The Association of U S West Retirees



Nacchio case goes to full court
Oral arguments take 40 minutes, decision to come in months ahead
By Jeff Smith
Rocky Mountain News
Thursday, September 25, 2008
Updated September 25, 2008 at 2:03 p.m.

1:40 p.m.: Oral arguments completed in the Joe Nacchio case in front of the full appellate court.

Both the defense and government were grilled extensively today on the chain of events that led to the exclusion of expert witness Daniel Fischel from testifying at Nacchio's insider-trading trial.

Many of the arguments were very technical, based on federal rules in criminal trials.

The judges clearly were bothered by the fact that the defense didn't ask for a hearing on the Fischel expert witness issue, or ask for a continuance in the trial.

But the judges also grilled the government on whether the defense really had ample opportunity to ask for a hearing or disclose Fischel's methodology, and whether Nottingham abused his discretion in excluding Fischel as a witness.

The court now can rule whenever it chooses. It will either order a new trial, reinstate Nacchio's conviction on 19 counts of insider trading, or refer the issue of the expert witness back to U.S. District Court.

1:20 p.m.: Government's oral arguments begin

Government attorney Edwin Kneedler says the question is whether federal judge Nottingham abused his discretion in excluding Fischel's testimony without holding a hearing.

Some appellate judges are questioning the government's position that the defense had ample opportunity to ask for a hearing or to disclose Fischel's methodology.

Government attorney Kneedler said Judge Nottingham based his decision on the opinion that Fischel wasn't going to testify based on scientific evidence, but instead based on his experience or opinion.

1:02 p.m.: Oral arguments are under way.

Nacchio's attorney Maureen Mahoney argues that the government is relying on the theory that the defense forfeited its opportunity for expert witness Daniel Fischel to testify by failing to ask for a hearing about his reliability and methodology.

Several appellate judges are suggesting that Nacchio's team had the obligation or opportunity to ask for such a hearing. They say federal Judge Edward Nottingham put the defense on notice that it had to disclose the methodology about Fischel.

12:39 p.m.: Attorneys, legal experts and retirees are lining up to hear the oral arguments in front of the full appellate court in the case of former Qwest CEO Joe Nacchio.

Nacchio isn't here today, but the initial government prosecutor Cliff Stricklin, now in private practice, is attending the hearing. The main courtroom now is full. There also are two overflow rooms today with audio feeds.

A three-judge appellate panel earlier this year decided by a 2-1 margin that defense witness Daniel Fischel was improperly excluded at Nacchio’s trial last year. The panel ordered a new trial.

The full Tenth Circuit Court of Appeals agreed to take a second look at the panel’s decision and consider whether Nacchio’s conviction on insider-trading should stand, whether a new trial is in order or whether the issue of the expert witness’ exclusion should be sent back to U.S. District Court.

Nacchio was convicted of 19 counts of insider trading, sentenced to six years in prison, and was ordered to forfeit $52 million of stock proceeds. But he has been free on $2 million bail pending the appeal.