Man Without Qualities

Friday, June 07, 2002

The Sargasso Sea

Chief Justice Rehnquist has written: "the decisional law in the area of double jeopardy is a veritable Sargasso Sea which could not fail to challenge the most intrepid judicial navigator." The attorneys - and especially the prosecutors - in the obstruction of justice case against Andersen may have drifted far into those treacherous waters.

In the case against Andersen, which just went to the jury, the prosecutors are attempting to prove that at least one of four Andersen employees "corruptly persuaded" someone at Andersen to destroy Enron-related documents: David Duncan, the Andersen partner who has pleaded guilty and become a government witness, Andersen attorney Nancy Temple, and Andersen Houston partners Thomas Bauer and Michael Odom. Yet none of these individuals is a co-defendant with Andersen.

What happens to Nancy Temple, Thomas Bauer and Michael Odom if Andersen is acquitted or convicted (Mr. Duncan has cut a separate deal, and won't be discussed further)? The answer to that question may lie deep in the Sargasso Sea.

At first, the answer seems clear: Nothing happens. None of them is a defendant, so nothing that happens to Andersen will affect the legal status of the individuals. In particular, they could each be charged individually with "obstructing justice" after the Andersen verdict is in, and they could each try to defend against that charge. Since none of these individuals is a defendant, there is no Fifth Amendment "double jeopardy" issue. Case closed.

But navigation isn't so simple in this Sargasso Sea. Suppose Andersen is acquitted. Then that means that the jury will have decided (within the "reasonable doubt" standard) that none of Nancy Temple, Thomas Bauer or Michael Odom was a "corrupt persuader." If the prosecutors later charge any of them with obstruction of justice, can these individuals argue that the government is prohibited from re-litigating the crucial fact that they "corruptly persuaded" another person to destroy evidence? That is: What about collateral estoppel?

Under the doctrine of "collateral estoppel"--also termed "issue preclusion"--a party who has had a full and fair opportunity to litigate an issue and lost in prior litigation may be foreclosed from relitigating that issue in subsequent cases, even where the opposing party is different. The United States Supreme Court has long held that "collateral estoppel" applies to the benefit of a defendant in criminal cases:

"'Collateral estoppel' is an awkward phrase, but it stands for an extremely important principle in our adversary system of justice. It means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit. Although first developed in civil litigation, collateral estoppel has been an established rule of federal criminal law at least since this Court's decision more than 50 years ago in United States v. Oppenheimer, 242 U.S. 85 . As Mr. Justice Holmes put the matter in that case, 'It cannot be that the safeguards of the person, so often and so rightly mentioned with solemn reverence, are less than those that protect from a liability in debt.' 242 U.S., at 87 , 37 S.Ct. at 69.7 As a rule of federal law, therefore, '(i)t is much too late to suggest that this principle is not fully applicable to a former judgment in a criminal case, either because of lack of 'mutuality' or because the judgment may reflect only a belief that the Government had not met the higher burden of proof exacted in such cases for the Government's evidence as a whole although not necessarily as to every link in the chain.''

The Court's note that lack of "mutuality' is irrelevant is important. "Mutuality" exists where the parties to the second legal action are exactly the same as the parties to the first. In the Andersen case none of Nancy Temple, Thomas Bauer or Michael Odom is a defendant. So, if the government later charged one or more of them with "obstruction of justice," there would not be "mutuality." But the Supreme Court language quoted above indicates that lack of "mutuality" doesn't matter.

It seems to follow that if the jury acquits Andersen, each of Nancy Temple, Thomas Bauer and Michael Odom is probably entitled to defend any subsequent action for "obstruction of justice" brought against them, personally, by using collateral estoppel to establish that none of them was a "corrupt persuader." That would be pretty sweet for Nancy Temple, Thomas Bauer and Michael Odom. They don't get indicted or have to stand trial, but benefit from the Andersen acquittal as if they had.

Nor should one feel sorry for the prosecutors, since they brought the problem on themselves. They could have elected to indict each of Nancy Temple, Thomas Bauer and Michael Odom, and thereby make them co-defendants with Andersen - thereby avoiding the problem. But the prosecutors didn't do that. Of course, the prosecutors also extracted a benefit: if these individuals had been indicted and stood trial, each of them could have moved to quash the individual indictment or dismiss during the trial for lack of evidence against that individual. By not charging any of the individuals, the prosecutors avoided this risk. Given how thin the evidence is against each individual, it's understandable the prosecutors would want to avoid that particular risk.

But what happens if Andersen is convicted? Could that have any effect on the fates of Nancy Temple, Thomas Bauer and Michael Odom? Oddly enough, it might. Recall that the jury has to find that at least one of them was a "corrupt persuader" to convict Andersen. Suppose the jury does this and names the "corrupt persuader" - say, Nancy Temple solely for the sake of the example. If the government then charged her with "obstruction of justice" on the exact same facts and evidence, what happens. Can the government claim the benefit of the Andersen jury's specific finding in a case in which Ms. Temple was not even a party?

It is said that the use of collateral estoppel by the prosecution regarding questions of fact for the jury has been disapproved by the United States Supreme Court in at least three cases: Ashe; Simpson and Dixon. But some state courts have applied collateral estoppel against criminal defendants. And some courts are not convinced that the United States Supreme Court really has completely disapproved "offensive" prosecutorial use of collateral estoppel:

"Despite this seemingly absolute [United States Supreme Court] language barring the prosecution from asserting the collateral estoppel doctrine against the defendant on a subsequent prosecution, the language remains dictum. Apparently, the United States Supreme Court has not yet squarely addressed the issue or offered any theoretical underpinning for such a rule. In the absence of a definitive resolution of the issue of mutuality by the United States Supreme Court, some lower courts have developed justifications for the prosecution's assertion of the doctrine against the defendant in cases involving issues of paternity and citizenship status."

But what about failure of "mutuality"? Shouldn't the fact that Ms. Temple is not even a party in the Andersen trial preclude the prosecution's use of collateral estoppel against her?

Well, probably yes. The Supreme Court language quoted above only means that a third party is entitled to invoke collateral estoppel against the government even if "mutuality" fails because the third party was not a party to the original action. That doesn't mean the government can generally invoke collateral estoppel against a third party who was not a party to the original action - which would be ridiculous. There has to be "mutuality" for federal prosecutors to have any chance of using collateral estoppel.

But Ms. Temple lives in Chicago - and that's in the jurisdiction of the United States Court of Appeals for the Seventh Circuit. The Seventh Circuit has held (but in a civil case following a criminal case, which is not quite the same as a criminal case following a criminal case) that a company and its president were in "privity" for purposes of collateral estoppel: "Parties are in privity when 'there is a commonality of interest between the two entities' and when they 'sufficiently represent' each other's interests. Given the close relationship between ... a relatively small company, and [its president], as well as the fact that [its president] was originally named as a defendant in the criminal case and faced with identical charges as [the company] prior to reaching a settlement with the state ... [the company and its president] had a clear 'congruence' of legal issues with respect to the statute, thus establishing privity.'" The significance of "privity" is that collateral estoppel does bind people who are in "privity" with an actual party to the first litigation. Put another way: there is "mutuality" where there is "privity."

Does Ms. Temple have "privity' with Andersen under the Seventh Circuit reasoning? Andersen is certainly not a small company. But on the other hand, there's seems to be a "clear 'congruence' of legal issues with respect to the [obstruction of justice] statute" between Ms. Temple and Andersen. And Ms. Temple may have a lot of leverage over how Andersen conducted its defense. The Supreme Court said in Ashe: "The federal decisions have made clear that the rule of collateral estoppel in criminal cases is not to be applied with the hypertechnical and archaic approach of a 19th century pleading book, but with realism and rationality." That sounds good, but does it leave Ms. Temple with complete comfort in this case even if it turns out that she - a trained and seasoned attorney - all but directed her aspects of the Andersen defense?

Chief Justice Rehnquist is right: This is a Sargasso Sea. It's always helped to be good with magic in dealing with the Sargasso Sea. Perhaps William Rehnquist and his Supreme Court will have their say on these matters late in the day. Then they'll have a chance to really show their stuff:

Early on the evening, just about suppertime
Over by the courthouse, they're startin' to unwind
Poor kids on the corner tryin' to bring you up
Willie picks a tune out and he knows they gonna start

Down on the corner
Out in the street
Willie and the Poor Boys are playin'
Bring a nickel tap your feet

You don't need a penny just to hang around
But if you got a nickel won't ya lay your money down
Over on the corner there's a happy noise
People come from all around to watch the magic boyz.

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