USA v. Pacific Gas and Electric Company

MOTION to Dismiss for Failure to State an Offense: Count One

N.D. Cal.September 7, 2015

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH LATHAM & WATKINS LLP Steven M. Bauer (Bar No. 135067) steven.bauer@lw.com Margaret A. Tough (Bar No. 218056) margaret.tough@lw.com 505 Montgomery Street, Suite 2000 San Francisco, California 94111-6538 Telephone: +1.415.391.0600 Facsimile: +1.415.395.8095 LATHAM & WATKINS LLP Melissa Arbus Sherry (pro hac vice) melissa.sherry@lw.com 555 11th Street, NW, Suite 1000 Washington, DC 20004-1304 Telephone: +1.202.637.2200 Facsimile: +1.202.637.2201 CLARENCE, DYER & COHEN LLP Kate Dyer (Bar No. 171891) kdyer@clarencedyer.com 899 Ellis Street San Francisco, California 94109-7807 Telephone: +1.415.749.1800 Facsimile: +1.415.749.1694 Attorneys for Defendant PACIFIC GAS AND ELECTRIC COMPANY UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION UNITED STATES OF AMERICA v. PACIFIC GAS AND ELECTRIC COMPANY, Defendant. CASE NO. CR-14-00175-TEH DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Judge: Hon. Thelton Henderson Date: October 19, 2015 Time: 10:00 A.M. Place: Courtroom 2, 17th Floor Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page1 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH NOTICE OF MOTION AND MOTION PLEASE TAKE NOTICE that on October 19, 2015, at 10:00 a.m., Defendant Pacific Gas and Electric Company (“PG&E”) will and hereby does move this Court for an order dismissing Count One of the superseding indictment because (i) the National Transportation Safety Board’s investigation of the San Bruno accident is not a “pending proceeding . . . before any department or agency of the United States” convened for “the due and proper administration of the law” under 18 U.S.C. § 1505; and (ii) 18 U.S.C. § 1505 either does not reach the conduct alleged in the superseding indictment or is unconstitutionally vague as applied to that conduct. The Motion will be based on this Notice of Motion and Motion, the accompanying Memorandum of Points and Authorities, the Declaration of Nicole C. Valco, the files and records of this case, and such other argument and evidence as the Court may consider. Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page2 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO i DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH TABLE OF CONTENTS Page I. INTRODUCTION ........................................................................................................................ 1 II. SUMMARY ................................................................................................................................... 1 III. BACKGROUND ........................................................................................................................... 4 A. The National Transportation Safety Board ............................................................ 4 B. The NTSB Investigation of the Cause of the San Bruno Accident........................ 6 C. The Allegations of Count One ............................................................................... 7 IV. DISCUSSION ................................................................................................................................ 8 A. The Court Should Dismiss Count One Because an NTSB Investigation Is Not a “Proceeding” Within the Meaning of § 1505 ..................... 8 1. A Mere Agency Investigation Unconnected to any Adjudicative Proceeding Is Not a Proceeding to “Administer” the Law ................................................................................ 8 2. The NTSB San Bruno Accident Investigation Was Not a Proceeding Under § 1505 Because It Was Not Within the Scope of Any Adjudicative or Rulemaking Power .................................. 13 3. The Rule of Lenity and Fair Warning Considerations Preclude Any Expansion of the “Proceedings” Covered by § 1505....................................................................................................... 15 B. The Court Should Also Dismiss Count One Because § 1505 Either Does Not Reach the Conduct Alleged in the Superseding Indictment or Is Unconstitutionally Vague as Applied to That Conduct ................................................................................................................ 16 1. Governing Legal Principles ..................................................................... 16 2. Section 1505 Cannot Constitutionally Be Applied to the Conduct Alleged in the Superseding Indictment ..................................... 18 V. CONCLUSION ........................................................................................................................... 22 Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page3 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH ii TABLE OF AUTHORITIES Page(s) CASES Arthur Andersen LLP v. United States, 544 U.S. 696 (2005) .............................................................................................. 3, 15, 16, 19 Bailey v. United States, 516 U.S. 137 (1995) .............................................................................................................. 10 Barnhart v. Sigmon Coal Co., 34 U.S. 438 (2002) ................................................................................................................ 10 City of Chicago v. Morales, 527 U.S. 41 (1999) ................................................................................................................ 16 Connally v. Gen. Constr. Co., 269 U.S. 385 (1926) .............................................................................................................. 16 Kolender v. Lawson, 461 U.S. 352 (1983) ........................................................................................................ 16, 20 McBoyle v. United States, 283 U.S. 25 (1931) ................................................................................................................ 16 Nat’l R.R. Passenger Corp. v. Consol. Rail Corp., 698 F. Supp. 951 (D.D.C. 1988) ........................................................................................... 13 Pettibone v. United States, 148 U.S. 197 (1893) ................................................................................................................ 8 Ratzlaf v. United States, 510 U.S. 135 (1994) .............................................................................................................. 19 Rice v. United States, 356 F.2d 709 (8th Cir. 1996) ................................................................................................ 11 Skilling v. United States, 561 U.S. 358 (2010) .............................................................................................................. 16 United States v. Adams, 335 F. App’x 338 (4th Cir. 2009) ................................................................................... 10, 11 United States v. Aguilar, 515 U.S. 593 (1995) ....................................................................................................... passim United States v. Ballestas, No. 97 MAG. 0843, 1997 U.S. Dist. LEXIS 6405 (S.D.N.Y. May 9, 1997) ....................... 12 United States v. Batten, 226 F. Supp. 492 (D.D.C. 1964) ..................................................................................... 11, 12 Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page4 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH iii United States v. Bonds, 784 F.3d 582 (9th Cir. 2015) ............................................................................................ 4, 19 United States v. Brown, 688 F.2d 596 (9th Cir. 1982) .................................................................................................. 2 United States v. Browning, Inc., 572 F.2d 720 (10th Cir. 1978) .............................................................................................. 11 United States v. Cisneros, 169 F.3d 763 (D.C. Cir. 1999) .............................................................................................. 20 United States v. Edgemon, No. 3-95-cr-43, 1997 U.S. Dist. LEXIS 23820 (E.D. Tenn. Aug. 18, 1997) ................. 11, 12 United States v. Ermoian, 752 F.3d 1165 (9th Cir. 2013) ................................................................................................ 9 United States v. Fruchtman, 421 F.2d 1019 (6th Cir. 1970) .............................................................................................. 13 United States v. Higgins, 511 F. Supp. 453 (W.D. Ky. 1981) ................................................................................... 9, 10 United States v. Kanchanalak, 37 F. Supp. 2d 1 (D.D.C 1999) ....................................................................................... 17, 20 United States v. Kelley, 36 F.3d 1118 (D.C. Cir. 1994) .............................................................................................. 12 United States v. Kowalewski, No. 13-CR-045, 2014 U.S. Dist. LEXIS 165404 (N.D. Ga. Oct. 7, 2014) ........................... 20 United States v. MacPherson, 424 F.3d 183 (2d Cir. 2005).................................................................................................. 19 United States v. Markiewicz, No. 89-CR-88, 1989 U.S. Dist. LEXIS 13722 (N.D.N.Y. Nov. 17, 1989) .......................... 14 United States v. McDaniel, No. 12-CR-0028, 2013 U.S. Dist. LEXIS 110475 (N.D. Ga. Jan. 29, 2013) ....................... 11 United States v. Messer, No. 97-4504, 1998 U.S. App. LEXIS 5008 (4th Cir. 1998) ................................................. 20 United States v. Millis, 621 F.3d 914 (9th Cir. 2010) ................................................................................................ 15 United States v. North, 910 F.2d 843 (D.C. Cir. 1990) .................................................................................... 3, 15, 19 United States v. Ogle, 613 F.2d 233 (10th Cir. 1979) .............................................................................................. 17 Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page5 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH iv United States v. Poindexter, 951 F.2d 369 (D.C. Cir. 1991) ....................................................................................... passim United States v. Price, 951 F.2d 1028 (9th Cir. 1991) .............................................................................................. 13 United States v. Pugh, 404 F. App’x 21 (6th Cir. 2010) ........................................................................................... 12 United States v. Rainey, No. 2:12-cr-00291 (E.D. La.)................................................................................................ 21 United States v. Ramos, 537 F.3d 439 (5th Cir. 2008) .................................................................................................. 9 United States v. Reeves, 752 F.2d 995 (5th Cir. 1985) .......................................................................................... 15, 17 United States v. Safavian, 528 F.3d 957 (D.C. Cir. 2008) .............................................................................................. 21 United States v. Senffner, 280 F.3d 755 (7th Cir. 2002) ............................................................................................ 9, 12 United States v. Starks, 472 F.3d 466 (7th Cir. 2006) ................................................................................................ 20 United States v. Stickle, 355 F. Supp. 2d 1317 (S.D. Fla. 2004) ................................................................................. 13 United States v. Technic Servs., 314 F.3d 1031 (9th Cir. 2002) .............................................................................................. 13 United States v. Vixie, 532 F.2d 1277 (9th Cir. 1976) .............................................................................................. 13 United States v. Wright, 704 F. Supp. 613 (D. Md. 1989) ........................................................................................... 11 STATUTES 16 U.S.C. § 7212(a) .................................................................................................................... 15 18 U.S.C. § 1001 ..................................................................................................................... 2, 15 18 U.S.C. § 1001(a) ...................................................................................................................... 9 18 U.S.C. § 1503 ..................................................................................................................... 8, 15 18 U.S.C. § 1505 .................................................................................................................. passim 18 U.S.C. § 1512 ........................................................................................................................... 9 18 U.S.C. § 1515(a)(1)(C) ............................................................................................................ 9 Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page6 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH v 18 U.S.C. § 1515(b) ...................................................................................................................... 3 18 U.S.C. § 1519 ..................................................................................................................... 9, 15 18 U.S.C. § 1621 ..................................................................................................................... 2, 15 49 U.S.C. § 1111 ........................................................................................................................... 4 49 U.S.C. § 1113(a)(4) .................................................................................................................. 6 49 U.S.C. § 1154(b) ...................................................................................................................... 6 49 U.S.C. § 60102(a)(2) ................................................................................................................ 5 5 U.S.C. § 1113(4) ...................................................................................................................... 15 5 U.S.C. § 504 et seq..................................................................................................................... 5 OTHER AUTHORITIES 142 Cong. Rec. S11608 (1996) ................................................................................................... 21 142 Cong. Rec. S4857 (1996) ..................................................................................................... 21 142 Cong. Rec. S4858, S11605-09 (1996) ................................................................................. 17 AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE (5th ed. 2015) (https://www.ahdictionary.com/word/search.html?q=improper&submit.x=46 &submit.y=26) (accessed September 2, 2015) ..................................................................... 19 BLACK’S LAW DICTIONARY 1841 (10th ed. 2014) ........................................................................ 9 DICTIONARY.COM UNABRIDGED, Random House, Inc. 2015 (http://dictionary.reference.com/browse/improper?s=t) (accessed September 2, 2015) ..................................................................................................................................... 20 http://www.ntsb.gov/investigations/process/Pages/default.aspx .................................................. 4 http://www.washingtonpost.com/archive/local/1988/05/26/ex-engineer-pleads- guilty-to-us-charge-in-amtrak-crash/3a8498af-620f-41f9-b662-dc9c8a156224/ ................. 14 MERRIAM-WEBSTER.COM (http://www.merriam- webster.com/dictionary/improper) (accessed September 2, 2015) ....................................... 20 MERRIAM-WEBSTER.COM (http://www.merriam- webster.com/dictionary/administer) (accessed September 2, 2015) ....................................... 8 OED ONLINE. June 15. Oxford University Press (http://www.oed.com/view/Entry/2531?rskey=v2e09a&result=2&isAdvanced =false) (accessed September 2, 2015) ..................................................................................... 8 Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page7 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH vi REGULATIONS 49 C.F.R. § 800.2 .......................................................................................................................... 4 49 C.F.R. § 800.2(i) ...................................................................................................................... 5 49 C.F.R. § 800.3 .......................................................................................................................... 5 49 C.F.R. § 801.32 ........................................................................................................................ 5 49 C.F.R. § 831.11 ........................................................................................................................ 6 49 C.F.R. § 831.12 ...................................................................................................................... 14 49 C.F.R. § 831.4 .......................................................................................................................... 5 49 C.F.R. § 831.9 .......................................................................................................................... 6 49 C.F.R. § 835.3 .......................................................................................................................... 6 49 C.F.R. § 845.2 .......................................................................................................................... 5 49 C.F.R. § 845.40 ........................................................................................................................ 5 49 C.F.R. § 845.41 ........................................................................................................................ 6 Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page8 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO 1 DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION We have previously noted that Count One fails to allege materiality, which is an essential element of the crime of obstruction. The Court has instructed that we save that challenge for trial. But Count One is defective for other reasons that are plain on the face of the superseding indictment and ripe for adjudicating now. The first problem stems from the observation that this is the first reported § 1505 prosecution in the history of the National Transportation Safety Board (“NTSB”). To be sure, there could be false statement cases, document destruction cases, and perjury cases in connection with NTSB investigations. These all, however, are governed by more specific statutes that do not, as § 1505 does, require intentional obstruction of a “proceeding” “before” an agency that is convened to “administer” the law. Is this novel § 1505 charge appropriate under the law? The answer lies in the fact that an NTSB investigation, by its nature (and statutory authority), is not a proceeding pursuant to any adjudicatory power to which § 1505 applies. That is, an NTSB investigation is not a proceeding administering the law to determine the rights and obligations of parties or violations of the law. It is a pure investigation with no adverse parties, charged with reporting on facts relating to accidents, determining the probable causes of such accidents, and issuing recommendations to government and private parties that may tend to prevent future accidents. Other criminal statutes may apply to conduct in the course of an NTSB investigation, but the § 1505 charge here does not. Furthermore, § 1505 cannot be applied to the conduct charged in the indictment in a way that is consistent with Due Process. If the Court narrowly construes the word “corruptly” to avoid unconstitutional vagueness, then the indictment must be dismissed because it does not charge a crime. But if the Court declines to adopt an appropriate narrowing construction, Count One must be dismissed as unconstitutionally vague as applied to the conduct alleged here. II. SUMMARY A wide variety of laws criminalize providing false statements to government officials, or failing to cooperate with them in the performance of their official duties. For example, there are Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page9 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 2 laws that criminalize knowingly and willfully making materially false statements or concealing or falsifying material facts in any matter within the jurisdiction of federal government (18 U.S.C. § 1001), or knowingly making false material statements under oath (18 U.S.C. § 1621). Many of those laws apply in the context of NTSB accident investigations, and ensure that the NTSB has the tools it needs to protect the integrity of its investigations. The government has not charged the defendant under these statutes because it has not alleged that the defendant intentionally made any false statements to the NTSB or refused to respond to any subpoena. Obstruction of justice is a very different, very specific, and much more serious crime historically tied to interference with the “administration of justice,” a phrase that traditionally encompasses only formal pending judicial proceedings. It has never been obstruction of justice to “utter[] false statements to an investigating agent,” United States v. Aguilar, 515 U.S. 593, 600 (1995), for example, or to “interfere[] with the execution of a search warrant in connection with a police investigation,” United States v. Brown, 688 F.2d 596, 598 (9th Cir. 1982). In Aguilar, the Supreme Court held that the defendant—a federal judge accused of corruption—was entitled to acquittal as a matter of law, even though he intentionally lied to Federal Bureau of Investigation (“FBI”) investigators and even though he knew that a grand jury had already been convened, because he did not know that those particular FBI agents would testify before the grand jury. 515 U.S. at 600. 18 U.S.C. § 1505 was designed to extend traditional obstruction principles to the federal agency context. See United States v. Poindexter, 951 F.2d 369, 380 (D.C. Cir. 1991) (explaining the history). But the statute’s structure makes clear that it was intended to preserve the traditional distinction between mere investigations and adjudicatory or quasi-adjudicatory proceedings. Hence the defendant must “corruptly” or through threats or force “influence[], obstruct[], or impede[] . . . the due and proper administration of the law under which any pending proceeding is being had before any department or agency of the United States.” 18 U.S.C. § 1505. That language recognizes that a great deal of what the employees of federal agencies do is not the “administration of the law” and is not undertaken in connection with a “pending proceeding” “before” the agency that was convened to administer the law. And the D.C. Circuit Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page10 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 3 has repeatedly recognized that the statute would be unconstitutionally vague and overbroad if it is read too broadly. A great many things that Americans do to “impede” or “influence” the activities and conclusions of federal agencies are widely understood to be lawful—even if undertaken for selfish reasons or other purposes that might be characterized as improper. As Judge Silberman pointed out in United States v. North, if § 1505 is read too expansively “we might as well convert all of Washington’s office buildings into prisons.” 910 F.2d 843, 942 (D.C. Cir. 1990) (concurring); see also Poindexter, 951 F.2d at 377-78. Section 1505 is confined to lawful bounds by two requirements, neither of which is sufficiently alleged by the superseding indictment. First, there must be a “pending proceeding . . . before an agency” under which the law is being “administ[ered].” That means an agency proceeding that will determine the rights and obligations of parties or violations of the law. A mere investigation, unconnected with a proceeding that will actually administer the law, has never been sufficient for obstruction. There certainly is no indication that in § 1505 Congress meant to turn interference with agency investigators into “obstruction of justice” when interference with FBI investigators is not. An accident investigation conducted by the NTSB is not an adjudicatory proceeding and it does not “administer” the law. Indeed, those investigations are much further removed from the administration of justice than police and FBI investigations—which are at least a prelude to criminal charges and a judicial proceeding. Second, the defendant must act “corruptly,” which is defined as having an “improper purpose.” 18 U.S.C. § 1515(b). But the superseding indictment alleges only that the defendant did not disclose two pieces of information to the NTSB: (1) that its integrity management group followed the practices in an unapproved version of an internal instruction document and (2) that it knew the unapproved version violated a federal regulation. The indictment does not allege that the defendant violated any legal duty by failing to provide the information, or even that the NTSB requested it. Other than the allegation that the defendant acted “corruptly,” there is no indication that the grand jury concluded that any of the purportedly “obstructive” conduct was wrongful, or in violation of any duty. As the Supreme Court explained when rejecting another flawed prosecution under the obstruction laws in Arthur Andersen LLP v. United States, Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page11 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 4 withholding “testimony or documents from a Government proceeding or Government official is not inherently malign” absent a duty to produce them. 544 U.S. 696, 703-04 (2005). The D.C. Circuit recognized in Poindexter that words like “corruptly” and “improper” are far too vague to put the public on notice that it has suddenly become a serious crime to answer only the questions asked, or to withhold documents that there is no legal duty to produce. 951 F.2d at 377-79. A reading that broad also “does not meaningfully cabin the kind of conduct that is subject to prosecution” and invites arbitrary selective enforcement. United States v. Bonds, 784 F.3d 582, 584 (9th Cir. 2015) (en banc) (Kozinski, J, concurring). Section 1505 could be constitutional only as applied to cases in which the defendant’s “improper purpose” involves an attempt to gain some advantage inconsistent with legal duty or the rights of others—which is the traditional meaning of the word “corruptly” in the criminal law. See Poindexter, 951 F.2d at 385-86 (holding that § 1505 is unconstitutionally vague outside a narrow “core” of application). If the statute is interpreted in that appropriate and narrow way, the superseding indictment fails to allege a crime. If the statute is read more broadly, it is impermissibly vague as applied here. Either way, the count must be dismissed. III. BACKGROUND A. The National Transportation Safety Board Count One concerns alleged obstruction of an accident investigation by the NTSB. The NTSB is an independent establishment of the United States. 49 U.S.C. § 1111; 49 C.F.R. § 800.2. It is neither a part of the Department of Transportation (“DOT”), nor affiliated with any of its modal agencies.1 Thus, the NTSB has no power or responsibility to develop, implement, or enforce the regulations promulgated by the DOT or its subagencies.2 Cf. 49 U.S.C. 1 http://www.ntsb.gov/investigations/process/Pages/default.aspx. 2 The government has conceded as much, stating: “With regard to the NTSB’s interpretations of regulations, because the NTSB is not a regulator, the NTSB does not issue guidance or interpretations of safety and performance regulations.” Valco Decl. Ex. 16. The NTSB’s Deputy General Counsel made a similar statement in a declaration provided to the defendant in the course of this prosecution: “The NTSB does not issue regulations that set safety or vehicle performance standards for the transportation industry.” Valco Decl. Ex. 17 ¶ 3. Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page12 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 5 § 60102(a)(2) (“The Secretary [of Transportation] shall prescribe minimum safety standards for pipeline transportation and for pipeline facilities.”). The primary function of the NTSB is to promote safety in transportation by gathering information and making reports and recommendations. 49 C.F.R. § 800.3. The NTSB’s Office of Pipeline and Hazardous Materials Safety is tasked with the following responsibilities: (a) conducting investigations of significant pipeline and hazardous materials accidents; (b) preparing reports setting forth the facts and circumstances of such accidents, including a recommendation as to the probable cause(s); (c) determining the probable cause of accidents when delegated authority to do so; (d) initiating safety recommendations to prevent future accidents, including to Federal, State, and local agencies and private organizations; and (e) conducting special investigations into selected accidents involving safety issues of concern to the NTSB. 49 C.F.R. §§ 800.2(i), 800.3. NTSB accident investigations aim to respond as quickly as possible to the scene of an accident.3 Accident investigations are conducted to determine the facts, conditions, and circumstances relating to an accident and its probable cause(s). 49 C.F.R. § 831.4. “These results are then used to ascertain measures that would best tend to prevent similar accidents or incidents in the future,” which the NTSB terms safety recommendations. Id. Accident investigations are “fact-finding proceedings with no formal issues and no adverse parties.” Id. “They are not subject to the provisions of the Administrative Procedure Act (5 U.S.C. § 504 et seq.), and are not conducted for the purpose of determining the rights or liabilities of any person.” Id. (emphasis added). The same is true of any transportation accident hearings convened by the NTSB. 49 C.F.R. § 845.2. Often, safety recommendations are issued before an investigation is complete, immediately after a deficiency is discovered.4 The investigation results in a narrative report or “brief” of the accident, reporting the facts, conditions, and circumstances, and the NTSB’s determination of the probable causes of the accident. 49 C.F.R. §§ 800.3, 801.32, 831.4, 845.40; Superseding Indictment (“SI”) ¶ 53. A 3 Supra n.1. 4 Supra n.1. Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page13 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 6 party may file a petition for reconsideration or modification of the NTSB’s findings and determination of probable cause with the NTSB, only if based upon the discovery of new evidence or a showing that the findings are erroneous. 49 C.F.R. § 845.41. The regulations provide no other means of appealing any findings in the report. To ensure that NTSB investigations focus only on improving transportation safety, its analysis of factual information and determinations of probable cause cannot be entered into evidence in a court of law.5 Its accident reports are not admissible in any suit for damages arising from the accident, reflecting Congress’s “strong desire to keep the Board free of the entanglement of such suits” and to ensure that it does not exert an undue influence on litigation. 49 C.F.R. § 835.3; see also 49 U.S.C. § 1154(b).6 There are specific rules governing an NTSB accident investigation. These investigations must employ a party system. The investigator-in-charge of any accident investigation designates party-participants. 49 C.F.R. § 831.11. The party system is a way for the NTSB to leverage resources to enhance its investigative abilities with persons that can provide necessary information to the investigation.7 Party-participants shall be responsive to the direction of the NTSB, and “may lose party status if they do not comply with their assigned duties and activity proscriptions or instructions, or if they conduct themselves in a manner prejudicial to the investigation.” Id. If an individual or entity does not participate in the investigation or cooperate with the investigators, the NTSB may issue a subpoena to obtain testimony or evidence. 49 C.F.R. § 831.9. If a person disobeys a subpoena, order, or inspection notice, the NTSB may bring a civil action to enforce it. 49 U.S.C. § 1113(a)(4). B. The NTSB Investigation of the Cause of the San Bruno Accident The NTSB began an investigation of the cause of the San Bruno rupture immediately after it occurred on September 9, 2010. SI ¶ 54. On January 3, 2011, it issued three safety 5 Supra n.1. 6 The statutory mandate that “[n]o part of a report of the Board, related to an accident or investigation of an accident, may be admitted into evidence or used in a civil action for damages” (49 U.S.C. § 1154(b)) raises the question of whether the indictment’s references to the NTSB finding are appropriate. 7 Supra n.1. Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page14 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 7 recommendations. SI ¶ 55. The NTSB sent approximately 550 “data request” questions to the defendant (a party to the investigation) over the course of the investigation. Valco Decl. ¶ 26. On August 30, 2011, it issued an accident report. SI ¶ 54. C. The Allegations of Count One The superseding indictment charges that PG&E “did corruptly influence, obstruct, and impede, and did endeavor to influence, obstruct, and impede the due and proper administration of the law under . . . an investigation by the National Transportation Security [sic] Board into the cause of the San Bruno explosion and PG&E’s Integrity Management program.” SI ¶ 61. It alleges that, “as part of its response to the NTSB’s data requests,” PG&E sent the NTSB a version of an internal instruction document on February 22, 2011, which it withdrew by letter on April 6, 2011, “claiming it was an unapproved draft.” SI ¶¶ 57, 59. The letter attached the original version of the document approved in 2008, and a version approved in April 2011. SI ¶ 59. The letter stated that the defendant “had recently discovered that” the version it submitted to the NTSB included the cover sheet for the original version approved in 2008, but that it “had no indication that the version [submitted in February 2011] was ever approved.” SI ¶ 59. The indictment alleges that the letter “did not disclose” that the defendant’s integrity management group followed the practice set forth in the draft version, or that it knew that the withdrawn version was in violation of a federal regulation and guidance issued by the federal regulator. SI ¶ 60. But the indictment does not allege that the NTSB had requested the information that the defendant “did not disclose” or that the defendant was otherwise obliged to provide it. It does not allege that any statements in the defendant’s letter were false or misleading. It does not allege that the defendant acted intentionally or with the purpose of obstructing the investigation, or that its alleged nondisclosure would naturally have that result. Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page15 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 8 IV. DISCUSSION A. The Court Should Dismiss Count One Because an NTSB Investigation Is Not a “Proceeding” Within the Meaning of § 1505 1. A Mere Agency Investigation Unconnected to any Adjudicative Proceeding Is Not a Proceeding to “Administer” the Law Section 1505 is a companion to the traditional obstruction statute, 18 U.S.C. § 1503, which (inter alia) establishes penalties for anyone who “corruptly or by threats of force . . . influences, obstructs, or impedes . . . the due administration of justice.” The Supreme Court held as early as Pettibone v. United States, 148 U.S. 197, 207 (1893), that “obstruction can only arise when justice is being administered.” “[I]f the defendant lacks knowledge that his actions are likely to affect the judicial proceeding, he lacks the requisite intent to obstruct.” Aguilar, 515 U.S. at 599. Under those principles, for example, it has long been settled law that intentional interference with a police investigation is not obstruction. Judge Aguilar’s acquittal by the Supreme Court is but one dramatic example. When Congress enacted § 1505 it imported the same traditional language and limitations, modified only slightly to fit the agency context. Section 1505 punishes anyone who “corruptly, or by threats of force . . . influences, obstructs, or impedes … the due and proper administration of the law under which any pending proceeding is being had before any department or agency of the United States.” 18 U.S.C. § 1505. Merriam-Webster’s Dictionary defines “administer” as “to provide or apply (something, such as justice) : to put (something) into effect.” MERRIAM- WEBSTER.COM.8 The Oxford English Dictionary defines it as “to perform or execute.” OED ONLINE, June 15, Oxford University Press.9 A mere investigation can only expose—it does not apply, effectuate, or execute law. A proceeding administering the law therefore is a proceeding that applies law to fact and determines legal rights and obligations—the agency equivalent of the judicial and quasi-judicial proceedings covered by § 1503. See, e.g., BLACK’S LAW DICTIONARY 8 http://www.merriam-webster.com/dictionary/administer (accessed September 2, 2015). 9 http://www.oed.com/view/Entry/2531?rskey=v2e09a&result=2&isAdvanced=false (accessed September 2, 2015). Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page16 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 9 1841 (10th ed. 2014) (defining “administrative proceeding” as “[a] hearing, inquiry, investigation, or trial before an administrative agency, usu. adjudicatory in nature but sometimes quasi-legislative”); United States v. Higgins, 511 F. Supp. 453, 455 (W.D. Ky. 1981) (explaining that the FTC, unlike the FBI, “is an agency which by law possesses both investigative and adjudicative functions” and “[i]ts mission is to regulate conduct in the economic marketplace, not merely to investigate such conduct”); see also United States v. Senffner, 280 F.3d 755, 761 (7th Cir. 2002) (observing that the purpose of the SEC’s investigation of securities law violations “was not solely to investigate those violations for the sake of exposing them, but also to identify and recover [] funds involved in the violations to remedy them”). The phrase “before any department or agency of the United States” further confirms that § 1505 is limited to adjudicative agency proceedings, not mere investigations. 18 U.S.C. § 1505 (emphasis added). “The use of the preposition ‘before’ suggests an appearance in front of the agency sitting as a tribunal.” United States v. Ermoian, 752 F.3d 1165, 1171 (9th Cir. 2013) (concluding that an FBI investigation was not an “official proceeding” under § 1512 because it was a mere criminal investigation).10 It implies “some formal convocation of the agency in which parties are directed to appear, instead of any informal investigation conducted by any member of the agency.” Id., quoting United States v. Ramos, 537 F.3d 439, 462-63 (5th Cir. 2008). Congress knows how to criminalize interference with any “matter within the jurisdiction” of a federal agency when it wants to. See 18 U.S.C. §§ 1519, 1001(a).11 Two other features of the statute confirm that §1505 does not embrace mere agency investigations. First, § 1505 separately makes it a crime to “falsif[y] any documentary material, answers to written interrogatories, or oral testimony” “with intent to avoid, evade, prevent or obstruct compliance . . . with any civil investigative demand . . . under the Antitrust Civil Process 10 In Ermoian, the court was construing the meaning of “official proceeding” in 18 U.S.C. § 1512. We recognize that “official proceeding” does not necessarily have the same meaning as “proceeding,” but the court’s discussion of the significance of the preposition “before” was in the context of 18 U.S.C. § 1515(a)(1)(C), which defines “official proceeding” as “a proceeding before a Federal Government agency which is authorized by law.” 11 These statutes, while not limited to a “proceeding” to “administer” justice, are far narrower and less vague than § 1505. Section 1519 is confined to deliberate document destruction and § 1001 to knowing and willful false statements or writings. Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page17 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 10 Act.” 18 U.S.C. § 1505. That provision would be entirely superfluous if an agency investigation was itself a “pending proceeding” “administ[ering]” the law. See Bailey v. United States, 516 U.S. 137, 143 (1995) (“Judges should hesitate . . . to treat [as surplusage] statutory terms in any setting, and resistance should be heightened when the words describe an element of a criminal offense.”) (internal citation and quotations omitted). Second, § 1505 specifically criminalizes obstruction of Congress—“the due and proper exercise of the power of inquiry under which any inquiry or investigation is being had by . . . Congress.” 18 U.S.C. § 1505. That provision shows that Congress understood the difference between proceedings that administer the law, and mere “inquiry or investigation.” Interference with purely investigative activities by Congress is covered, but such language is conspicuously absent in the agency section. See Barnhart v. Sigmon Coal Co., 534 U.S. 438, 452 (2002) (“[W]hen Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.”) (internal citation and quotations omitted). Against that backdrop, numerous courts have recognized that mere agency investigations are not covered by § 1505, absent a proceeding involving adjudicative or (perhaps) rulemaking power.12 The leading case is Higgins, which held in 1981 that an investigation by the FBI was not an agency “proceeding” within the meaning of § 1505 because the FBI has no power to engage in rulemaking or adjudication, and dismissed the § 1505 count before trial. 511 F. Supp. at 454-56.13 The court held that “the meaning of ‘proceeding’ in § 1505 must be limited to actions of an agency which relate to some matter within the scope of the rulemaking or adjudicative power vested in the agency by law.” Id. at 455. It also observed that “each reported decision applying the statute has involved an agency with rulemaking or adjudicative authority in addition to investigative functions.” Id. (collecting cases); see also United States v. McDaniel, 12 Many of the decisions state in dicta that adjudicative or rulemaking proceedings are required, but to our knowledge the question of whether § 1505 would apply in a pure rulemaking context has never arisen. That issue has no significance for the present case. 13 See also United States v. Adams, 335 F. App’x 338, 342 (4th Cir. 2009) (stating the government conceded that a criminal investigation by the DEA and FBI is not a “pending proceeding” within the scope of § 1505 for purposes of the appeal). Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page18 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 11 No. 12-CR-0028, 2013 U.S. Dist. LEXIS 110475, at *1, *4-12 (N.D. Ga. Jan. 29, 2013) (granting motion to dismiss and holding that an FBI investigation is not a 1505 “proceeding” because the FBI lacks adjudicative, rulemaking, or civil enforcement powers). United States v. Wright built on Higgins and held that an investigation by a U.S. Attorney’s Office was not a “proceeding” under § 1505 because it too was an investigative agency with no rulemaking or adjudicative authority, and dismissed the count before trial. 704 F. Supp. 613, 614-15 (D. Md. 1989). The court explained that “[t]he ratio decidendi of Higgins is that the agency to which the false information is submitted must be one with rule-making or adjudicative authority, before a § 1505 offense can occur.” Id. at 615. Similarly, in United States v. Edgemon, the court concluded that an investigation by the Inspector General of the Tennessee Valley Authority was not a § 1505 “proceeding” because it was an investigative agency that lacked adjudicative powers, and granted a motion for acquittal. No. 3-95-cr-43, 1997 U.S. Dist. LEXIS 23820, at *11-13 (E.D. Tenn. Aug. 18, 1997) (explaining that in Higgins, “the court first addressed the definition of ‘proceeding’ in the context of an agency with solely investigative authority”). A number of cases have struggled with determining when § 1505 becomes applicable when the agency in question does have adjudicative authority. The leading case held that § 1505 applies to SEC investigations only when they are “directed by a formal order of the Commission, at which a designated officer takes testimony under oath.” United States v. Batten, 226 F. Supp. 492, 494 (D.D.C. 1964). Other decisions appear to suggest that any investigation conducted in anticipation of an agency exercising its adjudicative or rulemaking authority is covered. See, e.g., Rice v. United States, 356 F.2d 709, 712 (8th Cir. 1996) (“Congress clearly intended to punish any obstruction of the administrative process . . . at any stage of the proceedings, be it adjudicative or investigative.”); United States v. Browning, Inc., 572 F.2d 720, 723-24 (10th Cir. 1978) (concluding that Customs Service investigation to uncover false invoices was a “proceeding” that led to a criminal indictment); Wright, 704 F. Supp. at 615 (“As long as the agency has such power, it is immaterial that the obstruction occurred in the course of an investigation, rather than during an adjudicative or rule-making proceeding.”); United States v. Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page19 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 12 Ballestas, No. 97 MAG. 0843, 1997 U.S. Dist. LEXIS 6405, at *7-8 (S.D.N.Y. May 9, 1997) (“[A]n agency’s investigation of suspected criminal activity within an area of which the agency also has civil enforcement responsibility cannot realistically be viewed as entirely divorced from that enforcement task.”). We are aware of only a single case in which a court considered the issue and concluded that an investigative proceeding before an agency without related adjudicative or rulemaking power was a “pending proceeding” under § 1505. In United States v. Kelley, the D.C. Circuit concluded that a formal investigation by the Inspector General of USAID was a “proceeding” merely because he was “empowered to issue subpoenas and to compel sworn testimony.” 36 F.3d 1118, 1127 (D.C. Cir. 1994). With due respect to the D.C. Circuit, that opinion ignores the language, structure, and history of § 1505. The existence of subpoena power does not conjure into existence a “proceeding” “before” an agency in which the law is being “administered.” And as the Edgemon court explained when rejecting the D.C. Circuit’s reasoning, “[t]he court’s analysis of Batten in Kelley totally misses the mark.” 1997 U.S. Dist. LEXIS 23820, at *18. “The holding in Batten was not based on the unexercised authority of the SEC to issue subpoenas and to administer oaths. Rather, the activities of the SEC in Batten were found to constitute a pending proceeding because the SEC actually took procedural steps that demonstrated the existence of a proceeding that was pending before the obstruction occurred.” Id.; see also id. at *8-9, *17. In Batten, there was no question that an SEC investigation into potential violations of the law could be a “proceeding” under § 1505—the SEC plainly has adjudicative power, and the defendant conceded that § 1505 applied to a second formal proceeding following the first. 226 F. Supp. at 493. A number of decisions have subsequently cited Kelley in dicta for the proposition that a proceeding can be established either by adjudicatory or rulemaking authority, or by subpoena power. See Senffner, 280 F.3d at 761 (involving enforcement of securities laws by SEC); United States v. Pugh, 404 F. App’x 21, 26 (6th Cir. 2010) (involving FDA inspection to determine if facilities in compliance with law, which resulted in indictment). In each of these cases, however, the agency involved was indeed endowed with adjudicatory power. Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page20 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 13 The Ninth Circuit has not yet grappled with these issues.14 All of its decisions under § 1505 have involved investigations preliminary to the exercise of adjudicative power by the agency. See, e.g., United States v. Technic Servs., 314 F.3d 1031, 1044 (9th Cir. 2002) (EPA investigation “into possible violations of [environmental statutes], which could lead to a civil or criminal proceeding”); United States v. Price, 951 F.2d 1028, 1031 (9th Cir. 1991) (administrative investigation by IRS to recover taxes owed); United States v. Vixie, 532 F.2d 1277, 1278 (9th Cir. 1976) (same). This Court should follow the better reasoned decisions and hold that an investigation conducted by an agency that has no power to “administer” the law is not a proceeding under § 1505, just as the Supreme Court has explained that an investigation by the FBI is not the “due administration of justice” under § 1503. See, e.g., Aguilar, 515 U.S. at 600-01. 2. The NTSB San Bruno Accident Investigation Was Not a Proceeding Under § 1505 Because It Was Not Within the Scope of Any Adjudicative or Rulemaking Power Whether a particular government investigation comes within the limits of § 1505 is a question of law for the court. United States v. Fruchtman, 421 F.2d 1019, 1021 (6th Cir. 1970). And while no court has ever analyzed whether an NTSB investigation is a proceeding before an agency under § 1505,15 the foregoing discussion should make clear that, as a matter of law, an 14 In United States v. Stickle, the district court cited four cases regarding agency investigative activities as “proceedings,” and observed that “the Eleventh Circuit would likely follow this line of authority and hold that the term ‘pending proceeding’ includes investigations by agencies that have discretionary or adjudicative power, or that have the power to enhance their investigations through the issuance of subpoenas or warrants.” 355 F. Supp. 2d 1317, 1328 (S.D. Fla. 2004). Three of the cases it cites relate to proceedings before agencies with adjudicatory power. The fourth, cited as Bailey v. United States, 35 F.3d 1118, 1121 (9th Cir. 1994), does not exist, nor is there any similar Ninth Circuit case. The description appears to fit Kelley, and the citation is off from Kelley’s by one number, and thus appears to be a mistake referring to Kelley. In any event, the Stickle court’s prediction of what the Eleventh Circuit might hold is dicta because Stickle involved an investigation by the U.S. Department of Transportation and Coast Guard Office of Compliance within the scope of their adjudicative authority. Id. at 1325, 1329. 15 The NTSB investigates about 2,000 aviation accidents and incidents a year, and about 500 accidents in the other modes of transportation—rail, highway, marine and pipeline. http://www.ntsb.gov/investigations/process/Pages/default.aspx. We have found only one other indictment ever brought for obstruction of an NTSB accident investigation (presumably) under § 1505 (among other charges), and that was 27 years ago. There, a railroad engineer was high on marijuana at the time the freight locomotives he was driving collided with a passenger train, resulting in 16 fatalities. See Nat’l R.R. Passenger Corp. v. Consol. Rail Corp., 698 F. Supp. 951, 953 (D.D.C. 1988). He was charged and promptly pleaded guilty to “conspiring to obstruct Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page21 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 14 NTSB accident investigation is not a “proceeding” under § 1505. The NTSB has no rulemaking or adjudicative power relating to the subject matter of its investigations. As an independent agency with no connection to the Department of Transportation, the NTSB does not promulgate, enforce, or “administer” federal rules governing the operation of gas pipelines. It does not adjudicate or determine the rights or liabilities of any pipeline operator. Its charge is to investigate and report on facts relating to accidents, determine the probable causes of such accidents, and issue recommendations to government and private parties that may tend to prevent future accidents. That is a noble and important purpose, but it does not involve the administration of the law—any more than FBI investigations involve the “administration of justice.” Indeed, NTSB investigations are much farther removed from the administration of the law than the ordinary police investigations that have never been covered by obstruction law. NTSB investigations are not adversarial. The subject of the investigation is not the defendant or its employees—it is the probable cause of the accident and related safety issues. The NTSB’s findings and recommendations do not have the force of law, and may not be reviewed under the Administrative Procedure Act or by any other body. The reports, while important for promoting pipeline safety throughout the pipeline industry, do not lead to further agency action or enforcement. They cannot even be admitted in litigation relating to the accidents. Respecting the textual and historic limits of § 1505 will not harm the NTSB’s investigative functions, just as the limits on § 1503 prosecutions have not crippled the FBI. If a party to an NTSB investigation does not comply with the instructions or proscriptions, or acts in a manner prejudicial to the investigation, the NTSB may revoke its party status. 49 C.F.R. § 831.11(a)(2). If the NTSB issues a subpoena to an individual, organization, or government the federal investigation of the accident,” apparently without challenging the statutory basis for the obstruction count. See id.; see also http://www.washingtonpost.com/archive/local/ 1988/05/26/ex-engineer-pleads-guilty-to-us-charge-in-amtrak-crash/3a8498af-620f-41f9-b662- dc9c8a156224/. The dearth of § 1505 prosecutions regarding NTSB accident investigations is relevant to statutory interpretation. United States v. Markiewicz, No. 89-CR-88, 1989 U.S. Dist. LEXIS 13722, at *40 (N.D.N.Y. Nov. 17, 1989) (finding that evidence that no individuals have been prosecuted for obstructing a civil court proceeding under § 1505 was “probative of the administrative, here prosecutorial, interpretation [of] the statute”) (internal citation and quotations omitted). Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page22 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 15 entity for production of documents or testimony, those subpoenas can be enforced through the judicial process. See 49 U.S.C. § 1113(a)(4). Other statutes prohibit false testimony under oath (18 U.S.C. § 1621), obstruction through destruction or falsification of evidence (18 U.S.C. § 1519), and false statements (18 U.S.C. § 1001). The grand jury has not alleged any such conduct or charges here, but they are available as recourse in the proper circumstances. 3. The Rule of Lenity and Fair Warning Considerations Preclude Any Expansion of the “Proceedings” Covered by § 1505 In interpreting the broadly drafted obstruction statutes, the Supreme Court has repeatedly invoked the rule of lenity and fair warning concerns. “We have traditionally exercised restraint in assessing the reach of a federal criminal statute, both out of deference to the prerogatives of Congress . . . and out of concern that ‘a fair warning should be given to the world in language that the common world will understand, of what the law intends to do if a certain line is passed.’” Aguilar, 515 U.S. at 600 (citations omitted); see also Arthur Andersen, 544 U.S. at 703 (same). The context of a pending judicial or quasi-judicial proceeding supplies much of the mens rea and fair warning for the traditional crime of obstruction. See, e.g., North, 910 F.2d at 941 (Silberman, J., concurring) (“very few non-corrupt ways to or reasons for intentionally obstructing a judicial proceeding leap immediately to mind”) (citing United States v. Reeves, 752 F.2d 995, 999 (5th Cir. 1985)).16 Extending obstruction law beyond traditional adjudicative contexts poses a serious risk of “criminaliz[ing] some innocent behavior,” id., and should be hazarded only if Congress’s intent is plain. The rule of lenity therefore requires that any ambiguity concerning the meaning of “proceeding” must be resolved in the defendant’s favor. United States v. Millis, 621 F.3d 914, 916-17 (9th Cir. 2010) (“[T]he rule of lenity requires 16 In Reeves, the Fifth Circuit distinguished between obstruction statutes that protect grand juries and courts (such as 18 U.S.C. § 1503), where any obstruction is “per se unlawful and is tantamount to doing the act corruptly” (id. at 999), and those that protect broader processes such as administration of the tax laws, where an impeding action may be “bad” or “improper” in a general sense, but may not be “corrupt” in the sense of interfering with the fair collection of taxes (id. at 999-1001). The court, in analyzing a similarly broad obstruction statute prohibiting interference with the administration of the IRS (16 U.S.C. § 7212(a)), noted that “merely prohibiting ‘bad,’ ‘evil’ and ‘improper’ purposes is very probably insufficient where, as here, a statute reaches such a broad category of circumstances.” Id at 999-1000 (emphasis added). Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page23 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 16 courts to limit the reach of criminal statutes to the clear import of their text and construe any ambiguity against the government.”) (citation and quotation marks omitted). B. The Court Should Also Dismiss Count One Because § 1505 Either Does Not Reach the Conduct Alleged in the Superseding Indictment or Is Unconstitutionally Vague as Applied to That Conduct There is a second reason Count One of the superseding indictment must be dismissed: it does not allege any conduct to which § 1505 may be applied, consistent with due process. If the Court adopts an appropriate narrowing construction of the word “corruptly,” requiring an intentional violation of a known legal duty, then the indictment should be dismissed because it does not charge a crime. Otherwise, it must be dismissed because the statute is unconstitutionally vague as applied to the conduct alleged here. 1. Governing Legal Principles The Due Process Clause forbids punishing a defendant for conduct that it could not reasonably foresee was a criminal act. It requires that “fair warning should be given to the world in language that the common world will understand, of what the law intends to do if a certain line is passed.” Arthur Andersen, 544 U.S. at 703 (quoting McBoyle v. United States, 283 U.S. 25, 27 (1931)). “[A] statute which either forbids or requires 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, violates the first essential of due process of law.” Connally v. Gen. Constr. Co., 269 U.S. 385, 391 (1926). Thus, a penal statute must define a criminal offense “‘(1) with sufficient definiteness that ordinary people can understand what conduct is prohibited[;] and (2) in a manner that does not encourage arbitrary and discriminatory enforcement.’” Skilling v. United States, 561 U.S. 358, 402-03 (2010) (quoting Kolender v. Lawson, 461 U.S. 352, 357 (1983)). A law is impermissibly vague if it fails to do either. City of Chicago v. Morales, 527 U.S. 41, 56 (1999). Section 1505 imposes criminal penalties on “[w]hoever corruptly . . . influences, obstructs, or impedes or endeavors to influence, obstruct, or impede the due and proper administration of the law . . . .” 18 U.S.C. § 1505 (emphasis added). The D.C. Circuit has already held that the mens rea term “corruptly” as used in § 1505 is unconstitutionally vague, Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page24 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 17 and that “in the absence of some narrowing gloss, people must ‘guess at its meaning and differ as to its application.’” Poindexter, 951 F.2d at 378. The D.C. Circuit also held that dictionary words like “‘depraved,’ ‘evil,’ ‘immoral,’ ‘wicked,’ and ‘improper’ are no more specific— indeed they may be less specific—than ‘corrupt.’” Id. at 378-79. “Vague terms do not suddenly become clear when they are defined by reference to other vague terms.” Id. at 378 (citations and internal quotations omitted). The D.C. Circuit held in Poindexter that § 1505 could be constitutionally applied only to a “core” set of behavior that includes “a person who, for the purpose of influencing an inquiry, influences another person (through bribery or otherwise) to violate a legal duty.” Id. at 385-86. That holding was consistent with what Justice Scalia has described as the traditional meaning of “corruptly” in the criminal law—“an act done with an intent to give some advantage inconsistent with official duty and the rights of others”—with the added requirement that the defendant’s conduct must “corrupt” someone else, rather than just be corrupt in itself. Aguilar, 515 U.S. at 616 (1995) (Scalia, J., dissenting) (quoting United States v. Ogle, 613 F.2d 233, 238 (10th Cir. 1979)); see also Reeves, 752 F.2d at 998-99 (same). Congress responded to the Poindexter decision by amending § 1515(b) in 1996 to define “corruptly” for purposes of § 1505 as acting “with an improper purpose, personally or by influencing another, including making a false or misleading statement, or withholding, concealing, altering, or destroying a document or other information.” 18 U.S.C. §1515(b) (emphasis added); see also 142 Cong. Rec. S4858, S11605-09 (1996). That language is certainly clearer than what came before, in one respect. It gives clear notice that “corruptly” does not require corruption of a second person, and that therefore the conduct with which Admiral Poindexter was charged—intentionally lying to Congress—can now be prosecuted under § 1505. Beyond that clarification, however, the amendment does not resolve the vagueness the D.C. Circuit found. Indeed, it purports to clarify the word “corruptly” with another word, “improper,” that the D.C. Circuit specifically held only made the vagueness problem worse. Cf. United States v. Kanchanalak, 37 F. Supp. 2d 1, 2-4 (D.D.C 1999) (suggesting that § 1515(b) may not alleviate all vagueness concerns raised in Poindexter but finding it constitutional as to the specific conduct in that case). A close look at the superseding indictment reveals that the Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page25 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 18 amendment to § 1515(b) did not fully cure the due process concerns the D.C. Circuit highlighted in Poindexter, as applied to the facts alleged in this indictment. 2. Section 1505 Cannot Constitutionally Be Applied to the Conduct Alleged in the Superseding Indictment As alleged in the superseding indictment, the corruption charge fails for one of two reasons. If the Court, consistent with Poindexter and traditional interpretations of the word “corruptly” in criminal law, narrowly interprets the “improper purpose” required by § 1515(b) to require an intentional violation of a known legal duty, then Count One must be dismissed because it does not charge a crime. On the other hand, if the Court construes the § 1515(b) definition of “corruptly” broadly enough cover to the alleged conduct, Count One must be dismissed as unconstitutionally vague. The superseding indictment appears to allege that the defendant obstructed the NTSB accident investigation by allegedly not disclosing two items: (1) that, from approximately 2009 to April 2011, its Integrity Management group followed the practices set forth in an unapproved version of an internal instruction document regarding manufacturing threats; and (2) that the defendant knew the unapproved version violated a federal regulation. SI ¶ 60. The indictment does not allege that the defendant was asked or legally compelled to provide such information, or even that it would have been responsive to any of “a series of data requests” from the NTSB concerning instances of “planned and unplanned pressure increases.” Id. ¶ 56. It does not allege that the defendant violated any legal duty by failing to volunteer the identified information. It does not even allege any discernable “improper purpose.” Other than the charge tracking the language of § 1505 (which includes the word “corruptly”), id. ¶ 61, there is no indication that the grand jury concluded that any of the conduct alleged in Count One of the indictment, id. ¶¶ 53- 60, was wrongful. These allegations are plainly outside of the “core” application of § 1505 to which the statute may constitutionally be applied under Poindexter and Congress’s clarifying amendment. “Core” applications of § 1505 are limited to situations in which a defendant either violated a legal duty or caused someone else to do so. Merely failing to volunteer information or Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page26 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 19 documents to a government proceeding is not a violation of any duty and is not even “improper.” As the Supreme Court has explained, withholding information or documents from the government “is not inherently malign.” Arthur Andersen, 544 U.S. at 703-04; see also, e.g., Ratzlaf v. United States, 510 U.S. 135, 144-46, 154 (1994) (holding that there is nothing “obviously ‘evil’” or “inherently ‘nefarious’” about withholding information from a government investigation), superseded by statute 31 U.S.C. §§ 5322, 5324, as recognized in United States v. MacPherson, 424 F.3d 183, 189 (2d Cir. 2005). A person may withhold information from the government for many legitimate reasons, for example if it was not requested, not relevant, if there was no duty to produce it, to avoid self-incrimination, to preserve attorney-client or a marital privilege, or, as in Andersen, to comply with a document retention policy. That is one of the reasons why our legal system is often described as “adversarial.” See Arthur Andersen, 544 U.S. at 703-04; Bonds, 784 F.3d at 584 (“Stretched to its limits, section 1503 poses a significant hazard for everyone involved in our system of justice, because so much of what the adversary process calls for could be construed as obstruction.”); North, 910 F.2d at 883 (per curiam) (vacating conviction under § 1505 and noting that “there are myriad ways of ‘impeding’ or ‘obstructing’ congressional investigations that are not in themselves corrupt”). As the D.C. Circuit recognized in Poindexter, the language of § 1505 is not sufficient to put persons of ordinary intelligence on notice that the legal universe has been turned upside down, and that withholding information from a government proceeding is a serious felony even in the absence of any legal duty to provide that information. Redefining “corruptly” as an “improper purpose” does not help, and indeed makes the problem worse. See Poindexter, 951 F.2d at 378-79. The plain meaning of “improper” extends to actions or conduct that are “incorrect,” “not suited to circumstances or needs,” “abnormal,” “not in accord with propriety, modesty, good manners, or good taste,” “inappropriate,” or “erroneous.” THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE (5th ed. 2015)17; MERRIAM- 17 https://www.ahdictionary.com/word/search.html?q=improper&submit.x=46&submit.y=26 (accessed September 2, 2015). Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page27 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 20 WEBSTER.COM18; DICTIONARY.COM UNABRIDGED, Random House, Inc. 2015.19 It potentially encompasses behavior that no reasonable person would understand to be criminal, and supplies no clear line to separate the lawful from the unlawful or to prevent arbitrary and selective enforcement. See Kolender, 461 U.S. at 357-58 (vague statutes improperly permit “a standardless sweep [that] allows policemen, prosecutors, and juries to pursue their personal predilections”) (internal quotations and citations omitted). Section 1505 is frequently and appropriately invoked to prosecute conduct falling within the “core” constitutional application of the statute identified by the D.C. Circuit. This includes lying to influence an adjudicative proceeding, forging or destroying documents, or withholding documents the defendant has a present legal duty (such as under a subpoena) to produce.20 All of those settings involve the knowing violation of a legal duty, which serves to put the defendant on notice that the line between lawful and unlawful behavior is being crossed. But the superseding indictment in this case contains no such allegations. Instead, it appears to charge a theory of criminality under which the government could prosecute citizens for reading a subpoena narrowly (but reasonably) instead of broadly, declining to cooperate with a voluntary request for information, failing to produce a document pursuant to a lawful claim of privilege, or invoking constitutional rights such as the right against self-incrimination. The most sensible solution to this quandary would be to interpret “improper purpose” in § 1515(b) to require the intentional violation of a known legal duty, consistent with the traditional meaning of “corruptly” in the criminal law and the D.C. Circuit’s reasoning in 18 http://www.merriam-webster.com/dictionary/improper (accessed September 2, 2015). 19 http://dictionary.reference.com/browse/improper?s=t (accessed September 2, 2015). 20 Compare, e.g., United States v. Starks, 472 F.3d 466, 468 (7th Cir. 2006) (ripping up an incriminating affidavit and attempting to swallow it); United States v. Cisneros, 169 F.3d 763, 765-66 (D.C. Cir. 1999) (lying about payments and financial arrangements to ensure cabinet nomination would pass an FBI background check); United States v. Messer, No. 97-4504, 1998 U.S. App. LEXIS 5008, at *2-3 (4th Cir. Mar. 16, 1998) (submitting a forged document in response to a DEA subpoena); United States v. Kowalewski, No. 13-CR-045, 2014 U.S. Dist. LEXIS 165404, at *8-9 (N.D. Ga. Oct. 7, 2014) (providing fraudulent and backdated leases to SEC); Kanchanalak, 37 F. Supp. 2d at 2 (mutilating, discarding, hiding, and erasing files that were subject to a grand jury subpoena). Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page28 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 21 Poindexter. Other similar statutes have been narrowed in that way, 21 and the legislative history of § 1515(b) would support such a narrowing construction.22 If the language is construed that way, the superseding indictment would have to be dismissed because it plainly fails to charge the required elements of the crime. If improper purpose is given a broader construction—indeed, any construction broad enough to reach the conduct charged here—then the superseding indictment must be dismissed on due process grounds, because as applied here the statute would be unconstitutionally vague. A court in the Eastern District of Louisiana recently confronted a similar vagueness challenge in United States v. Rainey, No. 2:12-cr-00291. There, a BP executive was charged under § 1505 with obstructing a congressional subcommittee investigation relating to Deepwater Horizon. Specifically, he was charged with not voluntarily disclosing certain information about the oil flow rates in a congressional briefing, internal memorandum, and letter to a U.S. Representative. The defendant made similar arguments as here, including that he was under no legal duty to provide the information, that it had not been requested, and that § 1505, if applied to a mere non-disclosure of information in response to a voluntary request, violates due process. In an oral ruling, the court granted the defendant’s motion to dismiss the obstruction count as void for vagueness. Valco Dec. Ex. 18 at 287:5-9; see also Mem. of Law in Support of Def. David Rainey’s Mot. to Dismiss Count One of the Indictment for Unconstitutional Vagueness, United States v. Rainey, No. 2:12-cr-00291 (E.D. La. Mar. 4, 2013); Supp. Mem. of Law in 21 See, e.g., United States v. Safavian, 528 F.3d 957, 964 (D.C. Cir. 2008) (concluding “there must be a legal duty to disclose in order for there to be a concealment offense in violation of § 1001(a)(1),” which prohibits the falsification or concealment of a material fact). 22 The legislative history of § 1515(b) confirms that the amendment was intended to address situations where, at the very minimum, the governmental body actually sought or requested the withheld or concealed documents. See 142 Cong. Rec. S11608 (1996) (“This bill would correct the court's nonsensical interpretation of section 1505 by making clear that the statute prohibits witnesses from engaging with improper purpose in any of the variety of means by which individuals may seek to impede a congressional or other governmental investigation, whether doing so personally or through another individual, and whether by making false or misleading statements or withholding, concealing, altering, or destroying documents sought by congressional committees and other investigative bodies.”) (emphasis added); 142 Cong. Rec. S4857 (1996) (“This definition . . . would make it clear that this prohibition bars a person from making false or misleading statements to Congress and from withholding, concealing, altering, or destroying documents requested by Congress.”). Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page29 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEF.’S MOT. TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNT ONE Case No. CR-14-00175-TEH 22 Support of Def. David Rainey’s Mot. to Dismiss Count One of the Second Superseding Indictment for Unconstitutional Vagueness, United States v. Rainey, No. 2:12-cr-00291 (E.D. La. Oct. 27, 2014). This Court should do the same. V. CONCLUSION For the foregoing reasons, the defendant respectfully asks the Court to dismiss Count One of the superseding indictment. Dated: September 7, 2015 Respectfully submitted, By /s/ Steven M. Bauer Margaret A. Tough Nicole C. Valco Kala Sherman-Presser Tyler P. Young LATHAM & WATKINS LLP Kate Dyer CLARENCE, DYER & COHEN LLP Attorneys for Defendant Pacific Gas and Electric Company Case3:14-cr-00175-TEH Document125 Filed09/07/15 Page30 of 30