561 U.S. 358, 130 S. Ct. 2896, 177 L. Ed. 2d 619 (2010)
Enron Corporation, founded in 1985 and headquartered in Houston, grew into one of the nation’s largest energy companies.1 Jeffrey Skilling joined in 1990 and rose to become president and chief operating officer before serving as chief executive officer from February 2001 until his resignation in August 2001.2 Less than four months later, Enron declared bankruptcy, and its stock price, which had reached $90 per share in 2000, fell below $1.3
A Department of Justice task force investigated the collapse and uncovered evidence of a scheme to overstate the company’s financial performance.4 On July 7, 2004, a grand jury indicted Skilling, Lay, and Richard Causey, Enron’s former chief accounting officer.5 These three defendants, the indictment charged, engaged in a scheme to deceive investors about Enron’s true financial performance by manipulating its publicly reported financial results and making false and misleading statements. Count 1 of the indictment charged Skilling with, inter alia, conspiracy to commit “honest-services” wire fraud, 18 U. S. C. §§371, 1343, 1346, by depriving Enron and its shareholders of the intangible right of his honest services.6 The indictment also charged securities fraud, wire fraud, false statements to auditors, and insider trading.7
Skilling moved in November 2004 to transfer the trial from Houston due to extensive negative pretrial publicity, submitting hundreds of news reports and expert affidavits on community attitudes.8 The district court denied the motion after finding the coverage largely objective.9 The court mailed a 77-question questionnaire to 400 prospective jurors and conducted individual voir dire in January 2006 after Causey pleaded guilty in December 2005.10 Following a four-month trial, the jury convicted Skilling on 19 of 28 counts, including the honest-services conspiracy count, and the court imposed a sentence of 292 months’ imprisonment.11
Skilling appealed to the Fifth Circuit, which affirmed the convictions in 554 F. 3d 529.12 The Supreme Court granted certiorari to review challenges to the honest-services conviction, the venue ruling, and the voir dire process.13
Whether 18 U.S.C. § 1346 is unconstitutionally vague or should be limited to bribery and kickback schemes?14
The honest-services statute, 18 U.S.C. § 1346, is properly confined to cover only bribery and kickback schemes.15
Yes. The Court examined the history of the honest-services doctrine and found that the vast majority of pre-McNally cases involved bribes or kickbacks.16 Skilling's conduct, as alleged in the indictment, involved manipulating Enron's financial results without any allegation of bribes or kickbacks from a third party.17 The Court therefore held that his conduct did not fall within the statute as properly interpreted.18 The limiting construction avoids the vagueness problems that would arise from a broader reading of the statute.19
Skilling's conviction on the honest-services fraud conspiracy count must be reversed and the case remanded for further proceedings.20
Related opinions on this issue
Joined by Justice Thomas
Justice Scalia joined the judgment but concluded that the honest-services statute is unconstitutionally vague.21 He reasoned that the pre-McNally cases extended beyond bribery and kickbacks and that the limiting construction adopted by the majority cannot be squared with the statutory text.22 Scalia would have reversed the conviction on vagueness grounds without attempting to save the statute.23
He emphasized that the statute fails to provide fair notice of what conduct is prohibited and invites arbitrary enforcement, and that the phrase “intangible right of honest services” does not adequately define the criminal offense.24 The Court’s attempt to save the statute by limiting its reach to bribes and kickbacks cannot be reconciled with the text or history of the doctrine.
Justice Alito joined the Court’s opinion except for Part IV and agreed that the honest-services statute is not unconstitutionally vague as applied to Skilling.25 He concluded that the statute gave Skilling fair notice that his conduct was prohibited.26 Alito emphasized that the statute provided sufficient definiteness for ordinary people to understand the prohibited conduct and did not encourage arbitrary enforcement in this specific application.27
Joined by Justices Stevens And Breyer
Justice Sotomayor joined Parts I, II, and III of the Court’s opinion but dissented on the honest-services issue.28 She concluded that the statute is unconstitutionally vague in its entirety because neither the text nor the pre-McNally history supplies a clear standard.29 Sotomayor would have reversed the conviction on that basis.30
She stressed that the pre-McNally cases were inconsistent and extended well beyond bribery and kickbacks, making any limiting construction incompatible with congressional intent.31 The statute’s failure to define the right of honest services invites arbitrary prosecutions and fails to give fair notice.32
Whether Skilling’s conviction on the honest-services fraud conspiracy count violated the Ex Post Facto Clause?33
The Ex Post Facto Clause did not bar Skilling’s prosecution because the pre-1988 conduct was also alleged to have violated the mail and wire fraud statutes.34
No. The superseding indictment alleged that Skilling had violated the honest-services statute both before and after its 1988 enactment.35 But the pre-1988 conduct was also alleged to have violated the mail and wire fraud statutes, which were on the books at the time of the conduct.36 Thus, the indictment did not allege the violation of an ex post facto law.37
The Ex Post Facto Clause claim fails and the prosecution was properly allowed to proceed.38
Whether the District Court abused its discretion by denying Skilling’s motion for a change of venue based on presumed prejudice from pretrial publicity?39
A presumption of prejudice does not arise in every case of widespread pretrial publicity; the size of the community, the nature of the coverage, and the jury's acquittals on some counts rebut any presumption.40
No. Houston is the fourth most populous city in the Nation with a large and diverse pool of potential jurors.41 News stories about Enron did not present the kind of carnival atmosphere or vivid unforgettable information that would require a presumption of prejudice.42 Moreover, the jury acquitted Skilling on nine counts, strongly suggesting that the jurors were not driven by a bias against him.43
The District Court did not abuse its discretion in denying the motion for a change of venue.44
Related opinions on this issue
Joined by Justices Stevens And Breyer
Justice Sotomayor concluded that the District Court gave short shrift to the mountainous evidence of public hostility.45 She determined that the voir dire was manifestly insufficient to identify and remove biased jurors and that the procedures employed did not suffice to safeguard Skilling’s constitutional right to a fair trial.46 The level of public animus toward Skilling dwarfed that in prior cases, with the sudden collapse of Enron directly affecting thousands in Houston and generating massive, often caustic media coverage.47
The five-hour voir dire failed to pursue important lines of inquiry or critically assess assurances of impartiality, leaving serious doubts about the jury’s impartiality.48
Whether the District Court’s voir dire examination of prospective jurors was inadequate to uncover bias from pretrial publicity?49
The District Court’s voir dire was well suited to uncover and exclude jurors who were prejudiced by pretrial publicity when it examined questionnaires and conducted individual follow-up interviews.50
No. The District Court examined the prospective jurors’ questionnaires and conducted individual follow-up interviews.51 It questioned venire members about their exposure to Enron-related news and instructed them not to read or listen to anything about the case.52 The District Court’s voir dire was well suited to uncover and exclude jurors who were prejudiced by pretrial publicity.53
The District Court did not abuse its discretion when it rejected Skilling’s request for additional questioning of prospective jurors.54
Related opinions on this issue
Joined by Justices Stevens And Breyer
Justice Sotomayor concluded that the District Court’s anemic questioning did little to dispel doubts about the impartiality of numerous seated jurors.55 She determined that the procedures employed did not suffice to safeguard Skilling’s constitutional right to a fair trial.56 The court accepted equivocal assurances of impartiality and failed to explore personal interactions or community pressure, making it highly likely that at least some seated jurors harbored latent biases.57
The acquittals on minor counts did not demonstrate impartiality given the good-faith but potentially subconscious prejudices at work.58