Nacchio's next battle begins Thursday
By Andy Vuong
Wednesday, September 24, 2008
Joe Nacchio's insider-trading case will take center stage again
at a federal court in
Denver, this time as the focus of a rare
full-court appellate review. Nine of the 12 active judges
on the 10th U.S. Circuit Court of Appeals (three have been
recused) will hear oral arguments Thursday to decide whether the
former Qwest chief executive's insider-trading conviction should
be affirmed or overturned.
U.S. District Judge
Edward Nottingham hindered Nacchio's right to a fair trial by
excluding expert testimony from business-law professor and
private consultant Daniel Fischel.
Nottingham didn't hold a separate hearing or solicit
additional information from the defense, as he should have, so
Nacchio could explain why the testimony should be allowed.
Fischel was the "heart" of Nacchio's defense because he would
have testified, among other things, that the stock sales for
which Nacchio was convicted "were consistent with his previously
announced plan and did not accelerate in 2001 as the government
alleged," the defense states in a court filing.
Maureen Mahoney, 54, a seasoned appellate specialist perhaps
best known previously for representing now-defunct accounting
firm Arthur Andersen in its appeal of an obstruction-of-justice
conviction. The Supreme Court overturned the conviction in
Nottingham provided Nacchio ample time — until
well into the government's case during trial — to explain why
Fischel should be allowed to testify as an expert, but the
defense didn't meet the burden required under the federal rules
of evidence. Those rules state that to offer expert or
opinion testimony, the defense must establish that the testimony
is based on sufficient facts or data and derived by using
"reliable principles and methods." The government also
argues that Nacchio did not "identify any dispute that would
warrant a hearing, and did not even request such a hearing."
Edwin Kneedler, a veteran Justice Department attorney who argued
his 100th case before the Supreme Court in March. After
that hearing ended, Kneedler received a rare gesture of
recognition from the bench, according to the National Law
Journal. Chief Justice John Roberts congratulated Kneedler,
62, for reaching the milestone.
How we got here
Nacchio, now 59, was indicted on 42 counts of illegal insider
trading in December 2005, accused of accelerating his sale of
company stock in 2001 when he had nonpublic information that
Qwest's financial condition was deteriorating. Nacchio was
convicted on 19 counts in 2007 and sentenced to six years in
prison. In March, a three-judge appeals panel awarded
Nacchio a new trial, ruling 2-1 that
erred by not allowing expert testimony from a defense witness.
In July, the full appellate court granted the government's
request to rehear the case.
How it ends
A majority vote of the judges is needed to determine the
outcome. There is no deadline, though the initial panel's
ruling was issued three months after oral arguments.
Time: 1 p.m. Thursday
Site: 10th Circuit Court of Appeals, 1823 Stout St.,
Procedure: Both sides are allotted 15 minutes to present
their case, though questions from the judges could prolong the
hearing. Nacchio didn't attend oral arguments during the initial
appellate review and is not required to attend Thursday.
Vuong: 303-954-1209 or