In 1986, Guy W. Olano, Jr., and Raymond M. Gray were indicted in the Western District of Washington on multiple federal charges for their participation in a loan kickback scheme while serving on the board of a savings and loan association. Their joint jury trial with five codefendants commenced in March 1987. All parties agreed that fourteen jurors would be selected, with the two alternates identified before deliberations began.
On May 26, 1987, shortly before the end of the three-month trial, the district court suggested allowing the two alternate jurors to attend deliberations without participating. The court raised the matter again the next day in an exchange with Gray's counsel. On May 28, the final day of trial, counsel for defendant Davy Hilling gave an affirmative response that all fourteen could deliberate, with instructions that the alternates not participate; Olano's and Gray's counsel were present and did not object.
The district court instructed the jurors that the alternates would attend deliberations but must not participate. One alternate was excused during deliberations at his own request, while the other remained until the jury returned its verdict. Both Olano and Gray were convicted.
Olano and Gray appealed to the United States Court of Appeals for the Ninth Circuit. The Ninth Circuit reversed certain counts for insufficient evidence and then considered the presence of alternate jurors during deliberations under Federal Rule of Criminal Procedure 24(c). Because no objection had been made at trial, the court applied a plain error standard, held that the violation was inherently prejudicial, and reversed the remaining convictions.
The Supreme Court granted certiorari to clarify the standard for plain error review by the courts of appeals under Rule 52(b).