Jenner & Block

Firm Wins New Trial For Client in Tax-Shelter Scheme Case

Jenner & Block Partners Chris C. Gair and Charles B. Sklarsky and Associate Nicole A. Allen recently achieved a significant victory when U.S. District Judge William Pauley ordered a new trial for the Firm’s client Paul Daugerdas, a former Jenkens & Gilchrist law firm partner who had been convicted of charges related to an illegal tax-shelter scheme, after a 10-week trial and almost two weeks of jury deliberations in 2011.

Judge Pauley ruled that one of the jurors, who had lied about her background during jury selection, had shown bias against Mr. Daugerdas.  While claiming to be a stay-at-home wife with a bachelor’s degree in English literature, the juror was actually a suspended lawyer with a history of alcoholism, mental illness and petty crimes.

In reaching his decision, the judge agreed with the contentions of the Firm’s team that, if the court or the defendants had any inkling of the juror’s background, she would have been excused from service for cause and that her presence on the panel deprived Mr. Daugerdas of a fair trial.

He called the juror "a pathological liar who does not know the difference between truth and lie" and urged the government to prosecute her for perjury, saying it had "a strong incentive to punish such conduct and deter others."

He said she made "deliberate and intentional lies," eventually confessing that she wanted to make herself more "marketable" as a juror.

"Such a stratagem undermines the integrity of the jury system, the fair administration of justice, and is an affront to this court," the judge wrote. "The human toll her deliberate lies inflicted on the parties, their counsel, the witnesses and the jurors, who faithfully served, is inestimable. ... Numerous witnesses face the prospect of having their lives interrupted again to testify at any retrial. And the fates of the cooperating witnesses continue in suspense."

While acknowledging that the order constituted “extraordinary relief,” the court stated that it was warranted by the “exceptional circumstances…presented by this case.”  The ruling received widespread media attention, including an Associated Press story carried in numerous media outlets, as well as articles in the ABA Journal, Bloomberg Businessweek, Law360, New York Law Journal, Reuters and The Wall Street Journal, among others.