Amicus Curiae Brief — McAusland v. United States

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No. 92-960

IN THE

Supreme Court of the United States

October Term, 1992

THOMAS D. McAUSLAND and

CHRISTOPHER PAFORT,

Petitioners,

UNITED STATES OF AMERICA,

Respondent.

On Petition For Writ Of Certiorari To

The United States Court Of Appeals

For The Fourth Circuit

BRIEF OF ELECTRONIC INDUSTRIES ASSOCIATION

AS AMICUS CURIAE IN SUPPORT OF PETITIONERS

PETER F. McCLOSKEY

(Counsel of Record)

JOHN J. KELLY

ELECTRONIC INDUSTRIES ASSOCIATION

2001 Pennsylvania Avenue, N.W.

Washington, D.C. 20006

(202) 457-4917

Date: February 5, 1993

Balmar Legal Publishing Services, Washington, D.C., (202) 682-9800

os aati

QUESTION PRESENTED

Whether a private citizen who obtains unclassified govern-

ment information may be convicted of theft of government

property (18 U.S.C. §641) or wire fraud (18 U.S.C. §1343)

where disclosure of the information, although not prohibited by

Statute or published regulation, violates internal government

rules, custom, or practice.

TABLE OF CONTENTS

Page

py Fe ayy Vay |. ill

INTEREST OF THE AMICUS CURIAE ...... l

REASONS FOR GRANTING THE PETITION . 2

Ee he eC ae a 4

I. In The Absence Of Statute Or Published

Regulation Prohibiting Disclosure, There

Can Be No Criminal Violation For Obtaining

GovernmentInformation .......... 4

1. Government Information Is Presumptively

Available tothe Public ......... 5

2. Criminal Liability Can Be Based On

Obtaining Government Information Only

Where Disclosure Of The Information Is

Specifically Prohibited By Another Statute

or Published Regulation ......... 8

DIET Sek <6 6 bw ho 6s 6 + ss + 0 6 14

ill

TABLE OF AUTHORITIES

Cases

Balthazar v. Superior Court,

Fee wt fh. oe A, |

Bunge Corp. v. United States, 5 Cl. Ct. 511

(1984), aff d without op., 765 F.2d 162

ee ey ke ee 8

Connally v. General Construction Co.,

Mate UE ns Ge ee tt

Department of the Air Force v. Rose,

SR RE |

D.W. Food Centers, Inc. v. Block,

786 F.2d 751 (6th Cir. 1986) .........

Grayned v. City of Rockford,

In re Pacific Far East Line, Inc.,

314 F. Supp. 1339 (N.D. Cal. 1970),

aff d, 472 F.2d 1382 (9th Cir. 1973) .....

Kolender v. Lawson, 461 U.S. 352 (1983) .....

Morton v. Ruiz, 415 U.S. 199 (1974) ........

NI Ind.. Inc. v. United States,

841 F.2d 1104 (Fed. Cir. 1988) ........

NLRB v. Robbins Tire & Rubber Co.,

ee She Es sw os oo ete one bs

Robert v. United States Jaycees,

RUD se ck se

United States v. Fowler,

932 F.2d 306 (4th Cir. 1991) .........

United States v. Girard, 601 F.2d 69

(2d Cir.), cert. denied, 444 U.S. 871 (1979)

—s

United States v. Hartec Enterprises,

967 F.2d 130 (Sth Cir. 1992) ...

United States v. Jeter,

775 F.2d 670 (6th Cir. 1985),

cert. denied, 475 U.S. 1142 (1986)

United States v. Lambert,

446 F. Supp. 980 (D. Conn. 1978),

aff d sub nom, 601 F.2d 69 (2d Cir),

cert. denied, 444 U.S. 871 (1979) .

United States v. Morison,

844 F.2d 1057 (4th Cir.),

cert. denied, 488 U.S. 908 (1988) .

United States v. Tobias,

836 F.2d 449 (9th Cir.)

cert. denied, 485 U.S. 991 (1988) .

United States v. Truong Vinh Hung,

629 F.2d 908 (4th Cir. 1980),

cert. denied, 454 U.S. 1144 (1982)

STATUTES AND REGULATIONS

Re Eo. rar near ore

Ee is ht oe a ea eee ee

Pee ee ik ee a wo

Se as UE aw yw ee ke

18 U.S.C. §1906-1908 .........

ISU SR SESS) ww tw

ra 8 ode : 5 a ae

A UR ee x bee ho oe wee

DOD Reg. 5400.7-R, §§4-100, 4-300(a),

Se oe ae 2

xs ~& 2° ee

Sa) ae

Ys ee ee Se

> Be. ee

ee ae ae oe

ee ae ee oo

a? Ve) ok a ee

ie oo ot a

reprinted in 48 C.F.R. ch. 2, app. L (1987)

10,11

9,11

Exec. Order 12,356, 3 C.F.R. 166 (1982),

reprinted 50 U.S.C. §401 note (1982) ..... 8

Intelligence Identities Protection Act of 1982,

PERM IPURE 8c \. s ¥le bo 8% bee ee

Pub. L. No. 101-189, §822, 103 Stat. 1503

OTHER AUTHORITIES

Department of Defense, Selling to the Military |

(Government Printing Office 1979) ...... 6,7

Hearings of Senate Subcommittee On Oversight

of Government Management of Governmental

Affairs, 101st Cong., 1st Sess. 120

Ns Nay ae 2 A oa ae 6,7

White Paper on DOD Acquisition Improvement,

ch. 4, reprinted in 44 Fed. Cont. Rep. 1067

gt, | SERPS erage test aie aa 6

No. 92-960

IN THE

Supreme Court of the Wnited States

October Term, 1992

THOMAS D. McAUSLAND and

CHRISTOPHER PAFORT,

Petitioners,

Vv.

UNITED STATES OF AMERICA,

Respondent.

On Petition For Writ Of Certiorari To

The United States Court Of Appeals

For The Fourth Circuit

BRIEF OF ELECTRONIC INDUSTRIES ASSOCIATION

AS AMICUS CURIAE IN SUPPORT OF PETITIONERS

This brief amicus curiae of the Electronic Industries

Association is filed with the consent of the parties and in support

of petitioners, as provided for in the Rules of this Court.

INTEREST OF THE AMICUS CURIAE

The Electronic Industries Association (EIA) is a trade

association comprised of companies involved in the design,

_ manufacture, distribution and sale of electronics parts, com-

ponents, equipment and systems. Many of these member com-

panies are contractors to the federal government. Consequently,

EIA is active in legal matters which impact on the government

procurement process.

Amicus EIA is concerned that the prosecution’s theory in

this case will chill the exchange of information that is a natural

and important part of contracting with the federal government.

Free and constant communication between contractors and their

government customers is essential to the government’s procure-

ment of goods and services. This case involves the prosecution

of a private citizen for obtaining unclassified information about

a procurement. The prosecution’s theory imposes criminal sanc-

tions on any individual who fails to successfully navigate the

welter of unpublished internal government rules, customs, and

practices regarding the disclosure of information. As such, this

case threatens the free flow of information that lies at the heart

of the government procurement process.

For this reason, amicus EIA believes that this case is of

exceptional importance. Amicus has followed this case closely

and filed briefs before the United States Court of Appeals for

the Fourth Circuit. EIA believes that as the representative for

numerous private contractors, it brings a unique perspective to

this case. As a participant in government contracting, amicus

EIA can show how this prosecution will gravely harm the

effective workings of the government procurement process and

runs counter to well established law.

REASONS FOR GRANTING THE PETITION

In this case, petitioners Thomas D. McAusland and Chris-

topher M. Pafort challenge their conviction for theft of govern-

ment property under 18 U.S.C. §641 (and related wire fraud and

conspiracy counts) for obtaining unclassified government infor-

mation in connection with certain government procurements.

McAusland and Pafort were marketing executives at Litton Data

Systems. The two Litton marketing executives were not charged

with using unlawful means to obtain this information from

government officials. There was no allegation that appellants

bribed or blackmailed any official or stole any document in

connection with obtaining this information. Nor was there any

allegation that the disclosure of this government information

violated any published rule, regulation or statute. Rather, the

defendants were convicted solely because unpublished, internal

government policies and practices prohibited the disclosure of

this information.

This prosecution presents a novel theory of criminal

liability. The courts of appeals are split as to whether an infor-

mation can be considered a “thing of value” within the reach of

section 641. Compare, e.g., United States v. Tobias, 836 F.2d

449, 451, (9th Cir.), cert. denied, 485 U.S. 991 (1988) (“section

641 should not be read to apply to intangible goods”) with

United States v. Fowler, 932 F.2d 306, 309-10 (4th Cir. 1991)

(rejecting Ninth Circuit’s interpretation). Moreover, no court

prior to this case had extended criminal liability to cover the

receipt of information in the absence of a statute or regulation

prohibiting dissemination of the information. As a result, the

ruling below expands the criminal law into new areas, with

potentially far-reaching and dangerous ramifications.

Section 641 prohibits the conversion, conveyance or dis-

posal of government property “without authority.” The phrase

“without authority” is easily understood when applied to the

conversion of tangible property, such as a post office truck or

office supplies. This phrase, however, defies clear, consistent

and ascertainable meaning when applied to government infor-

mation. Government information is presumed to be available to

the public. Government contractors expect to exchange infor-

mation with their government customer. In the face of the

expectation and presumption of public availablity of govern-

ment information, criminal liability must be grounded on more

than unpublished internal government rules and customs. A fair

reading of the statute and the dictates of due process demand

that, in the context of government information, the phrase

“without authority” requires that the private citizen obtain the

government information in violation of a statute or published

regulation.

The exchange of information between contractors and the

government is essential to the government's ability to acquire

complex electronics in a timely and cost-effective manner. This

continuous dialogue between the government customer and its

private contractor suppliers is threatened, however, by the con-

cept that private individuals can be held criminally liable for

obtaining information whose disclosure violates an un-

published, internal government practice or policy. Amicus EIA

recognizes that there exists certain information which for na-

tional security or other reasons should not be publically avail-

able; its member companies steadfastly adhere to all statutes or

published regulations prohibiting the release of specific pieces

of information. Nevertheless, to extend criminal liability under

18 U.S.C. §641 to encompass obtaining information whose

disclosure is prohibited by internal government rules or customs

is contrary to both well established law and sound public policy.

ARGUMENT

I. In The Absence Of Statute Or Published Regulation

Prohibiting Disclosure, There Can Be No Criminal

Violation For Obtaining Government Information.

When contractors exchange information with government

employees, they do so with the understanding that the following

syllogism governs their relationship: 1) government information

is presumptively available to the public, 2) except where dis-

closure is specifically prohibited by published law or regulation;

3) therefore, in the absence of a published law or regulation,

there can be no criminal violation for obtaining government

information. The prosecution’s theory here conflicts with this

syllogism. The prosecution in this case ignores the reality of the

government-contractor relationship and expands criminal

liability for obtaining government information beyond the

bounds permitted by statute or the United States Constitution.

l. Vv ion s 1V vailabl

to the Public

The presumption throughout American history has been

that information possessed by the government is freely available

to the citizenry. Except for a few specifically designated areas

such as national security affairs, the conveyance of government

information is not subject to restriction. In recent years, this

principle has been codified in the Freedom of Information Act,

5 U.S.C. §552 (1988), as amended (the “FOIA”), which makes

-Clear that government records and information will generally be

ade available to the public. The FOIA requires public dis-

closure of all government records, subject to nine specific

exemptions. See Department of the Air Force v. Rose, 425 U.S.

352 (1976). “The basic purpose of FOIA is to ensure an

informed citizenry, vital to the functioning of a democratic

society, needed to check against corruption and to hold the

governors accountable to the governed.” NLRB v. Robbins Tire

& Rubber Co., 437 U.S. 214, 242 (1978). “{D]isclosure, not

secrecy, is the dominant objective of the [FOIA] Act.” Dept. of

the Air Force v. Rose, 425 U.S. at 460-61.

This general principle extends to government procure-

ments. Industry must work closely with the government to meet

the complex procurement demands of the government, and, as

a result, government employees constantly provide information

to contractors about the government’s procurement require-

ments. The need for exchanges of information in the government

procurement process has been acknowledged by Department of

Defense officials:

Because of the nature of the Defense marketplace,

with its enormous resource investments, extended

research and development efforts and lengthy periods

required to get complex weapons systems into

production, Government and industry share an inter-

est in the affirmative provision of sufficient relevant

information regarding the Government’s future needs

to enable industry reasonably to plan to meet them.

Hearings of Senate Subcommittee On Oversight of Government

Management of Governmental Affairs, 101st Cong., 1st Sess.

120 (Feb. 24, 1989) (“Oversight Hearings”), at 73 (testimony of

Undersecretary of the Navy H. Lawrence Garrett, III). Assistant

Secretary of Defense Wade has voiced similar sentiments, ex-

plaining that the Government’s goal was not a distant, arm’s-

length regulatory relationship with contractors, but rather a

“close, continuous association of [government] users,

developers, the R&D community, and manufacturers.” See

White Paper on DOD Acquisition lmprovement, ch. 4, reprinted

in 44 Fed. Cont. Rep. 1067 (BNA) (1985).

In addition, the government’s own written advice to con-

tractors encourages them to obtain information from the

“government customer.” The Department of Defense in its

pamphlet, Selling to the Military, advises prospective contrac-

tors:

Interested business firms must help themselves by

learning how the Department of Defense conducts its

business, and by seeking out those military purchas-

ing offices which buy supplies and services they can

supply.

Actually, there is nothing particularly new or different

in selling your products or services to the various

defense organizations. Basic principles followed in

selling within the private sector apply in dealing with

the Department of Defense. Two of these principles

that are especially appropriate in establishing and

keeping a working relationship with military procure-

ment activities are:

Learn your customer’s needs as well as his buying

policies and practices.

Follow leads on where buying is done, and search out

selling opportunities in all segments of the defense

organization.

Department of Defense, Selling to the Military 1 (Government

Printing Office 1979).

In fact, the need for government contractors to have espe-

cially wide access to government information was recognized

in the development of the “For Official Use Only” (““FOUO”)

stamp. Pursuant to published DOD regulations, designating a

document as FOUO indicated that a document could “be with-

held from the public for one or more of the reasons cited in” the

exemptions to FOIA. The published DOD regulations expressly

did not prevent exchanges of FOUO-marked information “be-

tween DOD components and DOD contractors, consultants and

grantees.” DOD Reg. 5400.7-R, §§4-100, 4-300(a), reprinted in

48 C.F.R. ch. 2, app. L (1987) (emphasis added).

The FOUO legend also is a perfect example of the problems

inherent in relying on internal government practices. The rule

advocated by the prosecution here opens the way for a confusing

maze of conflicting departmental policies and customs. At over-

sight hearings held by the Senate in 1989, Army and Air Force

representatives stated that they relied on the FOUO legend to

indicate that a document should not be released to contractors.

Navy representatives indicated that their command adopted a

different rule allowing disclosure of FOUO documents to con-

tractors. Senate Subcommittee Chairman Levin pointedly noted

that DOD’s own rules permitted documents marked FOUO to

be available to contractors. See Oversight Hearing, at 34-37,

59-62. As Senator Levin noted, the marking of documents

FOUO left a “big gray area out there [containing] a lot of

documents.” Id. at 60.

The “big gray area” surrounding FOUO documents is

typical of the conflicting rules and practices regarding disclosure

of information. Only with promulgation of the regulations im-

plementing the Federal Procurement Policy Act Amendments

of 1988 (“Procurement Integrity Act’) did there emerge “a

single uniform regulation for the Department of Defense regard-

ing dissemination of, and access to, acquisition information.”

Pub. L. No. 101-189, §822, 103 Stat. 1503. Yet, the Procure-

ment Integrity Act is neither all encompassing, nor necessarily

the final word on the disclosure of procurement information.

Different agencies and departments may develop their own

unpublished internal rules. The inconsistencies and contradic-

tions regarding FOUO documents and the pre-Procurement

Integrity Act scheme in general, is symptomatic of the problems

inherent in relying on unpublished internal government policies

and customs.

In light of the longstanding policy favoring public access

to government information and the close customer-supplier

relationship that the government fosters, contractors assume that

it is permissible for them to obtain the information provided by

government personnel. It is understood that Congress and the

executive may Carve out exceptions to this general presumption

of public access if they so choose. Congress and the executive

have plainly shown their ability to prohibit the release of certain

specific types of information, for example, passing laws and

promulgating regulations prohibiting the disclosure of classified

national security information, see Exec. Order 12,356, 3 C.F.R.

166 (1982), reprinted 50 U.S.C. §401 note (1982),! grand jury

materials, see Fed. R. Crim. P. 6(e), and the names of secret

It should be noted that the decisions in this Circuit upholding §641

convictions based on government information have all arisen in the context

‘ae eowme, ow

government agents, see Intelligence Identities Protection Act of

1982, 50 U.S.C. §421.2 Absent such a clear public pronounce-

ment that the information in question is not to be disclosed, one -

should be permitted to assume that government information is

properly available to the general public.4

Unpublished, internal government rules or practices

prohibiting disclosure are too slender a reed to sustain criminal

liability for obtaining government information. Section 641

prohibits the conveyance of government property “without

authority”.4 When applied to government information, this

Statute, standing alone, is too vague to survive close scrutiny. In

the context of tangible property, the statute’s meaning is

straightforward. Tangible government property, such as a

government vehicle or computer, does not have an underlying

presumption of public availability and use. In regard to the

intangible of government information, however, the “without

authority” language is “virtually devoid of meaning.”

of classified national security information. See United States v. Morison, 844

F.2d 1057 (4th Cir.), cert. denied, 488 U.S. 908 (1988); United States v.

Fowler, 932 F.2d 306 (4th Cir. 1991); United States v. Truong Vinh Hung,

629 F.2d 908 (4th Cir. 1980), cert. denied, 454 U.S. 1144 (1982).

2 See also 18 U.S.C. §1902 (crop reports); 18 U.S.C. §1906-1908 (bank

examination information); 18 U.S.C. §2511(a)(C) (information obtained

through electronic surveillance); 26 U.S.C. §7213 (tax returns). It is also

significant to note that Congress has now enacted a statute specifically

criminalizing the use of specific types of government procurement informa-

tion. See 41 U.S.C. §423(a) (1991).

3 One also should be permitted to assume that government personnel are

performing their job properly, that is, releasing data which is within their

authority to release.

4 Section 641, in pertinent part, imposes criminal penalties on any person

who “knowingly converts . . . or without authority, sells, conveys or disposes

of any . . . thing of value of the United States.” 18 U.S.C. §641.

[B]ecause property rights in tangible items are easily

discerned, there is little confusion about when a trans-

fer or possession is ‘without authority’. In the realm

of government records and information, however,

there is no established common law of exclusive

possession. In addition, the government’s interest in

secrecy must in every case be carefully balanced

against the First Amendment interest in disclosure . .

. . By regulating tne disclosure of government infor-

mation, $641 clearly touches a sensitive constitution-

al area. Therefore the need for definiteness is acute.

Yet §641 provides no greater guidance as to when

disclosure is prohibited than it does in regard to tradi-

tionally recognizable possessory interests. Indeed, the

Statutory phrase ‘without authority’ is virtually

devoid of meaning when applied to the transfer of

information.

United States v. Lambert, 446 F. Supp. 890, 898 (D. Conn.

1978), aff d sub nom. United States v. Girard, 601 F.2d 69 (2d

Cir.), cert. denied, 444 U.S. 871 (1979).

The case law governing §641 has recognized the

problematic nature of the “without authority” language. Conse-

quently, courts have mandated that, in regard to government

information, section 641 can only serve as the grounds for a

criminal prosecution where the disclosure of the information in

question was clearly and expressly prohibited by another statute

or published regulation.

The section must be read as merely establishing a

penalty for the violation of other, more particular,

prohibitions against disclosure. Thus, the jury may

consider only transfers of information affirmatively

prohibited by other federal statutes, administrative

rules and regulations...

Id.> See also United States v. Morison, 894 F.2d at 1074 (statute

is “clarified by government’s classification system for national

security documents”); United States v. Jeter, 775 F.2d 670,

681-82 (6th Cir. 1985) (upholding §641 convictions where

appellants violated Fed. R. Crim. P. 6(e) by obtaining secret

grand jury information), cert. denied, 475 U.S. 1142 (1986).®

Employees of government contractors working closely on

a daily basis with government employees are entitled to fair

warning of their possible criminal exposure when receiving

information from government officials. The “without authority”

language of §641, by itself, offers no guidance as to what

conduct is to be punished in regard to government information.

Moreover, with the large number of unpublished internal

government rules and practices regarding information dissemi-

nation, the potential for selective enforcement is great. In light

of the stakes involved — deprivation of one’s liberty and

curtailment of the exchange of government information — the

need for a bright line rule is critical. The only acceptable bnght

line rule mandates that §641 be applied only where there exists

another statute or published regulation prohibiting disclosure of

the government information. Anything less than a bright line

rule based on the existence of another statute or published

The Lambert court also speculated that “perhaps” longstanding

government practices alone could be used to give content to Section 641. We

have found no cases, however, where courts have ruled that government

practices or customs can serve as the basis for a Section 641 conviction.

Moreover, the Second Circuit in affirming Lambert specifically zeferred only

to “rules and regulations,” which it considered “both a delimitation and

clarification of the conduct proscribed by (§641].” Girard, 601 F.2d at 71.

rule of lenity compels us to construe ambiguous criminal statutes in iavor of

lenity. The rule promotes fair notice of prohibited conduct and reduces the

likelihood that unintentionally criminal conduct will be penalized.” United

States v. Hartec Enterprises, 967 F.2d 130, 133 (Sth Cir. 1992) (citations

ommitted) (applying rule of lenity to Section 641 and reversing convictions).

regulation prohibiting disclosure would run afoul of the due

process clause.

Under the due process clause, a law “must give the person

of ordinary intelligence a reasonable opportunity to know what

is prohibited so that he may act accordingly.” Grayned v. City

of Rockford, 408 U.S. 104, 108 (1972).’ Criminal penalties

cannot be imposed where the statute “forbids . . . the doing of

an act in terms so vague that men of common intelligence must

necessarily guess at its meaning and differ as to its application.”

Robert v. United States Jaycees, 468 U.S. 609, 629 (1984)(quot-

ing Connally v. General Construction Co. 269 U.S. 385, 391

(1926)); see also Balthazar v. Superior Court, 573 F.2d 698,

699-700 (1st Cir. 1978). Because the general presumption holds

that government information is publicly available, fair warning

under the due process clause requires that the prohibition against

disclosure take the form of a statute or published regulation.

To permit government contractors to be held criminally

liable based on internal departmental rules or practices also

would be inconsistent with the long line of cases holding that a

person cannot be held responsible for rules or regulations which

are not published in the Federal Register. See, e.g., Bunge Corp.

v. United States, 5 Cl. Ct. 511, 523 (1984), aff'd without op.,

765 F.2d 162 (Fed. Cir. 1985); D.W. Food Centers, Inc. v. Block,

786 F.2d 751, 757 (6th Cir. 1986); Jn re Pacific Far East Line,

Inc., 314 F. Supp. 1339 (N.D. Cal. 1970), aff d, 472 F.2d 1382

(9th Cir. 1973).8 Publication in the Federal Register has been

deemed necessary “to avoid the inherently arbitrary nature of

. “{A] penal statute [must] define the criminal offense with sufficient

definitions thai ordinary people can understand what conduct is prohibited

and in a manner that does not encourage arbitrary and discriminatory enfor-

cement.” Kolender v. Lawson, 461 U.S. 352, 357 (1983).

“[{S}tatutes and case law make clear the requirement that regulations

that affect a person’s substantive rights [must] be published in the Federal

unpublished ad hoc determinations.” Morton v. Ruiz, 415 U.S.

199, 232 (1974). Similarly, under §641, the statute or published

regulation is necessary to avoid the prospect of criminal liability

being premised on an individual’s subjective knowledge or,

even more dubiously, conscious avoidance of knowledge of

some internal departmental policy or practice governing release

of certain information.

CONCLUSION

For the-reasons set forth above, amicus curiae Electronic

Industries Association respectfully submits that the petition

should be granted.

Respectfully submitted,