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November 10, 2017
  Mahoney v. City of Seattle
Headline: The City of Seattle's "Use of Force Policy" does not violate the Seattle Police Department's police officers' Second Amendment right to use department-issued firearms for the "core lawful purpose of self-defense."

Areas of Law: Constitutional Law; Civil Rights

Issues Presented: Whether the Seattle Police Department's police officers' Second Amendment right to use department-issued firearms for the "core lawful purpose of self-defense" is violated by the City of Seattle's "Use of Force Policy."

Brief Summary: The Ninth Circuit panel affirmed the district court's holding that the City of Seattle's "Use of Force Policy" does not violate the Seattle Police Department's police officers' Second Amendment Right to use department-issued firearms for the "core lawful purpose self-defense." Approximately one hundred and twenty-five police officers from Seattle's Police Department filed suit against the City of Seattle alleging their Second Amendment right was violated by the City of Seattle's "Use of Force Policy." The Ninth Circuit panel applied a two-step inquiry and found the "Use of Force Policy" did not impose a substantial burden on the Second Amendment right to use a firearm for the core lawful purpose of self-defense. Because the "Use of Force Policy" did not impose a substantial burden, the panel applied the intermediate scrutiny test and concluded that the City of Seattle has a substantial interest in ensuring the safety of the public and its police officers. The "Use of Force Policy" permits the de-escalation of unnecessary force and prevents police officers from engaging in practices which would violate constitutional rights of citizens. Further, there is a reasonable fit between the City of Seattle's interest and ensuring the safety of the public and police officers. Therefore, the "Use of Force Policy" is constitutional.

Significance: Seattle Police Department's police officers' Second Amendment right to use department-issued firearms for the "core lawful purpose of self defense" is not violated by the City of Seattle's "Use of Force Policy." The scope of the Second Amendment right to be ar arms has been a controversial issue. This case sheds light on the constitutional right of police officers to assert their Second Amendment right to use firearms in self-defense and the interest of their employer in placing restrictions on that right.

Extended Summary: In 2012, the United States filed a civil suit against the City of Seattle alleging that Seattle Police Department's police officers were "engaged in a pattern or practice of excessive force." The parties settled, agreeing to a "Use of Force Policy" ("the Policy") which was approved by United States District Judge James L. Robart on December 17, 2013. The Policy recites, in part, "[o]fficers shall only use objectively reasonable force, proportional to the threat or urgency of the situations, when necessary, to achieve a law-enforcement objective." The Policy provides a set of factors that officers must consider in deciding whether a proposed use of force is objectively reasonable, but also provides that officers must consider those factors only "[w]hen safe under the totality of circumstances and time and circumstances permit." Further, the Policy requires officers to reduce the need for force only "[w]hen safe and feasible under the totality of the circumstances."

Approximately one hundred and twenty-five (125) police officers from the Seattle Police Department filed suit against the City of Seattle, including the Seattle Police Department (SPD) and other entities, pursuant to 42 U.S.C. § 1983, alleging that the Policy was unconstitutional. The police officers brought additional claims under the Second, Fourth, Fifth, and Fourteen Amendments, alleging that the Policy "unreasonably restricts their right to use department-issued firearms for self-defense." The City of Seattle filed a motion to dismiss which was granted by the district court that concluded that the Policy did not infringe upon the police officers' Second Amendment rights. The officers appealed this decision to the Ninth Circuit that applied the de novo standard of review.

In District of Columbia v. Heller, the Supreme Court recognized "that the inherent right of self-defense has been central to the Second Amendment right." 554 U.S. 570, 628 (2008). Post Heller, the Court adopted the following two-step inquiry "to determine whether a challenged law or regulation violates the Second Amendment": (1) whether "the challenged law [or regulation] burdens conduct protected by the Second Amendment?" and (2) if so, what appropriate level of scrutiny applies? United States v. Chovan, 735 F.3d 1127, 1136 (9th Cir. 2013).

Applying the first step of the inquiry, the panel considered whether the Policy was "one of the 'presumptively lawful regulatory measures' identified in Heller, or [if] the record include[d] persuasive historical evidence establishing that the regulation at issue impose[d] prohibitions that fall outside the historical scope of the Second Amendment." Jackson v. City & Cty. of San Francisco, 746 F.3d 953, 960 (9th Cir. 2014) (quoting Heller, 554 U.S. at 627 n.26)." Here, the panel concluded that the Policy - an employer policy that regulates the use of firearms issued by the SPD to its police officers while on duty - did not resemble any of the "presumptively lawful regulations" identified in Heller. Further, the panel concluded that there was no historical evidence to suggest that regulating police officers' use of department-issued firearms falls outside the historical scope of the Second Amendment. The panel therefore "'assume[d], without deciding, that the [UF Policy] burdens conduct falling within the scope of the Second Amendment.'" (citing Bauer v. Becerra, 858 F.3d 1216, 1221 (9th Cir. 2017).)

Having determined that the Policy is subject to Second Amendment protection, the panel proceeded to the second step to determine the appropriate level of scrutiny by considering "(1) how close the challenged law comes to the core of the Second Amendment right, and (2) the severity of the law's burden on that right." Silvester v. Harris, 843 F.3d 816, 821 (9th Cir. 2016) A regulation "that implicates the core of the Second Amendment right and severely burdens that right warrants strict scrutiny." In contrast, a regulation which "does not implicate a core second Amendment right, or does not place a substantial burden on the Second Amendment right" warrants intermediate scrutiny. In Heller, the Court held that citizens have a right under the Second Amendment to use firearms "for the core lawful purpose of self-defense." However, the Court has also held that, when analyzing the Second Amendment in regard to a governmental employee, courts must "balance the rights of the employee 'against the realities of the employment context.'" Engquist v. Or. Dep't of Agr., 553 U.S. 591, 600 (2008).

Here, in considering how close the Policy comes to the core of the Second Amendment right, the Ninth Circuit panel found that the Policy was adopted by the City of Seattle, acting as employer, to regulate use by its employees of department-issued firearms while on duty. Therefore, the City of Seattle has a significant interest in the Policy, and thus intermediate scrutiny applies placing the burden on the city of Seattle "to justify placing restrictions on any Second Amendment right of its employees, while also giving the city the flexibility to act as an employer." The panel then considered the severity of the Policy's burden on the Second Amendment core right of self-defense in determining the appropriate level of scrutiny. The burden must not be so severe that it destroys the right of police officers to use department-issued firearms for the "core lawful purpose of self-defense." Heller, 554 U.S. at 630. The panel reasoned the Policy did not rise to a level of severity that destroyed the Second Amendment as it permitted police officers to "draw or exhibit a firearm in the line of duty when the officer has reasonable cause to believe it may be necessary for his or her own safety or for the safety of others[.]" The Policy also states, in part: "[d]eadly force may only be used in circumstances where threat of death or serious physical injury to the officer or others imminent . . . sometimes the use-of-force is unavoidable." The panel thus concluded that the Policy did not destroy the officers' rights under the Second Amendment because they were permitted to use their department-issued firearms for the "core lawful purpose of self defense."

The panel then turned to the application of the intermediate scrutiny test which requires "(1) the government's stated objective to be significant, substantial, or important; and (2) a reasonable fit between the challenged regulation and asserted objective." Fyock v. Sunnyvale, 779 F.3d 991, 1000 (9th Cir. 2015) (quoting Chovan, 735 F.3d at 1139).

Here, the panel found that the City of Seattle's interest was both significant and substantial because the purpose of the Policy was to ensure the safety of the public and its police officers, citing United States v. Salerno, 481 U.S. 739, 748 (1987) ("[T]he Government's regulatory interest in community safety can, in appropriate circumstances, outweigh an individual's liberty interest."). Further, the Policy ensures that police officers do not engage in unlawful practices that violate citizens' constitutional rights, thus ensuring public safety.

Secondly, in determining in the degree of fit between the Policy and its objective, the City was not required to show that the Policy was the least restrictive means of achieving its interest. To survive intermediate scrutiny, the Policy need only "promote[s] a substantial government interest that would be achieved less effectively absent the regulation." In ruling that there is a reasonable fit between the Policy and the significant government interest in ensuring the safety of the public and the City's police officers, the panel noted that the Policy "expressly contemplates that de-escalation techniques will not be feasible in every situation, and even states that 'sometimes, the use of force is unavoidable.'" Holding that the Policy survives intermediate scrutiny and is, therefore, constitutional, the Ninth Circuit panel affirmed the district court's decision, concluding the Policy did not violate Appellants Second Amendment right to use department-issued firearms for the "core lawful purpose of self-defense." (Appellants claims under the Fourth, Fifth, and Fourteenth amendments were dismissed for failure to state a cognizable claim.)

To read the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...17/09/19/14-35970.pdf

Panel: Carlos T. Bea and N. Randy Smith, Circuit Judges, and William Q. Hayes, District Judge.

Argument Date: May 8, 2017

Date of Issued Opinion: September 19, 2017

Docket Number: 14-35970

Decided: Affirms the district court's ruling that the City of Seattle's "Use of Force Policy" does not violate the Seattle Police Department's police officers Second Amendment right to use department-issued firearms for the "core lawful purpose of self-defense."

Case Alert Author: Georgia Kefallinos

Counsel:

Athan E. Tramountanas (argued), Short Cressman & Burgess PLLC, Seattle, Washington; Lisa Ann Battalia, Law Office of Lisa Ann Battalia, Bethesda, Maryland; for Plaintiffs- Appellants.
Gregory Colin Narver (argued), Assistant City Attorney; Peter S. Holmes, City Attorney; City Attorney's Office, Seattle, Washington; for Defendants-Appellees.
Author of Opinion: District Judge William Q. Hayes

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 11/10/2017 05:18 PM     9th Circuit     Comments (0)  

  American Beverage Ass'n v. City & County of San Francisco
Headline: The Ninth Circuit panel found the City and County of San Francisco's ordinance that required warnings about the health effects from consuming certain sugar-sweetened beverages on specific types of fixed advertising within San Francisco was an unduly burdensome disclosure requirement that might offend the First Amendment by chilling protected commercial speech

Areas of Law: Constitutional Law

Issues Presented: Whether the ordinance enacted by the City and County of San Francisco requiring warnings about the adverse health effects of certain sugar-sweetened beverages on specific types of fixed advertising unduly burdened and chilled protected commercial speech under the First Amendment.

Brief Summary: Plaintiffs - the American Beverage Association, the California Retailers Association, and the California State Outdoor Advertising Association - filed suit against the City and County of San Francisco seeking injunctive relief to prevent implementation of a city ordinance requiring advertisers of certain sugar-sweetened beverages to post the following health effect warning on their advertisements: "WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco." The district court denied the Associations' motion for a preliminary injunction. Concluding that the Associations would not prevail on the merits of their First Amendment challenge the district court held that the warning was not misleading, would not place an undue burden on the Associations' commercial speech, and was rationally related to a government interest.

The Ninth Circuit panel reversed and remanded the district court's denial of the Associations' motion for preliminary injunction holding that the Associations would likely prevail on the merits of their First Amendment's claim. Applying the following analytical framework applicable to commercial speech announced by the Supreme Court in Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626, 651 (1985) - "a commercial speaker's constitutionally protected interest in refraining from providing consumers with additional information is minimal if a required disclosure is 'purely factual and uncontroversial' and is not 'unjustified or unduly burdensome' so as to chill protected speech" - the panel found that the warning's message was controversial and not purely factual when the warning asserted that consuming certain sugar-sweetened beverages would contribute to obesity, diabetes, and tooth decay. The panel determined that this assertion is misleading since it is contrary to statements by the FDA that added sugars are "generally recognized as safe," and "can be a part of a healthy dietary pattern when not consumed in excess amounts." The panel also found that the ordinance placed undue burden on the Associations' commercial speech because the warning would overwhelm other visual elements of their advertisements and leave no room to convey their messages. Although the panel agreed that San Francisco has a substantial government interest in promoting the health of its citizens, it concluded that the Associations would likely prevail on the merits of their First Amendment challenge because the ordinance was not purely factual and was unduly burdensome. Additionally, the panel found that other factors of the preliminary injunction test weighed in the Associations' favor. Accordingly, the panel reversed and remanded the district court's judgment.

Significance: Applying Zauderer's analytical framework applicable to commercial speech, the Ninth Circuit panel concluded that "San Francisco has not carried its burden 'of demonstrating the legitimacy of its commercial-speech regulations,' because of substantial evidence in the record that the regulation is misleading and would chill the Associations' protected commercial speech.".

Extended Summary: In June 2015, the City and County of San Francisco ("San Francisco") enacted an ordinance requiring the advertisers of certain sugar-sweetened beverages to place a warning about the adverse health effects in their beverage advertisements. The mandatory warning included the following message, "WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco." Failure to include such warning would result in penalties imposed by the San Francisco's Director of Health.

According to San Francisco, the ordinance was intended to raise consumer awareness about the existence of added sugars in said beverages, and thus promoted public health and preserved economic resources.

In July 2015, prior to the ordinance's effective date, the American Beverage Association, California Retailers Association, and the California State Outdoor Advertising Association ("the Associations") filed suit seeking a preliminary injunction against implementation of the ordinance alleging that the ordinance would place an undue burden that would have a chilling effect on the Associations' protected commercial speech under the First Amendment.

In May 2016, the district court denied the motion on grounds that the Associations would not likely prevail on the merits of their First Amendment claim because the mandatory warning was not misleading, would not place an undue burden on their commercial speech, and was rationally related to a government interest.

On appeal, the Ninth Circuit panel addressed the issue whether the ordinance mandating disclosure was purely factual and uncontroversial, and whether it constituted an undue burden on commercial speech and thus violated the Associations' First Amendment rights.

The panel applied Zauderer's analytical framework in reviewing the Associations' First Amendment challenge. Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626 (1985). Although Zauderer involved a government regulation intended to protect consumers from deceptive commercial advertisements, the panel joined other circuits in holding that Zauderer also applied to government regulation intended to promote public health. Applying Zauderer, the panel asserted that a disclosure requirement that is "purely factual and uncontroversial" and is not "unduly burdensome" would survive First Amendment scrutiny so long as it is "reasonably related to a substantial government interest."

First, the panel examined the character of the alleged ordinance and noted that a disclosure requirement is not "purely factual" when it is "literally true but nonetheless misleading and, in that sense, untrue." CTIA-The Wireless Ass'n v. City of Berkeley, 854 F.3d 1105, 1118 (9th Cir. 2017). The panel concluded that the ordinance's factual accuracy was questionable because the warning statement asserted that sugar-sweetened beverages contribute to obesity, diabetes, and tooth decay regardless of the quantity consumed and other lifestyle choices. In addition, the panel found that the statement was contrary to FDA guidelines, which provided that added sugars are "generally recognized as safe" and "can be part of a healthy dietary pattern when not consumed in excess amounts." While San Francisco's experts provided that there is a "clear scientific consensus" showing a direct link between excessive consumption of added sugar beverages and obesity and diabetes, the experts failed to negate the Associations' expert's assertion that consuming sugar-added beverages does not increase the risk of obesity or diabetes so long as the consumer maintains a healthy balance between their caloric intake and energy output. The panel also found that the warning was "misleading" for singling out sugar-sweetened beverages as less healthy than other sources of added sugars and calories, which was contrary to other FDA and the American dental Association's current research.

Next, in determining whether the ordinance placed undue burden on the Associations' commercial speech, the panel noted that "[a] required disclosure may be unduly burdensome if it 'effectively rules out' advertising in particular media." Ibanez v. Fla. Dep't of Bus. & Prof'l Regulation, 512 U.S. 136, 146 (1994). The panel concluded that the ordinance constituted an undue burden that chilled the Associations' protected commercial speech because the black box warning overwhelmed other visual elements in the advertisements and left no room for advertisers to convey their message. The panel concluded that the ordinance's burden would have a chilling effect on protected speech causing major manufacturers of said beverages to remove their advertising from covered media if the ordinance went into effect.

While agreeing that San Francisco had a legitimate government interest in promoting the health of its citizens, the panel concluded that San Francisco had not met its burden to prove the "legitimacy of its commercial-speech regulations" and, therefore, that the Associations met their burden to show that they would likely succeed on the merits of their First Amendment challenge.

The panel also found that the remaining factors of the preliminary injunction test weighed in favor of the Associations because they would likely suffer an irreparable harm if the ordinance became effective, the balance of hardship also tipped in their favor, and protecting a party's First Amendment rights has always been in the public interest.

Concluding that the district court abused its discretion in denying the Associations' motion for preliminary injunction against the ordinance the panel reversed and remanded the case for further proceeding.

To read the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...17/09/19/16-16072.pdf

Panel: Dorothy W. Nelson, Sandra S. Ikuta, and J. Michael Seabright, Circuit Judges.

Argument Date: April 17, 2017

Date of Issued Opinion: September 19, 2017

Docket Number: 3:15-cv-03415-EMC

Decided: Reversed and remanded the district court's denial of Associations' motion for preliminary injunction to enjoin the City and County of San Francisco from imposing ordinance requiring advertisers of certain types of sugar-sweetened beverages to include the health effect warnings on their advertisements within San Francisco.

Case Alert Author: Phuong Luong

Counsel:
Richard P. Bress (argued), Melissa Arbus Sherry, and Michael E. Bern, Latham &Watkins LLP, Washington, D.C.; James K. Lynch and Marcy C. Priedeman, Latham & Watkins LLP, San Francisco, California; for Plaintiff-Appellant American Beverage Association.

Thomas S. Knox, Knox Lemmon & Anappolsky LLP, Sacramento, California; for Plaintiff-Appellant California Retailers Association

Theodore B. Olson, Andrew S. Tulumello, and Helgi C. Walker, Gibson Dunn & Crutcher LLP, Washington, D.C.; Charles J. Stevens and Joshua D. Dick, Gibson Dunn & Crutcher LLP, San Francisco, California; for Plaintiff-Appellant California State Outdoor Advertising Association.

Christine Van Aken (argued), Jeremy M. Goldman, and Wayne Snodgrass, Deputy City Attorneys; Dennis J. Herrera, City Attorney; Office of the City Attorney, San Francisco, California; for Defendant-Appellee.

Author of Opinion: Judge Sandra S. Ikuta

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 11/10/2017 05:14 PM     9th Circuit     Comments (0)  

  Lambert v. Nutraceutical Corp.
Headline: The Ninth Circuit panel held that Federal Rule 23(f)'s fourteen-day deadline for filing a petition for interlocutory appeal of an order decertifying a class is procedural and, therefore, subject to equitable exceptions such as tolling. Parting ways with other circuits, the panel also held that, because plaintiff informed the court orally of his intention to seek reconsideration of the decertification order within fourteen days of the decertification order, and because the district court set the deadline for filing a motion for reconsideration after the expiration of the deadline, with which Lambert complied, the Rule 23(f) deadline was tolled. .
Areas of Law: Civil Procedure

Issues Presented: Whether the fourteen-day time limit, provided in Federal Rule of Civil Procedure 23(f) for appealing an order decertifying a class action was tolled at the time plaintiff informed the court, within the fourteen-day period, of his intention to file a motion for reconsideration of the order, even though the motion was filed, at the court's instruction, after the expiration of the deadline.

Brief Summary: Plaintiff brought a consumer class action against defendant, alleging that defendant's product made egregious false representations causing injury. After the district court granted defendant's motion to decertify the class, plaintiff, within the fourteen days of the decertification order, informed the court of his intention to file a motion to reconsider the order. As directed by the court, ten days later, and twenty days after the expiration of the fourteen-day deadline, plaintiff moved for reconsideration which the court denied three months later. Fourteen days later, plaintiff filed a petition for permission to appeal the district court's order.

Rule 23(f) provides that a petition for permission to appeal an order granting or decertifying a class must be filed within fourteen days of said order. The panel held this Rule 23(f) is a procedural and thus may be subject to equitable exceptions, like tolling, under certain circumstances. Although circuits that have considered this issue agree that this deadline may be tolled when the plaintiff files the motion for reconsideration within the fourteen-day period, the Ninth Circuit panel parted ways with other circuits in holding that the deadline is also tolled when the plaintiff orally informs the court, within the fourteen-day deadline, of his intention to move for reconsideration and, at the court's instruction, then files the motion after the expiration of the deadline. Addressing the meirts of the appeal, the panel also held that district court abused its discretion in decertifying the class.

Significance: Disagreeintg with the position of other circuits that limit the availability of equitable exceptions to the Rule 23(f) deadline by allowing tolling only when the motion for reconsideration is filed, the Ninth Circuit panel allowed tolling when the plaintiff, within the fourteen-day deadline, orally informed the court of his intention to move for reconsideration.

Extended Summary: Plaintiff, Troy Lambert, brought a consumer class action against defendant, Nutraceutical Corporation, for violations of California's Unfair Competition Law ("UCL"), False Advertising Law ("FAL"), and Consumer Legal Remedies Act ("CLR").

Nutraceutical manufactured and marketed "Cobra Sexual Energy," an alleged aphrodisiac supplement not approved by the Food and Drug Administration ("FDA"). Despite "Cobra Sexual Energy's" lack of FDA approval, defendant claimed its product contained performance-enhancing herbs that would provide users with "animal magnetism" and "potency wood." Based on these assertions plaintiff purchased the product. Had Lambert known the product lacked FDA approval, plaintiff contends he would not have purchased the product.

The district court granted class certification because Lambert's full refund damages model provided a reasonable theory that monetary relief could be ascertained on a classwide basis. Once discovery concluded, defendant moved to decertify the class which the district court granted explaining that, although Lambert's full refund damages model was consistent with the theories of liability alleged, his failure to provide "the key evidence necessary to apply his class wide model for damages" was fatal.

Ten days after the order decertifying the class, Lambert informed the district court of his intention to file a motion for reconsideration. The district court instructed Lambert to file the motion within ten days. As instructed by the court, Lambert moved for reconsideration ten days later. Three months later, the court the court denied Lambert's motion for reconsideration. Fourteen days after his motion for reconsideration was denied, Lambert filed a Rule 23(f) petition to appeal the court's decertification orders granting the motion for decertification and denying the motion for reconsideration.

Rule 23(f) requires that a petition for permission to appeal an order granting or denying class certification be filed within fourteen days after the order is entered. However, the rule is silent as to the effect a motion for reconsideration has on the fourteen-day deadline. Lambert's petition for permission to appeal the denial of his motion for reconsideration was filed approximately three months after the order for decertification was granted.

In order to determine whether Rule 23(f) deadline bars Lambert's petition for permission to appeal, the panel first had to determine whether Rule 23(f) is jurisdictional. To decide this issue, the panel was guided by two Supreme Court decisions: Eberhart v. United States, 546 U.S. 12 (2205) and Bowles v. Russell, 551 U.S. 205 (2007). In Eberhart, the Supreme Court held that a deadline in the Federal Rules of Criminal Procedure was not jurisdictional, because it was a procedural "claims-processing" rule. In Bowles, the Court held that deadlines in statutes are jurisdictional but non-statutory deadlines may instead be "claims-processing" rules. Applying Bowles and Eberhart the panel held that Rule 23(f) is not jurisdictional "because it is procedural, does not remove a court's authority over subject matters or persons, and is in the Federal Rules of Civil Procedure, rather than in a statute."

After determining that Rule 23(f) is not jurisdictional that panel had to decide what if any equitable considerations could be applied and whether plaintiff was entitled to any. The panel agreed with those circuits that have held that the deadline may be tolled when the plaintiff filed his motion for reconsideration within the fourteen-day deadline. However, the panel noted that these circuits would not toll the deadline in circumstances like Lambert's where the motion was filed twenty days after the running of the fourteen-day deadline.

To determine when equitable circumstances beyond a motion for reconsideration filed within the fourteen-day Rule 23(f) deadline can toll the deadline, the panel applied the following equitable factors: (1) whether the litigant pursued his rights diligently; (2) whether external circumstances affected the litigant's ability to comply with the fourteen-day deadline; and (3) other legal actions taken by litigant. Here, Lambert conveyed his intention to file a motion for reconsideration to the district court, complied with the imposed deadline set by the court, and thereafter was diligent in submitting his petitioning to the appellate court. The panel found no evidence of bad faith. Furthermore, there was justifiable reliance on the district court's instructions (ten days after the order for decertification was granted petitioner was told that he had ten more days to file his motion).

Turning to the merits of the appeal, the panel concluded that the district court had abused its discretion in decertifying the class on the basis of Lambert's inability to prove restitution damages through the proposed full refund model, citing Yokoyama v Midland Nat'l Life Ins. Co, 594 F.3d 1087, 1094 (9th Cir. 2010): "damage calculations alone cannot defeat certification.". The panel reconciled this holding in Yokoyama with the Supreme Court's holding in Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1433 (2013), that a Rule 23(b)(3) plaintiff must show that "damages are capable of measurement on a class wide basis," by noting that "Comcast stood only for the proposition that 'plaintiffs must be able to show that their damages stemmed from the defendant's actions that created the legal liability.'"

To read the full opinion, please visit: http://cdn.ca9.uscourts.gov/datastore/opinions/2017/09/15/15-56423.pdf

Panel: Richard A. Pae, Marsha S. Berzon, and Morgan Christen, Circuit Judges

Argument Date: March 9, 2017

Date of Issued Opinion: September 15, 2017

Docket Number: D.C. No. 2:13-cv-05942-AB-E

Decided: Reversed and remanded for further proceedings. The court found that plaintiff's petition for class certification, pursuant to Fed. R. Civ. P. 23(f), was timely made.

Case Alert Author: Luis F. Bustamante

Counsel
Gregory Weston (argued) and David Elliott, The Weston Firm, San Diego, California; Ronald A. Marron, The Law Offices of Ronald A. Marron APLC, San Diego, California; for Plaintiff-Appellant.

Steven N. Feldman (argued) and John C. Hueston, Hueston Hennigan LLP, Los Angeles, California; Jon F. Monroy, Monroy Averbuck & Gysler, West Lake Village, California; for Defendant-Appellee.
Author of Opinion: Richard A. Paez

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 11/10/2017 05:11 PM     9th Circuit     Comments (0)  

October 26, 2017
  Contest Promotions, LLC v. City and County of San Francisco
Headline: Ninth Circuit panel holds Article 6 of San Francisco's Planning Code distinguishing commercial and noncommercial signs and exempting noncommercial signs from regulation does not violate the First Amendment.

Areas of Law: Constitutional Law; First Amendment; Commercial Speech

Issue Presented: Whether Article 6 of San Francisco's Planning Code violates the First Amendment by distinguishing between commercial signs and noncommercial signs, and exempting noncommercial signs from the rule's scope?

Brief Summary: The Ninth Circuit panel affirmed the district court's dismissal of an action brought under 42 U.S.C. § 1983. Plaintiff-Appellant Contest Promotions, LLC, a business engaged in outdoor commercial advertising, challenged the constitutionality of Article 6 of San Francisco's Planning Code because it exempted noncommercial signs. The Ninth Circuit panel rejected Appellant's argument for a greater level of scrutiny than intermediate scrutiny. It then applied the four-step analysis announced by the United States Supreme Court in Central Hudson Gas & Electric Corp. v. Public Service Commission to hold Article 6 survived intermediate scrutiny.

Significance: The Ninth Circuit panel held Article 6 did not violate the First Amendment by distinguishing between commercial and noncommercial signs, and by exempting noncommercial signs from regulation.

Extended Summary: Plaintiff-Appellant, Contest Promotions, LLC, ("Appellant") is engaged in the business of renting advertising space from businesses in cities. The advertising is done by placing third-party advertising signs that prompt persons to enter the business and win a prize related to the sign. Defendant-Appellee City and County of San Francisco ("the City") controls outdoor advertising through Article 6 of San Francisco's Planning Code ("Article 6"). Article 6 regulates outdoor advertising for several reasons, including promoting aesthetic and environmental values, protecting public investment in and the character and dignity of public buildings, streets, and open spaces, protecting the distinctive appearance of the city, and reducing hazards to motorists, bicyclists, and pedestrians.

The Planning Code distinguishes between "general advertising signs" and "business signs." A general advertising sign directs attention to a business, commodity, industry or other activity which is sold, offered or conducted elsewhere than on the premises upon which the sign is located, while a business sign relates to similar activity conducted on the premises. It exempts noncommercial signs which are defined in Article 6 by a non-exhaustive list. These include governmental signs, official public notices, temporary display posters, and flags. No other definition is provided in the Planning Code regarding noncommercial signs.

There is no dispute that Appellant's signs are "commercial" pursuant to Article 6. Appellant sued the San Francisco, alleging that the Code section violates the First Amendment by exempting noncommercial signs from it regulatory ambit. The district court granted the City's motion to dismiss, and this appeal followed.

The Ninth Circuit panel first determined the level of scrutiny that applies to Article 6. While Appellant argued for a higher standard of scrutiny than intermediate scrutiny, citing Sorrell v. IMS Health Inc., 564 U.S. 442 (2011), the panel rejected Appellant's argument and held that Sorell did not mark a fundamental departure from the four-step test announced Central Hudson Gas & Electric v. Public Service Commission, 447 U.S. 557 (1980).

Next, the Ninth Circuit panel undertook an analysis of Article 6 in light of the Central Hudson four-step test. The first step is whether the speech concerns lawful activity and is not misleading. The court concluded Appellant's advertisements were lawful and not misleading. The second step is whether the asserted governmental interest is substantial. The panel found that the City's interests in safety and aesthetics are substantial.

If the first two parts of the standard yield positive answers, Central Hudson directs that a court make two additional inquiries. The third, step is whether the regulation directly advances the governmental interest asserted. The fourth step is to guard against over-regulation rather than under-regulation.

Appellant argued that Article 6 was unconstitutional because it failed the last two steps of the Central Hudson analysis. It argued Article 6 is more extensive than necessary to serve the City's interest because it exempts noncommercial signs for purposes which are too tenuous to Appellee's claimed interests in "safety and aesthetics." Appellant cited City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410 (1993) as authority. However, the Ninth Circuit panel distinguished Discovery Network from the case at bar. In Discovery Network, the challenged city ordinance completely prohibited the distribution of commercial handbills using newsracks in public places while there was no prohibition on distributing noncommercial handbills in the same way. The record showed the number of newsracks dispensing commercial handbills was "minute" compared with the total number. The Supreme Court held that the ordinance's distinction between commercial and noncommercial speech had no relationship whatsoever to the city's legitimate interest in safety and aesthetics.

In the instant case, the Ninth Circuit panel determined Article 6 is not constitutionally underinclusive. The text of Article 6 expresses that it is intended to address the problems of the increased size and number of general advertising signs that contributed to blight and clutter and the commercialization of public spaces. The panel found that the legislative purpose to regulate specific commercial signs has a substantial effect on its interest in safety and aesthetics.

The also Ninth Circuit panel rejected Appellant's claim that Article 6 inappropriately discriminated against commercial speech based on the ground that commercial speech deserves less protection that noncommercial speech. The court recognized that the purpose of Article 6 is to address the unique risks to the city's interests that commercial signs pose.

Lastly, the Ninth Circuit panel held a law need not fit perfectly and completely with an identified problem to survive intermediate scrutiny. It found that the distinctions drawn between commercial and noncommercial speech directly advance the city's substantial interests. Thus, the Ninth Circuit panel concluded Article 6 survived intermediate scrutiny and affirmed the district court's dismissal of Appellant's claims

To read the full opinion, please visit: http://cdn.ca9.uscourts.gov/da...17/08/16/17-15909.pdf

Panel: Susan P. Graber and Michelle T. Friedland, Circuit Judges, and Consuelo B. Marshall, District Judge.

Argument Date: July 12, 2017

Date of Issued Opinion: August 16, 2017

Docket Number: 17-15909

Decided: Affirmed

Counsel: Michael F. Wright (argued), Los Angeles, California, for Plaintiff-Appellant.
James M. Emery (argued) and Victoria Wong, Deputy City Attorneys; Dennis J. Herrera, City Attorney; Office of the City Attorney, San Francisco, California; for Defendant-Appellee.

Author of Opinion: Circuit Judge Graber

Circuit: Ninth

Case Alert Author: Erik Wu

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 10/26/2017 04:35 PM     9th Circuit     Comments (0)  

  Mendoza v Nordstrom, Inc.
Headline: Ninth Circuit panel rejects employee claims brought pursuant to the California Labor Code Private Attorneys General Act ("PAGA") that the employer violated the State's "day of rest law" and affirms the district court's decision refusing to allow substitute plaintiffs.

Areas of Law: Employment Law; Civil Procedure

Issues Presented: Whether the district court erred in holding employees did not have a valid claim for violation of California's "day of rest" law?
Whether the district court abused its discretion by refusing to allow substitute plaintiffs and dismissing the case?

Brief Summary: The Ninth Circuit panel held that the district court properly dismissed the hourly, non-exempt former employees' suit against their employer under PAGA, Cal. Lab. Code §§ 2698-2699.5, for violation of California's "day of rest" laws, Cal. Lab. Code §§ 551 and 552. The court relied on responses to questions certified to the California Supreme Court to hold the employees were not "aggrieved" under the requirements of Cal. Lab. Code § 2699.3 where neither employee worked more than six consecutive days in any one work week and the employer did not "cause" the employees to work more than seven consecutive days. Because there was no coercion, the employees waived their rights under § 551 by accepting additional shifts when they were offered. Finally, the panel held the district court was not obligated to permit the addition or substitution of plaintiffs under Fed. R. Civ. P. 21.

Significance: This case clarifies the meaning and application of California's day of rest law. It also reveals that a district court does not abuse its discretion in denying a request to add substitute representatives in a PAGA action when the proposed substitutes have not exhausted administrative remedies and where the plaintiffs declined the opportunity to add substitute representatives well before trial.

Extended Summary: Christopher Mendoza ("Mendoza") and Meagan Gordon ("Gordon") are former employees of Nordstrom, Inc. ("Nordstrom") who claim the employer violated California's day of rest law. Mendoza was not originally schedule to work more than six consecutive days, but he did so after being asked to fill in for another employee. Gordon worked more than six consecutive days; however, on two of those days, she worked less than six hours.

Mendoza filed suit on behalf of a class of similarly situated hourly, non-exempt Nordstrom employees in California state court alleging that Nordstrom violated California Labor Code sections 551 and 552 by not providing him with one day's rest in seven work days. The relevant claim was brought pursuant to PAGA. See Cal. Lab. Code §§ 2698-2699.5. Nordstrom removed the action to federal court. Gordon intervened alleging the same causes of action as those in Mendoza's complaint.

The district court dismissed the PAGA action and the Ninth Circuit affirmed. The panel based its decision on responses to certified questions it presented to the California Supreme Court. Mendoza v. Nordstrom, Inc., 393 P.3d 375 (Cal. 2017). First, the Supreme Court held that "[a] day of rest is guaranteed for each workweek. Periods of more than six consecutive days of work that stretch across more than one workweek are not per se prohibited." Mendoza 393 P.3d at 377.
Second, it held that the exemption for employees applies when an employee does not exceed six hours of work during a workweek. If during a workweek the employee does work more than six hours, then a days of rest is required. Mendoza 393 P.3d at 377. Lastly, the California Supreme Court held that an employee may elect, independently, not to take their day of rest. Mendoza 393 P.3d at 377. The Ninth Circuit panel applied the responses to the facts and held neither Mendoza nor Gordon had a valid claim.

The Ninth Circuit also upheld the district court's decision not to permit the addition of new PAGA representatives who did suffer violations of the day of rest law and allow the litigation to continue. It held that even if the new plaintiffs were aggrieved employees, they would have to exhaust their claims administratively before bringing a PAGA action of their own. Moreover, the plaintiffs did not attempt to add other representatives, even after the district court asked them if they wished to do so well before trial. After noting that a PAGA suit is fundamentally different than a class action, the panel held the district court did not abuse its discretion in refusing to permit substitute or additional parties.

For these reasons, the Ninth Circuit panel affirmed the district court's decision dismissing the case.

To read the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...17/08/03/12-57130.pdf

Panel: Susan P. Graber, Ronald M. Gould, and Consuelo M. Callahan, Circuit Judges.

Argument Date: December 12, 2014

Date of Opinion: August 3, 2017

Docket Numbers: No. 12-57130, No. 12-57144

Decided: Affirmed.

Counsel: André E. Jardini (argued) and K.L. Myles, Knapp Petersen & Clarke, Glendale, California, for Plaintiff-Appellant.

R. Craig Clark (argued) and James M. Treglio, Clark Law Firm, San Diego, California; David R. Markham, The Markham Law Firm, San Diego, California; for Plaintiff-Intervenor-Appellant.

Julie A. Dunne (argued), Dawn Fonseca, and Joshua D. Levine, Littler Mendelson P.C., San Diego, California, for Defendant-Appellee.

Author of Opinion: Judge Graber

Circuit: Ninth Circuit

Case Alert Author: Blaine Brown

Case Alert Supervisor: Professor Philip L. Merkel

    Posted By: Glenn Koppel @ 10/26/2017 12:04 PM     9th Circuit     Comments (0)  

  Hoag Memorial Hospital v. Price
Headline: Ninth Circuit holds that the Secretary of the U.S. Department of Health and Human Services violated 42 U.S.C. §1396(a)(30)(A) and acted in an arbitrary and capricious way in approving a retroactive 10% reduction in payments for outpatient services provided to California's Medi-Cal program beneficiaries.

Areas of Law: Medicaid; Administrative Law; Social Security

Issue Presented: Whether the Secretary's approval of an amendment to California's Medi-Cal program was arbitrary and capricious where there was no evidence comparing the availability of health care providers to Medi-Cal beneficiaries and the general population as required by 42 U.S.C. §1396(a)(30)(A).

Brief Summary: The Ninth Circuit reversed and remanded the district court's grant of summary judgment in favor of the Secretary that approved the Secretary's decision to implement a retroactive 10% reduction for outpatient services for Medi-Cal beneficiaries. The panel found the Secretary's decision was not entitled to Chevron deference and that he acted arbitrarily capriciously by failing to consider whether §30(A)'s express requirement of equal access to medical services would be satisfied.

Extended Summary: California requested the Secretary to approve a state plan amendment (SPA) to its Medi-Cal program that would authorize a retroactive 10% reduction for outpatient services for Medi-Cal beneficiaries. The Secretary initially declined approving the SPA because California did not provide information concerning the impact of the proposed reductions on beneficiary access to services. The state resubmitted the SPA and provided information on provider participation in Medi-Cal and beneficiary use of hospital outpatient services over a three-year period. The Secretary later approved the resubmitted SPA and found the State was in compliance with § 30(A).

A group of 57 hospitals that provide outpatient services to Medi-Cal beneficiaries filed a suit challenging the Secretary's approval of the SPA on a number of grounds, including that the record lacked evidence regarding the comparative level of access available to Medi-Cal beneficiaries and the general population. The district court granted summary judgment for the Secretary. The court held that the Ninth Circuit decision in Managed Pharmacy Care v. Sebelius, 716 F.3rd 1235 (9th Cir. 2013), controlled, and the court was required to defer to the Secretary's approval of the SPA. It went on to find that § 30(A) does not specify any particular procedures required for obtaining an approval of an amendment. This appeal followed.

The Ninth Circuit reversed and remanded the case to the district court. The panel discussed whether the Secretary's decision was entitled to Chevron deference. It held that where Congress had unambiguously expressed its intent in a statute, a conflicting administrative agency decision is not entitled to such deference. Because § (30)(A) specifically requires that a SPA must be structured so care and services are available to beneficiaries to at least the same extent as they are available to the general public, the Secretary acted arbitrarily and capriciously by approving the SPA without evidence addressing the equal access requirement. The panel found the Secretary could not have determined the equal access requirement where the evidence did not include any information regarding what services were available to the general population.

The panel also distinguished this case from Managed Pharmacy Care, one that also involved §30(A). In Managed Care, the specific question was whether the Secretary must take provider costs into consideration before approving a rate-reducing SPA. The Ninth Circuit held in Managed Care that where a statute does not describe the specific steps a state must take to meet a standard, the agency is not required to follow a fixed methodology and its decision is entitled to Chevron deference. The instant case is different because the express language of § 30(A) requires a comparison of the availability of provider care to Medi-Cal beneficiaries with that of the general population.

The panel remanded the case to the district court.

To read the full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...17/08/07/15-56547.pdf

Panel: Milan D. Smith, Jr. and N.R. Smith, Circuit Judges, and Gary Feinerman, District Judge.

Argument Date: April 5, 2017

Date of Issued Opinion: August 7, 2017

Docket Number: 15-56547

Decided: Reversed and Remanded

Case Alert Author: Samantha K. Pruett

Counsel: Robert C. Leventhal (argued) and A. Joel Richlin, Foley & Lardner LLP, Los Angeles, California, for Plaintiffs-Appellants.

Jeffrey Eric Sandberg (argued), Lindsey Powell, and Mark B. Stern, Attorneys, Appellate Staff; Eileen M. Decker, United States Attorney; Civil Division, United States Department of Justice, Washington, D.C.; for Defendant-Appellee.

Author of Opinion: Judge Milan D. Smith, Jr.

Circuit: Ninth Circuit

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 10/26/2017 11:58 AM     9th Circuit     Comments (0)  

October 3, 2017
  Ayco Farms, Inc. v. Ochoa
Headline:
Ninth Circuit panels holds (1) that in performing a forum non conveniens analysis, a district court does not abuse its discretion by comparing the proposed foreign forum with the particular State forum that the plaintiff actually chose, rather than with the United States as a whole, and (2) a U.S. citizen plaintiff is entitled to less deference in his choice of forum if he does not reside in that forum.

Areas of Law:
Civil Procedure; Forum Non Conveniens

Issues Presented:
(1) Whether, when balancing private and public interests under the doctrine of forum non conveniens, the court should weigh the burdens and benefits of litigating in a foreign country against the burdens and benefits of litigating in a particular state, or in the United States as a whole. (2) Whether a district court acts within its discretion when it affords less deference to a U.S. plaintiff's choice of forum when the plaintiff is not a citizen of the forum State.

Brief Summary:
Plaintiff Ayco Farms, a Florida corporation with its headquarters in Florida partnered with two Mexican nationals to create a new business entity that would buy and grow produce which Ayco would market and sell on an exclusive basis. Ayco filed suit in the Central District of California alleging breach of the exclusivity agreement. The district court granted defendants' motion to dismiss on forum non conveniens grounds. Affirming the district court's ruling, the Ninth Circuit panel held that the district court did not abuse its discretion in comparing the burdens and benefits of litigation in Mexico and California rather than the burdens and benefits of litigation in Mexico and the United States as a whole. The panel also held that the district court did not err in affording a Florida plaintiff's choice to file its lawsuit in California less deferance, ruling that "a U.S. citizen plaintiff is entitled to less deference in his choice of forum if he does not reside in that forum."

Significance:
(1) In balancing private and public interests under the doctrine of forum non conveniens, the court should weigh the burdens and benefits of litigating in a foreign country against the burdens and benefits of litigating in a particular state, not in the United States as a whole. (2) A district court acts within its discretion when it affords less deference to a U.S. plaintiff's choice of forum when the plaintiff is not a citizen of the forum State.

Extended Summary:
Ayco Farms, Inc. ("Ayco"), a business incorporated and headquartered in Florida, markets and sells produce throughout the United States. In 2012, Ayco partnered with two individuals to establish Ayco Farms Mexico ("AFM"), a business that would purchase and grow produce, and give Ayco Farms the exclusive right to market and sell their produce worldwide. The two individuals - Guillermo Rodriguez Ochoa and Manuel Del Toro Chavez - are citizens of Mexico and officers of Operadora de Productos Frescos, SA de CV ("OPF"), a company headquartered in Mexico that helps Mexican farmers import produce to the United States. Ochoa and Chavez agreed to assign OPF as AFM's agent until AFM became more established.

In 2014, two years after the partnership was established, OPF sued Ayco in Mexico for failure to properly establish AFM and honor its promises. Ayco then filed suit in the U.S. District Court for the Central District of California, alleging breach of an agreement to give Ayco exclusive rights to its products.

Ochoa and Chavez moved to dismiss under forum non conveniens doctrine. Ayco subsequently opened a California office. The district court granted Chavez's and Ochoa's motion to dismiss with several conditions, concluding that (1) Mexico was an adequate alternative forum; (2) the private and public interest factors identified in Gulf Oil Corp. v. Gilbert favored dismissal; and (3) less deference to Ayco's choice of forum was warranted due to Ayco's lack of contact with California.

On appeal, the Ninth Circuit panel held that the doctrine of forum non conveniens is generally applied by comparing the benefits and burdens of litigation in a foreign country against those of a particular state rather than the U.S. as a whole. The panel reasoned that, due to the vast differences among states, it would be difficult and impracticable for a district court to consider all Gulf Oil factors for the United States as a whole. While recognizing that there may be cases in which a simple application of the Gulf Oil factors could favor or oppose litigation in a foreign country, the panel concluded that district courts may use discretion in addressing the issue on a case-by-case basisThe panel ruled that the district court did not abuse its discretion here "by comparing the proposed foreign forum with the forum that the plaintiff actually chose, rather than with the United States as a whole.".

The panel also determined that, despite a plaintiff's general entitlement to deference in its choice of forum, especially an American plaintiff, this deference is not absolute and a mere showing of American citizenship is not in itself sufficient to bar a district court from granting a forum non conveniens dismissal. Moreover, the panel followed the Second Circuit en banc reasoning where "the more it appears that the plaintiff's choice of a U.S. forum was motivated by forum-shopping reasons ... the less deference the plaintiff's choice of forum commands." Vivendi SA v. T-Mobile USA Inc., 586 F.3d 698, 695 (9th Cir. 2009) (quoting Iragorri v. United Techs. Corp., 274 F.3d 65, 72 (2d Cir. 2001) (en banc)). The panel held that the district court acted within its discretion when it viewed Ayco's choice of forum with skepticism, affording it less deference because it was evident that Ayco's contacts with California were limited and that Ayco was attempting to establish connections with the state by opening an office within its jurisdiction during the month in which both parties presented oral arguments on respondents' motion to dismiss.

Moreover, the panel rejected Ayco's argument that the district court erred in concluding that the Gulf Oil factors favored a trial in Mexico, ruling that Ayco failed to provide evidence of any private factors or public interests favoring trial in California.

To read the full opinion, please visit: http://cdn.ca9.uscourts.gov/da...017/07/10/15-55611.pdf

Panel: Richard C. Tallman and Michelle T. Friedland, Circuit Judges; and David A. Faber, District Judge

Argument Date: January 9, 2017

Date of Issued Opinion: July 10, 2017

Docket Number: 15-55611

Decided: Affirmed

Case Alert Author: Christine Mardikian

Counsel: Paul S. Marks (argued) and Yuriko M. Shikai, Neufeld Marks, Los Angeles, California, for Plaintiff-Appellant. Timothy D. Biche (argued), Diyari Vásquez, and Gerald E. Hawxhurst, Crone Hawxhurst LLP, Los Angeles, California, for Defendant-Appellee.

Author of Opinion: Per Curiam Opinion

Circuit: Ninth

Case Alert Supervisor: Professor Glenn S. Koppel

    Posted By: Glenn Koppel @ 10/03/2017 04:58 PM     9th Circuit     Comments (0)  

  Republic of the Marshall Islands v. United States
Headline:
The Ninth Circuit panel concluded that Article VI of the Treaty on the Non-Proliferation of Nuclear Weapons was non-self-executing and, therefore, unenforceable by the United States judicial branch.

Areas of Law:
International Law; Civil Procedure

Issues Presented:
Whether Article VI of the Treaty on the Non-Proliferation of Nuclear Weapons was a self-executing treaty, thus requiring the United States to engage in good-faith negotiations under Article VI of the Treaty.

Brief Summary:
The Ninth Circuit affirmed the decision of the district court to dismiss a suit filed by the Republic of the Marshall Islands (Marshall Islands) against the United States claiming that the United States breached Article VI of the Treaty on the Non-Proliferation of Nuclear Weapons by failing to pursue good-faith negotiations. The panel held (1) Article VI of the Treaty is non-self-executing, (2) plaintiff's claims are not redressable because Article VI is not self-executing and, therefore, plaintiff lacks standing under Article III's "case" or "controversy" requirement, and (3) the claims presented inextricable political questions. The Ninth Circuit panel, therefore, held that Article VI was not judicially enforceable in domestic court, and dismissed the claim.

Significance:
Unlike the typical treaty-enforcement actions brought by private individuals, this case involves one state party seeking to enforce its treaty rights in the domestic court of another state party. This unorthodox effort failed because treaties that are non-self-executing are unenforceable judicially.

Extended Summary:
The Treaty on the Non-Proliferation of Nuclear Weapons (the Treaty) was entered into in 1970 after being signed by President Johnson with consent of the United States Senate with the goal of nuclear disarmament. In 1995, the Marshall Islands, the named plaintiff, acceded to the Treaty. Today over 180 states are parties to the Treaty.

Article VI of the Treaty promoted the nuclear disarmament goal by stating that each party to the Treaty will "pursue negotiations in good faith on effective measures relating to cessation of the nuclear arms race at an early date and to nuclear disarmament." In April, 2014, the Marshall Islands sued the United States in federal district court claiming that the United States failed to pursue good-faith negotiations, and therefore breached Article VI of the Treaty. According to the Marshall Islands, the United States has a "grim legacy" of a "nuclear weapons program" and this included the detonation of sixty-seven nuclear weapons in the Marshall Islands that resulted in "horrific and multi-generational consequences." The Marshall Islands sought a declaration stating that Article VI imposes obligations on the United States to (1) "pursue negotiations in good faith on effective measures relating to cessation of the nuclear arms race at an early date and to nuclear disarmament;" and (2) "bring to a conclusion negotiations leading to nuclear disarmament in all its aspects under strict and effective control" and a separate declaration that the United States is "in continuing breach" of Article VI's obligation to "pursue negotiations in good-faith on effective measures relating to cessation of the nuclear arms race at an early date and nuclear disarmament." The Marshall Islands sought to force the United States - "within one year" following entry of the requested declaratory judgment - to "take all steps necessary" to comply with its Article VI obligations, "including by calling for and convening negotiations for nuclear disarmament in all its aspects."

This case deviated from the typical treaty-enforcement action as it was brought by one state party seeking to enforce its treaty rights in the domestic court of another state party.

The Ninth Circuit panel first addressed whether Article VI was self-executing and, therefore, judicially enforceable in federal court. The panel determined that Article VI was the epitome of a non-self-executing treaty noting that the text of the Treaty does not explicitly request direct judicial enforcement of Article VI, nothing in the text of the Treaty suggests that it was designed "to have immediate effect" in domestic courts, the Treaty calls for the United States to pursue future negotiations on "effective measures" to "end the nuclear arms race at an early date," and most important, "Article VI is addressed to the executive, urging further steps only the executive can take - negotiation with other nations.

The panel further held that the Marshall Islands' claims are not redressable because Article VI is non-self-executing and, therefore, the Marshall Islands lacks standing under Article III that limits the judicial power to resolving "cases" and "controversies" and the separation-of-powers principles underlying that limitation. In other words, plaintiff's asserted injuries are not redressable because Article VI may not be enforced in federal court.

The Ninth Circuit panel also addressed the political question doctrine preliminarily noting that the Supreme Court has recognized the inherently political nature of decisions involving foreign relations. In Baker v. Carr, the Court set out six factors to determine whether a claim raises a political question (so-called "Baker factors.") The panel relied on the first two factors to determine if the claim raised a political question: "[1] a textually demonstrable constitutional commitment of the issue to a coordinate political department; or [2] a lack of judicially discoverable and manageable standards for resolving it."

The Marshall Islands' claims involved "a textually demonstrable constitutional commitment of the issue to a coordinate political department" by stating "when, where, whether, who, and how" the United States would "negotiate with foreign nations to end the nuclear arms race and accomplish nuclear disarmament." The panel ruled that it cannot compel the United States to "call for and convene negotiations for nuclear disarmament in all its aspects."

Noting that Article VI contains "an array of vague terms and a dearth of applicable standards" the panel concluded that there was a "lack of judicially discoverable and manageable standards for resolving" key issues intertwined with the relief sought by the Marshall Islands.

To read the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...017/07/31/15-15636.pdf

Panel:
M. Margaret McKeown and Jay S. Bybee, Circuit Judges, and Susan Oki Mollway, District Judge.

Argument:
March 15, 2017

Date of Issued Opinion:
July 31, 2017

Docket Number:
4: 14-cv-01885-JSW

Decided:
Affirmed the decision of the district court.

Case Alert Author:
Kianna Woods

Counsel:
Laurie B. Ashton (argued) and Alison Chase, Keller Rohrback LLP, Phoenix, Arizona; Juli E. Farris and Lynn Lincoln Sarko, Keller Rohrback LLP, Seattle, Washington; for Plaintiff-Appellant.

Sushma Soni (argued) and Douglas N. Letter, Appellate Staff, Civil Division, United States Department of Justice, Washington, D.C., for Defendants-Appellees.

Scott Yundt, Livermore, California, as and for Amicus Curiae Tri-Valley Communities Against a Radioactive Environment.

Henry M. Willis, Schwartz Steinsapir Dohrmann & Sommers LLP, Los Angeles, California; Margot Nikitas, Staff Attorney; Joseph Cohen, General Counsel; United Electrical, Radio and Machine Workers of America, Pittsburgh, Pennsylvania; for Amici Curiae United Electrical, Radio and Machine Workers of America (UE), International Commission for Labor Rights, and Labor and Employment Committee of the National Lawyers Guild.

Janet Benshoof, New York, New York, as and for Amicus Curiae Global Justice Center.

Randy Baker, Seattle, Washington; Anabel Dwyer, Elizabeth Shafer, and John Burroughs, Lawyers Committee on Nuclear Policy, New York, New York, for Amicus Curiae Lawyers Committee on Nuclear Policy.

Daniel U. Smith, Smith & McGinty, San Francisco, California, for Amici Curiae Physicians for Social Responsibility, International Physicians for the Prevention of Nuclear War, and Pax Christi International.

Andrea R. St. Julian, San Diego, California, for Amici Curiae Hans M. Kristensen, Robert Alvarez, Dr. James E. Doyle, and Nuclear Watch New Mexico.

Author of Opinion:
Judge McKeown

Circuit:
Ninth

Case Alert Supervisor:
Professor Glenn S. Koppel

    Posted By: Glenn Koppel @ 10/03/2017 04:52 PM     9th Circuit     Comments (0)  

September 5, 2017
  M.C. v. Antelope Valley High School District
Headline:Ninth Circuit panel reverses a district court's decision which deferred to an administrative law judge's finding that a school district did not violate the Individuals with Disabilities Education Act (IDEA) and due process when the district unilaterally changed a disabled student's Individualized Education Plan (IEP) without notify the student's parent.

Areas of Law: Administrative Law; Education; Disabled Students' Rights

Issues Presented: 1) Whether a school district's failure to notify a parent of changes to a child's IEP, and failure to file a response to plaintiff's due process complaint amounted to a violation of the IDEA and due process. 2) Whether the burden of proving a substantive violation of the IDEA, which normally rests on the parent alleging a violation, remains when that party has no actual knowledge of unilateral changes made by the school district until the day of the administrative hearing.

Brief Summary: The Ninth Circuit reversed the district court's affirmance of an administrative law judge's (ALJ) decision which held Defendant-Appellee Antelope Valley Union High School District (the District) did not violate the IDEA and due process when it failed to notify the parent of a disabled student of unilateral changes made to an IEP. The court remanded to the district court all substantive issues for determination.

Significance: A unilateral change by a school district to a student's IEP constitutes a procedural violation of the IDEA.

Extended Summary: M.C., a student at a high school operated by the District, suffers from a disease causing blindness and other deficits which caused developmental delays. In a meeting with the District's administrators and instructors M.C.'s parent signed an IEP setting out goals and services for the student. The District alleged the IEP included a mistaken term and changed it unilaterally without ever notifying M.C.'s parent.

M.C.'s parent later filed an administrative complaint claiming the District violated the IDEA as the District did not provide a free appropriate public education (FAPE). The parent was unaware of the amendment to the IEP. After a three-day hearing, the ALJ found the District did not violate the IDEA or due process. The district court deferred to the ALJ's decision and affirmed.

The Ninth Circuit reversed and remanded the case to the district court for further proceedings.
The court recognized that the IDEA guarantees students with disabilities a FAPE specifically designed for the unique needs of each individual. Congress intentionally placed procedural safeguards for parental input at every step of the IEP process and gave equal weight to both meaningful parental involvement as well as any substantive standard. IEPs are not normally signed in presence of counsel, so adherence to procedural safeguards is keenly important to avoid prejudice to the parent.

The Ninth Circuit held that the District's unilateral amendment to the IEP was a procedural violation of the IDEA. It found an IEP is a contract that embodies a binding commitment providing notice to a school district and parent as to what services will be provided to the student. Thus, the District was not entitled to make unilateral changes to the document. The Ninth Circuit also held that the District's changing of a term in the IEP relating to assistive technology devices violated M.C.'s right to a FAPE.

The final procedural error discussed in the opinion is the District failed to file a response to M.C.'s complaint. The Ninth Circuit held that when a school district fails to file a timely answer, an ALJ must not go forward with the hearing. Instead, it must order a response and shift the cost of the delay to the school district, regardless of who is ultimately the prevailing party.

The court remanded the substantive claims to the district court as they were never addressed by either the ALJ or the district court. It held that the burden of proof shifts to the District to show that the services the student actually received are substantively reasonable. M.C.'s parent was awarded attorneys' fees as prevailing party on the appeal.

To read the full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...17/03/27/14-56344.pdf

Panel: Stephen Reinhardt, Alex Kozinski, and Kim McLane Wardlaw, Circuit Judges.

Argument Date: August 2, 2016

Date of Issued Opinion: March 27, 2017

Docket Number: 2:13-cv-01452-DMG-MRW

Decided: Reversed and remanded

Case Alert Author: M.D. Shapiro

Counsel: Christian M. Knox (argued), Colleen A. Snyder Holcomb, Daniel R. Shaw, and F. Richard Ruderman, Ruderman & Knox LLP, Sacramento California, for Plaintiff-Appellants.

David A. Seeley (argued) and Richard D. Oppenheim, Jr., Sylvester Oppenheim & Linde, Encino, California, for Defendant-Appellee.

Author of Opinion: Judge Alex Kozinski

Circuit: Ninth Circuit

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 09/05/2017 04:19 PM     9th Circuit     Comments (0)  

August 30, 2017
  Broadway Grill, Inc. v. Visa, Inc.
Headline: The Ninth Circuit held that plaintiffs may not amend their complaint, after a case has been removed to federal court, to change the definition of the class so as to eliminate minimal diversity and thereby divest the federal court of jurisdiction. The panel clarified that Benko v. Quality Loan Service Corp., that created an exception to this general rule unique to the Ninth Circuit, allows amendments only for purposes of clarifying the relationship between the parties and the effect of the class claims on particular defendants.

Area of Law: Civil Procedure

Issue Presented: Whether the representative party to a class action filed in state court may amend its complaint after the case has been removed to federal court under the Class Action Fairness Act, 28 U.S.C. §1332(d), in order to alter the plaintiff class so as to eliminate minimal diversity and divest the federal court of jurisdiction.

Brief Summary: The Ninth Circuit panel reversed the district court's order remanding a class action filed by Broadway Grill, Inc. that had been removed to federal court under the Class Action Fairness Act (CAFA) on the basis of minimal diversity between non-California citizens and a California defendant. After removal, the district court had permitted Broadway Grill to eliminate minimal diversity by amending its complaint to remove from the plaintiff class non-California citizens and include only California citizens. In granting leave to amend, the district court relied on the Ninth Circuit's decision in Benko v. Quality Loan Service Corp., 789 F.3d 1111 (9th Cir. 2015), which allows for amendment after removal under CAFA in limited circumstances so that the plaintiff may clarify the nature of the action for purposes of a federal jurisdictional analysis. On review, the Ninth Circuit panel distinguished Benko from the instant case, finding that Broadway Grill did not seek to amend its complaint to clarify the nature of the parties or their allegations for purposes of a jurisdictional analysis under CAFA, but, rather, to change the very makeup of the class itself so as to eliminate minimal diversity and divest the district court of jurisdiction. The panel found the amendment fell outside the parameters of Benko by changing the nature of the action itself.

Significance: Plaintiffs to a class action originally filed in state court may not alter the makeup of the class after the case is removed under the Class Action Fairness Act (CAFA), 28 U.S.C. §1332(d), in order to eliminate minimal diversity requirements and divest the federal court of jurisdiction.

Extended Summary: Broadway Grill, Inc., a California restaurant, filed a class action in California state court against Visa, Inc., a citizen of California and Delaware, alleging violations of state antitrust laws through rate fixing and by the company's practice of not allowing merchants to apply a surcharge to customers using credit cards. The complaint described the plaintiff class as "all California individuals, businesses and other entities who accepted Visa-branded cards in California since January 1, 2004 . . . ." The class included both California and non-California citizens.
Visa, Inc. removed the case to the District Court for the Northern District of California under the Class Action Fairness Act (CAFA), 28 U.S.C. §1332(d)(2), which provides that district courts shall have original jurisdiction of class actions where: (1) the matter in controversy exceeds $5,000,000; (2) there are 100 or more plaintiffs; and (3) any member of the plaintiff class is a citizen of a different state than any defendant (minimal diversity requirement). Because the plaintiff class included merchants doing business in California who were not California citizens, CAFA's minimal diversity requirement was met.

Following removal, Broadway Grill moved to remand the case back to California state court on the ground that the case fell within one of CAFA's specific exceptions to federal jurisdiction - the so-called "local controversy" exception, 28 U.S.C. §1332(d)(4). Under this exception, federal jurisdiction is denied in cases where: (1) more than two-thirds of plaintiff class members are citizens of the state of filing; (2) at least one defendant from whom "significant relief" is sought, and whose alleged conduct forms a "significant basis" for the plaintiff class' claims, is also a citizen of that state; (3) principal injuries as a result of the alleged conduct of each defendant were incurred in that state; and (4) no other class action has been filed asserting the same or similar allegations against any of the defendants in the 3-year period preceding filing; or two-thirds or more of the plaintiff class and the primary defendants are citizens of the state of filing. The district court denied the motion to remand because Broadway Grill was unable to show that two-thirds of the plaintiff class was citizens of California.

After its motion to remand was denied, Broadway Grill sought leave to amend the complaint in order to change the plaintiff class so that it included only "California citizens," which would eliminate minimal diversity and divest the district court of jurisdiction. The district court noted that, generally, jurisdiction is determined at the time of removal, and that amendments made to the complaint after removal cannot eliminate diversity. However, leave to amend was granted based on the exception articulated in Benko v. Quality Loan Service Corp., 789 F.3d 1111 (9th Cir. 2015), which allows for amendment of the complaint after the case is removed under CAFA so that the plaintiff may clarify the nature of the action in order for the federal court to determine whether it has jurisdiction. This exception appeared to be unique to the Ninth Circuit.

The panel cited to several recent cases demonstrating the uncertainty the Benko exception had created amongst the district courts as to when post-removal amendments to the complaint are permitted. See Lopez v. Aerotek, Inc., 2017 WL 253948, at *2 (C.D. Cal. Jan. 19, 2017) (amendment not allowed for purpose of adding a new defendant who might qualify for local controversy exception); Rossetti v. Stearn's Prod. Inc., 2016 WL 3277295, at *1 (C.D. Cal. June 6, 2016) (amendment not allowed for purpose of changing class from one including citizens of numerous states to one including only citizens of California); Chen v. eBay, Inc., 2016 WL 835512, at *2 n.1 (N.D. Cal. Mar. 4, 2016) (allowed amendment limiting a class to citizens of California, not residents, and ordered remand); In re Anthem Inc. Data Breach Litig., 129 F.Supp. 3d 887, 894-96 (N.D. Cal. 2015) (allowed amendment limiting class only to citizens of Missouri, not residents, and ordered remand).
The panel distinguished Benko from the instant case and held Broadway Grill's amendment fell outside the parameters of that case. The panel explained that Benko case allowed the plaintiffs to amend their complaint after removal to clarify the nature of the complaint's allegations against one of the defendants for a federal jurisdiction analysis under CAFA, not to change the makeup of the class. In Benko, the plaintiffs only amended their complaint to give "estimates of the percentage of total claims asserted against [the in-state defendant]" for purposes of satisfying §1332(d)(4) of CAFA, also known as the "local controversy" exception to federal jurisdiction. Benko, 789 F.3d at 1117. In the instant case, however, Broadway Grill did not amend their complaint to clarify the nature of the parties for purposes of a federal jurisdictional analysis under CAFA, but rather, changed the very makeup of the class itself from one including both California and non-California citizens, to one including only California-citizens so as to eliminate minimal diversity and divest the district court of jurisdiction.

The panel explained the reasoning behind its decision in Benko was that a complaint originally drafted for state court may not address certain issues that are specific to CAFA, such as the "local controversy" exception allowing for remand back to state court following removal. Therefore, in limited circumstances, leave to amend post-removal should be granted to clarify issues affecting federal jurisdiction under CAFA. The panel reasoned that in contrast, a class definition must always be included in the complaint for a class action, no matter whether if it is filed in state or federal court. Thus, Broadway Grill's amendment to their complaint did not serve to explain the nature of the allegations for jurisdictional analysis purposes under CAFA as in Benko, instead, it changed the nature of the action itself. Also, the panel noted that the Benko decision itself states that federal jurisdiction is favored for class actions under CAFA.

The panel noted that the other circuit courts of appeals have unanimously held that the decision whether an order to remand is proper is to be determined at the time of removal based on the pleadings. See Pullman Co. v. Jenkins, 305 U.S. 534, 537-38 (1939). The panel also stated these circuit court decisions are consistent with the statutory language of § 1332(d)(7), which states minimal diversity is determined at time of removal ("Citizenship of the members of the proposed plaintiff class shall be determined . . . as of the date of the complaint or amended complaint . . . indicating the existence of Federal jurisdiction."). Therefore, Broadway Grill is precluded from amending their complaint after removal in order to eliminate diversity and divest the federal court of jurisdiction. The leading case for application of this rule in the in the context of CAFA is Mondragon v. Capital One Auto Fin., 736 F.3d 880, 883 (9th Cir. 2013).

In conclusion, the Ninth Circuit panel found that, because minimal diversity existed at the time of removal based on the pleadings, the general rule preventing post-removal amendment from divesting federal jurisdiction over the matter must be applied. The Benko exception allowing for post-removal amendment of the complaint is limited to clarifying the relationship between the parties, and how plaintiff class claims affect certain defendants for purposes of a jurisdictional analysis under CAFA. Therefore, Broadway Grill's amendment changing the makeup of the plaintiff class itself in order to divest the district court of jurisdiction fell outside that exception. Accordingly, the district court's order remanding the case of the matter back to state court was reversed.

To read the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...17/05/18/17-15499.pdf

Panel: Mary M. Schroeder and Johnnie B. Rawlinson, Circuit Judges, and Steven Paul Logan, District Judge for the District of Arizona, sitting by designation.

Argument Date: April 21, 2017

Date of Issued Opinion: May 18, 2017

Docket Number: 17-15499; 4:16-cv-04040-PJH

Decided: Reversed and Remanded

Case Alert Author: Michael J. Thies

Counsel:
Matthew A. Eisenstein (argued), Washington, D.C.; Sharon D. Mayo and Robert J. Vizas, San Francisco, California; for Defendants-Appellants
Nancy L. Fineman (argued), and Joseph W. Cotchett, Cotchett Pitre & McCarthy LLP, Burlingame, California; for Plaintiff-Appellee

Author of Opinion: Judge Mary M. Schroeder

Circuit: Ninth

Case Alert Supervisor: Professor Glenn S. Koppel

    Posted By: Glenn Koppel @ 08/30/2017 06:21 PM     9th Circuit     Comments (0)  

August 24, 2017
  S.B. v. County of San Diego
Headline: Ninth Circuit panel, in reversing district court's denial of qualified immunity from Fourth Amendment liability in use of excessive force, takes to heart the U.S. Supreme Court's recent admonishment - particularly to the Ninth Circuit - "not to define clearly established law at a high level of generality" in holding that the officer in question was entitled to qualified immunity because he was not put on "clear notice," by any specific case, that using deadly force "in these particular circumstances" would be excessive.

Areas of Law: Criminal Law, Constitutional Law, Civil Rights.

Issues Presented: Whether the panel could identify a case where an officer, acting under similar circumstances as the officer alleged to have violated plaintiff' under similar circumstances, was held to have violated the Fourth Amendment.

Brief Summary: Police officers responded to a call about an individual who was intoxicated and acting aggressively. When the police officers arrived on the scene, they observed the suspect with knives in his pockets. After being told to place his hands on his head, the man reached for a knife, and a police officer used deadly force to end the situation. The district court granted summary judgment in favor of the plaintiff, holding that that the officer did not have qualified immunity. The county appealed the summary judgment and the Ninth Circuit panel reversed the district court.

Significance: In light of the U.S. Supreme Court's recent admonition in White v. Pauly, 137 S. Ct. 548 (2017) "not to define clearly established law at a high level of generality, the denial of qualified immunity to a police officer who uses deadly force is improper where the court cannot identify a specific case that put the officer on "clear notice that using deadly force in these particular circumstances would be excessive."

Extended Summary: On August 24, 2013, Deputies Moses and Vories overheard a "5150" radio call about family members concerned for their safety because an individual, David Brown, with mental issues was intoxicated and acting aggressively. The two deputies went to Brown's house where another deputy, Billieux, met them.

All three deputies entered the home, looking for Brown. The deputies could hear cabinets or drawers opening and closing from the kitchen area. Deputies Moses and Vories entered the kitchen and saw Brown standing with kitchen knives sticking out of his pockets. After Brown initially complied with the deputies demands of raising his hands in the air and kneeling to floor, Brown then looked at Deputy Vories, and reached back with his right hand to grab a knife. Brown then moved in a manner that caused deputies to believe he was trying to stand up. Deputy Moses, believing that Deputy Vories was in imminent harm, shot Brown three or four times, resulting in Brown's death.

Plaintiffs filed action against the defendants under a 42 U.S.C. § 1983 claim for excessive force in violation of the Fourth Amendment and a wrongful death claim under California law. In August 2015, the district court heard arguments on defendants' motion for summary judgment. Plaintiffs urged that the court deny the motion due to inconsistencies in the deputies' depositions. The district court agreed and denied the motion for three inconsistencies: (1) whether Brown was on his knees or attempting to stand when he grabbed the knife and was shot; (2) whether Moses could see the other officers clearly when he fired his weapon; and (3) the distance between Brown and Vories when Brown grabbed the knife. The district court also found inconsistencies over whether Moses's conduct violated clearly established law, making qualified immunity inappropriate. Defendants then filed an interlocutory appeal to challenge the denial of qualified immunity to Moses.

In determining whether an officer is entitled to qualified immunity, the court used the rule set forth by C.V. by & through Villegas v. City of Anaheim, 823 F.3d 1252 (9th Cir. 2016), that courts will consider (1) whether there has been a violation of a constitutional right; and (2) whether that right was clearly established at the time of the officer's alleged misconduct. The panel started their opinion by first looking at whether a constitutional right was violated.

In addressing the first issue, the panel stated that the Fourth Amendment permits law enforcement to use "objectively reasonable" force and articulated the following factors for evaluating reasonableness including: (1) the severity of the crime; (2) whether the suspect posed an immediate threat to the safety of the officers or others; and (3) whether the suspect actively resisted arrest or attempted to escape. However, the court declared that the most important factor to be considered is whether the suspect posed an immediate threat to the safety of the officers or others.

When viewing the facts in the light most favorable to the plaintiffs, the court determined that a reasonable jury could find that Brown was on his knees when shot, Moses could not see other officers at the time of the shooting, officers did not order Brown to drop the knife when he went to grab it, etc. Based on these findings, the panel concluded that a reasonable jury could conclude that Moses's use of deadly force was not objectionably reasonable and thus violated Brown's Fourth Amendment right against excessive force.

Next, the court looked to the second element of whether qualified immunity should have been granted: whether the constitutional right was clearly established at the time of the officer's alleged misconduct. The court declared that to be clearly established, the contours of the right must be sufficiently clear that a reasonable official would understand that what the official is doing violates that right.

Addressing the second issue, the panel "acknowledge[d] the U.S. Supreme Court's recent frustration with failures [of the lower court's] to heed its holdings" and its admonition "not to define clearly established law at a high level of generality." City & County of San Francisco v. Sheehan, 135 S. Ct. 1765 at 1775-76. Noting the Supreme Court's statement in White v. Pauly, 137 S. Ct. 548, 551 (2017) that "n the last five years, [the Supreme Court] has issued a number of opinions reversing federal courts in qualified immunity cases," the panel stated that it "hear[d] the Supreme Court loud and clear" that, "before a court can impose liability on Moses, we must identify precedent as of [the night of the shooting] that put Moses on clear notice that using deadly force in these particular circumstances would be excessive." The Panel could not find such precedent. The panel distinguished on the facts closest analogous case. In Glenn v. Washington County, 673 F.3d 864 (9th Cir. 2011), the individual was a suicidal man who was intoxicated and threatened to kill himself while holding a knife to his throat. Brown's "grabbing the knife from his pocket despite orders to place his hands on his head was more threatening" to Moses. "If the person is armed . . . [then] a furtive movement, harrowing gesture, or serious verbal threat might create an immediate threat." George v. Morris, 736 F.3d 829, (9th Cir. 2013).

Accordingly, the panel reversed the district court's denial of summary judgment finding that it was not clearly established that using deadly force in this situation, even viewed in the light most favorable to plaintiffs, would constitute excessive force under the Fourth Amendment.

To real the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...17/05/12/15-56848.pdf

Panel: Before: Milan D. Smith, Jr. and John B. Owens, Circuit Judges, and Edward R. Korman, District Judge.

Argument Date: February 17, 2017.

Date of Issued Opinion: May 12, 2017

Docket Number: 15-56848

Decided: Reversed

Case Alert Author: Kyle Case

Counsel: James Chapin (argued), Senior Deputy County Counsel; Thomas E. Montgomery, County Counsel; Office of County Counsel, San Diego, California; for Defendants-Appellants.
Megan R. Gyongyos (argued) and Bryan T. Dunn, The Cochran Firm California, Los Angeles, California, for Plaintiffs-Appellees.

Author of Opinion: Judge Owens

Circuit: Ninth

Case Alert Supervisor: Professor Glenn S. Koppel

    Posted By: Glenn Koppel @ 08/24/2017 07:04 PM     9th Circuit     Comments (0)  

  Resh v. China Agritech
Headline:
Reversing the district court's dismissal of a would-be class action lawsuit on ground of untimeliness, the panel held that the named plaintiffs in the current class action - who were unnamed members in a previous uncertified class action lawsuit - had "availed themselves" of American Pipe tolling and are thus not time barred from bringing a subsequent class action suit on the same underlying claim.

Areas of Law:
Federal Rules of Civil Procedure, Federal Rules of Appellate Procedure
Issue Presented:
(1) Whether the dismissal of the class action due to timeliness was a final and appealable judgment where the district court had not set forth its judgment in a separate document as required by FRCP 58.
(2) Whether unnamed plaintiffs in a class action enjoy "tolling" of the statute of limitations on their claim, so that, as named plaintiffs, they could timely bring a subsequent class action on the same underlying merits.

Brief Summary:
Plaintiffs were joined as unnamed members of two would-be class actions against China Agritech, Inc. for alleged violations of the Securities Exchange Act of 1934. Both class actions were denied class certification. Before the district court could issue final judgment on a separate document, plaintiffs filed the instant would-be class action as named plaintiffs.

The district court dismissed plaintiff's complaint because the statute of limitations had run during the previous class actions. The panel reversed on the grounds that plaintiff's current action was timely because the deadline had tolled during the previous class actions. The panel remanded, ordering the district court to determine whether plaintiff's would-be class could be properly certified, and whether plaintiff's complaint should be precluded.

Significance:
Unnamed members of a would-be class action will have their claim's statute of limitations tolled, so that, as named plaintiffs, they may bring a subsequent class action on the same merits. The panel's decision effectively expands application of prior case law that had limited tolling to allow the claims only of individuals, to claims asserted on behalf of unnamed members of an entirely new class action.

Extended Summary:
China Agritech, Inc. was a holding company listed on the NASDAQ stock exchange. Through a series of writings alleging fraud, China Agritech's stock value declined until eventually it was formally dropped from the public trading market.

On February 11, 2011, Theodore Dean filed a putative class action against China Agritech and its directors. The district court denied the Dean plaintiffs' motion for class certification on the ground that the Dean plaintiffs had failed to establish the predominance requirement of Rule 23(b)(3). After the district court's denial of class certification was appealed under Rule 23(f) and affirmed, the Dean plaintiffs settled their individual claims.

On October 4, 2012, Kevin Smyth filed a similar complaint on behalf of the same would be class in Dean. The district court denied the Smyth plaintiffs motion for class certification on the grounds that the Smyth plaintiffs' personal claims failed the typicality requirement of Rule 23(a)(3).

Subsequently, Michael Resh, an unnamed plaintiff in Dean and Smyth, filed a would-be class action, as named plaintiff, against China Agritech on June 30, 2014. The district court dismissed the Resh plaintiffson the theory that the would-be class action was time-barred under the applicable two-year statute of limitations.

The Resh plaintiffs argued that his would-be class action was timely because American Pipe tolled the statute of limitations during the pendency of the Dean and the Smyth actions. While the district court ruled that American Pipe tolled the applicable statute of limitations as to all asserted members of the class, it only allowed class members to file separate individual actions prior to the expiration of his or her own limitations period, not an entirely new class action. The district court declined to expand American Pipe's tolling rule to include "an entirely new class action based upon a substantially identical class."

On appeal, the Ninth Circuit panel first determined that it had appellate jurisdiction, ruling that the district court's dismissal of the putative class action as untimely was a final and appealable judgment even though the district court had not set forth its judgment in a separate document as required by FRCP 58.

Federal Rule of Civil Procedure Rule 58(a) required the district court's judgment to be set forth in a separate document. However the absence of such document does not render that dismissal non-appealable. The panel cited Federal Rule of Appellate Procedure 4(a)(7)(B), which states "[a] failure to set forth a judgment or order on a separate document when required by . . . Rule 58(a) does not affect the validity of an appeal from that judgment or order."

Accordingly, even if the district court had yet to publish their dismissal in a separate document, the Resh plaintiffs would still be able to appeal. Thus, the panel ruled the Court of Appeals had appellate jurisdiction to hear the Rash plaintiffs' appeal, and proceeded to determine the merits of the tolling issue.

Addressing the issue whether unnamed plaintiffs in a class action enjoy "tolling" of the statute of limitations on a claim, so that they, as named plaintiffs, could timely file an entirely new class action on the same underlying merits, the panel ruled in the affirmative.

The panel held the statute of limitations for Resh's own class action as named plaintiff tolled for the time Resh spent as an unnamed plaintiff in two prior would-be class actions. The panel noted that "permitting future class action named plaintiffs, who were unnamed class members in previously uncertified classes, to avail themselves of American Pipe tolling would advance the policy objectives that led the Supreme Court to permit tolling in the first place." Defendants would not be unfairly surprised because the pendency of the prior class action put them on notice '"not only [of] the substantive claims being brought against them, but also [of] the number and generic identities of the potential plaintiffs who may participate in the judgment." American Pipe, 414 U.S. at 554 - 55. The panel also observed that permitting previously unnamed class members to bring future class actions as named plaintiffs "also promotes economy of litigation by reducing incentives for filing duplicative, protective class actions because '[a] putative class member who fears that class certification may be denied would have every incentive to file a separate action prior to the expiration of his own period of limitations.'"

Addressing potential for abuse, the panel assured defendants that class actions would not be allowed to perpetually "re-litigate" from their pool of unnamed class members. Thanks to legal principles such as preclusion, and the unlikelihood that re-litigation would be economically viable for lawyers or clients, the panel concluded that "the current legal system is adequate to respond to such a concern."

To read the full opinion, please visit: http://cdn.ca9.uscourts.gov/da...17/05/24/15-55432.pdf

Panel: Stephen Reinhardt, William A. Fletcher, and Richard A. Paez, Circuit Judges.
Argument Date: December 5, 2016

Date of Issued Opinion: May 24, 2017

Docket Number: 15-55432

Decided: Reversed and Remanded

Case Alert Author: Devin Bruen

Counsel:
Matthew M. Guiney (argued), Wolf Haldenstein Adler - Freeman & Herz LLP, New York, New York; Betsy C. Manifold, Francis M. Gregorek, Rachele R. Rickert, Marisa C. Livesay, and Wolf Haldenstein Adler - Freeman & Herz LLP, San Diego, California; David A.P. Brower - Brower Piven, New York, New York; for Plaintiffs-Appellants.
Seth Aronson (argued), Brittany Rogers, and Michelle C. Leu - O'Melveny & Myers LLP, Los Angeles, California; Abby F. Rudzin - O'Melveny & Myers LLP, New York, New York; for Defendants-Appellees.

Author of Opinion: Judge William A. Fletcher.

Circuit: Ninth

Case Alert Supervisor: Professor Glenn S. Koppel

    Posted By: Glenn Koppel @ 08/24/2017 07:03 PM     9th Circuit     Comments (0)  

  Marco Antonio Corona-Contreras v. Steven F. Gruel
Headline:
The Ninth Circuit panel held that the district court exceeded its authority under 28 U.S.C. § 1447(c) in ordering sua sponte a remand based on a procedural defect in the removal from state court of an action alleging breach of contract and legal malpractice.

Areas of Law:
Civil Procedure

Issues Presented:
Whether the district court has jurisdiction to remand a case sua sponte to state court when there is a procedural defect but no timely motion for remand.

Brief Summary:
Contreras sued his former lawyer, Gruel, for breach of contract and legal malpratice based on Gruel's unsuccessful representation of Contreras in his immigration cases. Gruel did not file his notice of removal to federal court until well past the required 30-day period. Although Contreras had not moved to remand, the district court, on its own, remanded the case to state court. Upon de novo review by the appellate court, the panel ruled that the 30-day requirement for filing a notice of removal is procedural, not jurisdictional, and may be waived by the plaintiff's failure to move to remand. Because Contreras did not move to remand, he waived the procedural defect and the district court lacked the authority to remand the case sua sponte to state court.

Significance:
Failure to file a notice of removal within the 30-day period required by 28 U.S.C. 1446(b) is merely a procedural, and not jurisdictional, defect which is waived by the plaintiff's failure to file a motion to remand. In the absence of a motion to remand, the district court lacks the authority to remand sua sponte the case to state court.

Extended Summary:
Gruel represented Contreras in unsuccessful appeals to the Board of Immigration Appeals and, subsequently to the Ninth Circuit. Contreras then retained new counsel and sued Gruel for breach of contract and legal malpractice. While the complaint stated Contreras's residence is in San Lorenzo, California, it did not state his immigration status or citizenship. Almost a year after the complaint was filed, Gruel filed a notice of removal to federal court based on diversity jurisdiction upon discovering Contreras was not a U.S. citizen and that damages exceeded $75,000. Contreras did not file a motion to remand and otherwise made no objection to removal. However, at the case management conference, the judge remanded the case to state court because removal did not occur until almost one year after the filing of the complaint, well past the required 30-day period.

The panel first addressed whether it had jurisdiction to hear the appeal. In order to determine its appellate jurisdiction, the panel held that it had to rule on the merits of the appeal since its appellate jurisdiction turned on whether the district court did or did not have the authority to remand the case. Reviewing de novo the district court's decision to remand sua sponte the case based on Gruel's failure to file the notice of removal by the 30-day deadline, the panel ruled that the time limits for removal under 28 U.S.C. section 1446(b) are procedural rather than jurisdictional and, therefore, may be waived. Although jurisdictional defects are not waivable, the panel found that the district court had original jurisdiction to hear this case between a citizen of a State and a citizen of a foreign state where the matter in controversy allegedly exceeded $75,000. Accordingly, the panel held: "Because the district court remanded for a procedural defect, and because procedural defects are waivable, the district court lacked authority to remand in the absence of a timely motion by Contreras. "

To read the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...17/05/26/15-16783.pdf

Panel:
Stephen Reinhardt and Marsha S. Berzon, Circuit Judges, and Ann D. Montgomery, * District Judge

Argument Date:
April 17, 2017

Date of Issued Opinion:
May 26, 2017

Docket Number:
15-16783

Decided:
Vacated and remanded.

Case Alert Author:
Krysta Maigue

Counsel:
Jason T. Campbell (argued), San Francisco, California; Paul H. Nathan, San Francisco, California for Defendant-Appellant.
Barry K. Tagawa (argued), San Francisco, California, for Plaintiff-Appellee

Author of Opinion:
Judge Ann. D. Montgomery

Case Alert Supervisor: Professor Glenn S. Koppel

    Posted By: Glenn Koppel @ 08/24/2017 06:57 PM     9th Circuit     Comments (0)  

March 29, 2017
  Koby v. Helmuth - Ninth Circuit
Headline: The Ninth Circuit panel held that a magistrate judge was not required to obtain consent from four million class members before approving a class action settlement, but also held that the magistrate judge abused her discretion by approving the settlement because there was no evidence that the injunctive relief afforded by the settlement had any value to the class members, yet to obtain it they had to relinquish their right to seek damages in any other class action.

Areas of Law: Federal Rules of Civil Procedure 23(e)(2), 28 United States Code § 363(c), Article III and Due Process Clause of United States Constitution

Issues Presented:
(1)(a) Whether 28 U.S.C. § 363(c) required the magistrate judge to obtain the consent of the four million class members before entering final judgment, and (b) whether not requiring the class members' consent would violate their Article III rights.
(2) Whether the magistrate judge abused her discretion in applying the FRCP 23(e)(2) "fairness" standard, when she approved a settlement which gave the unnamed plaintiffs nothing of value.

Brief Summary: After the parties engaged in settlement discussions for with the assistance of a magistrate judge, the named plaintiffs eventually consented to having the same magistrate judge conduct all further proceedings in the case, including the entry of final judgment, without the consent of the four million class members.. The district court entered an order authorizing the magistrate judge to exercise jurisdiction over the case, and she presided over all further proceedings. Under the terms of the settlement agreement ultimately reached, the parties agreed to seek certification of a nationwide, settlement-only class under Federal Rule of Civil Procedure 23(b)(2). The magistrate judge approved the settlement, without consent of the class members. The settlement gave the class members' monetary reward to a San Diego veterans charity, as well as injunctive relief rendered ineffective by an escape clause. The panel held that the magistrate had authority to enter judgment under 28 U.S.C. § 363(c) with only the consent of the named plaintiffs. The panel also found the settlement terms approved by the magistrate to be unfair to the class members under FRCP 23(e)(2), because the relief offered was of no real value them but only to the named plaintiffs and the class counsel.

Significance: 28 U.S.C. § 363(c) authorizes magistrate judges, "pon the consent of the parties," to "conduct any or all proceedings in a jury or nonjury civil matter and order the entry of judgment in the case, when specially designated to exercise such jurisdiction by the district court or court she serves." § 363(c)(1). The panel held that, in a settlement class action, "consent of the parties" does not include unnamed plaintiffs, but requires the consent of the named plaintiffs only. The panel also held that the magistrate judge abused her discretion in approving the class action settlement because the injunctive relief and cy pres damages did not benefit the unnamed plaintiffs. Thus, "ecause the settlement gave the absent class members nothing of value, they could not fairly or reasonably be required to give up anything in return."

Extended Summary: In 2009, Michael Koby, Michael Simmons, and Jonathan Supler brought a class action lawsuit against ARS National Services, Inc. ("ARS"), a debt collection agency, for violation of the Fair Debt Collection Practice Act ("FDCPA"). The named plaintiffs sued on behalf of a class of four million people across the U.S. who had been targets of ARS voicemails which violated the FDCPA.
Over the course of more than a year, the parties engaged in settlement discussions with the assistance of a magistrate judge. The named plaintiffs and ARS eventually consented to having the same magistrate judge conduct all further proceedings in the case, including the entry of final judgment. The district court entered an order authorizing the magistrate judge to exercise jurisdiction over the case, and she presided over all further proceedings.

Under the terms of the settlement agreement, the parties agreed to seek certification of a nationwide, settlement-only class under Federal Rule of Civil Procedure 23(b)(2). Because the class would be certified under Rule 23(b)(2), the parties agreed that no notice of any kind would be sent to the four million class members and that no one would be permitted to opt out of the class. ARS agreed to pay the maximum amount of damages allowed by FDCPA for both named and unnamed plaintiffs. The named plaintiffs received $1,000 each, and the unnamed plaintiffs got $35,000 total. The magistrate found that distributing the relief to four million unnamed plaintiffs would be impossible, as the reward would be less than a penny per class member. Instead, ARS agreed to give the unnamed plaintiffs' award as a cy pres donation to a San Diego veterans' charity organization. The settlement terms also enjoined ARS from reverting back to practices which violated the FDCPA in the agreement, though this term included an escape clause and ARS had already changed its procedures to conform to standards.

After conducting a fairness hearing at which Helmuth's counsel, ARS's counsel, and class counsel presented argument, the magistrate judge certified the proposed class under Rule 23(b)(2), approved the settlement as fair, reasonable, and adequate under Rule 23(e)(2), and entered judgment accordingly. Bernadette Helmuth, a class member, is an unnamed plaintiff who would be bound by the settlement agreement. She also happened to be a named plaintiff in a separate class action suit awaiting formal class certification against ARS, for the same violations of FDCPA, in the Southern District of Florida. Helmuth filed an objection to stay the settlement between ARS and Koby et. al., but the objection was denied.

The magistrate entered final judgment. Helmuth appealed, raising the following issues issues: First, whether requiring only the consent of the named plaintiffs, and not the four million class members, for the magistrate to be authorized to conduct the proceedings is permitted under 28 U.S.C § 363(c) and Article III of the U.S. Constitution. Second, whether the magistrate judge abused her discretion by applying the FRCP 23(e)(2) "fairness" standard, when she approved a settlement which gave the unnamed plaintiffs nothing of value.

The panel held that a magistrate only needs consent from named plaintiffs in a class action lawsuit under § 363(c). The language of the statute gives a magistrate authority to enter judgment on a class action lawsuit only if "the parties" consent; however it does not specify which parties in a class action lawsuit.
The panel pointed to the language and legislative intent of § 363(c) to find that consent of "the parties" constitutes only consent of parties involved in making litigation strategy decisions, such as the named plaintiffs in a class action lawsuit. § 363(c)(1) requires a court clerk to "notify the parties of the availability of a magistrate judge," which would be reasonable if the legislature meant to apply only to named plaintiffs. If "parties" were interpreted to include unnamed plaintiffs, § 363(c)(1) would require a clerk to somehow notify millions of unnamed plaintiffs, which is an unnecessary and unreasonable burden to impose on the courts. It would also be unreasonable to require the magistrate to seek consent from four million unnamed plaintiffs under § 363(c). Accordingly, the panel held "the parties" of § 363(c) was intended only to apply to named plaintiffs, and that the magistrate judge was required to get consent from only named plaintiffs.

Additionally, the panel noted that this interpretation of § 363(c) is consistent with FRCP 23 which necessarily limits consent requirements to named plaintiffs because, by its very nature, a class action lawsuit requires the named plaintiffs to make litigation decisions on behalf of unnamed plaintiffs. So, it could be said that not requiring unnamed plaintiffs' consent under § 363(c) is par for the course.

The Supreme Court has held that litigants in federal court have a personal right, under Article III, to adjudication of their claims by a judge who enjoys the salary and tenure protections afforded by Article III - protections that magistrate judges lack. But the panel further noted that the personal right to an Article III adjudicator may be waived, and a party's express or implied consent to adjudication by a magistrate judge constitutes a valid waiver of the right. Therefore, Article III does not categorically prohibit the named plaintiffs from waiving, on behalf of the class members they represent, the right to proceed before an Article III judge. Since the interests of a class representative must be found to be typical of the class members, the named plaintiffs can therefore be expected to protect the absent class members' interests in the exercise of the right conferred by Article III. The panel further held that "[l]imits imposed by the Due Process Clause on the enforcement of class judgments do not curtail a magistrate judge's authority under § 636(c) to enter judgment in the first instance - a judgment that at the very least will bind the named parties who consented to the magistrate judge's jurisdiction."

The panel went on to hold that the magistrate judge abused her discretion in applying the FRCP 23(e)(2) "fairness" standard, when she approved a settlement which gave the unnamed plaintiffs nothing of value. The panel found that the settlement agreement did not align with the interests of the class members and, thus, was an abuse of discretion by the magistrate to approve it.
ARS agreed to give a cy pres donation to a veterans' charity. The panel cited Nachsin v. AOL to show that cy pres donations must be "tethered to the objectives/interests" of unnamed plaintiffs. The magistrate was not offered any evidence which showed the chosen charity had any "nexus" to the class members. In fact, the four million unnamed plaintiffs, who are spread throughout the nation, had no geographic connection to the San Diego veteran charity's location.

Furthermore, the magistrate was never shown that a disproportionate amount of the class members were veterans. Thus, the magistrate entered judgment despite zero evidence that the cy pres donation had value to the unnamed plaintiffs.
The panel further found that "[t]he fact that class members were required to give up anything at all in exchange for worthless injunctive relief precluded approval of the settlement as fair, reasonable, and adequate under Rule 23(e)(2)."

Because the settlement agreement did not offer anything of value to unnamed plaintiffs, the magistrate abused her discretion by entering her final judgment. The panel reversed and remanded the terms of the settlement agreement.
To read the full opinion, please visit: "><br ">http://...../da...3-56964.pdf


Panel: Paul J. Watford and Michelle T. Friedland, Circuit Judges, and J. Frederick Motz, District Judge for the U.S. District Court for the District of Maryland, sitting by designation.
Argument Date: January 7, 2016
Date of Issued Opinion: January 25, 2017
Docket Number: 13-56964
Decided: Reversed and Remanded
Case Alert Author: Devin Bruen
Counsel: Jonathon Taylor (argued) and Deepak Gupta, Gupta Beck PLLC, Washington, D.C.; Donald A. Yarbrough, Fort Lauderdale, Florida; Steven M. Bronson, The Bronson Firm APC, San Diego, California; for Objector-Appellant.
Philip D. Stern (argued), Union, New Jersey; Robert E. Schroth, Sr. and Robert E. Schroth, Jr., Schroth & Schroth, San Diego, California, for Plaintiffs-Appellees.
Sean P. Flynn (argued), Gordon & Rees Scully Mansukhani, Irvine, California; David L. Hartsell, McGuire Woods LLP, Chicago, Illinois; for Defendant-Appellee.
Brian Wolfman, Institute for Public Representation, Georgetown University Law Center, Washington D.C.; Ira Rheingold, National Association of Consumer Advocates, Washington, D.C.; for Amicus Curiae National Association of Consumer Advocates.
Author of Opinion: Judge Paul J. Watford
Circuit: Ninth
Case Alert Supervisor: Glenn S. Koppel

Edited: 04/04/2017 at 03:20 PM by Glenn Koppel

    Posted By: Glenn Koppel @ 03/29/2017 07:50 PM     9th Circuit     Comments (0)  

March 9, 2017
  Saleh v. Bush - Ninth Circuit
Headline: Ninth Circuit panel holds that Westfall Act provides immunity from liability under the Alien Tort Statute to high ranking Bush Administration officials.

Areas of Law: Westfall Act, Immunity of Government Officials

Issues Presented: (1) Whether the Westfall Act provides absolute immunity to government officials for alleged violations of the Alien Tort Statute. (2) Whether Congress can grant immunity from liability to federal officials for a jus cogens violation.

Brief Summary: Appellant Sundus Shaker Saleh ("Saleh") filed a class action lawsuit against a number of Bush Administration officials ("Appellees"), alleging that they conspired to wage a war of aggression against Iraq, a violation of the "law of nations" under the Alien Tort Statute. Pursuant to the Westfall Act, the district court substituted the United States as the only defendant and dismissed the case due to Saleh's failure to exhaust administrative remedies as prescribed by the Federal Tort Claims Act. Saleh appealed, arguing that Appellees did not enjoy immunity under the Westfall Act and, even if they did, Congress cannot grant immunity to officials for a jus cogens violation. The Ninth Circuit panel affirmed the district court's decision to dismiss the case.

Significance: The Westfall Act provides immunity to federal government officials for claims arising from actions they performed in the course of their employment, even if those actions violate international law.

Extended Summary: In 2003 Kurdish Army troops allied with the United States and participating in the Iraq war allegedly forced Saleh and members of her family to leave their home and relocate to Jordan. She filed a class action lawsuit representing "all innocent Iraqi civilians who, through no fault of their own, suffered damage" as a result of the Iraq war. Her complaint alleged that Appellees, high ranking members of the Bush Administration, began planning an invasion of Iraq as early as 1997 and that they used the September 11, 2001 terrorist attacks as a pretext to convince the public and Congress of the need to launch the war on Iraq. Saleh alleged that Appellees often used fabricated information to support their position. The complaint claimed Appellees were liable under the Alien Tort Statute for an alleged violation of the "law of nations."

The United States filed a certification that Appellees were acting within the scope of their employment. The district court agreed and substituted the United States as the only defendant. The court then dismissed Saleh's suit without prejudice, finding that she failed to exhaust her administrative remedies as mandated by the Federal Tort Claims Act. Saleh then filed an amended complaint. The district court again substituted the United States and then dismissed the lawsuit with prejudice. Appellee moved for an evidentiary hearing to contest the certification that Appellees were acting within the scope of their employment but the district court denied the motion. This appeal followed.

The Ninth Circuit panel affirmed the district court's decision that Appellees were entitled to immunity under the Westfall Act and that the United States was the only proper defendant. The Westfall Act grants federal officials absolute immunity for torts committed in the course of their employment. The Act requires courts to employ the principles of respondeat superior in the state where an alleged tort occurred to determine the scope of employment inquiry. The policy behind this grant of immunity is to prevent the fear of potential litigation from affecting the decision making process of those involved in government. Under the Westfall Act, an official who is sued and believes he is entitled to immunity is instructed to forward all documents served to him to his supervisor who then must give copies to the United States Attorney General. The Attorney General investigates the matter and makes a determination as to whether the sued government official was working within the scope of his employment. If the determination is made that he was, the Attorney General issues a scope certification which changes the action against the government official into one against the United States and precludes any other civil action against the government official.

Saleh asserted two arguments to support her claim that Appellees were not working within the scope of their employment when they conspired to make war against Iraq. The first was that the preparation for the war began before the Appellees took office as government officials, the attack was incited by personal motives, and Appellees were not employed to start an illegitimate war. The second was that immunity under the Westfall Act must be analyzed in light of the treaty obligations of the United States.

The panel rejected both arguments. It applied District of Columbia respondeat superior principles to find Appellees' actions were committed within the scope of their employment as the Iraq war did not begin until after Appellees took office. Appellees' actions promoting the war prior to their taking office was not planning for the war, but merely advocacy. The panel further found Saleh's claim that the motives for the war were personal was not supported by the factual allegations in her complaint. Finally, the panel held that, as members of the Executive Branch of government, Appellees were authorized to act to ensure national security and as such their actions fell within their official duties. As for Saleh's second argument, the Ninth Circuit panel noted that the case she relied on was not instructive because the scope of employment test used there was created by international law and not one of a domestic nature as in this case. Further, the panel noted that the unambiguous language of the Westfall Act evidences Congress's specific intent to grant immunity to federal officers.

The Ninth Circuit panel also rejected Saleh's contention that the district court erred in denying her motion for an evidentiary hearing to challenge the scope certification by the Attorney General. The panel reasoned that because the allegations in Saleh's complaint viewed in the light most favorable to her were not enough to show that Appellees had acted outside the scope of their employment, such a hearing was unnecessary.

Finally the panel also rejected Saleh's argument that Congress cannot provide immunity to a federal government official for violations of a jus cogens norm of international law. A jus cogens norm is a norm acknowledged by international law from which no derogation is permitted. Without deciding whether the prohibition of aggression is a jus cogens norm, the panel concluded that Saleh's argument conflicted with United States case law. Precedent cases dealing with sovereign immunity of officials reveal that Congress can provide immunity to foreign government officials despite inconsistencies with international law. This precedent supported the conclusion that Congress can do the same for federal officers when they violate jus cogens norms.

To read the full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...17/02/10/15-15098.pdf

Panel: Susan P. Graber and Andrew D. Hurwitz, Circuit Judges, and Richard F. Boulware, District Judge (sitting by designation)

Argument Date: December 12, 2016

Date of Issued Opinion: February 10, 2017

Docket Number: 15-15098

Decided: Judgment affirmed.

Counsel: Dave Inder Comar (argued), Comar Law, San Francisco, California, for Plaintiff-Appellant.

Patrick G. Nemeroff (argued), and Matthew M. Collette, Attorneys, Appellate Staff; Melinda Haag, United States Attorney; Benjamin C. Mizer, Principal Deputy Assistant Attorney General; Civil Division, United States Department of Justice, Washington D.C.; for Defendants-Appellees.

Jerome Paul Wallingford, San Diego, California, for Amicus Curiae Lawyers for International Law.

Rajeev E. Ananda, New York, New York, for Amicus Curiae Planethood Foundation.

Author of Opinion: Judge Graber

Circuit: Ninth Circuit

Case Alert Author: Maria Vittoria

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 03/09/2017 01:42 PM     9th Circuit     Comments (0)  

March 8, 2017
  United States v. Williams
Headline: Ninth Circuit panel affirms a suppression order when a criminal defendant invoked his Miranda rights and the government subsequently attempted to use unadmonished responses to a jail official's questions about the defendant's gang affiliation at trial.

Areas of Law: Criminal Law, Constitutional Law, Miranda Warnings.

Issue Presented: Whether the government may introduce evidence of a defendant's gang affiliation obtained through unadmonished questioning of defendant by a jail official after defendant asserted his Miranda rights.

Brief Summary: Appellee was initially charged with murder and other offenses in state court. When police attempted to interrogate him, he immediately invoked his Miranda rights. Later, a deputy sheriff handling the booking process asked him whether he had gang affiliations. Appellant responded in the affirmative. Appellee was later charged with numerous RICO offenses, and the United States attempted to use Appellee's booking statement in its case-in-chief. The district court issued an order suppressing the evidence. The government appealed, arguing the response fell under either the "booking exception" or the "public safety exception" to the Miranda warnings. The Ninth Circuit panel affirmed the district court ruling.

Significance: Once a criminal defendant invokes his Miranda rights, the government cannot use his responses to unadmonished questions regarding gang affiliation in its case-in-chief, even if the questions are part of routine booking procedures or related to promoting safety in jails.

Extended Summary: State authorities arrested Appellee for the murder. Homicide detectives advised him of his Miranda rights and attempted to interrogate him, but he explicitly invoked his right to an attorney. Appellee was later taken to a county jail. The deputy sheriff handling the booking process asked him if he was a gang member, and Appellee responded, "Yeah, I hang out there, put me where I'm from." The deputy entered the response on forms used by jail officials in determining where to house inmates. The forms designate any gang affiliation and reflect whether a prisoner presents "High Risks." The deputy reported Appellee's gang affiliation and marked "Gang Member" on the list of "High Risks."

Appellee was initially charged in state court with murder and other crimes. Later, the state charges were dismissed and he was indicted by a federal grand jury and charged with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(d); murder in aid of racketeering, 18 U.S.C. §1959(a)(1); and firearms offenses. The United States wished to use Appellee's statements of gang membership to satisfy an important element to the RICO charge: membership in a RICO enterprise. Appellee moved to suppress the statements, the district court granted the motion, and the United States appealed.

The Ninth Circuit panel began its analysis by citing the iconic rule of Miranda v. Arizona which holds that once a defendant indicates in any manner and at any stage of the process that he wishes to consult with an attorney before speaking there can be no questioning. 384 U.S. 436, 444-45 (1966). The panel also recognized, however, that there are exceptions to the rule, and discussed two exceptions the "booking questions exception" and the "public safety exception," ones that the government argued applied in this case.
The government asserted that the booking exception applied because the deputy sheriff who asked questions regarding gang affiliation could not have known the responses would be incriminating as no gang-related charges were pending at the time. The panel rejected this argument, holding that the issue is whether a booking question was reasonably likely to elicit an incriminating response in light of all the circumstances. The test is an objective one and the subjective intent of the officer is relevant but not conclusive. United States v. Washington, 462 F.3d 1124 (9th Cir. 2006). In this case, the absence of gang charges did not mean admission of gang affiliation could not be incriminating. The panel cited the California Supreme Court's decision in People v. Elizalde, which found that gang membership exposes a defendant to "a comprehensive scheme of penal statutes aimed at eradicating criminal activity by street gangs." 61 Cal. 4th 523, 538 (2015). The panel determined that questions about Appellee's gang affiliation were reasonably likely to elicit an incriminating response even though the federal RICO charges had not yet filed because it could have exposed him to even more charges under both California and federal laws.

The government also argued that the public safety exception to Miranda does not require adherence to the warnings when there is an "objectively reasonable need to protect the police or public from any immediate danger." United States v. Carrillo, 16 F.3d 1046, 1049 (9th Cir. 1994). The United States claimed the deputy sheriff asked questions regarding gang affiliation in the interests of inmate safety. The Ninth Circuit panel rejected this argument as there was no need to protect the deputy or others against immediate danger.

Dissent: Senior Circuit Judge Kleinfeld dissented, writing that both the booking exception and the public safety exception applied because the deputy sheriff asked questions regarding gang affiliation for the purpose of separating gang members from one another and protecting inmates from jail house violence.


To real the full opinion, please visit: https://cdn.ca9.uscourts.gov/datastore/opinions/2016/12/05/15-10475.pdf

Panel: Andrew J. Kleinfeld, Johnnie B. Rawlinson, and Andrew D. Hurwitz, Circuit Judges.

Argument Date: March 16, 2016

Date of Issued Opinion: December 5, 2016

Docket Number: 15-10475

Decided: Affirmed

Case Alert Author: Kyle Case

Counsel: Ann M. Voigts (argued), Assistant United States Attorney; Barbara J. Walliere, Chief, Appellate Division; Brian J. Stretch, United States Attorney; United States Attorney's Officer, San Francisco, California; for Plaintiff-Appellant
Mark Stuart Goldrosen (argued), San Francisco, California for Defendants-Appellees

Author of Opinion: Judge Hurwitz

Circuit: Ninth

Case Alert Supervisor: Professor Philip L. Merkel

    Posted By: Glenn Koppel @ 03/08/2017 07:17 PM     9th Circuit     Comments (0)  

  Silvester v. Harris
Headline: Ninth Circuit panel applies intermediate scrutiny standard in upholding California's waiting period law as relates to firearms purchasers who previously passed background checks.

Areas of Law: Constitutional Law; Second Amendment Rights; Waiting Period Laws

Issues Presented: The panel considered whether California's 10-day waiting period to take possession of any firearm violated the Second Amendment rights of subsequent purchasers where those purchasers passed the required background checks in less than the required 10-day wait period.

Brief Summary: The panel applied intermediate scrutiny in this case of first impression. The 10-day waiting period, as applied to three specified classes of "subsequent purchasers," was found to reasonably fit the State's important interest in promoting safety and requiring a cooling-off period to deter violence resulting from impulsive purchases of firearms.

Significance: The Supreme Court expressly left undecided the determination of the level of scrutiny applied to laws or regulations relating to individual rights under the Second Amendment. The Ninth Circuit panel determined that intermediate scrutiny should be applied to regulations which do not substantially burden the Second Amendment.

Extended Summary: This case involved a challenge to California's required 10-day wait period between the purchase and receipt of any firearm as it applied to purchasers belonging to specified classes. The 10-day waiting period was not challenged in its entirety. Instead, the challenge was limited to how it applied to three classes of purchasers. The first class of purchasers included individuals who have previously registered a firearm in the Automated Firearms System (AFS) database. The second class consisted of those purchasers with a concealed weapons permit. The final class included those purchasers who possessed a "certificate of eligibility" (COE) in the AFS. Plaintiffs did not assert that belonging to one of these classes meant they should receive the weapon on the same day as a purchase, but rather if their application was processed faster than 10 days and the purchaser was part of one of these three classes, then they should receive the weapon prior to the end of the 10-day wait period.

The district court applied intermediate scrutiny and found in favor of the plaintiffs, holding that the State's interest in a 10-day cooling off period did not justify denying the receipt of a firearm to purchasers belonging to these three classes where their applications were processed faster than ten days. The State appealed.

The panel's decision and reasoning stemmed from the Supreme Court's decision in District of Columbia v. Heller, 554 U.S. 570 (2008). In Heller, the District of Columbia banned all handguns and operable hunting rifles in the home. This case laid out the analysis required in a Second Amendment challenge. First, there must be a determination of whether the regulation is within the scope of the Second Amendment right. Next, the regulation must survive the appropriate level of scrutiny. However, the question as to what level of scrutiny should be applied was left unanswered, as the regulation in Heller would not have passed any level of scrutiny because it placed too heavy of a burden on the right to self-defense. The only determination made regarding the level of scrutiny was the express rejection of the rational basis standard of review.

The Supreme Court's decision to leave the standard of review open to either strict scrutiny or intermediate scrutiny led the panel to examine Ninth Circuit law that has developed since the decision in Heller. The two-step test of Heller has been consistently used with the second step requiring a determination of the level of scrutiny applicable. In Jackson v. City & County of San Francisco, the Ninth Circuit stated that a determination of the level of scrutiny requires consideration of: "(1) how close the challenged law comes to the core of the Second Amendment right, and (2) the severity of the law's burden on that right." 746 F. 3d at 960-61 (9th Cir. 2014). This established three types of categories in which a law may fall: (1) the law will be unconstitutional on any level of review; (2) met with strict scrutiny; or, (3) met with intermediate scrutiny depending upon the severity of the burden it imposes upon the Second Amendment right. A law falls into the first category will be unconstitutional under any level of review. A regulation falls within the second category where it places a substantial burden on Second Amendment rights. If the regulation falls in some other category, then it shall be met with intermediate scrutiny.

Intermediate scrutiny requires a determination of whether the regulation "reasonably fits" with an important governmental interest. A determination of an important governmental interest can be identified by looking to the history and operation of the California law. The history of the waiting period for firearms purchases began in 1923 and has been in continuous existence since. Waiting period laws began as a ban on certain firearms from being delivered on the day of the purchase. In addition to the waiting period, the law created the Dealer Record of Sale (DROS), which is presently used electronically. Throughout the history of the waiting period, it has been extended up to as long as fifteen days. The extensions were reflective of the State's need to conduct more extensive background checks and were only reduced when technology permitted faster processing. The 1996 reduction of wait period time to ten days included a legislative explanation for the waiting period laws. The governmental interests asserted were: (1) the time required to conduct a proper background check, and (2) the need for a "cooling off" period.

The panel applied the two-step test for intermediate scrutiny to the waiting period law. There must be important governmental objectives behind the law, and the law must be reasonably suited to achieve those objectives. It was uncontested that the State's interests in promoting safety and reducing gun violence were important. The dispute was over whether the 10-day waiting reasonably fit those objectives. The panel concluded there was a reasonable fit because the waiting period allowed for background checks to be properly conducted and created a cooling-off period even for those purchasers who already owned a firearm. For these reasons, the 10-day waiting period for these classes of purchasers was held to be constitutional.


To read the full opinion, please visit: https://cdn.ca9.uscourts.gov/datastore/opinions/2016/12/14/14-16840.pdf

Panel: Sidney R. Thomas, Chief Judge, and Mary M. Schroeder and Jacqueline H. Nguyen, Circuit Judges.

Argument Date: February 9, 2016

Date of Opinion: December 14, 2016

Docket Number: 14-16840

Decided: Reversed the judgment of the district court's bench trial in favor of plaintiffs-appellees. Remanded the case to the court for an entry of judgment in favor of defendant-appellant, the State of California.

Case Alert Author: Greyson Morain

Counsel: Jonathan M. Eisenberg (argued) and Peter H. Chang, Deputy Attorneys General; Mark R. Beckington, Supervising Deputy Attorney General; Douglas J. Woods, Senior Assistant Attorney General; Kamala D. Harris, Attorney General; Office of the Attorney General, San Francisco, California; for Defendant-Appellant.

Bradley A. Benbrook (argued) and Stephen M. Duvernay, Benbrook Law Group PC, Sacramento, California; Donald E.J. Kilmer, Jr., Law Offices of Donald Kilmer, San Jose, California; Victor J. Otten, Otten Law PC, Torrance, California; for Plaintiffs-Appellees.

Anna M. Barvir, Clinton B. Monfort, and C.D. Michel, Michel & Associates PC, Long Beach, California, for Amici Curiae California Rifle and Pistol Association and Gun Owners of California.

Jeremiah L. Morgan, John S. Miles, William J. Olson, Robert J. Olson, and Herbert W. Titus, William J. Olson P.C., Vienna, Virginia; for Amici Curiae Gun Owners of America, Inc., Gun Owners Foundation, U.S. Justice Foundation, The Lincoln Institute for Research and Education, The Abraham Lincoln Foundation for Public Policy Research, Inc., Institute on the Constitution, and Conservative Legal Defense and Education Fund.

Michael Connelly, Ramona, California, as and for Amicus Curiae U.S. Justice Foundation.

George M. Lee, Seiler Epstein Ziegler & Applegate LLP, San Francisco, California; John R. Lott, Jr., Ph.D., Crime Prevention Research Center, Swarthmore, Pennsylvania; for Amicus Curiae Crime Prevention Research Center.

Marienne H. Murch, Rebecca A. Jacobs, and Simon J. Frankel, Covington & Burling LLP, San Francisco, California, for Amicus Curiae The Law Center to Prevent Gun Violence.

Jonathan E. Taylor and Deepak Gupta, Gupta Beck PLLC, Washington, D.C., for Amicus Curiae Everytown for Gun Safety.

David Skaar and Anthony Basich, Hogan Lovells US LLP, Los Angeles, California; Jonathan E. Lowry, Brady Center to Prevent Gun Violence - Legal Action Project, Washington, D.C.; for Amicus Curiae Brady Center to Prevent Gun Violence.

Author of Opinion: Judge Schroeder

Concurrence: Chief Judge Thomas

Circuit: Ninth Circuit

Case Alert Supervisor: Professor Philip L. Merkel

    Posted By: Glenn Koppel @ 03/08/2017 07:15 PM     9th Circuit     Comments (0)  

  Marilley v. Bonham
Headline: The Ninth Circuit, sitting en banc, holds that California's differential fees imposed on nonresident commercial fishers do not violate the Privileges and Immunities Clause or Equal Protection Clause.
Areas of Law: Constitution, Privileges and Immunities, Equal Protection, Commercial Fishing
Issue Presented: Whether differential fees charged by California to nonresident commercial fishers violates the Privileges and Immunities Clause or Equal Protection Clause when California uses the differential fees to compensate the State for the annual shortfall of roughly $14 million suffered by the California Department of Fish and Game to manage its commercial fishery and that shortfall is paid by California taxpayers.
Brief Summary: California charges nonresident commercial fishers a differential fee for commercial fishing licenses. However, for many years, California has operated its commercial fishery at a substantial loss. In fiscal year 2010-11, California spent roughly $20 million in managing its commercial fishery, yet it only received about $5.8 million in fees - including fees by both residents and nonresidents. This approximately $14 million deficit was paid for by California tax payers.
The Ninth Circuit held that the differential fees charged to nonresidents are justified under the Privileges and Immunities Clause because the differential fees are closely related to a substantial state interest which is to recover the state's expenditures in managing its commercial fishery that is attributable to the nonresidents. This is a deficit that would otherwise be covered by California's taxpayers. The Court also held the differential fees do not violate the Equal Protection Clause.
Significance: A state may collect compensation from nonresidents or exclude the nonresidents from the benefits when the state makes expenditures from a fund to which nonresidents do not contribute and the state provides a benefit by that expenditure to both residents and nonresidents. A state may not exclude nonresidents from access to a natural resource, but may pursue reimbursement for funds spent on managing and preserving the resource.
Extended Summary: California charges nonresident commercial fishers a differential fee for commercial fishing licenses. Beginning in 1986, California has charged nonresidents a higher fee than its residents for commercial fishing licenses, registrations, and permits, and subsequently began charging nonresidents more than residents for herring gill net permits, commercial vessel registrations, and Dungeness crab permits.
However, for many years, California has operated its commercial fishery at a substantial loss. In 2010-11, California spent roughly $20 million in managing its commercial fishery, yet it only received about $5.8 million in fees - including fees paid by both residents and nonresidents. This approximately $14 million shortfall was covered by California tax payers.
The Plaintiffs are a class of nonresident commercial fishers who engage in commercial fishing in California. They brought a class action in the district court against the Director of California's Department of Fish and Game, challenging the differential fees it charges to nonresidents under the Privileges and Immunities Clause, the Dormant Commerce Clause, and the Equal Protection Clause of the United States Constitution. They later voluntarily withdrew their Dormant Commerce Clause claim. The district court granted summary judgment for the plaintiffs based on their Privileges and Immunities claim. The Ninth Circuit, sitting en banc, reversed.
The Ninth Circuit referred to Toomer v. Witsell, 334 U.S. 385 (1948) and Mullaney v. Anderson, 342 U.S. 415 (1952) as authority for holding, "a state may charge differential fees to nonresident commercial fishers in order to recover the state's expenditures in enforcement and conservation measures that are attributable to the nonresidents."
California operates its commercial fishery at an annual cost of approximately $20 million, and it receives only about $6 million in fees collected from both residents and nonresidents. This shortfall of roughly $14 million is a subsidy or benefit conferred to both resident and nonresident commercial fishers paid for by California taxpayers.
Because 12% of all commercial fishers in fiscal year 2010-11 were nonresidents, and 12% of the $5,341,000 subsidy that went to all commercial fishers is approximately $641,000, California could have charged nonresidents up to that amount as their proportionate benefit received from California's general fund. Because nonresident commercial fishers paid a total of $435,000 in fee differentials which is significantly less than their proportionate share of the subsidy or benefit provided to them by California, the Ninth Circuit held that the differential fees are justified by the state and therefore permitted under the Privileges and Immunities Clause.
The Ninth Circuit also dismissed the claim under the Equal Protection Clause by applying a rational basis standard because commercial fishing fee differentials do not warrant a higher level of scrutiny. The Court held that California's interest in receiving compensation for the benefits it provides to nonresidents is sufficiently a rational basis for the fee differentials.
Dissent: The dissenting opinions argued that there are unnamed class members that paid substantially more in California income taxes than the named plaintiffs, an argument raised by the plaintiffs for the first time during oral argument to the en banc panel. Based on this rationale, the dissenting opinions argued that the out-of-state commercial fishers should be protected under the Privileges and Immunities Clause from having to pay the differential fees.

To read the full opinion, please visit: https://cdn.ca9.uscourts.gov/datastore/opinions/2016/12/21/13-17358.pdf
En Banc Panel: Sidney R. Thomas, Chief Judge, and Stephen Reinhardt, Kim McLane Wardlaw, William A. Fletcher, Marsha S. Berzon, Milan D. Smith, Jr., Mary H. Murguia, Jacqueline H. Nguyen, Andrew D. Hurwitz, John B. Owens, and Michelle T. Friedland, Circuit Judges
Argument Date: June 21, 2016
Date of Issued Opinion: December 21, 2016
Docket Number: No. 13-17358
Decided: Reversed and Remanded
Case Alert Author: Steve Kim
Counsel: M. Elaine Meckenstock (argued) and Gary Alexander, Deputy Attorneys General; Annadel A. Almendras, Supervising Deputy Attorney General; Robert W. Byrne, Senior Assistant Attorney General; Kamala D. Harris, Attorney General; Office of the Attorney General, Oakland, California; for Defendant-Appellant
Stuart G. Gross (argued) and Jared M. Galanis, Gross Law, San Francisco, California; Todd R. Gregorian and Tyler A. Baker, Fenwick & West LLP, Mountain View, California; for Plaintiffs-Appellees
Author of Opinion: Judge Fletcher
Dissents: Judges Smith, Hurwitz, Owens, Reinhardt, and Berzon
Circuit: Ninth
Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 03/08/2017 07:11 PM     9th Circuit     Comments (0)  

March 3, 2017
  Briseno v. ConAgra Foods, Inc. - Ninth Circuit
Headline: Ninth Circuit panel holds FRCP Rule 23 does not require named plaintiffs to proffer an administratively feasible way to identify class members as a prerequisite for class certification.

Areas of Law: Civil Procedure, Class Actions

Issues Presented: Whether class representatives must demonstrate there is an "administratively feasible" means of identifying absentee class members to a class action lawsuit under Federal Rules of Civil Procedure ("FRCP") Rule 23.

Brief Summary: Plaintiff-Appellee Robert Briseno, the named plaintiff in a class action complaint, along with other class members, sued Defendant-Appellant ConAgra Foods, Inc. ("ConAgra") for state-law claims for damages arising from an alleged misrepresentation on Wesson cooking oil products that it sold and marketed as 100% natural. The district court certified the class action as a 23(b)(3) class and ConAgra timely appealed under FRCP Rule 23(f). ConAgra contended the class should not have been certified as a class action because class representatives did not demonstrate an administratively feasible way to identify other class members, defined as those who had purchased Wesson cooking products within the class period. A panel for the Ninth Circuit reviewed the text of FRCP Rule 23 and concluded that a showing of administrative feasibility is not a prerequisite for class certification under Rule 23(a). Accordingly, the panel joined the Sixth, Seventh and Eight Circuits in rejecting the Third Circuit's recognition of an administrative feasibility requirement, holding that the Third Circuit's policy concerns are addressed by the enumerated requirements within the rule itself and that the drafters and the Supreme Court did not intend for courts to add requirements to be assessed a vacuum.

Significance: When plaintiffs seek to certify a class action they are not required to provide an administratively feasible way to identify class members as a condition for class action certification under FRCP Rule 23. The Ninth Circuit panel joins the Six, Seventh, and Eighth Circuits in limiting the requirements of class action certification to those enumerated within the rule itself, and rejecting the Third Circuit's justification that administrative feasibility should be shown to make certain the class can function as a class.

Extended Summary: Defendant-Appellant ConAgra markets, manufactures, sells, and distributes Wesson food products to multiple states within the United States. Plaintiff-Appellee Robert Briseno and other class members argued that ConAgra misrepresented certain Wesson cooking oil products when it labeled them as 100% natural because the products contained (and still contain) bioengineered ingredients which make them unnatural. Plaintiffs asserted state-law claims against ConAgra and filed class action complaints in eleven states which were ultimately consolidated into this action. The district court held that defining class members as those who purchased Wesson oil during the class period sufficiently identified the class for class certification purposes, and it granted Plaintiff's motion to proceed with damages claims in eleven states under FRCP Rule 23(b)(3).
To obtain class certification, the four requirements of Rule 23(a) (numerosity, commonality, typicality, and adequacy of the class representative) and at least one requirement of Rule 23(b) must be met. ConAgra argued that, in addition to these enumerated requirements, class proponents must demonstrate that there is an administratively feasible way to determine who is in the class and that plaintiffs did not meet this additional requirement.
The Ninth Circuit panel used "traditional rules of statutory construction" to interpret the plain language of the Rule 23(a), which provides:
"One or more members of a class may sue or be sued as representative parties on behalf of all members only if:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class."
The panel concluded that drafters' enumeration of "prerequisites" implies that Rule 23(a) constitutes an exhaustive list reasoning that the drafters must have intentionally omitted anything they did not consider a true prerequisite for the class action to be certified. The Supreme Court also affirmed a close reading of Rule 23 text in Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) holding that "Federal courts . . . lack authority to substitute for Rule 23's certification criteria a standard never adopted." The panel found that imposing an additional showing of administrative feasibility would deviate from the Supreme Court's guidance.
The panel addressed and rejected the three rationales behind the Third Circuit's administratively feasible requirement (1) mitigating administrative burdens, (2) protecting bona fide and present class members from fraudulent claims, and (3) protecting due process rights of defendants.
The Third Circuit requires an administratively feasible means to identify class members because of the need to mitigate administrative burdens imposed when litigating a Rule 23(b)(3) class action which requires notice that a class has been certified and an opportunity for absent class members to withdraw from the class. However, the panel found that Rule 23(b)(3)'s manageability criterion of the superiority requirement, which specifically mandates that courts consider "the likely difficulties in managing a class action," already provides a specifically enumerated mechanism that addresses judicial efficiency and administrative burdens in managing class actions. Adopting a freestanding administrative feasibility requirement, instead of evaluating manageability as one component of the superiority requirement, would conflict with Rule 23(b)(3)'s call for a comparative assessment of the costs and benefits of class adjudication, including the availability of "other methods" for resolving the controversy, thereby inviting courts to consider the administrative burdens of class litigation "in a vacuum." The panel observed that the "authors of Rule 23 opted not to make the potential administrative burdens of a class action dispositive and instead directed courts to balance the benefits of class adjudication against its costs."
The panel did not find the Third Circuit's concern for providing individual notice to absentee class members compelling because neither Rule 23 nor due process requires actual notice to class members. The text of the rule requires individuals to be identified by reasonable effort and be provided with the best notice under the circumstances. The due process clause also allows for an alternative means of notice, such as publication, third party notice, and paid advertising. The risk that an absentee class member will not be notified and therefore not have the option to opt out, as required for a 23(b)(3) class action, is minimal because the types of actions that proceed as 23(b)(3) claims often involve low-value consumer products where individual recoveries are low and not likely to entice one to pursue individual litigation. Similarly, because recovery amounts tend to be low, it is unlikely individuals would submit illegitimate claims that could dilute the claims of legitimate claimants.
Finally, the Third Circuit's due process concern that defendants have an opportunity to dispute whether claimants actually bought their product is addressed by the fact that the defendant can raise damages issues at the certification stage, challenging the class plaintiff's Article III standing, and, if certification is granted, throughout the course of the litigation. . Furthermore, after the class action has been adjudicated, defendants will have the opportunity "to individually challenge the claims of absent class members if and when they file claims for damages." .
The panel further noted that "identification of class members will not affect a defendant's liability in every case." In this case, for example, where the aggregate damages are calculated by multiplying the price premium for the allegedly false statement on each unit sold by the total units sold during the class period, "the identity of particular class members does not implicate the defendant's due process interest at all" because adding and subtracting claimants does not change its aggregate liability.
The text of Rule 23 does not explicitly require nor does it imply that named plaintiffs must show an administratively feasible way to identify absent class members. The Third Circuit's policy arguments for imposing this additional requirement have already been addressed within the parameters of the rule itself. The district court did not error in its class certification of this action.
To read the full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...17/01/03/15-55727.pdf

Panel: William A. Fletcher, Morgan B. Christen, and Michelle T. Friedland, Circuit Judges.

Argument Date: September 12, 2016

Date of Issued Opinion: January 3, 2017

Docket Number: 15-55727

Decided: Affirmed. The district court did not error in deciding plaintiffs do not need to show an administratively feasible means of identifying class members as a condition for class certification.

Case Alert Author: Amanda Cline

Counsel: Angela Spivy (argued), McGuireWoods LLP, Atlanta Georgia; R. Trent Taylor, McGuireWoods LLP, Richmond, Virginia; E. Rebecca Gantt, McGuireWoods LLP, Norfolk, Virginia; A. Brooks Gresham and Laura E. Coombe, McGuireWoods LLP, Los Angeles, California; for Defendant-Appellant.
Adam Levitt (argued) and Edmund S. Aronowitz, Grant & Eisenhofer P.A., Chicago, Illinois; Mary S. Thomas, Grant & Eisenhofer P.A., Wilmington, Deleware; Ariana J. Tadler, Henry J. Kelston, Meagan Keenan, and Carey Alexander, Milberg LLP, New York, New York; David E. Azar, Milberg LLP, Los Angeles, California; for Plaintiff-Appellee.

Author of Opinion: Judge Friedland

Circuit: Ninth Circuit

Case Alert Supervisor: Glenn Koppel

    Posted By: Glenn Koppel @ 03/03/2017 06:46 PM     9th Circuit     Comments (0)  

  Pepper v. Apple Inc. - Ninth Circuit
Headline: The Ninth Circuit Panel held that reviewing courts should be "forgiving" of a district court's failure to follow Rule 12(g)(2), when granting late-filed Rule 12(b)(6) motions and held customers who buy iPhone applications are "direct purchasers" for purposes of standing in an antitrust suit against Apple, Inc.

Areas of Law: Federal Rules of Civil Procedure, Antitrust, Statutory Standing

Issues Presented: The panel's opinion focused on two questions. First, whether the district court erred in granting Apple's fourth motion to dismiss asserting the defense of lack of standing, when Rule 12(g)(2) by its terms may have barred Apple's motion because that defense was omitted from Apple's previous Rule 12 motion. Second, whether the plaintiffs were direct purchasers of Apple's iPhone applications within the meaning of Illinois Brick.

Brief Summary: Plaintiffs brought a putative antitrust class action against Apple alleging monopolization, attempted monopolization, and conspiracy between Apple and AT&T Mobility LLC to monopolize the voice and data services market for iPhones. Plaintiffs that Apple has monopolized and attempted to monopolize the market for iPhone apps and further alleged that they were direct purchasers . Plaintiffs allege that claimed that were "direct purchasers" of Apple's iPhone applications and thus suffered financial injury sufficient to satisfy Article III standing, as well as satisfying the statutory standing per Illinois Brick.

Plaintiffs claim Rule 12(g)(2) should have barred Apple's late-filed 12(b)(6) motion because Apple omitted its lack-of-standing defense from an earlier Rule 12 motion; therefore, the district court erred when ruling on Apple's 12(b)(6) motion. Noting a disagreement among the Circuits on the proper interpretation and application of Rule 12(g)(2), the panel sided with the Third and Tenth Circuits in concluding that the district court may have failed to apply Rule 12(g)(2), but the error was harmless and should be forgiven since the intent and policy of the Federal Rules are to ensure "just, speedy, and inexpensive determination of every action and proceeding." By ruling on the merits of Apple's Rule 12(b)(6) motion, the district court "materially expedited the district court's disposition of the case, which was a benefit to both parties." The panel found that Rule 12(g)(2) was designed to punish parties who unduly delay trial by strategically not filing motions, and Apple was found to have filed the motions in a timely manner. Therefore, any procedural error was harmless, and the panel then focused on the merits of the decision.

The United States Supreme Court case Illinois Brick stated, "the overcharged direct purchaser, and not others in the chain of manufacturer or distribution," has standing to sue. The panel held Apple, and not the third-party developers, were the direct distributors of iPhone apps, so that the plaintiffs were direct purchasers of iPhone apps from Apple under Illinois Brick and, therefore, have standing to sue. The panel reversed the district court's decision on the merits, and remanded the case for further proceedings.

Significance: Owners of iPhones who purchase iPhone applications are now considered direct purchasers from Apple's "App Store." Purchasers now have standing to sue since Apple has the exclusive authority to sell the product at a price Apple sets, making the argument for antitrust violation sustainable in court. If plaintiffs prevail on remand this may allow third-party developers to sell the applications they created at a more competitive price outside the "App Store."

Extended Summary: In 2007, Apple Inc. released the iPhone. Apple allowed its customers to search, purchase, and download applications (apps) from Apple's "App Store." Some apps were created by Apple, but most were produced by third-party developers. Of the apps sold, Apple earned 30% commission and the other 70% of the sale price went to the developers. Apple strictly prohibited developers from going outside of Apple's App Store to sell their apps and threatened the developers who violated this prohibition by cutting off their sales. In addition, Apple discouraged iPhone users from downloading unapproved apps from other sources, and disciplined them by voiding their warranties.

On December 29, 2011, four named plaintiffs filed a putative antitrust class action complaint ("Complaint 1") against Apple alleging monopolization and attempted monopolization of the app market. Because the plaintiffs did not join AT&T Mobility, LLC ("ATTM") as a party, for the conspiracy count of the complaint, Apple moved to dismiss the entire complaint under Rule 12(b)(7). Apple's motion was deemed moot when the district court consolidated the action with another action.

On March 21, 2012, seven named plaintiffs filed another putative class action complaint ("Complaint 2") against Apple, alleging the same counts as those in Complaint 1. Complaint 2 also failed to join ATTM as a defendant. On April 16, 2012, Apple moved to dismiss the entire complaint under Rule 12(b)(7) and in the alternative under Rule 12(b)(6). The district court granted the motion to dismiss without prejudice, but ordered the plaintiffs either to add ATTM as a defendant or to drop the conspiracy count of the complaint. The district court deemed Apple's Rule 12(b)(6) motion premature.

The plaintiffs third complaint ("Complaint 3") was the same as Complaint 2, except it was labeled "Preserved for Appeal." At this point in the proceedings, none of the named plaintiffs alleged that they had ever purchased or sought to purchase, iPhone apps and ATTM was still not a named defendant. Apple moved under Rule 12(f) to strike the conspiracy claim, and the district court granted the motion. For the first time, Apple moved under Rule 12(b)(1) for lack of Article III standing and under Rule 12(b)(6) stating plaintiffs lacked statutory standing under Illinois Brick. Plaintiffs relying on Rule 12(g)(2) opposed Apple's motion to dismiss.

In the Fourth and final complaint ("Complaint 4"), plaintiffs alleged they had purchased iPhone apps giving them Article III standing to sustain their monopolization claims. In addition, they responded to Apple's defense of lack of statutory standing under Illinois Brick by alleging their status as "direct purchasers" from Apple. Apple filed a motion under Rule 12(b)(6) contending the plaintiffs lacked statutory standing. The district court granted the motion and dismissed the entire complaint with prejudice. Plaintiffs timely appealed.

Plaintiffs argue that Rule 12(g)(2) should have barred Apple from raising the Illinois Brick statutory standing defense when Apple raised four different Rule 12 motions to dismiss and that the district court erred in deciding the motion on the merits.. Rule 12(g)(2) provides "that a party that makes a motion under this rule must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion." The Ninth Circuit panel recognized a split among the circuits regarding proper interpretation and application of Rule 12(g)(2). The panel disagreed with the Seventh Circuit's holding that Rule 12(g)(2) does not foreclose a motion to dismiss under Rule 12(b)(6) when there has been a previous motion to dismiss under Rule 12. Agreeing with the Third and Tenth Circuits, the panel held that, strictly applied, Rule 12(h)(2) required Apple to answer the complaint and then make a Rule 12(c) motion for judgment on the pleadings. However, where there is no evidence of a defendant's intent to delay proceedings, the court of appeals, should be forgiving of a district courts failure to strictly follow Rule 12(g)(2)..

The panel applied Rule 12(g)(2) in light the general policy expressed in Rule 1 that federal courts should construe the Federal Rules in a way that ensures a "just, speedy, and inexpensive determination of every action and proceeding." Though Rule 12(g) "technically prohibits successive motions," its purpose was to punish parties whose intent is to delay court proceedings, practice ambush tactics, and extend costly litigation. In the present litigation, the panel held that Apple's motions did not appear to be filed for any "strategically abusive purpose" and that Apple made their motions in timely manners. Further, if the district court properly followed Rule 12(g)(2), the alternative avenues for Apple would have "substantially delayed" resolutions of the issues. Therefore, the panel held the late filed 12(b)(6) motion, which was granted by the district court, was harmless, despite the failure to follow Rule 12(g)(2).

The district court ruled on the merits stating that the plaintiffs were not "direct purchasers" under Illinois Brick. Illinois Brick held that only "the direct purchaser, and not others in the chain of manufacture or distribution," has standing to sue. The direct purchaser rule originated in Hanover Shoe v. United Shoe Machinery Co., 392 U.S. 481 (1968) in which the Supreme Court held that, for purposes of antitrust damages, the direct purchaser is injured by the full amount of the overcharge irrespective of who ultimately bears the cost of that injury. Hanover Shoe and Illinois Brick, the consumer was an indirect purchaser from the manufacturer because the intermediary was the party who actually sold to the consumer. In distinguishing these cases, the panel held that Apple was a distributor who sold directly to plaintiffs. The panel analogized this case to Ticketmaster, an Eighth Circuit case in which purchasers bought concert tickets directly from Ticketmaster. Though the Eighth Circuit held plaintiffs were indirect purchasers the panel believed that ruling to be in error. Instead the panel, focused on the rule in Illinois Brick, which stated, "the distributor who supplies the product directly to the plaintiffs, rather than the producer of the product, is the appropriate defendant in an antitrust suit." In Ticketmaster, the plaintiffs directly purchased the ticket distribution service from Ticketmaster, just like the plaintiffs here, bought iPhone apps directly from Apple. Plaintiffs have no say in price, nor do the developers have any control over Apple's commission. The panel deemed Apple the distributor of the iPhone apps that sold directly to the plaintiffs thorough their app store. Therefore, the plaintiffs are direct purchasers under Illinois Brick and have standing to sue Apple for the alleged monopolization and attempted monopolization of the sale of iPhone apps.

To read the full opinion, please visit: http://cdn.ca9.uscourts.gov/da...17/01/12/14-15000.pdf

Panel: A. Wallace Tashima and William A. Fletcher, Circuit Judges, and Robert W. Gettleman, District Judge

Argument Date: February 10, 2016

Date of Issued Opinion: January 12, 2017

Docket Number: 14-15000

Decided: Reversed and Remanded

Case Alert Author: David T. Griego

Counsel: Mark C. Rifkin (argued), Alexander H. Schmidt, and Michael Liskow, Wolf Haldenstein Alder Freeman & Herz LLP, New York, New York; Francis M. Gregorek and Rachele R. Rickert, Wolf Haldenstein Adler Freeman & Herz LLP, San Diego, California; for Plaintiffs-Appellants

Daniel M. Wall (argued), Christopher S. Yates, and Sadik Huseny, Latham & Watkins LLP, San Francisco, California; J. Scott Ballenger, Latham & Watkins LLP, Washington, D.C.; for Defendant-Appellee

Author of Opinion: Judge W. Fletcher

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 03/03/2017 06:44 PM     9th Circuit     Comments (0)  

  Norcia, et al. v. Samsung Telecommunications America, LLC - Ninth Circuit
Headline: Ninth Circuit panel, applying California contract law, declined to enforce the arbitration provision in a brochure contained in a Samsung phone box's Product & Safety Warranty Information brochure, holding that California courts have not adopted the Seventh Circuit's view that arbitration clauses contained in in-the-box contracts are enforceable.

Areas of Law: Contract Law, Arbitration Clause, Warranty Law

Issues Presented: Whether an arbitration clause in a Product & Safety Warranty Information brochure included in the box of a phone created a binding contract between the phone purchaser and the phone manufacturer to arbitrate the purchaser's claim; and (2) whether a Customer Agreement signed by the product seller created a binding contract between the phone purchaser and the phone manufacturer to arbitrate the purchaser's claim.

Brief Summary: The Ninth Circuit panel affirmed the district court's order denying Samsung's motion to compel arbitration of a class action complaint alleging that Samsung made misrepresentations as to the performance of the Galaxy S4 phone. Samsung moved to compel arbitration of the dispute on the ground that an arbitration provision, contained in a warranty brochure in the Galaxy 4S box, was binding on plaintiff.

The panel applied California contract law and held that Samsung failed to demonstrate the applicability of any exception to the general California rule that an offeree's silence does not constitute consent. The panel further held that the brochure was not enforceable as an "in-the-box" contract ruling that, even if a customer may be bound by an in-the-box contract under certain circumstances, such a contract is ineffective where the brochure entitled "Product & Safety Warranty Information" did not give the purchaser notice that the brochure contained a freestanding obligation outside the scope of the warranty.

The panel also rejected Samsung's argument that the plaintiff agreed to arbitrate his claims by signing a Customer Agreement with Verizon Wireless. The panel concluded that Samsung failed to bear its burden of establishing that it was a third party beneficiary of the Customer Agreement, and therefore Samsung could not enforce the arbitration provision in the agreement.

Significance: Finding that California contract law has not adopted the Seventh Circuit's view that a brochure containing an arbitration clause is enforceable as an in-the-box contract, the Ninth Circuit panel concluded that an arbitration provision in a Product Safety & Warranty Information brochure was not enforceable because (1) the box it was contained in did not notify the consumer that opening the box would be considered agreement to the terms set forth in the brochure; and (2) the brochure would not have put a reasonable person on notice that the brochure contained a freestanding obligation outside the scope of the warranty.

Extended Summary: Plaintiff-Appellee Daniel Norcia ("Norcia") purchased a Samsung Galaxy S4 phone at a Verizon Wireless store. Upon purchasing the phone, a Verizon Wireless employee provided a receipt entitled "Customer Agreement." The receipt stated (in all capital letters), in pertinent part: "I understand that I am agreeing to . . . settlement of disputes by arbitration and other means instead of jury trials, and other important terms in the Customer Agreement." The Customer Agreement did not reference Samsung or any other party. Norcia signed the Customer Agreement. Norcia left the store with the phone, the phone charger, and the headphones, but he declined the offer by the Verizon Wireless employee to take the box and the rest of its contents. The back of the Galaxy S4 box stated: "Package Contains . . . Product Safety & Warranty Brochure."

Section 2 of the "Product Safety & Warranty Information" brochure contained Samsung's "Standard Limited Warranty" and "End User License Agreement for Software." The warranty section included the following (in all capital letters): "All disputes with Samsung arising in any way from this limited warranty or the sale, condition or performance of the products shall be resolved exclusively through final and binding arbitration, and not by court or jury." Further down Section 2 a paragraph explained the procedures for arbitration and stated that purchasers could opt out of the arbitration agreement by providing notice to Samsung within 30 calendar days of purchase, either through email or by calling a toll-free telephone number. Norcia did not take any steps to opt out.

Norcia filed a class action complaint against Samsung Telecommunications America, LLC, and Samsung Electronics America, Inc., (collectively, "Samsung"), alleging that Samsung misrepresented the Galaxy S4's storage capacity and rigged the phone to operate at a higher speed when it was being tested. The complaint sought certification of the case as a class action for all purchasers of the Galaxy S4 phone in California. Norcia did not bring any claims for breach of warranty.

Samsung moved to compel arbitration by invoking the arbitration provision in the Product Safety & Warranty Information brochure. The district court denied Samsung's motion, holding that even though Norcia should be deemed to have received the Galaxy S4 box, including the Product Safety & Warranty Information brochure, the receipt of the brochure did not form an agreement to arbitrate non-warranty claims. Samsung timely appealed the district court's order.

"[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648 (1986). Therefore, in order to evaluate the district court's denial of Samsung's motion to compel arbitration, the panel first determined "whether a valid agreement to arbitrate exists." Chiron Corp. v Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000).

Samsung raises two theories of contract formation to support its argument that Norcia entered into a binding contract with Samsung to arbitrate his claims. First, Samsung claims that the inclusion of the arbitration provision in the Product Safety & Warranty Information brochure created a valid contract between Samsung and Norcia to arbitrate all claims related to the Galaxy S4 phone. Second, Samsung contends that the Customer Agreement signed by Norcia incorporated the terms of its Product Safety & Warranty Information brochure by reference and created a binding contract between Norcia and Samsung.

Samsung's first argument that the arbitration provision in the Product Safety & Warranty Information brochure created a binding contract between Samsung and Norcia.

Here, contract law governed the panel's analysis, as Norcia's complaint involves a non-warranty dispute. "A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract." Cal. Com. Code § 2204(1). California courts have long held that "[a]n offer made to another, either orally or in writing, cannot be turned into an agreement because the person to whom it is made or sent makes no reply, even though the offer states that silence will be taken as consent, for the offerer cannot prescribe conditions of rejection so as to turn silence on the part of the offeree into acceptance." Leslie v. Brown Bros. Inc., 208 Cal. 606, 621 (1929).

There are exceptions to this rule, however. An offeree's silence may be deemed to be consent to a contract when the offeree has a duty to respond to an offer and fails to act in the face of this duty. Golden Eagle, 20 Cal. App. 4th at 1386 (1993). Additionally, an offeree's silence may also be treated as consent to a contract when the party retains the benefit offered. See Id.; see also Cal. Civ. Code § 1589. Even if there is an applicable exception to the general rule that silence does not constitute acceptance, courts have rejected the argument that an offeree's silence constitutes consent to a contract when the offeree reasonably did not know that an offer had been made. The court in Windsor Mills, Inc. v. Collins & Aikman Corp. held that "an offeree, regardless of apparent manifestation of his consent, is not bound by inconspicuous contractual provisions of which he was unaware, contained in a document whose contractual nature is not obvious." 25 Cal. App. 3d 993, 993 (1972).

Samsung failed to demonstrate the applicability of any exception to the general California rule that an offeree's silence does not constitute consent. Because Norcia did not give any "outward manifestations of consent [that] would lead a reasonable person to believe the offeree has assented to the agreement," Knutson, 771 F.3d at 565, the panel concluded that no contract was formed between Norcia and Samsung, and Norcia is not bound by the arbitration provision contained in the brochure.

Samsung argued that Norcia was bound by the terms set forth in the brochure because the brochure is analogous to a shrink-wrap license, which was held enforceable in California, see Wall Data Inc. v. L.A. Cty. Sheriff's Dep't, 447 F.3d 769 (9th Cir. 2006). The court previously defined a "shrink-wrap license" as "a form on the packing or on the outside of the CD-ROM containing the software which states that by opening the packaging or CD-ROM wrapper, the user agrees to the terms of the license." Id. at 775. The panel held that even if a license to copy software could be analogized to a brochure that contains contractual terms, the outside of the Galaxy S4 box did not notify the consumer that opening the box would be considered agreement to the terms set forth in the brochure. Accordingly, Wall Data does not support Samsung's argument that Norcia was bound by the brochure contained in the Galaxy S4 box.

Samsung also argued that the terms set forth in the brochure are analogous to terms included in a box sent to the consumer (an "in-the-box" contract), which the Seventh Circuit has also held to be enforceable in Hill v. Gateway 2000, Inc., 105 F.3d 1147, 1148 (7th Cir. 1997). Samsung claimed that California courts have adopted the reasoning expressed in Hill, citing Weinstat v. Dentsply International Inc., 180 Cal. App. 4th 1213 (2010). However, Samsung misapplied Weinstat, as the case focused on warranty formation under section 2313 of the California Commercial Code, not on contract formation. Accordingly, Weinstat did not adopt the rule stated in Hill, that statements in a brochure enclosed in a product box create a contract between the seller and the consumer that can limit the consumer's rights to bring legal actions against the manufacturer for claims involving an express warranty.

Samsung also relied on a Second Circuit case, Schnabel v. Trilegiant Corp., 697 F.3d 110 (2d Cir. 2012), to support its argument that California courts have adopted the reasoning in Hill for enforcing in-the-box contracts. Schnabel noted that holding licenses in a product box as enforceable contracts "do[es] not nullify the requirement that a consumer be on notice of the existence of a term before he or she can be legally held to have assented to it." Id. at 24. The panel held that the information provided in Samsung's brochure would not have put a reasonable person in Norcia's position on notice that the brochure contained a freestanding obligation outside the scope of the warranty. Nor would a reasonable person understand that receiving the seller's warranty and failing to opt out of an arbitration provision contained within the warranty constituted assent to a provision requiring arbitration of all claims against the seller, including claims not involving the warranty. Samsung's inclusion of a brochure in the Galaxy S4 box, and Norcia's failure to opt out, does not make the arbitration provision enforceable against Norcia.

Samsung's second argument that the Customer Agreement signed by Norcia created a binding contract between Norcia and Samsung.

The Customer Agreement was an agreement between Verizon Wireless and its customer. Samsung was not a signatory. Samsung argued that it may enforce the arbitration agreement because it is a third-party beneficiary of the agreement, however, the parties to the contact must have intended the third party to benefit and Samsung did not point to any evidence in the record indicating that Norcia and Verizon Wireless intended the Customer Agreement to benefit Samsung. Samsung failed to meet its burden of establishing that it was a third-party beneficiary.

The district court's order denying Samsung's motion to compel arbitration of a class action was affirmed.

To read the full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...017/01/19/14-16994.pdf

Panel: Sidney R. Thomas, Chief Judge, and Carlos T. Bea and Sandra S. Ikuta, Circuit Judges.

Argument Date: October 17, 2016

Date of Issued Opinion: January 19, 2016

Docket Number: 3:14-cv-00582-JD

Decided: Affirmed

Case Alert Author: Brandon Homan

Counsel: John R. Hurley (argued), Eduardo G. Roy, Daniel C. Quintero, and Jill Dessalines, Prometheus Partners L.L.P., San Francisco, California, for Plaintiff-Appellee. Sean D. Unger (argued), John P. Phillips, and Ryan C. Nier, Paul Hastings LLP, San Francisco, California, for Defendants-Appellants.

Author of Opinion: Circuit Judge Sandra S. Ikuta

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 03/03/2017 06:42 PM     9th Circuit     Comments (0)  

February 2, 2017
  Ho v. ReconTrust Co.
Headline: The Ninth Circuit panel affirms that the trustee of a California deed of trust securing a non-judicial foreclosure under California state law is not a" debt collector" within the purview of the Fair Debt Collection Practices Act.

Areas of Law: Fair Debt Collection Practices Act, Consumer Finance, State (California) and Federal Civil Procedure

Issues Presented: (1) Whether the trustee of a California deed of trust is a "debt collector" pursuant to the Fair Debt Collection Practices Act where the trustee mailed a notice of default and a notice of sale to the borrower in pursuance of a non-judicial foreclosure on the borrower's home. (2) Whether the district court's dismissal, without prejudice, of plaintiff's Truth in Lending Act claim in trying to rescind the mortgage is preserved for appeal even if not repleaded.

Brief Summary: Plaintiff-Appellant Vien-Phuong Thi Ho ("Ho"), borrower, filed suit in the United States District Court for the Central District of California against Defendants-Appellees ReconTrust Company, N.A. ("ReconTrust"), trustee, and Countrywide Home Loans Inc. ("Countrywide"), lender, and Bank of America, N.A., asserting that ReconTrust violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., ("FDCPA") because its mailing of notices of default and sale to Ho in initial pursuance of non-judicial foreclosure on Ho's California home misrepresented the amount she owed to Countrywide, 15 U.S.C. § 1692e(2)(A). The district court granted ReconTrust's motion to dismiss the FDCPA violation claim because the court decided that it was not a "debt collector." Ho also sought to rescind the mortgage transaction because she alleged that the defendants committed fraud under the Truth in Lending Act ("TILA"), 15 U.S.C. § 1635(a). The district court twice dismissed Ho's rescission claim without prejudice; Ho did not replead it in her third complaint.

Ho appealed to the Ninth Circuit and asserted that ReconTrust was a "debt collector" because the mailed notices qualified as attempts to collect debt for Countrywide and that ReconTrust fell under the purview of the FDCPA, which prohibits offensive practices by debt collectors attempting to collect debt. The Ninth Circuit panel affirmed the district court's decision that ReconTrust's notices were an enforcement of a security interest for a non-judicial foreclosure under California law, not an attempt to collect money or debt as defined by the FDCPA.

Ho also argued although she did not replead the TILA claim, her prior attempts properly preserved it and the claim should be reinstated pursuant to the court's holding in Merritt v. Countrywide Fin. Corp. 759 F.3d 1023 (9th Cir. 2014). The Ninth Circuit panel agreed with Ho and vacated the dismissal. The court remanded the case to the district court for consideration on ground that the district court erred by not giving Ho the right to replead the TILA claim.

Significance: The Ninth Circuit's decision that a trustee enforcing a security interest is not a "debt collector" within the scope of the FDCPA breaks from Fourth and Sixth Circuit decisions holding that a mortgage foreclosure, including the enforcement of a security interest, is a debt collection that is subject to the FDCPA. Thus, the circuit split illustrates the ambiguity of FDCPA's "debt collector" phrase.

Extended Summary: In June 2007, Plaintiff-Appellant Vien-Phuong Thi Ho ("Ho") purchased a home in Long Beach, California through a loan obtained from Defendant-Appellee Countrywide Bank ("Countrywide"). The loan was secured by a deed of trust with the Defendant-Appellee, ReconTrust Company, N.A. ("ReconTrust"), authorized as the trustee. By late 2008, Ho began missing loan payments. In 2009, ReconTrust initiated a non-judicial foreclosure.

In accordance with California's non-judicial foreclosure process, Cal. Civ. Code § 2924(a)(1), ReconTrust recorded a notice of default and mailed the notice to Ho. The default notice informed Ho of the initiation of non-judicial foreclosure proceedings and that her property "may be sold without any court action." The notice also advised Ho that she could bring her account "in good standing by paying all of her past due payments" to Countrywide in the amount of $22,782.68. Ho did not make any payments.

Subsequently, ReconTrust took the second step of the non-judicial foreclosure process and recorded a notice of sale and mailed the notice to Ho. Cal. Civ. Code § 2924(a)(3). The notice of sale informed Ho that her property would be sold in public auction "unless [she took] action to protect [her] property." The notice of sale also stated that ReconTrust "is a debt collector attempting to collect a debt. Any information obtained will be used for that purpose."

Ho filed suit in the United States District Court for the Central District of California against Defendants-Appellees ReconTrust, Countrywide, and Bank of America, N.A., and asserted that ReconTrust violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"). Ho claimed the notices she received by ReconTrust's initial pursuance of a non-judicial foreclosure on her property mispresented the amount she owed to Countrywide in violation of 15 U.S.C. § 1692e(2)(A). In her suit, Ho also sought to rescind the mortgage transaction because she alleged that the defendants committed fraud under the Truth in Lending Act ("TILA"), per 15 U.S.C. § 1635(a).

ReconTrust moved to dismiss the FDCPA violation claim because it asserted that the notices of default and sale mailed to Ho were not attempts to collect on a debt owed and therefore it was not a "debt collector" under the FDCPA. The district court granted ReconTrust's motion to dismiss Ho's claims under the FDCPA.

As for Ho's TILA rescission claim, the district court dismissed it twice without prejudice and Ho did not replead it in her third complaint. In addition to these two issues, the district court also dismissed Ho's other claims under the FDCPA, the Racketeer Influenced and Corrupt Organizations Act ("RICO Act") and the Real Estate Settlement Procedures Act.

Ho appealed to the Ninth Circuit and asserted that ReconTrust was a "debt collector" because the mailed notices qualified as attempts to collect debt for Countrywide and, therefore, ReconTrust as a debt collector fell within the purview of the FDCPA. Additionally, Ho argued that though she did not replead her TILA claim in the district court it should be reinstated on appeal because the Ninth Circuit had clarified the requirements of a TILA claim in Merritt v. Countrywide Fin. Corp., 759 F.3d 1023, (9th Cir. 2014).

The first issue on appeal was whether the trustee of a California deed of trust is a "debt collector" pursuant to the FDCPA where the trustee mailed notices of default and sale to the borrower in pursuance of a non-judicial foreclosure on the borrower's home. The Ninth Circuit panel first looked at the language of the FDCPA. Under the FDCPA, a "debt collector" is liable for civil damages for abusive conduct while attempting to collect debt. §§ 1692d - f, 1692k. The FDCPA general definition of a "debt collector" is any entity that "regularly collects or attempts to collect, directly or indirectly debts owed or due or asserted to be owed or due [to] another." § 1692a(6). Under the FDCPA the word "debt" is akin to money. 15 U.S.C. § 1692a(5). Therefore, ReconTrust would be liable under the FDCPA if it was attempting to collect debt. However, the Ninth Circuit relied on Hulse v. Ocwen Federal Bank, 195 F. Supp. 2d 1188, 1204 (D. Or. 2002), which held that "foreclosing on a trust deed is an entirely different path" than "collecting funds from a debtor."

The Ninth Circuit panel concluded that the objective of a non-judicial foreclosure is to "retake and resell the security," and not collect the debt or money from the borrower. In retaking and reselling the security the trustee collects money from the home purchaser and not the original borrower, such as Ho. Therefore, ReconTrust's conduct and objective in a non-judicial foreclosure on Ho's property made ReconTrust a trustee governed under section 1692f(6) as an enforcer of a security interest and not as a "debt collector" under section 1692a.

In holding that ReconTrust was not a "debt collector" the Ninth Circuit panel broke from Fourth and Sixth Circuit decisions holding that a mortgage foreclosure, including the enforcement of a security interest, is a debt collection that is subject to the FDCPA. Glazer v. Chase Home Fin. LLC, 704 F.3d 453, 461 (6th Cir. 2013); Wilson v. Draper & Goldberg, P.L.L.C., 443 F.3d 373, 378 - 79 (4th Cir. 2006). The Ninth Circuit did agree with the sister circuits that if an entity's "only role in the debt collection process is the enforcement of a security interest" then it does not fall under the "debt collector" category. Wilson, 443 F.3d at 378; see Glazer, 704 F.3d at 464.

The panel noted that had ReconTrust taken additional actions it could possibly be classified as a "debt collector" under the general definition of the term. The panel reasoned that ReconTrust's actions fell under the umbrella of "enforcement of a security interest." Under California's non-judicial foreclosure statutes the only way ReconTrust could enforce the security interest was by sending the notice of default and notice of sale. Therefore, a trustee, such as ReconTrust, acting in compliance with California law in non-judicial foreclosure proceedings would simultaneously violate the FDCPA if the mailing of these notices constituted additional actions.

To avoid a conflict between state and federal law, the panel relied on the Supreme Court's instructions that the "FDCPA should not be interpreted to interfere with state law unless Congress clearly intended to displace that law." Sheriff v. Gillie, 136 S. Ct. 1594, 1602 (2016). The panel reasoned that the Supreme Court in Sheriff v. Gillie was trying to prevent federal encroachment on state rights especially in areas that have been traditionally a matter of state law. Since mortgage foreclosures have been traditionally a matter for the states, the "debt collector" phrase in FDCPA is ambiguous, and FDCPA provisions interfere with California state law regarding non-judicial foreclosure proceedings the Ninth Circuit applied the state law.

The second issue was whether the district court's dismissal, without prejudice, of Ho's TILA claim in trying to rescind the mortgage is preserved for appeal even if not repleaded. Ho asserted that her TILA claim should be reinstated on appeal because the Ninth Circuit had clarified the requirements of a TILA claim in Merritt v. Countrywide Fin. Corp. The panel stated that claims dismissed without prejudice and not repleaded are normally not preserved for appeal and are considered "voluntarily dismissed." Lacey v. Maricopa Cty., 693 F.3d 896, 928 (9th Cir. 2012). However, the panel concluded that Ho's case fell within the exception created by Lacey.

In Ho's case, the district court stated that Ho could replead the claim if she could declare that she had the means or ability to repay the loan. The district court judge concluded that if Ho could not make the declaration to pay the loan in good faith then she should not continue with her TILA claim. However, in Merritt, the Ninth Circuit held that a mortgagor does not have to declare the ability to repay the loan for her TILA rescission claim to survive a motion to dismiss. Following Lacey, the panel held that where the district court "dismisses a claim and instructs the plaintiff not to refile the claim unless he includes certain additional allegations that the plaintiff is unable or unwilling to make, the dismissed claim is preserved for appeal even if not repleaded."

For these reasons, the Ninth Circuit panel affirmed the district court's dismissal of Ho's FDCPA claim alleging that ReconTrust was a "debt collector," and vacated the district court's dismissal of Ho's TILA rescission claim, remanding it to the district court for consideration. In addition, the Ninth Circuit panel also affirmed the district court's dismissal of Ho's other claims under the FDCPA, the RICO Act and the Real Estate Settlement Procedures Act.

Judge Edward R. Korman, partially dissented and partially concurred. Judge Korman argued that the text and the purpose of the FDCPA is that a trustee pursuing a non-judicial foreclosure proceeding is a "debt collector" because the entity is trying to obtain debt or money by forcing the sale of the property being foreclosed upon. Judge Korman also claimed that FDCPA does not interfere with California state law for initiating or conducting non-judicial foreclosures, and therefore the FDCPA should not be overridden by state law. He asserted that other sister circuits have ruled that foreclosure proceedings are a form of debt collection subject to the FDCPA. Judge Korman concurred in vacating the district's dismissal of Ho's TILA claim and remanding it for consideration.

To read the full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/10/19/10-56884.pdf

Panel: Before: Alex Kozinski and Consuelo M. Callahan, Circuit Judges, and Edward R. Korman, Senior District Judge

Argument Date: Argued and Submitted June 5, 2015

Date of Issued Opinion: October 19, 2016

Docket Number: 10-56884

Decided: Affirmed the district court's dismissal of appellant Ho's failure to state a claim under FDCPA, and vacated the dismissal of Ho's TILA claim and remanded for consideration.



Counsel: Nicolette Glazer, Esq. (argued), Law Offices of Larry R. Glazer, Century City, California, for Plaintiff-Appellant.

Margaret M. Grignon (argued) and Kasey J. Curtis, Reed Smith LLP, Los Angeles, California; Carolee A. Hoover and David C. Powell, McGuire Woods LLP, San Francisco, California; for Defendants-Appellees.

Dean T. Kirby, Jr. and Martin T. McGuinn, Kirby & Mcguinn, A P.C., San Diego, California, for Amici Curiae United Trustee's Association, California Bankers Association, American Legal and Financial Network, Arizona Trustee Association and California Mortgage Association.

Meredith Fuchs, General Counsel, To-Quyen Truong, Deputy General Counsel, John R. Coleman, Assistant General Counsel, Nandan M. Joshi and Thomas M. McCray-Worrall, Attorneys, Consumer Financial Protection Bureau, Washington, D.C., for Amicus Curiae Consumer Financial Protection Bureau.

Author of Opinion: Judge Alex Kozinski

Partial Dissent and Partial Concurrence: Judge Edward R. Korman

Circuit: Ninth Circuit

Case Alert Author: Juan Villanueva

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 02/02/2017 07:05 PM     9th Circuit     Comments (0)  

  Ziober v. BLB Resources, Inc.
Headline: The Ninth Circuit joined other circuits in holding that the Uniformed Services Employment and Reemployment Rights Act which institutes employment rights for returning service members does not prohibit required arbitration of claims arising under its provisions.

Areas of Law: Arbitration, Labor Law, Uniformed Services Employment and Reemployment Rights Act

Issue Presented: Whether the Uniformed Services Employment and Reemployment Rights Act prohibits compelled arbitration pursuant to an arbitration clause in a service member's employment contract for claims against his former employer arising under the act.

Brief Summary: Plaintiff-Appellant Kevin Ziober ("Ziober"), a service member of the United States Navy Reserve, signed an agreement with his employer, Defendant-Appellee BLB Resources, Inc. ("BLB Resources"), compelling arbitration of any claims that should arise during the course of his employment or at his termination. Ziober later sued BLB Resources in federal court, claiming a violation of the Uniformed Services Employment and Reemployment Act of 1994 ("USERRA") on the ground he was terminated after notifying his employer that he was being deployed. The district court granted BLB Resources's motion to compel arbitration and dismissed the case holding that the USERRA did not nullify the arbitration agreement. On appeal, the Ninth Circuit panel affirmed, holding there is no indication from the USERRA's text or legislative history that Congress intended to override the Federal Arbitration Act's directive that courts enforce arbitration contracts according to their terms.

Significance: Service-members suing under USERRA can be required to arbitrate claims arising under the act if they entered a compelled arbitration agreement.

Extended Summary: Plaintiff-Appellant Kevin Ziober ("Ziober") was a service member of the United States Navy Reserve. He also worked as an operations director for Defendant-Appellee BLB Resources, Inc. ("BLB Resources"). Soon after joining BLB Resources, Ziober signed a bilateral arbitration agreement with the company that compelled binding arbitration if any dispute arose between Ziober and the company during Ziober's employment or at the time of his termination. Pursuant to the agreement the company would pay all costs for the arbitration and the remedies and discovery available in arbitration would be the same as those afforded by the courts.

The Navy later recalled Ziober into active duty and Ziober gave his employer notice of his upcoming deployment to Afghanistan. On his final day of scheduled employment, BLB Resources told him it would be his last day and that he would no longer be employed with the company upon his return.

After returning from deployment, Ziober sued BLB Resources in federal district court for violating the Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA"), which protects reemployment rights of members serving in the armed forces. BLB Resources successfully moved to compel arbitration and the district court dismissed the case, holding that USERRA did not supersede the agreement Ziober signed with his employer.

On appeal, the Ninth Circuit panel considered whether USERRA prohibited the compelled arbitration of disputes arising under the act. The panel based its opinion on an analysis of extensive Supreme Court precedents acknowledging the federal policy supporting arbitration agreements. The panel noted that the only exception to enforcing arbitration agreements as mandated by the Federal Arbitration Act ("FAA") is when this pro-arbitration policy has been superseded by contrary congressional intent in a new statute or act.

USERRA provides, in pertinent part, that, "this chapter supersedes any matter that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter, including the establishment of additional prerequisites to the exercise of any such right or the receipt of any such benefit." The panel reasoned that Ziober did not lose any substantive rights protected by the statute and that compelling arbitration did not require him to take any additional steps before vindicating his rights. The only result of compelling arbitration would be the requirement of an arbitral forum rather than a judicial forum.

The panel relied on the Supreme Court's decision in CompuCredit Corp. v. Greenwood, 132 S.Ct. 665 (2012), where the Court rejected the claim that the Credit Repair Organization Act created a procedural right to a lawsuit in court despite the Act's text which appears to contemplate judicial forums. The panel reasoned that nothing in the text of USERRA mentions compelling arbitration and, had Congress intended to prohibit the arbitration of claims under USERRA, Congress could have done so by the use of unmistakable language. Similarly, the panel found no evidence of contrary congressional intent in the act's legislative history. Thus, the panel affirmed the district court's judgment compelling arbitration.

Judge Watford concurred and joined the court's opinion, but discussed the ambiguity of USERRA. Judge Watford asserted that there were two possible interpretations of USERRA, one that prohibits an employee's waiver of his or her right to bring a suit under USERRA in a court, and another that prohibits only waiver of substantive rights under USERRA. Because nothing in the legislative history of the act settles the ambiguity, Judge Watford concurred to avoid a circuit split. He wrote that if Congress intended a contrary result, it could amend the statute.

To read full opinion, please visit:
https://cdn.ca9.uscourts.gov/datastore/opinions/2016/10/14/14-56374.pdf

Panel: Mary H. Murguia and Paul J. Watford, Circuit Judges, and Susan R. Bolton, District Judge.

Argument Date: July 5, 2016

Date of Opinion: October 14, 2016

Docket Number: 14-56374

Decided: Judgment affirmed.

Counsel:
Peter Romer-Friedman (argued) and R. Joseph Barton, Cohen Milstein Sellers & Toll PLLC, Washington, D.C.; Kathryn S. Piscitelli, Orlando, Florida; Thomas G. Jarrard, Law Office of Thomas Jarrard, PLLC, Spokane, Washington; for Plaintiff-Appellant

Lonnie D. Giamela (argued), Jimmie E. Johnson, and Nathan V. Okelberry, Fisher & Phillips LLP, Los Angeles, California, for Defendant-Appellee

Author of Opinion: Judge Murguia

Concurrence: Judge Watford

Case Alert Author: Maria Vittoria

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 02/02/2017 07:02 PM     9th Circuit     Comments (0)  

November 4, 2016
  United States v. Hector Soto-Zuniga - Ninth Circuit
Headline: The Ninth Circuit panel held that the district court abused its discretion by denying defendant pretrial discovery of the arrest and search statistics of the San Clemente Border Patrol checkpoint to prove that the checkpoint is unconstitutional because its primary purpose is to detect evidence of drug trafficking, rather than to control immigration, and

Areas of Law: Criminal Law, Fourth Amendment, Criminal Procedure, Pre-Trial Discovery

Issues Presented: Whether the district court abused its discretion in denying defendant's discovery motion for San Clemente's checkpoint search and arrest statistics in order to determine the constitutionality of the checkpoint which turns on whether its "primary purpose" is to control immigration or rather to interdict drug trafficking and other "ordinary criminal wrongdoing."

Whether the district court erred in its finding that defendant's discovery request for the government's investigation into Christian Rios Campos' drug smuggling operation was not material to his defense and was therefore not discoverable.

Whether the district court erred in denying defendant's motion to suppress the drug evidence on the basis that the Border Patrol agents lacked probable cause to search defendant's car.

Whether the district court erred in instructing the jury, using the Ninth Circuit pattern jury instructions, that "[a] reasonable doubt is a doubt based upon reason and common sense and is not based purely on speculation" because this phrasing interferes with the presumption of innocence.

Whether defendant's knowledge of drug type and quantity is an element of possession with intent to distribute in violation of 21 U.S.C § 841.

Significance: Border Patrol checkpoints have long been a clear exception to the Fourth Amendment prohibition of unreasonable searches and seizures. However, the Supreme Court emphasized, in City of Indianapolis v. Edmond, that it had never approved a checkpoint program whose primary purpose was to detect evidence of ordinary criminal wrongdoing as opposed to policing the border or ensuring roadway safety. Here, the Ninth Circuit panel affirmed that the primary purpose of border patrol checkpoints should be to control immigration and not to interdict drug trafficking and, therefore, defendant has the right to discover the checkpoint's arrest statistics.

Brief Summary: Hector Soto-Zuniga ("Soto-Zuniga") was arrested at a Border Control checkpoint in San Clemente, California after Border Patrol agents found 2.9 kilograms of methamphetamine on the floor of Soto-Zuniga's car during a search. On a defense motion to suppress drug evidence seized from defendant's car at the checkpoint, Soto-Zuniga argued that the San Clemente checkpoint was unconstitutional and requested discovery of the checkpoint's arrest and search statistics. The district court denied Soto-Zuniga's motions to suppress.

Soto-Zuniga testified that, prior to being stopped at the San Clemente checkpoint, he gave a ride to three teenagers whom he did not know as a favor to his cousin's husband, Christian Rios Campos ("Rios"). The government stipulated that Rios was a drug smuggler who was known to recruit juveniles to smuggle drugs into the United States, which was significant to Soto-Zuniga's defense that the teenagers had planted the drugs in his car without Soto-Zuniga's knowledge. Soto-Zuniga moved to discover the government's investigation into Rios's drug smuggling operation on grounds that such discovery might identify the three teenagers. The district court denied Soto-Zuniga's motion and Soto-Zuniga was convicted and sentenced to six years in prison.

On appeal, the Ninth Circuit panel held that: (1) the district court abused its discretion by denying Soto-Zuniga's discovery request for the search and arrest statistics of the San Clemente border checkpoint, concluding that discovery of the checkpoint's search and arrest statistics was pertinent to the issue whether the checkpoint was unconstitutional under the Fourth Amendment because its primary purpose was to advance the general interest in crime control rather than to control immigration; and (2) the district court abused its discretion by finding that the documents gathered during the government's investigation into Rios's drug smuggling operation were not material to the defense and were, therefore, not discoverable because they were inadmissible evidence. The panel concluded that there exists a likelihood that discovery of these documents would have identified the teenagers and changed the outcome of the trial.

Extended Summary: Appellant Hector Soto-Zuniga ("Soto-Zuniga") was arrested at a Border Control checkpoint in San Clemente, California after Border Patrol agents found 2.9 kilograms of methamphetamine on the floor of Soto-Zuniga's car during a search. Soto-Zuniga was charged with possession of methamphetamine with intent to distribute in violation of 21 U.S.C. § 841(a)(1).

Before trial, Soto-Zuniga filed a motion to suppress the drugs seized from his car on grounds that they were the fruits of an unlawful search and seizure because the Border Patrol agents at the San Clemente checkpoint lacked probable cause to detain him and search his car. In an unsuccessful attempt to support his motion to suppress, Soto-Zuniga also filed a motion which sought discovery of statistics relating to the number and types of arrests and vehicle searches at the San Clemente checkpoint.

The district court held an evidentiary hearing on Soto-Zuniga's pretrial motions during which Border Patrol Agent Rabreau ("Rabreau") testified that the primary purpose of the San Clemente checkpoint was immigration inspection and that ninety percent of the arrests made were related to immigration. Rabreau further testified as to the events that led to Soto-Zuniga's arrest including that the smell of marijuana coming from Soto-Zuniga's car was the reason Border Patrol Agent Favela ("Favela") initially sent Soto-Zuniga to secondary inspection at the San Clemente checkpoint.

Notwithstanding Soto-Zuniga's sworn declaration and testimony that Soto-Zuniga had not smoked marijuana in more than five years, the district court denied defendant's motions to suppress and compel discovery on grounds that: (1) the sequence of events in the Border Patrol Agents' reports were consistent; (2) there was probable cause based on several factors, including the smell of marijuana, Soto-Zuniga's reported nervousness, the air fresheners, the loose tobacco, the cigarillo wrappers, and Agent Rodgers's report that Soto-Zuniga admitted to him that he had smoked marijuana in the car; (3) while Agent Rabreau was the only agent who claimed to smell the marijuana, other agents reported that Agent Rabreau had told them he smelled marijuana at the scene so it was not "a post-arrest revelation; and (4) Rabreau's testimony was sufficient to lead the district court conclude that the San Clemente checkpoint's primary purpose was immigration.

During the first trial, Soto-Zuniga sought specific jury instructions that differed from the Ninth Circuit pattern jury instructions on reasonable doubt. The district court rejected defendant's jury instructions in favor of the pattern jury instructions. Soto-Zuniga's first trial resulted in a mistrial because the jury was unable to reach a unanimous verdict.

Before the second trial, Soto-Zuniga requested discovery of the government's investigation of Rios and Marisol Diaz ("Diaz"), including any relevant information regarding the three teenagers who were arrested for trafficking drugs at Rios's command. The district court denied defendant's motion to compel discovery on grounds that the evidence was: (1) collateral, (2) irrelevant, and (3) predominately inadmissible in their current form. The district court further ruled that the requested discovery would extend the litigation and present a Fed. R. Civ. P. 403 problem as well. Following the end of the second trial, the jury was instructed with the same jury instructions used in the first trial and the jury returned a guilty verdict.

The Ninth Circuit panel reviewed the district court's discovery rulings for abuse of discretion. To reverse Soto-Zuniga's conviction, the panel must find that the district court abused its discretion in denying Soto-Zuniga's discovery motions and that the error resulted in prejudice to Soto-Zuniga's substantial rights (i.e., that there was "a likelihood that the verdict would have been different had the government complied with the discovery rules").

The first issue on appeal was whether the district court abused its discretion by denying defendant's motion for discovery of the San Clemente checkpoint's search and arrest statistics. The panel held that the district court abused its discretion because this information could have revealed an unconstitutional seizure and lead to the suppression of the evidence of illicit drugs that were found in appellant's car.

The panel acknowledged that, while a search or seizure is unreasonable unless it rests on individualized suspicion of wrongdoing, there is an exception for checkpoint seizures that serve "special needs beyond the normal need for law enforcement" (see City of Indianapolis v. Edmond, 531 U.S. 32, 37 (2006), provided that the purpose of the checkpoint was actually immigration control; (see United States v. Martinez-Fuerte, 428 U.S. 543, 556-64 (1976) (holding that immigration control is a valid purpose for stopping cars and posing questions without individualized suspicion)).

Because the primary purpose of checkpoints should not be to advance the general interest in crime control, the constitutionality of the San Clemente checkpoint turns on whether its "primary purpose" is either to control immigration or to interdict drug trafficking and other "ordinary criminal wrongdoing." Edmond, 531 U.S. at 41. If the checkpoint's primary purpose is to further the general interest in crime control, the checkpoint is per se invalid under the Fourth Amendment and evidence recovered from the illegal search must be excluded as fruit of the poisonous tree. Wong Sun v. United States, 371 U.S. 471, 487-88 (1963).

Accordingly, the Ninth Circuit panel held that, "[w]hether the primary purpose of the checkpoint has evolved from controlling immigration to detecting 'ordinary criminal wrongdoing,' is a question that is subject to discovery under Rule 16" and Soto-Zuniga should not have to rely solely on the government's word that further discovery is unnecessary. Therefore, defendant has a right to discover the statistics of the number and type of arrests and vehicle searches at the San Clemente checkpoint on grounds that such evidence would have provided Soto-Zuniga with the opportunity to support his declaration that the checkpoint was used as a pretext to search for controlled substances rather than to control illegal immigration.

Since the records in question were not available to the Ninth Circuit panel, it could not determine the likelihood whether Soto-Zuniga's case would have had a different outcome had discovery been permitted. Thus, the panel reversed the district court's denial of the motion to compel discovery of the San Clemente checkpoint's arrest statistics and remanded to the district court to assess the constitutionality of the San Clemente checkpoint in further proceedings.

The second issue on appeal was whether the district court abused its discretion by denying Soto-Zuniga's motion requesting discovery of the government's investigation into Rios's drug smuggling operation. The panel held that the district court abused its discretion in concluding that the documents were irrelevant, inadmissible because they relied on hearsay, and that the requested discovery would unnecessarily extend the litigation in violation of Fed. R. Evid. 403. Adopting a broad interpretation of Rule 16(a) (1) (E) that entitled Soto-Zuniga to discover documents that are "material to preparing the defense," the panel explained that "[t]he test is not whether the discovery is admissible at trial, but whether the discovery may assist Soto-Zuniga in formulating a defense, including leading to admissible evidence." The panel concluded that the district court erred by finding that the documents were not material to the defense because they were not admissible since they would either corroborate or contradict Soto-Zuniga's defense that one or more of the teenagers placed the drugs in Soto-Zuniga's car without his knowledge. The panel therefore reversed the district court's denial of Soto-Zuniga's discovery motion, vacated the conviction and remanded with instructions to grant the motion.

The third issue on appeal was whether the district court erred in denying Soto-Zuniga's motion to suppress the drug evidence on the basis that the Border Patrol Agents lacked probable cause to search the car. The panel asserted that certainty is not required to support a search or seizure, but only probable cause based on a totality of the circumstances that a search may yield evidence of a crime: "Probable cause exists if there is a fair probability that contraband or evidence of a crime will be found in a particular place based on a totality of the circumstances." The panel held that, based on Soto-Zuniga's nervousness, agitation, and at least one agent's report that Soto-Zuniga had been smoking marijuana and saw marijuana paraphernalia in the car, "the district court's account of the evidence is plausible and that the totality of the circumstances supported probable cause for the search."

The fourth issue on appeal was whether the district court erred by instructing the jury using the Ninth Circuit pattern jury instructions, which stated that "[a] reasonable doubt is a doubt based upon reason and common sense and is not based purely on speculation." Soto-Zuniga contended that this phrasing interfered with the presumption of innocence. Finding that the Ninth Circuit has repeatedly upheld the use of the Ninth Circuit model jury instruction on reasonable doubt, the panel affirmed the district court's use of the Ninth Circuit's pattern jury instructions.

The fifth and final issue on appeal was Soto-Zuniga's contention that knowledge of the drug type and quantity is an element of possession with intent to distribute in violation of 21 U.S.C § 841. Rejecting this argument, the panel, citing United States v. Jefferson, 791 F.3d 1013, 1016 (9th Cir. 2015), held that the intent element only requires that Soto-Zuniga acted knowingly or intentionally, not that the he knew exactly the quantity and type of drugs he was transporting.

The panel vacated Soto-Zuniga's conviction and remanded the case for a new trial.

To read full opinion, please visit:
https://cdn.ca9.uscourts.gov/datastore/opinions/2016/09/16/14-50529.pdf

Panel: Before: Alex Kozinski, William A. Fletcher, and Ronald M. Gould, Circuit Judges.

Argument Date: Argued and Submitted May 5, 2016

Date of Issued Opinion: September 16, 2016

Docket Number: 14-50529

Decided: Conviction vacated, discovery rulings reversed, and remanded with instructions.

Counsel: Paul Allen Barr (argued), Federal Defenders of San Diego, Inc., San Diego, California, for Appellant-Appellant.

Kyle B. Martin (argued), Assistant United States Attorney; Peter Ko, Chief, Appellate Section, Criminal Division; Laura E. Duffy, United States Attorney; United States Attorney's Office, San Diego, California; for Plaintiff-Appellee.

Author of Opinion: Judge Ronald M. Gould

Case Alert Author: Prianca Murthi

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 11/04/2016 02:55 PM     9th Circuit     Comments (0)  

November 1, 2016
  United States v. Diaz - Ninth Circuit
Headline: In a case of first impression, Ninth Circuit panel concludes that California's Proposition 47, which allows certain felony convictions to be reclassified as misdemeanor convictions, does not undermine a prior conviction's felony-status for purposes of 21 U.S.C. § 841.

Areas of Law: Criminal Law

Issues Presented: Whether a criminal defendant, previously convicted and sentenced in accordance with 21 U.S.C. § 841, is eligible to have his federal sentence reduced pursuant to California's Proposition 47, which permits certain state law felony convictions to be reclassified as misdemeanor convictions.

Brief Summary:
The named defendant and appellant, Jesse Vasquez ("Vasquez"), was convicted of his third drug trafficking related felony in 2009 and was sentenced in 2010 to life in prison, in accordance with sentencing guidelines of The Controlled Substance Act, 21 U.S.C. § 841, which mandates a sentence of life imprisonment because of Vasquez's "prior [California] convictions for a felony drug offense."

In 2014, California voters passed and enacted Proposition 47, "The Safe Neighborhoods and Schools Act," codified at Cal. Penal Code § 1170.18. Among other things, Proposition 47 reduced future convictions under Cal. Health & Safety Code § 11350(a) from a felony to a misdemeanor. Additionally, Proposition 47 permitted previously convicted felons the opportunity to petition the court for a "recall of sentence," which, if granted, would reclassify existing felony convictions as misdemeanor convictions. In 2015 Vasquez petitioned the court and was granted a reclassification of a 1996 felony conviction under § 11350(a) to a misdemeanor conviction.

Upon reclassification, Vasquez filed this appeal to challenge his sentence of life in prison, arguing that he is no longer convicted of three drug related felonies because his 1996 conviction no longer counts for purposes of § 841. The Ninth Circuit panel disagreed and affirmed his original sentence of life in prison on grounds that reclassification of a felony conviction to a misdemeanor conviction pursuant to Proposition 47 did not change or affect prior sentencing enhancements mandated by § 841.

Significance: The Ninth Circuit panel concluded that California's Proposition 47 does not apply retroactively to undermine a prior conviction's felony status for purposes of sentencing enhancements under 21 U.S.C. § 841.

Extended Summary:
Jesse Vasquez ("Vasquez") was a mid-level leader in the Florencia Trece gang who was convicted of drug-related crimes for his part in the gang's drug trafficking operations. In 2009, the district court sentenced Vasquez to life imprisonment due to Vasquez's two prior California felony convictions, one of which was under Cal. Health & Safety Code § 11350(a). Due to Vasquez's two prior California felony convictions, Vasquez qualified for a mandatory sentence enhancement pursuant to 21 U.S.C. § 841.

Section 841 imposes a mandatory life sentence if a defendant "commits [a violation of § 841] after two or more prior convictions for a felony drug offense have become final. 21 U.S.C. § 841(b)(1)(A). A "felony drug offense" is "an offense that is punishable by imprisonment for more than one year under any law of the United States or of a State or foreign country." 21 U.S.C. § 802(44).

Four years after Vasquez received his life sentence, California passed and enacted Proposition 47, The Safe Neighborhoods and Schools Act, codified at Cal. Penal Code § 1170.18, which, inter alia, reduced future convictions under § 11350(a) from a felony to a misdemeanor. The statute allows certain felony convictions to be reclassified as misdemeanor convictions and Cal. Penal Code § 1170.18(b) provides that "[a]ny felony conviction that is recalled and resentenced . . . or designated as a misdemeanor . . . shall be considered a misdemeanor for all purposes." Cal. Penal Code § 1170.18(n) also provides that "[n]othing in this and related sections is intended to diminish or abrogate the finality of judgments in any case not falling within the purview of this act."

Upon the enactment of § 1170.18, Vasquez petitioned for and was granted the reclassification of his 1996 conviction under § 11350(a) from a felony conviction to a misdemeanor conviction. Upon receiving this reclassification, Vasquez appealed his 2010 sentence of life imprisonment arguing that because he successfully petitioned in 2014 to have his 1996 conviction re-designated as a misdemeanor, that conviction no longer counts as a prior felony conviction for purposes of § 841..

The Ninth Circuit panel disagreed with Vasquez and held that § 1170.18 did not alter the prior felony conviction status as it pertains to § 841. The panel noted that federal law, not state law, controlled the interpretation of federal law (see United States v. Norbury, 492 F.3d 1012, 1014 (9th Cir. 2007) and that "[a]lthough the [state's] statute [can] determine the status of the conviction for purposes of state law, it [can]not rewrite history for the purposes of the administration of the federal criminal law or the interpretation of federal criminal statutes." United States v. Bergeman, 592 F.2d 533, 536 (9th Cir. 1979); United States v. Cisneros, 112 F.3d 1272, 1280 (5th Cir. 1997) (quoting United States v. Morales, 854 F.2d 65, 68 (5th Cir. 1988). Following this precedent, the Ninth Circuit panel held that federal law, not California law, determines the effect of California's reclassification of Vasquez's federal sentence enhancement pursuant to § 841.

The panel relied primarily on the Supreme Court's ruling in McNeill v. United States, 563 U.S. 816 (2011). In McNeill, the defendant had been convicted in the early 1990's of violating North Carolina drug laws, for which the maximum sentence was at least ten years. In 1994, North Carolina reduced the maximum sentence such that the North Carolina convictions no longer qualified for the sentencing enhancement prescribed under 18 U.S.C. §§ 924(e)(1) and 924(e)(2)(A)(ii). McNeil, 563 U.S. at 818. McNeill argued that because North Carolina had changed its laws, his prior conviction did not qualify as a "serious drug offense," but the Court disagreed and held that North Carolina's changes to McNeill's state conviction had no effect on his federal sentence. Id. at 819. The Court explained that the Armed Career Criminal Act asked a "backward-looking question" and that the "only way to answer [this question] is to consult the law that applied at the time of that conviction" because this "avoids the absurd results that would follow from consulting current state law to define a previous offense." Id. at 819-20.

The Ninth Circuit panel acknowledged that the issue of whether a state that permits reclassifying particular felony convictions as misdemeanors requires a federal court to revisit a federal sentence enhancement imposed under § 841 was a matter of first impression. However, the panel analogized Vasquez's appeal to cases that addressed whether dismissing or expunging a predicate state conviction invalidates a federal enhancement under § 841. Norbury, 492 F.3d 1012, 1015 (holding that a state's later dismissal or expungement of a predicate state conviction had no bearing on whether § 841's requirements were met). Accordingly, the Ninth Circuit panel reasoned that other than the circumstance "where the dismissal or expungement alters the legality of the original state conviction - such as where there was a trial error or it appears the defendant was actually innocent of the underlying crime," a federal enhancement "does not depend upon the mechanics of state post-conviction procedures, but rather involves the [state] conviction's underlying lawfulness."

The panel determined that, like the provision at issue in McNeill, § 841 is also a "backward-looking," inquiry which only requires that the defendant have committed his federal crime "after two or more prior convictions for a felony drug offense have become final." § 841(b)(1)(A). Thus, it is immaterial whether a state makes a change to a state conviction after it has become final because it "does not alter the historical fact of the [prior state] conviction" becoming final, which is what § 841 requires. United States v. Dyke, 718 F.3d 1282, 1293 (10th Cir. 2013), cert. denied, 134 S.Ct. 365 (2013).

In Vasquez's case, there was no doubt that Vasquez committed a federal drug offense after having been convicted of two prior drug felonies and that those prior convictions had become final. These convictions were felony convictions at the time of his final sentence-enhancement qualifying conviction and thus any change to the state law after the fact has no bearing on the felony-status for purposes of § 841.

The Ninth Circuit panel therefore held that (1) § 1170.18 did not undermine a prior conviction's felony-status for purposes of § 841 and (2) California's later actions cannot change the fact that Vasquez committed his federal offense after 'two or more convictions for a felony drug offense [had] become final" and affirmed the district court.

To read the full opinion, please visit:
https://cdn.ca9.uscourts.gov/datastore/opinions/2016/09/21/10-50029.pdf

Panel: Jerome Farris, Jay S. Bybee, and N. Randy Smith, Circuit Judges.

Argument Date: November 2, 2015

Date of Issued Opinion: September 21, 2016

Docket Number: 10-50029; 10-50052; 10-50058; 10-50059; 10-50062; 10-50064; 10-50072; 10-50076; 10-50113; 10-50115

Decided: Affirmed the district court's sentencing of Jesse Vasquez, asserting that (1) § 1170.18 did not undermine a prior conviction's felony-status for purposes of § 841 and (2) California's later actions cannot change the fact that Vasquez committed his federal offense after 'two or more convictions for a felony drug offense [had] become final.".

Case Alert Author: Ryan Schley

Counsel:
Karen Landau (argued), Oakland, California, for Defendant-Appellant Manuel Hernandez.

Ethan Balogh (argued) and Jay Nelson, Coleman, Balogh & Scott LLP, San Francisco, California, for Defendant-Appellant Jesse Vasquez.

Kenneth Reed, Santa Ana, California, for Defendant-Appellant Gilbert Oliva Diaz.

Verna Wefald, Pasadena, California, for Defendant-Appellant Arturo Cruz.

Wayne Young, Santa Monica, California, for Defendant-Appellant Alberto Hernandez.

David Phillips, Riverside, California, for Defendant-Appellant Noe Gonzalez.

Holly Sullivan, San Diego, California, for Defendant-Appellant Francisco Flores.

Michael Khouri, Khouri Law Firm, Irvine, California, for Defendant-Appellant Luis A. Aguilar.

Robinson Harley, Santa Ana, California, for Defendant-Appellant Cesar Dela Cruz.

Elana Shavit Artson (argued), Allison Westfahl Kong, and Robert Dugdale, Assistant United States Attorneys; Stephanie Yonekura, Acting United States Attorney; United States Attorney's Office, Los Angeles, California, For Plaintiff-Appellee.

Donald M. Falk, Mayer Brown LLP, Palo Alto, California; Travis Crum, Mayer Brown LLP, Washington, D.C.; Michael Romano, Stanford Law School Justice Advocacy Project, Stanford, California; David M. Porter, Co-Chair, NACDL Amicus Curiae Committee, Sacramento, California; for Amici Curie National Association of Criminal Defense Lawyers and Stanford Law School Justice Advocacy Project.

Author of Opinion: Judge Jay S. Bybee

Circuit: Ninth Circuit panel

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 11/01/2016 05:29 PM     9th Circuit     Comments (0)  

  A.K.H. v. City of Tustin - Ninth Circuit
Headline: The Ninth Circuit panel affirmed the district court's denial of qualified immunity to a Tustin police officer in an action brought under 42 U.S.C. § 1983 alleging that the officer used excessive force when he shot and killed an unarmed man suspected of a domestic violence dispute during an investigatory stop.

Area of Law: Constitutional Law; 42 U.S.C. § 1983

Issue Presented: Whether a Tustin Police officer is entitled to summary judgment based on qualified immunity pursuant to 42 U.S.C. § 1983 applying the Graham factors when he shot and killed an unarmed man during an investigatory stop.

Brief Summary: After a theft and domestic violence report from Benny Herrera's ("Herrera") ex-girlfriend Hilda Ramirez ("Ramirez"), police were dispatched to where Herrera was walking to take a bus to his home. Dispatch initially informed the officers that Herrera was not known to carry weapons, but that Herrera was "shown in house" to be a member of the Southside Gang, that Herrera was on parole for a state drug possession crime, and Herrera possibly had a $35,000 traffic warrant out for his arrest.

Officer Miali ("Miali") was the first to spot Herrera. As Miali drove up to Herrera, Miali turned on the red lights of his vehicle. Herrera then put his right hand in his sweatshirt pocket and refused three orders from Miali to "get down," opting to stay on his feet and continue to move down the road at about the same speed as Miali's vehicle. Officer Villarreal ("Villarreal") was second at the scene and did not hear Miali's commands. Villarreal positioned his car so as to "box" Herrera in and immediately shouted, "[g]et your hand out of your pocket." Within less than a second of ordering Herrera to take his hand out of his pocket and without warning, Villarreal fired two shots in rapid succession killing Herrera as Herrera moved to comply with Villarreal's command.

Herrera's relatives filed suit against Villarreal and the City of Tustin under 42 U.S.C. § 1983 claiming that excessive force was used in the incident. Claiming qualified immunity, Villarreal moved for summary judgment, which the district court denied. Villarreal took an interlocutory appeal of the denial of his summary judgment motion.

The Ninth Circuit panel used the two-prong analysis from Bryan v. MacPherson, 630 F.3d 805, 823 (9th Cir. 2010), which asks: (1) viewing the facts in the light most favorable to the plaintiffs, did Villarreal use excessive force in violation of the Fourth Amendment and (2) if Villarreal used excessive force, did he violate a clearly established right. As to the first prong, the Ninth Circuit panel held that, based on the totality of the circumstances and viewing the evidence in the light most favorable to the plaintiffs, Herrera's interests substantially outweighed the government's interest in using deadly force. Thus, Villarreal's fatal shooting of Herrera violated Herrera's Fourth Amendment rights. As to the second prong, the Ninth Circuit panel held that, viewing the evidence in the light most favorable to the plaintiffs, Villarreal violated clearly established Fourth Amendment law when he killed Herrera because Villarreal had no articulable basis to believe that Herrera was armed, except to say that Herrera had one hand "concealed."

The Ninth Circuit panel therefore affirmed the district court's denial of summary judgment in Villarreal's favor based on qualified immunity and remanded to the district court.

Significance: A police officer may not seize an unarmed, nondangerous suspect by shooting him dead.

Extended Summary:
Benny Herrera's ("Herrera") ex-girlfriend Hilda Ramirez ("Ramirez") called 911 and reported that Herrera had stolen her phone. Ramirez told police that Herrera did not carry any weapons and that it was his first time using violence against her. Ramierz also informed dispatch that Herrera had left the scene and was "walking down El Camino Real...towards Red Hill" likely trying to take a bus home as he had neither a car nor friends in the area. Ramirez later modified her story to include that Herrera hit her in the head while Ramierz and Herrera were arguing about Ramirez's phone.

The dispatcher's general call to Tustin Police reported that Herrera stole Ramirez's phone, left the scene, was trying to catch the bus, had no access to a vehicle, did not have friends in the area, and was not known to carry weapons. After Ramirez modified her story to the dispatcher, the dispatcher reported that Ramirez claimed that Herrera had struck Ramirez's head. The dispatcher also reported that Herrera was "shown in-house to be a member of the Southside Gang," was on parole for a state drug possession crime, and possibly had a $35,000 traffic warrant out for his arrest.

Officer Miali ("Miali") encountered Herrera first. As Miali turned on the red lights of his police vehicle, Herrera put his right hand in his shirt pocket and began to skip, walk, and run backwards facing the Miali. Miali told Herrera to "get down" three times, but Herrera did not comply.

Officer Villarreal ("Villarreal") was second on the scene and did not hear Miali's commands to Herrera. Using his patrol car, Villarreal "boxed in" Herrera and told Herrera to, "[g]et your hand out of your pocket." While Herrera was taking his hand out of his pocket, Villarreal fired two shots in quick succession without warning, killing Herrera.

At a deposition, Miali testified, "there was something in [Herrera's sweatshirt] that appeared to be heavy." Villarreal testified in his deposition that Herrera "charged [him]" and that probably "three to five seconds" passed between the time Villarreal commanded Herrera to remove his hands from his pocket and when he shot. However, Miali's dashboard camera showed Villarreal's command and his shots were almost simultaneous and that the entire encounter from the time that Miali initially made contact with Herrera to when Villarreal killed Herrera was less than one minute.

Herrera's relatives filed a claim under 42 U.S.C. § 1983 alleging that Villarreal used excessive force against Herrera when Villarreal shot Herrera two times, killing him during an attempted investigatory stop. Villarreal moved for summary judgment on grounds of qualified immunity which was denied. Villarreal filed an interlocutory appeal.

On the preliminary issue of whether the interlocutory appeal was proper, the Ninth Circuit panel noted that while summary judgment motions are not normally appealable as they are not final judgments, there is an exception for appeals based on a denial of a motion for summary judgment based on qualified immunity (Mitchell v. Forsyth, 472 U.S. 511, 530 (1985)). The Ninth Circuit panel held that Villarreal had properly brought an interlocutory appeal over which the Ninth Circuit panel had jurisdiction because "[a] defendant who appeals a denial of qualified immunity on the ground that his 'conduct did not violate the Fourth Amendment and, in any event, did not violate clearly established law" has "raise[d] legal issues" that may be properly heard in an interlocutory appeal. Plumhoff, 134 S.Ct. at 2019.

Moving to the merits of the appeal, the Ninth Circuit panel used a two-pronged approach to determine whether Villarreal was entitled to summary judgment based on qualified immunity under § 1983. "First, viewing the facts in the light most favorable to the plaintiffs, did Villarreal use excessive force in violation of the Fourth Amendment?" Bryan v. MacPherson, 630 F.3d 805, 823 (9th Cir. 2010). "Second, if Villarreal used excessive force, did he violate a clearly established right?" Id.

Excessive Use of Force

In analyzing excessive force claims under the Fourth Amendment, the question is whether the actions of the officers were "objectively reasonable." Graham v. Connor, 490 U.S. 386, 388 (1989). The nature and quality of the intrusion of individual's Fourth Amendment right is balanced against the interest the government alleges justifies the intrusion. Tennessee v. Garner, 471 U.S. 1, 7 (1985). Courts must evaluate the "totality of the circumstances" (Id. at 8), paying close attention to factors such as "the severity of the crime at issue, whether the suspect poses an immediate threat to the safety of the officers or others, and whether he is actively resisting arrest or attempting to evade arrest by flight" (Graham, 490 U.S. at 396). The "most important" of these factors is "whether the suspect posed an 'immediate threat to the safety of the officers or others.'" Mattos v. Agarano, 661 F.3d 433, 441 (9th Cir. 2011) (en banc) (quoting Smith v. City of Hemet, 394 F.3d 689, 702 (9th Cir. 2005) (en banc)). Moreover, deadly force is permissible only "if the suspect threatens the officer with a weapon or there is probable cause to believe that he has committed a crime involving the infliction or threatened infliction of serious physical harm" Garner, 471 U.S. at 11.

The Ninth Circuit panel noted that under Garner, the "nature and quality of the intrusion" by Villarreal on Herrera's Fourth Amendment interests was extreme because the use of deadly force implicates the highest level of Fourth Amendment interests. As such, the panel held that the government's interests were insufficient to justify the use of deadly force because: (1) the "crime at issue" was a domestic dispute that ended before police became involved; (2) domestic disputes do not necessarily justify the use of even intermediate let alone deadly; and (3) the use of force is especially difficult to justify when "the domestic dispute is seemingly over by the time the officers begin their investigation.

The Ninth Circuit panel further held that Villarreal could not have reasonably believed Herrera was a threat to the safety of officers or others because: (1) the domestic altercation was over; (2) Herrera posed no threat to the safety of the officers as he had no weapon; (3) officers had little, if any, reason to believe that Herrera was armed; (4) the dispatcher told the officers that Herrera was "not known to carry weapons;" (5) Herrera never displayed a weapon and Villarreal admitted that he never saw a weapon; and (6) the traffic warrant and drug possession conviction were relatively minor crimes, neither of which entailed violence or gun possession.
The panel thereafter held that, even it was accepted that (1) Herrera was "actively resisting" or "attempting to evade" an investigatory stop and (2) an arrest and an investigatory stop were equal, this factor only slightly favored the government because Herrera never attempted to flee from the officers. Moreover, Villarreal did not hear Miali's commands for Herrera to "get down." Therefore, when viewing the evidence in the light most favorable to Herrera, this factor did not weigh heavily in the government's favor to determine whether the use of deadly force was justified.

Finally, the Ninth Circuit panel noted that Villarreal had escalated to deadly force very quickly. Less than one second elapsed from Villarreal's command for Herrera to remove his hand from his pocket and the shots fired. There was no warning and insufficient time for Villarreal to make a determination whether Herrera had a weapon. Moreover, Villarreal conceded that he never saw a weapon in Herrera's hand, Herrera never threatened the officers, and Villarreal had other reasonable options. As such, and based on the totality of the circumstances and the balancing of both sides, the panel concluded that the intrusion on Herrera's interests substantially outweighed any governmental interest in using deadly force and held that Villarreal's fatal shooting of Herrera violated Herrera's Fourth Amendment rights.

Clearly Established Right

After holding that Villarreal's actions violated the Fourth Amendment, the Ninth Circuit panel considered whether Villarreal violated a right that was clearly established at the time of the violation. Espinosa v. City & Cty. of San Francisco, 598 F.3d 528, 532 (9th Cir. 2010). To determine whether such a right was violated, the panel looked to "cases relevant to the situation [Villareal] confronted" (see Brosseau v. Haugen, 543 U.S. 194, 200 (2004)), mindful that there need not be a case "directly on point" (see Gravelet-Blondin v. Shelton, 728 F.3d 1086, 1093 (9th Cir. 2013).

The panel found the Court's decision in Garner to be instructive because, as in Herrera's case: (1) the crime at issue did not involve the use of deadly force; (2) Garner fled from police after an officer told him to "halt"; and (3) the officer in Garner had no reason to suspect that the suspect was armed.

Viewing the evidence in the light most favorable to the non-moving party, the panel held that Villarreal violated clearly established Fourth Amendment law when he shot and killed Herrera because Villarreal had no reason to suspect that Herrera was armed since: (1) the dispatcher expressly told the officers that Herrera was "not known to carry weapons;" (2) Villarreal never saw a gun; and (3) Villarreal could provide no basis for his belief that Herrera was armed except to say that Herrera had one hand "concealed."

Viewing the evidence in the light most favorable to the plaintiffs, the panel held that Villarreal clearly violated clearly established Fourth Amendment law when he"seize[d] an unarmed, nondangerous suspect by shooting him dead" and affirmed the district court's denial of qualified immunity.

To read full opinion, please visit:
https://cdn.ca9.uscourts.gov/datastore/opinions/2016/09/16/14-55184.pdf

Panel: William A. Fletcher, Mary H. Murguia, and John B. Owens, Circuit Judges.

Argument Date: Argued and Submitted March, 7, 2016

Date of Issued Opinion: September 16, 2016

Docket Number: 14-55184

Decided: Affirmed and Remanded.

Counsel: M. Lois Bobak (argued), Robert L Kaufman, and Daniel K. Spradlin, Woodruff Spradlin & Smart, APC, Costa Mesa, California, for Defendant-Appellant Officer Villarreal.

No appearance by Defendant-Appellant City of Tustin.

Dale K. Galipo (argued) and Eric Valenzuela, Law Offices of Dale K. Galipo, Woodland Hills, California, for Plaintiffs-Appellees.

Author of Opinion: Judge W. Fletcher, Circuit Judge.

Case Alert Author: Krysta Maigue

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 11/01/2016 04:42 PM     9th Circuit     Comments (0)  

  United States v. Carey - Ninth Circuit
Headline: Ninth Circuit panel expands the "plain view" doctrine and adopts the "plain hearing" doctrine, whereby police may use evidence of conversations of speakers unrelated to a target conspiracy overheard during execution of a valid wiretap for the target conspiracy only until such time that the police know or should reasonably know that the speakers are unrelated to the target conspiracy.

Area of Law: Criminal Procedure; Fourth Amendment, Exceptions to the Warrant or Probable Cause Requirements

Issue Presented: Whether the government may lawfully use evidence obtained from conversations overheard during the execution of a wiretap order for a phone number used in a drug conspiracy where the overheard conversations are those by persons unrelated to the drug conspiracy using the authorized phone number.

Brief Summary: The Appellant-Defendant, Michael Carey ("Carey"), was charged with conspiracy to distribute cocaine after federal officers overheard Carey in conversations during the execution of a wiretap order for an unrelated drug target conspiracy. The district court denied Carey's motion to suppress evidence and Carey appealed. The Ninth Circuit panel expanded the "plain view" doctrine and adopted the "plain hearing" doctrine, holding that: (1) the government may use evidence obtained from a valid wiretap "[p]rior to the officers' discovery of [a] factual mistake" that causes or should cause them to realize that they are listening to phone calls "erroneously within the terms of the "wiretap order and (2) once the officers know or should know they are listening to conversations outside the scope of the wiretap order, they must discontinue monitoring the wiretap until they secure a new wiretap order, if possible.

Significance: The Ninth Circuit panel, addressing an issue of first impression in this Circuit - whether the Wiretap Act can be used to authorize the government to listen to people who were unaffiliated with the initial wiretap subjects - expanded the "plain view" doctrine and adopted the "plain hearing" doctrine as an exception to the Fourth Amendment. The "plain hearing" doctrine allows the government to use evidence obtained from listening to conversations of speakers who are unrelated to the target of a valid wiretap, with the limitation that the government must discontinue listening once it knows or should know the conversations are unrelated to the target of the wiretap.

Extended Summary: FBI Special Agent Christopher Meltzer ("Meltzer") obtained a wiretap order for a phone number, T-14, based on evidence that the target of a drug conspiracy, Ignacio Escamilla Estrada ("Escamilla"), used T-14 to conduct the conspiracy. Several days into the execution of the wiretap order, agents overheard "drug-related" calls. At some point thereafter, the agents realized that the person using T-14 was not Escamilla, but did not know who the people speaking on T-14 were. Melzer initially believed that the callers and calls may still be affiliated with the known targets or part of the criminal activity that he was monitoring. Melzer consulted with federal prosecutors and agents continued to monitor the calls.

Agents subsequently intercepted a call indicating that someone would be traveling with "invoices" (believed to be code for drug money), and the agents coordinated with local police officers to conduct a traffic stop. During the traffic, officers searched the vehicle, finding cash and a cell phone tied to the T-14 number and identified the driver as Adrian Madrid ("Madrid"). Officers later obtained a search warrant for a related residence and found cocaine.

After identifying Madrid, Melzer learned that there was an ongoing DEA/ICE investigation into Madrid and his associates. After Meltzer met with ICE and DEA agents, they learned that there was no "overlap" between the Madrid and Escamilla conspiracies. Agents thereafter identified defendant-appellant, Michael Carey ("Carey") as a member of Madrid's conspiracy and Carey was indicted in February 2011 for conspiracy to distribute cocaine in violation of 21 U.S.C. §§ 841(a)(1) and 846.

Carey filed a motion to suppress "any and all evidence derived from the use of wiretaps" on grounds that the government failed to comply with the Wiretap Act, 18 U.S.C. §§ 2510-22, with respect to Carey and his coconspirators. The district court denied the motion on grounds that (1) the government had complied with the statute to obtain the wiretap order against Escamilla and (2) "[t]here was no requirement for a separate showing of necessity once the agents concluded that T-14 was not primarily used by Escamilla" because "the agents reasonably believed that the callers might be affiliated with Escamilla or other offenses." Carey then pled guilty in an agreement with Carey that preserved Carey's right to appeal the denial of his motion to suppress.

On appeal, Carey raised the issue whether government agents could lawfully use the Escamilla wiretap to listen to Carey's conversations. The Ninth Circuit panel noted that there was a lack of Ninth Circuit precedent squarely on point in a situation where 18 U.S.C. § 2517(5) was used to authorize law enforcement to listen to people who were unaffiliated with the original wiretap subjects. The Ninth Circuit panel also noted that while the government showed necessity and probable cause for a wiretap of the Escamilla conspiracy, the novel question raised in Carey's appeal was "what happens when a wiretap that is valid at its inception is later used to listen to someone who is not involved in the conspiracy under surveillance?"

Looking to dicta from the Seventh Circuit, the Ninth Circuit panel found United States v. Ramirez, 112 F.3d 849 (7th Cir. 1997) to be persuasive. In Ramirez, the Seventh Circuit explained in dicta that, "t is true that if government agents execute a valid wiretap order and in the course of executing it discover that it was procured by a mistake and at the same time overhear incriminating conversations, the record of the conversations is admissible in evidence. It is just the 'plain view' doctrine translated from the visual to the oral dimension." Id. at 851. But, "once the mistake is discovered, the government cannot use the authority of the warrant, or of the [wiretap] order, to conduct a search or interception that they know is unsupported by probable cause or is otherwise outside the scope of the statute or the Constitution." Id. at 852 (citing Maryland v. Garrison, 480 U.S. 79, 87-88 (1987) (holding that the search "[p]rior to the officers' discovery of the factual mistake" did not violate the Fourth Amendment so long as the officers' failure to realize the mistake "was objectively understandable and reasonable")).

On the one hand, Carey argued that Garrison "has limited application to wiretaps" because of the Wiretap Act's procedural requirements; however, the Ninth Circuit panel found Carey's argument to be unavailing because (1) the government complied with the Wiretap Act to obtain a valid wiretap on T-14 and (2) the issue on appeal was whether the government could use the valid wiretap of T-14 to listen to unrelated people's phone calls, which was a concern that mirrored the question in Garrison of whether officers could rely on a valid warrant for entry into an unrelated person's apartment.

On the other hand, the government argued that (1) the agents could continue listening to the conversations after the agents realized the speakers were not involved in the target conspiracy because the wiretap order authorized agents to listen to conversations of "others yet unknown" and (2) under 18 U.S.C. § 2517(5), the federal officers could continue listening to the conversations because the Wiretap Act authorized listening for evidence of other crimes.

As to the government's first argument, the Ninth Circuit panel concluded that (1) the wiretap order, when read in context, did not extend to unknown people not involved in the Escamilla Conspiracy and, therefore, did not authorize the wiretap of "others yet unknown" participating in a conspiracy "yet unknown"; and (2) the wiretap order could not authorize surveillance of a yet unknown conspiracy because the statute expressly requires agents to demonstrate probable cause and necessity to procure a wiretap order (see 18 U.S.C. § 2518(b)-(c)). Essentially, the Ninth Circuit panel interpreted "others yet unknown" as referring to others yet unknown who are participating in the target conspiracy and held that Melzer's affidavit contained no information about unknown people engaged in drug trafficking outside the Escamilla conspiracy.

As for the government's second argument, the Ninth Circuit panel reasoned that § 2517(5) only allows the government to use "communications relating to offenses other than those specified in the authorization or approval" when officers are "engaged in intercepting wire, oral, or electronic communications in the manner authorized [by the statute]." As such, the Ninth Circuit panel reasoned that the wiretap order did not authorize agents to listen to conversations outside the Escamilla conspiracy and § 2517(5) did not aid the government.

The panel therefore held that (1) "[t]he government may use evidence obtained from a valid wiretap '[p]rior to the officers' discovery of [a] factual mistake' that causes or should cause them to realize that they are listening to phone calls 'erroneously included within the terms of the' wiretap order (Garrison, 480 U.S. at 87-88) and (2) "once the officers know or should know they are listening to conversations outside the scope of the wiretap order, they must discontinue monitoring the wiretap until they secure a new wiretap order, if possible (id. at 87).

Applying this two-pronged rule to Carey's case, the panel noted that the government could only use evidence obtained in accordance with the "plain hearing" doctrine. On the record presented, the panel was unable to discern: (1) what evidence was obtained before the agents knew or should have known that they were listening to calls outside the Escamilla conspiracy; (2) the identities of the persons who called T-14; and (3) how much of the government's wiretap evidence may be outside of the "plain hearing" doctrine. The panel also found that the record lacked the factual findings necessary to determine what evidence was admissible against Carey. As such, the Ninth Circuit panel vacated the district court's order denying Carey's motion to suppress and remanded on an open record to determine what evidence is admissible against Carey under the "plain hearing" doctrine's framework.

To read the full opinion, please visit:
https://cdn.ca9.uscourts.gov/datastore/opinions/2016/09/07/14-50222.pdf

Panel: Alex Kozinski, William A. Fletcher, and Ronald M. Gould, Circuit Judges

Argument Date: May 6, 2016

Date of Issued Opinion: September 7, 2016

Docket Number: 14-50222

Decided: District Court ruling vacated and case remanded to determine what evidence was admissible under the "plain hearing" doctrine.

Case Alert Author: Camille Hooper

Counsel: Knut Sveinbjorn Johnson (argued) and Emerson Wheat, San Diego, California, for Defendant-Appellant.

Peter Ko (argued), Assistant United States Attorney, Chief Appellate Section, Criminal Division; Laura E. Duffy, United States Attorney; United States Attorney's Office, San Diego, California; for Plaintiff-Appellee.

Author of Opinion: Ronald M. Gould, Circuit Judge

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 11/01/2016 04:39 PM     9th Circuit     Comments (0)  

  NewGen, LLC v. Safe Cig, LLC
Headline: After plaintiff's complaint failed to properly allege the citizenship of the defendant LLC to invoke diversity jurisdiction and a $1.5 million default judgment entered, the district court properly granted plaintiff leave to amend its complaint to correct the defective jurisdictional allegation and denied defendant's 60(b) motion to set aside the default judgment.

Areas of Law: Federal Civil Procedure: Diversity Jurisdiction

Issues Presented: (1) Whether the district court erred in permitting the plaintiff to amend its original complaint to cure the defective allegations of diversity jurisdiction under 28 U.S.C. § 1653, without reopening the default judgment. (2) Whether Safe Cig challenged the factual basis for diversity jurisdiction, triggering an obligation on the part of NewGen to offer supplemental evidence proving jurisdiction. (3) Whether the district court abused its discretion in the denial of relief from the default judgment.

Brief Summary: The Ninth Circuit panel affirmed the district court's grant of an approximately $1.5 million default judgment against Safe Cig, LLC ("Safe Cig") and in favor of NewGen, LLC ("NewGen") after accepting NewGen's amended allegations of diversity citizenship as true.

The Ninth Circuit panel held that the district court properly allowed NewGen to amend its original complaint pursuant to 28 U.S.C. § 1653 to properly allege diversity jurisdiction under 28 U.S.C. § 1332 after entry of the default judgment, finding that the operative statute, § 1653, applies to both judgments on the merits and default judgments.

Next, the Ninth Circuit panel held that the district court had subject matter jurisdiction, reasoning that Safe Cig's initial appeal and its Fed. R. Civ. P. 60(b) motion raised only facial, not factual, challenges to the district court's subject matter jurisdiction. Because a facial attack that challenges the legal sufficiency of the jurisdictional allegations warrants only leave to amend the allegations of diversity jurisdiction, not wholesale revival of a defaulted defense and an obligation to supplement the record, the panel held that "the amended allegations - which were undoubtedly legally sufficient - resolved the only question ever raised regarding the district court's subject matter jurisdiction."

Finally, after weighing the factors set forth in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986), the panel that the district court's decision to enter default judgment was not an abuse of discretion.

Significance: Ninth Circuit panel holds that 28 U.S.C. § 1653 allows a plaintiff to amend its original complaint to cure defective allegations of diversity jurisdiction after default judgment has been entered where the defendant's 60(b) motion and appeal raises only facial challenges to the court's subject matter jurisdiction. Defendant's assertion that it is "without knowledge or information sufficient to form a belief" as to the domiciles of its members does not controvert the complaint's jurisdictional allegations and, therefore, does not impose a burden on the plaintiff to come forward with evidence to prove subject matter jurisdiction.

Extended Summary: NewGen, LLC ("NewGen"), a Wisconsin limited liability company, is an online marketing agency that contracted with the Safe Cig, LLC ("Safe Cig"), a California limited liability company, to promote the sale of Safe Cig's electronic cigarettes. The terms of the relationship were set out in two separate agreements - an Affiliate Agreement and a Consulting Agreement - under which NewGen agreed to attract online customers to Safe Cig's website.

NewGen alleged that Safe Cig breached both agreements by failing to: (1) pay NewGen its lifetime 20% commission on all sales resulting from NewGen's referrals, (2) grant NewGen access to its sales records to verify those commissions, (3) pay NewGen in exchange for not launching a competitor, and (4) pay NewGen for general marketing and business consultant services.

Three days after NewGen filed this complaint, NewGen properly served Safe Cig with process by serving Safe Cig's registered agent, notwithstanding resistance on the agent's part. Safe Cig thereafter failed to respond to the complaint on ground that service of process had been effective.

NewGen filed an application for default judgment, which the district court entered.
On the same day that the default judgment was entered, Safe Cig contacted NewGen and offered a deal: it would not contest service in exchange for a 60-day extension to respond to the complaint. NewGen rejected Safe Cig's offer, and the default judgment was entered. The district court found that service was effective and that it had diversity jurisdiction.

In response to the default judgment, Safe Cig launched a two-pronged attack: (1) Safe Cig appealed to the Ninth Circuit, claiming relief from judgment because the entry of default was an abuse of discretion under Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) and (2) Safe Cig filed in the district court a Rule 60(b) motion for relief from the judgment, requesting the district court to declare the default judgment void for lack of subject matter jurisdiction.

Both parties and the district court agreed that the original complaint failed to properly plead diversity jurisdiction. Instead of alleging the citizenship of the members of the limited liability companies, the complaint improperly alleged that NewGen was a Wisconsin limited liability company with its principal place of business in Wisconsin, and that Safe Cig was California limited liability company with its principal place of business in California The district court granted NewGen leave to amend the complaint to cure the defective allegations because: (1) the record established that "none of the members of Safe Cig were domiciliaries of Wisconsin when the case was filed, "and thus, "ecause NewGen and Safe Cig were not citizens of the same state when the case was filed, the [district court] had jurisdiction over the matter;" (2) NewGen did not have affirmative duty to prove diversity with affidavits because Safe Cig had not denied NewGen's factual allegations of diversity; and (3) NewGen "could have met [Safe Cig's] facial challenge simply by amending the jurisdictional allegations of the complaint." Thus, the district court denied the Rule 60(b) motion on condition that NewGen amend its complaint to cure the original, "defective" allegations of jurisdiction pursuant to 28 U.S.C. § 1653.

NewGen thereafter filed its amended complaint properly alleging diverse citizenship. Safe Cig filed an answer challenging the allegations based on Safe Cig's purported lack of knowledge and information about the citizenship of its members. Because the district court found that Safe Cig had not challenged the veracity of NewGen's allegations of citizenship, it likewise found that the answer did not upset "the Court's previous finding that the judgment in this case was not void for want of subject matter jurisdiction."
The Ninth Circuit panel first held that the district court acted within its statutory authority under 28 U.S.C.§ 1653 to permit NewGen to amend its complaint to correct its jurisdictional allegations, interpreting the text of section 1653 to be a "liberal amendment rule" that "permits a party who has not proved, or even alleged, that diversity exists to amend his pleadings even as late as on appeal." Furthermore, the panel interpreted the intent of section 1653 to avoid the needless expenditure of judicial resources where a court can instead "permit the action to be maintained if it is at all possible to determine from the record that jurisdiction does in fact exist."

The panel rejected Safe Cig's assertion that section 1653 applies only to judgments on the merits and not default judgments, finding nothing in the text of section 1653 to not justify exempting default judgments from § 1653.

The panel next considered whether Safe Cig successfully challenged the factual basis of NewGen's complaint alleging diversity jurisdiction thereby triggering an obligation on the part of NewGen to offer supplemental evidence proving jurisdiction. Noting that a "Rule 60(b) motion may encompass a claim that the district court acted in excess of its jurisdiction," the panel reasoned that only upon a factual attack does a plaintiff have an affirmative obligation to support jurisdictional allegations with proof. Letite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2004). Conversely, a facial attack is easily remedied by leave to amend jurisdictional allegations pursuant to § 1653.

The panel rejected Safe Cig's argument that its lack of knowledge about the citizenship of its own members raised a jurisdictional challenge that shifted the burden to Safe Cig to come forward with evidence that jurisdiction was wanting, finding that: (1) at no point did Safe Cig assert that any of its members were citizens of Wisconsin, or argue that NewGen's sole member was not a citizen of Wisconsin; (2) Safe Cig never challenged or questioned any of the factual predicates to diversity jurisdiction: and (3) most importantly, Safe Cig never asked for discovery to clarify the issue.

Accordingly, the panel held that, "because the only real challenge to jurisdiction concerned the sufficiency of the pleadings, the amended allegations - which were undoubtedly legally sufficient - resolved the only question ever raised regarding the district court's subject matter jurisdiction." Satisfied that the district court had subject matter jurisdiction and that the amended complaint corrected any defect in the pleadings, the panel then reviewed whether the district court abused its discretion in denying the defendants request for relief from the default judgment.

Finally, the panel rejected the Safe Cig's contention that the district court abused its discretion in denying Safe Cig's motion to vacate the default judgment. The panel considered the following factors: (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a dispute concerning material facts, (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel, 782 F.2d at 1471-72.

In weighing the Eitel factors, the Ninth Circuit panel found that numerous factors weighed in favor of entry of default judgment, such as: (1) Safe Cig's blatant attempt to resist service, despite being properly served; (2) Safe Cig's failure respond to the complaint; (3) Safe Cig's failure to give any "credible, good faith explanation" for its apparent bad faith "intention to take advantage of the opposing party, interfere with judicial decisionmaking, or otherwise manipulate the legal process; (4) Safe Cig's failure to "present specific facts that would constitute a defense" or that would substantially alter the liability at stake; and (5) the fact that Safe Cig's counsel waited until default was entered to finally contact NewGen's attorneys..

Observing that that it was not the appellate court's role to second-guess the district court's weighing of the Eitel factors, the panel held that the district court's decision to enter default judgment was not an abuse of discretion.

To read the full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/09/07/13-56157.pdf

Panel: M. Margaret McKeown and Sandra S. Ikuta, Circuit Judges, and Robert W. Pratt, District Judge.

Argument Date: February 11, 2016

Date of Issued Opinion: September 7, 2016

Docket Number: 13-56157; 14-57015; 13-56225

Decided: Affirmed the district court's grant of default judgment against Safe Cig, LLC and in favor of NewGen, LLC, holding that the district court had subject matter jurisdiction to enter the judgment because both Safe Cig's initial appeal and its Fed. R. Civ. P. 60(b) motion were facial and not factual attacks on the district court's subject matter jurisdiction, and that Safe Cig never called into question the factual predicates to establish diversity jurisdiction, nor did the district court abuse its discretion is denying Safe Cig's request for relief from default judgment.

Case Alert Author: Sean Kurdoglu

Counsel:
Ricardo P. Cestero (argued) and Daniel G. Stone, Greenberg Glusker Fields Claman & Machtinger LLP, Los Angeles, California; for Appellant/Cross-Appellee.

Harry E. Van Camp (argued) and Deborah C. Meiners, DeWitt Ross & Stevens S.C., Madison, Wisconsin, for Appelle/Cross-Appellant.

Author of Opinion: Judge M. Margaret McKeown

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 11/01/2016 04:35 PM     9th Circuit     Comments (0)  

October 31, 2016
  Teutscher v. Riverside Sheriff's Association
Headline: The Ninth Circuit holds the district court erred in awarding ERISA front pay and reinstatement after the jury already had awarded front pay for state employment law violations.

Areas of Law: Seventh Amendment, ERISA, Remedies

Issues Presented: (1) Whether an award of the equitable remedies of front pay and reinstatement pursuant to ERISA violates the Seventh Amendment after the jury already awarded front pay as damages for state employment law violations; and (2) whether an employee who elected the remedy of front pay would have an unlawful double recovery if also awarded the equitable remedy of reinstatement pursuant to ERISA.

Brief Summary: Plaintiff-Appellee Scott Teutscher ("Teutscher") sued his former employer, Riverside Sheriffs' Association ("RSA") for retaliatory discharge, alleging violations of California law and the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001-1461 ("ERISA"). The jury, using a general verdict form to which neither party objected, awarded Teutscher compensatory damages and punitive damages. Implicit in the jury's award, were amounts for back pay, front pay, and pain, suffering, and emotional distress. Thereafter, the district court ordered Teutscher's reinstatement plus $98,235 per year until reinstatement as ERISA equitable remedies. On appeal, the Ninth Circuit panel reversed the district court's equitable award of front pay on the ERISA claim as violating the Seventh Amendment and the court's reinstatement order because it was duplicative of the front pay remedy.

Significance: When a discharged employee alleges violations of state employment law and ERISA, and the jury's verdict on the state claims includes front pay, it is a violation of the Seventh Amendment for a district court to award additional front pay pursuant to ERISA. Additionally, if the employee elects the remedy of front pay, he may not receive the remedy of reinstatement to cover the same period of time as this would be an unlawful double recovery.

Extended Summary: Riverside Sheriffs' Association ("RSA") is an organization representing law enforcement employees in various collective bargaining agreements. It also administers a Legal Defense Trust ("Trust") governed by ERISA. Teutscher, at-will employee, was the Trust's Legal Operations Manager. He became suspicious that RSA was providing legal services for a criminal defense that was not permitted under the plan. When he informed RSA that he had expressed his concerns to local law enforcement, he was terminated. Teutscher then filed a lawsuit alleging wrongful termination. His complaint included claims for violations of Section 510 of ERISA, 29 U.S.C. § 1140, California Labor Code §§ 98.6 and 1102.5, and California common law.

At trial, a jury decided the state claims. The district court instructed the jury to calculate any damages based on what Teutscher would have earned up to the trial, the value of any future wages and benefits he would have accrued for as long as the jury found he would have been employed by RSA, and punitive damages if they found RSA's conduct was a substantial factor in causing his harm. Using a general verdict form to which neither party objected, the jury awarded Teutscher $457,250 in compensatory damages and $357,500 in punitive damages. Subsequently, the district court held a bench trial on the ERISA claim. The court awarded the equitable remedies of reinstatement and front pay of $98,235 per year until Teutscher was reinstated. RSA appealed on the grounds that the district court violated the Seventh Amendment by awarding additional front pay and the prohibition against double recovery by awarding front pay and reinstatement to cover the same period of time.

On appeal, the Ninth Circuit panel reversed the district court's equitable awards of front pay and reinstatement. As to the first issue, the court recognized that Seventh Amendment provides the right to trial by jury is to be preserved in suits at common law and that "no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law." In this case, the state law claims and the remedy of damages were legal remedies, while the relevant ERISA remedies were exclusively equitable. Thus, Teutscher had a right to a jury trial on the state claims, but not for the ERISA remedies. The court also cited Dairy Queen, Inc. v. Wood, 369 U.S. 469, 479 (1962). In Dairy Queen the United States Supreme Court held that where legal and equitable claims turn on common issues of fact, any legal issues must be determined by the jury, and the jury's determination of the issues must occur prior to any final court determination of the equitable claims.

The Ninth Circuit found that the district court contravened these constitutional restraints. Although the district court's ERISA remedies shared common questions of fact with the jury's damages calculation, the court's findings conflicted with the jury's on front pay. Teutscher's California damages claims included front pay for salary and benefits he would have earned from employment after the trial. Thus, a legal front pay award under the state's law turned on the same issues of facts as an equitable front pay award under ERISA. The jury decided the front pay issue, and the Seventh Amendment does not permit the jury's findings to be cast aside in this matter. For this reason, the district judge erred in awarding additional front pay.

The court rejected Teutscher's argument that the jury did not actually award him front pay. First, the Ninth Circuit found that the lump-sum format of the jury verdict form prevented it from ascertaining the relative amounts of back pay and front pay that the jury awarded. Teutscher asked the jury to award him front pay and did not object to the lump-sum verdict form, thereby waiving any argument that the jury's verdict should or could be parsed between its compensatory components. It is possible the damages award included front pay. Moreover, even if the court could parse the jury award and find the jury awarded zero front pay, this would be a jury finding of fact. For these reasons, the district court had no authority to disregard the jury's findings and award additional front pay.

Next, the Ninth Circuit considered whether the district court erred in ordering Teutscher's reinstatement because of the potential overlap with his damages award and because Teutscher waived reinstatement when he elected to seek front pay from the jury. The court discussed how the doctrine of double recovery dictates that a plaintiff can recover no more than the loss actually suffered. A plaintiff is unjustly enriched when he receives damages in excess of his injuries. The ERISA equitable remedies of reinstatement and front pay are alternative remedies which cannot be awarded to cover the same period of time.

In this case, Teutscher waived his right to reinstatement when he affirmatively elected to seek front pay from the jury. Under the election of remedies doctrine, a party is bound by his election of remedies if three conditions are met: "(1) two or more remedies ... existed at the time of the election, (2) these remedies [are] repugnant and inconsistent with each other, and (3) the party to be bound ... affirmatively chose[], or elected, between the available remedies." Because all of these conditions are met in the instant case, Teutscher was foreclosed from seeking the reinstatement remedy.

For these reasons, the Ninth Circuit reversed the district court's equitable awards of front pay and reinstatement.

To read the full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/08/26/13-56411.pdf

Panel: Milan D. Smith, Jr., Paul J. Watford, and Michelle T. Friedland, Circuit Judges

Argument Date: January 5, 2016

Date of Issued Opinion: August 26, 2016

Docket Number: 13-56411

Decided: Reversed the district court's ERISA equitable awards of reinstatement and front pay

Case Alert Author: Amanda Cline

Counsel: Daniel P. Stevens (argued) and Heather K. McMillian, Stevens & McMillian, Tustin, California, for Plaintiff-Appellee

Jon R. Williams (argued), Williams Iagmin LLP, San Diego, California, for Defendant-Appelle.
William N. Woodson, III (argued), Law Offices of Wm. N. Woodson, III APC, Fallbrook, California, pro se Intervenor-Appellant

Author of Opinion: Judge Friedland

Concurrence: Judge Smith

Circuit: Ninth Circuit

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 10/31/2016 12:41 PM     9th Circuit     Comments (0)  

October 27, 2016
  Diaz v. City of Anaheim
Headline: The Ninth Circuit held that the district court erred by not bifurcating the liability and damages phases of a trial involving allegations of excessive force by police and by admitting inflammatory gang affiliation evidence on the question of liability.

Areas of Law: Civil Rights, Civil Procedure, Evidence

Issues Presented: Whether the district court erred in not bifurcating the liability and damages phases of a trial involving alleged excessive force by the police and allowing the jury to hear prejudicial gang affiliation evidence on the question of liability.

Brief Summary: The Ninth Circuit panel reversed the decision of the district court and remanded the case for a new trial. Inflammatory evidence of gang membership was irrelevant to the question of whether the police used excessive force. The district court erred by not bifurcating the liability and damages phases of the trial and admitting gang membership evidence on the question of liability. As to the excessive force claim, the Ninth Circuit panel affirmed the district court's decision to deny Plaintiffs' motion for judgment as a matter of law.

Extended Summary: City of Anaheim Police Officer Nicholas Bennallack ("Bennallack") shot and killed Manuel Diaz ("Diaz") after a foot pursuit in gang territory in the city. Bennallack testified he shot Diaz because he believed Diaz had a gun and was ready to fire. Other witnesses disagreed about Diaz's movements. Although officers found a cell phone and narcotics pipe nearby Diaz, no firearm was recovered at the scene. Diaz died a short time later.

Diaz's estate and his mother ("Plaintiffs") sued the City of Anaheim and Bennallack for non-economic damages under 42 U.S.C. § 1983, claiming for excessive force, unlawful detention under the Fourteenth Amendment, and battery.

Before the trial, the district court ruled on a number of motions in limine relating to Diaz's gang affiliation as to the issue of liability. The court excluded photographs of Diaz's gang tattoos, but noted that it would revisit the admissibility issue if Diaz's mother testified that she had no knowledge of his gang affiliation. The court also decided a gang expert could testify as to Diaz's gang membership, but only relevant as to damages. It excluded unduly prejudicial testimony about gang activities in general and Diaz's specific gang activities.

Plaintiffs moved to bifurcate the liability phase from the damages phase to keep prejudicial information unknown to Bennallack at the time of the shooting from the jury. The district court agreed to sever punitive damages from liability and compensatory damages, but refused to bifurcate liability from compensatory damages, explaining that limiting instructions would cure any potential prejudice.

During the trial, and over Plaintiffs' attorney's repeated objections, the district court's evidentiary rulings failed to comport with its pretrial rulings so that the jury was exposed to "copious amounts of inflammatory and prejudicial evidence with little (if any) relevance." The most prejudicial evidence related to Diaz's gang membership, including testimony from the gang expert, photographs featuring Diaz's gang tattoos, and Diaz posing with guns and throwing gang signs, none of which Bennallack knew about when he shot Diaz. Although the court at times ordered the gang expert's testimony stricken, the jury was exposed to testimony wholly irrelevant to liability and of limited relevance even as to damages. Other inflammatory evidence admitted over Plaintiffs' objections concerned Diaz's drug use, the amount of methamphetamine in Diaz's system at the time of the shooting, and whether Diaz was under the influence of methamphetamine when shot.

After hearing the evidence, the jury returned a verdict for Defendants, finding Bennallack did not use excessive or unreasonable force. Plaintiffs moved for a new trial, but the court denied the motion. This appeal followed.

The Ninth Circuit panel began its opinion by stating that Federal Rule of Civil Procedure 42(b) permits a trial court to order a separate trial of separate claims or issues for convenience, to avoid prejudice, or to economize. This includes the authority to separate trials into liability and damages phases. De Anda v. City of Long Beach, 7 F.3d 1418, 1421 (9th Cir. 1993). The court held that the district court abused its discretion by refusing to bifurcate the compensatory damages phase, thereby allowing unduly prejudicial evidence on the question of liability. As a result, despite the trial court's pre-trial evidentiary rulings, the jury was exposed to "copious amounts of inflammatory and prejudicial evidence" relating to Diaz's alleged gang activity and drug use. Gang evidence has the potential to be particularly prejudicial. Kennedy v. Lockyear, 379 F.3d 104,1055 (9th Cir. 2004). The court described the gang evidence here as "simply overkill."

The Ninth Circuit panel cautioned that it was not announcing a rule that requires district courts to "always, usually, or frequently" bifurcate damages from liability, as trial courts have broad discretion. But where graphic and prejudicial evidence about the victim has little or in large part no relevance on the liability issue, courts should bifurcate.

To assist the district court in the retrial of this case, the court provided the following "guidance." First, evidence of Diaz's drug use and gang affiliation has marginal, if any, probative value as to damages, and none as to liability. Second, if Plaintiffs will stipulate Diaz was a gang member, no expert testimony about gangs should be admitted. Third, the district court should recognize that a limiting instruction may not sufficiently mitigate the prejudicial impact of evidence in all cases. Fourth, if the trial court is going to strike testimony, the court should clearly identify what testimony was improperly given and instruct the jury that it may not be considered. Further, the court should warn witnesses and attorneys that further attempts to "push the envelope" could lead to greater sanctions as "lawyers and witnesses, like misbehaving children or rattled basketball players, sometimes need a timeout."

Finally, the Ninth Circuit panel considered the Plaintiff's cross-appeal, claiming the district court erred in denying their motion for judgment as a matter of law on the excessive force issue. The court affirmed the denial of the motion because there were factual issues for the jury to resolve.

To read the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...16/08/24/14-55644.pdf

Panel: Marsha S. Berzon and John B. Owens, Circuit Judges, and Alegnon L. Marbley, District Judge

Argument Date: July 7, 2016

Date of Issued Opinion: August 24, 2016

Docket Number: No. 14-55644

Decided: Reverse and Remanded

Case Alert Author: Kimberly Dang

Counsel: Dale K. Galipo (argued) and Melanie T. Partow, Law Offices of Dale K. Galipo, Woodland Hills, California; Angel Carrazco, Kr., Carrazco Law, A.P.C., Tustin, California; Paul L. Hoffman, Schonbrum Desimone Seplow Harris & Hoffman, LLP, Venice, California; Humberto Guizar, Humberto Guizar Law Offices, Montebello, California; for Plaintiffs-Appellants

Moses W. Johnson, IV (argued), Assistant City Attorney, Anaheim, California; Steven J. Rothans and Jill Williams, Carpenter, Rothans & Dumont, Los Angeles, California; for Defendants-Appellants

Author of Opinion: Judge Owens

Circuit: Ninth Circuit

Case Alert Supervisor: Philip Merkel

    Posted By: Glenn Koppel @ 10/27/2016 03:42 PM     9th Circuit     Comments (0)  

  Castro v. County of Los Angeles
Headline: The Ninth Circuit, sitting en banc, upholds a jury verdict under 42 U.S.C. § 1983 finding individual and municipal entity defendants liable for violating pretrial detainee's fundamental due process right to be protected from harm at the hands of another inmate.

Areas of Law: Civil Rights, Constitutional Law, Fourteenth Amendment, Due Process Clause, Pretrial Detainees

Issues Presented: (1)Whether the evidence supported the jury finding that defendant jail employees knew of the substantial risk of serious harm and thus were liable for plaintiff's injuries resulting from a beating by another inmate; and (2) whether the evidence supported the jury finding that the entity defendants had notice that their customs and policies posed a substantial risk to persons detained in a sobering cell and were deliberately indifferent to that risk.

Brief Summary: The Ninth Circuit affirmed the district court's judgment in an action brought against individual defendants Christopher Solomon and David Valentine and entity defendants County of Los Angeles and Los Angeles Sheriff's Department under 42 U.S.C. § 1983 by Plaintiff Jonathan Michael Castro. Castro, a pretrial detainee, alleged his due process right to be protected from harm was violated when he was severely beaten and injured in his cell by another inmate. The jury returned a verdict for Castro and the district court denied defendants' motion for judgment as a matter of law. A three-judge panel of the Ninth Circuit affirmed the judgment as to Solomon and Valentine but reversed as to the County and the Sheriff's Department. A majority of active non-recused judges voted to rehear the case en banc.

Relying on Kingsley v. Henrickson, 135 S. Ct. 2466 (2015), the Ninth Circuit concluded that the evidence supported the jury's findings that Solomon and Valentine were responsible for Castro's injuries. It held that a pretrial detainee must prove the following in a Fourteenth Amendment failure-to-protect claim against an individual officer: (1) The defendant made an intentional decision with respect to the conditions under which the plaintiff was confined; (2) those conditions put the plaintiff at substantial risk of suffering serious harm; (3) the defendant did not take reasonable available measures to abate that risk, even though a reasonable officer under the circumstances would have appreciated the high degree of risk involved - making the consequences of the defendant's conduct obvious; and (4) by not taking such measures the defendant caused plaintiff's injuries.

The Ninth Circuit also held that the entity defendants had notice that their customs or policies posed a substantial risk of serious harm to persons detained in the sobering cell and were deliberately indifferent to that risk. The Court found that the custom or policy to use a sobering cell that lacked adequate surveillance caused Castro's injury, and that substantial evidence supported the jury's finding that the entity defendants knew the customs and policies could lead to a constitutional violation.
Significance: The Ninth Circuit announced the standards to analyze Fourteenth Amendment failure-to-protect claims brought by pretrial detainees against individual and entity defendants.
Extended Summary: Plaintiff-Appellee Castro ("Castro") was detained by the Los Angeles Sheriff's Department and put in a sobering cell in the West Hollywood police station. Several hours later, authorities placed John Gonzales ("Gonzales") in the same cell. Gonzales had been arrested on a felony charge and was enraged and combative. Castro banged on the cell's window to try and attract attention but no officials responded. An unpaid community volunteer walked by the cell about 20 minutes after Castro had sought help and noticed that Gonzales was inappropriately touching Castro's thigh while Castro appeared to be asleep. The volunteer did not enter the cell to investigate. Six minutes later Solomon, the station's supervising officer, arrived at the cell and discovered Gonzales stomping on Castro's head and found Castro lying unconscious in a pool of blood. Castro was hospitalized for four days and transferred to a long-term care facility where he remained for four years.

Castro filed a complaint against Solomon and Solomon's supervisor, Valentine ("individual defendants"), and the County of Los Angeles and the Los Angeles County Sheriff's Department ("entity defendants") claiming that Castro's constitutional rights were violated as a result of being housed in the sobering cell with Gonzales without appropriate supervision.

After Castro presented his case at trial, defendants moved for judgment as a matter of law on the grounds that: (1) there was insufficient evidence that the design of a jail cell constitutes a policy, practice, or custom by the County of Los Angeles that resulted in a constitutional violation; (2) there was insufficient evidence that a reasonable officer would have known that housing Castro and Gonzales together was a violation of Castro's constitutional rights; and (3) there was insufficient evidence for the jury to award punitive damages. The district court denied the motion. The jury returned a verdict for Castro and awarded him over $2 million in damages. Defendants renewed their motion for judgment as a matter of law, but the district court denied it. Defendants timely appealed.

A three-judge panel of the Ninth Circuit affirmed the judgment of the district court as to the individual defendants, but reversed as to the entity defendants. Castro v. County of Los Angeles, 797 F.3d 654 (9th Cir. 2015). A majority of active non-recused judges thereafter voted to rehear the case en banc. Castro v. County of Los Angeles, 809 F.3d 536 (9th Cir. 2015).

Claim against the individual defendants: The first issue addressed in the en banc opinion is the claim against the individual defendants. They maintained that they are entitled to qualified immunity and that Castro failed to show that they were deliberately indifferent to a substantial risk of serious harm. In determining whether an officer is entitled to qualified immunity, a court must evaluate two independent questions: (1) whether the officer's conduct violated a constitutional right, and (2) whether that right was clearly established at the time of the incident. See Pearson v. Callahan, 555 U.S. 223, 232 (2009).

Here, the Ninth Circuit recognized Castro's due process right, as a pretrial detainee who had not been convicted of any crime, to be free from violence from other inmates. The Ninth Circuit noted that a right is clearly established when the "contours of the right [are] sufficiently clear that a reasonable official would understand that what he is doing violates that right." Anderson v. Creighton, 483 U.S. 635, 640 (1987). The "contours" of Castro's rights were his right to be free from violence at the hands of other inmates. Farmer v. Brennan, 511 U.S. 825, 833 (1994). The Ninth Circuit determined that these "contours" are clearly established. They require only that individual defendants take reasonable measures to mitigate the substantial risk to Castro. Thus, qualified immunity does not bar the claim against the individual defendants.

In order for a pretrial detainee to sue prison officials under the Fourteenth Amendment's Due Process Clause for failure to protect or for the use of excessive force, the plaintiff must show that the prison officials acted with "deliberate indifference." Bell v. Wolfish, 441 U.S. 520, 535 (1979). The standard to prove "deliberate indifference" under the Eighth Amendment is well established. An "official must demonstrate a subjective awareness of the risk of harm" in order to find an individual deliberately indifferent under the Eighth Amendment. Conn v. City of Reno, 591 F.3d 1081 (9th Cir. 2010).

The standard for deliberate indifference under the Fourteenth Amendment is less clear. In Clouthier v. County of Contra Costa, 591 F.3d 1232 (9th Cir. 2010), the Ninth Circuit held the subjective test applied in Fourteenth Amendment cases. The Supreme Court, however, cast doubt on that holding in Kingsley v. Hendrickson, 135 S. Ct. 2466 (2015). Kingsley involved the use of excessive force against a pretrial detainee. The Supreme Court held the detainee must show only that the forced used against him was objectively unreasonable. Id. at 2473-74.

In the instant case, the Ninth Circuit applied the Kingsley objective standard to failure-to-protect claims and overruled the portions of Clouthier requiring a plaintiff to prove subjective intent to punish. The court recognized that an excessive force claim requires an affirmative act while a failure-to-protect claim usually involves inaction. The first question in a failure-to-act case is whether the officer's conduct was intentional. The second question involves the objective standard: whether a substantial risk of harm could have been eliminated through reasonable and available measures that the officer did not take.

Putting these principles together, the Ninth Circuit held the elements of a pretrial detainee's Fourteenth Amendment failure-to-protect claim against an individual officer are: (1) that the defendant made an intentional decision with respect to the conditions under which the plaintiff was confined; (2) that those conditions put the plaintiff at substantial risk of suffering serious harm; (3) that the defendant did not take reasonable measures to abate the risk, even though a reasonable officer in the circumstances would have appreciated the high degree of risk involved; and (4) that by not taking such measures, the defendant caused the plaintiff's injuries.

Here, the individual defendants did not argue that their conduct was unintentional. The Ninth Circuit held there was sufficient evidence for the jury to find the individual defendants knew of the substantial risk of serious harm to Castro and that a reasonable officer would have appreciated the risk. On that basis, the Ninth Circuit found the evidence sufficient to sustain the judgment in favor of Castro.

Claim against the entity defendants: The second issue addressed on appeal was the claim against the entity defendants. Pursuant to the Supreme Court holding in Monell v. Department of Social Services, 436 U.S. 658, 694 (1978), in order to establish municipal entity liability, a plaintiff must show that a "policy or custom" led to the plaintiff's injury. In City of Canton v. Harris, 489 U.S. 378, 392 (1989), the Court further held that the plaintiff must demonstrate that the policy "reflects deliberate indifference to the constitutional rights of its inhabitants."

The Ninth Circuit addressed whether the entity defendants had a policy or custom that caused Castro's injury. The entity defendants argued that the architecture of the West Hollywood police station's sobering cell cannot be a policy, custom, or practice. The Ninth Circuit avoided deciding this question by holding that inadequate audio monitoring of the sobering cell and the policy to check on inmates only every 30 minutes amounted to a "custom or policy" under the standard. Had the entity defendants provided consistent monitoring or had they required Castro and Gonzales to be housed in different cells, the attack could have been averted. Therefore, the entity defendants' custom or policy caused Castro's injury.

Next, the court addressed whether the custom or policy reflected deliberate indifference on the part of the entity defendants. In City of Canton, the Supreme Court articulated a standard for permitting liability on a showing of "actual or constructive notice that the particular omission is substantially certain to result in the violation of the constitutional rights of their citizens." 489 U.S. at 396. In determining whether a policy or custom is adhered to with deliberate indifference, the Court established that an objective standard applies. See Gibson v. County of Washoe, 290 F.3d 1175, 1195 (9th Cir. 2002). The Ninth Circuit found that the West Hollywood police station's manual mandates that a sobering cell allow for maximum visual supervision of prisoner by staff, but the cell was non-compliant in this regard. The manual provision was aimed at mitigating the risk of serious injury to individuals housed in sobering cells. This conclusively showed that the entity defendants knew of the risk of the very type of harm that befell Castro. For these reasons, judgment against the entity defendants was affirmed.


To read the full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/08/15/12-56829.pdf
Panel (en banc): Sidney R. Thomas, Chief Judge, and Susan P. Graber, Ronald M. Gould, Richard A. Paez, Consuelo M. Callahan, Carlos T. Bea, Milan D. Smith, Jr., Sandra S. Ikuta, Paul J. Watford, John B. Owens, and Michelle T. Friedland, Circuit Judges
Argument Date: March 22, 2016

Date of Issued Opinion: August 15, 2016

Docket Number: 12-56829

Decided: Affirmed.

Case Alert Author: Brandon Homan
Counsel: Melinda Cantrall (argued) and Thomas C. Hurrell, Hurrell Cantrall LLP, Los Angeles, California, for Defendants-Appellants
John Burton (argued), Law Offices of John Burton, Pasadena, California; Maria Cavalluzzi, Cavalluzzi & Cavalluzzi, Los Angeles, California; and M. Lawrence Lallande, Lallande Law PLC, Long Beach, California, for Plaintiff-Appellee
David M. Shapiro (argued), Roderick and Solange MacArthur Justice Center, Northwestern University School of Law, Chicago, Illinois; Paul W. Hughes, Mayer Brown LLP, Washington, D.C.; David C. Fathi, ACLU National Prison Project, Washington, D.C.; Peter Eliasberg, ACLU Foundation of Southern California, Los Angeles, California; for Amici Curiae ACLU of Southern California, American Civil Liberties Union, Human Rights Defense Center, National Police Accountability Project, and Roderick and Solange MacArthur Justice Center
Author of Opinion: Circuit Judge Susan P. Graber

Dissent: Circuit Judge Consuelo M. Callahan dissented in part, joined by Judges Carlos T. Bea and Sandra S. Ikuta. Judge Callahan agreed with the judgment against the individual defendants but disagreed as to the entity defendants.

Dissent: Circuit Judge Sandra S. Ikuta dissented, joined by Judges Consuelo M. Callahan and Carlos T. Bea, to express disagreement with in the majority's interpretation of Kingsley v. Hendrickson, 135 S. Ct. 2466 (2015).

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 10/27/2016 03:36 PM     9th Circuit     Comments (0)  

  Dugard v. United States
Dugard v. United States - Ninth Circuit

Headline: A Ninth Circuit panel references California law in holding that the Federal Tort Claims Act ("FTCA") does not impose a duty on the U.S. government to protect the general public from injuries caused by convicts released on parole.

Areas of Law: Federal Tort Claims Act, Sovereign Immunity

Issue Presented: Whether the United States is liable for negligence under the FTCA for its probation officers' failure to control a dangerous parolee where a private individual would not be liable in like circumstances under California law.

Brief Summary: The Ninth Circuit considered the district court's grant of summary judgment finding that federal parole officers are not liable for the actions of parolees under the FTCA. Appellant Jaycee Dugard ("Dugard"), who was kidnapped and imprisoned for 18 years by parolee Phillip Garrido's ("Garrido"), sued the United States on behalf of herself and her minor children claiming that federal parole officers' failure to report Garrido's parole violations caused them injury. The district court granted summary judgment on the grounds that the United States waived sovereign immunity under the FTCA, 28 U.S.C. § 2674, only in cases where a private individual would be liable in like circumstances under applicable state law. The district court found the parole officers would not have been liable under California law.

The Ninth Circuit affirmed. It relied on the language of the FTCA and LeBarge v. Mariposa City, 798 F.2d 364, 367 (9th Cir. 1986), where the Ninth Circuit found a court's job was to apply the "most reasonable analogy" under state law. The court found that federal parole officers are most analogous to private rehabilitation centers, and because such centers would not be liable in similar circumstances under California law, the United States was not liable under the FTCA for the parole officers' conduct.

Significance: The United States is not liable under the FTCA for the negligence of its parole officers in monitoring parolees where there would not be liability in analogous circumstances under applicable state law.

Extended Summary: Garrido served 11 years of a 50-year prison sentence for the kidnapping and rape of two women in 1976. Medical professionals determined that Garrido's sexual violence was exacerbated by abuse of methamphetamines. When Garrido was released on parole in 1988, his parole terms included mandatory drug testing.

In the first 30 months after his release, Garrido's parole officers failed to report approximately 70 drug-related parole violations. While on parole in 1991, Garrido kidnapped Dugard who was age 11. For the next 18 years, Garrido imprisoned Dugard in his backyard where he repeatedly raped and drugged her. Dugard gave birth to two of Garrido's children without any medical treatment. She and her children remained captive until their discovery in 2009.

In September 2011, Dugard sued the United States under the FTCA on her own behalf and as guardian of her children. She alleged that federal parole officers negligently supervised Garrido, including failure to report his numerous parole violations. She alleged that, but for the parole officers' negligence, Garrido's parole would have been revoked and he would have been unable to kidnap Dugard in 1991.

Following discovery, the United States moved for summary judgment on grounds that the FTCA barred Dugard's claims because there is no liability for private individuals in like circumstances under California law, as required to sustain a FTCA claim under 28 U.S.C. § 2674. The district court found private parties providing criminal rehabilitative services to be the reasonable analogy to parole officers under California law. California law holds that such private parties do not owe a duty of reasonable care to control others generally, but only to a very small group of specifically identifiable and foreseeable victims. Since Dugard did not allege she was a specifically identifiable victim, the United States owed no duty of care to Dugard and her children.

On appeal, the Ninth Circuit affirmed the judgment. The court discussed the FTCA by which the United States has waived sovereign immunity in limited cases. The statute provides the United States is liable "in the same manner and to the same extent as a private individual under like circumstances." 28 U.S.C. § 2674. The Court cited LeBarge v. Mariposa City, 798 F.2d 364, 367 (9th Cir. 1986), a Ninth Circuit precedent in which the court held that FTCA claims require courts to adopt a "reasonable analogy" standard when determining if immunity is waived.

The Ninth Circuit panel reasoned that the California cases most analogous to Dugard's situation involved the liability of private criminal rehabilitation facilities. Under California law, such private companies do not owe a duty of care to the public at large for the actions of inmates or parolees under their supervision. Cardenas v. Eggleston Youth Ctr., 238 Cal. Rptr. 251, 252-53 (Ct. App. 1987) (holding that a private rehabilitation facility owes no duty of care to "members of the community in which it is located for the criminal conduct of its residents"); Beauchene v. Synanon Found, Inc., 151 Cal. Rptr. 796, 798-99 (Ct. App. 1979) (holding that a private rehabilitation center owed no duty to the plaintiff to control the behavior of a convict who escaped the facility and shot the plaintiff). Rather, privately owned criminal rehabilitation facilities only owe a duty to individuals who are foreseeable and specifically identifiable victims of their wards' conduct. Vu v. Singer Co., 706 F.2d 1027, 1029 (9th Cir. 1983) (discussing the duty to warn under California law and concluding that it "clearly" requires a "foreseeable and specifically identifiable" victim); Rice v. Ctr. Point, Inc., 65 Cal. Rptr. 3d 312, 316 (Ct. App. 2007) (explaining that a duty exists only where the "injury is foreseeable and the intended victim is identifiable").

The Ninth Circuit panel stated that Dugard neither argued nor submitted facts to suggest that she was a specifically identifiable victim who would have a viable claim against an analogous private party under California law. Because the extent of the federal government's liability under the FTCA is described with reference to state law, when California limited the liability of private rehabilitative institutions, the federal government's liability under the FTCA shrunk as well. The Ninth Circuit panel also noted how limiting liability for officials involved in the release and rehabilitation of criminal offenders is consistent with California's public policies that encourage criminal rehabilitation. To hold otherwise would force the range of goals to shift from rehabilitation to protecting the public, thereby disrupting the ability of probation officers to develop flexible and appropriately tailored approaches suited for each offender. This would be a disservice to both the offenders and society.

To read the full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/08/26/13-17596.pdf

Panel: William E. Smith, Chief District Judge of Rhode Island sitting by designation, and Richard R. Clifton, John B. Owens, Carlos T. Bea, Circuit Judges

Argument Date: January 12, 2016

Date of Issued Opinion: August 26, 2016

Docket Number: 13-17596

Decided: Affirmed

Case Alert Author: Devin Bruen

Counsel:
In No. 13 - 17596: Jonathan P. Steinsapir (argued), Dale F. Kinsella, Amber Holley Melius, and David W. Swift, Kinsella Weitzman Iser Kump & Aldisert, LLP, Santa Monica, California, for Plaintiff-Appellant

Patrick G. Nemeroff (argued) and Mark B. Stern, Attorneys, Appellate Staff, Civil Division, Department of Justice, Washington, D.C., for Defendant-Appellee

Author of Opinion: Judge Owens

Dissent: Judge Smith

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 10/27/2016 03:35 PM     9th Circuit     Comments (0)  

  Preap v. Johnson
Headline: Ninth Circuit holds immigration authorities may detain criminal aliens without a bond hearing only when aliens are detained promptly after their release from criminal custody.

Area of Law: Immigration Law

Issue Presented: Whether the phrase "when the alien is released" in the mandatory detention provision of 8 U.S.C. § 1226(c)(1) permits the government to detain individuals without a bond hearing long after they were released and resettled in the community.

Brief Summary: The Ninth Circuit panel affirmed the district court's finding that the phrase "when...released" in the mandatory detention provision without a bond hearing applies only when immigration detention takes place promptly after release, as opposed to sometime long after. The plaintiffs in the class action were convicted of crimes, served their sentences, and had been released and returned to the community for years before they were arrested and detained by immigration authorities under the mandatory detention provision. The plaintiffs argued that the phrase "when...released" allowed for detention without a bond hearing only when promptly detained after release from criminal custody. The government countered that the statute gave immigration authorities the power to detain without a bond hearing at any time after release. The Ninth Circuit panel considered the text of the statute, the context, and the legislative intent, and held that the legislature intended for the provision to apply only to those criminal aliens who were promptly detained after release from criminal custody. However, the Ninth Circuit panel avoided defining the parameters of what "promptly" would entail, as it was not an issue before the court.

Significance: Criminal aliens who have been released after serving their sentences and long since reentered society may not be detained without a bond hearing. Mandatory detention without a bond hearing as provided under 8 U.S.C. § 1226(c) only applies when the government promptly detains a criminal alien after the individual's release from custody.

Extended Summary: The named plaintiffs in this class action, Mony Preap ("Preap"), Eduardo Vega Padilla ("Padilla"), and Juan Lozano Magdaleno ("Magdaleno") are lawful permanent residents who committed crimes that may lead to their removal from the United States. Upon serving their criminal sentences, plaintiffs returned to their communities where they remained for years. Immigration authorities later took plaintiffs into custody and held them without bond hearings under the mandatory detention provision.

Preap is a lawful resident of the United States since 1981. In 2006 he was twice convicted of possession of marijuana and served both sentences. Years after being released, Preap served a sentence for simple battery, a crime not enumerated in the mandatory detention statute. Upon release, he was held without a bond hearing in immigration detention. Padilla has also been a lawful resident for 30 years. He has convictions for drug possession and owning a firearm with a prior felony conviction. Eleven years after finishing his last criminal sentence, he was placed in mandatory detention. Magdaleno, a lawful resident since 1974, has convictions for owning a firearm with a prior felony conviction and possession of a controlled substance. Magdaleno served his sentence and was released. Over five years later, immigration authorities took him into custody and held him without a bond hearing.

Plaintiffs filed a class action petition for habeas relief in the United States District Court for the Northern District of California. The motion for class certification was granted, and a preliminary injunction was issued requiring all class members to be provided a bond hearing under § 1226(a). The class extended to all "ndividuals in the state of California who are or will be subjected to mandatory detention under 8 U.S.C. section 1226(c) and who were not or will not have been taken into custody by the government immediately upon their release from criminal custody for a § 1226(c)(1) offense." Preap v. Johnson, 303 F.R.D. 566, 571, 584 (N.D. Cal. 2014).

The Immigration and Naturalization Act's ("INA") mandatory detention provision, 8 U.S.C. § 1266(c), requires immigration authorities to detain aliens who have committed an offense enumerated in the INA, and to do so "when the alien is released" from criminal custody, without bond. Enumerated offenses range from serious felonies to simple possession of a controlled substance.

The mandatory detention provision has survived several challenges over the years, and has even gone to the Supreme Court of the United States to test its constitutionality. Here the Ninth Circuit panel considered whether the phrase "when [they are] released" in the mandatory detention provision requires that the government detain even those aliens that have resettled into the community. If it does not, then the alien may still be detained, but subject to a bond hearing wherein the alien must show he poses neither a risk of flight nor a danger to the community.

In considering this issue, the Ninth Circuit panel looked to the text of the two relevant statutory provisions. 8 U.S.C. § 1226(a) requires the Attorney General to detain any alien upon the initiation of removal proceedings, and choose to keep the individual in detention or release on conditional parole or bond. The alien may seek review of the Attorney General's decision by an immigration judge, but the immigration judge must consider whether the alien "is a threat to national security, a danger to the community at large, likely to abscond, or otherwise a poor bail risk." Matter of Guerra, 24 I. & N. Dec. 37, 40 (BIA 2006); see also 8 § C.F.R. 1236.1(c)(8). The second relevant provision is 8 U.S.C. § 1226(c). Section 1226(c)(1) requires the Attorney General to "take into custody" any alien who has committed an enumerated offense "when the alien is released" from criminal custody. Section 1226(c)(2) prohibits the Attorney General from releasing an alien described in § 1226(c)(1) except for certain aliens in the Federal Witness Protection Program.

Plaintiffs argued that the text "when...released" in § 1226(c)(1) also applies to § 1226(c)(2), thereby allowing aliens to be detained without bond only if they are taken into immigration custody promptly after release from criminal custody. The government, on the other hand, argued that the phrase "when...released" meant that an alien may be held without bond regardless of how much time has passed between criminal custody and immigration custody.

The Ninth Circuit noted a split in authority among United States Circuit Courts of Appeals on this issue. Of the five circuits that have considered the issue, four circuits (the Second, Third, Fourth, and Tenth) sided with the government, while the First Circuit sided with the plaintiffs' position.

The Ninth Circuit panel agreed with the First Circuit's conclusion in Castañeda v. Souza, 810 F.3d 15 (1st Cir. 2015) that the statutory context and legislative history make it clear that the provision allows for a criminal alien to be held without bond only if detained "when...released" from criminal custody, not after a lengthy gap in time. In its opinion, the Ninth Circuit considered and rejected three arguments the government advanced in support of its position: (1) that the court should give Chevron deference to the Board of Immigration Appeals' ("BIA") interpretation; (2) that the phrase "when...released" triggers a duty, rather than a time limit; and (3) even if Congress intended that immigrations promptly detain criminal aliens when they are released, it did not intend that they would lose the authority to do so in the event of delay.

The first issue is whether courts should defer to the BIA's interpretation of § 1226(c)(2) to include any alien described in § 1226(c)(1) as subject to detention without bond, regardless of when the alien was taken into immigration custody. (The Second and Tenth Circuits based their decisions on Chevron deference.) See Lora v. Shanahan, 804 F.3d 601, 612 (2d Cir. 2015); Olmos v. Holder, 780 F.3d 1313, 1322 (10th Cir. 2015). In addressing this issue, the Ninth Circuit panel looked to the text of the statute and the legislative intent and noted that § 1226(c)(2) refers to "an alien described in paragraph (1)" rather than the select subsections within it, and that the legislature must have deliberately selected this language to include the phrase "when...released." Because Congress did not choose to qualify the description of an alien to be those in §§ 1226(c)(1)(A) through 1226(c)(1) (D), the Court included the breadth of § 1226(c)(1) in its interpretation, thus holding that the plain meaning is for the provision to apply to criminal aliens "when...released."

The context of the statute supported this decision, as § 1226(a) provides authority for the detention of any alien in removal proceedings and § 1226(c) provides for the mandatory detention in limited circumstances. Sections 1226(a) and 1226(c) each have their own provisions for both the detention and release of aliens. Thus if the government fails to detain an alien "when...released" under § 1226(c)(2), then the government's authority to do so under § 1226(c) is lost, and the government must proceed under § 1226(a) with a bond hearing provided.

The Ninth Circuit also addressed the BIA's interpretation that authorities may detain on the authority of § 1226(a) while applying the release conditions of § 1226(c)(2). The Board's interpretation was dismissed by looking at the structure of the statute and how § 1226(c) as a whole is entitled "Detention of criminal aliens." The Ninth Circuit panel found this wording as creating an exception to the general rule in § 1226(a). As such, the Ninth Circuit panel found that the provisions in § 1226(c)(2) go into effect only where § 1226(c)(1) is satisfied. The Board's interpretation was further dismissed because following the interpretation would render the "when...released" clause inoperative, and would thereby eliminate any requirement that the alien ever be in custody.

The second issue was whether the phrase "when...released" triggered a duty, rather than a time limit, as the Fourth Circuit held in Hosh v. Lucero, 680 F.3d 375, 380 - 81 (4th Cir. 2012). Plaintiffs argued that there is a time limit under which the government must take criminal aliens into immigration custody promptly after release, as opposed to many years later as was done with Plaintiffs. The government argued that the phrase was ambiguous and allowed for both Plaintiffs' interpretation and for the detention at any time after release from criminal custody.

The Ninth Circuit looked to the plain language of the statute and noted that Congress chose the word "when," which suggests a degree of immediacy as opposed to a condition; it did not use phrases such as "in the event of" or "any time after." Congress's purpose in choosing the words "when...released" sets forth a requirement of promptness because the mandatory detention provision's purpose is to address criminal aliens that present an immediate danger or pose a flight risk. It could not have been Congress's intent to allow the delayed detention of such aliens. Those not detained promptly after release are entitled to a bond hearing.

The third issue was whether the delay in prompt detention deprived immigration authorities of the authority to do so. The government argued that the failure to act as required in § 1226(c)(1) does not preclude them to act under § 1226(c)(2). The Second, Third, and Tenth Circuits have also previously held that it does not. See Sylvain v. Atty Gen. of United States, 714 F.3d 150, 157 (3d Cir. 2013); Lora, 804 F.3d at 612; Olmos, 780 F.3d at 1325 - 26. These circuits relied on United States v. Montalvo-Murillo, 495 U.S. 711 (1990). In Montalvo-Murillo, the Supreme Court considered whether a defendant who did not receive a timely hearing immediately upon the first appearance as required by the Bail Reform Act may be released from custody. The Supreme Court held that "a failure to comply with the first appearance requirement does not defeat the government's authority to seek detention of the person charged." 495 U.S. at 717.

The Ninth Circuit panel distinguished Montalvo-Murrillo from the instant case, finding that the sole practical effect of the district court's decision was to reinstate the government's authority under § 1226(a) as to those not timely detained under § 1226(c), and thus there was no loss of authority. Further, while there was no remedy to a delayed hearing in Montalvo-Murrillo, here the statutory structure makes clear exactly what occurs if a prompt detention under § 1226(c) does not occur - the general detention provision of § 1226(a) applies.

The Ninth Circuit panel rejected the argument that not applying the loss-of-authority doctrine would cause dangerous aliens to be eligible for hearings because the design of the mandatory detention provision is aimed towards the detention of criminal aliens who are recently released and are a risk. According to the court, the more time such individuals have spent in the community leading free and productive lives, the less likely they are to be dangerous and enough of a flight risk to warrant the application of the loss-of-authority doctrine.

In conclusion, the Ninth Circuit panel held that the mandatory detention provision of § 1226(c) applies only to those criminal aliens who are detained promptly after their release from criminal custody. However, the Ninth Circuit panel left undefined, the determination of what period of time is sufficient to meet the requirement that such detainment is "promptly" done, as that was not at issue before the court.

To read the full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/08/04/14-16326.pdf

Panel: Andrew J. Kleinfeld, Jacqueline H. Nguyen, and Michelle T. Friedland, Circuit Judges

Argument Date: July 8, 2015

Date of Issued Opinion: August 4, 2016

Docket Number: 14-16326; 14-16779

Decided: Affirmed

Case Alert Author: Edwin Hong

Counsel:
Hans Harris Chen (argued) and Troy D. Liggett, Trial Attorneys; Elizabeth J. Stevens, Assistant Director; William C. Peachey, Director, District Court Section; Civil Division, Office of Immigration Litigation, United States Department of Justice, Washington, D.C.; for Defendants-Appellants

Theresa H. Nguyen (argued) and Ashok Ramani, Keker & Van Nest LLP, San Francisco, California; Michael K.T. Tan, ACLU Immigrants' Rights Project, New York, New York; Julia Harumi Mass, ACLU Foundation of Northern California, San Francisco, California; Anoop Prasad, Asian Law Caucus, San Francisco, California; for Plaintiffs- Appellees

Author of Opinion: Judge Jacqueline H. Nguyen

Circuit: Ninth Circuit

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 10/27/2016 03:32 PM     9th Circuit     Comments (0)  

  Tompkins v. 23andME, Inc.
Headline: Ninth Circuit panel holds pursuant to the Federal Arbitration Act, 9 U.S.C. § 2 ("FAA") and California's unconscionability rules that provisions in a mandatory arbitration clause in an online consumer contract of adhesion are valid and enforceable.

Areas of Law: Arbitration; Unconscionability; Federal Arbitration Act.

Issues Presented: (1)Whether provisions in an online mandatory arbitration clause authorizing an award of attorney fees and costs to the prevailing party, designating the forum for arbitrations, and excluding intellectual property disputes from arbitration are unconscionable. (2) Whether other provisions of the online agreement establishing a one-year statute of limitations and giving 23andMe a unilateral right to modify the contract render the arbitration provision unconscionable.

Brief Summary: Plaintiffs are customers of 23andMe, Inc., who purchased DNA test kits on-line. They filed a class action lawsuit claiming that provisions of their agreement with 23andMe relating to mandatory arbitration are unconscionable in the following respects: authorizing attorney fees and costs to the prevailing party; establishing San Francisco as the forum for arbitration proceedings; and exempting from mandatory arbitration any disputes relating to intellectual property rights, obligations, or any infringement claims. Plaintiffs also claimed that other contract provisions establishing a one-year statute of limitations period and giving 23andMe a unilateral right to modify the agreement rendered the arbitration clause unconscionable. 23andMe responded with a motion to compel arbitration. The district court granted 23andMe's motion and plaintiffs appealed.

The Ninth Circuit panel recognized that the Federal Arbitration Act, 9 U.S.C. § 2, establishes a strong national policy favoring arbitration. A court may invalidate an arbitration agreement under the "savings clause" of § 2 only in cases where generally applicable contract defenses such as fraud, duress, or unconscionability are present. The court then examined California law to determine whether the provisions would be held unconscionable under that state's law.

The Ninth Circuit concluded that the provision awarding attorney fees and costs to the prevailing party is not unconscionable under California law. Although California appellate courts have held unilateral cost shifting clauses in the arbitration context to be unconscionable, the plaintiffs failed to show the unconscionability doctrine's application in bilateral provision cases. The court also rejected plaintiffs' claim that the fees and costs to the losing party would be too great for plaintiffs to bear as they failed to provide evidence on this point. Second, the Court held that plaintiffs did not prove that the cost and inconvenience of having arbitrations in San Francisco was unreasonable. Third, plaintiffs failed to identify or raise any intellectual property claims that 23andMe might bring against them.

The court next addressed the contract provisions creating the one-year statute of limitations and giving 23andMe the unilateral right to modify the contract. The Ninth Circuit noted that, as a general rule, where the arbitration agreement itself is not unconscionable, provisions outside the arbitration agreement will not make it so. The court relied on California case precedents in finding the one-year statute of limitations was not unconscionable. It also held that plaintiffs could challenge the enforceability of the modification clause in the arbitration proceeding.

Significance: Consumer contracts formed online between individuals and corporations often include mandatory arbitration clauses. The Federal Arbitration Act established a strong national policy favoring arbitration. Federal courts will enforce a mandatory arbitration clause unless an aggrieved party can prove the provision is procedurally and substantively unconscionable under relevant state law.

Extended Summary: 23andMe sold DNA testing kits to customers online through its website. It claimed its service could assist customers in managing health risks as well as preventing or mitigating certain diseases. Before a customer could purchase the kit, the individual was required to click on a link to the company's terms of service and check a box that acknowledged the buyer's assent to the terms. The agreement included a mandatory arbitration provision. The provision authorized an award of fees and costs to the prevailing party and required that arbitration proceedings be governed by California law and held in San Francisco, California. The arbitration clause specifically excluded from arbitration "disputes relating to intellectual property rights, obligations, or any infringement claims." Other contract provisions established a one-year statute of limitations and gave 23andMe a unilateral right to modify the agreement.

In November 2013, the Food and Drug Administration ordered 23andMe to discontinue marketing its services for health purposes until it obtained government approval. Plaintiffs are customers who had purchased DNA test kits online. They brought a number of class action suits against 23andMe, alleging unfair business practices, breach of warranty, and misrepresentation. By agreement, all claims were consolidated in the United States District Court for the Northern District of California.

23andMe filed a motion to compel all plaintiffs to arbitrate their claims. Plaintiffs responded that the mandatory arbitration provision and other clauses of the agreement were unconscionable. The district court found for 23andMe and granted its motion to compel arbitration. Plaintiffs filed a timely appeal.

The Ninth Circuit affirmed the district court decision. The court began its opinion by recognizing that § 2 of the FAA "is a congressional declaration of a liberal federal policy favoring arbitration agreements." Any doubts about the scope of arbitrable issues, including applicable contract defenses, are to be resolved in favor of arbitration. Moses H Cone Memorial Hospital v. Mercury Construction Co., 460 U.S. 1, 24-25 (1983). The court noted that the "savings clause" of § 2 authorizes a court to strike or limit an arbitration provision only in instances involving generally applicable contract defenses, such as fraud, duress, or unconscionability. It held that a federal court must look to relevant state law in deciding whether an arbitration provision is unconscionable. For this reason, the Ninth Circuit examined California authorities to decide whether provisions of the arbitration clause in the instant case were unconscionable.

Under California law, the doctrine of unconscionability is applicable if the written contract is both procedurally and substantively unconscionable, though they need not be present to the same degree. Procedural unconscionability focuses on oppression or surprise due to unequal bargaining power while substantive unconscionability relates to overly harsh or one-sided results. Sanchez v. Valencia Holding Co., 61 Cal. 4th 899, 910 (2015).

The Ninth Circuit first examined the provision in the arbitration clause stating "arbitration costs and reasonable documented attorneys' costs of both parties will be borne by the party that ultimately loses." Plaintiffs contended that if they lost, the arbitrators' charge of $1,500 per day and 23andMe's "top tier" lawyers' fees would be unreasonable, overly burdensome, and unfair. The Ninth Circuit panel reviewed relevant California authorities and found that a number of courts had enforced prevailing party clauses in the non-arbitration context. In cases involving arbitration, several California appellate courts held cost shifting clauses unconscionable where they were unilateral, thus available to only one side. But plaintiffs were unable to produce any case where a bilateral clause awarding attorney fees and costs to the prevailing party was unconscionable. Indeed, Cal. Civil Code § 1717 appears to approve bilateral prevailing party clauses. For these reasons, the Ninth Circuit concluded that the bilateral prevailing party clause in this case was not unconscionable. The court also held that plaintiffs did not offer evidence to show that the arbitration costs and attorney fees would be unaffordable or thwart their ability to arbitrate the dispute.

Next, the Ninth Circuit addressed plaintiffs claim that the designation of San Francisco as the forum for arbitration was unconscionable. It discussed the California Supreme Court's decision in Valentino & Smith, Inc. v. Superior Court, 17 Cal. 3d 491 (1976), which rejected plaintiff's claim that a venue clause was unenforceable because of inconvenience and expense of the forum. In the absence of a showing that such a clause is unreasonable, a forum selection clause is generally valid and enforceable. Further case analysis indicates that the plaintiff has a heavy burden of proof to show a forum-selection clause is unconscionable. This is so even if the clause appears in an adhesion contract. Mere inconvenience or additional expense is not the test. So long as the party had adequate notice as to the forum's location, the clause is enforceable. Here, the Ninth Circuit panel concluded that San Francisco was not an unreasonable choice. San Francisco has a proper connection to the contract as it is 23andMe's principal place of business, seven of the plaintiffs reside in California, and six of the nine actions were filed in California. In addition, the two affidavits claiming financial hardship did not explain why the expense of travelling to the San Francisco venue would be burdensome.

The final arbitration clause provision discussed by the Ninth Circuit exempted "any disputes relating to intellectual property rights, obligations, or any infringement claims" from mandatory arbitration. The court cited California authority stating that substituting arbitration for litigation resulted in no inherent disadvantage. Sonic-Calabasas A, Inc. v. Moreno, 57 Cal. 4th 1109,1152 (2013). Moreover, a one-sided contract is not necessarily unconscionable. The Ninth Circuit also found that the plaintiffs did not identify any intellectual property right that 23andMe was likely to bring against its customers. The rights that were included in arbitration are ones that the plaintiffs are likely to sue on and there was therefore a bilateral aspect to the clause. 23andMe demonstrated the need for the clause since it provided its business with a "margin of safety," which in itself, was not unconscionable. For these reasons, the court held the arbitration clause was enforceable.

The plaintiffs also challenged contract terms creating the one-year statute of limitations and the unilateral right of 23andMe to modify the agreement. The plaintiffs contended that these two provisions rendered the arbitration clause unconscionable. The Ninth Circuit reviewed these issues and ruled that both were enforceable. The court cited Rent-A-Center, W, Inc. v. Jackson, 561 U.S. 63, 70-71 (2010), where the Supreme Court held that a party's challenge to a contract provision or to the contract as a whole does not prevent a court from enforcing an agreement to arbitrate. It cited California authority showing that it was not unconscionable for parties in contractual relations do modify a statute of limitations. The one-year statute of limitations in this case was bilateral; it applied to both parties and both parties had adequate notice and agreed to the provision. As for the provision granting 23andMe the unilateral right to modify the contract, even if this clause is unconscionable, it would not make the arbitration provision or the contract as a whole unenforceable. The Ninth Circuit decided that the plaintiffs are free to argue during arbitration that the unilateral modification clause itself is unenforceable and did not reach that claim in the appeal.

For these reasons, the Ninth Circuit affirmed the district court's decision to grant the motion to compel arbitration.

To read the full opinion, please visit:
https://cdn.ca9.uscourts.gov/datastore/opinions/2016/08/23/14-16405.pdf

Panel: Stephen S. Trott, Sandra S. Ikuta, and Paul J. Watford, Circuit Judges.

Argument Date: May 12, 2016

Date of Issued Opinion: August 23, 2016

Docket Number: 14-16405

Decided: Affirmed.

Case Alert Author: David Griego

Counsel: Jeremy Robinson (argued), Jason C. Evans, and Gayle M. Blatt; Casey, Gerry, Schenk, Francavilla, Blatt &Penfield, LLP, San Diego, California; Mark Ankcorn, Ankcorn Law Firm, PC, San Diego, California; for Plaintiff-Appellant

Robert P. Varian (argued), James N. Kramer, M. Todd Scott, and Alexander K. Talarides; Orrick Herrington & Sutcliffe, LLP, San Francisco, California, for Defendant-Appellee

Author of Opinion: Judge Ikuta

Concurrence: Judge Watford

Circuit: Ninth

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 10/27/2016 03:28 PM     9th Circuit     Comments (0)  

September 7, 2016
  Peruta v. County of San Diego - Ninth Circuit
Headline: The Ninth Circuit concludes that the protection of the Second Amendment - whatever the scope of that protection may be - does not extend to the carrying of concealed firearms in public by members of the general public.

Areas of Law: Constitutional Law, Second Amendment

Issues Presented: Whether the Second Amendment protects the ability to carry concealed firearms in public.

Brief Summary: The Ninth Circuit, sitting en banc, affirmed the findings of the district courts that the policies of San Diego County and Yolo County did not violate the Second Amendment. On appeal, the plaintiffs, who were denied licenses to carry a concealed firearm for failing to establish sufficient good cause under county policy, argued that the counties' good cause requirements for concealed carry violate the Second Amendment. Following the decisions of Dist. of Columbia v. Heller, 554 U.S. 570 (2008) and McDonald v. City of Chicago, 561 U.S. 742 (2010), the Ninth Circuit engaged in a four-part historical inquiry of the Second Amendment and Fourteenth Amendment and found that based upon the historical materials, from English law in 1299 to Robertson v. Baldwin, 165 U.S. 275 (1897), that the Second Amendment right to keep and bear arms does not include, in any degree, the right of a member of the general public to carry concealed firearms in public.

Significance: The Ninth Circuit, sitting en banc, concluded that the Second Amendment right to keep and bear arms does not include, in any degree, the right of a member of the general public to carry concealed firearms in public. As such, the Ninth Circuit held that the Second Amendment necessarily allows a state to choose to impose any prohibition or restriction on concealed carry, including a requirement of "good cause," however defined.

Extended Summary: Under California law, carrying concealed firearms in public, whether loaded or unloaded, is generally prohibited. Cal. Penal Code § 25400. However, Cal. Penal Code § 2655 provides that the prohibition of § 25400 does not apply to those who have been issued licenses to carry concealed weapons. Cal. Penal. Code § 26150(a), authorizes the sheriff of a county to issue a concealed carry license to a person upon proof of the following: (1) the applicant is of good moral character; (2) good cause exists for issuance of the license; (3) the applicant is a resident of the county or a city within the county, or the applicant's principal place of employment or business is in the county or a city within the county and the applicant spends a substantial period of time in that place of employment or business; and (4) the applicant has completed a course of training as described in Cal. Penal Code § 26165. Cal. Penal Code § 26160 also requires sheriffs and municipal police chiefs to "publish and make available a written policy summarizing the provisions" of Cal. Penal Code §§ 26150(a) and 26155(a).

Pursuant to Cal. Penal Code § 26160, the San Diego County Sheriff's Department defined "good cause" to mean, inter alia:

a set of circumstances that distinguish the applicant from the mainstream and causes him or her to be placed in harm's way. Simply fearing for one's personal safety alone is not considered good cause. This criterion can be applied to situations related to personal protection as well as those related to individual businesses or occupations.

Unlike San Diego County, the published policy of Yolo County does not define "good cause;" instead, Yolo County provides examples in which "good cause" exists, such as: (1) victims of violent crime and/or documented threats of violence; (2) business owners who carry large sums of cash or valuable items; and (3) business owners who work all hours in remote areas and are likely to encounter dangerous people and situations. Yolo County similarly provides examples where "good cause" does not exist, such as: (1) recreation in remote areas; (2) hunting or fishing; (3) self-protection and protection of family without credible threats of violence; (4) employment in the security field; and (5) personal safety due to job conditions or duties placed on the applicant by the employer.

Plaintiffs, Edward Peruta ("Peruta") and Adam Richards ("Richards") (collectively, "Plaintiffs"), residents of San Diego County and Yolo County, respectively, sought to obtain a license to carry a concealed firearm, but were denied for failing to establish good cause under county policy. Plaintiffs brought separate suits on Second Amendment grounds, challenging the two counties' interpretation and application of the statutory good cause requirement under California law.

The district courts granted summary judgment in each case on grounds that the counties' policies did not violate the Second Amendment; however a divided Ninth Circuit panel reversed both decisions. As to Peruta, the Ninth Circuit panel held that San Diego County's policy violated the Second Amendment because the Second Amendment required that "the states permit some form of carry for self-defense outside the home." Peruta v. Cty. Of San Diego, 742 F.3d 1144, 1172 (9th Cir. 2014). As to Richards, the Ninth Circuit panel held that in light of its holding in Peruta, the Yolo County policy also violated the Second Amendment. Richards v. Prieto, 560 Fed. Appx. 681 (9th Cir. 2014).

On appeal to the Ninth Circuit, sitting en banc, faced the issue of whether the Second Amendment protects, in any degree, the ability to carry concealed firearms in public.

The Ninth Circuit was primarily guided by two Supreme Court decisions, Dist. of Columbia v. Heller, 554 U.S. 570 (2008) and McDonald v. City of Chicago, 561 U.S. 742 (2010).

In Heller, the plaintiff challenged a District of Columbia statute that completely banned the possessions of handguns in the home and required that any lawful firearm in the home be rendered inoperable by either being disassembled or bound by a trigger lock at all times. 554 U.S. at 628. The Supreme Court interpreted the phrase "shall not be infringed" to mean that the Second Amendment was a codified pre-existing individual right to keep and bear arms for self-defense and struck down the challenged statute. Id. At 635. Notably however, the Supreme Court stated that the rights secured by the Second Amendment were not unlimited. Id. at 626-27.

In McDonald, the plaintiffs challenged laws of the City of Chicago and the Village of Oak Park, a Chicago suburb, which effectively banned handgun possession by almost all public citizens. 561 U.S. at 742. The Supreme Court held that the Due Process Clause of the Fourteenth Amendment incorporates the Second Amendment and that it is clear that the Framers and ratifiers of the Fourteenth Amendment counted the right to keep and bear arms among those fundamental rights necessary to our system or ordered liberty. Id. at 777-78. As such, the Fourteenth Amendment makes the Second Amendment right to keep and bear arms fully applicable to the States, and therefore to handguns. Id. at 744-45.

Following Heller and McDonald, the Ninth Circuit engaged in the same four-part historical inquiry followed by the Supreme Court and the Ninth Circuit began its historical analysis by finding that by the end of the eighteenth century, when the Second Amendment was ratified, English law had for centuries, from Edward I in 1299 through the English Bill of Rights in 1689, consistently prohibited carrying concealed arms in public. The Ninth Circuit also found that in Colonial America, the law with respect to concealed weapons did not significantly differ from the law in England and that some colonies, such as Massachusetts Bay, adopted English law verbatim.

In the second part of its historical analysis, the Ninth Circuit then turned to precedent of state courts to determine the scope of the Second Amendment as it was understood by the adopters of the Fourteenth Amendment and found that pre-adoption, state courts before the Civil War unanimously, with one short-lived exception (see Bliss v. Commonwealth, 12 Ky. 90 (1822) (holding that "in principle, there is no difference between a law prohibiting the wearing concealed arms, and a law forbidding the wearing such as are exposed; and if the former be unconstitutional, the latter must be so likewise")) concluded that members of the general public could be prohibited from carrying concealed weapons (see State v. Reid, 1 Ala. 612 (1840) (holding that the English Bill of Rights did not protect a right to carry concealed weapons); Aymette v. State, 21 Tenn. 154 (1840) (holding that concealable weapons did not come within the scope of either the English Bill of Rights or the state constitution); State v. Buzzard, 4 Ark. 18, 19 (1842) (holding that a state statute that provided that "every person who shall wear any pistol, dirk, butcher or large knife, or a sword in a cane, concealed as a weapon, unless upon a journey, shall be adjudged guilty of a misdemeanor" violated neither the federal nor the state constitution); Nunn v. State, 1 Ga. 243 (1846) (holding that a state statute that prohibited the carrying of concealed weapons was constitutional); State v. Chandler, 5 La. Ann. 489 (1850) (holding that a law prohibiting concealed weapons did not violate the Second Amendment)).

In the third part of its historical analysis, which focused on the years following adoption of the Fourteenth Amendment and the Ninth Circuit found that the post-Civil War constitutions of several states either explicitly stated that the right to carry concealed weapons could be prohibited by the legislature (see N.C. Cost. Of 1868, art. I, § 24 (1875); Colo. Const. art. II, § 13 (1876); La. Const. of 1879, art. III; Mont. Const. of 1889, art. II, § 12; Miss. Const. art. III, § 12 (1890)) or (2) gave state legislatures broad power to regulate the manner in which arms could be carried (see Ga. Const. of 1868, art. I, § 14; Tex. Const. of 1868, art. I, § 13; Tenn. Const. art. I, § 26 (1870); Fla. Const. of 1885, art. I, § 20; Idaho Const. of 1889, art. I, § 11; Utah Const. of 1896, art. I, § 6).

Finally, and in the fourth part of its historical analysis, the Ninth Circuit cited to Robertson v. Baldwin, 165 U.S. 275 (1897) for the proposition that, as far back as 1897, the Supreme Court understood that the Second Amendment did not protect the right to carry a concealed weapon. In Robertson, the Supreme Court held that "the right of the people to keep and bear arms (article 2) is not infringed by laws prohibiting the carrying of concealed weapons. Id. at 281-82.

Based upon the historical materials such as: (1) the acknowledged predecessor to the Second Amendment, the 1689 English Bill of Rights, which specifically prohibited the carrying of concealed weapons); (2) nearly unanimous state court decisions in the years after the adoption of the Second Amendment and before the adoption of the Fourteenth Amendment (concluding that laws forbidding concealed weapons were consistent with both the Second Amendment and their state constitutions); (3) the unanimous state court decisions in the decades immediately after the adoption of the Fourteenth Amendment (upholding the ability of state legislatures to prohibit concealed weapons); and (4) Robertson (holding that the protection of the Second Amendment does not extend to the carrying of concealed weapons), the Ninth Circuit concluded that the Second Amendment right to keep and bear arms does not include, in any degree, the right of a member of the general public to carry concealed firearms in public.

To read the full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/06/09/10-56971.pdf

Panel: Sidney R. Thomas, Chief Judge and Harry Pregerson, Barry G. Silverman, Susan P. Graber, M. Margaret McKeown, William A. Fletcher, Richard A. Paez, Consuelo M. Callahan, Carlos T. Bea, N. Randy Smith and John B. Owens, Circuit Judges.

Argument Date: June 16, 2015

Date of Issued Opinion:
June 9, 2016

Docket Number: 10-56971

Decided: Affirm the judgments of the district courts in both cases, which held that the policies of San Diego County and Yolo County did not violate the Second Amendment.

Case Alert Author: Ryan Arakawa

Counsel:

In No. 10 - 56971: Paul D. Clement (argued), Bancroft PLLC, Washington, D.C.; Paul Henry Neuharth, Jr., Paul Neuharth, Jr., APC, San Diego, California; Carl D. Michel, Glenn S. McRoberts, Sean A. Brady, and Bobbie K. Ross, Michel & Associates, P.C., Long Beach, California, for Plaintiffs - Appellants.

Edward C. DuMont (argued), Solicitor General; Gregory David Brown, Deputy Solicitor General; Douglas J. Woods, Senior Assistant Attorney General; Anthony R. Hakl, Deputy Attorney General; Mark Beckington, Supervising Deputy Attorney General; Kamala D. Harris, Attorney General of California; Office of the California Attorney General, San Francisco, California; for Intervenor.

James Chapin, County Counsel, Office of County Counsel, San Diego, California, for Defendants - Appellees.

In No. 11 - 16255: Alan Gura (argued), Gura & Possessky, PLLC, Alexandria, Virginia; Donald Kilmer, Jr., Law Offices of Donald Kilmer, San Jose, California; for Plaintiffs - Appellants.

John A. Whitesides (argued), Peter D. Halloran, and Serena M. Warner, Angelo, Kilday & Kilduff, Sacramento, California, for Defendants - Appellees Ed Prieto and County of Yolo.

Stefan B. Tahmassebi, Fairfax, Virginia; Stephen Porter Halbrook, Fairfax, Virginia; for Amicus Curiae Congress of Racial Equality, Inc.

John D. Ohlendorf, Peter A. Patterson, David H. Thompson, and Charles J. Cooper, Cooper & Kirk, PLLC, Washington, D.C., for Amicus Curiae National Rifle Association of America, Inc.

Dan M. Peterson, Dan M. Peterson PLLC, Fairfax, Virginia; David B. Kopel, Independence Institute, Denver, Colorado, for Amici Curiae International Law Enforcement Educators and Trainers Association, Law Enforcement Legal Defense Fund, Law Enforcement Action Network, and Law Enforcement Alliance of America.

Simon Frankel, Samantha J. Choe, Steven D. Sassman, and Ryan M. Buschell, Covington & Burling, LLP, San Francisco, California, for Amici Curiae Legal Community Against Violence, Major Cities Chiefs Association, Association of Prosecuting Attorneys, George Gascón, San Francisco District Attorney, and Law Center to Prevent Gun Violence.

Alan Gura, Gura & Possessky, PLLC, Alexandria, Virginia, for Amici Curiae Second Amendment Foundation, Inc., Calguns Foundation, Inc., Adam Richards, and Brett Stewart.

John C. Eastman, Anthony T. Caso, and Karen J. Lugo, Center for Constitutional Jurisprudence, Orange, California, for Amici Curiae Center for Constitutional Jurisprudence, Doctors for Responsible Gun Ownership, and Law Enforcement Alliance of America.

Don Kates, Michel & Associates, P.C., Battle Ground, Washington, for Amici Curiae The Gun Owners of California and H.L. Richardson.

Neil R. O'Hanlon, Hogan Lovells US LLP, Los Angeles, California; Jonathan L. Diesenhaus, Adam K. Levin, James W. Clayton, and Kathryn Linde Marshall, Hogan Lovells US LLP, Washington, D.C., for Amici Curiae Brady Center to Prevent Gun Violence, The International Brotherhood of Police Officers, and The Police Foundation.

John A. Whitesides and Serena M. Warner, Angelo, Kilday & Kilduff, Sacramento, California, for Amici Curiae Edward G. Prieto and County of Yolo.

Girard D. Lau, Solicitor General of Hawaii; Kimberly Tsumoto Guidry, First Deputy Solicitor General; Robert T. Takatsuji, Deputy Solicitor General; Department of the Attorney General, Honolulu, Hawaii; for Amicus Curiae State of Hawaii.

Paul R. Coble, Krista MacNevin Jee, James R. Touchstone, and Martin Joel Mayer, Jones & Mayer, Fullerton, California, for Amici Curiae California Police Chiefs' Association, California Peace Officers' Association, and California Sheriffs' Association.

Stephen M. Duvernay and Bradley A. Benbrook, Benbrook Law Group, PC, Sacramento, California, for Amici Curiae Firearms Policy Coalition, Inc., Firearms Policy Foundation, Inc., California Association of Federal Firearms Licensees, Inc., Pink Pistols, Gun Rights Across America, Liberal Gun Owners Association, Madison Society, Inc., Hawaii Defense Foundation, Florida Carry, Inc., Illinois Carry, Knife Rights Foundation, Inc., and Second Amendment Plaintiffs.

Charles Nichols, Redondo Beach, California, for Amicus Curiae California Right to Carry.

Brian S. Koukoutchos, Mandeville, Louisiana, for Amici Curiae Pink Pistols, Women Against Gun Control, Inc., and Second Amendment Sisters.

Thomas Peter Pierce and Stephen D. Lee, Richards, Watson & Gershon, Los Angeles, California, for Amicus Curiae League of California Cities.

Andrew S. Oldham, Deputy General Counsel; James D. Blacklock, General Counsel; Office of the Governor, Austin, Texas; for Amici Curiae Governors of Texas, Louisiana, Maine, Mississippi, Oklahoma, and South Dakota.

Brett J. Talley, Deputy Solicitor General; Andrew L. Brasher, Solicitor General; Luther Strange, Attorney General; Office of the Attorney General of Alabama, Montgomery, Alabama; for Amici Curiae Alabama, Alaska, Arkansas, Florida, Idaho, Kansas, Kentucky, Louisiana, Michigan, Missouri, Montana, Nevada, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia, and Wisconsin.

Robert J. Olson, Jeremiah L. Morgan, John S. Miles, William J. Olson, and Herbert W. Titus, William J. Olson, P.C., Vienna, Virginia; for Amici Curiae Gun Owners of America, Inc.; Gun Owners Foundation; U.S. Justice Foundation; The Lincoln Institute for Research and Education; The Abraham Lincoln Foundation for Public Policy Research, Inc.; Policy Analysis Center; Institute on the Constitution; and Conservative Legal Defense and Education Fund.

Michael Connelly, Ramona, California, for Amicus Curiae U.S. Justice Foundation.

Jonathan E. Taylor and Deepak Gupta, Gupta Beck PLLC, Washington, D.C., for Amicus Curiae Everytown for Gun Safety.

David D. Jensen, David Jensen PLLC, New York, New York, for Amici Curiae New York State Rifle & Pistol Association, Association of New Jersey Rifle & Pistol Clubs, Commonwealth Second Amendment, Gun Owners' Action League, and Maryland State Rifle & Pistol Association.

Jonathan S. Goldstein, McNelly & Goldstein, LLC, Hatfield, Pennsylvania, for Amici Curiae Western States Sheriffs' Association, Sheriff Adam Christianson, Sheriff Jon Lopey, Sheriff Margaret Mims, Sheriff Tom Bosenko, David Hencratt, Sheriff Steven Durfor, Sheriff Thomas Allman, Sheriff David Robinson, Sheriff Scott Jones, Sheriff Bruce Haney, Sheriff John D'Agostini, and Retired Sheriff Larry Jones.

Brandon M. Kilian, La Grange, California, for Amicus Curiae The Madison Society, Inc.
Michael John Vogler, Vogler Law Offices, Pasadena, California, pro se Amicus Curiae.

Author of Opinion: Judge William A. Fletcher

Circuit: Ninth Circuit

Case Alert Supervisor:
Professor Ryan T. Williams

    Posted By: Ryan Williams @ 09/07/2016 01:18 PM     9th Circuit     Comments (0)  

  TEIXEIRA, et. al. v. COUNTY OF ALAMEDA, et. al. - 9th Circuit
Headline: Ninth Circuit panel held that a county ordinance regulating the location of a retail firearm store was an unconstitutional violation of the Second Amendment right to keep and bear arms.

Area of Law: Constitutional Law; Second Amendment; Fourteenth Amendment; Equal Protection Clause

Issue Presented: Whether the County of Alameda violated the plaintiff-appellant's fundamental rights under the Fourteenth Amendment's Equal Protection Clause and the Second Amendment's right to keep and bear arms when the County denied a "conditional use permit" to a prospective gun store operator.

Brief Summary:

Plaintiff-Appellant decided to open a retail firearm business selling firearms, ammunition and gun-related equipment in Alameda County. The plaintiff-appellant was granted and then denied a "conditional use permit" after the County held that the plaintiff-appellant had not satisfied a 500-foot requirement found in its Ordinance. The Ordinance required that the proposed location of the business not be within 500 feet of a "residentially zoned district" and found the proposed retail firearm business was approximately 446 feet from the nearest disqualifying property. The plaintiff-appellant claimed that as a result of the Ordinance, there were no parcels in Alameda County which would have been available for firearm retail stores, and thus amounted to an unconstitutional ban.
The plaintiff-appellant filed a claim under the Fourteenth Amendment Equal Protection clause and the Second Amendment right to keep and bear arms. The district court granted a motion to dismiss and the plaintiff-appellant appealed the decision.
The Ninth Circuit panel concluded that since the right to keep and bear arms is an enumerated fundamental right, the matter was more appropriately analyzed under the Second Amendment and not under the Equal Protection Clause. Thus, the Ninth Circuit panel affirmed the dismissal of the Equal Protection claims.
As for the Second Amendment claims, the Ninth Circuit panel applied a two-step inquiry to determine whether there was an unconstitutional violation. The two-step inquiry first required the determination as to whether the challenged law burdened conduct protected by the Second Amendment; and the second step was to identify and apply the proper standard of review. The Ninth Circuit panel held that "one cannot keep arms when the state prevents him from purchasing them" and therefore, concluded the Ordinance burdened conduct protected by the Second Amendment when it prohibited the sale of firearms. The Ninth Circuit panel applied another two-step analysis to determine the appropriate standard of review and concluded intermediate scrutiny was proper.
In applying the intermediate scrutiny analysis the Ninth Circuit panel held that although the district court properly identified some interests that were "significant, substantial or important," the County had failed to meet its burden of demonstrating that there was "a reasonable fit between the challenged regulation and the asserted objective." Thus, the Ninth Circuit panel held that the County had not satisfied the intermediate scrutiny standard of review.

Significance: The Ninth Circuit panel established manner in which to ascertain the appropriate standard of scrutiny for Second Amendment challenges and upheld the right to own a gun retail store.

Extended Summary:
Plaintiff-Appellant, John Teixeira ("Teixeira") and his business partners decided to open a retail firearm business selling firearms, ammunition and gun-related equipment in Alameda County ("County").
In order to obtain "Conditional Use Permits" the County issued an Ordinance that required the County to determine whether there was (1) a "public need" for the business and (2) whether the business will "adversely affect the health or safety of persons residing or working in the vicinity," and (3) whether the business would be detrimental to the public welfare. Additionally, the County specifically required that a retail firearm applicant also prove (1) it possessed the requisite state and federal licenses, (2) it would store firearms and ammunition lawfully, and (3) the proposed location of the business was not within 500 feet of a "residentially zoned district; elementary, middle, or high school; pre-school or daycare center; other firearm sales businesses or liquor stores." The 500-foot distance was "to be measured from the closest door of the proposed business location to the front door of any disqualifying property." Teixeira measured the distance and found the nearest disqualifying property was 532 feet away.
The County Planning Department issued a report stating that Teixeira had satisfied the requirements, but concluded that a "zoning variance" would be required because the proposed location was within 500 feet of a residential property, and therefore failed to qualify for a permit. The report recommended denying the "zoning variance" because the measured distance between the exterior wall of the new business and the property line of the nearest residential property was 446 feet apart.
The West County Board of Zoning Adjustment scheduled a public hearing and voted to grant the variance and issued the permit. The San Lorenzo Village Homes Association challenged the decision and the Alameda County Board of Supervisors revoked the permit.
Teixeira challenged the revocation in the district court arguing that the Ordinance violated his right to due process; denied him equal protection and was impermissible under the Second Amendment both facially and as applied. The County moved to dismiss arguing the Equal Protection claims failed to state sufficient facts and the regulations governing the sale of firearms were presumptively valid under the Second Amendment. The district court granted the motion to dismiss and Teixeira appealed.
In order to succeed under the Equal Protection Clause claims, the Ninth Circuit panel held that Teixeira must allege he was "denied a fundamental right while others were permitted to exercise such right." The Ninth Circuit panel held that this is not a situation where one group is being denied a right while another is not. The Ninth Circuit panel then concluded that since the right to keep and bear arms is an enumerated fundamental right, the matter was more appropriately analyzed under the Second Amendment. Thus, the Ninth Circuit panel affirmed the dismissal of the Equal Protection claims.
As for the Second Amendment claims, the Ninth Circuit panel upheld the fundamental understanding that "the right of the people to keep and bear arms, shall not be infringed." To determine whether the Ordinance violated the Second Amendment right, the Ninth Circuit panel employed a two-step inquiry. The first step was determining whether the challenged law burdened conduct protected by the Second Amendment. The second step was to identify and apply the appropriate standard of review.
Regarding the first step, the Ninth Circuit panel determined the only way to establish whether the challenged law burdened conduct protected by the Second Amendment was by reviewing the historical understanding of the scope of the right. The Ninth Circuit panel held that the historical record shows, and that American have continued to believe, that the right to keep and bear arms includes the freedom to purchase and sell weapons. The Ninth Circuit panel concluded that "[o]ne cannot truly enjoy a constitutionally protected right when the State is permitted to snuff out the means by which he exercises it; one cannot keep arms when the state prevents him from purchasing them." Therefore, the Ninth Circuit panel held that the law burdened conduct protected by the Second Amendment by prohibiting the sale of firearms.
The second step in the inquiry was to identify and apply the proper standard of review. The County argued that the standard of review was the rational basis review. However, the Ninth Circuit panel held a heightened standard of review was more appropriate and identified another two-step analysis in ascertaining the appropriate level of scrutiny in Second Amendment claims. The two-step analysis considered "(1) how close the law comes to the core of the Second Amendment right and (2) the severity of the law's burden on the right." The Ninth Circuit panel held "there is no question that an ordinance restricting the commercial sale of firearms would burden 'the right of a law-abiding, responsible citizen to possess and carry a weapon'" and therefore concluded that "such a regulation comes close to the core of the Second Amendment right." As for the severity of the law's burden, the district court had found that the Ordinance merely regulated the gun stores and did not ban them. However, Teixeira alleged that as a result of the 500-foot rule, there were no parcels in Alameda County which would have been available for firearm retail stores, and thus amounted to a complete ban. The Ninth Circuit panel suggested that if Teixeira had been given a chance to prove the ordinance was a total ban, it would have warranted a "strict scrutiny" standard of review. However, because Teixeira alleged that the Ordinance's 500-foot requirement was unconstitutional on its face, the Ninth Circuit panel applied "intermediate scrutiny" standard of review.
The Ninth Circuit panel then applied the intermediate scrutiny standard of review and held that the district court properly identified some interests that were "significant, substantial or important." However, the panel concluded the County had the burden to demonstrate that there was "a reasonable fit between the challenged regulation and the asserted objective" and the district court failed to explain how a gun store would increase crime in the vicinity and how a gun store might negatively impact the aesthetics of the neighborhood. Therefore, the Ninth Circuit panel held that the County failed to carry such burden and the intermediate scrutiny standard was not satisfied. Therefore, the Ninth Circuit panel reversed the motion to dismiss as to the Second Amendment claims and remanded the matter to the district court.

Panel: Diarmuid F. O'Scannlain, Barry G. Silverman, Carlos T. Bea, Circuit Judges, and William Horsley Orrick III, District Judge.

Argument Date: December 8, 2015

Date of Issued Opinion: May 16, 2016

Docket Number: 13-17132

Decided: Affirmed in part, reversed in part, and remanded

Case Alert Author: Kristina Coronado

Counsel: Donald E. J. Kilmer, Jr. (argued) and Charles W. Hokanson, for Plaintiffs-Appellants.

Scott J. Feudale, County Counsel, Alameda County, California (argued), Donna R. Zeigler, County Counsel, and Mary Ellyn Gormley, Assistant County Counsel for Defendants-Appellees.

Alan Gura, Gura & Possessky, PLLC, on behalf of the Citizens Committee for the Right to Kepp and Bear Arms in support of Plaintiffs-Appellants.

Arent Fox LLP, on behalf of Law Center to Prevent Gun Violence and Youth Alive! in support of the Defendant-Appellees.

Author of Opinion:
Diarmuid F. O'Scannlain, Circuit Judge

Case Alert Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 09/07/2016 01:15 PM     9th Circuit     Comments (0)  

  Facebook v. Vachani - Ninth Circuit
Headline: Computer Fraud and Abuse Act of 1986 ("CFAA") was not violated when Power accessed Facebook, Inc.'s ("Facebook") computers, knowing that Power was not authorized to do so.

Areas of Law:[/B] Privacy Law, Electronic Communication Law, Evidence, Torts

Issues Presented:

Whether the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 ("CAN-SPAM Act"), 15 U.S.C. §§ 7701-7713, was violated by either: (1) external emails sent when Power Ventures, Inc. ("Power") caused a Facebook event to be created or (2) internal Facebook messages authored by Power that Power users transmitted to their Facebook friends.

Whether the Computer Fraud and Abuse Act of 1986 ("CFAA"), 18 U.S.C. § 1030 et. seq., was violated when Power accessed Facebook, Inc.'s ("Facebook") computers, knowing that Power was not authorized to do so.

Whether Cal. Penal Code § 502 was violated when Power accessed Facebook's computers, knowing that Power was not authorized to do so.

Brief Summary: Now defunct social networking company, Power Ventures, Inc. ("Power"), engaged in a promotional campaign wherein Power accessed Facebook, Inc.'s ("Facebook") user data and initiated electronic messages promoting Power's website. While Power initially had implied permission to do so from Facebook through Facebook's users, Facebook later expressly revoked said permission via a cease and desist letter to Power. Notwithstanding Facebook's cease and desist letter, Power continued its unauthorized promotional campaign, thereby resulting in Facebook bringing suit for violations of the CAN-SPAM Act, the CFAA, and Cal. Penal Code § 502.

Following entry of summary judgment against Power on all three claims, Power appealed on three issues: (1) whether the CAN-SPAM Act, was violated by either (a) external emails sent when Power caused a Facebook event to be created or (b) internal Facebook messages authored by Power that Power users transmitted to their Facebook friends; (2) whether the CFAA was violated when Power accessed Facebook's computers, knowing that Power was not authorized to do so; and (3) whether Cal. Penal Code § 502 was violated when Power accessed Facebook's computers, knowing that Power was not authorized to do so.

The Ninth Circuit panel thereafter found that: (1) the CAN-SPAM Act was not violated by external emails sent when Power caused a Facebook event to be created because multiple parties initiated the disputed messages and the "from" line accurately identified a person who initiated the disputed messages and a Power user consented to share Power's promotion through an event invitation; (2) the CAN-SPAM Act was not violated by internal Facebook messages by power that Power users transmitted to their Facebook friends because the body of the messages included Power's identity and a link to Power's website and Facebook users who were identified as the senders authorized the sending of the messages; (3) the CFAA and Cal. Penal Code § 502 were violated when a party accesses a computer where there is no permission to do so or where such permission has been explicitly revoked; and (4) the CFAA is not violated merely by violating a website's terms of use alone.

Significance: The Ninth Circuit panel establishes that: (1) the CAN-SPAM Act was not violated by external emails sent when Power caused a Facebook event to be created because multiple parties initiated the disputed messages and the "from" line accurately identified a person who initiated the disputed messages and a Power user consented to share Power's promotion through an event invitation; (2) the CAN-SPAM Act was not violated by internal Facebook messages by Power that Power users transmitted to their Facebook friends because the body of the messages included Power's identity and a link to Power's website and Facebook users who were identified as the senders authorized the sending of the messages; (3) the CFAA and Cal. Penal Code § 502 were violated when a party accesses a computer where there is no permission to do so or where such permission has been explicitly revoked; and (4) the CFAA is not violated merely by violating a website's terms of use alone.

Extended Summary: Power was a social networking website where individuals who already used other social networking websites could log on to Power.com and create an account. Power would thereafter aggregate the user's social networking information from various social networking websites on a single page thereby enabling the user to keep track of a variety of social networking friends through a single program. Facebook also operates a social networking website, Facebook.com, where users must register and agree to Facebook's terms of use before website access is granted. Once registered, a Facebook user can create and customize their profile by adding personal information, photographs, or other content.

In general, a non-Facebook user is not allowed to use Facebook.com to send messages, post photographs, or otherwise contact Facebook users through their profiles. Rather, Facebook requires non-Facebook users that want to contact Facebook users through Facebook.com to enroll in a program called "Facebook Connect," whereby these third parties are required to register with Facebook and agree to a separate Developer Terms of Use Agreement.

In December 2008, Power initiated a promotional campaign to attract more traffic to Power.com. In hopes of attracting Facebook users, Power placed an icon on Power.com that read, "[f]irst 100 people who bring 100 new friends to Power.com win $100." A button in the icon included the words, "[y]es I do!" and if a user clicked the button, then Power would create an entry on the user's Facebook profile in the form of an event, photo, or status. In many instances, Power either caused a message to be transmitted to the user's "friends" within Facebook's system or, depending on the user's Facebook settings, caused Facebook itself to generate an email message.

Facebook became aware of Power's promotional campaign on December 1, 2008, and on that same date, Facebook sent a cease and desist letter to Power, thereby instructing Power to cease its promotional campaign. Power also declined to sign Facebook's Developer Terms of Use Agreement and enroll in Facebook Connect. In an attempt to prevent Power from continuing its promotional campaign, Facebook instituted an Internet Protocol ("IP") block, but Power circumvented Facebook's efforts by switching IP addresses. Through this period, Power continued its promotional campaign, notwithstanding that Power knew that it took, copied, or made use of Facebook.com data without Facebook's permission to do so.

Facebook thereafter sued Power in district court, alleging violations of the CAN-SPAM Act, the CFAA, and Cal. Penal Code § 502 and moved for summary judgment. The district court found in favor of Facebook on all three claims and similarly denied Power's motion for reconsideration.

Power thereafter raised three issues on appeal: (1) whether the CAN-SPAM Act, was violated by either (a) external emails sent when Power caused a Facebook event to be created or (b) internal Facebook messages authored by Power that Power users transmitted to their Facebook friends; (2) whether the CFAA was violated when Power accessed Facebook's computers, knowing that Power was not authorized to do so; and (3) whether Cal. Penal Code § 502 was violated when Power accessed Facebook's computers, knowing that Power was not authorized to do so.

On the first issue, the Ninth Circuit panel first noted that for a message to violate the CAN-SPAM Act, it must be "materially misleading" or "materially false." 15 U.S.C. § 7704(a)(1). Under 15 U.S.C. § 7704(a)(6), "materially," when used in the context of false or misleading header information, includes the:

alteration or concealment of header information that would impair the ability of an Internet access service processing the message on behalf of a recipient, a person alleging a violation of this section, or a law enforcement agency to identify, locate, or respond to a person who initiated the electronic mail message or to investigate the alleged violation, or the ability of a recipient of the message to respond to a person who initiated the electronic message.

Moreover, a "from" line that "accurately identifies any person who initiated the message shall not be considered materially false or materially misleading." 15 U.S.C. § 7704(a)(1)(B). In addition, "header information that is technically accurate but includes an originating electronic mail address, domain name, or Internet Protocol address the access to which for purposes of initiating the message was obtained by means of false or fraudulent pretenses or representations" is considered to be "materially misleading." 15 U.S.C. § 7704(a)(1)(A).

The Ninth Circuit panel then identified two types of message that could rise to the level of "materially misleading" under the CAN-SPAM Act: (1) external emails sent when Power Ventures, Inc. ("Power") caused a Facebook event to be created and (2) internal Facebook messages authored by Power that Power users transmitted to their Facebook friends.

As to the external emails, the Ninth Circuit panel took note of the fact that the "from" line of the emails identified Facebook as the sender, that the body of the email was signed "Thanks, The Facebook Team," and that the header stated that a friend of the recipient invited the user to an event entitled "Bring 100 friends and win 100 bucks." Because the CAN-SPAM Act provides that a "from" line that accurately identifies a person who initiated the message is not "misleading" (see 15 U.S.C. § 7704(a)(1)(B)), the Ninth Circuit panel found it relevant whether Facebook "initiated" the messages. The CAN-SPAM Act defines "initiate" to mean "to originate or transmit such message or to procure the origination or transmission of such message, but shall not include actions that constitute routine conveyance of such message.," and importantly, more than one person may be considered to have initiated the message. 15 U.S.C. § 7702(9).

The Ninth Circuit panel then reasoned that because: (1) a Power user granted Power permission to share the promotion, (2) Power accessed that user's Facebook data after receiving such permission, (3) Facebook created and caused form emails to be sent to recipients, that these actions all required some affirmative consent or some creative license, and (4) the CAN-SPAM Act expressly provides that more than one person may be considered to have initiated the message, Power's users, Power, and Facebook all initiated the disputed messages and the "from" line was therefore not misleading within the meaning of the CAN-SPAM Act.

On balance, the Ninth Circuit panel acknowledged that although the CAN-SPAM Act includes as materially misleading, a technically accurate header that includes information accessed through false or fraudulent pretenses or representations, Power users consented to Power's access of their Facebook data and permitted Power to share its promotional campaign through event invitations. As such, the Ninth Circuit panel held that Power did not use false pretenses or fraudulent representations to obtain consent from users and that the external messages were therefore not "materially misleading" within meaning of the CAN-SPAM Act.

In regards to the internal messages sent within Facebook's system, the Ninth Circuit panel noted that the messages could only be deemed "misleading" if they impaired the ability of the recipient to "respond to a person who initiated the electronic mail message" or the ability of Facebook to locate the initiator of the message. 15 U.S.C. § 7704(a)(6). Under this standard, the Ninth Circuit panel held that the disputed messages were not misleading because: (1) the body of the messages included Power's identity and a link to Power.com and (2) Facebook users who were identified as the senders did in fact authorize the sending of the messages.

As such, on the issue of whether the external emails or internal emails violated the CAN-SPAM Act, the Ninth Circuit panel held that Power did not violate the CAN-SPAM Act, reversed the district court's entry of summary judgment, and remanded for entry of judgment in favor of Power.

On the second issue of whether the CFAA was violated when Power accessed Facebook's computers knowing that Power was not authorized to do so, the Ninth Circuit panel noted that under the CFAA there are two ways of committing a crime of improperly accessing a protected computer: "(1) obtaining access without authorization; and (2) obtaining access with authorization, but then using that access improperly." Musaccio v. United States, 136 S.Ct. 709, 713 (2016). Following the precedent of LVRC Holdings LCC v. Brekka, 581 F.3d 1127 (9th Cir. 2009) and United States v. Nosal, 676 F.3d 854 (9th Cir. 2012), respectively, the Ninth Circuit panel further distilled two general rules in analyzing authorization under the CFAA: (1) a defendant can violate the CFAA when he or she lacks permission to access a computer or where permission has been explicitly revoked and (2) merely violating a website's terms of use alone cannot be the basis for liability under the CFAA.

Under these standards, the Ninth Circuit panel reasoned that initially, Power users impliedly gave Power permission to use Facebook's computers to distribute messages because it was reasonable that Power could have construed that consent from Facebook's users to share Power's promotional campaign was permission for Power to access Facebook's computers. However, once Facebook issued its cease and desist letter to Power, Facebook expressly revoked any such permission. Moreover, Facebook further solidified its revocation of any implied permission to access its computers by imposing IP blocks in an effort to prevent Power from accessing Facebook's computers.

Equally important to the Ninth Circuit panel was the fact that Power admitted during discovery that it had continued to take, copy, and make use of data from Facebook's website notwithstanding clearly and unequivocally knowing that Power was expressly forbidden from using or accessing Facebook's data. Internal Power emails similarly showed that Power's officers and executives acknowledge engaging in various prohibited activities without Facebook's permission.

Based on these facts, the Ninth Circuit panel held that Power's admissions showed that: (1) Power deliberately disregarded the case and desist letter; (2) Power accessed Facebook's computers without authorization to do so; and (3) Power circumvented IP barriers to access Facebook's computers notwithstanding lacking authorization to do so. As such, the Ninth Circuit panel affirmed the district court's finding that Power had violated the CFAA because Power accessed Facebook's computers "without authorization" and was thereby liable under the CFAA.

On the third and final issue of whether Cal. Penal Code § 502 was violated when Power accessed Facebook's computers knowing that Power was not authorized to do so, the Ninth Circuit panel noted liability exists under Cal. Penal Code § 502 merely by knowingly accessing a computer system or computer network. United States v. Christensen, 801 F.3d 970, 994 (2015).

As in its CFAA analysis, the Ninth Circuit panel noted that Power had implied authorization to access Facebook's computers and that no violation of Cal. Penal Code § 502 occurred until Facebook sent its cease and desist letter to Power, at which time Power - concededly - knew that it no longer had any permission whatsoever to access Facebook's computers. By continuing to knowingly accessing Facebook's computers and taking, copying, and making use of Facebook's date, the Ninth Circuit panel held that Power violated Cal. Penal Code § 502 and thereby affirmed the district court's finding.

To read the full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/07/12/13-17102.pdf

Panel: Susan P. Graber, Kim McLane Wardlaw, and Mary H. Murguia, Circuit Judges

Argument Date: December 9, 2015

Date of Issued Opinion: July 12, 2016

Docket Number: 13-17102

Decided: Reversed in part, vacated in part, affirmed in part, and remanded

Case Alert Author: Ryan Arakawa

Counsel:
Amy Sommer Anderson (argued), Aroplex Law, San Francisco, California; Steven Vachani (argued pro se), Berkeley, California, for Defendants-Appellants.

Eric A. Shumsky (argued), Orrick, Herrington & Stucliffe LLP, Washington, D.C.; I. Neel Chatterjee, Monte Cooper, Brian P. Goldman, and Robert L. Uriarte, Orrick, Herrington & Sutcliffe LLP, Menlo Park, California, for Plaintiff-Appellee.

Jamie L. Williams (argued), Hanni M. Fakhoury, and Cindy A. Cohn, Electronic Frontier Foundation, San Francisco, California, as and for Amicus Curiae.

Author of Opinion: Judge Susan P. Graber

Circuit: Ninth Circuit

Case Alert Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 09/07/2016 01:12 PM     9th Circuit     Comments (0)  

July 7, 2016
  Ministry of Defense & Support for the Armed Forces of the Islamic Republic ex rel. Iran v. Frym - Ninth Circuit
Headline: Ninth Circuit rejects Iran's claim of foreign-state immunity from attachment of an Iranian judgment pursuant to exceptions under the Algiers Accords and confirmed the District court's ruling that the judgment qualifies as a "blocked asset" within the meaning of the Terrorism Risk Insurance Act.

Area of Law: National Security Law; Judgments and Liens

Significance: American citizens may collect on valid judgments they hold against the Islamic Republic of Iran ("Iran") for their injuries arising out of terrorism sponsored by Iran.

Issue Presented: Whether, under the Algiers Accords or President Obama's 2012 Executive Order No. 13359, a judgment granted in favor of Iran by a U.S. district court in 1999 qualifies as a "blocked asset" within the meaning of the Terrorism Risk Insurance Act and is therefore attachable for the purpose of enforcing default judgments obtained against Iran on terrorist-related claims.

Brief Summary: Under the Terrorism Risk Insurance Act ("TRIA"), an exception to a foreign state's immunity from attachment of a judgment pursuant to the Foreign Sovereign Immunities Act ("FSIA"), Lien Claimants moved to attach a judgment awarded to the Republic of Iran ("Iran") in 1999 by the U.S. District Court for the Southern District of California. Iran opposed the motion, arguing that a resolution to the Iranian Hostage Crisis (the Algiers Accords) protects the judgment from attachment and that the judgment did not fall within the meaning of a "blocked asset" as defined under TRIA.

The district court granted the attachment, concluding that the Algiers Accords served only to restore Iran's position prior to November of 1979, and as of 1979, Iran lacked an interest in the judgment at issue. The district court also ruled that the judgment constituted a blocked asset for purposes of TRIA pursuant to "President Obama's 2012 Executive Order No. 13359" and "President Bush's 2005 Executive Order No. 13382." The district court alternatively found that a sub-group of the Lien Claimants (the Rubin Claimants) could have attached the judgment pursuant to a terrorism-related judgment exception under 28 U.S.C. § 1610(g).

The Ninth Circuit panel affirmed although the panel declined to address the district court's decision regarding "President Bush's 2005 Executive Order No. 13382" and the terrorism-related judgment exception under 28 U.S.C. § 1610(g). According to the panel, Iran misidentified the asset at issue by arguing that the FISA exceptions applied to Iran's property interest in certain equipment that gave rise to the claim on which Iran procured its judgment. The panel held that the relevant asset at issue was not Iran's property interest in the equipment, but rather Iran's property interest in the judgment, which was not granted until twenty years after the date before which the Algiers Accords may have rendered the judgment immune from attachment. Because both of Iran's arguments premised on its property interest in the equipment rather than its property interest in the judgment, Iran failed to show that the judgment does not constitute a blocked asset within the meaning of TRIA and therefore is immune from attachment.

Extended Summary: The Foreign Sovereign Immunities Act ("FSIA") prohibits a suit against a foreign state and an attachment of its assets to satisfy a judgment. Under 28 U.S.C. § 1605, if state-sponsored-terrorism gives rise to a claim, there is an exception to FISA, which abrogates a foreign state's immunity from judgment. Although § 1605 nullified a foreign state's immunity from judgment, the FISA provision prohibiting the attachment of a foreign state's assets remained intact until 2002 when Congress enacted the Terrorism Risk Insurance Act ("TRIA"). The TRIA provides that when a judgment has been obtained under the FISA exception, "the blocked assets of [the] terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party) shall be subject to execution or attachment . . . to satisfy such judgment to the extent any compensatory damages for which such terrorist party has been adjudged liable." "Blocked" assets comprise of assets the United States has "seized or frozen" pursuant to the International Emergency Powers Act ("IEEPA").

In 1977, the Republic of Iran ("Iran") entered into a contract to purchase an air combat maneuvering range system ("ACMR") from an American company, Cubic Defense Systems, Inc. ("Cubic"). In a separate contract, Cubic promised to provide maintenance for the ACMR. By October of 1978, Iran had expended more than $12 million on the $17 million purchase price in addition to payments pursuant to the service contract. By February of 1979, Cubic was prepared to export the equipment to Iran. However, complete performance under both contracts became frustrated after the Iranian revolution distressed the relationship between Iran and the United States. Pursuant to a modified agreement, Iran authorized Cubic to resell the ACMR, the result of which would have either gave Iran the right to partial reimbursement or Cubic entitlement to additional payment. However, when Cubic sold the ACMR to Canada in 1982, Cubic disregarded Iran's demand for an accounting. Consequently, pursuant to arbitration provisions in the contracts, Iran commenced arbitration proceedings with the International Chamber of Commerce (ICC). The ICC awarded Iran $2.8 million in damages, including interest and costs.

In 1991, Claimant France M. Rafi ("Rafi") brought an action against Iran under the state-sponsored-terrorism exception of the FSIA after Rafi's father, former Iran Prime Minister Dr. Shapoir Bakhtiar, was murdered because he opposed the Islamic government. Iran failed to appear, and the district court entered a default judgment against Iran for $5 million. Similarly, in 1997, the Rubin Claimants, a group of individuals who were either injured or whose relatives were injured by a suicide bombing in Jerusalem, brought an action against Iran under the state-sponsored-terrorism exception of the FSIA. Again, Iran failed to appear, and the district court entered a default judgment against Iran and ordered payment of damages that ranged from $2.5 million to $15 million.

In 1999, the U.S. District Court for the Southern District of California confirmed Iran's arbitration award and entered a judgment accordingly. When Cubic deposited the funds with the district court, Rafi and the Rubin Claimants ("Lien Claimants") moved for attachment of the judgment. In opposition to the attachment, Iran argued "(1) that the Algiers Accords, by which the United States and Iran resolved the Iranian Hostage Crisis, required the United States to protect the Cubic Judgment from attachment; and (2) that the Cubic Judgment was in any event not attachable under the TRIA or any other statute."

The district court granted the attachment, concluding that the Algiers Accords served only to restore Iran's position prior to November of 1979, and as of 1979, Iran lacked an interest in the confirmed arbitration award. The district court also ruled that the "Cubic Judgment" constituted a blocked asset under the TRIA because "the Cubic Judgment was blocked pursuant to 'President Obama's 2012 Executive Order No. 13359' and 'President Bush's 2005 Executive Order No. 13382.'" The district court therefore found that attachment of the Cubic Judgment was proper under the TRIA. The district court alternatively found that, pursuant to 28 U.S.C. § 1610(g), "the special attachment provision of the FSIA for creditors holding a Section 1605A terrorism-related judgment against a foreign state," the Rubin Claimants could have attached the Cubic Judgment.

On appeal to the Ninth Circuit, Iran argued that based on a variety of factors, including Iran's payments totaling more than $12 million on a $17 million contract entered in 1978, Iran acquired a property interest in the ACMR prior to November 14, 1979. Iran also argued that President Obama's 2012 Executive Order exempted the ACMR from constituting as a "blocked asset" under TRIA.

To address Iran's property-interest argument, the Ninth Circuit panel referenced the holding in Ministry of Defense & Support for the Armed Forces of the Islamic Republic of Iran v. Elahi, where the Supreme Court distinguished a property interest in an ACMR from a property interest a similarly situated lien claimant had in a judgment enforcing an arbitration award. 556 U.S. 366, 376 (2009). Under Elahi, The panel concluded that Iran's interest in the Cubic Judgment, which arose after the district court confirmed Iran's arbitration award in 1998, was the relevant asset at issue. The panel further concluded that Iran's property interest relevant to the Cubic Judgment was not in the ACMR but rather Iran's demand for an accounting, which did not and could not arise until after Cubic resold the ACMR to Canada in 1982. The panel also rejected Iran's claim that the ACMR was not a blocked asset under TRIA because that argument relies on a faulty premise: that the ACMR, not the Cubic Judgment, was the relevant asset at issue. Accordingly, the panel concluded that the Cubic Judgment constituted a blocked asset under TRIA pursuant to President Obama's 2012 Executive Order.

The panel declined to address the district court's ruling that the Cubic Judgment is not a blocked asset under President Bush's 2005 Executive Order No. 13382. Nor did the panel address the district court's alternative holding that the Rubin Claimants may attach the Cubic judgment under 28 U.S.C § 1610(g). Addressing those issues were unnecessary because neither would have resolved Iran's burden of proving that the Cubic Judgment was not subject to attachment pursuant to TRIA and President Obama's 2012 Executive Order. Therefore, review de novo, the panel affirmed.

To read full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/02/26/13-57182.pdf

Panel: Before: Dorothy W. Nelson, Consuelo M. Callahan, and N. Randy Smith, Circuit Judges.

Argument Date: February 2, 2016

Date of Issued Opinion: February 26, 2016

Docket Number: 13-57182

Decided: Affirmed

Counsel: Steven W. Keredes (argued), Pasadena, California, for Petitioner-Appellant.

Jonathan R. Mook (argued), DimuroGinsberg, P.C., Alexandria, Virginia; Philip J. Hirschkop, Hirschkop & Associates, Lorton, Virginia, for Claimant-Appellee France M. Rafi.

David J. Strachman (argued), McIntyre Tate LLP, Providence, Rhode Island, for Claimants-Appellees Jenny Rubin, Deborah Rubin, Daniel Miller, Abraham Mendelson, Stuart E. Hersh, Renay Frym, Noam Rozenman, Elena Rozenman, and Tzvi Rozenman.

Stuart F Delery, Assistant Attorney General; Laura E. Duffy, United States Attorney; Sharon Swingle and Benjamin M. Schultz (argued), Attorneys, Appellate Staff Civil Division, United States Department of Justice; Lisa J. Grosh, Assistant Legal Advisor, Department of State; Bradley T. Smith, Chief Counsel, Office of Foreign Assets Control, Department of the Treasury, Washington D.C., for Amicus Curiae United States.

Author of Opinion: Judge D.W. Nelson

Case Alert Author: Andre Clark

Case Alert Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 07/07/2016 07:51 PM     9th Circuit     Comments (0)  

  Miguel Galindo Sifuentes v. P.D. Brazelton - Ninth Circuit
Headline: Avoiding race specific and discriminatory language may help prosecutors survive a Batson motion, even when a prosecutor had a clear agenda to strike prospective black jurors from the jury.

Area of Law: Criminal Procedure, Habeas Corpus, Jury Selection Process

Issue Presented: Whether the California Court of Appeal was objectively unreasonable under "the doubly deferential standard" applied to collateral review of the Batson motions under the Antiterrorism and Effective Death Penalty Act (AEPDA) in affirming the trial court's determination that the prosecutor's reasons for striking the individual jurors were nondiscriminatory and whether the trial court's denial of defendant's request for rebuttal on the first two Batson motions in which five black jurors were excluded constituted an error that resulted in "actual prejudice" towards Sifuentes.

Brief Summary: Defendant Miguel Galindo Sifuentes was convicted of first degree murder. He made three objections during jury selection under Batson v. Kentucky, 476 U.S. 79 (1986). The trial court requested the prosecutor to explain the reasons for excusing the nine black prospective jurors. It determined that the reasons were race neutral and not discriminatory and denied the Sifuentes's request for rebuttal for the first two Batson motions, but granted the third. The California Court of Appeal affirmed the trial court's decision despite recognizing its error in denial of defendant's rebuttal on the motions. The California Supreme Court denied defendant's petition for review. Sifuentes then petitioned for a writ of habeas corpus in federal court. This request was partially granted by the district court. The United States Court of Appeals for the Ninth Circuit reversed the district court's grant of a writ of habeas corpus because after applying the AEDPA, 28 U.S.C. § 2254, doubly deferential standard to the Batson challenges on collateral review the panel found that the state appellate court's holding was not objectively unreasonable in upholding the trial court's determination.

Significance: Sifuentes v. P.D. Brazelton further exemplifies a defendant's uphill battle to prove discrimination in the jury trial selection process, especially on collateral review, because the standards are even higher, while Foster v. Chatman (14-8349) is on the Supreme Court docket for further guidance in dealing with cases involving Batson motions.

Extended Summary: Defendants Miguel Galindo Sifuentes, Ruben Vasquez, and Hai Minh Le were accused of robbing an Outback Steakhouse restaurant in Dublin, California on December 11, 1998. Defendant Vasquez fatally shot Sheriff Deputy, John Monego, after the sheriff arrived at the scene and entered the restaurant. All three defendants fled the scene, but were later apprehended and tried jointly. Sifuentes was charged with first degree murder.
During the jury selection process, the prosecutor used preemptory strikes to remove thirty-three jurors, including nine black prospective jurors. Sifuentes made three objections under Baston and Wheeler. The trial judge determined that Sifuentes made a prima facie case of discrimination and asked the prosecutor to explain his reasoning for excusing the nine black prospective jurors. The trial court concluded that the prosecutor's reasons were racially neutral and not discriminatory. However, the trial court denied defendant's request for rebuttal on the first and second Baston motions, and only allowed rebuttal of the prosecutor's explanations for the third motion. The prosecutor stated that he would have allowed a black female prospective juror, but the defense excused her, and another black male juror failed to appear in court.

Sifuentes and his co-defendants were each convicted of first degree murder. Sifuentes appealed the conviction to the California Court of Appeal. The appellate court affirmed Sifuentes' conviction in January 2006. Thereafter, the California Supreme Court denied review in May 2006. Sifuentes petitioned for a writ of habeas corpus in federal court on the grounds that the state court "unreasonably determined the facts in rejecting his Batson challenge" and on the grounds that the state court "unreasonably applied Supreme Court precedent in precluding him from rebutting the prosecutor's explanations for his strikes." The district court granted relief on Sifuentes' claim as to two jurors, Thompson and Gibson, and rejected the other claims. The state appealed.

The United States Court of Appeals for the Ninth Circuit explained the framework available for review. The panel stated that Batson subjects the State's privilege to strike individual jurors to the commands of the Equal Protection Clause and "forbids the prosecutor to challenge potential jurors solely on account of their race." Batson, 476 U.S. at 89.

Batson applied a burden-shifting approach where first, the defendant must make a prima facie case of purposeful discrimination. Second, the burden then shifts to the State to provide a race neutral explanation for striking individual jurors. Third, the trial court must determine, based on the submissions provided, if the prosecutor showed purposeful discrimination. See Id. at 90. However, this determination is based on evaluation of credibility and is difficult to assess because the court performing the direct review must rely on the trial court's evaluation of prosecutor's intent.

Under a comparative juror analysis if the reasons for striking a black panelist apply to a similar nonblack who is seated, then there is "evidence tending to prove purposeful discrimination." Miller-El v. Dretke, 545 U.S. 231, 241 (2005). However, the prosecutor's evaluation of a prospective juror that may be unfavorable to her side of the case is also a credibility determination, which takes into consideration the tone, demeanor, facial expression, and emphasis, inter alia, of prospective jurors during the voir dire process. See Burks v. Borg, 27 F.3d 1424, 1429 (9th Cir. 1994).

Moreover, the U.S. Supreme Court did not create a bright line test to hold that there was a Batson violation where panelists of different races provided similar answers and only one was selected and the other was not. To reverse the trial court, the reviewing court must find that the trial court's credibility determination is clearly erroneous. Felkner v Jackson, 562 U.S. 594, 598 (2011). The U.S. Supreme Court held that "where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous." Hernandez v. New York, 500 U.S. 352, 369 (1991).

Nevertheless, in Felkner, the Supreme Court explained that on a federal habeas review, the standard is more deferential. 562 U.S. at 598. The collateral review follows the framework of the AEDPA, 28 U.S.C. § 2254. The AEDPA standard on a Batson claim is whether it is "doubly deferential." Briggs v. Grounds, 682 F.3d 1165, 1170 (9th Cir. 2012). First, the statute requires determining whether the state court's decision was based on an unreasonable determination of the facts in light of the evidence when evaluating the prosecutor's race-neutral explanations. Mitleider v. Hall, 391 F.3d 1039, 1046-47 (9th Cir. 2004). Second, whether the state appellate court was objectively unreasonable in upholding the trial court's decision. However, even if the collateral review reaches a different conclusion on prosecutor's credibility, the reviewing court "must give the state appellate court the benefit of the doubt," Felkner, 562 U.S. at 598, and "may not grant the habeas petition unless the state court's decision was "not merely wrong, but actually unreasonable." Taylor v. Maddox, 366 F.3d 992, 999 (9th Cir. 2004).

Under Davis v. Ayala, following the AEDPA standard of review, the "[s]tate-court factual findings, moreover, are presumed correct; the petitioner of the burden of rebutting the presumption by 'clear and convincing evidence.'" 135 S. Ct. 2187, 2199-2200 (2015). Ayala goes further to establish that even if "reasonable minds reviewing the record might disagree about the prosecutor's credibility, on habeas review that does not suffice to supersede the trial court's credibility determination." Id. at 2201. The doubly deferential standard of review to be conducted on federal habeas means "unless the state appellate court was objectively unreasonable in concluding that the trial court's credibility determination was supported by substantial evidence, we must uphold it." Briggs, 682 F.3d at 1170.

Here, the panel evaluated the dismissed jurors, Thompson and Gibson, for which the district court granted relief. Although Thompson and Gibson stated they were "moderately in favor" of the death penalty, they were established to be more in favor of the death penalty than seven of the seventeen selected jurors who answered that they were "neutral;" and the prosecutor dismissed them on other grounds. Thompson was questioned extensively on his religious beliefs and showed a certain level of equivocation in regards to imposing the death penalty. The panel, citing White v. Wheeler, stated that "[a]mbiguity as to whether a juror would be able to give appropriate consideration to imposing the death penalty is a legitimate and reasonable basis for striking a juror." 136 S. Ct. 456, 461 (2015).

Second, in evaluating Gibson's questionnaire, the prosecutor became concerned with Gibson because she also qualified her answers in regards to the death penalty. The prosecutor also commented on Gibson's marital status and profession, which Sifuentes argued was discriminatory. However, the court cited Rice v. Collins, stating that even if the prosecutor relies on one impermissible reason to excuse a juror, no violation will be found if "[t]he prosecutor provided a number of other permissible and plausible race-neutral reasons." 546 U.S. 333, 340-41 (2006). Therefore, applying the doubly deferential standard, the California Court of Appeal's decision that the trial court properly evaluated the credibility of the prosecutor's assertions about Thompson and Gibson were not objectively unreasonable.

The panel evaluated six other excused black jurors struck during the voir dire process. Sifuentes argued that the district court's grant of habeas petition was also supported by the state appellate court's unreasonable determination of the facts in regards to these prospective jurors. After conducting the doubly deferential standard, the panel concluded that the California Court of Appeal did not make an objectively unreasonable determination of facts and that the trial court did not err in concluding that the prosecutor was credible.

Sifuentes also argued that this court should uphold the district court's grant of the habeas corpus petition because the trial court erred when it precluded him from responding to the prosecutor's explanation to two of the Batson objections raised at voir dire. Following Ayala's standard in analyzing this issue, the panel considered the error identified by the California Court of Appeal in the trial court's denial of rebuttal, and "for the sake of argument" the panel recognized it as a federal constitutional error. Similar to Ayala, the question then was whether such error was prejudicial to the defendant. See Ayala, 135 S. Ct. at 2197. In order to overcome the prejudicial outcome, Sifuentes had to show that the evidence on the record raised "grave doubts about whether the trial judge would have ruled differently." Id. at 2203.

The Brecht standard applies to analysis on collateral review where "the court must find that the defendant was actually prejudiced by the error." Brecht v. Abrahamson, 507 U.S. 619, 637 (1993). A reasonable possibility that a different outcome would result would not be enough. Ayala, 135 S. Ct. at 2203. On direct appeal the Chapman standard applies which requires "harmless beyond a reasonable doubt." Id. at 2197. In a collateral proceeding, the test for prejudice is more forgiving to the prosecution. Id.

Under Ayala, applying the AEDPA, "a federal habeas court cannot grant relief unless the state court's rejection of his claim (1) was contrary to or involved an unreasonable application of clearly established federal law, or (2) was based on an unreasonable determination of the facts." Id. at 2198. Here, the panel applied the "highly deferential AEDPA standard" because the case required adjudication on the merits. Id. at 2197. The panel concluded that a reasonable jurist could arrive to the conclusion that the California Court of Appeal's decision was not objectively unreasonable. Moreover, Sifuentes was not able to articulate a way in which an opportunity for rebuttal would have made a substantial difference at trial, therefore Sifuentes was not actually prejudiced, and if the court allowed rebuttal, there is no reasonable possibility that the trial judge would have ruled differently. The decision of the district court was reversed and remanded with instructions to dismiss the petition.

To read full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/02/18/13-17603.pdf

Panel: Before: Diarmuid F. O'Scannlain and Sandra S. Ikuta, Circuit Judges and James A. Teilborg, Senior District Judge.

Argument Date: May 12, 2015, Resubmitted February 10, 2016

Date of Issued Opinion: February 18, 2016

Docket Number:
13-17603

Decided: Reversed and remanded with instructions to dismiss the petition.

Counsel: Kamala D. Harris, Attorney General of California, Dane R. Gillette, Chief Assistant Attorney General, Gerald A. Engler, Senior Assistant Attorney General, Peggy S. Ruffra, Supervising Deputy Attorney General, John H. Deist (argued), Deputy Attorney General, San Francisco, California, for Respondent-Appellant.

Denis P. Riordan, Donald M. Horgan (argued), Riordan & Horgan, San Francisco, California, for Petitioner-Appellee.

Author of Opinion: Judge S. S. Ikuta

Case Alert Author: David Erghelegiu

Case Alert Supervisor: Professor Ryan T. Williams


    Posted By: Ryan Williams @ 07/07/2016 06:19 PM     9th Circuit     Comments (0)  

  Gonzalez v. U.S. - Ninth Circuit
Headline: Ninth Circuit held that Government is not liable under the Federal Tort Claims Act ("FTCA") when a Federal Agent fails to disclose information to law enforcement.

Area of Law:
Federal Tort Claims Act ("FTCA"); Tort Law

Issue Presented: Whether the discretionary function exception applies - immunizing the Government from liability under the FTCA - where the plaintiff alleges the FBI negligently failed to disclose information to local law enforcement under the Attorney General Guidelines, which provides that the FBI "shall promptly transmit" "serious criminal activity not within the FBI's investigation jurisdiction"?

Brief Summary:
Plaintiff brought a negligence claim, in the U.S. District Court, against the United States under the Federal Torts Claim Act ("FTCA") and sought damages for wrongful death, personal injuries, pain and suffering. Plaintiff alleges that an FBI Agent failed to disclose information to law enforcement that the Minutemen American Defense planned an attack to invade plaintiff's home. Three masked intruders (later identified as members of the Minutemen American Defense) entered plaintiff's home and fatally shot - execution style - the plaintiff's husband and nine-year-old daughter.

The defendant filed a Motion to Dismiss on the grounds that the court lacked subject matter jurisdiction over the FTCA claim because the discretionary function exception applied. The District Court granted the Motion to Dismiss and Plaintiff appealed.

The Ninth Circuit panel analyzed the discretionary function exception and applied the Berkowitz two-prong test - the "Discretionary Act" and the "Policy Judgment" - in holding that the FBI's decision on whether to disclose information to local law enforcement was discretionary and therefore shielded the government from liability under the FTCA. Affirmed.

Significance: The Ninth Circuit panel broadened the discretionary function exception to include negligence claims for the FBI's failure to inform local law enforcement, even though such actions violated the Attorney General Guidelines; and further held that the two-prong standard in Berkowitz was satisfied when the FBI made the decision of whether or not to disclose information to law enforcement, and the government was therefore immune from the plaintiff's tort claim

Extended Summary: Plaintiff-appellant Gina Gonzalez and her minor daughter, A.F. ("Plaintiff") allege the government was liable for negligence when FBI Agent Chris Anderson, failed to disclose information to law enforcement after he learned of a planned home invasion among members of the Minutemen American Defense ("Minutemen") - an activist group that advocates against illegal immigration - against the Plaintiff.

FBI Agent Anderson learned from his informant, Robert Copley, of a possible attack on the plaintiff's home. The informant, who attended a Minutemen meeting, learned of a plan to conduct an "operation" in which the Minutemen would invade plaintiff's home and "secure" the residents, meaning "hitting the house like a SWAT team," to steal drugs, weapons, and money. Copley reported the information to Agent Anderson and provided a map of the approximate area of the attack. Copley told Agent Anderson that he considered the threat imposed by the planned invasion to be "real and imminent." Agent Anderson provided the map to the Phoenix FBI office, but the map was subsequently lost. FBI never provided local law enforcement with any of this information. Fifteen days following the Minutemen meeting, three masked intruders (later identified as members of the Minutemen American Defense) entered plaintiff's home and fatally shot - execution style - the plaintiff's husband and nine-year-old daughter. Although she survived, the plaintiff was wounded in the shoulder and leg.

Plaintiff filed a negligence claim in the U.S. District Court for the District of Arizona claiming the government was liable under the FTCA and sought damages for wrongful death, personal injuries, pain and suffering. The FTCA authorizes private suits against the United States for "damages for loss of property, injury, or death caused by the negligent or wrongful act or omission of any employee of the government while acting within the scope of his office or employment." The plaintiff applied the FTCA and claimed the FBI negligently failed to disclose the information regarding the impending home invasion to local law enforcement, in contravention of the Attorney General's Guidelines. These guidelines provided the FBI "shall promptly transmit" to local law enforcement information concerning "serious criminal activity not within the FBI's investigation jurisdiction."

Defendant filed a Motion to Dismiss on the grounds that the court lacked subject matter jurisdiction over the FTCA claim because the discretionary function exception applied. The discretionary function exception immunized the federal government from claims "based upon the exercise or performance, or the failure to exercise or perform, a discretionary function or duty on the part of the government." The policy is that this exception "prevent[s] judicial 'second-guessing' of legislative and administrative decisions grounded in social, economic, and political policy." The discretion protected is the "discretion of the executive or the administrator to act according to one's judgment of the best course." The district court granted the motion to dismiss and plaintiff appealed.

In affirming the district court's decision, the Ninth Circuit panel cited the Supreme Court's prescribed two-prong test from Berkowitz. The first prong is called the "discretionary act" where the courts are to ask whether the challenged action was a discretionary one; "that is, it must involve an element of judgment or choice." The second is called the "policy judgment" prong where the focus is on the nature of the actions taken, and whether they are susceptible to policy analysis.

Under the first prong, the Discretionary Act, the Ninth Circuit panel concluded that the FBI's decision whether or not to disclose the information regarding potential threats was discretionary. The panel stated that in order to satisfy the Discretionary Act prong, it must look to see if there is some kind of "federal statute, regulation, or policy that specifically prescribes a course of action for an employee to follow," (i.e. duty).

Plaintiff argued that the Attorney General Guidelines served as a regulation for the FBI's duty to disclose information to local law enforcement. The Ninth Circuit panel held that in spite of the mandatory-sounding language in the guidelines, courts have consistently held, where a government agent's performance of an obligation requires an agent to make judgment calls, the discretionary function exception applies. The Ninth Circuit panel reasoned that FBI agents must decide whether the information is credible, whether the criminal activity is serious, and whether there is any other reason relating to the FBI's other operations that counsels against transmitting the information. Therefore, the Ninth Circuit panel held the district court properly concluded that the guidelines did not prescribe a regulation for a mandatory course of conduct and the FBI's actions were discretionary. The Ninth Circuit panel further held that "viewed in context, the mandatory-sounding language such as 'shall' does not overcome the discretionary character of the guidelines."

Under second prong, the Policy Judgment, the Ninth Circuit panel addressed whether the FBI's decisions made pursuant to the Attorney General Guidelines were susceptible to policy judgment. In determining if the conduct involves a policy judgment, the court does not look at the agent's subjective weighing of policy consideration, instead the court looks at the nature of the government's action, or omission, and decides whether it is 'susceptible' to policy analysis under an objective assessment. Here, the Ninth Circuit panel relied on Alfrey and concluded that the omission implicated social and public policy considerations and to decide what steps to take in response to a reported threat, an officer must set priorities among all extant risks. Here, the Ninth Circuit panel concluded the FBI's judgment on how to respond to a reported threat and how extensively to disclose information to other law enforcement implicated many risks, all of which must be weighed in accordance with the FBI's social and public policy judgments. Moreover, the Ninth Circuit panel held that the government is not required to provide proof that any decision actually involved the weighing of policy consideration, and the discretionary function exception applied so long as the challenged decision was one to which a policy analysis could apply.

Finally, the plaintiff argued that the FBI's failure to disclose information did not implicate policy concerns, to satisfy the second prong, due to the doctrine of "design-implementation distinction." This doctrine holds that "the design of a course of governmental action is shielded by the discretionary function exception, whereas the implementation of that course of action is not. Plaintiff argued the failure of the FBI to inform was part of the implementation and thus not shielded. The Ninth Circuit panel disagreed and relied on Weissich where the court held that even if the FBI negligently failed to carry out its own plan of disclosing information to local law enforcement, the focus for the discretionary function exception is on the discretionary and policy-based nature of the guidelines, not on its decisions and implementations.

Ultimately, the Ninth Circuit panel held the district court properly concluded that the government satisfied both prongs of the discretionary function exception. The panel also held the choices to disclose or not to disclose "are among the judgment-laden decisions the discretionary function exception was enacted to shield." Judgment affirmed.

Panel: Marsha S. Berzon, Jay S. Bybee, John B. Owens, Circuit Judges, and Jennifer G. Zipps, District Judge.

Argument Date: March 12, 2015

Date of Issued Opinion: February 24, 2016

Docket Number: 13-15218

Decided: Affirmed.

Case Alert Author: Kristina Coronado

Counsel: Thomas G. Cotter (argued) and Stanley G. Feldman, Haralson, Miller, Pitt, Feldman & McAnally, P.L.C. Tucson, Arizona, for Plaintiffs-Appellants.

Steve Frank (argued) and Mark B. Stern, Appellate Staff Attorneys; Stuart F. Delery, Assistant Attorney General; John S. Leonardo, United States Attorney; United States Department of Justice, Civil Division, Washington, D.C., for Defendant-Appellee.

Author of Opinion: Jay S. Byzee, Circuit Judge

Case Alert Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 07/07/2016 06:15 PM     9th Circuit     Comments (0)  

May 3, 2016
  United States v. Lundin
Headline: The Ninth Circuit panel held that the warrantless search of the defendant's home was not justified by exigent circumstances, explaining that the "knock and talk" exception to the Fourth Amendment's warrant requirement does not apply when officers encroach upon the curtilage of a home with the intent to arrest the occupant.

Area of Law: Criminal Law, Warrantless Search, Motion to Suppress Evidence, Knock and Talk Exception

Issue Presented: Whether police officers were permitted to knock on Lundin's door under the so-called "knock and talk" exception to the warrant requirement, which permits law enforcement officers to "'encroach upon the curtilage of a home for the purpose of asking questions of the occupants,'" when the officers' purpose in knocking on Lundin's door was to find and arrest him.

Brief Summary: Humboldt County Sherriff's Office issued a "Be on the Look Out" ("BOLO") and request for arrest of defendant Eric "Whitey" Lundin ("Lundin") after Deputy Aponte interviewed Susan Hinds ("Hinds") at the local hospital. Hinds gave a statement in which she described Lundin breaking into her home, forcing her to ingest illegal substances, and driving her away against her will while threatening to kill her.
Police had probable cause to arrest Lundin but no warrant was issued for the search of his home. In response to the BOLO and request for arrest, law enforcement officers went to Lundin's residence and knocked on the door without identifying themselves. While standing on the front porch, they heard crashing noises coming from the back of Lundin's home. Officers ran to the back of the house and detained Lundin. While he was placed in the back of the patrol car, officers proceeded to search Lundin's residence and backyard. At the end of the search, officers recovered two firearms which corroborated Hinds' description of the prior incidents.
Lundin was charged with being a felon in possession of a firearm and ammunition in violation of 18 U.S.C. § 922(g)(1). Lundin moved to suppress the evidence of the firearms as fruit of the poisonous tree because officers illegally searched his home without a warrant. The district court suppressed evidence of the firearms, and the government appealed.
On appeal, the government argued its authority to conduct a warrantless search of the defendant's home was justified as an exigent circumstance. Since the exigency arose out of the crashing noises coming from the backyard which was caused by the officers' knock at Lundin's front door, the government was required to justify its presence on the defendant's porch in the first place. The government argued that under the knock and talk exception, officers lawfully approached the defendant's residence and knocked on his door. The Ninth Circuit panel held that the officers exceeded the scope of knock and talk exception because (1) they failed to act as an ordinary private citizen would as an uninvited guest and (2) they subjectively intended to arrest the defendant at the time they approached his residence.


Significance: Although law enforcement officers may conduct a warrantless search of a home when "the exigencies of the situation make the needs of law enforcement so compelling that [a] warrantless search is objectively reasonable under the Fourth Amendment, exigent circumstances cannot justify a warrantless search when the police "create the exigency by engaging . . . in conduct that violates the Fourth Amendment."
Extended Summary: Deputy Aponte of the Humboldt County Sheriff's Office ("HCSO") interviewed 63 year old Susan Hinds ("Hinds") at a local hospital. She claimed she was the victim to kidnapping several hours earlier. Hinds told Deputy Aponte that the defendant Eric "Whitey" Lundin ("Lundin") knocked on the door of her mobile home and that, when she opened the door, Lundin grabbed her by the neck and forced his way inside.
Hinds told Deputy Aponte that once inside the mobile home, Lundin brandished a compact silver handgun and forced her into his truck where he forced her to ingest methadone pills and pointed out locations where he could safely dispose of her body. Lundin drove Hinds back to her mobile home, told her that he only meant to scare her, and warned her not to call the police.

Deputy Aponte then asked dispatch to issue a "Be On the Look Out" ("BOLO") for Lundin and a request for Lundin's arrest under California Penal Code § 836, which authorizes a warrantless arrest when there is probable cause to believe a suspect has committed a felony. Dispatch issued the BOLO and arrest request just before 2:00 a.m.

Upon receiving the BOLO and arrest request, police officers approached Lundin's front door without identifying themselves. They stood on the porch, knocked loudly, waited thirty seconds for an answer, and then knocked again. After the second knock, the officers heard several loud crashing noises coming from the back of the house. The officers ran to the back of the house and encountered Lundin. He was ordered to put his hands up and was then handcuffed and placed in a patrol car.

The officers then searched Lundin's backyard, patio and house, finding a clear plastic freezer bag containing a silver revolver and a black semiautomatic handgun. Deputy Aponte confirmed that the handguns matched Hinds' description of the guns used during the earlier incident.

Lundin was charged with being a felon in possession of a firearm and ammunition in violation of 18 U.S.C. § 922(g)(1). Lundin moved to suppress the evidence obtained from the patio as fruits of an unreasonable warrantless search. The district court granted the motion and suppressed the evidence of the two handguns seized on the patio. On appeal, the government argued that the warrantless search of Lundin's home was justified either due to an (1) exigent circumstance or (2) protective sweep. In the alternative, the government contended the handguns are admissible under the inevitable discovery exception to the exclusionary rule.

Exigent Circumstances

A warrantless search is presumptively invalid. However, law enforcement officers may conduct a warrantless search of a home in certain exigent circumstances. Because the officers in this case had no reason other than the crashing noises coming from the backyard to believe that there were exigent circumstances justifying a warrantless search of Lundin's home, and that the officers' knock at Lundin's front door caused Lundin to make the crashing noises, the government was required to show that the officers lawfully stood on Lundin's front porch and knocked on his door.
Knock and Talk Exception

The government argued that under the "knock and talk" exception an officer does not violate the Fourth Amendment by encroaching on the curtilage of a home and knocking on the door with the intent to ask the resident questions. The exception is similar to a consensual encounter in that the consent is implied from treating a knock on the door as an invitation.

Ruling that the application of the exception ultimately depends upon whether the officers have an implied license to enter the curtilage, the panel rejected application of the knock and talk exception for two reasons. First, the panel noted that "unexpected visitors are customarily expected to knock on the front door of a home only during normal waking hours. * * * Here, however, the officers knocked on Lundin's door around 4:00 a.m. without evidence that Lundin generally accepted visitors at that hour, and without a reason for knocking that a resident would ordinarily accept as sufficiently weighty to justify the disturbance." Second, "the scope of a license is often limited to a specific purpose, Jardines, 133 S. Ct. at 1416, and the customary license to approach a home and knock is generally limited to the "purpose of asking questions of the occupants." Here, however, the officers' purpose in knocking on Lundin's door was to arrest him. Accordingly, the Ninth Circuit held that officers violated Lundin's Fourth Amendment right to be free from unlawful searches when they stood on his porch and knocked on his front door. Thus, unconstitutional conduct caused the allegedly exigent circumstance - the crashing noises in the backyard - which cannot justify the search resulting in the seizure of the two handguns.

Protective Sweep

The protective sweep doctrine authorizes quick and limited warrantless inspections of spaces where a person may be found when there are articulable facts which, taken together with the rational inferences from those facts, would warrant a reasonably prudent officer in believing that the area to be swept harbored an individual posing a danger to those on the arrest scene.
Officers had no reasonable, articulable suspicion that anyone other than Lundin was present at his residence. Thus, the only plausible threat to the safety of those on the scene was Lundin himself. But by the time the officers conducted the sweep of Lundin's home, he was already handcuffed in the patrol vehicle. Therefore, officers lacked a reasonable ground for believing that there was a danger that would have justified the sweep of Lundin's home.

Inevitable Discovery

Lastly, the court held that the inevitable discovery doctrine does not apply to warrantless searches where probable cause existed and a warrant could have been obtained but was not, because it would encourage officers never to bother to obtain a warrant.

The panel affirmed the Motion to Suppress evidence of the firearms.

To read the full opinion, please visit:
https://cdn.ca9.uscourts.gov/datastore/opinions/2016/03/22/14-10365.pdf
Panel: William A. Fletcher, Marsha S. Berzon, and Carlos T. Bea
Argument Date: September 18, 2015
Date of Issued Opinion: March 22, 2016
Docket Number: 14-10365
Decided: Mar. 22, 2016
Case Alert Author: Mia Lomedico
Counsel:
Barbara J. Valliere (argued), Chief, Appellate Division, and Melinda Haag, United States Attorney, San Francisco, California, for Plaintiff-Appellant.
Geoffrey A. Hansen (argued), Chief Assistant Federal Public Defender, Steven G. Kalar, Federal Public Defender, and Steven J. Koeninger, Research and Writing Attorney, San Francisco, California, for Defendant-Appellee.
Author of Opinion: Judge W. Fletcher
Circuit: Ninth
Case Alert Circuit Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 05/03/2016 03:24 PM     9th Circuit     Comments (0)  

  Radcliffe v. Experian Info. Sols. - Ninth Circuit
Area of Law: Civil Procedure, Class Actions

Headline: Ninth Circuit panel holds that California law, that requires per se disqualification when an attorney has been shown to possess a simultaneous conflict of interest in her representation of multiple clients, does not require automatic disqualification in class action cases.

Issues Presented: Whether California law applies its rule of automatic disqualification of class counsel for conflicts of simultaneous representation in a class action context.

Whether the district court abused its discretion in holding that class counsel remained adequate class representatives under Federal Rule of Civil Procedure 23(g)(1).

Brief Summary: Subsequent to consolidation of class action claims against three major credit bureaus, the parties entered into a settlement agreement, which included an incentive awarded to any "Named Plaintiff[] serving as class representatives . . . in support of the Settlement." After an initial approval of the settlement, some of the plaintiffs objected, arguing that the incentive award produced a conflict of interest between the absent class members and the class representatives. The Ninth Circuit panel agreed, finding that the incentive award "changed the motivation for the class representatives" and created a simultaneous conflict of interests. Accordingly, the panel reversed the settlement approval, and remanded with instructions for the district court to "determine when the conflict arose and if the conflict continues under any future settlement agreement."

On remand, the district court denied the objecting plaintiffs' motion for disqualification of lead counsel because the conflict at issue was short-term, produced by an inoperative settlement, and was governed by case law indicating a "willingness to use the disqualification rule flexibly." On second appeal, the Ninth Circuit panel agreed in light of an absence of California policy justifying application of the automatic disqualification rule to class action cases, Federal policy's reluctance toward disqualification of class action counsel, and the mootness of the conflict of interest that was cured when the Ninth Circuit panel reversed approval of the settlement agreement.

Significance: California law does not require automatic disqualification of counsel as class representative in a class action when the attorney is shown to possess a simultaneous conflict of interest.

Extended Summary: This case involves consolidated class action claims against Experian Information Systems, Inc., TransUnion LLC, and Equifax Information Services LLC for violation of the Fair Credit Reporting Act (FCRA) as well as California state law credit reporting regulations. After the district court consolidated a case known as the White lawsuit with a case known as the Hernandez lawsuit, counsel for the plaintiffs in the Hernandez lawsuit ("Hernandez Counsel") was appointed as lead counsel. Subsequent to consolidation of the actions, the parties entered into a $45 million settlement agreement, which included an incentive awarded to any "Named Plaintiff[] serving as class representatives . . . in support of the Settlement." After an initial approval of the settlement, the plaintiffs in the White Lawsuit ("White Plaintiffs") objected, arguing that the incentive award produced a conflict of interest between the absent class members and the class representatives.

On appeal of the settlement agreement to the Ninth Circuit, the panel agreed with the White Plaintiffs that the incentive award "changed the motivation for the class representatives" and thus "class counsel was simultaneously representing clients with conflicting interests." Accordingly, the panel reversed the settlement approval and remanded with instructions for the district court to "determine when the conflict arose and if the conflict continues under any future settlement agreement."

On remand, counsel for the plaintiffs in the White lawsuit ("White Counsel") moved for a disqualification of Hernandez Counsel and argued that California requires an automatic disqualification of counsel upon a finding of a "simultaneous conflict of interest in its representation of multiple clients." In its opposition, Hernandez Counsel cross-moved for re-appointment as interim class counsel. The district court denied White Counsel's motion for disqualification and granted Hernandez Counsel's cross-motion for re-appointment finding that the conflict at issue was short-term, produced by an inoperative settlement (reversed settlement approval), and was governed by case law indicating a "willingness to use the disqualification rule flexibly. White Counsel appealed.

The first issue addressed on appeal was whether "California law . . . require[s] automatic disqualification in class action cases." Hernandez Counsel argued that California's disqualification rule is inapplicable in the class action context while White Counsel contended that California's disqualification rule was applicable because California's case law description of the automatic disqualification rule is expressed in per se terms and does not expressly exclude class actions.


The Ninth Circuit panel first noted that the policy justifications for California's automatic disqualification rule do not apply to class actions. As explained by the California Supreme Court: "A client who learns that his or her lawyer is also representing a litigation adversary, even with respect to a matter wholly unrelated to the one for which counsel was retained, cannot long be expected to sustain the level of confidence and trust in counsel that is one of the foundations of the professional relationship" and that "[t]he most egregious conflict of interest is representation of clients whose interests are directly adverse in the same litigation." The panel concluded that neither circumstance fits the context "of the lawyer who represents a class of plaintiffs whose interests may in some ways be adverse to each other, but all of whose interests are adverse to the defendant." The panel further concluded that disqualification upon finding some adversity among plaintiffs is not in accord with federal case law that seeks to resolve conflicts of interest by considering the extent of the conflict, whether the conflict has been cured, and the consequence of disqualification of counsel who is most familiar with the lawsuit. The panel further ruled that "the district court could reasonably conclude that the conflict of interest was appropriately cured when we rejected the settlement agreement that contained the improper conditional incentive award."

Next, the panel addressed White Counsel's contention that the district court erred in holding that the Hernandez Counsel remained adequate counsel. According to White Counsel, the conflict of interest created by the placement of the incentive award in the settlement agreement potentially exposed Hernandez Counsel to civil liability for misconduct, which in turn may encourage Hernandez Counsel to seek an expedited settlement to advance its own interest in avoiding liability. The panel sided with the district court's conclusion "that neither precedent nor policy supports the proposition that potential civil liability renders attorneys inadequate to represent a class."

Lastly, the panel addressed White Counsel's argument that the district court abused its discretion by considering White Counsel's unrealistic damage calculations in determining that Hernandez Counsel is "best able" to represent the class. The panel concluded that consideration of White Counsel's unreasonably high damage valuation was not an abuse of discretion because the district court "carefully analyzed each factor under Rule 23(g)(1)" before ruling that Hernandez Counsel "possessed greater experience and knowledge relevant to [the] case."

For the foregoing reasons, the panel affirmed.

To read full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/03/28/14-56101.pdf

Panel: Before: Mary M. Schroeder and Jay S. Bybee, Circuit Judges and Jon S. Tigar,* District Judge.

Argument Date: November 5, 2015

Date of Issued Opinion: March 28, 2016

Docket Number: 14-5601

Decided: Affirmed.

Case Alert Author: Andre Clark

Counsel: George F. Carpinello (argued) and Adam R. Shaw, Boies, Schiller & Flexner LLP, Albany, New York; Daniel Wolf, Law Offices of Daniel Wolf, Washington D.C.; Charles W. Juntikka, Charles Juntikka & Associates LLP, New York, New York, for Plaintiffs-Appellants.

F. Paul Bland, Jr. (argued), Public Justice, P.C., Washington, D.C.; James A. Francis and David A. Searles, Francis & Mailman, Philadelphia, Pennsylvania; Michael W. Sobol, Lieff, Cabraser, Heimann & Bernstein, LLP, San Francisco, California; Michael A. Caddell and Cynthia B. Chapman, Caddell & Chapman, Houston, Texas; Arthur H. Bryant, Public Justice, P.C., Oakland, California; Stuart T. Rossman and Charles M. Delbaum, National Consumer Law Center, Boston, Massachusetts; Leonard A. Bennet and Matthew Erausquin, Consumer Litigation Associates, P.C., Newport News, Virginia; Lee A. Sherman, Callahan, Thompson, Sherman & Caudill, Irvine, California, for Plaintiffs-Appellees Jose Hernandez, Robert Randall, Bertram Robison, and Kathryn Pike.

Daniel John McLoon, Jones Day, Los Angeles, California, for Defendant-Appellee Experian Information Solutions, Inc.

Stephen J. Newman, Stroock, Stroock & Lavan LLP, Los Angeles, California, for Defendant-Appellee Transunion, LLC.

Author of Opinion: Judge Tiger

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 05/03/2016 03:22 PM     9th Circuit     Comments (0)  

  Shirley v. Yates - Ninth Circuit
Headline: The Ninth Circuit panel elaborates on Batson's three-step burden-shifting framework for evaluating claims of discriminatory peremptory strikes and clarifies the requisite burdens that must be met for Step Two and Step Three in a narrow set of Batson cases in which the prosecutor cannot actually remember the reason why he struck the veniremembers..

Areas of Law: Criminal and Constitutional Law

Issues Presented: Whether the California Court of Appeal erred in applying the People v. Box, 23 Cal. 4th 1153, 1188 (2000) standard to Batson Step One.

In cases where the prosecutor cannot actually remember the reasons he struck veniremembers, when will circumstantial evidence consisting of the prosecutor's testimony both to his general jury selection approach and that he is confident one of these race-neutral preferences was the actual reason for the strike be sufficient to overcome a prima facie case of discrimination.

Brief Summary: Following convictions for first-degree burglary of an unoccupied residence and second-degree robbery of a sandwich shop, the Ninth Circuit panel reversed the district court's denial of defendant's habeas corpus petition made pursuant to Batson. The panel held that, because the California Court of Appeal acted contrary to clearly established law when it based its Batson Step One prima facie analysis on an erroneous standard, it was appropriate for the district court to determine de novo whether the defendant had raised an inference of racial bias. The Ninth Circuit panel agreed with the district court that the defendant raised an inference of discrimination sufficient to meet the defendant's burden at Batson Step One. The panel then turned to Steps Two and Three, addressing the narrow set of cases where the prosecutor cannot remember the reason why he struck veniremembers, and held that, if the prosecutor testifies both to his general jury selection approach and is confident that these race-neutral preferences were the actual reason for the strike, then the state met its burden under Batson Step Two. However, the panel also held that "this evidence alone will seldom be enough at Step Three to overcome a prima facie case unless the prosecutor has a regular practice of striking veniremembers who possess an objective characteristic that may be clearly defined. Accordingly, the panel found that the district court clearly erred in denying the defendant's claim because the district court did not determine whether the prosecutor had offered circumstantial evidence sufficient to support the inference that he actually struck R.O. for the reason proffered. In a case where the prosecutor does not recall his actual reason for striking the juror in question, a prosecutor's stated vague approach to jury selection provides little or no probative support for a conclusion at Batson Step Three that the peremptory strike was for the reason he proffered. The panel concluded that the defendant's prima facie case was sufficient to carry his burden of showing by a preponderance of the evidence that the strike of R.O. was motivated in substantial part by race.

Significance: The panel weighed in on the issue, hitherto unaddressed by the Ninth Circuit, whether a list of standard considerations, absent affirmative evidence that they were used in the particular case in question, is competent evidence of a prosecutor's actual reasons for striking certain jurors. The panel elaborates held that Batson's Step Two is met in the narrow set of cases where: (1) the prosecutor does not actually remember why a veniremember was peremptorily struck and (2) the prosecutor testifies both to his general jury selection approach and that he is confident that one of these race-neutral preferences was the actual reason for the peremptory strike. The panel further held that such evidence, while sufficient for Step Two, is ordinarily insufficient for Step Three, unless the prosecutor has a regular practice of striking veniremembers who possess a clearly defined objective characteristic.

Extended Summary: Darryl Shirley (Shirley) was indicted of the first-degree burglary of an unoccupied residence and the second-degree robbery of a sandwich shop; in both instances, nobody was harmed and no weapons were involved.

In California superior court, a sixty-person venire was empanelled and sworn; five of the veniremembers were black, as is Shirley. Of those five veniremembers, only one was seated on the jury. Of the four veniremembers who were dismissed, two were dismissed for cause and two, L.L. and R.O., were peremptorily struck by the state. After R.O. was peremptorily struck, Shirley made a motion pursuant to Batson, on grounds that the peremptory strikes of L.L. and R.O. were racially discriminatory.

Under Batson's three-step burden-shifting framework for evaluating claims of discriminatory peremptory strikes, (1) the defendant first bears the burden to "produc[e] evidence sufficient to permit the trial judge to draw an inference that discrimination has occurred (Johnson v. California, 545 U.S. 162, 170 (2005)); (2) once the defendant makes a prima facie case, "the burden shifts to the State to explain adequately the racial exclusion by offering a permissible race-neutral justification for the strikes"; and (3) "f a race-neutral explanation is tendered, the trial court must then decide . . . whether the opponent of the strike has proved purposeful racial discrimination." The motion was denied on the ground that Shirley had failed to raise a prima facie case.

Following a conviction for both crimes, Shirley was sentenced to two consecutive twenty-five-years-to-life prison terms and four consecutive five-year sentence enhancements based on previous convictions. On appeal, the California court of appeal affirmed the California superior court citing Box, 23 Cal. 4th at 1188, on grounds that, "when the record 'suggests grounds upon which the prosecutor might reasonably have challenged the jurors in question, we affirm.'" The California court of appeal concluded that: (1) L.L.'s prior misdemeanor conviction for fraud and possible familiarity with Shirley and one of Shirley's relatives were two race-neutral reasons for dismissing L.L. and (2) R.O.'s "age and corresponding lack of experience" was a legitimate race-neutral reason for striking her.

Shirley then filed a federal habeas corpus petition in federal district court pursuant to Batson. The district court held that the California court of appeal acted contrary to clearly established Supreme Court precedent by finding, on the basis of speculation about possible race-neutral reasons for exercising peremptory strikes, that Shirley failed to raise an inference of discrimination and thereby failed to raise a prima facie case. On review de novo, the district court found that Shirley satisfied Batson Step One by showing that two out of three eligible black veniremembers were peremptorily struck and that R.O. was similar to a white veniremember who was seated and ordered an evidentiary hearing on the prosecutor's reasons for exercising the challenged peremptory strikes.

At the evidentiary hearing and upon review of the voir dire transcript, the prosecutor testified that he did not recall the specific reasons for the peremptory strikes as to L.L. and R.O. and that, although he took contemporaneous notes during voir dire, those notes were not kept and the prosecution's case file was no longer available. Although the prosecutor could not recall the exact reasons for the peremptory strikes as to L.L. and R.O., the prosecutor testified that he had a general set of criteria that he looked for in a prospective juror and that: (1) L.L. was peremptorily struck due to L.L.'s statement that Shirley looked familiar to her, L.L. had recently met and was considering doing business with an individual who may have been related to Shirley, and L.L. had been convicted of a crime as an adult and (2) R.O. was peremptorily struck because R.O. lacked the requisite "life experience."

After the evidentiary hearing, the district court found that the prosecutor's testimony was insufficient to satisfy the state's burden of production under Step Two because there must be proof of actual reasons and the court cannot infer those reasons from general practices and apply it to a particular case. Nevertheless, the district court judge concluded that: (1) L.L.'s removal from the venire was entirely reasonable because even without the misdemeanor conviction for a dishonesty-related offense, "a prosecutor would be very likely to strike somebody who might have recognized the defendant and might be doing business with a relative of his" and (2) R.O.'s removal from the venire was "very close," but he could "sort of see prosecutors wanting somebody who has got an education." On those grounds, the district court denied relief to Shirley and Shirley appealed.

On appeal, the Ninth Circuit panel agreed with the district court and held that Shirley satisfied Step One on grounds that under Johnson, 545 U.S. at 166-67, a defendant makes out a prima facie case if he produces evidence sufficient to support a "reasonable inference" of discrimination. Thus, not only was the California court of appeal's reliance on Box improper, since Box relied on the discredited pre-Johnson standard, but the fact that the prosecutor peremptorily struck all or most veniremembers of the defendant's race was sufficient to make a prima facie case at Step One. The panel also found support for Shirley's prima facie case in the fact that Juror Number 3 and R.O. were sufficiently similar, excluding race, to support an inference of discrimination at Step One.

As to Batson Step two, the panel ruled that the state must both: "(1) assert that specific, race-neutral reasons were the actual reasons for the challenged strikes, and (2) offer some evidence which, if credible, would support the conclusion that those reasons were the actual reasons for the strikes." However, to satisfy Step Two, the state's race-neutral reason need not be "persuasive, or even plausible," to suffice because whether the evidence in support of the reason is credible is to be determined at Batson Step Three.

After noting that voir dire transcripts may be relevant to the Batson Step Two inquiry in three different ways, the panel held that Shirley's case fell into the category where the prosecutor reviews the voir dire transcript but remains unable to remember the reasons for striking the particular veniremembers at issue. In such a situation, the prosecutor may infer reasons from the transcript and assert them, but any such assertions must be supported by circumstantial evidence, such as the prosecutor's jury selection notes or the prosecutor's usual practices or approach to jury selection, that tends to show that the asserted reasons were in fact the actual reasons for the peremptory strike. In Shirley's case, the prosecutor's testimony was sufficient to meet the state's burden of production at Step Two because the prosecutor credibly testified to a jury selection approach that supported his asserted reasons for the challenged peremptory strikes and nothing more was required at Step Two.

As to Batson Step Three, the panel held that the district court clearly erred in denying Shirley's Batson claim regarding R.O. largely on the basis of a comparative juror analysis of Juror Number 3. According to the panel, the ultimate question in Batson cases is "whether the defendant has proven purposeful discrimination."

In Shirley's case, the district court found that the prosecutor's testimony was not probative of the actual reasons for the peremptory strike of R.O. The district court concluded that, in light of the comparative juror analysis between R.O. and Juror Number 3, the purpose of which is to test for consistency, a challenge to R.O. could have been reasonable. Therefore, no Batson violation had occurred because it was plausible that prosecutors would want someone who had a college education. Thus, the district court did not find that the prosecutor actually peremptorily struck R.O. for R.O.'s lack of a college education.

The panel reversed the district court finding clear error in the court's failure to assess whether the prosecutor's proffered circumstantial evidence supported the conclusion that his asserted race-neutral reason was the actual reason for striking R.O. The panel reasoned that where the prosecutor's testimony established that he may have considered "life experience" in deciding whether to strike R.O. and not that he actually based his decision on that ground, provided scant support for the prosecutor's assertion that the lack of "life experience" was the actual reason for striking R.O. Based on the prosecutor's testimony, the panel found that the prosecutor's "vague, general preference - as opposed to a regular practice of striking veniremembers for a specific reason - constituted at most an inclination towards jurors with highly indefinite attributes or qualities." On these grounds, the panel held that, where the prosecutor does not recall the actual reason for peremptorily striking a challenged juror, a vague approach to jury selection provides little or no probative support for a conclusion at Batson Step Three that the peremptory strike was issued for the proffered reason. Therefore, without sufficient circumstantial evidence to support the peremptory strike, Shirley's evidence was sufficient to carry Shirley's burden of showing that the strike of R.O. was motivated in substantial part by race.

To read the full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/11/20/13-16273.pdf

Panel: Sidney R. Thomas, Chief Judge, and Stephen Reinhardt and Morgan Christen, Circuit Judges.

Argument Date: November 20, 2014

Date of Issued Opinion: November 20, 2015; amended March 21, 2016.

Docket Number: 13-55484

Decided: Reversed the District Court's decision and remanded with instructions to grant the writ of habeas corpus, unless the State of California elects to retry Shirley within a reasonable amount of time.

Case Alert Author: Ryan Arakawa

Counsel:
Jennifer M. Sheetz (argued), Mill Valley, CA, for Petitioner-Appellant.

Barton Bowers (argued), Deputy Attorney General; Kamala D. Harris, Attorney General of California; Dane R. Gillette, Chief Assistant Attorney General; Michael P. Farrell, Senior Assistant Attorney General; Michael A. Canzoneri, Supervising Deputy Attorney General, Sacramento, CA, for Respondents-Appellees.

Author of Opinion: Judge Reinhardt

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 05/03/2016 03:21 PM     9th Circuit     Comments (0)  

  Case Name: Ledezma-Cosino v. Lynch
Headline: Ninth Circuit panel held 8 U.S.C. Section 1101(f)(1) as an unconstitutional violation of the Equal Protection clause of the Fourteenth Amendment because there is no rational basis to classify people afflicted by chronic alcoholism as innately lacking "good moral character."

Area of Law: Constitutional, Equal Protection Clause; 8 U.S.C. Section 1101(f)(1).

Issue Presented: Whether 8 U.S.C. Section 1101(f)(1) violates due process or equal protection on the ground that chronic alcoholism is a medical condition not rationally related to the presence of absence of good moral character.

Brief Summary: The petitioner, with a medical history of alcohol abuse, was detained by U.S. Immigration and Customs Enforcement (ICE), and denied eligibility for cancellation of removal or voluntary departure because he lacked "good moral character" on the grounds that he was a "habitual drunkard" under 8 U.S.C. section 1101(f)(1). In applying the Equal Protection Clause's rational basis test, the Ninth Circuit panel held it is not rational for the U.S. Government to find that people with chronic alcoholism are morally bad people because of this disease. Thus, the panel held that the statute was unconstitutional.

Significance: The Ninth Circuit panel held 8 U.S.C. Section 1101(f)(1) was an unconstitutional violation of the right to equal protection and broadened the scope for which an individual may be eligible for cancellation of removal or voluntary departure on the basis of "good moral character."

Extended Summary: The petitioner, Salomon Ledezma-Cosino (Petitioner), was a Mexican citizen who illegally entered the United States in 1997. Petitioner supported his family, including eight children, by working in the construction industry. According to Petitioner's medical records, he had a ten-year history of alcohol abuse, where he drank an average of one liter of tequila each day. His alcohol abuse led to at least one DUI. U.S. Immigration and Customs Enforcement (ICE) detained Petitioner in 2008 and pursued his removal from the United States. Petitioner conceded to removability but sought cancellation of removal or voluntary department. Congress limited to eligibility for cancellation of removal or voluntary departure to non-citizens of "good moral character;" any person deemed to lack good moral character may not be considered for discretionary relief.

The immigration judge (IJ) denied relief for several reasons, and the Board of Immigration Appeals affirmed solely on the ground that Petitioner was ineligible because he lacked good moral character as a "habitual drunkard."

First, the panel addressed the Government's claim that Petitioner, as a non-citizen, was unable to raise a due process or equal protection claim because he lacked a protectable liberty interest in discretionary relief. The panel agreed that non-citizens cannot challenge denials of discretionary relief under the due process clause. However, the panel noted that an equal protection claim does not require a liberty interest and the Supreme Court has long held that the constitutional promise of equal protection applies to non-citizens as well as citizens. Therefore, the panel held that Petitioner was barred from raising a due process claim, but could raise an equal protection challenge.

Next, under the Equal Protection Clause, the panel held that a classification between non-citizens who are otherwise similarly situated nevertheless violated equal protection unless it was rationally related to a legitimate government interest. Here, the government interest is in excluding persons of bad moral character. The issue therefore became whether the statute's disparate treatment of individuals with alcoholism was "rationally related to a legitimate state interest" in the denial of discretionary relief to individuals who lacked good moral character. In other words, was it rational for the Government to find that people with chronic alcoholism were morally bad people solely because of their disease? The panel held that: (1) alcoholism was a medical condition; (2) that was undeserving of punishment; and (3) should not be held to be morally offensive.

The Government argued that persons suffering from alcoholism are morally blameworthy because they simply lack the motivation to overcome their disease. The panel rejected the Government's argument observing that medical literature did not support such conclusions and that such a conclusion would characterize some veterans of war, a highly disproportionate number of Native Americans and a substantial portion of America's homeless to be people of bad moral character.

Next, the Government argued that individuals suffering from habitual alcoholism have bad moral character because they "are an increased risk of committing acts of violence or self-harm." The panel analyzed the studies presented in the Government's arguments and found that the studies did not show any link to moral culpability.

Lastly, the Government argued that "habitual drunkards have been the target of laws intending to protect society since the infancy of the legislation, and therefore such history proves the rationality of the legislations." The panel held that classifying alcoholics as evil people, rather than as individuals suffering from a disease, was neither rational nor consistent with our fundamental values. Vacated and Remanded.

To read full opinion, please visit:
https://cdn.ca9.uscourts.gov/datastore/opinions/2016/03/24/12-73289.pdf

Panel: Stephen Reinhardt, Richard R. Clifton, Circuit Judges, and Miranda M. Du, District Judge.

Argument Date: July 10, 2015

Date of Issued Opinion: March 24, 2016

Docket Number: 12-73289

Decided: Vacated and Remanded

Case Alert Author: Kristina Coronado

Counsel:

Nora E. Milner (argued) Milner & Markee, LLP, San Diego, California for Petitioner.

Lisa M. Damiano (argued), Stuart F. Delery, Benjamin C. Mizer, and Terri J. Scadron, United States Department of Justice, Office of Immigration Litigation, Washington D.C., for Respondent.

Author of Opinion: Stephen Reinhardt, Circuit Judge

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 05/03/2016 03:17 PM     9th Circuit     Comments (0)  

March 16, 2016
  Steve Klein v. City of Laguna Beach
Area of Law: Civil Rights, Civil Procedure, Remedies

Headline: Ninth Circuit panel rejected the district court's application of the Farrar-exception in determining attorneys' fees under 42 U.S.C. § 1988(b) because (1) the plaintiff sought only nominal damages, (2) the extent of a plaintiff's success is the "most critical factor" in determining fees, and (3) the plaintiff achieved its primary goal of removing certain city regulations on speech.

Issues Presented: Under 42 U.S.C. § 1988(b), should the Farrar-exception apply when the plaintiff, the prevailing party, sought only nominal damages and achieved its primary objective of removing certain provisions in a city ordinance?

Does the Erie Doctrine require the Ninth Circuit to apply a state law permitting the award of attorneys' fees to plaintiffs prevailing in federal court on state law claims when a plaintiff has not prevailed on its state law claim and the remaining matters before the federal court are federal law claims?

Brief Summary: In 2008, Steve Klein ("Klein") brought an action under federal and state constitutions in district court after the city manager of Laguna Beach rejected Klein's application to use amplified speech to conduct religious activities along the public grounds bordering Laguna Beach High School. During the course of the litigation, the City of Laguna Beach ("City") altered its ordinances regulating the use of amplification devices during certain times in public locations. After a Ninth Circuit panel addressed issues in the case for the second time on appeal, Klein was awarded nominal damages on "three of his four as-applied challenges under federal law." When Klein, as the prevailing party, moved for attorneys' fees under 42 U.S.C. § 1988(b), the district court denied the motion, applying the Farrar-exception which prohibits an award of attorney's fees when a plaintiff seeks compensatory damages but nevertheless receives only nominal damages. The district court also denied Klein fees under California Civil Procedure Code section 1021.5, which permits plaintiffs who prevail on California state law claims in federal court to collect attorneys' fees. The district court rejected Kein's argument that, because he pled a California state law claim, he is entitled to fees under the California statute even though he lost on the claim. Klein appealed a third time to challenge the district court's denial of attorneys' fees on Klein's state and federal claims.

With respect to the denial of attorney's fees under 42 U.S.C. § 1988(b), the panel vacated and remanded because (1) a substantial monetary payout was not obtainable absent a compensatory damage request, and Klein's action did not seek to recover private damages; (2) Klein only sought nominal damages of $4,000 under California law; (3) a relief requested under state law does not bear on a determination as to what legal standard applies to motions under federal law; (4) comparing the damages awarded and the amount sought is a significant consideration; and (5) the extent of the success obtained is "'the most critical factor,'" Farrar v. Hobby, 506 U.S. 103, 114 (1992) (quoting Hensley v. Eckerhart, 461 U.S. 424, 436); and (6) Klein obtained the primary relief sought when "the City voluntarily repealed all challenged portions of the sound ordinance as a result of [Klein's] lawsuit." Klein II, 533 F. App'x at 755.

With respect to denial of attorney's fees under California Civil Procedure Code section 1021.5, the panel affirmed the district court's denial of attorneys' fees on the state claim on the grounds that the Erie doctrine does not require a federal court to apply state law when determining a federal law claim and, since Klein was only a prevailing party on his federal claims, and "since we address federal, not state claims, the federal common law of attorney's fees, and not [state] law, is the relevant authority." Citing Modzelewski v. Resolution Trust Corp., 14 F.3d 1375, 1379 (9th Cir. 1994).

Significance: The Ninth Circuit panel construed the Farrar-exception to 42 U.S.C. § 1988(b) narrowly, holding that Farrar only applies to plaintiffs seeking compensatory damages. The panel also held that the Erie doctrine, with respect to a state law regulating fees on state law claims brought in federal court, does not govern a federal court's determination of fees in connection with non-prevailing state law claims.

Extended Summary: On December 3, 2008, Steve Klein ("Klein") brought an action in district court seeking relief under the United States Constitution, the California Constitution, and the California Bane Act ("Bane Act"). Klein's claims arose out of a rejection of his application to use amplified speech to conduct religious activities along the public grounds bordering Laguna Beach High School. The rejection was pursuant to Laguna Beach Municipal Code section 5.40.010, which authorized the city manager to exercise unconditional discretion over the approval or denial of sound amplification permits.

During the course of the litigation, the Laguna Beach City Council repealed Chapter 5.40 of the Municipal Code and amended Code provision, section 7.25.120. Klein then amended his complaint to challenge the amended ordinance, which expressly precluded Klein's request to use sound amplification equipment within 300 feet of Laguna Beach High School and City Hall and in "the busy downtown commercial area of the City" between the hours of 5:00 p.m. and 6:00 p.m."

The case went before the Ninth Circuit three times on appeal. On the first appeal, a Ninth Circuit panel reversed the district court's ruling the ordinance was "a content neutral, reasonable restriction on time, place and manner of speech," holding that the regulation was not "narrowly tailored to the City's interests," that the "fundamental interest in the protection of all people's constitutional rights" favored a finding for Klein; and that the City had in place other regulations "prohibiting excessive and disruptive sounds."

Subsequent to the decision on the first appeal, the parties made cross-motions for summary judgment after the City made another amendment to Code provision, section 7.25.120 by eliminating the proximity limitations and extending the hours during which amplified speech could be performed. On the second appeal, a Ninth Circuit panel upheld the district court's ruling awarding nominal damages on Klein's assertions that the repealed permit requirements constituted impermissible prior restraint and that the speech restriction in the City's downtown area constituted a violation of the First Amendment. Although the Ninth Circuit panel upheld the district court's ruling that the City's proximity limitations on amplified speech near high schools was constitutional, the Court reversed the district court's denial of Klein's summary judgment motion concerning the restrictions on speech near City Hall. As a result, "Klein therefore won nominal damages on three of his four as-applied challenges under federal law."

The district court's denial of Klein's motion for attorney's fees was the basis for the third appeal. The district court concluded that under 42 U.S.C. § 1988(b), nominal damages made Klein a "prevailing party," but under Farrar, Klein's victory was "technical" and therefore he had no entitlement to attorney's fees. See Farrar, 506 U.S. at 115 (1992). Applying the Farrar factors, the district court concluded that Klein's nominal damage award achieved no "public goal," was a "de minimis" success, and Klein's rights under the First Amendment were "not so significant as to overcome the other two factors, which counsel strongly against an award of fees." Because Klein did not prevail on his state law claims, the district court could not grant Klein's motion for fees under California Civil Procedure Code section 1021.5.

On de novo review, at issue before the Ninth Circuit was whether the district court determined Klein's attorney's fees by applying the correct legal standard. Generally, in determining the reasonableness of fees, district courts apply the "lodestar method," which is a procedure by which courts multiply a reasonable hourly rate by "the number of hours the prevailing party reasonably expended on the litigation . . . ." Gonzalez v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013) (quoting Ballen v. City of Redmond, 466 F.3d 736, 746 (9th Cir. 2006)). The result of the lodestar method may be adjusted according to factors identified in Hensley, 461 U.S. at 433 (1983). Because the extent of the success achieved is "the most critical factor" in determining whether fees are reasonable, Farrar, 506 U.S. at 114 (quoting Hensley, 461 U.S. a 436), without applying the lodestar method or the Hensley procedure, a court may award low or no fees when plaintiffs "seek[] compensatory damages but receive[] no more than nominal damages." Id. at 115.

Klein argued that the Farrar-exception does not apply when a plaintiff does not seek compensatory damages and only seeks to obtain nominal damages. The panel agreed because (1) a substantial monetary payout was not obtainable absent a compensatory damage request, and Klein's action did not seek to recover private damages," Farrar, 506 U.S. at 114 (quoting Riverside v. Rivera, 477 U.S. 561, 585 (1986) (Powell, J., concurring in the judgment)); (2) Klein only sought nominal damages of $4,000 under the Bane Act; and (3) a relief requested under state law does not bear on a determination as to what legal standard applies to 42 U.SC § 1988 motions.

The district court concluded that there was "no principled basis to treat differently a plaintiff who does not seek compensatory damages because he cannot prove actual injury from a plaintiff who seeks compensatory damages and fails to prove actual injury . . . ." The Court disagreed, holding that the Farrar exception does not control because:

"Klein's primary goal was to change the City's policy, not to secure compensatory damages. Although Klein did not receive a permanent injunction and declaratory relief, the district court appears to have denied such relief only because the City voluntarily eliminated the policies about which Klein complained. It is more accurate to think of Klein's request for an injunction as being mooted when the City changed the law to accommodate Klein's planned conduct, rather than denied on its merits. Klein achieved the outcome he sought when he filed this lawsuit, and Farrar 'does not control' in these circumstances."

The second issue before the paenl was whether California Civil Procedure Code section 1021.5, which permits plaintiffs who prevail on California claims in federal court to collect attorneys' fees, governed the Court's determination of fees for Klein's non-prevailing state law claims. The Court answered this question in the negative because (1) the Erie Doctrine does not require a federal court to apply state law when determining a federal law claim; (2) the issues before the Court involved federal law claims, not the claims on which Klein did not prevail; and (3) because the court was addressing federal law claims and not state law claims, "the federal common law of attorney's fees, and not [state] law, [was] the relevant authority." Modzelewshi v. Resolution Trust Corp., 14 F.3d 1375 (9th Cir, 1994). In other words, the Erie Doctrine does not govern a federal court's determination of fees in connection with non-prevailing state law claims.

The Court affirmed, with respect to the district court's denial of attorney's fees under California Civil Procedure Code section 1021.5, and vacated and reversed, with respect to the district's court application of the Farrar exception in determining Klein's fees under 42 U.S.C. § 1988(b).

To read full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/01/14/13-56973.pdf

Panel: Ronald M. Gould and Marsha S. Berzon, Circuit Judges, and Jack Zouhary, District Judge.

Argument Date: December 10, 2015

Date of Issued Opinion: January 14, 2016

Docket Number: 13-56973

Decided: AFFIRMED in part, VACATED in part, and REMANDED.

Case Alert Author: Andre Clark

Counsel: Michael J Kumeta, La Mesa, California; William G. Gillespie (argued), Bonsall, California, for Plaintiffs-Appellants. Philip D. Kohn, Michelle D. Molko (argued), Rutan & Tucker, LLP, Costa Mesa, California, for Defendant-Appellee.

Author of Opinion: Ronald M. Gould, Circuit Judge:

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 03/16/2016 06:23 PM     9th Circuit     Comments (0)  

  Sgt. Jeffrey S. Sarver v. Nicolas Chartier
Headline: California's Anti-Strategic Lawsuit Against Public Participation (anti-SLAPP) statute precluded a right-of-publicity claim arising out of the film The Hurt Locker on the grounds that the film involved an issue of public concern and the plaintiff failed to state and substantiate a legally sufficient claim.

Area of Law: California's anti-SLAPP statute, Right of Publicity

Issues Presented:
Did the act or acts of which the plaintiff complained of involve a matter of public concern under California's Anti-SLAPP statute?

Was the plaintiff able to demonstrate his right-of-privacy claim was legally sufficient with a reasonable probability of prevailing on his claim?

Brief Summary: A journalist wrote an article focusing on Sargent Sarver's life and experiences during the Iraq War and within his Army unit. The journalist later wrote the screenplay for the film that became The Hurt Locker. Sargent Sarver alleged he never consented to the use of his name and likeness in the article or film, that the way he was portrayed harmed his reputation, and thus filed various claims - including a right of publicity claim. The defendants filed a motion to strike Sarver's complaint under California's anti-SLAPP statute. The district court granted the motion on the grounds that (1) the defendants' speech was a matter of public concern and thus protected by the First Amendment, and (2) the film's use of Sarver's identity was transformative. Applying the anti-SLAPP statute's two-step approach, the Ninth Circuit panel affirmed, holding that (1) because the Iraq War was a matter of public concern and (2) Sarver could not state and substantiate a legally sufficient right of publicity claim, the lower court did not err in granting the defendants' anti-SLAPP motions.

Significance: In matters of public concern, journalists, screenplay writers, and other artists may transform the stories of real individuals into art - be it articles, movies, or plays - so long as the speech does not appropriate the economic value of a performance or persona, nor seek to capitalize from a celebrity's image in commercial advertisements.

Extended Summary: Plaintiff Sarver was a Sargent in the United States Army during the Iraq War. In December 2004, journalist Mark Boal was embedded in Sarver's unit, which was stationed in Iraq and whose principal duty was to dispose of improvised explosive devices (IEDs). Boal spent a significant amount of time following Sarver, observing him while on and off duty, taking pictures and video of Sarver, and interviewed Sarver once he was back in the States.

In August 2005, Boal wrote an article focusing on Sarver's life and experiences in Iraq and had it published in Playboy. A condensed version was published in Reader's Digest. Boal later wrote the screenplay for the film that became The Hurt Locker. Sarver alleges (1) he never consented to the use of his name or likeness in either of the articles, (2) he attempted to remove portions of the article before its publication in Reader's Digest, (3) the movie's main character mirrored his life story, and (4) that the portrayal of the movie's main character falsely portrayed him in a way that harmed his reputation.

In March 2010, Sarver filed suit in the District Court of New Jersey against Boal, the film's director, its producer(s), and other corporate defendants. The complaint alleged misappropriation of Sarver's likeness and right of publicity, false light invasion of privacy, defamation, breach of contract, intentional infliction of emotional distress, fraud, and negligent misrepresentation. The case was transferred to the Central District of California pursuant to 28 U.S.C. § 1404(a).

On February 1, 2011, the defendants filed a motion to strike Sarver's complaint under California Civil Procedure Code § 425.15, California's Anti-Strategic Lawsuit Against Public Participation (anti-SLAPP) statute. For the defendants' anti-SLAPP motions to succeed, they must first show that "'the act or acts of which the plaintiff complains were taken in furtherance of [the defendants']right of petition or free speech under the United States or California Constitution in connection with a public issue."' Second, if defendants satisfy this initial burden, the burden shifts to the plaintiff to "establish a reasonable probability that the plaintiff will prevail on his or her . . . claim." Id. In other words, the plaintiff "must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.'" Hilton v. Hallmark Cards, 599 F.3d 18 SARVER V. CHARTIER 894, 903 (9th Cir. 2009) (quoting Wilson v. Parker, Covert & Chidester, 50 P.3d 733, 739 (Cal. 2002)). The district court granted defendants' motion concluding that California's anti-SLAPP statute applied because the defendants were engaged in the exercise of free speech in connection with a public issue, and also that "[e]ven assuming that [Sarver] and Will James share similar physical characteristics and idiosyncrasies, a significant amount of original expressive content was inserted in the work through the writing of the screenplay, and the production and direction of the movie."

Sarver timely appealed to the U.S. Court of Appeals for the Ninth Circuit. Before addressing the merits of Sarver's claim, the Ninth Circuit panel had to determine (1) whether the district court properly applied California law instead of New Jersey law, and (2) whether the defendants' anti-SLAPP motion was timely filed.

The Ninth Circuit panel concluded that the district court did not err in applying California law under the Restatement (Second) of Conflict of Laws sections 6 and 145. The panel held that California had the most significant relationship to the current litigation, which would be sufficient to overcome any presumption of Sarver's domicile, whatever Sarver's domicile may have been. The panel also rejected Sarver's contention that defendants' anti-SLAPP motion was not timely filed, holding that the motion was timely filed under Federal Rule of Civil Procedure section 56(b). The panel explained that, when a procedural state law directly collides with a Federal Rule of Civil Procedure, district courts are not obligated to adhere to the procedural state law.

In determining the merits of the defendants' anti-SLAPP motions, the first issue was whether the act or acts, of which the plaintiff complained, involved a matter of public concern and thus qualified as protected speech under the United States Constitution or the California Constitution. Sarver attempted to narrow the issue by arguing that the acts were not of public concern since he was not personally in the public's eye before the film. The panel identified three categories of public issues - including topics that are of widespread, public interest - and held that the Iraq War and the use of IEDs was a matter of significant and sustained public attention. The court held that, because the focus was on Sarver's conduct and experiences during the Iraq War, California's standard for finding an issue of public concern was met.

The panel then considered whether Sarver was able to demonstrate that his right-of-privacy claim was legally sufficient with a reasonable probability of prevailing on his claim. After reviewing past decisions involving right of publicity claims, the panel held that Sarver was unable to state and substantiate a legally sufficient right of publicity claim on the grounds that the challenged speech (1) did not exploit the economic value of any performance or persona Sarver had worked to develop, (2) is not proposing a commercial transaction, and (3) took the raw materials gathered about Sarver's life and Iraq experiences and transformed them into an artistic movie.

The panel further ruled that, even if California's right of publicity law would apply in this case, it would be a content-based restriction and thus unconstitutional without a showing of a compelling state interest in preventing the defendants' speech.

To read full opinion, please visit:
https://cdn.ca9.uscourts.gov/datastore/opinions/2016/02/17/11-56986.pdf

Panel: Diarmuid F. O'Scannlain, Richard A. Paez, and Sandra S. Ikuta, Circuit Judges.

Argument Date: May 9, 2013

Date of Issued Opinion: February 17, 2016

Docket Number: No. 11-56986

Decided: Affirmed.

Case Alert Author: Melissa A. Padilla

Counsel:

Michael R. Dezsi (argued), Law Office of Michael R. Dezsi, PLLC, Detroit, Michigan, for Plaintiff-Appellant.

Jon-Jamison Hill, Kahan & Gorry, Beverly Hills, California; and Jeremiah T. Reynolds, Kinsella Weitzman Iser Kump & Aldisert LLP, Santa Monica, California (argued), for Defendant-Appellee.

Author of Opinion: Hon. Diarmuid F. O'Scannlain

Circuit: Ninth Circuit

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 03/16/2016 06:21 PM     9th Circuit     Comments (0)  

  Sophia Daire v. Mary Lattimore, Warden - Ninth Circuit en banc
Headline: Ninth Circuit en banc overruled its own precedent and established that the standard for determining when a criminal defendant's Sixth Amendment right to counsel is violated by ineffective counsel is governed by Strickland v. Washington (1984) 466 U.S. 668 in non-capital sentencing proceedings.

Area of Law: Criminal Law; Claims for Ineffective Assistance of Counsel in Noncapital Sentencing Proceedings

Issue Presented: Notwithstanding preexisting Ninth Circuit precedent to the contrary, does Strickland v. Washington, 466 U.S. 668, 694 (1984), govern claims for ineffective assistance of counsel in noncapital sentencing proceedings?

Significance: It is clearly established that Strickland v. Washington governs claims for ineffective counsel, even in noncapital sentencing proceedings.

Brief Summary: While serving a 40 year "three strikes" prison sentence after a conviction for first degree burglary, defendant Daire filed a writ of habeas corpus. She claimed her attorney provided ineffective assistance of counsel during sentencing under the standard articulated in Strickland, 466 U.S. at 687.

On federal habeas review, the district court held, according to Ninth Circuit precedent, that the application of the Strickland standard to noncapital sentencing proceedings was not "clearly established Federal law" for purposes of 28 U.S.C. § 2254(d)(1). The statute provides that an application for a writ of habeas corpus on behalf of a person in custody pursuant to the judgment of a state court shall not be granted with respect to any claim that was adjudicated on the merits in state court proceedings unless the adjudication of the claim resulted in a decision that was contrary to, or involved an unreasonable application of, clearly established Federal law, as determined by the Supreme Court of the United States.

The Ninth Circuit panel voted to rehear the case en banc to reconsider circuit precedent. It remanded the case back to the three-judge panel to apply the standard articulated in Strickland and overruled Cooper - Smith v. Palmateer, 397 F.3d 1236, Davis v. Grigas, 443 F.3d 1155 and other similar contrary decisions.

Extended Summary: After defendant was convicted by a California jury of first degree burglary, she claimed that her attorney, during sentencing, provided ineffective assistance of counsel under the standard articulated in Strickland, 466 U.S. at 687.

The Ninth Circuit voted to rehear this case en banc to reconsider Ninth Circuit precedent holding that there was no "clearly established" federal law on the question of whether Strickland v. Washington, 466 U.S. 668, 694 (1984), governs claims for ineffective assistance of counsel in noncapital sentencing proceedings. See Cooper-Smith v. Palmateer, 397 F.3d 1236, 1244 (9th Cir. 2005) and Davis v. Grigas, 443 F.3d 1155, 1158 (9th Cir. 2006).

The panel had held that it was bound by Cooper-Smith v. Palmateer, 397 F.3d 1236, 1244 (9th Cir. 2005), which held that, "[s]ince Strickland, the Supreme Court has not decided what standard should apply to ineffective assistance of counsel claims in the noncapital sentencing context. Consequently, there is no clearly established law in this context. Because the Supreme Court has not clearly established what constitutes ineffective assistance in this context, other courts are free to do so."

Before Cooper, the United States Supreme Court applied Strickland to a noncapital sentencing proceeding in Glover v. United States, (2001) 531 U.S. 198. Furthermore, in Lafler v. Cooper (2012) 132 S.Ct. 1376, 1388, the Supreme Court ruled that Glover established that there exists a right to counsel during sentencing in noncapital cases. Even though sentencing does not concern the defendant's guilt or innocence, ineffective assistance of counsel during a sentencing hearing can result in Strickland prejudice because "any amount of additional jail time has Sixth Amendment significance."

Accordingly, the Ninth Circuit en banc overruled its prior precedent and remanded to the panel that heard the appeal.

To read the full opinion, please visit:
https://cdn.ca9.uscourts.gov/datastore/opinions/2016/02/09/12-55667.pdf

Panel: Sidney R. Thomas, Chief Judge, Stephen Reinhardt, M. Margaret McKeown, Richard C. Tallman, Johnnie B. Rawlinson, Jay S. Bybee, Consuelo M. Callahan, Carlos T. Bea, N. Randy Smith, Mary H. Murguia and Paul J. Watford, Circuit Judges

Argument Date: The en banc court unanimously concluded the case was suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).

Date of Issued Opinion: February 9, 2016

Docket Number: 12-55667

Decided: January 12, 2016

Case Alert Author: Mia Lomedico

Counsel:
Sara J. O'Connell, Covington & Burling LLP, San Diego, California, for Petitioner-Appellant.

Kamala D. Harris, Attorney General of California; Dane R. Gillette, Chief Assistant Attorney General; Lance E. Winters, Senior Assistant Attorney General; Kenneth C. Byrne, Supervising Deputy Attorney General; Xiomara Costello, Deputy Attorney General, Los Angeles, California, for Respondent-Appellee.

Author of Opinion: Per Curiam

Circuit: Ninth
Case Alert Circuit Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 03/16/2016 06:19 PM     9th Circuit     Comments (0)  

  In re Grand Jury Investigation, United States of America v. Doe Corporations and Corporations
Area of Law: Civil Procedure and Evidence, Exception to Attorney-Client Privilege

Headline: A district court must review in camera individual subpoenaed documents before deciding whether they should be produced under the crime-fraud exception to the attorney-client privilege.

Issue Presented: Whether a district court must examine individually subpoenaed documents to determine that the specific attorney-client communications for which production is sought are "sufficiently related to" and were made "in furtherance of the intended, or present, continuing illegality" under the crime-fraud exception to the attorney-client privilege.

Brief Summary: Suspecting that the appellant Corporation's advertisements were "inadequately inform[ing] consumers of potential risks" of a surgical device allegedly in violation of the Food, Drug, and Cosmetic Act ("FDCA"), the Food and Drug Administration ("FDA") opened an investigation and sent warning letters to the Corporation and a few medical centers in California. In response to the FDA's warning letters, attorneys for the Corporation and several medical centers sent letters to the FDA. The government alleged that these responses contained false statements designed to obstruct the FDA investigation. Grand jury subpoenas were issued to the attorneys to produce all communications and retainer agreements in relation to the FDA investigation. All three attorneys failed to fully comply with this order and the government filed a motion to compel. The district court granted the motion, without conducting an in camera review of the individual documents, on the basis that the government had established a prima facie case of crime-fraud.

The Ninth Circuit panel agreed with the district court that "in camera review is not necessary during step one [of the crime-fraud inquiry] to establish a prima facie case that 'the client was engaged in or planning a criminal or fraudulent scheme when it sought the advice of counsel to further the scheme'." However, the panel did not agree with the district court's order to produce all the subpoenaed documents without previously conducting an in camera review of the individual documents themselves to determine that the specific attorney-client communications that were sought is "'sufficiently related to' that were made 'in furtherance of the intended, or present, continuing illegality.'" In re Napster, Inc. Copyright Litig., 479 F.3d 1078, 1090 (9th Cir. 2007).

Significance: This decision establishes a precedent in the Ninth Circuit to require in camera review of subpoenaed documents to determine which individual documents contain communications that are "sufficiently related to" and were made "in furtherance of the intended, or present, continuing illegality," which will allow the party to invoke the crime-fraud exception to the attorney-client privilege.

Extended Summary: The director and health officer for the Los Angeles County Public Health reported the Corporation to the Food and Drug Administration ("FDA") for inadequate marketing information with respect to a surgical devise for medical facilities. The Corporation contacted the FDA - through an attorney - with the intention to dissuade the FDA from further investigating the matter. Nevertheless, the FDA opened an investigation and sent letters to the Corporation informing it that the FDA believed its advertising violated the Food, Drug, and Cosmetic Act (FDCA). Another attorney for the Corporation and a third attorney on behalf of a few medical centers sent letters to the FDA in response to these warning letters. The government alleged that these letters provided "false statements designed to obstruct the FDA investigation."

Under the crime-fraud exception to attorney-client privilege, grand jury subpoenas were issued to the three lawyers to produce all communications and retainer contracts relating to the FDA investigation. The attorneys did not fully comply with the subpoenas. Finding that the Government had established a prima facie case of crime-fraud based on independent, non-privileged evidence, the district court rejected the Corporation's request for in camera review of the individual attorney-client communications and granted the government's motion to compel production of all the subpoenaed documents.

On appeal, the panel recognized that, while "the attorney-client privilege is 'arguably most fundamental of the common law privileges recognized under Federal Rule of Evidence 501,' it is 'not absolute.'" See In re Napster, 479 F.3d at 1090, abrogated in part on other grounds by Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100 (2009).

The panel applied a two-part test to invoke the crime-fraud exception to attorney-client privilege: "First, the party must show that the client was engaged in or planning a criminal or fraudulent scheme when it sought the advice of counsel to further the scheme. Second, it must demonstrate that the attorney-client communications for which production is sought are sufficiently related to and were made in furtherance of [the] intended, or present, continuing illegality." Citing In re Grand Jury Proceedings, 87 F.3d 377, 381-83 (9th Cir. 1996).
\
The panel ruled that the existence of a prima facie case satisfies only the first step of the crime-fraud inquiry. On the second step, the Government will have to also provide information to determine "whether the attorney-client communications for which production is sough are 'sufficiently related to' and were made 'in furtherance of the intended, or present, continuing illegality.'" In re Napster, 479 F.3d at 1090.

As to the first step, the panel agreed with the district court that district courts may find a prima facie case of crime-fraud either by examining privileged material in camera or by examining independent, nonprivileged evidence. As to the second step, the panel, noting an absence of Ninth Circuit published opinions on point, adopted the Sixth Circuit's approach: "While in camera review 'could . . . assist[ ] the court in determining whether a prima facie violation had been made' (step one), in camera review 'is mandated to determine the scope of the order,' i.e. 'to determine whether [the documents] reflect communications or work product made in furtherance of a contemplated or ongoing' crime-fraud (step two)." Citing In re Antitrust Grand Jury, 805 F.2d 155, 168 - 69 (6th Cir. 1986).

Accordingly, the panel concluded that an in camera review was not necessary to establish the prima facie case; however, on remand,"[the] district court must examine the individual documents themselves to determine that the specific attorney-client communications and documents for which production is sought are "'sufficiently related to' and were made 'in furtherance of the intended, or present, continuing illegality,'" by doing so, making the scope of production of documents more specific and possibly narrower. See In re Napster, 479 F.3d at 1090.

To read full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/01/14/15-50450.pdf

Panel: Ronald M. Gould and Marsha S. Berzon, Circuit Judges, and George Caram Steeh III, Senior District Judge.

Argument Date: December 7, 2015

Date of Issued Opinion: January 14, 2016

Docket Number: 15-50450

Decided: Vacated and Remanded

Case Alert Author: David Erghelegiu

Counsel: Robert A. Kashfian, Ryan D. Kashfian (argued), Kashfian & Kashfian LLP, Century City, California, for Respondents Appellant. Robert J. Rice, Los Angeles, California, for Respondent Appellant.

Kristen A. Williams, Evan J. Davis, Assistant United States Attorneys, Major Frauds Section; Consuelo S. Woodhead (argued), Assistant United States Attorney, Criminal Appeals Section, Los Angeles, California, for Plaintiff-Appellee.

Author of Opinion: Judge Ronald M. Gould

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 03/16/2016 06:12 PM     9th Circuit     Comments (0)  

March 1, 2016
  I.R. v. Los Angeles Unified School District - Ninth District
Headline: When a parent does not consent to a component of a special education program, school districts must expeditiously initiate a due process hearing.

Area of Law: Individuals with Disabilities Education Act

Issues Presented: Is a school district's duty to initiate a due process hearing triggered when a parent does not consent to a component of a special education program that is deemed necessary to provide a Free Appropriate Public Education ("FAPE") if the school district continues to work with the parents on an Individualized Education Program ("IEP")?

How long is too long for a school district to determine a component's necessity and initiate a due process hearing?

Significance: This case is binding precedent and applicable to all California educational agencies required to offer and provide a Fair PE. It may be prudent for School Districts to internally review IEP's with contested components and assess whether it must initiate a due process hearing.

Brief Summary: A mother consented to some components of an IEP and objected to other components. Over a course of two years, while the child remained in an inappropriate placement, LAUSD continued to meet with the child's mother in an effort to find a solution both parties could agree to. LAUSD contended that because of its continued efforts, its duty to initiate a due process hearing had not yet been triggered. The Administrative Law Judge (ALJ) that conducted the due process hearing agreed and then the District Court affirmed. The Ninth Circuit panel carefully reviewed the statutory schemes which the lower courts relied and held that the lower courts acted in error by failing to initiate a due process hearing.

Extended Summary: In 2006, at the request of the child's mother, the Los Angeles Unified School District ("LAUSD") found a child to be eligible for a special education because of "autistic-like" behaviors and an initial Individualized Education Program (IEP) meeting was held. However, the mother opted to place the child in private preschool, where the child remained through first grade.

In 2010, the mother sought to enroll the child into a public elementary school within the LAUSD. It was at this time that the Mother consented to some components of the August 2006 IEP, but not to others. In November 2010, LAUSD prepared another IEP recommending the child's placement in a special education environment at the public school. Mother objected in writing and notified LAUSD that she wanted a general education placement for the child with a one-on-one aide. LAUSD implemented only those components the Mother consented to. Between November 2010 and February 2012, several IEP meetings were held and all recommended the child's placement in a special education placement.

On May 29, 2012, Mother filed a request for a due process hearing. The Administrative Law Judge ("ALJ") conducting the hearing concluded that LAUSD did offer an appropriate program for the child and thus offered the child a FAPE. Although LAUSD acknowledged it failed to provide a FAPE and the ALJ acknowledged that California Education Code § 56346(f) required a school district to initiate a due process hearing when a parent did not consent to a component necessary to provide a FAPE, the ALJ did not hold the LAUSED liable. The ALJ concluded that the Mother's refusal to consent to the contested components precluded LAUSD from implementing and providing a FAPE.

Mother appealed to the district court. District Court affirmed the ALJ's decision on the grounds that (1) LAUSD acknowledged that the child had not been provided with a FAPE during the second and third grade, and (2) the Mother acknowledged that LAUSD had offered an appropriate program. In response to the LAUSD's failure to initiate a due process hearing, the district court held that 20 U.S.C. § 1414 precluded LAUSD from (1) initiating a due process hearing, and (2) being held liable for its failure to provide a FAPE.

Mother appealed to the U.S. Court of Appeals for the Ninth Circuit. The Ninth Circuit concluded the district court erred in its interpretation of the applicable statutes. The district court had relied on 20 U.S.C. § 1414(a)(1)(D)(ii)(II), which provides that if a parent refuses to consent to services under clause (i)(II), before a district provides special education and related services to a child, a local educational agency shall not provide the services by utilizing the procedures described in 20 U.S.C. § 1415. Section 1415 grants school districts the power to initiate a due process hearing. After a close examination of the statutory scheme, the Ninth Circuit held that the school district was prevented from initiating a due process hearing only where a parent has refused consent before the initial provision of special education and related services. The court held that the statute did not apply in situations where a parent consented to the program, but only objected to specific components of the IEP.

The next issue before the Ninth Circuit was whether LAUSD's duty to initiate a due process hearing had been triggered. LAUSD argued that because it was holding IEP meetings in an effort to work with the child's parents, the duty had not been triggered. The Ninth Circuit panel held under California Education Code § 56346(f), the duty is immediately triggered at the moment a school district determines a disputed component is necessary to provide a FAPE. Thus, LAUSD's duty to initiate a due process hearing had been triggered.

The last issue the Ninth Circuit addressed was the length of time a school district has to initiate the due process hearing after making its determination. The Court held the due process hearing should be initiated expeditiously, but with some flexibility to give parents an opportunity to weigh the pros and cons of the proposed program. The court explained that it is ultimately up to a fact finder to decide what a reasonable amount of time is.

The Ninth Circuit found because LAUSD failed to initiate a due process hearing, as required under California law, it could be held liable for denying the child a FAPE for an unreasonably prolonged period that resulted in the child's two-year loss of an educational opportunity and deprivation of educational benefits.

To read full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2015/11/17/13-56211.pdf

Panel: Miranda Du, District Judge sitting by designation, Stephen Reinhardt and Richard R. Clifton, Circuit Judges.

Argument Date: July 10, 2015

Date of Issued Opinion: November 17, 2015

Docket Number: No. 13-56211

Decided: Reversed and remanded.

Case Alert Author: Melissa A. Padilla

Counsel: Jennifer Guze Campbell, Vanessa Jarvis (argued), Special Education Law Firm, APC, Lakewood, California, for Plaintiff-Appellant.

David Holmquist, Diane H. Pappas, Patrick J. Balucan (argued), Office of General Counsel, Los Angeles, California, for Defendant-Appellee.

Author of Opinion: Hon. Miranda M. Du

Circuit: Ninth

Case Alert Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 03/01/2016 01:06 PM     9th Circuit     Comments (0)  

  Carlos Alberto Bringas-Rodriguez, aka Patricio Iron - Rodriguez, Petitioner, v. Loretta E. Lynch, Atty Gen - 9th Circuit
Headline: Ninth Circuit affirms denial of Petitioner's application for asylum, withholding of removal and protection under the Covenant Against Torture, despite his recent HIV diagnosis due to years of physical and sexual abuse as a child in Mexico.

Area of Law: Immigration Law

Issue Presented: Whether an alien, who was subjected to child abuse and was recently diagnosed with HIV, can meet the evidentiary standards of proof required for asylum and withholding of removal and protection under the Covenant Against Torture.

Brief Summary: Petitioner, a gay man, was subject to years of physical and sexual abuse at the hands of his family members and a neighbor. In February 2012, he filed an application for asylum, withholding of removal and relief under the Covenant Against Torture. He sought review of the Board of Immigration Appeals' previous denial of his applications as well as his motion to remand in light of a recent HIV diagnosis.
The court found that Petitioner was unable to establish either past persecution, a well-founded fear of future persecution in Mexico based on his homosexuality, or that the government was unwilling or unable to protect him. Since he never reported these issues to authorities, the production of State Department country reports to demonstrate how the government would have responded were insufficient. The reports described only one instance of discrimination against or persecution of homosexuals in the country.

In fact, the reports highlighted gay pride marches in cities across the country, described the expansion of marriage equality in Mexico City, and detailed a Mexican Supreme Court ruling which required states to recognize legally performed marriages performed elsewhere. Petitioner's testimony about his friends who relayed their negative experience with police when they reported physical abuse on the basis of their sexual orientation was too vague and failed to connect the general police practices in the state with those of police where Petitioner resided.

Extended Summary: Petitioner, Bringas-Rodrigues was born and raised in Tres Valles, Veracruz, Mexico. Bringas found himself attracted to men by age six and identified himself as homosexual by age ten. As a child his father physically abused him and told him things like "Act like a boy, you're not a woman!" and "Do things a man does." Bringas was later sexually abused by his uncle. The sexual abuse by his uncle began at age four and continued until he was about twelve years old. At age twelve, he moved to the state of Kansas with his mother and stepfather.

Five months later, Bringas returned to Mexico to live with his grandmother because he was troubled over hiding his sexuality and sexual abuse. However, once he returned to Mexico, the abuse continued. This time, his uncle, cousins, and a neighbor raped him. The incidents were never reported to police because Bringas believed any complaint would be futile. He also neglected to tell his family until years later out of fear his abusers would harm his mother or grandmother.

In 2004 when he was fourteen, Bringas returned to Kansas to live with his mother and stepfather in escape of his abusers. In August 2010, he was convicted of "Contributing to the Delinquency of a Minor" in Colorado. Because of this, he spent 90 days in jail where he attempted suicide. DHS filed a Notice to Appear in September 2010.

Procedural History
In February 2012, Bringas filed an application for asylum, withholding of removal, and relief under the Covenant against Torture. He explained that he feared persecution if he returned to Mexico because of his sexual orientation and that police would overlook his complaints. The Immigration Judge denied all applications for relief.

The asylum claim was denied because Bringas did not file within the one-year deadline. His withholding claim was denied because he did not establish that the past persecution was on account of a protected status and never reported. There was also no evidence that the Mexican authorities were unwilling to offer protection. Further, Bringas did not establish the requisite risk of future persecution because he could not demonstrate a more likely than not possibility of persecution on account of his membership in a particular social group of male homosexuals. Lastly, his CAT claim was denied due to insufficient evidence that the government turns a blind eye to allegations of sexual abuse by children. As a result, Bringas could not prove that torture in the future by the government or acquiescence of the government was likely.

The Board of Immigration Appeals ("BIA") affirmed. It denied his asylum claim on the merits and assumed it was timely filed. The BIA concluded that Bringas failed to establish past persecution because (1) he could not show that he was abused on account of a protected ground, and (2) he had not demonstrated that the government was unwilling or unable to control his abusers. The BIA also found that Bringas did not have a well-founded fear of future persecution because he failed to show a pattern or practice of persecution against gays in Mexico. Additionally, it rejected his withholding of removal and CAT claims because Bringas failed to establish the lower burden of proof required for asylum. It followed that he also failed to satisfy the higher standard of proof required for eligibility of withholding removal.

Lastly, the BIA rejected Bringas' argument that his case should be remanded in light of his recent HIV diagnosis because it placed him in an even more vulnerable position should he be returned to Mexico. Bringas failed to establish that he would be unable to obtain treatment for HIV in Mexico, or that lack of access was a problem experienced by homosexuals in particular. He filed a timely Petition for Review of the BIA's dismissal and sought a stay pending review. The Court of Appeals granted the stay and denied the petition for review.

Discussion
On appeal, Bringas argued that the court erred in denying his asylum and withholding of removal claims. The court used a two part approach to determine whether Bringas was eligible for asylum. In order to be eligible an alien must demonstrate either (1) that he is unable or unwilling to return to his home country because of past persecution or (2) a well-founded fear or future persecution on account of his race, religion, nationality, membership in a particular social group or a political opinion. Castro - Martinez v. Holder, 674 F.3d 1073, 1080. The requirements of a withholding claim are similar but require a higher evidentiary standard of proof. For example, an illegal alien must prove a "clear probability" of persecution on account of a protected characteristic. 8 U.S.C. Section 1231 (b)(3)(A). Thus, if a petitioner is unable to establish his eligibility for asylum, his withholding claim also fails.

Past Persecution
The first issue on appeal was whether Bringas established sufficient evidence that the government was unwilling or unable to prevent the abuse he suffered as a child. In order to establish past persecution, Bringas was required to show (1) that he suffered harm on the basis of a protected ground and (2)(a) that the harm was inflicted either by the government or (2)(b) by individuals or groups the government is unable or unwilling to control. Castro - Martinez, 674 F.3d at 1080. The court only addressed the second prong.

Bringas was required to meet 2(b) and provide evidence that the government was unable or unwilling to control his attackers because the people who abused him were not government actors. Courts consider whether the victim reported the abuse to the police in order to show the government's inability to control the actors, but it is not a requirement. Bringas-Rodriguez v. Lynch (9th Cir. 2015) 805 F.3d 1171, 1178. However, where a victim does not report the abuse to the authorities, there lies a gap in proof about how the government would have responded, and the victim bears the burden to fill in the gaps by showing how the government would have responded had he reported the abuse. Id. at 1081

As 'gap filling' evidence, Bringas offered country reports and testimony about his friends experiences with police in Veracruz. The country reports from 2009 and 2010 from U.S. Department surveyed the state of sexual orientation discrimination across Mexico. He also testified that a couple of his gay friends told him that when they reported to the police that they were raped and beaten, they laughed in their faces and did nothing.
The court held that the evidence was insufficient. As for the country reports, the court found them unpersuasive because they noted only one specific example of government persecution on the basis of sexual orientation in the whole country of Mexico. The reports actually indicated positive sentiments toward the homosexual population. For example, they highlighted gay pride marches in cities across the country, described the expansion of marriage equality in Mexico City, and detailed a ruling from the Mexican Supreme Court requiring Mexico's states to recognize legally performed marriages performed elsewhere. The court pointed out that the ruling was made five years before the United States Supreme Court reached a similar conclusion. Regarding Bringas's testimony, he did not offer enough details or any evidence that the abuse was actually reported. Additionally, there was no evidence connecting general police practices in the state or city of Veracruz with the specific police practices in Bringas's town of Tres Valles.

Future Persecution
Since he was unable to establish past persecution, Bringas was not entitled to a presumption of future persecution. Therefore, he was required to provide evidence of a well-founded fear of future persecution by demonstrating that his fear was subjectively genuine and objectively reasonable. Bringas' credibility was not at issue, which allowed the court to proceed to determine whether his fear was objectively reasonable.
To show that his fear was objectively reasonable, Bringas could establish either (1) he was a member of a disfavored group against which there was a systematic pattern or practice of persecution or (2) he belongs to a disfavored group and has an individualized risk of being singled out for persecution.

Bringas failed to raise the argument that he was singled out as a member of a disfavored group when he failed to raise it to the BIA. Bringas argued that there was a pattern or practice of prosecution of gay men in Mexico. To confute his argument, the court cited Castro v. Martinez where the court rejected the petitioner's similar argument. In Castro, the country reports indicated that the Mexican government made efforts to prevent violence and discrimination against homosexuals in recent years. Further, Mexican law actually prohibited discrimination on the basis of bias on sexuality and required federal agencies to promote tolerance. Bringas produced no evidence that conditions in Mexico have changed since Castro was decided.

Covenant Against Torture
The second issue was whether Bringas met the evidentiary standard of proof required for a CAT claim such that he would "more likely than not" be tortured by or with the acquiescence of the Mexican government if he is removed to Mexico. Garcia-Milian v. Holder, 755 F.3d 1026, 1031.

The court affirmed the BIA's decision and further stated that even if his past experiences of abuse as a child were considered torture, the BIA is not required to presume that he would be tortured again especially now that he is a self-sufficient adult.

Motion to Remand - HIV Diagnosis
Lastly, the court affirmed the BIA's decision not to remand the case back to the Immigration Judge. The BIA rejected Bringas's argument that due to his diagnosis, he was in an even more vulnerable class because he did not provide any additional evidence or arguments demonstrating how this was certain. The lack of access to HIV drugs in Mexico is a widespread problem suffered not only by homosexuals, but also by the population as a whole.

To read the full opinion, please visit:
https://cdn.ca9.uscourts.gov/datastore/opinions/2015/11/19/13-72682.pdf

Panel: William A. Fletcher and Jay S. Bybee, Circuit Judges and Benjamin H. Settle, District Judge for the U.S. District Court for the Western District of Washington

Argument Date: November 18, 2014

Date of Issued Opinion: November 19, 2015

Docket Number: 13 - 72682

Decided: Affirmed Board of Immigration Appeals decision to deny application for asylum, withholding of removal, protection under the Covenant Against Torture and motion to remand

Case Alert Author: Mia Lomedico

Counsel: Andrea Ringer (argued) and Marco Pulido Marques (argued), Certified Law Students, University of California, Irvine School of Law, Appellate Litigation Clinic, Irvine, CA; Mary - Christine Sungaila, Pro Bono Attorney, Snell & Wilmer LLP, Costa Mesa, CA, for Petitioner.

Stuart F. Delery, Assistant Attorney General, Civil Division, Kohsei Ugumori and John W. Blakeley (argued), Senior Litigation Counsel, United States Department of Justice, Office of Immigration Litigation, Washington, D.C., for Respondent.

Peter E. Perkowski, Winston & Strawn LLP, Los Angeles, CA, for Amici Curiae The Public Law Center, Lambda Legal Defense and Education Fund, the National Immigrant Justice Center, the Center for HIV Law and Policy; HIV Law Project; Immigration Equality; Disability Rights Legal Center; and the Asian & Pacific Islander Wellness Center

Author of Opinion: Jay S. Bybee

Case Alert Circuit Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 03/01/2016 12:55 PM     9th Circuit     Comments (0)  

  Transbay Auto Service, Inc. v. Chevron USA Inc. - Ninth Circuit
Headline: Ninth Circuit panel holds when a party acts in accordance with the contents of a document, that party adopts the contents enclosed in the document, even if the party never reviewed the statements contained in the document.

Area of Law: Evidence

Issue Presented: Should a document be admitted as an adoptive statement if, despite not reviewing the document, a party did in fact act in accordance with the contents of the document.

Significance: This case involves a matter of first impression because the court had not yet reviewed a case where a party, who has not reviewed a document, acted in accord with the document's contents. This case presented an opportunity for the Ninth Circuit to adopt the First Circuit's construction of the "possession plus" standard as it applies to documents, a standard the Ninth Circuit first articulated in United States v. Ospina, 739 F .2d 448 (9th Cir. 1984).

Brief Summary: In an action against a franchisor for failing to make a "bona fide offer" pursuant to the Petroleum Marketing Practices Act ("PMPA"), the district court ruled that a third-party appraisal that plaintiff used to successfully secure a loan was inadmissible as an adoptive statement because the record did not establish that the plaintiff or the lender actually read the appraisal. The Ninth Circuit reversed, holding that the "district court applied the wrong standard" by failing to apply the "possession plus" standard and "limiting the scope of Federal Rule of Evidence 801(d)(2)(B) to whether the evidence established that the plaintiff did 'actually hear, understand, and accede to the [statements contained in the appraisal].'" Because the plaintiff knowingly brought the appraisal to the lender, used the appraisal with a desire to induce the lender to fund the purchase, and understood that the lender might rely on the appraisal in determining whether to finance the transaction, the panel held that the appraisal's contents were adopted and admissible pursuant to Rule 801(d)(2)(B).

Extended Summary: In 2001, Chevron and Transbay entered into a service station franchise agreement. In 2008, Chevron informed Transbay of their intent to sell the property. Transbay submitted a bid to purchase the land for $1.8 million. Chevron rejected the bid and subsequently made an alleged "bona fide offer" as required under the Petroleum Marketing Practices Act ("PMPA"), the law governing the cancelation of service station franchise agreements. See 15 U.S.C. § 2802(b)(3)(D)(iii). Under PMPA, a "bona fide offer" is an objectively reasonable offer made at fair market value. Ellis v. Mobil Oil, 969 F .2d 784, 787 (9th Cir. 1992).

In preparation for submitting their "bona fide offer," Chevron obtained an appraisal, which indicated a value of $2.386 million based on the property's "highest and best use" and $1.5 million if continued as a gas station (a going concern valuation). Subsequently, Chevron offered the property for purchase to Transbay for $2.375 million as an unbranded station (the alleged "bona fide offer"). The sole owner of Transbay, Tsachres, agreed to purchase the property under protest for $2.375 million as an unbranded station.

In an effort to locate funding for the transaction, Transbay obtained an appraisal conducted by Property Service Group ("PSG"), which indicated a going concern value of $2.5 million ("PSG Appraisal"). Whether Tsachres actually reviewed the PSG Appraisal, and whether the bank that funded the deal relied on the PSG Appraisal are disputed matters of fact. However, that Tsachres personally delivered the appraisal to the lender from which Transbay obtained financing is undisputed.

In 2009, Transbay brought an action against Chevron in district court, alleging that Chevron failed to make a "bona fide offer" and therefore violated PMPA. At issue was the admissibility of the PSG Appraisal because the going concern valuation of $2.5 million, produced by an entity unaffiliated with Chevron, favored a finding that Chevron's offer was in fact bona fide.

Initially, the district court ruled that the evidence was sufficient as an adoptive admission under the Federal Rule of Evidence 801(d)(2)(B). However, after a mid-trial voir dire of Tsachres outside the presence of the jury, during which Tsachres testified that he never reviewed the PSG Appraisal, the district court reversed its ruling as to the admissibility of the PSG Appraisal, concluding that the state of the record did not establish a basis for an 801(d)(2)(B) adoptive admission. After the trial, the jury awarded Transbay $495,000 in damages. Upon denial of Chevron's post-verdict motion for a new trial, the district court restated its finding that there was "no indication that Mr. Tsachres actually read the contents of the PSG Appraisal." Chevron appealed to the Ninth Circuit.

The Ninth Circuit panel first reviewed the district court's ruling as to the admissibility of the PSG Appraisal. After examining prior decisions, including the opinions of sister circuits and parities drawn from criminal cases, the panel "embrace[d] the First Circuits formulation of [the Ninth Circuit's] 'possession plus' standard as it pertains to documents - we do not look to whether the party has affirmatively reviewed the document, but whether 'the surrounding circumstances tie the possessor and the document together in some meaningful way.'" In other words, if a party acts in accordance with the statements contained in a document, the statements therein may be adopted even if the party has not reviewed the document's contents.

On de novo review, the panel held that the "district court applied the wrong standard" by failing to apply the "possession plus" standard and "limiting the scope of Rule 801(d)(2)(B) to whether the evidence established that Tsachers did 'actually hear, understand, and accede to the [statements in the PSG Appraisal].'" Because Tsachers knowingly brought the PSG Appraisal to the lender, used the PSG Appraisal with a desire to induce the lender to fund the purchase, and understood that the lender might rely on the PSG Appraisal in determining whether to finance the transaction, the panel held that Tsachers acted in accordance with the statements contained in the document. Therefore, the panel held, Tsachers adopted the statement in the PSG Appraisal and the district court erred in holding that the PSG Appraisal was inadmissible pursuant to Rule 801(d)(2)(B). The judgment of the district court was therefore vacated and the case was reversed and remanded for a new trial.

To read full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/11/30/13-15439.pdf

Panel: Alex Kozinski and Richard C. Tallman, Circuit Judges, and Lawrence L. Piersol, Senior Judge.

Argument Date: August 10, 2015

Date of Issued Opinion: November 30, 2015

Docket Number: 14-15297

Decided: Reverse and remand for a new trial

Case Alert Author: Andre Clark

Counsel: David S. Ettinger (argued) and Michell C. Tilner, Horvitz & Levy LLP, Encino, California; Robert C. Phelps, Glynn & Finely, LLP, Walnut Creek, California, for Defendant-Appellant. Samuel T. Rees (argued) and Martin R. Fox, Bleau Fox, Los Angeles, California, for Plaintiff-Appellee.

Author of Opinion: Judge Tallman

Circuit: Ninth

Case Alert Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 03/01/2016 12:46 PM     9th Circuit     Comments (0)  

February 9, 2016
  Center For Auto Safety v. Chrysler Group, LLC. -
Headnote: Ninth Circuit panel held that, in light of the strong presumption for public access to court records, defendant Chrysler Group ("Chrysler") must demonstrate "compelling reasons" to keep sealed documents that were attached to class action plaintiffs' preliminary injunction motion, finding that the preliminary injunction motion, while not technically "dispositive," is nevertheless "more than tangentially related to the merits of a case."

Areas of Law: Civil Procedure; Documents Under Seal

Issue Presented: In ruling on a motion to unseal documents, what is the appropriate test to be applied to determine when documents that were produced under seal during discovery, and subsequently attached to a preliminary injunction motion, can be unsealed and made available to the public?

Significance: Ninth Circuit panel's holding makes it more difficult for corporations sued for selling defective products to conceal those defects from the public by settling those lawsuits before the court reaches a final determination on the merits and then having the court seal the records.

Brief Summary:

Plaintiffs filed a class action against Chrysler for alleged defects in some of its vehicles and filed a motion for a preliminary injunction to require Chrysler to notify its customers of the threat presented by its defective vehicles. Plaintiffs and Chrysler attached "confidential" discovery documents to their memoranda supporting and opposing the motion. These documents were then filed under seal. Shortly before the district court denied plaintiffs' motion for a preliminary injunction, plaintiff-intervenor, the Center for Auto Safety ("CAS"), filed a motion to unseal the documents that were attached to the class action plaintiffs' preliminary injunction motion. The district court denied the motion to unseal, finding that the preliminary injunction motion was "nondispositive" and, therefore, Chrysler only needed to show "good cause" to keep the records sealed. The Ninth Circuit panel vacated the district court's denial, rejecting the dispositive/nondispositive test under which a party seeking to keep documents sealed must demonstrate "compelling reasons" only in those cases where the motion at issue is literally "dispositive" meaning that it brings about a "final determination." The panel found that even technically nondispositive motions may nevertheless be more than tangentially related to the merits of the case and, therefore, a party seeking to keep sealed documents attached to such motions demonstrate compelling reasons therefor . The panel also found that the class action plaintiffs' preliminary injunction motion, while not technically dispositive, was "more than tangentially related to the merits of the case." On remand, Chrysler must demonstrate to the district court compelling reasons for keeping the records under seal.

Extended Summary:

Plaintiffs filed a putative class action alleging defects in certain Chrysler vehicles. During discovery, the parties stipulated to a protective order that permitted each party to designate certain documents as confidential and required any party that later wished to attach a "confidential" document to a court pleading to apply to do so under seal. Plaintiffs later moved for a preliminary injunction to require Chrysler to notify its customers of the alleged risks its vehicles presented. Both parties attached confidential documents to their memoranda supporting and opposing the motion and moved the district court to file the documents under seal. The court granted the motions. Before the district court ruled on the preliminary injunction motion, CAS moved to intervene and unseal the confidential documents attached to support and oppose the preliminary injunction motion. CAS argued the documents could not be kept under seal unless Chrysler met the "compelling reason" standard, while Chrysler contended it need only show "good cause." The district court applied the less exacting "good cause" standard and ultimately found Chrysler met this lower bar.

To support its ruling, the district court relied on past Ninth Circuit cases that stated a party attempting to keep records attached to a "nondispositive motion" under seal need only show good cause. The district court defined a dispositive motion as one that could lead to a final determination on some issue. Applying the dispositive test, the district court held the preliminary injunction to inform Chrysler's customers of the potential dangers would not lead to a final determination on an issue and thus applied the less exacting good cause standard.

On appeal, the Ninth Circuit panel rejected the mechanical dispositive/nondispositive test applied by the district court. The panel ruled that "public access will turn on whether the motion is more than tangentially related to the merits of a case." The panel noted that, while some nondispositive motions are unrelated, or merely tangentially related, to the merits of a case, "plenty [of] other non-dispositive motions - including routine motions in limine - are strongly correlative to the merits of a case." Limiting the compelling reasons test to the narrow category of "dispositive motions" goes against the long held and strong presumption in favor of public access to court records. A party seeking to seal judicial records bears the heavy burden of overcoming the strong presumption of public access by demonstrating compelling reasons. When deciding whether documents should be kept under seal, the court must balance the competing interest of the public and the party seeking to keep certain records secret.

The panel held that plaintiffs' preliminary injunction was more than tangentially related to the merits of the case. Plaintiffs had demanded in their complaint, inter alia, injunctive relief including an order requiring Chrysler to notify and repair the vehicle defect. The preliminary injunction requested Chrysler disclose the pending litigation to their customers. The panel observed: "If plaintiffs had succeeded in their motion for preliminary injunction, they would have won a portion of the injunctive they requested in the underlying complaint, and that portion of their claims would have been resolved." For that reason, the preliminary injunction motion was more than tangentially related to the merits of the case and, therefore, on remand, Chrysler must demonstrate compelling reasons for keeping the documents sealed.

To read full opinion, please visit:

https://cdn.ca9.uscourts.gov/datastore/opinions/2016/01/11/15-55084.pdf

Panel: Sandra S. Ikuta and John B. Owens, Circuit Judges and William K. Sessions, District Judge.

Argument Date: October 20, 2015

Date of Issued Opinion: January 11, 2016

Docket Number: 15-55084

Decided: Vacated and Remanded

Case Alert Author: Brian D. Shapiro

Counsel:
Jennifer D. Bennett (argued) and Leslie A. Bailey, Public Justice PC, Oakland, California, for Intervenor-Appellant.

Thomas H. Dupree, Jr. (argued) and Sarah G. Boyce, Gibson, Dunn & Crutcher LLP, Washington, D.C.; Kathy A. Wisniewski, John W. Rogers, and Stephen A. D'Aunoy, Thompson Coburn LLP, St. Louis, Missouri; Rowena Santos, Thompson Coburn LLP, Los Angeles, California, for Defendant-Appellee.

Author of Opinion: Judge Owens

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 02/09/2016 03:00 PM     9th Circuit     Comments (0)  

February 1, 2016
  W. Scott Harkonen, M.D., v. United States Department of Justice and United States Office of Management and Budget - Ninth
Headline: 9th Cir. affirms district court's 12(b)(6) dismissal of action seeking the correction of allegedly false statements the United States Justice Department made about plaintiff in a press release.

Area of Law: Constitutional Law; Information Quality Act
Issues Presented: Whether the Information Quality Act confers the right to judicial review of the Department of Justice's refusal to correct allegedly false and misleading information published by the agency in a press release.

Brief Summary:
Plaintiff, a doctor, was convicted of mail fraud for issuing a press release which promoted a new drug with allegedly false and misleading statements. On the day of plaintiff's conviction, the Department of Justice ("DOJ") issued its own press release that plaintiff alleged to contain false and misleading information. Plaintiff filed suit in district court claiming he was entitled to a redaction of the allegedly false information and removal of the press release from all official government websites under the Information Quality Act ("IQA"). The IQA required government agencies to create guidelines for ensuring that information disseminated is reliable and procedures for correcting previously disseminated false or misleading information. The district court granted the government's 12(b)(6) motion.

The Ninth Circuit panel affirmed the district court's dismissal because the DOJ had excluded all press releases from its guidelines for complying with the IQA. This exclusion was found a proper exercise of the agency's power to interpret the IQA. First, Congress did not unambiguously intend that press releases must be included in their definition of "dissemination". Second, DOJ guidelines closely mirrored the guidelines established by the Office of Management and Budget ("OMB"), which took careful consideration and used input from several sources when making its decision to exclude press releases.

Significance: This holding limits the scope of the Information Quality Act by allowing government-agencies to completely exclude press releases and related communications, and those agencies therefore have no obligation to correct false information released in such a manner.

Extended Summary:

Plaintiff W. Scott Harkonen is a medical doctor who served as the Chief Executive Officer for InterMune, Inc., which developed, marketed and sold drugs. One of these drugs, Actimmune, was approved by the FDA for the treatment of two rare disorders. InterMune then sought to determine whether Actimmune would be effective treating patients with idiopathic pulmonary fibrosis ("IPF"), a different disorder which is more common. After a Phase III clinical trial with 330 patients, the FDA staff told Harkonen that the data was insufficient to grant approval for the use of Actimmune in the treatment of IPF. The data was insufficient because the study did not meet its primary endpoint, as Actimmune had failed to reduce death or disease progression in the entire group of treated subjects.

Harkonen thereafter distributed a press release titled, "InterMune Announces Phase III Data Demonstrating Survival Benefit of Actimmune in IPF." The first paragraph stated that the study, "demonstrate[d] a significant survival benefit in patients with mild to moderate disease randomly assigned to Actimmune versus control treatment" and concluded, "[t]here was also approximately a 10% relative reduction in the rate of progression-free survival associated with Actimmune versus placebo, the trial's primary endpoint, but this was not a statistically significant difference." The third paragraph of the press release quoted Harkonen as stating, "Actimmune may extend the lives of patients suffering from [IPF]." The fourth paragraph quoted a study investigator as stating, "Actimmune should be used early in the course of [IPF] in order to realize the most favorable long-term survival benefit." In the sixth paragraph the press release finally again addressed the failure of the study to reach its primary endpoint when it described the failure as demonstrating "a strong positive trend in increased survival in the overall patient population." Finally, in the tenth paragraph the release quoted an InterMune officer as stating, "[W]e believe [there] is compelling rationale for consideration of Actimmune for the treatment of patients with [IPF]".

Harkonen was indicted on one count of wire fraud for allegedly false statements contained in the press release, and one count of felony misbranding related to alleged off-label marketing and sale of Actimmune for IPF. He was convicted of wire fraud and acquitted for the misbranding count. His conviction was affirmed upon appeal.

On the day Harkonen was convicted, the DOJ issued a press release titled, "W. Scott Harkonen, Former Biotech CEO, Convicted of Wire Fraud." The DOJ press release stated, "Mr. Harkonen lied to the public about the results of a clinical trial and offered false hope to the people stricken with a deadly disease," and also stated, "[t]he actions of this defendant served to divert precious financial resources from the VA's critical mission of providing healthcare to this nation's military veterans." The press release was posted on the DOJ website.

The IQA required the OMB to draft guidelines "that provide policy and procedural guidance to Federal agencies for ensuring and maximizing the quality, objectivity, utility, and integrity of information . . . disseminated by Federal agencies . . . ." The IQA also required each agency set up its own agency-specific guidelines and to "establish administrative mechanisms allowing affected persons to seek and obtain correction of information maintained and disseminated by the agency that does not comply with the guidelines . . . ." OMB published a set of guidelines which, after receiving input from sources including several Federal Agencies, excluded information distributed through press releases from its definition of "dissemination".

DOJ then issued its own agency-specific guidelines, which closely mirrored the OMB guidelines, and do "not apply to information disseminated in . . . press releases [sic] fact sheets, press conferences or similar communications (in any medium) that announce, support or give public notice of information in DOJ." DOJ expressly stated that their agency-specific guidelines are not regulations and are not legally enforceable.

During the appeal of his conviction for wire fraud, Harkonen filed multiple requests with DOJ requesting a retraction of the statements that he falsified test results and he diverted financial resources, and removal of the press release from official government websites. DOJ denied all of the requests, maintaining that the statements were either true or outside the scope of the guidelines.

Harkonen filed a complaint in the U.S. District Court for the Northern District of California, seeking a declaratory judgment and permanent injunction requiring retraction and removal of the press release from official government websites. The district court granted the government's motion to dismiss under Rule 12(b)(6) and Harkonen appealed.

The panel only decided whether the exclusion of press release from the coverage of the IQA guidelines were within the DOJ's and OMB's authority.

The panel analyzed the authority of the government agencies using the two-step framework established by Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). First, if Congress "has directly spoken to the precise question at issue . . . the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Second, if a statute is ambiguous with respect to a specific issue, the question is whether the agency's answer is based on a permissible construction of the statute. This means the administrative regulation will be upheld "unless it is arbitrary, capricious, or manifestly contrary to the statute." Defenders of Wildlife v. Browner, 191 F.3d 1159, 1162 (9th Cir. 1999).

In deciding whether Congress intended to include press releases in the guidelines, the panel started with the plain meaning of the statute. The IQA does not define the word "disseminated", and there is no relevant discussion in the legislative history. The structure of the IQA shows that Congress was concerned with information shared by government agencies and access to information possessed by government agencies. These concerns do not express an intent for the guidelines to apply to all information released by the government. The D.C. circuit is the only other circuit to hear the issue and it held that the definition of "disseminated" was left to the discretion of the OMB. Prime Time Int'l Co. v. Vilsack, 599 F.3d 678, 685 (D.C.C. 2010). The panel here agreed, found that the statute was not unambiguous as to the definition of "disseminated" and proceeded to the second step of the analysis.

In deciding whether the OMB and DOJ's exclusion of press releases from the coverage of the IQA was arbitrary or capricious, the panel noted that government agencies make extensive use of press releases. OMB balanced concerns that the "nternet enables agencies to communicate information quickly and easily to a wide audience . . . [which] increases the potential harm that can result from the dissemination of information that does not meet basic information quality guidelines" with the costs of information quality, and considered input from various sources, before making the exclusion. Given the deference provided to agencies in the interpretation of ambiguous statutes and the careful consideration taken by OMB, the panel found that excluding press releases from the IQA guidelines was a "permissible interpretation of the statute".

Lastly, the panel acknowledged that the DOJ's determination that the 2009 press release fell within its exclusion is neither erroneous not inconsistent with the department guidelines, and therefore is entitled to judicial deference. Auer v. Robbins, 519 U.S. 452, 461 (1997). The panel affirmed the district court decision to grant the government's 12(b)(6) motion and dismiss the matter.

To read the full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/09/08/13-15197.pdf

Panel: John T. Noonan, William A. Fletcher, and Andre M. Davis (sitting by designation), Circuit Judges.

Argument Date: March 9, 2015

Date of Issued Opinion: September 8, 2015

Docket Number: 13-15197 (D.C. No. 4:12-cv-00629-CW)

Decided: Affirmed district court decision to dismiss on 12(b)(6) grounds.

Case Alert Author: Matthew J. Gustin

Counsel:
For plaintiff-appellant: Mark E. Haddad (argued), Sidley Austin LLP, San Francisco, California; Coleen Klasmeier and Kathleen M. Mueller, Sidley Austin LLP, Washington D.C.

For defendants-appellees: Melissa N. Patterson (argued) and Alisa B. Klein, Appellate Staff Attorneys, Melinda Haag, United States Attorney, and Stuart F. Delery, Assistant Attorney General, United States Department of Justice, Civil Division, Washington D.C.

Author of Opinion: John T. Noonan, Circuit Judge

Circuit: Ninth

Case Alert Circuit Supervisor:
Ryan T. Williams

    Posted By: Ryan Williams @ 02/01/2016 08:36 PM     9th Circuit     Comments (0)  

December 17, 2015
  Ramirez v. County of San Bernardino - Ninth Circuit
Headline: Ninth Circuit panel holds that Plaintiff was not required to seek leave of court before filing his Second Amended Complaint because rule 15 (a) does not impose any particular timing mechanism controlling the order in which amendments must be made.

Areas of Law: Civil Procedure

Issue: Whether Federal Rule of Civil Procedure 15(a) required the Plaintiff, who filed his first Amended Complaint with consent of the opposing party, to seek leave of court before filing his Second Amended Complaint.

Brief Summary: In a federal civil rights suit, Plaintiff-Appellant's claims were dismissed in district court after Plaintiff's First Amended Complaint was dismissed. The district court rejected Plaintiff's Second Amended Complaint because Plaintiff had not sought leave of court. On appeal, the Ninth Circuit held that Rule 15 does not require an order of performance or timing provision. Thus, Plaintiff's First Amended Complaint, executed by means of stipulation of the parties, complied with Rule 15(a)(2) as an "other amendment." Because the timely filed Second Amended Complaint mooted the pending motion to dismiss, the panel reversed the district court's grant of defendants' motion to dismiss the First Amended Complaint and the resulting dismissal of Plaintiff's case.

Significance: There is no requirement that a plaintiff exhaust the matter of course amendment under 15(a)(1) before an amendment is made under 15(a)(2), nor does it state the ability to amend under 15(a)(1) is exhausted or waived once a 15(a)(2) amendment is made. A plaintiff may amend in whatever order he sees fit, provided that he or she complies with the requirements of 15(a)(1) and 15(a)(2), respectively.

Extended Summary: Plaintiff-Appellant, Sergio Ramirez was stopped in his driveway by Defendant-Appellee, a police officer, at which point Plaintiff was allegedly beaten, tased and detained. Plaintiff filed suit in December 2012 against the County of San Bernardino and other individuals, claiming various civil rights violations. On April 29, 2013, after removal of the case to federal court, Plaintiff and Defendant stipulated to dismissal of various Defendants and the parties agreed that Plaintiff could amend his complaint within twenty days. The district court shortened this period to ten days, but signed the order. Plaintiff filed his First Amended Complaint within ten days.

On May 22, 2013, the Defendants filed a motion to dismiss the First Amended Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6). The motion was calendared for hearing. Pursuant to Central District of California Local Rule 7-9, Plaintiff was required to file an opposition, or notice of intention not to oppose, Defendants motion no later than twenty-one days before the hearing date.

Plaintiff failed to submit any response to the motion by the deadline of June 3, 2013. Instead, on June 12, 2013, Plaintiff attempted to file a Second Amended Complaint. This filing was rejected on June 14, 2013 because leave of court had neither been sought nor granted.

By June 19, the Defendants' motion to dismiss was still unopposed. Relying on Local Rule 7-12, the district court deemed Plaintiff's failure to file any documents as his consent to the granting of the motion to dismiss. The district court dismissed the First Amended Complaint, without leave to amend, and dismissed the action entirely.

Plaintiff's chief complaint on appeal was that Federal Rule of Civil Procedure 15(a) was ambiguous and that under the Rule, it was not clear whether he was required to seek leave of court to file his Second Amended Complaint. While the panel agreed with the Plaintiff "the district court impermissibly rejected the Second Amended Complaint," it did not agree that Rule 15(a) is ambiguous.

The panel held "that Rule 15 provides different ways to amend a complaint, and these ways are not mutually exclusive. Rule 15 is organized substantively, not chronologically. It does not prescribe any particular sequence for the exercise of its provisions. That is, it does not mandate that the matter of course amendment under 15(a)(1) be exhausted before an amendment may be made under 15(a)(2), nor does it state that the ability to amend under 15(a)(1) is exhausted or waived once a 15(a)(2) amendment is made." Because Plaintiff's first amendment was accomplished pursuant to a stipulation between the parties, Rule 15(a)(2) was satisfied because it was filed with "the opposing party's written consent." The panel then ruled that amendment under Rule 15(a)(2) did not preclude Plaintiff from amending his complaint under Rule 15(a)(1). Plaintiff could amend in whatever order he saw fit, provided that he complied with the respective requirements found within 15(a)(1) and 15 (a)(2). The panel further ruled that the Plaintiff's Second Amended Complaint superseded the First Amended Complaint, which therefore ceased to exist, and, "ecause the Defendants' motion to dismiss targeted the Plaintiff's First Amended Complaint, which was no longer in effect," the panel concluded "that the motion to dismiss should have been deemed moot before the district court granted it." Reversed and Remanded.

To read full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/11/23/13-56602.pdf

Panel: Elizabeth E. Foote, United States District Judge for the Western District of Louisiana, sitting by designation, Jay S. Bybee and Carlos T. Bea, Circuit Judges

Argument Date: June 5, 2015

Date of Issued Opinion: November 23, 2015

Docket Number: 13-56602

Case Alert Author: Andrew Mckeown

Counsel: Moises A. Aviles (argued), Aviles & Associates, San Bernardino, California, for Plaintiff-Appellant; Dawn M. Flores-Oster (argued), Lewis Brisbois Bisgaard & Smith, Los Angeles, California, for Defendants-Appellees.

Author of Majority Opinion: Judge Foote

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 12/17/2015 07:38 PM     9th Circuit     Comments (0)  

November 29, 2015
  DC Comics v. Towle - Ninth Circuit
Headline: The Ninth Circuit creates a new three-prong test for determining whether a character in a comic book is entitled to copyright protection.

Areas of Law: Copyright and Trademark Law

Issues Presented: Whether an automobile, as it appeared in the comic books, television series, and motion picture is a character entitled to copyright protection where: (1) the automobile has physical and conceptual qualities; (2) is recognizable as the same character whenever it appears due to its consistent identifiable character traits and attributes, but does not have the same physical appearance in every context; and (3) the character is especially distinctive and is not a stock character.

Whether a manufacturer of replica automobiles violated exclusive copyrights when: (1) the material copied was of an authorized derivative work rather than the underlying work; (2) the allegedly infringing replicas look substantially different from any incarnation in the underlying work; and (3) the derivative work was created by third parties rather than the copyright owner.

Whether the doctrine of laches is available in cases of willful trademark infringement.

Brief Summary: Defendant-Appellant in a copyright and trademark infringement matter challenged the district court's entry of summary judgment on grounds that: (1) the Batmobile as it appeared in comic books, television series, and motion pictures was not entitled to copyright protection; (2) Defendant-Appellant's replicas of the Batmobile as it appeared in the 1966 television series and 1989 motion picture did not infringe any copyrights; and (3) Defendant-Appellant was entitled to assert a laches defense. Relying on precedent, including Halicki Films, LLC v. Sanderson Sales & Mktg., 547 F.3d 1213 (9th Cir. 2008), the panel created a new three-prong test to determining whether a character in a comic book, television program, or motion picture is entitled to copyright protection; application of the new test led the panel to conclude that the Batmobile was a character entitled to copyright protection. The panel, guided by its prior decision in Apple Computer, Inc. v. Microsoft Corp., 35 F.3d 1435 (9th Cir. 1994) and the First Circuit's decision in Gamma Audio & Video, Inc. v. Ean-Chea, 11 F.3d 1106 (1st Cir. 1993), then determined that Defendant-Appellant's replicas of the Batmobile as it appeared in the 1966 television series and 1989 motion picture infringed DC's copyrights notwithstanding that Defendant-Appellant's replicas were copies of derivative works because the author of an original underlying work has standing to sue a third party who makes an unauthorized copy of an unauthorized derivative work to the extent that the material copied derived from the underlying work. Finally, the panel, applying Evergreen Safety Council v. RSA Network, Inc., 697 F.3d 1221, 1228 (9th Cir. 2012) and Lindy Pen Co., Inc. v. Bic Pen Corp., 982 F.2d 1400, 1406 (9th Cir. 1993), determined that the doctrine of laches cannot be raised in cases of willful infringement.

Significance: The Ninth Circuit created a new three-prong test for determining whether a character in a comic book, television program, or motion picture is entitled to copyright protection. First, the character must generally have "physical as well as conceptual qualities." Second, the character must be "sufficiently delineated" so as to be recognizable as the same character whenever it appears by displaying consistent identifiable character traits and attributes, but it need not have a consistent appearance. Third, the character must be "especially distinctive" and "contain some unique elements of expression," but cannot be a stock character. The Ninth Circuit also reaffirmed that the author of an original underlying work has standing to sue a third party who makes an unauthorized copy of an unauthorized derivative work to the extent that the material copied derived from the underlying work and that the doctrine of laches cannot be raised in cases of willful infringement.

Extended Summary:

Plaintiff-Appellee, DC Comics (DC) is the publisher and copyright owner of the Batman character and Batman's personal crime-fighting vehicle, the Batmobile. Defendant-Appellant, Mark Towle, an individual, DBA Garage Gotham (Towle) manufactured and sold replicas of the Batmobile as it appeared in the 1966 television series and the 1989 motion picture and kits that allowed customers to modify their own cars to look like the Batmobile as it appeared in the 1966 television series and the 1989 motion picture. Towle also advertised each replica as the "Batmobile" and used the domain name batmobilereplicas.com to market his business.

DC sued Towle for, inter alia, copyright infringement, trademark infringement, and unfair competition arising from Towle's business of manufacturing and selling Batmobile replicas. The parties thereafter filed cross motions for partial summary judgment as to DC's infringement and unfair competition claims and Towle's laches defense.

In a published order, the District Court granted in part and denied in part, DC's motion for summary judgment and denied Towle's cross motion for summary judgment. Specifically, the District Court held that: (1) the Batmobile was a character entitled to copyright protection; (2) DC maintained a copyright in the Batmobile as it appeared in both the 1966 television show and the 1989 motion picture based on DC's ownership of the merchandising rights; (3) DC owned a copyright in the Batmobile as it appeared in the 1966 television show and the 1989 motion picture because each was derived from the Batmobile depicted in DC's comics; (4) Towle infringed upon DC's copyright because his replicas copied the Batmobile as it appeared in the 1966 television show and the 1989 motion picture; (5) Towle acted in bad faith and intentionally copied DC's trademarks to associate his replicas with the Batman franchise; and (6) DC was not entitled to summary judgment on Towle's laches defense as to the copyright infringement claim because there was a genuine issue of material fact as to whether Towle was aware that copying the Batmobile as depicted in the 1966 television show and the 1989 motion picture constituted copyright infringement.

The first issue raised on appeal was whether the Batmobile, as it appeared in the comic books, television series, and motion picture was entitled to copyright protection. Towle argued that the Batmobile was not a character that qualified for copyright protection because in previous incarnations, the Batmobile appeared without its signature "sleek 'bat-like' features," the panel noted that copyright protection extends to "sufficiently distinctive" elements like comic book characters, contained within an original work.

To determine whether an automotive character that appeared in comic books, on television, and in a motion picture was entitled to copyright protection, despite changes in appearance, the panel was guided by its prior decision in Halicki Films, LLC v. Sanderson Sales & Mktg., 547 F.3d 1213 (9th Cir. 2008).
The Halicki court stated that a character may be afforded copyright protection if it has distinctive character traits and attributes, even if the character's physical appearance is not the same in every context and that Eleanor: (1) was more like a comic book character than a literary character because of Eleanor's physical and conceptual qualities and (2) displayed "widely identifiable" traits and was "especially distinctive." Id. at 1225.

Relying on Halicki and other precedents, the panel established a three-prong test for determining whether a character in a comic book, television program, or motion picture is entitled to copyright protection. First, the character must generally have "physical as well as conceptual qualities." Air Pirates, 581 F.2d at 755. Second, the character must be "sufficiently delineated" so as to be recognizable as the same character whenever it appears by displaying consistent identifiable character traits and attributes, but it need not have a consistent appearance. Rice v. Fox Broadcasting Co., 330 F.3d 1170, 1175 (9th Cir. 2003); and Halicki, 547 F.3d at 1224. Third, the character must be "especially distinctive" and "contain some unique elements of expression" (id.), but cannot be a stock character (Rice, 330 F.3d at 1175).

Applying this three-prong test to the present matter, the panel held that: (1) the Batmobile is not a mere literary character because by appearing graphically in comic books and three-dimensionally on television and in motion pictures, the Batmobile has both physical and conceptual qualities; (2) the Batmobile is "sufficiently delineated" to be recognizable as the same character whenever it appears and has consistent character traits and attributes, such as its bat-like appearance with sleek and powerful crime-fighting characteristics and up-to-date weapons and technology; and (3) the Batmobile is "especially distinctive" and is not a mere stock character because it contains unique elements of expression due to its status as Batman's "loyal bat-themed sidekick," unique character traits and physical elements, and unique and highly recognizable name. Thus, the panel concluded that the Batmobile was entitled to copyright protection.

As to Towle's second and third arguments that he did not infringe on DC's underlying work because the Batmobile as it appeared in the 1966 television series and the 1989 motion picture look substantially different from any particular depiction of the Batmobile in the comic books and the Batmobile as it appeared in the 1966 television series and the 1989 motion picture were produced by third parties pursuant to sub-licensing agreements with ABC and BPI, respectively, the panel dismissed both arguments on grounds that: (1) as a copyrightable character, the Batmobile need not have a consistent appearance in every context, so long as it has distinctive character traits and attributes; (2) since Towle produced an entire three-dimensional expression of the entire Batmobile character as it appeared in the 1966 television series and the 1989 motion picture, Towle necessarily copied some aspects of DC's underlying works; (3) DC retained its rights to the underlying Batmobile character; and (4) DC's licensing agreements with ABC and BPI cannot deprive DC of its rights to the underlying Batmobile character.

Having established that: (1) the Batmobile character is entitled to copyright protection and (2) DC owns a copyright to the Batmobile character as it appeared in the 1966 television series and the 1989 motion picture, the panel concluded that Towle's replicas infringed upon DC's copyrights and that the two-prong "substantial similarity" test used to determine whether a plaintiff has established "copying of constituent elements of the work that are original" was unnecessary where Towle admitted to the copying of the entire work. Narell v. Freeman, 872 F.2d 907, 910 (9th Cir. 1989) (holding that a substantial similarity analysis was unnecessary because the copying of the substance of the entire work was admitted). The panel thereby affirmed the District Court because there was no genuine issue of material fact as to whether Towle infringed DC's copyright and DC was entitled to summary judgment as a matter of law.

The final issue on appeal was whether the District Court's ruling that Towle could not assert a laches defense as a matter of law was proper when Towle willfully infringed on DC's trademarks. The panel noted that while the doctrine of laches is a valid defense to trademark infringement claims, it is inapposite in cases of "willful infringement." Evergreen Safety Council v. RSA Network, Inc., 697 F.3d 1221, 1228 (9th Cir. 2012). Furthermore, "willful infringement" occurs when the defendant's actions are "willfully calculated to exploit the advantage of an established mark. Lindy Pen Co., Inc. v. Bic Pen Corp., 982 F.2d 1400, 1406 (9th Cir. 1993), superseded by statute on other grounds, Trademark Amendments Act of 1999, Pub. L. No. 106 - 43, 113 Stat. 218.

Applying Evergreen Safety Council and Lindy Pen Co. to the present matter, the panel found that the undisputed facts establish that Towle availed himself of DC's trademarks to exploit them to his benefit because Towle's advertisements recognized the value of the Batmobile's fame and his website intentionally advertised his products as replica Batmobiles to attract his customer base, which was comprised of Batman fans. The panel thereby held that no reasonable juror could find that Towle's use of DC's trademarks was for any reason other than to exploit them and the District Court was correct in its conclusion that Towle was barred from asserting a laches defense because Towle willfully infringed DC's trademarks.

To read the full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/09/23/13-55484.pdf

Panel: Michael J. Melloy, Senior Circuit Judge for the U.S. Court of Appeals for the Eighth Circuit, sitting by designation, Jay S. Bybee and Sandra S. Ikuta, Circuit Judges.

Argument Date: February 5, 2015

Date of Issued Opinion: September 23, 2015

Docket Number: 13-55484

Decided: Affirmed the District Court's summary judgment in a copyright and infringement action brought by DC Comics against a manufacturer of Batmobile replicas on grounds that: (1) the Batmobile was entitled to copyright protection because it embodies sufficiently distinctive elements of the Batman comic books, television series, and motion pictures; (2) DC Comics owned a copyright interest in the Batmobile as depicted in the 1966 television series and the 1989 motion picture because DC Comics did not waive its rights to the Batmobile when DC Comics licensed rights to produce derivative works; (3) the manufacturer of Batmobile replicas infringed on DC Comics' copyrights; and (4) the manufacturer of Batmobile replicas was not entitled to raise a laches defense because the doctrine of laches is inapposite in cases of willful infringement.

Case Alert Author: Ryan Arakawa

Counsel:
Larry Zerner (argued), law offices of Larry Zerner, Los Angeles, California; Edwin F. McPherson and Tracy B. Rane, McPherson Rane LLP, Los Angeles, California, for Defendant-Appellant.

James D. Weinberger (argued), Roger L. Zissu and Leo Kittay, Fross, Zelnick Lehrman & Zissu, P.C., New York, New York; J Andrew Coombs, J Andrew Coombs, A Professional Corporation, Glendale, California, for Plaintiff-Appellee.

Author of Opinion: Judge Ikuta

Circuit: Ninth Circuit

Case Alert Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 11/29/2015 12:04 AM     9th Circuit     Comments (0)  

November 28, 2015
  Singh v. Lynch, Attorney General - Ninth Circuit
Headline: An Immigration Judge may rely on background documentary evidence as the sole basis to make an adverse credibility determination under the REAL ID Act.

Areas of Law: Immigration; Asylum Law - Convention Against Torture

Issue: Whether the Immigration Judge's adverse credibility determination was supported by substantial evidence when the IJ relied solely on background documentary evidence to determine that the petitioner's argument was implausible.

Brief Summary:
Pavittar Singh sought asylum under the Convention Against Torture (CAT). At an asylum hearing, Singh testified that in 1998, 2005 and 2006 while living in India, he was subjected to intimidation. The Immigration Judge (IJ) reviewed the evidence which consisted of reports submitted by the government and Singh as well as Singh's own testimony and determined that Singh's claims of attack in 2005 and 2006 were not plausible and denied Singh's request for asylum. The Board of Immigration Appeals (BIA) dismissed Singh's appeal in agreement with the IJ that the claims Singh made were not plausible because the reports showed there were no active militants in India after the 1990's. The Ninth Circuit held this was a case of first impression and that it could easily be solved by the language of the REAL ID Act, which explicitly allows the BIA and the IJ to base their credibility determinations on background evidence in the record.

Chief Judge Thomas concurred in part and dissented in part. Thomas found that the IJ and the BIA mischaracterized the background evidence and would have granted the petition for review.

Significance: Background evidence of record can be used as the sole basis for discrediting the claims of an asylum petitioner under the REAL ID Act.

Extended Summary:
Petitioner Pavittar Singh sought asylum under the Convention Against Torture (CAT) after being authorized to enter the United States as a nonimmigrant visitor in January 2007. After getting a job here in the U.S., the Department of Homeland Security sent Singh a notice to appear because he failed to get authorization for his employment from Immigration and Customs Enforcement.

At his asylum hearing, Singh testified before the Immigration Judge (IJ) that while living in India he was subjected to intimidation by terrorists in 1998 and reported his troubles to officials who refused to investigate the matter and instead accused him of harboring Sikh separatists. Additionally, Singh testified that he was harassed and beaten in 2005 while in police custody, then accosted and threated to death by terrorists again in 2006, which he again reported to police who arrested him and again beaten him while in police custody.

The Immigration Judge reviewed the reports and noted the "armed militants" were not active in the India during the years Singh claimed to be injured, and hadn't been since 1990's. Thus, the IJ determined that Singh's claims of attack in 2005 and 2006 were not plausible and denied Singh's request for asylum. The Board of Immigration Appeals (BIA) dismissed Singh's appeal agreeing with the IJ that the claims Singh made were not plausible since the reports stated that there were no active militants after the 1990's.

Singh appealed based on lack of substantial evidence claiming under the REAL ID Act, his specific testimony could not be discredited solely based on background documents. The Ninth Circuit stated that this was a case of first impression but could be easily resolved by the clear language of the Act itself.

The Ninth Circuit held that the IJ and the BIA could consider the totality of the circumstances, and base a credibility determination on the inherent plausibility of Singh's testimony and the consistency of that testimony with other evidence of record, namely the reports of the Department of State on country conditions. Thus, the IJ and the BIA permissibly relied on record evidence to determine the implausibility of Singh's account.

Dissent: Chief Judge Thomas concurred in part and dissented in part. Thomas felt that the IJ and the BIA mischaracterized the background evidence and should have granted the petition for review.

Judge Thomas agreed that the REAL ID Act does allow the IJ to discredit the petitioner's testimony solely based on background evidence, however believes the IJ is required to consider the totality of the circumstance and make individualized determinations that rest on "specific and cogent reasons" as required by 8 U.S.C. § 1158(b)(1)(B)(iii). In Thomas' opinion, even if the presence of armed militants ended in the 1990's, it does not foreclose the plausibility that militants could have harmed Signh in 2005 and 2006 as he claimed.

To read full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...15/09/21/08-74212.pdf

Panel: Sidney R. Thomas, Chief Judge, and Diarmuid F. O'Scannlain and M. Margaret McKeown, Circuit Judges.

Date of Issued Opinion: September 21, 2015

Docket Number: 08-74212

Decided: Affirmed the Immigration Judge's decision to deny the applicants asylum request.

Case Alert Author: Lawrence J. Hudack

Counsel: Monica Ganjoo, Ganjoo Law Offices, San Francisco, CA, filed the brief for petitioner.

Tony West, Assistant Attorney General, U.S. Department of Justice, Civil Division, Washington, DC, filed the brief for the respondent. With him on the brief were Stephen J. Flynn, Assistant Director, and Janette L. Allen, Attorney, U.S. Department of Justice, Office of Immigration Litigation, Washington, DC.

Author of Majority Opinion: Judge O'Scannlain

Author of Dissenting Opinion: Partial Dissent by Chief Judge Thomas

Circuit: Ninth Circuit

Case Alert Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 11/28/2015 11:56 PM     9th Circuit     Comments (0)  

  Miles v. Wesley - Ninth Circuit
Headline: Ninth Circuit decides district court should abstain from interfering with Los Angeles County's administration and management of its judicial system.

Area of Law: Federal Abstention, Class Action

Issue Presented: Whether the district court properly dismissed a class action suit on federal abstention grounds where plaintiffs sought federal review of a County's administration and management of its own court system.

Brief Summary: After years of budget cuts, Los Angeles ("L.A.") County abandoned its "a court in every neighborhood" model because the high operating costs of maintaining its 58 courthouses became unsustainable. The L.A. County court system set up "hub" courts across the county that heard specific legal matters, instead of all courts hearing all cases. Brenda Miles, representing the plaintiff class, challenged the new "hub" court model claiming the consolidation of all unlawful detainer cases (tenant eviction) into seven "hub" courts disproportionately impacted poor, disabled, and minority residents. The federal district dismissed the case on abstention grounds, under O'Shea v. Littleton, holding federal intervention of the County judicial system would violate the longstanding public policy against federal court interference with state court proceedings.

Extended Summary: Los Angeles County instituted its "neighborhood court" model in the late 1990s to provide easy access to courts for all L.A. residents. As of 2000, L.A. County operated 58 different courthouses, making up the largest trial court in the nation. After multiple legislative budget cuts over a number of years, the L.A. County court system initiated significant changes; by 2015, the County had shut down 20 of its 58 courthouses and consolidated all unlawful detainer (tenant eviction) cases into 7 "hub" courts.

Plaintiffs filed this class action in federal court alleging the new L.A. County "hub" court model violated numerous constitutional and statutory rights because it disproportionately impacted poor, disabled, and minority L.A. residents. But the district court dismissed the case on federal abstention grounds under O'Shea v. Littleton, 414 U.S. 488 (1974).

O'Shea v. Littleton is the controlling authority for abstention matters. The Supreme Court in O'Shea determined federal courts should generally abstain from interfering with state court matters where principles of federalism, comity, and institutional competence are implicated. The O'Shea opinion proscribes any ongoing federal audit of state criminal court proceedings; the same policy was later extended to civil suits in Rizzo v. Goode, 423 U.S. 362 (1976). Federal courts should determine whether abstention is proper on a case-by-case basis and be very reluctant to grant relief in sensitive state activities such as administrating the judicial system. Younger v. Harris, 401 U.S. 37 (1971).

The Ninth Circuit panel reviewed plaintiff's requested relief in determining whether it should abstain the matter. Plaintiffs were requesting an injunction preventing the county from shutting down even a single courthouse or adopting the "hub" court model for tenant eviction cases. The panel unanimously held that if the federal court were to stop L.A. County from making its own administrative decisions regarding its court system, it would be engaging in the exact sort of "heavy federal intervention" that O'Shea and Younger sought to prevent.

The O'Shea decision illustrates the longstanding public policy against federal court interference with the administration of state judicial systems. The Ninth Circuit confirmed the O'Shea policy by affirming the District Court's decision to dismiss the case on federal abstention grounds.

To read full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/09/08/13-55620.pdf

Panel: Ferdinand F. Fernandez, Barrington D. Parker, Jr., and Jacqueline H. Nguyen, Circuit Judges.

Date of Argument: March 4, 2015 - Pasadena, California

Date of Issued Opinion: September 8, 2015

Docket Number: No. 13-55620

Decided: Dismissal of the class action for federal abstention grounds under O'Shea v. Littleton is affirmed.

Case Alert Author: Brian D. Shapiro

Counsel: Richard A. Rothschild (argued), Sue L. Himmelrich, and Navneet Grewal, Western Center on Law & Poverty, Los Angeles, California; Maria Palomares, Alexander Prieto, Brian Bilford and David Pallack, Neighborhood Legal Services of Los Angeles County, Pacoima, California; Paula D. Pearlman and Michelle Uzeta, Disability Rights Legal Center, Los Angeles, California; Barbara Schultz, Paul J. Estuar, and Fernando Gaytan, Legal Aid Foundation of Los Angeles, Los Angeles, California, for Plaintiffs-Appellants.

Robert A. Naeve (argued) and Nathaniel P. Garrett, Jones Day, Irvine, California, for Defendants-Appellees the Honorable David S. Wesley and Sherri R. Carter.

Susan K. Smith, Deputy Attorney General, Office of the Attorney General, Los Angeles, California, for Defendants- Appellees State of California and Edmund G. Brown, Jr.

Author of Opinion: Judge Nguyen

Case Alert Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 11/28/2015 11:49 PM     9th Circuit     Comments (0)  

October 23, 2015
  Kaass Law v. Wells Fargo Bank, N.A. - Ninth Circuit
Kaass Law v. Wells Fargo Bank, N.A. - Ninth Circuit

Headline: Law Firms are not sanctionable under 28 U.S.C. § 1927.

Areas of Law: Civil Procedure, 28 U.S.C. § 1927 Sanctions

Issue Presented: Whether 28 U.S.C. § 1927 can apply to a law firm rather then an individual as the statute reads.

Brief Summary:
An attorney with Kaass Law filed a complaint on behalf of a client against 10 different defendants, including Wells Fargo Bank, claiming the banks reported certain adverse information to credit agencies who then reflected the adverse information in Plaintiff's credit report. After the district court dismissed the complaint against Wells Fargo, the bank filed a motion to recover $11,236.50 in attorneys' fees and costs from Kaass Law and the client (the named Plaintiff), pursuant to 28 U.S.C. § 1927. Wells Fargo contended that Kaass Law's "litigation conduct undoubtedly 'multipl[ied] the proceedings in any case unreasonably and vexatiously' thereby constituting bad faith." The district court then awarded sanctions pursuant to 28 U.S.C. § 1927. The Ninth Circuit panel reversed the award, holding that law firms cannot be sanctioned based on the plain language of the statute which only specifies "individuals."

Extended Summary:
Armen Kiramijyan, an attorney with Kaass Law, filed a complaint on behalf of Plaintiff Izabell Manukyan against 10 different defendants, including Wells Fargo Bank, claiming the banks reported certain adverse information to credit agencies who then reflected the adverse information in Plaintiff's credit report. The district court granted Wells Fargo's motion to dismiss.

After the judgment dismissing Wells Fargo from the action, Wells Fargo filed a motion to recover $11,233.50 in attorney's fees and costs from Kaass Law pursuant to 28 U.S.C. § 1927 contending that that Kaass Law's "litigation conduct undoubtedly 'multipl[ied] the proceedings in any case unreasonably and vexatiously' thereby constituting bad faith." Wells Fargo specifically argued that Kaass Law acted in bad faith by: 1) filing a complaint and amended complaint that failed to differentiate Wells Fargo from the other defendants, and failed to provide factual allegations identifying the inaccurate
information; 2) failing to communicate its intent to file a motion for leave to amend, and then filing a motion for leave to amend the day after Wells Fargo filed a motion to dismiss; 3) failing to oppose Wells Fargo's motion to dismiss; 4) and engaging in a pattern and practice of filing similar "canned" and "boilerplate" complaints, in the same manner as Kaass Law's "predecessor," attorney Arshak Bartoumian, had done.

While the district court declined to award fees against the Plaintiff (the client, Izabell Manukyan), it ruled that "Kaass Law acted in bad faith by knowingly raising frivolous arguments against Wells Fargo and other defendants," and granted the motion against Kaass Law. The district court found that "Wells Fargo provides sufficient evidence that Kaass Law acted in bad faith," including "its failure to plead specific allegations or
differentiate between defendants in the Complaint; its failure to oppose defendants' motions to dismiss; and its failure to meet and confer or communicate with opposing counsel." Additionally, the district court found that, in attempting to file a first amended complaint, Kaass Law had "failed to correct the glaring pleading and legal errors identified by defendants, thereby recklessly and knowingly multiplying the
proceedings in this action." In addition, they failed to correct the glaring legal errors identified by the defendants, thereby recklessly and knowingly multiplying the proceedings in this action. The district court awarded Wells Fargo a total of $8,480.00 in attorneys' fees.

On appeal, Kaass Law argued that, because it "is not an attorney, nor is it a person admitted to conduct cases in courts, the district court erred in imposing sanctions against it pursuant to Section 1927." The statutory language of 28 U.S.C. § 1927 authorizes
sanctions against "[a]ny attorney or other person admitted to conduct cases in any court of the United States or any Territory." The panel noted that whether a law firm may be considered an "attorney or other person admitted to conduct cases" is an issue of first impression in the Ninth Circuit. Upon reviewing the opinions of sister circuits, the panel rejected the reasoning of the Second and Eleventh Circuits that have upheld sanctions against law firms under 28 U.S.C. § 1927. Persuaded by the reasoning of the Seventh and Sixth Circuits, and based on the "plain language of the statute," the panel vacated the district court's order imposing sanctions against Kaass Law.

To read full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/08/27/13-56099.pdf

Panel: Andrew J. Kleinfeld, M. Margaret McKeown, and Milan D. Smith, Jr.

Date of Issued Opinion: August 27, 2015

Docket Number: No. 13-56099

Decided: Reversed and Remanded

Case Alert Author: Robert J. Dagmy

Counsel:
Appellant: Vahag Matevosian (argued), Armen Kiramijyan, Kaass Law, Glendale California.

Appellee Kerry W. Franich (argued), Severson & Werson, Irvine, California; Jan T. Chilton.

Author of Opinion: Judge Milan D. Smith, Jr.

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 10/23/2015 05:33 PM     9th Circuit     Comments (0)  

October 22, 2015
  Briggs v. Merck Sharp & Dohme, Corp. - Ninth Circuit
Headline: Ninth Circuit panel reversed district court judge's denial of plaintiffs' remand motion, holding that the actions of plaintiffs in filing separate suits in San Diego Superior Court when a similar, but not identical, set of cases was pending in a coordinated state proceeding in Los Angeles Superior Court did not trigger removal as a mass action under CAFA.

Areas of Law: Civil Procedure, Class Action Fairness Act, Removal

Issues Presented:

Whether the five separately filed cases filed in superior court in one county, when a similar, but not identical, set of cases was pending in a coordinated state proceeding in superior court in a neighboring county, constitutes a "mass action" under CAFA which defendant may remove to federal court. Whether the plaintiffs in these five suits "proposed" to try their claims jointly within the meaning of CAFA's removal provision 28 U.S.C. § 1332(d)(11)(B)(i).

Brief Summary:

Five different groups of plaintiffs filed five separate lawsuits against the same defendant claiming defendant developed a drug that caused them, or deceased individuals that they represented, to contract pancreatic cancer. Defendant sought to remove the five different tort cases to federal court based on the Class Action Fairness Act (CAFA). Pursuant to CAFA, federal courts have jurisdiction of "mass actions" which are defined as "monetary relief claims of 100 or more persons which are 'proposed to be tried jointly' on the ground that plaintiff's claims involve common questions of law or fact." CAFA requires the proposal for a joint trial be made by the plaintiff and not the result of a case consolidation or joinder as a result of a defendant motion.

Defendant had originally sought removal based on complete diversity. In response to the original removal proceedings, plaintiffs represented to the federal district court that the five cases should be remanded back to state court and that they may be joined with an already existing coordinated proceeding in state court lawsuit in a neighboring county where similar claims were being litigated. Defendants then removed the case based on CAFA, alleging the plaintiffs had 'proposed a joint trial' with the preexisting state court case. The trial court agreed but the panel reversed remanding the case back to state court because plaintiff's conduct did not amount to "proposing a joint trial," as required by CAFA. In doing so, the panel rejected defendants' tactic to remove case under CAFA as a mass action finding that the plaintiffs, as masters of their complaints, must be the ones to propose a joint trial, not the defendants.

Extended Summary:

Plaintiffs are individuals who alleged that they, or deceased individuals that they represented, contracted pancreatic cancer after using incretion-based therapies for diabetes that were developed by defendant Merck Sharp & Dohme Corp (Merck). Five distinct groups of plaintiffs filed five different tort suits in California state court against Merck all with similar claims. Each of the five tort actions had fewer than 100 plaintiffs. At the time plaintiffs filed these five cases, a coordinated proceeding covering similar claims was pending in a California state court in a different county. Merck removed four of the five cases based on conventional federal diversity jurisdiction, but the district court granted plaintiffs' motions to remand. Merck then removed all five cases based on CAFA, contending that plaintiffs' statements to the court during the earlier remand proceedings - that they may join the coordinated state proceeding - converted four of the five cases into a mass action, and that the filing of the fifth case in the same state court as the other four had the same consequence. Plaintiffs moved to remand the five cases. The district court denied the motions for remand and subsequent motions for reconsideration.

Congress passed the Class Action Fairness Act (CAFA) in 2005 which extends removal jurisdiction to mass civil actions in which the monetary relief claims of 100 or more persons are proposed to be tried jointly. CAFA explicitly excludes removal jurisdiction from mass actions where claims by different plaintiffs are joined upon motion of a defendant or where claims have been consolidated or coordinated solely for pretrial proceedings. Relevant here is whether the plaintiffs 'proposed a joint trial' when stating to the federal court that they may join the earlier coordinated state proceeding if remanded back to state court.

Plaintiffs challenged the removal claiming CAFA does not apply because none of the five plaintiffs ever "proposed" to "try jointly" the claims of one hundred or more persons. Merck contended CAFA removal was proper because the plaintiffs represented to the federal court that plaintiffs may join the coordinated state proceeding in the Los Angeles Superior Court. In reversing the lower courts decision, the Ninth Circuit court ultimately held that plaintiffs did not propose a joint trial and remanded each of the five cases back to state court.

The Ninth Circuit panel commenced its analysis by interpreting the meaning of a "proposal for joint trial" as stated in the language of CAFA. According to the panel, a "proposal" can either be expressed by the parties or implied by their conduct, but it must be the plaintiff who makes the proposal. The lower court found that plaintiffs did propose a joint trial for two reasons. First, in his opinion, the trial judge believed that four of the five plaintiffs represented to him that they intended their cases to be joined with the coordinated proceeding. And second, all five cases were filed in San Diego Superior Court which is a neighboring court to the Los Angeles Superior Court. The Ninth Circuit panel held these two acts by the five plaintiffs did not constitute a proposal for a joint trial. The plaintiffs merely represented to the federal district court what might happen if they were remanded back to state court; that their cases may be joined to the coordinated state proceeding. This representation of what may have happened was not sufficient to constitute a proposal by plaintiffs to join the coordinated proceeding in the Los Angeles Superior Court. The Ninth Circuit panel also ruled that filing their five cases in San Diego County while the defendant-initiated coordinated proceeding was pending in neighboring Los Angles County constituted an implicit proposal to join their cases with the coordinated proceeding. The mere likelihood alone that the five cases would be joined in the coordinated proceeding "cannot to trigger CAFA's mass action jurisdiction, for some entity - either one of the parties or the state court - would have to take some action to effectuate the joinder." The panel concluded: "[T]here is no indication that Congress' purpose in enacting AFA was to strip plaintiffs of their ordinary role as masters of their complaint and allow defendants to treat separately filed actions as one action regardless of plaintiffs' choice."

To read full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/08/14/13-56415.pdf

Panel: William A. Fletcher, Richard A. Paez, and Marsha S. Berzon, Circuit Judges.

Date Argued: July 10, 2015

Date of Issued Opinion: August 6, 2015

Docket Number: No. 15-55873

Decided: Reversed and remanded back to state court.

Case Alert Author: Brian D. Shapiro

Counsel:
Louis M. Bograd (argued), Center for Constitutional Litigation, P.C., Washington, D.C.; John M. Restaino, Jr., Restaino Siler, LLD, Denver, Colorado; Ryan L. Thompson (argued), Watts Guerra LLP, San Antonio, Texas; John R. Lytle, Napoli Bern Ripka Shkolnik, LLP, Ladera Ranch, California; Hunter J. Shkolnik, Napoli Bern Ripka Shkolnik, LLP, New York, New York, for Plaintiffs-Appellants.
Maurita Elaine Horn, Douglas R. Marvin, and Kristin Ann Shapiro (argued), Williams & Connolly LLP, Washington, D.C., for Defendants-Appellees.
Author of Opinion: Judge W. Fletcher

Circuit: Ninth Circuit

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 10/22/2015 05:48 PM     9th Circuit     Comments (0)  

October 17, 2015
  Yocupicio v. PAE Group, LLC; Arch Resources Group, LLC - Ninth Circuit
Headline: Where a plaintiff files an action containing class claims as well as non-class claims, and the class claims do not meet the CAFA amount-in-controversy requirement while the non-class claims, standing alone, do not meet diversity of citizenship jurisdiction requirements,
the amount involved in the non-class claims cannot be used to satisfy the CAFA jurisdictional amount, and the CAFA diversity provisions cannot be invoked to give the district court jurisdiction over the non-class claims.

Issue Presented: Can non-class claims joined with class action claims be used to satisfy the jurisdictional amount under the Class Action Fairness Act (CAFA), and the CAFA minimal diversity provisions be invoked to give the district court jurisdiction over the non-class claims?

Brief Summary:
Yocupicio filed suit in California superior court against PAE Group, LLC and Arch Resources Group, LLC (Arch) claiming violations of the California Labor Code. The suit contained ten causes of action, the first nine of which were brought under the California Labor Code as class actions on behalf of employees of Arch. The tenth was not brought as a class action but as a representative action under the California Labor Code Private Attorney Act (PAGA). The amount sought pursuant to the class claims was $1,654,874 and the amount sought pursuant to the PAGA claim was $3,247,950. The PAGA claim did not meet the diversity of citizenship jurisdiction requirements and the CAFA claims did not meet the amount in controversy. Arch removed the action to federal district court which denied Arch's motion to remand. Reversing the denial, the panel held that, even if one included attorneys fees to boost the amount of the class action claims to exceed $5 million, it was error for the district court to allow the PAGA representative claim to be aggregated with CAFA claim to meet the $5,000,000 CAFA requirement and to use the (minimal) diversity of the CAFA claim to meet the PAGA requirement for removal.

Significance: Where class action claims and non-class action claims are joined in one suit, the amount involved in non-class claims cannot be used to satisfy the CAFA jurisdictional amount, and the CAFA diversity provisions cannot be invoked to give the district court jurisdiction over the non-class claims.

Extended Summary:
Plaintiff, Porfiria Yocupicio (Yocupicio) filed suit in California superior court against PAE Group, LLC and Arch Resources Group, LLC (Arch) claiming violations of the California Labor Code. The suit contained nine (9) causes of action under the California Labor Code and one cause of action under Private Attorneys General Act of 2004 (PAGA). The aggregate damages of the nine class action amounted to $1,654,874. The PAGA claim totaled $3,247,950 but did not meet the complete diversity jurisdictional requirements. Arch removed the case to federal district court pursuant to the Class Action Fairness Act removal provisions which require an aggregate damage amount in excess of $5 million but requires only minimal diversity.

Yocupicio moved to remand the case on the grounds that the class action claims alone did not meet the $5 million amount in controversy requirement and the PAGA claims, alone, did not meet the complete diversity requirement. The district court denied the motion to remand determining that it had diversity jurisdiction over the action because it was a class action that came within the CAFA provisions. Plaintiff Yocupicio appealed.

Applying the plain meaning of the text of the Class Action Fairness, the panel determined that "Congress was focused on class actions rather than on all representative actions" and that "all class claims are representative in nature but not all representative claims are class claims." The panel noted that CAFA states that a "'class action'" is "any civil action filed under" class action rules "as a class action;" thus, CAFA's aggregation provision applies only to damages of individual members of a class action in determining the amount in controversy, thereby excluding claims that are not part of the class action.

The panel also rejected the argument that the district court could exercise supplemental jurisdiction over the claims, noting that "it would not have had jurisdiction over the class claims because taken together they did not exceed the $5,000,000 threshold; it would not have had jurisdiction over the PAGA claim because of a lack of complete diversity." The panel found no statutory or case law support for Arch's argument that the district court had removal jurisdiction over the class claims by using the amounts sought in the PAGA claim and jurisdiction over the PAGA claim because the court would have jurisdiction over the class claims.

The panel also held that the representative claim did not meet the requirements of diversity and thus the district court lacked removal jurisdiction over that claim as well.

The panel concluded that it was error for the district court to allow the PAGA representative claim to be aggregated with CAFA claim to meet the $5 million amount in controversy requirement or to use the minimal diversity of the CAFA claim to meet the PAGA requirement for removal.

The panel reversed the decision of the district court and remanded the case with instruction to remand to state court.

To read full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...5/07/30/15-55878.pdf)

Panel: Ferdinand F. Fernandez and Richard R. Clifton, Circuit Judges and Kimberly J. Mueller, District Judge

Argument Date: July 6, 2015

Date of Issued Opinion: July 30, 2015

Docket Number: 15-55878

Decided: Reversed the district court's denial of a motion to remand the action to state court.

Case Alert Author: Lawrence J. Hudack

Counsel:
Thomas Stephen Campbell and Justin F. Marquez (argued), Rastegar Law Group, APC, Torrance, California, for Plaintiff-Appellant.

Michael E. Chase (argued) and Bruce Michael Timm, Boutin Jones Inc., Sacramento, California, for Defendants-Appellees.

Author of Majority Opinion: Ferdinand F. Fernandez, Circuit Judge

Circuit: Ninth Circuit

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 10/17/2015 07:31 PM     9th Circuit     Comments (0)  

  United States v. Leung - Ninth Circuit
Headline: In a proceeding to set aside a verdict, Fed. R. Evid. 606(b) bars juror testimony that other jurors engaged in premature deliberations or made up their minds about the case before deliberations began when such testimony is offered to demonstrate that the jury engaged in flawed processing of the evidence.

Areas of Law: Criminal Procedure; FRE 606(b).

Issues Presented: Whether, in a proceeding to set aside a verdict, Fed. R. Evid. 606(b) permits juror testimony that other jurors engaged in premature deliberations or made up their minds about the case before deliberations began when: (1) the testimony is offered to demonstrate that the jury engaged in flawed processing of the evidence; (2) the juror who overheard the conversations failed to bring the issue to the trial judge during the trial; (3) the trial court had no notice of the conversations prior to verdict being rendered; and (4) nothing in the juror's affidavit contained any evidence of juror deceit or bias.

Brief Summary: Defendant-Appellant in a criminal proceeding challenged the district court's denial of its motion for a new trial on grounds that Fed. R. Evid. 606(b) did not bar admission of the affidavit of a single juror, which alleged that several jurors violated the court's instructions not to discuss the case before final deliberations by regularly talking about the evidence during breaks in the trial. The panel, relying on Tanner v. United States, 483 U.S. 107 (1987) and Warger v. Shauers, 135 S.Ct. 521 (2014), noted that several key principles emerged from the Supreme Court's interpretation of Fed. R. Evid. 606(b); specifically, Fed. R. Evid. 606(b): (1) applies in any proceeding that involves an inquiry into "the validity of the verdict;" (2) bars juror testimony about the jury's "internal processes," regardless whether the claimed irregularity took place inside or outside of the jury room; and (3) imposes a nearly categorical bar on juror testimony about statements or events "during the jury's deliberations." The panel then found that Leung's affidavit was analogous to the testimony presented in Tanner insofar that it attempted to parse how jurors considered evidence, which was exactly what Fed. R. Evid. 606(b) sought to prevent. As a policy matter, the panel also declined to open the door to a motion for a new trial at every instance of minor juror misconduct. The panel ultimately held that during a proceeding to set aside a verdict, juror testimony that other jurors engaged in premature deliberations or made up their minds about the case prior to beginning deliberations is inadmissible if offered to demonstrate that the jury engaged in flawed processing of the evidence because such testimony improperly implicates the internal affairs of the jury during an inquiry into the "validity of the verdict." Warger, 133 S.Ct. at 528.

Significance: Fed. R. Crim. P. 33(b)(2)'s fourteen-day period to file a motion for a new trial on grounds other than newly discovered evidence is "nonjurisdictional" and may be extended under Fed. R. Crim. P. 45(b)(2). In a proceeding to set aside a verdict, Fed. R. Evid. 606(b) bars admission of juror testimony that other jurors engaged in premature deliberations or made up their minds about the case before deliberations where such testimony is offered to demonstrate that the jury engaged in flawed processing of the evidence because such testimony improperly implicates the internal affairs of the jury during an inquiry into the propriety of the verdict.

Extended Summary:
Shiu Lung Leung (Leung), an executive at the Taiwanese company, AU Optronics Corporation, was charged in 2010 with violating the Sherman Antitrust Act, 15 U.S.C. § 1, for his role in fixing the prices of Thin Film Transistor, Liquid Crystal Display panels. Following a conviction after a second trial, Leung filed a motion for a new trial and a request for an evidentiary hearing.

Leung's motion was based solely on the affidavit of a single juror; the affidavit alleged that several jurors violated the court's instructions not to discuss the case before final deliberations by regularly talking about the evidence during breaks in the trial. The affidavit further alleged that prior to the beginning of jury deliberations, at least three other jurors "had already made up their minds that the defendant was guilty."

The district court found that the juror's affidavit was inadmissible under Fed. R. Evid. 606(b) and denied Leung's motion for a new trial without an evidentiary hearing. Leung was thereafter sentenced to twenty-four months' imprisonment.

On appeal, Leung argued that the juror's affidavit was admissible under Fed. R. Evid. 606(b) because juror testimony about the discussion of evidence before charging does not intrude on the internal affairs of the jury, but instead demonstrated juror dishonesty and bias during voir dire. The government opposed on grounds that: (1) Leung's motion for a new trial should have been rejected as untimely under Fed. R. Crim. P. 33(b)(2) and (2) even if Leung's motion for a new trial was timely, that the juror's affidavit was nevertheless inadmissible.

In regard to the government's argument that Leung's motion for a new trial was untimely under Fed. R. Crim. P. 33(b)(2), the panel found that the government's position did not mesh with the Supreme Court's clarification in Eberhard v. United States, 546 U.S. 12, 19 (2005), which stated that Fed. R. Crim. P. 33(b)(2) is "nonjurisdictional." As a result, Fed. R. Crim. P. 33(b)(2)'s fourteen-day deadline was subject to extension under Fed. R. Crim. P. 45(b) (2) and the district court was permitted to grant an extension to file a motion for a new trial.

The panel then turned to the issue of whether the juror's affidavit entitled Leung to a new trial or an evidentiary hearing under Fed. R. Evid. 606(b), which states:

(1) Prohibited Testimony or Other Evidence. During an inquiry into the validity of a verdict or indictment, a juror may not testify about any statement made or incident that occurred during the jury's deliberations; the effect of anything on that juror's or another juror's vote; or any juror's mental processes concerning the verdict or indictment. The court may not receive a juror's affidavit or evidence of a juror's statement on these matters.
(2) Exceptions. A juror may testify about whether:
(A) extraneous prejudicial information was improperly brought to the jury's attention;
(B) an outside influence was improperly brought to bear on any juror; or
(C) a mistake was made in entering the verdict on the verdict form.

In reaching its decision, the panel was guided by two Supreme Court cases: (1) Tanner v. United States, 483 U.S. 107 (1987) and (2) Warger v. Shauers, 135 S.Ct. 521 (2014).

In Tanner, the appellants were convicted of conspiring to defraud the United States in violation of 18 U.S.C. § 371, and of committing mail fraud in violation of 18 U.S.C. § 1341. 483 U.S. at 109. The Eleventh Circuit affirmed the convictions and appellants appealed to the Supreme Court on grounds that, inter alia, the district court erred in refusing to admit juror testimony at a post-verdict hearing on juror intoxication during the trial. Specifically, the Tanner court addressed the admissibility of a juror affidavit, which asserted that various jurors drank alcohol, smoked marijuana, ingested cocaine, sold controlled substances, and took periodic naps throughout a complex criminal trial. The Supreme Court ultimately held that the district court's refusal to admit, at a post-verdict hearing, juror testimony as to alleged juror drug and alcohol intoxication during trial was proper because the most reasonable reading of Fed. R. Evid. 606(b) did not include juror intoxication as an outside influence about which jurors may testify to impeach their verdict.

The Tanner court first looked to the "near-universal and firmly established common-law rule in the United States [that] flatly [prohibits] the admission of juror testimony to impeach a jury verdict." Id. at 117. The Tanner court then noted that, while an exception to Fed. R. Evid. 606(b) permits inquiry into whether "extraneous influences" tainted the verdict, juror testimony regarding the jury's "internal processes" is categorically barred. Id. at 120-21. Thus the critical inquiry was the "nature of the allegation" as opposed to where the alleged irregularity took place.

In Warger, the Supreme Court considered a juror's allegations that, during deliberations, another juror admitted to harboring bias against one of the parties. Warger was a personal injury matter where the appellant, Gregory Warger (Warger), was involved in a motorcycle accident on a highway with Randy Shauers (Shauers) that ultimately resulted in Warger sustaining serious injuries that resulted in the amputation of his left leg.

After a jury trial that resulted in a judgment in Shauers' favor, a juror contacted Warger's counsel over concerns that the jury foreperson admitted to harboring bias against Warger. Warger then sought a new trial pursuant to Fed. R. Evid. 606(b) on the grounds that the jury foreperson deliberately lied during voir dire regarding her ability to be impartial. The district court denied Warger's motion and the Eighth Circuit affirmed on grounds that Fed R. Evid. 606(b) applied and Warger's proffered evidence did not fall within the "extraneous prejudicial evidence" exception set forth in Fed. R. Evid. 606(b)(2)(A).

The Supreme Court affirmed the district court and the Eleventh Circuit and held that Fed. R. Evid. 606(b) applies in any proceeding in which a party seeks to set aside a jury verdict and does not permit an exception for testimony about juror bias or dishonestly during voir dire.

Relying on Tanner and Warger, the panel noted that several key principles emerged from the Supreme Court's interpretation of Fed. R. Evid. 606(b); specifically, Fed. R. Evid. 606(b): (1) applies in any proceeding that involves an inquiry into "the validity of the verdict;" (2) bars juror testimony about the jury's "internal processes," regardless of whether the claimed irregularity took place inside or outside of the jury room; and (3) imposes a nearly categorical bar on juror testimony about statements or events "during the jury's deliberations."

The panel also noted that, while the proposition that egregious juror misconduct will not necessarily result in relief from the verdict may seem antithetical to notions of due process, Fed. R. Evid. 606(b) exists to protect jurors from harassment and maintain the integrity and finality of jury verdicts. Thus, while persistent inquiry into the internal jury process may lead to the invalidation of some verdicts reached as the result of improper jury behavior, the trial by jury system may not survive efforts to perfect it.

The panel then analogized Leung's proffered affidavit to the juror's testimony in Tanner on the ground that, in both instances, the testimony attempted to shed light on the jury's internal affairs and sought a new trial on the ground that jurors prematurely made up their minds and discussed evidence before deliberations began. Since parsing how jurors considered evidence is exactly what Fed. R. Evid. 606(b) plainly sought to prevent, the panel declined to intrude upon the jury's mental processes concerning the verdict.

Leung then argued that the affidavit supports the inference that jurors deliberately lied during voir dire when the jurors represented that they could promise not to communicate about the case until it was over. However, the panel found Leung's argument meritless on grounds that: (1) it was nothing more than a revival of the sentiment in the now-abrogated case of Hard v. Burlington Northern Railroad, 812 F.2d 482 (9th Cir. 1987) (holding that "statements" made during deliberations "which tend to show deceit during voir dire are not barred by [Fed. R. Evid. 606(b)]) and (2) the affidavit contained no evidence of bias or deception. The panel found that nothing in the affidavit supported the inference that any of the jurors lied or concealed bias; rather, the affidavit, at most, suggested that some jurors might not have complied with each instruction.

Furthermore, the panel stated that, as a policy matter, Leung's insistence that every instance of juror misconduct should be admissible evidence of dishonesty or bias would be untenable because even trivial missteps would become fair game for a motion for a new trial. There would, therefore, be staggering consequences on the finality of jury verdicts because common, trivial mistakes of mere human fallibility would leave jury verdicts open to a motion for a new trial.

The panel held that, during a proceeding to set aside a verdict, juror testimony that other jurors engaged in premature deliberations or made up their minds about the case prior to beginning deliberations is inadmissible if offered to demonstrate that the jury engaged in flawed processing of the evidence because such testimony improperly implicates the internal affairs of the jury during an inquiry into the "validity of the verdict."

The panel concluded that a trial court has many remedies available within its broad discretion to correct jury misconduct when that misconduct is brought to the trial court's attention during trial and that, even when evidence of misconduct comes to light after the trial, a party may nevertheless attempt to produce non-juror testimony about alleged irregularities. However, once a jury pronounces its judgment, Fed. R. Evid. 606(b) protects jurors and, in light of Fed. R. Evid. 606(b)'s prohibition on juror testimony regarding the internal affairs of the jury, Leung was not entitled to a new trial or evidentiary hearing on the basis of the post-verdict juror affidavit. Leung's post-verdict affidavit was "too little, too late."

To read full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/08/06/13-10242.pdf


Panel: Sidney R. Thomas, Chief Judge, M. Margaret McKeown, Circuit Judge, and Virginia M. Kendall, District Judge, sitting by designation.

Argument Date: February 11, 2015

Date of Issued Opinion: August 6, 2015

Docket Number: 13-10242

Decided: Affirmed the District Court's denial of Defendant-Appellant's motion for a new trial and evidentiary hearing on ground that Fed. R. Evid. 606(b) barred admission of a juror's affidavit, which alleged that: (1) several jurors violated the District Court's instructions not to discuss the case before final deliberations by regularly talking about the evidence during breaks in the trial and (2) before the jury began deliberations, at least three other jurors "had already made up their minds that the defendant was guilty."

Case Alert Author: Ryan Arakawa

Counsel:

Dennis P. Riordan (argued) and Donald M. Horgan, Riordan & Hogan, San Francisco, California, for Defendant-Appellant.

Adam D. Chandler (argued), James J. Fredericks, and Kristen C. Limarzi, Attorneys; Brent Snyder, Deputy Assistant Attorney General; William Baer, Assistant Attorney General; Peter K. Huston and Micah L. Wyatt, Attorneys, United States Department of Justice, Washington, D.C., for Plaintiff-Appellee.

Author of Opinion: Judge McKeown

Circuit: Ninth Circuit

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 10/17/2015 06:04 PM     9th Circuit     Comments (0)  

  Name Space, Inc. v. Internet Corp. for Assigned Names & Numbers - Ninth Circuit
Headline:
When bringing Sherman Antitrust claims Twombly's "plausibility" standard for pleading sufficiency calls for alleging enough facts to raise a reasonable expectation that discovery will reveal evidence of illegal agreement.

Areas of Law: Civil Procedure, Antitrust, & Trade Law

Issues Presented:
Whether the plaintiff in an antitrust action sufficiently alleged sufficient facts to make a conspiracy plausible.

Brief Summary:
Plaintiff filed suit against ICANN, a government contracted non-profit to manage the assignment of TLD domain names, alleging a Sherman Act Section 1 claim for conspiracy in restraint of trade and a Sherman Act Section 2 for monopolization. ICANN did not grant the plaintiff the names it requested in 2000. Subsequently, plaintiffs could not afford to file again in 2012 because the application fee had more than tippled.

The panel held that the complaint did not state a claim for conspiracy in restraint of trade or commerce under § 1 of the Sherman Act because it did not sufficiently allege an anticompetitive agreement. Applying the plausibility standard in Bell Atlantic Corp. v. Twombly, under which a complaint must allege facts not merely consistent with, but plausibly suggesting, a conspiracy, the panel held that the complaint's factual allegations relating to ICANN's decision-making were fully consistent with the terms of its agreement with the Department of Commerce granting the plaintiff authority to manage the assignment of TLD domain names. The panel also held that the complaint did not state a claim for monopolization in violation of § 2 of the Sherman Act because ICANN is not a competitor in the market to act as a top level domain registry, the international market for domain names, or the market for blocking or defensive registration services.

Extended Summary:
In order to understand this case some foundational technology information is required. The Internet Corporation for Assigned Names and Numbers (ICANN) creates and assigns Top Level Domains (TLDs), which are the information that appears after the"." in a domain name, such as ".Gov" ".Com" ".edu" etc. The portion before the dot is called the second level domain. A Domain Name System (DNS) links each of these unique names with a corresponding IP address.

Originally the DNS was managed by the National Science Foundation and subsequently, in 1997, by the Department of Commerce (DOC). However, in 1998 the DOC contracted with ICANN a non profit corporation to run the system. Under their agreement ICANN has full control to decide how and what new TLDs will be registered. ICANN is controlled by a board of directors, including many directors who are industry leaders.

name.space is a company that specializes in "expressive" TLDs, such as .art, .food, .magic, .music, .now and .sucks. Their business model is to run these TLDs and sell hosting to their unique names. However none of their TLDs are currently available on the Root. The Root is where ICANN hosts new TLDs.

In 2000, ICANN accepted applications for new TLDs. The application instructions were seven pages, the fee was $50,000, and a single application could seek multiple TLDs. An application was 7 pages and the fee was $50,000.00. During that application period name.space applied for 118 TLDs. ICANN approved only seven new TLDs, none of which was awarded to name.space. The next application period was 2012. This time, the application guidebook was 349 pages, the fee was $185,000, and each application could seek only one TLD. Plaintiffs did not reapply in 2012 because the financial and procedural costs were too high. As in 2000, applications for new TLDs in 2012 came largely from industry insiders. The list of TLDs applied for by others in 2012 included 189 TLDs currently in use by name.space.

name.space filed suit in 2012 alleging violations of the sections 1 and 2 of the Sherman Act, the Lanham Act, the California Cartwright Act, and the California Business and Professions code, relating to the 2012 application round. In addition, name.space alleged common law trademark, unfair competition and tortious interference. In 2013, the district court granted ICANN's motion to dismiss the complaint, holding that the trademark and unfair competition claims failed to present a justiciable case or controversy, and that the other claims failed to state a claim upon which relief could be granted.

Under the Sherman Act section 1, plaintiffs need to prove a "contract, combination or conspiracy among two or more persons or distinct business entities." A complaint asserting this violation must allege facts "plausibly suggesting (not merely consistent) with a conspiracy. This plausibility standard does not impose a "probability requirement," but simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement. The complaint alleged that the rules and procedures governing the 2012 Application Round were the result of a conspiracy between ICANN, its board members, and industry insiders. The complaint alleged only circumstantial evidence of an agreement among the alleged co-conspirators: (a) some of ICANN's board members have "known, vested interests in the economic performance of the TLD registries"; (b) ICANN and its board designed the rules for the 2012 Application Round; (c) the 2012 application price was significantly higher than the 2000 price, and the rules more complex; (d) the 2012 Application Round's price and rules conflicted with name.space's business model; (e) the majority of 2012 applicants were industry insiders and large technology companies; and (f) some potential applicants, including name.space, were deterred from applying in 2012 by the price and rules. The panel held that these allegations do not permit the inference of an anticompetitive agreement because they just as easily suggest rational, legal business behavior: "Here, ICANN's decision-making was fully consistent with its agreement with the DOC to operate the DNS and the Root." The complaint's section 1 claim fails because the factual allegations merely permit the inference that a conspiracy is possible rather than plausible.

Under Section 2 of the Sherman Act prohibits monopolization of the relevant market. Because ICANN is not a competitor in any of the three alleged markets, the panel held that it cannot serve as the basis for a § 2 monopoly claim. The panel further held that ICANN's authority was lawfully obtained through a contract with the DOC and that barring predatory behavior, which the complaint did not allege, ICANN is "free to choose the parties with whom [it] will deal, as well as the prices, terms, and conditions of that dealing."

The complaint also asserted Lanham Act, common law trademark, and common law unfair competition claims because ICANN accepted applications for TLDs in use by name.space. The panel held that these claims were not ripe for adjudication, finding that name.space has not alleged that ICANN has delegated or intends to delegate any of the TLDs that name.space uses.

To read full opinion, please visit:

https://www.icann.org/en/system/files/files/namespace-ninth-circuit-affirming-dismissal-31jul15-en.pdf

Panel: Percy Anderson, District Judge Presiding, Stephen Reinhardt, N. Randy Smith, Andrew D. Hurwitz, Circuit Judges.

Date of Issued Opinion: July 31, 2015

Docket Number: No. 13-55553

Decided: Affirmed

Case Alert Author: Robert J. Dagmy
Counsel:
Plaintiff - Appellant - Michael B. Miller (argued), Craig B. Whitney, Adam J. Hunt, Morrison & Foerster LLP, New York, New York.
Defendant - Appellee Jeffrey A. LeVee (argued), Eric P. Enson, Kathleen P. Wallace, Jones Day, Los Angeles, California,
Author of Opinion: Judge Hurwitz

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 10/17/2015 05:35 PM     9th Circuit     Comments (0)  

October 16, 2015
  In re Musical Instruments - Ninth Circuit
Headline: Plaintiff-class failed to plead sufficient plus factors, in conjunction with parallel conduct, to infer the plausible existence of an illegal horizontal agreement between business competitors.

Area of Law: Antitrust, Sherman Act § 1, Illegal Horizontal Agreements, Civil Procedure and pleading requirements under Bell Atlantic Corp. v. Twombly.

Issue Presented:
Whether plaintiffs have alleged sufficient circumstantial "plus factors," in addition to their allegations of "parallel conduct" between competing businesses, to provide a plausible basis from which to infer the existence of an illegal horizontal agreement consistent with the Supreme Court's decision in Bell Atlantic Corp. v. Twombly.

Brief Summary:
Plaintiffs filed this putative class action against five manufacturer defendants claiming the competitor manufacturers entered into agreements with one another which resulted in illegal price fixing. The United States Supreme Court has held it is a per se violation of the Sherman Antitrust Act for competitors to enter into "horizontal" agreements with one another. While plaintiffs did not have any direct evidence of such agreements, they relied on parallel business conduct, in conjunction with six "plus factors" which they claimed showed defendants colluded with one another. The Ninth Circuit panel, with Judge Pregerson dissenting, held that plaintiffs' allegations of parallel conduct, in conjunction with several "plus" factors, were insufficient to provide a plausible basis from which to infer the existence of these alleged horizontal agreements.

Significance:
Under Bell Atlantic Corp. v. Twombly, an antitrust complaint must allege sufficient 'plus factors' in addition to showing parallel conduct to support a plausible inference of a price-fixing conspiracy. Two of the three panel judges rejected plaintiffs' claim that it is plausible to infer a price-fixing conspiracy based only on their allegations that certain guitar manufacturers each adopted similar advertising policies ("parallel conduct") under circumstances that suggest the manufacturers agreed among themselves to adopt those policies ("plus factors").

Extended Summary:
In this federal class action suit, plaintiffs claimed the National Association of Music Merchants (NAMM) and the large music retail store Guitar Center conspired with five major guitar manufacturers (Fender, Gibson, Yamaha, Hoshino and Kaman hereafter "manufacturer defendants") to implement minimum-advertising price policies ("MAP policies"). The MAP policies effectively set a minimum dollar figure that each manufacturer defendant had to spend on marketing, which as a result, raised the cost of guitars. It was the plaintiff's position that each of the five manufacturer defendants agreed with one another to implement the MAP policies, while defendants maintained they did not agree with one another, but that each of them independently agreed with retailer, Guitar Center, to enact the policies.

According to the Sherman Act, retailers can enter into agreements with manufacturers but competing manufacturers cannot enter agreements with one another. These "horizontal agreements" between competing manufacturers are per se banned because they give competing market participants the ability to fix prices instead of letting the market dictate the cost of goods.

Plaintiffs claim Guitar Center pressured each of the manufacturer defendants to adopt the MAP policies and that the defendant manufactures in turn agreed amongst themselves to adopt the policies. Plaintiffs did not provide any direct evidence supporting their claims, but instead relied solely on the circumstantial fact that all manufacturer defendants did in fact initiate the MAP policies.

When a plaintiff uses circumstantial evidence of parallel conduct to bring a claim under section 1 of the Sherman Act, he must "plead enough non-conclusory facts to place that parallel conduct in a context that raises a suggestion of a preceding agreement." To meet its burden, plaintiff must plead sufficient facts to prove the companies engaged in economic actions that are mostly consistent with some coordinated action, rather than independent conduct in an interdependent economy. Put another way, whether there exists sufficient 'plus factors' that suggest the defendants entered into illegal agreements. Plaintiffs claimed there were six (6) different 'plus factors' that suggested manufacturer defendants had illegally agreed with one another to initiate the MAP policies.

Plaintiffs first claimed that each of the defendants had a common motive. The court quickly dismissed this factor as all businesses have a common motive: to increase profits and make money. The common motive of making money does not itself indicate collusion.

Next, plaintiffs claimed each of the manufacturer defendants acted against their own self-interest when they agreed to increase their minimum marketing costs by adopting MAP policies. The panel rejected this claim, finding that plaintiffs' own allegations of pressure by Guitar Center, an important customer, to adopt MAP policies provide "ample independent business reasons why each of the manufacturers adopted and enforced MAP policies even absent an agreement among the defendant manufacturers."

The plaintiff's third alleged plus factor was that each manufacturer defendant simultaneously adopted the MAP policies. However in their complaint, plaintiffs claimed the defendants adopted the policies over a number of years. The panel found that "[a]llegations of such slow adoption of similar policies does not raise the specter of collusion."

Plaintiffs' fourth plus factor suggesting an agreement among defendants was an FTC investigation of NAMM. Prior to the filing of this lawsuit, the FTC had conducted an investigation on NAMM where it held there was no purpose for NAMM members to exchange certain information (each manufacturer defendant is a member of NAMM). The panel rejected plaintiff's contention because the FTC Act, unlike the Sherman Act, does not require allegation and proof of a combination or conspiracy and, further, neither the FTC complaint nor consent decree alleged that "any group or company actually conspired or agreed to adopt MAP policies . . . ".

The fifth alleged plus factor was the mere fact that each manufacturer defendant participated in NAMM meetings. Like the first plus factor alleged, the court quickly disposed of this argument stating the mere participation in trade organizations meetings where information is exchanged does not amount to illegal agreement or conspiracy.

Lastly, plaintiffs cite as evidence of collusion the complaint's allegations that the price of guitars and guitar amplifiers rose at the same time the total number of units fell at the same time that the manufacturer defendants initiated the MAP policies. The court rejected this reasoning since the price of all guitars increased, not just guitars of the named defendants. Further, the panel's majority found that plaintiffs "did not allege any facts connecting the purported price increase to an illegal agreement among competitors. And without such a connection, there is simply no basis from which we can infer an agreement."

Rejecting the dissent's position that, "'when analyzed together,' plaintiffs' purported plus factors provide a context that plausibly suggests that 'an illicit horizontal agreement was made between the manufacturer defendants,'" the panel found that "[p]laintiffs have indeed provided a context for the manufacturers' adoption of MAP policies, but not one that plausibly suggests they entered into illegal horizontal agreements. Instead, the complaint tells a different story, one in which Guitar Center used its substantial market power to pressure each manufacturer to adopt similar policies, and each manufacturer adopted those policies as in its own interest." The panel affirmed the district courts 12(b)(6) dismissal.

To read full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/08/25/12-56674.pdf

Panel: Harry Pregerson, Richard C. Tallman, and Carlos T. Bea, Circuit Judges.

Argument Date: October 6, 2014

Date of Issued Opinion: August 25, 2015

Docket Number: No. 12-56674

Decided: Affirmed the District Court granting defendant's 12(b)(6) dismissal.

Case Alert Author: Brian D. Shapiro

Counsel:
Daniel C. Girard, Elizabeth C. Pritzker, Amanda Steiner, Scott M. Grzenczyk (argued), Girard Gibbs LLP, San Francisco, California, for Plaintiffs-Appellants.
Margaret M. Zwisler (argued), J. Scott Ballenger, Latham & Watkins LLP, Washington, D.C.; Christopher S. Yates, Latham & Watkins LLP, San Francisco, California, for Defendant-
Author of Majority Opinion: Judge Bea
Circuit: Ninth Circuit
Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 10/16/2015 07:06 PM     9th Circuit     Comments (0)  

  First Intercontinental Bank v. Christina Ahn, Ninth Circuit
Headline: The Ninth Circuit panel, applying California's choice-of-law doctrine, affirmed the district court's ruling that California law - which prohibits the enforcement of unilateral attorney's fees clauses in contracts - governs the enforceability of the contract's unilateral attorney's fees clause, where the contract contains a choice-of-law provision calling for the application of Georgia law which permits non-reciprocal attorney's fees clauses.

Area of Law: Civil Procedure, Choice of Law
Issues Presented: Whether California or Georgia law governs a dispute over the enforcement of a contract's unilateral attorneys' fees clause when California law prohibits the use of non-reciprocal attorney's fees but the contract contained a choice-of-law provision specifying the application of Georgia law which permits such non-reciprocal clauses.

Brief Summary:
The district court awarded defendant summary judgment, releasing her from any obligations under a loan agreement she had signed with plaintiff Bank, and filed a Motion for Attorneys' Fees. The loan contract provided for attorneys' fees only to the Bank in case of a dispute, and also provided that Georgia law governed the contract. California Civil Code section 1717(a) makes reciprocal otherwise unilateral attorneys' fees clauses in contracts, so the panel had to decide whether to apply Georgia or California law to determine whether defendant should prevail.

Since the action was brought in California, California's choice-of-law rules govern the dispute. The panel followed the approach outlined in California Restatement (Second) of Conflict of Laws § 187. Although the panel found the that there was a reasonable basis for the choice-of-law provision contained in the loan agreement , the panel also found that California law would be applied in the absence of the choice-of-law provision, and that California a fundamental public policy against unilateral attorneys' fees provisions. Since the Bank chose to bring the action in California, and the defendant is a California resident, the panel ruled that California has a materially-greater interest than Georgia in seeing its own public policy applied.

The decision of the panel affirmed the district court's award of attorney's fees to defendant.

Extended Summary:
Plaintiff Bank brought suit in federal district court for repayment of a loan. The Bank added Christina Ahn as a defendant although it had previously released her from the loan in her individual capacity. The district court granted summary judgment to Christina, who then filed a Motion for Attorneys' Fees and Costs. The district court granted Christina's motion and awarded attorneys' fees to her.

The loan contract only provided for attorneys' fees to the lender in case of successful litigation. It also included a choice-of-law provision specifying that Georgia law governs the contract. However, California Civil Code section 1717(a) makes reciprocal otherwise unilateral attorney's fees clauses in contracts, so the panel had to decide whether to apply Georgia or California law to determine whether Christina should prevail.

Since the action was brought in California, the district court correctly applied California's choice-of-law rules. The panel determined that California choice-of-law doctrine follows the Restatement (Second) of Conflict of Laws § 187 which provides a four-step approach to determine the law to apply when a contract has a choice-of-law provision:

(1) The first question is "whether the chosen state has a substantial relationship to the parties or their transaction, or . . . whether there is any other reasonable basis for the parties' choice of law."
(2) If yes, the court next determines whether California law would be applicable in the absence of effective choice-of-law by the parties.
(3) If yes, the court then determines whether the relevant portion of the chosen state's law is contrary to a fundamental policy in California law.
(4) If yes, the court finally determines whether California has a "materially greater interest than the chosen state in the determination of the particular issue." If yes, California law is applied. If the answer to any of these questions is no the court applies the law of the forum selected in the contract.

Since the Bank is located in Georgia, and the contract and related documents were drafted in Georgia, there is a reasonable basis for the choice-of-law provision contained in the contract.

To decide whether California would apply its own law in the absence of the choice-of-law provision, the Court looked to Restatement (Second) of Conflict of Laws section 188. The restatement provides five factors to consider: (a) the place of contracting; (b) the place of negotiation of the contract; (c) the place of performance; (d) the location of the subject matter of the contract; and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. The contract was made and negotiated in both California and Georgia. The payments were due in Georgia but it is unclear where Christina made payments from. The loan contract was for a hotel in Louisiana, and Christina is a citizen of California while the Bank's principal place of business is in Georgia. Therefore none of the factors favor either state. The panel adopted the approach used by the California District Court of Appeals in ABF Capital Corp. v. Grove Properties Co. which applied California law where the factors do not lead to a clear conclusion. Accordingly, the panel determined that California would apply its own law to the dispute in the absence of the choice-of-law provision selecting Georgia law.

Next, the panel found that California Civil Code section 1717(a) embodied a fundamental public policy against non-reciprocal attorney's fees clauses. The legislature's purpose behind section 1717(a) is to enable consumers and others who may be in a disadvantageous contractual bargaining position to protect their rights through the judicial process by permitting recovery of attorneys' fees incurred in litigation in the event they prevail. The panel ruled that applying Georgia law would be contrary to California's fundamental public policy.

Finally, the panel focused on two factors to determine whether California has a materially-greater interest than another state in an attorneys' fees dispute: (1) whether the parties chose to bring litigation in a California state court; and (2) the citizenship of the parties. Here, the Bank chose to file the lawsuit in federal district court in California rather than another state. Also, since Christina is a California citizen and would be on the losing end of a non-reciprocal attorneys' fees provision, California has a substantial interest in applying its own law in this case.

The panel held that section 1717(a) governs the outcome of this case and affirmed the district court's decision to award attorneys' fees to the defendant.

To read the full opinion, please visit:

http://www.thompsoncoburn.com/...m_Documents/ahn_1.pdf

Panel: Milan D. Smith, Jr. and N. Randy Smith, Circuit Judges, and Joan H. Lefkow, Senior District Judge

Argument Date: June 5, 2015
Date of Issued Opinion: August 18, 2015
Docket Number: 13-56097
Decided: Affirmed
Case Alert Author: Matthew J. Gustin

Counsel:
S. Young Kim (argued), Park & Lim, Los Angeles, California, for Plaintiff-Appellant.

Natalie Ikhlassi (argued) and Helen B. Kim, Thompson Coburn LLP, Los Angeles, California, for Defendants-Appellees.

Author of Opinion: Judge Milan D. Smith, Jr.
Circuit: Ninth
Case Alert Circuit Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 10/16/2015 05:46 PM     9th Circuit     Comments (0)  

October 2, 2015
  Mollett v. Netflix, Inc. - Ninth Circuit
Headline: Netflix does not violate the Video Privacy Protection Act when it exposes its customers to their own 'viewing history' on a mandatory basis.

Area of Law: Video Privacy Protect Act, Cal. Civ. Code § 1799.3

Issue Presented:
Whether Netflix violates the Video Privacy Protection Act and Cal. Civ. Code § 1799.3 by permitting certain disclosures about subscribers' viewing history to third parties - specifically subscribers' family, friends, and guests.

Brief Summary:

Plaintiff brought this federal class action lawsuit against Netflix claiming that the online movie service provider violates the Video Privacy Protection Act (VPPA) and Cal. Civ. Code section 1799.3 by disclosing "personally identifiable information" to third parties by automatically displaying on a subscriber's account home page a list of "recently watched" video titles, the subscriber's queue, and lists of video titles recommended by Netflix which are visible to family members, friends, or guests of Netflix subscribers who use a subscriber's account to stream videos, or are in the presence of a subscriber when she is accessing her account through a Netflix-ready device. Netflix subscribers often share their accounts with family and friends because Netflix allows multiple devises to link up with one Netflix account. Anyone with access to that account is exposed to the 'viewing history' on the account's home page. Put another way, the shows and movies that the subscriber had previously watched automatically show up upon signing in to the account. Plaintiff claimed Netflix violates the VPPA and 1799.3 by "knowingly" and "willfully" giving out personally identifiable information" to third parties. The district court and Ninth Circuit disagreed, stating Netflix is not providing the information to the third parties but, rather, to the individual subscriber himself who gave his friends and family access to his own Netflix account.

Significance:
A Netflix subscriber is not afforded VPPA privacy protections when they let other people use their account.

Extended Summary:

Netflix provides individual customers with a personal list of recommended videos based on the past movies the individual streamed from the site. Netflix software uses the individual subscriber's past movie queue to suggest similar movies or television shows that the customer may be interested in. The Netflix display will automatically recommend a movie and say something along the lines of "we recommend Movie X because you liked Movie Y." Each subscriber has a list of 'recently watched' movies that cannot be deleted, and are open and visible to all family members and friends who use that particular subscription. (Netflix allows multiple devises access to one account so many people share their Netflix service with family and friends).

Plaintiffs claim Netflix is violating the VPPA and California Civil Code section 1799.3 by controlling the 'recently watched' movies and exposing all users (of that particular subscription) to the individual subscriber's recently watched content. Netflix moved to dismiss the case for failure to state a claim based on two theories: (1) the disclosures of personal information are made to subscribers themselves causing no injury, and (2) any disclosures made to a third party are not done knowingly as required by the VPPA, or in willful violation of the law as required by California Civil Code section 1799.3. The district court granted Netflix's 12(b)(6) motion and the Ninth Circuit panel affirmed.

The Video Privacy Protection Act ("VPPA") prohibits movie service providers such as Netflix from "knowingly disclosing personally identifiable information" about one of its consumers to third parties unless the provider received prior written consent. Under the VPPA, Netflix can, however, knowingly provide personal information to that individual consumer himself. The panel held that "the disclosure alleged by Plaintiffs is a disclosure 'to the consumer' that is permitted by the Act": "When Netflix displays a subscriber's queue, viewing history, or recommendation lists in her online account, that is a disclosure directly to the consumer. The nature of that disclosure does not change when subscribers choose to display the same content on their television screens. The subscriber's choice to do so does not trigger some new statutory duty on the part of Netflix."

California Civil Code section 1799.3 provides that "no person providing video recording sales or rental services shall disclose any personal information or the consents of any record, including sales or rental information . . . to any person, other than the individual who is the subject of the record, without the written consent of that individual.: Cal. Civ. Code § 1799.3(a). The panel held that Plaintiffs fail to plead a violation of 1799.3 for the same reason they fail to plead a successful VPPA violation.

To read full opinion, please visit:
http://www.hollywoodreporter.c...tflix%20appellate.pdf
Panel: Richard C. Tallman and Johnnie B Raylingson, Circuit Judges, and Raymond J. Dearie, Senior District Judge

Argument Date: February 6, 2015

Date of Issued Opinion: July 31, 2015
Docket Number: 12-17045
Decided: Affirmed the district court in granting Netflix's 12(b)(6) motion
Case Alert Author: Brian D. Shapiro
Counsel:
Rachele R. Rickert (argued), Francis M. Gregorek, Betsy C. Manifold, and Marisa C. Livesay, Wolf Haldenstein Adler Freeman & Herz LLC, San Diego, California; Mary Jane Fait and Theodore B. Bell, Wolf Haldenstein Adler Freeman & Herz LLC, Chicago, Illinois, for Plaintiffs-Appellants.
Keith E. Eggleton (argued), Rodney G. Strickland, Jr., Brian M. Willen, and Jessica L. Snorgrass, Wilson Sonsini Goodrich & Rosati, Palo Alto, California, for Defendant- Appellee.
Author of Majority Opinion: Judge Dearie
Circuit: Ninth Circuit
Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 10/02/2015 07:08 PM     9th Circuit     Comments (0)  

September 15, 2015
  Nicolay Ivanov Angov v. Loretta E. Lynch, Attorney General - Ninth Circuit
Headline: Alien seeking asylum in the U.S. denied the right to cross-examine an investigator who wrote a report showing he submitted fraudulent documents in support of his alleged persecution.

Area of Law: Constituional Law; Immigration Law; Asylum Law

Issues Presented:

(1) Whether an Immigrant who has never entered the United States is afforded procedural due process rights under the constitution.

(2) Whether Angov was denied his right to examine evidence against him pursuant to 8 U.S.C. § 1229a(b)(4)(B) when the government failed to produce foreign police officials and U.S. State Department of Asylum Affairs officials to be cross examined by an asylum applicant.

(3) Whether Angov "presented evidence so compelling that no reasonable factfinder could find that [Angov] was not credible."
Brief Summary: Alleged persecution by Bulgarian officials led Nikolay Angov to seek asylum here in the United States. At his asylum hearing, the government presented an investigation report that tended to show Angov produced fraudulent documents as evidence for his asylum. Angov requested that the investigating officer be present at his hearing so Angov could cross-examined him. Angov argued that admitting the investigators report, without availing the investigator, deprived him of due process and statutory rights to cross-examine a witness who testified against him. The court rejected Angov's argument holding immigrants who have not 'entered' the United States are not afforded the same constitutional rights as those who have 'entered' the country. The Ninth and Second Circuits are split on admitting evidence of this nature.

Significance

Immigrants seeking asylum in the United States cannot bring due process challenges in the Ninth Circuit if they have not 'entered' this county, nor do they have statutory rights to cross-examine the witnesses against them if it would be unreasonable to require the witness to testify.

Extended Summary:

Nikolay Angov, a Bulgarian citizen, claimed he was consistently persecuted by Bulgarian police because of his gypsy lifestyle. Angov stated he was subjected to police beatings, false accusations and illegitimate arrests. Angov sought asylum in the US to escape the hostile environment in his home country of Bulgaria. See INS v. Cardoza-Fonseca, 480 U.S. 421, 423 (1987) ("When granted asylum the alien may be eligible for adjustment of status to that of a lawful permanent resident . . . subject to numerical limitations and the applicable regulations."). Angov never formally entered the United States before submitting his application for asylum.

At his asylum hearing, Angov presented several documents as evidence of police misconduct including two Bulgarian subpoenas that ordered him to appear at a police station.

In response to Angov's application for asylum, the government conducted its own investigation through a U.S. consult in Bulgaria. The results of the investigation were summarized in a report which revealed countless flaws in Angov's documents, specifically the subpoena's, which included names of police officers who did not exist, stated the wrong case number, and were stamped with seals that were too small. While technically hearsay, the letter was highly probative of Agnov committing fraud to gain access to the U.S.

Angov and his attorney submitted a plethora of rebuttable evidence in response to the governments incriminating letter. Angov also requested the opportunity to cross-examine the investigators who wrote the letter, but the State Department refused. In its response, the Department explained it is State policy to refrain from disclosing specific information from an overseas investigation except for general procedural aspects of the investigation. Angov argued he was denied his procedural due process rights because he was not given the opportunity to cross-examine the witness who testified against him. Over Angov's objections, the Immigration Judge made an adverse credibility finding based on the letter, and denied Angov's application for asylum in the United States.

Angov appealed to the Board of Immigration Appeals but the board affirmed the Immigration Judge's decision not granting Angov asylum. Angov took his case up a second time claiming (1) he was denied his due process rights, (2) that he was denied statutory right and (3) that he provided enough evidence to overturn the Immigration Judge's decision.

Whether an Immigrant who has never entered the United States is afforded procedural due process rights under the constitution.

Once an alien has entered the United States, even if illegally, they are afforded full procedural due process protections. An alien who has not formally entered the United States however, has no constitutional right to procedural due process. "An alien seeking admission has not 'entered' the United States, even if the alien is in fact physically in the US."

The court held Angov never entered the United States. Due process rights did not kick in just because Angov showed up at a port in San Diego without valid entry documents seeking asylum. The court makes a distinction between immigrants living in the United States and immigrants seeking to live in the United States. The former are afforded constitutional due process protections while the latter are not. For this reason, Angov had no due process challenge because he has no due process rights as an immigrant seeking admission into the United States. The court was short in its due process analysis, simply concluding Angov did not 'enter' the United States.

Whether Angov was denied his right to examine evidence against him pursuant to 8 U.S.C. § 1229a(b)(4)(B) when the government failed to produce foreign police officials and the Director of the U.S. State Department of Asylum Affairs to be cross examined by an asylum applicant.
Angov claims he was denied his right to examine the witnesses against him pursuant to 8 U.S.C. § 1229a(b)(4)(B). But during an immigration hearing, the judge is not required to present every possible foreign witness who will testify against an immigrant, such would make it impossible to present adverse evidence against the immigrant. Instead, the government must only make reasonable efforts to provide an immigrant with the opportunity to confront the witnesses against him.
It was Angov's position that the author of the investigative report, the Bulgarian police officials, and the Director of the U.S. State Department of Asylum Affairs should have been brought to his hearing for an opportunity to be cross-examined. The court quickly and logically dispensed of this theory based on the tremendous burden this would place on all immigration hearings. If that were the case, it would be nearly impossible to present rebuttable evidence at an immigration hearing because the source of any information would need to be present. The onerous hurdles are obvious.
Whether Angov presented substantial evidence so compelling that no reasonable factfinder could find that Angov was not credible.
As a final effort to reverse the immigration judge's decision, Angov attempted to rebut the government's letter by presenting substantial evidence "so compelling that no reasonable factfinder could find that Angov was not credible." If Angov were able to meet this strict standard, the Ninth Circuit would reverse the immigration boards decision based solely on the evidence presented. During its analysis, the court again went into a discussion about the admissibility of the investigative report, addressing a jurisdictional split with the Second district.

Angov cited a per se Second Circuit rule in arguing the Ninth Circuit "must blind themselves" of the State Departments letter unless "it provide[d] particular information regarding how an investigation was conducted." The Ninth Circuit eagerly ignored the Second Circuit's per se rule requiring further explanation calling it an invitation to "craft quasi-statutory criteria [for] governing the admissibility of evidence in agency proceedings." Unlike the Second District, this court does not believe documents of this nature are inherently unreliable.

The majority opinion noted that Congress and the Attorney General have given immigrants seeking admission to the United States a variety of procedural rights, such as the right to a hearing represented by counsel, the right to examine evidence against him, and the right to cross examine the witnesses against him. The court refused to extend these rights to include barring a reliable State Department letter which provided clear evidence of fraud just because the investigator (who will likely always be in a foreign country) is not present. There is no reason to generally cast doubt on countless US agency documents unless there is something particularly unreliable about a specific one document. There are obvious incentives for entering the United States, and the Ninth Circuit court refused to reward fraudulent activities to open the door.

Dissent

The dissent would join the Second Circuit in reviewing the State Departments letter. Chief Judge Thomas believes "unsworn, unauthenticated, hearsay letters - prepared for litigation by the government an not subject to any form of cross examination - cannot form a sole basis for denying asylum to an otherwise qualified applicant." To Thomas, admitting a report that was formed for litigation purposes, without presenting the investigator who prepared the document, gives the executive agency an unfair amount of unchallenged authority. He also feels Angus should have the right to due process challenges.

The dissent also showed concern with the lack of information the agency provided to support the contents of the investigative report. Essentially the government agency, in this case the Department of State's Office of Country Reports and Asylum Affairs, will perform an investigation and report its findings without providing any information as to how the investigation was conducted or establishing the credibility of the investigator. The dissenting opinion was unhappy with the lack of information required to support a document of this kind.

To read full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/06/08/07-74963.pdf

Panel: Sidney R. Thomas, Chief Judge, Alex Kozinski and Stephen S. Trott, Circuit Judges

Date of Issued Opinion: June 8, 2015

Docket Number: 07-74963

Decided: Affirmed the Board of Immigrations Appellate decision, which affirmed the Immigration Judge's decision to deny asylum.

Case Alert Author: Brian D. Shapiro

Counsel:

Nicolette Glazer (argued), Law Offices of Larry R. Glazer, Century City, California, for Petitioner.

Gregory G. Katsas, Assistant Attorney General, Barry J. Pettinato, Assistant Director, Jesse Lloyd Busen (argued) and Charles E. Canter, Attorneys, United States Department of Justice, Civil Division, Washington, D.C., for Respondent.

Author of Majority Opinion: Judge Kozinski

Author of Dissenting Opinion: Chief Judge Thomas

Case Alert Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 09/15/2015 03:42 PM     9th Circuit     Comments (0)  

  Ward v. Apple, Inc. - Ninth Circuit
Headline: Is a Joint Tortfeasor always a 'necessary party' under FRCP Rule 19.

Areas of Law: Federal Civil Procedure, Antitrust

Issues Presented:

Whether AT&T Mobility (AT&T) was, as a joint tortfeasor, a necessary party to the legal action, such that the class' failure to join AT&T as a party to the legal action was cause dismissal of the entire action.

Whether the decision of the district court was voluntary or adverse to plaintiff, such that it invoked the court of appeals statutory appellate jurisdiction.

Brief Summary:
On October 19, 2012, the present putative class action was filed against Apple (Apple III) asserting a single antitrust claim: conspiracy to monopolize the aftermarket for iPhone voice and data services. The class did not name AT&T as a defendant even though the alleged conspiracy with Apple. The case was consolidated with Apple II and the parties stipulated to submit the Apple II briefs on the Rule 19 claim. The stipulation provided that the parties "agreed that the district court should grant Apple's motion to dismiss under Rule 12(b)(7) if the court decided to follow Judge Ware's decision in Apple II." Judge Rogers then granted the motion for reasons set forth in Judge Ware's July 11, 2012 Order. This created the judgment in favor of Apple and the Plaintiff's filed a timely appeal.

The Ninth Circuit first determined that they had jurisdiction because "voluntary dismissals with prejudice that produce an adverse final judgment may be appealed . . . at least where the plaintiff is not acting pursuant to a settlement agreement." The dissent stated that the parties "effectively agreed with Judge Rogers to manufacture appellate jurisdiction without presenting the Rule 19 issue to her for an independent decision."

As to the Rule 19 issue, the Plaintiff argued the District Court violated the "longstanding principle that joint tortfeasors need not be joined in one action." The Ninth Circuit responded by stating that whether a joint tortfeasor must be joined is a conclusion from the factual analysis because there "may be circumstances in which an alleged joint tortfeasor has particular interests that cannot be protected in a legal action unless it is joined under Rule 19(a)(1)(B)." The Ninth Circuit looked at the advisory committee's note to the 1966 amendment to the Federal Rules of Civil Procedure (FRCP) Rule 19, which stated that "a tortfeasor with the 'joint-and-several' liability is merely a permissive party to an action against another with like liability" and concluded that "[a]ntitrust conspirators are liable for the acts of their co-conspirators" and that therefore "a plaintiff is 'not required to sue all of the alleged conspirators . . . as antitrust coconspirators are joint and severally liable.'" This led the Ninth Circuit to the conclusion that "an absent antitrust co-conspirator generally will not be a required party under Rule 19(a)(1)(A)." It was the Ninth Circuit's opinion that the class could recover "all of their damages" from Apple alone, and that AT&T was not a required party under Rule 19(a)(1)(A).

The Ninth Circuit then turned their focus to Rule 19(a)(1)(B)(i) to determine if AT&T was a required party because their absence left them with an unprotected interest. The Ninth Circuit stated that "Rule 19(a)(1)(B) requires the determination of whether an absent joint tortfeasor is a required party by identifying the specific interest the absent party claims and . . . whether the party's ability to protect that interest may be impaired."

The Ninth Circuit then turned to the order from Judge Ware in Apple II which reasoned "that it would be required to evaluate AT&T's conduct, and that such an evaluation would necessarily implicate the interests of AT&T, which means that AT&T is a necessary party." This language left the Ninth Circuit with the interpretation that the district court was saying that "because the alleged conspiracy is with AT&T . . . AT&T is a necessary party." This was contrary to the general rule, however, the Ninth Circuit stated that FRCP Rule 19 (a)(1)(B)(i) turned on whether AT&T's interest qualifies for protection.

The Ninth Circuit stated that under FRCP Rule 19(a)(1)(B)(i) that there were to requirement for finding a required party. The first was whether or not the party identified as a required party, "claimed a legally protected interest relating to the subject matter of the action. Quoting Bowen v. United States, 172 F.3d 682 (9th Cir. 1999). Second is that the interest being claimed is legally protected. In Cachil Dehe Band, 547 F.3d at 970 (quoting Am. Greyhound Racing, 305 F.3d at 1023) the Ninth Circuit stated that the interest needs to "be more than a financial stake, and more than speculation about a future event."

To the first requirement, the Ninth Circuit went on to state that is was questionable whether or not a declaration from AT&T's counsel in Apple I, stating that AT&T has an interest in the case in Apple II was sufficient to be recognized as AT&T claiming an interest. However, the Ninth Circuit stated that it was not necessary to resolve that issue because "Apple has not shown that the interests AT&T has purportedly claimed are legally protected under [FRCP] Rule 19."

Turning focus to the second requirement, that the interest being claimed is legally protected the Ninth Circuit focused on the interest contended by Apple: (1) AT&T faces a risk of regulatory scrutiny; (2) AT&T faces risk of harms to its reputation; and (3) AT&T has a number of contractual rights that may be impaired if this action is resolved in its absence.

The Ninth Circuit stated that they were "reluctant to recognize legally protected interests based solely on '[s]peculation about the occurrence of a future event'" and that is what the risk of regulatory scrutiny was, a future speculated future event. As to the reputational interest, the Ninth Circuit stated "[a] joint tortfeasor's reputation generally will be adversely impacted in any case accusing it of wrongdoing . . . recognizing a protected interest in business reputation would significantly erode the general rule that a plaintiff need not join all joint tortfeasors in one action." Finally, looking at the contractual rights, the Ninth Circuit concluded that the rights to the unlock codes may or may not have been an interest that AT&T had at the time, the Plaintiffs had no claims arising under the AT&T Wireless Service Agreement (WSA), and that Apple was not a party to the WSA and could not benefit from the WSA.
In concluding that AT&T may or may not have claimed an interest, but that any interest claimed by AT&T was not a legally protected interest, the Ninth Circuit found that AT&T was not a necessary party to the action. The Ninth Circuit reversed the decision of the district court and remanded the case for further proceedings.

Significance:

Under Rule 19, the general rule is that joint tortfeasors are not a required party, unless it is shown that the party is claiming an interest in the subject matter of the case, and that the interest being claimed is a legally protected interest.

Extended Summary: The sale of iPhones began in June 2007 when Apple, Inc. (Apple) entered into an agreement with AT&T Mobility (AT&T) as the exclusive provider of voice and data services for a period of five years. The first lawsuit was filed in the Northern District of California by nine Apple customers. The suit claimed that Apple installed "software locks" on the iPhones in order to protect and enforce the exclusivity agreement between Apple and AT&T without the customer's knowledge. Theses "software locks" allowed AT&T to charge "supra-competitive prices for wireless services. The nine cases were consolidated into the case In re Apple AT&TM Anti-Trust Litigation, No. 5:07-cv-05152-JW(N.D. Cal.)(Apple I). In 2008 and 2009, the district court denied motions by Apple and AT&T to dismiss, but he motions were denied and the class was certified on July 8, 2010. AT&T, after originally being denied motions to compel arbitration under their user agreements, AT&T was successful in 2011 in getting the motions granted.

In 2011 and 2012 new suits were filed by Apple customers and were consolidated into In re Apple iPhone Antitrust Litigation, No. 4:11-cv-06714-YGR (N.D. Cal.) (Apple II). The claims by the plaintiffs in Apple II were the same as those in Apple I, with a change of defendants. In Apple II, AT&T was not named a defendant. Under Apple II, AT&T again attempted to compel arbitration but was unsuccessful because AT&T was not a named party. AT&T then filed a declaration stating that "AT&T has an interest in this case, . . . AT&T has not intervened in this suit because, given the ruling in Apple I, . . . f AT&T were to be joined to this litigation, AT&T would move to compel arbitration." The District court then held that AT&T was a necessary party. The district court stated in the opinion " n order to evaluate Plaintiffs' antitrust claims in regard to the alleged conspiracy to monopolize the alleged iPhone Voice and Data Services Aftermarket, the Court will be required to evaluate AT&T's conduct." The district court concluded that "[s]uch an evaluation of AT&T's conduct would necessarily implicate the interests of AT&T, which means that AT&T is a necessary party pursuant to Rule 19(a)." Since the plaintiff in Apple II refused to add AT&T as a party, their suit was dismissed.

On October 19, 2012, the present putative class action against Apple was filed (Apple III) asserting a single claim against Apple, conspiracy to monopolize the aftermarket for iPhone voice and data services. Again, AT&T was not a named defendant. The case was consolidated with Apple II and the parties stipulated to submit the Apple II briefs on the Rule 19 claim. The stipulation provided that the parties "agreed that the district court should grant Apple's motion to dismiss under Rule 12(b)(7) if the court decided to follow Judge Ware's decision in Apple II." Judge Rogers then granted the motion "for reasons set forth in Judge Ware's July 11, 2012 Order." This created the judgment in favor of Apple and the Plaintiff's filed a timely appeal.

The Ninth Circuit first determined that they had jurisdiction because "voluntary dismissals with prejudice that produce an adverse final judgment may be appealed . . . at least where the plaintiff is not acting pursuant to a settlement agreement." The dissent stated that the parties "effectively agreed with Judge Rogers to manufacture appellate jurisdiction without presenting the Rule 19 issue to her for an independent decision." This was because the parties stipulation regarding the Rule 19 briefs from Apple II. However, the majority of the Ninth Circuit determined from the statements in the record that Judge Rogers completed her own review and agreed with Judge Ware and instead of issuing different language, repeated the wording used by Judge Ware. This meant that Ward had an adverse judgment, that was appealable.

The Ninth Circuit then turned to the Rule 19 issue. Here, Plaintiff Ward had argued that the "longstanding principle that joint tortfeasor need not be joined in one action" was violated by the District Court's ruling. The Ninth Circuit responded by stating that whether a joint tortfeasor must be joined is a conclusion from the facts because there "may be circumstances in which an alleged joint tortfeasor has particular interests that cannot be protected in a legal action unless it is joined under Rule 19(a)(1)(B)." The Ninth Circuit looked at the advisory committee's note to the 1966 amendment to the Federal Rules of Civil Procedure (FRCP) Rule 19, which stated that "a tortfeasor with the 'joint-and-several' liability is merely a permissive party to an action against another with like liability" and concluded that "[a]ntitrust conspirators are liable for the acts of their co-conspirators" and that therefore "a plaintiff is 'not required to sue all of the alleged conspirators . . . as antitrust coconspirators are joint and severally liable." This lead the Ninth Circuit to the conclusion that "an absent antitrust co-conspirator general will not be a required party under Rule 19(a)(1)(A). It was the Ninth Circuit's opinion that Ward would be able to recover "all of their damages" from Apple alone, and that AT&T was not a required party under Rule 19(a)(1)(A).

The Ninth Circuit then turned their focus to Rule 19(a)(1)(B)(i) to determine if AT&T was a required party because their absence left them with an unprotected interest. In this regard, the Plaintiffs contended that the district court erred by holding AT&T a required party without specifically identifying AT&T's interests and how that interest might be impaired if the action were resolved in their absence. This argument struck accord with the Ninth Circuit, who agreed that "Rule 19(a)(1)(B) requires the determination of whether an absent joint tortfeasor is a required party by identifying the specific interest the absent party claims and . . . whether the party's ability to protect that interest may be impaired."

The Ninth Circuit then turned to the order from Judge Ware in Apple II which reasoned "that it would be required to evaluate AT&T's conduct, and that such an evaluation would necessarily implicate the interests of AT&T, which means that AT&T is a necessary party." This language left the Ninth Circuit with the interpretation that the district court was saying that "because the alleged conspiracy is with AT&T . . . AT&T is a necessary party." However, the Ninth Circuit stated that FRCP Rule 19 (a)(1)(B)(i) turned on whether AT&T's interest qualifies for protection.

The Ninth Circuit stated that under FRCP Rule 19(a)(1)(B)(i) that there were to requirement for finding a necessary party. The first was whether or not the party identified as a required party, "claimed a legally protected interest relating to the subject matter of the action. Quoting Bowen v. United States, 172 F.3d 682 (9th Cir. 1999). Second is that the interest being claimed is legally protected. In Cachil Dehe Band, 547 F.3d at 970 (quoting Am. Greyhound Racing, 305 F.3d at 1023) the Ninth Circuit stated that the interest "be more than a financial stake, and more than speculation about a future event.

To the first requirement, the Ninth Circuit went on to state that is was questionable whether or not a declaration from AT&T's counsel in Apple I, stating that AT&T has an interest in the case in Apple II was sufficient to be recognized as AT&T claiming an interest. However, the Ninth Circuit stated that it was not necessary to resolve that issue because "Apple has not shown that the interests AT&T has purportedly claimed are legally protected under [FRCP] Rule 19."

Turning focus to the second requirement, that the interest being claimed is legally protected the Ninth Circuit focused on the interest contended by Apple: (1) AT&T faces a risk of regulatory scrutiny; (2) AT&T faces risk of harms to its reputation; and (3) AT&T has a number of contractual rights that may be impaired if this action is resolved in its absence.

On the issue of regulatory scrutiny, Apple relied on an Eleventh Circuit case of Laker Airways, Inc. v. British Airways PLC, 182 F.3d 843 (11th Cir. 1999). The Ninth Circuit held that the Laker Airways case was inapposite because the private corporation in that case stood to lose their approval as the appointed coordinator, not just routine regulatory scrutiny. In addition the Ninth Circuit went on to say that they were "reluctant to recognize legally protected interests based solely on '[s]peculation about the occurrence of a future event.'"

On the issue of reputational interests the Ninth Circuit made it clear that this was not a legally protected interest. The Ninth Circuit stated "[a] joint tortfeasor's reputation generally will be adversely impacted in any case accusing it of wrongdoing . . . recognizing a protected interest in business reputation would significantly erode the general rule that a plaintiff need not join all joint tortfeasors in one action."

Turning to the final interest contended by Apple, that of contractual rights being impaired, the Ninth Circuit found that Apple was claiming AT&T had three different contract rights that would be impaired: (1) AT&T's right to control unlock codes; (2) rights arising from AT&T's wireless Service Agreement (WSA) with customers; and (3) AT&T's arbitration provisions in the WSA.

As to the first, AT&T's rights to control unlock codes, the Ninth Circuit found that this right only lasted during the contract and the unwind period. With the contract over and the unwind period sufficiently vague, the Ninth Circuit concluded that this was insufficient to constitute a protected interest because AT&T may not have the rights to control unlock codes.

As for the second claimed interest, claims from AT&T's WSA, the Ninth Circuit found that this was not a protected interest because the district court stated that "[the] Plaintiffs have not contended that any of their claims arise from AT&T service contracts." In addition, if the WSA was so important there would have been a copy in the record, and there was none.

Finally, as for the AT&T arbitration provision of the WSA, the Ninth Circuit found that Apple was not a signatory to the contract and thus could not benefit from its provisions. Thus, this interest was not a legally protected interest.

In concluding that AT&T may or may not have claimed an interest, but that any interest claimed by AT&T was not a legally protected interest, the Ninth Circuit found that AT&T was not a necessary party to the action. The Ninth Circuit reversed the decision of the district court and remanded the case for further proceedings.

Dissent:

In Judge Wallace's dissent, he wrote that the court should not have heard the case because there was no appealable issue - it was voluntarily dismissed that resulted no adverse judgment for which to appeal. Judge Wallace would have also affirmed the order of the district court by concluding Plaintiff waived the Rule 19 issue "by inviting Judge Rogers to adopt the very analysis that they now allege on appeal was erroneous." Judge Wallace stated that "[O]ne may not complain on review of errors below for which he is responsible."

To read full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/06/29/12-17805.pdf

Panel:
J. Clifford Wallace, Milan D. Smith, Jr., and Michelle T. Friedland, Circuit Judges.

Date of Issued Opinion: June 29, 2015

Docket Number: No. 12-17805

Decided: Reversed and Remanded.

Case Alert Author:
Lawrence J. Hudack

Counsel:
Mark C. Rifkin (argued), Alexander H. Schmidt, and Michael Liskow, Wolf Haldenstein Adler Freeman & Herz LLP, New York, New York; Francis M. Gregorek and Rachele R. Rickert, Wolf Haldenstein Adler Freeman & Herz LLP, San Diego, California; Randall S. Newman, Randall S. Newman P.C., New York, New York, for Plaintiff-Appellant Zack Ward.

Adam J. Levitt, Grant & Eisenhofer P.A., Chicago, Illinois, for Plaintiff-Appellant Thomas Buchar.

Daniel M. Wall (argued) and Christopher S. Yates, Latham & Watkins LLP, San Francisco, California; J. Scott Ballenger and Roman Martinez, Latham & Watkins LLP, Washington, D.C., for Defendant-Appellee.

Author of Opinion: Judge Milan D. Smith, Jr.

Author of Dissent: Judge Wallace

Case Alert Circuit Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 09/15/2015 03:37 PM     9th Circuit     Comments (0)  

  Ninth Circuit: Velazquez v. City of Long Beach
Headline: 9th Circuit reverses JMOL which held Long Beach police did not use excessive force or conduct an unlawful arrest.

Areas of Law: Federal Civil Procedure, Criminal Procedure

Issues Presented: Whether the district court erred in granting judgment as a matter of law on plaintiff's Section 1983 Fourth Amendment unlawful arrest claim?
Whether the decision on the judgment as a matter of law fatally infected the jury's verdict on plaintiffs excessive force claims?

Brief Summary: The panel held that the district court erred in granting judgment as a matter of law on plaintiffs Section 1983 Fourth Amendment unlawful arrest claim. The panel decided the jury was improperly influenced as a result of the district courts ruling on the judgment as a matter of law. Furthermore the panel held that the district court erred in granting the City's judgment as a matter of law on the claims against them. Lastly, the panel held that the district court erred in its failure to grant supplemental jurisdiction over the plaintiffs state law claims.

In coming it its conclusions in the above mention holdings, the panel relied on the fact that the district court improperly implemented Rule 50(a) judgment as a matter of law procedurally. When the district court chose to credit the defense witnesses and discredit the plaintiffs witnesses and refused to draw reasonable inferences in favor of the plaintiff which is typically a jury decision. Since, the district court failed to allow the jury the opportunity to make that decision the panel held the district court abused its discretion.

Extended Summary: This case arises out of a series of events that are in dispute between the parties. Plaintiff was arrested in front of his home in Long Beach California for resisting arrest. Plaintiff contends that he was unlawfully arrested and subjected to excessive force. On October 24, 2009 plaintiff was celebrating his birthday. He began drinking alcohol around lunch time until the evening when Long Beach police officers responded to two calls at the residence for disturbing the peace. There are two versions of the events that transpired: the Police version and the plaintiff's witnesses version.

The officers claimed plaintiff walked outside of the house still drinking. According to police, plaintiff was so intoxicated that he was unable to stand without grasping their squad car, and when the officer told the plaintiff and his friends to go inside, plaintiff said "yeah sure," while sarcastically shaking his head. Because plaintiffs menacing remark insulted the officer, he was placed under arrest where plaintiff told the officer to "fuck off." The officer then claims plaintiff failed to comply with his verbal commands, which resulted in the officer using a series of tactical maneuvers to get plaintiff to the ground. The officer contends plaintiff continued resisting arrest so he was forced to strike plaintiff with his baton - 11 times.

Plaintiff's witness tell a different version. According to his witness, plaintiff was not drinking outside. When they saw the police, plaintiff's cousin told the officer "don't worry, we're leaving officer" and then plaintiff asked the officers "what's up?" When police heard plaintiffs question, they immediately stopped the car and reversed back to where plaintiff and his friends were located. The officer inquired about what was said, then "speed walked" toward plaintiff and said, " I'm tired of people calling because of you motherfuckers." Witnesses contend that no verbal commands were issued; the other officer testified that he did not hear any commands as well. Next the officer takes plaintiff to the ground and continues to beat him up while never issuing any verbal commands.

Before trial, each side filed several motions in limine. The judge decided to rule on the motions at trial and the district court granted the motion to exclude the evidence of prior officer complaints, discipline and internal affairs history. Ultimately the district court grants the City's rule 50 judgment as a matter of law request and dismissed plaintiffs state law claims, only allowing the jury to hear the excessive use of force claim.

In plaintiffs unlawful arrest claim, the district court ruled that a reasonable jury could not have found that the officer lacked probable cause to arrest plaintiff for resisting a police officer. The panel held that the district court erred in its decision and relied on the plaintiff having a right to verbally question the officer and that the district court discredited the plaintiffs argument of a possible motive for the officers actions. Additionally, the district court chose to credit the defense witness over the plaintiff's even though the evidence was far from one sided. Simply put, it should have been left to the jury to decide.

Since the panel determined the district court erred in granting defendants judgment as a matter of law, the panel considered how this affected plaintiffs excessive force claim and ultimately held it fatally infected the jury's verdict as to excessive force. The court relied on the Graham factors and concluded that based on all the improperly excluded evidence, that the jury verdict must be reversed.

The panel held that the district court erred in granting the City's motion for judgment as a matter of law in their liability claims. The panel relied on the plaintiff having alleged valid grounds for liability under this cause of action, but the courts granting of a motion in limine for the defense prevented this evidence from being heard. Since it was never presented, the incorrect ruling on the evidence resulted in the judge erroneously entering a judgment as a matter of law for the defense.

Lastly, the panel held that the district court should not have dismissed plaintiffs state law claims. The district court dismissed them based on jury confusion. The panel overruled that decision relying on the presumption the jury's follows instructions, and that properly read instructions should not confuse the jury. Ultimately the Ninth Circuit held the district court abused its discretion in refusing to exercise supplemental jurisdiction.

To read full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/12-56933.pdf


Panel: Kim Mclane Wardlaw and Marsha S. Berzon, Circuit Judges and William E. Smith, District Judge

Date of Issued Opinion: July 15, 2015

Docket Number: 2:11-cv-00120-R-JEM

Decided: Reversed and Remanded to vacate the district court ruling to grant defendants JMOL motion.

Case Alert Author:
Robert J. Dagmy

Counsel:
Petitioner - Mitchell Keiter.
Respondent - Howard D. Russell (argued) , Deputy City Attorney: Charles Parkin, City Attorney Long Beach, California.

Author of Opinion: Judge Berzon

Case Alert Supervisor:
Professor Ryan T. Williams

    Posted By: Ryan Williams @ 09/15/2015 03:32 PM     9th Circuit     Comments (0)  

June 9, 2015
  Santa Monica Nativity Scenes Committee v. City of Santa Monica - Ninth Circuit
Headline: City's decision to ban all "unattended displays," including the decades-old practice of exhibiting nativity scenes during the month of December, in a public park is not unconstitutional.

Area of Law: First Amendment Free Speech Clause, Heckler's Veto; First Amendment Establishment Clause

Issue Presented: Does a City violate the Free Speech and Establishment Clause of the First Amendment when it opens up a public forum for religious and non-religious speech in the form of an unattended display, then subsequently prohibits all unattended display speech.

Brief Summary: It had been a tradition in the City of Santa Monica to open up the renowned Palisades Park every December for the Santa Monica Nativity Scene Committee to erect biblical displays that told the story of Christmas. In 2003, the City enacted the "Winter Display" ordinance which allowed all members of the public to construct unattended displays in Palisades Park. In 2011, however, applications for Winter Display space surged when a number of atheists who opposed the placement of religious displays in Palisades Park applied for Winter Display space in what the Committee alleged was a coordinated attempt to keep the space away from the Committee and other religious groups. In June 2012, the City repealed the "Winter Display" ordinance in response to the City Attorney's recommendation that eliminating the Winter Display [ordinance] would "serve the purpose[s] of resolving the controversy, eliminating legal risks, conserving the staff time and resources necessary to operate a constitutionally valid regulatory system, conforming usage of Palisades Park to the long standing, City-wide standard which prohibits unattended displays in parks, and protecting the views of the park and ocean."

The Committee challenged the City's decision to repeal the "Winter Display" ordinance claiming that, under the Free Speech Clause, the repeal should be considered content based pursuant to the "heckler's veto" and that the repeal constituted a violation of the Establishment Clause. The court rejected both claims because the City's repeal of the ordinance did not silence particular speech or a particular speaker, but rather was a generally applicable regulation meant to balance competing speech rights, and was narrowly tailored to serve significant government interests to avoid the increased costs of maintaining and regulating the controversial annual event and to preserve the aesthetic qualities of the park.

Significance: There is no First Amendment Free Speech violation when a public entity enacts a generally applicable ordinance that does not single out any particular form of speech but prohibits all speech in the form of an unattended display in a traditional public forum like a public park. A public entity does not violate the First Amendment establishment clause when it prohibits the construction of a nativity scene for secular purposes like improving the aesthetics of a public park and alleviating administrative burdens on the entity.

Extended Summary: Every year since 1955, Santa Monica locals erected biblical displays during the month of December in Palisades Park. Managing this yearly event was a significant undertaking and in 1983, the Santa Monica Nativity Scenes Committee (Committee) was organized to manage the annual event.

In 1994, Santa Monica enacted a city ordinance that prohibited the construction of unattended displays in the park. Every year during December, however, the City simply overlooked the fact that the Committee continued to erect a nativity scene in Palisades Park. In 2003, the City Council carved out a "Winter Display" exception to the general prohibition of unattended displays which authorized all members of the community, including the Committee, to erect unattended displays in Palisades Park in the month of December on a first-come first-serve basis.

The "Winter Display" system subsequently adopted a lottery system due the increased number of religious and non-religious persons who wanted display space in the Park. In 2011, a number of atheists who opposed religious displays in public succeeded in obtaining a large percentage of the available Winter Display space. Additionally, members of the public held protests near the Committee's nativity scenes which drew unwanted attention and required increased regulation. These protests became the basis of the Committee's "heckler's veto" argument. The flood of lottery applicants also proved to be an onerous burden on the City due to the costly and time-consuming nature of managing the lottery and event. As a result, the City of Santa Monica elected to repeal the Winter Display exception and keep Palisades Park free from all unattended displays. The ordinance that repealed the Winter Display exception prevented the Committee from continuing to erect nativity scenes.

The Committee challenged the City's repeal of the Winter Display exception contending that the repeal violated the Committee's free speech right because the repeal was not content neutral under the "heckler's veto" doctrine. The Committee also alleged the City had conveyed a message of disapproval of the Christian Religion which also violates the Establishment Clause.

The District court granted the City's 12(b)(6) motion. On appeal by the Committee, the Circuit court reviewed the lower courts ruling under a de novo standard of review.

In a public forum, like Palisades Park, the government's ability to regulate speech is significantly restricted. Content-neutral time, place, and manner regulations are permitted in public forums so long as the regulations are "narrowly tailored to serve a significant governmental interest and leave open ample alternative channels of communications." The panel noted that the Committee did not dispute that the City's repeal of the "Winter Display" exception is facially content-neutral because it bans all unattended displays and does not discriminate against particular displays based on their content.

The Committee did contend, however, that the repeal of the Winter Display was a "heckler's veto" because the City Council enacted it in response to the atheists' objections to the Committee's nativity scenes. The "heckler's-veto" doctrine holds that "a regulation of speech is to be deemed content based when 'listeners react to speech based on its content and the government then ratifies that reaction by restricting the speech in response to the listeners' objections.'" The doctrine essentially prohibits a government regulation based on the "secondary effect" of a certain form of speech.

The Ninth Circuit panel rejected the "heckler's veto" claim. The panel instead found that the City adopted a generally applicable regulation for the purpose of balancing competing speech rights rather than to suppress a particular message because of the public's reaction to it. The City did not repeal the ordinance to silence protests that resulted from the nativity scenes; the ordinance was abandoned as a reaction to the many problems that arose such as the expensive and time consuming regulation by the City of the annual event.

The panel also held the Committee failed to present evidence of an Establishment Clause violation. Under the Lemon Test, a regulation violates the Establishment Clause if it (1) lacks a secular legislative purpose, (2) its primary effect is to advance or inhibit religion, or (3) fosters excessive government entanglement. The City had a secular purpose for repealing the statute because of increased time and effort required to maintain the Winter Display. The primary effect of the repeal was not to inhibit Christianity but, rather, to maintain the aesthetics of Palisades Park and to alleviate administrative burdens on the City. The Committee did not address the third prong of the test.

To read the full opinion, please visit:http://cdn.ca9.uscourts.gov/da...15/04/30/13-55011.pdf

Panel: Michael J. Melloy, Jay S. Bybee, and Sandra S. Ikuta, Circuit Judges.

Date of Issued Opinion: April 30, 2015

Docket Number: 13-55011

Decided: Affirmed the decision of the District Court for the Central District

Case Alert Author: Brian D. Shapiro

Counsel: William J. Becker (argued), The Becker Law Firm, Los Angeles California; Michael J. Peffer, Pacific Justice Institute, Santa Ana, California, for Plaintiff-Appellant.

Yibin Shen (argued), Deputy City Attorney, Jeanette Schechtner, Chief Deputy City Attorney, Barry A. Rosenbaum, Senior Land Use Attorney, Heidi Von Tongeln, Deputy City Attorney, Santa Monica, California, for Defendant-Appellee.

Author of Opinion: Judge Bybee

Case Alert Circuit Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 06/09/2015 05:08 PM     9th Circuit     Comments (0)  

  Ashbey v. Archstone Property Management, Inc. - Ninth Circuit
Headline: Ninth Circuit panel reverses district court's denial of defendant employer's motion to compel arbitration, holding that plaintiff employee knowingly waived his right to a judicial forum for his claim under Title VII of the Federal Civil Rights Act of 1964.

Area of Law: Civil Procedure; Arbitration; Employment Law

Issue Presented: Whether employee knowingly waived his right to a judicial forum for his Title VII Civil Rights claim and equivalent state-law claims by signing an acknowledgement of receipt of the employer's company policy manual which explicitly notified the employee that the manual contained a dispute resolution policy explaining the employer's arbitration policy, and the employee expressly agreed to adhere to the manual and the dispute resolution policy.

Brief Summary: Michael Ashbey was employed at Archstone Property Management, Inc. (Archstone) from December 1996 until he was fired in November 2010. In 2009 Ashbey signed an acknowledgement of receipt of the Company Policy Manual which contained, in two places. an acknowledgement of the company's dispute resolution policy (DRP) explaining the company's arbitration policy. The section containing the dispute resolution policy specifically identified the areas the DRP was intended to be applicable to between the employee and the employer. In 2011, Ashbey filed suit against Archstone claiming retaliatory conduct and wrongful termination. Archstone removed the case to federal district court and then filed a motion to compel arbitration pursuant to the Manual. The federal district court denied the motion and Archstone appealed. On appeal, the Ninth Circuit panel noted that Title VII of the Federal Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA) "limit[s] the enforcement of arbitration agreements with respect to claims arising under those statutes" and that, before 1991, "Title VII had been interpreted to prohibit any waiver of its statutory remedies in favor of arbitration," but that Congress amended Title VII, in 1991, to encourage the use of alternative means of dispute resolution, including arbitration, "where appropriate." The panel then noted that "the phrase 'where appropriate' signals a plaintiff cannot waive his right to a judicial forum for Title VII claims unless he does so 'knowingly.'" The panel determined that the employee knowingly waived his right to a judicial forum because the acknowledgment he signed "explicitly notified Ashbey the Manual contained a Dispute Resolution Policy, and it did so in two places" and that the employee "expressly agreed "'to adhere' to the Manual and the Dispute Resolution Policy." Accordingly, the panel reversed the lower court and remanded with instructions to compel arbitration.

Significance: An employee may waive the right to a judicial forum where the employee signs an acknowledgement of the company policy that specifically contains a requirement to arbitrate and the arbitration agreement specifically encompasses the area of dispute.

Extended Summary: Michael Ashbey was employed at Archstone Property Management, Inc. (Archstone) from December 1996 until he was fired in November 2010. In 2009 Ashbey signed an acknowledgement of receipt of the Company Policy Manual (Manual) which contained in two places an acknowledgement of the company's dispute resolution policy (DRP). The DRP explicitly stated that it "applies, without limitation, to disputes arising out of the employment relationship or the termination thereof including, without limitation, disputes over . . . harassment and claims arising under the . . . Civil Rights Act of 1964 . . . and all other state statutory and common law claims."

In 2011 Ashbey filed suit against Archstone alleging that, in 2006, Archstone employee Alex Winborn began harassing Ashbey's wife, who also worked for Archstone. In June 2010, shortly after Ashbey's wife complained of Winborn's unlawful conduct, Archstone terminated her employment. Ashbey's complaint also further alleged that, following the termination of his wife's employment, Archstone engaged in retaliatory conduct towards him by first altering his employment conditions and then by wrongfully terminating his employment.

Archstone removed the case to federal district court under diversity and federal question jurisdiction and then filed a motion to compel arbitration pursuant to the Manual. The federal district court denied the motion and Archstone appealed.

The Ninth Circuit panel first addressed the Federal Arbitration Act (FAA) which provides "[a] written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. However, the scope of the FAA was narrowed by Title VII and the Americans with Disabilities Act because the two statutes limit enforcement of arbitration agreements that fall under those statutes.

The panel then addressed effect of the 1991 Congressional amendment to Title VII finding that the amendment was a "polite bow to alternative dispute resolution" but only where "appropriate." The Ninth Circuit previously interpreted the phrase "where appropriate" to mean that "a plaintiff cannot waive his right to a judicial forum for Title VII claims unless he does so 'knowingly'." Therefore, a Title VII plaintiff can be forced to arbitrate his claims where he has "knowingly" agreed to submit such disputes to arbitration. Prudential Ins. Co. of Am. v. Lai, 42 F.3d 1299, 1305 (9th Cir. 1994).

The panel distinguished the instant case from Nelson v. Cyprus Bagdad Copper Corp., 119 F.3d 756, 761 (8th Cir. 1997) and Kummetz v. Tech Mold, Inc., 152 F.3d 1153 (9th Cir. 1998). In Nelson the Ninth Circuit reversed the district court's granting of a motion for summary judgment for the employer holding the acknowledgment form did not notify "Nelson either that the Handbook contained an arbitration clause or that his acceptance of the Handbook constituted a waiver of his right to a judicial forum in which to resolve claims covered by the ADA." 119 F.3d at 761. Similarly, in Kummetz the Ninth Circuit held that the acknowledgment "did not notify Kummetz that the Booklet contained an arbitration provision, nor did it mention or imply anything about employment-related disputes, civil rights statutes, or waivers of remedies." 152 F.3d at 1154.

In both Nelson and Kummetz, the Ninth Circuit found there was not enough information in the acknowledgment signed by the employee to allow the employee to make a "knowing" agreement.

In contrast to the acknowledgments in Nelson and Kummetz, here the panel found that that Ashbey knowingly waived his right to a judicial forum because the acknowledgment he signed "explicitly notified Ashbey the Manual contained a Dispute Resolution Policy, and it did so in two places" and that the employee "expressly agreed "'to adhere' to the Manual and the Dispute Resolution Policy." As such, the panel reversed the decision by the district court and remanded with instructions to compel arbitration.

For the full opinion:http://cdn.ca9.uscourts.gov/da...15/05/12/12-55912.pdf

Panel: Jay S. Bybee, Carlos T. Bea, and Morgan Christen, Circuit Judges

Date of Issued Opinion: May 12, 2015

Docket Number: 12-55912

Decided: Reversed and Remanded.

Case Alert Author:Lawrence J. Hudack

Counsel:
Henry D. Lederman (argued), Littler Mendelson, P.C., Walnut Creek, California; Connie L. Michaels and Sarah E. Ross, Littler Mendelson, P.C., Los Angeles, California, for Defendant-Appellant.

Avi Burkwitz (argued) and Diana Ratcliff, Peterson Bradford Burkwitz, Burbank, California, for Plaintiff-Appellee.

Susan R. Oxford (argued), Attorney, P. David Lopez, General Counsel, Carolyn L. Wheeler, Acting Associate General Counsel, and Lorraine C. Davis, Assistant General Counsel, United States Equal Employment Opportunity Commission, Washington, D.C., for Amicus Curiae Equal Employment Opportunity Commission.

Author of Opinion: Carlos T. Bea

Case Alert Circuit Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 06/09/2015 05:04 PM     9th Circuit     Comments (0)  

  County of Orange v. United States Dist. Court - Ninth Circuit
Headline: Erie's federalism principle requires the federal court, sitting in diversity in a breach of contract action, to import, as the federal rule, California state law governing contractual jury trial waivers, where California state law is even more protective than federal law of the jury trial right.

Areas of Law: Civil, Federal Civil Procedure; Erie issue

Issues Presented: What law should federal courts sitting in diversity apply to determine the validity of a contractual jury trial waiver clause when state law is more protective of the right to a jury trial than federal law?

Brief Summary: Preliminarily, the panel held that the five Bauman factors to apply for a writ of mandamus do not apply to extraordinary circumstances. Here the panel held that denial of a constitutional right to a jury trial granted by the 7th Amendment is an extraordinary circumstance.

Addressing the vertical choice of law issue, the panel, finding that no Federal Rule of Civil Procedure or federal statute governs pre-dispute jury trial waivers, applied the "relatively unguided" Erie analysis to determine that, although the law governing pre-dispute jury trial waivers is "procedural," and therefore federal law governs their validity, Erie's federalism principle requires federal courts sitting in diversity to import the more protective state law where the federal "knowing and voluntary" standard is merely a constitutional minimum federal courts use to protect litigants' 7th Amendment jury trial right.

Extended Summary: This case arises out of a breach of contract dispute between the County of Orange (the County) and Real Party in Interest Tata America International Corporation and its international affiliate (collectively, "Tata"). Tata was hired by the County to develop and implement a computerized property tax system. The contract contained a California choice of law clause and an unambiguous waiver of jury trial clause. The County filed for breach of contract under California law and included a demand for a jury trial in their complaint.

The district court granted Tata's motion to strike the jury trial request ruling that, under Erie, the Seventh Amendment right to a jury trial is "procedural" and, therefore, the federal "knowing and voluntary" standard is applicable to determine the enforceability of the contractual pre-dispute waiver clause.

Finding that no Federal Rule of Civil Procedure or federal statute governs the validity of pre-dispute jury trial waivers, the panel proceeded to apply the "relatively unguided" Erie analysis to determine whether the rules at issue are "substantive" or "procedural." Applying this analysis, the panel determined that the issue whether a party waived its jury trial right is "procedural" and, therefore, federal procedural law is applicable. The panel, applying the Supreme Court's "Erie" analysis in Byrd v. Blue Ridge Rural Electric Cooperative, Inc., 356 U.S. 525 (1958), also determined, first, that "California's rule that pre-dispute jury trial waivers are unenforceable is not a rule that creates 'rights and obligations' for the parties to a contract * * * nor is it a rule that dictates the substance of a potential award" but is, rather, a rule "which allocates tasks between a judge and a jury" and, therefore, "describes 'merely a form and mode of enforcing' the law" and, second, that application of the federal rule is not "outcome determinative."

However, the panel determined that California's rule is "substantive" as it is a state rule of contract interpretation and construction, which is substantive under Erie. The panel further ruled that, even if California's rule on pre-dispute jury trial waivers were to be viewed as primarily "procedural," that California rule "embodies the state's substantive interest in preserving the 'right to a jury trial in the strongest possible terms.'" Consequently, the panel then proceeded to apply the Supreme Court's Erie approach, in Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996), by asking whether the federal court can "give effect to the substantive thrust of [California's rule] without untoward alteration of the federal scheme for the trial and decision of civil cases[?]'"

While holding that "federal procedural law governs the validity of a pre-dispute jury trial waiver in federal court," the panel also held that "[t]he federal 'knowing and voluntary' standard adopted by the district court is not a generally applicable federal rule, but rather a federal constitutional minimum" that is inapplicable "where, as here, state law is more protective than federal law of federal constitutional rights." Accordingly, to accommodate, in Gasperini fashion, California's substantive interest in applying its more protective rule to the jury trial waiver issue, the panel held that "Erie's federalism principle directs us to import state law as the federal rule rather than construct a new federal common law rule" and concluded that "district courts sitting in diversity must apply California's rule on pre-dispute jury trial waivers to contracts governed by California law."

To read full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...15/04/16/14-72343.pdf

Panel: Ronal M. Gould and Richard C. Tallman, Circuit Judges, and Edward R. Korman, Senior District Judge.

Date Of Issued Opinion: April 16, 2015

Docket Number: 14-72343

Decided: Reversed

Case Alert Author: Robert J. Dagmy

Counsel: Petitioner - Benjamin Parker Broderick (argued), Allan L. Schare, Alexander George Brizolis, and Todd Thodora, Theodora Oringer P.C
Respondent - William A. Escobar (argued), Kelley Drey and Warren LLP, New York, New York; Alison S. Brehm and Kenneth David Kronstadt.

Author of Opinion: Judge Tallman

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 06/09/2015 05:02 PM     9th Circuit     Comments (0)  

  Center for Competitive Politics v. Harris - Ninth Circuit
Headline: Ninth circuit panel affirms district court's denial of a nonprofit corporation's motion for preliminary injunction to prevent the disclosure of the names and addresses of the organization's contributors to the CA Attorney General on First Amendment freedom of association grounds.

Area of Law: Remedies, Preliminary Injunctions

Issues Presented: Whether a charitable organization is entitled to a preliminary injunction to prevent the CA Attorney General from requiring it to disclose the names and contributions of the organization's "significant donors" on an unredacted copy of the organization's IRS Form 990 Schedule B as a condition of soliciting funds in CA?

Brief Summary: Plaintiff, a charitable organization, sought a preliminary injunction to prevent the California Attorney General from requiring disclosure of the names and addresses of plaintiff's contributors. IRS Form 990 Schedule B contains this information and all charitable organizations have to provide this form to the state's Attorney General to solicit tax-deductible contributions in California.

The panel rejected plaintiff's arguments that the state's disclosure requirement violated plaintiff's First Amendment right of free association and, in the alternative, that this requirement was preempted by federal law. The panel held that plaintiff failed to show that the disclosure requirement was, in and of itself, injurious to plaintiff or any actual burden on its First Amendment rights or that of its supporters. The panel also rejected plaintiff's contention that Congress expressly preempted state agencies from requiring the information or that they intended to do so. Plaintiff also failed to show their first amendment rights had been infringed. The panel affirmed the district court's denial of the Motion for a preliminary injunction.

Extended Summary: Plaintiff Center for Competitive Politics ("CCP") sought a preliminary injunction in its action against Kamala Harris in her official capacity as Attorney General of the State of California. CCP attempted to enjoin the Attorney General from requiring disclosure of an unredacted version of the Internal Revenue Service Form 990 Schedule B ("Schedule B") which lists the names and addresses of the organization's contributors. Charitable organizations are required to provide this form to the state Attorney General's Office in order to solicit tax-deductible contributions in California.

CCP argued that the Attorney General's demand for Schedule B violates its First Amendment right to freedom of association and, also, is preempted by federal law and that a preliminary injunction is necessary to prevent the disclosure of its contributors. A party that seeks a preliminary injunction must prove (1) that they are likely to succeed on the merits, (2) they will suffer irreparable harm, (3) the balance of equities tips in their favor, (4) and the public interest favors an injunction.

The panel rejected CCP's contention that the state's disclosure requirement infringes the organization's freedom of association because such disclosure would deter charitable contributions which are the "lifeblood of organizations engaged in the public debate." The panel applied "exacting scrutiny in the context of First Amendment challenges to disclosure requirements, Citizens United v. FEC, 558 U.S. 310, 366 (2010). Exacting scrutiny "encompasses a balancing test under which, "n order for a government action to survive exacting scrutiny, 'the strength of the governmental interest must reflect the seriousness of the actual burden on First Amendment rights.'" The panel ruled that "CCP has not demonstrated any 'actual burden' . . . on its supporters' First Amendment rights," noting that "CCP does not claim and produces no evidence to suggest that their significant donors would experience threats, harassment, or other potentially chilling conduct as a result of the Attorney General's disclosure requirement." The panel further noted that disclosure of CCP's donors would not be "public" because the Attorney General keeps Form 990 Schedule B confidential. The panel rejected CCP's argument "that the Attorney General's systems for preserving confidentiality are not secure, and that its significant donors' names might be inadvertently accessed or released," noting that "such arguments are speculative, and do not constitute evidence that would support CCP's claim that disclosing its donors to the Attorney General for her confidential use would chill its donors' participation." On the other side of the balancing test, the panel accepted the Attorney General's justifications for employing a disclosure requirement instead of issuing subpoenas ("that having immediate access to Form 990 Schedule B increases her investigative efficiency, and that reviewing significant donor information can flag suspicious activity") and concluded that "the disclosure requirement bears a "substantial relation" to a "sufficiently important" government interest," citing Citizens United.

The panel also rejected CCP's contention that federal law preempts state law through express, conflict, and field preemption. CCP's argument relies on federal laws preventing public inspection of the names or addresses of an organization's contributors or the release of the information to state agencies. Express preemption requires Congress to explicitly provide the extent to which the federal provision preempts state law. There is nothing in the text of the Internal Revenue Codes at issue that addresses whether a state official can require an organization to disclose the information, so express preemption must fail. The legislative intent of Congress in enacting the federal laws cited by CCP was to curtail loose practices by the IRS, not to regulate state agencies. CCP, therefore, cannot prove that they are likely to succeed based on preemption.

The panel affirmed the district court's denial of CCP's motion for a preliminary injunction, holding that CCP has not shown a likelihood of success on the merits and that it is not likely that CCP will suffer irreparable harm from enforcement of the disclosure requirement.


To read the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...15/05/01/14-15978.pdf

Argument Date: December 8, 2014

Date of Issued Opinion: May 1, 2015

Docket Number: 2:14-cv-00636-MCE-DAD

Decided: Affirmed

Case Alert Author: Matthew J. Gustin

Counsel:
For Center for Competitive Politics, Plaintiff: Allen Dickerson, PHV, Lead Attorney, PRO HAC VICE, Center for Competitive Politics, Alexandria, VA; Alan Gura, Gura & Possessky PLLC, Alexandria, VA.

For Kamala Harris, Defendant: Alexandra Robert Gordon, LEAD ATTORNEY, CA. Dept. of Justice, Office of the Attorney General, San Francisco, CA.

Author of Opinion: Morrison C. England, JR., Chief United States District Judge

Case Alert Circuit Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 06/09/2015 05:01 PM     9th Circuit     Comments (0)  

May 7, 2015
  Munns v. Kerry - Ninth Circuit
Headline: The Ninth Circuit Holds Plaintiffs Lacked Standing To Challenge The State Department's Policies Governing The Handling Of Kidnappings and Security Contractors In Iraq.

Areas of Law: Constitutional Law

Issues Presented: Do family members of kidnapped and murdered contractors in Iraq, and a former contractor in Iraq, have standing to challenge U.S. Government policies that regulated contractors in Iraq and prevented the families of kidnapping victims from communication aimed at saving them?

Brief Summary:
This case addresses standing to bring a claim against the U.S. government in district court. Family members of three Americans who were kidnapped and murdered while working as contractors in Iraq, as well as a former contractor who seeks to return to Iraq, sued to enjoin policies governing (1) supervision of private contractors and (2) the response to kidnappings in Iraq.

The first policy challenged was CPA Order 17, which allegedly gave "blanket immunity" to contractors from prosecution for their actions in Iraq. It was argued that Order 17 exceeded the executive branch's constitutional authority. The Ninth Circuit found that the plaintiffs lacked sufficient continuing injury to support standing for injunctive relief. The injury asserted was that Order 17 led to lawless behavior which may have been the motivation behind the kidnappings, and plaintiff feared that this would happen to him if he went back to Iraq to work again. The Ninth Circuit said this was too speculative and attenuated in affirming the dismissal for lack of standing.

The other policy challenged was that of the State Department, which prevented the family members from negotiating for the release of the victims and passing out flyers inquiring if anybody had any information related to the kidnappings. Plaintiffs alleged this policy violated their First Amendment rights. Like the first claim, the Ninth Circuit held these claims lacked continuing personal injury because plaintiffs' family members were already dead, and it could not be shown how these policies would adversely affect plaintiffs in the future.

Extended Summary:
Joshua Munns, John Young and John Cote were kidnapped and brutally murdered in 2008 while providing contract security services during the United States military occupation of Iraq. Family members of the victims alleged they were prevented from negotiating their release. Specifically, the State Department allegedly told them they could not meet a person who had information about the victims and their whereabouts. The State Department also allegedly blocked distribution of 90,000 flyers that offered a reward for information. The family members claimed this violated their First Amendment rights to free speech and free assembly, and sought injunctive relief from the government policies.

Gary Bjorlin was formerly employed as a contractor in Iraq and wishes to return, but feared he would be kidnapped and murdered because his family would not be able to aid his relief. He joined the victims' family members' First Amendment claims, and also asserted that Coalition Provisional Authority (CPA) Order 17 exceeded the executive branch's constitutional authority. This order was in place during the occupation of Iraq, and allegedly granted "blanket immunity" to contractors from U.S. prosecution for their actions in Iraq. It was also alleged that this policy led to lawless behavior by some security contractors and may have motivated the kidnappings. He sought an injunction preventing the government from implementing CPA Order 17 or a similar policy in the future.

The plaintiffs appealed from a district court judgment that dismissed their claims due to lack of standing and because they were nonjusticiable political questions. The dismissal with prejudice was reviewed de novo by the Ninth Circuit. The Court agreed that the plaintiffs lacked Article III standing to seek declaratory and injunctive relief, and did not address the political question issue.

The main issue was whether the plaintiffs had alleged an "injury in fact" that was sufficiently "concrete and particularized." The threat to Bjorlin from CPA Order 17 was too speculative to constitute an injury in fact. Even if it was presumed the government order actually caused lawless behavior and motivated the kidnappings, the order was no longer in effect. For the injury to occur Bjorlin would have to seek employment, be hired and sent to Iraq again, and CPA Order 17 or a similar order would have to be reinstated. The alleged injury was far too attenuated to be considered impending or to present a substantial risk of its occurrence.

Bjorlin's risk of injury was no less speculative than that of the plaintiff in City of Los Angeles v. Lyons, which did not satisfy standing for injunctive relief. 461 U.S. 95, 108 (1983) (Lyons was subject to an illegal police chokehold and feared he would be stopped again and subject to the same chokehold). Therefore Bjorlin's claims regarding CPA Order 17 were properly dismissed for lack of standing. Bjorlin's claims regarding the hostage response policies were based on the same type of injury, and were properly dismissed for the same reasons.

The family members did not allege that they are likely to be reinjured by the hostage response policies, only that the policies should be declared unlawful and prevented from being implemented in the future. Although they might have sought further communication with Iraq to determine who killed the victims, this was too speculative, especially because it was uncertain the government would apply the same policies. The Ninth Circuit affirmed the dismissal of the family members' claims for lack of standing.

Judge Reinhardt wrote a concurrence, which stated in part that the Ninth Circuit in no way opined on the proper policies for the government to follow regarding contractors in Iraq or terrorism.

To read the full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...015/03/20/12-15969.pdf

Panel: Reinhardt, Fisher, and Berzon

Argument Date:
September 11, 2014

Date of Issued Opinion: March 20, 2015

Docket Number: No. 12-15969

Decided: Affirmed

Case Alert Author: Matthew J. Gustin

Counsel:
William W. Palmer of the Law Offices of William W. Palmer, Sacramento, California for Plaintiffs - Appellants.

H. Thomas Byron, III, Michael Raab, Stuart F. Delery, Assistant Attorney General, Joyce R. Branda, Acting Assistant Attorney General, and Benjamin B. Wagner, United States Attorney, United States Department of Justice, Civil Division, Appellate Staff, Washington D.C., for Defendants - Appellees.

Author of Opinion: Judge Fisher

Circuit: Ninth

Case Alert Circuit Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 05/07/2015 11:42 PM     9th Circuit     Comments (0)  

  John Doe v. Robert L. Ayers, Jr., Warden, of California State Prison at San Quentin
Headline: Ninth Circuit Vacates Defendant's Capital Sentence After His Counsel Failed To Present Available Mitigating Evidence During The Penalty Phase Of Trial

Area of Law: Criminal Procedure, Capital Punishment, Antiterrorism and Effective Death Penalty Act (AEDPA)

Issue Presented:
Under pre-AEDPA standard of review, can a criminal defendant who was sentenced to death have his sentence vacated when his appointed counsel failed to present available mitigating evidence such as past sexual abuse, mental illness, neglect and illness during childhood, and substance abuse.

Brief Summary:
Defendant was convicted of felony-murder. At a separate sentencing proceeding, the jury returned a sentence of death. Defendant challenged his sentence prior to the passage of the Antiterrorism and Effective Death Penalty Act (AEDPA) claiming his appointed counsel provided ineffective assistance of counsel by failing to investigate and present mitigating evidence at his sentencing phase of trial. To reverse his sentence, defendant must prove his appointed counsel performed deficiently, and as a result, defendant was prejudiced. After his conviction, defendant hired habeas counsel who thoroughly investigated the case. The investigation revealed multiple levels of mitigating evidence that was never presented at the defendants sentencing phase. The Ninth Circuit panel granted defendants petition to vacate his capital punishment due to the appointed counsel failure to effectively investigate and present mitigating evidence at the penalty phase of trial.

Significance:
Under a pre-AEDPA standard of review, a defendant may receive a "second bite of the apple" at the sentencing phase of trial if he can prove his government appointed counsel failed to meet constitutional requirements of effective counsel.

Extended Summary:
In 1984, defendant was charged with one count of murder and two counts burglarizing a home after a female body was found naked from the waist down. The women was murdered having been beaten, stabbed and strangled. The court appointed counsel to represent defendant in his murder trial. The appointed counsel had never worked on a death penalty case nor had he ever observed the death penalty phase of trial. After pleading not guilty, the jury returned a verdict finding defendant guilty of both the murder and burglary charges and he was sentenced to death.

In California, capital trials consist of two phases: the guilt phase and the sentencing phase. During the sentencing phase of trial, "the jury weighs aggravating and mitigating evidence to determine whether the death penalty is appropriate." Defendant appealed his death sentence claiming his appointed counsel failed to provide effective assistance of counsel. Using a pre-AEDPA standard of review, defendant must prove he was provided counsel that fell below the objective standard of reasonableness and that he was prejudiced as a result. He claimed his appointed counsel failed to present relevant mitigating evidence that was readily available if competent investigation was performed.

The California Supreme Court denied the defendants direct appeal, his petition for certiorari, and multiple habeas petitions. Defendant then filed a habeas petition in federal court challenging the effectiveness of his counsel at both phases of trial. While the district court rejected his guilt phase challenge, the court did find defendant had received ineffective assistance of counsel at the penalty phase of his trial. However, the district court concluded defendant was not prejudiced as a result of the deficient representation. The Ninth Circuit agreed defendant had received ineffective counsel, and disagreed with the district court by holding defendant was prejudiced as a result. The Ninth Circuit vacated defendants sentence and ordered the federal district court to grant defendants habeas writ.

In determining whether defendant's counsel fell below the objective standard of reasonableness, the Ninth Circuit compared the appointed counsels investigation to the evidence presented by defendant's habeas attorney. The entirety of the sentencing phase comprised just five witnesses whose testimony produced only thirty-five pages of transcript. Of which, defendants mother provided mitigating evidence, but the court stated it was presented in a "bland" and non-compelling manner. Defendant's ex-girlfriend testified that he was compassionate but sometimes angry or crushed. The three other witnesses did not know defendant prior to adulthood, including defendants father whom he had no relationship with prior to the murder charge, defendants aunt who temporarily took him in when he moved to California, and a prison friend who shared bible study with defendant.

Defendant's habeas attorney presented an overwhelming amount of compelling mitigating evidence. The habeas attorney presented prison records which showed defendant was "brutally and repeatedly raped" on several occasions. Evidence showed the rapes occurred during defendants first time in prison while he was just 17. The habeas attorney had a prison guard testify who he saw defendant raped first hand in the back of a garbage truck by a large inmate who was much larger than defendant. Also, a fellow inmate testified that defendant was forced into prostitution for the benefit of another inmate who "owned" defendant. A psychotherapist provided analysis from sessions with defendant where she learned he was raped by a close friend in prison which left him feeling powerless and in constant state of shame.

The psychotherapist also disclosed to the court defendants serious mental illness that arose out of his prison experience and childhood neglect/abuse. The doctor stated defendant provided signs of posttraumatic stress disorder after his first experience in prison. This experience apparently left defendant a "broken man" in major depression that self medicated with drugs and alcohol. The Ninth Circuit was convinced defendant received ineffective counsel after hearing the mitigating evidence presented by defendant's habeas attorney.

The court was unsatisfied with the appointed counsel's the lack of investigation once presented with the findings of the habeas attorney. Appointed counsel did not listen to any available interview tapes nor did he read any transcripts of any interviews with defendant. He read just one interview summary but concluded there was no material evidence for the sentencing phase of trial. There were obvious leads available that defendants appointed counsel did not follow regarding defendants prison files and psychological history. He was satisfied with defendants nine-page prison "rap sheet" that provided basic procedural information and missed all available rape evidence. The appointed attorney only interviewed defendant once. He hired one psychological expert but only asked her to determine whether any mental state defenses could be mounted based on "obvious signs of mental impairment" and nothing more.

The Ninth Circuit held the district court erred in deciding defendant was not prejudiced by his appointed counsel's ineffective counsel. A "but for" standard is used to determine prejudice. The Ninth Circuit determined "but for" appointed counsels unprofessional errors, the result of defendants sentencing phase would have been different. The Ninth Circuit found a substantial probability existed that a different result would have occurred if defendant had received effective counsel.

To read the full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...15/03/31/15-99006.pdf

Panel: Harry Pregerson, Stephen Reinhardt, and Kim McLane Wardlaw, Circuit Judges.

Docket Number: No. 15-99006

Decided: Murder conviction affirmed but capital sentence was vacated and remanded.

Case Alert Author: Brian D. Shapiro

Counsel: John R. Grele (argued), Tiburon, California; and David W. Fermino, Sideman & Bancroft, San Francisco, California, for Petitioner-Appellant.
Barry J. Carlton (argued), Supervising Deputy Attorney General, San Diego, California, for Respondent-Appellee.

Author of Opinion: Judge Stephen Reinhardt

Circuit: Ninth

Case Alert Circuit Supervisor: Ryan T. Williams

    Posted By: Ryan Williams @ 05/07/2015 11:33 PM     9th Circuit     Comments (0)  

March 31, 2015
  Rush v. Sport Chalet, Inc. - Ninth Circuit
Headline: Ninth Circuit panel holds that before district courts dismiss, rather than sever, claims against co-defendants for improper joinder, they must first conduct a "prejudice analysis" to determine whether such a dismissal will prejudice the plaintiff's otherwise viable claims against each co-defendant, including whether new suits will be blocked by the statute of limitations.

Area(s) of Law: The Federal Rules of Civil Procedure: Rule 20(a)(2) Permissive Joinder of Parties, Rule 21 Misjoinder and Nonjoinder of Parties.

Issue Presented: Whether two defendants share the "same transaction [or] occurrence," when they are in a landlord-tenant relationship and, therefore, can be permissibly joined as co-defendants in a lawsuit. Whether it is appropriate for a court to dismiss lawsuits against improperly joined co-defendants, rather than severing the claims and allowing separate suits to proceed, when this will cause prejudice to the plaintiff.

Brief Summary: Plaintiff Sandi Rush sued three stores, Babies "R" Us, Petsmart, and Sport Chalet; as well as their collective landlord, Foothill Ranch LLC; for violations of the Americans with Disabilities Act ("ADA"). Prior to the hearing, one of the stores, Babies "R" Us, settled with Rush, and Rush filed a notice of dismissal as to that defendant..

The district court subsequently issued an order sua sponte that held that the remaining defendants were improperly joined under the Federal Rules of Civil Procedure Rule 20, Permissive Joinder of Parties, as Rush's claims against the landlord and the other stores did not arise out of the same transaction or occurrence or series of transactions or occurrences as her claims against Babies "R" Us. Pursuant to its discretion under Rule 21 (Misjoinder and Nonjoinder of Parties), the district court dismissed all claims against the remaining co-defendants.

Reviewing the district court's misjoinder decision de novo, the panel reversed the district court's holding that the landlord, Foothill Ranch, was properly joined under Rule 20. Reviewing for abuse of discretion the district court's dismissal of the remaining co-defendants under Rule 21, the panel ruled that the district court's dismissal was improper and vacated it's decision to dismiss rather than sever the remaining defendants.

The panel held that, since Foothill Ranch and Babies "R" Us were in a landlord-tenant relationship, this would satisfy the "common transaction or occurrence" requirement under Rule 20. The panel also decided that the district court may have correctly decided that Sports Chalet and Petsmart were misjoined because the plaintiff's injuries injuries at each store are "distinct and independent from one another, and she has not alleged any legal relationship between them." Nevertheless, the panel determined that the court abused its discretion by severing and dismissing plaintiff's claims against them.

In taking this action, the panel adopted the rule many fellow circuits follow. Rather than sever and dismiss, a district court must first conduct a "prejudice analysis" to determine whether a dismissal will harm the plaintiff by, for instance, causing "loss of otherwise timely claims if new suits are blocked by statutes of limitations."

The panel reversed and remanded with instructions that the district court should examine whether allowing two separate severed complaints to proceed would be necessary to avoid prejudice to Rush.

Extended Summary: Plaintiff Sandi Rush qualifies as physically disabled under applicable federal and California Law. Rush alleged she encountered physical barriers at three retail stores; Sport Chalet, Inc., Petsmart, Inc., and Babies "R" Us, which are all located in the same shopping mall, at 26532 Towne Center Drive, in Foothill Ranch, CA. These physical barriers allegedly limited her access to these stores in violation of the Americans with Disabilities Act ("ADA").

Rush filed an ADA complaint against the stores, as well as the landlord of the shopping center, Foothill Ranch, LLC, on May 14 2012.

Rush settled her claims against Babies "R" Us and filed a notice of dismissal under Rule 41(a)(1) on October 3, 2012. Six days later, October 9, 2012, the district court held sua sponte "the various Defendants are improperly joined," as Rush's complaint did not allege her injuries arose "out of the same transaction, occurrence, or series of transactions or occurrences," as required for permissive joinder under Rule 20. Therefore, the district court severed and dismissed without prejudice Rush's claims against the remaining defendants pursuant to its discretion under Rule 21..

The court reviewed de novo the district court's ruling that defendants were improperly joined, and the district court's decision to sever and dismiss Rush's claims against the remaining defendants for abuse of discretion.

The court found that Foothill Ranch, and Babies "R" Us were properly joined. The court reasoned that, under Rule 20, defendants are permissively joined when the claim or claims arise out of the same transaction or occurrence and if there is a question of law or fact common to the defendants. Here, the common transaction or occurrence was the landlord-tenant relationship between Foothill Ranch and Babies "R" Us. The panel cited to Botosan v. Paul McNally Reality, 216 F.3d 827, 834 (9th Cir. 2000), which held "the landlord is a necessary party in an ADA action, regardless of what the lease provides." The panel held that, since Foothill Ranch was properly joined to Rush's claim against Babies "R" Us, Rush's claims against Foothill Ranch remained viable even after Babies "R" Us' dismissal from the suit. Therefore, the court held Foothill Ranch was improperly dismissed from her suit by the district court.

Regarding Sport Chalet and Petsmart, the court conceded the district court may have been correct in holding they were not properly joined, as any injuries encountered at each establishment would have been distinct and peculiar to that establishment, and Rush did not allege any legal relationship between the three stores. However, the court found the district court abused its discretion in dismissing Rush's complaints against Sport Chalet and against Petsmart, as the district court did not evaluate any prejudice this dismissal might cause Rush.

The court adopted the rule favored by many circuits "that district courts who dismiss rather than sever must conduct a prejudice analysis, including 'loss of otherwise timely claims if new suits are blocked by statutes of limitations.'"

The court therefore vacated and remanded, directing the district court to evaluate whether allowing two severed complaints to remain Sport Chalet and Petsmart, each with Foothill Ranch as co-defendant, would be necessary to avoid prejudice to Rush.

For the full opinion: http://cdn.ca9.uscourts.gov/da...15/03/03/12-57253.pdf

Panel: Stephen Reinhardt, Ronald M. Gould, Circuit Judges, and J. Frederick Motz, Senior District Judge.

Date of Issued Opinion: March 3, 2015

Docket Number: 12-57253\

Decided: Reversed and remanded with instructions.

Case Alert Author: Michael Zatlin.

Counsel: Scottlynn J. Hubbard, IV (argued), Law Offices of Lynee Hubbard, Chico, California; Anthony M. Bettencourt (argued), Disabled Advocacy Group, Chico, California, for Plaintiff - Appellant, Henry A. Platt and Robert L. Duston, Saul Ewing LLP, Washington, D.C., for Defendant - Appellee Foothill Ranch.

Author of Opinion: Motz, Senior District Judge.

Case Alert Circuit Supervisor: Professor Glenn Koppel.

    Posted By: Glenn Koppel @ 03/31/2015 02:00 PM     9th Circuit     Comments (0)  

  Theodore Frank v. Netflix, Inc; Wal-Mart Stores, Inc.; Walmart.com USA LLC - Ninth Circuit
Headline: Ninth Circuit affirms class action settlement agreement including certification, method of distribution, and calculation of attorneys' fees, rejecting a challenge by class members that "the gift card portion of the settlement constituted a coupon settlement within the meaning of the Class Action Fairness Act."

Areas of Law: Civil Procedure, Class Actions

Issue Presented: Whether the district court clearly abused its discretion in its approval of the class action settlement agreement.

Brief Summary: After the district court approved a class action settlement between a class of Netflix subscribers and both Wal-Mart Stores, Inc. and Walmart.com USA LLC ("Wal-Mart"), thirty class members opposed the settlement. Class members opposed the certification of the settlement class, the settlement, and the calculation of attorneys' fees.

The Ninth Circuit panel found that certification was proper because there were no conflicts between class representatives and unnamed class members. Furthermore, the panel also approved the district court's "claimant-fund-sharing" distribution method, the amount disbursed as incentive awards, and the fee award. Lastly, the Court concluded that notice was adequate and that the district court sufficiently explained its calculations and rationale.

Accordingly, the Court affirmed the judgment of the district court.

Extended Summary: Andrea Resnick and seven other class representatives filed a class action lawsuit against Netflix and both Wal-Mart Stores, Inc. and Walmart.com USA LLC. Plaintiffs alleged that they were unfairly charged a high monthly subscription price as a result of an agreement between Netflix and Wal-Mart to divide the online DVD market. Netflix agreed to stop selling DVDs and focus on DVD rentals, and Wal-Mart agreed to turn away from renting DVDs and focus instead on selling them.

A class of just Netflix subscribers eventually reached a settlement agreement with Wal-Mart whereby Wal-Mart agreed to pay $27,250,000.00 comprising both a "Cash Component" and a "Gift Card Component" in exchange for dismissal with prejudice of all claims asserted in the complaint. The Cash Component funded attorney's fees and expenses, costs of notice and administration, and incentive payments to class representatives. The Gift Card Component funded the remaining disbursement to class members. Each claimant received an equal share of the Gift Card Component regardless of the specific damages of each individual. Class counsel was granted attorneys' fees in the amount of 25% of the overall settlement fund. However, of the 1,183,444 claims that were submitted by class members, thirty of them lodged objections to the settlement.

At the fairness hearing, the judge rejected all objections and determined that the Class Action Fairness Act's coupon-settlement provisions did not apply because the gift cards were sufficiently different from coupons given the facts that claimants could choose between gift cards and cash, the gift cards were freely transferrable, and they had no expiration date. The court also determined that attorneys' fees were properly calculated and approved administration costs as well as both the reimbursement amounts for litigation expenses and incentive awards of $5,000.00 for each class representative. After all calculations, each of the almost 1.2 million claimants received roughly $12.00. Theodore Frank, Tracey Cox, Maria Cope, Edmund Bandas, John Sullivan, and Jon Zimmerman ("Objectors") appealed from the court's approval of the settlement, objecting to the certification of the settlement class, the settlement, and the calculation of attorneys' fees.

Objectors first argued that the class representatives did not adequately represent the class because each of the class representatives was awarded $5,000.00, whereas each unnamed class member received only $12.00.

The panel ruled that legal adequacy of the class representatives is determined by whether the representatives and their counsel have any conflicts of interest with other class members and whether the representatives and their counsel maintain a sufficient interest in and nexus with the class so as to ensure vigorous representation. The panel stated that incentive payments alone do not create an impermissible conflict between class representatives and unnamed members. Because there were no structural differences in the claims of the class representatives and other class members, no ex ante incentive agreements between the class representatives and counsel, no conditional incentive awards, and no guarantees that class representatives would receive incentive payments, the Ninth Circuit panel found that the district court did not abuse its discretion in certifying the settlement class.

Objectors next argued that the district court erred in approving the settlement. Specifically, they argued that the district court erred because it used a type of fluid recovery (a disfavored distribution scheme), notice violated both Rule 23 and class members' due process rights, the incentive awards were unreasonably large and unfair, both a reverter and confidential opt-out provision in the settlement agreement made it unfair, and the district court did not fully explain its decision to approve the settlement.

The panel rejected the labeling of the claimant-fund-sharing distribution method employed by the district court as a type of fluid recovery disfavored by state and federal courts The panel explained that, unlike fluid recovery which confers an indirect benefit on class members, the claimant fund approach provides direct compensation to class members.

In addressing Objectors' argument that notice of the settlement violated Rule 23 or due process, the panel found that notice was adequate and sufficiently specific, holding that "[t]he e-mail and mail notices, which did not need to and could not provide an exact forecast of how much each class member would receive, gave class members enough information so that those with 'adverse viewpoints' could investigate and 'come forward and be heard.'"

The panel also rejected the objection that the incentive awards to the class representatives were too large. Rather than simply comparing $5,000.00 incentive award to the $12.00 individual award, the panel focused on the number of class representatives receiving incentive awards, the average incentive award amount, and the proportion of the total settlement that was spent on incentive awards and determined that the district court did not abuse its discretion. The panel also rejected the class members' argument that "two provisions in the settlement agreement, a reverter provision that she alleges allows Walmart to keep excess settlement funds and a confidential opt-out provision that allows Walmart to leave the settlement agreement at any time, make the agreement unfair." The panel held that "The district court did not abuse its discretion in deciding that these provisions do not allow for any improper reversion of allocated settlement funds to Walmart."

Objectors also argued that the district court abused its discretion in approving the fee award. More specifically, they argued that the attorneys' fee award violated provisions of the Class Action Fairness Act (CAFA) governing coupon settlements and were unreasonable, class counsel failed to provide adequate notice of their attorney's fee petition to class members, and the district court failed to adequately explain its attorneys' fee award.

The panel concluded that the district court properly determined that the portion of the settlement paid in Wal-Mart gift cards was not a "coupon settlement" within the meaning of CAFA because the settlement differs from all the twenty-nine examples of problematic coupon settlements defined by the Senate Judiciary Committee's Report for CAFA. Unlike coupons which require a class member to hand over more of their own money before they can take advantage of the coupon, the gift cards do not require class members to spend any of their own money. The gift cards in this settlement could be used for any products on Walmart.com, are freely transferrable, do not expire, and do not require consumers to spend their own money. Furthermore, the gift cards offer class members a choice of a large number of products from a large retailer. Therefore, the attorneys' fees were properly calculated as a percentage of the overall settlement fund, including the value of the gift cards.

In determining the reasonableness of the attorneys' fees, the panel emphasized that reasonableness is not measured by the entire common fund from which a percentage is awarded but, rather, by the end result. Hence the application of the 25% benchmark percentage to the entire common fund was reasonable because the resulting fees were reasonable.

With respect to notice, the panel found that it was adequate and sufficiently satisfied the requirements of In re Mercury because the notice was both mailed and emailed, stated the percentage that counsel would be seeking in fees, and clearly set a fourteen-day deadline to file an objection.

Finally, the panel held that the district court provided an adequate explanation of its rationale in approving the attorneys fees because the court compared the 25% benchmark award to the summary lodestar numbers provided by class counsel and the judge provided a reasoned explanation, applying some of the Vizcaino v. Microsoft Corp. factors.

In sum, the Ninth Circuit panel affirmed the district court's decision to approve all aspects of the settlement between the class of Netflix subscribers and Wal-Mart.

For the full opinion: http://cdn.ca9.uscourts.gov/da...15/02/27/12-15705.pdf

Panel: Sidney R. Thomas, Chief Judge, Stephen Reinhardt, Circuit Judge, and Lloyd D. George, Senior District Judge

Date of Issued Opinion: February 27, 2015

Docket Number: 12-15705

Decided: Affirmed.

Case Alert Author: Daniel S. Seu

Counsel: Theodore H. Frank (argued), Center for Class Action Fairness, Washington, D.C.; Gary Sibley, Dallas Texas; Joseph Darrell Palmer, Law Offices of Darrell Palmer PC, Solana Beach, California; Christopher A. Bandas, Bandas Law Firm, P.C., Corpus Christi, Texas; Christopher V. Langone and Grenville Pridham, Law Office of Christopher Langone, Ithaca, New York; Joshua R. Furman (argued), Joshua R. Furman Law Corp., Los Angeles, California, for Objector-Appellants Frank, Cope, Cox, Bandas, Sullivan, and Zimmerman.

Todd A. Seaver (argued), Joseph J. Tabacco, Jr., and Christopher T. Heffelfinger, Berman DeValerio, San Francisco, California, for Plaintiffs-Appellees.

Author of Opinion: S. Thomas, Chief Judge.

Case Alert Circuit Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 03/31/2015 01:59 PM     9th Circuit     Comments (0)  

  Resnick v. Netflix - Ninth Circuit
Headline: The panel held that Netflix online DVD-rental subscribers "did not raise a triable issue of fact as to whether they suffered antitrust injury-in-fact on a theory that they paid supracompetitive prices for one of Netflix's subscription plans because Netflix would have reduced the price of that plan but for its allegedly anticompetitive conduct. The panel further "affirmed in part and reversed in part the district court's taxable cost award" holding "that certain charges for "data upload" and "keywording" were not recoverable as costs for making copies under § 1920(4)."

Area of Law: Antitrust

Issues Presented: (1) Whether Netflix's promotion agreement with Walmart violated antitrust laws; (2) Whether the district court's award of taxable costs was proper

Brief Summary: Defendant Netflix, founded in 1997, was the first internet-based DVD rental service and faced no serious competition until Walmart entered the market in 2003, followed by Blockbuster in 2004. Despite the emergence of serious competitors, Netflix did not change its monthly subscription plan for a full year, and then actually increased its monthly fee. In October 2004, due to fears of Amazon entering the market, Netflix reduced its price. By this time, however, it was clear to Netflix and its competitors that Walmart was not doing well in the market and Netflix's CEO approached Walmart in an attempt to form a partnership. While initially unsuccessful, a verbal agreement was reached by March 17, 2005 whereby Walmart's subscribers could transfer to Netflix free of charge and maintain the same monthly rate and Walmart would receive both a bounty and revenue for any referrals that came from Walmart's transferred customers. The terms, however, did not include a covenant not to compete.

Plaintiffs (the "Subscribers"), representing a class of people who subscribed to Netflix over a five year period, alleged antitrust violations by Netflix and Walmart centering around a theory that the Subscribers paid a higher monthly fee for Netflix's service than they would have but for Netflix's allegedly anticompetitive conduct. The district court granted Netflix's motion for summary judgment on the basis that the Subscribers had failed to raise a triable issue as to antitrust injury-in-fact since Netflix never reduced its prices in response to Walmart. Furthermore, at the time of the agreement all competitors, including Walmart itself, knew that Walmart was no longer a serious competitor in the online-DVD rental market.

The district court then awarded Netflix $710,194.23 in costs; $317,616.69 for electronic discovery costs and $245,471.31 in consulting fees, file conversions, and copying costs. The Subscribers appealed this award and Netflix cross appealed for the denial of $21,000 of requested costs. These matters were reviewed under an abuse of discretion standard.

Generally, costs and fees should be awarded to the prevailing party, but such costs are limited to those listed in 28 U.S.C. section 1920. In making its initial costs award, the district court relied on a broad interpretation of § 1920; however, the Supreme Court has since ruled that § 1920 should be narrowly interpreted. With this in mind the 9th Circuit ("the panel") reviewed five categories of charges challenged by the Subscribers and found that while some of the charges were taxable, many were not. The panel ultimately held that of the $317,616.69 challenged by the Subscribers, only costs attributable to optical character recognition, conversion to TIFF, and "endorsing" activities were taxable since these activities were explicitly required by the Subscribers. Therefore, the panel affirmed the cost award in part, vacated it in part, and remanded for taxing of costs in accordance with the opinion. The panel then ruled that the district court did not abuse its discretion when awarding $245,471.31 for consulting fees, TIFF images, and copying costs, as the evidence was sufficient to justify the court's rulings and insufficiently persuasive to overcome the presumption in favor of an award.

Lastly, the panel found that the district court did not abuse its discretion in denying to award Netflix $21,000 for producing black and white PowerPoint documents as they were not in compliance with the Subscribers' specific request and Netflix was to blame for the duplicative work that followed.

In conclusion, the panel affirmed the district court's grant of summary judgment on the antitrust claims due to a lack of antitrust injury in fact and affirmed the cost award in part and reversed it in part and remanded to the district court for further proceedings consistent with the opinion.

Extended Summary: Defendant, Netflix, was founded in 1997 as the first internet-based DVD rental service and offered customers to rent or buy DVDs by mail. In 2000, Netflix discontinued its DVD sales business and focused on DVD rentals instead. While initially DVD rentals were offered on a pay-per rental basis, Netflix quickly switched to a monthly subscription model where customers could rent three DVDs ("3U" plan) at once for $19.95 per month or four DVDs ("4U" plan) at a time for $24.95 per month. Netflix thrived under this business model and by 2005 controlled 77.8% of the online DVD-rental market and 92.3% by 2010.

While initially Netflix faced no serious competition, in 2003 Walmart launched its own online DVD-rental service where it offered a 3U plan for $18.76 a month. Netflix did not change its pricing for a full year, and then the price change was to increase Netflix's 3U plan to $21.99 per month. Two months later, in August 2004, Blockbuster launched its own online DVD rental service with a 3U plan for $19.99 a month. In October 2004, in response to rumors that Amazon was planning to enter the online DVD-rental market, Netflix announced that it would reduce its 3U plan from $21.99 to $17.99 per month. The next day Blockbuster reduced its price to $17.49 per month. In November 2004, Walmart reduced its price to $17.36 per month. In December 2004 Blockbuster announced another price reduction, down to $14.99 per month. Netflix maintained its $17.99 price until August 2007, at which point it lowered the price to $16.99. In the interim, Walmart's online-DVD rental business did very poorly. Walmart peaked at 60,000 subscribers whereas in 2004 Netflix had over 2 million subscribers and Blockbuster had 400,000. Walmart gained an average of 4,000 subscribers per quarter whereas Netflix gained 250,000 subscribers per quarter. By February 2005, Walmart only had a 1.4% market share and Netflix had a 77.8% market share.

In October 2004, Netflix's CEO requested a meeting with Walmart's CEO in hopes to form a partnership to strengthen Netflix's position before Amazon entered the market. Walmart's CEO was uninterested at the time and no agreement was reached at the meeting. During this time, however, Walmart was considering alternatives to its online DVD-rental business, including potential partnerships with Yahoo! or Microsoft, but ultimately decided that none of its options would be profitable and would likely all lead to multi-million dollar losses. As such, in January 2005, Walmart decided to exit the market, began making preparations to cover losses incurred from the closure, and stopped accepting new subscribers. By March 2005, Netflix had 3 million subscribers and Walmart only had 52,000. At this time Netflix's CEO was aware of Walmart's declining market share, but not of Walmart's plan to exit the market, and Netflix's CEO made additional attempts to form a partnership. The two CEOs met on February 9, 2005, and while no agreement was reached at the meeting the two CEOs had reached a verbal agreement by March 17, 2005. The key terms of the agreement were: (1) Walmart's subscribers who so chose would be transferred to Netflix free of charge and would keep their monthly rate for one year, (2) Walmart would promote on its website Netflix's DVD rentals, (3) Walmart would receive a 10% revenue share for each subscriber who transferred plus a $36 bounty for each new Netflix subscriber gained from Walmart's referrals, and (4) Netflix would promote Walmart's DVD sales business. These terms were incorporated into a Promotion Agreement; however, the Promotion agreement did not include a covenant not to compete, nor did it prohibit Netflix from selling DVDs and explicitly permitted Walmart to offer an online DVD rental service.

Amazon never entered the online DVD-rental market, resulting in Blockbuster being Netflix's only major competitor until Blockbuster filed for bankruptcy in 2010. Netflix was then left as the sole major competitor with over 90% of the online DVD-rental market. Netflix's 3U price stayed at $17.99 from November 2004 to August 2007, was then reduced to $16.99, and remained at that price through the end of the class action period.

The Subscribers alleged antitrust violations by Netflix and Walmart and sought to represent a class of Netflix subscribers. The Subscribers asserted four cases of action that essentially allege that the Promotion Agreement illegally allocated the online DVD-rental market: (1) a §1 Sherman Act violation for unlawful market allocation of the online DVD-rental market (against all defendants); (2) a §2 Sherman Act claim for monopolization of the online DVD-rental market (against Netflix); (3) a §2 Sherman Act claim for attempted monopolization of the online DVD-rental market (against Netflix); and (4) a §2 Sherman Act claim for conspiracy to monopolize the online DVD-rental market (against all defendants).

The district court granted the Subscriber's motion for certification of a litigation class, defining the class as those who subscribed to Netflix between May 19, 2005 through December 23, 2010, and subsequently approved Walmart's settlement with the class. Netflix moved for summary judgment, pursuant to Federal Rule of Civil Procedure 56, which the district court granted on the basis that there was no per se antitrust violation and that the Subscribers had failed to raise a triable issue as to antitrust injury-in-fact. Netflix filed a bill of costs seeking $744,740.11 in discovery costs, of which the district court awarded Netflix $710,194.23 in costs. The Subscribers filed a timely notice of appeal and Netflix cross-appealed.

The panel reviewed de novo the district court's ruling. Summary judgment is appropriate if there is no genuine dispute as to any material fact. A genuine issue of material facts exists if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. While until recently summary judgment was disfavored in antitrust cases, that presumption has now disappeared.

Under Article III, antitrust plaintiffs establish injury-in-fact when they suffer an injury which bears a causal connection to the alleged antitrust violation. In addition, private antitrust plaintiffs must also demonstrate antitrust injury, which is defined as (1) injury of the type the antitrust laws were intended to prevent that (2) flow from that which makes defendants' acts unlawful. One way this can be proven is by showing that consumers paid higher prices for a product due to the anticompetitive actions of a defendant. The Subscribers alleged Netflix would have reduced its 3U subscription price to $15.99 per month if Netflix's efforts had not freed the company from Walmart's competitive threat, thereby forcing the Subscribers to pay a higher monthly fee than they would absent Netflix's allegedly anticompetitive conduct.

However, there was no evidence that Netflix would have raised its prices if Walmart had remained in the market. When Walmart initially entered the market as a competitor, Netflix not only failed to reduce its prices but actually raised them. Even when Blockbuster, who controlled a larger market share than Walmart, entered the market Netflix did not reduce its prices. The Subscribers' evidence consisted of a number of documents that referenced the potential impact of Walmart entering the market as a competitor to Netflix; however, these documents predated Walmart's actual entry and subsequent poor performance. While some of Netflix's internal documents did refer to a potential price cut to $15.99 they were in response to Blockbuster, not Walmart, and were merely a potential that never occurred. Ultimately, the Subscribers' evidence supported that neither Walmart nor its competitors viewed Walmart as a threat in late 2004. Furthermore, the expert testimony offered by the Subscribers was contrary to the market facts. As such, no reasonable juror could conclude that Netflix would have lowered its 3U price to $15.99 in response to Walmart and the panel affirmed the district court's summary judgment as to the four Sherman Act claims.

The panel then reviewed the district court's cost award under an abuse of discretion standard.

During discovery the Subscribers sought electronically stored information and required it to be provided in a specific file type, searchable, numbered sequentially, and include identifying information. Netflix in turn employed electronic discovery vendors to assist and produced nearly 15 million pages of discovery, resulting in their claim of $744,740.11 as discovery costs of which $710,194.23 was awarded. The Subscribers argue the district court erred by broadly construing § 1920(4) in its taxing of electronic discovery costs for $317,616.69 and abused its discretion in taxing consulting fees, file conversions, and copying costs of $245,471.31. Netflix cross appealed arguing the district court abused its discretion in disallowing $21,000 in costs to copy various PowerPoint files.

Regarding electronic discovery production costs, the district court relied on a broad reading of section 1920 founded in a prior circuit opinion. However, the Supreme Court has since ruled that § 1920 should be more narrowly interpreted to limit taxable costs to relatively minor incidental expenses. While costs and fees should generally be awarded to the prevailing party, a district court's discretion to do so is limited to the specific types of costs listed in 28 U.S.C. § 1920. Analyzing the phrase "costs of making copies...obtained for use in the case," the panel noted that narrow construction of the statute requires that any tasks and services for which an award of costs is being determined must be described and proven with sufficient specificity, particularity, and clarity to permit a determination that said costs are being awarded for making copies. As such, invoices for general statements like "document production" are unhelpful in determining whether the invoices are taxable.

The panel reviewed five categories of charges challenged by the Subscribers: (1) data upload, (2) endorsing, (3) keyword, (4) professional services, and (5) electronic data discovery.

"Data upload" refers to the reproduction of documents for potential production into a database for review after all the processes necessary to prepare the documents in the required formats and labeling are completed. The Subscribers challenge these costs on the basis that uploading information is merely transmitting it from one location to another, which is analogous to moving boxes from one room to another in a law firm for review. Netflix argues that the transmission necessarily involves making copies from the original location to the new location. The panel examined the issue by making a comparison with the paper-document analogue. The transmissions taking place here were similar to faxing a document to a law firm, causing both data to be transferred and a facsimile copy to be created. Such costs are not un-taxable simply because it was a fax machine making the copy and not a photocopier. However, taxable costs under § 1920(4) are not determined by merely whether a copy was made, but whether the copy was necessarily obtained for use in the case.

What is deemed to have "necessarily obtained" for use in a case is extremely limited. If the copy was made to be produced in discovery then it would be taxable, but if made merely for convenience of counsel it would not be. Here, testimony indicated that the copies were made as a step in the production process in order to allow a selection of documents for production from the documents for potential production. The panel ruled that this was similar to copies being made for a lawyer to review on his own computer instead of the original file, and not necessarily for use in the case, and as such the charges were not taxable.

"Endorsing" activities referred to Netflix's branding of image files with unique sequential production numbers and confidentiality designations. While the Subscribers technically challenged the taxing of such activities, they did so only via a cursory mention in their statement of facts and did not specifically and distinctly argue them in the open briefing. As a result, the panel did not consider this challenge.

"Keywording" refers to automated software used to filter what documents needed to be copied based on a set of supplied criteria. While Netflix argues that this is a mechanical process of making copies of all documents that fit the criteria, the panel held this charge was for two separate tasks: (a) identifying what documents fit the criteria and (b) making copies of those documents. The act of identifying the documents is similar to having a person review the documents based on supplied criteria and sorting them into the appropriate pile to copy or not copy. Since this filtering process was applied both to copied documents and documents that were not to be copied, this charge was not taxable.

"Professional services" as referenced by the Subscribers, includes a broad range of activities including processing, native review, data analysis, project management, and production services. Netflix's response was essentially a mere claim that all referenced activities were similar to those performed by copy center employees and as such should be recoverable. Lacking more detailed information on such activities, the panel was unable to determine which specific charges were taxable and remanded the issue to the district court.

The "electronic discovery task" challenged by the Subscribers was for one specific item of an invoice in which Netflix was charged a $10,000 flat rate for a variety of tasks such as native review processing, optical character recognition, exporting document, converting documents to TIFF, populating custom fields, and prepping for further processing. While some of those tasks are taxable, not all of them are, and the panel limited recovery to those charges associated with taxable costs.

In sum, the panel ruled that of the $317,616.69 challenged by the Subscribers as nontaxable, only costs attributable to optical character recognition, conversion to TIFF, and "endorsing" activities were taxable since these activities were explicitly required by Subscribers. Therefore, the panel affirmed the cost award in part, vacated it in part, and remanded for taxing of costs in accordance with the opinion.

Regarding the Subscribers' challenge of the $245,471.31 awarded by the district court for consulting fees, TIFF images, and copying costs, the panel ruled that there was not an abuse of discretion.

While the Subscribers complained that the district court failed to give affirmative reasons for awarding costs, the district court was only required to find the reasons for denying costs were insufficiently persuasive to overcome the presumption in favor of an award. Given the combination of the deferential standard for review, that the court explained that it had read the parties' papers and considered their arguments, and that the district court specifically identified the Subscribers' arguments on these costs, the district court's explanation was sufficient. Similarly, the Subscribers challenged costs claimed for preparing visual aids but did so based on invoice descriptions of the title of the person performing the work. In light of the evidence that the vendors were only paid for production costs, and not for creating the substantive content, the district court did not abuse its discretion in awarding $14,355.50 for preparing visual aids.

Regarding the $167,399.70 for TIFF conversions, plus an additional $46,773.71 for alleged unnecessarily produced documents, the district court heard testimony from experts on both sides prior to making the award. Given the deferential standard of review, there is no reason for the panel to overrule the district court's award on that matter. Lastly, the Subscribers challenged an award of $16,942.40 for copying paper documents. The panel, however, upheld the award given that the bill contained the purpose of each charge, the dates the work was done, and a declaration from one of Netflix's attorneys that various documents were produced as exhibits to depositions and as part of formal discovery documents. Since there was sufficient information to determine which costs were taxable, the district court did not abuse its discretion in awarding these costs.

Finally, the panel found that the district court did not abuse its discretion in declining to award Netflix $21,000 for producing various black and white PowerPoint documents. The Subscribers had requested specific files and specified that they be produced in the same manner they were kept in the ordinary course of business. Despite that Netflix ordinarily kept the slides in color, it proceeded to only provide black and white slides to the Subscribers until ordered to comply with the discovery request by the court. Although production of the color slides was duplicative of the black and white slides, Netflix could have avoided the problem by producing the color documents as per the original request. Based on this, the district court's denial of Netflix's cost award was not an abuse of discretion.

In conclusion, the panel affirmed the district court's grant of summary judgment on the antitrust claims due to a lack of antitrust injury in fact and affirmed the cost award in part and reversed it in part and remanded to the district court for further proceedings consistent with the opinion.

Panel: Judges Thomas, Reinhardt, and Senior District Judge L.D. George by designation

Date of Issued Opinion: February 27, 2015

Docket Number: 4:09-md-02029-PJH

Decided: Affirmed in part, vacated in part, and remanded

Case Alert Author: Seth DuMouchel

Author of Opinion: Judge Thomas

Case Alert Circuit Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 03/31/2015 01:57 PM     9th Circuit     Comments (0)  

March 4, 2015
  United States v. McElmurry - Ninth Circuit
Headline: Ninth Circuit vacated and remanded defendant's criminal conviction for possessing and distributing child pornography, even though defendant was not subjected to double jeopardy.

Area(s) of Law: Constitutional Law; Evidence

Issue(s) Presented: 1) Whether charges of possession of child pornography and distribution of child pornography constitute double jeopardy when the charges are based on the same images. 2) Whether there is sufficient evidence to convict for distribution of child pornography without showing defendant had an active role in the distribution. 3) Whether the government violated Rule 403 of the Federal Rules of Evidence when the prosecution introduced highly prejudicial evidence at trial showing McElmurry bragged to another inmate that prosecutors would never find the vast majority of child pornography images McElmurry had in his possession as well as evidence McElmurry had been looking at child pornography since he was fifteen years old. 4) Whether McElmurry waived his objection to this evidence when his in limine objection was not renewed at trial.

Brief Summary: Circumstantial evidence linked McElmurry to a computer, which was used to share child pornography on an online service. Although the computer files were encrypted, it was inferred that the images used to convict McElmurry for possession and distribution of child pornography were located on this computer.

McElmurry argued that possession of child pornography is a lesser-included offense of distribution, so the prosecution, by using the same images to convict him of both charges, subjected McElmurry to double jeopardy. The court disagreed, finding that decisions, which held possession and receiving child pornography to be double jeopardy, were distinguishable from this case, for while it is impossible to receive something without possessing it, it is possible to both possess and distribute independently of each other. Since the proof of one charge is separate from the proof of the other, it was not double jeopardy to find McElmurry guilty of both charges based on the same images.

McElmurry also argued the sufficiency of the evidence was not enough to support a conviction for distribution, since he did not actively distribute the pornographic images. Instead, on-line users downloaded the images themselves. The court found McElmurry had already conceded that file sharing constitutes distribution, when the owner of the file can allow or deny access to others of the images in the file.

The court did find that McElmurry preserved his Rule 403 objection to unduly prejudicial evidence the prosecution had succeeded in introducing at trial. This was because even though the defenses' objections were not specific, it was because the prosecution did not proffer specific evidence before the judge changed his tentative ruling allowing the evidence into a definitive ruling. Therefore, the objection was preserved under Rule 103(b).

The court also found the judge erroneously allowed the evidence into trial, since the judge balanced the evidence under Rule 403 based on the prosecutions' representation of the character of the evidence, without an actual review of the evidence, prior to making the ruling. Lastly, the prosecution did not even attempt to fulfill its burden of showing harmless error in admitting this evidence. Instead, the prosecution emphasized the importance of the evidence to their case at trial.

Extended Summary: FBI agents used the identity of a member of an online file-sharing group known as "GigaTribe" to track down possessors and sharers of child pornography. They downloaded many images and videos from a "GigaTribe" user known as "TeenTrade." The agents were able to track the IP address to McElmurry's grandmother's house, which McElmurry often frequented. They obtained a search warrant, which the agents executed while McElmurry was at the home.

"TeenTrade" was online and active when the agents first entered the home, but the minute one of the three computers present at the residence was unplugged, extensive downloads from "TeenTrade" stopped. From this, the government inferred that this computer had extensive amounts of child pornography on it, even though the files were fully encrypted and not accessible by forensic analysis.

Further, circumstantial evidence suggested that McElmurry was Teentrade, as McElmurry's soft drink can was right by the computer in question, and the screen saver on this computer had the name "Super Dave" on it (McElmurry's first name is David). Based on these inferences, the government was able to convict McElmurry of one charge of possession of child pornography and one charge of distribution of child pornography.

McElmurry appealed on the grounds that (1) his two convictions were based on the same evidence which subjected him to double-jeopardy; (2) there was insufficient evidence to support his conviction for distribution; (3) the trial judge should have excluded some evidence under Federal Rules of Evidence 403, as the probative value of this evidence was substantially outweighed by the danger of substantial prejudice; and lastly (4) the defense did not waive their objection to this evidence by not renewing it at trial.

McElmurry argued that his convictions for possession and distribution of child pornography stemmed from the same images. Therefore this amounted to double jeopardy. He further argued the charge of possession is a lesser-included offense of distribution.

The panel reviewed this using the standard of "plain error," as this issue was not raised at trial. However, this standard did not affect their analysis, and did not save the convictions on that basis. This was because the court had controlling precedent in which convictions for receiving and for possessing child pornography stemming from the same images had been held to constitute double jeopardy. The court reasoned that if the defenses' theory were held to be correct, double jeopardy would require at least one conviction to be vacated on remand without the possibility of re-trial.

McElmurry relied on Blockberger v. United States, (under the "same-elements test" receiving necessarily involves possessing), and Davenport, (it is impossible to receive something without, at least for an instant, possessing it). In the cases on which McElmurry relied, possession was found to be a lesser-included offense of receiving child pornography. The Blockberger test of whether the same act constitutes a violation of two separate provisions is "whether each provision requires a proof which the other does not." However, the court distinguished these cases, as McElmurry's convictions were for possession and distribution, not possession and receiving. Unlike receiving, which requires possession at least at the moment of receipt, distribution does not. A distributor can act as a middle-man, and put two parties together so as to arrange distribution of contraband from one to another without ever being physically in possession of the material himself. A possessor of child pornography may choose not to share, and a distributor does not need to possess these images. Each count requires separate proof and therefore one charge is not a lesser-included charge of the other.

McElmurry also argued for a judgment of acquittal on the distribution charge since he did not actively do anything to cause the distribution of these images. The images were on a file-sharing program, and it was the FBI agent's actions (in pushing a button) that caused the download, and hence the image transfer. However, McElmurry conceded the court had already held in Budziak that maintaining child pornographic images in a shared folder so as to enable others to download, which others in fact do download, constitutes sufficient evidence of distribution. Testimony at trial showed McElmurry shared images in a GigaTribe folder, which was only accessible if the owner of the folder gave another user permission to access images in this folder. The court held this was sufficient to prove distribution.

The Rule 403 issue was more troubling to the panel. The prosecution did not merely attempt to prove the acts for which McElmurry was charged. Instead, the prosecution used statements McElmurry made to investigators four years earlier in an interview they conducted in connection with a state conviction for child pornography. In the interview, McElmurry admitted he had been looking at child pornography daily since he was fifteen years old, and that he traded images with others. The prosecution also presented a letter McElmurry had sent to an inmate that he knew from an earlier incarceration, which was written just prior to McElmurry being charged for the current offenses. In the letter, McElmurry called police, investigators, prosecutors, etc., a variety of derogatory names, and bragged that they would never find the vast majority of pornographic images he possessed.

Although McElmurry strenuously argued against admission of this evidence in limine, the prosecution argued for its admissibility as proof of "knowledge," and "lack of mistake." The prosecution argued this evidence was necessary to show that McElmurry knew the images were on the computer, he knew how to encrypt, and this evidence was necessary to counter a reasonable doubt McElmurry might raise that the images actually belonged to his mother or grandmother. The prosecution, as appellee, also made an argument in its brief that the evidence was admissible under Rule 414, Similar Crimes in Sexual-Assault Cases. However, the court chose not to address this argument since it had not been raised at trial, and the evidence still would have been weighed under Rule 403 anyway.

McElmurry, on the other hand, argued this evidence would be used to show a propensity to commit crimes involving child pornography, forbidden under Rule 404(a), and the probative value of this evidence was substantially outweighed by the danger of unfair prejudice under Rule 403.

The prosecution argued that McElmurry did not preserve his objection to admission of this evidence in limine, so it was waived. The court explained that the purpose of in limine resolutions was to enable planning and prevent interruptions at trial, and that arguing and losing in limine sufficed to preserve it. "[A]n objection to what the court had already ruled unobjectionable would have amounted to taking exception to an evidentiary ruling already made which, which Federal Rule of Evidence 103 says is unneccesary."

The partial dissenting opinion complained that the defenses' objection was not definitive, as it was not specific enough. The trial judge in limine tentatively allowed the evidence in question to be used at trial, subject to the prosecution providing a foundation later. But the Judge then interrupted himself in a discussion of another matter to make the ruling definitive before this occurred. Under United States v. Varela-Rivera, it was held that when the government fails to state clearly and precisely what evidence it will offer, it is not necessary for the defense to state clearly and precisely what evidence it is objecting to. Therefore, in light of the fact the trial judge interrupted himself in another matter to change his tentative ruling to a definitive ruling, the defenses' objection was as clear as it could be, and was therefore preserved on appeal.

The court held that evidence which the prosecution seeks to be used for a proper 404(b) reason such as to demonstrate knowledge, or lack of mistake must still be weighed using the 403 test, where the probative value must substantially outweigh the danger of unfair prejudice in order for the evidence to be admissible. In order properly analyze evidence, the trial judge must look at the specific reason the evidence is proffered, and then determine whether this reason is an element of the crime or crimes being charged. Then the evidence itself must be weighed under Rule 403, reliance on the characterization of the evidence by others is not enough. Every word must be read and analyzed, as a trial court cannot adequately judge whether words it has not heard or read will be unduly prejudicial. Here, the court found the trial judge had not read or heard the words offered as evidence before he made his ruling, which allowed them to be introduced at trial. The judge did not say he read them, the record did not show he read them, and the government confirmed the judge had not read them.

The court also held that the government did not bear its burden of proof that the error was harmless, which is ordinarily the next step in the analysis. This would have been hard to prove, as the first thing the prosecutor said at trial was "n his own words, the defendant, David McElmurry, is addicted to child pornography." Rather, the government attempted to prove the importance rather than the marginality of the evidence. This is irrelevant in a 403 determination.

For the full opinion: http://cdn.ca9.uscourts.gov/da...15/01/26/12-50183.pdf

Panel: Stephen Reinhardt, Andrew J. Kleinfeld, and Morgan Christen, Circuit Judges.

Date of Issued Opinion: January 26, 2015

Docket Number: 12-50183

Decided: Vacated and remanded

Case Alert Author: Michael Zatlin

Counsel: John Balazs, Sacramento, California, for Defendant - Appellant, Alessandra P. Serano, Assistant United States Attorney, San Diego, California, for Plaintiff - Appellee

Author of Opinion: Judge Kleinfeld, partial concurrence and partial dissent by Judge Christen

Case Alert Circuit Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 03/04/2015 01:49 PM     9th Circuit     Comments (0)  

  Omega S.A. v. Costco Wholesale Corporation - Ninth Circuit
Headline: Ninth Circuit affirms district court's grant of Defendant's motion summary judgment and attorneys' fees in a copyright infringement action.

Area of Law: Copyright

Issue Presented: Whether the first sale doctrine protects a buyer of a copyrighted work lawfully manufactured abroad when the buyer purchased gray market goods from an intermediary that acquired the watches from a buyer that purchased the goods in an authorized first sale in a foreign jurisdiction.

Brief Summary: The Ninth circuit affirmed the district court's grant of summary judgment to Costco because the first sale doctrine protects a buyer or other lawful owner of a copyrighted work lawfully manufactured abroad. The buyer/owner may lawfully import the copyrighted work without obtaining permission from the copyright order.

The court further held that Omega has no infringement cause of action because its right to control importation and distribution of the Omega Globe expired after the authorized first sale.

The Ninth Circuit court also affirmed the district court's grant of attorney's fees as being within its discretion because Omega sought to exert control over its watches instead of providing creative works to the general public, copyright law did not condone nor protect Omega's actions.

Concurring Opinion: Preliminarily, Judge Wardlaw disagreed with the majority's reliance on the first sale doctrine because the 9th Circuit court held it inapplicable on the first appeal and the parties did not brief or argue on appeal. Instead, the concurrence relied on the district court's copyright misuse rationale.

The concurrence explained that copyright misuse forbids the use of the copyright in a manner that violates the public policy embodied in the grant of copyright.

Identifying the defense of copyright misuse has been applied sparingly, it is available where a defendant can prove either 1) a violation of antitrust laws; 2) the copyright owner illegally extend its monopoly; or 3) the copyright owner violated the public policies underlying the copyright laws.

Based on Omega's attempt to control importation and distribution of watches with copyright law and Omega's communications with distributors stating it sought to stem the tide of unauthorized importation, the concurrence would affirm the judgment based on copyright misuse.

Extended Summary: Omega is a Swiss manufacturer of luxury watches, including the Seamaster, which sometimes bears an engraving of the Omega Globe Design. Omega copyrighted the design in 2003. Omega uses authorized distributors to sell its watches throughout the world.

Costco is an American discount warehouse corporation.

Although Omega and Costco discussed a possibly distributorship arrangement, the parties did not come to an agreement.

In 2004 Costco purchased 117 Seamaster watches bearing the Omega Globe from ENE Limited, who purchased the watches from an unidentified third party, who, in turn purchased the watches from an authorized foreign distributor. Omega approved the initial sale of the watches but not the importation nor Costco's sale of them.

The district court granted Costco's motion for summary judgment based on the first sale doctrine. The Ninth Circuit Court reversed and remanded based on precedent holding that the first sale doctrine did not apply to copyrighted works produced abroad. The Supreme Court summarily affirmed the Ninth Circuit decision. On remand the district court granted summary judgment based on Omega's misuse of copyright. The district court also granted attorney's fees in the amount of $396,844.17.

Reviewing the district court's grant of summary judgment de novo, the Ninth Circuit court held that the first sale doctrine protects a buyer or other lawful owner of a copyrighted work lawfully manufactured abroad. The buyer/owner may lawfully import the copyrighted work without obtaining permission from the copyright order.

The court further held that Omega has no infringement cause of action because its right to control importation and distribution of the Omega Globe expired after the authorized first sale.

The Ninth Circuit court affirmed the attorney's fees award because the District court weighed factors including 1) the degree of success obtained; 2) frivolousness; 3) motivation; 4) objective unreasonableness of losing party's factual and legal arguments; and 5) the need to advance considerations of compensation and deterrence, it was within its discretion to award attorney's fees. Additionally, the district court held that because Omega sought to exert control over its watches instead of providing creative works to the general public, copyright law did not condone nor protect Omega's actions.

Concurring Opinion: Preliminarily, Judge Wardlaw disagreed with the majority's reliance on the first sale doctrine because the 9th Circuit court held it inapplicable on the first appeal and the parties did not brief or argue on appeal. Instead, the concurrence relied on the district court's copyright misuse rationale.

Omega sued Costco for copyright infringement for selling forty-three Omega watches bearing the Globe Design, which Costco did not have permission to use. However, according to the district court, because Omega used the Globe Design to control the importation and sale of Omega watches, Omega misused its copyright.

To stem the tide of unauthorized dealers circumventing Omega's exclusive distributorship model through arbitrage, Swatch U.S.A. (Omega's parent corporation) devised a strategy to register its Globe Design for U.S. copyright protection to strengthen Omega's control over importation of Omega watches into the United States.

Omega sued Costco for copyright infringement related to the sale of forty-three Seamaster watches. The Ninth circuit reversed the district court's grant of summary judgment holding that the first sale doctrine was inapplicable to foreign-made goods first sold abroad.

On remand the district court granted Costco's motion for summary judgment based on the equitable defense of copyright misuse. Omega conceded it affixed the copyrighted Globe Design to use section 602 of the Copyright act, which makes importation of copyrighted goods without the copyright owner's authorization a violation of the copyright owner's exclusive right to distribute.

The concurrence examined the policy of copyright protection to incentivize artistic creativity for the public good. Absent the public benefit, copyright protection is unjustified.

Additionally, the concurrence examined the scope of copyright protection, stating that items with intrinsic utility apart from their expression or appearance are not copyrightable. The concurrence posited that Omega's watches were not copyrightable but only the Globe Design engraved on the watches sold by Costco.

The concurrence further explained that copyright misuse forbids the use of the copyright in a manner that violates the public policy embodied in the grant of copyright.

Identifying the defense of copyright misuse has been applied sparingly, it is available where a defendant can prove either 1) a violation of antitrust laws; 2) the copyright owner illegally extend its monopoly; or 3) the copyright owner violated the public policies underlying the copyright laws.

Based on Omega's attempt to control importation and distribution of watches with copyright law and Omega's communications with distributors stating it sought to stem the tide of unauthorized importation, the concurrence would affirm the judgment based on copyright misuse.

Additionally, equitable principles support the district court's refusal to enforce Omega's copyright as contrary to public policy.

The concurrence then distinguished a number of cases relied upon by Omega and ultimately made its decision based on the copyright misuse theory relied upon by the district court.

For the full opinion: http://cdn.ca9.uscourts.gov/da...15/01/20/11-57137.pdf

Panel: Dorothy W. Nelson, Kim McLane Wardlaw, and Johnnie B. Rawlinson, Circuit Judges.

Date of Issued Opinion: January 20, 2015

Docket Number: 12-56342

Decided: Affirmed

Case Alert Author: Brandon Powell

Counsel: Barry R. Levy (argued), Horvitz & Levy LLP, Encino, California; Jess M. Collen and Thomas P. Gulick, Collen IP, Ossining, New York, for Plaintiff-Appellant. Bruce P. Keller (argued), Debevoise & Plimpton LLP, Washington, D.C.; Norman H. Levine and Aaron J. Moss, Greenberg Glusker Fields Claman & Machtinger LLP, Los Angeles, California, for Defendant-Appellee.

Author of Opinion: Nelson, Circuit Judge.

Case Alert Circuit Supervisor: Professor Ryan T. Williams

    Posted By: Ryan Williams @ 03/04/2015 01:33 PM     9th Circuit     Comments (0)  

  U.S. v. Zamudio - Ninth Circuit
Headline: Only one felony conviction supporting removal is needed to support deportation

Area of Law: Criminal law; Criminal Procedure; Immigration Law

Issue Presented: What is required to successfully collaterally attack deportation proceedings underlying a conviction for illegally re-entering the US

Brief Summary: Defendant was convicted of two felonies supporting deportation; one for kidnapping in 1994 and one for possession of methamphetamine in 2000. After the 2000 conviction Defendant was deported. After being deported Defendant re-entered the US and presented his now void legal permanent resident card to get past the border checkpoint. Defendant later found in the US by INS agents and arrested for violation of 8 U.S.C. § 1326 (being a deported alien "found in" the US after reentering without permission).

Defendant appealed his conviction on the basis that he was not advised that he could challenge the removal proceedings, that had ineffective assistance of counsel, that he was prejudiced by the lack of a constructive knowledge jury instruction, and that he had met his burden of proving a statute of limitations defense and as such a motion for acquittal should have been granted.

The 9th Circuit rejected all of Defendant's claims. They found that even had Defendant challenged his removal proceedings, this would have only have fixed one of the two underlying felonies and would still have left him eligible for deportation. Furthermore, Defendant's defense attorney made all the arguments he could reasonably have been expected to make given the law at the time. The panel also reasoned that given Defendant's successful efforts to prevent border agents from learning he was not allowed to reenter the US there was no justification for imputing constructive knowledge of his illegal status. Since the statute of limitations tolls if defendants use false travel documents to gain readmission, defendant could not have met the burden to put on a statute of limitations defense here.

For these reasons, the panel affirmed Defendant's conviction.

Extended Summary: Defendant, Zamudio, was born in Mexico and eventually came to the United States where he married a US citizen and became a legal permanent resident. In Defendant was convicted of kidnapping and was sentenced to three years in prison. In 2000, Defendant was convicted of felony possession of methamphetamine and served 100 days in jail. After completing his second sentence, Defendant was informed by the US Immigration and Naturalization Service (INS) that he was removable due to both his 1994 and 2000 convictions. At that time Defendant retained an attorney to represent him and a removal hearing followed.

Defendant was present at the removal hearing, along with a Spanish interpreter; Defendant's attorney was not physically present at the hearing but participated in the hearing by telephone. Defendant's attorney admitted that Defendant had no claim to US citizenship, that Defendant was convicted for possession of methamphetamine in 2000 and kidnapping in 1994. Defendant's attorney further admitted that each conviction made Defendant subject to deportation and that no relief was available. The immigration judge then ordered Defendant to be removed to Mexico.

Defendant later travelled with his then current wife from Mexico back into California. To accomplish this Defendant had his wife bring his now-void legal permanent resident card and had her drive to a US port of entry, both of which were given to the border agent. After examining the documents provided t, the agent allowed Defendant's vehicle to pass.

A few years later, in 2012, Defendant was again in jail and came to the attention of INS agents. Defendant was quickly indicted for that offense. Defendant brought a motion to dismiss the indictment based on two main points: 1) that the immigration judge failed to advise Defendant that he could apply for relief from removal; and (2) that Defendant's attorney provided ineffective assistance of counsel when he conceded that Defendant's drug problem was for cocaine. The motion to dismiss was denied; the court reasoned that 1) Defendant was removable under the 1994 kidnapping conviction given that it was a crime of violence, and (2) that the 2000 conviction was also a removable offense since it was for possession of methamphetamine. Additionally, the court concluded that even had Defendant been granted relief from removal in 1994, that would only have made Defendant ineligible for relief from removal of the 2000 conviction.

The case went to trial and the jury was unable to reach a verdict. Defendant claimed that the statute of limitations had begun to run in 2001 when he presented his ID card to a border agent and as such had already expired. However, the court denied this motion since the statute of limitations tolls if a defendant gains readmission to the US by providing false travel documents. Based on these findings, the court found Defendant guilty and he was sentenced to 37 months in prison Defendant appeals on the grounds that the district court erred by: (1) denying Defendant's motion to dismiss due to underlying deportation proceedings; (2) omitting a jury instruction on constructive knowledge; and (3) denying Defendant's motion for acquittal at the close of evidence.

The 9th Circuit ("the panel") reviewed de novo the district court's denial of a motion to dismiss an indictment. Reviewing the underlying deportation proceedings, the panel held Defendant failed to successfully attack the proceedings. In order to successfully challenge the validity of the underlying deportation order, the Defendant must show that (1) he exhausted any available administrative remedies for relief against the order; (2) the deportation proceedings denied him the opportunity for judicial review; and (3) the entry of the order was "fundamentally unfair." The order is "fundamentally unfair" only if Defendant shows both that his due process rights were violated and that he was prejudiced as a result.

Here, both of Defendant's convictions made him removable. The fact that his attorney admitted that Defendant's 2000 conviction was for methamphetamine only served to relieve the government from any obligation of presenting evidence on the facts surrounding the drug offense. Even if the immigration judge then erred by failing to advise Defendant that he could apply for relief from removal, Defendant was not prejudiced here since obtaining relief for the 1994 conviction would have made him ineligible for the same relief in 2000. In other words, even if Defendant had obtained relief in 1994 he would still have been removable after his 2000 conviction.

While Defendant also claimed that he was ineffectively assisted by counsel, the standard for such claims under the Fifth Amendment in immigration cases is higher than the Sixth Amendment standard set forth in other caselaw. Here, the panel found that Defendant failed to meet even the lesser Sixth Amendment standard and as such would necessarily fail the Sixth Amendment requirements. Defendant's counsel could not have been expected to make legal arguments that had yet to be established at the time of Defendant's removal proceeding. Additionally, Defendant failed to demonstrate prejudice here since he fails to allege that the admission by his attorney was factually inaccurate here. Given this, the panel held that Defendant's counsel did not perform below an objective standard of reasonableness here.

The panel next turned to Defendant's challenge of the jury instructions given. The instructions were reviewed de novo for their accuracy and for abuse of discretion as to their formulation. The statute of limitations begins to run when an alien is discovered and identified by the immigration authorities. This rule is justified by the fact that states do not wish to reward deception by allowing such deception to toll the statute of limitations. Here the only facts available to the border patrol agents was that they were presented with a seemingly valid travel document and even the exercise of due diligence would not have allowed the agents to discover that Defendant's entry was illegal. As such, the panel declined to allow Defendant's status to be imputed through constructive knowledge.

Lastly, the panel rejected Defendant's argument that no reasonable jury could have found he failed to meet his burden of proving his statute of limitations defense and as such that his motion for acquittal should have been granted. Given the panel's above analysis regarding the statute of limitations defense, the panel found this final argument unpersuasive.

For the reasons listed above, the 9th Circuit affirmed the Defendant's conviction for being found in the US after reentering without permission.

Panel: Judges Wallace, Schroeder, and Owens

Date of Issued Opinion: January 14, 2015

For the Full Opinion: http://cdn.ca9.uscourts.gov/da...15/01/14/13-10322.pdf

Docket Number: 3:12-cr-00532-WHA-1

Decided: Affirmed

Case Alert Author: Seth DuMouchel

Author of Opinion: Judge Wallace

Case Alert Circuit Supervisor: Professor Ryan T. Williams

Edited: 03/06/2015 at 02:13 PM by Ryan Williams

    Posted By: Ryan Williams @ 03/04/2015 01:30 PM     9th Circuit     Comments (0)  

  City of San Jose v. Bud Selig; Commissioner of Baseball - Ninth Circuit
Headline: Ninth Circuit Declares Baseball Exemption Bars Antitrust Claims Regarding Franchise Relocations

Areas of Law: Antitrust Law, Unfair Competition Law

Issue Presented: Whether the Major League Baseball's delay in granting approval of the Oakland Athletics' franchise relocation to San Jose violated state and federal antitrust laws, California's consumer protection statute, and California tort law.

Brief Summary: Having believed that a several-year delay of approval of relocating the Oakland Athletics' franchise was actually an attempt to halt its relocation to San Jose, the city ("Plaintiff") filed suit against the Major League Baseball and its commissioner, Bud Selig ("Defendants"). Plaintiff alleged violations of state and federal antitrust laws, California's consumer protection statute, and California tort law. Applying the baseball exemption, the district court granted Defendants' motion to dismiss all but the tort claims.

The Ninth Circuit, under the authority of both case law and Congressional acquiescence, maintained that the baseball exemption barred antitrust claims against "the business of providing public baseball games for profit." Because designation of franchises to particular geographic territories interferes with the public exhibition of professional baseball, the Court determined that franchise relocation falls within the scope of the baseball exemption and affirmed the holding of the district court.

Extended Summary: In an attempt to increase profits, the Oakland Athletics entered into an option agreement with the City of San Jose ("Plaintiff") to build a stadium and relocate the franchise. However, because San Jose falls within the exclusive operating territory of the San Francisco Giants, three-quarters of the Major League Baseball's clubs were required to approve the relocation. In 2009, a "special Relocation Committee" was established to investigate the implications of the move for the league. Four years later, the committee had not yet approved the move, leaving the land to sit unused.

Having believed the delay was an attempt to halt relocation and preserve the Giants' local monopoly, Plaintiff filed suit against the MLB and its commissioner, Bud Selig ("Defendants"), alleging violations of state and federal antitrust laws, California's consumer protection statute, and California tort law. The district court, applying the baseball exemption, granted Defendants' motion to dismiss all but the tort claims. The court declined to retain supplemental jurisdiction over the tort claims and dismissed them without prejudice.

In its discussion, the Ninth Circuit provided the scope of baseball's exemption from antitrust laws through three cases: Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, Toolson v. New York Yankees, Inc, and Flood v. Kuhn. In Federal Baseball, the US Supreme Court held that the Sherman Antitrust Act did not apply to the business of "giving exhibitions of base ball [sic.]" because such "exhibitions" were a state affair. Toolson affirmed Federal Baseball, recognizing that Congress had considered bringing baseball under federal antitrust laws by legislation, but chose not to. Flood also upheld the baseball exemption under the principle of stare decisis and the understanding that Congress accepted the holdings in Federal Baseball and Toolson.

Plaintiff argued that the holding in Flood should have been limited to its facts and applied only to baseball's reserve clause rather than to franchise relocation. In the alternative, Plaintiff argued that if the baseball exemption did extend beyond the reserve clause, the case must be remanded to the district court to determine whether franchise relocation was sufficiently related to "baseball's unique characteristics and needs" as stated in Flood and warranted exemption.

The Ninth Circuit rejected Plaintiff's argument by referencing Portland Baseball Club, Inc. v. Kuhn, in which that court cited to Flood even though the antitrust claim had nothing to do with the reserve clause. With respect to Plaintiff's alternative argument, the Ninth Circuit pointed out that other than the isolated language quoted by Plaintiff, nothing else in Flood suggested that the reserve clause was exempted based on some fact-sensitive analysis of its role within the baseball industry. Instead, the exemption extended to the entire "business of providing public baseball games for profit between clubs of professional baseball players." Although the Court noted that the baseball industry is not completely immune from antitrust suits, it identified that the designation of franchises to particular geographic territories fell within the ambit of providing public baseball games for profit, and thus resulted in its exemption. The Court also added that Congress' enactment of the Curt Flood Act of 1998 withdrew baseball's antitrust exemption with respect to the reserve clause but explicitly maintained it for franchise relocation.

As with the federal claims, Plaintiff's state antitrust claims were equally unpersuasive according to the Court. The Court noted that state antitrust claims constituted an impermissible end run around the baseball exemption. Furthermore, the Court found no violation of California's unfair competition law because Defendants' conduct was not found to be an unreasonable restraint of trade.

Accordingly, the Court affirmed the holding by the district court.

For the full opinion: http://cdn.ca9.uscourts.gov/da...9%20Opinion.pdf


Panel: Alex Kozinski, Barry G. Silverman, and Richard R. Clifton, Circuit Judges

Date of Issued Opinion: January 15, 2015

Docket Number: 14-15139

Decided: Affirmed.

Case Alert Author: Daniel S. Seu

Counsel: Joseph W. Cotchett (argued), Philip L. Gregory (argued), Frank C. Damrell, Jr., Anne Marie Murphy, Camilo Artiga-Purcell of Cotchett, Pitre & McCarthy, LLP, Burlingame, California, and Richard Doyle, Nora Frimann, of the Office of the City Attorney, San Jose, California for Appellants; John W. Keker (argued), Paula L. Blizzard, R. Adam Lauridsen, Thomas E. Gormanof Keker & Van Nest LLP, San Francisco, California, and Bradley I. Ruskin of Proskauer Rose LLP, New York, New York, and Scott P. Cooper, Sarah Kroll-Rosenbaum, Jennifer L. Roche, Shawn S. Ledingham, Jr. of Proskauer Rose LLP, Los Angeles, California for Appellees.

Author of Opinion: A. Kozinski, Circuit Judge.

Case Alert Circuit Supervisor: Professor Ryan T. Williams

Edited: 03/04/2015 at 01:34 PM by Ryan Williams

    Posted By: Ryan Williams @ 03/04/2015 01:26 PM     9th Circuit     Comments (0)  

January 30, 2015
  Saldana v. Occidental Petroleum - Ninth Circuit
Headline: Ninth Circuit panel affirms the dismissal by the district court of an action in which family members of three union leaders killed in Columbia sued Occidental Petroleum under the Alien Tort Statute and California tort law, as the action raised nonjusticiable political questions.

Area of Law: Political Question Doctrine

Issue Presented: Whether the district court had subject matter jurisdiction over a claim when Plaintiffs "advanced no theory of liability . . . that would not apply with equal force to the foreign policy and national security determinations made by the political branches."

Brief Summary: Plaintiffs were family members of three union workers killed by several soldiers who belonged to the 18th Brigade of the Colombian National Army ("CNA"). The murders occurred in 2004. After a hearing by Colombian courts, the soldiers were found guilty; however the 18th Brigade was absolved of any responsibility for the soldier's actions. A further hearing by the United Nations Office of the High Commissioner for Human Rights also concluded the soldiers acted alone and not part of any general government policy.

Seven years later, Plaintiffs sued Occidental Petroleum in the Central District of California under the Alien Tort Statute and California tort law, claiming Occidental bore responsibility for the murders. Their theory was that, since Occidental's Colombian subsidiary, OxiCol, had provided funding to the 18th Brigade in return for protecting a pipeline under OxiCol's control, Occidental had control of the18th Brigade and was therefore ultimately responsible for these murders.

The district court dismissed the complaint, finding that, since both Occidental and the United States government provided funding to the 18th Brigade, Plaintiffs had established no separate cause of action that would not implicate United States foreign policy. Therefore, the court held the claims advanced were nonjusticiable due to the political question doctrine. Plaintiffs appealed to the Ninth Circuit.

The Ninth Circuit panel reviewed the issue de novo. The panel applied the six-factor test elucidated in Baker v. Carr, 369 U.S. 186 (1962), and determined there was no way to sever Plaintiffs' claims from the political question doctrine. Since Plaintiffs advanced no theory explaining Occidental's control over the 18th Brigade that did not involve Occidental's partial funding of the Brigade, and the United States was also involved in funding the 18th Brigade, any adjudication involving this issue would necessarily involve second guessing U.S. Foreign policy.


Extended Summary: Occidental Petroleum ("Occidental") is a Houston based oil and gas exploration and production company. Occidental is a Delaware corporation, and has headquarters in Los Angeles, where it was founded in 1920. In 2004, Occidental was engaged in exploration for oil and natural gas in Colombia. At that time, the Colombian government, often with the assistance of the U.S. government, was involved in a conflict with leftist guerrilla groups, most notably the Revolutionary Armed Forces of Colombia ("FARC") and the National Liberation Army ("ELN").

Occidental's Colombian subsidiary, Occidental de Colombia ("OxyCol"), together with Ecopetrol, Colombia's state-owned oil company, had previously discovered a large oil field. OxyCol and Ecopetrol built a pipeline to transport the oil from the oil field to the coast, to be transported by tanker. OxyCol operated the pipeline while Ecopetrol, OxyCol, and a Spanish oil company called Repsol, controlled the oilfield. The pipeline cut through guerrilla territory, and was subjected to increasing attacks from guerrilla forces in the early 2000's as the guerrillas attempted to disrupt the Colombian economy.

In response, the United States, through a $99 million aid program, attempted to help secure the pipeline from guerrilla attacks. Part of this aid went to funding, training, and equipping the 18th Brigade, part of the Colombian army. U.S. Special Forces were involved in training the 18th Brigade. In May 2004, Ecopetrol agreed to provide the Colombian Ministry of National Defense with financial support in exchange for increased protection of the pipeline. Neither Oxycol nor Occidental were signatories to the agreement, but along with the United States government, also began to provide funding.

In August 2004, four members of the 18th Brigade assisted by a civilian murdered three union leaders. They claimed the leaders were guerrillas who had attacked the soldiers. The families of the union members claimed the soldiers executed the union leaders. The union leaders were part of a larger protest movement. This movement claimed the pipeline was responsible for environmental destruction, and also claimed the Columbian National Army ("CNA") was committing "acts of barbarity" in connection with protecting the pipeline. Furthermore, the movement protested OxyCol's plan to drill on land belonging to the indigenous U'Wa people.

Proceedings in Colombia regarding the incident determined that the soldiers were guilty of executing the union leaders, but that they acted alone, without the involvement of the CNA. The United Nations Office of the High Commissioner for Human Rights also concluded the killings were not "committed as part of an official policy or that they were ordered by senior government officials. The United States State Department has asserted since then "that the Colombian Government and Armed Forces are meeting statutory criteria related to human rights and severing ties to paramilitary groups."

Plaintiffs filed suit against Occidental in 2011 in the Central District of California. Three causes of action were alleged under 28 U.S.C. § 1350, known as the Alien Tort Statute, and seven were alleged under California tort law. Plaintiffs claimed Occidental was responsible for the actions of its subsidiary, OxiCol. Plaintiffs claimed the financial support given the 18th Brigade by OxiCol made the 18th Brigade OxiCol's personal security force, with operational control over the 18th Brigade's activities. The complaint alleged that "Occidental knew or should have known" of "widespread human rights violations" committed by the CNA, in particular, the 18th Brigade. Plaintiffs alleged this knowledge and control of the 18th Brigade by Occidental's Colombian subsidiary made Occidental responsible for war crimes committed by the 18th Brigade against Colombian civilians.

The district court granted Occidental's 12(b)(1) motion to dismiss on political question grounds. The court relied on Baker v. Carr, 369 U.S. 186 (1962), and Corrie v. Caterpillar, Inc., 503 F.3d 974 (9th Cir. 2007). The District Court held "that Plaintiffs 'advanced no theory of liability that would not apply with equal force to the foreign policy and national security determinations made by the political branches . . .'" and therefore the political question doctrine could not be avoided. Since Plaintiffs had not requested additional time for discovery, the suit was dismissed with prejudice.

The Ninth Circuit panel reviewed the district court's dismissal for lack of jurisdiction de novo. The panel determined they may "look beyond the compliant to facts properly in the record, id. at 982, and 'need not presume the truthfulness of the plaintiffs' allegations,' White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000)."

The Court stated that, as held in Marbury v. Madison, 5 U.S. (1 Cranch) 137, 170 (1803), the judicial branch has no jurisdiction over political questions due to the separation of powers between the branches of government. The determinative factor is whether or not "Plaintiff's claims implicate a nonjusticiable political question." Baker, supra, provides a six factor test with which to weigh each claim in the complaint. These factors include (1) whether a political department has a constitutional commitment to the issue; (2) no judicially discoverable or manageable standards to resolve the issue; (3) the impossibility of deciding whether the issue is fit for judicial review without first considering the policy non-judicially; (4) whether a judicial resolution would express lack of respect for the other branches of government; (5) a requirement for adherence to previously made political decisions; or (6) the potential of embarrassment to other branches of the government.

Applying these factors, the Ninth Circuit panel determined the district court's analysis was correct. The panel concluded that, once the complaint was "stripped of implausible allegations," each of the Plaintiff's claims of Occidental's "control" of the 18th Brigade rested on nothing more than Occidental's partial funding of the 18th Brigade. The court could find no "principled way to sever Occidental's funding from that of the United States . . . ."

Therefore, the allegations in the complaint were "inextricably bound" with the political question of "the propriety of the United States' decision to provide $99 million worth of training and equipment at the same time and for the same purpose as Occidental allegedly providing $6.3 million - and thus beyond the jurisdiction of our courts."

This holding was supported by Corrie v. Caterpillar, supra, in which Plaintiffs sued Caterpillar for supplying bulldozers to the Israeli Defense Forces, one of which crushed Rachel Corrie, a protestor of Israel's practice of demolishing homes that belonged to the families of terrorists. Since the sales of Caterpillar tractors to the Israeli military was financed by the United States government, the court dismissed the complaint, as "the action 'would necessarily require the judicial branch . . . to question the political branches' decision to grant extensive military aid to Israel.'"

The Court went on to explain that Plaintiffs were wrong in asserting the Court need only consider Occidental without looking to the United States government's role since United States foreign policy would have to be considered in a resolution of the case. Plaintiff's cited cases in support of this argument that Occidental's role could be considered separately from that of the United States government, but the cases Plaintiffs cited dealt with execution of military-related operations, and not the policy behind them, and so were therefore distinguishable from this case. Plaintiff's might have been able to sever their claims under their agency theory of liability and negligent hiring, but they failed to "plausibly plead those claims, because they have not pleaded 'factual content that allows the court to draw the reasonable inference that' Occidental had operational control of the 18th Brigade."

Lastly, Plaintiff's asserted the failure of the State Department to submit a statement of interest "indicates a lack of conflict." However, precedence "clearly state[d] that the State Department's silence on this issue [was] a neutral factor. Alperin, 410 F.3d at 556." And since Plaintiff's did not pursue discovery on the political question issue below, the Ninth Circuit panel declined to consider this issue.

Judge Trott, in his concurring opinion provided more background information which supported the finding that the complaint raised nonjusticiable political questions.

For the full opinion: http://cdn.ca9.uscourts.gov/da...14/12/15/12-55484.pdf

Panel: Alex Kozinski, Stephen S. Trott, and Consuelo M. Callahan, Circuit Judges

Date of Issued Opinion: December 15, 2014

Docket Number: 12-55484

Decided: Affirmed

Case Alert Author: Michael Zatlin

Counsel: Terrence P. Collingsworth (argued), Conrad & Scherer, LLP,
Washington, D.C., for Plaintiffs-Appellants. Matthew T. Kline (argued) and Dimitri D. Portnoi,
O'Melveny & Myers LLP, Los Angeles, California; Jonathan
Hacker and Anton Metlitsky, O'Melveny & Myers LLP,
Washington, D.C., for Defendant-Appellee.

Author of Opinion: Per Curiam. Concurrence by Judge Trott.

Case Alert Circuit Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 01/30/2015 05:38 PM     9th Circuit     Comments (0)  

  Campion v. Old Republic Protection Company, Inc. - Ninth Circuit
Headline: Ninth Circuit Dismisses Appeal in Class Action as Moot after Class Representative Voluntarily Settled Individual Claims

Areas of Law: Civil Procedure

Issue Presented: Whether an appeal in a class action becomes moot after the putative class representative voluntarily settled his individual claims and no longer had a financial interest in the outcome of the case, even though he expressly retained his right to appeal.

Brief Summary: After the district court denied class certification and granted partial summary judgment in favor of Old Republic Protection Company, Inc. ("Old Republic"), Douglas Campion ("Campion") reached a settlement agreement in which he agreed to dismiss the putative class claims without prejudice but reserved whatever right to appeal that he had.

In a concise per curium opinion, the Ninth Circuit panel ruled that an appeal in a class action suit requires that the class representative retain a personal stake in the case. Without such appropriate interest, Campion lacked standing, ultimately resulting in mootness of the class action.

Extended Summary: Campion brought a class action against Old Republic, a company that sells home warranty plans, alleging that it arbitrarily denied claims made by him and similarly situated policyholders and cheated them out of benefits owed under their policies.

After the district court denied class certification and granted partial summary judgment in favor of Old Republic, Campion reached a settlement agreement in which he agreed to dismiss the putative class claims without prejudice but reserved whatever right to appeal that he had.

The panel cited to Narouz v. Charter Commc'ns, LLC and explained that the test for whether an appeal is moot after the putative class representative voluntarily settles his individual claims is whether the class representative retains a personal stake in the class claim. A personal stake in the class claim, according to the Court, turned on the language of the settlement agreement. The panel further explained that a personal stake must also be concrete or financial in nature if the putative class representative voluntarily settles his or her claims. When his or her claims expire involuntarily the class representative's personal stake may, in some circumstances, include theoretical interests such as those akin to a private attorney general.

Within the framework of Narouz, the facts that Campion voluntarily settled all his claims and would not receive a penny more no matter what would happen on appeal led the panel to conclude that Campion, as the class representative, lacked any concrete or financial interest in the class claim. Without the possibility of gaining any more compensation for his claims, attorney's fees, costs, or damages, Campion fell short of the standing requirements, and the appeal was therefore dismissed as moot.

Though in agreement with the outcome, Circuit Judge Owens dissented from the majority's holding that the appeal is moot, specifically disagreeing with the majority's interpretation of the "financial-in-nature" limitation in Narouz. Judge Owens opined that nothing in Narouz or any other Ninth Circuit case required the personal stake to be financial. Judge Owens reminded the majority that courts have recognized non-financial personal stakes such as vindication of the class's interests, the procedural right to represent a class, and the right to pursue class-wide injunctive relief. In addition, Judge Owens referred to Pitts v. Terrible Herbst, Inc. and stated that "a plaintiff whose individual claims become moot may appeal the denial of class certification so long as he retains 'either an individual economic interest... or a private-attorney-general-like interest in having a class certified if the requirements of rule 23 are met.'"

Nevertheless, Judge Owens concluded his dissent by predicting that the Supreme Court will someday rule in accordance with the majority in this case. Until then, he "read[s Ninth Circuit] precedent differently than [his] colleagues do."]

For the full opinion: http://cdn.ca9.uscourts.gov/da...14/12/31/12-56784.pdf

Panel: Andrew J. Kleinfeld, Susan P. Graber, and John B. Owens, Circuit Judges.

Date of Issued Opinion: December 31, 2014.

Docket Number: 12-56784

Decided: Dismissed as moot.

Case Alert Author: Daniel S. Seu

Counsel: Yury A Kolesnikov (argued) and Francis A. Bottini, Jr. (briefed), Bottini & Bottini, Inc., La Jolla, California, for Plaintiff-Appellant; Jay N. Varon (argued), Foley & Lardner LLP, Washington, D.C., Tammy H. Boggs (briefed), Foley & Lardner LLP, San Diego, California, for Defendant-Appellee.

Author of Opinion: Per Curiam.

Case Alert Circuit Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 01/30/2015 05:37 PM     9th Circuit     Comments (0)  

  U.S. v. Camou - Ninth Circuit
Headline: 9th Circuit reversed district court's denial of motion to suppress images of child pornography due to warrantless search by police.

Area of Law: Criminal law

Issue Presented: Whether defendant's motion to suppress images of child pornography found on his cell phone during a warrantless search should have been granted.

Brief Summary: Camou, the defendant, and a co-defendant were arrested while smuggling an undocumented immigrant. Camou's truck was seized, as well as a cell phone found inside the cab of the truck. Approximately one hour and twenty minutes after Camou's arrest and after interviewing the co-defendant, a Border Patrol agent conducted a warrantless search of Camou's cell phone and found numerous images of child pornography. Several days later the United States Attorney's Office executed a federal search warrant for Camou's cell phone and found hundreds of images of child pornography.

During criminal proceedings, Camou made a motion to suppress the images found on his cell phone but the district court denied the motion as being a lawful search incident to arrest as well as being covered by the good faith and inevitable discovery exceptions to the exclusionary rule. Camou the entered a conditional guilty plea and now appeals the denial of his motion to suppress.

The Ninth Circuit panel held that the search was not a lawful search incident to arrest given the one hour and twenty minute time delay between the arrest and the search combined with the number of intervening events between the arrest and the search. Furthermore, given the lack of evidence suggesting any imminent destruction of evidence or danger to the Border Patrol agents, there were no exigent circumstances justifying the warrantless search. The panel also declined to find cell phones to be "containers" within the vehicle exception given the qualitative difference between cell phones and anything precedent has been found to be a container in the vehicle context. In addition, the panel refused to allow the inevitable discovery exception to excuse a failure to obtain a search where police had probable cause yet made no attempts to obtain a warrant. Lastly, the good faith exception was found to be inapplicable here as it was the agent's own negligence that led to the violation of Camou's rights.

Given the reasoning above, the panel reversed the district court's denial of Camou's motion to suppress.

Extended Summary: In 2009, while attempting to smuggle an undocumented immigrant, Camou, a co-defendant and the undocumented immigrant were arrested and Border Patrol agents seized Camou's truck and a cell phone found in the cab of the truck. Camou was moved to the checkpoint's security office for booking and the cell phone was inventoried as "'seized property and evidence'." During the interview process co-defendant said that Camou received a phone call from a specific number prior to picking up the undocumented immigrant. Camou's cell phone rang several times during the interview, all from the number the co defendant had previously identified. Camou admitted that the cell phone belonged to him but then invoked his right to remain silent.

Later, approximately one hour and twenty minut