Wade Davies: Don’t do anything fishy with your records
What does throwing fish overboard have to do with business in Knoxville?
The U.S. Supreme Court this year took up the case of Yates v. United States in which commercial fisherman John L. Yates had been tried and convicted of obstruction of justice for throwing fish overboard. The Supreme Court (with so much disagreement that there was no clear majority opinion) tells us that throwing fish overboard does not violate this particular provision of the Sarbanes-Oxley Act. However, federal obstruction laws still criminalize a wide range of activities relating to items you likely use and sometimes destroy every day in your office — documents and records.
Yates’ case wound up in the Supreme Court after his fishing boat was visited by a Florida Fish and Wildlife agent, who determined that Yates kept Grouper that were too small. The agent ordered Yates to bring his ship to port. Miraculously, when Yates arrived, the fish seemed to be bigger. Unfortunately, his crew admitted they’d thrown the small fish overboard.
Yates was initially convicted of violating 18 U.S.C. §1519. See if you can decipher the text that courts have struggled with:
“Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, … any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States …, or in relation to or contemplation of any such matter or case, shall be fined …, imprisoned not more than 20 years, or both.”
Congress passed this obstruction statute in the wake of the Enron scandal. The question in Yates was whether fish could be considered “tangible objects.” Because Congress was addressing corporate misconduct, fish were not found to be tangible objects. Most commentators concluded the Supreme Court had reasonably narrowed the scope of the statute. Not really.
Fish might not come within the statute, but all the documents and records you have in your office and on your computer probably do.
And, the government can prosecute someone for getting rid of documents or computer files even when there is no pending investigation. The statute criminalizes actions done in “contemplation of” a matter that is within the jurisdiction of any federal agency. That means an investigation does not have to exist — you just have to “contemplate” it. If you think about the number of federal agencies and how broad their jurisdiction is, it is hard to imagine a subject that isn’t within federal jurisdiction.
Does that mean that you can never throw anything away? No, but be careful not to do anything that could be interpreted as attempting to destroy evidence. Many people get in more trouble because of the way they react to an allegation than from the underlying conduct.
The best protection is to have a document retention policy and to follow it. If there is ever a hint of a claim of misconduct, get some help in executing a plan to suspend even scheduled document or email destruction.
Wade Davies is the managing partner of Ritchie, Dillard, Davies & Johnson, immediate past president of the Knoxville Bar Association and an adjunct professor at the University of Tennessee College of Law. This column is provided through the Knoxville Bar Association, a nonprofit corporation that offers continuing legal education and service to the community through programs such as the Lawyer Referral Service, speakers bureau and law-related education programs.