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Posts Tagged ‘Keenan’

A split panel of the Fourth Circuit has reversed, on interlocutory appeal, the denial of leave to amend a Title VII class action complaint alleging company-wide gender discrimination at  Family Dollar Stores. Judge Gregory wrote the opinion for the court in Scott v. Family Dollar Stores, Inc., in which Judge Keenan (who also wrote a separate concurrence) joined. Judge Wilkinson dissented.

This case is full of issues for proceduralists and class-action lawyers. It is likely to prove a source of significant worry for those defending employment class actions in the Fourth Circuit because it allows plaintiffs to transmute their original class allegations into something substantially different three years into the litigation (after briefing on the defendant’s motion for summary judgment was almost complete). The majority and dissent each think the other misunderstands the meaning of Wal-Mart Stores, Inc. v. Dukes, and this back-and-forth is worth studying. But the majority’s answers to the dissent’s identification of the various problems with allowing leave to amend seem unsatisfactory. One prominent criticism of the Supreme Court’s recent jurisprudence tightening up pleading and class certification requirements has been excessive solicitude for corporate defendants’ costs-of-litigation arguments. This decision seem subject to the mirror-image criticism. 

Judge Wilkinson’s discussion of the shortcomings of the majority’s analysis of prejudice is persuasive, particularly given the “clearly erroneous” standard of appellate review of factual determinations related to prejudice wrapped inside the “abuse of discretion” standard for reversing a denial of leave to amend. Perhaps the most impassioned part of Judge Wilkinson’s dissent, however, is his discussion of bad faith. Here is how that discussion begins:

A district court’s refusal to permit a pleading amendment on bad faith grounds is justified where “the plaintiff’s first theory of recovery is based on his own reading of . . . cases and it turns out that he misinterpreted how that theory would apply to the facts of his case.” [438 F.3d] at 428 (emphasis omitted). That situation is precisely what occurred here. Plaintiffs misinterpreted how certain class action precedents would apply to their case and then sought to construct an entirely new set of facts to overcome their error. Their willingness to adopt contradictory factual positions in order to match their evolving legal theories evidences a degree of bad faith sufficient to warrant denial of leave to amend. To the old-fashioned view that prior representations to a court actually count for something, the majority answers: Not much.

Judge Keenan writes separately “to emphasize that despite the dissent’s dystopian view, the majority has rendered a straightforward and limited decision: that the plaintiffs should be permitted to amend their original complaint after a dramatic shift in the law regarding class action certification.” Judge Keenan also notes that the majority opinion does not dictate that class certification is appropriate, and that “if the allegations included in the amended complaint ultimately are not substantiated, the class simply will not be certified, and the plaintiffs’ case will fail.” This observation, however, only underscores the prejudice that the plaintiffs’ flip imposes on the defendant. As the district court observed, “Plaintiffs wish to pursue extensive discovery to support and clarify their new theories, which will require the parties to re-open and conduct new expert discovery based on plaintiffs’ changed version of the facts.”

A footnote in Judge Wilkinson’s dissent responds to Judge Keenan’s concurrence, using about one-and-a-half times as many words in the footnote as the concurrence itself contained. After reciting a litany of questions assertedly unanswered by the majority, Judge Wilkinson concludes: “Perhaps my fine colleagues will some day provide some answers to some of these questions, but for now they are doing what football teams usually do on fourth down.”

On a different note, this is the second decision I’ve noted this week involving the concept of pendent appellate jurisdiction. The Seventh Circuit’s use of what Stephen Vladeck has described as “pendent appellate bootstrapping” seems to have been at the root of the Supreme Court’s DIG in Madigan v. Levin yesterday. The Fourth Circuit’s decision today was enabled by the court’s decision to use pendent appellate jurisdiction to review the denial of leave to amend on interlocutory appeal of the class certification decision. Unless I missed it, Judge Wilkinson did not take issue with this aspect of the majority’s decision, although doing so might have fit well with one of the primary themes of his dissent, namely that “this is a rude reversal.”

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The Fourth Circuit affirmed the grant of summary judgment to the defendant in a copyright infringement claim brought by a Charlotte, NC architecture firm (Building Graphics, Inc.) against a multi-state building company (Lennar Corp.) and an architecture firm hired by that company (Drafting & Design, Inc.). The appellate court concluded that the plaintiff firm had not “marshaled sufficient evidence to support a finding that there exists a reasonable possibility that [the defendants] had access to its copyrighted plans.” Judge Davis wrote the opinion for the court in Building Graphis v. Lennar Corp., in which Judge Keenan and Judge Gibney (EDVA) joined. (For those who are interested in the potential similarities, an appendix to the opinion includes floor plans and pictures of the houses.)

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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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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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The Fourth Circuit today issued published opinions in piracy prosecutions arising out of foiled attacks on the U.S.S. Ashland and the U.S.S. Nicholas. In both, the federal government won and the pirates lost.

The principal opinion, United States v. Dire, affirms the convictions and life-plus sentences of the Somali defendants against several challenges, including the claim “that their fleeting and fruitless strike on the Nicholas did not, as a matter of law, amount to a § 1651 piracy offense.” Judge King wrote the opinion for the Court, in which Judge Davis and Judge Keenan joined.

The other opinion, United States v. Said, vacates the dismissal of the § 1651 piracy count in the prosecution arising out of the attack on the U.S.S. Ashland. Judge King wrote the opinion for the Court, in which Judge Davis and Judge Keenan joined.

The Dire decision is a ringing endorsement of the thorough analysis provided by Judge Mark Davis (EDVA) earlier in the case. See United States v. Hasan, 747 F. Supp. 2d 599 (EDVA 2010). The Fourth Circuit’s opinion states: “Simply put, we agree with the conception of the law outlined by the court below. Indeed, we have carefully considered the defendants’ appellate contentions–endorsed by the amicus curiae brief submitted on their behalf [filed by counsel for the Said defendants]–yet remain convinced of the correctness of the trial court’s analysis.”

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The Fourth Circuit today affirmed the dismissal of a First Amendment challenge to Arlington, Virginia’s prohibition of a doggy daycare’s mural near the Shirlington Dog Park. Judge Diaz wrote the opinion for the Court in Wag More Dogs, LLC v. Cozart, which was joined in by Judge Duncan and Judge Keenan. The challenger was represented by the Institute for Justice, which has a case page with background and more information, together with a response to today’s decision.

My preliminary reaction is that the opinion’s First Amendment analysis is overly deferential to the government. In assessing whether the challenged sign ordinance is content-based or content-neutral, the opinion follows the regrettable path of focusing almost exclusively on whether the ordinance was enacted because of disagreement with the message conveyed. The most underdeveloped part of the opinion, however, is its application of intermediate scrutiny, particularly the narrow tailoring prong. The county asserted that its ordinance serves two interests: promoting traffic safety and enhancing the County’s aesthetics. The county’s enforcement of its ordinance with respect to the challenged mural raises serious questions about how the ordinance is “narrowly tailored” to serve these interests, questions that the opinion simply does not address. The county told Wag More Dogs that the mural would not run afoul of the ordinance if (1) it depicted anything other than pictures relating to the doggy daycare business, or (2) it included the phrase “Welcome to Shirlington Park’s Community Canine Area.” Given the conceded lawfulness of hypothetical alternative murals that comply with either (1) or (2), it is hard to see how the ordinance is tailored at all, much less narrowly tailored, to the promotion of traffic safety or the enhancement of the County’s aesthetics. Instead of examining this issue, however, the opinion conclusorily asserts that the ordinance’s sign and location restrictions do no more than eliminate the exact source of the evil it sought to remedy.

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The Fourth Circuit’s decision today in Belk, Inc. v. Meyer Corp. provides a detailed primer–at one party’s expense, unfortunately–on the requirements of Rule 50(b) and various other issue-preservation matters. Judge Davis’s opinion for the court, which was joined in by Judge Duncan and Judge Keenan, affirms a jury verdict on federal trade dress infringement and North Carolina Unfair and Deceptive Trade Practices Act claims that resulted in an award of $1.26 million. Because so few business disputes actually make it to trial in federal court, and of those that do, so few result in published appellate opinions, the opinion is worth reading is a refresher for anyone interested in presenting issues so that they are properly preserved for appeal.

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