SCOTUS unanimously reverses "Bridgegate" convictions as involving conduct not covered by federal property fraud statute

The US Supreme Court handed down a unanimous opinion this morning in Kelly v. United States, No. 18-1059 (S. Ct. May 7, 2020)  (available here), the high-profile political fraud case often called "Bridgegate."  Here is how Justice Kagan's short opinion for the full Court gets started:

For four days in September 2013, traffic ground to a halt in Fort Lee, New Jersey.  The cause was an unannounced realignment of 12 toll lanes leading to the George Washington Bridge, an entryway into Manhattan administered by the Port Authority of New York and New Jersey.  For decades, three of those access lanes had been reserved during morning rush hour for commuters coming from the streets of Fort Lee. But on these four days — with predictable consequences — only a single lane was set aside.  The public officials who ordered that change claimed they were reducing the number of dedicated lanes to conduct a traffic study.  In fact, they did so for a political reason — to punish the mayor of Fort Lee for refusing to support the New Jersey Governor’s reelection bid.

Exposure of their behavior led to the criminal convictions we review here. The Government charged the responsible officials under the federal statutes prohibiting wire fraud and fraud on a federally funded program or entity.  See 18 U.S.C. §§1343, 666(a)(1)(A). Both those laws target fraudulent schemes for obtaining property.  See §1343 (barring fraudulent schemes “for obtaining money or property”); §666(a)(1)(A) (making it a crime to “obtain[] by fraud . . . property”).  The jury convicted the defendants, and the lower courts upheld the verdicts.

The question presented is whether the defendants committed property fraud.  The evidence the jury heard no doubt shows wrongdoing — deception, corruption, abuse of power. But the federal fraud statutes at issue do not criminalize all such conduct.  Under settled precedent, the officials could violate those laws only if an object of their dishonesty was to obtain the Port Authority’s money or property.  The Government contends it was, because the officials sought both to “commandeer” the Bridge’s access lanes and to divert the wage labor of the Port Authority employees used in that effort.  Tr. of Oral Arg. 58.  We disagree.  The realignment of the toll lanes was an exercise of regulatory power — something this Court has already held fails to meet the statutes’ property requirement.  And the employees’ labor was just the incidental cost of that regulation, rather than itself an object of the officials’ scheme.  We therefore reverse the convictions.

Some prior related posts:

• "Bridgegate" now a federal sentencing story after two former New Jersey officials convicted on all federal counts after lengthy jury deliberations
• Is the likely federal sentencing guideline range for "Bridgegate" defendants convicted last week at least 3 to 4 years in federal prison?
• You be the federal sentencing judge: how long a prison term for convicted "Bridgegate" defendants?
• Federal prosecutors seeking 3-year prison terms for "Bridgegate" defendants