Decided: December 31, 2012
The Fourth Circuit Court of Appeals affirmed the ruling of the district court in denying Fugit’s motion under 28 U.S.C. § 2255 to vacate, set aside, or correct his sentence. Fugit plead guilty to enticing or attempting to entice a minor to engage in illegal sexual activity.
Mr. Fugit on two separate occasions posed as “Kimberly” on an online chat website and held conversations with girls aged eleven and ten. During both of these conversations with the two minors, he engaged in inappropriate sexual conversation. During a search of Mr. Fugit’s home, police discovered that he sent child pornography over e-mail and attempted to contact children through his computer and telephone. Fugit admitted the facts contained in the pre-sentence report (PSR). On December 19, 2007, Fugit was sentenced to 310 months of imprisonment. On October 1, 2009, Fugit filed a motion for post-conviction relief. The district court denied the motion in its entirety. Two issues were heard on appeal. The first was “whether Fugit’s stipulated conduct constituted attempted inducement of ‘sexual activity’ of a minor within the meaning of 18 U.S.C. § 2422(b),” and the second issue was “whether Fugit’s counsel rendered ineffective assistance by advising him to stipulate to the inducement of ‘sexual activity’ and guilt under 18 U.S.C. § 2422(b).”
During appeal the government argued that the doctrine of procedural default barred Fugit’s claim because he failed to raise it during his initial plea proceedings or on direct appeal. There are two circumstances in which a procedural default may be excused. The first instance is one in which actual innocence can be proven. The second is an establishment of cause for the default and prejudice resulting therefrom. The court found that Fugit’s actual innocence claim failed because he could not prove that “it is more likely than not that no reasonable juror would have convicted him.” The court determined that it need not consider Fugit’s ineffective assistance argument because his statutory claim failed on the merits.
Decided: December 31, 2012
The Fourth Circuit held that the felon-in-possession prohibition for felons in 18 U.S.C. § 922(g)(1) does not violate the Constitution, even for non-violent felons such as Pruess.
Pruess has been convicted of numerous firearm related offenses. In 1994, Pruess was charged with twelve firearms offenses, and eventually plead guilty to one charge for which he received twelve months imprisonment. Soon after his release, Pruess returned to arms dealing despite his status as a convicted felon. Pruess was then caught selling weapons, including stolen weapons, to undercover agents and a cooperating witness. Pruess pled guilty to eighteen counts of firearm violations. In 1999, shortly before sentencing, Pruess ordered a pistol online using an altered firearms license. After his release from prison, Pruess sought to purchase ammunition, grenades, and flares from a confidential informant, knowing they were likely stolen. Pruess entered a conditional guilty plea but reserved the right to appeal.
Pruess argued that the felon-in-possession statute as to non-violent felons violated the Second and Fifth Amendments of the Constitution. The Second Amendment “confers a right to keep and bear arms typically possessed by law-abiding citizens for lawful purposes.” There are two steps to a Second Amendment challenge. First, one must determine whether the challenged law imposes a burden on conduct falling within the scope of the Second Amendment’s guarantee. If not, there is no violation. If so, the second step of the framework is to determine whether the law meets an appropriate form of “means-end scrutiny.” In this case, Pruess does not meet the first step. Pruess is not protected by the Second Amendment because his twenty prior convictions, repeated violations, and knowledge that the ammunition was likely stolen shows that Pruess is not a law-abiding responsible citizen. Furthermore, Pruess was not acquiring the ammunition for “defense of hearth and home.” Pruess’ second argument is that §922(g)(1), as applied, violates the Fifth Amendment Equal Protection guarantee in that it denies him an alleged fundamental right to bear arms. As Pruess was a felon-in-possession, he had no right to bear arms and thus the court applies rational basis. “There is a rational relation between the felon-in-possession prohibition as applied to a collector of dangerous, often stolen weapons and explosives who has repeatedly and fragrantly ignored the laws of the United States, like Pruess, and the legitimate government interest in public safety.” Therefore, Pruess’ equal protection challenge also fails.
Decided on: December 31, 2012
Lawing was convicted of possession of ammunition by a convicted felon in violation of 18 U.S.C. §§ 922(g)(1) and 924(a)(2). On appeal, Lawing argued that the district court committed reversible error by denying his motions to suppress evidence and to dismiss the charges or, in the alternative, that his sentence was procedurally unreasonable. The Fourth Circuit held that the district court did not commit any reversible error and that Lawing’s sentence was reasonable.
A confidential informant told police that Lawing dealt crack cocaine, leading to a police stop that revealed a sawed-off shotgun and ammunition. Lawing moved to suppress the evidence seized during the stop, but the district court denied the motion on the basis that the government established compliance with the Fourth and Fourteenth Amendments. At the close of the government’s case, Lawing moved to dismiss the charges based on insufficiency of the evidence, but the district court denied the motion. The jury ultimately returned a verdict on one of three counts—possession of ammunition by a convicted felon in violation of §§ 922(g)(1) and 924(a)(2). The Presentence Report calculated Lawing’s base offense level to be 26 with a criminal history category of IV, for a Guidelines range of 92 to 105 months imprisonment. Lawing objected to the calculation of his base offense level, but the district court adopted the PSR’s recommendations and sentenced Lawing to 100 months imprisonment.
On appeal, Lawing first argued that the district court erred by denying his motion to suppress and his motions to dismiss the charges. The Fourth Circuit held that the district court did not err in denying Lawing’s motion to suppress because the stop and search of the car driven by Lawing comported with the requirements of the Fourth and Fourteenth Amendments: the police had reasonable suspicion to stop the car, officers’ possession of Lawing’s cell phone did not amount to a search or an unjustified seizure because the sole purpose of possession was to confirm Lawing’s identify, and the police were warranted in believing that contraband or evidence of a crime would be found in the vehicle. As to Lawing’s motions to dismiss the charges, the court held that the district court properly denied the motions “because the government put forth sufficient evidence upon which the jury could conclude that Lawing constructively possessed the ammunition,” which is enough to find a violation of § 932(g)(1). Finally, Lawing argued his sentence was procedurally unreasonable because the district court abused its discretion in finding that Lawing possessed a sawed-off shotgun and, as such, the district court used an incorrect base offense level in calculating his sentence. The district court’s factual determination is reviewed for clear error. In this case, the district court did not commit clear error because the evidence presented at trial established Lawing’s constructive possession of the firearm. The Fourth Circuit concluded that the district court did not abuse its discretion and affirmed the judgment.
Decided: December 31, 2012
The Fourth Circuit Court of Appeals affirmed the district court’s dismissal of the plaintiff’s complaint based on a lack of standing. The plaintiffs are individuals and an organization called the Second Amendment Foundation (SAF) who filed a pre-enforcement challenge to the constitutionality of a federal statute restricting interstate transfers of handguns, 18 U.S.C. § 922(b)(3); a federal regulation implementing that statute; and a Virginia law prohibiting Virginia firearms dealers from selling handguns to non-residents of Virginia. The district court and the Fourth Circuit concluded that the injuries complained of by the plaintiffs are caused by third parties rather than the application of the laws and, therefore, they lack standing.
The relevant statute allows that a buyer may purchase a handgun from an out-of-state source, but that source must be a federal firearms licensee (FFL), and the buyer must arrange for the handgun to be delivered to an in-state FFL, from whom the buyer must retrieve the gun. FFLs may also sell or deliver a rifle or shotgun to an out-of-state resident if the transferee meets in person with the FFL in the state where she wishes to buy the firearm and if the transfer complies with the laws of the transferee’s and transferor’s states. Virginia’s statute also prohibits the direct sale or transfer of a handgun to a non-resident. Lane and the Wellings are residents of Washington, D.C. who wish to acquire handguns from other states. SAF is a non-profit organization whose purpose includes promoting the exercise of the right to keep and bear arms. SAF contends that the challenged laws have caused it to spend resources in response.
The individual plaintiffs assert that the laws result in a restriction on the range of retailers available to consumers of constitutionally-protected articles. However, the Fourth Circuit held that they did not have standing because the laws do not burden the plaintiffs directly and do not actually prevent them from acquiring the handguns they desire. Further, even if the plaintiffs could allege an injury in fact, it must be traceable to the defendant’s conduct. Here, the injury the plaintiffs complain of is caused by decisions and actions of third parties. Finally, the Fourth Circuit held that SAF did not have standing because the injury complained of results from the organization’s own budgetary choices, not any actions taken by the defendant.
-Jennifer B. Routh
Decided: December 28, 2012
Gary Lee Gillion was convicted of four counts of mail fraud and one count of conspiring to commit mail fraud. Gillion appealed his convictions alleging that the district court erred in admitting statements he made pursuant to a pre-indictment proffer agreement, and that his mail fraud convictions were not supported by sufficient evidence.
Pursuant to the terms of a pre-indictment proffer agreement, the government asked Gillion to take a polygraph test before trial. Gillion argued that the proffer agreement terminated upon his indictment, but the district court held that proffer agreement remained in effect post-indictment, thus allowing the government to ask Gillion to sit for a polygraph examination pursuant to the terms of the agreement. At his trial, the district court allowed the government to admit statements from the polygraph test into evidence. On appeal, Gillion contended that the district court erred in admitting these statements.
The appellate court held that since a proffer agreement operates like a contract, the court should interpret the agreement based on its express terms. Nothing in the agreement indicated that it terminated upon indictment or that the polygraph had to be taken pre-indictment. As such, the district court did not err in requiring Gillion to adhere to the agreement. Furthermore, the court of appeals found that even if the district court erred in requiring Gillion to take the polygraph test pursuant to the agreement, the admission of the proffered statements was harmless since the statements involved facts proven by the government through other evidence.
On appeal, Gillion also raised multiple challenges to the sufficiency of the evidence presented to prove mail fraud. Specifically, Gillion contended that the government failed to establish three necessary elements of mail fraud under 18 U.S.C. § 1341: (1) that his employer, the victim of the mail fraud scheme, had a property interest in the property obtained through the scheme, (2) that the payments resulting from the scheme were obtained by means of material false or fraudulent pretenses, and (3) that the mailings involved in the scheme were “for the purpose of executing or attempting to execute the scheme to defraud.” The court of appeals disagreed and found that the government presented sufficient evidence as to all three factors, and affirmed the mail fraud convictions.
In summary, the court of appeals affirmed the district court’s judgment, finding that if the district court erred in admitting the statements Gillion made pursuant to the proffer agreement it was harmless error, and that the government presented sufficient evidence to support Gillion’s mail fraud convictions.
– Kassandra Moore
Decided: December 28, 2012
This matter arose out of an action brought by the trustee in bankruptcy of Beach First National Bancshares, Inc. (the “Trustee” and “Bancshares,” respectively) against the former directors and officers of Bancshares (the “Directors”), who also all formerly served as the officers and directors of Bancshares’ wholly owned subsidiary, First National Bank of Myrtle Beach, SC (the “Bank”). After the U.S. Office of the Comptroller of Currency (the “OCC”) closed the Bank in 2010 and named the Federal Deposit Insurance Corporation (the “FDIC”) as the Bank’s receiver and liquidated all of the Bank’s assets, Bancshares filed for bankruptcy under Chapter 7. The Trustee subsequently filed claims against the Directors for breach of fiduciary duty and negligence in their capacity as the officers and directors of Bancshares. The District Court for the District of South Carolina determined that the Trustee lacked standing to bring this action and granted the Directors’ motion to dismiss. The Trustee then appealed to the Fourth Circuit.
On appeal, the Fourth Circuit applied South Carolina law to address the Trustee’s claims supporting her argument that the district court erred in granting the Directors’ motion to dismiss. The Trustee first argued “that she did not plead derivative claims against the Directors, but instead asserted direct claims that do not fall within the purview of the FDIC.” After initially recognizing that “[a] trustee in bankruptcy succeeds to all rights of the debtor, including the right to assert any causes of action belonging to the debtor,” the court determined that the “Trustee has the authority to assert any cause of action that Bancshares could have brought in its own right,” including “the right to assert derivatives claims of Bancshares (as the Bank’s sole shareholder) against the Directors in their capacity as officers and directors of the Bank.” However, because the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) provides that “the FDIC, when appointed receiver of a bank, succeeds to ‘all rights, titles, powers, and privileges of the insured depository institution, and of any stockholder … of such institution …,” and because the court determined that “[t]he actual basis of liability the Trustee pled against the Directors … flows only from the duties the Directors may have violated in their operation and management of the Bank,” it found that “the Trustee has not pled a harm or an act that occurred at the Bancshares (parent) level that did not simultaneously and primarily occur at the Bank (subsidiary) level.” Therefore, the court determined that “the Trustee has pled mainly claims deriving from defalcations at the Bank level, not a distinct and separate harm specific to Bancshares at the holding company level,” and as such “the Trustee lacked standing to pursue the derivative claims under FIRREA as the right to pursue such claims belongs to the FDIC.”
After rejecting the Trustee’s first argument on appeal, the court turned to the Trustee’s contention that “she ha[d] pled three particular acts by the Directors that caused distinct harm to Bancshares and that are sufficiently distinct from acts at the Bank level to be direct claims not within the ambit of the FDIC through FIRREA.” The court rejected the Trustee’s first two claims that the “Directors breached a duty owed to Bancshares by appointing unqualified directors to the Bank’s board” and that “the Directors caused Bancshares to guarantee the Bank’s restoration plan while simultaneously failing to ensure that the Bank complied with OCC requirements” based on its determination that the Trustee lacked standing to bring these two claims. With respect to the first claim, the court determined that any injury resulting from “the appointment of unqualified directors to the Bank’s board … primarily occurred to the Bank,” and as such the Trustee’s claim “[was] essentially a derivative claim that the Trustee lack[ed] standing to raise.” As to the Trustee’s second claim, the court conceded that it could “envision circumstances where directors or officers could be liable in a direct claim for inappropriately causing the parent holding company to guarantee the debt of a subsidiary (like the Bank),” but it concluded that the Trustee “fail[ed] to plead the causal connection between the act of making the gauranty to ‘damages unique to’ Bancshares.” Therefore, the court determined that the Trustee’s second claim was a “derivative claim of harm at the Bank level that the Trustee lack[ed] standing to bring.”
As to the Trustee’s third claim “that the Directors caused Bancshares to improperly subordinate its equity interest in the LLC that owned real property,” the court found that “[t]his particular act does indeed support a direct claim against the Directors, and the district court erred in granting the motion to dismiss as to that claim.” The court determined that the Trustee “adequately [pled] direct harm to Bancshares unrelated to any defalcation at the Bank level,” and therefore, unlike the first two claims, this claim was not a derivative action and the Trustee could proceed with the claim in the district court.
Finally, the court considered the Trustee’s argument that “even if any or all of her claims are derivative, the statutory rights of the FDIC under FIRREA do not deprive her of standing against the Directors under the facts of this case.” The Trustee argued that because the FDIC declined to take any civil action against the Directors, she “ha[d] full authority to proceed against the Directors on all derivative claims.” The court rejected this argument, finding “no direct statutory authority [under FIRREA] by which the FDIC may transfer to another party its exclusive statutory rights.” Additionally, the court noted that the Trustee presented no cases supporting her purported authority. Finally, the court rejected the Trustee’s argument that a FDIC letter, which stated that the FDIC would not recommend that any claim be pursued against the directors or officers of Bancshares, served as proof that the FDIC had “defer[red] to her pursuit of the claims against the directors.” The court found that “even if the FDIC had the authority to transfer its statutory rights to another party, the FDIC letter at issue [could not] properly be read to do any such thing.”
Based on the above, the court held “that the Trustee may pursue her claims only as to the Directors’ alleged improper subordination of Bancshares’ LLC interest,” and reversed and remanded the district court’s judgment as to that particular claim but affirmed its judgment in all other respects.
– Allison Hite
Decided: December 26, 2012
In this case, the Fourth Circuit considered whether a federal statute, the National Bank Act (“NBA”), preempted a Maryland law, the Credit Grantor Closed End Provisions (“CLEC”), with respect to a debt cancellation provision in a retail installment contract.
The plaintiff and a local car dealer entered into this retail installment contract for the purchase of a used motor vehicle. Pursuant to the contract, the purchase price would be financed by the dealer, and it would be subject to a bargained-for debt cancellation agreement. This agreement, in turn, provided that in the event that the car was totaled a portion of the remaining debt would be cancelled. After the plaintiff purchased the car, the dealer negotiated the retail installment contract to Capitol One, N.A., a national bank regulated by federal banking laws. When the car was later totaled, and the insurance proceeds were insufficient to cover the total amount outstanding on the loan, the Capital One demanded that the plaintiff make payment to satisfy the remaining loan balance. In response, the plaintiff filed suit against both the national bank and the local dealer, claiming breach of contract and a violation of the CLEC.
Under Maryland state law, to be proper, a debt cancellation agreement must cancel all of the remaining debt on a contract when insurance proceeds do not cover the outstanding balance of the loan. In contrast, federal regulations promulgated under the NBA provide only that a debt cancellation agreement must cancel a portion of the remaining debt. The Fourth Circuit thus had to determine whether the retail installment contract, sought to be enforced by the national bank, was governed by Maryland law or if that law had been preempted by federal law. According to the court, the relevant federal regulations explicitly governed debt cancellation agreements entered into by a national bank. Here, the credit was extended by a local lender and only later was the loan assigned to the national bank. And because the “[fe]deral regulations of national banks do not encompass such a situation” and because “Congress had not occupied the field with regard to debt cancellation agreements, the Maryland law was neither expressly preempted nor field preempted by federal law. Thus, the court held that the plaintiff had properly stated a claim for breach of contract on the basis of Capital One’s refusing to abide by the terms of the CLEC under Maryland law.
-John C. Bruton, III
Decided: December 21, 2012
The Fourth Circuit Court of Appeals affirmed the district court’s ruling that regulatory action by the Department of Labor (“the Department”), which suspended some regulations and reinstated others regarding temporary agricultural workers, was rule making under the Administrative Procedures Act (“APA”). Furthermore, the Department failed to comply with the APA’s “notice and comment” requirement.
The Department of Labor promulgated regulations in 1987 in order to effectuate Congressional intent under the Immigration Control and Reform Act to give preference to domestic agricultural workers over foreign agricultural workers, known as H2-A workers. These regulations set up procedures for hiring H2-A workers, which included a formula for paying the workers known as the “adverse effect wage rate” (AEWR). The AEWRs provide for a minimum hourly wage rate for H2-A workers and ensure that H2-A wages do not have an adverse effect on domestic agricultural wages. In 2008, the Department passed new regulations which changed the way AEWRs are calculated. It is not disputed that the 2008 regulations were validly promulgated. Many agricultural employers relied on the 2008 regulations when planning for the 2009 growing season. In 2009, the new Secretary of the Department sought to suspend the 2008 regulations for numerous reasons, mainly dealing with the complexity of a new regulatory scheme and the economic impact of the new regulations. The proposed suspension would reinstate the 1987 regulations and would allow for those that filed under the 2008 regulations to continue to employ that scheme. The suspension would only be in effect for a nine month period. In May of 2009, the Department published a final rule suspending the 2008 regulations. In June, 2009, the N.C. Growers Association (NCGA) and other similar organizations filed suit seeking an injunction. The district court granted summary judgment and a preliminary injunction on the basis that the 2009 suspension violated the APA. The United Farm Workers’ and other farm labor unions (Farm Workers) intervened and filed a counter-claim, seeking the difference in wage rates between the 1987 and the 2008 regulations. The district court, based on the fact that the 2009 suspension was arbitrary and capricious, dismissed the Farm Worker’s suit with prejudice. This appeal followed.
The Fourth Circuit agreed, stating that while review of agency decisions is narrow, courts must be strict in reviewing an agency’s compliance with procedural rules. If the agency action consists of “rule-making” as defined in the APA, the Department would be required to comply with a “notice and comment” period before promulgating a rule. The Court first said that the 2009 suspension constituted “rule-making” because the 1987 regulations had no legal effect at the time, and reinstatement of them was equivalent to formulating a new rule. Furthermore, this suspension was not similar to previous precedent because in those instances, Congress caused the suspension of the regulation and the APA’s focus on notice and comment is not affected when Congress compels agency action. In addition, the Department cannot rely on the good cause exception to the APA notice requirement because the Department did not implicitly or explicitly rely on the exception in its proposed rule. Instead, the Department concluded that notice and comment did apply and that the Department had complied with the requirements by republishing the previous comments to the 1987 and 2008 regulations. Finally, the Departments restriction of content and brief 10-day comment period did not fully comply with the APA requirements.
-Jonathan M. Riddle
Decided: December 19, 2012
On appeal, Carter Tillery challenged his convictions for a “Hobbs Act” robbery in violation of 18 U.S.C.§1951(a) and for using, carrying, and brandishing a firearm during a violent crime in violation of 18 U.S.C. § 924(c)(1)(A)(ii). Tillery also challenged his sentence of 360 months’ imprisonment, arguing that he was incorrectly sentenced as a “career offender.” The Court of Appeals affirmed both Tillery’s convictions and sentence.
On August 1, 2009, an unmasked man robbed the Petersburg, Virginia branch of the Swan Dry Cleaners (the “Cleaners”) at gunpoint. The robber stole a personal computer from an employee and emptied $40-$100 from the cash register. The robber then tied the employee up in the back of the store. After a few minutes, the robber then went to the front of the store and returned to the back wearing a ski mask. Finally, the robber fled the store after telling the employee to count to 100 before calling the police. A few weeks after the robbery, a man sold a personal computer for $150 to the owner of a barbershop located next to the Cleaners. The police discovered that the computer sold at the barbershop was the same one stolen from the Cleaners’ employee. The police then showed the Cleaners’ employee photographs of potential suspects, and the employee identified Tillery as the robber. In June 2010, while incarcerated for unrelated charges, Tillery confessed to his cellmate that he had committed the Cleaners robbery and had later sold the laptop at the barbershop. Tillery also told his cellmate that he had used a sawed-off shotgun in the robbery. Based on this information, a grand jury indicted Tillery on two counts: (1) a Hobbs Act robbery affecting interstate commerce in violation of 18 U.S.C. § 1951(a); and (2) using, carrying, and possessing a firearm in relation to a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A)(ii). A jury convicted Tillery of both crimes, and he was sentenced to a total of 360 months’ imprisonment. Tillery then filed a timely appeal challenging his convictions and sentence.
The court first explained that a robbery must have a “minimal effect” on interstate commerce to violate the Hobbs Act. Tilley argued that his robbery did not have a “minimal effect” on interstate commerce because he only stole $40-$100. The court rejected this argument and explained that a robbery has a “minimal effect” on interstate commerce when it depletes the assets of an “inherently economic enterprise.” The court found that the Cleaners was an “inherently economic enterprise” because it was a part of a larger network of dry cleaners that depended on out-of-state purchases to fund its business. Thus, since the Cleaners was an “inherently economic enterprise,” the court held that Tillery violated the Hobbs Act by taking $40-$100.
Finally, Tillery argued that he was improperly sentenced as a “career offender” under the United States Sentencing Commission Guidelines § 4B1.1(a). Under §4B1.1(a), a defendant is a “career offender” if, among other things, he has at least two prior felony convictions for “violent crimes.” The district court found that Tillery’s conviction of eluding police constituted a violent crime, but Tillery argued on appeal that eluding police does not constitute a violent crime. The court rejected Tillery’s argument and explained its decision U.S. v. Hudson clearly stated that vehicular flight in any manner constitutes a violent crime. The court noted that the risk of violence is inherent to any vehicular flight from police. Therefore, the court upheld Tillery’s sentence.
Decided: December 19, 2012
The Fourth Circuit Court of Appeals affirmed the judgment of the district court and dismissed Mrs. Butler’s action for wrongful death and loss of consortium under the Federal Tort Claims Act (“FTCA”).
On January 29, 2004 Mr. Butler, a veteran, was examined by a physician at a VA center in Durham, North Carolina. It was discovered that Mr. Butler would need to undergo surgery for a vascular condition. After surgery Mr. Butler was paralyzed from the chest down, and his left leg was later amputated. On March 15, 2005, Mr. Butler died from sepsis. In April of 2005, Mrs. Butler filed a claim for dependency and indemnity compensation benefits with the VA. The VA later decided that Mrs. Butler was entitled to an award of benefits. In June of 2010, Mrs. Butler filed a complaint under the FTCA alleging wrongful death and loss of consortium. Mrs. Butler did not present an expert witness at trial because she believed this to be unnecessary given the binding effects of the VA’s Rating Decision on the district court. The district court granted summary judgment to the Government because under North Carolina law an expert witness is necessary to establish the standard of care in a medical malpractice action.
On appeal Mrs. Butler argued that the findings in the VA’s Rating Decision established all of the necessary elements to prove negligence and causation against the Government. Mrs. Butler relied on 38 U.S.C. § 511 and contended that the language should be construed as a bar to any court to reach a conclusion contrary to the Rating Decision. The Ninth Circuit decided a case similar to the one at issue here. It decided that FTCA liability was not established by a VA’s Rating Decision. The Fourth Circuit adopts the Ninth Circuit’s holding that the “questions” of law and fact to be given conclusive effect under § 511(a), and to be subject to no further review by a court, are only those which would affect the provision of the benefits awarded by the VA. Since adjudication of Mrs. Butler’s FTCA claim would not affect the validity of her VA benefits award, the court of appeals concluded that the district court did not err in its decision.
Decided: December 18, 2012
The Fourth Circuit affirmed Ayesh’s convictions of two counts of theft of public money in violation of 18 U.S.C. § 641 and one count of committing acts affecting a personal financing interest in violation of 18 U.S.C. § 208(a). Ayesh challenged the district court’s extraterritorial jurisdiction over him, denial of his motion to suppress post-arrest statements, and the sufficiency of the evidence to sustain his convictions.
Ayesh, a resident of Jordan, was hired by the U.S. Department of State to work as the shipping and custom supervisor of the U.S. Embassy in Baghdad, Iraq. While working there, Ayesh devised a scheme to divert United States funds to his wife’s bank account in Jordan. U.S. officials suspected Ayesh’s wrongdoing and arranged for him to come to the United States on the pretext of attending a training seminar. Ayesh was then arrested at Dulles International Airport and questioned by FBI agents. After about five hours of questioning, Ayesh confessed.
The Fourth Circuit found no error with the extraterritorial jurisdiction exercised over Ayesh. Congressional intent to exercise overseas jurisdiction can be inferred from the nature of the offenses criminalized by 18 U.S.C. §§ 208(a) and 641. The extraterritorial application of these statutes also comported with international law and due process. The Fourth Circuit upheld the district court’s denial of Ayesh’s motion to suppress his post-arrest statements. While Ayesh claimed his statements were involuntary or coerced after traveling for nineteen hours without sleep or food, the Fourth Circuit found that Ayesh was offered food which he refused, signed his rights away, and never appeared to be or stated that he was tired, confused, or not thinking clearly. Under the totality of the circumstances, the Fourth Circuit found that Ayesh’s statements were freely and voluntarily given. The Fourth Circuit also rejected Ayesh’s claim that there was insufficient evidence to sustain his convictions. Ayesh challenged his conviction of theft of public money because the government actually received the specified goods and services. However, this does not negate Ayesh’s criminal intent to deprive the United States of the use or benefit of the money.
Decided: December 17, 2012
Kristen Deanna Smith appealed her conviction by a jury of involuntary manslaughter, arguing that the district court committed three reversible errors. The Fourth Circuit held that the district court did not commit reversible error and that sufficient evidence supported the jury’s verdict and accordingly affirmed Smith’s conviction.
In 2009, Smith’s car crossed the median of a highway, flipped several times, and finally crashed into a stone wall. Emergency medical technicians pronounced Smith’s passenger dead at the scene and transported Smith to the hospital, which administered a blood test. An officer monitoring Smith at the hospital testified that she made unsolicited statements, including: “Don’t ever drink and drive,” “I just hope he’s okay,” and “Lock me up and throw away the key.” Another blood draw conducted the next morning revealed that Smith had a blood alcohol content of .09. The government charged Smith with “homicide during the commission of an unlawful act not amounting to a felony,” in violation of 18 U.S.C. § 1112(a); the underlying unlawful act, 34 C.F.R. § 4.23(a)(2), prohibits operating or controlling a vehicle with a blood alcohol content of .08 or greater. A jury convicted Smith of involuntary manslaughter and Smith appealed.
On appeal, Smith argued that the district court improperly admitted expert testimony about alcohol metabolization. The Fourth Circuit found that the prosecution’s summary of anticipated expert testimony, required to be delivered upon the defense’s request pursuant to Federal Rule of Criminal Procedure 16(a)(1)(G), was “less than fulsome,” but found that any error was harmless, as Smith failed to show prejudice. Next, Smith argued that the district court erred in failing to give a judgment of acquittal, because the government did not prove beyond a reasonable doubt that her blood alcohol level at the time of the accident exceeded .08. Interpretation of § 4.23(a)(2) varies; some courts require the government “directly prove a defendant’s blood alcohol content at the time he or she was driving,” while others hold it is sufficient to “produce evidence of blood alcohol levels within a reasonable time after driving.” The Fourth Circuit held that, based on all of the evidence, the government established a per se violation of § 4.23(a)(2), and thus concluded that Smith was not entitled to a judgment of acquittal. Finally, Smith argued that the district court’s refusal “to give her requested jury instruction concerning blood alcohol level extrapolation” amounted to error. Failure to give requested jury instructions is reviewed for abuse of discretion and constitutes a basis for reversal “only when the rejected instruction ‘(1) was correct; (2) was not substantially covered by the court’s charge to the jury; and (3) dealt with [an integral part of the trial], that failure to give the requested instruction seriously impaired the defendant’s ability to conduct his defense.’” United States v. Passaro, 577 F.3d 207, 211 (4th Cir. 2009). The Fourth Circuit held that the district court did not abuse its discretion because Smith’s proposed instruction “was not necessarily correct and…was ‘substantially covered by the court’s charge to the jury.’” The Fourth Circuit affirmed the district court’s judgment.
Decided: December 17, 2012
This case is arises from the Duke lacrosse scandal involving false rape charges made against members of the 2005-2006 lacrosse team. Three groups of plaintiffs brought suit against the City of Durham alleging various causes of action stemming from the alleged mishandling of the rape charges; the City and its officials asserted various immunities from suit and moved to dismiss or for summary judgment as to all claims asserted against them. The district court granted those motions in part and denied in part; the Fourth Circuit Court of Appeals affirmed in part, dismissed in part, reversed in part, and remanded for further proceedings.
On March 13-14, 2006, many members of the Duke lacrosse team attended a party at the home of team member David Evans, Daniel Flannery, and Matthew Zach. One of the hosts hired two exotic dancers who performed from 12 a.m. until 12:04 a.m. One of the dancers, Mangum, claimed that she had been raped by as many as five men after performing at a bachelor party. Over the course of the evening and over the next several days, Mangum provided many inconsistent versions of her alleged rape. Despite a lack of credible evidence, the investigation was continued by City of Durham Officers Gottlieb and Himan. When District Attorney Michael Nifong took over the case, and directed Gottlieb and Himan in the investigation, Nifong realized the weakness of the case and responded, “You know, we’re f*cked.” However, the investigation continued. Nifong pursued and obtained indictments against Collin Finnerty and Reade Seligmann for first-degree rape, first-degree sex offense, and kidnapping. Nifong intentionally misstated and misrepresented material facts related to the investigation; Nifong was later disbarred for his conduct during the Mangum investigation and prosecution. A fuller account of the facts and timeline related to this investigation are available in the full opinion.
One group of plaintiffs asserted a malicious prosecution claim against Officers Gottlieb and Himan; the district court denied the officers’ motions to dismiss because the plaintiffs were arrested pursuant to an indictment obtained by the intentional or reckless creation of false or misleading evidence used before the grand jury that was necessary to a finding of probable cause. The Fourth Circuit held that an independent act of a prosecutor or grand jury can break the causal chain and the fact that the prosecutor misled the grand jury does not render police officer liable. Alternatively, the plaintiffs argued that the officers conspired with Nifong to conceal and fabricate evidence, and they unduly pressured Nifong to seek the indictment. However, the Fourth Circuit rejected this theory on the basis that it is contrary to the purpose of qualified immunity that police officers could be held liable for working with a prosecutor on an investigation. The court held that “a prosecutor’s independent decision to seek an indictment breaks the causal chain unless the officer has misled or unduly pressured the prosecutor.” The court reversed the district court’s denial of the officers’ motions to dismiss the malicious prosecution claims against them.
The other two groups of plaintiffs alleged § 1983 claims against the officers based on asserted unlawful seizures of evidence pursuant to a state non-testimonial order (NTO). The plaintiffs claimed that the NTO flowed from dishonest conduct by the officers in their supporting affidavits. The district court denied the officers’ motion to dismiss these claims. The Fourth Circuit reversed the dismissal because even with false statements in their affidavits the plaintiffs could not demonstrate that the statements were material or necessary to the authorization of the search. Ryan McFayden individually also asserted a § 1983 claim for the allegedly unlawful search and seizure of his apartment and car. However, his individual claim failed as well because the affidavit, without the false statements, still provided adequate support for the search warrant.
Based on the § 1983 claims, the plaintiffs asserted supervisory liability against City supervisory officials. The district court denied the City and its officials’ motions to dismiss these claims. The Fourth Circuit reversed the district court. The claims require a predicate constitutional violation and because the court held that the plaintiffs failed to state §1983 claims they also failed to state supervisory liability claims.
The plaintiffs also asserted state common-law tort claims against the City. The City moved for summary judgment on the basis of governmental immunity, and the district court denied the motion for summary judgment. The plaintiffs argued that there was a genuine issue of material fact regarding whether the City had waived its immunity by purchasing liability insurance, but the Fourth Circuit disagreed and reversed the district court’s denial of the motion for summary judgment.
The plaintiffs asserted state common-law tort claims against the police officers. The district court denied the motion to dismiss a claim for malicious prosecution brought against Officers Himan and Gottlieb, but granted a motion to dismiss brought against another officer named Addison. The Fourth Circuit reversed the district court’s judgment regarding Officer Addison and affirmed the court’s judgment regarding Officers Himan and Gottlieb concluding the plaintiffs had stated a claim for malicious prosecution.
The Fourth Circuit reversed the district court’s denial of the officers’ motion to dismiss a common-law obstruction of justice claim because there is no precedent recognizing an obstruction of justice claim against a police officer for his actions relating to a criminal proceeding. Finally, the City asked the Fourth Circuit to exercise pendant appellate jurisdiction over the district court’s denial of the City’s motions to dismiss all three sets of plaintiffs’ state constitutional claims. However, the Fourth Circuit held that neither rationale required for pendant appellate jurisdiction was present and declined to exercise jurisdiction.
Judge Wilkinson wrote separately to concur and emphasize his concern about the overreach of the plaintiffs’ complaints and the slow pace of the litigation due to the number of causes of action and defendants. While emphasizing that the plaintiffs were innocent of criminal wrongdoing, Judge Wilkinson expressed concern that, in a civil context, the plaintiffs were pulling individuals into a coercive proceeding when they have no business being there similar to their plight as criminal defendants.
Judge Gregory wrote separately concurring in part and dissenting in part. Judge Gregory would have dismissed all state common law claims against all individual defendants based on the North Carolina doctrine of official immunity.
-Jennifer B. Routh
Decided: December 14, 2012
Defendant Nicolas Carpio-Leon, an illegal alien “indicted for possessing firearms while being ‘illegally or unlawfully in the United States,’” appealed his guilty plea based on his contention that 18 U.S.C. § 922(g)(5), which prohibits illegal aliens from possessing firearms, violated his rights under the Second and Fifth Amendments to the U.S. Constitution. The Fourth Circuit ultimately held § 922(g)(5) to be constitutional and affirmed the district court’s judgment.
On appeal, Carpio-Leon made two arguments. First, he contended “that possession of firearms typically used for self-defense in one’s home is protected by the Second Amendment, even when such possession is by an illegal alien.” After recognizing that it had “not had occasion to address a Second Amendment challenge to 18 U.S.C. § 922(g)(5),” the court noted that three other circuits “have upheld the provision in the face of a Second Amendment challenge.” The court further noted that it had “found no court of appeals decision that has found [the provision] unconstitutional.” The court then engaged in a Second Amendment analysis prescribed by Heller and applied the two-step approach set forth in its 2010 decision in United States v. Chester.
Applying the first step, the court looked to determine “whether the challenged law imposes a burden on conduct falling within the scope of the Second Amendment’s guarantee” by deciding “whether the scope of the Second Amendment includes the protection of aliens who are illegally in this country.” The court focused on the text of the Second Amendment, specifically the language protecting the rights of “the people,” but it found that the Supreme Court’s decision in Heller provided little help in determining “whether ‘the people’ includes illegal aliens.” Despite the lack of clear precedent on this matter, the court found that “Heller concludes … that the core right historically protected by the Second Amendment is the right of self-defense by ‘‘law-abiding, responsible citizens,’’” and therefore it determined that it did not need to determine the scope of “the people” under the Second Amendment. Finally, the court employed a historical analysis and ultimately held “that illegal aliens do not fall in the class of persons who are classified as law-abiding members of the political community for the purpose of defining the Second Amendment’s scope.” The court was careful to limit its holding by making it clear that it did “not hold that any person committing any crime automatically loses the protection of the Second Amendment.” Based on this holding, the court determined that it did not need to proceed to the second step provided in Chester because under the first step it “conclude[d] that Carpio-Leon’s constitutional challenge under the Second Amendment must fail.”
Next, the court considered Carpio-Leon’s second argument on appeal that § 922(g)(5) “violate[d] his right to equal protection under the Due Process Clause of the Fifth Amendment.” Carpio-Leon based this argument “on his claim that the right to bear arms in one’s home for protection is a fundamental constitutional right” such that the court should apply strict scrutiny in evaluating § 922(g)(5). The government, on the other hand, argued that this statute “is subject to a rational basis review because illegal aliens do not have a fundamental right to bear arms.” The court agreed with the government, finding that “no fundamental constitutional right is at stake, [and] the appropriate standard of review is the rational-basis review.” Under this analysis, the court determined that Carpio-Leon “[could] not show that there is no rational relationship between prohibiting illegal aliens from bearing firearms and the legitimate government goal of public safety” and concluded that § 922(g)(5) “survives rational scrutiny and is, therefore, also constitutional under the Fifth Amendment.”
– Allison Hite
Decided: December 14, 2012
James G. Blakely challenged the court’s denial of his attempt to proceed in forma pauperis on appeal. The court denied his motion for reconsideration.
Under the Prisoner Litigation Reform Act’s “three-strikes” provision, 28 U.S.C. § 1915(g), a prisoner that has had three prior cases dismissed as frivolous, malicious, or for failure to state a claim for which relief may be granted generally may not proceed in forma pauperis, but instead must pay all filing fees for subsequent suits up front. Blakely, a prisoner in a South Carolina correctional institution, has pursued numerous suits in both state and federal court; however, Blakely contends that his prior actions that were dismissed as frivolous, malicious, or failing to state a claim do not count as strikes under the three-strikes provision because the dismissals occurred at summary judgment.
The court was not convinced by Blakely’s argument and held instead that the fact that an action was dismissed as frivolous, malicious, or failing to state a claim determines whether the dismissal constitutes a strike, not the case’s procedural posture at dismissal. Thus, if a summary judgment order indicates on its face that the court considered the criteria under § 1915(g) for a strike to have been met, then the dismissal constitutes a strike for purposes of the three-strikes provision. Since Blakely has had more than three prior cases in which the summary judgment dismissal orders expressly stated that the suit was frivolous, malicious, or failed to state a claim for which relief could be granted, he may no longer proceed in forma pauperis pursuant to the three-strikes provision of the Prisoner Litigation Reform Act. As such, the court denied his motion for reconsideration.
– Kassandra Moore
Decided: December 14, 2012
Ashland Facility Operations, LLC, a nursing facility near Richmond, Virginia, petitioned the Fourth Circuit to review an order by the National Labor Relations Board that required Ashland Facility to negotiate with a newly unionized group of Ashland Facility employees. The NLRB’s order came on the heels of a contentious union representation election, in which Ashland Facility claimed that the election results had been tainted by “unlawful appeals to racial prejudice.” An administrative law judge rejected the nursing facility’s objections and certified the union “as the exclusive bargaining representative” for the employees. The ALJ’s order was later affirmed by the NRLB; however, Ashland Facility refused to bargain with the union regarding its employees’ terms and conditions of employment. Consequently, the union filed a complaint with the NLRB alleging that Ashland Facility’s intransigence was a violation of the National Labor Relations Act. The NRLB ruled in favor of the union and ordered the nursing facility to negotiate.
Petitioning the Fourth Circuit for review, Ashland Facility argued that during the campaign period the Virginia NAACP was acting as an apparent agent of the union. Because of this agency status, Ashland Facility argued, the alleged inflammatory statements made by the Virginia NAACP’s executive director should have been closely scrutinized by the NLRB in certifying the election results. The Fourth Circuit first determined that there was sufficient evidence to support the NLRB’s finding that the NAACP chapter was not an agent for the union. In addition, the court held that the executive director’s comments could not be deemed racially inflammatory so as to subject the election to a heightened standard of scrutiny. According to the court, the statements could not be considered “inflammatory” because they were not designed solely to “inflame the racial feelings of voters,” but instead were “made in the context of raising legitimate concerns about the working conditions” at Ashland Facility. Whatever the effect of the executive director’s statements, the court stated, the nursing facility failed to demonstrate that their employees did not decide freely how to vote in the union representation election. And finally, the Fourth Circuit held that even if the comments were sufficiently inflammatory to invalidate the election, the comments were made prior to the “critical period”—the time between the filing of the representation petition and the election—and thus likely carried no influence over the vote. Therefore, the court denied Ashland Facility’s petition and ordered the enforcement of the NLRB ruling.
-John C. Bruton, III
Decided: December 13, 2012
The Fourth Circuit Court of Appeals vacated the judgment of the district court ruling that the defendant’s previous state conviction of a criminal threat was a “prior crime of violence,” justifying an enhancement of his sentence. The court remanded the case for resentencing consistent with the opinion
Jesus Miguel-Torres plead guilty to one count of illegal reentry by and aggravated felon, in violation of 8 United States Code Sections 1326(a) and 1326(b)(2) (2006). Torres-Miguel had a prior conviction under California Penal Code Section 422(a), which made it a felony to willfully threaten to commit a crime that would result in death or bodily injury. There were no facts with regards to the prior conviction. Because of this conviction, Torres-Miguel’s probation officer recommended in the presentencing report (“PSR”) a sixteen-level increase to Miguel’s base offense level. The district court determined that Torres-Miguel’s threat conviction categorically constituted a crime of violence, justifying sentence enhancement under the United States Sentencing Guidelines. This enhancement increased Torres-Miguel’s Guidelines sentencing range from fifteen to twenty-one months to fifty-seven to seventy-one months. The PSR miscalculated lower end of the enhanced range, which should have been fifty-one months. The district court then sentenced Torres-Miguel to fifty-one months. From that sentence, Torres-Miguel appealed.
The Fourth Circuit reviewed de novo the question of whether the prior threat conviction constituted a prior crime of violence requiring sentence enhancement under the Guidelines. To answer all questions regarding predicate crimes of violence, the Court follows a categorical approach, which “look[s] only to the statutory definition of the state crime and the fact of conviction to determine whether the conduct criminalized by the statute, including the most innocent conduct, qualifies as a ‘crime of violence’.” The Guidelines define a prior crime of violence as “any other offense . . . that has as an element the use, attempted use, or threatened use of physical force against the person of another. When looking at the California statute, the Court concluded that no part of the statue necessarily includes the use or threatened use of physical force to accomplish the result. A person could threaten a crime that results in death or bodily injury without threatening to use physical force. While this would be a violation of 422(a), it would not qualify for enhancement under the Guidelines. For this reason, the Court held that Torres-Miguel’s sixteen-level enhancement could not stand.
-Jonathan M. Riddle
Decided: December 13, 2012
On appeal, Phillip A. Hamilton challenged his conviction for federal program bribery and extortion under color of official right. Hamilton also challenged his sentence of 114 months’ imprisonment. The Court of Appeals affirmed both Hamilton’s conviction and sentence.
From 1988 to 2009, Hamilton served as a state legislator. During this time, Hamilton also worked as an administrator and a part-time consultant for the Newport News public schools system. In August 2006, Hamilton sought a meeting with Old Dominion University (ODU) officials to discuss state funding for a new Center for Teacher Quality (the “Center”). Immediately prior to the meeting, Hamilton and his wife exchanged emails discussing their financial difficulties. Hamilton hoped that the new Center would employ Hamilton and that he would make about $6,000 a month. These emails were sent to and from Hamilton’s public school workplace computer, through his work email account. About four months later, Hamilton emailed ODU officials and explained that because the Governor’s budget did not include money for the Center, Hamilton had proposed a budget amendment to secure $1 million in funding. Hamilton also reiterated his desire have a salary-based position with the Center. Thereafter, Hamilton introduced legislation for the first of two $500,000 appropriations for the Center. Both appropriations ultimately passed. Hamilton was then selected as Center Director at a salary of $40,000 per year. However, he had never filed an application for the position, and an ODU official later testified that Hamilton would have never been offered the position if not for his legislative assistance. Based on this evidence, the Government charged Hamilton with bribery concerning federal program funds in violation of 18 U.S.C. § 666(a)(1)(B) (2006), and extortion under color of official right in violation of 18 U.S.C.§ 1951. The jury convicted Hamilton of both crimes, and the district court sentenced him to 114 months. Hamilton then filed a timely appeal.
Hamilton’s main argument on appeal challenged the district court’s admission into evidence of the emails he sent to and received from his wife. Hamilton essentially argued that the admission of the emails violated the marital communications privilege. The Court of Appeals first noted that under the general rule, private communications between spouses are presumptively confidential and thus privileged. However, the court also noted this privilege can be waived by a “voluntary disclosure.” The Government argued that Hamilton waived his privilege by communicating with his wife on his workplace computer, through his work email account, and subsequently failing to safeguard the emails. The court agreed and held that Hamilton waived any privilege he had over the emails. The court noted that the school district’s computer use policy expressly provided that users have “no expectation of privacy in their use of the Computer System.” The court also noted that Hamilton electronically signed forms accepting the policy and that he had to acknowledge the policy by pressing a key to proceed to the next step of the log-on process every time he logged into his workplace computer.
Decided: December 13, 2012
The Fourth Circuit Court of Appeals vacated the convictions of Jimmy and Jacqueline Hilton because the identity theft statutes they were convicted under are fatally ambiguous. The court affirmed Tamatha Hilton’s convictions and affirmed the remaining convictions of Jimmy and Jacqueline Hilton with a remand of the case for resentencing.
Tamatha Hilton, Jimmy Hilton, and Jacqueline Hilton were charged with several counts including identity theft of The Woodsmiths Company, mail fraud, mail theft, money laundering, conspiracy, passing forged securities, and making a false statement to a financial institution. Tamatha Hilton was the office manager and bookkeeper at Woodsmiths. As a result of her position, she was able to intercept checks written to the Woodsmith, and instead of depositing the checks into the company’s account, she gave the checks to her husband, Jimmy Hilton. The defendants ultimately stole around $655,000. Jacqueline Hilton, Jimmy’s former wife, was paid by Jimmy to maintain a SunTrust bank account falsely purporting to be the owner of Woodsmith. Jimmy would give the checks he received from Tamatha to Jacqueline to be deposited into the SunTrust account.
The main issue on appeal is whether or not Jimmy and Jacqueline were erroneously charged with identity theft and aggravated identity theft, in violation of 18 U.S.C. §§ 1028(a)(7) and 1028A (the identity theft statutes). The defendants argued that the language of these statutes does not encompass stealing the identity of a corporation. The statutes make it unlawful to knowingly take the identity “of another person.” The court held that there was no evidence to indicate that Congress intended the statutes to protect corporate victims as well as individuals. For this reason the convictions of Jimmy and Jacqueline under the identity theft statutes were vacated. However, their other numerous convictions were affirmed, and Tamatha’s various convictions were also affirmed.
Decided: December 12, 2012
The Fourth Circuit affirmed Hargrove’s sixty-month sentence for selling an animal for purposes of having the animal participate in an animal fighting venture in violation of 7 U.S.C. § 2156. Although the judge improperly calculated the sentencing guidelines as to at least two sentencing enhancements, the Fourth Circuit determined that the sentence should be affirmed under the assumed error harmlessness inquiry.
The investigation of Hargrove began with complaints that Hargrove was involved in dogfighting. The investigation revealed that Hargrove was a “legend” in dogfighting that had been involved in dogfighting activity for over forty years, and had three prior related convictions. Hargrove eventually sold an American Pit Bull Terrier to an undercover informant after a demonstration fight. Pursuant to a search warrant law enforcement seized 34 dogs, which had to be euthanized because of poor health and/or aggressive tendencies. The search also revealed tools and indicia of the dogfighting trade including a fighting pit covered in blood.
Under the assumed error harmlessness inquiry, there must be “(1) knowledge that the district court would have reached the same result even if it had decided the guidelines issue the other way, and (2) a determination that the sentence would be reasonable even if the guidelines issue had been decided in the defendant’s favor.” The first step is clearly met, as the district court expressly stated it “would have sentenced Hargrove to sixty months even if the guideline range was 0-6 months.” The Fourth Circuit also concludes that the second step is met. The sentence is reasonable given the nature, circumstances, and seriousness of the offense, the need for deterrence, and to provide just punishment.
Decided: December 7, 2012
The Fourth Circuit Court of Appeals affirmed the district court’s award of summary judgment in favor of the American Red Cross Greenbrier Valley Chapter, vacated the district court’s ruling that the Greenbrier Valley Chapter is an employer under the ADA, and dismissed the cross-appeal filed by the Greenbrier Valley Chapter.
Reynolds worked for the Greenbrier Valley Chapter of the American Red Cross in Lewisberg, West Virginia; he first worked as a volunteer starting in 1994 and then, in 2004, he was paid for teaching health/safety, first aid, and CPR classes. Eventually, he became a part-time employee in 2005. During Reynolds’ first week as an employee, he was instructed to help move a baby grand piano from the home of a donor to his boss’ personal residence. Reynolds complained of his back hurting and was later examined in the emergency room. When Reynolds returned to work, his doctor gave him a note stating he could only lift weights up to 15 pounds, but despite this restriction, Reynolds continued to lift things in excess of 15 pounds. Reynolds told his boss twice that he wanted to file a workers’ compensation claim, but was told he would be dismissed if he did so and that the Red Cross would fight the claim. In January 2007, Reynolds was terminated due to budget restrictions. Reynolds filed an action claiming that he was fired because of his alleged disability, he was retaliated against for engaging in protected activities under the Americans with Disabilities Act (“ADA”), and his employer shared confidential medical information about his alleged disability.
To survive summary judgment on his claim under the ADA, Reynolds needed to produce evidence sufficient to show that he was a qualified individual with a disability, he was discharged, he was fulfilling his employer’s legitimate expectations at the time of his discharge, and the circumstances of his discharge raise a reasonable inference of unlawful discrimination. Reynolds claim failed at step one because he failed to produce evidence that he was disabled. First, the court determined that the 2008 amendments to the ADA were not applicable in Reynolds case because the amendments were not intended to be retroactive. Then, applying the law in effect at the time of the alleged conduct, the court held that Reynolds did not show that his injuries prevented or severely restricted him from doing things important to most people’s daily lives. Further, Reynolds did not demonstrate that he had a “record of” a physical impairment, nor could he satisfy the third possible definition of disability which is he was “regarded as” having a physical impairment. Reynolds claim for retaliation failed because he did not produce any evidence linking his alleged protected conduct and his termination. Finally, his confidentiality claim failed because he did not produce any evidence to support the claim.
The district court determined that the Greenbrier Valley Chapter of the Red Cross was an employer under the ADA, and the Chapter appealed this finding. The Fourth Circuit dismissed this appeal because it was rendered moot. By the court affirming the district court’s grant of summary judgment, any resolution regarding whether the Chapter is an employer would have no impact on the outcome of this matter.
-Jennifer B. Routh
Decided: December 6, 2012
The government appealed the judgment of the district court directing that Patrick Caporale be granted supervised release from the custody of the Bureau of Prisons. The appellate court affirmed the district court’s judgment.
Caporale finished serving his prison sentence for child molestation in 2008, but remained incarcerated while the government sought to have him declared a “sexually dangerous person” under the Walsh Act. Under the Walsh Act, a person is sexually dangerous to others where he or she “suffers from a serious mental illness, abnormality, or disorder [such that he or she] would have serious difficulty in refraining from sexually violent conduct or child molestation if released.”
After an evidentiary hearing on the matter, the district court ruled that the government failed to prove that Caporale suffers from a serious mental illness, abnormality, or disorder. The district court also found that the government failed to prove that Caporale would experience serious difficulty in refraining from sexually violent conduct or child molestation if released. As such, even if the district court had found that Caporale suffers from a qualifying mental impairment, he would not be “sexually dangerous” to others such that his incarceration is required under the Walsh Act.
The appellate court disagreed with the district court’s first determination, finding that Caporale does suffer from a qualifying mental impairment, but agreed that the government fell short of carrying its burden to demonstrate a relative likelihood that Caporale will reoffend. Thus, the court affirmed the district court’s holding directing Caporale’s supervised release on the basis that the government failed to prove that Caporale is a “sexually dangerous” person under the Walsh Act.
– Kassandra Moore
Decided: December 6, 2012
In this case, Defendant Daniel J. Brown appealed his conviction and sentence in the Western District of Virginia for a child pornography offense. Specifically, Brown argued that the district court erred in denying his motion to suppress evidence that had been recovered from his personal laptop computer outside of his place of business. Additionally, Brown argued that the district court erred in vacating and dismissing the lesser-included offense of possessing child pornography instead of the greater-included offense of receiving child pornography. The Fourth Circuit rejected both of Brown’s arguments on appeal and affirmed the district court’s judgment.
Brown’s first argument on appeal stemmed from the fact that the search warrant that the police acted upon did not authorize their seizure of his personal computer but only authorized them to search the place of his employment. Because the government did not contest this fact, the court “proceed[ed] on the proposition that the seizure of Brown’s laptop was warrantless.” However, after acknowledging the Fourth Amendment’s protection of citizens “against unreasonable searches and seizures,” the court noted that “there are ‘a few specifically established and well-delineated exceptions’ to the search warrant requirement.” The court found the “exigent circumstances” exception to apply in this case based on its finding that the search warrant established that there was probable cause to search Brown’s place of employment. Therefore, given the establishment of probable cause, the court found that the police’s subsequent inquiries about Brown’s laptop computer were lawful and proper.
Furthermore, the court found that exigent circumstances existed based on the police’s need to prevent the laptop and its contents from being damaged or destroyed. The court supported its conclusion that the police’s seizure of Brown’s laptop was proper using two cases from the Sixth and Eleventh Circuits which determined that the Fourth Amendment was not violated when a warrantless seizure was necessary to prevent the damage or disappearance of evidence.
The court also rejected Brown’s second argument that the district court erred in denying his motion to dismiss and in sentencing him solely based on the greater-included offense of receiving child pornography. The court determined that the district court “did not abuse its discretion by denying Brown’s motion and striking the lesser-included offense of possession of child pornography.” Instead, the court found that “the court properly adhered to a long line of authorities directing vacation of the conviction that carries the more lenient penalty when a defendant is convicted of both a greater and a lesser included offense” and cited to several precedent cases from the Fourth and other circuits.
– Allison Hite
Decided: December 4, 2012
In February 2011, federal prosecutors charged the Defendant, Nicholas Gonzales-Flores, with running a methamphetamine distribution scheme and being an illegal-alien in possession of a firearm that had traveled in interstate commerce. The day before trial was set to begin, the district court held a phonetic hearing—regarding an alleged discovery violation by the government—in which both the Assistant U.S. Attorney and the Defendant’s counsel participated. The Defendant himself did not know about this over-the-phone hearing. The discovery issue was resolved in favor of the prosecution, and at trial, the Defendant was convicted of most of the charges against him.
The Defendant appealed his convictions, arguing that the district court violated Rule 43 of the Federal Rules of Criminal Procedure by conducting the pretrial hearing without the presence of the Defendant. The Fourth Circuit reviewed the text of the rule, which identifies the stages of a criminal prosecution at which a defendant must be present, such as, e.g., the initial appearance and the jury impanelment. The court took note of an exception under Rule 43(b)(3) that specifies that “a defendant need not be present at a ‘proceeding [that] involves only a conference or hearing on a question of law.’” The court determined that the question of whether the government had violated the particular discovery rule was a question of law for the trial judge, and thus, the pretrial hearing was covered under the Rule 43(b)(3) exception. Therefore, the Fourth Circuit held, the district court’s pretrial hearing had not been rendered improper by the Defendant’s absence.
-John C. Bruton, III
U.S. Food Service, Inc. v. Truck Drivers & Helpers Local Union No. 355 Health & Welfare Fund, No. 12-1108
Decided: November 30, 2012
The Fourth Circuit Court of Appeals reversed the district court’s ruling that employer contribution funds in an Employment Retirement Savings Income Act (“ERISA”) health plan should be returned due to a mistake of fact or law. The district court ruled that the plan administrator’s determination that the funds were not due to a mistake was incorrect, but the Fourth Circuit held that the administrator’s decision was within its discretion and remanded the case.
ERISA provides that benefits of a health plan “shall never inure to the benefit of any employer and shall be held for the exclusive purposes of providing benefits to participants in the plan and their beneficiaries and defraying reasonable expenses of administering the plan.” However, ERISA permits return of an employer contribution only after the plan administrator determines that an employer’s contribution was due to a mistake of law or fact. The plan in question stems from a collective bargaining agreement (“CBA”) between Teamsters Local No. 355 and United Food Services (“USF”). USF makes contributions to the unions ERSIA health and welfare fund for the benefit of its employees. The contributions are based on the “straight time-hour” rate of hours worked by an employee with a maximum of 50 hours per week. USF and its predecessors have been a party to this fund since 1957 and the contribution agreement has not changed since then. Benefits Administration Company (“BAC”) manages the day-to-day operations of the fund, and only allows for return of USF contributions based on a mistake as provided for by ERISA. In March of 2008, USF discovered that from January 2006 until March of 2008, USF had contributed funds paid at the overtime rate. USF interpreted the CBA to require “straight time-hour” payments, which did not include the overtime rate. In March of 2008, USF halted the allegedly mistaken contributions and requested a return of the overpayments. The administrator interpreted the CBA to mean USF must pay at the applicable contribution rate up to 50 hours a week, even if that included an overtime rate. USF filed suit in the district court, and the district court agreed with USF that the “clear and unambiguous” language of the SBA only required contributions at the regular hourly rate. Furthermore, the district court granted the return of funds to USF.
The Fourth Circuit looked to the two ERISA provisions and held that the mechanism for return of mistaken funds gave the plan administrator broad discretion to determine if funds should be returned. The Court stated that Congress wanted to strike a balance between a system that was too restrictive or too lax to both encourage contribution and protect the financial stability of funds. Because of this, the Court agreed with other circuits that held an administrator’s decision should be evaluated for abuse of discretion, which is synonymous with deference. Therefore, it is the plan administrator, not the reviewing court, which determines first whether a given contribution was made by mistake and whether it should be returned to the contributing employer. Because the CBA language has not changed in 50 years, and because the administrator focused on course of dealing between the two parties, the administrator’s decision was not an abuse of discretion.
-Jonathan M. Riddle
Decided: November 30, 2012
Jonathan Blitz, his wife Marla Tuchinsky, and their minor child EB (“Plaintiffs”) challenged the district court’s dismissal of their complaint for lack of subject matter jurisdiction. The Plaintiffs’ complaint challenged the use of advanced imaging technology (“AIT”) scanners and pat-downs at airport screening checkpoints. According to the district court, § 46110 of Title 49 vests exclusive jurisdiction to an appropriate court of appeals for challenges to “orders” issued by the Administrator of TSA. The Plaintiffs argued that the district court erred in dismissing their complaint because the TSA’s standard operating procedures (“SOP”) for checkpoint screening— which includes AIT scanners and passenger pat-downs— does not constitute an “order” under §46110. In the alternative, the Plaintiffs argued that §46110’s conferral of exclusive jurisdiction to a court of appeals is unconstitutional. The Court of Appeals rejected the Plaintiffs’ arguments and affirmed the district court’s dismissal of the Complaint.
In a 2010 declaration, TSA Administrator Pistole explained that the use of AITscanners constituted checkpoint screening SOP at all airports. The declaration also explained that a passenger choosing to opt out of an AIT scan must undergo a pat-down as a part of that checkpoint screening SOP. According to the Plaintiffs’ Complaint, Plaintiff Tuchinsky opted out of AIT screenings on two occasions at the Raleigh-Durham International Airport. Tuchinsky claimed that she was then subjected to pat-downs that were highly invasive and humiliating. On February 7, 2011, the Defendants moved to dismiss the Complaint under Rule 12(b)(1), arguing that the district court lacked subject matter jurisdiction. The Defendants maintained that the checkpoint screening SOP constituted an “order” issued by the TSA Administrator. The district court agreed and dismissed the Plaintiffs’ Complaint. This appeal followed.
On appeal, the Plaintiffs argued that the application of §46110 only applies to orders issued by the TSA Administrator after the completion of adjudicatory proceedings where affected persons have been accorded an opportunity to participate. Therefore, under the Plaintiffs’ narrow viewpoint of §46110, the checkpoint screening SOP would not constitute an “order.” However, the Court of Appeals rejected the Plaintiffs’ argument. The court noted that none of the other circuits had adopted such a narrow view of § 46110 and that the Plaintiffs’ interpretation of §46110 would violate the plain language of the statute and controlling precedent. Finally, the court also rejected the Plaintiffs’ constitutional claims. The court noted that “agency decisions are commonly subject to such jurisdiction channeling provisions, and final agency actions are generally reviewed in the courts of appeals.”
Decided: November 29, 2012
The Fourth Circuit Court of Appeals affirmed the judgment of the district court sentencing Day to 105 years in prison in addition to fines, forfeitures, and restitution. Day was convicted of wire fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering, and conspiracy to commit smuggling. Day committed these crimes in an attempt to defraud the Department of Defense (DOD) by supplying defective parts for use by the U.S. military.
Beginning in 2004 Day, along with his co-conspirators, set up various companies that bid on parts-supply contracts. When one of Day’s companies won a contract, Day would purchase similar but cheaper and nonconforming parts and deliver those parts to the DOD. Many of these parts were “critical application items” meaning that their failure could jeopardize lives of military personnel. When it became known that the parts were noncomplying, the company would lose its opportunity to bid on future projects. When this happened, Day would start up new companies to keep the scheme going. Day was ultimately arrested in July 2008 in Mexico after being on the run for over a year.
On appeal, Day attempted to argue that the jury instructions regarding an aiding and abetting theory were erroneous. Since Day’s counsel did not object to these instructions, the court reviewed his claim for plain error. Day argued that the instruction amounted to a constructive amendment of his indictment and violated the extradition rule of specialty. The court held that both of these arguments failed because aiding and abetting is a theory of liability, not a separate offense. Day also challenged his conviction for conspiracy to commit transportation money laundering. The court found that Day did transport funds into Mexico with the requisite design to conceal, that gold is a “monetary instrument or funds,” and the district court properly instructed the jury on the meaning of the term “proceeds.” Lastly, the court held that the district court did not err in its evidentiary rulings regarding mishandling of evidence. The court found that even if the district court had erred, it would have been harmless given the large amount of incriminating evidence against Day.
Decided: November 29, 2012
The Fourth Circuit affirmed the district court’s denial of a motion to suppress evidence obtained from a dog sniff search of a vehicle. The court concluded reasonable suspicion of criminal activity existed at the moment the law enforcement officer, Homiak, determined that the driver and passenger’s explanations of their travels conflicted, between six and nine minutes after the stop. The existence of reasonable suspicion allowed Homiak to briefly extend the stop to confirm or dispel his suspicion through the canine sweep of the vehicle.
Homiak initiated a traffic stop when he clocked the rental vehicle going 79 miles per hour in a 70 miles per hour zone. The driver Vaughan appeared normal, but Scott, the passenger, appeared nervous. Homiak noticed four phones in the center console, two of which were prepaid phones that are often used for drug transactions, as no personal information needs to be provided to obtain the phones. Furthermore, Vaughan modified his explanation for his travels, and Vaughan and Scott’s travel explanations conflicted.
The totality of the circumstances was sufficient to generate reasonable suspicion of criminal activity “no later than the moment Scott volunteered an explanation for his travels that conflicted with Vaughan’s.” Therefore, Homiak was justified in briefly extending the traffic stop. The delay was reasonable, as it only took sixteen minutes from the beginning of the traffic stop for the drug dog to arrive, sweep the vehicle, and alert to the presence of drugs.
Decided: November 28, 2012
Santander Consumer USA (“Santander”) appealed from the district court’s order denying its motion to compel arbitration and stay court proceedings of Antonia Rota-McLarty’s (“Rota-McLarty”) claims against it. The Fourth Circuit, after concluding it had jurisdiction, concluded that the record failed to support the district court’s finding of waiver by Santander, and thus reversed and remanded with instructions to refer the claims to arbitration.
Rota-McLarty purchased a car, executing a Buyer’s Order, providing an agreement to arbitrate, and a Retail Installment Sale Contract (“RISC”), which provided, inter alia, an integration clause. Rota-McLarty returned the car without having made a payment on her loan and Santander sought collection of the outstanding debt. Rota-McLarty filed a putative class action in state court, alleging violations of Maryland consumer protection laws. Santander removed to federal court on the basis of diversity, filed an answer, and the parties entered discovery. Santander moved to compel arbitration and to stay the proceedings, claiming that uncertainty in the law caused the delay. The district court denied the motion, finding that Santander waived its right to compel arbitration by its unjustified delay and by having participated in discovery. On appeal, Santander argued that the district court erred in failing to apply the Federal Arbitration Act (“FAA”) and in finding waiver.
The Fourth Circuit noted that the FAA provides for appeals from orders “refusing a stay of any action under section 3” of the FAA, or “denying a petition under section 4…to order arbitration to proceed.” The FAA is read broadly to include “a contract evidencing a transaction involved in [interstate] commerce.” The Fourth Circuit agreed with other circuits and found that “reliance upon funds from a foreign source in a transaction is sufficient to implicate the FAA.” As to whether Santander’s motion adequately invoked the FAA as to create appellate jurisdiction, the Fourth Circuit found that Santander’s motion “clearly invoke[d] the relief provided in [sections 3 and 4]” of the FAA, and thus the denial of the motion was immediately appealable. The Fourth Circuit then held that the facts supported the district court’s findings that the Buyer’s Order and RISC were made as part of a single transaction, thus the arbitration clause in the Buyer’s Order was enforceable. The Fourth Circuit concluded that the district court erred in assessing whether Santander waived its right to enforce arbitration. The district court erroneously applied the law of “waiver,” rather than the FAA’s law of default, which is exceptionally difficult to prove. Default typically occurs where a litigant “so substantially utilizes the litigation machinery that to subsequently permit arbitration would prejudice the party opposing the stay.” Forrester v. Penn Lyon Homes, Inc., 553 F.3d 340, 343 (4th Cir. 2009). In this case, the delay of several months and Santander’s limited use of litigation machinery were insufficient to demonstrate that Rota-McLarty suffered actual prejudice. Accordingly, the Fourth Circuit reversed the district court’s finding that Santander defaulted on its right to enforce the arbitration agreement.
Decided: November 21, 2012
The Fourth Circuit Court of Appeals held that the Surface Transportation Board’s (“STB”) denial of the Maryland Transit Administration’s (“MTA”) would not be overturned under the arbitrary and capricious standard.
MTA owns the railroad right-of-way running between Clayton, Delaware and Easton, Maryland; MTA applied to the STB to stop using it for freight transportation use and convert it to a recreational trail as authorized by the National Trails System Act (“the Trails Act”). The Trails Act is a federal program that prevents revisionary property interests from vesting, as normally would happen when a railroad is abandoned and the federal government remains potentially liable to land owners for takings challenges based on the delayed vesting of reversionary interests. In exchange for these benefits, which the Fourth Circuit concluded qualified as a “federal gift,” the railroad owners must assume liability arising out of the recreational use. At the time MTA filed the notice to the STB, MTA included a “statement of willingness” to assume “full responsibility” for legal liability and payment of taxes as required by the Trails Act. However, MTA changed course after two years of extensions and submitted new trail use agreements whereby the Delaware Department of Natural Resources and Environmental Control and the Maryland Department of Natural Resources agreed to assume responsibility. However, these statements of responsibility were qualified by provisions that stated this would not constitute an obligation of appropriations by the Delaware General Assembly and the Maryland Sponsor would retain immunity provided under the Maryland Tort Claims Act. The STB denied their petitions because the sponsors failed to comply with the Trails Act Regulations. On appeal, the Board affirmed the Acting Director’s denial.
The Fourth Circuit could not conclude that the STB acted arbitrarily and capriciously in concluding that the agreements did not satisfy the statutory and regulatory obligations that the sponsors assume responsibility for any liability. Further, the court concluded that the requirement to assume liability did not constitute an unconstitutional requirement to waive its sovereign immunity because a requirement that is a condition of a federal benefit or gift that a state agency elects to receive is permissible. Finally, MTA argued that the STB improperly discharged its duties by functioning ministerially and refusing to evaluate the substance of the indemnity provisions. However, the court acknowledged that an agency is permitted, through rulemaking, to remove discretion from its determinations. Therefore, the judgment of the STB was affirmed.
-Jennifer B. Routh
Decided: November 21, 2012
Jimmy Martin and Lucky Strike, LLC (appellants) brought an action in the district court to enjoin the enforcement of S.C. Code Ann. §§ 12-21-2710 and 12-21-2712, which prohibit certain “device[s] pertaining to games of chance.” They then appealed the district court’s grant of summary judgment, advancing two theories: that §2710 is void for vagueness and thus violates the Fourteenth Amendment, and that, under the holding of Ex Parte Young, § 2710 is violative of their right to equal protection under the Fourteenth Amendment. The appellate court rejected these arguments and upheld the district court’s ruling.
The court first addressed the appellants’ due process argument, noting that a statute is unconstitutionally vague under the Due Process Clause if it “fails to provide a person of ordinary intelligence fair notice of what is prohibited, or is so standardless that it authorizes or encourages seriously discriminatory enforcement.” Since gambling does not implicate a constitutionally protected right, the court framed the inquiry as whether § 2710 is invalid “in all of its applications,” focusing specifically on the statute’s blanket prohibition against possessing any “device pertaining to games of chances of whatever name or kind.” In light of several South Carolina Supreme Court cases that have provided clarity to this particular phrase, the court found that the use of the term “games of chance” has a plainly legitimate sweep and more than conceivable application such that it is not unconstitutionally vague. The court also noted that inconsistent enforcement and judicial rulings on the statute may indicate a difference of opinion amongst judges or law enforcement, but does not make the statute unconstitutionally vague.
The court then addressed the appellants’ argument that § 2710 violates the Equal Protection Clause because they are forced to risk criminal prosecution, imprisonment, fines, and forfeiture to gain a determination as to whether a proposed game is legal under the statute. The appellants urged the application of the holding in Ex Parte Young that a state cannot force a party to risk severe penalties to obtain a judicial determination if that determination involves a complicated or technical question of fact. The court found that Young was not applicable because § 2710’s scope and validity is sufficiently clear; determining whether the statute applies to a particular game does not involve the kind of intensive investigation and technical analysis implicated in Young. Furthermore, the court found that the risks are too attenuated for proper application of Young since the historical record of enforcement of § 2710 reveals that the appellants would not face the type of dire criminal prosecution involved in Young if they put a game into operation that turned out to be illegal.
In summary, the court affirmed the judgment of the lower court finding that § 2710 is neither unconstitutionally vague nor violative of the Equal Protection Clause.
– Kassandra Moore
Decided: November 19, 2012
The Fourth Circuit denied Adriano de Almeida Viegas’s petition for review of the Board of Immigration Appeals’ (“BIA”) denial of Viagas’s petition to obtain relief from removal under the Immigration and Nationality Act (“INA”). For the reasons discussed below, the court concluded “that the BIA did not err in deeming Viegas statutorily ineligible for asylum and withholding of removal under the INA’s Material Support Bar.”
In this case, Viegas, a native and citizen of the Republic of Angola who entered the United States in 2005 using a fraudulent French passport, argued that the BIA and Immigration Judge erred in finding that the Front for the Liberation of the Enclave of Cabinda (“FLEC”), an organization that Viegas belonged to, is a terrorist organization. Additionally, Viegas argued that his financial contributions to the FLEC did not qualify as “material” support for the organization. In reviewing Viegas’s petition, the Fourth Circuit applied a highly deferential standard to its review of the decisions made by the BIA and Immigration Judge.
The Fourth Circuit first addressed the INA’s requirement that DHS present evidence that the organization that Viegas was a member of, the FLEC, qualifies as a terrorist organization. Because the court found that DHS presented sufficient evidence establishing that the FLEC qualifies as a terrorist organization under the INA, and because there was no dispute that Viegas was a member of at least a part of the FLEC, the court concluded that the BIA and Immigration Judge did not error in their burden of proof determinations.
Next, Viegas argued that because he knew nothing about the activities carried out by the faction of the FLEC to which he belonged, the INA’s “Material Support Bar” should not apply to make him ineligible for asylum or withholding of removal. This bar prohibits aliens who provide material support to terrorist organization “from receiving various forms of relief from removal.” Viegas relied on a provision in the INA stating that this bar “does not apply if the alien ‘can demonstrate by clear and convincing evidence that [he] did not know, and should not reasonably have known, that the organization was a terrorist organization.’” The court found Viegas’s claim that he lacked information about his faction’s activities to be unpersuasive and concluded that even if Viegas did not know that he belonged to a terrorist organization, “substantial evidence indicates that Viegas reasonably should have known that the organization he belonged to engaged in terrorist activities.” Thus, the court determined that actual knowledge of the terrorist activities is not required in order to apply the Material Support Bar.
Viegas then turned to his personal involvement in the FLEC and argued that “the BIA erred in concluding that his activities constituted material support under the INA.” He claimed that his activities “were insignificant and not the type of support that advances terrorism” such that they would qualify as “material support” of the organization. The court rejected this argument and found that Viegas’s voluntary monthly payments of dues to the FLEC, and his voluntary choice to hang posters for the FLEC, constituted sufficient support of the FLEC such that the BIA’s material support determination was not arbitrary and capricious.
Finally, the court addressed Viegas’s assertion “that the mandatory bar for membership in a terrorist organization should not apply because he is no longer a member of the FLEC.” While noting that this statutory “bar does not apply to aliens who are no longer members of terrorist organizations,” the court found that any error made by the BIA or Immigration Judge on this matter would amount to harmless error because “the Material Support Bar is an independently sufficient ground for denying Viegas relief.”
– Allison Hite
Decided: November 19, 2012
In this case, the Fourth Circuit affirmed its early opinion in United States v. Edmonds, 679 F.3d 169 (4th Cir. 2012), in which it had concluded that the defendant was properly convicted for his role in a conspiracy to possess and distribute crack cocaine. However, the court vacated the life sentence imposed on the defendant and remanded the case for resentencing in light of the Fair Sentencing Act of 2010. The court held that in determining the defendant’s sentence, the district court needed to apply this federal statute which had become effective on August 3, 2010—the exact date on which the defendant had received his original sentence. According to the court, even though the defendant had committed his offenses before the effectiveness date, he was entitled to the statute’s provisions at his sentencing hearing pursuant to the Supreme Court’s recent opinion in Dorsey v. United States, 132 S. Ct. 2321 (2012).
-John C. Bruton, III
Decided: November 9, 2012
The Fourth Circuit affirmed the constitutionality of 28 U.S.C. §§702 and 704(a), which makes it a crime to knowingly wear unauthorized military uniforms or insignia. The Fourth Circuit also affirmed the defendant’s convictions of making false statements in return for compensation from a federal agency and illegally converting federal funds to his own use. The Court held that laws banning the unauthorized wearing of uniforms and insignia would survive even “the most exacting scrutiny” reserved for expressive conduct. Finally, the court determined that the evidence presented at the district court met the elements required for the false statement and conversion charges.
Michael Delos Hamilton was a military veteran who was charged and convicted of four charges: making false statements in support of a claim for service related compensation to the U.S. Department of Veteran’s affairs; stealing and converting to his own use more than $30,000 of government money, wearing a military uniform without authorization, and wearing military medals and insignia without authorization. The first two charges stemmed from statements Hamilton made to a psychiatrist in order to receive disability benefits. Hamilton claimed he suffered from PTSD due to atrocities he witnessed while serving in Vietnam from 1963 until 1969. In reality, Hamilton was in the Marine Corps for less than a year in 1961, earning an honorable discharge when he injured his hand. He had received VA benefits due to the partial disability in his hand, and originally tried to receive PTSD compensation due to his hand injury. Hamilton was discharged after boot camp in 1961 and never served in Vietnam. The last two charges stemmed from Hamilton’s attendance at a ceremony in April 2010 recognizing Vietnam Veteran’s. Hamilton appeared at the ceremony in a Marine colonel’s uniform, decorated with numerous medals and insignia. Hamilton told the organizers that he earned the medals during his fictitious service in Vietnam. After the district court found Hamilton guilty on all four charges, Hamilton appealed claiming the prosecution did not offer sufficient evidence for the first two charges and that the laws for the second two charges were facially unconstitutional, or unconstitutional as applied to him.
The Fourth Circuit quickly affirmed Hamilton’s first two charges. In viewing the evidence in the light most favorable to the government, the Court found “substantial evidence” to warrant a conviction on both charges. The Court then had to turn to the constitutionality of 28 U.S.C. §§702 and 704(b). The Court stated that a broad reading of the laws could lead to absurd results, such as preventing a grandchild from wearing a grandfather’s war medals or an actor from wearing a uniform in a play. The Court took the approach taken by the Ninth Circuit and imposed an “intent to deceive” or scienter requirement into the laws to prevent absurd results. The Fourth Circuit then turned to the level of scrutiny applied to the two laws. Since this was not pure speech, but still expressive conduct, the Court was not sure to apply the lenient O’Brien standard, applied by the Ninth Circuit, or the most exacting scrutiny from Johnson. The Court assumed that the most exacting scrutiny applied, because it felt the law would still stand even under the higher scrutiny. The Court said the government had a compelling interest to do three things: prevent the potential debasement of military awards and uniforms; avoid implications that military honors are awarded on a frequent and routine basis; and avoid obstructions to the orderly administration of the chain of military command. Furthermore, the laws are narrowly tailored to serve that purpose. Hamilton and others argued that counter speech, such as a database listing all recipients of military medals and honors, were a less restrictive way to achieve the government’s interests. This approach was taken by the Supreme Court in the challenge to the Stolen Valor Act in Alvarez. The Court felt that since “seeing is believing” with military medals and uniforms, a database would be ineffective. In response to an as applied challenge, the Court saw nothing different about Hamilton’s conviction that required a different analysis.
Decided: November 9, 2012
Martin Mendoza Leiba (“Mendoza”) petitioned the Fourth Circuit Court of Appeals to review a decision by the Board of Immigration Appeals (the “Board”). The Board affirmed the ruling of an immigration judge (“IJ”) granting the Department of Homeland Security’s (DHS) motion to pretermit Mendoza’s applications for adjustment of immigration status and for a waiver pursuant to Immigration and Nationality Act (“INA”) § 212(h). The court granted Mendoza’s petition for review.
Mendoza, a native of El Salvador, entered the United States illegally. However, after marrying, Mendoza adjusted his status to that of a lawful permanent resident (“LPR”) in 1995. In 2008, Mendoza was convicted in Virginia state court of receiving stolen property. The DHS sought to deport Menodza pursuant to a federal statute that allows deportation when an alien is convicted of a felony that includes a prison term of at least one year. To avoid deportation, Mendoza filed an application for an adjustment of status and a waiver under INA § 212(h). The DHS then moved to pretermit Mendoza’s application on the ground that his conviction rendered him ineligible for a § 212(h) waiver. The IJ agreed with the DHS and ruled that that an alien convicted of an aggravated felony after obtaining LPR status is ineligible for a § 212(h) waiver. Therefore, the IJ ordered Mendoza’s deportation El Salvador. The Board affirmed the IJ’s decision.
The Court of Appeals explained that the central issue in the case was the interpretation of INA §212(h). Under that section, the Attorney General can grant a waiver against deportation if the alien’s deportation would result in extreme hardship to the alien’s lawfully resident spouse, parent, or child. However, the statute prohibits the Attorney General from granting a waiver to an alien “who has previously been admitted to the United States as an alien lawfully admitted for permanent residence.” The court determined that this language only applied to aliens who had initially lawfully entered into the United States after inspection and authorization by an immigration officer. Thus, the court held that the §212(h) language did not apply to Mendoza because he initially entered the country illegally and only later gained LPR status. Accordingly, the court granted Mendoza’s petition for review.
Decided: November 9, 2012
The Fourth Circuit Court of Appeals reversed a district court opinion that denied the plaintiff-appellant, Earl M. Bird (“Bird”), Social Security Benefits. The Court of Appeals held that the lower court erred in failing to consider medical evidence that was created after the last date of Bird’s insurance coverage, and in failing to give adequate weight to a disability determination made by the Department of Veterans Affairs (VA).
Bird served in the United States Marine Corps for several years and suffered from Post-Traumatic Stress Disorder (PTSD) as a result of his time in Vietnam. The VA awarded Bird 100 percent disability rating on November 14, 2007 for his PTSD. This disability rating was effective on the date Bird applied for the benefits, June 9, 2006. Bird applied for disability benefits with the Social Security Administration (SSA) in May 2009 and was denied because the Administrative Law Judge (ALJ) found his PTSD to be insufficient to qualify him for coverage.
The court of appeals found that retrospective consideration of medical evidence created after Bird’s date last insured (DLI) was required. This medical evidence was contained in the VA rating and report. The court stated that “post-DLI medical evidence generally is admissible in an SSA disability determination in such instances in which that evidence permits an inference of linkage with the claimant’s pre-DLI condition.”
The court also concluded that the ALJ did not afford the appropriate weight to the VA rating decision. Although the court had not previously determined the precise weight that must be afforded to a VA disability rating, the SSA is required to consider the evidence. The court held that substantial weight must be given to a VA disability rating, unless the ALJ clearly demonstrates that a deviation from this standard is appropriate in a given case.
Decided: November 8, 2012
The Fourth Circuit denied a Rule 60(b)(4) motion to vacate a civil forfeiture judgment. Although the government failed to meet the 90-day mandatory timeline imposed by 18 U.S.C. § 983(a)(3), Wilson failed to raise this defense during the forfeiture action and thus forfeited it.
On October 27, 2006, law enforcement officers stopped Wilson’s automobile to arrest him for drug trafficking charges. Wilson had $13,963 on his person, which was seized. Wilson then filed a claim for the return of the money, asserting that it came from legitimate sources of income. Wilson’s filing triggered a 90-day period in which the government was required to file a formal complaint or take other action in pursuit of civil forfeiture, pursuant to 18 U.S.C. § 983(a)(3). The government filed the complaint twenty days late. Wilson failed to raise this issue in the civil forfeiture proceeding, and the district court concluded that the money was substantially connected to his drug-trafficking activities. Wilson then filed a Rule 60(b)(4) motion to vacate the judgment due to the government’s late filing of the forfeiture complaint. Wilson argued that since the time limit was jurisdictional, the district court lacked authority to enter the forfeiture judgment. The government conceded that it had filed the complaint twenty days late, but argued that the time limit was a statute of limitations that Wilson had failed to raise and therefore forfeited. The district court agreed with the government.
The Fourth Circuit concluded that Congress did not create a condition on the district court’s subject matter jurisdiction by imposing a 90-day deadline on the government for filing civil forfeiture actions. 18 U.S.C. § 983 contains procedural rules for pursuing a civil forfeiture. § 983(a)(3) is not a condition of jurisdiction based on its language, the fact that the provision allows for extending the 90-day time period, and the provision’s location separate from the provisions concerning subject matter jurisdiction over forfeiture proceedings. Further, § 983(a)(3) provides that if the government fails to meet the deadline, the government must release the property and loses all rights to pursue it further. It does not provide that the court loses subject matter jurisdiction for failing to meet the deadline. There is no precedent to support Wilson’s argument that the deadline is jurisdictional, and the law typically treats a limitations defense as an affirmative defense that the defendant must raise.
Decided: November 5, 2012
Singh sought judicial review of an order of the Board of Immigration Appeals (“the Board”) denying his application for withholding of removal under the Immigration and Nationality Act (“the INA”) and under Article III of the Convention Against Torture (“the CAT”). Singh argued on appeal that the Board denied relief in part based on an improper adverse credibility determination and that the errors of an incompetent interpreter violated his right to due process. The Fourth Circuit found no error and denied Singh’s petition for review.
Singh, a citizen of India, traveled to Mexico on a student visa and subsequently entered the United States, where he was served with a Notice to Appear by the Department of Homeland Security. Singh applied for withholding of removal under the INA and under the CAT and submitted various supporting documents. Singh initially appeared before an Immigration Judge (“the IJ”) with no interpreter present and the IJ continued the hearing until an interpreter could be present. The IJ ultimately entered a written memorandum and order denying Singh’s application for withholding of removal. Specifically, the IJ found Singh’s testimony lacked credibility and that Singh had not provided adequate corroboration for his claims. The Board affirmed the IJ’s decision and further rejected Singh’s contention that the incompetence of the interpreter in the hearing before the IJ violated Singh’s due process rights. Singh appealed to the Fourth Circuit.
Decisions by the IJ and the Board should be affirmed unless “manifestly contrary to the law and an abuse of discretion.” 8 U.S.C. § 1252(b)(4)(D). In this case, the IJ considered the totality of the circumstances and concluded that Singh’s testimony was not credible. The Fourth Circuit found that the IJ’s stated reasons were “specific and cogent” and upheld the adverse credibility determination as being supported by substantial evidence. The court then turned to whether Singh was nonetheless entitled to withholding of removal under the INA or the CAT. To prevail on a withholding claim under the INA, Singh had to establish a “clear probability of persecution” and link that probability to one of several grounds, including political opinion. The Fourth Circuit found that Singh failed to demonstrate that he held a political opinion that would serve as the basis for further persecution if returned to India, and thus failed to establish a nexus to a statutorily protected ground. To prevail on a claim of withholding of removal under the CAT, Singh had to demonstrate that “it is more likely than not that he … would be tortured if removed” to India. 8 C.F.R. § 1208.16(c)(2). The IJ acknowledged Singh’s past mistreatment and the pattern of human rights abuses in India, but concluded that such a pattern did not justify a finding that Singh would more likely than not be tortured. Singh also claimed that his due process rights were violated by errors by his interpreter. The Fourth Circuit found that the IJ took specific steps to provide an interpreter and to ensure that Singh understood the interpreter. Furthermore, the court found that Singh failed to prove that any imperfection in the interpreter’s work was prejudicial. Accordingly, the Fourth Circuit denied Singh’s petition for review.
Decided: November 2, 2012
The Fourth Circuit Court of Appeals held that Mohamed Ali Samantar is not entitled to head-of-state or foreign official immunity under the common law. Samantar is a former high-ranking government official in Somalia during the military regime of General Mohamed Barre. Plaintiffs are natives of Somalia, and claim that they, or members of their families, were subjected to torture, extrajudicial killing, and arbitrary detention. They brought suit against Samantar, who is now a permanent legal resident in Virginia, under the Torture Victim Protection Act (“TVPA”) and the Alien Tort Statute (“ATS”). This case was previously appealed to the Fourth Circuit and the Supreme Court on the issue of whether Samantar could claim immunity under the Foreign Sovereign Immunities Act (“FSIA”). The Supreme Court affirmed the Fourth Circuit’s holding that Samantar was not eligible for immunity under the FSIA because the statute was intended to apply to states and not individuals.
The case was remanded to the district court for consideration on whether Samantar would be eligible for a common law head-of-state immunity because at least some of the wrongdoing occurred while he was prime minister, or under foreign official immunity because the wrongdoing was in the course or scope of his official duties. The district court renewed its request to the State Department for a response to Samantar’s immunity claims. For the first time in this litigation, the State Department took a position expressly opposing immunity for Samantar. The district court held that Samantar was not entitled to either common law immunity.
The Fourth Circuit examined what is the appropriate level of deference a court should take regarding the Executive Branch’s position on sovereign immunity for individuals. The court concluded that it depends on whether status-based immunity, like head-of-state immunity, or conduct-based immunity is claimed. For status-based immunity, the court held that the Executive Branch’s view is entitled to absolute deference. For conduct-based immunity, the Executive’s position carries substantial weight, but is not controlling. Turning to the instant case, the court examined domestic and international law, as well as the opinion of the State Department, and affirmed the district court’s ruling that Samantar is not entitled to any common law immunity. Finally, the court held that officials from other countries are not entitled to immunity for jus cogens violations, even if the acts were performed in the defendant’s official capacity.
-Jennifer B. Routh
Decided: November 2, 2012
Appellants appealed the district court’s order dismissing their class action complaint in which they claimed that Louisiana-Pacific Corporation (LP) negligently designed and manufactured a composite building product, Trimboard, designed and marketed for use as trim around exterior windows and door. They also alleged that LP violated North Carolina’s Unfair and Deceptive Trade Practices Act (UDTPA). Appellants also sought a declaratory judgment that Trimboard is “defective, prematurely deteriorates, and that its warranty is unconscionable.”
The district court dismissed appellants’ negligence claim as barred by North Carolina’s economic loss rule, which “prohibits the purchaser of a defective product from bringing a negligence action against the manufacturer or seller of that product to recover purely economic losses sustained as result of that product’s failure to perform as expected.” The Court of Appeals noted the rationale behind the economic loss rule: the sale of goods is accomplished by contract, and the parties are free to include or exclude provisions regarding the parties’ rights and remedies; a remedy in tort for damage to the product itself as a result of a defect would permit one party to ignore the contract. Since the appellants have a contractual basis for recovery in warranty, which they are pursuing in a separate action (the Hart action), the Court affirmed dismissal of the negligence claim.
The district court also dismissed the UDTPA claim as barred by the economic loss rule. The Court of Appeals affirmed dismissal on a separate ground, finding that the complaint failed to state a UDTPA claim. The complaint did not contain allegations of substantial aggravating circumstances sufficient to state a UDTPA claim, as opposed to a rephrased version of the breach of warranty claim discussed above. As such, the Court of Appeals affirmed dismissal of the UDTPA claim.
Finally, the district court dismissed the declaratory judgment claim since the appellants are pursuing a breach of warranty claim in the Hart action, and could have raised the allegations at issue in that suit. The Court of Appeals agreed with the lower court that it would be inappropriate to consider the claims addressed by the declaratory judgment claim in a venue separate from that in which the Hart action is pending. Thus, the Court of Appeals affirmed dismissal of the declaratory judgment claim.
In summary, the Court of Appeals affirmed the lower court’s dismissal of the negligence claim as barred by North Carolina’s economic loss rule. It affirmed dismissal of the UDTPA claim on the separate ground that the complaint failed to state a UDTPA claim. Finally, it affirmed dismissal of the declaratory judgment claim, finding that the issues addressed by that claim should be addressed by the breach of warranty litigation pending in separate venue.
Decided: October 25, 2012
In this case, the Fourth Circuit upheld the revocation of a federal prisoner’s supervised release and subsequent imprisonment for engaging in criminal activity while on release. The court rejected the defendant’s argument that the trial judge had improperly relied on the defendant’s need for substance abuse treatment in imposing the resentence. The Fourth Circuit held that under the Supreme Court’s opinion in Tapia v. United States, 131 S. Ct. 2382 (2011), it is impermissible for a trial judge to base or lengthen the resentencing of a defendant in a revocation of supervised release hearing on the defendant’s need for drug rehabilitation. However, the court stated that, while the trial judge did mention the defendant’s need for substance abuse treatment to coincide with his prison term, the revocation sentence was chiefly based on the defendant’s repeated violations of the law during his supervised release.
-John C. Bruton, III
AU Optronics Corp. v. South Carolina, No. 11-254, and LG Display Co., Ltd. v. South Carolina, No. 11-255
Decided: October 25, 2012
In addressing AU Optronics and LG Display’s (together “Defendants”) separate appeals of the District Court of South Carolina’s decisions to remand their cases to South Carolina state court, the Fourth Circuit adopted the “whole-case approach” to resolve the jurisdictional question at issue in the case. Applying this approach to determine whether federal jurisdiction existed in each case, the Court found that “the nature and effect” of both actions “demonstrate[d] that South Carolina is a real party in interest,” and that the State’s claims of restitution did not alter the State’s status as a real party to the action. Thus, because the Court determined that individual South Carolina citizens who would benefit from any restitution award did “not need to be considered in the diversity analysis of the State’s claims,” it held that minimal diversity was not established for the Class Action Fairness Act of 2005 (“CAFA”) purposes and affirmed the District Court’s decision to remand both cases to state court.
This case originated when South Carolina brought “nearly identical lawsuits” in state court alleging that the Defendants, both manufacturers of LCD panels, had engaged in a price-fixing conspiracy. The State sought relief provided under several state statutes, as well as restitution on behalf of South Carolina citizens, as provided in the South Carolina Unfair Trade Practices Act (“SCUTPA”). After the Defendants removed their individual cases to the District Court of South Carolina, the State moved to remand the cases to state court. The District Court determined “that South Carolina was properly pursuing these parens patriae lawsuits under its own antitrust and unfair trade practices laws” and remanded both cases to state court. The Defendants then individually petitioned the Fourth Circuit for permission to pursue appeals under CAFA. The Defendants each argued that federal jurisdiction existed because their cases qualified as mass actions under CAFA.
On appeal, the Fourth Circuit focused on the minimal diversity requirement needed to establish a mass action under CAFA. (The Court did not address CAFA’s numerosity or amount-in-controversy requirements). Ultimately, the Court focused on determining whether South Carolina was a real or nominal party. The Defendants argued that South Carolina was merely a nominal party and that, because the real parties in interest were the citizens of South Carolina, diversity was established. The Defendants argued that the Court should apply the “claim-by-claim” approach under which individual South Carolina citizens would qualify as real parties in interest to the restitution claim, thus establishing diversity of citizenship for the entire case.
The Court expressly rejected the “claim-by-claim” approach and adopted the “whole-case approach” recently adopted by the Fifth and Ninth Circuits. Accordingly, the court refused to “dissect the complaint and decide whether the state is the beneficiary of each basis for relief.” Instead, the Court “consider[ed] the complaint in its entirety and decide[d] from the nature and substance of its allegations what interest the state possesses in the lawsuit as a whole.” While acknowledging that individual South Carolina citizens stood to benefit from an award of restitution, the Court found that any restitution award was incidental to the State’s overriding interests and to the substance of the proceedings.” Thus, the Court concluded that the State could properly pursue its actions as parens patriae actions in state court.
Decided: October 23, 2012
The Fourth Circuit Court of Appeals affirmed Peoples’ conviction for contempt of Judge Currie and reversed his conviction for contempt of Judge Conrad.
Peoples, a former inmate, brought a number of § 1983 claims against prison officials in federal district court before Judge Cameron McGowan Currie. Peoples was late to jury selection and was warned by Judge Currie that failure to appear on time would cause her to dismiss his cases with prejudice. Despite such a warning, Peoples was late to court multiple times thereafter and Judge Currie dismissed his case. When the jury was brought back into the courtroom to be dismissed, Peoples muttered under his breath, “I was wanting to dismiss my sh—anyway.” After the jury was dismissed, Judge Currie went to the jury room to thank the jurors for their service; Peoples reentered the courtroom and approached the deputy clerk, Sara Samsa. Peoples repeated several times to Samsa, “Tell Judge Currie to get the f— off all my cases. I started to tell her something there. I started to tell her ass something today.” The next day, Judge Currie issued a Rule to Show Cause why criminal contempt sanctions should not be imposed, recused herself, and requested the contempt proceedings be referred to another judge.
The case was referred to Robert Conrad, Jr., Chief Judge of the Western District of North Carolina. Peoples arrived more than one hour late for his trial, and Judge Conrad informed him that at the conclusion of the trial for contempt of Judge Currie, the court would hold a separate trial for contempt to Judge Conrad. Peoples was found guilty of contempt of Judge Currie and sentenced him to four months imprisonment. Immediately after the first trial, Judge Conrad gave Peoples time to consult with his attorney in the courtroom while court was still in session. Peoples addressed the court in the second trial and explained his car trouble had caused his tardiness. Judge Conrad found him guilty of criminal contempt and sentenced him to an additional 30 days incarceration consecutive to the four months previously imposed.
Peoples appealed his convictions challenging the sufficiency of evidence. To convict someone of criminal contempt, the Government must establish beyond a reasonable doubt: (1) misbehavior of a person, (2) which is in or near to the presence of the Court, (3) which obstructs the administration of justice, and (4) which is committed with the required degree of criminal intent. On review, the Fourth Circuit held that the record established each element was satisfied for Peoples’ conviction of contempt of Judge Currie. However, the Fourth Circuit reversed Peoples’ conviction of Judge Conrad because he was not provided with sufficient notice and his tardiness or absence from court was not an adequate basis to fall within the summary punishment provision of Rule 42(b) of the Federal Rules of Criminal Procedure. Therefore, the Fourth Circuit Court of Appeals affirmed Peoples’ conviction for contempt of Judge Currie and reversed the conviction for contempt of Judge Conrad.
-Jennifer B. Routh
Decided: October 22, 2012
The Fourth Circuit Court of Appeals affirmed the district court’s ruling that the U.S. Customs and Border Protection (“CBP”) did not act outside its authority under the Convention on Cultural Property Implementation Act (“CPIA”) by seizing various Chinese and Cypriot coins that were under import restrictions. Furthermore, the government action under the CPIA did not violate the Administrative Procedures Act (“APA”), First, or Fifth Amendments.
The CPIA gives the government a scheme to enforce the U.N. Convention on Cultural Property. The Convention and the CPIA seek to protect cultural property of member States, defined as articles of importance to archaeology, history, art and literature. If a member State makes a request, the State Department and Customs and Border Protection refer the request to a panel of experts to determine what import restrictions are available and what items should have the restrictions. From there, if the panel decides import restrictions are necessary, the United States Information Agency (“USIA”) can take action by putting in place regulations that will restrict the import of cultural property. The CPIA requires notice in the Federal Register that informs importers of the restrictions and a detailed list of the articles restricted. The CPIA also gives the right to a forfeiture proceeding and sets out narrow exceptions around import restrictions. In this case, both China and Cyprus requested import restrictions on various cultural articles. The USIA enforced import restrictions on numerous articles, including coins. The government followed all notice provisions in the CPIA. The Ancient Coin Collector’s Guild attempted to import certain Cypriot and Chinese coins, which were seized by Customs and Border Protection. Before the government started forfeiture proceedings, the Guild brought an action challenging the seizure on the grounds the government acted ultra vires, violated the APA, and violated the First and Fifth Amendments. The district court found that the government acted within its power under the CPIA, that the State department, USIA, and CBP were exempt from the APA as an extension of the State department and not an “agency” under the APA, that the First Amendment was not violated because the action fell under the United States v. O’ Brien exception, and the Fifth Amendment was not violated by a delay in bringing forfeiture proceedings.
The Fourth Circuit agreed, stating that the government’s import restrictions conformed to the procedural requirements of the CPIA. Furthermore, the Court felt that it could not read any more additional requirements into the Act because it would involve the judiciary into a sensitive area of international relations best left to the Executive Branch and Congressional oversight. The Court wanted to preserve the balance that Congress sought to maintain between the need for notice and transparency and for confidentiality in diplomacy by not requiring more stringent restrictions on the notice requirements in the act. In turning to the APA claim, the Court stated that CBP was just enacting restrictions under the procedure in the CPIA and if Congress wanted to it could reject the restrictions or amend the law to provide a more detailed procedure. Finally, the Fifth Amendment claim was without merit due to the availability of a forfeiture procedure, which puts the burden on the government to prove the coins were restricted under the CPIA and has available exceptions to an import restriction.
-Jonathan M. Riddle
Decided: October 18, 2012
The Fourth Circuit Court of Appeals affirmed the district court’s judgment that granted the Government’s motion to dismiss a challenge to Revenue Ruling 69-59, which limits firearms being sold at out-of-state gun shows.
Hire Order Ltd. is in the business of dealing firearms and has been doing so in Virginia since 2008. Privott is also in the firearm business and resides in North Carolina. Both attended the Nation’s Gun Show in Virginia, and both refrained from transferring firearms to one another because of Revenue Ruling 69-59. Revenue Ruling 69-59 prohibits the sale of firearms at out-of-state gun shows. Hire Order and Privott brought an action challenging the Revenue Ruling’s interpretation of the Gun Control Act. Defendant moved to dismiss the complaint, and the district court granted the motion because the six-year statute of limitations barred the suit. The district court did not rule on the merits of the case.
The court of appeals noted that Hire Order and Privott made no claim that the district court relied upon the wrong statute of limitations, but that the district court erred in applying the date on which their claim accrued. In a facial challenge to an agency ruling the limitations period begins to run when the regulation is published by that agency. Revenue Ruling 69-59 was published in 1969, therefore the limitations period ran long before plaintiffs filed this cause of action.
Decided: October 18, 2012
Wilson Medical Center (“WMC”) appealed the Eastern District of North Carolina’s amended order and judgment entered on August 8, 2011, nunc pro tunc March 1, 2011. On appeal, the Court of Appeals vacated the district court’s amended order and judgment because the nunc pro tunc entry supplied an order that was in fact not previously made.
On December 10, 2008, Dr. Rose Glynne filed various federal and state law claims against WMC and several other defendants. During discovery, Glynne dismissed all her federal claims and all defendants except WMC. Since diversity jurisdiction was lacking, the district court refused to exercise supplemental jurisdiction and dismissed the federal suit in by a March 1, 2011 order (the “March Order”). The March Order allowed Glynne to refile her claims in in state court, but during the time that she was litigating her federal suit, the limitations period for the state claims expired. Nevertheless, a federal statute allowed Glynne 30 days from the date of the March Order to file her state claims. However, Glynne did not file her state court complaint until April 7, 2011. On May 13, 2011, WMC moved to dismiss Glynne’s state court complaint on the ground that Glynne did not file within the statutorily prescribed 30 day window. On May 26, 2011, Glynn filed a motion asking the district court, for the first time, to amend the March Order to allow her 40 days from March 1 to file in state court. On June 8, 2011, Glynne amended her motion and again asked the district court for 40 days from March 1 to file her complaint. On August 4, 2011, the district court entered an amended order and judgment that was the same in all respects to the March Order except that it allowed Glynne 60 days from March 1 to file her state claims. The amended order and judgment were entered “nunc pro tunc,” meaning that they were effective at the date of the March Order (March 1, 2011).
The Court of Appeals explained that the purpose of an entry nunc pro tunc is to correct mistakes or omissions in the record so as to reflect events that actually took place. The court also noted that an entry nunc pro tunc has traditionally been limited to correcting clerical or record keeping errors. In Glynne’s case, since nothing in the record indicated that the district court had in fact extended the limitations period under the March Order, the court held that the district court erred in entering the amended order and judgment.
– Graham Mitchell
Decided: August 14, 2012
The Fourth Circuit Court of Appeals affirmed the convictions of three defendants who were tried together for charges relating to the murder of certain government witnesses, the murder of a co-conspirator, and numerous other narcotics and firearms-related offenses. While defendant’s raised many issues on appeal, the primary holdings were that “the district court did not abuse its discretion in maintaining juror anonymity, and that the challenged hearsay statements were admissible based on the defendants’ conduct leading to the witness’ death.”
The offenses arise from the three defendants’ involvement in a Baltimore drug-trafficking organization known as “Special.” Gilbert was considered a “leader,” Dinkins was an “enforcer” who committed murders for hire, and Goods sold drug for the organization. On September 10, 2005, Dinkins was paid to shoot and killed Jemmison, a government informant. John Dowery, another Special member, witnessed a murder committed by two other Special members and became a government witness and informant. On October 19, 2005, Dinkins and West shot Dowery multiple times outside of his house. Dowery survived and identified Dinkins as the shooter. Dowery was relocated and measures were taken to protect his as a witness. Dowery decided to return home for Thanksgiving, and was shot several times by Gilbert and Goods. Dowery died from those wounds.
The main focus of the Fourth Circuit was whether the district court committed reversible error in deciding to empanel an anonymous jury, and whether the hearsay statements of Dowery were admissible.
The issues and circumstances under which a district court may empanel an anonymous jury presented a matter of first impression. In non-capital cases a district court may empanel an anonymous jury in any case in which the interests of justice so require. In capital cases, an anonymous jury may be empanelled when a district court determines, by a preponderance of the evidence, that a non-anonymous jury may jeopardize the life or safety of any person. The Fourth Circuit held that a district court may empanel an anonymous jury only in rare circumstances and when two conditions are met: (1) there is a strong reason to conclude that the jury needs protection, and (2) reasonable safeguards have been adopted to protect the rights of the accused. The Fourth Circuit applied these conditions and the Ross factors, and found that an anonymous jury was justified for all three defendants. The defendants participated in organized criminal activity, belong to an organization with the capacity to harm jurors, had previously engaged in attempts to interfere with judicial process, and had the incentive to do so again due to the severe sentences they faced. The district court took reasonable precautions to minimize the risk that the defendants’ rights would be infringed by downplaying the existence of an anonymous jury. The jury did not know their biographical information was withheld, protecting the defendants’ right to a presumption of innocence. The district court also took appropriate measures to protect the defendants’ right to a trial by impartial jury by allowing a juror questionnaire collaboratively drafted by all parties, a four day voir dire, and for zip codes, counties, and neighborhoods of potential jurors to be revealed to the parties.
The Fourth Circuit held that Dowery’s hearsay statements were admissible under Federal Rule of Evidence 804(b)(6) and the common law hearsay exception of forfeiture-by-wrongdoing. Dowery, who was shot by Dinkins, and then shot and killed by Goods and Gilbert, was made unavailable by the defendants’ intentional, or acquiesced in, wrongdoing to prevent him from testifying. As a matter of first impression, the Fourth Circuit held that traditional principles of conspiracy liability are applicable within the forfeiture-by-wrongdoing analysis.
Decided: June 14, 2012
The Fourth Circuit Court of Appeals affirmed a district court order dismissing Breton Lee Morgan’s action challenging his exclusion from participating in Medicare, Medicaid, and all other federally sponsored health care programs pursuant to 42 U.S.C.A. § 1320a-7(a)(3).
Morgan is a licensed medical physician in West Virginia. He pled guilty to one count of violating 21 U.S.C. § 843(a)(3) for “knowingly or intentionally . . . acquir[ing] or obtain[ing] possession of a controlled substance by misrepresentation, fraud, forgery, deception, or subterfurge.” Morgan accepted samples hydrocodone from pharmaceutical representatives for his personal use while representing to the pharmaceutical representatives that he would give the samples to his patients for medical purposes. Morgan was sentenced to thirty days imprisonment and three months of supervised release. Morgan was then notified that he would be excluded for five years from participating in Medicare, Medicaid, and all other federal health-care programs, pursuant to 42 U.S.C.A. § 1320a-7(a)(3). This statute requires the exclusion to be imposed on “[a]ny individual or entity that has been convicted for an offense which occurred after August 21, 1996, under Federal or State law, in connection with the delivery of a health care item or service” if that offense consists of a “felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.” Morgan appealed, arguing that a conviction must be for an offense that relates to financial misconduct to warrant exclusion. Morgan argued his offense did not include financial misconduct because he had neither a corrupt motive nor received any substantial pecuniary benefit.
The Fourth Circuit rejected this argument because Morgan was convicted to a fraud-related felony in connection with the delivery of health care. 42 U.S.C.A. § 1320a-7(a)(3) makes clear that exclusion is warranted when an offense relates to at least one of five categories: (1) fraud, (2) theft, (3) embezzlement, (4) breach of fiduciary responsibility, or (5) other financial misconduct. The presence of “other” financial misconduct simply means that the other four categories can themselves relate to financial misconduct. Morgan’s interpretation would render much of the statutory language superfluous, and would not serve the statute’s purpose. The statute is unambiguous regarding the question presented, and thus the statute’s plain meaning controls.
Decided: September 6, 2012
This case concerned a government petition for civil commitment of a convicted pedophile under the Adam Walsh Child Protection and Safety Act of 2006 (the Act). The Fourth Circuit remanded the district court’s denial of the government’s petition for commitment. The Court found that the district court committed reversible error by ignoring evidence of the defendant’s ongoing pedophilia and “serious difficulty” of reoffending as defined under the Act. Finally, the district court improperly held that the application of the Act to defendant violated his equal protection and due process rights.
Walter Wooden, who is cognitively impaired, was twice imprisoned for improper sexual acts with a minor. The first conviction was due to six arrests for improper sex acts with a minor while Wooden was under 18. Wooden was convicted the second time after being paroled in 1980. He was paroled in 2002 for the second conviction and ordered to undergo long-term sex offender treatment and testing. In 2005, Wooden admitted to having deviant sexual thoughts about children and to hiring himself out as a babysitter to local children. He also admitted to sexual contact with a young boy and attempted sexual contact with a 7 year old boy in his neighborhood. Wooden was not sure if the latter attack was a dream or not. Wooden was imprisoned again for violating paroled. While in prison, Wooden wrote a Christmas card to the 7 year old boy. The government instituted civil commitment proceedings and hired two experts, who analyzed Wooden and prepared a report. This report had several actuarial numbers that showed Wooden was likely to reoffend. Wooden’s expert testified that Wooden did not suffer from a “volitional impairment” required by the Act, and that his pedophilia had subsided over time. Wooden’s expert also stated that due to numerous factors, Wooden was not a danger to reoffend. Finally, Wooden’s own testimony revealed he felt bad about molesting children and knew that it was wrong. However, this testimony contradicted his earlier testimony where he stated that young children wanted to have sex with him. The district court gave more weight to Wooden’s expert and found that he did not suffer from a volitional impairment, and that under the Act, the government had to prove Wooden was dangerous, in that there was a 50% or more chance he would reoffend.
The Fourth Circuit first stated that the Act is not open to a due process or equal protection challenge due to a previous ruling. The Court stated that despite the deference due factual findings, the lower court ignored plausible evidence to the contrary. While the lower court could weigh which expert was more credible, it gave no weight to contrary evidence, and its finding that Wooden did not suffer from pedophilia was against the preponderance of the evidence. The Court had a similar ruling regarding Wooden’s likelihood of re-offense. The Court made sure to say that the Act does not require a 50% or “dangerousness” standard, but merely a “significant difficulty” in returning to society without reoffending. The Court went on to say that the lower court should have given more weight to the government’s experts, and most importantly, Wooden’s own contradictory testimony. In light of the circumstances, the Court found that the preponderance of the evidence showed Wooden was suffering from a “volitional impairment” and would have a “serious difficulty” returning to society.
Decided: August 30, 2012
On appeal, Timothy Tyrone Horton challenged his conviction for possession of a firearm while a convicted felon and the district court’s sentence of life imprisonment. The Court of Appeals affirmed Horton’s conviction but vacated his life imprisonment sentence. The court held that the district court erred in applying the murder-cross reference provision in the United States Sentencing Guidelines Manual (“the Guidelines”). According to the court, the district court’s error substantially increased Horton’s sentencing range under the Guidelines.
On August 10, 2007, Horton argued with his girlfriend after she learned that Horton had a gun. During the argument, Horton fired the gun three times. Horton’s girlfriend then confiscated the gun, locked herself inside her home, and called the police. The police then retrieved the gun from Horton’s girlfriend. Investigators subsequently discovered that the gun had been stolen during the breaking and entering of a gas station in July 2006. In February 2008, Horton confessed to possessing the gun during the August 10 incident. He was then arrested and charged with violating 18 U.S.C. § 922(g)(1) and 924, being a felon in possession of a firearm.
First, The Court of Appeals upheld Horton’s conviction. Horton argued that his conviction should be overturned because the district court erred in denying his motion for substitute counsel. Though the court assumed without deciding that the district court abused its discretion in denying Horton’s motion, it nevertheless held that Horton’s conviction should be upheld because the error was harmless and did not prejudice Horton. Horton further argued that the district court erred in denying his motion for a new trial because the Government failed to disclose material impeachment evidence before trial. The court rejected this argument because it concluded that Horton could not show that impeachment evidence would have affected the outcome of his trial.
Second, the court vacated Horton’s sentence and remanded for resentencing. During Horton’s sentencing, much of the testimony concerned Horton’s involvement in a murder that occurred on August 17, 2007. The presentence report (“PSR”) prepared by the Probation Office determined that the preponderance of the evidence supported a finding that Horton was responsible for the August 17 murder. Therefore, the PSR concluded that the August 17 murder was “relevant conduct” to the felony- in-possession charge and that a cross-reference to the murder offense under the Guidelines was warranted. The district court agreed and used the murder cross-reference provision to compute Horton’s sentence as life imprisonment. The Court of Appeals first noted that an offense can only be cross-referenced if it meets the criteria of one of the Guidelines’ relevant conduct rules. The court determined that the only relevant conduct rule that could possibly apply to Horton’s case had a threshold limitation on its applicability: the rule only applied with respect to offenses that were “groupable” under the Guidelines’ “Grouping Guideline.” The court then explained that there is a circuit split as to whether only the offense of conviction (the August 10 felony-in-possession) must be groupable or whether both the offense of conviction and the relevant conduct offense (the August 17 murder) must be groupable. The court followed the majority rule and determined that both the conviction offense and the relevant conduct offense must be groupable. Since murder is not a groupable offense under the Grouping Guideline, the court held that the relevant conduct rule did not apply to Horton’s case. Therefore, the court concluded that district court erroneously applied the murder cross-reference provision.
– Graham Mitchell
Decided: August 22, 2012
Defendant Larry Whitfield appealed his convictions and sentence arising from his role in a failed attempt to rob a bank and a “mid-escape home intrusion” that resulted in the death of an elderly woman who resided at the home. While Whitfield presented four bases for his appeal, the Fourth Circuit found only one to have merit – the district court’s error in instructing the jury on an offense not charged in Whitfield’s indictment. On this basis, the court vacated Whitfield’s conviction and mandatory life sentence and remanded the case for amendment of the judgment and resentencing.
The proceedings against Whitfield began when a grand jury returned a four-count indictment against Whitfield and his accomplice in an attempted bank robbery. Count Four of the indictment charged Whitfield with violating 18 U.S.C. § 2113(e). Notably, this statute encompasses three alternative offenses, but Count Four alleged only two of the three alternative offenses. The offense not alleged, the “death results offense,” formed the basis of the controversy surrounding the district court’s error.
While the death results offense was not included in the grand jury’s indictment, the district court nonetheless instructed the jury on this offense. Whitfield repeatedly objected to the inclusion of this offense, and the district court overruled his objections. Ultimately, the district court entered judgment against Whitfield, finding him guilty on Count Four and sentencing him based on the death results offense.
On appeal, the Fourth Circuit considered Whitfield’s claim “that his Fifth Amendment right to be indicted by a grand jury was abridged because he was convicted of an offense no charged in Count Four – the death results offense.” The court concluded that the district court “constructively amended” Count Four when it instructed the jury on the uncharged death results offense. Thus, because the court noted that a constructive amendment constitutes a fatal error and is reversible per se, it vacated Whitfield’s conviction of the death results offense and its resulting mandatory life sentence. In reaching this decision, the court discussed the distinction between a constructive amendment and an indictment error and held that the district court’s “error arose not from the indictment’s omission of an element of a charged offense [i.e, an indictment error] but from the district court’s instructions on an element of an uncharged offense – the death results offense – [i.e., a constructive amendment] on which Whitfield ‘as ultimately convicted and sentenced.’”
– Allison Hite
Decided: August 20, 2012
Westmoreland Coal Company petitioned the Court of Appeals for review after the Benefits Review Board reversed an administrative law judge’s denial of Mae Ann Sharpe’s claim for survivor benefits from her husband under the Black Lung Benefits Act, 30 U.S.C. § 932.
William A. Sharpe, a coal miner, was awarded total disability benefits in 1993, and received those benefits until he died in 2000. A week after Mr. Sharpe’s death, his widow, Mae Ann Sharpe, made a claim for survivor’s benefits. Within two months of Mrs. Sharpe’s claim being filed, Westmoreland Coal Company, Mr. Sharpe’s employer, filed a modification request seeking reconsideration of Mr. Sharpe’s 1993 award of benefits. In 2004, an administrative law judge (ALJ) agreed to modify the 1993 award, retroactively denying Mr. Sharpe’s living miner’s claim and rejecting Mrs. Sharpe’s survivor’s claim. The Benefits Review Board (BRB) affirmed the ALJ’s decision in 2005. Mrs. Sharpe petitioned for review and the Court of Appeals vacated and remanded the case for further proceedings, because the ALJ had failed to exercise the discretion accorded to him with respect to the Modification Request. On remand, the ALJ again denied Mr. Sharpe’s living miner’s claim and Mrs. Sharpe’s survivor’s claim, and the BRB reversed.
In reversing the ALJ, the BRB concluded that retroactively denying Mr. Sharpe’s living miner’s benefits award in order to prevent Mrs. Sharpe’s survivor claim would not render justice under the Black Lung Benefits Act. The Court of Appeals upheld the BRB’s decision ruling that the ALJ abused his discretion in granting the employer’s modification request, explaining that unlike the BRB’s previous ruling in Sharpe I, the BRB was mindful of the deferential standard of review. Since the BRB properly concluded that the ALJ was guided by erroneous legal principles and abused his discretion in granting Westmoreland’s modification request, the Court of Appeals held that the BRB was correct to reverse ALJ’s ruling outright, rather than vacating and remanding for further proceedings. The Court of Appeals further held that the Board appropriately applied the doctrine of offensive nonmutual collateral estoppel to prove the elements of Mrs. Sharpe’s survivor’s claim based on its prior ruling in Collins v. Pond Creek Mining Co. The Court of Appeals ultimately denied Westmoreland’s petition for review and affirmed the BRB decision denying modification of Mr. Sharpe’s living miner’s benefits award and granting survivor’s benefits to Mrs. Sharpe.
Judge Agee wrote in dissent, arguing that the majority erred by improperly substituting the judgment of the appellate court, in this case the BRB, for that of the ALJ. Judge Agee further explained that BRB did not adhere to its statutory standard of review that findings of fact in the decision under its review should be conclusive if supported by substantial evidence in the record considered as a whole. Since BRB did not give proper deference to the ALJ’s decision, Judge Agee argued that Westmoreland’s petition for review should be granted, reversing the BRB’s decision and affirming the ALJ’s decision denying Mrs. Sharpe’s survivor benefits.
Decided: August 20, 2012
The defendant filed a § 2255 motion requesting that his sentence for a violation of 21 U.S.C. § 846 be vacated as it was impermissibly based upon a prior drug conviction, pursuant to Carachuri-Rosendo v. Holder, 130 S.Ct. 257 (2010). The Fourth Circuit affirmed the district court’s dismissal of the defendant’s § 2255 motion as untimely and held that Carachuri is a procedural rule, and thus is not applied retroactively to cases on collateral review.
In 2004, Powell was convicted of conspiracy to possess with intent to distribute at least 5 kilograms of cocaine and at least 50 grams of crack cocaine, in violation of 21U.S.C. § 846. Based on a prior North Carolina drug conviction, Powell was sentenced to an enhanced minimum sentence of 240 months’ imprisonment. Almost six years later, Powell filed a § 2255 motion, seeking to vacate his sentence in light of Carachuri, which held that the question of whether a prior conviction is an “aggravated felony” as used in the Immigration and Nationality Act (“INA”) must be resolved by looking at the offense for which the defendant was actually convicted, not the offense for which he could have been convicted. Subsequently, the Fourth Circuit in United States v. Simmons, 649 F.3d 237, 241 (4th Cir. 2011) (en banc), held that, in deciding whether to enhance federal sentences based on prior North Carolina convictions, courts look to the maximum sentence that could have been imposed based on the defendant’s actual level of aggravation and criminal history. Powell argued that, in light of Carachuri and Simmons, the district court erroneously enhanced his sentence using his North Carolina conviction. The district court dismissed Powell’s motion as untimely, holding that Powell could not show that any court had held that Carachuri applied retroactively to cases on collateral review. Powell appealed the district court’s dismissal of his § 2255 motion.
The Fourth Circuit first noted that collateral review is designed to correct violations of long-established rights, but not to overturn cases where the existing law was faithfully applied. Rules will be applied retroactively only where the Supreme Court has announced a new substantive rule or a new procedural rule which implicates fundamental fairness or accuracy of the criminal proceeding. Carachuri articles a procedural rule, as it prescribes how a court should construe the INA and how to determine whether a prior conviction qualifies as an aggravated felony. Because it is a procedural rule, Carachuri is not retroactively applicable to cases on collateral review, and therefore the district court’s dismissal of Powell’s § 2255 as untimely was affirmed.
Judge King dissented on the basis of disagreeing with the majority’s analysis, but concurred in the judgment affirming the district court’s denial of the § 2255 motion. King found that the Carachuri rule alters the range of conduct or the class of persons punishable by the law, thus it is a substantive rule that applies retroactively. Because Powell received a lawful sentence, he was ineligible for § 2255 relief.
Decided: August 17, 2012
The Fourth Circuit Court of Appeals affirmed the district court’s judgment that the district court does not have jurisdiction over a habeas corpus petition where the petitioner has not been in prison for five years.
Eric Wilson is one of the “Norfolk Four,” a group of Navy sailors who were convicted of the rape and/or murder of Michelle Bosko, the wife of another Navy sailor. The investigation and prosecution of the four has subsequently been called into question with introduction of new evidence. As a result of his rape conviction, Wilson is required to and did register with the state sex offender registry. Wilson maintains that the consequences of registering as a sex offender, including limiting work advancement and not being able to adopt his stepson, amount to “custody” for purposes of the habeas corpus statute. Wilson filed this habeas petition five years after the completion of his sentence, maintaining his innocence, the Commonwealth of Virginia suppressed exculpatory evidence, and he was the victim of a corrupt investigative process. The district court dismissed the petition because Wilson was not “in custody” at the time of filing his petition, as is required by the relevant statute. The Court of Appeals affirmed, noting that to rule otherwise would expand habeas relief far beyond its purview, and render the “in custody” requirement meaningless.
Judge Davis wrote separately in concurrence to note that he believes Wilson is entitled to a federal forum to entertain his claims, but lack of jurisdiction under the habeas corpus statute does not foreclose relief under § 1983.
Judge Wynn wrote separately in a lengthy dissent concluding that Wilson is almost certainly innocent. The lack of a federal forum for his claims, according to Judge Wynn, is an unjust result that does not comport with the Constitution, prior jurisprudence, and habeas statutes.
Decided: August 16, 2012
Davis was convicted of various federal offenses arising from the armed robbery of an armored car employee, the murder of that employee, and a subsequent carjacking. Davis challenges the use of DNA evidence against him at trial, and the exclusion of expert testimony proffered by him in an attempt to undermine an eyewitness identification. The Court of Appeals affirmed the judgment of the District Court.
After the string of events leading to his indictment, but before trial, Davis filed a motion to suppress the use of all DNA evidence against him. Davis alleged that his DNA profile had been obtained by police and entered into the local police department DNA database in violation of his Fourth Amendment rights. The District Court declined to rule on the motion to suppress immediately, but after a jury found Davis guilty of the charges, the District Court denied the motion to suppress, prompting Davis’ appeal.
Davis alleged three separate Fourth Amendment violations relating to police collection and retention of his DNA: (1) the seizure of his clothing from the hospital room and its subsequent search; (2) the extraction of his DNA profile and testing in connection with a separate murder investigation; and (3) the retention of his DNA profile in the local police DNA database. The Court of Appeals addressed each of these arguments and found that there no Fourth Amendment violation in the seizure of the bag containing Davis’ clothing at the hospital, that the subsequent search of that bag was not unlawful since its contents were a forgone conclusion, and that there was a Fourth amendment violation in the extraction of Davis’ DNA profile from his clothing and the retention of that DNA profile in the local database.
While the extraction and retention of Davis’ DNA profile constituted Fourth Amendment violations, the Court concluded that the “good faith exception” to the exclusionary rule applied to both violations, such that the DNA evidence was not required to be excluded at trial.
The Court then addressed Davis’ argument that the District Court erred in excluding the testimony of his expert. Davis’ expert intended to testify that the lineup procedure used to obtain an eyewitness identification of Davis did not meet the good practices guidelines of the American Psychology-Law Society, and to other factors that can result in a misidentification. The Court of Appeals affirmed the District Court’s ruling that the testimony was not “scientific knowledge” that would be of benefit to the jury, and thus, was not admissible under Fed. R. Evid. 403, due to the low probative value of the testimony — based on the availability of significant other evidence of guilt — which was heavily outweighed by the danger of unfair prejudice, confusing of the issues or misleading the jury. The Court noted that even if the testimony was improperly excluded, it was harmless error.
In summary, the Court of Appeals affirmed the judgment of the lower court, finding that despite the noted Fourth Amendment violations, the good faith exception to the exclusionary rule applied, such that the DNA evidence at issue was not required to be excluded at trial, and that the exclusion of Davis’ proffered expert testimony was proper.
Judge Davis, dissenting:
The dissent disagreed with the majority’s application of the plain view exception to justify the seizure of the bag from the hospital and the subsequent search of the bag, and the majority’s refusal to apply the exclusionary rule. The dissent opined that the seizure and search of the bag was a constitutional violation of Davis’ privacy interests, and that the majority’s use of a “good faith exception” to the exclusionary rule was improper. The dissent would have vacated the judgment, reversed the denial of Davis’ motion to suppress the DNA evidence, and remanded the case to the lower court.
– Kassandra Moore
Decided: August 14, 2012
Defendant Douglas Chappell appealed his conviction under Virginia’s police impersonation statute, Virginia Code § 18.2-174. Chappell challenged the constitutionality of the statute, arguing that it violates the Free Speech Clause of the First Amendment. Specifically, Chappell argued that the statute’s clause prohibiting a person from “falsely assum[ing] or pretend[ing] to be [a law enforcement officer]” was unconstitutionally overbroad and was a content-based speech restriction that was not narrowly tailored. The Fourth Circuit dismissed Chappell’s challenges and affirmed his conviction.
After noting that facial invalidation of legislation is disfavored, the Fourth Circuit addressed Chappell’s general facial challenge. The court found that the “statute has a plainly legitimate sweep” because it not only serves the state’s public safety interests but also deters individuals from pretending to be police officers in order to evade state-imposed sanctions. The court chided Chappell for failing to bring an “as-applied challenge to his conviction” and for instead “hypothesiz[ing] the rights of third parties.” The court refused to invalidate the statute “just because Chapell can conceive of far-fetched applications involving innocent behavior.” Overall, the court was concerned that Chappell used hypothetical scenarios to challenge the statute in order to distract the court’s attention from his own illegal conduct.
Next, the Fourth Circuit addressed Chappell’s challenge under the overbreadth doctrine. The court cited the general rule that “an individual to whom a statute may constitutionally be applied may not challenge that statute on behalf of third parties.” It then acknowledged a narrow exception to this rule under the First Amendment overbreadth doctrine which allows individuals to challenge overly broad statutes even though their own conduct is clearly unprotected. However, the court found that Chappell’s challenge under this doctrine failed for several reasons. First, Chappell “failed to show any ‘realistic danger’ that the … statute will significantly compromise anyone’s First Amendment rights … .” Second, the court held that the statute does not compromise any recognized First Amendment protections but instead “prohibits a species of identify theft in which there is little or no communicative value.” Finally, the court held that even if the overbreadth doctrine applied to Chappell’s challenge, his challenge would fail because he did not satisfy the two requirements for invalidating a law that restricts speech: that the realistic constitutional applications of the law be substantial in both an absolute sense and relative to the statute’s plainly legitimate sweep.
Finally, the Fourth Circuit dismissed Chappell’s argument based on the Supreme Court’s decision in United States v. Alvarez which held the Stolen Valor Act to be “facially unconstitutional as a content-based restriction on speech.” Contrary to Chappell’s arguments, the court held that Alvarez supports its conclusion that Virginia’s statute is not facially invalid under the First Amendment because the Alvarez court recognized “the general validity of laws prohibiting ‘the false representation that one is speaking as a Government official or on behalf of the Government.’”
– Allison Hite
Decided: August 13, 2012
The Court of Appeals affirmed Charles Lee Smoot’s conviction for being a felon in possession of a firearm, rejecting Smoot’s 18 U.S.C. § 922 challenges to his conviction.
In 2008, an anonymous call to the Hyattsville, Maryland, police led to Charles Smoot’s arrest on an outstanding warrant. Smoot was seized in the backyard of the address given by the anonymous citizen, and during the ensuing pat down, an officer seized a loaded .38 caliber revolver from Smoot’s waistband. Smoot was indicted in 2009 for being a felon in possession of a firearm. Prior to trial, Smoot filed objections to the government’s proposed jury instructions, positing that District of Columbia v. Heller, created an additional element of a § 922 offense requiring the government to affirmatively rebut a presumption that his possession of the revolver was for legitimate self-defense purposes. The district court rejected Smoot’s arguments, and he was convicted in 2010. At his sentencing in 2011, the court denied Smoot a decrease in his offense level on the basis of acceptance of responsibility. Smoot timely appealed his conviction and sentence.
On appeal, Smoot challenged § 922 as-applied, arguing that even as a convicted felon, he was entitled under the Second Amendment to possess a firearm in his home for self defense. The Court of Appeals summarily rejected this argument, referring to the “longstanding prohibitions on the possession of firearms by felons,” as presumptively lawful regulators measures under Heller. Furthermore, under United States v. Chester, decided after Heller, a two-prong test was established for assessing Second Amendment challenges. The first prong requires an evaluation of whether those rights are “burdened or regulated” by the statute in question. Under the second prong, the statute must pass constitutional muster. In order for Smoot to rebut the presumption of lawfulness of § 922 as applied to him, he must show that his factual circumstances remove his challenge from the realm of ordinary challenges. The Court of Appeals held that since Smoot’s criminal history was egregious, he clearly could not be considered a law-abiding responsible citizen under Heller or avail himself of any remedies under Heller, affirming the decision of the district court.
Decided: August 13, 2012
This case addressed an appeal from a decision by the Board of Immigration Appeals (the “BIA”), affirming the defendant’s ineligibility for a special rule cancellation of removal. The Material Support Bar prohibits cancellation where a defendant provided material support to a terrorist organization, whether the support was rendered voluntarily or under duress. In denying Barahona’s petition for review, the Fourth Circuit affirmed the BIA’s conclusion that Barahona was ineligible for cancellation because he involuntarily supported a terrorist organization prior to entering the United States.
Barahona, a native of El Salvador, entered the United States illegally and filed for asylum in 1987 and 1995. A hearing before an immigration judge (“IJ”) on the second asylum petition held in 2009 found that Barahona was removable. Barahona was permitted to apply for a “special rule” cancellation of removal pursuant to section 203 of the Nicaraguan and Central American Relief Act of 1997 (“the NACARA”), which authorizes cancellation of removal where the inadmissible or deportable alien satisfies certain criteria. Pursuant to 8 U.S.C. § 1182(a)(3)(B)(i)(I), an alien is inadmissible if he has engaged in “terrorist activity by providing ‘material support’ to a terrorist organization.” Material support is further defined as providing, inter alia, a safe house for members of a terrorist organization. Prior to arriving in the United States, members of an anti-government Salvadoran guerilla group, known as the “FMLN” (the Frente Farabundo Marti Para la Liberción Nacional), used the kitchen of Barahona’s Salvadoran home. While noting that Barahona was under duress when he accommodated the FMLN, the IJ found that there was no exception for duress or involuntariness under the Material Support Bar, thus Barahona did not qualify for special rule cancellation. Barahona appealed to the BIA, which affirmed his ineligibility. On appeal to the Fourth Circuit, Barahona argued that the BIA erred by deeming him ineligible for NACARA relief.
In this case, Barahona presents a question of law: whether the Material Support Bar excludes involuntary support, or support of a terrorist organization under duress. The BIA examined the Material Support Bar and found no exception for duress or involuntary contributions. Fourth Circuit afforded deference to the BIA, as it is the agency in charge of interpreting INA statutes, and found that Congress did not intend to create an involuntariness exception to the Material Support Bar. Congress did, however, created a discretionary waiver provision, vested in the Secretary of State and the Secretary of Homeland Security, for aliens who provided material support, but excepted from such a waiver those who voluntarily provided such support. There has been no discretionary waiver of Barahona’s material support of the FLMN in this case. Accordingly, Barahona’s petition for review of the BIA’s decision was denied.
Circuit Judge Wynn dissented on the basis that “passive acquiescence to the crimes of terrorists does not constitute an ‘act’ that ‘affords material support… to a terrorist organization.’” In characterizing the findings of the IJ and the BIA, Wynn states: “[T]he Immigration Judge and the Board of Immigration Appeals essentially found that — under threat of death — Barahona did not prevent the guerillas from occupying his home and using his kitchen.” This sort of passive act is not tantamount to committing an act in support of a terrorist organization.
Decided: August 10, 2012
The Fourth Circuit Court of Appeals vacated and remanded Mirna Del Carmen Gomez’s sentence because the district court erred in calculating her sentence under the modified categorical approach.
Gomez pleaded guilty to unlawful reentry of a deported alien after a felony conviction. The district court used her prior child abuse conviction as a crime of violence under the guidelines and added sixteen levels to her sentence. The appellate court, joining other circuits reasoning, determined that the modified categorical approach may only be used for statutory offenses in which the statute itself is divisible. A statute is divisible when some levels of the statute constitute crimes of violence and others do not. Supreme Court precedent does not allow a district court to determine whether the specific conduct of the defendant constituted a purposeful, violent, and aggressive act. If the modified categorical approach was used on statutes that are indivisible, this would require a district court to look into the actions of the defendant and resolve whether they amounted to a crime of violence. The Maryland statute for child abuse which Gomez previously pleaded guilty to is divisible by two categories: physical and sexual abuse. Further, the physical abuse is divided into other categories. However, the statute is not divided into forceful and non-forceful acts which is the critical requirement for the modified categorical approach.
Judge Niemeyer wrote separately in dissent stating that the majority has adopted a new approach not mandated by, and indeed undermines, Supreme Court precedent, conflicts with Fourth Circuit precedent, and aggravates a split in the circuits.
Decided: August 10, 2012
Brehm appealed from the judgment of the United States District Court for the Eastern District of Virginia, challenging the jurisdictional basis for the indictment underlying his conviction. The Court of Appeals affirmed his conviction.
Brehm, a citizen of South Africa, pled guilty to a federal charge of assault resulting in serious bodily injury, under the condition that he be allowed to appeal the jurisdictional basis of the indictment. Brehm was indicted after he allegedly stabbed a British subject at Kandahar Airfield. At the time of the incident, both men were employed with private contractors supporting the NATO war effort in Afghanistan. On appeal, Brehm argued that the indictment underlying his conviction improperly relied on the Military Extraterritorial Jurisdiction Act (“MEJA”), in that MEJA cannot be constitutionally applied to him. Brehm further asserted that the government did not establish sufficient nexus between him and the U.S. to support the exercise of criminal jurisdiction, since, prior to his indictment, neither he nor the victim had every been in the U.S.
The Court of Appeals reviewed each of Brehm’s arguments in turn. First, the Court addressed Brehm’s argument that MEJA, while constitutionally valid on its face, could not constitutionally be applied to him. The Court noted that Article I, Section 8 of the Constitution grants Congress the express authority to “raise and support armies” and to “make all Laws which shall be necessary and proper” to adequately support the armed forces. Since Armies are expected to operate in foreign lands, MEJA specifically applies to “conduct outside of the United States” and, as such, reasonably anticipates application to foreign citizens. Furthermore, Brehm signed a “Foreign Service Employment Agreement” with his employer that provided that he understood and accepted that he may be subject to civilian criminal jurisdiction under MEJA because he was accompanying the U.S. Armed Forces outside of the U.S. As such, the Court held that MEJA was constitutional as applied to Brehm.
The Court then addressed Brehm’s argument that his prosecution violated Due Process, as the government failed to establish a sufficient nexus between him and the U.S. The Court stated that while Brehm did not target his conduct toward American soil or American commerce, his actions affected significant American interests at Kandahar Airfield — such as the preservation of law and order on the base, the maintenance of military-related discipline, and the reallocation of Department of Defense resources to confine Brehm and investigate the incident. As such, the Court felt that, even though Kandahar Airfield is not territory of the U.S., the American influence at Kandahar Airfield was so pervasive that it was a suitable proxy for due process purposes, such that imposing American criminal law there was not arbitrary. Additionally, the Court found no inherent unfairness in Brehm’s prosecution, noting that Brehm’s acknowledgement and acceptance of the warnings within his employment agreement regarding the criminal jurisdiction asserted by the U.S. constituted fair warning and notice that he could be subject to criminal prosecution in the U.S.
In summary, the Court of Appeals affirmed Brehm’s conviction in the lower court, finding that MEJA was constitutional as applied to his case, and that his prosecution comported with due process requirements.
– Kassandra Moore
Decided: August 10, 2012
The Fourth Circuit affirmed the district court’s denial of Mubdi’s motion to suppress evidence seized during a traffic stop, finding that the police officers involved in the traffic stop at issue had probable cause to execute the stop and reasonable suspicion to prolong the traffic stop. Additionally, the Fourth Circuit affirmed the district court’s imposition of a 240-month sentence for Mubdi’s drug convictions based on Supreme Court precedent establishing that a court’s decision to increase a minimum sentence based on judicial factfinding does not violate any rights under the Fifth and Sixth Amendments of the Constitution.
Mubdi first argued that the officers who carried out the traffic stop underlying his claims lacked probable cause to believe that he was speeding or following too closely. The Fourth Circuit disagreed, noting that an officer’s visual observation of a driver’s speed “may alone be sufficient to establish probable cause.” The Court found that the “touchstone of the probable cause inquiry is – as always – reasonableness,” and the Court determined that the officers’ visual speed estimates were reasonable given the facts of the case. Thus, the Court found sufficient support establishing that the officers had probable cause to carry out the traffic stop and found no clear error in the district court’s conclusion that the officers reasonably believed that Mubdi was speeding.
Next, the Court affirmed the district court’s alternative finding supporting the officers’ decision to institute the traffic stop based on their belief that Mubdi was following too closely behind one the patrol cars. Ultimately, the Court determined that even if the officers’ were mistaken in their estimate of the distance between the two cars, “such a mistake is patently a mistake of fact.” The Court noted that as long as an officer’s mistake in making a traffic stop is reasonable, such mistake does not undermine a finding of probable cause. It then found any mistake on the officers’ part to be reasonable under the circumstances and affirmed the district court’s decision that the traffic stop was justified on this alternative basis.
With respect to whether the officers unlawfully prolonged the traffic stop, and consequently violated Mubdi’s constitutional rights, the Court first found that the officers’ actions at issue “were no more intrusive than necessary and that they diligently pursued a means of investigation to confirm or dispel their suspicions.” The Court highlighted the factual circumstances that supported the officers’ decision to extend the traffic stop and to conduct a canine sniff of Mubdi’s car. The Court reviewed the district court’s decision based on a totality of the circumstances analysis and affirmed the district court’s decision that the officers established the reasonable suspicion needed to support the extended duration of the traffic stop. Therefore, the Court upheld the district court’s denial of Mubdi’s motion to suppress on this basis.
Finally, the Court concluded that Supreme Court precedent foreclosed Mubdi’s argument that the district court violated his Fifth and Sixth Amendment rights by increasing his statutory mandatory minimum sentence for the drug offenses based on improper judicial factfinding. Accordingly, the Court affirmed the sentence imposed by the district court.
– Allison Hite
Decided: August 8, 2012
Michael Dwayne Durham was indicted by a Virginia grand jury on three counts of selling drugs and was later arrested and jailed for several months. The indictment of Durham resulted from the investigative work of David L. Horner, a police officer serving on a regional drug task force. Horner’s investigation had primarily relied upon a confidential informant who had purchased the drugs from Durham. The problem with the State’s case against Durham, however, was that the actual perpetrator of the crimes was a man named Michael David Durham. Michael Dwayne Durham—the suspect in custody and who the Virginia authorities had located in Memphis, Tennessee and transported to Virginia—had absolutely nothing to do with the drug transactions and had not lived in Virginia in over a decade. After the prosecutor realized the mistaken identity and dropped the charges, Durham brought a civil lawsuit against Horner, alleging his federal constitutional rights had been violated under 42 U.S.C. § 1983 and that he had been maliciously prosecuted under state law. The district court granted summary judgment for the defendant on the basis of his qualified immunity as a law enforcement agent.
On appeal, the Fourth Circuit upheld the district court’s ruling. The court applied its two-step approach for determining whether a police officer’s qualified immunity defense could be defeated: “first whether a constitutional violation occurred and second whether the right violated was clearly established.” The majority opinion, written by Judge King, found that no constitutional violation had taken place because Durham’s arrest and prosecution had been supported by probable cause. The court stated that “an indictment, fair upon its face, returned by a properly constituted grand jury, conclusively determines the existence of probable cause.” In addition, the court found that there was sufficient evidence for a reasonable police officer to believe that the Durham who was arrested was the same Durham who was actually conducting the drug deals. Such incriminating evidence included: the falsely accused Durham had a local address as a result of previously living in the area; he had a Tennessee driver’s license and the drug dealer had a Tennessee license plate; and Durham had two past convictions for drug-related incidents.
In dissent, Judge Wynn argued that summary judgment was inappropriate because there was a genuine dispute of fact as to whether Horner acted reasonably in confirming the accuracy of the name supplied by his informant. Judge Wynn also took issue with the majority’s discussion of the law on qualified immunity. According to Judge Wynn, the United States Supreme Court had already rejected the proposition that a grand jury indictment that is proper on its face conclusively establishes probable cause.
-John C. Bruton, III
Decided: July 26, 2012
This case addressed whether an employee’s authorized access of a computer or information on a computer could form the basis of a violation of the Computer Fraud and Abuse Act of 1986 (CFAA). The Fourth Circuit held that, though the defendants may have misappropriated information, WEC’s inability to allege any unauthorized access of a computer or information on a computer failed to give rise to a violation of the CFAA. Because WEC failed to state a claim for which the CFAA can grant relief, the district court’s dismissal of the claim was affirmed.
The CFAA permits parties who suffer damages to bring a civil action for compensatory damages, injunctive relief, or equitable relief pursuant to 18 U.S.C. § 1030(g). Miller worked as the Project Director for WEC until he suddenly resigned in April 2010. Shortly thereafter, Miller made a presentation to a potential WEC customer on behalf of WEC’s competitor, Arc. WEC contends that Miller and his assistant, Kelley, acting at Arc’s direction, improperly downloaded proprietary information, such as pricing terms, pending projects, and the technical capabilities of WEC, in violation of the CFAA. WEC sued Miller, Kelley, and Arc, alleging nine state-law causes of action and a violation of the CFAA. WEC argued that Miller and Kelley breached their fiduciary duties to WEC and therefore either (1) lost all authorization to access the confidential information at issue or (2) exceeded their authorization. Miller, Kelley, and Arc moved for dismissal pursuant to Fed. R. Civ. P. 12(b)(6) The district court granted the motion on the grounds that WEC did not establish a violation of company policies relevant to access and therefore failed to establish liability under the CFAA.
The Fourth Circuit assessed the scope of “without authorization” and “exceeds authorized access,” noting two different approaches. In Int’l Airport Ctrs., LLC v. Citrin, 440 F.3d 418, 420–21 (7th Cir. 2006), the Seventh Circuit held that “when an employee accesses a computer or information on a computer to further interests that are adverse to his employer, he violates his duty of loyalty, thereby terminating his agency relationship and losing any authority he has to access the computer or any information on it.” District courts within the Fourth Circuit have followed the Ninth Circuit’s approach, which interprets the terms literally and narrowly, limiting the application to situations where an individual accesses a computer or information without permission. United States v. Nosal, 676 F.3d 854, 863 (9th Cir. 2012) (en banc); LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1134–35 (9th Cir. 2009). The Fourth Circuit rejected the approaches of the Seventh and Ninth Circuits and instead concluded that “an employee is authorized to access a computer when his employer approves or sanctions his admission to that computer,” but exceeds authorized access “when he has approval to access a computer, but uses his access to obtain or alter information that falls outside of the bounds of his approved access.” Notably, this interpretation did not extend to the improper use of validly accessed information. WEC failed to establish that Miller and Kelley accessed a computer or information on a computer without authorization, though they may have misappropriated information for an improper use. Accordingly, there was no CFAA violation and Arc cannot be held liable. The district court’s judgment of dismissal was affirmed.
Decided: July 26, 2012
The Fourth Circuit Court of Appeals affirmed the convictions of Mouzone and Fleming, gang members who were jointly tried and convicted for racketeering and drug offenses. The jury convicted Mouzone and Fleming after an eight-day trial, and the appellate court found no reversible error.
Mouzone and Fleming were members of Tree Top Piru (“TTP”) which is a subset of the Bloods gang that developed in the Maryland prison system. As gang members, Fleming and Mouzone participated in the gang’s drug-trafficking and other illicit activities. At trial, the government introduced evidence regarding their participation in two murders. The first murder was of a man in retaliation for his testimony against another TTP member. The second was in retaliation for selling marijuana in their neighborhood because he was not a TTP member.
The defendants asserted errors regarding evidence admitted at trial, jury instructions, improper joinder of criminal charges, and sentencing. The Fourth Circuit held there were no reversible errors among any of these allegations. One noteworthy holding in this appeal related to the challenged jury instructions for the conspiracy to violate RICO charge. The defendants allege that to conspire to violate RICO requires a managerial role in the enterprise’s affairs, and the district court did not instruct the jury properly on this issue. The Fourth Circuit joined all the other circuits that have considered this issue and held that liability for conspiring to violate RICO does not require a role in directing the enterprise.
Decided: July 25, 2012
Plaintiffs brought multiple class action claims against Bank of America Corporation (BOA) for alleged violations of certain provisions of the Employment Retirement Income Security Act of 1974 (ERISA). The district court issued an order dismissing these class action claims. The court of appeals agreed with the lower court that the plaintiffs failed to state a claim upon which relief may be granted, and affirmed the district court’s judgment.
The plaintiffs and the class they represent are current and former employees of BOA, and participants in BOA’s pension plan. The thrust of plaintiffs’ claims is “that the Bank of America Pension Plan (‘the Plan’) employed a normal retirement age (‘NRA’) that violated ERISA in calculating lump sum distributions and further ran afoul of ERISA’s prohibition of ‘backloading’ in the calculation of benefit accrual.”
On appeal, the plaintiffs largely abandoned their claim regarding the NRA as used to calculate lump sum distributions, and the court agreed that the Plan’s NRA complies with ERISA in that respect. The court of appeals then addressed the plaintiffs’ second contention, that the Plan’s NRA violates ERISA’s backloading provisions. The court found this argument to lack merit since ERISA’s backloading rules do not apply once a plan participant reaches the NRA. In other words, “if the anti-backloading rules only restrict benefit accrual calculations prior to NRA, Plaintiffs cannot plausibly claim that a benefit calculation after NRA runs afoul of the backloading provisions of ERISA.”
The court also briefly addressed the plaintiffs’ claim that the Plan’s Summary Plan Description (SPD) affirmatively misled participants by describing an NRA different from that actually utilized by the Plan. While the court of appeals found that the district court’s holding with regard to this claim was erroneous, it affirmed the lower court’s judgment on other grounds, ultimately finding that the SPD adequately informed Plan participants of the manner in which benefits are calculated.
In summary, the court of appeals agreed with the district court that the plaintiffs failed to state a claim upon which relief may be granted with respect to the Plan’s NRA as used to calculate benefit accrual or the alleged violations of the backloading provisions, and affirmed the district court’s judgment.
– Kassandra Moore
Decided: July 25, 2012
The Fourth Circuit granted defendant Temitope Akinsade’s petition for writ of error coram nobis and vacated his conviction, finding that the district court’s admonishment during its Rule 11 proceeding was insufficient to correct Akinsade’s attorney’s mistake and additionally finding the attorney’s mistake to be a “but for” cause of Akinsade’s decision to enter a guilty plea. This case arose when immigration officials arrested Akinsade nine years after he entered a guilty plea based on his attorney’s advice that such plea could not result in his deportation from the United States. While the district court judge reviewed the ramifications of Akinsade’s plea with Akinsade during a Rule 11 hearing, including the possibility of deportation, Akinsade relied on his attorney’s assurances in proceeding with his guilty plea.
After his arrest, and under threat of deportation, Akinsade filed a petition for writ of error coram nobis in federal district court, arguing that his Sixth Amendment rights were violated due to his attorney’s errant advice. The district court denied Akinsade’s petition, finding that the attorney’s affirmative misrepresentations to Akinsade amounted to constitutionally deficient assistance of counsel, but concluding that Akinsade was not prejudiced.
The Fourth Circuit disagreed with the district court’s reasoning and determined that Akinsade met the four requirements needed to seek the relief provided by a writ of error coram nobis. Specifically, the Court found that (1) Akinsade could not seek relief under typical remedies, (2) valid reasons existed for Akinsade’s failure to attack his conviction at an earlier time, (3) the risk of deportation amounted to an adverse consequence sufficient to satisfy the case or controversy requirement of Article III, and (4) the attorney’s “misadvice” was an error of the “most fundamental character” such that coram nobis relief was required to achieve justice. Additionally, in rendering its decision, the Court clarified a district court’s obligations during Rule 11 proceedings and found that when faced with a claim of ineffective assistance of counsel, a district court’s admonishment must correct attorneys’ deficient performances in order to overcome any prejudice to the defendants. Therefore, because the Court found that the district court’s admonishment did not correct the particular “misadvice” given by the attorney in this case, and because the Court found the “misadvice” to be a “but for” cause of Akinsade’s decision to enter his guilty plea, it concluded that the misadvice prejudiced Akinsade in a manner necessitating coram nobis relief.
– Allison Hite
Decided: July 23, 2012
In this case, the Fourth Circuit held that a criminal defendant sentenced to a fifteen-year minimum sentence could not have his sentence reduced where, in both the plea agreement and at the plea hearing, the government mistakenly misstated the defendant’s potential sentence as a ten-year maximum.
As part of a written plea agreement, William Davis pleaded guilty to the unlawful possession of a firearm by a convicted felon in the U.S. District Court for the Northern District of West Virginia. The agreement between the government and Davis provided that “the maximum penalty to which the defendant will be exposed by virtue of his plea of guilty…is imprisonment for a period of (10) ten years.” The agreement failed, however, to inform Davis that if he were designated by the court as an “armed career criminal,” he would be subject to a sentence enhancement and a resulting fifteen-year mandatory minimum sentence. In addition to the misleading plea agreement, at the plea hearing the government reiterated, and the district judge explained in the plea colloquy, that Davis’s prison term would be not more than ten years. Nonetheless, at the subsequent sentencing hearing, the district judge accepted a presentencing report from the probation officer that indicated that Davis had three prior convictions for violent felonies and was thus considered an armed career criminal under federal sentencing guidelines. Pursuant to the defendant’s status as a thrice convicted felon, the judge imposed on Davis the enhanced sentence of fifteen years in prison.
On appeal, Davis sought to have his sentence reduced, arguing that the “government breached the plea agreement by failing to adhere to its promise of a ten-year prison sentence.” The Fourth Circuit rejected Davis’s claim because, while acknowledging that a plea agreement represents a binding contract between a defendant and the government, in this case the government agreed to “make a series of nonbinding recommendations,” with no explicit promises regarding the prison term. Although the agreement contained a misstatement regarding the length of the potential sentence, according to the court, the agreement also “advised that the district court had the final say regarding his sentence.” Furthermore, the agreement provided that “the Court is not bound by these sentencing recommendations and that the defendant has no right to withdraw a guilty plea if the Court does not follow the sentencing recommendations.” Accordingly, the court held that Davis was never denied the benefit of his plea bargain, and therefore, his sentence would not be reduced.
The court also reasoned that even if the government had breached its promise to Davis, the district judge, bound by the strictures of the sentencing guidelines, had no discretion to impose a sentence less than the statutorily mandated fifteen years. Regardless of the terms of a plea agreement, the court stated, district judges are compelled by federal law to impose an enhanced sentence for a defendant classified as armed career criminal. Thus, the court recognized that neither the district judge nor the appellate panel had the authority “to impose an unlawful sentence.”
Senior U.S. District Court Judge Kiser of the Western District of Virginia, sitting by designation, concurred with the court’s result, writing that the government did in fact breach a promise to Davis. Judge Kiser argued that, despite the absence of an explicit guarantee in the plea agreement, it was reasonable for Davis to believe that he was being promised a maximum sentence of ten years due to both the mistaken assurances from the government and the trial judge’s failure to clarify that certain factors in Davis’s presentence report could result in an enhancement. Nonetheless, Judge Kiser concluded that Davis was not entitled to a reduced sentence because, under the plain error doctrine, Davis could not show that his sentencing outcome was prejudiced by the government’s breach, i.e., the broken promise had no effect on his actual terms of imprisonment because the sentence was subject to a mandated statutory scheme.
-John C. Bruton, III
Decided: July 18, 2012
The Equal Employment Opportunity Commission (EEOC) appealed from the denial of judicial enforcement of an administrative subpoena served in the course of investigating charges brought against Randstad. The Court of Appeals reversed the order of the district court, holding that the EEOC had authority to investigate the charges under two independent bases and the materials requested were within the scope of the EEOC’s investigatory authority.
Kevin Morrison, a resident of Maryland, was born in Jamaica and cannot read or write English. He filed a charge of discrimination with the EEOC asserting that Randstad, a temporary staffing agency, terminated his employment pursuant to a requirement that its employees read and write English for light industrial clients that use laborers in manufacturing or warehouse settings. Morrison alleged that Randstad’s literacy policy violated Title VII of the Civil Rights Act by discriminating against his national origin. Two years later, after a psychological evaluation revealed he had an intellectual disability that prevented him from reading and writing, Morrison filed an amended charge asserting that the literacy policy violated the Americans with Disabilities Act (ADA). The EEOC filed an administrative subpoena in the course of its investigation of Randstad that Randstad resisted in part. When the EEOC sought judicial enforcement, the district court denied relief because it disagreed with the EEOC’s alleged factual nexus between national origin discrimination and literacy requirements and rejected the EEOC’s arguments that the ADA claim should relation back to the date the Title VII claim was filed.
The Court of Appeals began by noting that a district court’s role in enforcing administrative subpoenas is “sharply limited,” and that to obtain judicial enforcement the EEOC need only demonstrate that it is authorized to make an investigation and the materials requested are relevant. A district court reviewing an administrative subpoena is not to determine the underlying claim on the merits; that role is delegated to the discretion of the administrative agency. Explaining that the EEOC need only present an arguable basis for jurisdiction over the investigation, the Court of Appeals held that the amended charge of discrimination based upon the same set of factual allegations allowed the charge to relate back to the date of the original charge, thus giving the EEOC authority to investigate the claims under both the ADA and Title VII. Once the EEOC is on notice that a particular employer may be violating discrimination statutes, it may access virtually any material that might cast light on the allegations, a broad definition of relevance. Holding that the district court committed legal error by applying an unnecessarily strict standard of relevance, the Court of Appeals noted that applying the correct standard, with deference to the EEOC’s definition of relevance, led to the conclusion that all of the EEOC’s requested materials fell within the broad definition applicable to EEOC administrative standards. Further holding Randstad’s affidavit that production of the materials would be unduly burdensome was insufficient as a matter of law, the Court of Appeals reversed the district court and remanded the case for entry of an order granting the EEOC’s application for enforcement.
-Nora Anne Bennani
Decided: July 17, 2012
In this case, the court assessed whether or not a state burglary statute “substantially correspond[ed]” to the generic definition of burglary outlined by the Supreme Court in Taylor v. United States, 495 U.S. 575 (1990), and thus constituted a “crime of violence” for sentence-enhancement purposes. The Fourth Circuit held that, because the statute at issue required proof of an unlawful entry into a building or habitation and the intent to commit a felony, theft, or assault, Bonilla’s prior conviction under the statute qualified as a “crime of violence” for sentencing purposes. The Fourth Circuit affirmed district court’s sentencing judgment.
Bonilla pleaded guilty to a one-count indictment charging him with knowingly entering the United States without the consent after having been previously excluded, deported, or removed, in violation of 8 U.S.C. § 1326. The presentence report (“PSI”) prepared in the matter recommended a sixteen-level increase to Bonilla’s base offense level pursuant to U.S.S.G. § 2L1.2(b)(1)(A) because Bonilla had previously convicted of a crime of violence, burglary of a habitation. The district court accepted the recommendation and sentenced Bonilla to 37 months’ imprisonment. Bonilla timely appealed.
Bonilla argued that his state conviction did not satisfy the definition of generic burglary under Taylor, and thus it does not constitute a crime of violence. In Taylor, the Court found that the Armed Career Criminal Act’s (“ACCA”), 18 U.S.C. § 924(e), provision regarding “violent felonies” encompassed burglary. The Court emphasized that the modern uniform definition of burglary is any unlawful or unprivileged entries into, or remaining in, a building or other structure, with intent to commit a crime, or anything that “substantially corresponds” to the definition. The Fourth Circuit adopted this analysis for purposes of interpreting “crime of violence.” The statute under which Bonilla was originally convicted makes it a crime to enter a building or habitation without the consent of the owner in order to commit or attempt to commit a felony, theft, or assault. Bonilla conceded that this conviction included the Taylor elements, but argued that it does not require that the intent to commit a crime exist at the time of entry. The Fourth Circuit rejected this argument, finding that the statute “substantially correspond[ed]” to Taylor’s generic definition of burglary because it required proof of an unlawful entry into a building or habitation and the intent to commit a felony, theft, or assault. Accordingly, Bonilla’s prior conviction qualified as a “crime of violence” for sentencing purposes, notwithstanding that Bonilla might not have formulated his intent prior to the unlawful entry. The Fourth Circuit affirmed district court’s sentencing judgment.
Chief Judge Traxler dissented on the basis that Texas Penal Code section 30.02(a)(3) did not constitute a crime of violence under U.S.S.G. § 2L1.2. Traxler reasoned that Bonilla’s conviction did not include a critical Taylor element — that a defendant’s intent to commit a crime exist contemporaneously with the unlawful entry or unlawful remaining.
Decided: July 16, 2012
The Fourth Circuit Court of Appeals held that the district court did not err in deciding that Sean R. Francis was not a “sexually dangerous person” within the meaning of 18 U.S.C. § 4248 and therefore was not required to be civilly committed following his prison term.
Sean R. Francis has a twelve year history of placing threatening telephone calls to randomly-selected telephone numbers. Francis threatened to rape the women who answered the phone, asked them about their sexual behavior, stated he had been watching them, threatened to harm them if they contacted police, and threatened to kill them. Additionally, Francis has admitted to raping or assaulting 27 female victims, but later recanted these confessions. Over the course of a decade, he has been imprisoned four times and each time shortly after release has violated the terms of his supervised release. Before Francis was scheduled for release from prison in February 2010, the government filed a certificate in the district court stating that the Bureau of Prisons had issued a preliminary determination that he was sexually dangerous. This certificate stayed Francis’ release pending an evidentiary hearing. At the hearing, Francis testified that he made the threatening phone calls due to his anger at his mother. His mother had told him when he was 13 years old that she received an upsetting, sexually explicit phone call. He stated that his parents divorced when he was young, and during high school his mother physically and emotionally abused him. The hearing also included the testimony of four licensed clinical psychologists. Two experts presented by the government concluded that Francis was sexually dangerous; two experts presented by Francis testified that he was not.
The government was required to prove three elements by clear and convincing evidence: Francis has engaged in prior sexually violent conduct, Francis suffers from a serious mental illness, and Francis would have serious difficulty restraining from sexually violent conduct if released from custody. The district court concluded that the government did not prove the final element by clear and convincing evidence, and was ineligible for commitment under the Act. The Fourth Circuit held that the district court analyzed the evidence in the framework provided in the Act, and affirmed the judgment of the district court.
Decided: July 13, 2012
Appellants filed suit challenging the United States Department of Agriculture’s (USDA) decision to construct a dam as part of a larger project along the Lost River Subwatershed. Appellants alleged that the USDA, through its agency the Natural Resources Conservation Service (NRCS), failed to comply with the National Environmental Policy Act (NEPA) — a procedural statute that “sets forth a regulatory scheme for major federal actions that may significantly affect the natural environment.” The district court considered each alleged violation, and ultimately concluded that the USDA complied with the NEPA’s procedural requirements. As such, the district court granted USDA’s motion for summary judgment, and the appellants appealed. The court of appeals affirmed.
This case involves a NRCS project to provide watershed protection, flood prevention, water supply, and recreation along the Lost River Subwatershed. The project involves a combination of land-treatment measures, dams, and impoundments. To comply with the NEPA, the NRCS was required to follow set procedures, including a scoping process and issuance of an environmental impact statement.
On appeal, the appellants raised eight issues, all of which deal with alleged violations of the NEPA. Appellants first alleged that the NRCS did not comply with the NEPA requirements in declaring watershed protection, flood prevention, and water supply as the stated purposes and needs for the dam at issue. The court of appeals disagreed, holding that the NRCS’s decision to include watershed protection, flood prevention, and water supply as the purposes underlying the dam’s construction was an appropriate exercise of its discretion. The court dismissed the appellants’ next contention as well, holding that the NRCS was not required to engage in a second scoping process when it issued a supplemental environmental impact statement.
Appellants next alleged that the NRCS’ supplemental environmental impact statement omitted information that is necessary to a complete analysis of the potential environmental impacts and benefits of the dam’s construction. The court disagreed, finding that the supplemental environmental impact statement contained all the necessary information. The court also rejected the appellants’ fourth and fifth contentions, finding that the NRCS considered all reasonable alternatives and all the environmental effects that would result from the dam’s construction.
Appellants then alleged that the NRCS presented a misleading and inaccurate cost-benefit analysis and failed to provide sufficient detail about planned mitigation measures. The court rejected these allegations, holding that the cost-benefit analysis was not misleading or inflated in any way, and that the NRCS provided the appropriate amount of detail for the environmental impact statement stage. Appellants’ eighth and final contention was that the NRCS violated the NEPA by failing to invite a cooperating agency to participate in preparing the supplemental environmental impact statement. The court dismissed this argument, noting that even if the NRCS failed to ask the cooperating agency to participate, such error was harmless.
In summary, the court of appeals rejected all eight allegations of a NEPA violation and affirmed the district court’s judgment granting summary judgment to the USDA.
– Kassandra Moore
Decided: July 13, 2012
This case involved a criminal defendant’s appeal of his 100-month sentence and special conditions imposed on his supervised release. The Fourth Circuit affirmed the 100-month sentence, reversed the district court’s imposition of certain special conditions, and vacated and remanded the case for further proceedings on additional special conditions.
Defendant David Michael Worley was indicted on federal methamphetamine charges, including conspiracy to manufacture, possess, and distribute an unspecified quantity of methamphetamine and other related charges. In addition to sentencing Worley to 100 months, the district court imposed fifteen special conditions on Worley’s three-year term of supervised release which were set forth in a standing order in the Western District of Virginia for federal sex-offense conditions.
On appeal, Worley challenged the district court’s imposition of federal tier II sex offender conditions based on his prior record as a sex offender. The Fourth Circuit found that the district court plainly erred in imposing restrictions that apply to defendants sentenced for federal sex offenses because Worley’s drug-related offense was not a sex offense. The Fourth Circuit accepted the Eighth Circuit’s reasoning in United States v. Davis, 452 F.3d 991, 995-96 (8th Cir. 2006), that “conditions that interfere with a defendant’s constitutional liberties, such as raising his child or associating with a loved one, must be adequately explained or else their imposition undermines the fairness and integrity of our judicial pleadings.” Therefore, it found plain error in the district court’s imposition of restrictions affecting Worley’s relationship with his family in the absence of any explanation. Accordingly, the Fourth Circuit reversed the district court’s imposition of three special conditions.
Next, the Fourth Circuit vacated remaining conditions and remanded them to the district court for further proceedings, finding insufficient evidence in the record to support the conditions. Finally, the Fourth Circuit found the district court’s explanation in support of its 100-month sentence to be sufficient and upheld it as “procedurally and substantively reasonable.”
– Allison Hite
Decided: July 13, 2012
In this case, the Fourth Circuit held that a federal prisoner’s possession of a “shank” constituted a crime of violence under the career offender provision of the U.S. Sentencing Guidelines, thus requiring an enhancement to the length of a defendant’s prison sentence.
Jermaine Mobley, an inmate serving time at a correctional facility near Raleigh, North Carolina, was found by the prison staff to be in possession of a shank, which the court described as “an improvised sharpened instrument,” made from “bits and pieces of metal” that is basically “a homemade knife.” Mobley pleaded guilty to being a federal inmate in possession of a prohibited object in violation of 18 U.S.C. § 1791(a)(2), an offense that carries a punishment of “a fine or imprisonment for not more than 5 years, or both.” At Mobley’s sentencing hearing, the district judge applied the career offender sentencing enhancement under the Guidelines, resulting in a sentence range of thirty-seven to forty-six months as opposed to a range without the enhancement of twenty-four to thirty months. Because Mobley was over eighteen years old and had at least two prior felony convictions for controlled substances offenses, he clearly satisfied two of the three elements necessary to be considered a career offender under § 4B1.1 of the Guidelines. The district court also found that the third element was met, namely that the instant felony conviction for possessing the shank constituted a “crime of violence.”
On appeal, the Fourth Circuit examined the crime of violence definition in the Guidelines. Looking to the definition’s residual clause, the court framed the issue as whether Mobley’s “possession of a shank while in prison…involves conduct that presents a serious potential risk of physical injury to another.” The court reviewed other circuits that had decided the same issue—the Third Circuit held that possessing a shank was not a crime of violence, but the Fifth, Eighth, and Tenth Circuits, analogizing the possession of a deadly weapon with the Guidelines-enumerated crimes of burglary, arson and extortion, ruled that the offense was covered under the definition’s residual clause. The Fourth Circuit ultimately sided with the majority of these circuits, adopting from the Tenth Circuit the point that “there is no legitimate purpose for a prisoner to carry a weapon designed to kill, injure or disable another.” Because “serious and substantial risks are…inherent to the crime, possessing such a prohibited item should be considered a “purposeful, violent, and aggressive” offense. Accordingly, the court held that the possession of a shank in federal prison was a crime of violence and thus affirmed the district court’s imposition of the career offense enhancement to Mobley’s sentence.
In a dissenting opinion, Judge Wynn wrote that the possession of a shank in prison was substantially dissimilar from the offenses enumerated in the Guidelines as crimes of violence. The makeshift knife, which may have been created solely for personal protection, is completely different from weapons such as “sawed-off shotguns or sawed-off rifles, bombs, or machine guns,” that were deemed so “inherently dangerous” that their mere possession is considered a crime of violence. Judge Wynn also stated that the residual clause of the career offender’s definition of a crime of violence was ambiguous, and therefore, the rule of lenity required that the issue be resolved in the Defendant’s favor.
-John C. Bruton, III
Decided: July 11, 2012
On appeal, Albert C. Burgess, Jr., challenges his convictions and sentences for two felonies involving the receipt and possession of child pornography, as well as an award of restitution for losses suffered by a child victim portrayed in the material in Burgess’ possession. The Court of Appeals affirmed Burgess’ convictions and all aspects of his sentences except the amount of restitution ordered by the district court. As to the restitution, the majority followed the D.C. Circuit in holding that the child pornography statute incorporates the tort requirement of proximate causation to support an award of compensatory damages to a victim and a defendant is liable only for harm he proximately caused.
Federal authorities linked Burgess to a website that offered child pornography to customers using payment information he supplied online. During a search of his home, authorities found a personal computer and compact discs containing hundreds of video recordings and thousands of images of child pornography. Burgess was arrested and charged under North Carolina state law. While in custody, he was informed of his Miranda rights and confessed to an officer that he viewed child pornography frequently and knew of trafficking operations. While in state custody, a federal grand jury indicted Burgess of knowingly possessing child pornography and knowingly receiving child pornography via computer. A jury convicted him of both counts, and the district court imposed an award of $305,219.86 in restitution on behalf of “Vicky,” a child victim portrayed in the materials seized from Burgess.
The Court of Appeals found Burgess’ arguments against his two convictions and sentencing to be without merit. Among other things, Burgess argued that the length of his pretrial detention violated his right to a speedy trial, an argument the Court of Appeals disposed of because he was not taken into federal custody until after he was indicted by a grand jury. Burgess’ strongest contention was that the district court erred in ordering that he pay restitution because the court did not determine that his conduct proximately caused harm to the victim. The Court of Appeals noted that although several circuits had considered the issue, none had adopted the general causation argument and allowed liability to be imposed on one defendant for all of a victim’s injuries, regardless of how attenuated the connection to that defendant. While some circuits chose to read one subsection of the statute requiring proximate cause to apply to the remainder of the statute, the Fourth Circuit declined that line of reasoning, instead following the plurality that have applied general tort principles to require proximate causation for an award of compensatory damages. The Court of Appeals held that Burgess was only responsible for losses sustained by Vicky that he proximately caused. On remand to the district court for a determination of proximate causation, the Court of Appeals further held that joint and several liability was not applicable to Burgess and instead the district court should employ the concept of aggregate harm to ascertain the appropriate amount of restitution.
Judge Gregory wrote an opinion concurring in the judgment, but disagreeing with the majority’s determination that joint and several liability was inapplicable to Burgess, as his interpretation of the statute requires the court to order Burgess to pay all of the losses he proximately caused and for any injuries indivisible from those that he proximately caused.
-Nora Anne Bennani
Decided on: July 11, 2012
Johnson (“the Debtor”) filed a voluntary petition for Chapter 13 bankruptcy in September 2010. The Debtor and her ex-husband (“the Creditor”) share joint custody of two minor sons. The sons reside with the Debtor for 204 days each year, and her current husband has joint custody of three children from his previous marriage. The Debtor’s proposed Chapter 13 plan claimed a household of seven members. Upon receiving notice of the Debtor’s motion for confirmation of a plan, the Creditor objected that the proposed plan overstated the Debtor’s household size because the five children did not reside with her full-time, resulting in an inaccurate calculation of her monthly expenses. The Creditor maintained that the Debtor’s proposed Chapter 13 plan improperly showed a “disposable monthly income” insufficient to make payments on two unsecured loans for which the Creditor was jointly liable.
The bankruptcy court observed that neither the Bankruptcy Code (“the Code”) nor case law define household. Other bankruptcy courts have followed three different approaches to define household: the “heads-on-beds” approach, the “income tax dependent” method, and the “economic unit” approach. In re Johnson, No. 10-0724408-JRL, 2011 WL 5902883, at *1–2 (Bankr. E.D.N.C. July 21, 2011). The bankruptcy court adopted a variation of the “economic unit” approach, assessing the number of individuals whose income and expenses are intermingled with the Debtor’s, and calculating how much time any part-time residents were members of the Debtor’s household. Part-time residents counted as part-time members of the Debtor’s household, thus each of the Debtor’s sons constituted .56 members of her household and each step-child constituted .49 members of her household. This yields a total of 2.59 children in the Debtor’s household full-time, rounded up to three, plus the Debtor and her husband for a total of five persons in the household. The issue of household size was certified for interlocutory appeal.
Statutory interpretation of the Code is reviewed de novo. Botkin v. DuPont Cmty. Credit Union, 650 F.3d 396, 398 (4th Cir. 2011). The Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) changed how a Chapter 13 debtor’s projected disposable income is calculated. Disposable income is current monthly income received less amounts reasonably necessary to be expended for maintenance and support, for qualifying charitable contributions, and for business expenditures. In part, this determination turns on the size of the Debtor’s household. An above-median-income debtor can only include certain specified expenses, calculated using the “means test” set forth in § 707(b)(2). The means test is designed to ensure that debtors who can pay creditors do pay them.
Whether the household is calculated at five or seven, the Debtor remains an above-median-income debtor under § 1325, therefore she must use the means test set forth in § 707(b)(2). The Debtor contends that the dispositive issue will be the application of the means test, which requires determining who her dependents are. She argues that the court should adopt an ordinary meaning of “dependent.” The Creditor agrees that the court should recognize that the definition of dependent is the issue, but focuses on why § 707(b)(2)’s use of “dependent” should not be used as a basis for defining “household.” Because § 1325(b)(3) directs debtors to calculate the relevant median family income for his or her area based on “household” size, the Fourth Circuit will not ignore how the bankruptcy court calculated household size. The bankruptcy court’s order did not specifically address how the § 707(b) means test should be performed. The language in § 707(b)(2)(A)(ii)(I) permits a debtor to claim deductions based on actual expenses for reasonable and necessary items, including those for their “dependents,” “dependent children,” and “households.” The Fourth Circuit’s interpretation of “household” will impact the entire § 707(b) means test.
The Debtor argues that “household” should be interpreted using the ordinary and common meaning of the word, which would make the “heads-on-beds” approach, counting all people who occupy a housing unit as part of the household, proper. If Congress intended to require familial or economic ties to limit the definition of “household,” it could have expressed such limitations in the Code. The Creditor argues that the bankruptcy court correctly adopted the economic unit approach and the Code’s purposes are best served by using a definition of “household” based on financial interdependence. The economic unit approach provides an accurate picture of the Debtor’s household when considered over a period of time.
Where statutory language is facially clear and within Congress’ constitutional authority, courts must enforce it according to its terms. In assessing whether the language is plain, a court should consider the language itself, the context in which the language is used, and the broader context of the statute as a whole. Words that are not defined are generally given their ordinary meaning, as provided by a dictionary. The dictionary definition of “household,” however, does not resolve the issue because the term has multiple definitions. The Debtor relies on a broad definition of “household” and ignores the narrower definitions. A household may consist of the heads-on-beds approach, but other definitions suggest a household consists of something beyond co-residency. Accordingly, it is not evident which ordinary definition of “household” Congress intended. Context provides some additional guidance, but does not resolve the fundamental uncertainty of what Congress intended. Since Congress used “household” instead of “family” or “dependent,” Congress intended the term to mean something other than what those terms mean, despite the fact that the definitions of those words often overlap.
Bankruptcy courts have offered reasoned explanations for why one method of defining “household” is more or less appropriate based on the context within § 1325(b), the BAPCPA amendments, and the Code as a whole, but no approach is directly required by the statute. The court has a responsibility to determine which approach best corresponds to Congress’ intent despite the ambiguous meaning of the text used. Some bankruptcy courts adopted the heads-on-beds approach, using the Census Bureau definition of “household,” thought their rationales for doing so varied. Some bankruptcy courts have reasoned that this definition of “household” is simply its plain meaning, while other bankruptcy courts based their use of the heads-on-beds approach upon § 1325(b)’s reference to Census Bureau statistical data. However, the Fourth Circuit was not persuaded that Congress intended such a broad definition, particularly as nothing in § 1325(b) supports the conclusion that bankruptcy courts are required to use such a broad definition.
In the absence of clear direction in the Code to use the heads-on-beds approach, the question becomes whether the bankruptcy court erred in failing to choose that method over other approaches. The Fourth Circuit agreed with a majority of bankruptcy courts in concluding that the heads-on-beds approach using the Census Bureau’s expansive definition of “household” is inconsistent with the purpose of the Code. The Census Bureau’s definition is wholly unrelated to any bankruptcy purpose and does not serve the Code’s objective of identifying a debtor’s disposable income. Furthermore, the Census Bureau definition is at odds with § 1325(b)’s purpose, as the calculation of a debtor’s monthly income and expenses is aimed at ensuring that debtors pay the amount they can reasonably afford to pay. It does not make sense to allow debtors to broadly define their “households” so as to include individuals who have no financial impact on expenses because it would lead to an incorrect determination of the debtor’s disposable income. Accordingly, the bankruptcy court did not err in rejecting the heads-on-beds approach.
Because the text does not define “household” and leaves room for different connotations, the economic unit approach does not inherently contradict the language of § 1325(b) and is in fact consistent with § 1325(b), the BAPCPA, and the Code. Examining the financial interdependence of individuals allows bankruptcy courts to avoid over- and under-inclusive results that would result by artificially defining “household.” The approach is flexible because it recognizes that a debtor’s “household” may include individuals who may not be claimed on a tax return, but nevertheless impact the debtor’s financial situation. The economic unit approach is appropriate because the debtor’s finances are the focal point of the Code. Furthermore, it is consistent with other components of the § 1325(b)(2) analysis, particularly in addressing whether the debtor’s income or expenses are interdependent with another individual’s. For the aforementioned reasons, the bankruptcy court did not err in adopting the economic unit approach.
Neither party advocated the income tax dependent model as the best method of defining “household.” This approach puts limitations on the bankruptcy court’s ability to accurately determine household size and fails to match the goals of the BAPCPA and the Code. A “household” includes the individuals allowed as dependents on the taxpayer’s tax returns or those who could be included. The § 707(b) means test mentions dependents and refers debtors to use certain IRS tables as part of their calculations in determining deductible monthly expenses. However, several factors negate the appropriateness of using “dependents” as the definition for “household.” First, neither § 707(b) nor § 1325(b) expressly incorporates the IRS definitions. Second, the IRS definition of “dependent” was created with a markedly different purpose from the Code’s definition of “household.” Finally, § 1325(b)(2) refers to “dependents” at one point and “household” at another. If Congress intended for “household” to refer to the debtor and his or her dependents, it could have done so. The income tax dependent approach tends to be under-inclusive. Accordingly, the district court did not err in rejecting the income tax dependent approach.
The bankruptcy court opted to further refine the economic unit approach to account for part-time members of the Debtor’s “household.” The Debtor argues that even if the bankruptcy court did not err in using an economic unit analysis, it erroneously relied on the outlier case of In re Robinson, 449 B.R. 473, 478–82 (Bankr. E.D. Va. 2011), to divide the children into fractions. The bankruptcy court did not err in applying the economic unit approach in a manner that accounted for part-time members of the household. The cases upon which the Debtor relies differ from the facts of the instant case because the children do not live with the Debtor on a full-time basis. The bankruptcy court had to consider that the Debtor’s “household” fluctuated from two to seven individuals depending on the day; allowing the use of fractions is more accurate than choosing between two extremes, which would be either under- or over-inclusive. The bankruptcy court did not err in applying the economic unit method and using fractions to determine the Debtor’s “household” size. Accordingly, the Fourth Circuit affirmed the bankruptcy court’s decision.
Circuit Judge Wilkinson dissented due to an inability to approve the bankruptcy court’s decision to break the Debtor’s children into fractions, as it contravenes statutory text, allows judges to unilaterally update the Code, and subjects debtors to needlessly intrusive and litigious proceedings. If the means test applies, as the parties agree it did in the instant case, the amount of the deduction is based in part on the number of “dependents” the Debtor has, pursuant to § 707(b)(2)(A)(ii)(I). The bankruptcy court’s fractional view is not how courts ordinarily interpret statutes. Just because Congress does not define “household” or “dependents” does not mean bankruptcy courts can take liberties with the terms. Instead, when statutory terms are undefined, they are given their ordinary meaning, which does not include “partial people.” Wilkinson also objected to the bankruptcy court’s decision to update the Code to address the increase in split custody arrangement, as this matter should be left to Congress. Finally, by allowing judges to treat dependents as fractions, the majority’s decision will require courts to conduct more intrusive and litigious proceedings in order to apply the Chapter 13 means test. While bankruptcy courts have some discretion in applying the Code, they lack the authority to depart from the rules in the Code and implement their own policy views. Accordingly, the bankruptcy court erred in dividing the Debtor’s children and stepchildren into fractions for purposes of the means test.
Decided: July 11, 2012
The Fourth Circuit Court of Appeals affirmed the district court’s dismissal of Mathur’s motion to vacate his guilty plea based on the Supreme Court’s 2010 decision in Kentucky v. Padilla. Mathur, an alien residing in the United States, pleaded guilty to possession with intent to distribute more than five kilograms of cocaine. However, his lawyer failed to advise him that he may be deported as a result of that guilty plea. In 2010, the U.S. Supreme Court held, in Padilla, that the Sixth Amendment right to counsel requires lawyers advise their clients of such consequences, and Mathur timely filed a motion within one year of that decision to vacate his plea.
The relevant statute, 28 U.S.C. § 2255, requires that a motion be filed within one year of conviction, or within one year of a new right held retroactive by the Supreme Court. In order for Mathur to take advantage of the limitations period, he must show that the Supreme Court recognized a new right, the right has been made retroactively applicable, and the motion was filed within one year of the date on which the Supreme Court recognized the right. In determining whether the Supreme Court recognized a new right, the Fourth Circuit identified a split in the circuits. The Third Circuit has held that Padilla did not announce a new rule, but the Seventh and Tenth Circuits have held it did. Assuming without deciding that it did recognize a new right, the critical inquiry is whether it is retroactively applicable. New rules of constitutional law are generally not retroactively applicable because of the importance of the finality of decision. However, Mathur contends that this new rule is “implicit in the concept of ordered liberty” and without the procedure, “the likelihood of an accurate conviction is seriously diminished.” The Fourth Circuit disagreed, highlighting the Supreme Court’s only retroactive application was based on the denial of representation by counsel. The Padilla right does not affect the fact-finding process because a defendant is already willing to plead guilty, and information related to possible deportation does not cast serious doubt on the truthfulness of the defendant’s guilty plea. Furthermore, other courts have not considered Padilla a new, retroactive right. Therefore, the dismissal is affirmed.
Judge Niemeyer concurred, and wrote separately to highlight language within § 2255 that justifies dismissal of Mathur’s motion.
Decided: July 9, 2012
The court of appeals affirmed the lower court’s exercise of personal and subject matter jurisdiction, and it’s authority to remand the remaining nonarbitrable claims to state court.
In 1925, Congress enacted the Federal Arbitration Act, which protects the enforceability of domestic arbitration agreements. The Convention of the Recognition and Enforcement of Foreign Arbitral Awards, adopted in 1958, ensures that courts enforce agreements to arbitrate in foreign tribunals, and awards granted by such tribunals. In 1945, Congress enacted the McCarran-Ferguson Act, which essentially authorizes reverse preemption of generally applicable federal laws by state laws enacted for the purpose of insurance regulation.
In the present case, ESAB Group contends that, pursuant to the McCarran-Ferguson Act, South Carolina law reverse preempts federal law in the area of commercial arbitration of insurance disputes. Thus, the issue before the court is whether the McCarran-Ferguson Act applies, such that state law can reverse preempt federal law and invalidate a foreign arbitration agreement.
In the underlying suit, ESAB Group faced numerous products liability suits stemming from personal injuries allegedly caused by its welding products. Several of ESAB Group’s insurers, including Zurich Insurance, refused coverage, and ESAB brought suit in South Carolina state court. The insurers removed the case to federal court pursuant to the Convention Act’s grant of removal jurisdiction. ESAB Group disputed the district court’s exercise of subject matter jurisdiction, and Zurich Insurance disputed the district court’s exercise of personal jurisdiction.
The district court found that it had jurisdiction over the subject matter and the parties to the action, and subsequently enforced the underlying arbitration agreements. Since the court referred to arbitration all claims providing a basis for subject matter jurisdiction, the court remanded the remaining claims to state court. On appeal, ESAB Group disputes the district court’s exercise of subject matter jurisdiction, and Zurich Insurance disputes the district court’s exercise of personal jurisdiction and its authority to remand the nonarbitrable claims to state court.
The Court of Appeals first considered whether the federal courts have jurisdiction over the present action or whether, as ESAB Group contends, South Carolina law reverse preempts federal law and eliminates the basis for jurisdiction. The court held that, because the Supreme Court made has made it clear that the McCarran-Ferguson Act is limited to domestic affairs, the Convention Act falls outside of its scope. Thus, the district court’s exercise of subject matter jurisdiction was proper. Furthermore, the court held that, because the relevant Zurich policies contain valid arbitration clauses that are subject to the Convention Act, the district court properly compelled arbitration of ESAB Group’s claims under those policies. The Court, applying a three-part test to determine if the exercise of specific jurisdiction over Zurich comported with due process, affirmed the district court’s exercise of personal jurisdiction. Finally, the court of appeals, noting that while a district court may be compelled to stay nonarbitrable issues within an otherwise arbitrable claim, there is no like requirement that the court exercise supplemental jurisdiction over nonarbitrable claims where all claims within the court’s original jurisdiction have been sent to arbitration, held that the district court had the authority to decline to exercise jurisdiction over the nonarbitrable claims and to remand those claims to state court.
Judge Wilkinson concurred, listing several additional reasons supporting the majority opinion.
– Kassandra Moore
Decided: July 9, 2012
In this appeal brought by eleven inmates in the custody of the Virginia Department of Corrections against members of the Virginia Parole Board (the “Board), the Fourth Circuit affirmed the district court’s dismissal of the inmates’ claims that new policies implemented by the Board violated their rights under the Due Process and Ex Post Facto Clauses of the United States Constitution. Overall, the inmates argued that the Board’s new policies resulted in a de facto abolition of parole for parole-eligible persons convicted of violent offenses and consequently denied them of a fair and meaningful review of their parole applications.
To begin, the Fourth Circuit noted that because there is “no constitutional or inherent right” to parole, any protectable interest in parole must be found in Virginia law. It then determined that a state has no obligation to offer parole, but it noted that once a state creates parole, the Due Process Clause requires the state to use fair procedures in effectuating the parole system. The Court additionally noted that because state parole decisions are entitled to great federal deference, the Constitution imposes only minimal requirements on these procedures. Finally, the Court referred to prior decisions in which it determined that Virginia’s parole authorities are required only to provide prisoners with “a statement of [their] reasons for denial of parole.”
Because the Court found the inmates’ arguments to be at odds with the facts alleged in their complaint, it affirmed dismissal of their claims. Specifically, the Court found that because the Board supported each denial of the inmates’ parole with at least one reason for its denial, the Board’s parole procedure complied with Constitutional requirements. Additionally, the Court dismissed the inmates’ claim that the Board “effected an ex post facto enhancement of the punishment for their crimes, in violation of the United States Constitution.” The Court found that the inmates failed to establish a causal link between the Board’s procedural changes and any significant risk of increased punishment. The Court found that the inmates failed to allege facts showing that the decrease in parole-grant rates was solely attributable to the Board’s new policies and noted numerous additional explanations which existed to explain the decreased rate. Overall, the Court reiterated its policy against micromanaging state parole systems and supported the Board’s discretion to exercise varied levels of discretion in granting or denying parole.
– Allison Hite
Decided: July 9, 2012
In this case, the Fourth Circuit affirmed summary judgment for the Defendant superintendents of a correctional facility on a claim that they had violated certain employees’ First Amendment rights. The court held that the superintendents had not violated the employees’ rights by terminating their employment in alleged retaliation for filing discrimination complaints because the Plaintiffs’ speech did not involve a matter of public concern.
The Plaintiffs, James Brooks and Donald Hamlette, were corrections officers at a Virginia Department of Corrections (“VDOC”) facility who were fired after Brooks discussed with the VDOC’s Equal Employment Opportunity (“EEO”) that he was being singled out for unfair workplace treatment and Hamlette, a minority, filed a complaint with the EEO that he was being discriminated against on the basis of his race and religion. Shortly after they were fired, the VDOC Department of Employment Dispute Resolution reinstated both employees and awarded them back pay. The Plaintiffs subsequently brought a 42 U.S.C. § 1983 claim against the Defendants, alleging that the VDOC superintendents had violated their First Amendment right to free speech by firing them in retaliation for making their employment discrimination claims.
The District Court for the Western District of Virginia granted summary judgment for the Defendants, and on appeal the Fourth Circuit upheld that order. The court looked to its decision in Stroman v. Colleton County School District, 981 F.2d 152 (4th Cir. 1992) which provided that “personal grievances such as complaints about conditions of employment…do not constitute speech about matters of public concern that are protected by the First Amendment.” Applying this precedent, the court found that the speech that the Plaintiffs alleged had been curtailed was not a matter of public concern but pertained only to personal grievances with an employer. Thus, the First Amendment could not be invoked to protect the Plaintiffs’ complaints regarding employment favoritism. The court concluded by stating that it was not offering any view on the merits of any other claims the Plaintiffs may have, but rather, that the First Amendment was not violated in this employee-grievance dispute between these two parties.
-John C. Bruton, III
Decided: July 5, 2012
Debbie McCravy appealed the district court’s holding that her remedies under ERISA § 1132(a)(3) were limited to premiums improperly withheld by MetLife. As a Bank of America employee, McCravy participated in the company’s life insurance and accidental death and dismemberment plan issued by MetLife. McCravy elected to buy coverage for her daughter as an eligible dependent child under the plan and paid premiums that were accepted by MetLife from before her daughter’s 19th birthday until she was murdered at the age of 25. McCravy then filed a claim for benefits as the beneficiary of her daughter’s policy that was denied by MetLife because her daughter was 25 at the time of her death and no longer qualified as an eligible dependent child. MetLife attempted to refund the premiums they had accepted, but McCravy refused to accept the check.
McCravy then filed suit in federal court alleging breach of fiduciary duty and seeking recovery under § 1132(a)(3), which allows participants and beneficiaries “to obtain other appropriate equitable relief” to redress violations of ERISA or ERISA plans. The district court ruled that McCravy could recover under § 1132(a)(3), but that her recovery was limited as a matter of law to the life insurance premiums wrongfully withheld from MetLife for the coverage that McCravy never actually had on her daughter’s life. McCravy then moved for summary judgment regarding the wrongfully retained premiums and reserved her right to appeal the district court’s limitation of her recovery under § 1132(a)(3). After the district court entered a final order, McCravy appealed and the Fourth Circuit filed an order affirming the district court. The same day, the Supreme Court of the United States filed Amara, 131 S. Ct. 1866, extending the equitable remedies available under § 1132(a)(3) to encompass remedies traditionally available in courts of equity, expressly including “make-whole” relief such as estoppel and surcharge.
On the basis of Amara, the Fourth Circuit granted McCravy’s petition for panel rehearing. Upon rehearing, the Fourth Circuit held that after Amara, McCravy was entitled to seek “make-whole relief” under § 1132(a)(3), and that her recovery was not limited as a matter of law to refunds of her premium. Furthermore, the remedy of equitable estoppel was available to McCravy under § 1132(a)(3) to prevent MetLife from denying her right to convert coverage for her daughter. The Fourth Circuit vacated the district court’s summary judgment order and remanded the case for further proceedings to determine McCravy’s breach of fiduciary duty claim.
Decided: July 5, 2012
A group of hourly-wage employees of Perdue Farms, Inc. (Perdue) filed a civil conspiracy action under 18 U.S.C. § 1962(d) of the Racketeer Influenced and Corrupt Organizations Act (RICO). The plaintiffs alleged that corporate managers of Perdue, human resources staff, and plant managers conspired to hire aliens not authorized to work in the United States to reduce labor costs, which caused the depression of wages paid to hourly-wage employees. Defendants individually violated 8 U.S.C. § 1324 in “bringing in and harboring certain aliens,” specifically knowingly hiring ten or more unauthorized aliens. Each of the defendants allegedly hired hundreds of such workers with actual knowledge that they were unauthorized for employment. The complaint alleged that the defendants violated 18 U.S.C. § 1546(b)(1)-(3) by using false identification documents and fraudulently attesting to the validity of such in the completion of government forms. The district court dismissed the action with prejudice, holding that plaintiffs failed to allege a civil conspiracy claim on which relief could be granted. The plaintiffs filed a timely appeal.
A district court’s dismissal of an action under Rule 12(b)(6) is reviewed de novo. Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), require that complaints in civil actions be alleged with greater specificity. First, a court must accept as true all factual allegations contained in a complaint, but does not have to accord such deference to legal conclusions. The recital of elements of a cause of action supported only by conclusory statements is not sufficient to survive a 12(b)(6) motion. Second, to survive such a motion, a complaint must state a “plausible claim for relief.” Iqbal, 556 U.S. at 678. This requires that the complaint allege sufficient facts to establish the elements of the claim, crossing “the line from conceivable to plausible.” Twombly, 550 U.S. at 570.
The district court concluded that the plaintiffs’ amended complaint contained deficiencies that were fatal to the prosecution of the action. First, the complaint failed to plead with sufficient particularity the existence of a conspiracy among the defendants. Second, the amended complaint lacked sufficient facts supporting either alleged RICO predicate act. Finally, the court concluded that the entire theory on which the amended complaint was based was barred by intracorporate immunity.
The plaintiffs alleged that the defendants violated 18 U.S.C. 1962(d) by conspiring to violate 18 U.S.C. § 1962(c), which prohibits conducing the affairs of an enterprise through a pattern of racketeering activity. An act of racketeering under RICO is referred to as a “predicate act.” While private litigants may recover from racketeering injuries under 18 U.S.C. 1964(c), their injuries must flow from the predicate acts. Because the plaintiffs only allege two predicate acts, their failure to plead sufficient facts to establish the elements of either would require dismissal.
The first predicate act alleged is the knowing act of hiring multiple unauthorized aliens. This predicate act has been analyzed in similar contexts by two other circuits: Edwards v. Prime, Inc., 602 F.3d 1276 (11th Cir. 2010), and Commercial Cleaning Servs., L.L.C. v. Colin Serv. Sys., Inc., 271 F.3d 374 (2d Cir. 2011). These cases explain that, in order to satisfy the illegal hiring requirements, a defendant must hire ten or more aliens within a 12-month period with actual knowledge that they are not authorized to work in the United States. Edwards, 602 F.3d at 1292–93. Additionally, the defendants must have actual knowledge that the unauthorized aliens were brought into the country in violation of 8 U.S.C. § 1324(a). Id. at 1293; Commercial Cleaning Servs., 271 F.3d at 387. The second element is crucial and distinguishes 8 U.S.C. § 1324(a)(3), the RICO predicate, from 8 U.S.C. § 1324(a)(1), which penalizes hiring unauthorized aliens without knowledge that they were brought into the country illegally. The district court found that plaintiffs failed to identify any employee known to be an unauthorized alien and made only conclusory allegations regarding how they unauthorized aliens were brought into the United States. While the plaintiffs did not need to identify particular unauthorized aliens, plaintiffs failed to provide factual support concerning whether the defendants had actual knowledge of the unauthorized aliens’ entry into the United States. Only two allegations bear on illegal entrance into the United States: that the defendants had actual knowledge that the workers “had been brought into the country with the assistance of others on their illicit journey across the U.S.-Mexico border” and that a specific hiring clerk worked directly with coyotes and runners to obtain employment for illegal aliens. These allegations are insufficient to establish a violation of the illegal hiring predicate.
Plaintiffs argued that the use of “judicial experience and common sense,” as authorized by Iqbal, 556 U.S. at 679, would lead to the conclusion that the aliens were brought into the United States within the meaning of 8 U.S.C. § 1324(a)(3)(B)(ii) because it is not plausible that they walked across the border and to a Perdue location on their own. Once aliens arrive in the United States, any assistance they received from other parties is immaterial to the illegal hiring predicate. While judicial experience and common sense may suggest that unauthorized aliens did not travel to Maryland or elsewhere entirely on foot, it is not obvious that such aliens allegedly employed at Perdue’s facilities were brought into the United States by others. Accordingly, the facts do not sufficiently allege a violation of the illegal hiring predicate.
The second predicate act alleged the fraudulent use and false attestation of documents in violation of 18 U.S.C. § 1546(b). The district court concluded the allegations were insufficient for two reasons: the plaintiffs failed to identify any single unauthorized employee and failed to state sufficient facts to support their claims. As mentioned above, the plaintiffs’ failure to identify any of the unauthorized aliens involved is not fatal to their amended complaint. However, because plaintiffs have not alleged facts establishing that they suffered an injury proximately caused by the defendants’ violation of the false attestation predicate, their claim also fails with regard to this predicate act. While a mere violation of 18 U.S.C. § 1962(d) is all that is required to establish criminal liability, a plaintiff may recover in an action for civil conspiracy only upon establishing injury caused by an act that is itself tortious. Beck v. Prupis, 529 U.S. 494, 501–02, 501 n. 6 (2000). In this case, the plaintiffs had to allege facts establishing that a violation of the false attestation predicate proximately caused the plaintiffs’ injury. Based on this requirement, the defendants’ acts did not cause the injury alleged by the plaintiffs because the wage depression alleged is not directly linked to any violation of the false attestation predicate.
The compensable injury resulting from a violation of 18 U.S.C. § 1962(c) is the harm caused by the predicate acts, which must be the “but for” and proximate causes of the injury. The fraudulent use of identification documents and false attestations are crimes against the government of the United Sates and do not directly impact plaintiffs’ wage levels.
Accordingly, the plaintiffs failed to allege a plausible violation of either RICO predicate act, thus the plaintiffs failed to establish a claim supporting their allegation under 18 U.S.C. § 1962(d) of a conspiracy to violate 18 U.S.C. § 1962(c). The district court’s judgment is affirmed.
Decided: June 29, 2012
The Fourth Circuit Court of Appeals affirmed the conviction of G. Martin Wynn for mail and wire fraud related to his engineering services undertaken for Oconee County, South Carolina to extend the runway at Oconee County Regional Airport. Wynn was required to obtain a permit from South Carolina Department of Health and Environmental Control (“DHEC”), but instead, cut a permit off an older set of plans for a previous project and fraudulently attached it to the current project. He then mailed and emailed the plans to DHEC. Severe rains in February 2010 generated complaints from nearby residents about runoff, DHEC inspectors visited the site, and asked to see the plans for the project. DHEC discovered the fraudulent permit and ordered that construction on the project stop.
Wynn appealed his conviction claiming that the jury was improperly instructed regarding the requisite “intent to harm” the County. The required mens rea for mail and wire fraud is a defendant must intend “to lie or cheat or misrepresent with the design of depriving the victim of something of value.” The Fourth Circuit determined that the jury charges were consistent with this mens rea requirement. Wynn also contended that the fraudulent permit was not a material misrepresentation, but the Court disagreed with Wynn holding that Oconee County did rely on the plans. Wynn also challenged the amount of restitution, but the Fourth Circuit concluded that the District Court did not clearly err in its calculation. Therefore, the judgment of the District Court was affirmed.
Decided: June 28, 2012
Plaintiffs, the parents of two students and the Freedom From Religion Foundation, brought suit pursuant to 42 U.S.C. § 1983, alleging that one of the School District’s policies, which allows student to receive two academic credits for off-campus religious instruction, violates the First Amendment. The defendant brought a motion for summary judgment, asserting that the plaintiffs lacked standing because they were not injured by the policy, and that the policy is constitutional in that it is neutrally stated and administered and has a secular purpose of accommodating students’ desire to receive religious instruction. Plaintiffs filed a cross-motion for summary judgment, asserting an Establishment Clause violation in that the purpose and primary effect of the policy is to promote Christianity. The District Court found that the plaintiffs did have standing, but rejected the plaintiffs’ argument on the merits and granted summary judgment to the defendant. The Appellate Court affirmed the judgment of the lower court.
On appeal, the Court first addressed the issue of standing. The Court rejected the plaintiffs’ proposal that it adopt a per se rule that students and parents always have standing to bring suit against policies at their school when a violation of the Establishment Clause has been alleged; however, the Court did recognize that standing principles must be “tailored to reflect the kind of injuries Establishment Clause plaintiffs are likely to suffer,” which oftentimes will not be tangible or economic. The Court addressed the standing of the plaintiffs individually and found that Ellen Tillett, her child, and the Freedom From Religion Foundation lacked standing, while Robert and Melissa Moss had standing to bring the action.
The Appellate Court then addressed the alleged Establishment Clause violation. The plaintiffs with standing, the Mosses, argued that while off-campus released time initiatives, like the program allowed by Zorach v. Clauson, 343 U.S. 306 (1952), are generally constitutional, this particular program is not because it provides academic credit. The Court was not persuaded by this argument. Noting that public schools have broad, but not unlimited, discretion to release students from their secular lessons so as to accommodate their desires to engage in religious instruction, the Court found that the off-campus release program satisfies all three prongs of the well-established Lemon test. Furthermore, the Court stated that the fact that the school accepts credits for the off-campus courses does nothing to alter the analysis under any of the three prongs of the Lemon test.
The Court was also unconvinced by the plaintiffs’ argument that the School District had become entangled with a local bible school. The Court found that the District officials maintained a neutral relationship with the bible school, neither encouraging nor discouraging student’s participation in the bible school’s courses.
In summary, the Appellate Court affirmed the lower court’s judgment, finding the School District’s released time program, which it adopted pursuant to the Released Time Credit Act and administered in a religiously neutral manner, neither violates the Establishment Clause nor entangles the School District in religion, but rather “accommodates religion without establishing it, in accordance with the First Amendment.”
– Kassandra Moore
Decided: June 28, 2012
The Government appealed the district court’s grant of William P. Danielczyk, Jr. and Eugene R. Biagi’s (“Appellees”) motion to dismiss count four and paragraph 10(b) of the indictment, alleging that they had conspired to, and did, facilitate direct contributions to Hillary Clinton’s 2008 presidential campaign in violation of 2 U.S.C. § 441b(a) of the Federal Election Campaign Act of 1971 (“FECA”), and 18 U.S.C. § 2. The Fourth Circuit reversed the district court’s grant of this motion.
This case began when the Appellees were indicted on seven counts involving their scheme to make illegal campaign contributions to Clinton’s campaign. Count four and paragraph 10(b), the counts at issue on appeal, respectively charged the Appellees with knowingly and willfully causing contributions of corporate money to a candidate for federal office, aggregating $25,000 or more, in violation of § 441b(a) and 2 U.S.C. § 437g(d)(1)(A)(i), and conspiring to do so. The two men moved to dismiss count four, contending that § 441b(a) is unconstitutional as applied to them in light of the Supreme Court’s decision in Citizens United v. Federal Election Commission, 130 S. Ct. 876 (2010).
To begin its analysis, the Fourth Circuit noted that “Citizens United left untouched § 441b(a)’s ban on direct corporate contributions.” In contrast, in ruling in favor of Appellees’ motion, “the district court held that § 441b(a)’s ban on direct corporate contributions as applied to Galen [the corporation that the two men served as officers of during the time of the charged conduct] is unconstitutional because it impermissibly treats corporations and individuals unequally for purposes of political speech.” The Fourth Circuit disagreed with the district court’s reasoning on this matter and held that “§ 441b(a) is not unconstitutional as applied to the Appellees.” The Fourth Circuit determined that the district court erred in granting the motion to dismiss.
The Fourth Circuit reasoned that a 2003 Supreme Court case, Federal Election Commission v. Beaumont, 539 U.S. 146, “makes clear that § 441b(a)’s ban on direct corporate contributions is constitutional as applied to all corporations.” The Fourth Circuit dismissed the Appellees’ argument “that Beaumont does not govern our inquiry here because its holding was limited to nonprofit corporations.” The Court found that “Beaumont stands for the proposition that a nonprofit corporation does not differ from a for-profit corporation for purposes of § 441b(a) because all corporations implicate the asserted government interests, and § 441b(a) is closely drawn to further those interests.” The Court also noted “Beaumont’s extensive discussion of Congress’s legitimate interests in regulating direct contributions made by all corporations.”
In dismissing the Appellees’ next argument that Citizens United repudiated Beaumont’s reasoning, the Fourth Circuit turned to Citizens United and found that the Supreme Court “did not discuss Beaumont and explicitly declined to address the constitutionality of the ban on direct contributions.” The Court found that the Appellees’ analysis on this matter “ignores the well-established principle that independent expenditures and direct contributions are subject to different standards of scrutiny and supported by different government interests.” The Court distinguished “independent expenditures” from “direct contributions,” noting that direct contribution limitations “require the ‘lesser demand of being closely drawn to match sufficiently important interest.’” The Court reasoned that “independent expenditures, by definition, are direct means by which political speech enters into the marketplace … direct contributions, conversely, do not necessarily fund political speech but must be transformed into speech by an individual other than the contributor … .”
– Allison Hite
Decided: June 27, 2012
Jane Huggins, trading as SADISCO of Maryland, appealed the district court’s grant of summary judgment in favor of Prince George’s County and five County officials. In November 2001, SADISCO purchased a 99.7 acre parcel of land in the County, with the intention of operating a salvage automobile wholesaling business on the parcel. The Property directly abuts a portion of the Andrews Air Force Base, a designated superfund site by the Environmental Protection Agency, which requires priority remedial attention because of the presence of a dangerous accumulation of hazardous wastes. The purchas contract SADISCO signed acknowledged the condition of the property and that the purchaser would have no recourse against the Seller with respect to the environmental condition of the property. On December 20, 2011 SADISCO applied to the County for a use and occupancy permit, and three months later applied for a permit to temporarily house a construction trailer on the Property. On June 12, 2002, the County issued a permit for the trailer, but by the end of October 2002, the County had revoked all outstanding permits to SADISCO based upon violation of numerous County Code provisions, particularly performing grading work on the property without the proper permits and impermissibly operating its business out of the construction trailer.
SADISCO continued to operate its business on the property, and in May 2003, the County filed two petitions in Maryland state court for injunctive relief against SADISCO’s grading permit violations and zoning code violations. On September 2, 3002, SADISCO and the County entered into two consent orders for each petition for injunctive relief, providing that within 60 days SADISCO would obtain the required grading permit and within 90 days vacate the premises until a valid use and occupancy permit as well as a building permit for the trailers. The day before SADISCO signed the consent orders, its attorney sent a letter to a County attorney describing the standard practice of the county to work with property owners to resolve county code violations and to forbear from enforcement as long as the property owner was making good faith efforts to cure its violations. According to SADISCO, the letter memorialized an oral contract between SADISCO and the County that predates the consent orders. The County then granted SADISCO a series of extensions of the deadline for compliance with the consent orders, however on March 18, 2004 the county notified SADISCO of its intention to enforce the Zoning Consent Order as of March 28. At an April 27 meeting various County officials decided to padlock the gate onto SADISCO’s property the next day and allow access only to remove cars and perform other tasks that would bring SADISCO into compliance.
Almost three years later, on March 30, 2007, SADISCO filed the present action against the County and five officials, alleging: 1) violation of SADISCO’s substantive due process rights under the Due Process Clause; 2) violation of SADISCO’s substantive due process rights under the Maryland Declaration of Rights; 3) breach of contract; 4) tortious interference with economic relations; and 5) negligent misrepresentation. In February 2008 the district court dismissed Counts 2, 4, and 5 for failure to comply with the pre-suit notice requirements of the Local Government Tort Claims Act. Count 3 was dismissed as time barred as to a written contract, and proceeded with discovery as to two alleged oral contracts. On July 24, 2009, the district court granted the County summary judgment, dismissing the Officials in their individual capacities from the action on the basis of qualified immunity, as well as the remaining portion of Count 3. On November 9, 2010, the district court granted summary judgment to the county as to Count 1. On appeal, SADISCO challenged all of the district court’s rulings.
As to the breaches of two oral contracts, the district court held that no consideration in favor of the County existed to support a valid oral contract which predated the Consent Orders. The Court of Appeals upheld that determination, and further explained that the parol evidence rule barred the admission of an oral contract because such evidence directly contradicts the terms of the two subsequent written consent orders. As to Count 1, the district court held that SADISCO had not forecast sufficient evidence that it had a property interest protected by the Due Process Clause, as SADISCO did not hold a valid permit at the time the county locked its gates. The Court of Appeals agreed, further stating that even if SADISCO had been in possession of a valid permit, the County’s conduct did not rise to the level of arbitrary or conscience shocking. As to Counts 2, 4, and 5, the district court held that SADISCO failed to comply with the notice requirements of the LGTCA and failed to show good cause for its noncompliance. The LGTCA prohibits an action for unliquidated damages against a local government or its employees unless the plaintiff provides notice of the claim within 180 days after the injury. The doctrine of substantial compliance allows an exception where a plaintiff has sufficiently apprised local governments of their possible liability at a reasonable time thereafter to conduct an investigation. Furthermore, a suit can still proceed if a plaintiff is able to show good cause to waive the requirements and the defendant cannot affirmatively show that its defense has been prejudiced by a lack of required notice. The Court of Appeals held that the district court had not committed an abuse of discretion in finding that SADISCO had failed to comply with the notice requirements and failed to show good cause for their noncompliance.
Decided: June 27, 2012
Archbishop Edward F. O’Brien, St. Brigid’s Roman Catholic Congregation, Inc., and the Greater Baltimore Center for Pregnancy Concerns, Inc. (“the Pregnancy Center”) sued the Mayor and City Council of Baltimore, challenging the constitutionality of the City’s Ordinance 09-252, which requires that “limited-service pregnancy centers” post signs disclaiming that they “do not provide or make referral for abortion or birth control services. The complaint alleged that the ordinance, both facially and as applied, violates the plaintiffs’ free speech, free exercise, and equal protection rights under the First and Fourteenth Amendments to the Constitution, as well as the plaintiffs’ rights under the Conscience Clause of Maryland’s health law.
The district court granted summary judgment to the Pregnancy Center on its freedom of speech count, dismissed the Archbishop and St. Brigid’s as plaintiffs for lack of standing, and dismissed the remaining counts without prejudice, in view of its free speech ruling. The court held that the disclaimer is “a form of compelled speech” that “alters the course of a [pregnancy] center’s communication with a client or prospective client about abortion and birth-control” and “is based, at least in part, on disagreement with the viewpoint of the speaker.”
The disclaimer required by the City’s Ordinance 09-252 must be made through at least one “easily readable” signs conspicuously posted in the waiting room, in both English and Spanish. Failure to comply carries a civil penalty of $150. The ordinance was the end-result of the City Council President meeting with abortion rights advocacy groups, which complained that some pregnancy clinics provide inaccurate information about abortions. The Pregnancy Center is a “limited-service pregnancy center” encompassed by the Ordinance which provides services to pregnant women. The Center provides information on abstinence and natural family planning, but does not provide information about abortions. Additionally, the Pregnancy Center does not charge for its services and its employees sign a statement affirming his or her Christian faith and belief that abortion is immoral.
Archbishop O’Brien of Baltimore is a corporate entity which owns the property on which the Pregnancy Center operates one of its locations and St. Brigid’s Church operates. Before enforcement of the ordinance, the Archbishop, St. Brigid’s, and the Pregnancy Center commenced this action. The complaint alleges that the Pregnancy Center does not provide or refer abortions based on moral and religious beliefs and that the Ordinance specifically targets pro-life organizations. The complaint also states that requiring a disclaimer that the center does not provide or refer abortions compels plaintiffs to deliver the implied message that these services are available elsewhere and should be considered. Finally, the complaint objects to the Ordinance’s requirements that the Pregnancy Center post a sign saying it does not provide birth control services. Plaintiffs seek a declaratory judgment that the Ordinance is unconstitutional on its fact and/or as applied and an injunction prohibiting enforcement. The court entered a permanent injunction barring enforcement. Both parties appealed. For the following reasons, the Fourth Circuit affirmed.
The plaintiff’s cross-appeal challenged the district court’s dismissal of the Archbishop and St. Brigid’s for lack of standing. The district court reasoned that Archbishop and St. Brigid’s are not required to comply with the ordinance, thus they did not suffer a “concrete and particularized” injury. The Archbishop and St. Brigid’s argue that the district court ignored they injury they suffer as a result of the ordinance’s infringement of their right to freedom of speech, as they own the property in which the Pregnancy Center is located. Although the Ordinance does require some speech, its mandate only applies to the space operated by the Pregnancy Center and only patrons of the Center would see the signs. Ideological injuries of the sort claimed here, without more, are insufficient to support standing. Furthermore, it is unlikely that the Archbishop or St. Brigid’s would face liability if the Pregnancy Center violated the ordinance. Accordingly, the district court’s ruling that the Archbishop and St. Brigid’s lack standing to challenge the ordinance was upheld.
The City contended that the district court erred in applying strict scrutiny to the ordinance, as the ordinance constitutes commercial speech and thus is subject to a lower level of scrutiny — an assessment of whether the disclosure requirements are reasonably related to the State’s interest. Alternatively, the City argues that the speech mandated is analogous to election-law disclosures or abortion-regulation disclosures, both of which are evaluated at a lower level than strict scrutiny. The Pregnancy Center argued that this is a content-based regulation that is subject to strict scrutiny. Commercial speech is “expression related solely to the economic interests of the speaker and its audience.” Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557, 561 (1980). Nonetheless, speech is not commercial when it is intertwined with otherwise fully protected speech. The ordinance at issue targets speech regarding the provision of “free services.” There is no indication that the Pregnancy Center is motivated by economic interest, but rather engages in ideologically-driven speech that has long been afforded the highest levels of First Amendment protection.
The City does not address what commercial transaction is proposed by the Pregnancy Center’s speech or what economic interest motivates the Pregnancy Center, but would rather define commercial speech as including speech that offers services with commercial value. Such a definition would encompass nearly every charitable organization. The Fourth Circuit agreed with the district court that pregnancy centers do not engage in commercial speech and their speech cannot be denied full protection of strict scrutiny.
As to the City’s second argument, that the ordinance is analogous to the disclosure requirements on abortion providers and in campaign finance. Such cases, however, differ from the instant case, therefore the cases are inapplicable. Abortion providers faced mandatory disclosures on the speech of licensed medical professionals; the regulations were upheld because they implicated a physician’s right not to speak only as part of the practice of medicine. In contrast, pregnancy centers do not practice medicine, are not staffed by licensed professionals, and do not require informed consent. Campaign finance laws also differ from the instant case as such regulations are less likely to be content- or viewpoint-based and power a lower risk of impacting the speaker’s message, while the ordinance is content-based. Accordingly, the district court properly held that the ordinance is subject to strict scrutiny.
Content-based regulations are presumptively invalid, but the City can rebut the presumption if it is able to show that the ordinance is narrowly tailored to promote a compelling government interest, such that the ordinance is the least restrictive alternative. The City believes it can satisfy strict scrutiny, arguing that the city has an interest in countering the “deceptive business practices” of certain pregnancy centers and in protecting the health of pregnant women and ensuring that pregnant women who seek abortions have prompt access to medical services. While the City does in fact have a considerable interest in promoting the general health and well-being of its citizens, there is no “actual problem” in need of solving which would constitute a compelling interest. The record establishes only isolated instances of misconduct by pregnancy centers generally and none by the Pregnancy Center itself. The City’s claim of its compelling interest is also called into question by its selective pursuit of its interest – the ordinance does not focus on or reach a significant number of sources that pregnant women likely consult, such as books, websites, religious leaders, etc., and thus is underinclusive. Finally, the City has done nothing other than pass this Ordinance in an effort to protect its interests.
Furthermore, the ordinance is not narrowly tailored to serve the City’s interest, as it is does not advance the purported compelling interests, it is overinclusive, and the government has other, less speech-restrictive alternatives available. Such alternatives include the notion that the City could speak with its own voice, produce a document or website listing local pregnancy centers and what services are available at each, and prosecuting violations of its criminal and civil laws that proscribe deceptive advertising and deceptive statements made by pregnancy centers.
Neither the district court nor the Fourth Circuit rested on the City’s failure to demonstrate a compelling government interest. Instead, both courts found that the Ordinance is not narrowly tailored to promote the City’s interests, the Ordinance is invalid, in violation of the First Amendment presumption that speakers, rather than the government, know best what to say and how to say it.
The City finally contends that the district court abused its discretion in converting its motion to dismiss into a motion for summary judgment without giving it prior notice and allowing it discovery and in dismissing the plaintiffs’ remaining counts without prejudice. Converting the City’s 12(b)(6) motion into a motion for summary judgment did not deny the City an opportunity to press its claim that the complaint failed to state a claim upon which relief could be granted, but rather simply gave recognition to the fact that the court would be looking at the case more broadly. The plaintiffs’ summary judgment motion put the City on notice that the court would be considering matters beyond the complaint and the City should file a response to that motion. Indeed, the City did submit matters outside the complaint and its motion to dismiss for consideration by the court. Furthermore, additional discovery was unnecessary, as it could not eliminate the narrow tailoring problems. Additional discovery was also unnecessary to show that the pregnancy centers engage in commercial speech, as the district court found that the law on its face regulated protected speech. The City’s final contention, that the district court abused its discretion in dismissing the Pregnancy Center’s remaining counts without prejudice, rather than with prejudice, lacks merit.
For the foregoing reasons, the Fourth Circuit affirmed the district court’s ruling.
Circuit Judge King dissented, arguing that the district court improperly denied the City essential discovery, refused to view in the City’s favor what evidence there was, and made untoward findings of fact premised upon nothing more than supposition. Additionally, the court discounted the real possibility that the Ordinance targeted only commercial speech. King emphasized that several pregnancy centers were using questionable tactics to delay women from obtaining abortions. The City Council concluded that the Ordinance was the best measure to prevent the dangers posed to public health.
The Pregnancy Center moved for summary judgment on its free speech and equal protection claims two months after service of the Complaint and a mere four days before the City’s response was due. At that point, no party had initiated discovery, prompting the City to seek dismissal of the complaint. Additionally, the City averred that it could not adequately oppose the Pregnancy Center’s motion for summary judgment without first conducting discovery. Specifically, the City desired the opportunity to develop factual support for the argument that pregnancy centers engaged in deceptive advertising.
Summary judgment is appropriate only after adequate time for discovery, which is essential in a contested proceeding, as it lets a party show that relevant facts are undisputed. At minimum, a court must refuse summary judgment where the nonmoving party has not had the opportunity to discover information essential to its case. The City appropriately filed a declaration averring that it could not oppose summary judgment without discovery. Such declarations are broadly favored and should be liberally granted. In the instant case, the district court decided that the City’s discovery requests were insincere and considered itself constrained to base its decision on the evidence relied on by the City at the time the Ordinance was passed.
The district court legally erred in denying discovery prior to converting the City’s motion to dismiss into a request for summary judgment. The majority states that the City was on notice that the court would be considering matters beyond the complaint. However, once a party is notified, it must be afforded a reasonable opportunity for discovery before a Rule 12(b)(6) motion may be converted and summary judgment granted. The district court’s justification for refusing to authorize discovery rested on an erroneous perception that further factual development was not important. While a summary judgment motion may be decided without further discovery where a facial challenge may be resolved as a question of law, such circumstances are extremely limited. In this situation, the court did not conduct a facial analysis of the constitutionality of the Ordinance, thus denying discovery was improper. The plaintiffs could have facially challenged the Ordinance by demonstrating that the law is unconstitutional in all applications or by showing that the law is overbroad because a substantial number of applications are unconstitutional. The district court only concluded that the Ordinance’s application o the provision of free services was unconstitutional and failed to address a substantial number of other applications. Instead, the district court and the majority of the Fourth Circuit conducted as-applied assessments. Accordingly, the City was unquestionably entitled to conduct discovery.
In declining the City’s discovery requests, the district court failed to conduct the analysis that was essential to properly decide the appropriate level of judicial scrutiny. The Supreme Court has recently explained that commercial speech is typically defined as speech that does no more than propose a commercial transaction. However, the distinction between commercial and noncommercial speech is a close question, thus a court should consider: (1) whether the speech is an advertisement; (2) whether the speech refers to a specific product or service; and (3) whether the speaker has an economic motivation for the speech. In the instant case, the speech targeted by the Ordinance satisfies the first two considerations, as the speech is advertisement for a service. The majority concludes that the third consideration is absent because the Pregnancy Center does not charge for its services. However, the district court and the majority simply accept the Pregnancy Center’s unsupported assertion that its motives are entirely religious or political. Discovery could have ascertained whether the Pregnancy Center did in fact have economic interests in the speech to be regulated.
Because the Ordinance compels a disclaimer, courts should consider the nature of the speech regulated taken as a whole and the effect of the compelled disclaimer. In Fargo Women’s Health Org., Inc. v. Larson, 381 N.W.2d 176 (N.D. 1986), cert. denied, 476 U.S. 1108 (1986), a pregnancy clinic’s advertising were found to constitute commercial speech in the overall context of the speech. Here, the district court completely failed to consider the full context of the speech in deciding that “even if the Center’s speech ‘includes some commercial elements, strict scrutiny would nonetheless apply,’ since any commercial element was ‘inextricably intertwined with otherwise fully protected speech.’” The district court’s conclusion that the speech at issue blended commercial and noncommercial, without the benefit of discovery, was erroneous. Where the commercial and noncommercial components can be separate, they are not “inextricably intertwined.” The Ordinance merely requires a disclosure that the center does not provide or make referrals for abortion or birth-control services, but would allow a pregnancy center to express its disapproval alongside the disclaimer. In sum, discovery proceedings at the very least could have yielded the degree of entanglement between commercial and noncommercial speech.
The district court also improperly characterized the City’s request for discovery as “an attempt to generate justifications for the Ordinance following its enactment.” In fact, the City merely sought to augment the record with evidence to support its existing justification. Supplementing the record in this fashion is permissible, thus there was no legitimate reason for the district court to deny discovery.
Furthermore, the district court’s conclusion that the Ordinance is not viewpoint neutral— the alternative basis for applying strict scrutiny — is incorrect. The record validates the City’s contention that the Ordinance was enacted to curtail deceptive advertising, not because the City wanted to suppress the Pregnancy Center’s speech.
Even if all of the foregoing rationales are incorrect, the district court’s award of summary judgment must be vacated because there are genuine issues of material fact regarding the issues of compelling interests and narrow tailoring. The City had an obligation to deal with existing public health problems without addressing the likelihood of deception from every possible source of information available to pregnant women. The majority asserts that the City had other options available, such as placing warnings on its own websites or providing public service information, rather than target the Pregnancy Center’s speech. The majority directs its criticisms towards the City’s first identified compelling interest, protecting the public from deceptive business practices, with barely any discussion of the second interest — ensuring that individuals who seek abortions or birth-control services have prompt access to those services. The City undoubtedly has a compelling interest in defending a woman’s right to obtain information and medical care in connection with her pregnancy and submitted the declaration of a Dr. Blum in support of such interest. The Blum declaration was never referenced by the district court, but on appeal must be viewed in the light most favorable to the City. Dr. Blum’s evidence alone created a genuine issue of material fact to survive summary judgment.
Additionally, the disclosure required by the Ordinance is not overbroad and performs the important function of deterring actual corruption and avoiding the appearance of corruption with the added advantage of promoting speech by making more information available to the public. If the Ordinance outlined exactly what pregnancy centers must say in advertisements, the Ordinance would then be considered overbroad. The majority also argues that the disclaimer is overinclusive because it applies even to pregnancy centers whose speech is entirely truthful. However, the Ordinance applies equally to all pregnancy centers and exempting certain centers could undermine the efficacy of the overall scheme.
Finally, the majority suggests that the Ordinance is not the least restrictive means of preventing deceptive advertising. However, the City has never been afforded a meaningful opportunity to explore alternatives to the disclaimer. The Pregnancy Center did not propose any least restrictive alternatives until it replied concerning its own summary judgment request. While the City has argued that that other less restrictive alternatives are ineffective or less effective, the City has not been afforded an opportunity to adduce evidence with respect to the alternatives, thus there is a genuine issue of material fact as to narrow tailoring. Because there are several genuine issues of material fact, the district court improperly granted summary judgment.
Decided: June 27, 2012
Plaintiff, Centro Tepeyac (“Tepeyac”), a nonprofit corporation that provides pregnancy services but does not refer for or provide abortions, sought a declaratory judgment that Montgomery County Resolution No. 16-1252 (“the resolution”) is unconstitutional, and preliminary and permanent injunctive relief against its enforcement.
The resolution requires limited service pregnancy resource centers to display a sign containing the following statements:
(1) “the Center does not have a licensed medical professional on staff” and
(2) “the Montgomery County Health Officer encourages women who are or may be pregnant to consult with a licensed health care provider”
Plaintiff contends that this form of compelled speech is a violation of its First and Fourteenth Amendment rights. The District Court denied Tepeyac’s motion for a preliminary injunction as to statement (1), but granted the motion as to statement (2), concluding that statement (1) would pass strict scrutiny, but that statement (2) compelled unneeded speech, and thus, was not “the least restrictive means of achieving a relevant government interest.” Both parties appealed.
The Appellate Court, based on its reasoning in Greater Baltimore Center for Pregnancy Concerns, Inc. v. Mayor and City Council of Baltimore, ____ F.3d ____, No. 11-1111 (4th Cir. June 27, 2012), affirmed the District Court’s entry of preliminary injunction as to statement (2), and reversed its denial of preliminary injunction as to statement (1).
Applying strict scrutiny, the Appellate Court, like the lower court, found that statement (2) was not narrowly tailored, and thus, did not survive such scrutiny. The Appellate Court disagreed with the lower court as to statement (1); however, stating that while statement (1) is a neutral and fact-based disclosure, and thus “imposes a comparatively less severe First Amendment burden, it still amounts to an impermissible government control of speech.”
The Court noted several reasons why statement (1) could not withstand strict scrutiny. The requirement that the statement be posted conspicuously on the wall gives potential clients the impression that the pregnancy center is not to be trusted, or that it provides services inferior to those offered by medical professionals. Furthermore, the county is compelling Tepeyac, an unwilling speaker, to express that view. Statement (1) is also severely under inclusive, raising doubt that the government is actually pursuing the interest involved, as opposed to disfavoring a particular speaker or viewpoint. The county does nothing to regulate other sources for pregnancy consultation, such as the Internet, bookstores, or houses of worship, and, as such, fails “to demonstrate its commitment to advancing [the invoked interest] by applying its prohibition evenhandedly.” Furthermore, the goals of the statement (1) disclosure can be achieved through less speech-restrictive means.
In summary, the Appellate Court affirmed that portion of the District Court’s order that grants Tepeyac’s motion for a preliminary injunction and reverses that portion that denies Tepeyac’s requested preliminary injunction.
Judge King wrote separately in dissent noting that decisions by the lower court regarding injunction requests should be given deference and reversed only where the record shows an abuse of discretion. King did not agree with the majority that the District Court abused its discretion in this case.
Furthermore, King did not agree with the majority’s view that statement (1) conveys the subjective message that the pregnancy center is not to be trusted, or that it provides services inferior to medical professionals. Instead, King would attribute the statement its plain and ordinary meaning.
Additionally, King did not agree with the majority’s view that statement (1) was under inclusive and viewpoint discriminatory, such that it was not narrowly tailored enough to pass strict scrutiny. King pointed out that the majority gave no indication that its suggestions for less restrictive alternatives would actually be less restrictive or as effective as the mandated statements.
In summary, Judge King found that the District Court did not abuse its discretion and thus would affirm the ruling, recognizing that the lower court should be given deference, and that injunction requests are extraordinary remedies to be granted only in limited circumstances.
Decided: June 27, 2012
The Fourth Circuit affirmed the district court’s dismissal of a complaint brought by a group of local fire and rescue departments (“LFRDs”) and former administrative employees against Montgomery County, Maryland, the County Council, and county officials. The plaintiffs alleged that the defendants had eliminated part of their funding in retaliation for the plaintiffs’ opposition to legislation supported by the defendants.
This case arose out of budgetary decisions made in response to budget cuts passed by the County Council that included cuts to LFRDs. The County had supported “ambulance fee” legislation which was defeated by voters and left the County without $14.1 million in funding that the bill was anticipated to bring in annually. The plaintiffs had actively campaigned against this legislation and alleged that because of their opposition to the bill, the County acted to cut their budget.
The Fourth Circuit disagreed with the plaintiffs’ arguments, affirming the district court’s dismissal of each of their claims. First, the court held that the district court properly dismissed the plaintiffs’ claims under the First Amendment, Article 40 of the Maryland Declaration of Rights (“Article 40 is ‘co-extensive’ with the First Amendment”), and § 1983. The court reasoned that the defendants’ actions were legislative in nature and were made across the board and not suffered by the plaintiffs alone. The court found that the budget was facially valid, and it relied on United States v. O’Brien, 391 U.S. 367 (1968), in refusing to inquire into the allegedly unconstitutional motive behind the County’s budget.
The Fourth Circuit further found that the County Executive and Fire Chief, both named as defendants in the plaintiffs’ complaint, were shielded by legislative immunity based on Bogan v. Scott-Harris, 523 U.S. 44 (1998), where the Supreme Court stated that “[l]ocal legislators are entitled to absolute immunity from § 1983 liability for their legislative activities.” The Fourth Circuit reiterated determinations from previous cases that extended this immunity to officials outside of the legislative branch when performing legislative functions, such as the defendants in this case. Because these two individual defendants took action associated with the “budgetmaking process,” a legislative act, they were entitled to legislative immunity.
Finally, because Maryland law specifically provides that employees of LFRDs are not County employees, the Fourth Circuit affirmed the district court’s determination that the plaintiffs, as employees of the LFRDs, were barred from bringing an abusive discharge claim under Maryland law which only recognizes a cause of action between an at will employee against an employer. The Fourth Circuit additionally reasoned that because the LFRDs themselves eliminated the administrative positions and terminated the individual employees, as opposed to the County which merely reduced the LFRDs’ budget, the plaintiffs’ claim for abusive discharge could not be sustained.
– Allison Hite
Decided: June 27, 2012
A putative class of plaintiffs which included hospitals, physician practice groups, and individual physicians brought a breach of contract action against, inter alia, the Health Plan of the Upper Ohio Valley (“Health Plan”). The plaintiffs alleged that the Health Plan, as an administrator of employment benefit plans, had failed to pay the plaintiffs for the health care services provided to patients covered under the various benefit plans. After several months of litigation, in which the district court had considered and ruled on multiple procedural and substantive motions, the Health Plan made a motion to dismiss the hospital plaintiffs’ claims. The Health Plan argued that pursuant to a clause in the Hospital Service Agreement contracts between itself and the hospital plaintiffs, the breach of contract claims should have been submitted to arbitration. Citing the considerable time and resources that had already been invested in the litigation and the unfair prejudice that would disadvantage the hospital plaintiffs, the district court ruled that the Health Plan had defaulted on its right to arbitrate.
On appeal, the Fourth Circuit reversed the trial court’s decision to deny the Health Plan’s motion to dismiss the hospital plaintiffs’ claims. The court first engaged in a lengthy discussion regarding whether it had jurisdiction to hear the appeal. Because the Health Plan had not specifically invoked the proper sections of the Federal Arbitration Act (“FAA”) in its motion to dismiss, there was a question of whether the Health Plan could utilize the FAA provision which allows immediate appeal of an order denying a petition to arbitrate. Relying on “Congress’ deliberate determination that appeal rules should reflect a strong policy favoring of arbitration, however, the court focused on the substance, rather than the form, of the Health Plan’s motion to dismiss. According to the court, the “Health Plan clearly stated in its motion to dismiss that it was seeking to enforce the arbitration agreement….The memorandum specifically argued that the court should compel separate binding arbitrations for each hospital plaintiffs’ claims pursuant to the express terms of the contracts between the parties.” Thus, because the denied motion to dismiss was, in effect, a motion to compel arbitration, the Fourth Circuit possessed appellate jurisdiction.
Reviewing the merits of the trial court’s order de novo, the court held that the Health Plan had not defaulted on its right to arbitrate the hospital plaintiffs’ claims. The court stated that a party loses its right to stay court proceedings in order to arbitrate if it “substantially utilizes the litigation machinery that to subsequently permit arbitration would prejudice the party opposing the stay.” Expounding on this legal standard, the court stated that even where the party seeking arbitration has engaged in pretrial activity, “the dispositive question is whether the party objecting to arbitration has suffered actual prejudice.” (emphasis in original).
In determining whether the hospital plaintiffs had suffered actual prejudice, the court analyzed both the amount of delay in the Health Plan’s seeking arbitration and the extent of the Health Plan’s “trial-oriented” activities. In regards to the first consideration, the court found that there was no evidence that the hospital plaintiffs had been prejudiced by the the Health Plan’s six month delay in asserting its right to arbitration. Whether the Health Plan’s litigation conduct had been prejudicial was a more difficult question for the court because the Health Plan had joined in another defendant’s potentially dispositive motion. Nevertheless, the court held that there was no evidence that this motion forced the plaintiffs to reveal litigation strategy and that the Health Plan had gained no advantage from it. The court also rejected the hospital plaintiffs’ argument that it expended considerable expenses due to the Health Plan’s activity because the plaintiffs failed to distinguish the amount of money it spent litigating against the Health Plan as opposed to the other defendants and the amount spent as a response to activity initiated by the Health Plan. Finally, the court made it clear in a footnote that it did not believe that the Health Plan was attempting to “game the system” with its delayed motion for arbitration; rather, the delay was understandable “given the complicated and uncertain posture of the litigation during its early stages which involved multiple plaintiffs and multiple defendants, only some of whom had entered into arbitration agreements with each other.”
-John C. Bruton, III
Decided: June 26, 2011
On appeal, Sean C. Sowards argued that the district court erred in denying his motion to suppress because the police lacked probable cause to initiate a traffic stop based exclusively on an officer’s visual estimate – uncorroborated by radar or pacing and unsupported by any other indicia of reliability – that Sowards’s vehicle was traveling 75 miles per hour (mph) in a 70 mph zone. The Court of Appeals agreed, reversing and remanding the case.
Deputy James Elliott stopped Sowards for speeding on North Carolina I-77 after visually estimating that Sowards’s vehicle was traveling 75 mph in a 70 mph zone. During the traffic stop, Deputy Elliott’s drug detection dog signaled the possible presence of a controlled substance, and subsequently 10 kilograms of cocaine were found in Sowards’s car. Before trial, Sowards moved to suppress the evidence on the basis that Deputy Elliott lacked probably cause to initiate the traffic stop in violation of the Fourth Amendment. At the suppression hearing Deputy Elliott testified that he had been certified three different times in the use of radar equipment in North Carolina, and as a condition of obtaining certification he was required to visually estimate the speed of twelve different vehicles and have his estimates verified with radar. To pass the test, Deputy Elliott could not be off by more than 12 mph on any one vehicle and could not exceed 42 mph off for all twelve vehicles. Deputy Elliott also testified that he did not attempt to verify his visual speed estimate with his radar unit. His testimony revealed that he had great difficulty with measurements. The district court denied Sowards’ motion to suppress and finding that Deputy Elliott had probable cause to initiate the traffic stop because he was trained to estimate speeds and his difficulty with measurements was immaterial to his estimate of speed as it did not depend on time or distance. Sowards subsequently entered a conditional guilty plea, reserving the right to appeal any issues related to the suppression motion, and filed a timely notice of appeal.
On appeal, the sole issue was whether Deputy Elliott’s traffic stop of Sowards’s vehicle was supported by probable cause in order for the district court to have properly denied Sowards’s motion to suppress the evidence seized from the car as a result of the traffic stop. The Court of Appeals reviews the district court’s legal determinations de novo and its factual determinations for clear error, where a factual finding may only be reversed it the reviewing court is left with the definite conviction that a mistake has been committed. The evidence must be construed in the light most favorable to the prevailing party below, the Government.
The Fourth Amendment guarantees freedom against unreasonable searches and seizures. When a police officer stops an automobile and detains the occupants briefly, the stop amounts to a seizure within the meaning of the Fourth Amendment. The underlying command of the Fourth Amendment is that searches and seizures be reasonable. Generally, the decision to stop an automobile is reasonable where the police have probable cause to believe that a traffic violation has occurred. Probable cause exists if, given the totality of the circumstances, the officer had reasonably trustworthy information sufficient to warrant a prudent person in believing that the petitioner had committed or was committing an offense.
The Court of Appeals began its inquiry with whether, under the totality of the circumstances, Deputy Elliott had reasonably trustworthy information to support a prudent person’s belief that Sowards was speeding. The majority held based on the record that: first, it was error for the district court to find that Deputy Elliott was trained to estimate speeds, because he was trained to use a radar unit; and second, it was clear error for the district court to find that Deputy Elliott’s difficulty with measurements was immaterial to his estimate of speed. Despite these two erroneous factual findings, the district court held that Deputy Elliott’s visual speed estimate alone served as probable cause for Deputy Elliott to stop Sowards’s vehicle. The Fourth Circuit majority held that the Fourth Amendment does not support the proposition that an officer’s visual speed estimate alone will always suffice as a basis for probable cause to initiate a traffic stop. Furthermore, the reasonableness of an officer’s speed estimate depends on whether a vehicle’s speed is estimated to be in significant excess or slight excess of the legal speed limit, and if slight, additional indicia of reliability such as radar or pacing methods are required to support the reasonableness of the officer’s visual estimate. The majority further held that in the absence of additional indicia of reliability, an officer’s visual approximation that a vehicle is traveling in slight excess of the legal speed limit is merely a guess and lacks the foundation to provide an officer with reasonably trustworthy information to initiate a traffic stop. Concluding that Deputy Elliott’s visual speed estimate was merely a guess, the majority held it was not an objectively reasonable basis for probable cause to initiate a traffic stop and therefore the seizure was constitutionally unreasonable and all evidence gathered pursuant to the search must be suppressed, reversing the district court’s holding.
Writing separately in dissent, Judge Traxler expressed his disagreement with the majority’s holding that “an officer working along and without radar cannot even pull the car over for a warning as long as the driver is reasonably believed to be only breaking the law slightly as opposed to significantly.” Judge Traxler further expressed his opinion that the facts and circumstances known to Deputy Elliott, along with his practical experience in traffic enforcement, training and reasonable inferences, were more than sufficient to warrant an objectively reasonable belief that Sowards was speeding. Judge Traxler also stated his disagreement with the majority’s holding that an officer should have to corroborate his visual estimate with additional indicia of reliability if the estimate was only slightly in excess of the speed, opining that adopting an absolute rule requiring corroborating evidence was unwarranted and unsupported by case law.
Decided: June 25, 2011
The Fourth Circuit Court of Appeals affirmed the 15 year mandatory minimum sentence for Ronald Colson who pleaded guilty to six counts of receiving movies depicting actual female minors engaged in actual and simulated genital and oral sex with adult males, in violation of 18 U.S.C. § 2252A(a)(2). Because Colson had a previous Virginia state conviction which related to either sexual abuse or abusive sexual conduct involving a minor, the court imposed the longer mandatory sentence.
Colson’s previous conviction was for the “Production, Publication, Sale, or Possession, etc. of Obscene Items Involving Children.” On appeal, Colson contended that his previous conviction did not qualify as a predicate offense because when considered under the categorical approach, relate to sexual abuse. Under the categorical approach, the previous conviction must be evaluated taking the most benign conduct that could support a conviction. Colson claimed that under the relevant statute for his previous conviction, he could have been convicted simply for producing “a lewd exhibition of nudity” of a minor. However, the statute has not been interpreted this way under Virginia law, and the court concluded that Colson read the scope of convictions too narrowly that can serve as predicate offenses. Therefore, the court affirmed his sentence and the judgment of the lower court.
Decided: June 22, 2012
The Fourth Circuit Court of Appeals affirmed the convictions of Anthony and Harriet Jinwright, former co-pastors of Greater Salem Church (“GSC”) in North Carolina, for conspiracy to defraud the United States and tax evasion. Mr. Jinwright served as senior pastor of GSC; his wife, Mrs. Jinwright, played an active role in church life, but only began drawing a salary in 2000, 19 years into the Jinwright’s church leadership. Between 2001 and 2007, GSC provided Mr. Jinwright with benefits outside his salary including housing allowances of between $130,000 and $160,000 a year, travel allowances, payments for his children’s tuition, use of a luxury car leased by the church, and an additional vehicle allowance. He received annual bonuses of $35,000 to $50,000 and a separate Christmas bonus. Additionally, he was reimbursed for unsubstantiated business expenses. Mr. Jinwright’s total compensation for 2001 to 2007 totaled nearly $3.9 million. During the same timeframe, Mrs. Jinwright received similar compensation totaling nearly $1 million. The Jinwrights also established an organization known as A.L. Jinwright Ministries, Inc. (“ALJM”) purportedly to receive income for their outside speaking engagements. However, GSC paid the operating expenses and the defendants kept the income. The IRS Revenue Agent who investigated their case testified that the defendants understated their income by $2,486, 771 between 2002 and 2007, resulting in a tax deficiency of $664,352.
On appeal, the defendants challenged the jury instructions related to willful blindness. The doctrine of willful blindness permits the government to prove knowledge by establishing that the defendant “deliberately shield[ed] [himself] from clear evidence of critical facts that are strongly suggested by the circumstances.” Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2068-69 (2011). Reviewing the evidence presented at trial, the court held the evidence supported the instructions even under the standard laid out by the Supreme Court in Global-Tech which was decided since the Jinwrights’ convictions.
The defendants also challenged the jury instructions regarding the tax treatment of payments from an employer to an employee. GSC employees testified that certain payments from the church to the Jinwrights were gifts. The court gave the jury a clarifying instruction that payments from employer to employee are income and such payments are not gifts under the IRS Code and limited the Jinwrights’ ability to cross-examine the witnesses about this subject. The Jinwrights contended that this impermissibly shifted the burden of proof to them. However, the Court of Appeals applied the principle used in other circuits that in criminal tax cases the burden is on the defendant to prove that he had deductions not in his return once the Government establishes unreported income. And, the decision to limit the cross examination was reasonable in light of potential confusion to the jury.
Mr. and Mrs. Jinwright also contended that the court erred in the calculation of the sentencing and restitution, but reviewing the relevant precedent, the court affirmed the sentence and amount of restitution.
Decided: June 21, 2012
On appeal to the Fourth Circuit, Gwyniece Hutchins challenged the district court’s determination that federal law required her to reimburse the Department of Labor (“DOL”) for compensation that she received after she was awarded a monetary judgment in a state court proceeding against the Town of Ninety Six, South Carolina (the “Town”) for the same underlying injury. The Fourth Circuit affirmed the district court’s decision in favor of the Town, and against Hutchins.
This case arose out of an injury Hutchins sustained while carrying out her duties as a U.S. Postal Service employee. In August 2004, Hutchins stepped on an improperly fitted manhole cover maintained by the Town, the manhole flipped up, and Hutchens fell into the manhole and sustained serious injuries. Hutchins was awarded lost wages and medical benefits under the Federal Employees’ Compensation Act (“FECA”) and later accepted a judgment of $275,000 in a state court action that she brought against the Town. The DOL, the federal agency that awarded Hutchins’ benefits under FECA, then asserted a claim to recover a portion of this judgment, but Hutchins argued that the Town was not a “person,” and therefore allowing the Town’s claim would be unconstitutional pursuant to 5 U.S.C. §§ 8131, 8132. The DOL’s Office of Workers’ Compensation (“OWC”) rejected Hutchins’ arguments and determined that the DOL was entitled to reimbursement based on Hutchins’ state court judgment. Hutchins paid the amount requested by DOL but appealed the OWC’s decision to the Employees’ Compensation Appeals Board, which affirmed the OWC’s decision. Hutchins then filed the claim underlying this case in the U.S. District Court for the District of South Carolina.
After Hutchins filed her complaint pursuant to the Administrative Procedures Act, both Hutchins and the DOL filed cross-motions for summary judgment, and the district court granted the DOL’s motion, finding that Hutchins was required to reimburse the DOL. The district court denied Hutchins’ motion, and Hutchins appealed the decision to the Fourth Circuit.
On appeal, Hutchins first argued that because the Town is not a “person” as used in 5 U.S.C. § 8132, the statute does not require her to reimburse the DOL. In the alternative, Hutchins argued that if the Town, as a political subdivision, is determined to be a “person,” then § 8131 is unlawful. The Fourth Circuit began by analyzing the text of § 8132, the statute that requires a person who receives compensation for an injury to reimburse the U.S. for any compensation paid under FECA for the same injury. The Court determined the issue to be “whether the Town qualifies as a ‘person other than the United States,’ such that Hutchins is liable to reimburse the [DOL] out of her state court judgment.”
The Court first interpreted § 8132 and found that its language makes it clear that “person” includes political bodies, such as the Town. To further support this finding, the Court also looked to the Dictionary Act’s definitions of “person,” as well as to Supreme Court precedent indicating that “person” includes municipal corporations unless a more limited use is indicated by the context of the statute. Next, the Court declined to address Hutchins’ second argument that if “person” is construed broadly, the statute would allow the DOL to sue states, and such action would violate the Constitutional principles of federalism. The Court found that such circumstances were not present in Hutchins’ case. In sum, the Court found that “the statutory language and Supreme Court precedent indicate that a municipality such as the Town constitutes a ‘person’ for purposes of reimbursement under 5 U.S.C. § 8132,” and held that the district court correctly determined that Hutchins’ recovery from the Town for her injuries was properly subject to refund under FECA.
– Allison Hite
Decided: June 21, 2012
In this declaratory judgment action, the Fourth Circuit held that a securities brokerage firm was subject to arbitrate the claims of certain investors who alleged that their financial advisor, a person indirectly under the control of the firm, had committed misrepresentations and failed to perform “due diligence” in connection with several securities investments.
This litigation arose when members of the Bosco family (collectively “Investors”) filed arbitration claims against their financial advisor George Gilbert, Gilbert’s former investment firm Community Bankers Securities, LLC (“CBS”), and Gilbert’s current firm Waterford Investment Services, Inc (“Waterford”). The claims were filed with the Financial Industry Regulatory Authority (“FINRA”), of which both CBS and Waterford were registered as members. Waterford instituted the instant action by seeking a declaratory judgment in the U.S. District Court for the Eastern District of Virginia that it was not obligated to arbitrate the Investors’ FINRA claims and an injunction to prevent the arbitration proceedings from commencing. The district court, adopting a magistrate’s report in full, concluded that Waterford must arbitrate the Investors’ claims because, pursuant to FINRA rules, Gilbert was an “associated person” of Waterford.
On appeal, the Fourth Circuit reviewed the district court’s ruling de novo. The court first pointed out that under the FINRA Code of Arbitration Procedure for Customer Disputes, an investment customer can compel arbitration of a dispute with a FINRA member if the dispute “arises in connection with the business activities of the member or the associated person.” According to the court, there was no question that the Investors were the customers of Gilbert; however, the dispositive issue was whether Gilbert was an “associated person” of Waterford during the period when the alleged improper advice was given. At that time, Gilbert was employed by CBS—not Waterford—but both companies were owned by the same majority shareholder and were operated by a group of overlapping officers, directors, and employees. In addition, the two companies shared office space and resources, and when CBS ceased its operations in 2009, many CBS representatives, including Gilbert, were transferred to Waterford.
After providing this background information, the court framed the issue as a novel one: “[w]hether a person who is not in a contractual relationship with a member firm nevertheless can be an ‘associated person’ of that firm for purposes of FINRA arbitration.” The court determined that the “associated person” definition did not require the exercise of actual control by the member firm over the person, but rather, all that was necessary was the firm’s “potential power to influence the person.” Because of the extensive overlap in key personnel and office resources between CBS and Waterford, the court found that Waterford had the requisite power to control Gilbert’s business activities, thus making Gilbert a person associated with Waterford. Therefore, the court rejected Waterford’s action for declaratory and injunctive relief, holding that Waterford was compelled to arbitrate the Investors’ claims.
-John C. Bruton, III
Decided: June 19, 2012
The Plaintiff in this case, Carolyn Snydor, appeals the district court’s dismissal of her discrimination claim. In January 2009, Snydor, a public health nurse in Fairfax County, underwent surgery on her left foot. She returned to work in March and was then terminated by Fairfax County in November because her medical restrictions following surgery limited her “capacity to perform the full clinical duties of a public health nurse.” Following her termination, Snydor filed an administrative charge with the Equal Employment Opportunity Commission alleging that the County had discriminated against her on the basis of her disability in violation of the Americans with Disabilities Act. In her charge, Snydor stated she had “requested a reasonable accommodation” from her manager, but was denied relief. She also completed an EEOC intake questionnaire, where she described her disability as limited walking ability and explained that she must use an electric wheelchair when moving for any length of time. Her questionnaire stated that she had requested “to be assigned as Nurse of the Day and to be in the clinic doing lighter duty work” and that in response, her supervisor said “she did not want me around the patients in the clinic because of [her] wheelchair.”
The EEOC issued Snydor a right-to-sue notice and she filed a complaint against the County in federal court. The County moved for summary judgment following discover, and the district court denied the motion finding that it remained in dispute whether Snydor could have served as a public health nurse while in a wheelchair. The County then filed a motion in limine seek to exclude the evidence that Snydor had requested to work in the clinic in her wheelchair, asserting that the sole accommodation she informed the EEOC she had requested was light duty work, never stating that she would have been able to perform her duties in a wheelchair. The district court agreed that Snydor did not file her proposed accommodation with the EEOC and dismissed the case sua sponte because of her failure to exhaust administrative appeals.
The ADA includes the requirement that a plaintiff must exhaust her administrative remedies by filing a charge with the EEOC before pursuing a suit in federal court. This requirement ensures that the employer is put on notice of the alleged violations and gives it a chance to address the discrimination prior to litigation, often allowing the injured party to obtain relief much sooner than in the courts. The goals of notice and opportunity for an agency response would be undermined by allowing a plaintiff to raise claims in litigation that did not appear in her EEOC charge, thus a plaintiff fails to exhaust their administrative remedies where the charges reference different time frames, actors, and discriminatory conduct than the central allegations in her suit. Examples are where a charge alleges only racial discrimination but the complaint includes sex discrimination, or where a charge alleges only retaliation but the complaint alleges racial discrimination as well. However, the exhaustion requirement is not meant to be construed so strictly as to bar suit where a plaintiff’s claims are reasonably related to her EEOC charge and can be expected to follow from a reasonable administrative investigation.
On appeal, the Fourth Circuit found it clear that Snydor’s charge claimed what her suit claimed – she had been discriminated against based on her disability by being denied a reasonable accommodation. Holding that the requirement for exhaustion is whether the plaintiff’s administrative and judicial claims are reasonably related, not precisely the same, the court found sufficient similarities between the two to find that Snydor satisfied the requirement. The type of prohibited action she alleged, discrimination on the basis of disability by failing to provide a reasonable accommodation, remained consistent throughout. She did not attempt to raise new disabilities for the first time in court, and mentioned several times in her EEOC questionnaire the issue of her wheelchair. Furthermore, a wheelchair is a logical accommodation for her difficulties in walking, one that could be expected to follow from a reasonable administrative investigation by the EEOC and that should not have caused the County to be caught off guard when it was raised. The Fourth Circuit further concluded that sending Snydor back to the beginning of the process would undermine the congressional preference for agency resolution in the area, reversing the district court’s holding and remanding the case for further proceedings.
Decided: June 18, 2012
The Fourth Circuit Court of Appeals held that four corporate entities created by four states, were not “state agencies,” and were therefore subject to suit under the False Claims Act (“FCA”) for allegedly defrauding the U.S. Department of Education.
Dr. Oberg asserts that the appellees knowingly made fraudulent claims to the U.S. Department of Education by inflating their loan portfolios eligible for Special Allowance Payments (“SAP”). The case was dismissed by the district court agreeing with the appellees that the entities were not “state agencies” and therefore not eligible for suit under the FCA. According to the Supreme Court in Vermont Agency of Nat. Resources v. U.S. ex rel. Stevens, state agencies are not eligible for suit under the False Claims Act because the definition of a person eligible for suit does not include the sovereign. 529 U.S. 765 (2000). However, the presumption regarding corporations is the opposite; in Cook County v. U.S. ex rel. Chandler, the Supreme Court held that a municipal corporation was eligible for suit. 528 U.S. 119 (2003). The Fourth Circuit articulated the appropriate inquiry is “whether appellees are truly subject to sufficient state control to render them a part of the state, and not a “person” for FCA purposes.”
The Fourth Circuit adopted the reasoning of the 9th and 5th circuits in concluding that the arm-of-the-state analysis used in the Eleventh Amendment context is the legal framework for this inquiry. The Fourth Circuit articulated four non-exclusive factors for the arm-of-the-state analysis to draw the line between “a State-created entity functioning independently of the State from a State-created entity functioning as an arm of the State or its alter ego.” The case was remanded for determination using the arm-of-the-state framework to determine whether it was eligible for suit under the FCA.
Decided: June 18, 2012
A developer proposed building a mooring facility and concrete boat ramp (the “Project”) about 3,000 feet back from the Back Bay National Wildlife Refuge (the “Refuge”) in Virginia Beach. The approved permit authorized channel dredging and excavation and relocation of silt and other material. Because the project would require clearing wetlands, the permit required the creation of equivalent wetlands nearby and relocation of plants displaced by new construction. There were also operational conditions to the project, such as horsepower limitations on boat motors, restrictions on who may use the facility, and the installation of signs informing the public that there is a no-wake zone within the Refuge. Prior to issuing the permit, the Army Corps of Engineers (the “Corps”) solicited public comment and most of the responses opposed the project.
The Fish and Wildlife Service (“FWS”) suggested that the Corps prepare an Environmental Impact Statement (“EIS”) to address the potential impact the project would have on federal resources. An EIS is prepared in connection with “every recommendation or report on proposals for … major Federal actions significantly affecting the quality of the human environment.” Agencies draft an Environmental Assessment (“EA”) to determine whether environmental quality is “significantly affect[ed].” In this case, the Corps determined that no EIS was required as the no-wake zone would be a significant measure of protection to the Refuge and its resources. The Corps stated that the no-wake zone could be enforced by any federal, state, local, or county agency or private security firm so long as the entity has the authority to enforce the no-wake zone under the appropriate law. Enforcement was problematic due to lack of funding. The building permit did not mandate enforcement nor did it guarantee funding for enforcement.
Friends of Back Bay and Back Bay Restoration Foundation filed a complaint seeking review of the Corps’s decision to allow dredging and relocation of silt and fill material and challenging the determination that issuance of the permit did not qualify under NEPA as a federal action requiring an EIS. The district court ultimately entered summary judgment in favor of the defendants, rejecting the plaintiffs’ contention that harm to the Refuge from boating could be considered a legitimate secondary effect of the dredging. Regarding the NEPA challenge, the district court concluded that the Corps’s decision to grant the permit without preparing an EIS was within the agency’s broad discretion and not contrary to law. The plaintiffs appealed.
The APA provides that a reviewing court is bound to “hold unlawful and set aside agency action” for certain specified reasons, including whenever the challenged act is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” This gives rise to a highly deferential standard of review with a strong presumption in favor of finding agency action valid. The court must carefully inquire into the record and consider whether the agency considered all relevant factors and whether there was clear error. The reasonableness of the Corps’s decisionmaking will be reviewed de novo.
The parties debated how to characterize the EA, with the plaintiffs arguing that the Corps found that granting the permit would affect the environment to the degree necessary to trigger the need for an EIS, but establishing the no-wake zone would ameliorate adverse effects. The defendants maintained that the no-wake zone was in effect for nearly two years before the EA, thus it constituted a baseline condition. A material misapprehension of the existing baseline conditions can be a foundation for an arbitrary and capricious decision. In North Carolina Wildlife Federation v. North Carolina Department of Transportation, No. 11-2210, 2012 WL 1548685 (4th Cir. May 3, 2012), federal and state agencies were charged with evaluating the construction of a proposed toll highway and erroneously adopted the assumption that the road would be built in estimating the resulting consequences. This was an “obvious and fundamental blunder,” and required reconsideration. Additionally, this case stood for the proposition that, when an agency miscalculates the underlying baseline, courts frequently find NEPA violations.
In this case, the creation and continued existence of the no-wake zone is a foundational proposition upon which the Corps’s decision was premised. However, the no-wake zone is entirely unenforced. Citing Nat’l Audubon Soc’y v. Hoffman, 132 F.3d 7, 17 (2d Cir. 1997), the Fourth Circuit stated that measures designed to minimize an action’s effect on the environment are more likely to be effective when they are policed, either through the imposition of a mandatory permit condition or literal police presence, neither of which was present in Back Bay. Because the decision to not issue an EIS was based upon a misapprehension of the baseline conditions, the judgment below must be vacated and the matter remanded.
On remand, the Corps should consider ten factors promulgated by the Council on Environmental Quality. Two of these factors especially support the plaintiffs’ contention that an EIS should be prepared: the unique characteristics of the geographic area and the degree to which the effects on the quality of the human environment are likely to be highly controversial. The Refuge and its vicinity are unique and “ecologically critical.” Furthermore, the debate of the potential effects on the environment has proved to be highly controversial. The FWS specifically recommended preparation of an EIS, a conclusion with which the Fourth Circuit agreed.
The plaintiffs also reasserted that the permit should not have been issued pursuant to § 404 of the CWA, but the Fourth Circuit declined to address the issue at this time. Accordingly, the judgment was vacated and remanded.
Decided: June 15, 2012
The District Court held that Section 8(i)(1) applies to completed voter registration applications, and as such, defendants violated the National Voter Registration Act (“NVRA”) by refusing to disclose completed voter registration applications. The Appellate Court affirmed the judgment of the lower court.
Project Vote/Voting for America, Inc. (“Project Vote”) initiated this suit after it learned that students at a historically minority university had problems registering to vote in the November 2008 primary and general elections in Virginia. Fearing the registration applications were erroneously rejected by the Elisa Long, the Norfolk General Registrar, Project Vote made multiple requests to Long that the applications and related documents be made available for inspection and copying pursuant to NVRA Section 8(i)(1). Long refused these requests, and the Virginia State Board of Elections (“VSBE”) subsequently issued an informal opinion supporting Long’s denial of the requests, stating that Section 8(i)(1) did not encompass completed voter registration applications. Project Vote then filed suit.
Defendants, Long and the Secretary of the VSBE, moved to dismiss on the basis that Project Vote lacked standing under the NVRA and that Section 8(i)(1) does not mandate public access to completed voter registration applications. The District Court denied the defendants’ motions, and Project Vote moved for summary judgment. Defendants opposed the motion, asserting, in addition to their original arguments, that the District Court’s interpretation of Section 8(i)(1) was incompatible with two other statutes – the Help America Vote Act (“HAVA”) and the Military and Overseas Voter Empowerment (“MOVE”) Act. The District Court ruled in favor of Project Vote, but stayed its judgment pending this appeal.
The Appellate Court addressed the defendants’ first argument that the text of Section 8(i)(1) does not require public disclosure of completed voter registration applications – specifically, that it can be read as relating only to voter removal records. The Court found that the words of the statute are unambiguous, and clearly not limited to voter removal records, as completed voter registration applications obviously fall within the relevant language of Section 8(i)(1): “records concerning the implementation of programs and activities conducted for the purpose of ensuring the accuracy and currency of official lists of eligible voters.” Furthermore, the Court found that the completed voter registration applications at issue do not fall within either of the two exceptions to Section 8(i)(1).
The Appellate Court then rejected the defendants’ argument that Section 8(i)(2) limits the records subject to public disclosure under Section 8(i)(1). While Section 8(i)(2) includes the term “shall include,” the Court found that it did not limit Section 8(i)(1) which clearly states that “all records” falling under that section must be publicly disclosed.
The Appellate Court thus held that Section 8(i)(1) is not limited to voter removal records and requires disclosure of all materials described in the section. As such, defendants are required to permit inspection of the completed voter registration applications.
The Court then moved on to address the defendants’ final argument – that the lower court’s interpretation of Section 8(i)(1) conflicts with HAVA and the MOVE Act. Noting that the requested registration applications clearly fall within the plain language of Section 8(i)(1), the Court determined that it need not consider the impact of HAVA and the MOVE Act on the language of Section 8(i)(1), as it need not look outside the language of the statute to construe it. While not necessary, the Court did take the statutes into consideration and found that both are consistent with the lower court’s interpretation of Section 8(i)(1).
Lastly, the Court stated that the privacy concerns asserted by the defendants did not necessitate reversal of the District Court decision. First, since the lower court expressly stated that social security numbers would be redacted from the completed voter registration application prior to their required disclosure for inspection and copying, the increased risk that comes with disclosure of this uniquely sensitive information was eliminated. Secondly, while the disclosure of other private information on the voter registration applications may inhibit voter registration in some instances, that possible drawback must be balanced against the numerous benefits derived from the disclosure requirement. Furthermore, the Court noted that even if it found that Section 8(i)(1) did not strike the proper balance between transparency and voter privacy, that policy question is best reserved for the legislature, not the courts.
In summary, the Appellate Court affirmed the District Court, holding that completed voter registration applications are subject to disclosure under Section 8(i)(1) of the NVRA since they are clearly “records concerning the implementation of programs and activities conducted for the purpose of ensuring accuracy and currency of official lists of eligible voters.”
– Kassandra Moore
Decided: June 15, 2012
On appeal, defendants challenged the district court’s denial of their petition for habeas corpus, arguing that the sentencing judge erred by making comments that reflected an impermissible religious bias which infected the sentencing procedure in violation of their due process rights. Because defendants’ appeal stemmed from comments made by the trial judge at a state sentencing proceeding, the Fourth Circuit applied its traditional deference afforded to sentencing courts and ultimately affirmed the district court’s denial of defendants’ habeas corpus relief.
This case stemmed from defendants’ robbery of a Sunday morning worship service, in which the three defendants carried firearms into a congregation, robbed the parishioners of money and valuables totaling $2,670, and fled the scene. Defendants’ were subsequently captured by the police and confessed to robbing the church and its members. Eventually, the three defendants all pled guilty on eleven counts of armed robbery and one count of conspiracy to commit armed robbery, and the trial judge held a consolidated sentencing hearing for all three.
The issue on appeal centers on statements made by the trial judge before announcing his sentencing decision. In these statements, the trial judge made numerous religious references, including statements such as “There is scripture that says ‘Vengeance is mine sayeth the Lord’ but every now and then I think the judicial system has to contribute what it can.” Defendants did not directly appeal their sentences but instead filed “Motions for Appropriate Relief” in state court and a petition for habeas corpus in the Western District of North Carolina. The federal magistrate judge’s recommendation denying their habeas corpus petition was adopted by the district court.
Defendants’ argument on appeal relied on the Fourth Circuit’s holding in United States v. Bakker, 925 F.2d 728 (4th Cir. 1991), where the Court reversed a defendant’s sentence because the district judge at sentencing announced his “personal sense of religiosity and simultaneously punish[ed] defendants for offending it.” The Court found Defendants’ reliance on this case to be flawed for two reasons: (1) it ignored the limitations on the scope of review and sources of authority placed on federal habeas analysis by the Antiterrorism and Effective Death Penalty Act (“AEDPA”), 28 U.S.C. § 2254(d); and (2) Bakker and other precedent cases do not disqualify under AEDPA standards the sentencing judge’s comments at issue in the case. The Court concluded that “[p]reserving the free exercise of all religions permits society – through its judges – to offer pointed condemnation of crimes that inhibit the practice of any faith.”
Ultimately, the Court determined that Defendants’ disruption of worship services especially affected the community, and thus, it was appropriate for the sentencing judge to take the circumstances of the crime into account in his sentencing determination. The Court based its decision to deny Defendants’ habeas relief on two main findings. First, the Court found that the sentencing judge’s comments did not reflect the court’s own sense of religious propriety but instead voiced the expressions of the community. Second, even if the sentencing judge adopted some of the religious opinions stated as his own, the Court found that such act did not rise to the level of a due process error mandating habeas relief.
– Allison Hite
Decided: June 14, 2012
In this case, the Fourth Circuit resolved a longstanding division among bankruptcy and district courts, holding that the “absolute priority” rule remains applicable to individual debtors who file a Chapter 11 bankruptcy despite the 2005 enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”).
The court began its opinion by providing a history of the absolute priority rule. In essence, the rule states that in a Chapter 11 business reorganization, the “stockholders are not entitled to any share of the capital stock nor to any dividend of the profits until all the debts of the corporation are paid.” The court next described how the “cram down” procedure can be utilized by a debtor intending to retain property to achieve confirmation of a reorganization plan, but only if the absolute rule is complied with in regards to any dissenting creditors. After Congress passed BAPCPA, however, there was disagreement over the application of the absolute priority rule “when the Chapter 11 debtor is an individual.” While some courts read the amendments to BAPCPA as abrogating the absolute priority rule in individual debtor cases, other courts interpreted the statute narrowly to “merely have the effect of allowing individual Chapter 11 debtors to retain property and earnings acquired after the commencement of the case.”
In the dispute before the court, Ganess and Vena Maharaj (“Debtors”) filed a petition for bankruptcy under Chapter 11 after their auto body repair shop became burdened by significant debt. The debtors submitted a Plan of Reorganization with the bankruptcy court that proposed dividing the creditors into four separate classes. Class III was composed of general unsecured creditors whose claims would be impaired under the Debtors’ plan, and one of its members, Discover Bank, voted to reject the plan. Due to Discover Bank’s opposition, the Debtors sought a cram down to confirm the plan, a move which would still allow the Debtors to retain and operate their business if, as the Debtors requested, the bankruptcy court ruled that the BAPCPA amendments abrogated the absolute priority rule. If the court found that the absolute priority rule remained in effect, the Debtors “would have to liquidate their business to effectuate [the] cram down.”
The Fourth Circuit held that the plain language of the BAPCPA amendments was ambiguous and could be interpreted in multiple ways. Despite the ambiguity of the statutory text, however, the court affirmed the bankruptcy court’s ruling that the absolute priority rule had not been abrogated by the BAPCPA provisions. According to the court, viewing the specific circumstances surrounding the statute’s enactment along with the broader context of modern bankruptcy law, demonstrated Congress’ intent to preserve “the absolute priority rule as it operated prior to the passage of BAPCPA.” As it related to a Chapter 11 proceeding, the BAPCPA provisions simply allowed an individual debtor requesting a cram down to “retain post-petition acquired property and earnings.” The court relied on the Supreme Court’s view that the implied repeal of a longstanding bankruptcy doctrine, such as the absolute priority rule, “is strongly disfavored.” The court stated that if Congress intended such a major change to the reorganization process, it would have been more clearly expressed in the statute.
-John C. Bruton, III
Decided: June 12, 2012
The Real Truth About Abortion appeals from the district court’s grant of summary judgment in favor of the FEC. Real Truth brought this action against the FEC contending that it was “chilled” from posting information about then-Senator Obama because of the vagueness of a Commission regulation and a Commission policy relating to whether Real Truth has to make disclosures or is a political action committee.
Real Truth is a Virginia non-profit corporation organized as an issue adversary organization under § 527 of the Internal Revenue Code. Its IRS filing stated that its purpose was to provide truthful information about the public positions taken by Senator Barack Obama but that it would not “expressly advocate the election or defeat” of any political candidate or “make any contribution” to a candidate. Real Truth commenced this action within days of its incorporation, challenging three Commission regulations implementing the Federal Election Campaign Act (FECA) and defining: when a communication expressly advocates the election or defeat of a clearly identified candidate (11 C.F.R. § 100.22(b)), defining contributions for certain purposes under FECA (11 C.F.R. § 100.57(a)), and regulating the use of corporate or union funds for “electioneering communications” (11 C.F.R. § 114.15) Additionally, Real Truth challenged the Commission’s policy of determining PAC status by using a “major purpose” test on a case-by-case basis. It asserted that the three regulations and the policy were unconstitutional, facially and as applied, for being overbroad and vague, thus in violation of the First and Fifth Amendments.
Real Truth’s as-applied challenge was in the context of two radio advertisements it intended to spend over $1,000 to air during the 60 day period immediately before the 2008 general election concerning then-candidate Obama’s positions on abortion. Its complaint expressed fear that these would be construed as independent expenditures, subjecting it to disclosure requirements and potentially making it a PAC subject to additional regulation. Real Truth sought a preliminary injunction against enforcement of the challenged regulations and policy against its advertisements and the district court denied Real Truth’s motion. On appeal, the Fourth Circuit affirmed the denial. Real Truth then filed a petition for a writ of certiorari in the Supreme Court. While the petition was pending, the Court decided Citizens United v. FEC, striking a provision banning corporations and labor unions from using their general treasury funds for electioneering communications. Based on that decision, the Court granted Real Truth’s petition, vacated the Fourth Circuit’s judgment and remanded the case. Also in the interim, the D.S. Circuit decided EMILY’s List v. FEC, striking down aspects of § 100.57, leading the Commission to announce that it was ceasing enforcement of that regulation. On remand of Real Truth’s remaining challenges, the district court granted summary judgment to the Commission, holding that § 100.22(b) was constitutional and the Commission was entitled to use a multifactor approach on a case-by-case basis for determining PAC status.
On appeal, Real Truth urged the Fourth Circuit to review the regulation and policy under the strict scrutiny standard, arguing they placed onerous burdens on speech similar to those the Supreme Court applied strict scrutiny to in Citizens United. Under Supreme Court jurisprudence, since § 100.22(b) relates only to disclosure and organizational requirements, it is one of the least restrictive forms of regulating speech and does not prevent Real Truth from speaking nor impose a ceiling on campaign related activities. Thus, the Fourth Circuit held that the exacting scrutiny standard should be applied, requiring the government to demonstrate only a “substantial relation” between the disclosure requirement and “sufficiently important government interest.”
Real Truth first contended that the definition of “expressly advocating” under § 100.22(b) was constitutionally overbroad. Under the regulation, expressly advocating is any communication that “could only be interpreted by a reasonable person as containing advocacy of the election or defeat of one of more clearly identified candidate(s)” because it is “unmistakable, unambiguous, and suggestive of only one meaning” and “reasonable minds could not differ.” Real Truth’s challenge was based on the assertion that since the regulation did not require the “magic words” articulated in Buckly v. Valeo – “vote for,” “elect,” “defeat,” or “reject” – it was facially overbroad. However, the Supreme Court jurisprudence has never limited express advocacy to those magic words, and has repeatedly supported requirements that are the functional equivalent of express advocacy. Real Truth next argued that the language of § 100.22(b) was unconstitutionally vague, however the standard could only be applied when reasonable minds could not differ. Furthermore, the Supreme Court has recognized routinely that it is constitutionally permissible to require disclosure for a wider variety of speech than electioneering, because disclosure requirements occasion a lesser burden on speech. The Fourth Circuit concluded that § 100.22(b) is constitutional, facially and as applied to Real Truth’s intended advertisements.
Finally, Real Truth contended that the Commission’s policy for applying the “major purpose” test in determining whether an organization is a PAC is unconstitutional because it weighs vague and overbroad factors with undisclosed weight, and the only permissible factors should be whether campaign related speech amounts to 50% of all expenditures of an organization and the organizations central purpose revealed in its organizational documents. In Buckley, the Supreme Court concluded that defining PACs only based on annual contributions and expenditures could produce vagueness issues, limiting the definition to organizations controlled by a candidate or whose major purpose is the nomination or election of candidates. Following that decision, the Commission adopted a policy of determining PAC status on a case-by-case basis, taking into consideration all of a group’s political activities as well as public statements, fundraising appeals, and organizational documents. The Fourth Circuit concluded that the Commission made a well-reasoned decision in taking a case-by-case approach rather than promulgating a new definition of PACs, because the determination of that status is inherently a comparative task and often requires weighing the importance of some of a group’s activities against others. Although certain factors such as expenditure rations and organizational documents may be particularly relevant, the Commission is not foreclosed from using a more comprehensive methodology. Ultimately, the Fourth Circuit affirmed the district court’s grant of summary judgment, holding that the Commission’s policy is constitutional because its multi-factor major purpose test is consistent with Supreme Court precedent and does not unlawfully deter protected speech.
Decided: June 7, 2012
Wilson, a recruit for the Fire Department, died during a “live burn” training exercise. Officials created debris, stuffed walls with highly flammable materials, and lit fires at multiple locations in a building. Wilson and her team encountered severe fire conditions in the building and realized their lives were in danger. They began to evacuate through a window, but Wilson had difficulty getting through the window and fell back into the building. The team got Wilson through the window, but she was unconscious. She was pronounced dead and an autopsy confirmed thermal injury and asphyxia as the causes of death.
Wilson’s survivors and estate commenced this action pursuant to 42 U.S.C. § 1983, alleging Wilson’s death was avoidable with adequate preparations and the Fire Department created unduly dangerous conditions. Count I asserted that the Fire Department’s conduct “shocks the conscience and was either intentionally reckless, grossly negligent, and/or deliberately indifferent towards Ms. Wilson’s … life and liberty.” Other counts alleged violations of the Maryland Constitution and other state law duties. The district court dismissed Count I for failure to state a claim under the Fourteenth Amendment, and it dismissed the remaining counts without prejudice, to be resolved in state court. The plaintiffs appealed.
The plaintiffs argued the facts were sufficient to state a substantive due process violation because it alleged the Fire Department’s conduct was deliberately indifferent to Wilson’s life and safety. The plaintiffs conceded that the Fire Department did not intend to cause harm, but claim case law recognizes that a showing of deliberate indifference can be sufficient to establish a violation when the State created the danger or was in a special relationship with the plaintiff, such as having custody over her. In DeShaney v. Winnebago County Department of Social Services, 489 U.S. 189, 201 (1989), the Court refused to hold a department of social services liable for not protecting a child from an abusive father and explained that “while the State may have been aware of the dangers that [a] child faced in the free world, it played no part in their creation, nor did it do anything to render him any more vulnerable to them.”
Defendants contend that the government’s conduct can only violate the substantive due process guarantee of the Constitution if the government’s conduct was “intended to injure in some way unjustifiable by any government interest.” Cnty. of Sacramento v. Lewis, 523 U.S. 833, 849 (1998). Because the facts do not suggest the Fire Department officials were motivated by any intent to injure Wilson, the defendants argue that the complaint fails to state a claim under 42 U.S.C. § 1983 on which relief can be granted.
Due process protects the individual against arbitrary action of the government, including conduct intended to injure in some way unjustifiable by the government — that which shocks the conscience. Deliberate indifference may give rise to a violation where the government is required to take care of those who have already been deprived of their liberty and are in government custody, but this lower standard does not apply to persons in an employment relationship with the government. Collins v. City of Harker Heights, 503 U.S. 11, 127 (1992). In Collins, the estate of an employee who died in the course of employment sued the city, alleging various wrongs committed by the city. The Court held that, even though the alleged facts might have shown deliberate indifference, in the context of voluntary employment, it was not arbitrary or conscience shocking, therefore there was no substantive due process violation. As in Collins, the allegations in this case might be consistent with deliberate indifference, but because of the voluntary employment context, the plaintiffs did not allege arbitrary or conscience-shocking conduct because they failed to show that the Fire Department intended to harm Wilson.
In Waybright v. Frederick County, 528 F.3d 199, 208–09 (4th Cir. 2008), the Fourth Circuit held that a fire department recruit who died during a training exercise could not, without alleging intent to harm, maintain an action for a substantive due process violation. The recruit was not in government custody, but could walk away from the job and the exercise at any time. Id. at 207. Due process does not impose a duty to provide government employees with a safe workplace or warn them against risks of harm. Id. In this case, the Fire Department created a danger, but a due process violation does not necessarily follow. If the court recognized government liability in this case because the government created a dangerous condition, the practical consequences would be immense. The Fire Department’s constitutional liability must turn on whether it intended to harm new recruits. Because there are no facts supporting this conclusion, the district court properly dismissed Count I of the complaint. The plaintiffs’ state law claims can be litigated in state court. The Fourth Circuit affirmed the district court’s judgment.
Circuit Judge Wynn concurred in the result, agreeing that the facts were insufficient to state a claim for a violation of Due Process. Wynn believed Collins, 503 U.S. at 130, which held there is no duty to provide certain minimal levels of safety and security in the workplace, resolves this case. In Collins, the Supreme Court emphasized that § 1983 was not intended to turn every tort claim into a constitutional violation or to serve as a “guarantee against incorrect or ill advised personnel decisions.” Collins, 503 U.S. at 128–29 (quoting Bishop v. Wood, 426 U.S. 341, 350 (1976)). Subsequently, the Court clarified what conduct is sufficiently “conscience shocking” to state a claim under § 1983, stating that “liability for negligently inflicted harm is categorically beneath the threshold of constitutional due process.” Lewis, 523 U.S. at 849 (citing Daniels v. Williams, 474 U.S. 327, 328 (1986)). Under some circumstance, deliberate indifference can shock the conference, but because it is typically a close decision, judges have discretion to engage in an “exact analysis of circumstances” rather than mechanical application of the rules. Collins and Lewis underscore the Supreme Court’s view that, at least in some cases, deliberate indifference can provide grounds for a § 1983 claim. The majority opinion fails to distinguish the potentially meritorious claims identified by the Supreme Court in Collins from those requiring intent to injure.
It is unnecessary to engage in the type of judicial discretion prescribed by Lewis in this case, because the facts are similar to the facts in Collins and Waybright. As a result the issue presented should be resolved on narrow grounds. The petitioner’s claim fails because it attempts to transform a negligence claim into a violation of Due Process, which the Court foreclosed in Collins and reaffirmed in Lewis. The problem with petitioner’s complaint is not that it fails to allege an intent to harm, but rather that the factual allegations do not shock the conscience in a constitutional sense. In affirming the district court’s judgment, the Fourth Circuit should recognize that government employees are not categorically excluded from claiming deliberate indifference as a basis for Due Process claims.
Tire Engineering and Distribution, LLC v. Shandong Linglong Rubber Company, Ltd., No. 10-2271; Tire Engineering and Distribution, LLC v. Al Dobowi, Ltd., Nos. 10-2273 & 10-2321
Decided: June 6, 2012
At the outset, note that the Appellate Court refers collectively to Tire Engineering & Distribution, LLC; Bearcat Tire ARL, LLC; Bcatco A.R.L., Inc.; and Jordan Fishman as “Alpha.” It refers collectively to Al Dobowi, Ltd.; Al Dobowi Tyre Co., LLC; TyreX International, LTD.; and TyreX International Rubber Co. Ltd. as “Al Dobowi.” Finally, the Court refers collectively to Shandong Linglong Rubber Co., Ltd.; and Shandong Linglong Tire Co., Ltd. as “Linglong.”
Alpha is a domestic producer of mining tires. Alpha sued Al Dobowi and Linglong, both foreign corporations, alleging that they conspired to steal Alpha’s tire blueprints in order to produce tires and sell them to former Alpha customers. At trial, the jury found for Alpha and awarded the company $26 million in damages. The District Court upheld this award of damages, and the defendants appealed. On appeal, Al Dobowi and Linglong contest the verdict and the District Court’s exercise of personal jurisdiction. The Appellate Court held that the lower court had jurisdiction over Al Dobowi and Linglong, and affirmed the jury’s damages award. However, the Appellate Court affirmed the District Court’s judgment that Al Dobowi and Linglong are liable to Alpha only under the Copyright Act and for conversion under Virginia Law, dismissing all other theories of liability that were submitted to the jury. Finally, the Appellate Court vacated the lower court’s award of attorney’s fees.
The Appellate Court noted that, in light of the jury verdict in favor of Alpha, it would view the evidence in the light most favorable to Alpha, and review factual findings for clear error.
The relevant underlying facts are as follows: Alpha’s designs for its “Mine Mauler” were trademarked, and it’s blueprints closely guarded. In 2005, Canning, a former employee of Alpha, Vance, an employee of Alpha, and Kandhari, the chairman of Al Dobowi, met to discuss the possibility of Al Dobowi entering the mining-tire business. In furtherance of the three men’s plan, Vance soon began working for Al Dobowi out of his Virginia home, even supplying Al Dobowi with Alpha’s blueprints, customer list, and cost information, which the men planned to use to produce and sell a line of mining tires that mimicked Alpha’s design. The men then sought to find a tire manufacturer that would produce tires based on Alpha’s designs, and Linglong soon agreed to do so. Evidence presented makes it clear that Linglong knew from the outset that the blueprints being used were stolen, and that Vance was working for Al Dobowi out of Virginia. Linglong proceeded to manufacture mining tires based on Alpha’s design, and Al Dobowi then sold those tires under the name Infinity, even stealing away one Alpha’s largest customers. In 2006, Alpha confirmed its suspicions that Vance had stolen its blueprints and subsequently brought suit against Al Dobowi and Linglong.
The Appellate Court first addressed the Appellants’ claim that the District Court lacked personal jurisdiction over them, reviewing the lower court’s decision de novo. The Appellants alleged that their contacts with Virginia are negligible, and, as such, it would be a violation of the Fourteenth Amendment’s Due Process Clause if they were forced to litigate in Virginia. The Appellate Court found this argument meritless, stating that the District Court’s factual findings established that Al Dobowi and Linglong possessed sufficient contacts with Virginia, the forum state, to satisfy the demands of due process. Note that the Virginia long-arm statute extends personal jurisdiction to the outer limits of due process. Since Alpha only argued that the District Court had specific jurisdiction over the defendants, the Court’s analysis is limited to specific jurisdiction. The Court identified three relevant factors in determining whether a court has personal jurisdiction over a nonresident defendant: (1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the forum state; (2) whether the plaintiff’s claims arise out of those activities; and (3) whether the exercise of personal jurisdiction is constitutionally reasonable.
In applying those factors, the Appellate Court found that Al Dobowi purposefully availed itself of the privilege of conducting activities in Virginia by conspiring to unlawfully copy Alpha’s blueprints in Virginia, and subsequently corresponding with a Virginia-based employee. Furthermore, the Court found that Alpha’s claims clearly arise out of Al Dobowi’s contacts directed at Virginia, noting that Al Dobowi’s original meeting in Virginia was the “genesis” of the dispute. Finally, the Court found that the lower court’s exercise of jurisdiction over Al Dobowi was constitutionally reasonable. Despite the disadvantages Al Dobowi faced as a foreign corporation, the Court noted Al Dobowi’s ability to both foresee litigation in Virginia as a possibility, and to secure able counsel. The Court found that the forum state had an interest in ensuring that national copyright and trademark laws are not violated within it borders, and noted that the state had an even greater interest in the outcome since some of the claims were based on Virginia law. The Court also noted Alpha’s obvious interest in obtaining relief.
Applying this three-factor analysis to Linglong, the Court found that it, too, purposefully availed itself of the privilege of conducting business in Virginia by repeatedly “reaching into” Virginia to transact business with Vance, thus invoking the benefits and protections of Virginia Law. Specifically, Linglong collaborated extensively with Vance from his Virginia office regarding the blueprints and designs. The Court further noted that Linglong should have reasonably anticipated being brought into litigation in Virginia. Next, the Court found that Alpha’s claims arise out of this activity since Linglong’s correspondence with Virginia forms a central part of Alpha’s claims. Finally, the Court found that the lower court’s exercise of jurisdiction over Linglong was constitutionally reasonable for the same reasons as given above with respect to Al Dobowi.
Having found that the District Court properly exercised jurisdiction over the appellants, the Court then addressed the merits of the appellants’ claims. The appellants’ first argued that the Copyright Act does not afford Alpha a remedy because the only claims Alpha raised involved conduct abroad, and the Copyright Act does not reach extraterritorial conduct. In the alternative, appellants’ argued that if the Copyright Act reaches foreign conduct that flows from a domestic violation, then it only applies where the domestic violation is not barred by the Copyright Act’s three-year statue of limitations. The Court adopted the predicate-act doctrine, which provides that a plaintiff may collect damages from foreign violations of the Copyright Act so long as the foreign conduct flows from domestic infringement. Applying predicate-act doctrine, the Court found that Alpha established a domestic violation – Vane and Al Dobowi’s unlawful conversion and unauthorized reproduction of Alpha’s blueprints. The Court also found that Alpha demonstrated damages flowing from the extraterritorial exploitation of this conduct – namely, producing tires identical to Alpha’s and selling those tires to Alpha’s former customers. The Court then recognized that no court applying the doctrine has followed the appellants’ proposal that the doctrine’s application be limited only to cases in which the domestic violation is not time barred, and the Court declined to do so here.
Appellants next challenge the District Court’s denial of their Rule 50 motion regarding Alpha’s Virginia state law conversion claim, alleging that Alpha’s claim is preempted by the Copyright Act. The Court laid out the two-part test to determine if a claim is preempted by the Copyright Act: (1) whether the claim falls within the subject matter of copyright and (2) whether the claim protects rights that are equivalent to any of the exclusive rights of a federal copyright. Applying this test, the Court found that Alpha, in proving its conversion claim, was able to prove the extra element that the defendant retained control of the blueprints – an element in addition to those needed to prove its claim under the Copyright Act. Thus, the Court concluded that the Copyright Act does not preempt the conversion claim, and the District Court was correct to deny the appellants’ Rule 50 motion.
Appellants next challenge the jury’s liability verdict for trademark infringement under the Lanham Act, alleging that the Lanham Act does not apply to the extraterritorial acts claimed by Alpha. The Appellate Court agreed with this argument, concluding that appellants’ trademark infringement lacks sufficient effect on U.S. commerce for the Lanham Act to apply.
Appellants next challenge the jury’s verdict on Alpha’s common-law civil conspiracy claims, and contend that those claims should be dismissed. Under Virginia law, a common law claim requires proof that the underlying tort was committed. Thus, if the underlying tort is dismissed, the conspiracy claim must also be dismissed. In this case, because the Appellate Court dismissed the underlying tort for the conspiracy to infringe trademark – the Lanham Act claim – it found that it also must dismiss the corresponding conspiracy claim. Furthermore, the Court found that this conspiracy claim is preempted by the Copyright Act. While the Court concluded that Alpha’s conspiracy claim based on the underlying tort of trademark infringement should be dismissed, it found that the conspiracy claim based on the tort of conversion should not be dismissed since it upheld the jury’s verdict on the underlying conversion claim, and it is not subject to preemption by the Copyright Act – unlike the conspiracy to infringe trademarks claim.
Since the Court dismissed the conspiracy to infringe trademarks claim but found the conspiracy to convert claim meritorious, the question still remained as to whether the jury’s verdict on the civil conspiracy claim could stand. Given that the verdict form did not require the jury to issue a special finding of which underlying torts the appellants conspired to commit, the Appellate Court found that the verdict could not stand, and it set aside the verdict on this count.
The Court then addressed the appellants’ challenge to the damages award. Despite the fact that the Court reversed the jury’s verdict on some claims, it affirmed the lower court’s ruling that a new trial on damages was not needed. The Court found that the claims are based on the same conduct and have basically the same maximum recovery amount. As such, the Court found that any error was harmless.
In summary, the Appellate Court held that the District Court properly exercised personal jurisdiction over the appellants; sustained the jury’s liability verdict based on the Copyright Act and conversion under Virginia law; dismissed all other theories of liability presented to the jury; affirmed the jury’s damages award; vacated the District Court’s award of attorney’s fees; and reversed the District Court’s dismissal of the statutory conspiracy claim and remanded for further proceedings.
Diaz, Circuit Judge, dissenting in part: Judge Diaz dissented from the portion of the majority opinion that upheld the jury’s damages award. Diaz, viewing the relevant precedent as foreclosing sustaining a general award of compensatory damages when a theory of liability has been dismissed post verdict, would have remanded the case for a limited trial on damages.
– Kassandra Moore
Decided: June 5, 2012
Inmate Jonathan Lee Henslee appealed the district court’s dismissal of his complaint for failure to state a claim on which relief can be granted and moved to proceed in forma pauperis (“IFP”). The Fourth Circuit granted Henslee’s motion to proceed IFP, preventing the district court’s dismissal of Henslee’s complaint from counting as a third strike under 28 U.S.C. § 1915(g) (2006) and “effectively insulat[ing] the dismissal from appellate review.”
This case centers on the Prison Litigation Reform Act (“PLRA”), 28 U.S.C. § 1915A, which allows prisoners to qualify for IFP status to bring civil actions challenging the circumstances of their incarceration. Under PLRA, a prisoner cannot bring an action or appeal IFP “if the prisoner has, on 3 or more prior occasions … brought an action or appeal in a court of the United States that was dismissed on the grounds that it is frivolous, malicious, or fails to state a claim upon which relief may be granted … .” 28 U.S.C. § 1915(g). The Fourth Circuit determined the issue in this case to be “whether an order dismissing a complaint as frivolous or malicious, or for failure to state a claim counts as a strike if an appeal of that order is pending or the time for filing an appeal has not expired.” The Court found that while it has previously “addressed what constitutes a strike,” it has “not addressed under what circumstances a district court’s dismissal acts as a third strike, precluding IFP status on appeal of the underlying dismissal.” The Court also noted that other circuits are split on this issue.
To begin its analysis, the Court first found that at least seven circuits have adopted the majority view, which holds that dismissal of a prisoner’s civil action as frivolous, malicious, or for failure to state a claim does not count as a strike for purposes of § 1905(g) until the litigant has exhausted or waived his appeals. The Court then proceeded to a review of the plain language of the statute and found the language to be ambiguous. Based on this interpretation, it rejected the Seventh Circuit’s holding that the statute’s language “unambiguously requires denial of IFP status for any and all actions or appeals filed after a prisoner received three dismissals.” The Court then turned to the statute’s legislative history, prior interpretations, related statutes, and the underlying congressional purpose and public policy considerations.
Ultimately, after a thorough analysis of these sources, the Court granted Henslee’s motion to proceed IFP for the purpose of the present appeal and held that a district court’s dismissal of a complaint cannot act as a third strike, precluding a prisoner litigant from proceeding IFP on an appeal of the underlying dismissal.
– Allison Hite
Decided: May 31, 2012
The Fourth Circuit Court of Appeals reversed William Roosevelt Cloud’s money laundering convictions applying State v. Santos, 553 U.S. 507 (2008). Cloud’s convictions all stemmed from a complex mortgage-fraud scheme where Cloud would dupe buyers with good credit into purchasing property as an ostensible joint-real estate investment with Cloud; unbeknownst to the buyers, however, the property had already been “flipped” by Cloud who was making a profit on each deal and who had in his pocket a group of lawyers, loan officers, and mortgage brokers all of whom were perpetuating the conspiracy.
The court first held that the trial judge did not err in allowing victim-impact testimony from a number of buyers who had been swindled by Cloud. Such testimony was relevant, the court stated, because at trial Cloud had defended by arguing that these buyers were not victims, and in fact, they were guilty of committing bank fraud. The court followed a Third Circuit case in concluding that victim-impact testimony is relevant to prove a defendant’s “intent to defraud.”
The court next considered the trial judge’s denial of Cloud’s separate motions for judgment of acquittal under Rule 29 of the Federal Rules of Criminal Procedure. Applying the narrowest concurrence in the Supreme Court’s fractured opinion inUnited States v. Santos, 553 U.S. 507 (2008), the court reversed Cloud’s multiple counts of money laundering because of a “merger problem.” According to the court, a merger problem exists when a defendant is prosecuted for both money laundering and an underlying illegal activity that involved a money transaction to pay for the costs of the illegal activity where the separate money laundering charge is based on the same illegal transaction that the defendant is accused of committing. If the government was allowed to prosecute a defendant who uses the “gross profits”—as opposed to the “net profits”—of his illegal activity to cover the costs of the underlying crime under the money laundering statute, in addition to prosecuting the initial offense, the government would in effect be committing “double jeopardy.” Otherwise, “any crime involving costs would automatically become money laundering when the money received from the crime was used to pay expenses.” Thus, the court noted, the Supreme Court has determined that “[a]n individual cannot be convicted of money laundering for paying the essential expenses of operating the underlying crime.”
Applying this precedent to Cloud’s money laundering convictions, the Fourth Circuit held that various kickbacks and bribes made by Cloud to those complicit in his mortgage scheme constituted the “essential expenses of his underlying fraud.” Because these payments supported convictions for both money laundering and criminal fraud, a merger problem existed; therefore, the court ruled that the money laundering convictions could not stand.
-John C. Bruton, III
Decided: May 31, 2012
The Delebreaus appealed the district court’s judgment that the one year statute of limitations under the West Virginia Consumer Credit and Protection Act barred their claims against Bayview. The sole issue on appeal was whether, under the statute of limitations, “the due date of the last scheduled payment of the agreement” was the loan acceleration date set by Bayview declaring the entire loan amount due or the loan maturity date designated in the Delebreau’s loan documents. The Fourth Circuit Court of Appeals concluded that the acceleration date was the operative date for purposes of applying the statute of limitations because no further payments were scheduled after that date.
In 1999, the Delebreaus refinanced a home mortgage with Option One Mortgage Corporation, executing a note in the amount of the principal loan amount, $84,500, and a deed of trust securing the note on the property and granting the lender the option to accelerate the loan in the event of a default. In March 2004, Bayview began servicing the loan pursuant to an agreement with Option One. As a result of several late payments, the Delebreaus entered into a loan modification agreement with Bayview in June 2006 which increased the principal balance of the loan and extended the maturity date to June 1, 2030. After the Delebreaus again fell behind on the loan, Bayview sent them a letter in June 2007 advising them that they were in default and exercised their right to accelerate the loan, effective June 5, 2007. The full amount of the loan immediately became due and payable, and no additional payments were scheduled thereafter.
In March 2009, the Delebreaus filed an action on behalf of borrowers whose home mortgage loans were serviced by Bayview, alleging that Bayview improperly added fees to borrowers’ accounts in violation of the Consumer Credit Act. Bayview filed a motion for summary judgment, arguing that the Delebreaus’ claims were barred by the statute of limitations. The district court agreed with Bayview, holding that the claims were barred because the Delebreaus’ did not file the action until more than one year after the acceleration date.
The Delebreaus appealed the judgment, contending that the district court erred in holding that under the terms of the parties’ agreement, the statute of limitations began to run from the acceleration date. The court of appeals first noted that the purpose of a statute of limitation is to ensure that causes of action be brought within a reasonable period of time, encouraging promptness and avoiding stale claims. The determination of the meaning of the statutory phrase “due date of the last scheduled payment of the agreement” begins with considering whether the language is unambiguous. The court concluded that the meaning of the statute was unambiguous because it plainly referred to the last date under the parties’ agreement providing for payment of a specified loan amount. The original schedule of payments ending in 2030 no longer had any effect under the terms of the deed of trust, since the entire amount was due at that time. The court of appeals noted that the Delebreaus’ interpretation was clearly not in keeping with the purpose of statutes of limitation, as it would result in the claims expiring on June 1, 2031, more than twenty years after their default. The court affirmed the district court’s ruling, concluding that since no additional payments were scheduled after the date Bayview exercised the right of acceleration under the deed of trust, that date became the last scheduled payment under the statute of limitation, and the Delebreaus were foreclosed from bringing their claims.
Decided: May 25, 2012
Waddell was sentenced to life imprisonment, but sought habeas corpus relief in the Western District of North Carolina, pursuant to 28 U.S.C. § 2254. Waddell claimed that the North Carolina Department of Correction (“DOC”) improperly excluded “good time credits” when it calculated his release date, and, as such, his continued imprisonment violates his constitutional rights. The District Court found that Waddell’s petition for habeas corpus relief was time-barred, and in the alternative, it denied his petition on its merits. Waddell appealed, and the Appellate Court affirmed the judgment of the lower court.
A brief description of the relevant facts and procedural history are necessary to an understanding of the Appellate Court’s opinion. In 1974, North Carolina’s murder statute was revised, making the death penalty the mandatory sentence for first-degree murder. In 1975, Waddell was convicted of first-degree murder, and thus was given the death penalty. Subsequently, in 1976, the United States Supreme Court found the North Carolina murder statute unconstitutional, vacated Waddell’s death sentence, and remanded to the North Carolina courts where Waddell received a sentence of life imprisonment. This life sentence was imposed in 1976 under N.C. Gen. Stat. § 14-2 (1974), the so-called “eighty-year rule,” which provided that a life sentence would be considered imprisonment for a term of 80 years. This eighty-year rule was enacted in 1974, but repealed in 1977, leaving only a small group of North Carolina prisoners, including Waddell, who were sentenced to life in prison under the rule (“eighty-year prisoners”).
Also relevant to the case at hand is the DOC’s policy on “good time credits.” The DOC awards prisoners sentencing credits for good behavior and productivity, but, when applied to life sentence prisoners, such as Waddell, these credits have historically been applied to the calculation of parole eligibility and custody grade, but not as an adjustment to the release date. The release date of such prisoners was originally recorded as “LIFE” or some other term, rather than an actual date.
In 2005, one of the eighty-year prisoners filed a request for post-conviction relief, alleging that once his good time credits were applied to his release date he had served his eighty-year sentence. Ultimately, this led the Secretary of Correction to direct that prisoners sentenced to life under the eighty-year rule were deemed to have an unconditional release date eighty years from the date of conviction, with no good time credit adjustments. Under this formulation, Waddell received a release date of October 31, 2054. After the Secretary of Correction’s decision, several of the eighty-year prisoners filed for post-conviction relief alleging error in their good time credits not being applied to their release dates. The proceedings, handled in varying superior courts, resulted in conflicting rulings. Thus, in 2010 the Supreme Court of North Carolina reviewed these rulings in Jones v. Keller, and upheld the DOC’s decision to not apply good time credits to the sentences of the eighty-year prisoners. The court found that the rules and regulations regarding good time credits were administrative, not judicial, and, as such, it was appropriate to give deference to the DOC’s decision. The court, in Jones, also held that there was no equal protection violation as there was a rational basis for treating eighty-year prisoners differently than other prisoners – the fact that they were convicted of the more severe crime of first-degree murder. Finally, the Jones court rejected an ex post facto argument, which is based on the principle that a state cannot adopt a respective law that alters the punishment of a crime that was committed before the law was enacted. No legislation altered Jones’ award of good time credits, thus he had no suffered an ex post facto injury and the argument failed on the merits.
In the present case, the Appellate Court noted that since the North Carolina Supreme Court adjudicated the relevant habeas corpus claims on the merits in Jones, it could not grant relief to Waddell unless the Jones decision was contrary to, or involved an unreasonable application of, established federal law, or was based on an unreasonable determination of the facts based on the evidence presented.
On appeal, Waddell’s specific claims are, first, that his 28 U.S.C. § 2554 petition is not time-barred, and, second, that contrary to the decision in Jones, the DOC erred in failing to apply his good time credit to his release date. In support of his second claim, Waddell contends that the Jones decision was contrary to, and involved an unreasonable application of, established federal law, thus allowing the Court of Appeals to grant him relief, for two reasons. First, Waddell alleges that theJones court disregarded applicable due process jurisprudence in its decision to give deference to the DOC’s decision regarding the application of good time credits to eighty-year prisoners. Secondly, Waddell contends that the Jones court erred in applying the ex post facto principles, and that the DOC’s decision retroactively deprived him of his right to use his good time credits in calculating his release date.
Addressing Waddell’s first claim – that his § 2554 petition was not time-barred – the Appellate Court noted that in 1996, the Antiterrorism and Effective Death Penalty Act of 1996 (“AEDPA”) subjects § 2554 petitions of state prisoners to a one-year state of limitations, and Waddell’s petition, which was not filed within one year of either his conviction or the AEDPA’s enactment, was found to be time-barred by the District Court. The thrust of Waddell’s argument on appeal is that the factual predicate of his claims did not exist until the DOC failed to release him based on a sentence calculated with his good time credits applied. While Waddell’s argument contained a factual error, the Appellate Court noted that his argument could be construed in such a way as to present a possibly valid state of limitations argument. However, the Court declined to decide this issue stating that it would decide the case on the merits, thus rendering a decision as to whether Waddell’s claim are time-barred unnecessary.
The Appellate Court then turned to Waddell’s first challenge to the ruling of the Jones court. Specifically, Waddell contends that the DOC awarded him good time credits that reduced his sentence, and then deprived him of those credits without the minimum processes necessary to satisfy due process guarantees. The Court found this argument flawed. Since the DOC never used good time credits to reduce the sentence of eighty-year prisoners, Waddell’s never had a right to use his good time credits in such a manner, thus an argument that this right was abrogated fails.
The Appellate Court then addressed Waddell’s claim of an ex post facto violation. Mirroring the decision in Jones, the Court found that Waddell’s argument was meritless. Waddell’s sentence for his crime was life in prison, and his sentence remains life in prison. The DOC’s failure to apply his good time credits to his sentence was not the result of subsequent legislation, and thus does not support an argument of ex post facto injury. The Court reiterated that while North Carolina law provides for the award of good time credits, the DOC determines how those credits are applied.
In summary, the Appellate Court affirms the judgment of the District Court denying Waddell’s § 2554 petition on the merits.
– Kassandra Moore
Decided: May 23, 2012
On appeal to the Fourth Circuit, Defendants challenged their convictions of the crime of piracy and their resulting life-plus-eighty-year sentences. The Fourth Circuit affirmed all of the defendants’ convictions, as well as their sentences.
This case arose out of Defendants’ failed attack on the USS Nicholas when that vessel was conducting a counter-piracy mission in the Indiana Ocean in April 2010. Defendants, all Somalis, were captured by the USS Nicholas and were quickly apprehended and transported to the Eastern District of Virginia, where they were convicted of the crime of piracy, pursuant to 18 U.S.C. § 1651, in addition to other criminal offenses. Defendants were subsequently indicted by a grand jury on fourteen counts, including piracy. The Eastern District of Virginia was identified as the proper venue under 18 U.S.C. § 3238, and after an eleven day trial, the jury returned separate verdicts of guilty against all defendants on all counts. The defendants were then each sentenced to life plus eighty years for their convictions.
In challenging their convictions, Defendants first argued that their failed attack on the USS Nicholas did not constitute “piracy” as it is used in 18 U.S.C. § 1651 because they did not take any property, i.e. they did not commit the requisite “robbery.” In addressing this issue, the Fourth Circuit assessed whether the district court erred in its interpretation of this statute. In agreeing with the district court’s assessment of the statute’s definition of piracy, the Court dismissed the defendants’ position that the definition of piracy was fixed when Congress first passed the Act of 1819. The Court refused to accept this “static” definition of piracy, such that it would be limited to requiring the element of robbery, and instead agreed with the district court that § 1651 “incorporates a definition of piracy that changes with advancements in the law of nations.” Therefore, the Court concluded that Defendants’ convictions of piracy could stand, despite the fact that they did not commit robbery.
Defendants also challenged the district court’s denial of their individual motions to suppress statements that they made while on board the USS Nicholas three days after being captured. They argued that their Fifth Amendment rights were violated because the investigators failed to adequately advise them of their right to counsel and did not obtain lawful waivers of this right, nor their right to remain silent. The Fourth Circuit considered this matter in the context of the requirements underMiranda v. Arizona. In affirming the district court’s determination that Defendants were adequately informed of their rights on this matter, the Court stated, “[t]he relevant ‘inquiry is simply whether the warnings reasonably convey to a suspect his rights as required by Miranda.’” The Court conducted a “totality of the circumstances” analysis to determine whether Defendants knowingly and intelligently waived their rights, and it found that the warnings had been translated to the Defendants in their native language, such that any problems arising from a language barrier were alleviated. Furthermore, the Court determined that while the Defendants “may not have grasped the nature and processes of the United States judicial system,” there was no indication that they did not understand “the concept of an attorney,” and regardless, the Court found that under the Supreme Court’s holding in Colorado v. Spring, 479 U.S. 564 (1987), “it is not necessary that ‘a criminal suspect know and understand every possible consequence of a waiver of the Fifth Amendment privilege.’” Based on the foregoing, the Court found no error in the district court’s determination that the Defendants “must have understood, from the translated words … that they did not have to speak … and that they could request counsel.”
Finally, the Court considered the Defendants’ argument that the district court erred in refusing to merge their three convictions under 18 U.S.C. § 924(c) for sentencing purposes. In dismissing this argument and affirming their sentences, the Court relied on its finding in United States v. Lighty, 616 F.3d 321, 371 (4th Cir. 2010), “that multiple consecutive sentences under § 924(c)(1) are appropriate whenever there have been multiple, separate acts of firearm use or carriage,even when all of those acts relate to a single predicate offense.”
– Allison Hite
Decided: May 22, 2012
Plaintiff Wag More Dogs, LLC, a “doggy daycare” business located in Arlington County, Virginia, (“County”) filed a lawsuit against the County seeking a declaratory judgment and an injunction after the County informed the business that a painting on the rear of its building violated a local sign ordinance. The painting consisted of cartoon dogs, bones, and paw prints, and was intended by the store to “beautify the area” and “create goodwill” with people who visited the adjacent dog park. Nonetheless, the painting measured approximately 960 square feet which was in contravention of the local proscription on commercial buildings from erecting “business signs” that exceed a total of 60 square feet. The County deemed the store’s mural as a “business sign” because its contents—dog-related paintings—were associated with the store’s business of providing pet daycare services.
The Plaintiff challenged the County’s sign ordinance on its face, claiming that it was an unconstitutional content-based restriction on speech. In addition, the Plaintiff claimed that as applied, the ordinance impermissibly restricted its noncommercial speech while not prohibiting other forms of noncommercial speech. The Plaintiff’s content-based argument was based on the fact that the ordinance’s size limitation only applied to “business signs” and some signs, e.g., directional signs, “no-trespassing” signs, were completely exempt from the ordinance. In addition, the Plaintiff claimed that the sign ordinance was unconstitutionally vague, and finally, that the ordinance’s prohibition was a prior restraint on the store’s right to exercise free speech. The federal district court granted the County’s motion to dismiss and denied the Plaintiff’s motion for a preliminary injunction as moot.
On appeal, the Fourth Circuit held that the sign ordinance was content neutral on its face and easily survived an intermediate scrutiny test. Though the ordinance imposed different requirements on different types of speech, the court found that the size restrictions on business signs were justified by reasons unrelated to the content being expressed. According to the court, Wag More Dogs could not demonstrate that the government’s regulation on its freedom of expression was due to its “disagreement with the message” being conveyed by the business. Instead, the regulation was justified by the County’s interests in promoting traffic safety and enhancing the area’s aesthetic environment. Thus, “even if [the ordinance] has an incidental effect on some speakers or messages but not others,” that limited effect did not convert the permissible “time, place, and manner” restriction into an unconstitutional content-based restriction. The court also rejected the Plaintiff’s argument that, as applied to its business, the ordinance was an unconstitutional restriction on noncommercial speech. This argument failed, according to the court, because the painting on the rear of the Plaintiff’s building was “tantamount to advertising,” and as such, constituted commercial speech subject to the ordinance’s 60 square feet limitation on “business signs.”
In considering Wag More Dogs’ theory that the County’s definition of “sign” was too vague to be enforced, the Fourth Circuit ruled that “an ordinary person exercising ordinary common sense can sufficiently understand and comply with” the definition, especially when read with the accompanied provisions of the ordinance. Finally, the court held that the ordinance was not an unlawful prior restraint on the business’s freedom of speech because the County’s zoning ordinance provided for a mechanism to apply to a county board for an exemption from the various sign restrictions. In addition, Wag More Dogs had the opportunity to seek meaningful and “effective judicial review” from decision of the board “granting or failing to grant” the exemption.
-John C. Bruton, III
Decided: May 16. 2012
Paulette Etoty appealed the sentence imposed for her convictions of Social Security fraud and aggravated identity theft, specifically challenging the district court’s application of the “vulnerable victim” enhancement under § 3A1.1(b) of the Sentencing Guidelines. Etoty pled guilty in 1995 in Florida to twelve counts of Social Security fraud. At the trial, the birth certificate and Social Security number of one of her victims, Paulette Taylor, was introduced. Ms. Taylor was a disabled adult receiving Social Security benefits and living with her mother in Illinois. While Etoty was incarcerated for her Florida convictions, she applied for a social security card in Ms. Taylor’s name, which she used to commit additional frauds, including using Ms. Taylor’s credit to take out substantial loans. For these additional crimes, Etoty was charged November 2009 with Social Security fraud and aggravated identity theft.
At her sentencing hearing, Etoty disputed the Pre-Sentence Report’s recommendation that she receive an enhancement because Ms. Taylor was a vulnerable victim because she did not specifically target Ms. Taylor because of her disability. The district court overruled her objection and sentenced her to 21 months for social security fraud followed by a mandatory 24 months for the aggravated identity theft conviction.
The Fourth Circuit reviews the district court’s sentencing determinations with deference, considering only whether the court abused its broad discretion. A district court should begin all sentencing proceedings by correctly calculating the applicable Guidelines range. An increase in sentencing attaches if the defendant knew or should have known that a victim of the offense was a vulnerable victim. This requires two inquiries: a determination whether the victim was unusually vulnerable, and whether the defendant knew or should have known of such unusual vulnerability. The Court of Appeals determined that Ms. Taylor clearly met the standard for vulnerability set forth by the guidelines, requiring the victim to be unusually vulnerable due to age, physical or mental condition or particularly susceptible to the criminal conduct. The fact that Ms. Taylor was not working made it less likely that a crime would not be discovered, one of the key reasons why a sentencing enhancement is necessary for defendants who prey on vulnerable victims. Etoty did not seriously dispute her knowledge that Ms. Taylor was disabled following the 2005 sentencing. Her argument relied on the fact that she did not know the precise nature of Ms. Taylor’s disability, and thus her vulnerability, therefore the enhancement should not apply. The Court of Appeals determined that Etoty’s conceded knowledge that Ms. Taylor was disabled and receiving disability payments was ample proof of knowledge that her victim was vulnerable. Prior to 1995, the guidelines required an additional inquiry into whether the victim was targeted by the defendant because of the victim’s unusual vulnerability, however this requirement is no longer the law.
The Court of Appeals thus found no error in the sentencing and upheld the district court’s determination that the “vulnerable victim” enhancement should apply. Judge Davis concurred in the judgment, noting that the majority correctly identified the standard of review and appropriately concluded that the district court did not commit clear error in its findings.
Decided: May 15, 2012
DeLeon appeals his conviction for the murder and assault of Jordan Peterson, asserting that the District Court erred in regards to certain evidentiary issues and in making a factual finding at sentencing that DeLeon claims should have been reserved for the jury. The Appellate Court disagreed with DeLeon’s arguments and affirmed the judgment of the District Court.
At the time of Peterson’s death, DeLeon lived with his wife and her two children, one of which was Peterson. DeLeon was home alone with both children the day that Peterson died. Peterson complained of stomach pain and a headache, but DeLeon instructed Peterson to take a shower and sought no treatment for Peterson. Peterson collapsed in the shower and was unable to be revived by DeLeon or the medical personnel on the scene. Peterson’s cause of death was determined to be hemorrhaging due to lacerations to his liver caused by blunt force trauma inflicted 6 to 12 hours before Peterson’s collapse. The autopsy also revealed other bruising on Peterson’s body due to blunt force trauma.
The government’s theory was that DeLeon inflicted the fatal blows as corporeal punishment, and its evidence included various testimony that DeLeon made use of various corporeal punishment methods. This testimony came from a local woman who had previously found Peterson and his sister on the streets (“Uechi”), a social worker who provided treatment to the family (“Thomas”), and Peterson’s sister (“AD”).
On appeal, DeLeon claims that the District Court erred, first, by admitting Thomas’ hearsay testimony. He contends that admitting the out of court statements Peterson made to Thomas during an initial meeting violated his rights under the Confrontation Clause. The statements described methods DeLeon utilized as punishment, including DeLeon standing and kneeling on Peterson’s back, spanking Peterson with his hand and belt, and making Peterson hold a hammer while leaning down for several minutes. The Court of Appeals reviewed the decision de novo, and concluded that the primary purpose of reasonable participants in a meeting, such as the one between Peterson and Thomas, would not be the preservation of evidence for future criminal prosecution, and thus, the statements at issue were nontestimonial and their admission was not in violation of DeLeon’s Sixth Amendment rights.
DeLeon next contends that the District Court violated the rules of evidence by admitting the hearsay statements of Uechi, Thomas, and AD. The Appellate Court reviewed these decisions for abuse of discretion, and affirmed the lower court’s ruling on each piece of contested hearsay.
The first contested statement was a statement by Peterson to Thomas accusing DeLeon of causing a bruise to his forehead. The Appellate Court affirmed the District Court’s admission of the statement under the Federal Rules of Evidence (“FRE”) 803(4), the exception for statements made for purposes of medical diagnosis or treatment, as well as under FRE 807, the residual hearsay exception.
The second contested statement was a statement by Peterson to Uechi, who previously found him and his sister on the street. Uechi testified that Peterson told her not to buy him food or shoes because DeLeon would “do bad things” if he found out. DeLeon argued that this statement was essentially a statement that DeLeon had done bad things to Peterson in the past and was thus inadmissible, but the Appellate Court affirmed the District Court’s ruling that the statement was not hearsay as it contained no assertion of fact being offered for the truth therein, and also that it would be admissible regardless, under the state of mind exception under FRE 803(3).
The next set of contested statements was made by AD, Peterson’s nine-year-old half sister, during two videotaped interviews with investigators. AD’s statements described DeLeon’s use of corporeal punishment and that she saw DeLeon punch or strike Peterson in the stomach; however, AD later recanted her statements regarding DeLeon punching Peterson in the stomach. The Appellate Court affirmed the District Court’s ruling to admit AD’s statement under the residual exception of FRE 807, finding each of the requirements of Rule 807 met. Thus, the Appellate court found no abuse of discretion in the admission of AD’s videotaped statements.
In addition to his claims that the District Court erred in admitting the above mentioned statements, DeLeon further contends that the lower court erred by refusing to allow DeLeon’s expert witness to clarify the standard he used to determine Peterson’s cause of death. DeLeon argued that the District Court’s ruling – not allowing the expert to elaborate on the meaning of “reasonable degree of medical certainty,” and striking the testimony that medical examiners apply a preponderance of the evidence standard – undercut his defense that Peterson’s death could have been accidental. The Appellate Court affirmed the lower court’s ruling emphasizing that in this situation there was little need for an expert witness to explain a commonly applied standard, and thus, there was no abuse of discretion in limiting the expert’s testimony.
DeLeon also claims that the District Court erred in admitting proof of his prior acts of corporeal punishment, alleging that this constituted impermissible character evidence. The Appellate Court affirmed the District Court’s ruling denying DeLeon’s motion to exclude this evidence, finding that the government introduced this evidence because it tended to prove the identity and motive of the perpetrator and tended to show that Peterson’s death was not an accident – both permissible uses under FRE 404(b). Thus, because the government introduced this evidence of DeLeon’s prior use of physical punishment for a permissible use under FRE 404(b), and not for the impermissible use of demonstrating bad character, the Court of Appeals found no abuse of discretion.
DeLeon’s final contention on appeal is that the District Court violated his Sixth Amendment rights by imposing his sentence based on a question of fact that was not submitted to the jury. Specifically, the lower court concluded that Peterson was under the age of eighteen and thus imposed the mandatory thirty-year minimum sentence for the murder charge and the mandatory ten-year minimum sentence for the assault charge. DeLeon argued that Peterson’s age was an element of the crime that must go to the jury to be proven beyond a reasonable doubt, rather than a sentencing factor that can be decided by the court by a preponderance of the evidence. The Appellate Court acknowledged that Congress draws the line between what is an element of a crime and what a sentencing factor is, and turned to the relevant statute, Section 3559(f), in its analysis. Finding that Congress’ intent was is not explicit in Section 3559(f), the Court then considered five factors to ascertain Congress’ intent: (1) language and structure, (2) tradition, (3) risk of unfairness, (4) severity of the sentence, and (5) legislative history. The Appellate Court concluded that based on these factors, under Section 3559(f), age is a sentencing factor rather than an element of the crime, and as such, the lower court could properly determine Peterson’s age by a preponderance of the evidence. Thus, the Appellate Court affirmed DeLeon’s sentence.
In summary, the Appellate Court held that there was no error by the District Court in admitting the hearsay testimony of Thomas, Uechi, or AD; no abuse of discretion in limiting DeLeon’s defense expert witness’ testimony; no abuse of discretion in admitting evidence of DeLeon’s prior acts of using corporeal punishment; and no abuse of discretion in treating Peterson’s age as a sentencing factor to be determined by the court.
– Kassandra Moore
Decided May 14, 2012
In this case the Fourth Circuit affirmed the district court’s denial of the Defendants’ 12(b)(6) motion, holding that the plaintiff’s adequately alleged that the defendant real estate brokerages conspired to restrain trade in violation of § 1 of the Sherman Antitrust Act.
This litigation arose when a putative class of purchasers of real estate brokerage services in South Carolina brought suit against a number of real estate brokerage firms who had employees on the respective boards of two multiple listing services (MLS). Based in Columbia and Hilton Head Island, the MLS were incorporated joint ventures that maintained databases of properties listed for sale in the MLS service area and which its members have access to post and locate property listings. The complaints alleged that the Defendants used the MLS as a means of unfairly excluding competition from the non-MLS brokerages in the real estate market. More specifically, the boards of the MLS allegedly passed rules that were designed to illegally stabilize prices and raise entry barriers for competing brokers.
The U.S. District Court of South Carolina denied the Defendants’ motions to dismiss and “certified its order for interlocutory review under 28 U.S.C. § 1292(b).” The Fourth Circuit granted the Defendants’ interlocutory appeal and reviewed the trial court’s decision de novo. The Defendants’ principal arguments were that the pleadings had not alleged the existence of separate economic actors capable of conspiring as proscribed by § 1 of the Sherman Act; and that the Plaintiffs failed to satisfy the heightened pleading standards necessary to state a plausible claim for relief under the recent Supreme Court’s decisions in Bell Atlantic Corp. v. Twombley, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009).
The court noted that—even though the Defendants were sued for their actions on behalf of a single corporate entity—“agreements made within a firm can constitute concerted action covered by § 1 when the parties to the agreement act on interests separate from those of the firm itself….” Because the MLS consisted of individual brokerages that pursued distinct interests and were in competition with one another for real estate sales, the court held that the Plaintiffs’ complaint had adequately alleged a plurality of economic actors capable of illegal collusion. In reaching this conclusion, the court became one of the first courts of appeals to apply the Supreme Court’s widely publicized decision in American Needle, Inc. v. National Football League, 130 S. Ct. 2201 (2010).
In addition, the court held that the complaint alleged sufficient factual content to make out a plausible claim for relief as required to defeat the Defendants’ motions to dismiss under Twombley and Iqbal. The first element of the claim, that a conspiracy existed amongst the MLS members, was sufficiently plead because the MLS rules themselves constituted factual assertions of concerted conduct. The second element of the antitrust statute, that the Defendants’ concerted action “imposed an unreasonable restraint of trade,” was supported by specific allegations that the MLS rules created six anticompetitive effects in the areas served by the MLS. According to the court, the complaints contained nonconclusory facts indicating that the board rules were able to exclude “lower-priced” and certain “innovate” brokerages firms through,inter alia, restrictive MLS membership rules such as a physical location requirement, thus denying consumers the benefit of a more competitive real estate marketplace.
-John C. Bruton, III
TCR Sports Broadcasting Holding, LLP, d/b/a Mid-Atlantic Sports Network v. Federal Communications Commission, No. 11-1151
Decided: May 14, 2012
Mid-Atlantic Sports Network (“Network”) appealed an order of the Federal Communications Commission (“FCC”), which found that Time Warner Cable Inc. (“Time Warner”) provided legitimate and non-discriminatory reasons for declining to carry the Network’s programming on an analog tier in its North Carolina cable system. The Fourth Circuit Court of Appeals denied Mid-Atlantic Sports Network’s petition for review and affirmed the FCC’s Order in favor of Time Warner.
The Network is an unaffiliated regional sports network (“RSN”) that owns the rights to produce and exhibit nearly all of the games of the Baltimore Orioles and Washington Nationals Major League Baseball franchises. The Network seeks program carriage on networks of multichannel video program distributors, like Time Warner, throughout its television territory, which includes North Carolina. Time Warner owns multiple cable systems in several states and is the largest provider of pay television service in North Carolina. In March 2005, the Network initiated negotiations with Time Warner for program carriage in North Carolina on an analog tier. Negotiations between the parties broke down in May 2007 when Time Warner refused to accept the Network’s request for program carriage on a statewide analog tier, and instead proposed carriage of the Network’s programming on a digital sports tier or analog tier in Time Warner’s cable systems in eastern North Carolina.
This litigation arose out of an administrative process that began in June 2007 when the Network filed an arbitration demand with the American Arbitration Association. The Network claimed that Time Warner had violated the 1992 Cable Act by refusing the carry the Network’s carriage on Time Warner’s statewide analog tier, which Time Warner offered to its affiliated RSNs. Ultimately, the FCC concluded that the Network had “failed to demonstrate that Time Warner has impermissibly discriminated” pursuant to requirements under federal statute and implementing rules. The Network appealed to the Fourth Circuit Court of Appeals, and the Court reviewed the reasonableness of the FCC’s decision pursuant to the Administrative Procedure Act. The Act requires the Fourth Circuit to affirm the FCC’s decision unless it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(a).
First, the Fourth Circuit dismissed the Network’s claim that the FCC “erroneously credited Time Warner’s post hoc justifications” for its refusal to carry the Networks programming, finding that the “FCC reasonably credited” sworn statements by Time Warner’s executives, even if the statements post-dated the initiation of the litigation. The Court further found similar decisions in other circuits to be persuasive in its decision “to decline to read significance solely into the timing of a defendant’s explanation or the absence of contemporaneous evidence.” The Court also found that evidence of an email exchange between Time Warner employees corroborated the sworn statements and served as contemporaneous documentary evidence supporting the FCC’s decision. Based on the aforementioned analysis, the Court additionally addressed the Network’s assertion that the “FCC made factual findings not supported by substantial evidence” and concluded that the record contained substantial evidence supporting the FCC’s findings.
Next, the Fourth Circuit considered the Network’s “argument that it made an indisputable prima facie showing of program carriage discrimination by showing that Time Warner treated [the Network] less favorably that its affiliated RSNs.” The Court found that the Network “failed to show that, even assuming that it made a prima facie discrimination case, Time Warner did not effectively rebut that case with evidence supporting legitimate, non-discriminator business reasons for its denial of statewide analog tier carriage, or that the analytical framework applied by the FCC to its decision in this regard was erroneous.”
The Fourth Circuit concluded by addressing the Network’s argument that the “FCC’s Order will harm competition and consumers.” The Court found that the FCC followed its practice of evaluating carriage claims on a case-by-case basis and individually evaluated the Network’s claim. Again, the Court concluded that “the evidence supports the FCC’s determination that Time Warner’s decision” was driven by legitimate business factors, and concluded that the Network “failed to show how such legitimate business decisions harm competition or consumers.
Ultimately, the Fourth Circuit held that “the FCC acted neither arbitrarily nor capriciously nor otherwise unlawfully” and upheld the FCC’s order in favor of Time Warner.
– Allison Hite
Decided: May 11, 2012
The Fourth Circuit Court of Appeals dismissed the appeal in this case for lack of appellate jurisdiction upon rehearing en banc. In the previous panel decision, the Fourth Circuit held that the court had jurisdiction and the district court had erred in permitting the claims to proceed. See the South Carolina Law Review Online summary of the previous panel decision here.
The events at issue in this case are part of the infamous Abu Ghraib prison scandal during the 2003 invasion of Iraq. A number of Iraqis filed suit against CACI International, Inc. (“CACI”) for the involvement of CACI contractors in the alleged torture of prisoners. CACI moved to dismiss the case on the following four grounds: (1) the dispute presented a nonjusticiable political question; (2) the inevitable application of the law of occupied Iraq rendered CACI, as part of the occupying power, immune from suit under Coleman v. Tennessee, 97 U.S. 509 (1878) and Dow v. Johnson, 100 U.S. 158 (1879); (3) the plaintiffs’ claims were preempted by the “combatant activities” exception to the Federal Tort Claims Act (“FTCA”); and (4) the company was entitled to absolute official immunity in accordance with Mangold v. Analytic Services, Inc., 77 F.3d 1442 (4th Cir.1996), because its employees had performed delegated governmental functions.
The majority opinion was written by Judge King, and joined by Chief Judge Traxler, and Judges Motz, Gregory, Duncan, Agee, Davis, Keenan, Wynn, Diaz, and Floyd joined. The majority’s opinion focused on the appellate jurisdiction of interlocutory orders, considering whether this case fit in the small class of decisions that finally determines claims too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is decided. Recounting the relevant precedent about the narrow class of cases where appeal from interlocutory orders are appropriate and referring to the limited jurisdiction of appellate courts, the majority concluded that the court lacked jurisdiction and dismissed the appeals.
Judges Duncan and Wynn each wrote separately to concur with the majority.
Judge Wilkinson dissented and wrote a strongly-worded dissent criticizing the majority for framing the case as an “innocuous jurisdictional disposition.” This dissent asserted the following three points: (1) tort actions are unsuitable in the context of an international theatre of war; (2) contract law is compatible with the separation of powers and the responsibilities allocated the executive branch under Article II of the Constitution; (3) the majority’s application of the collateral order doctrine inflicts damage on American interests overseas. Judge Niemeyer and Judge Shedd joined this opinion.
Judge Niemeyer dissented and wrote critically of the majority for not deciding whether CACI was entitled to certain immunities, and also applying the precedent regarding interlocutory order appeals more broadly to contend that there was appellate jurisdiction in this case. Citing separation of powers doctrine, this dissent also concludes that this Court lacks subject matter jurisdiction. “To entertain the plaintiffs’ claims would impose, for the first time, state tort duties onto an active war zone, raising a broad array of interferences by the judiciary into the military functions textually committed by our Constitution to Congress, the President and the Executive Branch.” Judges Wilkinson and Shedd joined this opinion.