Corporate Governance

The Appeal of Joe Nacchio: En Banc (Oral Argument)

By J. Robert Brown

There was a healthy crowd for the oral argument at the Byron White Courthouse in downtown Denver, standing room only.  The metal detector process revealed Herbert Stern for the Defense wearing a dapper set of suspenders and Cliff Strickland, the former lead attorney for the government, sporting Texas Ranger Cowboy boots. 

Arguments started on time with each attorney allowed a few extra minutes but otherwise kept within the mandated time limits.  Maureen Mahoney went first and by far had the toughest time of things.  She noted that the case had come down to the sole question of whether the defense forfeited the right to present Fischel's testimony by the failure to ask for a hearing.  Judge Briscoe immediately jumped in and noted"  "Isn't that a pretty good argument?"  From there it began. 

Judge Holmes noted that the party seeking admissibility had the burden of doing what it took to get the witness in.  He also pointed out that Judge Nottingham had in place his own practice standards that informed the parties that any opponent to a motion who wanted a hearing had to ask for one.  Judge Lucero expressed impatience with the argument that the defense was some how surprised by the exclusion of Fischel under Rule 702 and read from the transcript where Judge Nottingham specifically relied on the rule.  To that, Judge Tacha added that she was "very perplexed at the surprise argument" and noted that Daubert was mentioned a number of times in the government's motion to exclude. 

Later on rebuttal Mahoney again argued that there was no time to request a hearing, that the defense had Fischel ready and was surprised at the ruling.  To that, Judge Briscoe comment that Fischel was a "frequent flyer" and presumably could be brought back at any time.  She then added that in those circumstances "ask for a continuance."

At the end of her argument (before rebuttal), Mahoney was pressed by Judge Murphy about whether the only possible relief in the case was a new trial.  Mahoney argued that it would be an "odd procedure" and even a "needless procedure" to send the case back but that the court had the discretion to do so.

Edwin Kneedler, counsel for the government, got a less rough time.  He argued it was not an abuse of discretion to fail to hold a hearing.  To that, Judge Kelly wanted to know if the exclusion violated due process. Kneederl pointed out that government experts had been excluded based upon paper motions, without oral argument.  He also noted that the defense had opportunity after the fact to revisit the exclusion issue but did not take all steps that they could of. 

To that line of argument, Judge McConnell pointed out that the issue was not what opportunities the defense had on reconsdiration but on the opportunities that existed before the rule.  Judge McConnell was by far the most rigerous questioner of Kneedler and did his best to back the government lawyer into a corner on the consequences of the ruling.  He was clearly of the view that Fischel, who he noted had been used as an expert by the government and testified in over 200 matters, had been excluded.  At at one point, he noted with respect to Judge Nottingham, that "this judge has a low opinion of economic expertise".  

The Chief Judge wondered whether the sanction in this case, the decision to exclude was "overkill."  Given the search for the truth, he asked:  "Why is total exlusion what we should do here."  Later, Judge Holmes took issue with the characterization of the decision to exclude as a "sanction" to which Kneedler agreed. 

We will put up a second post in a few minutes and venture a prediction.

Full post as published by The Race to the Bottom on September 25, 2008 (boomark / email).