Per New Hampshire Ins. Co. v. C'Est Moi, Inc., 2008 WL 732487, *3-*4 (9th Cir. Mar. 20, 2008).
“We consider the doctrine that's on everyone's lips: uberrimae fidei.” With that dramatic beginning, Chief Judge Kozinski authors an opinion creating a circuit split on this fascinating issue of maritime insurance contracts. Note, however, that Judge Kozinski probably does not mean this introduction facetiously – Eugene Volokh, a previous clerk, recently wrote a blog post concerning the phrase, and Judge McKeown wrote a long opinion concerning the doctrine just a month ago. The doctrine – which literally translated means ‘of the most abundant good faith’ – requires those seeking marine insurance to reveal every fact that is material to the risk.
The insurance policy in this case contained a provision which voided coverage if the applicant intentionally conceals or misrepresents facts relating to the insurance application or risk thereof. The question is whether this provision was sufficient to override the default application of uberrimae fidei. Judge Kozinski says no and requires an ‘unequivocal’ and ‘clear policy statement’ demonstrating both parties’ intent to supercede the common law obligation. In so holding, he acknowledges the creation of a circuit split with the CA 11, which held that similar language did override the default common law rule. Interestingly, this whole discussion appears to be dicta, because the panel continues to affirm the district court’s finding that there was material misrepresentation sufficient to void the insurance even under its own terms.
For additional coverage, see The California Appellate Report, The California Blog of Appeal, Decision of the Day, and the Volokh Conspiracy.
Friday, March 21, 2008
Split Created: Are Potential Affirmative Defenses Part of the Double Jeopardy Analysis?
Per United States v. Davenport, 2008 WL 732491 (9th Cir. Mar. 20, 2008)
A forensic analysis of Winston Davenport’s computer revealed more than 800 pictures and videos containing child pornography. Davenport entered a plea agreement and pled admitted that he was guilty of the each of the elements of both receipt and possession of child pornography. He was sentenced to 78 months incarceration and lifetime supervised release for each crime, the sentences to be served concurrently. Davenport appeals his conviction, arguing that it violates the Fifth Amendment prohibition on double jeopardy because the same conduct underlies both counts. As this was not raised at sentencing, the Ninth reviews for plain error.
The Fifth Amendment prohibits multiple punishments for the same offense. Two statutes do not prohibit the same offense if one “requires proof of a fact which the other does not.” Blockburger, 284 U.S. 299, 304 (1932). Receipt and possession purportedly differ from each other in two important aspects. First, receipt requires that the images themselves travel in interstate commerce, whereas possession only requires that the materials used to make the image so have traveled. Secondly, the possession charge is subject to an affirmative defense and safe harbor for those who attempt to destroy the image or turn it in to law enforcement authorities.
The Ninth Circuit panel rejects the first distinction, reasoning that satisfaction of the commerce nexus for receipt would also satisfy it for possession. It continues to also reject the second basis for distinction, reasoning that this affirmative defense, which relies on mitigation rather than directly negating an element of the crime, does not require the government to prove an additional fact, per Blockburger. The panel therefore vacates the sentence and remands for the district court to vacate one of the two convictions. Judge Graber dissents, arguing that CAs 1,4 have applied Blockburger to include affirmative defenses. She notes that these two are the only circuits to have addressed the issue, although the panel cited the CA 2 in support of its rejection of mitigating affirmative defenses. She concludes her dissent by noting that congressional intent, which is an important double jeopardy inquiry, clearly authorizes separate punishments for the two crimes.
A forensic analysis of Winston Davenport’s computer revealed more than 800 pictures and videos containing child pornography. Davenport entered a plea agreement and pled admitted that he was guilty of the each of the elements of both receipt and possession of child pornography. He was sentenced to 78 months incarceration and lifetime supervised release for each crime, the sentences to be served concurrently. Davenport appeals his conviction, arguing that it violates the Fifth Amendment prohibition on double jeopardy because the same conduct underlies both counts. As this was not raised at sentencing, the Ninth reviews for plain error.
The Fifth Amendment prohibits multiple punishments for the same offense. Two statutes do not prohibit the same offense if one “requires proof of a fact which the other does not.” Blockburger, 284 U.S. 299, 304 (1932). Receipt and possession purportedly differ from each other in two important aspects. First, receipt requires that the images themselves travel in interstate commerce, whereas possession only requires that the materials used to make the image so have traveled. Secondly, the possession charge is subject to an affirmative defense and safe harbor for those who attempt to destroy the image or turn it in to law enforcement authorities.
The Ninth Circuit panel rejects the first distinction, reasoning that satisfaction of the commerce nexus for receipt would also satisfy it for possession. It continues to also reject the second basis for distinction, reasoning that this affirmative defense, which relies on mitigation rather than directly negating an element of the crime, does not require the government to prove an additional fact, per Blockburger. The panel therefore vacates the sentence and remands for the district court to vacate one of the two convictions. Judge Graber dissents, arguing that CAs 1,4 have applied Blockburger to include affirmative defenses. She notes that these two are the only circuits to have addressed the issue, although the panel cited the CA 2 in support of its rejection of mitigating affirmative defenses. She concludes her dissent by noting that congressional intent, which is an important double jeopardy inquiry, clearly authorizes separate punishments for the two crimes.
Thursday, March 20, 2008
Split Noted: What Presumption Should Apply When Determining Whether Retiree Health Benefits Have Vested?
Per Noe v. PolyOne Corp., 2008 WL 723769, *16-*17 (6th Cir. Mar. 19, 2008)
The ability of manufacturers to meet their legacy costs is an issue of great importance in the current troubled economy. Unilateral alteration or termination of vested benefits violates § 301 of the Labor Management Relations Act. Pension benefit plans are subject to mandatory vesting, whereas welfare benefit plans (such as the health benefits at issue in this case) do not automatically vest. Thus, courts must evaluate the agreements at issue in determining whether the parties to a welfare plan agreement intended the benefits to vest.
In this case, Plaintiffs (retirees and spouses of deceased retirees) brought suit against PolyOne Corporation (formerly a division of B.F. Goodrich) for unilaterally altering the health benefits to which the allege entitlement. The text of their agreement was unclear as to whether the health benefits were even extended to the employees at issue, much less as to whether they had vested. Relying on the fact that PolyOne treated the employees as if they had had the benefits until 2006, both the trial and appellate court answer the first question in the affirmative. On the vesting issue, the district court granted summary judgment to PolyOne, finding that they had not vested. This panel of the Sixth Circuit reverses, finding as a matter of law that the benefits had vested. Judge Sutton dissents in relevant part, arguing that, because there was evidence cutting both ways, the issue of whether the benefits had vested was not fit for summary judgment and should have been left for a jury to determine.
At the conclusion of his dissent, Judge Sutton notes a circuit split on the issue of what inference or presumption should apply when resolving the issue of whether welfare benefits under collective bargaining agreements have vested. He notes three possible positions, with relevant support:
The ability of manufacturers to meet their legacy costs is an issue of great importance in the current troubled economy. Unilateral alteration or termination of vested benefits violates § 301 of the Labor Management Relations Act. Pension benefit plans are subject to mandatory vesting, whereas welfare benefit plans (such as the health benefits at issue in this case) do not automatically vest. Thus, courts must evaluate the agreements at issue in determining whether the parties to a welfare plan agreement intended the benefits to vest.
In this case, Plaintiffs (retirees and spouses of deceased retirees) brought suit against PolyOne Corporation (formerly a division of B.F. Goodrich) for unilaterally altering the health benefits to which the allege entitlement. The text of their agreement was unclear as to whether the health benefits were even extended to the employees at issue, much less as to whether they had vested. Relying on the fact that PolyOne treated the employees as if they had had the benefits until 2006, both the trial and appellate court answer the first question in the affirmative. On the vesting issue, the district court granted summary judgment to PolyOne, finding that they had not vested. This panel of the Sixth Circuit reverses, finding as a matter of law that the benefits had vested. Judge Sutton dissents in relevant part, arguing that, because there was evidence cutting both ways, the issue of whether the benefits had vested was not fit for summary judgment and should have been left for a jury to determine.
At the conclusion of his dissent, Judge Sutton notes a circuit split on the issue of what inference or presumption should apply when resolving the issue of whether welfare benefits under collective bargaining agreements have vested. He notes three possible positions, with relevant support:
- Presumption against vesting because a company’s unchangeable promise to pay healthcare benefits for life is a significant and unusual one—particularly when it arises from a three-year contract. CAs 3,4,7,8.
- Presumption in favor of vesting because retirees who lose benefits often are not in a position either to return to work or to require their union to negotiate new benefits. CA 6 – see the next paragraph.
- No presumption because these contracts should be interpreted no differently from other collectively bargained contracts. CA 1.
Judge Sutton did not include the Sixth Circuit in category 2, arguing that Yard-Man was less a presumption and more an inference. Nonetheless, he acknowledges that the Sixth Circuit, in this case and others, appears to apply this precedent in a manner befitting a category 2 presumption.
If your legal realism bone is tingling, it could be because the Sixth Circuit is made up of several states, including Michigan and Ohio, at the core of the rust belt with strong labor union traditions.
Wednesday, March 19, 2008
Update: Does Winning a Preliminary Injunction Suffice To Make a Plaintiff the Prevailing Party for Purposes of § 1988 Attorneys’ Fees?
Per Biodiversity Coalition Alliance v. Stem, 2008 WL 714047, *9-*12 (10th Cir. Mar. 18, 2008)
When I started this blog, I assumed it would take several months before any case I had written about would be considered by the Justices. Reality, however, proved otherwise. On behalf of a unanimous Tenth Circuit panel, Justice O’Connor wrote an opinion on this split (previously discussed here - 4th bullet).
In this case, Plaintiff BCA sued to prevent logging from taking place in a national forest. The District Judge granted a preliminary injunction, relying primarily on the equities of the case. While discovery was going forward, lightening literally struck the forest, creating a forest fire and forcing the Forest Service to develop alternate plans. The case was thus mooted, but BCA moved for attorneys’ fees, claiming to be the prevailing party under § 1988. Following previous precedent, Justice O’Connor and the panel hold that a preliminary injunction only satisfies the prevailing party inquiry under Buckhannon if it is granted based on the merits of a case, rather than the equities.
The CAs 2,5,6,7,11 agree; only the CAs 4,9 employ a different test. The Ninth Circuit believes that a preliminary injunction almost always satisfies the prevailing party standard unless the plaintiff subsequently loses on the merits, whereas the Fourth Circuit holds that a preliminary injunction can almost never satisfy Buckhannon’s requirements.
Also in this opinion, Justice O’Connor leaves three key words out of her description of the Court’s holding in Sole v. Wyner. The three words are in the brackets of this quotation: “The plaintiff there had filed a lawsuit claiming the state’s "Bathing Suit" rule, which required all patrons of state parks to wear[, at a minimum,] a thong and (if female) a bikini top, violated the First Amendment.” Those three words sort of change the rule, now don’t they? h/t How Appealing.
When I started this blog, I assumed it would take several months before any case I had written about would be considered by the Justices. Reality, however, proved otherwise. On behalf of a unanimous Tenth Circuit panel, Justice O’Connor wrote an opinion on this split (previously discussed here - 4th bullet).
In this case, Plaintiff BCA sued to prevent logging from taking place in a national forest. The District Judge granted a preliminary injunction, relying primarily on the equities of the case. While discovery was going forward, lightening literally struck the forest, creating a forest fire and forcing the Forest Service to develop alternate plans. The case was thus mooted, but BCA moved for attorneys’ fees, claiming to be the prevailing party under § 1988. Following previous precedent, Justice O’Connor and the panel hold that a preliminary injunction only satisfies the prevailing party inquiry under Buckhannon if it is granted based on the merits of a case, rather than the equities.
The CAs 2,5,6,7,11 agree; only the CAs 4,9 employ a different test. The Ninth Circuit believes that a preliminary injunction almost always satisfies the prevailing party standard unless the plaintiff subsequently loses on the merits, whereas the Fourth Circuit holds that a preliminary injunction can almost never satisfy Buckhannon’s requirements.
Also in this opinion, Justice O’Connor leaves three key words out of her description of the Court’s holding in Sole v. Wyner. The three words are in the brackets of this quotation: “The plaintiff there had filed a lawsuit claiming the state’s "Bathing Suit" rule, which required all patrons of state parks to wear[, at a minimum,] a thong and (if female) a bikini top, violated the First Amendment.” Those three words sort of change the rule, now don’t they? h/t How Appealing.
Tuesday, March 18, 2008
Split Widened: Does Requiring Sex Offender Registration Without a Hearing Violate Due Process?
Per Doe v. Sex Offender Registry Bd., 2008 WL 661866 (Mass. Mar. 14, 2008)
Nota Bene: The holding of this case is predicated exclusively on the Massachusetts Declaration of Rights, and thus it both does not create a direct split based on the same law and is unreviewable by the Supreme Court. However, cases on both sides of the split have previously relied on the federal Constitution.
In 1979, Plaintiff Doe entered an Alford plea to a charge of rape and was sentenced to two years of probation. Twenty-two years after completing that probation without incident, the Sex Offender Registry Board notified him that he had to register because of his conviction. Doe moved for a hearing to present evidence that he posed no threat of recidivism. The statutory provisions governing this program left the Board no discretion to waive the registration requirements for those convicted of violent crimes (such as rape), and therefore the hearing was denied.
The registration statute, as applied in this case, is unquestionably retroactive; it does not permit any discretionary consideration of Doe’s current situation. Such statutory schemes, however, are regulatory as opposed to punitive, and thus do not violate double jeopardy. Retroactive regulatory laws in Massachusetts must pass an interest-balancing test, with the burden on the challenger to prove irrationality. The Massachusetts Supreme Judicial Court holds that the failure to hold a hearing violated Doe’s right to due process.
The Third Circuit (construing New Jersey law), District of the District of Columbia, The Oregon Supreme Court, and the Pennsylvania Supreme Court have all reached a similar conclusion under the Federal Constitution’s due process provisions. The Third Circuit and Pennsylvania Court both held that the state must provide pre-notification review process wherein the state bears the burden of proof that there is a potential risk of reoffense. The Massachusetts decision is also in line with opinions from Arkansas and Ohio, which have upheld registration statutes against due process challenges because of their provisions for hearings. Courts in Alaska, Illinois, Michigan, and Washington (state) have all come to the opposite conclusion, finding no due process violation in mandatory registration even in the absence of a hearing because the prior conviction was already a matter of public record. For more on various holding concerning the validity, construction, and application of community notification statutes, see 78 A.L.R.5th 489.
Also from Massachusetts on Friday – a noted split on whether the Sixth Amendment right to counsel attaches at the time of the issuance of a criminal complaint. In Commonwealth v. Holliday, 2008 WL 662242, *12 n. 18 (Mass. Mar. 14, 2008), the Supreme Judicial Court held that the answer depends on the purpose served by the complaint under state law. Prior precedent held that a complaint in Massachusetts does not trigger the Sixth Amendment, and the Court holds that Holliday’s Miranda waiver renders the Sixth Amendment violation, if any, harmless.
Nota Bene: The holding of this case is predicated exclusively on the Massachusetts Declaration of Rights, and thus it both does not create a direct split based on the same law and is unreviewable by the Supreme Court. However, cases on both sides of the split have previously relied on the federal Constitution.
In 1979, Plaintiff Doe entered an Alford plea to a charge of rape and was sentenced to two years of probation. Twenty-two years after completing that probation without incident, the Sex Offender Registry Board notified him that he had to register because of his conviction. Doe moved for a hearing to present evidence that he posed no threat of recidivism. The statutory provisions governing this program left the Board no discretion to waive the registration requirements for those convicted of violent crimes (such as rape), and therefore the hearing was denied.
The registration statute, as applied in this case, is unquestionably retroactive; it does not permit any discretionary consideration of Doe’s current situation. Such statutory schemes, however, are regulatory as opposed to punitive, and thus do not violate double jeopardy. Retroactive regulatory laws in Massachusetts must pass an interest-balancing test, with the burden on the challenger to prove irrationality. The Massachusetts Supreme Judicial Court holds that the failure to hold a hearing violated Doe’s right to due process.
The Third Circuit (construing New Jersey law), District of the District of Columbia, The Oregon Supreme Court, and the Pennsylvania Supreme Court have all reached a similar conclusion under the Federal Constitution’s due process provisions. The Third Circuit and Pennsylvania Court both held that the state must provide pre-notification review process wherein the state bears the burden of proof that there is a potential risk of reoffense. The Massachusetts decision is also in line with opinions from Arkansas and Ohio, which have upheld registration statutes against due process challenges because of their provisions for hearings. Courts in Alaska, Illinois, Michigan, and Washington (state) have all come to the opposite conclusion, finding no due process violation in mandatory registration even in the absence of a hearing because the prior conviction was already a matter of public record. For more on various holding concerning the validity, construction, and application of community notification statutes, see 78 A.L.R.5th 489.
Also from Massachusetts on Friday – a noted split on whether the Sixth Amendment right to counsel attaches at the time of the issuance of a criminal complaint. In Commonwealth v. Holliday, 2008 WL 662242, *12 n. 18 (Mass. Mar. 14, 2008), the Supreme Judicial Court held that the answer depends on the purpose served by the complaint under state law. Prior precedent held that a complaint in Massachusetts does not trigger the Sixth Amendment, and the Court holds that Holliday’s Miranda waiver renders the Sixth Amendment violation, if any, harmless.
Split Noted: What is the Yardstick to Evaluate Decisions Whether to Recuse?
Per United States v. Holland, 2008 WL 696903, *9 (9th Cir. Mar. 17, 2008)
Russell Holland pled guilty to charges of mailing threatening communications and threatening the President of the United States. He also has a long criminal record, including a prior conviction for threats against state officials. Holland somehow obtained the sentencing judge’s home number and, in keeping with his criminal behavior, left threatening messages prior to sentencing. At sentencing, the judge acknowledged these threats but stated that they “are attempts to manipulate the criminal justice system rather than threats as such.” He proceeded to impose sentence without objection, so the Ninth reviews his failure to recuse himself for plain error.
28 U.S.C. § 455 details the bases for recusals; § 455 (a) states that disqualification is mandatory “in any proceeding in which his impartiality might reasonably be questioned.” The circuit split noted in this case concerns what reasonably means. The CAs 2, 9, and 10 define the reasonable person standard to mean a well-informed, thoughtful observer who is not hypersensitive. On the other hand, the CA 7 applies a stricter standard because outside observers are more sensitive to the appearance of impartiality than the judiciary itself.
The Ninth Circuit panel creates an objective test to apply when a threat is the basis for recusal. The judge must evaluate (1) defendant’s capacity to carry out the threat, (2) the context of the threat, and (3) the purpose of the threat. The panel continues to note that the final factor is perhaps the most important. In this case, where the sentencing judge found that Holland was attempting to manipulate the system and had a history of making empty threats, any failure to recuse was not plainly erroneous.
Also from the Ninth yesterday, the best case name ever: United States v. Approximately 64,695 Pounds of Shark Fins. Coverage from Decision of the Day.
Russell Holland pled guilty to charges of mailing threatening communications and threatening the President of the United States. He also has a long criminal record, including a prior conviction for threats against state officials. Holland somehow obtained the sentencing judge’s home number and, in keeping with his criminal behavior, left threatening messages prior to sentencing. At sentencing, the judge acknowledged these threats but stated that they “are attempts to manipulate the criminal justice system rather than threats as such.” He proceeded to impose sentence without objection, so the Ninth reviews his failure to recuse himself for plain error.
28 U.S.C. § 455 details the bases for recusals; § 455 (a) states that disqualification is mandatory “in any proceeding in which his impartiality might reasonably be questioned.” The circuit split noted in this case concerns what reasonably means. The CAs 2, 9, and 10 define the reasonable person standard to mean a well-informed, thoughtful observer who is not hypersensitive. On the other hand, the CA 7 applies a stricter standard because outside observers are more sensitive to the appearance of impartiality than the judiciary itself.
The Ninth Circuit panel creates an objective test to apply when a threat is the basis for recusal. The judge must evaluate (1) defendant’s capacity to carry out the threat, (2) the context of the threat, and (3) the purpose of the threat. The panel continues to note that the final factor is perhaps the most important. In this case, where the sentencing judge found that Holland was attempting to manipulate the system and had a history of making empty threats, any failure to recuse was not plainly erroneous.
Also from the Ninth yesterday, the best case name ever: United States v. Approximately 64,695 Pounds of Shark Fins. Coverage from Decision of the Day.
Friday, March 14, 2008
Splits Created or Widened in the Circuits - 3/11-3/13
- Can a Bankruptcy Court Release a Non-Debtor from Creditor Liability when the Creditor Objects? In re Airadigm Comms., Inc., 2008 WL 649704, *25-*30 (7th Cir. Mar. 12, 2008)
The facts of this litigation, which concerns a complicated second bankruptcy reorganization plan, are largely irrelevant to the strict legal question at the heart of the circuit split. Section 524(e) of the Bankruptcy Code provides that the “discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt.” The question is whether this section precludes the non-consensual discharge of liability of a non-debtor, or merely defines the common effect of a Chapter 11 reorganization without limiting other possible equitable remedies.
As a matter of first impression, this panel of the Seventh Circuit finds that the latter definition is more consistent with the statutory text. Section 524(e) is a savings clause, and should be understood as such. “If Congress meant to include such a limit, it would have used the mandatory terms ‘shall’ or ‘will’ rather than the definitional term ‘does.’” *27. Furthermore, the traditional equitable powers of the bankruptcy court extend to marshalling the resources and permitting the non-consensual release on non-party liability. In so holding, the Seventh joins the CAs 2,4,6; the CAs 9,10 disagree and favor the first reading of this section. Even though the CAs 2,4,6,7 agree that discharge should be allowed in some circumstances, they differ as to what the governing standard should be. In this case, the Seventh Circuit finds that the release was appropriately tailored – subject to the other conditions of the plan, limited to liability in connection with the plan, and excluding willful misconduct – and necessary to effectuate the reorganization.
- Does the Dual Sovereignty Doctrine Apply to the Sixth Amendment Right to Counsel? United States v. Burgest, 2008 WL 659550, *3-*8 (11th Cir. Mar. 13, 2008)
Earl Burgest was charged for possession of cocaine in violation of Florida law. Thereafter, he was interrogated by federal investigators and indicted on two counts of possession of crack-cocaine with intent to distribute. The district court admitted the statements made during the interrogation at his trial, and Burgest was convicted. This appeal challenges the statements’ admission because, even though Burgest signed a valid Miranda waiver of his Fifth Amendment rights, he asserts the interrogation violated his Sixth Amendment rights which had attached by virtue of the state law charge.
The Eleventh rejects this argument, noting that the Sixth Amendment right to counsel is offense specific. “Because the Sixth Amendment right to counsel is offense specific, Burgest's prior invocation of his right to counsel for the charged state offense did not attach to Burgest's uncharged federal drug offenses if the federal offenses are separate offenses from the state drug offense. We hold that where conduct violates laws of separate sovereigns, the offenses are distinct for purposes of the Sixth Amendment right to counsel.” *6. In so holding, the Eleventh widens a circuit split between the CAs 1,4,5 (applying doctrine) and the CAs 2,8 (not applying).
Subscribe to:
Posts (Atom)