Dec 8, 2009

The Supreme Court

WARNING: Long post on the law.

So, sometimes a job like mine can have its benefits. Yesterday, I was able to fly to Washington, DC in order to hear today's oral argument at the Supreme Court for two cases, Black v. U.S. and Weyhrauch v. U.S. Both involve 18 U.S.C. 1346--known popularly as "honest services fraud." First, a quick summary of them both.

Black v. U.S.

Conrad Black, former CEO of Hollinger Corp. (owner at one point of over 1,000 newspapers), was charged by the government for depriving Hollinger of his 'honest services' for allegedly hiding personal profit through non-competition agreements during the sale of newspapers. Black continues to contend that (a) no economic harm was suffered by Hollinger and (b) his transactions were a legal way to lower his personal taxes. His argument is that 'honest services' is too vague a standard and much also have as an element a contemplated economic harm to the victim.

Weyhrauch v. U.S.

Bruce Weyhrauch was an Alaska state legislator. When he had decided to not run for reelection again, he began discussions with Bill Allen, CEO of VECO Corp., about a potential job. However, there was still a tax bill directly affecting VECO before the legislature. Though no incriminating statements came to light and there was no state law requiring disclosure of his conflict-of-interest, the government indicted Weyhrauch. He contends that without a state law requirement to disclose, 'honest services' simply becomes a common law crime for the courts to create. This violates the common federal principle that all crimes be clear and unambiguous so that no defendants can engage in illegal activity without the reasonable ability to understand what they did and why it broke the law.

Argument Synopsis

Entering the Court through the ticketed door (on the north side, basement), we were led through a side entrance to the courtroom. At 10 a.m., about 40 minutes after we had sat down, the clerk called out the famous "Oyez, oyez, oyez!" and the justices entered from behind the massive, velvet curtains. Chief Justice Roberts called out Black v. U.S., and Miguel Estrada, the counsel of record (who, incidentally, had been nominated by George W. Bush for the D.C. Circuit Court of Appeals but was held up because he was too conservative for Democrats in Congress) stepped forward. He was able to get reasonably far into his economic harm argument before the justices began peppering him with questions. Then it began.

Justices Ginsburg and Sotomayor seemed, at the outset, most leery of the economic harm principle, while Justices Roberts and Kennedy seemed to be asking him to flush it out a bit, though it was difficult to tell whether they support or oppose the provision. It was pretty uneventful--Estrada stumbled a few times (especially when Justice Kennedy asked him why there was no 'harmless error' in the appellate court's ruling), but he covered that in the remainder of his time, three minutes of which he saved for the end of the argument (though at one point, Justice Scalia did ask him whether he was presenting the issue of constitutionality, which he answered in the affirmative, beginning a snowball that only grew, as you'll see).

When he had sat down, Michael Dreeben from the Solicitor General's office stepped forward. Immediately, he was inundated with questions. It seemed the entire Court (except for the always silent Justice Thomas and a surprisingly quiet Justice Stevens) was arrayed pretty well against the government. Justice Breyer asked if the government felt it could charge a lazy worker who told his boss that he was doing work when he was in actuality reading racing forms with fraud, punishable by up to twenty years. Out of 150 million workers in the United States, he noted, probably 140 million would be committing federal crimes unawares. That was ridiculous, countered Dreeben--because that lacks materiality (that is, even though he lied, it didn't change the actions of the victim--the company). Justice Sotomayor then asked how it would change if it were someone who was supposed to be working (on a big account or something; she didn't specify), but instead chose to ditch work and go to a ball game. In that case, it was a material. Dreeben said that the government would never actually pursue a case like that. Justice Breyer would have none of it; it doesn't matter whether the Justice Department would actually pursue a case. What matters is that the crime itself might be unconstitutional.

That leads me into the other big issue the Court was dealing with. While both Black and Weyhrauch seek a method of interpreting honest services fraud so that the statute remains extant but less vague, the justices seemed prepared to declare the whole thing unconstitutionally vague right now. A problem in scheduling, however, means that the other honest services case, Skilling v. U.S., has neither been briefed (the initial briefs are due this Friday) nor argued (probably in late March). That case may deal with the overall constitutionality of honest services fraud. Justice Sotomayor, however, wanted to talk about that issue now, to which Mr. Dreeben continuously (and correctly) demurred.

The Weyhrauch argument was effectively a continuation of the Black argument. Mr. Dreeben was up again, but a new counsel of record (I don't have his name in front of me) was, too. Again, the justices seemed unconvinced of the ability of the courts to meld some focus out of the 'mess'.

Overall, it was incredibly interesting, though hard to follow at some points. The transcripts have been released (see here and here).

My bets? I'm guessing the votes come in as so (and these may change with the Skilling argument):

Roberts, C.J.: overturn as unconstitutional
Stevens, J.: keep as constitutional
Scalia, J.: overturn as unconstitutional
Kennedy, J.: severely limit
Thomas, J.: overturn as unconstitutional
Ginsburg, J.: severely limit
Breyer, J.: overturn as unconstitutional
Alito, J.: overturn as unconstitutional
Sotomayor, J.: overturn as unconstitutional

Now, some of these are just educated guesses. Neither Roberts nor Alito gave away their hands too much. However, they seemed to ask more questions and have more issues with both the remedies presented by the petitioners and the statute being upheld in the way the government wants it. Stevens wrote the dissent for McNally v. United States, saying that 'intangible rights' such as honest services were definitely constitutional, even without the current statute (1346 was enacted as a response to the Court's decision in McNally). Kennedy seems reticent to ever overturn anything, though he may come out against it, since he had a lot of issues with the fuzzy line of applicability. Sotomayor explicitly said that she didn't know how to apply it, Breyer came up with five or six hypotheticals of people who would be guilty of fraud under the statute but obviously shouldn't be, and Ginsburg didn't really seem to like any of the remedies posited. That leaves Scalia and Thomas. Scalia hates honest services fraud and has made that abundantly clear. His new goal seems to be to have it purged from the tomes of the law. Thomas usually agrees with Scalia, and a textualist (like me) hates this kind of law, which begs courts to create standards from vague legislative language, effectively creating law.

So--that's where I was today. What were you up to?

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