Of all the moments in the oral argument Wednesday in the case of Salman v. United States, in which the Supreme Court got its long-awaited opportunity to revisit insider trading law in the aftermath of the Second Circuit's decision in Newman, the one that I found most striking in the transcript was this one. It was an exchange between Chief Justice Roberts and the deputy solicitor general, Michael Dreeben:
CHIEF JUSTICE ROBERTS: I'm not interested in who the government would seek to have liable. I'm interested in what the rule is going to be.
MR. DREEBEN: I'm equating the two, Mr. Chief Justice. I'm not --
CHIEF JUSTICE ROBERTS: This Court has not equated the two.
If this was cause for laughter in the courtroom, it was dark humor indeed. The uncertainty regarding the rule — which led to an hourlong argument in which lawyers and justices groped their way toward possible alternatives — has come with a genuine human cost. As Justice Roberts deftly and devastatingly pointed out to this official of President Obama's Justice Department, in the American system, it's not the prosecutors who get to make up what is a crime and what isn't. Alas, by the time a court stepped in to stop the improvisations of the U.S. attorney for the Southern District of New York, Preet Bharara, careers, reputations, and businesses had been damaged and in some cases destroyed.
Prosecutors and judges were represented at yesterday's argument, as were defendants. The missing party in the oral argument was Congress. It was mentioned often enough. "Congress could certainly pass a statute...Congress can change the law," the lawyer for Salman, Alexandra Shapiro, offered. Justice Kagan countered that "Congress has shown no indication that it's unhappy" with the way the law was under Dirks, another insider trading case. Mr. Dreeben said, "Clearly Congress is aware of this line of cases. It has never disturbed it."
Mr. Dreeben's conflation of congressional inaction and congressional approval is a confusion almost as problematic as his confusion of prosecutor's decisions and the law itself. It would be a fine opportunity for Congress to assert its role as the writer of laws in the face of infringements from prosecutors and courts who are all too ready to usurp that role.