Black v. United States

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Argued December 8, 2009. Decided June 24, 2010.

Authorship: Lyle Denniston of SCOTUSblog

Docket: 08-876

Issue: Whether the “honest services” clause of 18 U.S.C. § 1346 applies in cases where the jury did not find - nor did the district court instruct them that they had to find - that the defendants “reasonably contemplated identifiable economic harm,” and if the defendants’ reversal claim is preserved for review after they objected to the government’s request for a special verdict.

1 Briefs and Documents
2 Opinion Recap
3 Oral Argument Recap
4 Argument Preview
5 Links and Further Information
- 5.1 Media Links
- 5.2 From the Blogosphere

Briefs and Documents

Decision

VACATED AND REMANDED in a 9-0 decision with an opinion written by Justice Ginsburg. Justice Scalia concurred in part and in the judgment, joined by Justice Thomas. Justice Kennedy also concurred in part and in the judgment.

Oral Argument

Transcript (December 8, 2009)

Merits Briefs

Amicus Briefs

Certiorari-Stage Documents

Opinion Recap

Lyle Denniston originally wrote the following for SCOTUSblog

Analysis

For nearly a quarter of a century, federal prosecutors pursuing corruption cases — involving public officials and those in private life — have had a broadly worded criminal law available, and they have used it both creatively and expansively. On June 24, the Supreme Court, while refusing to strike down the law under the Constitution, pared it down to what the majority called its “solid core”: the law may be used only to prosecute bribery or kickbacks. The Court suggested that Congress may want to try to expand the law’s reach, but warned the lawmakers to approach that prospect with constitutional hesitation.

In a separate ruling, also quite significant, the Court made it far harder for defense lawyers in high-profile criminal cases to try to undo guilty verdicts that were reached in a community that was saturated, for months on end, with highly inflammatory publicity and detectable local hostility. The Court indicated it would find verdicts impaired by those conditions only in “the extreme case.”

Three separate rulings, threatening (though not quite nullifying) convictions or prosecutions in three different criminal corruption cases, put an exclamation point on the defeat for government prosecutors in their efforts to salvage wide discretion in employing the so-called “honest services fraud” law, enacted in 1988 in an attempt to overturn a 1987 Supreme Court ruling. The lead ruling — producing 105 pages of often deeply conflicting views — came in the case of a former Enron Corp. official convicted in one of the government’s biggest corruption cases ever. That case, Skilling v. U.S. (08-1394), involved former Enron CEO Jeffrey K. Skilling. Based largely on the Skilling decision, the Court also questioned convictions in the case of Black v. U.S. (09-876). It also summarily disposed of a third case, Weyhrauch v. U.S. (09-1196). Each case must now return to a lower court for another look. (It was in Skilling’s case, alone, that the Court raised significantly the barrier to contesting guilty verdicts based on unfavorable publicity surrounding a high-profile criminal trial.)

Almost from the day Congress enacted the law specifying that fraud can be committed by denying someone the ‘intangible right” to one’s “honest services,” lower courts have struggled to define just what kind of wrongdoing would fit within that concept. Perhaps to illustrate just how uncertain the meaning of the law is, the Justices themselves could not agree on Thursday on how to read the string of lower court decisions that have interpreted the law; six Justices thought the pattern of those rulings was quite clear and definite, but three other Justices said the rulings were a hodgepodge.

The three Justices who read those rulings as varying widely would have struck down the law as unconstitutionally vague. But the other six Justices proceeded on the premise that the Court’s duty was “to construe, not condemn, Congress’ enactments.” And the construction those Justices put on the law was that it criminalizes “bribes and kickbacks — and nothing more.”

The majority thus rejected Justice Department arguments that the law should also be available for prosecuting for “self-dealing” — that is, taking some action that gives one personal gain, without disclosing that fact — or going after conflicts-of-interest. Reading the law as covering anything but bribes and kickbacks, the Court ruled, would raise constitutional questions about enacting a vague law that did not give people clear warning of what was forbidden. (Near the end of the main opinion, the Court in a footnote suggested that, if Congress were to try to add new crimes under the “honest services” law, it would “leave many questions unanswered,” so the lawmakers should proceed with “particular care.”)

Those parts of the ruling, in the main opinion written by Justice Ruth Bader Ginsburg, had the support of Chief Justice John G. Roberts, Jr., and Justices Samuel A. Alito, Jr., Stephen G. Breyer, Sonia Sotomayor and John Paul Stevens. Justices Antonin Scalia — a long-time critic of the “honest services” law — would have struck down the law as too vague to satisfy the Constitution. His opinion had the support of Justices Anthony M. Kennedy and Clarence Thomas.

The dissenters argued that the majority had not simply reinterpreted the “honest services” law, but had actually enacted a new law as if it were doing a legislative task. Of all of the lower court rulings applying that law in specific cases, Justice Scalia wrote for the dissenters, “not one is limited to bribery and kickbacks. That is a dish the Court has cooked up all on its own.” Because the law’s meaning is so unclear, the dissenters said, it cannot be salvaged by an act of judicial “invention.”

In the Skilling case, the former Enron executive had been convicted of a conspiracy to commit fraud, and that charge was based on prosecutors’ claim that Skilling had denied his company his “honest services.” He also was convicted of twelve counts of securities fraud, five counts of making false statements to accountants, and one count of insider trading. (He was found not guilty on nine other counts of insider trading.) As a result of Thursday’s ruling, the conviction on the conspiracy count is to be reevaluated by lower courts, according to the Court. But the Court gave both sides some options when the case goes back to lower courts. It told prosecutors they could try to sustain the conspiracy conviction by showing that it was only a “harmless error” to gain a conviction on that count based on an “honest services” theory. It told Skilling’s defense lawyers that they could attempt to persuade lower courts that every count of his conviction was tainted by the “honest services” fraud charge, so all parts of the guilty verdict should fall. Thus, it was clear that, on Thursday, the Supreme Court itself had not nullified Skilling’s conviction in any final way.

Skilling had earlier won a resentencing in the case, but that has been on hold while his case went to the Supreme Court. The sentencing issue now will be expanded because of the ruling on the “honest services” issue. But Skilling’s lawyers also have plans to seek a completely new trial, on the theory that prosecutors denied them access to information that would have helped the defense.

In the Court’s separate opinion in the Black case, it similarly put into doubt the conviction of former Canadian newspaper magnate Conrad M. Black as well as those of two of his corporate colleagues, but did not overturn their convictions outright. Black and his colleagues had been convicted of violating the “honest services” fraud law by a scheme of corporate compensation that prosecutors attacked as violating duties they owed to the newspaper corporation, Hollinger International.

The Court, noting its Skilling opinion, said that the charge in this other case “did not involve any bribes or kickbacks,” so it ruled that its decision had undercut a jury instruction by the trial judge that they could convict the Hollinger executives if they found that they had misused their positions for private gain or had violated their duty of loyalty to the company. The executives’ lawyer had properly objected to that instruction, so they were free to challenge that on appeal, the Court ruled, even though they had resisted the use of a clarifying verdict form that could have indicated just what part of the verdict on fraud was based on the denial of “honest services.”

But, as in the Skilling case, the Court said that lower courts were free to consider whether the flawed instruction was a “harmless” error; thus, it did not nullify the fraud conviction explicitly. The Court also indicated that Black, who had also been convicted of obstructing justice by destroying records, could raise in lower courts his argument that the “honest services” evidence had spilled over to taint the obstruction conviction.

Justices Kennedy, Scalia and Thomas repeated in the Black case their argument that the “honest services” prosecution had to be overturned because of their view that the law is unconstitutionally vague.

The Court’s third ruling in this trio of cases was a one-paragraph, unsigned opinion (delivered orally by Justice Ginsburg) in the case of Bruce Weyhrauch, a Juneau, Alaska, lawyer, who had been charged with “honest services” fraud for allegedly attempting to obtain legal work from an oil field services company while he was a member of the state legislature, allegedly in return for his voting on tax measures that the company, VECO Corp., had favored. The “honest services” charge was based on prosecutors’ assertions that Weyhrauch had failed to disclose to voters that he was seeking such favors as a legislator.

Weyhrauch has not yet been tried on any charges. On the “honest services” fraud charge, the Ninth Circuit Court had ruled that the case could go ahead even without any proof that the legislator had a duty under state law to disclose his alleged conflict-of-interest. Thursday’s Supreme Court ruling simply wiped out that ruling, and returned the case to the Circuit Court to consider the impact of the Skilling decision. Weyhrauch has been accused in the case of other crimes.

The “honest services” issue was only half of what the Court decided in the Skilling case. With a different pattern of voting among the Justices, the Court rejected Skilling’s claim that his entire trial — and thus all of the convictions — was unconstitutionally unfair because of the atmosphere in which it was tried in Houston — Enron Corp.’s home city — in 2006.

Justice Ginsburg’s opinion finding that Skilling suffered no “actual prejudice” at the trial was supported in whole or significant part by the Chief Justice and Justices Alito, Kennedy, Scalia and Thomas. Justice Alito wrote a separate opinion on that issue, saying he would strike down a jury verdict as unfair only if there were actual proof that a biased juror was actually seated at the trial. Justice Sotomayor dissented, joined by Justices Breyer and Stevens.

There is a very sharp divergence between the Ginsburg and Sotomayor opinions, in how each interpreted the publicity and the community atmosphere that surrounded the Houston trial of Skilling and another top Enron executive, Kenneth Lay (who also was convicted, but who died later). and in how each opinion interpreted the efforts by the trial judge to ensure that an impartial jury was chosen for the trial. The Ginsburg opinion was far less impressed with the negative atmosphere than were the dissenters, and far more favorably inclined toward the actions of the trial judge. (The trial judge was U.S. District Judge Simeon T. “Sim” Lake of Houston; he is not named in either opinion. which is quite customary.)

The majority of the Court rejected two claims by Skilling’s lawyers: one, that the atmosphere in Houston — after the economic collapse of Enron, with widespread economic harm, and the drumbeat of accusatory publicity in the local news media — entitled him to a “presumption of prejudice” that should have led the trial judge to move the trial elsewhere, and, two, that the actual conduct of the jury-selection process resulted in “actual prejudice” because the jury was not impartial. (The dissenters did not object to the majority’s conclusion that the judge did not act unconstitutionally in failing to move the trial out of Houston.)

For the first time, the Court ruled that the “presumption of prejudice” from prejudicial publicity is to be reserved only for “the extreme case,” and the Court cited a handful of its prior rulings in the most extreme cases of prejudice and contrasted those with what occurred in Houston.

After canvassing the jury selection process, and the characteristics of the jurors actually seated in the trial, the majority concluded that Judge Lake had a “sturdy foundation” for his conclusion that a fair jury had been selected.

Oral Argument Recap

The Supreme Court normally is not eager — far from it — to decide a constitutional question; its traditions are for hesitancy about that ultimate stroke. But on Tuesday, the Court seemed quite impatient to ask, and answer, an issue of constitutionality: the validity of the 1988 law that is a vital government weapon against corruption — the “honest services fraud” law.

It seemed, however, that there could be a scheduling problem: should they wait until March, to see if it is properly raised in a case then, or should they tell lawyers sooner to come up with the arguments in one or both of the cases just heard: Black et al. v. U.S. (08-876) and Weyhrauch v. U.S. (08-1196)? No one seemed persuaded of a third option: act as if the issue is already before the Court in one or both of those cases, as presently composed.

It seemed evident, after two hours of oral argument Tuesday, that the Court had agreed to hear three cases this Term on the scope of the “honest services” law in order to make a major declaration about it, and perhaps go all the way to strike it down. Justice Antonin Scalia reflected what appeared to be on the mind of most of his colleagues: ”Why should I turn somersaults” to find a way to save the statute?

Of course, he has been the statute’s most vehement critic on the Court, but none of his colleagues rose to a defense of the law in the first two of the three cases heard on so-called “honest services fraud.”

The arguments in Black and Weyhrauch moved back and forth over what specific “honest services” are demanded by the mail fraud amendment adopted by Congress 21 years ago. Is the law violated if a worker reads the racing form after misleading the boss into thinking he was actually working? What about playing hookey to go to a ball game? Or telling the boss you liked his hat when you really didn’t? More broadly, might the law be so vague that 100 million workers might be violating it without knowing it?

Despite the best efforts of a government lawyer who argued in both cases – Deputy Solicitor General Michael R. Dreeben — to show that the law was not intended to reach trivialities, the Court seemed far from convinced of that. “What’s the source, where do you draw the line, where do you look to see [what's covered]?” asked Justice Sonia Sotomayor. And her question was hardly unique.

So, the Justices wondered, if “the average citizen” cannot know what the law outlaws, can the law be constitutional? And if that is the core question, is it before the Court now, or should it be asked explicitly, to give both sides a chance to focus directly on it? Neither of the petitions for review in the two cases argued Tuesday poses the constitutional question (or does so only implicitly). But the third case, growing out of the Enron scandal (Skilling v. U.S., 08-1394), makes it a part of the first question the Court has agreed to hear.

The merits brief for Jeffrey Skilling is now due on Friday of this week, so the Court will know soon just how energetically the constitutional issue is pressed in that case. Still, that case is not due to be argued until at least late March. If the Court is determined to focus on the constitutional issue, it perhaps may not be prepared to wait that long. But, in the meantime, it would not be entirely fitting to go ahead and write opinions in Black and Weyhrauch pretending that the fundamental question is not lurking in each. That, of courses, raises the prospect that further briefing might now be ordered in one of those cases.

Washington lawyer, Miguel A. Estrada, representing a Canadian media tycoon convicted of failing to give “honest services” to his company, opened the Black argument by noting that lower courts had agreed that the law at issue was “fraught with” constitutional problems of vagueness and intrusion into state powers. There was, he said, no “elegant way out” of the statute’s difficulty. He thus was pressing an argument not made in the opening petition, but pursued energetically in the merits brief.

Argument Preview

Lyle Denniston originally wrote this for SCOTUSblog on December 4, 2009.

At a time when the super-sized pay for high-ranking corporate executives is a major politicalissue, the Supreme Court has agreed to sort out whether a pay package can actually amount to criminal fraud, on the theory that it deprives the company or its stockholders of “honest services” in the executive suite. The issue arises in the high-profile prosecution, and conviction, of Canadian media mogul, Conrad M. Black, and two of his fellow executives at Hollinger International, Inc. Their case, in fact, is one of three the Court is reviewing this Term on the “honest services” fraud issue in federal law.

Background

Two decades ago, Congress sought to revive federal prosecutors’ broad authority to pursue public corruption cases, after the Supreme Court had significantly cut back on that power. The Court did so in the 1987 case of McNally v. U.S. — a decision that lasted one year before Congress moved to undo it. Now, 21 years after Congress passed the so-called “honest services fraud” law, its meaning is still deeply uncertain, and even its constitutionality is a matter of strong debate.

At issue in the McNally case was an old standby law for federal prosecutors, dating back to 1872: the law that makes it a crime to use the mails to carry out a fraud — specifically, the law applies to “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.”

In that case, a former Kentucky state official, James E. Gray, and a private individual, Charles J. McNally, were convicted of committing fraud against the citizens of Kentucky for their role in a scheme to channel state workmen’s compensation insurance commissions to a company controlled by McNally and in which Gray had an interest. The prosecutor’s theory was that they had defrauded Kentucky’s citizens of their right to honest government — technically, denying citizens their “intangible right” to honest services.

The Supreme Court, dividing 7-2, ruled that the mail fraud law only sought to protect property rights, and “does not refer to the intangible right of the citizenry to good government.” If Congress wants to go further, the Court remarked, “it must speak more clearly than it has.” (The only members of the Court at that time who are still serving are Justices Antonin Scalia, who voted in the majority, and John Paul Stevens, who dissented.) Within a year, Congress voted to overturn that decision, passing what is now Section 1346 of the federal criminal code. The new provision, discussed only briefly before passage, defines the phrase “scheme or artifice to defraud” to include “a scheme or artifice to deprive another of the intangible right of honest services.”

Whatever Congress’ specific intent then, the most significant dispute over what Section 1346 now means is whether it applies, at all, to private conduct, where both the person accused and the alleged victim are private, or whether it is simply a public corruption law. (The breadth of its application in public corruption cases is also an issue that the Court is now considering, in a separate case.) What is directly at stake in the new case of Black, et al., v. U.S. is whether it applies to private conduct when prosecutors have not proved explicitly that the alleged fraud caused any economic harm to the victim — in this case, the media company. The lower courts are split on that question, as they are on most other discrete issues involving Section 1346.l

The case has had a high visibility because of the prominence in media circles of Conrad M. Black, former chairman and CEO of Hollinger. He and others built one of the world’s largest media conglomerates, which owned newspapers and other media properties in the U.S., Canada and elsewhere — including the Chicago Sun-Times, the Jerusalem Post, the London Daily Telegraph, and Canada’s National Post.

Prosecutors charged that lack, John A. Boultree and Mark S. Kipnis “stole” $5.5 million in compensation by defrauding Hollinger, and that their actions deprived Hollingerof their “honest services.” Since those were separate theories, prosecutors sought a split verdict, but defense lawyers objected. The jury reached a general guilty verdict, without specifying what theory had persuaded them. Before the verdict, the judge had refused to instruct the jury, as defense lawyers had asked, that they could convict the executives of “honest services” fraud only if prosecutors proved to the jury that the executives did economic harm to Hollinger.

Black was convicted of three counts of mail fraud and one count of obstruction of justice and was sentenced to 78 months in prison, required to pay Hollinger $6.1 million, and fined $125,000. Boultree, the company’s executive vice president and former chief financial officer, was convicted of three fraud counts and was sentenced to 27 months in prison. Kipnis, a Chicago lawyer and the company’s corporate counsel and secretary, also was found guilty of two fraud counts, and was sentenced to six months of home detention.

In their appeal to the Seventh Circuit Court, Black, and his colleagues argued that the “honest services” law did not reach their conduct, since their compensation packages — management fees to which they insisted they were entitled — were not bogus, and were designed only to ease their Canadian tax burden. Since Hollinger suffered no economic harm, it was not deprived of their honest services, they contended.

The Circuit Court upheld their convictions, finding no legaldefect in the trial judge’s failure to instruct jurors on what proof was needed to show “honest services” fraud in the private sector. The Circuit Court suggested that, if the jury had thought the management fees were legitimate, it would not have convicted them, so it must have found they wrongly took Hollinger’smoney. The Circuit Court, however, had an alternative basis for its ruling: it said that, whatever the scope of the “honest services” law, Black and his colleagues had not been harmed because they had resisted having the jury reach a special verdict, so they had “forfeited” any claim on that point.

The lawyers for Black, Boultbee and Kipnis then took the case to the Supreme Court, filing their petition for review on Jan. 9. Before the Court acted on their case months later, Justice Scalia issued a scathing dissent in a separate case (in February), denouncing the sweep that the “honest services” fraud law had now acquired, noting the disputes among lower courts about the law’s scope, and urging the Court to “squarely confront both the meaning and the constitutionality ” of Section 1346.

Petition for Certiorari

The Hollinger executives’ petition was fairly narrow in scope, not specifically raising a constitutional argument about the validity of Section 1346 and making no claim that the law did not apply at all to private conduct. It did hint at a vagueness argument (with some constitutional implication), saying that the Circuit Court ruling allowed federal courts to “fashion — at the government’s urging — private sector ‘crimes’ that no reasonable person could anticipate.”

Its stress on Section 1346 was on the deep division among the Circuits on what the law means, when applied to private conduct, and the specific disagreement about what kind of proof of harm — if any — had to be offered to support an “honest services” fraud charge. Black and the others, it contended, were convicted of crimes based on “jury findings that would have been insufficient to convict in at least five circuits.”

The first question thus focused on whether Section 1346 applied in a private case where the alleged fraud “did not contemplate economic or other property harm to the private party to whom honest services were owed.” In discussing that issue, the petition also complained strenuously of the “unprecedented federalization of wholly private conduct that is properly the concern of state, not federal, law.”

The petition also raised a second question, challenging the Seventh Circuit’s “retroactive” creation of a rule that an accused in a criminal case forfeits any claim of error in the jury instruction by resisting a split verdict approach. In pursuing that issue, the petition strongly condemned the use of split verdicts in criminal cases, saying they undermine the jury system by pressuring reluctant jurors to vote for conviction, by depriving jurors of the option of a general verdict, by undermining jurors’ use of common sense, and by risking confusion among jurors.

The Justice Department urged the Supreme Court not to hear the case. Picking up on the forfeiture conclusion of the Seventh Circuit, Solicitor General Elena Kagan argued that the executives’ defense lawyers did not salvage their claim that the jury had to find economic harm to the company. The instructions they did propose, the response contended, had nothing to do with the proof required for “honest services” fraud. In fact, the government said, the defense lawyers had disavowed in the appeals court the legal claim they were not advancing.

Even so, the Solicitor General went on, the mail fraud law as expanded by Congress in Section 1346 overturned the part of the McNally decision saying that the fraud law only applied to schemes that take away money or property. Those are the ingredients of “property-rights fraud,” and Congress did not restrict “honest services” fraud to those concepts. Thus, the brief contended, prosecutors in an “honest services” case — whether involving public or private activity — need not show harm to the victim’s money or property.

Section 1346 is not unlimited in scope, the Solicitor General said, since an accused is guilty of “honest services” fraud only if the fraud is “material” — that is, it was central to the success of the scheme to act dishonestly. The brief insisted that, on that point, the Circuit Courts “differ somewhat in their articulation” of what is material and what is not.

If there were an error in the jury instructions in this case, the brief said, it was harmless. No guilty verdict would have emerged, it explained, if the jury believed the defense theory about the legitimacy of the executives’ management fees.

The Solicitor General also contended that the second question raised — on the forfeiture of the claim about the jury instruction — was not worthy of the Court’s time.

The Court granted review on May 18. (After doing so, Black’s efforts to getfree on bail were twice denied by Justice Stevens, as Circuit Justice for the Seventh Circuit. Black is in federal prison in Florida. Boultreehas been freed by the trialjudge pending the appeal, and Kipnis received no prison time.)

Merits Briefs

Broadening their challenge significantly, the former Hollingerexecutives’ merits briefs not only condemned the breadth of the law as a license to prosecutors “to target anything that offends their ethical sensibilities,” but also suggested that, if Section 1346 is not read narrowly to require proof of economic harm in the private sector, it would run afoul of the Constitution.

The brief suggested that construing the law as broadly as the federal government does in this case, and others, risked violating separation-of-powers doctrine, because that would constitute “judicial lawmaking” that intruded on Congress’s exclusive power to define what is criminal, risked violating federalism principles, because of a deep intrusion on the states’ power to decide what private conduct to condemn, and risked violating due process principles, because of the effort to criminalize any “dishonest” conduct in the private sector.

In arguing for a requirement of proof of intended economic harm, the brief suggested that it is not necessary for prosecutors to show that such harm actually did occur, but was “contemplated” as part of the scheme. The mail fraud law, it noted, deals not require proof of a completed fraud, but of a scheme to defraud.

The former executives’ brief borrowed from the D.C. Circuit Court, in the 1983 ruling in U.S. v. Lemire, a standard of proof on the economic harm question. The Court should hold, the brief said, that in a case involving claimed “honest services” fraud by an employee, there must be proof of “a failure to disclose something” which the employee kinew posed “an independent business risk to the employer.”

The executives are supported in the case by defense lawyers’ groups, by the U.S. Chamber of Commerce, and by an Enron Corp. executive who also has an “honest services” case under review by the Court this Term: Jeffrey K. Skilling. The Skilling brief sought to persuade the Court to reaffirm the notion — not in dispute in the Blackcase — that a violation of Section 1346 required proof of an effort tores pursue private gain (proof tht was not required in Skilling’s case). The Chamber of Commerce brief focused on the constitutional argument about Section 1346’s supposed vagueness.

The federal government’s brief responded directly to the newly advanced constitutional arguments, contending that Section 1346 is actually limited in scope, and asserting that “Congress did not criminalize all manner of dishonesty.” What the provision basically covers, the brief said, are bribes and kickbacks and “undisclosed self-dealing” and “conflicts of interest.” Those in a position of trust in a company or other entity who become disloyal, the government contended “have ample notice of their criminal conduct.”

Addressing the intended scope of the “honest services” fraud statute, the Solicitor General said that provision would be rendered “largely insignificant” if the Court were to require proof that the dishonest person or executive had intended to cause economic harm. Proof of that kind of harm can be prosecuted under normal fraud principles, involving loss of money or property. What Section 1346 added, according to the brief, was the new and distinct form of non-property liability.

If the executives’ approach were embraced, the Solicitor General contended, it would even put the McNally facts beyond prosecution under the statute that was intended to criminalize that very kind of misconduct.

If the Court is troubled by the Seventh Circuit’s approach to the jury instructions issue in the case, the government suggested, a new trial should not be required, but rather a return to the appeals court to re-examine the harmlessness question.

The government’s side in the case is supported by Citizens for Responsibility and Ethics in Washington, a non-profit advocate of integrity in government, arguing the indispensability of Section 1346 as prosecutors have used it.

Analysis

The Court’s active interest in the “honest services” fraud law’s scope, clear from its willingness to hear three cases on the law this Term alone, suggests strongly that the Court is troubled by the sweep of the law. Justice Scalia’s determined effort to get the sweep of the law before the Court would appear to have had a significant impact on his colleagues. While none may yet be prepared to join him in a constitutional ruling against the law, the prospects seem great for some significant limitation on the law’s breadth.

It is unclear, before the oral argument, whether the Court has any genuine interest in the argument by the government and the Seventh Circuit that the Hollinger executives have forfeited their entire claim about the breadth of the law, because of the defense lawyers’ handling of the jury instruction question. If the Court were looking for a way to avoid a ruling on the substantive statutory question, however, that argument is at hand. The merits briefs, on both sides, tend to play down that issue, and the Court’s grant of review in the face of the government’s use of that argument would indicate that it may not make the difference on whether the merits are reached.

The difficulty, if the Court wants to stay away from constitutional issues, of finding a way to interpret Section 1346 in order to save it is apparent. Lower courts have had difficulty finding common ground in fashioning narrowing interpretations, and there is no reason to think that task would be any easier for the Justices. The key may be how a majority of the Court reads Congress’s basic purpose in 1988 in seeking to overturn the McNally decision. Despite the limited legislative history, the Court may well find that it has to decide for itself what Congress actually meant to do.

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