Legal Docket: Challenging the evidence

MARY REICHARD, HOST: It’s Monday, May 1st! We’re glad to have you along for today’s edition of The World and Everything in It. Good morning! I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. It’s time for Legal Docket.

Well, there was a bit of a kerfuffle last week. Chief Justice John Roberts declined an invitation from Senator Dick Durbin to appear before his committee, and speak under oath about ethics and the high court.

The reply is worth a direct quote, and here it is: “Testimony before the Senate Judiciary Committee by the chief justice of the United States is exceedingly rare, as one might expect in light of separation-of-powers concerns and the importance of preserving judicial independence.”

Roberts noted that the only two times a justice did testify before Congress, it was only, as he put it, for “routine matters.”

REICHARD: Context is especially important here. Democrats are frustrated with a bench that is majority conservative.

So they push to change that: Impose term limits! Pack the court! Fund the court next year but only if it adopts an approved ethics code! Or use cooperating journalists to lob false accusations.

That’s behind Senator Durbin’s “invite” to the Chief Justice.

Recently, ProPublica used innuendo in an overlong story that said Justice Clarence Thomas failed to report trips and lodging from a rich friend.

The story on Justice Thomas left the impression he’d been hiding something for decades when he’d done nothing wrong and had broken no rules.

EICHER: Okay well, onto oral arguments.

First, Samia v United States. This one involves a person’s Sixth Amendment guarantee of a right to confront witnesses against him in a criminal case. It’s also known as the Confrontation Clause.

Federal prosecutors accused a man named Adam Samia of having “committed an array of crimes worthy of a James Bond villain.” Samia labored in the service of a transnational criminal organization. The crimes: Murder, kidnapping, drug trafficking, money laundering, “minor warlordism in Africa.” In other words, he was on a team of mercenaries.

Samia didn’t get away with it, though. Eventually he was caught, convicted, and sentenced to life in prison.

REICHARD: But Samia says at trial, he was denied his right to confront a witness against him. Here’s what happened: A co-defendant in the case tagged Samia as an accomplice. The jury was presented with that confession, but with Samia’s name blotted out.

He says, as a constitutional matter, that’s not good enough. Listen to his attorney, Kannon Shanmugam:

KANNON SHANMUGAM: Over 50 years ago, in Bruton versus United States, this Court held that the admission of a non testifying defendant's confession that accuses another defendant in a joint trial violates the Confrontation Clause, even in the face of a limiting instruction, in light of the uniquely prejudicial effect that such a confession has on the jury.

The key phrase is “Non Testifying defendant.” What that meant in effect was Samia had no chance to cross-examine that guy, the non-testifying defendant.

A violation of the Sixth Amendment to his way of thinking.

Again, lawyer Shanmugam:

SHANMUGAM: In this case, the prosecution substituted phrases like "the other person" for Petitioner's name, but, having done that, the prosecution used the confession functionally to identify Petitioner. The prosecution's questioning of the agent who took the confession left little doubt that the confessing defendant had named "the other person." Petitioner was the only defendant who plausibly could have been "the other person."

EICHER: Process of elimination, in other words. Jurors are smart enough to do that kind of deductive reasoning on their own.

So Samia’s legal team is asking the justices to set a rule that trial courts have to consider context. Here, that non-testifying co-defendant confessed before trial that he’d been the getaway driver, and he identified the trigger man as Samia, who’d killed someone.

The trial judge didn’t think context mattered. The confession with the name blotted out was good enough, and the appeals court agreed.

That’s when Samia took it up with the Supreme Court.

On the other side for the federal government, assistant to the Solicitor General Carolyn Flynn:

CAROLYN FLYNN: If the jury is instructed not to consider a piece of evidence against a criminal defendant and the jury follows that instruction, then there is no Confrontation Clause problem. Confessions that replace a defendant's name with a natural-sounding noun or pronoun do not give rise to an overwhelming probability of juror disobedience.

REICHARD: The government argued any Confrontation Clause error here is harmless compared to the overwhelming evidence against Samia.

Justice Elena Kagan posed a hypothetical for Flynn. You’ll hear reference to a 1998 opinion called Gray v Maryland. It defined incriminating statements made outside of court as a class of speech that’s not admissible.

JUSTICE KAGAN: John and Mary go out and they rob Bill, and they’re found out, and they’re put on trial, and they’re put on trial together. And John has confessed. Let’s say he said, ‘Mary and I went out and robbed Bill. Now that's obviously inadmissible under Bruton, correct?

FLYNN: Correct.

KAGAN: And then suppose instead there's something that says, ‘redacted and I went out and robbed Bill.’ That's obviously admissible under Gray.

FLYNN: Inadmissible under Gray.

KAGAN: Inadmissible under Gray. So -- but it's neither of those two things. Instead, the confession says, she and I went out and robbed Bill, or it says, the woman and I went out and robbed Bill. What do we do with that?

EICHER: The question of admissibility as evidence.

Flynn answered that if a court has to look outside the corners of the confession itself and look at other evidence to form the inference that might incriminate the defendant … that’s not workable.

Courts would be inundated with miniature trials within the trial sorting all that out.

Much simpler is to say explicit references are incriminating, like names or nicknames, but that’s it. Nothing else.

Lawyer Shanmugam for Samia said constitutional guarantees are what’s paramount.

SHANMUGAM: In the John and Mary hypothetical, the government seems to take the position that "the woman and I robbed Bill" would be admissible. I take it that the government's position would be that if the confession instead said, my girlfriend and I robbed Bill, that that would not be admissible because that would be an identification. What about a confession that says, my friend M. and I robbed Bill, the theory being that John had multiple friends named M. Who knows? …delete….And so the government's rule doesn't have the benefit of clarity that the government suggests.

REICHARD: Shanmugam ended his time with pungency:

SHANMUGAM: If you throw a skunk in the jury box, you can't instruct the jurors not to smell it. And I would submit that this is a case in which the government not only threw a skunk into the jury box but pointed to it repeatedly, and the jury could hardly be expected to ignore it.

That’s vivid lawyering.

Well on now to the second oral argument dealing with company stock.

Back in the day, companies seeking to go public and issue stock did so by making an IPO, an initial public offering. The company would file registration statements that described the company and the new shares. Banks then bought the stocks and in turn offered them for sale to the public.

Five years ago the New York Stock Exchange allowed share owners to sell directly to the public. No banks were involved, and for the most part no registration statement was required.

EICHER: The communication platform Slack started offering shares directly to the public soon after the rule change. Up for sale was a mix of millions of shares both registered and unregistered.

Early on, a man named Fiyyaz Pirani bought 30,000 shares at a price of $38.50 each. Later he bought more than 200,000 shares. Some registered, some not.

But then the share price dropped 35%. Pirani was not happy.

So he brought a class-action suit against Slack, alleging the company misled stock buyers in the registration statements it did file.

REICHARD: This gets complicated with technical aspects of the Securities Act of 1933. The question is how to apply that old law to the new, direct-sale method. Two sections in particular are relevant and you’ll hear the lawyers home in on two of them: Section 11 and Section 12.

This point is also where the difference between registered and unregistered shares come in.

Slack says Pirani must plead and prove he actually bought registered shares. He can’t complain about misleading statements if he bought shares that didn’t even require registration. Slack says Pirani therefore lacks standing to sue.

Listen to the lawyer for Slack, Thomas Hungar:

THOMAS HUNGAR: Respondent can't identify a single case in the 90-year history of the Securities Act imposing Section 11 liability on exempt shares. Congress, despite revisiting the Act numerous times over the years, has been content to leave the law that way.

Justice Clarence Thomas jumped in first with a question.

JUSTICE THOMAS: You mentioned 90-year history, but have we had direct listing before? I mean, that seems to be what's causing the problem.

HUNGAR: We haven't had direct listing before, Your Honor, but, certainly, there are other circumstances, and it's undisputed that there are many other circumstances, in which the tracing requirement, given the modern operation of the security markets, is difficult or sometimes impossible for plaintiffs to satisfy, but that has not led Congress to change the law.

EICHER: For the other side, Pirani argues Congress intended to protect investors by making liability broad. The information investors need is already “out there,” as Lawyer Kevin Russell argues:

KEVIN RUSSELL: What registration statements do is they do not act -- at the level of individual shares. Instead, they act at the level of a public offering of securities, not shares, that is, the planned introduction of a group of fungible shares to the market at a particular time. The function of the registration statement is to provide the market the information it needs to value all of those fungible shares in that public offering.

REICHARD: The eventual outcome here will determine the scope of protection for investors and also affect how companies deal with anticipated litigation.

And that’s this week’s Legal Docket!

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