On Friday, the Supreme Court overturned the conviction of a Chicago politician, making a statement to bank regulators that were misleading but not false.
The case involved Patrick Daly Thompson, former Chicago Alderman, grandson of former mayor Richard J. Daly and nephew of another Richard M. Daly. He admitted to misunderstanding the regulator, but said that he would not criminalize his statement.
Director John G. Roberts Jr., who wrote for the unanimous court, said the case turned on elementary logic. The law in question prohibits the production of “false statements or reports.”
“False and misleading are two different things,” the Supreme Court wrote. “A misleading statement can be true, and a true statement is clearly not wrong. Therefore, the basic logic determines that at least some misleading statements are not wrong.”
Thompsonv. United States, No. 23-1095 began when Thompson received three loans from the Federal Bank of Washington for savings between 2011 and 2014. He used his next loan for $20,000 to pay the tax bill. He used the third one for $89,000 to pay off his debts to another bank.
He made one loan payment in 2012 for $390. The bank did not ask him for further payments, but failed in 2017.
When the loan servicer employed with the Federal Deposit Insurance Corporation sought about $270,000 to pay off the loan and interest, Thompson reportedly took out the amount of $110,000 on his first loan. The statement was true in a narrow sense, but incomplete.
After negotiations, Thompson paid off the principal in 2018, but no interest was paid. More than two years later, federal prosecutors charged him with violating laws that criminally granted “false statements or reports” to affect the FDIC.
Thompson, who was elected to the Chicago City Council in 2015, resigned on behalf of the southern district after being convicted in 2022 and ordered to pay interest, after which he resigned after about $50,000 worth of it. He served in prison for four months.
Chief Roberts said many federal laws prohibit “false or misleading statements,” suggesting that the omission of misleading statements from the law in question in Thompson's case makes sense.
The Supreme Court justice gave examples of genuine, misleading statements.
“If a tennis player says, “Winning the championship” when the opponent is confiscated, her statement, even if true — can be misleading because people can lead her to think she has won the contest match,” he wrote.
Similarly, if a doctor said he “performed 100 of these surgeries” when 99 patients died, the Supreme Court wrote, “The statement, even if true — would be misleading because it could lead people to believe that those surgeries were successful.”
The Supreme Court ordered the case to be returned to the Court of Appeal and another question was considered. Thompson's statement is, in the context, whether it was in fact false, not merely misleading.
In a concurring opinion, Judge Samuel A. Alito Jr. gave an example of how he agreed that the context was important and said he had given the point.
“After realizing that only the breadcrumbs remain on a plate of 12 fresh cookies, the mother asks her daughter, “Have you eaten all the cookies?” “It writes.
“If the child actually says, 'I ate three' when he actually had all 12,' then her words are literally isolated and true, but in context it's false,” he wrote. “The child ate three cookies (more than nine after that). But in the context, I'm implicitly saying that the child only ate three cookies, but that's wrong.”
In his second consent opinion, Judge Ketanji Brown Jackson writes that the ju judge has already discovered that Thompson's statement was false and that the Court of Appeal should affirm his conviction on the ground.
