US v. Nacchio: The Government Seeks Rehearing En Banc

The Government has requested rehearing en banc by the entire 10th Circuit with respect to the panel decision in US v. Nacchio.  The brief takes issue with the decision to reverse on the basis of the trial judge's decision not to hold a hearing before excluding the testimony of Daniel Fischel. 

The brief is dry and procedural but takes the position that "the panel majority broke new ground in requiring a district judge, sua sponte, to call for a hearing or additional submissions about an expert’s reliability under Rule 702 where a motion to exclude has already raised that issue and the proponent, in his written opposition, has neither made a showing of reliability nor asked for a hearing."  In addition to arguing that the holding is inconsistent with 10th Circuit precedent, the Government also argues that it conflicts with better reasoned case law in the Third Circuit.  See Oddi v. Ford Motor Co., 234 F.3d 136 (3d Cir. 2000).   To the extent the court upholds the panel, the Government asks for a less drastic remedy than reversal.  As the brief notes:

• The Supreme Court has recently indicated that, where it is not clear from the record whether exclusion was actually erroneous, a limited remand for an admissibility inquiry by the district judge in the first instance is a more appropriate remedy than reversal for a new trial.

The argument is one of judicial economy (it is wasteful to always require a hearing) and judicial discretion ("The panel’s decision will likely have a chilling effect on judges who understandably read it to disfavor or prohibit exclusion of 'contextual' economic opinions — even ones that are superfluous or confusing."). 

En banc hearings can only be ordered by a majority of the court and are not favored.  The 10th Circuit rules provide that it is an "extraordinary procedure" intended for matters "of exceptional public importance."  We'll make a prediction on the resolution of this motion but will wait until Nacchio and his team has filed a response (due May 15).

The Government's brief will be posted on the DU Corporate Governance web site later today.