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We now know that Sarbanes-Oxley does not apply to fish . . .

While conducting an offshore inspection of a commercial fishing vessel in the Gulf of Mexico, a federal agent found that the ship’s catch contained undersized red grouper, in violation of federal conservation regulations. The officer instructed the ship’s captain, Mr. Yates, to keep the undersized fish segregated from the rest of the catch until the ship returned to port. After the officer departed, Yates instead told a crew member to throw the undersized fish overboard.

For this offense, Yates was charged with destroying, concealing, and covering up undersized fish to impede a federal investigation, in violation of 18 U. S. C. §1519. That section provides that a

person may be fined or imprisoned for up to 20 years if he “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence” a federal investigation.

At trial, Yates moved for a judgment of acquittal on the §1519 charge. Pointing to §1519’s origin as a provision of the Sarbanes-Oxley Act of 2002, a law designed to protect investors and restore trust in financial markets following the collapse of Enron Corporation, Yates argued that §1519’s reference to “tangible object” subsumes objects used to store information, such as computer hard drives, not fish. The District Court denied Yates’s motion, and a jury found him guilty of violating §1519. The Eleventh Circuit affirmed the conviction, concluding that §1519 applies to the destruction or concealment of fish because, as objects having physical form, fish fall within the dictionary definition of “tangible object.”

On appeal to the Supreme Court, the judgment was reversed.

The Supreme Court rejected the Government’s view that §1519 extends beyond the principal evil motivating its passage which was shredding of documents. The words of §1519, the Government argued, support reading the provision as a general ban on the spoliation of evidence, covering all physical items that might be relevant to any matter under federal investigation.

Yates urged a contextual reading of §1519, tying “tangible object” to the surrounding words, the placement of the provision within the Sarbanes-Oxley Act, and related provisions enacted at the same time. Yates maintained Section 1519  targets not all manner of evidence, but records, documents, and tangible objects used to preserve them, e.g., computers, servers, and other media on which information is stored.

Justices Ginsburg, Roberts, Breyer and Sotomayor agreed with Yates and rejected the Government’s unrestrained reading. “Tangible object” in §1519, the Justices concluded, is better read to cover only objects one can use to record or preserve information, not all objects in the physical world.  Justice Alito filed an opinion concurring in the judgment.


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