36 Pages Posted: 9 Aug 2005
In December of 2001 - the month in which Enron filed the largest bankruptcy in United States history - Martha Stewart sold four thousand shares of ImClone stock. The sale occurred just before the FDA rejected ImClone's application to approve Erbitux, a promising new cancer drug. One might reasonably have assumed that as a media event, Enron's bankruptcy would eclipse Stewart's sale of her stock. But history tells us otherwise. Stewart's odyssey from icon to ex-con and back has not gone quietly into the night.
This article examines the legal woes that sprang from Stewart's decision to sell. But instead of dwelling on the trial that led to her conviction for lying about the sale, the article focuses on a series of unexpected post-trial twists and turns that kept her case in the spotlight and provided new grounds for appeal.
The article begins with issues that swirled around an outspoken juror named Chappel Hartridge. His post-trial interviews with the press and his answers during voir dire prompted defense allegations of juror misconduct. The controversy about whether he was biased or might have lied to get on the jury provides a case study that illustrates why the standard for granting a new trial based on claimed juror misconduct is, and should be, rigorous.
The article then moves to allegations of government misconduct based on claims that the prosecution's expert witness lied on the stand. These allegations quickly led to the indictment and trial of the witness and to claims of prosecutorial misconduct. Stewart's lawyers charged that the prosecutors knew or should have known the witness committed perjury and that the perjured testimony tainted the jury's verdict. A close analysis of this claim, including three appendices correlating the jury's findings with specific counts in the indictment, make it abundantly clear that the allegedly false testimony did not affect the outcome of the trial.
Stewart's claim of prosecutorial misconduct also provides a case study that illustrates the difficulty of overturning a jury verdict based on allegations of witness perjury and explores why evidence that a government witness lied under oath does not automatically entitle the defendant to a new trial.
And last, the article examines the much-discussed issue of whether Stewart's sentence was appropriate. Was imprisonment warranted in her case? Or would some alternative form of punishment have better served the ends of justice? The article examines where her case fell on the spectrum of Federal Sentencing Guidelines and whether a downward departure would have been justified on the ground that, because Martha Stewart Living Omnimedia was so dependent on Stewart's leadership and creative role, her prolonged absence from the firm would result in undue hardship. As the article explains, the downward departure request was ill-conceived and doomed to fail from the start.
Keywords: Martha Stewart, Peter Bacanovic, juror misconduct, prosecutorial misconduct, perjury, expert witness, Sentencing Guidelines, downward departure, ImClone, jury selection, voir dire, motion for new trial, bias, obstruction of justice, false statements, Brady claims, undue hardship, community service
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