In early July, New York State Court Judge James Yates vacated the criminal antitrust convictions he had imposed in 2008 against two former Marsh executives (William Gilman and Edward McNenney) for violating the Donnelly Act (the New York antitrust law). In vacating the convictions, Judge Yates’s ruling brings to a close all of the criminal prosecutions arising from the New York Attorney General’s “contingent commission” bid-rigging investigation which, when launched over six years ago, rocked the industry.
As Alert readers will recall, the convictions followed a ten month trial, after which Judge Yates exonerated the executives on 36 out of 37 charges, but convicted them of violating the Donnelly Act – a felony conviction subjecting them to the possibility of years in prison. Later that year, several other Marsh executives were tried on similar charges, also before Judge Yates. These trials resulted in full acquittals for the defendants. After those acquittals, the New York Attorney General’s office announced that it did not intend to go forward with criminal trials of any of the remaining defendants. Thus, the criminal aspect of the investigation was concluded, except for the cases against Gilman and McNenney, who had appealed their convictions to the New York Appellate Division. As it turned out, however, that appeal will never be heard.
Instead, on July 2, Judge Yates issued a ruling on a long-pending motion by Gilman and McNenney, filed shortly after the second trial had resulted in the acquittal of the other Marsh defendants. In that motion, they argued that documents used by the defendants in the second trial, produced to them by the State, had been wrongfully withheld from them before their trial, and that the failure to turn over the documents had impeded their defense.
In a lengthy opinion, Judge Yates analyzed the implications of the State’s conduct. While accepting that the State’s failure to turn over the documents before the first trial was likely inadvertent, Judge Yates noted that “there was a significant overlap of witnesses presented and documents introduced at the two trials,” and that while the “first trial resulted in felony convictions,” the “second trial resulted in an acquittal as to all charges.” Thus, after concluding that “[The documents] would have been invaluable to the defense effort to challenge the circumstantial inference of a horizontal agreement and to question testimony to the contrary,” Judge Yates held that “the suppressed evidence . . . undermines the Court’s confidence in the verdict.” With that he ordered that the convictions be vacated, bringing the criminal phase of the contingent commission investigation to a close.