Oral argument: March 23, 2009
Appealed from: United States Court of Appeals for the Fifth Circuit (March 17, 2008)
FIFTH AMENDMENT, DOUBLE JEOPARDY, COLLATERAL ESTOPPEL, HUNG JURY, ENRON
The doctrine of collateral estoppel prevents two parties from re-litigating an issue of fact determined in a prior proceeding. In criminal law, this doctrine is incorporated into the Double Jeopardy Clause of the Fifth Amendment, which prohibits the government from prosecuting an individual twice for substantially the same crime. In 2004, the United States charged three senior executives of Enron Corporation with multiple counts of money laundering, securities fraud, wire fraud, and insider trading. At trial, the jury acquitted the defendants on several charges, but could not agree on a verdict for the rest. The United States then recharged the defendants with several of the crimes on which the jury in the previous trial failed to reach a verdict. The defendants moved to dismiss the charges, arguing that collateral estoppel prevented the government from retrying them. The defendants based their motion on the fact that the jury acquitted the defendants on counts that shared common factual elements with the charges the jury failed to reach a verdict on. The district court denied the defendants’ motion, and the Fifth Circuit upheld the district court’s decision. In this case, the Supreme Court of the United States will decide whether, under the Double Jeopardy Clause, the government may retry defendants acquitted of some charges on factually related counts on which the jury failed to reach a verdict on at a preceding trial.
The courts of appeals are deeply divided as to whether, when conducting the Fifth Amendment collateral estoppel analysis set out by this court in Ashe v. Swenson, 397 U.S. 436 (1970), a court should consider the jury’s failure to reach a verdict on some counts. The issue presented here is:
1. Whether, when a jury acquits a defendant on multiple counts but fails to reach a verdict on other counts that share a common element, and, after a complete review of the record, the court of appeals determines that the only rational basis for the acquittals is that an essential element of the hung counts was determined in the defendant’s favor, collateral estoppel bars a retrial on the hung counts.
Does collateral estoppel prevent a prosecutor from retrying a defendant on charges where the jury in a previous trial failed to reach a unanimous verdict, if that jury acquitted the defendant on other counts that share essential factual elements with the hung charges?
In November 2004, the government indicted F. Scott Yeager, Joseph Hirko, and Rex Shelby (“defendants”) on numerous counts of conspiracy to commit securities and wire fraud, securities fraud, wire fraud, insider trading, and money laundering. See United States v. Scott Yeager, 521 F.3d 367, 369 (5th Cir. 2008). The defendants were all senior executives of EBS, the broadband and telecommunications unit of Enron Corporation (“Enron”). See id. The indictment alleged that beginning in 1999, the defendants purposely sought to deceive the public by making false statements about EBS’s financial condition. The government also accused the defendants of selling millions of dollars worth of Enron stock at the same time they were making these false statements. See id. at 370.
In July 2005, the Government tried the defendants in the United States District Court for the Southern District of Texas. See Yeager, 521 F.3d at 369–370. The jury acquitted Yeager of the conspiracy, wire fraud, and securities fraud charges, Hirko of the insider trading and money laundering chargers, and Shelby of the insider trading charges, respectively. See id. at 370. The jury was split, and could not reach a decision on the remaining charges. The District Court declared a mistrial on most of those charges, while granting the defendants’ motion for acquittal on two other charges. See id. In November 2005, the Government recharged Shelby and Hirko with all of the mistried charges, and recharged Yeager with some of the mistried insider trading and money laundering charges. See Yeager, 521 F.3d at 370. Shelby and Hirko moved to dismiss all of the recharged counts except for the conspiracy charges against both of them, and the insider trading charge against Hirko. See id. Yeager moved to dismiss all the recharged counts of insider trading and money laundering. See id. The defendants argued that the doctrine of collateral estoppel prevented the Government from recharging the defendants with crimes of which the Southern District of Texas had previously acquitted the defendants. See id.
The Southern District of Texas denied the defendants’ motions, and they made an interlocutory appeal to the United States Court of Appeals for the Fifth Circuit (“Fifth Circuit”). The Fifth Circuit applied the two-step analysis articulated in Bolden v. Warden, W. Tenn. in determining whether the defendants’ prior acquittals prevented the Government from recharging the defendants. See Yeager, 521 F.3d. at 371 (citing Bolden v. Warden, W. Tenn. High Sec. Facility, 194 F.3d 579, 584 (5th Cir. 1999)). The first step of the analysis involves determining the findings of fact made in the first trial. See Bolden at 584. The second step entails deciding whether the findings of fact in the first trial “constitute essential elements of the offense in the second trial.” See id. Applying the two-step analysis to the defendants’ motion, the Firth Circuit found that the facts determined by the jury in the first trial did not constitute the essential elements of the offense in the second trial, and affirmed the Southern District of Texas’s ruling. See Yeager at 370–381.
The Supreme Court’s ruling on this case will determine whether the government may retry a charge that the jury failed to reach a verdict on in a previous trial, if, at the previous trial, the jury acquitted the defendant of other charges that share a common element with the hung charges. The Supreme Court’s ruling will effect how federal courts apply the doctrine of collateral estoppel and the Double Jeopardy Clause in federal criminal proceedings. A decision in favor of the defendants will prevent the government from retrying charges in which the jury in the previous trial failed to reach a verdict, if, at trial, the jury also acquitted the defendant on other charges that share a common element with the hung charges. On the other hand, a decision in favor of the United States will allow the government to retry hung charges against a defendant, despite the fact that at the previous trial the jury acquitted the defendant on charges that share common factual elements with the hung charges. Irrespective of the outcome, this case will affect the ability of the government to prosecute violators of the law, as well as the extent to which the Double Jeopardy Clause protects criminal defendants from being tried multiple times for the same offense.
The United States believes that an outcome in favor of the defendants would make it more difficult for government prosecutors to obtain a conviction of those who may have violated the law. See Brief for the United States at 22. The United States is concerned that a decision in favor of the defendants will prevent the government from having a full and fair opportunity to obtain a conviction in situations where a retrial is a “continuation of the initial prosecution,” rather than a “successive prosecution” prohibited by the Double Jeopardy Clause. See id. at 22–23. There may be situations where a jury fails to reach a verdict on a charge, and the inability of prosecutors to recharge the defendant would hamper the goal of protecting society from criminals. See id. The United States contends that the retrial of charges that resulted in a hung jury at the first trial does not upset the finality of court decisions, but instead simply “completes the original prosecution.” See id. at 26.
In addition, the United States believes that the public interest is best served if the government can retry hung charges in situations where the jury delivers a mixed verdict. See Brief for the United States at 27. The United States contends that a defendant should not benefit from the protection of collateral estoppel and the Double Jeopardy Clause on charges that result in a hung jury, because a hung jury is legally distinct from an acquittal. See id. The United States believes that it should be allowed to retry a defendant on a charge on which the jury in the previous trial refused to acquit the defendant. See id. Ultimately, the United States argues both that it should have one full and fair opportunity to prosecute a defendant, and that the public interest in ensuring that criminal violations are adjudicated in court outweighs the financial and mental costs a defendant bears when defending a retrial of a hung count. See id. at 41.
Those who support the defendants believe that a ruling in favor of the United States will weaken the protection provided by the Double Jeopardy Clause and the doctrine of collateral estoppel. See Brief for Petitioner at 16. A group of criminal law professors further contend that decision in favor of the United States will allow prosecutors to circumvent the protections afforded to criminal defendants under the Double Jeopardy Clause. See Brief for Criminal Law Professors (“CLPs”) In Support of Petitioner at 22–25. They go on to argue that a weakened Double Jeopardy Clause would diminish the finality of jury decisions and defenses against multiple criminal prosecutions. See CLPs Brief at 15–17. The defendants themselves argue that protecting the Double Jeopardy Clause is especially important, given the recent proliferation of overlapping felonies in federal criminal law. See Brief for Petitioner at 28.
The National Association of Defense Lawyers is concerned that the Fifth Circuit’s decision, if affirmed, will provide government prosecutors with an incentive to overcharge defendants. See Brief for National Association of Criminal Defense Lawyers In Support of Petitioner (“NACDL) at 14. The NACDL believes that by overcharging a defendant, the government gains the opportunity to retry charges resulting in a hung jury at a new trial in front of a new jury. See id. The NACDL is concerned this will result in criminal defendants facing multiple criminal prosecutions despite only being accused of one crime. See id.
The Double Jeopardy Clause of the Fifth Amendment to the U.S. Constitution provides that no person shall “be subject for the same offense to be twice put in jeopardy of life or limb.” U.S. Const. amend. V. Collateral estoppel, a component of double jeopardy, is at issue in this case. See U.S. v. Yeager, 521 F.3d 367, 371 (5th Cir. 2008). Collateral estoppel precludes parties from re-litigating “an issue of ultimate fact” once it has “been determined by a valid and final judgment.” Ashe v. Swenson, 397 U.S. 436, 443 (1970). Collateral estoppel may preclude both multiple prosecutions of the same offense and the subsequent prosecution of a different offense. See U.S. v. Brackett, 113 F.3d 1396, 1398 (5th Cir. 1997). The U.S. Court of Appeals for the Fifth Circuit (“Fifth Circuit”) has interpreted the U.S. Supreme Court’s decision in Ashe, 397 U.S. at 443, to preclude a subsequent prosecution of a different offense “if one of the facts necessarily determined in the former trial is an essential element of the subsequent prosecution.” See Brackett, 113 F.3d at 1398. To determine whether collateral estoppel precludes a subsequent prosecution, the Fifth Circuit employs a two-step analysis, first determining which facts were “necessarily decided in the first proceeding,” and then deciding which of those facts, if any, would “constitute essential elements of the offense” in the subsequent trial. Bolden v. Warden, W. Tenn. High Sec. Facility, 194 F.3d 579, 584 (5th Cir. 1999).
In this case, the Supreme Court will decide if collateral estoppel precludes a prosecutor from retrying a defendant on hung counts, counts on which a jury failed to reach a verdict, if that jury acquitted the defendant on other counts that share an essential element with the hung counts. The Supreme Court’s decision in this case will resolve an interpretive conflict between the Fifth Circuit, on the one hand, and Sixth, Seventh, Ninth, and Eleventh Circuits, on the other. See Petition for Writ of Certiorari for Joseph Hirko at 12–21.
Application of Collateral Estoppel to Hung Counts
Petitioners, F. Scott Yeager, Joseph Hirko, and Rex Shelby (“defendants”), contend that the U.S. District Court for the Southern District of Texas (“Southern District of Texas”) and the Fifth Circuit erred by failing to collaterally estop their hung counts. See Brief for Petitioner, F. Scott Yeager at 14–16. The defendants argue that, under Ashe, collateral estoppel precludes re-prosecution of their hung counts. See id. at 16. According to the defendants, the Ashe test is not a bright line test. See id. at 17. Instead, it requires a court to undertake a case-by-case analysis of the record, including pleadings, evidence, and “other relevant matter,” to determine “whether a rational jury could have grounded its verdict upon an issue other than that which the defendant seeks to foreclose from consideration.” Id. at 17 (citing Ashe, 397 U.S. at 444). According to the defendants, no such issue exists with regard to their hung counts. See id. at 45–51. In addition, the defendants contend that applying collateral estoppel to preclude re-prosecution of hung counts is in keeping with judicial precedents. See id. at 23–27, 40–44. If a jury acquits a defendant of some counts and hangs on others, collateral estoppel may apply to the hung counts. See id. at 41 (Citing United States v. Frazier, 880 F.2d 878, 883 (6th Cir. 1989)). According to the defendants, collateral estoppel applies to hung counts if a court determines that the facts “necessarily decided” by a jury in acquitting a defendant of other counts constitute “essential elements” of the hung counts. See id. at 44.
Conversely, the United States contends that the Southern District of Texas and the Fifth Circuit correctly refused the defendants’ motion to collaterally estop the re-prosecution of the hung counts. See Brief for the Respondent, United States at 18–19. According to the United States, the Double Jeopardy Clause does not preclude re-prosecution of hung counts. See id. at 19–29. The United States contends that “the Double Jeopardy Clause affords the government one complete opportunity to convict those who have violated the law” and therefore, necessarily embraces retrials of mistrials See id. at 22–23. The United States argues that even if a defendant is acquitted of some counts, the re-prosecution of a hung count could not possibly constitute double jeopardy, because the “defendant remains in continuing jeopardy.” Id. at 23–29. According to the United States, the Double Jeopardy Clause’s protection does not commence until “there has been some event, such as an acquittal, which terminates the original jeopardy,” and here, no such terminating event occurred. Id. at 24 (citing Richardson v. U.S., 468 U.S. 317, 325 (1984)). Finally, Supreme Court precedent holds that Double Jeopardy does not preclude the government from “vindicat[ing] its societal interest in the enforcement of the criminal laws” in more than one proceeding. Id. at 23 (citing Oregon v. Kennedy, 456 U.S. 667, 672 (1982)).
The defendants retort that, even if the Fifth Circuit correctly held that collateral estoppel does not preclude all re-prosecution of hung counts, the Fifth Circuit incorrectly applied the Ashe test to this case. See Brief for Petitioner at 45. According to the defendants, although a jury acquitted them of failing to disclose insider information, the government has recharged them with trading on that same insider information, and both the Southern District of Texas and the Fifth Circuit have upheld the charge. See id. at 49–51. According to the defendants, insider trading is an “essential element” of the subsequent trial that was “necessarily decided in the first proceeding” when the jury acquitted petitioners of failing to disclose insider information, and therefore, collateral estoppel precludes re-prosecuting petitioners for those counts. See id. at 45–46. The defendants contend that the Fifth Circuit incorrectly gave “decisional significance to the jury’s failure to act” by inferring that because the jury failed to acquit the defendants on the hung counts, the actual acquittals did not establish an “essential element” of the subsequent trial. Id. at 45.
Conversely, the United States contends that the defendants failed to prove that the acquittals established an “essential element” of the hung counts, i.e. an absence of insider trading. See Brief for the Respondent at 41. According to the United States, the Southern District of Texas correctly concluded that the impetus behind the jury’s decision to acquit the defendants of conspiracy, securities fraud, and wire fraud may well have been separate from “essential elements” comprising the hung counts. See id. at 44–45. For example, a finding that the defendants did not engage in a conspiracy might have motivated the decision to acquit, rather than substantive findings that would be relevant to determining “essential elements” of the hung counts of insider trading and money laundering. See id.
In Yeager v. United States, the U.S. Supreme Court will determine if collateral estoppel precludes a prosecutor from retrying a defendant on hung counts, counts on which a jury failed to reach a verdict, if that jury acquitted the defendant on other counts that share an essential element with the hung counts. The Supreme Court’s decision in this case will resolve an interpretive conflict between the U.S. Courts of Appeals. The decision will likely impact the application of the Fifth Amendent’s Double Jeopardy Clause and the protection it affords criminal defendants, as well as the ability of prosecutors to retry hung counts.
Edited by: Joe Hashmall
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