[Sanchez:] A federal appeals court in San Francisco has ruled unconstitutional, deciding it is not a crime listen to this that it is not a crime to lie about receiving awards because that would go against the First Amendment. This all centers on a man named Xavier Alvarez or Xavier Alvarez. I'm not sure about the pronunciation. He sat on the board of directors of a water utility in California and claimed to be a retired Marine who won a Medal of Honor in 1987. He was prosecuted and given three years' probation. Alvarez even pleaded guilty but reserved his right to appeal. Jonathan Libby is the public defender who represented Alvarez, and he is good enough to join us now. Jonathan, the first part of this is, your client lied. Right? Can you deal squarely with that part of the story first?
[Jonathan Libby, Public Defender For Xavier Alvarez:] There is no question he lied.
[Sanchez:] And that's not an honorable thing to do.
[Libby:] Absolutely not.
[Sanchez:] However, you say and apparently the court has agreed with you it's not a crime to lie.
[Libby:] Exactly. The First Amendment is supposed to mean something. The First Amendment makes clear Congress shall make no law abridging the freedom of speech. There have been some limited exceptions to the First Amendment over the years, but telling a non- defamatory lie is not one of them.
[Sanchez:] Where is your client now, by the way?
[Libby:] Mr. Alvarez is currently in state prison system on an unrelated matter.
[Sanchez:] But the fact that he's in prison because that caught my curiosity has nothing to do with the situation he is in now?
[Libby:] Correct.
[Sanchez:] And do you think this will set a precedent or do you think this is going to be challenged?
[Libby:] Well, it certainly sets a precedent within the Ninth Circuit for now. I suspect the government is going to seek further review of the case.
[Sanchez:] Jonathan, you're a good man. Thanks so much for joining us and taking us through this story. Wolf's coming up on "THE SITUATION ROOM." Thanks for being with us. We'll see you again tomorrow. This is RICK'S LIST. Here now, Wolf Blitzer.