Todd Farha: A Case Study in Overcriminalization and Unchecked Prosecutorial Discretion

U.S. v. Peter E. Clay, Todd S. Farha, Paul L. Behrens, and William L. Kale No. 8:11-cr-00115-JSM-MAP (M.D. Fla.) on the affairs of WellCare Health Plans, Inc.

Overcriminalization is a dangerous trend that NACDL battles daily. The case of Todd Farha and other executives at WellCare Health Plans, Inc., offer a case study in overcriminalization and unchecked prosecutorial discretion. Below, you will find links to important primary and secondary materials concerning this case.

Recent Developments

In a recent development that highlights the overcriminalization of this case, the US Department of Justice has changed its policies in such a way that Todd Farha’s case would not be a prosecuted.

Mr. Farha was prosecuted for making what a federal prosecutor concluded was the wrong judgment on an ambiguous Florida state regulatory question, even though (1) the State was aware of the ambiguity and chose not to resolve it until long after the fact, (2) Mr. Farha was advised by counsel that the regulatory strategy was permissible, (3) auditors for the state agency agreed, and (4) competitors who took the same approach were not even sanctioned civilly. 

While one might assume that one could only be prosecuted for violating a specific statute or regulation, the case against Mr. Farha relied upon his alleged violation of informal state “guidance” documents, even though this purported guidance was not incorporated into any law or regulation. 

In 2018, The Department of Justice issued instructions to its prosecutors that agency “[g]uidance documents cannot by themselves create binding requirements that do not already exist by statute or regulation.  Thus, the Department should not treat a party’s noncompliance with a guidance document as itself a violation of applicable statutes and regulations. . . . The Department may not bring actions based solely on allegations of noncompliance with guidance documents.”{1} 1  Department of Justice, Justice Manual, Title 1-20.100. 

This policy makes clear that a person’s failure to comply with agency guidance which “expand[s] upon statutory or regulatory requirements does not mean that the party violated those underlying legal requirements; agency guidance documents cannot create any additional legal obligations.”{2} 2  See Mem. of the Associate Attorney General, Limiting Use of Agency Guidance Documents in Affirmative Civil Enforcement Cases, at 2 (Jan. 25, 2018). “Under current DOJ policy, then, government prosecutors would be precluded—as they did in the Clay case—from arguing that informal agency letters could constitute binding authority on the regulated public.”{3} 3  John Lauro, Washington Legal Foundation, Legal Backgrounder, The Intersection of Chevron and Federal Prosecution: Courts Shouldn’t Assist Agency Overcriminalization, July 17, 2020. 

“Deference to informal agency guidance is yet another manifestation of the scourge of overcriminalization, which includes prosecutorial misconduct; relaxed standards for mens rea/criminal intent; ambiguous jury instructions and the use of negligence or conscious avoidance concepts to convict individuals.”{4} 4  Id. 

See also Curing America’s Addiction to Overcriminalization by Brett Tolman, Bloomberg Law (October 19, 2020)

Select Court Briefs 

Publications and Blogs 

Cato Institute 
McDermott, Will, and Emery Blog 
National Association of Criminal Defense Lawyers 
The Reason Foundation 
Washington Legal Foundation 
Washington Times 
White Collar Crime Prof Blog 
Market Wired 
Overcriminalization in America

Events, Podcasts, and Webinars 

Center for Prosecutor Integrity 
Federal Bar Association 
  • The Scourge of Federal Overcriminalization: Case Studies, Root Causes, and Possible Solutions (July 30, 2015) 
Federalist Society 
National Association of Criminal Defense Lawyers 
  • The Criminal Docket Podcast: United States v. Clay: A Case Study in Overcriminalization and Unchecked Prosecutorial Discretion (January 15, 2016) (NACDL Director of Public Affairs & Communications Ivan J. Dominguez had the opportunity to sit down with attorney Matt Kaiser, a partner at the firm of Kaiser, LeGrand & Dillon PLLC in Washington, DC. Mr. Kaiser was lead counsel on an amicus curiae, or friend-of-the-court, brief submitted to the United States Court of Appeals for the 11th Circuit in the case of United States v. Clay. The brief was submitted on behalf of the NACDL, the Reason Foundation, and Five Criminal and Health Law Scholars. NACDL produced a podcast episode – "United States v. Clay: A Case Study in Overcriminalization and Unchecked Prosecutorial Discretion" – which discusses the very serious issues implicated by the federal prosecution of the defendants in this case.)
  • Striking the Right Balance: Criminal v. Civil Law Sanctions (September 16, 2015) 
    • John Lauro discusses Clay from 22:56 to 29:31 

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