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2005
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May 31
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2005
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Arthur Andersen v United States
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04-368
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125 S Ct 2129 161 L Ed 2d 1008 2005 US LEXIS 4348 73 USLW 4393 Fed Sec L Rep (CCH) P93,266 18 Fla L Weekly Fed S 324
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Charges filed against Arthur Andersen LLP in the United States District Court for the Southern District of Texas on May 6, 2002 <br><br> Arthur Andersen appeals to the United States Court of Appeals for the Fifth Circuit
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'' (
2005 ) was a
United States Supreme Court case in which the Court unanimously overturned accounting firm
Arthur Andersen 's conviction of obstruction of justice on the basis that the law Andersen was charged under was not correctly portrayed to the jury.
During the fall of
Enron , Arthur Andersen, who was Enron's accounting firm, instructed its employees to destroy documents relating to Enron after Andersen officials learned they would soon be investigated by the Securities and Exchange commission. On
May 6 ,
2002 a charge of obstructing an official proceeding of the Securities and Exchange Commission was filed against Arthur Andersen LLP in Texas District Court. The jury found Arthur Andersen guilty. Andersen appealed to the
United States Court Of Appeals For The Fifth Circuit . The fifth circuit affirmed the district court's decision. Andersen filed a
Writ Of Certiorari to the Supreme Court, which was granted.
At issue was whether or not the jury has been properly communicated the law which Andersen was charged with violating. They were charged under 18 U.S.C. § 1512(b)(2)(A) and (B), which made it a crime to “knowingly … corruptly persuad
{Link without Title} another person … with intent to … cause” that person to “withhold” documents from, or “alter” documents for use in, an “official proceeding.” Arthur Andersen believed the instructions given to the jury were not proper. The jury was reportedly told "even if petitioner honestly and sincerely believed its conduct was lawful, the jury could convict." This is not true, held the Supreme Court. The statute they were being charged under used the language "knowingly ... corruptly persuade". Arthur Andersen managers did instruct their employees to delete Enron-related files, but those actions were within their document retention policy. If the document retention policy was constructed to keep certain information private, even from the government, Arthur Andersen was still not corruptly persuading their employees to keep said information private.
In a unanimous decision by the Supreme Court, Arthur Andersen's conviction was overturned. Chief Justice
Rehnquist wrote the opinion for the court, and was joined by all associate justices.
