Source: http://news.lawreader.com/?p=3177
Timestamp: 2019-04-23 14:34:31+00:00

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The Supreme Court on Thursday sharply curtailed prosecutors’ use of an anti-fraud law that was central in convicting politicians and corporate executives in many of the nation’s most prominent corruption cases. The ex-CEO of disgraced energy giant Enron and a Canadian media mogul, both in prison, are among the figures who could benefit from the ruling.
The justices voted 6-3 to keep the law in force, even as they joined unanimously in weakening it, and left it to a lower court to decide whether Jeffrey Skilling, the former Enron boss, and Conrad Black, the former newspaper owner, should have their convictions stemming from “honest services” fraud overturned.
The “honest services” law has been criticized by defense lawyers as the last resort of prosecutors in corruption cases that lack the evidence to prove that money is changing hands. It also has been called vague, subjecting people to prosecution for mistakes and minor transgressions in the business and political worlds. But watchdogs consider it key to fighting white-collar and public fraud.
The court, in an opinion written by Justice Ruth Bader Ginsburg, said prosecutors may continue to seek honest services fraud convictions in cases where they put forward evidence that defendants accepted bribes or kickbacks.
“Because Skilling’s misconduct entailed no bribe or kickback, he did not conspire to commit honest-services fraud under our confined construction” of the law, Ginsburg said. Three justices, Anthony Kennedy, Antonin Scalia and Clarence Thomas, would have found the law unconstitutional.
Thursday’s decision does not necessarily mean that any of the 19 counts against Skilling or four counts against Black will be thrown out, Ginsburg said. At the same time, by a 6-3 vote, the court rejected Skilling’s claim that he did not get a fair trial in Houston because of the harsh publicity surrounding the case in Enron’s hometown.
It is unclear whether any convictions will be overturned or prison sentences reduced as a result of the decision, lawyers familiar with the fraud law said. Determinations will have to be made case by case.
But there is no doubt how important the law has been to prosecutors. Supreme Court nominee Elena Kagan said recently that the honest services cases at the high court were the ones that mattered most to the Justice Department.
Justice Department spokeswoman Tracy Schmaler said prosecutors would continue to urge that honest services convictions for Skilling, Black and others be upheld. “While we are disappointed that today’s Supreme Court decisions narrowed the honest services statute, we are pleased that the Court upheld many of the core provisions that have been used for decades to prosecute corrupt public officials and corporate executives who have breached their duties to their constituents, clients, and investors,” Schmaler said.
Honest services charges have figured in convictions won against former Govs. George Ryan of Illinois and Don Siegelman of Alabama, and former Reps. Randy “Duke” Cunningham of California, William Jefferson of Louisiana and Bob Ney of Ohio.
Honest services charges also have been used regularly in public corruption cases stemming from the Jack Abramoff lobbying scandal, including in the pending retrial of former Abramoff associate Kevin Ring.
The new limits will lead to another hearing for Black and could mean the end of federal prosecutors’ case against former Alaska lawmaker Bruce Weyhrauch.
vail. By opposing the Government-proposed special-verdict forms,the Court of Appeals declared, defendants had forfeited their objection to the instructions. Their challenge would have become moot, the court observed, had the jury received special-verdict forms separating the alternative fraud theories, and reported on the forms that Defendants were not guilty of honest-services fraud. Defendants, the Court of Appeals therefore reasoned, bore responsibility for the obscurity of the jury’s verdict.
1. In Skilling v. United States, decided today, ante, p. __, this Courtvacated a conviction on the ground that the honest-services component of the federal mail-fraud statute, §1346, criminalizes onlyschemes to defraud that involve bribes or kickbacks. That holdingrenders the honest-services instructions given in this case incorrect.
By properly objecting to the honest-services jury instructions attrial, Defendants secured their right to challenge those instructions on appeal. They did not forfeit that right by declining to acquiesce inthe Government-proposed special-verdict forms. The Federal Rules of Criminal Procedure do not provide for submission of special questions to the jury. In contrast, Federal Rule of Civil Procedure 49 provides for jury interrogatories of two kinds: special verdicts, Rule 49(a); and general verdicts with answers to written questions, Rule49(b). While the Criminal Rules are silent on special verdicts, they are informative on objections to instructions. Criminal Rule 30(d)provides that a “party who objects to any portion of the instructions or to a failure to give a requested instruction must inform the court ofthe specific objection and the grounds for the objection before the jury retires to deliberate.” Defendants here, it is undisputed, complied with that requirement. The Seventh Circuit, in essence, added a further requirement for preservation of a meaningful objection to juryinstructions. It devised a forfeiture sanction unmoored to any federal statute or criminal rule. And it placed in the prosecutor’s hands authority to trigger the sanction simply by requesting a special verdict. To boot, the appeals court applied the sanction to Defendants, although they lacked any notice that forfeiture would attend their resistance to the Government’s special-verdict request. Criminal Rule 57(b) is designed to ward off such judicial invention. It provides: “Nosanction . . . may be imposed for noncompliance with any requirement not in federal law [or] federal rules . . . unless the alleged violator was furnished with actual notice of the requirement before thenoncompliance.” Pp. 5–8.
leaves that matter for consideration on remand. P. 8. 530 F. 3d 596, vacated and remanded.
In Skilling v. United States, decided today, ante, p. __,we vacated a conviction because the indictment rested, in part, on an improper construction of the “honest services” component of the federal ban on mail fraud, 18 U. S. C.§§1341, 1346. A similar infirmity is present in this case.Here, too, the Government and trial court advanced an interpretation of §1346 rejected by the Court’s opinion in Skilling. Nevertheless, the Government urges, the convictions of the defendants below, petitioners here, should beaffirmed for an independent reason. At trial, the Government pursued alternative theories: (1) money-or-property fraud; and (2) honest-services fraud. To pinpoint whetherthe jury based its verdict on money-or-property fraud, orhonest-services fraud, or both, the Government proposed special interrogatories to accompany the verdict. The defendants resisted, preferring an unelaborated general verdict, and the Government ultimately acquiesced in that standard form of submission.
forfeited their objection to the honest-services-fraud instructions given to the jury. 530 F. 3d 596, 603 (CA7 2008). We reverse that ruling. A criminal defendant, we hold, need not request special interrogatories, nor need heacquiesce in the Government’s request for discrete findings by the jury, in order to preserve in full a timely raised objection to jury instructions on an alternative theory ofguilt.
honest-services deprivation theories advanced by theGovernment. Id., at 235a. As to the latter, the District Court informed the jury, over Defendants’ objection, that aperson commits honest-services fraud if he “misuse[s] hisposition for private gain for himself and/or a co-schemer”and “knowingly and intentionally breache[s] his duty of loyalty.” Id., at 235a–236a.
Before jury deliberations began, the Government asked the District Court to employ a special-verdict form, whichwould reveal, in the event that the jury voted to convict on a mail-fraud count, the theory or theories accounting forthe verdict—money-or-property fraud, honest-services fraud, or both. See App. 430a.3 Defendants opposed theGovernment-proposed special interrogatories and urged,instead, standard general-verdict forms. Id., at 432a. Comprehending, however, that in the event of a guilty verdict, “the jury’s specification of the [mail-]fraud theory might [aid] appellate review,” ibid., Defendants proposedan accommodation: Upon return of a guilty verdict on anymail-fraud count, jurors could be asked to specify the theory on which they relied, id., at 433a.
interrogatories, the Government represented that it would not object to submission of the mail-fraud counts for jurydecision by general verdict. Id., at 228a. The jury returned general verdicts of “guilty” on the three mail-fraud counts;5 it also found defendant Black guilty of obstruction of justice in violation of 18 U. S. C. §1512(c)(1), and it acquitted Defendants on all other charges.
F. 3d, at 600–602, but further determined that Defendants could not prevail even if those instructions were wrong, id., at 602–603. For this determination, the court homed in on the Government’s special-verdict proposal.
We granted certiorari in this case, 556 U. S. ___ (2009), along with Skilling v. United States, 558 U. S. ___ (2009), and Weyhrauch v. United States, 557 U. S. ___ (2009), todetermine what conduct Congress rendered criminal byproscribing, in §1346, fraudulent deprivation of “the intangible right of honest services.” We also agreed to consider in this case the question whether Defendants forfeited their objection to the honest-services juryinstructions by opposing the Government’s request for special verdicts.
U. S. ___, ___ (2009) (slip op., at 11) (“Courts properly avoid . . . explorations into the jury’s sovereign space.”).
R. Co., 167 F. 2d 54, 70 (CA2 1948) (L. Hand, J., concurring) (“I should like to subject a verdict, as narrowly as was practical, to a review whichshould make it in fact, what we very elaborately pretend that it shouldbe: a decision based upon law. In criminal prosecutions there may be,and in my judgment there are, other considerations which intervene to make such an attempt undesirable.”).
10See Fed. Rule Crim. Proc. 57(b) (when there is no controlling law, “[a] judge may regulate practice in any manner consistent with federallaw, these rules, and the local rules of the district”).
* * * For the reasons stated, we vacate the judgment of theCourt of Appeals and remand the case for further proceedings consistent with this opinion.
JUSTICE SCALIA, with whom JUSTICE THOMAS joins,concurring in part and concurring in the judgment.
S. p. A., 560 U. S. ___, ___ (2010) (SCALIA, J., concurring inpart and concurring in judgment) (slip op., at 1). The Court accurately quotes the text of the Rule, see ante, at 7, the meaning of which is obvious. No more should be said.

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