Friday, February 03, 2006

Legal Geek Stuff

There's a really fascinating crim law debate going on at the Volokh Conspiracy about this opinion. The facts:
In November 1987, Joni Goldyn opened checking and savings accounts with the Nevada Federal Credit Union (NFCU). Generous to a fault, NFCU also showered Goldyn with a $1,000 loan, a $500 line of credit attached to her checking account, a credit card and a “check guarantee card.” By January 1988, Goldyn had depleted the funds in her accounts, used up most of her $500 line of credit, and accumulated various bank fees, resulting in a net negative balance. But Goldyn continued writing checks, and merchants continued accepting them, presumably relying on her check guarantee card. More importantly, NFCU continued covering her checks, as the check guarantee card obligated it to do. As NFCU’s collection officer testified at trial: “If a member uses a check guarantee card with the check, the bank is liable, and we do have to honor those checks.” Goldyn was convicted by a jury of five counts of Drawing and Passing Checks with Insufficient Funds on Deposit, in violation of Nev. Rev. Stat. 205.130. Because she had previously been convicted of three felonies and one gross misdemeanor—all fraud related—she was sentenced as a habitual criminal to five life sentences. After twelve years in prison, she was released and placed on lifetime parole. 1 On federal habeas, Goldyn presents a simple argument: If the bank was obligated to cover them, then she can’t have written bad checks.
The issue: Kozinski ruled that the absence of evidence warranted federal habeas relief, because: 1) The check guarantee card was, as a line of credit, an implicit loan arrangement. Although the bank tried to cancel it, the letter was returned without a receipt and the account was never closed. 2) Because of this, she couldn't draw on an account with insufficient funds - any check she wrote without funds in the account was just taking out another loan for the amount of the check. 3) The statute only applied when "the person has insufficient money, property or credit" in the account, and as there was never insufficient money, she couldn't have violated the statute. However, Orin Kerr points out that there's a bit more to the story:
In the case of Garnick v. First Judicial Dist. Court, 81 Nev. 531, 407 P.2d 163 (1965), the Nevada Supreme Court casually read the statute and concluded stated that it had the following elements:

The elements of the crime of issuing a check against insufficient funds are (1) intent to defraud, (2) the making or passing of a check for the payment of money, and (3) without sufficient funds in the drawee institution to cover said check in full upon its presentation.

It's not clear how the Garnick court reached the conclusion that these were the elements of the statute. The Garnick opinion simply states these as the elements without analysis. Further, if you read the statute closely, the Garnick court's interpretation is different from what the statute actually says. That difference is really critical here: the text of the statute says that it applies when a person "has insufficient money, property or credit," and the Garnick court replaced "money, property or credit" with the somewhat narrower word "funds." The Nevada state prosecutors presumably read Garnick and treated the the Nevada Supreme Court's reading of the statute as binding.

Under Garnick, Goldyn seems to have satisfied the statute. In fact, the Nevada Supreme Court applied the Garnick standard to affirm Goldyn's conviction. Kozinski acknowledges that Goldyn was guilty under this standard (without citing Garnick), but concludes that this interpretation of Nevada state law is just wrong:
The state court correctly identified that Goldyn "did not have sufficient funds in her account to cover the checks." But standing alone, this is not a crime; the statute is only violated if she wrote the checks without sufficient funds "or credit." Nev. Rev. Stat. 205.130(1). Thus, Goldyn’s undisputed lack of funds is of no consequence if she had sufficient credit to cover the checks.
So was Kozinski fudging?
The debate is a bit brain-bleed inducing if you haven't studied law, but it's worth the read, particularly if you're interested in the split of power between federal and state courts.

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