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U.S. fights to bar Nacchio witness

By Jeff Smith, Rocky Mountain News (Contact)

Published August 30, 2008 at 12:05 a.m.

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Former Qwest CEO Joe Nacchio's attorneys had "ample opportunity" to establish the reliability of an expert witness but failed to do so, federal prosecutors argued Friday.

The filing was made in advance of oral arguments Sept. 25 in front of the full 10th Circuit Court of Appeals.

The full appellate court has agreed to consider whether Nacchio's insider-trading conviction last year should stand. Nacchio, who was sentenced to six years in prison and ordered to forfeit $52 million of stock proceeds, is free on $2 million bail pending appeal.

Nacchio's defense team was expected to file a brief later this weekend. It has previously maintained that the expert witness' testimony went to the heart of its case and was improperly excluded.

In March, a three-judge appellate panel agreed, ruling 2-1 that U.S. District Judge Edward Nottingham erred when he didn't let defense expert witness Daniel Fischel testify. The panel ordered a new trial.

Fischel was expected to have testified in part that the information Nacchio withheld from investors wasn't "material."

The full appellate court has requested that both sides address whether the defense had sufficient notice or adequate opportunity to present Fischel's methodology or request a hearing.

The court also has asked whether it was the defense's burden to request a hearing, and whether Nottingham abused his discretion in preventing Fischel from testifying. The court has even asked whether a new trial would be the best remedy, or whether an evidentiary hearing could be held on Fischel.

Government prosecutors argued the defense did bear the burden of requesting a hearing, and that Nottingham had made it clear throughout the proceedings that parties should inform him ahead of time if there were matters to be taken up outside the jury's presence.

Prosecutors argue that should the court find that Nottingham abused his discretion, then the matter should be sent back to the District Court for a hearing to determine whether the testimony should be admissable.

Experts have called that an unlikely and messy scenario.