After months of mostly mind-numbing detailed testimony, and 12 days of deliberations by a jury that at times seemed to be splitting at the seams, could Friday’s mistrial in the case against Tyco International’s former chiefs have been avoided?
But legal experts felt the decision by Supreme Court Justice Michael Obus was “reasonable,” given a jury whose actions—though largely responsible—at times seemed more suited to a Fellini film than modern jurisprudence.
Obus reluctantly declared a mistrial Friday, reportedly after a single holdout juror claimed she had been sent a threatening letter. The jury’s inability to reach a unanimous decision prompted days of courtroom tension, as the judge repeatedly sent them back to the jury room to try and reach consensus.
"Once the jury is getting threatening letters, you’ve got to stop it," said UCLA law professor Stephen Bainbridge.
A series of notes last week showed the growing tension among panel members. They described to the judge increasing bile and anger among them, saying the atmosphere had grown "poisonous." One note said they “ceased to be able to conduct respectful, open-minded, good-faith deliberations.”
Each time, Obus returned them to their task, insisting they could reach a decision in time on the allegations that former Tyco CEO Dennis Kozlowski and former CFO Mark Swartz had looted their company of $600 million.
On balance, the jury handled a devilishly complex case with dignity and responsibility. Beneath the trial’s few moments of flash -– like a revealing videotape that showcased Kozlowski’s lavish $2 million bash in Sardinia for his wife’s birthday -– were thousands of pages of company documents and months of detailed testimony and cross-examination chronicling the inner workings of company management and their dealings with the conglomerate’s board members. Stakes were high for Kozlowski and Swartz, who faced up to 30 years in prison if convicted.
Jurors asked several times during deliberations to review bits of testimony, and the charges themselves centered on a hard-to-grasp notion. At best, the alleged Tyco fraud was never a matter of simple embezzlement, but of subtle questions of permission and corporate compensation.
And the detail-oriented accusations were often in stark contrast with the louche details of Kozlowski's public life. His taste for expensive art and lavish surroundings (like $18 million apartments) was plastered across newspaper pages and TV screens, none more so than his now-infamous $6,000 shower curtain. As such, a major defense theme became the need for jurors to separate the indecorous from the illicit.
“There are lots of chief executive officers at companies that live lavish lifestyles,” said Donald Langevoort, a Georgetown law professor and former Securities and Exchange Commission lawyer. “That’s not illegal.”
Adding to the jury’s burden, noted Northwestern University law professor Shari Diamond, is a New York legal rule that jurors must be read their instructions, and cannot have a written copy. In such a complex case, it presents a difficult challenge for any jury to remember the specific charges they are considering without seeing them on paper.
But the real problem, Diamond said, was the public scrutiny of juror No. 4, who apparently made an “OK” signal to the defense team during deliberations last week, and was subsequently named by the New York Post and the Web site of the Wall Street Journal.
"I'm horrified," said Diamond, an expert on juries. "Jurors shouldn’t be subjected to this."
Not only that, but the 79-year-old female juror, a former teacher and attorney labeled “Ms. Trial” by the Post appeared to be the center of the jury’s apparent deadlock. It told the judge it was leaning toward a guilty verdict but had become completely stuck, with a single juror holding out. That juror, the judge was told, felt persecuted and had stopped considering the charges "in good faith."
Shortly after she was publicly named, defense lawyers were quick to point out, spurious comments and threats against her appeared in Internet postings. On Tuesday, they argued the pressure on her had irreparably compromised the proceedings and would taint the verdict. Obus spurned their requests for days, but a threatening letter to juror No. 4 within the past day reportedly forced the judge into a decision he called “a shame.” Another juror was reported to have said the panel was minutes away from a decision – presumably a guilty verdict, given its apparent 11-to-1 split.
However, Diamond said, the juror’s behavior should also serve as a reminder of the importance for judges “to make clear to the jurors that any kind of communication that is not official until the trial is over is inappropriate.”
And the one juror's unusually public role is cause for concern, Diamond said, that judges might again be inclined to sequester juries more frequently. The Tyco jurors were not sequstered during the trial, which had its opening statements Oct. 7.
After nearly six months, the mistrial is hardly a boon to Kozlowski and Swartz, who almost certainly will face a lengthy retrial. And the willingness of most jurors to convict may be a signal as to the problems their lawyers face in trying to defend the two men
“The bad news for them is most of those jurors were prepared to go with the prosecution and that doesn’t say much for what happens next time around,” said Gansevoort, who added he was surprised the defense hadn’t negotiated a plea agreement given the jury’s signal of a likely guilty verdict. The New York district attorney's office, which brought the Tyco charges, may explore that option before they return to court next month.
Not just Tyco
The past week has been something of a dud for prosecutors of corporate crime. Prior to the Tyco mistrial, defense lawyers for lifestyle maven Martha Stewart requested a new trial after they discovered one of the jurors on the panel that convicted her last month hadn’t disclosed a prior arrest during jury selection.
The juror, Chappell Hartridge, had been arraigned on a 1997 assault charge that was later dropped, which prompted Stewart’s defense team to try and cast a pall on her recent conviction for lying to the government about her stock trades in biotech firm ImClone.
And the Tyco outcome marks the second major white-collar trial in recent months to end without a verdict. Last October, the prosecution of Wall Street banker Frank Quattrone -- not a simple case, but one far less intricate than Tyco -- resulted in a hung jury.
That could result in prosecutors using more low-profile tactics: fewer perp walks and more time choosing jurors. The Tyco example especially, Bainbridge noted, should resonate as a cautionary tale about the process: "I bet you that when the folks at Enron finally go to trial, the jury selection is going to take an awfully long time."
On the other hand, legal experts believe Stewart’s latest effort is unlikely to succeed, and with Tyco prosecutors already planning a retrial, Friday's events simply lengthen the timeline for justice, rather than being a reprieve for the two former executives.
Nor does it necessarily carry any messages for other executives who might be inclined to bend the rules.
“If the government has a good case I’m sure they’ll go forward,” said Stephen Loeb, who teaches ethics at the University of Maryland’s business school and has his students visit federal prison to speak to convicted white-collar criminals. “I don’t think any one decision in any one case is going to inhibit that.”