United States v. Skilling
2011 U.S. App. LEXIS 7031
| 5th Cir. | 2011Background
- Skilling was convicted in May 2006 of conspiracy, twelve securities-fraud counts, five false-statements counts, and one insider-trading count.
- The indictment allowed multiple objects for the conspiracy, including securities fraud and honest-services fraud, and the jury returned a general verdict on conspiracy without identifying the object.
- The Supreme Court later invalidated the honest-services theory and remanded to determine whether the error was harmless as to Skilling's convictions.
- The court reviewed whether a general verdict based on alternative theories could be deemed harmless, applying Neder’s beyond-a-reasonable-doubt standard or the Holley/Saks approach.
- Evidence showed Skilling approved shifting losses from Enron’s Energy Services to Wholesale, misrepresenting Wholesale as a low-risk logistics business.
- Additional proof showed involvement in LJM/LJM2 transactions (Cuiaba and Nigerian Barges) to book fake profits and hide losses, and improper reserve transfers to meet earnings targets.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Harmlessness of honest-services error on conspiracy | Skilling: error was harmful to conspiracy conviction. | Skilling: error invalidates conspiracy verdict. | Harmless beyond a reasonable doubt; conspiracy conviction affirmed. |
| Impact of alternative-theory error on other convictions | Error taints other convictions via Pinkerton instruction. | Vicarious liability could taint others if conspiracy invalid. | Harmless with respect to other convictions; affirmed. |
| Proper harmless-error standard for alternative-theory errors | Standard should follow Neder or absolute harm. | Argues for a different standard due to multiple theories. | Neder standard governs; Holley/Saks compatible. |
Key Cases Cited
- Hedgpeth v. Pulido, 555 U.S. 57 (2008) (alternative-theory harmless-error framework cited for on-direct appeal)
- Neder v. United States, 527 U.S. 1 (1999) (harmless error if record shows beyond reasonable doubt verdict would be same)
- California v. Roy, 519 U.S. 2 (1996) (harmless-error analysis for incorrect elements stated)
- Pope v. Illinois, 481 U.S. 497 (1987) (misstatement of an element; typical harmless-error framework)
- Rose v. Clark, 478 U.S. 570 (1986) (burden-shifting errors in offenses reviewed for harmlessness)
- United States v. Holley, 23 F.3d 902 (5th Cir.1994) (harmless-error in fraud cases where inevitable result supports guilt)
- United States v. Saks, 964 F.2d 1514 (5th Cir.1992) (Holley-style harmless-error approach in fraud cases)
- United States v. Howard, 517 F.3d 731 (5th Cir.2008) (personal involvement evidence bolsters harmlessness conclusions)
- Paredes v. Thaler, 617 F.3d 315 (5th Cir.2010) (improper multi-theory instructions subjected to harmless-error analysis)
- Skilling v. United States, 554 F.3d 529 (5th Cir.2009) (earlier affirmance of most convictions; remand for sentence due to separate sentencing issue)