A few months ago, we wrote a column about United States v. Newman, a case the Supreme Court decided not to take. This month, it’s back.

A quick recap: In Newman, a federal court of appeals, the Second Circuit, held that two hedge fund managers shouldn’t have been convicted. That decision was based in part on a novel legal theory about what the government needs to establish to convict someone of insider trading. The United States Solicitor General tried to get the Supreme Court to reverse the decision, but the Court declined the request. Our column speculated that even though the case presented an interesting and important legal question, the case wasn’t a good vehicle to resolve those questions because no matter the answers, the defendants were going to get off anyway.

Just a couple weeks after our column, another petition went up to the Supreme Court on exactly the same question. In that case, Salman v. United States, another federal court of appeals, the Ninth Circuit, did the opposite of the Second Circuit: It affirmed a defendant’s conviction for insider trading and rejected the Second Circuit’s legal theory. (The Ninth Circuit, unlike the Second Circuit, didn’t require the government to prove that the insider had provided information for financial gain.)

Mr. Salman, the defendant in the Ninth Circuit case, sought review in the Supreme Court, and consider the very first argument he raised: “This case presents the ideal vehicle for resolving the important question on which the Solicitor General sought review in Newman. Here, unlike in Newman, resolution of the question is indisputably outcome-determinative.”

Sure enough, last week, the Supreme Court granted review. Soon, we’ll find out just what the government has to establish to prove insider trading.

But that raises an interesting question: What happens to the defendants who were convicted or acquitted under the wrong version of the law? Remember, in California, a defendant was convicted on one view of the law, but in New York, two defendants were acquitted on a different view of the law.

First, let’s imagine the Supreme Court decides the Second Circuit was wrong. What happens to the New York hedge fund managers, who the Second Circuit set free on a legal theory inconsistent with the Ninth Circuit’s? If the Second Circuit was wrong, shouldn’t they have to go to jail?

Nope. And that’s because of the Fifth Amendment’s Double Jeopardy Clause. Simply put, if the government charges you with a crime and you’re acquitted, you’re home free. You can’t be charged again, even if the prosecution later comes up with some conclusive evidence or legal theory. The idea here is that we don’t want the government to keep trying you for the same crime over and over again — eventually they might find a favorable jury, and even if they don’t, they’re subjecting you to embarrassment, expense and anxiety the whole time.

The same logic applies to appeals. In Newman, the Second Circuit held that the evidence against the defendants was insufficient to support their conviction. There are some subtleties here, but a decision like that amounts to an acquittal, and the Newman defendants can rest easy.

Now let’s turn to the other possibility: What if the Supreme Court decides the Ninth Circuit was wrong? In that case, Mr. Salman is going to get a new trial, where the jury will be instructed to follow the Second Circuit’s more defendant-friendly standard.

But what about other Ninth Circuit defendants who, like Mr. Salman, were convicted under a harsher standard, but who, unlike Mr. Salman, have already used up their chances to appeal their convictions?

Even convicted insider traders currently sitting in jail — whose cases have long since passed through the appeals process — still have one last shot: habeas corpus review. As viewers of “Making a Murderer” know, a wrongfully convicted defendant can win a new trial, or even an acquittal, on habeas review. But even with new, persuasive evidence of innocence, it’s a very tall order.

In our hypothetical case, the Ninth Circuit defendants wouldn’t even have new, persuasive evidence of their innocence. Instead, all they would have is a Supreme Court decision that says the court that convicted them got the law wrong. Is that enough? Maybe.

The defendants have to argue that the new legal rule meant that they never could have been punished in the first place, not just that the trial contained a procedural error. At least under existing precedent, a Supreme Court ruling that you were convicted due to an improper reading of a statute would probably entitle you to a new trial.

Evasive enough for you? Well, these are rules made by lawyers, and this “retroactivity” doctrine is especially complicated. In fact, just the other day the Court issued a contentious decision trying to iron out some of the wrinkles. But one thing’s for certain: That new opinion won’t be the last word on this ever-changing, ever-challenging area of law.

 

Brittany Jones is the president of the Stanford Law Review. Alex Twinem is one of the Stanford Law Review’s managing editors. Michael Qian is one of the Stanford Law Review’s executive editors. Danny Kane is one of the Stanford Law Review’s senior editors. Contact them at bjones2 ‘at’ stanford.edu, atwinem ‘at’ stanford.edu, mfqian ‘at’ stanford.edu and dkane ‘at’ stanford.edu.