High Court Quibbles Over Definition of ‘Proceeds’

Most decisions issued by the United States Supreme Court include a majority opinion, supported by at least five of the court’s justices (assuming full participation by the court’s nine justices).  Yet, occasionally, the court is fractured, with no five justices agreeing on a single rationale for disposing of the case.  In those situations, as cited in Grutter v. Bollinger, “the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.” 

This proposition is well-established and typically is applied in a later case when the court is determining the precedential effect of a prior case decided without a majority opinion.  In a recent decision, United States v. Santos, involving the interpretation of the word “proceeds” in the federal money-laundering statute, however, Justice Antonin Scalia took the unusual step of expressing his view regarding the precedential effect of the very case the court was deciding.

In the penultimate paragraph of his plurality opinion that was joined by Justices David Souter and Ruth Bader Ginsburg, Scalia noted, “We think it appropriate to add a word concerning the stare decisis effect of Justice Stevens’ opinion.  Since his vote is necessary to our judgment, and since his opinion rests upon the narrower ground, the Court’s holding is limited accordingly.”  So far, no problem.  But then Scalia went on to critique Justice John Paul Stevens’ “speculations,” which, according to Scalia, “address a case that is not before him, are the purest of dicta, and form no part of today’s holding.”  Id.  Not done yet, he concluded with a pointed warning to counsel in later cases that, while they may argue that Stevens’ view in Santos was the holding of the court, Stevens’ view was expressly rejected by a majority of the court.

The issue thus joined, Stevens struck back.  Using Scalia’s own words — “the purest of dicta” — to describe Scalia’s opinion regarding the effect of Stevens’ opinion, Stevens explained the actual basis for the result he reached, one not based on speculations.  Not wanting to be left out, Justice Samuel Alito, in a dissent joined by three other justices, noted that he agreed with some of Stevens’ reasoning but not all of it.  And, in a riposte to Scalia, Alito noted in a footnote, “In light of the plurality opinion’s discussion of ‘the stare decisis effect of Justice Stevens’ opinion,’ it must be noted that five Justices agree with the position taken by Justice Stevens on the matter discussed in the preceding sentence of the text.”

Good luck to practitioners and lower court judges in the many cases to come where “proceeds” of money laundering are at issue and the Santos decision is the precedent (whatever that precedent may be) most on point.

This posting is intended only to inform, not to provide legal advice; and readers should seek professional advice for specific applications of the information.

Bruce P. Merenstein
Schnader Harrison Segal & Lewis LLP
www.schnader.com

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