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tv   Kelly v. United States Oral Argument  CSPAN  January 18, 2020 2:00am-3:02am EST

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political revenge plot. >> once again the government is trying to use the open ended federal fraud statutes to enforce honest government at the state and local levels. it's theory this time is that the defendants committed property fraud, by reallocating two traffic lanes from one public road to another, without disclosing their real political reason for doing so.
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this theory turns the integrate of every official action at every level of government into a potential federal fraud investigation. it ends runs mcnally and skilling by subsuming on a services fraud within property fraud and by criminalize ulterior motives even without bribes or kick backs. would affect the criminal jurisdiction in a fraught area. not the law. this court in cleveland held that regulatory authority is not property. so an official who induces a sovereign decision through deceit has not obtained property by fraud. only when the official lies to divert state resources to private use has he stepped outside the regulatory rachael and committed property fraud. this recall distinguishes property fraud from services proud and from routine hit cal conduct. -- political don duct. here because the defendant
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reallocated the traffic lanes from one public use to another, the port authority at most was deprived of regulatory control, not property. and that's true regardless of whether as the government now alleges the defendants lacked the authority to order the re-elinement. mr. levy will explain why the government is wrong to say that, but it's ultimately legally irrelevant because the fraud statute does not prohibit lying to take unauthorized state action. they prohibit lying to obtain property. and that's simply not what occurred in this case. >> you said if the resources were diverted to private use, then the prosecution would be okay. but why isn't it a private use to benefit defendants politically. >> i'm trying to distinguish the use of the property from the motive for the decision. so here the decision was to
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realign the lanes from one set of public drivers to another set of public drivers. both are public uses of the lanes. now, it's true the motive, the alleged motive for the he regulatory decision was improper. it was political. that's the allegation in the case. but that doesn't mean that it's -- the use of the lanes was private. it's not -- your honor the typical case in which the government prosecuted property fraud against a public official is where the official lies to take property from the government for his own use. so, situation where you lie on your expense report, say you incurred this expense for business reasons and you did not. in that situation you're lying and you're taking the property away from the government for yourself. that is obtaining property. here what the defendant's influenced through their deceit
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was the decision but the alignment of lanes and if there's anything that is regulatory in nature -- >> mr. roth, on that theory, would it or would it not make a difference if the defendants here, rather than doing everything that they did, for a political reason, if they had done it to make their commutes easier or their family commutes easier so it wasn't anything about politics. they're own personal interests but did exactly the same thing. is that covered or not covered on your theory? >> that -- on my theory that is nose property fraud. even in that case the official has not obtained property -- >> nor not making just a distinction between private uses and public uses. private purposes and public purposes maybe. >> certainly not making distinctions between the type of purpose. what i am trying to distinguish is the use of the property. and and is it's regulatory
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decision to realign the lanes for whatever purpose, because if what we're concerned about is the integrity of the purpose, behind the decision, that really sounds inhospital services fraud. we concern about not the government being cheated out of property that it opens. what we're concerned about is the good path of the official in making the decision. >> that's a hard -- can be a hard line to draw. if the rerouting of the traffic is done for commercial benefit of the individual in whatever way, that would be a violation. right? >> if -- >> he's get a development or something, building a hotel in fort lee and he wants the traffic redirected there or directed away from, whichever, because he thinked it will increase business at his hotel. >> if the court were to consider that a kickback that would be honest services fraud, not property fraud. again, the decision there is a
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public -- a decision but allocating scarce public resource among public uses. the concern in your honor's hypothetical, was it's good reason? was it to benefit the public or himself? what this court said in stilling is if you make the decision because you were paid a bribe or because you were going to be getting a kickback, that violation of your honest services, your duty to provide honest services to the public. >> what we're doing here is interpreting a statute, and it's not quite clear to me how your argue. sits into the language of this statute. so, property -- money is property. and money was lost. so how does this fit into the language of mail fraud statute -- the wire fraud statute? >> your honor is correct. the relevant word is property, and the second relevant word is obtain. and this court in cleveland explains that when the
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government is making sovereign decisions in its capacity as sovereign, implate indicating regulatory interests that is not property within the meaning that congress had. >> was there a loss of money in cleveland? >> well, there wasn't -- it's not clear if there was loss of property. certainly i would say there was an official who was processing the fraudulent application, and if he had not been given the fraudulenting mix to process he would have been doing useful work for the agency and me a maybe gone home an hour earlier. wouldn't have mattered to the result in cleveland. because it's all -- >> still, how does it city in the statute? is that there isn't property -- property isn't obtained when it is wasted? does it -- ifs at gloss on the word "defraud? ." >> i think it's two steps the first step is to establish the decision this he realignment, is not property because that's control. that is regulatory power.
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the second step is to say, what about the costs of implementing it? and i would say, the costs of implementing that regulatory decision are part and parcel of it and it's the scheme -- the scheme is not to obtain that property. the purpose of the scheme their object of the scheme, is to effect the policy decision this, regulatory decision, in the way that the officials want. >> in the case of sending city snowplows to clear your own house first, or sending city maintenance people to paint your own house if you're a public official, i was under the impression you thought that would be a crime. is that right? >> if you're sending the public employees to do private work, yes, absolutely. that's not regulatory. you're just taking the city property and using it for private use which is not -- that's 'er obtaining the property.
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>> even though both are diversions of city resources, or state resources, whatever it is, it's just one is regulatory and one is not because one involves personal benefit? >> personal use, yes, your honor. every regulatory decision diverts resources in some way. every time a public official makes a decision, there are implications for the bureaucracy and for public property. so there is diversion going on, and maybe the decision was made for a bad reason, and if it's a bad enough reason, maybe it's an honest services violation. >> is your theory the word "or taken" does the work in response to justice kagan's argument. >> i don't think it's obtaining property. cleveland focused on property and what did congress mean when it said property. i think we're concerned with cheating people out of their property rights and you do that with a government entity. you can cheat the government out of its property.
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teen know is the -- you ay taxed to government lie to avoid paying taxes and you committed property fraud. the same thing in a port authority situation. you owe a toll and lie to evade paying the toll. you have cheated the government out of property that it is owed. if what you're doing is making a regulatory decision like allocating public resources and there's in question that the main line is a puck use just as much as the special access roads are a public use of the property. that is not obtaining property. >> i can understand the distinction between a regulatory decision and a deprivation of property when the regulatory does discussion cotts the loss of property put when the regulatory decision causes a loss of property issue fine it more difficult to see the distinction. >> your honor, i think that every regulatory decision is going to have some consequences
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for public employee time, for example, which is the species of property the government has invoked. but in this -- let's take this case an an example. the focus on the additional money spent was the toll keeper, the toll keeper had to do an additional shift but the toll keeper was doing her job of collecting tolls for the public the port authority was not deprived or her salary. the objection is, if this regulatory decision had not been made, we would not have had to hire that toll keeper for the work. >> well, i'll try this one last time. tell me how this -- when with write the opinion, if we were to write one in your favor, how would be explain your result within the language of the statute? >> i think the court would say, the statute prohibits schemes to obtain property when you are using deceit to influence a regulatory decision to change a
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regulatory decision, that is not obtaining property, and the corollary is the costs of implementing a regulatory decision don't change the results. >> i think i'll try mine oncemer, too. mr. roth, why when a public official says you -- to a city maintenance worker, paint my house before you do anything else, why isn't that similarly an allocation of resources? >> because it's not the job -- >> benefits me. but i got the sense -- whether it's painting or snowplows, you go plow my street first. why isn't that an allocation of city resources. >> let me try to clave. think i may have led to some confusion. you're plowing public roads, and you say issue want to plow my street first or my neighborhood first, that is not obtaining
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property by fraud. because that is an allocation of resources to a public use. it's a public use that happens to benefit you and maybe that was your motive and that's very bad, but it's not obtaining property by fraud. if you instead trick the public employees not into plowing the public root but into plowing your private driveway, which is not the job of the government, that's not what the government does. the government is concerned with public property and clearing public property. if you trick the employees into plowing your private driveway, then you have taken their services for your personal use which is fundamentally different. that's in different from saying, i worked overtime when you didn't, please pay with my hourly wage for the hour time i didn't work. >> and that difference is just to go back to justice alito's question, where in the statute. >> the difference nils the scheme to obtain property. that's where it is in the
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statute. you look at what is the object of the scheme and if the object of the scheme is to influence a regulatory decision, it's not a scheme to obtain property. that's just follows from cleveland. otherwise, every decision that public official makes is on the table, and the only thing that is separating -- >> i'm sorry. thought the scheme was to make life difficult for fort lee. if that was the scheme and you defrauded the use of government property to accomplish your goal, why is that any different than taking the maintenance worker to plow your road? your private street? >> the difference is that here, the alleged purpose, the alleged motive, was what your honor said, to increase -- >> that was the scheme. >> yes, the scheme was to do that through a regulatory
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decision. by re-align lanes from one public use to another public use. what the objection is to the conduct here is an objection to the purpose. not the objective use of the property. >> my problem is, i don't think -- i can see a headline that would say, it's okay for officials to use government public money in a way that is plainly unauthorized, not just in its motives but its end use, and an official can and should not be -- should never be liable for that. our public officials now can use government resources with their private ends. >> urn -- -- >> not mixed motives which is interesting here with the
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traffic study and whether they have enough evidence there wasn't a traffic study, but you're saying what it was -- what the government has said, you're not authorized to do it, there's a question about that. >> yes. >> and you didn't have even a mixed motive. you had only a personal motive. >> so, yourself, i'll let mr. levy speak about unauthorized because actually the government's their was he had the authority and abused his power by making the decision -- >> a much more difficult question. >> what i will say -- i'm not trying to suggest this is okay. we don't want public officials acting for personal reasons. don't want them acting necessarily for partisan or political reasons. what i'm saying is the remediles not the federal property fraud statutes. we have certainly political remedies that were very much -- had pretty substantial reper accusations
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here and may be state law cop statements on official abuses of authority. in faction new jersey has a a statute called official misconduct which is specifically directed towards unauthorized decisions with bad purposes. that's not what the federal property nowed statute is concerned with. the statute is concerned with cheating the government out of its property rights. and that's just not what we have here. what we have here is an abuse of power, a political abuse of power, and that's -- if anything, again, that sounds an honest services fraud which this court has limited due to vagueness concerns to bribes and kickbacks. >> your honor, if there no further questions, thank you. >> thank you, counsel.
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>> mr. levy. >> mr. chief justice and may have it please the court. a public official who is acting politically and not for personal gain does not commit fraud by lying but his reason for an official decision. if the decision was generally within his authority. the government disputed that below but now urges that as the rule in this court. that concession requires reversal. the government alleged and proved that mr. barone any was the cohead of the port authority response for supervising all aspects of its operations. the government itself elicited there was never any policy that reclued him from using his authority to alter a traffic pattern. for the government's rule to work, this court should require an objectively clear lack of authority, something not even arguably shown here. otherwise, any official who conceals miss cat motivation risks be convicted of fraud if a prosecutor or jury later
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disagrease but the scope of his authority. if the government's rule is to provide any limits this case must lie beyond the limits. i'd like to discuss what the government alleged, argued and proved below about husband authority about deciding the official's authorities the line between guilt and innocence under the fraud statutes. in thank you districted court in the government alleged that mr. barone was responsible for the general supervision of all aspects of port authority business, including the operations of its transportation facilities. from it's main cooperating witness, mr. wildsteen, the government elicited that exact statement precisely, kicking off one of the allegations from the indictment. some el elite is that the title deputy executive director was a misnomer, that within the port authority structure, the deputy
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executive director and the executive director had a 50-50 split in terms of power sharing, that the deputy executive director was not the number two position within the port authority. the government also -- >> the arrangement is always that, there's a new york representative who is the executive director and the new jersey representative who is the deputy. is that right? >> that was at the time the arrangement. it was always appoint bid the governor of number for the deputy executive director and the governor of new york for the executive director it and was understood win the agency, by everybody. all the witnesses the government called testified that was the arming: they called mr. bay baronies success are so who testified that was the arming: one did not report to the other. >> this is a bistate agency. why would new jersey agree to an arrangement like that where its
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representative is always in the second seat at least, at least nominally. just the big brother across the river? >> i don't know the answer to that except that the structure within the port authority is that was net the case and it didn't afree to play second fiddle. it was understood that within the port authority the deputy executive director had equal authority. the vice-chairman testified but parallel chains of command that were understand, particularly for decisions made within new jersey. it was understood that would fall within the deputy executive directors scope of authority. >> i think one of the government's main arguments for -- on the sufficiency of the evidence, which is fairly pro government in this situation -- was that mr. wildsteen had to lie to the port authority
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employees about the executive director knowing about the lane change. enough fact the reality of the situation was that mr. baroni couldn't do this without the executive director's acquiescence or acceptance, doesn't that show his lack of authority? isn't that -- why isn't that sufficient? >> so, two things, your honor. first of all i don't believe here here on a sufficiency ground and for reason we argued on our reply brief. but even within that we're not saying that the lie might not be a piece of evidence, but on the government concede the lie does not show a lack of authority. the government concedes an authorized official is permitted to lie to their subordinates and cannot be that circularly the lie establishes lack of authority. here all of the evidence at trial was that mr. baroni had
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preliminary authority over the operations of the port authority. and mr. wildstein asked, when he was asked why did you come up with the traffic study his first answer was for purposes of the media and for purposes of explaining it to local officials, when pressed by the government, he said, also to give a rope -- a reason for the officials but the fact he -- that he chooses to tale lie to career officials to make this go over more smoothly in the same way that a public official wouldn't tell the world that they're doing something for a political reason. >> but would you spent a moment on the traffic study. >> certainly, your honor. the government has conceded that if mr. -- again, this is new in this court. all of these concessions. that if mr. baroni has authority to order a terrific study he could do so even with the intention of causing traffic in fort lee, and they concede he
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had the authority order a traffic study. all of that is conceded. what they say is he lied but the existence of a terrific study and there was no lie about the existence of a traffic study. there was no preparation at all but the traffic study. mr. wildstein went to the bridge supervisors and told them, i would like to know what will happen with the effect on traffic will be if we switch the three lanes, please switch the the lanes or maybe not with the "please," and studied the results. collect the numbers and tell me what the results are. the only part of that is a representation is the first part. i would like to know. my motivation is, my purpose is, and the government agrees, that's not capable of being the lie for purposes of a fraud conviction, money and property fraud conviction. the other two parts oren instruction, an instruction to do a traffic study and the employees of the port authority did that. what the the government spent a
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great deal at trial proofing that money was spend on a traffic study they say was illegitimate because nobody ever cared but the results but the government agrees now that caring about the result is is not an issue. they say the traffic study didn't exist, and that's just flatly contrary -- >> mr. levy is it your position that suppose mr. baroni said, i'm giving you no reason at all. or suppose mr. baronu said we're going to do a traffic study but it's going to be a sham traffic stewed. would he still have had authority. >> certainly the first one. certainly had at any point the discretion to si, as somebody had done early on in creating these three traffic lanes -- weren't required by thing -- at in point in time could have said i think they should have a fourth, or i think they should have only two, or only one and that was fully within his authority, and as that's government arguedded and proved
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the case that was their point, their summation, was he abused the authority he was entrusted. >> and she second, we're going to do a sham traffic study. >> i think he can do that. think as a functional matter, who knows what actually results from that, but he has the authority to say we're going to do a traffic study because i want to do this thing, and for public reasons it's easier to do a traffic study. >> you've said this was not sufficiency question. what is it if it's not a sufficiency question? because as i understand your argue. ser, not pointing to any instruction that was incorrect or to the rejection of an instruction that you offered. so how are we to look at this other than how to a sufficiency lens? >> frankly, the moat obvious way is that the government forfeiture of the issue. the defendants in the district doubter said the line is --
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district court said the line is authority and if we were authorized then that is a complete defense, and the government told the district court do not give that instruction, and the district court said, i'm not giving that instruction because it is not a defense and i don't want to confuse the jury into believing it is. now in this court, the government is saying, actually, it turns out that the hinge between gift -- guilt and innocence whether he was authorized and we get the deferential of review even though wed toll the district court this didn't matter. the government forfeited the authority to prove he lacked the authority. enough in this court, this court should assume that there was no lack of authority -- >> is there any reason to think that the jury actually made a finding about baroni's authority. >> no-no reason whatsoever the district court was attempting to make sure that they didn't consider that be relevant. that was what we pressed, what that this is the relevant
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distinction and the district court wanted to make sure the jury didn't believe it was a defense and nothing in the jury instructions suggested it would be a defense. thank you. >> thank you, counsel. mr. fagan. >> thank you, mr. chief justice, and plaintiff it meese the court. the defendants in this case committed fraud by telling a lie to take control over the physical access lanes to the george washington bridge and the employee resources necessary to re-align them. unless they lied about the existence of a port authority traffic study, fun of them had the fewer direct the resources and realign the lanes. because they told that lie, those resources were answering to them, to their own private purposes, rather than to the public officials who were duly appointed to decide what those resources should be allocated to
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do. their actions were fraud in just the same way it would be fraud for someone with no connection to the port authority to empin that it port authority supervisors and order port authority employees to realign port authority lanes or in the private context, for someone to usurp the authority by deception of a taxicab company's dispatcher and order the cabs and the drivers to good wherever the fraudster pleases. they don't get a free pass simply because baroni worked for the port that when the evidence showed he didn't have the power to direct these resources in this way without telling the lie. they don't get a free pass because their hypothesizing that legitimate decisionmakers might in theory have decided to realign the lanes when the precise point of their scheme was to take these resources out of the legitimate decisionmaker's hands and put them some heir own hands.
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and they don't get a free pass simply because their motive happens to be political. let me start with the legal argument made by kelly's counsel which seems to be drawing a distinction between public uses and private uses and there are two main problems with that -- actually probably three. one is i don't see where license for that is in the statute and that get me right to the second problem which is that it seems to dow a distinction between fraud where the victim is a public entity and fraud where the victim is a private entity and the court rejected that distinction in pass quinn. i don't know the taxicab hype the dollar say it's only fraud if the cabs go to private use. we're talk beaut private company in that context. and the third problem is, i don't know how a jury -- i think some justices on the court're grappling with this -- hough a jury decide the difference between a public and a private use. >> you have two separate points,
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i think. one is you say now -- which is think is stronger than your brief -- if you have authority and you work for a government, only if you say -- tell them lie, an truth, then you don't have authority. my good unless. the code of federal regulation, rules of any department, the government is filled with rules. and there are numerous instances where a person might say something untrue about something related to a rule that gives them authority for that. that's enough to said we're back to honest services. and that's also true of the second. if in fact -- there are two separate parts to the second. might as well get both questions out. one on authority is i don't know where that comes from. if you have authority to do something in government, but you can't, you lie about something, anything, that -- well, then the
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property stealing statute and the second problem with your second claim is, if you don't have authority, but you put what you take to a public use, now, i either that -- is a conversion of property, a obtaining of property within the statute or it isn't. if it is, i don't see how honest services fraud is not back in the statute which has been ruled out since mcnally, and if it is isn't, i don't see how this case works. >> your honor, let me answer the second part of your question first and then i'll try to get back the first part. to answer the second part of your question, i don't -- i don't think there's a
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distinction between private and public uses works because that's not a distinct the statute draws or not -- >> back to the old -- my point is why, then -- we're back to honest services. there's no deprivation. >> the -- >> of honest services that does not require somebody in the government to spend some time or use some paper or use a telephone, in order to achieve that dishonest thing. if you're going to count that as property, well, fine, you could do it under some statute but if you die under this statute, this statute, then prohibits the taking of -- dishonest services, exactly what the court held it doesn't do. >> if i might answer that. take me a second to play this out but a very important distinction. they're trying to lump a bunch of different kinds of frauds together and make them all sound as if they're the same. this case is about a very
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specific kind of fraud, commandeering fraud, when the defendant tries to take over property that is in the hands of the victim and manage it as if it is his own property. that's why they were doing with the lanessen the bridge and the employee resources. so, for example, if there's a snow blue and i tack the keys to snowplow and drive off, everyone agree i obtained the plow. if i put on a mask from the mission impossible tv show and impinault the boss of the snowplow driver, and i tell the snowplow driver to drive around in the snow employ and do the exact same thing was going do i have obtained the snowplow and the driver's services by fraud. not every fraudulent scheme and not every deceptive scheme works that way. sometimes they're deceptive schemes in which somebody simply wants an agency to do something or wants a private victim to do something on his behalf. and then you have to look at
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what is actually the object of the scheme and how the scheme works to see if the agency is deprived of property, i. >> but the basic difference between taking the snowplow is the official has no authority to take the snowplow for his private use. the official does have authority to regulate how lanes are used on the highway, and say these are going be used for fort lee, these aren't. >> first of all, baroni did not have that authority -- >> that's -- >> i can get to the evidence of nat a second. also, i don't think that it's fair to call this a public use. what we would say is a public use is the use to which the legitimate supervisors of the port authority decided to put the port authority -- >> you're saying, your theory is that by the actions in the case they have commandeered the lanes on the expressway? >> yes, your honor. they common deeder the lanes and resources nose rear --
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>> still being used for public purposes. >> i'm not sure pout public services. >> people want to use the highway to get to fort lee they can but have nothing to do with the scheme at all. >> your honor, i guess i would push back on this to this extent. i they've dvded to close the bridge, is that public use or private use? if they decide only kelly can use the lane, public use or private use? if they decide on red cars can go town lee line -- >> didn't decide any of those thing. just a problem getting there which was quite a problem. i grant you, quite a problem, but they used it for cars going down. snowplow. there's a law here -- a rule, treat every street alike. and you know what the snowplow freighter did? he snowplowed the mayor's street first. that is not a good thing to do. it is really undesirable and maybe it should be a crime.
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but 30 years in prison? that i'm not sure. and that is -- this statute has to do with property fraud and is taking the snowplow and putting it to the use of the public streets in violation of a rule treating the mayor better? is that property crime? >> your honor, in that hypothetical we would not say that is fraud. there's no lie. there's nothing material -- >> of course the is. where are you going? i am going to fifth street first and then i will go to the grocery store as the street and then -- and you know what he did? he went to the city councilman's street. there's a lie. it's easy to make up cases that there's a lie in and that is my problem, same problem. we're bag into honest services fraud.
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which is fraud. and bad. and the question is, does this statute get it? >> we are not in on a services fraud. belying your hospital was not a lie that was told to obtain property. a lie what he was going to do. here's the reason we're not -- >> weren't giving hit i'm. >> in the honest services fraud case in mcnally, there was no dispute that the defendants in mcmali had the authority to decide who was going to ensure they state of kentucky. the -- >> disis what troubles me about your argument. your argument is that if baroni was authorized he could not be convicted. aim right? >> yes barroni had the authority do what he did, then not committing fraud. even though it's a lie. >> you say that takes care of these hypotheticals. that seem just disturbing to some people. you say but the jury four-he was authorized and this sufficient evidence to support that
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finding. >> found he wasn't authorized democratic. >> sowm sorry. not authorized and evidence -- viewing the evidence in the light most favor able to the verdict to support the finding but i see no indication whatsoever -- no reason to believe the jury made any such finding. i read the jury instructions several times. there's nothing in there that would alert a jury -- a juror to the obligation to find that baroni was unauthorized, unless i missed something. >> let me say a couple things. they did not make an objection to the jury instructions properly in the court of appeals. not part of the question here. >> i know that but i've never seen a criminal case where we're asked to defer to a jury's finding on something that the jury didn't find. putting aside the question whether there's any evidence to show that he lacked authority. >> let me point you to a come of places and then let me talk
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about the evidence of lack of authority. first of all, that's the instruction that the court of appeals deemed adequate and that's at page 875 of the joint apen dis, the instruction on obtaining property, which the court of appeals deems suffered to notify the jury that when someone is acting on behalf of an organization, acting as the agent of that organization, he is not obtaining property when he exercises the authority that the agency is duly conferred on him. even better than that is the materiality instruction from pages 875 to 876 which says if you fine the representation that the lane and toll booth reductions was for the purpose of of a traffic study was false, you must determine whether that representation was one that a reasonable person might have considered important in making his or her decision to commit port authority resources for that endeavor, including services of port authority personnel. >> what does they say about
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authority to -- >> your honor -- >> to reallocate the lanes. >> if baronry had the authority to reallocate the lanes for any reason or no reason at his counsel stated he did, don't see how the jury could have found if the lies they told were material. >> everybody has authority to spend or do their act on behalf of the agency. anybody who does it for their own personal purposes is unauthorized. so it's meaningless to say is he authorizeses or not. did he have authority to close the lanes under certain circumstances? did he have authority to close the lanes on his own say. >> he might have. >> did you prove that he had limited authority? where did you prove -- >> we proved he did not have the authority to close the lanes understand these circumstances
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without telling the lime can explain why if you'd like. when wildstein first proposed the idea of realigning the lanes, baronry's response was to ask wildstein how he was going to do that. wildstein came up with the idea that it would have a traffic cover story -- the cover story of a traffic study and explained at the time to kelly that one purpose of the traffic study cover story was in order to enlist the port authority initials they would need no order to realign the lanes and then had to lie to both the manager of the george washington bridge and the manager of tunnels, bridges and terminals that the executive director was aware of this and apparently had toes tacitly approved it and -- tacitly approved if it where in fact they were actually concealing it from the executive director. >> this contrary to their expectations there had been no slowing of traffic. and in fact, the lanes on one
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lane traffic remained the same or maybe improved. would you still have a case here? >> yes, your honor. it's not bur -- the effect was catastrophic and that was a reason why the prosecution was brought, because of the incredible danger in which they put the citizens and commuters s of fort lee but a the would still have committed the same cry and they were hiding it from the executive director, wildstein testified there war processes in place to use the port authority resources and he didn't follow them. we the executive director found out he cab selled it and stated the process had been, quote, subverted. baroni clearly had siant authority within the port authority organization but when someone questions hour they're knowing do do something, has to lie in order to accomplish it, has to lie that his boss has approved it, has to con it from his boys and --
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>> isn't its often the case that somebody who has the authority to do something may lie about why the person is doing the thing because if the real reason was exposed it would cause fewer row and people would be angry. that doesn't show the person doesn't have the authority do it. a person highs his brother-in-law for a position. why did you hire this person? well the persons is very best qualified person for this job. when the real reason is, his wife wants him to do it. doesn't want to say it -- does that show he didn't have the authority to fill the position. >> that's not the only piece of evidence we're relying on. this isn't a lie why they're doing it. this is a lie that wildstein directly testified that they needed to tell in order to get the resources that they needed. it was clearly important to the george washington bridge manager and the manager of tunnels,
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bridges and terminals, that this was something the executive director enough about. both the executive director and vice-chairman of the port authority board of commission heed testified they would expect to be notified but something that was in order of mag thitude less disruptive and they weren't notified. >> why do you -- this is the same -- i don't want to lose what the question was in light of the instructions given. and what i have so far found is that the defense did ask the jury to be instructed to do just what you want. they asked the -- they said, judge, tell the jury that if the port authority granted or bestowed on the defendants the power or authority to control the property, the bridge, et cetera, and that they acted within the bound of that authority, then you can't find the scheme to defraud. i think you agree with that, and the problem is the judge said,
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no, i won't give that instruction. then what the judge gave as an instruction insofar as the court of appeals and we're reviewing the court of appeals -- insofar as as the court of appeals say they gave the essence itch. this he instruction, to establish a scheme to defraud, the government must prove the scheme contemplating deprive egg the port authority of money and property. what? that's the essence of what he didn't give? now, i haven't read the two instructions you read. but the one i read, i think is the one that the court of appeals relied upon. >> yourself -- >> what do we do about that. >> i would look back at the materiality instruction. >> that isn't what the court of appeals relied on. >> i think if the court of appeals got the substance right and you don't aggrieve with the reasoning there's no reason to reverse tissue particularly when
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then issue hasn't been presented to court. this was raise in the reply brief of baronry kuo didn't petition. let me to address the instruction that was reject. the that instruction was proposed in the context of an instruction on 18 u.s. sc666. the more general misappropriation of federal funds statute, and the instruction on that which appears at page 870 is the joint appendix has reference to tomorrow. they were clear in the district court and see this fine us built the court of appeals and the district court, that baroni and kelly were free to argue the authority issue. the only question was whether the jury was going to get a specific instruction on that point. and the government believed the instruction was unnecessary, it was -- would have been a novel addition to the third circuit resident pat term jury instruction on section 666 and
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moreover i don't in the their instruction was in fact correct because it might have confused the jury into thinking -- that's goes back to my colloquy withjustice sotomayor, if baroni had some authority under some circumstances that would exonerate -- you said you thought the instruction was unnecessary. may have been the case in light of your theory at the time. but surely after your focus here on the authority point, you wouldn't make that sim statement. >> -- the same statement. >> i think in retrospect may have been better to instruct the jury more specifically on authority. >> somewhat more specifically on the central point of your argument before us today. >> i don't in the a specific instruction would have accomplished it and don't know the instructional issue is before the court today. but we are defending this -- these convictions on the precise same ground they were found to be valid by both the court of
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appeals and the strict court which dressed the authority issue. the district court dressed the authority issue before trial tell the david could, it at trial. addressed after trial saying it believed the authority has been proven which then. the their circuit davised it. we have been consistent throughout and the -- we have never argued to my knowledge -- i haven't identified a place where we argued that if baroni had the thought that his counsel just claimed he had, which is to rea i line the lanes for any reason nor reason, that these defendants could -- >> mr. feigin nobody, no decisionmaker, has the authority to make any decision for no reason. that's a misnomer in terms. people have authority to do things only in the interests of the agency. so, give me a line drawing of for reason or no reason,
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meaning -- i don't think anybody in the port authority, including the executive director, could on a whim say, you know, i like playing on a board. let's change it to one lane because i just like to see a different pattern today. >> my apologies -- >> so, give me your definition of what "authorized" means. if he had the ability -- when first read your brief, it was if he had the ability to change the lanes on his own, then he had authority. now what the limits of that authority is where -- where i'm trying to get to. >> your honor, he -- >> but can't be no authority. >> so -- i apologize, simply
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repeating the language the court of appeals used which may have been a little hyperbolic, but if he were the person to whom the port authority entrusted the decision of whether there should be three lanes or one, such that his decision under these circumstances would govern, then he had the authority. i think the evidence showed that he was not that person. again, he had to lie -- >> the fact the executive director could overturn him doesn't prove the positive. >> that's right. your honor. we wouldn't rely on thatpiece of evidence alone just lice justice alito we're not relying on the fact he told a lie. he relying on a combination of circumstances. as i said earlier, if -- when an idea of something to do with my organization's resources is raised to me and my initial reaction is, how are we going do
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that? and then the idea is to tell a lie that will get everyone onboard with it and then we lie about the fact that my boss is aware of it and tacitly approvedded of and i conceal from any boss a reasonable jury can conclude i'm doing something i don't have the authority to do. >> m- -- >> please finish. >> that's what baroni did here. >> can i switch? the statute clearly says that a scheme of deception has to -- the object. it has to be to obtain property. can we talk about that for a minute? if i look at this and i'm an ordinary jury i'm thinking the object thereof this deexception was not to obtain property. the object was to create a traffic jam. this object was to benefit people politically. you can frame the object in lots of ways but notwithstanding that
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some employee time was given over to this scheme. that was not the object of the scheme, was it to appropriate that employee time? >> well, your honor, i think it was because this is -- this gets back to what i was saying to justice breyer earlier. this is a particular type of fraud where it's commandeering fraud, where what they're trying to do is to take property that is in the victim's hand, here the port authority -- and convert it to their own uses. may be if i take a knife on the table that doesn't month somebody and stab one, any end goal is to stab someone but i've stolen the notify. >> what in the commandeering incidental and innews to the scheme. to the was a little bit of time for an extra toll person to mitigate the problems of the traffic jam, or there was some people running around, counting cars, to conceal the purpose for
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what they were -- of what they were doing? that was in the the object of the scheme. >> yourself, the object of the skim was for though take control of real property, physical lanes, accessing the george washington bridge, and have those lanes be al located the way than -- >> that's a different theory. that's not the employee time and labor. that's like appropriating the george washington bridge. is that right? >> that is one -- >> not profiting the george washington bridge. it's reallocating lanes on the judge would have thought that cleveland makes clear that that is not an appropriation of property either. >> your honor issue think it's both. they've need the he employee resources in order to accomplish what they were trying to do with the bridge. if i could address cleveland for a second. this case and cleveland do both involve governmental decisionmaking but that's where the similarities end. in cleveland, the object of the scheme was to obtain a license
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under regulatory scheme that had no private analog whatsoever. the court rejected every private analog the government offered and the license was not proper my in the government hands. here you're talking but real property, physical lanes and who can access lanes and access rights to physical property are quintessential forms of private property, win over the oldest forms of property. and then you have the employee resources necessary to reallocate the lanes which even they acknowledge are plotterrer in the strawed statute. if you send paint irfoods paint the mayor's house that's property fraud because you're taking the employee services. >> that's because the object of the scheme is to use the employee labor to get your house painted. but i don't think that you can say the same thing here. >> your honor -- >> ow were not using the employee labor to create the traffic jam. >> they're using the employee
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labor as if it were theirs, not as if it were something that the port authority gets to useful in the private con tsk i were to impersonate the boss and start ordering around the company jet i think i have obtained the company jet and probably -- >> but you -- >> you picked an example that's easy for you. an example that ites hard is you tell the employee to pick up the phone and call somebody and say this. that's a bad thing. and then immediately say, okay issue it's property fraud because i i've used the -- the employee used the telephone or i used the four minutes of that employee's time necessary to convey the message you're theory would say that's taking of property so it's covered by the fraud statute. >> we wouldn't and i'm glad to have a chance to make this perfectly clear and this gets back to justice kagan's question as welch incidental uses of property that are not the object
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of the scheme are north going to be sufficient for property fraud, and i think the easiest place is this court's decision in laugh -- lofgren which involved bank fraud. the if the object of the lie is to obtain money it's not bank fraud because up reliedded to your lie you didn't care how the money dime you. the money comes to you in the form of a check which is branch property as posed to the form of cash which isn't. if one of tells a lie and the object ises to obtain a license from the state of louisiana to operate a video poker machine which is not property, they're not committing property fraud just because some employee needs to spend some time processing the license. >> here the object of the scheme was not to commandeer lanes on the bridge. the object was to cause a traffic jam in fort lee and if they could have done so it other way they would have. the universe to the traffic -- altering the traffic lane
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configuration was just the incidental means of achieving the objective. >> i don't think that's the lie they told to the port authority to get the port authority resources was a lie the told in order to get the resources. the causing of the traffic jam is what they wanted to accomplish with the resources. if i tale lie to get access to the company jet it may be that my goal is to take it on a vacation trip to macaw but that's not the object of the scheme as far as fraud is concerned and the victim over at the fraud. thank you. >> thank you, counsel two musts, michigan roth. >> thank you. ...
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property for officials did was use the seat to influence the exercise of those rights, they have not obtained property from the port authority. if that is not correct, then everything an official does falls within the scope of this statute and the only question open is was there to see involved? if that's right, i think the chilling effect on honest public servants is going to be severe. >> you responded to one half of their theory, one half of the theory is the allocation of land and the other half is the employee time. what's your response to that? >> my response to that is what he said at the end which is that the incidental cost of a decision are not its objects.
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and it's what your honor asked in an earlier question. the implementation of the regulatory decision is going to use some public resources. that cannot possibly change the result or else cleveland ã >> why do you call incidentals? it was essential to the scheme? >> because it's incidental in that it was the implementation cost it flowed as a result of the regulatory decision. the regulatory decision was to realign the lanes, that required employee time in terms of taking tolls and studying the traffic affect but that was not the object, that was how it got done.he military
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and china's military power. [applause] >> good afternoon


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