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Supreme Court Tosses Fla. Fisherman's Sarbanes-Oxley Conviction

By Christopher Coble, Esq. | Last updated on

In an explanation that may have seemed self-evident, the U.S. Supreme Court has clarified that dumping undersized red grouper overboard in an attempt to deceive fish and game officials is not the same as shredding financial documents to mislead auditors, regulators, and shareholders.

The Court reversed a ruling from the 11th U.S. Circuit Court of Appeals that held the Sarbanes-Oxley Act's prohibition on destruction or concealment of "any record, document, or tangible object" applied to commercial fishermen who threw undersized fish back in the Gulf of Mexico after inspection by National Marine Fisheries officers.

On the Hook

John Yates and two of his crew were fishing for red grouper in the Gulf of Mexico in the summer of 2007 when Officer Jones of the Florida Fish and Wildlife Commission performed a routine inspection of their haul. Officer Jones measured a total of 72 fish short of the federally-mandated 20 inches, cited Yates for the violation, and instructed him to set the fish aside to be re-inspected when the boat returned to port.

But upon re-inspection, Yates' fish posted longer measurements, and a member of the crew admitted to dumping the illegal fish over the side of the boat at Yates' instruction. Over two years later (a gap that may be evidence of how long it took to find some violation with which to charge him), Yates was indicted for "destroying, concealing, and covering up undersized fish to impede a federal investigation."

Yates was convicted of a federal felony and sentenced to 30 days behind bars plus three years of supervised release. He appealed his conviction, but it was upheld by the 11th Circuit. Yates then appealed to the U.S. Supreme Court.

Fishing for a White Collar Criminal

The federal law Yates was convicted of violating is 18 USC Section 1519, which outlaws tampering with or destroying "any record, document, or tangible object with the intent to impede, obstruct, or influence" a federal investigation.

Section 1519 is part of the Sarbanes-Oxley Act, which was enacted in the wake of the Enron scandal as an effort to curb corporate fraud. As such, it had yet to be applied to commercial fisherman trying to duck a fine or fishing license suspension.

Old Fish, New Fish

As quirky as the underlying facts are, the Supreme Court's decision came down to a fairly mundane bit of statutory interpretation: does a fish count as a "tangible object," or does that phrase really mean the kind of financial record-keeping that sneaky corporations would hide from regulators? The majority felt that including dumped red grouper in the definition would make "tangible object" refer to a limitless amount of things, and therefore reversed the 11th Circuit.

Justice Elena Kagan brought a little levity to the decision, citing Dr. Seuss in her dissent: "A fish is, of course, a discrete thing that possesses physical form. See generally Dr. Seuss, One Fish Two Fish Red Fish Blue Fish (1960)." As Dr. Seuss notes, there are all kinds of fish, and luckily for Yates, his trade of good fish for bad fish likely won't result in a prison sentence.

Yates v. United States: Decision by FindLaw

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