Thursday, January 15, 2009
The Smartest Guys In The Room?: Fifth Circuit Makes Interesting Forfeiture By Wrongdoing Rulings In Enron Appeal
The recent opinion of the Fifth Circuit in United States v. Skilling, 2009 WL 22879 (5th Cir. 2009), reveals that the forfeiture by wrongdoing doctrine can apply not only against criminal defendants but also against the prosecution.
In Skilling, former Enron Corporation CEO Jeffrey K. Skilling Jeffrey K. Skilling appealed from his convictions for conspiracy, securities fraud, making false representations to auditors, and insider trading. And on appeal, he sought to prove prosecutorial misconduct by presenting hearsay evidence that potential witnesses did not meet with him because they feared governmental reprisal. According to Skilling, this hearsay evidence should have been admissible at trial pursuant to Federal Rule of Evidence 804(b)(6), which deems admissible "[a] statement offered against a party that has engaged or acquiesced in wrongdoing that was intended to, and did, procure the unavailability of the declarant as a witness."
Now, usually, Rule 804(b)(6) applies when a criminal defendant kills or incapacitates a potential witness for the prosecution, but the Fifth Circuit correctly noted that the Rule also applies "where the government is responsible for making a witness unavailable." But the problem for Skilling was that he did not claim at trial that the hearsay evidence was admissible under Rule 804(b)(6), meaning that the Fifth Circuit could only reverse for plain error. And the problem for Skilling was that he could not demonstrate such plain error.
And the reason why he couldn't do so is actually pretty interesting. The hearsay evidence that Skilling presented were the hearsay declarations of an attorney for several former Enron employees. But what he failed to present was any material independent of the hearsay itself which tended to indicate wrongdoing by the government. According to the Fifth Circuit, this was fatal because
"this court has not resolved whether, to invoke Rule 804(b)(6) properly, a party must make this evidentiary showing with material independent of the hearsay itself. This is a question of first impression, and there are persuasive arguments for either position or for a hybrid of the two. This question is especially difficult here given that it was the defense counsel who made the uncorroborated hearsay declarations. Under such circumstances, any error is not plain."
I agree with the Fifth Circuit's ruling that there could not be plain error because the hearsay issue was a question of first impression. That said, I wonder how the court would have dealt with the issue if Skilling had preserved it for appeal, and it will be interesting to see which approach the Fifth Circuit and other courts ultimately take on the "independent material" issue.
(The Fifth Circuit did vacate Skilling's sentence and remand for resentencing based upon a different issue)