Arthur Anderson Llp v. United States

544 U.S. 696 (2005)

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Nature of the Case

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Facts

D was Enron's auditor, and during this time frame Enron was in the process of being discovered for the fraud that it created. D audited Enron's publicly filed financial statements and provided internal audit and consulting services to it. Things were going downhill very quickly for Enron. D had formed an Enron 'crisis-response' team, which included Nancy Temple, an in-house counsel. D retained outside counsel to represent it in any litigation that might arise from the Enron matter. The next day, Temple discussed Enron with other in-house counsel. At a general training meeting attended by 89 employees, including 10 from the Enron engagement team, everyone was urged to comply with the firm's document retention policy. It was stated that it was ok if documents are destroyed in the course of [the] normal policy and litigation is filed the next day. Enron announced its third quarter results and the next day the SEC notified Enron by letter that it had opened an investigation in August and requested certain information and documents. On October 19, Enron forwarded a copy of that letter to D. On the same day, Temple sent an e-mail to a member of D's internal team of accounting experts and attached a copy of the document policy. On October 20, the Enron crisis-response team held a conference call, during which Temple instructed everyone to 'make sure to follow the [document] policy.' These, and other smaller meetings were followed by substantial destruction of paper and electronic documents. Despite the mounting issues and obvious requests for accounting documents, the document destruction continued, despite reservations by some of petitioner's managers. On November 8, the SEC served Enron and D with subpoenas for records. On November 9, an e-mail was sent that stated: 'Per Dave -- No more shredding . . . . We have been officially served for our documents.' D was indicted under sections 1512(b)(2)(A) and (B) for knowingly, intentionally and corruptly persuade . . . other persons, to wit: [D's] employees, with intent to cause' them to withhold documents from, and alter documents for use in, 'official proceedings, namely: regulatory and criminal proceedings and investigations.' Eventually, after a deadlock and Allen charge, the jury returned a guilty verdict. The Court of Appeals affirmed. It held that the jury instructions properly conveyed the meaning of 'corruptly persuades' and 'official proceeding'; that the jury need not find any consciousness of wrongdoing; and that there was no reversible error. The Supreme Court granted certiorari because of a split of authority regarding the meaning of §1512(b).