Oral Arguments in Skilling Case Focus on Jury Selection Issues, Less Emphasis on Honest Services Fraud

According to Lyle Denniston at SCOTUSblog,  Ashby Jones at the Wall Street Journal Law Blog, and Professor Ellen S. Podgor of Stetson University College of Law and the White Collar Crime Prof Blog, the U.S. Supreme Court seemed more interested in the jury selection/fair trial issues in yesterday's oral arguments in the case of former Enron CEO Jeffrey Skilling, Skilling v. U.S., Case No. 08-1394 then it did in the constitutionality of 18 U.S.C. 1346, the federal honest services fraud statute. The transcript of the oral argument may be read here. After lengthy questioning regarding the jury selection at Skilling's trial by Justice Stephen G. Breyer and others, Chief Justice John G. Roberts, Jr., raised the question of honest services. Skilling's counsel, Sri Srinivasan, appeared to have adopted the strategy of arguing for a new trial based upon juror bias relating to the Enron scandal rather than a reversal of Skilling's convictions for honest services fraud. Srinivasan argued that the Department of Justice was interpreting the law broadly enough to reach virtually any falsehood told by an employee.

Deputy Solicitor General Michael R. Dreeben argued for the government. Dreeben argued ways in which the Court could interpret the honest services fraud statute in order to avoid holding it unconstitutionally vague. Justice Anthony Kennedy stated to Dreeben that it was Congress' job to rewrite the statute and Justice Antonin Scalia remarked on the excessive scope of the statute.

The Court's decision in the case is expected this spring or summer. The parties' arguments regarding honest services fraud largely mirrored the arguments in the two other challenges to 1346 which the Court had heard this term. Commentators have opined that 1346 may not survive without being sent to Congress for reshaping.

Corporate Defense: Laughter as a "Defense" Mechanism

               A lighthearted article in Legal Times by Michael D. Jones of Kirkland & Ellis, “When Faced With an Angry Jury, Laughter May Be the Best Defense,” acknowledges that this era of anger over Wall Street bailouts and rampant corporate greed or fraud is an especially bad one for counsel who defend corporations. The author offers a potential answer to juries’ outrage—laughter. The article notes the an anti-business coverage in the news media and a backlash by juries, citing a February verdict against Novartis in Alabama—a notorious pro-corporate state—for $78.4 million, including $50 million in punitive damages, for overcharging Medicare for prescription drugs. 

              The article cites a 2004 study which found that angry or irate jurors were the “least influenced” by the defense’s case, because such jurors tend to jump to conclusions and act on them. Such angry jurors are less likely to favor the less sympathetic party or the party with more nuanced arguments—which is frequently the corporate defendant. It continues to note that traditional assumptions regarding jurors may not apply in today’s anti-corporate climate, and that white-collar workers may be just as angry as blue-collar workers. In view of this reality, counsel with corporate clients must seek to diffuse or redirect this anger.

                The author concludes that attorneys defending corporations should consider using trial tactics which include humor and emotional redirection. The American Psychological Association says that humor is a mechanism to control anger. The author notes that it is difficult for people to be angry and to laugh at the same time. Also, self-deprecating references by counsel force jurors to acknowledge counsel as a human being and in turn can generate more goodwill for one’s client

                However, counsel considering injecting humor into a trial have to be careful that it does not backfire. Humor at the expense of a litigant or witness may cause the jury to sympathize with the opposing party. Timing is also critical, and joking during serious moments can have serious consequences.

                The article also advocates emotional redirection techniques, such as persuading a jury which is determined to help a victim that there is more than one victim in the case. It concludes that in this time of anti-corporate anger, attorneys need to develop trial strategies for dealing with anger—advice not to be taken lightly.