Breaking News

Court to hear new Enron case

The Supreme Court agreed on Tuesday to rule on claims that “searing media attacks” on longtime Enron executive Jeffrey K. Skilling tainted his criminal trial and conviction on various fraud charges.  The case of Skilling v. U.S. (08-1394) also raises an issue on the scope of the federal law punishing the failure to provide “honest services” as a corporate executive.  This was one of four cases granted review, to be argued early next year.  The Court, however, took no action on a significant new Guantanamo Bay detainee case, Kiyemba v. Obama (08-1234). (UPDATE: The Court will again consider the Kiyemba case at its next private Conference, next Monday, according to the Court’s electronic docket.)

The other newly granted cases raise these issues:  the scope of federal appeals courts’ authority to overturn a conviction that may have been based in part on conduct that was not criminal when it occurred (U.S. v. Marcus, 08-1341, a case in which Justice Sonia Sotomayor is recused, presumably because she was on the Second Circuit Court panel that decided the case earlier); whether federal law on federal employees’ health benefits preempts a state court lawsuit filed against a government contractor administering such benefits (Health Care Service v. Pollitt, 09-38), and whether “gross negligence” by a state-appointed defense attorney in a death penalty case provides a basis for extending the time to file a federal habeas challenge, in a case where the habeas plea was filed late despite repeated instructions from the client (Holland v. Florida, 09-5327).

The Skilling case puts before the Court the third case this Term on the proof that prosecutors must offer in order to win a conviction for failing to provide “honest services” to someone else — the public, a government agency, or one’s employer.  Two of those cases will be heard back-to-back on December 8, and the Skilling case is likely to be scheduled for argument in February or March.

In Skilling, the issue is whether “honest services” fraud requires proof of personal gain from a private individual’s alleged fraud. The case of Black v. U.S. (08-896), granted review last May, tests whether there must be proof of economic harm to the victim as a result of a private individual’s alleged fraud — in that case, one’s own corporation.  And the case of Weyhrauch v. U.S. (08-1196), granted review in June, involves a state official and asks whether there must be proof that the accused violated a duty imposed by state law — in that case, a duty to disclose significant information.

The Court, in agreeing to add the Skilling case to the mix, rejected the advice of the U.S. Solicitor General either to deny review of that case, because of contemplated further proceedings on it in lower courts, or at least to hold it until it had ruled in the Black case.

Skilling, the former CEO of Enron Corp., was convicted of conspiracy to commit securities and wire fraud and a wide array of other criminal charges.  He was sentenced to 292 months in prison and ordered to pay $45 million in restitution.  The Fifth Circuit Court upheld his conviction, but ordered a new sentencing, concluding that the trial judge had miscalculated under the federal Sentencing Guidelines.

In the newly granted Marcus case, the Justice Department argued that the Second Circuit — in a ruling joined, with some protest, by then-Judge Sotomayor – had wrongly overturned a conviction of engaging in “sex slavery” because the Circuit Court was not convinced that the jury had not based its verdict in part on conduct that pre-dated the federal law defining the crime.  The case involves Glenn Marcus, a New Yorker convicted of sex trafficking using force or coercion and forced labor. He was sentenced to 108 months in prison.  The charges were based on a 2000 law, the Victims of Trafficking and Violence Protection Act, designed to outlaw the use of people — including children — as sex slaves and forcing them to work with threats of violence.  His attorneys claimed that his prosecution was based in part on conduct that allegedly occurred in 1998 and at other points before the new law took effect in October 2000.

The health benefits case the Court will be reviewing involves a lawsuit by a federal employee, complaining of a cutoff of benefits for her minor son.  The employee, however, did not sue the federal agencies involved, but rather went to state court and aimed her lawsuit at the contractor administering the health plan for those agencies — Health Care Service Corp.  That firm sought to transfer the case to federal court, but it was intially dismissed there on the theory that the claim was preempted by federal law.  The Seventh Circuit Court ruled that the case could be tried in federal court, under a different “removal” theory.

The capital case added to the Court’s decision docket involves Albert Holland, convicted in 1996 of murder and sentenced to death.  While his challenges to the conviction were pending in Florida courts, Holland wrote two letters to his court-appointed defense lawyer, expressing concern about filing a federal habeas challenge on time.  His lawyer did not respond.  A state court turned aside his post-conviction plea, but Holland did not learn of that until later.  He filed his own federal habeas petition, but it was filed too late, not within the one-year time limit.  He sought to have the filing period extended, based on the claimed failures of his lawyer to act in time.  That was turned aside by a federal judge and by the Eleventh Circuit Court, finding no extraordinary circumstance justifying “tolling” of the filing period.

In another order, the Court said it would schedule oral argument on the two sides’ responses to a report by a Court-appointed Special Master making recommendations to the Court in 132 Original, Alabama v. North Carolina, an interstate dispute in which four states are suing the state of North Carolina over enforcement of a regional pact on disposal of radioactive wastes.  The Court had agreed in June 2003 to allow the lawsuit to proceed in the Court as an Original matter, and it has been going forward under review by Special Master Bradford R. Clark of Washington.  The Master submitted reports in April, as a prelude to review by the Justices themselves.  Tuesday’s order was a routine one, indicating that “exceptions” to the Special Master’s recommendations will be heard, presumably this Term.

Among the cases denied review on Tuesday was Loving v. Defense Department (08-1476), a plea by a soldier on a military death row.  The sentence of Private Dwight J. Loving has not been set finally, because it has not yet been reviewed by the President, as federal law requires for death sentences imposed in the military court system.  His case in the Supreme Court involved a plea for access to Pentagon documents sent to the White House, recommending presidential action (for or against) a death sentence.  The Court, as usual, gave no explanation for denying review of the plea.

Meanwhile, the Court’s new Justice Sotomayor signed onto her first opinion, a brief opinion written by Justice Anthony M. Kennedy regarding the Court’s refusal to hear a case on how to assess the cost of proceeding in state court by way of a class action.  Justice Kennedy, in an opinion also joined by Chief Justice John G. Roberts, Jr., said the case raised constitutional concerns over due process.  The opinion, however, was not a dissent; Kennedy and his co-signers said the case was not an appropriate one to hear the issue despite the constitutional question potentially at stake.  The case was DTD Enterprises v. Wells (08-1407).  The order and the separate statement can be found here.