Double jeopardy protection from civil sanctions after Hudson v. United States.

• Author: Melenyzer, Lisa

Hudson v. United States, 118 S. Ct 488 (1997).

1. INTRODUCTION

   In 1989, the Office of the Comptroller of Currency ("OCC"), a federal administrative agency, imposed monetary penalties and occupational debarment on three bank officials from Oklahoma for violating several federal banking statutes and regulations.(1) The officials were later indicted on criminal charges arising from the same conduct, and subsequently moved to dismiss the criminal charges, claiming that the Double Jeopardy Clause of the Fifth Amendment protected them from being punished in a second proceeding.(2) A United States District Court dismissed the indictments,(3) but the Tenth Circuit Court of Appeals reversed and reinstated the indictments, relying on the double jeopardy test set forth in United States v. Halper, and finding that the actual fines imposed by the OCC in the civil proceeding were not so grossly disproportionate to the costs of the Government as to constitute punishment under the Court's double jeopardy standard.(4)

   The Supreme Court affirmed the decision of the Tenth Circuit, holding that the civil sanctions imposed on the bankers were not "criminal punishment" in the sense required to trigger the protection of the Double Jeopardy Clause.(5) In doing so, the protection of the Double Jeopardy Clause.(5) In doing so, however, the Court "disavow[ed] the method of analysis used in United States v. Halper and reaffirm[ed] the previously established rule exemplified in United States v. Ward."(6)

   This Note addresses the extent to which an individual may hope to be granted double jeopardy protection from civil penalties assessed by the State. Part II outlines some basic principles underlying the double jeopardy doctrine, and the development of the doctrine through the case law. Part III describes the facts and procedural history of the Hudson case. Part IV summarizes the opinions of the Court in the Hudson case, and Part V concludes with some thoughts on the implications of the Hudson decision for the interests protected by the Double Jeopardy Clause.

2. BACKGROUND

   1. THE FUNDAMENTALS OF THE DOUBLE JEOPARDY DOCTRINE

      The Double Jeopardy Clause of the Fifth Amendment states that no person shall "be subject or the same offence to be twice put in jeopardy of life or limb."(7) The philosophy underlying the Clause is that "the State with all its resources and power should not be allowed to make repeated attempts to convict an individual for an alleged offense, thereby subjecting him to embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety and insecurity."(8) Because double jeopardy protection was thus intended to protect the individual from the tyranny and power of the government, it does not protect individuals from private suits brought by non-government parties.

      The Supreme Court has recognized that the Double Jeopardy Clause protects individuals from being criminally prosecuted more than once for the same offense.(9) Protection from subsequent or "successive" criminal prosecutions extends to any party who has already been the subject of a criminal prosecution for the same offense, regardless of the result of the first criminal prosecution.(10) This protection is termed protection from "multiple prosecutions."

      The Court has also concluded that the Double Jeopardy Clause protects individuals from the imposition of "multiple punishments' for the same offense.(11) A constitutional prohibition on multiple punishments suggests that civil sanctions imposed by the government (as well as criminal sanctions) are subject to the Double Jeopardy Clause.(12) However, there is dissension on this point on the Court--Justices Scalia and Thomas have criticized the multiple punishment doctrine.(13) Other scholars have noted that the multiple punishment doctrine is problematic from a textual perspective(14) and based on the legislative history surrounding the ratification of the Constitution.(15)

      The idea that the Double Jeopardy Clause protects against multiple punishments originated in Ex Parte Lange, in which the Supreme Court held that "[i]f there is anything settled in the jurisprudence of England and America, it is that no man can be twice lawfully punished for the same offence."(16) Based on the facts of the case, however, critics have found fault with using Ex Parte Lange as foundation for a double jeopardy doctrine against multiple punishments, finding that justification for the resolution of the case more reasonably evolved from the Due Process Clause of the Fifth Amendment.(17) However, since Ex Parte Lange, the Supreme Court has stated repeatedly that double jeopardy protection extends to both successive criminal prosecutions and other successive punishments.(18)

      Arguing that double jeopardy protection prohibits only multiple prosecutions, and not multiple punishments, Justice Scalia noted in Kurth Ranch that the Court has never found double jeopardy an impediment to imposing multiple punishments in strictly criminal proceedings.(19) He concluded that government-imposed punishments are adequately controlled by other constitutional provisions; for example, "the Due Process Clause(20) keeps punishment within the bounds established by the legislature, and the Cruel and Unusual Punishments and Excessive Fines Clauses(21) place substantive limits upon what those legislative bounds may be."(22)

      Until 1989, the Supreme Court generally ignored the multiple punishment doctrine, relying chiefly on the multiple prosecution doctrine for its double jeopardy analysis(23) While the Court did consider that imposition of a civil sanction could be barred by the Double Jeopardy Clause, it did so within the analytical framework that the civil sanction imposed was not "essentially civil" but "essentially criminal," and thus constituted an illegal second criminal prosecution.(24) Not until the late 1980's did the Court specifically invoke the prohibition against multiple punishments as an independent constitutional basis for a double jeopardy claim.(25)

   2. DOUBLE JEOPARDY DOCTRINE: FOCUSING ON THE PROBLEM OF "MULTIPLE PROSECUTIONS"

      Prior to United States v. Halper,(26) the Supreme Court consistently used a statutory construction test to determine whether the imposition of a civil sanction could violate the Double Jeopardy Clause.(27) The statutory construction test was formulated in Helvering v. Mitchell in 1938.(28) In Mitchell, the Commissioner of Internal Revenue determined that Mitchell had attempted to fraudulently evade a tax payment, and notified Mitchell that he would be required to pay the deficiency as well as a penalty for committing tax fraud.(29) Mitchell had previously been criminally indicted for tax evasion arising from his failure to submit the alleged deficiency and had been acquitted of all charges.(30) Mitchell claimed protection under the Double Jeopardy Clause, contending that the penalty assessed by the Commissioner of Internal Revenue was a criminal penalty intended to punish him for the allegedly fraudulent act.(31)

      The Court indicated that "[u]nless this sanction was intended as punishment, so that the proceeding is essentially criminal," the Double Jeopardy Clause would provide no bar to the civil sanction.(32) The Court developed a statutory construction test to assess the "essential" nature of the civil sanction: if the sanction was provided for by a statute that was "civil in nature," then double jeopardy protection would not extend to the civil proceeding.(33) Using the statutory construction test, the Court determined that the penalty imposed by the Commissioner of Internal Revenue was "civil" and thus a permissible action under the Double Jeopardy Clause.(34) The Court also distinguished sanctions which were "remedial" in nature from those which were "punitive" in nature.(35)

      The Court confirmed the validity of the statutory construction test in United States ex rel. Marcus v. Hess in 1943.(36) The petitioners in Hess were electrical contractors who were indicted for defrauding the government through collusive bidding.(37) They pleaded nolo contendere(38) and were fined $54,000.(39) Following the filing of the criminal charges, a private plaintiff brought an action against the petitioners in the name of the United States under the civil prong of the False Claims Act.(40) A judgment was issued against the petitioners in the amount of $315,000.(41) The Third Circuit reversed the judgment, finding that the fraud in this case was not reached by the statute authorizing the qui tam action.(42) Upon review of the decision by the Court, the respondents (the contractors) attempted to support the judgment of the Third Circuit by introducing independent grounds for its decision, including double jeopardy grounds.(43) Using the Mitchell analysis, the Hess court found that the statute at issue was intended to be remedial, and was therefore civil in nature.(44) As the civil sanction was "civil in nature," it did not constitute a second criminal prosecution, and therefore the respondents were afforded no protection under the Double Jeopardy Clause.(45) The Court also noted that while the penalty imposed by the False Claims Act(46) might exceed the costs to the government in a specific case, the civil remedy under the False Claims Act "does not lose the quality of a civil action because more than the precise amount of so-called actual damage is recovered."(47)

      Kennedy v. Mendoza-Martinez, decided in 1963, was not a double jeopardy case, but it played a major role in the development of the "civil sanction as punishment" doctrine by questioning whether statutes imposing forfeiture of citizenship were "essentially penal in character."(48) The Court recommended that when determining whether a particular sanction was "penal or regulatory" in nature,(49) the lower courts should consider:

      (1) whether the sanction involves an affirmative disability or restraint, (2) whether it has historically been...