Woollard, MacDonald, and Standing to Raise a “Facial Challenge”

1. In a previous post, I criticized the Fourth Circuit’s habeas grant in MacDonald v. Moose. The Fourth Circuit held in that case that one textual provision of Virginia’s more encompassing “crimes against nature” statute was facially unconstitutional under Lawrence v. Texas. As my post indicated, and as some comments to the post discussed in detail, the Fourth Circuit was not making this determination de novo but rather under AEDPA’s deferential standard of review for claims adjudicated on the merits in state court proceedings.  The relevant state court determinations in MacDonald were that the statute was constitutional as applied to petitioner’s conduct and that he lacked standing to bring his facial challenge. Here is the reasoning with respect to the facial challenge:

MacDonald contends the sodomy statute, Code § 18.2-361(A), is facially unconstitutional because it violates the Due Process Clause of the Fourteenth Amendment. In accord with our previous decisions, we hold that MacDonald lacks standing to assert this claim. See McDonald v. Commonwealth, 48 Va. App. 325, 329, 630 S.E.2d 754, 756 (2006) (“[W]e will only consider the constitutionality of Code § 18.2-361(A) as applied to appellant’s conduct.”); Singson v. Commonwealth, 46 Va. App. 724, 734, 621 S.E.2d 682, 686 (2005) (defendant lacks standing to challenge statute generally); Tjan v. Commonwealth, 46 Va. App. 698, 706, 621 S.E.2d 669, 673 (2005) (same); see also Grosso v. Commonwealth, 177 Va. 830, 839, 13 S.E.2d 285, 288 (1941) (“It is well settled that one challenging the constitutionality of a provision in a statute has the burden of showing that he himself has been injured thereby.”); Coleman v. City of Richmond, 5 Va. App. 459, 463, 364 S.E.2d 239, 241 (1988) (“generally, a litigant may challenge the constitutionality of a law only as it applies to him or her”).

According to the Fourth Circuit panel opinion, however, one discrete textual provision of Virginia’s statute was facially unconstitutional, and “the state court’s standing determination, as endorsed by the district court, was contrary to and involved an unreasonable application of clearly established federal law, as determined by the Supreme Court of the United States” (emphasis added).

2. Nine days after the Fourth Circuit issued its opinion in MacDonald v. Moose, the court issued an opinion in Woollard v. Gallagher. Woollard was a Second Amendment challenge to Maryland’s “good and substantial reason” permitting requirement for gun possession outside one’s home. The district court in Woollard had held that this requirement was facially unconstitutional. In addition to rejecting Woollard’s claim that the permitting requirement was unconstitutional as applied to him, the panel opinion held that Woollard lacked standing to bring his facial challenge:

Because we conclude that the good-and-substantial-reason requirement is constitutional under the Second Amendment as applied to Appellee Woollard, we also must reject the Appellees’ facial challenge. See Masciandaro, 638 F.3d at 474. As the Supreme Court has explained, “a person to whom a statute may constitutionally be applied will not be heard to challenge that statute on the ground that it may conceivably be applied unconstitutionally to others, in other situations not before the Court.” Broadrick v. Oklahoma, 413 U.S. 601, 610 (1973); see also Gonzales v. Carhart, 550 U.S. 124, 168 (2007) (“It is neither our obligation nor within our traditional institutional role to resolve questions of constitutionality with respect to each potential situation that might develop.”).

On its face, this reasoning looks just like the reasoning that the Fourth Circuit held was “contrary to and involved and unreasonable application of clearly established federal law, as determined by the Supreme Court of the United States” when that reasoning was used by Virginia’s Court of Appeals in MacDonald.

3. The tension between the two cases cannot be explained on the grounds that the Woollard panel was unaware of the recent MacDonald decision. According to the date listed on the opinions, the two appeals were argued on the same day and two out of the three judges were the same in both cases (Judge King and Judge Diaz). And most importantly, Judge King authored both opinions.

4. The doctrine surrounding facial and as-applied challenges is notoriously murky. Some may view it as complex; others may view it as simply confused. In my view, the labels “facial” and “as-applied” hurt more than they help insofar as each lacks a stable meaning across cases. But to the extent that MacDonald’s facial challenge was an overbreadth-type (“bottom-up”) challenge, in which facial unconstitutionality depends on the proportion of unconstitutional applications to constitutional applications, then the reasoning used by the Virginia Court of Appeals in refusing to adjudicate the challenge seems unimpeachable (as the Fourth Circuit’s use of that reasoning in Woollard would seem to indicate). (For a discussion of the distinction between valid-rule  (or “top-down”) facial challenges and overbreadth-type (or “bottom-up”) facial challenges, see Richard H. Fallon, Jr., Fact and Fiction about Facial Challenges, 99 Cal. L. Rev. 915, 931 (2011), a law review article cited by Judge King’s majority opinion in MacDonald.)

5. According to the portion of the appellant’s brief quoted by the panel opinion in MacDonald, the facial challenge in that case was an overbreadth-type challenge:

MacDonald maintains that he possesses standing to pursue his facial challenge under the Due Process Clause because the anti-sodomy provision was rendered unconstitutional by Lawrence. He relies on established Supreme Court authority for the proposition that standing exists: “where the statute in question has already been declared unconstitutional in the vast majority of its intended applications, and it can fairly be said that it was not intended to stand as valid, on the basis of fortuitous circumstances, only in a fraction of cases it was originally designed to cover.” Br. of Appellant 14 (quoting United States v. Raines, 362 U.S. 17, 23 (1960)).

6. Virginia’s petition for en banc review is pending at the court. Its principal focus is the application of 2254(d) with respect to the state court’s as-applied understanding of Lawrence v. Texas. If the Fourth Circuit does grant en banc review, perhaps it will also take the opportunity to clarify the law surrounding facial and as-applied challenges more generally.

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Fourth Circuit rejects copyright infringement claim arising out of similar residential architecture designs

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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Getting away with merger: Fourth Circuit reverses mortgage fraudster’s money laundering convictions

The mastermind of a major mortgage fraud conspiracy in North Carolina was able to shed his money laundering convictions with a merger argument. In United States v. Cloud, the Fourth Circuit held today that money laundering convictions premised on the payment of money to third parties simply to cover essential operating expenses for the underlying fraud merged into the underlying fraud and could not be punished under a since-amended federal money laundering statute. Judge Diaz wrote the opinion for the court, in which Judge Gregory and Judge Davis joined.

This decision in Cloud rests on the Fourth Circuit’s decision in United States v. Halstead, 634 F.3d 270 (4th Cir. 2011). That case sets forth Fourth Circuit’s interpretation of the Supreme Court’s 4-1-4 decision in United States v. Santos, 553 U.S. 507 (2008).

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Fourth Circuit dishes loss to IRS in tax shelter case

Four owners of a trucking company sold the business’s sole remaining asset–a warehouse–and retired. After selling the warehouse, the businessmen sold their company stock to an investment company that promised to pay the company’s taxes. The investment company never did pay those taxes, and the IRS came after the former owners of the trucking company for the tax bill, which was in the neighborhood of $880,000. The IRS said the transaction with the investment company was a tax shelter scam, but the Tax Court sided with the former owners of the trucking company. A split panel of the Fourth Circuit affirmed. Judge Davis wrote the opinion for the Court in Starnes v. Commissioner, in which Judge Niemeyer joined. Judge Wynn wrote a dissenting opinion.

Depending on one’s view of the facts, either (a) the former owners of the trucking company were victims of unscrupulous cheats, persecuted by an overeager federal government out to take away their hard-earned retirement money, or (b) they pulled a fast one on the federal government, saving themselves over $100,000 each in taxes. Depending on one’s view of the law, either (a) the government should have stayed its hand because it misunderstood North Carolina law, or (b) the government was denied the benefit of federal law elevating substance over form in evaluating the tax consequences of transactions like the one at issue here.

The first few paragraphs of Judge Wynn’s dissent summarize his view of the case:

This case involves a straightforward transaction made complicated so as to facilitate the fraudulent avoidance of a tax liability. Simply put, the petitioners, former shareholders of Tarcon, reduced the sole asset of Tarcon to cash by selling that asset, a warehouse, for $3,180,000. After that October 30, 2003 sale, Tarcon had $3,091,955 in its bank account and no  tangible assets. As a result of the warehouse sale, Tarcon incurred a federal tax liability of $733,699 and a North Carolina tax liability of $147,931, for a total of $881,628. If the story had ended there, the four former shareholders, each of whom owned 25 percent of Tarcon, would have completed the liquidation of Tarcon by paying those tax liabilities and dividing the remaining sum, allowing each to receive a distribution of approximately $552,582.

Of course, the story doesn’t end there. Instead, MidCoast entered with a fraudulent scheme that would allow the former shareholders to avoid paying their $881,628 tax liability. Under its proposal, MidCoast would pay the former shareholders $2,621,136 for their Tarcon stock and legal fees; in return, Tarcon would transfer its sole asset, roughly $3.1 million in cash, to MidCoast. Why, though, would the shareholders turn over Tarcon’s $3.1 million to MidCoast and receive only $2.6 million in return?

The answer is evident when Tarcon’s outstanding tax liabilities of $881,627 are factored into the equation. Indeed, it then becomes clear that the former shareholders actually negotiated to be paid $2.6 million in cash—for cash that in reality totaled only $2,210,425, resulting in a windfall of $410,711. That windfall was, in fact, a cut from Tarcon’s $881,627 tax liability, transferred to MidCoast when it purchased the former shareholders’ stock, and which it undoubtedly was scheming to avoid under the guise of offering an “asset recovery premium.” While I recognize the intricacies of MidCoast’s subsequent actions to avoid paying the full liability of $881,627, this transaction cannot escape its ultimately simple  label: a transparent scam designed by the parties to fraudulently evade paying taxes. Accordingly, I must respectfully dissent.

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Somali pirates lose on appeal: Fourth Circuit affirms piracy convictions in U.S.S. Nicholas prosecution and reverses dismissal of piracy count in U.S.S. Ashland prosecution

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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Fourth Circuit primer on Rule 50(b) and issue preservation

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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Where are the Fourth Circuit’s piracy decisions?

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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Fourth Circuit untangles knot regarding FOIA, lawyers’ solicitation of potential clients, and the litigation exception in DPPA

The Fourth Circuit yesterday issued a decision in a messy dispute among plaintiffs’ lawyers, car dealers, and car purchasers over the use of South Carolina’s FOIA law to obtain personal information about car purchasers for use in litigation against car dealers. Judge Davis wrote the opinion for the Court in Maracich v. Spears, in which Judge Duncan and Judge Wynn joined.

The court’s summary of its holding:

[W]e hold that the district court erred in ruling that the Lawyers did not engage in solicitation. Yet, the Lawyers indisputably made permissible use of the Buyers’ personal information protected by the DPPA, here, for use “in connection with [litigation],” including “investigation in anticipation of litigation.” 18 U.S.C. §2721(b)(4). Ultimately, the Buyers’ damages claims asserted under the DPPA fail as a matter of law, notwithstanding the fact that the Buyers can identify a distinct prohibited use (mass solicitation without consent) that might be supported by evidence in the record. In short, where, as a matter of settled state law and practice, as here, solicitation is an accepted and expected element of, and is inextricably intertwined with, conduct satisfying the litigation exception under the DPPA, such solicitation is not actionable by persons to whom the personal information pertains.

The opinion notes that its decision in favor of the lawyers largely tracks the approach of the Eleventh Circuit in Rine v. Imagitas, 590 F.3d 1215, 1226 (11th Cir. 2009). The buyers relied on the Third Circuit’s decision in Pichler v. UNITE, 542 F.3d 380 (3d Cir. 2008), but the court thought that decision to be “plainly distinguishable.”

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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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NCUC approval of ICAs affirmed by Fourth Circuit in appeal brought by CMRS providers from judgment in favor of RLECs

If the title of this post means something to you, then you might find of interest the Fourth Circuit’s opinion today in New Cingular Wireless PCS, LLC v. Finley. Judge Davis wrote the opinion for the Court, which was joined in by Judge Agee and Judge Keenan.

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Fourth Circuit addresses class notices of claim in bankruptcy and related issues arising out of Circuit City bankruptcy

The Fourth Circuit’s unanimous published opinion today in Gentry v. Siegel looks to be important reading for bankruptcy lawyers and class action lawyers with putative class actions against a company that enters into bankruptcy before a class is certified. The decision arises out of notices of claim filed by lawyers who had filed putative wage-and-hour class actions against Circuit City. Judge Niemeyer wrote the opinion, in which Judge Shedd and Judge Davis joined.

I will leave it to subject-matter experts to digest the analysis, which begins with the following statement:

The Named Claimants’ efforts to pursue class actions in this bankruptcy case reveal gaps in the Bankruptcy Rules and raise some difficult procedural issues about the manner in which the Bankruptcy Rules provide for class actions in bankruptcy cases, as authorized by Rules 7023 and 9014.

The intrepid reader who continues onward will encounter some of these important-looking statements:

It is not completely clear that Civil Rule 23 could ever be applied to a contested matter. . . . For purposes of our holding, we assume, without deciding, that the Civil Rule 23 process could be applied to the resolution of a contested matter. [p. 8, n.1, emphasis in original]

* * *

[T]he Trustee’s construction of the Bankruptcy Rules is unduly cramped and unsuited for application by a court in equity seeking, by application of the Bankruptcy Rules, to accomplish the purposes of the Bankruptcy Act. The Bankruptcy Rules are tools, which include Rule 7023 and derivatively Civil Rule 23, by which the bankruptcy court as a court of equity is to accomplish the Act’s purposes. In the absence of some prohibiting rule or principle, the Bankruptcy Rules should be construed to facilitate creditors’ pursuit of legitimate claims and to allow Civil Rule 23 to be applied if doing so would result in a more practical and efficient process for the adjudication of claims. [10]

* * *

Because the Bankruptcy Rules accept the notion that class action rules may, in appropriate circumstances, be employed in a bankruptcy case, we conclude that they therefore necessarily embrace the notion that the proposal to represent a class is tentative pending approval. And with that notion comes the equally necessary propositions that if the proposal is approved, the approval relates back to when it was made, and if it is rejected, the putative class members must be given time after the court’s rejection to file individual proofs of claim. [11]

* * *

For the most part, Civil Rule 23 factors do not become an issue until the bankruptcy court determines that Rule 7023 applies by granting a Rule 9014 motion. The issue on such a motion centers more directly on whether the benefits of applying Rule 7023 (and Civil Rule 23) are superior to the benefits of the standard bankruptcy claims procedures. While some Civil Rule 23 factors could be relevant to resolving a Rule 9014 motion, extensive discovery related to class certification is not necessary.

* * *

In deciding the Rule 9014 motion, the bankruptcy court assumed that a class action could be certified, thus rendering discovery into certification irrelevant, and concluded nonetheless that the process of a certified class action would be more cumbersome and expensive than the bankruptcy process. Accordingly, the court found that in this particular case, class certification discovery was not necessary. It reached its decision on the Rule 9014 motion on the threshold question of whether the specific claims resolution process established in this bankruptcy case was superior to the resolution process in a class action, assuming that the proposed classes were to be certified. We conclude that this approach was not an abuse of discretion.

Distinct from the bankruptcy court’s denial of class action discovery, we cannot conclude that the court’s ruling on the merits of the Rule 9014 motion was an abuse of discretion. The court noted that approximately 15,000 claims had been filed against Circuit City as part of the claims process and that the structural mechanisms that the court had put in place to process claims were “well underway” and had been operating smoothly to date.

* * *

Because the bankruptcy court denied the Rule 9014 motion to apply Rule 7023, there was no requirement that unnamed class members be notified in accordance with the procedures under Civil Rule 23. The bankruptcy court would have to grant the Rule 9014 motion before the requirements of Civil Rule 23 could apply. Thus, the only notice required was that given by Circuit City for giving notice of bankruptcy procedures and the bar date.

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Report on Fourth Circuit en banc oral argument in Abu Ghraib contractor appeals

The Fourth Circuit, sitting en banc, heard oral arguments this morning in two cases asserting civil damages claims against military contractors for their activities at Abu Ghraib and other locations in the Iraq war zone. (A short write-up of the now-vacated panel decisions is available here, and more extensive  pre-argument discussions of various issues arising out of the panel opinions can be found at Lawfare here, here, here, and here.)

I attended the argument and came away with some (admittedly impressionistic) impressions that might be of interest to those following the cases who could not make it to Richmond for the argument:

– Almost all of the argument and questioning focused on whether the appellate court had jurisdiction. There was some discussion of the correctness (or not) of the D.C. Circuit’s decision in Saleh v. Titan Corp., 580 F.3d 1 (D.C. Cir. 2009), dismissing similar claims under a form of “battlefield preemption.” But most of that discussion was about the proper characterization of the doctrine: Is preemption the right way to think about the doctrine, or is it closer to an immunity? And there was much discussion of whether the contractors had a substantial claim to derivative immunity.

– Given how the argument went, it would be surprising if the court were to conclude both (1) that it has jurisdiction, and (2) that the district court properly ruled in allowing the claims against the contractors to go forward. If the Fourth Circuit concludes that it has appellate jurisdiction, the merits of the ruling are likely to be in the contractors’ favor.

– BUT it is difficult to make any confident predictions given that several of the judges either did not ask any questions or asked only one or two, leaving little to observe about their case-specific inclinations.

– Judge Niemeyer and Judge Shedd, responsible for the panel opinions, mounted vigorous questioning designed to show that a remand for discovery was not only unnecessary but also would defeat the very interests to be protected by the immunity doctrine whose applicability they needed to decide, as well as undermining some of the federal interests protected by the preemption doctrine at issue. Judge Wilkinson’s questioning revealed him to be aligned with Judge Niemeyer and Judge King on these issues.

– Judge King, author of the panel dissents, led the questioning for the jurisdictional skeptics. At various times, questions by Judge Wynn, and to a lesser extent by Judge Gregory, Judge Motz, and Judge Davis, revealed likely alignment with Judge King on this point.

– Judge Duncan asked a couple of questions that appeared to be aimed at some sort of middle ground that would allow the Fourth Circuit to dismiss for lack of appellate jurisdiction but still provide guidance to the district court that, on remand, it needs to give more weight to the federal interests threatened by further litigation of these claims. But Judge Wilkinson asked a question suggesting that, if the Fourth Circuit dismisses for lack of jurisdiction, the Fourth Circuit risks taking itself out of involvement until after trial.

– Some of the judges appeared receptive to a remand for lack of jurisdiction under the collateral order doctrine (the appellant’s theory of jurisdiction) with strong suggestions to the district court that it certify an interlocutory appeal under 1292(b). Judge Motz suggested that upholding jurisdiction under the collateral order doctrine would create a circuit split. Earlier in the argument, Judge Motz observed that the Supreme Court’s refusal to allow expansion of the collateral order doctrine was analogous to its treatment of Bivens claims.

– The federal government had a rough day. At the court’s invitation, the federal government had filed an amicus brief. (See here for Steve Vladeck’s summary of the government’s brief.) Counsel for the government, Thomas Byron, had an excellent presence and remained poised and articulate throughout. But the court was clearly not enamored with the federal government’s seeming attempt to have things both ways. When counsel for the government began with a customary expression of pleasure at the opportunity to appear at the invitation of the court, Judge Motz noted that she was “surprised” to hear that given that the brief filed by the government was “equivocal” about the issues. Later on, Judge Wilkinson said that he agreed with Judge Motz, that he thought the government was offering the “most obscure, equivocal kind of presentation . . . .” Judge Motz then interjected that she didn’t say quite that, and Judge Shedd (I think) stated something along the lines of “it sure sounded like that over here.” (Note: It’s hard to convey a flavor of how this all went over in the courtroom, so it’s probably worthwhile for those interested to listen to the recording of oral argument when it is available next week.) Although Judge Motz dissociated herself from some of the more strongly negative characterizations of the government’s position offered by Judge Wilkinson, it seemed that even at the end of argument, Judge Motz was not completely satisfied with the government’s argument. This was apparent from a question she asked about the government’s understanding of Dow v. Johnson, 100 U.S. 158 (1879), which involves the non-susceptibility of military actors to answer in civil tribunals for actions in warfare. She asked government counsel, somewhat skeptically, to explain the following statement from the government’s brief: “Dow and the policies it reflects may well inform the ultimate disposition of these claims. But we are not prepared at this point to conclude that the contractor defendants have demonstrated a right to immediate review of their contentions based on Dow alone.”

– Notwithstanding the difficulties faced by the federal government, it is conceivable that something close to the federal government’s position with respect to jurisdiction could prevail, leading to another interlocutory appeal not too far down the road. As previously noted, however, it is difficult to make any confident predictions given the sheer number of judges (14) and the limited amount of information that can be gleaned from the contents of questions.

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Two published opinions from the Fourth Circuit yesterday in argued cases

The Fourth Circuit today issued two published opinions on Monday in argued cases. Both were unanimous affirmances.

In Hennis v. Hemlick, the Fourth Circuit affirmed the district court’s dismissal without prejudice of a writ of habeas corpus challenging the United States Army’s exercise of court-martial jurisdiction. The district court’s decision was based on Councilman abstention, which takes its name from Schlesinger v. Councilman, 420 U.S. 738 (1975). The Supreme Court held in Councilman that federal courts generally should not get involved in matters that are still working their way through the military justice system.

While serving as an enlisted Army soldier in 1986, Hennis was convicted of one count of rape and three counts of murder. The Supreme Court of North Carolina reversed his conviction. Hennis was acquitted in a retrial in April 1989. He was issued a discharge from the Army on June 12, 1989, re-enlisted one day later, and retired from the Army in 2004. A cold case review by North Carolina authorities matched DNA from Hennis to the woman that he had previously been tried for raping and murdering. The Army recalled Hennis to active duty and began court martial proceedings. Hennis petitioned in federal court for a writ of habeas corpus on the ground that the Army lacked jurisdiction to court marital him for conduct that occurred before his re-enlistment on June 13, 1989. The district court abstained under Councilman, and in this decision, the Fourth Circuit affirmed the district court’s decision to abstain. Judge Wynn wrote the opinion, in which Judge King and Judge Gregory concurred.

The second case from yesterday, United States v. Winfield, addressed the authority of a district court to impose a second sentence for violations of supervised release after effectively revoking supervised release and imposing a prison sentence in a prior hearing. The panel opinion, written by Judge Gregory and joined in by Judge Shedd and Judge Davis, affirms the district court’s sentence.

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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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Dismissal without prejudice enough of a sanction for flouting discovery obligations in LaRouche litigation

A panel of the Fourth Circuit issued an unpublished per curiam opinion in Kronberg v. LaRouche affirming an order of dismissal without prejudice for failure to comply with discovery obligations. Appellants sought the harsher penalty of dismissal with prejudice, as well as a decision on a 12(b)(6) motion. But the appellate court concluded that the district court did not abuse its discretion in ordering dismissal without prejudice. The panel consisted of Judge Niemeyer, Judge Shedd, and Judge Davis.

Some key language:

[T]he decision to implement sanctions is left to the discretion of the trial court. In this case, the magistrate judge weighed the facts before it and ultimately concluded that—because Kronberg had been a diligent litigant when she had counsel of choice—it was unfair to dismiss the case with prejudice. This decision is consistent with the “strong policy that cases be decided on the merits, and that dismissal without deciding the merits is the most extreme sanction” that should only be done “with restraint.” United States v. Shaffer Equipment Co., 11 F.3d 450, 462 (4th Cir. 1993).

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Bid for Burford and Thibodaux abstention denied by Fourth Circuit in wine distribution dispute won by defendant Gallo Winery

Judge Diaz of the Fourth Circuit found himself considering North Carolina business law once again, writing the unpublished opinion in The Country Vintner of North Carolina, LLC v. E&J Gallo Winery, Inc., which was joined in by Judge Davis and Judge Keenan. Before reaching the issues of North Carolina law, though, Judge Diaz needed to address abstention issues that only arise in federal court: whether the district court should have abstained under Burford or Thibodaux. The opinion, affirming the judgment of the district court in favor of defendant Gallo Winery. The court affirms the district court’s determinations that the plaintiff’s Uniform and Deceptive Trade Practices Act claim was just a repackaged Wine Act claim, and that the Wine Act claim failed.

Here is how the opinion begins:

We consider in this case whether, under the North Carolina Wine Distribution Agreements Act, (“Wine Act” or “Act”) a wine  wholesaler’s contractual right to distribute an imported wine survives a change in the winery that imports the brand. The district court declined to abstain from resolving this issue in favor of a state court proceeding, and held that Appellant’s  distribution rights did not survive a change in importers. The district court also dismissed Appellant’s separate claim under  the North Carolina Unfair and Deceptive Trade Practices Act. We affirm.

Some key language regarding abstention:

[T]he district court was interpreting a straightforward regulatory scheme that had not been the subject of much controversy in prior state or federal cases. Further, it carefully distinguished prior cases in which we held that abstention was appropriate and found that the circumstances here were inapposite. Moreover, a 2010 amendment to the Wine Act makes it unlikely that the question presented in this appeal is likely to recur. In sum, Country Vintner has failed to overcome the heavy deference we accord district courts in deciding whether to abstain from hearing a case.

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A remand in anticipation of dismissal by the prosecution? The Fourth Circuit’s unusual opinion in United States v. Glisson.

In an unpublished disposition in United States v. Glisson, the Fourth Circuit has affirmed convictions and sentences on narcotics and firearms charges for two brothers, while vacating and remanding on one count for one of the brothers based on a Second Amendment as-applied challenge.

The panel that issued the per curiam disposition consisted of Judge Gregory, Judge Shedd, and Judge Davis. Judge Davis wrote an opinion concurring in part and concurring in the judgment.

The puzzling aspect of the decision is its remand for further evidentiary development of an as-applied Second Amendment challenge to 922(g)(9), which the Fourth Circuit upheld against a similar challenge in United States v. Staten, issued last December. In his partial concurrence, Judge Davis notes that the remand “may seem puzzling in some sense in light of United States v. Staten, — F.3d —, 2011 WL 6016976 (4th Cir. Dec. 5, 2011), but given the  disposition of this appeal, it would seem likely that the government will move successfully to dismiss that charge altogether upon remand.”

Judge Davis is right. The remand does seem puzzling. And the puzzle does not go away upon considering that the remand may be pointless. Is there a new principle that the Fourth Circuit will vacate and remand for harmless non-error?

The more prudent course seemingly would have been to affirm in light of Staten. The panel’s failure to do so, even in an unpublished disposition, suggests that the court may countenance insistence on individualized determinations under Second Amendment challenges to convictions under 922(g)(9), notwithstanding that such insistence appears unwarranted under binding circuit case law.

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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 affirms drug conspiracy conviction and sentence while warning that evidence is close to the lower boundary of acceptability

In United States v. Hackley, the Fourth Circuit today affirmed the conviction and sentence for several offenses arising out of a drug conspiracy. Judge Duncan authored the opinion, which was joined in by Judge Davis and Judge Diaz. While the ultimate outcome favors the prosecution, the language in the opinion strikes a cautionary note for federal prosecutors. The opinion begins as follows:

James Richard Hackley (“Hackley”) was convicted of several offenses related to his sale of cocaine base to a government informant and subsequent efforts to have that informant—the lead witness in the government’s case against him—murdered. Hackley challenges his convictions, the joinder of the charges into a single trial, the court’s refusal to grant him new counsel, and his sentence. Although the facts in this case come perilously close to the lower boundary of what we will accept as substantive evidence of a conspiracy to distribute drugs, for the reasons discussed below, we affirm.

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Fourth Circuit joins Fifth Circuit interpretation of sexual abuse enhancement and affirms use of modified categorical approach to conclude that South Carolina conviction for assault and battery of a high and aggravated nature qualifies for enhancement

Judge Keenan wrote a for a unanimous panel (consisting also of Judges King and Davis) today in the published opinion in United States v. Spence. The opinion begins:

In this appeal, we consider whether Troy Spence’s sentence for possession of child pornography, a violation of 18 U.S.C. § 2252A(a)(5)(B), was properly enhanced as provided in 18 U.S.C. § 2252A(b)(2) based on his prior conviction under South Carolina common law for assault and battery of a high and aggravated nature (ABHAN). The sentencing enhancement at issue applies when a defendant has a prior conviction under certain federal statutes or a prior conviction under a state law “relating to aggravated sexual abuse, sexual abuse, or abusive sexual conduct involving a minor” (the sexual abuse enhancement). 18 U.S.C. § 2252A(b)(2).

The district court, employing the modified categorical approach set forth in Taylor v. United States, 495 U.S. 575, 602 (1990) and Shepard v. United States, 544 U.S. 13, 20 (2005), relied on the indictment charging the ABHAN offense to conclude that the ABHAN conviction qualified as a predicate offense under the sexual abuse enhancement. Spence argues on appeal that the district court erred in applying the modified categorical approach, and that the court should have limited its consideration of the prior conviction to a categorical analysis only. We disagree with Spence’s argument, and affirm the district court’s judgment.

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Catching up with the Fourth Circuit’s five published opinions this past week (and one from the prior week)

It’s been a busy week here in Richmond, and I’ve fallen behind a bit in passing along notable Fourth Circuit opinions. Here’s a catch-up post reporting on six published opinions: five from this past week, and one from the week before that.

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Explicit resolution of implicit intra-circuit split on appealability of pre-trial indictment count dismissals in the Fourth Circuit

A footnote in an opinion issued earlier this week appears to resolve an implicit intra-circuit split over the government’s ability to appeal a pre-trial order dismissing a particular count or counts in an indictment when the dismissal is based on a stipulation that the government will be unable to prove (or will not seek to prove) certain facts.

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Fourth Circuit reverses sentencing determination that treated a Maryland conviction for second-degree assault as a violent felony based on facts set forth in a statement of probable cause not expressly incorporated into the statement of charges

The Fourth Circuit issued a published opinion today in United States v. Donnell reversing a sentencing determination that treated a Maryland conviction for second-degree assault as a violent felony based on facts set forth in a statement of probable cause not expressly incorporated into the statement of charges. The opinion was unanimous. Judge Davis authored the opinion, which was joined in by Judges King and Keenan.

The panel that issued this opinion is the same panel that heard oral argument in the U.S.S. Nicholas piracy case. That was the second case argued that morning; Donnell was the first. I recall from the argument that federal public defender arguing on behalf of Donnell, Paresh S. Patel, was a particularly effective oral advocate.

One of the key issues in the appeal is whether a statement of charges incorporated a statement of probable cause. That deceptively simple formulation of the issue masks some unclarity in Fourth Circuit precedent about what constitutes incorporation, some of which is addressed in the Donnell opinion. The difficulty facing the Donnell court, it appears, is that prior panels had finessed (or neglected) an important distinction in describing the manner in which statements of probable cause are or are not incorporated into a statement of charges under Maryland law. To see how the Donnell opinion resolves the issue, read the whole thing and decide what you think.

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Judge Davis advises appellant to “save the taxpayers a few dollars and forego the customary petition for rehearing in this case and seek certiorari without inordinate delay.”

One of the more unusual aspects of the two Fourth Circuit decisions issued yesterday came at the tail end of United States v. Taylor, in a partial dissent authored by Judge Davis.  The appeal involved, among other things, a sentencing enhancement imposed after application of the “modified categorical” approach under the Armed Career Criminals Act (“ACCA”).

As the fractured en banc opinions in the Fourth Circuit’s recent decision in United States v. Vann reveal, the court of appeals is deeply riven over the correct approach to sentencing enhancements using the modified categorical approach to analyzing what constitutes a violent felony under the ACCA. Even so, Judge Davis’s concluding advice about appellate strategy in Taylor is unusual in its directness.

After alluding to the “vagaries of the Supreme Court’s sentencing jurisprudence under the [ACCA],” Judge Davis contends that “only the Supreme Court itself can provide the clarification so urgently needed.” He continues: “In that spirit, I would suggest that [appellant’s] counsel . . . save the taxpayers a few dollars and forego the customary petition for rehearing in this case and seek certiorari without inordinate delay.”

This is an unusual piece of advice to offer. It raises questions: Is Judge Davis suggesting that a petition for rehearing would be futile? If so, would that futility be apparent absent the implicit suggestion of futility? Should the statement be interpreted as directed more at other Fourth Circuit judges and at Supreme Court Justices than at counsel for appellant? Is this good advice, given the ferment in the Fourth Circuit over the application of ACCA enhancements and the low probability of Supreme Court review?

With respect to the last question, it is perhaps worth recalling the identity of the other panel judges. Judge Wilkinson authored the majority opinion and Judge Motz joined in that opinion. I have not undertaken independent research into each of these jurist’s views on the ACCA in relation to the views of their colleagues on the Fourth Circuit. As a general matter, however, it is usually a safe bet that there is not an en banc majority to overturn a panel opinion authored by Judge Wilkinson and joined in by Judge Motz.

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Another ACCA appeal about application of “violent felony” label to state conviction splits Fourth Circuit panel

In addition to yesterday’s decision on gun possession in motorcycle gangs, the Fourth Circuit issued a published opinion in another gun case: United States v. Taylor. The decision came in the consolidated appeals of Daryl Taylor and Antwan Thompson from a jury verdict convicting them of being felons in possession of a firearm under 18 U.S.C. § 922(g).

Judge Wilkinson wrote the opinion for the court, which was joined in by Judge Motz. Judge Davis authored a separate opinion concurring in part and dissenting in part.

The panel unanimously agreed on the disposition of the appellate issues raised with respect to the conviction and sentence of Daryl Taylor.

The disagreement about Antwan Thompson’s sentence centered on the propriety of a 15-year mandatory minimum under the ACCA due to Thompson’s prior felony convictions. Thompson had three relevant prior convictions: two for cocaine offenses and one for second-degree assault under Maryland law. His argument on appeal was that his assault conviction was not a “violent felony” under the ACCA.

The panel majority applied the modified categorical approach, according to which a court can look at certain materials such as charging documents, plea agreements, and transcripts of plea colloquys, to determine whether the conviction was necessarily for a violent felony.

The panel majority rested on the facts set forth in a plea colloquy, according to which Thompson, in resisting arrest for a drug deal, had thrown a Styrofoam cup of liquid at one police officer and scuffled intensely with three of them, leading to a charge for assaulting the officer on the receiving end of the thrown cup of liquid. Thompson argued that he did not admit the facts set forth by the judge in the plea colloquy, but rather that the record showed only that his lawyer did not dispute those facts.

The panel majority holds Thompson to the representations made by his lawyer. By contrast, Judge Davis argues that the attorney’s say-so in declining to make any corrections or additions cannot be treated as the defendant’s confirmation of the facts set forth by the judge.

This area of the law is not one that I specialize in, but my quick take on the governing precedent as a generalist observer is that Judge Davis is parsing Shepard too finely and that the panel majority is justified in treating Thompson’s assault conviction as one for a “violent felony.”

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