Although the proverbial writing had been on the wall prior to the release of the Yates memo, the formality and publicity with which the memo was released prompted a debate among lawyers, journalists, corporate employees, and others regarding the real versus perceived practical effects of the memo. Many also pondered aloud and in writing whether, when, and to what extent the DOJ would answer what many viewed as unanswered or, perhaps, unanswerable questions. Indeed, the memo’s conclusion seemingly implies that the debating and the pondering were anticipated. In its conclusion, the memo states that while “[t]he Department makes these changes recognizing the challenges they may present[,] [i]n the months ahead, the Department will be working with components to turn these policies into everyday practice.” Memorandum from Sally Quillian Yates, Deputy Att’y Gen., U.S. Dep’t of Justice, Individual Accountability for Corporate Wrongdoing (Sept. 9, 2015). As discussed below, recent statements by DOJ personnel, including the head of the DOJ’s Criminal Division, Leslie Caldwell, reveal that questions abound, even within the DOJ.
Not surprisingly, two of the most important and consequential questions about the practical effects of the Yates memo stem from some of the memo’s most controversial pronouncements: (1) increased focus on prosecuting individuals and (2) the requirement that corporations provide all relevant facts about individuals within the corporation before receiving any cooperation credit. The latter mandates that corporations must “completely disclose” to the DOJ “all relevant facts” about “all individuals involved in or responsible for the misconduct at issue” before the corporation itself even becomes “eligible for consideration” to receive any cooperation credit from DOJ. In light of this requirement, how will a corporation or the DOJ determine when all relevant facts about all involved or responsible individuals have been completely disclosed? According to the Wall Street Journal, a DOJ spokesperson stated that the DOJ’s Fraud Section “now requires that cooperating companies confirm to us that they have, in fact, turned over all non-privileged information about individuals.” Stephen Dockery, “U.S. Justice Dept to Require Certification of Cooperation in Investigations,”[login required] Wall St. J., Feb. 4, 2016.
While there have been reports that Assistant Attorney General Leslie Caldwell refuted this formal “certification” requirement at the ABA Institute on White Collar crime in March of this year, there appear to be no clear answers as to the formula for determining when “all” information has been disclosed or what procedures must be undertaken by a corporation before the corporation may comfortably make such a representation to the government. See Adam Dobrik, “Caldwell: Companies do not have to certify their full cooperation,” Global Investigations Rev., Mar. 4, 2016.
Nevertheless, even absent a formal certification requirement, some individual or individuals within the corporation being investigated will have to make statements sufficient to satisfy the DOJ that all relevant information has been disclosed. This leads to even more questions. Will “certifying” individuals be subject to criminal liability under 18 U.S.C. § 1001 for making a false statement to the government by certifying that the company has disclosed all relevant facts if the government determines that it has not? If so, will the corporation itself be prosecuted for the alleged false statement, even if the corporation is cleared of all other alleged wrongdoing? See, e.g., United States v. Schulte, 741 F.3d 1141 (10th Cir. 2014) (individual defendant’s conviction for making false statements to Food and Drug Administration upheld even though the defendant ultimately was acquitted on all other charges). Might the individual, the corporation, or both risk prosecution under 18 U.S.C. § 371 for conspiring to impair or obstruct a government investigation?
For lawyers involved in mass torts litigation, a particularly important question is how a pending criminal or civil government investigation or prosecution affects discovery in civil cases, especially where staying the civil action is not possible or preferred. Will corporate employees be less likely to agree to testify in civil cases as fact witnesses or corporate representatives if they know they ultimately may be a defendant in a criminal prosecution? If the corporate witness invokes his or her Fifth Amendment privilege, will that lead to a negative inference in civil cases in some jurisdictions?
Although it may true that the Yates memo has had little effect on mass torts litigation to date, it is doubtful this will remain the case once all of the memo’s policy positions are fully implemented, assuming they are. The pre–Yates memo newsletter article cited above cautioned:
For attorneys involved in pharmaceutical, medical device, and biotechnology cases, the lines between civil litigation and white-collar criminal law have increasingly become blurred. The civil lawyer who does not, at a minimum, consider potential criminal implications of a seemingly routine civil lawsuit may do so to the client’s—and the lawyer’s—detriment.
While this was important in a pre–Yates memo world, it is vital in a post–Yates memo world.
Keywords: mass torts litigation, Individual Accountability for Corporate Wrongdoing, Yates memo