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October 18, 2017
  Ganek v. Leibowitz - Second Circuit
Headline: Second Circuit Reverses Denial of Qualified Immunity and Dismisses Case Against FBI Agents and Federal Prosecutors Seeking Damages Arising From Alleged Improper Search of Manhattan Investment Fund
Area of Law: Constitutional

Issue(s) Presented:
Whether defendant federal agents and prosecutors were entitled to qualified immunity from plaintiff's damages suit alleging Fourth and Fifth Amendment violations arising from defendants' having procured and executed a federal search warrant of the plaintiff's investment fund office secured by a supporting affidavit containing a false statement.

Brief Summary: David Ganek, cofounder of the now-closed Manhattan-based Level Global (LG) Investors investment fund, sued several named Federal Bureau of Investigation ("FBI") agents and federal prosecutors from the Southern District of New York for damages resulting from alleged violations of his Fourth and Fifth Amendments arising from their procuring and executing a federal search warrant of his LG office as part of a 2010 insider trading probe. The defendants moved to dismiss Ganek's claims in the United States District Court for the Southern District of New York on the grounds that they were protected from liability for damages by qualified immunity. The district court denied the dismissal on all but two of Ganek's claims, rejecting the agents' and prosecutors' claims of qualified immunity on most of the claims. On timely appeal, the Second Circuit reversed the district court's ruling, holding that the agents and prosecutors were, in fact, entitled to qualified immunity on the remaining claims.

To read the full opinion, please visit:
">http://www.ca2.uscourt.../de.....0/1/hilite/


Extended Summary: David Ganek is a co-founder of the now-defunct multi-billion dollar New York-based Level Global (LG) Investors investment fund. In October 2010, Spyridon Adondakis, a research analyst who had been employed by LG until his dismissal just months earlier, was approached by three FBI agents, defendants in this case, with wiretap evidence that they alleged proved he was guilty of engaging in insider trading while he was still employed at LG. Adondakis admitted to knowingly participating in insider trading and subsequently sharing that sensitive information with three employees at LG, including Ganek. Adondakis agreed to cooperate with the federal authorities and subsequently met with the FBI agents and two Assistant United States Attorneys (AUSAs), also defendants here. In that meeting, Adondakis told the prosecutors and agents that he provided inside information to LG co-founder Anthony Chiasson, Ganek, and a third employee. Adondakis further stated that he informed Chiasson and the third employee that the information he was providing to them came from an inside source, however, he explicitly stated that he did not tell Ganek the source of this information.

In November 2010, FBI agent defendants applied to a Southern District of New York Magistrate Judge for a warrant to search LG offices. The affidavit submitted in support of the warrant application included the misstatement that Adondakis had informed Ganek, as well as the other two LG employees, that the information he was conveying to him was from inside sources, despite Adondakis's statements to the agents to the contrary as to Ganek. The magistrate judge authorized the warrant and on November 22, 2010, federal agents executed its search of the LG office, including a search of Ganek's office, computer and telephone. In subsequent exchanges with AUSAs involved in the investigation, named here as defendants, as well as with United States Attorney Preet Bharara, also a named defendant, LG representatives expressed concern that the search would cause investors to withdraw from the fund and asked that the prosecutor's office issue a statement that Ganek was not a target of the probe and that the office search did not constitute probable cause that Ganek engaged in insider trading. That request was denied and LG representatives were told that the search with initiated with full consideration at the highest levels of the possible financial consequences to LG. Co-founder Chiasson was subsequently tried and convicted of securities fraud based upon insider trading, with Adondakis testifying as a cooperating witness at his trial. Ganek was never charged with insider trading, however, in February 2011 he closed the LG fund due, he said, to the flight of investors.

In February 2015, Ganek filed this complaint in the United States District Court for the Southern District of New York seeking money damages to recover the loss in value of the LG fund. In it, he charged named FBI agents and federal prosecutors with Fourth and Fifth Amendment violations arising from improperly procuring and executing the 2010 search warrant, alleged failure-to-intercede claims against all defendants, and asserted a claim for supervisory liability against specific named AUSAs and United States Attorney Bharara. Specifically, Ganek alleged that procuring and ultimately executing the office search pursuant to a supporting affidavit falsely stating that Ganek had been told by Adondakis that the information was from inside sources constituted an unreasonable search and seizure under the Fourth Amendment as well as the deprivation of property without due process in violation of the Fifth Amendment. Defendants moved to dismiss all of Ganek's claims on the theory that they were protected from suit by qualified immunity. The district court denied the motion as to all but two of Ganek's claims. On appeal, the Second Circuit reversed the lower court's finding, ruling that the defendants were entitled to qualified immunity and remanding the case for dismissal.

Qualified immunity is meant to protect law enforcement officers from claims for money damages in connection with carrying out their professional duties. A plaintiff may circumvent this protection and move forward with their claims if he or she is able to plead facts showing that "the official violated a statutory or constitutional right;" and "that the right was clearly established at the time of the challenged conduct." The Second Circuit found, in this case, that Ganek failed to plead facts supporting a Fourth Amendment unreasonable search and seizure claim or a Fifth Amendment claim of deprivation of property without due process because a hypothetical corrected affidavit would nevertheless have supported probable cause for the search warrant. The court reasoned specifically that, even assuming the statement that Ganek had been told Adondakis's information came from insider sources in the affidavit was false, that statement was not central to finding probable cause for the search and therefore there was no constitutional violation. The Court further found that, because Ganek's Fourth and Fifth Amendment claims failed, his failure to intercede claim must also fail. Lastly, the Court ruled that the Ganek did not provide sufficient facts to prove that the named supervisors had enough personal involvement with the submission of the misstatement to the magistrate judge for the search warrant to support allegations for supervisory liability.

To read the full opinion, please visit:
">http://www.ca2.uscourt.../de.....0/1/hilite/


Panel: Judges Raggi, Chin, and Carney

Argument Date:
3/24/2017

Argument Location: New York, NY

Date of Issued Opinion:
10/17/2017

Docket Number: No. 16-1463-cv

Decided:
Reversed and Remanded

Case Alert Author:
Ollia Pappas

Counsel:
Nancy Gertner (Anna Benvenutti Hoffmann, Barry Scheck, Nick Brustin, Farhang Heydari, Alexandra Lampert, Rick Sawyer, on the brief); Neufeld Scheck & Brustin, LLP for Plaintiff-Appellee; Sarah S. Normand (Andrew E. Krause, Jeffrey S. Oestericher, Assistant United States Attorneys, on the brief), Assistant United States Attorney for Joon H. Kim, Acting United States Attorney for the Southern District of New York, for Defendants-Appellants.

Author of Opinion: Judge Raggi

Case Alert Circuit Supervisor: Professor Elyse Diamond

Edited: 10/18/2017 at 01:47 PM by Elyse Diamond

    Posted By: Elyse Diamond @ 10/18/2017 09:55 AM     2nd Circuit     Comments (0)  

October 17, 2017
  Secretary United States Department of Labor v. American Future Systems, Inc. d/b/a Progressive Business Publications, a
Headline: Employers are required to compensate employees for all rest breaks of twenty minutes or less.

Area of Law: Labor and Employment Law

Issue(s) Presented: Is an employer, who permits employees to take breaks during working hours for any reason, required under the Fair Labor Standards Act to compensate employees for any breaks of twenty minutes or less.

Brief Summary: The Fair Labor Standards Act requires employers to compensate their employees for any break periods of twenty minutes or less. American Future Systems d/b/a Progressive Business Publications (Progressive), and its President, Edward Satell, instituted a "flex time" policy in which employees were entitled to log off of their computers throughout the work day at will and for any reason. However, employees were only compensated for the time spent logged in. Progressive did not consider its employees' "flex time" as a "break," and argued that it was therefore not a violation of the FLSA to deny compensation. The Third Circuit held that Progressive's "flex time" did constitute breaks, and that it was required to compensate employees for any breaks of twenty minutes of less. Furthermore, the Third Circuit awarded liquidated damages for the compensation that Progressive had failed to pay its employees.

Extended Summary: Progressive distributes business publications, which it sells through sales representatives. Its sales representatives are paid an hourly wage and they are evaluated on their performance while logged in to the system. They receive extra compensation and bonuses based on sales rates per hour. They are also expected to maintain a certain sales rate per hour while logged in or can be disciplined or even sent home for the day. In 2009, Progressive transitioned from a break policy in which employees received two fifteen-minute breaks per day to a "flex time" system. Under the new system, employees were allowed to take "flex time" at will for any reason simply by logging off the system. This "flex time" included using the bathroom or taking a coffee break. There was no limit set on the duration; however, once the employee was logged off for more than ninety seconds, he was considered on "flex time." Furthermore, employees were only compensated for time that they were logged in to the system; they were not compensated for "flex time."

Under the new system, employees were also required to estimate their expected working hours over a two-week period. Employees could choose to work anytime Monday-Friday between the hours of 8:30-5:30. Employees could not work more than forty hours per week, and they were required to meet their estimated goals. Under that system, the average employee was only compensated for just over five hours per day at the federal minimum wage of $7.25/hour.

The Secretary of the United States Department of Labor brought this lawsuit on behalf of Progressive's employees for violation of the Fair Labor Standards Act, which requires employers to compensate employees for all breaks of twenty minutes or less. The district court granted partial summary judgment to the Secretary on its claim that Progressive's employees were denied federal minimum wages through the failure to compensate break times of twenty minutes or less. The district court also granted liquidated damages in an equal amount for the compensation Progressive withheld from its employees. In so doing, the district court applied the Department of Labor, Wage and Hour Division's ("WHD") interpretation of the FLSA. Under that interpretation, breaks of five to twenty minutes are viewed as "common in the industry," "promote the efficiency of the employee," and are "customarily paid." As such, breaks of twenty minutes or less must be compensated and count as working hours.

On appeal, Progressive claimed that its "flex time" hours were not breaks. It argued that employees are not working unless they are logged into the system. Its employees are free to log out at any time for any duration; when employees log back in, they are back at work. The Third Circuit held that this view of "work" conflicts with the purpose of the FLSA. The FLSA requires employers to compensate employees for "hours worked," but does not define "work." The flex time provided for by Progressive, however, is clearly a "break" under the FLSA. The Court explained that, under Progressive's system, employees are forced to choose between being compensated for working hours and satisfying basic needs, such as using the bathroom, which would require more than ninety seconds.

Next, Progressive argued that the WHD's interpretation was given too much deference by the district court. However, the Third Circuit agreed with the district court's reliance on the WHD for several reasons. First, the WHD's interpretation was ratified by Congress in 1940. Second, the Department of Labor has consistently relied on the WHD's interpretation for over 46 years. Third, the Third Circuit found the interpretation to reasonable based on the language of the FLSA.

Finally, Progressive argued that the district court's reliance on 29 C.F.R. § 785.18 - which states that employees must be compensated for breaks of twenty minutes or less - as a bright-line rule was wrong. Progressive argued that 29 C.F.R. § 785.16 is more applicable. Under § 785.16, periods during which employees are "completely relieved of duties" and for personal reasons are not considered working hours. The Third Circuit disagreed. It noted that § 785.16 is a general section and § 785.18 is more narrowly defined to specifically address breaks of twenty minutes or less. Furthermore, such breaks are viewed by the WHD as time that improves the effectiveness of workers. Therefore, the short breaks are as much for the benefit of employers as they are personal in nature.

Progressive then claimed that allowing employees to take paid breaks under its flex-time system would lead to employees taking an unlimited number of nineteen-minute breaks throughout the day. The Third Circuit reasoned that proper recourse for such action by an employee was discipline or termination, not withholding of wages. Finally, the Third Circuit also affirmed the district court's award of liquidated damages equal to the compensation withheld.
The Third Circuit, thus, affirmed the judgment of the district court.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/162685p.pdf

Panel: McKee, Rendell, Fuentes, Circuit Judges

Argument Date: February 9, 2017

Date of Issued Opinion: October 13, 2017

Docket Number: No. 16-2685

Decided: Affirmed

Case Alert Author: Michael R. DeAngelo

Counsel: Alfred W. Putnam, Jr., Esq, Dorothy A. Hickok, Esq., Sarah E. Bouchard, Esq., and Lincoln O. Bisbee, Esq. for Appellant; M. Patricia Smith, Esq., Jennifer S. Brand, Esq., Paul L. Frieden, Esq., and Rachel Goldberg, Esq. for Appellee; Jonathan S. Krause, Esq. for Amicus-Appellant; Margaret W. Williamson, Esq. for Amicus-Appellee

Author of Opinion: McKee, Circuit Judge

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 10/17/2017 12:34 PM     3rd Circuit     Comments (0)  

October 10, 2017
  Paul Richard McGann v. Cinemark USA, Inc. - Third Circuit
Headline: A movie theater's failure to provide tactile interpretation to a deaf and blind patron constitutes a denial of the "full and equal enjoyment of the goods and services" of a "place of public accommodation" under the ADA.

Area of Law: Americans with Disabilities Act ("ADA")

Issue(s) Presented: Does a movie theater's failure to provide a deaf and blind patron with a tactile interpreter so he can experience a film in one of its theaters constitute a Title III of the ADA "special prohibition" regarding auxiliary aids and services and thus violates Title III's "general rule" that no individual shall be denied "full and equal enjoyment of the goods and services" of "a place of public accommodation?"

Brief Summary: Paul McGann, who is disabled within the meaning of the ADA, requested from Cinemark USA, Inc. an American Sign Language ("ASL") tactile interpreter so that he could experience a movie in his local Cinemark theater. Cinemark denied his request and McGann filed suit, claiming Cinemark violated Title III of the ADA, which requires public accommodations, such as movie theaters, to furnish auxiliary aids and services, which include qualified interpreters.
The ADA defines "auxiliary aid or service" to include a qualified interpreter. Furthermore, the Department of Justice ("DOJ") technical assistance materials, which provide implementation guidance on the ADA, specifically include tactile interpreters in the definition of auxiliary aids. Therefore, the Third Circuit found that an ASL tactile interpreter was a qualified interpreter under Title III of the ADA.
Next, the Third Circuit found that the entertainment service Cinemark provides includes furnishing auxiliary aids and services so that patrons with disabilities can have the economic and social experience of viewing a movie in a theater. According to the Third Circuit, a legislative purpose of the ADA is to allow individuals with disabilities to experience "mainstream American life," such as seeing a movie in a theater. Therefore, in denying McGann's request for an ASL tactile interpreter, Cinemark excluded or denied him from Cinemark's services.
Lastly, the Third Circuit determined that Cinemark's first defense failed, finding that a tactile interpreter would not "fundamentally alter the nature of the good, service, facility, privilege, advantage, or accommodation being offered" since the video, audio or physical experience of the movie would not be altered by the interpreter. The Third Circuit remanded the case to the district court for a factual determination of Cinemark's "undue burden defense" and vacated the district court's judgment in favor of Cinemark.

Extended Summary: Paul McGann, who is blind and deaf, requested from Cinemark USA, Inc. an ASL tactile interpreter so that he could experience a movie in his local Cinemark theater. Cinemark denied his request and McGann filed suit, claiming Cinemark violated Title III of the ADA. Title III of the ADA requires public accommodations, including movie theaters, to furnish auxiliary aids and services, which include qualified interpreters.
First, the Third Circuit established that there was no dispute that McGann is disabled within the meaning of the ADA and that Cinemark is a public accommodation under Title III of the ADA. Second, the Third Circuit considered whether McGann's requested ASL tactile interpreter was an "auxiliary aid or service." The ADA defines "auxiliary aid or service" to include a qualified interpreter. The Third Circuit noted an ASL tactile interpreter is a "qualified interpreter." Additionally, the Department of Justice ("DOJ") technical assistance materials, which are included in the DOJ implementing regulations for communicating with individuals who have vision, hearing, or speech disabilities, specifically mention tactile interpreters as auxiliary aids. Therefore, the Third Circuit found that an ASL tactile interpreter falls within the definition of an auxiliary aid or service under Title III.
Next, the Third Circuit considered whether Cinemark's failure to provide tactile interpretation of the movie excluded McGann from or denied him Cinemark's services. The Third Circuit reasoned that entertainment venues, such as movie theaters, provide an entertainment service to the public. That entertainment service includes selecting a movie of interest, purchasing a ticket to the movie, navigating to the correct auditorium, and providing auxiliary aids or services. The Third Circuit looked to Congress' intent in enacting the ADA, which was to address the "compelling need to integrate individuals with disabilities into the economic and social mainstream of American life." According to the Third Circuit, presenting movies in a theater and having the ability and opportunity to experience a movie "is a component of the social mainstream of American life." The Third Circuit reasoned that providing McGann with a tactile interpreter for a movie supports Congress' legislative intent. Thus, the Third Circuit concluded that a denial of McGann's request for a tactile interpreter excluded him or denied him from Cinemark's services, which is a violation of Title III of the ADA.
Having established that Title III's auxiliary aids and service requirement applies to McGann's request for a tactile interpreter, the Third Circuit analyzed Cinemark's defenses. Title III does not require a public accommodation to furnish a requested auxiliary aid or service if doing so would "fundamentally alter the nature of the good, service, facility, privilege, advantage, or accommodation being offered" or "would result in an undue burden." The Third Circuit found that because tactile interpretation of a movie does not require any changes to the physical environment or video or audio content of the movie, it does not significantly alter the essential nature of the services. Lastly, the Third Circuit evaluated Cinemark's undue burden defense, which under the DOJ regulations instructions of Title III include "significant difficulty or expense." The Third Circuit remanded the determination of this defense to the district court due to its fact-intensive nature.
The Third Circuit, thus, vacated the district court's entry of judgment for Cinemark and remanded the case for consideration of Cinemark's undue burden defense.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/162160p.pdf

Panel: Smith, Chief Judge, McKee and Restrepo, Circuit Judges

Argument Date: November 10, 2016

Date of Issued Opinion: October 6, 2017

Docket Number: No. 16-2160

Decided: Vacated and remanded

Case Alert Author: Katherine A. Osevala

Counsel: Carol A. Horowitz and Jeffrey M. Skakalski, counsel for Appellant; M. Brett Burns, Bridget J. Daley and Brian H. Simmons, counsel for Appellee; Vanita Gupta, Tovah R. Cadleron and Bonnie I. Robin-Vergeer, counsel for Amicus Curiae United States of America

Author of Opinion: Circuit Judge Restrepo

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 10/10/2017 03:12 PM     3rd Circuit     Comments (0)  

October 4, 2017
  In Re Asbestos Products Liability Litigation - Third Circuit
Headline: Third Circuit Holds That Manufacturer Can be Held Liable for Asbestos-related Injuries When the Injury Was a Reasonably Foreseeable Result of the Manufacturer's Conduct

Area of Law: Torts

Issue(s) Presented: When should a manufacturer of a product that does not contain asbestos be held liable for an asbestos-related injury caused by parts added on to the manufacturer's product?

Brief Summary: Roberta G. Devries and Shirley McAfee, widows of former United States Navy service members, filed separate complaints against several manufacturers that produced various metal products for naval ships. Devries and McAfee sued under negligence and strict liability theories. They alleged that their deceased husbands contracted cancer from exposure to asbestos-containing insulation added to the metal products. The manufacturers invoked the bare-metal defense, arguing that they should not be held liable because their products were made of pure metal and therefore cannot contain asbestos. Further, they should not be held responsible for asbestos-containing components added to their products post-sale. The district court applied a bright-line version of the bare-metal defense, finding that a bare-material manufacturer can never be held liable for injuries caused by later-added asbestos-containing materials, and granted the manufacturers' motion for summary judgment on both theories. On appeal, the Third Circuit found that maritime law principles favored a fact-specific standard, rather than a bright-line rule, and held that a manufacturer of a bare-metal product could be found liable if the injuries were a reasonably foreseeable result of the manufacturer's conduct. The Court remanded the matter for further proceedings consistent with the opinion.

Extended Summary: This case concerns the validity and extent of a manufacturer's bare-metal defense. Robert G. Devries' husband served in the United States Navy and worked aboard the U.S.S. Turner from 1957-1960. Shirley McAfee's husband, who also served in the Navy, served on two ships and worked in the Philadelphia Navy Shipyard. Both men died from cancer, allegedly caused by exposure to asbestos-containing insulation and components that were added to the ships' engines, pumps, boilers, blowers, generators, switchboards, steam traps, and other devices. Plaintiffs both filed complaints under negligence and strict liability theories. Since the alleged negligent acts occurred aboard naval ships, the case was governed by maritime law and was tried in the district court. The manufacturers moved for summary judgment and invoked the bare-metal defense, arguing that they could not be held liable because their products only consisted of metal and could not contain asbestos. The district court granted summary judgment in favor of the manufacturers.

Plaintiffs appealed because the district court did not address their negligence claims. The Third Circuit remanded and instructed the district court to determine the negligence issue based on either a bright-line rule or a fact-specific standard. The bright-line rule provides that a manufacturer of a bare-metal product can never be held liable for a plaintiff's injuries related to asbestos. The fact-specific standard allows a bare-metal manufacturer to be liable if the plaintiff's injuries were a reasonably foreseeable result of the manufacturer's conduct. The district court applied the bright-line rule and granted the manufacturers' motion for summary judgment on both the strict liability and negligence claims. Devries and McAfee appealed for a second time and the Third Circuit consolidated their appeals.

In order to determine whether the bare-metal defense was valid, the Third Circuit had to determine whether to use the bright-line rule or the fact-specific standard. Neither the Third Circuit nor the Supreme Court had addressed this issue, but other jurisdictions were split between the rule and the standard. The Court ultimately examined whether the rule or standard more appropriately aligned with the four maritime law principles: (1) deep concern with protection of sailors; (2) tradition of simplicity and practicality; (3) interest in protecting maritime commerce; and (4) preference for uniform rules to govern conduct and liability. The Third Circuit found that maritime law's deep concern with protection of sailors aligned with the standard approach because it allows for a greater number of injured sailors to be compensated. Next, the Court found that the second principle of simplicity and practicality could fit under either the bright-line rule or the fact-specific standard. It found that simplicity could relate to predictability, which would favor the bright-line rule, but it could also favor the fact-specific standard because it favors familiarity, which could be related to foreseeability. The Court disregarded the third and fourth principles because they did not favor one approach over the other. Looking at the principles in aggregate, the Court adopted the fact-specific standard.

Using the fact-specific standard, the Court held that a manufacturer could be found liable if decedents' injuries were a reasonably foreseeable result of the manufacturers' failure to provide a reasonable and adequate warning. Under prior case law, the Court reasoned that a bare-metal manufacturer may be subject to liability if it reasonably could have known, at the time it placed its product into the stream of commerce, that (1) asbestos is hazardous and (2) its product will be used with an asbestos-containing part, because (a) the product was originally equipped with asbestos-containing part that could reasonably be expected to be replaced over the product's lifetime, (b) the manufacturer specifically directed that the product be used with an asbestos-containing part, or (c) the product required an asbestos-containing part to function properly. However, the Court noted that this list is non-exhaustive and the bare-metal defense is a fact-specific inquiry that must be decided on a case-by-case basis. The Third Circuit remanded the negligence claims for further proceedings.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/162602p.pdf

Panel: Vanaskie, Shwartz, and Restrepo, Circuit Judges

Argument Date: March 27, 2017

Date of Issued Opinion: October 3, 2017

Docket Number: Nos. 16-2602 & 16-2669

Decided: Partially affirmed and remanded.

Case Alert Author: Emily Anderson

Counsel: Richard P. Myers, Esq. for Appellants Roberta G. Devries and Shirley McAfee; and John S. Howarth, Esq. for Appellee Buffalo Pumps, Inc.; and Shay Dvoretzsy, Esq. for Appellee CBS Corp.; and Lee J. Janiczek, Esq., Christopher, J. Keale, Esq. for Appellee Foster Wheeler LLC; and Timothy E. Kapshandy, Esq. and Rebecca K. Wood, Esq. for General Electric Co.; and Joseph I. Fontak for IMO Industries, Inc.; and Laurie J. Hepler, Esq. for Appellee Warren Pumps; and Carol A. VanderWoude, Esq. for Appellee Ingersoll Rand Co.

Author of Opinion: Judge Vanaskie

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 10/04/2017 12:53 PM     3rd 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 29, 2017
  EQT Production Company v. Wender -- Fourth Circuit
Creatures of the State: County Ordinances May Not Nullify State-Issued Licenses

Areas of Law: Environmental, Statutory Interpretation

Issue Presented: Whether a county ordinance banning the disposal of wastewater in state-licensed wells was preempted by state and federal laws that specifically permitted the activity.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held that the district court correctly determined Fayette County did not have the authority to nullify state-issued licenses to dispose of wastewater. The Fourth Circuit found the County's ordinance was preempted by West Virginia's Water Pollution Control Act and Oil and Gas Act. As such, EQT Production Company (a company engaged in licensed wastewater disposal) was granted a permanent injunction against enforcement of the ordinance.

Extended Summary: EQT Production Company ("EQT") is one of the largest natural gas producers in the Appalachian Basin. EQT operates approximately 200 conventional oil and natural gas wells in Fayette County, West Virginia. Because these wells generate wastewater during the natural gas production process (known to many as "fracking"), EQT stores the wastewater in short-term storage tanks so the water does not pollute the environment. But because these storage tanks often reach capacity, EQT operates one injection well in the County, which it uses to permanently dispose of the excess wastewater.

Both the production and disposal processes are heavily regulated by state and federal laws. For example, West Virginia state law governs, among other things, permanent wastewater disposal, including the permitting of injection wells. EQT held a permit for its injection well and its well never posed any apparent danger. Nevertheless, on January 12, 2016, the Fayette County Commissioners enacted the "Ordinance Banning the Storage, Disposal, or Use of Oil and Natural Gas Waste." The Ordinance banned the use of "injection wells for the purpose of permanently disposing of natural gas and oil waste." Furthermore, the Ordinance specifically stated that holders of state or federal permits were not exempt from enforcement.

EQT challenged this enactment, contending that the County's blanket ban was invalid because it conflicted with superior state laws. (This is known as "preemption.") In response, the County argued that EQT lacked standing to sue because it had not yet suffered an injury, and also that the Ordinance was enforceable because state law allowed a county to abate anything it "determines to be a public nuisance." The United States District Court for the Southern District of West Virginia found for EQT, writing that the County could not "unilaterally prohibit conduct that federal and state law both expressly permit." The County then appealed to the Fourth Circuit.

The Fourth Circuit held that the district court properly determined the Ordinance was preempted because the Ordinance banned activities that were specifically licensed and regulated by the state.

The court first disposed of the County's argument that EQT lacked standing to sue because it had not suffered an injury in fact. The court noted that the ban on the permanent disposal of wastewater would require EQT to shut down its existing well and construct a new one in a neighboring county. Because this would necessarily burden EQT with additional costs, the court found that EQT suffered an injury in fact.

On the merits of the preemption claim, the court first outlined West Virginia's governmental hierarchy. The court noted that county commissions are provided with limited power by the state and as such, any county ordinance is automatically "inferior" to all legislative acts of the state. Relying on the West Virginia Supreme Court of Appeals' decision in Brackman's Inc. v. City of Huntington, 27 S.E.2d 71, 78 (W. Va. 1943), the Fourth Circuit held that counties lack the authority to impede activities that a state has regulated and licensed "pursuant to a state statute."

Finally, the court addressed the County's contention that the Ordinance was not preempted because of language in state law that permits counties to "suppress nuisances" or "abate any pollution." The court held that the County's interpretation of this language was greatly overstated. The court found the language gave the County the right to abate established nuisances, but did not allow the County to unilaterally determine what a nuisance is. See Sharon Steel Corp. v. City of Fairmont, 334 S.E.2d 616, 626 (W. Va. 1985). If injection wells should turn into a public nuisance, the County's appropriate and legal course of action would be to bring a common law action against the particular injection well operators. The Fourth Circuit affirmed the District Court's judgment, holding the Fayette County's Ordinance preempted and thus, unenforceable.

Judge Wynn dissented, finding that West Virginia's Supreme Court of Appeals would have been the more appropriate forum to decide the issue because it is the state court's role to determine the balance of power between state and local authorities.

To read the full opinion, click here.

Panel: Judges Niemeyer, Wynn, and Harris

Argument Date: 05/09/2017

Date of Issued Opinion: 08/30/2017

Docket Number: No. 16-1938

Decided: Decided by published opinion.

Case Alert Author: Jeremy Himmelstein, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Derek Owen Teaney, APPALACHIAN MOUNTAIN ADVOCATES, INC., Lewisburg, West Virginia, for Appellants. Timothy M. Miller, BABST, CALLAND, CLEMENTS & ZOMNIR, P.C., Charleston, West Virginia, for Appellee. ON BRIEF: Thomas A. Rist, HUMPHREY & RIST, LLP, Fayetteville, West Virginia, for Appellants. Christopher B. Power, BABST, CALLAND, CLEMENTS & ZOMNIR, P.C., Charleston, West Virginia, for Appellee. Roger G. Hanshaw, BOWLES RICE LLP, Charleston, West Virginia, for Amici Curiae.

Author of Opinion: Judge Harris

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 09/29/2017 05:42 PM     4th Circuit     Comments (0)  

  Handsome Brook Farm, LLC v. Humane Farm Animal Care, Inc. -- Fourth Circuit
Don't Put All Your Eggs in One Basket: Court Affirms Humane Farm Animal Care's Email was False Advertising

Areas of Law: Constitutional Law - First Amendment - Lanham Act - False Advertising

Issue Presented: Whether the District Court for the Eastern District of Virginia erred in finding that Humane Farm Animal Care's email regarding Handsome Brook Farm's business certifications was false advertising as defined under the Lanham Act, thereby entitling Handsome Brook Farm to injunctive relief.

Brief Summary: In an unpublished opinion, the United States Court of Appeals for the Fourth Circuit upheld the issuance of a preliminary injunction and order compelling a retraction email from the Appellant in this case. The court determined that the United States District Court for the Eastern District of Virginia did not abuse its discretion or commit clear error when it decided that an email sent by the Appellant was prohibited by the Lanham Act, 15 U.S.C. §1125(a)(1)(B). This section forbids untrue or deceptive statements "in commercial advertising or promotion" which improperly represent another's product.

Extended Summary: Handsome Brook Farm, LLC, is an egg producer that distributes its products in grocery stores in the United States. Humane Farm Animal Care, Inc. (HFAC) is a 501(c)(3) non-profit that offers certifications for egg producers that meet HFAC's standards for humane treatment of laying hens. As a non-profit, HFAC receives a portion of the sales (plus other fees) from products with its "Certified Humane" label. Having the HFAC label on a product may make it more appealing to consumers who value animal welfare in food production.
In April 2016, the employee of another egg producer contacted HFAC, saying he knew people at a facility that packed Handsome Brook eggs. The employee further reported that the eggs "were not pasture raised, but were being packed in cartons with pasture raised labeling." Unrelated to the claims made by the employee, HFAC audited the facility one month later. The HFAC auditor filed a report saying Handsome Brook's certifications were expired.

On May 20, 2016, the Executive Director of HFAC, Adele Douglass, sent an email to thirty-six large retailers, including Costco, Harris Teeter, Kroger, Publix, Safeway, Target, and Whole Foods. These businesses either had a partnership with HFAC or were considering carrying Handsome Brook eggs. The email said that HFAC was prompted by a whistleblower complaint to inspect a facility that packed HFAC "Certified Humane" eggs, in addition to Handsome Brook eggs. The email continued that the "Pasture Raised" statement on Handsome Brook cartons could not be validated, and that none of the eggs being packed at the time of the inspection were pasture raised nor were they "American Humane Certified." The email also reported that Handsome Brook's organic certification was not up-to-date. The email closed by urging the stores to "reconsider changing suppliers."

Before sending the email, HFAC did not contact Handsome Brook's certifiers or make attempts to confirm the truth of the audit report. Because of the email, stores pulled Handsome Brook's eggs, temporarily or indefinitely, and a proposed retail partner delayed its introduction of the product.

Handsome Brook initiated suit, claiming the email was false advertising under the Lanham Act. With its complaint, it included current organic certifications from the three egg producers it worked with, in addition to affidavits from the American Humane Association confirming that Handsome Brook and its affiliated producers had passed timely audits. The District Court initially provided Handsome Brook with a temporary restraining order, but later granted a preliminary injunction as well, and required HFAC to publish a retraction email.

The Fourth Circuit reviewed the granting of the preliminary injunction for abuse of discretion. A preliminary injunction is properly granted if (1) the plaintiff will likely succeed on the merits, (2) the plaintiff will likely suffer irreparable harm if the preliminary injunction is denied, (3) the balance of equities favors granting a preliminary injunction, and (4) the public interest counsels in favor of granting the preliminary injunction. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).

The court first considered language in the Lanham Act, 15 U.S.C. §1125(a)(1)(B), which forbids untrue or deceptive statements "in commercial advertising or promotion" that improperly represent another's product. Because the Lanham Act does not provide a definition for "commercial advertising or promotion," the court turned to a test out of the Southern District of New York. In that test, commercial advertising or promotion is defined as (1) commercial speech (2) by a defendant in commercial competition with the plaintiff (3) for the purpose of influencing consumers to buy goods or services, and the representations (4) must be sufficiently disseminated to the relevant purchasing public to constitute advertising or promotion within that industry. Gordon & Breach Sci. Publishers v. Am. Inst. Of Physics, 859 F. Supp. 1521, 1536 (S.D.N.Y. 1994). The Fourth Circuit adopted a modified version of this test that excludes the second factor.

Commercial speech receives less protection under the First Amendment. The court found that HFAC was primarily motivated by commercial interests when it sent its email. This conclusion was based on the fact that the recipients of the email were grocers that could sell HFAC-certified products. Additionally, the email mentioned HFAC's certification, comparing it to others in a way that presented it as superior.
The court further found that Handsome Brook suffered irreparable harm and would continue to if its injunction was denied. Handsome Brook's allegations, found to be true by the district court, were that two grocers had stopped selling Handsome Brook Eggs and one had postponed a rollout of the product. Additionally, the contents of the email had been shared outside of the recipients, and one individual heard it being discussed at a trade show.

In coming to its conclusion, the court rejected HFAC's defenses of truth, unconstitutional prior restraint on speech, and improperly compelled speech. The email could not be considered true where, among other things, HFAC did not conduct its audit based on the "whistleblower" report. Additionally, as the court noted, prior restraints are constitutionally permissible to stop false and misleading commercial speech. Finally, the State has an interest in protecting consumers from false and misleading speech. Thus, where the nature of the speech in this case is commercial, the compulsion is allowable.

To read the full opinion, click here.

Panel: Judges Gregory, Duncan, and Diaz.

Argument Date: 05/11/2017

Date of Issued Opinion: 08/22/2017

Docket Number: 16-1813

Decided: Affirmed by unpublished opinion.

Case Alert Author: Hannah Catt, Univ. of Maryland Carey School of Law

Counsel: Lana Marie Manitta, RICH ROSENTHAL BRINCEFIELD MANITTA DZUBIN & KROEGER, LLP, Alexandria, Virginia, for Appellant. Sanjay Satish Karnik, AMIN TALATI UPADHYE, LLP, Chicago, Illinois, for Appellee. ON BRIEF: Ryan M. Kaiser, AMIN TALATI UPADHYE, LLP, Chicago, Illinois, for Appellee.

Author of Opinion: Chief Judge Gregory

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 09/29/2017 02:45 PM     4th Circuit     Comments (0)  

  Humbert v. Mayor and City Council of Baltimore City -- Fourth Circuit
The Lies that Bind: Police Officers' Use of Questionable Investigatory Tactics Leads to Successful § 1983 Malicious Prosecution Claim

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

Issue Presented: Whether the District Court erred in determining there was probable cause to support the seizure of Marlow Humbert, and erred in determining the officers were entitled to qualified immunity.

Brief Summary: Humbert spent some fifteen-months in pretrial solitary confinement after being charged with sexual assault. When charges were dropped against him, Humbert filed suit against the police officers involved in his case. He alleged the officers engaged in various questionable tactics during the investigation. A jury found the officers liable for malicious prosecution under 42 U.S.C. § 1983, and awarded Humbert $2.3 million in compensatory and punitive damages. The trial judge rejected the jury verdict, concluding the officers had probable cause to arrest Humbert and were entitled to qualified immunity. On appeal, the Fourth Circuit reversed the lower court's findings. The Fourth Circuit found the officers' conduct amounted to malicious prosecution under 42 U.S.C. § 1983 because the officers had no reasonable basis to believe probable cause existed to seek the warrant or initiate criminal proceedings against Mr. Humbert. The Fourth Circuit further determined the officers were not entitled to qualified immunity, and thus reinstated the jury verdict.

Extended Summary: Marlow Humbert initiated claims against Officers Jones, Smith, and Griffin for malicious prosecution under 42 U.S.C. § 1983 and for violations of Articles 24 and 26 of Maryland's Declaration of Rights. The claims stemmed from the officers' actions, which contributed to Mr. Humbert's fifteen-month pretrial solitary confinement after being charged with sexual assault. During Mr. Humbert's confinement, the officers failed to notify the State's Attorney that the victim could not positively identify Humbert and never mentioned that DNA reports excluded Humbert as a suspect. In addition, the officers included a false statement within the warrant application. After obtaining the information that had been withheld by the officers, the prosecutor entered a nolle prosequi as to Humbert's charges. Humbert then sued.

At trial, the jury found for Humbert and awarded him $2.3 million in compensatory and punitive damages. However, the district court granted the officers' motion for judgment as a matter of law. In rejecting the jury verdict, the trial judge found the officers had probable cause to arrest Humbert and were entitled to qualified immunity. Humbert appealed, and the Fourth Circuit reversed.

In reversing, the Fourth Circuit held that: (1) Humbert's arrest was unsupported by probable cause because it resulted from a materially false warrant application, and (2) Humbert's seizure could not otherwise be justified by "adequate knowledge independent of the warrant to constitute probable cause." Because arresting and initiating legal process against Humbert without probable cause amounted to a seizure in clear violation of the Fourth Amendment, the court found the officers were not entitled to qualified immunity.

The Fourth Circuit first analyzed whether the jury's factual findings demonstrated that the officers' conduct amounted to malicious prosecution under 42 U.S.C. § 1983. Malicious prosecution claims are considered for § 1983 purposes when one alleges that their arrest was made pursuant to a warrant that was not supported by probable cause. In order for Humbert to succeed, he had to prove (1) the officers caused his seizure, (2) pursuant to legal process unsupported by probable cause, and (3) the criminal proceeding terminated in his favor. Since the jury found Humbert was seized and criminally prosecuted and the State's Attorney entered a nolle prosequi; the Fourth Circuit focused its analysis on whether probable cause existed to institute and maintain the criminal proceedings against Humbert.

As to the probable cause question, the court found the officers deliberately or with a "reckless disregard for the truth" included in the warrant application the false assertion that the victim had positively identified Humbert. Indeed, the court concluded - based on the jury's factual findings - that the officers improperly influenced the victim's tentative identification of Humbert as her attacker by showing her a picture of Humbert and declaring he was her attacker before she saw his photo in a photobook. The court next determined that a "corrected" warrant application, removing the victim's alleged identification, would not establish probable cause. The court then turned to whether probable cause otherwise existed to arrest Humbert and initiate criminal proceedings against him. The Fourth Circuit found that although testimony indicated Humbert matched the vague physical description of the assailant, his mere presence in the area eight days after the crime was committed was not sufficient to justify his arrest. Based on these findings, the court concluded that the legal process instituted against Humbert and his resulting pretrial detention were unsupported by probable cause.

Finally, as to qualified immunity, the Fourth Circuit found that a reasonable person in the officers' positions would have known their actions violated a clearly established right. As the court noted, the objective standard for qualified immunity encompasses the allegation of falsity or material omissions "because a reasonable officer cannot believe a warrant is supported by probable cause if the magistrate is misled by [stated or omitted facts] that the officer knows or should know are false [or would negate probable cause]."

The Fourth Circuit, thus, reversed in part, vacated in part, and remanded with instructions.

To read the full opinion, click here.

Panel: Chief Judge Gregory and Judges Thacker and Harris

Argument Date: 01/25/2017

Date of Issued Opinion: 08/07/2017

Docket Number: 15-1768

Decided: Affirmed by published opinion.

Case Alert Author: Avatara Smith-Carrington, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Charles Henry Edwards, IV, LAW OFFICE OF BARRY GLAZER, LLP, Baltimore, Maryland, for Appellant. Suzanne Sangree, BALTIMORE CITY DEPARTMENT OF LAW, Baltimore, Maryland, for Appellees. ON BRIEF: George Nilson, City Solicitor, Kara Lynch, Assistant Solicitor, Colin Glynn, Assistant Solicitor, BALTIMORE CITY DEPARTMENT OF LAW, Baltimore, Maryland, for Appellees.

Author of Opinion: Chief Judge Gregory

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 09/29/2017 08:31 AM     4th Circuit     Comments (0)  

September 27, 2017
  United States v. Blake-11th Circuit
Headline: Eleventh Circuit holds that an order to bypass security features of IPad was within the authority granted by the All Writs Act and warrants for Facebook while overbroad, fall within the good faith exception.

Area of Law: Criminal Law

Issue: Whether an order to bypass security features of IPad was within the authority granted by the All Writs Act and whether warrants for Facebook were overbroad requiring suppression of evidence.

Extended Summary: The Federal Bureau of Investigation ("FBI") arrested and charged Appellants, Dontavious Blake ("Blake") and Tara Jo Moore ("Moore") with crimes related to sex trafficking. The FBI obtained search warrants for Moore's Facebook and Microsoft accounts. The Facebook warrants were not limited to specific data or to a specific timeframe. The Microsoft warrant was limited to emails linked to the sex trafficking charges. The FBI also obtained an order ("bypass order") issued under the All Writs Act requiring that Apple bypass the security measures of an IPad recovered during a search of Blake and Moore's home. Blake and Moore were convicted after the district court denied their motions to suppress the evidence gathered from Facebook, Microsoft and the IPad. On appeal, the Eleventh Circuit noted that the scope of the Facebook warrants could and should have been limited. In addressing the particularity requirement of the Fourth Amendment, the court determined that even if the warrants were overly broad, they were supported by probable cause and the "good-faith" exception would apply. The court also held that the Microsoft warrant was valid because it was supported by probable cause and limited in scope to emails that had the potential to contain incriminating evidence. The Eleventh Circuit declined to determine if Moore and Blake had the prudential standing to contest the bypass order, but held that the bypass order did not exceed the district court's authority under the All Writs Act because all of the necessary requirements were met. The court found no error with the district court's rulings regarding the other issues raised on appeal. Accordingly, the Eleventh Circuit affirmed.

To view the full opinion: http://media.ca11.uscourts.gov...b/files/201513395.pdf

Panel: Carnes, Chief Judge; Fay, Circuit Judge, and Parker (United States Circuit Judge for the Second Circuit, sitting by designation)

Argument:

Date of Issued Opinion: August 21, 2017

Docket Number: 15-13395

Decided: Affirmed.

Case Alert Authors: Gabrielle F. McCabe, Franklin Sandrea-Rivero, and Peter Abraham-Orejuela

Counsel:

Author of Opinion: Carnes, Chief Judge.

    Posted By: Gary Kravitz @ 09/27/2017 03:32 PM     11th Circuit     Comments (0)  

  Paul Satterfield v. District Attorney Philadelphia - Third Circuit
Headline: Third Circuit Articulates New Analysis for Rule 60(b)(6) Motions Premised on a Change in Decision Law, and Finds That a Showing of Actual Innocence Weighs Heavily in Favor of Habeas Corpus Petitioners' Ability to Litigate Their Constitutional Claims Despite Certain Procedural Bars

Area of Law: Federal Rules of Civil Procedure and Habeas Corpus

Issues Presented: Whether a change in decisional law, either alone or in combination with other equitable factors, was sufficient basis for invoking relief from final judgment under Rule 60(b)(6), to allow an appellant to raise an otherwise time-barred valid claim that trial counsel was ineffective?

Brief Summary: Despite repeatedly asserting his innocence, Paul Satterfield was convicted of first degree murder in 1985 and sentenced to life in prison. After years of direct and collateral litigation, Satterfield appeared to emerge victorious when the District Court, acting on his federal habeas petition, found that his ineffective assistance of counsel claim was meritorious. But the Third Circuit reversed the order granting habeas relief, after finding that Satterfield's petition was barred by Antiterrorism and Effective Death Penalty Act's ("AEDPA") statute of limitations. On remand, the District Court dismissed Satterfield's petition. In 2014, Satterfield filed a motion with the District Court under Federal Rule of Civil Procedure 60(b)(6) seeking relief from the judgment dismissing his habeas petition. Satterfield argued that the Supreme Court's holding in McQuiggin v. Perkins (2013) was a change in decisional law that served as an extraordinary circumstance upon which Rule 60(b)(6) relief may issue. McQuiggin held that "actual innocence, if proved, serves as a gateway through which a petitioner may pass" to overcome an untimely petition under AEDPA. However, the District Court denied Satterfield's Rule 60(b)(6) motion after determining that the decision in McQuiggin was not an extraordinary circumstance. On appeal, the Third Circuit considered whether McQuiggin, either alone or in combination with other equitable factors, was sufficient to invoke relief from final judgment under Rule 60(b)(6) to allow an appellant to raise an otherwise time-barred valid claim that trial counsel was ineffective.

The Third Circuit vacated the District Court's order, citing precedent which held that changes in decisional law may - when paired with certain circumstances - justify Rule 60(b)(6) motion relief. The Third Circuit explained that a district court addressing a Rule 60(b)(6) motion premised on a change in decisional law must examine the full panoply of equitable circumstances in the particular case before rendering a decision. The Third Circuit found that the District Court in Satterfield's case failed to undertake this required equitable analysis; thus, the court remanded the case for proper consideration.

The Third Circuit concluded by further instructing the District Court that on remand the nature of the change in decisional law must be weighed appropriately in the analysis of pertinent equitable factors. It emphasized that McQuiggin implicated the foundational principle of avoiding the conviction of an innocent person and attempted to prevent such a mistake through "the fundamental miscarriage of justice exception." Accordingly, the Third Circuit stated that if Satterfield could make the required credible showing of actual innocence to avail himself of "the fundamental miscarriage of justice exception," equitable analysis would weigh heavily in favor of deeming McQuiggin's change in law an exceptional circumstance justifying Rule 60(b)(6) relief. The Third Circuit then clarified that the nature of the change of law cannot be divorced from that analysis: Satterfield's ability to show actual innocence should not be case determinative. The District Court should weigh all of the equitable factors as guided by precedent.

Extended Summary: Despite repeatedly asserting his innocence, Paul Satterfield was convicted of first degree murder in 1985 and sentenced to life in prison. After years of direct and collateral litigation, Satterfield appeared to emerge victorious when the District Court, acting on his federal habeas petition, found that his ineffective assistance of counsel claim was meritorious. But in an earlier appeal the Third Circuit reversed the order granting habeas relief, after finding that Satterfield's petition was barred by Antiterrorism and Effective Death Penalty Act's ("AEDPA") statute of limitations. On remand, the District Court dismissed Satterfield's petition. In 2014, almost 30 years after his conviction, Satterfield filed a motion with the District Court under Federal Rule of Civil Procedure 60(b)(6) seeking relief from the judgment dismissing his habeas petition. Satterfield argued that the Supreme Court's holding in McQuiggin v. Perkins (2013) was a change in decisional law that served as an extraordinary circumstance upon which Rule 60(b)(6) relief may issue. McQuiggin held that "actual innocence, if proved, serves as a gateway through which a petitioner may pass" to overcome an untimely petition under AEDPA. However, the District Court denied Satterfield's Rule 60(b)(6) motion after determining that McQuiggin was not an extraordinary circumstance. On appeal, the Third Circuit examined whether McQuiggin, either alone or in combination with other equitable factors, was sufficient to invoke relief from final judgment under Rule 60(b)(6) to allow an appellant to raise an otherwise time-barred valid claim that trial counsel was ineffective.

The Third Circuit began its analysis by stating that Rule 60(b) provides litigants with a mechanism by which they may obtain relief from a final judgment "under a limited set of circumstances including fraud, mistake, and newly discovered evidence." Next, it explained that despite the open-ended nature of the provision, a district court may grant relief under Rule 60(b)(6) only in "extraordinary circumstances where, without such relief, an extreme and unexpected hardship would occur." The Third Circuit then considered Satterfield's assertion that a change in relevant decisional law occurring after his petition had been denied was an extraordinary circumstance upon which his Rule 60(b)(6) relief may issue. First, the Third Circuit acknowledged that Satterfield properly characterized McQuiggin as effecting a change in decisional law, since prior to McQuiggin, the Court had never affirmatively held that a showing of actual innocence could serve as an equitable exception to AEDPA's statute of limitations. Second, the Third Circuit determined whether the change in law effected by McQuiggin could properly serve as the basis of a Rule 60(b)(6) motion. The Third Circuit clarified that although change in decisional law alone has "rarely" constituted "extraordinary circumstances" for purposes of a Rule 60(b) motion, the Court has historically refrained from imposing any per se or bright-line rule that a particular change in law is never an extraordinary circumstance. Instead, the Third Circuit stated it has adhered to a "case-dependent analysis" rooted in equity, that manifests as a "flexible, multifactor approach to Rule 60(b)(6) motions," by taking into account all the particulars of a movant's case, even where the proffered ground for relief is a post-judgment change in the law. Accordingly, the Third Circuit held that whenever a petitioner bases a Rule 60(b)(6) motion on a change in decisional law, the court should evaluate the nature of the change along with all of the equitable circumstances and clearly articulate the reasoning underlying its ultimate determination. "Whenever a petitioner bases a Rule 60(b)(6) motion on a change in decisional law, the court should evaluate the nature of the change along with all of the equitable circumstances and clearly articulate the reasoning underlying its ultimate determination." The Third Circuit found that the District Court in Satterfield's case failed to articulate this requisite equitable analysis, and thus it remanded the case for proper consideration.

The Third Circuit concluded by further instructing the District Court that on remand, the nature of the change in decisional law must be weighed appropriately in the analysis of pertinent equitable factors. The Court emphasized that the values encompassed by the fundamental-miscarriage-of-justice exception and which drove the Supreme Court's decision in McQuiggin could not be divorced from other aspects of the Rule 60(b)(6) inquiry. More specifically, it explained that Third Circuit precedent requires a weighing of all the equitable factors at play in a particular case, and the nature of the change in law itself is highly relevant to that analysis. According to the Third Circuit, McQuiggin illustrated that where a petitioner makes an adequate showing of actual innocence, the interest in avoiding the wrongful conviction of an innocent person weighs heavily in favor of permitting the petitioner to pursue his constitutional claims in spite of the statute-of-limitations bar. The Third Circuit further explained that because society's "interest in avoiding the wrongful conviction of an innocent person" is so deeply embedded within our justice system, if a petitioner can make a showing of actual innocence, McQuiggin's change in law is almost certainly an exceptional circumstance. Accordingly, the Third Circuit determined that a proper demonstration of actual innocence by Satterfield could permit Rule 60(b)(6) relief unless the totality of equitable circumstances ultimately weigh heavily in the other direction. The Court then noted several other equitable factors that might come into play, including Satterfield's meritorious ineffective- assistance-of-counsel claim. However, the Court also warned that a credible showing of actual innocence is a "burdensome task" that can be met only by showing that in light of new evidence no reasonable juror could have found the defendant guilty beyond a reasonable doubt.

Ultimately, the Third Circuit vacated the District Court's order with respect to the denial of Satterfield's request for Rule 60(b)(6) relief, and remanded the case for reconsideration of the whether the change of law wrought by McQuiggin, combined with the other circumstances of the case, merited relief under Rule 60(b)(6).

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/152190p.pdf

Panel: Ambro, Vanaskie, and Restrepo, Circuit Judges

Argument Date: March 27, 2017

Date of Issued Opinion: September 26, 2017

Docket Number: No. 15-2190

Decided: Vacated and remanded

Case Alert Author: Brooke Hutchins

Counsel: Aren K. Adjoian, Esq. [ARGUED), Arianna J. Freeman, Esq., Counsel for Appellant; Susan E. Affronti, Esq., Simran Dhillon, Esq. [ARGUED], Counsel for Appellees

Author of Opinion: Circuit Judge Vanaskie

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mark Rahdert

    Posted By: Susan DeJarnatt @ 09/27/2017 01:00 PM     3rd Circuit     Comments (0)  

September 26, 2017
  United States v. Skelos
Headline: Second Circuit Vacates Convictions of Former New York Senate Majority Leader and His Son, and Remands for New Trial

Area of Law: Criminal

Issue Presented: Whether, in light of the Supreme Court's McDonnell decision, the public corruption convictions of former New York State Senate Majority Leader Dean Skelos and his son, Adam, must be vacated.

Brief Summary: In 2015, in the United States District Court for the Southern District of New York, a jury convicted former New York Senate Majority Leader, Dean Skelos, and his son, Adam Skelos, of Hobbs Act conspiracy, Hobbs Act extortion, honest services wire fraud conspiracy, and federal program bribery. While their appeals were pending in 2016, the Supreme Court decided McDonnell v. United States, which ratcheted up the standard for proving corruption by a public official. The Second Circuit has now concluded, by summary order, that the convictions cannot stand because, under McDonnell, the jury instructions were erroneous. The court did, however, find that a reasonable fact-finder could convict the defendants under the new McDonnell standard, and that the case could therefore be retried.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...e79b82b9781/1/hilite/.

Extended Summary: The Second Circuit focused on three of the arguments Dean and Adam Skelos raised on appeal: (1) the jury instructions were erroneous; (2) the evidence at trial was insufficient; and (3) the district court erred in allowing two witnesses to testify.

The Second Circuit addressed the jury instructions issue first. The district court's jury instructions had defined the term "official act" in the crimes charged as "any act taken under color of official authority." After the trial, the Supreme Court held in McDonnell v. United States that there are "significant constitutional concerns" when jury instructions define "official act" to cover "acts that a public official customarily performs." The Supreme Court noted that when jury instruction define "official act" this broadly, an "official act" could encompass "nearly anything a public official does." Accordingly, the Second Circuit held that the district court's jury instructions had been erroneous. Further, the court found that it could not conclude the jury instruction error was harmless beyond a reasonable doubt. The court specifically focused on the risk that the jury could have concluded that evidence of certain meetings Dean Skelos attended fulfilled the official act requirement, rather than simply provided circumstantial evidence of a quid pro quo for favorable votes on legislation.

As to the sufficiency of the evidence at trial, the Court reviewed the record de novo, and concluded the defendants' sufficiency challenge failed on the merits. The Court held that there was more than sufficient evidence for a rational jury to find the material elements of the crime beyond a reasonable doubt under the new McDonnell standard. For example, there was evidence at trial that Senator Skelos had traded his vote in favor of legislation that would benefit certain entities, in exchange for their providing compensation to his son Adam.

Further, as to the district court's decision to permit Lisa Reid (the Executive Director of New York's Legislative Ethics Commission) and Senator Tony Avella to testify, the Court held that although the district court did not abuse its discretion in permitting Reid to testify, the McDonnell decision suggested that it was an abuse of discretion to admit Senator Avella's testimony. Nevertheless, the court did not have to determine whether Senator Avella's testimony alone required vacatur and remand, because the court had already determined the jury instructions error required doing so.

Panel: Circuit Judges Winter and Raggi; District Judge Hellerstein, sitting by designation

Date of Issued Opinion: 09/26/2017

Docket Number: No. 16-1618-cr; No. 16-1697-cr

Decided:
Vacated and Remanded

Case Alert Author:
Rebecca King

Counsel: Alexandra A.E. Shapiro (Daniel J. O'Neill, Fabien Thayamballi, on the brief), Shapiro Arato LLP for Dean Skelos; Robert Alan Culp, Law Office of Robert A. Culp for Adam Skelos; Thomas McKay, Assistant United States Attorney (Tatiana Martins, Margaret Garnett, Assistant United States Attorneys, on the brief) for Joon H. Kim, Acting United States Attorney for the Southern District of New York.

Circuit: Second Circuit

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 09/26/2017 09:41 PM     2nd Circuit     Comments (0)  

September 25, 2017
  Souryavong v. Lackawanna County - Third Circuit
Headline: Employees Did Not Provide Sufficient Evidence to Prove a Willful Violation of the Fair Labor Standards Act ("FLSA") or Abuse of Discretion in Calculating Attorney's Fees.

Area of Law: Labor Law

Issue(s) Presented: (1) Whether Souryavong and Rolon provided sufficient evidence to prove that Lackawanna County's non-payment of overtime was a willful violation of the FLSA; and (2) whether the District Court abused its discretion by improperly calculating attorney's fees?

Brief Summary: In June 2013, Michael Souryavong and Nelson Rolon filed a complaint alleging non-payment of overtime. They worked two part-time jobs for Lackawanna County accumulating over 40 hours per pay period that went unnoticed by the County. At trial, Souryavong and Rolon presented limited evidence to prove the County's awareness of its FLSA violations. The District Court, therefore, granted the County's motion that argued the lack evidence for the jury to consider if the County willfully violated the FLSA. This is important because a jury finding of a willful violation of the FLSA would have permitted a larger award of damages.

Souryavong, Rolon, and Velez were awarded some damages for the violations by the County that included the award of attorney's fees. The District Court in its opinion significantly reduced the calculated attorney's fees by reducing the estimated hours and hourly rate of work for attorney Pollick. The attorney's fees were further diminished when the court considered the awarded relief.

Extended Summary: Souryavong and Rolon worked two separate part-time jobs for Lackawanna County. The County tracked and paid these employees for the individual jobs. In 2011, the County became aware of its failure to consider the hours in aggregate and thus of its failure to pay employees overtime.

At the trial, Souryavong and Rolon presented limited evidence including: the documentation of non-payment, the testimony of the County's general awareness of FLSA standards, and the email first addressing the issue. Willful violations of FLSA, however, require a more specific awareness by an employer concerning the legality of its actions. The evidence indicated only a general awareness of overtime issues and not specifically a violation of the FLSA. Further, Souryavong and Rolon only provided evidence of overtime violations before the County was aware of its non-payment of overtime. For these reasons the District Court correctly concluded that plaintiffs had failed to prove a willful FLSA violation.

Souryavong and Rolon still obtained a favorable result at trial for the County's actual FLSA violation and were awarded attorney's fees, also contested on appeal. Pollick, attorney for Souryavong and Rolon, argued that the District Court abused its discretion by lowering the estimated hours worked, the hourly rate, and the consideration of the awarded damages. The Supreme Court has held that courts should calculate attorney's fees according a "lodestar" method that considers several objective factors. The Court also held that after calculating the lodestar amount, courts may take into account other factors not included in the lodestar approach to determine a reasonable fee. Perdue v. Kenny A., 559 U.S. 542 (2010). The Circuit Court concluded that the District Court properly followed the lodestar method, and that other factors considered in making the award, including evidence of attorney compensation in the same region for matters of similar stature, were properly supported by the record.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/153895p.pdf .

Panel: Ambro, Vanaskie, and Restrepo. Circuit Judges

Argument Date: March 28. 2017

Date of Issued Opinion: September 20, 2017

Docket Numbers: Nos. 15-3895 & 16-2214

Decided: Affirmed.

Case Alert Author: Nina F. del Valle

Counsel: Cynthia L. Pollick, Counsel for Appellants; and Harry T. Coleman, Counsel for Appellee

Author of Opinion: Circuit Judge Vanaskie

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mark Rahdert

    Posted By: Susan DeJarnatt @ 09/25/2017 11:50 AM     3rd Circuit     Comments (0)  

  Kenneth Mann v. Palmerton Area School District - Third Circuit
Headline: High school football coach entitled to qualified immunity because the right to be free from deliberate exposure to a traumatic brain injury after exhibiting signs of a concussion in the context of a violent contact sport was not clearly established in 2011

Area of Law: Constitutional right to bodily integrity, qualified immunity

Issue(s) Presented: Was the constitutional right to be free from deliberate exposure to a traumatic brain injury after exhibiting signs of a concussion in the context of a violent contact sport clearly established in 2011 so that a high school football coach was precluded from claiming qualified immunity? Was the school system that employed the coach liable for failure to implement effective policies and procedures for dealing with traumatic brain injury?

Brief Summary: Sheldon Mann, a high school football player for Palmerton Area School District, suffered a traumatic brain injury after sustaining two violent hits during a football practice in November 2011. Sheldon's parents alleged Palmerton Area School District and its high school head football coach, Chris Walkowiak, violated Sheldon's constitutional right to bodily integrity under a state created danger theory of liability. Specifically, they asserted that Sheldon's constitutional right to bodily integrity was violated by Walkowiak's instruction for Sheldon to continue practicing after exhibiting symptoms of a concussion and Palmerton Area's failure to implement effective policies and procedures for injured student athletes.

The Third Circuit determined that Walkowiak, a state actor sued in his individual capacity, was entitled to qualified immunity. Although the Third Circuit held that a jury could have found Walkowiak violated Sheldon's constitutional rights, which satisfies the first prong of the qualified immunity inquiry, the Third Circuit failed to find that the second prong was satisfied - that the right was clearly established at the time of the injury. The Third Circuit concluded that no appellate case decided prior to November 2011 held that a coach violates a student's constitutional rights to bodily integrity by requiring a student to continue practicing after experiencing a violent hit and showing signs of a concussion. A failure to satisfy the second prong entitled Walkowiak to qualified immunity.

The Third Circuit also held that the Manns failed to prove their claim against Palmerton Area School district. The Third Circuit determined that since there was no evidence of recurring football head injuries or a deliberate exposure of injured players to continued risk, there was no basis for concluding that a policy or custom of Palmerton Area or its failure to provide more intense concussion training to its coaches caused a violation of Sheldon's constitutional rights. Therefore, the Third Circuit affirmed the District Court's decision to grant summary judgment in favor of Walkowiak and Palmerton Area.

Extended Summary: Sheldon Mann, a high school football player for Palmerton Area School District, suffered a traumatic brain injury after sustaining two violent hits during a football practice in November 2011. Sheldon's parents brought a lawsuit against Palmerton Area School District and its high school head football coach, Chris Walkowiak, asserting that Walkowiak had violated Sheldon's constitutional right to bodily integrity under a state created danger theory of liability. They argued that Walkowiak's exercise of authority in telling Sheldon to continue participating in football practice after exhibiting signs of a concussion after enduring a violent hit violated Sheldon's constitutional right to bodily integrity. The Manns also asserted Sheldon's constitutional rights were violated as a result of Palmerton Area's failure to assure that injured student-athletes were medically cleared to resume participation in the sport, failure to enforce and enact proper concussion policies, and failure to train the coaches on a safety protocol for head injuries.

First, the Third Circuit analyzed whether Walkowiak was entitled to qualified immunity under 4s U.S.C. §1983. A qualified immunity defense relieves state actors sued in their individual capacity from liability when it is proved that their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known. Qualified immunity requires a determination of (1) whether the facts alleged by the plaintiff make out a violation of a constitutional right, and (2) whether that right was clearly established at the time of the injury. The Third Circuit concluded that the first prong of the qualified immunity inquiry was satisfied as the Manns had presented sufficient evidence that an injured student-athlete participating in a contact sport has a constitutional right to be protected from further harm, and that a state actor violates this right when the injured student-athlete is required to be exposed to a risk of harm by continuing to practice. The Third Circuit determined that a jury could have found that Walkowiak violated this right when he required Sheldon to continue practicing after sustaining one violent hit and exhibiting behaviors consistent with a concussion.

Next, the Third Circuit analyzed the second prong of the qualified immunity inquiry, whether a constitutional right was clearly established at the time of the injury in November 2011. The Third Circuit concluded that this right was not clearly established, noting that no appellate case decided prior to November 2011 held that a coach violates a student's constitutional rights to bodily integrity by requiring a student to continue practicing after experiencing a violent hit and showing signs of a concussion. For this reason the Third Circuit affirmed the District Court's qualified immunity ruling.

Lastly, the Third Circuit held that the Manns failed to prove their claim against Palmerton Area. Under §1983, local governments may be held liable for their own illegal acts when a plaintiff can demonstrate that the municipality itself, through the implementation of a municipal policy or custom, causes a constitutional violation. The Third Circuit found there was no evidence of a pattern of recurring head injuries in the Palmerton Area football program or that Walkowiak or the coaching staff deliberately exposed injured players to the continuing risk of harm that playing football poses. Therefore, there was no basis for concluding that a policy or custom of Palmerton Area or its failure to provide more intense concussion training to its coaches caused a violation of Sheldon's constitutional rights. The Third Circuit affirmed the District Court's decision to grant summary judgment in favor of Walkowiak and Palmerton Area.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/162821p1.pdf

Panel: McKee, Vanaskie and Rendell, Circuit Judges

Argument Date: April 27, 2017

Date of Issued Opinion: September 22, 2017

Docket Number: No. 16-2821

Decided: Affirmed

Case Alert Author: Katherine A. Osevala

Counsel: Howard J. Bashman, Larry E. Bendesky, Adam J. Pantano, and Robert W. Zimmerman Counsel for Appellant; Thomas A. Specht and Robin B. Snyder, Counsel for Appellee.

Author of Opinion: Circuit Judge Vanaskie

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mark Rahdert

    Posted By: Susan DeJarnatt @ 09/25/2017 11:46 AM     3rd Circuit     Comments (0)  

September 21, 2017
  Estate of Jeffrey H. Ware v. Hospital of the University of Pennsylvania - Third Circuit
Headline: The occurrence of nuclear material at a research university falls within the limits of the Price-Anderson Act.

Area of Law: Civil Procedure; statutory interpretation

Issue(s) Presented: Does the Price Anderson Act apply to a claim that alleges that an individual was harmed by radiation used in a research lab? Did the District Court appropriately exercise supplemental jurisdiction in retaining state-law claims?

Brief Summary:

Barbara Boyer filed a claim on behalf of her deceased husband, Jeffrey Ware, alleging that his death was the result of inadequate safety precautions taken to protect him in the lab where he worked at the University of Pennsylvania. The case was removed to federal court on the basis that the claims were covered under the Price-Anderson Act. The District Court agreed with this assessment and ultimately granted summary judgment in favor of the University of Pennsylvania. On appeal, Boyer argued that her claims are not covered under the Price-Anderson Act and that the District Court inappropriately denied her motion to withdraw while maintaining jurisdiction over her remaining state-law claims. The Third Circuit determined that Boyer's claims fell under the Price-Anderson Act because she alleged "public liability" resulting from a "nuclear incident" within the meaning of those terms in the Act. The Court noted that this Act extends to accidents beyond nuclear power plants or weapons facilities because the Act itself mentions research universities. The Third Circuit further affirmed the District Court's decision to deny Boyer's motion to withdraw and to retain jurisdiction over her additional claims. The District Court had discretionary supplemental jurisdiction over any state-law claims that were related to the federal claims and arose out of the same controversy.

Extended Summary:

Barbara Boyer filed this complaint on behalf of her deceased husband, Jeffrey Ware. Ware worked at the University of Pennsylvania ("UPenn") as a neuroscientist, where he studied biological organisms and the effects of radiation. In 2010, Ware was diagnosed with gliosarcoma, which is a form of brain cancer. Ware received chemotherapy and radiation treatment, but died a year later. As a result, Boyer brought this claim, alleging that Ware's cancer resulted from radiation exposure that UPenn failed to protect against. The defendants removed Boyer's complaint to federal court under the Price-Anderson Act, which provides federal jurisdiction for claims of "public liability" arising from a "nuclear incident." The District Court agreed with this removal and granted summary judgment in favor of UPenn. Boyer appealed, challenging the decision that Price-Anderson Act was applicable to her claims and argued that the Court did not have jurisdiction over her remaining state-law claims.

After reviewing the history of the Price-Anderson Act, the Third Circuit determined that the Act provides federal jurisdiction over any public liability action for any occurrence that has caused physical harm as a result of radioactive properties of nuclear material. The Court reasoned that "a public liability action" would be considered, for the most part, any legal liability resulting from a nuclear incident. The Court found that the definition of nuclear incident was intended to be broad and as a result, the jurisdiction grant of the Price-Anderson Act is also broad. Similarly, the Third Circuit disputed Boyer's argument that the grant only applied to nuclear power plants or weapons facilities by noting that the Price-Anderson Act refers to research universities in some of its provisions.

The Third Circuit further noted that the Price-Anderson Act does not only cover defendants that have indemnity agreements with the NRC. When the Act was amended in 1988, the purpose was to expand the scope of federal jurisdiction. The Court reasoned that limiting the applicability only to defendants with indemnity agreements would be contrary to Congressional intent. In reference to Boyer's argument that the Act only applies to defendants with a license to possess nuclear materials, the Court noted that UPenn has such a license, which was issued by the Pennsylvania Department of Environmental Protection Bureau of Radiation Protection. The Third Circuit reasoned that a license does not need to be issued by the NRC directly because the NRC has authority to enter into agreements with states that allow them to issue licenses.

In response to Boyer's argument that the Act only applies to unintentional releases of nuclear energy, the Court concluded that Boyer's claim alleges negligence, not deliberate exposure, so this exception would not be relevant to this case. The Court also disagreed with Boyer's theory that Congress' failure to adopt language pertaining to nuclear pharmacies or hospital medicine departments means that the Act is not applicable to harm from radiation used for medical care. The Court concluded that this language was not relevant to the facts at hand.

The Court determined that the District Court's denial of Boyer's motion to withdraw was appropriate because Boyer waited too long to file a notice of dismissal. When Boyer filed her notice, UPenn had already filed its answer. Due to the late timing, the District Court had discretion whether or not to allow the withdrawal. The District Court appropriately decided that the defendant would suffer prejudice if the claims were withdrawn because they had already utilized resources to produce expert reports and submit documents. In addition, the District Court had authority to exercise supplemental jurisdiction over the remaining state-law claims. The District Court was correct in determining that the state claims were sufficiently related to the federal claim that they were part of the same case.

The Third Circuit affirmed the District Court's decisions.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/163801p.pdf

Panel: Ambro, Restrepo, and Cohen, Circuit Judges.

Argument Date: June 28, 2017

Date of Issued Opinion: September 18, 2017

Docket Number: No. 16-3801

Decided: Affirmed

Case Alert Author: Kristina Flatley

Counsel: Glenn Ellis, Aaron Freiwald, and Mathew Bravette, Counsel for Appellant; Donald Jose, Theresa Sachs, Daniel Sherry, and Donna Modestine, Counsel for Appellees.

Author of Opinion: Circuit Judge Ambro

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Mark C. Rahdert

    Posted By: Susan DeJarnatt @ 09/21/2017 10:02 AM     3rd Circuit     Comments (0)  

September 20, 2017
  Elias et al. v. Rolling Stone, LLC et al. - Second Circuit
Headline: Second Circuit Permits Former University of Virginia Students to Proceed with a Defamation Lawsuit Against Rolling Stone

Area of Law: Defamation.

Issue(s) Presented: Whether Plaintiffs, three former University of Virginia Phi Kappa Psi fraternity members, sufficiently pled that a Rolling Stone article, subsequently retracted as fabricated by the source, about an alleged brutal gang rape at the fraternity house, stated actionable defamation claims brought individually and under a small group theory.

Brief Summary: Elias, Fowler, and Hadford, three former male University of Virginia's Phi Kappa Psi's fraternity members, commenced a lawsuit against Rolling Stone magazine claiming defamation for statements made in an article and during an interview with Erdely, the article's author, about an alleged brutal gang rape at the fraternity house. Reversing in part, the Second Circuit held that the United States District Court for the Southern District of New York erred in dismissing Elias and Fowler's individual claims and the small group defamation claim.

The link to the full opinion will be added when the opinion is reposted on the Second Circuit's website.

Extended Summary: George Elias IV, Ross Fowler, and Stephen Hadford (Plaintiffs) were active members of the University of Virginia's Phi Kappa Psi fraternity in the fall of 2012. In November, 2014, Rolling Stone magazine published an online article authored by Sabrina Rubin Erdely and titled, "A Rape on Campus: A Brutal Assault and Struggle for Justice at UVA." Generating worldwide headlines, it recounted a brutal three-hour gang rape in the fall of 2012 of "Jackie," a woman whose interview was the primary source for the article. As a follow-up to the published piece, Erdely was interviewed as a guest on a podcast about the story. Weeks later, after it learned that the story was fabricated, Rolling Stone retracted the article and issued an apology.

Reviewing the United States District Court for the Southern District of New York's decision to dismiss Plaintiffs' complaint in its entirety, the Second Circuit reversed the holding in part, concluding that the District Court improperly rejected Plaintiffs' small group defamation claim and, although it was a close call, also erred in dismissing individual claims relating to Elias and Fowler.

To state a claim for defamation in New York, a complaint must allege a false statement that is published to a third party without privilege or authorization, and, in most cases, that causes harm. To succeed, a plaintiff must allege that the public acquainted with the party and the subject would recognize the plaintiff as a person to whom the statement refers. The Court held that based on the fact that Elias graduated the same year as the alleged perpetrators, lived in the fraternity house in the only bedroom that could fit the description of the alleged location of the rape, and some people who knew him concluded he was one of the alleged attackers, Elias sufficiently pled that the article was "of and concerning" him. The Court reached the same conclusion with Fowler's claim. The court agreed with the district court that Hadford's allegation - that because he rode his bike through campus regularly, readers would conclude that he was the person Jackie said she saw riding a bike in the article- was too speculative to support a defamation claim as to him individually.

Finding that a reader of the article could conclude that all Phi Kappa Psi members were implicated in the alleged rapes, the Court, reversing the district court, also held that Plaintiffs could proceed under a theory of small group defamation. Relying on Brady v. Ottaway Newspapers, Inc., a New York Appellate Division, Second Department case, the Second Circuit considered the small size of Phi Kappa Psi, the fact that the allegations taken as a whole could support the conclusion that many or all fraternity members participated in alleged gang rape and all members turned a blind eye to the crimes, and the prominence of the fraternity on the University's close-knit campus, to conclude that Plaintiffs plausibly alleged the article was "of and concerning" all then-members of the fraternity. Lastly, the court upheld the district court's dismissal of claims based upon Erdely's podcast statements because statements that express opinions of the speaker do not constitute defamation and Erdely's statements on the podcast were speculative.

In a separate opinion, Circuit Judge Lohier concurred with the majority's ruling on the individual claims but disagreed with the application of Brady to the small group claim. Judge Lohier contended that Brady was both factually inapposite to the present case and the only New York Appellate Division opinion to evaluate how to analyze small group defamation claims. Accordingly, he argued that the Second Circuit should certify the issue of the appropriate standard for small group defamation to the New York Court of Appeals for clarification. In the alternative, he would have affirmed dismissal of claims under that theory.

Panel: Circuit Judges Cabranes and Lohier; District Judge Forrest

Argument Date: 04/27/2017

Date of Issued Opinion: 09/19/2017

Docket Number: No. 16-2465-cv

Decided:
Affirmed in Part and Reversed in Part

Case Alert Author:
Joanna Kusio

Counsel: Alan Lee Frank, Alan L. Frank Law Associates, P.C. for Plaintiffs‐Appellants; Elizabeth A. McNamara (Samuel M. Bayard, Abigail B. Everdell, Davis Wright Tremaine LLP; Alison Schary, Davis Wright Tremaine LLP, on the brief), Davis Wright Tremaine LLP for Defendants‐Appellees.

Author of Opinion: District Judge Forrest (majority); Circuit Judge Lohier (concurring in part and dissenting in part)

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Professor Elyse Diamond

Edited: 09/22/2017 at 08:48 AM by Elyse Diamond

    Posted By: Elyse Diamond @ 09/20/2017 11:22 AM     2nd Circuit     Comments (0)  

September 12, 2017
  United States v. Jones
Case Name: United States v. Jones

Headline: Second Circuit Holds That New York First-Degree Robbery is Categorically a Crime of Violence Under the Career Offender Guideline

Area of Law: Criminal

Issue(s) Presented: Whether New York first-degree robbery categorically qualifies as a crime of violence under the residual clause of the Career Offender Guideline, in light of the Supreme Court's recent decision in Beckles v. United States.

Brief Summary: While serving a 92-month federal sentence in a halfway house, Corey Jones had an altercation with two Deputy U.S. Marshals. He was ultimately convicted of assaulting a federal officer. Because of this conviction and his previous record (which included a conviction for New York first-degree robbery), Jones satisfied the elements of the Career Offender Guideline, which provides longer sentences for career offenders. He was sentenced to fifteen years' imprisonment. Jones appealed, and the Second Circuit initially ruled in his favor, largely based on the argument that the residual clause of the Career Offender Guideline - which provides that a crime of violence includes any offense that "involves conduct that presents a serious potential risk of physical injury to another" - was void for vagueness. Shortly thereafter, however, the Second Circuit vacated its holding to await the Supreme Court's decision in Beckles v. United States, where the Court would address whether the residual clause was unconstitutionally vague. In Beckles, the Supreme Court held that the residual clause of the Career Offender Guideline is constitutional. The Second Circuit then concluded that New York first-degree robbery categorically qualifies as a crime of violence under the residual clause, and affirmed Jones' sentence.

Extended Summary: The Career Offender Guideline ("Guideline") is an enhanced sentencing standard used when defendants in federal court satisfy certain enumerated criteria. A defendant is a career offender if he is at least eighteen years old when he committed the current offense for which he was convicted, the current offense is a felony that is a "crime of violence," and he has at least two prior felony convictions of "crimes of violence." In this context, a "crime of violence" is a legal term that may be satisfied by two different definitions within the Guidelines. At issue in this case is the second definition, which lists specific offenses that apply as crimes of violence and ends with the "residual clause," which incorporates into the second definition any offense that "otherwise involves conduct that presents a serious potential risk of physical injury to another." Recently, the United States Supreme Court has decided two cases that analyze residual clauses. The first, Johnson v. United States, involved the residual clause of the Armed Career Criminal Act, which is nearly identical to the residual clause in the Guideline. In Johnson, the Supreme Court determined that the residual clause was void for vagueness. Following oral argument in the Jones case, however, the Supreme Court determined in Beckles v. United States that the residual clause in the Guideline is not void for vagueness.

In 2013, Jones was completing a federal sentence for unlawful gun possession in a halfway house. He verbally threatened a staff member, which violates the rules of the halfway house, and was remanded to custody of the Bureau of Prisons. Two U.S. Marshals arrived to arrest Jones and bring him into custody, but Jones assaulted one of the Marshals during the arrest, which violated a federal statute. In the District Court for the Eastern District of New York, a jury convicted Jones of assaulting a federal officer. The District Court determined that this conviction satisfied the requirements of the Guidelines because a first-degree robbery is a crime of violence under the residual clause. Under the Guideline, the District Judge sentenced Jones to 180 months in prison to be followed by three years of supervised release. Jones appealed, relying on the Johnson holding to argue that the residual clause in the Guideline should be void for vagueness. The Second Circuit initially agreed and reversed the District Court's conviction. However, the Second Circuit subsequently vacated its decision to await the Supreme Court's decision in Beckles v. United States. In Beckles, the Supreme Court analyzed the Guideline's residual clause and found that it was not void for vagueness. The Second Circuit relied on Beckles to determine that New York first-degree robbery applies as a crime of violence under the residual clause because a person who "forcibly steals property from a person, while armed with a deadly weapon, engages in conduct that presents a serious potential risk of physical injury to another." After making this determination, the Second Circuit affirmed the District Court's conviction of Jones. To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...1518_complete_opn.pdf

Panel: Judges Walker, Calabresi, and Hall

Argument Date: 04/27/2016

Argument Location: New York

Date of Issued Opinion: 09/11/2017

Docket Number: No. 15-1518-cr

Decided: Affirmed

Case Alert Author: James Creech

Counsel: Bridget M. Rohde, Acting Assistant United States Attorney, for Plaintiff-Appellee Corey Jones, Matthew B. Larsen, Assistant Federal Defender, for Defendant-Appellant

Author of Opinion: Judge Walker, Jr.

Circuit: 2nd Circuit

Case Alert Circuit Supervisor:
Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 09/12/2017 09:21 PM     2nd Circuit     Comments (0)  

September 8, 2017
  United States v. Wells Fargo & Co. - Second Circuit
Headline: Second Circuit Remands Case to District Court to ApplyLess Stringent Requirement for False Claims Act Lawsuits Based Upon Recent United States Supreme Court Decision

Area of Law: False Claims Act, Fraud

Issue(s) Presented: Whether the requirements for claims under the False Claims Act have changed in the wake of a recent United States Supreme Court decision.

Brief Summary: The United States District Court for the Eastern District of New York dismissed a False Claims Act lawsuit in 2015, which claimed that Wells Fargo had falsely certified compliance with federal banking laws in order to obtain more favorable borrowing rates from the Federal Reserve. The United States Supreme Court subsequently vacated and remanded this decision in light of its 2016 Supreme Court decision in Universal Health Services, Inc. v. United States ex Escobar, which abolished created a new standard for evaluating the adequacy of FCA claims. On remand, the Second Circuit analyzed Escobar's materiality discussion and remanded the case back to the District Court for evaluation of the case under this new standard. To read the full opinion, please visit: United States v. Wells Fargo & Co.

Significance, if Any: Case changes the requirements for pleading a claim under the False Claims Act

Extended Summary:
In 2011, Robert Kraus and Paul Bishop ("the complainants") brought a lawsuit on behalf of the federal government against Wells Fargo. The complainants claimed that Wells Fargo had violated the False Claims Act ("FCA") by falsely certifying their compliance with federal banking laws in order to obtain more favorable borrowing rates from the Federal Reserve. The United States District Court for the Eastern District of New York dismissed the lawsuit in 2015, and the Second Circuit affirmed this dismissal, relying on the failure of the complainants to meet two requirements laid out in a 2001 Second Circuit case, Mikes v. Straus. The first requirement laid out in Mikes, known as the express-designation requirement, dictated that false certification only be implied when the statute in question expressly states that payment is contingent on compliance with the statute. The second requirement, known as the particularity requirement, dictated that the sued party must have falsely certified compliance with a particular statute, regulation, or contractual term to satisfy an express false certification claim.

The United States Supreme Court vacated and remanded this case in light of a 2016 United States Supreme Court decision in Universal Health Services, Inc. v. United States ex Escobar. Escobar was also a false certification case, and as the Second Circuit points out in its opinion, the Escobar decision abrogated the two requirements set out in Mikes. With respect to the express-designation requirement, the Supreme Court held that misleadingly omitting critical facts is sufficient on its own, regardless of whether accurate information is expressly made a prerequisite in the statute. Furthermore, the Supreme Court held that liability under the FCA must simply be grounded within its text, "including the 'well-settled meaning[s] of common law terms'" used, even if not defined, to achieve the goals of the particularity requirement.

Accordingly, the Second Circuit held in this per curiam decision that the express-designation and particularity requirements were no longer the appropriate materiality standards to be applied in FCA cases. Instead, the Second Circuit found the materiality standard set out by the Supreme Court in Escobar is that an FCA claim is valid where the alleged misrepresentation is material to the Government's decision to make a payment. Because this standard was not applied by the district court in the Wells Fargo case, the Second Circuit remanded the case back to the district court to apply the materiality standard for determining whether the complainants adequately alleged an FCA claim.

Given this relaxation of requirements for FCA claims, and the new materiality standard, the Supreme Court and Second Circuit's opinions could affect how FCA lawsuits are brought going forward. To read the full opinion, please visit: United States v. Wells Fargo & Co.

Panel: Chief Judge Katzmann and Circuit Judges Sack and Lohier

Argument Date: 03/01/2016

Date of Issued Opinion: 09/07/2017

Docket Number: 15-2449

Decided: Vacated and Remanded

Case Alert Author: Alexandra Dobles

Counsel: Thomas C. Goldstein & Tejinder Singh, Goldstein & Russell, P.C. and Rachel Grier, Berg & Androphy for Plaintiffs-Appellants; Amy Pritchard Williams, Sara S. Ash, & Stephen G. Rinehart, Troutman Sanders LLP for Defendants-Appellees

Author of Opinion: Per Curiam

Case Alert Circuit Supervisor: Elyse Diamond

    Posted By: Elyse Diamond @ 09/08/2017 07:59 AM     2nd 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)  

  Roger Vanderklok v. USA - Third Circuit
Headline: No implied cause of action for damages under the First Amendment against a TSA employee for retaliatory prosecution because the role of the TSA in securing public safety far outweighs the benefit of judicially implied damages liability.

Area of Law: First Amendment

Issues Presented: Whether a First Amendment claim for damages against a TSA employee for retaliatory prosecution exists in the context of airport security screenings.

Brief Summary:
The court ruled that there is no First Amendment damages remedy available against airport security screeners who allegedly retaliate against a traveler. The courts have never implied a remedy in a case involving military or national security because Congress is better positioned to evaluate the impact of a new species of litigation against those who act on the public's behalf in the national security context. The expansion of judicially implied causes of action to new contexts is strictly limited. Here, even if no alternative process was available, the role of the TSA in securing public safety was so significant that it precluded the Third Circuit from implying a cause for the plaintiff.

Extended Summary:
Roger Vanderklok packed a heart-monitor and his watch into a PVC pipe, capped it, then placed it inside his carry-on bag and went to the Philadelphia International Airport to board a flight for Miami. Shortly after his bag was x-rayed, Vanderklok had a disagreement with a TSA screener that resulted in his arrest for disorderly conduct, threatening placement of a bomb, and making terroristic threats - thwarting his plans of running a half marathon in Miami.

Shortly after being acquitted of all charges, Vanderklok filed suit for unconstitutional infringement of his First Amendment rights - one of nine claims - against the United States of America, the TSA, the TSA screener, the City of Philadelphia, Philadelphia Police officers and detectives, and an agent of the Department of Homeland Security. The district court dismissed all claims against each defending party, except the TSA screener - Charles Kieser. The district court rejected the argument that he was entitled to qualified immunity against the First Amendment retaliatory prosecution claim, and denied his motion for summary judgment. Keiser then filed the interlocutory appeal.

For the qualified immunity dispute, the court framed a dipositive threshold issue: whether there is a First Amendment right to be free from retaliatory prosecution by a TSA employee. The judiciary created a private cause of action against federal officers for deprivation of constitutional rights - a Bivens claim - but it is exceedingly rare and narrowly applied. The Supreme Court has never implied such an action under the First Amendment, and the Third Circuit has never invoked Bivens on claims of freedom from government retaliation against speech in a dispute with airport security screeners.

According to the Supreme Court, the allowance of this claim is very fact specific and should not be extended beyond the specific clauses of the specific amendments for which a cause of action has already been implied. Airport security and TSA screeners are a new context and category of defendant for a Bivens claim, which strongly weighed against recognizing Vanderklok's claim. However, this factor was not dipositive of the court's inquiry.

Special factors counseling hesitation before authorizing a new kind of litigation were ultimately determinative of the court's refusal to recognize the existence of the Vanderklok's claim. First, under the democratic process, Congress should decide whether to provide for a damages remedy - not the courts. The TSA was created in response to the September 11th attacks for the purpose of securing airports, so Vanderklok's claim implicated the government's response to 9/11. National security is the prerogative of Congress and the President, and judicially imposed damages liability may cause an official to second-guess difficult but necessary decisions concerning national-security policy, or increase the probability that a TSA agent would hesitate in making split-second decisions.

Second, the court surmised that Congress's failure to create damages liability in this context likely was not inadvertent. When it created the TSA, Congress restricted the scope of tort liability for the government and its employees, and created an administrative mechanism to adjudicate TSA complaints - TRIP. The Third Circuit believed it should hesitate to create new remedies when the ones available are already limited by congressional design.

Third, the court found Vanderklok's retaliatory prosecution claim poorly suited to address wrongs by line TSA employees because they are not trained on issues of probable cause, reasonable suspicion, and other constitutional doctrines that govern law enforcement officers. If TSA employees encounter situations requiring action beyond their limited responsibilities, they are instructed to contact local law enforcement. The district court ruled Keiser was not an enforcement officer of the TSA and there was no challenge to whether he acted within the scope of his employment. Since a retaliatory prosecution claim hinges on whether the allegedly offending government employee had probable cause to take some enforcement action, there were practical concerns counseling hesitation from the court.

According to the opinion, when it comes to creating judicial remedies, there must be a balancing of priorities - and the proper balance is one for Congress, not the judiciary, to undertake. In the specific context of airport security screeners, special factors precluded the court from implying a Bivens cause of action for First Amendment retaliation.

Find the full opinion at: http://www2.ca3.uscourts.gov/opinarch/163422p.pdf

Panel: Judges Smith, Jordan, and Roth

Argument Date: March 23, 2017

Date of Issued Opinion: August 22, 2017

Docket Number: No. 16-3422

Decided: Reversed and remanded

Case Alert Author: Kevin P. McGilloway

Counsel: John C. Connell, Jordan L. Fischer, Jeffrey M. Scott, counsel for Appellants
Nicholas A. Cummins, Charity C. Hyde, counsel for Defendants City of Philadelphia, Kenneth Flaville, Raymond Pinkney, and Michael Wojciechowski
Colin M. Cherico, Anne B. Taylor, counsel for Defendants United States of America, Transportation Security Administration, John S. Pistole, and Jen Johnson
Robyn L. Goldenberg, Thomas B. Malone, counsel for Appellee
Benjamin C. Mizer, Paul J. Fishman, Daniel J. Aguilar, Sharon Swingle, Mary Hampton Mason, Andrea Jae Friedman, counsel for Amicus Appellant

Author of Opinion: Judge Jordan

Circuit: Third Circuit

Case Alert Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 08/24/2017 03:44 PM     3rd Circuit     Comments (0)  

August 19, 2017
  Real Alternatives Inc v. Secretary, Department of Health and Human Services--Third Circuit
Headline: The RFRA only provides relief from substantial government burdens on religious exercise, and passive eligibility for reimbursement of optional contraceptive services is not a substantial burden.

Area of Law: Constitutional

Issues Presented: (1) Whether the Contraceptive Mandate must exempt a secular anti-abortion group with no religious affiliation, and (2) whether an employee's religious beliefs are substantially burdened by the law's requirement that his or her employer's insurance plan cover contraceptives.

Brief Summary:
A single-isssue non-profit company is not similarly situated with a religion because they are different in structure, aim, purpose, and function. Such organizations do not qualify for religious exemptions, which are reserved for houses of worship based on the longstanding government principle of noninterference.

The substantial burden test, not strict scrutiny, is applied to RFRA claims brought by an individual. Such claimants must show that a penalty or benefit be more than incidental in order to amount to a substantial injury, and here the burden is not direct. Employee actions under the ACA are mediated by an insurance company, and any link between the decision to sign up for insurance on the one hand and the provision of contraceptives to a particular individual on the other is far too attenuated to rank as substantial. The fact that the Government may require insurers to offer coverage for certain services that some might find objectionable on religious grounds cannot form the basis of requiring the Government to adjust its programs on behalf of all employees.

Extended Summary:
The Contraceptive Mandate is a specific part of a larger provision in the Affordable Care Act that requires employer-provided health insurance plans to cover an array of preventative services at no cost to participating employees. The service covered by the mandate is FDA-approved contraceptives, and it includes a limited exemption for houses of worship and their integrated auxiliaries.

Appellant, Real Alternatives, is a non-profit, non-religious, anti-abortion organization. While the company does not hold itself out as a religious entity, it considers contraceptives morally wrong and categorically opposes their use; it only hires employees who share the company's stance on contraceptives and abortion.

Appellant alleged that the mandate violates Equal Protection Clause of the 5th Amendment by exempting religious employers but not secular entities that oppose the mandate. The organization contended that it is identically situated to houses of worship because all of its employees by definition oppose contraceptive coverage. This position posits that if churches receive a religious exemption, then so too must non-religious entities receive religious exemptions.

The Third Circuit rejected this argument because Appellant is not similarly situated to a religious employer, but rather mirrors a single-issue interest group instead of a comprehensive belief system. Real Alternatives is an employer with a single mission statement and it cannot guide believers comprehensively through life in a way similar to religion. Based on the company's limited structure and singular purpose, the court found Appellant to be a completely different type of entity than a religion.

After deciding that Appellant was not similarly situated to a religion, the court warned against the far-reaching consequences of permitting such an organization to qualify for the exemption. Framing the exemption so broadly as to encompass any employer who disagrees with any aspect of an underlying law lies in direct contradiction of the judiciary's refusal to broaden religious exemptions in similar contexts. Further, it would conflict with the body of legislative protections for religious freedom that intentionally exclude mere moral philosophy. Finally, it would ignore the historic governmental recognition of a particular sphere of autonomy for houses of worship.

The Court stated that finding all single-issue non-profit organizations to be similarly situated with houses of worship based on their adherence to a shared position on one issue would expand religious exemptions - a legitimate purpose of the highest order - beyond what is constitutionally required. If the mandate was a violation of Real Alternatives' equal protection rights, any law implicating religion would be rendered moot because the exemption would be too easy to invoke. Drawing upon all the foregoing reasons, the Third Circuit ruled Appellant's Equal Protection claim failed as a matter of law.

The employees of Real Alternatives brought a claim under the Religious Freedom and Restoration Act because their religious beliefs prohibit them from using, supporting, or otherwise advocating the use of abortifacients, and from participating in a health insurance plan that covers them. The insurance plan at issue makes employees eligible to be reimbursed for various optional services. The mandate increases the number of choices an employee has when he or she purchases the plan, but it is still up to the employee to decide what to do with those options.

The Court's review of the RFRA claim presented a question of first impression and served as the basis of its precedential holding. The Court framed the issue to be: whether employees who oppose contraceptives on religious grounds but work for secular employers experience a substantial burden on their religious exercise when the Government regulates group health care plans and providers by requiring them to offer coverage for services the employees find incompatible with their religious beliefs.

As a threshold matter to this issue, the Court held that the RFRA only provides relief from substantial government burdens on religious exercise, and that such substantiality may be determined as a matter of law. A substantial burden on the exercise of religion exists only where the Government demands that an individual engage in conduct that seriously violates his or her religious beliefs. The Court very specifically articulated the contours of this rule; it did not want to improperly conflate the determination that a religious belief is sincerely held with the determination that a law or policy substantially burden religious exercise. The Court's review only evaluated the burden itself, not the reasonableness of the religious belief.

Examining the act performed and not the effect of that act, the Court decided as a matter of law that the burden placed on Real Alternatives employees was not substantial. The act complained of was filling out a form that triggers eligibility for reimbursement of services the employee chooses to use. This action was not changed by the mandate nor does it amount to a substantial burden under the RFRA. The possibility that others might avail themselves of objectionable services is no more burdensome than filling out the form. The Court reasoned that checking off a box to gain eligibility for reimbursement does not indicate support or advocacy for any particular service when the actual selection and use is left entirely to the discretion of the employee.

The Court held that there is a material difference between employers arranging or providing an insurance plan that includes contraception coverage and becoming eligible to apply for reimbursement for a service of one's choosing. Passive eligibility for reimbursement of optional services requires no real participation, and that payment for the ability to have coverage does not give an employee an active role in the underlying plan. Thus, the connection between the conduct and the religious belief was too attenuated to create a substantial burden.

The Third Circuit also found the Appellants' position unworkable. The employee's actions under the ACA are mediated by the insurance company and individuals cannot use the RFRA to compel the Government to structure its relations with a third party in a certain way. Medical treatments that some may view as objectionable are as varied as they are numerous, and finding that coverage for one set of objectionable services constitutes a substantial burden would imply that coverage for all such services impose a substantial burden - rendering the health care system totally unworkable.

For Real Alternatives' APA claims, it alleged that the mandate infringes on Constitutional and federal laws - namely, the Affordable Care Act ("ACA"), the Weldon Amendment, and the Church Amendment. Appellant argued that the mandate violates the ACA by requiring coverage of abortion services, but the court found this argument unsubstantiated and largely based on semantics; it found the Weldon Amendment claim failed for the same reasons. The Church Amendment prohibits an individual from being required by the government to assist in any part of a health service program if his assistance would be contrary to his religious beliefs. This count failed for lack of standing, because the employees at issue purchase their health insurance from a company in the health insurance market, not from the Department of Health and Human Services.

Judge Jordan filed a lengthy dissent on the RFRA claim.


Find the full opinion at: http://www2.ca3.uscourts.gov/opinarch/161275p.pdf

Panel: Judges Jordan, Greenaway, Jr., and Rendell

Argument Date: November 3, 2016

Date of Issued Opinion: August 4, 2017

Docket Number: No. 16-1275

Decided: Affirmed

Case Alert Author: Kevin P. McGilloway

Counsel: Matthew S. Bowman, David A. Cortman, Kevin H. Theriot, Elissa M. Graves, Randy Wenger, counsel for Appellants; Benjamin C. Mizer Peter J. Smith Mark B. Stern Alisa B. Klein Patrick G. Nemeroff Megan Barbero Joshua M. Salzman (Argued), counsel for Appellees; Richard B. Katskee, Natacha Y. Lam, Seth M. Marnin David L. Barkey, counsel for Amici Curiae Americans United for Separation of Church and State; Anti-Defamation League; Central Conference of American Rabbis; Hadassah, The Women's Zionist Organization of America, Inc.; National Council of Jewish Women; People for the American Way Foundation; Union for Reform Judaism; Women of Reform Judaism.

Author of the Opinion: Judge Rendell

Circuit: Third

Case Alert Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 08/19/2017 01:51 PM     3rd Circuit     Comments (0)  

August 18, 2017
  Alissa Moon v. Breathless, Inc.-Third Circuit
Headline: Independent contractor's statutory claim for wages trumps arbitration clause because the clause did not clearly and unambiguously signal that she was surrendering her right to pursue statutory claims in court.

Area of Law: Employment, Fair Labor, Arbitration Clauses

Issues Presented: Does the scope of the arbitration clause in a signed employment contract include plaintiff's statutory claims where it does not specify that statutory claims are included?

Brief Summary:
For controversies over arbitration clauses, courts must determine the extent of the clause and then resolve only issues that fall outside of that scope. Here, the clause did not specifically state the types of claims covered and made no mention of any statutory claims, but did make limiting references to contractual disputes. Therefore, the agreement did not clearly and unambiguously signal to plaintiff that she was surrendering her right to pursue statutory claims in court. Because plaintiff relied solely on her statutory - rather than her contractual - rights to recovery, the court allowed her to proceed on her FLSA claims without first seeking arbitration.

Extended Summary:
Appellant, Alissa Moon, signed an Independent Dancer Rental Agreement to rent performance space from Appellee, Breathless Men's Club. The relevant employment provision stated that Moon was an independent contractor and not an employee. The relevant provisions of the arbitration clause stated that disputes arising under the agreement would be resolved by binding arbitration and that - in arbitration - neither party would have the right to litigate in court nor have a trial by jury.

Moon sued the Club for wages and benefits as an employee under the Fair Labor Standards Act, the New Jersey Wage Payment Law, and the New Jersey Wage and Hour Law. The district court granted summary judgment to the Club, holding that Moon's claims fell within the scope of the agreement's arbitration provision.

On appeal, the Third Circuit conducted two inquiries into the scope of the clause: whether the arbitrability of the issue itself was subject to arbitration, and whether the specific claims at issue were within the scope of the clause. Federal courts apply state contract law for matters of contract interpretation, so the Court applied New Jersey contract law to determine the scope of the clause in controversy. The Third Circuit ruled the arbitrability of the issue and Moon's statutory claims both fell outside the scope of the clause.

To answer the first question, the Court found the language insufficient to include arbitrability. Under New Jersey law, there is a presumption that courts must decide whether an issue is arbitratable unless there is clear and unmistakable evidence that the parties agreed otherwise. In the contract at issue, the court found no mention of arbitrability nor the venue for deciding it. Furthermore, the Club conceded to the lower court that courts decide issues of arbitrability. Therefore, the Club did not overcome its presumptive burden and the Court held that it had the power to review the scope of the clause.

To resolve the second question, the Court found the contract's terminology made the arbitration clause applicable only to contract claims, not statutory claims. To encompass statutory rights, an arbitration clause must identify the substantive area it covers, reference the type of claims waived, and explain the difference between arbitration and litigation. The clause at issue only referenced disputes arising under the agreement - not statutory rights. Further, it did not specifically reference claims related to employment or status as an independent contractor. As such, the explanation of arbitration was immaterial because the clause did not appropriately make clear that it applied to statutory claims.

The Club argued that Moon's claim as an employee arose under the agreement because it referred to her as an independent contractor. The court held that, despite the employment provision, Moon's claim for lawful wages and benefits still arose under the FLSA and state statutes, not the agreement itself. Further, the independent contractor label does not preclude a worker from the protection of the Act if the work done follows the usual path of an employee, nor does it change the applicable standards for arbitration clauses.

Find the full opinion at: http://www2.ca3.uscourts.gov/opinarch/163356p.pdf

Panel: Judges Fisher, Hardiman, Greenaway, Jr.

Argument Date: January 18, 2017

Date of Issued Opinion: August 17, 2017

Docket Number: 16-3356

Decided: reversed and remanded

Case Alert Author: Kevin P. McGilloway

Counsel: Jeremy E. Abay, John K. Weston, counsel for Appellant
Marc J. Gross, Justin P. Kobenschlag, counsel for Appellee

Author of Opinion: Judge Greenaway

Circuit: Third Circuit

Case Alert Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 08/18/2017 01:30 PM     3rd Circuit     Comments (0)  

  Daryle McNelis v. Pennsylvania Power & Light Co. - Third Circuit
Headline: NRC regulations create essential functions required of a qualified individual under the ADA

Area of Law: Employment; Americans with Disabilities Act

Issue(s) Presented: Do NRC regulations create essential functions under the ADA? Should a court question a physician's fitness determination for an employee?

Brief Summary:

As an armed nuclear security officer for Pennsylvania Power & Light Company (PPL), Daryle McNelis had unrestricted access and was authorized to carry a weapon. Federal regulations for nuclear facilities require them to evaluate security officers' fitness for duty, including a high assurance that officers are trustworthy and do not pose any risk to public safety. In 2012, McNelis started to experience mental health problems, as well as alcohol problems. His erratic behavior was reported to a supervisor, who placed McNelis' unrestricted access on hold. A third party psychiatrist evaluated McNelis and concluded that he was not fit for duty. As a result, McNelis was terminated from his position. McNelis brought a suit against PPL claiming that his termination violated the ADA. The Third Circuit affirmed summary judgment for PPL, concluding that McNelis was not a qualified individual under the ADA because he was unable to perform the essential functions created by the regulations.

Extended Summary:

In 2009, Daryle McNelis began working for the Philadelphia Power & Light Company (PPL) as an armed security officer. In this position, McNelis had unrestricted access to the PPL plant. By 2012, McNelis started to exhibit mental health problems, such as paranoia, as well as a drinking problem. As part of the Nuclear Regulatory Commission's regulations, one of McNelis' co-workers reported concerns about McNelis' behavior. As a result, PPL temporarily withdrew McNelis' unrestricted access. McNelis was evaluated by a psychologist, who determined that McNelis was not fit for duty. As a result, PPL terminated McNelis' employment. McNelis filed a suit, claiming that his termination violated the Americans with Disabilities Act. The District Court found that his termination was based on the fact that he lacked a mandated job requirement under the NRC.

The Third Circuit affirmed the District Court's grant of summary judgment, finding that McNelis would not be considered a qualified individual under the ADA. In order for someone to satisfy the qualified individual prong, he/she must satisfy the prerequisites for the position and must be able to perform the essential functions of the position. The Court determined that McNelis was unable to perform the essential functions of his position because he did not have unrestricted security access and he was deemed unfit for duty. Both of these things are required in order to work as an armed security guard in a nuclear power plant. The Court determined that the NRC regulations created essential functions of the job under the ADA.

The Court further noted that the NRC has created an employee screening system for certain traits or behaviors that may endanger the public. In doing so, the NRC cannot exempt individuals with disabilities from this screening process, as their priority is to ensure the protection of the public. The ADA applies differently to positions that implicate the public welfare.

In response to one of McNelis' contentions, the Third Circuit concluded that McNelis was given the full opportunity to dispute the evaluation done by Dr. Thompson. The NRC regulations provide for certain review procedures, which allowed McNelis the opportunity to dispute the perceptions of Dr. Thompson and PPL. McNelis was not entitled to more review than the NRC regulations provided, as PPL appropriately followed the procedures that are outlined in the NRC regulations. In addition, the Court determined that even though PPL generally allows employees a chance to comply with treatment recommendations, they are not obligated to do so as a matter of law.

The Third Circuit disagreed with McNelis' assertion that PPL was not entitled to rely on Dr. Thompson's evaluation. Referencing the Supreme Court, the Third Circuit noted that a court should not doubt a physician's evaluation that an employee failed to meet the appropriate regulatory standards for his/her position. In addition, the NRC regulations prohibit PPL from second-guessing the fitness determination after it was made.

The Third Circuit affirmed the judgment of the District Court.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/163883p.pdf

Panel: Hardiman, Roth, and Fisher, Circuit Judges

Argument Date: May 26, 2017

Date of Issued Opinion: August 15, 2017

Docket Number: No. 16-3883

Decided: Affirmed

Case Alert Author: Kristina Flatley

Counsel: Ralph Lamar and Marc Weinstein, Counsel for Appellant; Darren Creasy, Counsel for Appellee

Author of Opinion: Circuit Judge Hardiman

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 08/18/2017 01:04 PM     3rd Circuit     Comments (0)  

August 10, 2017
  USA v. Joseph Ferriero - Third Circuit
Headline: Integrity-undermining intent is not required under the New Jersey bribery statute; New Jersey bribery statute is constitutional

Area of Law: RICO; Wire Fraud

Issue(s) Presented: Does the New Jersey bribery statute require integrity-undermining intent? Is the New Jersey bribery statute unconstitutionally vague? Does the Supreme Court decision in McDonnell impact the outcome of this case?

Brief Summary:

Joseph Ferriero was the chairman of the Bergen County Democratic Organization. He was involved in nominating Democrats in local elections and helped raise money for the Democratic Party. He also helped to connect vendors with elected Democrats. Ferriero made a deal with John Carrino, a vendor, to recommend his firm, C3, to local officials. In return, Ferriero would receive commissions on the contracts that hired the firm. Ultimately, Ferriero was convicted for violations of the Travel Act, RICO, and the federal wire fraud statute. The Third Circuit affirmed these convictions, finding the Travel Act and RICO did not require proof of integrity-undermining intent for an individual to be convicted. The Court further ruled that party officials were intended to be included under the Travel Act and Rico, that the New Jersey bribery statute was constitutional, and that the definition of "official act" determined in McDonnell v. United States did not impact the outcome of this case.

Extended Summary:

Joseph Ferriero was the chairman of the Bergen County Democratic Organization. As party chair, Ferriero was responsible for raising money for the Democratic Party, helping elect candidates, and connecting vendors with elected Democrats. Ferriero entered into a contract with John Carrino, who owned C3, a corporation that provided notification systems for local governments. Ferriero and Carrino agreed that Ferriero would recommend C3 to local officials and in return, Ferriero would receive commissions when Carrino's firm was hired. None of the local officials were aware of the agreement between Ferriero and Carrino. At least four towns hired C3 and Ferriero received at least $11,875 in commissions. Cliffside Park was one of the towns that Ferriero approached about hiring Carrino's firm. However, the mayor was concerned about Ferriero's role and sent an email inquiring into the owners of the corporation. Carrino responded to the email with no mention of Ferriero and Cliffside Park ultimately retained Carrino's services. Ferriero was indicted for violations of RICO, the Travel Act, and wire fraud statutes. Ferriero moved for acquittal, which the court denied. He was sentenced to prison and ordered to forfeit any profits that he made.

The Third Circuit affirmed Ferriero's conviction under the Travel Act and RICO, finding that the government did not need to demonstrate that Ferriero had the intent to undermine the integrity of a public action. The Court noted that the current New Jersey bribery statute should be applied to public officials or voters and "prohibits bribing those persons to secure a particular decision, opinion, recommendation, or vote." Ferriero's argument that the previous statutory language of integrity-undermining intent should be read into the current statute is not supported by any previous court decisions.

The Third Circuit affirmed that the District Court appropriately instructed the jury regarding the nexus element of the RICO charge. In order for the nexus element to be satisfied, there must be a strong connection between the defendant, his/her involvement in the enterprise's affairs, and the pattern of racketeering. The District Court correctly interpreted this statute and instructed the jury that Ferriero's participation in the enterprise's affairs by means of, by consequence of, by reason of, by agency of, or by instrumentality of a pattern of racketeering activity is sufficient to satisfy the nexus element.

The Court affirmed that a rational juror could conclude that the bribery scheme was a means by which Ferriero participated in the conduct of business. A rational juror could have determined that the BCDO's affairs extended further than the official duties. The bribery scheme did not have to occur in the official capacity because Ferriero's participation in the conduct of the party's affairs was sufficient. The Court further noted that there was sufficient evidence to demonstrate that Ferriero participated in the conduct of BCDO's affairs by means of a pattern of bribery.

The Third Circuit concluded that there was sufficient evidence for a rational juror to determine that the representation made in Carrino's email was materially false and fraudulent. Ferriero argued that the failure to specify his involvement in the contract was an omission that should not be considered a false representation because he did not owe a duty to disclose. The Court noted that most cases that use that standard have involved a situation where the defendant did not make an actual representation and instead, remained silent. Carrino's email involves an actual representation that was made to Cliffside Park and therefore, a jury is capable of determining whether the representation was false or fraudulent. The Court determined that there was sufficient evidence for a rational juror to make this determination.

The Third Circuit disagreed with Ferriero's argument that Congress did not intend for party officials to be punishable for bribery under RICO or the Travel Act. The Court found that the definition of bribery found in the Travel Act and RICO should be read broadly to include all relationships that involve a special trust, which should be protected from the corrupt influence of bribery. Party officials fall into this category of occupying a position of special trust and fall within the individuals who are punishable under RICO and the Travel Act.

The Court also concluded that New Jersey's bribery statute is not unconstitutionally vague or overbroad. The statute offers specificity in describing the acceptance of a benefit that would be considered bribery. Further, the statute gives public officials and party officials a reasonable opportunity to understand what conduct is prohibited. In addition, the Court determined that there are no applications of the bribery law that can be deemed unconstitutional. This statute does not punish First Amendment activity because it only punishes corrupt agreements that are not protected under the First Amendment. The Court concluded that there was no sufficient basis to deem the bribery statute as unconstitutional.

Finally, the Third Circuit concluded that the Supreme Court decision in McDonnell v. United States did not have an effect on the outcome of this case. In McDonnell, the Supreme Court held that setting up a meeting or talking to another official were not sufficient to be considered "official acts" under the federal bribery statute. The Supreme Court rejected a broad interpretation of this statute that would encompass almost all activities of a public official. The Third Circuit determined that statute interpretation used in McDonnell should not be applied to the New Jersey bribery statute in this case because the New Jersey statute already uses a narrow and specific interpretation.

The Third Circuit affirmed the judgments of conviction against Ferriero.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/154064p.pdf

Panel: Hardiman and Scirica, Circuit Judges; Rosenthal, District Judge

Argument Date: November 1, 2016

Date of Issued Opinion: August 4, 2017

Docket Number: No. 15-4064

Decided: Affirmed

Case Alert Author: Kristina Flatley

Counsel: Peter Goldberger, Counsel for Appellant; Mark Coyne and Bruce Keller, Counsel for Appellee

Author of Opinion: Circuit Judge Scirica

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 08/10/2017 11:43 AM     3rd Circuit     Comments (0)  

August 7, 2017
  Charles Blackledge v. Olga Blackledge - Third Circuit
Headline: The Third Circuit held that shared parental intent of a settled purpose is sufficient to constitute a habitual residence; split custody should be considered as one factor in determining habitual residence

Area of Law: Custody; Hague Convention on Child Abduction

Issue(s) Presented: Is a retention date determined by the original date of consent? Is a "settled purpose" enough to demonstrate habitual residence? Does split custody give rise to alternating habitual residences?

Brief Summary:

Petitioner filed a petition under the Hague Convention, seeking the return of his son, J.B., to Germany. J.B. and Respondent had been residing in Pittsburgh for a year at the time the petition was filed. The District Court denied the petition, finding that retention was not wrongful under the Hague Convention. The Third Circuit ultimately affirmed, while clarifying some minor errors in the District Court's reasoning. The Court found that the District Court determined an incorrect retention date by focusing on the original consent given by the Petitioner. When Petitioner filed the petition under the Hague Convention, he sufficiently withdrew his consent. The Third Circuit further found error in the District Court's determination that there was no evidence of an agreement between Respondent and Petitioner. However, the Court concluded that even though there was an agreement, the shared parental intent factor still demonstrated that the United States was the appropriate habitual residence. After clarifying these errors, the Third Circuit affirmed, finding that denial of Petitioner's petition was appropriate.

Extended Summary:

Petitioner filed a petition alleging that his wife, the Respondent, was acting in violation of the Hague Convention on the Civil Aspects of International Child Abduction by retaining their son in the United States. Petitioner, Respondent, and their son, J.B., lived in various countries during his childhood. In Spring 2011, Petitioner moved to Germany to work as a patent agent. During this same time, Respondent and J.B. moved to Pittsburgh, where they lived for two years. In August 2013, Respondent and J.B. returned to Germany, where J.B. attended school and Respondent was working on a Ph.D. program. In August 2015, Petitioner and Respondent were having difficulties in their marriage and Respondent and J.B. returned to Pittsburgh, with Petitioner's agreement, to finish her Ph.D. While in Pittsburgh, J.B. attended second grade, where he succeeded academically and he was very involved in extracurricular activities as well. In February 2016, Petitioner and Respondent corresponded through email about the living status of J.B. These emails discussed an agreement that J.B. was to return to Germany for the following school year. However, Respondent insisted that their son should not be changing schools each year. During this ongoing dispute, Respondent filed for divorce and received an interim custody order. With no resolution as to whether J.B. would return to Germany, Petitioner filed a petition under the Hague Convention, seeking J.B.'s return.

The District Court held a bench trial and used the email correspondence, testimony from Petitioner and Respondent, as well as testimony from J.B.'s school, to determine the appropriate retention date to be August 2016. Based on this, the District Court found that J.B.'s habitual residence was in Pittsburgh and therefore, retention was not wrongful under the Hague Convention. The District Court denied the petition.

The Third Circuit determined that the August retention date adopted by the District Court was inappropriate. The Court found that the District Court erred by focusing on the Petitioner's original consent and not focusing on the subsequent communications between Petitioner and Respondent. The Third Circuit concluded that the appropriate retention date was July 6, when Petitioner filed his Hague Convention petition and fully withdrew his prior consent.

The Third Circuit held that the District Court erred in determining that there was no credible evidence that the parties had an agreement that J.B. remain in Pittsburgh for a specific duration. The Court found that there was specific evidence on record that showcased an agreement of this nature. Habitual residence is determined by the parents' shared intent as to a settled purpose for the child's move to Pittsburgh and the child's acclimatization to the claimed residence. The Third Circuit concluded that both factors still favored the United States as J.B.'s habitual residence. Petitioner and Respondent intended J.B.'s stay in Pittsburgh to have a settled purpose. He resumed a normal and routine life in Pittsburgh. The Court determined that parties' agreement for J.B. to return to Germany did not diminish the parties' intention for J.B. to live a settled life in Pittsburgh. J.B. was also acclimatized to his life in Pittsburgh. For these reasons, the Third Circuit found that the District Court was ultimately correct in deciding that the United States was J.B.'s habitual residence at the time.

The Third Circuit further addressed the idea of "shuttle custody," where a child splits time between his parents' countries of residence. The Court determined that an agreement to alternate custody in different countries does not necessarily equate to alternating habitual residences. Instead, the Court held that this type of agreement should be considered as a factor in determining whether the parents intended the child's move to have a degree of settled purpose. The Court found that the totality of the circumstances, including the retention date, degree of settled purpose, and shared parental intent, supported the finding that J.B.'s habitual residence was the United States.

Petitioner argued that, due to the District Court's error on the retention date, certain evidence regarding J.B.'s acclimatization should be inadmissible. In response, the Third Circuit determined that this error was harmless and the record regarding acclimation was sufficient based on the correct retention date. The District Court's determination that J.B. had acclimated to the United States was still appropriate.

The Third Circuit affirmed the District Court's decision to deny the petition.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/163667p.pdf

Panel: Ambro, Krause, and Nygaard, Circuit Judges

Argument Date: May 19, 2017

Date of Issued Opinion: August 3, 2017

Docket Number: No. 16-3667

Decided: Affirmed

Case Alert Author: Kristina Flatley

Counsel: James Martin and Michael Yingling, Counsel for Appellant; Barbara Ernsberger, Counsel for Appellee.

Author of Opinion: Circuit Judge Krause

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 08/07/2017 09:43 AM     3rd Circuit     Comments (0)  

August 3, 2017
  Vance Haskell v. Superintendent Greene SCI-Third Circuit
Headline: The actual prejudice standard of Brecht does not apply to claims on habeas, where the state has knowingly presented or knowingly failed to correct perjured testimony. A reasonable likelihood that the perjured testimony affected the judgment of the jury is all that is required.

Area of Law: Criminal Procedure

Issues Presented: Is the defendant entitled to relief once he has shown a reasonable likelihood the false testimony could have affected the judgment of the jury, or must he also show the perjured testimony caused him actual prejudice?

Brief Summary:
Pennsylvania knowingly used perjured eyewitness testimony to convict a man of murder. The defendant filed a habeas petition in federal court for due process violations. The Third Circuit found a reasonable likelihood that the false testimony could have affected the judgment of the jury, and granted him relief. The court further held that it is unnecessary for a defendant to show that such an error had a substantial and injurious effect on the verdict because, when the state has corrupted the truth-seeking function of the trial by knowingly presenting or failing to correct perjured testimony, the threat to a defendant's constitutional rights is at its apex and the state's interest are their lowest.

Extended Summary:
Haskell was convicted of first-degree murder and several other crimes in connection with the 1994 shooting death of a man in Erie, Pennsylvania. To secure his conviction, the state's prosecutor relied heavily on testimony from four eyewitnesses. Of the four witnesses, only one - Antoinette Blue - gave consistent testimony, the other three either recanted their account or had previously denied being able to identify the shooter.

At trial, Blue claimed she expected nothing in return from the Commonwealth in exchange for her testimony, but both she and the prosecutor knew the state's help with Blue's own pending criminal matter was the quid pro quo for her testimony. The prosecutor failed to correct her statement, and even used her "untainted" participation for leverage in his closing argument.

Haskell filed a habeas petition challenging his conviction as tainted by perjured testimony in violation of his 14th amendment due process rights, to which the district court denied relief. It held that Blue's testimony was indeed false and that the prosecutor knew or should have known the same, but that Haskell failed to show that the perjured testimony had a substantial and injurious effect or influence on the jury's verdict - the Brecht standard.

For federal cases on direct review of perjured testimony in a state prosecution, the materiality test applies a reasonable likelihood standard. Under this standard, Haskell must establish that: (1) Blue committed perjury, (2) the Commonwealth knew or should have known that the testimony was false, (3) the false testimony was not corrected, and (4) there is a reasonable likelihood that the perjured testimony could have affected the judgment of the jury. Uncontested facts established the first three elements, and the Third Circuit reasoned that Blue's central role in the state's case coupled with knowledge of the benefit she received posed a reasonable likelihood of affecting the jury's judgment.

This standard puts the burden on the prosecution to show, beyond a reasonable doubt, that the perjured testimony was a harmless error. Thus, the materiality and harmless error - Brecht - standards merge; whenever the applicable materiality test is derived from the reasonable likelihood standard, the test for materiality supplies the test for harmlessness.

But the issue on appeal, as framed by the Third Circuit, is whether the Brecht standard also applies to such a case under collateral review - here, a habeas petition. According to the Brecht standard, when constitutional trial errors are raised in habeas proceedings - as opposed to on direct review - the defendant must prove actual prejudice. This standard puts the burden on the defendant to show that the perjured testimony had a substantial and injurious effect or influence on the jury's verdict. The majority of circuit courts have ruled that Brecht does indeed apply.

The Third Circuit ruled against the majority, stating that Brecht does not apply when the state has knowingly presented or failed to correct perjured testimony. The court began its reasoning by citing exceptions to Brecht, such as when a state violates the Brady rule by suppressing evidence, and then pointed out that the presentation of perjured testimony is one of three errors that implicate Brady. Directly addressing the argument of opposing circuits, the court said the materiality standard for false testimony should be lower because fabrication of the truth is an even greater error than suppression of the truth; it is the duty and responsibility of the state to elicit the truth and correct what is false.

The Third Circuit also found that the facts of this case did not reach the three main concerns of Supreme Court's Brecht rule, rather they fell closer to the Court's rule that a conviction obtained by the knowing use of perjured testimony is fundamentally unfair. The Third Circuit reasoned that when the state knowingly presents perjured testimony, it deprives the defendant of his constitutional right to due process and obtains a conviction through deceit. Perjured testimony cases involve a corruption of the truth-seeking function of the trial process by the state itself, and concerns of finality do not trump those of justice. Further, there is little chance that excluding perjured testimony claims from Brecht analysis will degrade the prominence of the trial itself, because the trial is where the perjury occurs.

Find the full opinion at: http://www2.ca3.uscourts.gov/opinarch/153427p.pdf

Panel: Judges Ambro, Vanaskie, and Restrepo

Argument Date: March 27, 2017

Date of Issued Opinion: August 1, 2017

Docket Number: No. 15-3427

Decided: reversed and remanded

Case Alert Author: Kevin P. McGilloway

Counsel: Lisa B. Freeland, Elisa A. Long, counsel for Defendant
Mark W. Richmond, counsel for Prosecution

Author of Opinion: Judge Ambro

Circuit: Third Circuit

Case Alert Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 08/03/2017 12:51 PM     3rd Circuit     Comments (0)  

July 28, 2017
  United States v. White - Eighth Circuit
Headline Eighth Circuit overturns longstanding precedent and holds that government must prove knowledge of firearm characteristics requiring registration under the National Firearms Act in order to support a conviction for possession of an unregistered firearm

Area of Law Criminal Law

Issue(s) Presented Whether the district court properly instructed the jury regarding the government's burden of proof with respect to charge of possession of an unregistered firearm.

Brief Summary While executing a search warrant at the home of Robert White's parents, officers recovered a duffel bag containing an unregistered shotgun and a stolen handgun, among other things. White was charged with possession of a stolen firearm and possession of an unregistered firearm. At trial, no direct evidence was presented that White knew the shotgun to be stolen. In addition, the district court's jury instructions with respect to the unregistered handgun did not contain a mens rea requirement indicating the White knew the firearm to have certain characteristics requiring it to be registered. White objected to the jury instruction and offered alternative language, which the district court rejected. White was convicted of both counts.

On appeal, a panel of the Eighth Circuit affirmed the unregistered firearm conviction, but reversed the stolen firearm conviction due to insufficient evidence regarding White's knowledge that the firearm had been stolen. White requested, and was granted, rehearing en banc and the panel opinion was vacated.

The Eighth Circuit reinstated the panel opinion with respect to reversal of the stolen firearm conviction with no additional analysis. With respect to the unregistered firearm conviction, the Court noted that the Supreme Court has held that a district court must instruct the jury that knowledge of the characteristics bringing a firearm under the National Firearms Act (the Act) is a necessary element of the offence of possession of an unregistered firearm. A prior Eighth Circuit case, United States v. Barr, 32 F.3d 1320 (8th Cir. 1994), however, created a caveat. The caveat stated that when the characteristics of a weapon are 'quasi-suspect' the government need not show proof that the defendant actually knew of the specific characteristics bringing the weapon within the Act. Instead, the government need only prove that the defendant possessed the 'quasi-suspect' weapon and observed its characteristics. The Eighth Circuit en banc held that Barr in inconsistent with Supreme Court precedent and is overruled. It further held that in this case, the jury instructions did not properly instruct on the knowledge required to secure a conviction for possession of an unregistered firearm. As such, White's conviction on this count was also reversed.

The full text of the opinion may be found at http://media.ca8.uscourts.gov/opndir/17/07/152027P.pdf

Panel En Banc

Date of Issued Opinion July 11, 2017

Decided Reversed

Docket Number 15-2027

Counsel Rebecca L Kurz for Appellant and Jeffrey Q. McCarther for Appellee

Author Circuit Judge Shepherd

Case Alert Circuit Supervisor Joelle Larson, University of Minnesota Law School

    Posted By: Joelle Larson @ 07/28/2017 03:27 PM     8th Circuit     Comments (0)  

  Catamaran Corporation v. Towncrest Pharmacy - Eighth Circuit
Headline In matter of first impression, Eighth Circuit holds that courts must decide whether arbitration agreements authorize class arbitration absent clear language delegating the decision to an arbitrator

Area of Law Arbitration

Issue(s) Presented Whether the district court properly held that arbitration agreements' reference to AAA rules committed the question of whether class arbitration was allowed under the agreements to an arbitrator.
Brief Summary Catamaran Corporation is a pharmacy benefits manager and contracts with entities that sponsor, administer, or otherwise participate in prescription drug benefit plans. One of the services Catamaran provides is reimbursing pharmacies who provide prescription drugs to people covered by such a plan. The defendants are four pharmacies who have arrangements with Catamaran for such reimbursements under two different agreements. Each agreement contains an arbitration provision indicating that the rules of the American Arbitration Association (AAA) will apply to any dispute arising out of the agreements.

A dispute arose between Catamaran and the pharmacies. The pharmacies filed a demand for class arbitration with the AAA asserting claims on behalf of themselves and similarly situated independent pharmacies. The class contained over 85 pharmacies. In response, Catamaran filed a declaratory judgment action and argued that the agreements do not allow the pharmacies to proceed with class arbitration. Instead, Catamaran argued that each pharmacy must engage in bilateral arbitration. The district court held that because the agreements reference application of the AAA rules, they clearly and unmistakably commit the decision of whether the agreements contemplate class arbitration to an arbitrator, not the court.

On appeal, a panel of the Eighth Circuit reserved. The Court first addressed whether the issue of class arbitration is a substantive question of arbitrability typically reserved to courts. The panel noted that the Supreme Court has not definitively answered this question. It determined, however, that recent Supreme Court decisions noting the fundamental differences between bilateral and class arbitration and rulings by sister circuits indicate that the question of class arbitration is substantive, not merely procedural, and requires judicial determination unless the parties clearly and unmistakably delegate the question to an arbitrator. Here, the agreements were both silent as to class arbitration. The Court held that mere reference to AAA rules alone is not enough to clearly and unmistakably delegate the question to an arbitrator, and therefore the question falls to the courts. It instructed the district court to determine whether a contractual basis for class arbitration exists under the agreements on remand.

The full text of the opinion may be found at http://media.ca8.uscourts.gov/opndir/17/07/163275P.pdf

Panel Chief Judge Smith and Circuit Judges Fenner and Shepherd

Date of Issued Opinion July 28, 2017

Decided Reversed

Docket Number 16-3275

Counsel Jason Michael Casini for Appellant and Bruce Henry Stoltze, Sr. for Appellees

Author Circuit Judge Shepherd

Case Alert Circuit Supervisor Joelle Larson, University of Minnesota Law School

    Posted By: Joelle Larson @ 07/28/2017 02:22 PM     8th Circuit     Comments (0)  

July 26, 2017
  Steven Trzaska v. L'Oreal USA, Inc. - Third Circuit
Headline: An implicit threat by an employer that would result in the disregard of obligatory ethical standards of one's profession violates a clear mandate of public policy within the meaning of New Jersey's Conscientious Employee Protection Act

Area of Law: Employment Law

Issue(s) Presented: Can the rules of professional conduct governing attorneys serve as a basis to bring a CEPA claim alleging that employer fired employee who refused to violate such rules?

Brief Summary:

Steven Trzaska was working as a patent attorney for L'Oréal USA, Inc. The patent team had to meet a certain annual quota or face losing their jobs. After Trzaska approached his superiors with concerns that he was being expected to violate ethical standards in order to meet this quota, he was fired. Trzaska sued L'Oréal for wrongful retaliatory discharge. The Third Circuit reversed the dismissal of the claim, determining that the rules of professional conduct were mandates of public policy and that Trzaska had sufficiently pleaded facts showing that his employer implicitly directed him to disregard those ethical obligations, supporting a CEPA claim.



Extended Summary:

Steven Trzaska was the head of the patent team for L'Oréal USA. His team was in charge of determining a product's patentability and submitting patent applications to the United States Patent and Trademark Office (USPTO). As an attorney, Trzaska was required to follow the Rules of Professional Conduct established by the Supreme Court of Pennsylvania, as well as the rules provided by the USPTO. These ethical standards prevented attorneys from filing bad-faith patent applications. The patent team was given an annual quota of 40 patent applications. If they were unable to meet this quota, management said that their careers could be negatively impacted. Trzaska was concerned that he would be expected to file frivolous patents in order to meet the quota, so he brought these concerns to his superiors. After making it known that he would not violate the rules of professional conduct, Trzaska was offered two severance packages to leave the company. When he did not accept, L'Oréal fired him. In response, Trzaska filed a claim for wrongful retaliatory discharge in violation of the New Jersey Conscientious Employee Protection Act (CEPA) against L'Oréal USA and L'Oréal, S.A.

The Third Circuit reversed the District Court's decision to dismiss, finding that Trzaska had sufficient grounds to bring a CEPA claim. The CEPA protects employees from retaliatory actions when an employee refuses to participate in an activity or policy that he/she believes is in violation of a law or rule pursuant to law. The Court concluded that Trzaska's allegation that L'Oréal was instructing or threatening its patent attorneys to disregard the rules of professional conduct is a violation of the public policy mandate under CEPA. The Third Circuit determined that CEPA protection was triggered because a patent itself is relevant to public policy and violation of the rules of professional conduct can harm the public's interest. For these reasons, termination for failure to disregard the ethical obligations of one's profession creates an adequate CEPA claim.

The Third Circuit also reversed the District Court's holding that even if there was sufficient basis to bring a claim, Trzaska failed to adequately plead that claim. The Court concluded that Trzaska had met the standard of review, whether a complaint provides enough facts to raise a reasonable expectation that a cause of action can be determined through discovery. Trzaska's complaint alleged the company policies, as well as the threatened termination of employees. These allegations supported Trzaska's reasonable belief that he would be fired if he did not disregard his ethical obligations sufficient to proceed to discovery.

The Third Circuit denied L'Oréal, S.A.'s motion to dismiss the appeal due to the failure file a notice of appeal. The Court held that there was a connection between the appeal against L'Oréal USA and L'Oréal, S.A. and there was an inferred intent to appeal both orders The Third Circuit determined that there was clear intent that Trzaska wanted to appeal against both orders. In addition, L'Oréal, S.A. was still given the full opportunity to brief the issues.

Circuit Judge Chagares dissented in part, noting that he would have found that Trzaska did not sufficiently plead a CEPA claim because a heightened standard should be applied to Trzaska as an attorney and he failed to plead that L'Oréal demanded that he violate his professional obligations.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/153810p.pdf

Panel: Ambro, Chagares, and Fuentes, Circuit Judges

Argument Date: November 16, 2017

Date of Issued Opinion: July 25, 2017

Docket Number: No. 15-3810

Decided: Reversed and Remanded

Case Alert Author: Kristina Flatley

Counsel: Daniel Bencivenga and Harold Goodman, Counsel for Appellant; George Barbatsuly, Laura Scully, Christopher Carton, and Eric Savage, Counsel for Appellees.

Author of Opinion: Circuit Judge Ambro

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/26/2017 03:07 PM     3rd Circuit     Comments (0)  

  Steven Trzaska v. L'Oreal USA, Inc. - Third Circuit
Headline: An implicit threat by an employer that would result in the disregard of obligatory ethical standards of one's profession violates a clear mandate of public policy within the meaning of New Jersey's Conscientious Employee Protection Act

Area of Law: Employment Law

Issue(s) Presented: Can the rules of professional conduct governing attorneys serve as a basis to bring a CEPA claim alleging that employer fired employee who refused to violate such rules?

Brief Summary:

Steven Trzaska was working as a patent attorney for L'Oréal USA, Inc. The patent team had to meet a certain annual quota or face losing their jobs. After Trzaska approached his superiors with concerns that he was being expected to violate ethical standards in order to meet this quota, he was fired. Trzaska sued L'Oréal for wrongful retaliatory discharge. The Third Circuit reversed the dismissal of the claim, determining that the rules of professional conduct were mandates of public policy and that Trzaska had sufficiently pleaded facts showing that his employer implicitly directed him to disregard those ethical obligations, supporting a CEPA claim.



Extended Summary:

Steven Trzaska was the head of the patent team for L'Oréal USA. His team was in charge of determining a product's patentability and submitting patent applications to the United States Patent and Trademark Office (USPTO). As an attorney, Trzaska was required to follow the Rules of Professional Conduct established by the Supreme Court of Pennsylvania, as well as the rules provided by the USPTO. These ethical standards prevented attorneys from filing bad-faith patent applications. The patent team was given an annual quota of 40 patent applications. If they were unable to meet this quota, management said that their careers could be negatively impacted. Trzaska was concerned that he would be expected to file frivolous patents in order to meet the quota, so he brought these concerns to his superiors. After making it known that he would not violate the rules of professional conduct, Trzaska was offered two severance packages to leave the company. When he did not accept, L'Oréal fired him. In response, Trzaska filed a claim for wrongful retaliatory discharge in violation of the New Jersey Conscientious Employee Protection Act (CEPA) against L'Oréal USA and L'Oréal, S.A.

The Third Circuit reversed the District Court's decision to dismiss, finding that Trzaska had sufficient grounds to bring a CEPA claim. The CEPA protects employees from retaliatory actions when an employee refuses to participate in an activity or policy that he/she believes is in violation of a law or rule pursuant to law. The Court concluded that Trzaska's allegation that L'Oréal was instructing or threatening its patent attorneys to disregard the rules of professional conduct is a violation of the public policy mandate under CEPA. The Third Circuit determined that CEPA protection was triggered because a patent itself is relevant to public policy and violation of the rules of professional conduct can harm the public's interest. For these reasons, termination for failure to disregard the ethical obligations of one's profession creates an adequate CEPA claim.

The Third Circuit also reversed the District Court's holding that even if there was sufficient basis to bring a claim, Trzaska failed to adequately plead that claim. The Court concluded that Trzaska had met the standard of review, whether a complaint provides enough facts to raise a reasonable expectation that a cause of action can be determined through discovery. Trzaska's complaint alleged the company policies, as well as the threatened termination of employees. These allegations supported Trzaska's reasonable belief that he would be fired if he did not disregard his ethical obligations sufficient to proceed to discovery.

The Third Circuit denied L'Oréal, S.A.'s motion to dismiss the appeal due to the failure file a notice of appeal. The Court held that there was a connection between the appeal against L'Oréal USA and L'Oréal, S.A. and there was an inferred intent to appeal both orders The Third Circuit determined that there was clear intent that Trzaska wanted to appeal against both orders. In addition, L'Oréal, S.A. was still given the full opportunity to brief the issues.

Circuit Judge Chagares dissented in part, noting that he would have found that Trzaska did not sufficiently plead a CEPA claim because a heightened standard should be applied to Trzaska as an attorney and he failed to plead that L'Oréal demanded that he violate his professional obligations.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/153810p.pdf

Panel: Ambro, Chagares, and Fuentes, Circuit Judges

Argument Date: November 16, 2017

Date of Issued Opinion: July 25, 2017

Docket Number: No. 15-3810

Decided: Reversed and Remanded

Case Alert Author: Kristina Flatley

Counsel: Daniel Bencivenga and Harold Goodman, Counsel for Appellant; George Barbatsuly, Laura Scully, Christopher Carton, and Eric Savage, Counsel for Appellees.

Author of Opinion: Circuit Judge Ambro

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/26/2017 03:07 PM     3rd Circuit     Comments (0)  

July 21, 2017
  Semcrude L.P. v. J. Aron & Co. - Third Circuit
Headline: Downstream Buyers are Considered Buyers-for-Value and Purchased Oil From Bankruptcy Debtor/Midstream Purchaser Free of Security Interests Claimed by Oil Producers

Area of Law: Fraud; Bankruptcy

Issue(s) Presented: Did J. Aron and BP satisfy the three requirements of the buyer-for-value defense? Was jurisdiction of the District Court and Bankruptcy Court appropriate under Title 11? Is constructive knowledge sufficient to overcome the knowledge elements of the buyer-for-value defense?

Brief Summary:

In the aftermath of the bankruptcy of SemGroup, a midstream purchaser, the oil producers filed a suit against J. Aron and BP oil, the downstream purchasers, to obtain full payment for the oil. The District Court granted summary judgment in favor of J. Aron and BP on recommendation of the Bankruptcy Court. The Third Circuit affirmed, finding that the Producers had not perfected their claimed security interests, and that J. Aron and BP were buyers-for-value, which allowed them to purchase the oil free of any secured interest. In addition, the Third Circuit found no sufficient evidence for the fraud claim brought against J. Aron and BP.

Extended Summary:

SemGroup operated as a "midstream" company because SemGroup purchased oil from producers and sold that oil to downstream purchasers. As a result, the oil producers and downstream purchasers were both effected when SemGroup filed for bankruptcy. Based on previous agreements, the downstream purchasers were protected from SemGroup's insolvency and were paid in full after the bankruptcy. However, the producers made no protection agreement and were only paid in part. As a result, the producers filed claims against J. Aron and BP, the downstream purchasers, to recover unpaid debts. The Bankruptcy Court recommended summary judgment in favor of J. Aron and BP, finding that there was no evidence of fraud and that both companies were free of any security interest as buyers for value. The District Court adopted the Bankruptcy Court's recommendation for summary judgment.

The Third Circuit affirmed that the Bankruptcy Court and the District Court had jurisdiction under 28 U.S.C. § 157(c)(1) and 28 U.S.C. § 1334(b) because the proceedings were related to cases under title 11. Both Courts appropriately exercised related-to jurisdiction because the proceedings had a potential effect on the bankruptcy estate.

The Court affirmed that Delaware and Oklahoma law govern perfection and that J. Aron and BP qualified as buyers for value because the Producers' security interests were not perfected. The Producers claimed that their security interest in the oil continued after the oil was resold to J. Aron and BP. Under U.C.C. § 9-317(b), if a security interest were not perfected, J. Aron and BP would take the oil free of that security interest, unless they actually knew of the security interest. The Producers also argued that Texas or Kansas law should govern perfection. Under U.C.C. Article 9, the local law of the jurisdiction where a debtor is located should govern perfection. The Bankruptcy and District Courts appropriately applied Delaware's choice-of-law rules because Delaware is the forum state. Under Delaware law, a financing statement must be filed in order to have perfected security interests. The Producers failed to make this filing, and thus their interests are unperfected.

The Third Circuit determined that J. Aron and BP satisfied the second requirement of the buyer-for-value defense because they purchased oil on credit per industry custom. Under U.C.C. § 1-204, J. Arons and BP's purchases on credit were sufficient to satisfy the value requirement.

The Third Circuit also affirmed the District Court in finding that no reasonable fact finder would determine that J. Aron or BP had knowledge of the Producer's security interest. Under U.C.C. § 1-202(b), actual knowledge is required to negate the third element of the buyer-for-value defense. The Court affirmed that constructive knowledge is not sufficient to defeat this defense. J. Aron and BP satisfied the three elements required to demonstrate the buyer-for-value defense. For this reason, summary judgment was appropriate. The Court declined to determine whether they were also buyers in the ordinary course.

The Third Circuit affirmed the District Court's grant of summary judgment against the Producers' fraud claim. The Court determined that the Producers had the opportunity to fully oppose summary judgment during the discovery process. The Producers were unable to demonstrate direct evidence in the record to suggest that J. Aron or BP participated in fraud or that they even knew most of the producers. The business arrangement between SemGroup, J. Aron and BP , which involved options trading in addition to the purchase of oil, was not sufficient to demonstrate that J. Aron and BP knew that they were taking oil that had not been paid for.

Finally, the Court determined that the District Court's grant of summary judgment against the Oklahoma Producers was appropriate because the Oklahoma Production Revenue Standards Act (PRSA) did not create an implied trust or impose any duties on J. Aron. The Oklahoma Producers argued that, under the PRSA, an implied trust would be created against J. Aron and therefore, it would be responsible for full payment of the oil. The Court determined that the PRSA was not intended to be applied to downstream purchasers, like J. Aron, and that the language in the statute does not suggest the creation of an implied trust that travels down the stream of commerce. The Third Circuit further concluded that the 2010 Lien Act does not apply to this case because it was passed after SemGroup declared bankruptcy.

The Third Circuit affirmed the rulings of both the Bankruptcy and District Courts.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/153094p.pdf

Panel: Ambro, Jordan, and Fisher, Circuit Judges

Argument Date: April 4, 2017

Date of Issued Opinion: July 19, 2017

Docket Number: Nos. 15-3094, 15-3095, 15-3096, 15-3097, 15-3121, 15-3123, 15-3124

Decided: Affirmed

Case Alert Author: Kristina Flatley

Counsel: Blake Bailey, Paul Moak, Basil Umari, Peter Goodman, Sarah Jorgensen, Michael Carney, Hugh Ray, Lewis LeClair, Adam Landis, and Matthew McGuire, Counsel for Anstine & Musgrove Inc.; Don Beskrone, Stacy Newman, Boaz Morag, Rishi Zutshi, and Thomas Moloney, Counsel for J. Aron & Co.; James Carr, Melissa Byroade, David Zalman, Monica Hanna, Kevin Capuzzi, and Jennifer Hoover, Counsel for BP Oil Supply Co.; Ian Bifferato, Thomas Driscoll, III, Kevin Collins, Mark Collins, John Knight, Michael Romanczuk, Zachary Shapiro, L. Katherine Good, Maris Kandestin, Garvin McDaniel, R. Stephen McNeill, Travis McRoberts, Benjamin Stewart, Mark Stromberg, and W. Robert Wilson, Counsel for Semcrude LP; Charles Brown, III, Counsel for Star Production Inc.; Hartley Martyn and Duane Werb, Counsel for IC Co. Inc.

Author of Opinion: Circuit Judge Ambro

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/21/2017 02:01 PM     3rd Circuit     Comments (0)  

July 20, 2017
  Parks, LLC v. Tyson Foods, Inc-Third Circuit
Headline: False advertising claims may not be used to subvert the evidentiary burden of a false association claim

Area of Law: Trademarks

Issues Presented: Is there a substantive distinction between false advertising and false association claims? Does geographic origin refer solely to place of origin, or does it include any broader conception of the term origin?

Brief Summary:
The Third Circuit affirmed the lower court's dismissal of PARKS' false advertising and false association claims against Tyson. The court dismissed the false advertising claim because - principally - it was a false association claim in disguise, the former of which has a lesser evidentiary burden. For the false association claim, the court held that no reasonable jury could find secondary meaning in the "PARKS" mark because there is almost no direct-to-consumer advertising, PARKS had a miniscule market share, and there is virtually no record of actual confusion.

Extended Summary:
Parks Sausage Company ("PARKS") was founded in 1950 and is the first African-American owned company to be publicly traded on the NYSE. The company enjoyed wide success and recognition until the early 1990's, when it went bankrupt and sold to new owners, who then entered into a licensing agreements with distributors. PARKS registered its trademark in 1970 and let it lapse around 2000.

Tyson owns and manufactures "BALL PARK" branded hot dogs, which account for 23% of all franks sold in the United States.* Tyson claims that 90% of adults in the U.S. recognize the Ball Park brand, so it designed a premium product - "PARK'S FINEST" - to capitalize on the brand recognition.

The claims on appeal were false association and false advertising, which PARKS brought under the Lanham Act. To establish a false advertising claim, the statement must misrepresent the nature, characteristics, qualities, or geographic origin of a product. To establish a false association claim, the owner of an unregistered trademark has the burden of proving the existence of a protectable mark - here, a second meaning in the form of a mental association in buyers' minds between the alleged mark and a single source of the product.

PARKS made three arguments in support of its false advertising claim, the name PARK'S FINEST is misleading because: it falsely implies Tyson's product is one of PARKS' products; it implies that the product is a sausage when it is really a frankfurter, an item consumers may regard as inferior; and it mispresents product origin.

The court dismissed all three for being inseparable from false association claims. It reasoned PARK'S FINEST is only misleading if a consumer makes the connection between PARK'S FINEST and PARKS, and has in mind a pre-existing association between PARKS and high-quality products. The court noted that the distinction between a frankfurter and a sausage is not legally significant - here, the PARK'S FINEST packaging displays a factually accurate unambiguous statement that the product is a frankfurter, and a frankfurter is a kind of sausage. Additionally, the court specifically held that "geographic origin" refers solely to place of origin and not to the creator, manufacturer, or any broader conception of the term origin. The name PARK'S FINEST says nothing about the product's geographic origin, so the false advertising claim failed on all three allegations.

On the false association claim, PARKS argued its mark is inherently distinctive and - in the alternative - that its mark had secondary meaning. The court affirmed the claim's dismissal because trademarks based on the surname of a founder - Parks - are not inherently distinctive, and the mark cannot have secondary meaning if not interpreted by the public as both an identification of the product and a representation of its origin. The record showed no recent extensive advertising such as would create the necessary mental association between the mark and the product - Tyson submitted extensive focus group/survey data showing the name PARK'S FINEST was selected without any reference to PARKS and none of the sales numbers from PARKS are large enough to indicate a secondary meaning.

PARKS attempted to establish secondary meaning by showing customer confusion, but the court found insufficient evidence. The customer surveys submitted by PARKS were fundamentally flawed and did not evaluate the presence of secondary meaning. Also, there was no showing of actual confusion amongst consumers because there were only a handful of such complaints among the millions of franks sold by PARK'S FINEST.

* "Though it may distress the cognoscenti, we use the terms 'frankfurters,' 'franks,' and 'hot dogs,' as synonyms. Not so with the term 'sausage,' which we use to denote something akin to but arguably different from hot dogs."

Find the full opinion at: http://www2.ca3.uscourts.gov/opinarch/162768p.pdf

Panel: Circuit Judges Smith, Jordan, and Roth

Argument Date: March 22, 2017

Date of Issued Opinion: July 6, 2017

Docket Number: No. 16-2768

Decided: Affirmed

Case Alert Author: Kevin P. McGilloway

Counsel:
Roberta Jacobs-Meadway, Jeffrey P. Lewis, Theodore H. Jobes, Ronald J. Shaffer, James C. McConnon, Alex R. Sluzas, counsel Appellant

Daniel T. Brier, Mark H. Churchill, John J. Dabney, Mary D. Hallerman, counsel for Appellees

Author of Opinion: Judge Jordan

Circuit: Third Circuit

Case Alert Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/20/2017 10:27 AM     3rd Circuit     Comments (0)  

July 17, 2017
  Atron Castleberry v. STI Group - Third Circuit
Headline: "Pervasive or Severe" is the Appropriate Legal Standard for a Harassment Claim; An Isolated Incident Can Give Rise to a Harassment or Retaliation Claim.

Area of Law: Employment Discrimination

Issue(s) Presented: Was "pervasive and regular" the appropriate standard to apply to a racial harassment claim? Is an isolated incident of discrimination sufficient to be considered "severe"? Can one incident be sufficient to bring a retaliation claim? Can a claim of disparate impact discrimination be brought under § 1981?

Brief Summary:
Castleberry and Brown filed claims under § 1981 for racially-based harassment, discrimination, and retaliation in their workplace. The Third Circuit reversed the dismissal of the harassment claim, finding that the District Court applied the wrong legal standard and that the Plaintiffs satisfied the correct "severe or pervasive" standard. The Third Circuit reversed the District Court's dismissal of the disparate treatment claim because appropriate burden-shifting framework was not implemented. Defendants did not meet their burden of proof to overcome Plaintiffs' allegations. The Court reversed the dismissal of the retaliation claim, finding that an isolated incident is sufficient to bring claim under § 1981. The Third Circuit did not remand for Plaintiffs' amended disparate impact claim because the claim cannot be brought under § 1981.

Extended Summary:

Atron Castleberry and John Brown were hired by STI Group to work as general laborers for Chesapeake Energy Corporation. During their employment, Appellants claim multiple instances where they were harassed or discriminated against based on their race. They claim that they were not permitted to work on the pipelines, even though they had sufficient work experience. They also reported the use of offensive language and racial comments made towards them. After reporting an incident to a superior, Castleberry and Brown were terminated, rehired, and then terminated again. The reasoning that STI Group gave for their termination was "lack of work." Castleberry and Brown filed a suit against STI and Chesapeake claiming racially-based harassment, discrimination, and retaliation under 42 U.S.C § 1981.

The Third Circuit reversed the District Court's decision to dismiss the harassment claim because the District Court used the "pervasive and regular" standard when assessing the harassment claim. In order to prevail on a harassment claim, a plaintiff must demonstrate that the discrimination was severe or pervasive. Due to conflicting precedent, the District Court applied the incorrect standard when assessing the Plaintiffs' harassment claim. The Third Circuit clarified that "severe or pervasive" is the correct standard and that one incident can be sufficient to state a claim. The racially charged slurs, as well as threats of termination, were enough to bring a harassment claim.

The Court reversed the District Court's decision to dismiss the Plaintiff's claim under disparate treatment discrimination. Plaintiffs brought allegations of undesirable work assignments due to their race, as well as termination because of their race. The Third Circuit ruled that these allegations were sufficient to satisfy the elements of a discrimination claim. The District Court erred in dismissing before Defendants had satisfied their burden of demonstrating nondiscriminatory reasons for the incidents that occurred.

The Third Circuit also reversed the District Court's dismissal of the retaliation claim because the District Court was relying on the incorrect reasoning that an isolated discriminatory remark would not satisfy the "pervasive and regular" standard. Under the correct "severe or pervasive" standard, an isolated incident is sufficient to bring a claim and can amount to unlawful activity. Due to this incorrect application, the Third Circuit found that Plaintiffs could bring a retaliation claim under the premise that one discriminatory remark could amount to unlawful activity.

While the District Court did not address the Plaintiffs' claim of disparate impact discrimination, the Third Circuit found that remand was unnecessary because a claim of disparate impact cannot be brought under § 1981. The Court determined that § 1981 was enacted to provide recourse for purposeful and intentional discrimination claims and does not support claims brought under a theory of disparate impact.

The Third Circuit reversed and remanded the District Court's decision in regards to Plaintiffs' harassment, disparate treatment discrimination, and retaliation claims.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/163131p.pdf

Panel: Ambro, Vanaskie, and Restrepo, Circuit Judges

Argument Date: March 28, 2017

Date of Issued Opinion: July 14, 2017

Docket Number: No. 16-3131

Decided: Reversed and Remanded

Case Alert Author: Kristina Flatley

Counsel: David Horowitz and Richard Swartz, Counsel for Appellant; Terri Patak, Daniel Brier, and Donna Walsh, Counsel for Appellees.

Author of Opinion: Circuit Judge Ambro

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/17/2017 04:33 PM     3rd Circuit     Comments (0)  

July 14, 2017
  Noreen Susinno v. Work Out World Inc.- Third Circuit
Headline: Plaintiff has standing for claim under the Telephone Consumer Protection Act based on single pre-recorded call to her cell phone

Area of Law: Consumer protection, TCPA

Issues Presented: Does the TCPA prohibit a solicitor from leaving a single voicemail of a pre-recorded promotional offer on a consumer's cellphone? If so, is mere receipt of the call a sufficiently concrete injury for Article III standing?

Brief Summary:
Work Out World (WOW) left one prerecorded promotional voicemail on Susinno's cell phone, which Susinno claimed was a violation of the Telephone Consumer Protection Act (TCPA). The Third Circuit reversed dismissal of her claim, holding that the TCPA prohibition extends to single phone calls and that the call caused Susinno a concrete injury. The Third Circuit held that, where a plaintiff's intangible injury has been made legally cognizable through the democratic process, and the injury closely relates to a cause of action traditionally recognized in the English and American courts, standing to sue exists. The injury here was squarely covered by the TCPA and is closely related to traditional torts like invasion of privacy, intrusion upon seclusion, and nuisance.

Extended Summary:

The Third Circuit reversed the District Court's dismissal for lack of subject matter jurisdiction of a claim under the TCPA. Plaintiff Susinno had alleged a claim under the TCPA based on WOW's single pre-recorded call to her cell phone. The Court rejected WOW's argument that the TCPA does not prohibit a single pre-recorded call to a cell phone if the owner is not charged for the call, and that congress's primary concern in prohibiting prerecorded calls is the cost to the consumer. The Court noted that the TCPA grants the FCC power to exempt from prohibition certain prerecorded calls that do not charge the recipient. It also found such calls may implicate the privacy rights Congress intended to protect with the statute - regardless of charges - and held the statute applies equally to residential cell phones as it does house phones.

The Court further held that Susinno's alleged injuries were sufficiently concrete to establish constitutional standing under Spokeo. It held that, when one sues under a statute alleging the very injury the statute is intended to prevent, and the injury has a close relationship to a harm traditionally providing a basis for a lawsuit, a concrete injury has been pleaded. Congress squarely identified single-prerecorded calls as an injury under the TCPA. Susinno met the second part of the test because her claim closely relates to a common law cause for intrusion upon seclusion - which has long been heard in American courts - and Congress sought to protect the same interests implicated by this traditional common law claim in enacting the TCPA. Therefore, Susinno alleged a sufficiently concrete intangible injury.

Find the full opinion at: http://www2.ca3.uscourts.gov/opinarch/163277p.pdf

Panel: Circuit Judges Hardiman and Krause, and District Judge Stengel (sitting by designation)

Argument Date: March 8, 2017

Date of Issued Opinion: July 10, 2017

Docket Number: No. 16- 3277

Decided: Reversed and remanded for further proceedings.

Case Alert Author: Kevin P. McGilloway

Counsel:
Keith J. Keogh, Timothy J. Sostrin, Yitzchak Zelman, Ari Marcus, counsel for Appellant

Joshua S. Bauchner, Michael H. Ansell, counsel for Appellees

Andrew J. Pincus, counsel for amicus Chamber of Commerce in support of Appellees

Brian Melendez, counsel for amicus ACA International in support of Appellees

Author of Opinion: Judge Hardiman

Circuit: Third Circuit

Case Alert Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/14/2017 04:37 PM     3rd Circuit     Comments (0)  

July 11, 2017
  USA v. Binyamin Stimler - Third Circuit
Headline: No Reasonable Expectation of Privacy in CSLI, religious freedom did not preclude rabbis' prosecution for kidnapping

Area of Law: Criminal Law

Issue(s) Presented: Is there a reasonable expectation of privacy in cell site location information?? Was the government's kidnapping prosecution substantially burdensome to the religious beliefs of the defendants? Was an FBI sting sufficiently outrageous to violate due process?

Brief Summary:
Three rabbis appeal their convictions for conspiracy to kidnap recalcitrant husbands to force them to agree to divorce. They claimed error in denying a motion to suppress evidence, a Fourth Amendment violation, violation of the Religious Freedome Restoration Act, jury instruction errors, and a due process violation. The Third Circuit affirmed, holding that the third-party doctrine does not apply to cell site location information (CSLI) and there is no reasonable expectation of privacy in CSLI. The Court also affirmed that the government has a compelling interest in preventing kidnapping and the prosecution did not substantially burden the defendants' religious beliefs. The Third Circuit also found that evidence of the defendants' religious practices was not relevant to the affirmative defense of consent and could, therefore, be excluded. The Court rejected the argument that the FBI's sting operation which led to the arrests was so outrageous that it violated due process. Finally, the Court affirmed the finding that the co-conspirator statements were admissible because they were made in furtherance of the conspiracy.

Extended Summary:

Binyamin Stimler, Jay Goldstein, and Mendel Epstein were convicted of conspiracy to commit kidnapping. All three men were Orthodox Jewish rabbis. They were involved with a kidnapping ring, where the rabbis would kidnap and torture Jewish husbands to coerce them to sign divorce contracts. After being arrested during an FBI sting, all three men were convicted following a jury trial.

The Third Circuit affirmed the District Court's decision to deny Goldstein's motion to suppress cell site location information (CSLI) evidence. Under the Stored Communications Act (SCA), the government can require a provider to disclose records when a court order is obtained, if there are reasonable grounds for requiring this information. This standard was satisfied because the government was able to demonstrate that it had sufficient reason to believe that the CSLI would be able to assist in the investigation. The Court relied In re Application, which held that the third-party doctrine does not apply to CSLI and that individuals do not have a reasonable expectation of privacy in CSLI. The Court determined that subsequent cases from other circuits were not sufficient to undermine the holding in In re Application and that Supreme Court precedent was distinguished so that denial of the motion to suppress was appropriate.

The Court next found that defendants were unable to demonstrate that the government substantially burdened their religious beliefs. Under the Religious Freedom Restoration Act (RFRA), government conduct cannot substantially burden an individual's exercise of religion, unless that burden is the "least restrictive means of furthering a compelling government interest." The defendants had the original burden of proving that the government substantially burdened their religious beliefs and they were unable to show that they lacked acceptable alternative means to assist the women in getting divorces. In addition, the government has a compelling interest in preventing serious crimes, such as kidnapping.

The Court held that the District Court did not abuse its discretion in excluding evidence about Orthodox Jewish marital law. The Court affirmed that evidence of religious practices was not relevant to raising the affirmative defense of consent because there was no specific consent given to the particular kidnappings and therefore, the religious evidence was not relevant. The Court was also concerned that religious evidence might have prejudiced the jury.

The Third Circuit found no error regarding the District Court's jury instructions. The Court concluded that the District Court's instruction regarding the conspiracy charge was sufficient because the instructions, as a whole, made it clear that the charge contained a jurisdictional element. The Court found no error regarding the kidnapping instruction because many jury instructions have been upheld that do not include a temporal element. A reasonable jury would have found that the defendants' actions involved "an appreciable period of time." The Court also found no error in the jury instruction that referred to the specific motive that was charged in the indictment.

The Court affirmed the District Court's decision to admit statements made by alleged co-conspirators. The Court determined that the statements were not testimonial because the individuals would not have believed their statements would be used to aid in a criminal prosecution. The Confrontation Clause was not violated by the admission of these statements. The admissibility of the statements was appropriate under the Federal Rules of Evidence because the individuals were members of the kidnapping team and co-conspirators. Their statements were made in furtherance of the conspiracy and thus properly admitted.

The Court concluded that the due process claim, that the sting operation was outrageous, was barred because the argument was not made in District Court. However, the Court determined that, even if the argument was allowed, no due process violation occurred. The government's operation could not be considered "so outrageous" to be considered as a due process violation.

Judge Restrepo concurred in the judgment but would have held that the government's actions, regarding the CSLI, were a warrantless search that violates the Fourth Amendment. In all other aspects of the opinion, Judge Restrepo concurred.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/154053p.pdf

Panel: Chagares, Restrepo, and Roth, Circuit Judges

Argument Date: January 25, 2017

Date of Issued Opinion: July 7, 2017

Docket Number: No. 15-4053, 4094, 4095

Decided: Affirmed

Case Alert Author: Kristina Flatley

Counsel: Nathan Lewin and Gedalia Stern, Counsel for Appellant Stimler; Aidan O'Connor, Counsel for Appellant Goldstein; Laura Gasiorowski and Robert Stahl, Counsel for Appellant Epstein; Mark Coyne, Norman Gross, and Glenn Moramarco, Counsel for Appellee.

Author of Opinion: Circuit Judge Roth

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/11/2017 03:58 PM     3rd Circuit     Comments (0)  

  Daryoush Taha v. County of Bucks - Third Circuit
Headline: Third Circuit Determines that Compensatory Damages are not Required to Impose Punitive Damages under CHRIA; Punitive Damages can be Imposed on Government Agencies.

Area of Law: Class Certification, punitive damages

Issue(s) Presented: Can a court impose punitive damages without any compensatory damages under CHRIA? Does Plaintiff need to demonstrate actual harm to have standing under Article III? Can punitive damages be imposed on a government agency?

Brief Summary:
The Third Circuit affirmed the District Court's certification of a class in a suit challenging Bucks County's creation of an internet search tool that included personal information on every individual held in the Bucks County Correctional Facility since 1938. The Court ruled that intangible harm is sufficient to create standing under Article III. Taha sufficiently demonstrated "aggrieved" standing under Pennsylvania's Criminal History Record Information Act (CHRIA) by showcasing harm that was unique to him. The Court further affirmed that compensatory damages are not required for punitive damages to be imposed. Under Pennsylvania law, punitive damages can be imposed as long as the plaintiff can demonstrate a cause of action. The Court affirmed the District Court's finding that punitive damages could be imposed on a government agency because CHRIA provides a waiver of sovereign immunity.

Extended Summary:

Daryoush Taha is the class representative for a punitive class claim brought against Bucks County and Bucks County Correctional Facility for the creation of an "Inmate Lookup Tool." This tool allows individuals to search for people who have been held or incarcerated at Bucks County Facility. Taha was incarcerated in 1998, but his record was ultimately expunged. In 2011, Taha learned of the inmate search tool, which had his mug shot and information on his arrest. Taha filed for certification of a class composed of individuals whose criminal history could be located on the search tool. The District Court granted class certification and partial summary judgment.

The Third Circuit was unwilling to review the Defendants' defense that certification violated one-way intervention under Rule 23 because they failed to raise the defense in District Court. The Third Circuit determined that the defendants had multiple opportunities to raise this defense below and they failed to do so.

The Third Circuit also found that Taha had standing under Article III and under CHRIA. The Court determined that Taha had standing under Article III because intangible harm can be sufficient to meet the necessary requirements. The Court determined that Taha sufficiently demonstrated that he suffered actual harm from the posting of his photograph, including embarrassment, sadness, and weight loss. Under CHRIA, the Court found that Taha demonstrated "aggrieved" standing because he has a substantial, direct, and immediate interest in the outcome of the litigation. Taha sufficiently showcased that the harm he experienced was unique to him and that causation exists between the defendants' actions and the harm that occurred.

The Third Circuit affirmed the District Court's finding that punitive damages could be imposed, even though Taha did not suffer compensatory damages. The Court affirmed this decision with the understanding that, under CHRIA, a court may impose punitive damages without compensatory damages, as long as the plaintiff has demonstrated a cause of action.

The Court affirmed that punitive damages could be imposed upon a government agency. The District Court ruled that CHRIA provides a waiver of sovereign immunity, so punitive damages could be imposed. CHRIA authorizes punitive damages and is applicable to government agencies.

The Third Circuit affirms the District Court holding that the remaining factual issue of willfulness can be determined based on common evidence. The predominance factor requires that common questions relevant to all class members predominate over any questions specific to each individual. The question of the defendants' intent in creating the website can be answered without taking into account the individual effects on class members.

The Third Circuit affirmed the District Court's decision.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/163077p.pdf

Panel: Greenaway, Jr., Shwartz, and Greenberg, Circuit Judges

Argument Date: March 15, 2017

Date of Issued Opinion: July 6, 2017

Docket Number: No. 16-3077

Decided: Affirmed

Case Alert Author: Kristina Flatley

Counsel: Frank Chernak and Burt Rublin, Counsel for Appellants; Alan Denenberg, Robert LaRoca, and Jonathan Shub, Counsel for Appellee; Crystal Clark, Counsel for Amicus Curiae County Commissioners Association of Pennsylvania; Janet Ginzberg, Counsel for Amicus Curiae Community Legal Services.

Author of Opinion: Circuit Judge Greenberg

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/11/2017 03:05 PM     3rd Circuit     Comments (0)  

July 10, 2017
  Richard Fields v. City of Philadelphia - Third Circuit
Headline: Third Circuit Determines that Recording Police Officers in Their Official Duties is a First Amendment Right; Police Officers are Granted Qualified Immunity

Area of Law: First Amendment

Issue(s) Presented: Is there a First Amendment right to record police activity in public? If so, was this right sufficiently established to overcome qualified immunity?

Brief Summary:

The Third Circuit held that the First Amendment protects an individual's right to record police officers performing their official duties in public areas. It rejected the lower court's decision limiting constitutional protection based on the intent of the recorder, holding that recording is protected regardless of the recorder's intent to share the recording. However, the Third Circuit held that the officers were entitled to qualified immunity because, at the time of both incidents, the constitutional right that they violated was not clearly established. The Court did not make a ruling on municipal liability because the District Court did not have the opportunity to make a first judgment.

Extended Summary:

Amanda Geraci was attending a protest when she began to record a police officer arresting a protestor. When the police noticed, an officer pushed her against the wall so that she would be unable to film the arrest. She was not arrested. Similarly, Richard Fields was recording the police while they broke up a party. When he refused to stop filming, he was arrested and his phone was confiscated. While being detained, the officer searched through the videos on his phone. He was released with a citation, which was eventually dropped. Both filed claims under 42 U.S.C. § 1983, against the City of Philadelphia and individual police officers. The Plaintiffs alleged that their First Amendment right to record was violated by these officers. The District Court granted summary judgment in favor of the officers and determined that the Plaintiffs' activities were not protected by the First Amendment because the act of recording was not expressive conduct.

The Third Circuit reversed, holding that expressive intent does not need to be present at the moment the recording takes place. Instead, an individual might not appreciate the content of the recording until afterwards. The First Amendment should provide the opportunity to use a recording in an expressive manner. The Court notes the importance of information about police activity and how recordings help to provide accurate information. For these reasons, the Court held that the First Amendment protects the recording of police officers performing their official duties in public, consistent with reasonable time, place, and manner restrictions. A recording that interferes with police activity might not be protected under the First Amendment. However, the Plaintiffs involved in this case did not interfere with the police activity.

However, the Court also found that the police officers are entitled to qualified immunity because this First Amendment right was not clearly established when the violation took place. The right to record police officers in their official duties was not a right that had been established in previous opinions. Plaintiffs argued that the Police Department's policies should be enough to clearly establish the First Amendment right. The Court determined that these policies were not sufficient to make officers understand the constitutional right to record.

The Court remanded the issue of municipal liability to allow the District Court the first opportunity to make this determination.

Circuit Judge Nygaard concurred in part and dissented in part, agreeing with the holding that recording police officers in their official duties is a First Amendment right. However, he would hold that this right was clearly established and therefore, qualified immunity is inappropriate.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/161650p.pdf

Panel: Ambro, Restrepo, and Nygaard, Circuit Judges

Argument Date: May 9, 2017

Date of Issued Opinion: July 7, 2017

Docket Number: Nos. 16-1650 and 16-1651

Decided: Reversed and Remanded

Case Alert Author: Kristina Flatley

Counsel: Jonathan Feinberg, John Grogan, Peter Leckman, Seth Kreimer, Mary Roper, and Molly Tack-Hopper, Counsel for Appellants; Craig Gottlieb, Counsel for Appellees; Dorothy Hickok, Alfred Putnam, Mark Taticchi, and Ilya Shapiro, Counsel for Amicus Appellant Cato Institute; Eli Segal, Counsel for Amicus Appellant Society for Photographic Education; Sharon McGowan, April Anderson, and Tovah Calderon, Counsel for Amicus Appellant United States of America; Bruce Brown and Gregg Leslie, Counsel for Amicus Appellant Reporters Committee for Freedom of the Press and 31 Media Organizations; Sophia Cope and Adam Schwartz, Counsel for Amicus Appellant Electronic Frontier Foundation; Robert LaRocca, Counsel for Amicus Appellant First Amendment Law Professors; Patrick Geckle, John Burton, and David Milton, Counsel for Amicus Appellant National Police Accountability Project; Jason Gosselin, John Whitehead, Douglas McKusick, and Christopher Moriarty, Counsel for Amicus Appellant Rutherford Institute.

Author of Opinion: Circuit Judge Ambro

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/10/2017 09:51 AM     3rd Circuit     Comments (0)  

July 7, 2017
  Colleen Reilly, et al. v. City of Harrisburg, et al. - Third Circuit
Headlines: Third Circuit Holds that while Considering a Request for Equitable Relief, the Movant Must Meet the Threshold for the Two Most Critical Factors, Not All Four Factors.

Third Circuit Holds that in a First Amendment Case, the Government Bears the Burden of Proof on the Ultimate Question of a Statute's Constitutionality.

Area of Law: Constitutional Law, Equitable Relief

Issue(s) Presented: In deciding a request for equitable relief, should a court require all four factors to be met for the request to be appropriate, or only the first two most critical factors?

In a First Amendment case, does the burden of proof shift to the Government to prove ultimate questions of a statute's constitutionality, or must the plaintiff prove its likelihood to succeed on the merits?

Brief Summary: Plaintiffs brought a constitutional challenge to a Harrisburg city ordinance they allege impermissibly restricts their right to protest near abortion clinics. Plaintiffs also sought a preliminary injunction to enjoin the ordinance's enforcement. The District Court denied their request for an injunction because it claimed Plaintiffs did not meet their burden of demonstrating that they were likely to succeed on the merits. Plaintiffs requested that the Third Circuit review the merits of their case and the denial of the injunction. Because Plaintiffs' claims were still before the District Court, the Third Circuit stated that the District Court should evaluate the constitutional claims. Regarding the request for injunctive relief, the Third Circuit held that the District Court misallocated the burden of demonstrating narrow tailoring. It also clarified the analysis for granting a preliminary injunction. The Third Circuit ultimately vacated the decision and remanded for further consideration.

Extended Summary: Plaintiffs Colleen Reilly and Becky Biter brought a constitutional challenge to a Harrisburg city ordinance they allege impermissibly restricts their right to protest in the vicinity of abortion clinics. Plaintiffs also sought a preliminary injunction to enjoin the ordinance's enforcement. The District Court denied their request for an injunction because it claimed Plaintiffs did not meet their burden of demonstrating that they were likely to succeed on the merits. Plaintiffs requested that the Third Circuit review the merits of their case and the denial of the injunction.

The ordinance prohibited persons to knowingly congregate, patrol, picket or demonstrate in a zone extending twenty (20) feet from a health care facility. The ordinance's purpose was to promote the health and welfare of the city's residents and visitors to the health care facilities, as well as the health and welfare of those who wished to voice their constitutionally protected speech outside of the facilities. The ordinance applied to all persons equally, except for police, employees and other exempted persons, regardless of the intent of their conduct or content of their speech. Plaintiffs claim to provide sidewalk counseling to those entering abortion clinics by use of leaflets, prayer and conversation, in attempts to dissuade patients from getting abortions. Plaintiffs allege that the ordinance creates unconstitutional buffer zones that render their ability to engage effectively in counseling impossible. They allege that the ordinance violates their First Amendment rights to speak freely, exercise their religion, and assemble. They also allege the ordinance violates their Fourteenth Amendment due process and equal protection rights. In additional to challenging the constitutionality of the ordinance, Plaintiffs requested a preliminary injunction to enjoin the enforcement of the ordinance. The District Court ruled that Plaintiffs did not meet their burden of demonstrating that they were likely to succeed on the merits and denied their request for relief.

Regarding the request for injunctive relief, the Third Circuit held that the District Court did not provide a full analysis of whether to grant the request, and misallocated the burden of demonstrating narrow tailoring. It therefore vacated the decision and remanded for further consideration. The Third Circuit ultimately held that a movant for preliminary equitable relief must meet the threshold for the first two most critical factors. First, it must demonstrate that it can win on the merits. Second, it must demonstrate that it is more likely than not to suffer irreparable harm in the absence of preliminary relief. Once these gateway factors are met, the court can then consider the remaining two factors and determine, in its sound discretion, if all four factors taken together balance in favor of granting the requested preliminary relief.

The Third Circuit also reasoned that while plaintiffs normally bear the burden of demonstrating a sufficient likelihood of prevailing on the merits, in First Amendment cases, the Government bears the burden of proof on the ultimate questions of a statute's constitutionality. Plaintiffs must be deemed likely to prevail unless the Government has shown that Plaintiffs' proposed alternatives are less effective than the statute. The burdens at the preliminary injunction stage track the burdens at trial, which rest with the Government for First Amendment purposes. Therefore, the Third Circuit vacated and remanded the decision for further proceedings.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/163722p.pdf

Panel: Ambro, Jordan, and Roth, Circuit Judges

Argued: March 21, 2017

Date of Issued Opinion: May 25, 2017

Docket Number: No. 16-3722

Decided: Vacated and remanded.

Case Alert Author: Rachel N. Costello

Counsel: Mary E. McAlister, Esq., Mathew D. Staver, Esq., & Horatio G. Mihet, Esq., Counsel for Appellants; Joshua M. Autry, Esq. & Frank J. Lavery, Jr., Esq. Counsel for Appellees.

Author of Opinion: Ambro, Circuit Judge.

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 07/07/2017 12:33 PM     3rd Circuit     Comments (0)  

July 6, 2017
  John Daubert v. NRA Group, LLC, d/b/a National Recovery Agency - Third Circuit
Headline: Specific evidence is required to show express consent to receive collection calls on cell phone; bona fide error defense to FDCPA claims not applicable to mistake of law

Area of Law: Telephone consumer protection, debt-collection.

Issues Presented:
Does the mere possibility a called-party provided his cell phone number to his creditor - raise a genuine issue of fact as to whether he expressly consented to collection calls?
Is good-faith reliance upon persuasive legal authority sufficient for the bona fide error defense to excuse an FDCPA?

Brief Summary:

Daubert sued NRA for FDCPA violations because there was a barcode used to identify him printed on a collection letter's envelope, and for TCPA violations because he never consented to automated phone calls. NRA asserted an affirmative defense, the bona fide error defense, to the FDCPA claim and argued that Daubert's prior express consent as a defense to the TCPA claim.

The Third Circuit affirmed the grant of summary judgment to Daubert on the TCPA claim, because no direct evidence of Daubert's prior consent existed on the record and NRA failed to show a genuine issue of material fact. Further, the court affirmed the lower court's decision to exclude an affidavit about automated dialing submitted by NRA because it flatly contradicted prior testimony and lacked support from the record.

The Third Circuit reversed the district court's ruling on the FDCPA violations, and remanded with instructions that judgment be entered for Daubert. NRA admitted to the violations when it invoked the bona fide error defense, but it cited the authority of two district courts to excuse its mistake of law. The Third Circuit ruled that the bona fide error defense does not apply to mistakes of law.

Extended Summary:

NRA attempted to collect a $25 debt from Daubert, which he originally owed to a hospital, by sending him a collection letter and calling him sixty-nine times in ten months. The collection letter was sent with a unique identifier barcode, which was plainly visible through the window of the envelope. The sixty-nine phone calls were made using some form of automated phone calling software.

Barcodes fall into a grey area for liability under FDCPA, with precedent on both sides of the question. NRA believed barcodes printed on envelopes were not a violation, a belief supported by two Eastern District court opinions finding no FDCPA violation for printing barcodes to identify the debtor on the envelopes of collection letters. The Third Circuit reversed the grant of judgment as a matter of law to NRA, holding that reliance on precedent shows that NRA made a mistake of law, not fact. The Supreme Court has held that the defense does not apply to mistakes of law.

The sixty-nine phone calls were the basis for TCPA violations. This statute was enacted to shield consumers from unwanted phone calls and other forms of harassment through telecommunications. Collectors may not contact people using automated dialing systems unless the called-party has given prior express consent. Daubert claimed he never consented, the district court found the calls constituted violations, and the Third Circuit affirmed.

The Court rejected NRA's argument that Daubert consented when he gave his phone number to the hospital. Daubert established an absence of direct support for NRA's claim, meeting his burden of proof as the moving party. NRA failed to meet its burden as the non-moving party because it did not do more than "show that there is some metaphysical doubt." There was nothing in the evidence, depositions, interrogatories, and admissions on file that NRA used - beyond its own pleadings and affidavits - to show a genuine dispute of material fact existed relating to the TCPA claim.

The Court also held that the District Court was within its discretion in refusing to admit an affidavit NRA submitted to show the phone calls were not automated. The original testimony regarding the automated system came from a deposition, in which NRA selected an employee to speak on its behalf. The employee testified that some level of automation existed in the phone system, but months later NRA submitted an affidavit saying there was no automation in the process.

The sham-affidavit doctrine provides for the court's discretion in such situations, which the lower court properly exercised under the circumstances. NRA never cited specific evidence nor gave a satisfactory explanation as to the duress or incompetency that compromised the deposition. The court is supposed to consider the totality of the circumstances when using its discretion to admit or reject a sham-affidavit, and this scenario there was nothing on the record that supported the validity of the affidavit over the deposition.

Find the full opinion at: http://www2.ca3.uscourts.gov/opinarch/163613p.pdf

Panel: Circuit Judges Hardiman, Roth, and Fisher

Argument Date: May 23, 2017

Date of Issued Opinion: July 3, 2017

Docket Number: Nos. 16-3613 and 16-3629

Decided: Affirmed in part, reversed in part

Case Alert Author: Kevin P. McGilloway

Counsel
Richard J. Perr, Counsel for Cross-Appellant

Brett M. Freeman, Carlo Sabatini, Counsel for Appellant

Author of Opinion: Judge Fisher

Circuit: Third Circuit

Case Alert Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/06/2017 02:15 PM     3rd Circuit     Comments (0)  

July 5, 2017
  Joseph De Ritis v. Thomas McGarrigle - Third Circuit
Headline: Third Circuit Finds Employee Speech Unprotected by the First Amendment; Qualified Immunity is Granted to Supervisor.

Area of Law: Qualified immunity; First Amendment rights

Issue(s) Presented: Are comments made by attorney to colleagues in and out of the courtroom protected under the First Amendment? If so, does a supervisor who terminated the employee from his position receive qualified immunity?

Brief Summary:

Joseph De Ritis was an Assistant Public Defender, working in the office of Public Defender, Douglas C. Roger. After Roger transferred De Ritis to a different unit, De Ritis started to spread a rumor that he was being punished for taking too many cases to trial. On multiple occasions, he expressed these thoughts with colleagues and judges, both in and out of the courtroom. When Roger caught wind of this rumor, he fired De Ritis for his conduct.

The Third Circuit reversed the District Court's denial of Roger's motion for summary judgment, holding that De Ritis's comments in court were employee speech not protected by the First Amendment; and Roger was entitled to qualified immunity for any violation of the First Amendment based on De Ritis's comments to two municipal officials out of court.

Extended Summary:

Joseph DeRitis sued his former boss, Public Defender Douglas C. Roger, claiming that Roger terminated him in violation of his right to free speech. De Ritis had worked as an Assistant Public Defender under Roger for seven years, moving up to a trial unit. In June 2012, De Ritis was informed that he would need to be transferred back to the juvenile court unit due to staffing issues. De Ritis asked colleagues about the real reason for his transfer, and got the impression that he was transferred because he was bringing too many cases to trial and that this was against the office ideal of moving cases by getting guilty pleas. There was no real evidence to support these accusations, just hearsay.

De Ritis repeated this rumor to his colleagues, judges, and other attorneys over many months. Eventually De Ritis approached Michael Maddren, Country Solicitor and Thomas McGarrigle, chairman of the County Council. DeRitis wanted them to investigate his claims, but neither pursued the matter much further. By May 2013, Roger became aware, through Judge Klein, of the allegations that were being made against him. When confronted by Roger, De Ritis acknowledged all of the individuals to whom he spread these rumors. In response, Roger fired De Ritis. The District Court denied Roger's motion for summary judgment in which he claimed qualified immunity as a public official.

The Third Circuit reversed. It held that De Ritis's comments to colleagues and judges in court were employee speech and not protected by the First Amendment under the applicable three prong test. First, DeRitis's actions were not protected because the speech was within the regular scope of his duties as an employee. Thus he was not protected as he would have been if "he spoke as a citizen, not an employee, if his speech involved a matter of public concern, and if Roger lacked an adequate justification for treating him differently than the general public."

Under the second-prong, the Court analyzed whether De Ritis's out of court speech related to a matter that was valuable and generally relevant to the public. The Court noted that speech that focused on the individual employee's problems, even if there was a potential for public concern, would be viewed as a "personal grievance." De Ritis's out of court statements to other attorneys were not a matter of public concern because these statements were only directly related to De Ritis's own grievance. However, the Court found that the statements made to Maddren and McGarrigle were addressed towards public concern requiring analysis under the third prong. De Ritis expressed some concern for potential violation of the constitutional rights of his clients.

In analyzing the third-prong, the Court balanced De Ritis's interests with the interest of Roger as a state official and found that De Ritis's comments tended to be geared more towards his own individual concern than any public concern. He sought action for himself but failed to follow-up on protecting any rights of his clients. The Court determined that statements made by De Ritis could have seriously hindered the work environment and thus his interests were outweighed by Roger's strong interest in protecting the work environment and promoting positive work performance. At minimum, Roger was entitled to qualified immunity as any right De Ritis had under the First Amendment was not clearly established.

The Third Circuit reversed the District Court's denial of qualified immunity and remanded for further proceedings.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/161433p.pdf

Panel: Vanaskie, Krause, and Nygaard, Circuit Judges.

Argument Date: January 17, 2017

Date of Issued Opinion: June 29, 2017

Docket Number: No. 16-1433

Decided: Reversed and remanded

Case Alert Author: Kristina Flatley

Counsel: Joseph De Ritis, Counsel for Appellee; Mark A. Raith, Counsel for Appellant

Author of Opinion: Circuit Judge Krause

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/05/2017 12:19 PM     3rd Circuit     Comments (0)  

June 23, 2017
  Gerlich v. Leath - Eighth Circuit
Headline Eighth Circuit holds that district court properly granted permanent injunction against Iowa State University in suit concerning student group trademark licensing requests

Area of Law First Amendment

Issue(s) Presented Whether the district court properly found that Iowa State University's trademark licensing decisions violated students' right to free speech and school officials were not entitled to qualified immunity.

Brief Summary Iowa State University (ISU) is home to over 800 officially recognized student groups, one of which is a student chapter of National Organization for the Reform of Marijuana Laws (NORML ISU). Student groups regularly create merchandise, and ISU grants the groups permission to use its trademarks on such merchandise if certain conditions are met. In 2012, NORML ISU submitted a t-shirt design to ISU's Trademark Licensing Office, which contained an ISU trademark and a small cannabis leaf as part of the design. The Trademark Office approved the t-shirt design. Shortly after, a newspaper article concerning state referenda legalizing marijuana was published. The article discussed NORML ISU's political efforts to legalize marijuana in Iowa, and included a quote about ISU being supportive of the group, referencing approval of the t-shirt design.

The article generated concern within ISU administration, resulted in a formal legislative inquiry, and also received attention from the Iowa Governor's Office of Drug Control Policy. As a result, the Trademark Guidelines were changed to prohibit "designs that suggest promotion of the below listed items . . . dangerous, illegal or unhealthy products, actions or behaviors; . . . [or] drugs and drug paraphernalia that are illegal or unhealthy." When NORML ISU requested permission to use the previously approved t-shirt design for a second order, their request was put on hold, and was then denied following the change in Trademark Guidelines. Subsequent requests by NORML ISU to use ISU trademarks in merchandise designs also incorporating a cannabis leaf were also denied. NORML ISU was also singled out as the only student group to have a prior review procedure imposed upon it before its requests could go to the Trademark Office. As a result, two student leaders of NORML ISU sued various ISU officials stating claims for violation of their First and Fourteenth Amendment rights.

The district court determined that the defendant ISU officials were not entitled to qualified immunity and held that the defendants' trademark decisions violated the plaintiffs' right to free speech. The district court also entered a permanent injunction prohibiting defendants from enforcing trademark licensing policies against the plaintiffs in a viewpoint discriminatory manner.

On appeal, a panel of the Eighth Circuit affirmed. The panel first held that the plaintiffs had standing to sue because the student leaders of NORML ISU suffered an injury in fact by having their designs rejected and therefore being unable to spread NORML ISU's message. The panel next concluded that the defendants were not entitled to qualified immunity because ISU had created a limited public forum when it made its trademarks available for student organizations to use if they abided by certain conditions. Once a state university has created a limited public forum for speech, it may not discriminate against speech on the basis of its viewpoint, yet here the defendants' rejection of the NORML ISU designs discriminated against the group on the basis of the group's viewpoint as evidenced by the unique scrutiny and prior approval requirements placed on the group. The panel rejected the defendants' argument that they did not violate plaintiff's First Amendment rights because their trademark licensing decisions should be considering government speech. The government speech doctrine does not apply if a government entity has created a limited public forum, as ISU did here when it made its trademarks available for student organizations to use under certain conditions. The Court concluded that because defendants had violated the plaintiff's clearly established First Amendment rights, the district court did not err by denying qualified immunity to the defendants and granting plaintiffs summary judgment on their First Amendment claims. Finally, the court held that the injunctive relief ordered by the district court was not too broad and was not an abuse of the district court's discretion.

Circuit Judge Loken dissented from the court's decision to deny the defendants qualified immunity from the plaintiffs' claims for compensatory damages and attorneys' fees.

The full text of the opinion may be found at http://media.ca8.uscourts.gov/opndir/17/06/161518P.pdf

Panel Circuit Judges Kelly, Loken, and Murphy

Date of Issued Opinion June 13, 2017

Decided Affirmed

Docket Number
16-1518

Counsel Tyler Murphy for Appellants and Robert Corn-Revere for Appellees

Author Circuit Judge Murphy

Case Alert Circuit Supervisor Joelle Larson, University of Minnesota Law School

    Posted By: Joelle Larson @ 06/23/2017 10:24 AM     8th Circuit     Comments (0)  

June 22, 2017
  Sixth Circuit: defendant can withdraw guilty plea for any reason if court defers plea acceptance
Headline: Sixth Circuit holds that defendant can withdraw guilty plea for any reason if court defers plea acceptance.

Case: United States v. Andrews

Area of law: Criminal procedure, criminal law

Issue presented: Has a district court accepted a defendant's guilty plea for purposes of Federal Rule of Criminal Procedure 11(d) when it defers acceptance of the plea until after it reviews the presentence report?

Brief summary: Andrews entered a plea agreement, which included a recommended sentence, for various drug-related offenses. At the change-of-plea hearing, the district court held that it would wait to accept the plea and impose the recommended sentence until after it received the presentence report. Before this happened, Andrews moved to withdraw his guilty plea under FRCP 11(d)(1), which allows a defendant to do so for any reason before the district court accepts the plea. The district court denied his withdrawal motion, stating that it had already accepted Andrews's guilty plea at the hearing. On appeal, Andrews argued that the district court had not officially accepted his plea at the hearing. On two issues of first impression, the Sixth Circuit first held that de novo is the proper standard to review whether a district court accepted a defendant's guilty plea. The Sixth Circuit then held that a district court's explicit decision to defer acceptance of a defendant's guilty plea means that the plea has not been accepted for purposes of FRCP 11(d). But the Court declined to establish specific steps that a district court must take in order to accept a defendant's guilty plea.

Extended summary: After being charged with various drug-related crimes, Andrews ultimately agreed to plead guilty in exchange for a reduced sentence. The district court held a change-of-plea hearing, during which it followed the proper procedure under Federal Rule of Criminal Procedure 11(b) for determining that Andrews's plea was knowing, voluntary, and intelligent. At the end of the hearing, the district court stated that it would typically "go ahead and accept the plea and make a finding of guilty" at that point; however, since Andrews's plea agreement included a recommended sentence, the district court wanted to review the presentence report first. Once the district court had the results of the report, it would schedule a second hearing. Before the district court held this second hearing, Andrews filed a motion to withdraw his plea. He argued that he was permitted to do so under Rule 11(d)(1), which allows a defendant to withdraw his guilty plea for any reason if he does so before the court accepts his plea. The district court denied Andrews's motion, finding that it had accepted his guilty plea at the hearing. And after a court accepts a defendant's guilty plea, he can only withdraw it if he proves a fair and just reason for doing so under Rule 11(d)(2)(B). The district court held that Andrews failed to demonstrate a fair and just reason why his plea should be withdrawn, and it ultimately imposed the terms of the plea agreement.

Andrews appealed, claiming that the district court never actually accepted his guilty plea during the hearing and that he therefore should have been able to withdraw his plea for any reason under Rule 11(d)(1).

The Sixth Circuit first addressed which standard of review it should use to decide whether the district court had accepted Andrews's guilty plea. Since the issue was one of first impression in the Sixth Circuit, the Court surveyed the opinions of other circuit courts and found that at least three (the Eighth, Fifth, and D.C. Circuits) use the de novo standard of review for this issue. Additionally, the Court reasoned that this issue presents no factual disputes, and the only question is whether the district court's words and actions during the hearing fit the definition of acceptance as used in Rule 11(d). Therefore, the Sixth Circuit held that the issue whether a guilty plea was accepted by a district court is a question of law subject to de novo review.

The Sixth Circuit then analyzed under what circumstances a district court has accepted a defendant's guilty plea, which was also an issue of first impression in this circuit. Rule 11(b) provides an enumerated list of topics that a district court must discuss with the defendant before it may accept his guilty plea. However, there are no rules that specifically state what a court must do to officially accept the plea. The Sixth Circuit found that there was a consensus among other circuits that a district court's adherence to Rule 11(b) creates a presumption that the court accepted the defendant's guilty plea. But this presumption is rebutted when the district court explicitly decides to defer its acceptance of the plea. Following the other circuits' reasoning, the Sixth Circuit ultimately held that a district court's explicit deferral of acceptance means that a defendant's guilty plea has not been accepted under Rule 11(d). However, the Court declined to establish any specific steps that a district court must take to officially accept a guilty plea.

In Andrews's case, the district court had properly covered all the information required by Rule 11(b), creating a presumption of acceptance. But the district court's statements that it would have to hold a second hearing after it had received the presentence report meant that an additional step must occur before the district court would accept Andrews's guilty plea and impose the recommended sentence. The Sixth Circuit found that this constituted an explicit deferral of acceptance, meaning that the district court had not accepted Andrews's plea for Rule 11(d) purposes at the hearing. And since the district court had not accepted Andrews's guilty plea at the hearing, he had the right to withdraw his plea for any reason when he filed his withdrawal motion. The Sixth Circuit therefore remanded the case back to the district court and declined to rule on the other collateral issues Andrews had raised.

Panel: Circuit Judges Martha Craig Daughtrey, Karen Nelson Moore, and Julia Smith Gibbons.

Date of issued opinion: May 23, 2017.

Docket number: 16-3130

Decided: Reversed and remanded.

Counsel: Gregory Charles Sassé, Cleveland, Ohio, for Appellant. Kimberly Robinson, UNITED STATES ATTORNEY'S OFFICE, Columbus, Ohio, for Appellee. ON BRIEF: Gregory Charles Sassé, Cleveland, Ohio, for Appellant. Kimberly Robinson, UNITED STATES ATTORNEY'S OFFICE, Columbus, Ohio, for Appellee.

Author of opinion: Circuit Judge Julia Smith Gibbons.

Case alert author: Andrea Muroto Bilabaye, Western Michigan University Cooley Law School.

Case alert circuit supervisor: Professor Mark Cooney.

Link to the case: http://www.opn.ca6.uscourts.go...ns.pdf/17a0109p-06.pdf

Edited: 06/27/2017 at 11:23 AM by Mark Cooney

    Posted By: Mark Cooney @ 06/22/2017 03:07 PM     6th Circuit     Comments (0)  

May 2, 2017
  Luis Antonio Dutton-Myrie v. the Attorney General of the United States of America - Third Circuit
Headline: Third Circuit Requires Review of Willful Blindness in CAT Analysis Regarding Acquiescence to Torture

Area of Law: Convention Against Torture, Acquiescence

Issues Presented: What standard should the Board of Immigration Appeals use in assessing acquiescence to torture under the Convention Against Torture?

Brief Summary:

Dutton-Myrie appealed a decision from the Board of Immigration Appeals ("BIA") which dismissed his claim that the Panamanian government was willfully blind to torturous acts against him. The Third Circuit found that the BIA did not thoroughly review the circumstantial evidence or the potential for willful blindness de novo in its ruling. The Third Circuit remanded with instructions to consider circumstantial evidence that may establish willful blindness.

Extended Summary:

Luis Antonio Dutton-Myrie petitioned for review of a ruling by the Board of Immigration Appeals ("BIA") dismissing his appeal of the decision by an Immigration Judge ("IJ") that he is ineligible for deferral of removal under the United Nations Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (CAT). Dutton-Myrie contends that the BIA erred in affirming the IJ's conclusion that the government of Panama would not be willfully blind to torturous acts against him and incorrectly stated what constitutes acquiescence to torture by Panamanian officials. In addition, Dutton-Myrie contends that the IJ is biased against him and violated his due process rights. The Third Circuit found that the Board did not apply the correct legal standard under the Convention Against Torture ("CAT") and remanded.

Dutton-Myrie is a citizen of Panama who came to the US on a visitor's visa in 1991 and overstayed that visa. In 2005, the Government apprehended and deported him to Panama. A few days after his return to Panama, a group of men stabbed him in the neck so he fled the country and re-entered the US. In 2007, the Government apprehended him again and charged him with illegal re-entry. In 2012, the US Department of Homeland Security reinstated the final order of removal but an asylum officer found he expressed a reasonable fear of returning to Panama and referred him to an IJ. Dutton-Myrie filed an application for deferral of removal under the CAT based on his claim that members of the Mara Salvatrucha ("MS-13") gang would likely torture him if he returned. Dutton-Myrie's close relatives started a gang in Panama and many of his male family members have been targeted and killed by MS-13.

The IJ found Dutton-Myrie to be credible but determined that he failed to establish that Panamanian officials would consent or acquiescence to the harm he feared and denied his CAT claim. Dutton-Myrie went before the same IJ four times, and appealed four times. The BIA vacated and remanded the first three times but affirmed the fourth decision. The Third Circuit first turned to the Convention Against Torture and noted the burden of proof is on the petitioner to produce evidence that it is more likely than not that he or she would be tortured. To establish acquiescence, an applicant must demonstrate that a public official was aware of the torture and breached the legal responsibility to intervene and prevent it, which can also be shown if the government willfully blinded itself to such activities.

The Third Circuit reviewed Dutton-Myrie's claim that the BIA erred in reviewing for clear error the IJ's conclusion that the Panamanian government would not acquiesce to torture. The IJ must conduct a two-part analysis. First, the IJ makes a factual finding as to how the public officials will act in response to the harm the petitioner fears. Next, the IJ assesses whether the likely response from public officials qualifies as acquiescence. The BIA should review the first part for clear error, but must review the second part de novo. The BIA found no clear error in the IJ's finding that the government of Panama would not be acquiescent to any torture but it should have also determined de novo whether the evidentiary findings were sufficient to establish acquiescence. The BIA should have considered willful blindness before concluding the government conduct would not qualify as acquiescence.

The BIA must consider circumstantial evidence of willful blindness. The BIA needs to consider relevant evidence to determine if harm Dutton-Myrie fears will be met with a "blind eye" by authorities. The regulations do not require actual knowledge of specific torturous acts. The Third Circuit remanded with instructions to consider circumstantial evidence that may establish willful blindness. The Third Circuit did not comment on the due process claim but noted the case "may be ripe for reassignment [to a different IJ]if further fact-finding is necessary."

Find the full opinion at:

http://www2.ca3.uscourts.gov/opinarch/161599p.pdf

Panel: Ambro, Chagares, and Fuentes, Circuit Judges

Argument Date: November 16, 2016

Date of Issued Opinion: April 28, 2017

Docket Number: No. 16-1599

Decided: Remanded

Case Alert Author: Jessica Wood

Counsel:

Nathanael P. Kibler (argued), Counsel for Petitioner

Benjamin C. Mizer, Bernard A. Joseph, Jason Wisecup, Erica B. Miles, Counsel for Respondent

Author of Opinion: Ambro, Circuit Judge

Circuit: Third Circuit

Case Alert Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 05/02/2017 04:06 PM     3rd Circuit     Comments (0)  

April 28, 2017
  Hargett v. St. Bernard's Hospital, Inc. - Eighth Circuit
Headline Eighth Circuit holds that district court improperly remanded class action lawsuit to state court based on class members' Arkansas residency rather than citizenship

Area of Law Class Action; Federal Jurisdiction

Issue(s) Presented Whether the district court properly remanded a class action lawsuit that had been removed to federal court based on the local controversy exception to the Class Action Fairness Act.

Brief Summary Plaintiff Tammy Hargett filed a class action lawsuit in Arkansas state court on behalf of a class comprising "all persons who were Arkansas Medicaid-eligible beneficiaries" who were treated at one of the defendant hospitals and had liens placed on their third-party claims by RevClaims, LLC. The defendant hospitals removed the suit to federal court under the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d), which broadened federal jurisdiction over class actions. Hargett moved to remand, arguing that the district court should decline to exercise jurisdiction under CAFA's local-controversy exception, which applies when more than two-thirds of the class members are "citizens of the State in which the original action was filed." Id. at § 1332(d)(4)(A)(i)(I) (emphasis added). The district court granted the motion to remand, finding that the proposed class was defined as "all persons who were Arkansas residents at the time the medical services . . . were provided to them."

RevClaim and the hospitals appealed. The Eighth Circuit focused its analysis on how the "resident" versus "citizen" distinction made in other parts of CAFA applied specifically to the local-controversy exception. The Court noted that elsewhere in the statute, the term "citizen" has long meant something different from "resident." "Citizen" requires permanence, whereas residency is a more fluid concept. One person can be a resident of multiple states, but can only be a citizen of one. Where Congress uses a term, such as "citizen," that has a well-established meaning, it must be assumed that Congress meant to incorporate the established meaning. Thus, by using the term "citizen" in the local-controversy exception, Congress meant to require something more than simply residency in a state. The Seventh Circuit has also explicitly recognized the distinction between residency and citizenship for purposes of the local-controversy exception. Ultimately, the Eighth Circuit agreed with the Seventh Circuit, and concluded that "citizen" is not synonymous with "resident" in determining whether the local-controversy applies. As such, the district court erred in holding that merely alleging a proposed class of Arkansas residents was sufficient to satisfy § 1334(d)(4), and should not have remanded the case to state court.

The full text of the opinion may be found at http://media.ca8.uscourts.gov/opndir/17/04/171339P.pdf

Panel Circuit Judges Bowman, Shepherd, and Smith

Date of Issued Opinion April 14, 2017

Decided Reversed and remanded

Docket Number 17-1339

Counsel Kenneth P. Castleberry, Robert L. Henry III, James D. Robertson, A.F. Thompson, III, Paul Waddell, and Sam Waddell for Appellants and Brandon W. Lacy for Appellee

Author Circuit Judge Smith

Case Alert Circuit Supervisor Joelle Larson, University of Minnesota Law School

    Posted By: Joelle Larson @ 04/28/2017 02:57 PM     8th Circuit     Comments (0)  

  Melin v. Sveen - Eighth Circuit
Headline Eighth Circuit holds that Minnesota's revocation-upon-divorce statute is unconstitutional when applied retroactively to life insurance policies

Area of Law Insurance

Issue(s) Presented Whether the district court properly awarded life insurance proceeds to the decedent's children by retroactively applying Minnesota's revocation-upon-divorce statute to the decedent's policy naming his former spouse as the primary beneficiary.

Brief Summary In 1997, the decedent, Mark Sveen, married the appellant, Kaye Melin, and named her the primary beneficiary of his life insurance policy the following year. His two adult children, the appellees, were designated as contingent beneficiaries. Sveen and Melin divorced in 2007, and Sveen never changed the beneficiary designation on the policy. Sveen passed away in 2011, with Melin still listed as the primary beneficiary.

Upon Sveen's death, the insurance company filed an interpleader action to determine whether a 2002 amendment to Minnesota's probate code applied the revocation-upon-divorce statute to life insurance designations made prior to the statute's amendment. Melin and Sveen's two adult children cross-claimed for the proceeds. The district court granted summary judgment for Sveen's children.

On appeal, a panel of the Eighth Circuit reversed. The Court first held that Melin had standing to assert a constitutional challenge to the revocation-upon-divorce statute. The Court then relied on a prior Eighth Circuit panel decision holding that Oklahoma's revocation-upon-divorce statute violated the Contract Clause of the Constitution when applied retroactively to reach the same conclusion with respect to the Minnesota statute. The Court held that retroactive application of revocation-upon-divorce statutes is unconstitutional because policyholders have the right to rely on the law governing insurance contracts at the time the contract was made, and applying the statute would directly alter the rights and obligations of the contracting parties.

The full text of the opinion may be found at http://media.ca8.uscourts.gov/opndir/17/04/161172P.pdf

Panel Circuit Judges Benton and Shepherd, and District Judge Ebinger, sitting by designation

Date of Issued Opinion April 3, 2017

Decided Reversed and remanded

Docket Number 16-1172

Counsel Scott A. Wilson for Appellant and Daniel P. Doda for Appellees

Author Circuit Judge Benton

Case Alert Circuit Supervisor Joelle Larson, University of Minnesota Law School

    Posted By: Joelle Larson @ 04/28/2017 01:57 PM     8th Circuit     Comments (0)  

April 24, 2017
  National Labor Relations Board v. Pier Sixty, LLC - Second Circuit
Headline: Second Circuit Grants Enforces National Labor Relations Board Order Protecting Employee From Firing, Finding Employee's Facebook Post Prior to Election to Unionize Was Not So "Opprobrious" as to Warrant Losing National Labor Relations Act Protection

Area of Law: Labor Law

Issues Presented: Whether an employee's comments on social media, that lead to his firing, were so "opprobrious" as to lose protection under the National Labor Relations Act.

Brief Summary: In October 2011, two days before a tense election to unionize Respondent and Cross-Petitioner Pier Sixty, a New York catering company, one of its service employees, Petitioner and Cross-Respondent Hernan Perez, posted a message on his Facebook page using profanity about his Pier Sixty supervisor, and his supervisor's family, and encouraging employees to vote yes for the union. Perez took down the post three days later but it had already come to the attention of Pier Sixty management which, following an investigation, fired Perez in early November. Mr. Perez filed a charge with the National Labor Relations Board (NLRB) claiming he had been terminated in retaliation for "protected concerted activities" under the National Labor Relations Act (NLRA).

Following a decision by the Administrative Law Judge, the NLRB found that Mr. Perez's activity was protected under NLRA sections 8(a)(1) and (a)(3) and his termination was in retaliation for "protected concerted activities." The Second Circuit affirmed, holding that viewing the "totality of the circumstances," including Pier Sixty's "hostility towards employees' union activities" prior to and around the time of the post, and Pier Sixty's historical general tolerance of profanity by its employers, Perez's post "not so egregious as to lose" NLRA protection. The Second Circuit also held that Pier Sixty could not challenge the enforcement of the NLRB's decision on the basis that the Acting General Counsel of the NLRB was in violation of the Federal Vacancies Report Act because the employer never presented this issue to the NLRB, as required by Section 10(e) of the NLRA.

To read the full decision, please visit:
http://www.ca2.uscourts.gov/de...66497/1/hilite/


Extended Summary: Respondent and Cross-Petitioner Pier Sixty, LLC ("Pier Sixty") is a catering company in New York. Following a contentious lead up to the election between management and its employees, Pier Sixty's service employees voted to unionize in October 2011. Two days before the election, while on an authorized break at work, Pier Sixty employee, Petitioner and Cross-Respondent Hernan Perez, posted on his personal Facebook account using profanity in talking about his supervisor and supervisor's family. His post also stated "vote YES for the union!!!!!!!" Perez took down the post three days later but it had already come to the attention of Pier Sixty management which, following an investigation, fired Perez in early November.

Perez filed a charge with the National Labor Relations Board ("NLRB") alleging that he had been terminated in retaliation for "protected concerted activities" in violation of the National Labor Relations Act ("NLRA"). That charge was subsequently consolidated with a second charge alleging unfair labor practices under the NLRA. The Administrative Law Judge ("ALJ") who heard the matter found that Pier Sixty violated the NLRA by discharging Perez in retaliation for a protected activity under Act sections 8(a)(1) and (a)(3). Pier Sixty filed exceptions, a three-member panel of the NLRB affirmed the ALJ decision, and Pier Sixty appealed.

As an initial matter, the Second Circuit rejected Pier Sixty's contention that the Acting General Counsel of the NLRB, Lafe Solomon, was in violation of the Federal Vacancies Report Act ("FVRA") of 1998, 5 U.S.C. § 3345, and therefore his signing of the complaint in this case rendered the NLRB decision unenforceable. Pursuant to Section 10(e) of the NLRA, all objections must be considered by the NLRB before appeal, unless the failure to do so is excused by extraordinary circumstances. In this instance, Pier Sixty had failed to raise this argument before the NLRB and Second Circuit held that no extraordinary circumstances existed to excuse that failure, stating that a potential meritorious claim does not alone create an extraordinary circumstance.

The Second Circuit next examined whether Perez's activity was protected under the NLRA. Section 7 of this NLRA guarantees employees the right "to engage in concerned activities for the purpose of collective bargaining or other mutual aid or protection." These rights are protected by Sections 8(a)(1) and (a)(3) of the NLRA, which prohibit an employer from discharging employees for participating in protected, union-related activity under Section 7. However, the NLRA will not protect against an employee engaged in an ostensibly protected activity if that employees acts in an abusive manner.

Noting that substantial deference must be given to the NLRB decision, the Second Circuit examined, without endorsing, the nine-factor totality of the circumstances applied by the NLRB test to determine whether Mr. Perez's Facebook post was protected under the NLRA. The Second Circuit thus examined: (1) any evidence of anti-union hostility; (2) whether the conduct was provoked; (3) whether the conduct was impulsive or deliberate; (4) the location of the conduct; (5) the subject matter of the conduct; (6) the nature of the content; (7) whether the employer considered similar content to be offensive; (8) whether the employer maintained a specific rule prohibiting the content at issue; and (9) whether the discipline imposed was typical for similar violations or proportionate to the offense.

The Second Circuit affirmed, holding that the NLRB's decision that Perez's activity was protected under the NLRA was supported by the evidence. In so holding the court noted that Perez's Facebook post included work place concerns, that Pier Sixty had demonstrated hostility towards its employees' union activities immediately prior to Perez's Facebook post, and Perez's Facebook post explicitly protested mistreatment by management and asked employees to vote yes for the union. On this basis, the Second Circuit found, the NLRB reasonably determined that Perez's outburst was not "an idiosyncratic reaction to a manger's request but part of a tense debate over managerial mistreatment in the period before the representation election." The Second Circuit also noted that Pier Sixty consistently tolerated profanity among its workers with few disciplinary sanctions given for the use of profanity, that Perez's comments were made on an online forum, a key medium and tool for worker organization, and that Perez's outburst was not in the immediate presence of customers and did not disrupt any catering event. Accordingly, the Second Circuit held that the NLRB did not err in ruling that Perez's Facebook post was not so egregious as to exceed the NLRA's protection and was reasonably distinguished from other cases of "opprobrious conduct."

To read the full decision, please visit:
http://www.ca2.uscourts.gov/de...66497/1/hilite/


Panel: Circuit Judges Kearse, Cabranes, and Chin

Argument Date: 4/5/2016

Date of Issued Opinion: 4/21/2017

Docket Numbers:
15-1841-ag(L), 15-1962-ag(XAP)

Decided: Granted the Board's application for enforcement; Denied Pier Sixty's cross-petition for review

Case Alert Author:
Leigh G. Wellington

Counsel: Thomas V. Walsh, Jackson Lewis P.C., for Respondent - Cross-Petitioner; Benjamin M. Shultz and Scott R. McIntosh for Benjamin C. Mizer, Principal Deputy Assistant Attorney General, U.S. Department of Justice, Civil Division, Amy H. Ginn, Attorney (Jennifer Abruzzo, Deputy General Counsel; John H. Ferguson, Associate General Counsel; Usha Dheena, Supervisor Attorney) for Richard F. Griffin, Jr., General Counsel, National Labor Relations Board, for Petitioner - Cross-Respondent

Author of Opinion:
Circuit Judge Cabranes

Circuit:
Second Circuit

Case Alert Circuit Supervisor:
Professor Elyse Diamond

    Posted By: Elyse Diamond @ 04/24/2017 08:52 AM     2nd Circuit     Comments (0)  

April 20, 2017
  Mahmood v. Sessions -- Fourth Circuit
Immigration Status Clarified: Lawful Permanent Residents Don't Retain Asylum Status

Areas of Law: Immigration Law, Statutory Interpretation, Administrative Law

Issue Presented: Whether the Board of Immigration Appeals erred in finding that an alien who voluntarily adjusts his status from asylee to lawful permanent resident no longer retains his asylee status.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit affirmed the Board of Immigration Appeals' ("BIA") decision to uphold an immigration judge's order to remove lawful permanent resident Riaz Mahmood from the United States after he deliberately misrepresented material facts to obtain travel documents. The court held that the BIA's interpretation of 8 U.S.C. §1159(b) - that aliens who adjust to lawful permanent resident status under the statue do not retain their asylum status - was the best interpretation of the statute. The Fourth Circuit also determined that the BIA's decision was entitled to deference under Chevron USA Inc. v. Natural Resources Defense Council, Inc. Accordingly, the court denied Mahmood's petition for review.

Extended Summary:
Riaz Mahmood, a native and citizen of Pakistan, was granted asylum in the United States in 1997. In 2006, he applied for a refugee travel document to visit his wife and children in Bangkok, Thailand. In his application, he indicated that since being granted asylum, he had not returned to Pakistan nor "applied for and/or obtained a national passport, passport renewal, or entry permit" from Pakistan. This was not true; Mahmood left the U.S. in 2003 using a Pakistani passport and reentered the U.S. in 2005 using a U.S. visa. The U.S. Department of Homeland Security ("DHS") was unaware of this fact and granted Mahmood's refugee travel document application in 2006. He left the U.S. in 2007 again using a Pakistani passport (with a different number than the one he used in 2003) and returned in 2007 using his U.S.-issued refugee travel document. In late 2007, Mahmood applied for a second refugee travel document to visit his wife and children and again denied having returned to Pakistan or obtained or renewed a Pakistani passport. While this second application was pending, Mahmood used a Pakistani passport to leave the country and used the second refugee travel document, which had by then been granted, to reenter the U.S. In 2009, Mahmood left the U.S. for a fourth time using a Pakistani passport with a third number. He claimed that he traveled to Dubai, where he met his wife and children. After meeting them, he claimed they flew to Russia, Cuba, and then Mexico. Once in Mexico, he said he intended to cross the border with his family "because their lives were in danger in Pakistan" and he intended to have them apply for asylum. Mahmood and his family were apprehended after crossing into the U.S. and, in August 2009, DHS charged Mahmood with removability on the ground that he entered the U.S. without inspection.

While that removability charge was pending, Mahmood filed a Form I-485 application to adjust his status from asylee to lawful permanent resident pursuant to 8 U.S.C. §1159(b). In his application, Mahmood certified under penalty of perjury that he "never by fraud or willful misrepresentation of a material fact, ever sought to procure, or procured, a visa, or other documents, entry into the United States, or any immigration benefit." He also certified that he never knowingly aided an alien in trying to enter the U.S. illegally. While his form I-485 application was pending, DHS dropped the illegal entry charge against Mahmood and granted his application for adjustment to the status of lawful permanent resident in 2012. In 2013, DHS commenced a removal proceeding against Mahmood alleging that he tried to procure an immigration benefit through fraud and willful misrepresentation, which made him inadmissible at the time of his application for adjustment and removable. An immigration judge held a removal hearing and found that DHS proved by clear and convincing evidence that Mahmood fraudulently obtained his lawful permanent resident status and two refugee travel documents. Additionally, the judge found that Mahmood was ineligible for a waiver of inadmissibility under 8 U.S.C. §1159(c) and ordered that Mahmood be removed to Pakistan.

Mahmood appealed the immigration judge's decision to the BIA arguing that: (1) the immigration judge erred in denying his application for waiver of inadmissibility; and (2) since he retained his asylum status after his adjustment to lawful permanent resident status, the judge erred in ordering his removal without first conducting an asylum termination proceeding under 8 U.S.C. §1158(c). Relying on its decision in Matter of C-J-H, 26 I. & N. Dec. 284, wherein it concluded that "aliens whose status was adjusted from asylee to lawful permanent resident no longer qualif[ied] as asylees," the BIA found it was proper for the immigration judge to order Mahmood's removal without first conducting an asylum proceeding. As a result, the BIA rejected Mahmood's arguments and dismissed his appeal. Mahmood subsequently filed a petition of review to the Fourth Circuit.

The Fourth Circuit found that Mahmood no longer retained the status of an "alien granted asylum" after he adjusted his status to lawful permanent resident. Therefore, he was subject to removal for procuring any immigration benefit by fraud or willful misrepresentation of a material fact. First, the court looked to the language of §1159(b), which states that "'the Secretary of Homeland Security or the Attorney General . . . may,' upon application of the alien and satisfaction of specified statutory conditions, 'adjust to the status of an alien lawfully admitted for permanent residence the status of any alien granted asylum.'" The court found the language of the statute contemplated two statuses: (1) as an "alien granted asylum;" and (2) an alien "lawfully admitted for permanent residence." Moreover, the statute provides for the adjustment from one status to the other, which, to the court, indicated a change to the other status and not an "accretion" of a second status. As a result, the court found that Mahmood no longer held the status of an asylee and was thus subject to removal for procuring an immigration benefit by fraud.

Mahmood also argued that since he was an asylee at the time he adjusted his status, the court needed to focus on §1158(c)(2)'s restriction on the removal of asylees. Under this provision, the Attorney General can only terminate asylum status for five listed reasons, none of which includes adjustment of status under §1159(b). Additionally, he argued, even if he could be removed, his adjustment of status could not substitute for a formal termination of his asylum status under §1158(c). The Fourth Circuit found Mahmood's argument unpersuasive because it equated voluntarily surrendering his asylum status by adjusting it under §1159(b) with the involuntary loss of asylum status through the Attorney General's termination of it under §1158(c). The court found that the two were not the same because §1158 protects an asylee from having his status terminated against his will, while §1159 allows an asylee to voluntarily give up his asylum status in favor of lawful permanent resident status. The court found that the most reasonable reading of §1159 led to the conclusion that once an asylee adjusts his status to lawful permanent resident, the alien is then fully considered a lawful permanent resident and not an asylee.

The court did find Mahmood's interpretation at least plausible, which suggested some ambiguity in the statute. Nevertheless, even under the assumption that the statute was ambiguous, the court found the BIA's interpretation of the Immigration and Naturalization Act ("INA") was entitled to Chevron deference. When the issue is whether the BIA correctly interpreted the INA statute, Chevron deference applies since the BIA is responsible for administering the statute. If the statute is ambiguous, the court must defer to the BIA's permissible construction of the ambiguity through its published decisions. The court noted that the BIA's interpretation controls unless it reaches a conclusion that is "arbitrary, capricious, or manifestly contrary to the statute." Here, since the BIA relied on its precedential decision in Matter of C-J-H, the Fourth Circuit found that the BIA reached a reasonable conclusion and its reading of §1159 was not arbitrary or contrary to the statute. Therefore, the Fourth Circuit affirmed the BIA's holding that Mahmood was no longer an asylee and thus was no longer afforded the protections of an asylee.

To read the full opinion, click here.

Panel: Judges Niemeyer, Traxler, and Diaz

Argument Date: 01/24/2017

Date of Issued Opinion: 02/22/2017

Docket Number: 16-1438

Decided: Petition denied by published opinion.

Case Alert Author: Lauren Harrison, Univ. of Maryland Carey School of Law

Counsel: Bradley Bruce Banias, BARNWELL, WHALEY, PATTERSON, AND HELMS, LLC, Charleston, South Carolina, for Petitioner. Tiffany L. Walters, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent. ON BRIEF: Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Civil Division, Anthony C. Payne, Assistant Director, Office of Immigration Litigation, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent.

Author of Opinion: Circuit Judge Niemeyer

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 04/20/2017 09:19 AM     4th Circuit     Comments (0)  

April 18, 2017
  Zarda v. Altitude Express
Case Name: Zarda, et al. v. Altitude Express

Headline: Second Circuit Declines to Reverse Past Precedent That Title VII Does Not Cover Sexual Orientation Discrimination, Stating That Such Reversal Can Only be Done by En Banc Court

Area of Law: Employment Discrimination

Issue(s) Presented: Whether a three-judge panel of the Second Circuit can overturn the circuit's previous holding that Title VII does not cover employment discrimination based on sexual orientation.

Brief Summary: Donald Zarda filed suit against his former employer, Altitude Express, alleging that he had been terminated due to his sexual orientation, in violation of the New York State Human Rights Law and Title VII. Defendant successfully moved for summary judgment on the Title VII claim, on the basis that the Second Circuit's 2000 decision in Simonton v. Runyon had held that Title VII's prohibition of sex discrimination did not encompass sexual orientation discrimination. Plaintiff appealed, arguing that the Second Circuit should overturn Simonton and find that discrimination on the basis of sexual orientation constitutes impermissible sex discrimination under Title VII. Noting the recent decision in Christiansen v. Omnicom Group, Inc., which confronted a similar issue, the Second Circuit held that only the circuit sitting en banc may overturn Simonton. The Court further noted that the Court of Appeals for the Seventh Circuit - the only circuit so far to have overturned similar precedent and find that Title VII does prohibit discrimination on the basis of sexual orientation - did so sitting en banc when it decided Hively v. Ivty Tech Comm. Coll. earlier this month.

Extended Summary (if applicable):

Altitude Express, defendant, employed Donald Zarda,* plaintiff, as a skydiving instructor. In 2010, Mr. Zarda served as a skydiving instructor for the female partner of a heterosexual couple. Mr. Zarda dove in-tandem with the female partner, and informed her that he was gay to mitigate the awkwardness that might arise from a woman being so tightly strapped to a man. When she and her boyfriend compared notes, and she disclosed that Mr. Zarda had informed her that he was gay, the male partner called and complained about Mr. Zarda's behavior. Altitude Express fired him soon thereafter.

Mr. Zarda filed a wrongful termination suit under the New York State Human Rights Law, N.Y. Exec. Law. § 296(1)(a) ("NYSHRL"), and under Title VII. Altitude Express moved for summary judgment on the Title VII claim on the basis that the Second Circuit had held, in a 2000 case called Simonton v. Runton, that Title VII does not bar discrimination on the basis of sexual orientation. The District Court granted the defendant's motion but let the NYSHRL claim proceed to trial. While the case was pending in 2015, the Equal Employment Opportunity Commission (EEOC) issued a decision stating that discrimination on the basis of sexual orientation amounts to sex discrimination in violation of Title VII. Mr. Zarda moved the court to reconsider its summary judgment dismissal of his Title VII claim, in light of the EEOC's position, but the district court declined due to the Second Circuit's precedent in Simonton. Thus, only Mr. Zarda's state law discrimination claim - which requires a stronger showing of causation than Title VII requires - went to trial, and a jury ruled against him. He appealed to the Second Circuit, on the basis, inter alia, that it should overturn Simonton and find that Title VII prohibits discrimination on the basis of sexual orientation.

The defendant argued that the Court need not revisit this issue because a jury had found against the plaintiff on the state law claim. The Second Circuit rejected this argument, explaining that the District Court had instructed the jury to use "but-for" causation for the state law claim, which is a more difficult standard than the "substantial" or "motivating" factor test utilized by Title VII. Hence, had there been an actionable claim available to the plaintiff under Title VII, it could have been more easily won. However, the court held that as a three-judge panel, it could not reverse Simonton, reaffirming its recent holding in Christiansen v. Omnicom Group, Inc. that only the Court sitting en banc could overturn the prior precedent established in Simonton. Further, the Second Circuit, citing Hively v. Ivty Tech Comm. Coll., No. 15-1720, 2017 WL 1230393, at *1 - 2 (7th Cir. Apr. 4, 2017) (en banc), noted that the Seventh Circuit Court of Appeals only overturned its prior analogous precedent regarding Title VII's coverage of sexual orientation discrimination by sitting en banc. Accordingly, the Second Circuit affirmed the district court's dismissal of Mr. Zarda's Title VII claim.

*As the Court notes in fn. 1, Mr. Zarda died in a skydiving accident prior to going to trial, and the case proceeded with the two executors of his estate replacing him as plaintiff.

To read the full decision, please visit: http://www.ca2.uscourts.gov/de...bdcbd/1/hilite/


Panel: Circuit Judges Dennis G. Jacobs, Robert D. Sack, Gerard E. Lynch.

Argument Date: January 5, 2017

Argument Location: New York, NY

Date of Issued Opinion: April 18, 2017

Docket Number:
No. 15-3775

Decided: Affirmed

Case Alert Author: Vito J. Marzano

Counsel: Gregory Antollino and Stephen Bergstein for Appellants; Saul D. Zabell for Appellees.

Author of Opinion: Per Curiam

Circuit: Second Circuit Court of Appeals.

Case Alert Circuit Supervisor:
Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 04/18/2017 08:32 PM     2nd Circuit     Comments (0)  

April 13, 2017
  Loftus v. Bobzien -- Fourth Circuit
Lawyer-Legislator? Nope. Fourth Circuit Upholds Firing of Assistant County Attorney Elected to Fairfax City Council

Areas of Law: First Amendment, Employment Law

Issue Presented: Whether the Fairfax County Attorney's Office's termination of an assistant county attorney following her election to the Fairfax City Council violated the First Amendment.

Brief Summary
: The United States Court of Appeals for the Fourth Circuit held that the termination of the plaintiff's employment did not violate the First Amendment for two reasons. First, as the Supreme Court has made clear, public employers may bar their employees from running for elective office. Accordingly, it follows that a public employee can be barred from holding elective office while a public employee. Second, if the resign-to-run and automatic resignation provisions of the Texas Constitution - which stripped certain public employees of their office upon declaring their candidacy for the state's legislature - survived First Amendment scrutiny in Clements v. Fashing, 457 U.S. 957, 971-73 (1982), the termination of the plaintiff's employment only after her election to the City Council should too. In addition, the Fourth Circuit held that the plaintiff's state law claim failed because the cited statutes do not create a private cause of action. Therefore, the Fourth Circuit affirmed the district court's dismissal of the First Amendment and state law claims.

Extended Summary: From 1997 until her termination in 2014, Nancy Loftus was employed by the Fairfax County Attorney's Office in Virginia as an assistant county attorney. In February 2014, Loftus told David Bobzien, the County Attorney for Fairfax County, that she was considering a run for the Fairfax City Council in the next election. Bobzien expressed his concern that Loftus' election might conflict with her responsibilities as an assistant county attorney because of ongoing business, contractual, and governmental relationships between Fairfax County (the "County") and Fairfax City (the "City").

Bobzien expressed his concerns again after Loftus became an official candidate for the City Council. Bobzien emphasized that if elected, Loftus' conflict of interest would prevent all of the County's attorneys from representing the County not only in court proceedings adverse to the City but also in civil matters. Bobzien cautioned Loftus that if she was elected to the City Council she would not be able to continue her employment with the County Attorney's Office. Nevertheless, Loftus proceeded with her candidacy, was elected to the City Council in May 2014, and was sworn in on June 24, 2014. Thereafter, Bobzien terminated Loftus's employment with Fairfax County.

After exhausting her administrative remedies, Loftus filed a lawsuit against Bobzien and the County Executive in the district court. Loftus alleged that her termination was solely because she had been elected to the City Council and was retaliatory, in violation of her First Amendment right to hold elected office. In addition, Loftus alleged that her termination violated Virginia Code § 15.2-1512.2 and Fairfax County Ordinance § 3-1-19, both of which secure a public employee's right to participate in certain "political activities." Loftus sought declaratory and injunctive relief, as well as $6,000,000 in damages.

The district court dismissed Loftus's complaint for failure to state a claim. As to her First Amendment claim, the district court ruled that Loftus's termination, which was due to a perceived conflict of interest, did not violate her First Amendment rights. As to her state law claim, the district court concluded that neither Virginia Code § 15.2-1512.2 nor Fairfax County Ordinance § 3-1-19 created a private cause of action.

As to the First Amendment claim, the Fourth Circuit first noted that, although it had never recognized a First Amendment right to hold elected office, it need not decide whether such a right existed to resolve the case. Citing the Supreme Court's decision in United Pub. Workers of Am. v. Mitchell, 330 U.S. 75, 99 (1947), the Fourth Circuit found that public employers may permissibly bar their employees from participating in a wide array of political activities, including running for elective office. "If a public employee can be prohibited from running for office," the court observed, "it follows all the more strongly that she also can be barred from holding elective office while remaining a public employee."

To further support its conclusion, the Fourth Circuit cited the Supreme Court's decision in Clements v. Fashing, 457 U.S. 957, 971-73 (1982). In Clements, the Court upheld two provisions of the Texas Constitution, one of which barred elected judicial officers from seeking election to the state's legislature during his or her term (the "resign-to-run provision"). By operation of the second provision, any elected judicial officer who declared his or her candidacy for the legislature was automatically deemed to resign from the office then held (the "automatic resignation provision"). The Fourth Circuit found that if the resign-to-run and automatic resignation provisions in Clements - which applied upon the declaration of a candidacy - survived First Amendment scrutiny, the termination of Loftus' employment only after her election to the City Council should, too. Therefore, the Fourth Circuit held that Loftus' termination of employment did not violate the First Amendment.

As to the state law claim, the Fourth Circuit found that under their plain terms, neither Virginia Code § 15.2-1512.2 nor Fairfax County Ordinance § 3-1-19 create a private cause of action. Thus, the court lacked the authority to create a right under a state statute where the state's legislature had elected not to include that right. Accordingly, the Fourth Circuit affirmed the district court's dismissal of both the First Amendment claim and the state claim.

To read the full opinion, click here.

Panel: Judges Agee, Diaz, and Thacker

Argument Date: 10/25/2016

Date of Issued Opinion: 02/08/2017

Docket Number: No. 15-2164

Decided: Affirmed by published opinion

Case Alert Author: Maria Nazarova, Univ. of Maryland Carey School of Law

Counsel: ARGUED: John Chapman Petersen, SUROVELL ISAACS PETERSEN & LEVY PLC, Fairfax, Virginia, for Appellant. Sona Rewari, HUNTON & WILLIAMS LLP, McLean, Virginia, for Appellees. ON BRIEF: Jason Frank Zellman, SUROVELL ISAACS PETERSEN & LEVY PLC, Fairfax, Virginia, for Appellant.

Author of Opinion: Circuit Judge Agee

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 04/13/2017 04:28 PM     4th Circuit     Comments (0)  

April 12, 2017
  Revock v. Cowpet Bay West Condominium Association - Third Circuit
Headline: Third Circuit Holds that Fair Housing Act Claims Survive the Death of a Party, and Reverses District Court's Grant of Summary of Judgment

Area of Law: Fair Housing Act, Statutory Interpretation

Issue(s) Presented: (1) Whether a Fair Housing Act claim survives the death of a party; (2) Whether the district court properly dismissed Walters' Fair Housing Act claims entirely due to her death; (3) Whether the district court properly denied Kromenhoek's Fair Housing Act claims on the merits.

Brief Summary: Appellants Barbara Walters and Judith Kromenhoek filed civil rights actions under the Fair Housing Act. Walters and Kromenhoek sought accommodations for their disabilities in the form of emotional support animals, which were not permitted under the rules of their condominium association. They alleged violations of their right to a reasonable accommodation of their disabilities and interference with the exercise of their fair housing rights. Among other issues, these cases raised the question of whether a Fair Housing Act claim survives the death of a party. The Third Circuit held that the district court improperly answered this question by applying a limited gap-filler statute and, in turn, territorial law. It then concluded that the survival of claims under the Fair Housing Act is not governed by the gap-filler statute, but rather by federal common law, under which a Fair Housing Act claim survives the death of a party. Accordingly, it reversed the district court's grant of summary judgment against Walters' executrix. On the merits of the summary judgment motions, the Third Circuit reversed in part and vacated in part, and remanded to the district court with instructions to consider whether to permit substitution for two deceased appellees.

Extended Summary: Appellants Barbara Walters and Judith Kromenhoek suffered from disabilities, for which each was prescribed an emotional support animal. Each woman obtained a dog. This violated the "no dogs" rule of their condominium association, Cowpet Bay West. Cowpet's rule had no exceptions and Cowpet had no policy regarding assistive animals like emotional support animals. Walters and Kromenhoek each attempted to request an accommodation for an emotional support animal by filing paperwork with Cowpet's office manager. The paperwork included a doctor's letter prescribing an emotional support animal, and a dog certification. Each certification stated that the dog was "prescribed and deemed necessary to assist . . . the confirmed disabled handler" and that "property managers and landlords are required to make reasonable accommodation" under the Fair Housing Act. Certain residents at Cowpet became upset that Walters kept a dog in violation of the rule, and these views were expressed on one of the residents' online blog posts. Both Walters and Kromenhoek maintained their right to keep a dog in spite of the rule. Despite both women having submitted accommodation requests and medical verifications to Cowpet, the association and its representatives denied having reviewed the paperwork, and subsequently imposed a fine upon both Walters and Kromenhoek for violating the rule. Several months later, Cowpet's board changed presidents, and Walters and Kromenhoek again submitted accommodation requests, which were granted.

Despite being granted an accommodation, both women subsequently filed civil rights lawsuits under the Fair Housing Act, raising two federal claims: (1) that Cowpet denied their reasonable requests for accommodation in violation of the Act; and (2) that Cowpet and certain Cowpet residents interfered with the exercise of their fair housing rights in violation of the Act. While the case was pending in the district court, Walters committed suicide. The court granted the substitution of Liana Walters Revock as Walters' personal representative. Defendants moved for summary judgment. The district court dismissed Walters' Fair Housing Act claims entirely due to her death, and denied Kromenhoek's Fair Housing Act claims on the merits. Both appealed to the Third Circuit.

The Third Circuit first addressed the question of whether a Fair Housing Act claim survives the death of a party, which was an issue of first impression. The court began by explaining that the Fair Housing Act is construed broadly in light of its purpose of providing fair housing and eradicating discriminatory practices, including discrimination on the basis of disability. Because the Act is silent as to survival, the district court applied a "gap-filler statute," which in turn led it to apply territorial law. The district court applied a Virgin Islands statute under which it held that Walters' Fair Housing Act claims did not survive her death. The Third Circuit reversed the judgment of the district court on this issue, holding that the gap-filler statute does not apply to the issue of whether a Fair Housing Act claim survives the death of the party because the plain text of the statute did not apply to the Fair Housing Act. So, absent statutory guidance, the Third Circuit applied federal common law. The weight of authority as to the common law rule of survival indicates that remedial claims survive, but penal claims do not. The court explained that a Fair Housing Act claim is remedial because the Act was intended by Congress to have "broad remedial intent." Thus, under the common law rule, Fair Housing Act claims survive the death of a party, which means that Walters' claim survived her death.

Next, the court examined the merits of the first Fair Housing Act claim, considering whether Cowpet refused to provide a reasonable accommodation for Walters' and Kromenhoek's disabilities in violation of the Act. Because the court found that there were genuine issues of material fact as to this claim, it reversed the district court's grant of summary judgment for Cowpet. Specifically, Cowpet disputed the statutory requirement that there be a "refusal" to provide the reasonable accommodation. Whether there has been a refusal to provide a reasonable accommodation under the Fair Housing Act depends on the circumstances, and a refusal may be "actual or constructive." An undue delay in granting a reasonable accommodation may amount to a refusal. Moreover, a refusal occurs when the disabled resident is first denied a reasonable accommodation, irrespective of the remedies granted in subsequent proceedings. The Third Circuit noted, however, that the same action might sometimes amount to a "refusal" and, at other times, mere enforcement of a housing rule. In this case, whether Cowpet's actions constituted a refusal depends upon whether Cowpet was given an opportunity to accommodate. On this issue, the parties disputed material issues of fact that precluded summary judgment.

Then, the court considered the issue of whether the Defendants interfered with Walters' and Kromenhoek's exercise of their fair housing rights in violation of the Fair Housing Act. The district court granted summary judgment for the Defendants, and the Third Circuit reversed in part and vacated in part. The Act makes it "unlawful to coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of, or on account of his having exercised or enjoyed . . . any right granted or protected by" the provisions of the Act. Because the term "interference" is not defined in the Act, the court looked at its ordinary meaning, and found that interference under the Act may consist of harassment, provided that it is sufficiently severe or pervasive as to create a hostile environment. There were genuine issues of material fact that existed as to this claim, requiring the Third Circuit to reverse the district court's grants of summary judgment. The court also vacated the district court's grant of summary judgment for the former president of Cowpet's board, who had since passed away, and directed the district court on remand to determine whether to substitute a party for him.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/144776p.pdf

Panel: Fuentes, Vanaskie, and Restrepo, Circuit Judges

Argument Date: May 19, 2016

Date of Issued Opinion: March 31, 2017

Docket Number: Nos. 14-4776 & 14-4777

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

Case Alert Author: Samuel M. Ventresca

Counsel: Karin A. Bentz, Gregory A. Thorp, Counsel for Appellants; W. Todd Boyd, James K. Parker, Jr., Yvette R. Lavelle, Joseph G. Riopelle, Carl R. Williams, John H. Benham, III, Boyd L. Sprehn, Kyle R. Waldner, Ryan C. Meade, Counsel for Appellees; Vanita Gupta, Mark L. Gross, April J. Anderson, Counsel for Amicus Appellant United States of America.

Author of Opinion: Circuit Judge Restrepo

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 04/12/2017 02:50 PM     3rd Circuit     Comments (0)  

  Mirabella v. Villard - Third Circuit
Headline: No Free Speech Protection from Montgomery Township Officials' Retaliatory Email After Plaintiff Had Threatened Litigation Against Township

Area of Law: First Amendment

Issue(s) Presented: Is the right to be free from a retaliatory restriction on communication with one's government protected under the First Amendment when the plaintiff has threatened or engaged in litigation against the government? 

Brief Summary: A Montgomery Township couple received a tersely worded email in response to their informing the Township that they would be suing their neighbors and the Township for alleged environmental destruction of local public wetlands. The Third Circuit found that the local official's direction to "[p]lease never contact me" violated the couple's First Amendment rights to freedom from retaliation against exercise of free speech and to petition the government. The Township was spared by the doctrine of qualified immunity, which shields government officials from liability unless they violate clearly established rights. The Third Circuit did not find any cases clearly establishing the right to be free from a retaliatory restriction on communication with one's government when the plaintiff has threatened litigation against the government.

Extended Summary: The Mirabellas, both attorneys, complained to Montgomery Township that their neighbors allegedly extended their backyards into public Montgomery Township-owned wetlands that abut their properties by attempting to fence in the open space, placing playground equipment there, and landscaping it. Though the Township required the neighbors to remove the fence and playground equipment and stop landscaping, it ultimately allowed the neighbors to mow the open space. Viewing the Township's response as environmentally destructive, the Mirabellas emailed the Township Board of Supervisors that they intended to sue their neighbors for encroachment and destruction of the open space. In their email, the Mirabellas also claimed that the Township would be an indispensable party in the litigation, which the Board of Supervisors members Joseph Walsh and Jeffrey McDonnell took as a threat to sue the Township. The Township responded via email that it would be seeking sanctions, and Mr. Mirabella defended the lawsuit as non-frivolous. Later that night at 11:26pm, Walsh sent the following from his iPhone and copied numerous Township officials:

Dear Mr[.] Mirabella and his wife attorney. Please direct all further communications to the Township attorney. Please never contact me, the Board of Supervisors or the Township employees directly. Do not call me at work, email me at work or speak to me in public or private. The dye is caste [sic].

In response, the Mirabellas filed a lawsuit against the Township alleging violations of their First Amendment rights, specifically that the Township retaliated against them for exercising free speech rights and that the Township violated their right to petition the government. The defendants filed motions to dismiss in which they argued qualified immunity. The Third Circuit found that the Mirabellas pled both First Amendment claims based on Walsh's email but they could proceed no further. Under qualified immunity, the right to be free from a retaliatory restriction on communication with one's government, when the plaintiff has threatened or engaged in litigation against the government, was not clearly established.

On the retaliation claim, the Third Circuit found Walsh's email more than just an instruction to contact the Township attorney regarding the litigation because it barred the Mirabellas from communicating directly with their local government for any reason. The Third Circuit then examined whether freedom from a retaliatory restriction on communication with one's government, when the plaintiff has threatened or engaged in litigation against the government, is a clearly established right that would overcome the qualified immunity defense. Finding no support in other cases for such a right, the Third Circuit held the Township was entitled to qualified immunity.

The Mirabellas also alleged a First Amendment violation of their right to petition the government for redress of grievances based on the Walsh email. The Third Circuit found that the Mirabellas showed a burden on their free speech interests in petitioning their government that was substantially greater than the Township's litigation interests. Again, the Third Circuit found that a restriction on communication with one's government, when the plaintiff has threatened or engaged in litigation against the government, was not a clearly established right. A reasonable person in Walsh's position would not have known the email violated the Mirabellas' First Amendment rights. Accordingly, the Township was entitled to qualified immunity.


The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/153171p.pdf

Panel: Fuentes, Shwartz, and Restrepo, Circuit Judges 

Argument Date: July 12, 2016

Date of Issued Opinion: April 4, 2016

Docket Number: No. 15-3171

Decided: Reversed, in part

Case Alert Author: Rebecca Daily

Counsel: John Mirabella, Esquire, Counsel for Appellees; Harry G. Mahoney and Peter R. Kulp, Counsel for Appellants. 

Author of Opinion: Circuit Judge Restrepo

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 04/12/2017 02:47 PM     3rd Circuit     Comments (0)  

April 10, 2017
  Winfred Muchira v. Halah al-Rawaf, et al. -- Fourth Circuit
Human Trafficking Claim Not Enough to Get Out of "Bad" Job

Areas of Law: Employment law

Issue Presented: Whether the plaintiff presented sufficient evidence to establish the defendants knowingly obtained her labor and services in violation of the Trafficking Victims Protection Act (TVPA).

Brief Summary: The Kenyan appellant Winfred Muchira, a contracted live-in housekeeper for a family of Saudi Arabian nationals residing in Virginia, brought suit in the United States District Court for the Eastern District of Virginia alleging that the appellees, members of that family, forced her to provide labor in violation of the TVPA. Following discovery, the district court granted summary judgment on those claims to the appellees. On appeal, the Fourth Circuit affirmed the district court's grant of summary judgment, finding that the appellant failed to present evidence sufficient to survive the motion.

Extended Summary: Winfred Muchira, a Kenyan national and the appellant, was a contracted live-in housekeeper for the appellees, all members of a Saudi Arabian family. She began working for the family in Saudi Arabia in December 2010. In July 2012 she moved with several family members to Vienna, Virginia, where some of the children would be attending school. As part of the move to the United States, the appellant agreed to a new employment contract with the family that outlined her responsibilities and those of the family. With the family's assistance, Muchira obtained a six-month visa to work for the family in the U.S. Once here, the appellant lived with the family first in her own apartment and then in her own bedroom in their Vienna house.

At the end of their initial visa period, the family extended their stay by another six months, with the understanding that they would then return to Saudi Arabia. The appellant signed a new employment contract reflecting the same, except that she would return to Kenya for a time before resuming her work with the family in Saudi Arabia. However, about two months before the appellant's scheduled departure to Kenya, she began a correspondence with the National Human Trafficking Resource Center via a hotline telephone number. She did not allege physical abuse or any other type of mistreatment, but complained about her salary and requested help in finding a way to stay in the United States with a different job. With the Hotline operator's assistance, she left the family's home in March 2013 without telling them and began cooperating with the government as they investigated the family for visa fraud.

After that criminal investigation concluded with no charges, the appellant brought a lawsuit against the appellees, alleging six claims of involuntary servitude and illegal trafficking under the TVPA, among other claims. Following discovery and a motion for summary judgment brought by the appellees, the district court granted summary judgment on all of the trafficking and involuntary servitude claims.

The appellant appealed her case to the Fourth Circuit, challenging the grant of summary judgment on her claim that she was a victim of forced labor in violation of the TVPA. Under the forced labor provision of that act, the appellant alleged that the appellees knowingly obtained her labor and services "by means of serious harm" in violation of 18 U.S.C. § 1589(a)(2) and "by means of the abuse of threatened abuse of law or legal process" in violation of 18 U.S.C. § 1589(a)(3). After reviewing the case de novo, the Fourth Circuit agreed with the district court that the appellant's evidence was insufficient to meet the statutory requirements and therefore affirmed the grant of summary judgment.

Serious harm, under the TVPA, is "any harm...that is sufficiently serious, under all the surrounding circumstances, to compel a reasonable person of the same background and in the same circumstances to perform or to continue performing labor or services in order to avoid incurring that harm." 18 U.S.C. § 1589(c)(2). The only harm that the appellant alleged was psychological harm due to the cultural "house rules" that the Saudi appellees allegedly forced her to follow. The Fourth Circuit found that this argument failed for two distinct reasons: (1) there was no evidence that the appellees either knowingly or intentionally caused that harm, a requirement under this statute; and (2) the appellant was not an especially vulnerable victim that this statute is intended to protect. As the Fourth Circuit found, the appellant is an adult who consented to the employment contract with full knowledge and past experience of housekeeping with this specific family. In further support of that point, the Fourth Circuit cited other evidence in the record, including her living conditions with the family and the unfettered access they gave her to a cell phone and the internet.

The second contention brought by the appellant, abuse of the legal process, required her to show that the appellees' threatened use of the law against her was intended "to exert pressure on another person to cause that person to take some action or refrain from taking some action." 18 U.S.C. § 1589(c)(1). The appellant alleged that the family forced her to lie to the United States Embassy in order to receive her visa and then withheld her passport from her throughout her time in the United States. The Fourth Circuit again found that these arguments failed, as there was no evidence in the record that the family intended either circumstance to force the appellant to continue working for them. Additionally, the Fourth Circuit also cited evidence of Muchira's consent and acquiescence to these circumstances that made it so she could not meet the statutory requirements necessary for her claims to have merit.

To read full opinion, click here.

Panel: Judges Wilkinson, Traxler, and Hendricks (sitting by designation from the United States District Court for the District of South Carolina)

Argument Date: 10/27/2016

Date of Issued Opinion: 03/03/2017

Docket Number: No. 15-2198

Decided: Affirmed by published opinion.

Case Alert Author: Patrick J.L. Dillon, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Gregory H. Lantier, WILMER CUTLER PICKERING HALE AND DORR LLP, Washington, D.C., for Appellant. Neil Harris Koslowe, POTOMAC LAW GROUP, PLLC, Washington, D.C., for Appellees. ON BRIEF: James L. Quarles III, Robert Arcamona, Thomas G. Sprankling, WILMER CUTLER PICKERING HALE 2 AND DORR LLP, Washington, D.C., for Appellant. Galia Messika, Luisa Caro, POTOMAC LAW GROUP, PLLC, Washington, D.C., for Appellees.

Author of Opinion: Judge Traxler

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 04/10/2017 01:21 PM     4th Circuit     Comments (0)  

  Hamilton v. Pallozzi -- Fourth Circuit
Fourth Circuit Issues New Rules Governing Second Amendment Challenges

Areas of Law: Second Amendment, Civil Procedure

Issues Presented: Whether the appellant's Second Amendment challenge to Maryland's permitting scheme for handgun possession is justiciable and whether the appellant qualifies as a "law-abiding, responsible citizen" such that Maryland's regulatory scheme is unconstitutional as applied to him.

Brief Summary: The appellant brought an as-applied Second Amendment challenge against the appellees related to Maryland's firearms regulatory scheme. The appellant desired to purchase firearms in the state, but his disqualifying convictions from Virginia meant he would not be successful in his permit application. The United States District Court for the District of Maryland dismissed his complaint for failure to state a claim. Upon appeal, the Fourth Circuit affirmed the district court's decision and held, for the first time in this circuit, that the case was justiciable despite the appellant never having formally applied for a firearm permit. The Fourth Circuit then found that the appellant was not a "law-abiding, responsible citizen" as required for his challenge to be successful under United States v. Chester, 628 F.3d 673 (4th Cir. 2010). In so holding, the Fourth Circuit issued a new rule, which found that, absent two narrow exceptions, "conviction of a felony necessarily removes one from the class of 'law-abiding, responsible citizens' for the purposes of the Second Amendment."

Extended Summary: The appellant James Hamilton pleaded guilty in Virginia in 2006 to three nonviolent felonies. In 2013, the Governor of Virginia restored some of the appellant's civil rights, but neither pardoned the appellant for his crimes nor restored his right to possess firearms. That right was restored, pursuant to state statute, in 2014 by the Circuit Court for Spotsylvania County. Mr. Hamilton, a resident of Maryland, then sought to purchase and possess firearms, specifically a handgun and a long gun, for self-defense within his own home. After seeking guidance, the appellant was told by an Assistant Attorney General of Maryland that he could not possess a firearm in Maryland unless he obtained a full pardon from the Governor of Virginia. That guidance was in line with Maryland law, which prohibits possession of a firearm by anyone who has been convicted of a disqualifying crime. Md. Code, Pub. Safety § 5-133(b)(1), 5-205(b)(1). Because the appellant's Virginia convictions had equivalent felony counterparts under Maryland law and therefore constituted disqualifying crimes for purposes of firearm possession, Mr. Hamilton never went forward with the application process for a firearm permit in Maryland.

Instead, in 2015, the appellant brought a lawsuit in the United States District Court for the District of Maryland against the appellees (William Pallozzi in his official capacity as the Superintendent of the Maryland State Police and Brian Frosh in his official capacity at the Attorney General of Maryland). Mr. Hamilton sought a declaration that Maryland's regulatory scheme was unconstitutional as applied to him under the Second Amendment and an injunction against the appellees enforcing that scheme upon him. The appellees moved to dismiss the complaint for failure to state a claim and the appellant in turn moved for summary judgment. In their response to the summary judgment motion, the appellees raised a question regarding the justiciability of the appellant's challenge. The district court ultimately granted the motion to dismiss, finding that the case was justiciable but that the appellant failed to state a claim. More specifically, the district court found that Mr. Hamilton could not "remove his challenge from the realm of ordinary challenges" and accordingly could not meet his burden in the test laid out in United States v. Chester, 628 F.3d 673 (4th Cir. 2010).

Upon appeal, the Fourth Circuit first examined the justiciability of the claim before examining its merit. Both parties and the Fourth Circuit agreed that the appellant's pre-enforcement challenge as to the criminalization of possession of a long gun met the necessary requirements and was therefore justiciable. However, the appellant also challenged the permitting scheme for a handgun in Maryland, a challenge that the appellees argued was not justiciable. More specifically, the appellees said that the issue was not ripe because of Mr. Hamilton's failure to actually apply for a permit and because he may be denied a permit for reasons other than a disqualifying conviction. The appellant argued that this challenge was justiciable because he need not have gone through the process knowing his application would be rejected, based on the guidance of a government official. For the first time, the Fourth Circuit held that "plaintiffs are not required to undertake futile exercises in order to establish ripeness, and may demonstrate futility by a substantial showing." Because the appellant made that substantial showing, the Fourth Circuit affirmed the district court's finding of justiciability.

Turning to the merits of the appellant's claim, the Fourth Circuit affirmed the judgment of the district court in dismissing Mr. Hamilton's claim under United States v. Chester, 628 F.3d 673 (4th Cir. 2010). Chester established a two-prong test by which the Fourth Circuit determines whether an as-applied challenge to a felon disarmament law could succeed in rebutting the presumption of lawfulness for these types of restrictions. The first prong requires the court to conduct a "historical review to evaluate whether those rights, as understood in 1791, are 'burdened or regulated' by the statute in question." United States v. Smoot, 690 F.3d 215, 221 (4th Cir. 2012). If the first prong is met, the second prong requires the challenged statute to pass through the appropriate level of judicial scrutiny. The appellant challenged this approach, arguing that there could be no justification for disarming someone who is a "law-abiding, responsible citizen" and that the second Chester prong would not need to be reached in that scenario. The Fourth Circuit disagreed with this approach, clarifying that precedent requires that the second prong must be considered if the first prong is met.

In asserting that he was a "law-abiding, responsible citizen" under the first Chester prong, the appellant argued that evidence of rehabilitation and the passage of time from the underlying conviction were relevant considerations. The Fourth Circuit disagreed and issued a new holding, that "conviction of a felony necessarily removes one from the class of 'law-abiding, responsible citizens' for the purposes of the Second Amendment" unless the felony conviction is pardoned or the law underlying the conviction is found to be either unconstitutional or unlawful. In a footnote, the Fourth Circuit noted it was leaving open the possibility that individuals convicted of misdemeanors may still potentially satisfy the first prong of the Chester test. Additionally, the Fourth Circuit held that "evidence of rehabilitation, likelihood of recidivism, and passage of time are not bases for which a challenger might remain in the protected class of 'law-abiding, responsible' citizen." In another footnote, the Fourth Circuit noted that it expressly did not exclude such evidence from being potentially relevant in other types of as-applied challenges to disarmament laws, specifically those involving the mentally ill.

Applying its new holdings to the facts of Mr. Hamilton's case, the Fourth Circuit found that the appellant was a state law felon who had neither received a pardon nor had the basis for his convictions declared unconstitutional or unlawful. Accordingly, the Fourth Circuit found that the appellant did not meet the first Chester prong and therefore could not state a claim for an as-applied Second Amendment challenge.

To read the full opinion, click here.

Panel: Judges Shedd, Duncan, and Floyd

Argument Date: 10/25/2016

Date of Issued Opinion: 2/17/2016

Docket Number: No. 16-1222

Decided: Affirmed by published opinion

Case Alert Author: Patrick J.L. Dillon, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Alan Gura, GURA & POSSESSKY, PLLC, Alexandria, Virginia, for Appellant. Mark Holdsworth Bowen, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Pikesville, Maryland, for Appellees. ON BRIEF: Cary Hansel, HANSEL LAW, P.C., Baltimore, Maryland, for Appellant. Brian E. Frosh, Attorney General of Maryland, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Appellees. Michael Connelly, Ramona, California, for Amicus United States Justice Foundation; Robert J. Olson, Herbert W. Titus, William J. Olson, John S. Miles, Jeremiah L. Morgan, WILLIAM J. OLSON, P.C., Vienna, Virginia, for Amici Conservative Legal Defense and Education Fund, Downsize DC Foundation, DownsizeDC.org, Gun Owners Foundation, Gun Owners of America, Inc., Institute on the Constitution, and The Heller Foundation

Author of Opinion: Judge Floyd

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 04/10/2017 01:03 PM     4th Circuit     Comments (0)  

  United States v. Agape Senior Community, Inc. -- Fourth Circuit
Attorney General Has Absolute Veto Power over Voluntary Settlements in FCA Qui Tam Actions

Areas of Law: Whistleblower Law, False Claims Act

Issue Presented: What is the extent of the Attorney General's power under 31 U.S.C. § 3730(b)(1) to veto the voluntary settlement of a False Claims Act qui tam action in which the Government declined to intervene?

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that the Attorney General possesses an absolute veto power under 31 U.S.C. § 3730(b)(1) over voluntary settlements in FCA qui tam actions for three reasons. First, the plain language of 31 U.S.C. § 3730(b)(1) is unambiguous. Second, § 3730(b)(1) is not temporally qualified or explicitly limited in any other manner. Third, the Attorney General's absolute veto power is entirely consistent with the statutory scheme of the FCA, which indicates that the United States is the real party in interest in any FCA suit. Accordingly, the Fourth Circuit affirmed the district court's "unreviewable veto" ruling.

As to the statistical sampling ruling, the Fourth Circuit found that the relators' appeal did not present a pure question of law that is subject to the court's interlocutory review under § 1292(b). Therefore, the court dismissed the appeal of this aspect of the ruling as improvidently granted.

Extended Summary: The False Claims Act (the "FCA") authorizes a private individual (i.e., a relator) to initiate and pursue an action in the name of the United States Government (a qui tam action) to seek civil remedies for fraud against the Government. 31 U.S.C. § 3730(b)(1). The relator's complaint must be served on the Government and kept under seal for at least sixty days. Id. at § 3730(b)(2). Before the expiration of the sixty-day period (or any extension), the Government must either (1) "proceed with the action" by assuming primary responsibility for the action's prosecution, or (2) "notify the court that it declines to take over the action" from the relator, who will then "have the right to conduct the action." Id. at § 3730(b)(4)(A)-(B). If the Government declines to intervene during the initial sixty-day (or extended) period, the court may nevertheless permit its intervention "at a later date upon a showing of good cause." Id. § 3730(c)(3). The qui tam "action may be dismissed only if the court and the Attorney General give written consent to the dismissal and their reasons for consenting." Id. § 3730(b)(1).

Defendant Agape Senior Community, Inc., and the other defendants (collectively, "Agape") are affiliated entities that operate elder care facilities throughout South Carolina. The relators, Brianna Michaels and Amy Whitesides, are former Agape employees. In December 2012, the relators served their complaint against Agape on the Government, alleging that Agape fraudulently billed Medicare and other federal health care programs for services to thousands of patients. The Government declined to intervene. Thereafter, the district court unsealed the complaint and the qui tam action proceeded.

In January 2015, the relators and Agape mediated without the Government's knowledge and reached a settlement. Relying on § 3730(b)(1), the Attorney General objected to the proposed settlement. Citing the Ninth Circuit's decision in United States ex rel. Killingsworth v. Northrop Corp., 25 F.3d 715 (9th Cir. 1994), the relators and Agape argued that because the Government had declined to intervene, the Attorney General's objection to the proposed settlement was subject to the district court's reasonableness review. The Government instead relied on the Fifth Circuit decision in Searcy v. Philips Electronics North America Corp., 117 F.3d 154 (5th Cir. 1997), and the Sixth Circuit's decision in United States v. Health Possibilities, P.S.C., 207 F.3d 335 (6th Cir. 2000). The Government argued that the Attorney General possesses an absolute veto power over voluntary settlements in FCA qui tam actions. In June 2015, the district court agreed with the Government's reasoning and sustained the Attorney General's objection (the "unreviewable veto" ruling).

In addition, the district court rejected the relators' request to use statistical sampling to establish liability and damages, finding that such use would be improper (the "statistical sampling" ruling). The district court certified both rulings for interlocutory appeal. Both parties filed petitions for permission to appeal, which were granted by the Fourth Circuit.

First, the Fourth Circuit acknowledged that the extent of the Attorney General's veto power under § 3730(b)(1) was a novel issue. The court thus began with a discussion of the three circuits' decisions debated in the district court: Killingsworth (Ninth Circuit), Searcy (Fifth Circuit), and Health Possibilities (Sixth Circuit).

In Killingsworth, the Ninth Circuit concluded that when the Government has not intervened, the Attorney General may object to a proposed settlement only with a showing of "good cause;" after which the Government can obtain a hearing on whether the settlement is "fair and reasonable." The Killingsworth court's interpretation was rejected by the Fifth Circuit in its Searcy decision and by the Sixth Circuit in its Health Possibilities decision. The Fourth Circuit agreed with the district court, and with the Fifth and Sixth Circuits, that the Attorney General possesses an absolute veto power over voluntary settlements in FCA qui tam actions.

First, the Fourth Circuit relied on the plain language of 31 U.S.C. § 3730(b)(1) and agreed with the Fifth Circuit that the language is unambiguous - that a qui tam action "may be dismissed only if the court and the Attorney General give written consent to the dismissal and their reasons for consenting." Second, the Fourth Circuit found that § 3730(b)(1) is not temporally qualified or explicitly limited in any other manner. Unlike other provisions of § 3730, § 3730(b)(1) does not overtly require the Government to satisfy any standard or make any showing reviewable by the court.

Third, the Fourth Circuit held that the Attorney General's absolute veto power is entirely consistent with the statutory scheme of the FCA. Even where the Government declines to intervene, the Fourth Circuit acknowledged that the United States is the real party in interest in any FCA suit. Agreeing with both the Fifth and Six Circuits, the Fourth Circuit observed that qui tam relators are motivated primarily by prospects of monetary reward rather than the public good. The Fourth Circuit found that this is the reason why Congress has granted the Attorney General the broad and unqualified right to veto proposed settlements of qui tam actions.

Therefore, the Fourth Circuit concluded that, under the plain language of § 3730(b)(1), the Attorney General possesses an absolute veto power over voluntary settlements in FCA qui tam actions. Accordingly, the Fourth Circuit affirmed the district court's "unreviewable veto" ruling.

As to the statistical sampling ruling, the Fourth Circuit found that the relators' appeal did not present a pure question of law that was subject to the court's interlocutory review under § 1292(b). Therefore, the court dismissed the appeal of the ruling as improvidently granted.

To read the full opinion, click here.

Panel: Judges King, Keenan, and Diaz

Argument Date: 10/26/2016

Date of Issued Opinion: 02/14/2017

Docket Number: No. 15-2145, No. 15-2147

Decided: Affirmed in part and dismissed in part by published opinion

Case Alert Author: Ziyi He, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Mario A. Pacella, STROM LAW FIRM, Columbia, South Carolina, for Appellants. William Walter Wilkins, NEXSEN PRUET, LLC, Greenville, South Carolina, for Appellees. Charles W. Scarborough, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee United States of America. ON BRIEF: T. Christopher Tuck, Catherine H. McElveen, Mt. Pleasant, South Carolina, Daniel Haltiwanger, Terry E. Richardson, Jr., RICHARDSON, PATRICK, WESTBROOK & BRICKMAN, LLC, Barnwell, South Carolina; Christy M. DeLuca, CHRISTY DELUCA, LLC, Mt. Pleasant, South Carolina; Jessica H. Lerer, STROM LAW FIRM, Columbia, South Carolina, for Appellants. Deborah B. Barbier, DEBORAH B. BARBIER ATTORNEY AT LAW, Columbia, South Carolina; Kirsten E. Small, Mark C. Moore, William C. Lewis, NEXSEN PRUET, LLC, Greenville, South Carolina, for Appellees Agape Senior Community, Inc., et al. Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Michael S. Raab, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; William N. Nettles, United States Attorney, Elizabeth C. Warren, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Columbia, South Carolina, for Appellee United States of America. James F. Segroves, Kelly A. Carroll, David J. Vernon, HOOPER, LUNDY & BOOKMAN, PC, Washington, D.C., for Amicus SavaSeniorCare Administrative Services, LLC. Melinda Reid Hatton, Maureen Mudron, AMERICAN HOSPITAL ASSOCIATION, Washington, D.C.; Lisa Gilden, THE CATHOLIC HEALTH ASSOCIATION OF THE UNITED STATES, Washington, D.C.; Jessica L. Ellsworth, Washington, D.C., Thomas P. Schmidt, HOGAN LOVELLS US LLP, New York, New York, for Amici American Hospital Association and Catholic Health Association of the United States. Colin E. Wrabley, M. Patrick Yingling, REED SMITH, LLP, Pittsburgh, Pennsylvania, for Amicus American Health Care Association.

Author of Opinion: Judge King

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 04/10/2017 10:34 AM     4th 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 28, 2017
  Christiansen v. Omnicom Group, Inc. - Second Circuit
Headline: Openly Gay Employee Has Valid Gender Stereotyping Claim under Title VII Arising from Workplace Discrimination; Concurring Opinion Suggests Second Circuit Reconsider Whether Sexual Orientation Claims Can Serve as a Basis for Claims Under Title VII

Areas of Law: Labor and Employment, Gender Rights

Issue(s) Presented: Whether workplace harassment alleged by opening gay employee sufficiently stated a valid gender stereotyping claim under Title VII

Brief Summary: Matthew Christiansen, an HIV-positive, openly gay man, was an employee of an advertising agency. During his employment, he was subjected to a humiliating pattern of harassment by his supervisor in the form of sexually suggestive images and inappropriate remarks that referred to his effeminacy, sexual orientation, and HIV status. Christiansen sued the agency and its parent corporation for discrimination under the American Disabilities Act, Title VII of the Civil Rights Act, and state and local law. The United States District Court for the Southern District of New York granted the defendant's motion to dismiss Christiansen's claims, holding that his claims alleged sexual orientation discrimination, which the Second Circuit has ruled is not cognizable sex discrimination under Title VII. The U.S. Court of Appeals for the Second Circuit disagreed and reversed, finding that Christiansen's claims adequately alleged discrimination on the basis of gender stereotyping, which is a valid claim under Title VII. In a concurring opinion, Second Circuit Chief Judge Katzmann argued strenuously that the Second Circuit should revisit its precedential decisions that sexual orientation claims are not cognizable sex discrimination cases under Title VII.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...9b4e9902ab5/1/hilite/

Extended Summary: Title VII of the Civil Rights Act of 1964 makes it unlawful for an employer to discriminate against an individual based upon the individual's sex. A 1989 U.S. Supreme Court case established that this protection covers discrimination based upon gender stereotyping, finding that a woman who was told to act more femininely in order to receive a promotion was discriminated against on the basis of her sex. Subsequently, however, the Second Circuit and other circuit courts have declined to extend this language to include discrimination on the basis of sexual orientation.

Relying on, and indicating they were bound by, Second Circuit precedent, the United States District Court for the Southern District of New York dismissed Christiansen's claims on defendant's motion to dismiss for failure to state a legal claim, holding that they were rooted primarily in sexual orientation discrimination, rather than gender stereotyping, and, therefore, not covered by Title VII. However, the Second Circuit found that Christiansen had identified instances in which his supervisor discriminated against him on the basis of gender stereotyping, such as his description of Christiansen as "effeminate" to others in the office, and making reference to Christiansen's feminine qualities in sexually suggestive drawings. The Second Circuit panel explained that although it did not have authority to overrule circuit precedent stating that discrimination based upon sexual orientation is not covered by Title VII, these decisions do not lessen the protection that gay, lesbian, and bisexual individuals have against gender stereotyping, and that these individuals must be afforded the same level of protection as heterosexual individuals.

In a lengthy concurring opinion joined by District Judge Brodie (sitting by designation), Chief Judge Katzmann argued that "the legal landscape has substantially changed" since the Second Circuit's prior rulings and that this court should, in the context of an appropriate case, revisit the holding that sexual orientation claims are not cognizable under Title VII. He outlined three potential arguments, not previously considered by the Second Circuit, that might support a finding that Title VII prohibits discrimination on the basis of sexual orientation and contended that a "fresh look" was warranted given "societal understanding of same-sex relationships has evolved considerably," the EEOC position on the issue had changed, and more recent Supreme Court decisions have "afford(ed) greater legal protection to gay, lesbian, and bisexual individuals."

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...9b4e9902ab5/1/hilite/

Panel:
Circuit Judges Katzmann and Livingston; District Judge Brodie, sitting by designation

Argument Date:
1/20/2017

Date of Issued Opinion:
3/27/2017

Docket Number:
16-748

Decided: Reversed and remanded

Case Alert Author: Alexandra Dobles

Counsel: Susan Chana Lask, Law Offices of Susan Chana Lask, for Plaintiff-Appellant Matthew Christiansen; Howard J. Rubin, Davis & Gilbert LLP, for Defendant-Appellees Omnicom Group Inc., DDB Worldwide Communications Group Inc., Peter Hempel, and Chris Brown; Rick Ostrove, Leeds Brown Law, P.C., for Defendant-Appellee Joe Cianciotto

Author of Opinion: Per curiam

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 03/28/2017 08:47 AM     2nd Circuit     Comments (0)  

March 27, 2017
  Jacoby & Meyers v. The Presiding Justices
Headline: Second Circuit Rejects First Amendment Challenge to New York's Prohibition of Non-Lawyer Investment in Law Firms

Area of Law: Constitutional Law

Issue Presented: Whether New York State's prohibitions on non-lawyer investment in law firms violate lawyers' First Amendment rights to associate with clients and access the courts.

Brief Summary: Jacoby & Meyers brought a putative class action challenging New York's rules, regulations and statutes that collectively prohibit non-attorneys from investing in law firms. The complaint alleged that the additional capital from such investors would allow firms to improve the quality of their legal services and reduce their fees. The United States District Court for the Southern District of New York dismissed the complaint, and the plaintiffs appealed. The Second Circuit affirmed, explaining that "in the context of for-profit law firms who serve their clients' interests as a business," the First Amendment associational right "belongs to the client, not the attorney." Moreover, even assuming for the sake of argument that for-profit law firms "could be found to have some degree of First Amendment right to associate with clients or to petition the government through the courts on their clients' behalf," the complaint failed because the prohibitions were rationally related to a legitimate government interest.

Extended Summary: New York, like many other states, prohibits non-attorneys from investing in law firms. "The prohibition is generally seen as helping to ensure the independence and ethical conduct of lawyers." Jacoby & Meyers, LLP, a limited liability partnership (the "LLP"), and Jacoby & Meyers USA II, PLLC, a related professional limited liability company (the "PLLC"; together, "plaintiffs" or the "J&M Firms") brought a putative class action challenging the various New York state rules, regulations, and statutes that collectively prohibit such investments. They alleged that they had received offers from various sources (including "high net-worth individuals" and "institutional investors) to invest capital in exchange for owning an interest in the firm, and that this funding would enable them to represent their clients more effectively. They argued that "the state regime unlawfully interferes with their rights as layers to associate with clients and to access the courts - rights they see as grounded in the First Amendment."

The United States District Court for the Southern District dismissed the complaint, and the plaintiffs appealed. The Second Circuit affirmed the dismissal. First, the court explained that the First Amendment associational right likely did not apply to for-profit law firms. The court noted that the "Supreme Court has held that the First Amendment bears on some situations in which clients and attorneys seek each other out to pursue litigation," but all of those situations were distinguishable. In particular, there is one line of cases involving political advocacy organizations' ability to recruit and solicit clients, and another line of cases involving clients' ability to collectively seek legal counsel. "The Supreme Court has never held, however, that attorneys have their own First Amendment right as attorneys to associate with current or potential clients, or their own right to petition the government for the redress of their clients' grievances when the lawyers are acting as advocates for others, and not advocating for their own cause," the court explained. The court was skeptical that such First Amendment rights were possessed by for-profit law partnerships or PLLCs that were not engaged in their own political advocacy or expression.

Acknowledging, however, that "the law is evolving rapidly with respect to the protections afforded commercial speech by the First Amendment," the court went on to consider whether--assuming that the plaintiffs did possess some degree of First Amendment rights here--those rights were violated by the New York prohibition. It concluded that they were not. It rejected the plaintiffs' argument that strict scrutiny should apply here, explaining that because there was no substantial burden on a First Amendment right, only rational basis review applied. Because the regulations were rationally related to a legitimate governmental interest - namely, New York State's "well-estalbished interest in regulating attorney conduct and in maintaining ethical behavior and independence" - they "easily pass[ed] muster."
To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...8fb11aeca48/1/hilite/

Panel: Circuit Judges Lynch and Carney, District Judge Hellerstein

Argument Date:
8/19/16

Date of Issued Opinion: 3/24/17

Docket Number: 15-2608

Decided: Affirmed

Case Alert Author: Belino Voshtina

Case Alert Supervisor: Emily Gold Waldman

Counsel: Douglas Gregory Blankinship, Finkelstein, Blankinship, Frei‐Pearson & Garber, LLP, White Plains, New York for Appellants.

Andrew Rhys Davies, Assistant Solicitor General (Barbara D. Underwood, Solicitor General, Steven C. Wu, Deputy Solicitor General, on the brief), for Eric T. Schneiderman, Attorney General of the State of New York, New York, New York, for Appellees.

Author of Opinion: Judge Carney

Circuit: Second Circuit

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 03/27/2017 07:36 PM     2nd Circuit     Comments (0)  

  Evans v. Georgia Regional Hospital Charles Moss, et. al. - 11th Circuit
Headline: Eleventh Circuit holds Title VII affords relief for gender non-conformity discrimination, but not sexual orientation discrimination.

Area of law: Constitutional Law, Civil Rights

Issue: Whether a Title VII claim is available for both gender non-conformity and sexual orientation discrimination.

Extended Summary: Jameka Evans ("Evans") filed a pro se Title VII complaint seeking recovery based on sexual orientation and gender non-conformity discrimination, as well as retaliation, which allegedly occurred during her employment at Georgia Regional Hospital. The magistrate judge found that Evans' first claim, sexual orientation discrimination, was not proper under Title VII. With regard to the gender non-conformity discrimination claim, the magistrate judge concluded that it was just another way to allege what was contained in the first count. The district judge dismissed the complaint, adopting the magistrate judge's report and recommendation. The Eleventh Circuit affirmed the dismissal of the first count finding that it was not cognizable as a Title VII claim. However, the court found the second count for gender non-conformity discrimination was a permissible, valid and separate, distinct avenue for relief under Title VII. The court also found Evans' argument relating to the retaliation claim was deemed waived. Accordingly, the Eleventh Circuit affirmed in part, vacated in part, and remanded for further proceedings.

Judge William Pryor concurred with a separate opinion. Judge Rosenbaum concurred in part and dissented in part.

To view the full opinion: http://media.ca11.uscourts.gov...ub/files/201515234.pdf

Panel: William Pryor and Rosenbaum, Circuit Judges, and Honorable Jose E. Martinez, United States District Judge for the Southern District of Florida, sitting by designation.

Argument: December 15, 2016

Date of Issued Opinion: March 10, 2017

Docket Number: 15-15234

Decided: Affirmed in part, vacated in part and remanded.

Case Alert Authors: Luis Garcia, Shantell Monreal, and Uxsunn Ramirez

Counsel:
Gail S. Coleman for Amicus Curiae Equal Employment Opportunity Commission
Gregory R. Nevins for Appellant Jameka K. Evans

Author of Opinion: Jose E. Martinez, United States District Judge

    Posted By: Gary Kravitz @ 03/27/2017 05:43 PM     11th Circuit     Comments (0)  

  Carvalho-Grevious v. Delaware State University - Third Circuit
Headline: In Title VII Retaliation Claim, Plaintiff Need Only to Proffer Evidence Sufficient to Raise Inference that Engagement in Protected Activity was Likely Reason, Not But-For Reason

Areas of Law: Employment Discrimination

Brief Summary: In this Title VII retaliation suit, the Third Circuit addressed the question of whether a plaintiff asserting a Title VII relation claim must establish but-for causation as part of her prima facie case. The Third Circuit holds that, at the prima facie stage, a plaintiff need only to proffer evidence sufficient to raise the inference that her engagement in a protected activity was the likely reason for the adverse employment action, not the but-for reason.

Extended Summary: In this Title VII retaliation claim, Carvalho-Grevious appealed from an order of summary judgment granted in favor of her former employer, Delaware State University (DSU). The employee, a professor, alleged that by retaliating against her for complaining about discriminatory employment practices based on race and gender, DSU violated Title VII of the Civil Rights Act. On May 3, 2011, the employee was informed that she would be dismissed as chairperson after previously filing multiple complaints of discriminatory conduct by her employer. Furthermore, on June 21, 2011 DSU revoked her renewable contract and issued her a terminal contract. Finally, on June 22, 2012, when the terminal contract expired, DSU elected not to renew the contract. Accordingly, the employee filed suit in District Court. At this time, DSU filed a motion for summary judgment, which was granted by the District Court on the basis that when a plaintiff asserts a Title VII retaliation claim, she must prove that the employer's unlawful retaliation was the but-for cause of the adverse employment action. On appeal, the Third Circuit was tasked with answering the question of whether the standard on which the District Court based its grant of summary judgment was the proper standard.

More specifically, the question before the court was: what must a plaintiff provide as part of her prima facie case of retaliation to survive a motion for summary judgment in the wake of the Supreme Court's decision in Nassar, which held that Title VII retaliation claims must be proven according to traditional principles of but-for causation? In Nassar, the Supreme Court held that, in a retaliation claim, a plaintiff's ultimate burden is to prove that retaliatory animus was the but-for cause of the adverse employment action. However, as decided by the Third Circuit in this case, that burden differs at the prima face stage of the case. Consistent with overwhelming precedent, a plaintiff alleging retaliation has a lesser causal burden at the prima facie stage. Accordingly, the proper standard at the prima facie stage is that the plaintiff must produce evidence sufficient to raise the inference that her protected activity was the likely reason for the adverse employment action. Thus, Nassar does not alter the plaintiff's burden at the prima facie stage; proving but-for causation as part of her ultimate burden of persuasion comes later, and not at the motion-to-dismiss stage.

The full opinion is available at http://www2.ca3.uscourts.gov/opinarch/153521p.pdf

Panel: Ambro, Smith, Fisher, Circuit Judges (Judge Smith became Chief Judge on Oct. 1, 2016)

Argument Date: September 27, 2016

Date of Issued Opinion: March 21, 2017

Docket Number: 15-3521

Decided: March 21, 2017

Case Alert Author: David A. Rosenfeld

Counsel: Christine E. Burke, Ari R. Karpf, Counsel for Appellant; Gerard M. Clodomir, James D. Taylor Jr., Counsel for Appellees

Author of Opinion: Circuit Judge Fisher

Circuit: Third Circuit

Case Alert Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 03/27/2017 01:40 PM     3rd Circuit     Comments (0)  

  Kolbe, et al. v. Hogan, et al. -- Fourth Circuit
Assault Weapons and Large-Capacity Magazines Fall Outside Second Amendment Protections

Areas of Law: Constitutional Law; Fourteenth Amendment; Second Amendment

Issues Presented: Whether the Firearm Safety Act of 2013 violates the Second Amendment by imposing restrictions on assault weapons and large-capacity magazines. Whether the Firearm Safety Act of 2013 violates the Equal Protection Clause of the Fourteenth Amendment by providing an exception for retired Maryland law enforcement officers. Whether the restriction against "copies" of assault weapons set forth in the Firearm Safety Act of 2013 violates the Due Process Clause of the Fourteenth Amendment by being too vague to provide adequate notice of the proscribed conduct.

Brief Summary: In a published en banc opinion, the United States Court of Appeals for the Fourth Circuit affirmed the District Court's judgment and held that the Firearm Safety Act of 2013 ("FSA") does not violate the Second and Fourteenth Amendments. First, the Fourth Circuit concluded that assault weapons and large-capacity magazines constitute weapons of war and therefore are not protected by the Second Amendment. Second, assuming that assault weapons and large-capacity magazines are protected by the Second Amendment, the FSA withstands intermediate scrutiny on the basis that it advances the compelling state interest in public safety by reducing the availability of such equipment. Third, the Fourth Circuit held that the FSA's exception for retired Maryland law enforcement officers does not violate the Fourteenth Amendment's Equal Protection Clause, because retired police officers are not situated similarly with members of the general public. Finally, the Fourth Circuit concluded that the FSA's ban against "copies" of assault weapons provides adequate notice of the conduct proscribed and therefore does violate the Due Process Clause of the Fourteenth Amendment.

Judge Wilkinson issued a concurrence emphasizing that the state legislature is best positioned to address issues of gun violence. Judge Diaz issued an opinion concurring in part, concluding that the FSA withstands constitutional scrutiny. Judge Traxler issued a dissenting opinion, in which he contended that the Second Amendment's protections include assault weapons and large-capacity magazines and that the FSA fails to withstand strict scrutiny. Finally, Judge Traxler issued an opinion dissenting in part and concurring in part, in which he asserted that the FSA violated the Fourteenth Amendment's Equal Protection Clause but did not violate the Fourteenth Amendment's Due Process Clause.

Extended Summary: In response to the rise in mass shootings and gun violence, the Maryland General Assembly enacted the Firearm Safety Act of 2013 ("FSA"). The FSA bans assault rifles and shotguns ("assault weapons"), as well as "copies" of assault weapons. The FSA also places restrictions on detachable large-capacity magazines. The FSA provides an exception for retired Maryland law enforcement officers in certain circumstances.

In September of 2013, a group of Maryland residents and firearms dealers ("Appellants") filed suit for declaratory and injunctive relief against Governor Lawrence Hogan, Jr., Attorney General Brian Frosh, Colonel William Pallozzi of the Maryland State Police, and the Maryland State Police (collectively, the "State"). Appellants alleged that (1) the restrictions on assault weapons and large-capacity magazines violated the Second Amendment; (2) the FSA's exception for retired Maryland law enforcement officers violated the Equal Protection Clause of the Fourteenth Amendment; and (3) the FSA's restrictions on "copies" of assault weapons was vague and thus violated the Due Process Clause of the Fourteenth Amendment. The District Court upheld the FSA, applying intermediate scrutiny on review. On appeal, a divided three-judge panel of the Fourth Circuit vacated the District Court's judgment and remanded the case with directions to reevaluate the statute using strict scrutiny.

After granting a rehearing en banc, the Fourth Circuit affirmed the District Court's judgment and held that the FSA does not violate the Second or Fourteenth Amendments. Citing the Supreme Court's decision in District of Columbia v. Heller, 554 U.S. 570 (2008), the full court first concluded that the banned assault weapons and large-capacity magazines constitute "exceptionally lethal weapons of war" beyond the Second Amendment's reach, as demonstrated by their overwhelming use in mass shootings and other acts of gun violence.

Moreover, the Fourth Circuit held that, assuming the FSA-banned equipment is entitled to Second Amendment protection, the FSA nonetheless withstood the appropriate intermediate scrutiny standard of review. Concluding that the FSA does not severely burden the right of citizens to use arms for self-defense in the home, the Fourth Circuit applied intermediate scrutiny to determine whether the FSA was "reasonably adapted to a substantial governmental interest." First, the Fourth Circuit emphasized that the State has a substantial and compelling interest in protecting its citizenry and the public safety. Second, the Fourth Circuit reasoned that the FSA will reasonably advance the State's interest by reducing the overall availability of assault weapons and large-capacity magazines for use in mass shootings, criminal acts, and accidents.

Turning to the Appellants' Fourteenth Amendment claims, the Fourth Circuit rejected the Appellants' argument that retired Maryland law enforcement officers are similarly situated to members of the public. Unlike members of the public, police officers receive extensive specialized training related to the use of assault weapons, use of force, and harm reduction. The Fourth Circuit also rejected Appellants' argument that the FSA's restrictions against "copies" of assault weapons are unconstitutionally vague, emphasizing Maryland's prior use of the term "copies" in firearms statutes. The Attorney General and Maryland State Police have also provided guidance related to what constitutes a "copy" of a weapon.

In a concurring opinion joined by Judge Wynn, Judge Wilkinson concluded the FSA should be upheld in its entirety in no small part because the state legislature is best positioned to address the issue of gun violence. Judge Wilkinson further determined that striking the FSA would impair the state legislature's ability to prevent future tragedies and "would deliver a body blow to democracy as we have known it since the very founding of this nation." Judge Diaz also wrote a separate opinion concurring in part, in which he asserted that the Court need only hold that the FSA passes constitutional scrutiny under the Second Amendment.

Judge Traxler issued a dissenting opinion, joined by Judges Niemeyer, Shedd, and Agee. Applying a "common use" analysis, Judge Traxler contended that assault weapons and large-capacity magazines deserve Second Amendment protection due to the "statistically significant number of American citizens" that possess FSA-banned equipment for lawful purposes. In Judge Traxler's view, strict scrutiny applies against the FSA, because the FSA imposes a severe burden upon citizens' ability to purchase commonly possessed firearms for use in their homes for self-defense. Specifically, the dissent reasoned that citizens should have a choice of desired firearm. Semi-automatic rifles and large-capacity magazines, for example, may enhance an anxious homeowner's ability to protect against a home invader by eliminating reload time and providing greater accuracy.

Finally, Judge Traxler issued a second opinion dissenting in part and concurring in part. Judge Traxler dissented from the majority's opinion on the equal protection claim for reasons set forth in the now-vacated panel opinion. Finally, he concurred in the majority's judgment that the FSA did not violate the Due Process Clause of the Fourteenth Amendment.

To read the full opinion, click here.

Panel: Chief Judge Gregory, and Judges Wilkinson, Niemeyer, Motz, Traxler, King, Shedd, Agee, Keenan, Wynn, Diaz, Floyd, Thacker, and Harris

Argument Date: 05/11/2016

Date of Issued Opinion: 02/21/2017

Docket Numbers: No. 14-1945

Decided: Affirmed by published opinion.

Case Alert Author: Linda Morris, Univ. of Maryland Carey School of Law

Counsel: ARGUED: John Parker Sweeney, BRADLEY ARANT BOULT CUMMINGS LLP, Washington, D.C., for Appellants. Matthew John Fader, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Appellees. ON BRIEF: T. Sky Woodward, James W. Porter, III, Marc A. Nardone, BRADLEY ARANT BOULT CUMMINGS LLP, Washington, D.C., for Appellants. Brian E. Frosh, Attorney General of Maryland, Jennifer L. Katz, Assistant Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Appellees. Kyle J. Bristow, BRISTOW LAW, PLLC, Clarkston, Michigan; Jason Van Dyke, THE VAN DYKE LAW FIRM, PLLC, Plano, Texas, for Amicus Traditionalist Youth Network, LLC. Patrick Morrisey, Attorney General, Elbert Lin, Solicitor General, Julie Marie Blake, Erica N. Peterson, Gilbert Dickey, Assistant Attorneys General, OFFICE OF THE ATTORNEY GENERAL OF WEST VIRGINIA, Charleston, West Virginia, for Amicus State of West Virginia; Luther Strange, Attorney General of Alabama, Montgomery, Alabama, for Amicus State of Alabama; Michael C. Geraghty, Attorney General of Alaska, Juneau, Alaska, for Amicus State of Alaska; Thomas C. Horne, Attorney General of Arizona, Phoenix, Arizona, for Amicus State of Arizona; Pam Bondi, Attorney General of Florida, Tallahassee, Florida, for Amicus State of Florida; Lawrence G. Wasden, Attorney General of Idaho, Boise, Idaho, for Amicus State of Idaho; Derek Schmidt, Attorney General of Kansas, Topeka, Kansas, for Amicus State of Kansas; James D. Caldwell, Attorney General of Louisiana, Baton Rouge, Louisiana, for Amicus State of Louisiana; Bill Schuette, Attorney General of Michigan, Lansing, Michigan, for Amicus State of Michigan; Chris Koster, Attorney General of Missouri, Jefferson City, Missouri, for Amicus State of Missouri; Timothy C. Fox, Attorney General of Montana, Helena, Montana, for Amicus State of Montana; Jon Bruning, Attorney General of Nebraska, Lincoln, Nebraska, for Amicus State of Nebraska; Gary King, Attorney General of New Mexico, Santa Fe, New Mexico, for Amicus State of New Mexico; Wayne Stenehjem, Attorney General of North Dakota, Bismarck, North Dakota, for Amicus State of North Dakota; E. Scott Pruitt Attorney General of Oklahoma, Oklahoma City, Oklahoma, for Amicus State of Oklahoma; Alan Wilson, Attorney General of South Carolina, Columbia, South Carolina, for Amicus State of South Carolina; Martin J. Jackley, Attorney General of South Dakota, Pierre, South Dakota, for Amicus State of South Dakota; Greg Abbott, Attorney General of Texas, Austin, Texas, for Amicus State of Texas; Sean Reyes, Attorney General of Utah, Salt Lake City, Utah, for Amicus State of Utah; Peter K. Michael, Attorney General of Wyoming, Cheyenne, Wyoming, for Amicus State of Wyoming; Jack Conway, Attorney General of Kentucky, Frankfort, Kentucky, for Amicus Commonwealth of Kentucky. Charles J. Cooper, David H. Thompson, Peter A. Patterson, John D. Ohlendorf, COOPER & KIRK, PLLC, Washington, D.C., for Amicus National Rifle Association of America, Inc. C.D. Michel, Clinton B. Monfort, Anna M. Barvir, MICHEL & ASSOCIATES, P.C., Long Beach, California, for Amici CRPA Foundation, Gun Owners of California, Colorado State Shooting Association, Idaho State Rifle & Pistol Association, Illinois State Rifle Association, Kansas State Rifle Association, League of Kentucky Sportsmen, Inc., Nevada Firearms Coalition, Association of New Jersey Rifle & Pistol Clubs, New Mexico Shooting Sports Association, New York State Rifle & Pistol Association, Texas State Rifle Association, Vermont Federation of Sportsmen's Clubs, and Vermont Rifle & Pistol Association. Michael Connelly, U.S. JUSTICE FOUNDATION, Ramona, California, for Amicus U.S. Justice Foundation; Robert J. Olson, Herbert W. Titus, William J. Olson, John S. Miles, Jeremiah L. Morgan, WILLIAM J. OLSON, P.C., Vienna, Virginia, for Amici 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., Conservative Legal Defense and Education Fund, and Institute on the Constitution. Brian S. Koukoutchos, Mandeville, Louisiana; James B. Astrachan, ASTRACHAN GUNST THOMAS, P.C., Baltimore, Maryland, for Amici Congress of Racial Equality, National Center for Public Policy Research, Project 21, Pink Pistols, Women Against Gun Control, and The Disabled Sportsmen of North America. Dan M. Peterson, DAN M. PETERSON, PLLC, Fairfax, Virginia, for Amici The Law Enforcement Legal Defense Fund, Law Enforcement Action Network, Law Enforcement Alliance of America, International Law Enforcement Educators and Trainers Association, and Western States Sheriffs' Association. Jonathan K. Baum, Chicago, Illinois, Mark T. Ciani, KATTEN MUCHIN ROSENMAN LLP, New York, New York, for Amici Law Center to Prevent Gun Violence and Marylanders to Prevent Gun Violence, Inc. Jonathan E. Lowy, Kelly Sampson, BRADY CENTER TO PREVENT GUN VIOLENCE, Washington, D.C.; Elliott Schulder, Suzan F. Charlton, Amit R. Vora, Catlin Meade, Stephen Kiehl, COVINGTON & BURLING LLP, Washington, D.C., for Amicus Brady Center To Prevent Gun Violence. Barbara D. Underwood, Solicitor General, Anisha S. Dasgupta, Deputy Solicitor General, Claude S. Platton, Assistant Solicitor General, Eric T. Schneiderman, Attorney General of the State of New York, for Amicus State of New York; Kamala D. Harris, Attorney General of California, Sacramento, California, for Amicus State of California; George Jepsen, Attorney General of Connecticut, Hartford, Connecticut, for Amicus State of Connecticut; Russell A. Suzuki, Attorney General of Hawaii, Honolulu, Hawaii, for Amicus State of Hawaii; Lisa Madigan, Attorney General of Illinois, Chicago, Illinois, for Amicus State of Illinois; Thomas J. Miller, Attorney General of Iowa, Des Moines, Iowa, for Amicus State of Iowa; Martha Coakley, Attorney General of Massachusetts, Boston, Massachusetts, for Amicus Commonwealth of Massachusetts; Ellen F. Rosenblum, Attorney General of Oregon, Salem, Oregon, for Amicus State of Oregon; Karl A. Racine, Attorney General of The District of Columbia, Washington, D.C., for Amicus The District of Columbia. J. Adam Skaggs, Mark Anthony Frasetto, EVERYTOWN FOR GUN SAFETY, New York, New York; Deepak Gupta, Jonathan E. Taylor, Neil K. Sawhney, GUPTA WESSLER PLLC, Washington, D.C., for Amicus Everytown for Gun Safety.

Author of Opinion: Judge King

Concurring Opinion: Judge Wilkinson

Opinion Concurring in Part: Judge Diaz

Dissenting Opinion: Judge Traxler

Opinion Dissenting in Part and Concurring in Part: Judge Traxler

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/27/2017 01:13 PM     4th Circuit     Comments (0)  

  Ivey (Trustee) v. First Citizens Bank & Trust Co. -- Fourth Circuit
Ponzi Schemers Beware: Wire Deposits and Bank Transfers NOT "Transfers" Within Meaning of Bankruptcy Code

Areas of Law: Bankruptcy Law

Issue Presented: Whether deposit and wire transfers to a defendant's personal checking account are "transfers" within the meaning of § 101(54) of the Bankruptcy Code and, if so, whether they are avoidable as fraudulent transfers under 11 U.S.C. § 548(a)(1)(A).

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that a debtor's deposit and wire transfers did not constitute "transfers" within the meaning of the Bankruptcy Code because the debtor continued to possess, control, and have custody over his funds even after he made deposits to his First Citizens Bank account. Thus, any funds in the account were at all times part of the bankruptcy estate.

Extended Summary: In early 2010, a group of eight individual creditors filed an involuntary petition in bankruptcy court against debtor Whitley for relief. Involuntary petitions are filed against debtors so that the debtor may not deplete the resources available to pay creditors. The petition was granted on March 30, 2010. In 2012, the trustee, Charles Ivey, filed a complaint on behalf of the bankruptcy estate against First Citizens Bank, where Whitley held a personal checking account in his name. Whitley used this account to deposit funds, receive wire transfers, and write checks as part of a Ponzi scheme he was involved in. These checks, deposits, and transfers were written or made in the two years before the filing of the involuntary bankruptcy petition. The trustee alleged that some of the deposits and wire transfers into the account, including personal and cashier's checks and wire transfers from Whitley's "investors," constituted transfers from Whitley to the Bank that were made with the actual intent to hinder, delay, or defraud creditors. The trustee argued that they were, therefore, avoidable as fraudulent transfers under 11 U.S.C. § 548(a)(1)(A). A fraudulent transfer is an attempt to avoid debt by transferring money to another person or company, in this case under the trustee's theory, to First Citizens Bank. The bankruptcy court granted summary judgment for First Citizens Bank holding that although the transactions at issue were transfers, the transfers did not diminish the bankruptcy estate and did not place the funds beyond the reach of creditors, so they were not avoidable as fraudulent transfers. The district court affirmed.

In the Fourth Circuit, the trustee alleged again that the transactions should be avoided as fraudulent transfers made from Whitley to the Bank with the actual intent to hinder, delay, or defraud Whitley's creditors. The trustee also argued that the bankruptcy and district courts erred by requiring that the transactions diminish the bankruptcy estate in order to qualify as fraudulent transfers under § 548(a)(1)(A). The trustee argued that where actual fraudulent intent was present, there is no requirement that the transactions diminish or move property away from the bankruptcy estate. First Citizens Bank argued that the bankruptcy court and district court properly required that transactions diminish the bankruptcy estate because § 548(a)(1)(A) requires that an avoidable transfer be one "of an interest of the debtor in property," which the Bank argued federal courts have interpreted to mean that the property would have been in the estate but for the transfer.

The Fourth Circuit noted that it asked the parties to address at oral argument the threshold question of whether the transactions at issue were transfers within the meaning of § 101(54) of the Bankruptcy Code, so that it could proceed to considering whether the transactions were avoidable transfers under § 548(a)(1)(A). The trustee argued that the transactions did not constitute transfers under § 101(54)'s broad definition and contended that depositing and accepting funds into a bank account, as Whitley did, constitutes parting with property under § 101(54) because of the Bank's access to and interest in the funds. Additionally, the trustee alleged that the transactions should be avoided as fraudulent transfers because they were made from Whitley to the Bank with the actual intent to hinder, delay, or defraud Whitley's creditors. First Citizens Bank countered, arguing that no parting with the property occurred. The Bank argued that there was no change to Whitley's rights and interests in the property after the deposits and wire transfers because Whitley retained access to his account; he could withdraw funds at will and the funds in the account were available to the bankruptcy estate.

The court held that the transactions at issue did not constitute transfers within the meaning of the Bankruptcy Code. Under 11 U.S.C. § 548(a)(1)(A), a "trustee may avoid any transfer that was made or incurred on or within 2 years before the date of the filing of the petition, if the debtor voluntarily or involuntarily" made those transfers with the actual intent to hinder, delay, or defraud any creditor. The Bankruptcy Code defines "transfer" as any "mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with . . . (i) property; or (ii) an interest in property." The Fourth Circuit observed that Congress wanted to define "transfer" as broadly as possible in the Bankruptcy Code. Specifically, the Fourth Circuit noted that because Congress defined "transfer" broadly, courts have been divided on whether § 101(54)'s definition of "transfer," includes a debtor's deposits into his own unrestricted bank account in the regular course of business. In determining whether Whitley's "transfers" fell within the meaning of § 101(54), the Fourth Circuit followed its decision in Citizens' Nat. Bank of Gastonia, N.C. v. Lineberger. Due to this precedent as well as the decisions of sister circuits, the Fourth Circuit determined that the better interpretation of "transfer" does not include a debtor's regular deposits into his or her own unrestricted checking account. Specifically, the Fourth Circuit determined that when Whitley made his deposits, he continued to possess, control, and have custody over his funds. Thus, any funds in the account were at all times part of the bankruptcy estate. The Fourth Circuit affirmed the district court's judgment was affirmed.

To read the full opinion, click here.

Panel: Chief Judge Gregory and Judges Wynn and Davis

Argument Date: October 26, 2016

Date of Issued Opinion: January 31, 2017

Docket Number: No. 15-2209

Decided: Affirmed by published opinion

Case Alert Author: Dena Robinson, Univ. of Maryland Carey School of Law

Counsel: Charles Marshall Ivey, III, IVEY, MCCLELLAN, GATTON & SIEGMUND, L.L.P., Greensboro, North Carolina, for Appellant. Gary J. Rickner, WARD AND SMITH, P.A., Greenville, North Carolina, for Appellee. ON BRIEF: Charles Marshall Ivey, IV, IVEY, MCCLELLAN, GATTON & SIEGMUND, L.L.P., Greensboro, North Carolina, for Appellant. Benjamin E. F. B. Waller, WARD AND SMITH, P.A., Greenville, North Carolina, for Appellee.

Author of Opinion: Chief Judge Gregory

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/27/2017 12:36 PM     4th Circuit     Comments (0)  

March 24, 2017
  Heyer v. U.S. Bureau of Prisons -- Fourth Circuit
No ASL Interpreter, No Videophone: Deaf Prisoner Wins First and Fifth Amendment Claims

Areas of Law: First Amendment, Fifth Amendment

Issue Presented: Whether the district court erred in granting summary judgment to the defendant on the plaintiff's Fifth Amendment claims for failure to provide ASL interpreters for medical appointments and the mental health treatment in the Commitment and Treatment Program and on the plaintiff's First Amendment claim for failure to provide access to a videophone.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that the district court erred in granting summary judgment in favor of the defendant on the plaintiff's First and Fifth Amendment claims. First, the defendant's failure to provide ASL interpreters for the plaintiff's medical appointments amounted to deliberate indifference to his medical needs in violation of the Fifth Amendment. Second, the defendant's post-litigation decision to provide interpreters for some aspects of Heyer's treatment in the Commitment and Treatment Program provides no basis for rejecting Heyer's Fifth Amendment claim on the merits. Third, the defendant's failure to provide the plaintiff with access to a videophone improperly restricts his First Amendment rights to communicate with those outside the prison. Therefore, the Fourth Circuit vacated the district court's order in part and remanded for further proceedings.

Extended Summary: Thomas Heyer ("Heyer") is a deaf individual, who communicates primarily through American Sign Language ("ASL") and has extremely limited proficiency in spoken or written English. Heyer was previously convicted of possessing child pornography. In December 2008, the government filed a petition seeking to detain Heyer under the Adam Walsh Child Protection and Safety Act (the "Adam Walsh Act"). Since the filing, Heyer has remained in civil custody at the federal correctional institution in Butner, North Carolina. After a hearing on the petition in March 2012, the district court ordered Heyer detained as a sexually dangerous person.

Under the Adam Walsh Act, Heyer will remain in civil custody until such time as the government determines that his "condition is such that he is no longer sexually dangerous to others, or will not be sexually dangerous to others if released under a prescribed regimen of medical, psychiatric, or psychological care or treatment." 18 U.S.C. § 4248(e). Adam Walsh Act detainees at Butner are expected to participate in the "Commitment and Treatment Program" (the "CT Program"), which includes mental health treatment in group and individual settings and other activities. Heyer began participating in the CT Program in July 2012.

Since December 2008, Heyer has made multiple requests for ASL interpreters. The prison officials refused to provide qualified interpreters for any purpose, including scheduled medical appointments and medical emergencies, until late 2012. Heyer has had multiple seizures during his time at Butner. In 2010, the prison officials assigned another inmate, who does not know ASL, to act as Heyer's "inmate companion person" to help Heyer communicate with others. The prison officials also required Heyer to rely on this "companion" during medical interactions. As to the CT Program, the prison officials concluded that Heyer's inmate companion would be "inadequate" to facilitate Heyer's participation, but did not provide Heyer with ASL interpreters for the CT Program until September 2012.

In 2011, Heyer filed a lawsuit against the United States Bureau of Prisons ("BOP"). Heyer alleged, among other claims, that (1) the BOP violated Heyer's Fifth Amendment rights by failing to provide ASL interpreters for medical appointments and for the mental health treatment provided through the CT Program, and (2) the BOP violated Heyer's First Amendment rights by failing to provide access to a videophone. The district court granted summary judgment in favor of BOP on the claims.

With respect to his first Fifth Amendment claim, Heyer contended that he, a civil detainee, is entitled under the Fifth Amendment to at least the same protection prisoners receive under the Eighth Amendment. As deliberate indifference to serious medical needs of prisoners constitutes the unnecessary and wanton infliction of pain proscribed by the Eighth Amendment, Heyer argued that the failure to provide ASL interpreters amounted to deliberate indifference to his medical needs and thus violated his Fifth Amendment rights.

The Fourth Circuit agreed and held that Heyer's evidence was sufficient to support a finding of deliberate indifference. The deliberate indifference standard has two components: the plaintiff must show (1) that he had serious medical needs, and (2) that the defendant acted with deliberate indifference to those needs. See Iko v. Shreve, 535 F.3d 225, 241 (4th Cir. 2008). First, the Fourth Circuit found that Heyer, who suffered multiple seizures during his confinement, had serious medical needs. In addition, citing Farmer v. Brennan, 511 U.S. 825, 837 (1994), the court found that the absence of ASL interpreters during medical appointments exposed Heyer to "a substantial risk of serious harm." Second, the Fourth Circuit found that BOP acted with deliberate indifference to those needs by knowing Heyer's deafness since his arrival at Butner in 2008, knowing his need for an ASL interpreter for communication and treatment, knowing his inmate companion was inadequate to ensure understanding, and disregarding his requests for ASL interpreters. Thus, the Fourth Circuit concluded that the district court erred in granting summary judgment in favor of the BOP on the first Fifth Amendment claim.

With respect to his second Fifth Amendment claim, Heyer contended that BOP failed to provide ASL interpreters for the mental health treatment in the CT Program. The district court granted summary judgment for BOP, explaining that BOP had agreed to provide ASL interpreters for Heyer's participation in most aspects of the CT Program. The Fourth Circuit disagreed.

The Fourth Circuit observed that Heyer sought a court ruling that, because the length of his confinement is dependent in large part on BOP's assessment of his mental health, BOP is constitutionally obliged to provide interpreters for all aspects of the mental-health treatment it offers to Adam Walsh Act detainees. Heyer also sought an injunction ordering BOP to provide the necessary interpreters. Thus, the court held that BOP's post-litigation decision to provide interpreters for some aspects of Heyer's treatment clearly provided no basis for rejecting Heyer's claim on the merits. Accordingly, the court concluded that the district court erred by granting summary judgment in favor of BOP on this claim as well.

With respect to his First Amendment claim, Heyer contended that BOP's failure to provide him with access to a videophone improperly restricted his First Amendment right to communicate with those outside the prison. The Fourth Circuit agreed. In Turner v. Safley, 482 U.S. 78 (1987), the Supreme Court concluded that a prison policy or regulation that "impinges on inmates' constitutional rights . . . is valid if it is reasonably related to legitimate penological interests," and the Court identified four factors to consider when determining the reasonableness of the policy.

To start with, the Fourth Circuit held that BOP's TTY-only policy did impinge on Heyer's First Amendment rights. The court found that Heyer cannot effectively communicate through the TTY device because it requires proficiency in written English, in which Heyer does not possess.

The Fourth Circuit then determined whether that policy "is reasonably related to legitimate penological interests" based on the four-factor test in Turner. In discussing the first factor, the Fourth Circuit found that there is not a "valid, rational connection between the prison regulation and the legitimate governmental interest put forward to justify it." Although BOP argued that its TTY-only policy furthered its legitimate interest in maintaining prison security and that videophone conversations must go through its secure Inmate Telephone System, the Fourth Circuit noted that the TTY system currently in place operates on an unsecured line in a private staff office. Also, as to whether monitoring of a videophone conversation would be more demanding of staff time than the monitoring of the TTY conversations that is already being done, the Fourth Circuit held that the fact finder could question whether a videophone system would in fact present the difficulties asserted by BOP.

Second, the Fourth Circuit held that Heyer has no alternate effective means of communication. Although BOP argued that alternative means of communicating (TTY, emails, written letters, and in-person visits) with those outside Butner were available to Heyer, the Fourth Circuit found all (except in-person visitation) involve the use of written English, in which Heyer has extremely limited proficiency. In addition, the court found that the availability of in-person visitation is of little help in emergencies or other situations where there is a need for immediate contact.

Third, the Fourth Circuit held that accommodating Heyer's needs would have a minimal effect on guards or other inmates or on the prison's allocation of resources. The court found that it was questionable that a videophone would require creation of a new, secure IT infrastructure, as BOP claimed. Moreover, nothing in the record indicated why a system-wide solution, as BOP claimed, would be required.

Finally, the Fourth Circuit found that there is a "ready alternative" to the challenged policy. Given Heyer's evidence of the minimal cost of a videophone and the ease with which security concerns could be mitigated, the court held that a fact finder could reasonably conclude that BOP's refusal to provide a videophone is an exaggerated response to the perceived security concerns. Accordingly, the Fourth Circuit concluded that the district court erred by granting summary judgment to BOP on the First Amendment claim.

To read the full opinion, click here.

Panel: Judges Motz, Traxler, and Floyd

Argument Date: 10/26/2016

Date of Issued Opinion: 02/23/2017

Docket Number: No. 15-6826

Decided: Affirmed in part, vacated in part, and remanded by published opinion

Case Alert Author: Maria Nazarova, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Ian S. Hoffman, ARNOLD & PORTER LLP, Washington, D.C., for Appellant. Robert J. Dodson, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellees. ON BRIEF: Deborah Golden, Elliot Mincberg, WASHINGTON LAWYERS' COMMITTEE FOR CIVIL RIGHTS & URBAN AFFAIRS, Washington, D.C.; David B. Bergman, ARNOLD & PORTER LLP, Washington, D.C., for Appellant. John Stuart Bruce, Acting United States Attorney, Jennifer P. May-Parker, Jennifer D. Dannels, Assistant United States Attorneys, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellees. Marc Charmatz, Howard A. Rosenblum, Debra Patkin, NATIONAL ASSOCIATION OF THE DEAF, Silver Spring, Maryland, for Amicus Curiae.

Author of Opinion: Circuit Judge Traxler

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/24/2017 03:48 PM     4th Circuit     Comments (0)  

March 20, 2017
  Sixth Circuit: nondisclosure of State's payment to key witness violates due process
Headline: Prosecution's nondisclosure of witness's payment for testimony violates defendant's due-process rights under Brady v. Maryland.

Case: Thomas v. Westbrooks

Area of law: Criminal procedure, constitutional law, due process.

Issue presented: Whether the state violated the defendant's right to due process under Brady v. Maryland when the prosecutor suppressed evidence that the key witness had received payment for her testimony.

Brief summary: The state's key witness in Thomas's murder trial received $750 for her testimony. The prosecution failed to disclose this evidence during trial and failed to correct on the record the witness's false testimony that she did not receive any payment. Thomas argued that this violated his due-process rights under Brady, which prohibits the state from suppressing material evidence that is favorable to the defendant. The Sixth Circuit found that the evidence of the witness's payment was material under the circumstances. It reasoned that a large payment made in direct connection to the case in which the witness is testifying presents a pecuniary bias that is likely to weigh heavily on a juror's assessment of the witness's credibility. The Court also emphasized that the focus with a Brady claim is not on whether the other evidence at trial was sufficient to convict the defendant, but whether suppression of this evidence made the defendant's trial fundamentally unfair.

Extended summary: In 1997, Thomas shot and robbed an armored-truck driver. A federal court convicted Thomas of interfering with interstate commerce and other firearm-related crimes, sentencing him to life in prison. After the truck driver died of his injuries, the State of Tennessee charged him with felony murder. A jury convicted him and sentenced him to death.

The key witness at both trials was Angela Jackson, who was Thomas's girlfriend at the time of the crime. Before the murder trial began, the FBI paid Jackson $750 as a reward for her testimony. Her receipt of this payment was noted in the files that federal authorities gave state prosecutors to use in their case.

The state prosecutor did not inform Thomas of this payment. On the contrary, the prosecutor continuously emphasized during the murder trial that Jackson was testifying because she believed it was the "'the right thing to do.'" The prosecutor also failed to correct Jackson on the record when she twice perjured herself by testifying that she didn't receive any money in exchange for her testimony.

On appeal, Thomas claimed that the state's nondisclosure of Jackson's payments violated his due-process rights established in the U.S. Supreme Court case Brady v. Maryland. Brady held that a prosecutor's suppression of evidence violates a defendant's due-process rights if (1) the evidence is favorable to the defendant, (2) the evidence is either intentionally or accidentally suppressed by the state, and (3) the suppression results in prejudice to the defendant. The state conceded that the first two Brady elements were met, leaving only the question of prejudice.

Under the Brady test, prejudice results when the suppressed evidence is material, even if that evidence is only relevant for impeachment purposes. Evidence is material when, considering all relevant evidence, the suppressed evidence deprived the defendant of a fair trial with a trustworthy verdict. A defendant's burden for meeting this standard is between a mere possibility and a preponderance of the evidence that disclosure of the suppressed evidence would have resulted in an acquittal.

The Sixth Circuit held that evidence of Jackson's payment was material under the circumstances. The Court reasoned that this case was factually similar to a previous Sixth Circuit case, Robinson v. Mills, where the prosecution's key witness had previously received $70 for being a confidential informant - all, however, for cases that had nothing to do with the defendant's. Nonetheless, the Court held that the prosecution's failure to disclose these facts warranted relief under Brady because it revealed a potential bias relevant to the witness's credibility and truthfulness. Applying Robinson, the Sixth Circuit found that the $750 payment to witness Angela Jackson for testifying against Thomas was certainly material if the $70 payment in Robinson for past informant services was material.

The state argued that there was sufficient evidence to convict Thomas without Jackson's testimony, making anything related to her testimony, like the fact that she received payment, immaterial. But the Court reiterated that a Brady claim is meant to protect a defendant's right to a fair trial; therefore, the focus is not on whether the defendant could have been convicted if the suppressed evidence had been presented, but whether the suppression of the evidence made the defendant's trial fundamentally unfair. Furthermore, the Court rejected the state's factual argument that Jackson's testimony did not weigh heavily on the jury's decision to convict Thomas. Jackson provided credible testimony on key aspects of the prosecution's case, such as placing Thomas at the crime scene and linking him to the driver of the getaway car used after the robbery.

The state also argued that the defense had been able to effectively impeach Jackson on her inconsistent statements and her own past bad acts, and therefore evidence of her payment was immaterial. The Court, however, stressed the difference between impeachment based on pecuniary bias and impeachment based on other grounds. The Court found that jurors are more likely to distrust witnesses whose testimony is linked to a financial gain.

Since the Court found that Thomas was entitled to relief on his Brady claim, the Court found it unnecessary to determine whether the prosecutor engaged in prosecutorial misconduct for failing to correct Jackson's perjurious testimony that she never received a payment in exchange for her participation.

Panel: Circuit Judges Gilbert S. Merritt, Eugene E. Siler, Jr., and Bernice B. Donald.

Date of issued opinion: February 24, 2017

Docket number: 15-5399

Decided: Reversed and remanded.

Counsel: Robert L. Hutton, GLANKLER BROWN, PLLC, Memphis, Tennessee, for Appellant. Michael M. Stahl, OFFICE OF THE TENNESSEE ATTORNEY GENERAL, Nashville, Tennessee, for Appellee. ON BRIEF: Robert L. Hutton, GLANKLER BROWN, PLLC, Memphis, Tennessee, Kevin Wallace, Elizabeth Cate, Mollie Richardson, WINSTON & STRAWN LLP, New York, New York, for Appellant. Michael M. Stahl, OFFICE OF THE TENNESSEE ATTORNEY GENERAL, Nashville, Tennessee, for Appellee. Mark A. Fulks, BAKER DONELSON BEARMAN CALDWELL & BERKOWTIZ, P.C., Johnson City, Tennessee, for Amicus Curiae.

Author of opinion: Circuit Judge Gilbert S. Merritt.

Case alert author: Andrea Randall, Western Michigan University Cooley Law School

Case alert circuit supervisor: Professor Mark Cooney

Link to the case: http://www.opn.ca6.uscourts.go...ns.pdf/17a0045p-06.pdf

Edited: 03/23/2017 at 12:42 PM by Mark Cooney

    Posted By: Mark Cooney @ 03/20/2017 11:52 AM     6th Circuit     Comments (0)  

March 19, 2017
  Gil v. Sessions - Second Circuit
Headline: Second Circuit denies petition to review Board of Immigration Appeals decision denying claim of derivative citizenship

Area of Law: Immigration Law

Issue Presented: Whether the petitioner, who was born out of wedlock in the Dominican Republic to two Dominican citizens, could claim derivative citizenship as a legitimized "child" of his naturalized father under the Immigration and Nationality Act.

Brief Summary: The petitioner was born in the Dominican Republic to unwed Dominican citizens. He petitioned for review of a Board of Immigration Appeals ("BIA") decision that found him ineligible for derivative citizenship through his naturalized father and, accordingly denied his motion to terminate removal proceedings initiated based upon his two prior convictions. To be a "child" eligible for derivative citizenship under § 101(c)(1) of the Immigration and Nationality Act, an individual born out of wedlock must be "legitimated" under the Act by the age of 16. The Second Circuit affirmed the findings of the BIA and held that petitioner failed to gain legitimated status under Dominican or New York law before he turned 16 years old and, therefore, was not eligible for derivative citizenship.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...52cfa3ec46d/1/hilite/

Extended Summary: Gil was born in the Dominican Republic in 1968. His parents, unwed, were both Dominican citizens. In 1978, at nine years old, Gil came to the United States to live with his father as a lawful permanent resident. His father became a naturalized United States citizen in November 1980 when Gil was 11 years old and Gil received a Certificate of Citizenship at this time on the basis that he derived citizenship as a result of his father's naturalization. Gil was convicted of first-degree robbery in 1987 and of a controlled substance offense in federal court in 1995.

Thereafter, in 2010, the United States Citizenship and Immigration Services determined that Gil's Certificate of Citizenship was unlawfully or fraudulently obtained because he was not a qualifying "child" under the Immigration and Nationality ("INA") requirement for derivative citizenship. His Certificate of Citizenship was therefore cancelled and the Department of Homeland Security instituted removal proceedings against Gil based upon his prior convictions.
On November 18, 2013, an Immigration Judge ("IJ") rejected Gil's motion to terminate the removal proceedings based upon a claim of derivative citizenship, finding Gil was not "legitimate" under Dominican or New York law before reaching the age of sixteen as specified in the INA. The Board of Immigration Appeals (BIA) affirmed the IJ's ruling and Gil petitioned the Second Circuit for review of the BIA decision.

The INA § 321(a) addresses when a "child" born outside of the United States to alien parents may become a United States citizen through derivative citizenship. INA § 101(c)(1) then defines a "child" under the Act as "includ[ing] a child legitimated under the law of the child's residence or domicile, or under the law of the father's residence or domicile if such legitimation . . . takes place before the child reaches the age of 16 years . . . and the child is in the legal custody of the legitimating . . . parent . . . at the time of such legitimation." 8 U.S.C. § 101(c)(1). While not defined in the Act, the BIA has interpreted "legitimated" to refer to a child born out of wedlock who has been accorded legal rights that are identical to those enjoyed by a child born in wedlock. The issue of this case turned on whether, before Gil turned 16 years old, Dominican or New York had eliminated all legal distinctions between children born in and out of wedlock.

The Second Circuit ruled that Gil had not "legitimated" by the time he was 16 years old under Dominican law. A law was enacted in 1994 that changed Dominican law to eliminate all legal distinctions between children born in wedlock and those born out of wedlock, however Gil was 26 years old when this law took effect and therefore, the court found, was not a legitimated child by the age of 16 as required by the Act. The Second Circuit further ruled that Gil was not a legitimated child under New York law finding that New York law distinguishes between children born in and out of wedlock for inheritance purposes, citing to N.Y. Est. Powers & Trusts Law § 4-1.2(b) (McKinney 2010). Concluding Gil did not "legitimate" by the age of 16 years old under Dominican or New York law, and accordingly was not a "child" under § 101(c)(1) of the INA. the Second Circuit agreed with that he was not eligible for derivative citizenship through his father's naturalization. Accordingly, the Second Circuit denied Gil's petition for review of the BIA's decision that rejected his claim of derivative citizenship and denied his motion to terminate his removal proceedings.

To read the full opinion, visit,
http://www.ca2.uscourts.gov/de...52cfa3ec46d/1/hilite/

Panel: Circuit Judges Walker, Hall, and Chin

Argument Date: 10/31/2016

Date of Issued Opinion: 3/17/2017

Docket Number: 15-3134-ag

Decided: Petition Denied

Case Alert Author: Leigh G. Wellington

Counsel: Joshua E. Bardavid, New York, New York for Petitioner; Lisa M. Damiano, Trial Attorney, Terri J. Scadron, Assistant Director, Office of Immigration Litigation, Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Civil Division, United States Department of Justice, Washington, D.C. for Respondent.

Author of Opinion: Circuit Judge Chin

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 03/19/2017 11:33 AM     2nd Circuit     Comments (0)  

March 16, 2017
  Beck v. McDonald -- Fourth Circuit
"That Alone Is Not Enough" -- Fourth Circuit Takes Stand on Standing in Data Breach Case

Areas of Law: Civil Procedure, Constitutional Law

Issue Presented: Whether a plaintiff can establish an Article III injury-in-fact based on an increased risk of identity theft.

Brief Summary: In consolidated appeals from two class action suits alleging injury from a data breach, the United States Court of Appeals for the Fourth Circuit affirmed the dismissal of the cases for lack of subject matter jurisdiction. The Plaintiffs alleged they had been harmed by the William Jennings Bryan Dorn Veterans Affairs Medical Center's ("Dorn VAMC") loss of a laptop and files containing patients' medical records and personal information. The court found the alleged harm was too speculative and hypothetical to establish the "certainly impending" injury-in-fact that is required for standing. The Fourth Circuit also rejected the Plaintiffs' argument that standing existed based on the "substantial risk" that harm will occur as a result of the data breach. With regard to this argument, the court refused to infer that such a risk existed when an organization offers remedial free credit monitoring services.

Extended Summary: This case arose from consolidated appeals from two class actions (Beck v. McDonald and Watson v. McDonald) filed by veterans who received medical treatment and health care at the Dorn VAMC. The Plaintiffs sought money damages and declaratory and injunctive relief under the Privacy Act of 1974 ("Privacy Act") and the Administrative Procedures Act ("APA").

In both cases, the Plaintiffs attempted to establish standing and sufficient injury-in-fact based on the potential damages that could arise from the VAMC's loss of information. In the first class action suit, filed by Richard Beck and Lakreshia Jeffery, the Plaintiff's claims were based on the loss of a laptop computer containing unencrypted, confidential patient information of 7,400 patients. While the Beck litigation was still pending, Beverly Watson brought a class action lawsuit on behalf of the over 2000 individuals whose medical files were lost or stolen while being transported to a long term storage facility. The laptop contained patient's names, birth dates, the last four digits of social security numbers and physical descriptions. The files contained patient's names, full social security numbers, and medical diagnoses. Both the computer and the files have never been recovered and all parties affected by the loss of the data were offered one year of free credit monitoring.

In both cases, the Plaintiffs attempted to establish standing and injury-in-fact by arguing that the loss of information by the Dorn VAMC violated the Privacy Act, and caused Plaintiffs "embarrassment, inconvenience, unfairness, mental distress, and the threat of current and future substantial harm from identity theft and other misuse." Additionally, Plaintiffs argued that the risk of identity theft required them to frequently monitor their credit reports, bank statements, health insurance reports, purchase credit watch services, and shift financial accounts.

In Beck, the district court denied the Defendant's' initial motion to dismiss so the Plaintiff could conduct discovery. After discovery concluded, the Defendants again made a motion to dismiss, which was granted. In granting the motion, the district court found that the Plaintiffs had not submitted enough evidence to establish an issue of material fact that they faced a "certainly impending" risk of identity theft. In Watson, the district court did not even allow for discovery, and granted the Defendant's motion to dismiss.

On appeal, the United States Court of Appeals for the Fourth Circuit affirmed the dismissal of both cases for lack of subject matter jurisdiction. The court held that the Plaintiffs' alleged harm was too speculative and hypothetical to establish "certainly impending" injury-in-fact. In dismissing both cases, the Fourth Circuit noted that in other circuits where plaintiffs can establish injury-in-fact based on an increased risk of future identity theft, the plaintiff also alleged that "the data thief intentionally targeted the personal information comprised in the data breaches."

The Fourth Circuit also rejected the Plaintiffs' argument that they had standing based on a "substantial risk" that harm will occur. The Plaintiffs argued there was a substantial risk that harm would occur because generally 33% of health related data breaches result in identity theft. The Fourth Circuit, however, found that if that general point was true, than 66% of the veterans impacted by the breach would suffer no harm at all. The Fourth Circuit also declined to infer a substantial risk of harm exists if an organization offers free credit monitoring services, because that inference would discourage organizations from offering assistance. Finally, the Fourth Circuit found that the Plaintiffs did not suffer an injury-in-fact because they incurred a cost to protect against speculative threat because "self-imposed harms can not confer standing."

Finally, in denying the Plaintiffs injunctive relief request, the Fourth Circuit found that the Plaintiffs did not have standing under the APA. This was because allegations of the Dorn VAMC's past Privacy Act violations only demonstrated that the Plaintiffs could be victimized by a future data breach, not that there is an immediate danger that they will be victimized by a future data breach.

To read the full opinion, click here.

Panel: Judges Niemeyer and Diaz, and District Judge Keeley

Argument Date: 9/20/2016

Date of Issued Opinion: 2/6/2017

Docket Numbers: No. 15-1395

Decided: Affirmed by published opinion

Case Alert Author: Fernando Kirkman, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Douglas J. Rosinski, Columbia, South Carolina, for Appellants. Sonia Katherine McNeil, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees. ON BRIEF: D. Michael Kelly, Bradley D. Hewett, MIKE KELLY LAW GROUP, LLC, Columbia, South Carolina, for Appellants. Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Mark B. Stern, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; William N. Nettles, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Columbia, South Carolina, for Appellees.

Author of Opinion: Judge Diaz

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/16/2017 01:40 PM     4th Circuit     Comments (0)  

March 14, 2017
  Iraq Middle Market Development Foundation v. Harmoosh, et al. - Fourth Circuit
Fourth Circuit Applies Basic Contractual Right to Claim for Recognition of Foreign Civil Judgment

Areas of Law: Contracts

Issue Presented: Whether the Maryland Recognition Act's arbitration clause exception applies if a party forgoes the right to arbitrate by participating in judicial proceedings in a foreign court.

Brief Summary: In a published opinion, the Fourth Circuit vacated the grant of summary judgment in favor of the appellee and remanded the case to the United States District Court for the District of Maryland. In a lawsuit brought by the appellant-creditor to recognize a civil judgment against the appellee-debtor from an Iraqi court, the district court granted a motion for summary judgment upon the appellee's invocation of an arbitration clause in the loan agreement. Upon appeal of this ruling, the Fourth Circuit held there was still a genuine issue of material fact as to whether the appellee voluntarily waived the arbitration clause during judicial proceedings in the Iraqi court. Because the Fourth Circuit found that such a voluntary waiver in a foreign court is not contrary to the disputed arbitration clause for the purposes of the Maryland Recognition Act, the appellee was not entitled to summary judgment by the district court.

Extended Summary: The appellant, Iraq Middle Market Development Foundation, is a non-profit corporation that makes and services loans to businesses in Iraq. In 2006, Iraq Middle Market agreed to lend $2 million to Jawad Al-Harmoosh for his company, AGTTT. A managing partner at AGTTT, Mohammad Harmoosh, signed a promissory note guaranteeing repayment of the loan. Harmoosh is a dual citizen of Iraq and the United States, and lives in Maryland. The loan agreement contained an arbitration clause which required that all legal disputes be "finally and exclusively settled by arbitration."

In 2010, Iraq Middle Market sued the appellees in federal court in Maryland for breach of contract after the appellees refused to repay the loan. The appellees moved to dismiss the claim by invoking the loan agreement's arbitration clause. The district court dismissed the suit, but thereafter the appellees did not move to compel arbitration. Subsequently, in 2014, the appellant filed another civil action against the appellees to collect on the promissory note. This time, the appellant did so in an Iraqi court. The appellees asserted multiple affirmative defenses, but the parties disagreed as to whether they ever raised the arbitration clause in that proceeding. Although invocation of an arbitration clause would have deprived the Iraqi court of jurisdiction, the suit was litigated on the merits through final judgment. The Iraqi court found in favor of the appellant and awarded $2 million in damages. That judgment was subsequently affirmed by two appellate courts in Iraq.

Upon that decision, appellant brought the present complaint seeking recognition of the Iraqi judgment under the Maryland Uniform Foreign Money-Judgments Recognition Act. Under that act, a foreign judgment regarding a sum of money is generally conclusive between the parties if it is "final, conclusive, and enforceable where rendered." Md. Code, Courts and Judicial Proceedings, § 10-702 & 10-703. However, the act does recognize exceptions to this general rule, including if "the proceeding in the foreign court was contrary to an agreement between the parties under which the dispute was to be settled out of court." Md. Code, Courts and Judicial Proceedings, § 10-704(b)(4). The appellee invoked this statutory exception in a motion for summary judgment, which the district court granted because, in the court's view, the Iraqi judgment was "contrary to an arbitration provision."

The Fourth Circuit reviewed the grant of summary judgment de novo and first examined whether the disputed exception applies if a party forgoes its right to arbitrate by participating in judicial proceedings in a foreign court. This issue is a question of state law that had not yet been addressed by the Maryland Court of Appeals. Therefore, because the federal court had diversity jurisdiction over the case, its role was "to anticipate how [Maryland's highest court] would rule on this question."

The appellee contended that this exception permits courts to decline recognition of a foreign judgment if the dispute should not have been litigated at all under the terms of an arbitration clause. The Fourth Circuit found this argument to be overly broad. The court did not believe the state legislature would have intended for courts to enforce contractual rights the parties had waived or resolved in front of a foreign court. The Fourth Circuit had not addressed this issue before, but those courts that had considered similar provisions recognized that parties may waive such exceptions. Furthermore, the parallel federal act on recognition of foreign judgments, largely adopted by Maryland in creating the act at issue herein, allowed for either express or implied waiver of out-of-court remedies. The Fourth Circuit also found that appellee's argument was at odds with Maryland's common law of contracts, in which arbitration clauses can be waived the same as any other contractual right. Finally, the Fourth Circuit felt that appellee's arguments would frustrate the purpose of the Maryland Recognition Act, specifically international comity and mutual recognition of foreign judgments.

Therefore, the Fourth Circuit held that "judicial proceedings in a foreign court are not 'contrary to' an arbitration clause for the purposes of the Maryland Recognition Act if the parties choose to forego their rights to arbitrate by participating in those proceedings." In that event, the Fourth Circuit held that the exception invoked by the appellee simply would not apply.

With that new rule in mind, the Fourth Circuit considered whether the appellant had raised genuine issues of material fact on the issue of appellee's waiver of his arbitration rights. In this instance, waiver occurred only if appellee "so substantially utilize[d] the litigation machinery that to subsequently permit arbitration would prejudice" the appellant. Appellee did not dispute that appellant would lose entitlement to recover on a $2 million judgment if the appellee were allowed to assert the right to arbitrate.

The Fourth Circuit found that the appellant introduced sufficient evidence to preclude summary judgment. Specifically, the appellant showed that the appellee was aware of the right to arbitrate, as he had raised it in defense of the first lawsuit in Maryland, but still voluntarily litigated the dispute in Iraq. Both sides introduced conflicting evidence as to whether the issue of the arbitration clause was ever raised as a defense in the Iraqi court proceedings. Consequently, the Fourth Circuit found there were still genuine issues of material fact as to whether the appellee waived his right to arbitrate. Therefore, the appellee was not entitled to summary judgment and that grant was vacated, with the case remanded to the district court to resolve the factual questions still at issue in the case.

To read full opinion, click here.

Panel: Judges Wilkinson, Motz, and Floyd

Argument Date: 12/7/2016

Date of Issued Opinion: 2/2/2017

Docket Number: No. 16-1403

Decided: Vacated and remanded by published opinion

Case Alert Author: Patrick J.L. Dillon, Univ. of Maryland Carey School of Law

Counsel: ARGUED: D. Michelle Douglas, KALBIAN & HAGERTY, LLP, Washington, D.C., for Appellant. Mukti N. Patel, FISHERBROYLES LLP, Princeton, New Jersey, for Appellees. ON BRIEF: Haig V. Kalbian, KALBIAN & HAGERTY, LLP, Washington, D.C., for Appellant.

Author of Opinion: Judge Motz

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/14/2017 01:20 PM     4th Circuit     Comments (0)  

  United States v. Dozier -- Fourth Circuit
Fourth Circuit Joins Ninth Circuit in Adopting Two-Step Analysis to Find General Attempt Conviction Constitutes Controlled Substance Offense under Sentencing Guidelines

Areas of Law: Criminal Law, Sentencing Guidelines

Issue Presented: Whether a defendant's prior conviction for attempt to distribute a controlled substance under West Virginia law constitutes a "controlled substance offense" under U.S.S.G. § 4B1.2 for purposes of the career offender sentencing enhancement.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that the District Court erred in applying the modified categorical approach to determine whether the defendant's prior attempt conviction constituted a "controlled substance offense" for purposes of career offender sentencing. The Fourth Circuit explained that, under the categorical approach required by the U.S. Supreme Court in Mathis, a court must engage in two analyses: first, a court must determine whether the state's definition of "attempt" categorically comports with the generic definition of "attempt" as that term is used in the career-offender enhancement. Second, a court must determine whether the underlying state offense is a categorical match for the Guideline predicate offense. Applying this analysis, the Fourth Circuit nevertheless found that the District Court correctly concluded that the defendant's prior attempt conviction constituted a "controlled substance offense." Therefore, the Fourth Circuit affirmed the District Court's judgment.

Extended Summary: In 2015, Deshawn Dozier was charged with knowingly and intentionally distributing cocaine in violation of federal law. After Dozier entered his guilty plea, the probation officer provided the District Court with a presentence investigation report ("PSIR"), which recommended in part a career offender enhancement.

Dozier was designated a career offender due to two prior state convictions, which were categorized as "controlled substance offenses" under § 4B1.2 of the U.S. Sentencing Guidelines. Under § 4B1.2, a "controlled substance offense" includes the "attempt[] to commit such [an] offense[]." Dozier's second state conviction was a conviction for attempt to distribute a controlled substance under West Virginia law. Dozier objected to the categorization of his second conviction and his resulting career offender status. The District Court overruled Dozier's objection, holding that Dozier's attempt conviction constituted a "controlled substance offense" under a modified categorical approach. Thus, the District Court adopted the PSR's recommendation and imposed a sentence of 151-month imprisonment.

The Fourth Circuit first found that the District Court erred in applying the modified categorical approach to the West Virginia general attempt statute, reasoning that the statute is not divisible. Nevertheless, the Fourth Circuit held that the District Court correctly concluded that Dozier's prior attempt conviction constituted a "controlled substance offense" after analyzing the case under the proper categorical approach.

Citing United States v. Cabrera-Umanzor, 728 F.3d 347, 350 (4th Cir. 2013), Taylor v. United States, 495 U.S. 575, 602 (1990), and Mathis v. United States, 136 S. Ct. 2243, 2246 (2016), the Fourth Circuit explained that, when addressing whether a prior conviction triggers a Sentencing Guideline enhancement, the categorical approach focuses on the elements of the prior offense. For a prior conviction to qualify as a Guideline predicate offense, "the elements of the prior offense [must] 'correspond[] in substance' to the elements of the enumerated offense." Citing the Ninth Circuit decision in Rebilas v. Mukasey, 527 F.3d 783, 787 (9th Cir. 2007), the Fourth Circuit found that because Dozier was convicted under West Virginia's general attempt statute two sets of elements were at issue: the elements of attempt and the elements of the underlying attempted controlled substance offense.

Citing two Ninth Circuit decisions United States v. Gomez-Hernandez, 680 F.3d 1171, 1175 (9th Cir. 2012), and United States v. Gonzalez-Monterroso, 745 F.3d 1237, 1240 (9th Cir. 2014), the Fourth Circuit held that a court must engage in two related analyses to adhere to the "elements-only inquiry" required by Mathis. First, a court must determine whether the state's definition of "attempt" categorically comports with the generic definition of "attempt" as that term is used in the career-offender enhancement. Second, a court must determine whether the underlying state offense is a categorical match for the Guideline predicate offense.

First, the Fourth Circuit held that, under the Taylor categorical approach, West Virginia's attempt statute is a categorical match for the generic definition of "attempt." The Fourth Circuit's precedent defines "generic attempt" as requiring (1) culpable intent to commit the crime charged and (2) a substantial step towards the completion of the crime. West Virginia criminal law defines attempt as requiring "(1) a specific intent to commit the underlying substantive crime; and (2) an overt act toward the commission of that crime, which falls short of completing the underlying crime." After comparison, the Fourth Circuit found that the degree of intent required under West Virginia's general attempt statute is no broader than that required under the generic definition. The Fourth Circuit also found that the definition of an overt act under West Virginia law "corresponds in substance" to the generic definition of a substantial act.

Second, the Fourth Circuit held that the underlying offense is a categorical match for a generic "controlled substance offense." U.S.S.G. § 4B1.2(b) provides that a controlled substance offense is an offense that "prohibits the manufacture, import, export, distribution, or dispensing of a controlled substance (or a counterfeit substance) or the possession of a controlled substance (or a counterfeit substance) with intent to manufacture, import, export, distribute, or dispense." The underlying statutory offense at issue, West Virginia Code § 60A-4-401, provides "it is unlawful for any person to manufacture, deliver, or possess with intent to manufacture or deliver, a controlled substance." Accordingly, the Fourth Circuit found the act and related intent elements of § 60A-4-401(a) are no broader than those of the generic offense. In addition, both the controlled substance offense and Dozier's underlying attempted offense, i.e., distributing cocaine, are felonies punishable by imprisonment for a term exceeding one year.

Therefore, the Fourth Circuit concluded that Dozier's prior attempt conviction qualifies as a controlled substance offense, and Dozier was properly deemed a career offender under the Sentencing Guidelines. As a result, the Fourth Circuit affirmed the District Court's judgment.

To read the full opinion, click here.

Panel: Judges Shedd and Keenan, and Senior Judge Davis

Argument Date: 10/27/2016

Date of Issued Opinion: 01/30/2017

Docket Number: No. 15-4532

Decided: Affirmed by published opinion.

Case Alert Author: Maria Nazarova, Univ. of Maryland Carey School of Law

Counsel: Jonathan D. Byrne, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Charleston, West Virginia, for Appellant. Miller A. Bushong, III, OFFICE OF THE UNITED STATES ATTORNEY, Beckley, West Virginia, for Appellee. ON BRIEF: Christian M. Capece, Federal Public Defender, Rachel E. Zimarowski, Assistant Federal Public Defender, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Charleston, West Virginia, for Appellant. Carol A. Casto, Acting United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Charleston, West Virginia, for Appellee.

Author of Opinion: Senior Judge Davis

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/14/2017 12:58 PM     4th Circuit     Comments (0)  

  Sijapati v. Boente -- Fourth Circuit
Removability Statute: 5-Year Clock Resets Every Time a Non-Immigrant Leaves the United States

Areas of Law: Criminal Law, Immigration Law

Issue Presented: Whether the Fourth Circuit should accord Chevron deference to the Board of Immigration Appeals' interpretation of "the date of admission" under 8 U.S.C. § 1227(a)(2)(A)(i)(I) in Matter of Alyazji.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that the Board of Immigration Appeals' interpretation of "the date of admission" in Matter of Alyazji is entitled to Chevron deference. In Alyazji, "the date of admission" under 8 U.S.C. § 1227(a)(2)(A)(i)(I) was construed as the date of admission "by virtue of which an alien was in the United States at the time that he committed the crime involving moral turpitude." Thus, the Fourth Circuit found that the petitioner's second admission date was "the date of admission" for purposes of determining his removability. The Fourth Circuit affirmed the Board of Immigration Appeals' order.

Extended Summary: Ashish Sijapati, a native of Nepal, was admitted to the United States on a non-immigrant L-2 visa on January 25, 2001. On December 31, 2002, Sijapati departed the United States for a two-and-a-half-week vacation to Nepal. On January 18, 2003, Sijapati reentered the United States pursuant to his existing L-2 visa. On December 12, 2007, a circuit court in Virginia convicted Sijapati of felony embezzlement and imposed an eighteen-month suspended sentence.

Following Sijapati's conviction, the Department of Homeland Security ("DHS") instituted removal proceedings against Sijapati under 8 U.S.C. § 1227(a)(2)(A)(i)(I), alleging that Sijapati had been convicted of a crime involving moral turpitude within five years of the date of his admission. Sijapati filed a motion to terminate the removal proceedings against him, arguing that his embezzlement conviction did not render him removable.

The immigration court denied Sijapati's motion. The immigration court found that the Board of Immigration Appeals' ("BIA") decision in Matter of Alyazji controlled the determination of Sijapati's date of admission. In Alyazji, the BIA construed "the date of admission" as the date of "admission pursuant to which the alien was in the United States at the time that he committed the crime involving moral turpitude." Thus, the immigration court found that Sijapati's admission on January 18, 2003 was the date of admission for purposes of the statute. Accordingly, the immigration court declined to terminate Sijapati's removal proceedings but ordered that he be granted voluntary departure in lieu of removal. Sijapati appealed to the BIA, which, in its unpublished decision, affirmed the immigration court's determination. Sijapati then petitioned the Fourth Circuit for review of the BIA's order.

The Fourth Circuit denied the petition and affirmed the BIA's decision. According to Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 844 (1984), the BIA's interpretation of an ambiguous provision in the Immigration and Nationality Act ("INA") "must be given controlling weight unless th[at] interpretation[] [is] 'arbitrary, capricious, or manifestly contrary to the statute.'" ("Chevron deference"). However, because Chevron deference "is accorded only when an 'agency's interpretation is rendered in the exercise of [its] authority [to make rules carrying the force of law],'" the Fourth Circuit could not defer to the BIA's unpublished decision denying Sijapati's relief. Nevertheless, according to Hernandez v. Holder, 783 F.3d 189, 192 (4th Cir. 2015), when an unpublished decision lacking precedential weight relies on a precedential decision to which Chevron deference can apply that precedential decision controls "to the extent that 'Congress has not directly addressed the precise question at issue' and 'the [BIA]'s answer is based on a permissible construction of the statute.'"

Thus, to determine whether Alyazji's construction of "the date of admission" was entitled to deference, the Fourth Circuit applied this two-step inquiry. First, the court considered "whether Congress has directly spoken to the precise question at issue." If Congress' intent is clear, the court's inquiry comes to an end. If the statute is silent or ambiguous as to the specific issue, the court must then determine "whether the agency's answer is based on a permissible construction of the statute."

First, the Fourth Circuit held that the phrase "the date of admission" is ambiguous. Citing Ojo v. Lynch, 813 F.3d 533, 539 (4th Cir. 2016), the Fourth Circuit explained that when conducting the first inquiry, a court focuses "purely on statutory construction without according any weight to the agency's position." After looking at the plain language of the statute, the Fourth Circuit found that the INA is silent as to which admission should be used in determining an alien's removability under 8 U.S.C. § 1227(a)(2)(A)(i)(I), in the event an alien has multiple admissions, like Sijapati.

The Fourth Circuit continued to the second inquiry - whether Alyazji reasonably interpreted the meaning of "the date of admission." In Alyazji, concentrating on the statutory provision's "focus[] on admission plus presence," the BIA concluded that "the most natural reading of section 237(a)(2)(A)(i) is that the phrase 'the date of admission' refers to the date of admission by virtue of which the alien was present in the United States when he committed his crime." The Fourth Circuit found that Alyazji's construction was not arbitrary, capricious, or manifestly contrary to the statute for three reasons. First, the BIA followed the normal principles of statutory construction, considering the statute's "overall design" and "the language of the [moral turpitude] provision itself." Second, the BIA explained how its interpretation was informed by its own precedent and judicial constructions of the statute. Third, the BIA reasonably concluded that an alternative construction - treating the date of an alien's first admission as "the date of admission" - "is not reconcilable with the language and purpose of the statute."

In conclusion, the Fourth Circuit held that the BIA's interpretation of "the date of admission" in Alyazji was entitled to Chevron deference. The court concluded that Sijapati's second admission date (January 18, 2003) was the date of admission, and therefore he committed a crime involving moral turpitude within five years of his admission.

To read the full opinion, click here.

Panel: Judges Traxler, Keenan, and Wynn

Argument Date: 10/25/2016

Date of Issued Opinion: 02/01/2017

Docket Number: No. 15-1204, No. 15-1804

Decided: Petitions for review denied by published opinion

Case Alert Author: Ziyi He, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Benjamin Winograd, IMMIGRANT & REFUGEE APPELLATE CENTER, LLC, Alexandria, Virginia, for Petitioner. Laura Halliday Hickein, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent. ON BRIEF: Irina Manelis, DYER IMMIGRATION LAW GROUP, P.C., Henrico, Virginia, for Petitioner. Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Shelley R. Goad, Assistant Director, Office of Immigration Litigation, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent

Author of Opinion: Circuit Judge Wynn

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/14/2017 12:38 PM     4th Circuit     Comments (0)  

  Birmingham v. PNC Bank -- Fourth Circuit
Homeowner Underwater and Out of Luck

Areas of Law: Bankruptcy Law, Statutory Interpretation

Issue Presented: Whether reference in the deed of trust to escrow funds, insurance proceeds, and miscellaneous proceeds constituted additional collateral for purposes of 11 U.S.C. § 1322(b)(2) such that the creditor was not entitled to protection against claim being crammed down.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held that the district court did not err in affirming the bankruptcy court's determination that PNC Bank, the creditor, was entitled to protection from having its claim crammed down. The Fourth Circuit found that PNC Bank's loan was secured solely by debtor Birmingham's principal residence, and not by any additional collateral. Therefore, PNC Bank was entitled to 11 U.S.C. § 1322(b)(2)'s anti-modification protection of its claim against Birmingham.

Extended Summary: On May 23, 2014, Gregory Birmingham filed a voluntary petition for Chapter 13 bankruptcy. PNC Bank had a claim against Birmingham for a mortgage in the amount of $343,101.87, which was secured by a deed of trust on Birmingham's primary residence in Beltsville, Maryland. Birmingham was in arrears on his mortgage in the amount of $93,386.58. Birmingham filed his Original Chapter 13 Bankruptcy Plan on June 4, 2014. The plan included a cram-down (or modification) of PNC's interest in the property. A cram-down occurs when the principal balance of a debt is reduced to the value of the property securing the debt. At that time, Birmingham's property was valued at $206,400.

The anti-modification provision in the bankruptcy code protects a secured creditor from having its claim in a Chapter 13 bankruptcy proceeding modified. Birmingham sought to avoid application of this provision with regard to the debt he owed PNC. In particular, Birmingham filed a Complaint for Declaratory Action requesting that PNC's claim be treated as a partially unsecured claim subject to modification. He argued that certain provisions of the Deed of Trust ("Provisions") required collateral other than real property, which would remove the claim from 11 U.S.C. § 1322(b)(2)'s anti-modification protection. PNC filed a motion to dismiss contending that the items referred to in the Deed of Trust constituted incidental property, which was a part of Birmingham's principal residence. Therefore, PNC argued that the additional items did not expose the PNC mortgage to a cram-down. The bankruptcy court granted PNC's motion, noting that arguments identical to Birmingham's had been repeatedly denied by the bankruptcy court. Birmingham appealed to the United States District Court for the District of Maryland. The District Court affirmed the bankruptcy court's determination, holding that the Provisions were benefits that were "merely incidental" to the interest in real property and were not additional security for purposes of § 1322(b)(2). Birmingham then appealed to the Fourth Circuit.

The Fourth Circuit held that the district court properly affirmed the bankruptcy court's determination that PNC Bank was entitled to the protection of the anti-modification provisions of § 1322(b)(2) because the Provisions of the Deed of Trust were incidental property.

The court first analyzed the relevant statutory provisions. It noted that under Chapter 13, debtors may obtain adjustment of their debt through flexible repayment plans approved by a bankruptcy court. The adjustment of a debtor's debt depends on two statutory provisions, 11 U.S.C. § 506(a) and 11 U.S.C. § 1322(b)(2). Under § 506(a), a secured creditor's claim can be modified, or bifurcated, into secured and unsecured portions when the claim exceeds the value of the secured property. However, relying on the Supreme Court precedent Nobelman v. Am. Sav. Bank., 508 U.S. 324 (1993), the Fourth Circuit noted that a debtor's debt cannot be modified if the mortgage is secured "only by a security interest in real property that is the debtor's principal residence." The court looked to the Bankruptcy Code for the definition of "debtor's principal residence," which is "a residential structure if used as the principal residence by the debtor, including incidental property, without regard to whether that structure is attached to real property." Additionally, it defined "incidental property" as including "escrow funds" and "insurance proceeds."

Furthermore, the Fourth Circuit pointed to several cases from sister circuits, which held that the insurance and other items mentioned in the Provisions were only incidental property and did not create additional security in the property. For example, in Allied Credit Corp v. Davis, 989 F.2d 208 (6th Cir. 1993), the Sixth Circuit found that certain items that are inextricably bound to the real property itself as "part of the possessory bundle of rights" do not extend a lender's security beyond the real property. The Fourth Circuit found this reasoning persuasive as it applied to the provisions involving the escrow items, property insurance proceeds and miscellaneous proceeds. Therefore, the court found the Deed of Trust on Birmingham's property was secured only by real property that was his principal residence. Therefore, the Fourth Circuit affirmed the District Court's judgment.

To read the full opinion, click here.

Panel: Judges Thacker and Harris, and District Judge Lee

Argument Date: 10/26/2016

Date of Issued Opinion: 01/18/2017

Docket Number: 15-1800

Decided: Affirmed by published opinion.

Case Alert Author: Lauren Harrison, Univ. of Maryland Carey School of Law

Counsel: ARGUED: John Douglas Burns, THE BURNS LAW FIRM, LLC, Greenbelt, Maryland, for Appellant. Daniel J. Tobin, BALLARD SPAHR LLP, Washington, D.C., for Appellee. ON BRIEF: Bryan J. Harrison, Matthew G. Summers, BALLARD SPAHR LLP, Baltimore, Maryland, for Appellee.

Author of Opinion: District Judge Lee

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/14/2017 12:22 PM     4th Circuit     Comments (0)  

  Hall v. Direct TV,LLC -- Fourth Circuit
DIRECTV Cannot Escape Claims that It Underpaid Employees

Areas of Law: Employment Law; Civil Procedure

Issue Presented: Whether the district court erred in finding that the Plaintiffs' claims should be dismissed because they did not sufficiently allege that the Defendants jointly employed them for purposes of the Fair Labor Standards Act ("FLSA").

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit reversed the district court's decision to dismiss the Plaintiffs' complaint. The court held that the Plaintiffs (who were satellite television technicians) adequately stated a claim under the FLSA because they sufficiently alleged the Defendants were jointly their employers and that they were employees, and not independent contractors of the Defendants.

Extended Summary: DIRECTV is the nation's largest satellite television provider and uses thousands of technicians to install and repair its satellite systems. DIRECTV manages the technicians through its "Provider Network." This network is organized as a pyramid in which DIRECTV contracts with home and secondary service providers who then contract with subcontractors. These subcontractors contract directly with the individual technicians. DirectSat was a home service provider in DIRECTV's network at the time of the filing of the relevant complaint. DirectSat was the middleman between DIRECTV and individual technicians. DirectSat implemented DIRECTV's hiring criteria, relayed DIRECTV's scheduling to the technicians using DIRECTV's work-assignment system, and supervised the technicians. DirectSat also maintained personnel files that were audited and regulated by DIRECTV. Additionally, DIRECTV required technicians to use DIRECTV equipment and attend DIRECTV training at Directsat facilities.

Between 2007 and 2014, each Plaintiff worked as a technician for DirectSat DIRECTV, or one of the other entities in the DIRECTV pyramid. Plaintiffs principal duty was to install and repair DIRECTV equipment. During their periods of employment, each Plaintiff was classified by their employer(s) as an independent contractor. The Plaintiffs alleged that DIRECTV directed and controlled Plaintiffs' work. For example, DIRECTV was the primary, if not the only client of each of the providers who served as the Plaintiffs' direct employers. Additionally, the Plaintiffs were required to wear DIRECTV gear, carry DIRECTV ID cards, and display the DIRECTV logo on their cars. DIRECTV also exercised quality control over each technician's work and controlled compensation. Finally, DIRECTV was allowed to terminate technicians by not assigning them work assignments through the work assignment system.

The Plaintiffs claimed they regularly worked in excess of forty hours per week, but were not paid overtime while they were DIRECTV technicians. So, the Plaintiffs filed various lawsuits in several jurisdictions, which were then consolidated. The Plaintiff's allege that the Defendants (DIRECTV and DirectSat) were their joint employers during the relevant period and that the Defendants' failure to pay overtime for the additional hours violated the overtime and minimum wage requirements of the Fair Labor Standards Act (FLSA). Additionally, the Plaintiffs brought claims under several Maryland wage statutes. The Defendants each moved to dismiss the Plaintiffs' Complaint, which was granted by the district court. The district court found that since the Plaintiffs did not allege that DIRECTV directly hired or fired them or controlled their compensation, the complaint did not allege facts that were sufficient to show DIRECTV was a joint employer. Additionally, the court concluded that the claims under the Maryland wage and labor statutes also failed. The Plaintiffs appealed the district court's dismissal.

The Fourth Circuit reversed the district court's decision finding that the Plaintiffs' allegations demonstrated that DIRECTV and DirectSat both jointly employed the Plaintiffs. The Fourth Circuit found that the district court (1) applied the improper legal test for determining whether entities are joint employers under the FLSA, and (2) misapplied the plausibility standard from Twombly and Iqbal. First, the court found that the district court incorrectly concluded that a worker must be an employee, as opposed to an independent contractor, of each joint employer for the entities to even be considered joint employers. Additionally, the Fourth Circuit found the district court improperly relied on Bonnette v. California, 704 F.2d 1465 (9th Cir. 1983), to determine whether the Defendants jointly employed the Plaintiffs.

The Fourth Circuit concluded that the correct inquiry involved two steps: (1) considering whether the Defendant and one or more additional entities shared, agreed to allocate responsibility for, or otherwise co-determined the key terms of the Plaintiffs' work; and (2) considering whether the worker was an employee or independent contractor by looking to the entire agreement as one agreement. Additionally, the Fourth Circuit concluded that Bonnette was not the correct test for determining whether two employers are joint employers. Instead, the 6-factor test announced in Salinas v. Commercial Interiors Inc., No. 15-1915, slip op. (argued Oct. 27, 2016), is the correct test for making the joint employment determination. Therefore, the court erred in granting the motion to dismiss.

Even with this determination, the Fourth Circuit had to consider whether the Plaintiffs' allegations were sufficient to state a plausible FLSA joint employment claim against the Defendants. The court found that the Plaintiffs stated plausible claims that DIRECTV and DirectSat were their joint employers because they alleged sufficiently that the companies codetermined the key terms and conditions of Plaintiffs' employment. Additionally, the court found that Plaintiffs were employees within the meaning of the FLSA. The court looked to the six factors from United States v. Silk in making this determination. It found that the Plaintiffs sufficiently alleged they were economically dependent on the Defendants while they were technicians.

Finally, the court considered the Defendants contention that the district court's determination should be affirmed because the Plaintiffs did not adequately "articulate a sufficiently detailed accounting of the number of uncompensated hours they worked during their respective periods of employment" to state a claim for unpaid overtime under the FLSA. The court noted that some courts have a strict standard and others have a more lenient standard in determining the sufficiency of the Plaintiffs accounting of their hours. Under the lenient standard, the Plaintiffs just need to state that they worked 40 hours and some additional hours, which they were not compensated for. The Fourth Circuit adopted the lenient standard in which "a plaintiff must provide sufficient factual allegations to support a reasonable inference that he or she worked more than forty hours in at least one workweek and that his or her employer failed to pay the requisite overtime premium for those over time hours." Additionally, the court carefully noted that plaintiffs do not have to specify the weeks, they just have to move the claim from conceivable to plausible. In this case, the Plaintiff's allegations provided a sufficient basis to support the reasonable inference that they were uncompensated for overtime hours while they were DIRECTV technicians.

To read the full opinion, click here.

Panel: Judges Wynn, Floyd, and Harris

Argument Date: 10/27/2016

Date of Issued Opinion: 01/25/2017

Docket Number: 15-1857

Decided: Reversed and remanded by published opinion.

Case Alert Author: Lauren Harrison, Univ. of Maryland Carey School of Law

Counsel: Larkin E. Walsh, STUEVE SIEGEL HANSON LLP, Kansas City, Missouri, for Appellants. Colin David Dougherty, FOX ROTHSCHILD LLP, Blue Bell, Pennsylvania, for Appellees. ON BRIEF: George A. Hanson, Kansas City, Missouri, Ryan D. O'Dell, STUEVE SIEGEL HANSON LLP, San Diego, 3 California, for Appellants. Nicholas T. Solosky, FOX ROTHSCHILD LLP, Washington, D.C., for Appellees.

Author of Opinion: Circuit Judge Wynn

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/14/2017 12:10 PM     4th Circuit     Comments (0)  

  Salinas v. Commercial Interiors Inc. -- Fourth Circuit
Who's the Boss? New Test to Determine Joint Employment under the Fair Labor Standards Act

Areas of Law: Employment Law

Issue Presented: Whether a worker is jointly employed for the purposes of determining liability under the employer's FLSA obligations.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit reversed the district court's judgment granting the defendant's motion for summary judgment, and ruled that the defendants jointly employed the plaintiffs. Relying on a newly announced six-factor test that focuses on whether employers "share[d] or codetermined the essential terms and conditions of employment," the Fourth Circuit held that the defendants did jointly employee the plaintiffs for the purposes of determining liability under the employers FLSA obligations.

Extended Summary: The plaintiffs sued JI General Contractor Inc. ("JI") and Commercial Interior Inc. ("Commercial") for unpaid wages in violation of the Fair Labor Standards Act ("FLSA"), Maryland Wage and Hour Law, and the Maryland Wage Payment and Collection Law. The complaint alleged that Commercial and JI (1) jointly employed the plaintiffs, and (2) were jointly and severally liable.

The district court granted Commercial's motion for summary judgment and held that JI was the plaintiffs' sole employer because Commercial and JI entered into a legitimate contractor-subcontractor agreement. On appeal to the Fourth Circuit, the plaintiffs argued that the district court did not properly conform to the FLSA definition of "employ," "employee," and "employer;" and improperly limited joint employment. On appeal, the United States Court of Appeals for the Fourth Circuit reversed the district court's award of summary judgment.

In reversing the lower court, the Fourth Circuit reaffirmed that for the purposes of determining FLSA liability the business agreement is not important. For the purposes of determining joint employment and liability, the court first looks at whether two entities agree to allocate responsibility or codetermine the terms and conditions of the worker's employment. Next, the court must consider whether the two entities combined influence over the terms and conditions of the worker's employment makes the worker an employee.

The Fourth Circuit noted that while JI formally employed the plaintiffs, Commercial supervised the plaintiffs on the job site and maintained JI employee's time sheets. Additionally, before working, Commercial required JI employees to attend daily meetings where Commercial employees gave workers instructions while JI supervisors translated the instructions from English to Spanish. While working, JI employee used tools and materials owned and issued by Commercial bearing Commercial's logo while being directly supervised by Commercial employees. Finally, Commercial employees threatened to fire JI employees for substandard work, and during certain projects JI workers worked directly for Commercial and were issued pay checks from Commercial.

In determining whether a relationship between two corporate entities exists to determine FLSA obligations, the Fourth Circuit first looked to the Department of Labor regulations distinguishing "separate and distinct employment" from "joint employment." The regulations define separate employment as two or more employers that act entirely independently and may disregard all work performed by workers for another employee. The regulation defines joint employment as employment where the employment by one employer is not completely disassociated from employment by the other employer.

Relying on these regulations, the Fourth Circuit created a test to determine if employers "share or codetermine the essential terms and conditions" of employment, instead of relying on the test from other circuits that focuses on the economic relationship between the employers. To determine whether two entities constitutes joint employers for the purposes of FLSA, the Fourth Circuit held that courts should consider the following factors:

(1) Whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate the power to direct, control, or supervise the worker, whether by direct or indirect means; (2) Whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate the power to - directly or indirectly - hire or fire the worker or modify the terms or conditions of the worker's employment; (3) The degree of permanency and duration of the relationship between the putative joint employers; (4) Whether, through shared management or a direct or indirect ownership interest, one putative joint employer controls, is controlled by, or is under common control with the other putative joint employer;(5) Whether the work is performed on a premises owned or controlled by one or more of the putative joint employers, independently or in connection with one another; and (6) Whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate responsibility over functions ordinarily carried out by an employer, such as handling payroll; providing workers' compensation insurance; paying payroll taxes; or providing the facilities, equipment, tools, or materials necessary to complete the work.

In announcing the new test the Fourth Circuit cautioned that the factors are not exhaustive and the ultimate determination of joint employment must be based on the circumstances of the whole activity.

Using the factors in the new test, the Fourth Circuit held that the plaintiffs were jointly employed by both JI and Commercial. In applying the first and second factors, the court found that Commercial and JI jointly supervised and controlled the plaintiffs. Under the third and fourth factors, the court recognized that while Commercial did not own JI, most of JI's work came directly from Commercial. When JI did take work from another general contractor it was because Commercial did not have work for JI. Finally, the court held that the final factor supported the fact that JI and Commercial jointly employed the plaintiffs because Commercial supplied JI works with the tools, materials, and equipment necessary to work.

To read the full opinion, click here.

Panel: Judges Wynn, Floyd, and Harris

Argument Date: 10/27/2016

Date of Issued Opinion: 01/25/2017

Docket Numbers: No. 15-1915

Decided: Reversed by published opinion

Case Alert Author: Fernando Kirkman, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Sally Jean Dworak-Fisher, PUBLIC JUSTICE CENTER, Baltimore, Maryland, for Appellants. Michael J. Jack, LAW OFFICES OF MICHAEL J. JACK, Marriottsville, Maryland, for Appellee. Dean Romhilt, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Amicus Secretary of Labor. ON BRIEF: Darin M. Dalmat, Kathy L. Krieger, JAMES & HOFFMAN, P.C., Washington, D.C., for Appellants. M. Patricia Smith, Solicitor of Labor, Jennifer S. Brand, Associate Solicitor, Paul L. Frieden, Counsel for Appellate Litigation, Office of the Solicitor, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Amicus Secretary of Labor. Brian J. Petruska, LIUNA MID ATLANTIC REGIONAL ORGANIZING COALITION, Reston, Virginia; Catherine K. Ruckelshaus, NATIONAL EMPLOYMENT LAW PROJECT, INC., New York, New York, for Amici National Employment Law Project, Laborers' International Union of North America Mid-Atlantic Regional Organizing Coalition, and Centro De Los Derechos Del Migrantes.

Author of Opinion: Judge Wynn

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/14/2017 11:03 AM     4th Circuit     Comments (0)  

  Verisign, Inc. v. XYZ.com LLC, et al. -- Fourth Circuit
Dueling Domain Operator Falls Short of Proving Lanham Act Claim

Areas of Law: Lanham Act

Issue Presented: Whether the appellees violated the Lanham Act's prohibition against false advertising by promoting their product as "the next .com" and by criticizing their competitor's product through subjective language.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit affirmed the District Court's award of summary judgment to appellees XYZ.com, LLC and Daniel Negari in a false advertising action brought by Verisign, Inc. under the Lanham Act.

Extended Summary: This case arose out of a false advertising action under the Lanham Act. Appellant Verisign, Inc. ("Verisign") is the exclusive operator of .com. and .net top-level domains. In 2014, after the Internet Corporation for Assigned Names and Numbers ("ICANN") approved the introduction of new top-level domains into the market, appellee XYZ.com, LLC ("XYZ") launched the .xyz domain. To promote the domain, XYZ and its CEO Daniel Negari ("Negari") made statements within two broad categories. First, XYZ made self-promotional statements about its registration numbers and popularity, including that XYZ secured over one million registrations and that .xyz was "the next .com." Second, XYZ made allegedly disparaging statements about Verisign's .com domain by declaring that it is "impossible to find the domain name that you want" and that "[a]ll of the good real estate is taken" except for "only . . . something with a dash or maybe three dashes and a couple numbers in it."

Verisign filed suit against XYZ and Negari alleging that appellees' statements violated the Lanham Act. To prevail on a false advertising claim under the Lanham Act, a plaintiff must show: (1) the defendant made a false or misleading representation of fact in a commercial advertisement; (2) the misrepresentation is material and likely to influence a consumer's decision; (3) the misrepresentation deceives or tends to deceive a substantial portion of the audience; (4) the defendant placed the misrepresentation in interstate commerce; and (5) the plaintiff suffered or is likely to suffer an injury by diversion of sales or lessening of goodwill.

Verisign contended that XYZ misrepresented actual consumer demand for the .xyz domain through its self-promotional statements and that XYZ made falsely disparaging statements about the .com domain. To support its claim, Verisign conducted a survey to test consumers' reactions to XYZ's statements. Verisign argued that it suffered approximately $527,000 in lost profits due to diverted sales, relying on an expert's testimony that she multiplied Verisign's lost profits by XYZ's market share at the time of the challenged statements. The District Court granted summary judgment to XYZ and Negari.

On appeal, the Fourth Circuit affirmed the District Court's judgment on the basis that Verisign failed to demonstrate that appellees' statements violated the Lanham Act. With respect to XYZ's self-promotional statements, the Fourth Circuit concluded that Verisign failed to prove that it suffered an injury caused by the challenged statements. Verisign's expert testimony proved only a temporal link between XYZ's statements and Verisign's lost profits, rather than the causal link required by the Lanham Act.

Turning to XYZ's allegedly disparaging statements, the Fourth Circuit held that the challenged statements did not constitute false or misleading factual statements, as required by the first element of a Lanham Act claim. Citing the Eighth Circuit's decision in American Italian Pasta Co. v. New World Pasta Co., 371 F.3d 387 (8th Cir. 2004), the Fourth Circuit reasoned that XYZ's statements concerning the availability of desirable .com names constituted mere opinion or puffery and therefore did not violate the Lanham Act. Specifically, XYZ's claim that it is "impossible to find the domain name that you want" was not verifiable due to the indefinite nature of "you." The Fourth Circuit also extended its reasoning to Negari's statements that "[a]ll of the good real estate is taken" and that the "only thing that's left is something with a dash." The Fourth Circuit emphasized that "good" constituted a subjective opinion and that "only" resembled a colloquial exaggeration upon which no reasonable consumer would rely. The Fourth Circuit therefore affirmed the District Court's award of summary judgment to XYZ and Negari.

To read the full opinion, click here.

Panel: Judges Wynn, Floyd, and Harris

Argument Date: 10/27/2016

Date of Issued Opinion: 02/08/2017

Docket Numbers: No. 15-2526

Decided: Affirmed by published opinion

Case Alert Author: Linda Morris, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Lisa Schiavo Blatt, ARNOLD & PORTER LLP, Washington, D.C., for Appellant. Derek Alan Newman, NEWMAN DU WORS LLP, Seattle, Washington, for Appellees. ON BRIEF: Ronald L. Johnston, Los Angeles, California, Robert N. Weiner, Robert A. DeRise, Elisabeth S. Theodore, ARNOLD & PORTER LLP, Washington, D.C., for Appellant.

Author of Opinion: Judge Harris

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/14/2017 10:48 AM     4th Circuit     Comments (0)  

  Smith v. Munday -- Fourth Circuit
A Case of Mistaken Identity: 4th Circuit Rules No Evidence, No Probable Cause

Areas of Law: Constitutional Law, Fourth Amendment, and Qualified Immunity

Issues Presented: 1) Whether investigating officers had probable cause to arrest appellant and 2) whether the arresting officer was entitled to qualified immunity.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that Officer Jason Munday's application for an arrest warrant lacked probable cause and thus violated Smith's Fourth Amendment rights. Having found that no probable cause existed for the warrant, the court determined that Officer Munday was not entitled to qualified immunity. Accordingly, the Fourth Circuit reversed the district court's ruling and remanded for further proceedings.

Extended Summary: In March 2009, investigating officers Munday and McGinley conducted an undercover investigation using a confidential informant, Rufus Lynch. The officers wired Lynch with audio and video recorders and paid him sixty dollars to engage in a drug transaction. Lynch then went to a location where he purchased crack cocaine from two individuals. After the transaction, Lynch returned to the officers and told them he had purchased the drugs from a "skinny Black female" named "April Smith." Both the audio recorder and camera failed to capture the drug transaction. Over a nine-month period following the transaction, Officer Munday scanned police databases for residents of Lincoln County with criminal records named April Smith. He eventually found a woman named April Yvette Smith, who was a Black female resident of Lincoln County and had been convicted of selling crack cocaine on three separate occasions. He also found two other "April Smiths" with criminal records. Officer Munday had no evidence that the woman who sold crack to Lynch had a criminal record, or was even a Lincoln County resident. He also did not attempt to investigate April Yvette Smith or connect her to the drug transaction. Nevertheless, Munday applied for and received an arrest warrant for Smith on charges of possession with intent to sell crack cocaine and selling or distributing cocaine. Smith was arrested in December 2009 in her home, which was eleven miles away from the site of the drug sale. Smith was held in custody for approximately eighty days until the Lincoln District Attorney's Office dropped the charges against her. Smith allegedly lost her job while in police custody.

Smith filed suit alleging, inter alia, constitutional violations of the Fourth and Fourteenth Amendments and state law claims for negligence and false arrest. The district court found no constitutional violation had occurred. The district court reasoned that the investigating officers had probable cause to believe that Smith was the woman who sold crack cocaine to Lynch because they were looking for a Black woman named April Smith who sold drugs, and found a person fitting this description only eleven miles away from where the drug sale occurred. The Fourth Circuit disagreed, stating that a criminal history, and common race, gender, and name are insufficient to establish probable cause. The court determined that Officer Munday did not have enough information for any reasonable or prudent person to believe there was probable cause. Moreover, the court reasoned, Munday had no evidence about Smith's conduct, let alone whether she was a participant in, connected to, or even physically present near the drug sale in question. All he knew was that she had previously been convicted for selling drugs, that she was a Black woman, and that she lived "near" the site of the drug sale. The court warned that finding this amount of evidence sufficient for probable cause would allow officers to obtain arrest warrants for any local residents who fit generic descriptions and have an unfortunately common name. The court distinguished this case from two previous cases with similar facts, Thompson v. Prince William County, 753 F.2d 363 (4th Cir. 1985), and Durham v, Horner, 690 F.3d 183 (4th Cir. 2012). In Thompson, the court noted, the police officer used multiple methods to establish the arrestee's identity; and in Durham, a grand jury - not the police officer - determined the existence of probable cause and found that it was the proximate cause of the arrest.

To the question of whether Munday was entitled to qualified immunity, the court determined that he was not. The court found it would be unreasonable for any officer to view Munday's dearth of evidence as sufficient to establish probable cause. Further, the court explained, had Munday carefully reflected on his warrant application, perhaps Smith would not have been incarcerated for eighty days and allegedly lost her job.

Judge Agee disagreed with the majority's finding that the arrest warrant was not supported by probable cause and that Officer Munday was not entitled to qualified immunity. He determined that reasonable minds could disagree as to whether probable cause existed, and therefore found that Munday was entitled to qualified immunity. In particular, Judge Agee disagreed with the majority's distinction between Smith's case and Durham, arguing that the two were analogous because Munday's evidence was "ample" when viewed in its totality. Moreover, Judge Agee argued the evidence in this case was stronger because, unlike in Durham, there was no contradictory evidence. Judge Agee thus concluded that the majority's holding that probable cause was lacking was erroneous. Finally, Judge Agee argued that Munday was entitled to qualified immunity because the majority failed to leave room for the "reasonable error" inherent in a qualified immunity analysis.

To read the full opinion, click here.

Panel: Gregory, Chief Judge, and King and Agee, Circuit Judges.

Argument Date: 09/20/2016

Date of Issued Opinion: 02/03/2017

Docket Number: No. 15-1496

Decided: Affirmed in part, reversed in part, and remanded by published opinion.

Case Alert Author: Yvette Pappoe, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Algernon Williams, Sr., LAW OFFICE OF ALGERNON WILLIAMS, Charlotte, North Carolina, for Appellant. Patrick Houghton Flanagan, CRANFILL SUMNER & HARTZOG LLP, Charlotte, North Carolina; Joseph Finarelli, NORTH CAROLINA DEPARTMENT OF JUSTICE, Raleigh, North Carolina, for Appellees. ON BRIEF: Matthew K. Lilly, CRANFILL SUMNER & HARTZOG LLP, Charlotte, North Carolina; Roy Cooper, North Carolina Attorney General, Donna Elizabeth Tanner, Assistant Attorney General, NORTH CAROLINA DEPARTMENT OF JUSTICE, Raleigh, North Carolina, for Appellees.

Author of Opinion: Chief Judge Gregory

Case Alert Circuit Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/14/2017 10:36 AM     4th Circuit     Comments (0)  

  Abilt v. Central Intelligence Agency -- Fourth Circuit
National Security > Disability Discrimination: Sleepy Spy Shoulders "Unfortunate Burden" in State Secrets Privilege Case

Areas of Law: Employment Law, Disability Law

Issue Presented: Whether the district court correctly applied the state secrets doctrine.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that the district court correctly applied the state secrets doctrine. The court affirmed the district court's decision to dismiss Abilt's lawsuits against the Central Intelligence Agency.

Extended Summary: In June 2006, the Central Intelligence Agency ("CIA" or the "Agency") hired Jacob E. Abilt as an Applications Developer. Abilt informed the Agency that he had narcolepsy. Abilt became a covert employee in May 2008, rendering classified many of the basic facts of his employment with the Agency, including his job responsibilities and the identities of most of his supervisors and coworkers. In early 2009, Abilt began to experience difficulty managing his narcolepsy and asked his then-supervisor for permission to take periodic naps. His then-supervisor granted this request. Around the same time, the Agency's Medical Officer cleared Abilt for a temporary-duty-yonder ("TDY") assignment to an overseas warzone. Abilt was then assigned to a new supervisor, who delayed Abilt's TDY assignment by 30 days after he saw Abilt sleeping at his desk. Over the next two years, the Agency cancelled Abilt's war zone and TDY assignments and allegedly denied him other assignments and training opportunities because of his narcolepsy. Abilt filed administrative complaints with the Equal Employment Opportunity Office ("EEOO"), alleging disability discrimination, failure to accommodate, and retaliation. The Agency rejected his claims as unsupported, and the Equal Employment Opportunity Commission affirmed. Abilt was fired in October 2011.

Abilt sued the Agency and Director John Brennan in February 2014 and again in December 2014. He presented the same claims he had alleged in his EEOO complaint, as well as a failure to accommodate claim under both Title VII of the Civil Rights Act of 1964 and the Rehabilitation Act of 1973. The Agency invoked the state secrets privilege over various information related to Abilt's employment in both suits. Under the state secrets doctrine, the government may prevent the disclosure of information in a judicial proceeding if there is a reasonable danger that such disclosure will expose military matters which, in the interest of national security, should not be divulged. The district court dismissed Abilt's claims in both suits, holding that the Agency properly invoked the privilege. The court reasoned that neither Abilt nor the Agency could make a case without disclosing privileged information.

On appeal, Abilt argued that the district court misapplied the state secrets doctrine. He also contended that the Agency could defend itself by using non-classified information. The court disagreed, finding that even if Abilt could establish a prima facie case, the Agency could not defend itself without relying on privileged information. The court relied heavily on United States v. Reynolds, 345 U.S. 1, 10 (1953), and El-Masri v. United States, 479 F.3d 296, 302 (4th Cir. 2007), which established procedural requirements for invoking the privilege and the three-step analysis for the resolution of a claim of the privilege, respectively. The three-step analysis requires a court to: 1) ascertain that the procedural requirements for invoking the state secrets privilege have been satisfied; 2) decide whether the information sought to be protected qualifies as privileged under the state secrets doctrine; and 3) determine how the matter should proceed in light of the successful privilege claim if the information is determined to be privileged.

First, the court determined the Agency satisfied Reynolds' procedural requirements by submitting Director John Brennan's affidavit asserting the state secrets privilege after personal consideration of Abilt's claims and determining that classified information related to his employment was at risk of disclosure in this case. Second, the court found that the information the government sought to protect, such as the identity of covert CIA employees, Abilt's work assignments, the location of CIA facilities overseas, and the sources and methods used by the CIA, was properly privileged. Therefore, the disclosure of such information would threaten the national security of the United States. Finally, in deciding the ultimate question of how the matter should proceed given the privileged information, the court determined the case had to be dismissed. The court first noted that establishing each of the prima facie elements of Abilt's claims without the privileged information would be an "extremely high hurdle." Nevertheless, the court reasoned, assuming Abilt could clear the hurdle, the case should still be dismissed because any defenses the Agency could offer would "undoubtedly" rely on privileged information. The court found unconvincing Abilt's argument that the lower burden at step two of the McDonnell Douglas framework, a framework used to evaluate discrimination and retaliation claims under both statutes, was evidence that the Agency could defend itself without resort to privileged information. The court reasoned that the Agency was entitled to proffer legitimate, non-discriminatory reasons for its actions and because those reasons are privileged, the case had to be dismissed.

The court acknowledged the "unfortunate burden" its decision placed on Abilt on behalf of the entire country, noting that "Abilt suffers dismissal of his claim 'not through any fault of his own, but because his personal interest in pursuing his civil claim is subordinated to the collective interest in national security.'"

To read the full opinion, click here.

Panel: Wynn, Floyd, and Harris, Circuit Judges.

Argument Date: 10/27/2016

Date of Issued Opinion: 02/08/2107

Docket Number: No. 15-2568

Decided: Affirmed by published opinion. Judge Floyd wrote the opinion, in which Judge Wynn and Judge Harris joined.

Case Alert Author: Yvette Pappoe, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Donna Renee Williams Rucker, TULLY RINCKEY PLLC, Washington, D.C., for Appellant. Jaynie Randall Lilley, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees. ON BRIEF: Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Sharon Swingle, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Dana J. Boente, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellees.

Author of Opinion: Judge Floyd, Circuit Judge

Case Alert Circuit Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/14/2017 09:57 AM     4th Circuit     Comments (0)  

March 11, 2017
  United States v. Monsalvatge
Headline: Second Circuit Affirms District Court's Admission of Clips From 2010 Film "The Town" into Evidence During Armed Robbery Trial

Area of Law: Evidence and Criminal Law

Issue Presented: Whether the district court abused its discretion in admitting into evidence at trial clips from the 2010 film The Town, which were intended to shed light on the defendants' modus operandi in carrying out a bank robbery.

Brief Summary:
Defendant-appellants Akeem Monsalvatge, Edward Byam, and Derrick Dunkley were convicted in the Eastern District of New York of armed robberies of two Pay-O-Matic check-cashing stores. At the trial, the prosecution had played for the jury several short clips from the 2010 film The Town, which was about a group of Boston bank robbers. The Government used the clips to illustrate and explain the differences in modus operandi between the two robberies that occurred almost two years apart, arguing that before the second robbery, the defendants saw and admired The Town and used ideas from it. On appeal, the defendant-appellants argued that the district court abused its discretion in allowing the prosecution to show the clips. The Second Circuit disagreed. Affirming the Defendant-Appellants' convictions, the court found that the clips were relevant and that their probative value outweighed the potential for prejudice, particularly given the clips' very short length, the clips' narrow tailoring, and the district court's two curative instructions.

Extended Summary: Defendant-Appellants Akeem Monsalvatge, Edward Byam, and Derrick Dunkley appealed from their judgments of conviction in the United States District Court for the Eastern District of New York entered on April 10, 2014. The Defendant-Appellants were convicted after a jury trial of committing two armed bank robberies in violation of 18 U.S.C. § 1951(a), two counts of unlawful use of a firearm during the commission of a crime of violence in violation of 18 U.S.C. § 9124(c)(1)(A)(ii), and conspiracy to commit Hobbs Act robbery in violation of 18 U.S.C. § 1951(a). On April 10, 2014, District Court Judge Dearie sentenced each of the three Defendant-Appellants to thirty-two years of imprisonment, five years of supervised release, $240,795.62 in restitution, and a $500 special assessment.
On appeal, Defendant-Appellants raised a variety of claims. The Second Circuit's opinion addresses one of Monsalvagte's claims, which Dunkley joins: whether the district court abused its discretion in admitting into evidence at trial four clips from the the film The Town.

In advance of the trial, the Government filed a motion in limine requesting to play for the jury at trial film clips from The Town, a 2010 crime drama about a group of Boston bank robbers. The Government asserted the clips would serve as evidence regarding the genesis of the Defendant-Appellants' modus operandi in the second 2012 robbery and to explain the change in modus operandi between the first robbery committed in 2010 and the second in 2012. The district court granted the Government's motion to admit the clips over the Defendant-Appellants objections.
In the first robbery on February 24, 2010, three bandana-covered men, wielding guns, stole $44,039.73 from a Pay-O-Matic in Queens, New York, with one of the robbers gaining access to the protected area of the store by descending through the roof. In the second robbery on February 14, 2012, three robbers stole $200,755.89 at gunpoint from a Pay-O-Matic also located in Queens, New York. This time, however, the robbers wore police uniform disguises and lifelike special effects masks. The robbers also accosted a store employee by showing her pictures of her home in gaining access to the store. In addition, unlike in the first robbery, the robbers poured bleach on the teller counter in order to remove any fingerprints or DNA.

The clips from The Town, totaling one minute and seven seconds, depicted the film's protagonists utilizing the same methods in robbing banks as the robbers who committed the second robbery: pouring bleach on bank surfaces, threatening an employee by revealing knowledge of the employee's home address, wearing police badges, uniforms, and sunglasses, and wearing special effect masks. Furthermore, the Government admitted evidence intended to show that Defendant-Appellant Monsalvatge had seen The Town and admired it.

At trial, before and after the playing of the clips, the district court gave two curative instructions to the jury emphasizing that anything heard on the clips was not before them for the truth of it. Additionally, the district court also further instructed the jury about two differences between the 2012 robbery and the movie clips: that there was no evidence that any perpetrators of the robbery were at the home of the store employee and that unlike the movie clips, there was no evidence that the 2012 robbers used assault weapons in the commission of the robbery.

The Second Circuit reviewed the district court's evidentiary ruling over objection for abuse of discretion. The circuit court will only reverse an evidentiary ruling under abuse of discretion review if the ruling was arbitrary and irrational. Furthermore, the circuit court noted it had in the past declined to second-guess a district court's admission of relevant video or media evidence where the evidence bears an identifiable connection to an issue or defendant in the case.

In affirming the district court's admittance of the movie clips, the Second Circuit found the clips, in conjunction with other evidence, tended to make more probable the factual inference that the 2010 and 2012 robberies were part of the same conspiracy. The Second Circuit noted the aforementioned similarities between the 2012 robbery and the robberies portrayed in The Town as well as the fact that the film had not yet been released prior to the 2010 robberies. In rejecting the Defendant-Appellants contention that the admittance of the clips was prejudicial, the Second Circuit held any prejudicial effect was minimal given the clips' extreme short length, the clips' narrow tailoring and the district court's two curative instructions.
Thus, the Second Circuit found the district court did not abuse its discretion in admitting into evidence the clips from the The Town and therefore affirmed the convictions of Defendant-Appellants Monsalvatge and Dunkley.

To read the full opinion, click http://www.ca2.uscourts.gov/de...11df30b888aa/3/hilite/ .

Panel: Circuit Judges Livingston and Droney; District Judge Torres, sitting by designation

Argument Date: 10/02/2015

Date of Issued Opinion: 03/08/2017

Docket Numbers:
14-1113

Decided: Affirmed

Case Alert Author: Thomas J. Baroni

Counsel: Jonathan I. Edelstein, Edelstein & Grossman, New York, N.Y. for Defendant-Appellant Akeem Monsalvatge; Patrick Michael Megaro, Orlando, Fla. for Defendant-Appellant Edward Byam; Daniel M. Perez, Law Offices of Daniel M. Perez, Newton, N.J. for Defendant-Appellant Derrick Dunkley; Tyler J. Smith, Jo Ann M. Navickas, Tiana A. Demas, Maria Cruz Melendez, Assistant United States Attorneys, New York, N.Y., (Kelly T. Currie, Acting United States Attorney for the Eastern District of New York) for Appellee United States of America

Author of Opinion: Judge Livingston; concurrence by Judge Torres

Circuit: Second Circuit

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 03/11/2017 02:55 PM     2nd 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)  

  New York Pet Welfare Ass'n, Inc. v. New York City - Second Circuit
Headline: Second Circuit Upholds New York City Animal Welfare Laws Aimed at Controlling Overpopulation of Cats and Dogs

Area of Law: Animal Law, Commerce Clause, State & Federal Preemption

Issue(s) Presented: Whether newly-enacted New York City animal welfare laws are preempted by state or federal law or violate the dormant Commerce Clause.

Brief Summary: Plaintiff-appellant brought suit against New York City in the United States District Court for the Eastern District of New York to challenge two New York City animal welfare laws enacted in 2015. Plaintiff-appellant, the New York Pet Welfare Association, alleged that one law, requiring New York City pet shops to buy dogs and cats only directly from a specific class of federally-licensed breeders, violated the dormant commerce clause. In addition, plaintiff-appellant alleged that the federal Animal Welfare Act preempted this law. Second, plaintiff-appellant alleged that New York law preempted a second animal welfare law that required pet stores to sterilize dogs and cats before consumers could purchase them.

The district court held that plaintiff-appellant's Commerce Clause challenge failed because the laws did not "discriminate against or unduly burden interstate commerce." The district court also found that neither federal law nor New York state law preempted the City's animal welfare laws. Plaintiff-appellant appealed, and the Second Circuit affirmed the district court's dismissal.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...adf82ec74c6/2/hilite/.

Extended Summary: This case concerns animal welfare laws that aim to protect the approximately 1.1 million dogs and cats that reside in New York City. In 2015, defendant-appellant New York City (the "City") drafted a series of animal welfare laws aimed at the breeding of dogs and cats, their subsequent sale, and the unfortunate issue of overpopulation. Before the laws took effect, plaintiff-appellant, the New York Pet Welfare Association, sued the City in the United States District Court for the Eastern District of New York, challenging two of the laws: the "Sourcing Law" and the "Spay/Neuter Law."

The Sourcing Law required that City pet stores sell only animals from a specific class of federally-licensed breeders, while the Spay/Neuter Law required pet stores to spay and neuter the animals before selling them. Plaintiff-appellant alleged that the Sourcing Law violated the Commerce Clause and was preempted by the federal Animal Welfare Act ("AWA and alleged that the Spay/Neuter Law was preempted by New York state law. The district court dismissed the complaint in its entirety, and plaintiff-appellant appealed to the Second Circuit.

In its analysis, the Second Circuit explained that the AWA covers any "person who, in commerce, for compensation or profit, delivers for transportation, or transports, except as a carrier, buys, or sells, or negotiates the purchase or sale of . . . any dog or other animal . . . [for] use as a pet." The AWA gives wide discretion to the Secretary of Agriculture to form a licensing scheme and set standards. With this discretion, the Secretary created three categories of dealers, Classes A-C. Despite the AWA's broad scope, by the Act's express terms, states may still promulgate standards in addition to those set by the Secretary. States have taken the initiative to regulate large-scale breeders and require pet stores to strengthen their warranties and provide more disclosures about the pets they sell.

Plaintiff-appellant argued that the AWA preempted the Sourcing Law because it interfered with the AWA's established licensing systems. The Second Circuit rejected this argument, holding that plaintiff-appellant did not meet its burden in proving that the two laws could not stand together. Specifically, the court noted that plaintiff-appellant failed to show how the Sourcing Law prohibited the Secretary of Agriculture's licensing system from fulfilling Congress's intended goal of inspection. The Court differentiated between the Sourcing Law's goal of regulating sales by a federally-licensed class and the AWA's ability to "facilitate federal enforcement activities." Since Congress directed the Secretary to cooperate with state officials in promulgating and enforcing state animal welfare laws, Congress, the Second Circuit concluded, did not intend the AWA to automatically preempt any proposed state laws.

The Second Circuit likewise rejected plaintiff-appellant's argument that the Sourcing Law's violated the Commerce Clause. As an initial matter, the court determined that the Sourcing Law did not discriminate against interstate commerce. The court stated that the law posed only an incidental burden on commerce because even if the law made it difficult for some out-of-state breeders to sell to City pet stores, as long as some breeders are able to this does not constitute an impermissible burden on interstate commerce overall.

Regarding the Spay/Neuter Law, plaintiff-appellant argued that, because the law set a certain minimum age and weight for required sterilization, these standards conflicted with and were preempted by New York state law dictating that veterinarians should apply independent judgment and obtain informed consent from the owner before performing the surgeries. However, the Second Circuit found no preemption because the Spay/Neuter Law did not impose any obligations on veterinarians who, the court said, could simply refuse to perform any surgeries that they felt would violate their duties under state law.

As a result, the Second Circuit affirmed the lower court's decision dismissing plaintiff-appellant's complaint in its entirety.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...adf82ec74c6/2/hilite/.

Panel (if known): Circuit Judges Leval and Lohier, and District Judge Korman

Argument Date: 09/19/16

Date of Issued Opinion: 03/02/17

Docket Number:
No. 15-4013-cv

Decided: Affirmed.

Case Alert Author: Samantha Hazen

Counsel: Jeffrey M. Pollock (Nancy Elizabeth Halpern, on the brief), Fox Rothschild LLP, Lawrenceville, NJ (James M. Lemonedes, Fox Rothschild LLP, New York, NY, on the brief), for Plaintiff- Appellant, Benjamin Welikson, of Counsel (Zachary W. Carter, Corporation Counsel, Richard Dearing, Assistant Corporation Counsel, Devin Slack, of Counsel, on the brief), City of New York, New York, NY, for Defendants-Appellees, S. Reid Kahn, Kane Kessler, P.C., New York, NY, for Amicus Curiae The Humane Society of the United States.

Author of Opinion: District Judge Edward R. Korman

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 03/03/2017 02:20 PM     2nd Circuit     Comments (0)  

March 2, 2017
  Billy E. Prince v. Sears Holding Corporation -- Fourth Circuit
Employee Beware--Check Your Mail for Insurability Questionnaires to Avoid ERISA Preemption

Areas of Law: Employee Retirement Income Security Act

Issue Presented: Whether the Employee Retirement Income Security Act ("ERISA") preempts state law claims for misrepresentation, constructive fraud, and infliction of emotional distress.

Brief Summary: Billy E. Prince, an employee of Sears Holding Corporation, brought a suit alleging that Sears improperly administered his late wife's life insurance benefits. Specifically, Mr. Prince brought the suit alleging misrepresentation, constructive fraud, and infliction of emotional distress. The United States Court of Appeals for the Fourth Circuit held that ERISA completely preempted Billy Prince's state law claims under the three prong test articulated in Sonoco Prods. Co. v. Physicians Health Plan, Inc.

Extended Summary: In November 2010, Mr. Prince submitted an application to Sears for $150,000 in life insurance for his wife. Sears administered its life insurance plans through The Prudential Insurance Company of America ("Prudential"). In May 2011, Sears sent Mr. Prince an acknowledgement letter and began withholding premiums from his pay. In late 2011, Mr. Prince's wife learned that she had Stage IV liver cancer. In 2012, Mr. Prince confirmed through his online benefits summary that he had elected to purchase life insurance coverage for his wife in the amount of $150,000. In 2013, however, Sears sent Mr. Prince a letter saying that his wife's coverage never became effective because there was no evidence that Mr. Prince had submitted his insurability questionnaire. According to Sears, Prudential sent Mr. Prince a notice in 2011 stating that if he failed to send in the questionnaire his application for life insurance would be terminated. Mrs. Prince passed away in May 2014.

Mr. Prince filed a complaint against Sears alleging constructive fraud and negligent misrepresentation as well as the intentional and reckless infliction of emotional distress. Concerning the claim of intentional and reckless infliction of emotional distress, Mr. Prince alleged that Sears misrepresented the life insurance policy and that this misrepresentation inflicted harm on him and the late Mrs. Prince. Sears removed the case to the United States District Court for the Northern District of West Virginia and argued that the suit should be dismissed because ERISA completely preempted Mr. Prince's state law claims. The district court agreed.

ERISA's § 502(a) is a broad provision that provides participants and beneficiaries with causes of action for the denial of benefits or rights under an ERISA plan. The Fourth Circuit determined that ERISA can preempt state law causes of action when: (1) a plaintiff has standing under § 502(a) to pursue his claim; (2) the claim falls within the scope of an ERISA provision that ERISA can enforce via § 502(a); and (3) the claim is not capable of resolution without interpreting the ERISA plan. Because Mr. Prince conceded that he had standing, the Fourth Circuit only considered the second and third prongs of the test articulated in Sonoco Products Company v. Physicians Health, Inc.

Under the second prong, Mr. Prince argued that his claims were not preempted because they were dependent upon Sears's actions prior to the denial of benefits when they began deducting premiums from his pay and reported that he had coverage. The court held that regardless of whether Mr. Prince's claims attacked Sears's actions prior to the denial or in issuing the denial, they were preempted because they challenged the administration of the ERISA plan, which is a core §502(a) claim. Additionally, because Mr. Prince's claims addressed only Sears's duties as an ERISA plan administrator, Sears owed Mr. Prince no independent legal duty. Regarding the third prong, Mr. Prince again argued that he was only challenging the actions Sears took prior to the denial of benefits. The court, however, held that the claims of misrepresentation and constructive fraud required an analysis of Sears's "duty" as a plan administrator, which stemmed from the ERISA plan. Similarly, for the claim of emotional distress, determining whether Sears acted in an "outrageous" manner required interpretation of the company's duties and responsibilities under the ERISA plan. Thus, the Fourth Circuit held that ERISA completely preempted Mr. Prince's state law claims, affirmed the judgment of the District Court, and dismissed the complaint.

To read the full opinion, click here.

Panel: Judges Motz, Kennan, and Thacker

Argument Date: 12/06/2016

Date of Issued Opinion: 01/27/2017

Docket Number: No. 16-1075

Decided: Affirmed by published opinion

Case Alert Author: Dena Robinson, Univ. of Maryland Carey School of Law

Counsel: Chad Lewis Taylor, SIMMERMAN LAW OFFICE, PLLC, Clarksburg, West Virginia, for Appellant. Jill E. Hall, BOWLES RICE LLP, Charleston, West Virginia, for Appellee. ON BRIEF: Frank E. Simmerman, Jr., SIMMERMAN LAW OFFICE, PLLC, Clarksburg, West Virginia, for Appellant. Gerard R. Stowers, BOWLES RICE LLP, Charleston, West Virginia, for Appellee.

Author of Opinion: Judge Motz

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/02/2017 10:31 AM     4th Circuit     Comments (0)  

February 27, 2017
  United States of America v. Dominique Jackson - Third Circuit
Headline: Third Circuit Affirms Conviction Based on "Listening Post" Theory in Wiretap Statute

Area of Law: Pennsylvania Wiretap Statute, Evidence

Issues Presented: Did the District Court erroneously deny pretrial motions to suppress evidence derived from intercepted calls?

Brief Summary:

Defendant Dominique Jackson appealed his conviction for conspiracy to possess with the intent to distribute cocaine. He claimed that the district court erred by denying his pretrial motions to suppress evidence from calls because he claimed the calls were unlawfully intercepted. Defendant argued that the evidence from the wiretaps should have been suppressed because the state court did not have jurisdiction to wiretap cells phones when they were outside of Pennsylvania. The Third Circuit adopted the "listening post" theory, which permits interception of out-of-state calls if the interception itself is located within the jurisdiction of the court authorizing the interception. The Third Circuit reviewed Pennsylvania's wiretap statute and Title III, the federal wiretap statute, and confirmed that Pennsylvania's statute was modeled to be substantially similar to Title III in terms of jurisdiction. Therefore, the state court had authority to grant the wiretap on the evidence from the calls outside of Pennsylvania and the evidence was admissible.

Extended Summary:

Defendant appealed his conviction for conspiracy to possess with the intent to distribute cocaine. Defendant claimed the district court erroneously denied his pretrial motions to suppress evidence from cell phone calls. A Pennsylvania state court had authorized the wiretaps and information from those wiretaps was used in affidavits of probable cause. Intercepted calls were placed and received outside of the state and Defendant contended that the state court lacked subject matter jurisdiction to permit wiretaps outside of Pennsylvania. The jury convicted Defendant of one count of conspiracy to distribute and possess with intent to distribute five or more kilograms of cocaine.

Defendant contended that the evidence from the wiretaps should have been suppressed because the state court did not have jurisdiction over the cellphones when they were outside of Pennsylvania. Defendant maintained that a state's jurisdiction is limited to its borders, and several conversations involving Defendant occurred while the cellphones were located outside of Pennsylvania. The government responded that Defendant lacked standing because, except for six calls which he was a party and had standing to challenge, he was not a party to the intercepted calls. The government also claimed the evidence was admissible under the "listening post" theory, which permits interception of out-of-state calls if the interception itself is located within the jurisdiction of the court authorizing the interception.

The Third Circuit joined other courts of appeals in adopting the "listening post" theory under Title III. The Court reasoned that the Pennsylvania wiretap statute was amended to clarify the definition of "intercept" based on the "listening post" theory. For interception to be lawful, therefore, only the interception had to have been in Pennsylvania. There was no dispute that the interceptions were made in Pennsylvania. The Court, thus, upheld the district court's denial of the motion to suppress.

Defendant also claimed on appeal that the district court erred in not precluding the government's agent, "Countryman," from interpreting the meaning of certain intercepted calls. The government claimed that the phone conversations were unclear and needed interpretation. It also claimed that the testimony involved Countryman's personal observations as a lay witness. The Third Circuit found that Countryman's testimony was not based on his direct knowledge of events. Therefore, he was in no better position than the jury to interpret the calls, and his testimony was overly broad and improper. Although the district court erred in not precluding that evidence, the Third Circuit found that the error was not plain for purposes of granting appellate relief.

Defendant also claimed that the government wrongfully attempted to use two of his co-conspirators' guilty pleas as evidence of Defendant's guilt. The Third Circuit held the government's use of the co-conspirators' guilty pleas was permissible because they went to the heart of whether the co-conspirators were credible, whether the government had selectively prosecuted Defendant, and whether the co-conspirators had firsthand knowledge of the crime for which Defendant was charged. The evidence of the pleas was not offered as substantive evidence of Defendant's guilt. The district court also provided appropriate limiting instructions. Therefore, the district court did not err in allowing the testimony.

Finally, Defendant argued that the district court erred by allowing admission of a co-conspirator's Fifth Amendment privilege not to testify. The Third Circuit held that the prosecutor's mention of the witness's invocation of the Fifth Amendment in front of the jury was inopportune, but was not so serious as to constitute plain error for purposes of appeal.

The Third Circuit, thus, found that Defendant failed to show plain error on appeal and his conviction and sentence were affirmed.

Find the full opinion at:

http://www2.ca3.uscourts.gov/opinarch/143712p.pdf

Panel: Fisher, Krause, and Greenberg, Circuit Judges

Argument Date: Argued December 7, 2016

Date of Issued Opinion: February 24, 2017

Docket Number: No. 14-3712

Decided: Affirmed

Case Alert Author: Jessica Wood

Counsel:

David S. Hickton, United States Attorney, Donovan J. Cocas (argued), Assistant U.S. Attorney, Rebecca R. Haywood, Assistant U.S. Attorney, Michael Ivory, Assistant U.S. Attorney, Counsel for Appellee

F. Clinton Broden (argued), Counsel for Appellant

Author of Opinion: Greenberg, Circuit Judge

Circuit: Third Circuit

Case Alert Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 02/27/2017 06:54 PM     3rd Circuit     Comments (0)  

February 23, 2017
  Scinto v. Stansberry -- Fourth Circuit
Federal Prisoner's Claims of Improper Medical Care Survive

Areas of Law: Constitutional Law, Eighth Amendment

Issue Presented: Whether the District Court in dismissing three Eighth Amendment claims improperly made credibility determinations and weighed the evidence.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that the United States District Court for District of North Carolina erred in dismissing two Eighth Amendment claims against Dr. Phillip and Administrator McClintock, two employees at the Federal Prison Camp Seymour Johnson. The Fourth Circuit held that Scinto's claim against Dr. Phillip for his denial of insulin and the claim against Administrator McClintock and Dr. Phillip for the failure to provide aid during a medical emergency fit the Supreme Court's two-pronged test in Farmer v. Brennan.

Extended Summary: Paul Scinto, a former federal prisoner, appealed to the Fourth Circuit to review the District Court of North Carolina's dismissal of three Eighth Amendment claims that Defendants Phillip, Stansberry, and McClintock were deliberately indifferent to his medical needs, in violation of the Eighth Amendment. Scinto argued that in dismissing these claims, the district court violated the summary judgment standard by making credibility determinations and weighing the parties' evidence.

The Fourth Circuit noted that when prisoners allege they have been subjected to unconstitutional conditions of confinement, they must satisfy the Supreme Court's two-pronged test in Farmer v. Brennan. The first prong of Farmer's test is an objective prong requiring plaintiffs to demonstrate that "the deprivation alleged [was], objectively "sufficiently serious." The deprivation itself must be "extreme." The second prong of Farmer is a subjective prong, requiring plaintiffs to show that prison officials acted with a "sufficiently culpable state of mind." In order to prove deliberate indifference, plaintiffs must show that "the official kn[ew] of and disregard[ed] an excessive risk to inmate health or safety." Importantly, the Fourth Circuit noted that a plaintiff could make out a prima facie case of deliberate difference by demonstrating "that a substantial risk of [serious harm] was longstanding, pervasive, well-documented, or expressly noted by prison officials[.]"

Regarding Scinto's first claim against Dr. Phillip for allegedly denying him insulin to treat his diabetes, the Fourth Circuit found the plaintiff provided sufficient evidence to establish a genuine dispute of fact as to Farmer's objective and subjective prongs. The court found Scinto did this because he established that he suffered from a serious medical condition and he created a genuine issue of material fact regarding whether Dr. Phillip's failure to provide him with insulin constituted an "extreme deprivation." Additionally, the Fourth Circuit found that plaintiff's lengthy prison medical records showed that his diabetes diagnosis was "longstanding, pervasive, and well-documented." Plaintiff's second claim arose out of Dr. Phillip's and Administrator McClintock's alleged failure to provide him aid during a medical emergency. Specifically, Plaintiff alleged that during a lockdown he experienced extreme stomach pain and began throwing up vomit and blood. The Fourth Circuit held that Plaintiff's evidence created a genuine dispute of fact as to whether the denial of medical attention during this emergency resulted in serious injury or a substantial risk of serious injury. The Fourth Circuit also held that Plaintiff's evidence established genuine disputes of material fact as to both Farmer prongs. Last, regarding Plaintiff's final claim against Warden Stansberry alleging a denial of a proper diabetic diet during his six-month confinement in the Special Housing Unit, the Fourth Circuit affirmed the district court's award of summary judgment for the claim, but not for the reason stated. Instead, the Fourth Circuit held that the Plaintiff failed to raise a genuine dispute of material fact regarding whether the lack of a diabetic diet was a sufficiently serious deprivation actionable under the Eighth Amendment.

In addressing the qualified immunity claims raised by the Defendants, the Fourth Circuit held the Defendant's allegedly violated a clearly established statutory or constitutional right -- a prisoner's right to adequate medical care and freedom from deliberate indifference to medical needs. In addition, the Fourth Circuit found there was sufficient evidence that Plaintiff's aforementioned Eighth Amendment right was violated and that the right was clearly established. Thus, Dr. Phillip and Adminstrator McClintock were not entitled to qualified immunity.

To view the full opinion, click here.

Panel: Judges Niemeyer, Motz, and Wynn

Argument Date: 09/23/2016

Date of Issued Opinion: 11/04/2016

Docket Number: No. 15-1587

Decided:
Affirmed in part and reversed in part.

Case Alert Author: Dena Robinson, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Adam H. Farra, COHEN MILSTEIN SELLERS & TOLL PLLC, Washington, D.C., for Appellant. Robert J. Dodson, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellees. ON BRIEF: Paul J. Zidlicky, SIDLEY AUSTIN LLP, Washington, D.C., for Appellant. John Stuart Bruce, Acting United States Attorney, G. Norman Acker, III, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellees.
Author of Opinion: Judge Wynn

Case Alert Supervisor: Professor Renee Hutchins

    Posted By: Renee Hutchins @ 02/23/2017 03:51 PM     4th Circuit     Comments (0)  

  Boone v. Everett, et al. -- Fourth Circuit
Both Sides of Story Must Be Considered in Pro Se Eighth Amendment Case

Areas of Law: Constitutional Law, Eighth Amendment

Issue Presented: Whether the District Court properly granted a motion for summary judgment on a defendant's excessive force claims against two prison officers.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that the United States District Court for the Eastern District of Virginia erred in granting Officer C.D. Everett summary judgment on a 42 U.S.C. § 1983 excessive force claim when the court based its decision solely on the affidavits and story of the prison where the defendant was incarcerated. However, the Fourth Circuit upheld the motion for summary judgment for Sergeant L. Rodriguez because the only evidence Boone, a pro se appellant, offered to support his Eighth Amendment claims against Rodriguez were conclusory allegations.

Extended Summary: Wally Boone asked Fourth Circuit to review the District Court's grant of summary judgment and denial of relief on his 42 U.S.C. § 1983 excessive force claim. In his claim to the district court, Boone alleged that two prison officials, Officer C.D. Everett and Sergeant L. Rodriguez, used excessive force against him. Specifically, he alleged that Officer Everett slammed his head into a wall, threw him on the floor, jumped on top of him, and choked him until he lost consciousness. He also alleged that Sergeant Rodriguez dragged him to the medical department while threatening to drop him and allowed his genitals to remain exposed. The district court granted the Defendants' motion for summary judgment. The Fourth Circuit affirmed in part, vacated in part, and remanded for further proceedings.

The Fourth Circuit noted that a district court can only award summary judgment if no genuine dispute of material fact remains and the record indicates that the moving party is entitled to judgment as a matter of law. When the moving party shows there is no genuine issue of material fact, the nonmoving party must "go beyond the pleadings" and rely on evidence, including affidavits, to demonstrate that a genuine issue of material fact exists. Thus, to survive summary judgment, the nonmoving party must produce competent evidence that is more than conclusory or speculative allegations. The Fourth Circuit noted that in reviewing the evidence submitted by the parties, a court cannot "credit the evidence of the party seeking summary judgment and fail to properly acknowledge key evidence offered by the party opposing that motion." In other words, at the district court level, the district court could not only credit the evidence of Everett and Rodriguez, but had a duty to credit that proffered by Boone as well.

In making an Eighth Amendment claim for excessive force, a prisoner must prove that the official possessed a culpable state of mind and caused the prisoner a sufficiently serious deprivation or injury. Specifically, a prisoner must prove that the official acted "maliciously and sadistically for the very purpose of causing harm" rather than "in a good faith effort to maintain or restore discipline." Factors used to analyze malicious or sadistic intent include: (1) the need for force, (2) the degree of force used in relation to the need for force, (3) the existence of a threat reasonably perceived by the official, (4) any efforts made to lessen the severity of a forceful response, and (5) the extent of a prisoner's injury. In analyzing the excessive force claim against Everett, the Fourth Circuit held that the district court's opinion contained flaws that necessitated remand. The Fourth Circuit noted that the opinion made no mention of the evidence Boone proffered to support his claim which included (1) his affidavit attesting to his account of the incident, (2) his prison grievances detailing injuries consistent with his allegations, and (3) affidavits from three other inmates who attested that they observed Everett's alleged conduct. The Fourth Circuit stated that a court may only reject the nonmoving party's evidence, such as Boone's, when uncontroverted evidence in the record "blatantly contradicts it." The court found no such blatant contradictions to exist in the record below. The Fourth Circuit noted that by overlooking Boone's evidence, the district court's opinion relied almost exclusively on the Defendant's account.

Turning to Boone's excessive force claims against Sergeant Rodriguez, the Fourth Circuit held that the district court applied the proper standard in granting Rodriguez's motion for summary judgment. The Fourth Circuit held that Boone's conclusory allegations coupled with an affidavit by a witness (who testified to seeing the alleged violation, but failed to identify the officer or explain why the officer dragged Boone), presented "a mere scintilla of evidence." Thus, the Fourth Circuit found that Boone had not raised a genuine dispute of material fact regarding whether Rodriguez acted maliciously or sadistically.

The Fourth Circuit vacated the grant of summary judgment to Everett and affirmed the grant of summary judgment to Rodriguez. They affirmed in part, vacated in part, and remanded the case.

To view a full version of the opinion, clickhere.

Panel: Judges Traxler, Keenan, and Wynn

Argument Date: 09/28/2016

Date of Issued Opinion: 10/21/2016

Docket Number:
No. 16-6843

Decided: Affirmed in part, vacated in part, and remanded by unpublished per curiam opinion

Case Alert Author: Dena Robinson, Univ. of Maryland Carey School of Law

Counsel:
Wally Boone, Appellant Pro Se. John Michael Parsons, Assistant Attorney General, Richmond, Virginia, for Appellees.

Author of Opinion: Per curiam

Case Alert Supervisor:
Professor Renee Hutchins

    Posted By: Renee Hutchins @ 02/23/2017 03:36 PM     1st Circuit     Comments (0)  

  Sotnikau v. Lynch -- Fourth Circuit
Involuntary Manslaughter under Virginia Law Is Not a Crime Involving Moral Turpitude

Areas of Law: Criminal Law, Immigration Law

Issue Presented: Whether involuntary manslaughter under Virginia law is categorically a crime involving moral turpitude for the purposes of removal proceedings.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that involuntary manslaughter under Virginia law is not categorically a crime involving moral turpitude, because a defendant can be convicted of the offense upon a showing of criminal negligence. Therefore, the Fourth Circuit concluded that the defendant was not subject to removal pursuant to 8 U.S.C. § 1227(a)(2)(A)(i)(I). The Fourth Circuit vacated the Board of Immigration Appeals' order of removal and remanded for further proceedings.

Extended Summary: Ihar Sotnikau ("Sotnikau") is a native of Belarus who was admitted to the United States as a lawful permanent resident in 2008. On June 18, 2010, Sotnikau and his friend Randy Hines were drinking on a pier along the Elizabeth River in Portsmouth, Virginia. At some point, Hines fell into the river and his body was found the next day. Sotnikau was charged with involuntary manslaughter in the Circuit Court of the City of Portsmouth, Virginia. He pleaded guilty and was sentenced to five years in prison.

In October 2011, the Department of Homeland Security (the "DHS") instituted removal proceedings against Sotnikau under 8 U.S.C. § 1227(a)(2)(A)(i)(I). Under the statute, a removable alien is one who "is convicted of a crime involving moral turpitude committed within five years . . . after the date of admission." The DHS alleged that Sotnikau was convicted of a crime involving moral turpitude, i.e. involuntary manslaughter, committed within five years of being admitted to the United States. Sotnikau contested the DHS's interpretation of Virginia's involuntary manslaughter offense.

In March 2013, the Immigration Judge (the "IJ") concluded that Sotnikau had been convicted of a crime involving moral turpitude, citing the Board of Immigration Appeals' (the "BIA") 1994 decision in In re Franklin, 20 I. & N. Dec. 867 (BIA 1994). In that case, the BIA held that an involuntary manslaughter offense in Missouri constituted a crime involving moral turpitude because "the Missouri statute defined involuntary manslaughter as 'recklessly causing the death of another person.'" The IJ found that, because the mental state required to support a conviction for involuntary manslaughter under Virginia law is identical to the mental state that was at issue in the In re Franklin decision, Virginia's involuntary manslaughter offense is categorically a crime involving moral turpitude. Sotnikau appealed the IJ's decision to the BIA, which affirmed the decision and ordered Sotnikau's removal. Stonikau petitioned the Fourth Circuit for review.

The Fourth Circuit granted relief. In examining whether Virginia's involuntary manslaughter offense is a crime involving moral turpitude, the Fourth Circuit used the categorical approach outlined in Prudencio v. Holder, 669 F.3d 472, 484 (4th Cir. 2012): The court looks at the elements of the crime at issue and determines whether those elements solely encompass behavior that involves moral turpitude. If they do, the crime is categorically one involving moral turpitude. But if those elements can include behavior that does not involve moral turpitude, the crime is not categorically one involving moral turpitude.

The Fourth Circuit started by discussing the definition of "moral turpitude." Citing the BIA decision In re Perez-Contreras, 20 I. & N. Dec. 615, 618 (BIA 1992), the Fourth Circuit found that moral turpitude is present "[w]here knowing or intentional conduct is an element of an offense." Those circumstances include criminally reckless conduct, which "reflect[s] a willingness to disregard the risks inherent in the conduct." Criminally negligent conduct, however, is not included because "there [is] no intent required for conviction, nor any conscious disregard of a substantial and unjustifiable risk."

In analyzing the elements of Virginia's involuntary manslaughter offense, the Fourth Circuit found that the offense requires that "the offender either knew or should have known the probable results of his acts." See Conrad v. Commonwealth, 521 S.E.2d 321, 326 (Va. Ct. App. 1999 (en banc)). Thus, the court held that an involuntary manslaughter conviction can be secured in Virginia upon a showing of criminal negligence, without proving a conscious disregard of risks attendant to the offender's conduct. Therefore, the Fourth Circuit concluded that Virginia's involuntary manslaughter offense is not categorically a crime involving moral turpitude.

In response to the IJ's reliance on the In re Franklin decision, the Fourth Circuit held that decision did not control the outcome of this case because the definition of involuntary manslaughter in Virginia is "materially distinguishable" from the definition of involuntary manslaughter in Missouri. The court noted that while Missouri's involuntary manslaughter requires a "conscious disregard of a substantial and unjustifiable risk," Virginia's involuntary manslaughter does not.

To read the full opinion, click here.

Panel: Judges Niemeyer, King, and Agee

Argument Date: 12/08/2016

Date of Issued Opinion: 01/24/2017

Docket Number: No. 15-2073

Decided: Petition for review granted; vacated and remanded by published opinion

Case Alert Author: Ziyi He, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Jason Matthew Zarrow, O'MELVENY & MYERS LLP, Washington, D.C., for Petitioner. Keith Ian McManus, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent. ON BRIEF: Mary Patrice Brown, O'MELVENY & MYERS LLP, Washington, D.C., for Petitioner. Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Cindy S. Ferrier, Assistant Director, Office of Immigration Litigation, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent.

Author of Opinion: Circuit Judge King

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/23/2017 03:23 PM     4th Circuit     Comments (0)  

  Patterson v. Commissioner of Social Security Administration -- Fourth Circuit
'Show Your Work' - Fourth Circuit Remands SSA Claim for ALJ's Failure to Employ Special Technique in Evaluating Claimant's Mental Impairment

Area of Law: Administrative Law

Issue Presented: Whether an Administrative Law Judge's failure to follow the special technique required by 20 C.F.R. § 404.1520a when evaluating a claimant's mental impairment requires remand or may constitute harmless error.

Brief Summary: On an issue of first impression, the United States Court of Appeals for the Fourth Circuit held that an Administrative Law Judge's failure to follow the special procedures outlined in 20 C.F.R. § 404.1520a does not automatically require remand, but that the error was not harmless on the facts of the present case. Accordingly, the Fourth Circuit reversed the district court's order with instructions to remand to the Administrative Law Judge for appropriate review of claimant's impairment.

Extended Summary: In 2010, the Social Security Administration ("SSA") denied Constance L. Patterson's ("Patterson") application for disability insurance benefits. Patterson filed a request for a hearing, after which an Administrative Law Judge ("ALJ") affirmed the SSA's decision. The ALJ found Patterson was not disabled during the period for which she sought benefits based primarily on the conclusions of one doctor. Patterson sought review of the ALJ's decision on the grounds that the ALJ (1) failed to follow the special technique outlined in 20 C.F.R. § 404.1520a and (2) reached a decision without considering other medical evidence. The SSA's Appeals Council denied relief and Patterson subsequently filed suit in federal district court. The magistrate recommended affirming the SSA, on the grounds that (1) substantial evidence supported all of the ALJ's challenged findings and (2) the ALJ's failure to articulate his findings in accordance with the special technique regulation constituted harmless error. The district court adopted the magistrate's recommendation and affirmed the SSA's decision.

On appeal, Patterson sought to remand the case to the SSA for proceedings consistent with the regulations. Counsel for the SSA conceded the ALJ failed to apply the special technique regulation, but argued remand was unnecessary because the Fourth Circuit could conduct the analysis itself in determining whether substantial evidence supported the ALJ's denial of benefits. The court disagreed. The court found the ALJ's failure to use the special-technique regulation frustrated effective judicial review. In deciding this issue of first impression, the Fourth Circuit noted a split among its sister circuits on whether harmless error review applies. The court disagreed with the Sixth Circuit's holding in Rabbers v. Comm'r Soc. Sec. Admin., 582 F.3d 647 (6th Cir. 2009), that the special technique regulation offers only non-binding guidance for the benefit of the ALJ. The court reasoned that the plain language of the regulation describes what the SSA must do and the fact that the SSA chose to codify the procedure in a regulation prevents a conclusion that the special technique process was simply for the benefit of ALJs. Further, the court reasoned, an ALJ's failure to properly document application of the special technique would rarely be harmless because such a failure prevents judicial review.

The court noted that although the failure to follow the special technique regulation may not always require remand, the error did require remand in this case because the ALJ did not explain how he weighed all relevant evidence, nor did he explain how he reached his conclusions about the severity of the mental impairment as required by the regulation. The court did not take a position on the merits of Patterson's application for disability benefits because reviewing the ALJ's mental impairment evaluation was beyond the scope of its review. Ultimately, the Fourth Circuit reversed the district court's order with instructions to remand to the SSA for proceedings consistent with its own regulations in the interest of judicial efficiency.

To read the full opinion, click here.

Panel: King, Duncan, and Keenan, Circuit Judges

Argument Date: 12/07/2016

Date of Issued Opinion: 01/19/2017

Docket Number: No. 15-2487

Decided: Reversed and remanded with instructions by published opinion.

Case Alert Author: Yvette Pappoe, Univ. of Maryland Carey School of Law

Counsel: ARGUED: William Daniel Mayes, SMITH, MASSEY, BRODIE, GUYNN & MAYES, P.A., Aiken, South Carolina, for Appellant. Evelyn Rose Marie Protano, SOCIAL SECURITY ADMINISTRATION, Philadelphia, Pennsylvania, for Appellee. ON BRIEF: Nora Koch, Acting Regional Chief Counsel, Charles J. Kawas, Acting Supervisory Attorney, Office of the General Counsel, SOCIAL SECURITY ADMINISTRATION, Philadelphia, Pennsylvania; William N. Nettles, United States Attorney, Marshall Prince, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Columbia, South Carolina, for Appellee.

Author of Opinion: Judge Duncan

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/23/2017 10:47 AM     4th Circuit     Comments (0)  

February 22, 2017
  United States v. Robinson -- Fourth Circuit
Gun Owners, Beware: Armed = Dangerous

Areas of Law: Fourth Amendment, Second Amendment

Issue Presented: Whether a law enforcement officer is justified in frisking a person whom the officer has lawfully stopped and whom the officer reasonable believes to be equipped with a firearm, if state law allows persons to carry concealed firearms with a permit.

Brief Summary: The United States Court of Appeals for the Fourth Circuit affirmed the district court's denial of the defendant's motion to suppress a firearm uncovered during a frisk, because the frisk was justified. Citing Terry v. Ohio, 392 U.S. 1 (1968), and Pennsylvania v. Mimms, 434 U.S. 106 (1997), the Fourth Circuit held that when an officer reasonably suspects the person he has stopped is armed, the officer is "warranted in the belief that his safety . . . [is] in danger," thus justifying a Terry frisk. Accordingly, the Fourth Circuit concluded that because the officers made a lawful traffic stop and had reasonable suspicion to believe that the defendant was armed, the frisk was lawful.

Extended Summary: On the afternoon of March 24, 2014, the West Virginia Police Department received an anonymous tip. The tipster stated that a black male in the parking lot of a 7-Eleven had just loaded a firearm, concealed it in his pocket, and climbed into a blue-green Toyota Camry being driven by a white woman. Knowing that the parking lot was frequently used as a site for drug trafficking, Officer Hudson and Captain Roberts immediately responded. After observing a blue-green Toyota Camry driven by a white woman with a black male passenger who were not wearing seatbelts, Officer Hudson effected a traffic stop. Officer Hudson asked the driver for her license, registration, and proof of insurance. He also asked the passenger, the appellant, Shaquille Robinson, for his identification and to step out of the car.

As Robinson was exiting the vehicle, Captain Roberts asked Robinson if he had any weapons on him. Robinson "gave [Roberts] a weird look." Captain Roberts took the look to mean, "I don't want to lie to you, but I'm not going to tell you anything [either]." At that point, Captain Roberts directed Robinson to put his hands on the car and performed a frisk for weapons, recovering a loaded gun from Robinson's pocket.

Robinson was charged with illegal possession of a firearm by a felon. In the district court, he filed a motion to suppress the firearm, arguing that the frisk violated his Fourth Amendment rights. As explained in Terry v. Ohio, 392 U.S. 1 (1968), an officer can frisk a validly stopped person if the officer reasonably suspects the person is "armed and dangerous."

Robinson argued that the officers did not have reasonable suspicion to believe he was dangerous for two reasons. First, at the time of the frisk, West Virginia residents could lawfully carry a concealed firearm if they had a license. Because the police did not know whether Robinson possessed such a license, the tip that a suspect matching his description was carrying a loaded firearm concealed in his pocket was a report of innocent behavior that was not sufficient to indicate that he posed a danger to others. Second, Robinson argued that his behavior during the stop - being compliant, cooperative, and not displaying signs of nervousness - did not create suspicion.

The district court denied Robinson's motion to suppress. The district court explained that the "anonymous tip that [Robinson] [had] recently loaded a firearm and concealed it on his person in a public parking lot in a high-crime area," as well as Robinson's "weird look and failure to verbally respond to the inquiry whether he was armed," gave rise to the officers' reasonable suspicion that Robinson was armed and dangerous.

Robinson appealed the denial of his motion to suppress, and a panel of the Fourth Circuit reversed the district court's decision and vacated Robinson's conviction. The government then filed a petition for rehearing en banc. The full court vacated the panel's judgment and opinion.

Relying on Terry v. Ohio and Pennsylvania v. Mimms, the Fourth Circuit held that when an officer reasonably suspects the person he has stopped is armed, the officer is "warranted in the belief that his safety . . . [is] in danger," thus justifying a Terry frisk. The Fourth Circuit first acknowledged the Supreme Court's statement in Terry discussing the legality of the frisk: "there is the more immediate interest of the police officer in taking steps to assure himself that the person with whom he is dealing is not armed with a weapon that could unexpectedly and fatally be used against him." "[T]he danger," the Fourth Circuit concluded, "was thus found in the presence of a weapon during a forced police encounter."

Second, the Fourth Circuit acknowledged similar language in both Terry and Mimms regarding the relationship between "armed" and "dangerous." In Terry, in approving an officer's frisk of Terry, the Supreme Court stated that "a reasonably prudent man would have been warranted in believing petitioner was armed and thus presented a threat to the officer's safety." In Mimms, the Supreme Court found the frisk there was justified because the bulge in Mimms' jacket "permitted the officer to conclude that Mimms was armed and thus posed a serious and present danger to the safety of the officer." The Fourth Circuit concluded that in both Terry and Mimms, the Supreme Court deliberately linked "armed" and "dangerous," recognizing that the risk of danger is created simply because the person, who was forcibly stopped, is armed. Accordingly, the Fourth Circuit held that, in the present case, because the officers made a lawful traffic stop and had reasonable suspicion to believe that Robinson was armed, the frisk was lawful.

Robinson also argued that Mimms was distinguishable because the frisk there took place in a jurisdiction that made it a crime to carry a concealed deadly weapon, while West Virginia permitted its citizens to carry firearms. Robinson argued that when the person forcibly stopped might be legally permitted to possess a firearm, the risk of danger posed by the firearm is eliminated. The Fourth Circuit rejected this argument as well. Citing Adams v. Williams, 407 U.S. 143, 146 (1972), the Fourth Circuit held that the legality of the frisk does not depend on the illegality of the firearm's possession.

Finally, in dicta, the Fourth Circuit agreed with the district court's findings that the reliable tip that Robinson had recently loaded a firearm and concealed it in his pocket in a public parking lot in a high-crime area, as well as Robinson's failure to verbally respond to the inquiry whether he was armed, gave rise to a reasonable suspicion that Robinson was armed and dangerous. As a result, the Fourth Circuit affirmed the district court's decision.

Judge Harris (together with Chief Judge Gregory, Circuit Judge Motz, and Senior Judge Davis) disagreed with the majority's interpretation of "armed and dangerous." Judge Harris acknowledged that for many years, carrying firearms in public was prohibited or closely regulated, and a concealed gun was indicative of criminal activity and might give rise to "reasonable suspicion" sufficient to justify an investigative stop. However, Judge Harris emphasized, "that is no longer the case, at least in states like West Virginia."

Judge Harris observed that within the last decade, federal constitutional law has recognized new Second Amendment protections for individual possession of firearms, see McDonald v. City of Chicago, 561 U.S. 742, 791 (2010); District of Columbia v. Heller, 554 U.S. 570, 635 (2008); and state law has followed, providing expanded rights to carry guns in public, see United States v. Williams, 731 F.3d 678, 691 (7th Cir. 2013). Citing United States v. Black, 707 F.3d 531, 539-40 (4th Cir. 2013), Judge Harris noted that the Fourth Circuit had held that when a state elects to legalize the public carrying of firearms, the Fourth Amendment equation changes, and public possession of a gun is no longer "suspicious" in a way that would authorize a Terry stop. This view, Judge Harris found, had been supported by the Third, Sixth, and Seventh Circuits.

Therefore, Judge Harris concluded that in a state like West Virginia, which broadly allows public possession of firearms, reasonable suspicion that a person is armed does not by itself give rise to reasonable suspicion that the person also is dangerous, so as to justify a Terry frisk. Additionally, none of the conduct reported in the anonymous tip was illegal under West Virginia law, or unusual where it occurred.

Judge Harris refused to "endorse a rule that puts us on a collision course with rights to gun possession rooted in the Second Amendment and conferred by state legislatures. Nor would [she] adopt a rule that leaves to unbridled police discretion the decision as to which legally armed citizens will be targeted for frisks, opening the door to the very abuses the Fourth Amendment is designed to prevent."

To read the full opinion, click here.

Panel: Chief Judge Gregory, Judges Wilkinson, Niemeyer, Motz, Traxler, King, Shedd, Duncan, Agee, Keenan, Wynn, Diaz, Floyd, Thacker, and Harris, and Senior Judge Davis

Argument Date: 09/22/2016

Date of Issued Opinion: 01/23/2017

Docket Number: No. 14-4902

Decided:
Affirmed by published opinion.

Case Alert Author: Maria Nazarova, Univ. of Maryland Carey School of Law

Counsel: Nicholas Joseph Compton, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Martinsburg, West Virginia, for Appellant. Thomas Ernest Booth, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Kristen M. Leddy, Research and Writing Specialist, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Martinsburg, West Virginia, for Appellant. William J. Ihlenfeld, II, United States Attorney, Jarod J. Douglas, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Wheeling, West Virginia, for Appellee.

Author of Opinion: Judge Niemeyer

Dissenting Opinion:
Judge Harris

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/22/2017 12:52 PM     4th Circuit     Comments (0)  

February 21, 2017
  United States v. Moreno-Tapia -- Fourth Circuit
Since-Vacated Convictions Cannot Undo Conviction or Sentencing Enhancement for Illegal Reentry

Areas of Law: Immigration Law, Criminal Law, Sentencing Guidelines

Issue Presented: Whether an undocumented person can collaterally attack an illegal reentry charge on the ground that his original deportation proceedings was predicated on since-vacated convictions. Whether the District Court wrongly considered since-vacated convictions when determining a defendant's sentencing range under the "crime of violence" provision in the Sentencing Guidelines.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit affirmed the District Court's judgment denying the defendant's motion to vacate his prior removal order and to withdraw his guilty plea to the charge of illegal reentry. Moreover, the Fourth Circuit found no error in the District Court's reliance on the defendant's vacated state convictions in determining his sentencing range under the Sentencing Guidelines.

Extended Summary: This case arose from the illegal reentry of a Mexican native. As a child, defendant-appellant Juan Antonio Moreno-Tapia ("Moreno-Tapia") immigrated to the United States from Mexico with his family. Although his parents and five siblings became legal permanent residents, Moreno-Tapia was unable to obtain legal permanent residency.

In 2006, Moreno-Tapia pled guilty to three charges of indecent liberties with a child, arising from a consensual relationship with a fifteen-year-old girl when he was twenty-one years old. The state court sentenced Moreno-Tapia to a sentence of fifteen to eighteen months' imprisonment and ordered him to register as a sex offender upon release. Neither the state court nor his attorney informed Moreno-Tapia of the immigration consequences associated with his guilty plea. Thereafter, the Department of Homeland Security ("DHS") initiated expedited removal proceedings against Moreno-Tapia. He was deported in 2009.

At some point prior to 2011, Moreno-Tapia reentered the United States without permission and was subsequently arrested. In 2014, Moreno-Tapia was charged with illegal reentry by a removed alien and with failure to register as a sex offender. Moreno-Tapia pled guilty to illegal reentry, and the District Court dismissed the charge for failure to register.

In 2015, Moreno-Tapia moved to vacate his 2006 convictions in state court. Specifically, Moreno-Tapia argued that his lawyer's failure to disclose his plea's immigration consequences rendered his 2006 convictions unconstitutional under the Supreme Court's decision in Padilla v. Kentucky, 559 U.S. 356 (2010). The state court agreed and vacated Moreno-Tapia's 2006 convictions. Moreno-Tapia then returned to the District Court, moving to (1) vacate his 2009 removal order and withdraw his 2014 guilty plea for illegal reentry and (2) dismiss both counts of his 2014 indictment. The District Court denied both motions. On appeal, Moreno-Tapia challenged his federal charges and the enhancement of his sentence due to his since-vacated convictions.

To establish illegal reentry, the government must prove the defendant's prior removal, which generally requires a DHS removal order. The defendant, however, may bring a collateral attack against a removal order by demonstrating the following: (1) the defendant exhausted available administrative remedies; (2) the deportation proceedings improperly deprived the defendant of the opportunity for judicial review; and (3) the order's entry was fundamentally unfair. Moreno-Tapia argued that his immigration proceedings were fundamentally unfair, because they were grounded on unconstitutional, since-vacated convictions.

The Fourth Circuit affirmed the District Court's judgment. The Fourth Circuit declined to decide whether due process permits a collateral attack against an immigration order based on the constitutionality of an underlying conviction. Instead, the Fourth Circuit concluded that Moreno-Tapia's state convictions were in fact constitutional despite being vacated. Because the Supreme Court's 2010 decision in Padilla does not apply retroactively, the failure to warn Moreno-Tapia of his plea's immigration consequences did not render his 2006 convictions unconstitutional.

Turning to his sentence, Moreno-Tapia argued that the District Court improperly considered his since-vacated convictions when calculating his Sentencing Guidelines range. Rejecting this argument, the Fourth Circuit asserted that the relevant time for determining whether a prior conviction triggers enhancement under the "crime of violence" provision is the date of deportation, rather than the date of the subsequent illegal reentry charge or sentencing hearing. The Fourth Circuit articulated two reasons for its conclusion. First, the enhancement provision is written in the past tense, applying only if a defendant "previously was deported . . . after[] a conviction." Second, the enhancement provision did not expressly exclude since-vacated convictions from consideration. The Fourth Circuit further declined to find an exception for unconstitutional convictions, emphasizing again that Moreno-Tapia's state convictions were in fact constitutional.

To read the full opinion, click here.

Panel: Judges Harris, Traxler, and Diaz

Argument Date: 10/28/2016

Date of Issued Opinion: 01/26/2017

Docket Numbers: No. 15-4610

Decided: Affirmed by published opinion

Case Alert Author: Linda Morris, Univ. of Maryland Carey School of Law

Counsel:
John Arthur Duberstein, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Greensboro, North Carolina, for Appellant. Anand P. Ramaswamy, OFFICE OF THE UNITED STATES ATTORNEY, Greensboro, North Carolina, for Appellee. ON BRIEF: Louis C. Allen, Federal Public Defender, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Greensboro, North Carolina, for Appellant. Ripley Rand, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Greensboro, North Carolina, for Appellee.

Author of Opinion: Judge Harris

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/21/2017 04:39 PM     4th Circuit     Comments (0)  

  United States v. Schmidt -- Fourth Circuit
Americans Abroad: No Transfer of Citizenship? No Property Abroad? You Are Still a "Traveler in Foreign Commerce" under U.S. Jurisdiction

Areas of Law: Criminal Law, Habeas Corpus

Issue Presented: Whether the defendant's "travel in foreign commerce" for purposes of 18 U.S.C. § 2423(c) ended after he departed the United States for the Philippines, got a work permit, had a full-time job, rented a home, used a local driver's license, and stayed in the Philippines for eighteen months.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that the defendant was travelling in foreign commerce from the time he departed the United States until the time of his illicit sexual conduct in Cambodia. Citing United States v. Jackson, 480 F.3d 1014 (9th Cir. 2007) and United States v. Bollinger, 798 F. 3d 201 (4th Cir. 2015), the Fourth Circuit construed "travel in foreign commerce," under 18 U.S.C. § 2423(c), as any movement abroad that maintains some nexus with the United States. Where Richard Schmidt kept a substantial amount of money in a United States bank account, never purchased any property abroad, and never made an effort to obtain permanent legal status in another country, the Fourth Circuit found that he was merely a visitor in the Philippines and Cambodia. Therefore, the Fourth Circuit reversed the district court's grant of the defendant's habeas corpus petition.

Extended Summary: Richard Schmidt ("Schmidt") is a sexual predator who has been repeatedly convicted of sex offenses involving young boys. In June 2002, to avoid arrest for allegedly making unauthorized contact with a minor in violation of his parole, Schmidt fled the United States for the Philippines. In the Philippines, Schmidt worked as a school instructor until he was arrested by Philippine authorities on charges of once again sexually molesting young boys. In December 2003, during a period of pre-trial release, Schmidt fled to Cambodia. His pattern of sex misconduct continued there and he was arrested by Cambodian authorities. Schmidt was subsequently deported to the United States to face numerous criminal charges, including a violation of 18 U.S.C. § 2423(c) ("§ 2423(c)") for illicit sexual conduct in Cambodia. Schmidt pled unconditionally guilty to this charge and was sentenced to a prison term of fifteen years and a lifetime of supervised release.

Schmidt filed a petition for a writ of habeas corpus under 28 U.S.C. § 2254 in the United States District Court for the District of Maryland. He argued that he was innocent of violating § 2423(c) and that his counsel was ineffective for failing to notice this defect at the time he entered his plea.

Section 2423(c) provides that "[a]ny United States citizen or alien admitted for permanent residence who travels in foreign commerce, and engages in any illicit sexual conduct with another person shall be fined under this title or imprisoned not more than 30 years, or both."

Schmidt contended that his travel in foreign commerce ended during his stay in the Philippines, long before his illicit sexual conduct in Cambodia. He further claimed that any subsequent travel, such as his flight to Cambodia, was not independent travel in foreign commerce for purposes of § 2423(c). The district court agreed.

The Fourth Circuit disagreed, holding that Schmidt was "traveling in foreign commerce" from the time he departed the United States until the time of his illicit sexual conduct in Cambodia. The Fourth Circuit started its analysis by interpreting the term "travel in foreign commerce." First, the Fourth Circuit held that the term "travel" did not simply encompass movement from one place to another, but instead denoted a broader concept of movement abroad. Citing the Ninth Circuit's decision in United States v. Jackson, 480 F.3d 1014 (9th Cir. 2007), the Fourth Circuit found that a person might still be traveling even after a significant amount of time in a given location so long as the visit was sufficiently transient or contemplated eventual departure. Thus, the Fourth Circuit concluded that travel could continue until a party either returned to his or her place of origin or permanently resettled elsewhere. Second, citing United States v. Bollinger, 798 F. 3d 201 (4th Cir. 2015), the Fourth Circuit held that "foreign commerce" required some nexus with the United States. Therefore, the Fourth Circuit construed "travel in foreign commerce" as "movement abroad that maintain[ed] some nexus with the United States."

Schmidt first argued that his travel in foreign commerce ended shortly after he arrived in the Philippines because he got a work permit, had a full-time job, rented a home, used a local driver's license, and remained in the Philippines for eighteen months. The Fourth Circuit disagreed, holding that Schmidt's status remained transient in the Philippines and Cambodia. The Fourth Circuit observed that Schmidt stayed in the Philippines on tourist visas and worked using an "alien employment permit" for "non-resident foreign nationals." Further, the Fourth Circuit found that Schmidt maintained a substantial amount of money in a United States' bank account, and never purchased a home or other property abroad. Specifically, the Fourth Circuit noted that Schmidt continually traveled on a United States passport and made no effort to obtain permanent status in another country. Therefore, the Fourth Circuit concluded that he was "just a visitor in the Philippines and Cambodia."

Schmidt also argued that his travel in foreign commerce ended shortly after he arrived in the Philippines because he had no intention of returning to the United States. The Fourth Circuit, however, observed that the element of travel and requisite nexus with the United States was an objective inquiry that did not turn solely on self-serving and subjective allegations of intent. Even though intent to permanently resettle might be one factor in determining when relevant travel in foreign commerce comes to an end, the Fourth Circuit found that it was not dispositive.

Finally, the Fourth Circuit compared Schmidt's case with United States v. Jackson. In United States v. Jackson, the Ninth Circuit concluded that the defendant's travel in foreign commerce ended after he moved to Cambodia, purchased a home, and commenced the five-year residency requirement for Cambodian citizenship. The defendant and his partner also sold their home and remaining property in the United States, transferring all their assets to Cambodia. The Fourth Circuit found that Schmidt's stay displayed none of these features. Therefore, the Fourth Circuit reversed the district court's decision and remanded for reinstatement of the judgment of conviction.

To read the full opinion, click here.

Panel: Judges Wilkinson, Agee, and Harris

Argument Date: 12/06/2016

Date of Issued Opinion: 01/04/2017

Docket Number: No. 16-6567

Decided: Reversed by published opinion

Case Alert Author: Ziyi He, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Sujit Raman, OFFICE OF THE UNITED STATES ATTORNEY, Greenbelt, Maryland, for Appellant. Mary Elizabeth Davis, DAVIS & DAVIS, Washington, D.C., for Appellee. ON BRIEF: Rod J. Rosenstein, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellant.

Author of Opinion: Judge Wilkinson

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/21/2017 10:49 AM     4th Circuit     Comments (0)  

February 16, 2017
  United States v. Barret
Headline: Second Circuit Rules That Testimony of a Former Co-Defendant Who Pleads Guilty During Trial is Admissible During the Same Trial, With Appropriate Precautions

Area of Law: Criminal

Issue Presented: Whether the testimony of a former co-defendant who switches his plea to guilty and agrees midtrial to testify against the remaining co-defendants is admissible, provided that steps are taken to avoid undue prejudice to the remaining defendants.

Brief Summary:
This case developed from a joint investigation by the United States Postal 5 Inspection Service, the Drug Enforcement Administration ("DEA"), and the New York City and New York State Police Departments, into the activities of a large-scale marijuana distribution organization in Queens, New York known as the "Fatherless Crew." The Fatherless Crew is alleged to have run its operation out of the Barret residence in Jamaica, Queens, one other residential property, and several commercial mail receiving agencies ("CMRAs") located in Queens. The first four days of trial consisted primarily of testimony by the case agent, after which one defendant entered into proffer talks with the government. He then entered into a cooperation agreement with the government and changed his plea from innocent to guilty on January 17, 2012. That same day, the government advised the court and defense counsel of its intention to add the now-cooperating defendant to its witness list. The remaining co-defendants were convicted in the United States District Court for the Eastern District of New York, and they appealed. The Second Circuit joined the Third and Seventh Circuits in holding that a district court may allow such testimony, provided that it takes appropriate steps to avoid causing unfair prejudice to the remaining co‐defendants. To read the full opinion, please visit http://www.ca2.uscourts.gov/de...abfc524b541/2/hilite/

Significance, if Any: Issue of first impression in the Second Circuit.

Extended Summary: On October 5, 2010, ten packages weighing roughly 120 kilograms were sent from Arizona to three CMRAs in Flushing. Investigators observed Wilson pick up nine of the boxes and deliver them to the Barret residence. Investigators later discovered the tenth box at another CMRA in Flushing, and seized 10.63 kilograms of marijuana from the box. In addition, on August 19, September 2, and 23, 2010, investigators conducted "trash pulls" of garbage left outside the Barretr residence and discovered bags containing remnants of marijuana, bags with marijuana residue and rubber bands.

Following Barret's arrest, a New York Police Department SWAT team executed a search warrant at the Barret residence. The police also arrested Scarlett, Forrest and several others. During their search of the residence, investigators discovered an open box, along with one bale of marijuana on the kitchen counter and another bale on the floor. Investigators also opened the remaining unopened parcels and found more 13 bales of marijuana. The total weight of the marijuana recovered from the packages exceeded 95.7 kilograms. Investigators recovered approximately 20.4 kilograms more of marijuana elsewhere in Barret's house.

The first four days of trial in the United States District Court for the Eastern District of New York consisted primarily of testimony by the case agent, after which Forrest entered into proffer talks with the government. He entered into a cooperation agreement with the government and changed his plea from innocent to guilty on January 17, 2012. That same day, the government advised the court and defense counsel of its intention to add Forrest to its witness list.

Scarlett, Mitchell, and co-defendant Ryan Anderson objected and moved to exclude Forrest's testimony, arguing: (1) Forrest participated in defense strategy before entering into his cooperation agreement, enabling him to report on such strategies to the government in violation of the co-defendants' Sixth Amendment rights to counsel; (2) Forrest was present at trial for the testimony of the government's first witness, violating Rule 615 of the Federal Rules of Evidence which requires the exclusion of witnesses from the courtroom; and (3) Forrest's testimony would likely refute assertions made during the defense's opening and arguments that were critical to the defense. Nonetheless, the testimony was admitted and the defendants were ultimately convicted.

On appeal, the Second Circuit noted that "the question of whether a district court may permit the testimony of co-defendants who change their pleas to guilty mid-trial and testify for the government is a question of first impression in our Circuit." The court ruled: "We join our sister Circuits in holding that a district court may allow such testimony, but must take appropriate steps to avoid causing unfair prejudice to the remaining co-defendants.

The court then explained what those "appropriate steps" involve. First, the district court must ensure that the testimony of the former co-defendant is admitted "only for the limited purpose of testifying to events other than the witness's involvement in joint defense planning," so that no testimony is given about the defense strategy. Second, the district court must "deliver adequate cautionary instructions to the jury to make certain that the jury does not draw any adverse or unfair inferences against the remaining co-defendants, does not use the former co-defendant's admission as guilt as evidence of the guilt of the remaining co-defendants, and does not give the former co-defendant's testimony undue weight." Here, the court approved of the jury instructions that the district court had given, and affirmed the conviction.
To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...efc17f8cf2d/1/hilite/

Panel (if known): Circuit Judges Pooler, Hall, and Carney

Argument Date: 1/6/16

Date of Issued Opinion: 2/15/17

Docket Number: Nos. 12‐4663(L), 13‐3800, 14‐573, 14‐2014

Decided: Affirmed

Case Alert Author: Belino Voshtina

Counsel: James M. Branden, New York, NY, for Defendant-Appellant Christopher Barret. Michael H. Sporn, New York, NY, for Defendant‐Appellant Omar Mitchell. Peter Tomao, Garden City, NY, for Defendant‐Appellant Leon Scarlett. Tyler J. Smith, Assistant United States Attorney (Amy Busa, Peter A. Norling, Assistant United States Attorneys, on the brief), for Robert L. Capers, United States Attorney for the Eastern District of New York, New York, NY, for Appellee.

Author of Opinion: Judge Pooler

Circuit: Second Circuit

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 02/16/2017 04:46 PM     2nd Circuit     Comments (0)  

February 15, 2017
  Brown Jordan International, Inc., v. Carmicle - 11th Circuit
Headline: Eleventh Circuit holds an interruption of service is not required to be compensated under the Computer Fraud and Abuse Act ("CFAA").

Area of Law: Civil, Commerce, Employment

Issue: Whether interruption of service is required to be compensated under the CFAA.

Extended Summary: On March 11, 2014, Appellee, Brown Jordan International, Inc. ("Brown Jordan"), initiated a suit against Appellant, Christopher Carmicle ("Carmicle"), including claims for violation of the CFAA and of the Stored Communications Act ("SCA"). After a bench trial, the district court concluded Carmicle's access to the email accounts violated the CFAA and SCA. On appeal, Carmicle contended the district court erred in finding a violation of the CFAA because there was no interruption of service, and thus no "loss." In a case of first impression, the Eleventh Circuit found a "loss" included the direct costs of responding to a CFAA violation, without it being related to an interruption of service. Accordingly, the Eleventh Circuit affirmed the lower court's determination on the CFAA violation. The court also rejected the other contentions raised by Carmicle.

To view the full opinion: http://media.ca11.uscourts.gov...ub/files/201611350.pdf

Panel: Marcus and Black, Circuit Judges, and Cohen (United States District Judge for the Northern District of Georgia, sitting by designation).

Argument: November 18, 2016

Date of Issued Opinion: January 25, 2017

Docket Number: 16-11350

Decided: Affirmed

Case Alert Authors: Luis Garcia, Shantell Monreal, and Uxsunn Ramirez

Counsel:
Glenn Alan Cohen for Appellant
Lloyd B. Chinn for Appellees

Author of Opinion: Black, Circuit Judge

    Posted By: Gary Kravitz @ 02/15/2017 03:46 PM     11th Circuit     Comments (0)  

  Dukes v. Deaton - 11th Circuit
Headline: Eleventh Circuit holds officers who used a "flashbang" without visually inspecting a room violated the Fourth Amendment, but were entitled to qualified immunity.

Area of Law: Criminal, Constitutional law

Issue: Whether officers who used a "flashbang" without visually inspecting a room, in violation of the Fourth Amendment, are entitled to qualified immunity.

Extended Summary: On July 21, 2010, law enforcement officers executed a search warrant on an apartment connected with the sale of narcotics. Prior to entering the apartment, one of the officers used a "flashbang" to disorient the occupants, which included Appellant, Treneshia Dukes ("Dukes"). Dukes filed a complaint for various claims, including violation of her right to be free from excessive force under the Fourth Amendment. The district court entered summary judgment in favor of the officers based on qualified immunity. On appeal, the Eleventh Circuit noted the decisions of other circuit courts, which found the use of a "flashbang" in similar circumstances, constituted excessive force in violation of the Fourth Amendment. While the Eleventh Circuit agreed with that determination, the court held qualified immunity applied because the use of excessive force was not "clearly established" as a statutory or constitutional violation at the time the search warrant in this case was executed. Accordingly, the summary judgment was affirmed.

To view the full opinion: http://media.ca11.uscourts.gov...b/files/201514373.pdf

Panel: William Pryor and Rosenbaum, Circuit Judges, and Ungaro (United States District Judge for the Southern District of Florida, sitting by designation)

Argument: December 14, 2016

Date of Issued Opinion: January 26, 2017

Docket Number: 15-14373

Decided: Affirmed

Case Alert Authors: Luis Garcia, Shantell Monreal, and Uxsunn Ramirez

Counsel:
Mario Bernard Williams for Appellant Treneshia Dukes
Wayne Steven Melnick for Appellees Nicholas Deaton and Steve Branham.

Author of Opinion: William Pryor, Circuit Judge

    Posted By: Gary Kravitz @ 02/15/2017 03:39 PM     11th Circuit     Comments (0)  

February 14, 2017
  Craig Williams and Shaun T. Walker v. Sec. Pa. Dept. of Corrections - Third Circuit
Headline: Third Circuit provides fair and clear warning that "those no longer subject to the death penalty have a due process right to be free from indefinite conditions of solitary confinement"; qualified immunity will not bar future claims

Area of Law: Due Process, Qualified immunity

Issues Presented: Whether there is a constitutionally protected liberty interest that prohibits the State from continuing to house inmates in solitary confinement on death row after they have been granted resentencing hearings, without meaningful review of the continuing placement?

Brief Summary:
Plaintiffs sued various Department of Corrections officials, alleging the officials violated their Fourteenth Amendment rights to due process by continuing to subject them to the deprivations of solitary confinement on death row without meaningful review of their placements for years after their death sentences had been vacated. Plaintiffs' appeals from summary judgment rulings for the defendants were consolidated.

On appeal, the Third Circuit established that there is a constitutionally protected liberty interest that prohibits the State from continuing to house inmates in solitary confinement on death row after they have been granted resentencing hearings, without meaningful review of the continuing placement. The Due Process Clause of the Fourteenth Amendment limits the State's ability to subject an inmate to the deprivations of death row once the death sentence, initially relied upon to justify such extreme restrictions, is no longer operative. However, because this principle was not clearly established, the defendants were entitled to qualified immunity.

Extended Summary: Craig Williams and Shawn T. Walker ("Plaintiffs") are inmates in the custody of the Pennsylvania Dept of Corrections ("DOC"). Each was sentenced to death and housed on the death row of his respective institution. Eventually, their death sentences were vacated, but several years elapsed before they were resentenced to life without parole and placed in the general population. In the interim, Plaintiffs were kept on death row in solitary confinement, without regular placement reviews to determine if the deprivations of those placements were necessary.

Each Plaintiff brought suit, seeking damages from various DOC officials ("Defendants"). Their suits alleged the officials violated their Fourteenth Amendment rights to due process by continuing to subject them to the deprivations of solitary confinement on death row without meaningful review of their placements after their death sentences had been vacated. Defendants argued that DOC policy required Plaintiffs' continued confinement on death row until they were resentenced to life imprisonment. According to Defendants, this policy only permitted removal from death row when a death sentence had actually been modified. They claimed that the grants of resentencing merely put Plaintiffs' sentences on hold because reimposition of the death penalty was possible. In any event, Defendants asserted they were protected from Plaintiffs' suits by qualified immunity.

Defendants' motions for summary judgment were granted for both cases. Plaintiffs' appeals from those rulings were consolidated. The Third Circuit established there is a constitutionally protected liberty interest under the Due Process Clause of the Fourteenth Amendment that prohibits indefinite conditions of solitary confinement but that defendants were entitled to qualified immunity because the right had not yet been clearly established. The Court conducted a two-part inquiry. First, it determined whether a right of the Plaintiffs had been violated; and second, it determined whether that right was clearly established when violated such that it would have been clear to a reasonable person that his conduct was unlawful.

With regards to the first inquiry, the Court held that "virtual isolation for almost eight years" in solitary confinement created a protected liberty interest under the Fourteenth Amendment. The Court explained a liberty interest may arise from the Constitution or "from an expectation or interest created by state laws." To rise to the level of a liberty interest, the right alleged must confer "freedom from restraint which . . . imposes atypical and significant hardship on the inmate in relation to the ordinary incidents of prison life."

Plaintiffs sufficiently alleged atypical hardship for several reasons. Plaintiffs' isolation on death row lasted six and eight years after the initial justification for subjecting them to such extreme deprivation, their death sentences, ceased to exist. Moreover, their isolation contrasted sharply with other common forms of solitary confinement because it was indefinite. Plaintiffs' continued confinement on death row after their death sentences were vacated continued for years with no ascertainable date for their release into the general population. The Court noted researchers have found that even a few days in solitary confinement can cause cognitive disturbances. Thus, the conditions Plaintiffs had to endure while awaiting re-sentencing constituted an "atypical . . . hardship on the inmate in relation to the ordinary incidents of prison life."

The Third Circuit also found Plaintiffs sufficiently alleged significant hardship. It explained in detail that the conditions Plaintiffs experienced on death row "differ[ed] significantly from 'routine' prison conditions in Pennsylvania state institutions." For example, Plaintiffs were confined to their respective cells for twenty-two to twenty-four hours a day and ate all meals accompanied only by the emptiness within the walls of their cells, among other hardships. Additionally, the Court again noted research has shown that such conditions can trigger devastating psychological consequences, and that these hardships are stark departures from conditions in the general prison population.

In opposition to the Court's reasoning, Defendants argued that Plaintiffs' continued confinement on death row could not be atypical since the appropriate standard in this case is not the general prison population. Instead, Defendants claimed the metric that should have been applied was either the conditions imposed on inmates eligible for the death penalty, or what Plaintiffs' convictions have "authorized the State to impose." However, the Court found Defendants' argument failed for several reasons. First, the Court explained that the "similar sentence" standard Defendants proposed was inconsistent with Third Circuit precedent. The Court had previously judged the conditions of solitary confinement "in relation to the ordinary incidents of prison life" or relative to "'routine' prison conditions." Second, the metric Defendants proposed was unworkable in the context of this case. The Court explained it could not resolve Plaintiffs' claims by reference to "inmates serving similar sentences" because, during the period at issue, Plaintiffs were not serving any sentence whatsoever. Their sentences had been vacated and resentencing had been ordered. Defendants' other metric - what the State is authorized to impose - was also based on a similarly mistaken premise.

Finally, the Court pointed out that the cases Defendants relied on in arguing against Plaintiffs' liberty interest were readily distinguishable from the cases at hand. While those cases held that inmates confined under a death sentence did not have a liberty interest that precludes confinement on death row without regular review, those inmates were all confined pursuant to death sentences that had not been vacated. Accordingly, confinement on death row was not a significant or atypical hardship for them. Rather, it was expressly within the "expected perimeters of the sentence imposed." The Court found that their liberty interests were thus unparalleled to those of inmates with active death sentences that arguably require continued placement on death row.

For these reasons, the Court held that Plaintiffs had a due process liberty interest in avoiding the extreme sensory deprivation and isolation endemic in confinement on death row after their death sentences had been vacated.

The Third Circuit next held that, although the precedent that existed when Defendants continued Plaintiffs' confinement on death row should have suggested caution, it was not sufficient to inform Defendants that their conduct violated clearly established law. Instead, Defendants were merely following a prison policy that required appellants to remain on death row until they were resentenced. The Court concluded that Defendants read the policy as creating a rule that required "prisoners like Williams and Walker, whose death sentences have been vacated but who are still exposed to the death penalty, [to] remain [on death row] until resentenced to something other than death." Thus, Defendants' continued confinement of Plaintiffs on death row resulted from a reasonable interpretation of the policy. According to the Court, Defendants' actions were neither "plainly incompetent" nor a "knowing[] violat[ion of] the law." Defendants should have qualified immunity from suit.

In conclusion, the Third Circuit affirmed the district courts' grants of summary judgment based on qualified immunity in favor of all Defendants and against both Plaintiffs. The Court also stressed that despite their ruling against Plaintiffs, its holding-- that Plaintiffs had a protected liberty interest-- provided "fair and clear warning" that qualified immunity will not bar such claims in the future.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/141469p.pdf

Panel: McKee, Fuentes, and Roth, Circuit Judges

Argument Date: April 18, 2016

Date of Issued Opinion: February 9, 2017

Docket Number: No. 14-1469

Decided: Affirmed

Case Alert Author: Brooke A. Hutchins

Counsel: James J. Bilsborrow, Esq., Counsel for Appellants; John G. Knorr III, Kemal A. Mericli, Esq., Randall J. Henzes, Esq., and Claudia M. Tesoro, Esq., Counsel for Appellees

Author of Opinion: Circuit Judge McKee

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 02/14/2017 01:51 PM     3rd Circuit     Comments (0)  

February 11, 2017
  In re ACTOS End-Payer Antitrust Litigation
Headline: Second Circuit Revives Pharmaceutical Antitrust Suit Over Takeda's Diabetes Drug ACTOS

Areas of Law: Patent; Antitrust

Issue Presented: Whether the plaintiffs adequately alleged that Takeda had harmed them by filing false patent descriptions about its diabetes drug ACTOS

Brief Summary: A group of drug purchaser plaintiffs sued Takeda Pharmaceuticals, alleging that it had falsely described two patents regarding its diabetes drug ACTOS, thereby delaying competitors from selling generic versions of the drug and causing them to pay monopoly prices. The United States District Court for the Southern District of New York dismissed their complaint, finding that the drug purchasers had not plausibly alleged that Takeda's allegedly false descriptions caused other generic competitors to delay their entry into the market. The Second Circuit affirmed in part and vacated in part, finding that the causation theory was plausible with respect to one out of the ten generic manufacturers. To read the whole opinion, please visit http://www.ca2.uscourts.gov/de...423bbfb3495/2/hilite/

Extended Summary: Takeda Pharmaceuticals received a patent for its diabetes drug ACTOS in the 1980s. The patent had an expiration date of January 17, 2011. Importantly, this expiration date marked the earliest point at which generic forms of ACTOS could enter the market. Takeda subsequently filed two more patents for the same drug, both of which had a later expiration date of June 19, 2016. According to the complaint, Takeda falsely represented the type of these patents to the FDA, thereby making it appear as though June 19, 2016 was the date until which generic competitors had to wait to enter the market.

Plaintiffs, purchasers of the drug ACTOS, brought a lawsuit alleging that Takeda's false descriptions of the two later patents to the FDA delayed competitors from offering generic versions of ACTOS on the market, thereby forcing plaintiffs to pay monopoly prices for longer than necessary. The district court dismissed the plaintiffs' claims, finding that plaintiff's complaint failed to adequately plead that the false descriptions had caused the generic competitors to delay entering the market.

The plaintiffs then appealed to the Second Circuit, alleging two theories of causation. The first theory was that Takeda's allegedly false descriptions of the two subsequent patents forced other pharmaceutical companies to file certifications, which triggered an exclusivity period. Plaintiffs claim that but for the false descriptions, other companies would not have filed certifications and no exclusivity period would have arisen. The Second Circuit concluded, however, that the complaint lacked the factual allegations necessary to allege that the other companies even knew Takeda had described the subsequent patents as drug product patents.

For the second theory of causation, Plaintiffs alleged that Takeda's allegedly false descriptions of the two subsequent patents caused FDA to make an announcement that they would not approve an ACTOS ANDA, and that this announcement specifically caused Teva (one of the generic manufacturers) to stall entering the market. The Second Circuit found that this theory of causation was plausible. Accrodingly, the Second Circuit affirmed the dismissal in part, and vacated it in part, explaining that the complaint could go forward specifically on "plaintiffs' theory as to Teva."

Panel: Circuit Judges Jacobs and Livingston; District Judge Rakoff

Argument Date: 09/16/2016

Date of Issued Opinion: 02/08/2017

Docket Number:
15-3364

Decided: Affirmed in Part and Vacated in Part

Case Alert Author: Alexandra Dobles

Counsel: Steve D. Shadowen, Hilliard & Shadowen LLP for Plaintiffs-Appellants; Rohit K. Singla, Munger, Tolles & Olson LLP for Defendants-Appellees

Author of Opinion: Judge Rakoff

Case Alert Circuit Supervisor:
Emily Gold Waldman

    Posted By: Emily Waldman @ 02/11/2017 05:21 PM     2nd Circuit     Comments (0)  

February 9, 2017
  Coutard v. Municipal Credit Union - Second Circuit
Headline: Second Circuit Vacates Grant of Summary Judgment to Employer who Denied FMLA Leave To Employee to Care for Grandparent

Area of Law: Employment

Issue Presented: Whether an employee gave sufficient notice for FMLA leave when it informed its employer that it needed leave to take care of a sick grandparent but not that the grandparent was in loco parentis.

Brief Summary: The Second Circuit vacated a decision by the United States District Court for the Eastern District of New York which had granted summary judgment to the Municipal Credit Union (MCU), an employer, who was sued by its employee alleging MCU improperly denied him leave to care for his grandfather under the Family and Medical Leave Act of 1993 ("FMLA"). In seeking leave, the employee had notified MCU that his grandfather was sick, but did not specify that his grandfather was in loco parentis, which would have entitled him to leave to care for him under the FMLA. The Second Circuit held that the case should not have been dismissed because an employer is obligated to inquire further whether an employee is entitled to FMLA once the employer has received sufficient information from the employee that he or she may be entitled to leave.

To read the full opinion, go to:
http://www.ca2.uscourts.gov/de...4ff747ac304/1/hilite/

Extended Summary: The Second Circuit Court of Appeals reversed a judgment of the United States District Court for the Eastern District of New York regarding an interpretation and application of the Family and Medical Leave Act of 1993 ("FMLA"), 29 U.S.C. § 2601 et seq. The plaintiff, Frantz Coutard, was employed by the defendant, Municipal Credit Union ("MCU"). As defined under the FMLA, MCU is an "employer" and Coutard is an "employee," to which the FMLA applies. Coutard sought leave from his job at MCU to take care of his seriously ill grandfather, who raised him as a child in loco parentis. Under the FMLA, employees are entitled to leave in situations when a grandfather who stood in loco parentis to the employee when the employee was a child under the age 18. When seeking leave, however, Coutard did not mention to MCO that his grandfather raised him in loco parentis. Upon Coutard's request, MCU denied leave stating that the FMLA did not cover leave to take care of a grandparent. Coutard stayed home to take care of his sick grandfather, missing work, and MCU terminated his employment.

The district court ruled that Coutard's failure to mention the nature of his relationship with his grandfather was grounds for dismissal of this case. Coutard appealed on the basis that his failure to tell MCU that his grandfather raised him in loco parentis was not dispositive because MCU did not inform its employees that an in loco parentis relationship could entitle them to FMLA leave, did not inquire whether Coutard had such a relationship with his grandfather, and when he requested FMLA leave, MCU responded categorically that FMLA did not entitle him to such leave to care for a grandparent. In response, MCU maintained that it is the employee's burden, at the time the request for leave is made, to provide all the facts needed to show the employee is entitled to leave.

The Department of Labor regulations, promulgated pursuant to the FMLA, 29 C.F.R. § 825.303(a) and (b) state that: "[a]n employee shall provide sufficient information for an employer to reasonably determine whether the FMLA may apply to the leave request. . . . When an employee seeks leave for the first time for a FMLA-qualifying reason, the employee need not expressly assert rights under the FMLA or even mention the FMLA. . . . The employer will be expected to obtain any additional required information through informal means."

Based on this regulation, the Second Circuit ruled that the obligation of an employee to give notice of his need for FMLA leave is not the obligation to provide the employer with all the necessary details for a definitive determination of the FMLA's applicability. Rather, the court found, in the absence of a request for additional information, an employee provides sufficient notice to its employer if the notice reasonably indicates that the FMLA may apply. The Second Circuit therefore held that the district court erred in ruling the Coutard's notice to MCU was deficient because he failed to specify that in loco parentis relationship with his grandfather at or before his request for FMLA leave and found that the burden was on MCU to request additional information to determine if Coutard was eligible for FMLA leave. Accordingly, the grant of summary judgment by the district court was vacated and the case was remanded for further proceedings.

To read the full opinion, go to:
http://www.ca2.uscourts.gov/de...4ff747ac304/1/hilite/

Panel: Circuit Judges Kearse, Pooler, and Sack

Argument Date: 02/10/2016

Date of Issued Opinion: 02/09/2017

Docket Number: 15-1113

Decided: Vacated and Remanded

Case Alert Author: Leigh Wellington

Counsel: Abdul K. Hassan, Abdul Hassan Law Group for Plaintiff-Appellant; Douglas E. Motzenbecker, Gordon & Rees for Defendant-Appellee.

Author of Opinion: Judge Kearse

Case Alert Circuit Supervisor:
Elyse Diamond

    Posted By: Elyse Diamond @ 02/09/2017 08:32 PM     2nd Circuit     Comments (0)  

February 3, 2017
  Metro Machine Corp. v. Dir., Office of Workers' Comp. Programs, U.S. Dept. of Labor -- Fourth Circuit
Expansive Presumption Under Longshore and Harbor Workers' Compensation Act

Areas of Law: Federal Maritime Workers' Compensation, Administrative Law

Issue Presented: Whether claims for "secondary" injuries and injuries not listed on an original claim form are entitled to the Longshore and Harbor Workers' Compensation Act's presumption that they fall within the Act unless there is substantial evidence to the contrary.

Brief Summary:
The United States Court of Appeals for the Fourth Circuit denied the petition for review of a Benefits Review Board order affirming the ALJ's grant of a medical benefits claim under the Longshore and Harbor Workers' Compensation Act ("the Act"). The Fourth Circuit rejected the petitioner's argument that only primary injuries are entitled to the statutory presumption that they fall within the Act unless there is substantial evidence to the contrary. As long as a claimant identifies a primary injury that arose during work, secondary injuries are also entitled to the presumption. Moreover, the Act does not bar recovery for an injury that a claimant fails to identify on the original claim form but that evolves as a part of the claim without prejudice to the respondent.

Extended Summary: Claimant John Stephenson ("Claimant") began working for petitioner Metro Machine Corporation ("Metro") as a pipefitter in 1983. He had a long history of breathing problems and in 1996 was diagnosed with chronic obstructive pulmonary disease (COPD). On February 18, 2008, Claimant worked in the superstructure of a vessel and inhaled fumes from welding, burning, and the application of epoxy paint for over eight hours. During a subsequent eight-day hospitalization, Claimant was prescribed steroids, inhalers, antibiotics and albuterol. Upon discharge, he was prescribed a nebulizer and oxygen concentrator. After Claimant voluntarily retired in 2011, he was treated for a T7 vertebra fracture that his doctor attributed "most likely" to excessive coughing. In 2012, Claimant filed a claim for compensation under the Act.

The Act requires employers to provide medical care to employees who suffer an "injury." The Act defines injury to include both primary and secondary injuries. Primary injuries are those that arise out of, and in the course of, employment, while secondary injuries are those that "naturally or unavoidably result[]" from primary injuries. The Act also permits a presumption that any claim filed under it is presumed to fall within the Act unless there is substantial evidence to the contrary.

The only injury Claimant identified on his original claim form was exposure to fumes on February 18, 2008, that affected his lungs. At the informal conference regarding the claim, however, the claims examiner recommended payment of benefits for both Claimant's ongoing COPD and his fractured vertebra. Despite the recommendation, the ALJ only considered Claimant's COPD claim and found that he made a prima facie case showing harm, the worsening of the COPD, and a work incident that could have aggravated the harm. Therefore, the ALJ found that the presumption applied to the claim. Claimant moved for reconsideration due to the ALJ's failure to consider his fractured vertebra claim. After granting the motion, the ALJ rejected Metro's argument that the statutory presumption did not apply to the fractured vertebra injury because the Claimant did not identify it in his original claim form. Subsequently, the ALJ found the Claimant made a prima facie case with regard to the fracture and the presumption applied. The Benefits Review Board ("Board") affirmed the ALJ's decision. With regard to the vertebra fracture, the Board rejected Metro's arguments that the presumption could not apply to the claim because: (1) it was a secondary injury; and (2) it was outside the scope of Claimant's initial claim.

On appeal, the Fourth Circuit found no reversible error and denied the petition for review. After rejecting two of Metro's evidentiary arguments regarding the COPD claim, the court turned to Metro's argument that because Claimant's fracture was secondary and not identified in the original claim form, the presumption should not have applied to this claim regardless of whether Claimant made prima facie cases. In support of its argument that secondary injuries were not entitled to the presumption, Metro relied on two split-panel decisions by the Fifth Circuit in addition to the United States Supreme Court case U.S. Indus./Fed. Sheet Metal, Inc. v. Dir., OWCP, 455 U.S. 608 (1982). The Fourth Circuit found that Metro misread U.S. Industries. Contrary to Metro's reading, that case stands for just two propositions: (1) the statutory presumption only applies to injuries actually claimed; and (2) a claim must include a primary injury. Because the ALJ found that Claimant suffered a primary injury when his COPD was exacerbated, U.S. Industries posed no obstacle.

Addressing whether the presumption applied to the vertebra fracture, the court noted that Metro did not challenge that the claim evolved to include this injury. Moreover, Metro was made aware that Claimant was seeking medical benefits for this injury as early as the initial informal conference. Metro therefore could not claim that its ability to defend itself against this claim at the ALJ hearing, 16 months after the initial conference, was prejudiced by the failure of Claimant to initially include the injury.

The court also rejected Metro's argument that the ALJ failed to apply the "naturally or unavoidably results" standard under the Act for secondary injuries. While the court did agree that the ALJ made no reference to this standard, it concluded that the evidence clearly showed that this standard was met and remanding the case would be "futile." Finally, the court rejected Metro's argument that substantial evidence did not support the ALJ's conclusion that Metro failed to rebut the presumption with regard to the fracture.

To read the full opinion, click here.

Panel: Judges Traxler, Floyd and Thacker

Argument Date: 12/8/2016

Date of Issued Opinion: 1/20/2017

Docket Number: No. 15-2525

Decided:
Petition denied by published opinion

Case Alert Author: Annie McGuire, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Frank Nash Bilisoly, VANDEVENTER BLACK, LLP, Norfolk, Virginia, for Petitioners. Gregory Edward Camden, MONTAGNA, KLEIN, CAMDEN, LLP, Norfolk, Virginia; Matthew W. Boyle, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Respondents. ON BRIEF: M. Patricia Smith, Solicitor of Labor, Rae Ellen James, Associate Solicitor, Mark Reinhalter, Counsel for Longshore, Sean G. Bajkowski, Counsel for Appellate Litigation, Office of the Solicitor, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Respondent United States Department of Labor.

Author of Opinion: Judge Traxler

Case Alert Supervisor:
Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/03/2017 01:43 PM     4th 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)  

  Lynch v. Jackson -- Fourth Circuit
Debtors Filing For Bankruptcy May List Higher Amounts Than Actually Spent

Areas of Law: Bankruptcy

Issue Presented: Whether a debtor filing for bankruptcy can use the National and Local Standard amounts for expenses even if his or her actual expenses are lower.

Brief Summary:
The United States Court of Appeals for the Fourth Circuit affirmed the United States' Bankruptcy Court for the Eastern District of North Carolina's holding that debtors seeking bankruptcy relief are entitled to the full National and Local Standard amount for a category of expenses if they incur any expense within the category.

In Ransom v. FIA Card Servs., 562 U.S. 61 (2011), the Supreme Court interpreted 11 U.S.C. §707(b)(2)(A)(ii)(I), and held that an expense amount is applicable to a debtor under the provision "only if the debtor will incur that kind of expense during the life of the plan." However, the Court did not determine how a debtor should list expenses that are lower than the amounts listed in the National and Local Standards. As such, the Fourth Circuit addressed the unanswered question and determined that the plain language of the statute entitles a debtor to list the full amount provided under the National and Local Standards for expenses, even if their incurred expenses are less than the amounts listed by the Standards.

Extended Summary: On April 6, 2015, Plaintiffs Gabriel and Monte Jackson filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Eastern District of North Carolina. The Jacksons made more than the median income for a family of four and therefore were required to complete a means test to determine their disposable income. A test revealing disposable income above a certain level would be considered an abuse of the bankruptcy code and would prevent the debtor from proceeding in Chapter 7. The test required the Jacksons to use Official Form 22A-1 and 22A-2 as provided pursuant to 28 U.S.C. § 2075.

These forms instruct submitters to use certain expense amounts as provided under the National and Local Standards to answer certain questions and to deduct the enumerated expense amounts "regardless of [the submitters'] actual expenses." Following the instructions provided, the Jacksons included the standard expense amounts on their forms. However, on June 3, 2015, Bankruptcy Administrator Marjorie Lynch moved to dismiss the Jacksons' petition for abusing the bankruptcy code. Lynch argued that the official form instructions were incorrect and that a Chapter 7 debtor was "limited to deducting their actual expenses or the applicable National or Local Standard, whichever [was] lesser." The Jacksons argued that the statute was unambiguous in directing debtors to use the full National and Local Standard expense amounts.

The bankruptcy court denied Lynch's motion on the basis that the Jacksons complied with the statute. Lynch filed a notice of appeal on September 23, 2015, and all of the parties subsequently jointly filed a certification to appeal directly to the Fourth Circuit on October 21, 2015. The Fourth Circuit granted the bankruptcy court's recommendation for direct appeal to address the split between bankruptcy courts within the Eastern District of North Carolina over interpretation of 11 U.S.C. § 707(b)(2). Turning to the plain language of the statute, the Fourth Circuit found that it unambiguously established that a debtor is entitled to take the full amount of the Standards' expenses if the debtor incurs any expense in that category. Consequently, the Fourth Circuit affirmed the decision of the bankruptcy court.

To read the full opinion click here.

Panel: Judges Motz, Keenan, and Thacker

Argument Date:
12/06/16

Date of Issued Opinion: 01/04/17

Amended Date: 01/05/17

Docket Number: No. 16-1358

Decided:
Affirmed by published opinion.

Case Alert Author:
Vanessa Destime, Univ. of Maryland Carey School of Law
Counsel: ARGUED: Brian Charles Behr, OFFICE OF THE BANKRUPTCY ADMINISTRATOR, Raleigh, North Carolina, for Appellant. Robert Lee Roland, IV, LAW OFFICES OF JOHN T. ORCUTT, P.C., Raleigh, North Carolina, for Appellees. ON BRIEF: Tara Twomey, J. Erik Heath, NATIONAL CONSUMER BANKRUPTCY RIGHTS CENTER, San Jose, California, for Amicus Curiae.

Author of Opinion: Judge Thacker

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/02/2017 09:36 AM     4th Circuit     Comments (0)  

  Ohio Valley Environmental Coalition et al. v. Fola Coal Co., LLC -- Fourth Circuit
Permit Shield Defense Fails to Protect Noncompliant Coal Company

Areas of Law: Environmental Law

Issues Presented: Whether a National Pollution Discharge Elimination System permit required its permit holder to comply with state water quality standards. Whether the trial court erred by finding that a National Pollution Discharge Elimination System permit holder violated the state water quality standards by discharging ions and sulfates in quantities sufficient to increase conductivity.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit affirmed the District Court's judgment that the Fola Coal Company did not comply with the conditions of its permit and therefore was subject to liability under the Clean Water Act.

Extended Summary:
This case arose out of an action against appellant Fola Coal Company, LLC ("Fola") under the Clean Water Act ("Act"). Pursuant to the Act, National Pollution Discharge Elimination System ("NPDES") permits shield permit holders from liability when their pollution discharges comply with permit conditions. Acting under the approval of the Environmental Protection Agency ("EPA"), the West Virginia Department of Environmental Protection ("Department") is charged with the issuance of West Virginia NPDES permits, which incorporate state water quality regulations. Of particular significance to this case, a West Virginia regulation, titled 5.1.f, provided that permit-covered discharges may not violate applicable water quality standards, "whether or not such standards are delineated in the permit."

In 1996, Fola received a West Virginia NPDES permit, which allowed the facility to discharge into a local waterway. When Fola applied for permit renewal in 2009, it disclosed that its discharges would increase conductivity of the affected waterway in violation of state water quality standards. The Department granted the renewal but did not impose limitations on Fola's conductivity levels.

Appellees Ohio Valley Environmental Coalition, West Virginia Highlands Conservancy, and Sierra Club (collectively "the Coalition") sued Fola under the Act's citizen-suit provision in 2013. The Coalition alleged that Fola discharged ions and sulfates in quantities sufficient to cause increased conductivity and therefore violated the NPDES permit's requirement to comply with state water quality standards. In response, Fola argued that its permit shielded the company from liability, because the Department declined to impose conductivity limits when it renewed the company's permit in 2009. To support its contention, Fola emphasized two points. First, the Department issued a regulatory interpretation that shielded a permit holder from liability upon disclosing its discharges to the Department in 2013. Second, the West Virginia legislature enacted a provision that explicitly prohibited the enforcement of water quality standards against NPDES permit holders in 2015. Rejecting Fola's argument, the District Court held that NPDES permits require compliance with state water quality standards, which Fola violated by depositing significant amounts of ions into the waterway.

On appeal, Fola contended that 5.1.f. regulated the permitting authority only and therefore did not impose obligations on the company to comply with water quality standards. Moreover, in response to the District Court's finding of a violation, Fola argued that (1) it was deprived of "fair notice" of its obligation to comply with water quality standards; (2) it relied on the Department's guidance that West Virginia would not pursue enforcement action; and (3) the District Court engaged in unlawful rulemaking.

Interpreting the NPDES permit as a contract, the Fourth Circuit rejected Fola's argument and held that the text of 5.1.f unambiguously imposed an obligation on the permit holder to comply with state water quality standards. The plain language of 5.1.f and extraneous evidence supported the District Court's determination that NPDES permit holders are obligated to comply with state water quality standards. In particular, the Fourth Circuit emphasized that the Department previously pursued an enforcement action against Fola's parent company for the exact water quality standards at issue in the instant case, removing any doubt that West Virginia intended to hold permit holders liable for violating state regulations. The Fourth Circuit's judgment is consistent with its precedent, which provides that permit holders must comply with all permit terms to be shielded from liability.

Affirming the District Court's finding of a violation, the Fourth Circuit again asserted that Fola's parent company's prior history with enforcement actions provided ample, personalized notice that the NPDES permit was enforceable. The Fourth Circuit also held that, even if Fola believed that West Virginia would not pursue enforcement that did not guarantee that third-party environmental agencies would not do so under the Act's citizen-suit provision. Finally, the Fourth Circuit concluded that the District Court engaged in findings of fact, not unlawful rulemaking.

To read the full opinion, click here.

Panel: Judges Motz, Diaz, and Lee

Argument Date: October 27, 2016

Date of Issued Opinion:
January 4, 2017

Docket Numbers:
No. 16-1024

Decided: Affirmed by published opinion

Case Alert Author: Linda Morris, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Michael Shane Harvey, JACKSON KELLY PLLC, Charleston, West Virginia, for Appellant. Joseph Mark Lovett, APPALACHIAN MOUNTAIN ADVOCATES, Lewisburg, West Virginia, for Appellees. Thomas M. Johnson, Jr., OFFICE OF THE ATTORNEY GENERAL OF WEST VIRGINIA, Charleston, West Virginia, for Amici The State of West Virginia and West Virginia Department of Environmental Protection. ON BRIEF: Robert G. McLusky, Jennifer L. Hughes, JACKSON KELLY PLLC, Charleston, West Virginia, for Appellant. J. Michael Becher, APPALACHIAN MOUNTAIN ADVOCATES, Lewisburg, West Virginia; James M. Hecker, PUBLIC JUSTICE, Washington, D.C., for Appellees. Karen C. Bennett, Samuel L. Brown, Brian R. Levey, Kristy Bulleit, HUNTON & WILLIAMS LLP, Washington, D.C.; Jan A. Poling, AMERICAN FOREST & PAPER ASSOCIATION, Washington, D.C.; Amanda Waters, Erica Spitzig, NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES, Washington, D.C.; Linda E. Kelly, Quentin Riegel, NATIONAL ASSOCIATION OF MANUFACTURERS, Washington, D.C.; Peter Tolsdorf, AMERICAN PETROLEUM INSTITUTE, Washington, D.C.; Tom Ward, NATIONAL ASSOCIATION OF HOME BUILDERS, Washington, D.C., for Amici American Forest & Paper Association, American Petroleum Institute, National Association of Clean Water Agencies, National Association of Home Builders, National Association of Manufacturers, National Mining Association and Utility Water Act Group. John C. Cruden, Assistant Attorney General, David S. Gualtieri, Jennifer Neumann, Environment and Natural Resources Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Amicus United States Environmental Protection Agency. Patrick Morrisey, Attorney General, Elbert Lin, Solicitor General, Erica N. Peterson, Assistant Attorney General, OFFICE OF THE ATTORNEY GENERAL OF WEST VIRGINIA, Charleston, West Virginia; Kristin Boggs, General Counsel, Thomas L. Clarke, Senior Policy Advisor and Counsel, WEST VIRGINIA DEPARTMENT OF ENVIRONMENTAL PROTECTION, Charleston, West Virginia, for Amici The State of West Virginia and West Virginia Department of Environmental Protection.

Author of Opinion: Judge Motz

Case Alert Supervisor:
Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/02/2017 08:45 AM     4th Circuit     Comments (0)  

  United States v. Blankenship - - Fourth Circuit
Coal Company Executive's Conviction Leads to New Directive from the Fourth Circuit

Areas of Law: Criminal Procedure

Issue Presented: Whether the district court committed reversible error in providing a "two-inference" instruction, which instructed the jury that if it "view[ed] the evidence in the case as reasonably permitting either of two conclusions - one of innocence, the other of guilt - the jury should, of course, adopt the conclusion of innocence."

Brief Summary:
In a published opinion arising from a criminal trial held in the Southern District of West Virginia, the Fourth Circuit affirmed the appellant's conviction for conspiring to violate federal mine safety laws and regulations. On appeal, the appellant argued that the district court erred in instructing the jury to choose a verdict of not guilty if the evidence equally permitted either a guilty or not guilty verdict. The Fourth Circuit held that, even though this instruction is legally correct in the instant circumstance of equal inferences, it does not describe how the jury should rule if the inference of guilt is stronger yet still not enough to be beyond a reasonable doubt. Therefore, although the use of this instruction was harmless in appellant's case and his conviction was affirmed, the Fourth Circuit directed district courts in the circuit to not use the two-inference instruction going forward.

Extended Summary: The appellant was the chairman and chief executive officer of Massey Energy Company at the time of a tragic accident in 2010. The accident occurred at the company's Upper Big Branch coal mine in West Virginia, and caused the death of 29 miners. For years preceding the accident, the company had been cited by the Mine Safety & Health Administration ("MSHA") for violations of the Mine Safety & Health Act of 1977, 30 U.S.C. § 801, and its implementing regulations. The MSHA identified 549 separate violations at the Upper Big Branch Mine in the year before the accident. Many of those violations were later determined to be key contributing factors in the accident. The appellant was aware of the violations via daily reports and warnings from other senior officials, but stated that it was "cheaper to break the safety laws and pay the fines than to spend what would be necessary to follow the safety laws." The appellant's actions were consistent with this statement, leading to the death of the miners in the accident.

After a grand jury indictment and a subsequent six-week trial, the appellant was convicted of conspiring to violate federal mine safety laws. The district court sentenced appellant to one year of imprisonment and assessed a $250,000 fine, both of which are the maximum allowable under the law for that offense.

On appeal, the appellant disputed four decisions made by the court at trial. As to the first three, the Fourth Circuit considered arguments about the sufficiency of the indictment, the denial of re-cross examination of a witness, and an instruction about the term "willfully" in the applicable statute, but found no error by the district court in any of those decisions. The appellant also challenged the district court's use of the "two-inference" instruction as reversible error.

That instruction told the jury that, if it "view[ed] the evidence in the case as reasonably permitting either of two conclusions - one of innocence, the other of guilt - the jury should, of course, adopt the conclusion of innocence." The Fourth Circuit reviewed the issue de novo to determine if the instruction "accurately and fairly state[s] the controlling law." United States v. Jefferson, 674 F.3d 332, 351 (4th Cir. 2012). The Fourth Circuit had never ruled on this particular instruction before, but noted that other federal circuits had. The Second Circuit, in United States v. Khan, 821 F.2d 90, 93 (2d. Cir. 1987), ruled that this instruction was technically correct as a matter of law, but implied that "a preponderance of the evidence standard is relevant, when it is not." Furthermore, the Second Circuit also held that this instruction "says nothing on how to decide when the inference of guilt is stronger than the inference of innocence but no[t] strong enough to be beyond a reasonable doubt."

The Fourth Circuit agreed with this interpretation and therefore "direct[ed] our district courts not to use the two-inference instruction going forward." However, despite this new directive, the Fourth Circuit concluded that the district court's decision was not reversible error because, when viewed as a whole with the several dozen other instructions on reasonable doubt provided by the district court, the government's burden was stated correctly. Therefore, with no reversible error, the Fourth Circuit affirmed the appellant's convictions.

To read the full opinion, click here.

Panel: Chief Judge Gregory, Judge Wynn, and Senior Judge Davis

Argument Date: 10/26/2016

Date of Issued Opinion: 01/19/2017

Docket Number: No. 16-4193

Decided:
Affirmed by published opinion

Case Alert Author: Patrick J.L. Dillon, University of Maryland Carey School of Law

Counsel: ARGUED: William Woodruff Taylor, III, ZUCKERMAN SPAEDER LLP, Washington, D.C., for Appellant. Steven Robert Ruby, OFFICE OF THE UNITED STATES ATTORNEY, Charleston, West Virginia, for Appellee. ON BRIEF: Michael R. Smith, Eric R. Delinsky, ZUCKERMAN SPAEDER LLP, Washington, D.C., for Appellant. Carol A. Casto, United States Attorney, R. Gregory McVey, Gabriele Wohl, Assistant United States Attorneys, OFFICE OF THE UNITED STATES ATTORNEY, Charleston, West Virginia, for Appellee. Christopher A. Brumley, Jeffrey M. Wakefield, Nathaniel K. Tawney, Wesley P. Page, Bradley J. Schmalzer, FLAHERTY SENSABAUGH BONASSO PLLC, Charleston, West Virginia, for Amici Curiae.

Author of Opinion: Judge Wynn

Case Alert Supervisor: Professor Renée Hutchins

Edited: 02/02/2017 at 09:30 AM by Renee Hutchins

    Posted By: Renee Hutchins @ 02/02/2017 08:11 AM     4th Circuit     Comments (0)  

February 1, 2017
  Fredrick Capps v. Mondelez Global LLC - Third Circuit
Headline: FMLA retaliation claim fails because employer had an honest belief that employee was misusing the FMLA

Area of Law: Employment Law

Issue(s) Presented: Did the employer's honest belief that an employee was misusing the FMLA justify summary judgment to the employer on a retaliation claim?

Brief Summary:

Frederick Capps appealed the District Court's summary judgment in favor of his former employer, Mondelez Global, LLC. Capps argued that Mondelez: (1) interfered with his rights under the Family and Medical Leave Act ("FMLA"); (2) acted in retaliation to Capps' proper use of FMLA leave; and (3) violated the Americans with Disabilities Act. The Third Circuit affirmed, holding the employer's honest belief that Capps was misusing FMLA leave defeated his FMLA retaliation claim.

Extended Summary:

Nabisco, who was Mondelez's predecessor, hired Capps in November 1989. At all relevant times to this action, Capp held the position of mixer, which required him to operate a mixing machine that makes dough. Mondelez's policy entitles an employee to FMLA leave for " a serious health condition of the employee that makes the employee unable to perform one or more of the essential functions of his/her position." The employee may use intermittent FMLA leave when it is a medical necessity and the employee must provide notice of the leave as soon as practicable. An employee who wishes to take FMLA leave due to his own serious health condition must provide the company with a certification from his health care provider. Mondelez also maintained a policy entitled "Dishonest Acts on the Part of Employees." This policy is considered a major rule and violation of such rules are considered inexcusable offenses that will result in immediate suspension pending investigation, which could lead to termination.

Capps suffers from Avascular Necrosis (AVN), and, as a result, developed arthritis in both hips, which necessitated bilateral hip replacement in 2003. Capps has experienced severe pain in the pelvic region, which sometimes lasted for days or weeks at a time. Therefore, he requested intermittent time off from work when flare-ups occurred. Capps was certified for intermitted FMLA leave following his hip replacements, and was continuously recertified every six months for his condition until his employment was terminated in 2014. In February 2013, Capps took FMLA leave on several days. On one of those days, he was arrested for drunk driving.

Upon returning to work he performed the same work and received the same salary and benefits as before taking FMLA leave. He did not report his arrest to anyone at Mondelez, nor was he required to do so. In August 2013, Capps pled guilty to a DUI. In early 2014, a Human Resources (HR) manager at Mondelez became aware of Capps' DUI conviction through a newspaper article. The HR manager and other HR employees investigated Capp's attendance record to determine if Capps had any absences during the time frame of Capp's arrest and conviction. They noticed that Capp's arrest date and court dates appeared to coincide with days on which Capps had taken FMLA leave. HR confronted Capps with this information on February 2014. Mondelez then received a letter from Capp's physician confirming that on the aforementioned dates Capps had taken FMLA leave due to his "hip pathology." Capps also submitted to Mondelez a copy of a letter dated May 31, 2013, addressed to Capps from his attorney in the DUI matter, confirming some of the dates related to his DUI action.

Capps was terminated in February 2014. The letter confirmed that Capp's termination was based on his violation of the Dishonest Acts Policy. Capps completed a Grievance form on March 2014 claiming he was unlawfully terminated. Mondelez offered Capps reinstatement without back pay on April 2014, which Capps rejected. Capps initiated this lawsuit. He alleged claims of interference and retaliation in violation of the FMLA, violations of the ADA, and violations of the Pennsylvania Human Relations Act (PHRA). Mondelez filed a motion for summary judgment, which the District Court granted. Capps appealed to the Third Circuit for review.

The Third Circuit analyzed Capps' claims of FMLA interference and retaliation. Capps claimed that Mondelez discriminated against him in violation of the FMLA by terminating his employment in retaliation for taking FMLA leave. The Court stated that FMLA retaliation claims require proof of the employer's retaliatory intent. The Court concluded that Capps could not establish a prima facie case of FMLA retaliation, and that Mondelez met its burden of demonstrating a legitimate, nondiscriminatory justification for Capps' discharge. Where an employer provides evidence that the reason for the adverse employment action taken by the employer was an honest belief that the employee was misusing FMLA leave that is a legitimate, nondiscriminatory justification for the discharge.

Capps' FMLA interference claim also failed. The Court stated that an interference claim requires an employee to show that he was not only entitled to FMLA benefits but also that he was denied those benefits. Capps argued that his termination amounted to a deprivation of benefits and therefore interference under the FMLA. The Court held that Capps was unable to show that FMLA benefits were actually withheld as he was unable to point to evidence in the record indicating that he was denied a benefit to which he was entitled under the FMLA.

Capps also argued that requests for intermittent leave may be protected by the ADA and that a request for FMLA leave does not bar an ADA retaliation claim. The Court recognized that a request for FMLA leave may qualify, under certain circumstances, as a request for a reasonable accommodation under the ADA. However, the court concluded that the record in this action did not support the view that Mondelez discriminated against Capps under the ADA or refused to accommodate any such request. The Court stated that there was a lack of evidence to show that Mondelez did not make a good faith effort in accommodating Capps's request for intermittent leave. The Third Circuit affirmed the District Court's order granting summary judgment in favor of Mondelez.


The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/153839p.pdf

Panel: Fuentes, Shwartz, Restrepo, Circuit Judges

Argument Date: July 12, 2016

Date of Issued Opinion: January 30, 2017

Docket Number: No. 15-3839

Decided: Affirmed

Case Alert Author: Cynthia C. Pereira

Counsel: Christine E. Burke, Ari R. Karpf, Counsel for Appellant; Leslie M. Greenspan, Joe H. Tucker, Jr., Counsel for Appellee; Jeremy D. Horowitz, Counsel for Amicus Appellee.

Author of Opinion: Circuit Judge Restrepo

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 02/01/2017 03:12 PM     3rd Circuit     Comments (0)  

  Khadidja Issa v. School District of Lancaster - Third Circuit
Headline: Third Circuit Affirms District Court's Preliminary Injunction to Allow English Language Learners to Transfer to Schools of Their Choice

Area of Law: Education Law

Issue(s) Presented: Did the District Court err in granting a preliminary injunction to compel the School District of Lancaster to allow under-credited English Language Learners to transfer to a program designed to teach English language skills?

Brief Summary:

Refugees who attended school in the School District of Lancaster asked the District Court for a preliminary injunction compelling the District to allow them to transfer from Phoenix Academy to McCaskey High School's International School. McCaskey offers a program designed principally to teach language skills to English Language Learners. The District Court granted the request and found violations of Pennsylvania law and of a provision of the Equal Educational Opportunities Act of 1974. The Third Circuit affirmed the District Court's decision based on the EEOA violations but not on the state law violations.

Extended Summary:

The appellees in this action are refugees aged 18 to 21. They arrived in the United States in 2014 and international refugee agencies settled them in Lancaster, Pennsylvania. None are native English speakers. They are also considered students with limited or interrupted formal education (SLIFE). SLIFE are English language learners who are two or more years behind their appropriate grade level, possess limited or no literacy in any language, have limited or interrupted formal educational backgrounds, and have endured stressful experiences causing acculturation challenges. Khadidja Issa fled Sudan when she was five years old to escape insecurity under President Omar al-Bashir. She lived in refugee camps in Chad until she was 17, where she received her only prior schooling. Her native language is Fur and she is also fluent in Arabic. In 2015, Issa immigrated to the United States and resettled in Lancaster. When she first arrived, she couldn't speak, read, write or understand any English. She is eligible to attend public school in Pennsylvania through 2019, the year she turns 21. The other plaintiffs in the action shared similar stories, all being refugees with limited understanding of English and over-aged for their grade level.

The School District of Lancaster administers two institutions relevant to this action: McCaskey High School, which the District operates directly, and Phoenix Academy, operated by a private, for-profit company under contract with the District. McCaskey High School consists of two smaller schools, one which a traditional public high school and the other is known as an International School. The International School is a program designed primarily to teach language skills to students who speak little or no English. Students generally attend the International School for one year, during which they receive intensive English as a second language (ESL) support through a teaching method called "sheltered instruction." Under that method, English Language Learners (ELLs), are grouped together in content courses such as science and math, with other ELLs at comparable English-proficiency levels. ELLs are hence "sheltered" in those classes from other ELLs at higher proficiency levels and from native English Speakers. The International School also introduces ELLs to American cultural values and beliefs. Phoenix Academy is an alternative education program intended to serve at risk students over-age for their grade, and in danger of not graduating high school before they age out of public-school eligibility at 21. Phoenix's principal missions are to ensure that students accumulate enough credits to graduate and to change students' negative behaviors - not to further their academic proficiencies.

In order to change student's "anti-social" behaviors, Phoenix enforces stringent security measures not in effect at McCaskey. These include daily pat down searches, a strict dress code and a ban on students bringing in personal belongings such as backpacks, food, and even homework. At Phoenix, students take an accelerated curriculum which allows them to earn a high school diploma in half the time of a traditional high school. The result is that students at McCaskey, receive twenty-four more hours of instruction per class than do students at Phoenix. In regards to ESL support, Phoenix offers ELLs one 80-minute ESL course per day. ELLs take all of their content courses with Phoenix's general population under the accelerated model. In addition the School District does not assess in any measurable way whether Phoenix's program helps ELLs overcome their language barriers.

Under the District's enrollment policies new-to-the-District students over age 17 and under-credited are not offered a choice of whether to enroll at Phoenix or McCaskey. The School District unilaterally assigns them to Phoenix and doesn't allow them to transfer to McCaskey. This mandatory enrollment rule applies regardless of a student's English proficiency or educational background and even if the student has several years of public school eligibility left under Pennsylvania law. For Issa and the other plaintiffs, a common complaint is that they didn't understand the vast majority of content taught in their non-ESL classes. In addition, Phoenix's accelerated curriculum moved too quickly for them to grasp. Despite these difficulties, they accrued credits and advanced to higher-grade levels.

In 2016, the plaintiffs sued the School District in the District Court for the Eastern District of Pennsylvania, requesting a preliminary injunction allowing them and similarly situated ELLs to enroll in and attend McCaskey. The District Court granted the preliminary injunction and found likely violations of the EEOA and state law. The School District appealed, asking the Third Circuit to stay the injunction's enforcement. The Court began its analysis by interpreting the text of §1703(f) of the EEOA. The Court held that an individual alleging a violation of § 1703(f) must satisfy four elements: (1) the defendant must be an educational agency, (2) the plaintiff must face language barriers impeding her equal participation in the defendant's instructional programs, (3) the defendant must have failed to take appropriate action to overcome those barriers, and (4) the plaintiff must have been denied equal educational opportunity on account of her race, color, sex, or national origin.
The Court held that there is no dispute that the plaintiff's satisfied elements one and two of the statute. In regards to the third element that defendant must have failed to take appropriate action, the court looked to the Supreme Court's decision in Castaneda for guidance as to what entails "appropriate action." Castaneda provides a three-part test to resolve whether the School District took "appropriate action" to overcome the plaintiffs' language barriers under § 1703(f). The Court found that the Lancaster School District floundered on Castaneda's first and third prongs. The District failed to satisfy the first prong of the test as it failed to pursue a program informed by an educational theory recognized as sound by some experts in the field. Experts consistently testified that Phoenix's accelerated, non-sheltered program is unsound for SLIFE. As to the third prong, the Court held that the District failed to produce results indicating that language barriers were being overcome, as the School District does not keep data on the efficacy of Phoenix's ESL program. The Court concluded that plaintiffs had satisfied element three of the statute.

The Court also held that the plaintiffs met the fourth and final element of §1703(f). Section 1703(f) requires that the denial of the equal educational opportunity - in § 1703(f)'s case, the language barrier that is not being overcome - must stem from race, color, sex, or national origin, rather than from, for example, a cognitive disability covered by a different remedial scheme, like the Individuals with Disabilities Education Act. However it does not require a showing of discrimination. The Court concluded that the record fully supported that the plaintiff's language barriers stemmed from their national origins. Having satisfied the four elements of §1703(f), the Court affirmed the District Court's preliminary injunction for violations of the EEOA, finding the lower court had properly found the plaintiffs showed irreparable harm sufficient to justify the injunction. The Court remanded for consideration of cognizability of the state court claims.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/163528p.pdf

Panel: Fisher, Krause, Melloy, Circuit Judges

Argument Date: December 5, 2016

Date of Issued Opinion: January 30, 2017

Docket Number: No. 16-3528

Decided: Affirmed

Case Alert Author: Cynthia C. Pereira

Counsel: Sharon M. O'Donnell, Thomas A. Specht, Counsel for Appellant; Hedya Aryani, Seth Kreimer, Maura I. McInerney, Kristina Moon, Kathleen A. Mullen, Thomas B. Schmidt, III, Eric J. Rothschild, Molly M. Tack-Hooper, Witold J. Walczak, Counsel for Appellees; Tovah R. Calderon, Erin H. Flynn, Counsel for Amicus Appellee.

Author of Opinion: Circuit Judge Fisher

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 02/01/2017 01:49 PM     3rd Circuit     Comments (0)  

January 27, 2017
  In re: Horizon Healthcare Services Inc. Data Breach Litigation - Third Circuit
Headline: Third Circuit Holds that Consumers Who Have Their Personal Data Stolen Can Sue for a Violation of the Fair Credit Reporting Act Even if They Cannot Show the Data Has Been Improperly Used

Area of Law: Civil Procedure

Issues Presented: Whether Plaintiffs' alleged injury of improper disclosure of personal information is sufficient to satisfy Article III standing (injury in fact), without additional injury.

Brief Summary: On the weekend of November 1 - 3, 2013, two unencrypted laptops were stolen from the headquarters of Horizon Healthcare Services, Inc. The stolen laptops contained personal identifying information and personal health information for 839,000 of Horizon's customers. After being notified of the theft, Plaintiffs (Horizon customers whose personal information was contained on the stolen laptops) filed this class action in district court against Horizon, for violation of the Fair Credit Reporting Act's (FCRA) consumer privacy requirements. The District Court ultimately dismissed Plaintiff's claim, concluding that Plaintiffs' lacked Article III standing since they had not shown that the stolen information had been used to their detriment. On appeal, the Third Circuit relied on precedent to support the proposition that the unlawful disclosure of legally protected information was a recognizable injury in itself, even if the information was never used improperly. The Court then analyzed Congress' intent regarding FCRA violations to address defendant's claim that a recent Supreme Court case, Spokeo, Inc. v. Robins, required a different result The Court concluded that "Congress believed that the violation of FCRA causes a concrete harm to consumers." Thus, the Third Circuit held that both "precedent and congressional action lead [to the conclusion] that the improper disclosure of one's personal data in violation of FCRA is a cognizable injury for Article III standing purposes." Therefore, the Court vacated the District Court's order of dismissal and remanded the matter for further proceedings consistent with the opinion. Judge Shwartz concurred in the judgment.

Extended Summary: This case concerns a class action against a health insurer, Horizon Healthcare Services, Inc., by Horizon customers. The dispute originated on the weekend of November 1 - 3, 2013, when two unencrypted laptops, containing personal information for more than 839,000 Horizon members, were stolen from Horizon's headquarters. Horizon was made aware of the theft the following day, and alerted "potentially affected members" through a press release and letters a month later. As a result of the theft of personal information (including names, dates of birth, social security numbers, and addresses), Plaintiffs filed this action on June 27, 2014, and alleged that Horizon had committed violations of the Fair Credit Reporting Act (FCRA) as well as various state laws.

FCRA was enacted "to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy." FCRA imposes requirements on any "consumer reporting agency" in order to protect consumer privacy. FCRA further ensures that "any such agency that either willfully or negligently 'fails to comply with any requirement imposed under [FCRA] with respect to any consumer is liable to that consumer."

Plaintiffs alleged that Horizon failed to adequately comply with FCRA requirements. Plaintiffs specifically alleged that Horizon furnished their information in an "unauthorized fashion allowing it to fall into the hands of thieves," and failed to maintain "reasonable procedures" to keep their personal information confidential. Horizon moved to dismiss for, among other things, failing to establish standing under Federal Rule of Civil Procedure 12(b)(1. The District Court granted Horizon's FRCP 12(b)(1) motion, concluding that Plaintiff's lacked Article III standing because they had not shown that the stolen information had been used to their detriment.

The Third Circuit characterized the FRCP 12(b)(1) challenge as a "facial" attack, and thus applied the same standard of review as when the Court reviews a motion to dismiss under FRCP 12(b)(6). Thus, the Court noted that they accepted "the Plaintiff's well-pleased factual allegations as true and [drew] all reasonable inferences from those allegations in the Plaintiff's favor."

The Third Circuit began its analysis by noting the three elements of Article III standing, including injury in fact, a causal connection between the injury and the conduct complained of, and that the injury will be redressed by a favorable decision. Here, the Court noted that the sole element at issue was the first element described, injury in fact. Plaintiffs claimed that "the violation of their statutory right to have their personal information secured against unauthorized disclosure constitutes, in and of itself, an injury in fact." In rejecting this argument, the district court had stated that a showing of standing must include a specific harm that goes beyond "mere violations of statutory and common law rights."

After noting that injury-in-fact determinations are "very generous," the Court proceeded to analyze the Plaintiffs' claim in light of recent Court decisions. The Court relied on a pair of recent Third Circuit decisions, both which allowed "individuals to sue to remedy violations of their statutory rights, even without additional injury. First, the Court discussed In re Google Inc. Cookie Placement Consumer Privacy Litigation, which held that "the actual or threatened injury required by Article III may exist solely by virtue of statutes creating legal rights, the invasion of which creates standing." Similarly, the Court next relied on In re Nickelodeon Consumer Privacy Ligation, holding that "'the unlawful disclosure of legally protected information' constituted 'a clear de facto injury." However, the Court then turned its attention to a recent Supreme Court decision, Spokeo, Inc. v. Robins (2016), which Horizon had relied on, arguing it necessitated the opposite outcome. However, the Third Circuit disagreed, and instead noted that Spokeo stood for the proposition that "Congress has the power to define injuries" and thus this analysis must include a determination of "whether Congress has expressed an intent to make an injury redressable." The Third Circuit further noted that it would not interpret the Spokeo decision to "erect new barriers that might prevent Congress from identifying new causes of action though they may be based on intangible harm." Instead, the Third Circuit read Spokeo to "reiterate traditional notions of standing."

Finally, the Third Circuit addressed the issue of Congress' intent. The Court concluded that by creating a private right of action in order to enforce the requirements of the FCRA, Congress illustrated that it "believed that the violation of FCRA causes a concrete harm to consumers." Therefore, because Plaintiffs alleged the unauthorized disclosure of their personal information, they have alleged the "very injury that FCRA is intended to prevent." The Third Circuit thus held that Plaintiffs' allegations constitute a "de facto injury" sufficient to satisfy the requirements of Article III standing: "Our precedent and congressional action lead us to conclude that the improper disclosure of one's personal data in violation of FCRA is a cognizable injury for Article III standing purposes." Based on this holding, the Court vacated the District Court's order of dismissal and remanded the matter for further proceedings consistent with the opinion.

Judge Shawtz wrote separately concurring in the judgment, but based this conclusion on a different analysis. The concurrence framed the issue of injury as a loss of privacy, which occurred as soon as the laptops were stolen. Judge Shwartz stated, "Plaintiffs here have suffered an injury in fact based on the loss of privacy," which injury provided the necessary standing to bring this case.
To read the full opinion, please visit http://www2.ca3.uscourts.gov/opinarch/152309p.pdf

Panel: Jordan, Vanaskie, and Shwartz, Circuit Judges

Argument Date: July 12, 2016

Date of Issued Opinion: January 20, 2017

Docket Number: No. 15-2309

Decided: Vacated and remanded

Case Alert Author: Tessa M. Carson

Counsel: Ben Barnow, Erich P. Schork, Joseph J. DePalma, Jeffrey A. Shooman, Robert N. Kaplan, David A. Straite, Laurence D. King, Philip A. Tortoreti, Counsel for Appellants; Kenneth L. Chernof, David Jay, Philip R. Sellinger Greenberg Traurig Counsel for Appellee.

Author of Opinion: Judge Jordan

Circuit: Third Circuit

Case Alert Supervisor: Professor Mark Anderson

    Posted By: Susan DeJarnatt @ 01/27/2017 12:57 PM     3rd Circuit     Comments (0)  

January 25, 2017
  Microsoft Corp. v. United States - Second Circuit
Headline: In Split, Second Circuit Declines to Rehear Case; Prior Decision Granted Motion to Quash Warrant to Compel Microsoft Corporation to Disclose Contents of E-Mails Thought to Contain Evidence of Criminal Activity Stored on Foreign Server

Area of Law:
Fourth Amendment; Search Warrants; Technology

Issue(s) Presented: Whether a full panel of the Second Circuit should rehear a motion, granted in the prior opinion, to quash a warrant issued by the United States government to Microsoft seeking to compel it to disclose private e-mails stored on a server in Ireland.

Brief Summary:
A magistrate judge issued a warrant sought by the United States government under the Stored Communications Act (SCA) requiring Microsoft Corporation, a domestically-incorporated company, to reveal the contents of private e-mails stored on a server in Ireland, but accessible by Microsoft on servers in the United States, based upon probable cause that those e-mails contained evidence of criminal activity. The United States District Court for the Southern District of New York denied Microsoft's motion to quash the warrant, but a majority panel of the Second Circuit reversed, finding that the warrant was an unlawful extraterritorial application of the SCA. The United States moved for a rehearing by the full Second Circuit court. In a four-to-four split decision, with one concurring and four dissenting written opinions, the Second Circuit denied rehearing en banc.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...60619213ece/2/hilite/

Extended Summary:
The United States sought a warrant under the Stored Communications Act to obtain private emails that it believed contained evidence of criminal activity. The warrant was issued by a neutral magistrate judge of the United States District Court for the Southern District of New York upon a showing of probable cause. The warrant directed Microsoft Corporation, a United States corporation and service provider, to use its computer portal in Redmond, Washington to access and disclose the contents of specific e-mails that were stored on servers in Ireland. Microsoft moved to quash the warrant, and the United States District Court for the Southern District of New York denied Microsoft's motion. The original panel majority of the Second Circuit reversed the district court's decision and quashed the warrant on the ground that the warrant "was an extraterritorial application of the SCA." On the government's motion for rehearing en banc, a split four-four court declined to rehear the case. Five judges issued written opinions in the denial including Judge Carney, who concurred in the denial of rehearing, and Judges Jacobs, Cabranes, Raggi, and Droney who each issued a written dissent.

In concurring, Judge Carney wrote that the majority panel's decision to quash the government's search warrant was required under the plain language of the SCA and governing Supreme Court precedent. Specifically, given the Act's language indicating Congress's intent that the Act's warrant procedures not apply extraterritorially, Supreme Court precedent dictated that the court examine whether execution of this warrant - seeking private customer electronic data stored on servers in Ireland - would constitute an improper extraterritorial application of the SCA in light of the statute's "focus." The original panel majority found that the SCA's "focus" to be privacy protections, and the "locus" of those protections to be the place of data storage - Ireland in this case. Although agreeing with the majority in light of existing law, Judge Carney cited the challenge of balancing the needs of law enforcement with citizens' privacy in the age of modern technology and emphasized the need for congressional revision to the SCA to more effectively balance these concerns. She also highlighted sovereignty concerns with the United States accessing data of a foreign citizen in a foreign country.

In his dissent, Judge Jacobs accepted that the SCA was not intended to apply extraterritorially, but had hoped to rehear the case because, he argued, no extraterritorial reach was required in this case because the data sought was easily accessible via Microsoft's computer portals within the United States and would be delivered there. Judge Jacobs called the original majority panel's approach, which evaluated where the data was stored or located, as if it were a tangible object "unmanageable and increasingly antiquated."

Judge Cabranes also dissented from the majority's decision to deny rehearing, arguing that the opinion quashing the warrant improperly ignored that Microsoft already lawfully possessed the e-mails, could access them domestically, and would deliver them in the United States, making this a domestic, and not extraterritorial, application of the SCA. He contended that the original decision improperly focused on the storage or retrieval location in evaluating the SCA's privacy focus, rather than where the disclosure of the information would