Justices partially side with former Enron CEO (June 24, 2010)

The Supreme Court granted a partial victory today to Jeff Skilling, the imprisoned former Enron CEO, who contends he was tried by a prejudiced jury.

Skilling is serving a 24-year prison term after being convicted in 2006 of 19 counts of conspiracy, securities fraud, insider trading and deceiving auditors while his energy company fell apart.

In January, a three-judge panel on the 5th U.S. Circuit Court of Appeals upheld his convictions but ruled that U.S. District Judge Sim Lake had erred in his original sentencing and said the former executive would be resentenced. That hearing was postponed pending Skilling's appeal to the Supreme Court.

In addition to Skilling, media mogul Conrad Black also challenging the use of so-called "honest services" prosecutions, in which the federal government argues that a white-collar defendant committed fraud by depriving his company or the public of his honest services.

The justices heard Black's case in December. The court also took a third similar case involving an Alaska state politician who argued that he was wrongly prosecuted under an honest-services theory.

On June 24, 2010, the Supreme Court affirmed in part, reversed in part and remanded the case in a main opinion by Justice Ruth Bader Ginsburg. Agreeing that Skilling received a fair trial, the court held that the former CEO's conviction should not be overturned completely. Nonetheless, the justices did send the case back to the lower court after concluding that the Justice Department improperly relied upon the "honest services" law.

"Because Skilling's alleged misconduct entailed no bribe or kickback, it does not fall within the court's confinement of §1346's proscription," Ginsburg wrote.

There were an array of concurrences in the case, as well as a partial dissent by Justice Sonia Sotomayor, joined by Justices Stephen Breyer and John Paul Stevens.

Question presented: whether the federal honest services fraud statute requires the government to prove that the defendant's conduct was intended to achieve "private gain" rather than to advance the employer's interests, and, if not, whether § 1346 is unconstitutionally vague. The second issue is whether the government must rebut the presumption of jury prejudice, which arose because of pretrial publicity and community impact of the alleged conduct, and, if so, whether the government must prove beyond a reasonable doubt that no juror was actually prejudiced.