Judging from the media reactions to Thursday’s oral argument in former Qwest CEO Joe Nacchio’s insider trading case, held before nine judges on the 10th Circuit Court of Appeals, Mr. Nacchio faces some sleepless nights ahead, waiting for the final decision on whether he gets a new trial or goes directly to jail. While I attended much of the trial and the oral arguments before the three-judge panel that reversed his conviction, I did not attend yesterday’s arguments. I read all the briefs filed by both sides and reviewed the trial-court pleadings on the expert witness issue. I spoke with Rocky Mountain News reporter Jeff Smith, who has been writing on the case since the beginning, and who attended yesterday’s arguments. His conclusion: It was all very technical and about “the rules.” But the judges seemed more interested in peppering Nacchio’s lawyer with questions than it did the government’s counsel.
I watched interviews with two lawyer-observers on the evening news. Both said it didn’t go well for Nacchio, that the judges were tougher on his lawyer than the government lawyer. Two law professors who attended the hearing agreed with Smith in interviews with The Denver Post. Denver lawyer Scott Robinson writes in the Rocky Mountain News that the oral arguments are not the bread and butter of an appeal; the pleadings are. Still, he asks:
Can the outcome be accurately predicted by the questions and comments of the judges? Not always, but here it looks as though the decision will not be unanimous, split either 5-4 or 6-3.
Checking the national news, Reuters reports:
U.S. appeals court judges sharply questioned a lawyer for former Qwest Communications International Inc Chief Executive Joseph Nacchio on Thursday during a hearing to determine if his 2007 conviction on insider trading charges should be reinstated. During oral arguments in an appeal by prosecutors, six of the nine judges of the 10th U.S. Circuit Court of Appeals in Denver appeared to take issue with Nacchio attorney Maureen Mahoney’s claim the former telecommunications CEO had an unfair trial because an expert witness vital to his defense was excluded.
The New York Times explains yesterday’s proceedings this way:
The nine judges in attendance — three recused themselves because of conflicts — fired a near constant broadside of questions at both sides, with special emphasis on Ms. Mahoney. Some judges appeared to feel strongly that it had been incumbent upon Mr. Nacchio’s lawyers to compel Judge Nottingham to allow Mr. Fischel to testify. “Your whole framework is that the court had an obligation to do something, when it was you and Mr. Nacchio who had an obligation to get the witness to the stand,” said Judge Jerome A. Holmes, addressing Ms. Mahoney.
The Times reports other judges seemed to favor Nacchio:
Other judges, however, clearly sided with Ms. Mahoney and wondered aloud whether Judge Nottingham’s decision to exclude Mr. Fischel’s testimony was too severe. “Isn’t the sanction over the top?” questioned Chief Justice Robert H. Henry. “Why is total exclusion what we should do here?” Judge Michael W. McConnell added: “This suggests to me that the district judge has such a low opinion of economic expertise that he doesn’t think there should be such expertise at a trial like this.”
Whether the trial judge improperly excluded testimony from Nacchio’s expert witness who would have disagreed with two government experts on an issue that was central to Nacchio’s guilt or innocence.
This is about fundamental fairness and affects a defendant’s ability to call witnesses on his behalf at trial , which is a central component of the Sixth Amendment right to put on a defense. In a friend-of-the-court brief, the National Association of Criminal Defense Lawyers (NACDL) argues the trial judge made three key errors that resulted in a violation of Nacchio’s constitutional right to put on his defense.
First, the District Court held that the Rule 16(b)(1)[c]summary of the defense expert’s opinion was insufficient because it did not establish that the expert was reliable, when in fact Rule 16(b)(1)[c] contains no such criterion. Second, the District Court imposed a sanction without providing Defendant with any opportunity to be heard. Compounding this error, the District Court proceeded to impose the harshest punishment available â€“ total exclusion of the expert witness â€“ when the governing authority reserves that sanction for egregious cases in which a party is improperly gaming the system for strategic advantage.
Although a lot of rule numbers came up during Thursday’s argument, Rule 16 is the key, because that is the rule that lays out a defendant’s disclosure obligations with respect to calling an expert witness at trial. Criminal Rule 16 says a defendant who intends to call an expert must provide the other side with a summary of the expert’s testimony, the reasons and bases for his opinion, and his qualifications. That’s it. At that stage, the defendant in a criminal case is not required to demonstrate that the expert’s testimony is reliable or admissible under the rules of evidence. That burden comes later, after a challenge is made. Judge Nottingham did not believe the defense supplied the bases or reasons for Fischel’s opinions. At the government’s request, he excluded Fischel from testifying, without providing Nacchio an opportunity to demonstrate that his testimony was reliable and his methodology sound before making that decision. Even if the 10th Circuit rules Judge Nottingham was correct and Nacchio did not comply with the criminal rule, it may consider whether the sanction of exclusion of the expert testimony was too severe. It could take several months for the 10th circuit to issue its opinion. I normally don’t read too much into the questioning at oral argument. As Scott Robinson said, it’s the least important part of the appeal. No matter which side wins, this case isn’t over. You can bet the losing side will petition the U.S. Supreme Court to review it. And should it be Nacchio who wins, he likely will have to stand trial again, a n emotional double punishment in itself.