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Archive for April, 2012

Holding that a criminal trial was tainted by the admission of prior “bad act” evidence, a split Fourth Circuit panel yesterday reversed an individual’s drug and gun convictions. In addition to addressing the admissibility of prior bad act evidence, the opinion contains an extensive discussion of the detention of a vehicle for a canine sniff. Judge Keenan wrote the opinion for the court in United States v. McBride, in which Judge Gregory joined. Judge Wilkinson wrote an opinion concurring in part and dissenting in part.

The improperly admitted evidence consisted of reliable audio and video recordings of a prior drug transaction in which the defendant sold crack cocaine to a government informant. The panel majority reasoned that the evidence surrounding this earlier transaction, which took place 18 months prior to the charged conduct, “was unrelated in time, place, pattern, or manner to the conduct” for which the defendant was indicted. The panel majority further reasoned that it could not conclude that it was “highly probable that the error did not affect the judgment.”

Judge Wilkinson’s dissent argues that the appellate court’s decision “regrettably pulls the trial process away from both the trial court and the jury, substituting its own assessment of the relevance and weight of the defendant’s criminal activity.” The dissent’s analysis begins with a comparison:

Appellant’s position overlooks simply this: that institutional relationships are to law what personal relationships are to life. And keeping the relationship of trial and appellate courts free of unwarranted encroachments is essential to the harmonious workings of our system. . . . The majority pays lip service to our deferential review of the district court’s evidentiary rulings, but fails to show any actual regard for the reasoned rulings of the trial judge in this case.

The dissent concludes by arguing that “[s]ending this case back to the district court for a second round diminishes the trial process”:

Retrials are like yesterday’s breakfast–always stale and seldom satisfying. Witnesses often try to remember what they said at the first trial rather than their actual recollections of the events in question. Everyone is farther removed from the events the trial process is designed to reconstruct. “The very act of trying stale facts may well, ironically, produce a second trial no more reliable as a matter of getting at the truth than the first.” Mackey v. United States, 401 U.S. 667, 691 (1971) (Harlan, J., concurring in part and dissenting in part).

It does more than merely inconvenience participants to put them through the process twice. Retrials can be traumatic, and criminal trials especially so, as witnesses are brought back for a second time to relive troubling events. As for the jurors here, it reduces to insignificance the time they spent in civic duty listening to evidence and argument and weighing facts whose accuracy is in no way questioned. The majority treads no ground here that was not covered at trial, reviewed by the district judge, and assessed by the jury in rendering a fair verdict. I would let the verdict stand in full. The district court applied proper legal standards, followed case law from ours and other circuits, made a sound and considered evidentiary inquiry, and admirably discharged its obligations throughout. With all respect to my fine colleagues in the majority, the trial court should be commended, not reversed.

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Severability doctrine is not only a “discretionary destructive device” that “calls on judges to act, consciously, like legislators,” but it also results in the creation of law without accountability.

Suppose that the Supreme Court holds the so-called individual mandate unconstitutional and fully severable. When insurance companies are stuck with guaranteed-issue and community ratings for sicker people, but without the revenue that comes from insuring healthier people, who is responsible for that? Congress, because it used an unconstitutional mechanism and did not include an inseverability provision? The Court, because it refused to hold the mandate inseverable from these other provisions? There is no good way to answer these questions, because the judiciary’s action is formally based on perceived congressional intent. Both Congress and the Court are responsible, and neither are.

The problem is not simply the existence of a law that Congress never enacted and the President never signed. A holding of unconstitutionality and inseverability that obliterated the PPACA entirely would raise a similar problem of accountability. When small businesses that benefit from tax credits in the PPACA or individuals that benefit from the ban on lifetime caps are deprived of the benefits that they currently enjoy under the PPACA, who do they blame? A case can be made against both Congress and the Court, and each institution also has a plausible defense.

The Supreme Court has often noted the connection between liberty and accountability. An important aspect of liberty is self-government, and self-government requires accountability. That is an important theme of the Court’s federalism jurisprudence. And it also underlies the Court’s recognition that the separation of powers also promotes individual liberty. Consider, for example, Justice Kennedy’s opinion for the Court last term in United States v. Bond, which stated:

Separation-of-powers principles are intended, in part, to protect each branch of government from incursion by the others. Yet the dynamic between and among the branches is not the only object of the Constitution’s concern. The structural principles secured by the separation of powers protect the individual as well.

Within the excision-based framework of modern severability doctrine, there is simply no way for the judiciary to avoid illegitimate law creation or law destruction. And the federal judiciary’s presence in the legislative realm violates the separation of powers. “We Americans have a method for making the laws that are over us. We elect representatives to two Houses of Congress, each of which must enact the new law and present it for the approval of a President, whom we also elect.” Sosa v. Alvarez-Machain (Scalia, J., concurring in part and concurring in the judgment). Once these laws are made, the federal judiciary has a proper role of deciding on their enforceability in cases or controversies. That judicial role is powerful, but limited. The limits come from the federal judicial power itself. For too long, modern severability doctrine  has located within the judicial power an avowedly legislative function. In future posts, I will lay out an alternative approach–the original approach to partial unconstitutionality–more deeply rooted in traditional understandings of the federal judicial role.

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When it comes to severability determinations–especially in the absence of a severability clause–the output of any hypothetical legislative intent test asking what Congress would have preferred is purely fictive. The doctrinal formula that generates it is a verbal shell with its meat scraped out and its insides filled with the fluid of judicial discretion. This failure of existing doctrine to provide an intelligible legal guidance is one reason to stop using it.

An even more fundamental reason for the Supreme Court to keep its hands off this destructive doctrinal tool is rooted in the separation of powers. Simply put, the doctrine calls on judges to act, consciously, like legislators.

The non-judicial nature of an inseverability holding came through clearly at oral argument in the healthcare litigation, although the Justices did not appreciate it at the time. Consider the following portion of the oral arguments, in which Edwin Kneedler of the DOJ presses the claim that the Supreme Court lacks authority to consider the continued enforceability of statutory provisions that the plaintiffs lack standing to challenge:

MR. KNEEDLER: Thank you, Mr. Chief Justice, and may it please the Court: There should be no occasion for the Court in this case to consider issues of severability, because as we argue, the — the minimum coverage provision is fully consistent with Article I of the Constitution. But if the Court were to conclude otherwise, it should reject Petitioners’ sweeping proposition that the entire Act must fall if this one provision is held unconstitutional. As an initial matter, we believe the Court should not even consider that question. The vast majority of the provisions of this Act do not even apply to the Petitioners, but instead apply to millions of citizens and businesses who are not before the Court -­

CHIEF JUSTICE ROBERTS: How does your proposal actually work? Your idea is that, well, they can take care of it themselves later. I mean, do you contemplate them bringing litigation and saying — I guess the insurers would be the most obvious ones -­ without — without the mandate, the whole thing falls apart, and we’re going to bear a greater cost, and so the rest of the law should be struck down. And that’s a whole other line of litigation?

MR. KNEEDLER: Well, I — I think the continuing validity of any particular provision would arise in litigation that would otherwise arise under that provision by parties who are actually -­

CHIEF JUSTICE ROBERTS: But what cause of action is it? I’ve never heard of a severability cause of action.

MR. KNEEDLER: Well, in the first place, I don’t — the point isn’t that there has to be an affirmative cause of action to decide this. You could — for example, to use the Medicare reimbursement  issue is one of the things that this Act does is change Medicare reimbursement rates. Well, the place where someone adjudicates the validity of Medicare reimbursement rates is through the special statutory review procedure for that. And the same thing is true of the Anti-Injunction Act -­

JUSTICE SCALIA: Mr. Kneedler, there are some provisions which nobody would have standing to challenge. If the provision is simply an expenditure of Federal money, it doesn’t hurt anybody except the taxpayer, but the taxpayer doesn’t have standing. That — that just continues. Even though it is — it should — it is so closely allied to what’s been struck down that it ought to go as well. But nonetheless, that has to continue because there’s nobody in the world that can challenge it. Can that possibly be the law?

MR. KNEEDLER: I think that proves our point, Justice Scalia. This Court has repeatedly said that just because there’s — no one may have standing to challenge — and particularly like tax credits or taxes which are challenged only after going through the Anti-Injunction Act, just because no one has standing doesn’t mean that someone must. * * *

JUSTICE SCALIA: But those are provisions that have been legitimately enacted. The whole issue here is whether these related provisions have been legitimately enacted, or whether they are so closely allied to one that has been held to be unconstitutional that they also have not been legitimately enacted. You can’t compare that to — to cases dealing with a statute that nobody denies is constitutional.

MR. KNEEDLER: This case is directly parallel to the Printz case, in our view. In that case, the Court struck down several provisions of the Brady Act, but went on to say it had no business addressing the severability of other provisions that did not apply to the people before [the Court].

The questions posed by Chief Justice Roberts and Justice Scalia here can be distilled to two:

(1) If the Court doesn’t address severability in this case, won’t that leave a mess that the federal judiciary might not be able to be sort out in further litigation?

(2) Should the federal judiciary permit provisions in the statute that nobody can challenge in court to stay in effect as law even though they are “closely allied to one that has been held to be unconstitutional”?

The correct answers to these two questions are Yes and Yes.

Yes, it would create a mess for the Supreme Court to hold the so-called individual mandate unconstitutional without addressing the continued enforceability of other PPACA provisions. But that mess is not the federal judiciary’s problem except to the extent that the enforceability of those other PPACA provisions can be challenged in a case or controversy by someone that they injure in a judicially cognizable way. True, there is no “severability cause of action.” But a regulated entity can, in some circumstances, seek a declaratory judgment and injunction on the ground that a federal statute purportedly applicable to it does not have the force of law. If it were a valid legal argument to say that a statutory provision, itself perfectly constitutional, should not be enforceable because Congress would not have enacted it in the absence of another statutory provision that is unconstitutional, then someone can raise that argument in an appropriate pre-enforcement claim for declaratory and injunctive relief. Under current severability doctrine, that could be a valid legal argument. It ought not to be, because the fact Congress would not have enacted the provision should not be allowed to undo the fact that Congress did pass the provision. But whether this is a valid legal argument and whether it ought to be are two different questions.

Yes, the federal judiciary should leave alone statutory provisions that cause no legally cognizable injury to the parties properly before a federal court in a case or controversy. The doctrines that define the case or controversy requirement set the boundaries of the judicial domain. Anything outside those boundaries is none of the federal courts’ business.

As Justice Scalia recognized in Hamdi v. Rumsfeld, the Supreme Court sometimes adopts a “Mr. Fix-it Mentality” in which the Court “seems to view it as its mission to “Make Everything Come Out Right, rather than merely to decree the consequences, as far as individual rights are concerned, of the other two branches’s actions and omissions.”  The oral arguments over the severability of the so-called individual mandate reveal a Court tempted to play this role.

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A divided Fourth Circuit panel yesterday affirmed the grant of summary judgment to an employer who refused to rehire to the same position an employee who went on disability leave. The decision turned on the application of Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795 (1999), in which the Supreme Court addressed how courts should assess an ADA claim brought by an individual who has applied for and received Social Security Disability Insurance (SSDI) benefits.

Judge O’Grady (EDVA, sitting by designation) authored the unpublished opinion for the court in EEOC v. Greater Baltimore Medical Center, Inc., in which Judge Keenan joined. Judge Gregory wrote a dissenting opinion.

Although unpublished, the decision appears to be the first in which the Fourth Circuit has held that the Supreme Court’s decision in Cleveland applies not only to actions brought by individuals who have applied for and received SSDI, but also to actions brought by the EEOC on behalf of such individuals.

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The prospect of the Supreme Court deploying severability doctrine in any high-stakes litigation should fill legalists with dread. And the present challenge to the so-called individual mandate in the Patient Protection and Affordable Care Act is high-stakes litigation.

Severability doctrine is a discretionary destructive device. And when judges wield it to lay waste to legislative handiwork, everyone loses. The only winners are the cynics about law whose cynicism is vindicated by the judiciary’s adventuresome expansion of invalidity beyond unconstitutionality.

My first article-length law review piece, Partial Unconstitutionality, was about severability. I wrote it before the PPACA was enacted and without that legislation in mind. In fact, severability doctrine seemed at the time to be in the backwaters of scholarly and judicial interest. That was typical. Nobody pays attention to severability until it matters, and then the doctrine usually evades scrutiny by remaining in the shadows of the substantive constitutional rulings that occasion its application. Sure, there have been bouts of handwringing about severability–as when the Court was busy striking down New Deal legislation in the 1930s, or when INS v. Chadha‘s constitutional holding threatened over 200 statutes that also contained legislative vetoes in the early 1980s. But life would go on and severability would slink back into the shadows.

The recent oral arguments about the severability of the so-called individual mandate have shone a spotlight on severability. And what we have seen isn’t pretty.

The good news is that the Justices recognize an ugly doctrinal state of affairs. The bad news is that there appears little prospect when working within the assumptions of current doctrine to make it better. Barring some serious rethinking of the doctrine, its use in the health care litigation (if it ends up being used) can only make a bad doctrinal situation worse.

(more…)

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As the United States and a new Somali defendant gear up for trial this week in front of Judge Doumar, one question is on the mind of all concerned: Where are the Fourth Circuit’s piracy decisions?

The Fourth Circuit has been considering the definition of piracy for over a year now. Last spring, a three-judge panel consisting of Judge King, Judge Davis, and Judge Keenan heard oral arguments in an appeal arising out of an attack on the U.S.S. Ashland. Last September, the same panel heard oral arguments in an appeal arising out of an attack on the U.S.S. Nicholas. At the time of the Nicholas arguments, it appeared that the panel had put the case on some sort of fast track after the Ashland appeal was caught up in some procedural confusion. But the Nicholas appeal has not been quickly resolved even though, as I have previously argued, the procedural issue that seemed to dog the Ashland appeal has been resolved  by a different panel in a different case.

Regardless of the outcome of the Ashland appeal, it is curious that the decision in the Nicholas appeal has not yet been issued. Various judges on the panel did show interest at oral argument in issues beyond the definition of piracy, such as the extraterritorial application of Miranda and the unit of prosecution under 924(c). But the panel did not press the government very hard on the definition-of-piracy issues, as one would expect if the judges’ pre-argument review of the case pointed toward a ruling against the government.

There can be many reasons for the passage of so much time without a decision. And in big cases, the decisions can take a long time. Perhaps the panel is deeply fractured on one or more of the issues. Perhaps the judges have been busy working on other cases (as seems to be at least part of the explanation given lengthy or controversial opinions that have been released in recent months by the panel members in other cases). Or perhaps the opinion or opinions at issue raise knotty questions about other aspects of the Fourth Circuit’s case law that need to be smoothed out. At this point, it is all speculative from the outside.

That speculation could start building if more stories like yesterday’s AP story about the upcoming piracy trial begin to appear. As the story explains, “[t]he trial of a Somali man U.S. authorities consider the highest-ranking pirate they have ever captured will begin this week in Virginia under a cloud of uncertainty about what the definition of piracy is.” Part of the uncertainty is whether the crime of piracy requires that the pirate actually took possession of the target ship, committing robbery at sea. Two district courts have gone different ways on that question. These are the two cases currently on appeal to the Fourth Circuit.

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The Fourth Circuit today partially reversed a district court decision that had granted broad protection to Google against trademark infringement claims arising out of its use of trademarked terms in keywords and advertisement text. Chief Judge Traxler wrote the opinion for the court in Rosetta Stone v. Google, in which Judge Keenan and Senior Judge Hamilton joined.

The language software company Rosetta Stone sued Google in 2009 asserting claims of: (1) direct trademark infringement; (2) contributory infringement; (3) vicarious infringement; (4) trademark dilution; and (5) unjust enrichment (under Virginia law). The district court granted summary judgment to Google on all five counts (see here for district court’s trademark claims analysis). Today’s decision affirms the win for Google on vicarious infringement and unjust enrichment, but vacates and remands with respect to direct infringement, contributory infringement, and trademark dilution.

With respect to direct infringement, the appeals court rejected Rosetta Stone’s argument that it is reversible error for a district court to decline to address all factors in the Fourth Circuit’s nine-factor, non-exclusive, totality-of-the-circumstances test for likelihood of confusion. The opinion suggests, however, that “[i]n the future . . . a district court opting not to address a given factor or group of factors should provide at least a brief explanation of its reasons.” The appellate court did, however, fault the district court for applying a too-demanding standard to Rosetta Stone’s evidence of intent to cause confusion, actual confusion, and consumer sophistication. This portion of the opinion contains a discussion of anecdotal and survey evidence, including in-house studies on confusion performed by Google. The Fourth Circuit also criticized the district court’s functionality analysis for focusing on whether Rosetta Stone’s mark made Google’s product more useful, rather than considering whether the mark was functional as Rosetta Stone used it. The appellate disposition of this functionality affirmative defense precludes Google’s further use of it in the litigation, but the remainder of the disposition simply leaves open the path for future litigation over the facts.

On contributory infringement, the Fourth Circuit held that the district court relied too heavily on the Second Circuit’s decision in Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93 (2d Cir. 2010), which was an appeal from a jury verdict rather than a decision at the summary judgment stage.

Finally (with respect to the claims that the Fourth Circuit vacated), the court held that the district court impermissibly collapsed good faith and nominative fair use into a single question in assessing trademark dilution. The appeals court further held that the district court mistakenly read Louis Vuitton Malletier S.A. v. Haute Diggity Dog, L.L.C., 507 F.3d 252 (4th Cir. 2007) to require proof of actual economic loss or reputational injury, rather than a likelihood of dilution.

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