SCOTUS Hears Oral Arguments in Conrad Black Case on “Honest Services” Law

On Tuesday, the United States Supreme Court heard oral arguments on the Conrad Black case and that of co-Appellant Weyhrauch. Both cases turn on constitutional challenges to the 18 U.S.C. § 1346 and its clause that creates a federal crime whenever the alleged fraudulent activity deprives people of honest services. The oral arguments seem suggest that the Court is strongly considering invalidating this law.

The current version of the statute was passed by Congress to overrule the Supreme Court’s ruling in
McNally v. United States. McNally had limited the scope of the mail fraud statute. The version of the law at issue in McNally case made it a crime to use the mails to carry out a fraud — specifically, the law applies to “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.”

McNally defendants in that case were convicted of committing fraud against the citizens of Kentucky for their role in a scheme to channel state workmen’s compensation insurance commissions to a company controlled by McNally and in which Gray had an interest. The prosecutor’s theory was that they had defrauded Kentucky’s citizens of their right to honest government — technically, denying citizens their “intangible right” to honest services.

McNally Court, dividing 7-2, ruled that the mail fraud law only sought to protect property rights, and “does not refer to the intangible right of the citizenry to good government.”

Congress added the “honest services” language in an attempt to overrule
McNally. The statute has been used in recent years to target corporate fraud and its range is exceptionally hard to define. As one commentator has pointed out, reading a newspaper at work would now constitute a violation the law. The question Black is whether the law has gone too far. In yesterday’s arguments, many justices seemed to think that Congress may have gone too far. There is some question whether these cases properly present the issue.

The Court will hear oral arguments later this term in a third case which may also present the question. The case has garnered many strange allies with the business groups teaming up with criminal defense groups to argue for the overturning of the law. During oral arguments, many of the justices seemed sympathetic to the defendants’ arguments. In a separate opinion in an earlier case, Justice Scalia already wrote an opinion strongly opining that the law had gone too far.

To read the New York Time’s take on this case,
click here. To read SCOTUS blog’s take on the case, click here.