On June 24, 2010, the Supreme Court decided Black v. United States, No. 08-876, holding that three defendants' convictions for mail fraud on a general verdict that may have been based either on the theory that the defendants stole from their company or the theory that they had fraudulently deprived the company of their honest services was flawed in light of the decision in Skilling v. United States, limiting the scope of the honest-services-fraud statute. The defendants' objection to submitting the case to the jury on a special-verdict form that would have specified which of the two theories the verdict was based on did not waive their right to object to the erroneous submission of the honest-services-fraud theory.
Conrad Black and two other executives of Hollinger International, Inc. were convicted of defrauding Hollinger. The government pursued two theories of mail fraud at trial—that the defendants stole millions of dollars from Hollinger by fraudulently paying themselves bogus "noncompetition fees," and that they deprived Hollinger of their "honest services" by failing to disclose those fees. Before jury deliberations began, the government proposed a verdict form that would have required the jury, in the event of a guilty verdict, to identify on which of these theories it based its verdict. The defendants opposed this proposal, and the case was submitted on a verdict form that did not distinguish between the two theories. The jury returned a general verdict finding the defendants guilty of mail fraud.
On appeal, the defendants argued that the jury had been improperly instructed on honest-services fraud and that, because of the general verdict form that had been used, it was impossible to tell the ground on which the verdict rested. The Seventh Circuit held that the jury had been properly instructed on honest-services fraud and that, in any event, the defendants had waived any objection that they might have had about an ambiguous verdict by opposing the use of a special-verdict form that would have avoided the problem.
The Supreme Court unanimously vacated the judgment and remanded for further proceedings. It first held, based on its decision in Skilling v United States, that the instructions on honest-services fraud were incorrect. It also held that the defendants had properly preserved their objection to the instruction, as required by the Federal Rules of Criminal Procedure. The Court rejected the Seventh Circuit's ruling that the defendants waived their objection by opposing a verdict form that would have prevented the ambiguity about which they were complaining, because, although the use of special verdict forms is recognized in the Federal Rules of Civil Procedure, the Criminal Rules contain no similar provision. All the Criminal Rules require is that a defendant object to the proposed instructions before the jury retires to deliberate—which defendants did here. The Seventh Circuit acted improperly in devising its waiver rule, which amounted to a sanction forfeiting defendants' rights that was unsupported by any federal statute or criminal rule. And it applied this court-created sanction without giving the defendants any advance warning of the potential consequence of their refusing to accept the verdict form proposed by the government. The Court emphasized, as it did in Skilling, that it was expressing no opinion about whether the error in instructing the jury about honest-service fraud was ultimately harmless, leaving the question for further consideration on remand.
Justice Ginsburg delivered the opinion of the Court, in which Chief Justice Roberts and Justices Stevens, Breyer, Alito, and Sotomayor joined. Justice Scalia filed an opinion concurring in part and concurring in the judgment, in which Justice Thomas joined. Justice Kennedy also filed an opinion concurring in part and concurring in the judgment.