Criminal Liability -- 2005



Arthur Andersen LLP v. United States   (U.S. Supreme Court)

Obstruction of a proceeding through use of document retention policy

The Supreme Court 5/31/05 held that 18 U.S.C. § 1512(b)(2)(A) and (B), an obstruction of justice statute, is not violated unless the defendant is conscious of his wrongdoing and has in mind a “particular official proceeding” that his conduct will obstruct. The Court held that flawed instructions were given to the jury that convicted Arthur Anderson of violating the statute, which prohibits “knowingly . . . corruptly persuad[ing]” another person “with intent to . . . cause” that person to “withhold” documents from, or “alter” documents for use in, an “official proceeding.” The Court noted that it is “not wrongful for a manager to instruct his employees to comply with a valid document retention policy under ordinary circumstances.” Focusing on the statute’s “knowingly . . . corruptly persuades” language, the Court held that the government was required to prove that Andersen was conscious of its wrongdoing. The Court rejected jury instructions that excluded a need to show “dishonesty” and that permitted a conviction if Andersen intended simply to “impede” the government’s fact-finding ability by enforcing a document retention policy. Finally, the Court held that the district court erred in leading the jury to believe that a conviction did not require a finding of any nexus between the “persuasion” to destroy documents and any particular proceeding. The Court reasoned that a “knowingly . . . corrup[t] persuade[r]” cannot be someone who persuades another to shred documents under a document retention policy without having in mind any particular official proceeding in which those documents might be material. This case is important to any business with a document retention policy that may face a government investigation and any business that must comply with the document retention requirements imposed by federal law following enactment of the Sarbanes-Oxley Act. Decision Below: 374 F.3d 281 (5th Cir. 2004).