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The per curiam unpublished certification order in Travco Insurance Company v. Ward was entered by a panel consisting of Judge Shedd, Judge Wynn, and Senior Sixth Circuit Judge Keith.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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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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4th Circuit vacates judgment against super-cautious former trustees of ERISA plan

The Fourth Circuit today vacated  a judgment issued against the former trustees of an ERISA plan. Judge Agee wrote the opinion  in Plasterers’ Local Union No. 96 Pension Plan v. Pepper, which was joined in by Judge Duncan and Senior Sixth Circuit Judge Damon Keith.

After losses in the 1970s and ’80s, the former trustees adopted a very conservative investment plan and refused to consider deviations from it. Consequently, the plan generated lower returns than it would have adopted had it followed a more aggressive strategy.

The opening paragraph of the opinion:

Edgar Pepper and James Lertora (collectively “the Former Trustees”), former trustees of the Plasterers’ Local Union No.96 Pension Plan (“the Plan”), appeal from the judgment of the United States District Court for the District of Maryland in favor of the current trustees of the Plan (“the Current Trustees”). The district court’s judgment was based on its finding that the Former Trustees breached their fiduciary duties under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., regarding the investment of Plan assets as set forth under 29 U.S.C. § 1104(a)(1)(B) and (C). On appeal, the Former Trustees challenge the district court’s determination as to liability, its method of calculating damages, and the award of attorneys’ fees. We conclude that the district court erred as to each of these issues, and therefore vacate the judgment and remand the case for further proceedings.

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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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Is a late-filed FTCA claim against the United States subject to sua sponte dismissal for lack of subject-matter jurisdiction? A Fourth Circuit unpublished per curiam opinion says so

Earlier this week, the Fourth Circuit released an unpublished per curiam opinion in Zeno v. United States that affirms the dismissal of claims under the FTCA and state law. The Fourth Circuit held that the FTCA claims were filed late and that the state claims were barred by collateral estoppel. The panel that issued the per curiam opinion consisted of Judges Duncan and Agee, and Senior Judge Keith (of the Sixth Circuit).

One part of the ruling that may have benefited from additional elaboration was the discussion of the dismissal of the FTCA claims. The district court dismissed the FTCA claims for lack of subject-matter jurisdiction upon concluding that the plaintiffs alleged only intentional torts. The Fourth Circuit did not address this basis of the district court’s opinion, but instead affirmed on the alternative ground that the claims were filed too late. The panel treated this late filing as a defect in subject-matter jurisdiction. By doing so, the panel avoided the need to address whether the federal government’s motion to dismiss for untimeliness, filed just one week before oral argument, was itself untimely.

The Fourth Circuit relied on circuit precedent, Gould v. United States, 905 F.2d 738 (4th Cir. 1990) (en banc), that treats filing outside of the FTCA statute of limitations as a jurisdictional defect. The Gould decision, however, predates a series of cases in the past several years in which the Supreme Court has reconsidered the “jurisdictionality” of various rules.

I have not undertaken extensive independent research, but this analysis by Adam Bain (Senior Counsel, Environmental Torts Section, Torts Branch, Civil Division, United States Department of Justice) indicates that, as of November 2010, the circuits were split on the jurisdictionality of the FTCA statute of limitations. The closest on-point Supreme Court precedent appears to be John R. Sand & Gravel Co. v. United States, 552 U.S. 130 (2008). In John R. Sand, the Supreme Court held that the statute of limitations for bringing claims against the United States in the United States Court of Federal Claims was jurisdictional.

It very well could be that a thorough analysis of the continuing viability of Gould in light of intervening Supreme Court jurisdictionality precedent  (or even some quick research identifying a controlling precedent containing such analysis) would reveal that the panel’s decision to treat the FTCA statute of limitations as jurisdictional was correct. But the casual invocation of Gould appears to be too quick.

It is obviously much easier, as an academic observer, to suggest that more analysis would have been helpful, than it is to decide, as a judge, how much analysis to provide. But when a court of appeals affirms on alternate grounds, and particularly when the decision on the alternate ground lets the government off the hook for a late-filed claim of untimeliness, an in-depth analysis would appear to be particularly warranted. Because those more familiar with the case could have had many reasons for concluding otherwise, I flag the jurisdictionality issue more for the purpose of bringing attention to the issue going forward than to second-guess this particular decision looking backward.

An examination of this issue by the Fourth Circuit may be warranted in an appropriate case. A quick search as I was writing this post revealed a thorough discussion of the jurisdictionality of the FTCA statute of limitations in an opinion by Magistrate Judge Auld of the Middle District of North Carolina issued this past Friday in Smith v. United States. The issue in that case is the availability of equitable tolling, not waiver or forfeiture by the government through an untimely raising of the statute of limitations, but the “jurisdictionality” characterization is important to both analyses. Guidance from the Fourth Circuit on this issue could have obviated the need for such an extensive legal analysis.

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From release for insufficient evidence (state) to a 400-year sentence affirmed on appeal (federal)

The Fourth Circuit yesterday released an unpublished opinion affirming the conviction of, and 400-year sentence imposed upon, Timothy Poole. Judge Duncan wrote the opinion, in which Judge Agee and Senior Judge Damon Keith (of the Sixth Circuit) joined.

Poole was convicted of several counts of mail and wire fraud, and one count of conspiracy to commit mail fraud. The heavy sentence resulted from the application of a first-degree murder cross-reference. The government alleged and proved that Poole killed his adoptive mother and her husband in an attempt to inherit from his adoptive mother’s estate. Interestingly, Poole was first arrested and charged in the state system, but was released by a part-time magistrate who found insufficient evidence to present Poole’s case to a grand jury. Earlier news coverage here and here.

 

 

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