Opposition Brief — Kay v. United States (No. 07-1281)

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No.07-1281 2 LE Eke covaris. |

In the Supreme Court of the GAnited States

DAVID KAY AND DOUGLAS MURPHY, PETITIONERS

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

GREGORY G. GARRE

Acting Solicitor General

Counsel of Record

MATTHEW W. FRIEDRICH

Acting Assistant Attorney

General

JOSEPH C. WYDERKO

Attorney

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

QUESTIONS PRESENTED

1. Whether the indictment—which petitioners did

not challenge until after they were convicted at trial—

adequately alleged that petitioners acted “willfully” in

violating the Foreign Corrupt Practices Act of 1977

(FCPA), 15 U.S.C. 78dd-1 et seg.

2. Whether the court of appeals, after concluding

that the legislative history of the FCPA demonstrated

Congress’s intent to prohibit the type of bribes paid by

petitioners, properly declined to apply the rule of lenity

in construing the statute.

(1)

TABLE OF CONTENTS

Page

BEC PEE LO PE PE LS OPES ST ry 1

oii a his Clg She ee ig Cee yee ea 1

IE ss oy es age aly cae RR ew RAR ee ae eee 1

EE vce sh ve ie Ce uee es renee eee ae ene ae pee ee ees 8

ET PR Ge TNT L ae HEPC eS A Pa ERA RP ae OAS 17

TABLE OF AUTHORITIES

Cases:

Bifulco v. United States, 447 U.S. 381 (1980) .......... 14

Bryan v. United States, 524 U.S. 184 (1998) ............ 7

Crandon v. United States, 494 U.S. 152 (1990) ...... 15, 17

Holloway v. United States, 526 U.S. 1 (1999) .......... 15

Hughey v. United States, 495 U.S. 411 (1990) .......... 16

Ladner v. United States, 358 U.S. 169 (1958) .......... 15

Moskal v. United States, 498 U.S. 103 (1990) .......... 14

Muscarelio v. United States, 524 U.S. 125 (1998) .... 14,15

Ratzlafv. United States, 510 U.S. 1385 (1994) .......... 16

Reno v. Koray, 515 US. SOCI0G6) ° .. «2... oneness 1,15

Smith v. United States, 508 U.S. 223 (1993) ........... 14

United States v. Allen, 406 F.3d 940 (8th Cir. 2005),

cert. denied, 127 S. Ct. 826 (2006) .................. 9

United States v. Avery, 295 F.3d 1158 (10th Cir.),

cert. denied, 537 U.S. 1024 (2002) ................. 10

United States v. Childress, 58 F.3d 693 (D.C. Cir.

1995), cert. denied, 516 U.S. 1098 (1996) ............ 10

United States v. Coleman, 656 F.2d 509 (9th Cir.

EE dies BASRA ne CCS om EO ER ee tae es 12

(III)

Cases—Continued: Page

United States v. Cor-Bon Custom Bullet Co., 287 F.3d

576 (6th Cir.), cert. denied, 537 U.S. 880 (2002) ....... 9

United States v. Corporan-Cuevas, 244 F.3d 199 (1st

Cir.), cert. denied, 534 U.S. 880 (2001) .............. 9

United States v. Du Bo, 186 F.3d 1177 (9th Cir.

NE oie aa 5 ees ka ENED RAED RRS EN Ea 9,11

United States v. Gibson, 409 F.3d 325 (6th Cir. 2005) ... 10

United States v. Granderson, 511 U.S. 39 (1994) ....... 14

United States v. Higgs, 353 F.3d 281 (4th Cir. 2003) ..... 9

United States v. James, 980 F.2d 1314 (9th Cir. 1992),

cert. denied, 510 U.S. 888 (1993) .... ccc cece 12

United States v. Pheaster, 544 F.2d 353 (9th Cir.

1976), cert. denied, 429 U.S. 1099 (1977) ............ 12

United States v. Prentiss, 256 F.3d 971 (10th Cir.

ER icc ou ea rane Oe ak ERS eS ee ke ee 9

United States v. Previte, 648 F.2d 73 (ist Cir. 1981) ....10

United States v. R.L.C., 503 U.S. 291 (1992) ........ 14, 16

United States v. Resendez-Ponce, 549 U.S. 102 (2007) ...9

United States v. Robinson, 367 F.3d 278 (5th Cir.),

cert. denied, 543 U.S. 1005 (2004) .................. 9

United States v. Sabbeth, 262 F.3d 207 (2d Cir.

NN hg cil edad awed eae eee eee 10

United States v. Spinner, 180 F.3d 514 (3d Cir.

SD 6a KaN a oc Cok eae a eee bean eens 9,12

United States v. Trennell, 290 F.3d 881 (7th Cir.),

cert. denied, 587 U.S. 1014 (2002) .................. 9

United States v. Vitillo, 490 F.3d 314 (3d Cir. 2007) ....12

United States v. Vogt, 910 F.2d 1184 (4th Cir. 1990),

cert. denied, 498 U.S. 1083 (1991) .................- 10

Cases—Continued: Page

United States v. Wander, 601 F.2d 1251 (3d Cir.

DU aie a oe oS se ae as we 12

United States v. Watkins, 709 F.2d 475 (7th Cir

EE rao neG oak RES RSH ONENRETERERK adda ood e ee 10

United States v. Wells, 519 U.S. 482 (1997) ............ 15

United States v. White, 241 F.3d 1015 (8th Cir. 2001) ... 10

Statutes:

Foreign Corrupt Practices Act of 1977, 15 U.S.C.

78&dd-1 et seq.:

Ne ae gS el ae ae 4

En oi ees aavee cee n 2,4

Se, ED ss wo os ee cen eccaceweces 3, 13

on ons hee news senwaueeen 5, 14

nde k eewa teas wad Same 5

Be es EID i nn oes ccc e cccwevceuweeean 14

eben ee aeeeee 2

eo ah a be ise 2 eGo 4

I Ss so cae ea 4

ee eS ad de gae Ake e eee 2,4

a al ae aa ulus fe ielde eal imc aaricintn ea ceas a aa eae 2

Miscellaneous:

H.R. Conf. Rep. No. 576, 100th Cong., 2d Sess. (1988) ...6

Webster’s Third New International Dictionary of the

ee 13

Jn the Supreme Court of the Gnited States

No. 07-1281

DAVID KAY AND DOUGLAS MURPHY, PETITIONERS

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinions of the court of appeals (Pet. App. la-

52a, 53a-108a) are reported at 513 F.3d 432 and 359 F.3d

738, respectively. The opinion of the district court (Pet.

App. 109a-121a) is reported at 200 F. Supp. 2d 681.

JURISDICTION

The judgment of the court of appeals was entered on

October 24, 2007. A petition for rehearing was denied on

January 10, 2008 (Pet. App. 122a-130a). The petition for

a writ of certiorari was filed on April 9, 2007. The juris-

diction of this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

Following a jury trial in the United States District

Court for the Southern District of Texas, petitioners

were each convicted on 12 counts of paying bribes to

(1)

foreign officials, in violation of the Foreign Corrupt

Practices Act of 1977 (FCPA), 15 U.S.C. 78dd-1(a) and

78dd-2(a); and one count of conspiring to do so, in viola-

tion of 18 U.S.C. 371. Murphy was also convicted of ob-

structing a proceeding before the Securities and Ex-

change Commission (SEC), in violation of 18 U.S.C.

1505. Kay was sentenced to 37 months of imprisonment,

to be followed by two years of supervised release. Pet.

App. 131a-148a. Murphy was sentenced to 63 months of

imprisonment, to be followed by three years of super-

vised release. Id. at 149a-165a.

1. Petitioners were officers of American Rice, Inc.

(ARI), a publicly-traded company based in Houston that

processes and sells rice throughout the world. Murphy

was the president and chief executive officer, and Kay

was a vice president who reported directly to Murphy.

Pet. App. 2a; Gov’t C.A. Br. 4.

In the 1990s, ARI opened a rice processing plant in

Haiti, and it formed the Rice Corporation of Haiti

(RCH) to operate the plant. ARI shipped rice in bulk

from Texas to Haiti, where the rice was processed and

bagged for distribution. The Republic of Haiti required

rice importers to pay substantial customs duties and

taxes on their rice shipments and sales. Pet. App. 2a;

Gov’t C.A. Br. 4-6. Petitioners became concerned that

the required payments put ARI at a competitive disad-

vantage relative to smugglers who evaded the payments

and competitors who bribed customs officials to accept

reduced payments. Gov’t C.A. Br. 7-9; see Pet. App. 8a

& n.14.

In January 1998, petitioners decided to reduce ARI’s

payments by under-invoicing the amount of rice in their

shipments and bribing Hz tian customs officials to ac-

cept the false documents. They directed ARI employees

to prepare two sets of documents for each shipment:

one for internal use that accurately reflected the amount

of rice, and another for presentation to customs officials

that under-declared the amount by up to 50%. Petition-

ers authorized RCH employees to pay bribes to the cus-

toms officials to accept the false invoices. Gov't C.A. Br.

9-11. Between January 1998 and August 1999, petition-

ers authorized the use of false documents and the pay-

ment of bribes in connection with 12 shipments of rice.

For those shipments, ARI under-declared 29,987 metric

tons of rice valued at over $7.7 million, resulting in a

total gross savings of over $1.5 million and a total net

savings (after the payment of the bribes) of over $1 mil-

lion. 7d. at 11-12.

In October 1999, Murphy was fired by ARI. In 2001,

he testified under oath in connection with an investiga-

tion by the SEC. During his testimony, Murphy lied

about his knowledge of the false shipping documents and

his involvement in the bribes paid to Haitian officials.

Gov’t C.A. Br. 13-14.

2. A grand jury in the Southern District of Texas

returned an indictment charging petitioners with 12

counts of violating the FCPA, which prohibits publicly

traded companies and their officers from making “use of

the mails or any means or instrumentality of interstate

commerce corruptly in furtherance of” a bribe to a for-

eign official for purposes of influencing the official’s ac-

tions “in order to assist [the company] in obtaining or

retaining business for or with * * * any person.” 15

U.S.C. 78dd-1(a)(1). Pet. App. 110a. Under 15 U.S.C.

78ff{(c)(2)(A), an officer who “willfully” violates the

FCPA is subject to criminal penalties.’

Petitioners moved to dismiss the indictment. They

argued that the payment of bribes to foreign officials to

reduce customs duties and taxes did not satisfy the so-

called “business nexus” element of the FCPA, 7.¢., that

the bribes “assist * * * in obtaining or retaining busi-

ness.” 15 U.S.C. 78dd-1l(a). Petitioners claimed that the

business nexus element limited the scope of the FCPA

to bribes paid to secure new business or to retain exist-

ing business. Pet. App. 113a. The district court agreed

and dismissed the indictment. Jd. at 109a-121a.

3. The court of appeals reversed. Pet. App. 538a-

108a. It concluded that “bribes paid to foreign officials

in consideration for unlawful evasion of customs duties

and sales taxes could fall within the purview of the

FCPA’s proscription” when “the bribery was intended

to produce an effect—here, tax savings—that would ‘as-

sist in obtaining or retaining business.’” /d. at 89a-90a.

The court of appeals agreed with the district court

that the “obtain[] or retain[] business” language was am-

biguous. Pet. App. 62a, 67a. But after examining legis-

lative history, 7d. at 67a-87a, the court concluded that

Congress did not intend “to limit the FCPA’s applicabil-

ity to cover only bribes that lead directly to the award or

renewal of contracts,” 2d. at 88a.

When the FCPA was enacted in 1977, the court of

appeals noted, the initial House bill contained no limit-

' Petitioners incorrectly cite 15 U.S.C. 78ff(a) for the proposition that

the FCPA criminalizes only “willful” violations. Pet. 2, 7,9, 12,13. But

that provision applies to “[a]ny person who willfully violates any pro-

vision of this chapter (other than section 78dd-1 of this title)” (emphasis

added). An individual who willfully violates Section 78dd-1 is subject to

criminal penalties under 15 U.S.C. 78ff(e)(2)(A).

ing “business nexus” element, but Congress adopted the

Senate’s proposal to include such an element. Pet. App.

68a-70a. That proposal was based on an SEC Report

that had identified four types of illegal payments, includ-

_ing payments “made with the intent to assist the com-

pany in obtaining or retaining government contracts.”

Id. at 71a (internal quotation marks omitted). The court

concluded “that, in using the word ‘business’ when it

easily could have used the phraseology of [the] SEC Re-

port, Congress intended for the statute to apply to

bribes beyond the narrow band of payments sufficient

only to ‘obtain or retain government contracts.’” Jd. at

73a.

The court of appeals found additional support for its

conclusion in the 1988 amendments to the FCPA, which

added an explicit statutory exception for payments “to

expedite or to secure the performance of a routine gov-

ernmental action,” 15 U.S.C. 78dd-1(b), as well as an

affirmative defense for payments that were legal in the

country in which they were offered or that constituted

bona fide expenditures directly related to the promotion

of products or services or the execution or performance

of a contract, see 15 U.S.C. 78dd-1(c). Those amend-

ments, the court reasoned, “illustrate[d] an intention by

Congress to identify very limited exceptions to the kinds

of bribes to which the FCPA does not apply.” Pet. App.

77a. In addition, the court noted that, in rejecting a pro-

posed amendment to the language of the business nexus

element, the Conference Committee stated that the stat-

ute was “not limited to the renewal of contracts or other

business, but also include[{d] a prohibition against cor-

rupt payments related to the execution or performance

of contracts or the carrying out of existing business,

such as a payment to a foreign official for the purpose

of obtaining more favorable tax treatment.” Id. at T9a

(quoting H.R. Conf. Rep. No. 576, 100th Cong., 2d Sess.

918 (1988)).

4. On remand, the grand jury returned a second su-

perseding indictment. With respect to the 12 counts

charging both petitioners with violating the FCPA, the

indictment added allegations that petitioners “believed

that if American Rice Inc. and Rice Corporation of Haiti

were required to pay the full amount of duties and taxes

that should have been paid on the imported rice they

would not have been able to sell the rice at a competitive

price, would have lost sales to competitors, and would

not have realized an operating profit, thus putting at

risk American Rice Inc.’s and Rice Corporation of

Haiti’s business operations in Haiti.” C.A. R.E. Tab 3,

at 3. The indictment also added a count charging both

petitioners with conspiring to violate the FCPA and a

count charging petitioner Murphy with obstructing jus-

tice by making false statements in his testimony in the

SEC proceeding. Jd. at 7-14.

After a trial, a jury found both petitioners guilty on

all counts. More than five months later, petitioners

moved to dismiss the FCPA counts, arguing, for the first

time, that the indictment failed to allege that petitioners

acted “willfully.” The district court denied the motion,

C.A. R.E. Tab 11, and proceeded to impose sentence,

Pet. App. 131a-148a, 149a-165a.

5. The court of appeals affirmed. Pet. App. la-52a.

The court rejected petitioners’ claim that the FCPA

failed to give fair notice that their conduct was illegal.

Id. at 5a-18a. The court held that the business nexus

element of the statute was not vague, explaining that

“{ilmprecise general language in one of seven require-

ments for a bribery conviction under the FCPA does not

draw a line so vague that [petitioners] were not reason-

ably aware of their potential for engaging in illegal ac-

tivity under the FCPA when they made payments to

Haitian officials to reduce tax and duty burdens through

misrepresentations.” Jd. at 7a-8a. And the court con-

cluded that the FCPA was not sufficiently ambiguous to

merit application of the rule of lenity. Jd. at 15a-18a. It

observed that the rule of lenity “only applies in situa-

tions of ambiguity more extreme than here, where, ‘after

seizing everything from which aid can be derived, [a

court] can make no more than a guess as to what Con-

gress intended.’” /d. at 15a-16a (brackets in original)

(quoting Reno v. Koray, 515 U.S. 50, 65 (1995)). In the

case of the FCPA, the court concluded, the legislative

history resolved any textual ambiguity because it

“showled] that Congress meant to prohibit a range of

payments wider than those that directly influence the

acquisition or retention of government contracts or simi-

lar commercial or industrial arrangements.” /d. at 17a-

18a (internal quotation marks omitted).

The court of appeals also held that the indictment

sufficientiy alleged the “willfully” element of a criminal

FCPA violation. Pet. App. 29a-3la. The court noted

that the indictment “omitted the term ‘willful,’” but con-

cluded that “this omission was harmless error at most,

as the language of the indictment described the exact

type of conduct required for a finding of willfulness.”

Id. at 30a. The court observed that “criminal willfulness

requires only that criminal defendants have knowledge

that they are acting unlawfully or ‘knowledge of the

facts that constitute the offense,’ depending on the defi-

nition followed.” Jbid. (quoting Bryan v. United States,

524 U.S. 184, 193 (1998)). Referring to its earlier discus-

sion of the jury instructions—which, the court of appeals

had held, properly required the jury to find willfulness

in the sense that “a defendant knew that he was doing

something generally ‘unlawful’ at the time of his action,

id. at 27a—the court concluded that the “corruptly” lan-

guage in the indictment “sufficiently charge[d] an inten-

tional act.” /d. at 30a (internal quotation marks omit-

ted). The court also noted that other language in the

indictment “sufficiently alleged the element of willful-

ness by using language that directly asserted [petition-

er’s] knowing commission of acts that are unlawful gen-

erally and unlawful under the FCPA.” /d. at 31a.

ARGUMENT

Petitioners contend (Pet. 11-17) that the failure of

the indictment to include an element of the offense can

never be harmless error. Although that issue has di-

vided the courts of appeals and warrants this Court’s

review in an appropriate case, this case does not prop-

erly present that issue because petitioners failed to chal-

lenge the indictment until after they were found guilty

at trial. Petitioners also argue (Pet. 17-30) that the rule

of lenity precludes the application of the FCPA to their

conduct. The court of appeals correctly stated the rule

of lenity and determined that its application in this case

was unwarranted. The court’s interpretation of the

FCPA does not conflict with any decision of this Court

or any other court of appeals. Further review is not

warranted.

1. Petitioners suggest (Pet. 11-17) that this Court

should grant review to decide whether the omission of

an element of an offense from an indictment can consti-

tute harmless error. As petitioners note (Pet. 11-12),

this Court recently granted review to decide that ques-

tion, it it ultimately resolved the case by finding that

the indictment contained all of the elements of the of-

fense and thus presented no harmiless-error issue. See

United States v. Resendez-Ponce, 549 U.S. 102 (2007).

The pre-Resendez-Ponce split continues to exist. The

majority of the courts of appeals have held that such an

omission (or the omission of a sentence-enhancing fact)

is subject to harmless-error analysis. See United States

v. Allen, 406 F.3d 940, 943-945 (8th Cir. 2005) (en banc),

cert. denied, 127 S. Ct. 826 (2006); United States v. Rob-

inson, 367 F.3d 278, 285-286 (5th Cir.), cert. denied, 543

U.S. 1005 (2004); United States v. Higgs, 353 F.3d 281,

304-307 (4th Cir. 2003); United States v. Trennell, 290

F.3d 881, 889-890 (7th Cir.), cert. denied, 537 U.S. 1014

(2002); United States v. Cor-Bon Custom Bullet Co., 287

F.3d 576, 580-581 (6th Cir.), cert. denied, 537 U.S. 880

(2002); United States v. Prentiss, 256 F.3d 971, 981-985

(10th Cir. 2001) (en banc); United States v. Corporan-

Cuevas, 244 F.3d 199, 202 (1st Cir.), cert. denied, 534

U.S. 880 (2001). The Third and Ninth Circuits, on the

other hand, have held that sch omissions constitute

structural error and require reversal. See United States

v. Spinner, 180 F.3d 514, 515-516 (3d Cir. 1999); United

States v. Du Bo, 186 F.3d 1177, 1179-1181 (9th Cir.

1999).

Contrary to petitioners’ contention (Pet. 12-13), how-

ever, this case is not a suitable, much less an “ideal,”

vehicle for resolving the question. Petitioners argue

(Pet. 12) that the FCPA counts of the indictment were

deficient because they failed to allege that petitioners

acted “willfully.” But unlike the defendant in Resendiz-

Ponce, see U.S. Br. at 3, Resendiz-Ponce, supra (No. v5-

998), petitioners did not challenge the sufficiency of the

indictment until several months after the jury returned

its verdicts. The consequence of petitioners’ failure to

raise ther challenge before trial is that the indictment

must be read liberally in favor of its sufficiency, and,

under that standard, the indictment is sufficient to with-

stand petitioners’ challenge. Thus, this case, like Resen-

dez-Ponce, is not an appropriate vehicle for resolution of

the harmless-error issue.

The courts of appeals agree that “[tJhe scrutiny given

to an indictment depends, in part, on the timing of a de-

fendant’s objection to that indictment,” and an indict-

ment challenged after the completion of the govern-

ment’s case should be construed “in a liberal manner” in

favor of sufficiency. United States v. Sabbeth, 262 F.3d

207, 218 (2d Cir. 2001). Thus, “[wlhere a defendant first

challenges ‘the absence of an element of the offense’

after a jury verdict,” the indictment is “sufficient unless

it is so defective that by any reasonabie construction, it

fails to charge the offense for which the defendant is

convicted.” United States v. Avery, 295 F.3d 1158, 1174

(10th Cir.), cert. denied, 537 U.S. 1024 (2002). See

United States v. Gibson, 409 F.3d 325, 331 (6th Cir.

2005); United States v. White, 241 F.3d 1015, 1021 (8th

Cir. 2001); United States v. Childress, 58 F.3d 693, 720

(D.C. Cir. 1995), cert. denied, 516 U.S. 1098 (1996);

United States v. Vogt, 910 F.2d 1184, 1201 (4th Cir.

1990), cert. denied, 498 U.S. 1083 (1991); United States

v. Watkins, 709 F.2d 475, 478 (7th Cir. 1983); United

States v. Previte, 648 F.2d 73, 80 (1st Cir. 1981).

The decision below is fully consistent with that set-

tled rule. As the court of appeals explained, the omis-

sion of the term “willfully” in the FCPA counts of the

indictment was “harmless error at most, as the language

of the indictment described the exact type of conduct

required for a finding of willfulness.” Pet. App. 30a.

The court observed that although the indictment did not -

use the word “willfully,” its factual allegations described

quintessentially dishonest conduct, 7.e., that petitioners

created false shipping documents and bribed Haitian

officials to accept them, thereby cheating the Haitian

government out of custonis duties and sales taxes. /d. at

30a-31a. That is not the type of conduct that an ordinary

person believes is lawful. Coupled with the indictment’s

additional allegation that petitioners acted “corruptly,”

the facts alleged in the indictment sufficiently charged

the willfulness element of an FCPA violation under the

liberal standard that applies to a post-trial challenge to

the sufficiency of an indictment.”

Contrary to petitioners’ contention (Pet. 12-13), the

result in this case would not have been different had the

case arisen in the Ninth Circuit. Although the Ninth

Circuit held in Du Bo that “failure to recite an essential

element of the charged offense is not a minor or techni-

cal flaw subject to harmless error analysis,” 186 F.3d at

1179, the court expressly noted that its holding was

“limited to cases where a defendant's challenge is time-

* Petitioners assert (Pet. 9-10, 14 n.3) that the court of appeals held

that the indictment sufficiently alleged willfulness only in the sense that

the defendants acted knowingly, not in the sense that the defendants

knew they were committing unlawful acts. But after explaining that

“the language of the indictment described the exact type of conduct

required for a finding of willfulness,” the court observed tiat, “[a]s we

discussed in detail in the context of jury instructions, criminal willful-

ness requires only that criminal defendants have knowledge that they

are acting unlawfully or ‘knowledge of the facts that constitute the

offense,’ depending on the definition followed.” Pet. App. 30a (citation

omitted). And the court had earlier concluded that the jury instructions

were sufficient because they captured both of those definitions of

willfulness. /d. at 22a-27a. Thus, the opinion indicates that the court

evaluated the sufficiency of the indictment under both definitions of

willfulness. /d. at 30a-3la.

ly,” id. at 1180 n.3. The court acknowledged that “[uJn-

timely challenges to the sufficiency of an indictment are

reviewed under a more liberal standard.” J[bid.; see

United States v. James, 980 F.2d 1314, 1317 (9th Cir.

1992) (“When the sufficiency of the indictment is chal-

lenged after trial, it is only required that ‘the necessary

facts appear in any form or by fair construction can be

found within the terms of the indictment.’”), cert. de-

nied, 510 U.S. 838 (1993); United States v. Coleman, 656

F.2d 509, 510 (9th Cir. 1981) (“[W]e believe the indict-

ment must be liberally construed because [the defen-

dant] failed to raise any objection to it until after trial.”).

Nor would the result have been different had this

case.arisen in the Third Circuit. Although that court has

stated that the “[fJailure of an indictment sufficiently to

state an offense is a fundamental defect . . . and it can

be raised at any time,” Spinner, 180 F.3d at 516 (brack-

ets in original) (quoting United States v. Wander, 601

F.2d 1251, 1259 (3d Cir. 1979)), it has also recognized

that “indictments which are tardily challenged are liber-

ally constructed in favor of validity,” Wander, 601 F.2d

at 1259 (quoting United States v. Pheaster, 544 F.2d 353,

361 (9th Cir. 1976), cert. denied, 429 U.S. 1099 (1977)).

See United States v. Vitillo, 490 F.3d 314, 324 (3d Cir.

2007).

Because the indictment sufficiently alleged the will-

fulness element of an FCPA violation under the liberal-

construction standard that governs a post-trial chal-

lenge to the sufficiency of an indictment, the question

whether the omission of an element of an offense from

an indictment can constitute harmless error is not pre-

sented in this case. Petitioners’ claim therefore does not

warrant this Court’s review.

2. Petitioners also argue (Pet. 17-34) that the court

of appeals erred in holding that the business nexus ele-

ment of the FCPA is not limited to bribes paid to foreign

officials to acquire or retain contracts but also reaches

bribes paid to secure reduced customs duties and taxes

when the resulting savings benefit the company’s exist-

ing business. The court below is the first court of ap-

peals to consider the interpretation of the business

nexus element, and petitioners do not suggest that its

decision conflicts with any decision of any other court or

appeals. Instead, petitioners object that the court of

appeals did not properly apply the rule of lenity. That

claim lacks merit. More to the point, in the absence of

any conflict in the construction of a particular statute,

the alleged misapplication of a properly stated principle

of statutory interpretation does not warrant this Court’s

review.

According to petitioners, the rule of lenity applies

because the business nexus element is ambiguous. Peti-

tioners are incorrect, because the plain language of the

business nexus element, when read in the context of the

entire statute, is not ambiguous. The business nexus

element requires that a bribe to a foreign official be

made “in order to assist [the company] in obtaining or

retaining business for or with * * * any person.” 15

U.S.C. 78dd-1(a)(1). The word “business” is ordinarily

understood to mean a “commercial or mercantile activity

customarily engaged in as a means of livelihood.” Web-

ster’s Third New International Dictionary of the E'ng-

lish Language 302 (1993). Thus, the statutory language

does not restrict the FCPA’s coverage to the award or

renewal of contracts, but more broadly reaches actions

that assist in obtaining or retaining business. Moreover,

the FCPA carves out an exception from its prohibition

for payments for “routine governmental action.” 15

U.S.C. 78dd-1(b); see also 15 U.S.C. 78dd-1(f)(3) (defin-

ing “routine governmental action”). That exception

would be superfluous if the statute were limited in the

manner that petitioners propose. Because the plain lan-

guage of the FCPA covers petitioners’ conduct, the rule

of lenity has no application here.

To the extent that the statutory text might be said to

be ambiguous (see Pet. App. 6a, 12a), any ambiguity can

be resolved by the evolution and legislative context of

the law. As this Court has made clear, the rule of lenity

applies only in “situations in which a reasonable doubt

persists about a statute’s intended scope even after re-

sort to ‘the language and structure, legislative history,

and motivating policies’ of the statute.” Moskal v.

United States, 498 U.S. 103, 108 (1990) (quoting Bifulco

v. United States, 447 U.S. 381, 387 (1980)); see United

States v. Granderson, 511 U.S. 39, 54 (1994); United

States v. R.L.C., 503 U.S. 291, 305-306 (1992) (plurality

opinion). And, as the court of appeals noted, the rule is

not triggered by the mere fact that the statutory lan-

guage may be “amenable to more than one reasonable

interpretation.” Pet. App. 12a, 67a; see Muscarello v.

United States, 524 U.S. 125, 138 (1998). Instead, it “is

reserved for cases where, [a]fter seiz{ing] every thing

from which aid can be derived, the Court is left with an

ambiguous statute.” Smith v. United States, 508 U.S.

223, 239 (1993) (brackets in original) (internal quotation

marks omitted).*

* Petitioners suggest (Pet. 31) that “the Court should use this case

to decide whether legislative history is ever a sufficient basis to con-

strue an otherwise ambiguous criminal statute expansively against a

defendant.” That issue is not properly presented in this case, because

petitioners did not raise it below on either appeal; the court of appeals

Petitioners are therefore incorrect when they assert

(Pet. 17-18) that “the question of how much statutory

ambiguity is required” to trigger application of the rule

of lenity is “plainly unsettled.” As petitioners note (Pet.

20-21), this Court stated in Ladner v. United States, 358

U.S. 169, 178 (1958), that the “policy of lenity means that

the Court will not interpret a federal criminal statute

{more harshly] * * * when such an interpretation can

be based on no more than a guess as to what Congress

intended.” Although petitioners postulate (Pet. 21) that

“that formulation plainly was not intended to be taken

literally,” this Court has repeatedly held, relying on

Ladner, that the rule of lenity applies only when there

is a “grievous ambiguity” in the statutory text, such

that, “after seizing everything from which aid can be

derived, . . . [the Court] can make no more than a

guess to what Congress intended.” Muscarello, 524 U.S.

at 138-139 (internal quotation marks omitted); see Hol-

loway v. United States, 526 U.S. 1, 12 n.14 (1999);

United States v. Wells, 519 U.S. 482, 499 (1997); Reno v.

Koray, 515 U.S. 50, 64-65 (1995).*

did not address it; and, as discussed, the text and structure of the sta-

tute alone preclude petitioners’ proposed interpretation.

* Contrary to petitioners’ contention (Pet. 25), the court of appeals

did not hold “that lenity applies only when all the available tools of

statutory construction leave the court entirely at sea regarding the

statute’s meaning.” Rather, the court simply observed that “[t}he rule

only applies in situations of ambiguity more extreme than here, where

‘after seizing everything from which aid can be derived, [a court] can

make no more than a guess as to what Congress intended.’” Pet. App.

15a-16a (second pair of brackets in original) (quoting Koray, 515 U.S.

at 65). Nor are petitioners correct when they assert that the court of

appeals “frankly acknowledged” that, “even after considering the legis-

lative history, ‘the business nexus standard is ambiguous.’” Pet. 31

(quoting Pet. App. 6a); see zd. at 8. In fact, the court held that the leg-

There is no merit to petitioners’ claim (Pet. 18-19, 26)

that the court of appeals’ decision is at odds with this

Court’s decisions in Crandon v. United States, 494 U.S.

152 (1990); Hughey v. United States, 495 U.S. 411

(1990); and Ratzlaf v. United States, 510 U.S. 135

(1994). Contrary to petitioners’ reading, none of those

cases held “that because the legislative history did not

establish that the Government’s interpretation was

clearly correct, lenity compelled reading the statute to

favor the defendant.” Pet. 26. Indeed, none of the de-

cisions directly turned on the application of the rule of

lenity. Rather, they held that legislative history cannot

enlarge the scope of a statute beyond its terms where

the plain language is not ambiguous. See Crandon, 494

U.S. at 160; Hughey, 495 U.S. at 422; Ratzlaf, 510 U.S.

at 147 n.17. Those decisions are not relevant here, be-

cause the court of appeals did not rely on legislative his-

tory to adopt a construction of the statute broader than

its plain language. Rather, the court relied on legisla-

tive history to support a construction that was “within

the fair meaning of the statutory language,” which the

court considered to be ambiguous.” R.L.C., 503 U.S. at

306 n.6; see Pet. App. 67a. And because the statutory

language itself was broad enough to support the mean-

ing demonstrated by the legislative history, petitioners

were not deprived of fair warning that their conduct was

unlawful. See zd. at lla.

Petitioners’ disagreement with the court of appeals’

reading of the legislative history does not warrant fur-

islative history of the FCPA clarified any ambiguity in the statutory

language. See Pet. App. 17a-18a, 75a.

* As noted above, the government does not consider the language to

be ambiguous, and no other court of appeals has examined the question.

ther review. See Pet. 27-31. Petitioners assert that “the

Government’s position receives merely weak support

from the legislative history,” Pet. 30, and that “[t]he

central sources of legislative history * * * are either

silent * * * or favor petitioners,” Pet. 30-31, but the

court of appeals held to the contrary after a thorough

review. Pet. App. 67a-90a; see id. at 4a (noting prior

decision’s “rigorous analysis of the FCPA and its legisla-

tive history”). Petitioners suggest (Pet. 34) that this

case provides an opportunity for the Court to resolve the

scope of the FCPA’s “obtaining or retaining business”

element, but that is not even a question expressly posed

by the petition (Pet. i), and the court of appeals’ inter-

pretation of the FCPA does not conflict with any deci-

sion of any other court of appeals. Instead, petitioners

have limited their question presented (Pet. i) to the ap-

plicability of the rule of lenity, and that abstract ques-

tion does not warrant review in this case.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.