Is Sarbanes-Oxley Really This Fishy?

Next week the Supreme Court will hear arguments in Yates v. United States, a Sarbanes-Oxley anti-shredding case.  The Sarbanes-Oxley Act was enacted after the Enron scandal.  One of the provisions of the Act is commonly known as the “anti-shredding provision,” which criminalizes knowingly altering, destroying, mutilating, concealing, covering up, falsifying, or making a false entry in “any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration” of any federal matter.

Why am I mentioning Sarbanes-Oxley on a maritime blog?  Because Yates v. United States involves the federal government’s application of the “anti-shredding provision” to a commercial fisherman who directed his crewmen to throw undersized fish back into the sea, after receiving a civil citation and being told to bring the fish to dock to be destroyed.  That’s right…throwing fish back into the sea landed one fisherman in the Sarbanes-Oxley’s anti-shredding net.  Since then, the fisherman has lost his license, his boat, and his livelihood.

Take a look at this video from the National Association of Criminal Defense Lawyers (NACDL).  Really, take a look.  It’ll only take two minutes, and the video is really good:

Oral argument will be held on November 5, 2014.  So far, the fisherman has lost at the district court and the Eleventh Circuit.  Will the Supreme Court overturn?

For those who are interested in more reading, here are some links:

Brief of Petitioner, John L. Yates

Brief of Respondent, United States

Reply of Petitioner, John Yates

Mark Walsh, Fisherman convicted of violating Sarbanes-Oxley will be heard by the Supreme Court (published by the American Bar Association)

Tip of the hat to the NACDL, SCOTUSblog, and the ABA Journal.

11th Circuit Denies Arguments Against Jones Act Arbitration and Removal

The Eleventh Circuit issued an unpublished Jones Act decision discussing–albeit briefly–removal and arbitration.  Plaintiff argued against removal and arbitration.  The Eleventh Circuit disagreed, saying:

Trifinov also contends that his Jones Act claim cannot, as a matter of law, be removed to federal court.  We accept that Jones Act claims are not generally subject to removal.  But that Jones Act claims may be subjected to arbitration under the [United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards] is clear.  And the Convention authorizes the removal to federal court of claims “relat[ing] to an arbitration agreement or award falling under the Convention.”

Although we have not addressed the removal issue expressly, this Court has routinely compelled arbitration of Jones Act claims that have been removed under 9 U.S.C. § 205 when they relate to an arbitration agreement under the Convention.  And the few other courts that have decided the issue have concluded that removal of Jones Act claims is proper under the Convention.  We are persuaded that Trifinov’s Jones Act claim, which is governed by the Convention, was removed properly to federal court.

Trifinov v. MSC Mediterranean Shipping Co. SA, — F.A’ppx —- (11th Cir. 10/21/14).

Is Erik Prince Right? Should We Fight ISIS with Defense Contractors?

Is Erik Prince, the ex-Blackwater CEO, right?  Should the United States use Defense Base Act contractors to fight ISIS?  On his blog for Frontier Services Group, Mr. Prince wrote a post entitled, “Chairman’s Column – Thoughts on Countering ISIS,” which I’ve reproduced in full below:

As someone who spent many years operating in Iraq, Afghanistan, and other underdeveloped countries facing existential security threats, I was recently asked about my reaction to President Obama’s plan for fighting ISIS.

My immediate response is that the President’s current plan seems half-hearted at best. American air power has significant reach and accuracy, but ultimately will be unable to finish the job of digging ISIS out of any urban centers where they may seek shelter amongst the populace. Clearing operations ultimately fall to the foot soldier. The Iraqi army is demonstrably inept after billions spent on training and equipping them. Providing them more gear is a high risk endeavor. When ISIS first attacked, the Iraqi army folded, quickly providing ISIS with five heavy divisions of US weaponry (tanks, howitzers, armored vehicles and even helicopters) and three logistic support units’ worth of equipment and munitions.  The Kurds, once a lean and strong fighting force that routinely rebuffed Saddam’s forces, now find themselves outgunned, under-equipped, and overwhelmed. But they do fight, and they fight bravely. The Kurds’ biggest problem is the US State Department blocking them from selling their oil and from buying serious weaponry to protect their stronghold and act as a stabilizing force in the region.

Unfortunately, the DOD has mastered the most expensive ways to wage war, adding only very expensive options to the president’s quiver. Flying off of an aircraft carrier in the north end of the Persian Gulf may be a great demonstration of carrier air power suitable for a high tempo war, but the costs will quickly become staggering, far higher than they need be for what will quickly become a counter-insurgency effort.

As I explain in my book, “Civilian Warriors: The Inside Story of Blackwater and the Unsung Heroes of the War on Terror,” the private sector has long provided nations around the world with innovative solutions to national defense problems in a variety of ways, from the kinetic to the background logistical support necessary to keep militaries humming. If the old Blackwater team were still together, I have high confidence that a multi-brigade-size unit of veteran American contractors or a multi-national force could be rapidly assembled and deployed to be that necessary ground combat team. The professionals would be hired for their combat skills in armor, artillery, small unit tactics, special operations, logistics, and whatever else may be needed. A competent professional force of volunteers would serve as the pointy end of the spear and would serve to strengthen friendly but skittish indigenous forces.

The American people are clearly war-fatigued. Defeat was already snatched from the jaws of victory by the rapid pullout of US forces in 2009. Afghanistan will likely go the same way after never truly defeating the Taliban. Now the danger of a half-baked solution in Iraq is that if ISIS isn’t rightly annihilated, they will portray their survival as a victory over the forces of civilization; thus, there is no room for half-measures. The longer ISIS festers, the more chances it has for recruitment and the danger of the eventual return of radical jihadists to their western homelands. If the Administration cannot rally the political nerve or funding to send adequate active duty ground forces to answer the call, let the private sector finish the job.

Mr. Prince’s message is simple: defense contractors are the cheaper option for combating terrorists, both financially and politically.  Not surprising, those comments have garnered media attention.  For instance, the Washington Post published at article entitled, “Let contractors fight the Islamic State, Blackwater founder Erik Prince says.”

But is Mr. Prince right?  In my opinion, yes.  And, more likely than not, the United States agrees.  Consider the May 2013 Congressional Research Service report, “Department of Defense’s Use of Contractors to Support Military Operations: Background, Analysis, and Issues for Congress,” where the CRS did a good job of explaining the importance of defense contractors:

DOD has long relied on contractors to support overseas military operations.  Post-Cold War defense budget reductions resulted in significant cuts to military logistics and other support capabilities, requiring DOD to hire contractors to “fill the gap.”  Recent operations in Iraq and Afghanistan, and before that in the Balkans, have reflected this increased reliance on contractors supporting U.S. troops–both in terms of the number of contractors and the type of work being performed.  According to DOD data, contractors, on average, represented just over half of the force in the Balkans, Afghanistan, and Iraq.

As of March 2013, there were approximately 108,000 DOD contractor personnel in Afghanistan representing 62% of the total force.  Of this total, there were nearly 18,000 private security contractors, compared to 65,700 U.S. troops.  Over the last six fiscal years, DOD obligations for contracts performed in the Iraq and Afghanistan areas of operation were approximately $160 billion and exceeded total contract obligations of any other U.S. federal agency.

US Jury Convicted Blackwater Contractors of Manslaughter

Today, four United States contractors were found guilty of the manslaughter of a group of unarmed Iraqi civilians.  The contractors, all of whom were former Blackwater employees, were involved in the Nisour Square massacre that occurred in September 2007.  Seventeen Iraqis were killed and twenty were seriously injured.  Additional news coverage can be found through the following links:

Matt Apuzzo, Former Blackwater Guards Convicted in Iraq Shooting.

Dan Roberts, US jury convicts Blackwater guards in 2007 killing of Iraqi civilians.

Spencer Hsu, Victoria St. Martin and Keith Alexander, Four Blackwater guards found guilty in 2007 Iraq shootings of 31 unarmed civilians.

Ben Mathis-Lilley, Jury Convicts Four in 2007 Blackwater Iraq Massacre Case.