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Nacchio's number not up yet
By Scott Robinson
Rocky Mountain News
Thursday, February 26, 2009

Numbers have not been kind to Joe Nacchio lately.

Having been convicted on 19 counts of insider trading, with a loss calculated at $28 million, which resulted in a six-year prison sentence, a $19 million fine, and $52 million in forfeiture, Joe Nacchio has now lost his 10th Circuit appeal by the narrowest of margins.

Wednesday's 5-4 decision reinstating the ex-Qwest CEO's insider trading conviction leaves Nacchio with only one more last-gasp chance to escape incarceration.

Joe Nacchio's case is Supreme Court-bound.

Just not quite yet.

Although whisker-close by legal standards, with four of the nice participating 10th Circuit judges siding with Nacchio on his claim that he was denied a fair trial by former District Judge Edward Nottingham's ruling excluding most of a defense expert witness' testimony, the outcome remains the same.  The conviction on 19 separate counts is resurrected, and the stay of execution if lifted.

Meaning that Nacchio goes directly to prison, unless yet another stay is granted.  But from whom, and where does the case go from here?

Initially, back to the original three-judge panel which reversed his conviction in the first plane, to determine two as-yet unresolved points raised by Nacchio's attorneys on appeal, relating to the length of incarceration and the amount of forfeiture. 

Nacchio's lawyers had argued that instead of a sentencing guideline range of 70-87 months used by Nottingham, the proper range should be 41-51 months, based on the "gain" obtained by Nacchio.

Nacchio also urged that he should only have to disgorge about $45 million, representing the gross proceeds of his stock sales less out-of-pocket costs.

Those "leftover" issues will now have to be decided by the three judges who first heard the appeal, a panel that includes two of the judges who have consistently ruled in Nacchio's favor.

Even so, since resolution of the remaining issues would not free Nacchio but would merely reduce his prison term and economic losses, a stay is unlikely from the panel, leaving open only the possibility of a stay from a justice of the United States Supreme Court, in advance of a Nacchio obtaining a writ of certiorari, or discretionary review, of the entire 10th Circuit decision.

As the result of legislation passed in 1925, the Supreme Court is free to review only those cases it chooses to consider.  At least four of the nine Supreme Court justices have to vote to grant certiorari in order for Nacchio's appeal to continue, and that is a statistical long shot, since less than 5 percent of the cases presented to the Supreme Court are accepted for consideration.  The court routinely limits its review to cases deciding important federal questions, those establishing significant precedents.

As a consequence, Nacchio can remain free on bond pending final resolution only if his attorneys can persuade at least one Supreme Court justice to grant a stay, in anticipation of certiorari being granted later and the conviction then being set aside.

While still only a possibility, the chances of a stay and subsequent Supreme Court review are significantly increased by virtue of the 10th Circuit's split decision, the strongly worded dissenting opinions and the fact that the admissibility of arguably esoteric expert witness testimony has been the subject of several relatively recent and controversial Supreme Court decision. 

As frustrating as losing the appeal by a single vote must be to Nacchio and his attorneys, the fact that it was a fiercely contested 5-4 decision on a "hot" appeal issue makes Supreme Court intervention more likely.

Which should dampen the elation felt by federal prosecutors and disgruntled Qwest investors once Wednesday's court decision was made public.

Scott Robinson is a Denver trial lawyer specializing in personal injury and criminal defense.