Lay's July death made it harder for people who lost money in the Enron collapse to seek repayment because the law required his May 25 conviction on 10 counts of conspiracy, securities fraud and related charges to be vacated when he died.
The 2001 Enron collapse in an accounting scandal that also brought down its audit firm, Arthur Andersen LLP, wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans.
Former Enron shareholder Russell Butler had sought to have Lay's conviction reinstated and sought financial restitution for his $8,000 Enron investment under the 2004 Crime Victims' Rights Act, The Wall Street Journal reported.
Lay's estate said in a court filing the Crime Victims' Rights Act did not change the law on how a criminal conviction should be handled when someone dies before appeals are exhausted.
A federal trial judge agreed with Lay's estate and the 5th U.S. Circuit Court of Appeals in New Orleans upheld the lower court's decision.