Circuit Splits

Circuit Split Roundup

For the latest coverage of noteworthy issues dividing the federal courts, check out the following links:

• R. Holtzman Hedrick, On The Radar: Supreme Court Set to Resolve Circuit Split as to Definition of Supervisor Under Title VII, National Law Review (Oct. 24, 2012).

• Glenn Lammi, Update: San Francisco Seeks Rehearing of 9th Circuit Loss on Cellphone Warnings, WLF Legal Pulse (Oct. 25, 2012).

• Valerie Brennan, Decisions on trademark licenses in a licensor bankruptcy reinforce circuit split, Lexology (Oct. 25, 2012).

• John Summers and Michael Newman, The “full” method of measuring the Court’s review of decisions by the courts of appeals: October Term 2011, SCOTUSblog (Oct. 23, 2012).

10th Circuit Reaffirms Position in Circuit Split Over FELA Jurisdictional Requirement

In Arbaugh v. Y & H Corp., the Supreme Court established a bright-line rule to guide lower courts in determining whether to treat a statutory element as a jurisdictional prerequisite or merely an essential ingredient of a particular claim:

If the Legislature clearly states that a threshold limitation on a statute’s scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue. . . . But when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as non-jurisdictional in character.

546 U.S. 500, 515-516 (2006) (internal citations omitted).

Last week the Tenth Circuit reaffirmed its position on a point of law first articulated in Sullivan v. Scoular Grain Co., in which the court “noted that federal question jurisdiction exists so long as the essential elements of an [Federal Employers Liability Act, or “FELA”] claim — including the defendant's common carrier and employer status — are alleged.” Smith v. Rail Link, Inc., No. 11-8011 (10th Cir. Oct. 23, 2012) (citing Sullivan v. Scoular Grain Co., 930 F.2d 798, 802-03 (10th Cir. 1991)).

The Tenth Circuit panel acknowledged that other circuits have taken the opposite view on the matter, but expressed confidence that it was on the right side of the conflict:

    In light of the absence of discussion on the jurisdictional question in Sullivan, and subsequent Supreme Court teachings on the point (e.g., Arbaugh), we might question the precedential value of Sullivan's holding on this narrow question.

    Nevertheless, because the FELA statute does not speak to these elements in jurisdictional terms, we see no reason to disturb the implicit conclusion reached in Sullivan.⁵ Accord Arbaugh, 546 U.S. at 511 (directing federal courts to focus on provisions of a statute explicitly speaking in jurisdictional terms when distinguishing between essential ingredients of a claim and jurisdictional requirements).⁶ Accordingly, consistent with Sullivan, we conclude that the district court had subject matter jurisdiction to hear this case, and thus had the power to enter final judgment.

    ⁵ Although the Supreme Court has not directly addressed this question, it has hinted that these elements are essential ingredients of a claim for relief under FELA rather than prerequisites to the exercise of federal question jurisdiction. See CSX Transportation, Inc. v. McBride, 131 S. Ct. 2630, 2644, 180 L. Ed. 2d 637 (2011) (speaking to "limitations" — as opposed to jurisdictional barriers — on "who may sue, and for what" when referring to a defendant's common carrier and employer status).

    The Court has suggested that the requirement that an employee be engaged in interstate commerce at the time of injury is a jurisdictional requirement. See Reed v. Pennsylvania Rail Co., 351 U.S. 502, 508, 76 S. Ct. 958, 100 L. Ed. 1366 (1956) (upholding district court's exercise of federal question jurisdiction over a FELA claim on the ground that the plaintiff's employment duties were in furtherance of interstate commerce operations of a defendant who was undisputedly a common carrier employer). But it is logical to distinguish the "interstate commerce" element from the "common carrier" and "employer" elements given that the former justifies Congress legislating in this field in the first place under the Constitution's Commerce Clause, while the latter are requirements that Congress chose to impose separate from establishing its power to legislate.

    In this case, there is no dispute whether Ms. Smith was furthering interstate commerce when she was injured — she was facilitating the loading of coal that will eventually be distributed around the country.

    ⁶ We recognize that holdings from other circuits suggest that these requirements are jurisdictional in nature. See Williamson v. Consolidated Rail Corp., 926 F.2d 1344, 1346 (3d Cir. 1991) (affirming district court's dismissal for lack of subject-matter jurisdiction where the case was brought under FELA and the trial court concluded that the defendant was not the plaintiff's employer as a matter of law); Mickler v. Nimishillen & Tuscarawas Railway Co., 13 F.3d 184 (6th Cir. 1993) ("The sole basis for federal jurisdiction in this case is FELA. Because defendant is not a common carrier and FELA does not apply, there is no federal question."); Aho v. Erie Mining Co., 466 F.2d 539 (8th Cir. 1972) (affirming district court's determination that jurisdiction was lacking where defendant in a FELA action was not a common carrier).

    While there is substantial authority from our sibling circuits suggesting a conclusion different from the one we reaffirm today, we think that Sullivan's holding better accords with the Supreme Court's most recent teachings on the difference between essential elements of a claim (which are not jurisdictional) and jurisdictional requirements. Accordingly, we do not disturb it.

Smith v. Rail Link, Inc., No. 11-8011 (10th Cir. Oct. 23, 2012) (10th Cir. Wyo. Oct. 23, 2012).

Law Professor Urges Congress to Quiet the "Constitutional Cacophony" Coming from Circuit Conflicts Over the 4th Amendment

Wayne Logan, a law professor at Florida State College of Law, just published a new article in the Vanderbilt Law Review that "highlights the existence of over three dozen extant circuit splits" related to the Fourth Amendment. The article, entitled "Constitutional Cacophony: Federal Circuit Splits and the Fourth Amendment," provides a convenient summary of the empirical research conducted on circuit splits to date, and discusses the nature, prevalence, and implications of circuit splits involving the Fourth Amendment.

Professor Logan ultimately concludes that the relatively large number of circuit splits over Fourth Amendment issues

    (1)     "undermine[s] the nation’s sense of shared constitutional culture, highlighting the inability of the               courts of a single sovereign—the U.S. Government, perceived by most Americans as the prime               expositor of national constitutional law—to render consistent constitutional outcomes";

    (2)      "present[s] difficult choice of law questions when federal prosecutions entail police work crossing                    circuit boundaries";

    (3)     "complicate[s] whether a right is 'clearly established' in constitutional tort litigation or 'settled' for                     purposes of the 'good faith' exception to the exclusionary rule"; and

    (4)     "contribute[s] to possible federal forum shopping."

Professor Stevenson and I have expressed similar concerns on this blog here, here, and here.

So who should bear responsibility for restoring uniformity to Fourth Amendment jurisprudence? Not the nine justices on the Supreme Court, says Professor Logan, who points out that "the Court’s plenary docket is now smaller than at any time in its recent history." Professor Logan argues that Congress is also not up to the task: "while Congress can clarify, amend, or repeal a federal statute variously interpreted by circuits, only the Court can definitively resolve a constitutional conflict." Instead, Logan "urges resuscitation by Congress of the federal certification statute, which has long empowered circuit courts to certify legal questions to the Court for authoritative determination."

You can read the abstract posted on the Vanderbilt Law Review's website here.

[*Hat tip to Orin Kerr, who reviewed the article on The Volokh Conspiracy yesterday.]

Circuit Split Roundup

For the latest coverage of noteworthy issues dividing the federal courts, check out the following links:

• Andrew Hoffman, South Carolina Supreme Court Splits with the Ninth Circuit Regarding Stored Communications Act Protections for Webmail, Information LawGroup (Oct. 22, 2012).

• Graham Martin, Circuit Split on Construing Statutory Language in Child Pornography Restitution Cases, Lawyerist.com (Oct. 3, 2012).

• Circuit Split: Severance Payments Not Subject to FICA?, LexisNexis Tax Law Community (Oct. 18, 2012)

• Joseph Celentino, Circuit Split Deepens on Sham Marriage Rulings, matrimonialverification.com (Oct. 18, 2012).

Can the Doctrine of Laches Serve as a Defense to Injunctive Relief?

Can the doctrine of laches serve as a defense to injunctive relief? Last week the First Circuit noted in Oriental Fin. Group, Inc. v. Cooperativa De Ahorro Crédito Oriental that seven of the eight federal circuits that have answered this question have done so in the affirmative:

"The argument that laches is never a defense to an injunction, no matter what the equities, has been asserted and rejected in several cases." 6 McCarthy, supra, § 31:6 n.2.

The general rule of the circuits, as quoted with approvalby Professor McCarthy, has been that "'mere delay' will not, by itself, bar a plaintiff's suit, but there must be some element of estoppel, such as reliance by the defendant. . . . All this means, however, is that a balancing of the equities is required, which would be the case with any principle of equity." 6 Id. § 31:6 (quoting Saratoga Vichy Spring Co. v. Lehman, 625 F.2d 1037, 1040 (2d Cir. 1980)). This view is corroborated by a majority of the circuits. See, e.g., Ray Commc'ns, Inc. v. Clear Channel Broad., Inc., 673 F.3d 294, 307 (4th Cir. 2012) (noting that "laches may act as a bar to both monetary and injunctive relief under certain circumstances," such as where aggravating factors cause the balance of the equities to strongly favor the defendant (emphasis in original)); Univ. of Pitt. v. Champion Prods., Inc., 686 F.2d 1040, 1045 (3d Cir. 1982) (noting that cases can "give rise to affirmative rights in the defendant as a result of detrimental reliance" under a laches theory, but that cases involving "meredelay" will not bar prospective injunctive relief); Prudential Ins. Co. v. Gibraltar Fin. Corp., 694 F.2d 1150, 1152 n.1 (9th Cir.1982) (noting that that "[t]here is a wealth of authority in other circuits that laches can bar injunctive relief" and citing several cases where the balancing of the equities favored the defendant); Armco, Inc. v. Armco Burglar Alarm Co., Inc., 693 F.2d 1155, 1161 n.14, 1161-62 (5th Cir. 1982) (noting that "[t]here is no doubt that laches may defeat claims for injunctive relief" and considering the equitable factors involved in the laches defense); Saratoga Vichy Spring Co., 625 F.2d at 1040 (noting that a balancing of the equities beyond "mere delay" is needed to bar the plaintiff's prayer for injunctive relief under a laches theory); Seven-Up Co. v. O-So-Grape Co., 283 F.2d 103, 106 (7th Cir. 1960) ("Laches does not necessarily constitute a conclusive and automatic bar to injunctive relief in trademark actions. However, in many instances, the delay may be so prolonged and inexcusable that it would be inequitable to permit the plaintiff to seek injunctive relief as to future activities.").

Nos. 11-1473 & 11-1476, at n.9 (1st Cir. Oct. 18, 2012).

Which circuit is the lone dissenter? If you guessed “Sixth Circuit,” you are correct:

Currently only the Sixth Circuit has suggested that laches cannot be a defense to injunctive relief. Kellogg Co. v. Exxon Corp., 209 F.3d 562, 568 (6th Cir. 2000) ("Although laches precludes a plaintiff from recovering damages, it does not barin junctive relief."). McCarthy suggests that "a careful reading of [this case] reveals either that such language was dictum, that [the case was] lacking the traditional elements of an estoppel by laches or that [it] was merely referring to 'delay' per se." 6 McCarthy, supra, § 31:6. Indeed, Kellogg acknowledges that 'there is that narrow class of cases where the plaintiff's delay has been so outrageous, unreasonable and inexcusable as to constitute a virtual abandonment of its right.'" 209 F.3d at 569 (quoting Univ. Of Pitt., 686 F.2d at 1044).

Id.

11th Circuit Weighs in on Whether a Public Employee's Actual Job Duties Affect Their First Amendment Rights

Last week the Eleventh Circuit addressed an issue on which the federal circuits are sharply divided: whether a public employee's actual job duties (as opposed to their formal job description) affect their employer's right to discharge them for political disloyalty without violating the First Amendment. 

In her dissenting opinion, Judge Beverly Martin summarized the panel majority’s position, relevant Supreme Court precedent, and the “sharply conflicting views” taken by sister circuits:

I respectfully dissent. The majority makes a significant mistake when it comes to answering a crucial question about how to apply the Supreme Court's decisions in Elrod v. Burns, 427 U.S. 347, 96 S. Ct. 2673, 49 L. Ed. 2d 547 (1976), and Branti v. Finkel, 445 U.S. 507, 100 S. Ct. 1287, 63 L. Ed. 2d 574 (1980).¹ That question is, in determining whether political loyalty is an appropriate requirement for the effective performance of a position held by a public employee—such that the employee can be terminated without violating the First Amendment—are the specific facts regarding the employee's actual job duties relevant? The majority here says that they are not. See Majority Op. at 23-25. Rather, the majority claims, the only thing that needs to be examined is the Georgia statute that contains the formal job description for all deputy clerks in the state. See id.

1. Elrod and Branti involved public employees who were discharged because of their political affiliation. See Elrod, 427 U.S. at 349, 96 S. Ct. at 2678 (plurality opinion); see also Branti, 445 U.S. at 508-11, 100 S. Ct. at 1289-91. Our precedent holds that the governmental interest in political loyalty recognized as valid in Elrod and Branti may also justify the discharge of a public employee who fails to support a particular candidate, see Terry v. Cook, 866 F.2d 373, 377 (11th Cir. 1989); see also Epps v. Watson, 492 F.3d 1240, 1244-45 (11th Cir. 2007), or who decides to run as a candidate herself, see Randall v. Scott, 610 F.3d 701, 713 (11th Cir. 2010).

Our precedent does not support the majority's conclusion that the inquiry is such a narrow and purely legal one. Indeed, in Stegmaier v. Trammell, 597 F.2d 1027 (5th Cir. 1979), the former Fifth Circuit squarely held that whether a public employee holds a position from which she can be lawfully dismissed under Elrod is a "question of fact" that must be resolved in light of the specific evidence that is presented in a given case. Id. at 1034 & n.8.² Further, "whether a particular public employee [can be lawfully terminated] can be answered only by analyzing the nature of [that] employee's responsibilities." Id. at 1035. This means that both "[t]he inherent powers and [the] actual job responsibilities of the position involved . . . should be part of the analysis." Parrish v. Nikolits, 86 F.3d 1088, 1093 (11th Cir. 1996) (emphasis added).³

2. In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981) (en banc), this Court adopted as binding precedent all decisions of the former Fifth Circuit handed down before October 1, 1981. Id. at 1209.

3. At least one of our sister circuits has understood Stegmaier to mean that the actual job responsibilities of a public employee are relevant. See Dickeson v. Quarberg, 844 F.2d 1435, 1442 (10th Cir. 1988).

I recognize that not all of our prior cases have been clear or consistent on this issue. See, e.g., Cutcliffe v. Cochran, 117 F.3d 1353, 1358 (11th Cir. 1997) (construing our opinion in Terry v. Cook, 866 F.2d 373 (11th Cir. 1989), to preclude a factual determination into the actual job responsibilities of deputy sheriffs in Florida). But the appropriate response to this is to apply our prior precedent rule and adhere to the holding of Stegmaier. See Morrison v. Amway Corp., 323 F.3d 920, 929 (11th Cir. 2003) (noting that, under our prior precedent rule, we look to the earliest relevant case in order to resolve a conflict among our decisions). The majority here fails to abide by this basic requirement.

I am also concerned that the majority opinion is not consistent with the thrust of Supreme Court precedent. I realize that, following Elrod and Branti, the Supreme Court has not had the chance to address the specific question presented by Ms. Underwood's case, and our sister circuits have adopted sharply conflicting views. Compare, e.g., Jantzen v. Hawkins, 188 F.3d 1247, 1253 & n.1 (10th Cir. 1999) (holding that the inquiry "must focus on the inherent powers of the positions and the actual duties performed"), and Horton v. Taylor, 767 F.2d 471, 477 (8th Cir. 1985) ("The Branti test is a functional one, focusing on the actual duties an employee performs."), with, e.g., Nader v. Blair, 549 F.3d 953, 961 (4th Cir. 2008) (declining to examine "the actual duties" performed and focusing on the job description only), and Gordon v. County of Rockland, 110 F.3d 886, 888 (2d Cir. 1997) (holding that the focus is on "the written job description" and not "the duties actually performed").

But the Supreme Court's decision in Garcetti v. Ceballos, 547 U.S. 410, 126 S. Ct. 1951, 164 L. Ed. 2d 689 (2006), casts doubt on the approach taken by the majority today. In Garcetti, the Supreme Court rejected "the suggestion that employers can restrict employees' rights by creating excessively broad job descriptions." Id. at 424, 126 S. Ct. at 1961. In view of that, the Court established that "[t]he proper inquiry is a practical one." Id. The reason for this is obvious. "Formal job descriptions often bear little resemblance to the duties an employee actually is expected to perform." Id. at 424-25, 126 S. Ct. at 1962. Thus, while the formal job description might support a particular rationale for restricting an employee's First Amendment rights, the scope of her actual job might not do so. Relying on the formal job description can therefore result in the excessive restriction of an employee's constitutional rights.

Unfortunately for Ms. Underwood, her case illustrates this danger perfectly. The record here underscores a vast gulf between what is formally provided under Georgia law and what is the reality on the ground.⁴ The Georgia statutes state that deputy clerks have the "same" powers and duties as the clerk herself. O.C.G.A. § 15-6-59(b). However, this was not the reality for the deputy clerks serving under Mr. Tucker. See Majority Op. at 23. Nor is this the reality for the deputy clerks serving under Ms. Harkins. Indeed, in her deposition, Ms. Harkins conceded that her deputy clerks have little discretion in their job and instead are required to follow specific instructions to execute limited, well-defined tasks. See Doc. 39 at 83-86. If "there's any uncertainty" about what to do, she indicated, the deputy clerk must go to her to obtain more specific instructions. Id. at 85-86.

4. In reviewing the summary judgment ruling, I must look at the record in the light most favorable to Ms. Underwood. See Curves, LLC v. Spalding County, Ga., 685 F.3d 1284, 1289 (11th Cir. 2012).

Thus, the formal job description for the deputy clerks "bear[s] little resemblance" to their actual job. Garcetti, 547 U.S. at 425, 126 S. Ct. at 1962. The reality of this case is that the powers and duties of the deputy clerks depart from those set forth in O.C.G.A. § 15-6-59(b). Accord Calvert v. Hicks, 510 F. Supp. 2d 1164, 1173 (N.D. Ga. 2007) (finding, based on the record evidence, that "the roles of Clerk and deputy clerk" in Fulton County "are not the same," and that Georgia law only "nominally grants deputy clerks" the same authority as the clerk). At this stage of the litigation, Ms. Underwood has carried her burden of showing that, in her position as deputy clerk, she was a ministerial-level employee responsible for performing "limited and well-defined tasks." Id.

This is significant because binding precedent tells us that, insofar as such an employee exercises her First Amendment rights during an election, the governmental interest in political loyalty cannot justify her termination in the aftermath.⁵ Indeed, under Elrod and Branti, the governmental interest in political loyalty can support the discharge of a public employee only if political loyalty is an appropriate requirement for that employee's job. See Terry, 866 F.2d at 378; see also Epps v. Watson, 492 F.3d 1240, 1245 (11th Cir. 2007). And political loyalty is not an appropriate requirement for positions that involve "limited objectives and defined duties and [that] do not require those holding them to function as the alter ego of the [elected official] or ensure that the policies and goals of the office are implemented." Terry, 866 F.2d at 378.⁶

5. Of course, "employees may always be discharged for good cause, such as insubordination or poor job performance." Elrod, 427 U.S. at 366, 96 S. Ct. at 2686 (plurality opinion). However, Ms. Harkins admitted for the purpose of her summary judgment motion that she fired Ms. Underwood because Ms. Underwood chose to exercise her First Amendment right to be a candidate. Majority Op. at 9.

6. In Terry, we clarified that "[a]lthough it can be said that each job in [an] office implements the policies of the office," political loyalty is not an appropriate requirement for positions that involve "limited and defined roles." 866 F.2d at 378.

The majority's decision to rely only on the formal statutory job description of the deputy clerks to uphold Ms. Underwood's termination has the effect of burdening Ms. Underwood's First Amendment rights beyond that which the Constitution allows. This is precisely the kind of danger that the Supreme Court warned about in Garcetti. See 547 U.S. at 424-25, 126 S. Ct. at 1961-62.

* * *

Unlike the majority, I do not think that we can ignore the facts regarding the scope of Ms. Underwood's actual duties, and in view of those facts, I think Ms. Underwood should be allowed to proceed to trial with her claim. Because the majority refuses to let her do so, I respectfully dissent.

Underwood v. Harkins, No. 11-13117 (11th Cir. Oct. 18, 2012) (Martin, J., dissenting).

Courts in Conflict Over Interpretation of “Arising Under” Arbitration Clauses

Last week the U.S. District Court for the District of Nevada noted the existence of “a dispute among the circuits regarding the interpretation of certain common arbitration provisions.” Operation: Heroes, Ltd. v. P & G Prods., Inc., Case No. 2:12-cv-00214-MMD-GWF (D. Nev. Oct. 11, 2012). Earlier this year a Hawaiian court summarized the conflict referenced in the Operation: Heroes, Ltd. opinion as follows: 

In cases construing agreements requiring arbitration for disputes "arising under" or "arising out of" the agreement or arising "hereunder," there is a split of authority among federal courts as to how such language should be interpreted. Some courts, primarily in the Ninth Circuit, construe that type of arbitration language as being narrow and restrict arbitration only to disputes relating to interpretation and performance of the contract. See Mediterranean Enters., Inc., 708 F.2d 1458; In re Kinoshita & Co., 287 F.2d 951 (2d Cir. 1961); Cape Flattery Ltd., 607 F. Supp. 2d at 1185-88. On the other side, some courts construe such language broadly. See Dialysis Access Ctr., LLC v. RMS Lifeline, Inc., 638 F.3d 367, 380-82 (1st Cir. 2011) (rejecting Kinoshita); Battaglia v. McKendry, 233 F.3d 720, 725-27 (3d Cir. 2000); Gregory v. Electro-Mechanical Corp., 83 F.3d 382, 385 (11th Cir. 1996).

 Cnty. of Haw. v. Unidev, LLC, Nos. CAAP-10-0000188 & CAAP-11-0000019 (Haw. Ct. App. Aug. 31, 2012).

Circuit Split Roundup

For the latest coverage of noteworthy issues dividing the federal courts, check out the following links:

• Joseph Celentino, Circuit Split Deepens on Sham Marriage Rulings, Courthouse News Services (Oct. 16, 2012 7:15 A.M. P.T.).

• Cynthia Augello, Circuit Split: How Does the CFAA Apply to Employment Cases?, jdsupra.com (Oct. 15, 2012).

• Rhonda Cook, Georgia gun group files Supreme Court appeal of ban on guns in ‘places of worship’, Atlanta Journal-Constituton (Oct. 16, 2012).

• Quinn Emanuel Urquhart & Sullivan, LLP, October 2012: International Arbitration Litigation Update (Oct. 16, 2012).

7th Circuit Weighs in on Conflict Over Jurisdictional Question Related to Competing Immigration Actions

Where an alien requests a declaratory decision about their entitlement to be naturalized, does the initiation of a removal proceedings by the U.S. Citizenship and Immigration Services deprive the district court of jurisdiction?

Writing for the Seventh Circuit last Friday in Trinidad Klene v. Janet Napolitano, Chief Judge Easterbrook described the four-way conflict that exists over the issue:

Courts of appeals that have considered the interaction between §1421(c) and §1429 have reached four different conclusions:

• One court of appeals has held that the judicial proceeding becomes moot as soon as the administrative proceeding begins, so the suit must be dismissed for lack of a case or controversy. Awe v. Napolitano, 2012 U.S. App. LEXIS 17469 (10th Cir. Aug. 20, 2012) (nonprecedential).

• Two courts of appeals have held that district courts lose subject-matter jurisdiction once the removal proceeding begins. Barnes v. Holder, 625 F.3d 801 (4th Cir. 2010); Saba-Bakare v. Chertoff, 507 F.3d 337 (5th Cir. 2007).

• Three courts of appeals have held that §1429 does not affect subject-matter jurisdiction but does prevent the courts from providing a remedy, so judgment must go for the agency on the merits. Ajlani v. Chertoff, 545 F.3d 229 (2d Cir. 2008); Zayed v. United States, 368 F.3d 902 (6th Cir. 2004); Bellajaro v. Schiltgen, 378 F.3d 1042 (9th Cir. 2004).

• One court of appeals has held that subject-matter jurisdiction continues and that a remedy is possible—a declaratory judgment of entitlement to citizenship. Gonzalez v. Secretary of Homeland Security, 678 F.3d 254 (3d Cir. 2012).

The Seventh Circuit ultimately concluded that the district judge mistakenly “thought that he had no discretion to exercise.” As such, the court remanded the case “with instructions to decide whether it is appropriate to resolve the dispute through a declaratory judgment and, if so, to decide the merits.”

[*Hat tip to Shannon Duffy of the American Law Institute.]

Circuit Split Roundup

For the latest coverage of noteworthy issues dividing the federal courts, check out the following links:

• Employee misuse of proprietary info: Circuits split over CFAA, HR.BLR.com (Oct. 9, 2012).

• Jeffrey Brown, En Banc Fifth Circuit continues circuit split with CP restitution, holds proximate cause not required for loss calculation, Cybercrime Review (Oct. 9, 2012).

• Keith Gibson, Supreme Court Considers Limitations to the Alien Tort Statute in Kiobel Re-Argument, Product Liability Monitor (Oct. 5, 2012).

• Amy Hocevar, Sixth Circuit Splits from Federal Circuit on Whether Severance Payments are Subject to FICA Payroll Taxes, Sixth Circuit Appellate Blog (Oct. 10, 2012).

Supreme Court to Clarify Whether a Federal Agency Can Determine Its Own Jurisdiction

Last Friday the Supreme Court granted certiorari in City of Arlington v. FCC to decide whether courts should apply Chevron in reviewing a federal agency's determination of its own jurisdiction. Earlier this week Lee Beck of the Federal Regulations Advisor Blog provided readers with an excellent overview of the case here.

In his post, Lee noted the existence of an apparent conflict over the question presented in City of Arlington:

The United States Court of Appeals for the Fifth Circuit concluded that it must defer to the FCC’s interpretation of its own authority and that the FCC’s time frames were based on a permissible construction of the Telecommunications Act amendments and entitled to Chevron deference.  In cases not related to the FCC, the Seventh Circuit and the Federal Circuit have taken the opposite position:  on questions of agency authority / jurisdiction, the court must decide the issue de novo and grant no deference to the agency view.

Why not defer to an agency's determination of its own jurisdiction? The post explains, "Unlike the programmatic provisions that an agency administers, and necessarily interprets, jurisdiction to regulate or adjudicate is organic in nature – it is not a delegated function but Congress’ circumscription of the delegation."

Who Bears the Burden of Proving a Defendant's Incompetency?

Who bears the burden of proving that a defendant is not competent to stand trial? Last week the U.S. District Court for the Northern District of Iowa noted that the answer to this question “has not been firmly established,” pointing to the following circuit split:

In United States v. Whittington, 586 F.3d 613 (8th Cir. 2009), the Court noted a circuit split on this issue. The Fourth and Tenth Circuits place the burden of proof on the defendant to prove incompetence, while the Third, Fifth, Seventh, and Ninth Circuits place the burden of proof on the Government to prove competence. Id. at 617. The Eleventh Circuit has taken the position that the burden falls on the party making the motion to determine competency, and the Second Circuit has declined to reach the issue, noting that "the allocation of the burden of proof to the defendant will affect competency determinations only in a narrow class of cases where the evidence is in equipoise." Id. at 618. While noting that "[t]he guidance of the Supreme Court, and the recent precedent of this circuit, support the government's position that the burden is on the defendant to prove incompetence by a preponderance of the evidence," the Court in Whittington concluded that it "need not address the burden of proof issue further because we conclude the district court's finding of competency in this case did not depend upon the allocation of the burden of proof." Id.

United States v. Contreras, Case No. CR11-0168 (N.D. Iowa Oct. 4, 2012).

Circuit Split Roundup

For the latest coverage of noteworthy issues dividing the federal courts, check out the following links:

• Michelle Olsen, Circuit Split Watch: Earning a Return on Seized Money, Appellate Daily (Oct. 4, 2012).

• Circuit Split on FICA Taxes: Is it Time to File Your Refund Claim?, Dykema (Oct. 2, 2012).

• The Sixth and Second Circuits Widen Circuit Split Concerning Pleading Standards for “Stock Drop” and Misrepresentation Claims Under ERISA, Sidley Austin LLP (Sept. 27, 2012).

• Joe Schuler, Circuit Split Over Graphic Label Requirement for Tobacco Products, Kentucky Journal of Equine, Agriculture, & Natural Resources Law (Oct. 2, 2012).

• Arbitration — Current State of the Circuit Split Concerning the Viability of Manifest Disregard as Ground for Vacatur, Josephnyc.com.

11th Circuit Dissent Notes Division Over Appropriate Degree of Deference to NLRB Supervisory Status Determinations

Under the National Labor Relations Act, individuals who qualify as “employees” have a right to unionize, while those who qualify as “supervisors” do not. Earlier this week in Lakeland Health Care Associates, LLC v. NLRB, the Eleventh Circuit concluded that the National Labor Relations Board should have found that certain nurses qualified as “supervisors” rather than “employees.” Nos. 11-12000 & 11-12638 (11th Cir. Oct. 2, 2012). Because the Board reached the opposite conclusion, the Eleventh Circuit vacated the Board’s decision.

The majority’s opinion notes that its conclusion is consistent with decisions issued by the Fourth and Sixth Circuits, but inconsistent with decisions from the First and Second Circuits:

In light of this uncontradicted testimony, the language of Lakeland's employee handbook, the [licensed practical nurses' (or "LPNs")] job description, and the level two coaching forms in the record, the record as a whole does not support by substantial evidence the Board's conclusion that the LPNs' role in the level two coaching process is "merely reportorial."⁸ 

8. We note that our conclusion is in accord with the Sixth Circuit's decision in Extendicare Health Servs., Inc v NLRB, 182 F. App'x 412 (6th Cir. 2006) and the Fourth Circuit's decision in Glenmark Assocs. v. NLRB, 147 F.3d 333 (4th Cir. 1998). But see NLRB v. Saint Mary Home, 358 F. App'x 255 (2d Cir. 2009); NLRB v . Hilliard Dev. Corp., 187 F.3d 133 (1st Cir. 1999). In Extendicare, the court noted:

The Board viewed the nurses' "writing up" of assistants' misconduct as a mere "reporting function" that "does not establish supervisory status." We do not think substantial evidence supports the Board's view. First, the record shows that Extendicare's floor nurses have discretionary authority to choose from among several remedial measures, only one of which involves completion of a disciplinary action report. The nurses decide independently whether a nursing assistant's misconduct is severe enough to warrant disciplinary proceedings. As we have held elsewhere, the use of independent judgment in writing up employees' infractions is a supervisory function.

Second, it is undisputed that a floor nurse's completion of a disciplinary action report initiates formal disciplinary proceedings against a nursing assistant. By making such a report, therefore, a nurse plays an effective part in the disciplinary process. The administrator or director of nursing makes the final decision as to whether, and how, an assistant will be disciplined, but the relevant consideration for purposes of § 152(11) is effective recommendation . . . rather than final authority. The Act does not preclude supervisory status simply because a recommendation is subject to a superior's investigation.

182 F. App'x. at 416-17 (internal quotations and citations omitted) (alternations in original omitted). While the determination of supervisory status must be made on a case-by-case basis, we find this reasoning persuasive.

Dissenting, Judge William Pryor, Jr. criticized the majority opinion for “improperly substitut[ing] its own views of the facts for those of the Board” and “fail[ing] to adhere to our deferential [substantial-evidence] standard of review.”

“Although ‘a split in the circuits has developed about the degree of deference that should be accorded to the [Board] on its determination that an employee is a ‘supervisor,’” Judge Pryor explained, “our Court has refused to make 'judicial adjustments to [the] statutory standard of review [because] we believe the wiser course is a robust application of the standard that has typified review of Board decisions.'”

In its 1999 opinion in Cooper/T. Smith, Inc. v. NLRB, the Eleventh Circuit summarized the conflicting authority over the degree to which courts should defer to a determination by the National Labor Relation Board that a particular employee is a “supervisor” within the scope of 29 U.S.C. § 152(11):

See Glenmark Assocs., Inc. v. NLRB, 147 F.3d 333, 338 (4th Cir. 1998) (observing that a thorough examination of the evidence "should be particularly true when the Board is determining supervisory status because of the inconsistency in the Board's application of the statutory definition and of the factors to be used in determining such application"); Spentonbush/Red Star Cos. v. NLRB, 106 F.3d 484, 492 (2d Cir. 1997) (finding the "Board's biased mishandling of cases involving supervisors increasingly has called into question our obeisance to the Board's decisions in this area"); Schnuck Markets, Inc. v. NLRB, 961 F.2d 700, 704 (8th Cir. 1992) ("Scrutiny is particularly appropriate in cases where the Board determines supervisory status."). But cf. Passavant Retirement & Health Ctr. v. NLRB, 149 F.3d 243, 246 (3d Cir.1998) (holding that "because of the Board's 'special competence' in the field of labor relations, its interpretation of the Act is accorded special deference" and noting that "whether a [bargaining] unit is appropriate involves a large measure of informed discretion vested in the Board and is rarely to be disturbed") (internal quotations and citations omitted); Providence Alaska Med. Ctr. v. NLRB, 121 F.3d 548, 551 (9th Cir.1997) ("Because the Board has expertise in making the subtle and complex distinctions between supervisors and employees, … the normal deference [we] give to the Board is particularly strong when it makes those determinations.") (internal quotations and citations omitted); Telemundo de Puerto Rico, Inc. v. NLRB, 113 F.3d 270, 274 (1st Cir. 1997) (same).

177 F.3d 1259, 1262 (11th Cir. 1999).

4 Reasons Why the Computer Fraud and Abuse Act is Ripe for Review

Yesterday the Texas Lawyer featured a piece written by Michael Maslanka, managing partner of the Dallas office of Constangy, Brooks & Smith and author of the blawg Work Matters, entitled "Circuits Split on Important CFAA Issue."

The article provides an excellent overview of the growing split in authority over the scope of the Computer Fraud and Abuse Act, an issue that Maslanka believes "[t]he U.S. Supreme Court eventually will resolve."

I agree.

Mr. Maslanka's article highlights four important reasons why this issue is "ripe for review" by the Supreme Court:

    1.    The CFAA's "unauthorized access" provision is "of interest to all employers."

    2.    "There is a well-developed body of authority on both views."

    3.    "[T]he CFAA imposes criminal liability, not just civil," meaning that employees may face criminal             sanctions without fair notice.

    4.    "U.S. attorneys across the country need to know whether to prosecute."

So how might the high court resolve this issue? Mr. Maslanka offers the following forecast: "Because of the criminal aspect, I predict a 9-0 vote siding with the reasoning of the 4th and 9th Circuits. If an employee may end up in the penitentiary, the legal prohibition must be clear, not open to differing interpretations."

I highly recommend reading the full article, which you can find here.

1st Circuit Addresses Applicability of "Manifest-Disregard" Doctrine to Arbitration Awards

As I noted back in June (here), a circuit split exists over whether, under the Federal Arbitration Act, courts may vacate arbitration awards where an arbitrator has manifestly disregarded the law (e.g., an award based on a coin flip rather than applicable case law). Last week Judge Michael Boudin, writing for the First Circuit in Bangor Gas Co., LLC v. H.Q. Energy Services U.S., noted that the courts of appeals are divided on this issue:

The manifest-disregard doctrine has been thrown into doubt by Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 128 S. Ct. 1396, 170 L. Ed. 2d 254 (2008), where the Supreme Court "h[e]ld that [9 U.S.C. § 10] . . . provide[s] the FAA's exclusive grounds for expedited vacatur." Id. at 584 (emphasis added). This has caused a circuit split,³ with this court saying (albeit in dicta) that "manifest disregard of the law is not a valid ground for vacating or modifying an arbitral award in cases brought under the Federal Arbitration Act," Ramos-Santiago v. United Parcel Serv., 524 F.3d 120, 124 n.3 (1st Cir. 2008).

3. Compare Wachovia Sec., LLC v. Brand, 671 F.3d 472, 480 (4th Cir. 2012) (recognizing continuing validity of manifest disregard doctrine), Johnson v. Wells Fargo Home Mortgage, Inc., 635 F.3d 401, 415 n.11 (9th Cir. 2011) (same), Stolt-Nielsen SA v. Animal Feeds Int'l Corp., 548 F.3d 85, 94 (2d Cir. 2008), rev'd on other grounds, 130 S. Ct. 1758, 176 L. Ed. 2d 605 (2010) (same), and Coffee Beanery, Ltd. v. WW, L.L.C., 300 Fed. App'x 415, 418 (6th Cir. 2008) (unpublished opinion) (same), with Frazier v. CitiFinancial Corp., 604 F.3d 1313, 1324 (11th Cir. 2010) (rejecting manifest disregard doctrine as invalid), Citigroup Global Mkts., Inc. v. Bacon, 562 F.3d 349, 350 (5th Cir. 2009) (same), and Crawford Grp., Inc. v. Holekamp, 543 F.3d 971, 976 (8th Cir. 2008) (same).

No. 12-1386 (1st Cir. Sept. 26, 2012). As such, the court concluded, "[e]ven if the manifest-disregard doctrine were assumed to survive and were applied in this case, the award neither conflicts with the plain language of the Agreement nor did the arbitrators recognize the applicable law but ignore it."

[*Image courtesy of awrose on flickr.]