Criminal Bench Trials Buck Conventions


	Print or Email This Page Criminal Bench Trials Buck Conventions For White-Collar Defendants in Complex Cases, Jury Can Be a Risk Aug. 29, 2005 Daily Journal By Anna Oberthur SAN FRANCISCO - Former McKesson executive Richard Hawkins took a big risk when he waived his right to a jury trial as he faced criminal securities fraud charges in San Francisco earlier this year. The gamble paid off when U.S. District Judge Martin Jenkins found the former chief financial officer not guilty of all charges last month. The high-profile acquittal underscored one reason defense attorneys are willing to chance a bench trial: the fear that in the post-Enron era, many jurors may hold prejudices against corporate executives such as Hawkins. Now Charles McCall, another former McKesson executive facing similar charges before the same trial judge, plans to waive his right to a jury. But this time, prosecutors plan to fight the motion, according to court documents. "Given the results [for Hawkins], it's not surprising the government doesn't agree to waive this time," said white-collar criminal defense attorney Nanci Clarence. The comprehensive 38-page order declaring Hawkins not guilty was "as close to an exoneration as the defense could have hoped for," said Clarence, of Clarence & Dyer in San Francisco. It's rare for a defendant in a white-collar criminal case to forsake the constitutional right to a 12-member jury and put his fate in the hands of a judge well-schooled in the ways of con artists. The decision to waive a jury trial is not made lightly, said Morrison & Foerster partner Stephen Freccero, who spent nine years as a federal prosecutor. "There is nothing a lawyer will focus on more than that particular decision," said Freccero, now practicing white-collar criminal defense in San Francisco. "That's the type [of decision] that will get second-guessed forever." Hawkins' attorneys bucked tradition when they asked Jenkins to be the fact-finder in the securities fraud case. The team was led by Orrick, Herrington & Sutcliffe partners Melinda Haag and Walter Brown Jr. "They did take a risk," John Keker, of Keker & Van Nest in San Francisco, said of the Hawkins team. "The conventional wisdom is, in a case involving credibility determination, you don't ask a judge to rule against the government." "It's nice to see conventional wisdom challenged," Keker added. In criminal cases, defense attorneys generally view juries as the safer bet. The odds are better - instead of one person deciding the client's fate, there are 12 - and juries are considered more sympathetic than judges. But there are times when the defense may want a sophisticated fact-finder, such as in a particularly complicated prosecution. In that case, a judge known for fairness and smarts might be preferred. It's likely attorneys for the remaining two former McKesson defendants - McCall and Jay Lapine, a former general counsel for the corporation, scheduled to go on trial in September 2006 - are looking closely at the Hawkins team's successful strategy. Lapine, however, is not at this point planning to waive a jury trial, according to this lawyer, William Goodman of Topel & Goodman in San Francisco. There's some disagreement among attorneys whether McCall's request for a bench trial can be vetoed by the government. Generally, if both parties don't consent to the waiver, a jury trial must be held, attorneys said. According to Rule 23 in the federal rules of criminal procedure, both parties must consent and win court approval. Attorneys for McCall plan to submit a brief in the next month to buttress his request. Presumably, they will explain why Jenkins should disregard any objection from the government. "That sounds like a very interesting argument," said Stephen Mansfield, partner in charge of Akin Gump Strauss Hauer & Feld in San Francisco. "Without knowing their authority, I do think the better position is that the government should not be permitted to stand in the way of the accused seeking a bench trial." The most obvious argument for a bench trial is that the issues are so complex, the jury might not be able to understand them. Hawkins defense attorney Haag acknowledged that factor was important to her client's decision. "One of the factors was our belief that in order to understand the case and understand that Mr. Hawkins was innocent, the fact-finder had to truly understand these very complex accounting issues," Haag said. "We had much more confidence in the court's ability to understand those issues than a jury's ability to understand those issues." Hawkins was chief financial officer in 1999 when San Francisco-based McKesson, the nation's largest pharmaceutical distributor, bought Georgia-based HBO & Co. Prosecutors argued that Hawkins was involved in a scheme to inflate apparent profits shortly following the HBO acquisition. When the extent of the suspected misconduct became public, according to court filings, the value of the company's stock plummeted by more than $8 billion. Six former HBO executives also were also accused of corporate misconduct, and four have pleaded guilty. Only McCall and Lapine remain to be tried. Hawkins' attorneys had not only complexity to worry about, but also the prospect of a biased jury. Many members of the white-collar criminal defense bar echo that concern. "It's a fair call to say there's concern, from a defense perspective, [about] potential jurors' general animosity toward highly paid executives who are accused of defrauding the investing public," said Mansfield, a former federal prosecutor. Most criminal defense lawyers say jury surveys show bias against white-collar defendants, according to Stephanie Martz of the National Association of Criminal Defense Lawyers in Washington, D.C. "It's not a good climate for white-collar defendants," said Martz, who heads the organization's white-collar crime project. Jury consultants have noticed it, too. "It's hard because the public is so angry. It wants blood," said jury consultant Howard Varinsky, of Varinsky Associates Trial Consultants in Emeryville. Varinksy advised Hawkins' defense team, but said he couldn't discuss the case. With the exception of former HealthSouth chief Richard Scrushy, who was acquitted by a jury in his home state of Alabama, juries have convicted one corporate defendant after another in the past few years, from Martha Stewart to WorldCom's Bernard Ebbers. In Texas, former Enron Chairman Kenneth Lay has waived a jury for his upcoming trial on bank fraud charges, the first of two criminal prosecutions he faces in the Enron scandal. According to a brief submitted by Lay's defense team, a bench trial "minimizes the very palpable risk of intensifying, in advance of the main trial, already inflamed jury prejudices among the local venire." But jurors aren't the only ones with potential biases, according to some attorneys. "I don't think judges are immune to hostile feelings toward corporate executives," Keker said. "I think those are very difficult cases to try to a jury, but I think they are also difficult cases to try to a judge." Observers said they didn't think anyone had doubts about Jenkins' impartiality. "What both sides got in Judge Jenkins was an extremely thorough, thoughtful, hardworking fact-finder," Mansfield said, adding that he thinks "most judges call it straight." Jenkins was appointed to the federal bench by President Bill Clinton in 1997. Before that, he served on the Alameda County Superior Court. In the aftermath of the seven-week Hawkins trial, some Monday-morning quarterbacks have debated whether prosecutors made a mistake by accepting a bench trial. The U.S. Attorney's team was led by Haywood Gilliam and Tim Crudo, who declined to comment. "I'll say this," said Clarence, the defense attorney. "They made a calculation. Maybe they were concerned about (jury) confusion as well." Prosecutors, hungry for a verdict after a long and expensive case, might have agreed to a bench trial hoping it would help avoid a mistrial. They may have been "thinking if we get a verdict on this one, the others (cases) will fall into line," Clarence said. "Now, there's a little blood in the water and they're wounded by this." Fighting a defendant's jury-trial waiver carries its own risks, lawyers said. Objecting could be perceived as telling a judge that you don't trust him or her. "You don't want to suggest to a judge like Judge Jenkins, for example, who is careful and reasonable and smart, that you don't think he can be fair," said John Hemann, a former federal prosecutor who is now with Morgan, Lewis & Bockius in San Francisco. "Because what you are really saying is, we want to try and snake a jury."
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