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Week 35 (2019)

Week of August 26, 2019 through August 30, 2019

In re Watson (Diaz 8/30/2019): The Fourth Circuit held that during merger negotiations between two companies, reasonable shareholders may consider undisclosed negotiations material when those negotiations involve their current CEO discussing his or her compensation as the CEO of the merged entity, resulting in what appear to be unfavorable terms for the shareholders. The Court vacated and remanded the District Court for the Eastern District of Virginia’s dismissal of the Plaintiffs’ class action lawsuit alleging two violations under the Securities and Exchange Act of 1934. Full Opinion

Romero v. Barr (Agee 8/29/2019): The Fourth Circuit held that in the context of immigration proceedings, 8 C.F.R. §§ 1003.10(b) and 1003.1(d)(1)(ii) confer upon Immigration Judges the authority to administratively close certain immigration proceedings despite the Attorney General’s precedential decision holding otherwise because the statutes are unambiguous. The Court vacated and remanded the Board of Immigration Appeals’ (BIA) order, which stated that BIA did not have authority to exercise any general administrative closure authority. Full Opinion

Evans v. Int’l Paper Co. (Quattlebaum 8/27/2019): Regarding a hostile-environment constructive discharge claim, the Fourth Circuit held that difficult or unpleasant working conditions, without more, are insufficient to compel a reasonable person to resign. The Court affirmed the District Court of South Carolina’s dismissal of the Plaintiff’s discrimination claims. Full Opinion

Perkins v. Int’l Paper Co. (Quattlebaum 8/27/2019): The Fourth Circuit held that when evaluating the severe or pervasive requirement of a hostile work environment claim, courts may not consider information known by third parties, which the Plaintiff learns only after his employment has ended. The Court affirmed the District Court of South Carolina’s order granting summary judgment in favor of the company. Full Opinion

Highlight Case

Sanders v. US

Decided: August 30, 2019

The Fourth Circuit held that the Federal Government may not enjoy immunity from suit under the Federal Tort Claims Act’s (FTCA’s) discretionary exception when internal operating procedures of an agency go beyond mere guidance. Specifically, the Government may not be immune if the agency’s procedures remove any discretion from the task at hand and provide for a mandatory directive that must be followed. The Court reversed and remanded the District of South Carolina’s order granting the Government’s motion to dismiss for lack of subject-matter jurisdiction. 

In June 2015, Dylann Roof entered Mother Emanuel A.M.E. Church in Charleston, South Carolina, and murdered nine parishioners gathered in the church. A few weeks later, James Comey, Director of the Federal Bureau of Investigation (FBI), publicly announced that federal law prohibited Roof from purchasing the firearm used in the shooting. Further, Director Comey explained that lapses in the National Instant Criminal Background Check System (NICS) allowed Roof to unlawfully purchase the firearm. Plaintiffs in this case included survivors of the attack and the estates of deceased victims seeking to hold the Federal Government liable for negligently performing a background check on Roof. 

The parties agreed that a properly performed background check would have prevented Roof from purchasing the firearm due to his arrest six weeks earlier for possession of a controlled substance. Although the NICS examiner found that Roof had been arrested, the arrest itself was not enough to halt the firearm transaction. In accordance with procedures, the examiner attempted to obtain the incident report for Roof’s arrest but confusion regarding which police department actually arrested Roof resulted in him obtaining the firearm. The district court dismissed the Plaintiffs’ claims on two different grounds for lack of subject-matter jurisdiction. First, the district court found that the discretionary exception of the FTCA warranted immunity for the Government. The Court also held that the Government was immune from liability based on the Brady Act’s immunity provision. 

The Fourth Circuit disagreed with both of the district court’s reasons for dismissing the case, focusing most of its analysis on the discretionary exception under the FTCA. The Fourth Circuit concluded that the challenged conduct was not a product of judgment or choice, and the NICS’ standard operating procedures (SOPs) prescribed mandatory instructions that an examiner was required to follow in performing background checks. The Court reasoned that the examiner initially contacted the Lexington County Sheriff’s Office about Roof’s arrest, who informed her that the Columbia Police Department had the incident report. The examiner never contacted Columbia PD despite a clear directive within the mandatory SOPs to contact the arresting agency. Because the examiner of Roof’s background check failed to follow these mandatory directives, the discretionary exception does not provide the Government with immunity from liability. 

Accordingly, the Fourth Circuit reversed and remanded the district court’s dismissal of the Plaintiff’s class action lawsuit. Full Opinion 

Carl Petkoff