Court Limits the Reach of the "Honest Services" Provision.

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Disgraced Enron executive Jeffrey Skilling and the reactionary Canadian media magnate Conrad Black are, to put it mildly, unsympathetic defendants. But whether or not a defendant is sympathetic should not determine the validity of a legal claim (after all, Ernesto Miranda of "Miranda rights" fame was almost certainly guilty). I said at the time of the oral argument in Skilling's trial that his legal case was actually very persuasive. So it's not surprising that I think it's a good thing that the Supreme Court today unanimously threw out Skilling's conviction, which was based on a federal statute that makes it a crime to deprive someone -- in this case, shareholders -- of "the intangible right of honest services." (The Court also remanded Black's case back to the lower courts in light of the ruling.)  

The fundamental constitutional issue at stake was whether the statute was too vague to make it clear which actions were criminal and which were not -- a problem that strikes at the core of the due-process guarantees in the Fifth Amendment.

A majority of the Court, through Ginsburg, argued that the provision in question should be construed to apply only to "schemes to defraud involving bribes and kickbacks." Since Skilling had not even been accused of such activities, his actions were beyond the reach of the "honest services" statute. But I'm actually very sympathetic to the broader argument advanced by Scalia (joined entirely by Thomas and in important parts by Kennedy) that "in transforming the prohibition of 'honest-services fraud' into a prohibition of 'bribery and kick-backs,' [the Court] wield[ed] a power we long ago abjured: the power to define new federal crimes." In particular, like Scalia, I'm also puzzled by assertions that effectively rewriting -- rather than nullifying -- overly broad federal statutes reflects "judicial modesty." As Scalia says, it is exceptionally implausible that Congress intended only to criminalize bribery and kickbacks, and I think a good case can be made that the statue as a whole should be thrown out for vagueness. But at least the decision should compel Congress to more carefully define what additional activities it believes should be banned. This is as it should be: Giving the kind of open-ended discretion to prosecutors that the current provision afforded was a bad idea.

A final point of interest in this case is the partial dissent of Sotomayor; it provides another data point suggesting that she may be an emerging leader of the Court's liberal wing on civil liberties. While agreeing that the "honest services" provision was unconstitutionally vague at least as applied to Skilling, Sotomayor (joined by Stevens and Breyer) found that Skilling did not receive a fair trail. Sotomayor argues that the jury selection process was inadequately thorough given that Skilling's trial was held in a location in which he had become enormously unpopular.

-- Scott Lemieux

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