Legal Update: Enron Conviction Gets Supreme Court Review
Tuesday, October 27, 2009
These Day's Legal Update examines: The attorney-client privilege case pending before the US Supreme Court; the US Supreme Court's decision to review the criminal conviction of Enron CEO Jeff Skilling; and a preview of the oral argument before the California Supreme Court on medical marijuana set for November 3.
MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. One of the popular villains in the collapse of the Enron Energy Corporation is getting his conviction reviewed. The U.S. Supreme Court has agreed to take a second look at the case of Enron CEO Jeffrey Skilling, who is now serving a 24-year prison sentence. The bad publicity Skilling received and a broad federal law mandating honest services has put the validity of Skilling's conviction into question. On this legal update, we'll examine the issues surrounding the Skilling review by the U.S. Supreme Court and two other very interesting legal cases: one concerning attorney client privilege and the other, medical marijuana in California. Here to guide us through these complex issues, These Days legal analyst, Dan Eaton. Welcome, Dan.
DAN EATON (KPBS Legal Analyst): Thank you very much, Maureen. Good to be here.
CAVANAUGH: Now, next Tuesday…
CAVANAUGH: …the California Supreme Court will hear oral argument in an appeal involving California’s regulation of medical marijuana. What can you tell us about the background of this case?
EATON: Well, it’s a very interesting case. The name of the case is People v. Kelly and what happened was that a gentleman by the name of Patrick Kelly was suffering from a variety of ailments, hepatitis C, chronic back ailments and so forth. He was dissatisfied with the cost and effectiveness of other treatments, Maureen, so what he did was he went to a doctor and his doctor said, yes, all right, I’m going to recommend that you use marijuana for this although the doctor, importantly, did not say how much marijuana would be needed. So Mr. Kelly was unable to afford buying marijuana from a dispensary so what did he do? He grew it himself. And he had a nosy neighbor, I suppose, who tipped off the police and said my neighbor’s growing pot. The police did observe the pot from the neighbor’s home, obtained a search warrant, and found, in fact, that Mr. Kelly had over 12 ounces of dried marijuana as well as other things in his house, although no cash or anything like that that would suggest distribution. Ultimately, what happened was that Mr. Kelly was convicted of possession of over 28.5 grams of marijuana, which is actually only one ounce and he was sentenced to three years probation with two days of actual jail time. He wasn’t satisfied with that, and he said that he would appeal and he did appeal…
EATON: …the conviction.
CAVANAUGH: …because back in 1996, California voters passed the Compassionate Use Act, which should allow for people who need, have a doctor’s prescription, right, to get medical marijuana to be able to use it. Why was Mr. Kelly charged at all?
EATON: Well, you know, you would think that would be the end of the story but it wasn’t actually end of story. Why? Because seven years after that initiative was passed, in 2003, the California legislature enacted what was called the Medical Marijuana Program Act, and what that was designed to do, said the California legislature, was to clarify the Compassionate Use Act of 1996 and how did it do that specifically? It said in that law that—and I’m going to read here for a moment—that a qualified patient or caregiver can possess no more than eight ounces of dried marijuana plus six mature or 12 immature marijuana plants unless the patient or caregiver—and here I’m quoting from the statute—quote, has a doctor’s recommendation that this quantity does not meet the patient’s medical needs, close quote. In which case the patient may possess, quote, an amount of marijuana consistent with the patient’s needs, close quote. Now you’ll remember that doctor – that Mr. Kelly’s doctor did not prescribe a specific amount and he obviously had more than eight ounces of dried marijuana and, therefore, that was the basis of the conviction. But the question really was, well, wait a minute, did the California legislature unconstitutionally amend the Compassionate Use Act?
CAVANAUGH: I see. Okay, so this is a very technical question that goes to how much a person is supposed to have, whether his doctor has recommended a certain amount of medical marijuana, and whether or not the state legislature had the right to put in those particular technicalities, is that correct?
EATON: And that’s right. That’s exactly right, Maureen, and here’s the critical issue here. The Compassionate Use Act itself did not say anything about numerical limits on the amount that a person could have, on the amount of marijuana for medical use. The initiative said only that state laws penalizing possession and cultivation of marijuana shall not apply to patients or primary caregivers who possess or cultivate marijuana, quote, for the personal medical purposes of the patient upon the written or oral recommendation or approval of physician, close quote. Nothing about eight ounces or anything there, and the California Constitution, Maureen, generally limits the state legislature from amending a people-passed initiative, as the Compassionate Use Act was, unless the initiative itself gives the legislature that authority, and the Compassionate Use Act did not. And, therefore, when Mr. Kelly appealed his conviction, he won. The California Court of Appeal said no, the Medical Marijuana Program Act to that extent anyway, with respect to the numeric limits was unconstitutional and, therefore, his conviction needed to be reversed. A court in Sacramento, Court of Appeal in Sacramento, by the way, reached a very similar result in a case name I cannot pronounce so I won’t even attempt it. But the question the California Supreme Court is going to address on Tuesday is whether they were – whether those courts were right in saying, no, you can’t – the legislature could not amend the Compassionate Use Act to set numeric limits that the voters did not approve themselves.
CAVANAUGH: So what at first sounds like a very technical and specific sort of an issue actually has some wide-reaching effects in what the California Supreme Court decides.
EATON: It does. And let’s be very clear on this. A late-nineties case that was decided shortly after the Compassionate Use was enacted, said, well, wait a minute, we’re not talking about patients having an unlimited right to have this marijuana and so forth for medical use. It has to be, quote, it should be, quote, reasonably related to a patient’s current medical needs, close quote. So even without the numeric limits that the legislature seems to have imposed, although there’s a question about that given the language in the Medical Marijuana Program Act, even without those numeric limits, there is still some sort of reasonable limit that will prevent people from using the Compassionate Use Act as a mask to grow tremendous quantities of marijuana.
CAVANAUGH: Now speaking of medical marijuana, the federal government has shifted its enforcement policy in 14 states, including California, that allow at least some use of medical marijuana. How have they shifted their enforcement policy?
EATON: Maureen, this just happened last week and it was a dramatic development. It apparently followed up on a promise that then candidate Senator Barack Obama made, which is that Attorney General Eric Holder did announce that the Department of Justice would no longer prosecute those who are absolutely following the allowed use or cultivation of marijuana in states that allow it. He said, look, there are other ways that federal prosecutorial resources can be used and we’re not going to go after that. Why is that significant? Because federal law, Maureen, still prohibits any cultivation or possession of marijuana. So this is a pretty significant development. Now, he was careful to add that the federal prosecutors would continue to pursue drug traffickers who hide behind state medical marijuana laws, quote, to mask activities that are clearly illegal. But, in fact, this prosecution policy, this shift in federal prosecution policy, may, in fact, have very wide-ranging – a wide-ranging impact. One reason, for example, is that there are other states, Maureen, that are currently considering their laws to allow medical marijuana use. California, in 1996, was the first.
CAVANAUGH: Let’s move on to the case involving what some – the person some people view as the villain in the…
CAVANAUGH: …Enron situation, former CEO Jeffrey Skilling. Just two weeks ago the U.S. Supreme Court agreed to review the criminal conviction of Skilling. What will the justices have to decide in that case?
EATON: Well, as you have said a couple of times now in this segment, Maureen, you are right. Jeff Skillings (sic), in addition to the departed Ken Lay, really became the poster children of the corporate scandals of the late nineties and early two-thousands with the collapse of Enron, which has almost become a four-letter word when you’re talking about business ethics, which I do here in San Diego State. Look, Mr. Skilling was convicted on 19 counts of criminal misconduct. Now most of those conduct – most of those charges on which he was convicted were related to a law that prohibits employees from depriving their employers of their, quote, honest services, close quote. And that’s an intangible right according to the law. Well, what exactly does that mean? The question really before the justices is whether it requires the prosecutors to show that Mr. Skilling’s misconduct, all related to securities fraud about how sound Enron’s finances were, really were designed to result in private gain to himself or whether they were just being done in the broader service of Enron’s own interest. Why is that significant? Because the justices are going to be asked to hold that the law is unconstitutionally vague or unclear if it doesn’t have some sort of limit that requires the prosecution to show that Mr. Skilling was out for his own personal interest. And there was no charge by the prosecutors that Mr. Skilling was motivated by personal gain or greed as opposed to the service of the broader interest of the survival of Enron. And so it could result in a large number of his charges – a large part of his conviction being reversed. So that is a very important issue with respect to this broad, honest services statute under which several corporate people are being charged these days.
CAVANAUGH: And under which Jeff Skilling got some of the 24-year sentence that he’s presently serving.
EATON: Now, a large part of that – the really question is whether it criminalized his broader unethical conduct and at least one justice, Justice Scalia, is on record in a dissent from a case on whether the Supreme Court should review a case. And I just realized I lapsed into lawyer speak again but that’s all right. He said on the record in an opinion, suffice it to say, that there is a serious argument that this could be used to criminalize broad, unethical conduct.
CAVANAUGH: Is that the only issue that the justices are going to be reviewing?
EATON: It’s not. And, Maureen, actually you referred to it earlier in the segment and that is that there was a lot of publicity, a lot of vilification and, in fact, questionnaires of potential jurors themselves indicated that the collapse of Enron had a tremendously negative effect in the Houston area, which is where Mr. Skilling’s case was tried. And the question is whether it was so tainted but the questionnaires indicated some – I mean, I read some of them in the submissions that Mr. Skilling’s lawyers gave to the Supreme Court in asking them to review the case, but they called him all kinds of awful names that I can’t even repeat on a family radio station and the bottom line is whether that tainted his constitutional right to a fair trial. And so the court is going to be asked to consider that issue as well. In other words, whether that case, whether his criminal case should have been heard in another place that wasn’t so affected by the devastation of the Enron collapse.
CAVANAUGH: Now this decision is expected in the spring. If the Supreme Court reverses the conviction, is the – what’s the chance that Jeffrey Skilling is going to be able to get out of prison to await his new trial?
EATON: Look, Maureen, a reversal is not a get out of free card (sic). What will likely happen is that if there is some sort of a reversal, even if the Honest Services statute in the form that it’s being challenged is viewed as unconstitutional, he’s going to be retried probably. And then the second question before the court of where the case should have been tried, it’s possible that it will be – he will be retried somewhere other than Houston, although it’s an interesting question as to whether the collapse of Enron is – has had a reduced effect as the years have passed since Enron collapsed earlier this century.
CAVANAUGH: Let’s talk about a case – another case before the Supreme Court. The court heard oral argument in a case that’s, I know, very close to lawyers’ hearts. It’s about the attorney client privilege and whether a potential intrusion into the privilege should give a party special rights. First, exactly how does the attorney client privilege operate?
EATON: Now, as a member of the San Diego County Bar Legal Ethics Committee, I’ve been dying to do a segment on attorney client privilege.
CAVANAUGH: I know you have.
EATON: This case, though, is sort of one that only a lawyer could love but let’s go ahead and back up for a second and try to hold the viewers’ interest in what – the listeners’ interest in what the attorney client privilege exactly is. Broadly speaking, it prevents from disclosure confidential communications between a client or potential client and their attorneys that are made for the purposes of receiving legal advice. Now, the on – that’s recognized in every jurisdiction in America with variations. California has a particularly broad protection over the attorney client privilege that is very strongly enforced and when – I’m coming to California law. An attorney is required, quote, to remain inviolate the confidence and at every peril to himself or herself to preserve the secret of his or her client, close quote. The only exception is that an attorney may, but is not required to, disclose such a confidence only, quote, to the extent that the attorney reasonably believes that disclosure is necessary to prevent a criminal act that the attorney reasonably believes is likely to result in death of or substantial bodily harm to an individual, close quote. In other words, it is almost an entirely sealed off, you can’t get it, and so forth. And that’s – The question here before the Supreme Court, as I said, is a technical one that only a lawyer can love. And that is, what happens when a trial court, a federal trial court, in particular, orders disclosure of something that a party claims is their attorney client privilege. Does that party have the right immediately to go to the Court of Appeals and ask the Court of Appeals to review? Why is that significant to the party? Because once you disclose this information, and if the trial court got it wrong, the cat is out of the proverbial bag, as Chief Justice Roberts said in oral argument. And, therefore, there may be not – there may be no effective remedy if you have to wait until the end of the case, which is the usual rule, to seek review by the Court of Appeals in the federal system. And, therefore, that is really the critical question, and that’s why it’s so important that that’s why the adrenaline gets so worked up among attorneys when you start talking about it. In fact, the American Bar Association filed a special brief in this case.
CAVANAUGH: And we’re going to have to leave it there but I’m so glad you were able to get that in.
EATON: I got the attorney client privilege in and I – I’ve done my work for my profession today, Maureen.
CAVANAUGH: Okay, thank you…
EATON: Okay. All right.
CAVANAUGH: …so much. I’ve been speaking with These Days legal analyst Dan Eaton. You are listening to These Days on KPBS. You can post your comments about this or any other segment at KPBS.org/TheseDays. Stay with us for hour two coming up in just a few minutes.