United States v. Wells, 519 U.S. 482 (1997)

United States v. Wells

No. 95-1228

Argued November 4, 1996
Decided February 26, 1997
519 U.S. 482

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Syllabus

An indictment charged respondents with, inter alia, knowingly making false and "material" statements to a federally insured bank in violation of 18 U.S.C. § 1014. At the trial’s end, the District Court instructed the jury at the Government’s behest, that withholding a "material fact" made a statement or representation false, and that materiality of an allegedly false statement was for the judge, not the jury, to determine. The jury convicted respondents, the court treated their statements as material, and they appealed. This Court then decided, in United States v. Gaudin, 515 U.S. 506, that if materiality is an element of § 1011, it is a question for the jury. When the Eighth Circuit requested supplemental briefing on Gaudin’s applicability in this case, respondents argued that materiality is an element of § 1014 on which they were entitled to a jury’s determination; the Government argued, for the first time, that materiality is not an element under § 1014, so that no harm had been done when the trial judge dealt with the issue. The Eighth Circuit agreed with respondents, vacated their convictions and sentences, and remanded the case for a new trial.

Held:

1. Respondents’ preliminary arguments do not block this Court from reaching the question on which the writ of certiorari was granted. Although the Government proposed jury instructions to the effect that materiality is an element of § 1014, Federal Rule of Criminal Procedure 30 and the doctrines of "law of the case" and "invited error" do not prevent the Government from taking the contrary position here. Although the indictment charged respondents with submitting material false statements, the "law of the case" doctrine does not prevent the Government from arguing here that materiality is not an element of § 1014. While the Government failed to argue in its initial briefs submitted to the Court of Appeals that materiality is not an element of § 1014, it did so in its supplemental filings, and thus the "invited error" doctrine could not prevent the Government from taking the opposite position here. Pp. 487-489.

2. Materiality of falsehood is not an element of the crime of knowingly making a false statement to a federally insured bank under § 1014. Pp. 489-500.

(a) The falsehood’s materiality -- i.e., its "natural tendency to influence, or capa[bility] of influencing, the decision of the . . . body to which it was addressed," Kungys v. United States, 485 U.S. 759, 770 -- would not be an element of § 1014 under the first criterion in the statutory interpretation hierarchy, a natural reading of the full text, see United States v. American Trucking Assns., Inc., 310 U.S. 534, 542-543. The section’s text -- which criminalizes

knowingly mak[ing] any false statement or report . . . for the purpose of influencing in any way the action" of a federally insured bank "upon any application, advance, . . . commitment, or loan

-- nowhere says that a material fact must be the subject of the false statement or so much as mentions materiality. To the contrary, its terms cover "any" false statement that meets the statute’s other requirements, and the term "false statement" carries no general suggestion of influential significance, see e.g., Kungys, supra, at 781. Nor have respondents come close to showing that at common law the term "false statement" acquired any implication of materiality that came with it into § 1014. See, e.g., Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322. Finally, statutory history confirms the natural reading of § 1014. When Congress enacted U.S.C. § 1014, it consolidated into one section three prior provisions that had included an explicit materiality requirement and ten that did not, and Congress enacted other provisions that included express materiality requirements. The most likely inference is that Congress did not intend materiality to be an element of § 1014. United States v. Shabani, 513 U.S. 10, 13-14. In addition, Congress enacted § 1014 after Kay v. United States, 303 U.S. 1, which stands in the way of any assumption that Congress might have understood § 1014 to contain an implicit materiality requirement. Pp. 489-495.

(b) Respondents’ arguments for affirmance -- that Congress has ratified decisions holding materiality to be a § 1014 element by repeatedly amending the statute without rejecting those decisions; that the failure of the 1948 Reviser’s Note to § 1014 to mention the section’s omission of the materiality element contained in three of its thirteen predecessor statutes means that Congress must have overlooked the issue; that materiality must be read into the statute to avoid the improbability that Congress intended to impose substantial criminal penalties on relatively trivial or innocent conduct; and that the rule of lenity must be applied here -- are unavailing to change the straightforward reading of § 1014. Pp. 495-499.

(c) Since respondents’ further arguments -- that, because the instruction taking materiality from the jury probably left the impression that respondents’ statements as alleged were material, the instructions influenced the jury in passing on the falsity and purpose elements; and that, because the indictment alleged materiality, any ruling that materiality need not be shown in this case would impermissibly "amend" the indictment contrary to the Fifth Amendment -- were neither raised in respondents’ briefs before, nor passed on by, the Eighth Circuit, it is left to that court on remand to take up the propriety of raising them now and to address them if warranted. Pp. 499-500.

63 F.3d 745, vacated and remanded.

SOUTER, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and O’CONNOR, SCALIA, KENNEDY, THOMAS, GINSBURG, and BREYER, JJ., joined. STEVENS, J., filed a dissenting opinion, post, p. 500.