. Supp. 2d at 587.

Only the Sixth Circuit followed Margiotta, in

United States v. Gray, 790 F.2d 1290, 1295 (6th Cir.

1986). Ironically, Gray was the decision this Court

reversed under a new caption, McNally.

C. The Underlying Facts.

Joseph Percoco was a longtime friend of the Cuomo

family who served as Executive Deputy Secretary in

the Governor’s Office. JA.198-99, 681. In April 2014,

he resigned from that role to manage the Governor’s

reelection campaign. JA.179, 203, 664. At that time,

Percoco did not intend to return to government

thereafter. JA.193, 201, 205. Indeed, he voluntarily

sought an ethics opinion regarding what consulting or

other work he could undertake as a former employee.

JA.298-301, 315, 591-93.

After he left government for the campaign, Percoco

had no legal control or authority; his official duties

were transferred to others. JA.206-08, 260-61, 30405, 434-35, 464; see also JA.549 (“Percoco was clearly

not a ‘public official’ at the time that he worked on

Governor Cuomo’s campaign.”). Nor did Percoco ever

suggest otherwise. There was “no evidence that

Percoco held himself out to be a public official when

he was working on the campaign.” JA.541 n.10.

During the campaign period, Percoco’s former office

in New York City remained vacant, and he used it on

occasion while dropping by—with “a long time”

between visits—to address campaign strategy or to

coordinate the Governor’s schedule. See JA.194-95,

207-09, 307, 313-14. State employees also regularly

used the vacant office and its telephone. JA.437.

Toward the close of the campaign, Percoco’s plans

changed. Several members of the Governor’s “senior

staff” left government, and the Governor’s father fell

“ill and ultimately died within a matter of weeks.”

JA.193. Attempting to sustain “some stability in the

office,” Percoco determined to return. Id.

He therefore filled out new-hire paperwork,

including disclosure of outside income he had received

while working on the campaign. See JA.213-14, 46970, 626. Percoco resumed his state employment on

December 8, 2014. See JA.472.

The events here occurred when Percoco was a

private citizen (i.e., between April 18 and December 8,

2014). Percoco told a lobbyist, Todd Howe, that he

was interested in doing consulting work during the

campaign, as ethics officials had advised he could.

JA.357. Meanwhile, Steve Aiello, co-owner of a real

estate company known as COR Development (COR),

needed labor relations help on a project in Syracuse.

JA.358. Among other things, a state agency was

insisting COR enter a costly deal (a labor peace

agreement or LPA) with local unions. JA.330-33, 378.

Aiello emailed Howe to ask if “Joe P can help us with

this issue while he is off the 2nd floor working on the

Campaign.” JA.392, 594. (The Executive Chamber is

on the second floor of the state capitol. JA.174.)

For Percoco’s work, COR wrote two checks, totaling

$35,000, in August and October 2014. JA.362-63.

Percoco later disclosed COR as a source of outside

income in his new-hire paperwork. JA.213-14, 626.

On December 3, 2014, before Percoco’s return to

state employment, he called a staffer in the Executive

Chamber to inquire why the state agency was still

insisting COR enter an LPA even though all parties

had previously agreed no LPA was needed. JA.33742. The staffer, who agreed that no LPA was required,

relayed to an agency executive that he was facing

“pressure” from his “principals.” JA.342. The agency

then confirmed no LPA was needed. JA.339.

Many months later, Percoco assisted in processing

a pay raise for Aiello’s son (a state employee), and also

inquired about the status of outstanding funds that

the state owed COR. See JA.649. No evidence linked

either act to the mid-2014 payments.

D. The Indictment and Trial.

In November 2016, Percoco was charged with a

variety of offenses. Most relevant here, Count Ten

alleged that Percoco had conspired to commit honestservices wire fraud, see 18 U.S.C. §§ 1343, 1346, 1349,

through his work for COR. JA.649. For that same

COR conduct, he was also charged with Hobbs Act

extortion, in violation of 18 U.S.C. § 1951 (Count

Eight); and solicitation of bribes or gratuities, in

violation of 18 U.S.C. § 666(a)(1)(b) (Count Twelve).

JA.649-50. Percoco was also indicted for Hobbs Act

extortion, honest-services fraud, and solicitation of

bribes or gratuities arising from a different scheme

involving a company known as CPV. Id. One count of

Hobbs Act conspiracy (Count Six) was premised on

both of the alleged schemes. Id.

Percoco moved to dismiss the COR charges on the

ground that he could not commit these offenses when

he was out of public office. The district court denied

that motion. JA.133. As to Hobbs Act bribery,

however, the court agreed that only “persons who hold

official positions within the government … are

capable of committing the substantive offense of

extortion under color of official right.” JA.548. And

Percoco was “clearly not a ‘public official’” when he

received the payments from COR. JA.549. The court

therefore granted acquittal on Count Eight. JA.561.

After the government rested, Percoco moved for a

judgment of acquittal on Count Ten. JA.650. He

argued that “nothing in the record” showed that he

accepted money to take an “official act,” as he had

accepted funds only “within the period in which he

was no longer a state employee” and therefore could

not take official action. JA.447. The court denied that

motion after trial. JA.650.

Near the end of trial, the district court proposed a

jury instruction that Percoco could “owe[] the public a

duty of honest services when he was not a state

employee, if you find that during that time he owed

the public a fiduciary duty.” Pet.App.133a. Percoco

objected, asking that the court instruct that he owed

“honest services” only “as a public official.” The court

disagreed, saying that was “not the law” since “you

can owe honest services if you have a fiduciary duty,

even if you’re not a public official at the time.” JA.47980. Consistent with Margiotta, the final instructions

directed the jury to assess whether Percoco

“dominated and controlled any governmental

business” and also whether “people working in the

government actually relied on him.” JA.511.

After a lengthy deliberation and two Allen charges,

the jury reached a split verdict. It convicted Percoco

on Count Ten (honest-services fraud conspiracy), but

acquitted him on the other COR charges, Counts Six

and Twelve (Hobbs Act conspiracy, and § 666 bribery).

JA.651. The jury also convicted Percoco on two of the

three counts arising from the CPV scheme, but

acquitted on the third. Id.

E. The Second Circuit’s Decision.

The Second Circuit affirmed. JA.641-86. The panel

upheld the honest-services instruction as falling

“comfortably within our decision in [Margiotta].”

JA.665. The panel acknowledged that Margiotta was

no longer binding in light of McNally, but held that

Congress’s revival of the honest-services rubric in

§ 1346 had “effectively reinstated” it. JA.669. The

panel reasoned that § 1346’s “capacious language is

certainly broad enough to cover the honest services

that members of the public are owed by their

fiduciaries, even if those fiduciaries happen to lack a

government title and salary.” JA.667-68. And the

court called Margiotta’s fiduciary-duty theory “settled

doctrine” before McNally. JA.666-70.

The panel stated the law as follows: “In our view,

§ 1346 covers those individuals who are government

officials as well as private individuals who are relied

on by the government and who in fact control some

aspect of government business.” JA.667. In effect, the

test is whether public officials listen to the citizen,

thereby handing him de facto control.

The panel denied that Margiotta had been undercut

by McDonnell. McDonnell held that an “official act”

under federal bribery law “must involve a formal

exercise of governmental power.” 579 U.S. at 574.

But the panel thought McDonnell did not address who

could take an “official act,” i.e., whether someone

without office could be guilty of taking a bribe for

influencing state action. JA.670. The panel also

dismissed constitutional concerns, framing the issue

as whether the Constitution required an exception for

those who are not formal employees. JA.671-72.

Consistent with its articulation of the law, the

panel found sufficient evidence that Percoco owed a

fiduciary duty to the public. JA.677, 681-84. That

was because he “maintained” a “position of power and

trust,” attributable mainly to his “unique relationship

with Governor Cuomo,” “being close to him and his

family,” plus the likelihood that he would regain the

same position after the campaign, and his continued

access to the Governor’s Office during the campaign

period. JA.681-82. And the panel found sufficient

evidence that Percoco had agreed to take official

action by calling a staffer about the LPA issue in early

December 2014. JA.680-81. The panel did not,

however, rely on the acts Percoco took following his

return to state employment. Id.

Under the panel’s logic, Percoco was a victim of his

own success: The fact that he was able “to use his

position of power” to oppose the LPA itself proved the

influence and dominance that supposedly gave rise to

a fiduciary duty to the public. JA.683.

SUMMARY OF ARGUMENT

I. Margiotta was wrong on its own terms. Unlike

public officials, private citizens owe no fiduciary duty

to act in the public interest. They are not agents of

the public; they exercise no authority on its behalf. To

the contrary, the premise of republican government is

that private citizens and factions will advance their

own parochial self-interests, while public officials are

tasked with filtering those interests for the common

good. Margiotta inverts that paradigm by treating

private citizens as assuming fiduciary obligations just

because officials rely on them to make decisions.

Even in the private sector, the law does not support

Margiotta’s notion that reliance and control give rise

to fiduciary duties. Fiduciary obligations arise from

legal relationships (usually principal-agent), not from

one party’s unilateral reliance on another. Equity

courts sometimes use a looser approach to set aside

legal instruments or transactions as tainted by undue

influence, but that has nothing to do with imposing

affirmative duties to act on behalf of others—much

less duties with sufficient definiteness and certainty

to serve as predicates for criminal prosecution.

II. Whatever may have been true when Margiotta

was decided, the theory cannot survive this Court’s

recent decisions. In Skilling, the Court saved § 1346

from constitutional challenge by narrowly reading it

to reinstate only the “core” of the pre-McNally honestservices doctrine, described as “paradigmatic cases of

bribes and kickbacks.” There is nothing paradigmatic

about Margiotta’s novel and broadly criticized notion

that private citizens can be guilty of accepting bribes.

Margiotta lacks the foundation and consensus to be

elevated to part of the pre-McNally “core.”

This Court’s decision in McDonnell confirms that

the Margiotta conduct is not bribery, let alone “core”

bribery. That case clarified that the evil prohibited by

federal bribery law is the sale of official authority—

the use of one’s office to control the formal exercise of

government power in exchange for private benefit. A

private citizen who has no office cannot sell his office;

one who exercises no power cannot trade that power.

A private citizen may have influence, but McDonnell

refused to conflate that slippery concept with “official

action” that triggers federal bribery law.

III. Any residual doubt is resolved by the serious

constitutional concerns posed by Margiotta.

To start, the First Amendment guarantees citizens

the right to petition the government for redress of

grievances, yet Margiotta would allow prosecutors to

charge any half-decent lobbyist in the country with

bribery by treating their influence as the source of a

fiduciary obligation. Core advocacy by politically

active individuals—from campaign donors to union

leaders to media influencers—could also be chilled by

Margiotta’s amorphous test.

Beyond that, the Second Circuit’s approach

improperly puts federal courts in the position of

regulating how private citizens interact with the

government and its officials—thereby interfering in

this fundamental aspect of state sovereignty. Section

1346, of course, includes nothing resembling a clear

statement sufficient to justify that disruption of the

federal-state balance.

Finally, Margiotta’s “guidelines,” 688 F.2d at 122,

offend due process by letting a jury convict on nothing

more “than the rhetoric of sixth grade civics classes,”

id. at 142 (Winter, J., dissenting in part). At best, this

vague theory deprives citizens of the notice to which

they are constitutionally entitled. At worst, it invites

partisan abuse and selective prosecution.

IV. Rejecting Margiotta compels reversal of the

convictions here. For Count Ten, all of the relevant

conduct occurred while Percoco was a private citizen,

so he is entitled to acquittal. The other two counts

spanned the public and private time periods; as to

those, Percoco is entitled to a new trial based on the

flawed jury instructions and prejudicial spillover.

ARGUMENT

MARGIOTTA WAS WRONG FROM ITS INCEPTION.

Margiotta was indefensible. Its core premise was

that private citizens must act in the public’s best

interest if they exercise de facto “control” over

government by virtue of their influence or officials’

reliance on them. As Judge Winter explained, that

contradicts the basic theory of our republic: private

citizens may advance their self-interests, while agents

of the public try to serve the common good. Nor,

contrary to the panel’s claim, is Margiotta rooted in

the common law. True fiduciary obligations arise

from agency or analogous legal relationships; in the

criminal context especially, they cannot be left to the

whim of a jury’s ill-defined moral intuitions.

A. Private Citizens Owe No Duties To Act in

the Public Interest.

The foundational premise of Margiotta is the notion

that private citizens who exercise de facto control over

government decisions assume a duty to serve the

public. That is not how our government was designed.

Public officials exercise power as agents of the people;

private citizens are agents of nobody and possess no

state power, only the capacity to influence.

1. The honest-services theory has always presumed

an underlying fiduciary duty, because without one

there is no obligation to provide “honest, faithful and

disinterested service” to another. Mandel, 591 F.2d at

1362. This Court construed the theory’s codification

in § 1346 to require that element. Skilling, 561 U.S.

at 407 (describing pre-McNally core as covering those

“who, in violation of a fiduciary duty, participated in

bribery or kickback schemes”).

The threshold question in any honest-services case

is therefore whether the defendant owed a fiduciary

duty to provide faithful service to the victim of the

scheme. In typical bribery cases, the answer is yes.

In a representative democracy, public officials exercise

power as representatives—or agents—of the public.

See United States v. Sprague, 282 U.S. 716, 733 (1931)

(describing Congress as “agent of the people”); Loving

v. United States, 517 U.S. 748, 777 (1996) (Scalia, J.,

concurring in part and in the judgment) (describing

executive branch as “agent of the People”). Agents are

fiduciary-bound to act in their principals’ interests.

See Restatement (Second) of Agency § 387 (1958).

And an employee is just a species of agent. See

Carpenter v. United States, 484 U.S. 19, 27 (1987).

Margiotta’s innovation was extending that duty

from de jure officials—agents of the public—to citizens

whose de facto power flows only from their influence.

That was an “erroneous analogy.” 688 F.2d at 142

(Winter, J., dissenting in part). Public officials

exercise sovereign power by virtue of having accepted

their role as public representatives. That binds them

to use those powers to serve the public, rather than to

benefit themselves. By contrast, a private citizen has

not agreed to serve as an agent of the public, and is

not entrusted with any authority to exercise on its

behalf. Even an influential citizen has no relationship

to the public that creates a duty to serve it. See

Murphy, 323 F.3d at 117. “Unlike elected officials, few

political leaders, lobbyists, influence peddlers, or

activists hold themselves out as acting for the general

welfare of all citizens.” Daniel J. Hurson, Limiting the

Federal Mail Fraud Statute - A Legislative Approach,

20 AM. CRIM. L. REV. 423, 440 (1983).

Indeed, our republic presumes that private citizens

will advance their own self-interests, and expects

public officials to exercise independent judgment as to

the public good. In his famous Federalist No. 10,

James Madison recounted how men are driven by

“self-love” to press their “distinct interests,” which

leads to the concern of “factions.” Madison’s solution

was republicanism: choosing “representatives of the

people” to serve as “guardians of the public weal” and

whose voice would be “more consonant to the public

good.” Federalist No. 10 (James Madison) (Clinton

Rossiter ed., 1961). By treating influential private

citizens as guardian-representatives of the public

good, Margiotta inverted that basic structure.

2. Margiotta worried about private citizens pulling

strings of government from behind the scenes, with no

accountability to the public. A fair concern, perhaps,

but easily addressed. “Private individuals who control

government action must necessarily rely on public

officials to do their bidding.” John Calvin Jeffries, Jr.,

Legality, Vagueness, and the Construction of Penal

Statutes, 71 VA. L. REV. 189, 241-42 (1985). If those

officials blindly defer to others, they are “in abdication

of their own responsibilities,” Hurson, supra, at 440,

and can be held accountable—but their failure does

not transfer their duties to the private citizens. There

is every reason to enforce the duties officials already

owe to the public, but no basis to invent new duties

running from private citizens to the public. Finally, if

the hurdle is that public officials are deceived by the

self-interested motives of private citizens who lobby

them, the solution—as this Court has emphasized—is

robust disclosure of paid lobbying. United States v.

Harriss, 347 U.S. 612, 625-26 (1954).

B. Reliance and Control Do Not Generate a

Duty To Provide Honest Services.

Margiotta purported to rely on the common law for

its premise that one’s “reliance” on another—and the

latter’s ensuing “control”—can give rise to fiduciary

obligations. 688 F.2d at 122. Even setting aside the

obstacles to importing private duties into the public

sector willy-nilly, that premise was vastly overstated.

Reliance and control alone typically do not generate a

fiduciary relationship, much less an affirmative duty

to provide “services” to another.

1. Fiduciary duties usually arise from specific legal

relationships. Often these are agency relationships,

such as between an employer and employee or a public

official and the public. See supra at 5-6. “A fiduciary

relationship may [also] be created by contract, such as

the relationship between a trust and trustee,” Zastrow

v. Journal Commc’ns, Inc., 718 N.W.2d 51, 60 (Wis.

2006), or by court appointment to representative roles

like guardian or executor, e.g., Hall v. Schoenwetter,

686 A.2d 980, 985 (Conn. 1996).

Crucially, all of these relationships involve consent:

the fiduciary has agreed to act on behalf of a principal,

beneficiary, estate, etc. That tracks the common law’s

historic reluctance to impose involuntary duties to act

for others. Cf. Restatement (Second) of Torts § 314

(1965) (no affirmative duty to protect). Accordingly,

“[b]efore a person can be charged with a fiduciary

obligation, he must either knowingly undertake to act

on behalf and for the benefit of another, or must enter

into a relationship which imposes that undertaking as

a matter of law.” City of Hope Nat’l Med. Ctr. v.

Genentech, Inc., 181 P.3d 142, 150 (Cal. 2008).

The flip-side of that consent principle is that a duty

“is not created by a unilateral decision to repose trust

and confidence.” Lee v. LPP Mortg. Ltd., 74 P.3d 152,

162 (Wyo. 2003); see also Regions Bank v. Schmauch,

582 S.E.2d 432, 444 (S.C. Ct. App. 2003) (“As a general

rule, a fiduciary relationship cannot be established by

the unilateral action of one party.”). Nor do fiduciary

duties “arise ‘merely because one party relies on … the

specialized skill of the other.’” Yenchi v. Ameriprise

Fin., Inc., 161 A.3d 811, 822-23 (Pa. 2017). After all,

if that sufficed, “the vast multitude of ordinary arm’slength transactions” would become fiduciary ones.

Id.; see also, e.g., United States v. Reed, 601 F. Supp.

685, 715 (S.D.N.Y.) (explaining that fiduciary duties

arise from a “mutually recognized relationship of

fidelity,” not “unilateral investment of confidence by

one party in the other”), rev’d on other grounds, 773

F.2d 477 (2d Cir. 1985).

Margiotta contradicts these principles. It treats a

public official’s “reliance” on a private citizen—and

the “de facto control” over government decisions that

allegedly flows from that unilateral reliance—as the

source of a fiduciary duty running from the citizen to

the public, even absent any undertaking by the citizen

to act on another’s behalf. In effect: If others listen to

you, you are bound to act in their interests. That

concept is alien to the common law and, indeed, to

American jurisprudence more generally.

2. Margiotta did cite some cases for its description

of “reliance” and “de facto control” as “two time-tested

measures of fiduciary status.” 688 F.2d at 122. But a

closer examination reveals that those cases (and the

lines of authority they exemplify) cannot support the

weight Margiotta placed upon them.

To start, some courts consider reliance and control

to evaluate whether an undisputed legal relationship

rises to the fiduciary level—but not to create a duty in

the absence of any legal relationship. Margiotta cited

two examples. In Cheese Shop International, Inc. v.

Steele, the court considered whether the relationship

of parties who had entered a contract was fiduciary in

nature. 303 A.2d 689, 691 (Del. Ch. 1973). It was not,

given the absence of “dependency on or superiority of

the one alleged to be a fiduciary.” Id. Likewise, Mobil

Oil Corp. v. Rubenfeld assessed whether parties to a

franchise agreement intended to create a fiduciary

relationship, inquiring whether the contract reposed

“confidence” in one party based on “superiority and

influence.” 339 N.Y.S.2d 623, 632 (Civ. Ct. 1972).

None of that supports Margiotta’s use of reliance,

influence, or control to divine a fiduciary duty in the

absence of any legal relationship between the parties.

In “any analysis of a claimed breach of fiduciary duty,”

the first “central question[]” is “was the relationship a

fiduciary relationship[?]” Zastrow, 718 N.W.2d at 59.

For a citizen who has no relationship with the public,

the answer—by definition—must be “no.”

There is a second line of authority in which courts

look to “trust and reliance” or “dominance and control”

to create a fiduciary relationship. Margiotta, 688 F.2d

at 122. But they do so for a fundamentally different

purpose: to equitably set aside a prior transaction or

legal act as tainted by undue influence—not to impose

the affirmative duties required for an honest-services

conviction. As courts have long recognized, “equity

has occasionally established a less rigorous threshold

for a fiduciary-like relationship in order to right civil

wrongs arising from non-compliance with the statute

of frauds, statute of wills and parol evidence rule.”

United States v. Chestman, 947 F.2d 551, 569 (2d Cir.

1991) (en banc) (emphasis added) (citing G.G. Bogert,

The Law of Trusts and Trustees § 482 (rev. 2d ed.

1978)). So, for example, In re Jennings’ Estate, 55

N.W.2d 812 (Mich. 1952), involved a will contest, and

Trustees of Jesse Parker Williams Hospital v. Nisbet,

14 S.E.2d 64 (Ga. 1941), was an action to set aside a

contract.

Those cases exemplify the “boundless nature of

relations of trust and confidence” that “equity has

occasionally established … to right civil wrongs.”

Chestman, 947 F.2d at 569. But they do not support

Margiotta’s imposition of an affirmative duty to act for

another—which is what the text of the honest-services

statute demands. One cannot be deprived of “the

intangible right of honest services,” 18 U.S.C. § 1346,

if there is no right to services at all. Thus, “implicit in

the plain meaning of § 1346” is a “limiting principle[]”:

that “the law … must recognize an enforceable right

to the services at issue.” United States v. Rybicki, 354

F.3d 124, 153 (2d Cir. 2003) (en banc) (Raggi, J.,

concurring in the judgment). And that is the critical

distinction between “a formal government employee”

and what the panel dubbed a “functional employee,”

meaning someone with no official role but de facto

control. JA.668. The public has a “legally enforceable

right” to the services of actual employees. It has no

right to the services of a private citizen who is a

“functional employee” simply because public officials

listen to him. The “less rigorous” fiduciary standard

that equity courts sometimes apply in undueinfluence cases cannot bridge that fundamental gap.

The “less rigorous” undue-influence standard is also

clearly inappropriate in defining fiduciary duties for

criminal purposes. “Useful as such an elastic and

expedient definition … may be in the civil context, it

has no place in the criminal law.” Chestman, 947 F.2d

at 570. Indeed, employing such “outer permutations

of chancery relief” “for determining the presence of

criminal fraud would offend not only the rule of lenity

but due process as well.” Id.; see also infra Part III.C.

3. A final flaw in Margiotta’s fiduciary analysis is

the mismatch between the “fiduciary” relationship

and the duty drawn from it. Margiotta turned on the

reliance placed on the private citizen by public

officials, and the citizen’s concomitant de facto control

over official decisions. But even if that could create a

fiduciary relationship, and even if that relationship

could spawn affirmative duties, the citizen would at

most owe those duties to the official, not to the public.

An agent cannot appoint a subagent unless he has

been “empowered” to do so. Restatement (Second) of

Agency § 5. A public official has neither actual nor

apparent authority to outsource decisions to private

citizens. Cf. Carter v. Carter Coal Co., 298 U.S. 238,

311 (1936). So a public official’s reliance on a private

citizen certainly cannot generate a transitive duty of

that citizen to represent the public as a whole.

Margiotta has no first principles to commend it.

Influence and unilateral reliance alone do not give rise

to affirmative duties to others. And particularly in the

public sector, such a proposition is fundamentally out

of place in our constitutional republic. Judge Winter

got this right back in 1982.

II. MARGIOTTA IS NOW ALSO FORECLOSED BY THIS

COURT’S PRECEDENTS.

Even if Margiotta were conceptually coherent, there

is no way to reconcile it with this Court’s more recent

precedents concerning the honest-services statute. In

Skilling, this Court preserved § 1346 only by reading

it narrowly as limited to “core” or “paramount” cases.

Yet Margiotta was, by its own admission, a “novel”

application of the honest-services concept, which drew

widespread criticism. It is an aberration that cannot

be described as part of the pre-McNally doctrinal core.

Confirming as much, this Court in McDonnell defined

public-sector bribery as the sale of “governmental

powers”—which, by definition, only a public official

can undertake. Margiotta is a vestige of a bygone era;

this Court’s modern decisions compel its extinction.

A. Skilling Shut the Door on Novel Theories

of Honest-Services Fraud.

Margiotta cannot be reconciled with Skilling, which

sharply cabined the scope of honest-services fraud to

“heartland” cases to avoid constitutional concerns.

561 U.S. at 409 n.43. Margiotta is no heartland case.

And the panel below ignored the conflict.

1. As set forth above, Skilling construed § 1346, the

statute that Congress enacted to overrule McNally’s

rejection of the honest-services doctrine. But, to avoid

a constitutional vagueness challenge, the Skilling

majority held that Congress did not adopt wholesale

the chaotic pre-McNally doctrine. Rather, the Court

limited § 1346 to “paramount,” “classic,” “heartland,”

“paradigmatic” cases involving “bribes or kickbacks.”

Id. at 404, 409-11 & n.43.

The relevant question under Skilling is therefore

whether a given theory of bribery or kickbacks falls

within the pre-McNally “doctrine’s solid core.” Id. at

407. Such “core pre-McNally applications” are all that

this Court “salvaged.” Id. at 408. Conduct beyond

“paradigmatic cases of bribes and kickbacks,” on the

other hand, are outside the scope of § 1346. Id. at 411.

Although some lower courts had construed the honestservices theory more broadly, Skilling treated the lack

of “consensus” about those fact patterns, and the

“relative infrequency” of those prosecutions, as

placing that “amorphous category of cases” outside the

statute’s reach. Id. at 410.

There can hardly be any question that Margiotta is

outside the bounds of § 1346 as Skilling construed it.

There is nothing “paramount,” “classic,” “heartland,”

or “paradigmatic” about imputing fiduciary duties to

private citizens based on their de facto influence over

government decisions. Even Margiotta admitted this

was a “novel issue.” 688 F.2d at 121; see also Jeffries,

supra, at 239-40 (recounting how “until Margiotta,

that [honest-services] theory apparently applied only

to public officials”).

Nor did Margiotta induce a wave of agreement, let

alone a “consensus” of the sort that Skilling

demanded. To the contrary, courts long observed that

“Margiotta has been ‘widely criticized by practically

everybody.’” Smith, 985 F. Supp. 2d at 603. Early on,

Judge Posner called it one of the “worst abuses of the

mail fraud statute.” Holzer, 840 F.2d at 1348. And,

writing for the Third Circuit, Chief Judge Becker

refused to follow Margiotta’s “oft-criticized holding”

and instead agreed with Judge Winter that the

Second Circuit’s approach “extends the mail fraud

statute beyond any reasonable bounds.” Murphy, 323

F.3d at 104, 109; see also Warner, 292 F. Supp. 2d at

1062 (calling Margiotta “roundly criticized” and

refusing to follow it). Perhaps most powerfully, even

district courts in the Second Circuit came to discount

Margiotta as bad law. See Adler, 274 F. Supp. 2d at

587 (“Margiotta was wrongly decided and is no longer

good law in this Circuit or anyplace, as found by the

Third Circuit in Murphy.”).

Scholars were likewise unimpressed by Margiotta,

and have criticized it for decades. See, e.g., Hurson,

supra, at 439-40; John C. Coffee, Jr., The Metastasis

of Mail Fraud: The Continuing Story of the ‘Evolution’

of A White-Collar Crime, 21 AM. CRIM. L. REV. 1, 1516 (1983); Jeffries, supra, at 239-40; Craig M. Bradley,

Foreword: Mail Fraud After McNally and Carpenter:

The Essence of Fraud, 79 J. CRIM. L. & CRIMINOLOGY

573, 583-84 (1988); Geraldine Szott Moohr, Mail

Fraud and the Intangible Rights Doctrine: Someone to

Watch Over Us, 31 HARV. J. ON LEGIS. 153, 209 (1994);

Robert Batey, Vagueness and the Construction of

Criminal Statutes-Balancing Acts, 5 VA. J. SOC. POL’Y

& L. 1, 57-61 (1997); John C. Coffee, Jr., Modern Mail

Fraud: The Restoration of the Public/Private

Distinction, 35 AM. CRIM. L. REV. 427, 435-36 (1998);

David Mills & Robert Weisberg, Corrupting the Harm

Requirement in White Collar Crime, 60 STAN. L. REV.

1371, 1402 (2008). And that is only a selective listing.

In short, like the other honest-services theories that

Skilling excluded from § 1346, Margiotta was always

a controversial outlier. The statute therefore cannot

be read to have resurrected it.

2. The Skilling majority’s response to Justice

Scalia’s concurrence about “the source and scope of

fiduciary duties,” 561 U.S. at 407 n.41, confirms that

Margiotta fell outside the “core” this Court salvaged.

Justice Scalia objected that the body of pre-McNally

caselaw never “defined the nature and content of the

fiduciary duty central to the ‘fraud’ offense.” Id. at 417

(concurring in part and in the judgment). He pointed

to divisions among lower courts over the “source of the

fiduciary obligation” as well as who owed those duties.

Id. at 417-18. As to the latter, he specifically cited

Margiotta as an exemplar of a decision extending the

duty to “private individuals who merely participated

in public decisions.” Id. at 417.

The majority blunted that objection by maintaining

that, in bribery or kickback cases, “[t]he existence of a

fiduciary relationship” was “usually beyond dispute.”

Id. at 407 n.41 (majority op.). It pointed to examples

of “public official-public,” “employee-employer,” and

“union official-union members” relationships. Id.

And it cited the “established doctrine that a fiduciary

duty arises from a specific relationship between two

parties.” Id. (emphasis added) (brackets omitted).

By highlighting that fiduciary duties were usually

“beyond dispute,” the Court designated those cases—

to the exclusion of others—as the “solid core” that was

“salvaged.” Id. at 407-08 & n.41. By listing the typical

fiduciary relationships and omitting the Margiotta

aberration (“private citizen-public”) Justice Scalia had

flagged, the Court sent the same signal. And, by citing

the “established” rule that fiduciary duties arise from

specific legal relationships, the Court again implicitly

dismissed the Margiotta novelty.

3. Even though Skilling is this Court’s most recent

governing precedent on the scope of § 1346, the panel

below cited it just twice in its discussion of Margiotta,

both times for mere recitations of doctrinal history.

See JA.666. Nowhere did the court grapple with

Skilling’s limitation of § 1346 to “core” or “classic” preMcNally fact patterns. Instead, the panel undertook

its own construction of the “capacious” statutory text.

See JA.667-68. The panel also treated as persuasive

the whole body of law “McNally overruled,” without

mentioning Skilling’s life-saving (but deeply invasive)

surgery on that corpus. JA.668-69.

In addressing a distinct issue earlier in its opinion,

the panel said Skilling “circumscribed” the honestservices statute so it “only criminalizes bribes and

kickbacks.” JA.654. Perhaps the panel believed any

case involving a purported “bribe” falls within the

“core” Skilling upheld. But that is too simplistic. The

whole question in cases like Margiotta is whether the

benefit can be called a “bribe” at all—as opposed to a

lawful payment for services. Bribery has traditionally

meant paying an agent to influence conduct on behalf

of a principal; but as explained, a private citizen is not

an agent of the public. Prosecutors cannot evade

Skilling by expanding the definition of a bribe to cover

conduct outside the pre-McNally core; that would “let

in through the back door the very prosecution theory

that the Supreme Court tossed out the front.” United

States v. Ochs, 842 F.2d 515, 527 (1st Cir. 1988).

Indeed, doing so would present the same vagueness

and other constitutional problems Skilling bypassed.

Rather, § 1346 forbids only paradigmatic “bribes”—

and Margiotta’s novel and contested theory of bribery

assuredly does not qualify.

B. McDonnell Limited Federal Bribery Law

to the Sale of Official Powers.

The other problem with characterizing the conduct

here and in Margiotta as a “bribe” is that it cannot be

a bribe under this Court’s most recent explication of

federal bribery law in McDonnell, which pinpointed

the sale of governmental power as its defining feature.

Private citizens have no such power to sell.

1. The issue in McDonnell concerned the quo aspect

of bribery’s quid pro quo. Specifically, what actions is

an official forbidden to trade for something of value?

The bribery statute governing federal officials calls

that category “official act[s],” 18 U.S.C. § 201(a)(3),

and McDonnell construed its scope for the first time

in a century. See 579 U.S. at 566.

Against a backdrop of constitutional considerations,

the Court held that official acts are limited to those

involving a “formal exercise of governmental power.”

Id. at 569, 571. An official takes an official act when

he exercises such formal governmental power on his

own, or when he “uses his official position” to either

pressure or advise “another official” to exercise formal

governmental power. Id. at 572. Either way, an

official act must fall “within the specific duties of an

official’s position—the function conferred by the

authority of his office.” Id. at 570. The key takeaway

from McDonnell is that federal bribery law forbids the

sale of one’s “official position” in connection with “a

formal exercise of governmental power.” Meanwhile,

the Court unanimously rejected the Government’s

broader approach, under which any sale of “influence”

over government decisions would be criminal, even

without a nexus to the use of office. Id. at 577.

2. The Margiotta theory stands directly opposed to

McDonnell. A private citizen may hold “influence”

over government decisions, if others listen to him. But

influence is not official action. See id. Meanwhile, a

private citizen has no “official position” and cannot

exercise any “governmental power.” He is thus legally

incapable of taking official action—the sine qua non of

bribery—within the meaning of McDonnell.

To be sure, McDonnell made clear that an official

need not personally exercise governmental power to

take official action. It suffices if the person “us[es] his

official position to exert pressure on another official to

perform an ‘official act’” or “uses his official position to

provide advice to another official.” Id. at 572. But the

common denominator is that the official “uses his

official position.” That may mean imposing pressure

through the “threat” of legislation, as in United States

v. Urciuoli, 513 F.3d 290, 296 (1st Cir. 2008). It may

mean exploiting an official duty to make “reports and

recommendations” to superiors, as in United States v.

Birdsall, where officials were bribed to advise their

principal to grant clemency. 233 U.S. 223, 231, 235

(1914). But it does not mean taking actions that just

leverage influence without exploiting one’s official

duties or powers—e.g., writing an op-ed, or asking for

a favor. Rather, the official takes official action only

by using his office to induce a formal exercise of

governmental power. And, again, a private citizen

has no “office” to “use”—not directly, and not

indirectly as a source of official pressure or official

advice. Thus, if a private citizen had recommended

clemency in Birdsall, that would not have been official

action. A private citizen cannot take “official action,”

and so cannot be guilty of accepting a “bribe.”

At minimum, the disconnect between the Margiotta

theory and McDonnell’s definition of § 201 bribery

confirms the former is not among the “paradigmatic

cases of bribes and kickbacks,” Skilling, 561 U.S. at

411 (emphasis added), that § 1346 forbids.

3. The panel responded that McDonnell gave it “no

reason to doubt” Margiotta’s viability. JA.671. But

neither of the panel’s points is persuasive.

First, the panel insisted “the definition of ‘official

act’” says nothing about the distinct issue of “who can

violate the honest-services statute.” JA.670. But the

two questions are inextricably linked. The definition

of “official act” makes it impossible for a private

citizen with no official powers or duties to undertake

one. In turn, that means such a private citizen cannot

commit honest-services fraud of this sort—or, at least,

that such a transaction is not “core” bribery.

Second, the panel claimed Dixson v. United States,

465 U.S. 482 (1984), proves that private citizens can

be guilty of taking bribes under § 201. JA.670-71.

That badly overreads Dixson. The majority there held

that § 201’s definition of “public official” reached grant

administrators who exercised “official responsibility

for carrying out a federal program” and were paid

with federal funds. 465 U.S. at 488, 499. It reasoned

that one who “occupies a position of public trust with

official federal responsibilities,” and assumes “duties

of an official nature,” falls within the statutory reach.

Id. at 496-500 (emphasis added). Lower courts have

applied Dixson to contractors hired to fulfill official

federal functions. See, e.g., United States v. Thomas,

240 F.3d 445, 448 (5th Cir. 2001); United States v.

Kenney, 185 F.3d 1217, 1221-22 (11th Cir. 1999).

All of that is perfectly consistent with McDonnell,

since federal contractors and their agents do exercise

official powers, albeit through contractual delegation.

It follows that they cannot sell those official powers

for private gain. But nothing in Dixson supports the

Margiotta theory that someone who has no “official”

duties, responsibilities, or salary can still be a “public

official,” under § 201 or otherwise, by virtue of having

political influence. McDonnell confirms the latter

theory is foreign to federal bribery law—and most

certainly is not part of § 1346’s salvaged “core.”1

Margiotta’s free-wheeling, common-law approach to

defining honest-services fraud could not be any less

aligned with the trajectory set by this Court’s modern

precedents. Under Skilling, § 1346 forbids only a

predictable and well-understood set of “paradigmatic”

bribery and kickback offenses. And under McDonnell,

bribery means an agent’s sale of his official powers.

No longer does federal criminal law sweep in anything

that sets off a prosecutor’s sense of moral indignation,

or any transaction that offends a jury’s sense of civic

duty. Following those precedents, this Court should

relegate Margiotta to the jurisprudential dustbin.

1 Four Justices thought even Dixson construed the statute too

expansively, 465 U.S. at 501 (O’Connor, J., dissenting), and

Justice Scalia later condemned its use of legislative history to

construe an “ambiguous” law against a criminal defendant, see

United States v. R.L.C., 503 U.S. 291, 310 (1992) (Scalia, J.,

concurring in part and in the judgment). Those are good reasons

not to extend the decision.

III. MARGIOTTA OFFENDS CONSTITUTIONAL NORMS.

As if all of this were not enough, Margiotta invites

a raft of constitutional concerns. Time and again, this

Court has read federal corruption statutes narrowly

to protect the First Amendment, federalism, and fair

notice. These principles resolve any remaining doubt

firmly against the decision below.

A. The Second Circuit’s Standard Chills

First Amendment Activity.

In construing statutes, this Court has been careful

to stay away from readings that could chill activity at

the core of the First Amendment. Yet Margiotta’s

hazy standard leaves lobbyists, donors, and virtually

every other politically active individual at the mercy

of headline-hungry prosecutors.

1. This Court has repeatedly adopted narrowing

constructions of broadly worded statutes so as to not

deter the exercise of First Amendment rights. Under

the Noerr-Pennington doctrine, for example, it read

the capacious Sherman Act to exempt conduct “aimed

at influencing decisionmaking by the government” in

order “to avoid chilling the exercise of the First

Amendment right to petition,” Octane Fitness, LLC v.

ICON Health & Fitness, Inc., 572 U.S. 545, 556 (2014),

and to protect “the citizens’ participation in

government,” City of Columbia v. Omni Outdoor

Advert., Inc., 499 U.S. 365, 383 (1991). In McDonnell,

too, this Court rejected the Government’s position

that “nearly anything a public official does … counts

as a quo” for bribery purposes, warning that such an

interpretation “could cast a pall of potential

prosecution over” basic interactions between public

officials and their constituents. 579 U.S. at 575.

Margiotta and the decision below nevertheless

“run[] the risk … of deterring commonplace political

behavior in which most Americans would assume they

and others had a right to engage.” Batey, supra, at

57-61; see also Jeffries, supra, at 240 (observing that

this “extremely open-ended” standard “casts a shadow

over” political conduct). These decisions threaten to

chill protected speech of politically active individuals,

impairing their ability to petition the government and

impeding officials’ ability to hear from and make

decisions based on voices of their constituents.

Start with lobbyists, whose work is constitutionally

protected. See Citizens United v. FEC, 558 U.S. 310,

369 (2010).

They are often former officials or

employees who intimately know the office and the

people in it. Indeed, when the Washingtonian came

out with a “50 Top Lobbyists” list, almost every person

had a government or staffer past. Kim Eisler, Hired

Guns: The City’s 50 Top Lobbyists, Washingtonian

(June 1, 2007). And about a third of the Members of

Congress who left office in January 2019 have taken

lobbying jobs. Revolving Door: Former Members of the

115th Congress, OpenSecrets, https://bit.ly/3RKAhL6

(last visited Aug. 25, 2022). At least part of what

makes these former officials and staff effective is their

network. It is no secret that “ex-officials are sought

out and paid to use their influence in the government

to achieve their clients’ ends.” United States v.

McClain, 934 F.2d 822, 831 (7th Cir. 1991). The value

of these relationships is empirically demonstrable:

One study found that lobbyists who had worked for a

senator suffered a 24% income drop when the senator

left office. See Jordi Blanes i Vidal et al., Revolving

Door Lobbyists, 102 AM. ECON. REV. 3731 (2012).

In light of this, it would be easy for a Margiottaarmed prosecutor with a distaste for “swamp” culture

to criminalize it: Allege that the lobbyist maintained

influence and control, and all his fees become bribes.

After all, it would be surprising to find a lobbyist who

does not “brag[]” to clients that he “retained ‘a bit of

clout’” with the government “after formally leaving”

public service. JA.682. In fact, the more influential a

lobbyist is, the more likely he is to satisfy Margiotta’s

reliance-and-control test.

Criminalizing “private

persons with a ‘vise-like grip’ on public power”

therefore “might simply prohibit being too successful

a lobbyist.” McClain, 934 F.2d at 831. But it is

hornbook law that “the Government may not penalize

an individual for ‘robustly exercis[ing]’ his First

Amendment rights,” McCutcheon v. FEC, 572 U.S.

185, 205 (2014) (plurality op.)—including his right to

petition public officials.

Moving on, campaign donors “may garner ‘influence

over or access to’ elected officials or political parties”

through their contributions. Id. at 208. That too is

protected speech. See id. With Margiotta in hand,

however, what would stop a prosecutor eager to “get

money out of politics” from asking a jury to conclude

that the donors have breached fiduciary duties to the

public? After all, many Americans believe wealthy

donors “dominate[] and control[] … governmental

business” and are “relied on” by those “working in the

government.” JA.511. Margiotta thus exposes “to

prosecution not only conduct that has long been

thought to be well within the law but also conduct that

in a very real sense is unavoidable so long as election

campaigns are financed by private contributions.”

McCormick v. United States, 500 U.S. 257, 272 (1991).

And there is no need to stop there. Margiotta

“subjects virtually every active participant in the

political process”—from the party boss to the parttime activist—“to potential criminal investigation and

prosecution.” 688 F.2d at 143 (Winter, J., dissenting

in part). As one scholar observed, Margiotta’s power

“‘to influence appointments’” by Republican officials

was arguably “‘no greater than,’” say, “‘that held by

the head of the AFL-CIO to influence the appointment

of the Secretary of Labor’” in “a Democratic

administration.” Jeffries, supra, at 240 n.135. That

encroachment on core First Amendment activity is

why the “danger of corruption to the democratic

system” posed by the Second Circuit’s “catch-all

political crime” is far “greater” than the problem it

purports to solve. Margiotta, 688 F.2d at 144 (Winter,

J., dissenting in part).

2. Margiotta conceded that its “theory” could be

“misapplied to constitutionally protected conduct,”

but deemed that threat of “misuse[]” beside the point.

Id. at 129 (majority op.). This Court is more solicitous

toward constitutional rights, refusing to “construe a

criminal statute on the assumption that the

Government will ‘use it responsibly.’” McDonnell, 579

U.S. at 576. It will not “rely on ‘the Government’s

discretion’

protect

against

overzealous

prosecutions,” id., as the mere threat is enough to chill

protected speech. See Citizens United, 558 U.S. at

333-36; Ams. for Prosperity Found. v. Bonta, 141 S. Ct.

2373, 2384 (2021) (“First Amendment freedoms need

breathing space to survive.”). And Margiotta’s chill on

core political speech is both “evident and inherent.”

Ariz. Free Enter. Club’s Freedom Club PAC v. Bennett,

564 U.S. 721, 745 (2011).

For its part, the court below brushed off the First

Amendment in this roundabout way: It pointed to

cases applying the “reliance-and-control theory” in the

private sector, even though the Constitution “protects

the right of a person to speak persuasively to a private

company.” JA.671-72. Then the panel said it was “not

obvious why speech directed to the government”

deserved “special treatment.”

JA.672.

But as

explained, the private analogies fail. Supra at 25-28.

Plus, it is obvious that greater concern should attach

to the risk of “chilling political speech, speech that is

central to the meaning and purpose of the First

Amendment.” Citizens United, 558 U.S. at 329.

Whatever may be true for purely private contexts, the

Court cannot tolerate a standard that chills the

communications fundamental to a republic—those

between public officials and their constituents. Cf.

McDonnell, 579 U.S. at 575.

B. The Second Circuit’s Standard Interferes

with State Prerogatives.

Margiotta also tramples on state sovereignty in at

least two respects. To start, a “State defines itself as

a sovereign through ‘the structure of its government,

and the character of those who exercise government

authority.’”

McDonnell, 579 U.S. at 576.

For

Congress to “defin[e]” who qualifies as a State’s

“officers” would therefore “upset the usual

constitutional balance.” Gregory v. Ashcroft, 501 U.S.

452, 460 (1991). Yet Margiotta’s upshot is that federal

prosecutors, juries, and judges can decide if a private

citizen is “in reality … the government” of a State. 688

F.2d at 124, 129. Nothing in the relevant statutes

comes close to providing a “clear statement” to justify

that theory. Gregory, 501 U.S. at 461.

This case proves the point. Far from imposing

duties on campaign staff, New York law recognizes

the difference between a public servant and a private

political figure. That is why Percoco had to resign

from his Executive Chamber position to work fulltime on the Governor’s reelection. See N.Y. Civ. Serv.

Law § 107(1)-(2); N.Y. Pub. Off. Law § 74(3)(d).

Percoco’s removal from the state payroll severed his

relationship with the public under state law, changing

his role from a public servant to a private individual

seeking political gain. Yet for the panel below, that

was immaterial. In its view, § 1346’s “capacious

language” was “broad enough” to treat Percoco as a

“functional employee” of New York for purposes of

federal criminal law. JA.667-68.

Relatedly, Margiotta trenches on the States’ power

“to regulate the permissible scope of interactions

between state officials and their constituents.”

McDonnell, 579 U.S. at 576. State ethics rules already

govern when former officials and staff can engage in

lobbying or other advocacy, reflecting a balancing of

competing policy interests. New York forbids former

employees of the executive chamber from “appear[ing]

or practic[ing] before any state agency” for two years.

N.Y. Pub. Off. Law § 73(8)(a)(iv). The panel below

overrode that bright-line state ethics rule with an

open-ended federal criminal standard.

In lieu of heeding this Court’s federalism principles,

Margiotta dismissed state law as irrelevant, declaring

“federal public policy” paramount. 688 F.2d at 124.

But it is not the role of federal courts “to ‘set[]

standards of … good government for local and state

officials,’” Kelly v. United States, 140 S. Ct. 1565, 1574

(2020), much less define who is one in the first place.

C. The Second Circuit’s Standard Is Vague,

Open-Ended, and Subject to Abuse.

The final nail in Margiotta’s once-closed coffin is its

indeterminacy. Its test leaves citizens wondering

when they might cross the line from political activism

to prison, and all but invites prosecutors to pursue

partisan adversaries in a host of new, troubling ways.

1. In the fraught context of political corruption, “a

statute ... that can linguistically be interpreted to be

either a meat axe or a scalpel should reasonably be

taken to be the latter.” United States v. Sun-Diamond

Growers of Cal., 526 U.S. 398, 412 (1999). That flows

from the rule of lenity—the canon that “when there

are two rational readings of a criminal statute, one

harsher than the other, we are to choose the harsher

only when Congress has spoken in clear and definite

language.” McNally, 483 U.S. at 359-60. And it ducks

due-process concerns by ensuring that federal crimes

have “sufficient definiteness that ordinary people can

understand what conduct is prohibited,” without fear

of “arbitrary and discriminatory enforcement.”

McDonnell, 579 U.S. at 576.

Yet despite acknowledging that “[t]he drawing of

standards in this area is a most difficult enterprise,”

Margiotta, 688 F.2d at 122, and that § 1346 cannot be

“precisely defined,” the Second Circuit thought the

law was “broad enough” to support its fact-intensive

“reliance and control” standard, JA.667. The result

was to create “an exceedingly ill-defined prospect of

criminal liability for influential private citizens whose

participation in the political process falls short of

civics-book standards.” Jeffries, supra, at 239.

There is no end to the mischief a prosecutor could

wreak when constrained only by a jury’s application

(after a high-profile indictment and trial) of a factintensive “control and reliance” standard. “[S]elective

enforcement becomes possible, and even a politicized

war of indictments and counter-indictments between

prosecutors of different political persuasions is

conceivable.” Coffee, Metastasis, supra, at 15-16.

Decades before the rise of modern lawfare, Judge

Winter predicted how Margiotta’s vagaries would

“lodge[] unbridled power in federal prosecutors to

prosecute political activists” and threaten “abuse.”

688 F.2d at 143-44. While McNally interred that

theory shortly thereafter, its resurrection in today’s

political climate brings those dangers home.

Once the line between public officials and private

citizens is blurred, the list of viable targets increases

exponentially. There are countless examples of

friends, campaign donors, media personalities, former

officials, or others—on both sides of the aisle—who

have exercised influence over government decisions,

even without formal office or title. See, e.g., Evan

Minsker, Kanye West and Kim Kardashian Lobbied

Trump in Effort to Free A$AP Rocky, PITCHFORK (July

18, 2019); Ashley Parker & Josh Dawsey, Trump’s

Cable Cabinet: New Texts Reveal the Influence of Fox

Hosts on Previous White House, WASH. POST (Jan. 9,

2022); Ron Elving, Who Is Clinton Confidant Sidney

Blumenthal?, NPR (May 20, 2015); Thomas Franck &

Dan Mangan, Senate GOP Suggests Biden Fed

Nominee Sarah Bloom Raskin Used Government Ties

To Help Financial Tech Firm, CNBC (Feb. 3, 2022). It

is easy to imagine an ambitious prosecutor charging

these informal advisors as de facto officials.

Perhaps most pernicious, the revival of Margiotta

gives federal prosecutors a way to pursue the family

members of public officials. Relatives of high-ranking

officials—a President’s father or son, for example, or

a Governor’s brother—hold unparalleled access and

influence. And their independent business interests

may be in a position to benefit from state action. No

specific examples are necessary to appreciate that this

too is a bipartisan reality that provides a uniquely

attractive set of targets. Under the decision below,

prosecutors could characterize these benefits as

breaches of the family members’ duties to the public,

effectively prosecuting public officials by proxy.

These examples raise real ethical concerns. But

“enforcement of inchoate obligations should be by

political rather than criminal sanctions.” Margiotta,

688 F.2d at 143 (Winter, J., dissenting in part). By

contrast, after-the-fact, case-by-case adjudication by

juries asked to evaluate whether a private citizen

exercised sufficient “control” or commanded sufficient

“reliance” is a recipe for prosecutorial abuse.

2. Neither Margiotta nor the panel below seriously

engaged with these concerns. Margiotta responded

only that a “defendant must have acted willfully and

with a specific intent to defraud.” Id. at 129 (majority

op.). But if that were enough to dodge a vagueness

problem, there would have been no need for Skilling

to “pare” the body of pre-McNally cases “to its core.”

561 U.S. at 404. As the Court has noted in many

contexts, an “intent-based test” is utterly inadequate,

as no reasonable party would act “if its only defense to

a criminal prosecution would be that its motives were

pure.” FEC v. Wis. Right to Life, Inc., 551 U.S. 449,

468 (2007) (opinion of Roberts, C.J.).

Margiotta also claimed its test provided a “safe

harbor” so long as a politically active person does not

cross “the point at which he dominates government.”

688 F.2d at 122. But it left unspecified where that

point lies. That was by design. The court rejected a

“hard-and-fast distinction” because it wanted to skirt

“the Scylla of a rule” that would criminalize “mere

influence” and “the Charybdis of a rule” that would

insulate those who “in fact” are “conducting the

business of government.” Id. at 122-23. Margiotta, in

other words, treated the mushiness of its “guidelines”

as a feature rather than a bug. Id. at 122. But in this

Court, employing a “shapeless” standard “to condemn

someone to prison” is no triumph, McDonnell, 579

U.S. at 576, and a “safe harbor” whose “contours”

must be “guess[ed] at” is no haven at all, Gentile v.

State Bar of Nev., 501 U.S. 1030, 1048-49 (1991).

Margiotta is thus not only legally and doctrinally

baseless; it is also a constitutional anathema. Any

doubt should be resolved in favor of its demise.

IV. REJECTING MARGIOTTA REQUIRES REVERSAL.

For the reasons explained, the Margiotta theory is

legally invalid. The consequence for this case is that

Percoco is entitled to acquittal on Count Ten, and a

new trial on the other charges.

1. Acquittal is required on Count Ten because the

evidence supported, at most, an inference that Percoco

agreed to help COR with its LPA issue in exchange for

payment. JA.361-62. Both the alleged agreement and

that “official act” occurred when Percoco was a private

citizen, so he owed no duties to the public and cannot

be guilty of depriving the public of honest services.

The Government below also advanced a “retainer”

theory, contending that Percoco agreed to help COR

“as opportunities arose,” and had indeed helped COR

on unrelated matters nearly a year after his return to

office. JA.648-49, 653. But there was no evidence to

link those actions to the earlier payments. See id. As

the panel admitted, the LPA was the “front and center

issue” for which Percoco was hired (JA.664 n.3), and

the panel relied on that act alone to support the

conviction (JA.680-81). Moreover, the Second Circuit

has held that, after McDonnell, a “retainer” theory is

only viable if the “particular question or matter” was

identified when the official accepted payment. United

States v. Silver, 948 F.3d 538, 545 (2d Cir. 2020).

There was no evidence that the issues Percoco later

helped with (a pay raise earned by Aiello’s son, and

the release of funds the state duly owed COR) were

even foreseen when he accepted the $35,000.

2. At minimum, Percoco is entitled to a new trial

on Count Ten due to the erroneous jury instructions.

The instructions reflected Margiotta’s legal rule. See

JA.511. Because the jury thus almost certainly

convicted “for conduct that is not unlawful,” vacatur

is required. McDonnell, 579 U.S. at 579-80.

The alternative “retainer” theory cannot render

harmless the instructional error. Beyond the points

above, the panel admitted that the jury had also been

wrongly instructed about the retainer theory. JA.65357. The panel found that error harmless based solely

on the Margiotta theory: that Percoco agreed to press

a state agency “to reverse its position on the need for

a [LPA].” JA.661. With both theories now tainted by

instructional error, there is no avoiding vacatur on

Count Ten, at minimum.

3. The Margiotta error also requires a new trial on

the CPV counts. As to those counts, the Government

argued that Percoco took “official acts” while he was a

private citizen. See JA.374, 484. The instructional

error therefore may well have influenced the verdict.

Moreover, because the evidence as to CPV was so thin,

prosecutors leaned heavily on the COR conduct to

insinuate a corrupt pattern. But the COR conduct

was not criminal and should not have been admitted.

Fairness thus requires a new trial on the CPV counts

too. See United States v. Rooney, 37 F.3d 847, 855-57

(2d Cir. 1994); Murphy, 323 F.3d at 118-22.

CONCLUSION

This Court should reverse the decision below and

remand for further proceedings.

AUGUST 2022

Respectfully submitted,

BARRY A. BOHRER

MINTZ, LEVIN, COHN,

FERRIS, GLOVSKY &

POPEO, P.C.

666 Third Ave.

New York, NY 10017

YAAKOV M. ROTH

Counsel of Record

BRINTON LUCAS

BRETT WIERENGA

JONES DAY

51 Louisiana Ave., NW

Washington, DC 20001

(202) 879-3939

yroth@jonesday.com

MICHAEL L. YAEGER

CARLTON FIELDS, P.A.

405 Lexington Ave.,

36th Floor

New York, NY 10174

MATTHEW J. RUBENSTEIN

JONES DAY

90 South 7th St.

Minneapolis, MN 55402

Counsel for Petitioner

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