On June 18, the Supreme Court decided Yeager v. United States, No. 08-67.
Yeager, an employee of a subsidiary of Enron Corp., was charged with securities and wire fraud for participating in allegedly misleading statements about his employer's product, with insider trading for selling his Enron stock while in possession of nonpublic information about the product's value to Enron, and with money laundering in connection with the proceeds of his stock sales. After a 13-week trial and four days of jury deliberations, he was acquitted of the fraud claims, but the jury could not reach a verdict on the insider trading and money laundering counts. When the government recharged him with some of the latter counts, he moved to dismiss, arguing that, in acquitting him on the fraud counts, the jury had necessarily decided that he did not possess material, nonpublic information about the product, so a retrial on claims based on the theory that he did possess such information when he sold his stock were barred by the double jeopardy clause. The trial court denied the motion, and the U.S. Court of Appeals for the Fifth Circuit affirmed, reasoning that, if the jury had acquitted Yeager because it found that he did not possess material, nonpublic information, it would rationally have acquitted him on the insider trading and money laundering charges as well. The fact that it hung on those charges made the basis for the acquittal ambiguous and barred application of issue preclusion aspects of the double jeopardy rule.
The Supreme Court reversed. Prior decisions establish that the double jeopardy clause precludes the government from relitigating any issue that was necessarily decided by the jury's acquittal in a previous trial. In deciding what the jury "necessarily decided," the Court held, it is improper to consider the inability to reach a verdict on other charges, as the Court of Appeals did here. A hung verdict is essentially a non-event. Identification of the issues "necessarily decided" by the acquittal must be based solely on the record with respect to the charges on which a defendant was acquitted, and not on speculation about possible reasons for the hung verdict on other charges.
Having resolved this legal issue, the Court declined to pore through the voluminous trial record to resolve the government's alternate argument that there were grounds apart from the hung verdict for concluding that, in acquitting Yeager, the jury had not necessarily decided that he did not possess material, nonpublic information. Because of its legal error, the Court of Appeals had not addressed that argument, and the Court remanded to allow it to do so.
Justice Stevens delivered the opinion of the Court, in which Chief Justice Roberts and Justices Souter, Ginsburg and Breyer joined, and in which Justice Kennedy joined in part. Justice Kennedy also filed an opinion concurring in part and concurring in the judgment. Justices Scalia and Alito each filed a dissenting opinion in which the other joined, and Justices Thomas joined in both dissents.