Honest Services Mostly Survives
From Prof Berman’s blog on Sentencing….

June 24, 2010 12:36 PM | Posted by Bill Otis | 2 Comments | No TrackBacks

The Supreme Court handed down its three honest services opinions this morning (Skilling, Black and Weyhrauch). By far the most important is the Skiling case. Seldom has a defendant suffered a more devastating win. Skilling, it will be recalled, was one of the Enron executives who made a fortune short-selling the stock while lying to shareholders and employees about Enron’s true financial condition.
Skilling won what was certainly the most hyped part of the case. That is, he won the vacating of his conviction for conspiring to violate the honest services statute, on the ground that the conviction came about under what the majority decided was an excessively broad construction of the law. But that is pretty much as far as it went for Skilling. The conviction was not reversed; it was remanded to the lower courts to determine whether the error was, against the backdrop of the other massive evidence of Skilling’s deceitful behavior, harmless.

Almost everything else in the case was bad news for Skilling and other honest services defendants.
First, Skilling lost his challenge to the trial as a whole as having been undertaken against a backdrop of poisonous publicity that made a fair trial impossible in the Houston venue. The Court’s decision here was to be expected. Any other holding would put a premium on the audacity of the defendant’s crime. Where, for example, were we to try Timothy McVeigh? The backside of the moon?

Second, Skilling lost his facial challenge to the honest services statute. The Court held point-blank that the statute is not unconstitutionally vague when limited to bribes and kickbacks. It was not so limited in the instructions given on the conspiracy count at Skilling’s trial, so Skilling won the vacating of that single count. But, for two reasons, the Department of Justice must be thrilled that the statute survived.

The first is that, as the Court pointed out, “The ‘vast majority’ of the honest-services cases involved offenders who, in violation of a fiduciary duty, participated in bribery or kickback schemes.” Thus the statute remains available without legislative re-writing for the bulk of the cases in which the Department would want to use it, including the on-going trial of former Illinois Governor Rod Blogojevich. The essence of the honest services count against Blagojevich is that his appointment of a replacement for ex-Senator Barack Obama was up for auction. That is a straightforward application of the statute as modified by the Court.

The second reason the Department should be thrilled is that most observers of the oral argument had already counted the statute as dead meat. Justice Scalia, who dissented here, was leading the charge against it, and it was hard to find a single voice on the Court who resisted his attack. But in the opinion, Scalia was able to carry with him only Justices Thomas and Kennedy. Justice Breyer, who had seemed openly to riducule the statute at oral argument, joined the majority finding the statute constitutional, as limited.

The good news for the government doesn’t stop there. The Court noted that, while the legislative language adopted in response to the Court’s first limiting decision about the statute in the 1987 McNally case still left it too vague, Congress could try again. Indeed it repeated verbatim its observation in McNally that, if Congress wanted to cover boader forms of dishonesty — for example, self-dealing and undisclosed conflicts of interest that do not directly result in financial harm to the betrayed party — it could do so, but “it must speak more clearly than it has.” Writing statutory language that will reach these somewhat less concrete forms of dishonesty presents a daunting task, as the Court cautioned, but not an insuperable one.

The good news for the rest of us may lie in the longer-term implications of the approach the Court used to preserve the core of the honest services statute. From a law professor’s point of view, the most interesting aspect of the decision is the debate between Justice Ginsburg and Justice Scalia about whether a limiting construction of a statute amounts to respect for, or an abrogation of, Congress’s sole power to write the law. Scalia accuses the majority of simply judicially enacting the honest services statute it wants, sweeping obvious ambiguity and confusion under the rug. Ginsburg answers that preservation of the statute, in a mildly limited form — but in a form consistent with the decided majority of interpretations adopted over many years of lower court review — shows respect for Congress and restraint in exercising the Court’s power to invalidate a statute in its entirety.

Reasonable minds will differ on who won that debate. But what is most telling is that each side was eager to show that it was the most devoted to judicial restraint. Compared with the breezy if not nearly unconscious assumption of judicial supremacy of the Warren Court, this is itself gratifying and important. It is a signal that the conservative legal movement, while far from universally successful in winning substantive points over these last few years, has changed the terms in which the debate is conducted.

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