Circuit Splits

From Dicta to Disarray: Split on the Domestic Relations Exception

Today I’m delighted to introduce Ben Ashmore, the founder and president of the National Family Civil Rights Center, as this week’s guest blogger.

In In re Burrus, the Supreme Court stated in dicta that “[t]he whole subject of domestic relations of husband and wife, parent and child, belongs to the laws of the states and not to the United States.” 136 U.S. 586, 593 (1890). This dicta is now firmly entrenched in federal jurisprudence thanks to Ankenbrandt v. Richards, a case in which the Court established the domestic relations exception (DRE). 504 U.S. 689 (1992). In Ankenbrandt however, even though the DRE applied to litigants seeking domestic relations decrees in federal court through diversity actions, the Court foresaw a potential conflict between federal questions and diversity jurisdiction, noting that “whether the interest of States remains a sufficient justification today . . . is uncertain in view of the expansion in recent years of federal law in the domestic relations area.” Id. at 715 (Blackmun, J., concurring).

While the DRE unquestionably remains a bar to jurisdiction in diversity suits, the Supreme Court and lower courts have redefined traditional notions of marriage, procreation, contraception, family relationships, and parental choices concerning children, finding such choices are central to the liberty protected by the Fourteenth Amendment, which frequently serves as a check on state prerogatives that deny liberty.[1]  As a consequence, many litigants have brought federal question suits to challenge the constitutionality of state domestic relations laws and procedures. 

On this subject, the Fourth, Fifth, Sixth, Ninth, and Tenth Circuits have held that the DRE presents no bar to subject matter jurisdiction on federal questions.[2] Notwithstanding the uniformity among these circuits or the fact that the Supreme Court has never squarely addressed the issue, a number of courts have noted that the DRE "remains in disarray" in that some courts still use the DRE in federal-question cases.[3]

Until Ashmore v. New York (pending on the Supreme Court docket: No. 12-1181), the conflict over the DRE existed only at the district level within the Second Circuit: “[s]ome district courts in the Second Circuit have applied the domestic relations exception in federal question cases, but other Circuits have held that the exception is limited to diversity suits.” Johnson v. Rodrigues, 226 F.3d 1103, 1111 n.4 (10th Cir. 2000). 

Ashmore asks the Court to resolve this split and raises two questions: (1) whether parties may bring challenges to the constitutionality of state domestic relation laws and procedures pursuant to 28 U.S.C. § 1331 if no relief in the form of appellate review of a state-court judgment is sought; and, (2) whether expert opinion based upon the hearsay statements of third parties is inadmissible if the third-party statements are not held as testimonial evidence subject to confrontation at trial.  

On the first question, in identical cases, the Sixth and Tenth circuits issued lengthy and reasoned opinions that directly conflict with the Second Circuit’s summary order in Ashmore, holding that that it is appropriate for the “[district] court to examine whether certain judicial proceedings, which happened to involve a divorce, comported with the federal constitutional guarantee of due process.” Catz v. Chalker, 142 F.3d 279, 292 (6th Cir. 1998). As to the second question, there is a deep split in authority among state and federal courts, which a number of media outlets have characterized as the most pressing and controversial issue in custody litigation today.[4] It is also worth noting that the Supreme Court is currently considering a cert. petition in a case raising related issues (Allshouse v. Pennsylvania), which resulted in a GVR back in 2011.

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[1]     See e.g. Lawrence v. Texas, 539 U.S. 558, 578-79 (2003); Planned Parenthood of Se. Pa. v Casey, 505 U.S. 833, 851 (1992); Palmore v. Sidoti, 466 U.S. 429, 430 (1984); Zablocki v. Redhail, 434 U.S. 374, 376 (1978); Carey v. Population Servs. Int'l, 431 U.S. 678, 681-82 (1977); Roe v. Wade, 410 U.S. 113, 116, 120 (1973); Eisenstadt v. Baird, 405 U.S. 438, 440 (1972); Boddie v. Connecticut, 401 U.S. 371, 372 (1971); Loving v. Virginia, 388 U.S. 1, 3-4 (1966); Griswold v. Connecticut, 381 U.S. 479, 485-86 (1965); and, Pierce v. Society of Sisters, 268 U.S. 510, 510 (1925).

[2]     See e.g. Atwood v. Fort Peck Tribal Ct. Assiniboine, 513 F.3d 943, 947 (9th Cir. 2008) (“[w]e therefore join the Fourth and Fifth Circuits in holding that the domestic relations exception applies only to the diversity jurisdiction statute”); Johnson v. Rodrigues, 226 F.3d 1103, 1111-12 (10th Cir. 2000) (rejecting domestic relations exception because federal court could reach federal question and remand custody issue back to state court for determination); Catz v. Chalker, 142 F.3d 279, 293 (6th Cir. 1998) (overruling dismissal of due process claims because it did not implicate merits of divorce decree); United States v. Bailey, 115 F.3d 1222, 1231 (5th Cir. 1997) (“[b]ecause this case clearly arises under this Court's federal question jurisdiction, the domestic relations exception presents no bar”); and, United States v. Johnson, 114 F.3d 476, 481 (4th Cir. 1997) (“[t]he 'jurisdictional exception,' in the first place, is applied only as a judicially implied limitation on the diversity jurisdiction; it has no generally recognized application as a limitation on federal question jurisdiction”).

[3]     See e.g. Harbach, Meridith Johnson, Is the Family a Federal Question, 66 Wash. & Lee L. Rev. 131 (2009).

[4]           See e.g. Ben Cheng, Petition of the day, SCOTUSblog (Aug. 27, 2012, 11:22 PM), http://www.scotus blog.com/2012/08/petition-of-the-day-323/; Eaton, Leslie. "For Arbiters in Custody Battles, Wide Power and Little Scrutiny" New York Times (May 23, 2004), http://www.nytimes.com/2004 /05/23/nyregion/for-arbiters -in-custody-battles-wide-power-and-little-scrutiny.html?page wanted=all&src=pm; Hoult, Jennifer. “The Evidentiary Admissibility of Parental Alienation Syndrome: Science, Law and Policy” ABA Children’s Legal Right’s Journal, Vol. 26, No. 1, Spring 2006, (December 12, 2012)  http://ww.w.leadershipcouncil.org/docs/ Hoult.pdf; Childress, Sarah. "Fighting Over the Kids" Newsweek, (September 24, 2006) http://www.thedailybeast. com /newsweek/ 2006/09/24/fighting-over-the-kids.html>.

Growing Circuit Split Over Removal Statutes

In the recent decision in Smith v. Detroit Entertainment, LLC, Slip Copy, 2013 WL 119673 (E.D.Mich. Jan. 9, 2013), the federal court in the Eastern District of Michigan highlighted a growing circuit split over removal statutes - and contributed to the split by leading the Sixth Circuit into the fray.  At issue in this action by an employee for unpaid wages was whether the removal statute, 28 U.S.C. § 1441, would permit the employer to to remove a case to federal court from a state administrative agency, as opposed to a state court. This was a question of first impression in the Sixth Circuit.

As the court notes, however, several circuits have already split over this question.  The First and Seventh Circuits have adopted a "functional" test, looking at "1) the functions, powers, and procedures of the state tribunal and ... 2) the respective state and federal interests in the subject matter and in the provision of a forum.” See Floeter v. C.W. Transport, Inc., 597 F.2d 1100, 1101-02 (7th Cir.1979). "A federal court should assume jurisdiction only if the agency functions as a court and federal interests predominate over state interests." Id. (The Floeter court allowed removal because the state administrative proceedings were "essentially judicial").  

In contrast, the Ninth and Tenth Circuits have rejected the functional approach and have adopted a literal approach to the statute instead, which the court in this case (the Eastern District of Michigan) follows as well, arguing that that this approach is more faithful to the text of the federal removal statute.  The court thus remanded the case to the Michigan Administrative Hearing System.

A problem with the literal approach, which the court acknowledged, is that it allows plaintiffs to pre-empt, perhaps for the strategic purposes, a federal claim by filing in a state administrative office first - the federal case will not proceed until the administrative proceedings are complete.  The court in Detroit Entertainment suggested that Congress should resolve this problem rather than the courts.

 

Circuit Splits Roundup

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

• Robert A. Horowitz, Supreme Court again set to resolve a circuit split over the enforceability of mandatory class arbitration waivers, lexology.com (Dec. 6, 2012).

• Michelle Olsen, Circuit Split Watch: Press Access Not a Slam Dunk, Appellate Daily (Dec. 5, 2012).

• Meghan Milloy, 5th Circuit Splits with Other Federal Courts on CAFA and Attorney General Suits, The Legal Pulse (Dec. 10, 2012).

Federal Circuit Declines Chance to Eliminate Split Involving Standard of Review, Prompting Blistering Dissent

Last month I wrote about an intercircuit conflict over the appropriate standard of review for reviewing hearsay rulings (here). A similar circuit split exists over the appropriate standard of review for reviewing a district court’s decision to award enhanced damages and attorneys’ fees.

Unlike its sister circuits, the Federal Circuit reviews such decisions de novo. See Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003, 1005 (Fed. Cir. 2012). Last week the Federal Circuit denied rehearing en banc in Highmark, Inc. v. Allcare Health Management System, reaffirming its position in the circuit split. No. 2011-1219 (Fed. Cir. Dec. 6, 2012).

Judge Kimberly Ann Moore—with whom Chief Judge O’Malley and Judges Rader, Reyna, and Wallach joined—dissented to the circuit’s refusal to reconsider the issue en banc. The dissent’s opening paragraph packs quite a punch: 

Contrary to our precedent, the divided Highmark panel decided that a district court's exceptional case finding—based on its determination that the infringement claims asserted at trial were objectively baseless—is entitled to no deference and should be reviewed de novo. Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc., 687 F.3d 1300, 1309-10 (Fed. Cir. 2012). Because Highmark deviates from precedent, invades the province of the fact finder, and establishes a review standard for exceptional case findings in patent cases that is squarely at odds with the highly deferential review adopted by every regional circuit and the Supreme Court in other areas of law, I dissent from the denial of rehearing en banc.

“Not surprisingly,” Judge Moore explained, “given the clear direction from the Supreme Court, the regional circuits are unanimous that the issue of objective reasonableness under Rule 11 is to be reviewed deferentially by the appellate courts.⁴” 

⁴ See, e.g., Whitehead v. Food Max of Miss., Inc., 332 F.3d 796, 802-03 (5th Cir. 2003) (determining compliance with Rule 11 is "an objective, not subjective, standard of reasonableness under the circumstances" and concluding that the "district court is better situated than the court of appeals to marshal the pertinent facts and apply the fact-dependent legal standard mandated by Rule 11" (citation omitted)); see also CQ Int'l Co., Inc. v. Rochem Int'l, Inc., USA, 659 F.3d 53, 62-63 (1st Cir. 2011); Star Mark Mgmt., Inc. v. Koon Chun Hing Kee Soy & Sauce Factory, LTD., 682 F.3d 170, 177-78 (2d Cir. 2012); In re Taylor, 655 F.3d 274, 282-83 (3d Cir. 2011); Merritt v. Int'l Ass'n of Machinists & Aerospace Workers, 613 F.3d 609, 626-27 (6th Cir. 2010); Ross v. City of Waukegan, 5 F.3d 1084, 1088-89 (7th Cir. 1993); Clark v. United Parcel Serv., 460 F.3d 1004, 1010-11 (8th Cir. 2006); G.C. & K.B. Invs., Inc. v. Wilson, 326 F.3d 1096, 1109 (9th Cir. 2003); Dodd Ins. Servs., Inc. v. Royal Ins. Co. of Am., 935 F.2d 1152, 1155 (10th Cir. 1991); Kaplan v. DaimlerChrysler, A.G., 331 F.3d 1251, 1255 (11th Cir. 2003).

Judge Timothy Dyk, with whom Judge Pauline Newman joined, responded to the criticisms expressed by their dissenting colleagues in a concurring opinion:

Judge Moore, Judge Reyna, and Judge Mayer in his panel dissent, urge that both this decision and Bard are inconsistent with our prior authority. This is incorrect. More fundamentally, they assert that the de novo standard is inconsistent with the Supreme Court's decisions in Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 110 S. Ct. 2447, 110 L. Ed. 2d 359 (1990), and Pierce v. Underwood, 487 U.S. 552, 108 S. Ct. 2541, 101 L. Ed. 2d 490 (1988), which dealt with the standard of review for awards of attorneys' fees under Rule 11 and the Equal Access to Justice Act ("EAJA"). But those cases arose in quite different contexts, and are no basis for reading sections 284 and 285 as requiring deference to district courts on the objective reasonableness issue.

The Supreme Court has a history of reversing Federal Circuit decisions, so keep this one on your radar.

New Article Highlights Immunity Grants to Defense Witnesses

Yesterday I came across an interesting student note in the Texas Law Review entitled "Resolving the Circuit Split on Defense Witness Immunity: How the Prosecutorial Misconduct Test Has Failed Defendants and What the Supreme Court Should Do About It."

The author, Nathaniel Lipanovich, argues that the majority of circuits have adopted a standard for granting immunity to defense witnesses that fails to adequately protect the accused. The article offers the following data as evidence "that the 'prosecutorial misconduct' standard used in ten of the twelve circuits fails to provide adequate protection for the accused":

Circuit Split Roundup

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

• A. Benjamin Spencer, First Circuit Weighs In on Circuit Split re Jurisdiction over Defense Base Act Claims, Split Circuits (Nov. 27, 2012).

• Alison Frankel, Circuit split! 5th Circuit says AG suits are mass actions under CAFA, Thomson Reuters News & Insight (Nov. 26, 2012).

• Rudolph J. Di Massa Jr. & Aaron J. Margolis, Supreme Court to Address Circuit Split Over 'Defalcation' Meaning, jdsupra.com (Nov. 26, 2012).

• Adam S. Lurie, Brian T. McGovern, & Bret A. Campbell, First Circuit Set to Weigh in on Significant Circuit Split Involving False Claims Act First to File Rule, Cadwalader Clients & Friends Memo (Nov. 22, 2012).

1st Circuit Joins Deep Split Over Initial Judicial Review of Defense Base Act Awards

Last week in Truczinskas v. Director, Office of Workers’ Compensation Programs, the First Circuit pointed out that “the circuit courts are now almost evenly split on whether initial judicial review of [Defense Base Act] awards should be in the district or the circuit court.”

 The court summarized the split as follows:

Four circuits endorse review by the district court, ITT BaseServs. v. Hickson, 155 F.3d 1272, 1275 (11th Cir. 1998); Lee v. Boeing Co., 123 F.3d 801, 805 (4th Cir. 1997); AIFA/CIGNAWorldwide, 930 F.2d at 1116; Home Indem. Co. v. Stillwell, 597 F.2d 87, 89 (6th Cir.), cert. denied, 444 U.S. 869, 100 S. Ct. 145, 62 L. Ed. 2d 94 (1979), and three by the court of appeals, Serv. Emps. Int'l, Inc. v. Dir., Office of Workers' Comp. Programs, 595 F.3d 447, 452-55 (2d Cir. 2010); Pearce v. Dir., Office of Workers' Comp. Programs (Pearce II), 647 F.2d 716, 720 (7th Cir. 1981); Pearce v. Dir., Office of Workers' Comp. Programs (Pearce I), 603 F.2d 763, 766-71 (9th Cir. 1979).

The First Circuit, like the Supreme Court, has remained noncommittal on the issue:

This circuit, e.g., Air America, Inc. v. Director, Office of Workers' Compensation Programs, 597 F.2d 773, 775 (1st Cir. 1979), and the Supreme Court, Director, Office of Workers' Compensation Programs v. Rasmussen, 440 U.S. 29, 35, 99 S. Ct. 903, 59 L. Ed. 2d 122 (1979), have both assumed jurisdiction over appeals of DBA compensation awards after 1972 that never passed through the district court. But in neither these or other like instances did either court pass from assumption to express consideration of jurisdiction, so strictly speaking we are not bound to find jurisdiction in this case. Ariz. Christian Sch. Tuition Org. v. Winn, 131 S. Ct. 1436, 1448, 179 L. Ed. 2d 523 (2011).

Until now...

Nevertheless, the Defense Base Act can be legitimately read to confer such jurisdiction upon us, and this reading accords with the overall congressional policy reflected in the 1972 Longshore Act amendments. Congress likely gave no thought at all to the wrinkle that concerns us; but, where statutory language permits a given reading and Congress' policy will be fostered by it,⁵ we think that reading should prevail--even if, as here, that statutory language would also permit a contrary reading at odds with Congress' statutory policy.

You can read the full opinion here: Truczinskas v. Director, Office of Workers’ Compensation Programs, No. 11-2503 (1st Cir. Nov. 20, 2012).

Courts Divided Over Standard of Review for Hearsay Rulings

Last Friday the Ninth Circuit issued the latest in a long line of opinions calling attention to a circuit split over the appropriate standard of review for hearsay rulings. See Wagner v. Cnty. of Maricopa, No. 10-15501 (9th Cir. Nov. 16, 2012). Several appellate panels have considered whether a statement was hearsay de novo, while panels within other circuits have reviewed such decisions for an abuse of discretion. It is also worth noting that both the Sixth Circuit and the Ninth Circuit have issued conflicting decisions on the question.

A.    De Novo Review

• United States. v. Ferguson, 653 F.3d 61, 86 (2d Cir. 2011);

• Biegas v. Quickway Carriers, Inc., 573 F.3d 365, 378-381 (6th Cir. 2009); but see Trepel v. Roadway Exp., Inc., 194 F.3d 708, 716-17 (6th Cir. 1999) ("Therefore, in disregard of our heretofore well-settled precedent that hearsay evidentiary rulings are reviewed de novo, we shall review the district court's ruling for an abuse of discretion." (citation omitted)).

B.    Review for Abuse of Discretion

• Wagner v. Cnty. of Maricopa, No. 10-15501 (9th Cir. Nov. 16, 2012); but see Mahone v. Lehman, 347 F.3d 1170, 1173-74 (9th Cir. 2003) ("We review the district court's construction of the hearsay rule de novo . . . ." (quoting Orr v. Bank of Am., NT & SA, 285 F.3d 764, 778 (9th Cir. 2002)));

• United States v. Brown, 669 F.3d 10, 22 (1st Cir. 2012);

• United States v. Lopez-Garcia, No. 98-2252 (10th Cir. Aug. 18, 1999).

According to the Sixth Circuit, the Supreme Court has already settled the matter “in categorical terms: ‘[A]buse of discretion is the proper standard of review of a district court’s evidentiary rulings.’” United States v. Clay, 667 F.3d 689, 703 (6th Cir. 2012) (quoting Gen. Elec. Co. v. Joiner, 522 U.S. 136, 141 (1997)).

Circuit Split Roundup

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

• Krista Cox, Pay-for-Delay Circuit Split Continues; 31 States File Amicus Brief Arguing Pay-For-Delay is Presumptively Unlawful, Knowledge Ecology International (Nov. 14, 2010).

• Bruce Khula, En Banc Court Declares Michigan’s Proposal 2 Unconstitutional, Sixth Circuit Appellate Blog (Nov. 16, 2012).

• Shaun Terrill, Circuits/IRS Split When It Comes to FICA Taxation of Severance Pay, BNA Bloomberg Federal Tax Blog (Nov. 13, 2012).

• Sixth Circuit Rules that 2009 False Claims Act Amendments Apply Retroactively, Greene LLP (Nov. 14, 2012).

6th Circuit Declares State Ban on Affirmative Action Unconstitutional, Splitting from 9th Circuit

Yesterday the Sixth Circuit sitting en banc declared the State of Michigan’s ban on affirmative action in university admissions unconstitutional. See Coalition to Defend Affirmative Action v. Regents of the University of Michigan, Nos. 08-1387/1389/1534 & 09-1111 (6th Cir. Nov. 15, 2012).

In 2006, the people of Michigan voted to adopt “Proposal 2,” an amendment to their state constitution stating that the University of Michigan and other public universities across the state “shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of . . . public education . . . .” Mich. Const. art. I, § 26.

The 8-7 majority held that Proposal 2 violated the Equal Protection Clause’s guarantee that “[n]o state shall . . . deny to any person . . . the equal protection of the laws” because it affected an admissions practice (i.e., the consideration of an applicant's race) that primarily benefitted minority applicants and stripped minority applicants of the ability to lobby university policymakers to adopt admissions practices that give them preference over nonminority applicants because of their race.

Dissenting, Judge Richard Allen Griffin criticized the majority for, among other things, creating a split in authority with the Ninth Circuit:

In a footnote, the majority superficially acknowledges, but does not discuss, the circuit split it creates in declining to follow the Ninth Circuit decisions upholding the constitutionality of analogous Proposition 209. See Wilson and Coal. to Defend Affirmative Action v. Brown, 674 F.3d 1128 (9th Cir. 2012). I would adopt the persuasive reasoning of Wilson and hold that, in amending their state constitution to prohibit racial discrimination and “preferential treatment,” the citizens of Michigan did not violate the Equal Protection Clause of the Fourteenth Amendment, but rather enshrined its principles into the Michigan Constitution. Like Proposition 209, Michigan’s proscription of racial preference, “as a matter of law and logic, does not violate the Equal Protection Clause in any conventional sense.” Wilson, 122 F.3d at 702.

“Under today’s en banc decision,” the dissent concludes, “not all persons are entitled to the equal protection of the laws.”

Michigan’s attorney general released a statement yesterday in which he vowed to appeal the Sixth Circuit’s decision to the Supreme Court. This case will undoubtedly find itself before the Supreme Court for several reasons.

First, by agreeing to review Fisher v. University of Texas this term, the Roberts Court has expressed a renewed interest in scrutinizing race-conscious admissions practices. “The way to stop discrimination on the basis of race,” the Chief Justice wrote in 2007’s Parents Involved in Community Schools v. Seattle School District No. 1, “is to stop discriminating on the basis of race.”

Second, while disagreement over the legality of statewide bans on affirmative action is presently limited to two circuits, the American public is deeply divided over the issue. The Sixth Circuit was similarly divided over the question in Coalition to Defend Affirmative Action, delivering an 8-7 decision declaring Michigan's affirmative action ban unconstutitional.

Finally, this case is ripe for review because it involves a seemingly innocuous amendment to a state constitution that was struck down as unconstitutional by a federal court.

Stay tuned.

Cert. Petition Challenges Lopsided Split Involving the Scope of “Newly Discovered Evidence” in Criminal Cases

This summer the Fourth Circuit joined a majority of its sister circuits in holding that a convicted co-defendant’s exculpatory testimony given after their invocation of the Fifth Amendment does not constitute “newly discovered evidence” under Federal Rule of Criminal Procedure 33. Griffin v. United States, No. 11-7466 (4th Cir. July 24, 2012) (per curiam) (unpublished).

Other circuits have reached the same conclusion. See, e.g., United States v. Owen, 500 F.3d 83, 89 (2d Cir. 2007); United States v. Jasin, 280 F.3d 355, 367-68 (3d Cir. 2002); United States v. Freeman, 77 F.3d 812, 817 (5th Cir. 1996); United States v. Theodosopoulos, 48 F.3d 1438, 1448-49 (7th Cir. 1995); United States v. Glover, 21 F.3d 133, 138 (6th Cir. 1994); United States v. Muldrow, 19 F.3d 1332, 1339 (10th Cir. 1994); United States v. Reyes-Alvarado, 963 F.2d 1184, 1188 (9th Cir. 1992); United States v. DiBernardo, 880 F.2d 1216, 1224-25 (11th Cir. 1989).

Last month the petitioner in Griffin filed a cert. petition with the Supreme Court challenging the Fourth Circuit’s interpretation of Rule 33, which acknowledged that

[i]t is rare to find a circuit split as fully developed, or as lopsided, as this case presents. Ten circuits have adopted the Government’s interpretation of Rule 33(b)(1).¹ Only the First Circuit applies Griffin’s interpretation.²

¹ United States v. Taylor, 600 F.3d 863, 869 (7th Cir. 2010); United States v. Owen, 500 F.3d 83, 88 (2d Cir. 2007); United States v. Jasin, 280 F.3d 355, 365 (3d Cir. 2002); United States v. Glover, 21 F.3d 133, 138 (6th Cir. 1994); United States v. Muldrow, 19 F.3d 1332, 1339 (10th Cir. 1994); United States v. Dale, 991 F.[2]d 819, 839 (D.C. Cir. 1993); United States v. Rogers, 982 F.2d 1241, 1245 (8th Cir. 1993); United States v. Reyes-Alvarado, 963 F.2d 1184, 1188 (9th Cir. 1992); United States v. DiBernardo, 880 F.2d 1216, 1224–25 (11th Cir. 1989); United States v. Metz, 652 F.2d 478, 480 (5th Cir. 1981).

² United States v. Montilla-Rivera, 115 F.3d 1060, 1066 (1st Cir. 1997). 

Notwithstanding the fact that this split is lopsided in favor of the Fourth Circuit’s interpretation of the Rule, the petitioner contends that “[t]he First Circuit’s skeptical approach preserves a district court’s discretion while better comporting with the text of Rule 33(b)(1).”

You can read the Fourth Circuit’s opinion here: Griffin v. United States, No. 11-7466 (4th Cir. July 24, 2012) (per curiam) (unpublished);  and the petition for certiorari here: Griffin Petition for Certiorari, Griffin v. United States, No. 12-485 (U.S. Oct. 16, 2012).

 [*Hat tip: Steven Klepper of Kramon & Graham, PA, who represents the petitioner in Griffin.]

Circuit Split Roundup

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

• Alison Frankel, Is a claim the same as a case? 6th Circuit says yes in FCA suit, Thomson Reuters News & Insights (Nov. 5, 2012).

• Robert B. Milligan, Employer Petitions U.S. Supreme Court to Resolve Computer Fraud and Abuse Act Circuit Split, Trading Secrets (Nov. 2, 2012).

• Robyn Hagan Cain, Are Graphic Warning Labels Heading for En Banc Review?, FindLaw D.C. Circuit Blog (Nov. 1, 2012 3:02 PM).

• Andy Liu & Jonathan Crone, Widening a Split, Sixth Circuit Says FCA Amendments Apply to Pending Cases, Not Claims, Crowell Moring (Nov. 6, 2012).

• Benjamin M. Riskin, Twenty-Six Years Later, a Lubrizol Split by the Seventh Circuit, jdsupra.com (Nov. 2, 2012).

• Brian Clark, Circuit Splits and Copyright Courts, Music Manumit Law-cast (Nov. 3, 2012).

• Scott M. Flaherty, Internet Prior Art; Related Circuit Split, intellectualIP.com (Nov. 6, 2012).

• H. Jacob Lager, IRS slooooowwwlllly acknowledging electronic docs; Supreme Court takes on windfall tax circuit split, Tax Sans Frontieres (Nov. 2, 2012 9:05 AM).

Courts Divided Over RICO Ripeness Question

Last Friday the Sixth Circuit reversed a federal court in Michigan in holding that a plaintiff’s civil RICO claim accrues at the time an employer fraudulently denies worker’s compensation benefits. Jackson v. Segwick Claims Mgmt. Servs., No. 10-1453 (6th Cir. 2012). Writing for the panel, Judge Karen Moore quickly pointed out, however, that a split in authority exists over this issue:

We acknowledge that one of our sister circuits currently disagrees with this approach. The Second Circuit has adopted a rule that RICO claims are not ripe "until the amount of damages becomes clear and definite." First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763, 768 (2d Cir. 1994), cert. denied, 513 U.S. 1079, 115 S. Ct. 728, 130 L. Ed. 2d 632 (1995). But to the extent that this rule has been followed by other circuits, the focus has been on the speculative nature of the damages themselves and not their amount. See Evans v. City of Chicago, 434 F.3d 916, 932 (7th Cir. 2006) (adopting standard but focusing on indirect nature of injuries rather than their amount); Maio v. Aetna, Inc., 221 F.3d 472, 495 (3d Cir. 2000) (holding no RICO cause of action because factual predicate necessary for damages to be incurred at all too speculative); DeMauro v. DeMauro, 115 F.3d 94, 97-98 (1st Cir. 1997) (adopting "clear and definite" standard but focusing on existence of damages in the first place).

Other circuits have simply declined to adopt this rule as overly rigid. Potomac Elec. Power Co. v. Elec. Motor & Supply, Inc., 262 F.3d 260, 265 (4th Cir. 2001) ("The best reading of § 1964(c)'s injury to business or property requirement is that it refers to the fact of injury and not the amount."), cert. denied, 535 U.S. 927, 122 S. Ct. 1297, 152 L. Ed. 2d 209 (2002); Grimmett v. Brown, 75 F.3d 506, 516-17 (9th Cir. 1996) (holding "error to equate" a situation where "the injury is speculative because it is not known whether it will occur at all" to a situation where "the injury has occurred and is known, but it is speculative whether the damages might be reduced or even eliminated by alternative recovery efforts"), cert. dismissed, 519 U.S. 233, 117 S. Ct. 759, 136 L. Ed. 2d 674 (1997); see also Liquidation Comm'n of Banco Intercontinental, S.A. v. Renta, 530 F.3d 1339, 1350-51 (11th Cir. 2008) (noting that even Second Circuit rule does not make a RICO injury unripe based solely on the "mere possibility" of recovery in a state proceeding); Paul A. Batista, Civil Rico Practice Manual § 4.22[D] (3d ed. 2008) ("[Gelt is] a case to which the Second Circuit rigidly adheres and which most other circuits tend to ignore or downplay."). 

As the Ninth Circuit noted, the Second Circuit's "clear and definite" amount rule was taken from an earlier Second Circuit case that held that a plaintiff's claims were not ripe if the plaintiff might recover damages from a pending bankruptcy proceeding. Grimmett, 75 F.3d at 516 (citing Bankers Trust Co. v. Rhoades, 859 F.2d 1096, 1105 (2d Cir. 1988)). Like the Ninth Circuit, we also have similar precedent directly contradicting that rule. In Isaak v. Trumbull Savings & Loan Co., 169 F.3d 390 (6th Cir. 1999), we held that the plaintiffs' RICO claim accrued for statute of limitations purposes at the time the scheme was completed, because that was when the injuries became "ascertainable and definable." Id. at 396-97. Citing Grimmett, we held that "[t]he possibility that Plaintiffs might have been able to recover some of the damages during the course of the bankruptcy proceedings does not negate the existence of injury at the time of the bankruptcy filing." Id. at 397. We are not at liberty to depart from this precedent here today.

Notwithstanding the disagreement among the circuits, the Jackson panel  ultimately concluded,

The plaintiffs' injuries were definite and ascertainable at the time of the allegedly fraudulent denial of their benefits. Any speculative future recovery in state proceedings may affect the amount of damages the plaintiffs can receive, but has no bearing on the accrual of a cause of action under RICO. The plaintiffs' claims are ripe.

You can read the full opinion here: Jackson v. Segwick Claims Mgmt. Servs., No. 10-1453 (6th Cir. 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).

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.

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).

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.]

Federal Circuit Notes Split Over Standard of Review

Last Friday the Federal Circuit identified a circuit split over the appropriate “standard to be applied when reviewing a trial court's denial of a motion to intervene as of right.” Although the court “f[ound] it unnecessary to reach this question,” it nevertheless provided an overview of the positions taken by its sister circuits:

Both sides cite authority from the regional circuits, which are split on the question, though slightly more courts favor de novo review. Compare, e.g., United States v. Aerojet Gen. Corp., 606 F.3d 1142, 1148 (9th Cir. 2010) (applying de novo review), United States v. Albert Inv. Co., 585 F.3d 1386, 1390 (10th Cir. 2009) (same), S. Dakota v. Ubbelohde, 330 F.3d 1014, 1024 (8th Cir. 2003) (same), Grutter v. Bollinger, 188 F.3d 394, 398 (6th Cir. 1999) (same), Sierra Club v. Espy, 18 F.3d 1202, 1205 (5th Cir. 1994) (same), and Nissei Sangyo Am., Ltd. v. United States, 31 F.3d 435, 438 (7th Cir. 1994) (same), with Geiger v. Foley Hoag LLP Ret. Plan, 521 F.3d 60, 64 (1st Cir. 2008) (applying abuse of discretion review), Person v. N.Y. State Bd. of Elections, 467 F.3d 141, 144 (2d Cir. 2006) (same), Brody v. Spang, 957 F.2d 1108, 1115 (3d Cir. 1992) (same), and In re Sierra Club, 945 F.2d 776, 779 (4th Cir. 1991) (same).

Wolfsen Land & Cattle Co. v. Pac. Coast Fedn. of Fishermen's Ass'ns, No. 2011-5113, 2012 U.S. App. LEXIS 19930, at *5–6 (Fed. Cir. Sept. 21, 2012).

Did the Civil Rights Act of 1991 Create a New Private Cause of Action?

On Monday the Sixth Circuit issued its opinion in McCormick v. University of Miami. Writing for the court, Judge Damon Keith identified the following circuit split over whether the Civil Rights Act of 1991 created a new private cause of action against state actors:

After the Jett decision, Congress amended § 1981 by passing the Civil Rights Act of 1991. In relevant part, the 1991 Act added subsection c, which provides:

(c) Protection against impairment

The rights protected by this section are protected against impairment by nongovernmental discrimination and impairment under color of State law.

42 U.S.C. § 1981(c). Since the amendment to § 1981, circuit courts have split as to whether the 1991 amendment created a new private cause of action, thereby overruling Jett. The Sixth Circuit has continued to hold that Jett remains binding authority and that "the express cause of action for damages created by § 1983 constitutes the exclusive federal remedy for violation of the rights guaranteed in § 1981 by state governmental units." Arendale v. City of Memphis, 519 F.3d 587, 598-99 (6th Cir. 2008) (quoting Jett, 491 U.S. at 733). Our decision in Arendale is consistent with authorities in the Third Circuit, see McGovern v. City of Philadelphia, 554 F.3d 114, 117-18 (3d Cir. 2009); the Tenth Circuit, see Bolden v. City of Topeka, 441 F.3d 1129, 1137 (10th Cir. 2006); the Fifth Circuit, see Oden v. Oktibbeha Cnty., 246 F.3d 458, 463-64 (5th Cir. 2001); the Eleventh Circuit, see Butts v. Cnty. of Volusia, 222 F.3d 891, 894 (11th Cir. 2000); and the Fourth Circuit, see Dennis v. Cnty. of Fairfax, 55 F.3d 151, 156 n.1 (4th Cir. 1995). In contrast, the Ninth Circuit has expressly held that the Civil Rights Act of 1991 has overruled the Supreme Court's holding in Jett. See Fed'n of African Am. Contractors v. City of Oakland, 96 F.3d 1204, 1205 (9th Cir. 1996) ("We hold that the Civil Rights Act of 1991 creates an implied cause of action against state actors under 42 U.S.C. § 1981, and thus statutorily overrules Jett's holding that 42 U.S.C. § 1983 provides the exclusive federal remedy against municipalities for violation of the civil rights guaranteed by 42 U.S.C. § 1981."); but see Pittman v. Oregon, 509 F.3d 1065, 1074 (9th Cir. 2007) (holding that § 1981 does not contain a cause of action against arms of the state).

Using the reasoning of Jett, this circuit has held that a plaintiff cannot use § 1981 to sue a state actor in his or her official capacity. Grinter v. Knight, 532 F.3d 567, 577 (6th Cir. 2008) ("§ 1983 provides an exclusive remedy for violations against state actors sued in their official capacities. An official capacity lawsuit against . . . a state actor[] for constitutional violations, such as race discrimination, cannot be brought under § 1981."). The district court correctly dismissed the § 1981 claims against the individual defendants in their official capacity. However, we have not addressed whether Jett bars a § 1981 claim against an individual state actor sued in his or her individual capacity. We now hold that it does.

You can read the entire opinion here: McCormick v. Miami Univ., No. 11-3614, 2012 U.S. App. LEXIS 18950, at *13-15 (6th Cir. Ohio 2012).

Circuit Split Roundup

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

• Colter Paulson, Widening A Circuit Split, The Sixth Circuit Expands Preemption For Fraud-On-The-FDA Claims, Sixth Circuit Appellate Blog (Sept. 7, 2012).

• Tax Treatment of Certain Severance Payments: Sixth Circuit Ruling Creates a Circuit Split on Whether Payments of Supplemental Unemployment Benefits Made Pursuant to a Downsizing Constitute “Wages” for Purposes of FICA, Sullivan & Cromwell LLP (Sept. 7, 2012).

• Alison Frankel, 3rd Circuit pay-for-delay ruling sparks Nexium antitrust suits, ThomsonReuters News & Insights (Sept. 6, 2012).

Fourth Circuit Joins Lopsided Split in Authority Over Grouping Guidelines

Last Thursday, the Fourth Circuit joined “a circuit split as to how to properly apply the Grouping Guideline when determining cross-references for murder or other violent offenses.” United States v. Horton, No. 11-4052, 2012 U.S. App. LEXIS 18423, 38-39 (4th Cir. Aug. 30, 2012).

 Writing for the court, Judge G. Steven Agee summarized the circuit split on this issue as follows:

There is a circuit split in the threshold issue as to whether only the offense of conviction need be a groupable offense or whether both the offense of conviction and the relevant conduct offense (the cross-referenced offense) must be groupable offenses in order to apply Subsection (a)(2). Notably, all but one of the circuits to have squarely addressed the issue have adopted Horton's view that both must be groupable. See, e.g., United States v. Williams, 431 F.3d 767, 772-73 & n.9 (11th Cir. 2005) (concluding that where conviction was for a violation of 18 U.S.C. § 922(g), the district court erred in utilizing an assault with a different firearm as relevant conduct, because assault is excluded from being grouped, and thus "the definition of relevant conduct found in § 1B1.3(a)(2) is not available to the Government"); United States v. Settle, 414 F.3d 629, 632 n.2 (6th Cir. 2005) (attempted murder is not groupable and thus could not be relevant conduct under Subsection (a)(2) in case where charge of conviction was felon-in-possession of a firearm); United States v. Jones, 313 F.3d 1019, 1023 & n.3 (7th Cir. 2002) (although holding that the Cross-Reference Provision in § 2K2.1 was appropriately applied to a murder that was relevant conduct under Subsection (a)(1), observing the murder would not be relevant conduct under Subsection (a)(2) because "the homicide charge is specifically excluded" from the Grouping Guideline); United States v. Levario-Quiroz, 161 F.3d 903, 906 (5th Cir. 1998) (in applying the Cross-Reference Provision, defendant's acts of assault with attempt to commit murder and attempted murder were not "relevant conduct" under Subsection (a)(2) because, although they were part of the same course of conduct as the offense of conviction, "they were not offenses of a character for which [USSG §] 3D1.2(d) would require grouping"). But see United States v. Kulick, 629 F.3d 165, 170-71 & n.4 (3d Cir. 2010) (concluding that only the offense of conviction need be subject to grouping).

The court’s opinion points out, however, that the Third Circuit panel responsible for creating the lopsided conflict “embraced its holding with little enthusiasm.”

In light of the weak split in authority, the Fourth Circuit joined the majority of its sister circuits:

Now squarely faced with the same issue as our sister circuits, we agree with the conclusions of the Fifth, Sixth, Seventh, and Eleventh Circuits and hold that Subsection (a)(2) of the Relevant Conduct Guideline is applicable only when both the offense of conviction and the relevant conduct offense are capable of grouping. See USSG § 1B1.1 cmt. n.1(H) (defining "offenses" to "mean[s] the offense of conviction and all relevant conduct.")

Judge Urges 9th Circuit to Reconsider its Position in “Severe” Split Over Laches Defense in Copyright Cases

Yesterday the Ninth Circuit issued its opinion in Petrella v. Metro-Goldwyn-Mayer, Inc., a case in which plaintiff Paula Petrella sued MGM Studios and a variety of other major players in the film industry for “infring[ing] her purported interest in a book and two screenplays that together allegedly formed the basis for the 1980 motion picture Raging Bull.” On appeal, the Ninth Circuit held that Ms. Petrella’s action for copyright infringement was barred by the equitable defense of laches.

Judge William Fletcher wrote a concurring opinion to call the court's attention to “a severe circuit split on the availability of a laches defense in copyright cases.”

“Our circuit has taken a wrong turn in its formulation and application of laches in copyright cases,” wrote Judge Fletcher, who urged his colleagues to “revisit our case law to provide appropriate protection to innocent copyright owners who have brought infringement suits within the statute of limitations.”

Judge Fletcher summarized the “severe circuit split” as follows:

In the Fourth Circuit, there is no laches at all. If a copyright suit is brought within the statute of limitations, it may go forward. Lyons P’ship. L.P. v. Morris Costumes, Inc., 243 F.3d 789, 797-98 (4th Cir. 2001). In the Eleventh Circuit, “there is a strong presumption that a plaintiff’s suit is timely if it is filed before the statute of limitations has run. Only in the most extraordinary circumstances will laches be recognized as a defense.” Peter Letterese & Assocs., Inc. v. World Inst. of Scientology Enters., Int’l, 533 F.3d 1287, 1320 (11th Cir. 2008). Even if laches is found, “laches serves as a bar only to the recovery of retrospective damages, not to prospective relief.” Id. at 1321. In the Second Circuit, laches is available as a bar to injunctive relief but not to money damages. See New Era Publ’ns Int’l v. Henry Holt & Co., 873 F.2d 576, 584-85 (2d Cir. 1989). In the Sixth Circuit, laches is available in only “the most compelling of cases.” Chirco v. Crosswinds Cmtys., Inc., 474 F.3d 227, 233 (6th Cir. 2007).

Our circuit is the most hostile to copyright owners of all the circuits. In the Ninth Circuit, laches can bar all relief, both legal and equitable, when “(1) the plaintiff delayed in initiating the lawsuit; (2) the delay was unreasonable; and (3) the delay resulted in prejudice.” Maj. Op., at 10176 (citing Danjaq, 263 F.3d at 951).

Circuit Split Roundup

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

• Daily Tax Report, Supreme Court Urged to Take Case to Resolve Circuit Split on Windfall Tax, Bloomberg BNA (Aug. 24, 2012).

• Amy Hocevar, Courts Split In Award Of Electronic Discovery Costs To Prevailing Party, Sixth Circuit Appellate Blog (Aug. 22, 2012).

• John Fisher, Wading Into Circuit Splits, Sixth Circuit Upholds Injunction Against Michigan Township For Violating Telecommunications Act, Sixth Circuit Appellate Blog (Aug. 22, 2012).

• Joseph Celentino, Prosecutor Given Fresh Angle for Age Bias Fight, Courthouse News Service (Aug. 27, 2012).

D.C. Circuit Creates Circuit Split Over Graphic Cigarette Warning Labels

Last Friday, the D.C. Circuit struck down an FDA mandate that required tobacco manufacturers to slap graphic warning labels on every pack of cigarettes sold encouraging smokers to kick the habit. In a 2-1 decision, the majority in R.J. Reynolds Tobacco Co. v. FDA ruled that the government could not force tobacco manufacturers to go beyond making purely factual and accurate commercial disclosures "by making 'every pack of cigarettes in the country [a] mini billboard' for the government's anti-smoking message."

     

The "FDA failed to present any data," wrote Judge Janice Brown, "much less the substantial evidence…showing that enacting their proposed graphic warnings will accomplish the agency’s stated objective of reducing smoking rates.”

 

Judge Judith Rogers disagreed with her colleagues on the panel, however. In her dissenting opinion, Judge Rogers argued that "[t]he government has an interest of paramount importance in effectively conveying information about the health risks of smoking to adolescent would-be smokers and other consumers," adding, "[t]he tobacco companies' decades of deception regarding these risks, especially the risk of addiction, buttress this interest."

 

As I pointed out last April, the Sixth Circuit reached a conflicting conclusion in Discount Tobacco City & Lottery, Inc. v. United States, a case in which a divided panel upheld the government's right to force tobacco manufacturers to print the provocative images on its products.

 

As a rule of thumb, the Supreme Court will typically let an issue on which the circuits are split "percolate" until at least three circuit courts have squarely addressed the issue. The Court may make an exception in this case since the conflict involves the constitutionality of an administrative regulation rather than a mere matter of statutory interpretation. The FDA will have ninety days to request the Supreme Court's review of the case.

Can You Hear Me Now?: 6th Circuit Joins 3 Circuit Splits That May Affect Your Cell Coverage

Yesterday the Sixth Circuit issued its opinion in T-Mobile Cent. v. Charter W. Bloomfield, in which it weighed in on not one, not two, but three circuit splits that may affect your ability to make a phone call or send a text from your mobile device. No. 11-1568 (6th Cir. Aug. 21, 2012). As I'm sure many readers are aware, service providers like T-Mobile have responded to the exploding growth in demand for mobile services by erecting cell towers across the country at a rate that would have made the oil barons who once lined the landscape with spindletops proud.

In T-Mobile Central, the national carrier proposed to build one such tower in a Michigan town to fill a coverage "deadzone," or "gap." But the town denied the carrier’s application, prompting T-Mobile to file a lawsuit in which it argued that the denial violated the Telecommunications Act. Id. The Act prohibits state and local governments from enforcing regulations that “prohibit or have the effect of prohibiting the provision of personal wireless services” where gaps in coverage exist so as to restrict the placement, construction, or modification of cell towers and other wireless service facilities. 47 USC § 332(c)(7)(B).

Circuit Split #1: Can the denial of a single application submitted by a cellular service provider have the “effect of prohibiting the provision of personal wireless services”?

The court first considered “whether the denial of a single application from T-Mobile can constitute an effective prohibition.” This question has produced a split among the circuits. On one hand, the court's opinion points out, the Fourth Circuit “has held that only a general, blanket ban on the construction of all new wireless facilities would constitute an ‘impermissible prohibition of wireless services under the TCA.’” T-Mobile Cent. (quoting MetroPCS, Inc. v. City & Cnty. of San Francisco, 400 F.3d 715, 730 (9th Cir. 2005)).

 On the other hand,

the large majority of circuits have rejected this approach. Most recently, the Ninth Circuit noted that, under such a strict construction, "persistent coverage gaps can never constitute a prohibition under the statute—courts must ask only whether local governments have (effectively) banned wireless services altogether. . . . The language of the TCA, while sparse, does not dictate such a narrow interpretation even under  a plain meaning approach." MetroPCS, 400 F.3d at 730; see also Second Generation Props., LP v. Town of Pelham, 313 F.3d 620, 629 (1st Cir. 2002) (holding that the clause "is not restricted to blanket bans on cell towers" and that "[t]he clause may, at times, apply to individual zoning decisions."); Voicestream Minneapolis, Inc. v. St. Croix Cnty., 342 F.3d 818, 830 (7th Cir. 2003); APT Pittsburgh Ltd. P'ship v. Penn Twp. Butler Cnty., 196 F.3d 469, 479-80 (3d Cir. 1999); Sprint Spectrum, L.P. v. Willoth, 176 F.3d 630, 640 (2d Cir. 1999).

 Id. After considering this issue of first impression in light of the conflicting authority, the Sixth Circuit rejected the Fourth Circuit's approach in favor of the standard adopted by the majority of circuits. Id.

Circuit Split #2: Can a cellular service provider claim that a “significant gap” in coverage exists in a particular area if a competing provider already covers that area?

The Sixth Circuit’s opinion in T-Mobile Central offers the following summary of the competing positions taken by its sister circuits on this issue:

 . . . . The Second and Third Circuits have held that no "significant gap" exists if any "one provider" is able to serve the gap area in question. See, e.g., APT Pittsburgh, 196 F.3d at 478-80; Willoth, 176 F.3d at 643. Likewise, the Fourth Circuit adopted the "one provider rule," holding that allowing carriers an individualized  cause of action "would effectively nullify local authority by mandating approval of all (or nearly all) applications." AT&T Wireless, 155 F.3d at 428. In other words, under this approach, if Verizon has coverage in an area but T-Mobile does not, T-Mobile cannot claim to have a service gap.

The Ninth Circuit rejected the "one provider" rule and adopted a standard that considers whether "a provider is prevented from filling a significant gap in its own service coverage." MetroPCS, 400 F.3d at 733. The First Circuit has also adopted this rule and observed that "[t]he fact that some carrier provides some service to some consumers does not in itself mean that the town has not effectively prohibited services to other consumers." Second Generation Props., 313 F.3d at 634. Under this approach, if Verizon had coverage in an area but T-Mobile did not, T-Mobile could still claim to have a service gap.

In 2009, the FCC issued a Declaratory Ruling that explained that the effective prohibition provision requires only a showing that a carrier has a "significant gap" in its own service coverage—the approach of the First and Ninth Circuits . . . .

Id. “In light of the FCC's endorsement of the standards used by the First and Ninth Circuits,” the Sixth Circuit panel concluded, “we now adopt this approach.” Id.

Circuit Split #3: What is the appropriate standard for determining whether there are feasible alternative locations for cellular service towers and other facilities?

The court described the third and final conflict as follows:

The second part of the MetroPCS inquiry focuses on whether there are feasible alternate locations. "Under all existing versions of the 'significant gap' test, once a wireless service provider has demonstrated that the requisite significant gap in coverage exists, it must then make some showing as to the intrusiveness or necessity of its proposed means of closing that gap." MetroPCS, 400 F.3d at 734. The circuits split at this fork:

The Second and Third Circuits require the provider to show that "the manner in which it proposes to fill the significant gap in service is the least intrusive on the values that the denial sought to serve." Penn Township, 196 F.3d at 480 (emphasis added); see also Omnipoint, 331 F.3d at 398; Unity Township, 282 F.3d at 266; Willoth, 176 F.3d at 643. The First and Seventh Circuits, by contrast, require a showing that there are "no alternative sites which would solve the problem." Second Generation Props., 313 F.3d at 635; see also St. Croix County, 342 F.3d at 834-35 (adopting the First Circuit test and requiring providers to demonstrate that there are no "viable alternatives"). . . .

MetroPCS, 400 F.3d at 734. The Ninth Circuit adopted the "least intrusive" standard. Id. at 735. Judge Cudahy found the precedents from the First and Seventh Circuit "too exacting." Id. at 734. The Second and Third Circuit's "least intrusive" standard "allows for a meaningful comparison of alternative sites before the siting application process is needlessly repeated." Id. at 734-35.

We agree with Judge Cudahy and adopt the "least intrusive" standard from the Second, Third, and Ninth Circuits. It is considerably more flexible than the "no viable alternatives" standard, as a carrier could endlessly have to search for different, marginally better alternatives. Indeed, in this case the Township would have had TMobile search for alternatives indefinitely.

Under the "least intrusive" standard, the analysis is straightforward, and TMobile satisfies its burden. See Omnipoint, 331 F.3d at 398 (noting that the "least intrusive" standard "will require a showing that a good faith effort has been made to identify and evaluate less intrusive alternatives, e.g., that the provider has considered less sensitive sites, alternative system designs, alternative tower designs, placement of antennae on existing structures, etc."). T-Mobile made numerous good-faith efforts to identify and investigate alternative sites that may have been less intrusive on the "values that the denial sought to serve." Penn Twp., 196 F.3d at 480. Specifically they considered building a monopole near the West Hills High School and on a water tower at the Knollwood Country Club. A facility at the High School would have been significantly more intrusive to the values of the community, as demonstrated by the widespread opposition to that proposal. Also, T-Mobile determined that a facility at the Knollwood Country Club location would have been too far away from the area with weak service and would not have resolved the coverage gap. The Township suggested no other alternatives beyond the two already proposed. This evidence is sufficient to make the requisite "showing as to the intrusiveness or necessity of its proposed means of closing that gap." MetroPCS, 400 F.3d at 734.

The Township's decisions had "the effect of prohibiting the provision of personal wireless services" and thus violated 47 U.S.C. § 332(c)(7)(B)(i)(II).

 Id.

Circuit Split Roundup

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

• Matthew L.M. Fletcher, Does Michigan v. Bay Mills Create a Circuit Split with Mescalero v. New Mexico over Whether IGRA Waives Tribal Immunity?, Turtle Talk (Aug. 16, 2012 10:43 A.M.).

• Steve Vladeck, Brehm: Fourth Circuit Creates Split in Contractor-Contacts Analysis, Lawfare (Aug. 12, 2012).

• Leigh Oliver, Corey Roush, & Logan Breed, Supreme Court May Decide Whether "Reverse Payment" Settlements Violate Antitrust Law, Inside Counsel (Aug. 15, 2012).

Dissenting Judge Says 4th Circuit Decision "Aggravates" Sentencing Law Circuit Split

Last Friday in United States v. Del Carmen Gomez, a Fourth Circuit panel reversed a district court’s decision to use the “modified categorical approach” to determine whether the defendant’s prior conviction constituted a “crime of violence” for purposes of calculating that defendant’s Sentencing Guidelines range. No. 12-4089 (4th Cir. Aug. 10, 2012). In doing so, the court agreed with the majority of other circuits that have considered the issue, holding that “district courts may apply the modified categorical approach to a statute only if it contains divisible categories of proscribed conduct, at least one of which constitutes—by its elements—a violent felony.” 

Judge Paul Niemeyer penned a dissenting opinion in which he criticized the majority's opinion for "adopt[ing] an entirely new rule that (1) is not mandated by any Supreme Court decision; (2) is indeed inconsistent with a long line of Fourth Circuit cases, including cases cited approvingly by the Supreme Court; (3) is both impractical and illogical; and (4) aggravates a split among the circuits."

Judge Niemeyer also provided an overview of the circuit split on the issue:

In United States v. Woods, 576 F.3d 400 (7th Cir. 2009), the Seventh Circuit adopted a per se rule limiting the modified categorical approach to facially divisible statutes. The Fifth, and Eighth Circuits have similar policies. See, e.g., United States v. Gonzalez-Terrazas, 529 F.3d 293, 297-98 (5th Cir. 2008); United States v. Boaz, 558 F.3d 800, 807-08 (8th Cir. 2009). The Ninth Circuit, which had previously adopted the same rule as Woods, reversed course in United States v. Aguila-Montes de Oca, 655 F.3d 915 (9th Cir. 2011) (en banc). It now applies the modified categorical approach to both divisible and indivisible statutes. The Sixth and Tenth Circuits follow a similar approach. See, e.g., United States v. Ventura-Perez, 666 F.3d 670 (10th Cir. 2012); United States v. Armstead, 467 F.3d 943 (6th Cir. 2006). The remaining circuits do not appear to have conclusively resolved the issue either way.

6th Circuit Joins Conflict Over Whether a Conspiracy Can Have Multiple Objectives

Yesterday the Sixth Circuit joined a circuit split over whether a single conspiracy can have multiple objectives.The case, United States v. LaPointe, involved a criminal defendant who was convicted of having participated in a conspiracy to possess the painkiller "oxycodone" with intent to distribute.

The defendant was part of a drug-trafficking ring that smuggled oxycodone across state lines for distribution in Tennessee. At trial, the prosecutors introduced evidence of recorded phone conversations during which the defendant discussed potential customers with another distributor and offered to sale the pills.

The defendant, however, denied the charge that his participation in the conspiracy was intended to help his co-conspirators distribute the drugs that he had acquired, arguing instead that his conversations with the distributor were merely an elaborate ruse to obtain large quantities of the painkiller to feed his own addiction. As such, the defendant asked the district court to instruct the jury on the lesser-included offense of conspiracy to possess without intent to distribute--a misdemeanor. The court denied the request and the jury convicted the defendant without considering the lesser-included offense instruction.

On appeal to the Sixth Circuit, Senior Judge Gilbert Stroud Merritt, Jr., writing for the panel, considered whether the same evidence used to prove that the defendant had conspired to distribute the oxycodone he once possessed could also support a conviction for conspiracy to possess the pills without intent to distribute. Judge Merritt summarized the conflicting positions taken by sister circuits on this issue:

The government’s argument implies that a conspiracy may have only one objective rather than multiple. It takes sides in a circuit split–which, until today, this court has not weighed in on–and follows the holding of an unpublished opinion from the Tenth Circuit. See United States v. Gilmore, 438 F. App’x 654 (10th Cir. 2011). Gilmore, who was convicted of conspiracy to distribute or to possess with intent to distribute, was denied a lesser-included offense instruction on conspiracy to possess because he did not try to show that all of the conspirators merely intended for him to possess drugs. See id. at 657-58. As in this case, defendant’s co-conspirators were part of a conspiracy to distribute. See id. at 658. The dispute at trial was over Gilmore’s role in that conspiracy. See id. The court concluded that he was essentially asking for an instruction on a “different, uncharged conspiracy, not a lesser included offense of the charged conspiracy.” Id.

The Tenth Circuit’s approach contradicts the First Circuit’s. See supra Boidi, 568 F.3d at 27-29. A jury convicted Boidi of conspiracy to possess drugs with intent to distribute. On appeal, his conviction was reversed because he was not granted an instruction on conspiracy to possess. See id. at 27. The court of appeals rejected the argument that a defendant must demonstrate, with separate evidence, a separate group conspiring only to possess contraband. See id. It is well-established that a single conspiracy may have multiple objectives, including the violation of several criminal laws. See Ingram v. United States, 360 U.S. 672, 679 (1959) (citing United States v. Rabinowich, 238 U.S. 78, 86 (1915)). The correct question is whether there is “some core of facts that is common to the scenario that the government sought to prove and the one that the defendant claims to show only a lesser included offense.” Id. at 28. Circumstances will sometimes require a defendant to produce new evidence demonstrating a separate conspiracy. See United States v. Garcia, 27 F.3d 1009, 1015 (5th Cir. 1994) (“A defendant is not entitled to a lesser included offense instruction simply because he admits to committing a lesser offense at a different time with other persons.”). But in Boidi the same evidence could be used to support both the greater and the lesser conspiracies. See 568 F.3d at 28.

In this case, if it had been presented with an instruction on conspiracy to possess, the jury would have looked at the same core facts as it did when convicting LaPointe of conspiracy to possess with intent to distribute. The lesser conspiracy would have had the same members–Wallace, Kaman, and [the defendant]–and the same contraband–oxycodone–as the greater. See id. (“Whether one looks at the greater or lesser crime in this case, the conspirators and drugs sold to [defendant] are identical . . . .”). The only factual question differentiating the greater conspiracy from the lesser is whether [the defendant] shared with his co-conspirators the intent to distribute the oxycodone. The evidence the government relied on to prove this final element, primarily recorded phone calls and co-conspirators’ testimony, already “support[ed] a conviction on the lesser offense.” Colon, 268 F.3d at 373. See also Boidi, 568 F.3d at 29 (“The witnesses that the government chose to prove the greater offense are the proof of the lesser included one.”) (emphasis in the original).

After considering the competing positions taken by sister circuits, the Sixth Circuit panel joined the First Circuit in holding that, “Under the theory of criminal liability for conspiracy, a group of individuals involved in a single conspiracy may have multiple objectives–say, robbery, embezzlement, drug trafficking, and murder.” As such, the court reversed the district court because “[a] properly-instructed jury could rationally acquit [the defendant] of conspiracy to possess with intent to distribute while convicting him of conspiracy to possess.”

You can read the full opinion at United States v. LaPointe, No. 11-5194 (6th Cir. Aug. 13, 2012), local coverage of the case here, and a press release issued by the Department of Justice shortly after the defendant's conviction here.

Circuit Split Roundup

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

• Steve Vladeck, Brehm: Fourth Circuit Creates Split in Contractor-Contracts Analysis, Lawfare (Aug. 12, 2012 7:00 p.m.).

• R. Hotlzman Hedrick, Split Among Federal Circuits Deepens Regarding Administrative Exhaustion of Post-Charge Retaliation Claims, Nat'l L. Rev. (Aug. 7, 2012).

• Leigh L. Oliver, Third Circuit rules in favour of FTC view on pharmaceutical patent settlements, lexology.com (Aug. 9, 2012).

• Ilya Shapiro, IRS Can’t Manipulate Tax Code to Generate More Revenue for Itself, Cato @ Liberty (Aug. 10, 2012 3:05 p.m.).

Can Prosecutors Use a Defendant's Pre-Arrest Silence as Evidence of Guilt?

Last Friday a district court in Michigan denied a criminal defendant’s habeas petition in which he argued that the prosecutor’s use of his pre-arrest silence as substantive evidence of his guilt violated his constitutional right to silence. See Hall v. Bell, Case No. 10-CV-10438 (E.D. Mich. Aug. 3, 2012). In doing so, the district court acknowledged the fact that the Supreme Court has yet to address the issue. The Court’s silence on the issue has led to the following circuit split:

A. The use of a defendant’s pre-arrest silence as substantive evidence of guilt violates the defendant’s right to silence. 

• Combs v. Coyle, 205 F.3d 269, 282–83 (6th Cir. 2000)

• United States v. Burson, 952 F.2d 1196, 1201 (10th Cir. 1991)

• Coppola v. Powell, 878 F.2d 1562, 1568 (1st Cir. 1989)

• United States ex rel. Savory v. Lane, 832 F.2d 1011, 1017 (7th Cir. 1987)

• United States v. Velarde-Gomez, 269 F.3d 1023, 1036 (9th Cir. Cal. 2001)*

B. The use of a defendant’s pre-arrest silence as substantive evidence of guilt does not violate the defendant’s right to silence.

• United States v. Zanabria, 74 F.3d 590, 593 (5th Cir. 1996)

• United States v. Rivera, 944 F.2d 1563, 1568 (11th Cir. 1991)

*The court’s opinion in Hall v. Bell cites a Ninth Circuit case for its holding that the use of “pre-arrest silence as substantive evidence of guilt does not violate the privilege against self-incrimination.” Case No. 10-CV-10438 (E.D. Mich. Aug. 3, 2012) (citing United States v. Oplinger, 150 F.3d 1061, 1066-67 (9th Cir.1998)). It’s worth noting, however, that the Ninth Circuit sitting en banc explicitly overruled Oplinger in United States v. Contreras, 593 F.3d 1135, 1136 (9th Cir. 2010) (en banc). The Ninth Circuit has actually taken the opposite position on the issue. See United States v. Velarde-Gomez, 269 F.3d 1023, 1036 (9th Cir. 2001) (“We hold that the district court erred in allowing comment on Velarde's post-arrest, pre-Miranda silence.”).

4th Circuit Deepens Division Over Scope of Computer Fraud & Abuse Act

A lot of digital ink has been spilled writing about the scope of the Computer Fraud and Abuse Act since the Ninth Circuit created a circuit split over the issue back in April. You can read our coverage of recent developments in the split here, here, here, and here.

Last week the split deepened as the Fourth Circuit joined the Ninth Circuit in adopting a narrow construction of the Act’s “unauthorized access” statute. Under this statute, an employee or former employee may face criminal charges or civil liability where they intentionally access a "protected computer" issued by their employer “without authorization” or in a manner that "exceeds authorized access” resulting in “damage and loss.”

Writing for the Fourth Circuit last week, Judge Henry Franklin Floyd summarized the competing positions taken by his colleagues sitting in sister circuits:

In short, two schools of thought exist. The first, promulgated by the Seventh Circuit and advanced by WEC here, holds that when an employee accesses a computer or information on a computer to further interests that are adverse to his employer, he violates his duty of loyalty, thereby terminating his agency relationship and losing any authority he has to access the computer or any information on it. See Int’l Airport Ctrs., LLC v. Citrin, 440 F.3d 418, 420-21 (7th Cir. 2006). Thus, for example, the Seventh Circuit held that an employee who erased crucial data on his company laptop prior to turning it in at the end of his employment violated the CFAA. Id. at 419-21. It reasoned that his "breach of his duty of loyalty terminated his agency relationship . . . and with it his authority to access the laptop, because the only basis of his authority had been that relationship." Id. at 420-21.

The second, articulated by the Ninth Circuit and followed by the district court here, interprets "without authorization" and "exceeds authorized access" literally and narrowly, limiting the terms’ application to situations where an individual accesses a computer or information on a computer without permission. See United States v. Nosal, 676 F.3d 854, 863 (9th Cir. 2012) (en banc); LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1134-35 (9th Cir. 2009). Thus, in Nosal, the Ninth Circuit, sitting en banc, held that the defendant’s co-conspirators, a group of employees at an executive search firm, did not violate the CFAA when they retrieved confidential information via their company user accounts and trans- ferred it to the defendant, a competitor and former employee. Nosal, 676 F.3d at 856, 864. It reasoned that the CFAA fails to provide a remedy for misappropriation of trade secrets or violation of a use policy where authorization has not been rescinded. Id. at 863-64. As we explain below, we agree with this latter view.

You can find the full opinion here: WEC Carolina Energy Solutions v. Miller, No. 11-1201 (4th Cir. July 26, 2012).

Earlier this week Orin Kerr of the Volokh Conspiracy discussed several related developments that may affect the Supreme Court’s willingness to resolve the division next term:

Last Thursday, the Fourth Circuit deepened the apparent circuit split by joining the Ninth Circuit in adopting a narrow interpretation of the CFAA in WEC Carolina Energy Solutions v. Miller. A day later, DOJ asked for another extension of the period in which a cert petition could be filed in United States v. Nosal, the Ninth Circuit en banc case. DOJ’s request for more time may have been at least in part a response to the Fourth Circuit’s decision the day before, although I haven’t seen the filing so I don’t actually know. It’s also possible that DOJ wasn’t planning on filing for cert in Nosal but might reconsider in light of WEC. It’s hard to know.

. . . . Chairman Leahy has proposed an amendment to the Cybersecurity Act that would . . . . add a bunch of things DOJ wants, such as enhancing the CFAA’s penalties, . . . . [and would] add the statutory fix to the definition of “exceeds authorized access” that essentially adopts the narrow view of the circuit split on the scope of the CFAA (see Section 8 of the Amendment).

Professor Kerr's post goes on to explain that, if the Supreme Court reviews the issue and ends up adopting the narrow view taken by the Fourth and Ninth Circuits, “then the statutory fix doesn’t have much value.” On the other hand, Kerr points out that “the issue is no longer certworthy” if Congress enacts the statutory fix, effectively codifying the narrow view expressed in WEC Carolina Energy Solutions. 

D.C. Circuit Joins Split Over the Preservation of Purely Legal Issues for Appeal

Yesterday the D.C. Circuit joined a circuit split over whether, to preserve the issue for appeal, counsel must raise a “purely legal” argument previously rejected at summary judgment in a Rule 50 motion for judgment as a matter of law.

The case involved estranged siblings who were reunited when their aunt passed away. Kenneth Feld invited his sister over to his condominium to join him in mourning the loss of their aunt. It wasn’t long, however, before the two got into a fight that led to the sister hurling her wine glass at one of the condominium security guards, who then promptly escorted her out of the building against her will.

After filing a lawsuit against her brother for a series of intentional torts, the sister filed “what was effectively a motion for summary judgment” in which she argued that “D.C. law does not permit a condominium owner to use force to exclude another from the building’s common areas.” The district court denied summary judgment, and the sister failed to raise the argument in a subsequent Rule 50 motion before the case went to trial.

Writing for the D.C. Circuit, Judge Thomas Griffith joined the majority of circuits in holding that a party is not required to file a Rule 50 motion to preserve a "purely legal" argument rejected at summary judgment:

It is true that we are powerless to review a challenge to the legal sufficiency of evidence that was rejected at summary judgment and not brought again in a Rule 50 motion. Ortiz v. Jordan, 131 S. Ct. 884, 892 (2011); Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394, 405 (2006). But the Supreme Court has left open the question whether the same rule applies to preserving “purely legal” arguments that were rejected at summary judgment. See Ortiz, 131 S. Ct. at 892 (declining to address this issue as unnecessary to the holding). At least six circuits have said it does not. See Houskins v. Sheahan, 549 F.3d 480, 489 (7th Cir. 2008); Banuelos v. Constr. Laborers’ Trust Funds for S. Cal., 382 F.3d 897, 902-03 (9th Cir. 2004); Rothstein v. Carriere, 373 F.3d 275, 284 (2d Cir. 2004); United Techs. Corp. v. Chromalloy Gas Turbine Corp., 189 F.3d 1338, 1344 (Fed. Cir. 1999); McPherson v. Kelsey, 125 F.3d 989, 995 (6th Cir. 1997); Ruyle v. Cont’l Oil Co., 44 F.3d 837, 841-42 (10th Cir. 1994). We agree.

* * * *

At least two circuits have taken the opposite approach and require a Rule 50 motion to preserve for appeal any issue first raised in a motion for summary judgment. See Ji v. Bose Corp., 626 F.3d 116, 128 (1st Cir. 2010); Chesapeake Paper Prods. Co. v. Stone & Webster Eng’g Corp., 51 F.3d 1229, 1235 (4th Cir. 1995).³ The Fourth Circuit has explained that the distinction we make would require courts “to engage in the dubious undertaking of determining the bases on which summary judgment is denied and whether those bases are ‘legal’ or ‘factual.’” Chesapeake, 51 F.3d at 1235. It is no doubt true that determining whether an issue is based in law or fact or some combination of the two is sometimes “vexing,” Pullman-Standard v. Swint, 456 U.S. 273, 288 (1982), and prudent counsel will make sure to renew their arguments in a Rule 50 motion. But it is equally true that there are cases in which it is clear the appellant has raised a pure issue of law, divorced from any dispute over the facts. See Chemetall, 320 F.3d at 719-20. And there is no question that the issue here was purely legal. Whether D.C. law permits a condominium owner to use force to exclude another individual from the building’s common areas does not depend on the record and turns on no facts. Karen’s pretrial motion presented the issue as a “question of law,” Pl.’s Trial Br. 11, and the district court treated it as such. After reviewing statutes and cases, the district court held that D.C. law permits a condominium owner to use reasonable force in ejecting a trespasser from the common areas of a condominium building. Pretrial Order 4. Nothing took place at trial that would have required the district court to revisit its analysis.

3. The Fifth and Eighth Circuits appear not to have settled on a position. Compare Becker v. Tidewater, Inc., 586 F.3d 358, 365 n.4 (5th Cir. 2009) (embracing the “purely legal” exception), and White Consol. Indus., Inc. v. McGill Mfg. Co., 165 F.3d 1185, 1190 (8th Cir. 1999) (same), with Black v. J.I. Case. Co., 22 F.3d 568, 571 n.5 (5th Cir. 1994) (rejecting it), and Metro. Life. Ins. Co. v. Golden Triangle, 121 F.3d 351, 354 (8th Cir. 1997) (same).

Feld v. Feld, No. 11-7066 (D.C. Circuit July 31, 2012).

[*Hat tip to Steven M. Klepper.]

[**Image courtesy of bobbykeith at flickr.]

5th Circuit Joins Split Over Plain-Error Review Ahead of High Court Ruling

Where the law on an issue is unsettled at trial, but later clarified in the defendant's favor while his appeal is pending, should the appellate court review the lower court's decision for plain error using the law as it existed at the time of trial or time of appeal?

At the moment, the answer depends on what part of the country you're in. As Terry Baynes of Thomson Reuters reported yesterday, earlier this week in United States v. Escalante-Reyes, the Fifth Circuit sitting en banc joined five other circuits in ruling that claims of plain error are reviewed using the law at the time of appeal. No. 11-40632 (5th Cir. July 25, 2012) (en banc). Other circuits, however, disagree, producing the following split in authority:

A.    Claims of Plain Error are Reviewed Using the Law at the Time of Appeal

• United States v. Farrell, No. 10-1140 (1st Cir. Feb. 17, 2012).

• United States v. Garcia, 587 F.3d 509 (2d Cir. 2009).

• United States v. Escalante-Reyes, No. 11-40632 (5th Cir. July 25, 2012) (en banc).

• United States v. Brown, No. 97-1618 (6th Cir. June 20, 2000) (unpublished).

• United States v. Cordery, 656 F.3d 1103 (10th Cir. 2011). 

• United States v. Smith, 402 F.3d 1303 (11th Cir. 2005), vacated on other grounds, 545 U.S. 1125.

B.    Claims of Plain Error are Reviewed Using the Law at the Time of Trial

• United States v. Turman, 122 F.3d 1167 (9th Cir. 1997).

• United States v. Mouling, 557 F.3d 658 (D.C. Cir. 2009).

Last month the Supreme Court agreed to resolve the circuit split during its next term, granting certiorari in United States v. Henderson, 646 F.3d 223 (5th Cir. 2011), cert. granted, No. 11-9307 (U.S. June 25, 2012). For more, check out my post from last December discussing the circuit split announced in Henderson here.

[*Hat tip to Howard Bashman over at How Appealing.]

Circuit Split Roundup

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

• Dechert LLP, U.S. Third Circuit Rejects "Scope of the Patent" Test in K-Dur, jdSupra.com (July 20, 2012) (HTML).

• Sarah Riley Howard, Sixth Circuit Holds Appeal Waivers Don't Prevent 2255s for Failure to File Appeal Notice, jdSupra.com (July 20, 2012) (HTML).

• Michael Fox, Stirrings on Smith v. Xerox in 5th Circuit Internecine Squabble, Jotting by an Employer's Lawyer (July 20, 2012) (HTML).

• David B. Ritter, 7th Circuit: Under ADA, Disabled Don't Automatically Get Vacant Job, Business Management Daily (July 22, 2012 2:00 A.M.) (HTML).

Does the Constitution Create a Right to Privacy in Information?

Last Thursday a federal court in Florida noted the existence of a split in authority over whether the Constitution creates a right to privacy in information. See Elkins v. Elenz, Case No.: 8:11-cv-2817-T-23AEP(M.D. Fla. July 19, 2012). In Elkins, the plaintiff sued two of his probation officers and a DEA agent for allegedly violating his Fourth Amendment right to privacy. Specifically, the defendant claimed that the officers coerced him into handing over a copy of his personal psychological evaluation by threatening jail time if he refused.

To determine whether the federal officers were entitled to qualified immunity, the district court considered whether there is a clearly established constitutional right to privacy in information. The court turned to the Supreme Court’s 2011 decision in Nasa v. Nelson for guidance, but found none because the Court decided Nelson on narrow grounds, leaving the broad constitutional question for another day. 131 S. Ct. 746, 757 n.10 (2011). “In short,” the district court remarked, “the verdict on informational privacy is an unequivocal ‘who knows.’”

As a result, the following circuit split still exists over the question:

Many courts hold that disclosure of at least some kinds of personal information should be subject to a test that balances the government's interests against the individual's interest in avoiding disclosure. E.g., Barry v. New York, 712 F.2d 1554, 1559 (CA2 1983); Fraternal Order of Police v. Philadelphia, 812 F.2d 105, 110 (CA3 1987); Woodland v. Houston, 940 F.2d 134, 138 (CA5 1991) (per curiam); In re Crawford, 194 F.3d 954, 959 (CA9 1999); State v. Russo, 259 Conn. 436, 459-464, 790 A.2d 1132, 1147-1150 (2002). The Sixth Circuit has held that the right to informational privacy protects only intrusions upon interests “that can be deemed fundamental or implicit in the concept of ordered liberty.” J. P. v. DeSanti, 653 F.2d 1080, 1090 (1981) (internal quotation marks omitted). The D. C. Circuit has expressed “grave doubts” about the existence of a constitutional right to informational privacy. American Federation of Govt. Employees v. HUD, 118 F.3d 786, 791 (1997).

 Nelson, 131 S. Ct. at 756 n.9.

6th Circuit Joins Split Over Ineffective Counsel Claims Arising from the Failure to File Appeal

Last week the Sixth Circuit joined a circuit split over whether an attorney's failure to file a notice of appeal despite receiving explicit instruction to do so from their client constitutes ineffective assistance of counsel. The case, Campbell v. United States, involved a defendant who entered into a plea agreement whereby he partially waived his right to appeal his conviction and sentence. No. 11-3233 (6th Cir. July 19, 2012).

The defendant nevertheless instructed his attorney to appeal his conviction. After the attorney failed to do so, the defendant filed a motion to vacate under 28 U.S.C. § 2255 in which he contended, among other things, that his attorney's failure to file an appeal despite his express instruction to do so amounted to ineffective assistance of counsel.

As such, the Sixth Circuit “granted a certificate of appealability on the sole issue of whether an attorney's failure to file a notice of appeal under these specific circumstances constitutes ineffective assistance of counsel.” Writing for the appellate panel, Judge Karen Nelson Moore noted “the absence of precedential Sixth Circuit authority on the issue” and the existence of the following circuit split: 

Several circuits have concluded that counsel must file an appeal when requested, even where the defendant has entered into a plea agreement waiving some or all of his appeal rights. See United States v. Poindexter, 492 F.3d 263, 273 (4th Cir. 2007); United States v. Tapp, 491 F.3d 263, 266 (5th Cir. 2007); Watson v. United States, 493 F.3d 960, 964 (8th Cir. 2007); Campusano v. United States, 442 F.3d 770, 777 (2d Cir. 2006); United States v. Sandoval-Lopez, 409 F.3d 1193, 1197 (9th Cir. 2005); United States v. Garrett, 402 F.3d 1262, 1266-67 (10th Cir. 2005); Gomez-Diaz v. United States, 433 F.3d 788, 790 (11th Cir. 2005). Others have come to the opposite conclusion. Nunez v. United States, 546 F.3d 450, 453 (7th Cir. 2008); United States v. Mabry, 536 F.3d 231, 241-42 (3rd Cir. 2008).

Sarlog v. United States, 422 F. App'x 399, 403 n.2 (6th Cir. 2011). After reviewing the conflicting authority and Supreme Court precedent, the Sixth Circuit in Campbell concluded that “a defendant is entitled to counsel who will follow through on express instructions to proceed with an appeal, no matter what the ultimate odds of success.”

Circuit Split Roundup

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

• Joe Celentino, Bankruptcy Circuit Split May Go to the Supreme Court, Courthouse News Service (July 11, 2012 11:54 AM PT) (HTML).

• Mark A. Platt & Ryan E. Manns, Seventh Circuit Opinion Creates Circuit Split Over the Effect of Rejection of a Contract Granting a Trademark License, lexology.com (July 11, 2012) (HTML).

• Noah Lipschultz, U.S. Supreme Court Agrees to Resolve Circuit Split Over ERISA Plan Reimbursement Rights, Employee Benefits Counsel (July 11, 2012) (HTML).

• Division Among Courts Intensifies Regarding False Claims Act's First-to-File Requirement, Ropes & Gray Alert: Government Enforcement (July 11, 2012) (PDF).

• Janet Marvel, Seventh Circuit Issues Important Decision Regarding Trademarks in Bankruptcy, Pattishall IP Blog (July 12, 2012) (HTML).

Split Over Reporter's Privilege Highlights Tension Between National Security and the First Amendment

In 2010, before an audience of college students, Justice Sotomayor remarked that the Supreme Court is likely to have to rule on the issue of balancing national security and freedom of speech. See David Batty, WikiLeaks War Logs Posting "Will Lead to Free Speech Ruling," The Guardian (Aug. 26, 2010) (HTML). In recent years, courts have increasingly struggled to balance our nation’s security needs with our constitutional right to free speech. Nowhere has this tension been more apparent than in the WikiLeaks saga; the ongoing battle between federal regulators who wish to shut down the website for publishing sensitive government documents leaked to the website by confidential sources. Scholars have speculated whether staff members of WikiLeaks could claim a reporter's privilege if the federal government attempted to compel one of them to disclose the source of documents published on the website. See Jonathan Peters, WikiLeaks Would Not Qualify to Claim Federal Reporter's Privilege in Any Form, 63 Fed. Comm. L.J. 667, 670 (2011) (PDF).

Last week, the First Circuit made passing reference to an increasingly relevant circuit split over whether journalists may invoke the so-called “reporter’s privilege” to avoid disclosing a confidential source to a grand jury. United States v. Moloney (In re Price), Nos. 11-2511 & 12-1159, at n.3 (1st Cir. July 6, 2012). Writing for the Seventh Circuit in 2003’s McKevitt v. Pallasch, the esteemed Judge Posner summarized the split in authority as follows:

A large number of cases conclude, rather surprisingly in light of Branzburg, that there is a reporter's privilege, though they do not agree on its scope. See, e.g., In re Madden, 151 F.3d 125, 128-29 (3d Cir. 1998); United States v. Smith, 135 F.3d 963, 971 (5th Cir. 1998); Shoen v. Shoen, 5 F.3d 1289, 1292-93 (9th Cir. 1993); In re Shain, 978 F.2d 850, 852 (4th Cir. 1992); United States v. LaRouche Campaign, 841 F.2d 1176, 1181-82 (1st Cir. 1988); von Bulow v. von Bulow, 811 F.2d 136, 142 (2d Cir. 1987); United States v. Caporale, 806 F.2d 1487, 1504 (11th Cir. 1986). A few cases refuse to recognize the privilege, at least in cases, which Branzburg was but this case is not, that involve grand jury inquiries. In re Grand Jury Proceedings, 5 F.3d 397, 402-03 (9th Cir. 1993); In re Grand Jury Proceedings, 810 F.2d 580, 584-86 (6th Cir. 1987). Our court has not taken sides.

Some of the cases that recognize the privilege, such as Madden, essentially ignore Branzburg, see 151 F.3d at 128; some treat the "majority" opinion in Branzburg as actually just a plurality opinion, such as Smith, see 135 F.3d at 968-69; some audaciously declare that Branzburg actually created a reporter's privilege, such as Shoen, 5 F.3d at 1292, and von Bulow v. von Bulow, supra, 811 F.2d at 142; see also cases cited in Schoen 5 F.3d at 1292 n. 5, and Farr v. Pitchess, 522 F.2d 464, 467-68 (9th Cir. 1975). The approaches that these decisions take to the issue of privilege can certainly be questioned. See In re Grand Jury Proceedings, supra, 810 F.2d at 584-86. A more important point, however, is that the Constitution is not the only source of evidentiary privileges, as the Supreme Court noted in Branzburg with reference to the reporter's privilege itself. 408 U.S. at 689, 706. And while the cases we have cited do not cite other possible sources of the privilege besides the First Amendment and one of them, LaRouche, actually denies, though without explaining why, that there might be a federal common law privilege  for journalists that was not based on the First Amendment, see 841 F.2d at 1178 n. 4; see also In re Grand Jury Proceedings, supra, 5 F.3d at 402-03, other cases do cut the reporter's privilege free from the First Amendment. See United States v. Cuthbertson, 630 F.2d 139, 146 n. 1 ([3]d Cir. 1980); In re Grand Jury Proceedings, supra, 810 F.2d at 586-88; cf. Gonzales v. National Broadcasting Co., 194 F.3d 29, 36 n. 2 (2d Cir. 1999).

* * * *

Some cases that recognize a reporter's  privilege suggest that it can sometimes shield information in a reporter's possession that comes from a nonconfidential source; in addition to the Madden, Schoen, and La Rouche cases cited above see Gonzales v. National Broadcasting Co., supra, 194 F.3d at 33; United States v. Burke, 700 F.2d 70, 76, 78 (2d Cir. 1983); United States v. Cuthbertson, supra, 630 F.2d at 147. Others disagree. United States v. Smith, supra, 135 F.3d at 972; In re Grand Jury Proceedings, supra, 810 F.2d at 584-85. The cases that extend the privilege to nonconfidential sources express concern with harassment, burden, using the press as an investigative arm of government, and so forth; see the Gonzalez, LaRouche, and Cuthbertson opinions. Since these considerations were rejected by Branzburg even in the context of a confidential source, these courts may be skating on thin ice.

* * * *

It seems to us that rather than speaking of privilege, courts should simply make sure that a subpoena duces tecum directed to the media, like any other subpoena duces tecum, is reasonable in the circumstances, which is the general criterion for judicial review of subpoenas. Fed. R. Crim. P. 17(c); CSC Holdings, Inc. v. Redisi, 309 F.3d 988, 993 (7th Cir. 2002); EEOC v. Sidley Austin Brown & Wood, 315 F.3d 696, 700 (7th Cir. 2002). We do not see why there need to be special criteria merely because the possessor of the documents or other evidence sought is a journalist. See Cohen v. Cowles Media Co., 501 U.S. 663, 669, 115 L. Ed. 2d 586, 111 S. Ct. 2513 (1991); New York Times Co. v. Jascalevich, 439 U.S. 1317, 1322, 58 L. Ed. 2d 25, 99 S. Ct. 6 (1978); cf. United States v. Ahn, 343 U.S. App. D.C. 392, 231 F.3d 26, 37 (D.C. Cir. 2000). The approach we are suggesting has support in Branzburg itself, where the Court stated that "grand jury investigations if instituted or conducted other than in good faith, would pose wholly different issues for resolution under the First Amendment. Official harassment of the press undertaken not for purposes of law enforcement but to disrupt a reporter's relationship with his news sources would have no justification. Grand juries are subject to judicial control and subpoenas to motions to quash. We do not expect courts will forget that grand juries must operate within the limits of the First Amendment as well as the Fifth." 408 U.S. at 707-08.

339 F.3d 530, 533 (7th Cir. 2003).

The Supreme Court has addressed the reporter’s privilege in a written opinion only once: Branzburg v. Hayes, 408 U.S. 665 (1972). While the First Circuit’s decision in U.S. v. Moloney (In re Price) last week did not turn on the question of whether, under Branzburg, there can ever be a reporter’s privilege, the issue will inevitably resurface at some point in the not-so-distant future. And when it does, the justices may feel obligated to resolve the entrenched circuit split over this difficult, but incredibly important question of federal law.

Circuit Split Roundup

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

• James M. Donohue, Steven M. Hogan, & Matthew MacNamara, In Re McNeal: The Eleventh Circuit Lets Debtors Strip Off Second Mortgage, State Capital Group (July 5, 2012) (HTML).

• Noah Lipschultz, U.S. Supreme Court Agrees to Resolve Circuit Split Over ERISA Plan Reimbursement Rights, Employee Benefits Counsel (July 9, 2012) (HTML).

• Collin J. Zick & Brian P. Bialas, New York Appellate Division Picks a Side in the Computer Fraud and Abuse Act Circuit Split in Two Sentences, Security, Privacy and the Law (July 10, 2012) (HTML).

• First Circuit Adopts Preponderance of Evidence as Standard for Proving Willful Trademark Infringement, Practical Law Company (July 6, 2012) (HTML).

• Emily Goldman, Holding Child Abuse Registries to a Higher Standard, Mich. J. of Envir. & Admin. L. (July 10, 2012) (HTML).

Circuit Split Roundup

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

• Michelle Olsen, Circuit Split Watch: Miranda at Booking, Appellate Daily (July 3, 2012 7:21 AM) (HTML).

• Philip Miles, SCOTUS Grants Cert in ERISA Case, LexisNexis Labor & Employment Law Community (June 28, 2012 11:25 PM EST) (HTML).

• Liz Kramer, First Circuit Makes Circuit Split Lopsided in Favor of Narrowing of Stolt-Nielsen, Arbitration Nation (July 4, 2012) (HTML).

• Matthew J. Freery, The Supreme Court to Settle Circuit Split on Supervisor Substance, Gonzalez Saggio & Harlan LLP (June 27, 2012) (HTML).

• James M. Pearl & Alicia Hancock, Unanimous En Banc Seventh Circuit Decision Expands Extraterritorial Reach of US Antitrust Laws, O'Melveny & Myers LLP (June 27, 2012) (PDF).

Courts Continue to Grapple with Employee Computer Crimes Under the Computer Fraud and Abuse Act

As Professor Stevenson and I have previously noted (here, here, and here), the Computer Fraud and Abuse Act’s (CFAA) “unauthorized-use” statute makes it a crime for current or former employees to intentionally access a protected computer issued or owned by their employer “without authorization” or in a manner that “exceeds authorized access,” resulting in damage and loss.

The nationwide split in authority over the proper scope of the terms “without authorization” and “exceeds authorized access” continues to percolate in the lower courts.  Last Friday, Judge Robert H. Bell of the U.S. District Court for the Western District of Michigan issued his opinion in Dana Ltd. v. Am. Axle & Mfg. Holdings, in which he outlines the competing views on this issue:

A.      Broad View

“One line of authorities takes a broad view of the statute, holding that ‘an employee accesses a computer 'without authorization' whenever the employee, without the employer's knowledge, acquires an interest that is adverse to that of his employer or is guilty of a serious breach of loyalty.’” Dana Ltd. v. Am. Axle & Mfg. Holdings, File No. 1:10-CV-450 (W.D. Mich. June 29, 2012) (quoting Guest-Tek Interactive Entm't, Inc. v. Pullen, 665 F. Supp. 2d 42, 45 (Dist. Mass. 2009)). The court pointed out that the Fifth, Seventh, and Eleventh Circuits have each adopted a broad view of the statute:

• United States v. John, 597 F.3d 263 (5th Cir. 2010) (holding that the CFAA encompasses limits placed on the use of information obtained by permitted access to a computer system "at least when the user knows or reasonably should know that he or she is not authorized to access a computer and information obtainable from that access in furtherance of or to perpetrate a crime").

• Int'l Airport Ctrs., L.L.C. v. Citrin, 440 F.3d 418 (7th Cir. 2006) (holding that employee's breach of his duty of loyalty terminated his agency relationship with his employer, and with it his authority to access his employer's computer).

• United States v. Rodriguez, 628 F.3d 1258 (11th Cir. 2010) (holding that Social Security Administration employee violated the CFAA when he accessed personal records for nonbusiness reasons in violation of SSA policy).

B.      Narrow View

“The other line of cases takes a narrow view of the statute, holding that the CFAA prohibits improper ‘access’ of computer information, rather than misuse or misappropriation of such information.” Dana Ltd. v. Am. Axle & Mfg. Holdings, File No. 1:10-CV-450 (W.D. Mich. June 29, 2012). As the court in Dana Ltd. reiterated, the Ninth Circuit as well as several district courts have recently adopted a more narrow view: 

• LVRC Holdings L.L.C. v. Brekka, 581 F.3d 1127 (9th Cir. 2009) (noting that the plain language of the CFAA does not support the argument that authorization to use a computer ceases when an employee resolves to use the computer contrary to the employer's interest, and further noting that because the CFAA is a criminal statute, any ambiguity must be resolved in favor of lenity); United States v. Nosal, 676 F.3d 854, 863 (9th Cir. 2012).

• Orbit One Commc'ns, Inc. v. Numerex Corp., 692 F. Supp. 2d 373, 385 (S.D.N.Y. 2010) ("The plain language of the CFAA supports a narrow reading. The CFAA expressly prohibits improper 'access' of computer information. It does not prohibit misuse or misappropriation.").

• Shamrock Foods Co. v. Gast, 535 F. Supp. 2d 962, 965 (Dist. Ariz. 2008) (holding that the plain language of the CFAA, its legislative history, and principles of statutory construction support a narrow reading of "authorization").

• Int'l Ass'n of Machinists & Aerospace Workers v. Werner-Matsuda, 390 F. Supp. 2d 479, 499 (Dist. Md. 2005) (holding that the CFAA does not proscribe "authorized access for unauthorized or illegitimate purposes").

• Ajuba Int'l, L.L.C. v. Saharia, Case No. 11-12936 (E.D. Mich. May 14, 2012) (adopting the narrow approach and holding that allegation that employee lost any authorization he had to access employer's computers, or, exceeded his authorization when he accessed the computers in violation of confidentiality and use limitations, failed to state a claim under the CFAA).

• ReMedPar, Inc. v. AllParts Med., L.L.C., 683 F. Supp. 2d 605, 609 (M.D. Tenn. 2010) (construing "without authorization" narrowly, and dismissing CFAA claim based on use of information the employee was authorized to obtain in a fashion that was adverse to the employer's interests).

• Black & Decker, Inc. v. Smith, 568 F. Supp. 2d 929 (W.D. Tenn. 2008) (rejecting Citrin's agency analysis, and dismissing CFAA claim that was based not on the employee's accessing of information, but on his later misuse thereof).

• Am. Family Mut. Ins. Co. v. Rickman, 554 F. Supp. 2d 766, 771 (N.D. Ohio 2008) (noting in dicta that the CFAA "was not meant to cover the disloyal employee who walks off with confidential information. Rather, the statutory purpose is to punish trespassers and hackers.").

Although the Sixth Circuit has yet to squarely address the issue, the court in Dana Ltd. speculated that the Sixth Circuit would join the “growing number of cases” that have adopted the narrow view based on its heavy reliance on the Ninth Circuit’s definition of the term "without authorization.” The court further explained that the rule of lenity, the plain meaning of the statutory text, and the CFAA's legislative history lend support to the court's narrow interpretation.

We will continue to follow this issue closely as it continues to make its way up to the Supreme Court.

10-Circuit Split Over Finality of Benefits Decision Under the Social Security Act

Last Thursday Judge Raymond Fisher of the Ninth Circuit noted the existence of a deep circuit split involving Title II of the Social Security Act.

For those readers who are not acquainted with the application process for social security disability benefits, the Social Security Administration (SSA) relies on an army of administrative law judges (ALJs) to determine whether applicants are eligible for disability benefits. Applicants who are not happy with the Administration’s initial decision may request reconsideration, followed by a hearing with an ALJ. If the applicant is still not satisfied, they may appeal the ALJ’s decision to the Administration's “Appeals Council.”

Only after the Commissioner of Social Security has rendered a “final decision” may the applicant request a district court’s review of that decision. "In such a proceeding," Judge Fisher explained last week, "the Commissioner . . . shall file a certified copy of the transcript of the record including the evidence upon which the findings and decision complained of are based." Brewes v. Comm'r of SSA, No. 11-35216 (9th Cir. June 14, 2012) (quoting 42 U.S.C. § 405(g)). "Based on 'the pleadings and transcript of the record,' the court hearing the case may enter 'a judgment affirming, modifying, or reversing the decision of the Commissioner . . . with or without remanding the cause for a rehearing." Id.

What qualifies as a "final decision," you ask? The answer to this question is particularly important to district courts tasked with reviewing the administrative record because it determines whether the court should treat evidence submitted by the applicant to the Appeals Council, but not to the ALJ, as having been submitted after the Commissioner's final decision.

But given the SSA's multilayered appeals process coupled with its ambiguous regulations, courts have understandably struggled to come up with a uniform definition for the term. Some circuits have held that "final decision" refers to the ALJ’s decision alone, while other circuits have held that the final decision also includes the Appeals Council’s denial of a request for review (district courts adopting the latter position may consider new evidence submitted to the Appeals Council). Compare Matthews v. Apfel, 239 F.3d 589, 593-94 (3d Cir. 2001) (holding that the “final decision” to be reviewed by a district court refers only to the ALJ’s decision); Falge v. Apfel, 150 F.3d 1320, 1323 (11th Cir. 1998) (same); Cotton v. Sullivan, 2 F.3d 692, 696 (6th Cir. 1993) (same); Eads v. Sec'y of Dep't of Health & Human Servs., 983 F.2d 815, 817-18 (7th Cir. 1993) (same); with Higginbotham v. Barnhart, 405 F.3d 332, 336 (5th Cir. 2005) (holding that, because the Appeals Council’s denial of a request for review is part of the “final decision,” the district court may review and consider evidence that the appellant submitted to the Appeals Council but failed to submit to the ALJ); Perez v. Chater, 77 F.3d 41, 44-45 (2d Cir. 1996); O'Dell v. Shalala, 44 F.3d 855, 859 (10th Cir. 1994) (same); Ramirez v. Shalala, 8 F.3d 1449, 1452 (9th Cir. 1993) (same); Nelson v. Sullivan, 966 F.2d 363, 366 (8th Cir. 1992) (same); Wilkins v. Sec'y, Dept. of Health Human Servs., 953 F.2d 93, 96 (4th Cir. 1991) (en banc) (same).

Circuits Split Over Discretionary Function Exception's Burden of Proof

Today's circuit split involves the Federal Tort Claims Act (FTCA), which generally permits civil actions against the United States “for injury or loss of property . . . caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.” 28 U.S.C. § 1346(b)(1). 

The FTCA’s discretionary function exception, however, “immunizes conduct of government employees that arises from legislative and administrative decisions grounded in social, economic, and political policy, protecting against liability that would seriously handicap efficient government operations.” Carroll v. U.S., 661 F.3d 87, 99 (1st Cir. 2011).

Last Tueday a federal court in Puerto Rico identified a circuit split over the two-tiered framework used by courts to determine the applicability of the FTCA's discretionary function exception:

The applicability of the discretionary framework [sic] exception is determined according to a well-established two-tiered framework. Said exception applies if the conduct underlying the FTCA claim (1) "involves an element of judgment or choice, and (2) was susceptible to policy-related analysis." Sanchez ex rel. D.R.-S. v. U.S.,671 F.3d 86, 93 (1st Cir. 2012) (citing Limone v. United States, 579 F.3d 79, 101 (1st Cir. 2009) (quoting Berkovitz v. United States, 486 U.S. 531, 536, 108 S. Ct. 1954, 100 L. Ed. 2d 531, (1988)) (internal citations and quotation marks omitted). "Conduct does not involve an element of judgment or choice if a "'federal statute, regulation, or policy specifically prescribes a course of action for an employee to follow,' because 'the employee has no rightful option but to adhere to the directive.'" Sanchez ex rel. D.R.-S., 671 F.3d at 93 (citing United States v. Gaubert, 499 U.S. 315, 322, 111 S. Ct. 1267, 113 L. Ed. 2d 335 (1991)). Furthermore, conduct is susceptible to policy analysis if some plausible policy justification could have undergirded the challenged conduct; it is not relevant whether the conduct was the end product of a policy-driven analysis. Sanchez ex rel. D.R.-S., 671 F.3d at 93 (citing Shansky v. United States, 164 F.3d 688, 692 (1st Cir. 1999)). Thus, a court must first identify the conduct alleged to have caused the harm and then determine whether the conduct can be fairly described as discretionary, and if so, decide whether the exercise or non-exercise of the granted discretion is actually or potentially influenced by policy considerations. Carroll, 661 F.3d at 100 (citing Fothergill v. United States, 566 F.3d 248, 252 (1st Cir. 2009)).

If the challenged conduct is both discretionary and policy-based, there is no subject-matter jurisdiction for the claim. Carroll, 661 F.3d at 100 (citing Montijo–Reyes, 436 F.3d at 24). First Circuit precedent places the burden on the plaintiff to show that discretionary conduct was not policy-driven and, thus falls outside the exception. Carroll, 661 F.3d at 100 n. 15 (citing Bolduc, 402 F.3d at 60, 62). However, the First Circuit has noted that there exists a circuit split as to whether the plaintiff or the government bears the burden of proof regarding the discretionary function exception. Carroll, 661 F.3d at 100 (citing Hart v. United States, 630 F.3d 1085, 1089 n.3 (8th Cir. 2011)).

Timmerman v. United States, CIVIL NO. 11-1816(JAG) (Dist P.R. June 5, 2012). 

In St. Tammany Parish ex rel. Davis v. FEMA, the Fifth Circuit offered a more comprehensive overview of this split in authority:

While the plaintiff bears the burden of showing an unequivocal waiver of sovereign immunity, it is less clear whether the plaintiff or the government bears the burden of proof to show whether a discretionary function exception to a waiver of sovereign immunity applies. Our sister courts of appeals are split. Some place the burden on the plaintiff to show that the government's conduct does not fall within the discretionary function exception. SeeAragon v. United States, 146 F.3d 819, 823 (10th Cir.1998). Others place the burden on the government to show that the exception applies. See Merando v. United States, 517 F.3d 160, 164 (3d Cir.2008); Terbush v. United States, 516 F.3d 1125, 1128 (9th Cir.2008) (citing Prescott v. United States, 973 F.2d 696, 702 n. 4 (9th Cir.1992)); Stewart v. United States, 199 F.2d 517, 520 (7th Cir. 1952). Other courts of appeals have declined to decide the issue, being uncertain whether the Supreme Court in Gaubert intended to place the burden of proving the non-applicability of the exception on the plaintiff as a consequence of its holding that "[f]or a complaint to survive a motion to dismiss, it must allege facts which would support a finding that the challenged actions are not the kind of conduct that can be said to be grounded in the policy of the regulatory regime," 499 U.S. at 324-25, 111 S.Ct. 1267. See Sharp v. United States, 401 F.3d 440, 443 n. 1 (6th Cir.2005) (declining to decide whetherGaubert altered its earlier view that the government bears the burden); Ochran v. United States, 117 F.3d 495, 504 n. 4 (11th Cir. 1997) (refusing to decide which party bears the burden, but placing the "burden of production of the policy considerations that might influence the challenged conduct ... on the Government" after the plaintiff alleged facts facially placing the claims outside of the exception); Autery v. United States, 992 F.2d 1523, 1526 n. 6 (11th Cir.1993) (refusing to decide which party bears the burden); Kiehn v. United States, 984 F.2d 1100, 1105 n. 7 (10th Cir.1993) (refusing to decide which party bears the burden). But see Prescott, 973 F.2d at 702 n. 4 (holding that the government bears the burden because Gaubert decided that "plaintiff must advance a claim that is facially outside the discretionary function exception in order to survive a motion to dismiss" but "did not deal with the burden of proof question").

In the context of a motion to dismiss, however, the courts have widely held that the plaintiff must invoke jurisdiction by pleading facts that facially allege matters outside of the discretionary function exception. SeePrescott, 973 F.2d at 702 n. 4; Blakey v. U.S.S. Iowa, 991 F.2d 148, 154 (4th Cir.1993); Autery, 992 F.2d at 1526 n. 6; Kiehn, 984 F.2d at 1105; Carlyle v. U.S., Dep't of the Army, 674 F.2d 554, 556 (6th Cir.1982). Relying onGaubert and without addressing which party bears the ultimate burden of proving the applicability of the exception, this court agreed that a plaintiff must "allege a claim sufficient to survive a motion to dismiss based on the `discretionary function' exception." ALX El Dorado, Inc. v. Sw. Sav. & Loan Ass'n/FSLIC, 36 F.3d 409, 411 n. 13 (5th Cir. 1994). On this motion to dismiss, therefore, the Parish must advance a claim that is facially outside the discretionary function exception in order to survive the motion to dismiss, regardless of which party bears the ultimate burden of proof.

556 F. 3d 307 n.3 (5th Cir. 2009).

[Image courtesy of kevin dean at www.betaart.com.]

Does the Voting Rights Act Permit "Coalition Suits" by Different Minority Groups?

Last month the D.C. Circuit upheld the constitutionality of Section 5 of the Voting Rights Act, the controversial statute that requires voting districts with a history of discrimination to obtain “preclearance” from either the Department of Justice or the U.S. District Court for the District of Columbia before modifying state or local voting practices or procedures. A number of Supreme Court watchers, including the Blog of Legal Times, have speculated that the D.C. Circuit’s decision last month in Shelby County, Alabama v. Holder set the stage “for an eventual U.S. Supreme Court battle.”

While the public's attention may be focused on Section 5 for the time being, a lesser known issue involving Section 2 of the Voting Rights Act may soon steal the Court's attention. Last week in Pope v. County of Albany, the Second Circuit called attention to a circuit split over Section 2 of the Act, which generally prohibits states and political subdivisions from maintaining voting requirements, practices, or procedures that “result[] in a denial or abridgment of the right of any citizen of the United States to vote on account of race or color.” 42 U.S.C. § 1973(a).

Under Section 2, members of minority groups may bring claims of vote dillution where multimember voting districts “submerge” minority voters into the majority masses. Bartlett v. Strickland, 556 U.S. 1 (2009). To bring an actionable claim in such cases, a plaintiff must show, among other things, that the members of their protected class form a “politically cohesive” minority group. Thornburg v. Gingles, 478 U.S. 30, 51 (1986).

As the Second Circuit pointed out last week, however, “[t]he circuits are split as to whether different minority groups may be aggregated to establish a Section 2 claim.” Writing for the panel, Judge Reena Raggi offered the following summary of this division:

Compare Nixon v. Kent Cnty., 76 F.3d 1381, 1393 (6th Cir. 1996) (en banc) (holding such "coalition suits" impermissible), with Concerned Citizens of Hardee Cnty. v. Hardee Cnty. Bd. of Comm'rs, 906 F.2d 524, 526 (11th Cir. 1990) (approving aggregate Section 2 claims) and Campos v. City of Baytown, 840 F.2d 1240, 1244 (5th Cir. 1988) (same). In Bridgeport Coalition for Fair Representation v. City of Bridgeport, 26 F.3d 271, 275-76 (2d Cir.), vacated on other grounds, 512 U.S. 1283, 115 S. Ct. 35, 129 L. Ed. 2d 931 (1994), this court identified a Section 2 violation in a challenge that aggregated blacks and Hispanics, without specifically ruling that such aggregation was permissible. Meanwhile, the Supreme Court has expressly reserved decision on the issue, while at the same time indicating that a plaintiff relying on an aggregated minority group would have to demonstrate that its members are politically cohesive. See Growe v. Emison, 507 U.S. 25, 41, 113 S. Ct. 1075, 122 L. Ed. 2d 388 (1993); see also Badillo v. City of Stockton, 956 F.2d 884, 890-91 (9th Cir. 1992) (affirming dismissal of Section 2 claim because plaintiffs failed to show sufficient black/Hispanic cohesion, without discussing whether aggregation was in fact permissible).

In finding plaintiffs not to have demonstrated the political cohesiveness of blacks and Hispanics in Albany County, the district court did not, as plaintiffs argue, hold that, as a matter of law, the burden needed to be satisfied through statistical evidence. See Thornburg v. Gingles, 478 U.S. at 57 n.25 (stating that where applicable election data is not available, "courts must rely on other factors" to determine whether Section 2 claim has been proved); see also Brewer v. Ham, 876 F.2d 448, 454 (5th Cir. 1989) (noting that "statistical evidence is not a sine qua non to establishing cohesion"). Rather, the court found that the particular socioeconomic data and anecdotal evidence advanced by plaintiffs to demonstrate the aggregated group's political cohesiveness were not factually convincing. We express no view on this factual determination because plaintiffs' injunction motion fails, in any event, at the third step of Gingles analysis, majority bloc voting. See infra at II.B.3.b.

Pope v. County of Albany, Docket No. 11-3439-cv (2d Cir. N.Y. May 29, 2012).