The Association of U S West Retirees



Appeals difficult vs. Nacchio judge
Legal scholars weigh Nottingham conviction record
By Jeff Smith
Rocky Mountain News
Tuesday, May 15, 2007

The federal judge in the Joe Nacchio insider trading case has been reversed only 14 times out of 108 appeals during his 17-year career on the bench.  And in the cases where U.S. District Judge Edward Nottingham was reversed, most aren't relevant to a possible appeal of the Nacchio conviction, said John Holcomb, University of Denver associate professor of business ethics and legal studies, who examined Nottingham's record.

Nacchio was convicted last month of 19 counts of insider trading in connection with selling $52 million of Qwest stock in April and May 2001.

He was accused of accelerating his stock sales while knowing Qwest's finances were faltering.  His attorneys have said they plan to appeal.

Federal judges historically have a low reversal rate, and that's especially true in criminal cases, Holcomb found.

He cited recent research by university law reviews that placed the "affirmance" rate for criminal cases at an annual average of 87 percent to 99 percent, and at around 80 percent for civil cases.  Nottingham is in the range.

"Originally I thought he was at the top of the heap, now maybe in the middle of (what is a high) range," Holcomb said.

Nottingham was affirmed 79 times out of the 108 appeals.  Eight additional cases were affirmed in part, and seven other decisions generally favored him, such as vacated appeals.

One reversal that caught Holcomb's eye involved a 2000 case in which the appellate court ruled that Nottingham improperly allowed an expert witness to testify.  Holcomb noted how careful Nottingham was in the Nacchio trial to exclude expert testimony.

He said the issue of Nottingham allowing U S West retiree Sally Anderson to testify about her retirement losses could come up, "but I don't think it will be crucial."

Nottingham struck Anderson's testimony from the record, and jurors interviewed after the trial didn't mention the testimony as a factor.

Appeals often challenge jury instructions, but Nottingham "set the bar pretty high" for the prosecution, Holcomb and other experts said.

Nacchio's attorneys have said in court filings they may ask for a new trial based on how the potential juror pool was selected from court questionnaires.

"Obviously the defense is going to pick out as many issues as they can to appeal," Holcomb said, "but as yet I haven't seen any that are that significant."

Holcomb said Republican-appointed judges tend to issue stiffer sentences and that Nottingham has a strong record of his sentences being affirmed on appeal.

Nottingham, the son of western Colorado ranchers, was nominated by then-President George H. W. Bush in late 1989 but actually spent a year filling in on the appellate court, Holcomb said.

Nacchio's sentencing is scheduled for July 27.  Experts expect Nottingham to sentence Nacchio to roughly 10 years in prison.

William Chinnock, a former Ohio state judge now living in Boulder, disagreed with Holcomb that there isn't much basis for appeal.  Chinnock said lead prosecutor Cliff Stricklin crossed the line in his closing rebuttal.

Stricklin urged jurors not to consider Nacchio the victim in the case.  The true victims, he said, were the people who invested in Qwest stock without knowing the information that Nacchio knew.

"There are plenty of victims out there.  For every sale of stock that Joe Nacchio made . . . there is somebody on the other side giving them -- giving him -- their hard-earned money," Stricklin said.  "They invested their dreams, their hopes, maybe early retirement, maybe college for their kids."

Nacchio's lead attorney, Herbert Stern, moved for a mistrial, saying the mention of "victims" was improper.  Nottingham denied the motion.

Chinnock characterized Stricklin's comments as "passion and prejudice" and predicted Stern could prevail on appeal.

Said Holcomb:  "I think the closing passed (legal) muster."

On appeal

  U.S. District Judge Edward Nottingham's record:

79 decisions affirmed

14 decisions reversed

8 decisions affirmed in part, reversed in part

7 other decisions generally in favor of Nottingham, such as a vacated appeal

Source: John Holcomb, University of Denver, business ethics and legal studies or 303-954-5155,2777,DRMN_23910_5537026,00.html