The justices were unanimous in calling a broad interpretation of the law, which makes it a crime “to deprive another of the intangible right of honest services,” unconstitutionally vague.
The decision will have implications for many other cases, including those of former Gov. Rod R. Blagojevich of Illinois, who is on trial on charges of violating the law in Chicago, and Joseph L. Bruno, a prominent former New York politician, who was recently convicted of violating the law.
Many lower court judges and scholars have called the law hopelessly vague, saying it could apply to conduct as routine as calling in sick to go to a baseball game. The vagueness of the law, these critics said, gives potential defendants insufficient notice of what is a crime and prosecutors too much discretion in deciding whom to charge.
Justice Ruth Bader Ginsburg, who wrote the majority decisions in both the Skilling and Black cases, said the law must be limited to the offenses of bribes and kickbacks. She was joined by Chief Justice John G. Roberts Jr. and Justices John Paul Stevens, Stephen G. Breyer, Samuel A. Alito Jr. and Sonia Sotomayor.
Three members of the court, Justices Antonin Scalia, Clarence Thomas and Anthony M. Kennedy, would have gone further than the majority and struck down the law entirely. Justice Scalia wrote that the majority’s middle-ground solution limiting the law to bribes and kickbacks “requires not interpretation but invention.”
Prosecutors had charged Mr. Skilling with manipulating the financial results of Enron, the collapsed energy company, and misleading investors about them. That may be a crime, Justice Ginsburg wrote, but it is not a violation of the honest-services law.
“The government did not, at any time, allege that Skilling solicited or accepted side payments from a third party for making these misrepresentations,” she wrote. “It is therefore clear that, as we read” the law, “Skilling did not commit honest-services fraud.”
Mr. Skilling’s lawyers have argued that a decision in his favor should void his entire conviction, which was based on several theories. That is, Justice Ginsburg wrote, “an open question” to be resolved by the lower courts.
By a separate 6-to-3 vote, the justices rejected a second challenge from Mr. Skilling, who said that he had not received a fair trial in Houston in 2006, given widespread prejudice against Enron, and that the trial should have been moved to another city.
Justice Ginsburg said that earlier decisions of the court reversing convictions on such grounds arose in markedly different settings.
In one, the court threw out the conviction of Wilbert Rideau for the 1961 murder of a bank teller in Lake Charles, La. The local television station broadcast Mr. Rideau’s 20-minute filmed interrogation three times over two days, reaching an estimated 20,000 to 53,000 people each time. Lake Charles’s population was about 150,000.
Houston, by contrast, is the fourth-most populous city in the United States, meaning it had to be possible to find a dozen impartial jurors, Justice Ginsburg said. News coverage concerning the charges against Mr. Skilling, she added, did not include “evidence of the smoking-gun variety” and in any event diminished between Enron’s collapse in 2001 and Mr. Skilling’s trial.
The fact that the jury acquitted Mr. Skilling of nine insider-trading counts, Justice Ginsburg added, suggested that it was not inflamed by prejudice.
Three justices dissented from this part of the majority opinion. Justice Sotomayor, a former trial judge, writing for herself and Justices Stevens and Breyer, said Mr. Skilling’s fair-trial rights had been violated by the way the jury was selected given “the mountainous evidence of public hostility.”
“For Houstonians,” Justice Sotomayor wrote, “Enron’s collapse was an event of once-in-a-generation proportions. Not only was the volume of media coverage immense and frequently intemperate, but the sheer number of victims created a climate in which animosity toward Skilling ran deep and the desire for his conviction was widely shared.”
Justice Alito, in a concurrence in the case, Skilling v. United States, No. 08-1394, countered that the only question that should be considered is whether a biased juror was actually seated. He said there was no evidence of that.
The justices also returned the Black case to the lower courts. There, the government had charged Mr. Black, the former chairman of Hollinger International, with both traditional and honest-services fraud for accepting and failing to disclose noncompetition fees. The jury convicted Mr. Black, but it was not clear which charge the jury relied on.
The federal appeals court in Chicago had held Mr. Black’s lawyers responsible for the confusion because they had opposed a request from the prosecutors to ask the jury to fill out a form specifying the basis of the conviction.
The Supreme Court reversed the appeals court ruling in Thursday’s decision, Black v. United States, No. 08-876. Mr. Black, Justice Ginsburg wrote, did not forfeit his right to challenge the jury instructions “by declining to acquiesce in the government-proposed special-verdict forms.”
Thursday’s ruling in the Skilling case, Justice Ginsburg continued, made it clear that Mr. Black’s objection was correct. As in the Skilling case, the justices did not say whether he should be released from prison. “We express no view as to whether the error was ultimately harmless,” Justice Ginsburg wrote in the Black case.
Shortly after the Supreme Court’s rulings on Thursday morning, defense lawyers for Mr. Blagojevich filed a request to delay his corruption trial in Chicago until next week in order to sort through the ramifications for his case. Judge James B. Zagel, who has been presiding over Mr. Blagojevich’s trial since the start of this month, denied the request and went on with testimony on Thursday.
In a brief, unsigned opinion, the justices also returned a third honest-services cases to the lower courts for further consideration, this one involving a former Alaska legislator, Bruce Weyhrauch, who did not disclose soliciting work from a company with business before the Legislature. Mr. Weyhrauch had argued the federal honest-services law should not apply in public corruption cases where no violation of a state law was claimed.
The court is likely to issue its last four decisions of the term on Monday, including ones concerning the applicability of the Second Amendment to state and local gun control laws and the constitutionality of an accounting oversight board created by the Sarbanes-Oxley Act of 2002.