CA4 vacates and remands two from EDVA today: one on FCA and one on NEPA

The Fourth Circuit issued a published opinion in two argued cases today. The result in each case was to vacate and remand a decision out of the Eastern District of Virginia. That may be all that the decisions have in common, however. The first decision left the central issue open for resolution on remand after articulating the legal test for the district court to apply, while the second decision resolved the central issue while seemingly adopting a newly constrictive test.

In Oberg v. Kentucky Higher Education Student Loan Corporation, the court addressed whether corporations organized by Kentucky, Pennsylvania, Vermont and Arkansas were “persons” subject to suit under the False Claims Act, or instead “state agencies” not subject to suit under the False Claims Act as interpreted in Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 787-88 (2000). The appeals court held that the district court applied the wrong legal test in deciding that the corporations were not subject to suit. The Fourth Circuit vacated and remanded for district court application of the test developed under the test that is also used for the “arm of the state” prong of sovereign immunity analysis. Judge Motz wrote the opinion for the court, in which Chief Judge Traxler and Judge Keenan joined.

In Friends of Back Bay v. U.S. Army Corps of Engineers, the court held that the Army Corps of Engineers improperly issued a permit without completing an EIS under NEPA. Among other things, the court near the end of its opinion aligned the Fourth Circuit with the Second Circuit in stating that “the policy goals underlying NEPA are best served if agencies err in favor of preparation of an EIS when . . . there is a substantial possibility that the [proposed] action may have a significant impact on the environment.” I am not a NEPA expert, but the appellate court’s application of the various EIS factors and its adoption of the Second Circuit’s “substantial possibility” test seemed somewhat casual. Judge King wrote the opinion for the court, in which Judge Gregory and Judge Floyd joined.

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Fourth Circuit defers to BIA on mandatory detention authority

Federal law authorizes immigration authorities to detain a criminal alien without a bond hearing “when the alien is released” from some other custody, such as state imprisonment. See 8 U.S.C. 1226(c)(1). The Board of Immigration Appeals has held that this statute authorizes mandatory detention even if the immigration authorities arrest and detain the individual well after his state custody has ended. The Fourth Circuit held today in Hosh v. Lucero that the BIA’s determination was entitled to Chevron deference and that the immigration-law version of the rule of lenity did not require an alternative outcome. Senior Judge Moon (WDVA) wrote the opinion for the court, in which Judge Keenan and Judge Floyd concurred.

Several district courts have been on both sides of the issue resolved by the Fourth Circuit in this case, although the Fourth Circuit’s decision appears to be the first circuit-level decision on this issue.

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Cell carriers and localities split victories in Fourth Circuit cell-tower cases

T-Mobile won yesterday in the Fourth Circuit, while New Cingular Wireless lost last week in the same court. Both cases involved challenges to the denial of applications to erect cell towers in localities. Both appeals resulted in affirmances of the relevant district court decision, supporting the appellate court’s description of these kinds of cases as fact-intensive.

Judge Diaz wrote yesterday’s opinion for the court in T-Mobile Northeast LLC v. Newport News, in which Judge King and Judge Gergel (DSC) joined.

Judge Agee wrote the opinion for the court in New Cingular Wireless, PCS, LLC v. Fairfax County Board of Supervisors, in which Judge Davis and Judge Floyd joined.

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Anomalous but not absurd: Fourth Circuit splits from Third and Ninth on interpretation of FTCA’s “law enforcement proviso”

The Fourth Circuit decided today in Ignacio v. United States that the Federal Tort Claims Act waives the immunity of the United States for intentional torts committed by law enforcement officials, regardless of whether the official was engaged in a law enforcement activity when he committed the intentional tort. Judge Floyd wrote the opinion for the court, which was joined in by Judge Shedd and Judge Diaz. Judge Diaz also authored a separate concurrent. According to the opinions, the decision creates a circuit split with the Third and Ninth Circuits. See Orsay v. United States, 289 F.3d 1125, 1134 (9th Cir. 2002); Pooler v.  United States, 787 F.2d 868, 871-72 (3d Cir. 1986).

The case arises out of a dispute on December 2, 2009 between a Pentagon police officer (Lane) and a contract security officer (Ignacio) who were assigned together to the same security checkpoint for Pentagon employees. The two disagreed over the caliber of an M-16 round. “Initially, their disagreement led only to a bet. It escalated, however, on December 15, when they were again stationed at a security checkpoint for Pentagon employees. Lane allegedly told Ignacio that he would ‘hurt him after work’ and then pretended to punch him in the face.” This led to workplace discipline and, eventually, a lawsuit. The United States sought summary judgment on the basis of an exception from the FTCA’s waiver of sovereign immunity.

The FTCA (i) waives the sovereign immunity of the United States for certain torts committed by federal employees, (ii) excepts certain intentional torts from this waiver, and (iii) then excepts from this exception intentional torts committed by investigative or law enforcement officers. See 28 U.S.C. 2680(h). This exception from an exception from the waiver of sovereign immunity is known as the “law enforcement proviso.” Other circuits interpreting this proviso have limited its application to torts committed by investigative or law enforcement officers in the course of investigative or law enforcement efforts. Applying that interpretation, the district court (Judge O’Grady, EDVA) granted summary judgment to the United States.

In reversing and remanding, the Fourth Circuit faulted the other circuits for “relent[ing] to secondary modes of interpretation without first establishing the ambiguity of the statutory text.”  According to Judge Floyd, the text of the proviso is clear and contains no limitation of the sort read in by the other circuits.

In his separate concurrence, Judge Diaz acknowledges that the interpretation adopted by the court “leads to the anomalous situation in which the federal government could be liable for the actions of a law enforcement officer but would be immune from liability for the same conduct committed by another federal employee under the same circumstances.” This result “can be criticized as inconsistent and unreasonable,” but it is not  ”so absurd as to allow us to alter the meaning–as other courts have–of an otherwise unambiguous statute.”

In light of the result and apparent circuit split, the United States may be interested in seeking additional review. Given the panel composition and outcome, the likelihood of obtaining a different ruling en banc is very low. If the Department of Justice determines that the issue is sufficiently important to seek certiorari, this case very well could end up before the Supreme Court. There are unresolved factual disputes about whether the Pentagon police officer was acting within the scope of his employment under Virginia law (a necessary predicate to liability under the FTCA), which could counsel against a grant of certiorari. Because sovereign immunity protects not simply against liability but also against having to answer in court at all, however, that consideration may carry less weight in this case.

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White, supremacist, loses true threats argument about Black in Fourth Circuit

A split panel of the Fourth Circuit today affirmed the conviction of William White, the white supremacist “Commander” of the American National Socialist Workers’ Party, for threatening to injure or intimidate in violation of federal law. Judge Niemeyer wrote the opinion for the court in United States v. White. Judge Duncan joined in Judge Niemeyer’s opinion for the court and also authored a separate concurrence. Judge Floyd dissented.

The principal issue in the appeal is the appropriate mens rea for a “true threat” not entitled to First Amendment protection. White urged the Fourth Circuit to follow the Ninth Circuit’s decision in United States v. Cassel, 408 F.3d 622 (9th Cir. 2005), by adopting a specific-intent-to-threaten requirement. The Fourth Circuit held that prior circuit precedent foreclosed that approach, and the Supreme Court’s decision in Virginia v. Black, 538 U.S. 343 (2003), was not a superseding contrary decision that required reexamination of circuit precedent.

The opinions feature extensive First Amendment analysis and include citations not only Supreme Court and Circuit Court of Appeals decisions, but also a student law review note, an article by Eugene Volokh, and an article by Frederick Schauer, among other authorities.

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Fourth Circuit certifies two questions to Supreme Court of Virginia

The Fourth Circuit has certified two questions to the Virginia Supreme Court.

One certified question involves the interpretation of a homeowners insurance policy under Virginia law:

For purposes of interpreting an “all risk” homeowners insurance policy, is any damage resulting from [the covered home's] drywall unambiguously excluded from coverage under the policy because it is loss caused by: (a) “mechanical breakdown, latent defect, inherent vice, or any quality in property that causes it to damage itself”; (b) “faulty, inadequate, or defective materials”; (c) “rust or other corrosion”; or (d) “pollutants,” where pollutant is defined as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste”?

The per curiam unpublished certification order in Travco Insurance Company v. Ward was entered by a panel consisting of Judge Shedd, Judge Wynn, and Senior Sixth Circuit Judge Keith. The panel heard oral arguments on September 20, 2011. The court’s reasoning with respect to certification is not that extensive for the amount of time that this appeal has been pending.

The other certified question arises out of the employment context:

Does Virginia law recognize a common law tort claim of wrongful discharge in violation of established public policy against an individual who was not the plaintiff’s actual employer, such as a supervisor or manager, but who participated in the wrongful firing of the plaintiff?

Judge Floyd authored the certification order in VanBuren v. Grubb, on behalf of a panel that also included Judge Niemeyer and Judge Motz. The reasoning in favor of certification is much more extensive than in Ward. In addition to noting that the Virginia Supreme Court has not addressed this issue, the order notes that no consensus has arisen among Virginia’s trial courts and that other states are split on the issue.

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Fourth Circuit rules on insurance coverage for FLSA violation as a “wrongful act”

Applying Virginia law, the Fourth Circuit today interpreted a commercial insurance policy that required the insurer to “pay for all loss resulting from a claim for a wrongful act” to include coverage for liquidated damages and attorneys’ fees that may be ordered in a FLSA overtime and backpay case. The court held that the insurer had a duty to defend its insured and a duty to indemnify beyond any payments due as back wages. (Back wages would not be “losses” “caused” by the FLSA violation, but rather payments that must be made according to a pre-existing duty.)  Judge Niemeyer wrote the opinion for the court in Republican Franklin Insurance Company v. Albemarle County School Board, in which Judge Motz and Judge Floyd joined.

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Split Fourth Circuit panel allows enforcement of slightly overbroad restrictive covenant

A split panel of the Fourth Circuit held today that BP could enforce a restrictive covenant in a deed against a purchaser who sought to use the purchased property for a gas station selling different gas than agreed to in the sale of the property. Chief Judge Traxler wrote the opinion in BP Products, North America, Inc. v. Stanley, which was joined in by Judge Shedd. Judge Floyd authored a dissenting opinion.

From the majority opinion:

The parties agree that under Virginia law, covenants “restricting the free use of land are not favored and must be strictly construed.” Mid-State Equip. Co. v. Bell, 225 S.E.2d 877, 884 (Va. 1976). They disagree, however, regarding the test by which such covenants should be judged. Defendants argue that the restriction should be judged by the standard discussed in Omniplex World Services Corp. v. U.S. Investigations Services, Inc., 618 S.E.2d 340, 342 (Va. 2005), which applies to noncompete covenants in employment contracts. BP contends that restrictive covenants in deeds are judged by a different standard, namely the one discussed in Merriman v. Cover, Drayton & Leonard, 51 S.E. 817, 819 (Va. 1905), and that the Omniplex and Merriman tests are distinct from one another. We agree with BP.

* * *

BP advances multiple arguments challenging the ruling by the district court that the PR was overbroad as a result of its
application to the sale of these enumerated items. BP first argues that, as a petroleum refiner, it has a legitimate business
interest in prohibiting the sale of any products that would dilute the demand for BP’s petroleum. BP also maintains that
the PR should be read to prohibit the sale of kerosene, benzol, or naphtha only to the extent those products are used for the
sale of fuel for internal combustion engines. Finally, BP argues that it is not seeking to prevent the sale of lubricants and that any prohibition of such sales “is academic and represents far too slender a reed on which to invalidate the entire Petroleum Restriction, and thereby allow Stanley to use the Property to sell non-BP fuel, the very use the parties indisputably intended that the Property could not be put.” Appellant’s brief at 48.

From the dissent:

BP contends that we can enforce the PR regardless of any overbreadth simply by excising the offending language. And, since oral argument, BP purportedly has released Stanley from the overbroad portions of the PR. See Ante at 13 n.3. Nevertheless, I cannot conclude that the PR becomes enforceable through alteration by the court or BP. First, Virginia law disfavors judicial reformation of covenants through bluepenciling. See Strategic Enter. Solutions, Inc. v. Ikuma, No. CL 2008-8153, 2008 WL 8201356, at *4 (Va. Cir. Ct. Oct. 7, 2008) (“The Virginia Supreme Court has not directly ruled on ‘blue-penciling’ overly broad clauses in restrictive covenants[;] however it is clear from the restrictive covenant jurisprudence in Virginia that the Court does not entertain the notion that these disfavored restraints on trade should be reformed by the judiciary . . . .”); Daston Corp. v. MiCore Solutions, Inc., No. CL-2010-9318, 2010 WL 7375597, at *5 (Va. Cir. Ct. July 30, 2010); Better Living Components, Inc. v. Coleman, No. CH04-13,307, 2005 WL 771592, at *5 (Va. Cir. Ct. Apr. 6, 2005). More fundamentally, however, Virginia law supports narrowly drawn covenants that are reasonable, and general public policy encourages parties to draft precise language on which all participants to a contract can  rely. Allowing BP, a multinational, sophisticated corporation, to draft blatantly overbroad restrictions and then, when challenged, simply declare that such restrictions are a mistake and meaningless not only is contrary to basic contract principles, but also is detrimental to the public interest. Accordingly, I find that the PR’s overbreadth spoils its enforceability and dissent from the majority’s contrary conclusion.

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Fourth Circuit rejects Second Amendment challenge to 18 U.S.C. 922(g)(8), which prohibits possession of a firearm by an individual subject to a domestic violence protective order

A wife obtained a domestic violence protective order in Alexandria (VA) Juvenile & Domestic Relations Court against her husband based on his aggressive behavior and threat to kill her (a threat made credible, in part, by her husband’s prior combat experience in the Navy). The order included a bolded, all caps warning stating that “while this protective order is in effect, you may be subject to a federal penalty under the 1994 amendment to the Gun Control Act, 18 U.S.C. § 922(g)(8), for possessing, transporting, or receiving a firearm.” Here’s what happened next:

Just over one hour after the court issued the order and an officer served it on [the husband], [he] entered the Sharpshooters firearms retail store and small arms range in Lorton, Virginia. There, [he] paid for a monthly membership, rented a Glock 22 handgun, and purchased two boxes of ammunition containing fifty rounds each. He proceeded to a firing lane for approximately thirty minutes of shooting, after which he returned the gun and left the range. Shortly thereafter, [the wife] contacted the police when she arrived home to find [the husband's] Sharpshooters membership card near the door inside her apartment.

The husband was convicted and sentenced on two counts of possessing a firearm or ammunition in violation of 18 U.S.C. § 922(g), which prohibits possession by individuals subject to a domestic violence protective order. On appeal, the husband argued that his convictions violated the Second Amendment and that it was plain error to convict and sentence him on two separate counts for the simultaneous possession of a firearm and ammunition.

In a unanimous opinion authored by Judge Wilkinson, and joined by Judge Wynn and Judge Floyd, the Fourth Circuit held in United States v. Mahin that the convictions did not violate the Second Amendment but that it was plain error to convict and sentence on two counts instead of one.

From the Second Amendment analysis:

[O]ur precedent indicates the district court is not required to speculate on a case-by-case basis what violent acts may have unfolded had the government failed to prosecute under § 922(g)(8). In Chapman we noted specifically that a conviction under § 922(g)(8)(A)-(B) and (C)(ii) is constitutional even if the statute’s “prohibitory net . . . may be somewhat over-inclusive” in reaching persons who would not misuse a firearm if permitted to possess one. Chapman, 2012 WL 11235, at *8. For intermediate scrutiny has never been held to require a perfect end-means fit. It is sufficient that § 922(g)(8) rests on an established link between domestic abuse, recidivism, and gun violence and applies to persons already individually adjudged in prior protective orders to pose a future threat of abuse. The obvious utility of Congress’ chosen means in advancing Congress’ indisputably important ends relieves trial courts of the need to ruminate in every case on what might have been if not for an indictment under § 922(g)(8).

From the plain error analysis and conclusion:

In United States v. Dunford, 148 F.3d 385 (4th Cir. 1998), we held that the defendant’s simultaneous possession of multiple firearms and ammunition supported only one count of conviction under § 922(g). Mahin’s indictment included two counts under §922(g)(8), one for the possession of a firearm and the other for the simultaneous possession of ammunition at the Sharpshooters firing range, which under Dunford constitutes only one violation. In light of Dunford, we agree with Mahin that the district court committed plain error in convicting and sentencing Mahin on both counts of the indictment. Because the court sentenced Mahin on each count and imposed a special assessment of $100 for each conviction, its rror affected Mahin’s substantial rights. We therefore affirm Mahin’s conviction under 18 U.S.C. § 922(g)(8) as to count one, reverse his conviction as to count two for possession of ammunition while subject to a protective order, vacate his sentence, and remand for the limited purpose of resentencing in accordance with this decision.

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Attempt does not require an identified victim

The Fourth Circuit’s unanimous opinion today in United States v. Strieper affirms the imposition of two sentencing enhancements on attempted enticement and child pornography charges. Judge Floyd wrote the opinion, in which Chief Judge Traxler and Judge Shedd joined.

Among the issues discussed is whether one can attempt to entice without having identified a particular minor to entice. The panel believed so:

At oral argument, Strieper also suggested that there must be an identifiable victim to constitute an attempt. This argument did not appear in Strieper’s brief, and as such, it is waived. See Edwards v. City of Goldsboro, 178 F.3d 231, 241 n.6 (4th Cir. 1999). In addition, this position lacks merit, as it is well established that attempt requires only the requisite intent to commit the crime and a substantial step toward its commission. United States v. Pratt, 351 F.3d 131, 135 (4th Cir. 2003). So long as these elements are satisfied, no identified victim is necessary. Indeed, as we noted at oral argument, if two individuals intending to rob a bank start out with all accoutrements necessary for a robbery and agree simply to rob the first bank they happen upon rather than identifying a specific bank ahead of time, we could still conclude that the individuals had attempted to commit robbery.

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Government’s use of pseudonymous witnesses in gang trial tests limits of Confrontation Clause

The Fourth Circuit’s decision yesterday in United States v. Ramos-Cruz held that the government’s withholding from the defense of the actual names of two prosecution witnesses did not violate the Confrontation Clause in the Sixth Amendment. Judge Duncan wrote the opinion for the court, in which Judge Niemeyer joined. Judge Floyd concurred in the judgment, reasoning that the use of pseudonymous witnesses violated the Sixth Amendment, but that the constitutional violation was harmless error.

For criminal proceduralists, Judge Floyd’s dissent in this case looks like a must-read opinion. Some excerpts:

I do not take lightly the safety concerns accompanying the decisions made by Juan Diaz and Jose Perez—the two witnesses who testified using pseudonyms—to testify against Ramos-Cruz. As the record reflects, MS-13 has demonstrated its willingness to engage in violent reprisal against witnesses who testify against its members. There is no denying that by agreeing to testify against Ramos-Cruz, Diaz and Perez exposed themselves to danger. Most assuredly, requiring them to state their true names in open court would have made it easier for MS-13 to target them and their families. Safety concerns were thus real and valid.

We must recognize, however, that these concerns inhere in many prosecutions of defendants who are members of violent criminal organizations. The sad truth is that, in this respect, the situation presented in today’s case is not rare. Gangs often employ violence as a means of intimidating witnesses. Laura Perry, Note, What’s in a Name?, 46 Am. Crim. L. Rev. 1563, 1580 (2009); Joan Comparet-Cassani, Balancing the Anonymity of Threatened Witnesses Versus a Defendant’s Right of Confrontation: The Waiver Doctrine After Alvarado, 39 San Diego L. Rev. 1165, 1194-96 (2002). Witness intimidation is a serious problem of an alarming magnitude, and it plagues many of our communities. See Alvarado, 5 P.3d at 222 & n.14; Comparet-Cassani, supra, at 1194-204. As a result, the prosecution of members of violent gangs—such as this prosecution of Ramos-Cruz—will often trigger safety concerns for many of the witnesses involved.

Nevertheless, in addressing these concerns, we cannot undermine our constitutional commitment to ensuring that criminal defendants, even those accused of belonging to violent criminal organizations, receive a fair trial. That means they must be allowed to rigorously test the government’s evidence, including all of its witnesses, in an adversarial proceeding before a jury. See Craig, 497 U.S. at 845; See Strickland v. Washington, 466 U.S. 668, 685 (1984). I am unconvinced that they are able to do so if the government can completely withhold the true names of its witnesses throughout the trial.

Access to the true names of the government’s witnesses is critical to ensuring that a criminal defendant is able to rigorously test their testimony in an adversarial manner. As noted, effective cross-examination often entails challenging the witness’s credibility. Hence, the opportunity for effective cross-examination, which the Sixth Amendment guarantees, includes the opportunity to challenge the witness’s credibility. See Van Arsdall, 475 U.S. at 679-80. But without a government witness’s true name, the criminal defendant is unable to perform the type of investigation—whether in court or out of court—necessary to be able to challenge his credibility. See Smith, 390 U.S. at 131. The criminal defendant cannot explore the witness’s background and qualifications to discover any facts that might reflect poorly on his credibility. See Alvarado, 5 P.3d at 221. In effect, denying a criminal defendant knowledge of the true names of the government’s witnesses severely inhibits his ability to perform what is often the most potent aspect of effective cross-examination: impeachment. In my opinion, because completely forbidding a criminal defendant from learning a witness’s true name prevents the opportunity for effective cross-examination, it denies the defendant a fundamental aspect of a fair trial.

My concerns with completely denying criminal defendants access to the true names of the witnesses testifying against them extend beyond practical consequences. Allowing the use of anonymous witnesses also undermines the perception that our criminal trials are open and even contests. Instead, it creates the impression that our criminal trials contain clandestine aspects that operate to provide the government with an upper hand. It does so by suggesting that convictions can be ”based on the charges of . . . unknown—and hence unchallengeable—individuals,” Lee, 476 U.S. at 540, even if they can be physically seen. Simply put, obtaining a conviction by using anonymous witnesses appears eerie and covert, and does not inspire confidence in the promise that our criminal trials are open and even endeavors.

Interestingly, the majority opinion does not directly address the bulk of Judge Floyd’s constitutional arguments on their merits, but largely defers to the court’s prior unpublished opinion in United States v. Zelaya addressing the propriety of these witnesses’ testimony in a different case. Although Judge Floyd ultimately concurred in the judgment because he held that the Sixth Amendment error was harmless, I would not be surprised to see the Fourth Circuit decide to consider this issue en banc.

The majority opinion also discusses the standard of review for allegedly erroneous jury instructions (including a detailed discussion of harmless error) and the elements of the federal witness-tampering statute. Read the whole thing.

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Five from the Fourth: new published opinions on ERISA, immunity, debt collection, arbitration, and immigration

The Fourth Circuit issued published opinions in five cases today. That is a large number of opinions in argued cases for a single day. Two of the cases were argued in September. Both were split decisions. Two of the cases were argued in October. Both were unanimous as to outcome, but one featured an unusual concurring opinion joined by a panel majority. The fifth decision, from a case argued in December, was unanimous. I hope to have more to say about at least some of these opinions in the future, but here is a capsule summary for now.

Fortier v. Principal Life Ins. Co.  is a dispute over disability insurance. A split panel affirms the interpretation of an ERISA plan administrator that resulted in a denial of benefits. Judge Niemeyer wrote the opinion, which was joined in by Judge Wilkinson. Judge Floyd dissented. 

Lee-Thomas v. Prince George’s County is a dispute over sovereign immunity for a county board of education. A split panel affirms the district court’s decision that a statutory waiver of immunity, as interpreted by Maryland’s Court of Appeals, preserved claims against a county board’s of education for $100,000 or less. Judge King wrote the opinion, which was joined by Judge Davis. Judge Keenan dissented. 

Peabody Holding v. United Mine Workers presents a dispute about who decides arbitrability. A Fourth Circuit panel unanimously holds that the court rather than arbitrator must decide arbitrability, because the agreement contains no language unmistakably designating arbitrability for arbitration. Addressing arbitrability in an exercise of its independent judgment, the appellate court concludes that the dispute is arbitrable. Judge Diaz wrote the opinion, which was joined in by Judge Niemeyer and Judge Wynn. 

Zelaya v. Holder is an immigration case. The Fourth Circuit denies the petition for review with respect to an asylum claim and a withholding of removal claim, but grants the petition for review with respect to a Convention Against Torture claim. Senior Judge Hamilton wrote the opinion for the court, which was joined in by Judge Davis and Judge Floyd. Judge Floyd wrote a separate concurrence, in which Judge Davis joined. (One lesson? When Judge Floyd writes a separate concurrence, turnabout is fair play. See here for this panel’s similar voting in a different case. One question: What is going on with this panel?)

Warren v. Sessoms & Rogers is a case about the Fair Debt Collection Practices Act. The Fourth Circuit holds that the district court, based on the defendant’s characterizations of its Rule 68 offer of judgment, incorrectly dismissed the FDCPA complaint. Judge Motz wrote the opinion, in which Judge Gregory and Judge Floyd joined. (Judge Floyd did not write a separate concurrence.)

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Quick Fourth Circuit reversal of FDCPA dismissal in claim against Rudow Law

Less than a month after oral argument, the Fourth Circuit issued an unpublished per curiam opinion reversing the dismissal of claims against the Law Office of  William M. Rudow, LLC (“Rudow Law”) under the Fair Debt  Collection Practices Act (“FDCPA”) and the Maryland Consumer Debt Collection Act (“MCDCA”). The panel consisted of Judge Niemeyer, Judge Motz, and Judge Floyd.

The panel held that the district court erred in holding that the plaintiff could not sue under the FDCPA and MCDCA because she did not owe the debt that Rudow Law sought to collect. The fact that Maryland law characterizes replevin as a tort action did not bring it outside of the reach of the FDCPA. And “the district court erred in holding that non-debtors,  or those with no financial interest in the collateral at issue, may not bring suit under the FDCPA.” The per curiam opinion explains that “[t]he enforcement provision of the FDCPA imposes liability on any debt collector who fails to comply with the statute’s provisions ‘with respect to any person.’ 15 U.S.C. § 1692k(a) (emphasis added). Consequently, absent a limitation in the substantive provisions of the FDCPA, any aggrieved party, not just a debtor, may bring an action under the statute.”

The per curiam opinion and quick turnaround make this seem like an easy case.  Yet the opinion also seems to offer two important holdings about the scope of the FDCPA, seemingly qualifying the opinion for published status under Local Rule 36(a).

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Commissioner Astrue wins another affirmance in the Fourth Circuit

The Fourth Circuit’s sole published opinion today came in Hancock v. Astrue, in which a panel of the Court of Appeals affirmed the denial of an application for supplemental security income (“SSI”). Chief Judge Traxler wrote the opinion, in which Judge Shedd and Judge Floyd joined (a South Carolina trifecta).

The appeal focused on the applicant’s cognitive functioning. Chief Judge Traxler wrote:

The only issue on appeal is whether the ALJ erred by concluding that Hancock’s level of cognitive functioning did not meet or equal the listed impairment for mental retardation, Listing 12.05. Listing 12.05 requires a showing of “deficits in adaptive functioning initially manifested during the developmental period; i.e., the evidence demonstrates or supports onset of the impairment before age 22″ (“Prong 1″). Listing 12.05 also requires the satisfaction of one of four additional requirements identified as Requirements A-D. At issue in this case was Requirement C, which requires “[a] valid verbal, performance, or full scale IQ of 60 through 70″ (“Prong 2″), as well as “a physical or other mental impairment imposing an additional and significant work-related limitation of function” (“Prong 3″).

The ALJ found that Hancock did not establish any of the three prongs of Listing 12.05C. Although Hancock argues that the ALJ erred with regard to his findings as to each of the three prongs, the Commissioner does not contest Hancock’s ability to establish Prong 3. Therefore, we are left to consider whether substantial evidence existed to support the ALJ’s findings with respect to Prongs 1 and 2.

The court affirmed the ALJ’s rejection of an IQ score, based on the ALJ’s assessment of the inconsistency between the findings of the consultative psychologist, Dr. Joseph Appollo, and evidence of the applicant’s actual functioning and notes of treating psychiatrists.

The court also affirmed the ALJ’s conclusion that the applicant had no deficits in adaptive functioning:

In finding no deficits in adaptive functioning generally, the ALJ concluded that “the claimant has worked several jobs and performed a variety of tasks which would be expected to be beyond the capacity of a mentally retarded person.” A.R. 19. With regard to past jobs, the ALJ found that Hancock previously worked as a battery assembler and a drop clipper. [footnote omitted] With regard to tasks, the ALJ noted that Hancock has the ability to shop, pay bills, and make change; that she takes care of three small grandchildren at a level of care that satisfies the Department of Social Services; that she does the majority of her household’s chores, including cooking and baking; that she is attending school to obtain a GED; and that she does puzzles for entertainment. We believe this evidence was sufficient to support the ALJ’s conclusion that Hancock had no deficits in adaptive functioning.

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The last of the Fourth Circuit’s unpublished opinions after argument in 2011

In the last two weeks of 2011, the Fourth Circuit issued five unpublished opinions after argument, two in criminal cases and three in civil cases, all unanimous. The court affirmed in three cases, reversed in one, and affirmed in part and vacated in part in the fifth case.

In United States v. Davis, the court affirmed denial of a motion to suppress notwithstanding the appellant’s argument that the officers extended the scope and duration of a traffic stop beyond the circumstances justifying it. A panel consisting of Judge Niemeyer, Judge Duncan, and Judge Floyd issued  a per curiam opinion.

In United States v. Buczkowski, a panel consisting of Chief Judge Traxler, Judge Agee, and Judge Diaz reduced twenty-seven counts of transporting child pornography down to one. The unpublished per curiam opinion begins as follows:

Daniel Buczkowski was convicted of one count of possessing  child pornography, see 18 U.S.C. § 2252(a)(4)(B), and twenty-seven counts of transportation of child pornography in  interstate or foreign commerce, see 18 U.S.C. § 2252(a)(1).  Buczkowski appeals, challenging the convictions and sentences imposed on the transportation counts only. While we find the  government’s evidence sufficient to establish that Buczkowski transported child pornography, that evidence established only a  single act of transportation. Accordingly, we affirm the  conviction and sentence on the first transportation count,  vacate the remaining transportation convictions and sentences, and remand for resentencing.

In Miller v. Montgomery County, the Fourth Circuit affirmed a dismissal for lack of standing. Miller sought to challenge the denial of an application for an exemption from Montgomery County’s Conservation Law relating to certain trees that Miller intended to harvest, but the landowner rather than Miller signed the application. Judge Keenan wrote the opinion, in which Chief Judge Traxler and Judge Gregory joined.

In Young Again Products, Inc. v. Acord, the Fourth Circuit affirmed the imposition of sanctions and a civil contempt order. Judge Duncan wrote the opinion, in which Judge Wilkinson and Judge Motz concurred.

In Trice, Geary & Myers, LLC v. CAMICO Mutual Insurance Company, a Fourth Circuit panel unanimously reversed a grant of summary judgment in favor of an insurance company, holding that claims brought against a policyholder triggered a duty to defend. Judge Wynn wrote the opinion, in which Judge Gregory and Judge Diaz joined.

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Everything but footnote 8

The opinion line-up for United States v. Bell, a recent Fourth Circuit opinion ordering resentencing in a drug case, showcases a defection by two of the three judges. It reads as follows:

Judge Davis wrote the opinion, in which Judge Floyd and Senior Judge Hamilton joined except as to footnote 8. Senior Judge Hamilton wrote an opinion concurring in part and concurring in the judgment, in which Judge Floyd joined.

The defecting-inducing footnote states, in part:

Perhaps in some future case we might be required to decide whether a defendant in circumstances similar to Bell’s bears a burden of production as to his or her personal consumption of a validly prescribed medication. But that question is not before us; in this case, whatever burden of production Appellant Bell may have had was satisfied by the very evidence produced by the government itself, along with the drug screens and evidence of her longstanding legitimate medical needs. Thus, to the extent the concurrence purports to announce a rule imposing an “obligation” on such a defendant to produce evidence of personal consumption at sentencing, it constitutes mere dicta and, in any event, was not argued by the government.

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Fourth Circuit issues lengthy disquisition on Confrontation Clause implications of DNA evidence admitted through lab supervisor testimony about report based on tests performed by non-testifying others in the lab

The Fourth Circuit’s opinion today in United States v. Summers contains a lengthy Confrontation Clause analysis stemming from the government’s introduction of the testimony and report of a DNA lab supervisor who testified and prepared his report on the basis of tests performed by others in the lab (who were not present to testify). Judge King wrote the opinion, which was joined in by Judge Shedd. Judge Floyd concurred in the judgment.

Judge King’s analysis discusses Melendez-Diaz v. Massachusetts and Bullcoming v. New Mexico, among other opinions.

Judge Floyd contends that the majority should not have reached the Confrontation Clause issues because any error was harmless. The majority agreed that the error was harmless, but only as an alternative holding after concluding that there was no error. The majority does, however, question the wisdom of the prosecution’s introduction of the DNA evidence. The point of introducing the evidence was to link a black NorthFace jacket to the defendant. The defendant was allegedly wearing the jacket before running from police. When they apprehended him, he was not wearing any jacket, but the police found a jacket (containing a handgun and lots of crack cocaine in its pockets) on the roof of a residence along the defendant’s flight path. Here’s what the majority says about the need for the DNA evidence:

[W]e cannot help but note that the government’s decision to introduce DNA evidence derived from the jacket had the unintended collateral effect of rendering a straightforward case significantly more complex. With respect to proving ownership of the jacket, the evidence introduced through Shea was scarcely more than the thin glaze on a dense cake baked to doneness by the officers’ largely unshakable testimony that: (1) Summers was wearing the jacket before he ran; (2) he was not wearing the jacket when he was caught; and (3) the jacket was found in the immediate vicinity of his flight path. Although we suppose that the jury could have been impressed that Quantico weighed in on the issue, we hardly think that the government needed to rely on the FBI’s star power to prevail in its open-and-shut case. Even had the district court’s admission of Shea’s report constituted error, it would surely be harmless beyond a reasonable doubt.

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Two published Fourth Circuit opinions by Judge Wynn on admissibility of expert testimony in medical malpractice case under Virginia law and statutory standing under the Telecommunications Act of 1996

The Fourth Circuit issued two published opinions in argued cases today. Judge Wynn authored both opinions, which were unanimous.

At issue in Creekmore v. Maryview Hospital was the admissibility, under Virginia Code § 8.01-581.20, of the testimony of an OB-GYN about the standard of care for a nurse’s postpartum monitoring of a high-risk patient with preeclampsia. The district court admitted the testimony and the court of appeals affirmed. The panel deciding the appeal consisted of Judge Wilkinson, Judge Wynn, and Judge Floyd.

In CGM, LLC v. BellSouth Telecommunications, the Court of Appeals held that a billing agent for competitive LECs lacked statutory standing to bring an action for declaratory relief against an incumbent LEC regarding the claim that the ILEC failed to pass on to CLECs the full value of discounts offered by the ILEC to its customers. No CLECs were parties in the case. Some key language:

CGM has no interconnection agreement with BellSouth. CGM has not brought this suit pursuant to any interconnection agreement. And no party to an interconnection agreement is a plaintiff in CGM’s suit. Because Section 251(c)’s resale duties and the related 47 C.F.R. § 51.613 are not free-standing but exist, to the extent that they do at all (given parties’ freedom to contract around them), only as embodied in interconnection agreements, CGM has no rights, and BellSouth no duties, under the circumstances of this case.

Although decided on statutory standing grounds, this case has some echoes of the Fourth Circuit’s decision on Article III standing in Neese v. Johanns:

In this case, any claim to a specific sum of money must flow from the contractual relationship between the Secretary and the producer. See 7 U.S.C. § 518b(a) (“The Secretary shall offer to enter into a contract . . . under which the producer of quota tobacco shall be entitled to receive payments under this section. . . .”) (emphasis added). Appellants, however, cannot maintain such a claim. After accepting the Secretary’s offer of payment contracts without reservation and entering into those contracts, they transferred all their rights under those contracts to third parties. Quite simply, appellants have no rights left to invoke and, therefore, lack standing to pursue further contracts or payments from the Secretary.

Procedure buffs may be interested in noting the court’s conclusion that a motion to dismiss for lack of statutory standing is properly brought under FRCP 12(b)(6) rather than FRCP 12(b)(1). It is also worth noting how easily the court dispatched the attempt to rely on the Declaratory Judgment Act as a free-standing cause of action.

The panel deciding CGM consisted of Judge Shedd, Judge Wynn, and Senior Sixth Circuit Judge Keith.

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Split Fourth Circuit panel upholds Terry-based frisk of passenger in car stopped for bad tags (and with tinted windows, in a high-crime area)

As previously discussed, the Fourth Circuit has dealt more than a few defeats to federal prosecutors this year on suppression motions arising out of Terry stops and Terry frisks. The unpublished opinions by a split panel in United States v. Braxton reveal that the Terry terrain continues to require careful navigation.

Judge Wilkinson wrote the majority opinion, in which Judge Floyd joined, affirming the district court’s denial of a suppression motion. Although the district court did not invoke the correct formula, the panel majority concluded that the facts revealed by the record justified the district court’s decision:

Here, the officers confronted a dangerous situation  presenting numerous indicia of criminal activity. They were  outnumbered by the passengers in a vehicle bearing bad tags traveling through a dangerous area with darkly tinted windows.  While “[w]e do not exclude the possibility that in some circumstances a patdown is not required[,]. . . we hesitate before criticizing [Officer Williams’s] choice of the means to protect himself in emergent circumstances on the street from the relative calm and safety of chambers.” United States v. Casado, 303 F.3d 440, 448-49 (2d Cir. 2002) (citing Graham v. Connor, 490 U.S. 386, 396 (1989)).

Proper adherence to the standards of Terry does not require  us to gamble with the lives of police officers who exercise reasonable judgment in fulfilling their duty in the trying situation presented by a roadside car stop. The Supreme Court  has long noted that “investigative detentions involving suspects in vehicles are especially fraught with danger to police officers.” Michigan v. Long, 463 U.S. 1032, 1047 (1983) (citing Mimms, 434 U.S. 106). Officer Williams executed a minimally intrusive frisk, justified at the time by a reasonable suspicion that he and his fellow officers were in a situation that could escalate and place both the officers and the occupants of the car at risk. Where the totality of circumstances supports a reasonable suspicion that Braxton was “armed and dangerous,” the absence of those three talismanic words, while error, is not fatal to the district court’s ruling in this case.

Judge Wynn dissented, objecting that “under the majority’s holding, any passenger in a vehicle with bad license tags could be subjected to a patdown search, even absent a finding of reasonable suspicion that particular is armed and dangerous, if the vehicle is stopped in a high-crime area.” According to Judge Wynn, this contradicts the rule that “an officer must have justification for a frisk or a ‘pat down’ beyond the mere justification for the traffic stop.”

Judge Wynn’s dissent criticizes the majority for making factual findings on a cold appellate record, exceeding the limited role of an appellate court. According to Judge Wynn, this led to at least one apparent factual error:

I can find no support in the record for the  majority opinion’s statement that, “Braxton then elbowed Officer Williams in an attempt to escape, but he was subdued after a struggle with Officer Williams and another assisting officer.” Ante p. 3. The transcript shows that Officer Williams recalled that Defendant “attempted to elbow me to get me off of him.” Transcript, at 56. Nothing in the record indicates that Officer Williams stated that Defendant made “an attempt to escape.”

To the contrary, Officer Williams testified under crossexamination that the police report was incorrect if it reflected that Defendant “attempted to push [Officer Williams] back and run” and that in fact Defendant complied with Officer Williams’s request to get out of the vehicle and put his hands up, allowing Officer Williams to pat him down. Transcript, at 61. He further agreed that “any insinuation in the police report” that Defendant did not comply was incorrect. Id. at 62.

This emphasis continues a theme sounded in Judge Wynn’s dissent from the Court’s published opinion in United States v. Foster, previously discussed here, which was issued on the same day as Braxton.

 

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Another Fourth Amendment defeat for “the Government” in the Fourth Circuit

Today’s split decision in United States v. Powell bristles with strong language on both sides. Writing for a panel majority consisting of himself and Judge Floyd, Judge Shedd upbraids the government and places this case among a trio of recent cases in which the government failed to justify a Terry stop and frisk:

In a case such as this, where law enforcement officers briefly pat down a person for safety reasons, reasonable suspicion that the person is armed and dangerous is necessary in order for the patdown to be lawful under the Fourth Amendment. Terry v. Ohio, 392 U.S. 1 (1968). Earlier this year, in United States v. Foster, 634 F.3d 243, 248 (4th Cir. 2011), we noted “our concern about the inclination of the Government toward using whatever facts are present, no matter how innocent, as indicia of suspicious activity.” Twice in the past few months, we reiterated this concern. See United States v. Massenburg, 654 F.3d 480, 482 (4th Cir. 2011); United States v. Digiovanni, 650 F.3d 498, 512 (4th Cir. 2011). In all three cases, we held that the Government failed to meet its minimal burden of articulating facts sufficient to support a finding of reasonable suspicion. Today, we once again are presented with a case in which the Government has attempted to meet its burden under Terry by cobbling together a set of facts that falls far short of establishing reasonable suspicion. For this reason, we vacate the judgment.

Responding in dissent, Judge King distinguishes between the justification for a Terry stop and the justification for a patdown, finding that the latter was present:

When a police officer’s life is on the line, common sense tells us that he should sooner be reasonable in his suspicion that a suspect may be armed and dangerous than in suspecting that a passerby is up to no good. The risk of dismissing a suspicion that a suspect may be armed is inherently perilous to arresting officers. As a result, the officers in this case were entitled to take reasonable steps to protect themselves and others after they received confirmation that Powell may be armed, even if that evidence might not have been sufficient for an initial Terry stop.

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Sending money to help your child illegally cross the border into the United States means that you lack “good moral character” in the eyes of the Board of Immigration Appeals

The Fourth Circuit today denied a petition for review of a decision of the Board of Immigration Appeals denying cancellation of removal to two Guatemalan parents classified as alien smugglers for facilitating the illegal entry of their four children into the United States. Judge Wilkinson wrote the published opinion in Ramos v. Holder, which was joined in by Judges Wynn and Floyd. The opinion begins as follows:

Ricardo Paz Ramos entered the United States illegally from Guatemala in 1989, and his wife Berta and their four children followed. Each child’s arrival in the United States involved asimilar sequence of events—Ricardo and Berta sent several thousand dollars to the child at a hotel in Mexico, who arrived illegally in the United States promptly thereafter. The Immigration Judge (“IJ”) and Board of Immigration Appeals(“BIA”) both determined that Ricardo’s and Berta’s monetary assistance amounted to “alien smuggling” pursuant to section 212(a)(6)(E) of the INA, and that they thus lacked the “good moral character” necessary for cancellation of removal. Because the IJ and BIA properly interpreted and applied the”alien smuggling” provision, we deny the petition for review

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Who pays when “tube bundles” fall off a truck on I-495? Fourth Circuit reverses judgment that “would blow a hole in the balance struck by the Carmack Amendment”

The Fourth Circuit issued a published opinion today in Daily Express, Inc. v. 5K Logistics, Inc., a dispute over who should pay for damages resulting from “tube bundles” that fell off of a truck onto I-495. The opinion reverses a district court judgment (Chief Judge Spencer, EDVA) in which a shipping broker prevailed on an indemnity and contribution claim against a carrier for damages and costs owed by the shipping broker to a shipper. The Court of Appeals held that the broker failed to file a timely claim against the carrier, as required by contract and as provided for by the Carmack Amendment. Judge Wilkinson wrote the opinion, in which Judges Niemeyer and Judge Floyd joined.

The opinion begins as follows:

The Carmack Amendment to the Interstate Commerce Act,49 U.S.C. § 14706, sets up a framework for the timely filing of claims against carriers for damaged cargo. In this case, it is undisputed that neither the shipper nor the shipping broker filed either a claim or a lawsuit within the prescribed time limitations. Were we to create some exception to the statutorily authorized, contractually mandated requirements of prompt filing, we would blow a hole in the balance struck by the Carmack Amendment and undermine Congress’s intent to protect carriers against stale claims. We therefore reverse the judgment of the district court in favor of the shipping broker,and remand with instructions to dismiss the lawsuit.

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What’s in your wallet? Capital One loses Fourth Circuit appeal attempting to lower its past tax liability by over $400 million.

The Fourth Circuit today issued a published opinion affirming a Tax Court judgment rejecting various claims by Capital One related to taxes owed on late-fee income and deductions for projected costs of miles rewards redemptions. Judge Wilkinson wrote the opinion for the panel in Capital One Financial Corporation v. Commissioner, which was joined in by Judges Niemeyer and Floyd.

Tax law junkies can read the opinion in full. For everyone else, here a few excerpts to provide some of the flavor of the opinion, which is quite interesting even to a non-tax specialist reader:

• “As to late-fee income, Capital One seeks to retroactively change accounting methods years after it selected and implemented an alternative method. The purported change would reduce Capital One’s taxable income for 1998 and 1999 byapproximately $400,000,000. To allow such changes without the prior consent of the Commissioner would roil the administration of the tax laws, sending revenue projection and collection into a churning and unpredictable state. Belated attempts to change accounting methods “would require recomputationand readjustment of tax liability for subsequent years and impose burdensome uncertainties upon the administration ofthe revenue laws.” Pac. Nat’l Co. v. Welch, 304 U.S. 191, 194(1938). For that reason, the Supreme Court has held that once a taxpayer has reported income according to a particular method it must live with that choice—the taxpayer has “madean election that is binding upon it and the commissioner.” Id.at 195.
• “While we appreciate Capital One’s expressed enthusiasm for complying with the requirements of the TRA, it is impossible to overlook its financial incentives to make the retroactive change. Capital One maintains that it was not trying to obtain a better tax result but only to comply with the TRA. Capital One’s persistent effort in litigation to reduce its taxable income by approximately $400,000,000, however, speaks for itself. In all events, the alleged reason or motive for a change in method of accounting does not eliminate the need to obtain consent.”
• “There is a line between a loan and a sale and it is important that we keep it bright. To characterize a loan as the sale of lending services is artful pleading and clever wordsmithing, but it is dubious law to say the least.”

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New Fourth Circuit Judge: Senate confirms Judge Henry Floyd (SC) with 96-0 vote

The Senate cannot agree on much these days, it seems, but the Senate did unanimously agree today that Judge Henry Floyd of South Carolina should be confirmed to the United States Court of Appeals for the Fourth Circuit. James Rosen of McClatchy Newspapers has the story here. The Fourth Circuit now has 14 active judges (out of a possible 15). (HT: How Appealing)

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