Two former executives of Adelphia Communications Corp. may be entitled to dismissal on double jeopardy grounds of the conspiracy charges lodged against them in a second indictment now that the 3rd U.S. Circuit Court of Appeals has voted 7-4 in their favor.
But the dissenting opinion shows that the 3rd Circuit's divided ruling is just the latest fissure in a deepening split among the federal circuits on the issue of how courts should tackle double jeopardy claims that arise from successive prosecutions under the general conspiracy law.
Such spirited disagreement among lower court judges can sometimes pave the way for the U.S. Supreme Court to take an interest.
Last week's ruling is a victory for John Rigas and his son, Timothy Rigas, who are already serving lengthy prison terms for a massive fraud that led to the company's demise.
John Rigas, 85, the company's founder, is serving a 12-year term, and his son, Timothy Rigas, 54, is serving a 17-year term, for waging a scheme to loot the cable television company while hiding the truth about its finances from investors.
After the pair was convicted in New York in 2004, prosecutors in Pennsylvania filed a second indictment that charged them with conspiring to dodge taxes on $1.9 billion they stole.
Now the 3rd Circuit has ruled that the trial judge in the Pennsylvania case was too quick to reject the Rigases' argument that the conspiracy charge violated double jeopardy.
But a dissenting judge said she believed her colleagues had overcomplicated a simple issue and that the tax charges should be allowed to proceed.
The appellate court was reviewing a ruling handed down in 2008 by U.S. District Judge John E. Jones III of the Middle District of Pennsylvania that rejected a motion to dismiss the tax conspiracy charge. Jones declared that although it was filed under the same general conspiracy statute, it did not amount to double jeopardy.
In the New York case, Jones said, the Rigases "were charged with agreeing to conceal from investors, analysts and lenders the failing financial condition of Adelphia," while the Pennsylvania indictment charged them with "agreeing to avoid paying income taxes."
"These two different objectives mark two different conspiracies," Jones wrote.
But on appeal, the Rigases' lawyers -- Lawrence G. McMichael, Matthew P. Faranda-Diedrich and Patrick M. Northen of Dilworth Paxson -- argued that the alleged conspiracy charged in the Pennsylvania case was formed by the same illegal agreement that created the New York conspiracy.
The two alleged conspiracies, the defense team argued, amounted to nothing more than different ways of violating a single general conspiracy statute -- Section 371 -- and it was insignificant that the first was styled as a conspiracy to "commit offenses against the United States," while the second was alleged as a scheme "to defraud the United States."
The 3rd Circuit agreed -- first in a ruling by a three-judge panel issued in October 2009, and now in an en banc decision from an 11-judge court.
In both opinions, Judge Julio M. Fuentes authored the majority opinion and Judge Marjorie O. Rendell wrote the dissent.
Fuentes was joined in the en banc decision by Chief Judge Theodore A. McKee and Judges Maryanne Trump Barry, Thomas L. Ambro, D. Brooks Smith, D. Michael Fisher and Kent A. Jordan.
Rendell was joined in her en banc dissent by Judges Anthony J. Scirica, Michael A. Chagares and Thomas M. Hardiman.
Writing for the court, Fuentes found that the Rigases have a valid double jeopardy argument because Section 371 creates a "single statutory offense."
Scrutinizing the conspiracy charge lodged in New York as compared to the one in Pennsylvania, Fuentes found there were important areas of overlap. In both, he said, the Rigases had a common goal -- to "enrich themselves through the looting of Adelphia."
Prosecutors alleged in the Pennsylvania indictment that, after a particularly high tax bill, the Rigases decided "that they would never pay a large amount of taxes again," and therefore decided that "Rigas family members should not take large salaries from Adelphia, but should 'live out of the company.'"
To avoid detection, the Pennsylvania indictment charged, the Rigases engaged in sham transactions to conceal their use of corporate assets.
Fuentes noted that several of the federal appeals courts -- the 2nd, 9th, 11th and District of Columbia circuits -- have held that single counts alleging violations of both the "offense" and "defraud" prongs of Section 371 are not duplicitous.
In doing so, Fuentes said, those courts held that because the counts charge one crime, not two, it logically follows that Section 371 creates a single offense.
The prosecutors, Fuentes said, were urging the 3rd Circuit to disregard the cases that analyzed whether the statute created a single offense for duplicity purposes, arguing that "duplicity is a mere pleading requirement."
Fuentes disagreed, saying, "It is simply untenable, as urged by the government, that Congress intended the plain language of the statute to have one meaning in the duplicity context and an entirely different meaning for double jeopardy purposes."
Even if the duplicity and double jeopardy concerns are "aimed at different purposes," Fuentes said, those differing analyses "do not alter the fact that the text we are interpreting is the same."
Fuentes also said he believed the government "too readily dismisses duplicity as a mere pleading requirement, detached from double jeopardy concerns. ... To the contrary, the issue in both duplicity and double jeopardy is whether Congress intended to create one offense or two."
But Fuentes stopped short of declaring that the Pennsylvania conspiracy charge violates double jeopardy.
Instead, Fuentes found that the trial judge must tackle that question by looking to the totality of the circumstances in deciding whether the two conspiracy charges should be treated as two separate and distinct agreements.
But Fuentes offered extensive guidance on those issues that effectively put a heavy burden on the prosecutors to prove that double jeopardy should not apply.
"Because both indictments concern the same underlying transactions, they relate to the same time and place, and involve the same core group of participants. Both indictments have a common goal, and individual overt acts in both indictments were interdependent," Fuentes wrote.
"Indeed, the record reveals no factor that would have prevented the government from bringing the counts charged in the Pennsylvania indictment in the New York prosecution. Accordingly, the Rigases have established a strong inference that there was a single agreement," Fuentes wrote.
On remand, Fuentes said, the government "will bear the burden of proving by a preponderance of the evidence that the Rigases entered into two separate agreements."
In her dissent, Rendell said she believed the issue centered on the intent of Congress.
"I come back to the essential question as to congressional intent and believe it unimaginable that Congress did not intend to punish separately the two distinct types of conspiracies set forth in Section 371 -- as have two of the three courts of appeals to have considered this issue," Rendell wrote.
"I can only conclude that the 'defraud' and 'offense' provisions are not different ways of committing the same crime, but, instead, set forth different crimes. ... There simply is no issue of double jeopardy," Rendell wrote.