Scienter

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The term “scienter” is used to describe the mental state of a person who intends to manipulate or defraud another person. An act is performed “knowingly” if it is done voluntarily and deliberately. The accused cannot be proven to have “guilty knowledge” of the results of his actions if those results were from a mistake or accident. The accused must have been in such a mindset as to have set out with the intention to defraud or deceive the other party. To explore this concept, consider the following scienter definition.

Definition of Scienter

Noun

  1. The mental state of one who intends to deceive or defraud another person.

Origin

Latin

What is Scienter

Scienter refers to a person’s mental state at the time he allegedly committed a crime. Specifically, scienter refers to whether the individual intentionally and knowingly acted with the intent to defraud or manipulate, or if the results of his actions were simply caused by a mistake or accident. Scienter is a Latin term, which translates to “knowledge.” Therefore, someone who acts with scienter is fully aware of what he is doing and the consequences that can result, yet goes ahead with it anyway.

For example, scienter in criminal law is often addressed in cases involving child pornography. Here, the prosecution does not need to prove that the defendant knew the exact age of the performer to prove that he had scienter. All that must be shown is that he knew, or was made aware of the fact, that the material in question contained a visual representation of a minor engaging in conduct that was sexually explicit for him to be found guilty.

Another example of scienter is a car salesman selling a car fully knowing that something is wrong with the car, and intentionally not communicating the issue to the buyer. If he is unaware of the car having issues, and the buyer immediately experiences a problem after driving the car off the lot, the salesman does not have scienter because he had no prior knowledge that something was wrong with the car before selling it to the buyer. The sole purpose of establishing scienter is to prove guilt or responsibility.

Scienter in Tort Law

Scienter in tort law often concerns civil lawsuits involving animals and the damage they inflict upon a human, such as dog bites. To be successful at proving scienter in tort law, an individual must be able to prove the following about the person in control of the animal:

  • That an injury occurred as a result of the animal’s actions
  • That the animal had some sort of problematic trait, such as a biting tendency
  • That the person in control of the animal knew that the animal had this problematic trait

Scienter in tort law concerns strict liability cases, meaning that the plaintiff does not need to argue that the defendant nor his animal acted with intent, or that the defendant was negligent in his handling of the animal. It must only be proven that the plaintiff deliberately assumed the risk of injury associated with his actions, or that plaintiff himself was the cause of the injury.

Scienter is not necessary in cases involving wild animals. In this sense, “wild” does not refer to the animal’s temperament, but to his species in general. For instance, a cheetah, no matter how calm, would still be considered a wild animal. To determine whether a person owns a “wild” animal, he must be keeping the animal despite the risks that animal poses to his own health. If a man keeps a cheetah in his home, and that cheetah goes on to bite one of his neighbors, then he has scienter because he knew that he was keeping a dangerous animal in his home and that, as such, he was essentially inviting a tragedy to happen.

Cattle Trespass

A cattle trespass action occurs when a farm animal such as a cow, sheep, pig, goat, horse, or chicken, amongst others, is either intentionally driven or strays onto someone’s land. The owner of such an animal is responsible for taking precautions to ensure that such an animal does not stray onto another person’s land. Scienter applies here if the cattle owner intentionally moves his animals onto the other person’s property, or knowingly allows them to escape onto the property.

If the animal does stray, then its owner is liable for any damages that are committed by that animal. Because actions involving cattle trespass are also ones of strict liability, the plaintiff does not need to prove the owner’s negligence.

Other Liabilities for Animals

The activities that animals engage in can lead to other kinds of liabilities that may involve scienter. For instance, an animal’s owner may have scienter if he keeps his animal is such a manner that it unreasonably interferes with his neighbor’s enjoyment of his property. For instance, if the animal creates such a stench that the smell wafts over to his neighbor’s property, and his neighbor cannot entertain guests outside or even open his windows, then the owner of the animal may be held liable for the tort of nuisance. This is because he has scienter, knowing that the stench created by his animals is intolerable.

Scienter Example Involving Drug Paraphernalia

An example of scienter can be found in a case wherein a woman was accused of using one of her companies as a front for selling drug paraphernalia. Lana Acty formed Posters ‘N’ Things, Ltd. (“Posters”), an Iowa-based corporation, in 1977. The corporation owned three businesses: an art gallery, a diet-aid store, and a general merchandise outlet. It came to the attention of law enforcement that the merchandise outlet was being used as a front to sell drug paraphernalia. This was because officers who had been investigating drug cases in the area had found drug paraphernalia that was traced back to the merchandise outlet.

In March of 1990, officers obtained and executed warrants that permitted them to search Acty’s home and business premises. Upon doing so, they seized several drug-related items, including pipes, bongs, and scales, as well as business records, cash, and catalogs that described the items sold by Acty’s companies. The advertisements were for items like drug kits and diluents. Diluents are chemicals that are used to “dilute” drugs so that one can stretch out his supply by cutting it with other materials. Acty and her husband were ultimately indicted on several charges pertaining to the sale of drug paraphernalia.

The couple was tried jointly before a jury in the U.S. District Court for Iowa’s Southern District. They were ultimately convicted of scheming to sell drug paraphernalia and of conspiring to commit such an offense. Acty specifically was convicted of aiding and abetting the manufacture and distribution of cocaine, investing income related to a drug offense, money laundering, and engaging in financial transactions with the proceeds earned from illegal activity.

Acty was sentenced to nine years in prison, followed by an additional five-year term of supervised release. She personally was fined $150,000, and Posters was fined an additional $75,000. On appeal, the U.S. Court of Appeals for the Eighth Circuit affirmed both Acty’s and her husband’s convictions. The case made its way to the U.S. Supreme Court, which granted certiorari based on there being an apparent conflict among the Courts of Appeals insofar as the nature of the scienter requirement involved with this case.

Ultimately, the Court affirmed the Court of Appeals due to the fact that there were several flaws in Acty’s arguments. Specifically, the Court held:

“Petitioner Acty’s other contentions are not properly before the Court. First, she argues that she was improperly convicted of aiding and abetting the manufacture and distribution of cocaine because the jury instructions created a ‘presumption’ that certain items of drug paraphernalia ‘were intended for manufacturing with a controlled substance.’…This argument was neither raised in nor addressed by the Court of Appeals …

“Second, Acty asserts that her convictions for money laundering, investing income derived from a drug offense, and engaging in monetary transactions with the proceeds of unlawful activity must be reversed. These contentions were not presented in the petition for writ of certiorari, and therefore they are not properly raised here…

“Finally, the petition presented the question whether the proof was adequate to support Acty’s conviction for aiding and abetting the manufacture and distribution of cocaine; but petitioners’ brief on the merits fails to address the issue and therefore abandons it. Accordingly, the judgment of the Court of Appeals is affirmed.”

Related Legal Terms and Issues

  • Aiding and Abetting – A legal doctrine that pertains to the guilt of an individual who assists another in the committing of a crime.
  • Defendant – A party against whom a lawsuit has been filed in civil court, or who has been accused of, or charged with, a crime or offense.
  • Money Laundering – The act of concealing the origin of monies that were illegally obtained, typically by way of transfers involving foreign banks or otherwise legitimate businesses.
  • Plaintiff – A person who brings a legal action against another person or entity, such as in a civil lawsuit, or criminal proceedings.
  • Prosecutor – An attorney who is hired by the government to present a state’s case against a defendant in a criminal action.
  • Tort – An intentional or negligent act, a civil wrong, as opposed to a criminal act, which causes harm to another.
  • Writ of Certiorari – An order issued by a higher court demanding a lower court forward all records of a specific case for review.