© 2013 The Texas Lawbook.
By Toby Galloway and Chase Medling
Special Contributing Writers for The Texas Lawbook
(June 29) – A shotgun, a getaway car and a double homicide—how could a case with these facts affect your practice? Business attorneys and general counsels’ practices are rarely affected by a case involving a double homicide, but two weeks ago, the Supreme Court handed down a decision that has received very little attention – a decision that could impact scores of SEC and Department of Justice prosecutions.
Initially, Salinas was touted as the Supreme Court’s vehicle to decide whether a prosecutor could use a suspect’s noncustodial assertion of the Fifth Amendment as evidence of guilt. Instead, a plurality of the Court ruled that remaining silent was not enough to even claim the privilege to remain silent in a noncustodial setting. But how will this ruling affect white-collar defense?
Salinas looked down at the floor, shuffled his feet, bit his bottom teeth, clenched his hands and began to tighten up. Prosecutors argued at trial that Salinas’s silence was evidence of his guilt. The jury convicted Salinas, and he received a 20-year sentence for the murders.
The plurality opinion (Justices Alito, Kennedy and Roberts) held that before Salinas could rely on the privilege against self-incrimination, “he was required to invoke it.” The plurality balanced the Government’s need to be placed on notice when a witness intends to rely on a privilege so that it may either (1) argue that the testimony would not be self-incrimination, or (2) cure any potential self-incrimination through a grant of immunity. The plurality did not articulate what it means to expressly invoke the privilege against self-incrimination.
Justices Thomas and Scalia concurred on narrower grounds, arguing that Salinas’s claims would fail even if he had invoked the privilege. The prosecutor’s noncustodial comments, according to the concurring opinion, did not compel Salinas to give self-incriminating testimony. Thomas and Scalia did reach the intended issue—that a defendant’s noncustodial invocation of his Fifth Amendment privilege can be used against him.
In their dissent, Justices Breyer, Ginsburg, Sotomayor and Kagan cited Miranda v. Arizona’s proposition that “the prosecution may not…use at trial the fact that [a defendant] stood mute or claimed his privilege in the face of accusation.”
The dissent argued that “to allow comment on silence directly or indirectly can compel an individual to act as a witness against himself”—exactly what the Fifth Amendment forbids. The circumstances surrounding Salinas’s prosecution — including the question about whether the shotgun was from Salinas’s home — “give rise to a reasonable inference that Salinas’ silence derived from an exercise of his Fifth Amendment rights.”
Salinas is the latest in a long line of cases, both criminal and civil, discussing when the privilege is invoked. The Fifth Amendment’s right against self-incrimination is properly invoked “where the witness has reasonable cause to apprehend danger from a direct answer.” Hoffman v. U.S., 341 U.S. 479, 486 (1951). The reasonableness of the witness’s silence is a question for the Court. Id.
Assuming the privilege has been properly invoked, the prosecution in a criminal case cannot use the defendant’s silence against him. On the other hand, in the civil arena, invocation of the privilege against self-incrimination can lead to an adverse inference from the defendant’s silence. Baxter v. Palmigiano, 425 U.S. 308, 320 (1976). Therefore, the privilege has historically been a shield in criminal proceedings, but a sword in civil cases.
The holding in Salinas could have serious consequences for white-collar defense.
White-collar defense attorneys must first advise their clients that silence to all or part of a government official or police officer’s questioning will not invoke Fifth Amendment protection. If a client intends to invoke the privilege, she must clearly and unequivocally say so.
Now there is an embedded Catch-22. First, answering some questions and then refusing to answer others is more dangerous than refusing to talk at all—Salinas was complicit in answering the police officer’s questions before clamming up at the mention of his shotgun.
Regardless of how non-confrontational initial questioning may be, the sudden insertion of a penetrating, guilt-seeking question could be a fatal trap for the unwary. But if silence can also be used as evidence of guilt, there is no fail-safe strategy, especially since the Supreme Court has yet to determine whether a noncustodial invocation of the Fifth Amendment’s privilege can be used as evidence of guilt.
Refusing to talk to a government official and then directing the questions to an attorney may be used as evidence of guilt under Salinas.
Consider the following scenario. The SEC cold-calls an individual for a voluntary interview about his trading activities. This is hardly far-fetched: The SEC routinely does this when investigating insider trading. The Commission’s staff will call the person, ask to speak to him, but also advise him that he is under no obligation to answer any questions.
What if the person volunteers some information, but goes silent when asked whether he traded on the basis of material nonpublic information in purchasing shares of ABC Corp.?
Under Salinas, not only could that silence lead to an adverse inference in the SEC’s civil case, but it also could be used against the defendant in an ensuing criminal prosecution by the Department of Justice. The privilege would thus be converted from shield to sword in the criminal case.
Salinas becomes especially dangerous where large companies are concerned. For instance, the amicus brief of the National Association of Criminal Defense Lawyers argues that white-collar litigation frequently involves sophisticated entities and individuals with high levels of business acumen. For corporate defendants and high-profile cases, it could mean weeks and months of questions and communication before an arrest or indictment.
In these situations, on their attorney’s advice, individuals frequently decline to be interviewed. This could backfire if it could become evidence of guilt at trial.
It is also possible that the initial reaction to Salinas is over-hyped. The facts of Salinas are bare-boned. Shifting feet and downward glances may not be the proverbial “smoking gun” in complex securities litigation. It may not even be worth making the argument that silence equals guilt in many circumstances.
What if, in response to a question, an individual simply states she must refer the questions to counsel or to a company higher-up? Under Salinas, this could be used as evidence of guilt. But this would be remarkably weak evidence of guilt, especially if the response is company policy.
The cautious in-house attorney will go so far as to draft general company policy language instructing employees to respond that they need to talk to counsel or a higher-up. This could help rebut an argument that using such language and declining to answer questions is evidence of guilt.
In sum, the real effect of Salinas has yet to be seen. Until this recent Supreme Court ruling is fleshed out, it is best to err on the side of caution. Courts may treat silence as a sword to be used against defendants, rather than a shield to protect them.
Toby Galloway, the former lead trial counsel for the U.S. Securities and Exchange Commission, is a partner at Kelly Hart in Fort Worth. Chase Medling is a lawyer at Kelly Hart who focuses on complex commercial litigation.
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