Jed S. Rakoff

In 2002, Rakoff declared the federal death penalty unconstitutional, writing that:

The best available evidence indicates that, on the one hand, innocent people are sentenced to death with materially greater frequency than was previously supposed and that, on the other hand, convincing proof of their innocence often does not emerge until long after their convictions. It is therefore fully foreseeable that in enforcing the death penalty a meaningful number of innocent people will be executed who otherwise would eventually be able to prove their innocence. It follows that implementation of the Federal Death Penalty Act not only deprives innocent people of a significant opportunity to prove their innocence, and thereby violates procedural due process, but also creates an undue risk of executing innocent people, and thereby violates substantive due process.

— Jed S. Rakoff, "United States v. Quinones, 205 F. Supp. 2d 256 (S.D.N.Y. 2002)". Scholar.google.com. Retrieved 2016-12-10.

His opinion was heralded by those opposed to capital punishment. The New York Times called the ruling "a cogent, powerful argument that all members of Congress - indeed, all Americans - should contemplate". However, the decision was subsequently reversed by the United States Court of Appeals for the Second Circuit, United States v. Quinones, 313 F.3d 49 (2d Cir. 2002).[29] Before he found the death penalty unconstitutional in 2002, Rakoff says he suspected his ruling would be reversed because he knew a majority of judges on the U.S. Second Circuit Court of Appeals would interpret a Supreme Court decision on the issue, Herrera v. Collins, differently than he did.[30]

Rakoff presided over a class action lawsuit against Texaco, brought under the Alien Tort Claims Act, by a class of Ecuadoreans, including several indigenous tribes, claiming that Texaco caused extensive destruction to the Oriente rainforest. He dismissed the case on forum non conveniens grounds, writing "While reserving final decision on this motion, the Court is tentatively of the view that, if Ecuador provides an adequate alternative forum, it is the proper place to try these cases, with the Peruvian plaintiffs afforded the alternative of a Peruvian forum if they so prefer. Indeed, the voluminous record before the Court demonstrates that these cases... have everything to do with Ecuador and very little to do with the United States. Moreover, the notion that a New York jury (which plaintiffs have demanded) applying Ecuadorian law (which likely governs the claims here made) could meaningfully assess what occurred in the Amazonian rainforests of Ecuador in the late 1960s and early 1970s is problematic on its face..." Judge Rakoff's decision was affirmed on appeal, 303 F.3d 470 (2d Cir. 2002).

Motorola Credit Corporation and Nokia brought suit against the Uzan family of Turkey. Judge Rakoff found that the Uzans perpetrated a multibillion-dollar fraud in connivance with various corporate defendants, involving the making of numerous false statements designed to induce Motorola and Nokia to extend the loans in issue, diluting the collateral pledged to secure the loans, and filing false criminal charges in Turkey against plaintiffs' senior executives, claiming that the executives engaged in "explicit and armed threat[s] to kill," blackmail, and kidnap members of the Uzan family. Rakoff awarded over $2.1 billion in compensatory damages and an equal amount in punitive damages. Motorola Credit Corp. v. Uzan, 274 F. Supp. 2d 481 (S.D.N.Y. 2003), affirmed, 388 F.3d 39 (2d Cir. 2004).

Rakoff presided over the Securities and Exchange Commission's accounting fraud suit against WorldCom, and, on July 7, 2003, approved a settlement between the SEC and Worldcom.[31] Rakoff appointed Richard C. Breeden, former Chair of the Securities and Exchange Commission, to serve as Corporate Monitor. Breeden actively involved himself in the management of the company, and prepared a report for Judge Rakoff, titled Restoring Trust, in which he proposed extensive corporate governance reforms, as part of an effort to "cast the new MCI into what he hoped would become a model of how shareholders should be protected and how companies should be run."[32] The reforms were implemented, and Rakoff later credited Breeden with "helping to transform a fraud-ridden company into an honest, well-governed, economically viable entity, MCI, Inc." WorldCom was purchased by Verizon in January 2006.

In November 2004, the Associated Press submitted a request under the Freedom of Information Act seeking unredacted transcripts of the Department of Defense's Combatant Status Review Tribunals' proceedings and related documentation.[33] In response, the Government invoked FOIA's Exemption 6, claiming that they redacted identifying information in order to protect the detainees' personal privacy. Rakoff's rulings highlighted what he viewed as the hypocrisy of the Government's position—as he wrote, "one might well wonder whether the detainees share the view that keeping their identities secret is in their own best interests"—and held that, in any case, the detainees had no reasonable expectation of privacy in the information at issue. He therefore ordered the Department of Defense to release the unredacted transcripts (including the detainees' names) and related documentation.[34] AP v. United States DOD, 2006 U.S. Dist. LEXIS 211, 410 F. Supp. 2d 147 (S.D.N.Y. Jan. 4, 2006).[35] AP v. United States DOD, 2006 U.S. Dist. LEXIS 2456 S.D.N.Y. January 23, 2006.[36]

The Department of Defense complied with the order, releasing the unredacted transcripts and related documents relating to those 317 detainees (of the approximately 500 at Guantanamo) who participated in Combatant Status Review Tribunals: "Forced by a federal court to lift the cloak of secrecy that had long shrouded the U.S. prison at Guantanamo Bay, Cuba, the Pentagon released thousands of pages of documents Friday containing names and other details for hundreds of detainees scooped up after the Sept. 11 attacks. The records provide the most comprehensive view to date of the Guantanamo prison population, as well as an exhaustive catalog of the U.S. government's charges against detainees who — in page after page of tribunal proceeding transcripts — protest their treatment and proclaim their innocence."[37][38][39][40][41][42][43][44]

After the Department of Defense complied with most of Rakoff's order, the Bush administration appealed the remainder of Rakoff's decision on May 5, 2008.[45] The United States Court of Appeals, Second Circuit reversed the remainder of Rakoff's decision, writing, in part, "We hold that the detainees and their family members do have a measurable privacy interest in their identifying information and that the AP has failed to show how the public interest would be served by disclosure of this information. We conclude that the identifying information is exempt from disclosure under the FOIA privacy exemptions."[46]

In 2005, Governor George Pataki of New York promulgated an executive order which allowed state-employed psychiatrists to effectuate the involuntary civil commitment—without any prior hearing or judicial determination—of sex offenders approaching the end of their prison terms. Under Pataki's rule, the state's psychiatrists simply had to deem such inmates "to be mentally ill and in need of involuntary care and treatment" and they were then committed to a mental institution without any pre-commitment due process.[47] In an opinion and order dated July 8, 2010, Judge Rakoff found that the government's actions "rather blatantly violated plaintiffs' constitutional rights."[48] Bailey v. Pataki, 722 F.Supp.2d 443, 445 (S.D.N.Y. July 6, 2010). As Rakoff explained: "…pre-deprivation procedural safeguards must be provided when it is feasible to do so—and there is nothing in the record here, taken most favorably to plaintiffs, that suggests any reason why it was infeasible for the plaintiffs here to be given pre-deprivation notice, pre-deprivation appointment of court-appointed physicians, or a pre-deprivation hearing. Indeed, it would have been the simplest thing in the world to have all the required procedures undertaken before a given plaintiff completed his prison term…" Bailey, 722 F.Supp.2d at 450. Rakoff's ruling was upheld by the Second Circuit, which agreed that an official in the defendants' position would have known that the process by which plaintiffs were committed did not satisfy basic constitutional requirements. Bailey v. Pataki, 708 F.3d 391 (2d Cir. 2013).[49]

A jury convicted Richard Adelson, as Chief Operating Officer and, (eventually) President of Impath, Inc.—a public company specializing in cancer diagnosis testing—of conspiracy, securities fraud, and three false filing counts that related to filings made in the latter half of 2002, but acquitted him of all seven counts that related to earlier filings. The gist of the indictment was that Adelson, joined a conspiracy, initially concocted by others, to materially overstate Impath's financial results, thereby artificially inflating the price of its stock. At sentencing, Judge Rakoff noted that "as a practical matter, a sentence of life imprisonment was effectively available here, for the statutory maximum sentence for the combined five counts of which Adelson had been convicted was 85 years, which, given his current age of 40, would have led to his imprisonment until the age of 125. Even the Government [prosecutors] blinked at this barbarity."[50] Adelson was actually sentenced by the court to three and a half years in prison and restitution of $50 million, $12 million of which would be paid by the immediate forfeiture of most of Adelson's assets and the rest by payments of 15% of his monthly gross income.

To put this matter in broad perspective, it is obvious that sentencing is the most sensitive, and difficult, task that any judge is called upon to undertake. Where the Sentencing Guidelines provide reasonable guidance, they are of considerable help to any judge in fashioning a sentence that is fair, just, and reasonable. But where, as here, the calculations under the guidelines have run so amok that they are patently absurd on their face, a Court is forced to place greater reliance on the more general considerations set forth in section 3553(a), as carefully applied to the particular circumstances of the case and of the human being who will bear the consequences.

— Jed S. Rakoff, United States v. Adelson Sentencing Memorandum

Judge Rakoff was affirmed on appeal by the Second Circuit. See United States v. Adelson, 441 F.Supp.2d 506 (S.D.N.Y.2006), affirmed, 37 Fed.Appx. 713 (2d Cir. 2007).

On August 3, 2009, Bank of America agreed to pay a $33 million fine, without admission or denial of charges, to the U.S. Securities and Exchange Commission (SEC) over the non-disclosure of an agreement to pay up to $5.8 billion of bonuses at Merrill.[51] Rakoff, in an unusual action, refused to approve the settlement on August 5[52] and then, on September 14, after at least one hearing, rejected the settlement outright and told the parties to prepare for trial to begin no later than February 1, 2010:[53]

Overall, indeed, the parties' submissions, when carefully read, leave the distinct impression that the proposed Consent Judgment was a contrivance designed to provide the S.E.C. with the facade of enforcement and the management of the Bank with a quick resolution of an embarrassing inquiry – all at the expense of the sole alleged victims, the shareholders. Even under the most deferential review, this proposed Consent Judgment cannot remotely be called fair . . . . The fine, if looked at from the standpoint of the violation, is also inadequate, in that $33 million is a trivial penalty for a false statement that materially infected a multi-billion-dollar merger. But since the fine is imposed, not on the individuals putatively responsible, but on the shareholders, it is worse than pointless: it further victimizes the victims. Oscar Wilde once famously said that a cynic is someone "who knows the price of everything and the value of nothing." Oscar Wilde, Lady Windermere's Fan (1892). The proposed Consent Judgment in this case suggests a rather cynical relationship between the parties: the S.E.C. gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger; the Bank's management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders, but also of the truth.

— Jed S. Rakoff, SEC v. Bank of America, 09 Civ. 6829 (JSR)

Judge Rakoff forced Bank of America and the SEC to come back with a 35-page statement about what happened—and a higher penalty.[54] He reluctantly approved the revised deal, calling the revised settlement "half-baked justice at best" and quoting "the great American philosopher Yogi Berra" in a ruling. Washington Post columnist Steven Pearlstein commented approvingly, "maybe Rakoff is exactly the kind of activist judge we need more of."[55]

The New York Times reported that "Taking a broad swipe at the Securities and Exchange Commission's practice of allowing companies to settle cases without admitting that they had done anything wrong, a federal judge on Monday rejected a $285 million settlement between Citigroup and the agency. The judge, Jed S. Rakoff of United States District Court in Manhattan, said that he could not determine whether the agency's settlement with Citigroup was "fair, reasonable, adequate and in the public interest", as required by law, because the agency had claimed, but had not proved, that Citigroup committed fraud." [56]

Rakoff wrote: "The SEC's long-standing policy—hallowed by history, but not by reason—of allowing defendants to enter into consent judgments without admitting or denying the underlying allegations, deprives the court of even the most minimal assurance that the substantial injunctive relief it is being asked to impose has any basis in fact." He added that the agency's settlement policy creates substantial potential for abuse because "[i]t asks the court to employ its power and assert its authority when it does not know the facts."[57]

The SEC appealed this decision to the U.S. Court of Appeals for the Second Circuit, which, in June 2014, vacated Rakoff's decision, saying the judge had overstepped his authority, and sending the case back to district court. Circuit Judge Rosemary Pooler, writing for the unanimous panel, "found that Rakoff has showed too little deference to the SEC in rejecting the pact."[58][59]

In 2010, Arizona enacted a so-called "ethnic studies" ban, which prevented students in predominantly Latino school districts from participating in a program that incorporated "historical and contemporary Mexican American contributions into coursework and classroom studies."[60] A group of plaintiffs challenged the law in federal court. When the case went up on appeal, Judge Rakoff, sitting by designation on the Ninth Circuit, wrote an opinion reversing the district court's grant of summary judgment for defendants and remanding plaintiffs' equal protection claim for trial. Arce v. Douglas, 793 F.3d 968, 977 (9th Cir. 2015).

Judge Rakoff wrote that parts of the Arizona law, while not facially discriminatory, raised constitutional issues. In particular, Rakoff cited legislative and other evidence of the laws' discriminatory purpose.[61] The case went to trial in July 2017.[62]

In 2012, Judge Rakoff presided over the landmark insider trading trial of Rajat Gupta, one of the most prominent business executives to be tried and convicted in recent decades. Gupta, the former managing partner of McKinsey, served as a director on the boards of many major American businesses, including Goldman Sachs and Procter & Gamble.

At trial, prosecutors showed that Gupta, at the height of the financial crisis, leaked information about Warren Buffett's $5 billion investment in Goldman Sachs to his friend, hedge fund billionaire Raj Rajaratnam. Indeed, within a minute of finishing a Goldman Sachs Board of Directors teleconference regarding the investment, Gupta phoned Rajaratnam at his Galleon Group office in New York. Minutes later Rajaratnam ordered his traders to buy as much as $40 million in Goldman Sachs stock.[63]

Mr. Gupta was found guilty on three counts of security fraud and one count of conspiracy. Judge Rakoff sentenced him to two years. In his order, the Judge wrote that "The heart of Mr. Gupta's offenses here, it bears repeating, is his egregious breach of trust." At sentencing, Judge Rakoff critiqued the sentencing guidelines, which base levels of punishment on the amount of illicit trading gains accrued in an insider trading case. Since the underlying crime in a case like Gupta's is actually breach of a fiduciary duty not fraud on the market, the amount of illicit gains, Rakoff argued, are a poor proxy for the amount of harm inflicted by the defendant. United States v. Gupta, 904 F. Supp. 2d 349, 352 (S.D.N.Y. 2012). On direct appeal, the conviction and the sentence was affirmed, 747 F.3d 111 (2d Cir. 2014).

In 2015, while sitting by designation on the Ninth Circuit Court of Appeals, Judge Rakoff—whose decisions are normally subject to review by the Second Circuit—created a circuit split with the Second Circuit on the "devilishly complex" issue of what constitutes insider trading."[64] In what has been described as "the stuff of legend" and "delicious irony," Judge Rakoff's opinion in the case, United States v. Salman, prompted the Supreme Court to review the case and unanimously affirm Judge Rakoff's opinion for the Ninth Circuit, thereby overturning the Second Circuit's conflicting doctrine.[65] United States v. Salman, 792 F.3d 1087, 1088 (9th Cir. 2015), cert. granted in part, 136 S. Ct. 899, 193 L. Ed. 2d 788 (2016), and aff'd, 137 S. Ct. 420, 196 L. Ed. 2d 351 (2016).

Specifically, in Salman, Judge Rakoff, considered one of the judiciary's "leading experts on insider trading and white-collar crime,"[66] held that any insider who disclosed confidential inside information to his relatives without receiving anything in return, was guilty of insider trading as were his tippees.[64] Rakoff's holding ran counter to the Second Circuit's controversial decision in United States v. Newman, 773 F.3d 438 (2d Cir. 2014), which had narrowed the definition of insider trading to situations where the government could prove that the tipper had received a direct financial benefit from the tippee in return for disclosing the information.

In August 2019, Judge Rakoff sentenced Cesar Sayoc, nicknamed "The MAGA Bomber", to 20 years prison for the October 2018 United States mail bombing attempts.[67] Sayoc sent bombs specifically to critics of U.S. President Donald Trump, including U.S. President Barack Obama, former U.S. Vice President Joe Biden, and former U.S. Secretary of State Hillary Clinton, U.S. Representative Maxine Waters, U.S. Senators Kamala Harris and Cory Booker, former U.S. Attorney General Eric Holder, two former intelligence chiefs (ex-CIA Director John O. Brennan and ex-Director of National Intelligence James Clapper), billionaire Democratic donors and activists George Soros and Tom Steyer, and actor Robert De Niro.[68]

Sayoc had a history of threatening people. Ilya Somin, a law professor at George Mason University and a scholar at the Cato Institute, reported that he was the subject of death threats from Sayoc made on Facebook in April 2018. Sayoc threatened to kill Somin and his family and "feed the bodies to Florida alligators".[69] Democratic strategist Rochelle Ritchie had also received a threatening tweet from Sayoc on October 11 that said: "Hug your loved ones real close every time you leave you home."[70]

Sayoc pled guilty to 65 felony counts. Sayoc said that he did not intend for the bombs to explode, but "I was aware of the risk that it would explode." Rakoff said, about the sentencing, "No one can pretend this is not, in real terms, substantial punishment; but in the Court’s view, it is no more, and no less, than [what] he deserves".[71]

In September 2019, the State of New York and the Brooklyn District Attorney filed a lawsuit against U.S. Immigration and Customs Enforcement ("ICE"), challenging the agency's decision to greatly increase the number of immigration arrests conducted in and around New York State courthouses.[72] Prior to 2017, ICE generally required its officers to avoid enforcement actions at courthouses, with limited exceptions for high-priority removal targets. Beginning in 2017, however, ICE began conducting immigration arrests at courthouses with much greater frequency.[73] ICE officers began following this new policy on an informal basis after President Trump issued a January 25, 2017 executive order, Enhancing the Public Safety in the Interior of the United States, which directed federal agencies "to employ all lawful means to ensure the faithful execution of the immigration laws of the United States against all removable aliens."[74][73] ICE formally set forth its expanded courthouse arrest authority in a Directive issued in January 2018.[73]

This policy, however, proved controversial. Various judges, legal scholars, immigration advocates, and legal service providers argued that ICE's courthouse arrests not only disrupted court proceedings but also deterred aliens from participating in the judicial process.[75][76][77]

After discovery and motion practice, Judge Rakoff granted summary judgment to plaintiffs and enjoined ICE "from conducting any civil arrests on the premises or grounds of New York State courthouses, as well as such arrests of anyone required to travel to a New York State courthouse as a party or witness to a lawsuit."[73] His ruling explained that a long-standing common-law privilege, dating back to at least eighteenth-century England, bars the civil arrest of anyone present at a courthouse, or on courthouse grounds, or necessarily traveling to or from a court proceeding. This privilege was recognized by various state and federal courts of the United States in the nineteenth and twentieth centuries, and was presumptively incorporated into the Immigration and Nationality Act. ICE thereby exceeded its statutory authority by conducting such arrests, in violation of the Administrative Procedure Act. Judge Rakoff further held that ICE acted arbitrarily and capriciously by adopting its courthouse arrest policy in response to the executive order's direction to "employ all lawful means" to enforce the immigration laws; in fact, this legal rational was faulty because such arrests are not lawful.[73]