Yeager v. United States, 08–67.

CourtUnited States Supreme Court
Citation174 L.Ed.2d 78,557 U.S. 110,129 S.Ct. 2360,77 USLW 4515
Docket NumberNo. 08–67.,08–67.
PartiesF. Scott YEAGER, Petitioner, v. UNITED STATES
Decision Date18 June 2009

557 U.S. 110
129 S.Ct. 2360
174 L.Ed.2d 78
77 USLW 4515

F. Scott YEAGER, Petitioner,

No. 08–67.

Supreme Court of the United States

Argued March 23, 2009.
Decided June 18, 2009.


A federal indictment charged petitioner Yeager with securities and wire fraud for allegedly misleading the public about the virtues of a fiber-optic telecommunications system offered by his employer, a subsidiary of Enron Corp., and with insider trading for selling his Enron stock while in possession of material, nonpublic information about the new system's performance and value to Enron. The indictment also charged petitioner with money laundering for conducting various transactions with the proceeds of his stock sales. The jury acquitted Yeager on the fraud counts but failed to reach a verdict on the insider trading and money laundering counts. After the Government recharged him with some of the insider trading and money laundering counts, Yeager moved to dismiss the charges on the ground that the jury, by acquitting him on the fraud counts, had necessarily decided that he did not possess material, nonpublic information about the project's performance and value, and that the issue-preclusion component of the Double Jeopardy Clause therefore barred a second trial for insider trading and money laundering. The District Court denied the motion, and the Fifth Circuit affirmed, reasoning that the fact that the jury hung on the insider trading and money laundering counts—as opposed to acquitting petitioner—cast doubt on whether it had necessarily decided that petitioner did not possess material, nonpublic information. This inconsistency between the acquittals and the hung counts, the Fifth Circuit concluded, meant that the Government could prosecute petitioner anew for insider trading and money laundering.

Held: An apparent inconsistency between a jury's verdict of acquittal on some counts and its failure to return a verdict on other counts does not affect the acquittals' preclusive force under the Double Jeopardy Clause. Pp. 2365 – 2370.

(a) This case is controlled by the reasoning in Ashe v. Swenson, 397 U.S. 436, 90 S.Ct. 1189, 25 L.Ed.2d 469, where the Court squarely held that the Double Jeopardy Clause precludes the Government from relitigating any issue that was necessarily decided by a jury's acquittal in a prior trial. For double jeopardy purposes, the jury's inability to reach a verdict on Yeager's insider trading and money laundering counts was a nonevent that should be given no weight in the issue-preclusion analysis. To identify what a

[557 U.S. 111]

jury necessarily determined at trial, courts should scrutinize the jury's decisions, not its failures to decide. A jury's verdict of acquittal represents the community's collective judgment regarding all the evidence and arguments presented to it. Even if the verdict is “based upon an egregiously erroneous foundation,” Fong Foo v. United States, 369 U.S. 141, 143, 82 S.Ct. 671, 7 L.Ed.2d 629, its finality is unassailable, see, e.g., Arizona v. Washington, 434 U.S. 497, 503, 98 S.Ct. 824, 54 L.Ed.2d 717. Thus, if the possession of insider information was a critical issue of ultimate fact in all of the charges against Yeager, a jury verdict that necessarily decided that issue in his favor protects him from prosecution for any charge for which that is an essential element. Pp. 2365 – 2369.

(b) Neither Richardson v. United States, 468 U.S. 317, 104 S.Ct. 3081, 82 L.Ed.2d 242, nor United States v. Powell, 469 U.S. 57, 105 S.Ct. 471, 83 L.Ed.2d 461, supports the Government's argument that it can retry Yeager for insider trading or money laundering. Richardson 's conclusion that a jury's “failure ... to reach a verdict is not an event which terminates jeopardy,” 468 U.S. at 325, 104 S.Ct. 3081, did not open the door to using a hung count to ignore the preclusive effect of a jury's acquittal, but was simply a rejection of the argument—similar to the Government's today—that a mistrial is an event of significance. Also rejected is the contention that an acquittal can never preclude retrial on a hung count because it would impute irrationality to the jury in violation of Powell 's rule that issue preclusion is “predicated on the assumption that the jury acted rationally,” 469 U.S. at 68, 105 S.Ct. 471. The Court's refusal in Powell and in Dunn v. United States, 284 U.S. 390, 52 S.Ct. 189, 76 L.Ed. 356, to impugn the legitimacy of jury verdicts that, on their face, were logically inconsistent shows, a fortiori, that a potentially inconsistent hung count could not command a different result. Pp. 2368 – 2370.

(c) The Government has argued that, even if hung counts cannot enter the issue-preclusion analysis, Yeager has failed to show that the jury's acquittals necessarily resolved in his favor an issue of ultimate fact that must be proved to convict him of insider trading and money laundering. Having granted certiorari on the assumption that the Fifth Circuit ruled correctly that the acquittals meant the jury found that Yeager did not have insider information that contradicted what was presented to the public, this Court declines to engage in a fact-intensive analysis of the voluminous record that is unnecessary to resolve the narrow legal question at issue. If the Court of Appeals chooses, it may revisit its factual analysis in light of the Government's arguments before this Court. Pp. 2369 – 2370.

521 F.3d 367, reversed and remanded.

STEVENS, J., delivered the opinion of the Court, in which ROBERTS, C.J., and SOUTER, GINSBURG, and BREYER, JJ., joined, and in which KENNEDY, J., joined as to Parts I–III and V. KENNEDY, J., filed an opinion concurring in part and concurring in the judgment. SCALIA, J., filed a dissenting opinion, in which THOMAS and ALITO, JJ., joined. ALITO, J., filed a dissenting opinion, in which SCALIA and THOMAS, JJ., joined.

Samuel J. Buffone, Washington, DC, for petitioner.

Michael R. Dreeben, for respondent.

J.A. Canales, Canales & Simonson, Corpus Christi, TX, Samuel J. Buffone, Counsel of Record, Ryan M. Malone, Ropes & Gray LLP, Washington, DC, for Petitioner.

Justice STEVENS delivered the opinion of the Court.

[557 U.S. 112]

In Dunn v. United States, 284 U.S. 390, 393, 52 S.Ct. 189, 76 L.Ed. 356 (1932), the Court, speaking through Justice Holmes, held that a logical inconsistency between a guilty verdict and a verdict of acquittal does not impugn the validity of either verdict. The question presented in this case is whether an apparent inconsistency between a jury's verdict of acquittal on some counts and its failure to return a verdict on other counts affects the preclusive force of the acquittals under the Double Jeopardy Clause of the Fifth Amendment. We hold that it does not.


In 1997, Enron Corporation (Enron) acquired a telecommunications business that it expanded and ultimately renamed Enron Broadband Services (EBS). Petitioner F. Scott Yeager served as Senior Vice President of Strategic Development for EBS from October 1, 1998, until his employment was terminated a few months before Enron filed for bankruptcy on December 2, 2001. During his tenure, petitioner

[557 U.S. 113]

played an active role in EBS's attempt to develop a nationwide fiber-optic telecommunications system called the Enron Intelligent Network (EIN).

In the summer of 1999, Enron announced that EBS would become a “ ‘core’ ” Enron business and a major part of its overall strategy. App. 11. Thereafter, Enron issued press releases touting the advanced capabilities of EIN and claiming that the project was “ ‘lit,’ ” or operational. Id. at 10. On January 20, 2000, at the company's annual equity analyst conference, petitioner and others allegedly made false and misleading statements about the value and performance of the EIN project. On January 21, 2000, the price of Enron stock rose from $54 to $67. The next day it reached $72. At that point petitioner sold more than 100,000 shares of Enron stock that he had received as part of his compensation. During the next several months petitioner sold an additional 600,000 shares. All told, petitioner's stock sales generated more than $54 million in proceeds and $19 million in personal profit. As for the EIN project, its value turned out to be illusory. The “intelligent” network showcased to the public in the press releases and at the analyst conference was riddled with technological problems and never fully developed.

On November 5, 2004, a grand jury returned a “Fifth Superseding Indictment” charging petitioner with 126 counts of five federal offenses: (1) conspiracy to commit securities and wire fraud; (2) securities fraud; (3) wire fraud; (4) insider trading; and (5) money laundering.1 The Government's theory of prosecution was that petitioner—acting in concert with other Enron executives—purposefully deceived the

[557 U.S. 114]

public about the EIN project in order to inflate the value of Enron's stock and, ultimately, to enrich himself. 2Id., at 6.

Count 1 of the indictment described in some detail the alleged conspiracy to commit securities fraud and wire fraud and included as overt acts the substantive offenses charged in counts 2 through 6. Count 2, the securities fraud count, alleged that petitioner made false and misleading statements at the January 20, 2000, analyst conference or that he failed to state facts necessary to prevent statements made by others from being misleading. Counts 3 through 6 alleged that petitioner and others committed four acts of wire fraud when they issued four EBS-related press releases in 2000. Counts 27 through 46, the insider trading counts, alleged that petitioner made 20 separate sales of Enron stock “while in the possession of material non-public information regarding the technological capabilities, value, revenue and business performance of [EBS].” Id., at 31. And counts 67 through 165, the money laundering counts, described 99 financial transactions involving petitioner's use of the...

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1 cases
  • Yeager v. United States
    • United States
    • United States Supreme Court
    • June 18, 2009
    ...557 U.S. 110129 S.Ct. 2360174 L.Ed.2d 7877 USLW 4515F. Scott YEAGER, Petitioner,v.UNITED STATESNo. 08–67.Supreme Court of the United StatesArgued March 23, 2009Decided June 18, Reversed and remanded. Justice Kennedy filed opinion concurring in part and concurring in the judgment. Justice Sc......

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