ZOROASTRIAN CTR. OF WASH., D.C. v. RUSTAM GUIV FOUND. OF N.Y., NO. 14-1841
Decided: May 4, 2016
The Fourth Circuit affirmed in part, vacated in part, and remanded the case for further proceedings.
The parties entered into a ninety-nine year lease in an effort to construct a Zoroastrian worship center. The defendant ended lease, and the plaintiff sought a declaratory judgment to reinstate the lease. The defendant removed the case to federal court, and the district court granted summary judgment in favor of the defendant. The defendant was also awarded attorneys’ fees. The plaintiffs appealed, raising lacking of federal subject matter jurisdiction and X as claims of error.
The Fourth Circuit agreed with the district court, holding the defendant provided sufficient evidence to prove complete diversity between the parties to establish federal subject matter jurisdiction. The Fourth Circuit also affirmed the district court’s finding that the undisputed material facts show the plaintiff breached the lease.
However, the Fourth Circuit determined that the district court erred when it granted the defendant’s attorney’s fees. While the district court correctly determined that the defendant was the prevailing party according to Virginia’s law on fee-shifting provisions, the court failed to limit the attorneys’ fee to the defendant’s successful claims.
Accordingly, the Fourth Circuit affirmed the district court’s judgment on the merits, but vacated the district court’s attorneys’ fee award and remanded for further proceedings.
MORVA v. ZOOK, NO. 15-1
Decided: May 5, 2016
The Fourth Circuit affirmed the district court’s judgment.
In 2006, William Charles Morva was in jail in Virginia on several charges. He was in jail for a year before escaping prison and committing the crimes that are the subject of his habeas petition. Morva requested medical attention and was taken to a hospital. After a trip to the bathroom, Morva attacked the deputy that was escorting him and knocked him unconscious. Morva took the deputy’s firearm and proceeded to shoot a hospital security officer in the face before escaping the hospital. Another corporal followed Morva into the nearby woods but was shot in the head by Morva during the pursuit. Both the security officer and corporal died as a result of their injuries. Morva was found in the woods a day later with the deputy’s gun nearby and Morva’s DNA on the trigger. Morva was charged with capital murder and sentenced to death by a jury. After proceeding unsuccessfully through state court, Morva filed a federal habeas petition that was denied by the district court. This appeal followed.
Morva presents five claims for review in his petition. First, he contends that the Virginia circuit court’s denial of his motion to appoint a prison-risk-assessment expert violated his Eighth and Fourteenth Amendment rights. Next, Morva raises three related ineffective-assistance-of-counsel claims regarding counsel’s investigation into his childhood, family background, and mental-illness history; counsel’s presentation of mitigating evidence; and counsel’s assistance to the state-funded mental-health experts. Finally, Morva appeals the denial of relief regarding his counsel’s decision during the guilt phase of trial to stipulate to Morva’s status as a “prisoner in a state or local correctional facility,” who was “imprisoned, but not yet had gone to trial,” and who was “in lawful custody” at the time of the charged offenses. As to the first claim, the Court found that the Supreme Court of Virginia did not unreasonably reject Morva’s claim because his claim was improperly framed as an unconstitutional prohibition on his right to present mitigating evidence. The Court reviewed the related ineffective-assistance-of-counsel claims together finding that the Supreme Court of Virginia’s decision on deficient performance does not warrant federal habeas relief. The Court also affirmed the Supreme Court of Virginia’s decision as to prejudice. The Supreme Court of Virginia found that “Morva has not demonstrated what impact, if any,” the new family-background evidence “had on his actions,” and concluded that the information “does not mitigate Morva’s actions.” The Court went further to say that the additional evidence would not have changed the minds of the mental health experts used in the case. Finally, the Court denied Morva’s final claim due to the Commonwealth’s ability to prove all of these allegations through evidence even if they were not stipulated.
Accordingly, the Fourth Circuit affirmed the judgment of the district court.
Michael W. Rabb
U.S. v. SAUNDERS, NO. 15-4498
Decided: July 5, 2016
The Fourth Circuit reversed the district court’s dismissal of the indictments and remanded the district court’s ruling for further proceedings.
On January 15, 2015, Appellees, Gaston Saunders, Bryan Daniels, Michael Potter, and Stephen Daniels, captains of commercial fishing vessels, were indicted on multiple Lacey Act violations. Appellees were indicted because they harvested tons of bass from federal waters (EEZ) in violation of federal law. The Government appeals the district court’s dismissal of the indictment against Saunders and Daniels in part and against Potter and Daniels in full.
The Bass Act prohibits people from harvesting bass from the EEZ. “The Lacey Act makes it a crime to take wildlife in violation of some other federal law.” An exemption under the Lacey Act is present if it was “‘activity regulated by a fishery management plan in effect under’ the Magnuson-Stevens Act.” The district court determined the “Commission’s plan authorized the Secretary of Commerce to regulate striped bass in federal waters, the EEZ.” The district court concluded the Commission’s plan regulated the captains’ behavior and the Lacey Act exemption applied because of regulation-50 C.F.R. § 697.7(b) which prohibited fishing for or harvesting Atlantic striped bass in the EEZ. The Fourth Circuit disagreed stating “[t]he text of the Commission’s plan does not purport to grant any power to regulate federal waters to the Secretary of Commerce.” The Commission’s plan left the regulation of federal waters to the power of the Secretary of Commerce through the Bass Act not the Commission’s plan. Furthermore, the Court stated the Secretary of Commerce’s power to regulate federal waters “comes directly from the Bass Act,” through federal sources because the Secretary of Commerce is a member of the President’s cabinet. The Court concluded the Commission regulates the States’ waters not federal waters.
The captains contend the statutory framework prohibiting their conduct is void for vagueness. The Court disagreed stating, “[a] statute is unconstitutionally vague if it ‘(1) “fails to provide people of ordinary intelligence a reasonable opportunity to understand what conduct it prohibits” or (2) “authorizes or even encourages arbitrary and discriminatory enforcement.”’” The Court stated the indictments were straightforward: the captains harvested Atlantic striped bass from federal waters, the Bass Act prohibited fishing for bass in federal waters and the Lacey Act prohibited taking wildlife in violation of a federal regulation. Therefore, when the captains harvested bass from federal waters, they violated the Bass Act, which in turn violated the Lacey Act. The captains contended they had to consult numerous statutes in order to know their conduct was illegal. The Court dismissed this assertion stating “[o]ur sister circuits have squarely held that regulatory complexity does not render a statute (or set of statutes) unconstitutionally vague.” The Court also noted the prohibition of fishing for bass in federal waters had been on the books for over 25 years. Finally, the Court concluded the framework was not void for vagueness because the Lacey Act contained a scienter requirement demanding the Government to prove the captains’ knowledge. A “‘scienter requirement alone tends to defeat’ vagueness challenges to criminal statutes.” Therefore, the Court concluded the Lacey Act exemption did not apply and the regulatory regime was not void for vagueness.
Accordingly, the Court reversed the district court’s dismissal of the indictments and remanded the district court’s ruling for further proceedings.
Alicia E. Morris
U.S. v. LOPEZ-COLLAZO, NO. 15-4312
Decided: June 1, 2016
The Fourth Circuit reversed and remanded the district court’s decision.
Sometime before 2005, Agustin Lopez-Collazo, a native Spanish speaker who understood little, if any, English, illegally entered the United States from Mexico. In January 2005, Lopez-Collazo plead guilty to theft under Maryland law, and in May 2007 he was arrested again under Maryland law, and this this time plead guilty to second degree assault. Following his assault conviction in 2007, the Office of Immigration and Customs Enforcement (“ICE”) initiated expedited removal proceedings against him, during which immigration officers from the Department of Homeland Security (“DHS”) determined that his second degree assault conviction constituted an “aggravated felony.” Pursuant to the expedited removal proceedings, a Notice of Intent to Issue a Final Administrative Remove Order (“NOI”), which was in English, was properly served to Lopez-Collazo on October 5, 2007. On the backside of the NOI, Lopez-Collazo had signed following language admitting the allegations against him and waiving his right to contest the charges or seek judicial review. He was removed to Mexico in November 2007, however he returned shortly thereafter when he unlawfully crossed into Arizona in July 2008. When Lopez-Collazo was discovered in 2014, he was indicted with a federal crime for being illegally reentering in the United States after deportation.
At trial, Lopez-Collazo moved to dismiss the indictment, challenging the validity of the removal order because neither the charges nor the waiver language was written or translated to him in Spanish. Despite the government’s argument that Lopez-Collazo had explicitly waived his right to contest the charges or seek judicial review, the district court ruled that the waiver was invalid, because the lack of a translation prevented Lopez-Collazo from comprehending the NOI and the waiver language, and thus he was unable to make an informed decision. The district court further agreed with Lopez-Collazo’s argument that entry of the removal argument was fundamentally unfair because: his convictions for theft and assault did not constitute aggravated felonies, and as such he should have been offered “voluntary departure” from the United States, which fails as a basis for an illegal reentry conviction; and he was deprived of a meaningful opportunity to challenge his removal order or see voluntary departure due to the government’s failure to provide a Spanish translation of the NOI and the waiver. Ultimately, the district court found that, under current law, Lopez-Collazo’s Maryland assault conviction was not considered an aggravated felony and he should have been eligible for voluntary departure. Accordingly, the district court held that Lopez-Collazo had suffered prejudice, and the court granted Lopez-Collazo’s motion to dismiss the indictment. The government appealed, seeking reinstatement of the indictment.
In its analysis, the Fourth Circuit focused on the requirement of fundamental fairness in the entry of a removal order found in § 1326(d), which requires a defendant show that “(1) his due process rights were violated by defects in his underlying deportation proceeding, and (2) he suffered from prejudice as a result of the defects.” With respect to the first prong, due process, at a minimum, requires that an alien subject to expedited removal be given “the opportunity to be heard at a meaningful time and in a meaningful manner.” As the Fourth Circuit points out, a meaningful opportunity cannot exist if the alien is unable to understand the proceedings without the aid of a translator. It follows, the government’s failure to provide Lopze-Collazo with a Spanish translation of the NOI infringed on his due process rights.
Turning to analysis of the second prong, whether or not Lopez-Collazo suffered prejudice as a result of the defect in his removal proceedings, the Fourth Circuit explained that the defendant must show that had such defects not occurred, a reasonable probability existed that he would not have been removed. The Fourth Circuit stated that the district court’s prejudice analysis fails because it applied the current law in determining whether Lopez-Collazo’s assault conviction constituted an aggravated felony, and not the modified categorical approach established by longstanding Fourth Circuit precedent in 2007. Doing so, according to the Fourth Circuit, disconnects the alleged prejudice from the defect in the removal proceedings.
Applying the appropriate modified categorical approach, the Fourth Circuit determined that due to the facts found in the formal charging document, which included Lopez-Collazo’s attempt to run down officers with his automobile and his striking and kicking of officers as they attempted to subdue him, his conviction for assault constituted a violent crime, and thus an aggravated felony precluding an option for voluntary departure. Lopez-Collazo’s ability to demonstrate prejudice hinges on his ability to demonstrate reasonable probability that he would not have been removed, which in turn depends on his eligibility for voluntary departure. As a result, he cannot show that prejudice occurred, and his argument for fundamental unfairness collapses.
Judge Gregory dissents, expressing his view that a misapplication of the law, as it is presently understood, can constitute a violation of due process that causes prejudice. He expressed how Lopez-Collazo’s unfortunate fate of being sentenced during a time of a tough-on-crime mentality, the constitutionality of which has been question and is now known to be improper.
Accordingly, the Fourth Circuit reversed the district court’s dismissal of the indictment and remanded the case with instructions that the indictment be reinstated, with Judge Gregory dissenting.
U.S. v. GRAHAM, NO. 12-4659
Decided: May 31, 2016
The Fourth Circuit affirmed the district court’s decision.
In 2015, a panel of the Fourth Circuit affirmed convictions of defendants Aaron Graham and Eric Jordan related to their part in a series of armed robberies. During the defendants’ trial, the government used historical cell-site location information (“CSLI”) obtained from the defendants’ cell phone provider to place the defendants in close proximity of the armed robberies whilst they occurred. Historical CSLI provides location information by indicating which cell tower, typically the tower closest to the cell phone, transmitted a signal when a cell phone is used to make and receive calls or texts. The panel majority instructed that going forward, a warrant backed by probably cause is necessary to obtain such data from cell phone providers. The government moved for rehearing en banc, which was granted. The panel opinion was vacated, and the Fourth Circuit now considers whether the government violates the Fourth Amendment where it obtains historical CSLI from a service provider without first obtaining a warrant supported by probable cause.
The defendants asserted that the provision of the Stored Communications Act (“SCA”), 18 U.S.C. § 2703(d), which allows the government to access non-content information upon the showing of “reasonable grounds to believe . . . the records . . . are relevant and material to an ongoing criminal investigation,” allows the government to unconstitutionally obtain private records, the Fourth Circuit indicated that this argument does not take into consideration the nature of the government’s activity in the present circumstances, which involves the obtaining of records from a third party provider rather than direct government tracking.
Instead, the issue at hand, according to the Fourth Circuit, is to be resolved by the third-party doctrine set forth by the Supreme Court in United States v. Miller and Smith v. Maryland, which states that no individual is privileged with a “legitimate expectation of privacy” in information voluntarily conveyed to a third party. Under this doctrine, the Fourth Circuit held that the defendants lacked a rational expectation of privacy in the historical CSLI obtained from their cell providers. As pointed out in the opinion, this position is supported by the holdings of three sister courts—the Sixth Circuit in United States v. Carpenter, the Eleventh Circuit in United States v. Davis, and the Fifth Circuit in In re Application of U.S. for Historical Cell Site Data—as well as the conclusions of the majority of federal district court judges.
The defendants provided multiple arguments as to why the third-party doctrine does not apply to the present case, all of which the Fourth Circuit rejects. First, the defendants assert “that cell phone users do not convey CSLI to phone providers, voluntarily or otherwise.” However, the Court instead found that a user does convey to their provider the location of the cell tower to which their phone connects any time the user utilizes the provider’s network, because the provider can only receive such information when a cell phone exchanges signals with a particular cell tower, typically the nearest available tower.
The defendants further argue that “a cell phone user does not actively choose to share his location information,” and consequently the third-party doctrine does not apply to historical CSLI. The Fourth Circuit sees this as an attempt to redefine the third-party doctrine, as no such rule is found in either Miller or Smith.
Finally, the defendants’ final argument relies on the idea that the use of cell phones is so ever-present in current society that individuals are forced to either risk producing CSLI or withdraw from modern society. However, the Fourth Circuit explains that dissenting justices in Miller and Smith tried and failed to push very similar concerns. Further, the defendants support this argument with cases that focus on the protection of the content of communication, but as the Fourth Circuit indicates, CSLI is classified as non-content information, and as such, the cases relied on by the defendants are not applicable to the present issue.
Judge Wilkinson concurs with the majority, but writes a separate opinion “to emphasize [his] concern that requiring probable cause and a warrant in circumstances such as these needlessly supplants the considered efforts of Congress with an ill-considered standard of [the Fourth Circuit’s] own.” According to Judge Wilkinson, the defendants’ attempt to inject their own interpretation of the Fourth Amendment into the SCA through the use of a warrant and probable cause requirement seeks to overturn Supreme Court precedent and abandon Congress’ efforts to balance privacy and law enforcement interests.
Judge Wynn, joined by Judges Floyd and Thacker, dissent in part and concur in the judgment. According to several cases from the Supreme Court, Judge Wynn writes, “voluntary conveyance” is defined by the defendant both knowing of particular information and acting in some way to communicate that information. Under this definition, the cell phone users do not “voluntarily convey” because they lack sufficient knowledge and awareness of their CSLI and CSLI is automatically generated by the provider’s network, rather than by a particular action of the user, and thus the third-party doctrine alone fails to answer whether the government violated the Fourth Amendment. Instead, Judge Wynn concludes that it is the substantial amount of information gathered in this case that clearly evidences that the government has engaged in a search and has violated the Fourth Amendment by engaging in such without a warrant.
Accordingly, the Fourth Circuit affirmed the judgment of the district court in all aspects, with Judge Wilkinson concurring, and Judge Wynn, joined by Judges Floyd and Thacker, dissenting in part and concurring in the judgment.
U.S. v. MCFADDEN, NO. 13-4349
Decided: May 19, 2016
The Fourth Circuit affirmed in part, vacated in part, and remanded the case to the district court for further proceedings.
In July 2011, law enforcement in Virginia began investigating the distribution of synthetic stimulants commonly known as “bath salts.” The investigation eventually led them to Lois McDaniel who agreed to assist law enforcement in gathering evidence against her supplier, Stephen McFadden. After multiple recorded telephone conversations and interception of packages, McFadden was arrested in February 2012. McFadden was convicted of several counts of conspiring to distribute controlled substance analogues and distributing controlled substance analogues. McFadden appealed to the Fourth Circuit and then to the Supreme Court, which vacated the original opinion of the Fourth Circuit on this case on the grounds that the jury instructions given at trial improperly omitted elements relating to McFadden’s state of mind. The Supreme Court then remanded this case back to the Fourth Circuit to consider whether the error in jury instruction was harmless.
The Fourth Circuit examined the instructions and found that the erroneous jury instructions constituted harmless error with respect to McFadden’s convictions under Counts One, Five, Six, Seven, Eight, and Nine of the superseding indictment. The Fourth Circuit found that the error was not harmless as to Counts Two, Three and Four however. The Fourth Circuit determined that an erroneously omitted jury instruction may be deemed harmless error if the omitted element is supported by overwhelming evidence admitted at trial. First, the Fourth Circuit held that the evidence was sufficient to permit, but not so overwhelmingly to compel, the jury to find that McFadden knew that federal law regulated the bath salts as controlled substances. Therefore, the government did not meet this showing. Accordingly, the government did not meet its burden of establishing harmless error with respect to Counts Two, Three and Four. The Fourth Circuit then found that the government did meet its burden of establishing harmless error as to Counts Five through Nine due to the recorded conversations. The Fourth Circuit thus vacated and remanded Counts Two, Three and Four for further proceedings in the district court. The Fourth Circuit also remanded the convictions on Count One, and Counts Five through Nine, to the district court for resentencing.
Accordingly, the judgment of the district court is affirmed in part, vacated in part, and the case is remanded for further proceedings.
Michael W. Rabb
U.S. v. SERAFINI, NO. 15-4383
Decided: June 10, 2016
The Fourth Circuit determined that the district court had the authority to issue a restitution order under 14 U.S.C. § 88(c), and therefore affirmed the judgment of the district court.
On May 11, 2014, officers discovered defendant, Brian Serafini, intoxicated in an unauthorized boat that had drifted into a restricted marine area at the Newport News Shipbuilding Company. As officers questioned Serafini, Serafini explained that he and an unidentified man on the boat with him began fighting and eventually Serafini trough the man overboard. Upon hearing those facts, the Coast Guard and other local agencies immediately set out to find the person Serafini allegedly tossed into the water. During the search, Serafini was arrested for public intoxication. While in custody, he disclosed that he may have imagined the man on the boat with him. The search was eventually called off after the Coast Guard could not find any evidence indicating that someone had been thrown off Serafini’s boat. The total cost of the rescue efforts was $117,913, which the district court ordered Serafini to pay in restitution. The district court reasoned that the award was statutorily authorized. Serafini appealed the ruling with respect to the order of restitution.
Despite Serafini’s argument that Section 88(c) permits the Coast Guard to only seek civil redress against those who communicate false distress messages, the Fourth Circuit opined that Section 88(c)(3) was designed to hold individuals “liable” in either criminal or civil proceedings for “all costs the Coast Guard incurs as a result of the individual’s actions.” The Court reasoned that if Congress wanted to limit subsection 88(c)(3) to civil proceedings, it presumably would have done so explicitly, as it did in subsection 88(c)(2)—which uses the language, “subject to civil penalty.” Furthermore, the Court noted that a critical feature of the statute itself is that it is a criminal provision. Thus, unlike the civil carve out specified in subsection (c)(2), Congress had no need to state in what is generally a criminal statute that subsection (c)(3) authorizes criminal liability. Therefore, the Court affirmed the judgement of the district court.
Aleia M. Hornsby
U.S. v. MURILLO, NO. 15-4235
Decided: June 14, 2016
The Fourth Circuit determined the defendant’s prosecution in the United States did not contravene the Fifth Amendment’s Due Process Clause, therefore the Court affirmed the defendant’s convictions.
Defendant Edgar Javier Bello Murillo (“Bello”), a citizen of Colombia, was involved in the murder of Special Agent James Terry Watson of the Drug Enforcement Administration (“DEA”). Agent Watson was an internationally protected person (an “IPP”) stationed in Colombia and was thereby protected by the Convention on the Prevention and Punishment of Crimes Against Internationally Protected Persons, Including Diplomatic Agents (the “IPP Convention” or the “Convention”). Bello was arrested in Colombia for his involvement in the murder, and on July 18, 2013, a grand jury in Alexandria, Virginia, returned an indictment against Bello and the others involved. On August 22, 2013, the United States requested Bello’s extradition from Colombia for prosecution in the Eastern District of Virginia. Pursuant to Colombia’s obligations under the IPP Convention, the extradition request was referred to Colombia’s Supreme Court of Justice, which granted the extradition for prosecution on Counts 1, 3, and 4. After his first appearance in the Eastern District of Virginia on July 2, 2014, Bello sought dismissal of the three charges, invoking the “notice requirement” of the Fifth Amendment’s Due Process Clause. The district court denied this dismissal motion, and in doing so ruled that Bello’s due process rights were not violated by prosecuting him in the United States for murder and kidnapping because exercising extraterritorial jurisdiction of these offenses is proper under the Fourth Circuit’s test set forth in United States v. Brehm. Under Brehm, the court concluded that Bello’s prosecution was neither arbitrary nor unfair, because Bello’s offenses affected a “significant American interest,” and he had “ample reason to anticipate being prosecuted for his conduct ‘somewhere.’” United States v. Brehm, 691 F.3d 547, 622–23. On April 16, 2015, Bello was sentenced to 440 months in prison, which he timely appealed.
On appeal, Bello’s sole claim was that his prosecution in the United States contravened the Fifth Amendment’s Due Process Clause, arguing specifically that his prosecution in the this country was fundamentally unfair because he did not know that Agent Watson was an American IPP and thus could not have foreseen prosecuted in the United States, rather than in Colombia. However, the Court did not agree. Citing to their opinion in Brehm, the Court explained that fair warning does not require that defendants understand that they could be subject to criminal prosecution in the Unites States so long as they could reasonably understand that their conduct was criminal and would subject them to prosecution somewhere. Because kidnapping and murder are “self-evidently criminal,” it was not fundamentally unfair to prosecute Bello in the United States. Absent fundamental unfairness, Bello’s Fifth Amendment due process claims fails under Brehm.
Therefore, the Fourth Circuit affirmed the judgment of the district court.
Aleia M. Hornsby
U.S. v. FAULLS, NO. 14-4595
Decided: May 5, 2016
The Fourth Circuit affirmed the district court’s judgment.
Thomas Faulls separated from his wife in June 2012. Following this separation, there were several violent episodes between them. The final of these episodes resulted in the convictions that lead to this appeal. In August 2012, Faulls tied up his wife, put her in his truck next to his shotgun, and took her to a hotel in West Virginia. He sought to have sex with her and she acquiesced out of fear. That same evening, his wife fled and managed to contact the police. Faulls was later arrested. After a trial, a jury convicted Faulls of kidnapping, interstate domestic violence, and possessing a firearm in furtherance of a crime of violence. The jury also determined that Faulls committed aggravated sexual abuse that served as the predicate crime of violence for the interstate domestic violence charge and also enhanced Faull’s sentencing range. This appeal followed.
On appeal, Faulls contends that his counsel was ineffective in opening the door to testimony by a government expert, and in failing to object to the district court’s decision to keep the jury late one evening. He also contends that the district court erred in admitting prior acts evidence and in requiring him to register as a sex-offender. The Court declined to reach Faulls’s ineffective assistance of counsel claim because there was no conclusive evidence on the face of the record indicating the attorney’s ineffectiveness. The Court also found that the prior act evidence was relevant, demonstrated control and domination and its probative value was not substantially outweighed by the danger of unfair prejudice. Therefore, the Court affirmed the district court’s decision to admit prior acts evidence. Finally, the Court determined that aggravated sexual abuse involves a sexual act or sexual contact with another. Faulls was convicted of a criminal offense that has an element involving a sexual act or sexual contact with another – a sex offense. Therefore, the Court held that the district court did not err in requiring Faulls to register as a sex offender.
Accordingly, the Fourth Circuit affirmed the judgment of the district court.
Michael W. Rabb
U.S. v. WARNER, NO. 15-4316
Decided: April 27, 2016
The Fourth Circuit vacated the defendant’s sentence and remanded the case.
Xavier Warner, the defendant, stole a .40 caliber pistol after breaking into 19 motor vehicles in a parking deck. The defendant was arrested and subsequently pled guilty pursuant to a plea agreement to one count of aiding and abetting the theft of a firearm. As part of the plea agreement, the government agreed to advise the district court at sentencing that the 4-level enhancement under U.S.S.G. § 2K2.1(b)(6)(B), which would increase the defendant’s offense level for use in connection with another felony, did not apply. The government agreed to this term because it did not view breaking and entering a motor vehicle as a felony offense for this defendant considering his criminal history.
Despite the agreement and contrary to previous filing, at sentencing the government stated that breaking and entering a motor vehicle did constitute a felony, regardless of the defendant’s criminal history, based on a recent decision that tended to support the application of the enhancement. However, the government still asked the court to honor the plea agreement. The court chose to apply the enhancement and sentenced the defendant to 48 months’ imprisonment. The defendant appealed.
The Fourth Circuit concluded that although the government acted in good faith, it breached the plea agreement by stating that the enhancement did apply. Based on the holding in United States v. Jordan, 509 F.3d 191, 195 (4th Cir. 2007), the court noted that traditional contract law may used as a guide, plea agreements are subject to greater scrutiny than a commercial contract. As such, the court determined that the substance of the agreement was clear: “The government agreed to advise the court of its position that U.S.S.G. § 2K2.1(b)(6)(B) does not apply in this case.” (emphasis omitted). Such finding was supported by e-mail exchanges leading up to the agreement, as well as the government’s initial filing with the court after executing the agreement. The court noted that the government’s statement that the enhancement applies, but should not be imposes is substantially different than a statement that the enhancement does not apply. Relying on United States v.Scruggs, 356 F.3d 539, 543-44 (4th Cir. 2004), the court further determined that the breach was material because the e-mail negotiations demonstrate that the government’s willingness to state the enhancement did not apply was critical to the defendant’s decision to take the deal.
Accordingly, the court vacated the sentence and remanded the case for resentencing before a different district judge.
THANA v. BD. OF LICENSE COMMRS. FOR CHARLES CNTY., MD., NO. 15-1660
Decided: June 28, 2016
The Fourth Circuit reversed the district court’s Rooker-Feldman ruling and remanded for further proceedings.
In 2009, Plaintiffs, owner of Thai Palace, a restaurant and lounge, sought an alcoholic beverage license from the Board of License Commissioners of Charles County, Maryland (the Board). Thai Palace previously had an alcoholic beverage license but it was revoked in 2007 for hosting “entertainment that featured nudity.” Thai Palace and the Board entered into a consent order stating Thai Palace could “‘be operated as a family restaurant’” for certain hours of the day and have no entertainment other than “‘dinner music from either a radio and/or t.v. . . . without prior written approval of the Board.’” In November 2009, Thai Palace requested to be allowed to provide live entertainment and for the Board to rescind the earlier consent order. The Board refused to rescind the earlier consent order but modified it, allowing Thai Palace to extend its hours and to provide “‘instrumental and acoustical music; Karaoke; [and] DJ music and dancing.’” The 2012 consent order stated Thai Palace “‘shall not allow an outside promoter to maintain control of any entertainment and shall not offer any “teenager only” events or “go-go” entertainment.’” Thai Palace did not follow the terms of the consent order and contracted with “‘go-go’ bands to perform at Thai Palace.” The Board, after receiving information about the concerts, required Thai Palace to show cause as to why the 2012 consent order should not be revoked. The Board revoked the 2009 consent order, the 2012 consent order and the alcoholic beverage license after it held an evidentiary hearing. Thai Palace filed a petition for review of the Board’s revocations and the circuit court affirmed the revocation of the 2012 consent order. Thai Palace appealed and the court of special appeals affirmed. The Maryland Court of Appeals denied Thai Palace’s writ of certiorari. Thai Palace commenced this federal action under 42 U.S.C. § 1983. Thai Palace alleged the Board had violated its First Amendment rights by not allowing it to host “‘go-go’ entertainment” and sought $500,000 in compensatory damages. The district court granted the Board’s motion to dismiss for lack of subject matter jurisdiction per the Rooker-Feldman doctrine.
On appeal, Thai Palace asserts the Rooker-Feldman doctrine does not apply to its § 1983 claim but rather the principles of claim preclusion apply. The Board contends the Rooker-Feldman doctrine does apply because the federal court could not resolve Thai Palace’s claim without a “‘corresponding determination that the State court’s judgment, and the Board’s decision affirmed by that State court’s judgment, were decided in error.’” The Court relied on Exxon v. Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005), which stated “‘[t]he Rooker-Feldman doctrine . . . is confined to cases of the kind from which the doctrine acquired its name: cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.’” The Court stated preclusion principles apply to “concurrent, independent suits that results when the two suits address the same subject matter, claims, and legal principles,” whereas the Rooker-Feldman doctrine applies when a party is “appealing a state court judgment to the Supreme Court.” The Rooker-Feldman doctrine does not apply when a party “‘presents an independent claim.’”
The Court determined the Rooker-Feldman doctrine did not apply because the action was a concurrent, independent action; therefore, the district court had jurisdiction on the claim. The Court supported its conclusion for five reasons: (1) “the doctrine does not apply here because the district court here was not called upon to exercise appellate jurisdiction over a final judgment from ‘the highest court of a State in which a decision could be had’”; (2) “Thai Palace’s action was, and is, challenging the action of a state administrative agency, rather than alleging injury caused by a state court judgment”; (3) “because Thai Palace challenges state administrative actions, the Rooker-Feldman doctrine does not apply as a categorical matter”; (4) “the differences between the two proceedings demonstrate that this federal action must be seen as an independent, concurrent action that does not undermine the Supreme Court’s jurisdiction over any state court judgment”; and (5) “while pursuing this independent, concurrent action, Thai Palace in fact never sought to bypass the Supreme Court’s appellate jurisdiction under 28 U.S.C. § 1257(a) over any relevant state court judgment.” Therefore, the Court held Thai Palace had asserted an independent, concurrent action and the Rooker-Feldman doctrine did not apply.
Accordingly, the Court reversed the district court’s Rooker-Feldman ruling and remanded for further proceedings.
Alicia E. Morris
RALEIGH WAKE CITIZENS ASS’N v. WAKE CNTY. BD. OF ELECTION, NOs. 16-1270 & 16-1271
Decided: July 1, 2016
The Fourth Circuit reversed the district court’s ruling and remanded in part and affirmed in part.
In 2013, the General Assembly passed Session Law 2013-110 making numerous changes to the School Board’s method of selection, changing the make-up from nine single-member districts to seven single-member districts. This caused the maximum population deviation to be over 7% whereas it was 1% before the change. It also created two super districts with the maximum population deviation being just shy of 10%. In August 2013, Plaintiffs challenged the constitutionality of Session Law 2013-110 stating that under the redistricting laws some districts have been over-populated and others have been under-populated thus making some votes count more than others. The Plaintiffs also claimed that one district was the product of racial gerrymandering. The district court dismissed Plaintiffs’ suit for failure to state a claim in March 2014. In April 2015, the General Assembly enacted Session Law 2015-4 making the Wake County Board of County Commissioners electoral system the same as the School Board’s. On appeal of the district court’s order dismissing its claim, the Fourth Circuit concluded it survived the motion to dismiss for failure to state a claim. The district consolidated the two lawsuits on remand. In December 2015, the district court held a bench trial and ruled for the Defendant and discredited all of Plaintiffs’ witnesses. Plaintiffs appealed.
On appeal, the Plaintiffs assert the district court applied the wrong legal standard for adjudicating their one person, one vote claim. The Fourth Circuit concluded Plaintiffs’ must show by the preponderance of the evidence that improper considerations predominate in explaining the deviations in a one person, one vote case with population deviations below 10%. The Fourth Circuit concluded the district court erred in discounting all of Plaintiffs’ witnesses and erred in what the Plaintiffs’ needed to show. Further, the Court stated that only one resolution of Plaintiffs’ claims was permitted: “Plaintiffs have proven that it is more probable than not that the population deviations at issue here reflect the predominance of a illegitimate reapportionment factor . . . to create a ‘significant . . . partisan advantage.’” The Court further stated that “rather than seeking proportional representation of the two main political parties, the evidence shows that the challenged plans under-populated Republican-leaning districts and over-populated Democratic-leaning districts in order to gerrymander Republican victories.” This deviation was shown to be pretextual. The reasons asserted for the redistricting were “to increase alignment between citizen’s voting districts and their assigned schools,” “reduc[e] campaign costs,” and “increase[e] voter turnout. The Court stated these reasons had nothing to do with re-drawing the districts.
The Plaintiffs also asserted a racial gerrymandering claim regarding District 4 of the Board of County Commissioners contending “race predominated in determining the boundaries, shape, and composition of that district without narrow tailoring to serve a compelling state interest.” The Court concluded the district court did not err in its decision on this claim. The district court considered the relevant comments on race being a consideration in the redistricting process. The Court concluded the district court’s conclusion that the Plaintiffs fell short of proving that traditional districting criteria were subordinated to race in the drawing of District 4 was plausible.
Accordingly, the Court reversed the district court’s ruling and remanded in part and affirmed in part.
Judge Motz dissented stating the district court did not err in rejecting Plaintiffs’ equal protection challenge to the redistricting plans. Judge Motz stated Plaintiffs failed to meet their burden that it was more probable than not that a deviation of less than 10% reflected the predominance of illegitimate reapportionment factors and illegitimate partisanship because they failed to “offer any evidence truly probative of legislative intent.”
Alicia E. Morris
NICHOLAS v. GRAHAM, NO. 15-6616
Decided: April 27, 2016
The Fourth Circuit reversed the judgment of the district court.
Richard Nicholas, the defendant, was convicted of killing his daughter in 1997. At trial, Nicholas stated that he was in the car with his daughter when she was shot from a passing car, and he immediately called for help. The prosecution contradicted this timeline with expert witness testimony on lividity. The expert determined that Nicholas’s daughter had died and remained on her side for two hours before he called for help based on how the blood had settled in her body. This was the strongest evidence against Nicholas.
In 2005, Nicholas filed a state petition for post-conviction relief, which was denied. Shortly thereafter, he filed a petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2254 in district court. As part of this proceeding, his counsel obtained police notes detailing two interviews with witnesses. Both witnesses stated they heard a loud noise, like a gunshot, on the night of the girl’s death. Nicholas subsequently filed a motion to re-open the state post-conviction proceeding based on this new evidence, and the federal proceeding was stayed until he exhausted state remedies.
At State court, Nicholas argued that the government’s failure to disclose the witness statements violated his rights under Brady v. Maryland, 373 U.S. 83 (1963). The state court denied the motion to reopen the case because the statements were not beneficial to Nicholas. He was denied leave to appeal, and reinitiated federal court proceedings. The district court granted relief on the Brady claim, finding the witness statements could have helped to corroborate Nicholas’s version of events.
The Fourth Circuit reversed the judgment of the district court because the district court failed to give proper deference to the determination of the state court as required by the Antiterrorism and Effective Death Penalty Act of 1996. A federal court may only grant habeas relief if the state court reached a decision that was “contrary to, or involved an unreasonable application of, clearly established Federal law,” or based on “an unreasonable determination of the facts in light of the evidence presented in the State court proceeding.” 28 U.S.C. § 2254(d) (2012). Without deciding whether the statements were favorable, the Fourth Circuit found that the state court was not unreasonable in determining that the statements were not material to the case, as required by Brady because those witness statements were inconclusive, and the jury could have still found the expert witness testimony more credible than the lay witness accounts.
NLRB v. NAT’L NURSES ORG. COMM., NO. 15-1203
Decided: May 6, 2016
The Fourth Circuit granted an application for enforcement of an order of the National Labor Relations Board.
This case involved a labor dispute between Bluefield Regional Medical Center and Greenbrier Valley Medical Center. The hospitals and the National Nurses Organizing Committee entered into consent election agreements to elect union representatives for the hospitals. The National Nurses Organizing Committee held the elections and the Union was successful. The hospitals objected to the election results and refused to bargain with the Union on behalf of the registered nurses. The National Labor Relations Board concluded that the regional director had validly exercised authority over the representation proceedings and ordered the hospitals to bargain with the Union. The Board now brings an application for enforcement pursuant to 29 U.S.C. § 160(e).
The hospitals raised several arguments in opposition to the application for enforcement. First, the hospitals argued that the regional director lacked authority to act during the period when the Board did not have a quorum thereby rendering his decisions on the elections invalid. The hospitals also contend that the regional director’s appointment is also void for the same reason. The hospitals also argue that the acting general counsel had also lost authority to act at the time of his appointment. Finally, the hospitals lastly argue that the regional director erred in requiring them to present evidence in support of their election objections because another contract precluded this requirement.
First, the Fourth Circuit gave deference to the Board’s interpretation and concluded that the regional director’s authority to act was not abrogated. The Fourth Circuit also determined that the Board, not the general counsel, retained final authority over the appointment of a regional director thus the hospital’s argument fails. The Fourth Circuit found that the hospital’s third argument was a factual dispute and thus was required to rely on the Board’s decision unless unsupported by substantial evidence, therefore the hospital’s third argument failed. Finally, the Fourth Circuit found the hospitals’ sole challenge to the merits of the Board’s final decision to be baseless due to the broad authority Congress has granted the Board.
Accordingly, the Fourth Circuit granted the application for enforcement of an order of the National Labor Relations Board.
Michael W. Rabb
NAAMJP v. LYNCH, NO. 15-1982
Decided: June 17, 2016
The Fourth Circuit affirmed the district court in granting the motion to dismiss.
The National Association for the Advancement of Multijurisdictional Practice (NAAMJP) challenged the conditions placed on the admission to the Bar of the United States District Court for the District of Maryland in Local Rule 701. Rule 701 governs attorney admission to practice in the district court. The Rule contains requirements based on the state of licensure and the location of the attorney’s office. The Rule allows for admission of attorneys licensed in the State of Maryland. Admission to non-Maryland attorneys extends only to attorneys in states whose district courts observe reciprocity with the District Court. Regardless of reciprocity, however, the District will not admit a non-Maryland attorney if that attorney maintains a law office in Maryland. NAAMJP described Rule 701 as being discriminatory, monopolistic, balkanizing, and unconstitutional. NAAMJP sued the Attorney General and each of the judges on the District Court, challenging the validity of Rule 701. The Defendants moved to dismiss, and NAAMJP moved for summary judgment. The district court granted the motion to dismiss and denied NAAMJP’s motion for summary judgment. NAAMJP appealed.
In order to survive a motion to dismiss, a complaint must state facts that, when accepted as true state a claim of relief that is plausible on its face. NAAMJP challenges the validity of Rule 701 under the First Amendment, the Equal Protection Clause, the Rules Enabling Act, and the Supremacy Clause. In regards to the First Amendment, Rule 701 is simply a regulation of a profession. The Rule does not compel attorneys to speak or regulate speech based on its content. Rule 701 qualifies as a generally applicable licensing provision and therefore does not violate the First Amendment. In regard to the Equal Protection Clause, Rule 701 does not infringe a fundamental right or disadvantage a suspect class. Applying rational basis review, Rule 701 passes constitutional muster. The rationales of promoting bar memberships for attorneys located in Maryland are plausible, and NAAMJP does not bear its burden in negating the legitimate government purpose. NAAMJP did not cite in cases to support their Equal Protection argument. In regards to the Rules Enabling Act, Rule 701 prescribes a rule for the District Court for the conduct of its business on which attorneys may practice before it. The Rule does not violate any Acts of Congress or any federal rules of practice and procedure adopted by the Supreme Court, thus Rule 701 does not violate the Rules Enabling Act. In regards to the Supremacy Clause, the court stated it was not applicable because Rule 701 is a federal rule prescribed pursuant to a federal statute. Rule 701 does not violate the First Amendment, the Equal Protection Clause, the Rules Enabling Act, or the Supremacy Clause so the court affirmed the decision of the district court in granting the motion to dismiss.
MONROE v. COLVIN, NO. 15-1098
Decided: June 16, 2016
The Fourth Circuit reversed and remanded the administrative law judge’s decision.
In 2007, George Monroe filed for disability insurance benefits (DIB) and supplemental security income (SSI) for problems related to uveitis that started in December 2006. Monroe’s applications were denied initially and following reconsideration in 2008, Monroe requested a hearing before an administrative law judge (ALJ). Following the hearing, the ALJ denied the application as well. In 2011, the Appeals Council examined Monroe’s request for review, vacated the ALJ’s decision, and remanded to another ALJ for a new decision that would determine specific issues. The Appeals Council also noted that Monroe had filed for DIB and SSI claims in 2010 and the second ALJ’s decision would put all the files together to address all of Monroe’s claims. The second ALJ’s hearing determined that Monroe was not disabled from 2006 through the date of the decision in 2012. Monroe filed a complaint in district court where a magistrate judge recommended that the district court deny Monroe’s motion to grant benefits. The district court followed the magistrate judge’s recommendation of denial and Monroe appealed.
Monroe’s argued on appeal that the ALJ committed legal errors when analyzing the record. The Plaintiff’s first argument was the second ALJ erred in not giving great weight to the first ALJ’s findings regarding the Plaintiff’s severe impairments in the now-vacated 2010 decision. The court disagreed with the Plaintiff’s first argument based on the court’s interpretation of Lively v. Secretary of Health and Human Servs., 820 F.2d 1391, 1392 (4th Cir. 1987) stating that SSA must give such findings as evidence and only need to give it the appropriate weight in light of all relevant facts and circumstances when adjudicating a follow up disability claim involving a unajudicated period. Based on this interpretation, nothing indicates that findings in prior non-final decisions are entitled to any weight; therefore the second ALJ did not err in reviewing Monroe’s application de novo. The court agreed with the Plaintiff’s argument that the ALJ erred by not using a function-by-function analysis to determine his RFC. By expressing Monroe’s RFC first and then concluding the limitations caused by Monroe’s impairments were consistent with that RFC, the ALJ made the error of overlooking limitations and restrictions that narrowed the ranges of work that Monroe may be able to do. For example, while the ALJ determined that Monroe had sleep apnea and narcolepsy, the ALJ never made any specific findings about whether Monroe’s impairments would cause him to experience loss of consciousness that would require breaks from work. Instead, the ALJ simply concluded that Monroe was capable of light work and that Monroe’s claimed symptoms were not credible to the extent they are inconsistent with the RFC the ALJ identified. The court stated that on remand the ALJ would need to consider Monroe’s narcolepsy and sleep apnea and all Monroe’s other impairments to determine on a function-by-function basis how they affect his ability to work. The court also told the ALJ on remand to give a more specific explanation of the ALJ’s reasons for the differing weights he assigned to various medical opinions. The court reversed the district court’s judgment and remanded with instructions to vacate denial of Monroe’s application for benefits and remand for further administrative proceedings.
LAWSON v. UNION CNTY. CLERK OF COURT, NO. 14-2360
Decided: July 7, 2016
The Fourth Circuit vacated and remanded the district court’s ruling.
Appellee Gault terminated the Appellant Lawson from her position as a deputy clerk in the Clerk of Court’s Office in Union County, South Carolina. Lawson argued that her termination was in violation of her rights guaranteed under the First Amendment. The district court granted summary judgment in favor of Gault, holding that Lawson’s position was a confidential or policymaking position and she was subject to termination for campaigning against her boss. At issue in this appeal is whether the district court correctly established as a matter of law that Lawson held a position for which political loyalty was required.
In reviewing the circuit court’s decision in favor of summary judgment, the Fourth Circuit applied the same legal standards as the district court while viewing all the facts and reasonable inferences therefrom in the light most favorable to the nonmoving party. In it’s determination, the Fourth Circuit focused on two lines of cases that deal with the limitations on a public employee’s First Amendment rights. The first doctrine, known as the “Elrod-Branti” exception, holds that policymaking employees may be terminated for their political beliefs if their party affiliation is an “appropriate requirement for the effective performance of the public office involved.” The second doctrine provides that public employees are not protected by the First Amendment when, “their speech interests are outweighed by the government’s interest in providing efficient and effective services to the public.”
The district court held that Gault was within his right to fire Lawson under the previously mentioned “Elrod-Branti” exception, because Lawson held a confidential, policymaking position that required political loyalty. The Fourth Circuit disagreed with that holding because in the eyes of the court, Gault had not satisfied the criteria of the “Elrod-Branti” exception calling for a demonstration that Lawson’s position required political loyalty. Additionally, the Fourth Circuit determined that Gault had not demonstrated an entitlement to qualified immunity or Eleventh Amendment immunity. Since Gault did not establish that Lawson was a policymaking employee for whom political association was an appropriate job requirement, the “Elrod-Branti” exception does not apply and thus Gault is not entitled to qualified immunity.
Because the Fourth Circuit determined that, in light of the facts, Gault has not established as a matter of law that Lawson held a position for which political loyalty was required, summary judgment was not appropriate and thus the Fourth Circuit vacated the circuit court’s ruling in favor of summary judgment for the Appellee.
Accordingly, the Court vacated and remanded the district court’s ruling.
MCFEELEY v. JACKSON ST. ENTM’T., LLC, NO. 15-1583
Decided: June 8, 2016
The Fourth Circuit determined that the Plaintiffs were employees, and therefore affirmed the judgment of the district court.
Plaintiffs, exotic dancers who worked at Fuego Exotic Dance Club (“Fuego”) and Extasy Exotic Dance Club (“Extasy”), alleged on behalf of themselves and others similarly situated that defendant clubs and Uwa Offiah—the owner and manager of both clubs—misclassified them as independent contractors and accordingly failed to pay them the minimum wage required by the Fair Labor Standards Act (“FLSA”). They sued defendants for both unpaid wages and liquidated damages, and on January 3, 2014 plaintiffs filed a motion for partial summary judgement. The district court granted plaintiffs’ motion in part, finding that plaintiffs were employees, not independent contractors. Reserving various disputes over monetary recovery for the jury, the jury ultimately found in favor of the plaintiffs and awarded them damages for unpaid wages. On the matter of liquidated damages, the court awarded liquidated damages to each of the plaintiffs only for the period prior to September 2011—in September 2011 the defendants consulted an attorney regarding classifying dancers as independent contractors and therefore, after that time defendants reasonably believed the were not violating the FLSA. After denial of motion for judgment as a matter of law and/or for a new trial, defendants appealed.
On appeal, defendants sought review on five questions. The first was whether plaintiffs were employees or independent contractors under the FLSA and related state laws. Applying the same “economic realities” test as the lower court, the Fourth Circuit agreed, based on the totality of the circumstances presented, that plaintiffs were employees covered by the FLSA and analogous state laws. Defendants next questioned whether defendants acted in good faith prior to September 2011, making them not liable for to pay liquidated damages for that time—the trial court had already determined defendant were not liable for liquidated damages after September 2011. When defendant Offiah took over management of Fuego and Extasy in 2007 and 2009, respectively, he changed nothing about the way the clubs had been operating, including the classification of the dancers as independent contractors. It was not until he faced a lawsuit in 2011, that he made an effort to educate himself on the governing law. Thus, the Court held that the district court did not err in rejecting defendants’ good faith defense for the period prior to September 2011. When defendants questioned whether it was an error to bar defendants from presenting evidence of plaintiffs’ income taxes, the Court again agreed with the district courts view that that plaintiffs’ earning were irrelevant. Lastly, when defendants questioned whether the district court erred in formulating its jury instruction and verdict sheet, as well as whether the trial court erred in denying the defendants motion for judgment as a matter of law and/or a new trail, the Fourth Circuit determined that no errors had been made. Thus, the Court affirmed the judgment of the district court.
Aleia M. Hornsby
MANGUM v. HALLEMBAEK, NO. 15-6134
Decided: May 25, 2016
The Fourth Circuit affirmed in part, vacated and remanded in part the district court’s decision.
Mangum was arrested in Oklahoma on drug charges on February 9, 2006, and released on bond five days later. He was indicted by a federal grand jury in North Carolina for conspiracy to distribute cocaine base, and a federal arrest warrant was issued by not executed. On June 14, 2006, Mangum was arrested a second time in Oklahoma, this time charged with felony assault and battery with a dangerous weapon and misdemeanors of possession of a fictitious driver’s license, resisting an officer, and obstructing an officer. Mangum was transferred to federal custody and appeared in the Middle District of North Carolina, where he pled guilty on November 8, 2006, to conspiracy to distribute cocaine base. On May 16, 2007, Mangum was sentenced to 262 months’ imprisonment without specifying whether this federal sentence was to be served concurrently or consecutively to his pending Oklahoma sentence. On December 5, 2007, a state judge sentenced Mangum to four terms of imprisonment, ten, seven, one, and one, and ordered these sentences to run concurrently with each other and his federal sentence. Mangum remained in custody of Oklahoma while serving his state sentences, and he was paroled to federal detainer on January 13, 2011, when, according to the Bureau of Prisons (“BOP”), service of his federal sentence commenced. On January 3, 2013, Mangum requested the BOP analyze whether to designate, nunc pro tunc, the Oklahoma prison as the place of service for Mangum’s federal sentence pursuant to 18. U.S.C. § 3621. During this analysis, the North Carolina federal district court judge never responded to the BOP’s inquiry as to whether the court intended that the federal sentence run concurrent or consecutive to the later imposed Oklahoma sentence. Ultimately, the BOP determined that the federal sentence would be served consecutively to the later imposed state sentence. Mangum, acting pro se, filed a petition for writ of habeas corpus in the Eastern District of North Carolina, however the district court granted summary judgment on December 29, 2014, to the warden of the BOP facility where Mangum is serving his sentence. As a result, Mangum filed a timely notice of appeal on January 27, 2015.
As to Mangum’s claims relating to the calculation and execution of his sentence, the Fourth Circuit found that the district court properly denied relief and affirmed the judgment. However, the Fourth Circuit found that the BOP incorrectly applied 18 U.S.C. § 3584(a) in its refusal to grant Mangum nunc pro tunc relief. According to the BOP, where the federal sentencing judge is silent as to the court’s intention, a presumption exists that the federal sentence should be deemed to run consecutively to the later imposed state sentence. Instead, following the Supreme Court’s analysis in Setser v. United States, the Fourth Circuit agreed with Mangum’s assertion that the federal judge’s silence does not invoke a statutory presumption that the federal sentence is intended to be a consecutive sentence. Additionally, the Fourth Circuit points out that at the time Mangum was sentenced in the North Carolina federal court, the federal sentencing judge lacked the power to impose a federal sentence consecutive to a not yet imposed state sentence.
Accordingly, the Fourth Circuit affirmed in the judgment in party, vacated in part, and remanded the petition to the district court, instructing the court remand Mangum’s request for a nunc pro tunc designation to the BOP for further consideration.
UNITED STATES v. LULL, NO. 15-4216
Decided: May 25, 2016
Because the search warrant application omitted material information about the reliability of the confidential informant who was the primary source of the information used to establish probable cause, the Fourth Circuit reversed the district court’s denial of Lull’s motion to suppress, vacated his conviction and sentence, and remanded for further proceedings.
In May 2014, one of the Wake Forest Police Department’s confidential informants asserted that he was able to buy illegal drugs from Lull in Lull’s home. In following up, Investigator Welch of the Sheriff’s Office met with the informant. The informant said that he knew Lull from high school and had previously purchased cocaine, marijuana, and other illegal substances from Lull. The investigator arranged for the informant to buy cocaine from Lull during a controlled buy. The Sheriff’s Office corroborated some of the informant’s information prior to conducting the controlled buy. The informant conducted the controlled buy. Back at the Police Department, the informant surrendered four grams of cocaine and identified Zack Lull as the seller. He also returned $40 of the remaining buy money, when he should have returned $60. When questioned about the money, the informant said he though he gave the money to Lull. A strip-search revealed that the $20 was hidden in the informant’s underpants. The Sheriff’s Office immediately determined that the informant was not reliable and terminated him as a confidential informant. The officers arrested the informant on a felony charge of obtaining property under false pretenses. Investigator Welch obtained a search warrant for Lull’s house, but he failed to disclose the informant’s theft and arrest to the state court magistrate. When officers searched Lull’s home, they found cocaine, marijuana, firearms, body armor, and around $3,600 in U.S. currency. All five individuals inside the house at the time were arrested in connection with drug charges. A grant jury in the Eastern District of North Carolina indicted Lull on one count of possession with intent to distribute a quantity of cocaine and marijuana, and one count of possession of a firearm in furtherance of a drug trafficking crime.
Lull moved to suppress all evidence obtained from the search of his residence, arguing that officers obtained the search warrant in violation of Franks v. Delaware, 438 U.S. 154 (1978). This case created a two-prong test to clarify what a criminal defendant must show when challenging the veracity of statements made in an affidavit supporting a search warrant. If both prongs are met, the search warrant must be voided and the fruits of the search excluded. Under the first prong, “intentionality”, the defendant must show that a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit. Under the second prong, “materiality”, the defendant must show that with the affidavit’s false material set to the one side, the affidavit’s remaining content is insufficient to establish probable cause. Lull contended that in the affidavit submitted to obtain probable cause, Investigator Welch intentionally and/or recklessly omitted information that was material to the determination of probable cause. The district court entered an order denying Lull’s motion to suppress. On appeal, the Fourth Circuit held that Investigator Welch was at least reckless in his omission of facts regarding the informant. Furthermore, the omission was indeed material.
Because Lull showed by a preponderance of the evidence that Investigator Welch omitted information from the search warrant affidavit with at least a reckless disregard for whether these omissions made the application misleading, and because these omissions were material to a finding of probable cause, Lull established a violation of his Fourth Amendment rights under Franks v. Delaware. Therefore, the Fourth Circuit held that the district court erred in denying Lull’s suppression motion. The ruling of the district court was reversed, Lull’s conviction and sentence vacated, and the case remanded for further proceedings.
Katie E. Lowery
UNITED STATES v. FOSTER, NO. 15-4319
Decided: May 24, 2016
The Fourth Circuit affirmed the district court’s denial of Foster’s motion to suppress evidence recovered after a stop-and-frisk.
On August 11, 2014, police in Wheeling, West Virginia received a 911 call reporting a gunshot. Two officers arrived within minutes to the area in question. One of the officers saw Foster standing in an alley nearby, just looking around. Foster was the only person the officers had encountered since arriving in the area. When the officers approached Foster, he did not respond and avoided eye contact. The officers believed that Foster was under the influence of drugs. When asked if he had any weapons on him, Foster began to put his right hand in his right front pocket. The officers frisked Foster, and felt an object that felt like a firearm. Upon a search, the officers discovered three guns on Foster. Foster was indicted for being a prohibited person in possession of a firearm. Arguing that he was stopped and frisked without reasonable suspicion, Foster moved to suppress the evidence that the officers recovered. The district court denied Foster’s motion to suppress.
Foster was not seized before he reached for his pocket. Foster was not stopped until after he reached for his pocket, and reasonable suspicion existed at that time. Five relevant factors support the presence of reasonable suspicion that Foster was or had been engaged in criminal activity: (1) The 911 call that reported a gunshot; (2) Shortly after the officers were dispatched, Foster was the only person they encountered in the area in which the gunshot was reported; (3) The stop occurred late at night in a party of the city described as a “high crime” area; (4) Foster did not respond to the officers’ questions and avoided eye contact; and (5) Foster reached for his right pocket after being asked if he was carrying a weapon. In evaluating the totality of the circumstances, the officers had reasonable suspicion. Although the circumstances observed or known by the police before Foster reached for his pocket were not enough to support reasonable suspicion, Foster reaching for his pocket tied all of the factors into a coherent whole that justified an investigatory stop. The officers justifiably performed a Terry stop because they had reasonable suspicion that Foster committed a crime associated with discharging a firearm.
Accordingly, the Court affirmed the district court’s judgment.
Katie E. Lowery
NDIBU v. LYNCH, NO. 14-2250
Decided: May 19, 2016
The Fourth Circuit denied Ndibu’s petition for review of a final order of removal issued by the Board of Immigration Appeals (“BIA”) which affirmed the immigration judge’s conclusion that Ndibu filed a frivolous asylum application and was therefore ineligible for adjustment of status.
Ndibu, a native and citizen of the Democratic Republic of the Congo (“DRC”), entered the United States using a Canadian passport that did not belong to him. After evading the attention of immigration officials for nearly three years, Ndibu filed an affirmative application for asylum. Ndibu claimed that he feared persecution on account of his political opinion were he to return to the Congo. The Department of Homeland Security (“DHS”) placed Ndibu in removal proceedings. The immigration judge concluded that Ndibu failed to demonstrate that he filed his asylum claim within one year of entering the United States and failed to establish a clear probability of persecution. The judge denied his claim for withholding of removal. Ndibu appealed, and the BIA affirmed the denial of asylum and remanded the matter for a more complete decision as to the withholding claim. During the proceedings on remand, Ndibu applied for an adjustment of status on the basis of his marriage to a United States citizen. Ndibu admitted that his previous asylum claim was false, but argued that despite having made a mistake in agreeing to submit a false asylum claim, he had otherwise lived as a law-abiding member of the community and that he was worthy of a fraud waiver to enable him to adjust his status and remain in the United States with his family. The immigration judge issued an order denying Ndibu’s applications for a waiver of inadmissibility and an adjustment of status. The BIA dismissed Ndibu’s subsequent appeal.
An alien who has knowingly made a frivolous application for asylum is permanently ineligible for immigration benefits. 8 U.S.C. § 1158(d)(6). Notice is a prerequisite to a finding of frivolousness; before an application for asylum is declared frivolous, the alien seeking asylum must be given the statutorily-required notice. While Ndibu acknowledged that the asylum application form set forth a warning about the consequences of filing a frivolous asylum application, he argued that this printed notice was inadequate and the law requires the immigration judge to provide an oral warning as well. The Fourth Circuit held that the warning on the asylum form clearly satisfied the basic requirements of advising asylum applicants that they will be permanently ineligible for any benefits under the INA if they knowingly file a frivolous application. There is no requirement that the immigration judge advise an alien—orally or in writing—of the consequences of knowingly filing a frivolous application.
Accordingly, the Court denied Ndibu’s petition for review.
Katie E. Lowery
KERR v. MARSHALL UNIV. BD. OF GOVERNORS, NO. 15-1473
Decided: May 24, 2016
The Fourth Circuit affirmed the district court’s order granting Appellees’ motion to dismiss Kerr’s civil action pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).
After practicing law for more than fifteen years, Kerr enrolled in Marshall University’s Master of Arts in Teaching (“MAT”) program to obtain a West Virginia teaching license. A student-teaching practicum is a required component of the MAT program. In the fall of 2013, Kerr was a student in this practicum course. A few weeks before the end of the semester, however, Kerr left her student-teaching post in protest over differences with her supervising teacher. Kerr was unable to resolve these differences with the Marshall administration and did not return to her student-teaching post. She was not awarded credit for the course, and she received neither her MAT nor her teaching license as a result. On March 14, 2014, after unsuccessfully pursuing reconsideration through Marshall’s internal grade-appeals process, Kerr filed a complaint in the Southern District of West Virginia. Appellees moved to dismiss Kerr’s action. The district court referred the motion to a magistrate judge for the submission of proposed findings and recommendations. The magistrate judge recommended that the district court grant Appellees’ motion to dismiss in its entirety. The district court granted Appellees’ motion to dismiss.
Kerr claimed on appeal that the district court erred by submitting her claim to a magistrate judge for proposed findings and recommendations, that the Marshall University Board of Governors (“MUBG”) was not entitled to sovereign immunity, and that her complaint plausibly alleged each of her seven claims. 28 U.S.C. § 636(b) permits a district court to assign any pretrial matter to a magistrate judge. In arriving at its decision, the district court properly conducted an exhaustive review of the magistrate judge’s findings. Therefore, the district court properly referred Appellees’ motion to dismiss to a magistrate judge, and the referral and review process did not prejudice Kerr in any way. Kerr alleged that her equal protection rights were violated on the basis of her sexual orientation. However, in her complaint, Kerr made no mention of Title IX as a basis for liability or relief, or as an exception to sovereign immunity. The district court also properly found that Kerr did not plausibly allege each of her seven claims in her complaint.
Accordingly, the Court affirmed the district court’s order by concluding that the district court properly determined both that sovereign immunity bars Kerr’s claim against the MUBG, and that the allegations in Kerr’s pro se complaint against the other Appellees failed to state a claim upon which relief can be granted.
Katie E. Lowery
CONRAD v. CSX TRANSP., INC., NO. 15-1035
Decided: May 25, 2016
The Fourth Circuit affirmed the district court decision granting of summary judgment in favor of CSX, in which the district court concluded that Conrad had failed to show that any CSX employee involved in the disciplinary process had also known about his union activities.
Appellee CSX Transportation, Inc. charged one of its employees, Appellant William M. Conrad, with “serious” violations of the company’s safety policy. Alleging he was disciplined in retaliation for his activities as local chairman of the transportation union, Conrad sued in federal district court under the Federal Railroad Safety Act (“FRSA”), 49 U.S.C. § 20109. The district court granted summary judgment in favor of CSX, concluding that Conrad had failed to show that any CSX employee involved in the disciplinary process had also known about his union activities. Conrad appealed the district court’s decision. On appeal, Conrad argued that knowledge of an employee’s protected activities may be imputed to the decision-makers if any supervisory employee at the company knew of the subordinate employee’s protected activity when the decision-maker took the unfavorable personnel action, regardless of whether the person with knowledge played a role in the disciplinary process. The Fourth Circuit disagreed with this argument.
Congress enacted the FRSA to promote safety in every area of railroad operations and reduce railroad-related accidents and incidents. To that end, the FRSA prohibits railroads from discriminating against employees who engage in certain safety-related activities. An an action brought under the FRSA, the plaintiff must project sufficient admissible evidence to establish that: (1) the employee engaged in a protected activity; (2) the employer knew that the employee engaged in the protected activity; (3) the employee suffered an unfavorable personnel action; and (4) the protected activity was a contributing factor in the unfavorable action. If the employee establishes a prima facie claim, then the burden shifts to the employer to demonstrate by clear and convincing evidence that the employer would have taken the same personnel action in the absence of the protected activity. The district court concluded that Conrad could not prove the second prong, that CSX knew that he had engaged in the protected activity. The Fourth Circuit concluded that the “knowledge” relevant for a retaliation claim under the FRSA must be tied to the decision-maker involved in the unfavorable personnel action. As the district court concluded, Conrad failed to show that such knowledge existed here.
Accordingly, the Court affirmed the district court’s decision that Conrad’s claims fail as a matter of law at the prima facie stage.
Katie E. Lowery
LAWRENCE v. LYNCH, NO. 15-1834
Decided: June 17, 2016
The Fourth Circuit dismissed in part and denied in part a petition.
In 1996, Garfield Lawrence was admitted to the United States as a lawful permanent resident. Lawrence, who is originally a native of Jamaica, has had multiple Virginia state court marijuana convictions. As a result of theses marijuana convictions, the Department of Homeland Security (DHS) issued a notice to appear charging Lawrence as removable for crimes involving moral turpitude, for a conviction of an aggravated felony offense relating to the illicit trafficking of a controlled substance, and for a conviction relating to a controlled substance. Lawrence admitted to the convictions but denied that he qualified as an aggravated felon. The Plaintiff also sought protection from removal under the Convention Against Torture (“CAT”). After a hearing, the immigration judge denied the CAT claim and ordered Lawrence’s removal to Jamaica. The judge ruled that Lawrence’s convictions for distribution of marijuana constituted as “drug trafficking” aggravated felonies, making Lawrence ineligible for cancellation of removal. Lawrence appealed and the Board of Immigration Appeals affirmed on December 4, 2012. The 90-day statutory period to file a motion to reopen began on that date. Lawrence was removed to Jamaica on January 31, 2013, where he said he continued to pursue his immigration case despite difficulties of moving three times, finding employment, and living in a rural area that limited his access to international communication. In September 2013, Lawrence was able to contact the Post-Deportation Human Rights Project at Boston College where a lawyer there determined that Lawrence might have a claim under the Supreme Court’s 2013 decision in Moncrieffe v. Holder, 133 S. Ct. 1678 (2013). The case was eventually referred to the Capital Area Immigrants’ Rights Coalition (CAIR), the Plaintiff’s current counsel. On May 19, 2015, Lawrence moved to reopen his removal proceedings for the purpose of seeking a cancellation of removal. Because Lawrence missed the 90-day statutory window, he requested his motion be considered as timely based on equitable tolling. The Board denied the motion because Lawrence had not shown that he had acted with due diligence during the 2 years after the Supreme Court’s decision in Moncrieffe and the Board also determined that Lawrence’s case did not present an exceptional situation to warrant sua sponte reopening. Lawrence filed a motion for review.
Lawrence argued on appeal that the Board applied the wrong standard to determine equitable tolling. A petitioner seeking equitable tolling must prove (1) the Government’s wrongful conduct prevented the petitioner form filing a timely motion; or (2) extraordinary circumstances beyond the petitioner’s control made it impossible to file within the statutory deadline. A petitioner relying on extraordinary circumstances must show he has been pursuing his rights diligently. The level of diligence by the petitioner must be reasonable. Lawrence argued that the Board applied a higher level of diligence and if the correct level of diligence were applied, Lawrence would have met reasonable diligence. The court determined that the Board made no error and that due diligence was the same as reasonable diligence. Lawrence failed to account for his burden of reasonable diligence throughout the two-year period. The Board was within their discretion to deny reopening the case because Lawrence failed to meet the required level of diligence needed for equitable tolling. The court did not address Lawrence alternative argument that the Board should have reopened the case sua sponte because it did not have jurisdiction to review how the Board exercises its sua sponte discretion.
KING v. RUBENSTEIN, NO. 15-6382
Decided: June 7, 2016
The Fourth Circuit affirmed in part, reversed, vacated, and remanded in part the district court’s decision.
Prior to his incarceration on March 23, 2012, Adrian F. King, Jr. had marbles implanted in his penis. Based on an inmate’s report that King and another inmate had been seen implanting marbles into their penises, King was told to report to medical on January 8, 2013, for examination. The examining nurse determined that the marbles were not recently implanted, that there was no sign of infection, and that there was no medical need to remove the marbles. Despite this, he was still found in violation of Policy Directive 325.00-1.26 prohibiting inmates from giving one another tattoos or piercings, and was sentenced to segregation. After being threatened with indefinite segregation until he consented to surgery to remove the marbles, King let them remove the marbles on June 19, 2013. Following the surgery, King experienced mental and emotional suffering as a result, and he also suffers from pain and other physical symptoms he had never experienced prior to the removal of the implants. King filed suit in a West Virginia circuit court under 42 U.S.C. § 1983 against various correctional officers, prison administrators, and medical personnel. The defendants removed the case to the U.S. District Court for the Southern District of West Virginia, where the defendant’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) was granted in full. King filed a timely appeal.
The Fourth Circuit first analyzed King’s appeal of the dismissal of his Fourth Amendment claim. The Court noted that while the Supreme Court held in Hudson v. Palmer that an inmate has no reasonable expectation of privacy in his prison cell, “prisons are not beyond the reach of the Constitution.” As such, the Supreme Court in Bell v. Wolfish identified four factors to determine whether a sexually invasive search is reasonable: the scope of the search, the manner in which it was performed, the justification for preforming the search, and where it is conducted. The nature of the removal of King’s penile implants and the unnecessary risk of harm, physical suffering and emotional trauma caused by the surgery weights against reasonableness. Further, the intrusion cannot be justified as to protect the health and safety of inmates, because others were not required to have similar implants removed even after they were caught and charged. Finally, the fact that the procedure was conducted in a hospital does not defeat significant amount of evidence that the search was unreasonable. Therefore, the Fourth Circuit reversed the dismissal of King’s Fourth Amendment claim, holding that his pleading was sufficient enough to plausibly entitle King to relief.
Next, the Fourth Circuit examined the dismal of King’s Eighth Amendment claim by using the two-part test from Williams v. Griffin. Under this test, in order to establish a prima facie case of a violation of the Eighth Amendment as a result of poor prison conditions, a plaintiff must show “(1) a serious deprivation of a basic human need; and (2) deliberate indifference to prison conditions on the part of prison officials.” According to the Court, King’s allegations of physical injury and mental trauma as a result of the surgery he was coerced into having sufficiently support a finding of a serious injury satisfying the first part. Additionally, the second part is satisfied by the fact that the marbles were not recently implanted, the surgery was not medically necessary, and the defendants must have been aware of the substantial risk obviously associated with an invasive surgery on such a sensitive area of the body. Consequently, the Fourth Circuit reversed the dismissal of King’s Eighth Amendment claim.
Then, the Fourth Circuit followed the two-prong analysis outlined in Morrision v. Garraghty to determine whether King successfully stated a Fourteenth Amendmend Equal Protection claim. First, the Court determined King clearly showed that he was treated different from other inmates with implants who were not subject to segregation or surgical removal, and King’s allegations that the defendant’s singled him out shows intentional discrimination and unequal treatment. Further, by allowing other inmates to keep their implants, this disparity in treatment cannot be justified as preventing a security threat.
As to King’s substantive due process claim, which he raised for the first time on appeal, the Fourth Circuit held that King’s failure to specifically label the claim with a due process heading does not mean he failed to raise such a claim. Thus, the Fourth Circuit remanded the claim for consideration of this claim.
Finally, with respect to the dismissal of King’s claim against Warden Marvin Plumley with prejudice, the Fourth Circuit held that, in spite of the district court’s conclusion that King’s allegations merely established that Plumley played a part in King’s segregation, these allegations connect Plumley’s actions and the actions of his subordinate staff, thus stating a claim against Plumley. Therefore, the Fourth Circuit reversed the dismissal as to Plumley.
However, the allegation fell short of stating claims against Commission Jim Rubenstein and Head Psychologist Cliff Goodin, and thus the dismissal against these defendants was proper, although in such a situation the dismissal should have been without prejudice. Consequently, the Fourth Circuit affirmed the dismissal as to Rubenstein and Goodin, but modified it to be without prejudice.
Accordingly, based on the above reasoning, the Fourth Circuit reversed the dismissal of King’s Fourth, Eighth, and Fourteenth Amendment Equal Protection Claims. The Court also reversed and vacated the district court’s dismissal of the claim against Marvin Plumley, and remanded the case for further review. Finally, the Fourth Circuit affirmed the dismissal of the claims against Stacy Scott, Cliff Goodin, and Jim Rubenstein, but modified the latter two to reflect it is without prejudice.
JONES v. CHANDRASUWAN, NO. 15-1110
Decided: April 28, 2016
The Fourth Circuit affirmed the decision of the district court.
The plaintiff, Stanley Jones, was under supervision for probation in Georgia for a crime he was convicted of in North Carolina when he was arrested for failing to pay the costs and fines associated with his sentence and avoiding supervision. The probation officers who sought the arrest concluded that Jones had committed those violations of his probation without contacting the Interstate Compact for Adult Offender Supervision (the Compact). In response, Jones brought suit against the probation officers for violation of his Fourth Amendment Rights under 42 U.S.C. § 1983. The probation officers removed the case to federal court, where the district court granted summary judgment in their favor. The district court found that the probation officers were entitled to qualified immunity.
In reviewing the decision of the district court, the Fourth Circuit determined it was appropriate to employ the two-step inquiry for qualified immunity. In the process of the first step of the analysis, the court clarified that the level of suspicion required to arrest a probationer is reasonable suspicion. The court concluded that Jones successfully showed a violation of a constitutional right because his probation officers did not have reasonable suspicion of either violation of his probation. Specifically, there was no reasonable suspicion he failed to comply with a payment plan because no plan was ever provided for Jones in writing to create an enforceable condition of payment before the termination of his probation. Further, if the officers hadn’t tried to contact Jones for failure to make the payments, the charges for absconding would not have come about, and the officers failed to try to make contact with Jones through the proper channels, the Compact.
However, the Fourth Circuit determined under the second step that Jones’s rights under the Fourth Amendment in this case were not clearly established, since the level of suspicion required for arrest of a probationer had never been articulated. Therefore, the court found that although the probation officers violated Jones’s Fourth Amendment rights, the probation officers were still entitled qualified immunity. Accordingly, the Fourth Circuit affirmed the decision of the district court to grant the probation officers’ motion for summary judgment.
IN RE MCFADDEN, NO. 15-206
Decided: June 20, 2016
The Fourth Circuit denied the motion.
In December 2006, a Virginia state jury convicted John McFadden of eleven offenses, including multiple counts of robbery and use of a firearm in the commission of a felony. McFadden is currently serving an 88-year prison sentence and has filed multiple petitions challenging his conviction and sentence, none of which have been successful. McFadden alleged in a proposed successive habeas application that despite multiple attempts over the years to obtain his entire case file from his trial, it was not until May 2014 he was provided a document that suggested his counsel provided ineffective assistance. The document is a proposed plea agreement, signed by the counsel by McFadden’s trial counsel but not the government, stipulating that McFadden would plead guilty to one count of robbery and one related count, and would be sentenced to no more than ten years of active incarceration. McFadden claimed his counsel failed to communicate this offer and that he would have accepted it if he had known about it. McFadden filed a motion for pre-filling authorization to the Fourth Circuit, a procedural prerequisite for the filing of successive federal habeas application.
The court can only grant McFadden’s pre-filing authorization motion if the application makes a prima facie showing that his claim relies on a new, retroactive and previously unavailable rule of constitutional law or that the factual reason for the claim could not have been previously discovered through the exercise of due diligence and the new facts if viewed with the evidence as a whole would be sufficient to establish that no reasonable factfinder would have found the applicant guilty of the offense. McFadden’s basis for granting the pre-filing authorization motion is on the newly discovered facts exception. The court reasoned that even if the newly discovered factual information could not have been discovered previously through the exercise of due diligence, McFadden’s new facts did not establish his innocence by clear and convincing evidence. The court stated that McFadden’s offered evidence of a plea offer would not have any bearing for a reasonable factfinder in regards to McFadden’s innocence or guilt as required for the factual exception to allow pre-filing authorization. Newly discovered evidence that a defendant may have lost out on a favorable plea offer does not fit either of the exceptions for pre-filling, therefore, McFadden’s pre-filing authorization was denied by the court.
IN RE CREADELL HUBBARD, No. 15-276
Decided: June 8, 2016
The Fourth Circuit granted movant’s request for authorization to file a successive § 2255 motion for Habeas relief.
On July 19, 1988, Mr. Creadell Hubbard was indicted, and later convicted for armed bank robbery; carrying a firearm during a crime of violence; possessing stolen many; and conspiracy to possess stolen money. Based on the U.S. Sentencing Guidelines (“Guideline”) in place at the time of his sentencing, the court determined that because two of Hubbard’s prior convictions—second-degree murder and Kentucky third-degree burglary—Hubbard was a career offender. Hubbard appealed is conviction, but his convictions and his sentence were affirmed. In April 1997, Hubbard filed a motion to vacate under 28 U.S.C. § 2255, but the proceeding ultimately resulted in summary judgment against Hubbard and dismissal of his subsequent appeal to the Fourth Circuit. In August 2015, Hubbard filed a pro se motion with this Court seeking an order authorizing the district court to consider a successive § 2255 motion—a motion that cannot be filed in a district court without prior approval from a circuit court of appeals.
Pursuant to § 2255(h), in deciding whether to grant the motion for pre-filing authorization, the court must determine whether it will rely on (1) newly discovered evidence, or (2) a new rule of constitutional law, made retroactive to cases on collateral review by the Supreme Court, that was previously unavailable. Hubbard argued that the Supreme Court’s decision in Johnson v. United States produced a new rule of constitutional law made retroactive that Court, and that he was entitled to seek relief under the new rule. The Court determined Hubbard’s only viable argument was that his Kentucky third-degree burglary conviction was no longer a predicate for establishing his career-offender status based on Johnson. For a movant’s motion to be granted, the moving party need only make a prima facie showing that he presents a claim that relies on a [qualifying] new rule of constitutional law, and that he makes a sufficient showing of possible merit to warrant a fuller exploration by the district court.
In Johnson, the Supreme Court struck down the residual clause of the Armed Career Criminal Act (“ACCA”) for being unconstitutionally vague in violation of the Due Process Clause of the Fifth Amendment. Although the government argued that (1) Johnson only applied only to the ACCA’s residual clause, and not the residual clause found at 18 U.S.C. §§ 16(b) & 924(c)(3)(B); and (2) that in Hubbard’s case, application of Johnson was procedural rather than substantive, and thus not retroactive, the Court was not persuaded. In addition to finding no grounds for either of the government’s arguments—ultimately holding that 16(b) as incorporated under the Guidelines might render the career-offender residual clause applicable at the time Hubbard was sentenced unconstitutional, and that the rule in Johnson was substantive and therefore retroactive—the Court granted Hubbard’s request for authorization to file a successive § 2255 motion.
Aleia M. Hornsby
HUNTER LABS. v. VIRGINIA, NO. 15-1484
Decided: July 7, 2016
The Fourth Circuit vacated and remanded the district court’s ruling.
Under Virginia law a relator may institute “for the person and for the Commonwealth” a qui tam civil action alleging violations of the Virginia Fraud Against Taxpayers Act (the “VFATA”). Relators Hunter Laboratories and Chris Riedel filed this action against multiple medical laboratory businesses alleging that the medical labs had submitted false claims to the Commonwealth of Virginia for Medicaid reimbursement. Specifically, the complaint alleged that the defendant medical laboratories violated the VFATA by presenting false claims and by making or using false records or statements to obtain payment or approval of false claims.
When the Commonwealth declined to intervene in the matter, the relators proceeded to litigate their claims and the defendants removed the action from the state court to the federal court in the Eastern District of Virginia, asserting that the VFATA claims arose under federal law. The relators did not challenge the removal to federal court or seek to remand the proceeding to state court, and the issue of subject matter jurisdiction was never litigated in the district court. The parties thereafter entered into a settlement agreement and the district court awarded the relators a share of the settlement proceeds. On appeal, the relators contend the award was insufficient.
The Fourth Circuit was unable to reach that issue, however, because the district court lacked subject matter jurisdiction over the qui tam action. A lack of subject matter jurisdiction cannot be waived or forfeited, and the first requirement for a state claim to arise under federal law is for the issue to be “necessarily raised”. This was not met because federal law does not create any cause of action that is asserted in the Complaint and the relators could have prevailed on their VFATA claims by proving that the defendants contravened the Medicaid regulations, without showing any violation of federal law.
Because the VFATA claims do not necessarily raise any federal issue, they thus do not arise under federal law. Therefore, Fourth Circuit held that the district court lacked subject matter jurisdiction over the qui tam action.
Accordingly, the Court vacated and remanded the district court’s ruling.
GUESSOUS v. FAIRVIEW PROP. INV., LLC, NO. 15-1055
Decided: July 6, 2016
The Fourth Circuit vacated the order granting summary judgment on all counts and remanded for further proceedings.
On February 28, 2014, Plaintiff, Monica Guessous (Guessous) filed an action against Fairview Property Investments, LLC (Fairview) for race discrimination, hostile work environment, and retaliation in violation of 42 U.S.C. § 1981 and for discrimination based on religion, national origin, and pregnancy, hostile work environment, and retaliation in violation of 42 U.S.C. § 2000(e). Guessous stated she was repeatedly involved in uncomfortable and often offensive discussions about national conflicts or cultural issues in Islamic countries and issues relating to Muslim terrorists simply because she was from the Middle East and an Arab-American Muslim. After returning to work from maternity leave, Washenko, Guessous’ supervisor, continued to withhold her job duties. Guessous confronted Washenko about having her duties assigned back to her and about his previous comments to her. Shortly, thereafter Guessous was terminated and asked to sign a severance agreement which Guessous refused.
On March 5, 2013, Guessous filed a discrimination charge with the EEOC and filed her civil complaint on February 28, 2014. The district court granted summary judgment in favor of Fairview on December 16, 2014. The district court stated Guessous cited her complaint and to factual allegations instead of pointing to evidence to show a dispute of material fact. The district court concluded the retaliation and discrimination claims should be dismissed because Fairview asserted a nondiscriminatory reason (lack of work) for Guessous’ termination. The district court applied the McDonnell Douglas burden-shifting framework to the discrimination and retaliation claims. The district court stated Washenko’s statements were insufficient to establish a hostile work environment and the conduct attributed to the hostile work environment occurred 300 days prior to Guessous filing her complaint with the EEOC and therefore, it was time barred.
The Fourth Circuit began by analyzing Guessous’ retaliation claims. Guessous must show “‘(i) that [she] engaged in protected activity, (ii) that [her employer] took adverse action against [her], and (iii) that a causal relationship existed between the protected activity and the adverse employment activity.’” The district court concluded that these elements were established and shifted the burden to Fairview to produce a nondiscriminatory reason for the action per McDonnell Douglas’ framework. Fairview asserted it terminated her due to insufficient work to support her position so the burden shifted back to Guessous to show this was to disguise a true retaliatory reason. Two emails from Alexander, inquiring from other companies if they would hire Guessous, was evidence that Fairview was retaliating against Guessous for her earlier conversation about reinstating her job duties. The Court also noted the absence of evidence supporting Fairview’s lack-of-work explanation. The Court reversed the summary judgment order on Guessous’ retaliation claims (Counts III and VI) because a jury could have accepted the lack-of-work explanation or concluded that her “protected activity was the final straw that motivated Guessous’ termination.”
The Court then analyzed Guessous’ claims that Fairview treated her differently based on her race (Count I) and her religion, national origin, and pregnancy (Count IV). In order to show a prima facie case in a discriminatory discharge case, Guessous must show: “‘(1) that [s]he is a member of a protected class; (2) that [s]he suffered from an adverse employment action; (3) that . . . [s]he was performing at a level that met [her] employer’s legitimate expectations; and (4) that the position was filled by a similarly qualified applicant outside the protected class.’” The Court concluded Guessous had established a prima facie case because non-Arab, non-Muslim employees absorbed her duties. To counter Fairview’s justification for her termination she asserted, at the summary judgment level, “‘(1) the decision to terminate her was finalized seventy-five minutes after she engaged in protected activity, (2) no one else was terminated for the reasons provided by Defendant, and (3) she was terminated by her aggressor.’” The district court observed that her position was not filled after her termination. The Court held that the evidence in the record met the summary judgment requirement and a reasonable jury could find the lack-of-work justification was pretext for discrimination.
Next, the Court analyzed Guessous’ hostile work environment claims (Counts II and V). Guessous must show “‘“(1) unwelcome conduct; (2) that is based on the plaintiff’s [protected characteristic]; (3) which is sufficiently severe or pervasive to alter the plaintiff’s conditions of employment and to create an abusive work environment; and (4) which is imputable to the employer.”’” The Court determined the district court erred in barring Guessous’ hostile work environment claim (Count V) due to the statute of limitations because “the work assignments were withdrawn in November 2012, and the termination occurred in March 2013, both constitute[d] facts within the statutory period which contributed to the hostile work environment. . . .” The district court concluded Washenko’s conduct was unwelcome but granted summary judgment based on the second and third elements. The Court stated the district court erred when it took an “overly cramped view of what constitutes race-based conduct; with respect to the third step, the court failed to consider the totality of circumstances, as it must when determining whether unwelcome conduct is severe or pervasive.” Guessous asserted that Washenko’s conduct was motivated by her Arab ethnicity. The Court pointed to Washenko assuming Guessous could interpret for a Persian Iranian employee and his assertion that Middle Easterners were crooks in determining that his conduct was “a hallmark of racially insensitive conduct.” Finally, the Court stated the district court erred in not looking at the totality of circumstances when analyzing the third element. Washenko’s intimidating and intrusive management of Guessous was evidence of a hostile work environment. Therefore, the court reversed the district court’s ruling as to the hostile work environment claims.
Accordingly, the Court vacated the order granting summary judgment on all counts and remanded for further proceedings.
Alicia E. Morris
GOINES v. VALLEY CMTY. SERVS. BD., NO. 15-1589
Decided: May 9, 2016
The Fourth Circuit affirmed in part, vacated in part, and remanded by the court for further proceedings.
Gordon Goines was experiencing difficulties with his cable service. Goines was informed by the cable company that his neighbor was splicing into his cable service and that he should report the theft. Goines proceeded to the police station near his house and reported the theft. Goines suffers from cerebellar ataxia, a neurological condition that causes him difficulties with his speech, balance and certain fine motor functions. The disorder does not affect Goines’ cognitive functioning, and he has no mental health issues. The officers that Goines spoke too regarding his cable service suspected he had mental health problems and asked him if he “wanted to talk to someone” to which Goines responded yes. The officers proceeded to handcuff Goines and involuntarily take him to a mental health institute where he was stripsearched and evaluated by mental health staff. Goines thereafter brought this action under 42 U.S.C. § 1983, alleging that he was unlawfully seized without probable cause in violation of the Fourth and Fourteenth Amendments. The district court dismissed his complaint in its entirety based on Fed. R. Civ. P. 12(b)(6). This appeal followed.
The Fourth Circuit affirmed the district court’s judgment as to the charges against the mental-health evaluator and her employer, but vacated the charges as to the police officers since the complaint was sufficient to survive a motion to dismiss as to those charges. First, the Fourth Circuit determined that the district court erred in treating the allegations of the incident report as true. The Fourth Circuit determined that Goines did not adopt the incident report as true simply by relying on the report for some of the facts alleged in his complaint. Because there was no reliance on the report’s truthfulness, the district court erred in treating as true the factual statements contained in the incident report. The Fourth Circuit then determined that the officers had no probable cause for an emergency mental health detention and Goines’ complaint therefore alleges a constitutional violation. The Fourth Circuit next determined that probable cause did exist for the mental health evaluation because Goines accepted the information set out in the screening report for purposes of his claim. Because probable cause did exist, the complaint failed to allege a constitutional violation against the mental-health evaluator and her employer. The Fourth Circuit therefore affirmed the district court’s dismissal of Goines’ claims against the mental-health evaluator and her employer.
Accordingly, the Fourth Circuit affirmed the judgment of the district court in part, vacated in part and remanded the issue for further proceedings.
Michael W. Rabb
G. G. v. GLOUCESTER CNTY. SCH. BD., NO. 15-2056
Filed: May 31, 2016
The Fourth Circuit denied Gloucester County School Board’s petition for rehearing. Judge Niemeyer dissented from the denial of the petition for rehearing.
Judge Niemeyer begins his dissent by pointing out that “[b]odily privacy is historically one of the most basic elements of human dignity and individual freedom.” In his opinion, the current Administration has determined, without congressional authority and in spite of Congress’ “unambiguous authorization in Title IX to provide for separate restrooms, showers, locker rooms, and dorms on the basis of sex,” that they can sidestep such provisions by altering the definition of sex “to mean how any given person identifies himself for herself at any given time,” and consequently deny the dignity and freedom of bodily privacy of affected individuals.
Additionally, Judge Niemeyer points out that the norms on this issue of virtually every civilization are challenged. However, he clarifies that such norms are not meant to “protest against persons who identify with a gender different from their biological sex.” Instead, society needs to seek to understand their situation and strive to address it in helpful, but permissible, ways. Nonetheless, doing so does not require protections of bodily privacy be cut down, nor should the separation-of-powers principles, which were created to safeguard Congress’ role of policymaking and the traditional powers of the States, be circumvented or rejected.
Accordingly, while Judge Niemeyer supports the position that the issue at hand should be granted rehearing before an en banc court, he did not request a poll on the petition for rehearing en banc, because the case is of such “momentous nature” that nothing should impede its path to the Supreme Court so that the Court may present a controlling construction of Title IX for national application. Instead, he casts only a symbolic vote to grant panel rehearing, while urging the parties to seek Supreme Court review.
ALCALA v. HERNANDEZ, No. 15-2507
Decided: June 15, 2016
The Fourth Circuit determined that although the district court found that Defendant’s removal of her children from their home in Mexico to the United States was wrongful under the Hague Convention, its decision to decline to order the children returned was proper under the law. Therefore the Court affirmed
On July 2, 2013, Defendant—Claudia Garcia Hernandez (“Mother”)—and her minor children entered the United States without authorization. She had fled Mexico without telling Plaintiff (“Father”), the father of her children. Mother and her children eventually arrived in Florence, South Carolina, where they initially moved in with family. Mother enrolled her older son in third grade, and the younger child was not old enough to attend school. She also maintained a job. In January 2014, Mother and her children moved to Darlington County, South Carolina. Because of the move, Mother had to withdraw her older son from his initial school and enroll him into his designated county school. He was able to complete the 2013-2014 at that school, where he made decent grades and was enrolled in the English for Speakers of Other Languages (“ESOL”) program. In November 2014, Mother, her boyfriend, and the children moved for a third time, but this move did not require her son to have to transfer schools. On October 27, 2014, Father filed a petition in district court seeking the return of his children to Mexico under the Hague Convention. Although Father argued that because the children were under 16 and had been wrongfully removed from their country of habitual residence—which under the Convention would require the children to be returned—Mother asserted that there were certain exception to the general rule of return. Specifically, Mother asserted, among other things, that her son was settled in the new environment. The district court agreed, declining to order the children retuned to Mexico. Father appealed, arguing that the district court erroneously concluded that the totality of the circumstances established that the son was “settled.”
While the Hague Convention does not define wat it means for a child to be “settled,” the Fourth Circuit found the Second Circuit’s analysis to be persuasive and therefore agreed that that for a child to be “settled” within the meaning of the Convention, the child must have significant connections demonstrating a secure, stable, and permanent life in his or her environment. Despite Father’s attempt to show that the son’s living arrangements—moving three times—and his son immigration status were indicators that her was not “settled,” the Court was not persuaded. The Court instead looked to the son’s good school record, family ties, and Mother’s ability to care for the son and determined that the son was “settled” within the meaning of the Convention.
Therefore the Court affirmed the decision of the district court.
Aleia M. Hornsby
COX v. QUINN, NO. 15-6943
Decided: July 6, 2016
The Fourth Circuit affirmed the district court’s ruling.
Appellee Dewayne Cox was severely beaten by a fellow inmate and alleges that appellant police officers were deliberately indifferent to a substantial risk to the appellee’s safety. Cox argued that the correctional officers’ lack of appropriate response to his repeated complaints was in direct violation of 42 U.S.C. § 1983 and the Eighth Amendment. The district court denied summary judgment to the correctional officers, finding that they were not entitled to qualified immunity on Cox’s claims. At issue in this appeal is whether the district court correctly denied qualified immunity at summary judgment, specifically if the correctional officers’ conduct violated a constitutional right and if an objectively reasonable officer could have believed that his actions were lawful “in light of clearly established law.”
The Eighth Amendment requires prison officials to “take reasonable measures to guarantee the safety of the inmates.” The district court analyzed previous case law from the Fourth Circuit Court and the Supreme Court of the United States to anticipate how it would rule. Consequently, the Fourth Circuit understood that a prison official will not be liable for failing to protect a prisoner from inmate violence unless two requirements are met: the deprivation alleged must be, objectively, sufficiently serious and the defendant prison official must have had a “sufficiently culpable state of mind.”
The court found that the injuries sustained by Cox were not in dispute and thus the first prong, requiring that the prisoner allege a serious or significant physical or emotional injury resulting from the challenged conditions, was not in question. The second prong, requiring a “sufficiently culpable state of mind”, was central to this appeal. The court determined that the state of mind required in prison-conditions cases is “‘deliberate indifference’ to inmate health or safety.” The prison official must subjectively recognize that substantial risk and also subjectively be aware that “his actions were ‘inappropriate in light of that risk.’” Most notably, the Eighth Amendment requires not just action, but reasonable action.
Further, “even if a correctional officer has violated a prisoner’s constitutional right he may be shielded from liability by qualified immunity if an objectively reasonable officer could have believed that his actions were lawful in light of clearly established law.” Here, the court determined that an objectively reasonable officer would have known the actions taken by the officers in this case were unreasonable and thus violated Cox’s constitutional rights.
Because the Fourth Circuit determined that in light of the facts an objectively reasonable corrections officer, either certified or uncertified, would have known that the actions taken by the appellants were unreasonable and were counter to clearly established law, the Fourth Circuit held that the correctional officers were not entitled to qualified immunity.
Accordingly, the Court affirmed the district court’s ruling.
BRICKEY v. HALL, NO. 14-1910
Decided: July 8, 2016
The Fourth Circuit reversed the district court’s ruling.
Police officer Randall Brickey was fired from his position with the Saltville Police Department because of comments he made as a candidate for town council that were critical of his employer and its Police Chief, Rob Hall. In response, Brickey filed suit under 42 U.S.C § 1983 for retaliatory discharge in violation of the First Amendment. The district court denied Hall qualified immunity, and this interlocutory appeal followed.
In early 2012, Brickey decided to run for Town Council and discussed his plan with Hall, the Police Chief. Hall had recently taken over the department and instituted procedures to solve the well-publicized problems of financial mismanagement, officer misconduct, and lack of professionalism. Hall indicated to Brickey that the campaign wouldn’t be a problem as long as Brickey did not disparage the department in contravention of departmental policy. Brickey agreed but later made statements to the public that the department was mismanaging the budget and misusing taxpayers’ money. Hall investigated the statements, informed Brickey they were in contravention of the department’s policies, and dismissed him from his position.
An official is entitled to qualified immunity unless the allegations underlying the claim, if true, substantiate a violation of a federal statutory or constitutional right and this violation was of a clearly established right of which a reasonable person would have known. Hall does not challenge the district court’s holding that Brickey has properly alleged a constitutional violation, but instead contends that the right Brickey asserts was not clearly established in 2012 when Brickey was terminated.
A First Amendment retaliation claim poses three questions: (1) whether the public employee was speaking as a citizen upon a matter of public concern or as an employee about a matter of personal interest; (2) whether the employee’s interest in speaking upon the matter of public concern outweighed the government’s interest in providing effective and efficient services to the public; and (3) whether the employee’s speech was a substantial factor in the employee’s termination decision. The third question is not in dispute. Instead, the parties did not provide any case to the Fourth Circuit that would have clearly warned Hall that terminating Brickey for his comments would violate his First Amendment rights. Instead, case law precedent grants broad discretion to police officials to limit speech when discipline is at stake.
Because it was debatable at the time of Brickey’s dismissal that his speech interests as a citizen outweighed Hall’s interests as a public employer, the Fourth Circuit concluded that Hall is entitled to qualified immunity.
Accordingly, the Court reversed the district court’s ruling.
ANDREWS v. AM. LIVING CTRS., LLC, NO. 15-1658
Decided: June 28, 2016
The Fourth Circuit vacated, reversed, and remanded for further proceedings.
In June 2010, Plaintiff, Stella Andrews, filed a lawsuit under the Fair Labor Standards Act (FLSA). Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) on July 29, 2010. Andrews responded by stating she would submit an Amended Complaint setting forth her allegations in more detail if the court permitted it. The magistrate judge stated that Andrews request was not proper and she had missed the 21-day deadline to amend her complaint. Andrews filed a motion for leave to amend with a proposed amended complaint on October 19, 2010, one day before the hearing on the motion to dismiss. At the hearing on the motion to dismiss, the magistrate judge stated there were three options for the parties: “(1) he could rule on the motion to dismiss, recommending that the district court dismiss the case; (2) he could rule on the motion for leave to amend; (3) or Andrews ‘c[ould] just stand up and say, I want to take a dismissal . . . plaintiff can be free to file another complaint.’” Andrews decided to take a voluntary dismissal and on November 3, 2010, she filed her second complaint. Defendants moved to stay the second action and for costs under Rule 41(d), seeking $23,437.75 for attorneys’ fees and other expenses. Defendants were awarded fees relating to the motion to dismiss and the district court affirmed the award stating, “Andrews’ conduct amounted to vexatious litigation, for which fees could be recovered.” On appeal to the Fourth Circuit in 2013, the court dismissed Andrews’ appeal as interlocutory and unappealable. The district court then awarded Defendants $13, 403.75 in attorneys’ fees; Andrews appealed the award without paying the costs. Andrews’ case was then dismissed for nonpayment. The Fourth Circuit granted Andrews’s motion for voluntary dismissal and the district court dismissed Andrews’s second action for nonpayment. Andrews appealed.
On appeal, the Court began its analysis by determining whether and under what circumstances attorneys’ fees could be awarded under Rule 41(d). Rule 41(d) stated if a plaintiff took a voluntary dismissal and then refilled an action based on the same claim; the court “(1) may order the plaintiff to pay all or part of the costs of that previous action; and (2) may stay the proceedings until the plaintiff has complied.” Rule 41(d) is in place to avoid forum shopping and vexatious litigation but attorneys’ fees are not explicitly permitted. The Court recognized the split of authority on whether Rule 41(d) included the award of attorneys’ fees. The Court relied on the analysis and conclusion of the Seventh Circuit in Esposito v. Piatrowski, 223 F.3d 497, 501 (7th Cir. 2000) which held “‘a party may recover reasonable attorneys’ fees as part of its ‘costs’ under Rule 41(d) only where the underlying statute defines costs to include attorneys’ fees.’” The Court also stated attorneys’ fees were permitted if the court “makes a specific finding that the plaintiff has acted ‘in bad faith, vexatiously, wantonly, or for oppressive reasons,’ a well-established exception to the American Rule.”
The Court concluded awarding attorneys’ fees to Defendants was not permitted under the FLSA, “which provides that when a plaintiff prevails a court ‘shall . . . allow a reasonable attorney’s fee to be paid by the defendant.’” The Court then determined whether Andrews’ behavior warranted attorneys’ fees to be awarded. The magistrate judge stated Andrews’ voluntarily taking a dismissal “‘delayed the resolution of this case, increased the costs of defending this action, and wasted the judicial resources of the Court.’” The district court concluded Andrews acted vexatiously by taking the voluntary dismissal to avoid a negative ruling on the motion to dismiss while trying “‘to get it right.’” The Court disagreed recalling vexatious’ meaning of “‘“without reasonable or probable cause or excuse.”’” The Court concluded Andrews’ behavior was not vexatious because Andrews followed the district court’s option to dismiss the first lawsuit and refile after amending the complaint. The Court also noted Andrews refilled the lawsuit the very same day as taking the voluntary dismissal; “this fact is insufficient evidence of vexation.” Andrews’ complaints were also not “‘virtually identical’” with the second complaint being more detailed in the allegations; therefore, not warranting Andrews’ conduct being labeled vexatious. Therefore, the Court concluded Defendants were not entitled to attorneys’ fees because the FLSA does not provide attorneys’ fees for defendants but rather prevailing plaintiffs and Andrews’s conduct was not vexatious in order to permit attorneys’ fees.
Accordingly, the Court vacated, reversed, and remanded for further proceedings.
Alicia E. Morris
ANDERSON v. HANCOCK, NO. 15-1505
Decided: April 27, 2016
The Fourth Circuit affirmed in part, reversed in part, and remanded for review.
In 2011, plaintiffs, William Anderson, Jr. and Danni Jerrigan purchased a house from defendants, Wayne and Tina Hancock using a loan financed by the defendants. In exchange for the loan, the plaintiffs granted defendants a deed of trust on the property and executed a promissory note with monthly payments based on an interest rate of five percent over a term of thirty years. The note included a provision that stated if the plaintiffs default on the loan, the interest rate would increase to seven percent. Two years later, the plaintiffs defaulted on the loan, and the defendants imposed the seven percent interest rate. The defendants initiated foreclosure proceedings.
Shortly thereafter, plaintiffs filed for bankruptcy. The plaintiffs filed a proposed bankruptcy plan that proposed to pay off the loan using the five percent interest rate for each missed payment. The Defendants objected, stating that the payments should continue to reflect the seven percent interest rate. The bankruptcy court agreed with defendants, and found that the use of the five percent interest rate ran afoul of 11 U.S.C. § 1322(b)(2), which prevents plans from modifying the rights of creditors whose interests are secured by debtors’ principal residences.
The plaintiffs appealed to the district court, arguing their bankruptcy plan should be allowed to “cure” the increased default rate of interest. The district court rejected this argument, but held that acceleration and foreclosure were an alternative remedy to the default rate of interest, so that once the defendants accelerated the loan the interest rate reverted back to five percent. As such, the interest rate for a payment depended on whether the loan was in accelerated or decelerated status.
The plaintiffs again appealed, contending that a cure under the bankruptcy code could bring the loan back to its initial rate of interest. The Fourth Circuit disagreed, finding the deceleration of the loan and avoidance of the foreclosure to be the cure under the code. In reaching this conclusion, the court examined whether the proposed change of interest qualified as a “cure” under 11 U.S.C. § 1322(b)(3) or (5), or a prohibited “modification” under § 1322(b)(2). Relying on Nobelman v. Am. Sav. Bank, 508 U.S. 324, 329 (1993), the court determined that a change in the interest rate amounted to a fundamental alteration of the debtors’ obligations, thereby modifying the defendant’s rights. The court also examined the definition of the term “cure” within the context of the code, finding the term focuses on the ability of a debtor to decelerate and continue paying a loan. Understanding that the meaning of cure focuses on the maintenance of pre-existing payments, the court held that modification of the interest rate would amount to an improper modification.
The court further rejected plaintiffs’ argument that this interpretation would lead to an unfair result counter to the purpose of the bankruptcy code, providing two purposes of default interest rates. First, default interest rates represent the time value of money, and second, they serve as compensation for taking on risk. As such, the court argued that it did not intend to harm the plaintiff, but to enforce the statute and protect the mortgage market.
Finally, the Fourth Circuit disagreed with the district court’s finding that a five percent rate of interest should apply after acceleration of the loan because the court’s determination that accelerate was an alternative remedy was not a plausible construction of the promissory note.
Accordingly, the court affirmed the judgment of the district court insofar as it required that post-petition interest payments be calculated using the seven percent default rate of interest, but reversed the part of the judgment which applied only a five percent rate of interest to payments after acceleration, and remanded the case to the district court for further proceedings.
ALVAREZ v. LYNCH, NO. 15-1599
Decided: July 7, 2016
The Fourth Circuit reversed and remanded the district court’s ruling.
Petitioner Gabriel Santos Alvarez is a citizen of Bolivia and has been a lawful permanent resident of the United States since 2002. In 2012, Alvarez was convicted of embezzlement and in 2014 was convicted of forging a public record. The Department of Homeland Security (“DHS”) issued a Notice to Appear to remove Alvarez from the United States because he had been convicted of two crimes involving moral turpitude and on the separate justification of being an alien convicted of an aggravated felony – specifically, an offense “relating to” forgery. The Petitioner now seeks review of the decision finding him ineligible for cancellation of removal that was rendered ineligible due to Alvarez’s aggravated felony.
The Fourth Circuit was asked to decide whether a Virginia conviction for forgery of a public record was an aggravated felony under the INA, which is defined as “an offense relating to forgery for which the term of imprisonment is at least one year.” The federal definition “must be viewed in the abstract, to see whether the state statute shares the nature of the federal offense that serves as a point of comparison.” If it is not, the Petitioner may be eligible for cancellation of removal. Petitioner argued that Virginia forgery is so broad that it does not even “relate to” federal forgery; therefore it is not an aggravated felony.
The Fourth Circuit, however, concluded that the offenses are a categorical match under the statutes because Petitioner gave the Court no reason to conclude that Virginia would apply its statute to conduct that falls outside the generic definition of forgery. Because the offenses were a match, the two statutes necessarily relate to each other. Therefore, the Fourth Circuit held that the Virginia public record forgery is an aggravated felony.
Accordingly, the Court denied the petition for review as well as the Government’s renewed request to remand.
YATES v. TERRY, No. 15-1555
Decided: March 31, 2016
The Fourth Circuit affirmed the district court’s ruling.
In 2008, the plaintiff, Brian Yates, was driving on a highway in North Charleston, South Carolina. His brother and mother were following him in another vehicle. Yates drove past two police cruisers when one of the cruisers driven by the defendant, Blair Terry, pulled out and began to follow Yates. Yates pulled over and Terry approached and asked Yates for his driver’s license. The plaintiff responded he did not have his license but did have military identification. Terry opened Yates’ door and forced Yates out of the car. Around this time, Yates’ mother and brother arrived at the gas station. Yates was forced to place his hands on the car and Terry informed Yates that he was under arrest. Yates inquiry for the basis of the arrest was left unexplained by Terry. Terry began to deploy his taser in “probe mode” causing Yates to fall to the ground. Yates’ brother asked why Terry tased Yates and Terry responded by threatening to call for back up. Terry tased Yates while Yates was still on the ground two more times which caused Yate’s mother to pass out. Other officers arrived and placed Yates into handcuffs. Yates was charged with excessive noise violation, no license in possession, and disorderly conduct. In 2011, Yates filed this action in state court alleging multiple state and federal claims against the defendant. The suit was moved to federal court and defendant made a motion for summary judgment, which was granted in part except against Terry in his individual capacity for use of excessive force. Eventually in 2015, the parties filed a stipulation of dismissal as to all claims except for the 42 U.S.C. § 1983 claim for excessive force against Terry. This appeal followed.
The court first determined if Terry was entitled to qualified immunity using a two-step inquiry set forth by the Supreme Court in Saucier v. Katz. The first step is to determine if the facts establish that the officer violated a constitutional right. The second step determines whether that constitutional right was clearly established. The Fourth Amendment bars police officers from using excessive force and courts evaluate a claim of excessive force based on an “objective reasonableness” standard. The court must balance the nature and quality of the intrusion to the individual’s Fourth Amendment interests against the countervailing governmental interests at stake. To do this the court can use the three factors from Graham v. Connor. The factors are the severity of the crime, whether the suspect poses an immediate threat to the safety of the officers or others, and whether he is actively resisting arrest or attempting to evade arrest by flight. The court determined that a minor traffic violation is not a severe crime. Yates was unarmed and complied with Terry’s instructions before Terry began to use his taser so the evidence does not support an inference that Yates was a danger to Terry or anyone else. Yates was not attempting to flee from Terry and he never attempted to get up after he fell to the ground by Terry’s first taser application. The Graham analysis shows that Terry was not being objectionable reasonable and thus Yates’ fourth amendment constitutional rights were violated. The court determined that it was clearly established that a police officer was not entitled to use disproportionate force by repeatedly tasing a nonviolent misdemeanant who presented no threat to the safety of the officer or the public and who was compliant and not actively resisting arrest or fleeing. Based on Yates’ constitutional right being violated and it being clearly established at the time of Terry’s actions, the district court’s denial of Terry’s motion for summary judgment based on qualified immunity is affirmed.
U.S. v. RAGIN, No. 14-7245
Decided: March 11, 2016
The Fourth Circuit vacated the judgment of conviction and sentence, entered direct entry of judgment in favor of Ragin on his § 2255 motion, and remanded for further proceedings.
In October 2004, Defendant, Nicholas Ragin was indicted along with six codefendants, with conspiracy and other substantive offenses related to their involvement in prostitution and drug rings. The district court appointed Ragin an attorney after the indictment. Ragin was indicted for conspiracy to commit offenses against the United States, including enticing and coercing individuals to travel in interstate commerce to engage in prostitution, interstate transportation of minors to engage in prostitution, and interstate wire transfer of funds in aid of racketeering enterprises, in violation of 18 U.S.C. § 271; and conspiracy to possess with intent to distribute cocaine base and to employ, hire, use, persuade, induce, entice and coerce minors in violation of 21 U.S.C. §§ 841, 846, and 861. Ragin was found guilty on both counts. On June 25, 2006, prior to sentencing, Ragin submitted a letter complaining about his court-appointed counsel. He alleged that his counsel was asleep during his trial. The district court sentenced Ragin to 360 months in prison and the Fourth Circuit affirmed the conviction and sentence.
On October 1, 2010, Ragin moved to have has conviction and sentence vacated pursuant to 28 U.S.C. § 2255, raising allegations accusing his counsel of providing ineffective assistance of counsel. The district court issued an order requesting an evidentiary hearing to be held to resolve Ragin’s ineffective assistance claim. At the evidentiary hearing, several witness testified that Ragin’s counsel was asleep during parts of the trial, although some could not testify to which specific parts of the trial counsel was asleep during. After the evidentiary hearing, the district court dismissed Ragin’s § 2255 motion. The court held that the “requisite showing of prejudice for ineffective assistance of counsel varies depending on the evidence: a presumption of prejudice only applies ‘when the evidence shows counsel slept through a “substantial portion” of the defendant’s trial,’ whereas the ordinary standard requiring the defendant to demonstrate prejudice applies in all other cases involving isolated allegations that counsel was asleep.” The district court held that Ragin’s counsel was not asleep for a “‘substantial portion’ of the trial.” The district court then applied the Strickland standard that “a defendant must show that his counsel’s performance was deficient and prejudicial to prevail on a claim of ineffective assistance of counsel.” The district court concluded that Ragin had not demonstrated prejudice so his § 2255 motion was denied.
On appeal, the Court analyzed the Strickland test and its companion case Cronic. The Court stated that generally a defendant must show counsel’s deficient performance and prejudice except in limited contexts, where prejudice is presumed. Cronic identified three situations in which prejudice is presumed: (1) “when the defendant is completely denied counsel ‘at a critical stage of his trial’”; (2) “if there has been a constructive denial of counsel”; and (3) “‘when although counsel is available to assist the accused during trial, the likelihood that any lawyer, even a fully competent one, could provide effective assistance is so small that a presumption of prejudice is appropriate without inquiry into the actual conduct of the trial.’” The Court relied on four other circuits’ conclusion that “prejudice must be presumed when counsel sleeps either through a ‘substantial portion of [a defendant’s] trial’ or at a critical time during the trial.” The Court stated, “‘sleeping counsel is tantamount to no counsel at all.’” After viewing the witness’s testimony, the Court concluded that Ragin’s counsel was asleep for a substantial portion of the trial. The witnesses, especially one of the jurors, had the opportunity to see Ragin’s counsel because they were sitting directly across from him. Ragin’s counsel also did not deny sleeping during the trial. Since Ragin’s counsel was sleeping during the trial, Ragin was constructively denied counsel for substantial periods of the trial. Therefore, prejudice was presumed and Ragin was denied effective assistance of counsel.
Accordingly, the Court vacated the judgment of conviction and sentence, entered direct entry of judgment in favor of Ragin on his § 2255 motion, and remanded for further proceedings.
Alicia E. Morris
U.S. v. McNEAL, Nos. 14-4871 & 14-4872
Decided: March 28, 2016
The Fourth Circuit affirmed the district court’s ruling.
In February 2014, McNeal, Stoddard and a third defendant were indicted and charged with conspiracy to commit armed robbery of a bank (Count 1), substantive armed bank robbery offenses (Counts 2, 4, and 6), and brandishing firearms during crimes of violence (Counts 3, 5, and 7). The charges arose from a 2013 robbery of a Bank of Georgetown branch in Virginia, a 2013 robbery of a Wells Fargo branch on North Glebe Road and a 2013 robbery of a Wells Fargo branch on South George Mason Drive. On December 30, 2013, FBI agents applied for and received a warrant authorizing the placement of a tracking device on a 2004 Ford Taurus. The warrant relied on the details of four recent bank robberies and the information from a confidential informant. The confidential informant stated that an individual in the surveillance photograph resembled McNeal and identified the getaway car. On December 31, 2013, McNeal drove the Taurus with Stoddard and the third defendant to commit the New Year’s Eve robbery. FBI agents blocked the getaway from the bank robbery after observing Stoddard and the third defendant exiting with a black trash bag overflowing with money. After the robbery, agents sought and received a warrant to search McNeal’s residence. During the search, agents discovered a locked box, which contained a silver revolver and $300 in cash, under a bed in the only bedroom that contained men’s clothing and toiletries.
Prior to trial McNeal sought to suppress the evidence seized in executing the two warrants and maintained that the search warrant and tracking device were not supported by probable cause. The district court denied this motion. At trial, a loaded semiautomatic Glock handgun, the silver revolver, and the cash seized from McNeal’s residence were introduced as well as Stoddard’s own statements about his criminal history. The district court overruled McNeal’s objection to exclude the silver revolver and cash from being admitted at trial. The jury found Stoddard guilty on all seven counts and McNeal guilty on the conspiracy offense, armed robbery and brandishing offense arising from the New Year’s Eve robbery. McNeal and Stoddard filed motions for judgments of acquittal but the district court denied the acquittal motions ruling that “‘a rational trier of fact could find that the conspiracy to commit armed bank robbery.’” Stoddard was sentenced to life in prison and McNeal was sentenced to 184 months.
On appeal, McNeal and Stoddard jointly challenged the sufficiency of the evidence supporting their convictions on the brandishing offense. McNeal also challenged the adequacy of proof with respect to his conspiracy conviction, the denial of his motions to suppress and certain evidentiary rulings. McNeal and Stoddard contended that armed bank robbery was not a “‘crime of violence’” in the context of the brandishing offense. First, McNeal and Stoddard asserted that the prosecution failed to prove that the handgun brandished in the three robberies underlying offenses three, five and seven were, in fact, firearms under federal law. The Court held that “the lay testimony of eyewitnesses that ‘a gun was used in the robbery’ is a sufficient basis for the jury to find that a ‘firearm’ was used in a bank robbery offense,” therefore rejecting McNeal and Stoddard’s assertion. Second, McNeal’s contention that there was insufficient evidence to convict him of conspiracy was rejected because McNeal’s knowledge that a firearm would be used in the robberies was sufficient to support the guilty verdict. His involvement in the planning and carrying out of the New Year’s Eve robbery also supported the conviction. Third, McNeal’s contention that his motions to suppress the evidence seized pursuant to the tracking warrant and the search warrant were erroneously denied was rejected because the Taurus was registered to McNeal’s mother and he used it to target the banks as well as the informant advising the FBI that McNeal used the Taurus to rob the banks. Therefore, both warrants were supported by probable cause and the motions were properly denied. Fourth, McNeal’s challenge to the introduction of the silver revolver and the cash seized from his residence was denied because there was an adequate foundation for admitting the items, especially after McNeal stipulated that the residence was his.
Finally, McNeal and Stoddard stated that armed bank robbery was not a crime of violence. The brandishing offenses can only be overturned if McNeal and Stoddard satisfy plain error review because they did not preserve it in the trial court. A “‘crime of violence’ means a felony offense that either: ‘(A) has as an element the use, attempted use, or threatened use of physical force against the person or property of another, or (B) . . . by its nature, involves a substantial risk that physical force against the person or property of another may be used in the course of committing the offense.’” McNeal and Stoddard contend that armed bank robbery does not have as an element the use, attempted use, or threatened use of physical force. The Court disagreed stating that it included “the element that property must be taken ‘by force and violence, or by intimidation.’” According to United States v. Davis, armed bank robbery has four elements: “(1) the defendant took, or attempted to take, money belonging to, or in the custody, care, or possession of, a bank, credit union, or saving and loan association; (2) the money was taken ‘by force and violence, or by intimidation’; (3) the deposits of the institution were federally insured; and (4) in committing or attempting to commit the offense, the defendant assaulted any person, or put in jeopardy the life of any person, by the use of a dangerous weapon or device.” Relying on United States v. Adkins and several other cases, the Court stated that armed bank robbery was a crime of violence because bank robbery required the use of physical force or intimidation. The Court rejected McNeal and Stoddard’s assertion that the Court should rely on United States v. Johnson, which held that simple battery, was not a crime of violence. Further, the Court held that “because intimidation entails a threat to use violent physical force, and not merely a threat to cause bodily injury . . . bank robbery is a crime of violence under the § 924(c)(3) force clause.” Finally, the Court stated that McNeal and Stoddard failed to meet plain error review and therefore the trial court did not err in concluding that armed bank robbery was a crime of violence.
Accordingly, the Court affirmed the judgment of the district court.
Alicia E. Morris
U.S. v. FITZGERALD, No. 14-4795
Decided: April 27, 2016
The Fourth Circuit vacated the defendant’s convictions and remanded for further proceedings.
A Maryland grand jury returned an indictment against Robert Fitzgerald for one count each of possessing a firearm as a felon, possessing heroin with intent to distribute, and possessing marijuana with intent to distribute. During pretrial proceedings, the defendant moved to suppress certain evidence and moved for a Franks v. Delaware hearing regarding what he alleged to be knowing and material false statements in application for a warrant to search the defendant’s residence. The district court denied Fitzgerald’s motion. The defendant rejected an initial plea offer from the prosecutor. In 2014, defendant had a discussion with the court and his defense counsel concerning what appellate rights Fitzgerald would retain after pleading guilty. The parties all agreed that defendant’s guilty plea would not waive the defendant’s right to appeal his sentence particularly as it related to an appellate issue for a petition for writ of coram nobis, which would attack one of Fitzgerald’s predicate convictions and make him no longer a career offender. The district court accepted Fitzgerald’s plea and Fitzgerald was eventually sentenced to 130 months’ imprisonment. Fitzgerald appealed his convictions.
The Fourth Circuit determined that Fitzgerald did not enter a valid conditional guilty plea and the court did not address the merits of Fitzgerald’s appeal. The general rule is that when a defendant pleads guilty, he waives all nonjurisdictional defects in the proceedings conducted prior to the entry of the plea, and thus the defendant has no nonjurisdictional ground to attack the judgment except the inadequacy of the plea. The Federal Rules of Criminal Procedure 11(a)(2) provides an exception that with the consent of the court and the government, a defendant may enter a conditional plea of guilty, reserving in writing the right to have an appellate court review an adverse determination of a specified pretrial motion. If the defendant prevails on appeal, he is able to withdraw the plea. The writing requirement is met if the record clearly shows no doubt that a conditional plea was agreed to. While the writing requirement is flexible, the consent of the court and government are mandatory and cannot be avoided. The Fourth Circuit determined that the government-consent requirement was not satisfied. Fitzgerald and the government both argued that the prosecutor consented to the conditional plea when he was silent during the discussion. The court looked at Rule 11’s Advisory Committee notes to determine that the government consent needed for 11(a)(2) had to be direct and could not come from an inference or implication. The record did now show clear government consent to Fitzgerald’s conditional plea, as the “that’s perfect” comment by the prosecutor after the plea colloquy was not clear to if it referred to the entire conditional plea discussion or not so an inference would have to be used and Rule 11 was written to avoid any inference being applied. Since Fitzgerald entered the conditional guilty plea on the assurance that he had appellate rights, the defendant’s conditional plea could not be treated as a voluntary unconditional plea and therefore, the court vacated and remanded the judgment so that Fitzgerald could decide to plead guilty again or whether to proceed to trial.
U.S. v. BAILEY, JR., No. 15-4109
Decided: April 12, 2016
The Fourth Circuit vacated the lower courts carjacking conviction and remanded with instructions that a judgement of acquittal be entered forthwith.
On April 17, 2014, Defendant, Kenneth Lee Bailey crashed head-on into a stone wall after attempting to flee an attempted traffic stop. The officer who pursued the chase arrived at the scene and, with her gun drawn, ordered Bailey to raise his hands. Hearing cries of a child coming from the crashed vehicle, the officer holstered her weapon and approached the car to see if the child was injured. At that moment Bailey fled on foot to a nearby McDonalds. Bailey, panicked and bloodied, approached Devin Watkins while sitting in his truck and told Watkins that he would pay him for a ride. After refusing Baileys request multiple times and attempting to lock his doors and put the car in reverse, Watkins accidently unlocked the doors and Bailey was able to open the driver’s side back door. Eventually Bailey climbed inside the truck behind Watkins. Bailey told Watkins to “drive, drive, drive, drive,” then placed something “hard and cold” to the back of Watkin’s neck. Believing that Bailey was about to kill him, Watkins placed the truck in park and jumped from the vehicle into some nearby bushes. Bailey eventually abandoned the truck and continued to flee on foot until he was apprehended. On August 27, 2014, after the district court denied Bailey’s motion for judgement of acquittal, the jury found Bailey guilty of carjacking in violation of 18 U.S.C. § 2119. Bailey appealed.
To satisfy the intent element necessary in a charge of carjacking, the government must show that the defendant unconditionally intended to kill or seriously injure the car’s driver or that the defendant possessed a conditional intent to kill or seriously injure the car’s driver should such violence become necessary. Bailey argued that the government failed to present sufficient evidence that he intended to seriously harm or kill Watkins if necessary to take the truck. Citing case from the Fourth Circuit and sister jurisdictions on the matter of sufficiency of evidence challenges, the Court noted that in each case, the evidence of intent was much stronger than the evidence presented to the jury regarding Bailey’s state of mind. Where the defendants in the referenced cases had evidence showing that they threatened their victims with actual weapons, made affirmative threatening statements, and/or physically assaulted their victims, Bailey initially suggested that he would pay Watkins for a ride, and only when Watkins refused did Bailey enter the vehicle, place a “cold and hard” item to Watkins’s neck, and tell him to drive. Furthermore, there was no testimony that Bailey ever had a weapon.
In Holloway v. United States, the Supreme Court explained that “an empty threat, or intimidating bluff, . . . standing on its own, is not enough to satisfy § 2119’s specific intent element.” 526 U.S. 1, 11 (1999). There was no evidence of an actual threat to inflict harm on Watkins. Additionally, Holloway requires factfinders to look “to the defendant’s state of mind at the precise moment he demanded or took control over the car” and instructs that proof of the requisite mens rea can only be satisfied if, at that precise moment, “the defendant possessed the intent to seriously harm or kill the driver if necessary to steal the car.” Id. at 8, 12 (emphasis added). Considering all the testimony, the Court determined that there was insufficient evidence to support a jury finding beyond a reasonable doubt that Bailey possessed the specific intent to kill or seriously harm Watkins when he took control over Watkin’s truck.
Therefore the Court vacated the judgment and remanded the case for entry of a judgment of acquittal.
Aleia M. Hornsby
U.S. v. BURLESON, No. 15-6589
Decided: March 8, 2016
The Fourth Circuit reversed, vacated, and remanded the district court’s ruling.
Appellant Arnold Paul Burleson was convicted of several North Carolina felony offenses between 1964 and 1985 and, based on these convictions, pled guilty in 2013 to possession of a firearm by a convicted felon under 18 U.S.C. § 922(g) and as an armed career criminal under 924(e) which mandates a minimum sentence of fifteen years. Burleson now argues he is actually innocent of the 922(g) offense because the predicate felony conviction is excluded from 922(g).
This Court agrees. In order to be a felon under 922(g), a defendant must have an underlying felony conviction on his record, which is defined as “a crime punishable by imprisonment for a term exceeding one year”. Burleson plead guilty to the 922(g) offense because the presentence investigation report indicated that he had five such convictions on his record. The court therefore imposed the fifteen-year minimum sentence. Several months later, Burleson filed a 28 U.S.C §2255 motion asserting he was innocent of the 922(g) offense because his civil rights had been restored long before his 2012 arrest. The claim rests on 921(a)(20) which excludes from the definition of a felony conviction “any conviction for which a person has had civil rights restored, unless such restoration of civil rights expressly provides that a person may not ship, transport, possess, or receive firearms.” Burleson argues his civil rights were fully restored almost two decades before the 2012 arrest upon his unconditional discharge from parole and the expiration of a five-year waiting period. The government does not dispute this, but argues the “unless” clause is triggered by a 1995 statute that prohibits all people with felony convictions from possessing firearms.
This case turns on the interpretation of § 921(a)(20) and whether the “unless clause” requires looking to state firearm restrictions in effect at the time Burleson’s civil rights were restored or to those in effect when Burleson was arrested on the 922(g) charge. The district court adopted a magistrate judge’s recommendation that a court should consider state firearm restrictions in effect at the time of the 922(g) arrest. The Fourth Circuit disagrees by highlighting the key statutory phrase “unless such…restoration…expressly provides” for a firearm restriction. “Such restoration” plainly refers back to the restoration of civil rights discussed in the previous clause. Congress could have, but did not, utilize the clause “unless current state law expressly provides” for a firearm restriction. The Courts of Appeals for the Fifth, Eighth, Ninth, and Tenth Circuits have considered the same question and mirrored our conclusion that restrictions in effect at the time of restoration are to be used.
Because Burleson’s civil rights were restored from his previous offenses, and because the unless clause does not apply, Burleson legally and factually could not have committed a 922(g) offense because he did not, at the time of the purported offense, have a predicate felony conviction on his record.
Accordingly, the Court reversed, vacated, and remanded the district court’s ruling.
U.S. v. PALMER, No. 14-4736
Decided: April 21, 2016
The Fourth Circuit affirmed the ruling of the district court.
On October 15, 2013, Officer Ring of the Chesapeake police stopped Michael Jerome Palmer (“Palmer”) because the windows of his car were tinted too dark and because the inspection sticker on the front windshield of the car appeared fraudulent. After a database check, Ring learned that Palmer had a gang affiliation. Upon another search of the database LInX, Ring learned that Palmer had a criminal record that included arrests for drug charges and firearm possession. Ring returned to the car and decided to inspect the sticker that he suspected was fraudulent. Ring asked Palmer to exit the vehicle and leaned inside the driver’s side door to inspect the sticker. While reading the sticker, Ring smelled marijuana. Ring wanted to be sure that the car contained drugs, so he called an officer with a drug dog to search the vehicle. After the search, the officers discovered a plastic bag containing crack cocaine and a 40-caliber Smith & Wesson pistol wedged between the driver’s seat. Palmer was immediately arrested. The district court conducted an evidentiary hearing where Ring explained his actions and the evidence that had been presented. Palmer moved that the evidence be suppressed and the district court denied this motion, citing eight supporting factors. Palmer plead guilty to the indictment but appealed the suppression ruling to the Fourth Circuit. Palmer alleged that there was no objectively reasonable basis for the traffic stop, that Ring unreasonably expanded the scope of the stop after it began, and that Ring’s entry into the car was constitutionally impermissible under the Fourth Amendment.
The Court reviewed the district court’s ruling de novo with respect to reasonable suspicion and probable cause, but absent clear error, will not disturb factual findings made by a district court after an evidentiary hearing on suppression issues. As to Palmer’s arguments in favor of suppression, the Court utilized the two-prong standard from Terry v. Ohio to assess the constitutionality of the traffic stop. The Court reasoned that the first prong of Terry was satisfied because Ring was familiar with the limits on window tint under Virginia law and in his view, the car’s windows were too dark. The Court stated that there was nothing that indicated the district court erred in crediting Ring’s testimony on that issue. The Court further reasoned that the second prong of Terry was satisfied in this case. The court concluded that Ring’s actions prior to examining the sticker were permissible under Terry’s second prong because he did not unreasonably expand the scope of the traffic stop. The Court reasoned that the factors present at the stop demonstrated a connection to possible criminal activity, thus satisfying Terry’s second prong. Furthermore, the Court determined that Palmer did not have a legitimate expectation of privacy that was infringed by the search of his car. The Court also determined that the district court did not err in finding that Ring had a reasonable suspicion that the inspection sticker was fraudulent. The Court further found that the means of investigation was not unreasonable given the circumstances. Therefore, the Court determined that the second prong of Terry was satisfied and no constitutional violation occurred.
Accordingly, the Court affirmed the judgment of the district court.
Michael W. Rabb
U.S. v. HARE, Nos. 14-4758, 14-4770, & 14-4832
Decided: April 19, 2016
The Fourth Circuit affirmed the district court’s ruling.
A jury convicted defendants the defendants of drug, robbery, and firearm offenses based on their participation in a plan to rob a cocaine “stash house.” Unbeknownst to the defendants, the stash house did not exist; rather, it was fabricated by undercover federal agents as part of a sting operation. Appellants challenge the district court’s denial of their motion for discovery into potential race discrimination by law enforcement and motion to dismiss the indictment on due process grounds, among other claims.
The Appellants’ first contended that the district court erred in denying their motion for discovery into whether ATF targeted the Appellants because they were black, i.e. the ATF engaged in selective enforcement. In support of this motion, Appellants pointed to statistics that showed that in the five stash house stings in their geographic area conducted by ATF agents within the past three years, all of the defendants in those cases (a total of 32) were black. Appellants also pointed to a “known white crew” in the area involved in robberies and drug distributions that were not targeted by ATF. Appellants argued that this evidence entitled them to discovery into their selective enforcement claim. In order to obtain discovery in support of a selective enforcement, the Fourth Circuit affirmed that defendants must produce “some evidence making a credible showing of both discriminatory effect and discriminatory intent.”
On the appellants’ claim of discriminatory selective enforcement, the Fourth Circuit affirmed the district court’s holding and held that the Appellants’ statistical evidence did not meet the necessary standard because “absent an appropriate basis for comparison, statistical evidence [of racial disparity] alone cannot establish any element of a discrimination claim.” In other words, while the statistics relied upon by the Appellants was alarming on its face, they failed to provide any evidence that similarly situated individuals of other races were committing similar crimes in comparable frequencies. Furthermore, the Fourth Circuit pointed out that even if it were to assume that Appellants’ statistical evidence did have a basis for comparison that showed discriminatory effect, it would not necessarily prove discriminatory intent.”
In addition, Appellants contended that the district court erred in their respective firearm charges by applying the incorrect standard. However, despite their attempts, the Fourth Circuit affirmed the district court’s application of the law as it pertained to the Appellants’ firearm charges. The Fourth Circuit found not only the district court’s application correct, but also its reasoning.
Accordingly, the Fourth Circuit affirmed the Appellants’ convictions on all counts.
U.S. EEOC v. MARITIME AUTOWASH, No. 15-1947
Decided: April 25, 2016
The Fourth Circuit reversed and remanded the trial court’s decision declining to authorize the Equal Employment Opportunity Commission’s application for subpoena enforcement.
On July 27, 2013, Elmer Escalante—who lacked authorization to work in the United States—and several other Hispanic employees complained to Plaintiff, Maritime Autowash (“Maritime”), of unequal treatment and discrimination targeting Hispanics. That same day, all of them were terminated. Escalante then filed charges with the Equal Employment Opportunity Commission (“EEOC”) for discrimination on the basis of national origin and retaliation as prohibited under Title VII. In response to the charges, Maritime denied all of the allegations of discrimination, claiming that Escalante was terminated for failing to appear for a scheduled work shift. The EEOC then served Maritime with a Request for Information (“RFI”) seeking personnel files, wage records, and other employment data related to Escalante, the other charging parties, and similarly situated employees. Maritime refused to provide records for any Hispanic employee other than Escalante. Due to Maritime’s incomplete RFI, the EEOC issued a subpoena, to which Maritime produced none of the subpoenaed documents. The EEOC then filed an application for subpoena enforcement which the district court denied stating that a “plaintiff is entitled to [Title VII] remedies only upon a successful showing that the applicant was qualified for employment” and that being qualified meant being “authorized for employment in the United States at the time in question.” The EEOC appealed. The only question the Court of Appeals seeks to answer is whether EEOC’s subpoena, designed to investigate Escalante’s Title VII charges, is enforceable. They determined it was.
Maritime argued that someone lacking proper work authorization was never qualified for employment and therefore lacks any cause of action or remedy under Title VII. However, the EEOC argued that, regardless of whether a cause of action or remedies ultimately arise from the investigation, those potential outcomes have no bearing on its subpoena power. The Court agreed to an extent. In addition to the fact that nothing under Title VII explicitly bars undocumented workers from filing complaints, the Court has not required a showing of a viable cause of action or remedy at the subpoena enforcement stage. The EEOC’s authority to investigate is not negated simply because the party under investigation may have a valid defense to a later lawsuit. Yet, the Court recognized that there is a limit to the EEOC’s subpoena power—specifically, the subpoena cannot be unduly burdensome. The Court determined that the EEOC must be allowed to do their job, and thus they instructed that the subpoena be enforced.
Accordingly, the Court reversed and remanded the district court decision.
In his concurrence, Judge Niemeyer questioned whether the EEOC’s application for subpoena enforcement exceeded its substantive jurisdiction. He ultimately concluded that the subpoena should have been enforced because the record plausibly suggested that the employer had engaged in a practice or pattern of discrimination that adversely effected other employees who were authorized to work in the U.S.
Aleia M. Hornsby
ST. PAUL MERCURY INS. CO. v. AM. BANK HOLDINGS, No. 15-1559
Decided: April 14, 2016
The Fourth Circuit affirmed the district court’s ruling.
In June 2008, Amiel Cueto sued American Bank and ten other defendants alleging that they fraudulently failed to fund his $8 million sale of real property, causing the deal to collapse. American Bank asserted the suit was frivolous because it had nothing to do with the Illinois transaction; it is based in Maryland. The complaint and summons were served on American Bank’s agent, CT Corporation on June 18, 2008. The papers were transmitted to American Bank’s CFO; however, the CFO had left the employment of American Bank. In late July 2008, an American Bank subsidiary discovered the papers and forwarded them to American Bank’s local lawyer but the lawyer claimed to never receive them. Cueto obtained a default judgment for a total of $98,544,734.65 after American Bank failed to respond. American Bank received the court papers when Cueto began his efforts to collect on the default judgment a mere six months later. American Bank’s insurance broker notified St. Paul Insurance in February 2009. American Bank’s general counsel called St. Paul Insurance’s claims counsel to see if American Bank would be covered for this incident and the claims counsel replied “yes.” However, the claims counsel prepared documents stating that St. Paul reserved the right to deny coverage due to late notice. On April 15, 2009, St. Paul Insurance denied coverage due to a lack of timely notice.
American Bank retained counsel in St. Louis, Missouri and then in Chicago to appeal the default judgment. American Bank retained these counsels to have the default judgment overturned instead of accepting Cueto’s settlement before notifying St. Paul Insurance of the lawsuit. The Illinois state appellate court vacated the default judgment and dismissed the Cueto suit. The appeal cost American Bank $1.8 million in legal fees. St. Paul Insurance commenced this action for a declaratory judgment that it had no duty to provide coverage to American Bank because of untimely notice. In an amended complaint, St. Paul Insurance stated that American Bank breached its duty under the policy to defend the suit upon being served. American Bank advanced theories on waiver and estoppel. The district court granted St. Paul Insurance’s summary judgment motion and denied American Bank’s motion, concluding that American Bank breached its duty by providing late notice and St. Paul Insurance suffered prejudice as a result.
On appeal, American Bank argued that it provided timely notice to St. Paul Insurance; that it complied with its duty to defend; and that material factual disputes remained with respect to its waiver, estoppel, and bad faith claims. American Bank stated it provided timely notice because it provided notice when it had actual knowledge of the suit. However, the policy stated, “the requirement to give notice is triggered not by ‘actual knowledge’ or a claim, but by ‘service of a complaint’ upon the insured.” Therefore, American Bank’s duty to notify St. Paul Insurance was triggered when it’s agent was served with the papers. The Court noted, “internal ‘corporate screw-ups’ provide no basis to excuse American Bank’s failure to give St. Paul Insurance timely notice of the Cueto suit after being validly served with process.” American Bank’s notice was not timely because it notified St. Paul Insurance eight months after being served, this was not “as soon as practicable.” The Court stated the untimely notice prejudiced St. Paul Insurance because it “denied St. Paul Insurance the opportunity to participate in the selection of counsel, to speak with counsel, and to discuss credible defense strategies for dismissing Cueto’s suit before the default judgment.” Therefore, St. Paul Insurance was within its powers when it denied coverage to American Bank for the Cueto suit.
Accordingly, the Court affirmed the judgment of the district court.
Alicia E. Morris
S.B. v. BD. OF EDUC. OF HARFORD CNTY., No. 15-1474
Decided: April 8, 2016
The Fourth Circuit affirmed the district court’s granting of summary judgment to the Board.
Throughout his years at Aberdeen High School in Harford County, Maryland, disabled student S.B. was subject to severe student-on-student bullying, including homophobic insults, sexual harassment, and physical threats. S.B. or his parents reported most of these incidents to the school, and every reported incident was investigated by the school. In response to nearly every case, the school disciplined the offenders, and in the first half of 2013, S.B was assigned a paraeducator to accompany S.B. during the school day, help ensure his safety, and act as an objective witness to any incidents of harassment. Around the same time, the school took several actions against S.B.’s stepfather, T.L., who as a teacher and athletic director at the school, including disallowing T.L. completion of his master’s degree practicum on-site at the school, not providing T.L. with tickets to a student-athlete banquet, and not selecting T.L. to teach the school’s summer physical education class in 2013 despite T.L. having taught it the past three years. As a result, a complaint was filed against the Board of Education of Harford County alleging the Board had violated § 504 of the Rehabilitation Act and the Americans with Disabilities Act through disability-based discrimination against S.B. in failing to prevent the student-on-student bullying and retaliation against T.L. when he advocated on behalf of S.B. Following discovery, the district court granted summary judgment to the Board in April 2014.
In analyzing S.B. claim of discrimination, the Court noted that the district court properly applied the deliberate indifference standard established by Davis v. Monroe County Board of Education, which requires S.B. show, among other things, that the student-on-student harassment was based on his disability and the school knew of and was deliberately indifferent to the disability-based harassment. Further, the Court agreed with the district court’s analysis that regardless of the basis of the harassment S.B. faced, there is no evidence suggesting the Board was deliberately indifferent to it. In fact, the evidence conclusively showed the opposite, and instead of acting with indifference, the school investigated each reported incident, punished offenders in almost every case, and even assigned a paraeducator to accompany S.B. during the school day.
Similarly, the Court also agreed with the district court’s finding that T.L. failed to show a causal connection between the adverse actions against T.L. and his advocacy on behalf of S.B, which no one disputed was a protected activity for the purposes of a retaliation claim under the framework for a prima facie case of retaliation prescribed in McDonnell Douglas Corp. v. Green. Although the Court believed that the school’s decision to not select T.L. to teach the summer class he had previously taught for three years constituted a materially adverse action, T.L. failed to show anything more than a temporal proximity between that action and his protected activity, which by itself is insufficient to defeat a summary judgment claim once the school principal offered a convincing, non-retaliatory explanation for the action.
Accordingly, the Court affirmed the judgment of the district court.
RAYNOR v. PUGH, No. 14-7746
Decided: March 17, 2016
The Fourth Circuit vacated the district court’s ruling and remanded it for further proceedings.
James Raynor, an inmate at Sussex II State Prison, suffers medical ailments, including seizures, blackouts, blood issues, heart issues, and breathing issues. In November 2012, Raynor, who was housed with inmate Mullins asked prison officials to move him to a different cell with a “caretaker” inmate who had volunteered to assist Raynor with his conditions. Raynor renewed his request on January 10, 2013, with G. Pugh, the Prison Housing Manager. Pugh informed Mullins that he would be relocated to a different cell instead of moving Raynor. Raynor alleged that Mullins threatened him in front of Pugh and that Mullins claimed he “would physically assault [Raynor].” Raynor alleges that Pugh acted indifferently toward Mullins’ threats and that Pugh witnessed Mullins assault and injure Raynor without doing anything to stop it. Raynor suffered significant injury from the assault and became confined in a wheelchair as a result. Raynor filed a 42 U.S.C. § 1983 claim against Pugh, stating that Pugh’s indifference to the prison assault was “cruel and unusual” under the 8th amendment. The district court granted Pugh’s motion for summary judgment while acknowledging the parties “dispute[d] both defendant’s motivation in not breaking up the fight between plaintiff and Mullins” and whether Raynor “suffered a severe injury to his spinal cord.” However, the court concluded that these disputes were not “genuine” due to an asserted lack of evidentiary support for Raynor’s claim.
The 4th Circuit looked at a two-part test that included an objective and subjective inquiry in order for a plaintiff prisoner to attach liability to a prison guard. The objective inquiry requires the inmate to establish a serious deprivation of his rights in the form of a serious or significant physical or emotional injury. The subjective inquiry requires the inmate to show the prison official had a sufficiently culpable state of mind, which consists of deliberate indifference to inmate health or safety. This second factor is based on if the officer had a reasonable opportunity to act and simply refused to do so. The court applied the two-prong test to the present case. The court found there was evidence from Raynor that showed the seriousness of Raynor’s injuries from the assault and Pugh’s contrary evidence about the seriousness of the injury shows a genuine dispute about this prong to preclude summary judgment. Raynor’s evidence in his verified complaint and other as does Pugh actually witnessing the assault in person. Pugh’s version of not being a witness to the assault brings this second prong into dispute and precludes Pugh’s motion for summary judgment. The district court erred in granting summary judgment.
Judge Kennan concurred in part and concurred in the judgment because in her view Raynor’s complex medical history and his reliance on lay causation opinion, he has not yet raised a genuine dispute regarding the cause of his alleged injury. Because this defect may be remedied during the course of future discovery in this case, Raynor is entitled to have the lower court’s summary judgment award vacated.
PROVIDENCE HALL ASSOCS. LTD. P’SHIP v. WELLS FARGO BANK, N.A., No. 14-2378
Decided: March 11, 2016
The Fourth Circuit found that the elements of res judicata were satisfied and therefore the affirmed the lower court’s decision dismissing Plaintiff’s lawsuit against Defendant.
Plaintiff, Providence Hall Associates Limited Partnership (“PHA”), entered into three transactions with Wells Fargo’s predecessor-in-interest including; (1) a $2.5 million loan, (2) a $500,000 line of credit, and (3) an interest-rate-swap agreement, whereby PHA exchanged a fixed interest rate for a floating one based on the one-month U.S. Dollar London Interbank Offered Rate (“LIBOR”). The loan and the line of credit contained a cross-default clause, which stipulated that a default on either loan would amount to a default on both. Subsequently, PHA defaulted on the loans and filed a petition for Chapter 11 bankruptcy in March 2011. Shortly after the petition, Wells Fargo informed PHA that the default triggered over $3 million in termination damages and filed a proof of claim in the Chapter 11 case. The bankruptcy court appointed a trustee who then took several steps to bring PHA out of bankruptcy, including obtaining the approval of the court to sell two of the bankruptcy estate’s property to satisfy the debts owed by PHA to Wells Fargo. In the courts final sale order, the court explicitly stated that sale proceeds should be paid to Wells Fargo “up to the amount of the WFB Obligations,” where “WFB Obligations” was a defined term from Trustee Albert’s sale motion representing PHA’s debts arising out of the two loans and the swap agreement. By November 2012, the proceeds of the sale had satisfied PHA’s debts to Wells Fargo and the principle of PHA filed a motion to dismiss the Chapter 11 proceedings, which the bankruptcy court granted. More than a year later, PHA filed a suite alleging that the interest-rate-transaction was a “sham” because “the LIBOR rate was illegally rigged and manipulated.” Wells Fargo filed a motion to dismiss, which the district court granted on res judicata grounds, giving preclusive effect to the bankruptcy’s sale order. PHA appealed.
Under the doctrine of res judicata, or claim preclusion, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action. Pueschel v. United States, 369 F.3d 345, 354 (4th Cir. 2004). For res judicata to apply, three elements must be satisfied. There must be: (1) a final judgment on the merits in a prior suit; (2) an identity of the cause of action in both the earlier and the later suit; and (3) an identity of parties or their privies in the two suits. Id. at 354–55. In addition to the three elements, the court must consider whether the party or its privy knew or should have known of its claims at the time of the first action, and second, whether the court that ruled in the first suit was an effective forum to litigate the relevant claims. Grausz v. Englander, 321 F.3d 467, 473–74 (4th Cir. 2003).
Despite PHA’s argument that the sale orders were not “on the merits,” the Court did not find their argument convincing and found the cases from sister circuits that the lower court relied on persuasive. The appointed trustee moved to sell property in satisfaction of specifically identified obligations arising out of PHA’s transactions with Wells Fargo, and the bankruptcy court approved those sales. According to the Court, it would make little sense after the sales were made, the debt settled, and the bankruptcy proceeding closed, to then allow PHA to challenge in a new judicial proceeding the propriety of the transactions giving rise to its now-extinguished debt. This would go against the purpose of res judicata—to promote finality. Because the sale orders arose out of the same nucleus of facts as PHA’s claim in the case on appeal—the circumstances surrounding the three agreements between PHA and Wells Fargo—the Court determined the second prong had been met. Regarding the third prong, the Court recognized that there was no dispute between the parties that the appointed trustee was in privity with the debtor as representative of the debtor’s bankruptcy estate. Once the Court determined that the elements of res judicata had been met, they then determined that because PHA offered no argument that the trustee could not effectively litigate in bankruptcy court, therefore the Grausz, factors had also been satisfied.
Accordingly, the Court affirmed the judgement of the district court.
Aleia M. Hornsby
PEABODY HOLDING CO., LLC v. UNITED MINE WORKERS OF AMERICA, NO. 14-2032
Decided: March 8, 2016
The Fourth Circuit vacated and remanded the district court’s ruling.
The dispute in this case arises out of a contract signed by the United Mine Workers of America (“the Union”) and Peabody Coal Company. An arbitration clause in the contract provided that a “Jobs Monitor” would resolve any disputes involving the contract and that the decisions would be “final and binding on all parties” to the dispute. After Peabody Holding initiated a spinoff and formed a new entity, the Union alerted the Companies they were still bound by the initial contract. The entities claimed the spinoff ended their obligations. The dispute was submitted to the Jobs Monitor and the parties decided to bifurcate the issues to first resolve the questions of liability. The Jobs Monitor ruled in favor of the Union.
Appellants Peabody Holding Company, LLC and Black Beauty Coal Company, LLC seek to vacate the arbitrator’s decision against them by filing a declaratory judgment action. The Union filed a counterclaim to enforce the decision and dismiss the Companies’ complaint by arguing the judicial review of the Job’s Monitor’s decision was not proper until arbitration was complete. The district court denied the Union’s motion to dismiss due to disagreement as to the nature of the complete arbitration rule but granted the Union’s motion for summary judgment by enforcing the arbitrator’s decision as to the liability decision.
The issue in case calls for a straightforward application of the complete arbitration rule, which provides that a federal court should refrain from reviewing an arbitrator’s decision until all facets of the dispute have been decided. Here, the labor arbitrator first decided the liability questions but retained jurisdiction to decide remedial questions at a later date. The Companies argue, however, that the complete arbitration rule should not apply because the parties decided to bifurcate their dispute into separate liability and remedial proceedings, therefore allowing judicial review of the labor arbitrator’s liability decision.
The Court ruled that bifurcation of the issues does not change the fact that the parties agreed to submit the entire dispute to arbitration. Because arbitration plays a critical role in our nation’s system of labor relations and the arbitration provision was freely and contractually entered into, the Court held that a federal court should withhold review of the arbitrator’s decision until the remedial questions have been ruled on as well.
Accordingly, the Court vacated the district court’s ruling and remanded to the arbitrator for further proceedings.
PAC TELL GROUP, INC. v. NLRB, No. 15-1111
Decided: December 23, 2015
The Fourth Circuit denied the Respondent’s motion to review and affirmed the Petitioner’s motion for cross-application of the National Labor Relations Board’s order.
In this appeal, the Fourth Circuit considered the National Labor Relations Board’s (the Board) determination that four individual employees of U.S. Fibers (the employer), who were engaged in pro-union activity before a union election within the company, were not supervisors within the meaning of the National Labor Relations Act (the Act). The Court held that the Board’s decision was supported by substantial evidence, upheld the Board’s conclusion that setting aside the results of the election was not appropriate under the circumstances of the case, denied U.S. Fibers’ petition for review of the Board’s final order, and granted the Board’s cross-application for enforcement of its order.
At issue in this case was the question of whether four U.S. Fibers employees occupied supervisory status in their roles with Respondent, U.S. Fiber. If the employees were deemed to have held supervisory positions as it is defined in the Act, then their participation in the union election would have been grounds for setting aside the results of the election. Although the employees at issue were designated by management as “supervisors,” the Board held that the putative supervisors did not exercise supervisory roles that barred them from participation in the union activities and rejected the employer’s alternative contention that the results of the election should be set aside under the Board’s standard for third-party objectionable conduct.
Following the election and despite the Board’s order, the employer refused to recognize or engage in collective bargaining with the union. In the employer’s view, the results of the election should be set aside due to the employees’ supervisory roles within the company. As a result, the Board filed a complaint against the employer, alleging that the employer had engaged in unfair labor practices under federal law and ultimately ordered the employer to cease and desist its unfair practices and to recognize the bargain with the union, as set forth in the Board’s final order. The employer subsequently filed a petition for review.
In reviewing the Board’s order, the Fourth Circuit outlined its standard of review that allowed for the Board’s order to be set aside only if the Board had “clearly abused its discretion” and made clear that it would defer to the Board’s factual determinations, absent substantial abuse, even if the Fourth Circuit may have reached a different result in the first instance. Furthermore, the Court made clear that the burden of proving supervisory status of the employees under the Act rested on the employer.
In opposition to the Board’s order, the employer relied on four supervisory functions enumerated in the Act that disqualified them from participating in union activities; that is, exercising the authority to assign, reward, discipline, and responsibly direct employees. However, despite the employees in this case possessing some level of each of these enumerated functions, the Act makes clear that putative supervisors’ “exercise of such authority [cannot be of] a merely routine or clerical nature, but requires the use of independent judgment and their authority must be held in the interest of the employer.” For these reasons, the Court dismissed, in turn, each of the employer’s claims for the supervisory nature of the employees’ employment. The Court upheld the Board’s determination that the employees were not exercising their own independent judgments and were acting instead in the interest of the employer or under the employer’s strict instructions.
Furthermore, the Fourth Circuit dismissed the employer’s alternative claim that the election still should be set aside under the standard for objectionable conduct by third-party employees set out under the Act. While the employer contended that the employees in question threatened other employees to the extent of being so “aggravated as to create a general atmosphere of fear and reprisal rendering a free election impossible,” which would have clearly violated the Act, the Court found no evidence to support this contention. Instead, the Court agreed with the Board’s determination that the employees’ challenged statements concerning the potential for employer layoffs did not “meet the rigorous standard for objectionable third-party conduct” as described in the Act.
Accordingly, U.S. Fibers’ contentions were dismissed and the Board’s motion for the application of its orders were affirmed.
NESTLE DREYER’S ICE CREAM CO. v. NLRB, No. 14-2222
Decided: April 26, 2016
The Fourth Circuit denied Respondent’s petition for review and granted Petitioner’s cross-petition for enforcement of its order.
Nestle Dreyers (Dreyers), an ice cream factory stationed in California, employed two types of workers, production staff who focused on the production of the ice cream, and maintenance staff who focused on the maintenance of the machinery used to produce the ice cream. These groups of workers share many similarities; however, they also maintain several distinctions from each other. In 2011, the International Union of Operating Engineers Local 501, AFL-CIO (the Union) filed a petition with the National Labor Relations Board (the Board) seeking to represent the maintenance employees of the factory. Dreyers objected to the proposed unit, arguing that it should also include the production employees. The Board’s Regional Director approved the maintenance-only unit over Dreyer’s objections and denied Dreyer’s request for review. After the maintenance employees voted in favor of joining the Union, Dreyers refused to participate in collective bargaining with the Union. In response, the Union filed an unfair-labor-practices charge with the Board. The Board granted summary judgment to the Union and Dreyers filed this appeal.
The National Labor Relations Act (NLRA) requires the Board to determine the unit appropriate for the purposes of collective bargaining. In making its determination, the Board exercises “the widest possible discretion” and may approve any appropriate unit; it need not identify and select the single most appropriate unit. Therefore, a challenger to a Board’s unit determination has the burden of proving that the bargaining unit selected by the Board is “utterly inappropriate.” However, the NLRA does prohibit the Board from blindly deferring to a union’s proposed unit. In order to follow the NLRA, the Board has traditionally employ a several-factor test that ultimately asks whether “employees in the requested unit share a sufficient community of interest to be included in the same unit.”
The Fourth Circuit upheld the Board’s determination and concluded that, after a thorough analysis of the facts, the Board correctly applied the relevant community-of-factors test in determining not only that the maintenance employees share a community of interest amongst themselves, but also that the maintenance employees formed a distinct group from production employees. The Union applied the test correctly in determining that the maintenance employees were distinct from the production employees because they formed their own department, had different job classifications, had different skills, and performed different functions from production employees. Moreover, maintenance employees had more technical knowledge than the production employees and were required to have more experience than the production employees.
Accepting the Board’s determination that the exclusion of the production employees from the maintenance employees’ union and that the Union applied the correct framework in determining whether or not to exclude the production employees, the Fourth Circuit denied Dreyer’s petition for review and granted the Board’s cross-petition for enforcement of its prior order.
MENA v. LYNCH, NO. 15-1009
Decided: April 27, 2016
The Fourth Circuit granted the petition.
Francisco Mena is a native and citizen of the Dominican Republic who was admitted to the United States as a lawful permanent resident. An immigration judge (IJ) ordered the plaintiff’s removal based on his two convictions of crimes involving moral turpitude not arising out of the same criminal scheme. During Mena’s immigration proceedings, Mena applied for cancellation of removal, a form of relief that is available to aliens who have not been convicted of an “aggravated felony” based on 8 U.S.C. §1229b(a)(3). The Immigration and Nationality Act (INA) states an aggravated felony is a theft offense with a term of imprisonment of at least one year. Mena had a prior conviction for violation of 18 U.S.C. § 659, which creates four offenses, each set out in a separate paragraph. The first paragraph relates to the illegal taking by embezzlement or theft of certain property that has moved in interstate or foreign commerce. The second paragraph relates to purchases, receipt, or possession of property that was embezzled or stolen. Mena was convicted under this second paragraph and was sentenced to a 60-month imprisonment term. The IJ concluded that Mena’s conviction under § 659 is an aggravated felony, and therefore the IJ pretermitted Mena’s cancellation of removal application. The Board of Immigration Appeals (BIA) dismissed Mena’s appeal as it viewed § U.S.C. § 1101(a)(43)(G) to contain two types of offenses that qualify as an INA aggravated felony: theft offense and receipt of stolen property which is contained in the parenthetical appended to the term “theft offense.” The plaintiff filed a petition to the Fourth Circuit to review the BIA’s decision.
The court used a categorical approach to determine if Mena’s prior conviction qualified as an INA aggravated felony. The prior conviction constitutes an aggravated felony if it has the same elements as the generic INA crime but, if the statute of conviction sweeps more broadly and criminalizes more conduct than the generic federal crime, the prior conviction cannot count as an aggravated felony. The court looked at its earlier opinion in Soliman v. Gonzales where it stated a theft offense requires the essential element of the taking of property without consent. Mena’s argument was that his conviction under the second paragraph of § 659 for receipt of embezzled property, and the crime of embezzlement involves a taking of property with the owner’s consent and therefore, is not a “theft offense” under the categorical approach. The BIA found Soliman inapplicable because it the aggravated felony statute contains not only “theft offenses” but also “the receipt of stolen property” which has different elements than theft offenses and does not require taking property without consent. The BIA based this distinction on its prior opinion in In re Cardiel-Guerrero where the BIA observed extorted property falls within the generic meaning of “receipt of stolen property” under § 1101(a)(43)(G). The BIA also relied on a survey of state theft statues that supported BIA’s view that receipt of embezzled property is included in the generic definition of a “theft offense” under § 1101(a)(43)(G). The court disagreed with BIA and stated that embezzlement involves property that came into the wrongdoer’s hands with the owner’s consent. Accordingly, the court said that a conviction for receipt of an embezzled property under § 659 does not fall within § 1101(a)(43)(G)’s theft offense definition. Therefore, Mena’s crime sweeps more broadly than a § 1101(a)(43)(G) theft offense, and is not an INA aggravated felony under the categorical approach. Mena’s conviction under the second paragraph of § 659 is not a “theft offense” (including receipt of stolen property) under § 1101(a)(43)(G). Therefore, the court granted Mena’s petition for review and remanded the case for further proceedings.
Judge Wilkinson dissented from the majority opinion because the judge considered embezzlement to be included as theft under the generic language of § 1101(a)(43)(G).
UNITED STATES v. ALVARADO, NO. 14-4338
Decided: March 7, 2016
The Fourth Circuit affirmed the decision of the district court.
Alvarado was sentenced to 20 years imprisonment and a 3-year term of supervised released for heroine distribution resulting in death in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(C). On March 30, 2011, Eric Thomas died from an overdose. A drug screen of Thomas’s blood and urine revealed high levels of metabolized heroine, as well as a therapeutic level of Xanax. The police identified Alvarado as Thomas’s heroine supplier using text messages from Thomas’s phone. In response to police questioning, Alvarado admitted to selling heroine to Thomas the day before Thomas died.
Alvarado contends the district court erred when it failed to clarify to the jury the results-in-death element was not satisfied if heroine was only a contributing cause of Thomas’s death and that Alvarado had to have “reasonably foreseen” that death court result. Alvarado also argued that the lower court erred when it admitted hearsay testimony that Thomas said he purchased heroine from Alvarado.
The Court rejected all of Alvarado’s arguments. First, the Court found that because there was no evidence in the record that Thomas could have died without the heroine, the jury’s verdict was consistent with the but-for causation requirement. As such, the district court’s failure to clarify the standard did not amount to an abuse of discretion. Next, the court concluded that the district court did not have to instruct the jury about the foreseeability of death based on the decision in United States v. Patterson, 38 F.3d 139 (4th Cir. 1994). Finally, the Court held that the district court did not commit reversible error in admitting the hearsay testimony because its admission was harmless if it wasn’t admissible and the testimony did not violate Alvarado’s Sixth Amendment rights because the hearsay was not testimonial.
Accordingly, the Court affirmed Alvarado’s conviction and sentence.
D.D. ex. rel. GRIMM v. GLOUCESTER CNTY. SCH. BD., NO. 15-2056
Decided: April 19, 2016
The Fourth Circuit reversed the district court’s dismissal of the plaintiff’s Title IX claim and vacated and remanded its denial of plaintiff’s motion for a preliminary injunction.
Plaintiff was promised and subsequently denied access to the boy’s restroom as his school in Gloucester County after he informed the school that he is a transgender male. As a result, plaintiff brought suit against the Gloucester County School Board under Title IX and sought a preliminary injunction to allow him to use the boy’s restroom. The district court dismissed the case and denied the injunction. The plaintiff appealed both decisions and asked the Court to assign the case to a different judge on remand based on the judge’s comments during the district hearing.
The Court identified the primary question at issue as being whether Title IX requires schools to provide transgender students access to restrooms based on their gender identity. Section 34 C.F.R. 106.33, a regulation implementing Title IX, permits the provision of separate restrooms on the basis of sex. The Department of Education’s Office for Civil Rights interpreted how 34 C.F.R. § 106.33 should be applied to transgender individuals. The Office stated that “[w]hen a school elects to separate or treat students differently on the basis of sex . . . a school generally must treat transgender students consistent with their gender identity.” The Court found that the district court erred when it chose not to provide the Office’s interpretation of the regulation with appropriate deference under Auer v. Robbins, 519 U.S. 452 (1997). The court determined Auer deference was appropriate because it determined that § 106.33 was ambiguous as it applied to transgender individuals and the agency’s interpretation of the regulation was not plainly erroneous.
Next, the Court addressed the district court’s decision to deny the plaintiff’s motion for an injunction. The district court denied the motion based on reasoning that it would not be unduly burdensome for the plaintiff to use unisex bathrooms. The Court found this decision was based on “erroneous legal principals” because it evaluated the plaintiff’s evidence against a stricter evidentiary standard than is warranted for a preliminary injunction. Accordingly, the Court reversed and remanded the motion to be evaluated under appropriate evidentiary standards.
Finally, the Court did not reassign the case to a new judge on remand because it did not find any evidence indicating the judge’s conduct violated the required standard under United States v. Guglielmi, 929 F.2d 1001, 1007 (4th Cir. 1991).
UNITED STATES V. UNDER SEAL, NO. 15-4265
Decided: March 30, 2016
The Fourth Circuit affirmed the district court’s decision denying the Government’s motion to transfer the Defendant for prosecution as an adult for murder in aid of racketeering.
When he was a few months shy of his eighteenth birthday, the Defendant allegedly participated in a gang-related murder. The Government filed a motion to transfer the Defendant, who was a juvenile at the time of the alleged offense, for prosecution as an adult for murder in aid of racketeering. This crime carries a mandatory statutory penalty of either death or life imprisonment. The district court denied the Government’s motion after concluding that the prosecution would be unconstitutional given that recent Supreme Court decisions have held that the United States Constitution prohibits sentencing juvenile offenders to either of these punishments.
The Juvenile Justice and Delinquency Prevention Act permits juveniles 15 years or older to be transferred from juvenile status for prosecution as an adult if they are alleged to have committed certain violent crimes, including murder. In Roper v. Simmons, 543 U.S. 551 (2005), the Supreme Court held that the Constitution’s guarantee against cruel and unusual punishment prohibited juvenile offenders from being sentenced to death. In Graham v. Florida, 560 U.S. 48 (2010), the Supreme Court held that the Constitution also prohibits juvenile offenders convicted of nonhomicide offenses from being sentenced to life imprisonment without parole. The Supreme Court also held in Miller v. Alabama, 132 S. Ct. 2455 (2012), that the Constitution prohibits juvenile offenders who commit murder from being sentenced to mandatory life without parole. Life imprisonment is the mandatory minimum punishment for the offense of murder in aid of racketeering. Thus given the recent Supreme Court decisions, the crux of the case was whether a judicial remedy existed that would nonetheless allow juveniles to be prosecuted for this offense, yet subjected to a punishment different from that enacted by Congress. The Government asked that the unconstitutional sections of the statute be severed, but once these unconstitutional punishments are removed for purposes of prosecuting juveniles, no applicable penalty provision remains. The Government further argued that the punishments set forth for kidnapping in the same statute should be applied to murder in this scenario. The Court found that the Government’s proposal differed from an appropriate remedy of severance and excision, and instead usurped the constitutional allocation of the power to write a statute to Congress. Thus accepting the Government’s argument would be nothing less than judicial legislation pure and simple. Furthermore, grafting a newly applicable penalty provision into the murder in aid of racketeering statute would run counter to the Constitution’s guarantee of due process, given the lack of notice that would arise.
Accordingly, the Court affirmed the district court’s decision that the Defendant could not be prosecuted for murder in aid of racketeering because his conviction would require the court to impose an unconstitutional sentence.
Katie E. Lowery
UNITED STATES V. LINNEY, NO. 14-4847
Decided: April 26, 2016
The Fourth Circuit affirmed the district court’s ruling that the two burglaries that served as part of the predicate for Linney’s Armed Career Criminal Act (“ACCA”) sentencing enhancement occurred on different occasions.
On August 8 and 9, 2013, Linney and two companions engaged in a crime spree that started with a pair of burglaries and ended with a high-speed police chase. When the pursuing officers eventually captured Linney and his companions, they learned that Linney had been in possession of a 9-mm handgun, but had one of his companions toss it out the window during the chase. On August 21, 2013, a federal grand jury charged Linney with being a felon in possession of a firearm. In anticipation of Linney’s sentencing hearing, a probation officer prepared a presentence report (“PSR”). The PSR took note of three North Carolina burglary convictions Linney had previously received and accordingly classified Linney as an armed career criminal under the ACCA—a classification that came with a fifteen-year mandatory minimum sentence. The PSR recommended a sentence for Linney that included 188 to 235 months of incarceration. Linney argued that two of the burglaries noted in the PSR occurred on the same occasion and thus both could not be used to support the ACCA enhancement. Linney contended that the burglaries were committed at neighboring houses during a largely overlapping three-hour time period, and that they shared the same nature and objective. The district court held that the two burglaries were distinct, as they involved different victims, different locations, and different times. The district court sentenced Linney to 235 months of incarceration.
A defendant found guilty of violating the felon in possession prohibition is subject to the ACCA fifteen-year mandatory minimum sentencing enhancement if he has three previous “violent felony” convictions. For Linney to receive the ACCA enhancement, therefore, each of the three North Carolina burglaries must also have been committed on occasions different from one another. The Court relied on five factors to determine whether the predicate ACCA offenses were committed on different occasion: (1) whether the offenses “arise in different geographic locations”; (2) whether “the nature of each offense was substantively different”; (3) whether each offense “involved different victims; (4) whether each offense “involved different criminal objectives”; and (5) whether “the defendant had the opportunity after committing the first-in-time offense to make a conscious and knowing decision to engage in the next-in-time offense.” The burglaries occurred at two distinct street addresses, which means that they occurred at different geographic locations. Likewise, the burglaries involved different victims.
Accordingly, the Fourth Circuit affirmed the district court’s ruling that the two burglaries occurred on different occasions.
Katie E. Lowery
MATHERLY V. ANDREWS, NO. 14-7691
Decided: March 16, 2016
The Fourth Circuit affirmed the district court’s determination that the Adam Walsh Act was not impermissibly applied retroactively to Matherly. However, the Fourth Circuit reversed the district court’s grant of summary judgment to the government on Matherly’s claim that he was not in custody when the certification proceedings were initiated, and remanded for further proceedings on this issue.
The Adam Walsh Act authorizes the civil commitment of sexually dangerous persons who are in the custody of the Bureau of Prisons. If, after a hearing, the district court finds by clear and convincing evidence that the person is a sexually dangerous person, the court commits the person to the custody of the Attorney General, either for release to a state civil commitment system or to a federal facility until it is determined that the person is no longer sexually dangerous to others. In October 2003, Matherly pled guilty to one count of possession of child pornography and was sentenced to 47 months imprisonment. With prior time served, and assuming that he earned the good time credit, Matherly was eligible to be released to supervision on November 22, 2006. On that same day, however, the government certified Matherly as a sexually dangerous person under 18 U.S.C. § 4248, automatically staying his release from the custody of the Bureau of Prisons. On May 3, 2012, following an evidentiary hearing, the district court found that Matherly was a sexually dangerous person under the Act and ordered that he be committed to the custody of the Attorney General. The Fourth Circuit Court of Appeals affirmed. On April 1, 2013, Matherly filed a petition for a writ of habeas corpus, alleging that the Adam Walsh Act had been impermissibly applied retroactively to him and that, in any event, he was not in the custody of the Bureau of Prisons within the meaning of the Act when the government filed the certification. The government moved to dismiss the petition or, in the alternative, for summary judgment, which the district court granted.
When determining whether a statute has been impermissibly applied retrospectively, the Court engages in a three-step inquiry. First, the Court must determine whether Congress has expressly prescribed the statute’s proper reach. If so, the inquiry ends there. If not, the Court must decide whether the statute would operate retroactively. If the Court determines that the statute does have a retroactive effect, the Court will not apply it absent clear congressional intent favoring such a result. In applying these three steps, the Court found that Congress sufficiently expressed its intent that the Adam Walsh Act apply to all persons in the Bureau of Prison’s custody who would pose a current threat to the public if released. Likewise, the Court found that the statute clearly did not have retroactive effect, as it simply uses prior acts solely for evidentiary purposes to support a finding of a person’s mental abnormality or future dangerousness. The Act addresses dangers that arise postenactment. Matherly also claimed that his civil commitment was improper because the Bureau of Prisons had already released him from its legal custody when the government filed the certification. Matherly was released from custody on November 22, 2006 at 9:20 a.m.. Forty-eight minutes later, at 10:08 a.m., the civil commitment proceedings were commenced. The Court found that the Bureau of Prisons records submitted by Matherly showing this forty-eight minute time gap were insufficient by themselves to demonstrate that the Bureau of Prisons relinquished its legal authority over Matherly prior to the government’s filing of the certification. The Court found that there was a need to better develop the record, and the district court should be given the opportunity to make additional findings and conclusions in light of such developments.
Accordingly, the Court affirmed the district court’s grant of summary judgment to the government on Matherly’s retroactivity claim. However, the Fourth Circuit reversed the district court’s grant of summary judgment to the government on Matherly’s claim that he was not in custody when the certification proceedings were initiated, and remanded for further proceedings on this issue.
Katie E. Lowery
24TH SENATORIAL DIST. REPUBLICAN COMM. V. ALCORN, NO. 15-1478
Decided: April 19, 2016
The Fourth Circuit affirmed the district court’s dismissal of plaintiffs’ and plaintiff-intervenor’s complaints, as the Committee lacked standing to bring the suit.
The Republican Party of Virginia (the “Party”) is governed pursuant to its Plan of Organization (the “Plan”). According to the Plan, Legislative District Committees (“LDCs”) are unincorporated associations designated pursuant to the Plan that “determine whether candidates for Legislative District public office shall be nominated by Mass Meeting, Party Canvass, Convention or Primary, where permitted to do so under Virginia Law.” The 24th Senatorial District Republican Committee of Virginia is the LDC responsible for determining the method of nomination for candidates seeking the Republican nomination for the 24th Senatorial District for the Virginia General Assembly. In December 2014, the Committee exercised its authority under the Plan and adopted a resolution designating a convention as the method of nominating the Republican candidate for the 24th Senate District seat in the 2015 election. On February 23, 2015, incumbent state senator Emmett Hanger relied on the authority granted him by the Incumbent Protection Act and designated a primary as the method of nomination. The Committee subsequently filed suit against the members of the Virginia State Board of Elections and the Virginia Department of Elections seeking declaratory and injunctive relief. The Committee’s complaint alleged that the Act infringes on its First Amendment right to freedom of association by preventing it from determining the method of nomination in contravention of the terms of the Plan. Defendants filed a motion to dismiss, which the district court granted, holding that the plaintiffs failed to meet their burden to establish standing.
The record before the district court was sufficient to decide the jurisdictional question. Not only did the record contain the complete Party Plan, the district court undertook a thorough and exacting review of it. Moreover, the Committee and the Commonwealth both clearly represented to the district court that there were no issues of disputed fact. Therefore, because the proper construction of the Plan is a question of law and the record before the district court was sufficient, the Court concluded that jurisdictional discovery was not necessary. Whether the Committee has standing depends on whether its alleged injury was the result of the Act or a lawful and voluntary decision on behalf of the Party. The Court held that the Party limited its authority to determine unilaterally the method of nomination through its adopting of the Party Plan, which reads, “The Legislative District Committee shall determine whether candidates for Legislative District public office shall be nominated by Mass Meeting, Party Canvass, Convention or Primary, where permitted to do so under Virginia Law.” If the Party had intended to preserve its ability to unilaterally choose the method of nomination for legislative districts, it could have done so. Thus, the Plan delegates to the Committee the authority to determine the nomination method unless Virginia law otherwise limits that authority. Where Virginia law sets forth an alternative method of nomination, the Plan does not give the Committee the authority to supersede or challenge that determination.
The Fourth Circuit therefore affirmed the district court’s holding that the Committee lacked standing to bring the suit.
Katie E. Lowery
JANE DOE #1 v. BLAIR, No. 15-1211
Decided: March 21, 2016
The Fourth Circuit reversed the district court’s ruling and remanded the case for further proceedings.
In March 2014, Jane Doe #1, through her next friends and guardians Ben and Kelly Houndersheldt, filed a complaint against Matt Blair (“Blair”) and Res-Care, Inc. (“Res-Care”). In July 2014, Res-Care removed the case to federal court, asserting subject matter jurisdiction based on diversity of citizenship. In the removal notice, Res-Care asserted that Jane Doe #1 was a Virginia resident, Blair was a West Virginia resident and that it was incorporated in Kentucky. The notice did not allege, however, the state in which Res-Care had its principal place of business. In January 2015, the district court sua sponte remanded the case to state court on the basis that diversity jurisdiction was lacking due to the absence of some assertion as to Res-Care’s principal place of business. Blair then, joined with Res-Care, filed a motion under Federal Rules of Civil Procedure 59(e) and 60 to alter or amend and for reconsideration. Blair noted that no party challenged the court’s jurisdiction and that the parties determined that Res-Care’s principal place of business was Louisville, Kentucky. Plaintiffs did not oppose this motion. The district court denied the motion and Res-Care and Blair timely appealed to the Fourth Circuit.
The Fourth Circuit began by determining whether it has jurisdiction to review the district court’s remand order. The Court determined that a sua sponte remand order for lack of subject matter jurisdiction may be issued at any time and is not reviewable under Title 28 U.S.C. §1447(d). The Court also determined that a remand order based on a defect other than lack of subject matter jurisdiction must be effected by granting a timely filed motion. Furthermore, the Court determined if such an order is entered without a motion, it does not bar review. Therefore, the Court determined that its jurisdiction to review the remand order depended on whether the order was based on lack of subject matter jurisdiction or a procedural defect. The court then reasoned, based on decisions from three other circuits, that failure to establish a party’s citizenship at the time of removal was a procedural defect, not a jurisdictional defect. By examining the substantive reasoning behind the order, the Court determined that the district court’s order was based on a procedural defect. Therefore, the Court reasoned that the district court’s order fell outside the scope of Title 28 U.S.C. §1447(c) and thus could be reviewed. Furthermore, the Court reasoned that because the district court’s order fell outside the scope of §1447(c), the district court lacked the authority to order remand. Due to the district court’s lack of statutory authority, the Fourth Circuit reversed the district court’s remand order and remanded this case to district court for further proceedings. Additionally, the Court granted Res-Care’s motion to amend its removal notice pursuant to 28 U.S.C §1653.
Accordingly, the Court reversed the judgment of the district court and remanded the case for further proceedings.
Michael W. Rabb
GALLOWAY v. SANTANDER CONSUMER USA, INC., No. 15-1392
Decided: April 8, 2016
The Fourth Circuit affirmed the district court’s order.
Jacqueline Galloway (“Galloway”) entered into a retail installment contract (“RISC”) in order to finance her purchase of a vehicle in March 2007. The RISC was assigned to CitiFinancial Auto, LTD. (“CitiFinancial”). Galloway was supposed to make 72 payments of $487.46 on the 17th day of every month. Sometime before October 31, 2008, Galloway contacted CitiFinancial about reducing the amount of her monthly loan payment. CitiFinancial sent her an amended agreement to sign and once she signed it, the company would review her request. Galloway reviewed and signed the amended agreement for the RISC, which contained terms reducing her monthly payment. The amended agreement also contained an arbitration agreement which allowed CitiFinancial to elect to arbitrate any dispute rather than passing through the court system. There is nothing in the record that CitiFinancial ever sent Galloway written approval of the amended agreement, but Galloway reported a decrease in her monthly payments sometime after November 14, 2008. There was an 86-cent discrepancy between the amount contemplated in the amended agreement and the amount Galloway reported. Galloway paid and continued to pay the lower monthly payments for several years. In December 2011, CitiFinancial assigned the security interest in the vehicle to Santander Consumer USA, Inc. After Galloway fell behind on payments, Santander repossessed her car, sold it and eventually waived the deficiency. Galloway subsequently brought this action in state court. The action was later removed to federal district court where Santander moved to compel arbitration under the Federal Arbitration Act (“FAA”) based on the amended agreement. The district court determined that Galloway was bound to the agreement and gave an order compelling arbitration. The district court entered a final judgment dismissing the case so as to allow Galloway to pursue an immediate appeal.
The Court reviewed the district court’s decision de novo. The Court stated that application of the FAA requires demonstration of four elements. The second element, a written agreement that includes an arbitration provision that purports to cover the dispute, is the only element at issue here. Galloway contended that there was a factual issue as to whether the arbitration provision was a term of any contract that she and CitiFinancial entered into. The court disagreed and found as a matter of law that the amended agreement signed and sent by Galloway to CitiFinancial constituted an offer to enter into an agreement, not an acceptance. Furthermore, the Court found that the offer was accepted when CitiFinancial lowered the amount of Galloway’s monthly payment. The court found that the 86-cent difference between the amended agreement and the payment Galloway was given constituted a counter offer that Galloway accepted by making the payments for several years. While there was no explicit acceptance, the Court found that Galloway’s conduct could be interpreted as assent to the terms of the amended agreement. The Court held that a signature was not necessary and that the writing element of the FAA was satisfied in this case. The Court also disagreed with Galloway’s argument that the arbitration agreement was not enforceable. The Court reasoned that the writing requirement was satisfied because there was a physical embodiment of the underlying legal obligations and as such the written assent was not necessary. The Court stated that all that was required was that the arbitration provision be in writing.
Accordingly, the judgment of the district court is affirmed.
Michael W. Rabb
HENSON v. SANTANDER CONSUMER USA, INC., No. 15-1187
Decided: March 23, 2016
The Fourth Circuit affirmed the district court’s dismissal.
Four Maryland consumers, Ricky Henson, Ian Glover, Karen Pacouloute, and Paulette House, each entered into a retail installment sales contract with CitiFinancial Auto Credit, Inc. or one of its affiliates to finance an automobile purchase, and all four subsequently defaulted. On December 1, 2011, Santander Consumer USA, Inc., (“Santander”) purchased $3.55 billion in loan receivables, including the plaintiff’s defaulted loans, from Citifinancial Autos Credit, Inc., and thereafter began to try to collect on those debts. In November 2012, the four consumers brought action againsts Santander, alledging that Santander attempted to collect the debts in a manner which violated the Fair Debt Collection Practices Act (“FDCPA”). When the district court dismissed the claims against Santander on the ground that the complaint failed to demonstrate that Santander engaged in the alleged collection practices as a “debt collector,” as required to bring an FDCPA claim, the four plaintiffs appealed.
In their appeal, the plaintiffs argue that the default status of the debt is determinative of whether a debt purchaser is a “debt collector” or a “creditor.” Their argument is based on language found in the exclusion to the definition of “creditor” in § 1692a(4) of Title 15 of the United States Code, as well as language used in the exclusions to the definition of “debt collector” found in the § 1692a(6)(F), which both specifically reference whether or not the debt is in default when it is transferred. The Court, however, found this interpretation to be logically flawed and contrary to the plain text of the statute. According to the Court, the plaintiffs’ first error is in looking to the exclusions without first considering the statutory definitions in the main text. Instead, the structure of § 1692a(6) clearly indicates that any assessment as to whether a person is a “debt collector” must first determine whether that person satisfies the definitions in the main text before considering the exclusions found in subsequent subsections, and if that person does not fall under one of those definitions, the exclusions need not be considered at all. It follows then, that the material distinction is whether Santander is a “creditor” or a “debt collector” the collection of the debt is for itself or on the behalf of others, respectively.
Applying this interpretation to the alleged facts, the Court found that the plaintiffs’ complaint failed to show that Santander satisfied any of the three statutory definitions of a “debt collector,” because it instead showed that: Santander’s principal business was as a consumer finance company, not to collect debt; Santander was not using a name other than its own to collect debt; and Santander was collecting debt owed to it because it became the entity to which the debt was owed when it purchased the plaintiff’s debts. Thus, according to the Court, the analysis should end there, regardless of the default status of the debts. Consequently, because the plaintiffs failed to demonstrate that Santander was a debt collector as defined in § 1692(a) at the time it was collecting on the plaintiffs’ debts, the Court affirmed the district court’s dismissal of the claims.
HARBOURT v. PPE CASINO RESORTS MD, LLC, NO. 15-1546
Decided: April 25, 2016
The Fourth Circuit reversed and remanded the district court’s dismissal.
Pursuant to the legalization of gambling in Maryland and a November 2012 referendum that authorized casinos to begin operating table games, such as blackjack, poker and craps, on April 11, 2013, PPE Casino Resorts Maryland, LLC (“the Casino”) planned to open about 150 table games at Maryland Live!, the casino they owned and operated in Hanover, Maryland. Knowing that it needed to hire and train nearly 830 dealers to operate the planned tables, the Casino developed a required training program called “dealer school,” and began advertising employment opportunities for table game dealers. Claudia Harbourt, Michael Lukoski, and Ursula Pocknett (collectively “the Plaintiffs”), were among those extensively interviewed and ultimately selected to attend the “dealer school.” However, only Lukoski attended the “dealer school” for the entire twelve weeks and worked as a dealer at the Casino. Harbourt and Pocknett were not paid at all, but Lukoski received minimum wage of $7.25 per hour, for the last two days of “dealer school.” In 2014, the Plaintiffs filed suit claiming that the Casino had violated the Fair Labor Standards Act (“FLSA”), as well as various Maryland wage laws, but the district court granted the Casino’s motion to dismiss for failure to state a claim upon which relief can be granted.
Under the FLSA, employers must pay employees minimum hourly wage for all hours worked. As the Court notes, the Supreme Court has interpreted “work” as any physical or mental exertion required by and primarily for the benefit of the employer and his business. In the only Fourth Circuit case to address the issue, McLaughlin v. Ensley, the Court relied on the Supreme Court’s decision in Wailing v. Portland Terminal Co. that a trainee could be considered an “employee” for purposes of the FLSA, and held that whether or not a trainee constitutes an employee depends on whether the trainee or the employer is the “primary beneficiary” of the training.
When looking at the present case, the Court decided that examination of the Plaintiffs’ complaint alone could not resolve the question as to who primarily received the benefit of the training, and pointed out various facts alleged by the Plaintiff that could lead a reasonable fact finder to the conclusion that the Casino was the primary beneficiary. For instance, based on the alleged fact that, as a result of the “dealer camp,” the Casino had a trained workforce of over 800 dealers ready to operate the table games on the day they became legal, a fact finder could find that the Casino received a substantial and immediately benefit for the training. Also, the Casino advertising that the training program was associated with a community college when, as the Plaintiffs allege, no such association existed could demonstrate to a fact finder that the Casino developed the “dealer school” in order to avoid paying the minimum wage. Accordingly, the Court held that the Plaintiffs alleged sufficient facts to raise question as to whether or not, for the purposes of the FLSA, the trainees constitute employees who performed work, and therefore reversed and remanded the district court’s decision.
GROVES v. COMMC'N WORKERS OF AM., NO. 14-1854
Decided: March 10, 2016
The Fourth Circuit affirmed the district court’s decision.
In December 2008, Rebecca Groves and Jonathan Hadden (the “employee-plaintiffs”) began working as retail sales consultants for AT&T in Anderson, South Carolina, and both became members of Communication Works of America (“CWA”). As the exclusive bargaining representative for Groves, Hadden and other members of the union, CWA entered into a collective bargaining agreement with AT&T on March 27, 2010 that remained effective until February 7, 2014. The agreement, which both employee-plaintiffs attended an orientation on (though only Groves recalls receiving a copy), contained a provision concerning the required grievance procedure for allegations of employee termination without just cause.
After having received earlier disciplinary warnings, both employee-plaintiffs were fired in the spring of 2012 as a result of their failure to meet sales goals. A few months later, AT&T discovered that April and May 2012 reports on which sixteen employee terminations were based, including Groves and Hadden’s, were flawed, and consequently AT&T was offering a settlement of either reinstatement along with $2,500, or just $5,000 without reinstatement. CWA did not make any attempt to contact the employee-plaintiffs because they had not filed a grievance nor communicated with CWA in any way. When the plaintiff-employees independently found out about the settlement offers and contacted CWA, their desired offer of $2,500 with reinstatement was no longer available. Consequently, the employee-plaintiffs filed suit against CWA under § 301 of the Labor Management Relations Act, claiming that CWA’s failure to inform them of the offers constituted a breach of the union’s duty of fair representation. However, the district court granted CWA’s motion for summary judgment, holding that the employee-plaintiffs failed to satisfy the threshold requirement of a § 301 claim.
On appeal, the Court considered whether or not conduct by a union that obstructed but did not contribute to the employees’ failure to exhaust all possible contractual remedies for an employer’s action can be properly challenged by a hybrid § 301 claim. Looking to both the Supreme Court’s framing of a hybrid § 301 action in Vaca v. Sipes, as well as relevant cases from sister circuits, the Court held that a hybrid § 301 claim requires both allegation that the union’s conduct breached its duty of fair representation and that such conduct prevented the employee from exhausting his contractual remedies. However, here the employee-plaintiffs do not allege that the CWA prevented them from filing grievances concerning their terminations, and thus by not grieving their terminations, the employee-plaintiffs were not entitled to AT&T’s offer under the collective bargaining agreement. It follow then that CWA’s conduct was not the cause of the employee-plaintiffs failure to exhaust their contractual remedies, and without that causal link, the Court held, there is no basis of a hybrid § 301 suit. Thus, the Court affirmed the district court’s decision to grant summary judgment to CWA.
DUCKETT v. FULLER, NO. 15-6568
Decided: April 25, 2016
The Fourth Circuit reversed the district court’s ruling and remanded the case for further proceedings.
In April 2013, Plaintiff, Lewis Duckett, and 15 other inmates at Kershaw Correctional Institution sued the South Carolina Department of Corrections and others, alleging that the food served to him was so deficient as to violate his Eighth Amendment rights. The “Class Action Complaint” alleged that the prison authorities “failed to serve food satisfying recommended minimum daily amounts of vitamins and nutrients; that they served insufficient portions; and that they misrepresented food as beef when it was actually made from ground poultry offal and organs.” The district court ruled that the case be severed into sixteen separate actions. After the severance of the action, Duckett paid the filing fee and supplemented his claim. The district court dismissed Duckett’s complaint on the state defendant’s Rule 12(b)(6) motion, concluding that Duckett was barred by the doctrine of res judicata even after the magistrate judge’s recommendation “‘that neither res judicata or collateral estoppel bar[red] the plaintiff’s complaint.’” The court concluded that Duckett’s complaint was essentially the same as a 2010 complaint that had been dismissed on the merits and that Duckett was in privity with Plaintiff McFadden in the prior case. The district court explained “The claims are at their core identical, and thus qualify as the same cause of action. To allow this claim to go forward would mean relitigating the same issues this court litigated in [the earlier suit]. This goes against the principles behind res judicata.”
On appeal, Duckett argued that he was not bound by the 2010 suit because he was not a party to it, he never had his day in court, and he had no meaningful way of participating in the 2010 suit. Generally, a person is precluded from relitigating the claim if he has had the opportunity to litigate the claim. “The doctrine of res judicata, or claim preclusion, is applied to bar a suit in light of a prior judgment when three elements are demonstrated: (1) that ‘the prior judgment was final and on the merits, and rendered by a court of competent jurisdiction in accordance with the requirements of due process’; (2) that ‘the parties are identical, or in privity, in the two actions’; and (3) that ‘the claims in the second matter are based upon the same cause of action involved in the earlier proceeding’ i.e., the claims ‘arise out of the same transaction or series of transactions, or in the same core of operative facts.’” Taylor v. Sturgill stated that a person is not bound by the judgment of another claim if the person was not a designated party. The Fourth Circuit concluded that the 2010 suit did not bind Duckett because he was not a party to the 2010 suit and he had not been served in that action. The Court noted Duckett could be bound by the 2010 judgment if he fit into one of the exceptions in Taylor. The Taylor court identified six exceptions to the general rule: (1) “a nonparty who agrees to be bound by a judgment in an action ‘“is bound in accordance with the terms of his agreement”’”; (2) “a nonparty may be bound by a judgment ‘based on a variety of pre-existing substantive legal relationships’ between the nonparty and a party in the action, such as ‘preceding and succeeding owners of property, bailee and bailor, and assignee and assignor’”; (3) “a nonparty may be bound by a judgment when the nonparty was adequately represented in the action by a party with the same interests, such as in ‘properly conducted class actions, suits brought by trustees, guardians, and other fiduciaries’”; (4) “a nonparty is bound by a judgment if the nonparty ‘“assumed control” over the litigation in which that judgment was rendered’”; (5) “‘a party bound by a judgment may not avoid its preclusive force by relitigating through a proxy,’ making preclusion ‘appropriate when a nonparty later brings suit as an agent for a party who is bound by a judgment’”; and (6) “‘in certain circumstances a special statutory scheme may “expressly foreclose successive litigation by nonlitigants . . . if the scheme is otherwise consistent with due process.”’” The Court concluded that Duckett did not fit within exception 1, 3, 4, or 6 because there was not evidence that Duckett agreed to be bound by the 2010 judgment, that McFadden represented Duckett, that Duckett assumed control over McFadden’s 2010 suit, or that Duckett’s action implicated a special statutory scheme limiting relitigation. The Court also concluded that exception 2 did not apply because there was no evidence that there was a substantive legal relationship between Duckett and McFadden. Finally, the court concluded that exception 5 did not apply because Duckett paid the filing fee and supplied the court with his own account of the nature of his personal injuries. Therefore, Duckett was not bound by the 2010 judgment and Duckett was not precluded from pursuing his own similar claims in this action.
Accordingly, the Court reversed the judgment of the district court and remanded for further proceedings.
Alicia E. Morris
DELL WEBB COMMUNITIES, INC. v. CARLSON, No. 15-1385
Decided: March 28, 2016
The Fourth Circuit reversed, vacated, and remanded the district court’s holding.
Roger and Mary Jo Carlson entered into a sales agreement with PulteGroup, Inc. and its subsidiary Del Webb Communities, Inc. (together “Pulte”) for the purchase of a lot and construction of a home in Hilton Head, South Carolina. The agreement contained an arbitration clause. Following the Carlsons’ attempt to arbitrate class-action claims against Pulte under the agreement, and Pulte’s efforts to limit arbitration to the Carlsons’ claims, the district court held that the availability of class-action arbitration under an arbitration agreement is a procedural question for the arbitrator to decide, rather than a question for the court.
In response to the district court’s dismissal of the claims, the Fourth Circuit held that because the primary goal in enforcing an arbitration agreement is to “discern and honor party intent, and because of the fundamental differences between bilateral and class arbitration—which change the nature of arbitration altogether— [the question of whether] parties agree to class arbitration is a gateway question for the court.” As such, the Court remanded the case for the district court “to determine whether the arbitration clause permits class arbitration.”
The facts of the case are not in dispute. Following the Carlsons’ signing of the agreement containing the arbitration clause, the Carlsons filed suit against Pulte and two other parties that raised claims of construction defects in the construction of their house. Later, the Carlsons moved to amend their complaint to add class-action allegations because their claim was one of approximately 140 like cases pending against Pulte.
Despite the Carlsons’ objections, the Fourth Circuit ruled that the claim was appropriate for federal jurisdiction. In reviewing the district court’s holding regarding whether or not an arbitration agreement allows for class-action claims, the Fourth Circuit turned to the Supreme Court. The Fourth Circuit noted that the Court has not conclusively ruled on who gets to decide whether an arbitration agreement provides for class arbitration; however, the Court has provided by some guidance. As pointed out by the Fourth Circuit, the evolution of Supreme Court holdings on this issue have formulated the rule that “whether an arbitration agreement authorizes class arbitration presents a question as to the arbitrator’s power, which requires judicial review.” Moreover, the Fourth Circuit adopted the rule that whether an arbitration agreement authorizes class actions is a question of arbitrarily, which is a question for the court.
Accordingly, because the contract between the parties in this case made no mention of whether class actions would be allowed, the Fourth Circuit held that the district court erred in concluding that the question was a procedural one for the arbitrator. Therefore, the Fourth Circuit reversed the district court’s order denying Pulte’s motion for partial summary judgment, vacated the judgment dismissing the petition, and remanded the case for further proceedings in determining whether class arbitration was appropriate. In its conclusion, the Fourth Circuit tasked the district court with determining whether the parties agreed to class arbitration.
CUMBERLAND CNTY. HOSP. SYS., INC. v. BURWELL, NO. 15-1393
Decided: March 7, 2016
The Fourth Circuit affirmed the district court’s ruling.
Appellant Cumberland County Hospital Systems, Inc., (“the Hospital System”) commenced this action to obtain a writ of mandamus compelling the Secretary of the Department of Health and Human Services to adjudicate immediately its administrative appeals on claims for Medicare reimbursement. In 2012 and 2013, the Secretary denied payment to the Hospital System on over 900 claims (amounting to $12.3 million) for reimbursement for Medicare services that she had initially authorized. The Secretary has not acknowledged receipt of some of the appeals and for others has reported a delay of over two years. Because the funds are necessary to the Hospital System’s operations, it brought this claim asserting that over 750 appeals await assignment to an Administrative Law Judge (“ALJ”) and violate congressional mandate 42 U.S.C. § 1395ff(d)(1)(A) that states the appeals must be heard and decided by an ALJ within 90 days.
Both parties agree the Secretary has over 800,000 appeals awaiting assignment to an ALJ, creating a ten-year backlog. While acknowledging the unacceptability of the backlog, the Secretary attributes it to an increased number of appeals within the Medicare system and inadequate funding by Congress to hire additional personnel. The Health System contends the backlog is mainly due to the Secretary’s mismanagement of HHS resources.
To show the Hospital System is entitled to mandamus relief, a plaintiff must show it has a “clear and indisputable right to the relief sought” and that the responding party has a “clear duty to do the specific act requested.” The Court agreed that the delay in the administrative process for Medicare reimbursement is incontrovertibly grotesque and that the Act gives the Hospital System the clear and indisputable right to the administrative process. However, the Court held that the Medicare Act does not give a clear and indisputable right to adjudication of its appeals before an ALJ within 90 days, as the Hospital System claims. Furthermore, the issuance of a judicial order directing the Secretary to hear the claims in the middle of the administrative process would unduly interfere with the process and work of the political branches. It would also invite other healthcare providers suffering similar delays to seek a mandamus order, thereby causing the judicial process to replace and distort the agency process.
Because the Court affirmed the district court’s conclusion that the Hospital system failed to state a claim upon which mandamus relief could be granted, it accordingly dismissed the Hospital System’s declaratory judgment claim that the delay of adjudication violated federal law.
Accordingly, the Court affirmed the district court’s ruling.
BELMORA LLC v. BAYER CONSUMER CARE AG, No. 15-1335
Decided: October 27, 2015
The Fourth Circuit concluded that the district court erred in reversing the U.S. Trademark and Appeal Board’s decision to cancel Belmora’s registration for the FLANAX mark based on deceptive use, and in dismissing Bayer Consumer Care AG’s false association and false advertising claim. Therefore the court vacated and remanded the case for further proceedings.
Since the 1970’s, Bayer Consumer Care AG (“BCC”) owned the trademark “FLANAX” in Mexico and sold naproxen sodium pain relievers under that mark in Mexico and other parts of Latin America. Belmora LLC owned the FLANAX trademark in the United States and used it in the U.S. since 2004 in the sale of its naproxen sodium pain relievers. BCC and its U.S. sister company Bayer HealthCare LLC (“BHC,” and collectively with BCC, “Bayer”) contend that Belmora used the FLANAX mark to deliberately deceive Mexican-American consumers into thinking they were purchasing BCC’s product. Belmora’s early FLANAX packaging closely mimicked BCC’s Mexican FLANAX in color scheme, font size and type face; Belmora made statements that its FLANAX brand was the same FLANAX produced by BCC in Mexico; and Belmora hired telemarketers to state that Belmora was “the direct producers of FLANAX in the U.S. and that “FLANAX is a very well known medical product in the Latino American market, For FLANAX is sold successfully in Mexico.” Bayer pointed to evidence that these actions by Belmora resulted in Belmora’s distributors, vendors, and marketers believing that its FLANAX was the same or affiliated with BCC’s FLANAX. Thus Bayer filed a petition with the U.S. Trademark Trial and Appeal Board (“TTAB”) to cancel Belmora’s registration, and also filed claims for false association and false advertising.
In dismissing Bayer’s false association and advertising claim, the district court concluded that 1) Bayer’s claims fell outside the Lanham Act’s “zone of interest”—and [were] not cognizable—“because Bayer does not possess a protectable interest in the FLANAX mark in the United States,” and 2) that a “cognizable economic loss under the Lanham Act” cannot exist as to a “mark that was not used in the United States commerce.” However, the Fourth Circuit determined that the district court conflated the Lanham Act’s infringement provision in § 32, with unfair competition claims pled under § 43. The plain language of § 43 does not require that a plaintiff possess or have used a trademark in U.S. commerce as an element of the cause of action. Under this section, it is the defendant’s use in commerce—Belmora’s FLANAX mark—that creates the injury under the terms of the statute.
What § 43(a) does require is that Bayer was “likely to be damaged” by Belmora’s “use  in commerce” of its FLANAX mark and related advertisement. The Supreme Court, in Lexmark International, Inc. v. Static Control Components, Inc., established two background principles to determine if a person met the “likely to be damaged” element of § 43(a). First the plaintiff’s claim must fall within the zone of interest. Second, the statutory cause of action must be limited to plaintiffs whose injuries were proximately caused by violations of the statute. The Fourth Circuit concluded that BCC adequately pled a § 43(a) false association claim for purposes of the zone of interest prong because Belmora’s misleading association with BCC’s FLANAX caused BCC customers to buy the Belmora FLANAX in the US instead of purchasing BCC’s FLANAX in Mexico, which caused BCC to loose revenue. Furthermore, by deceiving distributors and vendors, Belmora made FLANAX more available to consumers, which further exacerbated BCC’s losses. The Court further concluded that BCC meet the second requirement of proximate cause because BCC identified economic or reputational injury flowing directly from the deception wrought by Belmora’s conduct. Lastly, because the district court misinterpreted the language of the Lanham Act, the Fourth Circuit concluded that Bayer was entitled to bring its cancellation claim.
Accordingly, the Court vacated the district court’s judgement and remanded the case for further proceedings.
Aleia M. Hornsby
ACLU OF NORTH CAROLINA v. TENNYSON, No. 13-1030
Decided: March 10, 2016
The Fourth Circuit reversed and remanded the judgment of the district court with instructions that the district court enter judgment in favor of the state.
The state of North Carolina offers a specialty license plate program that offers a “Choose Life” plate. The state refuses, however, to offer a pro-choice license plate. Several organizations brought a lawsuit against the state of North Carolina alleging that the state violated the First and Fourteenth Amendments with this program. The district court found for the plaintiffs and issued an injunction prohibiting the state from issuing “Choose Life” plates without offering a pro-choice plate. The state appealed the decision of the district court to the Fourth Circuit arguing that the program was government speech and therefore it was permissible for it to engage in viewpoint discrimination when administering the plate program. The Fourth Circuit affirmed the district court holding that the First Amendment was violated. The state appealed to the United State Supreme Court which vacated the decision of the Fourth Circuit and remanded the case for reconsideration in light of a new decision in a Texas case, Walker v. Texas Div., Sons of Confederate Veterans, Inc., 135 S. Ct. 2239 (2015), that addressed the same issue.
In Walker, a Texas state license program was determined by the Supreme Court to be government speech. The Fourth Circuit determined that the license program in this case is indistinguishable from the program in Walker. Therefore, the Court determined that the state of North Carolina is free to reject license plate designs that convey messages with which it disagrees.
Accordingly, the judgment of the district court is reversed and remanded with instructions.
Michael W. Rabb
IT’S MY PARTY, INC. v. LIVE NAT., INC., NO. 15-1278
Decided: February 4, 2016
The Fourth Circuit affirmed the district court’s ruling.
Plaintiff It’s My Party, Inc. (IMP) brought suit on March 5, 2009, alleging that defendant Live Nation, Inc. (LN) violated § 1 and § 2 of the Sherman Antitrust Act by engaging in monopolization, tying arrangements, and exclusive dealing in the music concert industry. IMP is geographically limited as a regional player that promotes concerts and works with venues in the Washington D.C. and Baltimore areas. LN is a national promoter that provides services throughout the country. Both parties also operate outdoor amphitheaters with IMP managing the Merriweather Post Pavilion in Columbia, Maryland, and LN owning the Nissan Pavilion in Bristow, Virginia. The district court denied LN’s motion to dismiss in July 2009, and an initial motion for summary judgment without prejudice in August 2012. Following briefing and argument, the court granted summary judgment in LN’s favor in February 2015. The district court granted LN’s summary judgment motion based on it declining to adopt IMP’s definition of the promotion market and excluding IMP’s portion of its expert analysis defining the venue market. The district court found there was insufficient evidence that LN engaged in monopolization, tying, or any other anticompetitive behavior. Because the plaintiff failed to define the relevant markets or to demonstrate any anticompetitive conduct, the Fourth Circuit affirmed.
The plaintiff has the burden of defining the market that defendant is accused of monopolizing. This case has two separate but related markets: the market for concert promotion and the market for concert venues. IMP wanted to bolster its claim by arguing for a national market to make IMP’s regional outlet appear modest as compared to LN’s appearance of market power through a nationwide network of promoters and venues. The Court found the market for shows is highly localized so promoters need to target their advertising to the area surrounding a particular venue. This localized market promotion meant that the competition between IMP and LN was a battle only for the Washington-Baltimore area, thus IMP is on equal footing and on its own turf. IMP’s definition of the venue market failed because it limited the venues in a way that only included IMP and LN, distorting the actual market. The lack of a defined market, weakened IMP’s tying and monopolization claims. The tying argument failed because while LN tied performances at Nissan with other LN’s promotion services, IMP could not show LN buyers were coerced into taking the combined package. The Court gave a number of reasons why a buyer would want a combined package without coercion being present. IMP’s last claim boiled down to the argument that LN’s national size rose to the level of monopolization. The Court said this argument would not work as it would punish successful companies and result in any national based company being subject to anti-trust attacks. And even with LN large size, IMP was not put into a position where they could not be competitive as the record showed IMP was able to double its profits from 2006 to 2012.
Accordingly, the Court affirmed the judgment of the district court.
NAT’L FED’N OF THE BLIND v. LAMONE, NO. 14-2001
Decided: February 9, 2016
The Fourth Circuit affirmed the district court’s ruling, which found that Maryland’s absentee voting program did not comport with ADA and Rehabilitation Act requirements, and further found that plaintiffs’ proposed remedy—the use of an “online ballot marking tool” that would enable disabled voters to mark their ballots electronically—was a reasonable modification that did not fundamentally alter Maryland’s absentee voting program.
Maryland allows any voter to vote via absentee ballot. A voter may obtain a blank hardcopy absentee ballot by mail, fax, or by downloading and printing one from a website. The hardcopy ballot must be marked by hand, signed, and returned via mail or hand-delivery to the voter’s local election board. Plaintiffs, the National Federation of the Blind and individual disabled Maryland voters, sued state election officials under Title II of the Americans with Disabilities Act (“ADA”) and Section 504 of the Rehabilitation Act. Plaintiffs alleged that marking a hardcopy ballot by hand without assistance was impossible for voters with various disabilities, and that they had therefore been denied meaningful access to absentee voting. Plaintiffs sought both a declaratory judgment to that effect as well as an injunction requiring state election officials to make an online ballot marking tool available for use starting with the 2014 general election. The district court found that the plaintiffs had established that they had been denied meaningful access to absentee voting in Maryland in violation of the ADA and the Rehabilitation Act, and thus entered a declaratory judgment to this effect. The district court entered a permanent injunction prohibiting defendants from violating plaintiffs’ rights and requiring defendants to make an online ballot marking tool available to plaintiffs for the 2014 general election.
To show a violation of Title II of the ADA, one of the elements plaintiffs must show is that they were denied the benefits of a public service, program, or activity on the basis of their disability. Plaintiffs argued that the proper way to define the scope of the program at issue was to focus on Maryland’s absentee voting program, while defendants argued that the scope should be defined broadly and the voting program should be looked at in its entirety, encompassing the various voting alternatives—including in-person voting—available to Maryland voters. The Court found that it is far more natural to view absentee voting, rather than the entire voting program, as the appropriate object of scrutiny for compliance with the ADA and the Rehabilitation Act. In determining whether absentee voting was accessible to disabled individuals as required by statute and implementing regulations, the Court found that Maryland’s absentee voting program does not provide disabled individuals an opportunity to participate equal to that afforded others. The Court noted the importance of the policy behind such regulations. Ensuring that disabled individuals are afforded an opportunity to participate in voting that is equal to that afforded others helps ensure that those individuals are never relegated to a position of political powerlessness. By effectively requiring disabled individuals to rely on the assistance of others to vote absentee, defendants have not provided plaintiffs with meaningful access to Maryland’s absentee voting program. Since an online ballot marking tool had already been developed by Maryland, the plaintiffs’ proposed use of the tool is a reasonable modification to Maryland’s absentee voting policies and procedures. The Court further agreed with the district court that defendants have not met their burden to show that plaintiffs’ proposed modification—use of the online ballot marking tool—would fundamentally alter Maryland’s voting program. The tool is reasonably secure, safeguards disabled voters’ privacy, and has been used in actual elections without apparent incident.
Accordingly, the Court affirmed the judgment of the district court.
Katie E. Lowery
GRAYSON v. ANDERSON, Nos. 14-1991 and 14-1997
Decided: March 7, 2016
The Fourth Circuit affirmed the judgments of the district court.
Beginning in 1997, plaintiffs were victims of a massive, South Carolina-centered Ponzi scheme as a result of fraudulent loans secured by the victim’s stock. Borrowers would offer stock as collateral in exchange for a loan equaling up to 90% of the stock’s value from a company called Derivium. Unbeknownst to the borrowers, Derivium was using the borrower’s stock in high-risk venture capital investments that eventually failed. Derivium was thus unable to pay the borrowers back their investment. Derivium went bankrupt in 2005 and victims of the fraud began commencing actions against it that eventually resulted in a favorable $150 million judgment.
There are two separate appeals in this case that were consolidated by the Fourth Circuit for this ruling. These appeals stem from Alan M. Grayson, AMG Trust & Grayson Consulting, Inc. (“Plaintiffs”), who brought suit against several others who they claim also participated in the scheme. The Plaintiffs first brought suit against Vision International People Group, P.L. (“Vision”), a cypress-based company, which the district court dismissed for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). The Plaintiffs brought a second set of claims against Randolph Anderson, Patrick Kelley and Total Eclipse International Ltd. (“Defendants”), which was dismissed on a motion for judgment as a matter of law at trial by the district court on the grounds that the cause of action was not recognized by South Carolina courts.
In regards to the first suit against Vision, the Plaintiffs argued that the district court erred in not conducting an evidentiary hearing to review the conflicting evidence. The Plaintiffs further argued that the district court erred by requiring them to meet a higher standard by imposing a preponderance of the evidence standard in demonstrating jurisdiction. They argued that the standard should be a prima facie showing of jurisdiction viewed in the light most favorable to the plaintiffs. The court determined that there was no deficiency in the process the district court undertook in evaluating the motion. The district court did hold a hearing, and no party ever claimed the record was inadequate, that relevant evidence was missing, or that it was unable to fairly present its position. Furthermore, the court determined that the Plaintiffs ultimately had to establish facts supporting jurisdiction over Vision by preponderance of the evidence. The court also affirmed the decision of the district court on the “merits” of the Fed. R. Civ. P. 12(b)(2) motion. The court held that Vision lacked the necessary contacts and activities to bring it within the realm of personal jurisdiction. Furthermore, the court held that the officers of Vision involved in the scheme were doing so out of the scope of their employment with no connection to Vision.
In regards to the second suit filed against Defendants, the Plaintiffs argued that the district court erred in holding as a matter of law that the causes of action that were brought did not exist under South Carolina law. Plaintiffs argue that the South Carolina Supreme Court established these common law claims in Connelly v. State Co. The court held that this reading of Connelly was incorrect. The court reasoned that the language that Plaintiffs rely on as establishing these common law claims was not in the Supreme Court’s opinion, but in trial court’s opinion and was not adopted in its holding. The court concluded that it was unable to find any South Carolina cases that held that aiding and abetting common law fraud would constitute a cause of action in South Carolina.
Accordingly, the court affirmed the judgment of the district court.
Michael W. Rabb
GENTRY v. E. W. PARTNERS CLUB MGMT. CO., INC., NO. 14-2382
Decided: March 4, 2016
The Fourth Circuit affirmed the district court’s ruling.
In July 2007, Plaintiff, Judith Gentry fell at work, injuring her foot and ankle. Gentry then filed for workers’ compensation benefits. In October 2008, Gentry had to have surgery and her doctor concluded that she had a thirty percent permanent physical impairment to her ankle. The insurance carrier offered to settle Gentry’s claim, but Gentry declined. In November 2010, Gentry’s workers’ compensation claim was settled and in December 2010, Gentry was terminated. Defendant stated that Gentry was terminated as part of a restructuring plan to reduce costs. However, Gentry sued Maggie Valley and East West for (1) disability discrimination under the ADA and North Carolina common law; (2) sex discrimination under Title VII and North Carolina common law; and (3) retaliation against Gentry for pursuing a workers’ compensation claim, in violation of North Carolina common law. Gentry also sued East West and Manner, her boss, for tortiously interfering with her employment contract with Maggie Valley. At trial, Gentry was awarded $10,000 for the workers’ compensation claim and $10,000 for Defendant’s tortiously interfering with Gentry’s employment. However, the jury found in favor of the Defendants on all of the other claims. Gentry moved for a new trial, which the district court denied.
On appeal, Gentry argues that the district court incorrectly instructed the jury on the causation standard for disability discrimination claims under the ADA. The district court instructed the jury on a “but-for” standard but Gentry argued that the jury should have been instructed on a motivating factor standard. The Court, relying on Gross v. FBL Financial Services, Inc., concluded that Title VII’s motivating factor standard could not be read into Title I of the ADA and that the district court correctly applied a “but-for” standard. Gross instructed courts to follow closely to the text of employment discrimination statutes. Further, the Court concluded that a “but for” causation standard was required because the legislative history did not suggest that “on the basis of” was intended to mean something other than “but-for” causation.
Also, Gentry challenged the district court’s instructions on the definition of disability. The ADA defined disability as “(A) a physical or mental impairment that substantially limits one or more major life activities of [an] individual; (B) a record of such an impairment; or (C) being regarded as having such an impairment.” Gentry disputed the definition of “substantially limits” and the court’s instructions on “regarded as” and “record of” disability. The Court concluded that Gentry did not show that the instruction affected her substantial rights because the jury could have found that her termination was not the result of the impairment to her foot, regardless of how severe. Further, the Court concluded that the trial court did not abuse its discretion in this instruction and that no serious prejudice to Gentry warranted vacating the verdict on her disability discrimination claims. Finally, Gentry argued that the district court improperly shortened the definition of “record of” disability. However, the Court concluded that there was no error because Gentry did not object to the instruction.
Gentry further argued that the district court erred in refusing to admit evidence of Defendants’ liability insurance and indemnification. The jury was instructed that it could award damages for back pay, front pay, emotional pain and suffering, and nominal damages. The jury was also instructed that Gentry had to mitigate her damages using reasonable diligence. Gentry argued that the award was tainted because of the Defendants’ belaboring of their poor financial condition. However, the Court concluded that the evidence was central to their defense that Gentry was terminated as part of a plan to reduce costs. Additionally, the Court concluded that there was no abuse in the refusal to admit evidence of the insurance coverage and indemnification.
Finally, Gentry argued that she was entitled to a new trial on damages because the award was inadequate. To grant a new trial Gentry needed to show that (1) the verdict was against the clear weight of the evidence, or (2) was based upon evidence, which was false, or (3) would result in a miscarriage of justice. The Court concluded that Gentry did not meet this burden because the jury could have inferred that Gentry’s salary would have decreased as part of the plan to reduce costs. The jury could have also found that she did not mitigate her damages when she obtained a part time job. Therefore, the Court affirmed the district court’s denial of Gentry’s motion for a new trial.
Accordingly, the Court affirmed the judgment of the district court.
Alicia E. Morris
STAHLE v. CTS CORP., NO. 15-1001
Decided: March 2, 2016
The Fourth Circuit reversed and remanded the district court’s ruling.
Appellant Kent Stahle was diagnosed with leukemia and alleges that appellee CTS Corporation (CTS) was negligent in dumping toxic chemicals from an Asheville manufacturing plant into a local stream. Stahle argues that through exposure to the contaminated stream water during his childhood at property located downstream from the plant, the toxic chemicals eventually caused his leukemia. The district court dismissed Stahle’s complaint, holding that the 10-year statute of repose in Section 1-52(16) barred his action. At issue in this appeal is the scope of 1-52(16), which is commonly referred to as North Carolina’s Discovery Rule. The statute tolls the running of the statute of limitations for torts resulting in “latent injuries” although such actions remain subject to the 10-year statute of repose provision.
Federal jurisdiction in this matter rests in diversity, so the governing state law is applied. Because the Supreme Court of North Carolina had not explicitly ruled on the applicability of the statute of repose to disease claims, the Fourth Circuit instead must analyze the previous relevant case law decided by the Supreme Court of North Carolina to anticipate how it would rule. Consequently, the Fourth Circuit understood that under North Carolina law a disease is not a “latent injury,” and concluded that the Supreme Court of North Carolina would not find the 10-year statute of repose applicable to Stahle’s claim.
Specifically, the previous case law expressed a distinction between latent injury claims and those including disease due to the characteristics of disease as a general phenomenon. Unlike a latent injury, the legal injury and awareness of a disease occur simultaneously at diagnosis. The case law also specified that disease claims are not to be included within the statute of repose unless the Legislature expressly includes it.
The Supreme Court of North Carolina has explained that when the language of a statute is clear and without ambiguity, it’s plain meaning is applied. CTS argued that 1-52(16) is facially unambiguous and therefore applied to Stahle’s disease claims. This argument eventually supported the district court’s holding. However, while North Carolina courts are guided by the principle of “plain meaning,” the district court focused narrowly on the isolated text of subsection 16 to determine its plain meaning, while the Supreme Court of North Carolina “does not read segments of a statute in isolation.” The Fourth Circuit analyzed the overall scheme of North Carolina’s statutory limitations and repose statutes and determined that 1-52(16) appears plainly to apply to only some-but not all- personal injury claims, which supports the decision that a disease is not a latent injury. The appellee’s argument was further weakened by the fact that previous case law had held 1-52(16) to be ambiguous on its face.
Because the Supreme Court of North Carolina considers Section 1-52(16) only applicable to certain latent injuries, and because disease is not a latent injury, the Fourth Circuit held the statute of repose in Section 1-52(16) inapplicable to Stahle’s claim.
Accordingly, the Court reversed and remanded the district court’s ruling.
UNITED STATES v. COWLEY, NO. 15-6067
Decided: February 29, 2016
The Fourth Circuit held that the appeal from defendant, Shane Cowley was properly before the court because a certificate of appealability (“COA”) is not required to appeal the denial of an Innocence Protection Act (“IPA”) motion brought pursuant to 18 U.S.C. §§ 3600-3600A. However, the Fourth Circuit ultimately affirmed the district court’s ruling that Cowley’s motion was untimely under the IPA.
In August 2000, a jury convicted Cowley on four different counts in conjunction with the attempted robbery and murder of Jeff Stone. The district court sentenced Cowley to forty-five years’ imprisonment. Cowley directly appealed his conviction and sentence. After the district court was affirmed, he appealed pursuant to 28 U.S.C. § 2255. That appeal was denied. In 2006, the IPA became law and allowed federal prisoners to move for court-ordered DNA testing under certain specified conditions. Cowley’s last appeal proceeding concluded in 2006, yet, he did not file a IPA motion until June 2014. In his motion, Cowley requested DNA testing for several items found at the crime scene, including spent casings from a 9mm and a .40 caliber gun. Cowley also attached affidavits from eight people that supported his alibi and pointed to four other people who could have committed the crimes. The district court denied Cowley’s motion and held that it was untimely. The district court also denied a COA.
The Fourth Circuit held that the appeal was properly before the court despite the district court’s denial of a COA and the court’s decision not to issue a COA. The court looked to the plain meaning of the IPA and also to other circuits interpretation of the IPA to determine whether an COA is required for a IPA motion. Ultimately, the court held that an appeal from the denial of an IPA motion is not subject to a COA requirement.
The Fourth Circuit then affirmed the district court’s denial of the IPA motion for it’s untimeliness. The IPA has ten requirements that must be met before the motion can be granted. One of the requirements mandates that the IPA motion be made within sixty months of enactment of the IPA or within thirty-six months of conviction, whichever is later. If it is not filed within that time, it is presumed untimely. The presumption can only be rebutted if one of the four exceptions apply. Cowley argued that the “good cause” exception and the “manifest injustice” exception applied in his case. The Fourth Circuit reviewed the district court’s rejection of these arguments and found the court did not abuse its discretion. The Fourth Circuit found the district court was correct in concluding that the “good cause” exception did not apply because incarceration alone is not enough to show good cause for untimely filing. The court also upheld the district court’s ruling that the “manifest injustice” exception did not apply because Cowley’s explanation that he was incarcerated and unable to hire an investigator was not adequate.
Accordingly, the Court affirmed the judgment of the district court.
Cate E. Cardinale
UNITED STATES ex rel. BEAUCHAMP v. ACADEMI TRAINING CTR., NO. 15-1148
Decided: February 25, 2016
The Fourth Circuit vacated the portion of the district court’s order dismissing plaintiff’s weapons qualification claims under the public disclosure bar and remanded for further proceedings.
In 2005, the U.S. Department of State hired defendant, Academi, as a contractor to provide security services for embassy workers stationed across the Middle East. Their agreement required Academi’s workers to maintain proficiency with several firearms and to submit marksmanship scores to the State Department on a regular basis.
Plaintiffs, serving as relators under the False Claims Act, 31 U.S.C. §§ 3729-3733 (“FCA”), filed their complaint with the Eastern District of Virginia on April, 2011, alleging that Academi submitted false reports to the State Department. On May 24, 2011, plaintiffs filed their first amended complaint, which included additional allegations that Academi fraudulently billed the State Department for security services performed by contractors who had not been tested for, or achieved, requisite marksmanship scores.
While this first-amended complaint was pending, two former firearms instructors contacted plaintiffs’ counsel with additional information about the weapons qualification scheme and filed a separate complaint against Academi alleging wrongful termination. See Winston v. Academi Training Ctr. Inc., No. 1:12cv767, ECF No. 1 (E.D. Va. July 12, 2012). The Winston complaint, which was made available to the public, detailed Academi’s failure to comply with the marksmanship testing requirements. The information included in the complaint generated a significant amount of publicity. On November 19, 2012, the plaintiffs in this case filed a second-amended complaint, which expanded the allegations as to the weapons qualification scheme by adding paragraphs from the Winston complaint.
The district court granted Academi’s motion to dismiss plaintiffs’ qui tam actions based on the public disclosure bar provided by the post-2010 amended version of the FCA. The district court found the publicity generated by the instructor’s complaint qualified as a public disclosure under the statutory scheme. Relying on Rockwell International Corp. v. United States, 549 U.S. 457 (2007), it further concluded that the most recent complaint was the proper pleading for analysis for purposes of the statutory timing benchmark. Since the public disclosure occurred before plaintiff’s most recent amended complaint, the district court held the public disclosure bar applied to plaintiffs’ claims.
The Court found that the district court misinterpreted Rockwell when it adopted the view that only the most recent pleading should control the public-disclosure bar’s timing. The Court reasoned that in Rockwell, the Supreme Court only focused on the relator’s last pleading because that was where the relevant fraud had been pled. As such, the district court should have evaluated the relevant fraud claim under the pleading that first alleged the fraud in this case, which was the first amended complaint.
The Court rejected Academi’s argument that that second-amended complaint was the first pleading that described with specificity the weapons qualification scheme. Instead, the court held that the facts alleged in the first-amended complaint were sufficient for purposes of the public disclosure bar. As such, because the first-amended complaint was filed before the Winston complaint and the publicity generated from the Winston complaint, the Court held public disclosure bar was not triggered in this case.
Finally, the Court also held that another FCA case, U.S. ex. rel. Davis v. U.S. Training Ctr., Inc., No. 1:08cv1244 (E.D. Va. Filed Dec. 1, 2008) did not trigger the public disclosure bar, nor was is a preclusive first-filed action, because it alleged fraud claims that were distinct and unrelated to the weapons qualification scheme at issue in this case.
Accordingly, the Court vacated and remanded the judgment of the district court.
PORNOMO v. UNITED STATES, NO. 14-2391
Decided: February 25, 2016
The Fourth Circuit concluded that the district court correctly dismissed the case for lack of subject matter jurisdiction, therefore affirming the judgment of the district court.
Petitioner, Jonathan Pornomo filed a wrongful death claim under the Federal Tort Claims Act (“FTCA”) after his mother was killed on May 31, 2011, when a bus driver fell asleep at the wheel and allowed the bus to go off the road and into an embankment. The accident occurred during a 10-day extension period that the bus company had been given after receiving an “unsatisfactory” safety rating by the Federal Motor Carrier Safety Administration (“FMCSA”) approximately seven weeks prior to the incident. Based on the law at the time of the accident, a commercial motor carrier who received an “unsatisfactory” rating did not have to cease operation immediately, but instead received a 45-day provisional period—in which they could request an upgrade of its rating by submitting a written description to FMCSA of corrective actions taken—before the rating becomes final. In 2011, the regulation also provided that “if the motor carrier has submitted evidence that corrective actions have been taken…and the FMCSA cannot make a final determination with the 45-day period, the period before the proposed safety rating becomes final may be extended for up to 10 days at the discretion of the FMCSA.” 49 C.F.R. § 385.17(f) (2011).
On May 11, the bus company submitted a Request for Change to Proposed Safety Rating. The following day the FMCSA concluded that the bus company had failed to provide adequate evidence that it had corrected all of the safety violations. As a result, the FMCSA decided to conduct a follow up compliance review, whereby they would provide additional time—10 days—to conduct the follow-up compliance review. The Petitioner alleged that FMCSA had been negligent in issuing the 10-day extension. Arguing that the 10-day extension was a discretionary act shielded from suit under the discretionary function exception to the FTCA, the United States filed a motion to dismiss for lack of subject matter jurisdiction. The district court found that the plain language of 49 C.F.R. § 385.17(f) afforded the agency discretion to provide an extension, therefore the court granted the United States’ motion.
On appeal, Petitioner contends that the district court erred in holding that the extension was a discretionary act. To determine if the discretionary function exception did in fact apply, the Court applied a two-prong test first looking at whether the conduct at issue involved “an element of judgement or choice” by the employee. Berkovitz v. United States, 486 U.S. 531, 536 (1988). Then the Court looked at whether the judgment, “[was] of the kind that the discretionary function exception was designed to shield” in that the judgement relates to a governmental action or decision “based on considerations of public policy. Id. at 536-37; Suter v. United States, 441 F.3d 306, 310-11 (4th Cir. 2006). The court determined that the FMCSA’s 10-day extension met the requirements of the first prong and thus could not form the basis of an FTCA claim. FMCSA was exercising discretion within the meaning of the FTCA. The fact that the FMSCA may have taken “calculated risks” did not matter because the discretionary function exception applies whether the discretion involved be abused, or even erroneous. Furthermore, the Court recognized that Petitioner’s argument was essentially a challenge to the validity of 49 C.F.R. § 385.17(f), and as such, could not be the basis of an FTCA claim. However, even if Petitioner could challenge the validity of the regulation, FMCSA’s decision to promulgate 49 C.F.R. § 385.17(f), would be shielded by the discretionary function exception—meeting the second prong of the test.
Accordingly, the Court affirmed the judgment of the district court.
Aleia M. Hornsby
WILERMS OXYGENE v. LYNCH, NO. 14-2380
Decided: February 22, 2016
The Fourth Circuit denied in part and dismissed in part petitions for review of orders of the BIA.
In 1994, Petitioner, Wilerms Oxygene, along with his his family, sought refuge in the United States after facing political persecution in in his native country of Haiti, and two years later he was subsequently granted lawful permanent resident status in 1996. In 2011, Oxygene was convicted of several state crimes, including aggravated felonies and firearm offenses, and the Department of Homeland Security (“DHS”) began removal proceedings against him. Oyxgene feared he would be detained indefinitely if deported to Haiti, which would subject him to deplorable prison conditions and prevent him from receiving necessary medical care for his latent tuberculosis, and so he applied for deferral of removal under the Convention Against Torture (“CAT”). At his removal hearing, the Immigration Judge (“IJ”) recognized that prison conditions in Haiti remained dismal and that Oxygene was at a higher risk of disease due to his latent tuberculosis. While the IJ noted that Oxygene would possibly be detained if he was deported to Haiti, the IJ found that Oxygene failed to present evidence that “[Haitian] authorities intentionally and deliberately detained deportees in order to inflict torture.” As a result, precedent established in In re J-E-, 23 I. & N. Dec. 291 (BIA 2002) (en banc), precluded Oxygene’s argument that “Haiti’s detention policy and prison conditions necessarily constitute torture under the CAT,” and he failed to meet the “more-likely-than-not burden of proof required for relief under the CAT.” Oxygene filed two appeals that challenged the BIA’s denial of his application for CAT relief and its denial of his motion to reopen the removal proceedings.
The main issue was whether In re J-E- provided the correct standard for showing intent in CAT claims. DHS contends to “establish torture meriting CAT relief,” the petitioner must show not only that foreign officials intend to detain the deportee, but also that “the alleged torturers must actually desire the consequences of their actions.” Conversely, Oxygene maintains In Re J-E- does not provide the correct standard for establishing specific intent. Instead, intent to detain “coupled with knowledge to a near certainty that severe pain and suffering will result” is enough.
The Court found that all parties involved with turning the CAT from a treat into a law—the President, the Senate and the Department of Justice—interpret the definition of torture under the CAT as “an act [that] must be specifically intended to cause severe pain and suffering.” However, none of those parties addressed the definition of “specific intent.” Instead, the Court joins the majority of their sister circuits in deferring to the BIA’s interpretation as found in In re J-E-. Thus, Oxygene must demonstration that Haitian officials “are intentionally and deliberately creating and maintaining such prison conditions in order to inflict torture.”
Accordingly, the Court rejected Oxygene’s argument that the IJ and BIA erred in applying the legal standard prescribed in In re J-E- and denied his petition for review. Additionally, due to lack of jurisdiction, the Court dismissed Oxygene’s petition for review of denial to reopen.
UNITED STATES v. BERRY, NO. 14-4934
Decided: February 19, 2016
The Fourth Circuit vacated and remanded the district court’s decision.
In 2003, Defendant, Brian Berry, pled guilty to a sex offense in New Jersey state court and was obligated to register as a sex offender under the federal Sex Offender Registration and Notification Act (“SORNA”). Berry registered in New Jersey, but in 2013 law enforcement discovered Berry had relocated to North Carolina and had subsequently failed to properly register at his new address. Berry pled guilty to failing to register, and at sentencing the district court decided Berry was classified as a tier III sex offender under SORNA based on the conduct underlying his prior sex offense as described in the presentence report. As a result of his tier III designation, the district court calculated Berry’s Guidelines range as thirty-three to forty-one months, and he was sentenced to thirty-three months in prison and five years of supervised release. Berry appealed, arguing against his determination as a tier III sex offender.
The Court discusses two approaches to determining a defendant’s tier classification, both described in United States v. Price. First is the “categorical approach,” which “focusses solely on the relevant offenses’ elements, comparing the elements of the prior offense of conviction to the pertinent federal offense.” A categorical match exists when the elements of the prior offense as the same or narrower than those of the offense listed in the federal statute. The second approach, “the circumstance-specific approach,” focusses on the conduct underlying the defendant’s prior conviction, not the relevant offenses’ elements. In utilizing this approach, the reviewing court should evaluate whether the prior offense involved circumstances that are required under the federal statute. Ultimately, after examining the text of SONRA, the Fourth Circuit reached the same conclusion as the Tenth Circuit did in United States v. White; the language of SONRA instructs the use of a categorical approach, with the exception of considering the actual act of the victim.
Consequently, after applying the categorical approach prescribed by SONRA, the Court agreed with Berry that the district court erred in classifying him as a tier III sex offender. The statute under which Berry had originally been convicted, N.J. Stat. Ann. § 2C:24-4(a) (2002), child endangerment could be based on either “sexual conduct which would impair or debauch the morals of [a] child” or “harm that would make [a] child . . . abused or neglected.” The pertinent federal offense requires actual or physical contact. However, the New Jersey Supreme Court has previously made clear that no such contact is required for conviction under the child endangerment statute discussed here, making it a broader statute than the federal statute. Consequently, there is no categorical match, and Berry cannot be properly classified as a tier III offender.
Accordingly, the Court vacated and remanded the district court’s sentencing.
PERDUE FOODS, LLC v. BRF S.A., NO. 14-2120
Decided: February 19, 2016
The Fourth Circuit affirmed the district court’s ruling.
In 2002, plaintiff Perdue Foods became concerned about potential consumer confusion between its trademark, “Perdue”, and that of defendant BRF, an international food company headquartered in Brazil that supplied poultry to Perdue. BRF sells poultry under the trademark “Perdix.” In 2003, Perdue and BRF negotiated a Worldwide Coexistence Agreement (“Agreement”) that stated that Perdue would abandon use of its trademark in Brazil and BRG would abandon use of a version of its trademark worldwide. The agreement contained a Maryland choice of law clause. In 2014, Perdue brought this action in the District Court of Maryland alleging that BRF breached the agreement by failing to abandon existing trademark registration in some countries and filing new trademark applications in others. The district court granted BRF’s motion to dismiss the suit pursuant to Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction.
Perdue argued only that the court had specific personal jurisdiction not general so the court only used a specific jurisdiction analysis. The court held that it had to consider several factors in this analysis: 1) whether the defendant purposely availed itself of the privilege of conducting activities in the state, 2) whether the plaintiff’s claims arose out of those activities directed at the state, and 3) whether the exercise of personal jurisdiction would be constitutionally reasonable. The court reasoned that Perdue failed to prove the first prong of the test because BRF did not purposely avail itself of the privilege of doing business in Maryland. The court analyzed several factors in making this determination such as whether the defendant maintains agents in the state, owns property in the state, and engaged in significant or long-term business activities in the state. The court determined that Perdue provided little evidence in support of these factors and that the only substantial evidence in favor of personal jurisdiction was the choice of law clause. Therefore, the court held that the district court did not have personal jurisdiction over BRF.
Accordingly, the court affirmed the judgment of the district court.
Michael W. Rabb
US v. ADAMS, NO. 13-7107
Decided: February 19, 2016
The Fourth Circuit vacated the district court’s ruling and entered judgment in the defendant’s favor.
In 2008, defendant, Richard Adams was indicted on an eight-count indictment alleging that he committed a series of armed robberies. In May of 2009, Adams pleaded guilty pursuant to a written plea agreement to three of the eight counts: (1) robbery in violation of 18 U.S.C. § 1951 (Count 2); (2) using and carrying a firearm during a crime of violence in violation of 18 U.S.C. § 924(c) (Count 3); and (3) being a felon in possession of a firearm in violation of 18 U.S.C. § 922(g) (Count 8). The plea agreement contained a statement stating that Adams waived his right to challenge the conviction or sentence under 28 U.S.C. § 2255 unless it was for ineffective assistance of counsel or prosecutorial misconduct. Based on his previous criminal history and total offense level, Adams received a total of 240 months. Adams appealed his conviction and the Fourth Circuit Court of Appeals affirmed his conviction and sentence in 2011. In August 2012, Adams filed a motion to vacate his 922(g) conviction as a felon in possession of a firearm pursuant to 28 U.S.C. § 2255. Adams asserted that he was innocent of being a felon in possession of a firearm because none of his prior convictions were felonies after the decision in United States v. Simmons and that his attorneys were ineffective for failing to anticipate the ruling in Simmons. In Simmons, the Fourth Circuit held that “for an offense to be a prior felony under North Carolina’s Structured Sentencing Act as then written, a defendant must have actually faced the possibility of more than a year in prison.” In July 2013, the district court dismissed Adam’s § 2255 motion, determining that Adams waived his Simmons claims in the plea agreement.
The Fourth Circuit concluded that Adam’s claim of actual innocence was outside the scope of the waiver and that Adams was actually innocent of being a felon in possession of a firearm. The Court stated that generally a waiver remains valid in light of subsequent changes in the law. However, if a valid waiver results in the miscarriage of justice then a court will refuse to enforce it. Adams’s showing of actual innocence was sufficient to satisfy the miscarriage of justice requirement so the Court determined that the § 2255 motion fell outside the scope of his waiver. The Court relied on Miller v. United States when determining that Adams’s 922(g) conviction should be vacated. In Miller, a defendant’s § 2255 motion was granted based on his predicate North Carolina convictions no longer being characterized as felonies. The Court concluded in Miller that under Simmons, the felony convictions were no longer felonies and that those defendants were actually innocent of the 922(g) offense.
After determining that Adams’s actual innocence claim was outside the scope of his appeal waiver, the Court reached his § 2255 motion. The Court concluded that Adams failed to meet the three required elements of a 922(g) conviction because he was not a felon at the time of the offense. In Bousley v. United States, the Supreme Court added an additional requirement stating, “in cases where the Government has forgone more serious charges in the course of plea bargaining, petitioner’s showing of actual innocence must also extend to those charges.” However, the Court concluded that Adams did not have to prove actual innocence of all the charges that he was charged with before entering into a plea agreement because the dismissed counts related to different criminal conduct. Finally, the Court refused to reinstate the dismissed charges of the indictment. Since Adams was not a convicted felon at the time of the charged offense, it was not illegal for him to possess a firearm.
Accordingly, the Court vacated the judgment of the district court.
Alicia E. Morris
OJO v. LORETTA E. LYNCH, No. 15-1138
Decided: February 16, 2016
The Fourth Circuit found that that the Board of Immigration Appeals (“BIA”) abused its discretion when the Board denied Petitioner’s motion to reopen his removal proceedings. The Court granted the petition for review, vacated the BIA’s decision, and remanded for further proceedings.
Petitioner, Adebowla Oloyede Ojo, lawfully entered the United States at the age of six, and shortly after his arrival in country, Ojo’s uncle—a United States citizen—became his legal guardian. On June 19, 2000, when Ojo was sixteen, Ojo’s uncle/guardian filed a petition to adopt Ojo. On January 24, 2001, after Ojo had turned seventeen, the Circuit Court for Montgomery County, Maryland (the “Maryland state court”), entered a judgement for adoption. During Ojo’s twenties he was convicted of two drug-related offenses—either of which qualified as an “aggravated felony” under 8 U.S.C. § 1101(a)(43)(B). On May 6, 2013, in light of Ojo’s convictions, and alleging that Ojo had not derived citizenship as an adopted child under 8 U.S.C. § 1101(b)(1)(E), the Department of Homeland Security (“DHS”) charged Ojo with removability form the Unites States under 8 U.S.C. § 1227(a)(2)(A)(iii). On June 25, 2014 Ojo appealed the decision of an immigration judge who determined that Ojo had not derived citizenship from adoption and was therefore removable from the country. Although Ojo advised the BIA that his adoptive father would seek an nunc pro tunc order from the Maryland state court specifying that Ojo’s adoption became effective before he was sixteen, BIA concluded on January 12, 2015, that the nunc pro tunc would not warrant remand and ultimately the BIA denied his motion to reopen his removal proceeding. BIA relied on its prior decisions in Matter of Cariaga and Matter of Drigo, observing that it, “does not recognize nunc pro tunc adoption decrees after a child reaches the age limit for both filing of the adoption petition and decree.”
In Cariaga, the BIA established a blanket rule that, “[t]he act of adoption must occur before the child attains the age specified in the INA,” which precluded any consideration of a nunc pro tunc order entered after the relevant birthday but made effective before that date. Thereafter in Drigo, relying on Cariaga, the BIA rejected the contention that “a decree of adoption is fully effective as of the date entered nunc pro tunc and is entitled to recognition for immigration purpose. While the BIA did modify the Cariaga/Drigo rule during the pendency of the instant case in Matter of Huang, the Respondent still asserted that Ojo did not derive citizenship. In Huang the BIA asserted that it would recognize a nunc pro tunc “where…the State in which the adoption was entered expressly permits an adoption decree be dated retroactively.” The Court found, however, that the BIA had abused its discretion in disregarding Maryland state court’s facially valid nunc pro tunc order. Using a two-step test to evaluate the BIA’s interpretation, the Court first looked to the statutory language to determine if the term “adopted” denotes the effective date of the adoption. Reasoning that the term “adopted” was not ambiguous—which ended the judicial inquiry—and recognizing that adoption is a state matter, the Court concluded that, “[w]hen an individual has been “adopted” under 1101(b)(1)(E)(i) depends on the effective date of the adoption as set forth in the relevant state court instruments,” not by the discretionary decision of the BIA.
Accordingly, the Court granted Petitioner’s petition for review; and vacated and remanded
Aleia M. Hornsby
U.S. v. TINEKA S. MCLAUGHLIN, No. 14-4920
Decided: February 16, 2016
The Fourth Circuit dismissed the defendant’s motion to appeal.
Tineka McLaughlin pleaded guilty to bank fraud in violation of 18 U.S.C § 1344 as a result of her participation in an ATM fraud scheme in Fayetteville, North Carolina. This appeal concerns McLaughlin’s right to appeal her sentencing under her interpretation of her plea agreement. As part of her plea agreement, McLaughlin agreed to waive, in part, all of her rights to “appeal the conviction and whatever sentence is imposed on any ground, including any issues that relate to the establishment of the advisory Guideline range, reserving only the right to appeal from a sentence in excess of the applicable Guideline range . . .” In essence, the plea agreement limited McLaughlin’s right to appeal to any part of the sentencing, referred to as an upward departure, in excess of the advisory Guideline range but not the established advisory Guideline range itself. At sentencing, McLaughlin was asked by the district judge if she understood that her plea agreement only reserved her the right to appeal an upward departure from the Guideline range established at sentencing and otherwise waived all rights to appeal whatever sentence is imposed, to which she responded, by saying, “Yes, sir.”
McLaughlin was subsequently sentenced to pay restitution and to serve twenty-seven months’ imprisonment. McLaughlin’s sentence was based upon two variables. First, the district court calculated McLaughlin’s Guideline range using a four-level role-in-the-offense enhancement pursuant to U.S.S.G § 3B1.1(a) that produced an advisory Guideline range of 15 to 21 months. Second, the district court, based upon the notion that the lower Guideline range underestimated the seriousness of McLaughlin’s criminal history and her likelihood of recidivism, imposed an upward departure. The upward departure increased McLaughlin’s sentence to 27 months.
Following her sentencing, McLaughlin appealed. However, McLaughlin misconstrued her right to appeal the upward departure with her waiver of the right to appeal the advisory Guideline range. The United States moved to dismiss, arguing that she waived her right to appeal issues related to the establishment of her advisory Guideline range. McLaughlin countered, arguing that she could appeal the sentence because it was in excess of the applicable advisory Guideline range. Though she did retain a right to appeal this particular issue, in reality, McLaughlin’s appeal did not actually concern the upward departure, but rather only concerned the establishment of the advisory Guideline range. Pointing to principles of contract law which govern the construction and interpretation of plea agreements, the Fourth Circuit pointed out that McLaughlin cannot employ “selective reading” of her plea agreement and must instead “give meaning and effect to every part of the contract.” The Court seemed somewhat perplexed as to why McLaughlin declined to include a motion to appeal her sentence’s upward departure, which she was entitled to do, and instead challenged the establishment of her Guideline range, which she was not permitted to do. Nevertheless, the Court was forced to dismiss McLaughlin’s motion to appeal.
McLaughlin also argued that the plea agreement was at least ambiguous and should thus be construed in her favor. However, the Fourth Circuit declined to accept this contention, and pointed out that the fact that parties in an “adversary system unsurprisingly argue for different interpretations of an agreement does not in and of itself render an agreement ambiguous.”
Accordingly, the Court dismissed the Defendant’s motion to appeal.
ERIC ADAM GRUENINGER v. DIRECTOR, VA. DEP’T OF CORRECTIONS, NO. 14-7072
Decided: February 9, 2016
The Fourth Circuit affirmed the district court’s ruling in part, reversed in part, and remanded the case to the district court for further proceedings in light of this opinion.
In 2009, Eric Adam Grueninger was arrested by Virginia police for sexually abusing his fourteen-year-old daughter. Grueninger was read his Miranda rights during his initial interview with police and told police that he needed an attorney. Three days later, Grueninger was re-interviewed by a police officer without an attorney present. During this re-interview Grueninger confessed to performing various sexual acts with his daughter and was ultimately tried on sexual abuse and child pornography charges. During the trial, Grueninger’s attorney failed to file a timely motion to suppress the confession obtained by police in the re-interview, and the Commonwealth ultimately relied on the confession in securing his conviction.
On state collateral review Grueninger protested the admittance of the confession and argued that his attorney’s failure to file a timely motion to suppress the confession under Edwards v. Arizona, which prohibits police interrogation after an invocation of Miranda rights, constituted ineffective assistance of counsel. The circuit court rejected Grueninger’s claim and affirmed his conviction, holding that Grueninger had not been “interrogated” under the standards of Edwards, and as such his statements would not have been suppressed had his attorney so timely moved. The Virginia Supreme Court subsequently denied Grueninger’s petition for appeal.
Then, in 2011, Grueninger filed a pro se petition for a writ of habeas corpus in the Hanover Circuit Court. The petition was ultimately denied as the circuit court held that Grueninger’s confession at the re-interview did not fall under the parameters set in Edwards because Grueninger’s confession during the second interview was spontaneous or voluntary. Once again Grueninger appealed the dismissal of his petition, both in state and federal court, which was subsequently denied after review by both the Virginia Supreme Court and the Eastern District of Virginia. The Fourth Circuit granted a partial certificate of apealability as to two issues: “(1) Whether trial counsel was ineffective in failing to seek pretrial suppression of Grueninger’s [inculpatory] statement under Edwards v. Arizona, . . . and (2) if so, whether counsel’s ineffectiveness demonstrates cause and prejudice to excuse Grueninger’s procedural default of his claim that his statements were unconstitutionally obtained in violation of Edwards.”
Applying the principle from Brumfield of “looking through” the Virginia Supreme Court’s lack of reasoning on Grueninger’s issue on appeal, the Fourth Circuit turned its attention to assessing the circuit court’s reasoning on denying Grueninger the relief that he sought. Upon review, the Fourth Circuit concluded that the circuit court made an unreasonable error in determining that Grueninger’s motion to suppress, had it been filed in a timely manner, would have been denied anyways because the second interview did not fall under the Edwards guidelines of interrogation. Instead, the Fourth Circuit reasoned that presenting a suspect with new arrest warrants and asking about the alleged charges does in fact constitute “interrogation.” The Court relied on Innis, in which the Supreme Court held that interrogation includes not only “express questioning” but also its “functional equivalent.”
The Court then dismissed the Commonwealth’s assertion that the failure of Grueninger’s counsel to file a timely motion to suppress would not have constituted ineffective assistance of counsel under Strickland. Instead, the Court held that a timely motion likely would have led to the suppression of the confession and also would likely have had at least “some substance,” if not a pervasive effect, on the outcome of the trial. The Court held that there was a “reasonable probability” that Grueninger’s confession had an effect on the outcome of the trial on the sexual abuse charges but not the child pornography charges. Accordingly, the Court reversed the lower court’s dismissal of Grueninger’s habeas petition and remanded for a new trial on the sexual abuse charges without the use of the confession and affirmed Grueninger’s child pornography charges.
ANDON, LLC v. CITY OF NEWPORT NEWS, NO. 14-2358
Decided: February 9, 2016
The Fourth Circuit affirmed the district court’s ruling.
In 2012, Walter Terry formed a congregation called the Reconciling People Together in Faith Ministries for religious worship in Newport News, Virginia. Initially, the members of the congregation gathered for worship at a local business owed by Terry but they later sought a larger location that was owned by Andon. The property had been classified as “commercial use” since Andon had owned it. The City’s zoning ordinance only allowed a community facility to be used if it met four conditions. Terry and Andon knew that the property failed to satisfy the “setback” requirement regarding the location of the property to properties zoned for residential use. Knowing this, Terry and Andon still decided to a contingent agreement based on Andon getting approval from the City to use the property as a church. The board of zoning appeals (BZA) denied Andon’s variance request on the setback requirement because denial would not cause Andon a unique hardship. Plaintiffs filed suit claiming the City’s variance denial placed substantial burden on plaintiffs’ religious exercise in violation of the Religious Land Use and Institutional Persons Act (RLUIPA). The district court dismissed the complaint for failure to state a claim and granted the City’s motion to deny the plaintiffs’ request to file an amended complaint.
The plaintiffs alleged that RLUIPA had been violated because as a result of BZA’s action, the congregation had been unable to find a suitable location in the City for worship and the plaintiffs had suffered by the delay in establishing a church location. The plaintiffs relied on a RLUIPA provision that prohibited governmental regulation of land that imposes a substantial burden on the religious exercise of an assembly unless the burden furthers a compelling governmental interest and is the least restrictive means of furthering that compelling government interest. The Court found that the plaintiffs could not show the regulation caused a hardship that substantially affected the plaintiffs’ right of religious exercise. The Court distinguished this case from its decision in Bethel World Outreach Ministries v. Montgomery County Council, 706 F.3d 54 (4th Cir. 2013), because here the plaintiffs never had a reasonable expectation that the property could be used as a church. The plaintiffs knew before entering into the contingent lease agreement that the property failed to meet the required setback provision. The assumption of risk that the board of zoning appeals would deny the variance request and the burden it created on the plaintiffs were self-imposed hardships. Self-imposed hardships do not support substantial burden claims under RLUIPA because the hardship was not the result of government action altering a pre-existing expectation of land use. The district court did not abuse its discretion by denying the plaintiffs’ request to amend their complaint because the hardship was self-imposed. The plaintiffs would be unable to articulate any set of facts that would survive the City’s motion to dismiss, thus the Court agreed with the district court that any amendment to the complaint would have been futile.
Accordingly, the Court affirmed the judgment of the district court.
IN RE: ANDERSON, NO. 15-1316
Decided: January 26, 2016
The Fourth Circuit affirmed the judgment of the district court.
On February 3, 2010, Henry L. Anderson, Jr. (the “Debtor”) filed a voluntary petition for relief under Chapter 11 of the Bankruptcy code. Thereafter, the bankruptcy court approved Stubbs & Perdue, P.A. (“Stubbs”) to serve as the Debtor’s counsel in the bankruptcy proceedings. Stubbs is owed approximately $200,000 in legal fees from its representation of the Debtor. The Debtor is also subject to around $1 million in secured tax claims, and his estate has insufficient funds to pay both the tax claim and Stubb’s fees. This case centered on whether Stubbs could “subordinate” the IRS’s claim in this manner was governed by 11 U.S.C. § 724(b)(2).
The Fourth Circuit first discussed general bankruptcy principles. In bankruptcy, secured claims are satisfied from the collateral securing those claims prior to any distributions to unsecured claims. However, in Chapter 7 liquidations, there is a limited exception to this general rule. Under Section 724(b)(2) of the Bankruptcy Code, “certain unsecured creditors may ‘step into the shoes’ of secured tax creditors in Chapter 7 liquidation proceedings, so that when the collateral securing the tax claims is sold, the unsecured creditors are paid first.” As a result, if Stubb’s claim for Chapter 11 administrative expenses was one of the unsecured claims covered by § 724(b)(2), then, but only then, could it recover from the estate. The Fourth Circuit, however, found that under the version of § 724(b)(2) in effect at the time the bankruptcy court rendered its decision, the secured tax claim takes priority over Stubb’s claim to fees. Stubb’s argued that the application of current law to its claim would have an “impermissible retroactive effect,” and that it should prevail under the prior version of §724(b)(2), which should govern this case. The Court disagreed and found that the bankruptcy court properly applied the version of §724(b)(2) in effect when it rendered its decision. Accordingly, under that provision, the Court held that Stubbs was not entitled to subordinate the IRS’s secured tax claim in favor of its unsecured claim to Chapter 11 administrative expenses.
For those reasons, the Court affirmed the judgment of the district court.
KOLBE v. HOGAN, NO. 14-1945
Decided: February 4, 2016
The Fourth Circuit vacated the district court’s denial of Plaintiffs’ Second Amendment claims and remanded for the district court to apply strict scrutiny. Additionally, the Fourth Circuit affirmed the district court’s denial of Plaintiffs’ Equal Protection claim to the statutory exception allowing retired law enforcement officers to possess prohibited semi-automatic rifles. Finally, the Fourth Circuit affirmed the conclusion of the district court that the term “copies” as used by the statute is not unconstitutionally vague.
Prior to the passage of the Firearm Safety Act (FSA), Maryland law permitted citizens in good standing to possess semi-automatic rifles after passing an extensive background check. Here, the FSA substantially expanded Maryland’s gun control laws, making it a crime to “possess, sell, offer to sell, transfer, purchase, or receive” or to transport into Maryland any firearm designated as an “assault weapon.” Md. Code, Crim. Law § 4-303(a). Assault weapons include “assault long gun[s]” and is defined as any one of the more than 60 semi-automatic rifle or shotgun models specifically listed in section 5-101(r)(2) of the Maryland Public Safety Code, “or their copies.” The FSA does not define the term “copies.” Plaintiffs make several challenges to the FSA, contending that: (1) the assault weapons ban violates the Second Amendment right to keep firearms in defense of hearth and home; (2) the FSA’s ban of large capacity detachable magazines (LCMs) are also a violation of the Second Amendment; (3) the exception to the ban for retired officers is a violation of the Equal Protection clause; and (4) the FSA is void for vagueness to the extent that it prohibits possession of “copies” of the specifically identified semi-automatic rifles banned by the FSA. The district court granted summary judgment to the State for each of the Plaintiffs’ claims. Plaintiffs appealed.
The Fourth Circuit first looked at the Plaintiffs’ Second Amendment challenge to the FSA’s ban on semi-automatic rifles and LCMs. The Second Amendment states, “[a] well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.” The approach to resolving Second Amendment challenges involves: (1) whether the challenged law imposes a burden on conduct falling within the scope of the guarantee of the Second Amendment, and if yes, (2) an application of the appropriate form of means-end scrutiny is necessary. The Fourth Circuit determined that the bans imposed by the FSA burden conduct that falls within the scope of the Second Amendment because the law prohibits the ownership of assault weapons and LCMs, commonly used as “arms” by law-abiding citizens that are not unusually dangerous, to be used in the home for self defense; therefore, an application of the correct means of scrutiny is appropriate. The Fourth Circuit decided that the district court erred in applying intermediate scrutiny, and noted strict scrutiny was appropriate because what is at stake is a fundamental right that is substantially burdened by the FSA. The law here goes beyond simple regulation and is instead a total prohibition of possession of certain types of arms, which is similar to District of Columbia v. Heller where the Supreme Court stated that strict scrutiny was appropriate. The Fourth Circuit remanded this issue back to the district court to require the government to prove its restrictions are “narrowly tailored to achieve a compelling government interest” in order for the FSA to be constitutional.
Next, the Fourth Circuit looked at the Plaintiffs’ Equal Protection argument. To succeed on an Equal Protection claim, a plaintiff is required to demonstrate that he or she has been treated differently from others with whom he or she is similarly situated. The “similarly situated” standard requires a plaintiff to identify persons materially identical to him or her who have received different treatment. Here, under the FSA, a retired officer enjoys two privileges that the public does not. One, he or she may possess an “assault weapon” as long as it was sold or transferred to the officer by the law enforcement agency on retirement or the officer purchased it or obtained it for official use with the law enforcement agency before retirement. Two, he or she is not subject to any of the restrictions on LCMs. Plaintiffs argue that, when it comes to owning semi-automatic weapons and LCMs, retired law enforcement officers and the public at large are “similarly situated.” However, the Fourth Circuit concluded this argument failed because law enforcement officers are different from the public in several fundamental aspects; therefore, there is not a violation of Equal Protection. These differences include the level of training and experience of an officer; the special degree of trust of a law enforcement officer; and the special threats that retired police officers face.
The last argument alleged by Plaintiffs contend that the FSA is void for vagueness on its face because it is not drafted with sufficient clarity to permit an ordinary citizen to understand when a firearm qualifies as a “copy” of a banned semi-automatic rifle. Due process creates a requirement that a criminal statute provides adequate notice to a person of ordinary intelligence that his or her contemplated conduct is illegal, for no man or woman should be responsible for conduct which could not be reasonably understood to be criminal. The issue is whether the section of the FSA is set out in terms that the ordinary person exercising ordinary common sense can sufficiently understand and comply with. Here, the Fourth Circuit determined the phrase “assault weapons and their copies” has a plainly legitimate sweep and is not unconstitutionally vague. Despite the FSA not specifically defining “copy,” the plain meaning of the word is not beyond the grasp of the ordinary citizen.
In summary, the Fourth Circuit vacated the district court’s award of summary judgment order on Plaintiffs’ Second Amendment claims and remanded the case for the district court to apply strict scrutiny. The Fourth Circuit affirmed the district court’s grant of summary judgment stating that there was no violation of Equal Protection with respect to the FSA’s exception permitting retired law enforcement officers to possess semi-automatic rifles. Finally, the Fourth Circuit affirmed the conclusion of the district court that the FSA is not unconstitutionally vague.
Dissenting, Judge King determined that it would have been appropriate to wholly affirm the judgment of the district court on the basis of the summary judgment decision. Additionally, Chief Judge Traxler wrote a dissenting opinion for the Equal Protection part of the opinion determining that remanding this issue to the district court to decide whether the FSA’s exception permitting retired law enforcement personnel to possess semi-automatic rifles and LCMs can be justified would be appropriate.
Austin T. Reed
HAYES v. DELBERT SERV. CORP. NO. 15-1170, NO. 15-1217
Decided: February 2, 2016
The Fourth Circuit found that the arbitration agreement in dispute was unenforceable, reversed the district court’s order compelling arbitration, and remanded.
This case stemmed from a complaint that the plaintiffs had against Western Sky, an online lender owned by a member of the Cheyenne River Sioux Tribe, who operated Western Sky from the Cheyenne River Indian Reservation and issued payday loans to consumers. Such payday loans violated several state and federal lending laws, and several suits were brought against them, including this one, forcing them to stop issuing new loans. In this case, Western Sky transferred the loan to another entity, who in turn transferred the loan to another entity, who named Delbert (who is not a tribe member) as the servicing agent. The plaintiffs filed a class action suit against Delbert, claiming that Delbert’s notices and phone calls violated the Fair Debt Collection Practices Act and the Telephone Consumer Protection act, and Hayes also sought “declaratory relief to the effect that the loan agreements forum selection and arbitration provisions were unenforceable.” Specifically, the loan agreement provided that the loan was subject to the “exclusive laws and jurisdiction of the Cheyenne River Sioux Tribe,” and also stated that state and federal laws didn’t apply. Furthermore, the arbitration agreement provided that any dispute would be resolved by binding arbitration, which would be conducted by the Cheyenne River Sioux Tribal Nation, and that the borrower could choose a specific organization to administer the arbitration. Delbert filed a motion to dismiss, and the district court agreed that Delbert could enforce the arbitration agreement, and ordered arbitration. This appeal follows.
The Fourth Circuit began by identifying that even though it reviews an order compelling arbitration de novo, there is a strong federal policy in favor of enforcing arbitration agreements. The Court then looks at the fact that in order for an arbitrator to resolve a dispute, the arbitration agreement itself must be valid, and revoking an arbitration agreement must be on grounds that specifically stem from the arbitration agreement itself, and not just the contract as a whole. The plaintiffs argued that the Tribe has no representatives for arbitration, nor does the Tribe even recognize arbitration, and that furthermore there are no actual “consumer dispute rules” alluded to in the agreement, making it unenforceable. However, Delbert argued that the new provisions provided for arbitration from organizations like AAA and JAMS saved the arbitration agreement. The Court found, however, that the arbitration agreement failed because “it purports to renounces wholesale the application of any federal law to the plaintiffs’ federal claims,” federal law that would apply to Delbert since he’s not a member of the Tribe. Although the Court acknowledges that parties may structure arbitration agreements as they choose, the Court also maintained that such ability does not allow a “substantive waiver of federally protected civil rights,” and the Court found that such a waiver was found in this particular arbitration agreement. For these reasons, the Fourth Circuit reversed and remanded.
WARFAA v. ALI, No. 14-1810
Decided: February 1, 2016
In a case about torture during Somalia’s military dictatorship, the Fourth Circuit held that the federal courts did not have jurisdiction over the Alien Tort Statute (ATS) claims in the case. The Fourth Circuit also held that the defendant was not immune from suit for the Torture Victim Protection Act (TVPA) claims based on his official status. On this basis, the Fourth Circuit affirmed the District Court’s holding dismissing the ATS claims, and allowing the TVPA claims to proceed.
In December, 1987, Warfaa was kidnapped from his home in Somalia by Somali National Army (SNA) soldiers, and detained on suspicion of supporting an opposition group. Over the next three months, at the direction of Ali, who was then a colonel in the SNA, Warfaa was beaten, interrogated, tortured, shot, and left for dead. In March, 1988, Warfaa bribed his guards to release him. He continues to reside in Somalia. In December, 1990, Ali emigrated to Canada, but was deported for human rights abuses, and came to the United States. The United States began deportation proceedings, but Ali left voluntarily in 1994. In 1996, Ali returned to the United States on a spouse visa, and continues to live here.
In 2004, Warfaa and another plaintiff filed suit against Ali in the Eastern District of Virginia, chose to dismiss the complaint, and refiled again two years later. For much of the next eight years, the case was stayed. Twice the stay was to allow the U.S. Department of State to comment on the case’s impact on foreign policy. The case was also stayed to await the Supreme Court’s decision in Kiobel v. Royal Dutch Petroleum Co.. In April, 2014, the Court lifted the stay, and Warfaa filed an amended complaint alleging six counts under the ATS, of which two also qualified as TVPA claims. Ali moved to dismiss the claims. The District Court dismissed the ATS claims, finding under Kiobel that the claims did not relate closely enough to the United States for the court to have jurisdiction. The Court allowed the TVPA claims to proceed, finding that Ali could not claim immunity for official acts when those acts went against the norms of jus cogens. Both Ali and Warfaa appealed.
The Fourth Circuit first found that the court did not have jurisdiction over the ATS claims. The Court noted that there is a presumption against ATS jurisdiction over acts occurring abroad unless, under Kiobel, those acts are closely enough tied to the United States to overcome the presumption. Here, the Court noted, the alleged incidents took place abroad, and did not involve U.S. citizens or the U.S. government. Ali’s residency in the United States did not create enough of a relationship with the U.S. for there to be ATS jurisdiction.
The Fourth Circuit then found that Ali was not immune under the TVPA for his official acts. Ali had urged the Court to overrule its prior holding in Yousuf v. Samantar, finding that there is no immunity for official acts which violate jus cogens norms. The Fourth Circuit, however, noted that it was bound by the decision of another panel of the Court until the issue was considered en banc. On this basis, the Fourth Circuit affirmed the District Court’s decision dismissing Warfaa’s ATS claims and allowing his TVPA claims.
Judge Gregory wrote a separate concurring/dissenting opinion in which he dissented with respect to the ATS claims. He noted that the Kiobel case and other subsequent cases involved corporate defendants while the instant claim involved an individual defendant who resided in the United States. Further, Judge Gregory noted that Ali specifically sought residence in the United States, and had, at various points, received military training in the United States. On this basis, Judge Gregory felt that there was enough connection with the United States to create jurisdiction under the ATS. Finally, Judge Gregory noted that it was troubling that, under the majority’s holding, a U.S. resident could escape ATS liability for acts committed abroad that would certainly have been judicially pursued if they had been committed in the United States.
Katherine H. Flynn
AIKENS v. INGRAM, JR., NO. 14-2419
Decided: January 29, 2016
The Fourth Circuit affirmed the judgment of the district court.
In 2001, Plaintiff Colonel Federick Aikens (“Aikens”), was promoted from executive officer to full colonel and commanding officer of the 139th Rear Operations Center (“ROC”). After Aikens promotion, General William E. Ingram (“Ingram”) named Lieutenant Colonel Peter von Jess (“von Jess”) as executive officer to replace Aikens. This assignment meant that Aikens was in a supervisory position over von Jess. In December 2002, Aikens was required to complete an officer evaluation report of von Jess, where he gave von Jess a negative report. In 2003, Aikens was called to active duty in Kuwait, but Ingram and von Jess remained in North Carolina. However, the animosity between Aikens and von Jess did not subside. In November 2003, Aikens was informed that two technology personnel staff members had used illegal means to obtain his personal emails. Aikens learned that those emails had been forwarded to von Jess. Von Jess then forwarded the emails to the Department of the Army Inspector General (“DAIG”). DAIG concluded that the emails had been improperly obtained, but nonetheless used to emails to find six instances of active duty misconduct on Aikens’ part. Ingram received the emails from DAIG and then forwarded the findings to the Commander of the First United States Army, Lieutenant General Russel Honoré. As a result, Aikens was terminated. On April 27, 2006, Aikens sued Ingram and von Jess pursuant to 42 U.S.C. § 1983, claiming that they facilitated unconstitutional searches and seizures of Aikens’ personal emails while he was deployed in Kuwait. The district court granted summary judgment in favor of Ingram and von Jess, based on the justiciability doctrine set forth in Mindes v. Seaman, which sets forth a four factor test for reviewability of claims based on internal military affairs.
On appeal, the Fourth Circuit found that Mindes had no place in its analysis because Mindes applies only to equitable relief and Aikens had abandoned his claim for equitable relief. Instead, the Court relied on Feres v. United States, and affirmed the district court’s grant of summary judgment on the basis of the military abstention doctrine. Originally, Feres stood for the proposition “that the Government is not liable under the Federal Tort Claims Act for ‘injuries to servicemen where the injuries arise out of or are in the course of activity incident to service.’” This has been called the Feres “incident to service test.” The Untied States Supreme Court has subsequently applied the “incident to service test” to actions outside of the Federal Tort Claims Act. In the instant case, the Fourth Circuit found that the Feres “incident to service” test applies to §1983 actions. The Court justified this application based on Supreme Court jurisprudence and the delicate separation of powers necessary for smooth and effective military governance. As such, the Court applied the Feres “incident to services” test and found that Aikens alleged injuries arose out of activity incident to services because Aikens was on active duty, deployed in a war zone, and used a computer system set up by military personnel.
Accordingly, the Court abstained from reviewing Aikens’ §1983 claim because it fell under the Feres “incident to service test.” Consequently, the Court affirmed the district court’s dismissal of the case.
U.S. v. PURDUE PHARMA L.P. NO 14-2299
Decided: January 29, 2016
The Fourth Circuit agreed that the district court did not have jurisdiction over the claims and affirmed.
This case stemmed from a qui tam action under the FCA that Mark Radcliffe (“Radcliffe”), a former district sales manager for Purdue Pharma (“Purdue”), filed against Purdue, alleging that Purdue improperly labeled the drug OxyContin as having a higher pain potency, which in turn led doctors to prescribe it instead of the less expensive MS Contin. After bringing an action in 2010 that was dismissed and certiorari was dismissed in the Supreme Court, Radcliffe’s wife, joined by another employee filed this qui tam action. The district court dismissed on res judicata grounds, the 4th circuit remanded, and on remand, the district court dismissed the complaint. This appeal followed.
The Fourth Circuit began by examining the provisions in the FCA that permitted qui tam actions, and how the “public disclosure bar,” which states that courts can’t have jurisdiction over an “action under this section based upon the pre-2010 public disclose of the allegations or transactions in a criminal, civil, or administrative hearing unless the action is brought by the Attorney General or the person bringing the action is the original source of the information.” The Fourth Circuit then noted that it interpreted the phrase “based upon” to preclude actions “only where the relator has actually derived from a public disclosure the allegations upon which his qui tam action is based.” Although the plaintiffs argued that their allegations are not derived from a public disclosure, because they came by their knowledge of Radcliffe’s allegations from nonpublic sources, the court found that they did have knowledge from public sources. They compared the case at hand to the Siller case, and found that, unlike in that case, the plaintiffs learned of their knowledge of the case specifically due to their attorney’s involvement in Radcliffe’s prior action. Although they didn’t learn directly from public disclosures, their claims are based on the knowledge their attorney gained while representing Radcliffe, much like in the Doe case. Furthermore, the Court pointed out that the statutory purpose of the public disclosure bar supported the dismissal of the case. Therefore, the Fourth Circuit affirmed.
CENT. RADIO CO., INC. ET AL. v. CITY OF NORFOLK, VA., NO. 13-1996, 13-1997
Decided: January 29, 2016
The Fourth Circuit dismissed the appeal in part, affirmed in part, and reversed in part the judgment of the district court.
In this case, the district court granted summary judgment to the City of Norfolk (“Norfolk”) on plaintiffs’ claims that the City’s sign ordinance violated the plaintiffs’ rights under the First Amendment and the Equal Protection Clause of the Fourteenth Amendment. The plaintiffs, Central Radio Company (“Central Radio”), Robert Wilson (“Wilson”), and Kelly Dickinson (“Dickinson”), argued that Norfolk’s sign ordinance unconstitutionally “exempted certain displays from regulation, effectuated a prior restraint on speech, and was enforced selectively in a discriminatory manner by zoning officials.” The plaintiffs’ challenges to Norfolk’s sign code relate to a protest of certain adverse actions taken against Central Radio by the Norfolk Redevelopment and Housing Authority (NRHA). In May of 2012, the plaintiffs initiated a civil action to enjoin the City from enforcing the former sign code. The plaintiffs claimed that the sign code was unconstitutional. The district court denied the plaintiffs’’ subsequent motions and granted summary judgment in favor of Norfolk. The court determined that the provisions of the former sign code exempting flags, emblems, and works of art were content-neutral. As a result, the court then applied intermediate scrutiny and held that the former sign code was a constitutional exercise of Norfolk’s regulatory authority.
On appeal, the Fourth Circuit found that the resolution of whether or not the sign ordinance was content-neutral or content based should be guided by the United States Supreme Court’s recent decision in Reed v. Town of Gilbert, 134 S. Ct. 2218 (2015). After applying the relevant principals of content neutrality found in Reed, the Court held that the sign ordinances challenged in the plaintiffs’ complaints were content-based regulations. “On its face, the sign code was content-based because it applied or did not apply as a result of content, that is, ‘the topic discussed or the idea or message expressed.’” As a result of the sign ordinance being content-based regulation of speech, the Court applied strict scrutiny in determining its constitutionality. The Court found that the sign ordinance failed strict scrutiny because Norfolk failed to satisfy its burden of proving that its restriction of speech was narrowly tailored to further a compelling government interest. Accordingly, the Court concluded that the sign ordinance failed strict scrutiny, and as such was unconstitutional under the First Amendment. The Court remanded the First Amendment claim to the district court to award nominal damages to the plaintiffs or any other relief. Further, the Court found that because Norfolk amended the sign ordinance in 2015 after the Supreme Court’s decision in Reed, that the plaintiffs’’ request for prospective relief based on the content restrictions in the prior ordinance was moot. The Court noted that on remand the district court has the option to consider whether the plaintiffs may bring a new claim challenging the constitutionality of the amended ordinance and seek any associated injunctive relief.
The Court, however, found no merit in the plaintiffs’ selective enforcement claim, and therefore, the Court affirmed the court’s disposition of that claim.
U.S. v. WILLIAMS, No. 14-4680
Decided: January 28, 2016
In a case concerning plea agreements to drug crimes, the Fourth Circuit held that the district court did not plainly err in convicting the defendants. The Fourth Circuit also held that it did not have jurisdiction to review the sentence of one of the defendants. On this basis, the Fourth Circuit affirmed the district court’s conviction of the defendants, and dismissed one defendant’s appeal of her sentence.
David James Williams, III, and Kristin Deantanetta Williams each pled guilty to one count of conspiracy to possess and distribute cocaine and cocaine base, and, under Fed. R. Crim. P. 11(c)(1)(C), stipulated to a sentence of 120 months imprisonment. The district court sentenced each defendant to 120 months imprisonment. Under Anders v. California, both defendants appealed challenging whether their convictions complied with Fed. R. Crim. P. 11. In addition, Kristin challenged the reasonableness of her sentence.
The Fourth Circuit first found that there was no plain error in the defendants’ convictions. The district court complied with Fed. R. Crim. P. 11’s requirement that the trial court speak with the defendant to be sure that he understands the nature of the charge, the mandatory minimum and maximum possible sentences, and the rights relinquished by pleading guilty. The district court also, as required by Fed. R. Crim. P. 11, made sure there was a factual basis for the plea, and that the plea was voluntary.
The Fourth Circuit next found that it did not have jurisdiction to review Kristin’s challenge to her sentence. The Court found that it could only review the sentence if it was “‘imposed in violation of law,’” or “‘as a result of an incorrect application of the [United States] [S]entencing [G]uidelines . . . .’” The Court held that the sentence imposed did not violate the law because 120 months was the mandatory minimum sentence for the crime of which Kristin was convicted. The Court then noted, based on case precedent, that sentences under Rule 11 (c)(1)(C) are generally not thought to be an incorrect application of United States Sentencing Guidelines, because the sentences come from the parties’ agreement, not the Court’s application of the Guidelines. The Court noted an exception to that general rule where the parties’ “‘agreement expressly uses a Guidelines sentencing range applicable to the charged offense to establish the term of imprisonment.’” The exception did not apply in the instant case, however, because Kristin’s plea agreement did not expressly rely upon the Guidelines. On this basis, the Fourth Circuit affirmed the district court’s conviction of the defendants, and dismissed Kristin’s challenge to her sentence.
Katherine H. Flynn
KNOX CREEK COAL CORP. v. SECRETARY OF LABOR, NO. 14-2313
Decided: January 21, 2016
The Fourth Circuit denied Knox Creek’s petition for review.
This case stemmed from a series of inspections that the Mine Safety and Health Administration (“MSHA”) conducted in Knox Creek’s Tiller Mine, four citations of which are at issue in the case, three permissibility violations and one accumulations violation. Although the ALJ found that the Secretary had not provided sufficient evidence that the violations were “significant and substantial” (“S&S”), but on review, the Commission found that the ALJ had applied the test incorrectly, and when it clarified the standard, found that the permissibility citations were S&S. As to the accumulations violation, the ALJ determined that it too was not S&S, and the Commission reversed that decision as well. The Commission then remanded to the ALJ for it to recalculate the penalties in light of the violations’ S&S designation. Once the ALJ imposed the revised penalties, and the Commission denied Knox Creeks’ petition for review, the Fourth Circuit determined that it was then ripe for review.
The Fourth Circuit began its analysis by disposing the challenge that the Commission exceeded its statutory standard of review because it reversed findings of the ALJ that were supported by substantial evidence. The Court found that the Commission did not reverse the ALJ’s factual findings, and instead reversed solely based on the correction of the legal error and clarified the legal standard that the ALJ was to use in determining if the violations were S&S. The Court went through the familiar Chevron analysis when looking at ambiguities in the statute of the Mine Act, and found that the second requirement of Mead was lacking, so the Secretary’s litigation position was not entitled Chevron deference. However, the Court noted that some deference was still to be given to the Secretary’s interpretation. The Court then looked at the Mathies test, and found that the Secretary’s interpretation of its third prong was consistent with earlier precedent and legislative intent, that a reviewer is to assume the existence of the relevant hazard when analyzing the third prong. The Court also dismissed Knox Creek’s argument that such an interpretation would change the test to allow every violation to be deemed S&S, because the third prong still required evidence that the hazard was reasonably likely to result in an injury-producing event, and because the second prong was still necessary in the analysis. In applying the legal standard, the Court then found that the S&S determinations were supported by substantial evidence, and denied the petition for review.
COLON HEALTH CTRS. OF AM. v. HAZEL, NO. 14-2283
Decided: January 21, 2016
The Fourth Circuit affirmed the district court’s holding that the certificate requirement neither discriminated against nor placed an undue burden on interstate commerce and granted summary judgment to the Commonwealth of Virginia.
The Commonwealth of Virginia requires medical service providers to obtain a “certificate of public need” in order to establish or expand operations within its borders. The certificate of need (CON) program applies to most health care capital expenditures, but does not cover the replacement of existing equipment. The CON program requires an applicant to show a sufficient public need for its proposed venture in the relevant geographic area. A certificate may not be issued unless the State Health Commissioner has determined that a public need for the project exists. Constructing new facilities or supplementing existing operations without a CON is a Class 1 misdemeanor, punishable by fines of up to $1,000 for each day a service provider is in violation of the statute. Applicants who are dissatisfied with the Commissioner’s decision may seek judicial review.
Colon Health Centers and Progressive Radiology (Appellants) are out-of-state medical providers that desire to establish, via the use of private funds, specialized MRI and CT services in Virginia. Appellants were denied a CON and sought judicial review. The district court ultimately granted summary judgment in favor of the Commonwealth. Appellants argue on appeal, first, Virginia’s CON requirement violates the dormant Commerce Clause by discriminating against interstate commerce in both purpose and effect, and second, Appellants argue that even if the program does not unconstitutionally discriminate, it nevertheless violates the dormant Commerce Clause because it places an undue burden on interstate commerce.
The Commerce Clause delegates Congress the power to regulate commerce among the states. Under the dormant Commerce Clause, the Supreme Court has recognized that there is a limit on the states to erect barriers against interstate trade. This constraint is driven by concerns over “economic protectionism,” which is regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors. When a state statute discriminates against interstate commerce, it must be struck down unless a valid factor unrelated to economic protectionism exists.
Here, the Appellants argued that the program discriminates in both purpose and effect. Concerning purpose, they noted that the law is intended to “protect the economic viability of existing [service] providers” by impeding the development of new medical facilities. However, the Fourth Circuit determined Virginia’s program serves several legitimate public purposes including, “improving health care quality by discouraging the proliferation of underutilized facilities, enabling underserved and indigent populations to access necessary medical services, and encouraging cost-effective consumer spending.” Additionally, Appellants argued that in practice, the CON program “systematically advantages established in-state providers at the expense” of new, primarily out-of-state firms. However, the Fourth Circuit stated that even though the Appellants might have been frustrated by the law, there was no appreciable difference in the treatment of in-state and out-of-state entities. Therefore, the Fourth Circuit decided not to take the potentially limitless step of striking down every state regulatory program that has some alleged adverse impact on market competition.
Even when a law does not facially, in effect, or in purpose discriminate against interstate commerce, the court has undertaken a second analytical step, to make sure none of the law’s incidental burdens on interstate commerce are not clearly excessive in relation to its local benefits. The weighing or quantifying of a law’s benefits and burdens can be a very difficult exercise. A rational basis standard of review is applied in identifying the local benefits to be weighed against incidental burdens on interstate commerce.
Virginia advanced a number of legitimate interests in support of its CON program. First, it argued that the CON program improves healthcare quality. Second, the CON program may benefit underserved and indigent populations’ access to medical care. Third, by reducing competition in highly profitable operations, the program might provide existing hospitals with the revenue they need to support money-losing but important operations. Finally, the CON program reduces capital costs and the costs to consumers of medical services. Although the Appellants offered several arguments as to the burdens that the CON program faced, the Fourth Circuit determined that the burdens did not outweigh the aforementioned local benefits. Under rational basis review, reasonable debates such as this one are resolved in favor of upholding state laws. Therefore, the Fourth Circuit ultimately affirmed the decision of the district court.
Austin T. Reed
U.S. v. MOORE, No. 14-4645
Decided: January 20, 2016
In a case stemming from a murder-for-hire plot, the Fourth Circuit found that the district court did not constructively amend the charges against the defendants through erroneous jury instructions. The Fourth Circuit also found that the district court did not erroneously admit hearsay or character evidence. On that basis, the Fourth Circuit affirmed the district court’s convictions.
In April, 2013, Aaron Wilkinson was stopped by police officers while driving in Charleston, South Carolina. Wilkinson told police that he and a former prison cellmate, Samuel Yenawine, were part of a not-yet completed murder-for-hire plot to kill Nancy Latham (Cannon). As part of this plot, he and Yenawine, with the help of Yenawine’s girlfriend, had rented a car in Kentucky and driven to South Carolina where Yenawine bought a pay-as-you go cell phone, and used it to communicate with a woman who said she would meet with them at a North Charleston motel. Wendy Moore arrived at the motel, rented a room for Yenawine and Wilkinson, and met with Yenawine. Yenawine returned from the meeting with $5,000. Moore was the girlfriend of, and assistant to, Christopher Latham (Latham), a banker and the estranged husband of Cannon. Moore was also Yenawine’s ex-wife. Wilkinson later saw Moore and Yenawine meet, with Yenawine obtaining a manila envelope “hit packet,” with information on Cannon. The contents of the packet were subsequently linked to Latham and Moore, and independent evidence also corroborated Wilkinson’s story. Moore, Yenawine, and Wilkinson were arrested. Yenawine committed suicide in jail two months later.
In August, 2013, a grand jury indicted Moore, Latham, Wilkinson, and Yenawine’s girlfriend, Palmer. Moore and Latham were indicted on various counts, including conspiracy to use interstate commerce facilities in the commission of murder-for-hire and use of such facilities in the commission of murder-for-hire, in violation of 18 U.S.C. § 1958(a). At trial, the jury convicted Moore of all counts against her, and Latham of the use of interstate commerce facilities charge. The district court sentenced Moore to 180 months imprisonment, and Latham to 120 months imprisonment. Moore and Latham appealed, arguing that the court improperly instructed the jury, leading to constructive amendment of the charges against them in violation of their Fifth Amendment right to indictment by a grand jury. Moore and Latham also challenged as improper the court’s admission of hearsay evidence and character evidence.
The Fourth Circuit first found that the court did not constructively amend the conspiracy to use and use of facilities charges against Moore and Latham by improperly instructing the jury. The Fourth Circuit noted that 18 U.S.C. § 1958(a) encompasses two distinct types of charges, one for traveling or causing another to travel in interstate commerce connected to a murder-for-hire, and one for using or causing another to use facilities of interstate commerce. Moore and Latham were changed under the travel prong. In its closing instructions, the district court informed the jury that Moore and Latham were charged under the travel prong, but made two references to the facilities prong in explaining the statute under which Moore and Latham were charged. The Fourth Circuit found that, viewed under the totality of the circumstances, the district court had not constructively amended the charges against Moore and Latham. The majority of the jury instructions did not refer to the facilities prong, the arguments at trial spoke only to the travel prong, and any evidence
of facilities use presented at trial was presented only as substantive evidence of the plot itself, not as evidence for the facilities prong.
The Fourth Circuit next found that the district court did not improperly admit hearsay evidence. The district court admitted testimony from a cellmate of Yenawine’s about a statement Yenawine made before committing suicide in which he discussed the plot. The district court admitted the statement as a statement against interest. Moore and Latham challenged the trustworthiness of the statement. The Fourth Circuit found the statement trustworthy because Yenawine had no reason to lie to his cellmate, and other evidence corroborated his statement. The Fourth Circuit also found that admission of the statement did not violate the Sixth Amendment’s confrontation clause, because statements between prisoners are not testimonial.
Finally, the Fourth Circuit upheld the district court’s admission of various pieces of character evidence against Moore. The Fourth Circuit found that Moore and Latham had not established any error in admitting the evidence, and that even if the admission of the character evidence did rise to the level of plain error, its admission did not have a serious effect on the proceedings. On this basis, the Fourth Circuit upheld the district court’s convictions of Moore and Latham.
Katherine H. Flynn
MCFARLAND v. WELLS FARGO BANK, NO. 14-2126
Decided: January 15, 2016
The Fourth Circuit remanded the case back to the district court, so it could consider whether Plaintiff Philip McFarland ‘s (“McFarland”) mortgage agreement was unconscionably induced.
McFarland purchased his Hedgesville, West Virginia home in 2004, for approximately $110,000. In June of 2006, McFarland entered into discussions with Greentree Mortgage Corporation (“Greentree”), a third-party mortgage lender. McFarland was informed that the market value of his home and gone up to $202,000 since the time of purchase. McFarland entered into two secured loan agreements. The first was a mortgage agreement with Wells Fargo Bank (“Wells Fargo”), which is the subject of this dispute. The mortgage had a principal amount of $181,800 and an adjustable interest rate that started at 7.75 percent and could increase to 13.75 percent (“Wells Fargo Loan”). The second mortgage was with Greentree. McFarland used the proceeds of those two loans to consolidate all of his debts. In 2007, McFarland began to fall behind on his mortgage payments. In May of 2010, McFarland and Wells Fargo entered into a loan modification in May 2010. McFarland was still unable to make his payments. In 2012, as a result, Wells Fargo foreclosed on McFarland’s home. McFarland brought this suit against Greentree and Wells Fargo, as well as U.S. Bank National Association (“U.S. Bank”).
McFarland raised two “unconscionable contract” arguments in his complaint. McFarland argued that either claim could support an unconsionability finding under the West Virginia Consumer Credit and Protection Act, W. Va Code § 46 A-1-101, et seq. (“WVCCPA”). After several months of extensive discovery, McFarland eventually reached a settlement with Greentree. His case against both Wells Fargo and U.S. Bank (“the Banks”) continued. The district court granted the Banks’ motion for summary judgment and dismissed McFarland’s unconscionable contract claim. The district court found that neither of McFarland’s unconscionable claims provided a basis for a finding of substantive unconscionability because a refinanced loan that exceeds the value of a home is not evidence of substantive unconsionability under West Virginia law. The court found that in light of its finding of no substantive unconscionability, there was no need to consider McFarland’s allegations regarding the process that led to contract formation.
On appeal, the Fourth Circuit agreed with the district court that the amount of a mortgage loan, by itself, cannot show substantive unconscionability under West Virginia law. As a result, the Court found that McFarland had not otherwise made a showing of substantive unconsionability. The Court also agreed with the district court that West Virginia law requires a showing of substantive unconscionability to make out a traditional claim that a contract itself is unconscionable. However, the Court disagreed as to the district court’s interpretation of the WVCCPA and whether it requires a showing of substantive unfairness. The Court, unlike the district court, found that the WVCCPA allows for claims of “unconscionable inducement” even when the substantive terms of a contract are not themselves unfair. The Court held that the district court erred in dismissing McFarland’s claim of unconscionable inducement on the “grounds that substantive unconscionability is a necessary predicate of a finding of unconscionability under the WVCCPA.” The Court took no views as to the merits of McFarland’s unconscionable inducement claim, but remanded the case to the district court to consider McFarland’s evidence that his loan agreement was “induced by misrepresentations” and to determine whether he should be able to proceed with his suit against Wells Fargo and U.S. Bank.
Accordingly, the Court affirmed the judgment of the district court in part and vacated and remanded in part for further proceedings.
DONNA CISSON v. C.R. BARD, INC., NO. 15-1102, NO. 15-1137
Decided: January 14, 2016
The Fourth Circuit affirmed the district court on all issues.
This case arose from a lawsuit that Donna Cisson (“Cisson”) filed against C.R. Bard, Inc. (“Bard”), after she received a transvaginal mesh and suffered complications from the surgery. Her suit was added to others that had been filed against Bard, and the jury found for Cisson on the design defect and failure to warn claims and for Bard on the consortium claims. Bard appealed.
The Fourth Circuit begins by first examining Bard’s abuse of discretion claim concerning the district court’s decision to exclude Bard’s evidence that it had complied with the FDA’s 510(k) process. The Court affirmed the ruling based on Federal Rule of Evidence 403. It looked to Georgia’s “risk-utility” test, stating that the “probative value of that evidence must depend on the extent to which the regulatory framework safeguards consumer safety.” The Court then determined that the weight of other courts’ opinions on this issue favored finding that the evidence Bard proffered had little evidentiary value, and concluded that the district court had not abused its discretion by excluding the evidence of the 501(k) clearance, because the district court had found that introducing such evidence would have resulted in “very substantial dangers of misleading the jury and confusing the issues.” The Court next turned to the issue of whether the district court erred when it “overruled Bard’s hearsay objections to the admission of a MSDS pertaining to polypropylene.” Although the Court reversed the district court’s rulings about the hearsay exceptions, it affirmed the decision to admit the evidence as non-hearsay. Cisson argued that the MSDS was used to show that Phillips made the warning statement and that Bard received it. The Court then turned to the issue of whether the district court erred in its instruction to the jury on causation. The Court found that the district court’s instruction met the appropriate standard, that it was “accurate on the law and did not confuse or mislead the jury,” and that there was ample evidence for the jury to base its causation finding. The district court defined the burden of proof for proximate cause as a preponderance of the evidence in accordance with Georgia’s pattern jury instruction, and the Court found that Bard did not submit any evidence that this standard was incorrect. Furthermore, the Court found that Cisson presented ample evidence that supported a jury finding that the design defect in the mesh caused her injuries, including numerous expert and non-expert testimonies. Next, Bard argued that the damages award in this case were constitutionally excessive. The Court looked at the three guideposts that the Supreme had set forth for reviewing the constitutionality of punitive damages awards, and noted that Bard challenged based entirely on the second guidepost, because the punitive award was seven times the compensatory award. The Court, however, found that it was not constitutionally excessive, and declined to adopt a bright-line ratio rule.
Finally, the Court examined Cisson’s cross-appeal that challenged the district court’s ruling that a Georgia split-recovery statute did not violate the Takings Clause of the Fifth Amendment to the United States Constitution. However, the Court found that Cisson failed to provide proper support for her theory that she had a vested property interest in the entire punitive damages award. Therefore, the Fourth Circuit affirmed the district court on all issues raised in the appeal.
ESTATE OF ARMSTRONG v. VILL. OF PINEHURST, NO. 15-1191
Decided: January 11, 2016
The Fourth Circuit held that the Appellees (Village of Pinehurst) used unconstitutionally excessive force when seizing Armstrong and agreed with the district court that the Appellees were entitled to qualified immunity. Therefore, the district court’s grant of summary judgment in the Appellees’ favor was affirmed.
Armstrong, who suffered from bipolar disorder and paranoid schizophrenia, had been off of his medicine for several days. Armstrong’s sister brought him into the hospital, and when he fled, the Pinehurst Police were called. When the police arrived, Armstrong’s commitment order had not yet been finalized, and the parties engaged in conversation in which Armstrong was acting weirdly. As soon as the commitment papers were complete, the police advanced toward Armstrong, where he wrapped himself around a post and refused to budge. After pleading with Armstrong for thirty seconds, the officers tased Armstrong a total of five times over two minutes and pulled Armstrong off of the post. While struggling with Armstrong to place him in handcuffs, Armstrong complained he was being choked. After subduing Armstrong, Armstrong’s sister noticed that he was facedown and unresponsive. His skin was blue, and he did not appear to be breathing. The officers administered CPR, called EMS, and the hospital pronounced him dead shortly after his admission.
Armstrong’s Estate (Appellant) sued each police officer involved in Armstrong’s seizure, pursuant to 42 U.S.C. § 1983, alleging that the officers used excessive force, in violation of Armstrong’s Fourth and Fourteenth Amendment rights, when seizing him. The district court granted summary judgment to the Appellees stating that there was not likely a constitutional violation, but if there was, the defendants were entitled to qualified immunity. This appeal followed. Qualified immunity is a protection for officers that commit constitutional violations but who, in light of clearly established law, could reasonably believe that their actions were lawful. This immunity involves two inquiries: “(1) whether the plaintiff has established the violation of constitutional right, and (2) whether that right was clearly established at the time of the alleged violation.” In order to survive summary judgment, both of these questions must be answered in the affirmative.
The Fourth Circuit first inquired as to whether the facts alleged, taken in the light most favorable to the party asserting the injury, show the officer’s conduct violated a constitutional right. When determining if excessive force has been used, the court looks at first, “the severity of the crime at issue”; second, the extent to which “the suspect poses an immediate threat to the safety of the officers or others”; and last, “whether [the suspect] is actively resisting arrest or attempting to evade arrest by flight.” The first factor weighs heavily in Armstrong’s favor because no crime was actually committed, and even if his resisting was determined to be a crime, it was a minor one, and the factor would still weigh in Armstrong’s favor. It is important to note that the conduct used to treat a mentally ill person is different than the conduct used to treat someone who has committed a crime. The second and third factors, whether Armstrong threatened the safety of others and resisted seizure, do justify some, limited, use of force. However, the degree of force needed is enough to prevent Armstrong’s flight, and it was clear Armstrong was not going anywhere, and the only risk he posed was to himself. Further, the officers only spoke to Armstrong for thirty seconds to attempt to have him let go of the pole before tasing him. The use of a taser is unreasonable force in response to resistance that does not raise a risk of immediate danger. The proportionality of the force in light of the circumstances show that the amount of force Appellees used was not objectively reasonable. Here, the Fourth Circuit determined that when seizing Armstrong, the Appellees used unreasonably excessive force in violation of the Fourth Amendment.
However, the district court’s grant of summary judgment was still proper because Appellees were entitled to qualified immunity. A plaintiff can prove that an official has violated his rights, but an official is still entitled to qualified immunity. After defining the constitutional right, the court must ask whether it was clearly established at the time the Appellees acted. This requirement is satisfied when it is clear that every reasonable official would have understood that what he or she was doing would violate that right. Unlawfulness must be apparent. Here, the constitutional right in question is Armstrong’s right not be subjected to tasing while offering stationary and non-violent resistance to a lawful seizure. While the precedent supported the conclusion that Appellees violated that right while seizing Armstrong, the Fourth Circuit acknowledged that this conclusion was not so settled at the time they acted that “every reasonable official would have understood that tasing Armstrong was unconstitutional. Case law indicated that Appellees were treading close to the constitutional line; however, the case law did not have sufficiently clear guidance to forfeit their qualified immunity. Therefore, the Fourth Circuit affirmed the district court’s grant of summary judgment to the Appellees.
The Fourth Circuit used this opinion to clarify when the use of a taser amounts to excessive force, at least in some circumstances. A taser is expected to inflict plain or injury when it is used. It, therefore, may only be deployed when a police officer is confronted with a circumstance that creates an immediate safety threat and that is reasonably likely to be cured using a taser. A seizure suspect does not create a sufficient risk because he or she is doing something that can be characterized as resistance, even when that resistance includes physically preventing an officer’s manipulations of his body. Safety risks do not necessarily arise because there is erratic behavior or mental illness. Importantly, when a seizure is intended to prevent a mentally ill individual from harming himself, the officer affecting the seizure has a lessened interest in deploying potentially harmful force. Therefore, during the course of the seizure of a mentally ill person who is only in danger to himself, police officers who choose to use a taser in the face of stationary and non-violent resistance to being handcuffed have used unreasonably excessive force. Even though qualified immunity protected the officers in this situation, law enforcement officers should now be on notice that this type of taser use constitutes a violation of the Fourth Amendment.
Austin T. Reed
BAUER v. LYNCH, No. 14-2323
Decided: January 11, 2016
In a Title VII case regarding the physical fitness test (PFT) administered to New Agent Trainees (trainees) at the Federal Bureau of Investigation (FBI), the Fourth Circuit held that the district court did not apply the correct legal rule. On that basis, the Fourth Circuit vacated the district court’s grant of summary judgment to Bauer, and remanded the case.
The FBI requires all trainees to pass a PFT twice, once to enter the Academy, and a second time before graduation. The PFT ensures that trainees are able to meet the demands of the Academy. Over the years, the FBI has used different measures of physical fitness. In 2003, the FBI developed the current test, which consists of four elements completed in one test: “one minute of sit-ups; a 300-meter sprint; push-ups to exhaustion; and a 1.5 mile run. The FBI administered the test to the 2003 classes at the Academy as a pilot program to establish standards, and as part of standard creation process, created different minimum standards for men and women based on the physiological differences between the genders. Based on the results of the pilot program, the FBI created a point system to score each of the component events. Trainees achieved one point for meeting the minimum standard, three points for achieving the mean, and four to ten points for above-average performance. To pass the PFT, trainees had to score 12 points, with at least one point in each event. The PFT was implemented in 2004.
In October, 2008, Jay Bauer took the PFT to gain entry to the Academy, and failed. Though he earned 16 points overall, he only completed 25 push-ups, 5 short of the 30 required for men (only 14 push-ups were required for women, and Bauer more than met that number in each of his tests). He retook the test in January, 2009, and passed. He did well at the Academy, but despite attempting the PFT five times, he failed to meet the minimum number of push-ups, and thus failed the exam. The FBI gave him the option to resign and possibly be employed by the FBI in the future, resign permanently, or be fired. Bauer chose to resign with the possibility of future employment. Shortly thereafter, the FBI hired him as an Intelligence Analyst.
In April, 2012, Bauer filed suit against the Attorney General, alleging that the FBI violated two provisions of Title VII which prohibited discrimination by federal employers, and the use of “different cutoff scores on employment tests on the basis of sex.” Bauer and the Attorney General both filed for summary judgment, Bauer alleging that the gender-normed standards of the PFT were facially discriminatory, and the Attorney General claiming that the standards did not discriminate because the burden of compliance with the standards was equal on both sexes. The District Court granted summary judgment to Bauer. The Attorney General appealed, arguing that the district court applied the wrong rule to decide the case.
The Fourth Circuit held that the district court applied the wrong rule to the case. The Fourth Circuit began by noting that there are two different tests which have been developed to decide whether a practice facially discriminates on the basis of sex. Under City of Los Angeles, Dep’t of Water & Power v. Manhart, a practice is discriminatory when, but for a person’s sex, their treatment would have been different. Under Gerdom v. Continental Airlines, Inc., a practice is not discriminatory if it applies an equal burden of compliance to both sexes. The Fourth Circuit noted that the district court here applied the Manhart test. It also noted that in cases similar to the one here, including two involving the FBI’s PFT (both the current and previous PFT), the courts had not found Title VII violations. The Court then reasoned that men and women are physically different, and thus a man and a woman who are equally fit may show different results on a fitness test. Thus, a fitness test would discriminate on the basis of sex if it asked men and women to demonstrate different levels of fitness. On that basis, the Fourth Circuit held that the equally burdensome test of Gerdom was the correct test to apply to the PFT. The Fourth Circuit thus vacated the district court’s grant of summary judgment to Bauer, and remanded the case.
Katherine H. Flynn
ASKEW v. HAMPTON ROADS FIN. CO., NO. 14-1384
Decided: January 11, 2016
The Fourth Circuit affirmed the district court’s judgment with regard to Plaintiff Dante Askew’s (“Askew”) Maryland Credit Grantor Closed End Credit Provision (“CLEC”) claim and his breach of contract claim. However, the Court reversed the district court’s order granting summary judgment to Defendant Hampton Roads Finance Company “HRFC”) for Askew’s Maryland Consumer Debt Collection Act (“MCDCA”) claim and remanded for further proceedings.
In 2008, Askew entered into a contract between himself and a car dealership financing the purchase of a used car. The dealership subsequently assigned the contract to HRFC. The contract, which was subject to the CLEC’s maximum allowable rate of 24%, charged a 26.99% interest rate. In August 2010, HRFC recognized this error and informed Askew via letter that HRFC had credited his account $845.40. After receiving the letter from HRFC, Askew fell behind on his payments, leading to HRFC to take steps to collect on his account. Askew then filed suit in state court alleging violations of CLEC, MCDCA, as well as breach of contract based on HRFC’s alleged failure to comply with CLEC. HRFC removed the case to federal court. After limited discovery, HRFC moved for summary judgment, which the district court granted.
On appeal, the Court agreed with the district court regarding its grant of summary judgment to HRFC on Askew’s CLEC claims and breach of contract claim. The Court first gave a brief summary of CLEC’s framework. Creditors doing business in Maryland may opt to make a loan governed by CLEC if they “make a written election to that effect.” If the statute applies, section 12-1003(a) sets a maximum interest rate of 24%. Askew presented three arguments to the Court with respect to CLEC. First, he argued that HRFC violated CLEC by failing to expressly disclose in the contract an interest rate below the statutory maximum. Second, Askew contends that the “discovery rule” from the statute of limitations should apply to the safe harbor of CLEC. Finally, Askew argues that section 12-1020 of the CLEC provides HRFC no protection because HRFC failed to properly notify him of the interest rate error and it failed to make the proper corrections to the error. As for Askew’s first argument, the Court held that HRFC’s mere failure to disclose an interest rate below CLEC’s statutory maximum is not a distinct violation of section 12-1003(a) for which liability can be imposed. Likewise, the Court found that the district court properly found that HRFC was not liable under CLEC, as long as HRFC properly notified Askew and made proper adjustments. As to that, the Court held that HRFC properly complied with section 12-1020’s notice requirements. The Court also determined that the district court properly granted HRFC summary judgment for Askew’s breach of contract claim because the contract incorporated all of CLEC, including its safe harbors. Therefore, the Court determined that a defense under CLEC precludes contract liable for HRFC.
The Court, however, found that the district court erred in granting HRFC summary judgment as to Askew’s MCDCA claim. The Court reasoned that HRFC informed Askew at least three times that it had taken some legal action against him when, according to Askew, it had not. As a result, the Court held that a jury could find that HFRC’s alleged conduct, “at least in the aggregate, could reasonably be expected to abuse or harass Askew,” in violation of the MCDCA. Accordingly, the Fourth Circuit reversed the district court’s order granting summary judgment to HRFC on Askew’s MCDCA claim.
ROUTE 231, LLC, JOHN D. CARR, TAX MATTERS PARTNER v. COMMISSIONER OF INTERNAL REVENUE, NO. 14-1983
Decided: January 8, 2016
The Fourth Circuit affirmed the decision of the Tax Court
This case stemmed from Route 231’s filing of its federal tax return in 2005, and the Commissioner of the IRS issued a Final Partnership Administrative adjustment (“FPAA”) stating that one of its transactions from its member Virginia Conservation Tax Credit FD LLLP (“Virginia Conservation”) should have been listed as gross income and not as a capital contribution. Route 231 challenged this determination, and the Tax Court found that the transaction was a “sale” and should have been listed as gross income. Route 231 appealed.
The Fourth Circuit first looked at Route 231’s argument that the “Virginia tax credit transaction with Virignia Conservation constituted a nontaxable capital contribution followed by a permissible allocation of partnership assets to a bona fide partner.” In making its determination, the Court first looked at whether the transaction was a “disguised sale,” and listed seeral relevant factors to look at when amking this determination. The Court also noted that there was a presumption of a sale created in regulation § 1.707-3(b)(2) when the partner/partnership transfers occurred within a two-year period, unless the facts and circumstances established otherwise, a presmption that placed a high burden on a partnership to disprove that a sale had occurred. Although Route 231 attempted to distinguish the previous Virginia Historic from this case and say that because Virginia Conservation is a bona fide partner, the partner/partnership transactions are immune from the scope of § 707. However, the Court says this argument misses the point, because the analysis under § 707 looks at the nature of the transaction itself and not the nature of the participants in the transaction. In looking at the transaction, the Court first determined whether the Virginia tax credits are property within the scope of § 707, and agree with the Tax Court that they are. It next looked at whether the transfer of the property was a “sale,” and because the exchange of tax credits for money occurred within a two-year period, the sale presumption applied. The Court listed the Tax Court’s list of factors that showed the transaction was a “sale,” and agreed with the Tax Court that those factors point to the conclusion that the transaction was a “sale,” and therefore should have been listed as “income.”
Furthermore, the Court agreed with the Tax Court that the tax year in which the income should have been reported was 2005, not 2006 as Route 231 contended. First, the Court noted that Route 231 listed on its 2005 tax form that it received the money from the sale in 2005. Under the principles of the tax code, the Court firmly stated that a “taxpayer may be barred from taking one factual position in a tax return and then taking an inconsistent position later in a court proceeding in an effort to avoid liability based on the altered tax consequences of the original position.” Additionally, the Court found that Virginia Conservation had “legal title in, an equity interest in, and the right to possess the tax credits as soon as Route 231 earned them,” according to the terms of the agreement between them. Finally, the Court said that Route 231’s use of the accrual method of accounting showed that the sale occurred in 2005. For these reasons, the Fourth Circuit affirmed the finding of the Tax Court.
U.S. v. WHITE, NO. 14-4375
Decided: January 7, 2016
The Fourth Circuit affirmed the jury verdict convicting the defendant of three counts in violation of 18 U.S.C. § 875(b), and one count in violation of § 875(c). Additionally, the Fourth Circuit affirmed the district court’s 92-month term of imprisonment.
White, the defendant, has previously been imprisoned for making threatening phone calls and sending intimidating letters. During his incarceration, his relationship with his now-ex-wife, MW, deteriorated and led to a separation in which MW agreed to pay White alimony. While White was temporarily out of prison on supervised release, he fled to Mexico with an acquaintance named Sabrina Gnos. After MW learned that White had fled the country, she stopped making the alimony payments for fear that she would be aiding a fugitive. White then attempted to persuade MW to continuing the payments and became the basis of the indictment in this case. White sent several emails demanding that his alimony payments be made, or he was going to have someone use physical force to harm MW. He even asked Gnos to help him find someone to help force her to make these payments. White was then arrested in Mexico and was deported to the United States. He was charged with four counts of violating 18 U.S.C. § 875(b), which penalizes “[w]hoever, with intent to extort from any person…any money…,transmits in…foreign commerce any communication containing any threat to…injure the person of another[.]” At trial, despite the testimony from Gnos, White claimed that he did not send those emails. The jury returned a verdict finding him guilty of violating § 875(b) on three counts and violating § 875(c) on another count, which is a lesser crime than § 875(b) that does not require the person making the threat to have the “intent to extort.” The trial judge sentenced White to 92 months in prison, at the low end of the United States Sentencing Guidelines range.
On appeal, White attacks the legal requirements for conviction pursuant to § 875(b) and (c). White argues that the indictment against him was legally deficient and should have been dismissed because he could not have intended to extort alimony payments to which he was legally entitled.
First, the Fourth Circuit looked at the § 875(c) conviction. The district court instructed the jury that it could convict White pursuant to § 875(c) if he transmitted a true threat in interstate commerce, without regard to his subject intent. However, according to the Supreme Court, in Elonis v. United States, a conviction pursuant to § 875(c) requires: (1) that the defendant knowingly transmitted the communication in interstate or foreign commerce; (2) that the defendant subjectively intended for the communication as a threat; and (3) that the content of the communication contained a “true threat” to kidnap or injure. Even though the district court omitted the issue as to whether White sent the email containing the threat with the knowledge that the communication would be viewed as a threat, the Fourth Circuit found this error to be harmless. Because the record contained no evidence that would rationally lead a jury to conclude the sender of the email intended to do anything other than threaten the recipient, and because the jury concluded beyond a reasonable doubt that White was the sender, the district court’s error in instructing the jury was harmless.
Next, the Fourth Circuit reviewed White’s three § 875(b) convictions. Similar to § 875(c), this statute prohibits the transmission in interstate or foreign commerce of threats to kidnap or injure; however, it also requires the threatening communication to be sent “with intent to extort from any person…any money or thing of value.” The Fourth Circuit held that the intent to extort for purposes of § 875(b) is the intent to procure something of value through the use of a wrongful threat to kidnap or injure the person of another. Therefore, the Fourth Circuit concluded that one cannot have the intent to scare someone into relinquishing property or something of value by communicating a wrongful threat to kidnap or injure without also intending the communication to be threatening. Here, since the jury charge required the finding that White intended to threaten MW to induce her to pay the alimony, there was no error in the instruction. White also argued that he could not have intended to extort MW because he had a “claim of right” to the alimony payments. Again, the intent to extort is the intent to procure something of value through the use of a wrongful threat to kidnap or injure the person of another. The key word is “wrongful.” The Fourth Circuit stated the “claim of right” defense applies to “legitimate economic threats” and not threats of violence. Therefore, the legal framework was proper.
Further, the Fourth Circuit found no abuse of discretion in the district court’s use of an anonymous jury due to White’s prior convictions reflecting his willingness to use threats and personal information to intimidate people involved in judicial proceedings. The district court took appropriate safeguards to protecting White’s right to a fair trial by instructing the jurors that the anonymity was to prevent the press from communicating with them during trial. Additionally, the Fourth Circuit determined the admittance of the Gnos notes into evidence created a harmless error, even if the notes were determined to be inadmissible hearsay. Here, the weight of all of the evidence was sufficient for a jury to convict White on all of the charges, and the district court’s denial of White’s motion for judgment of acquittal was appropriate.
Finally, White argued that his sentencing was unreasonable. He first asserts that the district court erred in applying the two-level enhancement for obstruction of justice, rendering his sentence procedurally unreasonable. Second, White claimed his sentence was substantively unreasonable because the district court improperly considered his political views. Third, White contended that the district court erred by failing to group his counts of conviction under § 3D1.2 of the Sentencing Guidelines. However, the Fourth Circuit found no merit in each of these arguments, and the 92-month sentence, on the low end of the Sentencing Guidelines was appropriate. Even though there were a few harmless errors from the district court, the Fourth Circuit ended by stating, “A defendant is entitled to a fair trial, not a perfect one.” Here, White received a fair trial, and there was no reason to disturb the jury’s verdict or the district court’s sentence.
Austin T. Reed
U.S. v. MARTINOVICH, No. 13-4828
Decided: January 7, 2016
In a case stemming from the defrauding of investors, the Fourth Circuit held that the district court erred by interfering with the trial, but that the error did not lead to an unfair trial. The Fourth Circuit also held that the district court incorrectly treated the United States Sentencing Guidelines (USSG) as mandatory. On that basis, the Fourth Circuit affirmed the defendant’s conviction, vacated his sentence, and remanded the case, ordering that it be assigned to a new judge.
Jeffrey Martinovich was a licensed broker who owned an investment services company. From about late 2006 to early 2009, Martinovich inflated the values of stock, resulting in increased fees to him. After investigating Martinovich’s company, in May, 2010, the Financial Industry Regulatory Authority forced the company to close, and Martinovich gave up his broker’s license. In February, 2011, Martinovich filed for bankruptcy. During the bankruptcy proceedings, he failed to disclose income and losses from gambling.
In October, 2012, Martinovich was charged with lying in a bankruptcy proceeding, conspiracy to commit mail and wire fraud, and multiple counts of mail and wire fraud. During his trial, the court often interrupted and challenged counsel, but Martinovich never objected. The trial jury found Martinovich guilty on one conspiracy count, four counts of wire fraud, five counts of mail fraud, and seven counts of money laundering, not guilty on three more counts, and was unable to reach a verdict on an additional five counts. Over the disagreement of both Martinovich and the government, the district court repeatedly indicated at sentencing that the USSG were mandatory. The district court found that Martinovich’s USSG guideline was 135-168 months imprisonment, and sentenced him to 140 months imprisonment. Martinovich appealed, arguing that the court’s interruptions deprived him of a fair trial, and that the district court erred by treating the USSG as mandatory.
The Fourth Circuit first found, under the plain error standard, that the court’s interference was error, but that the error did not deprive Martinovich of a fair trial. The Fourth Circuit noted the repeated times the court interrupted counsel, interfered with counsel’s presentation of evidence, and challenged counsel’s tactics, finding that “the district court’s repeated comments were imprudent and poorly conveyed.” The Fourth Circuit found that while the court’s behavior was error, the error did not lead to an unfair trial. The Court based this holding on the fact that district courts are generally entitled to manage trials, the court warned jurors that its opinions and comments should not influence how they thought about or decided the case, Martinovich did not object to the court’s behavior at the time, and the evidence against Martinovich was overwhelming.
The Fourth Circuit then found that the district court erred by treating the USSG as mandatory. Under case law, the Court noted, treating the USSG as mandatory makes the sentence imposed procedurally unreasonable, and subject to being vacated. Here, the district court repeatedly said that the USSG left it no discretion, or that what discretion it did have was disfavored. The Court then held that the error in treating the USSG as mandatory was not harmless, because if the district court had treated the USSG as advisory, it might have imposed a shorter sentence on Martinovich. On this basis, the Fourth Circuit affirmed Martinovich’s convictions, vacated his sentence, and remanded the case. In addition, the Fourth Circuit ordered that the resentencing be done by a different judge to preserve the appearance of fairness.
Judge Wynn wrote a separate concurring opinion in which he noted that judges “must avoid even the appearance of improper interference and excessive interruptions of court proceedings.” He noted that, “[a]t some point, repeated injudicious conduct must be recognized by this Court as a compelling basis for finding plain error.”
Katherine H. Flynn