The fallout of the Enron collapse is still with us. In November 2004, the government indicted F. Scott Yeager, an Enron Broadband Services executive, on charges relating to securities and wire fraud, insider trading, and money laundering. The jury acquitted Yeager on some of the counts, but did not reach a verdict on others. The court declared a mistrial and the government subsequently recharged Yeager. Yeager filed a motion to dismiss and argued that the government was collaterally estopped from pursuing these charges because of the previous acquittals. The district court denied the motion to dismiss, and the appeals court affirmed that decision. Yeager petitioned the Supreme Court, which has now granted certiorari to resolve a split among the circuits. Yeager v. United States, 129 S. Ct. 593 (U.S. 2008).
The Fifth Amendment ensures that a citizen need only prove facts in their favor once. Collateral estoppel is part of the Fifth Amendment protection against double jeopardy. Ashe v. Swenson, 397 U.S. 436 (U.S. 1970). The circuits are divided, however, as to the impact of collateral estoppel on elements common to both the acquitted and hung counts.
Yeager argued that collateral estoppel bars a retrial on the mistrial counts when two conditions are satisfied: First, a jury must acquit the defendant on multiple counts but fail to reach a verdict on other counts that all share a common element. Second, the court must determine that the only rational basis for the acquittals was also an essential element in the mistrial counts. With those elements already decided in favor of the defendant, a new trial would force the defendant to relitigate an issue of fact that the jury already decided. Yeager argued that this was a violation of double jeopardy, and his Fifth Amendment rights.
The government had two arguments for why collateral estoppel did not bar a retrial of the hung counts. First, they argued that estoppel applied only if the jury, in acquitting on some counts, necessarily decided a fact that the government must prove beyond a reasonable doubt in order to convict on the second charge. The government also argued that the jury’s rationale was inconsistent since the same facts were essential to both counts yet jury acquitted on one but was hung on the other. With inconsistent verdicts, a defendant has no right to argue that the verdict of acquittal was "the one the jury ’really meant.’" United States v. Powell, 469 U.S. 57 (U.S. 1984).
If the Supreme Court bars the Government from re-trying these counts, Yeager could walk away with no jail time. Yeager will have to face these charges again if the Supreme Court holds that the Fifth Amendment does not bar the previously hung counts. While the public outrage over the Enron debacle might have cooled, for a defendant in a financial scandal case, these are not the best of economic times to face a jury.
The primary materials for the post, including materials connected to the cert petition, are available on the DU Corporate Governance Website.
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