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Week 33 (2017)

Week of August 14, 2017 through August 18, 2017

Under Seal 1 v. United States (per curiam 8/18/2017): The Fourth Circuit held that subpoenas demanding a criminal defense team divulge who gave them fraudulent documents and how those documents were given to them is fact work product that may nonetheless be compelled because it falls under the crime-fraud exception to the work-product privilege. However, the government may not ask a criminal defense team a general question about what a specific party under investigation told them, because a lawyer’s recollection of a witness interview constitutes opinion work product. The court drew a line between asking an attorney to divulge facts—either noticed by or communicated to her—and asking an attorney to recall generally what was said in an interview. Thus, the court affirmed in part and reversed in part the district court’s denial of a motion to quash grand jury subpoenas demanding testimony of a criminal defendant’s attorney and investigator. Full Opinion

US v. William Chamberlain (Wynn 8/18/2017): The Fourth Circuit held that, by its plain text, 21 U.S.C. § 853(e) permits the government to obtain a pretrial restraining order over only those assets of a criminal defendant that are directly subject to forfeiture as property traceable to the charged offense. The court thus overruled its precedents to the contrary, United States v. McKinney (In re Billman), 915 F.2d 916 (4th Cir. 1990), cert. denied, 500 U.S. 952 (1991) and United States v. Bollin, 264 F.3d 391, 421–22 (4th Cir. 2001), and vacated the district court’s order relying on those authorities. Full Opinion

M.L. v. Dr. Jack Smith (Agee 8/14/2017): The Fourth Circuit held that neither the Individuals with Disabilities Education Act (“IDEA”), 20 U.S.C. § 1400 et seq., nor Maryland law required a public school system to provide any religious and cultural instruction to disabled students as part of a “free appropriate public education” (“FAPE”). Parents of a minor special needs student requested the child be instructed in the customs and practices of Orthodox Judaism, but the school district declined to do so. The court agreed with the school district, reasoning that IDEA does not contemplate how a student may absorb such instruction at home, nor does it require a public school to account for every deficiency a disabled student might possess. The court thus affirmed the judgment of the district court denying the minor’s motion for summary judgment under IDEA and granting summary judgment to the superintendent of the school district. Full Opinion

Peggy Hill v. Barry Coggins (Floyd 8/14/2017): The Fourth Circuit held that zoo visitors may bring suit against a zoo, alleging an unlawful taking due to poor maintenance of its bears that are protected by the Endangered Species Act (“ESA”), 16 U.S.C. § 1538 et seq. Furthermore, the first exception to the definition of “harass” as it applies to regulatory takings includes both a requirement that animal husbandry practices be “generally accepted” and that they meet or exceed the minimum standards for facilities and care under the Animal Welfare Act (“AWA”). The court reserved judgment of the zoo visitors’ argument that a taking occurred due to the zoo “harming” the grizzly bears because the unresolved harassment claim contains less demanding evidentiary requirements. Because the district court engaged in incorrect legal analysis as to the plaintiffs’ harassment argument, the Fourth Circuit vacated the district court’s ruling against the zoo visitors and remanded the case for further proceedings. Full Opinion

Retirement Committee of DAK v. Mark Brewer (Agee 8/14/2017): The Fourth circuit held a retirement plan that subsidizes early retirement benefits only in an annuity form and separately calculates any lump sum amount as an unsubsidized benefit does not violate the the Employee Retirement Income Security Act’s (“ERISA”) anti-cutback rule because it does not eliminate or reduce an early retirement benefit that has already accrued. Here, a company sought to recover overpayment of retirement benefits to several employees. The court held all three elements of the company’s equitable restitution claim under ERISA were established as a matter of law because the district court correctly applied the plain language of a Retirement Plan in determining the Plan authorized only calculating the lump sum based on the Normal Retirement Benefit at the Normal Retirement Date, as an Amendment providing an option based on “accrued benefit” simply added an optional form of payment. The court thus affirmed the district court’s grant of summary judgment as to all the Plaintiffs except the Plaintiff who raised a viable surcharge claim. As to that Plaintiff, the court vacated the judgment against him on that claim only and remanded the case to the district court for further proceedings on the surcharge claim. Full Opinion

US v. Hemza Lefsih (Harris 8/14/2017): The Fourth Circuit held that a district court’s interjections, made during a trial for immigration fraud of an immigrant who entered the United states through the Diversity Immigrant Visa Program (“Diversity Program”), expressing skepticism of the Diversity Program and a negative impression of individuals who participate in the program, were improper. The court reasoned that the district court’s interjections denied the immigrant the opportunity for a fair and impartial trial because the statements would have conveyed to the jury the court’s negative impression of the Diversity Program and the immigrants who avail themselves of the Program. Curative jury instructions are insufficient when they are not given in close temporal proximity to the improper statements and do not make any direct reference to the improper commentary. The court did dismiss the immigrant’s insufficient evidence argument. However, based on the improper statements of the district court judge, the Fourth Circuit vacated the judgment of conviction. Full Opinion

Highlight Case

US v. William Chamberlain, No. 16-4313

Decided: August 18, 2017

The Fourth Circuit held that the federal criminal forfeiture statute, 21 U.S.C. § 853, does not authorize the pretrial restraint of a criminal defendant’s innocent property. More specifically, the court held that by its plain text, Section 853(e) permits the government to obtain a pretrial restraining order over only those assets that are directly subject to forfeiture as property traceable to the charged offense. The court thus overruled its precedent construing Section 853 and other identically phrased restraint provisions allowing the pretrial restraint of substitute assets.

Defendant was the senior Non-Commissioned Officer in a U.S. Army deployment to Afghanistan that was paired with a Special Forces Group split-team. The government alleges that Defendant and his co-conspirators on the split-team withdrew Afghani currency from the Finance Office at Bagram Airfield, converted it into American currency, and sent a portion of the stolen funds to the United States via money order. The co-conspirators allegedly falsified receipts to conceal their theft. Upon indictment for embezzling, stealing, or converting federal property, Defendant and two co-conspirators were given notice that the government intended to seek the forfeiture of $200,000 in funds derived from the proceeds of the alleged scheme and that, in the event that such proceeds were unavailable, the government intended to pursue forfeiture of any eligible substitute property pursuant to Section 853(p).

While charges were pending, the government sought a restraining order pursuant to Section 853(e)(1)(A) to prevent the sale of real property owned by Defendant. Defendant, while acknowledging the Fourth Circuit’s unique rule permitting the pretrial restraint of substitute assets, argued that the court’s decisions setting out this rule were abrogated by the Supreme Court’s recent decision in Luis v. United States, 136 S. Ct. 1083 (2016). The district court disagreed, concluding that it was bound to abide by the Fourth Circuit’s pre-Luis precedent, and ordered Defendant to refrain from selling or otherwise disposing of the property during the pendency of the proceedings against him. This interlocutory appeal followed.

The Fourth Circuit began its analysis by noting that, while many courts have considered the issue, only the Fourth Circuit has concluded that Section 853(e) permits the government to restrain a criminal defendant’s untainted substitute property before trial, with seven circuits expressly prohibiting this practice. The Supreme Court has yet to consider this exact issue; however, in addressing related constitutional challenges in recent years, the Court has offered some insight into the scope of the government’s statutory authority. As an example of insight, the court noted that the Justices in Luis repeatedly referred to Section 853 in discussing the Sixth Amendment guarantee that a criminal defendant may use legitimate, untainted assets to retain his or her counsel of choice. The Luis Court held that the distinction between tainted and untainted assets is an important one, with untainted assets explicitly belonging to the defendant.

The Fourth Circuit recognized that its previous holdings rested on its interpretation of the text of Section 853(e) and the parallel Racketeer Influenced and Corrupt Organizations Act (“RICO”) restraint provision, as well as its view of Congress’s broader remedial goals in enabling criminal forfeiture. Following Luis, however, the court held these bases for permitting the pretrial restraint of substitute assets under the statutory provisions appear far less certain; in fact, the plain language of Section 853 indicates that Congress did not intend the statute to permit such restraint. Section 853(e)’s explicit reference to Section 853(a)—with no similar reference to Section 853(p)—indicates that Congress intended to limit pretrial restraining orders to property directly forfeitable under Section 853(a). The court reasoned, then, that the plain language of the statute thus provides no authority to restrain substitute assets prior to trial. The court also reasoned that, because Section 853(p) is framed in the past tense, this provision means that a forfeiture order covering substitute property may issue only upon a showing, after conviction, that directly forfeitable assets have been rendered unavailable.

Accordingly, the Fourth Circuit overruled United States v. McKinney (In re Billman), 915 F.2d 916 (4th Cir. 1990), cert. denied, 500 U.S. 952 (1991) and United States v. Bollin, 264 F.3d 391, 421–22 (4th Cir. 2001), and vacated the district court’s order relying on that precedent.

Full Opinion

Jennifer M. Greene