PUBLISHED:August 29, 2008

Second Circuit cites article by Professor Lisa Kern Griffin regarding compelled cooperation

Aug. 28, 2008 — The 2nd U.S. Circuit Court of Appeals has upheld the dismissal of fraud charges against 13 former partners and employees of accounting firm KPMG, citing the work of Professor Lisa Kern Griffin in its decision. A former federal prosecutor, Griffin is a scholar of federal criminal justice policy. She joined the Duke Law faculty earlier this year.

Written by Chief Judge Dennis Jacobs, the decision held that the government had interfered with the indicted employees’ Sixth Amendment right to counsel when it pressured KPMG to withhold payment of the defendants’ legal fees. In doing so, prosecutors were following U.S. Department of Justice guidelines, set out in the so-called “Thompson Memorandum,” that require corporations to cooperate and isolate or identify employee targets in order to avoid corporate prosecution.

According to the court's reasoning, the government's threat to indict the corporation compelled KPMG to cooperate with authorities by violating its policy of advancing employees legal fees, wrote Jacobs. In reaching this novel conclusion about the boundaries of state action, he quoted Griffin’s 2007 article, “Compelled Cooperation and the New Corporate Criminal Procedure,” (82 N.Y.U.L. Rev. at 367): “The threat of [ruinous indictment] brings significant pressure to bear on corporations, and that threat ‘provides a sufficient nexus’ between a private entity’s employment decision at the government’s behest and the government itself.’”