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May 18, 2018
  Sali v. Corona Regional Medical Center; UHS of Delaware, Inc.
Sali v. Corona Regional Medical Center; UHS of Delaware Inc. - Ninth Circuit

Headline: Ninth Circuit panel holds that under Fed. R. Civ. P. 37, a court may order a party to produce a nonparty expert witness at a deposition, and if the party makes no effort to secure the expert witness, the court may sanction the non-complying party's counsel.

Areas of Law: Civil Procedure; Discovery; Contempt; Sanctions

Issue Presented: Whether a court may utilize the general discovery enforcement provisions of Fed. R. Civ. P. 37 to sanction a party's counsel for failing to secure the attendance of a nonparty expert witness at a deposition.

Brief Summary: The Ninth Circuit panel held that under Fed. R. Civ. P. 37, a court may sanction a party's counsel for failing to produce a nonparty expert witness at a deposition when the party made no effort to secure the witness's attendance at a deposition.

Significance: Fed. R. Civ 37 sanctions against a party and its counsel may be available when the party fails to produce its nonparty expert witness for a deposition.

Extended Summary: Plaintiffs are nurses who filed a class action lawsuit against their former employer and its corporate parent ("Defendants") alleging wage and hour law violations. In their motion for class certification, Plaintiffs included supporting declarations from an expert economist and an expert statistician.
Defendants sought to depose Plaintiffs' experts before the deadline to oppose class certification. They subpoenaed the expert economist, but neither Plaintiff's counsel or the expert showed up for the deposition. Subsequently, counsel for the parties were unable to agree on the time of the deposition. The matter was brought before a magistrate judge who ordered Plaintiffs to produce the economist expert for deposition on a date certain. Defendants subpoenaed him for that date.
But once again, Plaintiffs' counsel and the expert did not show for the deposition. Defendants moved for sanctions under Rule 37 and the magistrate judge sanctioned Plaintiffs' counsel $15,112 for costs associated with the deposition and motion for sanctions. When Plaintiffs' counsel did not pay, the district court entered a judgment of contempt. Plaintiffs and their counsel appealed the judgment.

The Ninth Circuit panel reviewed de novo whether the magistrate judge had the power under Rule 37 to order Plaintiffs' counsel to produce the expert and sanction them for noncompliance. Rule 37(b) provides that a court may issue remedial measures when a party "fails to obey an order to provide or permit discovery, including an order under Rule 37(a)." Rule 37(a) states, "a party may move for an order compelling disclosure or discovery." In particular, Rule 37(a)(3)(B) permits a party to seek to compel an answer when a deponent fails to answer a question asked under Rule 30 or 31. Here, Plaintiffs were ordered to produce the expert for deposition where he would be required to respond to questions and disclose his expert views."

The panel noted that the Ninth Circuit previously held in SEC v. Seaboard Corp., 666 F.2d 414, 416 (9th Cir. 1982), that Rule 37(a) encompasses an order to attend a deposition. Furthermore, it held that in the context of Rule 37(b) sanctions, courts "read broadly" the term "order" under Rule 37(a) to include any order relating to discovery. Halaco Eng'g Co. v. Costle, 843 F.2d 376, 379 (9th Cir. 1988).
The Ninth Circuit panel then turned its attention to whether courts can order parties to produce nonparties. Rule 37(a)(5) requires, upon a party's successful motion to compel discovery, that the party or deponent whose conduct necessitated the motion, the party or attorney advising the conduct, or both to pay the movant's reasonable expenses in making the motion, including attorney's fees. Previously, the Ninth Circuit held the rule applies to motions to compel nonparties to attend depositions. Pennwalt v. Durant-Wayland, Inc., 708 F.2d 492 n.4 (9th Cir. 1983).
The Ninth Circuit panel held that Pennwalt strongly suggests that the district court's order and issuance of sanctions regarding plaintiff's counsel's actions was within the scope of its Rule 37 powers. It noted that the Third, Fifth, and Sixth Circuits approved similar orders and sanctions.

The panel rejected Plaintiffs' argument that the order compelling them to produce the expert "defies common sense" because their counsel did not represent the expert and had no legal relationship with him that would enable them to force him to attend the deposition. It explained that although an order to produce a deponent under Rule 37 and a subpoena under Rule 45 are intended to bring about the same consequence, the order's focus and the consequences of noncompliance are different. A Rule 37 order is directed at a party to compel the party to use its best efforts to secure the nonparty's attendance in the deposition. The party can avoid sanctions by making a showing it that it attempted in good faith to comply with the order. Thus, a party will not incur Rule 37 sanctions if, despite its efforts, a nonparty witness refuses to attend a deposition. A subpoena under Rule 45, in contrast, is directed at the nonparty, and obligates the person to attend a scheduled deposition or be held in contempt.

The panel acknowledged that use of a subpoena to compel attendance of a nonparty witness for a deposition may be a more practical choice. However it noted that here may be circumstances when production of a nonparty expert witness is better achieved under Rule 37. Examples are when the party seeking the deposition suspects the opposing party is directing or encouraging the witness not to appear or the opposing party has reasons for not wanting its own witness to be served with a subpoena.

In this case, Plaintiffs made no effort to secure the expert's attendance at the deposition in defiance of the magistrate judge's Rule 37(a) order to cooperate in discovery. The Ninth Circuit panel held the Rule 37 sanctions were justified and affirmed the district court's contempt judgment.

To read the full opinion, please visit: http://cdn.ca9.uscourts.gov/da...018/03/19/15-56389.pdf

Panel: Andrew J. Kleinfeld, Sandra S. Ikuta, and Jacqueline H. Nguyen, Circuit Judges.

Argument Date: February 6, 2017

Date of Opinion: March 19, 2018

Docket Number: No 15-56389

Decided: Affirmed.

Case Alert Author: Shane R. Kennedy

Counsel: Jerusalem F. Beligan (argued) and Brian D. Chase, Bisnar Chase LLP Newport Beach, California, for Plaintiffs-Appellants; Christina H. Hayes (argued), Khatereh Sage Fahimi, and Stacey E. James, Littler Mendelson P.C., San Diego, California, for Defendants-Appellees.

Author of Opinion: Judge Nguyen

Circuit: Ninth Circuit

Case Alert Supervisor: Professor Philip L. Merkel

    Posted By: Glenn Koppel @ 05/18/2018 01:07 PM     9th Circuit     Comments (0)  

  American Orthopedic & Sports Medicine v. Independence Blue Cross Blue Shield - Third Circuit
Headline: Out of network doctor is out of luck: health plan anti-assignment clause bars his suit for payment

Area of Law: ERISA

Issue(s) Presented: Does ERISA preclude enforcement of anti-assignment provision in health care plan?

Brief Summary: Surgeon performed shoulder surgery on Joshua S. who was covered by an Independence Blue Cross health plan. Because the surgeon was out of network, the insurer imposed a cap on payment, leaving Joshua S. with a bill for $58,083. Joshua assigned his claim to the surgeon who sued for payment. The insurer, relying on an anti-assignment clause in the health plan, moved to dismiss. The Third Circuit affirmed dismissal, holding that anti-assignment clauses in health plans are enforceable under ERISA. It followed other circuits which have all found that ERISA does not ban anti-assignment clauses in health plans.

Extended Summary:

Appellant, a surgeon, performed shoulder surgery on Joshua S. and charged him $58,400. Because the surgeon was out of network according to Joshua's health plan, the insurer applied the out of network cap of $2633, subtracted a $2000 deductible and a $316 copay, paid Joshua $316 and notified him that he was liable for the balance of $58,083. Joshua assigned his claim to the surgeon who unsuccessfully sought repayment through the administrative process and then sued, asserting violations of ERISA and breach of contract. The insurer moved to dismiss, arguing that the surgeon lacked standing because the health plan barred assignment of claims to third parties.

The Third Circuit held that the anti-assignment clause was enforceable and affirmed dismissal. The Court looked to the text of ERISA, noting that it was silent as to whether anti-assignment clauses were barred in health plans but that ERISA specifically barred such clauses in pension plans. The Court found that distinction significant and further noted that Congress has not acted to change ERISA despite the growing use of such clauses in health plans. The Court found both sides' policy arguments unpersuasive as they were not supported by authoritative empirical evidence. The Court noted that the five other circuit courts deciding the issue have determined that ERISA does not bar anti-assignment provisions.

The Court rejected the surgeon's argument that the insurer had waived the right to enforce the clause simply by processing the claim and failing to raise the clause during the administrative process. It found that those actions did not show an unequivocal and decisive act to purposefully surrender the right.

Finally, the Court rejected the insurer's argument that the health plan also prohibited Joshua from giving a power of attorney to the surgeon to pursue the claim on Joshua's behalf. However, the Court declined to vacate and remand to allow the surgeon to perfect the power of attorney, which had technical defects, because he waived the argument by not raising it in his initial or reply briefing.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/171663p.pdf

Panel: Ambro, Krause, and Rendell, Circuit Judges

Argument Date: November 15, 2017

Date of Issued Opinion: May 16, 2018

Docket Number: No. 17-1663

Decided: Affirmed

Counsel: Samuel S. Saltman, Counsel for Appellant; Susan M. Danielski, Gerald J. Dugan, Counsel for Appellee Independence Blue Cross Blue Shield; Michael E. Holzapfel, Counsel for Appellee Horizon Blue Cross Blue Shield of New Jersey

Author of Opinion: Krause, Circuit Judge

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 05/18/2018 04:43 AM     3rd Circuit     Comments (0)  

May 17, 2018
  International Refugee Assistance Project v. Trump -- Fourth Circuit
Blocking the Ban: Fourth Circuit Shields Immigrants from President's Travel Ban

Areas of Law: Constitutional Law, Statutory Law

Issue Presented: Does the President have constitutional authority under the Establishment Clause or statutory authority under the Immigration and Naturalization Act to temporarily suspend the entry of immigrants and non-immigrants from majority-Muslim countries?

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held that the President does not have authority under the Establishment Clause or under 8 U.S.C. § 1182(f) and §1185(a)(1) of the Immigration and Naturalization Act (INA) to suspend the entry of immigrants and non-immigrants from majority-Muslim countries. Additionally, the Fourth Circuit upheld an injunction against the government with an exception as to foreign nationals who lack a bona fide relationship with a person or entity in the United States.

Extended Summary: On January 27, 2017, a week after taking the oath of office, President Donald Trump signed Executive Order 13,769 (EO-1), invoking his authority under 8 U.S.C. §1182(f). EO-1 immediately suspended immigrant and non-immigrant entry of foreign nationals from seven predominantly Muslim countries -- Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen -- for ninety days. Upon implementation, EO-1 was met with several challenges and two federal courts issued injunctions enjoining its enforcement. In response, the President's advisors promised that a new order would be issued to respond to the court rulings. These new orders would not invalidate the "basic policy outcome" of EO-1.

On March 6, 2017, the President issued Executive Order 13,780 (EO-2). EO-2 removed Iraq from the list of countries, re-imposed the ninety-day ban, and directed the Secretary of Homeland Security to report to the President whether the suspended countries were now providing adequate information about their nationals seeking entry into the United States. EO-2 was also challenged, and the Fourth and Ninth Circuits both affirmed injunctions on appeal. The Supreme Court then left the injunctions in place pending its review except as to foreign nationals who lacked a "credible claim of a bona fide relationship with a person or entity in the United States."

After EO-2, the President issued Proclamation No. 9645 (the "Proclamation"), which indefinitely suspended the entry of all or some immigrants and nonimmigrants from eight countries (Chad, Iran, Libya, North Korea, Somalia, Syria, Venezuela, and Yemen), six of which are majority-Muslim nations. The Proclamation identified three baseline categories to determine the quality of a country's information sharing: (1) identity-management information - which determines whether individuals seeking benefits under immigration laws are who they claim to be; (2) national security and public safety information - which determines whether persons who seek entry to this country pose national security or public safety risks; and (3) national security and public safety assessment - which determines if the country is a known or potential terrorist safe haven, a participant in the Visa Waiver program, and whether it regularly fails to receive its nationals subject to final orders of removal from the United States. The Proclamation's restrictions were effective immediately for foreign nationals who were subject to E0-2's restrictions and for those who lacked a credible claim of a bona fide relationship with a person or entity in the United States.

Three separate lawsuits were brought in the District Court for the District of Maryland and consolidated on appeal before the Fourth Circuit. The suits alleged that the Proclamation and EO-2 violate the Establishment Clause of the First Amendment, the Free Speech and Free Association Clauses of the First Amendment, the equal protection and procedural due process components of the Due Process Clause of the Fifth Amendment, the Religious Freedom Restoration Act (RFRA), the Refugee Act (RA), the INA, and the Administrative Procedure Act (APA).

The Fourth Circuit began by determining if the plaintiffs satisfied the necessary elements for injunctive relief. The first of the four elements is whether the claim is likely to succeed on the merits. The merits aspect of this suit is rooted in the question of whether the Proclamation and EO-2 violate the Establishment Clause. The Fourth Circuit agreed with the plaintiffs. A cognizable Establishment Clause injury do not require proof that a particular religious freedom is infringed nor does it required evidence of direct discrimination by the government. Rather, plaintiffs had to overcome the heavy burden of showing that the government action ran contrary to the basic premises of the Constitution such that it required a more probing review. The Fourth Circuit said that the government must establish a bona fide factual basis for its actions under the standards set forth in Kerry v. Din and Kleindienst v. Mandel. Because the plaintiffs offered undisputed evidence of bias, the President's own words regarding banning Muslims, the plaintiffs proved that the restrictions targeted Muslim-majority countries and were not simply an attempt to restrict entry into the United States by persons who did not comply with immigration laws. Although the Fourth Circuit agreed with the government that the President's past actions could not forever taint his future actions, the Fourth Circuit nonetheless found the President's continued disparagement of Muslims after he took office did not remove the animus he directed towards those of the Muslim faith. Finally, the Fourth Circuit held that the plaintiffs demonstrated the government cannot meet the test set forth in Lemon v. Kurtzman, which held that government's action impacting religion must have: (1) a secular legislative purpose, (2) with a principal or primary effect that neither advances or inhibits religion, and (3) which does not foster an excessive government entanglement with religion. The government needs to satisfy all three prongs to ward off an Establishment Clause challenge. Here, the government could not prove that the travel restrictions did not have a secular purpose as its primary focus (as evidenced by the Presidents animus towards Muslims, reflected in passing EO-1, and by stating that EO-2 is substantially similar to EO-1). Consequently, the government could not satisfy the first prong of the Lemon test and therefore could not defeat the Establishment Clause challenge.

The Fourth Circuit next looked at the second, third, and fourth elements of an injunction, which state, respectively, that an injunction is permissible when a plaintiff is (2) likely to suffer irreparable harm, (3) the balance of equities tips in her favor, and (4) there is a public interest. The Fourth Circuit said that even a temporary loss of First Amendment freedoms constitutes an irreparable harm. This issue is exacerbated by the fact that family members of the plaintiffs who are categorically rendered ineligible for visas also demonstrate an irreparable harm through prolonged separation. Regarding the balance of equities, the Fourth Circuit found that the plaintiffs continued suffering (displayed by the combination of religious marginalization and familial separation) was more concerning than the national security interest that the government asserted. This was so because the government had not demonstrated that a nationality-based ban, as opposed to a ban on specific individual(s), was better for protecting the United States. Moreover, the court found the safety concerns espoused by the government were already accounted for in security provisions contained within the INA. Lastly, the Fourth Circuit found that it cannot be in the public interest for the President to violate the Establishment Clause on a human, economic, and fundamental level because an action that compromises the American values for some shakes the foundation for all Americans. Thus, the Fourth Circuit upheld the injunction.

The concurrences determined that the President did not have the congressionally delegated authority to enact a nationality-based quota system. As it pertains to the Proclamation, the concurring judges noted that the INA vests immigration power in Congress and that the Proclamation exceeds the scope of authority delegated by the INA. Article I of the Constitution delegates migration power to Congress. If Congress chooses to delegate that power to the President, it must do so in a way that does not permit the executive branch to have "totally unrestricted freedom of choice." Next, the concurring judges analyzed whether the INA delegates the sweeping power to enact the Proclamation. The Proclamation invokes two INA statutes: 8 U.S.C. §1182(f) and §1185(a)(1). The judges noted that the text of the statutes does not describe the President's power regarding immigration policy in the broadest terms and in fact, any language specifying that the President has such statutory power is noticeably absent. The concurring judges further found that the broad authority that the President claimed under the INA's provisions to indefinitely set his own immigration policy intruded on Congress's plenary power over immigration. Indeed, no previous administration had claimed a similar executive power to the one sought by the current administration. While Congress can offer discretion to the President to act in response to exigent circumstances, the government has not established that such a circumstance exists here (the Fourth Circuit found this to be a key difference between President Trump's Proclamation and similar orders issued under Presidents Carter and Reagan). As far as §1185(a)(1), the judges concluded that the statute is properly read as authorizing only reasonable travel requirements to preserve the integrity of entry and departure documents and procedures. Thus, the nationality-based ban that the government argued for exceeds the authority delegated under §1185(a)(1) because the travelers have no plausible means of compliance.

To read the full opinion, click here.

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

Argument Date: 12/08/2017

Date of Issued Opinion: 02/15/2018

Docket Number: No. 17-2231

Decided: Decided by published opinion

Case Alert Author: Saikrishna Srikanth, Univ. of Maryland Carey School of Law

Counsel: Hashim M. Mooppan, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellants/Cross-Appellees. Cecillia D. Wang, AMERICAN CIVIL LIBERTIES UNION FOUNDATION, New York, New York, for Appellees/Cross-Appellants. ON BRIEF: Noel J. Francisco, Solicitor General, Jeffrey B. Wall, Deputy Solicitor General, Edwin S. Kneedler, Deputy Solicitor General, Chad A. Readler, Acting Assistant Attorney General, Douglas N. Letter, Sharon Swingle, H. Thomas Byron III, Lowell V. Sturgill Jr., Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Stephen M. Schenning, Acting United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellants/Cross-Appellees. Karen C. Tumlin, Nicholas Espiritu, Melissa S. Keaney, Esther Sung, NATIONAL IMMIGRATION LAW CENTER, Los Angeles, California; Omar C. Jadwat, Lee Gelernt, Hina Shamsi, Hugh Handeyside, Sarah L. Mehta, David Hausman, AMERICAN CIVIL LIBERTIES UNION FOUNDATION, New York, New York; Justin B. Cox, NATIONAL IMMIGRATION LAW CENTER, Atlanta, Georgia; Kathryn Claire Meyer, Mariko Hirose, INTERNATIONAL REFUGEE ASSISTANCE PROJECT, New York, New York; David Rocah, Deborah A. Jeon, Sonia Kumar, Nicholas Taichi Steiner, AMERICAN CIVIL LIBERTIES UNION FOUNDATION OF MARYLAND, Baltimore, Maryland; Cody H. Wofsy, Spencer E. Amdur, San Francisco, California, David Cole, Daniel Mach, Heather L. Weaver, AMERICAN CIVIL LIBERTIES UNION FOUNDATION, Washington, D.C., for Appellees/Cross-Appellants International Refugee Assistance Project, Hias, Inc,. John Doe #1 & 3, Jane Doe #2, Middle East Studies Association of North America, Inc., Muhammed Meteab, Arab American Association of New York, Yemeni-American Merchants Association, Mohamad Mashta, Grannaz Amirjamshidi, Fakhri Ziaolhagh, Shapour Shirani, Afsaneh Khazaeli, John Doe #4, John Doe #5. Johnathan Smith, Sirine Shebaya, MUSLIM ADVOCATES, Washington, D.C.; Richard B. Katskee, Eric Rothschild, Andrew L. Nellis, AMERICANS
UNITED FOR SEPARATION OF CHURCH AND STATE, Washington, D.C.; Mark H. Lynch, Mark W. Mosier, Herbert L. Fenster, Jose E. Arvelo, John W. Sorrenti, Katherine E. Cahoy, Rebecca G. Van Tassell, Karun Tilak, COVINGTON & BURLING, LLP, Washington, D.C., for Appellees/Cross-Appellants Iranian Alliances Across Borders, Jane Doe #1, Jane Doe #2, Jane Doe #3, Jane Doe #4, Jane Doe #5, Jane Doe #6, Iranian Students' Foundation. Charles E. Davidow, Robert A. Atkins, Lisa Velazquez, Andrew J. Ehrlich, Steven C. Herzog, PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP, New York, New York; Lena F. Masri, Gadeir Abbas, COUNCIL ON AMERICAN-ISLAMIC RELATIONS, Washington, D.C.; Faiza Patel, Michael Price, BRENNAN CENTER FOR JUSTICE AT NYU SCHOOL OF LAW, New York, New York; Jethro Eisenstein, PROFETA & EISENSTEIN, New York, New York, for Appellees/Cross-Appellants Eblal Zakzok, Sumaya Hamadmad, Fahed Muqbil, John Doe #1, John Doe #2, Jane Doe # 2, John Doe #3, Jane Doe #3. Jay Alan Sekulow, Stuart J. Roth, Colby M. May, Andrew J. Ekonomou, Jordan Sekulow, Craig L. Parshall, Matthew R. Clark, Benjamin P. Sisney, Washington, D.C., Edward L. White III, Erik M. Zimmerman, Ann Arbor, Michigan, Francis J. Manion, Geoffrey R. Surtees, AMERICAN CENTER FOR LAW AND JUSTICE, New Hope, Kentucky, for Amicus The American Center for Law and Justice. Ken Paxton, Attorney General, Jeffrey C. Mateer, First Assistant Attorney General, Scott A. Keller, Solicitor General, J. Campbell Barker, Deputy Solicitor General, Ari Cuenin, Assistant Solicitor General, OFFICE OF THE ATTORNEY GENERAL OF TEXAS, Austin, Texas; Steve Marshall, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF ALABAMA, Montgomery, Alabama; Mark Brnovich, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF ARIZONA, Phoenix, Arizona; Leslie Rutledge, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF ARKANSAS, Little Rock, Arkansas; Pamela Jo Bondi, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF FLORIDA, Tallahassee, Florida; Derek Schmidt, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF KANSAS, Topeka, Kansas; Jeff Landry, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF LOUISIANA, Baton Rouge, Louisiana; Joshua D. Hawley, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MISSOURI, Jefferson City, Missouri; Michael DeWine, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF OHIO, Columbus, Ohio; Mike Hunter, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF OKLAHOMA, Oklahoma City, Oklahoma; Alan Wilson, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF SOUTH CAROLINA, Columbia, South Carolina; Patrick Morrisey, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF WEST VIRGINIA, Charleston, West Virginia, for Amici State of Texas, State of Alabama, State of Arizona, State of Arkansas, State of Florida, State of Kansas, State of Louisiana, State of Missouri, State of Ohio, State of Oklahoma, State of South Carolina, and State of West Virginia. Christopher J. Hajec, Julie B. Axelrod, Michael M. Hethmon, Elizabeth A. Hohenstein, Mark S. Venezia, IMMIGRATION REFORM LAW INSTITUTE, Washington, D.C., for Amicus Immigration Reform Law Institute. Richard D. Bernstein, WILLKIE FARR & GALLAGHER LLP, Washington, D.C., for Amicus T.A. Amir H. Ali, RODERICK & SOLANGE MACARTHUR JUSTICE CENTER, Washington, D.C., for Amicus Roderick and Solange MacArthur Justice Center. Eric T. Schneiderman, Attorney General, Barbara D. Underwood, Solicitor General, Anisha S. Dasgupta, Deputy Solicitor General, Zainab A. Chaudhry, Assistant Solicitor General of Counsel, OFFICE OF THE ATTORNEY GENERAL OF NEW YORK, New York, New York; Xavier Becerra, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF CALIFORNIA, Sacramento, California; George Jepsen, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF CONNECTICUT, Hartford, Connecticut; Matthew P. Denn, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF DELAWARE, Wilmington, Delaware; Lisa Madigan, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF ILLINOIS, Chicago, Illinois; Thomas J. Miller, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF IOWA, Des Moines, Iowa; Janet T. Mills, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MAINE, Augusta, Maine; Brian E. Frosh, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland; Maura Healey, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MASSACHUSETTS, Boston, Massachusetts; Hector Balderas, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF NEW MEXICO, Santa Fe, New Mexico; Ellen F. Rosenblum, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF OREGON, Salem, Oregon; Peter F. Kilmartin, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF RHODE ISLAND, Providence, Rhode Island; Thomas J. Donovan, Jr., Attorney General, OFFICE OF THE ATTORNEY GENERAL OF VERMONT, Montpelier, Vermont; Mark R. Herring, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia; Robert W. Ferguson, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF WASHINGTON, Olympia, Washington; Karl A. Racine, Attorney General, OFFICE OF THE ATTORNEY GENERAL FOR THE DISTRICT OF COLUMBIA, Washington, D.C., for Amici State of New York, State of California, State of Connecticut, State of Delaware, State of Illinois, State of Iowa, State of Maine, State of Maryland, State of Massachusetts, State of New Mexico, State of Oregon, State of Rhode Island, State of Vermont, State of Virginia, State of Washington, and the District of Columbia. Lynne Bernabei, Alan R. Kabat, BERNABEI & KABAT, PLLC, Washington, D.C., for Amici National Association for the Advancement of Colored People, Advocates for Youth, Center for Reproductive Rights, Chicago Lawyers' Committee for Civil Rights under the Law, The Judge David L. Bazelon Center for Mental Health Law, Lambda Legal Defense and Education Fund, Mississippi Center for Justice, National Center for Lesbian Rights, National Urban League, People for American Way Foundation, Southern Coalition for Social Justice, and The Washington Lawyers' Committee for Civil Rights and Urban Affairs. Daniel Braun, Peter Jaffe, Washington, D.C., David Y. Livshiz, Cameron C. Russell, Karen Wiswall, FRESHFIELDS BRUCKHAUS & DERINGER US LLP, New York, New York, for Amicus Cato Institute. Amy Briggs, John W. McGuinness, Sirena Castillo, Matthew Bottomly, Olufunmilayo Showole, Ketakee Kane, Benjamin G. Shatz, MANATT, PHELPS & PHILLIPS, LLP, Los Angeles, California, for Amici Muslim Justice League, Muslim Public Affairs Council, and Council on American-Islamic Relations, California.
Jonathan Weissglass, Rebecca C. Lee, ALTSHULER BERZON LLP, San Francisco, California, for Amici International Labor Organizations. Nicole G. Berner, Deborah L. Smith, Leo Gertner, SERVICE EMPLOYEES INTERNATIONAL UNION, Washington, D.C., for Amicus Service Employees International Union. Judith Rivlin, AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, Washington, D.C., for Amicus American Federation of State, County And Municipal Employees. David J. Strom, AMERICAN FEDERATION OF TEACHERS, AFL-CIO, Washington, D.C., for Amicus American Federation of Teachers. Jody Calemine, COMMUNICATIONS WORKERS OF AMERICA, Washington, D.C., for Amicus Communications Workers of America. Niraj R. Ganatra, Ava Barbour, INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, Detroit, Michigan, for Amicus International Union, United Automobile, Aerospace And Agricultural Implement Workers Of America. Mario Martínez, MARTÍNEZ AGUILASOCHO & LYNCH, APLC, Bakersfield, California, for Amicus United Farm Workers of America. Nicholas Clark, UNITED FOOD AND COMMERCIAL WORKERS, Washington, D.C., for Amicus United Food and Commercial Workers. Eric J. Gorman, Matthew E. Sloan, Noelle M. Reed, Allison B. Holcombe, Richard A. Schwartz, Alyssa J. Clover, Sarah Grossnickle, Jonathan Fombonne, Jennifer H. Berman, Joseph M. Sandman, Brittany Ellenberg, SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, Chicago, Illinois; Aaron Morris, IMMIGRATION EQUALITY, New York, New York; Virginia M. Goggin, NEW YORK CITY GAY AND LESBIAN ANTI-VIOLENCE PROJECT, New York, New York; Glenn Magpantay, THE NATIONAL QUEER ASIAN PACIFIC ISLANDER ALLIANCE, New York, New York, for Amici Immigration Equality, New York City Gay And Lesbian Anti-Violence Project, The National Queer Asian Pacific Islander Alliance, LGBT Bar Association of Los Angeles, LGBT Bar Association of Greater New York, Lesbian and Gay Bar Association of Chicago, GLBTQ Legal Advocates & Defenders, and Bay Area Lawyers for Individual Freedom. Fatma Marouf, TEXAS A&M UNIVERSITY SCHOOL OF LAW, Fort Worth, Texas; Sabrineh Ardalan, Philip L. Torrey, Nathan MacKenzie, Law Clerk, Dalia Deak, Law Student, Harvard Immigration and Refugee Clinical Program, HARVARD LAW SCHOOL, Cambridge, Massachusetts; Geoffrey Hoffman, UNIVERSITY OF HOUSTON LAW CENTER, Houston, Texas; Karla McKanders, VANDERBILT LAW SCHOOL, Nashville, Tennessee; Alan Hyde, RUTGERS LAW SCHOOL, Newark, New Jersey, for Amici Immigration Law Professors on Statutory Claims. Nick Kahlon, Chicago, Illinois, Ryan P. Poscablo, Brian Neff, Eliberty Lopez, RILEY SAFER HOLMES & CANCILA, LLP, New York, New York; Edward N. Siskel, Corporation Counsel, Benna Ruth Solomon, Deputy Corporation Counsel, Andrew W. Worseck, Chief Assistant Corporation Counsel, Jonathon D. Byrer, Assistant Corporation Counsel, Sara K. Hornstra, Carl Newman, CITY OF CHICAGO, Chicago, Illinois, for Amicus City of Chicago. Michael N. Feuer, City Attorney, CITY ATTORNEY'S OFFICE FOR THE CITY OF LOS ANGELES, Los Angeles, California, for Amicus City of Los Angeles. Zachary W. Carter, Corporation Counsel, CITY OF NEW YORK, New York, New York, for Amicus Mayor and City Council of New York. Sozi
Pedro Tulante, City Solicitor, CITY OF PHILADELPHIA LAW DEPARTMENT, Philadelphia, Pennsylvania, for Amicus City of Philadelphia. John Daniel Reaves, UNITED STATES CONFERENCE OF MAYORS, Washington, D.C., for Amicus United States Conference of Mayors. James L. Banks, Jr., City Attorney, OFFICE OF THE CITY ATTORNEY, Alexandria, Virginia, for Amici City of Alexandria and Mayor Allison Silberberg. Anne L. Morgan, City Attorney, CITY OF AUSTIN LAW DEPARTMENT, Austin, Texas, for Amicus City of Austin. Andre M. Davis, City Attorney, BALTIMORE CITY DEPARTMENT OF LAW, Baltimore, Maryland, for Amici Mayor and City Council of Baltimore. Eugene L. O'Flaherty, Corporation Counsel, CITY OF BOSTON, Boston, Massachusetts, for Amici City of Boston and Mayor Martin J. Walsh. Kenneth W. Gordon, Attorney to the Town, Town of Brighton, New York, Rochester, New York, New York, for Amicus Town of Brighton. G. Nicholas Herman, General Counsel, THE BROUGH LAW FIRM, PLLC, Chapel Hill, North Carolina, for Amicus Town of Carrboro. Matthew T. Jerzyk, City Solicitor, OFFICE OF THE CITY SOLICITOR, Central Falls, Rhode Island, for Amicus James A. Diossa, Mayor of Central Falls, Rhode Island. Kimberly M. Foxx, State's Attorney for Cook County, Office of the States Attorney, Chicago, Illinois, for Amicus Cook County, Illinois. W. Grant Farrar, Corporation Counsel, CITY OF EVANSTON LAW, Evanston, Illinois, for Amicus City of Evanston. Gregory L. Thomas, City Attorney, CITY ATTORNEY'S OFFICE, Gary, Indiana, for Amicus City of Gary. Eleanor M. Dilkes, City Attorney, CITY ATTORNEY'S OFFICE, Iowa City, Iowa, for Amicus City of Iowa City. Aaron O. Lavine, City Attorney, CITY ATTORNEY'S OFFICE, Ithaca, New York, for Amicus Svante L. Myrick, Mayor of Ithaca. Susan L. Segal, City Attorney, CITY ATTORNEY'S OFFICE, Minneapolis, Minnesota, for Amicus City of Minneapolis. Michael P. May, City Attorney, CITY ATTORNEY'S OFFICE, Madison, Wisconsin, for Amicus City of Madison. Marc P. Hansen, County Attorney, COUNTY ATTORNEY'S OFFICE, Rockville, Maryland, for Amicus Montgomery County. Jon Cooper, Director of Law, DEPARTMENT OF LAW, Nashville, Tennessee, for Amici Mayor Megan Barry, Metropolitan Government of Nashville, and Davidson County. John Rose, Jr., Corporation Counsel, CITY OF NEW HAVEN, New Haven, Connecticut, for Amici City of New Haven and Mayor Toni N. Harp. Barbara J. Parker, City Attorney, CITY ATTORNEY'S OFFICE, Oakland, California, for Amicus City of Oakland. Lourdes Sanchez Ridge, City Solicitor, Chief Legal Officer, CITY OF PITTSBURGH, Pittsburgh, Pennsylvania, for Amicus City of Pittsburgh. Tracy Reeve, City Attorney, CITY ATTORNEY'S OFFICE, Portland, Oregon, for Amicus City of Portland. Jeffrey Dana, City Solicitor, OFFICE OF THE CITY SOLICITOR, Providence, Rhode Island, for Amici City of Providence and Mayor Jorge O. Elorza. Brian F. Curran, Corporation Counsel, CITY OF ROCHESTER, Rochester, New York, for Amicus City of Rochester. Samuel J. Clark, City Attorney, CITY ATTORNEY'S OFFICE, Saint Paul, Minnesota, for Amicus City of Saint Paul. Dennis J. Herrera, San Francisco City Attorney, CITY ATTORNEY'S OFFICE, San Francisco, California, for Amici City and County of San Francisco. Richard Doyle, City Attorney, CITY ATTORNEY'S OFFICE, San José, California, for Amicus City of San José. James R. Williams, County Counsel, OFFICE OF THE COUNTY COUNSEL, San José, California, for Amicus Santa Clara County. Peter S. Holmes, Seattle City Attorney, CITY ATTORNEY'S OFFICE, Seattle, Washington, for Amicus City of Seattle. Michael M. Lorge, Corporation Counsel, VILLAGE OF SKOKIE, Skokie, Illinois, for Amicus Village of Skokie. Stephanie Steele, Corporation Counsel, DEPARTMENT OF LAW, South Bend, Indiana, for Amicus City of South Bend. Michael Rankin, City Attorney, CITY ATTORNEY'S OFFICE, Tucson, Arizona, for Amicus City of Tucson. Michael Jenkins, JENKINS & HOGIN, LLP, Manhattan Beach, California, for Amicus City of West Hollywood. Aaron X. Fellmeth, ARIZONA STATE UNIVERSITY SANDRA DAY O'CONNOR COLLEGE OF LAW, Phoenix, Arizona; Bruce V. Spiva, Elisabeth C. Frost, Amanda R. Callais, PERKINS COIE LLP, Washington, D.C., for Amici International Law Scholars and Non-Governmental Organizations. Ilana H. Eisenstein, John M. Leitner, Ryan S. Macpherson, DLA PIPER LLP (US), Philadelphia, Pennsylvania; Donald Francis Donovan, David W. Rivkin, Jennifer R. Cowan, Elizabeth Nielsen, DEBEVOISE & PLIMPTON LLP, New York, New, for Amicus International Bar Association's Human Rights Institute. Peter Margulies, ROGER WILLIAMS UNIVERSITY SCHOOL OF LAW, Bristol, Rhodes Island; Alan E. Schoenfeld, Scott McAbee, WILMER CUTLER PICKERING HALE AND DORR LLP, New York, New York, for Amicus Scholars of Immigration Law. Peter Karanjia, Geoffrey Brounell, Washington, D.C., Victor A. Kovner, DAVIS WRIGHT TREMAINE LLP, New York, New York; Elizabeth B. Wydra, Brianne J. Gorod, David H. Gans, CONSTITUTIONAL ACCOUNTABILITY CENTER, Washington, D.C.; Raymond H. Brescia, Professor of Law, ALBANY LAW SCHOOL, Albany, New York, for Amicus Members of Congress. Meir Feder, Rasha Gerges Shields, JONES DAY, New York, New York, for Amici Professors of Federal Courts Jurisprudence, Constitutional Law, and Immigration Law. Thomas J. Perrelli, Lindsay C. Harrison, Tassity S. Johnson, JENNER & BLOCK LLP, Washington, D.C., for Amici Colleges and Universities and Clergy Members. Jennifer K. Brown, Amanda Aikman, New York, New York, Purvi G. Patel, Los Angeles, California, Marc A. Hearron, Sophia M. Brill, Sandeep N. Nandivada, MORRISON & FOERSTER LLP, Washington, D.C., for Amicus Interfaith Group of Religious and Interreligious Organizations. Tina R. Matsuoka, Navdeep Singh, Meredith S.H. Higashi, Rachana Pathak, Albert Giang, NATIONAL ASIAN PACIFIC AMERICAN BAR ASSOCIATION, Washington, D.C.; Joshua David Rogaczewski, James W. Kim, Philip J. Levine, MCDERMOTT WILL & EMERY LLP, Washington, D.C., for Amicus National Asian Pacific American Bar Association. Andrew J. Pincus, Paul W. Hughes, John T. Lewis, MAYER BROWN LLP, Washington, D.C., for Amicus Technology Companies. Abed A. Ayoub, Samer E. Khalaf, Yolanda C. Rondon, Anton G. Hajjar, AMERICANARAB ANTI-DISCRIMINATION COMMITTEE, Washington, D.C.; Christopher J. Wright, Adrienne E. Fowler, E. Austin Bonner, HARRIS, WILTSHIRE & GRANNIS LLP, Washington, D.C., for Amicus The American-Arab Anti-Discrimination Committee. Robert S. Chang, Lorraine K. Bannai, Ronald A. Peterson Law Clinic, Fred T. Korematsu Center for Law and Equality, SEATTLE UNIVERSITY SCHOOL OF LAW, Seattle, Washington; Pratik A. Shah, Martine E. Cicconi, Washington, D.C., Robert A. Johnson, Alice Hsu, New York, New York, Jessica M. Weisel, AKIN GUMP STRAUSS HAUER & FELD LLP, Los Angeles, California; Eric Yamamoto, Fred T. Korematsu, Professor of Law and Social Justice, UNIVERSITY OF HAWAII WILLIAM S. RICHARDSON SCHOOL OF LAW, Honolulu, Hawaii; Robert L. Rusky, San Francisco, California; Dale Minami, Donald K. Tamaki, MINAMI TAMAKI LLP, San Francisco, California; Peter Irons, Director Emeritus, Earl Warren Bill of Rights Project, UNIVERSITY OF CALIFORNIA, SAN DIEGO, San Diego, California; Leigh-Ann K. Miyasato, Honolulu, Hawaii; Rodney L. Kawakami, Seattle, Washington, for Amici Karen Korematsu, Jay Hirabayashi, Holly Yasui, The Fred T. Korematsu Center for Law and Equality, Civil Rights Organizations, and National Bar Associations of Color. Gare A. Smith, Michael B. Keating, Kristyn M. DeFilipp, Christopher E. Hart, Daniel L. McFadden, FOLEY HOAG LLP, Washington, D.C., for Amicus Massachusetts Technology Leadership, Council, Inc.

Author of Opinion: Chief Judge Gregory wrote the opinion of the Court, in which Judges Motz, King, Keenan, Wynn, Diaz, Floyd, Thacker, and Harris joined. Chief Judge Gregory wrote a concurring opinion, in which Judge Wynn joined as to Part I. Judge Keenan wrote a concurring opinion, in which Judge Wynn joined as to Part I, Judge Diaz joined as to Part I and Part II.A.2, and Judge Thacker joined in full. Judge Wynn wrote a concurring opinion. Judge Harris wrote a concurring opinion, in which Judges Motz and King joined. Judge Niemeyer wrote a dissenting opinion, in which Judge Agee and Senior Judge Shedd joined. Judge Traxler wrote a dissenting opinion. Judge Agee wrote a dissenting opinion, in which Judge Niemeyer and Senior Judge Shedd joined.

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/17/2018 05:26 PM     4th Circuit     Comments (0)  

  Kumar et al. v. Republic of Sudan -- Fourth Circuit
Signed, Sealed . . . Undelivered: Service of Process Against a Foreign State Must be Delivered to Office in the Foreign State

Area of Law: Civil Procedure, Statutory Law, International Law

Issues Presented: Whether the district court erred in holding that Kumar correctly served process in accordance with 28 USC §1608(a)(3), and thereby allowed the district court to exercise jurisdiction over the Republic of Sudan.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held that plaintiff-appellee Kumar's method of serving process did not comport with the statutory requirements of 28 USC §1608(a)(3), and therefore the district court lacked jurisdiction over the Republic of Sudan. The Fourth Circuit found that service of process against a foreign state must align with the language in 28 USC §1608 (the Foreign Sovereign Immunity Act - FSIA). Because Kumar did not address and deliver process to the office of the foreign state in the foreign state's land, but rather to its embassy office in Washington D.C., Kumar's service of process did not meet the statutory requirement.

Extended Summary: In 2000, Al Qaeda bombed the USS Cole, a navy missile destroyer, in the Port of Aden in Yemen. In 2004, family members of the seventeen deceased sailors filed a complaint against the Republic of Sudan. Though foreign governments are typically immune from suit, the Foreign Sovereign Immunity Act ("FSIA") permits suits against a foreign state that aids in certain terrorist activities. After Sudan failed to enter an appearance or otherwise defend against the suit, the district court issued a default judgment holding Sudan liable for compensatory damages. The plaintiffs-appellees then appealed the district court's denial of their claim for additional damages.

During the course of that appeal, Congress passed the National Defense Authorization Act ("NDAA"). The NDAA reenacted the immunity-stripping language of the terrorism exception, while also repealing the FSIA's terrorism exception and creating a new substantive cause of action authorizing recovery of non-economic damages.

After additional procedural steps, the original appeal was eventually dismissed and the plaintiff-appellees filed a new related complaint seeking non-economic damages, alleging that Sudan's conduct satisfied the new language of the NDAA and caused the death of the seventeen sailors. In an attempt to effectuate service of process, the clerk of court sent the requisite documents to Sudan's Minister of Foreign Affairs at the Sudanese embassy in Washington, D.C. Someone at the embassy signed for and accepted the documents, but Sudan did not thereafter enter an appearance in the case or file any responsive documents. The trial court ultimately issued a default judgment, awarding the plaintiffs-appellees a collective total of more than $34 million.

Sudan moved to vacate the default judgments. Among other things, Sudan argued that the district court lacked personal jurisdiction over it because Kumar had not properly effectuate service of process by sending documents to the Sudanese embassy in Washington, D.C. Specifically, Sudan complained that service at the embassy did not satisfy the requirements of 28 USC §1608(a)(3) and also violated the 1961 Vienna Convention. After the district court denied Sudan's motion, Sudan appealed.

The Fourth Circuit began its analysis of the statute by determining the intent of Congress. In reading 28 USC 1608(a)(3), the Fourth Circuit said that there are four precise methods for service of process that can be used against foreign states. The Fourth Circuit found that if Congress aimed to allow a non-delineated method to satisfy the statutory requirement, then Congress would have included it in the statute. By not doing so, the Fourth Circuit reasoned that Congress did not intend for noncompliance with one of the four listed methods to be a permissible means of effectuating service of process.

Kumar then argued that the statute did not impose a specific geographic location for the service of process and that process simply needed to be "addressed and dispatched" to the head of the ministry of foreign affairs. The Fourth Circuit, however, noted that sister circuits have held that process needs to be delivered to the head of the ministry of foreign affairs in the foreign state. Moreover, the Fourth Circuit said that just because the statutory language does not precisely state that process must be served to the address in the foreign state did not mean that Kumar's interpretation of the statute, permitting service of process to the foreign state's embassy in Washington, D.C., was correct either. Since the head of the ministry of foreign affairs is rarely in Washington, D.C., the Fourth Circuit noted that service of process to that location would conflict with congressional intent.

The Fourth Circuit also went beyond the plain meaning of the statute and looked at the legislative history behind 28 USC §1608(a)(3), as well as the United States' obligations under the Vienna Convention. The Fourth Circuit stated that when a plaintiff relies on the foreign states' embassy as the vehicle to effectuate service of process, that action encroaches on the unique characteristics of a diplomatic mission recognized and protected by the Vienna Convention and casts the embassy in a role as an agent for the service of process that it is not designed to handle. Therefore, it would not make sense for a foreign judiciary to recognize the United States' interpretation of the Vienna Convention when it comes to rejecting service of process when it comes to its own embassies if that same method of serving process on foreign states is permitted in the United States. As such, Kumar's method of serving process was inappropriate, and the Fourth Circuit reversed the district court's denial of Sudan's motion to vacate entry of judgment, vacate the judgments against it, and remand to the district court with instructions to allow Kumar the opportunity to perfect service of process in a manner consistent with the Fourth Circuit's opinion.

The Fourth Circuit's holding adds to the tension among the circuits in resolving this issue. The Fourth Circuit's opinion is consistent with the opinions of the D.C. and Seventh Circuit, but is in conflict with the Second Circuit's opinion, which held that serving Sudan's head of the ministry of foreign affairs in a package that was delivered by certified mail to the Sudanese embassy in Washington, D.C., satisfied 28 USC §1608(a)(3)'s requirements.

To read the full opinion click here.

Panel: Judges Wilkinson, Duncan, and Agee

Argument Date: 10/24/2017

Date of Issued Opinion: 01/19/2018

Docket Number: No. 16-2267

Decided: Decided by published opinion

Case Alert Author: Saikrishna Srikanth, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Christopher M. Curran, WHITE & CASE, LLP, Washington, D.C., for Appellant/Cross-Appellee. Andrew C. Hall, HALL, LAMB, HALL & LETO, P.A., Miami, Florida, for Appellees/Cross-Appellants. Lewis Yelin, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Amicus United States of America. ON BRIEF: Nicole Erb, Claire A. DeLelle, WHITE & CASE LLP, Washington, D.C., for Appellant/Cross-Appellant. Nelson M. Jones III, Houston, Texas; Kevin E. Martingayle, STALLINGS & BISCHOFF, P.C., Virginia Beach, Virginia; Roarke Maxwell, HALL, LAMB, HALL & LETO, P.A., Miami, Florida, for Appellees/Cross-Appellants. Chad A. Readler, Acting Assistant Attorney General, Sharon Swingle, Appellate Staff, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Richard C. Visek, Acting Legal Adviser, UNITED STATES DEPARTMENT OF STATE, Washington, D.C.; Dana J. Boente, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Amicus United States of America

Author of Opinion: Judge Agee; Judge Wilkinson and Judge Duncan concurred.

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/17/2018 02:12 PM     4th Circuit     Comments (0)  

  Kevin C. Rotkiske v. Paul Klemm - Third Circuit
Headline: Lack of knowledge doesn't help consumer; his FDCPA claim is barred by 1 year limitations period even though he didn't know about invalid collection suit for five years

Area of Law: Consumer Protection, FDCPA

Issue(s) Presented: Does the FDCPA one year limitations period run from the date of the violation even when the consumer does not know about it for five years?

Brief Summary: A consumer discovered in 2014 that he'd been sued in 2009, a suit he claimed violated the FDPCA. The Third Circuit en banc affirmed the dismissal of his suit because the limitations period ran from the occurrence of the violation in 2009. It rejected the consumer's argument that the FDCPA implicitly included a discovery rule for tolling of the limitations period until the consumer knew or should have know of the violation. The Court noted that equitable tolling could still apply in appropriate cases but that the consumer had not raised that argument on appeal here. The Court held that the text of the FDCPA, requiring that suits be brought "within one year from the date on which the violation occurs," implicitly excludes use of the discovery rule.

Extended Summary:

Appellant Rotkiske accrued credit card debt between 2003 and 2005. The debt was referred to Klemm for collection. Klemm filed suit but couldn't effect service on Rotkiske because he was no longer at the address on file. Klemm withdrew the suit but filed again in 2009 and served it at the same address where someone purportedly accepted service for Rotkiske. Klemm then took a default judgment. Rotkiske only learned about the suit and the judgment in 2014 when he applied for a mortgage. He sued Klemm under the FDCPA and asserted that his 2015 suit was timely based on the discovery rule as he was unaware of the collection suit until 2014. The Third Circuit en banc affirmed the dismissal of Rotkiske's suit as untimely.

The Court held that the plain language of the FDCPA says suit must be brought "within one year from the date on which the violation occurs," and that plain language excludes use of the discovery rule. The Court further analogized its interpretation of the FDPCA to the Supreme Court's holding in TRW, Inc. v. Andrews in which the Supreme Court found that the FCRA implicitly rejected application of a general discovery rule by explicitly including a more limited discovery rule. The Third Circuit noted that, similarly, the FDCPA implicitly rejected a discovery rule by its use of the occurrence language. It was unswayed by Rotkiske's emphasis on the Third Circuit's long standing history of interpreting the FDCPA in a manner protective of consumers, noting that victims of debt collection violations such as harassment are usually quite aware of the collector's behavior.

The Court stressed that equitable tolling remains available within the discretion of the trial court where the facts support it but that Rotkiske had not raised that argument on appeal so it was not before the Court.


The full opinion can be found at

Panel: Smith, Chief Judge: McKee, Ambro, Chagares, Jordan, Hardiman, Greenaway, Jr., Vanaskie, Shwartz, Krause, Restrepo, Bibas, and Fisher, Circuit Judges, sitting en banc.


Argument Date: February 21, 2018

Date of Issued Opinion: May 15, 2018

Docket Number: No. 16-1668

Decided: Affirmed

Counsel: Matthew B. Weisberg, Adina H. Rosenbaum, Esq., Counsel for Plaintiff-Appellant Carl E. Zapffe, Counsel for Appellee


Author of Opinion: Hardiman, Circuit Judge

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 05/17/2018 02:05 PM     3rd Circuit     Comments (0)  

  William Krieger v. Bank of America, N.A. - Third Circuit
Headline: Scam victim's credit card dispute was timely based on bank's reinstatement of the charge

Area of Law: Consumer Protection, FCBA and TILA

Issue(s) Presented: Does the dispute period under TILA run from the first billing statement on which a disputed amount appears even where the bank removes the charge and later reinstates it?

Brief Summary: A consumer fell victim to a phone scam, resulting in a $657 charge on his credit card bill. He called the bank immediately after he realized he had been scammed. The bank told him to wait for the charge to appear on his bill. He did and contested it in July. The bank then agreed to remove the charge while it investigated. In September, the bank reinstated the charge. The consumer promptly wrote the bank, disputing the charge and explaining the unauthorized use of the card. The bank refused to remove the charge so he paid it and then sued under the Fair Credit Billing Act and the Truth In Lending Act. The Third Circuit reversed the dismissal of the suit, holding that the consumer had stated a claim. It held that the 60 day limit on disputes runs from the billing cycle when the charge was reinstated, not from the cycle when it first appeared. It further held TILA provides a private cause of action for claims that a bank violated TILA's unauthorized use provisions and that the consumer asserted actual damages, not just a claim for reimbursement.

Extended Summary:

William Krieger fell victim to a telephone scammer who claimed to be calling from Microsoft about Krieger's computer. His daughter intervened while Krieger was on the phone with the scammer but the scammer had already obtained Krieger's credit card information. Krieger called the issuer, Bank of America, N.A. (BANA), to notify it of the scam and of potential unauthorized charges. BANA informed him that a $657 charge to Western Union had already appeared. He protested but was told nothing could be done until he received his next billing statement. He got the bill on July 29, saw the charge, and promptly called BANA. After some back and forth, a BANA representative told him that the charge would be removed pending investigation and that BANA considered the matter resolved. Krieger received a $657 credit on his August bill. But in September, BANA notified him that the charge would be reinstated because its investigation found that the charge, a wire transfer to a man in India, was valid. Krieger protested to no avail. The charge appeared on his September bill. To avoid interest and penalties, he paid it but also wrote BANA disputing the charge and detailing the history. He then sued under the FCBA and TILA, based on BANA's failure to limit the charge to $50, despite the unauthorized use and based on his payment of the disputed charge.

The Third Circuit reversed the District Court's dismissal for failure to state a claim. The Court held that the 60 day notice period that a consumer has under the FCBA to dispute a charge in writing runs from the date of the bill that contains the reinstated charge. The Court rejected BANA's argument that the notice period must run from the first time the charge appeared, noting that such an interpretation makes no sense where, as here, the consumer had every reason to think that the matter was resolved by the bank's agreement to remove the charge. The only logical reading of the statute is that the notice period should run from the time the disputed charge is reinstated on the bill. Krieger's notice was timely as he sent it only 11 days after he received the bill with the reinstated charge.

The Third Circuit also reversed dismissal of Krieger's claim that BANA violated the unauthorized use provisions of TILA which should have limited his liability to $50. The Court held that TILA provides a private right of action for such a violation in 15 U.S.C.§1640 which includes violations of section 1643, the unauthorized use provision. It further held that Krieger's claim was for actual damages, given he paid the charge, not for reimbursement.

The Court grounded its reasoning in the protective purposed of the two statutes, which were intended to level the playing field for consumers dealing with lenders. It reversed and remanded the case to the District Court.


The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/171275p.pdf

Panel: Ambro, Krause, Circuit Judges; and Conti, Chief District Judge of the Western District of PA

Argument Date: September 27, 2017

Date of Issued Opinion: May 16, 2018

Docket Number: No. 17-1275

Decided: Reversed and remanded

Counsel: Brett M. Freeman and Carlo Sabatini, for Appellant; Michael C. Falk for Appellee

Author of Opinion: Krause, Circuit Judge

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 05/17/2018 12:28 PM     3rd Circuit     Comments (0)  

  United States v. Parker - - Fourth Circuit
Informing, Not Infringing: Warning Accused About Possible Consequence of Perjury Not Sufficiently Chilling to Violate Due Process

Areas of Law: Tax Law, Constitutional Law

Issue Presented: Whether accused's due process right to testify was infringed by district judge's pre-testimony warning that testimony amounting to perjury might result in a sentencing enhancement for obstruction of justice.

Brief Summary: In an unpublished opinion, the United States Court of Appeals for the Fourth Circuit held that when a district court warns a defendant that committing perjury could result in a sentencing enhancement, that court is not infringing on the due process rights of the defendant to testify. While a defendant has a right to testify, a defendant does not have the right to commit perjury. By warning a defendant that such behavior could enhance his sentence, the district court merely provided information that allowed the defendant to make an informed decision about whether or not to testify.

Extended Summary: In 2008, Charles W. Parker hired James Newby, a certified public accountant, to prepare four years of federal income tax returns (2004-2008). Newby informed Parker that the latter owed federal income taxes for the 2007 year. However, instead of asking Newby to prepare that return, Parker paid another return preparer, Harry Williams, $7,500 to prepare the return. Williams submitted Parker's return using a falsified form called 1099-OID and reported over $400,000 in false income. Parker received a $283,875 refund from the IRS before the latter discovered the fraud. Upon doing so, the IRS demanded repayment from Parker and executed a search warrant for Williams' home.

Parker then found another return preparer, Penny Jones, and paid Jones $750 per return. Jones aided Parker in defrauding the IRS, again submitting the phony 1099-OID form and amending Parker's returns for the other three years as well. Parker subsequently referred four acquaintances to Jones. These acquaintances forwarded Parker their financial information, and Parker then relayed that information to Jones to prepare fraudulent returns. Jones submitted false 1099-OID forms on behalf of Parker's acquaintances and the acquaintances received substantial refunds from the IRS. Two of the acquaintances, a married couple, who received a $1.7 million refund from the IRS then paid Parker $182,370 for his role in setting up the fraud scheme. In sum, the IRS refunded Parker and his associates nearly $2 million.

At trial, Parker's attorney informed the court that Parker would not testify. The district court judge questioned Parker to ensure he understood his constitutional rights. The district court also stated that if Parker testified and lied under oath, the court could consider enhancing Parker's sentence for obstruction of justice if the jury convicted him. Parker confirmed to the district judge that he understood his constitutional rights and Parker's attorney did not object to the district judge's comments.

On appeal, Parker contended that the district court's warning about committing perjury while testifying and possibly receiving an enhanced sentence for obstruction of justice infringed on his due process right to testify. However, because Parker did not object to the district court's words at the time they were uttered, the Fourth Circuit reviewed the issue only for plain error. The Fourth Circuit said that in order to win on his claim, Parker had to show (1) that the district court erred, (2) that the error was clear and obvious, and (3) that the error affected his substantial rights, meaning that it affected the outcome of the district court proceedings. The Fourth Circuit found the trial judge's words may have impacted Parker's decision to testify, but those words did not create a constitutional infirmity. Rather, the trial judge merely informed Parker about what issues could arise if he were to commit perjury under oath. The Fourth Circuit also noted that while it had not addressed the issue in a published opinion, both the Second and Sixth Circuits had examined the issue. Agreeing with those courts, the Fourth Circuit held that Parker failed to demonstrate that the district court plainly erred.

To read the full opinion click here.

Panel: Judges Motz, Duncan, and Thacker

Argument Date: 12/06/2017

Date of Issued Opinion: 01/11/2018

Docket Number: No. 16-4404

Decided: Decided by unpublished opinion.

Case Alert Author: Saikrishna Srikanth, Univ. of Maryland Carey School of Law

Counsel: Nancy S. Forster, FORSTER, JOHNSON & LECOMPTE, Baltimore, Maryland, for Appellant. David A. Hubbert, Acting Assistant Attorney General, S. Robert Lyons, Chief, Criminal Appeals & Tax Enforcement Policy Section, Gregory Victor Davis, Katie Bagley, Tax Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.
Author of Opinion: Judge Duncan; Judge Motz and Judge Thacker joined

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/17/2018 12:17 PM     4th Circuit     Comments (0)  

May 15, 2018
  Sanchez v. Sessions -- Fourth Circuit
Extreme, Rare, and Obvious: Court Finds "Egregious Violation" Rule Applies to Fourth Amendment Suppression Claims in Civil Deportation Proceedings

Areas of Law: Immigration Law

Issues Presented: Whether immigration judge erred in applying narrower "egregious violation" rule instead of applying the exclusionary rule in full force? Whether immigration judge erred in finding no egregious violation of Sanchez's Fourth Amendment rights?

Brief Summary: The U.S. Court of Appeals for the Fourth Circuit denied Sanchez's petition, finding that the immigration judge applied the appropriate standard and that Officer Acker did not egregiously violate Sanchez's Fourth Amendment rights. In doing this the Fourth Circuit evaluated whether the exclusionary rule imposes costs on civil deportations that outweigh the benefits of implementing the standard. Additionally, the Fourth Circuit evaluated whether Officer's Acker's actions could be considered egregious.

Extended Summary: The case was argued by University of Maryland Carey Law third-year law student Barry Dalin. In May 2009, Maryland Transportation Authority Police (MdTAP) pulled over Jose Alberto Badillo Taylor ("Badillo") for a traffic violation. After Badillo failed to produce a valid drivers license, MdTAP Officer Acker noticed exposed wiring indicating the car may have been stolen. During the stop, Badillo explained to the officers that the car belonged to his friend Juventino Tenorio Davila ("Tenorio"). Badillo called Tenorio to come retrieve the car. Tenorio arrived at the scene with appellant Jairo Ferino Sanchez. Sanchez remained in the car. Officer Acker then approached the car and in an authoritative tone asked repeatedly whether Sanchez was legally in the country. Sanchez, feeling pressured and intimidated, admitted he had entered the country illegally.

Sanchez was arrested by the MdTAP officers and ultimately transferred to Immigration and Customs Enforcement ("ICE") custody. While in ICE custody, an ICE agent interviewed Sanchez and he again admitted to entering the country illegally. The agent memorialized the admission on an ICE I-213 form and based on that form instituted removal proceedings.

During his hearing, Sanchez moved to suppress all evidence of his illegal entry including the ICE I-213 form because he asserted the state police officers obtained this information by violating his Fourth and Fifth Amendment rights. The immigration judge ("IJ") found Sanchez had not demonstrate any Fifth Amendment basis for suppression of evidence. The IJ further declined to find a violation of the Fourth Amendment because Sanchez did not suggest the officers intimidated or frightened him, and could not point to any other form of coercion or duress the officers used to get him to reveal his immigration status. Finally, the IJ found that even if MdTAP officers violated Sanchez's Fourth Amendment rights, any such violation had not been egregious.

Sanchez appealed to the Board of Immigration Appeals ("BIA"). Sanchez asserted that the IJ applied the incorrect legal standard. The IJ declined to suppress Sanchez's statements because any violation of Sanchez's Fourth Amendment right was not "egregious" under INS v. Lopez-Mendoza, 468 U.S. 1032 (1984), and Yanez-Marque v. Lynch, 789 F.3d 434 (4th Cir. 2015). Sanchez claimed that the IJ instead should have applied "the full exclusionary rule" and that under that standard the statements should have been suppressed. Alternatively, Sanchez maintained that, contrary to the IJ's conclusion, he had "suffered an egregious violation of his Fourth Amendment rights." The BIA affirmed, and Sanchez petitioned to the U.S. Court of Appeals for the Fourth Circuit Court.

Before the Fourth Circuit, Sanchez again argued that the lower court should have applied the exclusionary rule in full force rather than the narrower "egregious violation" rule. The Fourth Circuit considered the likely deterrent value of applying the full exclusionary rule, and found that applying the rule would likely have some deterrent effect on official misconduct. However, the court went on to conclude that any additional deterrent effect was not appreciable, and thus could not justify application. In reaching this conclusion, the court pointed to the combined effect of the "egregious violation" rule and the court's recent holding in Santos v. Fredrick County Bd. of Comm. (2013) (finding state and local law enforcement officers lack authority to detain or arrest individuals based solely on suspected civil immigration violations absent express authorization from federal authorities).

The court also found the potential for additional deterrence did not outweigh the substantial cost of requiring immigration judges to apply different rules for suppression depending on the circumstances of the particular case before them. Such case-specific suppression analysis would disrupt and complicate the simple deportation hearing system. Therefore, any additional deterrence that standard application of the exclusionary rule might accomplish was outweighed by the substantial cost brought on by making the civil deportation process more complicated. In light of the availability of the "egregious violation" rule, the court found there was no convincing indication that standard application of the exclusionary rule in civil deportation proceedings would contribute materially to Fourth Amendment protections.

The Fourth Circuit next evaluated whether Officer Acker's actions were egregious and therefore required suppression in the instant case. Sanchez argued that Officer Acker lacked the legal authority to enforce civil immigration violations, therefore, his acts were per se egregious. However, at the time of Sanchez's detention, Santos had not yet been decided. Sanchez also asserted that Officer Acker lacked any reasonable suspicion of wrongdoing and was motivated by the fact that he and the other men in the car were Latino. A stop based solely on race or ethnicity is per se egregious. But here, Sanchez had not established that Acker acted solely on the basis of race or ethnicity. The IJ found the exposed wire put Officer Acker on higher alert and the officer's testimony was that the vehicle had extremely dark tinted windows, and the occupants were acting suspiciously. In light of this additional evidence, it could not be found that race alone motivated the MdTAP officers' actions.

Finally, while Officer Acker's questioning was aggressive, he showed no indication of threatening or violent behavior. Something egregious is by nature "extreme," "rare," and "obvious." It is thus a demanding standard to establish -- a standard that Sanchez did not meet.

To read the full opinion, click here.

Panel: Before MOTZ and DIAZ, Circuit Judges, and Robert J. CONRAD, Jr., United States District Judge for the Western District of North Carolina, sitting by designation

Argument Date: 01/25/18

Date of Issued Opinion: 03/27/18

Docket Number: 16-2330

Decided: Affirmed by published opinion.

Case Alert Author: Tokunbo Ibitoye, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Barry Dalin, UNIVERSITY OF MARYLAND FRANCIS KING CAREY SCHOOL OF LAW, Baltimore, Maryland, for Petitioner. Kohsei Ugumori, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent. Matthew E. Price, JENNER & BLOCK, LLP, Washington, D.C., for Amicus American
Immigration Council. ON BRIEF: Maureen A. Sweeney, Supervising Attorney, Adilina
Malavé, Third Year Law Student, Anne Brenner, Third Year Law Student, University of
Maryland Carey Immigration Clinic, UNIVERSITY OF MARYLAND FRANCIS KING
CAREY SCHOOL OF LAW, Baltimore, Maryland, for Petitioner. Chad A. Readler,
Acting Assistant Attorney General, Emily Anne Radford, Assistant Director, Office of
Immigration Litigation, UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C., for Respondent. Sejal Zota, NATIONAL IMMIGRATION PROJECT OF THE
NATIONAL LAWYERS GUILD, Boston, Massachusetts, for Amicus National
Immigration Project of the National Lawyers Guild. Deborah A. Jeon, Nicholas Steiner, AMERICAN CIVIL LIBERTIES UNION OF MARYLAND, Baltimore, Maryland, for
Amicus ACLU of Maryland. Melissa Crow, AMERICAN IMMIGRATION COUNCIL,
Washington, D.C., for Amicus American Immigration Council.

Author of Opinion: Judge Motz

Case Alert Supervisor: Professor Renée Hutchins

Edited: 05/15/2018 at 01:33 PM by Renee Hutchins

    Posted By: Renee Hutchins @ 05/15/2018 01:06 PM     4th Circuit     Comments (0)  

  Rena C. v. Colonial School District - Third Circuit
Headline: Parent substantially justified in rejecting 10 day offer under IDEA where it did not explicitly include attorney's fees.

Area of Law: IDEA, Attorney's Fees

Issue(s) Presented: Whether parent was substantially justified in rejecting School District's 10 day offer under IDEA where it did not explicitly include attorney's fees that the District should have known had accrued?

Brief Summary: Parent rejected School District's 10 day offer and then obtained essentially the same relief after a hearing as provided for in the offer. The Court held that her rejection was substantially justified because the School District's 10 day offer did not explicitly include attorney's fees. The Court stressed that a parent should not have to choose between an appropriate placement for her child and payment of attorney's fees. Because the parent had filed a due process complaint, the District was aware she had incurred attorney's fees yet the offer did not explicitly include them, making her rejection of the offer substantially justified.

Extended Summary:

Rena C. filed an administrative due process complaint against the Colonial School District under IDEA, seeking payment for her daughter's placement at a private school, based on her special education needs. The District sent a 10 day offer which stated it would pay for the tuition at the unilateral placement in order to avoid liability for attorney's fees if the parent became a prevailing party. IDEA entitles prevailing plaintiffs to attorney's fees but also allows Districts to limit them by making an offer of settlement at least 10 days before a hearing. If such a 10 day offer is made, then the parent cannot obtain fees incurred after the offer is made unless she gets more favorable relief at the hearing or she was substantially justified in rejecting the offer.

The Court found that Rena C. did not obtain more favorable relief because the offer was for tuition, which implicitly included the base tuition and the extra charge for one on one educational support. However, the Court also found that Rena C. was substantially justified in rejecting the offer because it did not explicitly include attorney's fees. The Court stated that IDEA provided for attorney's fees to enable parents to get help to protect their child's right to a free and appropriate education. A parent should not have to choose between an appropriate placement and attorney's fees. Here, where the District was aware that Rena C. had filed a due process complaint and had incurred attorney's fees, it was obligated to make clear that the offer covered the fees. Because the offer was not clear, Rena C. was substantially justified in rejecting it.


The Third Circuit reversed the order of the District Court denying the award of attorneys' fees and remanded for calculation of an appropriate fee award.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/171161p.pdf

Panel: Greenaway, Jr., Nygaard, and Fisher, Circuit Judges

Argument Date: October 23, 2017

Date of Issued Opinion: May 14, 2018

Docket Number: No. 17-1161

Decided: Reversed and Remanded

Case Alert Author:

Counsel: David J. Berney, Esq., Counsel for Appellant; Ellen M. Saideman, Esq., Counsel for Amicus Appellant; Karl A. Romberger, Jr., Esq., Counsel for Appellee; Emily J. Leader, Esq., Pennsylvania School Boards Association, Sarah B. Dragotta, Esq., Kevin M. McKenna, Esq., Nicole D. Snyder, Esq., Counsel for Amicus Appellees.

Author of Opinion: Judge Fisher

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 05/15/2018 04:03 AM     3rd Circuit     Comments (0)  

May 10, 2018
  Zambrano v. Sessions -- Fourth Circuit
Same Gang, More Violence: Changed Circumstances Exception Now Applies to Old but Intensified Instances of Persecution

Areas of Law: Immigration

Issue Presented: Whether the "changed circumstances" exception in 8 U.S.C. § 1158(a)(2)(D) can be satisfied by new instances of persecution that support an existing but un-asserted asylum claim.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held the immigration judge erred in ruling that additional proof of an existing asylum claim may not establish changed circumstances. The Fourth Circuit applied the reasoning of three of its sister circuits to expand the "changed circumstances" exception to cases where preexisting threats of persecution intensify.

Extended Summary: Romero Zambrano, a native Honduran, joined his nation's military after high school. One of his military duties was to arrest gang members. Zambrano's gang crackdowns made him a wanted man among the notorious 18th Street gang. After Zambrano finished his service, members of the gang frequently stalked him "to get their revenge." Zambrano's mission became avoiding detection and finding ways to enter the United States for refuge. After five unsuccessful attempts, Zambrano finally made it into the United States in August 2011. However, gang members continued their search. In 2012, armed members broke into Zambrano's sister's apartment and Zambrano's ex-girlfriend's apartment to search for information that could lead to Zambrano's whereabouts. In 2014, U.S. immigration authorities arrested Zambrano leading to his potential deportation. The gang celebrated the news by drastically ramping up its search efforts, including vicious assaults on and interrogations of Zambrano's friends and family in three different Honduran cities. Zambrano then sought asylum claiming that the most recent assaults represented changed circumstances because the assaults were more intense and spanned several cities compared to the smaller scale break-ins that took place in 2012. The immigration judge denied Zambrano's petition as untimely. Because Zambrano entered the United States in 2012, his deadline to file an asylum petition expired in 2013, pursuant to 8 U.S.C. § 1158(a)(2)(B). The judge found the "changed circumstances" exception to the statutory deadline did not apply to the recent intensification of preexisting threats in Zambrano's case. Zambrano appealed and the Board of Immigration Appeals ("BIA") affirmed. Zambrano then appealed to the Fourth Circuit.

The Fourth Circuit held that the BIA erred in affirming the immigration judge's decision because the intensification of preexisting threats of persecution may constitute changed circumstances sufficient to satisfy the exception.

The court first considered the overarching question of whether it had jurisdiction to review the appeal because courts generally "lack jurisdiction to review [an] immigration judge's discretionary determination [that an asylum applicant has failed to show] changed or extraordinary circumstances." Gomis v. Holder, 571 F.3d 353, 359 (4th Cir. 2009). However, the court noted that in this case it was being asked to interpret the legal definition of "changed circumstance[s]." Because Zambrano's appeal hinged on a legal question rather than a factual question, the court found jurisdiction.

Next, the court addressed the applicability of the changed circumstances exception to Zambrano's case. Noting that this was an issue of first impression in the Fourth Circuit, the court cited cases from the Second, Sixth, and Ninth Circuits. Each of those courts supported Zambrano's position. See Vohora v. Holder, 641 F.3d 1038, 1044 (9th Cir. 2011) ("An applicant is not required to file for asylum when his claim appears to him to be weak; rather he may wait until circumstances change and the new facts make it substantially more likely that his claim will entitle him to relief."); Weinong Lin v. Holder, 763 F.3d 244, 247 (2d Cir. 2014) (rejecting the BIA's contention that "even if the facts about a person's objective circumstances change, when they are altered by actions driven by 'the same reason' that led to a decision to emigrate, they cannot constitute changed circumstances."); Mandebvu v. Holder, 755 F.3d 417, 428 (6th Cir. 2014) ("[An applicant] may claim the changed-circumstances exception if he obtains 'more information' that strengthens his fear of persecution, a fear that may already have existed."). In applying the reasoning of its sister courts, the Fourth Circuit held that "[n]ew facts that provide additional support for a pre-existing [but un-asserted] asylum claim can constitute changed circumstance[s]. These facts may include circumstances that show an intensification of a preexisting threat of persecution or new instances of persecution of the same kind suffered in the past." Thus, the court remanded the case for the BIA to determine whether the 18th Street gang's recent intensification of threats constitute changed circumstances.

To read the full opinion, click here.

Note: The Fourth Circuit applied the Zambrano holding in another recently published opinion: Salgado-Sosa v. Sessions, No. 16-1594, __ F.3d __ (4th Cir. Feb. 13, 2018). There, the court similarly remanded a Honduran citizen's asylum appeal back to the BIA to determine whether a coup qualified for the expanded definition under Zambrano.

Panel: Judges Keenan, Wynn, and District Judge Gibney

Argument Date: 09/12/2017

Date of Issued Opinion: 12/14/2017

Docket Number: No. 16-2131

Decided: Vacated and remanded by published opinion.

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

Counsel: ARGUED: Benjamin Winograd, IMMIGRANT & REFUGEE APPELLATE CENTER, LLC, Alexandria, Virginia, for Petitioner. Rebecca Hoffberg Phillips, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent. ON BRIEF: Laura Jacobson, L&L IMMIGRATION LAW, PLLC, Alexandria, Virginia, for Petitioner. Chad A. Readler, Acting Assistant Attorney General, John S. Hogan, Assistant Director, Office of Immigration Litigation, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent.

Author of Opinion: District Judge Gibney

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/10/2018 12:46 PM     4th Circuit     Comments (0)  

  Sims v. Abbott et al. -- Fourth Circuit
Officer's Attempt to Collect Evidence By Forcing Teen-Suspect to Masturbate in Presence of Officer and Others Violated the Fourth Amendment

Areas of Law: Fourth Amendment

Issue Presented: Whether a police officer's order to a teenaged suspect to masturbate in the presence of others, so the officer could obtain a photograph of the child's erect penis, violated the Fourth Amendment.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that attempting to obtain a photograph of a teenaged suspect's erect penis by requiring the child to masturbate in the presence of others violated the Fourth Amendment. Additionally, the court held that the possession of a valid search warrant to obtain evidence did not confer immunity on the officer because reliance on that warrant was "objectively unreasonable."

Extended Summary: In June of 2014, the Commonwealth of Virginia charged 17-year-old Trey Sims with manufacturing and distributing child pornography in violation of Virginia law. The charge arose after Sims allegedly sent his 15-year-old girlfriend a video of himself fondling his erect penis. During the investigation, Officer David Abbott was instructed by Claiborne Richardson, the Assistant Commonwealth's Attorney for Prince William County, Virginia, to obtain a search warrant to retrieve "photographs of the genitals, and other parts of the body of [Sims]...This includes a photograph of the suspect's erect penis." After Sims was transported to a juvenile detention center, Abbott ordered Sims to masturbate in the presence of himself and two other officers in order to take a photograph of Sims' erect penis. Sims was unable to achieve an erection, but Abbott took photos of Sims' flaccid penis nonetheless.

Though the photographs were never introduced, the juvenile court ultimately found sufficient evidence to convict Sims of felony possession of child pornography and sentenced him to probation. After Sims successfully completed the terms of his probation, the court dismissed the charge against him.

Sims then filed suit against Abbott's estate (because Abbott died) and Richardson in the United States District Court for the Eastern District of Virginia seeking damages under 42 U.S.C. § 1983. The suit alleged that the search executed by Abbott violated Sims' Fourth Amendment rights. Sims also sought damages under 18 U.S.C. § 2255 alleging that as a result of the search, he was a victim of manufactured child pornography in violation of 18 U.S.C. § 2251(a). The district court dismissed both claims. The district court also dismissed all claims against Richardson, finding he was immune from suit to the extent he was acting in his official prosecutorial capacity. Sims appealed.

The Fourth Circuit first reviewed Sims' § 1983 claim. Sims argued that Abbott violated his Fourth Amendment right by requiring him to masturbate in the presence of others. In response, Abbott argued that he acted pursuant to a valid search warrant and was therefore entitled to qualified immunity.

In order to overcome a qualified immunity defense, a plaintiff must allege sufficient facts to set fourth a violation of a constitutional right. The plaintiff must also establish that the constitutional right was clearly established at the time of the violation. The instant case involves a "sexually invasive search." Such searches require heightened scrutiny, especially where a party involved is a minor. To determine whether a sexually invasive search is reasonable, a four-factor test is applied. Bell v. Wolfish, 441 U.S. 520, 559 (1979). This test requires inquiry into: "(1) the scope of the particular intrusion; (2) the manner in which the search was conducted; (3) the justification for initiating the search; and (4) the place in which the search was performed."

As to the first factor (scope), the court found it was "exceptionally intrusive" because it required more than visual inspection of Sims' genitalia. As to the second factor (manner), the court held that requiring Sims to masturbate in the presence of three armed officers constituted the "ultimate invasion of personal dignity." Amaechi v. West, 237 F.3d 356, 363-64 (4th Cir. 2001). As to the third factor, the court found that there was no justification for the search because the juvenile court did not need photographs of Sims' erect penis to convict him. Finally, the court could not "perceive any circumstance that would justify a police search requiring an individual to masturbate in the presence of others." Thus, the court held that Sims had sufficiently alleged a violation of his Fourth Amendment rights. Next, the court considered the second prong of the qualified immunity analysis, and found the precedent to be clear.

With respect to Abbott's argument that he was entitled to immunity because he was in possession of a valid search warrant, the court held that the "obvious unconstitutional nature" of the search warrant made reliance on the warrant "objectively unreasonable." Accordingly, such reliance did not confer immunity upon Abbott. Graham v. Gagnon, 831 F.3d 176, 183 (4th Cir. 2016). The Fourth Circuit concluded, finding the district court erred in its decision to dismiss Sims' § 1983 claim, and remanded for further proceedings. As to Sims' § 2255 claim, the Fourth Circuit found the district court erred in dismissing that claim without addressing it, and remanded for consideration in the first instance.

To read the full opinion, click here..

Panel: Before King, Keenan, and Diaz, Circuit Judges.

Argument Date: September 14, 2017

Date of Issued Opinion: March 14, 2018

Docket Number: No. 16-2174

Decided: Vacated in part, affirmed in part, and remanded by published opinion. Judge Keenan wrote the majority opinion, in which Judge Diaz joined. Judge King wrote a dissenting opinion

Case Alert Author: Rhya Martin, Univ. of Maryland Carey School of Law

Counsel: Victor M. Glasberg, Maxwelle C. Sokol, VICTOR M. GLASBERG & ASSOCIATES, Alexandria, Virginia, for Appellant. Julia Bougie Judkins, BANCROFT, MCGAVIN, HORVATH & JUDKINS, P.C., Fairfax, Virginia, for Appellee

Author of Opinion: Judge Keenan

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/10/2018 12:26 PM     4th Circuit     Comments (0)  

May 9, 2018
  Sky Cable, LLC v. DIRECTV, Inc. -- Fourth Circuit
Turning Up the Volume on Reverse Piercing: Court Permits DIRECTV to Hold LLCs Liable for TV Programmer's Wrongdoings

Areas of Law: Corporate

Issue Presented: Whether Delaware law permits a judgment creditor to reverse pierce the corporate veil to hold a limited liability company ("LLC") liable for its sole member's wrongdoing.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held the district judge did not err in ruling that the veil of an LLC may be reverse pierced when the LLC has only one member and the LLC acts as that member's alter ego. The Fourth Circuit applied Delaware law, but because Delaware has not expressly allowed reverse piercing, the court was tasked with predicting what a Delaware court would hold.

Extended Summary: Randy Coley operated several businesses that provide cable television programming to consumers. In 2000, Coley entered into a contract with DIRECTV whereby Coley would provide 168 rooms at the Massanutten Resort in Virginia with DIRECTV programming, and in return, DIRECTV would share in the revenue. Eleven years later, DIRECTV discovered that Coley fraudulently provided more than 2,300 rooms at the resort with DIRECTV programming, but DIRECTV only received its share of revenue from the 168 rooms. Shortly thereafter, a third-party brought suit against Coley. DIRECTV intervened and was ultimately awarded a $2.39 million judgment against Coley. Because Coley had few personal assets, DIRECTV was unable to collect any portion of the judgment owed. As a result, DIRECTV conducted due diligence and discovered that Coley managed three LLCs, one of which - Its Thundertime, LLC ("ITT") - held title to some of Coley's assets. To enforce its judgment, DIRECTV filed a motion in the district court to reverse pierce the corporate veil and seek the assets that ITT and Coley's other LLCs owned. The United States District Court for the Western District of Virginia found that the three LLCs were Coley's alter egos and that Delaware would permit reverse piercing in this scenario. Accordingly, the court amended the judgment to render Coley's three LLCs co-judgment debtors with Coley. Coley then appealed to the Fourth Circuit.

The Fourth Circuit held that the district court did not err in determining that Delaware would allow DIRECTV to reverse pierce the corporate veil because the LLCs were clearly Coley's alter egos and Coley was the sole member of each LLC.

The court first considered Kimberli Coley's - Coley's wife's - right to appeal as a non-party. In the pre-judgment litigation, Kimberli Coley testified that she did not have a membership interest in ITT. As a result, the district court dismissed her from the case. Recognizing that the district court may not have permitted reverse piercing if any of the three LLCs had more than one member, Kimberli Coley appealed as a non-party to claim that she actually had a 50% interest in ITT. The court rejected the appeal, holding that Coley could sufficiently represent his wife's argument on appeal and also that the equities did not favor the appeal, given Kimberli Coley's contradicting statements.

Next, the court addressed the applicability of an action to reverse pierce the corporate veil under Delaware law. Delaware law was appropriate because the law of the state where an entity is incorporated is controlling for piercing actions, and Coley's LLCs were formed in Delaware. While Delaware has allowed creditors of corporations to pierce a corporation's veil to reach its shareholders, the court noted that no Delaware court had ever recognized the right to reverse pierce. However, the Supreme Court of Delaware has stated that it would always disregard the corporate fiction when "necessary to prevent fraud or chicanery." Adams v. Clearance Corp., 121 A.2d 302, 308 (Del. 1956). The court then stated that, as the jurisdiction that harbors the majority of corporate entities, "Delaware has a powerful interest of its own in preventing the entities that it charters from being used as vehicles for fraud." NACCO Indus., Inc. v. Applica Inc., 997 A.2d 1, 26 (Del. Ch. 2009). The court argued that if Delaware draws a line, allowing "courts to hold an alter ego member liable for an entity's debts without also allowing courts to hold the alter ego entity liable for the member's debts, fraudulent members could hide assets in [their LLCs] to avoid paying a judgment." Finally, the court recognized that several states have barred reverse piercing because of the potential economic harm to innocent members. However, the court rejected this position in this context because Coley was the sole member of each LLC. Because none of the three LLCs had any other members, the court held that Delaware would permit reverse piercing.

After holding that Delaware would permit reverse piercing, the court turned to Coley's contention that the district court erred in finding that the LLCs were Coley's alter egos. Specifically, Coley argued that the LLCs had legitimate business purposes and an action to pierce the corporate veil is only appropriate where the entity is designed for a fraudulent purpose. The court rejected this assertion stating that Delaware has never required a plaintiff to show actual fraud. Instead, a plaintiff "must show a mingling of the operations of the entity and its owner plus an 'overall element of injustice or unfairness.'" NetJets Aviation, Inc. v. LHC Commc'ns, LLC, 537 F.3d 168, 176 (2d Cir. 2008). The court affirmed the district court's alter ego decision, holding that "the evidence that Mr. Coley and his LLCs are alter egos is substantial." For example, the court noted that Coley directed one of his LLCs to pay his personal car payments on two vehicles; another of the LLCs made mortgage payments for properties that ITT owned; and one of the LLCs paid Coley's personal mortgage payments, for which he took a deduction on his personal tax return. Based on these facts, the court held that the district court did not err.

To read the full opinion, click here.

Panel: Judges Keenan, Wynn, and Harris

Argument Date: 01/25/2018

Date of Issued Opinion: 03/28/2018

Docket Number: No. 16-1920

Decided: Affirmed by published opinion

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

Counsel: ARGUED: James J. O'Keeffe, IV, JOHNSON, ROSEN & O'KEEFFE, LLC, Roanoke, Virginia, for Appellants. Robert Ward Shaw, GORDON & REES, LLP, Raleigh, North Carolina, for Appellant Randy Coley. John Hugo Jamnback, YARMUTH WILDSON, PLLC, Seattle, Washington, for Appellee. ON BRIEF: John W. Bryant, BRYANT & IVIE, PLLC, Raleigh, North Carolina, for Appellant Its Thundertime, LLC. Patrick T. Jordan, GORDON & REES, LLP, Seattle, Washington, for Appellant Randy Coley

Author of Opinion: Judge Keenan

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/09/2018 02:01 PM     4th Circuit     Comments (0)  

  Kenny v. Wilson -- Fourth Circuit
Standing in School: Students Have Standing to Challenge School Laws in South Carolina

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

Issue Presented: Whether the district court erred in dismissing the plaintiffs' complaint for lack of standing in a case filed under 42 U.S.C. § 1983 challenging S.C. Code Ann. § 16-17-420 (the "Disturbing Schools Law") and S.C. Code Ann. § 16-17-530 (the "Disorderly Conduct Law").

Brief Summary: Current and former students in South Carolina, as well as a nonprofit organization called Girls Rock Charleston filed suit under 42 U.S.C. § 1983 challenging S.C. Code Ann. § 16-17-420 (the "Disturbing Schools Law") and S.C. Code Ann. § 16-17-530 (the "Disorderly Conduct Law") as unconstitutionally vague. The complaint was dismissed in district court for lack of standing because the complaint did not allege an injury in fact. On appeal, the Fourth Circuit found the plaintiffs face a credible threat of future prosecution, which constitutes an injury in fact sufficient to establish standing. The Fourth Circuit vacated and remanded the district court's judgment.

Extended Summary: The plaintiffs include four individuals: minors D.S. and S.P., Niya Kenny, and Taurean Nesmith, as well as an organization called Girls Rock Charleston. D.S. and S.P. are both high school students. D.S. is black and has a learning disability. D.S. was charged with violating the Disturbing Schools Law "after becoming involved in a physical altercation which she did not initiate and in which she was the only person who sustained an injury, a lump on her head." S.P. is white and suffers from mood and conduct disabilities. S.P. was charged with violating the Disorderly Conduct Law after cursing at a student, teasing her, and refusing to leave the library.

Kenny, a black female student, was arrested in high school and charged with violating the Disturbing Schools Law. Kenny witnessed a school resource officer pull a student and drag her onto the floor. Kenny was arrested and charged because she "attempted to document the incident and called out for someone to do something to stop the violent treatment of her classmate." Kenny withdrew from school due to fear and humiliation, but later obtained her GED. Nesmith, a black male student, was arrested and charged with violation of both statutes after complaining that an officer was engaged in racial profiling and questioning the officer's request that he provide identification.

Girls Rock Charleston operates as an after-school program that "provides mentorship, music and arts education, and leadership development to young people." Two members of Girls Rock Charleston were charged with the Disturbing Schools Law. These members were also put into a special program that "did not provide access to the courses necessary to obtain a high school diploma."

In this case, plaintiffs allege the Disturbing Schools Law is unconstitutionally vague on its face, and D.S. and S.P. challenge the Disorderly Conduct Law as unconstitutionally vague as applied in elementary and secondary public schools in South Carolina. Plaintiffs allege the statutes "violate plaintiffs' right to due process under the Fourteenth Amendment because they fail to provide sufficient notice of prohibited conduct and encourage arbitrary and discriminatory enforcement." See Kolender v. Lawson, 461 U.S. 352, 357 (1983).

The Disturbing Schools Law states:

(A) It shall be unlawful: (1) for any person willfully or unnecessarily (a) to interfere with or to disturb in any way or in any place the students or teachers of any school or college in this State, (b) to loiter about such school or college premises or (c) to act in an obnoxious manner thereon; or (2) for any person to (a) enter upon any such school or college premises or (b) loiter around the premises, except on business, without the permission of the principal or president in charge.

S.C. Code Ann. § 16-17-420(A).

The Disorderly Conduct Law states:

Any person who shall (a) be found on any highway or at any public place or public gathering in a grossly intoxicated condition or otherwise conducting himself in a disorderly or boisterous manner, (b) use obscene or profane language on any highway or at any public place or gathering or in hearing distance of any schoolhouse or church . . . shall be deemed guilty of a misdemeanor and upon conviction shall be fined not more than one hundred dollars or be imprisoned for not more than thirty days.

S.C. Code Ann. § 16-17-530.

Plaintiffs alleged that the two statutes chill their exercise of free expression and force them to refrain from exercising their freedom of speech at the risk of arrest and prosecution. Plaintiffs claimed that these laws criminalize behavior that cannot be distinguished from typical juvenile behavior. Plaintiffs also alleged that the statutes leave minority students and students with disabilities more vulnerable because they are enforced in a discriminatory manner. Plaintiffs sought (1) a declaratory judgment that the statutes violate their right to due process under the Fourteenth Amendment; and (2) a preliminary and permanent injunction enjoining defendants from enforcing the laws. The district court's dismissed the complaint finding the plaintiffs lacked standing. The Fourth Circuit reviewed that finding de novo.

On review, the Fourth Circuit applied the Babbitt test, which states there is sufficient injury in fact if plaintiffs allege "an intention to engage in a course of conduct arguably affected with a constitutional interest, but proscribed by a statute, and there exists a credible threat of prosecution thereunder." Babbitt v. Farm Workers Nat'l Union, 442 U.S. 289, 298 (1979). The first part of the Babbitt test is satisfied because the students do not know what actions may lead to criminal convictions, which deprives them of their right to notice in violation of their right to due process. The statutes also limit the students' right to free speech under the First Amendment.

The second part of Babbitt requires a credible threat of future enforcement as long as the threat is not "imaginary or wholly speculative." Babbitt, 442 U.S. at 302. The district court in this case relied on Lyons to conclude any potential injuries here were as speculative and hypothetical as the alleged future injury in Lyons. City of Los Angeles v. Lyons, 461 U.S. 95 (1983). The Fourth Circuit rejected this conclusion. Unlike Lyons, where the plaintiff did not personally allege he would experience another police encounter, did not claim a chilling effect of his First Amendment right, and did not allege City authorization of the police officers conduct; the plaintiffs here alleged future enforcement, a chilling effect on their First Amendment right, and the defendants have not disavowed enforcement of these laws in the future. The court found that S.P. and D.S. face a credible threat and prosecution under both statutes and Nesmith faces future arrest or prosecution under the Disturbing Schools Law. The court therefore vacated the district court's judgment and remanded.

To read the full opinion, click here.

Panel: Judges Duncan, Diaz, and Xinis (United States District Judge for the District of Maryland, sitting by designation)

Argument Date: 12/06/2017

Date of Issued Opinion: 03/15/2018

Docket Number: 17-1367

Decided: Vacated and remanded by published decision.

Case Alert Author: Aarti Sidhu, Univ. of Maryland Carey School of Law

Counsel:
Sarah Hinger, AMERICAN CIVIL LIBERTIES UNION FOUNDATION, INC., New York, New York, for Appellants. James Emory Smith, Jr., OFFICE OF THE ATTORNEY GENERAL OF SOUTH CAROLINA, Columbia, South Carolina for Appellees Alan Wilson, M. Bryan Turner, and A. Keith Morton; Sandra J. Senn, SENN LEGAL, LLC, Charleston, South Carolina, for Appellees J. Alton Cannon, Jr., Gregory G. Mullen, and Eddie Driggers, Jr. ON BRIEF: Dennis D. Parker, Lenora M. Lapidus, Galen L. Sherwin, AMERICAN CIVIL LIBERTIES UNION FOUNDATION, INC., New York, New York; Susan K. Dunn, AMERICAN CIVIL LIBERTIES UNION FOUNDATION OF SOUTH CAROLINA, Charleston, South Carolina, for Appellants. Alan Wilson, Attorney General, Robert D. Cook, Solicitor General, Columbia, South Carolina, for Appellees Alan Wilson, M. Bryan Turner, Lance Crowe, A. Keith Morton and Michael D. Hanshaw. W. Michael Hemlepp, Jr., CITY OF COLUMBIA ATTORNEY'S OFFICE, Columbia, South Carolina, for Appellee W.H. Holbrook. Anne R. Culbreath, WILLSON JONES CARTER AND BAXLEY, Greenville, South Carolina, for Appellee Steve Loftis. Michael S. Pitts, Logan M. Wells, CITY OF GREENVILLE, OFFICE OF THE CITY ATTORNEY, Greenville, South Carolina, for Appellee Ken Miller. Andrew F. Lindemann, DAVIDSON AND LINDEMANN PA, Columbia, South Carolina, for Appellee Carl Ritchie. Robert D. Garfield, Steven R. Spreeuwers, DAVIDSON and LINDEMANN PA, Columbia, South Carolina, for Appellee Leon Lott.

Author of Opinion:
Judge Diaz

Case Alert Supervisor:
Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/09/2018 01:44 PM     4th Circuit     Comments (0)  

  Adams v. Ferguson, et al. -- Fourth Circuit
No Transfer? No Problem: Fourth Circuit Holds Inmate Had No Constitutional Right to be Transferred to Mental Health Hospital Upon Court's Order

Areas of Law: Civil Rights, Mental Health Law

Issue Presented: Does a mentally ill inmate have a clearly established constitutional right to be transferred to a mental health facility to restore the inmate's competency upon a court's order that the inmate be so transferred?

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that a state government official was entitled to qualified immunity when she failed to cause the inmate to be transferred from a prison to a state mental health facility after a court's order for the inmate to be so transferred. The court held that housing a mentally ill inmate in prison, rather than transferring him to a state mental health facility, did not violate the inmate's clearly established constitutional rights because the failure did not "automatically and alone" amount to an "objectively excessive risk to the inmate's health and safety."

Extended Summary: Police arrested Jamycheal Mitchell in April 2015 for theft. Mitchell was housed at Hampton Roads Regional Jail ("Regional Jail"). While there, a psychologist evaluated Mitchell and concluded that Mitchell lacked the capacity to assist counsel in preparing his defense. The psychologist recommended that the court commit Mitchell to Virginia's Department of Behavioral Health & Developmental Services for inpatient treatment to restore his competency. Accordingly, the state court issued a Competency Restoration Order, which directed Mitchell to be treated at Eastern State Hospital ("the Hospital").

Mitchell never received such treatment. The clerk of court did not notify the hospital of the Competency Order for two months. When the hospital did receive the Competency Order, the person responsible for processing it put the fax in her desk and took no further action. As a result, no one entered Mitchell's name into the list of individuals waiting for beds at the hospital. Instead, Mitchell remained at the Regional Jail, where he did not receive the necessary medical care and guards denied him food and water, allowed him to live in a cell covered in feces and urine, and physically abused him. On August 19, 2015, Mitchell died from "wasting syndrome" or severe malnutrition. Months after Mitchell's death, the Office of State Inspector General reported there were more empty beds available at state mental hospitals than there were inmates waiting for beds. Roxanne Adams, on behalf of Mitchell, asserted claims under 42 U.S.C. § 1983 and state law against Debra K. Ferguson, then-Commissioner of Virginia's Department of Behavioral Health & Developmental Services, and forty-nine other defendants.

The court determined it had jurisdiction to review the district court's denial of Ferguson's motion to dismiss the § 1983 claim, but not the state law claims. The collateral order doctrine allows review of orders refusing to dismiss § 1983 claims against officials claiming sovereign or qualified immunity. However, neither the collateral order doctrine nor pendent jurisdiction allowed the court to review the denial of dismissal of state law claims.

The court further held that the 11th Amendment did not provide Ferguson with absolute immunity from suit. Because Adams sued Ferguson in her personal capacity and sought to recover only from Ferguson, and not the Commonwealth of Virginia, the 11th Amendment's absolute immunity did not bar the suit.

To overcome qualified immunity, which generally shields officials' conduct from civil liability, a plaintiff must demonstrate that (1) the defendant violated the plaintiff's constitutional rights, and (2) the right in question was clearly established at the time of the alleged violation. A clearly established right is one that is sufficiently clear, by precedent or common sense, that every reasonable official would have understood that his or her conduct violated that right.

The court determined that it was not clearly established that failure to transfer an inmate from a prison to a state mental health facility created an "excessive risk to inmate health or safety" in violation of the inmates' 8th Amendment rights. This remains true even with respect to an inmate subject to a Competency Order. Although the Competency Order scheme presumes that inmates with serious mental health conditions are more likely to have their competency restored with treatment at a state mental health hospital, the inmates with such conditions who remain in Virginia's prison system are not per se subject to an "excessive risk to inmate health of safety."

Although the alleged conduct by the many other defendants, if true, clearly violated the Constitution, the court held it was not clear that Ferguson's failure to transfer Mitchell to a state mental health facility, "automatically and alone" violated the Constitution.

To read the full opinion, click here.

Panel: Chief Judge Gregory and Judges Motz and Traxler

Argument Date: 12/05/2017

Date of Issued Opinion: 03/06/2018

Docket Number: No. 17-1484

Decided: Affirmed in Part, Reversed in Part and Remanded by published opinion.

Case Alert Author: Christopher Anderson, Univ. of Maryland Carey School of Law

Counsel: David Patrick Corrigan, HARMAN CLAYTOR CORRIGAN & WELLMAN, P.C., Glen Allen, Virginia, for Appellant. John Frederick Preis, Henrico, Virginia, for Appellee. ON BRIEF: Jeremy D. Capps, M. Scott Fisher, Jr., HARMAN CLAYTOR CORRIGAN & WELLMAN, P.C., Glen Allen, Virginia, for Appellant. Mark J. Krudys, THE KRUDYS LAW FIRM, PLC, Richmond, Virginia, for Appellee

Author of Opinion: Judge Motz

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/09/2018 12:41 PM     4th Circuit     Comments (0)  

  United States v. Middleton -- Fourth Circuit
Let's Get Physical: Is "Use" of Force Necessarily Violent?

Area of Law: Criminal Law, Armed Career Criminal Act

Issues Presented: Whether involuntary manslaughter under South Carolina necessarily involves the requisite use of violent force to qualify as a violent felony under the ACCA.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit reversed and remanded because Middleton's prior conviction for involuntary manslaughter did not qualify as a violent felony under the Armed Career Criminal Act (ACCA). The court held South Carolina's version of involuntary manslaughter sweeps more broadly than the physical force required under the ACCA's force clause because South Carolina involuntary manslaughter criminalizes actions that cause injury, but not necessarily actions that require the use of physical force.

Extended Summary: The court engaged in the two-step categorical approach to determine whether South Carolina's version of involuntary manslaughter qualifies as a violent felony. First, the court considered what the most innocent conduct criminalized by involuntary manslaughter would be. The court determined this would be selling alcohol to a minor because in State v. Hambright, selling alcohol to minors may have caused the injury even though the defendant did not use physical force, directly or indirectly, against the person of another. 426 S.E.2d 806 (S.C. Ct. App. 1992).

Second, the court considered whether involuntary manslaughter under South Carolina law sweeps more broadly than the ACCA's definition of "physical force" in the "force clause." "Physical force" under the force clause must be both physical (exerted through concrete bodies) and violent (capable of causing pain or injury) and does not include de minimus force. The court held the Supreme Court case United States v. Castleman, which held it "is impossible to cause bodily injury without applying force in the common-law sense," did not control the definition of force in the ACCA. First, Castleman interpreted a law which criminalized de minimus force (the MCDV). Second, the use of force is distinguishable from the causation of an injury. Only, the former (use of force) is required under the ACCA.

The majority opinion therefore reasoned that Fourth Circuit cases like In re Irby and Reid, which abrogated any distinction between use and causation, were not binding in the instant case.

Judge Floyd wrote in concurrence. He found that In re Irby and Reid extended Castleman's abrogation of the distinction between use and causation to other force clauses, such as the ACCA, making the distinction between use and causation no longer viable. In Judge Floyd's view, the court had therefore already decided that a crime criminalizing the causation of bodily injury is a violent felony under the ACCA. Judge Floyd further concluded that involuntary manslaughter necessarily involves violent force, not de minimus force. Nonetheless, Judge Floyd agreed South Carolina's version of involuntary manslaughter sweeps more broadly than the ACCA.

To read the full opinion click here.

Panel: Gregory, Chief Judge, Floyd and Harris, Circuit Judges

Argument Date: 10/24/2017

Date of Issued Opinion: 02/26/2018

Docket Number: No. 16-7556

Decided: Decided by published opinion

Case Alert Author: Emily Levy, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Emily Deck Harrill, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Columbia, South Carolina, for Appellant. William Jacob Watkins, Jr., OFFICE OF THE UNITED STATES ATTORNEY, Greenville, South Carolina, for Appellee. ON BRIEF: Beth Drake, United States Attorney, Columbia, South Carolina, Eric J. Klumb, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Charleston, South Carolina, for Appellee

Author of Opinion: Chief Judge Gregory; Judge Harris joined. Judge Floyd joined in part and concurred in judgment, Judge Harris joined as to Parts II.A. and B

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/09/2018 12:31 PM     4th Circuit     Comments (0)  

  E.W. v. Dolgos, et al. -- Fourth Circuit
More Than Just a Lesson: Fourth Circuit Finds Handcuffing a Compliant Ten-Year-Old Student Is Excessive Force

Areas of Law: Constitutional Law, Civil Rights Law, 42 U.S.C. § 1983

Issue Presented: Whether a school resource officer could be held liable under state or federal law for an excessive force claim after she handcuffed a ten-year-old girl three days after an altercation.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held that a school resource officer used excessive force when handcuffing a ten-year-old girl. Although the little girl could have been charged with a misdemeanor for a brief altercation three days earlier on a school bus, at the time of the handcuffing she posed no threat to the safety of the officer or others, and made no attempt to resist detention or arrest. Still, the Fourth Circuit found that while legal precedent showed the officer acted unreasonably, that precedent did not put the officer on sufficient notice that her actions were illegal and she was thus entitled to quality immunity under federal law. Further, the officer was entitled to immunity under state law (Maryland) because there was no indication that she acted with malice as required under the Maryland Tort Claims Act (MTCA).

Extended Summary: On January 6, 2015, two elementary-school-aged girls got into a fight while riding a school bus in Salisbury, Maryland. Video showed one student, A.W., stepping on the second student E.W.'s foot. E.W. responded by standing up and starting a kicking and hitting match with A.W. Both students were quickly brought to the front of the bus. Though they were suspended from the bus for three days, both girls remained in school. Three days later, on January 9, 2015, the elementary school contacted a school resource officer, Officer Dolgos, who then watched the video of the occurrence.

Dolgos met with both girls in an administrator's office with at least one other adult. A.W. showed the officer two small bruises on her left knee and one on the side of her leg. No further action was taken. Dolgos then met with E.W. and felt that E.W. did not seem to care and did not feel as if the situation was a "big deal." In an affidavit, Dolgos stated she was concerned E.W. may act violently. Dolgos was 5'4" and 155 pounds, while E.W. was 4'4" and 95 pounds. Dolgos handcuffed E.W. for two minutes, at which point E.W. began crying and apologized. Dolgos un-cuffed her and called E.W.'s mother. Dolgos told E.W.'s mother that she planned to refer the matter to the Department of Juvenile Services.

E.W.'s mother brought an action against Officer Dolgos under 42 U.S.C. § 1983. The lower court granted Dolgos' motion for summary judgment, explaining in a short paragraph with no case law that Dolgos' actions did not constitute excessive force and that Dolgos was "at least" entitled to qualified immunity for the § 1983 claim.

The Fourth Circuit overruled the lower court on the first issue, and found that Dolgos' actions did constitute excessive force under the Fourth Amendment. While the majority recognized that precedent stated that "handcuffing would rarely constitute excessive force where the officers were justified . . . in effecting the underlying arrest," Brown v. Gilmore, 278 F.3d 362, 369 (4th Cir. 2002), it found that the Fourth Circuit has never held that using handcuffs is per se reasonable.

The Fourth Circuit went through the factors for determining excessive force from Graham v. Connor: "[1] the severity of the crime at issue, [2] whether the suspect poses an immediate threat to the safety of the officers or others, and [3] whether [the suspect] is actively resisting arrest or attempting to evade arrest." 490 U.S. 386, 396 (1989). The court found the first factor weighed slightly against E.W. since assault is an offense which may be considered violent. The court found the second factor weighed heavily in favor of E.W., given the child's small stature and the three-day period since the fight during which no new incidents occurred. Finally, the third factor weighed heavily in E.W.'s favor since there was no attempt to resist or flee from the office.

The Fourth Circuit discussed the importance of considering the suspect's age and also the relevance of the school context. Citing to the Fifth, Ninth, and Eleventh Circuits, the court held that handcuffing a young child can be considered excessive force. The court did not create a per se rule that handcuffing children is always unreasonable but instead found the officer's actions in this instance were unreasonable and as such constituted excessive force.

While the court found there was precedent to establish that Dolgos' actions were unreasonable, this was not an "obvious case" such that Graham put her on notice of the unlawfulness of her conduct. Accordingly, the Fourth Circuit held that Dolgos was entitled to qualified immunity under federal law.

Finally, the court held that Dolgos had not acted with malice or gross negligence as required under the MTCA. For purposes of MTCA immunity, malice refers to "actual malice." Dolgos indicated that, at most, she wanted to make E.W. feel remorse for her actions. Thus, because her actions were not motivated by an intent to deliberately or willfully injure, her actions did not rise to the level of actual malice. As such, Dolgos was entitled to immunity on the state claim as well and the granting of summary judgment was affirmed.

Senior Circuit Judge Shedd wrote a concurrence. In Judge Shedd's opinion, because Dolgos had the authority to make a custodial arrest of E.W., the officer's use of handcuffs was reasonable under Brown. Judge Shedd also cited case law discussing the unpredictability of children and the need for constant supervision.

To read the full opinion, click here.

Panel: Judges Gregory (Chief), Wynn, and Shedd (Senior)

Argument Date: 05/10/2017

Date of Issued Opinion: 02/12/2018

Docket Number: 16-1608

Decided: Affirmed by published opinion.

Case Alert Author: Jennifer Smith, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Robin Ringgold Cockey, COCKEY, BRENNAN & MALONEY, PC, Salisbury, Maryland, for Appellant. John Francis Breads, Jr., Hanover, Maryland, for Appellee. ON BRIEF: Laura E. Hay, COCKEY, BRENNAN & MALONEY, PC, Salisbury, Maryland, for Appellant

Author of Opinion: Chief Judge Gregory

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/09/2018 11:56 AM     4th Circuit     Comments (0)  

  United States v. Cowden -- Fourth Circuit
Cop's Appeal Hits a Wall: Conviction of Abusive Cop Affirmed

Areas of Law: Criminal Law

Issues Presented: Whether the district court erred in admitting evidence of prior bad acts. Whether the evidence was insufficient. Whether the jury was improperly instructed on the elements of the offense. Whether the district court incorrectly held the defendant liable for Hamrick's injuries.

Brief Summary: Mark Cowden is a former lieutenant with the Hancock County Sheriff's Office in West Virginia. Cowden was charged with one count of deprivation of rights under color of law and one count of knowingly making a false statement to impede a federal investigation. Cowden was convicted of the Section 242 (deprivation) count and acquitted of the Section 1519 (false statement) count. On appeal, appellant alleged: (1) improper inclusion of evidence, (2) insufficient evidence, (3) improper jury instructions, and (4) improper judgment of Cowden's liability. The Fourth Circuit rejected Cowden's arguments on appeal and affirmed his conviction.

Extended Summary: A civilian driver, Hamrick, was arrested after he failed a sobriety test during a traffic stop. At the point of arrest, Hamrick initially resisted and fought with the arresting officer. However, once backup arrived Hamrick, though still drunk, settled down. The arresting officers testified that they did not feel threatened by Hamrick and he did not further resist after the altercation. Hamrick was then transported to the station. At the station, Hamrick continued to behave in a loud and drunken manner, but he continued not to resist and did not engage in any threatening behavior. He was also fully restrained and surrounded by several officers when he arrived.

Upon entering the lobby, Hamrick tried to pull away from two of the officers who were with him. But, these officers testified they did not perceive of his movement as a threat. Nonetheless, in response to Hamrick's movement, Mark Cowden, a former police lieutenant in the county who had learned that Hamrick initially resisted, pulled Hamrick toward the elevator, threw him against a wall, and then pulled Hamrick's head back and slammed it into the wall. Hamrick was still fully restrained and facing the wall when this happened. Other officers present testified they were uneasy with Cowden's behavior and saw no reason for the force he used. After Cowden slammed Hamrick's face into the wall, Cowden grabbed Hamrick by the throat and threw him into the corner of the elevator. At this point, another officer intervened and told Cowden to back off. Hamrick had gashes above his eye and nose, was bleeding from his mouth and nose, and there was blood on the floor, walls, and in the elevator.

Cowden was then prosecuted for two violations of federal law, deprivation of rights under color of law, in violation of 18 U.S.C. § 242, and knowingly making a false statement to impede a federal investigation, in violation of 18 U.S.C. § 1519. The jury convicted Cowden of deprivation of rights but acquitted him of the false statement charge.

Cowden appealed his conviction and alleged improper inclusion of evidence of prior bad acts. The jury heard evidence of Cowden's prior use of force on two different occasions. In one incident, Cowden hit someone in the nose with the rim of his hat before wrestling the person to the ground. In the other incident, Cowden shoved a man into a vehicle, punched him in the face, threw him face down into the pavement, and punched him in the back of the head. Neither of the men in the prior incidents were resisting arrest or acting in a threatening manner. Cowden alleged this evidence was inadmissible under Federal Rule of Evidence 404(b), which prohibits the use of "other bad acts" evidence with limited exceptions. Specifically, the rule allows such evidence to be admitted as "proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident." Fed. R. Evid. 404(b). The Fourth Circuit determined the district court did not err and that the prior bad acts were admissible to show Cowden's intent.

Cowden further alleged that the district court erred because the evidence was insufficient to convict him. To convict, the government had to show that Cowden "(1) willfully (2) deprived another individual of a constitutional right (3) while acting under color of law." Cowden challenged the proof of willfulness. The Fourth Circuit determined Cowden's act were willful because Hamrick was fully restrained and surrounded by multiple police officers when Cowden physically attacked him.

Cowden's third issue on appeal was the district's court decision not to inform the jury of lesser-included offenses. The Fourth Circuit determined the district court did not err in omitting this instruction because it was substantially covered by other instructions given. Cowden also claimed the district court erred in presenting the jury a verdict form that included special interrogatories. The Fourth Circuit found the district court acted within its discretion when it told the jury not to consider the issue of injury unless the jury first found that the government had proved the three essential elements of the Section 242 offense beyond a reasonable double.

Cowden's final issue was that the district court erred in ordering him to make restitution for Hamrick's injuries. The Fourth Circuit determined that Hamrick's medical expenses were not disputed and that Hamrick's injuries were a result of Cowden's actions; therefore, the district court acted within its discretion.

The Fourth Circuit found no merit in additional arguments challenging the district court's admission of evidence. Accordingly, the Fourth Circuit affirmed the judgment of the district court.

To read the full opinion, click here.

Panel: Judges Keenan, Diaz, and Harris

Argument Date: 12/05/2017

Date of Issued Opinion: 02/16/2018

Docket Number: 17-4046

Decided: Affirmed by published opinion

Case Alert Author: Aarti Sidhu, Univ. of Maryland Carey School of Law

Counsel: Martin Patrick Sheehan, SHEEHAN & NUGENT, PLLC, Wheeling, West Virginia, for Appellant. Christopher Chen-Hsin Wang, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: T.E. Wheeler, II, Acting Assistant Attorney General, Thomas E. Chandler, Appellate Section, Civil Rights Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee

Author of Opinion: Judge Keenan

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/09/2018 11:14 AM     4th Circuit     Comments (0)  

May 7, 2018
  United States v. Wheeler -- Fourth Circuit
Fundamentally Defective: Man Wins Permission to Seek Habeas Relief under the Savings Clause

Areas of Law: Criminal Law, Post-Conviction, Habeas Corpus

Issue Presented: Whether a defendant may seek habeas corpus by means of the "savings clause" of 28 U.S.C. § 2255(e) when a change in case law would offer sentencing relief, and post-conviction relief is not otherwise available under 28 U.S.C. § 2255.

Brief Summary: Gerald Wheeler ("Wheeler") brought a series of post-conviction motions challenging his increased mandatory minimum sentence based on an underlying qualifying conviction. Following his sentencing, Fourth Circuit case law changed so that his underlying conviction no longer triggered sentencing enhancement. The Fourth Circuit held that Wheeler's habeas corpus petition could pass through the savings clause of 28 U.S.C. § 2255(e), applying the test from In re Jones. The court further found that the change in case law meant the sentence imposed now presented an error sufficiently grave to be deemed a fundamental defect.

Extended Summary: In September 2006, Gerald Wheeler pled guilty to one count of conspiracy to posses with intent to distribute; use and carrying of a firearm in relation to a drug trafficking crime; and being a felon in possession of a firearm. At sentencing, the court determined that a 1996 conviction counted as a "felony drug offense" and thus Wheeler's enhanced sentencing range was 10-years-to-life for the conspiracy count. Without this underlying conviction, Wheeler's guideline range would have been 70-87 months and his statutory range would have been 5 to 40 years. Wheeler was sentenced to the mandatory minimum of ten (10) years, as well as a consecutive five (5) years for the use and carrying of a firearm in relation to a drug trafficking crime, for a total of fifteen (15) years.

In June 2010, Wheeler filed his first § 2255 motion, alleging that his trial counsel was ineffective for failing to argue that the 1996 conviction should not have increased his sentence. The motion was denied based on the Fourth Circuit's panel decision in United States v. Simmons, 635 F.3d 140 (4th Cir. 2011), which held that the sentence to be considered was the maximum that could have been received for a person with the worst criminal history. The court denied a certificate of appealability (COA), but Wheeler filed a motion to reconsider, and then another notice of appeal and motion for COA in August 2011. While the motion was pending, the Fourth Circuit reheard Simmons en banc and reversed the prior holding, holding that the sentencing court may only consider the maximum possible sentence for a particular defendant when determining a sentencing enhancement and not the maximum possible sentence for a defendant with the worst criminal history. United States v. Simmons, 649 F.3d 237 (4th Cir. 2013). The appeal, however, was denied since Simmons did not apply retroactively on collateral review.

In April 2013, Wheeler filed a second § 2255 motion, along with a request for relief pursuant to 28 U.S.C. § 2241 (habeas corpus) through the savings clause of §2255(e). The authorization to file a second § 2255 was denied, but the habeas corpus question remained open. Thereafter, the Fourth Circuit held that Simmons applied retroactively on collateral review. Miller v. United States, 735 F.3d 141 (4th Cir. 2013). The district court stayed the habeas petition pending a decision in United States v. Surratt. Before Surratt was reheard en banc, President Obama commuted Surratt's sentence and the proceeding was rendered moot.

Thus, the court decided the issue of whether a petitioner who received a sentence based on a prior conviction that was since rendered non-qualifying by a circuit decision could pass through the savings clause of § 2255(e) and have a § 2241 petition heard on the merits as a matter of first impression and answered in the affirmative.

First, the Fourth Circuit followed the Eleventh Circuit to find that the savings clause is a jurisdictional provision. The court found there was a clear expression of congressional intent, that the language at issue parallels language the Supreme Court has deemed jurisdiction, and the language is unlike provisions the Supreme Court has found to be non-jurisdictional.

Next, the Fourth Circuit had to determine whether Wheeler satisfied the terms of the savings clause, that is that § 2255 is inadequate or ineffective to test the legality of his detention. The judges used the test established in In re Jones, 226 F.3d 328 (4th Cir. 2000), which states that an appellant must show (1) his conviction was legal at the time of conviction, (2) the substantive law changed following his direct appeal and first § 2255 motion, and (3) that the gatekeeping provisions of § 2255 cannot be met because the new rule is not one of constitutional law. The Fourth Circuit found, based on its language in In re Jones, that the savings clause encompasses challenges to sentencing as well as convictions.

The Fourth Circuit laid out a new test for when sentencing challenges may pass through § 2255(e): "(1) at the time of sentencing, settled law of this circuit or the Supreme Court established the legality of the sentence; (2) subsequent to the prisoner's direct appeal and first § 2255 motion, the aforementioned settled substantive law changed and was deemed to apply retroactively on collateral review; (3) the prisoner is unable to meet the gatekeeping provisions of § 2255(h)(2) for second or successive motions; and (4) due to this retroactive change, the sentence now presents an error sufficiently grave to be deemed a fundamental defect."

In determining that there was a fundamental defect in Wheeler's sentence, the Fourth Circuit noted that defining penalties is a legislative function. It noted that an erroneous mandatory minimum, especially once that the district court finds to be harsh, creates a mistaken impression that the judge has no discretion. The court cited cases in the Sixth and Seventh Circuits to reject the government's position that any sentence that fell at or below the statutory maximum did not present a fundamental defect.

The Fourth Circuit vacated and remanded the case to the district court for a merits hearing on Wheeler's habeas corpus petition.

To read the full opinion, click here.

Panel: Judges King, Floyd, and Thacker

Argument Date: 01/25/2018

Date of Issued Opinion: 03/28/2018

Docket Number: 16-6073

Decided: Vacated and remanded by published decision.

Case Alert Author: Jennifer Smith, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Ann Loraine Hester, FEDERAL DEFENDERS OF WESTERN NORTH CAROLINA, INC., Charlotte, North Carolina, for Appellant. Eric J. Feigin, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Ross Richardson, Federal Public Defender, Interim, FEDERAL PUBLIC DEFENDER WESTERN DISTRICT OF NORTH CAROLINA, Charlotte, North Carolina, for Appellant. Noel J. Francisco, Solicitor General, UNITED STATES DEPARTMENT OF 2 JUSTICE, Washington, D.C.; Jill Westmoreland Rose, United States Attorney, Charlotte, North Carolina, Amy E. Ray, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Asheville, North Carolina, for Appellee.

Author of Opinion: Judge Thacker

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/07/2018 04:45 PM     4th Circuit     Comments (0)  

  In re: Phillips -- Fourth Circuit
Timing Matters: Fourth Circuit Rejects Second Habeas for Juvenile Who Missed Miller Deadline

Areas of Law: Criminal Law, Habeas Corpus, Juvenile Sentencing

Issue Presented: Whether a non-homicide juvenile lifer was entitled to a second habeas petition following the Supreme Court decision in Montgomery v. Louisiana, 136 S. Ct. 718 (2016), if his initial petition had been denied as time-barred three years earlier?

Brief Summary: In a published opinion, the Fourth Circuit held that petitioner was not entitled to a second habeas petition. The claims raised in his second petition were dependent upon the relief for juveniles facing mandatory life-without-parole sentences recognized in Miller v. Alabama, 567 U.S. 460 (2012), and petitioner had already raised those claims in his first petition for habeas relief.

Extended Summary: Jarius Phillips was convicted in January 2001 on two counts of abduction with intent to defile, one count of rape, one count of object sexual penetration, one count of malicious wounding, and one count of robbery. At the time of the crime in March 2000, Phillips was 17 years old. Phillips was sentenced to four terms of life imprisonment, plus forty-five years. Virginia abolished traditional parole for felony offenders, but Phillips would eventually become eligible for a "geriatric release" program that "allows older inmates to receive conditional release under some circumstances."

After exhausting his state remedies, Phillips filed a pro se application for a writ of habeas corpus in the Eastern District of Virginia. He argued that he had been sentenced to life without parole for crimes committed as a juvenile, in violation of his Eighth Amendment rights. Phillips based his petition on Graham v. Florida, 560 U.S. 48, 75 (2010), which held that juveniles convicted of non-homicide crimes cannot be sentenced to life without parole and must be given "some meaningful opportunity to obtain release based on demonstrated maturity and rehabilitation," and on Miller v. Alabama, 567 U.S. 460 (2012), which held that juvenile homicide offenders cannot be sentenced to mandatory life without parole, and a sentencing court must consider their "youth and attendant characteristics." Phillips' initial petition, which was filed on June 7, 2013, was denied as untimely because it had not been filed within a year of the Graham decision, which was decided in 2010. A certificate of appealability was denied by the Fourth Circuit on October 24, 2014.

Following the decision of the Eastern District of Virginia in LeBlanc v. Mathena, No. 2:12-cv-340, 2015 WL4042175 (E.D. Va. July 1, 2015) (granting habeas to a juvenile serving two life terms and finding that Virginia courts had unreasonably applied Graham in concluding "geriatric release" constituted a "meaningful opportunity for release"), Phillips filed a second habeas petition. After being dismissed without prejudice for failure to obtain pre-filing authorization, Phillips re-filed on June 24, 2016.

The Fourth Circuit analyzed whether Phillips had made a prima facie case for a second petition under 28 U.S.C. § 2244. To answer this question, the court first considered whether Phillips was presenting a claim not "presented in a prior application." Next, the court examined whether Phillips was presenting a claim that relied on a new rule of constitutional law "made retroactive to cases on collateral review by the Supreme Court, that was previously unavailable."

Phillips, through counsel, argued that the Miller right (requiring a sentencing court to consider an offender's youth and attendant characteristics) was unavailable when he filed his first petition for writ of habeas corpus in 2013. Specifically, Phillips argued that Miller did not become "retroactive to cases on collateral review by the Supreme Court" until the 2016 Montgomery v. Louisiana decision.

The Fourth Circuit found that Phillips failed to raise a new claim in his second petition for writ of habeas corpus, since his first petition relied on both Graham and Miller as bases for relief. Relying on Dodd v. United States, 545 U.S. 353 (2005), in which the Supreme Court found that under a § 2255 petition for relief, the 1-year limitation for filing is measured from the "date on which the right asserted was initially recognized by the Supreme Court," the court found that the Montgomery decision did not reset the clock on the 1-year filing restriction. Because Phillips raised no new issues and Montgomery did not extend the time for bringing a Miller claim, the court denied Phillips relief.

To read the full opinion, click here.

Panel: Judges Niemeyer, Shedd, and Duncan

Argument Date: 12/05/2017

Date of Issued Opinion: 01/16/2018

Docket Number: No. 16-9566

Decided: Motion for leave to file successive habeas application denied in published opinion.

Case Alert Author: Jennifer Smith, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Damon Clarke Andrews, KIRKLAND & ELLIS LLP, Washington, D.C., for Movant. Joseph Christian Obenshain, OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for Respondent. ON BRIEF: Robert L. Littlehale, Matthew S. Brooker, James Bowden, Jr., KIRKLAND & ELLIS LLP, Washington, D.C., for Movant. Victoria N. Pearson, Deputy Attorney General, OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for Respondent

Author of Opinion: Judge Niemeyer

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/07/2018 11:45 AM     4th Circuit     Comments (0)  

May 3, 2018
  Janvey v. Romero -- Fourth Circuit
Faith Matters: Fourth Circuit Affirms Bankruptcy for Ponzi Scheme Debtor

Areas of Law: Bankruptcy Law, Business Law

Issue Presented: Whether Appellee's decision to file for bankruptcy, after being found liable for $1.275 million for his role in a Ponzi scheme, amounted to bad faith and, therefore, was grounds for dismissal under 11 U.S.C. 707(a).

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that the Appellee Romero, did not act in bad faith in filing for bankruptcy. Specifically, the court affirmed the bankruptcy court's determination that Romero's insolvent debt, although primarily caused by the $1.275 million underlying judgment, still caused him to become insolvent. Consequently, the lower court did not err in declining to dismiss Romero's bankruptcy petition.

Extended Summary: After being held liable for $1.275 million to the victims of a multi-billion-dollar Ponzi scheme, Appellee Peter Romero filed a Chapter 7 bankruptcy petition in the District of Maryland. Ralph Janvey, one of the victims of the Ponzi scheme, moved to dismiss Romero's bankruptcy petition on the ground that it had been filed in bad faith. If true, such a filing would warrant dismissal for cause under 11 U.S.C. 707(a). Although the bankruptcy court recognized that bad faith can constitute cause under 707(a), it found Romero had not acted in bad faith. The bankruptcy court applied the eleven bad-faith factors found in McDow v. Smith, 295 B.R. 69 (Bankr. E.D. Va. 2003), to conclude that Romero did not act in bad faith when he filed for bankruptcy. Janvey appealed the ruling to the district court, which affirmed the bankruptcy court's holding.

The Fourth Circuit found that bad faith in bankruptcy cases does not have a strict formula and that bankruptcy courts have used a variety of multifactor tests as guides to determine whether bad faith exists. The court held that bankruptcy courts need not tick off each factor of a test, but instead may use the test as a guide. The eleven-factor test used by the bankruptcy court, in the instant case, contains factors typically considered in bad faith claims and was therefore sufficiently used as a guide.

Janvey asserted that bankruptcy should be unavailable to Romero because he sought to avoid a single large debt, the judgment. The Fourth Circuit deferred to the bankruptcy court's finding that Romero filed for many reasons (albeit the judgment being the main one), therefore Janvey's argument was factually flawed. Additionally, even if Romero's sole purpose for filing bankruptcy had been to avoid the judgment, acting in this manner would not amount to bad faith. The bankruptcy code is meant to provide a procedure by which insolvent debtors can reorder their affairs. Romero, due to the judgment, had become an insolvent debtor. The fact that he became insolvent in a moment, rather than over time, was irrelevant.
Janvey also asserted that Romero's attempt to settle the underlying judgment proved that Romero was trying to pressure him into settlement by casting bankruptcy as the alternative to settlement. The Fourth Circuit asserted that debtors and creditors are free to resolve their issues through settlement. A creditor may choose to hold off immediately collecting on a debt and instead attempt to settle. This same principle applies to debtors who may put off filing for bankruptcy in interest of settlement. However, the fact that the parties fail to settle does not mean debtors are prohibited from the protections provided by bankruptcy law.
Romero's finances included assets that totaled more than $5.348 million. Many of these assets were statutorily exempt, and therefore could not be used to satisfy the judgment. Among his nonexempt assets, Romero had one car and two boats. All of these items were turned over to the Chapter 7 trustee for administration. Janvey argued that Romero should not have been allowed to benefit from the protections of the Code, even though a majority of his assets were statutorily exempt. The Fourth Circuit found this argument to be problematic. The court held that a debtor's ability to repay his debts does not alone amount to cause for dismissal, stating "a penniless start is not a fresh start." The court also found that forcing a debtor to repay his debts using exempt assets before filing for bankruptcy would undercut the entire exemption model that Congress designed.

To read the full opinion, click here.

Panel: Judges Gregory (Chief Judge), Wilkinson, and Harris

Argument Date: 12/06/2017

Date of Issued Opinion: 02/21/2018

Docket Number: 17-1197

Decided: Affirmed by published opinion

Case Alert Author: Tokunbo Ibitoye, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Kevin Marshall Sadler, BAKER BOTTS L.L.P., Palo Alto, California, for Appellant. Kevin Gerald Hroblak, WHITEFORD TAYLOR & PRESTON, L.L.P. Baltimore, Maryland, for Appellee. ON BRIEF: Scott D. Powers, Stephanie F. Cagniart, BAKER BOTTS L.L.P., Austin, Texas, for Appellant

Author of Opinion: Judge Wilkinson

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/03/2018 04:29 PM     4th Circuit     Comments (0)  

  United States v. Phillips & Currency, $200,000 in U.S. -- Fourth Circuit
Some Evidence of Possessory Interest in Property Needed to Survive Summary Judgment in Civil Forfeiture Cases

Areas of Law: Civil Forfeiture

Issue Presented: Whether the "colorable interest" test is the appropriate test to evaluate third-party standing at the summary judgment stage in civil forfeiture cases.

Brief Summary: As a matter of first impression, the United States Court of Appeals for the Fourth Circuit held the "colorable interest" test should be used to determine whether a third party has standing to survive summary judgment in civil forfeiture cases. The Fourth Circuit found the district court correctly held Appellant lacked standing to support a claim of ownership of the forfeited property because he failed to produce some evidence, beyond a mere assertion, to show how he came to possess the property.

Extended Summary: On April 4, 2014, the Durham County Sherriff's Office found a duffle bag containing $200,000 in twelve vacuum-sealed plastic bags after following up on reports of a marijuana odor emanating from a section of storage units. The money was found in the storage unit leased to Byron Phillips. After a drug-sniffing dog alerted to the cash, indicating an odor of narcotics, law enforcement seized the currency. Damian Phillips, Byron Phillips's brother, filed a verified claim asserting that the seized currency belonged to him. Damian Phillips further maintained that the money had not been involved in any past or future exchange for controlled substances. Instead, Damian claimed the currency was his life savings, which he had accumulated between 2003 and 2013 by saving his earned income, a worker's compensation settlement, and unemployment benefits. The district court granted summary judgment in favor of the government, holding that Damian lacked standing.

The Fourth Circuit held (1) the colorable interest test is the appropriate standard to determine third-party standing at the summary judgment stage, and (2) Damian Phillips did not meet this standard because he failed to produce "some evidence" to show how he came to possess the property.

To establish Article III standing, a party (1) must have suffered an injury in fact, (2) that is fairly traceable to the challenged conduct, and which (3) is likely to be redressed by a favorable judicial decision. The court held that to meet these requirements, a claimant challenging a civil forfeiture must show an ownership or possessory interest in the property seized. The court noted that the "manner and degree of evidence required" to establish standing depends on the stage of litigation. At the summary judgment stage, the claimant "can no longer rest on mere allegations," but must indicate a "colorable interest" in the property by setting forth "specific facts" showing "some evidence of ownership."

The court explained why the colorable interest test is appropriate. First, demanding more than "some evidence" of ownership would be inappropriate due to the challenges present in documenting ownership of property seized by law enforcement (especially cash because of its untraceable nature). Second, the test preserves the distinction between constitutional standing and the merits of a civil forfeiture case. While the claimant bears the burden of establishing standing, the government continues to bear the burden of proving, on the merits, that the property is subject to forfeiture. Requiring a claimant to prove ownership by demonstrating more than a colorable interest could impermissibly shift the burden of proof from the government to the claimant - essentially requiring the claimant to prove that the property is unconnected to illicit activity.

The court noted that the adoption of the colorable interest test in civil forfeiture cases did not contradict its previous holdings in criminal forfeiture cases, which require a third party to demonstrate "dominion and control" over the forfeited property. Statutory standing requirements apply in criminal forfeiture cases, which are not present in civil cases.

In applying the colorable interest test, the court looked at whether Damian presented some evidence of how he came to possess the forfeited property. Although the district court was required to refrain from weighing the evidence at the summary judgment stage, it could lawfully set aside testimony that was undermined by other credible evidence or by "physical impossibility." In this case, Damian's total income from 2003 to 2014 was $242,613.45, including all income from earned income, the worker's compensation settlement, and unemployment benefits. During this same period, Damian listed his expenses as $250,000. Because Damian's expenses were greater than his income, the court found Damian could not have saved any money, let alone $200,000. The court noted that the record contained further evidence of Damian's financial troubles during this period, including two car repossessions, his wife's bankruptcy, failure to file tax returns in 2005 and 2010-2013, and delinquency in making rent payments. Accordingly, the court affirmed the district court's decision.

To read the full opinion, click here.

Panel: Judges Motz, Wilkinson, and Niemeyer

Argument Date: 1/24/2018

Date of Issued Opinion: 02/21/2018

Docket Number: No. 16-2358

Decided: Affirmed by published opinion.

Case Alert Author: Christopher Anderson, Univ. of Maryland Carey School of Law

Counsel: David Allen Bauernfeind, LAW OFFICE OF DAVID BAUERNFEIND, Raleigh, North Carolina, for Appellant. Steven N. Baker, OFFICE OF THE UNITED STATES ATTORNEY, Greensboro, North Carolina, for Appellee

Author of Opinion:
Judge Motz

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/03/2018 04:20 PM     4th Circuit     Comments (0)  

  DePaola v. Clarke -- Fourth Circuit
Carry on My Wayward Harm: Court Applies "Continuing Violation" Doctrine to Prisoner's Deliberate Indifference Claims

Areas of Law: Constitutional Law, Eighth Amendment

Issues Presented: Whether the district court properly found the appellant's claims were time-barred, having accrued outside Virginia's two-year statute of limitations. Whether appellant failed to state a claim that defendants-respondents were "deliberately indifferent" to any serious medical needs.

Brief Summary: The appellant, Joseph DePaola, alleged he had a major mental illness requiring treatment while incarcerated, as well as physical health issues that were ignored by prison officials. The appellant file a pro se complaint in July 2015 under 42 U.S.C. § 1983 against the Virginia Department of Corrections (VDOC) and the prison where he was incarcerated, Red Onion State Prison. The District Court for the Western District of Virginia held 1) his claims were time-barred and 2) he failed to state a claim. The complaint was dismissed. The Fourth Circuit affirmed in part and reversed in part.

Extended Summary: The Fourth Circuit, in reviewing the appellant's pro se action, accepted as true the factual allegations set forth in DePaola's complaint, and interpreted it liberally. DePaola said he had received inpatient and outpatient treatment for severe mental illness since he was six years old. He also indicated taking prescription medication for depression, ADHD, hallucinations, and psychomotor agitation. He said his mental health history was documented in a court-ordered psychological evaluation completed before his trial and a presentence report. Additionally, the physician performing the court-ordered evaluation concluded DePaola suffered from a major mental illness that involved depression and impulsivity, including a recommendation that DePaola receive ongoing mental health treatment.

DePaola entered the VDOC in 2004 at the age of seventeen. He alleged he informed officials he had been diagnosed with a mental illness, but since his transfer to Red Onion in 2007 was kept continuously in solitary confinement. In addition to stating he has suffered symptoms continuously since 2007, DePaola attempted suicide twice and complained of physical health problems like irritable bowel syndrome and a rash on his genitals for which he was not receiving sufficient treatment.

DePaola filed his complaint in July 2015 against officials at VDOC and Red Onion. He alleged the defendants "have and continue to violate his rights by acting with deliberate indifference to his physical health needs...and his mental health conditions." DePaola said he repeatedly tried to obtain treatment but was never able to even speak to a psychiatrist or psychologist.

DePaola requested the court apply the doctrine of "continuing violation," which would prevent his claims from being time-barred. Under Section 1983, the court applies the statute of limitations for personal injuries from the state where the alleged violations occurred. In Virginia, plaintiffs in personal injury actions have two years from the date the cause of action occurred to file suit. Normally, a deliberate indifference claim would accrue when a plaintiff becomes aware or has reason to know of the harm inflicted. However, when the harm is in a series of acts or omissions, the plaintiff can allege a "continuing violation," and the statute of limitations runs anew with each violation. Prior to this case, the Fourth Circuit had not clearly applied this doctrine in the case of a Section 1983 claim of deliberate indifference to medical needs. However, the Second, Fifth, Sixth, and Seventh circuits have. The Fourth Circuit followed these circuits and found the statute of limitations does not begin to run for such a continuing violation until the date, if any, that adequate treatment is provided. To assert a claim for deliberate indifference under this doctrine, a plaintiff must "(1) identify a series of acts or omissions that demonstrate deliberate indifference to his serious medical need(s); and (2) place one or more of these acts or omissions within the applicable statute of limitations for personal injury."

Applying this standard, the Fourth Circuit found DePaola properly alleged a continuing violation. He stated he informed VDOC of his mental illness and sought help on multiple occasions from Red Onion officials. However, prison officials failed to provide treatment.

Finally, the court held that DePaola's complaint sufficiently stated a claim against a portion of the defendants for not providing treatment for his mental health needs. However, he did not sufficiently show a group of the defendants had actual knowledge of his mental health claims, and that his physical health needs were not serious enough for any of the defendants to be deliberately indifferent.

To read the full opinion, click here.

Panel: Judges Niemeyer, Traxler, and Keenan.

Argument Date: 12/06/2017

Date of Issued Opinion: 03/09/2018

Docket Number: 16-7360

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

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

Counsel: Charles Christopher Moore, WHITE & CASE, LLP, Washington, D.C., for Appellant. Trevor Stephen Cox, OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for Appellees Harold W. Clarke, David Robinson, G.K. Washington, Fred Schilling, E.R. Barksdale, S. Fletcher, Huff, and Trent. John Thomas Jessee, LECLAIR RYAN, PC, Roanoke, Virginia, for Appellee Dr. McDuffie. Carlene Booth Johnson, PERRY LAW FIRM, PC, Dillwyn, Virginia, for Appellees V. Phipps, Dr. Smith, Dr. Mullins, L. Stump, L. Mullins, and T. Cox. ON BRIEF: Daniel Levin, Michelle Letourneau-Belock, Yakov Malkiel, Kathryn Mims, Iesha S. Nunes, WHITE & CASE, LLP, Washington, D.C., for Appellant. Joseph M. Rainsbury, Ashlee A. Webster, LECLAIR RYAN, Roanoke, Virginia, for Appellee Dr. McDuffie. Mark R. Herring, Attorney General, Matthew R. McGuire, Acting Deputy Solicitor General, OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for Appellees
Harold W. Clarke, David Robinson, G.K. Washington, Fred Schilling, E.R. Barksdale, S. Fletcher, Huff, and Trent.

Author of Opinion: Judge Keenan

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/03/2018 04:07 PM     4th Circuit     Comments (0)  

  Campbell et al. v. Boston Scientific Corp. -- Fourth Circuit
All Meshed Up: Fourth Circuit Upholds Decision in Transvaginal Mesh Product Liability Case

Areas of Law: Product Liability, Evidence, Civil Procedure

Issue Presented: Whether the district court abused its discretion by consolidating four product liability cases for trial, and then admitting certain evidence but excluding other evidence. Whether the evidence was sufficient to support a verdict. Whether the jury was instructed on the wrong evidentiary standard for punitive damages.

Brief Summary: This case involves a consolidated trial, which arose out of four separate products liability cases. The Appellant, Boston Scientific Corporation, challenged multiple decisions made on the trial level. The United States Court of Appeals for the Fourth Circuit affirmed the judgments of the district court. The court found the district court had not abused is discretion regarding any of the issues the appellants raised.

Extended Summary: Boston Scientific Corporation (BSC) manufactured a transvaginal mesh prescription medical device called the Obtryx Transobturator Mid-Urethral Sling System (Obtryx). The Obtryx sling was created as a treatment for severe stress urinary incontinence. The Obtryx sling was meant to be permanently implanted in the user's body. The Food and Drug Administration (FDA) approved the Obtryx sling under the 510(k) process, a medical device regulatory process that fast tracks FDA approval. Under the 510(k) process the sling was found to be "substantially equivalent" to a device already legally on the market. Consequently, the Obtryx sling was not required to go through clinical trials before it was marketed to the public. Additionally, before marketing, BSC received approval from the FDA for Obtryx's directions for use. These directions included information regarding potential complications such as pain, pain with intercourse, and urinary retention.

Obtryx devices are made of a type of plastic called Marlex polypropylene (Marlex). The manufacturer of Marlex cautions on its Material Safety Data Sheet (MSDS) that Marlex should not be used "in medical applications involving permanent implantation in the human body." Expert testimony during the trial indicated that Marlex might degrade when implanted trans-vaginally, and can also produce scar tissue that may cause trans-vaginal mesh to shrink.

The plaintiffs were four women who received the Obtryx sling to treat their severe stress urinary incontinence and who experienced extreme complications that they believed were due to the device. Each of the plaintiffs filed claims against BSC separately seeking compensatory and punitive damages based on theories of negligence and strict liability for both design defect and failure to warn. Before discovery began in any of the four cases, the district court consolidated the individual cases into a single action. The district court denied BSC's motion to conduct separate trials.

Before trial, the district court also denied BSC's motion to exclude evidence of the Marlex MSDS, which stated Marlex should not be used in medical appliances involving permanent implantation. Additionally, the district court granted the plaintiff's motion to exclude evidence concerning the FDA's abbreviated 510(k) approval process.

A jury returned verdicts awarding past compensatory damages of $250,000 and punitive damages of $1,000,000 to each plaintiff. The jury also awarded future compensatory damages ranging from $3 million to $4 million to each plaintiff. BSC thereafter reached settlements with two of the four plaintiffs. BSC appealed the judgments in favor of the remaining two plaintiffs on the grounds that the district court abused its discretion by consolidating the four cases for trial, by permitting the MSDS evidence, and by excluding the 501(k) evidence. BSC also challenged the verdicts as being unsupported by sufficient evidence. Finally, BSC challenged the punitive damages awards based on what it asserted was an erroneous jury instruction.

BSC first asserted that the trial was made unfair by the consolidation of the four cases. The Fourth Circuit reviewed the district court's decision to consolidate the cases for an abuse of discretion. To decide whether to consolidate the cases, the district court applied Federal Rule of Civil Procedure (FRCP) 42(a). This rule requires a district court to weigh the risk of prejudice and confusion from consolidation against the risk of an inefficient judicial process (e.g., inconsistent adjudications, the burden on the parties, burden on the witnesses, judicial resources). The Fourth Circuit found the district court appropriately considered these factors. The Fourth Circuit noted that the district court identified many common questions of law and fact across the four trials. Notably, each plaintiff was diagnosed with stress urinary inconsistency, each had similar complications that required additional medical treatment, and each received their implant in West Virginia. The Fourth Circuit found also that the district court worked to limit any potential jury confusion or prejudice arising from the consolidation.

As to the evidentiary decisions, BSC argued that the district court erred in denying its motion to include evidence of the FDA's 510(k) approval process. The district court did not allow the evidence pursuant to FRE 403, which permits courts to exclude relevant evidence if its probative value is substantially outweighed by a danger of unfair prejudice, confusion, or undue delay. The Fourth Circuit found the district court's decision to exclude the evidence because it might confuse and mislead the jury was not an abuse of discretion. Additionally, the Fourth Circuit found that admission of the MSDS warning was appropriate. Because the warning was not being admitted for the truth of the matter asserted, it was not hearsay as BSC argued.

Next, BSC argued it was entitled to judgment as a matter of law because the plaintiffs provided insufficient evidence to support their claims of design defect and failure to warn. BSC argued that the plaintiffs had not establish a specific design flaw, did not establish that the Obtryx sling was different from other polypropylene mesh slings, and did not provide evidence of a safer alternative design. The Fourth Circuit found the plaintiffs did identify several design flaws, including the difficulty of removing the implant, the use of the Marlex and the use of polypropylene generally. The Fourth Circuit found the plaintiffs did not have to prove the Obtryx sling was different from other polypropylene mesh slings to prevail because an entire class of products may have the same issue.

Regarding the failure to warn claims, BSC asserted that the plaintiffs did not introduce expert testimony establishing that the directions for use were inadequate so they did not have sufficient evidence to prove this claim. BSC asserted that the adequacy of a manufacturer's warning is not within the common knowledge of the lay juror, and the plaintiffs should have introduced expert testimony on the matter. However, the court noted expert testimony is not required in West Virginia for failure to warn claims.

Finally, BSC argued that the district court's jury instructions included the wrong standard for punitive damages. The district court included a preponderance of the evidence standard in the jury instructions. The Fourth Circuit found that the district court's instructions were correct at the time, prior to the West Virginia legislature passing a statue requiring clear and convincing evidence. Ultimately, the Fourth Circuit affirmed all of the rulings of the district court.

To read the full opinion, click here.

Panel: Wilkinson and Diaz, Circuit Judges and Shedd, Senior Circuit Judge.

Argument Date: 12/07/2017

Date of Issued Opinion: 02/06/2018

Docket Number: 16-2279

Decided: Affirmed by published opinion

Case Alert Author: Tokunbo Ibitoye, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Daniel Brandon Rogers, SHOOK HARDY & BACON L.L.P., Miami, Florida, for Appellant. Anthony J. Majestro, POWELL & MAJESTRO, PLLC, Charleston, West Virginia, for Appellees. ON BRIEF: Robert T. Adams, SHOOK, HARDY & BACON L.L.P., Kansas City, Missouri, for Appellant. Scott A. Love, CLARK, LOVE & HUTSON, GP, Houston, Texas, for Appellees. Jeffery A. Kruse, BAKER STERCHI COWDEN & RICE LLC, Kansas City, Missouri; Robert E. Scott, Jr., Marisa A. Trasatti, SEMMES, BOWEN & SEMMES, Baltimore, Maryland, for Amicus Supporting Appellant Federation of Defense & Corporate Counsel. Terri S. Reiskin, Eric C. Tew, DYKEMA GOSSETT PLLC, Washington, D.C.; Hugh F. Young, Jr., PRODUCT LIABILITY ADVISORY COUNCIL, INC., Reston, Virginia, for Amicus Supporting Appellant Product Liability Advisory Council, Inc.

Author of Opinion: Judge Wilkinson joined by Judge Diaz and Senior Judge Shedd

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 05/03/2018 03:44 PM     4th Circuit     Comments (0)  

  U.S. v. Naylor - Eighth Circuit
Headline Eighth Circuit holds that convictions under Missouri second-degree burglary statute do not qualify as violent felonies under the Armed Career Criminal Act

Area of Law Sentencing

Issue(s) Presented Whether the district court and a panel of the Eight Circuit properly determined that convictions under Missouri's second-degree burglary statute fit within the definition of generic burglary, and thus qualify as violent felonies under the Armed Career Criminal Act, which allows for enhanced sentences for repeat offenders.

Brief Summary In November 2015, Naylor pleaded guilty to being a felon in possession of a firearm. The district court found that four of Naylor's prior Missouri second-degree burglary convictions under Mo. Rev. Stat. § 569.170 (1979) qualified as violent felonies under the Armed Career Criminal Act (ACCA), 18 U.S.C. § 924(e), which increases the range of possible sentences when a defendant has three or more prior convictions for a violent felony or serious drug offense. As such, the court imposed an ACCA-enhanced sentence of 180 months imprisonment. Naylor appealed, and a panel of the Eighth Circuit affirmed the sentence, concluding that it was bound by United States v. Sykes, 844 F.3d 712 (8th Cir. 2016). Naylor petitioned for rehearing en banc, which was granted.

Following the rehearing, the Eighth Circuit determined that convictions under the Missouri statute in question do not qualify as violent felonies, and thus the ACCA enhancement was not appropriate. To the extent Sykes concluded otherwise, the en banc court overruled that decision.

To reach this decision, the Eighth Circuit started with the language of the Missouri statute, but found it was unhelpful in determining whether the language "building or inhabitable structure" lists separate elements delineating two distinct crimes (burglary of a building and burglary of an inhabitable structure) or various means by which a single crime (burglary of a building or inhabitable structure) can be committed. The court then turned to Missouri case law, and held that Missouri courts interpret this language to involve means, not elements. Thus, because the Missouri second-degree burglary statute covers more conduct than does generic burglary, convictions for second-degree burglary under the Missouri statute do not qualify as violent felonies under the ACCA. Naylor's enhanced sentence was vacated and the case was remanded to the district court for resentencing.

Circuit Judges Colloton, Gruender, and Wollman concurred in the judgment. Circuit Judges Loken and Shepherd dissented, relying on Mathis v. United States, 136 S. Ct. 2243 (2016), which held that "most but not all the former Missouri statutes defining second-degree burglary include all the elements of generic burglary," and arguing that the majority improperly construed Mathis.

The full text of the opinion may be found at http://media.ca8.uscourts.gov/opndir/18/04/162047P.pdf

Panel Chief Judge Smith and Circuit Judges Benton, Colloton, Gruender, Kelly, Loken, Shepherd, and Wollman, En Banc

Date of Issued Opinion April 5, 2018

Decided Sentence vacated and remanded

Docket Number 16-2047

Counsel Alison D. Dunning for U.S. and Daniel Goldberg for Appellant

Author Circuit Judge Kelly

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

    Posted By: Joelle Larson @ 05/03/2018 12:12 PM     8th Circuit     Comments (0)  

April 30, 2018
  Bonivert v. City of Clarkston, County of Asotin, et al.
Headline: Summary judgment in favor of the police reversed citing the U.S. Supreme Court's warning in Scott v. Harris that attempting to decide excessive force cases at summary judgment requires courts to "slosh our way through the factbound morass of 'reasonableness,'" with predictably messy results.

Areas of Law: Constitutional Law; Civil Procedure

Issues Presented:
(1) Whether the officers were entitled to qualified immunity on the plaintiff's Fourth Amendment warrantless entry claim where defendant expressly refused entry to his home by "put[ting] the dead bolt on" and attempting to "slam[] the door" on the officers. Further, do domestic abuse cases create a per se emergency justifying warrantless entry.
(2) Did the district court erroneously grant summary judgment, holding that police officers were entitled to qualified immunity on the plaintiff's Fourth Amendment excessive force claim, based on conflicting testimony and an inconclusive video.

Brief Summary: Plaintiff brought an action under 42 U.S.C. § 1983 against the County of Asotin, the City of Clarkston and four police officers alleging warrantless entry and excessive use of force in violation of his Fourth Amendment rights when the officers forcibly entered his home without a warrant and tasered him. The district court granted summary judgment on qualified immunity grounds in favor of the officers.

On de novo review, the panel held that the warrantless entry was unreasonable and violated the plaintiff's Fourth Amendment rights because there were no circumstances or factors present that would justify officers conducting a warrantless entry. The panel rejected the defendants' argument that express refusal of consent is limited to verbal refusal. The panel held that the officers were not entitled to qualified immunity under the consent exception to the Fourth Amendment's warrant requirement where a reasonable officer would have understood that no means no where plaintiff put the dead bolt on and attempted to slam the door on the officers.
Further, the conflicting and chaotic evidence offered by both the plaintiff and the defendants did not justify the district court's conclusion that no reasonable jury could find evidence of excessive force. Therefore, the panel remanded the case for to trial for the trier of fact to decide.

Significance:
Another warrantless entry/excessive force case, similar to Tolan v. Cotton, 134 S. Ct. 1861 and Georgia v. Randolph, 547 U.S. 103, where the court granted summary judgment in favor of the police on qualified immunity grounds for forcibly entering and tasering an individual in his home. Here, the Ninth Circuit panel reversed and remanded the district court's grant of summary judgment to allow a determination of excessive force to be determined by the trier of fact.

Extended Summary:
On Jan 8, 2012, Sergeant Danny Combs and Officer Paul Purcell of the Clarkston Police Department, were dispatched to the house of plaintiff, Ryan Bonivert, on a domestic dispute call. According to the dispatcher, Bonivert and his girlfriend, Jessie Ausman, got into a physical argument in their home during an evening gathering with friends, whereby Ausman threatened to leave with their 9-month old daughter. By the time Officer Combs and Purcell arrived, the dispute was over and Ausman and the other guests were outside, leaving Bonivert inside. After the officers spoke with Ausman and the other house guests, they decided to speak with Bonivert

The officers knocked on the front door, identified themselves as the police and asked Bonivert to open the door. Despite the officers repeated requests, Bonivert did not come to the front door nor the back door. When the officers approached the side door, Bonivert was heard locking the deadbolt from inside. At this point, the officers decided to gather more information from Ausman. She informed the officers that there were no weapons in the house and that she did not think that Bonivert posed a danger to himself, although she did recount that he had a problem with authority and his prior angry behavior with officers during a recent drunk driving incident.

With permission from Ausman, Combs decided he needed to enter the home to assess the situation. Before entering, Combs and Purcell requested back up from the Sheriff's office before radioing a "Code 4" message to the County. This type of code signified that there were no problems, everyone was safe, and no one was injured. When Deputies Gary Snyder and Joseph Snyder arrived, the four officers collectively developed a plan of entry. No effort was made by any of the officers to obtain a search warrant.

Bonivert expressly refused entry when he locked the side door to his house. During the initial "knock and talk," Combs and Purcell knocked and attempted to open the front and back doors to the house, but found them to be locked. As the officers circled the house to approach the side door, Bonivert realized it was unlocked and locked it as Combs was approaching. Combs heard the door lock and informed Purcell. Bonivert also expressly refused entry when he attempted to close the back door on the officers after Combs broke in.

With the deputies as back up, Combs shattered a window to unlock and enter the back door whereby Bonivert unsuccessfully tried to shut the back door. At this point, Combs and one of the deputies ordered Bonivert to get on the ground (Bonivert disputes that he was given those orders). Also in dispute is whether Bonivert advanced on the officers. Nevertheless, Combs and one of the deputies both fired their tasers at Bonivert in dart mode. Footage from the taser video is inconclusive as to whether Bonivert charged the officers after being tasered. Once Bonivert was handcuffed, Combs deployed the taser in drive-stun mode one more time and arrested Bonivert for assaulting an officer, resisting arrest, and domestic violence. Subsequently, Bonivert brought action against the City, the County and the officers alleging warrantless entry and excessive force in violation of his Fourth Amendment right. The district court granted summary judgment in favor of the defendants on the basis of qualified immunity.

On de novo review, the Ninth Circuit panel reviewed the facts of the case in the light most favorable to the injured party to determine (1) whether the officers were entitled to qualified immunity on Bonivert's Fourth Amendment warrantless entry claim and (2) whether the officers were entitled to qualified immunity on Bonivert's Fourth Amendment excessive force claim.

Observing that "t is a 'basic principle of Fourth Amendment law'" that warrantless searches of the home or the curtilage surrounding the home "are presumptively unreasonable," the panel addressed the officer's argument that their entry was nevertheless justified by the three exceptions to the warrant requirement: consent, emergency aid, and exigent circumstances.

The panel analyzed each exception separately, beginning with consent. Under this exception, an officer may enter a home if they have the consent of the occupant. However, if one occupant consents to a warrantless search, but the other co-occupant who is physically present clearly objects, the warrantless search is unreasonable.

Here, one occupant, Ausman consented to the officer's entry, but the other co-occupant, Bonivert, expressly refused entry when he locked the side door to his house and when he attempted to close the back door on the officers after they broke in. Therefore, the panel held that the officers were not entitled to qualified immunity on the consent exception to warrantless entry; the officers should have understood that "no means no."

Next, the panel analyzed the emergency exception. Under the emergency exception, an officer can enter a home without a warrant to help an injured occupant, or protect an occupant from imminent injury. This emergency type of entry does not violate the Fourth Amendment so long as the circumstances objectively justify the entry. The panel stressed that this exception is narrow and rigorously scrutinized. In determining if the emergency exception applied, the panel concluded that there was no evidence to point to an actual or imminent injury inside Bonivert's home because Ausman was safely outside the home, the house was silent, there were no weapons inside the home, and it was assured that Bonivert posed no danger to himself. Further, the "Code 4" message relayed by officer Combs and Purcell indicated that there were no problems, everyone was safe, and no one was injured. Therefore, the panel concluded that the officers were not entitled to qualified immunity under the emergency exception because there was no emergency to sufficiently justify the entry.

Lastly the panel analyzed the exigency exception, which allows a warrantless search if officers have both probable cause to believe that a crime was committed or is currently being committed, and a reasonable belief that their warrantless entry is required to avert the destruction of evidence or the flight of the suspect. Here, none of these circumstances occurred. First, Bonivert was not a fleeing suspect because he was inside his home during the alleged domestic assault and after the officers broke into his home. Further, Ausman, the victim of the alleged assault, was safely outside of the home and the officers had no reason to believe that there was evidence of a crime inside of the residence. Therefore, the panel concluded that the officers are not entitled to qualified immunity under the exigency exception.

The panel then addressed the excessive force claim. The excessive use of force at issue is Combs' use of the taser in drive-stun mode inside of the home. According to the panel, an officer's use of excessive force is examined under an objective reasonableness standard, balancing the nature and quality of the intrusion on Bonivert's Fourth Amendment interests against the officer's governmental interests. Here, the panel recognized that the district court came to its summary judgment conclusion based on conflicting testimony from Bonivert and the officers. The footage claimed by the taser camera was inconclusive; it was not clear whether Bonivert charged the officers, or whether he stood at the threshold not advancing on the officers at all. In addition, there is a dispute whether Bonivert was outside his house when Combs deployed the taser or inside the door. As a result, the panel found that the evidence was confusing and chaotic and did not justify the district court's conclusion that no reasonable jury could find that there was excessive force inside the Bonivert residence. The determination of what occurred between the officers and Bonivert is one for the trier of fact to decide.

To read the full opinion, please visit: http://cdn.ca9.uscourts.gov/datastore/opinions/2018/02/26/15-35292.pdf

Panel: Michael Daly Hawkins and M. Margaret McKeown, Circuit Judges, and Barbara Jacobs Rothstein, District Judge

Argument Date: August 28, 2017

Date of Issued Opinion: February 26, 2018

Docket Number: 15-35292

Decided: Reversed and Remanded.(
Case Alert Author: Haley Parker

Counsel: James E. Lobsenz (argued), Carney Badley Spellman P.S., Seattle, Washington, for Plaintiff- Appellant. Christopher Joseph Kerley (argued) and Thomas P. Miller, Christie Law Group PLLC, Seattle, Washington, for Defendants-Appellees County of Asotin, Gary Snyder, Joseph Snyder, Jennifer L. Snyder, Shawn Rudy, Deputy Grimm, Paul Purcell, Teresa R. Purcell, Daniel Combs, and Claudia A. Combs.

Author of Opinion: M. Margaret McKeown

Circuit: Ninth(
Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 04/30/2018 03:48 PM     9th Circuit     Comments (0)  

  Kris Kenny v. Wal-Mart Associates
Headline:
District Court order remanding class action to California state court vacated because the district court lacked authority under 28 U.S.C. §1447(c) to remand the case back to State court sua sponte based on a non-jurisdictional defect, and Wal-Mart did not waive its right to remove by filing a demurrer in state court when the First Amended Complaint did not reveal a basis for removal pursuant to the Class Action Fairness Act.

Areas of Law: Civil Procedure; Class Actions.

Issues Presented:
(1) Whether the District Court lacked authority under 28 U.S.C. §1447(c) to remand the case back to state court sua sponte based on a non-jurisdictional defect, and (2) whether Wal-Mart waived its right to remove the case by filing a demurrer in response to plaintiff's First Amended Complaint ("FAC") in state court.

Brief Summary:
Plaintiff-Appellee, Kris Kenny, filed a putative class action complaint against Defendants-Appellant Wal-Mart Stores, Inc. and Wal-Mart Associates, Inc. Wal-Mart filed a demurrer in state court to Kenny's FAC and subsequently removed the case to Federal Court. The district court remanded the case sua sponte to state court stating summarily that Wal-Mart waived its right to remove the case by filing a demurrer in response to the FAC. The panel held the district court did not have the authority to remand the case sua sponte; additionally, the panel concluded Wal-Mart did not waive its right to remove the case by filing a demurrer in response to the FAC when its right to remove was not ascertainable from Kenny's complaint because it was indeterminate as to amount in controversy.

Significance:
District courts lack authority to remand sua sponte to state court based on a non-jurisdictional defect. Further, filing a demurrer in state court to a complaint that does not reveal a basis for removal does not waive a defendant's right to remove.

Extended Summary:
On January 13, 2017, Kenny filed a putative class action complaint against Wal-Mart in California state court, challenging Wal-Mart's policy requiring employees who have suffered workplace-related injuries to submit to drug and/or urine testing. On February 17, 2017, Kenny filed a First Amended Complaint (FAC), and served the FAC on Wal-Mart. On April 4, 2017, Wal-Mart filed a demurrer and a motion to strike the FAC. Wal-Mart set the hearing on the demurrer for June 15, 2017. Kenny's deadline to oppose the demurrer was June 2, 2017, nine court days before the hearing. On May 17, 2017, nearly a month before the hearing, Wal-Mart removed the case to federal court, asserting that the district court had jurisdiction over the case pursuant to the Class Action Fairness Act (CAFA). At the time of removal, Kenny had not yet opposed the demurrer, discovery had not begun, and the state court had issued no rulings.
On June 8, 2017, the district court, acting sua sponte, without explanation, concluded that Wal-Mart waived its right to remove the case by filing a demurrer in response to Kenny's FAC in state court.

The Ninth Circuit Panel held the district court erred when it remanded sua sponte based on a non-jurisdictional defect. Under 28 U.S.C. §1447(c), a district court lacks authority to remand sua sponte based on a non-jurisdictional defect. Subject-matter jurisdiction is the touchstone for a district court's authority to remand sua sponte. While a district court must remand "if at any time before final judgment it appears that the district court lacks subject-matter jurisdiction, [the district court] may remand for defects other than lack of subject jurisdiction only upon a timely motion to remand." Smith v. Mylan Inc., 761 F.3d 1042, 1044 (9th Cir. 2014).

Here, without explanation, the district court stated, that Wal-Mart waived its right to remove by filing a demurrer to Kenny's FAC in state court. However, waiver is a common-law doctrine, which does not implicate the court's original jurisdiction over the action. City of Albuquerque v. Soto Enlers., Inc., 865 F.3d 1089, 1093 (10th Cir. 1994). The jurisdiction exercised by the district court on removal is 'original' jurisdiction, without regard to the status of the proceedings in state court prior to removal. Hence, because waiver is a common-law doctrine which does not implicate the court's original jurisdiction over the action, the district court exceeded its statutory authority in remanding sua sponte based on a non-jurisdictional ground, and its order warrants reversal for this reason alone.

The panel further held that Wal-Mart did not waive its right to remove the case by filing a demurrer to plaintiff's FAC. A defendant may waive its right to remove an action to federal court when: "it is apparent that the case is removable, the defendant takes actions in state court that manifest his or her intent to have the matter adjudicated there, and to abandon his or her right to a federal forum." Such a waiver must be "clear and unequivocal." Resolution Tr. Corp. v. Bayside Developers, 43 F.3d 1240, 1239 (9th Cir. 1994). The "right of removal is not lost by action in the state court short of proceeding to an adjudication." Lastly, a "defendant does not have a duty of inquiry if the initial pleading or other document is 'indeterminate' with respect to removability." Roth v. CHA Hollywood Med. Ctr. L.P., 720 F.3d 1121, 1125 (9th Cir. 2013).
Here, the panel concluded the FAC did not put Wal-Mart on notice of the case's removability under CAFA because the FAC was indeterminate as to the amount in controversy. Thus, under these circumstances, Wal-Mart could not have "clearly and unequivocally" waived its right to remove this case by filing a demurrer to the FAC because it was not apparent that the case was removable from the FAC.

The Ninth Circuit panel focused on two additional points to support its conclusion: (1) Wal-Mart filed a demurrer on the last day to respond to Kenny's FAC because of the risk of entry of a default judgment. Thus, Wal-Mart's choice to file a demurrer, rather than another form of responsive pleading, to Kenny's indeterminate FAC did not amount to a waiver of its right to remove. (2) Wal-Mart removed the case before Kenny opposed Wal-Mart's demurrer and before any hearing was held, which suggested that Wal-Mart did not "manifest an intent to litigate in state court, or an intent to "abandon its right to a federal forum."

To read the full opinion, please visit: http://cdn.ca9.uscourts.gov/datastore/opinions/2018/02/01/17-56809.pdf

Panel: Milan D. Smith, Jr. and Michelle T. Friedland, Circuit Judges, and Jed S. Rakoff, District Judge.

Argument Date: January 9, 2018.

Date of Issued Opinion: February 1, 2018.

Docket Number: 17-56809

Decided: Vacated and Remanded.

Case Alert Author: Erik Wu

Counsel: Mark D. Kemple (argued) and Ashley Farrell-Picket, Greenberg Traurig LLP, Los Angeles, California, for Defendants-Appellant
David M. deRubertis (argued) and Jeff D. Neiderman, The deRubertis Law Firm APC, Studio City, California; Ellen R. Serbin, Todd H. Harrison, and Brennan S. Kahn, Perona, Langer Beck Serbin Mendoza & Harrison APC, Long Beach, California; for Plaintiff-Appellee

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

Circuit: Ninth

Case Alert Supervisor: Glenn Koppel

    Posted By: Glenn Koppel @ 04/30/2018 03:35 PM     9th Circuit     Comments (0)  

  United States of America v. Mark Henry
Headline: Second Circuit Upholds Constitutionality of the Arms Export Control Act

Area of Law: Constitutional Law

Issues Presented: Whether the Arms Export Control Act (AECA) unconstitutionally delegates legislative authority to the executive, and whether the district court committed various errors in the trial of a defendant convicted of violating the AECA.

Brief Summary: Defendant-Appellant Mark Henry ("defendant"), who ran an arms export business out of his home in Queens, was convicted of one count of conspiracy to violate and one count of violating, attempting to violate, and aiding and abetting the violation of the AECA. On appeal, in addition to challenging various rulings by the district court in his trial, he also argued that the AECA unconstitutionally delegates legislative authority to the executive. The Second Circuit joined other circuits in rejecting that challenge to the AECA, and also found that the district court had not erred or abused its discretion below. Accordingly, the Second Circuit affirmed the conviction in all respects.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...6a45b392119/2/hilite/

Extended Summary: The defendant ran an arms export business out of his home. On numerous occasions between 2009 and 2012, bought "ablative materials" used in rockets and missiles from an American distributor and exported them to a customer in Taiwan, who bought the materials on behalf of the Taiwanese military. Under the AECA's regulatory framework - which authorizes the President of the United States to implement rules regarding the export and control of "defense articles" - a license is required for the export of ablative materials. The defendant, however, did not have the required license. Ultimately, the defendant was indicted on one count of conspiracy to violate the AECA, one count of violating, attempting to violate, and aiding and abetting the violation of the AECA, and attempting to violate the International Emergency Economic Powers Act (IEEPA).

At trial, while defendant testified to the contrary, there was evidence produced at trial that the defendant had knowledge of the export requirement and chose to conceal his intention to continuously export. On the morning of the first day of the trial, the defendant sought to proceed without the use of a court-appointed Mandarin interpreter, as required by the District Court, as he feared that the use of an interpreter would diminish his credibility and prejudice the jury against him. The District Court ruled that some of evidence would require the assistance of the interpreter, but compromised with the defendant, and allowed him to testify in English with the assistance as necessary, of a standby interpreter. The jury found defendant guilty as to the two AECA counts, and acquitted defendant on the IEEPA count. The defendant's motion for a new trial was denied, and he was sentenced to 78 months' imprisonment.

The defendant appealed to the Second Circuit on several grounds, challenging the constitutionality of the AECA, the jury instructions, and the District Court's decision to require the assistance of a court-appointed interpreter throughout the trial. The Second Circuit affirmed the District Court's judgment of conviction, holding that the ACEA was constitutional, the jury instructions were proper, and further, that the District Court did not abuse its discretion in requiring the assistance of an interpreter.

The defendant's challenge to the constitutionality of the AECA rested on the argument that the provisions giving the President authority to designate certain goods as "defense articles" as an unconstitutional delegation of legislative authority to the Executive. The Second Circuit, looking to other circuits on the issue, disagreed with defendant, and upheld the AECA provisions. In its analysis, the Second Circuit discussed the general rule that Congress is not authorized to delegate its legislative authority to another branch of Government, provided certain exceptions apply. The Court indicated that for Congress to delegate authority to the Executive, it must "lay down by legislative act an intelligible principle to which the person or body authorized [to exercise the delegated authority] is directed to conform." An "intelligible principle" is defined as a principle that "clearly delineates the general policy, the public agency which is to apply it, and the boundaries to this delegated authority." After a careful analysis, the Second Circuit found the AECA to satisfy the intelligible principle standard. Further, the Second Circuit found the AECA was not unconstitutionally vague, as the materials exported by defendant were clearly listed amongst those requiring a license, and further, the defendant was well-aware his conduct required such license.

Next, defendant argued that the District Court erred in instructing the jury on both willfulness and conscious avoidance. The Second Circuit explained that this argument would not necessitate reversal "unless the charge either 'failed to inform the jury adequately of the law or mislead the jury as to the correct legal rule.'" The Second Circuit, looking to several other circuits for guidance, held the District Court's instruction to the jury on willfulness was not erroneous. Further, the Second Circuit held that instructing the jury on conscious avoidance was also proper, as the District Court correctly made it clear to the jury that willfulness was still required.

The defendant also argued that the District Court's requirement of a court-appointed interpreter violated his rights under the Sixth Amendment and the Court Interpreters Act (CIA), as he is afforded an absolute right to waive the use of an interpreter, and even if not absolute, the District Court abused its discretion by requiring the use of one. The Second Circuit, addressing the issue for the first time, found that although the Sixth Amendment and the CIA afford the defendant a qualified right to waive the use of an interpreter, that right is not absolute, and the district court has discretion to determine whether waiver is reasonable under the circumstances. The Second Circuit found that the District Court did not abuse its discretion in requiring that defendant use a court-appointed interpreter throughout the trial while he testified, as the jury was properly instructed not to draw an adverse inference from the defendant's occasional use of an interpreter.
To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...5b392119/2/hilite/

Panel: Circuit Judges Jacobs, Cabranes, and Wesley

Argument Date: 09/13/2017

Date of Issued Opinion: 04/26/2018

Docket Number: 15-3814-cr

Decided: Affirmed

Case Alert Author: Matthew Shock

Counsel: Aimee Hector, Special Assistant United States Attorney, (Michael Lockard, Special Assistant United States Attorney, on the brief), for Richard P. Donoghue, United States Attorney for the Eastern District of New York, New York, NY, for Appellee. Marc Fernich, Law Office of Marc Fernich, New York, NY, for DefendantAppellant.

Author of Opinion: Circuit Judge Cabranes

Circuit: 2nd Circuit

Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 04/30/2018 01:59 PM     2nd Circuit     Comments (0)  

April 25, 2018
  FEDERAL TRADE COMMISSION v. AT&T MOBILITY LLC
Headline: In determining whether AT&T Mobility was immune from FTC regulation concerning its data-throttling plan, the Ninth Circuit, sitting en banc, held that the FTC Act's common-carrier exemption was "activity based," meaning that a common carrier is exempt from FTC jurisdiction only with respect to its common carrier activities, rather than "status based," such that an entity engaged in common-carrier activities is entirely exempt from FTC jurisdiction.

Areas of Law: Federal Civil Procedure, Anti-Trust and Trade Regulation

Issues Presented: Whether the FTC Act's common-carrier exemption from the agency's enforcement authority over "unfair or deceptive acts or practices" is "activity based," meaning that a common carrier is exempt from FTC jurisdiction solely with respect to its common-carrier activities, or status-based, such that an entity engaged in common-carrier activities is entirely exempt from FTC jurisdiction.

Brief Summary: The Ninth Circuit, sitting en banc, affirmed the district court's denial of AT&T Mobility, LLC.'s (AT&T) motion to dismiss the FTC's action alleging that AT&T's data-throttling program was unfair and deceptive. The en banc court rejected AT&T's argument that it was exempt from FTC regulation because it is a "common carrier[] subject to the Acts to regulate commerce." 15 U.S.C. § 45(a)(2). AT&T argued unsuccessfully that its non-common carrier - mobile data service - activity was exempted from FTC regulation regardless of the fact that it provides both common-carrier and non-common-carrier services because it has the "status" of a common carrier based on its telephone service.

Further, the Ninth Circuit en banc court also held that a Federal Communication Commission's (FCC) order, issued after the FTC filed suit against AT&T, that reclassified mobile data service from a non-common-carrier service to a common carrier service, applied prospectively and, therefore, did not deprive the FTC of its jurisdiction or authority over conduct occurring before the order.

Significance: All common carriers are only exempted from FTC regulations over their congressionally recognized common-carrier activity.

Extended Summary: In 2007, AT&T offered an "unlimited" data service plan to customers who purchased an Apple iPhone, which was exclusively sold by AT&T at that time. In 2010, AT&T ceased offering the unlimited plan. Legacy customers who had already signed up were "grandfathered" and, thus, were permitted to retain their plans.

In 2011, AT&T began reducing the data speed for its unlimited mobile data plan customers, a practice known as "data throttling." The FTC filed suit against AT&T under Section 5 of the Federal Trade Commission Act (the Act), for "unfair and deceptive" business practices because AT&T did not notify the majority of its unlimited plan customers and data restrictions were not disclosed in unlimited plan ads.

Under the under Section 5 of the Act, a common carrier is exempt from FTC regulation. AT&T moved to dismiss, asserting that, since it had the status of a common carrier regarding its telephone services, all of its activities, including its non-carrier mobile data service activities are exempt from FTC regulation.

While AT&T's motion was pending the FTC issued a Reclassification Order (the Order) changing mobile data service classification into a common carrier activity but "only on a prospective basis." Consequently, AT&T asserted it was a common carrier under any construction of Section 5, and that the FTC was no longer empowered to pursue its claims, either past or present, against the company.

Based upon its examination of judicial opinions contemporaneous with the Act's passage in 1914, the district court found that, around 1914, "[a]n entity was deemed a common carrier when it had the status of [a] common carrier and was actually engaging in common carriage services." The district court read the Act broadly and its exceptions narrowly because it considered the FTC Act a remedial statute seeking to mend systemic anti-trust and trade problems. Noting legislative history, the district court held that exempting AT&T from FTC jurisdiction would "result in significant regulatory gaps."

The district court immediately certified an interlocutory appeal of its order denying the dismissal. The Ninth Circuit panel reversed the district court, "conclud[ing], based on the language and structure of the FTC Act, that the common carrier exception is a status-based exemption and that AT&T, as a common carrier, is not covered by section 5" of the Act.

The Ninth Circuit granted rehearing en banc to review de novo the panel's decision.

Observing that the text and history of the FTC Act do not clearly define the meaning of "common carrier," the en banc court examined the common-law meaning of the term at the time the FTC Act was passed in 1914 reasoning that Congress meant to incorporate the established meaning of that term. The court concluded that "a consistent line of cases demonstrates that "common carrier" had a well-understood meaning by 1914. The court also noted that that its approach is consistent with the Ninth Circuit's "longstanding interpretation of 'common carrier' under the Communications Act as well as "the views of our sister circuits" including the D.C. Circuit, Second Circuit and Eleventh Circuit.

The en banc court concluded that "the structure of the [FTC Act] and its contemporaneous legislative history, coupled with more than a century of judicial interpretation align with the preferred reading and expertise of the two most important regulators with an interest in this appeal" and held that "the exemption in Section 5 of the FTC Act - 'except . . . common carriers subject to the Acts to regulate commerce' - bars the FTC from regulating 'common carriers' only to the extent that they engage in common-carriage activity" and, therefore, that "the FTC may regulate common carriers' non-common-carriage activities."

Finally, the Ninth Circuit en banc court also held that the FCC's Order reclassifying mobile data service from a non-common-carriage service to a common-carriage service applies prospectively.

To read the full opinion, please visit:

http://cdn.ca9.uscourts.gov/da...18/02/26/15-16585.pdf

Panel: Sidney R. Thomas, Chief Judge, and Stephen Reinhardt, Susan P. Graber, M. Margaret McKeown, William A. Fletcher, Johnnie B. Rawlinson, Milan D. Smith, Jr.*, N. Randy Smith, Jacqueline H. Nguyen, Paul J. Watford and Michelle T. Friedland, Circuit Judges.

* Judge Milan D. Smith, Jr. was drawn to replace Judge Alex Kozinski, who retired after oral argument but before this opinion was published.

Argument Date: September 19, 2017

Date of Issued Opinion: February 26, 2018

Decided: The Ninth Circuit en banc affirmed the district court's denial of AT&T's 12(b)(1) motion to dismiss, and reversed a Ninth Circuit Panel's prior interlocutory reversal, allowing the FTC to maintain suit against AT&T for unfair business practices regarding their throttling of broadband speed for unlimited plan holders, despite legislation that had passed subsequent to the initiation of this lawsuit, which reclassified mobile data services as within the scope of activity of a common carrier.

Case Alert Author: M. D. Shapiro

Counsel: Michael Kellogg (argued) and Mark C. Hansen, Kellogg Huber Hansen Todd Evans & Figel P.L.L.C., Washington, D.C.; David L. Anderson, Sidley Austin LLP, San Francisco, California; for Defendant-Appellant.

Joel Marcus (argued), Director of Litigation; Matthew M. Hoffman and David L. Sieradzki, Attorneys; David C. Shonka, Acting General Counsel; Evan Rose, Matthew D. Gold, and Linda K. Badger, Of Counsel; Federal Trade Commission, Washington, D.C.; for Plaintiff-Appellee. Jacob M. Lewis, Associate General Counsel; Scott M. Noveck, Counsel;

Jacob M. Lewis, Associate General Counsel; David M. Gossett, Deputy General Counsel; Howard J. Symons and Brendan Carr, General Counsel; Federal Communications Commission, Washington D.C.; for Amicus Curiae Federal Communications Commission.

Seth E. Mermin, Samantha K. Graff, and Thomas Bennigson, Public Good Law Center, Berkeley, California, for Amici Curiae Consumers Union, Consumer Federation of America, Consumer Federation of California, Consumer Action, National Association of Consumer Advocates, National Consumers League, Center for Digital Democracy, Center for Democracy & Technology, Electronic Privacy Information Center, Benton Foundation, Common Sense Kids Action, and Privacy Rights Clearinghouse.

Paul K. Ohm, Professor, Georgetown University Law Center, Washington, D.C.; William McGeveran, Associate Professor, University of Minnesota Law School, Minneapolis, Minnesota; for Amici Curiae Data Privacy and Security Law Professors.

Charles Duan, M. Ryan Clough, John Gasparini, Sara Kamal, and Jaime Petenko, Public Knowledge, Washington, D.C., for Amicus Curiae Public Knowledge.

Adin H. Rosenbaum and Sean M. Sherman, Public Citizen Litigation Group, Washington, D.C., for Amicus Curiae Senator Richard Blumenthal. Andrew Jay Schwartzman and Laura Moy, Institute for Public Representation, Georgetown University Law Center, Washington, D.C., for Amicus Curiae Social Justice Organizations.

Patrick J. Massari, Michael Pepson, and Cynthia Crawford, Cause of Action Institute, Washington, D.C., for Amicus Curiae Cause of Action Institute.

Author of Opinion: Justice M. Margaret McKeown

Circuit: Ninth Circuit

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 04/25/2018 01:55 PM     9th Circuit     Comments (0)  

April 17, 2018
  Emilio Fabian Moreno AKA Emilio Fabian Acuna Moreno AKA Emilio Fabian Acuna v. Attorney General of the United States - Thi
Headline: Third Circuit Holds the Least Culpable Conduct Punishable Under § 6312(d) Is Morally Turpitudinous and the Definition of Crime Involving Moral Turpitude Is Not Void for Vagueness Under the Due Process Clause.

Area of Law: Immigration

Issue(s) Presented: Does a conviction for possession of child pornography under 18 Pa. Cons. Stat. § 6312(d) render an alien removable as an alien convicted of a crime involving moral turpitude, and is the statutory provision deeming aliens convicted of a crime involving moral turpitude void for vagueness under the Due Process Clause of the Fifth Amendment?

Brief Summary: Emilio Moreno was ordered removed to his native country Argentina after the Board of Immigration Appeals held that his conviction for possession of child pornography under 18 Pa. Cons. Stat. § 6312(d) constituted a crime involving moral turpitude ("CIMT"). Moreno petitioned for review. Moreno first argued that, under the categorical approach, the least culpable conduct hypothetically necessary to sustain a conviction under § 6312(d) is not morally turpitudinous. The Third Circuit applied the categorical approach to determine whether § 6312(d) was a CIMT. To do so, the court ascertained the least culpable conduct hypothetically necessary to sustain a conviction under the statute. The court determined that this conduct is consensual "sexting" between an eighteen-year-old and a seventeen-year-old. The Third Circuit found that Pennsylvania's accepted rules of morality are violated when an adult possesses sexually explicit images of a minor, regardless of whether the adult is only eighteen. The court relied on Pennsylvania's legislative intent in § 6312 to protect children and the General Assembly's downgrading of possession of sexually explicit images from a felony to a misdemeanor if committed by a minor between twelve and seventeen. The court also rejected Moreno's argument that the definition of CIMT is void for vagueness. Relying on the Supreme Court's decision in Jordan v. DeGeorge, 341 U.S. 223 (1951), the court defined moral turpitudinous offenses are those which are inherently base, vile or depraved, contrary to the accepted rules of morality. Therefore, crimes involving possession of child pornography are morally turpitudinous. The court denied Moreno's petition for review.

Extended Summary:

Emilio Moreno, native and citizen of Argentina, was admitted to the United States under a grant of humanitarian parole. Moreno pleaded guilty to one count of possession of child pornography under § 6312(d) of Pennsylvania's "sexual abuse of children" statute. The Department of Homeland Security charged Moreno as removable for having been convicted of a CIMT under 8 U.S.C. § 1182(a)(2)(A)(i)(I). Moreno filed a Motion to Terminate Proceedings on the grounds that § 6312(d) is not a CIMT. The motion was denied and Moreno was ordered removed to Argentina. Moreno appealed to the Board of Immigration Appeals, which rejected Moreno's appeal. Moreno appealed again to the Third Circuit.
Moreno argued that his conviction for possession of child pornography under § 6312(d) does not render him removable as an alien convicted of a CIMT. The Third Circuit applied the categorical approach to determine whether moral turpitude inheres in an offense. The first step in the categorical approach is to ascertain the least culpable conduct hypothetically necessary to sustain a conviction under the statute. Then, the court must identify whether the hypothetical conduct is morally turpitudinous.
Section 61312(d) provides that a person is guilty of possessing child pornography if he or she intentionally views or knowingly possesses, among other media, any photograph or computer depiction depicting a child under eighteen engaging in a prohibited sexual act. Moreno argued that the lease culpable hypothetical conduct that faces conviction under the statute is consensual "sexting" between an eighteen-year-old and a seventeen-year-old. The court agreed.
The Third Circuit found that this hypothetical conduct could still be regarded as a CIMT because Pennsylvania case law and legislative enactments suggest that it would be. The court first looked to acts of the Pennsylvania legislature, which reflected its intent in the purpose of § 6312. The purpose of § 6312 is to protect children, end the exploitation of children, and eradicate the supply of child pornography. Also the court looked to 18 Pa. Cons. Stat §6321, which downgraded the possession of "sexually explicit images" from a felony to a misdemeanor of children between the ages of twelve and seventeen. Because eighteen-year-olds were not recipients of leniency in that statute, their violation of the act would constitute moral turpitude. The court rejected Moreno's argument that the least culpable conduct hypothetically necessary to sustain a conviction under 18 Pa. Cons. Stat. § 6312(d) constitutes a CIMT.
The Court then rejected Moreno's contention that the definition of CIMT is void for vagueness. A statute is void for vagueness when it is so vague that it fails to give ordinary people fair notice of the conduct it punishes. Vagueness challenges are evaluated on a case-by-case basis. The Third Circuit relied on the Supreme Court's decision in Jordan v. De George, 341 U.S. 233 (195), where the Court held the phrase "crime involving moral turpitude" was not void for vagueness because it warned the defendant that, were he to commit a crime in which fraud was a component, the statutory consequence would be deportation. The Third Circuit applied the same reasoning to the facts of the case and found that it is readily apparent that crimes involving possession of child pornography and sexual abuse of children are morally turpitudinous. Therefore, Moreno was forewarned that the statutory consequence of possessing child pornography is deportation. The court denied Moreno's petition for review.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/171974p.pdf

Panel: Vanaskie, Shwartz, and Fuentes, Circuit Judges.

Argument Date: November 14, 2017

Date of Issued Opinion: April 9 2018

Docket Number: No. 17-1974

Decided: Petition for review denied.

Case Alert Author: Andrew Verdone

Counsel: Wayne P. Sachs, Jefferson B. Sessions, III, Jaclyn E. Shea

Author of Opinion: Circuit Judge Vanaskie

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 04/17/2018 10:10 AM     3rd Circuit     Comments (0)  

April 11, 2018
  Winston v. City of Syracuse
Headline: Second Circuit Holds that Syracuse's Policy of Terminating Water Service to Tenants When a Landlord Fails to Pay the Water Bill is Unconstitutional

Area of Law: Constitutional Law

Issue Presented: Whether a city's policies of terminating water service to tenants when a landlord fails to pay the bill and refusing to allow tenants to open their own accounts lack a rational basis and therefore violate the Due Process and Equal Protection Clauses of the United States Constitution.

Brief Summary: Plaintiff Jacqueline Winston lived in a unit of a multi-family home in Syracuse, New York. On February 23, 2016, the City of Syracuse shut off the water service to her building because her landlord had not paid the water bill. Moreover, the City has a policy of not allowing tenants to open their own water accounts. Winston filed a class action alleging that the City's policies violate the Due Process and the Equal Protection Clauses of the Fourteenth Amendment. The U.S. District Court for the Northern District of New York granted the City's motion for judgment on the pleadings, concluding the City has a rational basis for both policies. Reversing in part, the Second Circuit held that although the City had a sufficient basis to refuse to allow tenants to open their own water accounts, the policy of terminating water service to tenants when a landlord fails to pay the water pill--unless the tenants pay the landlord's bill--is not rationally related to a legitimate government interest. "[T]he City cannot rationally compel tenants to pay their landlord's bills, because the tenants have no legal obligation to pay those bills," the court explained. To read the full opinion, please visit http://www.ca2.uscourts.gov/de...f2c2b/1/hilite/


Extended Summary: Winston is a long-time tenant of a unit in a multi-family home in Syracuse, New York ("City"). The City allows only property owners to have water service accounts. On January 19, 2016, Winston received a notice from the City informing her that the water service would terminate unless the outstanding balance of $472.97 were paid. She was also informed of her right to request a hearing before a hearing officer before the water is shut off. Because Winston informed the landlord's maintenance person and was assured that the bill would be paid, she did not avail herself of the hearing procedure. The landlord, however, failed to pay the bill and the water was shut off. Importantly, in accordance with the City's ordinance, once service is terminated, it may only be restored "when the event which is the basis for the shut off no longer exists" and with a restoration fee. An occupant may pay the outstanding bill, but it is then his or her responsibility to recoup the amount from the landlord.

On the third day without water service, Winston filed a class action alleging the City's policies of terminating service when a landlord fails to pay a bill and refusing to allow tenants to open their own accounts violate the Due Process and the Equal Protection Clauses of the Fourteenth Amendment both facially and as applied to her. In turn, the City moved for judgment on the pleadings. The U.S. District for the Northern District of New York granted the motion and entered judgment for the City. The Second Circuit agreed that the City's policy of refusing to allow tenants open water accounts is rationally related to a legitimate government purpose. The Court found, however, that terminating services to tenants when landlords fail to pay a bill is not.

The Second Circuit first considered whether Winston has standing to bring the action since she did not request a hearing. Given that Winston made a substantial showing that submission to the policy would be futile since the hearing officer could not request that water service be restored, the Court held Winston could pursue the action.

The Second Circuit then reviewed Winston's challenge to the City's policy of denying the tenants the opportunity to open water accounts. Winston argued that the policy violates the Equal Protection Clause because there is no basis to treat property owners and tenants differently. Because the policy neither targets a suspect group nor has Winston argued that opening a water account is a fundamental right, the Court applied a deferential rational basis review. Under the rational basis test, a classification is upheld as long as it bears a rational relation to some legitimate end. In this case, the Second Circuit concluded the City's two rationales satisfied the rational basis test in that there is a reasonably conceivable state of facts that could provide a rational basis for the classification of property owners and tenants. First, permitting only property owners to open water accounts allows the City to ensure it can collect unpaid water bills by placing a lien on the property. Second, separate water accounts are "impossible" in multi-unit dwellings given that water is supplied by a single pipe and measured by a single metered.

With respect to the City's water service termination policy, the Second Circuit reached a different conclusion. Under the Equal Protection claim, Winston alleged that the City creates two classes of tenant water users: "tenants whose landlords have delinquent water bills and tenants whose landlords are current in their payments." Joining other circuits, the Court concluded there is no rational relationship between the disparity of treatment and some legitimate government purpose. The Court held that both classes of tenants are similar in that they rent houses, cannot open water accounts in their own name, and do not have the legal obligation to pay the water bill.

The City's policy of shutting off water to collect debts "divorces itself entirely from the reality of legal accountability for the debt involved" and penalizes innocent third-parties. The Court found the City's arguments that it has an important interest in ensuring the financial soundness of its utility system, that Winston used the water, that it can rationally distinguish between the two classes of tenants, and that the same reasons that justify refusing to allow tenants to open their own accounts justify this policy, unavailing.

Finally, the Second Circuit found that Winston likewise established a substantive due process violation by showing that she has a valid property interest in continued water service and that the City's policy does not satisfy the rational basis review, as discussed above.

Panel: Circuit Judges Parker, Lynch, and Droney

Argument Date: December 14, 2017

Date of Issued Opinion: April 11, 2018

Docket Number: 17-1017-cv

Decided: April 11, 2018

Case Alert Author:
Joanna Kusio

Counsel: Joshua Cotter, Legal Services of Central New York, Syracuse, NY, for Plaintiff-Appellant; Amanda Harrington, Assistant Corporation Counsel (Mary D'Agostino, Assistant Corporation Counsel, on the brief), for Kristen E. Smith, Corporation Counsel, Syracuse, NY, for Defendants-Appellees.

Author of Opinion: Circuit Judge Droney


Case Alert Circuit Supervisor:
Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 04/11/2018 09:52 PM     2nd Circuit     Comments (0)  

April 9, 2018
  Crocker v. Beatty- 11th Circuit
Headline: Eleventh Circuit holds that officer was not entitled to qualified immunity for the warrantless seizure of a smartphone.

Area of Law: Constitutional Law

Issues: Whether an officer is entitled to qualified immunity after seizing a smartphone without a warrant.

Extended Summary: James Crocker ("Crocker") filed a claim under 42 U.S.C. § 1983, asserting that his Fourth Amendment rights were violated when Deputy Sheriff Steven Eric Beatty ("Beatty") seized his phone. Crocker, a bystander to an automobile accident, used his personal smartphone to photograph the accident scene. According to Crocker, Beatty took his phone without Crocker's consent and refused to return the phone until any potential evidence of a crime had been extracted from the phone. Crocker was arrested for resisting an officer without violence after refusing to leave without his phone. In the civil suit, Beatty asserted qualified immunity and moved for summary judgment. The district court granted Beatty's summary judgment as to all claims except for the phone seizure claim, which was denied.

The Eleventh Circuit affirmed. The court found that the seizure was not supported by exigent circumstances because Crocker was merely a bystander with no involvement in the accident. Thus, it was not objectively reasonable for Beatty to believe that he was required to seize the phone to prevent the destruction of evidence. The court found that the district court correctly determined that a Fourth Amendment violation occurred. The court also held that the seizure of the phone violated "a clearly established" right, and therefore, Beatty was not entitled to qualified immunity.

To view the full opinion: http://media.ca11.uscourts.gov...b/files/201713526.pdf.

Panel: Tjoflat, Jill Pryor, Fay, Circuit Judges.

Argument: N/A

Date of Issued Opinion: April 2, 2018.

Docket Number: No. 17-13526.

Decided: Affirmed

Case Alert Authors: Carolina Acosta Fox, Jesse Ochoa, Daniel Vazquez.

Counsel: Guy Bennett Rubin, Rubin & Rubin, Stuart, FL, for Plaintiff-Appellee.
Bruce Robert Bogan, Melissa Jean Sydow, Hilyard Bogan & Palmer, PA, Orlando, FL, for Defendant-Appellant.

Author of Opinion: Per Curiam

    Posted By: Gary Kravitz @ 04/09/2018 06:00 PM     11th Circuit     Comments (0)  

  United States v. Vergara-11th Circuit
Headline: Eleventh Circuit holds that the forensic search of cell phone at the border did not require warrant or probable cause.

Area of Law: Criminal Procedure

Issue: Whether a forensic search of a cell phone at the border requires a warrant or probable cause.

Extended Summary: Returning to the United States from an international cruise, Hernando Javier Vergara ("Vergara") had his cell phones searched by a Customs and a Border Protection Officer. The officer initially found two videos that appeared to be child pornography, which prompted the search of two other phones. A forensic search of the phones revealed multiple explicit content of child pornography in violation of federal law.

The district court denied a motion to suppress evidence obtained from the forensic search. The court found that the initial manual search of the phone did not require reasonable suspicion, and in any event, it was present. The court also found that a warrant was not required for the forensic search, which the court determined was supported by reasonable suspicion. Following a bench trial, Vergara was found guilty and sentenced to 96 months imprisonment on each of the two counts, followed by supervision for life.

The Eleventh Circuit affirmed. The court found that warrantless searches done at the border require, at most, a reasonable suspicion standard. The court acknowledged that in other contexts, the appropriate standard for the search of a cell phone would be a warrant and probable cause, but this was not applicable at the border. The court noted that Vergara did not challenge the district court's determination that reasonable suspicion was present, and thus, did not address the issues of whether reasonable suspicion was required or it if existed.

Judge Jill Pryor dissented, noting that this is the first federal circuit court opinion since Riley v. California, 134 S.Ct. 2473 (2014), to address the issue of whether a warrant is required for a forensic search of a cell phone at the border. After discussing Riley, Judge Pryor determined that a forensic search of a cell phone at the border must be based on a warrant supported by probable cause.

To view the full opinion: http://media.ca11.uscourts.gov.../files/201615059.pdf.

Panel: William Pryor, Jill Pryor, Circuit Judges, and Clevenger (United States Circuit Judge for the Federal Circuit, sitting by designation).

Argument: December 12, 2017.

Date of Issued Opinion: March 15, 2018.

Docket Number: No. 16-15059.

Decided: Affirmed.

Case Alert Authors: Carolina Acosta Fox, Jesse Ochoa, Daniel Vazquez.

Counsel: Linda Julin McNamara, Peter J. Sholl, Arthur Lee Bentley, III, James A. Muench, Jennifer Lynn Peresie, U.S. Attorney's Office, Tampa, FL, for Plaintiff-Appellee
Howard C. Anderson, Adeel Bashir, Federal Public Defender's Office, Tampa, FL, Rosemary Cakmis, Donna Lee Elm, Federal Public Defender's Office, Orlando, FL, for Defendant-Appellant.

Author of Opinion: William Pryor, Circuit Judge.

    Posted By: Gary Kravitz @ 04/09/2018 05:48 PM     11th Circuit     Comments (0)  

April 2, 2018
  Philadelphia Taxi Association, Inc. v. Uber Technologies, Inc. - Third Circuit
Headline: Absent Any Allegations of Anticompetitive Conduct, Philadelphia Taxi Companies Fail to Make an Attempted Monopolization Claim Against Uber.

Area of Law: Antitrust Law

Issue(s) Presented: Did Philadelphia Taxi Companies allege sufficient facts to proceed with its action against Uber for attempted monopolization under the Sherman Act?

Brief Summary:
The Philadelphia Taxi Association with 80 other individual taxicab companies ("Appellants") filed suit against Uber. Appellants claimed Uber's illegal entry into the Philadelphia taxicab market was predatory and led to a sharp drop of value of taxicab medallions and loss of profits. Concluding that Uber's supposed conduct did not constitute an attempted monopoly violation of antitrust laws, the District Court dismissed Appellant's second amended complaint.

The Third Circuit agreed with the District Court and affirmed the dismissal of Appellants' second amended complaint. The court found the alleged facts regarding Uber's supposed conduct in the complaint did not suffice to bring an attempted monopolization action under Section 2 of the Sherman Act. Further, the court held the Appellants lacked standing because their allegation of Uber's misconduct and its connection to harm suffered by Appellants were insufficient to establish anticompetitive conduct.

Extended Summary:
Taxicabs in Philadelphia in October 2014 were required by Philadelphia to have a medallion and a certificate of public convenience, both administered by the Philadelphia Parking Authority (PPA). These requirements provide for the safety and uniformity among cabs by ensuring that the vehicles are insured and in proper condition, drivers are paid minimum wage, drivers are proficient in English, and all drivers have the appropriate licenses. Uber entered the Philadelphia market in October 2014 and did not obtain a medallion or certificate of public convenience.

The Pennsylvania state legislature passed a law in October 2016 approving Uber's operation in Philadelphia and placing it under the authority of the PPA. The law, which went into effect November 2016, required "transportation network companies" and other vehicle for hire companies to obtain licenses and meet other requirements including insurance obligations and safety standards for drivers and vehicles. In the first two years of Uber's operation nearly 1200 medallion drivers left their companies and began to drive for Uber. Taxicab companies suffered losses in profits and confiscation of medallions by lenders.

The purpose of antitrust laws is to punish anticompetitive conduct that harms consumers or competition. The goal is to protect competition, not competitors. Conduct violates antitrust law when the conduct effects price, quantity, or quality of goods or services that harms the market, ultimately harming the consumer.

A party alleging an antitrust violation must adequately state facts proving two elements: 1) attempted monopolization; and 2) that the party suffered an antitrust injury. The Third Circuit held that Appellants failed to state adequate facts proving both an attempted monopolization by Uber of the Philadelphia taxicab market and that the result of Uber's conduct caused the Appellants antitrust injury.

The Third Circuit concluded Appellant's failed to state facts proving attempted monopolization by Uber. The court first explained a party in an antitrust action must prove three elements: 1) defendant engaged in predatory or anticompetitive conduct; 2) defendant specifically intended to monopolize; and 3) defendant had a dangerous probability of achieving monopoly power.

The Third Circuit determined that Uber's actions did not violate antitrust law when looked at in its entirety. It reasoned that Uber actually bolstered competition by offering a more technologically advanced service for a lower price. Appellant's arguments that Uber lowered its prices failed, because the price of a service does not violate antitrust law if it is neither predatory nor harmful to consumers. The Third Circuit also dismissed Appellant's arguments that Uber operated illegally. The court explained that operating illegally is not the concern of antitrust law. Further, the court explained Uber's actions in luring taxicab drivers to work for it were also not in violation of antitrust law. The Third Circuit concluded Uber did not hire drivers simply to exclude competitors from the market, but rather hired them for legitimate business purposes as fully functioning employees.

The Third Circuit concluded Appellants also failed to show Uber had specific intent to monopolize the market. Specific intent can be inferred, for example, by conduct that does not have an efficient business purpose. Appellants could not point to specific evidence that revealed egregious conduct that showed predatory motivation and specific intent to monopolize by Uber. Appellants attempted to argue Uber's knowledge of operating illegally could be evidence of specific intent. The Third Circuit determined, however, that this conduct could also be reasonably viewed as pursuing a genuine business goal to hire independent drivers instead of obtaining a medallion, thus allowing Uber to operate more efficiently.

The Third Circuit also concluded that Appellants did not state facts capable of proving Uber's conduct created a dangerous probability of acquiring monopoly power. It explained that the dangerous probability of acquiring monopoly power is normally a fact intensive question that should not be resolved during pleadings. However, if it is clear on the face of the complaint that the standard cannot be met as a matter of law, then the complaint can be dismissed. There are various factors the court may consider when evaluating this standard. The Third Circuit focused on barriers to entry that include "regulatory requirements, high capital costs, or technological obstacles[] that prevent new competition from entering a market."

Appellants argued that this standard was met because of Uber's success in the Philadelphia market in acquiring market share. The Third Circuit found this argument fell short because it did not consider all competitors in the taxicab market, including other transportation network companies similar to Uber. It further explained that because the elements of attempted monopolization may be interdependent, proof of one element could allow permissible inferences of other elements. However, none of the other elements allowed the court to infer the dangerous probability Uber will achieve a monopoly. At best, the appellants' argument amounted to an assertion that Uber might attempt to obtain monopoly power in the future, not that it had already done so.

Lastly, the Third Circuit also concluded Appellants lacked antitrust injury and therefore standing to bring the action. The Supreme Court held that a plaintiff must prove an antitrust injury, which is the type of injury antitrust laws were intended to prevent, and that the injury flowed from defendant's unlawful acts. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). The evidence must show a causal link between the injury and the antitrust violation's anticompetitive effects. The Third Circuit found that Appellants failed to show any negative impact on consumers or competition in general. Therefore, Appellants could not causally connect any antitrust violation effects to its financial losses due to Uber entering the market. The Third Circuit explained that Uber's presence actually increased competition by adding to the number of vehicles-for-hire available in the Philadelphia market.

The Third Circuit, therefore, held that Appellants failed to state a claim against Uber for antitrust behavior in entering the Philadelphia taxicab market.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/171871p.pdf .

Panel: Ambro, Krause, and Rendell, Circuit Judges.

Argument Date: November 14, 2017

Date of Issued Opinion: March 27, 2018

Docket Numbers: No. 17-1871

Decided: Affirmed.

Case Alert Author: Nina F. del Valle

Counsel: John F. Innelli, Esquire and Stephen R. Bolden, Esquire Counsel for Appellants; and Steven A. Reed, Esquire, R. Brendan Fee, Esquire, Brian C. Rocca, Esquire, and Sujal J. Shah, Esquire, Counsel for Appellee.

Author of Opinion: Circuit Judge Rendell

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mark Rahdert

    Posted By: Susan DeJarnatt @ 04/02/2018 09:50 AM     3rd Circuit     Comments (0)  

March 30, 2018
  Choi v. Tower Research Capital LLC - Second Circuit
Headline: Second Circuit Holds Allegations of Market Manipulation Affecting Trades Executed on the Korean Night Exchange May State a Claim Under the Commodities Exchange Act

Area of Law: Securities Law

Issue(s) Presented: Whether trades executed for plaintiffs, Korean citizens, on the Korea Exchange night market through a New York-based high-frequency trading firm can qualify as "domestic transactions" sufficient to state a claim under the Commodities Exchange Act.

Brief Summary: Plaintiffs, Korean investors, sued the defendants, a high-frequency trading firm based in New York, alleging the firm engaged in a "spoofing" scheme whereby fictitious trades and other deceptive techniques were used to manipulate an index for Korean stocks traded through the Korean night exchange, in violation of the Commodities Exchange Act ("CEA"). The United States District Court for the Southern District of New York granted defendant's motion to dismiss the complaint principally on the ground that the CEA does not apply extraterritorially for jurisdictional purposes necessary to sustain the action. The Second Circuit disagreed, finding that plaintiffs' allegations "make it plausible that the trades at issue were 'domestic transactions'" under Second Circuit precedent. Holding that the CEA could apply to defendants' alleged conduct, the Second Circuit vacated the district court's decision.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...fdf55206a3f/4/hilite/

Extended Summary: Futures contracts on the Korean securities exchange ("KRX") night market are listed and traded through an electronic platform, CME Globex, located in Aurora, Illinois. A KRX night market trade is initiated with the placement of a "limit order" on the KRX system. The order is then matched, within seconds, with an anonymous counterparty to execute the trade at a particular price. The trades are cleared and settled the following morning when the Korean markets open. Plaintiffs, a group of Korean investors who joined in this class action, alleged that defendant, Tower Research Capital LLC ("Tower"), injured them by engaging in market manipulation on the KRX night market in violation of the Commodities Exchange Act ("CEA"). Plaintiffs alleged specifically that Tower utilized "algorithmic flash trading abilities to artificially and illegally manipulate prices" on the night market. Plaintiffs alleged that this so-called "spoofing" created a "false impression about supply and demand and thereby dr[ove] the market price either up or down" to Tower's benefit and to plaintiffs' detriment.

Tower moved to dismiss the complaint and the United States District Court for the Southern District of New York granted Tower's motion on jurisdictional grounds, holding, in essence, that the KRX night market trades occur outside the United States and are, therefore, outside the CEA's territorial reach. Relying on the United States Supreme Court's decision in Morrison v. National Australia Bank Ltd., the district court reasoned that the CEA's reach would extend to the conduct alleged only if the futures contracts were (1) purchased or sold in the United States, or (2) listed on a domestic exchange.

The Second Circuit reversed, however, holding that the plaintiffs "sufficiently alleged that applying the CEA to [Tower's] conduct would not be an extraterritorial application of the act." The Second Circuit stated that the test set out in Morrison, which addressed the territorial reach of § 10(b) of the Securities Exchange Act, while applicable to the CEA did not preclude application of the CEA here. Relying on the Second Circuit's 2012 decision in Absolute Activist Value Master Fund Ltd. v. Ficeto, the court concluded that, for purposes of the CEA, a transaction involving securities is a "domestic transaction" under Morrison if "irrevocable liability is incurred or title passes within the United States." Irrevocable liability attaches "when the parties to the transaction are committed to one another," or, "in the contractual sense, there was a meeting of the minds of the parties." Thus, the Second Circuit stated that "plausible allegations that parties to a transaction subject to the CEA incurred irrevocable liability in the United States suffice to overcome a motion to dismiss CEA claims on territoriality grounds." In the instant case, the Second Circuit found that the allegations that the trades at issue were "matched" in the United States on CME Globex, and that the match was a binding contract for the trades, later "cleared and settled" in Korea, make it "plausible that the parties trading on KRX night market incur irrevocable liability in the United States." Accordingly, the Second Circuit vacated the district court's decision.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...fdf55206a3f/4/hilite/

Panel:
Walker, Pooler, and Lohier, Circuit Judges

Argument Date: 09/20/2017

Argument Location:
New York

Date of Issued Opinion:
03-29-2018

Docket Number:
17-648

Decided: Vacated

Case Alert Author: Eric Grossfeld

Counsel: Michael Eisenkraft, Cohen Milstein Sellers & Toll PLLC, New York, NY (J. Douglas Richards, Richard Speirs, Cohen Milstein Sellers & Toll PLLC, New York, NY; Times Wang, Cohen Milstein Sellers & Toll PLLC, Washington, DC, on the brief) for Plaintiffs-Appellants. Noah A. Levine, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY (Matthew T. Martens, Albinas J. Prizgintas, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, on the brief), for Defendants-Appellees.

Author of Opinion: John M. Walker, Jr., Circuit Judge

Circuit: 2d Circuit

Case Alert Circuit Supervisor: Professor Elyse S. Diamond

    Posted By: Elyse Diamond @ 03/30/2018 09:39 AM     2nd Circuit     Comments (0)  

March 29, 2018
  Bennett v. Superintendent Graterford SCI; Attorney General Pennsylvania - Third Circuit
Headline: Finding Due Process Violation, Third Circuit Orders New Trial for Inmate Serving Life Sentence

Area of Law: Criminal

Issue(s) Presented: Whether Tony Bennett's due process rights were violated by an erroneous jury instruction at his trial.

Brief Summary: Tony Bennett was convicted of first degree murder for his role as a co-conspirator in a robbery-murder, and sentenced to life in prison without the possibility of parole. At his trial, the trial court erroneously instructed in a fashion which allowed the jury to conclude that each co-conspirator could be found guilty of first degree murder despite the fact that the homicide was not specifically contemplated by that particular defendant. After sentencing, Bennett filed several petitions for relief in state court, before filing a petition for habeas corpus in federal court on due process grounds. Bennett argued that the trial court's instruction relieved the Commonwealth of its burden of proving each and every element of each offense beyond a reasonable doubt. After the District Court denied his petition for habeas corpus, the Third Circuit reversed. In reaching its decision, the Court found that there was a reasonable likelihood the jury applied the instructions in such a way that would relieve the Commonwealth of its burden of proving that Bennett had the specific intent to kill, which constitutes a violation of Bennett's due process rights.

Extended Summary:

In 1990, nineteen-year-old Tony Bennett was convicted of first degree murder for the role he played in robbery at a Philadelphia jewelry store. Bennett was sitting in the getaway car when two other co-conspirators entered and robbed the store. The store clerk, Ms. Ju Yang Lee, was murdered during the commission of the robbery. Bennett supplied the loaded firearm that was used to shoot and kill the victim, but Bennett never left the getaway car. Bennett went to trial on murder, criminal conspiracy, possession of an instrument of a crime, and robbery charges. He was tried jointly with two others, Johnson and Wyatt. Johnson entered the store with the shooter, but Wyatt and Bennett remained in the car. A fourth person, Ray, testified for the Commonwealth and received a reduced sentence. Mayo, the shooter, was declared incompetent to stand trial, so his case was severed. Bennett was charged with first degree murder. In order to prove first degree murder, the Commonwealth must prove that the individual charged acted with the specific intent to kill. "An accomplice or co-conspirator cannot be convicted of first degree murder based on the specific intent to kill of the principal." At Bennett's trial, however, the Commonwealth failed to argue that Bennett had the specific intent to kill, and instead argued to the jury that Bennett could be found guilty of first degree murder as a co-conspirator.

At the conclusion of Bennett's trial, the trial court instructed the jury on the various degrees of murder and criminal conspiracy. In instructing the jury on conspiracy, the trial court stated that each individual involved in the commission of a criminal conspiracy that causes a fatality is "guilty regardless of which one inflicts the mortal wounds... Such responsibility ... extends even to a homicide which is the consequence of the natural and probable execution of the conspiracy even though such homicide is not specifically contemplated by the parties." After hearing these instructions, the jury convicted Bennett of first degree murder, and Bennett was sentenced to life in prison without the possibility of parole.

In 1995, Bennett filed a pro se petition under the Pennsylvania Post-Conviction Relief Act (PCRA) in which he asserted two claims: (1) a violation of "his state and federal due process rights by instructing the jury that he could be found guilty without the specific intent to kill," and (2) ineffective assistance of counsel based upon his trial counsel's failure to object to the erroneous jury instructions. In 1999, the trial court dismissed his PCRA petition, and the Superior Court dismissed Bennett's appeal because Bennett's attorney failed to file a brief. While Bennett's post-conviction petitions were winding through the courts, his co-conspirator Wyatt was able to obtain relief from his first degree murder conviction from the Pennsylvania courts in 2001 on the ground that the jury instructions allowed the jury to convict him on that count without sufficient evidence. Bennett then filed a second PCRA petition to reinstate his right to appeal. The trial court granted his right to appeal, but in 2005, the Superior Court denied relief on procedural grounds. After a long series of appeals, Bennett finally won PCRA relief, before it was reversed by the Pennsylvania Supreme Court in 2012. The Pennsylvania Supreme Court found that Bennett's due process claim was waived, and found that Bennett's attorney was not ineffective at trial. However, the Court did not address the merits of Bennett's federal due process claim.

Bennett then filed a pro se petition for habeas corpus relief, raising two issues with the District Court. First, Bennett claimed that he was denied due process under the United States Constitution because of the erroneous jury instructions. He also claimed that trial counsel was ineffective for failing to object to the erroneous instructions. Bennett claimed that he was entitled to a de novo review. The District Court adopted a Magistrate Judge's recommendations that it deny Bennett's due process claim but grant a certificate of appealability. Thereafter, Bennett appealed the District Court's decision to the Third Circuit, challenging only the District Court's decision with regard to the due process claim. The Third Circuit then evaluated Bennett's due process claim, starting with whether Bennett exhausted all state court remedies. The Court found that Bennett exhausted his federal due process claim by presenting it on PCRA review. Next, the Court identified the appropriate standard of review. Because Bennett's federal due process claim was not adjudicated on the merits at the state court level, the Court determined that the appropriate standard of review was de novo.

Accordingly, the Third Circuit reviewed Bennett's due process claim on its merits. Citing Waddington v. Sarausad, the Court stated, "nder the federal due process standard, we ask whether there is some 'ambiguity, inconsistency, or deficiency' in the instruction... such that there was 'a reasonable likelihood' that the jury applied the instruction in a way that relieved the State of its burden of proving each and every element of a crime beyond a reasonable doubt." Applying this standard to the facts of Bennett's case, the Court determined that the trial court's instructions were deficient. "The trial court repeatedly suggested that a jury could convict Bennett of first degree murder based upon the shooter's specific intent to kill." The Court concluded that there was a reasonable likelihood the jury applied the instructions in such a way that would relieve the Commonwealth of its burden of proving that Bennett had the specific intent to kill, and that the Commonwealth's arguments in opening and closing only further compounded the effect of the erroneous jury instructions. After finding that the Commonwealth waived the harmless error defense by failing to raise it on appeal, and also holding that even if that defense had been raised the error in this case was not harmless, the Court reversed the District Court's order denying habeas corpus relief, and remanded with instructions to grant Bennett a conditional writ of habeas corpus.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/161908p.pdf

Panel: Ambro, Restrepo, and Nygaard, Circuit Judges

Argument Date: May 9, 2017

Date of Issued Opinion: March 26, 2018

Docket Number: No. 16-1908

Decided: Reversed and Remanded.

Case Alert Author: Stephen P. Dodd

Counsel: Richard H. Frankel, Esquire, Ke Gang, Student Counsel, Mischa Wheat, Student Counsel, Counsel for Appellant; Christopher P. Lynett, Esquire, Simran Dhillon, Esquire, Susan E. Affronti, Esquire, Counsel for Appellee.

Author of Opinion: Circuit Judge Restrepo

Circuit: Third Circuit

Case Alert Circuit Supervisor: Mark Rahdert

    Posted By: Susan DeJarnatt @ 03/29/2018 09:56 AM     3rd Circuit     Comments (0)  

March 28, 2018
  : Spireas v. Commissioner of Internal Revenue - Third Circuit
Headline: Third Circuit Concludes that Taxpayer Failed to Preserve His Argument in Tax Court.

Area of Law: Civil

Issue(s) Presented: (1) Whether Spireas waived the argument that he prospectively transferred all substantial rights in liquisolid felodipine to Mutual.

Brief Summary: Spiridon Spireas was one of the scientists who invented liquisolid technology, which is used to help the body absorb medications taken orally. Mutual Pharmaceutical Company ("Mutual") is a drug manufacturer. Spireas and Mutual entered into two separate agreements, one in 1998 and another in 2000. In the 1998 agreement, Spireas granted his rights to liquidated technology over to Mutual, in exchange for Mutual's promise to pay 20 percent in royalties on all profit earned from liquisolid technology products. The 2000 agreement granted Mutual the rights to a new blood-thinner drug called felodipine, which they marketed and sold with great success. Spireas received royalties from the profit made on felodipine, and reported those royalties as capital gains on his 2007 and 2008 tax returns. In 2013, the Commissioner of Internal Revenue notified Spireas of a tax deficiency for the 2007 and 2008 tax years in the amount of $5.8 million. Spireas petitioned the United States Tax Court, arguing that he properly reported the royalties as capital gains. The Commissioner argued that the royalties should have been treated as ordinary income. The Tax Court agreed with the Commissioner, and Spireas appealed. The Third Circuit affirmed the Tax Court's decision, finding that Spireas waived the argument that he prospectively transferred all substantial rights in liquisolid felodipine by failing to raise it in Tax Court.

Extended Summary:

Spiridon Spireas, Plainitff, is one of the pharmaceutical scientists that invented "liquisolid technology," which is meant to help the body absorb medication taken orally. The liquidation process is such that it must be developed separately for each drug that goes to market. Mutual Pharmaceutical Company ("Mutual") is an established drug manufacturer. Spireas and Mutual entered into two separate agreements. In the first agreement in 1998, Spireas granted Mutual rights to the liquisolid technology and the specific drug formulations developed using the technology. The 1998 agreement gave Mutual the exclusive right to use the liquisolid technology, but only permitted Mutual to develop those drugs that Mutual and Spireas mutually agreed upon. Mutual also received the exclusive right to produce, market, sell, promote and distribute the drugs that used the liquisolid technology. In exchange for receiving these rights, Mutual agreed to pay Spireas 20 percent in royalties out of the profit it earned from the liquisolid products.

Spireas and Mutual entered into a second agreement in March of 2000, through which Spireas agreed to develop a generic blood-thinner medication using liquisolid technology. The drug was called felodipine. Spireas finished inventing the drug sometime after May 2000. The FDA approved liquisolid felodipine, and Mutual marketed and sold the drug with great success. Mutual's felodipine sales totaled over $40 million, and Spireas reported the royalties he received as capital gains for the 2007 and 2008 tax years.

In 2013, the Commissioner of Internal Revenue notified Spireas that he owed $5.8 million for the 2007 and 2008 tax years because the royalties he received should have been included on his tax returns as ordinary income rather than capital gains. Spireas petitioned the United States Tax Court, arguing that the royalties should have been construed as capital gains because the transfer he made to Mutual satisfied the requirements of Section 1235 of the Internal Revenue Code. Section 1235 states that "a transfer ... of property consisting of all substantial rights to a patent ... by any holder shall be considered the sale or exchange of a capital asset held for more than 1 year." Therefore, if the requirements of Section 1235 are met, any consideration received in return will be treated as capital gains, rather than ordinary income, and taxed at a lower rate. The Commissioner argued that Spireas did not transfer all of his rights to liquisolid technology because Mutual was not allowed to use the technology for many of its other potential applications. Spireas argued that, despite the fact that he did not transfer all of his rights with regard to the technology itself, he did transfer all substantial rights to the liquisolid felodipine after it was invented. The Tax Court ruled in favor of the Commissioner, and Spireas appealed.

Spireas's argued that the royalty payments he received should be construed as capital gains because he received them in exchange for "all substantial rights" to liquisolid felodipine. He further argued that he prospectively assigned Mutual the rights via the 1998 agreement, before he invented the liquisolid felodipine. The Commissioner argued that Spireas waived his argument that he prospectively assigned the rights to Mutual because he did not raise that argument in Tax Court. The Third Circuit agreed with the Commissioner and affirmed the Tax Court's ruling. In reaching its decision, the Court used Spireas's previous assertions against him. The Court looked at Spireas's opening brief in Tax Court where he stated that a transfer of rights took place "after [the felodipine formulation] was invented," and his argument in Tax Court that the post-March 2000 transfer of the felodipine formulation "constituted a transfer of all substantial rights," to conclude that Spireas's argument was contradictory. Furthermore, according to the Court, changing the date on the transfer of rights to Mutual would change the theory of the case. Spireas's payments would only be entitled to capital gains treatment if he transferred property rights that he actually possessed at the time of the transfer. Because Spireas argued in Tax Court that he did not transfer his property rights in liquisolid felodipine until sometime after March 2000, he waived the argument that he prospectively transferred his interest in liquisolid felodipine in the 1998 agreement. Therefore, because Spireas waived the argument he wished to raise on appeal, the Third Circuit granted the Tax Court's ruling in favor of the Commissioner.

Judge Roth filed a dissent in which she challenged the court's conclusion. She maintained that Spireas's position had been consistent throughout the proceedings. The majority, she maintained, misconstrued his argument by confusing the transfer of rights in the patent technology, which occurred in 1998, with the transfer of possession of the formulation for felodipine, which occurred in 2000. While there had been some confusion in the presentation in Tax Court about the timing issues, counsel for Spireas recognized that confusion and clarified his position by the end of the argument. Judge Roth also objected to the majority's strict view of waiver, which was based "almost entirely" on a criminal case, United States v. Joseph, 730 F.3d 336 (3d Cir. 2013), without considering a variety of applicable discretionary factors in civil waiver decisions that afforded a greater degree of discretion.

The full opinions can be found at http://www2.ca3.uscourts.gov/opinarch/171084p.pdf

Panel: Hardiman, Shwartz, and Roth, Circuit Judges

Argument Date: October 10, 2016

Date of Issued Opinion: March 26, 2018

Docket Number: No. 17-1048

Decided: Affirmed.

Case Alert Author: Stephen P. Dodd

Counsel: Brian Killian, Esquire, Robert R. Martinelli, Esquire, Michael E. Kennedy, Esquire, William F. Colgin Jr., Esquire, Counsel for Appellant; David A. Hubbert, Esquire, Bruce R. Ellisen, Esquire, Clint A. Carpenter, Esquire, Counsel for Appellee.

Author of Opinion: Circuit Judge Hardiman

Circuit: Third Circuit

Case Alert Circuit Supervisor: Mark Rahdert

    Posted By: Susan DeJarnatt @ 03/28/2018 02:49 PM     3rd Circuit     Comments (0)  

March 26, 2018
  Marentette v. Abbott Laboratories
Headline: Second Circuit holds that consumer class action suit over Similac Advance Organic Infant Formula is preempted by the federal Organic Foods Production Act.

Area of Law: Food Law

Issue Presented: Whether the federal Organic Food Production Act (OFPA) preempts state law claims that challenge an OFPA organic certification

Brief Summary: Abbott Laboratories, Inc. ("Abbott") produces what is marketed as "Similac Advance Organic Infant Formula." The packaging of the product states that it is organic and displayed the "USDA Organic" seal. Three parent-consumers allegedly purchased this formula in reliance on the word "organic" and the "USDA Organic" seal. They subsequently brought a putative class action lawsuit Abbott in the United States Eastern District of New York, alleging that the formula contained 16 ingredients that are prohibited by the Organic Foods Production Act ("OFPA" or "the Act") and the products are therefore not really organic. Their complaint included several state and common law claims arising under New York and California law, all based on the underlying false-labeling allegation. The district court dismissed the state law claims on grounds that they were preempted by the federal Organic Food Production Act, and the plaintiffs appealed. The Second Circuit affirmed, explaining that "there is simply no way to rule in Parents' favor without contradicting the certification decision, and, through it, the certification scheme that Congress enacted in the OFPA."

To read the full opinion, please visit http://www.ca2.uscourts.gov/de...7288446ed91/2/hilite/.

Significance: The Second Circuit has now joined the Eighth Circuit in holding that all state-law claims that challenge an OFPA organic certification are preempted by the OFPA, because they "directly conflict with the certifying agent's role as set out in that statute."

Extended Summary: Parents Ellen Steinlien, Sara Marentette, and Matthew O'Neil Nighswander purchased the product Similac Advance Organic Infant Formula in liquid and/or powder form at various times between 2012 and 2014 in New York, New Hampshire, and California. Abbott branded, sold, and advertised the formula as "organic" and packaged the product with the "USDA Organic" seal. The parents collectively brought sought in the United States Eastern District of New York under various State and common law causes of action including statutory consumer-protection claims, common law breach-of-express-warranty claims, and common-law unjust-enrichment. The underlying dispute is the "organic label." The parents allege that the formula contains 16 ingredients that are prohibited by the OFPA and therefore the product is not "organic." The various claims rest on the premise that Abbott therefore falsely labeled its product as "organic."

Abbott moved to dismiss the complaint arguing that the state-law claims were preempted by the OFPA, and that "permitting Parents to sue under state law for a label authorized by a certification scheme enacted by Congress would thwart Congress's purpose in enacting that scheme." The district court dismissed the complaint, ruling it preempted, and the plaintiffs appealed.. After oral argument, the Second Circuit solicited the views from the United States Department of Agriculture (USDA) as amicus curiae on two questions: (1) whether the certification process requires the certifying agent to review and approve the ingredients of the final product to be labeled organic, and (2) whether certification is co-extensive with statutory and regulatory compliance. The USCA explained that the certifying agents review and approve both the process and the ingredients of the final product to be labeled organic, and that certification is intended to be coextensive with compliance, but that the USDA does not inspect or certify batches of products.

In conducting its preemption analysis, the Second Circuit noted the purposes of the OFPA: "(1) to establish national standards governing the marketing of certain agricultural products as organically produced products; (2) to assure consumers that organically produced products meet a consistent standard; and (3) to facilitate interstate commerce in fresh and processed food that is organically produced." To carry out that mandate, the USDA created the National Organic Program (NOP). NOP employs agents who are charged with the multi-step certification and accreditation process. These certifying agents deal with producers such as Abbott who seek to label and market their products as "organic." Under the OFPA, once the "organic" seal is granted, a producer is still subject to annual reinspection. The OFPA further provides enforcement mechanisms and remedies for non-compliance including revocation or suspension.

The court also noted the Eighth Circuit's holding that "all state-law claims which effectively challenge an OFPA organic certification are preempted by the OFPA because they directly conflict with the certifying agent's role as set out in that statute." Because the parents' claims here alleged issues with the certification and certification compliance, the Second Circuit concluded that these claims are similarly preempted. It reiterated that the Act provides for its own enforcement scheme and accreditation process and considers this "evidence that Congress did not want to permit individual consumers to challenge the certification decisions made pursuant to the OFPA."


Panel: Circuit Judges Pooler and Lynch; District Judge Cogan (sitting by designation)

Argument Date: 08/23/2017

Date of Issued Opinion: 03/23/2018

Docket Number: No. 17-62-cv

Decided: Affirmed.

Case Alert Author: Alissa Katz

Counsel: Yvette Golan, The Golan Firm, (D. Greg Blankinship, Todd Seth Garber, Finkelstein, Blankinship, Frei-Pearson Garber, LLP on the brief), for Plaintiffs-Appellants; Scott Glauberman (Shawn J. Gebhardt on the brief), Winston & Strawn LLP, for Defendant-Appellee.

Author of Opinion: District Judge Cogan

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Professor Emily Waldman

    Posted By: Emily Waldman @ 03/26/2018 09:14 AM     2nd Circuit     Comments (0)  

March 19, 2018
  Chauca v. Abraham - Second Circuit
Headline: Applying New York Law, the Second Circuit Holds that Standard for Submitting Punitive Damages Jury Instruction Under Federal Civil Rights Law Does Not Apply to New York City Human Rights Law

Area of Law: Jury Instructions

Issue(s) Presented: Whether a jury instruction on punitive damages may be granted without a showing of malice, reckless indifference or intent to violate the law under the New York City Human Rights Law.

Brief Summary:
Plaintiffappellant Veronika Chauca appealed a decision in the United States District Court for the Eastern District of New York denying her request for jury instructions on punitive damages following a jury verdict in her favor on a claim for pregnancy discrimination arising under the New York City Human Rights Law ("NYC HRL"). Applying the federal standard for an instruction on punitive damages under Title VII of the Civil Rights Act, the district court had denied the request, ruling there was "no showing of malice, reckless indifference or that there was an intent to violate the law[.]"

On Chauca's appeal, the Second Circuit, finding that New York case law did not resolve the issue of the standard to be used, initially submitted the following certified question to the New York Court of Appeals: "What is the standard for finding a defendant liable for punitive damages under the NYC HRL, N.Y.C. Admin. Code § 8502?" On that certified question, the Court of Appeals held that "the standard for determining damages under the NYCHRL is whether the wrongdoer has engaged in discrimination with willful or wanton negligence, or recklessness, or a 'conscious disregard of the rights of others or conduct so reckless as to amount to such disregard.'" Chauca v. Abraham, 89 N.E.3d 475, 481 (N.Y. 2017) (internal citations omitted). In so holding, the Court of Appeals rejected the application of the federal standard to the NYC HRL, ruling that the implementation of a lower degree of culpability, and eliminating the knowledge requirement, adhered to the New York City Council's mandate that the provisions of the NYC HRL be liberally constructed. Applying the modified standard, in this follow-up opinion, the Second Circuit held that the district court did not apply the correct standard to submit the question of punitive damages to the jury and vacated and remanded the case for further proceedings consistent with the decision.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...f93c50f531e/1/hilite/
Significance, if Any: This opinion provides the standard for issuing jury instructions on punitive damages under the New York City Human Rights Law.

Panel: Chief Judge Katzmann, Circuit Judges Sack and Hall

Argument Date: 09/06/2016

Date of Issued Opinion: 03/19/2018

Docket Number:
15-1720 (L), 15-1777 (XAP)

Decided: Vacated and Remanded

Case Alert Author: Marina Stinely

Counsel: Stephen Bergstein, Bergstein & Ullrich, LLP, Chester, NY (Anne Donnelly Bush, Law Offices of Anne Donnelly Bush, Hastings-on-Hudson, NY, on the brief), for Plaintiff-Appellant. Arthur H. Forman, Forest Hills, NY, for Defendant-Appellant. Joshua Friedman, Friedman & Houlding, LLP, Mamaroneck, NY, for Amicus Curiae National Employment Lawyers Association/New York.

Author of Opinion: Per Curiam

Circuit: Second Circuit

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 03/19/2018 06:55 AM     2nd Circuit     Comments (0)  

March 13, 2018
  United States v. Bowman -- Fourth Circuit
Fourth Circuit Finds Police Lacked Reasonable Suspicion to Prolong Traffic Stop Despite Energy Drink, Snack Wrappers, and Driver's "Pulsing Carotid Artery"

Areas of Law: Fourth Amendment

Issue Presented: Whether a prolonged traffic stop constituted an unconstitutional seizure under the Fourth Amendment.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that an officer had neither consent nor reasonable suspicion and therefore could not constitutionally prolong an otherwise ordinary traffic stop of Brian Bowman. The court held that drugs and drug paraphernalia that were confiscated during the prolonged stop should be suppressed as fruit of that unlawful Fourth Amendment seizure.

Extended Summary: On June 20, 2015, North Carolina State Trooper Andrew Waycaster received a tip that two people were transporting methamphetamine in a "red, older model Lexus," with a particular license plate number. Around 3:00AM, Waycaster spotted a car matching the description and license plate number given. Instead of pulling over the vehicle based on the information in the tip, Waycaster followed the vehicle, looking for independent traffic infractions. Eventually, Waycaster pulled the car over for speeding up to 10MPH over the speed limit and "weav[ing] over the fog line." Defendant Brian Bowman conceded that Waycaster had probable cause to make the initial traffic stop based on the traffic violations.

Once pulled over, Waycaster approached the vehicle and took note of several things that raised his suspicions. First, Waycaster saw movement in both Bowman's and the passenger's, Homero Alvarez, carotid arteries, "leading him to conclude that both men had elevated heart rates and were nervous." Second, Bowman's hand shook as he handed Waycaster his license and registration. Third, even though Bowman claimed he and Alvarez had only been traveling a short distance, there was an empty energy drink, food wrappers, a suitcase, and loose clothes in the car. To Waycaster, these items suggested a trip of much longer duration.

Waycaster instructed Bowman to exit the vehicle, briefly frisked him for weapons, and then placed him in the back of the patrol car while he ran Bowman's license. While running the license, Waycaster asked several questions. In response to being asked where they were headed, Bowman responded that he was picking up Alvarez from Alvarez's girlfriend's house. Bowman could not provide an address but said that the address was saved in his car's GPS. Bowman stated that he had been recently laid off. Because of this, Waycaster found it suspicious that Bowman also admitted to buying inexpensive, used cars off of Craigslist.

Waycaster retuned Bowman's license and registration and said he was going to let Bowman off with a warning. However, before letting Bowman out of the police car, Waycaster told Bowman that he was going to "ask [Alvarez] some questions if [Bowman didn't] mind, okay? Just hang tight right there, okay?" Bowman responded "okay." Comparing Alvarez's answers to Bowman's, Waycaster noted inconsistencies in the stories each told about their plans that evening. Waycaster then returned to Bowman and asked if he could search Bowman's car. Bowman refused. Waycaster then called a K-9 unit to inspect the car. When the K-9 unit alerted to the car, Waycaster searched the car and discovered methamphetamine. Bowman was arrested and charged with possession with intent to distribute. Bowman moved to suppress the evidence, arguing that it had been obtained only after Waycaster unlawfully prolonged a completed traffic stop without consent or reasonable suspicion. The trial court denied the suppression motion and Bowman entered a conditional guilty plea. Bowman then appealed the trial court's denial of the motion to suppress.

An ordinary traffic stop remains reasonable until the tasks tied to the initial stop have been completed. The Fourth Circuit noted that reasonable tasks for an ordinary traffic stop include things like, checking the driver's license, registration, and insurance, or checking for warrants. Applying those rules to the instant case, the Fourth Circuit found the initial stop of Bowman concluded once Waycaster returned Bowman's license and registration and gave him a warning. The prolonged stop, which included the questioning of Alvarez, the re-questioning of Bowman, and the dog sniff, therefore had to be justified by something other than the justification for the initial stop. It was not.

The government first argued that the prolonged stop could be justified by Bowman's consent. The Fourth Circuit rejected this position. Though Waycaster's comment was technically phrased as a question, the court found that it was intended as a statement rather than a request. Therefore, although Bowman responded "okay" when Waycaster said he was going to speak to Alvarez, this statement was more of an acknowledgment of Waycaster's assertion than actual consent. Indeed, Waycaster conceded at trial that he did not intend for Bowman to feel free to leave, and in fact, Bowman was not. As such, Bowman's "okay" was not consent to the prolonged stop.

Alternatively, the government argued that the continued stop could be justified by reasonable suspicion the officer developed over the course of the traffic stop. The Fourth Circuit rejected this argument as well. Considering four facts articulated by the District Court, first separately and then together, the Fourth Circuit found that they did not give rise to reasonable suspicion. First, Bowman's signs of nervousness, which included his shaking hand and movement in his carotid artery, were not "above the norm." Second, the court found the clothes, food, and an energy drink in Bowman's car were "utterly unremarkable." Additionally, even if these items indicated that Bowman had been dishonest about his length of travel, "the government failed to connect it to any wrongdoing in this case." Third, Bowman's inability to recall Alvarez's girlfriend's address was "perfectly consistent with innocent travel" when Bowman was unfamiliar with the area and used a GPS for navigation. Finally, the court found Waycaster's suspicions regarding Bowman's car purchases were supported by "unsubstantiated assumptions" regarding Bowman's financial situation and frequency of purchases.

Taken together, the court found the evidence provided "no basis for reasonable suspicion that Bowman was involved in criminal activity." The facts failed to "eliminate a substantial portion of innocent travelers." For these reasons, the Fourth Circuit held that Waycaster had neither consent nor reasonable suspicion to prolong his initial traffic stop. As a result, the methamphetamine confiscated should have been suppressed as the fruit of a Fourth Amendment violation.

To read the full opinion, click here.

Panel: Judges Traxler, King, and Harris

Argument Date: 12/07/2017

Date of Issued Opinion: 03/01/2018

Docket Number: 16-4848

Decided: Vacated and remanded by published opinion. Judge Traxler wrote the opinion in which Judge King and Judge Harris joined.

Case Alert Author: Reagan Greenberg, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Ann Loraine Hester, FEDERAL DEFENDERS OF WESTERN NORTH CAROLINA, INC., Charlotte, North Carolina, for Appellant. Anthony Joseph Enright, OFFICE OF THE UNITED STATES ATTORNEY, Charlotte, North Carolina, for Appellee. ON BRIEF: Ross Hall Richardson, Federal Public Defender, Interim, FEDERAL PUBLIC DEFENDER FOR THE WESTERN DISTRICT OF NORTH CAROLINA, Charlotte, North Carolina, for Appellant. Jill Westmoreland Rose, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Charlotte, North Carolina, for Appellee.

Author of Opinion: Judge Traxler

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/13/2018 01:30 PM     4th Circuit     Comments (0)  

March 12, 2018
  BMG v. Cox -- Fourth Circuit
Never Gonna Give You Up: Is a 13 Strike Policy Too Forgiving?

Area of Law: Civil Copyright

Issues Presented: Whether the district court erred in instructing the jury that it could impose liability for contributory infringement if "Cox knew or should have known of such infringing activity." Whether the district court abused its discretion by concluding that certain evidence was properly admitted as non-hearsay.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit reversed in part, vacated in part, and remanded because the district court erred in instructing the jury. When the district court instructed the jury that it need only find the appellant "knew or should have known of infringing activity," the court allowed the jury to convict the appellant upon a showing of negligence. Negligence is too low a standard because one can only infringe contributorily by intentionally inducing or encouraging direct infringement. The court further held that the district court did not abuse its discretion by admitting Rightscorp's notices into evidence. The notices were not hearsay because machine-generated notices do not contain "statements."

Extended Summary: Cox is a conduit internet service provider. Some of Cox's subscribers shared and received copyrighted files, including music files using a peer-to-peer file sharing protocol called BitTorrent. Cox's agreement with its subscribers reserves to Cox the right to suspend or terminate subscribers who use Cox's service to infringe the copyrights of any party. Cox enforces this agreement with a thirteen-strike policy and an automated system to process notifications of alleged infringement received from copyright owners. The thirteen-strike policy involves a series of warning emails and subscription suspensions which allow the subscriber to reactivate their Cox service upon either calling a technician or clicking an acknowledgement, depending upon the strike number. Cox only considers subscribers for termination upon the thirteenth notice.

BMG, a music publishing company, hired Rightscorp in 2011. Rightscorp monitored BitTorrent activity and sent Cox infringement notices whenever it identified the sharing of copyrighted BMG material. During its monitoring, Rightscorp determined that Cox users were repeatedly infringing on BMG's music copyrights. Rightscorp sent notices to Cox about these infringements. But, Cox never viewed any of the millions of infringement notices Rightscorp sent because Cox "blacklisted" Rightscorp and had its system automatically delete the notices without viewing them. On November 2016, BMG alleged Cox was vicariously and contributorily liable for acts of copyright infringement by its subscribers. At trial, the district court instructed the jury that to prove contributory infringement, BMG had to show, among other things, that Cox "knew or should have known" of infringing activity by its (Cox's) subscribers. A jury found Cox liable for contributory infringement.

Cox appealed, challenging several of the trial court's rulings, including its rejection of the safe harbor defense, several jury instruction claims, and a number of evidentiary rulings. This Alert focuses on the Fourth Circuit's decision on just two of those challenges - a jury instruction issue and a challenged evidentiary ruling.

The appellant challenged the district court's instruction that the jury could impose liability for contributory infringement if the jury found "Cox knew or should have known of such infringing activity." The Fourth Circuit agreed that the district court erred in giving this instruction. Contributory infringement requires the intentional inducement or encouragement of direct infringement. The court held proof of actual knowledge of infringement of Cox's subscribers would satisfy the intent requirement. The court provided multiple ways a seller, like Cox, might be shown to have intended to induce infringement. For example, such intent might be shown if the article sold is good for nothing else but infringement or when a person sells a product that has lawful uses, but with the knowledge that the buyer will in fact use the product to infringe copyrights. In addition, an equivalent to actual knowledge, willful blindness, would satisfy the requisite intent. However, negligence will not establish the intent necessary to prove contributory infringement. In so ruling the Fourth Circuit broke with the Seventh Circuit. To justify this holding, the court looked to patent law of contributory infringement, criminal law of aiding and abetting, and tort law of concert of action, all of which counsel against a negligence standard.

The appellant also challenged the admission into evidence of Rightscorp's notices because the notices were hearsay. The Fourth Circuit agreed with the district court--the notices were not hearsay because they were computer-generated and therefore the information in the notices was not a "statement." In order to be a "statement," the information itself must have been prepared or created by a human.

To read the full opinion click here.


Panel: Judges Motz, Wynn, and Senior Circuit Judge Shedd

Argument Date: 10/25/2017

Date of Issued Opinion: 02/01/2018

Docket Number: No. 16-1972

Decided: Decided by published opinion.

Case Alert Author: Emily Levy, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Michael S. Elkin, WINSTON & STRAWN LLP, New York, New York, for Appellants/Cross-Appellees. Michael J. Allan, STEPTOE & JOHNSON LLP, Washington, D.C., for Appellee/Cross-Appellant. ON BRIEF: Thomas P. Lane, New York, New York, Jennifer A. Golinveaux, Thomas J. Kearney, San Francisco, California, Steffen N. Johnson, Christopher E. Mills, WINSTON & STRAWN LLP, Washington, D.C.; Craig C. Reilly, Alexandria, Virginia, for Appellants/Cross-Appellees. William G. Pecau, John M. Caracappa, Jeffrey M. Theodore, STEPTOE & JOHNSON LLP, Washington, D.C.; Walter D. Kelly, Jr., HAUSFELD, LLP, Washington, D.C., for Appellee/Cross-Appellant. Seth D. Greenstein, CONSTANTINE CANNON LLP, Washington, D.C., for Amici Consumer Technology Association and Computer & Communications Industry Association. Jonathan Band, JONATHAN BAND PLLC, Washington, D.C., for Amici American Council on Education, Association of American Universities, Educause, American Library Association, Association of Research Libraries, Association of College and Research Libraries, American Indian Higher Education Consortium, APPA: Leadership in Educational Facilities, National Association of College and University Business Officers, Thurgood Marshall College Fund, Association of Catholic Colleges and Universities, and National Association of Independent Colleges and Universities. David E. Weslow, Brett A. Shumate, Ari S. Meltzer, WILEY REIN LLP, Washington, D.C., for Amicus United States Telecom Association. Ross J. Lieberman, AMERICAN CABLE ASSOCIATION, Washington, D.C.; John D. Seiver, Ronald G. London, William W. Hellmuth, DAVIS WRIGHT TREMAINE LLP, Washington, D.C., for Amicus American Cable Association. Andrew L. Deutsch, DLA PIPER LLP, New York, New York, for Amicus Internet Commerce Coalition. Mitchell L. Stoltz, ELECTRONIC FRONTIER FOUNDATION, San Francisco, California; Charles Duan, PUBLIC KNOWLEDGE, Washington, D.C., for Amici Public Knowledge, Electronic Frontier Foundation, and Center for Democracy & Technology. George M. Borkowski, RECORDING INDUSTRY ASSOCIATION OF AMERICA, INC., Washington, D.C.; 5 Kannon K. Shanmugam, Thomas G. Hentoff, Connor S. Sullivan, WILLIAMS & CONNOLLY LLP, Washington, D.C., for Amicus Recording Industry Association of America, Inc. Linda M. Burrow, Eric S. Pettit, Albert Giang, Alison Mackenzie, CALDWELL LESLIE & PROCTOR, PC, Los Angeles, California, for Amicus The Copyright Alliance. Erich C. Carey, Vice President & Senior Counsel, Litigation, NATIONAL MUSIC PUBLISHERS' ASSOCIATION, Washington, D.C., for Amicus National Music Publishers' Association. Jacqueline C. Charlesworth, New York, New York, for Amici National Music Publishers' Association and Nashville Songwriters Association International. R. Reeves Anderson, Denver, Colorado, Elisabeth S. Theodore, Washington, D.C., John C. Ulin, ARNOLD & PORTER KAYE SCHOLER LLP, Los Angeles, California, for Amicus Motion Picture Association of America, Inc.

Author of Opinion: Judge Motz; Judge Wynn and Senior Circuit Judge Shedd joined

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 03/12/2018 10:06 AM     4th Circuit     Comments (0)  

March 8, 2018
  In re A Community Voice v. EPA
Headline: The Ninth Circuit Panel granted the writ of mandamus sought by environmental groups to compel the U.S. Environmental Protection Agency (EPA) to update lead-based paint and dust-lead standards when the EPA had failed to act after granting a rulemaking petition to the Petitioners eight years earlier.

Areas of Law: Administrative Law

Issues Presented:
(1) Whether the EPA had a duty to take final action on the environmental group's 2009 rulemaking petition under the Toxic Substances Control Act or the Administrative Procedure Act.

(2) Whether the EPA's failure to act on the 2009 rulemaking petition constitutes an unreasonable delay under the TRAC factors.

Brief Summary: In 1992 Congress enacted legislation seeking to eventually eliminate the risk of lead-based paint and dust-lead poisoning in children. Subsequently the EPA issued standards for acceptable levels of lead in 2001. Since 2001, scientific evidence has established that the EPA standards were not stringent enough to adequately protect children. In 2009, the Petitioners filed a rulemaking petition with the EPA to tighten the standards based on established scientific evidence. The EPA granted the rulemaking petition two months later.

After years of inaction on Petitioners rulemaking petition the Petitioners brought this action seeking a writ of mandamus, based on unreasonable delay, to compel the FDA to issue a rule updating the lead-based paint and dust-lead standards. Relying upon statutory construction, case precedent, and public policy, the panel granted the writ of mandamus, holding that the EPA had a duty to act on the Petitioners rulemaking petition and, moreover, that eight years of inaction constituted unreasonable delay.

Significance: Holding the EPA had a duty to act, the panel engaged in statutory interpretation using legislative intent, supported by the public policy of protecting children from the dangers of lead-based paint and dust-lead. The panel had only applied the TRAC factors in three other cases. By applying and distinguishing these cases, the panel held that the EPA's failure to act in eight years was an unreasonable delay.

Extended Summary: In 1992 Congress enacted the Paint Hazard Act seeking to eventually eliminate the risk of lead poisoning in children from structures built before lead-based paint was banned from consumer use in 1978. Congress empowered the EPA with sole authority over dust-lead hazards and divided the authority over lead-based paint between the EPA and the Department of Housing and Urban Development (HUD). HUD was granted jurisdiction over public housing and the EPA retained jurisdiction over all other locations. Under the Act, each agency was tasked to establish an initial standard and to adjust the standard as needed in the future.

The EPA was given eighteen months to issue its initial standard, but the EPA did not finalize a standard until 2001. Over the years, scientific research has developed a deeper understanding of the risks associated with lead-based paint and dust-lead hazards. A diverse group of organizations, including the Petitioners in this case, concluded the EPA lead-based paint and dust-lead standards were not stringent enough to provide the protection to children mandated by the Paint Hazard Act. The EPA has not disputed the scientific record, which shows the insufficiency of its present standard for achieving Congress's purpose.

Acting on this concern in 2009 the Petitioners filed an administrative petition with the EPA requesting the EPA use its rulemaking authority to tighten the lead-based paint and dust-lead standards. Approximately two months later, the EPA granted Petitioner's request; however, the EPA made no comment regarding the outcome or timing of further action.

In August 2016 the Petitioners filed this mandamus petition based upon unreasonable delay seeking to compel the EPA to issue new and more stringent standards in the near future. The EPA responded the mandamus was not necessary because a final rule could be issued in 2023. In the Ninth Circuit a mandamus petition based on unreasonable delay will be granted based upon the application of the TRAC factors.

Before reaching the issue of unreasonable delay the panel needed to establish that the EPA was under a duty to act. The panel held the EPA had a duty to act under both the Toxic Substances Control Act ("TSCA") and the Administrative Procedure Act ("APA"). The panel concluded the intent of Congress in the 1992 Paint Hazard Act was to eliminate the risk of lead-based paint in all housing as quickly as possible and the TSCA made clear that this was an ongoing duty. The panel also held the EPA had a duty to act under APA because the APA requires a government agency to "conclude a matter presented to it" within a reasonable time and the Petitioners 2009 rulemaking petition was such a matter.

In addition to finding a statutory duty for the EPA to act, the panel held the EPA was under a duty to act as a matter of public policy. The EPA argued the mandamus cannot be issued because the FDA fulfilled its duty when the rulemaking petition was granted in 2009. The panel rejected the EPA's argument and the panel held the EPA must issue the rule as a matter of public policy. Otherwise, the EPA could avoid judicial review simply by granting a rulemaking petition and taking no further action.

The panel held the EPA had engaged in unreasonable delay by applying the six TRAC factors. The panel ruled that the most important factor is the "rule of reason." The panel went on to apply and distinguish the three other unreasonable delay mandamus cases and held the EPA's failure to establish a reasonable timeline to promulgate rules under its duty constituted unreasonable delay.

The panel granted the Petitioners writ of mandamus and ordered the EPA to issue a proposed rule within ninety days of a final judgment and to issue the final rule within one year of the issuance of the proposed rule.

Dissent: Judge Smith believes the majority erred when they looked to the purpose and findings of Congress to conclude that the EPA was under a duty to update the initial 2001 standard. Alternatively, Justice Smith looked to the plain language of the statutes and concluded any future action by the EPA was purely discretionary under the TSCA because Congress indicated the regulation "may" be amended.

To read the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...17/12/27/16-72816.pdf

Panel: Mary M. Schroeder and N. Randy Smith, Circuit Judges, and Lawrence L. Piersol, District Judge

Argument Date: June 12, 2017

Date of Issued Opinion: December 27, 2017

Docket Number: 16-72816

Decided: Granted writ of mandamus.

Case Alert Author: David T. Lawlor

Counsel:
Hannah Chang (argued), Eve C. Gartner, and Jonathan J. Smith, Earthjustice, New York, New York, for Petitioners.
Rochelle L. Russell (argued), Trial Attorney, Environment Defense Section; John C. Cruden, Assistant Attorney General, Environment & Natural Resources Division; United States Department of Justice, San Francisco, California; for Respondent.

Author of Opinion
: Judge Mary M. Schroeder

Author of Dissent: Judge N.R. Smith

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 03/08/2018 01:48 PM     9th Circuit     Comments (0)  

March 5, 2018
  Liberty Mutual Fire Ins. V. EZ-FLO INT'L
Headline: The panel concluded that "100 or more persons" for the purposes of meeting the Class Action Fairness Act's numerosity requirement is synonymous with named plaintiffs.

Areas of Law: Civil Procedure

Issues Presented: The panel considered what qualified as a mass action under the Class Action Fairness Act ("CAFA") more specifically it considered how the term "persons" should be construed as under the "100 or more persons" requirement. This case presents the narrow question of whether a lawsuit filed by 26 insurance companies (the Plaintiffs), in their capacity as subrogees of 145 insured homeowners, qualifies as a mass action under the Class Action Fairness Act ("CAFA"). More specifically, whether the "100 or more persons" numerosity requirement includes the 145 insured homeowner subrogees who were not named plaintiffs.

Brief Summary
: A group of twenty-six insurance companies had made payments to 145 insured policy holders for damages allegedly caused by a defect in defendant's product. The insurance companies brought suit in state court against EZ-FLO as subrogees of those insured policy holders seeking over $5 million in damages allegedly suffered by the 145 insureds. EZ-FLOR petitioned to remove the case to federal court under CAFA. CAFA provides for diversity jurisdiction over mass actions comprising "100 or more persons" where the aggregate amount in controversy exceeds $5,000,000.00, and requires only minimal diversity. Upon removal to Plaintiffs moved to remand the case back to state court due to lack of jurisdiction and the district court granted the motion. The panel affirmed the decision of the district court holding that the requirement of "100 or more persons" was not satisfied under CAFA holding that CAFA "100 or more persons" numerosity requirement refers to named plaintiffs and not the subrogated policy holders whose insurance claims have been paid.

Significance: The panel concluded that under CAFA, in order to remove a case to federal court, there must be 100 or more "named plaintiffs;" thus, twenty-six insurance companies, who as subrogees of the insured policyholders were the only named, plaintiffs do not qualify.

Extended Summary: Under CAFA, a defendant in a civil suit may remove a "mass action" from state to federal court if the aggregate amount in controversy exceeds $5,000,000. 28 U.S.C. § 1332(d)(2), (11). A "mass action" is defined as "any civil action . . . in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions of law or fact." Id. § 1332(d)(11)(B)(i).

EZ-FLO manufactured allegedly faulty supply lines for plumbing whose plastic nuts were defective and would allow leaks which resulted in damages to those insured by the plaintiffs. The plaintiffs, having paid the claims of the insureds, brought suit against EZ-FLO as subrogees of their 145 policy holders alleging damages of over $5,000,000.00, thus satisfying the aggregate damages requirement of CAFA, and arguably satisfying the "100 or more persons" requirement as well. EZ-FLO petitioned for removal. In response the plaintiffs filed a motion to remand the action back to state court which the district court granted.

On appeal, EZ-FLO argued that those insured by the plaintiffs should be considered plaintiffs for the purposes of CAFA's "100 or more persons" jurisdictional requirement because the insurance companies were essentially standing in the shoes of the insureds. EZ-FLO was effectively asking the panel to apply a real-party-in-interest test to ascertain standing for the subrogees.

The panel reviewed the question de novo and turned to Mississippi ex rel. Hood v. AU Optronics Corp., 134 S. Ct. 736 (2014) for guidance. In Hood, the State of Mississippi brought suit against a manufacturer of liquid crystal displays for violation of state antitrust and consumer-protection statutes. In bringing the case ex rel., the State sought restitution not only for itself, but for its citizens who had purchased the defective displays. The defendants in Hood removed the case, under CAFA, arguing that the citizens should be counted towards the "100 or more" requirement for mass action. In a unanimous decision, the Supreme Court held that it was not a mass action because "a 'mass action' must involve monetary claims brought by 100 or more persons who propose to try those claims jointly as named plaintiffs." Id. at 739. In so holding, the Court rejected the defendant's arguments that real parties in interest should count for the purpose of ascertaining CAFA jurisdiction. Thus, the Supreme Court concluded that the word "persons" in the phrase "100 or more persons" is synonymous with named plaintiffs. The panel also noted that the Supreme Court also interpreted the word "persons" in § 1332(d)(11)(B)(i) in the light of similar language in Rule 20 of the Federal Rules of Civil Procedure, which governs party joinder, because § 1332(d)(11)(B)(i) "use[s] the terms 'persons' and 'plaintiffs' just as they are used in . . . Rule . . . 20"

The panel then held that the insured policy holders were not "named plaintiffs" because they did not commence the lawsuit. The panel also rejected defendants argument that the insureds were plaintiffs because the insurance companies stand in the shoes of the insureds as subrogees noting that this is common in subrogation suits. Finally, the panel noted that, even if Hood had not forbidden the use of a real-party-in-interest test, the insureds would likely not qualify as real parties in interest here. Because the insurance companies, as subrogee, has paid the entire loss suffered by the insured, it is the only real party in interest.

To read the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...17/12/14/17-56523.pdf
Panel: Stephen Reinhardt, Ronald Lee Gilman, and Kim McLane Wardlaw, Circuit Judges

Argument Date: November 2, 2015

Date of Issued Opinion: December 14, 2017

Docket Number: 17-56523

Decided: Affirmed the district court's grant of motion to remand due to lack of jurisdiction over the mass action lawsuit filed by plaintiffs due to lack of numerosity under CAFA, 28 USCS § 1332.

Case Alert Author: Alexander Baello

Counsel:
Michael J. Hassen (argued) and Christopher H. Doyle, Jeffer Mangels Butler & Mitchell LLP, San Francisco, California; Michael Phillips, EZ-FLO International Inc., Ontario, California; for Defendant-Appellant.

Timothy E. Cary (argued), Law Offices of Robert A. Stutman P.C., Corona, California; Hal J. Kleinman, Law Offices of Robert A. Stutman P.C., Fort Washington, Pennsylvania; for Plaintiffs-Appellees.
Author of Opinion: Judge Ronald Lee Gilman

Circuit: Ninth Circuit

Case Alert Supervisor: Glenn Koppel

    Posted By: Glenn Koppel @ 03/05/2018 06:59 PM     9th Circuit     Comments (0)  

  United States v. Diaz
Headline: Ninth Circuit panel holds medical expert's testimony did not constitute a legal conclusion in violation of Federal Rules of Evidence 702 and 704 but rather provided the jury with professional opinions regarding the standard of care in the medical community.

Areas of Law: Evidence; Expert Witness Testimony

Issues Presented: Whether a medical expert's opinions that a physician prescribed controlled substances outside the usual course of medical practice and without a legitimate purpose were legal conclusions in violation of Federal Rules of Evidence 702 and 704.

Brief Summary: The Ninth Circuit panel held that terms used by an expert witness did not have a specialized meaning in the law and were not an attempt to instruct the jury on the law or on how to apply the law to the facts of the case. Therefore, his testimony was not an impermissible legal conclusion.

Significance: This case clarifies that expert testimony is to be admitted so long as the expert does not substitute her or his judgment for the jury's. Where a term does not have a separate, distinct and specialized meaning in the law, an expert can resort to the language in a statute when rendering an opinion.

Extended Summary: Dr. Julio Diaz ("Diaz") operated a clinic in Santa Barbara, California, where he offered pain management and treatment. Between 2008 and 2011, he wrote more than 50,000 prescriptions and prescribed more than 5 million opiate pills. The government indicted Diaz for multiple counts of distributing controlled prescription drugs in violation of 21 U.S.C. § 841(a)(1).

To prevail at trial, the government had to prove: (1) that the practitioner distributed controlled substances, (2) that the distribution of those controlled substances was outside the usual course of professional practice and without a legitimate medical purpose, and (3) that the practitioner acted with the intent to distribute the drugs and with intent to distribute them outside the course of professional practice. United States v. Feingold, 454 F.3d 1001, 1008 (9th Cir. 2006) (emphasis omitted).

At trial, the government's expert witness, Dr. Rick Chavez ("Chavez"), testified without objection that Diaz's prescriptions were written "outside the usual course of medical practice" and "without a legitimate purpose." The jury convicted Diaz on all counts. Diaz appealed on the grounds that the admission of the expert's testimony was plain error.

The Ninth Circuit panel affirmed the conviction. It began its opinion with a discussion of the Federal Rules of Evidence ("FRE") and earlier court precedent on the admissibility of expert testimony. FRE 702(a) requires that expert testimony "help the trier of fact to understand the evidence or to determine a fact in issue." FRE 704(a) clarifies that "[a]n opinion is not objectionable just because it embraces an ultimate issue." After the adoption of Rule 704, the Ninth Circuit held that the common law posed no barrier to testimony by a physician "that the appellant was not prescribing drugs in the usual course of a professional practice and for a legitimate medical purpose." United States v. Davis, 564 F.2d 840, 845 (9th Cir. 1977), cert denied, 434 U.S. 1015 (1978). However, "an expert witness cannot give an opinion as to her legal conclusion, i.e., an opinion on an ultimate issue of law." Hangarter v. Provident Life & Accident Ins. Co., 373 F.3d 998, 1016 (9th Cir. 2004) (emphasis in original).

Diaz argued that Chavez impermissibly testified about whether Diaz distributed controlled substances outside the course of professional practice. The prosecutor drew Chavez's attention to prescriptions that Diaz wrote for particular patients and asked whether the "prescriptions were issued outside the usual course of medical practice" and whether "the drugs [were] given to [the patients] for a legitimate medical purpose." Chavez answered "yes" to the first question, and "no" to the second. Diaz argued that the prosecutor's questions used the language in § 841(a)(1); therefore, the responses by Chavez substituted his judgment for the jury's.

Both Diaz and the government relied on the Ninth Circuit's decision in United States v. Moran, which held that an expert witness's opinion that a transaction was a "sham" was admissible when, under the judge's instructions, even if the transactions were a sham, the jury would still have to draw its own inference from that predicate testimony to answer the ultimate fact question of whether income tax was owed. 493 F.3d 1002, 1008 (9th Cir. 2007).

Diaz contended this holding means that when an expert witness opinion encompasses the entirety of an element of a crime, it reaches "an ultimate issue of law" and therefore is inadmissible. The government understood Moran to mean that an expert witness may not offer an opinion on the defendant's guilt or innocence. The Ninth Circuit panel found the holding in Moran to be too narrow to determine the issue in this case.

The Ninth Circuit panel then looked to decisions of other circuits. The Fourth Circuit held that the district court did not plainly err by allowing the jury to consider expert opinion testimony that a defendant's treatment of his patients was "outside the usual course of medical practice." United States v. McIver, 470 F.3d 550, 561-62 (4th Cir. 2006). The Fourth Circuit reasoned that the phrase "outside the usual course of medical practice" was not so specialized as to render the expert opinion testimony inadmissible because there are only so many ways of conveying the impression of a physician abandoning his professional role. Id. at 560-562. Likewise, the Sixth Circuit held in United States v. Volkam that the district court did not abuse its discretion by overruling an objection that a physician defendant's prescriptions "were not written for any legitimate medical purpose." 797 F.3d 377, 388-389 (6th Cir. 2015). The Sixth Circuit came to this reasoning on the same grounds as the Fourth Circuit.

The Ninth Circuit panel found these cases persuasive and on point. It reasoned that Chavez's testimony was helpful because a lay jury would not have the requisite knowledge to evaluate whether the dosage, mix, and course of narcotics prescribed by Diaz were medically appropriate for the conditions alleged in the complaint. Although the phrases Chaves used appear in § 841(a)(1), these phrases were used in their ordinary, everyday sense and did not have a separate, distinct, and specialized legal significance.

For these reasons, Chavez expert testimony did not violate FRE 702 and 704, and the district court did not plainly err by admitting the expert testimony into evidence.

To read the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...17/12/06/15-50538.pdf

Panel: Andrew J. Kleinfeld, Susan P. Graber, and Morgan Christen, Circuit Judges

Argument Date: October 6, 2017

Date of Opinion: December 6, 2017

Docket Number: No. 15-50538

Decided: Affirmed.

Case Alert Author: Blaine Brown

Counsel: Davina T. Chen (argued), Glendale, California, for Defendant-Appellant; Ann Luotto Wolf (argued), Assistant United States Attorney; Dennise D. Willett, Chief, Santa Ana Branch Office; United States Attorney's Office, Los Angeles, California; for Plaintiff-Appellee.

Author of Opinion: Circuit Judge Christen

Circuit: Ninth Circuit

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 03/05/2018 04:43 PM     9th Circuit     Comments (0)  

  Smith v. City of Santa Clara
Headline: Ninth Circuit panel holds that a warrantless probation search that affects the rights of a third party co-occupant was reasonable under the totality of the circumstances test when the probationer had been convicted of serious crimes, was suspected of committing another violent felony, and was still at large.

Areas of Law: Civil Rights; Fourth Amendment

Issue Presented: Whether the warrantless search of a residence was reasonable under the totality of the circumstances when police officers had probable cause to believe the residence was the home of an at-large probationer who recently participated in a violent felony, but a present co-occupant objected to the search.

Brief Summary: The Ninth Circuit panel affirmed a jury verdict in favor of the City of Santa Clara and several police officers ("the officers"), finding that the officers did not violate Plaintiff-Appellant Josephine Smith's ("Josephine") constitutional rights under 42 U.S.C. § 1983 and California's Bane Act, Cal. Civ. Code § 52.1. Josephine lived in a duplex with her minor granddaughter when the officers searched Josephine's home over her objections. The officers were searching for Justine Smith ("Justine"), Josephine's daughter. The officers had probable cause to believe that Justine, a probationer, was involved in a recent automobile theft and stabbing. The Ninth Circuit panel applied a totality of the circumstances approach in finding the search was reasonable. The panel balanced the degree to which the search intruded upon Josephine's privacy interest against the degree to which the search was needed for the promotion of a legitimate governmental interest. Specifically, the panel weighed the expectation of privacy Josephine had in her home with the need to protect the public from Justine causing further harm. The Court concluded that the warrantless search was reasonable under the totality of the circumstances because Justine posed a substantial threat to the public.

Significance: The Ninth Circuit panel held that probation searches involving co-occupants are not analyzed as consent searches, but rather under a totality of the circumstances approach. It concluded that when police have probable cause to believe a person on probation for a serious felony had recently participated in a violent felony and was still at large, a warrantless search of a co-occupant's home was reasonable and did not violate the co-occupant's constitutional rights. The Court stressed that its conclusion was limited to the facts, and it expressed no views as to how it would rule if the probationer had committed neither violent nor serious crimes and was not suspected of involvement in a subsequent crime.

Extended Summary: Justine was on probation in connection with felony convictions for grand theft and forgery. As a condition of probation, she agreed to warrantless searches of her home. Justine gave the probation department a home address of a duplex that was also the home of her mother, Josephine. Other records also linked Justine to the address. Subsequently, the officers found evidence connecting Justine to a car theft and stabbing. They went to the address to conduct a probation search. Josephine was present when the officers arrived. She refused to consent to a search of the premises because the officers did not have a search warrant. Over Josephine's objections, they conducted a search but did not find Justine.
Josephine later sued the officers on her own behalf and on behalf of her minor granddaughter under 42 U.S.C. § 1983 and California's Bane Act, Cal. Civ. Code § 52.1. She alleged that the officers violated their Fourth Amendment right to be free from unreasonable searches and seizures because the officers searched their home without a warrant and without their consent. The district court granted the officers' motion for summary judgment on Josephine's § 1983 claim on the ground of qualified immunity but denied the motion on the Bane Act claim because qualified immunity of the kind applied to § 1983 claims does not apply in Bane Act suits. At trial, the district court judge refused to instruct the jury that the officers' needed her consent before searching her home and that Justine's consent through her probation was not sufficient to make the search reasonable. The district court also denied Josephine's motion for judgment as a matter of law. It rejected Josephine's argument that under Georgia v. Randolph, 547 U.S. 103 (2006), the search of her home was unreasonable because she refused to provide consent and the officers did not have a warrant. The jury returned a verdict for the officers and this appeal followed.

The Ninth Circuit panel concluded that the district court did not err in denying Josephine's motion for judgment as a matter of law or in instructing the jury and affirmed. The panel began its opinion with a discussion of Supreme Court search and seizure precedents. In United States v. Matlock, 415 U.S. 164 (1974), the Supreme Court held that police may perform a warrantless search of a home when they have obtained voluntary consent from the occupant of a home, and the search will be valid against an absent, nonconsenting person so long as the police have the co-occupant's consent. In Griffin v. Wisconsin, 483 U.S. 868, 875 (1987), the Supreme Court created another exception for warrantless searches of people released on probation or parole, finding that such searches give rise to "special needs" that allows "a degree of impingement upon the privacy that would not be constitutional if applied to the public at large." Later, the Court found a warrantless search of a probationer's home was reasonable when conducted by a sheriff's deputy for the purpose of investigating a specific crime. Instead of using the special-needs rationale or consent line of cases, it examined whether the search "was reasonable under [the Court's] general Fourth Amendment approach of examining the totality of the circumstances, with the probation condition being a salient circumstance." United States v. Knights, 534 U.S. 112, 121 (2001). The Court in Knights used a balancing test to determine the reasonableness of the search: on the one hand, the degree to which the search intrudes upon a person's own privacy and, on the other, the degree to which the search is needed for the furtherance of a legitimate government interest, all while keeping in mind that the probation condition significantly diminished Knight's reasonable expectation of privacy. Id. at 118-20.

In the instant case, Josephine relied on the Supreme Court's decision in Georgia v. Randolph, 547 U.S. 103 (2006), in arguing the search of her home was unreasonable because she was physically present at the time and did not consent. However the Ninth Circuit panel found that Randolph was a consent case, not one involving a probation search. In a warrantless probation search the issue is whether a search that affects the rights of a third party was reasonable under the totality of the circumstances. This requires a court to balance the degree to which a warrantless search intrudes upon a third party's privacy interest against the degree to which a search is needed in furtherance of a legitimate governmental interest. A non-probationer has a higher expectation of privacy in her home than a probationer. However the panel explained that the governmental interest here was significantly great because the officers had probable cause to believe Justine had recently participated in an automobile theft and stabbing and was still at large. The warrantless search was justified because of the need to find Justine and protect the public. Thus, the heightened interest in locating Justine was sufficient to outweigh Josephine's privacy interest in the home she shared with Justine.

The panel stressed that its holding is limited to the facts where police had probable cause to believe that the probationer, who was on probation in connection with serious offenses, had just participated in a violent felony and was still at large. It expressed no view as to what it would decide in a case where the probationer's offenses were neither violent nor serious, and the person was not suspected of involvement in a subsequent offense.

To read the full opinion, please visit: http://cdn.ca9.uscourts.gov/da...17/11/30/14-15103.pdf

Panel: Mary M. Schroeder and Jacqueline H. Nguyen, Circuit Judges, and Lynn S. Adelman, District Judge.

Argument Date: February 12, 2016.

Date of Issued Opinion: November 30, 2017

Docket Number: 14-15103

Decided: Affirmed.

Case Alert Author: Demis Camacho

Counsel: Lauren R. Coatney (argued), Christine Peek, Matthew Schechter, and James McManis, McManis Faulkner, San Jose, California, for Plaintiffs-Appellants.

Sujata T. Reuter (argued) and Jon A. Heaberlin, Rankin Stock Heaberlin, Rankin Stock Heaberlin, San Jose, California, for Defendant-Appellee.

Author of Opinion: District Judge Lynn S. Adelman

Circuit: Ninth Circuit

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 03/05/2018 04:41 PM     9th Circuit     Comments (0)  

  Benjamin v. B&H Education, Inc.
Headline:
Ninth Circuit panel follows the "primary beneficiary test" in holding cosmetology school students are not employees under the Fair Labor Standards Act or under California and Nevada laws.

Areas of Law:
Labor Law, Fair Labor Standards Act

Issues Presented:
Whether cosmetology students are employees as defined by the Fair Labor Standards Act ("FLSA") or under California and Nevada laws, when they worked without pay in the course of their training.

Whether the district court abused its discretion by striking witness declarations pursuant to Rule 37(c)(1) of the Federal Rules of Civil Procedure ("FRCP") when the witnesses had not been listed as FRCP 26 requires.

Brief Summary:
The Ninth Circuit panel found that under either the FLSA or California and Nevada laws, cosmetology students were not employees of the school and thus not entitled to wages and other employee benefits for work performed during the course of their training. It applied the seven-factor "primary beneficiary test" to reach its decision. Because their work would qualify them to practice cosmetology, the students, not the school, were the primary beneficiaries of their labor. The Court also concluded that the students would not be employees under California and Nevada laws.

Significance:
Students at vocational schools who must complete clinical training are not employees and therefore do not enjoy the protections of the FLSA.

Extended Summary:
Plaintiffs Jacqueline Benjamin, Taiwo Koyejo and Bryan Gonzalez ("the students") enrolled at Marinello Schools of Beauty in California and Nevada. B&H Education, Inc., ("B&H") operates the schools. The schools provide classroom instruction and clinical experience for individuals wishing to learn cosmetology and hair styling. California and Nevada each license cosmetologists. License applicants are required to complete practical training that includes performing services on persons or mannequins. The students claimed B&H exploited them by not paying them for the services they performed, leaving them unsupervised, and by having them perform services that did not require special training. They alleged they are employees as defined by the FLSA and California and Nevada laws, and thus owed compensation for their work and money spent on supplies.

Both parties moved for summary judgment on the question whether the students were employees. The district court ordered stricken three declarations from individuals that the students had not disclosed as required by FRCP 26. It then found the students were not employees and granted B&H's summary judgment motion.

The Ninth Circuit panel began its opinion with a discussion of Walling v. Portland Terminal Co., 330 U.S. 148 (1947) ("Portland Terminal"). Portland Terminal involved trainees working alongside railroad workers. The trainees sought compensation for their work claiming to be employees under the FLSA. The Supreme Court held that because the railroad was providing training benefits that would qualify the trainees to serve and be compensated as employees, the trainees were the direct beneficiaries of the program and thus not employees. The trainees were comparable to students in an educational setting: "had the trainees taken a course in railroading in a public or private vocational school, wholly disassociated from the railroad, it could not reasonably be suggested that they were employees of the school within the meaning of the [FLSA]." Id. at 152-53.

After discussing a number of post-Portland Terminal decisions and a Department of Labor informal guidance opinion, the Ninth Circuit panel adopted the "primary beneficiary test" set out in Glatt v. Fox Searchlight Pictures, Inc. (791 F.3d 376 (2d Cir. 2015), amended and superseded by 811 F.3d 528 (2d Cir. 2016), for deciding whether an intern is an employee for FLSA purposes. The primary beneficiary test requires a weighing and balancing of seven non-exhaustive factors. The factors are: (1) the extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee - and vice versa; (2) the extent to which the internship provides training that would be similar to that which would be given an educational environment, including the clinical and other hands-on training provided by educational institutions; (3) the extent to which the internship is tied to the intern's formal education program by integrated coursework or the receipt of academic credit; (4) the extent to which the internship accommodates the intern's academic commitments by corresponding to the academic calendar; (5) the extent to which the internship's duration is limited to the period in which the internship provides the intern with beneficial learning; (6) the extent to which the intern's work compliments, rather than displaces, the work of paid employees while providing significant educational benefits to the intern; and (7) the extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

When the Ninth Circuit panel applied the factors, it held the students were not employees. Under the first factor, the students enrolled with the knowledge they would not receive compensation during the program. Regarding factors two and three, the students were given hands-on training in the clinic and received credit for the hours they worked. The clinical work corresponded with the students' academic commitments under the fourth factor because the students needed a certain number of hours to be eligible to sit for the licensing exam. As to the fifth factor, there was nothing stated in the facts to suggest the students were required to stay in the program longer than necessary to complete their hour requirements to sit for the licensing exam. Under the sixth factor, the students did not displace the work of the employees at the school. Lastly, under the seventh factor, the students had no expectation of being employed by the B&H schools upon graduation.

For these reasons, the Ninth Circuit panel affirmed the district court's decision that the students were not employees under the FLSA. After a brief discussion of California and Nevada state law, the Court concluded the students would not be considered employees in those states either.

Finally, the Ninth Circuit panel held the district court did not abuse its discretion in excluding three witness declarations pursuant to FRCP 37 (c)(1) because these individuals were not listed as required by FRCP 26. The panel noted that even if the stricken declarations had been considered, they would have made no material difference in the district court's decision.

To read the full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...17/12/19/15-17147.pdf

Panel: Mary M. Schroeder and Richard C. Tallman, Circuit Judges, and Robert H. Whaley, District Judge.

Argued: September 11, 2017

Date of Issued Opinion: December 19, 2017

Author of Opinion: Judge Schroeder

Docket Number: 15-17147

Decided: Affirmed

Case Alert Author: Kianna Woods

Counsel: Bryan J. Schwartz (argued) and Logan Talbot, Bryan Schwartz Law, Oakland, California; Leon Greenberg and Dana Sniegocki, Law Office of Leon Greenberg, Las Vegas, Nevada; Chaya M. Mandelbaum and Michelle G. Lee, Rudy Exelrod Zieff & Lowe LLP, San Francisco, California; for Plaintiffs-Appellants.

Robert Lane Morris (argued), Soltman Levitt Flaherty & Wattles LLP, Thousand Oaks, California, for Defendants-Appellees.


Circuit: Ninth Circuit

Case Alert Supervisor: Philip L. Merkel

    Posted By: Glenn Koppel @ 03/05/2018 04:37 PM     9th Circuit     Comments (0)  

February 28, 2018
  Fox News Network, LLC v. TVEyes, Inc.- Second Circuit
Headline: Second Circuit Bans Media Company TVEyes, Inc.'s Re-Distribution of Fox News Network's Copyrighted Programming, Reversing District Court Injunction in Part

Area of Law: Copyright Infringement

Issue(s) Presented: Whether a media company can archive and re-distribute a network's copyright-protected programming to paying users without permission and without sharing the revenue under the fair use doctrine.

Brief Summary: TVEyes, Inc. is a media company that records audiovisual content from television and radio channels and imports that content into a database, which its clients can access for $500 per month. TVEyes provided access to Fox News Network (Fox) copyright-protected content through that program without Fox's consent. Fox sued TVEyes for copyright infringement in the United States District Court for the Southern District of New York and TVEyes asserted a defense under the fair use doctrine. The District Court issued an injunction limiting aspects of TVEyes's service, but found other important functions were permissible fair use. On appeal, the Second Circuit holds that TVEyes's functions transcend fair use and constitute copyright infringement.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...546508c5ba9/1/hilite/

Extended Summary: TVEyes, Inc. (TVEyes) is a media company whose clients pay a monthly membership fee which allows them to find, view, download, archive, and share via email, media content from various outlets, including Fox News Network, LLC (Fox). Specifically, TVEyes records and compiles Fox television broadcasts including copyright-protected material and allows clients to further search for and watch up to ten-minute video clips of the selected segments that are specifically tailored to the interest of the clients. Fox claimed that, at some point, TVEyes attempted to procure a license agreement for the permissible use of the Fox programming, however, Fox never gave TVEyes permission to use its content. Nevertheless, TVEyes continued to supply Fox programming to its clients.

Fox sued TVEyes in the United States District Court for the Southern District of New York for copyright infringement related to 19 specific copyrighted Fox broadcasts. TVEyes argued that its use of the Fox content was protected by the fair use doctrine codified as 17 U.S.C. § 107. Under the fair use doctrine, it is permissible to use copyrighted work for the purpose of "criticism, comment, news reporting, teaching ... scholarship, or research."

The district court found that some functions of TVEyes's service, those enabling clients to search, watch and archive videos, were permissible as fair use within the meaning of the doctrine. However, the lower court found that functions enabling clients to download, email videos, and watch them after searching them by date, time, and channel, exceeded the terms of the doctrine. Accordingly, the district court dismissed Fox's challenges to what it calls certain "important functions" of TVEyes's services, but found TVEyes liable to Fox for copyright infringement on account of the impermissible "other functions" of that service. The Court ordered a permanent injunction prohibiting some of TVEyes's download and search functions and imposed restrictions on TVEyes's share functions. On appeal to the Second Circuit, Fox contended that TVEyes's redistribution functions exceed the scope of the fair use protective doctrine and should be prohibited.

Under a fair use analysis, the Second Circuit considers four factors laid out in the statute: (1) the character of the use; (2) the nature of the copyrighted work; (3) the proportion of the copyrighted work as a whole versus the amount used; and (4) the effect of the use in relation to the value and potential of the copyrighted work. No one factor of the fair use analysis is dispositive. In this case, the Second Circuit found that the character of the use weighed "slightly" in favor of fair use because TVEyes's clients access Fox for the same purpose as authorized Fox viewers, to learn reported information. The court did not assign any weight to the second factor (the nature of the copyrighted work), reasoning that it "has rarely played a significant role in the determination of a fair use dispute.

The court found the third factor weighed heavily in Fox's favor, noting that TVEyes makes "virtually the entirety of the Fox programming" available, and that "a finding of fair use is [less] likely ... when the copying is extensive, or encompasses the most important parts of the original." Lastly, the Court considered the effect of the use on the value of the copyrighted work, what it considered "undoubtedly the single most important element of fair use." On this fourth factor, the court found that by selling Fox's content without Fox's consent, TVEyes deprives Fox of its entitled revenue as copyright holder.

Weighing the four factors, the Second Circuit found TVEyes's service is not justifiable fair use and that it should not be able to further profit unlawfully from Fox's copyrighted content without payment or license. Accordingly, the court reversed the lower court to the extent it held TVEyes's product was fair use and remanded to the district court to revise the injunction to further limit TVEyes's clients access to and use of Fox's content. In a concurring opinion, District Judge Kaplan concurs with the majority's holding, but disagrees with the statement in the majority opinion, not material to the outcome of the case, that TVEyes "watch" feature is "somewhat transformative."

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...546508c5ba9/1/hilite/

Panel: Circuit Judges Newman and Jacobs; District Judge Kaplan

Argument Date: 03/07/2017

Date of Issued Opinion: 02/27/2018

Docket Number: No. 15 - 3885(L)

Decided: Reversed and Remanded in Part and Affirmed in Part.

Case Alert Author: Alissa Katz

Counsel: Dale M. Cendali (and Joshua L. Simmons on the brief), Kirkland & Ellis LLP, for Plaintiff-Appellee-Cross-Appellant Fox News Network, LLC.; Kathleen M. Sullivan (and Thomas C. Rubin, Todd Anten, and Jessica A. Rose on the brief), Quinn Emanuel Urquhart & Sullivan, LLP, for Defendant- Appellant-Cross-Appellee TYVEyes, Inc.

Author of Opinion: Judge Jacobs; District Court Judge Kaplan (separate concurrence)

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Elyse Diamond

    Posted By: Elyse Diamond @ 02/28/2018 09:12 AM     2nd Circuit     Comments (0)  

February 26, 2018
  Zarda v. Altitude Express
Headline: Second Circuit, in En Banc Decision, Holds that Title VII Prohibits Sexual Orientation Discrimination

Area of Law: Employment Discrimination

Issue Presented: Whether Title VII's prohibition of employment discrimination based on "sex" includes discrimination based on sexual orientation

Brief Summary: Donald Zarda sued his employer under Title VII, alleging that he was fired after telling a client that he was gay. At the time of the lawsuit, the Second Circuit had held that sexual orientation discrimination claims were not cognizable under Title VII (which prohibits discrimination based on sex, but does not mention sexual orientation), and Zarda's Title VII claim was dismissed on that basis. After that dismissal, the EEOC held that Title VII should cover sexual orientation claims, and the Seventh Circuit followed suit. The Second Circuit went en banc to reconsider Zarda's claim and held that Title VII should be interpreted as prohibiting sexual orientation discrimination, explaining that such discrimination is inherently "because of sex," is based on sex stereotypes, and constitutes a form of associational discrimination. The court remanded Zarda's claim for further proceedings, and overruled its prior precedents. To read the whole opinion, please visit http://www.ca2.uscourts.gov/de...ea7c8ab8a7e/1/hilite/

Significance: The Second Circuit is now one of two circuits holding that Title VII prohibits discrimination on the basis of sexual orientation.

Extended Summary: In 2010, Donald Zarda was working as a skydiving instructor for Altitude Express. As part of his job, Zarda participated in "tandem skydives" where he and clients would be physically strapped together. When paired with a woman, Zarda would sometimes disclose that he was gay in order to preempt concerns about sexual attraction. One such client alleged that Zarda "inappropriately touched her and disclosed his sexual orientation to excuse his behavior." Shortly thereafter, Zarda was fired.

Zarda filed a timely charge of discrimination with the EEOC and in September 2010 brought a lawsuit alleging sex discrimination in violation of Title VII and sexual orientation discrimination in violation of New York State law. Defendants moved for summary judgment on the Title VII claim, arguing that it was essentially a sexual orientation claim, and that Title VII only covered sex discrimination, not sexual orientation discrimination. The United States District Court for the Eastern District of New York granted summary judgment on that basis, and the Second Circuit affirmed under existing precedent.

The Second Circuit subsequently voted to go en banc to reconsider whether Title VII's prohibition of discrimination based on sex includes sexual orientation. The majority concluded that it did, while three dissents were also filed.

The majority opinion, authored by Judge Katzmann (and joined in full by four judges, and joined in part by four more), gave several arguments for why sexual orientation should be included in Title VII's prohibition of discrimination based on sex. First, the court looked to the text of Title VII, and held that "the most natural reading of the statute's prohibition on discrimination 'because of...sex' is that it extends to sexual orientation discrimination because sex is necessarily a factor in sexual orientation." Indeed, the court explained, sexual orientation is a function of both a person's own sex and the sex of those to whom he or she is attracted.

Second, the court explained that this statutory reading was reinforced "by considering the question of sex stereotyping because sexual orientation discrimination is predicated on assumptions about how persons of a certain sex can or should be." In this way, the court explained, sexual orientation is a subset of sex discrimination, and is "invariably rooted in stereotypes about men and women."

Third, the court concluded that sexual orientation discrimination is a form of associational discrimination--i.e., punishing employees for their relationships with people of the same sex, even though they would not be punished for their opposite-sex associations. The court explained that in the context of race, employers are prohibited from punishing employees for their interracial relationships. "[W]e now hold that the prohibition on associational discrimination applies with equal force to all the classes protected by Title VII, including sex," the court ruled, stating that sexual orientation discrimination is "no less repugnant to Title VII than anti-miscegenation statutes."

For these reasons, the court concluded that Zanda's claim could go forward, and overturned prior contrary Second Circuit precedents--namely, Simonton v. Runyon, 232 F.3d 33 (2d Cir. 2000) and Dawson v. Bumble & Bumble, 398 F.3d 211 (2d Cir. 2005).

Panel: En Banc decision; with the following 13 judges hearing the case: Katzmann, Jacobs, Cabranes, Pooler, Sack, Raggi, Hall, Livingston, Lynch, Chin, Lohier, Carney, and Droney

Argument Date: 09/26/2017

Date of Issued Opinion: 02/26/2018

Docket Number: No. 15 - 3775

Decided:
Vacated and Remanded in part and affirmed in part.

Case Alert Author: Alissa Katz

Counsel: Gregory Antollino (and Stephen Bergstein on the brief), Bergstein & Ulrich, LLP, for Plaintiffs- Appellants Melissa Zarda and William Allen Moore, Jr., co-independent executors of the estate of Donald Zarda; Saul D. Zabell, Zabell & Associates, P.C. for Defendants-Appellees Altitude Express, Inc.

Author of Opinion: Chief Judge Katzmann (majority); Jacobs (concurrence); Sack (concurrence); Lohier (concurrence); Cabranes (concurring in the judgment); Lynch (dissent); Livingston (dissent); Raggi (dissent)

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 02/26/2018 07:05 PM     2nd Circuit     Comments (0)  

February 22, 2018
  USA v. Werdene - Third Circuit
Headline: The good-faith exception to the exclusionary rule applies when a warrant is void ab initio.

Area of Law: Federal Rules of Criminal Procedure

Issue Presented: Whether the issuance of an NIT warrant violated Rule 41(b) of the Federal Rules of Criminal Procedure, and rose to the level of a Fourth Amendment violation? Whether the good-faith exception to the exclusionary rule applies when a warrant is void ab initio due to a magistrate lacking jurisdiction to issue it, and whether such an exception precludes suppression where government agents reasonably relied on the warrant?

Brief Summary: This case arose from the FBI's investigation into Playpen, a global online forum that existed on the dark web, dedicated to the advertisement and distribution of child pornography. The FBI relied on a search warrant, issued in the Eastern District of Virginia, to search the computers of thousands of Playpen users across the U.S. and the world using a form of government-created malware termed a "Network Investigative Technique" ("NIT"). Pennsylvania resident, Gabriel Werdene, was a Playpen user whose computer was compromised by the NIT. He was charged with one count of possessing child pornography. Werdene filed a motion to suppress the evidence seized during the search of his computer, including the information revealed by the use of the NIT. The District Court denied the suppression motion, holding that the NIT warrant violated the version of Rule 41(b) of the Federal Rules of Criminal Procedure then in effect, but that the NIT itself did not constitute a search under the Fourth Amendment and that Werdene was not prejudiced by the error.

The Third Circuit held that the NIT warrant violated the prior version of Rule 41(b). As a result, the magistrate judge not only exceeded her authority under Rule 41(b), as then drafted, but also under the Federal Magistrates Act. This rendered the warrant void ab initio and raised the magnitude of the infraction from a technical one to a Fourth Amendment violation. However, the good-faith exception to the exclusionary rule applies to warrants that are void ab initio, which ultimately precluded suppression of the evidence in Werdene's case.

Extended Summary: This case arises from the FBI's investigation into Playpen, a global online forum that existed on the dark web and that was dedicated to the advertisement and distribution of child pornography. The FBI relied on a search warrant, issued in the Eastern District of Virginia, to search the computers of thousands of Playpen users across the U.S. and the world using a form of government-created malware termed a "Network Investigative Technique" ("NIT"). Pennsylvania resident, Gabriel Werdene, was a Playpen user whose computer was compromised by the NIT. Subsequently, he was charged in the Eastern District of Pennsylvania with one count of possessing child pornography. Werdene filed a motion to suppress the evidence seized during the search of his computer, including the information revealed by the use of the NIT. The District Court denied the suppression motion, holding that the NIT warrant violated the version of Rule 41(b) of the Federal Rules of Criminal Procedure then in effect, but that the NIT itself did not constitute a search under the Fourth Amendment and that Werdene was not prejudiced by the error.

On appeal, Werdene contended that the District Court erred in holding that no Fourth Amendment search took place. Werdene also argued that the issuance of the warrant violated his Fourth Amendment rights because it lacked particularity and was issued in violation of the jurisdictional requirements set forth in both Rule 41(b) and the Federal Magistrates Act.

The Third Circuit framed its opinion in four parts. First, the Third Circuit determined that the NIT warrant violated Rule 41(b). Rule 41(b)(4) provides that a magistrate judge may "issue a warrant to install within the district a tracking device...." The FBI did not believe the NIT was a "tracking device" at the time it sought the warrant because the FBI did not submit an application for a tracking warrant - rather it applied for a standard search warrant; the explicit purpose of the FBI's warrant was not to track movement - as would be required under Rule 41(b)(4) - but to obtain information from activating computers; and the NIT was not "installed" within the Eastern District of Virginia, but instead on Werdene's computer, which was physically located in Pennsylvania. Accordingly, the Third Circuit held that the NIT was not a tracking device under Rule 41(b)(4), and therefore the NIT warrant violated the Rule.

Second, the Third Circuit decided that the NIT warrant's Rule 41(b) violation rose to the level of a Fourth Amendment violation so suppression would be governed by the exclusionary rule standards generally applicable to Fourth Amendment violations. The Third Circuit determined that the magistrate judge, by lacking jurisdiction to issue the search warrant, not only exceeded her authority under Rule 41(b), as then drafted, but also under the Federal Magistrates Act. As a result, the Third Circuit held that the warrant was void ab initio, which elevated the magnitude of the 41(b) infraction from a technical one to a Fourth Amendment violation.

Third, the Third Circuit decided, as an issue of first impression, that the good-faith exception to the exclusionary rule applies when a warrant is void ab initio due to the magistrate judge lacking jurisdiction to issue it. The Court considered the purpose of the exclusionary rule: to deter government violations of the Fourth Amendment and applied a cost-benefit analysis, balancing the 'deterrence benefits of suppression' against its substantial social costs. It held that the good-faith exception applies to warrants that are void ab initio because "the issuing magistrate's lack of authority has no impact on police misconduct, if the officers mistakenly, but inadvertently, presented the warrant to an innocent magistrate."

Fourth, the Third Circuit determined that the good-faith exception did not preclude suppression in this case, which did not fit into the four scenarios in which reliance on a warrant is unreasonable: (1) the magistrate issued the warrant in reliance on a deliberately or recklessly false affidavit; (2) the magistrate abandoned his judicial role and failed to perform his neutral and detached function; (3) the warrant was based on an affidavit so lacking in indicia of probable cause as to render official belief in its existence entirely unreasonable; or (4) the warrant was so facially deficient that it failed to particularize the place to be searched or the things to be seized. The Third Circuit noted that, here, the magistrate judge committed the Rule 41(b) error, not the FBI agents who reasonably relied on the NIT warrant. The exclusionary rule "applies only where it 'result[s] in appreciable deterrence;'" thus, even though Rule 41(b) did not authorize the magistrate judge to issue the NIT warrant, future law enforcement officers could apply for and obtain such a warrant pursuant to the new Rule 41(b)(6), which subsequently went into effect to authorize NIT-like warrants. Accordingly, the Court determined that a similar Rule 41(b) violation is unlikely to recur and suppression here would have no deterrent effect. The Third Circuit thus affirmed on alternative grounds the District Court's decision to deny Werdene's suppression motion.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/163588p.pdf

Panel: Greenaway, Jr., Nygaard, and Fisher, Circuit Judges

Argument Date: October 23, 2017

Date of Issued Opinion: February 21, 2018

Docket Number: No. 16-3588

Decided: Affirmed on alternate grounds

Case Alert Author: Brooke Hutchins

Counsel: Leigh M. Skipper, Brett G. Sweitzer [Argued], Counsel for Appellant; Louis D. Lappen, Robert A. Zauzmer, Michelle L. Morgan [Argued], Counsel for Appellee

Author of Opinion: Circuit Judge Greenaway, Jr.

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 02/22/2018 04:20 PM     3rd Circuit     Comments (0)  

  United States v. Miltier -- Fourth Circuit
Deviants Are Doomed: Court Makes It Effortless to Satisfy Federal Child Porn Statute's Interstate Nexus Requirement

Areas of Law: Criminal Law, Constitutional Law

Issue Presented: Whether the district court erred in instructing the jury that the prior movement of a computer through interstate commerce satisfies the interstate nexus requirement for receipt of child pornography.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held the district court properly instructed the jury that it could convict Ronald Miltier of illegal receipt of child pornography if the computer Miltier used to receive the pornography had traveled through interstate commerce at some point. Even though the illicit files may not have traveled across state lines, the Fourth Circuit found that the nexus requirement in 18 U.S.C. § 2252A(a)(2)(A) was satisfied because the computer used to receive the files had been manufactured in China.

Extended Summary: In 2013, the FBI suspected Ronald Miltier of downloading child pornography. After searching Miltier's home, the FBI found child pornography on a laptop and thumb drive that belonged to Miltier. A forensic examiner inspected the devices and concluded that several of the pornographic files were downloaded from the Internet. In May 2016, a federal grand jury indicted Miltier on seven counts of receipt of child pornography in violation of 18 U.S.C. § 2252A(a)(2)(A), and one count of possession of child pornography in violation of 18 U.S.C. § 2252A(a)(5)(B). At trial, the U.S. District Court for the Eastern District of Virginia instructed the jury that it could return a guilty verdict if either Miltier downloaded the pornographic files from the Internet, or if the computer that held the pornographic files moved through interstate commerce. The jury answered both questions in the affirmative, and the district court sentenced Miltier to more than 70 years in prison. Miltier moved for judgment of acquittal, or a new trial in the alternative, contending that (1) the government failed to sufficiently demonstrate Miltier's knowingly receipts of the child pornography; and (2) the jury instruction was improper because the statute's interstate nexus requirement could not be satisfied by evidence that the computer holding the pornography had once moved through interstate commerce. The district court denied both motions and Miltier appealed to the Fourth Circuit.

The Fourth Circuit held the district court did not err in denying Miltier's motion for judgment of acquittal because the government introduced sufficient evidence for a reasonable juror to find that Miltier knowingly received child pornography. The Fourth Circuit also determined that the district court's jury instruction was not improper because the foreign production of a computer satisfies 18 U.S.C. § 2252A(a)(2)(A)'s interstate nexus requirement.

In analyzing the appeal, the Fourth Circuit initially outlined the federal law prohibiting child pornography, 18 U.S.C. § 2252A(a)(2)(A), which bans the "(1) knowing (2) receipt of child pornography (3) using any means in or affecting interstate or foreign commerce, including by a computer." Turning to the interstate nexus element, the court first assessed "whether Congress has the authority to criminalize the intrastate receipt of child pornography based on the movement of a computer through interstate commerce." In applying precedent from the U.S. Supreme Court and the Fourth Circuit, the court held that Congress does have such authority, because Congress may "regulate purely local activities that are part of an economic 'class of activities' that have a substantial effect on interstate commerce." Gonzalez v. Raich, 545 U.S. 1, 17 (2005). The Fourth Circuit then held in United States v. Forrest, that "local production and possession of child pornography substantially affect[s] interstate commerce" in upholding a conviction under § 2252A. 429 F.3d 73, 79 (4th Cir. 2005). Finally, the court was persuaded by a recent Second Circuit case, which held that the use of a Korean-made computer to produce child pornography intrastate was sufficient to meet the interstate nexus requirement. See United States v. Ramos, 685 F.3d 120, 133 (2d Cir. 2012). Based on these cases, the court determined that Congress does have the authority to criminalize the intrastate receipt of child pornography based on the interstate movement of a computer.

In response to Miltier's contention that Congress did not exercise the full extent of its Commerce Clause power in drafting the statute, the court analyzed the grammatical structure and the legislative history of § 2252A(a)(2)(A). Reading the plain language of the statute, the court distinguished between the phrases, "in or affecting interstate commerce" and "in interstate commerce." According to the court, the former "unambiguously allows the interstate nexus to be satisfied based on the movement of a computer," whereas the latter requires a showing that the pornography was actually received in interstate commerce. The court further noted that the statute as originally enacted contained the "in interstate commerce" language, but in 2007, Congress amended the statute in an attempt to eliminate the child pornography market altogether. The court noted that other jurisdictions have permitted the movement of a computer to satisfy the nexus element in cases dealing with production and possession of child pornography. To hold that the interstate nexus may be satisfied for possession and production, but not receipt, would be contrary to the 2007 amendments.

Thus, the court held that the intrastate receipt of child pornography may result in a conviction under § 2252A(a)(2)(A) so long as the computer used to receive the pornography previously traveled through interstate commerce.

Judge King concurred with the judgment, but stated that the majority's analysis was unnecessary because the jury found that Miltier used the Internet to download the illicit files, which unambiguously satisfied the interstate nexus requirement.

To read the full opinion, click here.

Panel: Judges Niemeyer, King, and Floyd

Argument Date: 10/26/2017

Date of Issued Opinion: 02/7/2018

Docket Number: No. 16-4729

Decided: Affirmed by published opinion.

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

Counsel: ARGUED: James R. Theuer, JAMES R. THEUER, PLLC, Norfolk, Virginia, for Appellant. Joseph Kosky, OFFICE OF THE UNITED STATES ATTORNEY, Norfolk, Virginia, for Appellee. ON BRIEF: Dana J. Boente, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Norfolk, Virginia, for Appellee.

Author of Opinion: Judge Floyd

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/22/2018 01:55 PM     4th Circuit     Comments (0)  

  Degidio v. Crazy Horse Saloon and Restaurant Inc. et al. -- Fourth Circuit
Crazy Horse Denied Second Bite at Dancers: Court Rejects Club's Belated Attempt to Enforce Arbitration

Areas of Law: Contract Law, Arbitration Agreements

Issue Presented: Whether an arbitration agreement executed more than a year into a class action litigation can be enforced against new members of the class who signed the agreement?

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that an arbitration agreement was not enforceable against members of a pending class action law suit. Crazy Horse Saloon and Restaurant, Inc., is a strip club that was sued by dancers at the club for unfair labor practices. The court found that Crazy Horse actively litigated the suit, but then belatedly attempted to enforce its arbitration agreement with some of the dancers as an "insurance policy in an attempt to give itself a second opportunity to evade liability." The court concluded that Crazy Horse's calculated use of arbitration was contrary to the goal of the FAA. Additionally, the court held the arbitration agreement was misleading. Finally, the court found the arbitration agreement had been presented to potential plaintiffs/dancers in a covert manner, circumventing the district court's ability to supervise contact between the parties, their respective counsel, and potential plaintiffs.

Extended Summary: In 2012 and 2013, plaintiff-appellee Alexis Degidio performed as an exotic dancer at Crazy Horse Saloon. Crazy Horse classified entertainers like Degidio as independent contractors. This classification allowed Crazy Horse not to pay the dancers, who were instead compensated only through customer tips. On August 8, 2013, Degidio filed a putative collective action, under the Fair Labor Standards Act (FLSA), and a class action, under Federal Rule of Civil Procedure (FRCP) 23, against Crazy Horse. Degidio alleged that Crazy Horse misclassified her and other dancers as independent contractors in violation of the minimum wage and overtime provisions of the FLSA. Degidio also alleged that Crazy Horse violated the South Carolina Payment of Wages Act (SCPWA), S.C. Code § 41-10-10 et seq., by failing to pay entertainers the correct minimum wages, denying them overtime wages, and inappropriately withholding the entertainers' tips.

On October 8, 2013, Crazy Horse answered Degidio's complaint and the parties participated in discovery for another year. In November and December 2014, Crazy Horse began entering into arbitration agreements with entertainers who worked at the club. Crazy Horse placed the arbitration provision in a lease distributed to entertainers who used its facilities, and required entertainers to sign the lease as a condition of performing at the club. The arbitration provision waived the right to participate in any class action against Crazy Horse. The provision also prohibited the signatory from joining the class in the present case. Notably, before executing the agreement Crazy Horse failed to notify the district court that it was contacting potential class members about the litigation.

In December 2014, Crazy Horse moved for summary judgment on all claims, Crazy Horse did not mention arbitration in this motion for summary judgment. Degidio followed up by moving for Rule 23 class certification for the state law claims and conditional certification of a collective action under the FLSA. In January 2015, Crazy Horse opposed Degidio's motion for certification and for the first time argued that the district court should compel arbitration against any entertainers who signed arbitration agreements.

The district court granted in part and denied in part Crazy Horse's motion for summary judgment, dismissing two of the three state law claims brought by Degidio. The district court also granted Degidio's motion for conditional certification of a FLSA collective action and authorized Degidio to contact potential plaintiffs. The district court also noted that it questioned the enforceability of the arbitration agreement because the potential class members may have been misled about the nature of the plaintiff's claim. Degidio sent notice to potential plaintiffs regarding their ability to opt into the FLSA collective action. Crazy Horse filed another motion for summary judgment, without mentioning arbitration, which was ultimately denied.

From November 2015 to January 2016 more than a dozen new plaintiffs joined the litigation. Nine of those plaintiffs had signed the 2014 arbitration agreement. Over the next several months, Crazy Horse actively litigated the case, including serving written discovery on the plaintiffs (even those who signed the arbitration agreement), and repeatedly moving to certify questions of state law to the South Carolina Supreme Court.

More than three years into litigation and more than nine months after the last plaintiff opted into the action, Crazy Horse asked the district court to compel arbitration against the nine plaintiffs who signed the arbitration agreements in November and December 2014. The district court rejected Crazy Horse's motion to compel arbitration and granted Degidio's motion for conditional class certification. Crazy Horse appealed.

The Fourth Circuit acknowledged the Federal Arbitration Act ("FAA") adopted "a liberal federal policy favoring arbitration agreements." However, the court recognized the FAA was not without limitation. The court held that a litigant can waive its rights under the FAA if the litigant uses the litigation process and allowing arbitration would prejudice the opposing party. In order to determine whether the opposing party was prejudiced, the court considers two factors: "1) the amount of the delay; and 2) the extent of the moving party's trial-oriented activity." Stedor Enters., Ltd. v. Armtex Inc., 947 F.2d 727, 730 (4th Cir 1991).

The Fourth Circuit found that Crazy Horse pursued a litigation strategy for over three years and this ligation strategy negatively impacted the plaintiffs. The court found that Crazy Horse pursued a "merits-based" litigation strategy, and failed to file a motion to compel arbitration at an early stage in the litigation process. Instead, Crazy Horse filed various motions for summary judgment, served discovery, and asked the district court to certify legal questions. The court noted this litigation strategy caused the plaintiff and the district court to spend time and resources on issues that may have to be reargued before the arbitrator.

The court noted that arbitration would not have been needed had the district court granted each of Crazy Horse's motions for summary judgment. Thus, Crazy Horse was not seeking to use arbitration as an alternative to litigation (as is its purpose) but instead, was using arbitration as "a second bite at the apple" in order to avoid liability.

Crazy Horse's contention that its delay was appropriate was rejected on multiple grounds, including the fact that allowing Crazy Horse to wait until the class had been conditionally certified would provide a perverse motivation to future defendants to wait as long as possible to compel arbitration. This increases the risk that arbitration will be used to delay the litigation process in many cases - an outcome at odds with the goal of the FAA.

Finally, the court noted that the arbitration agreement was substantively problematic. The agreement incorrectly suggested the entertainers would keep their tips and flexible schedules only if they were classified as independent contractors. The agreement also had been presented to potential plaintiffs in a secretive manner, under circumstances the court found "were ripe for duress."

To read the full opinion, click here.

Panel: Judges Wilkinson, King, and Floyd

Argument Date: 12/05/2017

Date of Issued Opinion: 01/18/2018

Docket Number: 17-1145

Decided: Affirmed and remanded for further proceedings consistent with opinion.

Case Alert Author: Tokunbo Ibitoye, Univ. of Maryland Carey School of Law

Counsel: ARGUED: James Leon Holt, Jr., JACKSON, SHIELDS, YEISER & HOLT, Cordova, Tennessee, for Appellant. Jamisen A. Etzel, CARLSON LYNCH SWEET KIPELA & CFARPENTER, LLP, Pittsburg, Pennsylvania, for Appellee. ON BRIEF: Gary Lynch, CARLSON LYNCH SWEET KILPELA & CARPENTER, LLP. Pittsburgh, Pennsylvania, for Appellee.

Author of Opinion: Judge Wilkinson

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/22/2018 09:40 AM     4th Circuit     Comments (0)  

  Simply Wireless, Inc. v. T-Mobile US, Inc.-- Fourth Circuit
To Arbitrate or Not to Arbitrate: Court Answers the Question of Who Decides Arbitrabilty

Areas of Law: Contract Law, Arbitration Clauses

Issue Presented: Whether the parties' incorporation of a particular contractual provision constituted evidence of the parties' clear and unmistakable intent to let an arbitrator determine arbitrability.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held the parties' incorporation of rules that expressly delegated arbitrability questions to an arbitrator constituted the parties' "clear and unmistakable" intent to let an arbitrator determine arbitrability.

Extended Summary: Simply Wireless is a telecommunications company that provides telephone services to consumers, and marketing and distribution services to other telecommunications companies. T-Mobile provides services similar to those provided by Simply Wireless and competes in the same markets. On July 12, 2012, Simply Wireless and T-Mobile partnered on a marketing and distribution project through a contract entitled "Amended & Restated Limited Purpose Co-Marketing and Distribution Agreement for Equipment Sold through HSN & QVC," (the "HSN/QVC Agreement"). The HSN/QVC Agreement included an arbitration clause with the following provision: "Any claims or controversies...arising out of or relating to this Agreement shall be resolved by submission to binding arbitration." The contract further specified that "arbitration shall be administered and hearings shall be held in Seattle, Washington before a single neutral arbitrator from the offices of Judicial Arbitration & Mediation Services ("JAMS")."

During the summer of 2014, T-Mobile filed several trademark applications with the United States Patent and Trademark Office ("USPTO") to trademark the phrase "SIMPLY PREPAID." In March of 2015, Simply Wireless filed a Notice of Opposition to all of T-Mobile's "SIMPLY PREPAID" trademark applications. According to Simply Wireless, it was the originator and owner of the trademark for "SIMPLY PREPAID." T-Mobile filed an answer and asserted counterclaims that sought the cancellation of Simply Wireless's various registrations of the "SIMPLY PREPAID" trademark.

In October of 2015, Simply Wireless filed suit against T-Mobile in federal court, seeking relief on five grounds involving trademark rights. In response, T-Mobile filed a Notice of Intent to Seek Arbitration. T-Mobile also moved to dismiss Simply Wireless's complaint on two grounds. First, T-Mobile asserted that Simply Wireless failed to comply with provisions in the HSN/QVC Agreement that required notice and the initiation of arbitration. T-Mobile asserted that these failures warranted dismissal with prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6). Second, T-Mobile asserted that the HSN/QVC Agreement's incorporation of JAMS Comprehensive Rules and Procedures "clearly and unmistakably" delegated to an arbitrator - not a court - the authority to resolve all arbitrable disputes. Simply Wireless responded that its claims did not "arise out of" and were not "relate[d] to" the HSN/QVC Agreement and therefore, were not subject to arbitration.

The district court granted T-Mobile's motion to dismiss, holding that the "Plaintiff's claims are arbitrable because they fall within the scope of the HSN/QVC Agreement." Simply Wireless appealed.

The Fourth Circuit used the two-step inquiry articulated in Peabody Holding Co. v. United Mine Workers of Am., Int'l Union, 665 F.3d 96 (4th Cir. 2012), to make its ruling . The first step in that inquiry requires a court to determine who decides which disputes are arbitrable - the arbitrator or the court. The court will be the proper forum for determining arbitrability in most cases unless "clear and unmistakable evidence [exists] that the parties have chosen to give arbitrability questions to an arbitrator." Hayes v. Delbert Servs. Corp., 811 F.3d 666, 671 n.1 (4th Cir. 2016). Second, if the correct forum is the court, the court must then decide whether the dispute is in fact arbitrable. Peabody, 665 F.3d at 101. The Fourth Circuit reviewed the district court's holding de novo.

As to the first question, T-Mobile argued that certain language in the HSN/QVC Agreement was evidence of the parties' clear and unmistakable intent to submit all arbitrability disputes to an arbitrator. The Fourth Circuit disagreed. In the court's view, "if contracting parties wish to let an arbitrator determine the scope of his own jurisdiction, they must indicate that intent in a clear and specific manner. Expansive general arbitration clauses will not suffice to force the arbitration of arbitrability disputes." Carson v. Giant Food, Inc., 175 F.3d 325, 328 (4th Cir. 1999). T-Mobile further contended that even if the referenced contract language did not show clear and unmistakable intent that the parties' incorporation of JAMS Rules, particularly Rule 11(b), did.

JAMS Rule 11(b) provides that:

Jurisdictional and arbitrability disputes, including disputes over the formation, existence, validity, interpretation or scope of the agreement under which Arbitration is sought ...shall be submitted to and ruled on by the Arbitrator. The Arbitrator has the authority to determine jurisdiction and arbitrability issues as a preliminary matter.

The Fourth Circuit addressed this matter for the first time. Looking to its sister circuits for guidance, the Fourth Circuit concluded that the incorporation of JAMS or arbitral rules substantively identical to those found in JAMS Rule 11(b) constituted a clear and unmistakable intent to arbitrate arbitrability.

Because the JAMS rules expressly delegate arbitrability questions to an arbitrator, the district court erred in deciding on the merits whether Simply Wireless' claims fell within the scope of the HSN/QVC Agreement. The Fourth Circuit thus affirmed the district court's decision to dismiss the complaint, but did so on alternate grounds.

Judge Floyd dissented, writing that the parties' additional inclusion of language from the FAA called into question their clear and unmistakable intent to have an arbitrator determine arbitrability. In Judge Floyd's view, the question of arbitrability was properly before the court.

To read the full opinion, click here

Panel: Before Wynn, Floyd, and Harris, Circuit Judges

Argument Date: 9/14/2017

Date of Issued Opinion: 12/13/2018

Docket Number: 16-1166

Decided: Affirmed by published opinion. Judge Wynn wrote the majority opinion, in which Judge Harris joined. Judge Floyd wrote a dissenting opinion.

Case Alert Author: Rhya Martin, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Sean Patrick Roche, CAMERON MCEVOY, PLLC, Fairfax, Virginia, for Appellant. Joseph Mark Lipner, IRELL & MANELLA LLP, Los Angeles, California, for Appellees. ON BRIEF: Robert A. Rowan, Sheryl L. De Luca, NIXON & VANDERHYE P.C., Arlington, Virginia, for Appellant. Charles B. Molster, III, WINSTON & STRAWN LLP, Washington, D.C.; Ellisen S. Turner, Adam M. Shapiro, IRELL & MANELLA LLP, Los Angeles, California, for Appellees.

Author of Opinion: Judge Wynn

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/22/2018 09:18 AM     4th Circuit     Comments (0)  

  United States v. Maynes -- Fourth Circuit
Big Pimpin': Fourth Circuit Finds Victims' Prior Sexual Histories Inadmissible at Sex Trafficker's Trial

Areas of Law: Criminal Law, Human Trafficking, Evidence

Issues Presented: Whether the district court erred in failing to include language regarding materiality when defining fraud for the jury. Whether the evidence was sufficient to support appellant's conviction. Whether the trial court properly excluded evidence regarding the victim's prior sex work.

Brief Summary: Michael Maynes was a pimp who was convicted of four counts of sex trafficking and one count of conspiracy to commit sex trafficking. The evidence used against him included allegations from four women who testified they had been coerced into sex work by Maynes. The women alleged that Maynes promised houses, cars, and income in exchange for their work. However, the women alleged they never received any of the items they were promised. On appeal, appellant alleged: (1) ineffective assistance of counsel, (2) error in the jury instructions, (3) insufficient evidence, and (4) the improper exclusion of evidence. The Fourth Circuit rejected all of appellant's challenges and affirmed his convictions.

Extended Summary: Michael Maynes was indicted in November of 2015 for conspiracy to commit sex trafficking in violation of 18 U.S.C. §§ 1591(a) and 1594(c), five counts of sex trafficking by force, fraud, or coercion in violation of 18 U.S.C. § 1591(a), and one count of kidnapping/aiding and abetting kidnapping in violation of 18 U.S.C. §§ 1201(a)(1), (d), and (2). At trial, he was acquitted of kidnapping and of one count of sex trafficking. He was convicted of the remaining four counts of sex trafficking, as well as of the conspiracy count.

At trial, four women whom Maynes prostituted testified against him. The women maintained that Maynes had promised them different things, including houses, cars, and money; but did not deliver on these promises. In addition, one of the women testified that Maynes and his girlfriend cared for her child while she engaged in commercial sex work, but then did not allow her to see the child and threatened to take her son to Child Protective Services if she did not send them a greater share of her earnings.

Maynes appealed his convictions to the Fourth Circuit and challenged the effectiveness of trial counsel's representation. The Fourth Circuit, after noting that it does not typically review claims of ineffective assistance of counsel on direct appeal, stated "we see nothing in this record to indicate that counsel's performance fell outside 'the wide range of reasonable professional assistance.' Strickland v. Washington, 466 U.S. 668, 689 (1984)." The court then turned to Maynes' specific appellate claims.

First, the court considered Maynes' claim that the jury instruction defining fraud was insufficient because it did not include a discussion of materiality. The court defined fraud as "any act of deception or misrepresentation." Maynes contended the instruction should also have informed the jury that "such specific act of fraud must have been material to cause a person to engage in a commercial sex act," because otherwise he might be convicted on immaterial misrepresentations. The Fourth Circuit agreed that fraud contains a materiality requirement. However, the court further acknowledged that jury instructions cannot be evaluated in isolation and must instead be considered in the context of the surrounding instructions. Reviewing the balance of the instructions, the court noted that an additional instruction given was "that the defendant [acted] knowing or in reckless disregard of the fact that means of force, threats of force, fraud, coercion, or any combination of such means would be used to cause that person to engage in a commercial sex act." This additional instruction, along with the definition of fraud the district court used, was enough to satisfy the materiality element.

Next, the court considered and rejected Maynes' allegation that the evidence was insufficient to sustain his convictions.

Finally, the court considered Maynes' assertion that the district court improperly limited the defense attorney's ability to cross-examine the prosecution witnesses regarding their sexual histories. In Maynes' view, the limitation violated the Confrontation Clause of the Sixth Amendment because the women's sexual histories were necessary to his defense - specifically, Maynes wanted to argue at trial that the women were experienced prostitutes who were aware of the nature of the business of prostitution. The Fourth Circuit rejected this challenge and deemed the prior sexual history of the women inadmissible. The Fourth Circuit noted that allowing such evidence would 1) risk a mini-trial, 2) shift the focus to the victims' past lives, and 3) unduly prejudice the jury. In so ruling, the Fourth Circuit joined the First, Second, Seventh and Eighth Circuits, all of which have found victims' sexual histories to be inadmissible in sex trafficking cases.

Accordingly, the Fourth Circuit affirmed the judgment of the district court.

To read the full opinion, click here.

Panel: Judges Wilkinson, Shedd, and Diaz.

Argument Date: 12/07/2017

Date of Issued Opinion: 01/18/2018

Docket Number: 16-4732

Decided: Affirmed by published opinion.

Case Alert Author: Aarti Sidhu, Univ. of Maryland Carey School of Law

Counsel: Mark Bodner, Fairfax, Virginia, for Appellant. Michael John Frank, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee. ON BRIEF: Dana J. Boente, United States Attorney, Patricia T. Giles, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee.

Author of Opinion: Judge Wilkinson

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/22/2018 09:03 AM     4th Circuit     Comments (0)  

February 16, 2018
  Citizens United v. Schneiderman - Second Circuit
Headline: Second Circuit Dismisses First Amendment and Due Process Challenge to New York State Requirement that Non-Profit Organizations Annually Disclose List of Donors

Area of Law: Constitutional Law; First Amendment; Due Process

Issue(s) Presented: Whether the enforcement, without prior notice, of state regulations requiring non-profit organizations to disclose their donors on a yearly basis impermissibly chills speech or assembly rights under the First Amendment or violates the Due Process Clause of the Fourteenth Amendment.

Brief Summary: Citizens United Foundation and Citizens United, non-profit organizations registered with New York State as "charitable organizations," were required to register with the New York State Attorney General and submit annual public disclosures, including a list of their donors. Appellants submitted annual disclosures, but omitted parts identifying donors, and sued the Attorney General claiming the disclosure requirements violated the First and Fourteenth Amendments.

The Second Circuit affirmed the United States District Court for the Southern District of New York's dismissal of the First Amendment claims, holding that requiring a tax-exempt organization to disclose its donor list did not impermissibly chill First Amendment speech or assembly rights. On the due process claim, the Second Circuit, reversing in part, held that the District Court erred in finding that the claim was not ripe, and remanded with instructions that that claim also be dismissed with prejudice for failure to state a valid claim.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...8e69d/1/hilite/


Extended Summary:
Citizens United Foundation and Citizens United ("Appellants"), registered "charitable organizations" that promote a common policy perspective, are subject to Internal Revenue Code restrictions and requirements including that they submit a Form 990 with each year's taxes, which includes a list of their donors, the donors' addresses, and the amount of their donations. They are also subject to New York State regulations promulgated by the New York State Attorney General's Office requiring tax exempt entities that seek donations in New York to register with the Attorney General's Office and submit to that office the annual disclosure form provided to the IRS. Both Appellants registered with the New York State Attorney General in 1995 and submitted annual disclosures to the IRS, but failed to provide the information identifying their donors to the Attorney General's Office. In 2013, and each year thereafter, the Attorney General's Office served deficiency notices on Appellants informing them that they failed to comply with the yearly disclosure requirements.

In 2014, Appellants, facing potential consequences for the deficiency, filed suit in the District Court for the Southern District of New York challenging the Attorney General's requirements. Appellants claimed the regulations violated the First Amendment by operating as a prior restraint on their speech by requiring disclosure even prior to making a request for money, and by intimidating donors from "paying for communication of their views." Appellants also argued that the regulations were preempted by the Internal Revenue Code's federal disclosure rules and, further, that it was not within the Attorney General's authority to classify them as "charitable organizations." Finally, Appellants claimed that the Attorney General's enforcement of such regulations, without prior notice, violated the Fourteenth Amendment's Due Process Clause.

The District Court held that the complaint failed to state any First Amendment, preemption or New York constitutional violations. Further, the District Court dismissed the due process claim sua sponte for lack of ripeness. On appeal, the Second Circuit affirmed the dismissal of the First Amendment claims. On the due process claim, the Second Circuit reversed the District Court's finding that the claim was unripe and remanded with instructions to dismiss that claim with prejudice for failure to state a valid claim.

On appeal, Appellants urged the Second Circuit to apply strict scrutiny to the First Amendment claims and find that mandatory disclosure of a member or donor list is unconstitutional without a compelling government interest and narrowly drawn regulations furthering such interest. The Second Circuit, however, declined to apply strict scrutiny and instead applied exacting scrutiny, a lower degree of scrutiny, which requires a "substantial relation between the disclosure requirement and a sufficiently important government interest." Applying that test, the Second Circuit reasoned that collecting donor information furthers the strong government interest the Attorney General has in protecting the public from fraud and self-dealing in charities.

The Second Circuit then dismissed Appellants facial and as-applied First Amendment challenges for failing to plead facts sufficient to show that donors reasonably feared having their identities known to the Attorney General more than to the IRS, or that the Attorney General would publicize donors' identities in violation of applicable law. The Second Circuit concluded that the regulations were substantially related to the important interest in keeping non-profits honest and did not impermissibly chill the speech of Appellants or their donors in violation of the First Amendment.

Next, the Second Circuit found that the regulations did not act as a prior restraint on non-profits' solicitation of donations, as the regulations itself did not restrain speech, but simply acted as a uniform content-neutral speech regulation. Further, with regards to Appellants' due process argument, the Second Circuit held that the claim failed on the merits, as Appellants were required to adhere to such regulations for nearly a decade, and thus were not entitled to prior notice. The Second Circuit went on to dismiss Appellants' preemption claim, citing the Ninth Circuit, which held that even if the IRS has a similar set of disclosure requirements, nothing prevents other government entities from seeking such information from the organization. Finally, the Second Circuit affirmed the District Court's finding that it was well within the Attorney General's authority to promulgate the challenged regulations, which included defining a "charitable organization."

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...8e69d/1/hilite/


Panel:
Circuit Judges Newman, Leval, and Pooler

Argument Date: 08/21/2017

Date of Issued Opinion: 02/15/2018

Docket Number:
16-3310

Decided: Affirmed in Part and Reversed in Part

Case Alert Author:
Matthew Shock

Counsel: Michael Boos, Citizens United & Citizens United Foundation, Fairfax, VA, for Plaintiffs¿Appellants Citizens United & Citizens United Foundation; Donald F. McGahn, James Burnham, Andrew Bentz, Jones Day, Washington, DC (on the brief), for Plaintiffs¿Appellants Citizens United & Citizens United Foundation; Barbara D. Underwood, Solicitor General of New York (Steven C. Wu, Deputy Solicitor General, Matthew W. Grieco, Assistant Solicitor General, on the brief), New York, N.Y., for Defendant¿Appellee Eric T. Schneiderman, Attorney General of the State of New York; Derek L. Shaffer, William A. Burck, Quinn Emanuel Urquhart & Sullivan, LLP, Washington, D.C., for amicus curiae in support of Plaintiffs¿Appellants Citizens United & Citizens United Foundation; William J. Olson, Herbert W. Titus, John S. Miles, Jeremiah L. Morgan, Robert J. Olson, William J. Olson, P.C., Vienna, VA, Joseph W. Miller, U.S. Justice Foundation, Ramona, CA, and Mark J. Fitzgibbons, Manassas, VA, for amici curiae in support of Plaintiffs¿Appellants Citizens United & Citizens United Foundation; Paul M. Smith, The Campaign Legal Center, Washington, D.C., amicus curiae in support of Defendant¿Appellee Eric T. Schneiderman, Attorney General of the State of New York

Author of Opinion:
Circuit Judge Pooler

Circuit:
2nd Circuit

Case Alert Circuit Supervisor:
Professor Elyse Diamond

Edited: 02/16/2018 at 10:23 AM by Elyse Diamond

    Posted By: Elyse Diamond @ 02/16/2018 08:34 AM     2nd Circuit     Comments (0)  

February 13, 2018
  United States v. Covington -- Fourth Circuit
First, Do No [Physical] Harm: Unlawful Wounding Qualifies as Crime of Violence Under U.S. Sentencing Guidelines

Areas of Law: United States Sentencing Guidelines, Criminal Law

Issue Presented: Whether the West Virginia crime of unlawful wounding, W. Va. Code § 61-2-9(a), is a crime of violence for purposes of determining career offender status under the United States Sentencing Guidelines.

Brief Summary: The United States Court of Appeals for the Fourth Circuit held that the West Virginia criminal offense of unlawful wounding qualified as a crime of violence under the United States Sentencing Guidelines. Rejecting arguments distinguishing between direct and indirect force, the court found that the elements of unlawful wounding satisfied "the minimum conduct necessary for conviction" for a crime of violence.

Extended Summary: Donald Covington pled guilty to the crime of distribution of heroin. Covington had two prior convictions, robbery with a firearm and unlawful wounding. Prior to the sentencing hearing, the District Court ordered briefing on whether the crime of unlawful wounding is a crime of violence under the Guidelines. The District Court found that it was not a crime of violence and as such sentenced Covington to time served and ordered his release.

The Fourth Circuit vacated and remanded for resentencing, finding that the crime of unlawful wounding is a crime of violence under the Guidelines. The court applied the categorical approach to "compare the elements required for conviction of an offense to the element(s) required for application of the sentence enhancement." When applying the categorical approach, a court focuses only on the elements of conviction, not the specific facts of a case.

The Guidelines provide a sentencing enhancement for career offenders--i.e., people with two prior felony convictions of crimes of violence. Crimes of violence must involve force. The force clause of the Guidelines requires an offense to have as "an element the use, attempted use, or threatened use of physical force against the person of another." The Supreme Court has interpreted "physical force" as "violent force - that is, force capable of causing physical pain or injury to another person." Johnson v. United States, 559 U.S. 133, 140 (2010). The crime of unlawful wounding is defined as "shoot[ing], stab[bing], cut[ting] or wound[ing] any person, or by any means caus[ing] him or her bodily injury with intent to maim, disfigure, disable or kill," W. Va. Code § 61-2-9(a). The Fourth Circuit found that the "minimum conduct required for conviction of unlawful wounding must at least involve physical force capable of causing physical injury to another person." The court therefore concluded that the offense of unlawful wounding is "categorically a crime of violence under the Guidelines."

In so holding, the court rejected the District Court's distinction between direct and indirect uses of force. This distinction had been articulated by the Fourth Circuit in United States v. Torres-Miguel, 701 F.3d (4th Cir. 2012). However, the court held that the Supreme Court's opinion in United States v. Castleman, 134 S. Ct. 1405 (2014), abrogated the distinction and was controlling.

The court finally noted that the District Court erred in considering hypothetical scenarios in which nonviolent conduct might satisfy the elements of an unlawful wounding conviction. "[L]itigants must point to the statutory text or to actual cases in order to demonstrate that a conviction for a seemingly violent state crime could in fact be sustained for nonviolent conduct."

To read the full opinion, click here.

Panel: Judges Traxler and Agee, and Judge Biggs, United States District Court for the Middle District of North Carolina, sitting by designation.

Argument Date: October 26, 2017

Date of Issued Opinion: January 18, 2018

Docket Number: 17-4120

Decided: Vacated and remanded by published opinion. Judge Biggs wrote the opinion, in which Judge Traxler and Judge Agee joined.

Case Alert Author: Reagan Greenberg, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Philip Henry Wright, OFFICE OF THE UNITED STATES ATTORNEY, Charleston, West Virginia, for Appellant. Philip Bradley Sword, SHUMAN, MCCUSKEY & SLICER, PLLC, Charleston, West Virginia, for Appellee. ON BRIEF: Carol A. Casto, United States Attorney, Monica D. Coleman, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Charleston, West Virginia, for Appellant.

Author of Opinion: Judge Biggs

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/13/2018 11:27 AM     4th Circuit     Comments (0)  

  Judge Shedd Takes Senior Status -- Fourth Circuit
Judge Dennis W. Shedd of the U.S. Court of Appeals for the Fourth Circuit assumed senior status on January 30, 2018, after 15 years on the appellate bench. Judge Shedd was nominated by President George W. Bush on May 9, 2001, filling the seat vacated by Judge Clyde H. Hamilton. Judge Shedd received his commission on November 26, 2002 after confirmation by the U.S. Senate. Prior to serving on the Fourth Circuit, Judge Shedd was a U.S. District Judge for the District of South Carolina for 12 years, a position he was appointed to by President George H.W. Bush. Notable opinions authored by Judge Shedd include Va. Dep't of State Police v. Wash. Post, 386 F.3d 567 (4th Cir. 2004).

    Posted By: Renee Hutchins @ 02/13/2018 11:02 AM     4th Circuit     Comments (0)  

  In re: Bate Land & Timber LLC, Bate Land Company LP v. Bate Land & Timber LLC -- Fourth Circuit
Partial Dirt-for-Debt Plan Secures a Total Win

Area of Law: Bankruptcy

Issues Presented: Whether the district court erred in dismissing, on equitable mootness grounds, an appeal of the bankruptcy court's confirmed reorganization plan. Whether the bankruptcy court failed to provide the creditor with an indubitable equivalent of its secured claim. Whether the bankruptcy court erred in reducing the award of post-petition interest on the basis of creditor-appellant's unreasonable delays in proceeding.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held the creditor's appeal of a reorganization plan should not have been dismissed as equitably moot because the creditor was only seeking additional collateral from the debtor. The doctrine of equitable mootness is invoked when enough time has passed after a judgment in equity that relief on appeal becomes impractical and imprudent. That doctrine was not applicable here because the relief requested by the creditor would not have upset the plan of reorganization. The court further held that the confirmed reorganization plan provided the indubitable equivalent of the secured creditor's claim. A partial "dirt-for-debt" plan has the ability to provide the indubitable equivalent of a secured creditor's claim and the bankruptcy court did not commit clear error in determining the valuations of the tracts of land because the court found the debtor's expert testimony more credible. Lastly, the court held that reducing the post-petition interest award was within the bankruptcy court's equitable discretion. It would have been unfair for the debtor to be responsible for 266 days of post-petition interest where the bankruptcy court's busy schedule and actions taken by the creditor unreasonably delayed the proceedings.

Extended Summary: In 2006, Bate Land Company LP ("creditor") sold Bate Land & Timber LLC ("debtor") 79 tracts of land for $65 million. Of this amount, $9 million was paid in cash and the balance was secured by a $56 million purchase money promissory note encumbering the 79 tracts of land. Before paying off the complete amount of the debt, the debtor filed for Chapter 11 bankruptcy in 2013. Creditor then filed a secured claim for $13 million. To satisfy the claim, debtor proposed a partial "dirt-for-debt" plan in which the debtor offered tracts of land totaling an estimated worth of $13.5 million to pay off the remaining debt. However, the creditor rejected the proposal arguing it would not provide full compensation. This led the bankruptcy court to initiate "cramdown" proceedings to assess a value for the land the creditor would receive in lieu of cash despite its objections.

To resolve the parties' vigorous disagreement over the highest and best use of the subject parcels, the bankruptcy court heard extensive expert testimony and made detailed findings on matters such as topography and average days on the market for property in the area. Although the creditor's expert maintained the highest and best use was timber harvesting for every tract, the court determined the highest and best use was residential development for the first three tracts and agricultural for the remaining four tracts. Because none of the tracts contained mature timber, timber would have to be replanted and harvested which could take twenty-five to thirty years, but tracts 1-3 contained water-front property and were located near other successful residential subdivisions. Tracts 4-8 could be converted to agricultural use in about one year. The value of the eight tracts totaled $13.7 million.

After the "cramdown" proceedings, the court totaled the amount owed to the creditor in post-petition interest and then subtracted interest for 266 of those days. The court reasoned that the debtor should not be held accountable for interest during periods when the court's heavy workload and actions taken by the creditor extended the proceedings. With the reduction, the creditor was awarded over $1.356 million in post-petition interest. The creditor's total secured claim was valued at $14.6 million, fulfilled by eight tracts of land and cash payments totaling approximately $1 million (the "Confirmed Plan").

The creditor appealed the bankruptcy court's final order and twice moved to stay the implementation of the Confirmed Plan. The district court denied both motions and dismissed the appeal as equitably moot because the debtor had substantially consummated the Confirmed Plan and because the appeal would have hindered the success of the plan thereby injuring third parties.

On appeal, the creditor argued that the district court erred in finding the appeal equitably moot. The creditor also appealed the bankruptcy court's determination that the Confirmed Plan provided an indubitable equivalent of its secured claim. Finally, the creditor challenged the bankruptcy court's reduction in post-petition interest.

The Fourth Circuit reasoned that because the creditor was seeking additional collateral from the debtor, the appeal should not have been dismissed as equitably moot. The debtor's surrender of additional collateral would not alter any other creditor's recovery and the relief requested did not seek to undo any aspect of the Confirmed Plan that had been consummated. In light of these considerations, it would not have been impracticable, imprudent, or inequitable to provide the creditor's requested relief.

Turning to the merits, the Fourth Circuit first considered the creditor's argument that the Confirmed Plan was not the indubitable equivalent of the creditor's secured claim because a partial dirt-for-debt plan can never fully compensate a creditor due to the uncertainty inherent in property evaluations. The court rejected this claim. Uncertainty permeates every determination of disputed facts, and bankruptcy courts are well-equipped to arrive at valuations that represent the indubitable equivalent of a secured creditor's claim. Next, the Fourth Circuit reviewed the bankruptcy court's land valuations for clear error (departing from the Ninth Circuit but in accordance with the Seventh Circuit). The court found the bankruptcy court had properly weighed all expert testimony and engaged in exhaustive and detailed factual analysis to determine the highest and best use of the land. The court's decision to find the debtor's expert more credible than the creditor's expert is given particular deference, and the bankruptcy court did not commit clear error by refusing to blindly adopt the creditor's valuation.

Finally, the court acknowledged that an over-secured creditor "shall be allowed" to collect post-petition interest. However, that right is subject to equitable defenses. The Fourth Circuit found the bankruptcy court reasonably concluded it would be inequitable to require the debtor to pay interest accrued either because of the court's schedule or because of actions taken by the creditor that delayed the proceedings. The reduction in interest was not a total deprivation of post-petition interest and was consistent with the Bankruptcy Code's mandate.

To read the full opinion click here.

Panel: Judges Niemeyer, Duncan, and Floyd

Argument Date: 09/12/2017

Date of Issued Opinion: 12/06/2017

Docket Number: No. 16-2037

Decided: Decided by published opinion.

Case Alert Author: Emily Levy, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Matthew Nis Leerberg, SMITH MOORE LEATHERWOOD LLP, Raleigh, North Carolina; Laurie Beth Biggs, STUBBS & PERDUE, PA, Raleigh, North Carolina, for Appellant. George Mason Oliver, THE LAW OFFICES OF OLIVER & CHEEK, P.A., New Bern, North Carolina, for Appellee. ON BRIEF: Kip D. Nelson, SMITH MOORE LEATHERWOOD LLP, Raleigh, North Carolina; Trawick H. Stubbs, Jr., Joseph Z. Frost, STUBBS & PERDUE, PA, Raleigh, North Carolina, for Appellant. Amy M. Currin, THE LAW OFFICES OF OLIVER & CHEEK, P.A., New Bern, North Carolina; Mark R. Sigmon, SIGMON LAW, PLLC, Raleigh, North Carolina, for Appellee

Author of Opinion: Judge Duncan; Judge Niemeyer and Judge Floyd joined

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/13/2018 09:27 AM     4th Circuit     Comments (0)  

February 12, 2018
  Halleck v. Manhattan Community Access Corp., et. al. - Second Circuit
Headline: Second Circuit Holds that Public Access TV Channels are Public Forums

Area of Law: First Amendment

Issue Presented: Whether the First Amendment's limitation on governmental restriction of free speech applies to the operators of public access television channels.

Brief Summary: The plaintiffs-appellants created, and submitted for airing on the Manhattan Neighborhood Network's public access channels, a video that criticized the current programming mix on the network. After the video aired, network officials suspended the plaintiffs from airing future programs on grounds that the video amounted to harassment. The plaintiffs challenged the suspension as violating the First Amendment, but the United States District Court for the Southern District of New York dismissed the case, ruling that a public access channel was not a public forum and that the First Amendment therefore did not apply. The Second Circuit reversed, holding that the public access channels here were public forums and that the First Amendment claims against the network and its employees could go forward on the merits.

To read the full opinion, visit: http://www.ca2.uscourts.gov/de...add00828aca/3/hilite/

Extended Summary: Plaintiffs-Appellants Deedee Halleck and Jesus Papoleto Melendez, who had been involved in producing public access programming in Manhattan, submitted for airing a video entitled "The 1% Visits the Barrio," in which Plaintiffs stood outside and interviewed invitees to an El Barrio Firehouse Community Media Center event. The video presented the Plaintiffs' view that the Manhattan Neighborhood Network (MNN) was "more interested in pleasing 'the 1%' than addressing the community programming needs of those living in East Harlem."

After the video aired in October 2012, Defendant's Programming Director informed Plaintiff Halleck that she was suspended for three months from airing programs over the public access channel, because the video had violated MNN's restrictions barring "participation in harassment or aggravated threat toward staff and/or other producers." Plaintiff Melendez was later suspended indefinitely; he claimed it was because of the views in the video, while the MNN's executive director claimed that it was because Melendez had pushed him. Plaintiff Halleck was then suspended for one year after the receipt of alleged complaints regarding the 1% video.

The plaintiffs claimed their suspension from MNN violated the First Amendment, and sued. The district court dismissed their case, ruling that although it was a "close call," public access channels were not public forums.

The Second Circuit reversed. It explained that federal law authorizes setting aside public channels to be "the electronic marketplace of ideas," that New York regulations require cable operators to provide at least one public access channel, the New York City cable franchise contract with Time Warner requires it to provide four public access channels, and that New York City has designated a private corporation (the Manhattan Community Access Corporation, known as MNN) to run the channels. That structure, the Second Circuit reasoned, renders those channels public forums. The Second Circuit further explained that although private actors are not usually subject to First Amendment limitations, here the MNN employees had sufficient connection to governmental authority to be deemed state actors (since the Manhattan Borough President had designated MNN to run the channels).

The court therefore reversed the dismissal of the case against MNN and its employees, although it found that there were not sufficient allegations against New York City to make it potentially liable for MNN's actions, and affirmed the dismissal as to the City.

Argument Date: June 19, 2017

Date of Issued Opinion: February 9, 2017

Docket Number: No. 16-4155-cv

Decided: February 9, 2017

Case Alert Author: Christopher Zamlout

Counsel: Robert T. Perry, Brooklyn, NY for Plaintiffs-Appellants; Michael B. de Leeuw, (Tamar S. Wise, on the brief), Cozen O'Connor, New York, NY, for Defendants-Appellees Manhattan Community Access Corporation, Daniel Coughlin, Jeanette Santiago and Cory Bryce; Scott N. Shorr, Asst. Corp. Counsel, New York, NY (Zachary W. Carter, Corp. Counsel for the City of New York, Claude S. Platton, Asst. Corp. Counsel, New York, NY, on the brief), for Defendant-Appellee City of New York.

Author of Opinion: Judge Newman

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 02/12/2018 09:03 AM     2nd Circuit     Comments (0)  

  Linde v. Arab Bank, PLC - Second Circuit
Headline: Second Circuit Vacates Judgment on Grounds of Improper Jury Charge in Antiterrorism Act Suit Brought by Victims of Terrorist Attacks Perpetrated by Hamas

Area of Law: Jury Charge; Antiterrorism Act

Issue(s) Presented: Whether the district court erred in charging the jury regarding the "act of international terrorism" element of an Antiterrorism Act claim.

Brief Summary: Plaintiffs-appellees are victims or relatives of victims of terrorist attacks perpetrated in Israel by Hamas, a formally identified foreign terrorist organization. They sued Defendant Arab Bank, PLC ("Arab Bank") for damages under the Antiterrorism Act of 1990 (ATA) pursuant to a provision that affords a civil remedy to United States nationals injured by acts of international terrorism. Following a jury trial, Arab Bank appealed a judgment in the stipulated amount of $100,000,000 entered against it in the United States District Court for the Eastern District of New York. The Second Circuit vacated and remanded, holding that the district court erred in charging the jury on the definition of an "act of international terrorism" under the ATA and that the error was not harmless.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...bf54900f485/4/hilite/

Significance, if Any: This opinion provides insight into future interpretation of the Antiterrorism Act following the enactment of the Justice Against Sponsor of Terrorism Act.

Extended Summary: The sixteen named plaintiffs-appellees are victims, or relatives of victims, of three terrorist attacks perpetrated in Israel by Hamas between March 2002 and June 2003. Plaintiffs commenced actions in the United States District Court for the Eastern District of New York to recover compensatory damages from Defendant Arab Bank, PLC ("Arab Bank" or the "bank") under the Antiterrorism Act of 1990 ("ATA"), 18 U.S.C. § 2333. Specifically, plaintiffs brought suit under §2333(a), the provision of the ATA that affords a civil remedy to United States nationals injured by acts of international terrorism. The United States has formally identified Hamas as a foreign terrorist organization for twenty years. Accordingly, plaintiffs charged the bank with facilitating the attacks at issue by knowingly providing financial services to Hamas, Hamas-controlled charities and the Saudi Committee for the Support of the Intifada Al-Quds, an entity that made payments to families of Hamas suicide bombers.

Arab Bank appealed judgment entered against it in the amount of $100,000,000. The judgment was entered by stipulation following a jury verdict, which held Arab Bank liable under the ATA for injuries sustained by plaintiffs during twenty-four terrorist attacks, including the three attacks at issue. The bank moved for judgment notwithstanding the verdict and for a new trial, however, the district court substantially denied Arab Bank's motions and certified the parties stipulated total damages of $100,000,000.

On appeal, Arab Bank argues that its motions were wrongfully denied on three grounds: (1) the jury was not properly instructed on the "international terrorism" element of an ATA claim, (2) the bank was prejudiced by unwarranted discovery sanctions affecting the presentation of evidence, and (3) the trial evidence was legally insufficient to prove causation. On review, the Second Circuit concluded that the instructional error as to the ATA's act of international terrorism element required vacatur and remand. As a result of this determination, the Court did not have to decide whether any of the bank's other challenges warrant relief because of the parties' settlement agreement forgoes retrial on vacatur and remand in lieu of a specified total money payment to bellwether plaintiffs.

The ATA § 2333(a) provides a civil remedy to persons injured "by reason of an act of international terrorism[.]" The ATA defines "international terrorism" as violent acts that appear to be intended to intimidate, coerce, influence or affect civilians or government in a location primarily outside of the United States. The ATA initially afforded such relief only against principals perpetrating acts of international terrorism, and not secondary actors who facilitated such acts. Thereafter, in September 2016, Congress enacted the Justice Against Sponsors of Terrorism Act ("JASTA"). JASTA, enacted after trial in this case, expanded the ATA civil liability to "any person who aids and abets, by knowingly providing substantial assistance [to], or who conspires with the person who committed such an act of international terrorism." JASTA's terms further state that it applies to civil actions pending on the date of its enactment and arising out of an injury on or after September 11, 2001.

In this case, brought prior to JASTA's enactment, plaintiffs argued that Arab Bank's actions constituted "an act of international terrorism," under ATA § 2331(1), by relying on § 2339B, which makes it a felony to knowingly provide material support to a designated foreign terrorist organization, and recognizes the provision of financial services as a form of material support. On review, the Second Circuit held that conduct that violates a material support statute may also satisfy the § 2331(1) definitional requirements of "international terrorism" in some circumstances, but does not invariably equate to an act of international terrorism. Thus, the Second Circuit held the district court incorrectly instructed the jury that a finding that Arab Bank provided material support to Hamas alone was sufficient to prove the bank's commission of an act of international terrorism under § 2333(a). Rather, the court found that the jury should have been instructed on, and required to find and prove, all of § 2331(1)'s definitional requirements for an act of international terrorism.

The Second Circuit went on to hold that the incorrect jury charge constituted prejudicial error that could not be rendered harmless. Specifically, the court found that neither the jury's causation determination, nor the post-trial enactment of JASTA which provided for "aiding and abetting" ATA liability, eliminated plaintiff's need to prove the § 2331(1) requirements that Arab Bank committed "violent acts that appear to be intended to intimidate, coerce, influence or affect civilians or government in a location primarily outside of the United States." Accordingly, the Second Circuit vacated the judgment and remanded the case to district court for further proceedings that consistent with the opinion.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...bf54900f485/4/hilite/

Panel (if known): Raggi and Carney, Circuit Judges, and Kaplan, District Judge

Argument Date:
05/16/2017

Argument Location: New York, New York

Date of Issued Opinion: 02/09/2018

Docket Numbers: Nos. 16-2119-cv (L), 16-2098-cv (CON), 16-2134-cv (CON)

Decided: Vacated and Remanded.

Case Alert Author: Marina Stinely

Counsel:
Paul D. Clement, Kirkland & Ellis, LLP, Washington, D.C. (Michael H. McGinley, Nicholas T. Matich, Kirkland & Ellis, Washington, D.C.; Jonathan D. Siegfried, Kevin Walsh, Douglas W. Mateyaschuk, DLA Piper LLP, New York, New York, on the brief), for Defendant¿Appellant Arab Bank, PLC; Peter Raven-Hansen, Osen LLC, Hackensack, New Jersey (Gary M. Osen, Ari Ungar, Aaron Schlanger, Osen LLC, Hackensack, New Jersey; Shawn Naunton, Zuckerman Spaeder LLP, New York, New York, on the brief), for Plaintiffs¿Appellees Chana Freedman, Eugene Goldstein, Lorraine Goldstein, Michael Goldstein, Richard Goldstein, and Barbara Goldstein¿Ingardia; Michael E. Elsner, John M. Eubanks, Motley Rice LLC, Mount Pleasant, South Carolina, for Plaintiffs¿Appellees Ayelet Attias, Yossef Cohen, Yehuda Eliyahu, and Raheli Laham. James P. Bonner, Stone Bonner & Rocco LLP, New York, New York; John M. Eubanks, Motley Rice LLC, Mount Pleasant, South Carolina; Noel J. Nudelman, Heideman Nudelman & Kalik PC, Washington, D.C.; Lee S. Shalov, McLaughlin & Stern, LLP, New York, New York; Mark S. Werbner, Sayles Werbner, Dallas, Texas, for Plaintiffs¿Appellees Philip Litle, Elishua Litle, Hannah Litle, Heidi Litle, Josiah Litle, and Noah Litle.

Neal Kumar Katyal, Jessica L. Ellsworth, Mary Helen Wimberly, Hogan Lovells US LLP, Washington D.C., for Amicus Curiae The Hashemite Kingdom of Jordan. Steven T. Cottreau, David D. DiBari, Jeffrey J. Golimowski, Clifford Chance US LLP, Washington D.C., for Amicus Curiae The Institute of International Bankers.

Author of Opinion: Judge Raggi

Circuit:
Second Circuit

Case Alert Circuit Supervisor: Professor Elyse Diamond

    Posted By: Elyse Diamond @ 02/12/2018 07:59 AM     2nd Circuit     Comments (0)  

February 9, 2018
  Consolidation Coal Co. v. Latusek -- Fourth Circuit
24 Years in the Making: Fourth Circuit Supports Award of Black Lungs Benefits

Areas of Law: Labor & Employment Law, Administrative Law

Issues Presented: Whether the award of black lungs benefits due to modification of the denial of benefits was an abuse of discretion. Whether the Administrative Law Judge (ALJ) had substantial evidence when it found Latusek's interstitial pulmonary fibrosis (IPF) was caused by coal dust exposure from his employment at Consolidation Coal Company (Consol).

Brief Summary: The United States Court of Appeals for the Fourth Circuit denied a petition for review of an order by the Benefits Review Board. In support of this finding, the court reviewed with the ALJ's granting of a modification request for abuse of discretion. The court found the ALJ did not abuse his discretion. Additionally, Consolidation Coal contended that the ALJ erred in finding Latusek's IPF was caused by coal dust exposure from Consolidation Coal, and therefore the denial in benefits was based on a mistake of fact. The court found the ALJ's finding that Latusek's IPF was cause by coal dust exposure was supported by substantial evidence.

Extended Summary: Theodore Latusek worked as a coal miner in West Virginia for almost 24 years, all of them for Consolidation Coal, in 1994 he applied for black lungs benefits. The Black Lung Benefits Act provides benefits for individuals who are totally disabled due to pneumoconiosis (also known as black lung disease). 30 U.S.C. § 901(a). In order to receive these benefits, a person must prove: 1) total disability due to black lung disease, and 2) the black lung disease arose out of his employment as a coal miner. See id. at §§901(a), 921; 20 C.F.R. §§ 718.201-204, 725.202.

The Fourth Circuit found that a person denied black lung benefits may, within one year of a final order, request modification of the order based on a change in condition or a mistake in determination of fact. 33 U.S.C. § 922; 30 U.S.C § 932(a); 20 C.F.R. § 752.310.

The parties agreed Latusek had a total disability due to IPF, but disagreed whether his IPF arose out of his employment at Consolidation Coal. Before the present ruling, Latusek's case reached the Fourth Circuit twice. In 1999, the Fourth Circuit vacated a benefits award and remanded for reconsideration. Consolidation Coal Co. v. Latusek, 187 F. 3d 628 (4th Cir. 1999) (unpublished) (Latusek I). In 2004, following proceedings before the ALJ and the Benefits Review Board, Latusek was again awarded benefits. The Fourth Circuit found that the ALJ's decision to award benefits was not supported by substantial evidence. Consolidation Coal Co. v. Latusek, 89 Fed. App'x 373, 374 (4th Cir. 2004) (unpublished) (Latusek II).

Subsequently, Latusek filed a timely request for modification, alleging a mistake in a determination of fact adding new evidence to support his assertion that the IPF was caused by his work in the coalmine. In 2011, the ALJ granted Latusek's modification petition and awarded benefits. The Benefits Review Board affirmed in part, vacated in part, and remanded for further consideration. On remand, the ALJ awarded benefits and the Benefits Review Board affirmed. Subsequently, Consolidation Coal Company brought an appeal in the Fourth Circuit, petitioning for a review of the ALJ's order.

The Fourth Circuit reviewed the 2011 modification request for abuse of discretion. The court found that in support of his modification request, Latusek submitted new evidence to bolster previous evidence that proved the coalmine was the reason for his disease. Therefore doctrines that bar re-litigation were not applicable in this case. The ALJ's decision in 2011 was based on the entire record, not just the evidence available in Latusek II.

Additionally, the court found that the 2011 modification did not annul the final judgment of the Fourth Circuit decision in Latusek II. The court opined that in Latusek II the body of evidence used was not sufficient to prove the IPF was caused by coalmining. However, in 2011 there was more evidence introduced, causing there to be a new review in light of this evidence. This different body of evidence is what was used to make the 2011 determination and therefore it did not nullify the ruling in Latusek II.

Additionally, the court pointed out that Congress's act of expressly including the post-order process of modification in the Black Lung Benefits Act, is a statutory waiver of finality and res judicata.

Finally, the Fourth Circuit reviewed the ALJ's factual finding for substantial evidence. The court deferred to the ALJ's evaluation of conflicting medical opinion. The court found the ALJ adequately weighed the conflicting testimony, analyzed medical studies and articles offered as evidence, and found that Latusek's IPF was caused by coal dust exposure. The court found that the ALJ's conclusion was supported by evidence in the form of: testimony by Latusek's treating physicians, medical articles, pathology reports following Latusek's lung transplant, and pathology experts. Additionally, the ALJ explained why he rejected contrary testimony. The court found that the ALJ "is not required to address exhaustively all potential flaws in evidence." Rather, the ALJ must only "explain why he credited certain evidence and discredited other evidence." Addison, 831 F.3d at 253. The Fourth Circuit ultimately found the ALJ's finding that Latusek's IPF was caused by coal dust exposure at Consolidation Coal was supported by substantial evidence, therefore, the ALJ correctly found a mistake in a determination of fact authorizing modification.

To read the full opinion, click here.

Panel: Gregory, Chief Judge, and Motz and Traxler, Circuit Judges.

Argument Date: 12/5/2017

Date of Issued Opinion: 1/9/2018

Docket Number: 16-1768

Decided: Denied Respondents Petition for Review of an Order of the Benefits Review Board.

Case Alert Author: Tokunbo Ibitoye. Univ. of Maryland Carey School of Law

Counsel: ARGUED: William Steele Mattingly, JACKSON KELLY PLLC, Lexington, Kentucky for Petitioner. Sue Anne Howard, HOWARD LAW OFFICE, Wheeling, West Virginia; Jeffrey Steven Goldberg, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Respondents. ON BREIF: Jeffrey R. Soukup, JACKSON KELLY PLLC, Lexington, Kentucky, for Petitioner. M. Patricia Smith, Solicitor of Labor, Maia S. Fisher, Associate Solicitor, Gary K. Stearman, Counsel for Appellate Litigation, Helen H. Cox, Office of the Solicitor, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C. for Respondent Director, Office of Worker's Compensation Programs.

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/09/2018 06:38 PM     4th Circuit     Comments (0)  

  Greater Baltimore Center for Pregnancy Concerns v. Mayor and City Council of Baltimore -- Fourth Circuit
Sign of the Times: City Ordinance Requiring Public Notice in Non-Abortion Clinics Violates First Amendment

Areas of Law: Constitutional Law, First Amendment, Free Speech

Issue Presented: Whether a local government violates the Free Speech Clause of the First Amendment when it requires non-abortion pregnancy clinics to announce the limitation on their services through signs posted in the waiting room.

Brief Summary: The United States Court of Appeals for the Fourth Circuit determined that the local ordinance in question was to be analyzed with heightened scrutiny due to its regulation of non-commercial, non-professional speech. In applying heightened scrutiny, the court held the ordinance was over-inclusive even though it was motivated by "plainly important" interests in "address[ing] allegedly deceptive advertising and [preventing] health risks that can accompany delays in seeking to end a pregnancy."

Extended Summary: In 2009, Baltimore City enacted an ordinance requiring "any 'limited-service pregnancy center' to post a disclaimer in its waiting room notifying clients that it 'does not provide or make referral for abortion or birth-control services.'" The ordinance defined a "limited-service pregnancy center" as any entity that provided pregnancy-related services, but did not provide information or services related to abortions.

The Greater Baltimore Center for Pregnancy Concerns (GBCFPC) is a non-profit Christian organization that provides non-abortion related pregnancy services. The GBCFPC does not have signs in the waiting room disclosing the capacity of their services, but the disclosure can be found in pamphlets on display in the waiting room. The GBCFPC filed suit under 18 U.S.C. §1983 against the City of Baltimore for violation of the Free Speech Clause of the First Amendment.

First, the Fourth Circuit identified the type of speech that the ordinance was aiming to regulate. The regulation of commercial or professional speech generally receives a lower level of scrutiny "because the regulation is a routine exercise of the state's police power." To identify commercial speech, the court considered three factors: "(1) is the speech an advertisement; (2) does the speech refer to a specific product or service; and (3) does the speaker have an economic motivation for the speech." Greater Baltimore Ctr. for Pregnancy Concerns, Inc. v. Mayor & City Council of Baltimore, 721 F.3d 264 (4th Cir. 2013) (en banc) (citing U.S. Healthcare, Inc. v. Blue Cross of Greater Phila., 898 F.2d 914, 933 (3d Cir. 1990)). Applying these factors in the instant case, the court found that commercial speech was not at issue.

The court then turned to the question of professional speech, and found it was not at issue either. Professional speech is most commonly found in connection with occupations and entities that are subject to comprehensive state licensing, accreditation, or disciplinary schemes. In Maryland, pregnancy centers are not subject to licensure or state regulatory schemes. Nor is there a professional board or disciplinary panel that certifies their employees and regulates their conduct. The court therefore concluded that the speech the ordinance burdens is not professional speech.

Finding that the ordinance did not regulated commercial or professional speech, the court applied heightened scrutiny and required "that compelled disclosures be 'narrowly tailored' to achieve a 'weighty' government interest." Riley v. Nat'l Fed'n of the Blind of N. Carolina, Inc., 487 U.S. 781, 798 (1988). In this regard, the court found that the City's interests in addressing allegedly deceptive advertising and preventing health risks that accompany delays in seeking to end a pregnancy were "plainly important." However, the court further found there was little to no evidence to support the contention that any deception or harm had actually occurred. The court did note that if evidence existed to demonstrate that the public was in fact being harmed or misled by deceptive advertisements this requirement could be met.

Next, the court found the ordinance was "quite over-inclusive. It applies to pregnancy centers without regard to whether their advertising is misleading, or indeed whether they advertise at all." Finally, the court noted that less restrictive means existed to achieve the same ends. For example, the court pointed out that the City itself could communicate the desired information directly to the public, or could combat misleading advertising by direct application of laws addressing such concerns.

In holding that the ordinance, as applied, violated the GBCFPC's First Amendment rights, the court differentiated its holding from that of Nat'l Inst. of Family & Life Advocates v. Harris, 839 F.3d 823 (9th Cir. 2016), cert. granted sub nom., Nat'l Inst. of Family & Life Advocates v. Becerra, No. 16-1140 (U.S. Nov. 13, 2017). The court noted that the Ninth Circuit in Harris applied the lower level of scrutiny applicable for commercial speech because the pregnancy centers at issue there were licensed by the state.

To read the full opinion, click here.

Panel: Wilkinson, Duncan, and Agee, Circuit Judges.

Argument Date: 10/24/2017

Date of Issued Opinion: 01/05/2018

Docket Number: 16-2325

Decided: Affirmed by published opinion. Judge Wilkinson wrote the opinion, in which Judge Duncan and Judge Agee joined.

Case Alert Author: Reagan Greenberg, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Suzanne Sangree, BALTIMORE CITY LAW DEPARTMENT, Baltimore, Maryland, for Appellants. David William Kinkopf, GALLAGHER EVELIUS & JONES LLP, Baltimore, Maryland, for Appellee. ON BRIEF: Molly R. Duane, Autumn C. Katz, Stephanie Toti, CENTER FOR REPRODUCTIVE RIGHTS, New York, New York, for Appellants. Peter J. Basile, FERGUSON, SHETELICH & BALLEW, PA, Baltimore, Maryland; Steven G. Metzger, Anatoly Smolkin, GALLAGHER EVELIUS & JONES LLP, Baltimore, Maryland; Mark L. Rienzi, THE BECKET FUND FOR RELIGIOUS LIBERTY, Washington, D.C., for Appellee. Simona G. Strauss, P. Casey Mathews, Palo Alto, California, Veronica R. Jordon-Davis, SIMPSON THACHER & BARTLETT LLP, New York, New York, for Amicus Public Health Advocates. Douglas W. Baruch, Washington, D.C., Janice Mac Avoy, Jennifer L. Colyer, Andrew B. Cashmore, Leigh G. Rome, FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP, New York, New York, for Amicus International Municipal Lawyers Association. Priscilla Joyce Smith, YALE LAW SCHOOL, Brooklyn, New York, for Amicus The Information Society Project at Yale Law School. Kimberly A. Parker, Lesley Fredin, Washington, D.C., Paloma Naderi, WILMER CUTLER PICKERING HALE AND DORR LLP, Boston, Massachusetts, for Amici NARAL Pro-Choice Maryland, NARAL Pro-Choice America, Baltimore Abortion Fund, Catholics for Choice, DC Abortion Fund, Maryland Chapter for the National Organization for Women, National Abortion Federation, Planned Parenthood of Maryland, Religious Coalition for Reproductive Choice, Whole Woman's Health of Baltimore, Incorporated, Women's Law Center of Maryland, The Honorable Christopher Van Hollen, Jr., and The Honorable Elijah Cummings. Andrea Picciotti-Bayer, THE CATHOLIC ASSOCIATION, McLean, Virginia; Jack Ryan Terziu, Baltimore, Maryland, for Amici Ebony Harris, Ethan Taylor, Linda Holliday, Nicole Howard, Destinie Jackson, and Jennera Smalls. Edward L. White III, Erik M. Zimmerman, Ann Arbor, Michigan, Frances J. Manion, Geoffrey R. Surtees, AMERICAN CENTER FOR LAW AND JUSTICE, New Hope, Kentucky, for Amicus American Center for Law and Justice. Anna F. Paprocki, Deanna M. Wallace, AMERICANS UNITED FOR LIFE, Arlington, Virginia, for Amicus National and Local Pregnancy Care Organizations. Thomas C. Berg, Religious Liberty Appellate Clinic, UNIVERSITY OF ST. THOMAS SCHOOL OF LAW, Minneapolis, Minnesota; Kimberlee Wood Colby, Christian Legal Society, CENTER FOR LAW AND RELIGIOUS FREEDOM, Springfield, Virginia, for Amici Democrats for Life of America, Institutional Religious Freedom Alliance, and Christian Legal Society. Kevin H. Theriot, Elissa M. Graves, Scottsdale, Arizona, David A. Cortman, ALLIANCE DEFENDING FREEDOM, Lawrenceville, Georgia, for Amici National Institute of Family and Life Advocates and Heartbeat International. Frederick W. Claybrook, Jr., CLAYBROOK LLC, Washington, D.C.; Steven W. Fitschen, THE NATIONAL LEGAL FOUNDATION, Virginia Beach, Virginia, for Amicus National Legal Foundation. Patrick Morrisey, Attorney General, Elbert Lin, Solicitor General, Thomas M. Johnson, Jr., Deputy Solicitor General, Erica N. Peterson, Assistant Attorney General, OFFICE OF THE ATTORNEY GENERAL OF WEST VIRGINIA, Charleston, West Virginia, for 4 Amicus State of West Virginia. Steven T. Marshall, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF ALABAMA, Montgomery, Alabama, for Amicus State of Alabama. Leslie Rutledge, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF ARKANSAS, Little Rock, Arkansas, for Amicus State of Arkansas. Derek Schmidt, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF KANSAS, Topeka, Kansas, for Amicus State of Kansas. Bill Schuette, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MICHIGAN, Lansing, Michigan, for Amicus State of Michigan. Douglas J. Peterson, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF NEBRASKA, Lincoln, Nebraska, for Amicus State of Nebraska. Michael DeWine, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF OHIO, Columbus, Ohio, for Amicus State of Ohio. Alan Wilson, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF SOUTH CAROLINA, Columbia, South Carolina, for Amicus State of South Carolina. Ken Paxton, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF TEXAS, Austin, Texas, for Amicus State of Texas. Sean D. Reyes, Attorney General, OFFICE OF THE ATTORNEY GENERAL OF UTAH, Salt Lake City, Utah, for Amicus State of Utah. Blaine H. Evanson, Daniel Nowicki, GIBSON, DUNN & CRUTCHER LLP, Los Angeles, California, for Amicus Dr. Kesten C. Green. C. Kevin Marshall, David T. Raimer, Catherine Maggio Schmucker, JONES DAY, Washington, D.C., for Amici Law Professors. Daniel P. Collins, Adam P. Barry, MUNGER, TOLLES & OLSON LLP, Los Angeles, California, for Amici Ethics & Religious Liberty Commission, International Society for Krishna Consciousness, Incorporated, and Archdiocese of Baltimore.

Author of Opinion: Judge Wilkinson

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/09/2018 06:10 PM     4th Circuit     Comments (0)  

February 7, 2018
  In re Complaint of Judicial Misconduct
Headline: Second Circuit Judicial Council Closes Investigation Into Allegations of Sexual Misconduct by Ninth Circuit Judge Alex Kozinski, Due to his Immediate Retirement
Area of Law: Judicial Ethics

Brief Summary: On December 15, 2017, the Chief Justice of the Ninth Circuit charged the Judicial Council of the Second Circuit with investigating a complaint pursuant to the Judicial Conduct and Disability Act of 1980, 28 U.S.C. § 351 (b) (the "Act"), and Rule 5(a) of the Rules for Judicial Conduct and Judicial-Disability Proceedings. The complaint included allegations of inappropriate misconduct by then-Circuit Judge Alex Kozinski toward law clerks.

Very shortly after the transfer of proceedings to the Second Circuit Judicial Council, then-Judge Kozinski resigned and relinquished his office. By resigning, former-Judge Kozinski placed himself outside the parameters of the Act, which only applies to individuals who currently exercise the powers of the office of federal judge. As a result of the resignation, the Judicial Council had to conclude the proceedings and could not address the merits of the complaint.

The Judicial Council did, however, acknowledge the seriousness of the allegations.
It noted that a Federal Judiciary Workplace Conduct Working Group has now been formed to review the safeguards in place within the judiciary to protect employees from inappropriate conduct. It also requested that its order be shared with any relevant Congressional committees and that the Secretary of the Judicial Council forward a copy of the order to all other judicial councils.

Date of Issued Order: 02/05/2018

Docket Number: No. 17-90118-jm

Case Alert Author: Marina Stinely

Author of Opinion: Judicial Council of the Second Circuit

Case Alert Circuit Supervisor: Professor Emily Gold Waldman

    Posted By: Emily Waldman @ 02/07/2018 09:47 AM     2nd Circuit     Comments (0)  

February 5, 2018
  In Re Processed Egg Products Antitrust Litigation - Third Circuit
Headline: Antitrust standing exists for plaintiffs even when damages include contributions by non-conspirators.

Area of Law: Antitrust Law, Clayton Act

Issue(s) Presented: Whether §4 of the Clayton Act allows plaintiffs to sue for treble damages when the alleged damages include contributions from non-conspiring parties.

Brief Summary: Plaintiffs represented direct purchasers of egg products from defendant suppliers. Plaintiffs sought antitrust standing under §4 of the Clayton Act, 15 U.S.C. §15(a), to sue defendants for price-fixing scheme that resulted in overcharging for egg products. Plaintiffs alleged damages and expert analysis included contributions of eggs from non-conspirators to the price-fixing scheme. The District Court granted defendants' motion for summary judgment based on previous Third Circuit and Supreme Court decisions. The Third Circuit reversed, considering the issue a matter of first impression that went beyond the current precedents cited by the District Court. The Third Circuit held that the plaintiffs did have antitrust standing and remanded the case for further proceedings, without ruling on the merits of plaintiff's claims.

Extended Summary: The plaintiffs (Kraft Foods Global, Inc., Kellogg Company, General Mills, Inc., and Nestle USA, Inc.) filed this antitrust litigation against the defendants, who were the direct suppliers of egg products to the plaintiffs. The suit alleges that the defendants conspired to reduce the number of egg-laying hens available. By reducing this number, the defendants reduced the overall number of eggs available for market. Eggs are distributed as both "shell eggs" - which are purchased by consumers at grocery stores - and "egg products" - which are primarily purchased by manufacturers like the plaintiffs.

Because the alleged conspiracy occurred at the highest level of egg production, plaintiffs alleged that its effects are felt in several ways. First, all egg products begin as shell eggs laid by hens. Therefore, a reduction in the supply of shell eggs resulted in an artificial increase in the price of egg products. Second, the defendants purchased shell eggs from non-conspirators to supplement their production of egg products. Because the defendants reduced the overall number of eggs, the shell eggs of the non-conspirators were also artificially overpriced.

In order for the plaintiffs to have antitrust standing, they must meet a series of factors set forth by the Supreme Court. Antitrust standing requires more that the "injury in fact," "causation," and "redressability" requirements of regular standing. Plaintiffs must allege both a direct causal relationship between the antitrust violation and the harm suffered, as well as the defendants' intent to cause such harm. Courts will also consider whether there are other potential plaintiffs with a more direct claim, whether the alleged injuries by the plaintiff are the kind that the law was intended to protect, and whether allowance of standing would create a risk of exposing defendants to duplicative damages by other plaintiffs.

Three precedential court decisions were relied on by the courts in this matter: Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) ("Illinois") and MidWest Paper Products Co. v. Continental Group, Inc., 596 F.2d 573 (3d Cir. 1979) ("MidWest") were cited by both the District Court and the Third Circuit. The Third Circuit also relied on In re Sugar Industry Antitrust Litigation (Stotter & Co., Inc. v. Amstar Corp.), 579 F.2d 13 (3d Cir. 1978) ("Stotter").

In Illinois, the Supreme Court held that pass-through harm is not grounds for antitrust standing. The plaintiffs in Illinois were not direct purchases of the allegedly overpriced products. The Court held that only direct purchasers of products from conspirators have standing. The Court's purpose was to prevent ancillary lawsuits and avoid a complex distribution problem between numerous purchasers down the chain.

In MidWest, the Third Circuit similarly held that plaintiffs must be in a direct purchasing relationship with the defendant conspirators. The plaintiff purchased products from a direct competitor of the defendants. However, the plaintiff alleged that due to the artificially increased prices of the defendants, the competitors were able to increase their prices as well. The Third Circuit held that the plaintiffs lacked standing because they never purchased any products directly from the defendants.

In Stotter, the plaintiff purchased candy directly from the defendant, a sugar distributor. The alleged price-fixing scheme involved the sugar that the defendant produced, which it used in its candy. The Third Circuit held that even though the sugar was only one element of the candy, the defendant could not escape antitrust litigation simply by including the price-fixed product into another product. Additionally, the plaintiff was also a direct purchaser from the defendant and thus had standing. The Third Circuit supported this conclusion in part by reasoning that if the plaintiff did not have standing to bring the suit based on its relationship with the defendant, then no one did.

The District Court for the Eastern District of Pennsylvania, relying on these precedents, held that the plaintiffs lacked standing because of their inclusion of the non-conspirators' eggs in their calculation of damages. The District Court held that there was no direct relationship between the plaintiffs and the non-conspirators to justify their inclusion in the lawsuit or in the calculation of damages.

The Third Circuit reversed. It held that while the District Court was right to cite Illinois and MidWest, the issue presented in this case was one of first impression. The Third Circuit held that the courts have never before considered the combination of both conspirator and non-conspirator products. Regardless of the merits of the claim, the plaintiffs had antitrust standing because they met the factors laid out by the Supreme Court. Plaintiffs maintained a direct purchaser relationship with the defendants, the alleged injury is the type that antitrust litigation is intended to redress, there are no more direct victims, there is no potential for duplicative recovery, and there are no complex apportionment of damages problems.

The Third Circuit reversed and remanded for further proceedings. The court confined its decision to the issue of standing and did not address the merits of the plaintiff's claim.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/163795p.pdf

Panel: Smith, Chief Judge, Fuentes, Circuit Judge, and Stark, Chief District Judge for the District of Delaware.

Argument Date: July 11, 2017

Date of Issued Opinion: February 2, 2018

Docket Number: 16-3795

Decided: Reversed and remanded

Case Alert Author: Michael R. DeAngelo

Counsel: Richard P. Campbell, James T. Malysiak, Michael T. Brody for Appellants; Carrie C. Mahan, William L. Greene, Ruth S. Shnider, Brian E. Robison, Christine C. Levin, Jennings F. Durand, Donald M. Barnes, Jay L. Levine, Molly S. Crabtree, Michael L. Scheier, Joseph M. Callow, Jr., Jan P. Levine, Robin P. Sumner, Whitney R. Redding for Appellees.

Author of Opinion: Stark, Chief District Judge

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Mark C. Rahdert

    Posted By: Susan DeJarnatt @ 02/05/2018 10:53 AM     3rd Circuit     Comments (0)  

  Mario Alberto Lopez Garza v. Citigroup Inc. - Third Circuit
Headline: Attorneys' fees can only be awarded un Federal Rule of Civil Procedure 41(d) when the substantive law of the suit defines costs to include attorneys' fees

Area of Law: Federal Rules of Civil Procedure

Issue(s) Presented: Whether Federal Rule of Civil Procedure 41(d) allows for the collection of attorneys' fees in addition to other costs incurred by a defendant.

Brief Summary: Federal Rule of Civil Procedure 41(d) states that when a plaintiff voluntarily dismisses a suit and then refiles a second suit raising the same claim as the first, the plaintiff must pay any costs incurred by the defendant. Appellant sought payment for attorneys' fees as part of the costs incurred by first lawsuit. The District Court held that Rule 41(d) can only award attorneys' fees if the substantive statute of the lawsuit defines costs to include attorneys' fees.

Extended Summary: On July 29, 2014 the estate of Hans Jorg Schneider Sauter ("The Estate") filed a complaint against Citibank (and several other financial institutions) in the Southern District of New York seeking relief in the form of a court order releasing information pertaining to Sauter's accounts. The claims included various fraud statutes, including alleged Racketeer
Influenced and Corrupt Organizations Act ('RICO') Infractions, 18 U.S.C. §§ 1961-1968. After several motions, the Estate filed motion to voluntarily withdraw its complaint on December 12, 2014. Citibank and the other financial institutions filed a motion for the court to dismiss the case with prejudice. The Southern District of New York denied the motion to dismiss and upheld the voluntary withdrawal.

On June 25, 2015, the Estate filed a second suit in the District of Delaware, but only named Citibank as defendant. Citibank filed a motion under Federal Rule of Civil Procedure 41(d), asking for costs incurred by the first suit, and a stay of the current suit until such costs were paid. Additionally, Citibank asked the District Court to award attorneys' fees as part of the costs. The District Court granted both the costs and the stay; however, it denied the awarding of attorneys' fees. The District Court held that under no circumstance can attorneys' fees be awarded, because there is no such language in Rule 41(d) that states attorneys' fees are part of costs.

The Third Circuit affirmed the District Court's ruling, but on different grounds. The Third Circuit considered three options for handling attorneys' fees as part of awarding costs under Rule 41(d). The other circuit courts around the country are split on which of the three options is proper when deciding whether to include attorneys' fees as costs.

First, the Eighth Circuit has held that attorneys' fees should always be awarded as part of costs. Evans v. Safeway Stores, Inc., 623 F.2d 121, 122 (8th Cir. 1980). The Third Circuit, however, stated that such logic runs afoul of the "American Rule," in which each litigant typically pays its own attorneys' fees. The Third Circuit considers the American Rule a "bedrock" of American legal practice. Furthermore, Congress did not define "costs" to include attorneys' fees, and the Eighth Circuit failed to find any express authority for the awarding of attorneys' fees under Rule 41(d). Citibank argued that as a policy decision, attorneys' fees should always be awarded in order to act as a proper deterrent to filing repetitious lawsuits. The Third Circuit refused to make such a policy decision, because only Congress has the authority to make such policy.

Second, there is the option chosen by the District Court, which states that attorneys' fees may never be awarded a position taken by the Sixth Circuit. Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 874 (6th Cir. 2000). However, the Third Circuit held that the District Court's reliance on the definition of "costs," which does not expressly include attorney's fees, was incomplete because it treated the term "costs" as though it were unambiguous, rather than inquiring into Congress's intent in using the term without precise definition in Rule 41(d).

Finally, the Third Circuit agreed with the Seventh Circuit's analysis in Esposito v. Piatrowski, 223 F.3d 497, 501 (7th Cir. 2000) - which has also been followed by the Fourth Circuit in Andrews v. Am.'s Living Ctrs., LLC, 827 F.3d 306, 310 (4th Cir. 2016) - that attorneys' fees can be awarded in some circumstances, where the underlying substantive statute provides for them. The fact that the drafters of Rule 41(d) left the term "costs" undefined signifies that there are some situations in which the costs could include attorneys' fees. The Third Circuit reasoned that Congress has drafted some substantive statutes to allow for the award of attorneys' fees to litigants, and where this has been done they may be granted under Rule 41(d). In this way, Congress honors the American Rule because it only provides certain circumstances under which attorneys' fees can be awarded. Therefore, in cases where the substantive statutes award attorneys' fees, they can also be included in costs award under Rule 41(d).

The substantive statutes at issue in the present case do not award attorneys' fees. Therefore, they can not be awarded as part of the costs under Rule 41(d).

Citibank also attempted to seek an award of attorneys' fees because the Estate had acted in bad faith. A determination of bad faith would allow the Court to award attorneys' fees. However, Citibank failed to raise this issue at the District Court, citing only the Rule 41(d) motion as its grounds for the award. Because the issue was not preserved at trial, the Third Circuit ruled that Citibank could not raise that issue on appeal.

The Third Circuit affirmed the order of the District Court denying the award of attorneys' fees.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/171039p.pdf

Panel: Ambro, Krause, Circuit Judges; and Conti, Chief District Judge of the Western District of PA

Argument Date: September 27, 2017

Date of Issued Opinion: February 2, 2018

Docket Number: No. 17-1039

Decided: Affirmed

Case Alert Author: Michael R. DeAngelo

Counsel: Amy L. Barton, Esq., Bruce A. Birenboim, Esq., and Stephen P. Lamb, Esq. for Appellant; Susan L. Burke, Esq., and Thomas G. Macauley, Esq. for Appellee

Author of Opinion: Conti, Chief District Judge

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Mark C. Rahdert

    Posted By: Susan DeJarnatt @ 02/05/2018 10:50 AM     3rd Circuit     Comments (0)  

  Colleen M. Bradley v. West Chester University, et al. - Third Circuit
Headline: Speech Made by a Public Employee in her Official Duties is not Protected by the First Amendment. Public University and Pennsylvania State System of Higher Education are Entitled to Eleventh Amendment Immunity Protection.

Area of Law: Civil Rights; State Sovereign Immunity

Issue(s) Presented: Is a public employee protected by the First Amendment when the employee shared concerns about her employer's budget practices with colleagues and was later terminated as a result? Are a state university and the Pennsylvania State System of Higher Education entitled to Eleventh Amendment Immunity Protection?

Brief Summary: Colleen Bradley was employed in an administrative position at West Chester University of Pennsylvania. While employed, she engaged in speech sharing her concerns about one of the school's budget documents at internal administrative meetings with her colleagues. After doing so, she was informed by her supervisor that her employment contract would not be renewed. Ms. Bradley alleged that her speech was protected by the First Amendment, and that her termination was in retaliation for that speech. Ms. Bradley sued the school, the Pennsylvania State System of Higher Education, her supervisor, and several other administrators. The Third Circuit found that Ms. Bradley's speech was not protected by the First Amendment, as it was made in her official capacity as a public employee. The Court also held that the university and State system were entitled to Eleventh Amendment immunity.

Extended Summary: Colleen Bradley was employed as the Director of Budget and Financial Planning at West Chester University of Pennsylvania ("WCU"). Part of Ms. Bradley's job was to review WCU's budget creation process and recommend improvements, as well as to attend and participate in various administrative meetings. She was supervised by the Vice President of Finance and Administration, Mark Mixner. One of Ms. Bradley's regular duties was to assist in preparing WCU's annual budget report ("BUD Report"). The BUD Report was submitted to the Pennsylvania State System of Higher Education ("PASSHE"). PASSHE compiled the BUD report from its member universities and submitted them to the Commonwealth for appropriation purposes. While creating the BUD Report in 2012, Ms. Bradley was given instructions by a PASSHE administrator to increase the "Transfer to Plant" line item by several million dollars. As a result, the report showed a multi-million-dollar deficit, instead of a multi-million-dollar surplus. Ms. Bradley believed that this "swing" was purposely designed to create a misleading impression and questioned the administrator about the practice. The administrator informed her that the BUD report was a political document, and that if she did not present this deficit WCU's appropriation money was at risk. Ms. Bradley spoke to Mr. Mixner, who urged Ms. Bradley to cooperate with the administrator's request. At one of the Administrative Budget Committee ("ABC") meetings that Ms. Bradley regularly attended, she expressed her views that the PASSHE requested alterations were unethical, and potentially illegal, and that it was her responsibility to bring this matter to the committee's attention. After the meeting, Mr. Mixner expressed his displeasure with Ms. Bradley's comments, and informed her that her credibility and her future was at risk.

Two years later, in October 2014, Mr. Mixner asked Ms. Bradley to assist him in preparation for a meeting with WCU's Enrollment Management Committee ("EMC"). The purpose of this meeting was to prepare for a presentation that would be given to a group of WCU's "opinions leaders" the next day. Mr. Mixner indicated his desire to use a version of the budget which included "non-discounted" scenarios. Ms. Bradley interpreted this to mean that the version of the budget inflated expenses. During the EMC meeting, Ms. Bradley presented Mr. Mixner's budget, which showed a $15 million deficit. At the end of the meeting, an EMC member questioned how such a deficit was possible, when he believed that WCU had an $11 million surplus. Ms. Bradley explained that Mr. Mixner had chosen this version of the budget, and proceeded to present an alternative version of the budget, which she believed better represented reality. At an "opinions leaders" presentation the following day, Ms. Bradley refused to present Mr. Mixner's version of the budget and sought to present her version. Mr. Mixner denied this request, and instead presented his version of the budget himself. A few weeks later, at an in-person meeting, Mr. Mixner informed Ms. Bradley that her contract would not be renewed because she was not a cultural fit for the university. Mr. Mixner sent a letter to Ms. Bradley shortly after the meeting, formalizing the decision to not renew her contract. Ms. Bradley's contract was set to expire on June 30, 2015.

Ms. Bradley filed this Complaint against Mr. Mixner, WCU, PASSHE, and other administrators on May 14, 2015. She alleged 1) her termination was unconstitutional retaliation for speech protected by the First Amendment, 2) her termination was an unlawful retaliation under the state's whistleblower law, and 3) that the defendants' actions constituted intentional and negligent infliction of emotional distress. The District Court dismissed all of Ms. Bradley's claims against the University and PASSHE, holding that those institutions were entitled to immunity under the Eleventh Amendment. The District Court also granted summary judgment in favor or Mr. Mixner, holding that, although Ms. Bradley's speech was constitutionally protected, Mr. Mixner was entitled to qualified immunity. Ms. Bradley appealed these decisions.

The Third Circuit affirmed both rulings of the District Court. The Court also found that Ms. Bradley's speech was not constitutionally protected. The Court stated that when inquiring into First Amendment retaliation, the Supreme Court of the United States requires a two-part analysis. First, the Court must assess whether the speech at issue was constitutionally protected. Then, the Court must analyze whether the government had an adequate justification for treating the employee differently than the general public, based on its needs as an employer. Speech by government employees is constitutionally protected when the employee is speaking as a citizen, not an employee, and when the speech involves a matter of public concern. If the speech does not meet these standards, then the employee has no First Amendment cause of action based on her employer's reaction to the speech.

The Supreme Court has found that if a public employee is making a statement pursuant to the employee's official duties, then the employee is not speaking as a citizen for First Amendment purposes. Therefore, the Constitution does not insulate such communications from employer discipline. Garcetti v. Ceballos, 547 U.S. 410, 417 (2006); Lane v. Franks, 134 S. Ct. 2369, 2374 (2014). In this case, the Court held that Ms. Bradley was not speaking as a citizen at the EMC meeting. The Court stated that Ms. Bradley's case fit squarely within framework of past Third Circuit precedent, which held that employee's speech made pursuant to their office duties was not protected. Ms. Bradley was performing the duties within her job description, including attending the EMC meeting at the request of her direct supervisor and presenting alternative budgets. Because she was acting pursuant to her official duties, Ms. Bradley was acting as a public employee, not as a citizen. The Court held that she failed to state a First Amendment claim, as her speech was not protected, and affirmed the District Court's granting of summary judgment to Mr. Mixner.

Ms. Bradley also challenged the District Court's decision that PASSHE and WCU were entitled to Eleventh Amendment immunity, which shields states and certain state-affiliated entities from suits for damages in federal court. The Court used a three-step balancing test (the Fitchik factors, initially set out in Fitchik v. N.J. Rail Operations, Inc., 873 F.2d 655 (3d Cir. 1989) (en banc)), to determine whether the State affiliated entity was an arm of the state that fell within the domain of the Eleventh Amendment.

The first factor, the funding factor, balances on whether the money that would pay for a judgment would come from the state. Here, the Defendants conceded that this factor weighed in Ms. Bradley's favor, as the Commonwealth's treasury is shielded from WCU's and PASSHE's liability by Pennsylvania law.

The second factor looks at the status of the agency under state law. The Court analyzed whether the Commonwealth itself considered WCU and PASSHE an arm of the Commonwealth. The Court looked at: a) explicit statutory indications about how the entity should be regarded; b) case law from the state courts regarding the entity's immunity or status as an arm of the Commonwealth; and c) whether the entity was subject to laws for which the Commonwealth itself has waived its own immunity. The Third Circuit also considered several other factors, including if the entity is separately incorporated, if the agency can sue or be sued in its own right, whether it is immune from state taxation, whether it can exercise the power of eminent domain, whether it is subject to state administrative procedure and civil service laws, whether it can enter into contracts and make purchases on its own behalf, and whether the entity owns real estate. Here, the Court found because state law consistently treated PASSHE and its universities as an arm of the Commonwealth, the second factor weighs in favor of the Defendants. While there were contrary considerations, including the fact that PASSHE is separately incorporated and has the ability to sue in its own name, the Court found that these factors dealt more with form than function.

Finally, the third factor, the autonomy factor, assesses the degree of autonomy possessed by the agency. The Court analyzed the entity's governing structure and the oversight and control exerted by the Commonwealth's governor and legislature. The Court held that PASSHE and its universities are not autonomous, and are instead subject to substantial state supervision and control. The structure of PASSHE and its universities placed significant constraints on the institutions' autonomy. For example, PASSHE is governed by a Board of Governors, who exercise the powers of PASSHE. The Board's members include the Governor, the State Secretary of Education, members of the General Assembly, and members appointed by the Governor, with the advice and consent of the State Senate. PASSHE universities are also headed by a separate Council of Trustees. The Council's members are appointed by the Governor, or require State Senate confirmation. Statutory barriers around PASSHE and its universities' autonomy also exist. For example, while PASSHE may acquire real property, the General Assembly must approve before it can dispose of the property. If the entity enters into a collective bargaining agreement with its employees, it must make a coalition bargaining arrangement with the Commonwealth if negotiating with noninstructional employees. Further, PASSHE and its universities are subject to significant reporting requirements and rules for internal governance. The Court held that, because there are many indicia of state control over PASSHE and its universities, as well as significantly constrained governing structure, PASSHE and its universities maintained only limited autonomy from the state. Therefore, the third factor weighed strongly in favor of the Defendants.

Because two of the three Fitchik factors weighed strongly towards the Defendants, the Court held that the institutions were entitled to Eleventh Amendment immunity from Ms. Bradley's claims in federal court.

The Court held that, because Ms. Bradley was not speaking as a citizen at the EMC meeting, she had no First Amendment claim, and affirmed the District Court's grant of summary judgment in favor of Mr. Mixner. Further, the Court affirmed the District Court's dismissal of the First Amendment retaliation count against WCU and PASSHE.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/171588p.pdf

Panel: Smith, Chief Judge, Hardiman, Circuit Judge, and Brann, District Judge

Argument Date: November 8, 2017

Date of Issued Opinion: January 26, 2018

Docket Number: No. 17-1588

Decided: Affirmed.

Case Alert Author: Rachel N. Costello

Counsel: Daniel J. Kearney, Esq., & Edward S. Mazurek, Esq. - Counsel for Appellant; Josh Shapiro, Esq., John G. Knorr, III, Esq., & Stephen R. Kovatis, Esq. - Counsel for Appellees

Author of Opinion: Brann, District Judge.

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Mark C. Rahdert

    Posted By: Susan DeJarnatt @ 02/05/2018 10:48 AM     3rd Circuit     Comments (0)  

February 1, 2018
  Penske Logistics LLC v. Freight Drivers and Helpers Local Union No. 557 Pension Fund -- Fourth Circuit
Fourth Circuit Runs Over Arbitrator for Applying Wrong Burden of Proof in Trucking Company Dispute

Areas of Law: ERISA, Arbitration

Issue Presented: Whether the district court erred in affirming an arbitrator's decision that a trucking company was not liable for its subsidiary's withdrawal from a pension fund.

Brief Summary: In an unpublished opinion, the United States Court of Appeals for the Fourth Circuit held that the district court improperly affirmed an arbitrator's finding that placed the burden of proof on the incorrect party.

Extended Summary: In 1995, Penske Logistics LLC ("Penske") expanded its trucking operation by acquiring Leaseway Motorcar Transport Co. ("Leaseway"). Leaseway had been a longtime contributor on behalf of its employees to the Freight Drivers and Helpers Local Union No. 557 Pension Fund (the "Fund"). Its contributions continued after the sale. Eight years later, Penske sold all of the stock in Leaseway to Performance Logistics Group. Shortly thereafter, Leaseway and Performance Logistics Group filed for bankruptcy and ceased making contributions to the Fund.

The Fund ultimately sued Penske for nearly $10 million in lost Leaseway payments, alleging that Penske sold Leaseway in attempt to avoid making Fund payments. An arbitrator disagreed and the U.S. District Court for the District of Maryland affirmed the arbitration award in favor of Penske. The Fund then appealed to the Fourth Circuit.

The Fourth Circuit reversed, and held that the arbitrator applied an incorrect burden of proof in analyzing the purposes for which Penske sold Leaseway. The district court's affirmance was vacated and the case was remanded for further proceedings.

The Fourth Circuit first laid out the statutory framework of the Employee Retirement Income Security Act of 1974 ("ERISA") and the Multiemployer Pension Plan Amendments Act of 1980 ("MPPA"). That framework provides that when a company pulls out of a pension fund, the company must pay a "withdrawal liability" which is generally equivalent to the member's proportionate share of the plan's unfunded vested benefits "in rough proportion" to the member's "participation in the plan over the last 5 to 10 years." Borden, Inc. v. Bakery & Confectionary Union & Indus. Int'l Pension, 974 F.2d 528 (4th Cir. 1992). An "unfunded vested benefit" occurs when a participant has earned the right to receive pension benefits, but the total amount owed the participant exceeds the value of the plan's current assets. In deciding who is responsible for paying the withdrawal liability, the court then noted that all businesses under common control are treated as a single employer. Thus, if any member of a controlled group withdraws from a fund, every other member of the controlled group is liable for the withdrawal.

There is one circumstance, however, where this rule does not apply. A parent company is not responsible for the withdrawal liability of its subsidiary once the parent has sold the stock of the subsidiary, unless a primary purpose of the sale was to avoid paying the withdrawal liability. 29 U.S.C. § 1392(c). Before bringing a lawsuit, a fund's designated plan administrators must initially determine that a sale's principal purpose was to evade withdrawal liability. The fund administrators' finding is presumed correct, so the burden then shifts to the employer to disprove the sponsors' factual determination by a preponderance. 29 U.S.C. § 1401(a)(3)(A).

In analyzing the merits of the Fund's appeal, the Fourth Circuit held that the district court erred in affirming the arbitrator's award because the arbitrator "erroneously placed the burden on the Fund" to prove that a primary purpose of the sale was to evade withdrawal liability. The court specifically relied on the arbitrator's statement that "[t]here was no direct evidence of any intent to evade or avoid withdrawal liability by Penske," noting that instead, the arbitrator "should have found evidence disproving that Penske intended to evade or avoid withdrawal liability." While the Fund's plan administrators had the initial task of making a determination as a prerequisite to sue, the employer had the burden to disprove the plan administrators' factual finding once suit was filed. Upon this distinction, the court vacated and remanded the case for further proceedings.

Judge Diaz dissented, stating that Penske offered critical evidence, which the arbitrator relied on, demonstrating several key business motivations, noting that a principal purpose of the sale was not to avoid withdrawal liability. While the arbitrator's wording and syntax might have been improper, "that alone does not constitute legal error," according to Judge Diaz.

To read the full opinion, click here.

Panel: Judges Traxler, Diaz, and Floyd

Argument Date: 09/13/2017

Date of Issued Opinion: 01/10/2018

Docket Number: No. 16-2115

Decided: Decided by unpublished opinion

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

Counsel: Corey Smith Bott, ABATO, RUBENSTEIN AND ABATO, P.A., Baltimore, Maryland, for Appellants. David R. Levin, DRINKER BIDDLE & REATH LLP, Washington, D.C., for Appellees. ON BRIEF: Paul D. Starr, ABATO, RUBENSTEIN AND ABATO, P.A., Baltimore, Maryland, for Appellants. Brian A. Coleman, Washington, D.C., Mark E. Furlane, DRINKER BIDDLE & REATH LLP, Chicago, 2 Illinois, for Appellees

Author of Opinion: Judge Floyd

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/01/2018 11:32 AM     4th Circuit     Comments (0)  

January 26, 2018
  Greenfield v. Medco Health Solutions, Inc. - Third Circuit
Headline: Third Circuit Holds That a Successful False Claims Act Lawsuit Does Not Require a Showing That Benefits Were Received as a Direct Result of Illegal Kickbacks But Does Require Some Degree of Connection Between the Two

Area of Law: Healthcare

Issue(s) Presented: Under the False Claims Act, what link is sufficient to connect an alleged kickback scheme to a subsequent claim for reimbursement.

Brief Summary:

Accredo Health Group, Inc. ("Accredo"), a specialty pharmacy, made charitable donations to two charities, Hemophilia Services, Inc. ("HSI") and Hemophilia Association of New Jersey ("HANJ"). In turn the charities allegedly referred and recommended hemophilia patients to Accredo. During the period Accredo was making its donations to HSI and HANJ, it submitted Medicare claims for twenty-four patients for whom it had supplied hemophilia services. Private citizen Steve Greenfield, a former vice-president at Accredo, subsequently sued his former company, alleging it had violated the False Claims Act by falsely certifying it was in compliance with the Anti-Kickback Statute with respect to these Medicare claims. On summary judgment, the District Court entered judgement against Greenfield, because Greenfield failed to provide evidence that even one Medicare claim was linked to the alleged kickback scheme, because he failed to present evidence that Medicare patients chose Accredo because of the charitable donations. The Third Circuit held that under the False Claims Act it is not necessary for the Plaintiff to prove that the kickback directly influenced a patient's decision to use a particular medical provider. However, a plaintiff must provide evidence that at least one of the alleged false claims covered a patient who was recommended or referred to Accredo by HSI/HANJ. Because Greenfield did not do that, the Third Circuit affirmed the grant of summary judgment by the District Court.

Extended Summary:

Accredo Health Group, Inc. ("Accredo"), a specialty pharmacy that provides hemophilia medications as well as home care services for patients with hemophilia, made charitable donations to Hemophilia Services, Inc. ("HSI") and Hemophilia Association of New Jersey ("HANJ"). The donations ranged from $200,000 to $500,000 per year from 2007 to 2012. Following these contributions, HSI/HANJ identified Accredo as one of its approved providers and recommended that its clients use Accredo's services. It even included hyperlinks on its website to Accredo's website. During this period, Accredo submitted Medicare claims for twenty-four Medicare patients.

Steve Greenfield, a former vice-president at Accredo, subsequently sued the company, alleging it had violated the False Claims Act by falsely certifying it had complied with the Anti-Kickback Statute with respect to each of the twenty-four Medicare claims for hemophilia patients it had filed during this period. At summary judgment stage, Greenfield argued that Accredo violated the False Claims Act by paying kickbacks to HSI/HANJ in the form of charitable donations to induce referrals to Accredo by HSI/HANJ to its members. Greenfield argued that at least some of the referrals or recommendations were directed to Medicare beneficiaries and Accredo falsely certified compliance with the Anti-Kickback Statute while submitting Medicare claims for payment.

The False Claims Act imposes liability on any person who "(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval; [or] (B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim." This law has been traditionally interpreted in such a way that claims for payment made as a result of illegal kickbacks are violations of the False Claims Act. Congress amended the Anti-Kickback Statute in 2010 to make that point even clearer.

Accredo argued Greenfield could not prove a violation of the False Claims Act, as there was no evidence of any federally insured patient who purchased its prescriptions because of its contributions to HSI/HANJ. The District Court entered summary judgment against Greenfield and for Accredo after finding that Greenfield failed to provide evidence that even a single federal claim for reimbursement by Accredo that was sufficiently linked to the alleged kickback scheme. In order to demonstrate the necessary connection, the District Court found that Greenfield would have to present evidence that the Medicare patients chose Accredo because of its donations to HSI/HANJ.

The Third Circuit looked at the legislative history of the Anti-Kickback Statute and False Claims Act to determine whether an HSI/HANJ member must have subjectively chosen to use Accredo because of the alleged Kickback scheme for there to be a False Claims Act violation. The Court found that the purpose of both Acts was to prevent fraud and abuse in the federal healthcare system very broadly. The Court found the statutory context of the False Claims Act and Anti-Kickback Statute supports the view that it is not necessary for a plaintiff to show that a kickback directly influenced a patient's decision to use a particular medical provider.

Although there does not need to be evidence that Medicare patients chose Accredo because of its charitable donations to HSI/HANJ, the Court found that Greenfield must point to at least one claim that covered a patient who was recommended or referred to Accredo by HSI/HANJ. Greenfield was unable to do that. In fact, he was unable to even prove that any of the covered patients were members of HIS/HANJ and therefore likely to have seen its recommendations regarding Accredo. A plaintiff must provide evidence of the actual submission of a false claim to prevail at summary judgment. Because Greenfield failed to do so, the Court affirmed the summary judgment.

It should be noted that throughout its analysis, the Third Circuit, like the District Court, assumed, without deciding, that Accredo's charitable contributions constituted illegal kickbacks under the Anti-Kickback Statute.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/171152p.pdf.

Panel: Ambro and Krause, Circuit Judges, and Conti, Chief District Judge

Argument Date: September 27, 2017

Date of Issued Opinion: January 19, 2018

Docket Number: No. 17-1152

Decided: Affirmed.

Case Alert Author: Amelia Donovan

Counsel: Ross Begelman, Marc M. Orlow, Regina D. Poserina, Begelman Orlow & Melletz Counsel for Appellant; Paul E. Boehm, Enu Mainigi, Craig D. Singer, Daniel M. Dockery, Williams & Connolly, Counsel for Appellees

Author of Opinion: Judge Ambro

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Mark Anderson

    Posted By: Susan DeJarnatt @ 01/26/2018 03:21 PM     3rd Circuit     Comments (0)  

January 24, 2018
  United States of America v. Tigano - Second Circuit
Headline: Second Circuit Finds Defendant's Nearly Seven Year Pretrial Detention Violated Defendant's Sixth Amendment Right to Speedy Trial

Area of Law: Criminal; Constitutional

Issue(s) Presented: Whether defendant's almost seven-year pretrial detention period violated his Sixth Amendment rights to a speedy trial.

Brief Summary: Defendant Joseph Tigano, III, appealed his conviction, following a trial that took place after nearly seven years of pretrial detention, on drug and weapons possession charges related to growing marijuana in his and his father's residence. On appeal from the United States District Court in the Western District of New York, the Second Circuit held that Defendant Tigano's pretrial detention, "the longest ever experienced by a defendant in a speedy trial case in the Second Circuit," violated his Sixth Amendment rights. Calling the "extreme facts" a likely "ceiling, rather than a floor, for Sixth Amendment analysis," the Second Circuit found that the "extraordinary" combination of factors that led to Tigano's detention were "a failure of our courts to comply with their obligation to bring defendants to a 'speedy and public' trial." In so ruling in November, the court dismissed the indictment and ordered Tigano's immediate release, with this opinion to follow.

To read the full opinion, visit:
http://www.ca2.uscourts.gov/de...d2342f8905/1/hilite/

Significance: This case involved the longest pretrial detention recorded in Second Circuit speedy trial jurisprudence.

Extended Summary: On July 8, 2008, defendant Joseph Tigano, III, and his father were arrested on charges related to the operation of an alleged marijuana enterprise out of their residence. In October 2008, both Tigano and his father were indicted on six counts of drug and weapons-possession-related offenses in the United States District Court for the Western District of New York. Thereafter, while Tigano remained imprisoned in local jails, he faced myriad ongoing and extensive delays in the judicial process despite his requests to have his case severed from his fathers, and his repeated, insistent and explicit demand for a speedy trial at every stage.

The delays leading to his extensive pretrial incarceration included several rescheduled or delayed pretrial conferences, long-delayed court transcripts, a lengthy wait for evidentiary findings on issues parsed out to two different magistrate judges, a year-long wait for a written plea offer, and three court-ordered competency exams, the third of which was ordered based simply upon Tigano's refusal to accept a plea and continued insistence on a speedy trial, and all of which resulted in findings that he was competent to stand trial. After nearly seven years of pretrial incarceration, Tigano was brought to trial and, in May 2015, he was convicted on five drug-related charges and one weapons charge.

In evaluating whether this extraordinary delay violated Tigano's Sixth Amendment rights to a speedy trial, the Second Court applied the four factor "balancing test" set out by the United States Supreme Court in Barker v. Wingo. Under Barker, in making a speedy trial determination, courts must evaluate the length of delay, reason for the delay, defendant's assertion of his speedy trial right, and prejudice to the defendant from the delay. Noting several times that seven years is the longest pretrial detention in the Circuit's Sixth Amendment case law, the Second Court concluded that the first factor, the length of the delay in bringing Tigano to trial, "weigh[ed] heavily against the government" and shifted the burden to the government to demonstrate that Tigano's rights were not violated.

Next, the Second Circuit analyzed the specific reasons for the holdup in bringing Tigano to trial. Noting that the seven year wait was "the result of countless small choices and neglects" rather than any single factor, the court recounted and evaluated delays resulting from three court-ordered competency exams, various administrative delays including an extensive wait for court transcripts, delays resulting from attempted plea negotiations including the government's failure to present a written plea to Tigano for a full year, district court congestion, the district court's use of multiple magistrate judges, and dilatory tactics of defense counsel. In virtually each instance, the Second Circuit found the "reasons for the delay f[e]ll largely on the district court and the government attorneys."

Evaluating the third factor, Tigano's assertion of his Sixth Amendment right, the Second Circuit found Tigano had "adamantly, consistently, and explicitly raised his speedy trial rights at nearly every appearance he made before the court," putting the government on clear notice that he was asserting his right to speedy trial. Finally, examining the fourth factor, prejudice to the defendant from the trial delay, the Second Circuit determined that Tigano was severely prejudiced by his "egregiously oppressive" seven year incarceration in local jails - the longest pretrial detention in Second Circuit speedy trial jurisprudence. Specifically, the court noted the particular deprivation Tigano suffered in recreation and rehabilitation from spending seven years in local jails and the continued undue anxiety and uncertainty that weighed on Tigano throughout his pretrial incarceration.

Calling the "extreme facts" in this case a likely "ceiling, rather than a floor, for Sixth Amendment analysis," the Second Circuit found that the "extraordinary" combination of factors that led to Tigano's detention were "a failure of our courts to comply with their obligation to bring defendants to a 'speedy and public' trial," and dismissed the indictment and ordered Tigano's release at the time of its November ruling, with this opinion to follow.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...ed2342f8905/1/hilite/

Panel: Judges Winter, Walker, and Pooler

Argument Date: 10/12/2017

Date of Issued Opinion: 01/23/2018

Docket Number:
15-3073

Decided: Reversed and Indictment Dismissed with Prejudice

Case Alert Author: Alissa Katz

Counsel:
Joseph J. Karaszewski (Assistant United States Attorney), for James P. Kennedy, Jr. (Acting United States Attorney for the Western District of New York, Buffalo, N.Y.), for Appellee; Gary Stein (Andrew Gladstein, Andrew Joyce, and Stephanie Kelly, on the brief), Schulte Roth & Zabel LLP, New York, N.Y., for Defendant- Appellant Joseph Tigano

Author of Opinion: Judge Pooler

Case Alert Circuit Supervisor: Elyse Diamond

    Posted By: Elyse Diamond @ 01/24/2018 08:29 AM     2nd Circuit     Comments (0)  

January 5, 2018
  Constitutional Party of Pennsylvania v. Pedro A. Cortes - Third Circuit
Headline: District Court must provide fact findings as to effects of county-based signature-gathering requirements

Area of Law: Constitutional Law - Voting

Issue(s) Presented: Does the Pennsylvania county-based signature-gathering requirement for non-majority party political candidates violate the Equal Protection Clause?

Brief Summary: Multiple individuals and groups ("Aspiring Parties") challenged the Pennsylvania election laws as unconstitutional as applied to them. On remand, after the Third Circuit upheld the District Court's finding that the election laws were unconstitutional as applied to the Aspiring Parties, the District Court adopted the Commonwealth's proposed order. That order included a county-based signature-gathering requirement. The Aspiring Parties appealed, arguing the county-based signature-requirement violated the Equal Protection Clause. The Third Circuit vacated and remanded because the District Court did not provide a factual basis or explanation for its adoption of the Commonwealth's order.

Extended Summary: Various individuals and groups, the "Aspiring Parties," filed suit to eliminate the application of certain Pennsylvania election laws. The Aspiring Parties included the Constitution Party of Pennsylvania, the Green Party of Pennsylvania, the Libertarian Party of Pennsylvania, and their respective chairs. The Aspiring Parties argued that the Pennsylvania election laws were unconstitutional as applied to them. Specifically, the Aspiring Parties argued that the county-based signature-gathering requirements are an unconstitutional vote dilution scheme violating the Equal Protection Clause.
In 2012, the Aspiring Parties sued the Secretary of the Commonwealth of Pennsylvania and the Commissioner of the Pennsylvania Bureau of Commissions, Elections, and Legislation in their official capacities, claiming violations of their First and Fourteenth Amendment rights. The District Court held that the statutes in combination were unconstitutional as applied to the Aspiring Parties. The Third Circuit affirmed and remanded the case back to the District Court for determination of a remedy.
On remand, the District Court requested each party submit proposed orders that remedy the constitutional violation. The Aspiring Parties submitted an order requesting an injunction directing the defendant, Pedro Cortes, to place the nominees of the Aspiring Parties on the November 8, 2016 general election ballot or, alternatively, that the candidates be placed on the ballot if they submitted the appropriate paperwork before the August 2016 deadline with valid signatures equal to the requirements imposed on the major party candidates. The Commonwealth responded by proposing an order based on a bill pending before the Pennsylvania General Assembly. The order required the Aspiring Parties' candidates to gather two and one-half times the signatures required for the major parties. Further, the bill required candidates seeking state-wide offices to gather between 1,250 and 2,500 signatures with at least 250 from at least 5 counties.
The Aspiring Parties specifically opposed the county requirement. The Third Circuit explored the history of the constitutionality of county-based signature-gathering requirements first. The question of the constitutionality of county-based signature-gathering is not novel. In the 1960's, the Supreme Court articulated the principle of "one person, one vote" contained in the Equal Protection Clause, essentially each voter's vote must be counted equally. The Supreme Court in Moore v. Ogilvie applied the "one person, one vote" principle to county-based signature-gathering in Illinois. The Court held that the requirement discriminated against residents in cities and favored rural sections because the requirement made it easier for residents in rural communities to gather the required signatures. Therefore, the signature requirement violated the "one person, one vote" principle.
The Third Circuit held in Anderson v. Celebrezze, a court must: 1) consider the character and magnitude of the asserted injury to the rights protected by the First and Fourteenth Amendments; 2) identify and evaluate the precise interests put forward by the State as justifications for the burden imposed by its rule; and 3) it must also consider the extent to which those interests make it necessary to burden the plaintiff's rights. Anderson originally involved the right to free association under the First Amendment but has been expanded to Equal Protection challenges too.
The Third Circuit explained county-based signature-gathering requirements have done poorly both before and after Anderson. The difficulty is that a state can easily justify a county-based signature-gathering requirement to keep "frivolous candidates off the ballot by requiring that a candidate show some support across a significant portion of the state."
The court, however, noted that not all county-based signature-gathering requirements are sufficiently strict as to cause constitutional concern. There must be a considerable impact on the new political association to show constitutional injury. This analysis also requires the court to balance the new political association against the state's interest. Therefore, the inquiry into county-based signature-gathering requirements is concerned with the burdens the regulations cause and thus is a "fact intensive" inquiry.
The fact intensive inquiry requires a record analysis of the facts pertaining to the particular restriction at issue, including: 1) the number of counties in the state at issue; 2) the distribution of voters throughout those counties; and 3) any other indications of the magnitude of cote dilution that will take place under the restriction. Because the District Court adopted the Commonwealth's proposed order without finding any facts or explanation of its decision, the Third Circuit vacated and remanded. It instructed the District Court to consider the factors and to provide an explanation on the record of the factors supporting its findings of fact.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/163266p.pdf

Panel: Smith, Chief Judge, Jordan, and Roth, Circuit Judges.

Argument Date: March 22, 2017

Date of Issued Opinion: December 13, 2017

Docket Number: No: 16-3266

Decided: Vacated and Remanded.

Case Alert Author: Nina F. del Valle

Counsel: Oliver B. Hall, Esquire, Counsel for Appellant; and Claudia M. Tesoro, Esquire, Counsel for Appellee.

Author of Opinion: Circuit Judge Roth

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 01/05/2018 03:52 PM     3rd Circuit     Comments (0)  

January 3, 2018
  SAS Institute, Inc. v. World Programming Limited - Fourth Circuit
Keeping the Bar Raised: Fourth Circuit Denies Request to Impose Injunction in Software Copyright Case

Areas of Law: Contract Law, Civil Procedure

Issue Presented: Whether a UK based software corporation that breached a licensing agreement with a US based software corporation and paid damages can further be subjected to an injunction on that same breach of contract claim and an additional copyright infringement claim.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held that an injunction was not an appropriate remedy for a breach of contract claim or a copyright infringement claim where the injured party had already received a substantial compensatory damages award. The Fourth Circuit determined that an injunction is an extraordinary remedy requiring a substantial showing that the SAS Institute did not meet. The Fourth Circuit additionally stated that because copyright law is a rapidly evolving area of law, the court did not wish to fashion a new rule in a field that remains murky.

Extended Summary: Statistical Application Software Institute (SAS) is a US based software corporation that sells an integrated business software system called the SAS System (the System). World Programming Limited (WPL) is a UK based software corporation. In the mid-2000s, WPL purchased a lower-cost version of the System from SAS called the Learning Edition. After acquiescing to a licensing agreement required to use Learning Edition, WPL identified a market opportunity to compete with SAS. Developers at WPL modified SAS's Learning Edition code to create their own version of the System, called World Programming System (WPS). When the initial licensing agreement expired after four years, former SAS customers replaced the System with WPS. SAS filed suit against WPL in 2009 and 2010 in the United Kingdom and in the Eastern District of North Carolina, respectively.

The UK and European Union courts dismissed all of SAS's claims against WPL except copyright infringement of the manuals (program guides) because the contractual stipulations fell under a European Software Directive that explicitly protected WPL's behavior. The US district court granted summary judgment to WPL on SAS's claims for copyright infringement, tortious interference with contract, and tortious interference with prospective economic advantage. However, the district court did not grant summary judgment on SAS's claims for copyright infringement of SAS's manuals, breach of contract, fraudulent inducement, or violations of the Unfair and Deceptive Trade Practices Act ("UDTPA"). A jury awarded SAS $26 million in damages and a provision within the UDTPA allowed SAS to triple the damages total to $79 million. Additionally, SAS sought an injunction against WPL, which was denied. Both parties appealed to the Fourth Circuit.

The Fourth Circuit dismissed WPL's claims. WPL first claimed that the legal proceeding should be barred by res judicata due to the UK litigation. The Fourth Circuit disagreed and found that "no simple test exists to determine whether causes of actions are identical" and since North Carolina public policy and European Union public policy are in clear conflict in this case, res judicata does not apply. WPL next claimed that there was no breach of contract because the terms "reverse engineering" and "non-production purposes," which governed the use of the software, are ambiguous and have a narrow definition. The Fourth Circuit differed and found that the plain meaning of those terms favors a broad interpretation which comported with SAS's arguments.

The Fourth Circuit also dismissed SAS's claim for an injunction against WPL. According to the Fourth Circuit, an injunction requires a plaintiff to demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies at law, such as monetary damages, are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. SAS failed to provide evidence of an irreparable injury. SAS's claim for inadequate remedies was contradicted by the $79 million damage award it received. SAS's aim to eliminate WPL's only product - WPS - showed a lack of regard for WPL's hardship and even in cases of clear wrongdoing (including patent infringement), the balance of hardships must be considered. Lastly, the Fourth Circuit noted that WPL's customers would be adversely affected by an injunction and thus the public interest would be disserved. The court concluded by noting that copyright law is a murky area that federal courts have struggled with for years. With both parties disagreeing on the functionality and creativity aspects of the software, and where the four elements required to obtain an injunction set a high bar, the Fourth Circuit saw no reason to fashion a new rule for a complex matter that the software industry itself has not fully resolved.

To read the full opinion click here.

Panel: Judges Wilkinson, Duncan, Thacker

Argument Date: 09/15/2017

Date of Issued Opinion: 10/24/2017

Docket Number: No. 16-1808

Decided: Decided by published opinion.

Case Alert Author: Saikrishna Srikanth, Univ. of Maryland Carey School of Law

Counsel: Pressly McAuley Millen, WOMBLE CARLYLE SANDRIDGE & RICE, LLP, Raleigh, North Carolina, for Appellant/Cross-Appellee. Wayne F. Dennison, BROWN RUDNICK LLP, Boston, Massachusetts, for Appellee/Cross-Appellant. ON BRIEF: Raymond M. Bennett, WOMBLE CARLYLE SANDRIDGE & RICE, LLP, Raleigh, North Carolina, for Appellant/Cross-Appellee. Rebecca M. Lecaroz, BROWN RUDNICK LLP, Boston, Massachusetts; Mark R. Sigmon, SIGMON LAW, PLLC, Raleigh, North Carolina, for Appellee/Cross-Appellant. Mitchell L. Stoltz, Kit Walsh, Michael Barclay, ELECTRONIC FRONTIER FOUNDATION, San Francisco, California, for Amicus Electronic Frontier Foundation. Jonathan Band, JONATHAN BAND PLLC, Washington, D.C., for Amici Computer & Communications Industry Association, Internet Association and Engine Advocacy. David C. Frederick, Michael E. Joffre, Julian J. Ginos, KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C., Washington, D.C., for Amicus The MathWorks, Inc. Andrew J. Pincus, Paul W. Hughes, Jonathan Weinberg, MAYER BROWN LLP, Washington, D.C., for Amicus BSA The Software Alliance.

Author of Opinion: Judge Wilkinson

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 01/03/2018 08:55 AM     4th Circuit     Comments (0)  

December 21, 2017
  Barajas v. U.S. - Eighth Circuit
Headline In matter of first impression, Eighth Circuit holds that 2010 U.S. Supreme Court decision regarding ineffective assistance of counsel cannot be applied retroactively in cases involving collateral review of federal convictions

Area of Law Criminal Law

Issue(s) Presented Whether the district court properly denied a petition alleging ineffective assistance of counsel by finding that a post-conviction U.S. Supreme Court case holding that criminal defense attorneys must inform clients of possible immigration consequences of guilty pleas created a new rule that could not be applied retroactively.

Brief Summary In 2009, Barajas, a citizen of Mexico, pleaded guilty to an offense categorized as an "aggravated felony" under federal immigration law. As a result, he was deported after serving his sentence. In September 2010, Barajas filed a 28 U.S.C. § 2255 petition, claiming that his trial counsel provided ineffective assistance by failing to inform him of the deportation consequences of his guilty plea. At the time of Barajas's conviction, and after his sentence ended, it was unclear if an attorney's failure to inform his client of collateral consequences like deportation could constitute ineffective assistance of counsel. In 2010, however, the U.S. Supreme Court held in Padilla v. Kentucky, 559 U.S. 356 (2010), that criminal defense attorneys have a duty to inform clients about possible immigration consequences of pleading guilty in order to provide effective counsel under the Sixth Amendment. Barajas relied on Padilla in his petition.

Citing Padilla, the district court granted the petition. The government appealed. In 2013, while the appeal was pending, the Supreme Court held that Padilla announced a "new rule" under the standard for retroactive application to criminal cases on collateral review set forth in Teague v. Lane, 489 U.S. 288 (1989), and therefore could not be applied retroactively. Teague held that "new rules" of criminal procedure should not be applied retroactively to cases on collateral review in order to ensure the finality of criminal convictions and to respect principles of comity and federalism. In light of the Supreme Court's decision that Padilla announced a "new rule," the Eighth Circuit reversed the district court's order and remanded. On remand, the district court denied Barajas's petition. Barajas appealed, arguing that Teague's bar on retroactive application of new rules should not apply to collateral review of federal convictions, especially those concerning ineffective assistance of counsel claims, because such cases do not raise concerns about the interests of comity and finality of criminal judgments upon which Teague is founded.

On appeal, a panel of the Eighth Circuit affirmed the district court's denial of the petition. In a matter of first impression, the panel joined all other circuits who have addressed the issue, and held that Teague applies to both federal and state convictions. The panel held that Teague must apply to federal convictions because: 1) Teague is rooted in the importance of finality generally; 2) Teague adopted an earlier approach to retroactivity which involved federal convictions on collateral review; and 3) the Supreme Court has explained in a similar context that it sees no basis for affording federal prisoners a preferred status over state prisoners when they seek postconviction relief. Moreover, the panel held that Teague protects convictions that faithfully conform to existing constitutional law by fixing in time the procedural standards to which they are held, and the objective provides no basis for treating ineffective assistance claims differently.

The full text of the opinion may be found at http://media.ca8.uscourts.gov/opndir/17/12/161680P.pdf

Panel Chief Judge Smith and Circuit Judges Gruender and Wollman

Date of Issued Opinion December 5, 2017

Decided Affirmed

Docket Number 16-1680

Counsel Jacob Huhu for Appellant and Shawn Wehde for Appellees

Author Circuit Judge Gruender

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

    Posted By: Joelle Larson @ 12/21/2017 02:05 PM     8th Circuit     Comments (0)  

December 13, 2017
  Robert Wellman, Jr. v. Butler Area School District - Third Circuit
Headline: Concussed Student Barred From Making Claims Under the IDEA Due to Settlement Agreement with School District

Area of Law: IDEA

Issue(s) Presented: Whether a concussed student, who was denied accommodations at school, can bring a claim against the school district without exhausting all procedural measures under the IDEA?

Brief Summary: During his freshman year of high school, Robert Wellman, Jr. suffered a concussion while participating in school related sporting activities. Wellman attempted to resume his education and requested several accommodations which were denied. In a settlement agreement, Wellman and his parents released the School District and its employees from all claims related to IDEA, the Americans with Disabilities Act, or any other Federal or state statute.

Wellman later filed a complaint against the School District and the high school's principal alleging violations of the Rehabilitation Act, the ADA, and Wellman's equal protection rights. The Third Circuit vacated the District Court's dismissal without prejudice for failing to exhaust all administrative remedies under the Individuals with Disabilities Education Act (IDEA). Because the gravamen of Wellman's complaint sought denial of the IDEA's guarantee of free and appropriate education, he had to exhaust all administrative remedies under the IDEA. But Wellman's settlement agreement precluded him from making any of these claims against the School District and its employees, leaving no basis upon which relief could be granted. The Court remanded with instructions to dismiss the complaint with prejudice.

Extended Summary:

During his freshman year of high school, Robert Wellman, Jr. suffered a head injury while playing flag football in his physical education class. Later that day, Wellman participated in football practice, where he suffered additional head injuries that resulted in a concussion. Upon his return to school, his mother asked for Wellman to be taken out of his German and physical education classes and be given additional study halls. She also asked that the football coach not allow him to engage in any physical activity that would further aggravate his condition. According to Wellman's complaint, the school gave him additional study halls but required him to take make-up exams during that time. Also, his football coach made him hold a sideline marker during a football game and was hit by one of the players, resulting in another head injury. Wellman tried to return to school but the School District did not accommodate his condition. As a result of his condition, he experienced severe anxiety and was unable to return to school. Wellman's mother, his therapists and school officials met to discuss a plan for Wellman could return to school, but they could not reach an agreement. Wellman eventually enrolled in private school, from which he graduated. Subsequently, Wellman and his parents filed a due process complaint against the School District, requested a hearing, an Individualized Education Plan, compensatory education for two years and payment of Wellman's private school tuition. Wellman and his parents entered into a settlement agreement where Wellman released the School District and its employees from all claims related to IDEA, the Americans with Disabilities Act, or any other Federal or state statute.

Wellman filed a complaint against the School District and the high school's principal that alleged that they violated the Rehabilitation Act, the ADA, and Wellman's equal protection rights. The District Court dismissed the complaint without prejudice for failing to exhaust all administrative remedies under the Individuals with Disabilities Education Act (IDEA). Wellman appealed and the Third Circuit court vacated the vacated the District Court's decision and remanded to dismiss the complaint with prejudice.

The IDEA sets forth an administrative mechanism for resolving disputes concerning whether a school has complied. Whenever a party seeks relief under the IDEA, they must follow all procedures listed within the statute, even if the party relies on laws other than the IDEA. The Supreme Court, in Fry v. Napoleon Community, held that exhaustion is not necessary when the gravamen of the complaint is something other than the denial of free appropriate public education (FAPE)under the IDEA. In determining whether the gravamen of the complaint denies FAPE, the Supreme Court asks two questions - (1) could the plaintiff have brought the same claim if the alleged conduct had occurred at a public facility that was not a school and (2) could an adult at the school have made the same claim? If the answer to both questions is no, then the complaint most likely concerns a denial of FAPE. Additionally, the gravamen can be determined through the history of the proceedings. If the plaintiff had previously invoked the IDEA's formal procedures, then there is strong evidence that the claim relates to a denial of FAPE.

The Third Circuit looked to each of Wellman's claims individually and found that the gravamen of Wellman's complaint was a denial of FAPE. Since all of allegations related to an alleged failure to accommodate his condition and fulfil his education needs, the plaintiff could not have brought the same claim if the conduct had occurred somewhere other than a school. Also, Wellman's claim, that the School District's failure to provide accommodations excluded him from school, was not something that could have been brought by a nonstudent against a non-school facility. Further, the history of the proceedings show that the suit seeks relief for the denial of FAPE. Because Wellman's parents filed a due process complaint, requested a hearing, an Individualized Education Plan, and compensatory education, he attempted to pursue administrative remedies and therefore was evidence that his claim related to a denial of FAPE. The Third Circuit agreed with the District Court that Wellman did not exhaust all remedies, however, Wellman's settlement agreement precluded him from making any of these claims against the School District and its employees. Therefore, there was no basis upon which relief could be granted and the complaint was dismissed with prejudice.


The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/153394p.pdf

Panel: Smith, Chief Judge; Jordan, and Shwartz, Circuit Judges 

Argument Date: November 7, 2017

Date of Issued Opinion: December 12, 2017

Docket Number: No. 15-3394

Decided: Vacated

Case Alert Author: Emily Anderson

Counsel: Edward A. Olds, Esquire, Counsel for Appellants; Thomas E. Breth, Esquire, counsel for Appellees.

Author of Opinion: Circuit Judge Shwartz

Circuit: Third Circuit

Case Alert Circuit Supervisor: Prof. Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 12/13/2017 12:48 PM     3rd Circuit     Comments (0)  

  John Barna v. Board of School Directors of the Panther Valley School District, et al. - Third Circuit
Headline: School Board not entitled to qualified immunity from suit

Area of Law: Constitutional Law; First Amendment; Qualified Immunity

Issue(s) Presented: Are members of a school board, who allegedly violated Plaintiff's First Amendment rights by banning him from school board meetings, protected under qualified immunity from a suit for damages under 42 U.S.C. § 1983 in their individual and official capacities?

Brief Summary: Plaintiff John Barna was banned from attending school board meetings of the Panther Valley School District by Defendants, the Board of School Directors. Barna filed a lawsuit claiming damages under 42 U.S.C. § 1983 for violations of his First Amendment rights. The district court granted summary judgment on behalf of both the Board and its members. It ruled that while their actions violated Barna's constitutional rights, both the Board and its members were protected by qualified immunity. The Third Circuit affirmed on behalf of the members as individuals, ruling that qualified immunity protected them because the potential constitutional violation was not "clearly established" by law. However, the Third Circuit vacated the judgment on behalf of the Board because the Supreme Court previously held that municipalities were not entitled to qualified immunity for damages under 42 U.S.C. § 1983. The case was remanded to the district court for further proceedings.

Extended Summary: On April 8,2010, John Barna expressed his concern at a Panther Valley School Board meeting regarding a school contract that he and his friends considered a waste of public resources. When the School Board advised Barna that his friends were welcome to address their concerns before the Board, Barna replied, "You wouldn't like that. Some of my friends have guns."

In response to Barna's comment - and other threatening and disruptive behavior by Barna at a subsequent meeting - the school district superintendent sent Barna a letter advising him that any future outbursts would result in him being banned from attending School Board meetings. For more than a year, Barna attended meetings without further issue. He was subsequently involved in a heated argument with Board members during a meeting. Barna admitted that he "blew [his] top" at the meeting. As a result, the Board sent Barna a letter banning him from attending any future meetings. The letter also advised that Barna was welcome to submit questions to the Board, which would be answered in a timely manner. While Barna never exercised this opportunity, he did request audio recordings of meetings, which he received.

Barna then filed this lawsuit against the Board and its members, in their individual and official capacities, claiming damages under 42 U.S.C. § 1983 for violation of his First Amendment right to free speech and his First and Fourteenth Amendment right to be free from unconstitutional prior restraint.

The district court granted summary judgment on behalf of the Board and its members. The court held that the actions of the Board violated Barna's constitutional rights, but that defendants enjoyed qualified immunity from claims for § 1983 damages.

On appeal, the Third Circuit recognized that individual members of the Board were protected by qualified immunity as long as the constitutional violation was not "clearly established" at the time it occurred. In order to determine if banning a citizen from attending School Board meetings was a "clearly established" violation of the First and Fourteenth Amendment, the Court first looked to Supreme Court precedent. After reviewing the applicable precedent, the Court determined that, to the extent the ban against Barna was a violation of his constitutional rights, it was not "clearly established." The Third Circuit did, however, find precedent regarding the protection of qualified immunity for the Board as a municipal entity. The Supreme Court held in Owen v. City of Independence, 445 U.S. 622 (1980), that municipalities are not entitled to qualified immunity from suit for damages under § 1983. The Third Circuit held that Owen applied to the School Board as a municipal entity. Therefore, the Board was not entitled to qualified immunity. The Third Circuit, thus, vacated summary judgment in favor of the Board as a municipal entity and remanded the case to the district court to determine the constitutionality of the ban and for further proceedings.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/153904p.pdf

Panel: Chagares, Greenaway, Jr., and Restrepo, Circuit Judges

Argument Date: September 14, 2016

Date of Issued Opinion: December 7, 2017

Docket Number: No. 15-3904

Decided: Affirmed in part; vacated in part; remanded.

Case Alert Author: Michael R. DeAngelo

Counsel: Gary D. Marchalk, Esq., Jonathan P. Phillips, Esq. for Appellant; Thomas A. Specht, Esq. for Appellees

Author of Opinion: Chagares, Circuit Judge

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 12/13/2017 10:06 AM     3rd Circuit     Comments (0)  

December 7, 2017
  James Joyce v. Maersk Line LTD - Third Circuit
Headline: Union contracts freely entered by seafarers will not be reviewed unless evidence of unfairness

Area of Law: Contract; Maritime Law

Issue(s) Presented: Does the holding in Barnes extend to unearned wages set by a collective bargaining agreement?

Brief Summary:

James Joyce, a member of the Seafarers International Union, filed a class action alleging that the unearned wages portion of his collective bargaining agreement with Maersk violated maritime law. Joyce's union agreement provided that if he were medically discharged before the conclusion of his contract, he would be entitled to unearned wages for the remainder of the contract. After being discharged due to kidney stones, Joyce claimed that he was entitled to overtime pay as part of his unearned wages. Joyce relied on the holding in Barnes, which established that a seafarer's maintenance could be modified by the court regardless of the collective bargaining agreement. The District Court granted summary judgment in favor of Maersk, finding that, under the bargaining agreement, Joyce was not entitled to overtime as a matter of law. On appeal, the Third Circuit overruled its decision in Barnes v. Andover Co. The Third Circuit recognized the importance of enforcing negotiated contracts. It, thus, held that a freely entered seafarer union contract will not be dissected and reviewed by courts unless there is evidence of unfairness within the collective bargaining process.


Extended Summary:

James Joyce is a member of the Seafarers International Union. He entered into a collective bargaining agreement with Maersk Line Limited for a three-month period. During this period, Joyce fell ill with kidney stones and was declared unfit for duty. Per his bargaining agreement, Joyce was entitled to unearned wages for the remainder of his contract. The agreement only provided for base pay, not for overtime. As a result, Joyce brought a class action suit, alleging that portions of the collective bargaining agreement violated general maritime law. The District Court granted summary judgment in favor of Maersk, finding that due to the agreement, Joyce was not entitled to overtime. Joyce filed an appeal, urging that the holding in Barnes v. Andover Co. should apply to his claim.

On appeal, the Third Circuit reconsidered its holding in Barnes. In Barnes, the Court held that a maintenance rate within a contract was not binding on a union member who could show higher daily expenses. In doing so, the Court parted ways from other circuits that held that contractual rates should be binding as long as there was a fair collective bargaining process. The Third Circuit disagreed, holding that contracts should not be permitted to override common law maritime rights provided to seamen.

Joyce argued that a seafarer's right to unearned wages should be treated exactly like the right to maintenance. In addition, he argued that overtime pay is part of the common law right to unearned wages. Relying on the Court's reasoning in Barnes, Joyce argued that an unearned wage rate in a collective bargaining agreement can be set aside if determined to be insufficient. The Court agreed with Joyce's first point, finding that there is a long history that demonstrates that seafarers are entitled to unearned wages. In addition, the Court noted that a common expectation of overtime could lead to the conclusion that overtime should be included in unearned wages. The Court further agreed that if it applied Barnes, Joyce would most likely succeed on his claim. However, given the conflicting opinions of other circuits with respect to collective bargaining, the Third Circuit reconsidered its holding in Barnes.

Barnes was based on the common law protections afforded to seafarers and the idea that the law should not allow union contracts to override those maritime rights. However, labor policies and federal labor law lends itself to the required adherence to the terms of a collective bargaining agreement. Judicial intervention is not as necessary as it was in the past. On review, the Third Circuit focused on the importance of enforcing privately negotiated contractual rates because seafarers do not need as much protection as they once did. The Third Circuit ultimately overruled Barnes, holding that a freely entered seafarer union contract will not be dissected and reviewed by courts unless there is evidence of unfairness within the collective bargaining process. In addition, the Court further limited the ruling by noting that maintenance, cure, and unearned wages could not be completely abrogated by contract. The Third Circuit affirmed the judgment of the District Court.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/163553p.pdf

Panel: Smith, Chief Judge; McKee, Ambro, Chagares, Jordan, Hardiman, Greenaway, Jr., Vanaskie, Shwartz, Krause, Restrepo, and Roth, Circuit Judges.

Argument Date: October 8, 2017

Date of Issued Opinion: December 4, 2017

Docket Number: No. 16-3553

Decided: Affirmed.

Case Alert Author: Kristina Flatley

Counsel: Dennis O'Bryan, Counsel for Appellant; John Walsh, Counsel for Appellee; Martin Davies, Amicus Curiae

Author of Opinion: Circuit Judge Jordan

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 12/07/2017 01:38 PM     3rd Circuit     Comments (0)  

December 5, 2017
  S. Freedman & Sons, Inc. v. National Labor Relations Board -- Fourth Circuit
He'll Be Back: Court Affirms NLRB Decision That Employer Wrongfully Terminated Union Employee

Areas of Law: Employment Law, National Labor Relations Act

Issue Presented: Whether an Administrative Law Judge properly found that the employer, S. Freedman & Sons, Inc. violated the National Labor Relations Act's prohibitions on (1) discriminating against an employee for engaging in protected activity, and (2) interfering with an employee's exercise of his rights under the Act, in its actions against the employee, Richard Saxton.

Brief Summary: Richard Saxton was an employee of S. Freedman & Sons, Inc. In 2014, Saxton was terminated, reinstated, and terminated again. Both terminations were just days before scheduled hearings on grievances Saxton had filed against the company. An Administrative Law Judge (ALJ) found the employer had violated the National Labor Relations Act (the Act) in its disciplining of Saxton. The employer petitioned for review of this decision, but the Fourth Circuit affirmed the ALJ decision, thereby denying the employer's petition for review and granting the NLRB's cross-application for enforcement.

Extended Summary: S. Freedman & Sons, Inc. is a mid-Atlantic paper supplier, and in 2014 the company had 128 employees, including 28 delivery drivers. The delivery drivers and warehouse workers had been represented by a union for 50 years, and entered into a collective bargaining agreement (CBA) in 2013. Saxton, an employee of 26 years, had served as chief union steward for 17 of those years, representing employees in collective bargaining negotiations and when they had grievances with the company.

Saxton was involved in multiple grievances with the company from 2013-2014, including a termination in 2013 for his involvement in a traffic accident in a company vehicle. On July 1, 2014, a week before a hearing to address his job performance, Saxton told a supervisor he could not come to work that day, because he needed "to get a [driver's] license." The employer thought Saxton's license expired June 27, 2014, so the company investigated to learn if Saxton had driven a company vehicle with an expired license. Saxton and his union representative met with the company president and a human resources representative on July 2. The employer stated in the court record that Saxton admitted at the meeting to driving with an expired license. Saxton refuted this, and said he explained he had lost his license on June 30, and needed to miss work on July 1 to get a duplicate. On July 2, Saxton and a union representative met with the president and a human resources representative to explain that he had renewed his license before the June 27, 2014 expiration, lost his license on June 30, and received a duplicate on July 1. The president, who was investigating whether Saxton had driven a company vehicle with an expired license, refused to look at the paperwork which confirmed the license was a duplicate. Later that day, the employer got records from the Motor Vehicle Administration that corroborated Saxton's account of events, but the president still chose to terminate Saxton on July 3.

Saxton and his union business agent participated in a grievance meeting with the employer on July 8, but the president of the company did not accept Saxton's version of events, despite the company's own investigator confirming them. In a July 17 submission to the Maryland Department of Labor, the employer wrote that its "investigation confirmed Saxton knowingly drove his company truck without a valid driver's license." However, on July 23, the company informed the union that Saxton's termination was being retroactively changed to an unpaid suspension, claiming that Saxton was not entitled to compensation for the time he was off work because he "was dishonest during the employer's investigation." The union filed grievances.

On September 29, a week before a new scheduled hearing on prior grievances, Saxton returned to the warehouse to clock out, when a supervisor asked him to drive a truck to a repair shop. Since Saxton had already worked eight-hours and was the most senior driver, he was not required to accept overtime if other junior drivers were available according to the CBA. After presenting the supervisor with a copy of the CBA and the president becoming involved, Saxton still refused. The president then told him to "punch out and don't come back tomorrow." After the union president discussed it with the company president, Saxton was told to return to work the next day by his union president. Saxton went to work every day until October 2, when the president of the company gave him a letter terminating his employment. The labor relations board then filed a complaint on Saxton's behalf, and the ALJ found the employer violated the Act by disciplining Saxton for engaging in protected activities and participating in Board proceedings.

Under the Act, an employer engages in an unfair labor practice if the employer "discharge[s] or otherwise discriminate[s] against an employee because he has filed charges or given testimony." To present a case of retaliation, the Board, on behalf of the employee, must show "(1) that the employee was engaged in protected activity, (2) that the employer was aware of the activity, and (3) that the protected activity was a substantial or motivating factor for the employer's action." Saxton's employer did not dispute the first two prongs of this test, but relied on the argument that his protected activity was not a motivating factor in the termination. The ALJ found that testimony from company representatives "lacked credibility" and the record included significant evidence that the employer had notice before termination of Saxton having timely renewed his license and the one at issue being a duplicate. Despite this evidence, the employer persisted in contending Saxton had lied long after that claim was discredited.

Also under the Act, an employer engages in an unfair labor practice if the employer "interefere[s] with, restrain[s], or coerce[s] employees in the exercise of the rights guaranteed in" the act, which cover rights to organize and collective bargaining. An employee's conduct is considered "concerted activity" if conduct is based on "a reasonable and honest belief that [the employee] is being, or has been, asked to perform a task that he is not required to perform under his collective-bargaining agreement, and the statement or action is reasonably directed toward the enforcement of a collectively bargained right." Saxton made a copy of the CBA available to his supervisor when refusing to take the overtime shift and the record showed there were three more junior drivers available to perform the task, one of whom eventually did.

To read the full opinion, click here.

Panel: Judges Kennan and Wynn, Judge Gibney, United States District Judge for the Eastern District of Virginia, sitting by designation.

Argument Date: 09/12/2017

Date of Issued Opinion: 11/07/2017

Docket Number: 16-2066, 16-2270

Decided: Petition for review denied, cross-application for enforcement granted by unpublished per curiam opinion.

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

Counsel: Scott V. Kamins, OFFIT KURMAN, P.A., Maple Lawn, Maryland, for
Petitioner/Cross-Respondent. David A. Seid, NATIONAL LABOR RELATIONS
BOARD, Washington, D.C., for Respondent/Cross-Petitioner. John R. Mooney,
MOONEY, GREEN, SAINDON, MURPHY & WELCH, P.C., Washington, D.C., for
Intervenor. ON BRIEF: Richard F. Griffin, Jr., General Counsel, Jennifer Abruzzo,
Deputy General Counsel, John H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy Associate General Counsel, Jill A. Griffin, Supervisory Attorney, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Respondent/Cross-Petitioner. Lauren P. McDermott, MOONEY, GREEN, SAINDON, MURPHY & WELCH, P.C., Washington, D.C., for Intervenor.

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 12/05/2017 01:05 PM     4th Circuit     Comments (0)  

  Velasquez v. Sessions -- Fourth Circuit
Family Matters: Court Denies Petition for Asylum Because Petitioner Lacks Proper Social Group Membership

Areas of Law: Immigration: Asylum and Refugee Status

Issue Presented: Whether the Board of Immigration Appeals properly denied Velasquez' petition for asylum on the ground that she did not belong to a social group that made her likely to suffer persecution if deported to Honduras.

Brief Summary: The Petitioner, Maria Suyapa Velasquez, a native of Honduras, illegally entered the United States with her minor son in 2014. She sought to stay in the United States, claiming refugee status because her child's paternal grandmother had made multiple attempts to gain custody of him in Honduras. Velasquez argued she was persecuted because of her membership in her nuclear family. The Fourth Circuit denied the petition, affirming the decision of the Board of Immigration Appeals, because Velasquez had not adequately proven that the danger created by the boy's grandmother was more than an intra-family dispute.

Extended Summary: Velasquez and her son, D.A.E.V, entered the United States unlawfully in 2014 and were detained by U.S. Customs and Border Patrol. Velasquez applied for asylum and withholding of removal, attaching D.A.E.V. as a rider on her petition. Velasquez said she fled Honduras because D.A.E.V.'s paternal grandmother, Maria Estrada had been trying to get custody of him for over ten years, through various means. Estrada asked Velasquez for custody, but when Velasquez did not give in, Estrada kidnapped him from their home when Velasquez wasn't there. Each time she did this, D.A.E.V. would find a way free and walk home. Just before Velasquez left Honduras, Estrada threatened to kill her to get custody of the boy. While Velasquez was being detained in 2014, her mother told her Velasquez's sister had been murdered in front of her by Estrada's son Oscar, D.A.E.V.'s uncle. Velasquez's mother believed this to be a case of mistaken identity, i.e., Oscar thought the sister was Velasquez.

Velasquez posited she was a refugee entitled to asylum or withholding of removal under sections 208 and 241 of the INA. Under 8 U.S.C. § 1101(a)(42)(A) a refugee "is an alien outside the country of her nationality 'who is unable or unwilling to return to, and is unable or unwilling to avail...herself of the protection of, that country because of persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion." The asylum-seeker bears the burden of demonstrating refugee status. Velasquez alleged she was being persecuted for her membership in a particular social group, in this instance her nuclear family.

The Immigration Judge (IJ) who initially heard the petition denied it because the conflict between Velasquez and Estrada was deemed "an intra-family custody dispute over" D.A.E.V. In support of this conclusion, the judge pointed to two facts in Velasquez's account: Her sister had been killed in front of her mother, but her mother was unharmed; Velasquez has four other children from a different father in Honduras, and they also were not harmed by Estrada or her associates. Thus, Velasquez did not satisfy the conditions for asylum, and her derivative petition on behalf of D.A.E.V. was denied. Withholding for removal requires a higher threshold of proof than asylum, so Velasquez's request for that relief was also denied. The Board of Immigration Appeals adopted the reasoning of the IJ, which created the path for Velasquez's appeal to the Fourth Circuit.

To adequately demonstrate her refugee status, Velasquez had to demonstrate the following: (1) she "ha[d] a well-founded fear of persecution"; (2) her fear ar[ose] "on account of" membership in a protected social group; and (3) the threat [was] made by an organization that the Honduran government "[was] unable or unwilling to control." The instant appeal considered only the second prong - whether Estrada targeted Velasquez because of membership in a particular social group, her nuclear family.

The Fourth Circuit has recognized that membership in a nuclear family can be a particular social group for the purposes of seeking asylum. However, while Velasquez did not have to show her nuclear family relationship was the "central" or "dominant" reason for her persecution, she did have to prove that her membership "was or will be at least one central reason for" her persecution. Hernandez-Avalos v. Lynch, 784 F.3d 944, 949 (4th Cir. 2015). The court clarified that "every threat that references a family member is [not] made on account of family ties." Id. at 950 n.7.

In Hernandez-Avalos, a mother was being threatened by a gang to convince her son to join. The court there found the threats by the outside party were the result of the mother's relationship and potential influence over her son.
In contrast in Velasquez' case, she testified that no one besides herself, her mother-in-law, and her brother-in-law were involved in the dispute. No one outside the family was a participant. Velasquez claimed, without proof, that Estrada and Oscar were involved with Mara Salvatrucha, or MS-13. She also suggested Estrada wanted custody of D.A.E.V. to get him to join the gang. However, the court rejected this argument because there were no facts in the record to support it. In his concurring opinion, Judge Wilkinson reiterated that accepting Velasquez' petition would set the precedent of having to accept essentially any asylum claim that rests on an intra-family dispute.

To read the full opinion, click here.

Panel: Judges Wilkinson, Traxler, and Agee.

Argument Date: 05/09/2017

Date of Issued Opinion: 07/31/2017

Docket Number: 16-1669

Decided: Petition denied by published opinion.

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

Counsel: David John Kline, Alexandria, Virginia, for Petitioners. Gregory Darrell Mack, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent. ON BRIEF: Bridget Cambria, Jacquelyn Kline, CAMBRIA & KLINE, Reading, Pennsylvania, for Petitioners. Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Terri J. Scadron, Assistant Director, Civil Division, Office of Immigration Litigation, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent.

Author of Opinion: Judge Agee, Judge Wilkinson filed a separate concurring opinion.

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 12/05/2017 12:54 PM     4th Circuit     Comments (0)  

  Goodwin v. Branch Banking & Trust Company - Fourth Circuit
The Good, The Bad, & The Unconscionable: Fourth Circuit Affirms Refusal to Enforce Unconscionable Arbitration Clause

Areas of Law: Arbitration

Issue Presented: Whether an arbitration agreement with substantively and procedurally unconscionable, and thus unenforceable.

Brief Summary: Latricia Goodwin sued Branch Banking & Trust ("BB&T"). BB&T moved to compel arbitration pursuant to an arbitration agreement in the parties' Loan Agreement. The United States District Court for the Southern District of West Virginia found the parties had unequal bargaining power, Goodwin signed in a rush, and the arbitration provision was located two pages after Goodwin's signature line. Moreover, the terms of the agreement discouraged litigation and favored BB&T. Thus, the District Court found the provision to be procedurally and substantively unconscionable, and refused to enforce it. BB&T appealed. The United States Court of Appeals for the Fourth Circuit affirmed, finding no error in the lower court's ruling of unconscionability, or its decision not to sever the unconscionable terms from the arbitration provision.

Extended Summary: Latricia Goodwin filed a class action law suit against Branch Banking & Trust Company ("BB&T") alleging violations of the West Virginia Consumer Protection Act. BB&T removed the action to the United States District Court for the Southern District of West Virginia, and moved to compel arbitration pursuant to the parties' Loan Agreement. Although the standard for moving to compel arbitration was met, Goodwin argued that the arbitration clause was unenforceable because it was unconscionable.

The District Court explained that federal law favors enforcing arbitration agreements, and such agreements should be analyzed under contract law. In West Virginia, a contract is unenforceable if it is unconscionable. Consequently, the court analyzed the arbitration agreement for procedural and substantive unconscionability. To read the District Court's opinion in full, click here.

As evidence of procedural unconscionability, the District Court explained that Goodwin was an unsophisticated party contracting with a national lender. Goodwin signed in a rush, and the arbitration clause was two pages after her signature. The court found this was sufficient to render a substantively unreasonable agreement unconscionable. Looking to the agreement's substance, the District Court noted that Goodwin was subject to a one-year statute of limitations, while BB&T enjoyed a three-year statute of limitations. The agreement limited Goodwin to arbitration, while BB&T could seek relief in a variety of forums. The court also found that numerous provisions in the agreement - fee shifting, a demand for arbitrator experience in bank lending contracts, class action preclusion, and a shortened discovery period - all discouraged litigation. The court concluded that the arbitration provision's substantive terms and procedural inequities rendered it unconscionable, and thus denied BB&T's motion to compel arbitration. BB&T appealed.

On appeal, BB&T argued that the district court erred in refusing to (1) enforce the arbitration provision and (2) sever the unconscionable terms and enforce the rest of the arbitration provision. The Fourth Circuit reviewed the District Court's ruling de novo, and concluded the district court did not err in finding the arbitration provision unconscionable or refusing to sever unconscionable terms from the agreement. Thus, the Fourth Circuit affirmed the district court's ruling.

To read the Fourth Circuit opinion, click here.

Panel: Chief Judge Gregory, Judge Harris, and Senior Judge Hamilton

Argument Date: None

Date of Issued Opinion: 10/31/2017

Docket Number: No. 17-1412

Decided: Affirmed by unpublished per curiam opinion

Case Alert Author: Ashley Fellona, Univ. of Maryland Carey School of Law

Counsel: Jonathan L. Anderson, JACKSON KELLY PLLC, Charleston, West Virginia; Christopher K. Robertson, JACKSON KELLY PLLC, Martinsburg, West Virginia; John C. Lynch, Elizabeth S. Flowers, TROUTMAN SANDERS LLP, Virginia Beach, Virginia, for Appellant. Jed Nolan, HAMILTON, BURGESS, YOUNG & POLLARD, P.C., Fayetteville, West Virginia; Karla Gilbride, PUBLIC JUSTICE, P.C., Washington, D. C., for Appellee.

Author of Opinion: Per curiam

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 12/05/2017 12:27 PM     4th Circuit     Comments (0)  

December 1, 2017
  Joan Kedra v. Richard Schroeter - Third Circuit
Headline: Complaint Plead Sufficient Facts to Support that Officer Acted with Actual Awareness of a Substantial Risk of Serious Harm When he Shot and Killed Another Officer During a Firearms Training.

Area of Law: Civil Rights - State-Created Danger

Issue(s) Presented:

Whether deliberate indifference in the substantive due process context may be satisfied using an objective test.

Whether a complaint pleaded sufficient facts to support the inference that a police officer acted with actual awareness of a substantial risk of serious harm when he pointed his gun at a trainee at close range and deliberately pulled the trigger without checking whether the gun was loaded.

Brief Summary: Corporal Richard Schroeter shot and killed State Trooper David Kedra during a routine firearms training. Kedra's mother brought a civil rights complaint alleging that Schroeter had exposed Kedra to a state created danger in violation of his Fourteenth Amendment substantive due process rights. The district court held that Schroeder was entitled to qualified immunity and dismissed the complaint. Specifically, the district court found that the complaint was inadequate because it alleged that Schroeter had objective knowledge, rather than subjective knowledge, that the gun was loaded with the bullet that killed Kedra.

The Third Circuit noted that objective knowledge was not clearly established as a liability theory for deliberate indifference at the time of the shooting. However, the Third Circuit found that the complaint was sufficient under the subjective theory. The Third Circuit concluded that the obviousness of the risk in pointing a gun at a defenseless person and pulling the trigger without undertaking any safety check reflected Schroeter's conscious disregard of a substantial risk of serious harm.


Extended Summary: In September 2014, Corporal Richard Schroeter conducted a demonstration of the features and operation of the new model of a state police-issued handgun. Schroeter, a trained firearms instructor and police officer for twenty years, was aware of several firearm safety rules for instructors including: (1) a safety check of a gun before using it for training; (2) a safety check to see whether the gun was loaded; (3) must treat all guns as if they are loaded; (4) must never point the muzzle of a gun at another person; (5) must keep his finger off of the trigger unless he verifies that the gun is unloaded before pointing it at a safe target and pulling the trigger; and (6) must open the gun to visually and physically determine that it is unloaded before pulling the trigger. Schroeter violated each of these rules when he pointed the gun at Kedra and pulled the trigger. Kedra died as a result of the shooting. Schroeter pled guilty to five counts of reckless endangerment of another person.

Kedra's mother brought a civil rights complaint alleging that Schroeter had exposed Kedra to a state-created danger in violation of his Fourteenth Amendment substantive due process rights. This amendment does not impose an obligation on the state to protect its citizen. However, the Due Process clause includes an exception that holds an official liable if his conduct exposes an individual to a state-created danger. This claim requires proof of four elements: (1) the harm caused was foreseeable and fairly direct; (2) the state official acted with a degree of culpability that shocks the conscience; (3) the state and the plaintiff had a relationship such that the plaintiff was a foreseeable victim of the defendant's acts; and (4) the official affirmatively used his authority in a way that created a danger to the citizen or that rendered the citizen more vulnerable to danger than had he never acted.

Plaintiff alleged an objective theory of liability, which means that the official should have known of the substantial risk. In order to prove a state-created danger claim, the accuser must show that the accused had a mental state of "deliberate indifference," meaning that Schroeter was actually aware that his conduct carried a substantial risk of harm. Schroeter argued that the objective theory of liability was not clearly established at the time he pulled the trigger and therefore the complaint should be dismissed under the doctrine of qualified immunity. The district court agreed with Schroeter and dismissed the complaint with prejudice.

The Third Circuit reversed and held that Plaintiff adequately pleaded a state-created danger claim. The Court noted that qualified immunity "shields government officials from civil liability for constitutional violations if 'their actions could reasonably have been thought consistent with the rights they are alleged to have violated.'" Qualified immunity attaches if (1) the facts that the plaintiff has alleged make out a violation of a constitutional right, and (2) the right at issue was "clearly established" at the time of the defendant's alleged misconduct.

The Third Circuit noted that culpability changes in three different types of situations. In a higher-pressure environment, actual intent to harm is required because there is less time to react. In situations where action is required within hours or minutes, the Court requires an actor to disregard a great risk of serious harm. In situations where an actor is not required to make a hurried judgment, such as this case, deliberate indifference will satisfy the culpability requirement. The Third Circuit noted that deliberate indifference falls somewhere in between intent and negligence. Because the right at issue must be clearly established at the time of the violation, the Third Circuit looked to the state of the law at the time of the shooting in order to determine whether deliberate indifference could be satisfied using an objective test. At the time of the shooting, the objective test was not clearly established but the subjective test was.

Next, the Third Circuit looked to whether plaintiff complaint pleaded facts that could establish a subjective theory of liability. Although plaintiff did not plead outright what Schroeter should have known, she alleged facts that supported an inference of actual, subjective knowledge of a substantial risk of lethal harm. The Third Circuit noted that a plaintiff can plead deliberate indifference by reference to circumstantial and direct evidence. Circumstantial evidence can consist of: (1) evidence that the risk was obvious or a matter of common sense; (2) evidence that the actor had particular professional training or expertise; and (3) evidence that the actor was expressly advised of the risk of harm and the procedures designed to prevent that harm and proceeded to violate these procedures. Here, the court noted several pieces of circumstantial evidence such as the obvious risk of pointing a gun at another person and pulling the trigger, Schroeter's twenty years of experience and specialized training, and Schroeter's awareness and violation of the safety rules. The Third Circuit also pointed to Schroeter's guilty plea in his criminal trial as direct evidence of Schroeter's mental state. Under Pennsylvania law, his guilty plea admitted that he recklessly engaged in conduct which placed another person in danger of death or serious bodily injury with the mental state of conscious disregard of a substantial and unjustifiable risk.

The Third Circuit concluded that the obviousness of the risk in pointing a gun at a defenseless person and pulling the trigger without undertaking any safety check reflected Schroeter's conscious disregard of a substantial risk of serious harm. Therefore, the plaintiff's complaint was sufficient under the clearly established subjective theory of deliberate indifference.

The full opinion can be found at   http://www2.ca3.uscourts.gov/opinarch/161417p.pdf

Panel: Fisher, Krause, and Melloy, Circuit Judges

Argument Date: December 5, 2016

Date of Issued Opinion: November 28, 2017

Docket Number: 16-1417

Decided: Reversed and remanded.

Case Alert Author: Emily Anderson

Counsel: Michael J. Quirk, Esquire and Gerald J. Williams, Esquire, Counsel for Appellant; Kevin R. Bradford, Esquire, Stephen R. Kovatis, Esquire and Claudia M. Tesoro, Esquire, Counsel for Appellee.

Author of Opinion: Circuit Judge Krause

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 12/01/2017 09:25 AM     3rd Circuit     Comments (0)  

November 30, 2017
  United States v. Giddins -- Fourth Circuit
Would I Lie to You? Fourth Circuit Finds Deceit by Police Made Post-Waiver Statements Inadmissible

Areas of Law: Constitutional Law, Criminal Law

Issue Presented: Whether the waiver of the appellant's Miranda rights was involuntary and the result of coercion; and if so, whether the admission of the appellant's post-waiver statements was harmless error?

Brief Summary: After a series of robberies, during September 2013, Master Giddins was convicted on one count of bank robbery and one count of conspiracy to commit bank robbery. Statements Giddins made during a custodial interrogation had been introduced at his trial. In a published opinion, the United States Court of Appeals for the Fourth Circuit found that Giddins' waiver of his Miranda rights was involuntary, and that his post-waiver statements were therefore inadmissible. Furthermore, the Fourth Circuit concluded that the error in introducing the post-waiver statements was not harmless. The Fourth Circuit reversed Giddins' conviction.

Extended Summary: During September 2013, in Baltimore, Maryland, three different banks were robbed over the course of three days. The first robbery occurred on September 25, 2013. After the robbery, the robber fled the bank and was driven away in a waiting, silver Ford Focus. Police later determined that the robber was the appellant Master Giddins, that the getaway car used was his silver Ford Focus, and that the getaway driver was his girlfriend, Czekiah Fludd. On September 26th and 27th, Fludd committed two other robberies. She was assisted by Ashley Fitz and Alexis Chandler. During the commission of both robberies, Fludd used Giddins' silver Ford Focus. After returning to the scene of the final robbery for money they had discarded, Fludd, Fitz, and Chandler were arrested and the Ford Focus was seized.

Based on statements and evidence obtained from Fitz, after her arrest, detectives of the Baltimore County Police Department (hereinafter "BCPD") applied for and obtained a warrant for Giddins' arrest. On October 4, 2013, after learning that BCPD had his vehicle, Giddins went to the BCPD's headquarters to retrieve his property. Upon arrival, Giddins was taken to an interrogation room where his interactions with officers and detectives were recorded.

During the interview, the officers: (1) locked one of the doors to the interrogation room, (2) asked about the person to whom Giddins lent his vehicle, (3) requested and then removed Giddins phone from his vicinity, and (4) informed Giddins that this was the procedure necessary for retrieving his vehicle. Several times during the interview, Giddin's asked if "[he was] in trouble." The officers replied that he was not. Later, a detective produced a Miranda waiver and told Giddins they had to read him his rights because his car was involved in a crime. Giddins again inquired if this was the procedure necessary for retrieving his vehicle and the officers again informed him these were the necessary steps. Before signing the Miranda waiver, Giddins asked a final time if he was in trouble and the officers responded that he was not. After signing the waiver, Giddins was questioned for 15 minutes about his involvement in the September 25th robbery, informed by the detectives that they believed he was the robber, and formally notified that he was under arrest for bank robbery.

Giddins was indicted by a federal grand jury in the District of Maryland. Giddins' motion to suppress his statement to police was denied and the video of Giddins' interrogation was played at trial. The jury convicted Giddins on one count of bank robbery and one count of conspiracy to commit bank robbery. Giddins appealed.

The Fourth Circuit reversed the district court's judgment, determining that Giddins' waiver of his Miranda rights was involuntary and that his post-waiver statements were therefore inadmissible. Furthermore, the Fourth Circuit concluded that the error in introducing those statements was not harmless. In finding relief was warranted, the Fourth Circuit found that: (1) Miranda's protections applied because Giddins was in the custody of the BCPD and subject to an interrogation, (2) his waiver of his rights, and subsequent statements were the result of coercion, and, thus, involuntary, and (3) the jury would not have convicted Giddins absent the error.

In order to determine whether a Miranda waiver was necessary, the court first analyzed whether Giddins was in custody and subject to interrogation. In finding that Giddins was in custody, the court asked "whether a reasonable person would have felt [he was] not at liberty to terminate the interrogation and leave." Contrary to the district court's custody conclusion, the Fourth Circuit found that Giddins was not at liberty to terminate the interrogation and leave. The court asserted that although the detectives informed Giddins he could leave, this statement was not enough to show a lack of custody.

Having found Miranda applied, the court then turned to whether Giddins' waiver and subsequent statements were the involuntary product of coercion. As to coercion, the Fourth Circuit determined that Giddins was subjected to two forms: (1) economic coercion and (2) coercion via deceit. With regard to economic coercion, Giddins successfully argued that the police engaged in economic coercion by forcing him to "choose between surrendering his Fifth Amendment rights or incurring adverse economic consequences." The court asserted that because Giddins relied on his vehicle to get to work, when the police officers bound his ability to retrieve his vehicle with the waiver of his Miranda rights, the officers unduly coerced Giddins by depriving him of an economic benefit.

Next, the court examined whether the officers engaged in unfair coercion by lying to Giddins about whether he was "in trouble." The court acknowledged that officers have no affirmative duty to "inform [a defendant] of the identity of the specific offense under investigation." However, relying on the Seventh Circuit decision in United States v. Serlin, the court found that failing to inform Giddins he was the subject of an investigation after Giddins inquired specifically whether he was "in trouble," resulted in affirmative deceit that was material to Giddins' decision to speak. The court then considered whether the coercion rose to such a level that "the defendant's will [w]as overborne or his capacity for self-determination critically impaired." The court found that Giddins was encouraged to waive his rights and that the coercive tactics used by the police met the threshold necessary to establish that Giddins' will was overborne and his capacity for self- determination critically impaired.

Finally, the court evaluated the question of harm. Relying on Arizona v. Fulminante, the court determined that a jury would not have found Giddins guilty absent the error: (1) the recorded statements made by Giddins during the interview were important to the government's case, given their reliance on the video throughout the trial; and (2) the video was used to establish the credibility of other evidence used to convict Giddins. The Fourth Circuit determined that the error not harmless, and reversed Giddins' conviction.

To read the full opinion, click here.

Panel: Judges King, Agee, and Floyd

Argument Date: 01/25/2017

Date of Issued Opinion: 06/07/2017

Docket Number: 15-4039

Decided: Reversed by published opinion.

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

Counsel: ARGUED: Meghan Suzanne Skelton, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Greenbelt, Maryland, for Appellant. Kenneth Sutherland Clark, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellee. ON BRIEF: James Wyda, Federal Public Defender, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Baltimore, Maryland, for Appellant. Rod J. Rosenstein, United States Attorney, Debra L. Dwyer, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellee.

Author of Opinion: Judge Floyd

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/30/2017 03:53 PM     4th Circuit     Comments (0)  

November 27, 2017
  United States v. Palin -- Fourth Circuit
Living in a Material World: Fourth Circuit Finds Universal Health Did Not Shift Materiality Standard Applicable to Health Care Fraud

Areas of Law: Health Law, White Collar Crime

Issue Presented: Whether the trial court applied the correct standard when determining the materiality of certain misrepresentations to the accused's health care fraud scheme.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit affirmed the holding of the district court that found Beth Palin and Joseph Webb guilty of health care fraud and conspiracy to engage in health care fraud. Palin owned an addiction clinic and lab. Webb assisted her in operating both facilities. The two instituted a scheme to defraud health care benefit programs. Pursuant to the scheme, the lab performed expensive weekly tests on insured patients that were not medically necessary. However, the appellants were both aware that insurers prohibit providers from submitting claims for unnecessary tests.

After being found guilty, the appellants moved for a new trial, relying in part on Universal Health Services, Inc. v. United States, 136 S. Ct. 1989 (2016). The appellants contended that Universal Health changed the materiality standard applicable to health care fraud, rendering their asserted misrepresentations immaterial. The district court denied the motions.

On review, the Fourth Circuit first acknowledged the district court had not expressly ruled on materiality. But, to the extent this omission was an error, it was harmless because no rational fact finder could conclude the misrepresentations were not material. The court also found that Universal Health did not establish a new standard of materiality for healthcare fraud. Even if it had, under Universal Health's standard, the appellants' misrepresentations were material because insurers would not have paid for medically unnecessary tests. Ultimately, the Fourth Circuit affirmed the holding of the lower court.

Extended Summary: Beth Palin owned both an addiction clinic and a lab. The facilities were operated by Palin with the assistance of Joseph Webb. The lab performed two types of urine analysis tests: a basic, inexpensive "quick cup" test, and a more expensive "analyzer" test. Doctors ordering drug testing for their patients often did not specify which test they wished for the patient to receive. Knowing that insurers do not pay for medically unnecessary tests, Palin and Webb implemented a scheme to treat insured patients differently than uninsured patients. Uninsured patients received the "quick cup" test each week and paid cash. Insured patients received both the "quick cup" and the "analyzer" test. These patients paid for the "quick cup" in cash, and the lab billed insurers for the "analyzer" test.

The district court found both Palin and Webb guilty of health care fraud and conspiracy to engage in health care fraud, in violation of 18 U.S.C. §§ 1347 and 1349. The court determined that Palin and Webb created and executed a plan that was expressly prohibited by insurers - submitting claims for medically unnecessary tests. Palin and Webb moved for a new trial relying, in part, on Universal Health Services, Inc. v. United States, 136 S. Ct. 1989 (2016), a decision issued after the guilty verdict. They argued that the materiality standard applicable to health care fraud under Universal Health rendered their asserted misrepresentations immaterial. The district court denied the motion, and Palin and Webb appealed.

In affirming the lower court, the Fourth Circuit first analyzed whether the district court erred by not expressly ruling on materiality. Since harmless error review applies and because both the government and the appellants agreed that materiality constitutes an element of health care fraud, the Fourth Circuit had to conclude beyond a reasonable doubt that the appellants' guilty verdict would have been the same absent the error. Relying on United States v. Poole, 640 F.3d 114, 120 (4th Cir. 2011), the Fourth Circuit determined that the record contained no evidence to suggest that, sans the error, insurers would have knowingly paid for the medically unnecessary "analyzer" test. Accordingly, the court concluded that even if the district court's omission was error it did not justify reversal because the error was harmless.

Next, the Fourth Circuit considered whether the materiality standard expressed in Universal Health negated the materiality of the appellants' misrepresentations and thus compelled relief. In Universal Health, the Supreme Court discussed how materiality applies with regard to the specific theory of FCA liability known as "implied false certification." With regard to that form of liability, the Court wrote, "if the government pays a particular claim despite knowing certain requirements for payment were violated, 'that is very strong evidence that those requirements are not material.'" Under this standard, the appellants argued that material misrepresentation didn't exist in their own case because the insurers regularly paid the "analyzer" test claims without knowing the type of test and frequency.

The Fourth Circuit determined that the appellants misconstrued Universal Health. First, the court doubted the appellants' implication that the Supreme Court intended to broadly "overrule" materiality standards that had previously applied in the context of criminal fraud. Second, the Fourth Circuit propounded that the Court's examination of materiality for "implied false certifications" did not extend to health care fraud. Finally, the Fourth Circuit found Palin and Webb's misrepresentations to be material even under Universal Health. The court determined that if materiality "looks to the effect on the likely or actual behavior of the recipient of the alleged misrepresentation," as provided in Universal Health, then the appellants' misrepresentations were material because insurers would not have paid for the "analyzer" tests had they known that the tests were medically unnecessary. The Fourth Circuit similarly rejected appellants' other claims and affirmed.

To read the full opinion, click here.

Panel: Judges Motz, Duncan, and Wynn

Argument Date: 09/13/2017

Date of Issued Opinion: 10/30/2017

Docket Number: 16-4522

Decided: Affirmed by published opinion.

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

Counsel: Michael John Khouri, LAW OFFICES OF MICHAEL KHOURI, Laguna Hills, California; Nancy Combs Dickenson, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Abingdon, Virginia, for Appellants. Janine Marie Myatt, OFFICE OF THE UNITED STATES ATTORNEY, Abingdon, Virginia, for Appellee. ON BRIEF: Larry W. Shelton, Federal Public Defender, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Roanoke, Virginia, for Appellant Joseph D. Webb. Rick A. Mountcastle, Acting United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Roanoke, Virginia, for Appellee.

Author of Opinion: Judge Motz

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/27/2017 04:04 PM     4th Circuit     Comments (0)  

  Randolph v. Powercomm Construction, Inc. -- Fourth Circuit
Construction Company Convinces Fourth Circuit to Rebuild Attorney's Fee Award

Areas of Law: Employment Law

Issue Presented: Whether the district court abused its discretion by including time-barred claims in its award of attorney's fees.

Brief Summary: In an unpublished opinion, the United States Court of Appeals for the Fourth Circuit held that the district court misapplied the fee analysis framework when it failed to provide any justification for including time-barred claims in its calculation of attorney's fees.

Extended Summary: In July 2014, a group of sixty five employees sued their employer, Powercomm Construction, Inc. ("Powercomm"), in a collective action seeking $790,000 in damages, including $263,305 in overtime wages and $526,661 in liquidated damages. A year later, the U.S. District Court for the District of Maryland dismissed the claims of ten of the employees because their claims were barred by the governing statutes of limitations. In April 2016, the remaining fifty five employees settled their claims with Powercomm for $100,000, excluding attorney's fees. Shortly thereafter, the attorney for the employees filed a motion requesting $227,577 in attorney's fees. Upon reviewing the merits of the request, the district court awarded fees, but reduced the amount to $183,764. Powercomm appealed, contending that the attorney's fees were excessive because (1) ten plaintiffs had been dismissed from the case; and (2) the settlement amount was far less than the amount initially requested.

On review, the Fourth Circuit held the district court had abused its discretion. The court first laid out the three-step fee analysis framework from McAfee v. Boczar, 738 F.3d 81, 88 (4th Cir. 2013). Under this framework, the court must first multiply the number of hours expended by a reasonable hourly rate. Second, when an attorney is successful in some claims but unsuccessful in others, the court must deduct the fees allocated to the unsuccessful claims if they are unrelated to the successful claims and do not share a "common core of facts." Third, using some discretion, the court must consider the degree of success reached in order to determine the percentage of the remaining amount to award. Steps two and three were at issue in this case.

The court first looked at the second step of the McAfee fee analysis test. While the district court did address this step, the Fourth Circuit found that the lower court erred because it did not discuss whether the unsuccessful, time-barred claims shared a common set of facts with the successful claims. Even though the Fourth Circuit did resolve that question, it made its opinion clear, stating it was "difficult to imagine how the time-barred claims of the dismissed Plaintiffs [could be] intertwined with the successful claims." On remand, the Fourth Circuit instructed the district court to properly analyze the second step by determining whether the successful and unsuccessful claims were sufficiently related.

The court also held that the district court clearly erred in applying the third step of the McAfee framework because it relied on an inaccurate number in determining whether the attorney's fee award was proportional to the degree of success reached. Specifically, the district court chose not to reduce the award because, in the court's eyes, the plaintiffs received 38% of their claimed damages. However, the Fourth Circuit pointed out that the 38% only accounted for the $100,000 settlement number in comparison to the $267,777 claim for unpaid overtime wages. The Fourth Circuit held that this calculation was improper because it did not incorporate the additional claim for liquidated damages. Had the liquidated damages been considered, the plaintiffs would have received only 13% of their demand in comparison.

Because the district court misapplied steps two and three of the fee analysis framework, the Fourth Circuit vacated the award and remanded for further consideration.

To read the full opinion, click here.

Panel: Judges Shedd, Thacker, and Floyd.

Date of Issued Opinion: 10/31/2017

Docket Number: No. 16-2370

Decided: Decided by unpublished opinion.

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

Counsel: Geoffrey M. Bohn, Robert A. Battey, BOHN & BATTEY, PLC, Arlington, Virginia, for Appellants. Nicholas Woodfield, R. Scott Oswald, EMPLOYMENT LAW GROUP, PC, Washington, D.C., for Appellees.

Author of Opinion: Per Curiam Opinion

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/27/2017 03:41 PM     4th Circuit     Comments (0)  

  United States v. Thompson -- Fourth Circuit
Narrowing Johnson's Scope: Similar Risk and Kind Requirements Remain for Residual Clause of the Sentencing Guidelines

Areas of Law: Criminal Law, Statutory Interpretation, Sentencing Guidelines

Issue Presented:
Whether a prior North Carolina conviction for assault inflicting serious bodily injury permitted the district court to increase Thompson's sentence under the United States Sentencing Guidelines § 4B1.2's residual clause.

Brief Summary:
In a published opinion, the United States Court of Appeals for the Fourth Circuit analyzed whether the residual clause of the Sentencing Guidelines for designated career offenders (§ 4B1.2) authorized the United States District Court for the Eastern District of North Carolina to increase Thompson's sentence because of his prior conviction. In order for § 4B1.2 to apply, the prior conviction had to constitute a crime of violence. The Fourth Circuit found that Thompson's prior conviction was a crime of violence under the residual clause because it posed a similar degree of risk and was similar in kind to § 4B1.2's enumerated offenses.

Extended Summary: In 2015, Thompson pled guilty to possession of marijuana with intent to distribute and being a felon in possession of a firearm. Thompson had also been convicted previously of assault inflicting serious bodily injury ("AISBI"), a violation of North Carolina law. Due to this prior offense, Thompson's probation officer recommended that the district court increase Thompson's sentence pursuant to § 4B1.2's residual clause, which covers all unnamed "crimes of violence" that "involve conduct that presents a serious potential risk of potential injury" to others. The enumerated offenses in § 4B1.2 include arson, burglary of a dwelling, and use of explosives.

Thompson argued that AISBI is not a crime of violence. When the district court disagreed and sentenced him to an enhanced sentence of 120 months imprisonment and 3 years supervised release, Thompson appealed, maintaining that his prior conviction for AISBI was not a crime of violence under § 4B1.2's residual clause.

In its analysis, the Fourth Circuit noted that the Sentencing Guidelines' definition parallels the residual clause of the Armed Career Criminal Career Act ("ACCA")'s definition of "violent felony," and that courts apply the Supreme Court's ACCA residual clause analysis to § 4B1.2's residual clause. While the Supreme Court ruling in Johnson declared the ACCA's residual clause unconstitutional, the Fourth Circuit held that that decision did not change the required analysis of the residual clause of the Guidelines' provision.

In order to qualify as a crime of violence under § 4B1.2, the Fourth Circuit explained that the crime must first have the same "degree of risk" as the offenses enumerated in § 4B1.2. The Fourth Circuit relied on James v. United States, in which the Supreme Court held that attempted burglary was a violent felony under the ACCA because attempted burglary posed the same degree of risk to others as the enumerated offenses in the ACCA. Since the Court of Appeals of North Carolina stated that AISBI applies to especially violent assaults and assaults that result in severe injuries, the crime involved the same degree of risk as the enumerated offenses in § 4B1.2.

The Fourth Circuit then determined whether AISBI represented a crime "similar in kind" to the offenses enumerated in § 4B1.2. The Fourth Circuit noted that in Begay v. United States, the Supreme Court found that a prior DUI conviction did not constitute a violent felony because Congress intended to cover crimes that were similar in kind to the enumerated offenses, but did not intend to include every crime that posed a serious potential risk of harm to others. To qualify, the crime must include "purposeful, violent, and aggressive conduct." The Fourth Circuit found that AISBI was similar in kind to the enumerated offenses because every North Carolina AISBI case supported the notion that convictions for AISBI require "purposeful, violent, and aggressive conduct."

Because Thompson's prior AISBI conviction posed the similar degree of risk and was similar in kind to § 4B1.2's enumerated offenses, the Fourth Circuit affirmed his increased sentence.

To read the full opinion, click here.

Panel: Circuit Judges Motz, Wilkinson, and Diaz

Argument Date:
09/12/2017

Date of Issued Opinion: 10/26/2017

Docket Number: 15-4685

Decided: Affirmed by published opinion

Case Alert Author:
Matthew Schofield, Univ. of Maryland Carey School of Law

Counsel: Jennifer Claire Leisten, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Raleigh, North Carolina, for Appellant. Phillip Anthony Rubin, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee. ON BRIEF: Thomas P. McNamara, Federal Public Defender, Stephen C. Gordon, Chief Appellate Attorney, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Raleigh, North Carolina, for Appellant. John Stuart Bruce, Acting United States Attorney, Jennifer P. May-Parker, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee.

Author of Opinion: Circuit Judge Motz

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/27/2017 01:31 PM     4th Circuit     Comments (0)  

  Campbell-McCormick, Inc. v. Oliver -- Fourth Circuit
Not All Opinions Are "Final Decisions" and Not All Rights Are "Important Enough": Fourth Circuit Dismisses Appeal for Want of Jurisdiction

Areas of Law: Civil Procedure, Appellate Jurisdiction

Issue Presented: Whether the appellate court had jurisdiction over a challenge to the district court's decision to sever and remand to state court certain claims filed against the defendant-appellant, if the district court retained jurisdiction over claims appellant filed against third parties in the same suit.

Brief Summary: The defendant-appellant Campbell-McCormick, Inc. ("CMC") appealed the decision of the district court to remand the plaintiff-appellee Wayne Oliver's claims to state court. As a preliminary matter, the Court of Appeals considered whether it had appellate jurisdiction to review the district court's decision. The jurisdictional questions before the court were whether the district court's remand order constituted a final decision within the meaning of 28 U.S.C. § 1291, and if not, whether the collateral order doctrine applied to establish appellate jurisdiction. In a published opinion, the United States Court of Appeals for the Fourth Circuit held that it lacked appellate jurisdiction because (1) the district court's remand order did not constitute a final decision within the meaning of 28 U.S.C. § 1291, and (2) the collateral order doctrine did not apply.

Extended Summary: Plaintiff Wayne Oliver filed a complaint in Maryland state court alleging asbestos exposure claims against multiple defendants, including Campbell-McCormick, Inc. ("CMC"). CMC filed a third-party complaint against several other entities, including General Electric Company ("GE"). GE removed the litigation into federal court in the District of Maryland, and Oliver subsequently moved to sever his claims and remand them to state court. The federal district court granted Oliver's motion to remand, but retained jurisdiction over CMC's third-party claims, which the court stayed. CMC appealed to the United States Court of Appeals for the Fourth Circuit arguing that the district court had erroneously severed and remanded Oliver's claims. The Fourth Circuit did not consider the merits of the appeal because the court determined it did not have appellate jurisdiction.

Under 28 U.S.C. § 1291, the intermediate federal appellate courts have jurisdiction over appeals from all final decisions of the district courts of the United States. Citing a recent Supreme Court decision, the Fourth Circuit noted that "a final decision is one that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Ray Haluch Gravel Co. v. Cent. Pension Fund of Int'l Union of Operating Eng'rs, 134 S. Ct. 773, 779 (2014). The Fourth Circuit concluded that because the district court retained jurisdiction over and stayed the third-party claims, the remand order issued by the district court did not constitute a final decision under § 1291.

The Fourth Circuit next recognized that the collateral order doctrine provides an alternate source of appellate jurisdiction under § 1291. To qualify for collateral order review, an order must "[1] conclusively determine the disputed question, [2] resolve an important issue completely separate from the merits of the action, and [3] be effectively unreviewable on appeal from a final judgment." Will v. Hallock, 546 U.S. 345, 349 (2006). The Fourth Circuit noted that the importance of the right asserted by the appellant has always been a significant part of the court's analysis, when considering the elements listed above. Examples of rights that the Supreme Court has deemed sufficiently important to merit collateral order review include: the right to avoidance of double jeopardy and the right of a public official to qualified immunity. In contrast, other rights have been deemed not sufficiently important to warrant application of the collateral order doctrine. These rights include things like a pretrial discovery order rejecting an attorney-client privilege claim. The Fourth Circuit concluded that the right asserted by CMC - the right to keep Oliver's claims in federal court - was "insufficiently important to give rise to collateral order jurisdiction," and therefore the collateral order doctrine was not satisfied. The court held it lacked jurisdiction to hear the appeal and, therefore, dismissed it.

To read the full opinion, click here.

Panel: Judges King and Thacker, and District Judge Gibney

Argument Date: 09/13/2017

Date of Issued Opinion: 10/24/2017

Docket Number: 16-1895

Decided: Appeal dismissed by published opinion.

Case Alert Author: Taylor McAuliffe, Univ. of Maryland Carey School of Law

Counsel:
ARGUED: Steven Joseph Parrott, DEHAY & ELLISTON, L.L.P., Baltimore, Maryland, for Appellant. Ian Gill Thomas, BROWN GOULD KIELY LLP, Bethesda, Maryland; David Michael Sturm, TADDEOSTURM PLC, Richmond, Virginia, for Appellees. ON BRIEF: Patrick C. Smith, John C. Ruff, DEHAY & ELLISTON, L.L.P., Baltimore, Maryland, for Appellant. Daniel A. Brown, Matthew E. Kiely, BROWN GOULD KIELY LLP, Bethesda, Maryland, for Appellees Clifford Oliver and June R. Stearns. F. Ford Loker, MILES & STOCKBRIDGE, P.C., Baltimore, Maryland, for Appellee Aurora Pump Company. Gerry H. Tostanoski, TYDINGS & ROSENBERG LLP, Baltimore, Maryland, for Appellee Atwood & Morrill Company. Malcolm S. Brisker, GOODELL, DEVRIES, LEECH & DANN, LLP, Baltimore, Maryland, for Appellees Johnson Controls, Inc. and Viking Pump, Inc. Anthony B. Taddeo, Jr., TADDEOSTURM PLC, Richmond, Virginia, for Appellee Velan Valve Corp. Michael L. Haslup, Jonathan J. Huber, MILES & STOCKBRIDGE, P.C., Baltimore, Maryland, for Appellee Ingersoll-Rand Company. Robert E. Scott, Jr., Richard J. Medoff, SEMMES, BOWEN & SEMMES, Baltimore, Maryland, for Appellee Marotta Controls, Inc.

Author of Opinion: Judge King

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/27/2017 01:18 PM     4th Circuit     Comments (0)  

  Solomon v. Bell-Rozelle NFL Player Retirement Plan -- Fourth Circuit
"Pro Football Is Like Nuclear Warfare. There Are No Winners, Only Survivors": NFL Disability Benefits Grant Must Be More than "Inactive"

Areas of Law: Employment, Disability

Issue Presented: Whether the district court erred in holding that the Bert Bell/Pete Rozelle NFL Player Retirement Plan (the "Plan") abused its discretion in denying a certain type of disability benefits to a former NFL player.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held that the United States District Court for the District of Maryland correctly found that the Plan abused its discretion in granting a former NFL player second-tier disability benefits. The Fourth Circuit found that the Plan failed to follow a reasoned process or explain the basis of its determination regarding the former player's application for disability, thus abusing its discretion.

Extended Summary: Jesse Solomon played in the NFL for 9 seasons before retiring in 1995. Over the court of Solomon's career he sustained more than 69,000 full-speed contact hits and suffered numerous orthopedic injuries requiring multiple operations. Solomon's injuries resulted in him experiencing symptoms of chronic traumatic encephalopathy ("CTE"), chronic knee pain, depression, and anxiety. Solomon's injuries forced him to resign from his job as a high school teacher and football coach in 2007. Due to his inability to work, Solomon sought disability benefits under the Plan.

Solomon first applied for benefits in 2009, asserting that football-related orthopedic injuries rendered him unable to work. The Plan denied Solomon's 2009 application. In 2010, Solomon again applied for disability benefits, claiming that football-related neurological and cognitive impairments rendered him unable to work. While the decision regarding Solomon's 2010 application was pending, the Social Security Administration ("SSA") granted Solomon disability benefits, finding that the onset date of Solomon's disability was October 29, 2008. Pursuant to the terms of the Plan, a determination from the Social Security Administration that a player is eligible for Social Security Disability benefits automatically entitles the player to disability benefits under the Plan.

The highest level of benefits, "Football Degenerative," apply when a player becomes totally disabled less than 15 years after the player retires. A lower tier of benefits, "Inactive" benefits, apply when a player becomes totally disabled more than 15 years after retirement. "Football Degenerative" benefits pay more per month than "Inactive" benefits. The Plan granted Solomon's application and found that he was entitled to the lower level of "Inactive" benefits

Solomon sought reclassification from "Inactive" to "Football Degenerative" because the SSA found that the onset date of his disability was less than 15 years after he retired. His request for reclassification was denied. Solomon appealed the denial of his reclassification to the United States District Court for the District of Maryland. The district court held that Solomon was entitled to "Football Degenerative" benefits for two reasons. First, according to the court, the SSA's disability-onset date bound the Plan. Alternatively, the court found Solomon was entitled to "Football Degenerative" benefits because the Board abused its discretion in making an "Inactive" determination.

On review, the Fourth Circuit agreed that the Plan abused its discretion in classifying Solomon as "Inactive." Accordingly, the court did not reach the question of whether the SSA's disability-onset date determination bound the Plan. However, the court acknowledged in a footnote that the Plan has since been amended to state that the SSA's disability-onset date determination is not binding for the purpose of Plan benefits.

Solomon's 2009 application listed only orthopedic injuries. Consequently, the Fourth Circuit found the denial of that application had no bearing on whether Solomon was disabled due to cognitive injuries as Solomon's 2010 application alleged. The court held that the Plan was required to consider the facts and rely on substantial evidence to sustain a denial of benefits. However, the court determined that the Plan had relied on no evidence and ignored multiple doctors' examinations, including from its own neutral neurologist, regarding the severity of Solomon's brain injuries. The Fourth Circuit concluded by stating that the Plan's decision to exclude evidence and deny Solomon "Football Degenerative" benefits was arbitrary.

To read the full opinion, click here.

Panel: Judges Motz, Shedd, and Duncan

Argument Date: 05/9/2017

Date of Issued Opinion: 06/23/2017

Docket Number: No. 16-1730

Decided: Decided by published opinion.

Case Alert Author: Tim Willman, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Michael Lee Junk, GROOM LAW GROUP, CHARTERED. Washington, D.C., for Appellants. Adam Ben Abelson, ZUCKERMAN SPAEDER LLP, Baltimore, Maryland, for Appellee. ON BRIEF: Cyril V. Smith, ZUCKERMAN SPAEDER LLP, Baltimore, Maryland, for Appellee.

Author of Opinion: Judge Duncan

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/27/2017 12:42 PM     4th Circuit     Comments (0)  

  United States of America v. John Francis Ley - Third Circuit
Headline: The Issuance of a Summons Is Not Considered a Formal Arrest when Considering the Criminal History of the Sentencing Guidelines

Area of Law: Sentencing Guidelines - Criminal History

Issue Presented: Does a traffic stop with a subsequent issuance of a summons count as an intervening arrest within the context of the criminal history Guidelines?

Brief Summary: John Ley pleaded guilty in the Western District of Pennsylvania to one count of a convicted felon in possession of a firearm and ammunition. 18 U.S.C. § 922(g)(1). The U.S. Probation Office ("Probation") prepared a presentence investigation report ("Report") that would include any prior criminal history before the current charge. The Sentencing Guidelines provide a range of time appropriate for sentencing depending on multiple factors including criminal history. The Guidelines determine that the higher a category a person falls into the more time must be considered.

Ley objected to the Report's treatment of his criminal history as involving two arrests, which put him in a higher category than he should have been. The District Court overruled Ley's objection, and two days later Probation filed a supplemental addendum before the final sentencing. Probation stood by its analysis, and the District Court therefore sentenced Ley in the higher sentencing category.

Extended Summary: John Ley pleaded guilty for being a convicted felon in possession of a firearm and ammunition. Probation provided the District Court with a Report that included two prior arrests. Sentencing is based on a variety of factors that add up to determine the category of sentencing. The criminal history Guidelines provide that unless there is an intervening arrest prior sentences are counted as a single sentence if they were imposed on the same day. Ley committed two drug paraphernalia offenses, one on September 28, 2015 and the other the following day. He received a summons for both and pleaded guilty and was sentenced for both on the same day in May 2016.

Ley objected to the report's characterization of the September 2015 offenses. Ley argued they should be considered one single event because there was no intervening arrest and both were sentenced on the same day. He further asserted that due to this treatment of his criminal history his sentencing was put in a higher category subjecting him to stronger sentencing in the current case before the District Court. The District Court overruled Ley's objection, and two days later Probation filed a supplemental addendum and stood by its position in the Report. The District Court therefore sentenced Ley in the higher category.

The Third Circuit analyzed the issue of whether the term "arrest" included a traffic stop that resulted in summons to appear. First, the Circuit Court rejected the Government's argument that Ley failed to specifically object to the supplemental addendum that created a new factual matter for argument. The Circuit Court explained that Ley objected to the broader issue of how the District Court treated his criminal history in consideration of the Sentencing Guidelines. It discussed how issues are distinguished from arguments because issues are broader and can contain multiple legal arguments. Therefore, the contents of the supplemental addendum are a part of the overall legal issue and not a specific argument that Ley needed to preserve for appeal. Additionally, the Government asserted that the Magisterial District Court Docket Sheet listed September 28, 2015 as the "arrest date." The Circuit Court disagreed that the listed date concluded that Ley was actually arrested. It explained that the state could label an "arrest" and "summons" under the same label for logistical purposes and did not shed light on whether there was an actual arrest.

Second, the Circuit Court analyzed the single sentence rule. The single sentence rule states that prior sentences will always be counted separately if the sentences were separated by an intervening arrest. Further, if there are no intervening arrest prior sentences are still counted separately unless the sentences were imposed on the same day. The Circuit Court began its explanation by defining "arrest" and "summons" in plain terms. An "arrest" is commonly understood as "the taking or detainment (of a person) in custody, imprisonment;" this is distinct from a "summons," which is "a warning or citation to appear in court." The Court, thus, rejected the Government's argument that these are commonly considered to be equal. The Circuit Court believed it would be too far-reaching if every summons was considered an arrest. It further analyzed the term "arrest" in the context of federal criminal procedure. The Supreme Court held in Knowles v. Iowa, 525 U.S. 113, 117 (1998) that the issuance of a citation for a traffic stop is not equal to a custodial arrest. Furthermore, in the context of Miranda warnings a person is "in custody" when there is a restraint on freedom or movement to the same degree as a formal arrest.

Finally, it found that other sister Circuit Courts, except the Seventh Circuit, have held that the Guidelines consider an intervening arrest to be a formal arrest similar to the definition considered in criminal procedure jurisprudence. The Court examined the Seventh Circuit's reasoning for a different conclusion and found it to be unpersuasive. The Circuit Court, therefore, concluded that a traffic stop resulting in a summons is not an arrest. It held that for the purpose of criminal history in the Sentencing Guidelines an arrest must be a formal and custodial arrest. Further, the Circuit Court found that its holding was in accordance with Sentencing Guideline policies that courts should not overstate criminal history.

Ley brought two other issues for the Third Circuit Court to consider, but since the sentence was already vacated and remanded these issues were not addressed. The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/163793p.pdf

Panel: Hardiman, Roth, and Fisher, Circuit Judges.

Argument Date: May 23, 2017

Date of Issued Opinion: November 22, 2017

Docket Number: No. 16-3793

Decided: Vacated and Remanded.

Case Alert Author: Nina F. del Valle

Counsel: Lisa B. Freeland, Esq., W. Penn Hackney, Esq., and Samantha L. Stern, Esq., Counsel for the Appellant; and Soo C. Song, Esq., Rebecca, R. Haywood, Esq., and Laura S. Irwin, Esq., Counsel for the Appellee.

Author of Opinion: Circuit Judge Fisher

Circuit: Third Circuit

Case Alert Circuit Supervisor: Professor Mark Rahdert

    Posted By: Susan DeJarnatt @ 11/27/2017 11:02 AM     3rd Circuit     Comments (0)  

November 24, 2017
  Allah v. Milling - Second Circuit
Headline: Second Circuit Rules Prison Officials Are Entitled to Qualified Immunity Despite Violating Inmate's Substantive Due Process Rights

Area of Law: Constitutional Law; Due Process

Issue(s) Presented: Whether prison officials violated an inmate's substantive due process rights by automatically placing him in solitary confinement based on his placement there during a prior term of incarceration, and, if so, whether they are nonetheless entitled to qualified immunity.

Brief Summary: As an inmate serving his sentence in the custody of the State of Connecticut Department of Correction, Allah was placed in solitary confinement after receiving an overall risk score of five. He remained there until his release. Upon return as a pretrial detainee, Allah was automatically placed in the same program. He filed a lawsuit alleging that prison officials violated his substantive due process rights. Reversing in part, the Second Circuit held that although Allah's due process rights were violated, the United States District Court for the District of Connecticut erred in holding that the prison officials are not entitled to qualified immunity.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...9d50e/1/hilite/


Extended Summary: Allah was an inmate in the custody of the State of Connecticut Department of Correction ("DOC"). Each inmate is assigned to a facility pursuant to a classification process that considers, inter alia, his or her committed offense, history of violence, and disciplinary record. Shortly after his arrival at DOC, Allah and other inmates were standing in line near a control station when they were informed that commissary visits would be delayed. Allah asked a correctional officer if he could speak to a lieutenant about this delay, a request that was perceived as an attempt to incite a protest. As a result, Allah was charged with "Impeding Order," had his overall risk score raised to five (high risk), and was placed in Administrative Segregation, a restrictive housing status that provides for closely regulated inmate management and physical separation. He was released in March of 2010 without completing the program.

In September of 2010, Allah returned to DOC custody as a pre-trial detainee and was automatically placed in Administrative Segregation pursuant to DOC's policy, which states that a returning inmate is to be automatically placed in Administrative Segregation if the inmate was discharged from DOC while on that status. During the program, Allah spent 23 hours a day alone in a cell.

Allah filed a lawsuit alleging that DOC's prison officials violated his substantive due process rights by automatically placing him in Administrative Segregation upon re-entry as a pre-trial detainee. Following a two-day bench trial, the United States District Court for the District of Connecticut ruled for Allah and rejected the defendants' claims that they are entitled to qualified immunity. The Second Circuit agreed that Allah's due process rights were violated, but nonetheless held that the prison officials are entitled to qualified immunity.

In Bell v. Wolfish, the Supreme Court held that the Due Process Clause prohibits the punishment of pre-trial detainees prior to an adjudication of guilt. To assess the constitutionality of restrictions placed on pretrial detainees, a court must determine whether the restrictions are imposed for the purpose of punishment or whether they are incident to some other legitimate government purpose, such as the security of the prison. Applying Wolfish, the Second Circuit held Allah's due process rights were violated, finding no evidence that prison officials made an individualized assessment that Allah posed a security risk warranting segregation. Instead, he was placed in Administrative Segregation based solely on his placement during his prior term of incarceration. Notably, the court held that even if the prison officials had assessed Allah's risk, his placement might still be unconstitutional, as a restriction may be punitive if it is excessively harsh.

The Second Circuit majority nonetheless held that the defendants are entitled to qualified immunity, which protects government officials from civil liability insofar as their conduct does not violate clearly established rights of which a reasonable person would have known. The Court concluded that Wolfish does not clearly establish that Allah's placement in Administrative Segregation based solely upon his prior assignment to that program would violate due process. The majority determined that the prison officials were relying on an established DOC practice and such confinement is not prohibited if imposed upon an individualized assessment that a detainee poses a threat to security. The majority further reasoned that the difference between using a prior assignment to evaluate an inmate and automatically placing one in Administrative Segregation might not be apparent to prison officials.

In a separate opinion, Judge Pooler argued that the restraints imposed on Allah were unconstitutional as a response to his minor infraction and that the prison officials should not be afforded qualified immunity.

Panel: Chief Judge Katzmann; Circuit Judges Pooler and Lynch

Argument Date:
2/28/2017

Date of Issued Opinion:
11/22/2017

Docket Number: 16-1443-pr

Decided:
Reversed

Case Alert Author: Joanna Kusio

Counsel:
John J. Morgan, Barr & Morgan, Stamford, CT, for Plaintiff-Appellee; Steven M. Barry, Assistant Attorney General, for George Jepsen, Attorney General for the State of Connecticut, Hartford, CT, for Defendants¿Appellants

Author of Opinion: Circuit Judge Lynch (majority); Circuit Judge Pooler (concurring in part and dissenting in part)

Circuit: 2nd Circuit

Case Alert Circuit Supervisor:
Professor Elyse Diamond

    Posted By: Elyse Diamond @ 11/24/2017 09:22 AM     2nd Circuit     Comments (0)  

November 22, 2017
  Peterson v. Islamic Republic of Iran - Second Circuit
Headline: Second Circuit Remands Dismissal of Claims Against Foreign Banks for Review of Personal Jurisdiction in Case for Recovery on Judgment for Victims of Iranian-Sponsored Terrorism

Area of Law: Personal Jurisdiction

Issue(s) Presented:
Whether the trial court properly dismissed claims against non-sovereign third-party-defendant financial institutions allegedly holding assets of a foreign sovereign subject to execution?

Brief Summary: Plaintiffs-appellants are, or represent, persons who have been adjudicated in the United States District Court for the District of Columbia to be, victims of Iranian-sponsored terrorism. Plaintiffs-appellants obtained federal court judgments against the Islamic Republic of Iran ("Iran') and Iran's Ministry of Intelligence and Security ("MOIS") awarding the plaintiffs billions of dollars in compensatory damages pursuant to §§ 1605(a)(7) and 1605A of the Foreign Sovereign Immunities Act ("FSIA"). After registering their judgments with the United States District Court for the Southern District of New York, plaintiffs-appellants sought to enforce their judgments, in part, by compelling the turnover of approximately $1.68 billion in bond proceeds. Plaintiffs contended that the bond proceeds were owned by Bank Markazi ("Markazi"), Iran's central bank, and held by Clearstream Banking, S.A. ("Clearstream"), a Luxembourg bank, as cash in its correspondent account at JPMorgan Chase Bank, N.A. ("JPMorgan") in New York City.

Following oral argument, the district court declined to hold an evidentiary hearing on the dispute and found sufficient record evidence that the assets at issue were not held as cash in the United States but were recorded as a right to payment in Luxembourg. As a result of this finding, the district court dismissed JPMorgan from the lawsuit. Noting that the location of a plaintiffs' right to payment is determined by state law - in this case, New York law - the district court further found that the situs of this intangible property interest was Luxemberg, the location of the party, Clearstream, of whom performance would be required by the terms of the contract. As a result, the district court held that it lacked jurisdiction to order turnover because the asset at issue was recorded and held outside of the United States in Luxembourg, and thus was immune from execution under the FSIA.

On review as to the initial dismissing JPMorgan, the Second Circuit agreed, finding no abuse of discretion. As to whether jurisdiction existed over the right to payment located in Luxemberg, however, the Second Circuit found the district court's assumption to be reasonable but incorrect, concluding that a court sitting in New York may have authority to execute against property in another country if it has personal jurisdiction over a particular defendant. The Second Circuit reasoned that the FSIA's jurisdictional immunity applies only to a foreign state, which Clearstream is not, and the Act's grant of execution immunity seems to apply only to assets located in the United States, which the Luxembourg right to payment is not. Although the Second Circuit maintained that the FSIA provides the exclusive basis for obtaining subject matter jurisdiction over a foreign state, it nevertheless concluded that United States Supreme Court and New York Court of Appeals precedent may authorize a court sitting in New York with personal jurisdiction over a non-sovereign third party to recall to New York extraterritorial assets owned by a foreign sovereign.

Accordingly, the Second Circuit remanded to the district court to determine whether it has personal jurisdiction over Clearstream and, if it determines it does, to then determine if a barrier exists to exercising personal jurisdiction to recall to New York State the right to payment held by Clearstream in Luxembourg. Ultimately, the Second Circuit reasoned that if the asset is recalled and produced in New York, it would qualify as an asset in the United States of a foreign state and would either be afforded execution immunity or would be subject to execution-immunity exceptions.

The full opinion can be found at http://www.ca2.uscourts.gov/de...23bcc2e822d/1/hilite/.

Significance: This opinion provides a possible basis for district courts to require non-sovereign third parties to recall extraterritorial assets owned by a foreign sovereign. At least one other sister circuit has suggested the contrary conclusion, that a foreign sovereign's extraterritorial assets remain absolutely immune from execution.

Panel: Circuit Judges Pooler, Sack and Lohier

Argument Date: 06/08/2016

Argument Location: New York, New York

Date of Issued Opinion:
11/22/2017

Docket Number:
No. 15-0690

Decided: Affirmed in part, Vacated in part, and Remanded.

Case Alert Author: Marina Stinely

Counsel: Liviu Vogel (James P. Bonner, Patrick L. Rocco, and Susan M. Davies, Stone Bonner & Rocco LLP, on the brief), Salon Marrow Dyckman Newman & Broudly LLP, New York, New York, for Plaintiffs-Appellants; Donald F. Luke (Bension D. DeFunis, on the brief), Jaffe & Asher LLP, New York, New York, for Defendant-Appellee Bank Markazi, AKA Central Bank of Iran; Ugo Colella (John J. Zefutie, Jr., on the brief), Thompson Hine LLP, New York, New York, for Defendant-Appellee Banca UBAE, S.p.A.; Benjamin S. Kaminetzky (Gerald M. Moody, Jr., on the brief), Davis Polk & Wardwell LLP, New York, New York, for Defendant-Appellee Clearstream Banking, S.A.; Steven B. Feigenbaum, Levi Lubarsky Feigenbaum & Weiss LLP, New York, New York, for Defendant-Appellee JPMorgan Chase Bank, N.A.

Author of Opinion: Judge Sack

Circuit: Second Circuit

Case Alert Circuit Supervisor:
Professor Elyse Diamond

Edited: 11/24/2017 at 09:24 AM by Elyse Diamond

    Posted By: Elyse Diamond @ 11/22/2017 09:59 AM     2nd Circuit     Comments (0)  

November 21, 2017
  United States v. Surratt -- Fourth Circuit
Closing the Judicial Door: Fourth Circuit Splits with Sister Circuits on Post-Commutation Sentencing Challenges

Areas of Law: Constitutional Law, Criminal Law

Issue Presented: Whether an individual who receives a commutation by the President of the United States can subsequently challenge his original sentence based on modifications to the sentencing guidelines that were passed after his commutation was granted.

Brief Summary:
In a published opinion, the United States Court of Appeals for the Fourth Circuit held that sentencing challenges to an original sentence are moot if they are registered after a presidential commutation. The Fourth Circuit determined that the commutation power belongs solely to the Executive branch of government and that once the President commuted Raymond Surrat's original sentence of life imprisonment to 200 months, the litigation process reached finality. The Fourth Circuit also stated that further appeals to reduce the sentence to match the guidelines reflected in the Fair Sentencing Act of 2010 were outside the scope of their power as a co-ordinate branch of government and the Fourth Circuit respects the separation of powers.

Extended Summary: In 2005, Raymond Surrat pled guilty to conspiracy to possess with intent to distribute more than 50 grams but less than 150 grams of crack cocaine in violation of the Controlled Substances Act, 21 U.S.C. §§ 841(b)(1). Surratt already had three prior drug convictions and two of those convictions constituted "felony drug offenses." Therefore, Surratt's sentence automatically upgraded to a mandatory minimum of life imprisonment without release. Surratt's sentence accurately reflected the then-applicable 100-to-1 powder-to-crack ratio that punished distributors of crack cocaine much more harshly than distributors of powder cocaine.

In 2010, Congress passed the Fair Sentencing Act (the Act), which reduced the ratio from 100-to-1 to 18-to-1. Congress noted that the previous ratio disproportionately punished racial minorities (Surratt is a man of color). The Act applies retroactively so Surratt could appeal his original sentence which was imposed before the Act took effect. Surratt filed successive habeas petitions seeking relief. The district court denied Surratt's 2012 petition. His second petition, however, sat in the court for years without action.

In 2017, President Obama commuted Surratt's life sentence down to 200 months. The only condition attached to Surratt's commutation involved admittance to a Residential Drug Abuse Program (RDAP). Surratt agreed and shortly after, the Fourth Circuit asked both the government and Surratt's attorneys to address whether the President's commutation mooted Surratt's pending challenge to his original sentence. The Fourth Circuit determined that Surratt's appeal was moot.

The Fourth Circuit noted that it was without power to intervene in a lawful decision by a co-ordinate branch of government. By agreeing to the President's directive, the Fourth Circuit found that Surrat now serves a presidentially-commuted sentence and not a judicially-imposed one. Because Surratt agreed to serve a reduced sentence that the executive branch deemed fitting, the Fourth Circuit held that further challenges to his original sentence are no longer within the purview of the courts. The only way the courts could readjust the commuted sentence would be if a constitutional infirmity existed in the commutation order. Since there existed no such infirmity in President Obama's commutation, Surratt could not compel the Fourth Circuit to reconsider the propriety of his original sentence. Other circuits have reassessed sentencing lengths following a presidential commutation. Indeed, Judge Wynn, citing cases from the First, Seventh, and Ninth Circuits, noted exactly this point in dissent. Nonetheless, the Fourth Circuit decided that the President's commutation should represent the finality of litigation and that separation of powers rendered Surratt's (and future appellants) challenges moot.

To read the full opinion click here

Panel: Judges Wilkinson, Motz, Wynn

Argument Date:
03/23/2016

Date of Issued Opinion: 04/21/2017

Docket Number: No. 14-6851

Decided:
Decided by published opinion.

Case Alert Author: Saikrishna Srikanth, Univ. of Maryland Carey School of Law

Counsel:
Ann Loraine Hester, FEDERAL DEFENDERS OF WESTERN NORTH CAROLINA, INC., Charlotte, North Carolina, for Appellant. Michael R. Dreeben, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. Steven Harris Goldblatt, GEORGETOWN UNIVERSITY LAW CENTER, Washington, D.C., as Court-Assigned Amicus Counsel. Erika L. Maley, SIDLEY AUSTIN LLP, Washington, D.C., for Amici Curiae. ON BRIEF: Ross Hall Richardson, Executive Director, Charlotte, North Carolina, Joshua B. Carpenter, FEDERAL DEFENDERS OF WESTERN NORTH CAROLINA, INC., Asheville, North Carolina, for Appellant. Scott A.C. Meisler, Assistant to the Solicitor General, Nina Goodman, Lena Hughes, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Anne M. Tompkins, United States Attorney, Jill Westmoreland Rose, United States Attorney, Charlotte, North Carolina, Amy E. Ray, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Asheville, North Carolina, for Appellee. Ruthanne M. Deutsch, Shon Hopwood, Supervising Attorneys, Utsav Gupta, William Hornbeck, Meredith Wood, Ryan W. Cooke, Courtney A. Elgart, Elizabeth Sebesky, Student Counsel, Appellate Litigation Program, GEORGETOWN UNIVERSITY LAW CENTER, Washington, D.C., for Court-Assigned Amicus Counsel. Douglas A. Berman, Professor of Law, THE OHIO STATE UNIVERSITY, Columbus, Ohio; Jeffrey T. Green, Kimberly A. Leaman, SIDLEY AUSTIN LLP, Washington, D.C., for Amici Curiae.

Author of Opinion: Order; Judge Wilkinson, Concurring; Judge Motz, Concurring

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/21/2017 04:06 PM     4th Circuit     Comments (0)  

  United States Equal Employment Opportunity Commission v. Consol Energy, Inc. -- Fourth Circuit
Butcher and the Beast: Fourth Circuit Upholds Religious Accommodation Ruling for Man Who Fears Hand-Scanners

Areas of Law: Labor & Employment Law

Issue Presented: Whether Consol Energy was required under Title VII to provide a religious accommodation for a man's religious belief that the use of a hand-scanner would imprint him with "the Mark of the Beast" when special accommodations were made for other employees with hand injuries?

Brief Summary:
Beverly Butcher, Jr. informed his employer, Consol's Robinson Run Mine in West Virginia, of his sincere religious objection to the use of biometric hand scanners. However, Consol Energy failed to make an accommodation for Butcher despite accommodating other employees for non-religious reasons. In a published opinion, the Fourth Circuit held that Butcher was entitled to protection under 42 U.S.C. §§ 2000e - 2000e-6 (2012) (Title VII), which makes it an unlawful employment practice "to discharge any individual...because of such individual's ... religion." The Fourth Circuit upheld the district court's finding, however, that Consol Energy did not owe Butcher punitive damages as there was no "malice or reckless indifference" towards Butcher.

Extended Summary: In 2012, Consol's Robinson Run Mine in West Virginia decided to implement biometric hand scanners to better track its employees' work hours. Mr. Butcher, an Evangelical Christian, had worked for the Robinson Run Mine since 1977 and had been a satisfactory employee during that time. Mr. Butcher objected to the use of hand scanners on religious grounds, as he feared he would be imprinted with the "Mark of the Beast" if he used the hand scanners. Mr. Butcher believed that those branded with "the Mark of the Beast" are identified as followers of the Antichrist, which allows the Antichrist to manipulate them.

Mr. Butcher raised this objection with his employers and provided them with a letter from his pastor attesting to his "deep dedication to the Lord Jesus Christ," as well as a letter he wrote explaining his belief in the Book of Revelation. The employer had a letter from the scanner's manufacturer offering assurances that the scanner cannot place a mark on the body of a person. The letter also explained that "the Mark of the Beast" is only placed on the right hand or forehead and Mr. Butcher could use his left hand to clock in instead. After deciding that this accommodation was unsatisfactory and after being told that failure to participate would result in his termination, Mr. Butcher felt that he had no option but to tender his resignation and take early retirement. Unbeknownst to Mr. Butcher, Consol made accommodations for people with hand injuries to enter a personnel number into a keypad attached to the system.

After the United Mine Workers of America (UMWA) declined to negotiate his issue, because religious accommodations were not included in their collective bargaining agreement with Consol, the Equal Employment Opportunity Commission brought suit against Consol. A jury found for Mr. Butcher and awarded him $150,000 in compensatory damages. The district court found Mr. Butcher was owed $436,860.74 in front and back pay and lost benefits, and issued a permanent injunction against Consol to refrain from future violations of Title VII and provide management training on religious accommodations.

The Fourth Circuit heard several issues on appeal. First, the court upheld the Title VII decision, because Mr. Butcher had shown that (1) he had a bona fide religious belief that conflicts with an employment requirement, (2) he informed his employer, and (3) he was disciplined as a result. EEOC v. Firestone Fibers & Textiles Co., 515 F.3d 307, 312 (1977). Citing Employment Division, Department of Human Resources of Oregon v. Smith, 494 U.S. 872, 887 (1990), the Fourth Circuit reasoned the correctness or plausibility of Butcher's religious understanding was not at issue, so long as his understanding was a sincerely-held religious belief. Once the court discounted any suggestion that Mr. Butcher misunderstood the Book of Revelation, it found the case to be straightforward. Mr. Butcher had a religious belief and Consol Energy failed to reasonably accommodate that belief by failing to give him an accommodation that was given to other employees for non-religious reasons. Further, Consol's failure to provide accommodation made the work place intolerable for Mr. Butcher. See Green v. Brennan, 136 S. Ct. 1769 (2016). Consequently, the Fourth Circuit found that Butcher was constructively discharged.

The court also upheld the jury's award of compensatory damages, and the district court's award of lost wages. In the court's view, Mr. Butcher sought to mitigate his losses by searching for work, but was unsuccessful in part because of the "rural economic climate." Further, Mr. Butcher eventually accepted a lower-paying job, which the court viewed as evidence of mitigation. The court held that Mr. Butcher's pension could not be used to offset his damages since it was a collateral source of income, not used to indemnify or offset his losses.

The court finally upheld the district court's denial of punitive damages, and determination that evidence of the UMWA negotiations were not admissible at trial. As to the damages issue, the court found Consol Energy's efforts to provide some accommodation to Butcher evidenced a lack of malice or reckless disregard for Mr. Butcher's beliefs. As to the evidentiary issue, the court found the UMWA negotiations were irrelevant to the determination of failure to make reasonable accommodations.

To read the full opinion, click here.

Panel: Niemeyer, Traxler, and Harris, Circuit Judges

Argument Date: 12/07/16

Date of Issued Opinion: 06/12/17

Docket Number: 16-1230, 16-1406

Decided: Reversed in part, vacated in part, and remanded for further proceedings by published opinion.

Case Alert Author: Jennifer Smith, Univ. of Maryland Carey School of Law

Counsel:
ARGUED: Jeffrey Alan Holmstrand, GROVE, HOLMSTRAND & DELK, PLLC, Wheeling, West Virginia, for Appellants/Cross-Appellees. Philip Matthew Kovnat, U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Washington, D.C., for Appellee/Cross-Appellant. ON BRIEF: Jeffrey A. Grove, GROVE, HOLMSTRAND & DELK, PLLC, Wheeling, West Virginia, for Appellants/Cross-Appellees. P. David Lopez, General Counsel, Jennifer S. Goldstein, Associate General Counsel, Lorraine C. Davis, Assistant General Counsel, Elizabeth E. Theran, Office of General Counsel, U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Washington, D.C., for Appellee/Cross-Appellant.

Author of Opinion: Judge Harris

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/21/2017 04:00 PM     4th Circuit     Comments (0)  

  Borzilleri v. Mosby -- Fourth Circuit
Assistant State's Attorneys are Policymakers for First Amendment Purposes

Areas of Law: Constitutional

Issue Presented: Whether firing an assistant state's attorney for political disloyalty violated the assistant state's attorney's First Amendment rights to free association and speech.

Brief Summary: Four days after taking office as Baltimore City's State's Attorney, Marilyn Mosby fired Assistant State's Attorney Keri L. Borzilleri because Borzilleri had supported Mosby's opponent during the primary election. The Fourth Circuit held that an assistant state's attorney is a policymaking position, so firing Borzilleri for political disloyalty did not violate her First Amendment right to association. Also, given the government's interest in implementing its policies through its employees, firing Borzilleri for politically disloyal speech did not violate her First Amendment right to free speech. In conclusion, the Fourth Circuit affirmed the United States District Court for the District of Maryland's ruling to dismiss Borzilleri's claims.

Extended Summary: In January 2015, Marilyn Mosby took office as Baltimore City State's Attorney. Four days later, Mosby fired Keri L. Borzilleri, who had been an assistant state's attorney ("ASA") for nine years. During the primary election, Borzilleri supported Mosby's opponent, Gregg Bernstein. Borzilleri did not have an official role in Bernstein's campaign, and she did not contribute financially. However, Borzilleri put a Bernstein sign in front of her home and hosted a gathering with Bernstein supporters.

On December 9, 2015, Borzilleri sued Mosby in the United States District Court for the District of Maryland. Borzilleri alleged Mosby fired her for supporting a political rival, in violation of Borzilleri's First Amendment rights to free speech and association; Maryland Declaration of Rights freedoms of speech and association; and under Maryland tort law. Mosby moved to dismiss all claims for failure to state a claim. The District Court granted Mosby's motion. Borzilleri appealed to the United States Court of Appeals for the Fourth Circuit.

First, the Fourth Circuit considered whether the firing violated Borzilleri's First Amendment right to free association. Looking to Supreme Court precedent, the Fourth Circuit explained there is a narrow exception to the association right, which allows policymaking government officials to be fired for their political beliefs. Whether a position is a policymaking one is defined by whether party affiliation is required to effectively perform the job. Based on this guidance, the Fourth Circuit has developed a two-part test for determining if a position is a policymaking one for First Amendment purposes. First, it considers whether the position involves decision-making on issues with room for political disagreement. Second, it examines whether the position's responsibilities resemble policymaking. The Fourth Circuit concluded that Baltimore City Assistant State's Attorneys are policymakers. It explained that ASAs make decisions subject to political disagreement about how resources are allocated toward prosecuting and investigating crimes, and negotiate plea deals. Also, Maryland state's attorneys delegate duties to ASAs, so the state's attorney may assess their confidence in the ASAs carrying out policies and goals. Borzilleri specifically made independent decisions, and she communicated policies to constituents as a Community Prosecutor. Lastly, the court noted that its sister circuits have unanimously held an ASA is a policymaking position.

Next, the court analyzed whether the firing violated Borzilleri's right to free speech. The Fourth Circuit explained that analyzing a public employee's right to free speech requires balancing the employee's interest as a citizen and the community's interest in the employee's opinion, with the government's interest in serving the public through employees. If the first two interests outweigh the third, the speech is protected. The court went on to state that if the policymaking exception applies to an employee, this balancing test generally tips in favor of the government's interest. If an employer does not violate an employee's association right by firing the employee for political disloyalty, the employer does not violate the employee's free speech right by firing the employee for speech displaying political disloyalty. Based on this logic, the court affirmed the District Court's ruling.

To read the full opinion, click here.

Panel: Judges Wilkinson, Traxler, and Agee

Argument Date: 09/14/2017

Date of Issued Opinion: 10/17/2017

Docket Number:
No. 16-1751

Decided:
Affirmed by published opinion

Case Alert Author:
Ashley Fellona, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Stacey Kamya Grigsby, BOIES, SCHILLER & FLEXNER LLP, Washington, D.C., for Appellant. Patrick Browning Hughes, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Appellees. ON BRIEF: Ryan Y. Park, Washington, D.C., Nafees Syed, BOIES, SCHILLER & FLEXNER LLP, New York, New York, for Appellant. Brian E. Frosh, Attorney General of Maryland, Julia Doyle Bernhardt, Assistant Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Appellees.

Author of Opinion: Judge Wilkinson

Case Alert Supervisor:
Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/21/2017 03:53 PM     4th Circuit     Comments (0)  

  American Humanist Association v. Maryland-National Capital Park and Planning Commission -- Fourth Circuit
Size Matters: Court Declares 40-Foot World War I Cross Memorial Unconstitutional

Areas of Law:
Constitutional Law, First Amendment, Establishment Clause

Issue Presented: Whether a local government violates the Establishment Clause of the First Amendment when it displays and maintains a forty-foot tall Latin cross, which was established in memory of soldiers who died in World War I?

Brief Summary: The United States Court of Appeals for the Fourth Circuit, applying the three-pronged Lemon test, held that the monument had the "primary effect of endorsing religion and excessively entangle[d] the government in religion." In support of this, the court cited to the fact that the cross was at one of the busiest intersections in Prince George's County, Maryland, that its secular elements failed to outweigh its religious purposes, and that the government had spent thousands of dollars for its maintenance.

Extended Summary: In 1918, several Prince George's County residents began fundraising to construct a cross to memorialize 49 residents who died in World War I. In 1922, the original organizers ran out of money and so the Snyder-Farmer Post of the American Legion took over the project. The monument was completed in 1925 and a Christian prayer service was held at the dedication ceremony. The court noted that veteran's memorial services, as well as Sunday worship services have been held at the cross.

The Maryland-National Capital Park and Planning Commission ("the Commission"), a state entity, acquired the cross in 1961 because of safety concerns regarding the cross' placement in the middle of a busy intersection. Since then, around $117,000 was spent maintaining the cross. In 2008, another $100,000 was set aside for renovation of the cross.

The cross itself is a forty-foot structure with the American Legion's symbol located near the top and with an American flag nearby. Around the base of the cross are the words "valor", "endurance", "courage," and "devotion." A plaque which contains the names of the individuals who died and a quote from Woodrow Wilson is on the base of the cross but is obscured by bushes. The cross stands alone in a median at the busy intersection of Maryland Route 450 (formerly known as the National Defense Highway) and U.S. Route 1, but is part of a memorial park honoring veterans in the area.

Appellants Steven Lowe, Fred Edwords, and Bishop McNeill, all non-Christian citizens of Prince George's County brought suit under 42 U.S.C. § 1983 against the Commission for violation of the Establishment Clause, arguing that the Cross amounted to government affiliation with Christianity. The American Humanist Association sued on behalf of its members. The Fourth Circuit found the appellants had standing, since anyone who has "unwelcome direct contact with a religious display that appears to be endorsed by the state" has a sufficient injury. Suhre v. Haywood Cty., 131 F.3d 1083, 1086 (4th Cir. 1997).

The district court analyzed the claim using the Lemon test, derived from Lemon v. Kurtzman, 403 U.S. 602 (1971). It found the Park Commission had legitimate secular purposes of maintaining a highway median and commemorating veterans. Further it found the cross did not advance or inhibit religion because people use the memorial for veteran events, the cross is a commemorative symbol of World War I, there are secular war memorials around it, and the secular attributes of the cross, such as the American Legion symbol, made it clear it was not a religious symbol.

On review, the Fourth Circuit also applied the Lemon test to determine whether the cross violates the Establishment Clause's guarantee that government will "make no law respecting an establishment of religion." U.S. Const. amend. I. Under the Lemon test, a memorial (1) must have a secular purpose, (2) must not have a "principal or primary effect" that advances, inhibits or endorses religion, and (3) may not foster an "excessive entanglement between government and religion." The court held that while Breyer's concurrence in Van Orden v. Perry, 545 U.S. 677 (2005), provides guidance for the "passive" monument context, it does not overrule Lemon. Thus, while things such as the circumstances surrounding the monument's placement, the physical setting of the monument, and the length of time the monument went unchallenged may be considered, the ultimate test is the Lemon test.

As to the first prong of the Lemon test, the court held that the maintenance of highway safety and the preservation of a significant war memorial satisfied the secular purpose. In determining the second prong, the court found that the Latin cross is "exclusively a Christian symbol" and the fact that other countries have used it to memorialize World War I does not outweigh its religious significance. While this cross had a semi-secular history, the Fourth Circuit held that the sectarian elements of the cross overwhelmed the secular ones, and the immense size and prominence evoked a message of universal religion. The court focused on what a reasonable observer, who is aware of the history and context of the community and forum, would believe the cross stood for. Given the history, the court found that a reasonable observer "could not help but note that the Cross is the most prominent monument in the Park and the only one displaying a religious symbol." Finally, as to the third prong, the court found that given the spending of government funds on the cross and the size of the monument, ownership constituted excessive entanglement with religion.

The court noted that the Commission's and supporting amici's concerns, which equated this cross with the crosses in Arlington National Cemetery and other locations, were misplaced. Because Establishment Clause cases are fact intensive, the court made clear it was not making a decision as to those crosses. Further, the court noted that the Arlington crosses are much smaller and contain diverse religious symbols.

In his dissent, Chief Judge Gregory focused on the purpose of the Establishment Clause, stating that neutrality is a "touchstone" of the Establishment Clause. This neutrality should not be viewed as a devotion to the secular or as a hostility to the religious. Abingdon School Dist. v. Schempp, 374 U.S. 203, 306 (Goldberg, J. concurring). Judge Gregory focused on the patriotic nature of the American Legion and the fact that only three religious services were held at the cross, all in 1931. Judge Gregory felt the majority constructed a reasonable observer who would ignore certain elements of the memorial and reach unreasonable conclusions. He also took issue with what he viewed as the majority's focus on size, stating that no guiding principle could be gleaned from its discussion. Judge Gregory reasoned that given the context of the cross, it did not constitute an endorsement of religion or excessive entanglement.

To read the full opinion, click here.

Panel: Gregory, Chief Judge, and Wynn and Thacker, Circuit Judges

Argument Date: 12/7/16

Date of Issued Opinion: 10/18/17

Docket Number: 15-2597

Decided: Reversed and remanded by published opinion. Chief Judge Gregory concurring in part and dissenting in party.

Case Alert Author:
Jennifer Smith, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Monica Lynn Miller, AMERICAN HUMANIST ASSOCIATION, Washington, D.C., for Appellants. Christopher John DiPompeo, JONES DAY, Washington, D.C.; William Charles Dickerson, MARYLAND-NATIONAL CAPITAL PARK AND PLANNING COMMISSION, Riverdale, Maryland, for Appellees. ON BRIEF: David A. Niose, AMERICAN HUMANIST ASSOCIATION, Washington, D.C.; Daniel P. Doty, LAW OFFICE OF DANIEL P. DOTY, P.A., Baltimore, Maryland, for Appellants. Adrian R. Gardner, Tracey A. Harvin, Elizabeth L. Adams, MARYLAND-NATIONAL CAPITAL PARK AND PLANNING COMMISSION, Riverdale, Maryland, for Appellee Maryland-National Capital Park and Planning Commission; Noel J. Francisco, JONES DAY, Washington, D.C.; Roger L. Byron, Kenneth A. Klukowski, FIRST LIBERTY, Plano, Texas, for Appellees The American Legion, The American Legion Department of Maryland, and The American Legion Colmar Manor Post 131. Patrick C. Elliott, FREEDOM FROM RELIGION FOUNDATION, Madison, Wisconsin, for Amici Freedom From Religion Foundation and Center For Inquiry. Eric C. Rassbach, THE BECKET FUND FOR RELIGIOUS LIBERTY, Washington, D.C.; Paul J. Zidlicky, SIDLEY AUSTIN LLP, Washington, D.C., for Amicus The Becket Fund for Religious Liberty. Charles J. Cooper, David H. Thompson, Howard C. Nielson, Jr., Haley N. Proctor, COOPER & KIRK, PLLC, Washington, D.C., for Amici Senator Joe Manchin and Representatives Doug Collins, Vicky Hartzler, Jody Hice, Evan Jenkins, Jim Jordan, Mark Meadows, and Alex Mooney. Patrick Morrisey, Attorney General, Elbert Lin, Solicitor General, Julie Marie Blake, Assistant Attorney General, OFFICE OF THE ATTORNEY GENERAL OF WEST VIRGINIA, Charleston, West Virginia, for Amicus State of West Virginia; Steve 3 Marshall, Attorney General of Alabama, Montgomery, Alabama, for Amicus State of Alabama; Mark Brnovich, Attorney General of Arizona, Phoenix, Arizona, for Amicus State of Arizona; Leslie Rutledge, Attorney General of Arkansas, Little Rock, Arkansas, for Amicus State of Arkansas; Pamela Jo Bondi, Attorney General of Florida, Tallahassee, Florida, for Amicus State of Florida; Christopher M. Carr, Attorney General of Georgia, Atlanta, Georgia, for Amicus State of Georgia; Douglas S. Chin, Attorney General of Hawaii, Honolulu, Hawaii, for Amicus State of Hawaii; Lawrence G. Wasden, Attorney General of Idaho, Boise, Idaho, for Amicus State of Idaho; Curtis Hill, Attorney General of Indiana, Indianapolis, Indiana, for Amicus State of Indiana; Derek Schmidt, Attorney General of Kansas, Topeka, Kansas, for Amicus State of Kansas; Andy Beshear, Attorney General of Kentucky, Frankfort, Kentucky, for Amicus State of Kentucky; Jeff Landry, 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; Timothy C. Fox, Attorney General of Montana, Helena, Montana, for Amicus State of Montana; Adam Paul Laxalt, Attorney General of Nevada, Carson City, Nevada, for Amicus State of Nevada; Wayne Stenehjem, Attorney General of North Dakota, Bismarck, North Dakota, for Amicus State of North Dakota; Michael DeWine, Attorney General of Ohio, Columbus, Ohio, for Amicus State of Ohio; E. Scott Pruitt, Attorney General of Oklahoma, Oklahoma City, Oklahoma, for Amicus State of Oklahoma; Peter F. Kilmartin, Attorney General of Rhode Island, Providence, Rhode Island, for Amicus State of Rhode Island; Alan Wilson, Attorney General of South Carolina, Columbia, South Carolina, for Amicus State of South Carolina; Marty J. Jackley, Attorney General of South Dakota, Pierre, South Dakota, for Amicus State of South Dakota; Ken Paxton, Attorney General of Texas, Austin, Texas, for Amicus State of Texas; Sean D. Reyes, Attorney General of Utah, Salt Lake City, Utah, for Amicus State of Utah; Mark R. Herring, Attorney General of Virginia, Richmond, Virginia, for Amicus Commonwealth of Virginia; Brad D. Schimel, Attorney General of Wisconsin, Madison, Wisconsin, for Amicus State of Wisconsin.

Author of Opinion: Judge Thacker

Case Alert Supervisor:
Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/21/2017 03:43 PM     4th Circuit     Comments (0)  

  Lucero v. Early -- Fourth Circuit
The Greatest Case on Earth: Lower Court Must Reconsider Circus Protestor's First Amendment Claim

Areas of Law: Constitutional Law

Issue Presented: Whether the district court erred in holding that recent precedent commanded dismissal of a circus protestor's First Amendment claim.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held that the district court improperly dismissed the case without considering whether the city's protesting protocol was targeted specifically to restrict animal-rights protests.

Extended Summary: Throughout its 146 years in operation, the Ringling Brothers Circus made many stops at Baltimore's Royal Farms Arena. But, the circus' treatment of animals brought many protestors out. In 2004, the Baltimore City Law Department drafted a protocol, setting out rules for where protestors could stand. The Law Department's internal emails referred to "Circus Protestors" rather than all protestors generally. In addition to laying out the prohibited protest areas, the protocol warned individuals that they would be arrested after disobeying two verbal warnings from police officers.

Before one of the circus' performances in April 2010, Kenneth Lucero handed out anti-circus leaflets to passersby. Lucero disregarded the protocol because he believed it relegated him to a low-traffic area. Officer Wayne Early asked Lucero twice to adhere to the protocol and move his protest activity to one of the permitted areas, but Lucero refused. Lucero was then arrested, but was not formally charged. Shortly thereafter, Lucero brought a 42 U.S.C. § 1983 claim against the police department, the mayor, and Early in the U.S. District Court for the District of Maryland. Lucero alleged that the protocol violated the First Amendment, because it hindered his ability to hand out leaflets and spread his message. The district court dismissed the case pursuant to the Fourth Circuit's recent decision in Ross v. Early, 746 F.3d 546 (4th Cir. 2014), a case with nearly identical facts involving the same arresting police officer.

The Fourth Circuit held that the district court erred in dismissing Lucero's case because it failed to analyze whether the City protocol was content-neutral. The case was remanded for the court to determine if the protocol was targeted at animal-rights protestors, or generally aimed at all protestors regardless of their message.

The court first laid out the differing types of judicial review that govern claims brought under the First Amendment. Strict scrutiny (sometimes referred to as "heightened scrutiny") controls content-based procedures, where a protocol restricts specific types of activity, such as protestors handing out animal-rights leaflets. It is nearly impossible for a protocol to pass muster under strict scrutiny review. In contrast, intermediate scrutiny governs content-neutral regulations. A rule is content-neutral if it regulates all protestors, without reference to the particular issue they are protesting. Early contended the protocol at issue in the instant case was content-neutral.

In analyzing the merits of the appeal, the court distinguished the case from Ross, where the parties agreed to a stipulation, stating "that the Protocol was 'generally applicable toward all expressive activity' and 'not targeted toward restricting activities of circus and animal welfare street protestors specifically.'" Because the court in Ross never actually decided whether the protocol was content-neutral and since the parties in the instant case had not agreed to a similar stipulation, the Ross decision was not controlling.

The court stated that on remand, the district court should consider two recent Supreme Court decisions in determining whether the protocol was content-neutral: McCullen v. Coakley, 134 S. Ct. 2518 (2014) and Reed v. Town of Gilbert, 135 S. Ct. 2218 (2015). Specifically, the Court in Reed held that a law or protocol is content-based if, "on its face [it] draws distinctions based on the message a speaker conveys." Reed's implication was that the circus protocol could be content-based even if it was not specifically designed to impede individuals protesting animal-rights. Based on these two cases, the Fourth Circuit instructed the district court to analyze facts such as whether officers were required to examine the content of the leaflets before enforcing the protocol, and also the reasoning behind the initial development of the protocol.

To read the full opinion, click here.

Panel: Judges Thacker, Harris, and Moon sitting by designation.

Argument Date: 09/12/2017

Date of Issued Opinion: 10/13/2017

Docket Number: No. 16-1767

Decided: Decided by published opinion.

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

Counsel: ARGUED: Sean Robert Day, LAW OFFICE OF SEAN R. DAY, Greenbelt, Maryland, for Appellant. Steven John Potter, BALTIMORE CITY DEPARTMENT OF LAW, Baltimore, Maryland, for Appellees. ON BRIEF: David E. Ralph, City Solicitor, Glenn T. Marrow, Chief Solicitor, Kara Lynch, Assistant City Solicitor, Ashley McFarland, Assistant City Solicitor, BALTIMORE CITY DEPARTMENT OF LAW, Baltimore, 2 Maryland, for Appellees.

Author of Opinion: Judge Thacker

Case Alert Supervisor:
Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/21/2017 03:25 PM     4th Circuit     Comments (0)  

  United States v. Diaz -- Fourth Circuit
"Crime of Violence" Must be a Violent Crime to Trigger Mandatory Restitution

Areas of Law: Statutory Interpretation, Criminal Law

Issue Presented: Whether the Mandatory Victims Restitution Act ("MVRA"), 18 U.S.C. § 3663A, is disjunctive, such that satisfying one of the two requirements under the MVRA would bring an offense that presumptively falls under the Victim and Witness Protection Act ("VWPA"), 18 U.S.C. § 3663, instead within the scope of the MVRA.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held that the district court erred in interpreting the MVRA as disjunctive. The Fourth Circuit determined that because interference with flight crew members and attendants is not a "crime of violence" under 18 U.S.C. § 16, the more lenient provisions of the VWPA apply, and restitution is discretionary.

Extended Summary: The MVRA and the VWPA govern restitution for federal criminal offenses. Under the VWPA, the district court has discretion in imposing restitution. 18 U.S.C. § 3663(a)(1)(A). The VWPA applies when sentencing a defendant convicted of an offense under section 49 U.S.C. § 46504, unless the offense falls under section 3663A(c) of the MVRA. In contrast, the MVRA requires mandatory restitution. The MVRA applies when a defendant is convicted of any offense "(A) that is (i) a crime of violence, as defined in section 16 [of title 18] . . . and (B) in which an identifiable victim or victims has suffered a physical injury or pecuniary loss." 18 U.S.C. § 3663A(c)(1).

Appellant David Diaz rushed the cockpit of a flight shortly after takeoff. Diaz was convicted under 49 U.S.C. § 46504 of interference with flight crew members and attendants. The government argued that this offense fell within the scope of the MVRA, and that therefore, Diaz was required to pay the full amount of restitution. Additionally, the government argued that the court did not need to reach the question of whether this offense was a "crime of violence" because the MVRA applies to any offense in which an identifiable victim has suffered a pecuniary loss. Diaz argued that his offense instead fell within the scope of the VWPA and that the district court had discretion in determining whether to impose restitution. The district court agreed with the government and ordered Diaz to pay the full amount of restitution. The Fourth Circuit held that the district court erred in interpreting the MVRA as disjunctive.

On appeal, the Fourth Circuit first clarified that "the MVRA may apply in determining restitution for a defendant who interferes with a flight crew in violation of 49 U.S.C. § 46504, but only if it is determined that flight crew interference falls within the scope of 18 U.S.C. § 3663A(c)." 18 U.S.C. § 3663A(c)(1) provides in relevant part: "This section shall apply in all sentencing proceedings for convictions of . . . any offense that is a crime of violence . . . as defined in section 16 . . . and in which an identifiable victim or victims has suffered a physical injury or pecuniary loss."

The Fourth Circuit analyzed the relevant statutory provisions. First, the court determined that the statute should be interpreted as conjunctive, meaning that for an offense to fall within the MVRA, the offense must satisfy § 3663A(c)(1)(A), that the offense is a crime of violence, and also § 3663A(c)(1)(B), that the offense has an identifiable victim who suffered physical injury or a pecuniary loss. While the Fourth Circuit had not previously addressed this issue, in the instant case it adopted the conclusion of the D.C. Circuit, that the MVRA is conjunctive, not disjunctive.

Next, the Fourth Circuit determined that violation of 49 U.S.C. § 46504 is not a crime of violence, and therefore cannot satisfy 18 U.S.C. § 3663A(c)(1)(A). The court explained that an offense is a crime of violence under the MVRA if it is: "(a) an offense that has as an element the use, attempted use, or threatened use of physical force against the person or property of another, or (b) any other offense that is a felony and that, by its nature, involves a substantial risk that physical force against the person or property of another may be used in the course of committing the offense." The Supreme Court has previously interpreted "physical force" under 18 U.S.C. § 16(a) to mean "violent force." Johnson v. United States, 559 U.S. 133, 140 (2010). Employing a categorical approach that looked to the statutory definitions and elements and not to the specific facts, the Fourth Circuit determined that the term "assault," as used in the flight crew interference offense, required only "a forcible touching." There was no evidence it needed to rise to the level of "violent force" contemplated by the Supreme Court in Johnson. Therefore, the court found that flight crew interference, under 49 U.S.C. § 46504, is not a crime of violence under 18 U.S.C. § 16(a), and that the VWPA, instead of the MVRA, should have been applied to determine restitution. Accordingly, the Fourth Circuit vacated the order of restitution and remanded for redetermination of the issue of restitution.

To read the full opinion, click here.

Panel: Judges Floyd and Harris, and District Judge Bailey

Argument Date: 03/24/2017

Date of Issued Opinion: 07/26/2017

Docket Number: 16-4226

Decided: Vacated and remanded by published opinion.

Case Alert Author: Taylor McAuliffe, Univ. of Maryland Carey School of Law

Counsel:
Patrick L. Bryant, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Alexandria, Virginia, for Appellant. Jon Tyler McGaughey, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee. ON BRIEF: Geremy C. Kamens, Federal Public Defender, Brooke S. Rupert, Assistant Federal Public Defender, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Alexandria, Virginia, for Appellant. Dana J. Boente, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee.

Author of Opinion: Judge Floyd

Case Alert Supervisor:
Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/21/2017 02:50 PM     4th Circuit     Comments (0)  

  DiBiase v. SPX Corp. -- Fourth Circuit
Court Affirms Status Quo for Healthcare Benefits Case

Areas of Law: Employee Benefits Law

Issues Presented: (1) Whether the motion for preliminary injunction was moot. (2) Whether the district court abused its discretion in denying the Plaintiffs' motion for a preliminary injunction?

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held that the motion for preliminary injunction was not moot; but concluded further that the district court did not abuse its discretion in denying the motion since the Plaintiffs failed to meet the requirements for a preliminary injunction.

Extended Summary: In November 2014, the individual plaintiffs, retirees of SPX Corporation ("SPX"), their spouses and eligible dependents, and their labor union, the International Union United Automobile, Aerospace and Agricultural Implement Workers of America, UAW ("UAW"), (collectively, "Plaintiffs"), filed a class action law suit against SPX. They alleged that the healthcare reimbursement account ("HRA") accounts offered by SPX were not "substantially equivalent" to their current healthcare benefits, and that the implementation of SPX's new arrangement would breach two court-approved settlement agreements in violation of Section 301 of the Labor-Management Relations Act ("LMRA"), 29 U.S.C. § 185, and Section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B).

The settlement agreements between the Plaintiffs and SPX required SPX to provide lifetime healthcare coverage to identified retirees and their eligible family members through (a) specified group health insurance plans, or (b) through "coverage which is substantially equivalent in benefits." The Plaintiffs signed this agreement in 2003, and SPX provided them with insurance coverage for the retirees and their family members through various group health plans between 2004 and 2015. However, in mid-2014, SPX announced to UAW representatives and Medicare-eligible retirees its plan to terminate and replace the original arrangement effective January 1, 2015. The new arrangement would provide each beneficiary an HRA containing up to $5,000 for beneficiaries to purchase their own healthcare plan from an insurance exchange secured and identified by SPX, as well as the means to cover other expenditures.

Subsequently, the Plaintiffs filed a class action suit against SPX alleging a violation of the settlement agreements because the healthcare reimbursement account ("HRA") accounts offered by SPX were not "substantially equivalent" to their current healthcare benefits. Additionally, on December 15, 2014, the Plaintiffs moved for a preliminary injunction to enjoin SPX from terminating their current SPX plan provided under the settlement agreements and from implementing the HRA accounts during the pendency of the action or until the court ordered it. On September 29, 2015, the district court denied the Plaintiffs' motion, concluding that the issue was moot since the HRAs had already gone into effect. The court also held that Plaintiffs failed to meet the four standards required to grant a preliminary injunction.

On review, the Fourth Circuit held that the motion for preliminary injunction was not moot. However, the Fourth Circuit affirmed the district court's denial of the motion because the Plaintiffs failed to meet the requirements for a preliminary injunction.

The court first analyzed the issue of mootness. The court stated that the primary function of a preliminary injunction is to maintain the status quo and that a request for an injunction to prohibit an act is moot if the act already happened. However, relying on Pashby v. Delia, 709 F.3d 307, 319 (4th Cir. 2013) and Aggarao v. MOL Ship Mgmt. Co., 675 F.3d 355, 378 (4th Cir. 2012), the court found that the motion for preliminary injunction was not moot because the Plaintiffs filed the motion before the policy change occurred, and subsequently intended to restore the status quo.

Nevertheless, the Fourth Circuit found that the Plaintiffs failed to establish the four criteria necessary to grant a preliminary injunction. In order to succeed, the Plaintiffs needed to prove that (1) they were likely to succeed on the merits of the underlying healthcare coverage dispute; (2) they were likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tipped in their favor; and (4) an injunction was in the public interest. Among other things, the court found the Plaintiffs failed to make a case that would demonstrate the likelihood of success on the merits. Therefore, the Fourth Circuit affirmed the district court's denial of the motion for preliminary injunction and remanded for further proceedings.

To read the full opinion, click here.


Panel: Chief Judge Gregory, and Circuit Judges King and Keenan

Argument Date: 05/09/2017

Date of Issued Opinion: 09/28/2017

Docket Number: 15-2340

Decided: Affirmed and remand for further proceedings by published opinion.

Case Alert Author: Nneka Adibe, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Narendra K. Ghosh, PATTERSON HARKAVY LLP, Chapel Hill, North Carolina, for Appellants. Mark A. Hiller, ROBINSON, BRADSHAW & HINSON, P.A., Charlotte, North Carolina, for Appellee. ON BRIEF: Michael L. Fayette, PINSKY, SMITH, FAYETTE & KENNEDY, LLP, Grand Rapids, Michigan, for Appellants. David C. Wright, III, Cary B. Davis, Amanda R. Pickens, ROBINSON, BRADSHAW & HINSON, P.A., Charlotte, North Carolina, for Appellee.

Author of Opinion:
Chief Judge Gregory

Case Alert Supervisor:
Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/21/2017 02:43 PM     4th Circuit     Comments (0)  

  Fawzy v. Wauquiez Boats -- Fourth Circuit
Amended Complaint Sinks Appeal in Maritime Law Dispute

Areas of Law: Civil Procedure

Issue Presented: Whether the district court's order dismissing Fawzy's original complaint was a final decision where Fawzy amended his complaint one hour before the court issued its order.

Brief Summary: Fawzy filed suit against the boat dealer that sold him a million-dollar yacht. Without specifically notifying the judge assigned to the case, Fawzy then filed an amended complaint with the clerk's office. An hour after the amended complaint was filed the district court, unaware of the amendment, dismissed Fawzy's original complaint. Fawzy appealed this dismissal. The Fourth Circuit held that because the district court never issued a final decision on the amended complaint, the Fourth Circuit lacked appellate jurisdiction.

Extended Summary: In 2011, Dr. Amr Fawzy bought a $1.13 million boat from Wauquiez Boats in France. While sailing home across the Atlantic, Fawzy began to experience difficulties operating the vessel, including problems with the main sail and foresail. Fawzy experienced these problems for several years despite his efforts to have Wauquiez Boats resolve them.

On October 6, 2016, Fawzy filed a complaint in the United States District Court for the District of Maryland, alleging a breach of maritime contract and for products liability under general maritime law. Wauquiez Boats filed a motion to dismiss under Fed. R. Civ. P. 12(b)(1), claiming Fawzy lacked maritime jurisdiction. On October 12, 2016, the district court held a hearing on the motion to dismiss, and on October 14, the court dismissed the case and directed the clerk to "close the case."

Unbeknownst to the court, Fawzy amended his complaint pursuant to Fed. R. Civ. P. 15 one hour before the district court issued its order dismissing his original complaint. In the amended complaint, Fawzy added several new causes of action and eight paragraphs of new facts. Fawzy never alerted the court to this amended complaint, but he appealed the district court's order dismissing his original complaint.

The Fourth Circuit dismissed Fawzy's appeal because the court did not have appellate jurisdiction under 28 U.S.C. § 1291. The court first considered whether Fawzy had subject matter jurisdiction under § 1291, which confers appellate jurisdiction over all appeals from final decisions of United States district courts. To constitute a final decision, the decision must end the litigation on the merits and leave nothing for the court to do but execute the judgment. The Fourth Circuit explained that Fawzy's amended complaint superseded his original complaint and rendered it ineffective because it complied with Federal Rule of Civil Procedure 15. Thus, the district court ruled on a "moot" complaint and could not have issued a final decision since it never addressed the amended complaint. Because the district court never issued a final decision, the Fourth Circuit dismissed the case for lack of appellate jurisdiction.

To read the full opinion, click here.

Panel: Circuit Judges Niemeyer, King and Harris

Argument Date: 09/15/2017

Date of Issued Opinion: 10/12/2017

Docket Number: 16-2311

Decided: Dismissed by published opinion

Case Alert Author: Matthew Schofield, Univ. of Maryland Carey School of Law

Counsel: Alexander McKenzie Giles, SEMMES, BOWEN & SEMMES, Baltimore, Maryland, for Appellant/Cross-Appellee. C. Edward Hartman, III, HARTMAN & EGELI, LLP, Annapolis, Maryland, for Appellee/Cross-Appellant. ON BRIEF: Imran O. Shaukat, SEMMES, BOWEN & SEMMES, Baltimore, Maryland, for Appellant/Cross-Appellee. John R. Griffin, HARTMAN & EGELI, LLP, Annapolis, Maryland, for Appellee/Cross-Appellant.

Author of Opinion: Circuit Judge Niemeyer

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/21/2017 02:22 PM     4th Circuit     Comments (0)  

November 17, 2017
  Spay v. CVS Caremark Corporation - Third Circuit
Headline: Use of Dummy Prescriber IDs Found Immaterial in Claim against CVS Caremark Corporation for Violation of False Claims Act

Area of Law: Civil

Issue(s) Presented: (1) Did the District Court erroneously grant Defendant CVS Caremark Corporation's motion for summary judgment where the District Court relied on the government knowledge inference doctrine in dismissing Plaintiff's claim?

Brief Summary: From 2006 to 2007, Defendant CVS Caremark Corporation submitted approximately 4,500 Prescription Drug Event records to Centers for Medicare and Medicaid Services ("CMS") using dummy Prescriber IDs. Spay filed suit against Caremark, claiming that Caremark violated the False Claims Act ("FCA") by submitting false information to CMS. The District Court granted Caremark's motion for summary judgment, primarily relying on the "government knowledge inference" doctrine. The District Court found that CMS knew about the dummy IDs but paid them anyway. On appeal, the Third Circuit adopted the government knowledge inference doctrine that had been developed in other Circuits and applied a two-part test to determine whether the government knowledge inference doctrine was appropriate. The Third Circuit determined that under this test the government knowledge inference did not apply, but it affirmed the District Court's decision on other grounds. In reaching its decision, the Court addressed whether materiality was a required element for Spay's claim under the False Claims Act. Ultimately, the Court concluded that it was, and that Caremark's submission of dummy Prescriber IDs was not material to the government's decision to pay the claims substantiated by the PDE records. Therefore, despite the fact that the government knowledge inference doctrine did not apply, summary judgment in the Defendant's favor was proper.


Extended Summary:

Processing payment for claims made under Medicare Part D involves two steps: (1) the pharmacy claim, which the pharmacy submits to its Pharmacy Benefit Manager ("PBM"); and (2) the Prescription Drug Event ("PDE") record, which the Sponsor submits to Centers for Medicare and Medicaid Services ("CMS"), a governmental entity. Each year, Sponsors submit PDE records to CMS during a reconciliation process, seeking to recover the difference between the Sponsor's actual costs during the year and any amount it already received from CMS. Defendant CVS Caremark Corporation ("Caremark") was one of the largest PBMs in the United States from 2006 to 2007. During that time, Caremark submitted approximately 4,500 Prescription Drug Event records to CMS on behalf of its Sponsors. Spay filed suit against Caremark, claiming that Caremark violated the False Claims Act ("FCA") by submitting false information to CMS, which resulted in CMS paying the Sponsors more than they were actually entitled to receive.

Spay's main argument involved the submission of "dummy" Prescriber ID numbers. A Prescriber ID is a number issued to each individual with prescribing authority. If a PDE record was submitted without a Prescriber ID number, the electronic system CMS used to process payment would automatically reject the PDE, preventing payment to the dispensing pharmacy for the corresponding prescription. In an effort to reduce the number of legitimate claims that were bounced out due to the lack of a Prescriber ID, Caremark created a dummy Prescriber ID which it used to submit PDE records to CMS for payment. In total, Caremark generated about 4,500 PDE records using 56 different dummy Prescriber IDs. Spay filed his lawsuit against Caremark based on six issues, including the use of dummy Prescriber IDs. Spay claimed that Caremark used dummy IDs on a large number of its PDE record submissions, while falsely certifying the accuracy of the records.

The District Court granted Caremark's motion for summary judgment, primarily relying on the "government knowledge inference" doctrine. The "government knowledge inference" doctrine states, "when the government knows and approves of facts underlying an allegedly false claim prior to presentment, an inference arises that the claim was not knowingly submitted, regardless of whether the claim itself is actually false." The District Court found that (1) CMS knew about the dummy IDs; (2) paid all of the claims using dummy IDs anyway; and (3) never sought repayment from Caremark.

On appeal, the Third Circuit addressed the applicability of the government knowledge inference doctrine. Initially it held that the doctrine, which had been developed in other Circuits, should be followed in the Third Circuit as well. The Third Circuit stated that the doctrine is used to distinguish between the submission of false claims, and the knowing submission of false claims. In order to achieve that purpose, the Third Circuit applied a two-part test to determine whether the government knowledge inference doctrine was appropriate. The test requires that: "(1) the government agency knew about the alleged false statement(s); and (2) the defendant knew the government knew." Applying the test to the issue before it, the Third Circuit determined that the government knowledge inference did not apply on the record before it. Although there was sufficient evidence to suggest that CMS knew Caremark had submitted PDE records with dummy Prescriber IDs, there was insufficient evidence to suggest that Caremark knew that CMS was aware of the issue. "Our review of the record shows that there is no evidence of the kind of cooperation and collaborative problem-solving that exists in the easy case where the government knowledge inference is invoked."

The Court, however, went on to address whether materiality is a required element of the False Claims Act. While this case was on appeal, the Supreme Court decided Universal Health Services Inc. v. Escobar, which made materiality an element of a FCA violation. Spay argued that the holding applied only to the post-2009 version of the FCA, and that Caremark's conduct took place prior to the enactment of the 2009 amendments under consideration in Universal Health. The Third Circuit concluded that the pre-2009 version of the FCA contained a materiality requirement and applied it to the present case. Ultimately, the Court concluded that the submission of dummy Prescriber IDs was not material to the government's decision to pay the claims substantiated by the PDE records. According to the Third Circuit, the evidence suggested that CMS knew about the use of dummy IDs, but paid the PBMs anyway. "CMS was concerned with making sure that the medications were dispensed to Medicare recipients and that pharmacies were paid for those prescriptions. Had the payments stopped, the prescriptions would not have been dispensed, and the pharmaceutical needs of Medicare recipients would not have been addressed." The Court held that the dummy IDs were thus immaterial to the government's decision to pay, as they were merely "minor or insubstantial" misstatements used to prevent legitimate claims from being rejected by the CMS electronic processing system. Therefore, although the government knowledge inference doctrine did not apply to the facts of this case, summary judgment was proper.

The full opinion can be found at http://www2.ca3.uscourts.gov/opinarch/153548p.pdf

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

Argument Date: November 10, 2016

Date of Issued Opinion: November 16, 2017

Docket Number: No. 15-3548

Decided: Affirmed.

Case Alert Author: Stephen P. Dodd

Counsel: Ian P. Samson, Esquire, Marc S. Raspanti, Esquire, Counsel for Appellant; Enu Mainigi, Esquire, Joy P. Clairmont, Esquire, Jeffrey F. Keller, Esquire, Gordon Schnell, Esquire, Claire M. Sylvia, Esquire, Counsel for Appellee.

Author of Opinion:
Circuit Judge McKee

Circuit: Third Circuit

Case Alert Circuit Supervisor:
Prof. Mark Rahdert

    Posted By: Susan DeJarnatt @ 11/17/2017 05:39 PM     3rd Circuit     Comments (0)  

November 15, 2017
  Arias v. Gutman, Mintz, Baker & Sonnenfeldt LLP
Headline: Second Circuit Reinstates Suit Against Law Firm for Violating the Fair Debt Collection Practices Act

Area of Law: Civil Procedure - Enforcement of Judgment

Issue Presented: Whether Defendants committed abusive debt collection practices after filing an objection to Plaintiff's exemption claim even after Defendants had access to Plaintiff's bank account statements.

Brief Summary: Franklin Arias's bank account was restrained after a default judgment was entered against him for failing to pay rent on his apartment. Gutman, Mintz, Baker & Sonnenfeldt LPP ("GMBS") was the law firm to represent Arias's landlord and subsequently took on the role of debt collector. In an attempt to collect the default judgment, GMBS issued a restraining notice on Bank of America, where Arias had a checking account. Arias responded by claiming that all of the money in his account was Social Security Retirement Income (SSRI), which is exempt from restraint and garnishment under federal law. He repeatedly informed GMBS about this, and provided supporting documentation, but GMBS stated that his only recourse would be to go to court. In the subsequent court proceeding, Arias represented himself and presented the same documents that he had previously sent to GMBS, at which point GMBS agreed to release the funds. Arias then sued GMBS in the United States District Court for the Southern District of New York, alleging that GMBS's tactics had violated several laws, including the Fair Debt Collection Practices Act (FDCPA). The district court dismissed his lawsuit, but the Second Circuit held that his case could go forward.

Extended Summary: In 2006, Arias rented a Bronx apartment owned by 1700 Inc. During that same year, Arias moved out and allowed his daughter to take over the lease in his absence. Arias's daughter, however, missed two months of rent and soon after 1700 Inc. retained GMBS to sue Arias for breaching his lease. Because Arias failed to file an answer, GMBS obtained a default judgment against him.

In December 2014, 1700 Inc. attempted to collect on the default judgment through GMBS by issuing a notice on Bank of America, where Arias had his checking account. Bank of America then informed Arias that after receiving the notice of restraint, it determined that out of the $3,919.62 he had in his account, only $1,294.62 was subject to restraint and removal since the rest had been identified as protected Social Security retirement income (SSRI). That same month, Arias tried to explain to GMBS that in fact all of the money in his account was SSRI and was therefore exempt from restraint and garnishment under federal law. Arias also had Bank of America send GMBS his bank statements for the period February through December 2014, which showed that all of the deposits were exclusively SSRI. Even with these statements, GMBS replied that it would only release Arias's funds if he first made a payment. Arias then mailed GMBS an Exemption Claim Form.

The matter went to state court, where Arias represented himself and prevailed. A GMBS attorney reviewed the bank statements Arias had with him - the same ones he had sent GMBS before - and subsequently withdrew the objection and agreed to release the funds.

After the hearing, Arias filed suit in the Southern District of New York alleging that GMBS violated § 1692e and § 1692f of the FDCPA as well as a New York law known as the Exempt Income Protection Act (EIPA). The district court dismissed Arias's claims, and Arias timely appealed.

Under federal law, Social Security benefits are exempt from garnishment and restraint. New York also enacted the EIPA in 2008 to better protect exempt funds from forcible collection, by "remed[ying] an imbalance in the prior law which unfairly placed the burden on debtors to show that their funds were exempt, at a time when they were being deprived access to those funds." After beginning a restraint or garnishment process by filing a notice with the debtor's bank, a debtor may file an exemption claim form, as Arias did here. Regardless of whatever documents the debtor provides with this form form, the bank must release the funds eight days after receiving the claim unless the creditor files an objection in court during that same time. Should a creditor choose to file an objection, it must accompany it with an affirmation stating a reasonable belief that the debtor's account does not contain any exempt funds within it. A creditor, however, will be liable for the debtor's costs, reasonable attorney's fees, actual damages, and an amount not over $1,000, if he or she objects in bad faith.

The FDCPA is a strict liability statute and therefore does not require that a plaintiff to show that the debt collector acted intentionally. § 1692e of the FDCPA prohibits false, deceptive, or misleading representations and § 1692f prohibits unfair or unconscionable means used to collect a debt. When faced with a FCPA claim, a court must analyze the reasonableness of an interpretation from the outlook of the least sophisticated consumer. GMBS claimed that Arias's funds were not exempt since he commingled his funds with personal deposits. New York's EIPA, however, does not require a plaintiff to disprove commingling of his or her funds in order to have them be exempt from debt collection. Additionally, Arias's bank statements, which he had sent to GMBS twice before the hearing in State court, from February through December 2014 only show that the deposits made during that time were only SSRI. Because of this, GMBS violated both sections of the statute by: 1) falsely suggesting Arias's funds were no longer exempt because they were commingled with his personal funds; 2) having documentary proof Arias's funds were exempt but still refused to release them until he made a payment he could not afford; and 3) forcing him to attend an unnecessary court hearing. The Court subsequently held that a debt collector engages in unfair or unconscionable litigation conduction in violation of § 1692f when it in bad faith unduly prolongs legal proceedings or requires a consumer to appear at an unnecessary hearing. Lastly, because one may violate both the FDCPA and state law when it comes to abusive debt collection practices, a plaintiff like Arias may be able to collect remedies for both violations.

To read the full opinion, please visit: http://www.ca2.uscourts.gov/de...df7c9a4ae936/1/hilite/

Panel: Circuit Judges Cabranes and Lohier; District Judge Forrest

Argument Date: 4/27/2017

Argument Location: New York, NY

Date of Issued Opinion: 11/14/2017

Docket Number: No. 16-2165-cv

Decided: Vacated and Remanded

Case Alert Author: Ollia Pappas

Counsel: Claudia Wilner (Marc Cohan, National Center for Law and Economic Justice, New York, NY; Susan Shin, New Economy Project, New York, NY; Ahmad Keshavarz, Brooklyn, NY, on the brief); National Center for Law and Economic Justice, New York, NY for Plaintiff-Appellant; Kenneth A. Novikoff, Rivkin Radler LLP, Uniondale, NY for Defendants-Appellees.

Author of Opinion: Judge Lohier

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 11/15/2017 09:33 PM     2nd Circuit     Comments (0)  

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

Areas of Law: Constitutional Law; Civil Rights

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Argument Date: May 8, 2017

Date of Issued Opinion: September 19, 2017

Docket Number: 14-35970

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

Case Alert Author: Georgia Kefallinos

Counsel:

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

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

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

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

Areas of Law: Constitutional Law

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Argument Date: April 17, 2017

Date of Issued Opinion: September 19, 2017

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

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

Case Alert Author: Phuong Luong

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

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

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

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

Author of Opinion: Judge Sandra S. Ikuta

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Argument Date: March 9, 2017

Date of Issued Opinion: September 15, 2017

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

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

Case Alert Author: Luis F. Bustamante

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

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

Circuit: Ninth

Case Alert Supervisor: Professor Glenn Koppel

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

October 31, 2017
  United States v. Marshall -- Fourth Circuit
Following Conviction, Substitute Assets Cannot Be Used To Hire Appellate Counsel


Areas of Law: Criminal, Forfeiture

Issue Presented: Whether Marshall may use substitute assets in a credit union account to hire appellate counsel of his choice for the appeal of his criminal convictions.

Brief Summary: Andracos Marshall filed a motion in the United States Court of Appeals for the Fourth Circuit seeking to use substitute assets from a credit union account to hire appellate counsel following his conviction. Addressing Marshall's constitutional argument, the Fourth Circuit explained that title to the credit union account vested with the Government upon Marshall's conviction. Accordingly, Marshall had no constitutional right to the assets, which no longer belonged to him. Next, the court explained that the timing requirements in Federal Rule of Criminal Procedure 32.2 were not fatal to the forfeiture the Government sought. In conclusion, the Fourth Circuit denied Marshall's motion to use the substitute assets to hire appellate counsel.

Extended Summary: On February 24, 2014, Andracos Marshall was charged with several drug-related crimes and money laundering. The Government indicated it would seek forfeiture of substitute assets if the property derived from Marshall's alleged crimes was not located. On November 5, 2015, the Government filed a Bill of Particulars, specifying that it would seek forfeiture of the $59,000 in Marshall's National Institutes of Health Federal Credit Union Account.

After a ten-day trial in the United States District Court for the District of Maryland, a jury found Marshall guilty of all counts. The Government moved to order forfeiture. The District Court entered an order of forfeiture for $51.3 million against Marshall, but it did not specifically mention Marshall's credit union account. The Government filed a motion for a second order of forfeiture, requesting the credit union funds be forfeited as substitute assets under 21 U.S.C. § 853(p). The District Court entered the second forfeiture order. Marshall filed a motion in the United States Court of Appeals for the Fourth Circuit to use the untainted funds in his credit union account to hire appellate counsel.

First, Marshall argued that the Constitution required his substitute assets be released so he could hire appellate counsel. The Fourth Circuit assumed, but did not decide, that Marshall had a constitutional right to appellate counsel of choice. Then, the court looked to two Supreme Court cases. In Caplin & Drysdale, Chartered v. United States, the Supreme Court held that a defendant may not use tainted funds forfeited after conviction to pay trial counsel fees. 491 U.S. 617 (1989). The Caplin Court reasoned that title to the tainted property vested in the Government at the time of the criminal act. Also, the government's interest in the property outweighed the defendant's interest. In Luis v. United States, the Supreme Court held that a defendant may use untainted assets pretrial to hire counsel of choice. 136 S. Ct. 1083 (2016). Unlike tainted assets, title to untainted "substitute" property does not vest with the government until after conviction.

Marshall sought to use untainted assets after conviction. The Fourth Circuit explained that title to the funds in the credit union account, which were substitute assets, vested in the Government when Marshall was convicted. Marshall therefore had no interest in property that was no longer his, whereas the Government had an ownership interest and an interest in making victims whole through the assets. Under these circumstances, the Fourth Circuit concluded that the Constitution did not require Marshall's substitute assets be released for Marshall to hire appellate counsel.

Second, Marshall contended that the Government violated Federal Rule of Criminal Procedure 32.2 by waiting months after the verdict to seek his credit union funds as substitute assets. Looking to the language of the Rule, the Fourth Circuit explained that an order of forfeiture can be entered "at any time." Moreover, the timing requirements in Rule 32.2 have been interpreted as time-related directives. As such, they serve to keep the process moving, but are not dispositive if a deadline is missed. Lastly, Marshall had notice that the Government intended to seek forfeiture of the credit union funds because it was in its Bill of Particulars. In conclusion, the Fourth Circuit denied Marshall's motion to use his forfeited funds to hire appellate counsel of choice.

To read the full opinion, click here.

Panel: Judges Agee, Keenan, and Harris

Argument Date: 05/11/2017

Date of Issued Opinion: 09/25/2017

Docket Number: No. 16-4494

Decided: Motion denied by published opinion.

Case Alert Author: Ashley Fellona, Univ. of Maryland Carey School of Law

Counsel: Marvin David Miller, LAW OFFICES OF MARVIN D. MILLER, Alexandria, Virginia, for Appellant. Evan Thomas Shea, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellee. ON BRIEF: Rod J. Rosenstein, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellee

Author of Opinion: Judge Agee

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 10/31/2017 11:28 AM     4th Circuit     Comments (0)  

  Buxton v. Kurtinitis -- Fourth Circuit
A Dream Deferred for Performance or Denied for Religion?

Areas of Law: Constitutional Law, First Amendment Law, Civil Law

Issues Presented: (1) Whether the district court erred in determining the Free Speech Clause has no application in the context of speech expressed during a competitive admissions interview? (2) Whether the district court properly granted summary judgment to the defendants in determining that denying admission to the plaintiff did not violate the Establishment Clause?

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held the district court's dismissal of plaintiff's First Amendment retaliation claim was proper because the plaintiff failed to satisfy the first element of such a claim. The Fourth Circuit also held that the district court properly granted summary judgment to the defense because the plaintiff failed to show that the defendants' actions violated any elements of the Establishment Clause.

Extended Summary: In 2013 and 2014, Dustin Buxton applied to the Radiation Therapy Program (RTP) at the Community College of Baltimore County (CCBC), a competitive program that weighs numerous factors when admitting approximately 15 students each year. To gain admission to the RTP, applicants must pass two application stages, receiving an individual score at each stage. At the first stage, applicants are scored based on (1) their GPA and (2) their observation day at a local hospital. If the applicants pass the first stage, they are then invited to a second stage, which consists of a logic exam, a writing sample, and a panel interview. In 2013, Buxton was invited to the second stage, but did not gain admission to the RTP. This decision was made for various reasons including: Buxton's poor feedback on his observation day; his failure to fully read the questions on the writing sample and supply an appropriate response; and his perceived lack of interpersonal skills for this field. In his written review of his application, Adrienne Dougherty, the Director of the RTP at the CCBC, also stated that "[Buxton] brought up religion a great deal during the interview. Yes, this is a field that involves death and dying; but religion cannot be brought up in the clinic by therapist [sic] or students." Buxton applied to the program again in 2014, but he did not make it through the application process because his first stage score was not high enough to move on to the second stage.

Buxton brought this action against Dougherty and other CCBC employees alleging violation of the Free Speech Clause, the Establishment Clause, and the Equal Protection Clause. He claimed that he was discriminated against because he expressed his religious beliefs during his interview. The United States District Court for the District of Maryland dismissed the Free Speech claim and granted summary judgment in favor of the defendants on Buxton's Establishment Clause and Equal Protection claims. Buxton appealed the dismissal of his Free Speech claim and the grant of summary judgment on his Establishment Clause claim to the Fourth Circuit.
The Fourth Circuit affirmed the district court's dismissal of Buxton's Free Speech claim finding that Buxton failed to satisfy the first element for a First Amendment retaliation claim. The Fourth Circuit also upheld the district court's grant of summary judgment because Buxton failed to show that the CCBC's actions violated any elements of the Establishment Clause.

The court first analyzed the retaliation claim. In order for Buxton to succeed in a First Amendment retaliation claim, the following elements must be satisfied: (1) Buxton engaged in protected First Amendment activity, (2) the defendants took some adverse action that affected Buxton's First Amendment right, and (3) there was a cause and effect relationship between Buxton's protected activity and the defendants' conduct. Constantine v. Rectors & Visitors of George Mason Univ., 411 F.3d 474, 499 (4th Cir. 2005) (citing Suarez Corp. Indus. v. McGraw, 202 F.3d 676, 686 (4th Cir. 2000)).

To amount to protected activity under the first prong, Buxton's First Amendment claim had to fall within one of three recognized categories: (1) employment; (2) public forum; or (3) a case "where the government is providing a public service that by its nature requires evaluations of, and distinctions based upon, the content of speech." The court found that Buxton's speech did not fall into the first two categories. Buxton's speech in the interview room was not an employment case because his speech was related to a personal interest for admission to CCBC. Buxton's speech also did not fall into the public forum framework because public forum cases deal with the government restricting access to a forum by preventing speech happening all together. In this case, there was no restriction on Buxton's speech since it already occurred in the interview room. Having rejected application of the first two categories, the court determined the most relevant category to examine Buxton's speech was the final category of cases where the government is providing a public service that by the competitive nature of the process required the government to make speech-based distinctions. Examining this category, the court ruled that the defendants did not violate Buxton's right to free speech. This determination was made by examining prior cases where the government was permitted to use content-based distinctions to judge the relative excellence of prospective art projects. Such distinctions are also permitted where the government is providing a public benefit that was allocated to a limited number of persons through a competitive process. In this case, the court reasoned that the CCBC must judge the excellence of prospective students who apply for admission to the finite number of available slots open in the RTP program. Narrowing the candidates using the interview process necessarily required content-based distinction to be made on the applicants' speech. Accordingly, the Fourth Circuit affirmed the district court's dismissal of Buxton's Free Speech claim.

The court then analyzed Buxton's Establishment Clause claim. The court applied the Lemon test to determine whether the CCBC violated the Establishment Clause. For the government's conduct to comply with the Establishment Clause, it must (1) have a secular purpose; (2) have a primarily secular effect; and (3) not foster excessive entanglement between government and religion. The court found that the defendants had the secular purpose of identifying the best qualified candidates for the RTP and Buxton was not among the best qualified candidates. Second, using the topics discussed by interviewees during their interviews as a means of determining interpersonal skills was not improper and could not be construed as inhibiting religion. Last, since the third prong of this test dealt with the excessive entanglement from the government's "invasive monitoring," the court found that this prong was irrelevant. The court concluded that the district court properly granted summary judgment in the defendants' favor on Buxton's Establishment Clause claim.

To read the full opinion, click here.

Panel: Circuit Judges Traxler, Floyd, and Harris

Argument Date: 05/10/2017

Date of Issued Opinion: 07/07/2017

Docket Number: 16-1826

Decided: Affirmed by published opinion.

Case Alert Author: Nneka Adibe, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Carly Farrell Gammill, AMERICAN CENTER FOR LAW & JUSTICE, Franklin, Tennessee, for Appellant. Peter Stephen Saucier, KOLLMAN & SAUCIER, P.A., Timonium, Maryland, for Appellees. ON BRIEF: Abigail A. Southerland, Franklin, Tennessee, Michelle K. Terry, Greenville, South Carolina, Francis J. Manion, AMERICAN CENTER FOR LAW & JUSTICE, New Hope, Kentucky; John Garza, GARZA LAW FIRM, P.A., Rockville, Maryland, for Appellant. Clifford B. Geiger, Bernadette M. Hunton, KOLLMAN & SAUCIER, P.A., Timonium, Maryland, for Appellees. Thomas C. Berg, Religious Liberty Appellate Clinic, UNIVERSITY OF ST. THOMAS SCHOOL OF LAW, Minneapolis, Minnesota; Kimberlee Wood Colby, CENTER FOR LAW AND RELIGIOUS FREEDOM, Springfield, Virginia, for Amici Curiae.

Author of Opinion: Circuit Judge Floyd

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 10/31/2017 11:10 AM     4th Circuit     Comments (0)  

  United States v. Lefsih -- Fourth Circuit
One Question Too Many? Judges Enjoy Broad Discretion to Manage Trials, But Cannot Compromise Impartiality

Areas of Law: Constitutional Law

Issues Presented: Whether the trial judge's questioning of the state's witness was improper, and if so, whether it denied the Appellant of his substantial right to a fair and impartial trial.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit found that the District Court for the Eastern District of North Carolina acted improperly and denied the Appellant his right to a fair and impartial trial. The district court's extensive questioning of the state's witness and expressed skepticism of the Diversity Immigrant Visa Program conveyed a negative impression to the jury of both the program and of individuals, like the Appellant, who avail themselves of the program. The Fourth Circuit found that the district judge directly conveyed to the jury his skepticism of both the immigration program and the Appellant himself, and held that the district court's actions were in error. Further, the Fourth Circuit concluded that the factors it has relied on to mitigate the prejudicial effect of improper judicial interventions were absent in this case. Thus, the court held that the district court's error was sufficiently prejudicial to undermine confidence in Lefsih's conviction and vacated the judgment.

Extended Summary: The Appellant, Hemza Menade Lefsih, immigrated to the United States from Algeria through the Diversity Immigrant Visa Program ("Diversity Program"). The Diversity Program awards permanent residence immigration visas based on a lottery system to people from countries that typically have low immigration numbers in the United States. Among other things, the application (Question 23) asks whether an applicant has "ever been arrested, cited, or detained by any law enforcement officer . . . for any reason." Mr. Lefsih answered this question, "No." However, Mr. Lefsih, who worked as a cab driver in North Carolina, had received eleven traffic tickets. These tickets fell under the definition of a "citation" for the purposes of the application. Mr. Lefsih was thus charged with two counts of immigration fraud and two counts of making a false statement on a naturalization form.

The issue before the district court was whether Mr. Lefsih knowingly made a false statement on a naturalization form. During the trial, the state called two witnesses, and the defense called one, Mr. Lefsih. The state's second witness, Mr. Gary Freitas, was a senior officer with the United States Citizenship and Immigration Services. Mr. Freitas testified about the Diversity Program and the application process for citizenship. Several times during Mr. Freitas' direct examination, the trial judge asked questions about the Diversity Immigrant Visa Program and those who avail themselves of the lottery based immigration program. For example, after the witness testified that the program was established by Congress, the district court interjected saying, "Don't you love Congress? I mean, unbelievable, unbelievable." When the witness explained that the purpose of the Diversity Program was to award visas to individuals from countries with historically low immigration numbers, the district court again interjected and asked: "And Congress is aggressively trying to bring those people to America by creating a lottery where they have special treatment?" After the witness responded, the district court continued, asking, "Aren't there quotas on people coming from countries that send a lot of people here, and you have to show you're a doctor, an engineer or a rocket scientist or someone who is going to contribute to the well-being of the United States of America and make it a better place to live because of your skill or personal characteristics? . . . But if you're in the bottom hundred countries in the world, just come on." The witness responded that for the Diversity Program, an individual only needed to apply for the lottery to have a chance. The district court judge then retorted, "But they don't have to be a back surgeon or anything? So if you get lucky and win the lottery and get a card to America you can drag along your ten kids and four wives or what?"

Subsequently, Mr. Lefsih was called to testify on his own behalf. Mr. Lefsih testified that he believed Question 23 was referring only to criminal offenses that resulted in arrests or detentions, not traffic tickets, and that the false answer was an honest mistake. The jury deliberated for 30 minutes before returning with a guilty verdict on all counts.

Mr. Lefsih appealed his convictions to the United States Court of Appeals for the Fourth Circuit. He argued that the district court impermissibly conveyed to the jury, through questions and comments that otherwise were irrelevant to the case, the court's skepticism of the Diversity Program, as well as its negative view of the immigrants - like Lefsih - who avail themselves of the Program. While the district court generally has broad discretion to exercise reasonable control over the examination of witnesses, the issue in front of the Fourth Circuit was two-fold. First, whether the judicial intervention was inappropriate, and second, if it was "so prejudicial" that the defendant was on balance denied his right to a fair trial as a result.

Impartiality is compromised when judicial intrusion "creates for the jury an impression of partiality or apparent favor or disfavor for one side or the other." Here, the Fourth Circuit noted it was an "unusual" case where the problem was not "the extent of judicial participation" at the trial, but rather the "actual content of the court's questions and comments." The Fourth Circuit found that where the district court, through its questioning of a witness, interjects a negative impression of a defendant into a trial, or conveys skepticism of the defendant, then the court has "crossed the line from active trial management to 'unfairly lending the court's credibility' to the government's case."

Turning to the second prong, the court next considered whether the error was so prejudicial as to deny Mr. Lefsih a fair trial. In assessing this prong, the court considered and balanced several factors that might mitigate the prejudicial effect of the improper comments. For instance, the court looked at whether there were corrective instructions after the inappropriate comments, whether the judge equally directed criticism to both sides, the length of jury deliberation, and the relative strength of the state's case. In evaluating whether the state's case was strong enough that a jury may have found "compelling and overwhelming" evidence regardless of the comments, the court noted that the government's case was rather weak with only circumstantial evidence, and that the judge's skepticism was solely directed at Mr. Lefsih. The court weighed heavily the fact that Mr. Lefsih's sole defense that he unknowingly answered the question falsely "depended critically on his credibility," and determined that the district court's commentary was "potentially fatal" to Lefsih's credibility-based defense. Furthermore, while lengthy jury deliberation followed by a divided verdict may suggest that the jury was not affected by the improper comments, the court pointed out that the jury here deliberated for only 30 minutes before returning with a unanimous guilty verdict on all counts.

The Fourth Circuit concluded that due to the particular circumstances of this case, the trial court's interventions were "not only plainly erroneous but also 'so prejudicial' as to deny the defendant an opportunity for a fair and impartial trial." Accordingly, the Fourth Circuit vacated Mr. Lefsih's conviction and remanded for proceedings consistent with this opinion.

To read the full opinion, click here.

Panel: Judges Harris, Traxler and Floyd

Argument Date: 05/10/2017

Date of Issued Opinion: 08/14/2017

Docket Number: No. 16-4345

Decided: Vacated and remanded by published opinion.

Case Alert Author: Dana Blech, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Jorgelina E. Araneda, ARANEDA LAW FIRM, Raleigh, North Carolina, for Appellant. Barbara Dickerson Kocher, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee. ON BRIEF: John Stuart Bruce, Acting United States Attorney, Jennifer P. May-Parker, First Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee.

Author of Opinion: Judge Harris

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 10/31/2017 10:32 AM     4th Circuit     Comments (0)  

  Jorge Yarur Bascuñán, et al. v. Daniel Yarur Elsaca, et al. - Second Circuit
Headline: Second Circuit Reverses District Court, Holding Foreign Plaintiff Sufficiently Alleged a Domestic Injury under Civil RICO Statute as Required by the United States Supreme Court's 2016 RJR Nabisco Decision

Area of Law: Civil RICO

Issue(s) Presented: Whether the foreign plaintiff, residing abroad, alleged a domestic injury as required to state a private action under civil RICO.

Brief Summary:
The United States District Court for the Southern District of New York dismissed a civil RICO lawsuit by a foreign national against his financial manager, seeking damages under the civil RICO statute, finding that the plaintiff failed to allege a domestic injury as required by the recent United States Supreme Court decision in RJR Nabisco Inc. v. European Community. The Second Circuit disagreed with the District Court's exclusive reliance on the plaintiff's foreign residence as indicative of a foreign injury, holding that injuries occurring to property located within the United States were sufficient to satisfy the domestic injury requirement. Accordingly the Second Circuit vacated and remanded to the District Court for further proceedings.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...98e70485a9b/1/hilite/

Significance, if Any: This case is one of first impression in any United States Court of Appeals interpreting the "domestic injury" requirement for Civil RICO established in the Supreme Court's RJR Nabisco decision.

Extended Summary:
In 2015, Plaintiff-Appellant Bascun¿a¿n filed an action under Section 1964(c) of the Racketeer Influenced and Corrupt Organizations Act (RICO), commonly referred to as a civil RICO suit. In his complaint, Bascun¿a¿n alleged that his cousin Elsaca, Defendant-Appellee, continuously violated RICO in his capacity as Bascun¿a¿n's financial manager by setting up several fraudulent financial schemes, resulting in an economic loss to Bascun¿a¿n of over $64 million. The United States District Court for the Southern District of New York dismissed Bascun¿a¿n's complaint on the ground that he failed to allege a domestic injury, a requirement set forth by the United States Supreme Court in RJR Nabisco Inc. v. European Community (2016). In RJR Nabisco, the Court held that a civil RICO suit does not allow recovery for foreign injuries, so a plaintiff must allege and prove a domestic injury to business or property. In its dismissal of Bascun¿a¿n's complaint, the District Court relied on Bascun¿a¿n's place of residence, Chile, as determinative that he alleged only foreign injuries.

On appeal, the Second Circuit disagreed with the District Court's exclusive reliance on place of residence to determine whether the injuries alleged are foreign or domestic. While recognizing that a plaintiff's place of residence could be relevant to such a determination, the Second Circuit emphasizes that this fact is not by itself determinative. Sufficient contact with the United States to support a domestic injury can be satisfied by showing that there were injuries to property located within the United States, even if the plaintiff is not a resident of the United States. In this case, Bascun¿a¿n satisfied this requirement for two of his claimed injuries by alleging misappropriation of funds and theft of bearer shares that were held in New York banks, despite his residence in Chile.

In reaching this conclusion, the Court emphasizes that not just any contact with the United States will suffice to make an injury domestic. The Court found that Bascun¿a¿n's allegations of injuries to property located outside of the United States do not become domestic injuries merely because Elsaca laundered the funds through the United States. Rather, the injury must have a "sufficient relationship" with the United States, which the Court finds is satisfied by Bascun¿a¿n's claims that property located in New York was injured therein. Finding the District Court incorrectly applied the Supreme Court's requirement of domestic injury set forth in RJR Nabisco, the Second Circuit remands the case back to the District Court for a determination that is consistent with the Second Circuit's reading of the requirement.

Given that this is a case of first impression across all United States Courts of Appeals, it is likely that the Second Circuit's interpretation of RJR Nabisco could affect civil RICO lawsuits across multiple jurisdictions.

To read the full opinion, please visit:

http://www.ca2.uscourts.gov/de...98e70485a9b/1/hilite/

Panel: Circuit Judges Cabranes and Livingston; District Judge Pauley

Argument Date:
04/28/2017

Date of Issued Opinion: 10/30/2017

Docket Number: 16-3626-cv

Decided: Vacated and Remanded

Case Alert Author: Alexandra Dobles

Counsel: Robin L. Alperstein, Becker, Glynn, Muffly, Chassin & Hosinski LLP for Plaintiffs-Appellants; Jennifer M. Selendy, Quinn Emanuel Urquhart & Sullivan, LLP for Defendants-Appellees

Author of Opinion:
Judge Cabranes

Case Alert Circuit Supervisor: Elyse Diamond

    Posted By: Elyse Diamond @ 10/31/2017 08:52 AM     2nd Circuit     Comments (0)  

October 30, 2017
  Dufort v. City of New York, et. al.
Case Name: Dufort v. City of New York, et al.

Headline: Second Circuit Reinstates False Arrest and Malicious Prosecution Claims Brought by Acquitted Man Who was Arrested at Age 15 and Spent Five Years at Rikers Island Awaiting Trial

Area of Law: Criminal Procedure

Issue Presented: Whether a reasonable jury could find that the defendant police officers intentionally withheld or manipulated key evidence as to defendant's guilt during his arrest and prosecution.

Brief Summary: At age 15, Ryan Dufort was present during a barroom brawl in Queens where a fellow teenager ended up dead. A witness was shown surveillance footage that included Dufort. She stated that she could not identify him as an assailant, but that one of the attackers, whom she had only seen from behind, had been wearing a red shirt that was similar in color to Dufort's sweatshirt. Detectives then had Dufort participate in a lineup wearing a similar or identical red sweatshirt. No other participant in the lineup was wearing a red shirt. The witness then identified him as a person involved in the attack. Based largely on that identification, Dufort was arrested and charged with numerous crimes, including second-degree murder. When his case was presented to the grand jury, the grand jury was only told that Dufort had been identified as an assailant, and not that the identification was based on the color of his sweatshirt. Dufort spent nearly five years at Rikers Island awaiting trial. When the trial finally occurred, the witness could not identify him in the courtroom, and testified that she had only identified him in the lineup because of his clothing. Although Dufort's co-defendants were convicted, he was acquitted of all charges, and subsequently sued in the United States District Court for the Eastern District of New York, bringing false arrest, malicious prosecution, and due process claims. The district court dismissed his claim, but the Second Circuit reinstated his false arrest and malicious prosecution claims, on grounds that it was not clear that probable cause had supported his arrest and indictment.

Extended Summary: On October 8, 2006, two teenage boys were attacked around 3:50 AM while attempting to leave a karaoke bar. Ryan Dufort was fifteen years old at the time and was present at the bar, wearing a maroon zip-up hooded sweatshirt. Surveillance footage showed Dufort walking down a hallway carrying the pipe and later leaving with other young men who were holding bats. An eyewitness told police Dufort's clothing was similar to what the attacker was wearing. Another man in a red button-down shirt was also shown on video leaving the bar with a bat in-hand moments afterwards. In a subsequent line-up, Dufort was the only person dressed in a red shirt similar to the description given by the witness. This identification was later used to obtain a grand jury indictment.

At trial, the eye witness could not identify Dufort while on the stand. This witness testified that her identification was based solely on the similar clothing. Dufort was acquitted and brought suit under 42 U.S.C. § 1983 against the individual defendants for false arrest, malicious prosecution, and denial of due process. As well, plaintiff brought a state law claim against the City for malicious prosecution under respondeat superior. The District Court granted summary judgment for the defendants, finding there was no issue of material fact because both Dufort's arrest and prosecution were based on probable cause.

On the false arrest claim, the Second Circuit began by noting that probable cause is a fluid concept that cannot be reduced to an exact legal rule. As an initial matter, the Second Circuit made clear that the lineup identification must be disregarded for purposes of determining probable cause. The court ruled the identification was "so defective that probable cause could not reasonably by based upon it." The court was therefore required to determine whether, absent the lineup identification, the evidence was sufficient to support a finding of probable cause for the arrest. The court concluded that it was not, given the eyewitness's testimony that she had only recognized Dufort because of the color of his sweatshirt, and given the lack of video evidence, forensic evidence, and other eyewitness testimony.

The court similarly held that the malicious prosecution claim should be tried before a jury. The court rejected defendants' argument that additional evidence established probable cause for the criminal proceeding, even if there had not been probable cause for the arrest. The court reasoned the new evidence - consisting of one witness seeing Dufort in the karaoke bar and the other being a statement of the co-defendant who had accepted a plea deal - could not be evaluated at the summary judgment stage. The court likewise held that it would be premature to grant qualified immunity to the defendants.
To read the full opinion, please visit: http://pacer.ca4.uscourts.gov/...inion.pdf/101769.P.pdf

Panel: Circuit Judges Walker, Livingston, and Lynch

Argument Date: 05/03/2017

Argument Location: New York, NY

Date of Issued Opinion: 10/27/2017

Docket Number: No. 16-1715-cv

Decided: Affirmed in Part and Reversed in Part

Case Alert Author: Amanda G. Fiorilla

Counsel: Kayla C. Bensing (Edwin G. Schallert on the brief), Debevoise & Plimpton LLP, for Plaintiff-Appellant and Kathy C. Park, Assistant Corporation Counsel (Fay Ng on the brief) (on behalf of Zachary W. Cater, Corporation Counsel of the City of New York, New York, NY) for Defendants-Appellees.

Author of Opinion: Judge Walker

Circuit: 2nd Circuit

Case Alert Circuit Supervisor: Emily Gold Waldman

    Posted By: Emily Waldman @ 10/30/2017 02:50 PM     2nd Circuit     Comments (0)  

  United States v. Ventura - Fourth Circuit
When More Is Not More: Fourth Circuit Upholds Resentencing that Increases Per Count Punishment But Equals Original Sentence

Areas of Law: Criminal, Sentencing

Issue Presented: Whether the District Court's re-sentence, which was equal to Petitioner's original sentence, contravened the Fourth Circuit's mandate, was vindictive, and was unreasonable.

Brief Summary: German de Jesus Ventura was found guilty of seven offenses, and sentenced to 420 months in prison. Ventura appealed, and the Fourth Circuit vacated Ventura's conviction of Count Seven. On remand, the District Court resentenced Ventura to 420 months. Ventura appealed. The United States Court of Appeals for the Fourth Circuit affirmed the District Court's resentence. In affirming, the court explained that the newly imposed sentence complied with its mandate to the District Court. Additionally, Petitioner's resentence was not larger than Petitioner's initial sentence, so there was no presumption of vindictiveness. Lastly, the sentence was reasonable.

Extended Summary: German de Jesus Ventura operated a chain of brothels in Annapolis, Maryland. A jury found Ventura guilty of seven sex trafficking and related offenses, and Ventura was sentenced to 420 months by the United States District Court for the District of Maryland. Ventura appealed. The United States Court of Appeals for the Fourth Circuit concluded that Ventura should have been acquitted of Count Seven, possession of a firearm in furtherance of a crime of violence. Accordingly, the Fourth Circuit remanded the case for the District Court to enter a judgment of acquittal and to resentence Ventura.

At the resentencing hearing, the District Court entered judgment of acquittal on Count Seven and found Ventura's offense level to fall within an advisory sentencing guideline range of 360 months to life. The District Court considered trial testimony about Ventura's violent behavior and firearm possession, and it alluded to a Government letter indicating Ventura had received five disciplinary actions while in custody. Ultimately, the District Court resentenced Ventura to 420 months. Ventura appealed his resentence to the Fourth Circuit.

Petitioner argued that during resentencing, his initial 420-month sentence should have simply been reduced by the number of months initially corresponding to Count Seven. By instead recalculating the sentences to be imposed for the six non-vacated convictions, Petitioner argued, the District Court's resentence contravened the Fourth Circuit's mandate. The Fourth Circuit disagreed.

The Fourth Circuit first reaffirmed its embrace of the "sentencing package" doctrine. This doctrine renders an entire sentence void after a reviewing court has vacated any portion of a sentence. Moreover, the Fourth Circuit's initial mandate left room for the District Court to recalculate Petitioner's sentence for the six non-vacated convictions. Accordingly, the Fourth Circuit concluded that the District Court did not exceed its mandate.

Additionally, Petitioner argued that the District Court was presumptively vindictive because it effectively increased his sentence. Petitioner contended that though his total sentence remained the same, under the count-by-count approach (followed by two sister circuits), the District Court had increased the sentence imposed for each of his six non-vacated convictions. The Fourth Circuit, however, reaffirmed that it stands with the majority of its sister circuits and employs the aggregate package approach. Under the aggregate package approach, Petitioner's new sentence was not greater than his original sentence - it was the same. Thus, Petitioner failed to establish a presumption of vindictiveness because his aggregate sentence did not increase.

Lastly, Petitioner argued that his resentence was not reasonable. Petitioner contended that by considering testimony of Petitioner's violence and firearm possession, the District Court invaded the province of the jury. Petitioner also challenged the District Court's consideration of his conduct while incarcerated. Considering procedural reasonableness, the Fourth Circuit looked to Supreme Court precedent permitting sentencing courts to consider factual matters not determined by a jury; and circuit precedent, permitting sentencing courts to consider conduct despite an acquittal if proven by a preponderance of the evidence. The Fourth Circuit was satisfied that Count Seven's underpinnings were proven by a preponderance of the evidence. Additionally, it explained that the District Court reasonably considered Petitioner's conduct during incarceration, which had been proven by a preponderance of the evidence. Then, considering substantive reasonableness, the Fourth Circuit concluded that the resentence was reasonably within the applicable advisory guideline range. Accordingly, the Fourth Circuit concluded that the resentencing was reasonable and affirmed the District Court's decision.

To read the full opinion, clickhttp://www.ca4.uscourts.gov/Op...4808.P.pdf"> here.[/L]

Panel: Chief Judge Gregory, and Judges King and Keenan

Argument Date: 05/09/2017

Date of Issued Opinion: 07/18/2017

Docket Number: No. 15-4808

Decided: Affirmed by published opinion

Case Alert Author: Ashley Fellona, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Erek Lawrence Barron, WHITEFORD, TAYLOR & PRESTON, LLP, Bethesda, Maryland, for Appellant. Rachel Miller Yasser, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellee. ON BRIEF: Rod J. Rosenstein, United States Attorney, P. Michael Cunningham, Assistant United States Attorney, Melanie Goldberg, Student Law Clerk, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellee.

Author of Opinion: Judge King

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 10/30/2017 01:54 PM     4th Circuit     Comments (0)  

  Zavaleta-Policiano v. Sessions -- Fourth Circuit
All in the Family: Threats to Family Business a Potential Basis for Asylum

Areas of Law: Immigration Law, Asylum Law

Issue Presented: Whether a business owner from El Salvador who sought asylum under 8 U.S.C. § 1101(a)(42)(A) established persecution on account of a familial relationship when MS-13, an international criminal gang, targeted her after her father fled the country.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held that the Board of Immigration Appeals abused its discretion when it held that a business owner from El Salvador was not persecuted on account of a familial relationship, despite evidence of her family's business, the prominence of her family in the region, and threats she began receiving immediately after her father fled the country. The Fourth Circuit found that Petitioner's familial relationship was at least one central reason for her persecution. Because of this, Petitioner had met at least two of the three requirements for asylum under 8 U.S.C. § 1101(a)(42)(A). The Fourth Circuit remanded the case to the Board of Immigration Appeals for a determination on the final factor.

Extended Summary: On August 27, 2012, Petitioner Zulma Savaleta- Policiano entered the United States through Texas. The next day she and her three children were served with a Notice to Appear pursuant to 8 U.S.C. § 1182(a)(6)(A)(i). Petitioner filed for asylum, withholding of removal, and relief under the Convention Against Torture (CAT). In support of these pleadings, Petitioner filed two notes she had received from members of MS-13, and a sworn affidavit.

In the affidavit, Petitioner stated that she was from a town in La Libertad and her father owned a wholesale store bearing the family name. Because of this her family was well-known in the region. Her father helped her open a convenience store after she was married and the convenience store was associated with her father's store. MS-13 infiltrated the town and began extorting her father for ever increasing amounts of cash. Petitioner's father eventually fled to Mexico. Immediately after he left, Petitioner began receiving threats from MS-13, both through telephone calls and notes. After being extorted for several months, Petitioner went to the police, who told her to watch out for her kids and to leave if she could.

Petitioner cited persecution related to three protected rights as a basis for asylum: (1) her familial relationship, (2) membership in the business-owning class in El Salvador, and (3) political opinion. At a hearing before an Immigration Judge (IJ), the Government stipulated to the credibility of Petitioner's affidavit and argued only that the facts alleged did not establish that she fell within a protected class. The IJ rejected the political opinion basis and the business-owning class basis. As to the rejection of Policiano's persecution claim based on her status as a business owner, the IJ reasoned that it was not a special group and if it was there was still no nexus between her membership in the group and the threats. The IJ also found that she was not threatened or harassed because of her relationship to her father. The IJ further denied her CAT claim. The Board of Immigration Appeals (BIA) affirmed the IJ's decision.

To be eligible for asylum, Petitioner had to prove that (1) she had suffered past persecution or "has a well-founded fear of persecution; (2) on account of a protected ground; (3) by an organization that the Salvadoran government is unable or unwilling to control." Hernandez-Avalos v. Lynch, 784 F.3d 944, 949 (4th Cir. 2015). The Fourth Circuit was bound to affirm the BIA unless its ruling was "manifestly contrary to law and an abuse of discretion." Tassi v. Holder, 660 F.3d 710, 719 (4th Cir. 2011).

The Fourth Circuit rejected the IJ and BIA conclusions that Petitioner had not been persecuted on account of her membership in the Policiano family. Persecution, the court held, occurs "'on account of' a protected ground if that ground serves as 'at least one central reason for'" the persecution. 8 U.S.C. § 1158(b)(1)(B)(i). The protected ground need not be the central reason, but must be more than "incidental, tangential, superficial, or subordinate." Quinteros-Mendoza v. Holder, 556 F.3d 159, 164 (4th Cir. 2009). The Fourth Circuit found the BIA abused its discretion in upholding the IJ's factual finding. The court found the IJ and BIA relied too heavily on MS-13's "articulated purpose" for targeting Petitioner, as stated in the notes given to Petitioner. In addition, the IJ and BIA's reliance on the number of individuals targeted by MS-13 was "beside the point" in evaluating an individual claim. The court further found the IJ and BIA failed to appreciate or address critical, unchallenged evidence in the record. In particular, the record showed that Petitioner's father was threatened and fled; immediately thereafter the Petitioner was threatened; and soon thereafter Petitioner's daughter was threatened. Given these facts, the court found Petitioner's relationship with her father was "at least one central reason" for the persecution.

Because the IJ and BIA had not made a factual finding as to whether the persecution was by a group the Salvadoran government could not or would not control, the Fourth Circuit remanded for a finding on that issue. It noted that efforts to reach out to police are highly probative with regard to this requirement. The court also remanded for a factual finding on the Convention Against Torture claim.

To read the full opinion, click here.

Panel: Chief Judge Gregory, Circuit Judge Wilkinson, and Senior Circuit Judge Davis

Argument Date: 03/23/2017

Date of Issued Opinion: 07/26/17, Amended 09/13/17

Docket Number: 16-1231

Decided: Reversed in part, vacated in part, and remanded for further proceedings by published opinion.

Case Alert Author: Jennifer Smith, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Tamara L. Jezic, YACUB LAW OFFICES, Woodbridge, Virginia, for Petitioners. Michael Christopher Heyse, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent. ON BRIEF: Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Mary Jane Candaux, Assistant Director, Office of Immigration Litigation, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent.

Author of Opinion: Chief Judge Gregory

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 10/30/2017 11:08 AM     4th Circuit     Comments (0)  

  United States v. Maclaren -- Fourth Circuit
The Sufficiency of Plausibility: Fourth Circuit Sets Pleading Standard for Adam Walsh Act Release Hearings

Areas of Law: Criminal Law, Statutory Interpretation

Issue Presented: What pleading standard should apply to an Adam Walsh Act detainee's motion for a discharge hearing under 18 U.S.C. § 4247(h).

Brief Summary: In a published opinion, the Fourth Circuit held that the district court erred by denying an Adam Walsh Act detainee's motion for a discharge hearing. A detainee's motion must allege with particularity the extent to which his psychological condition had improved while civilly committed. The Fourth Circuit vacated and remanded to the district court, explaining that a sufficient § 4247(h) motion for a discharge hearing need only allege enough facts to state a claim that is plausible on its face.

Extended Summary: In December 2009, the government classified Donald Maclaren as a sexually dangerous person pursuant to the Adam Walsh Act. In February 2013, a district court for the Eastern District of North Carolina found the government met its burden of proving Maclaren should be civilly committed pursuant to the Act. The court explained that the government proved 1) Maclaren engaged or attempted to engage in sexually violent conduct or child molestation; 2) suffers from a serious mental illness; and 3) as a result, would have trouble refraining from sexually violent conduct or child molestation if released.

However, debate surrounded the third factor: whether he would have difficulty refraining from further child molestation. Maclaren was fifty - four years old when he was incarcerated for child molestation. The court debated whether his age and physical impairments could prevent him from engaging in child molestation. The court ultimately decided no, and civilly committed him in the Federal Correctional Institution in Butner, North Carolina.

In October 2015, pursuant to 18 U.S.C. § 4247(h), Maclaren filed a motion requesting a hearing to determine whether he should be discharged under a conditional release plan. Maclaren submitted an expert report with the motion. The report explained why Maclaren qualified for conditional release: he would not have difficulty now refraining from child molestation. The report based its conclusion on the new edition of the DSM-V, which does not characterize child molestation as a life-long condition. The report also relied upon Maclaren's advanced age and deteriorating health. The government argued against the motion because Maclaren never specifically stated in his motion that he had made improvements in his mental condition while committed. The government also included an analysis of why Maclaren was still a sexually dangerous person.

A district court for the Eastern District of North Carolina denied the motion for a discharge hearing. The court ruled that a § 4247(h) motion must state with particularity the extent to which the detainee's psychological condition has improved. The court also invoked Maclaren's failure to provide information regarding a plan for treatment after release and unwillingness to participate in a treatment program during commitment as reasons for denial.

The Fourth Circuit began with statutory interpretation of the Adam Walsh Act. The court explained that § 4247 provides a mechanism for committed detainees under the Act to challenge their commitment: they can file a motion for a hearing; if a hearing is granted, the person has the opportunity to testify, present evidence, subpoena witnesses, and confront adverse witnesses at the hearing. The hearing court should order a discharge if it finds by a preponderance of the evidence that 1) the person is no longer sexually dangerous, or 2) the person will not be sexually dangerous if released under a prescribed treatment plan.

The court explained that while the Act specifies the evidentiary standard for the hearing (preponderance of the evidence), the Act remains silent on how courts should analyze the motion for a discharge hearing. The court noted that the issue before it represented an issue of first impression across the circuits. Because the Act places explicit evidentiary standards on the hearing, it would be redundant to require Maclaren to make the same evidentiary showing in the motion. The court interpreted the Act's permission for Adam Walsh detainees to file writs of habeas corpus as evidence that Congress did not intend similar strict procedural requirements to apply to § 4247 motions.

Rather, the court compared Maclaren's procedural posture to a civil plaintiff who files a complaint. The § 4247 motion is the vehicle for Maclaren's claim for a hearing to determine discharge in much the same way that a civil plaintiff's complaint is the vehicle to a trial to determine fault. Civil plaintiffs must plead with plausibility before a judge or jury examines the evidence - complaints must "contain sufficient factual matter, accepted as true, that states a claim of relief that is plausible on its face." Likewise, the court found the plausibility standard applies to § 4247 motions because that standard provides an adequate degree of scrutiny to analyze the motion's merits before the hearing.

The Fourth Circuit, therefore, vacated and remanded finding that the district court had imposed too strict of a pleading standard. The district court must now determine whether Maclaren's motion meets the plausibility standard.

To read the full opinion, click here.

Panel: Chief Judge Gregory and Circuit Judges Duncan and Diaz

Argument Date: 05/11/2017

Date of Issued Opinion: 08/02/2017

Docket Number: 16-6291

Decided: Vacated and remanded by published opinion.

Case Alert Author: Matthew Schofield, Univ. of Maryland Carey School of Law
Counsel: ARGUED: Eric Joseph Brignac, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Raleigh, North Carolina, for Appellant. Michael Lockridge, BUREAU OF PRISONS, Butner, North Carolina, for Appellee. ON BRIEF: Thomas P. McNamara, Federal Public Defender, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Raleigh, North Carolina, for Appellant. John Stuart Bruce, Acting United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee.

Author of Opinion: Circuit Judge Diaz

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 10/30/2017 11:00 AM     4th Circuit     Comments (0)  

  Boggala v. Sessions -- Fourth Circuit
Grammar Rules the Day: Permanent Resident's Deportation Hinged on "The"

Areas of Law: Criminal, Immigration

Issue Presented: Whether a permanent resident's signed deferred prosecution agreement qualified as a "conviction" for deportation purposes.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit held that the immigration judge correctly determined an undocumented sex offender was removable under the Immigration and Nationality Act ("INA") after he agreed to a deferred prosecution agreement. The Fourth Circuit found that the agreement constituted a conviction subject to the INA's removal process because the accused attended a confirmation hearing where he made factual admissions sufficient to warrant a finding of guilt.

Extended Summary: In 2009, Vijaya Boggala, a doctor originally from India, was granted permanent residency after he married a United States citizen. Three years later, Boggala initiated an online chatroom conversation with an undercover police officer, who posed as a fourteen-year old female. After Boggala suggested the two engage in sexual intercourse, they made plans to meet at a Greensboro parking lot. Shortly thereafter, Boggala was apprehended by police.

Boggala was charged with soliciting a minor to commit an unlawful sex act. Unlikely to succeed at trial, Boggala entered into a deferred prosecution agreement with state prosecutors. This agreement provided that the State would refrain from prosecuting the crime so long as Boggala participated in supervised probation and promised not to commit any future criminal acts. At the North Carolina Superior Court's confirmation hearing, the judge asked Boggala if he understood he was "admitting responsibility and stipulating to the facts to be used against" him. Boggala responded, "yes" and the agreement was confirmed. In February 2013, the Department of Homeland Security brought removal proceedings, contending that Boggala was "an alien convicted of a crime involving moral turpitude." The immigration judge found that Boggala was removable and that no exceptions applied. Boggala appealed and the Board of Immigration Appeals ("BIA") affirmed. Boggala then appealed to the Fourth Circuit.

The Fourth Circuit held that the immigration judge properly determined Boggala's deferred prosecution agreement qualified as a conviction because Boggala "admitted sufficient facts to warrant a finding of guilt" pursuant to 8 U.S.C. § 1101(a)(48)(A)(i).

The court first considered whether Boggala admitted any facts before and during the deferred prosecution process. Prior to signing the agreement, Boggala waived indictment by signing a packet of information. The packet contained details of the allegations in addition to the relevant facts at issue. Boggala then signed the deferred prosecution agreement which contained little to no information. Most importantly, at the deferred prosecution hearing, Boggala responded "yes" when the judge asked if Boggala understood he was "admitting responsibility and stipulating to the facts to be used against [him]." The court noted that while a deferred prosecution agreement is not "by itself a sufficient 'admission of facts,'" the judge's phrasing of the question made it sufficient because the judge referenced "the facts." The Fourth Circuit held the trial judge's use of the article "the" referenced "a stipulation to the facts contained in the" packet of information that Boggala initially signed when he waived indictment. According to the court, "the facts" could only relate to the packet since the packet was the only existing set of facts to even consider. Thus, the court determined Boggala admitted sufficient facts during the deferred prosecution hearing.

Next, the court held that the facts Boggala admitted were sufficient to warrant a finding of guilt, because the packet of information Boggala signed contained factual details demonstrating that each element of the crime was violated. As such, the court affirmed the immigration judge's decision, finding that Boggala was removable because his deferred prosecution qualified as a conviction under the INA.

Judge Diaz dissented, finding that Boggala's "yes" response at the deferred prosecution hearing did not constitute a stipulation of facts because the judge essentially read the agreement verbatim and if the agreement was not sufficient by itself, then neither was the hearing.

To read the full opinion, click here.

Panel: Judges Wilkinson, Floyd, and Diaz

Argument Date: 03/21/2017

Date of Issued Opinion: 08/09/2017

Docket Number: No. 16-1558

Decided: Decided by published opinion.

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

Counsel: ARGUED: Helen Parsonage, ELLIOT MORGAN PARSONAGE PLLC, Winston Salem, North Carolina, for Petitioner. Tim Ramnitz, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent. ON BRIEF: Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Civil Division, Shelley R. Goad, Assistant Director, Jennifer A. Singer, Office of Immigration Litigation, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent. Sejal Zota, NATIONAL IMMIGRATION PROJECT OF THE NATIONAL LAWYERS GUILD, Boston, Massachusetts, for Amici Curiae.

Author of Opinion: Judge Floyd

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 10/30/2017 09:40 AM     4th Circuit     Comments (0)  

  United States v. Chamberlain -- Fourth Circuit
Overruling Precedent - You Can Keep What's Yours...At Least Until Trial

Areas of Law: Criminal Law, Statutory Interpretation

Issue Presented: Whether Luis v. United States, 136 S. Ct. 1083 (2016), abrogates Fourth Circuit precedent interpreting 21 U.S.C. § 853 to authorize the pre-trial restraint of a criminal defendant's "substitute" (or "untainted") property.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit sitting en banc held that 21 U.S.C. § 853 does not authorize the restraint of a criminal defendant's substitute property prior to trial. The court reasoned that while the Supreme Court in Luis did not overrule Fourth Circuit precedent, the Luis Court emphasized that tainted and untainted assets are treated differently under Section 853, which provided the opportunity for the Fourth Circuit to review its precedent. The Fourth Circuit reexamined its precedent and found that Section 853 permits the government to obtain a pretrial restraining order over only those assets that are directly subject to forfeiture as property traceable to a charged offense, which the court refers to as "tainted property."

Extended Summary: Section 853 is the criminal forfeiture statute which provides for the forfeiture upon conviction of property associated with a defendant's crimes. Specifically, Section 853(a) provides for the forfeiture of tainted property, which is property derived from or used to commit the offense. Section 853(p) provides for the forfeiture of substitute property upon conviction. Substitute property is property of the defendant up to the value of the tainted property, when property identified under Section 853(a) is unavailable or has diminished in value. Section 853(e)(1)(A) "authorizes district courts to enter orders or take other necessary steps 'to preserve the availability of property described in Section 853(a)'" prior to trial.

In this case, Chamberlain allegedly participated in a conspiracy to defraud the government and conspired to steal approximately $200,000 of federal funds. The district court issued an order prohibiting the defendant from selling or otherwise disposing of a necklace worth $200,000 during the pendency of the proceedings against him. The government argued that the court's restraining order was proper under the Fourth Circuit's existing rule that the government may restrain a criminal defendant's substitute property prior to trial under 21 U.S.C. § 853(e)(1)(A). The court acknowledged that Section 853(e)(1)(A) only explicitly provides for the pretrial restraint of tainted property. However, the Fourth Circuit has broadly interpreted Section (e) to permit the pretrial restraint of both tainted and untainted assets prior to trial. See, e.g., United States v. Bollin, 264 F.3d 391 (4th Cir. 2001).

In 2016, the Supreme Court decided Luis v. United States. In that case, the Supreme Court held that "the Constitution prohibits the pretrial restraint of innocently-obtained [untainted] property when it is needed by a criminal defendant to obtain counsel." The Fourth Circuit emphasized that while Luis did not directly address whether Section 853(e)(1)(A) authorizes the pre-trial restraint of substitute property, the Court in that case did indicate "a firm distinction between the government's authority to restrain tainted and untainted assets" under Section 853. Additionally, the Fourth Circuit stated that all other circuits to consider the issue have "expressly rejected the reasoning underlying [the Fourth Circuit's] interpretation of Section 853(e)." The court further emphasized that "when Congress intends to permit the government to restrain both tainted and untainted assets before trial, it has clearly provided for such authority." For those reasons, the court overruled its precedent and held that 21 U.S.C. § 853(e)(1)(A) does not permit the pretrial restraint of substitute assets. Accordingly, the Court of Appeals for the Fourth Circuit vacated the district court's order.

To read the full opinion, click here.

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

Argument Date: 01/26/2017

Date of Issued Opinion: 08/18/2017

Docket Number: 16-4313

Decided: Affirmed by published opinion.

Case Alert Author: Taylor McAuliffe, Univ. of Maryland Carey School of Law

Counsel: Elliot Sol Abrams, CHESHIRE PARKER SCHNEIDER & BRYAN, PLLC, Raleigh, North Carolina, for Appellant. Stephen Aubrey West, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee. ON BRIEF: Samuel B. Hartzell, WOMBLE CARLYLE SANDRIDGE & RICE, LLP, Raleigh, North Carolina, for Appellant. Kenneth A. Blanco, Acting Assistant Attorney General, Trevor N. McFadden, Deputy Assistant Attorney General, James I. Pearce, Criminal Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; John Stuart Bruce, United States Attorney, G. Norman Acker, III, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee. Thomas K. Maher, NORTH CAROLINA OFFICE OF INDIGENT DEFENSE SERVICES, Durham, North Carolina; Ilya Shapiro, CATO INSTITUTE, Washington, D.C.; Abbe David Lowell, Scott W. Coyle, CHADBOURNE & PARKE LLP, Washington, D.C., for Amici Curiae.

Author of Opinion: Judge Wynn

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 10/30/2017 09:22 AM     4th Circuit     Comments (0)  

  United States v. Brown -- Fourth Circuit
Walks like a Duck, Talks like a Duck? Not for Mandatory Sentencing Guidelines Challenges Under Johnson

Areas of Law: Criminal Procedure, Habeas Corpus

Areas of Law: Criminal, Post-Conviction

Issue Presented: Whether the Supreme Court's decision in Johnson v. United States, which ruled the ACCA's residual clause void for vagueness, justified a habeas challenge to a sentence imposed under the then-mandatory sentencing guidelines.

Brief Summary: Petitioner Thilo Brown filed a § 2255 motion to vacate his sentence. That sentence had been imposed in 2003 pursuant to the pre-Booker, mandatory sentencing guidelines. The guidelines Petitioner was sentenced under contained language identical to another sentencing provision the Supreme Court had declared void for vagueness in 2015. See Johnson v. United States, 153 S. Ct. 2551 (2015). Relying upon Johnson, Petitioner challenged his sentence. Addressing the threshold matter of timeliness, Petitioner argued that his claim relied on the newly-recognized right from Johnson. The United States Court of Appeals for the Fourth Circuit held that Petitioner's claim was untimely because it did not fall within the ambit of the right newly recognized in Johnson. Thus, the Fourth Circuit affirmed the United States District Court for the District of South Carolina.

Extended Summary: Petitioner Thilo Brown pleaded guilty to drug and firearm related offenses in the United States District Court for the District of South Carolina in 2003. At sentencing, the District Court designated Petitioner a "career offender" based on two prior convictions that were deemed "predicates" justifying enhanced sentencing. Petitioner did not appeal.

Twelve years after Brown's conviction and sentence, the Supreme Court of the United States analyzed the constitutionality of the Armed Career Criminal Act's ("ACCA") residual clause. Johnson v. United States, 153 S. Ct. 2551 (2015). That clause, in conjunction with other language in the Act, provided enhanced penalties for people convicted of crimes "otherwise involv[ing] conduct that presents a serious potential risk of physical injury to another." Though Brown was not sentenced under the ACCA, the language of the ACCA's residual clause was identical to the language in the mandatory guidelines that had been used to define Petitioner's relevant "predicates," and thus subject Petitioner to enhanced punishment.

Petitioner filed a § 2255 motion to vacate his sentence. Petitioner, through his motion, argued that he was improperly sentenced as a career offender because Johnson invalidated not only the ACCA's residual clause, but also like-worded sentencing clauses. The District Court denied Petitioner's motion with prejudice and declined to issue a certificate of appealability. The Fourth Circuit granted petitioner's certificate of appealability to decide whether, in light of Johnson, Petitioner was properly designated a "career offender."

As a threshold matter, the Fourth Circuit analyzed whether Petitioner's motion was timely. The court explained that the Antiterrorism and Effective Death Penalty Act of 1996 ("AEDPA") generally imposes a one-year period for filing a § 2255 motion after a federal inmate's conviction has become final. Courts may, however, consider a § 2255 motion filed outside of that one year period if the motion is filed within one year of the Supreme Court recognizing a new right that applies to the inmate. Petitioner argued that his motion was timely filed because the Johnson decision recognized a new right that applied to him. Acknowledging that Johnson technically referenced only the ACCA, Petitioner argued that its holding applied to him because 1) Johnson recognized a defendant's due process right to be free from arbitrary sentencing provisions, 2) the Supreme Court had distinguished mandatory and advisory sentencing guidelines in United States v. Booker, 543 U.S. 220 (2005), and 3) Beckles v. United States, 137 U.S. 886 (2017), which rejected the application of Johnson to sentences imposed under advisory guidelines, left sentences imposed under the mandatory sentencing guidelines open to challenge.

The Fourth Circuit rejected Petitioner's contention. Constrained by AEDPA's language, the court explained that a right could not be newly recognized as applying to a litigant if the right could only be said to leave the litigant's claim open. Additionally, looking to Beckles, the Fourth Circuit reasoned that "quacking like the ACCA" is not enough to bring a challenge within the purview of the right recognized by Johnson." In Johnson, according to the Fourth Circuit, the Supreme Court only rendered the ACCA's residual clause unconstitutionally vague - it did not opine on similar language in the mandatory sentencing guidelines. Thus, the Fourth Circuit concluded that the Supreme Court has not recognized Petitioner's claimed right. The court held that Petitioner's claim was therefore untimely, and affirmed the District Court's ruling.

Chief Judge Gregory, in his dissent, explained that the Fourth Circuit should not have constrained itself to the four corners of the Supreme Court's Johnson opinion. Rather, in Chief Judge Gregory's view, the court should have understood the right in Johnson to include the reasoning and principles that explain it. According to the Chief Judge, the fact that the clause Petitioner challenged was derived from the mandatory sentencing guidelines rather than the ACCA was a distinction without a difference. He concluded that Petitioner's claim was timely because Petitioner asserted the right newly recognized in Johnson.

To read the full opinion, click here.

Panel: Chief Judge Gregory, and Judges Duncan and Diaz

Argument Date: 05/11/2017

Date of Issued Opinion: 09/21/2017

Docket Number: No. 16-7056

Decided: Affirmed by published opinion.

Case Alert Author: Ashley Fellona, Univ. of Maryland Carey School of Law

Counsel: Alicia Vachira Penn, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Charleston, South Carolina, for Appellant. William Camden Lewis, OFFICE OF THE UNITED STATES ATTORNEY, Columbia, South Carolina, for Appellee. ON BRIEF: Beth Drake, United States Attorney, Columbia, South Carolina, Marshall Taylor Austin, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Charleston, South Carolina, for Appellee.

Author of Opinion: Judge Duncan

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 10/30/2017 09:14 AM     4th Circuit     Comments (0)  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Argument Date: July 12, 2017

Date of Issued Opinion: August 16, 2017

Docket Number: 17-15909

Decided: Affirmed

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

Author of Opinion: Circuit Judge Graber

Circuit: Ninth

Case Alert Author: Erik Wu

Case Alert Supervisor: Philip L. Merkel

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

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

Areas of Law: Employment Law; Civil Procedure

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

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

Significance: This case clarifies the meaning and application of California's day of rest law. It also reveals that a district court does not abuse its discretion in denying a request to add substitute representatives in a PAGA action when the proposed subst