White Collar Alert

It appears that not even this weekend’s colossal winter snowstorm could deter the Supreme Court from its business, today deciding several criminal cases on its docket.  In addition to the landmark Montgomery v. Louisiana decision, which gives retroactive effect to Miller v. Alabama and will have massive implications for those juvenile defendants serving life sentences for murder who may now seek resentencing or parole, the Court affirmed the convictions of Michael Musacchio, a former logistics industry executive who was convicted of improperly penetrating his past employer’s computer system with help from another former employee.

Musacchio had been president of Exel Transportation Services until he resigned in 2004. In 2005, he started a rival logistics company, Total Transportation Services, and soon thereafter hired Roy Brown, Exel’s former chief of information-technology.  Using a password Brown supplied, both Brown and Musacchio continued to access Exel’s computer system until 2006.

In 2010, a grand jury indicted Musacchio for computer fraud under 18 U.S.C. § 1030(a)(2)(C), which makes it illegal to “intentionally access[ ] a computer without authorization or [to] exceed[ ] authorized access,” and in doing so “obtain[ ]… information from any protected computer.” Id. (emphasis supplied).  Although initially charged under both statutorily provided theories of liability, the government’s superseding indictment limited both the conspiracy-based and substantive charges (Counts 1 and 2, respectively) to the cohorts’ unauthorized access to the Exel computer system.

At Musacchio’s 2012 jury trial, his counsel apparently overlooked that the general five-year federal statute of limitations (codified at 18 U.S.C. § 3282) might have barred Count 2, and so he raised no defense on that basis.  And, for the government’s part, it raised no objection to a clearly erroneous jury instruction that diverged from the indictment and the proposed instructions, and directed the jury to consider whether Musacchio had both “intentionally accessed a computer without authorization” and “exceeded authorized access.” Musacchio v. United States, No. 14-1095, 577 U.S. ___, slip op. at 3 (filed Jan. 25, 2016) (emphasis supplied).  Little did the parties likely know that these omissions would catapult Musacchio’s case all the way to the High Court.

After the Fifth Circuit affirmed Musacchio’s sentence of sixty months’ incarceration, the Supreme Court granted certiorari to (1) determine the proper standard of review of a sufficiency-of-the-evidence claim where the court erroneously instructs the jury and adds an element to the offense as charged, and (2) determine whether Section 3282’s statute of limitations was a nonwaivable defense that could be asserted for the first time on appeal.

Unfortunately for Musacchio, he fared no better at the Court, but his case does provide guidance to practitioners.

Unsurprising to those who have closely followed the Court’s sufficiency standard-of-review jurisprudence, the Supreme Court, in a unanimous opinion authored by Justice Thomas, reaffirmed its longstanding precedent (see, for example, here, here, or here), which requires an appellate court to consider simply whether the evidence presented by the prosecution at trial, when viewed in the light most favorable to the government, warranted the mere submission of the case to the jury.  Musacchio clarifies this well-established standard to hold that a sufficiency claim must be viewed against the crimes charged, not an erroneously heightened command in a jury instruction.  As the Court noted, “[a]ll that a defendant is entitled to on [sufficiency review] is for the court to make a ‘legal’ determination whether the evidence was strong enough to reach a jury at all.”

More interesting was the Court’s resolution of the question whether a defendant may successfully raise a statute-of-limitations defense under Section 3282(a) for the first time on appeal.  Section 3282(a) provides a general five-year statute of limitations during which a federal criminal defendant must be charged.  Musacchio argued, unsuccessfully, that Section 3282(a)’s statute of limitations provided a nonwaivable limit on federal subject-matter jurisdiction.

Alas, not so, said Justice Thomas for the Court.  Applying traditional principles of statutory interpretation, the Court concluded that the text, context, and relevant historical treatment of Section 3282 counseled that it was not a jurisdictional limit, but instead “becomes part of the case only if the defendant presses it in the district court.”  The Court further concluded that where counsel does not timely raise a statute-of-limitations defense, the district court’s “failure” to enforce an unraised limitations defense under Section 3282 cannot be considered plain error, since without a defendant’s assertion of that defense at trial, no error exists on appeal to be corrected.

What does Musacchio mean for defense counsel in the white-collar case?  Apart from its relatively straightforward clarification of the sufficiency standard, it should be obvious by now that counsel who believe that their client may have a viable Section 3282 statute-of-limitations defense must ensure he or she raises that defense in the district court in the first instance.  As with other non-jurisdictional affirmative defenses, the Supreme Court has now held that the district court must engage in the burden-shifting test employed in other contexts (for example, self-defense doctrine), in assessing whether the government met the applicable statute of limitations in bringing charges.  Counsel must be aware that raising such a defense for the first time on appeal simply will not do.