Southern Union Company v. United States: Criminal Fines Implicate the Sixth Amendment Right to Jury Trial

The Supreme Court recently made it more difficult for judges to impose hefty criminal fines on corporate defendants, and Wall Street has the Sixth Amendment to thank.

In Southern Union Company v. United States, the Court held that the imposition of criminal fines invokes the Sixth Amendment’s right to a jury trial. Therefore, any fact that would determine a criminal fine must be found by the jury and proven beyond a reasonable doubt.

The Southern Union case involved environmental violations of the Resource Conservation and Recovery Act of 1976 (RCRA). Southern Union Company was convicted by a jury in federal court on one count of violating the RCRA for having knowingly stored liquid mercury without a permit at a subsidiary’s facility. Violations of the RCRA are punishable by a fine of not more than $50,000 for each day of violation.

At sentencing, the probation office calculated a maximum fine of $38.1 million, on the basis that Southern Union violated the RCRA for each of the 762 days from September 19, 2002, through October 19, 2004. Southern Union argued that imposing any fine greater than the 1-day penalty of $50,000 would be unconstitutional under Apprendi v. New Jersey, 530 U.S. 466 (2000).

In Apprendi v. New Jersey, the Supreme Court ruled that the Sixth Amendment required that any fact, other than a prior conviction, which increases a potential jail sentence beyond the statutory maximum “must be submitted to a jury, and proved beyond a reasonable doubt.” In the current case, the Supreme Court was asked to decide whether the same standard applied to criminal fines. 

The Court held that Apprendi’s “core concern” with “reserv[ing] to the jury the determination of facts that warrant punishment for a specific statutory offense” applied “whether the sentence is a criminal fine or imprisonment or death.”

In so ruling, the Supreme Court rejected the government’s arguments that applying Apprendi to criminal fines would prohibit lawmakers from enacting statutes that tie the amount of a fine to a defendant’s culpability. As the Supreme Court highlighted, “Legislatures are free to enact such statutes, so long as the statutes are administered in conformance with the Sixth Amendment.” The Supreme Court was also not persuaded by the government’s argument that requiring juries to determine facts related to fines will cause confusion, prejudice defendants, or be impractical.

However, the Court did point out that the Sixth Amendment right to jury trial is not implicated in every situation. As the majority explained, “Where a fine is so insubstantial that the underlying offense is considered ‘petty’ the Sixth Amendment right of jury trial is not triggered and no Apprendi issue arises.” However, the Court was quick to point out that “not all fines are insubstantial, and not all offenses punishable by fines are petty.”

While most criminal charges against corporations never make it to the courtroom, many more companies are now taking the gamble, particularly in cases arising out of the financial crisis where the government is having difficulty securing convictions. In light of Southern Union, it appears corporations could have even more leverage, as prosecutors will also have to build a case to support any monetary fines.