Punitive Civil Sanctions: the Middleground Between Criminal and Civil Law
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Punitive Civil Sanctions: The Middleground Between Criminal and Civil Law Kenneth Mannt CONTENTS INTRODUCTION .......................................... 1796 I. THE PARADIGMS OF CIVIL AND CRIMINAL LAW ................. 1803 A. Subjective vs. Objective Liability and Wrongful vs. Harmful Acts .. 1805 1. The Mental Element in ProhibitedActs ................. 1805 2. The Effects of ProhibitedActs ....................... 1806 B. Purpose: Punishment vs. Compensation ................... 1807 C. Remedy: Stigma and Incarcerationvs. Restitution and Monetary Pay- ments ........................................... 1809 D. Procedure: High vs. Low Certainty and State vs. Private Initiative 1810 1. Evidentiary Rules ................................ 1810 2. The Moving Party ............................... 1812 E. A Summary of PrincipalParadigmatic Distinctions ........... 1813 II. MIDDLEGROUND JURISPRUDENCE ........................... 1814 A. The Field of Inquiry ................................. 1814 1. More-than-CompensatoryMonetary Sanctions ............ 1815 2. The Problem ................................... 1816 B. JurisprudentialApproaches ............................ 1816 1. The Punitive Approach ............................ 1817 2. Formal ProceduralApproach ....................... 1820 3. Compensatory Approach ........................... 1823 a. Tax Fraud .................................. 1826 b. False Claims on the Government .................. 1827 4. Deterrence Approach ............................. 1830 a. Oceanic Steam Navigation Co. v. Stranahan .......... 1831 t Associate Professor, Faculty of Law, Tel-Aviv University. M.A., Center for the Study of Law and Society, Berkeley, 1974; J.D., Boalt Hall, 1975; Ph.D., Yale University, 1980. I would like to thank Abraham Goldstein for many informative conversations and for his critical reading of several drafts. I also owe an intellectual debt to Stanton Wheeler at Yale and to Dr. Kurt Kanowitz of IsraeL Others who provided important comments or assistance are Robert Blakey, Meir Dan- Cohen, Owen Fiss, Daniel Freed, Irit Haviv-Segel, Judith Resnik, William Schwartz, John Simon, Aviam Soifer, Kate Stith, Ruth Wedgwood, and Franklin Zimring. While writing, I was also supported by several institutions: first, during a sabbatical, by the Seth Boyden Visiting Professorship at the Law School and the School of Criminal Justice of Rutgers University, Newark, N.J., for which I thank Dean Peter Simmons and Dean Ron Clarke; later, as Senior Research Fellow in the Program on Civil Liability in Yale Law School, directed by George Priest; and finally, by the National Institute of Justice, U.S. Department of Justice, under contract OJP-89-C-009, with Abt Associates, Inc. The opinions stated in the Article do not necessarily reflect the positions or policies of the U.S. Department of Justice or of anyone else, except the author. 1795 1796 The Yale Law Journal [Vol. 101: 1795 b. Atlas Roofing Co. v. Occupational Safety and Health Review Commission ................................. 1832 c. United States v. Ward .......................... 1835 C. The Punitive Nature of More-than-CompensatoryMoney Sanctions 1837 D. The Reemergence of the Punitive Approach ................. 1840 II1. THE INCREASED ROLE OF PuNmvE CiViL SANCTIONS EXPLAINED ... 1844 A. The Changing Philosophy of Sanctioning .................. 1845 B. The General Expansion of Sanctioning .................... 1847 C. The Growth of the Administrative State .................... 1849 D. ProceduralObstacles in the CriminalProcess: The False Claims Act as an Example ..................................... 1853 1. The Decision to Indict and the Burden of Proof ........... 1853 2. Access to Evidence ............................... 1855 a. Civil Procedure in the Courts .................... 1855 b. Extending ProceduralReform: The False Claims Act .... 1859 IV. IMPLICATIONS OF THE GROWING ROLE OF PuNrTvE CIVIL SANcTIONs. 1861 A. Administrative Agency Prosecution ....................... 1862 B. The Attenuated Role of CriminalProsecution ............... 1863 C. Relationship Among Criminal, Punitive Civil, and Remedial Sanct- ions ............................................ 1864 1. Substantive Scope ................................ 1864 2. Are Punitive Civil Sanctions Desirable? ................ 1865 3. ParallelState-Invoked Punitive Sanctions ............... 1866 4. PrivatePunitive Sanctions .......................... 1868 5. A New ProceduralMiddleground? .................... 1869 CONCLUSION ............................................ 1871 INTRODUCTION When harmed by another member of society, one assumes that two funda- mentally different legal responses are at one's disposal-criminal sanctions and civil remedies. This view is reflected in Justice White's majority opinion in Hicks v. Feiock: The States have long been able to plan their own procedures around the traditional distinction between civil and criminal remedies. The abandonment of this clear dividing line in favor of a general assess- ment of the manifold and complex purposes that lie behind a court's action would create novel problems where now there are rarely any-novel problems that could infect many different areas of the law.' At the heart of this statement is the idea that the criminal law is meant to punish, while the civil law is meant to compensate. The criminal and civil law, each with different purposes and procedural rules, constitute paradigms by 1. Hicks v. Feiock, 485 U.S. 624, 636-37 (1988) (distinguishing between punitive sanctions imposed for past wrongful conduct and remedial sanctions levied to compel payment of child support). 19921 Punitive Civil Sanctions 1797 which legislatures and courts analyze their actions2 and by which textbooks and scholarly literature structure arguments.3 These paradigms shape both legal principles and the legal profession with respect to issues such as the specializa- tion of attorneys,4 the definition of procedural rules,5 and the division of authority among courts.6 Though attractive to the legal mind, however, the bifurcation of legal sanctions into two categories is misleading. In numerous civil cases plaintiffs have sought punitive sanctions against defendants who were charged with serious wrongdoing. Under the False Claims Act, the United States government sought a punitive civil penalty of $130,000 from an individual who filed $535 in false claims;7 under the Comprehensive Forfeiture Act of 1988, the First Circuit Court of Appeals compelled a man to give up 17.9 acres of property on which a home was situated after police seized 130 marijuana plants on the property;8 under the Racketeer Influenced and Corrupt Organizations Act (RICO), private plaintiffs filed suit for $10 billion, mostly for punitive damages, against an electrical power company for fraud in overcharging;9 under common 2. See, for instance, the line of habeas corpus cases that determine which procedural rules apply by deciding whether the action is criminal or civil: Hilton v. Braunskill, 481 U.S. 770, 776 (1987) ("[G]eneral standards governing stays of civil judgments should also guide courts when they must decide whether to release a habeas petitioner pending the State's appeal .... ."); Harris v. Nelson, 394 U.S. 286, 293-94 (1969) (observing that labeling habeas corpus proceedings as "civil" is "gross and inexact"); Fisher v. Baker, 203 U.S. 174, 181 (1906) (dismissing writ of error as improper proceeding because "[tihe proceeding is in habeas corpus, and is a civil and not a criminal proceeding"). 3. See, e.g., PHILLIP E. JOHNsON, CRIMINAL LAw (4th ed. 1990); SANFORD H. KADISH & STEPHEN J. SCHULHOFER, CRIMINAL LAW AND ITS PROcESSES (5th ed. 1989); WAYNE R. LAFAVE, MODERN CRIMINAL LAW (2d ed. 1988). But see JOSEPH GOLDSTEIN ET AL., CRIMINAL LAW: THEORY AND PROCESS 253-317 (1974) (actually posing problem of distinguishing between civil and criminal cases). See generally GLANVILLE WILLIAMS, TEXTBOOK OF CRIMINAL LAW § 8, at 20 (Ist ed. 1978) (mentioning that "[t]o some extent the civil law shares with the criminal law the aim of controlling conduct"). The literature on civil procedure rarely addresses the civil law's increasing concern with criminal conduct. An illuminating exception is ROBERT M. COVER ET AL., PROCEDURE (1988) (outlining fundamental questions of procedure that span civil, criminal, and administrative cases). 4. See JOHN P. HEINz & EDWARD 0. LAUMANN, CHICAGO LAWYERS: THE SOCIAL STRUCTURE OF THE BAR 43 (1982) (explaining that criminal law is most specialized of all legal fields when measured by concentration of cases in attorneys' caseloads). 5. Compare FED. R. Clv. P. 1 ("These rules govern the procedure in the United States district courts in all suits of a civil nature whether cognizable as cases at law or in equity or in admiralty... :) with FED. R. CRIM. P. 1 ("These rules govern the procedure in all criminal proceedings in the courts of the United States ...."). 6. See, e.g., N.Y. JUD. LAW § 2 (Consol. 1983) (providing that "[t]he civil court of the city of New York and the criminal court of the city of New York" are "court[s] of record"); N.Y. CRIM. PROC. LAW § 10.10 (Consol. 1986) ("The 'criminal courts' of this state are comprised of the superior courts and the local criminal courts."); N.Y. Civ. PRAC. L & R. § 106 (Consol. 1976) ("Where the violation of a right admits of both a civil and criminal prosecution, the one is not merged in the other."). 7. United States v. Halper, 490 U.S. 435 (1989). 8. United States v. 40 Moon Hill Road, 884 F.2d