Law Enforcement’s Lochner

When we contemplate the numerous challenges regulators and prosecutors face in identifying and redressing corporate and white-collar crime, constitutional criminal procedure is not usually high on the list. If anything, the constitutional doctrines that apply to the government’s interactions with corporations are decidedly pro-government; with few exceptions, they promote easy access to corporate information.

The aim of my latest article, Law Enforcement’s Lochner, is to explain why and how this ease of access may come under pressure. As I explain in the article, two distinct trends in constitutional jurisprudence threaten to undermine the government’s investigative powers: the U.S. Supreme Court’s evolving stance on Fourth Amendment privacy and its equally important take on corporate personhood.

An Equilibrium that Favors Government Investigators

Numerous doctrines favor the government’s collection of information from business entities. For example, the “private search” and “state action” doctrines treat most searches and interviews undertaken by the corporation’s lawyers and investigators as private activities. As a result, the government often enjoys the fruits of investigative activity that occurs outside the Fourth and Fifth Amendment’s purview.

This is not the only sub-constitutional rule that favors government actors. Consider the documentary subpoena, nominally issued by a grand jury but drafted and served by prosecutors. Although the Supreme Court has, at times, referred to the subpoena as a “constructive” Fourth Amendment search, its rules require only the weakest of government justifications to meet the Fourth Amendment’s reasonableness requirement.

And finally, consider the collective entity doctrine. Since the early 1900’s, the Supreme Court has excluded corporations and other business entities from protection under the Fifth Amendment’s privilege against self-incrimination on the grounds that the privilege extends only to natural persons. Moreover, later cases have made it clear that the privilege – even applied to natural persons – does not embrace a document’s content but only its act of production.

My aim here is not to urge courts to overturn these doctrines. Collectively, these rules have played an essential role in enabling regulators and prosecutors to identify and redress violations of law. But that’s also part of the problem. The recurring justification for these doctrines is predominantly instrumental: We must permit the government easy access because such access is necessary to ensure compliance with the law and accountability for violations.

In support of these decisions, courts tend to rely on and invoke a series of inconceivable fictions. For example, notwithstanding the judiciary’s flowery language about grand juries, no one really believes that a group of laypersons drafts or oversees the service of a documentary subpoena on a corporate target or witness. And no insider believes that a corporate investigation is uniformly “private,” particularly when a government prosecutor is already in the mix and pressing the corporation’s board for the company’s full cooperation. It is not surprising that these fictions – and the doctrines they purport to support – have periodically attracted the criticism of scholars and, in some limited instances, jurists.  It’s difficult to defend a doctrine that all but excludes judicial oversight over enforcement activities that might otherwise fall within constitutional criminal procedure’s umbrella were we to do away with these fictions.

Personal Privacy and Corporate Personhood

However one might feel about the government-friendly rules described above, there is good reason to question their endurance. Two doctrinal developments in constitutional law will likely alter the investigative framework the government has come to rely on when it initiates investigations of corporate wrongdoing.[1]

The first relates to the Supreme Court’s definition of a Fourth Amendment “search.” Within the past decade or so, the court has increasingly signaled its willingness to dismantle foundational rules for deciding whether or not a given government action constitutes a search as defined by the Fourth Amendment. For example, in its 2017 Carpenter decision, the court embraced a mosaic approach that measures a search by the degree and volume of information the government collects. Granted, the Carpenter majority stressed that this mode of analysis was intended only for newer technologies such as GPS-assisted cell site location information. But there is no reason to believe future litigants won’t test this boundary in the future. Further, even the fustiest old-fashioned search employs computer tools that might well persuade lower courts to engage in Carpenter-style analysis. If so, the government may find itself defending investigations that appear far too sprawling and government-directed to qualify either as “private” or as a non-search.

Meanwhile, as it recalibrates its definition of Fourth Amendment privacy, the Supreme Court has also embraced a more robust theory of corporate personhood. This new approach has yielded benefits, in the form of enhanced constitutional rights for corporate defendants. Corporations now enjoy rights of speech and religion, and part of the reason they enjoy those rights, the court tells us, is because of the people who voluntarily associate with the corporation. And as the court advises in its Hobby Lobby decision, that association may not be limited solely to corporate shareholders; at least in some instances, the company derives its personhood rights from a broader group of stakeholders such as its employees.

One need not be clairvoyant to recognize the profound implications these developments hold for the enforcement of administrative and white-collar crimes. The convergence of a line of cases that recognizes greater constitutional privacy and one that accords the corporation heightened personhood status spells trouble for government enforcers. Armed with newer, more protective constitutional rights, corporate litigants will have every reason to press a largely business-friendly judiciary to revisit investigatory doctrines that have long favored the government. Even if corporate litigants lose some of these battles, their attendant uncertainty and drag on limited resources will cause regulators and prosecutors to rethink enforcement strategies. However aggressively the government might say it wishes to fight corporate crime, it can only defend so many fronts at a time.

How the Government Responds – and Is This Tantamount to a Lochner?

Imagine courts became less willing to call private searches “private” and to treat grand jury subpoenas with kid gloves. Imagine further that courts reconsider the collective entity doctrine and evince some interest in applying a Fourth Amendment mosaic approach to certain wide-ranging investigations of corporate institutions and their managers. How might such a shift in corporate constitutional procedure affect the government’s effectiveness in identifying and redressing violations of law?

One can imagine a number of responses: The government might engage in a unilateral retreat, declining to pursue difficult-to-detect violations or corporate targets inclined to pursue constitutional defenses. It might also cast about for substitutes, seeking relief in more broadly written substantive laws (unlikely), or seek offsets such as higher sanctions (also implausible). Or it might attempt to make up for reduced access to information by offering corporations rewards for information. The problem with this final option is that the government already promises corporate offenders various benefits for voluntarily disclosing wrongdoing. Whatever the success of this “carrot” approach, the government cannot easily improve on this model if its access to information narrows and its leverage accordingly drops. In sum, none of these strategies is likely to solve the problems created by a shift in the constitutional baseline that governs corporate investigations. When the government’s access to information narrows, it becomes a less effective enforcer of its laws and regulations.

Can the world I describe above be accurately labeled as law enforcement’s Lochner? It’s difficult to answer that question in a blog post. On the one hand, this scenario differs from Lochner in several important ways. It does not feature the striking down of a particular statute. Nor does it involve heated exchanges over laissez faire economics or even judicial activism. Everyone expects the Supreme Court to rule on matters of Fourth and Fifth Amendment jurisprudence. Accordingly, to some, the Lochner analogy may seem inapt.

In other ways, however, the Lochnerism moniker is illuminating. If corporations employ their newly minted Fourth and Fifth Amendment rights to disable the government’s enforcement capability, their behavior will mirror previous weaponizations of constitutional rights. Moreover, the consequences of this procedural weaponization of rights will be just as problematic as the original Lochner. A world in which the government dramatically loses its enforcement capability is one in which consumers, employees, and shareholders become steadily worse off. Accordingly, those who find frustration with the current framework but who also fear an unintended foreclosure of government enforcement power should search for doctrinal and legislative solutions that would best prevent such a result. I hope to explore such solutions in future work.

ENDNOTE

[1] Much of this discussion presupposes a criminal law lens, but large portions of it can be generalized to civil enforcement investigations as well.

This post comes to us from Professor Miriam H. Baer at Brooklyn Law School. It is based on her recent paper, “Law Enforcement’s Lochner,” available here.

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