Are We Entering a Brave New World of “Commandeering Fraud”? The Supreme Court Hears Argument in the Bridgegate Case.

A government official makes a putative public policy decision but actually does so for political reasons. No, I am not talking about the presidential impeachment saga. I am talking about Bridgegate, the 2014 scandal involving New Jersey Governor Chris Christie’s office, and the reconfiguration of lanes on the George Washington Bridge. Although traffic was diverted through a New Jersey town under the guise of a “traffic study,” the move allegedly was political payback to the town’s mayor for not endorsing Christie.

Background

The fallout from the Bridgegate scandal included federal fraud convictions for one of Christie’s deputies, Bridget Kelly, and two senior Port Authority officials. Kelly’s case has made its way to the Supreme Court (see my colleague Norm Anderson’s blog piece about the cert grant here), and the Court just recently heard oral argument. Read the transcript here.

The question presented: whether a public official defrauds the government of property by advancing a public policy reason for an official decision that is not her subjective “real reason.” At issue is the intersection of (1) garden-variety property fraud, like wire fraud under Section 1343, where someone takes money or property from the defrauded party; and (2) a special flavor of fraud not involving a loss of money or property—so-called “honest services” fraud under Section 1346, where the victim is deprived of “honest services” owed to it (e.g., a government official accepts a bribe in exchange for some taking some action).

The tricky part, as my colleague Jon Jeffress and I examined in depth last summer for NACDL’s The Champion, is that back in 1987 the Supreme Court held in McNally v. United States that Section 1343 requires a taking of money or property—which led to the enactment of Section 1346. Then, in 2010 in Skilling v. United States, the Court limited Section 1346’s honest-services provision to fraud involving bribes or kickbacks.

I say tricky part because Bridgegate didn’t involve bribes or kickbacks. As a result, the government had to squeeze the facts into a property case. But it didn’t really involve taking property in the traditional sense either. The government disagrees and so has the Third Circuit—the theory is that the officials used government property in an unauthorized manner for their own purposes.

The Hearing

At oral argument, Ms. Kelly’s counsel came out of the gate arguing that the government was making an end-run around McNally and Skilling. Counsel was quickly peppered with questions from Justices Ginsburg, Kagan, Alito, Kavanaugh, Sotomayor, and Chief Justice Roberts. All seemed to be concerned with scenarios where government resources were spent and a personal benefit was gained. Chief Justice Roberts asked about diverting traffic to benefit a politician’s hotel (a veiled reference to Trump International?). Justice Kagan asked about directing a snowplow driver to plow the mayor’s street first.

In response, counsel pointed to Section 1343’s requirement that the defendant “obtain[] money or property.” Kelly’s counsel distinguished a mayor ordering a city worker to plow his public street first (not property fraud) from having them plow his private driveway (property fraud). In Bridgegate, counsel argued, the officials merely reallocated lanes from one public use to another public use.

When the government stepped up, Justice Breyer wasted no time—for him, this is clearly honest-services fraud dressed up as a property case. At times, the Chief Justice, Justice Alito, Justice Kagan, and Justice Sotomayor joined in the skepticism. The government’s answer? This is “commandeering fraud” and the property “commandeered” was both the lanes and the additional work needed to implement the change. Commandeering fraud, according to the government, involves telling a lie to gain authority he or she doesn’t have, like tricking the worker into handing over the keys to the snowplow.

In the end, a majority of the Court appears to be quite skeptical that Bridgegate involved property fraud. And this would make sense—as Kelly’s counsel pointed out, the government’s interpretation would lead us into an era of potentially policing every questionable decision that may have some element of politics. And whatever one might think about what these officials did, there are political mechanisms in place to address this sort of issue: elections or, yes, even impeachment.

It is also conceivable that the Court will sidestep the merits. Justice Alito expressed his view that the jury never actually found that the official in question didn’t have authority, as required for the government’s theory—that there was no jury instruction on that issue. The government tried to point to instructions that it believes captured the concept sufficiently, but the district court rejected a specific instruction proposed by the defendants. One would hope, however, that the Court would not remand unless they thought the government’s theory held water as a matter of law.