Can Tennessee's legislature create a Class E felony where the only punishment is a fine, with no possibility of imprisonment?

Subject

Opinion No. 12-36, Class E Felony Punishable by Fine Only, March 13, 2012

Plain-English summary

A felony, in the ordinary sense of the word, is an offense serious enough to be punishable by a year or more in prison. Tenn. Code Ann. § 39-11-110 confirms that general framing for Tennessee. So Representative Don Miller asked the AG a slightly puzzling question: could the legislature define a Class E felony where the only punishment was a fine, no jail time at all? Specifically, House Bill 2226 / Senate Bill 2194 proposed to do this for a new offense involving devices that falsify the records of electronic cash registers and other point-of-sale systems. The bill would have made the offense a Class E felony "punishable by a fine only up to one hundred thousand dollars."

The AG said yes, the legislature can do this. Three reasons. First, similar arrangements already existed in Tennessee law (failing to obtain photo identification as a registered sex offender under § 40-39-213(b), shipping wine without a direct shipper's license under § 57-3-217(g)(2), and first-offense communication theft under § 39-14-149(d)). Second, "judgments about the appropriate punishment for an offense belong in the first instance to the legislature." United States v. Bajakajian, 524 U.S. 321, 336 (1998). The Tennessee Supreme Court had said the same in State v. Farner, 66 S.W.3d 188, 200 (Tenn. 2001). Third, the only constitutional constraints, Cruel and Unusual Punishment and Excessive Fines, do not categorically forbid fine-only felonies. They forbid grossly disproportionate sanctions, which is a different question that must be answered case by case.

The AG also flagged something easily overlooked. Even though the bill envisioned no imprisonment, calling the offense a felony triggers a cascade of civil disabilities, most notably loss of the right to vote under Tenn. Code Ann. § 40-20-112. Those disabilities have repeatedly been upheld as non-penal regulations of the franchise rather than punishments, citing Richardson v. Ramirez, 418 U.S. 24, 54 (1974).

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical background and statutory framework

The bill at issue

HB 2226 / SB 2194 of the 107th General Assembly proposed a new offense for using devices that falsify electronic cash register and point-of-sale records, sometimes called "zappers" or "phantomware." Such tools let businesses understate gross receipts, evade sales taxes, and skim cash. The bill labeled the offense a Class E felony "punishable by a fine only up to one hundred thousand dollars."

Tennessee's existing classification scheme

Tenn. Code Ann. § 40-35-111(b)(5) defines a Class E felony as "not less than one (1) nor more than six (6) years" of confinement plus fines up to $3,000 for natural persons. The classification system, per § 40-35-102(2), was intended to "assure fair and consistent treatment of all defendants by eliminating unjustified disparity in sentencing and providing a fair sense of predictability of the criminal law and its sanctions." The Sentencing Commission Comments to § 40-35-111 noted that "[t]he commission believes that the classification and terms designated for each classification are an improvement over prior law which had dozens of penalty variations which were totally unrelated to one another."

So a "Class E felony punishable by fine only" was an anomaly against this scheme. But anomalies were not new. The AG identified three existing examples:

• Failing to obtain photo identification as a registered sex offender (Tenn. Code Ann. § 40-39-213(b))
• Shipping wine without a direct shipper's license (Tenn. Code Ann. § 57-3-217(g)(2))
• First-offense communication theft involving $500 to $1,000 (Tenn. Code Ann. § 39-14-149(d))

Each was already a Class E felony punishable only by a fine. So the legislature had already done this.

Legislative authority and constitutional constraints

The legislature has primary responsibility for grading and punishing offenses. Bajakajian, 524 U.S. at 336. The Tennessee Supreme Court agrees: "The power to define what shall constitute a criminal offense and to assess punishment for a particular crime is vested in the legislature." State v. Farner, 66 S.W.3d 188, 200 (Tenn. 2001).

The Eighth Amendment's Cruel and Unusual Punishment clause and the Excessive Fines clause (mirrored in Tenn. Const. art. I, § 16) impose outer limits. They forbid punishments "grossly disproportional to the gravity of a defendant's offense." Bajakajian, 524 U.S. at 334; State v. Taylor, 70 S.W.3d 717, 723 (Tenn. 2002).

A fine-only sanction attached to what would normally be an imprisonment offense, the AG observed, "will not, of course, typically run afoul of this proscription." That is to say, replacing prison with a fine generally reduces the severity rather than increases it.

As for the Excessive Fines clause, point-of-sale device fraud can "occasion large losses in a particular case resulting in a proportional fine." So HB 2226 was not facially unconstitutional under United States v. Salerno, 481 U.S. 739, 745 (1987), which requires a facial challenger to establish "no set of circumstances exists under which the Act would be valid." A particular fine might be excessive in a small-scale case; that would be evaluated in the individual case under Taylor's framework. But facial invalidity could not be sustained.

The civil disabilities point

The AG flagged a complication. Even with no imprisonment, the offense was still denominated a felony. Felony status under Tenn. Code Ann. § 40-20-112 carried automatic civil disabilities, including loss of the right to vote. See Cole v. Campbell, 968 S.W.2d 274, 276-77 (Tenn. 1998), for an overview.

Felon disenfranchisement statutes have generally been upheld as non-penal exercises of the state's power to regulate the vote, not as additional punishment. Richardson v. Ramirez, 418 U.S. 24, 54 (1974) ("exclusion of felons from the vote has an affirmative sanction in § 2 of the Fourteenth Amendment"); Farrakhan v. Locke, 987 F. Supp. 1304, 1314 (E.D. Wash. 1997); Kronlund v. Honstein, 327 F. Supp. 71, 74 (N.D. Ga. 1971).

So a person convicted of HB 2226's fine-only Class E felony would pay a fine and lose the right to vote (and potentially other civil rights) even though they never spent a day in jail. The AG left this as an observation, not a constitutional problem, because the disenfranchisement was treated as separate from punishment.

Common questions

How does a "fine-only felony" actually work in practice?

Functionally, it operates like a hybrid. The criminal statute denominates the offense a felony and assigns a fine as the punishment. Conviction triggers felony status, including (in Tennessee) loss of voting rights and any other civil consequences attached to felony convictions. But the maximum jail exposure is zero. Sentencing under Tenn. Code Ann. § 40-35-111 is overridden by the specific statutory provision setting the fine cap.

Why would the legislature designate something as a felony if it doesn't carry jail?

Several reasons. A felony designation signals greater seriousness to courts, prosecutors, and the public. It also engages collateral consequences (background checks, employment restrictions, immigration consequences for non-citizens) that misdemeanors do not. For corporate-friendly offenses like tax evasion software, a felony designation can deter where modest jail time might not.

Could a person sue and get this struck down as an Eighth Amendment violation?

On its face, no, given the AG's analysis. Salerno requires a facial challenger to show no set of circumstances under which the law could be valid. Because a $100,000 fine could be proportional in some large-scale fraud cases, the law survives a facial challenge. An as-applied challenge could still succeed in a small-scale case where a $100,000 fine was clearly disproportionate to the conduct. Taylor tells judges to evaluate individual fines under the Sentencing Reform Act framework to avoid constitutional questions.

Does this opinion mean I lose my right to vote if I'm convicted of a fine-only felony in Tennessee?

Yes, generally. Tenn. Code Ann. § 40-20-112 attaches civil disability consequences to felony convictions, not to imprisonment specifically. The AG specifically noted this. Anyone convicted under HB 2226 would face that consequence, and felony disenfranchisement has been upheld in Richardson v. Ramirez and successor cases.

Did the AG suggest the legislature should rethink this?

No. The AG's comment was that fine-only felonies "stand in some tension" with the Sentencing Reform Act's classification scheme, and that the inconsistency "might create some inconsistency against the backdrop of the existing statutory scheme." That is a description, not a recommendation. The opinion concluded the legislature has the power "to so proceed."

Citations

• Tenn. Code Ann. § 39-11-110 (felony defined)
• Tenn. Code Ann. § 39-14-149(d) (first-offense communication theft as fine-only Class E felony)
• Tenn. Code Ann. § 40-20-112 (civil disabilities upon felony conviction)
• Tenn. Code Ann. § 40-35-102(2) (sentencing classification rationale)
• Tenn. Code Ann. § 40-35-111(b)(5) (Class E felony range, with Sentencing Comm'n Comments)
• Tenn. Code Ann. § 40-39-213(b) (sex offender photo ID failure as fine-only Class E felony)
• Tenn. Code Ann. § 57-3-217(g)(2) (shipping wine without direct shipper's license as fine-only Class E felony)
• U.S. Const. amend. VIII (Cruel and Unusual Punishments; Excessive Fines)
• Tenn. Const. art. I, § 16 (same, state)
• United States v. Bajakajian, 524 U.S. 321 (1998)
• State v. Farner, 66 S.W.3d 188 (Tenn. 2001)
• State v. Taylor, 70 S.W.3d 717 (Tenn. 2002)
• United States v. Salerno, 481 U.S. 739 (1987)
• Cole v. Campbell, 968 S.W.2d 274 (Tenn. 1998)
• Richardson v. Ramirez, 418 U.S. 24 (1974)
• Farrakhan v. Locke, 987 F. Supp. 1304 (E.D. Wash. 1997)
• Kronlund v. Honstein, 327 F. Supp. 71 (N.D. Ga. 1971)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2012/op12-036.pdf

Original opinion text

Class E Felony Punishable by Fine Only

QUESTION

May the Legislature denominate an offense as a Class E felony punishable by fine only?

OPINION

Yes. Although felonies punishable by fine only stand in some tension with the provisions of the Criminal Sentencing Reform Act of 1989, the Legislature has the constitutional power to create them.

ANALYSIS

House Bill 2226/Senate Bill 2194 proposes to create a new criminal offense for using devices that falsify the records of electronic cash registers and other point-of-sale systems. H.B.2226/S.B.2194, §1(a), 107th General Assembly, 2nd Sess. (Tenn. 2012) (hereinafter "HB2226"). A violation is denominated "a Class E felony punishable by a fine only up to one hundred thousand dollars ($100,000)." Id. § 1(c). Certain existing criminal statutes assess similar punishments. Failing to obtain photo identification as a registered sex offender, shipping wine without a direct shipper's license, and committing the first offense of communication theft in an amount more than five hundred dollars but less than one thousand dollars are all classified as Class E felonies punishable only by fines in various amounts. Tenn. Code Ann. §§ 39-14-149(d)(1)&(2), 40-39-213(b), 57-3-217(g)(2).

This practice is constitutional. As a general matter, felonies are construed to be violations of law that may be punished by one year or more of confinement. Tenn. Code Ann. § 39-11-110. The authorized terms of imprisonment and fines for Class E felonies, in particular, are not less than one year nor more than six years' confinement and fines not exceeding three thousand dollars for natural persons. Tenn. Code Ann. § 40-35-111(b)(5). The existing classification of offenses is thought to "assure fair and consistent treatment of all defendants by eliminating unjustified disparity in sentencing and providing a fair sense of predictability of the criminal law and its sanctions." Tenn. Code Ann. § 40-35-102(2). See also Tenn. Code Ann. § 40-35-111, Sentencing Comm'n Comments ("The commission believes that the classification and terms designated for each classification are an improvement over prior law which had dozens of penalty variations which were totally unrelated to one another. By adopting felony classification with specific punishments, similar conduct can be given similar punishments.").

Nevertheless, "judgments about the appropriate punishment for an offense belong in the first instance to the legislature." United States v. Bajakajian, 524 U.S. 321, 336 (1998). See also State v. Farner, 66 S.W.3d 188, 200 (Tenn. 2001) ("The power to define what shall constitute a criminal offense and to assess punishment for a particular crime is vested in the legislature."). The primary constraints on legislative power in this regard are the Cruel and Unusual Punishments and Excessive Fines clauses of the United States and Tennessee constitutions. U.S. Const. amend. VIII; Tenn. Const. art. I, § 16. Those provisions generally forbid punishments that are grossly disproportional to the gravity of a defendant's offense. See Bajakajian, 524 U.S. at 334 (so stating with regard to punitive forfeitures); State v. Taylor, 70 S.W.3d 717, 723 (Tenn. 2002) (citing Bajakajian). Annexing a fine-only punishment to an offense grade that would normally carry a term of imprisonment will not, of course, typically run afoul of this proscription. Moreover, the Excessive Fines clauses do not categorically prohibit the sanction envisioned by HB2226. Because point-of-sale device fraud could occasion large losses in a particular case resulting in a proportional fine, the punishment imposed by HB2226 cannot be facially unconstitutional. See United States v. Salerno, 481 U.S. 739, 745 (1987) (stating that a facial challenge to legislation must establish that "no set of circumstances exists under which the Act would be valid"). See also Taylor, 70 S.W.3d at 722 (requiring appellate courts to evaluate the propriety of individual fines under the principles of the Criminal Sentencing Reform Act in order to avoid constitutional questions).

This Office notes that, since HB2226 denominates its newly-created offense a felony, convictions will carry certain civil disabilities — perhaps most notably, loss of the right to vote. See Tenn. Code Ann. § 40-20-112. See generally Cole v. Campbell, 968 S.W.2d 274, 276-77 (Tenn. 1998) (surveying civil disability statutes). Statutes authorizing such disabilities have generally been sustained as non-penal exercises of the states' regulatory power. See, e.g., Richardson v. Ramirez, 418 U.S. 24, 54 (1974) ("exclusion of felons from the vote has an affirmative sanction in § 2 of the Fourteenth Amendment"); Farrakhan v. Locke, 987 F. Supp. 1304, 1314 (E.D. Wash. 1997) (rejecting free speech, double jeopardy and cruel and unusual punishment challenges to felon disenfranchisement law, and noting "Richardson suggests that the facial validity of felon disenfranchisement may be absolute"); Kronlund v. Honstein, 327 F. Supp. 71, 74 (N.D. Ga. 1971) ("disenfranchisement is a non-penal exercise of a State's power to regulate the vote and is not cruel and unusual punishment").

Accordingly, we are of the opinion that, although defining some offenses as Class E felonies punishable only by fine might create some inconsistency against the backdrop of the existing statutory scheme, the Legislature has the power to so proceed.

ROBERT E. COOPER, JR.
Attorney General and Reporter

WILLIAM E. YOUNG
Solicitor General

JAMES E. GAYLORD
Assistant Attorney General

Requested by:
Representative Don Miller
11th Legislative District
113 War Memorial Building
Nashville, TN 37243