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Week 17 (2018)

Week of April 23, 2018 through April 27, 2018

Cunningham v. Gen. Dynamics Info. Tech., Inc. (Floyd 4/24/2018): The Fourth Circuit held that Yearsley immunity is a jurisdictional bar to suit for a government contractor whose actions were validly authorized and conferred by the government. Accordingly, the court affirmed the district court’s granting of a Rule 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction. Full Opinion

Variety Stores, Inc. v. Wal-Mart Stores, Inc. (Floyd 4/24/2018): The Fourth Circuit held that the non-movant presented sufficient evidence to raise a genuine dispute of material fact as to whether a likelihood of confusion existed in a trademark infringement case. Therefore, the court vacated the district court’s granting of partial summary judgment, as well as dismissing every subsequent order to the summary judgment ruling and remanded for further proceedings. Full Opinion

United States v. Cohen (King 4/25/18) (amended 4/25/18): The Fourth Circuit held that a valid and enforceable appeal waiver barred the defendant’s challenge to the district court’s denial of his Farmer hearing request. Furthermore, the defendant’s motion to rescind pro se status and appoint counsel for the defendant’s final sentencing hearing was appropriately denied since the defendant simply wished to delay the proceedings. Therefore, the court dismissed all contentions of error and affirmed the district court for the Sixth Amendment issue and Apprendi issue. Full Opinion

Woods v. Berryhill (Motz 4/26/18): The Fourth Circuit held that a disability determination by the North Carolina Department of Health and Human Services (NCDHHS) deserves substantial weight in determining disability for Social Security purposes. An Administrative Law Judge (ALJ) may afford less than substantial weight to a NCDHHS disability decision by giving persuasive, specific, and valid reasons for doing so that are supported by the record. Since the ALJ afforded little weight to the NCDHHS, this court vacated the judgment of the district court and remanded the case for further administrative proceedings. Full Opinion

Bakery & Confectionary Union v. Just Born II, Inc. (Agee 4/26/18): The Fourth Circuit held that an entity remains a bargaining party even after a collateral bargaining agreement expires, requiring the entity to continue to contribute to a pension fund that applied at the time the collateral bargaining agreement expired. Additionally, the court held that an entity’s affirmative defenses sounding in fraud must satisfy the Rule 9(b) standard, thus requiring support to the defenses with sufficient particularity. As a result, the court affirmed the judgment of the district court. Full Opinion

 Highlight Case

Am. Entertainers, L.L.C. v. City of Rocky Mount, N. Carolina, No. 17-1577

Decided: April 27, 2018

The Fourth Circuit held that an overbreadth challenge to a Rocky Mount Ordinance passed intermediate scrutiny since the licensing requirement materially advanced a substantial governmental interest and the licensing requirement was narrowly tailored to serve Rocky Mount’s legitimate interest. Additionally, the Fourth Circuit declined to recognize a First Amendment right for eighteen- to twenty-one years to own an adult business. The court reasoned that the Ordinance’s age restriction is rationally related to Rocky Mount’s interest in ensuring that sexually-oriented-business owners are of legal drinking age since alcohol is available at most of these venues.  However, the court held that a license denial provision that allows a police chief to choose on a case-by-case basis which particular laws to consider in evaluating applications sweeps too broadly and thus is unconstitutional.

On appeal, American Entertainers, L.L.C. asked the Fourth Circuit to hold that the licensing regulation, in its entirety, violates the First Amendment on overbreadth grounds. The City of Rocky Mount, North Carolina regulates “sexually oriented businesses” by requiring those business to obtain a license prior to operation. American Entertainers challenged this licensing requirement based on overbreadth grounds because it potentially requires licensure of venues that display “mainstream” performances such as ballets, concerts, and theatrical productions. The court reasoned that the level of scrutiny a court applies in cases such as this is intermediate scrutiny. Therefore, the court reasoned that Rocky Mount has a substantial interest in regulating exotic dancing because this type of entertainment has a long history of deleterious effects. Additionally, the court reasoned that the licensing provisions materially advance this substantial interest since the licensing fee helps to subsidize the increased safety-enforcement costs that sexually oriented businesses require. Accordingly, the licensing provision was held to be sufficiently narrowly tailored to satisfy intermediate scrutiny.

American Entertainers, L.L.C additionally asked the Fourth Circuit to hold that one of the Ordinance’s six license-denial provisions unconstitutional. The court agreed with American Entertainers as to this point because the denial provision vested impermissible discretion in the police chief to choose on a case-by-case basis which laws apply in reviewing a particular application and was thus too broad to survive constitutional scrutiny. Given that there were no guidelines to help the police chief make objective determinations, the court held that this provision was unconstitutional.

American Entertainers last argument on appeal concerned the provision that only those age 21 or over may be business owners of a sexually oriented business. American Entertainers argued that this infringes upon equal protection and the First Amendment rights of adult citizens to free expression. The court reasoned that rational-basis review applies, and upon applying that standard, the Ordinance’s age restriction is rationally related to Rocky Mount’s interest in ensuring that sexually oriented business owners are of legal drinking age, given alcohol’s availability at these types of businesses.

Accordingly, the Fourth Circuit affirmed the district court’s award of judgment in favor of Rocky Mount regarding American Entertainers’ overbreadth and age-restriction challenges; however, vacated and remanded the case to determine the extent the provision regarding the police chief’s power is severable from the remainder of the Ordinance.

Full Opinion

Ryan W. Van Buren