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Case: 06-20885

Document: 00511592127

Page: 1

Date Filed: 09/02/2011

Appeal No. 06-20885

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT


_________________________ UNITED STATES OF AMERICA, Plaintiff-Appellee, v. JEFFREY K. SKILLING, Defendant-Appellant, __________________________ On Appeal from the United States District Court for the Southern District of Texas, Houston Division Crim. No. H-04-25 (Lake, J.)
____________________________

DEFENDANT-APPELLANT JEFFREY K. SKILLINGS UNOPPOSED MOTION TO STAY THE COURTS MANDATE PENDING FILING OF PETITION FOR WRIT OF CERTIORARI __________________________ OMELVENY & MYERS LLP WALTER DELLINGER JONATHAN D. HACKER ANTON METLITSKY 1625 Eye Street, N.W. Washington, D.C. 20006 RONALD G. WOODS 5300 Memorial, Suite 1000 Houston, Texas 77007 OMELVENY & MYERS LLP DANIEL M. PETROCELLI M. RANDALL OPPENHEIMER MATTHEW T. KLINE DAVID J. MARROSO 1999 Avenue of the Stars, 7th Floor Los Angeles, California 90067 Telephone: (310) 553-6700 Facsimile: (310) 246-6779

Attorneys for Defendant-Appellant Jeffrey K. Skilling

Case: 06-20885

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Date Filed: 09/02/2011

CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record for Defendant-Appellant Jeffrey Skilling certifies that the following listed persons and entities as described in 5TH CIR. R. 28.2.1 have an interest in the outcome of this case, United States v. Skilling, No. 06-20885. These representations are made in order that the judges of this court may evaluate possible disqualification or recusal: 1. 2. United States of America, Plaintiff-Appellee; Department of Justice, Counsel for Plaintiff-Appellee (Joseph Douglas Wilson); 3. 4. Jeffrey Skilling, Defendant-Appellant; OMelveny & Myers LLP, Counsel for Defendant-Appellant Jeffrey Skilling (Daniel Petrocelli, Walter Dellinger, Randall Oppenheimer, Jonathan Hacker, Matthew Kline, David Marroso, and Anton Metlitsky); 5. Ronald Woods, Counsel for Defendant-Appellant Jeffrey Skilling. Respectfully submitted, /s/ Daniel M. Petrocelli Daniel M. Petrocelli Attorney of Record for Defendant-Appellant Jeffrey Skilling

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Date Filed: 09/02/2011

DEFENDANT-APPELLANT JEFFREY K. SKILLINGS UNOPPOSED MOTION TO STAY THE COURTS MANDATE PENDING FILING OF PETITION FOR WRIT OF CERTIORARI Pursuant to Rule 41(d)(2) of the Federal Rules of Appellate Procedure and Fifth Circuit Rule 41.1, defendant-appellant Jeffrey K. Skilling (Skilling) hereby respectfully moves for a stay of the Courts mandate pending the filing of a petition for a writ of certiorari in the Supreme Court. The mandate of this Court would otherwise issue on or near September 6, 2011. We have contacted counsel for the government, and the government does not oppose this motion. INTRODUCTION A stay of the mandate may be issued pending a petition for a writ of certiorari when either the petition will present substantial questions, or there is good cause for a stay. 5th Cir. R. 41.1; see also Fed. R. App. P. 41(d)(2)(A). Skillings petition for certiorari will likely present at least two questions that warrant the Supreme Courts review of this Courts decision. The first is whether, as the panel held, the government can prove the harmlessness of an alternativetheory error by showing that the evidence supporting the valid theory was sufficient to prove guilt beyond a reasonable doubt, even when the jury returns a general verdict that does not disclose on which theory the jury actually relied. The second is whether, as the Court also held, a defendants testimony can be categorically disregarded by a court conducting harmlessness review, even though

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a reasonable jury might credit that testimony. Skillings petition will demonstrate that the Courts holdings on both of these questions conflict with the decisions of other circuits and with Supreme Court precedent, and that both questions involve legal issues of nationwide importance in the administration of harmless-error review. For the reasons set forth more fully below, a stay of the mandate pending the disposition of Skillings petition should be granted. BACKGROUND Jeffrey Skilling is serving a 24-year sentence for alleged frauds at Enron. The government prosecuted an alternative theory case; the core offense was a conspiracy count alleging multiple objects, including honest services fraud and securities fraud. The jury convicted on 19 of 28 counts in a general verdict form. In 2010, the unanimous Supreme Court concluded the honest services theory the government pursued was invalid as applied to Skilling, and remanded to this Court. On April 6, 2011, a panel of this Court affirmed Skillings convictions, holding that the erroneous honest-services charge was harmless under Neder v. U.S., 527 U.S. 1 (1999), because the evidence was sufficient to prove beyond a reasonable doubt that Skilling was guilty of securities fraud under each of five fraud schemes alleged. Op. 15. The panel also held that Skillings detailed testimony in his defense was irrelevant to the harmlessness analysis. Op. 8-10.

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REASONS FOR GRANTING THE STAY A motion to stay this Courts mandate pending the filing of a petition for a writ of certiorari should be granted if the certiorari petition [i] sets forth good cause for stay or [ii] clearly demonstrates that a substantial question is to be presented to the Supreme Court. 5th Cir. R. 41.1 (emphasis added); see also Fed. R. App. P. 41(d)(2)(A). Although either condition thus will suffice to justify a stay under this Courts Rules, both are satisfied here.
I.

SKILLINGS PETITION FOR CERTIORARI WILL PRESENT SUBSTANTIAL QUESTION[S] Skillings petition likely will present at least the two following questions: Whether the government can prove the harmlessness of an alternative-theory error by showing only that the evidence supporting the valid theory was sufficient to prove guilt beyond a reasonable doubt (the standard for routine sufficiency of the evidence review), rather than showing that no reasonably jury could have acquitted on the valid theory (the harmlessness standard enunciated in Neder v. U.S., 527 U.S. 1 (1999)). Whether a defendants testimony, which could have been credited as truthful by a reasonable jury (especially in light of the nine acquittals in this case), can be categorically disregarded by a court conducting harmlessness review.

Both questions are substantial. 1. The most significant consideration bearing on certiorari is whether the question presented implicates a conflict among the federal circuits or with Supreme Court precedent. Sup. Ct. R. 10(a), (c). Those criteria are met on both questions.

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a. To determine whether the error in instructing the jury on honest-services fraud was harmless, the Courts decision on its face applies a routine sufficiencyof-the-evidence analysis to the record on securities fraud. According to the opinion, the crux of the matter, is whether, under the Neder standard, the evidence presented at trial proves that Skilling conspired to commit securities fraud. Op. 7. If the evidence presented at trial proved that Skilling participated in a scheme to deceive the investing public about Enrons financial condition, the Court held that it could conclude beyond a reasonable doubt that absent the honest-services instruction, the jury would have convicted Skilling under a valid theory of guiltconspiracy to commit securities fraud. Op. 5. Skillings petition will contend that the decisions approach conflicts with Supreme Court precedent, in particular the Courts decision in Neder v. U.S., 527 U.S. 1 (1999). Neder explained that a reviewing court making this harmless error inquiry does not become in effect a second jury to determine whether the defendant is guilty. Id. at 19. Because determining guilt or innocence is solely the province of the jury, an error requires reversal if the record would have permitted a rational jury to find for the defendant absent the error, even if the record also would have permitted a rational jury to convict. Id. Other circuits conducting harmless-error review in the alternative-theory error context have recognized that it is not enough that evidence on the valid

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theory was sufficient to find guilt beyond a reasonable doubt. The First Circuit, for example, has held that a finding of harmlessness is appropriate only if the defendants evidence was not inherently credible, even when the governments evidence was strong. U.S. v. Prigmore, 243 F.3d 1, 22 (1st Cir. 2001). In other words, the First Circuit explained, a finding of non-harmlessness is inappropriate if both the governments and defendants evidence is sufficient to render rational a finding in favor of its proponent. Id. The trial error in this case would have been found non-harmless under that standard, as there is no credible argument that Skillings evidence (including impeachment of key government witnesses) was not sufficient to support a rational verdict in his favor. In U.S. v. Black, 625 F.3d 386, 392 (7th Cir. 2010)a case remanded in light of Skillingthe court found no harmlessness, because even though evidence supporting the valid alternative theory was very strong, it was not conclusive. Similarly, the Third Circuit recently held that an invalid theory is not harmless even when the government emphasized a valid theory to a greater degree, and even if it was not probable that jurors relied on the invalid theory. U.S. v. Coniglio, 417 Fed. Appx 146, 149 (3rd Cir. 2011). The error in that case was not harmless because the case involve[d] a large amount of sharply contested, circumstantial evidence, id. at 149 n.4as was clearly the case here.

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In view of the evident conflict between the foregoing decisions and the decision here finding the honest-services fraud error harmless because the securities-fraud evidence was sufficient to prove guilt beyond a reasonable doubt, Skillings petition clearly will present a substantial question concerning the proper application of harmless-error review in this context. b. Skillings petition also will contend that the Court erred in ruling out all consideration of Skillings testimony, and that the Courts decision to do so conflicts with Neder and at least one other circuit decision. The Courts decision categorically rejected Skillings testimony on the ground that it was self-serving and because the jury, by finding him guilty, necessarily determined that his own self-serving testimony, in which he contested his liability under any theory guilt, including the honest-services theory, was not worthy of belief. Op. 8; see id. at 9, 10. That holding, Skilling submits, cannot be reconciled with Neder, which holds that a court conducting harmlessness review must conduct a thorough examination of the entire record, including defendants contrary evidence and cross-examinations, to determine whether he contested the [valid theory] and raised sufficient evidence to support an acquittal by a rational juror on that theory. 527 U.S. at 19. Even if Skillings defense had been limited to his own testimonywhich it was nothe clearly contested the governments securities fraud theory of liability, and his testimony would have been sufficient

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to support an acquittal on that theory. Indeed, the jury did accept Skillings testimony in acquitting him on 9 of the 27 charged countsand nine acquitted counts were premised on the same pump and dump securities-fraud scheme on which the Court relied to affirm Skillings convictions. Skillings petition will point to a conflict on this issue between this Courts ruling and the First Circuits decision in U.S. v. Ofray-Campos, 534 F.3d 1 (1st Cir. 2008). There, the court noted that the jury by its guilty verdict had chose[n] to credit the accounts of the cooperating witnesses over the admittedly self-serving testimony of the defendant. Id. at 28. The court nevertheless held that defendants countervailing testimony on his own behalf is a factor in conducting the harmless error analysis. Id. at 28-29. And the court ultimately found the error harmful, in part, based on the defendants testimony, thereby recognizing that self-serving testimony still may be credited by rational jurors. Id. Accordingly, this question, too, is substantial, justifying a stay of the mandate. 2. The foregoing questions also are substantial because harmless-error review is an exceedingly important matter in federal courts administration of criminal justice. Criminal trials are rarely error-free, yet neither are convictions routinely reversed because of trial errors. Harmless-error review is the vital tool that courts employon a literally daily basisto distinguish the inevitable errors that matter from those that do not. It is thus critically important that harmless-error

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standards be clearly articulated, easily understood, and uniformly applied. The conflicts over such standards implicated by the Courts decision, and to be raised in Skillings petition for certiorari, are matters of nationwide significance, further warranting a stay of the mandate pending the disposition of that petition.
II.

THERE IS GOOD CAUSE FOR ENTERING A STAY Particularly because certiorari is a very realistic possibility in this case, there

is good cause to stay the mandate. Although this Court rejected Skillings appeal of his conviction, the Court reversed Skillings sentence and remanded to the district court for resentencing. Thus, once the mandate issues, the case will return to the district court for resentencing. A resentencing proceeding would require an expenditure of substantial resources of the district court, the courts probation office, and the parties. All of that effort would be nullified if the Supreme Court granted the petition and vacated or reversed this Courts harmlessness decision. Indeed, conducting a resentencing proceeding before final resolution of the harmlessness question would be a particular waste of resources in this case, because the parties dispute not only the basic harmlessness issue, but also the breadth of the harm inflicted by the erroneous honest-services charge. Skilling contends that the error affected all counts of the conviction; the government says that only the conspiracy count at most was affected. Thus, if the case is remanded for resentencing, and Skilling

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later persuades the Supreme Court that this Courts harmlessness analysis was erroneous, but the government prevails in limiting the effect of that error to some subset of the counts, the district court would have to conduct yet another sentencing proceeding. Finally, a stay of the mandate pending the disposition of a petition for certiorari would create no undue hardship for the government. Skilling is already incarcerated. The government has no need for an urgent resolution to the remaining proceedings. The government does not oppose a stay. Under the circumstances, the good cause requirement of Rule 41 is readily met. CONCLUSION For the foregoing reasons, this Court should stay the issuance of its mandate pending the disposition of Skillings petition for a writ of certiorari. Dated: September 2, 2011 Respectfully submitted, By: /s/ Daniel M. Petrocelli OMELVENY & MYERS LLP WALTER DELLINGER JONATHAN D. HACKER ANTON METLITSKY 1625 Eye Street, N.W. Washington, D.C. 20006 RONALD G. WOODS 5300 Memorial, Suite 1000 Houston, Texas 77007 OMELVENY & MYERS LLP DANIEL M. PETROCELLI M. RANDALL OPPENHEIMER MATTHEW T. KLINE DAVID J. MARROSO 1999 Avenue of the Stars, 7th Floor Los Angeles, California 90067 Telephone: (310) 553-6700 Facsimile: (310) 246-6779 Attorneys for Defendant-Appellant Jeffrey Skilling 9

Case: 06-20885

Document: 00511592127

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Date Filed: 09/02/2011

CERTIFICATE OF SERVICE I hereby certify that on September 2, 2011, I electronically filed the foregoing with the Clerk of the Court for the U.S. Court of Appeals for the Fifth Circuit by using the appellate CM/ECF system. All participants are registered CM/ECF users, and will be served by the appellate CM/ECF system. /s/ Matthew T. Kline Matthew T. Kline